Stock Plans and Share-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

Schedule of Pre-tax Expense and Income Tax Benefits Associated with Share-Based Compensation

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.

	Third Quarters				Nine Months
(Dollars in millions)	2020		2019		2020		2019
Share-Based Compensation Expense:
Performance Units	$	14	$	8	6		$	23
Stock Options	3		2		16		9
Restricted Stock Units and Awards	2		2		5		6
Employee Stock Purchase Plan	1		1		3		3
Stock Awards for Directors	—		—		2		2
Total Share-Based Compensation Expense	$	20	$	13	$	32	$	43
Income Tax Benefit	$	6	$	6	$	17	$	41

Schedule of Weighted Average Assumptions

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

	Nine 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 nine months ended September 30, 2020 and September 30, 2019 were estimated at the grant date with the following weighted average assumptions:

	Third Quarters				Nine Months
	2020	2019			2020			2019
Weighted-average grant-date fair value	N/A	$	15.44		$	18.87		$	17.99
Stock options valuation assumptions:
Annual dividend yield	N/A	1.4		%	1.2		%	1.3		%
Risk-free interest rate	N/A	1.4		%	1.4		%	2.5		%
Annualized volatility	N/A	25.7		%	26.0		%	25.7		%
Expected life (in years)	N/A	6.5			6.0			6.1
Other pricing model inputs:
Weighted-average grant-date market price of CSX stock (strike price)	N/A	$	66.35		$	79.48		$	69.96

Schedule of Shares Issued Under Employee Stock Purchase Plan

During third quarter and nine months ended September 30, 2020 and September 30, 2019, the company issued the following shares under this program:

	Third Quarters				Nine Months
	2020		2019		2020		2019
Shares issued (in thousands)	120		144		242		249
Weighted average purchase price per share	$	59.28	$	52.66	$	60.40	$	52.72