Stock Plans and Share-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement [Abstract]

Schedule of Share-Based Compensation (Benefit) Expense 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. The credit to share-based compensation expense for performance units in second quarter and six months ended 2020 is due to lower expected payouts on existing plans.

	Second Quarters				Six Months
(Dollars in millions)	2020		2019		2020		2019
Share-Based Compensation Expense:
Performance Units	$	(17)	$	9	(8)		$	15
Stock Options	3		5		13		7
Restricted Stock Units and Awards	1		2		3		4
Employee Stock Purchase Plan	1		1		2		2
Stock Awards for Directors	—		—		2		2
Total Share-Based Compensation (Benefit) Expense	$	(12)	$	17	$	12	$	30
Income Tax Benefit	$	2	$	7	$	11	$	35

Schedule of Weighted Average Assumptions

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

	Six Months
	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 and six months ended June 30, 2020 and June 30, 2019 were estimated at the grant date with the following weighted average assumptions:

	Second Quarters						Six Months
	2020			2019			2020			2019
Weighted-average grant-date fair value	$	17.77		$	20.51		$	18.87		$	18.00
Stock options valuation assumptions:
Annual dividend yield	1.5		%	1.2		%	1.2		%	1.3		%
Risk-free interest rate	0.5		%	2.4		%	1.4		%	2.5		%
Annualized volatility	30.1		%	25.4		%	26.0		%	25.7		%
Expected life (in years)	6.5			6.5			6.0			6.1
Other pricing model inputs:
Weighted-average grant-date market price of CSX stock (strike price)	$	70.87		$	78.58		$	79.48		$	69.97