Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

The following table presents goodwill and other intangible asset balances and adjustments to those balances for the years ended December 31, 2024 and 2023. The goodwill balance attributed to the Company's trucking operating segment was $159 million, $245 million, and $239 million as of December 2024, 2023 and 2022, respectively. The goodwill balance attributed to the rail segment was $80 million at the end of each of the years shown. All intangible assets are attributed to the trucking operating segment.


	Goodwill		Intangible Assets
(Dollars in Millions)	Net Carrying Amount		Cost		Accumulated Amortization		Net Carrying Amount		Total Goodwill and Other Intangible Assets - Net
Balance at December 31, 2022	$	319	$	198	$	(15)	$	183	$	502
Additions	6		8		—		8		14
Amortization	—		—		(10)		(10)		(10)
Balance at December, 31, 2023	$	325	$	206	$	(25)	$	181	$	506
Additions	22		25		—		25		47
Amortization	—		—		(12)		(12)		(12)
Impairment	(108)		—		—		—		(108)
Balance at December, 31, 2024	$	239	$	231	$	(37)	$	194	$	433

Additions

As a result of the acquisition of Pan Am on June 1, 2022, CSX recognized $17 million of goodwill in the rail segment. The goodwill was calculated as the excess of the consideration paid over the fair value of net assets assumed and relates primarily to the ability of CSX to extend the reach of its service to a wider customer base over an expanded territory, creating new market prospects and efficiencies. Goodwill recognized in this acquisition is not deductible for tax purposes.

During 2024 and 2023 the Company's trucking operating segment, which is solely comprised of Quality Carriers, completed several acquisitions that were immaterial individually and in aggregate. The acquisitions resulted in the addition of $22 million and $6 million of goodwill in the trucking operating segment in 2024 and 2023, respectively. Other intangible assets recognized as part of these acquisitions were $25 million and $8 million in 2024 and 2023, respectively.

Amortization

The Company's intangible assets balance primarily relates to intangibles recognized as part of the acquisition of Quality Carriers in 2021. Intangible assets recognized from the acquisition of $180 million consist of $150 million of customer relationships and $30 million of trade names that will be amortized over a weighted-average period of 20 years and 15 years, respectively.

Impairment

During 2023, the Company changed the date of its annual assessment of goodwill to October 1st for all reporting units. The change in testing date for goodwill is a change in accounting principle, which management believes is preferable as it will create consistency in the Company's goodwill impairment testing procedures across its reporting units. This change was not material to CSX's consolidated financial statements and it did not delay, accelerate, or avoid any potential goodwill impairment charges. No impairment was recorded as a result of the 2023 assessment.

NOTE 19. Goodwill and Other Intangible Assets, continued

The Company performed a quantitative assessment as of October 1, 2024, to estimate the fair value of Quality Carriers, which used a combination of the income and market approaches. The income approach used a discounted cash flow model with significant assumptions for future revenue growth, EBITDA margin, capital expenditures and discount rate. The market approaches used valuation and transaction multiples for selected guideline public companies. Based on the quantitative assessment, CSX concluded the fair value of Quality Carriers did not exceed the carrying value. As a result, a $108 million impairment charge in the trucking operating segment was recorded in operating expense in the accompanying consolidated income statements. These inputs are classified as Level 3 measurements within the fair value hierarchy.

The impairment was driven by lower than previously expected financial performance projections, which were updated during the Company's annual financial plan process that takes place in the fourth quarter. Updates to longer-term projections reflect the effects of a trucking recession that has extended beyond previous expectations as well as higher discount rates.

In addition to the quantitative assessment of goodwill, CSX evaluated the recoverability of the long-lived assets on the Quality Carriers reporting unit in the trucking operating segment. Based on the assessment, CSX concluded the carrying values of these assets were recoverable and no impairment was recorded.

The Company performed a qualitative assessment over the goodwill of the reporting units in the rail segment during fourth quarter 2024. No impairment was recorded as a result of those assessments.