Stock Plans and Share-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2020

Share-based Payment Arrangement [Abstract]

Schedule of Share-Based Compensation and Related Income Tax Benefit

Total pre-tax expense and income tax benefits associated with share-based compensation are shown in the table below. Income tax benefits include impacts from option exercises and the vesting of other equity awards.

	First Quarters
(Dollars in millions)	2020		2019
Share-Based Compensation Expense:
Stock Options	$	10	$	2
Performance Units	9		6
Restricted Stock Units and Awards	2		2
Stock Awards for Directors	2		2
Employee Stock Purchase Plan	1		1
Total Share-Based Compensation Expense	$	24	$	13
Income Tax Benefit	$	9	$	28

Schedule of Weighted Average Assumptions

The fair values of the performance units awarded during the quarters ended March 31, 2020 and March 31, 2019 were primarily calculated using a Monte-Carlo simulation model with the following weighted-average assumptions:

	First Quarters
	2020		2019
Weighted-average assumptions used:
Annual dividend yield	N/A		1.4	%
Risk-free interest rate	1.4	%	2.5	%
Annualized volatility	24.5	%	27.6	%
Expected life (in years)	2.9		2.9

Schedule of Fair Value Assumptions for Stock Option Awards

The fair values of all stock option awards during the quarters ended March 31, 2020 and March 31, 2019 were estimated at the grant date with the following weighted average assumptions:

	First Quarters
	2020			2019
Weighted-average grant-date fair value	$	18.87		$	17.45
Stock options valuation assumptions:
Annual dividend yield	1.2		%	1.3		%
Risk-free interest rate	1.4		%	2.6		%
Annualized volatility	26.0		%	25.8		%
Expected life (in years)	6.0			6.0
Other pricing model inputs:
Weighted-average grant-date market price of CSX stock (strike price)	$	79.48		$	68.09