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Business Combinations | 9 Months Ended
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Sep. 30, 2022
Business Combination and Asset Acquisition [Abstract] |
Business Combinations | Business Combinations Acquisition of Pan Am Systems, Inc. On June 1, 2022, CSX completed its acquisition of Pan Am Systems, Inc. (“Pan Am”) which is the parent company of Pan Am Railways, Inc. who jointly owns Pan Am Southern, LLC with a subsidiary of Norfolk Southern Corporation. Pan Am owns and operates a highly integrated, nearly 1,200-mile rail network and has a joint interest in the more than 600-mile Pan Am Southern system. This acquisition expands CSX’s reach in the Northeastern United States. The results of Pan Am's operations and its cash flows were consolidated prospectively. The Company accounted for the transaction using the acquisition method in accordance with ASC Topic 805, Business Combinations. The allocation of the purchase price to assets acquired and liabilities assumed is based upon available information and is subject to change as preliminary values continue to be reviewed. There were immaterial changes to the purchase price allocation in third quarter 2022. Any further adjustments to the purchase price allocation will be made as soon as practicable but no later than one year from the date of acquisition. The closing price of $601 million was funded through a combination of common stock valued at $422 million and cash totaling $179 million, subject to certain customary purchase price adjustments. Total cash consideration paid to acquire the business includes a $30 million deposit paid in fourth quarter 2020. Cash payments made in second quarter 2022 are included in investing activities on the Company's consolidated cash flow statement. The preliminary allocation of total consideration to the fair values of the acquired assets and liabilities of Pan Am is summarized in the table below.
(Dollars in millions) | June 1, 2022
Assets Acquired: |
Accounts Receivable | $ | 42 |
Properties and Equipment | 581 |
Goodwill | 50 |
Investments in Affiliates | 90 |
Other Assets | 11 |
Total Assets Acquired | $ | 774 |
Liabilities Assumed: |
Accounts Payable and Accrued Liabilities | $ | 31 |
Deferred Tax Liability | 94 |
Other Long-term Liabilities | 48 |
Total Liabilities Assumed | 173 |
Fair Value of Assets Acquired, Net of Liabilities Assumed: | $ | 601 |
Properties and equipment of $581 million include road and track assets, work equipment, land, buildings and other assets. The investments in affiliates includes the interest in Pan Am Southern, LLC acquired as part of the purchase as well as other investments. NOTE 11. Business Combinations, continued The Company has incurred costs related to this acquisition of approximately $31 million, of which $2 million and $21 million was incurred during third quarter 2022 and nine months 2022, respectively. All acquisition-related costs were expensed as incurred and have been recorded in labor and fringe or purchased services and other in the accompanying consolidated income statements. This acquisition is not material with respect to the Company’s financial statements when reviewed under the quantitative and qualitative considerations of Regulation S-X Article 11 and ASC Topic 805. As the acquisition is not material, CSX has not provided pro forma information relating to the pre-acquisition period. Other Acquisitions During the nine months 2022, Quality Carriers completed several acquisitions of previous independent affiliates that were immaterial individually and in aggregate.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI https://asc.fasb.org/topic&trid=2303972 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 5 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4946-128472 + Details
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