Earnings Per Share

12 Months Ended

Dec. 31, 2023

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


	Years Ended
	2023		2022		2021
Numerator (Dollars in Millions):
Net Earnings	$	3,715	$	4,166	$	3,781



Denominator (Units in Millions):
Average Common Shares Outstanding	2,008		2,136		2,250
Other Potentially Dilutive Common Shares	5		5		5
Average Common Shares Outstanding, Assuming Dilution	2,013		2,141		2,255

Net Earnings Per Share, Basic	$	1.85	$	1.95	$	1.68
Net Earnings Per Share, Assuming Dilution	$	1.85	$	1.95	$	1.68

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 stock options, performance and restricted stock units.

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, which is included in Note 4, Stock Plans and Share-Based Compensation, 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 equity awards that were excluded from the diluted earnings per share calculation because their effect was antidilutive is in the table below.


	Years Ended
	2023	2022	2021
Antidilutive Stock Options Excluded from Diluted EPS (Units in Millions)	3	3	2

Share Repurchase Programs

During November 2023, the share repurchase program announced in July 2022 was completed and the Company began repurchasing shares under the $5 billion share repurchase program approved on October 17, 2023. Total repurchase authority remaining was $4.8 billion as of December 31, 2023. Previous share repurchase programs were announced in October 2020 and January 2019 and were completed in July 2022 and June 2021, respectively.

NOTE 2. Earnings Per Share, continued

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.

Share Repurchase Activity

During 2023, 2022 and 2021, CSX repurchased the following shares:


	Years Ended
	2023		2022		2021
Shares Repurchased (Units in Millions)	112		151		90
Cost of Shares (Dollars in Millions)	$	3,482	$	4,731	$	2,886
Average Price Paid per Share	$	30.95	$	31.25	$	31.91

The Inflation Reduction Act of 2022 imposes a nondeductible 1% excise tax on the net value of most share repurchases made after December 31, 2022. Excise tax commensurate with net share repurchases is reflected in equity and a corresponding liability for excise taxes payable is included in other current liabilities on the consolidated balance sheet. Amounts shown in the table above exclude the impact of this excise tax.

Structured Share Repurchases

Periodically, CSX enters into structured agreements for the repurchase of CSX shares. Upon execution of each agreement, the Company pays a fixed amount of cash in exchange for the right to receive either CSX stock or a predetermined amount of cash, including a premium. Shares acquired through these structured share repurchase agreements were recorded in common stock and retained earnings and are included in the share repurchases table above. There were no repurchases under a structured agreement in 2023 or 2022. In 2021, the Company paid a net total of approximately $378 million and received approximately 12 million shares as a result of entering into and settling structured share repurchase agreements. Premiums received were not material.

Dividend Increase

On February 14, 2024, the Company's Board of Directors authorized a 9% increase in the quarterly cash dividend to $0.12 per common share effective March 2024.