CSX Corp. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>CSX Corp. has filed its quarterly report (10-Q) for the period ending March 31, 2024, providing an update on its financial performance and operations.</b>

AI Summary

CSX CORP (CSX) filed a Quarterly Report (10-Q) with the SEC on April 18, 2024. CSX Corp. filed a 10-Q report for the period ending March 31, 2024. The filing covers the first quarter of the fiscal year 2024. The company's principal business is operating a railroad network. CSX Corp. is incorporated in Virginia (VA). The filing includes financial data for the periods ending March 31, 2024, December 31, 2023, and March 31, 2023.

Why It Matters

For investors and stakeholders tracking CSX CORP, this filing contains several important signals. This 10-Q filing provides investors with the latest financial statements and operational details for CSX Corp. during the first quarter of 2024, enabling informed investment decisions. Understanding the company's performance in this filing is crucial for assessing its current financial health and future prospects within the railroad industry.

Risk Assessment

Risk Level: medium — CSX CORP shows moderate risk based on this filing. The filing is a standard 10-Q, which provides routine financial updates. The risk is medium due to the inherent cyclicality and regulatory environment of the railroad industry, which can impact future performance.

Analyst Insight

Review the detailed financial statements and management discussion within the 10-Q to identify any significant trends or changes in CSX Corp.'s revenue, expenses, and profitability compared to previous periods.

Key Numbers

• 2024-03-31 — Period End Date (CONFORMED PERIOD OF REPORT)
• 2024-04-18 — Filing Date (FILED AS OF DATE)
• 2024-01-01 — Quarter Start Date (Q1 2024)
• 2023-03-31 — Prior Year Quarter End Date (2023 Q1)

Key Players & Entities

• CSX CORP (company) — FILER
• VA (state) — STATE OF INCORPORATION
• 2024-03-31 (date) — CONFORMED PERIOD OF REPORT
• 2024-04-18 (date) — FILED AS OF DATE
• 9043593200 (phone) — BUSINESS PHONE
• RAILROADS, LINE-HAUL OPERATING (industry) — STANDARD INDUSTRIAL CLASSIFICATION
• 0000277948 (company_id) — CENTRAL INDEX KEY

FAQ

Industry Context

CSX Corp. operates as a major freight railroad company in North America, providing transportation services for a wide range of industrial, agricultural, and consumer products.

Regulatory Implications

As a railroad operator, CSX Corp. is subject to regulations by the Surface Transportation Board (STB) and the Federal Railroad Administration (FRA) concerning safety, operations, and service standards.

What Investors Should Do

1. Analyze the revenue breakdown by segment to understand performance drivers.
2. Examine the net income and EPS figures for profitability trends.
3. Review any disclosed risk factors to assess potential challenges to future operations.

Key Dates

• 2024-03-31: Quarter End — End of the reporting period for the 10-Q filing.
• 2024-04-18: Filing Date — Date the 10-Q report was officially filed with the SEC.

Year-Over-Year Comparison

This is the initial 10-Q filing for the fiscal year 2024, providing the first quarterly update after the year-end report.

Key Financial Figures

• $1 — ange on which registered Common Stock, $1 Par Value CSX Nasdaq Global Select Mark

Filing Documents

• csx-20240331.htm (10-Q) — 881KB
• csx03312024ex31.htm (EX-31) — 19KB
• csx03312024ex32.htm (EX-32) — 7KB
• csx-20240331_g1.jpg (GRAPHIC) — 126KB
• csx-20240331_g2.jpg (GRAPHIC) — 23KB
• csx-20240331_g3.jpg (GRAPHIC) — 23KB
• csx-20240331_g4.jpg (GRAPHIC) — 24KB
• 0000277948-24-000032.txt (&nbsp;) — 5805KB
• csx-20240331.xsd (EX-101.SCH) — 42KB
• csx-20240331_cal.xml (EX-101.CAL) — 62KB
• csx-20240331_def.xml (EX-101.DEF) — 212KB
• csx-20240331_lab.xml (EX-101.LAB) — 522KB
• csx-20240331_pre.xml (EX-101.PRE) — 384KB
• csx-20240331_htm.xml (XML) — 638KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements 3 Consolidated Income Statements (Unaudited) - Quarters Ended March 31, 2024 and March 31, 2023 3 Condensed Consolidated Comprehensive Income Statements (Unaudited) - Quarters Ended March 31, 2024 and March 31, 2023 3 Consolidated Balance Sheets - At March 31, 2024 (Unaudited) and December 31, 2023 4 Consolidated Cash Flow Statements (Unaudited) - Three Months Ended March 31, 2024 and March 31, 2023 5 Consolidated Statement of Changes in Shareholders' Equity (Unaudited) - Quarters Ended March 31, 2024 and March 31, 2023 6

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 7

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 26

Quantitative and Qualitative Disclosures about Market Risk

Item 3. Quantitative and Qualitative Disclosures about Market Risk 40

Controls and Procedures

Item 4. Controls and Procedures 40

OTHER INFORMATION

PART II. OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 41

Risk Factors

Item 1A. Risk Factors 41

CSX Purchases of Equity Securities

Item 2. CSX Purchases of Equity Securities 41

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 42

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 42

Other Information

Item 5. Other Information 42

Exhibits

Item 6. Exhibits 43 Signature 44 CSX Q1 2024 Form 10-Q p.2 Table of Contents CSX CORPORATION

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS CONSOLIDATED INCOME STATEMENTS (Unaudited) (Dollars in Millions, Except Per Share Amounts) First Quarters 2024 2023 Revenue $ 3,681 $ 3,706 Expense Labor and Fringe 798 723 Purchased Services and Other 711 688 Depreciation and Amortization 410 393 Fuel 325 364 Equipment and Other Rents 84 82 Gains on Property Dispositions ( 1 ) ( 8 ) Total Expense 2,327 2,242 Operating Income 1,354 1,464 Interest Expense ( 210 ) ( 201 ) Other Income - Net 41 41 Earnings Before Income Taxes 1,185 1,304 Income Tax Expense ( 292 ) ( 317 ) Net Earnings $ 893 $ 987 Per Common Share (Note 2) Net Earnings Per Share, Basic $ 0.46 $ 0.48 Net Earnings Per Share, Assuming Dilution $ 0.46 $ 0.48 Average Shares Outstanding (In Millions) 1,958 2,054 Average Shares Outstanding, Assuming Dilution (In Millions) 1,962 2,058 CONDENSED CONSOLIDATED COMPREHENSIVE INCOME STATEMENTS (Unaudited) (Dollars in Millions) First Quarters 2024 2023 Total Comprehensive Earnings (Note 10) $ 899 $ 989 See accompanying notes to consolidated financial statements. CSX Q1 2024 Form 10-Q p.3 Table of Contents CSX CORPORATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS (Dollars in Millions) (Unaudited) March 31, 2024 December 31, 2023 ASSETS Current Assets: Cash and Cash Equivalents $ 1,483 $ 1,353 Short-term Investments (Note 9) 2 83 Accounts Receivable - Net (Note 8) 1,400 1,393 Materials and Supplies 451 446 Other Current Assets 136 109 Total Current Assets 3,472 3,384 Properties 50,661 50,320 Accumulated Depreciation ( 15,605 ) ( 15,385 ) Properties - Net 35,056 34,935 Investment in Affiliates and Other Companies 2,424 2,397 Right-of-Use Lease Asset 507 498 Goodwill and Other Intangible Assets - Net 520 506 Other Long-term Assets 716 688 Total Assets $ 42,695 $ 42,408 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts Payable $ 1,306 $ 1,237 Labor and Fringe Benefits Payable 387 517 Casualty, Environmental and Other Reserves (Note 4) 140 144 Current Maturities of Long-term Debt (Note 7) 557 558 Income and Other Taxes Payable 382 525 Other Current Liabilities 252 243 Total Current Liabilities 3,024 3,224 Casualty, Environmental and Other Reserves (Note 4) 308 296 Long-term Debt (Note 7) 17,944 17,975 Deferred Income Taxes - Net 7,759 7,746 Long-term Lease Liability 501 491 Other Long-term Liabilities 557 543 Total Liabilities 30,093 30,275 Shareholders' Equity: Common Stock, $ 1 Par Value 1,955 1,959 Other Capital 743 691 Retained Earnings 10,205 9,790 Accumulated Other Comprehensive Loss (Note 10) ( 306 ) ( 312 ) Non-controlling Minority Interest 5 5 Total Shareholders' Equity 12,602 12,133 Total Liabilities and Shareholders' Equity $ 42,695 $ 42,408 See accompanying notes to consolidated financial statements. CSX Q1 2024 Form 10-Q p.4 Table of Contents CSX CORPORATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS CONSOLIDATED CASH FLOW STATEMENTS (Unaudited) (Dollars in Millions) Three Months 2024 2023 OPERATING ACTIVITIES Net Earnings $ 893 $ 987 Adjustments to Reconcile Net Earnings to Net Cash Provided by Operating Activities: Depreciation and Amortization 410 393 Deferred Income Taxes 11 35 Gains on Property Dispositions ( 1 ) ( 8 ) Other Operating Activities ( 15 ) ( 31 ) Changes in Operating Assets and Liabilities: Accounts Receivable 5 ( 63 ) Other Current Assets ( 29 ) ( 72 ) Accounts Payable 72 70 Income and Other Taxes Payable ( 143 ) 266 Other Current Liabilities ( 119 ) ( 326 ) Net Cash Provided by Operating Activities 1,084 1,251 INVESTING ACTIVITIES Property Additions ( 524 ) ( 443 ) Purchases of Short-term Investments — ( 101 ) Proceeds from Sales of Short-term Investments 81 53 Proceeds and Advances from Property Dispositions — 8 Business Acquisition, Net of Cash Acquired ( 26 ) ( 2 ) Other Investing Activities ( 35 ) 5 Net Cash Used In Investing Activities ( 504 ) ( 480 ) FINANCING ACTIVITIES Shares Repurchased ( 247 ) ( 1,067 ) Dividends Paid ( 235 ) ( 226 ) Long-term Debt Repaid (Note 7) ( 2 ) ( 142 ) Other Financing Activities 34 ( 3 ) Net Cash Used in Financing Activities ( 450 ) ( 1,438 ) Net Increase (Decrease) in Cash and Cash Equivalents 130 ( 667 ) CASH AND CASH EQUIVALENTS Cash and Cash Equivalents at Beginning of Period 1,353 1,958 Cash and Cash Equivalents at End of Period $ 1,483 $ 1,291 See accompanying notes to consolidated financial statements. CSX Q1 2024 Form 10-Q p.5 Table of Contents CSX CORPORATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) (Dollars in Millions) Three Months 2024 Common Shares Outstanding (Thousands) Common Stock and Other Capital Retained Earnings Accumulated Other Comprehensive (Loss) Income (a) Non-controlling Minority Interest Total Shareholders' Equity Balance December 31, 2023 1,958,757 $ 2,650 $ 9,790 $ ( 312 ) $ 5 $ 12,133 Comprehensive Earnings: Net Earnings — — 893 — — 893 Other Comprehensive Income — — — 6 — 6 Total Comprehensive Earnings 899 Common stock dividends, $ 0.12 per share — — ( 235 ) — — ( 235 ) Share Repurchases ( 6,789 ) ( 7 ) ( 240 ) — — ( 247 ) Excise Tax on Net Share Repurchases — — ( 1 ) — — ( 1 ) Stock Option Exercises and Other 2,961 55 ( 2 ) — — 53 Balance March 31, 2024 1,954,929 $ 2,698 $ 10,205 $ ( 306 ) $ 5 $ 12,602 Three Months 2023 Common Shares Outstanding (Thousands) Common Stock and Other Capital Retained Earnings Accumulated Other Comprehensive (Loss) Income (a) Non-controlling Minority Interest Total Shareholders' Equity Balance December 31, 2022 2,066,367 $ 2,640 $ 10,363 $ ( 388 ) $ 10 $ 12,625 Comprehensive Earnings: Net Earnings — — 987 — — 987 Other Comprehensive Income — — — 2 — 2 Total Comprehensive Earnings 989 Common stock dividends, $ 0.11 per share — — ( 226 ) — — ( 226 ) Share Repurchases ( 35,157 ) ( 35 ) ( 1,032 ) — — ( 1,067 ) Stock Option Exercises and Other 1,865 15 — — ( 2 ) 13 Balance March 31, 2023 2,033,075 $ 2,620 $ 10,092 $ ( 386 ) $ 8 $ 12,334 (a) Accumulated Other Comprehensive Loss balances shown above are net of tax. The associated taxes were $ 82 million and $ 121 million as of March 31, 2024 and March 31, 2023, respectively. For additional information, see Note 10, Other Comprehensive Income. See accompanying notes to consolidated financial statements. CSX Q1 2024 Form 10-Q p.6 Table of Contents CSX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 1. Nature of Operations and Significant Accounting Policies Background CSX Corporation together with its subsidiaries ("CSX" or the "Company"), based in Jacksonville, Florida, is one of the nation's leading transportation companies. The Company provides rail-based transportation services including traditional rail service, the transport of intermodal containers and trailers, as well as other transportation services such as rail-to-truck transfers and bulk commodity operations. CSX's principal operating subsidiary, CSX Transportation, Inc. ("CSXT"), provides an important link to the transportation supply chain through its approximately 20,000 route-mile rail network and serves major population centers in 26 states east of the Mississippi River, the District of Columbia and the Canadian provinces of Ontario and Quebec. The Company's intermodal business links customers to railroads via trucks and terminals. CSXT is also responsible for the Company's real estate sales, leasing, acquisition and management and development activities, substantially all of which are focused on supporting railroad operations. Other entities In addition to CSXT, the Company's subsidiaries include Quality Carriers, Inc. ("Quality Carriers"), CSX Intermodal Terminals, Inc. ("CSX Intermodal Terminals"), Total Distribution Services, Inc. ("TDSI"), Transflo Terminal Services, Inc. ("Transflo"), CSX Technology, Inc. ("CSX Technology") and other subsidiaries. Quality Carriers is the largest provider of bulk liquid chemicals truck transportation in North America. CSX Intermodal Terminals owns and operates a system of intermodal terminals, predominantly in the eastern United States and also performs drayage services (the pickup and delivery of intermodal shipments) for certain customers. TDSI serves the automotive industry with distribution centers and storage locations. Transflo connects non-rail served customers to the many benef

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 1. Nature of Operations and Significant Accounting Policies, continued Basis of Presentation In the opinion of management, the accompanying consolidated financial statements contain all normal, recurring adjustments necessary to fairly present the consolidated financial statements and accompanying notes. Where applicable, prior year information has been reclassified to conform to the current presentation. Pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"), certain information and disclosures normally included in the notes to the annual financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") have been omitted from these interim financial statements. CSX suggests that these financial statements be read in conjunction with the audited financial statements and the notes included in CSX's most recent annual report on Form 10-K and any subsequently filed current reports on Form 8-K. Fiscal Year The Company's fiscal periods are based upon the calendar year. Except as otherwise specified, references to "first quarter(s)" or "three months" indicate CSX's fiscal periods ending March 31, 2024 and March 31, 2023, and references to "year-end" indicate the fiscal year ended December 31, 2023. New Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures . This standard update requires additional interim and annual disclosures about a reportable segment's expenses, even for companies with only one reportable segment. The Company is required to adopt the guidance for its 2024 annual report filed on Form 10-K, though early adoption is permitted. The Company is currently evaluating the impact of these amendments on its disclosures, but this standard update will not impact the Company's results of operations or financial position. In December 2023, the FASB issued ASU

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 2. Earnings Per Share The following table sets forth the computation of basic earnings per share and earnings per share, assuming dilution. First Quarters 2024 2023 Numerator (Dollars in Millions) : Net Earnings $ 893 $ 987 Denominator (Units in Millions) : Average Common Shares Outstanding 1,958 2,054 Other Potentially Dilutive Common Shares 4 4 Average Common Shares Outstanding, Assuming Dilution 1,962 2,058 Net Earnings Per Share, Basic $ 0.46 $ 0.48 Net Earnings Per Share, Assuming Dilution $ 0.46 $ 0.48 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 employee stock options, performance units 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 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. First Quarters 2024 2023 Antidilutive Stock Options Excluded from Diluted EPS (Units in Millions) 3 4 CSX Q1 2024 Form 10-Q p.9 Table of Contents CSX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 2. Earnings Per Share, continued Share Repurchases 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 in October 2023. Total repurchase authority remaining was $ 4.5 billion as of March 31, 2024. 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. During first quarters 2024 and 2023, the Company engaged in the following repurchase activities: First Quarters 2024 2023 Shares Repurchased (Millions) 7 35 Cost of Shares (Dollars in Millions) $ 247 $ 1,067 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. 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. CSX Q1 2024 Form 10-Q p.10 Tabl

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 3. Stock Plans and Share-Based Compensation Under CSX's share-based compensation plans, awards consist of performance units, stock options and restricted stock units for management and stock grants for directors. Share-based compensation expense for awards under share-based compensation plans is measured using the fair value of the award on the grant date and is recognized on a straight-line basis over the service period of the respective award. Alternatively, expense is recognized upon death or over an accelerated service period for employees whose agreements allow for continued vesting upon retirement or separation. Forfeitures are recognized as they occur. Total pre-tax expense and income tax benefits associated with share-based compensation are shown in the table below. Income tax benefits include impacts from option exercises and the vesting of other equity awards. First Quarters (Dollars in Millions) 2024 2023 Share-Based Compensation Expense: Restricted Stock Units $ 7 $ 4 Stock Options 3 3 Performance Units 2 3 Stock Awards for Directors 2 2 Employee Stock Purchase Plan 2 1 Total Share-Based Compensation Expense $ 16 $ 13 Income Tax Benefit $ 5 $ 4 Long-term Incentive Plan On February 16, 2024, the Company granted the following awards under a new long-term incentive plan ("LTIP") for the years 2024 through 2026, which was adopted under the CSX 2019 Stock and Incentive Award Plan. Granted (Thousands) Weighted Avg. Fair Value Performance Units 605 $ 38.66 Restricted Stock Units 601 36.72 Stock Options 957 11.57 CSX Q1 2024 Form 10-Q p.11 Table of Contents CSX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 3. Stock Plans and Share-Based Compensation, continued Performance Units Units vest approximately three years after grant. Payouts will be made in CSX common stock with a payout range for most participants between 0 % and 200 % of the target awards depending on Company performance against predetermined goals. Payouts for certain executive officers are subject to formulaic upward or downward adjustment by up to 25 %, capped at an overall payout of 250 %, based upon the Company's total shareholder return relative to specified comparable groups over the performance period. The fair values of performance units granted to certain executive officers were calculated using a Monte-Carlo simulation model. Measurement against goals related to both average annual operating income growth and Economic Profit (CSX Cash Earnings or CCE), in each case excluding non-recurring items as defined in the plan, will each comprise 50 % of the payout. As defined under the plan, Economic Profit incentivizes strategic investments earning more than management's desired minimum required return and is calculated as CSX's gross cash earnings minus the capital charge on gross operating assets. Stock Options Stock options were granted with ten-year terms and vest over three years in equal installments each year on the anniversary of the grant date. These awards are time-based and are not based upon attainment of performance goals. The fair values of stock option awards were estimated at the grant date using the Black-Scholes valuation model. Restricted Stock Units The restricted stock units awarded vest over three years in equal installments each year on the anniversary of the grant date and are settled in CSX common stock on a one -for-one basis. These awards are time-based and are not based upon CSX's attainment of performance goals. For more information related to the Company's outstanding long-term incentive compensatio

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 4. Casualty, Environmental and Other Reserves Personal injury and environmental reserves are considered critical accounting estimates due to the need for management judgment. Casualty, environmental and other reserves are provided for in the consolidated balance sheets as shown in the table below. March 31, 2024 December 31, 2023 (Dollars in Millions) Current Long-term Total Current Long-term Total Casualty: Personal Injury $ 45 $ 87 $ 132 $ 45 $ 83 $ 128 Occupational 7 62 69 7 60 67 Total Casualty 52 149 201 52 143 195 Environmental 41 113 154 41 113 154 Other 47 46 93 51 40 91 Total $ 140 $ 308 $ 448 $ 144 $ 296 $ 440 These liabilities are accrued when probable and reasonably estimable in accordance with the Contingencies Topic in the ASC. Actual settlements and claims received could differ, and final outcomes of these matters cannot be predicted with certainty. Considering the legal defenses currently available, the liabilities that have been recorded and other factors, it is the opinion of management that none of these items individually, when finally resolved, will have a material adverse effect on the Company's financial condition, results of operations or liquidity. Should a number of these items occur in the same period, however, their combined effect could be material in that particular period. Casualty Casualty reserves represent accruals for personal injury, occupational disease and occupational injury claims primarily related to railroad operations. The Company's self-insured retention amount for casualty claims is $ 100 million per occurrence as discussed at Note 5, Commitments and Contingencies . Currently, no individual claim is expected to exceed the self-insured retention amount. Personal Injury Personal injury reserves represent liabilities for employee work-related and third-party injuries. Work-related injuries for CSXT employees are primarily subject to the Fede

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 4. Casualty, Environmental and Other Reserves, continued Occupational Occupational reserves represent liabilities arising from allegations of exposure to certain materials in the workplace (such as solvents, soaps, chemicals and diesel fumes), past exposure to asbestos or allegations of chronic physical injuries resulting from work conditions (such as repetitive stress injuries). The Company retains an independent actuary to analyze the Company's historical claim filings, settlement amounts, and dismissal rates to assist in determining future anticipated claim filing rates and average settlement values. This analysis is performed by the actuary and reviewed by management quarterly. The analysis did not result in a material adjustment to the occupational reserve in the quarters ended March 31, 2024, or March 31, 2023. Environmental The Company is a party to various proceedings related to environmental issues, including administrative and judicial proceedings involving private parties and regulatory agencies. The Company has been identified as a potentially responsible party at approximately 230 environmentally impaired sites. Many of these are, or may be, subject to remedial action under the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), also known as the Superfund Law, or similar state statutes. Most of these proceedings arose from environmental conditions on properties used for ongoing or discontinued railroad operations. A number o f these proceedings, however, are based on allegations that the Company, or its predecessors, sent hazardous substances to facilities owned or operated by others for treatment, recycling or disposal. In addition, some of the Company's land holdings were leased to others for commercial or industrial uses that may have resulted in releases of hazardous substances or other regulated materials onto the property and could gi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 5. Commitments and Contingencies Insurance The Company maintains insurance programs with substantial limits for property damage, including resulting business interruption, as well as casualty claims, which includes third-party liability. A certain amount of risk is retained by the Company on each insurance program. Under its property insurance program, the Company retains all risk up to $ 150 million per occurrence for losses from floods and named windstorms and up to $ 125 million per occurrence for other property losses

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