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Debt and Credit Agreements
 9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Debt and Credit Agreements Debt and Credit Agreements
Total activity related to long-term debt as of the end of third quarter 2024 is shown in the table below. For fair value information related to the Company's long-term debt, see Note 9, Fair Value Measurements.

(Dollars in Millions)
Current PortionLong-term PortionTotal
Long-term Debt as of December 31, 2023
$558 $17,975 $18,533 
2024 Activity:
Long-term Debt Issued— 550 550 
Long-term Debt Repaid(556)— (556)
Reclassifications4 (4)— 
Hedging, Discount, Premium and Other Activity— 14 14 
Long-term Debt as of September 30, 2024
$6 $18,535 $18,541 

Debt Issuance
On September 18, 2024, CSX issued $550 million of 4.90% notes due 2055. These notes 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. The net proceeds will be used for general corporate purposes, which may include debt repayments, repurchases of CSX's common stock, capital investment and working capital requirements.

Interest Rate Derivatives
Fair Value Hedges
In fourth quarter 2023, CSX entered into two separate fixed-to-floating interest rate swaps classified as fair value hedges. The swaps are designed to hedge 10 years of interest rate risk associated with market fluctuations attributable to the Secured Overnight Financing Rate ("SOFR") on a cumulative $250 million of fixed rate outstanding notes which are due in 2033. The cumulative fair value of these swaps, which is included in other long-term assets on the consolidated balance sheet, was an asset of $21 million and $19 million as of September 30, 2024 and December 31, 2023, respectively.

In first quarter 2022, CSX entered into five separate fixed-to-floating interest rate swaps classified as fair value hedges. The swaps are designed to hedge 10 years of interest rate risk associated with market fluctuations attributable to the SOFR on a cumulative $800 million of fixed rate outstanding notes which are due between 2036 and 2040. The cumulative fair value of these swaps, which is included in other long-term liabilities on the consolidated balance sheet, was a liability of $99 million and $107 million as of September 30, 2024 and December 31, 2023, respectively.
NOTE 7.    Debt and Credit Agreements, continued

The 2022 swaps will expire in 2032 and the 2023 swaps will expire in 2033. If settled early, the remaining cumulative fair value adjustment to the hedged notes will be amortized over the remaining life of the associated notes. The cumulative adjustment to the hedged notes is included in long-term debt on the consolidated balance sheet as shown in the following table below.
(Dollars in Millions)September 30, 2024December 31, 2023
Notional Value of Hedged Notes$1,050 $1,050 
Fair Value Asset Adjustment to Hedged Notes21 19 
Fair Value Liability Adjustment to Hedged Notes(99)(107)
Carrying Amount of Hedged Notes$972 $962 

Gains and losses resulting from changes in fair value of the interest rate swaps offset changes in the fair value of the hedged portion of the underlying debt with no gain or loss recognized due to hedge ineffectiveness. The difference in the net fixed-to-float interest settlement on the derivatives is recognized in interest expense and is summarized as follows.

Third QuartersNine Months
(Dollars in Millions)2024202320242023
Interest Expense Impact (Increase) Decrease$(8)$(7)$(24)$(19)

Cash Flow Hedges
The Company had forward starting interest rate swaps, classified as cash flow hedges, that had an aggregate notional value of $500 million at inception. 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. Under the terms of the Adjustable Interest Rate (LIBOR) Act, the reference rate on the swaps were automatically replaced with daily compounded SOFR plus the fallback spread on July 1, 2023, the LIBOR replacement date. As of December 31, 2023, the asset value of the forward starting interest rate swaps was $48 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.

In fourth quarter 2022, CSX settled a portion equal to $160 million notional value of the cash flow hedges, which resulted in CSX receiving a cash payment of $52 million. In second quarter 2023, CSX executed a partial settlement equal to $113 million notional value of the cash flow hedges, which resulted in CSX receiving a cash payment of $44 million. In third quarter 2023, CSX partially settled an additional $113 million notional value of the cash flow hedges and received a cash payment of $51 million. The unsettled aggregate notional value of these swaps was $114 million as of December 31, 2023.

In second quarter 2024, CSX executed a final settlement equal to $114 million notional value of the cash flow hedges, which resulted in CSX receiving a cash payment of $52 million included in other operating activities on the consolidated cash flow statement. As of September 30, 2024, no unsettled aggregate notional value of these swaps remains and there is no related asset or liability.
NOTE 7.    Debt and Credit Agreements, continued

The unrealized gain associated with the settled portion of the hedges will continue to be classified in AOCI until the associated debt instrument is issued in the future. 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 amounts related to the hedge, recorded net of tax in other comprehensive income, are summarized in the table below.
Third QuartersNine Months
(Dollars in Millions)2024202320242023
Unrealized Gain - Net$— $14 $3 $4 
See Note 9, Fair Value Measurements, and Note 10, Other Comprehensive Income (Loss), for additional information about the Company's hedges.

Credit Facility
The Company 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 SOFR or an agreed-upon replacement reference rate, plus a spread that depends upon CSX's senior unsecured debt ratings. This facility expires in February 2028. As of September 30, 2024, 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 third quarter 2024, CSX was in compliance with all covenant requirements under this 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 outstanding at any one time. Proceeds from issuances of the notes are expected to be used for general corporate purposes. At September 30, 2024, the Company had no outstanding debt under the commercial paper program.