Earnings Per Share

3 Months Ended

Mar. 31, 2020

The following table sets forth the computation of basic earnings per share and earnings per share, assuming dilution:



	First Quarters
	2020		2019
Numerator (Dollars in millions):
Net Earnings	$	770	$	834

Denominator (Units in millions):
Average Common Shares Outstanding	772		814
Other Potentially Dilutive Common Shares	1		3
Average Common Shares Outstanding, Assuming Dilution	773		817

Net Earnings Per Share, Basic	$	1.00	$	1.02
Net Earnings Per Share, Assuming Dilution	$	1.00	$	1.02

Basic earnings per share is based on the weighted-average number of shares of common stock outstanding. Earnings per share, assuming dilution, is based on the weighted-average number of shares of common stock outstanding and common stock equivalents adjusted for the effects of common stock that may be issued as a result of potentially dilutive instruments. CSX's potentially dilutive instruments are made up of equity awards including performance units and employee stock options.

When calculating diluted earnings per share, the potential shares that would be outstanding if all outstanding stock options were exercised are included. This number is different from outstanding stock options because it is offset by shares CSX could repurchase using the proceeds from these hypothetical exercises to obtain the common stock equivalent. Approximately 1.4 million and 600 thousand of total average outstanding stock options for the quarters ended March 31, 2020 and March 31, 2019, respectively, were excluded from the diluted earnings per share calculation because their effect was antidilutive.

Share Repurchases

In January 2019, the Company announced a $5 billion share repurchase program. At March 31, 2020, approximately $1.2 billion of authority remained under this program. Previously, share repurchases were completed under a share repurchase program originally announced in October 2017 for $1.5 billion, later increased to $5 billion in February 2018, and completed in January 2019. During the first quarters of 2020 and 2019, the Company engaged in the following repurchase activities:

NOTE 2. Earnings Per Share, continued

Share repurchases may be made through a variety of methods including, but not limited to, open market purchases, purchases pursuant to Rule 10b5-1 plans, accelerated share repurchases and negotiated block purchases. The timing of share repurchases depends upon management's assessment of marketplace conditions and other factors, and the program remains subject to the discretion of the Board of Directors. Future share repurchases are expected to be funded by cash on hand, cash generated from operations and debt issuances. Shares are retired immediately upon repurchase. In accordance with the Equity Topic in the Accounting Standards Codification ("ASC"), the excess of repurchase price over par value is recorded in retained earnings.

Dividend Increase

On February 12, 2020, the Company's Board of Directors authorized an 8% increase in the quarterly cash dividend to $0.26 per common share.

First Quarters

Shares Repurchased (Millions)

Cost of Shares (Dollars in millions)