Earnings Per Share

6 Months Ended

Jun. 30, 2022

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


	Second Quarters				Six Months
	2022		2021		2022		2021
Numerator (Dollars in millions):
Net Earnings	$	1,178	$	1,173	$	2,037	$	1,879



Denominator (Units in millions):
Average Common Shares Outstanding	2,158		2,270		2,173		2,276
Other Potentially Dilutive Common Shares	5		5		5		5
Average Common Shares Outstanding, Assuming Dilution	2,163		2,275		2,178		2,281

Net Earnings Per Share, Basic	$	0.55	$	0.52	$	0.94	$	0.83
Net Earnings Per Share, Assuming Dilution	$	0.54	$	0.52	$	0.94	$	0.82

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. The total average outstanding stock options that were excluded from the diluted earnings per share calculation because their effect was antidilutive is in the table below.


	Second Quarters		Six Months
	2022	2021	2022	2021
Antidilutive Stock Options Excluded from Diluted EPS (Millions)	3	2	3	2

NOTE 2. Earnings Per Share, continued

Share Repurchases

The Company continues to repurchase shares under the $5 billion share repurchase program announced in October 2020. Total repurchase authority remaining was $488 million as of June 30, 2022. Previously, shares were repurchased under a program announced in January 2019 that was completed in June 2021. On July 19, 2022, a new incremental $5 billion share repurchase program was approved.

During second quarters and six months ended 2022 and 2021, the Company engaged in the following repurchase activities:


	Second Quarters				Six Months
	2022		2021		2022		2021
Shares Repurchased (Millions) (a)	47		22		76		40
Cost of Shares (Dollars in millions)	$	1,499	$	701	$	2,515	$	1,252

(a) For second quarter and six months 2021, shares repurchased includes 3 million shares that were purchased in June 2021, but were not retired until July 1st, 2021, due to timing of the stock split that occurred on June 28, 2021. These shares are reflected as outstanding as of June 30, 2021, on the consolidated statement of changes in shareholder's equity.

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

In February 2022, the Company's Board of Directors authorized a 7% increase in the quarterly cash dividend to $0.10 per common share.