Debt and Credit Agreements

12 Months Ended

Dec. 31, 2020

Debt at December 2020 and December 2019 is shown in the table below. For information regarding the fair value of debt, see Note 13, Fair Value Measurements.


	Maturity at December	Average Interest Rates at December	December		December
(Dollars in Millions)	2020	2020	2020		2019
Notes	2021-2068	4.0%	$	16,542	$	16,056
Equipment Obligations(a)	2021-2023	6.3%	160		178
Finance Leases	2020-2026	14.5%	3		4

Subtotal Long-term Debt (including current portion)			$	16,705	$	16,238
Less Debt Due within One Year			(401)		(245)
Long-term Debt (excluding current portion)			$	16,304	$	15,993

(a) Equipment obligations are secured by an interest in certain railroad equipment.

Debt Issuance & Early Redemption of Long-term Debt

CSX issued the following notes, which are included in the consolidated balance sheets under long-term debt and may be redeemed by the Company at any time, subject to payment of certain make-whole premiums:

•On December 1, 2020, issued $500 million of 2.50% notes due 2051. On December 30, 2020, the proceeds of the offering were used to fully redeem CSX’s outstanding $500 million of 3.70% notes that otherwise would have matured on November 1, 2023.

•On March 30, 2020, issued $500 million of 3.8% notes due 2050.

•On September 12, 2019, issued $400 million of 2.40% notes due 2030 and $600 million of 3.35% notes due 2049. On October 15, 2019, a portion of the net proceeds was used to fully redeem CSX’s outstanding $500 million of 3.70% notes that otherwise would have matured on October 30, 2020.

•On February 28, 2019, issued $600 million of 4.25% notes due 2029, which was a reopening of existing notes originally issued in November 2018, and $400 million of 4.50% notes due 2049.

The net proceeds from debt issuances will be used for general corporate purposes, which may include debt repayments, repurchases of CSX's common stock, capital investment, working capital requirements, improvements in productivity and other cost reductions. For more information regarding a non-cash debt transaction with a related party, see Note 15, Investment in Affiliates and Related-Party Transactions.

NOTE 10. Debt and Credit Agreements, continued

Long-term Debt Maturities (Net of Discounts, Premiums and Issuance Costs)


(Dollars in Millions)	Maturities at
Fiscal Years Ending	December 2020
2021	$	401
2022	162
2023	139
2024	551
2025	601
Thereafter	14,851
Total Long-term Debt Maturities, including current portion	$	16,705

Interest Rate Derivatives

On both April 29, 2020, and July 9, 2020, the Company executed a forward starting interest rate swap with a notional value of $250 million for an aggregate notional value of $500 million. These swaps were effected to hedge the benchmark interest rate associated with future interest payments related to the anticipated refinancing of $850 million of 3.25% notes due in 2027. In accordance with the Derivatives and Hedging Topic in the ASC, the Company has designated these swaps as cash flow hedges. As of December 31, 2020, the asset value of the forward starting interest rate swaps was $80 million and was recorded in other long-term assets on the consolidated balance sheet.

Unrealized gains or losses associated with changes in the fair value of the hedge are recorded net of tax in accumulated other comprehensive income (“AOCI”) on the consolidated balance sheet. Unless settled early, the swaps will expire in 2027 and the unrealized gain or loss in AOCI will be recognized in earnings as an adjustment to interest expense over the same period during which the hedged transaction affects earnings. Unrealized gains, recorded net of tax in other comprehensive income, related to the hedges were $62 million for the year ended December 31, 2020.

Credit Facilities

CSX has a $1.2 billion unsecured, revolving credit facility backed by a diverse syndicate of banks. This facility allows same-day borrowings at floating interest rates, based on LIBOR or an agreed-upon replacement, plus a spread that depends upon CSX's senior unsecured debt ratings. LIBOR is the London Interbank Offered Rate, which is a daily reference rate based on the interest rates at which banks offer to lend unsecured funds. This facility expires in March 2024, and as of December 31, 2020, the Company had no outstanding balances under this facility.

Commitment fees and interest rates payable under the facility were similar to fees and rates available to comparably rated investment-grade borrowers. As of December 31, 2020, CSX was in compliance with all covenant requirements under the facility.

Commercial Paper

Under its commercial paper program, which is backed by the revolving credit facility, the Company may issue unsecured commercial paper notes up to a maximum aggregate principal amount of $1.0 billion. Proceeds from issuances of the notes are expected to be used for general corporate purposes. At December 31, 2020, the Company had no commercial paper outstanding.