Q4 2023 Canadian National Railway Co Earnings Call

Thanks for watching!

Good afternoon. My name is Julian I'll be your conference operator today.

Good afternoon. My name is Julianne and I will be your conference operator today.

Julianne: Welcome to CN's fourth quarter and full year 2023 Financial and Operating Results Conference Call.

Julian: Welcome to CN fourth quarter, and full year 2023 financial and operating results conference call.

Julianne: All participants are now in listen-only mode.

Julian: All participants are now in listen only mode.

Julianne: After the speaker's remarks, there will be a question and answer session.

Julian: After the Speakers' remarks, there'll be a question and answer session.

Julianne: during which we ask that you kindly limit yourself to one question.

During which we ask that you kindly limit yourself to one question.

Julianne: I'd now like to turn the call over to Stacey Alderson, Assistant Vice President, Investor Relations. Ladies and gentlemen, Ms. Alderson.

Julian: I'd now like to turn the call over to Stacie Alderson.

Stacie Alderson: It Didnt, Vice President Investor Relations, ladies and gentlemen, Mr. Alderson.

Alderson: Thank you operator boss you ought to assume yes. He did was wound up not a patent costs. It also leases have you kept PMC net H Lenny do new that's what.

Stacey Alderson: Thank you, operator. Bonjour à tous et merci de vous joindre à notre appel conférence sur les résultats du quatrième trimestre et l'année 2023.

Stacey Alderson: Good afternoon everyone and thank you for joining us for CN's fourth quarter and full year 2023 Financial and Operating Results Conference.

Speaker Change: Good afternoon, everyone and thank you for joining us for Cn's fourth quarter, and full year 2023 financial and operating results conference call before.

Stacey Alderson: Before we begin, I'd like to draw your attention to the forward-looking statements and additional legal information available at the beginning of the presentation.

Speaker Change: Before we begin I'd like to draw your attention to the forward looking statements and additional legal information available at the beginning of the presentation. As a reminder, today's conference call contains certain projections and other forward looking statements within the meaning of the U S and Canadian Securities laws.

Stacey Alderson: As a reminder, today's conference call contains certain projections and other forward-looking statements within the meaning of the U.S. and Canadian securities law.

Stacey Alderson: These statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied in these statements.

Speaker Change: These statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied in these statements.

Stacey Alderson: They are more fully described in our cautionary statement regarding forward-looking statements in our presentation.

Speaker Change: There are more fully described in our cautionary statement regarding forward looking statements in our presentation.

Stacey Alderson: After the prepared remarks, we will conduct a Q&A session.

Speaker Change: After the prepared remarks, we will conduct a Q&A session I would ask that you. Please limit yourself to one question. So we can get to hear from as many of you as possible.

Stacey Alderson: I would ask that you please limit yourself to one question so we can get to hear from as many of you as possible.

Stacey Alderson: The IR team will be available after the call for any follow-up questions.

Speaker Change: The IR team will be available after the call for any follow up questions.

Speaker Change: Joining us on the call today are Tracy Robinson, our President and CEO,

Speaker Change: Joining us on the call today are Tracy Robinson, our president and CEO.

Speaker Change: Pat Whitehead, our Chief Network Operations Officer,

Speaker Change: Pat Whitehead, our Chief Network operations Officer.

Speaker Change: Derek Taylor, our Chief Field Operations Officer.

Speaker Change: Derek Taylor, our Chief operations Officer.

Speaker Change: Doug McDonald, our Chief Marketing Officer, and Ghislaine Houlle, our Chief Finance

Speaker Change: Doug Macdonald, our Chief marketing Officer, and just Matt Walsh, our chief financial.

Speaker Change: Financial Officer.

Speaker Change: It is now my pleasure to turn the call over to CN's President and Chief Executive Officer, Tracy Robinson.

It is now my pleasure to turn the call over to <unk>, President and Chief Executive Officer Tracy Robinson.

Tracy Robinson: Merci, c'est fier, bienvenue.

Tracy Robinson: <unk> being the newest.

Tracy Robinson: I want to start today by welcoming Derek and Pat to their first call. It's great to have you guys with us.

Tracy Robinson: I want to start today by welcoming Derek and pass their first call. It's great to have you guys with us and I also want to extend a warm welcome to Remy who's out in the field today immersing himself in the operation you will all have a chance to meet him over the next two months or so.

Tracy Robinson: And I also want to extend a warm welcome to Remy, who's out in the field today, immersing himself in the operation. You'll all have a chance to meet him over the next few months or so.

Tracy Robinson: Doug remains in charge of our commercial organization and our growth efforts, and he is, of course, here today with us. Doug will be retiring this year.

Tracy Robinson: Doug remains in charge of our commercial organization and our growth efforts and he has of course here today with US Doug will be retiring this year and there'll be a little more to say on this at that time, but that's very much appreciated Doug your presence and partnership over the last couple of years and I know that Doug will do a great job.

Tracy Robinson: and there'll be a little more to say on this at that time but I very much appreciated, Doug, your presence and partnership over the last couple of years and I know that Doug will do a great job in getting Remy set up with our commercial team. Now this transition later this year will be seamless to both our customers and our employees.

Tracy Robinson: And getting ready set up with our commercial team now. This transition later this year will be seamless to both our customers and our employees.

Tracy Robinson: We are railroading here for the long term.

Tracy Robinson: We are railroading here for the long term and we're fortunate to have a lot of very strong experienced talent.

Tracy Robinson: and we're fortunate to have a lot of very strong and experienced talent.

Tracy Robinson: And we're going to supplement that now and again with talents with different backgrounds and perspectives.

And we're going to supplement that knowing again with talent with different backgrounds and perspectives and this is going to make us even stronger which is important as we continue to refine our path forward and advance our growth mandate.

Speaker Change: Thank you for joining us.

Speaker Change: and we're also taking a long-term approach when it comes to our network

Tracy Robinson: And we're also taking a long term approach when it comes to our network. We know that our network has always been core to see an advantage and to our ability to provide our customers with solutions for their businesses.

Speaker Change: We know that our network has always been core to the CN Advantage and to our ability to provide our customers with solutions for their business.

Speaker Change: Where it makes sense to add to our network, to position us to do more or better of this, we'll do so.

Tracy Robinson: Sure It makes sense to add to our network to position us to do more better vis we'll do so it was the fourth quarter, we closed on the CBS, which will give us more opportunities to densify the eastern part of our network in coming years.

Speaker Change: and in the fourth quarter,

Speaker Change: Closed on the CB&S.

Speaker Change: will give us more opportunities to densify the eastern part of our network in coming

Speaker Change: And in December, we signed an agreement to purchase the Iowa Northern, the ninth addition to our network in the Midwest. It will give customers in that area better market access.

Tracy Robinson: And in December we signed an agreement to purchase the Iowa, Northern It's a nice addition to our network in the Midwest. It will give customers in that area of better market access and for US It will deepen our network reach and boost our AG business.

Speaker Change: and for us, it will deepen our network reach and boost our aid.

Operator: Thanks for watching!

Speaker Change: So I want to welcome those who might be listening in for the first time today to our Railroad

Tracy Robinson: I want to welcome those who might be listening in for the first time today to a railroad film.

Operator: Good afternoon,

Julianne: My name is Julianne, and I will be your conference operator today. Welcome to CN's fourth quarter and full year 2023 Financial and Operating Results Conference Call. All participants are now in listen-only mode. After the speaker's remarks, there will be a question and answer session, during which we ask that you kindly limit yourself to one question. I'd now like to turn the call over to Stacey Alderson, Assistant Vice President, Investor Relations

Speaker Change: We do expect to fully integrate the Iowa Northern property later this year pending a positive outcome of the STB review process.

Tracy Robinson: We do expect to fully integrate the Iowa Northern property later this year pending a positive outcome of the STB review process.

Tracy Robinson: So before I ask the team to get into the details I'll, just recap, where we are and I'll start with safety.

Speaker Change: Before I ask the team to get into the details, I'll just recap where we are and I'll start

Speaker Change: We ended the year with some meaningful improvements in both our accidents and injuries.

Tracy Robinson: We ended the year with meaningful improvements in both our accident and injury frequency.

Speaker Change: and I am very pleased with both the work that has gone into this and the impact

Tracy Robinson: I am very pleased with both of them work that has gone into this and the impact. It has had and we're going to continue those efforts. This will be a relentless drive to zero.

Speaker Change: and we're going to continue those efforts. This will be a relentless drive

Stacey Alderson: Ladies and gentlemen, Ms. Alderson.

Speaker Change: and the operation.

Tracy Robinson: And on the operation.

Speaker Change: We came into the fourth quarter a little battle-hardened after a couple of difficult quarters last year.

Tracy Robinson: So we came into the fourth quarter, a little battle hardened after a couple of difficult quarters last year.

Stacey Alderson: Thank you, Operator.

Stacey Alderson: Bonjour à tous et merci de vous joindre à notre conférence sur les résultats du quatrième trimestre et l'année 2023. Good afternoon, everyone, and thank you for joining us for CN's fourth quarter and full year 2023 Financial and Operating Results Conference.

Speaker Change: and where we managed through a freight recession and a number of external shocks

Tracy Robinson: Where we managed through a freight recession and a number of external shocks and in Q4, we have the gift of some kind or weather and our operations team took full advantage posting some really strong on time and velocity metrics.

Speaker Change: And in Q4, we have the gift of some kinder weather, and our operations team took full advantage, posting some really strong on-time and velocity.

Speaker Change: Now as we rounded the corner into this year, we kicked off with some extreme winter temperatures across the network. But as we lived out of that, the team is well on their way to getting this place back to that same level of opportunity.

Tracy Robinson: So as we rounded the corner into this year, we kicked off with some extreme winter temperatures across the network, but as we lift out of that the team is well underway to getting this place back to that same level of operation.

Stacey Alderson: Before we begin, I'd like to draw your attention to the forward-looking statements and additional legal information available at the beginning of the presentation. As a reminder, today's conference call contains certain projections and other forward-looking statements within the meaning of U.S. and Canadian securities laws. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied in these statements. These risks and uncertainties are more fully described in our cautionary statement regarding forward-looking statements in our presentation.

Speaker Change: Whatever comes at us, we know that sticking with this model will ensure resiliency, enabling us always to perform at our best.

Tracy Robinson: Whatever comes at US, we know that sticking with this model will ensure resiliency, enabling us always to perform at our best.

Speaker Change: Our full-year car velocity, for example, and this is including the challenges of the second and third quarter, was 213 miles per day. That's a 9% improvement over 2020.

Tracy Robinson: Our full year car velocity for example, and this is including the challenges of the second and third quarter with 213 miles per day, that's a 9% improvement over 2022.

Speaker Change: We're running a plan, we're getting more out of our assets, and this is driving some very consistent service levels to our clients.

Tracy Robinson: Running to plan, we're getting more out of our assets and this is driving some very consistent service levels to our customers a strong consistent resilient operation is table Stakes in this industry and the necessary foundation to move the economy and for us to deliver our growth agenda.

Stacey Alderson: After the prepared remarks, we will conduct a Q&A session. I would ask that you please limit yourself to one question so we can get to hear from as many of you as possible. The IR team will be available after the call for any follow-up questions. Joining us on the call today are Tracy Robinson, our President and CEO, Pat Whitehead, our Chief Network Operations Officer, and Derek Taylor, our Chief Field Operations Officer.

Speaker Change: Strong, consistent.

Speaker Change: The resilience operation is table stakes in this industry and the necessary foundation to move the economy and for us to deliver our growth agenda.

Tracy Robinson: At the end of the day. This is about doing what we say we will do we have a plan and we're executing it.

Speaker Change: At the end of the day, this is about doing what we say we need to do.

Speaker Change: We have a plan and we're executing it.

Speaker Change: We've been building up our track record operationally over these last seven quarters and I think I speak for the entire

We've been building up our track record operationally over these last seven quarters, and I think I speak for the entire team did it feels really good to have that CN grew back.

Speaker Change: It feels really good to have that CN group back.

Stacey Alderson: Doug McDonald, our Chief Marketing Officer, and Ghislaine Houlle, our Chief Financial Officer. It is now my pleasure to turn the call over to CN's President and Chief Executive Officer, Tracy Robinson.

Tracy Robinson: Turning to our quarter and full year results I'll keep it to just a few highlights.

Speaker Change: Turning to our quarter and full year results, I'll keep it to just a few highlights.

Speaker Change: Our fourth quarter adjusted EPS was 4% lower than regular.

Tracy Robinson: Our fourth quarter, adjusted EPS was 4% lower than last year, and our operating ratio was 59, 3%.

Speaker Change: and our operating ratio was 59.3%.

Tracy Robinson: Merci, c'est fier, bienvenue.

Speaker Change: For the year, adjusted EPS was 2% lower and our operating ratio was 60.8%.

Tracy Robinson: For the year adjusted EPS was 2% lower and our operating ratio was 68%. These are the kind of results. We can be very proud of in a challenging environment.

Tracy Robinson: I want to start today by welcoming Derek and Pat to their first call.

Tracy Robinson: It's great to have you guys with us, and I also want to extend a warm welcome to Remy, who's out in the field today, immersing himself in the operation. You'll all have a chance to meet him over the next few months or so. Doug remains in charge of our commercial organization and our growth efforts, and he is, of course, here today with us. Doug will be retiring this year, and there'll be a little more to say on that at that time, but I very much appreciate your presence and partnership over the last couple of years, and I know that Doug will do a great job in getting Remy set up with our commercial team. Now, this transition later this year will be seamless for both our customers and our employees. We are railroading here for the long term, and we're fortunate to have a lot of very strong and experienced talent. And we're going to supplement that now and again with talent with different backgrounds and perspectives.

Speaker Change: These are the kind of results we can be very proud of in a challenging environment.

Speaker Change: And we said last quarter that we'd seen the bottom of the volumes, and this is played out as we...

Tracy Robinson: And we said last quarter that we've seen the bottom in volumes and this has played out as we expected we've seen sequential improvement in our Q4 rpms were up 10%.

Speaker Change: We've seen sequential improvement in our Q4R

Speaker Change: We're up 10.

Speaker Change: Now there remains question marks on the economy as we move into 2022.

Tracy Robinson: So there remains a question mark on the economy as we move into 2024, we're expecting a continued improvement as the year progresses, and just and that will give you more detail on all of our assumptions.

Speaker Change: We're expecting a continued improvement as the year progresses and just now we'll give you more details on all of our

Speaker Change: But beyond the lift from a strengthening economy, we're also working our growth industry.

Tracy Robinson: Beyond the lift from a strengthening economy, we're also working our growth initiatives.

Speaker Change: Leverage our network, our strong service, and our customer and supply chain partnership.

Tracy Robinson: Leverage our network, our strong service and our customer and supply chain partnerships and these are starting to bear fruit and in some cases more quickly than we plan Doug will give you some color on that and you'll hear path and Derek review the state of our operations and we are ready for the volumes to start to lift.

Speaker Change: and these are starting to bear fruit and in some cases more quickly than we possibly could.

Speaker Change: Doug will give you some color on this and you'll hear Pat and Derek review the state of our operations and we're ready for the volumes to start.

Tracy Robinson: This gives me the confidence in our EPS guidance of approximately 10% growth over 2023.

Doug McDonald: This gives me the confidence in our EPS guidance of approximately 10% growth over 2025.

Tracy Robinson: Thank you for joining us, and we're also taking a long-term approach when it comes to our network. We know that our network has always been core to the CN Advantage and to our ability to provide our customers with solutions for their business.

Doug McDonald: I'll now hand it over to the team to fill out the details. Pat, you're up.

Tracy Robinson: I'll now hand, it over to the team to fill up the detail that Europe.

Pat Whitehead: Merci Tracy et bienvenue a tous. It's great to be on the call today. I'll begin with safety. In the fourth quarter, our injury frequency ratio was down 14% and our accident rate was down 29%.

Tracy Robinson: Tracy.

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Tracy Robinson: It's great to be on the call today I'll begin with safety in the fourth quarter all injury frequency ratio was down 14%.

Tracy Robinson: Where it makes sense to add to our network, to position us to do more or better of this, we'll do so, and in the fourth quarter, closing on the CB&S will give us more opportunities to densify the eastern part of our network in the coming months. And in December, we signed an agreement to purchase the Iowa Northern, the ninth addition to our network in the Midwest. It will give customers in that area better market access, and for us, it will deepen our network reach and boost our aid. So I want to welcome those who might be listening in for the first time today to our railroad. We do expect to fully integrate the Iowa Northern property later this year pending a positive outcome of the STB review process. Before I ask the team to get into the details, I'll just recap where we are and I'll start by saying that we ended the year with some meaningful improvements in both our accidents and injuries. I am very pleased with both the work that has gone into this and the impact, and we're going to continue those efforts.

Tracy Robinson: Our accident rate was down 29%.

Pat Whitehead: These results kept a solid full-year performance, demonstrating our progress toward a commitment-based safety culture.

Tracy Robinson: These results capped a solid full year performance, demonstrating our progress toward a commitment based safety culture.

Pat Whitehead: For the full year, injury frequency ratio improved 13% and the accident rate improved 17%.

Tracy Robinson: The full year injury frequency ratio improved 13%.

Tracy Robinson: Accident rate improved 17%.

Pat Whitehead: This represents a record low year for injuries at CN, but we know we can and that we must do better.

Tracy Robinson: This represents a record low year for injuries at CN.

Tracy Robinson: But we know we can and.

Tracy Robinson: We must do better.

I'm proud of the positive strides, we're making on our safety metrics, but this is a journey and we won't be satisfied until all employees go home safely at the end of every shift we are focused on our vision of a workplace that is free of accidents and injuries.

Pat Whitehead: I'm proud of the positive strides we're making on our safety metrics, but this is a journey, and we won't be satisfied until all employees go home safely at the end of every shift. We are focused on our vision of a workplace that is free of accidents and injuries.

Pat Whitehead: We are committed to working as a team across all crafts and departments to achieve this vision.

Tracy Robinson: We are committed to working as a team across all crafts and departments to achieve this vision training and development.

Pat Whitehead: Training and Development.

Pat Whitehead: Technology and behavior-based safety activities are essential to enhancing our safety Thank you.

Technology and behavior based safety activities are essential to enhancing our safety culture.

One of the key supporting better safety outcomes is running a more predictable operation.

Pat Whitehead: One of the keys supporting better safety outcomes is running a more predictable operation.

Pat Whitehead: Predictability is what underpins our velocity and our resilience.

Tracy Robinson: Predictability is what underpins our velocity and our resiliency.

Tracy Robinson: This will be a relentless drive and operation.

Pat Whitehead: CN Scheduled Operating Model has delivered seven consecutive quarters of operational and service excellence.

Tracy Robinson: <unk> scheduled operating model has delivered seven consecutive quarters of operational and service excellence.

Tracy Robinson: We came into the fourth quarter a little battle-hardened after a couple of difficult quarters last year, where we managed through a freight recession and a number of external shocks. In Q4, we had the gift of some kinder weather, and our operations team took full advantage, posting some really strong on-time and velocity. Now, as we rounded the corner into this year, we kicked off with some extreme winter temperatures across the network. But as we live out of that, the team is well on their way to getting this place back to that same level of opportunity. Whatever comes our way, we know that sticking with this model will ensure resiliency, enabling us always to perform at our best. Our full-year car velocity, for example, and this includes the challenges of the second and third quarters, was 213 miles per day. That's a 9% improvement over 2020. We're running a plan, we're getting more out of our assets, and this is driving some very consistent service levels for our clients. Strong and consistent.

Pat Whitehead: Now as we've said, the plan is dynamic and needs to adjust to our traffic, so with volumes rising, we have been refining our train pack.

Now as we've said the plan is dynamic and needs to adjust to our truck so with volumes rising we have been refining our train package. For example, we added a train start out of Prince Rupert and we adjusted the Vancouver train plan to accommodate an uptick in volume in this quarter.

Pat Whitehead: For example, we added a train start out of Prince Rupert, and we adjusted the Vancouver train plan to accommodate an uptick of volume in this corridor.

Pat Whitehead: Departing and arriving trains on time, what we call launch and land, continues to be a key focus of both the network operations and field work.

Departing and arriving trains on time, what we call launch and land continues to be a key focus of both the network operations and field teams.

Pat Whitehead: These are the basics of scheduled railroading.

Tracy Robinson: These are the basics of scheduled railroading fourth quarter origin train performance remained solid and in line with prior quarters at around 90% right, where we needed to be to ensure on time trade routes.

Pat Whitehead: Fourth quarter origin train performance remained solid and in line with prior quarters at around 90%.

Pat Whitehead: Right where we need it to be to ensure on-time training.

Pat Whitehead: Q4 destination train performance was 70%.

Tracy Robinson: Q4 destination train performance was 70% and we know there's room for improvement here by continuing to reduce our train meet delays in making timely crew swaps at intermediate terminals.

Pat Whitehead: and we know there's room for improvement here by continuing to reduce our train meet delays and making timely crew swaps at intermediate.

Pat Whitehead: I'm pleased with how the network and field teams have managed the complexity to crew scheduling introduced by the new Canadian work rest.

Tracy Robinson: I am pleased with how the network and field teams that manage the complexity to crew scheduling introduced by the new Canadian work rest rules.

Tracy Robinson: The resilience operation is table stakes in this industry and the necessary foundation to move the economy and for us to deliver our growth agenda. At the end of the day, this is about doing what we say we need to do. We have a plan, and we're executing it.

Pat Whitehead: We continue to learn and adjust training schedules to adapt to this new requirement.

We continue to learn and adjust train schedules to adapt to this new requirement.

Speaker Change: Now you're going to hear more from Doug on volumes, but my team is getting ready for the business.

Speaker Change: Now you're going to hear more from Doug on volumes, but my team is getting ready for the business, making sure. We have the right resources in place we have a number of capital projects that will enable a short term operating efficiency and unlock long term growth across our core mainline from the west coast to Chicago.

Speaker Change: Making sure we have the right resources in place.

Doug McDonald: We have a number of capital projects that will enable short-term operating efficiency and unlock long-term growth across the core mainline from the West Coast to Chicago.

Tracy Robinson: We've been building up our track record operationally over these last seven quarters, and I think I speak for the entire company when I say it feels really good to have that CN group back. Turning to our quarter and full year results, I'll keep it to just a few highlights. Our fourth-quarter adjusted EPS was 4% lower than the regular, and our operating ratio was 59.3%. For the year, adjusted EPS was 2% lower, and our operating ratio was 60.8%. These are the kind of results we can be very proud of in a challenging environment. And we said last quarter that we'd seen the bottom of the volumes, and this has played out as we... We've seen sequential improvement in our Q4R. We're up 10. Now there remains question marks on the economy as we move into 2022. We're expecting continued improvement as the year progresses, and just now, we'll give you more details on all of our. But beyond the lift from a strengthening economy, we're also working on our growth industry.

Doug McDonald: In 2024, we are investing in additional double track along our Vancouver to Chicago corridors with projects on our Edson sub and on the former EJ&E around Chicago.

Doug Macdonald: In 2024, we are investing in additional double track to lower our Vancouver to Chicago corridor with projects on our <unk> sub and on the former EJ any around Chicago.

Doug McDonald: We continue to invest in rolling stock.

Doug Macdonald: Continue to invest in rolling stock.

Doug McDonald: The Locomotive Modification Program is well underway and we are renewing a number of our car forms.

Doug Macdonald: The locomotive modification program is well underway and we are renewing a number of our car fleets.

Doug McDonald: Our training campuses were very busy in 2023. We qualified 900 plus new conductors to cover attrition and meet the requirements of the work rest changes in Canada. And we're now ramping up to align with our growth

Our training campuses were very busy in 2023, we qualified 900, plus new conductors to cover attrition and meet the requirements of the work risk changes in Canada, and we are now ramping up to align with our growth forecast.

Doug Macdonald: So overall from a resource perspective, we are poised to meet the forecasted demand and grow with our customers.

Doug McDonald: So overall, from a resource perspective, we're poised to meet the forecasted demand and grow with our customers.

Doug McDonald: I'll now pass it to my good friend, Derek, to talk about how the team executed in the fourth.

Speaker Change: I'll now pass it to my good friend, Eric to talk about how the team executed in the fourth quarter.

Derek Taylor: Thanks, Pat, and good afternoon, everyone.

Eric: Thanks, and good afternoon, everyone.

Derek Taylor: The team finished the last quarter of 2023 with strong operational momentum, and we started the new year with a very fluid number.

Eric: The team finished the last quarter of 2023 with strong operational momentum and we started the new year with a very fluid network.

Tracy Robinson: Leveraging our network, our strong service, and our customer and supply chain partnership, these are starting to bear fruit and in some cases more quickly than we possibly could. Doug will give you some color on this, and you'll hear Pat and Derek review the state of our operations, and we're ready for the volumes to start. This gives me confidence in our EPS guidance of approximately 10% growth over 2025. I'll now hand it over to the team to fill out the details.

Derek Taylor: While we've benefited from unseasonably mild weather and no major disruptions in the fourth quarter, I give full credit to the team for remaining focused and continuing to deliver excellent customer service.

Eric: While we benefited from unseasonably mild weather and no major disruptions in the fourth quarter.

Eric: Full credit to the team for remaining focused and continuing to deliver excellent customer service.

Eric: Finishing with positive momentum was key because over the last two weeks, we've had more seasonal weather across the network with frigid temperatures significant snow and blizzard conditions.

Derek Taylor: Finishing with positive momentum was key because over the last two weeks, we've had more seasonal weather across the network with frigid temperatures, significant snow, and blizzard conditions.

Pat Whitehead: Pat, you're up.

Derek Taylor: As we've said before,

Pat Whitehead: Merci Tracy et bienvenue a tous.

Eric: As we've said before.

Derek Taylor: Our make-the-plan, run-the-plan approach is not just about driving velocity and reliability.

Or make the plan from the planned approach is not just about driving velocity and reliability.

Pat Whitehead: It's great to be on the call today.

Pat Whitehead: I'll begin with safety. In the fourth quarter, our injury frequency ratio was down 14%, and our accident rate was down 29%.

Derek Taylor: It also builds an operational resilience

Eric: It also builds an operational resiliency, allowing us to bounce back quicker. After this kind of disruption we're talking days instead of weeks.

Derek Taylor: Allowing us to bounce back quicker after this kind of disruption.

Pat Whitehead: These results maintained a solid full-year performance, demonstrating our progress toward a commitment-based safety culture. For the full year, the injury frequency ratio improved 13%, and the accident rate improved 17%. This represents a record low year for injuries at CN, but we know we can and that we must do better. I'm proud of the positive strides we're making on our safety metrics, but this is a journey, and we won't be satisfied until all employees go home safely at the end of every shift. We are focused on our vision of a workplace that is free of accidents and injuries. We are committed to working as a team across all crafts and departments to achieve this vision.

Derek Taylor: We're talking days instead of weeks.

Eric: I'll now cover off some of the key operating metrics.

Derek Taylor: I'll now cover off some of the key operating metrics.

Derek Taylor: Starting with Car Velocity.

Eric: Starting with car velocity, what we view as the all in metric of how well the Huawei is running.

Derek Taylor: What we view as the all-in metric of how well the railway is running

Derek Taylor: It averaged 215 miles per day in Q4.

Eric: It averaged 215 miles per day in Q4.

Derek Taylor: That is a 4% versus last year and one of our best Q4s ever.

Eric: That is up 4% versus last year, and one of our best Q4 as ever.

Derek Taylor: Importantly, we maintain this level of velocity right up to the end of the year, even as volumes are ramping up.

Eric: Importantly, we maintain this level of velocity right up to the end of the year, even as volumes were ramping up.

So I want to welcome those who might be listening in for the first time today to our railroad. We do expect to fully integrate the Iowa Northern property later this year, pending a positive outcome of the STB review process. Before I ask the team to get into the details, I'll just recap where we are, and I'll start with safety.

Eric: Through dwell of $6 nine hours was a 4% improvement over last year.

Derek Taylor: Through Dwell of 6.9 hours was a 4% improvement over last year.

Derek Taylor: This is even more impressive given our traffic mix had less intermodal volume this year, which we know typically does not sit in a terminal for very long.

Pat Whitehead: Training and Development. Technology and behavior-based safety activities are essential to enhancing our safety. Thank you.

Eric: This is even more impressive given our traffic mix had less intermodal volume this year, which we know typically does not sit in a terminal for very long.

We ended the year with some meaningful improvements in both our accidents and injuries, and I am very pleased with both the work that has gone into this and the results. We're going to continue those efforts. This will be a relentless drive in the operation. We came into the fourth quarter a little battle-hardened after a couple of difficult quarters last year, where we managed to reframe the recession and a number of external shocks. And in Q4, we had the gift of some kinder weather, and our operations team took full advantage, posting some really strong on-time and velocity. As we rounded the corner into this year, we kicked off with some extreme winter temperatures across the network.

Derek Taylor: Continued focus on terminal throughput and collaboration between yards and the operation centers enabled this further improvement.

Pat Whitehead: One of the keys to supporting better safety outcomes is running a more predictable operation. Predictability is what underpins our velocity and our resilience. CN's Scheduled Operating Model has delivered seven consecutive quarters of operational and service excellence. Now, as we've said, the plan is dynamic and needs to adjust to our traffic, so with volumes rising, we have been refining our train pack. For example, we added a train start out of Prince Rupert, and we adjusted the Vancouver train plan to accommodate an uptick in volume in this corridor. Departing and arriving trains on time, what we call launch and land, continues to be a key focus of both network operations and field work. These are the basics of scheduled railroading. Fourth quarter origin train performance remained solid and in line with prior quarters at around 90%.

Eric: Continued focus on terminal throughput and collaboration between yards in the operation centers enabled us further improvement.

Eric: To give you a bit more color on our solid operating performance.

Derek Taylor: To give you a bit more color on our solid operating performance,

Derek Taylor: Network train speed of 19.6 miles per hour for Q4 is flat versus last year, but improved 5% on a full year basis to 19.8 miles per hour versus 18.9 in 2022.

Eric: Network train speed of $19 six miles per hour for Q4 is flat versus last year, but improved 5% on a full year basis to $19 eight miles per hour versus $18 nine in 2022.

Doug will talk about the customer's perspective of our service in a minute.

Speaker Change: Doug will talk about the customer's perspective of our service in a minute.

Speaker Change: But the metric I keep a close eye on is our local service commitment performance

Eric: But the metric I keep a close eye on is our local service commitment performance.

Speaker Change: or LSVP.

Eric: LSC Pete.

But as we lift out of that, the team is well on their way to getting this place back to that same level of opportunity. Whatever comes at us, we know that sticking with this model will ensure resiliency, enabling us always to perform at our best. Our full-year car velocity, for example, and this includes the challenges of the second and third quarters, was 213 miles per day.

Speaker Change: This means getting the customers the right cars on the right day and in the right service window.

Eric: This means getting the customers the right cars on the right day and in the right service window.

Speaker Change: Our fourth quarter LSCP was nearing all-time high.

Eric: Our fourth quarter LSC P was nearing all time highs.

Speaker Change: I am confident the team will continue to execute and keep it at or above our 90% goal as we go through 2024.

Pat Whitehead: Right where we need it to be to ensure on-time training. Q4 destination train performance was 70%, and we know there's room for improvement here by continuing to reduce our train meet delays and making timely crew swaps at intermediate stations. I'm pleased with how the network and field teams have managed the complexity of crew scheduling introduced by the new Canadian work rest.

Eric: I am confident the team will continue to execute and keep it at or above our 90% goal as we go through 2024.

Speaker Change: Incremental metric improvement is a continuous journey looking for every gain we can through process and execution.

Eric: Incremental metric improvement is a continuous journey looking for every game, we can through process and execution.

That's a 9% improvement over 2020. We're running the plan. We're getting more out of our assets, and this is driving some very consistent service goals for our customers. Strong, and the necessary foundation to move the economy and for us to deliver our growth agenda.

Speaker Change: The team is always looking for any types of operational efficiencies in everything they do.

Eric: The team is always looking for any types of operational efficiencies in everything they do.

Pat Whitehead: We continue to learn and adjust training schedules to adapt to this new requirement. Now you're going to hear more from Doug on volumes, but my team is getting ready for business. Making sure we have the right resources in place. We have a number of capital projects that will enable short-term operating efficiency and unlock long-term growth across the core mainline from the West Coast to Chicago. In 2024, we are investing in additional double track along our Vancouver to Chicago corridors with projects on our Edson sub and on the former EJ&E around Chicago. We continue to invest in rolling stock. The Locomotive Modification Program is well underway, and we are renewing a number of our car forms. Our training campuses were very busy in 2023.

Speaker Change: Some of our recent performance, as Ed used to say, has hit the sweet spot for this network.

Eric: Some of our recent performance is that used to say has hit the sweet spot for this network.

Speaker Change: Our focus is to have balance in our metrics.

At the end of the day, this is about doing what we say we're doing. We have a plan, and we're... We've been building up our track record operationally over these last seven quarters, and I think I speak for the entire... It feels really good to have that CN group back. Turning to our quarterly and full year results, I'll keep it to just a few highlights.

Eric: Our focus is to have balance in our metrics not focus solely on one to the detriment of the other and always being mindful of cost versus benefits.

Speaker Change: Not focus solely on one to the detriment of the other and always being mindful of cost versus benefit.

Speaker Change: Now, I will turn it over to Doug.

Eric: Now I will turn it over to Doug.

Doug McDonald: Thanks, Derek. Tracy already touched on a transition later this year with Remy, who is out in the field getting his boots dirty and seeing the operations up close.

Doug Macdonald: Thanks, Eric Tracy already touched on our transition later this year with Remy, who is outlet feels getting his boots dirty and seeing the operations up close I got ahead of the tariff impact and the whole operating team who continue to deliver top notch service. The feedback from customers is that we're continuing to have bright spot.

Doug McDonald: I got ahead of Derek and Pat and the whole operating team who continue to deliver top-notch service.

Our fourth-quarter adjusted EPS was 4% lower than last year, and our operating ratio was 59.7. For the year, adjusted EPS was 2% lower, and our operating ratio was 60.8%. These are the kind of results we can be very proud of in a challenging environment. And we said last quarter that we'd seen the bottom of the volumes, and this has played out as we expected. We've seen sequential improvement in our Q4RT, but now there remain question marks on the economy as we move into 2020. We're expecting continued improvement as the year progresses, and just now, we'll give you more details on all of our... Beyond the Lift from a Strengthening Economy.

Doug McDonald: The feedback from customers is that we're continuing to hit the right spot and make adjustments where needed.

Doug Macdonald: And make adjustments where needed.

Doug McDonald: We continue to deliver core pricing ahead of CN cost inflation.

Doug Macdonald: We continue to deliver core pricing ahead of CN cost inflation.

Doug Macdonald: Turning to slide 11, now fourth quarter revenues were down 2% versus last year on lower intermodal storage fees and a lower applicable fuel surcharge.

Doug McDonald: Turn to slide 11 now.

Pat Whitehead: We qualified 900 plus new conductors to cover attrition and meet the requirements of the work rest changes in Canada. And we're now ramping up to align with our growth. So overall, from a resource perspective, we're poised to meet the forecasted demand and grow with our customers.

Doug McDonald: Fourth quarter revenues were down 2% versus last year on lower intermodal storage fees and a lower applicable fuel surcharge.

Doug McDonald: Partially offset by volumes and solid same-store pricing.

Doug Macdonald: <unk> offset by volumes and solid same store pricing.

Doug McDonald: RTMs, which we view as the best measure of volume, were up 2% in the quarter, driven by record potash movements, strong propane, Canadian met coal exports, and refined petroleum products.

Doug Macdonald: Rpms, which we view as the best measure of volume were up 2% in the quarter driven by record potash movements strong propane Canadian met coal exports and refined petroleum products.

Derek Taylor: I'll now pass it to my good friend, Derek, to talk about how the team performed in the fourth quarter. Thanks, Pat, and good afternoon, everyone. The team finished the last quarter of 2023 with strong operational momentum, and we started the new year with a very fluid number. While we've benefited from unseasonably mild weather and no major disruptions in the fourth quarter, I give full credit to the team for remaining focused and continuing to deliver excellent customer service. Finishing with positive momentum was key because, over the last two weeks, we've had more seasonal weather across the network with frigid temperatures, significant snow, and blizzard conditions. As we've said before, our make-the-plan, run-the-plan approach is not just about driving velocity and reliability. It also builds operational resilience, allowing us to bounce back quicker after this kind of disruption. We're talking days instead of weeks.

We're also working on our growth. Leveraging our network, our strong service, and our customer and supply chain partners, and these are starting to bear fruit, and in some cases, more quickly than we think. Doug will give you some color on this.

Doug McDonald: We've seen sequential volume improvements since we hit the trough in July, as we said on our last call.

Doug Macdonald: We've seen sequential volume improvements since we hit the trial in July as we said on our last call.

Doug McDonald: P&C volumes were up 12% in the quarter.

Doug Macdonald: P&C volumes were up 12% in the quarter with the exception of crude oil all segments were up on a year over year basis.

Doug McDonald: With the exception of crude oil, all segments were up on a year-over-year basis.

And you'll hear Pat and Derek review the state of our operations, and we're ready for the volumes to start. This gives me confidence in our EPS guidance of approximately 10% growth over 2025. I'll now hand it over to the team to fill out the details. Pat, you're up. Merci, Tracy, et bienvenue à tous.

Doug McDonald: We are handling record propane exports and in line with the CN-specific growth initiative laid out at Investor Day.

Doug Macdonald: We are handling record propane exports and in line with our CN specific growth initiatives laid out at Investor day.

Doug McDonald: We also saw increased gas and diesel shipments out of Alberta and a modest recovery for chemicals and plastics feedstock.

Doug Macdonald: We also saw increased gas and diesel shipments out of Alberta, and a modest recovery for chemicals and plastics feedstocks.

Doug McDonald: Metals and minerals, RTMs were up 3% with positive growth across all segments, including frac sand, scrap steel, and aluminum, except for iron ore where cars were up and RTMs were down due to a shift back to more short haul domestic shipping.

Pat: It's great to be on the call today. I'll begin with safety. In the fourth quarter, our injury frequency ratio was down 14%, and our accident rate was down 29%.

Doug Macdonald: Metals and minerals Rpms were up 3% with positive growth across all segments, including Frac sand scrap steel and aluminum.

Pat: These results cap solid full-year performance, demonstrating our progress toward a commitment-based safety culture. For the full year, the injury frequency ratio improved 13%, and the accident rate improved 17%. This represents a record low year for injuries at CN, but we know we can, and that we must, do better. I'm proud of the positive strides we're making on our safety metrics, but this is a journey, and we won't be satisfied until all employees go home safely at the end of every shift. We are focused on our vision of a workplace that is free of accidents and injuries.

Doug Macdonald: Step four iron ore, where cars were up and rpms were down due to a shift back to more short haul domestic shipments.

Derek Taylor: I'll now cover off some of the key operating metrics. Starting with Car Velocity, which we view as the all-in metric of how well the railway is running, it averaged 215 miles per day in Q4. That is 4% versus last year and one of our best Q4s ever.

Doug McDonald: To finish off on merchandise, Forest Products volumes were down 5%, driven by softer market conditions.

Doug Macdonald: Finish off on merchandise forest products volumes were down 5% driven by softer market conditions.

Doug McDonald: For bulk, starting with fertilizers, RTMs were up 85%.

Doug Macdonald: For bulk starting with fertilizers rpms were up 85%.

Doug McDonald: We handle incremental domestic and record potash exports using our available capacity in the eastern and southern regions.

Doug Macdonald: We handle incremental domestic and record potash exports using our available capacity in the eastern and southern regions.

Derek Taylor: Importantly, we maintain this level of velocity right up to the end of the year, even as volumes are ramping up. Through Dwell of 6.9 hours was a 4% improvement over last year. This is even more impressive given our traffic mix had less intermodal volume this year, which we know typically does not sit in a terminal for very long. Continued focus on terminal throughput and collaboration between yards and the operation centers enabled this further improvement. To give you a bit more color on our solid operating performance, Network train speed of 19.6 miles per hour for Q4 is flat versus last year, but it improved 5% on a full year basis to 19.8 miles per hour versus 18.9 in 2022. Doug will talk about the customer's perspective of our service in a minute.

Doug McDonald: Coal was up 1%, with Canadian coal up 5% due to strong export met coal from northern BC and U.S. coal down 9% due to an operational issue at one of our customers' mines.

Doug Macdonald: Core was up 1% with Canadian coal up 5% due to strong export met coal from northern BC and U S coal down 9% due to our operational issue at one of our customers minds.

Pat: We are committed to working as a team across all crafts and departments to achieve this vision. Training and Development. Technology and behavior-based safety activities are essential to enhancing our safety. One of the keys supporting better safety outcomes is running a more predictable operation. Predictability is what underpins our velocity and our resilience. TN's Scheduled Operating Model has delivered seven consecutive quarters of operational and service excellence. Now, as we've said, the plane is dynamic and needs to adjust to our traffic. So with volumes rising, we have been refining our train package. For example, we added a train start out of Prince Rupert, and we adjusted the Vancouver train plan to accommodate an uptick in volume this quarter. Departing and arriving trains on time, what we call launch and landing, continues to be a key focus of both network operations and field. These are the basics of scheduled railroading.

Doug McDonald: Canadian grain shippers did not use all of the available supply chain capacity in Q4.

Doug Macdonald: Canadian grain shippers did not use all of the available supply chain capacity in Q4.

Doug McDonald: Weaker global commodity pricing led to a holdback in grain shifting volumes into H1 2024.

Doug Macdonald: Weaker global commodity pricing led to a hold back in grain shifting volumes into H, one and 2024.

Doug McDonald: Our Q4 U.S. grain exports were tempered by lower demand in China and increased global supply.

Doug Macdonald: Our Q4 U S grain exports were tempered by lower demand in China and increased global supply.

Doug Macdonald: Automotive rpms were up 22% continuing the strong trend that started in early 2023 with dealer inventory restocking.

Doug McDonald: Automotive RTMs were up 22%, continuing the strong trend that started in early 2023 with dealer inventory restocking.

Doug McDonald: Turning to Intermodal, International was down 11%, mainly due to the lingering effect of the port strike, particularly for Prince Rupert traffic.

Doug Macdonald: Turning to intermodal international was down 11%, mainly due to the lingering effect of the port strike, particularly for Prince Rupert traffic.

Derek Taylor: But the metric I keep a close eye on is our local service commitment performance, or LSVP. This means getting the customers the right cars on the right day and in the right service window. Our fourth quarter LSCP was nearing an all-time high.

Doug McDonald: However, imports at both West Coast ports return to pre-ILWU strike levels by December.

However, imports of both West Coast Port returned to pre <unk> used strike levels by December.

Doug McDonald: We are encouraged by the sequential uptake in volume in the fourth quarter and with our ongoing discussions with Steamship Line customers.

Doug Macdonald: We are encouraged by the sequential uptick in volume in the fourth quarter and with our ongoing discussions with steamship line customers.

Pat: Fourth quarter, Origin Train performance remained solid and in line with prior quarters at around 90%, right where we need it to be to ensure on-time training. Q4 Destination Train performance was 70%, and we know there's room for improvement here by continuing to reduce our train meet delays and making timely crew swaps at intermediate times. I'm pleased with how the network and field teams have managed the complexity of crew scheduling introduced by the new Canadian Work Restaurant.

Derek Taylor: I am confident the team will continue to execute and keep it at or above our 90% goal as we go through 2024. Incremental metric improvement is a continuous journey looking for every gain we can through process and execution. The team is always looking for any types of operational efficiencies in everything they do. Some of our recent performance, as Ed used to say, has hit the sweet spot for this network. Our focus is to have balance in our metrics, not focusing solely on one to the detriment of the other and always being mindful of cost versus benefit.

Doug Macdonald: Domestic was down 3% mainly in our retail segment our efforts in the CN specific initiatives like Falcon and E&P produced volumes mitigating some of the overall market softness.

Doug McDonald: Domestic was down 3% mainly in our retail segment. Our efforts in the CN-specific initiatives like Falcon and EMP produced volumes, mitigating some of the overall market software.

Doug McDonald: Moving to the outlook on slide 12,

Doug Macdonald: Moving to the outlook on slide 12, as Tracy said, we will benefit from a more favorable economy, but more importantly, our CN specific growth initiatives are starting to deliver.

Doug McDonald: As Tracy said, we will benefit from a more favorable economy, but more importantly, our CM-specific growth initiatives are starting to deliver.

Pat: We continue to learn and adjust train schedules to adapt to this new requirement. Now you're going to hear more from Doug on volumes, but my team is getting ready for business. Making sure we have the right resources in place. We have a number of capital projects that will enable short-term operating efficiency and unlock long-term growth across the core mainline from the West Coast to Chicago. In 2024, we are investing in additional double track along our Vancouver to Chicago corridors with projects on our Edson sub and on the former EJ&E around Chicago. We continue to invest in rolling stock. The Locomotive Modification Program is well underway, and we are renewing a number of our cars. Our training campuses were very busy in 2023.

Doug McDonald: We see lumber and panels coming back gradually in 2024. There is optimism in the economy about interest rates coming down, which should help stimulate new construction permits, and there is still a shortage of approximately 6 million homes in the U.S.

Doug Macdonald: We see lumber and panels coming back gradually in 2024.

Doug Macdonald: Optimism in the economy about interest rates coming down.

Doug Macdonald: Which should help stimulate new constructive construction permits and there is still a shortage of approximately 6 million homes in the U S.

Doug McDonald: Now, I will turn it over to Doug.

Doug McDonald: Thanks, Derek.

Doug McDonald: We project more frac stands and LPG shipments due to increased drilling in Northeast BC and this will be supported by the new siding near Fort St. John as mentioned in our Investor Day initiatives.

Doug Macdonald: We project more frac sand and LPG shipments due to increased drilling in northeast BC and this will be supported by the new sliding near Fort St. John as mentioned in our Investor day initiatives.

Doug McDonald: Tracy already touched on a transition later this year with Remy, who is out in the field getting his boots dirty and seeing the operations up close. I got ahead of Derek and Pat and the whole operating team, who continue to deliver top-notch service. The feedback from customers is that we're continuing to hit the right spot and make adjustments where needed. We continue to deliver core pricing ahead of CN cost inflation. Turn to slide 11 now. Fourth quarter revenues were down 2% versus last year due to lower intermodal storage fees and a lower applicable fuel surcharge. Partially offset by volumes and solid same-store pricing. RTMs, which we view as the best measure of volume, were up 2% in the quarter, driven by record potash movements, strong propane, Canadian met coal exports, and refined petroleum products.

Doug McDonald: In 2023, crude shipments were at an almost five-year low, but given the forecast for Canadian crude production, along with the delay in the startup of the Trans Mountain Pipeline, we see opportunities to handle incremental crude business in 2024.

Doug Macdonald: In 2023 crude shipments were at an almost five year low, but driven given the forecast for Canadian crude production along with the delay in the startup of the Trans Mountain pipeline, we see opportunities to handle incremental crude business in 2024.

Doug: We qualified 900 plus new conductors to cover attrition and meet the requirements of the work rest changes in Canada, and we're now ramping up to align with our growth forecast. So overall, from a resource perspective, we're poised to meet the forecasted demand and grow with our customers. I'll now pass it to my good friend Derek to talk about how the team executed in the fourth quarter. The team finished the last quarter of 2023 with strong operational momentum. And we started the new year with a very fluid.

Doug McDonald: CN Fuels Facility in our McMillan Yard will begin wet commissioning this month and will start producing Carlos and ramping up through Q1.

Doug Macdonald: The CN fuels facility in our Macmillan yard will begin wet commissioning this month, and we'll start producing carloads and ramping up through Q1.

Doug McDonald: We have now sold out capacity in phase two of this project and construction is underway.

Doug Macdonald: We have now sold out capacity in phase two of this project and construction is underway.

For potash exports, we expect to see a year over year headwind starting in Q1 related to the business. We picked up in 2023, while the Portland terminal was down.

Doug McDonald: For potash exports, we expect to see a year-over-year headwind starting in Q1 related to the business we picked up in 2023 while the Portland terminal was down.

Doug McDonald: We continue to get strong rateable volumes with our premium service and utilizing our available capacity in Eastern Canada.

Doug Macdonald: We continue to get strong ratable volumes with our premium service and utilizing our available capacity in eastern Canada.

Doug McDonald: We've seen sequential volume improvements since we hit the trough in July, as we said on our last call. P&C volumes were up 12% in the quarter. With the exception of crude oil, all segments were up on a year-over-year basis. We are handling record propane exports and in line with the CN-specific growth initiative laid out at Investor Day. We also saw increased gas and diesel shipments out of Alberta and a modest recovery for chemicals and plastics feedstock. For metals and minerals, RTMs were up 3% with positive growth across all segments, including frac sand, scrap steel, and aluminum, except for iron ore, where cars were up, and RTMs were down due to a shift back to more short haul domestic shipping. To finish off on merchandise, Forest Products volumes were down 5%, driven by softer market conditions. For bulk, starting with fertilizers, RTMs were up 85%. We handle incremental domestic and record potash exports using our available capacity in the eastern and southern regions.

Derek: While we benefited from unseasonably mild weather and no major disruptions in the fourth quarter, I give full credit to the team for remaining focused and continuing to deliver excellent customer service. Finishing with positive momentum was key because, over the last two weeks, we've had more seasonal weather across the network, with frigid temperatures, significant snow, and blizzard conditions. As we've said before, our make-the-plan, run-the-plan approach is not just about driving velocity and reliability. It also builds operational resilience, allowing us to bounce back quicker after this kind of disruption. We're talking days instead of weeks.

Doug McDonald: In Canadian coal, we have met coal production capacity coming online in the back half of the year related to the new Valerie mine and the Quintet restart in Q4.

Doug Macdonald: And Canadian call, we haven't met coal production capacity coming online in the back half of the year related to the new Valerie mine and the quintet restart in Q4.

Doug McDonald: As mentioned earlier, this year's Canadian harvest is down versus last year, but we are expecting a normal crop for the 2024-25 crop year and a better Q4 than what we just saw.

Doug Macdonald: As mentioned earlier this year's Canadian harvest is down versus last year, but we're expecting a normal crop or the 'twenty 'twenty four 'twenty five crop year and a better Q4 than what we just saw.

Doug McDonald: Recall that this year's inflation index for regulated grain movement is 12% and will receive our 2024-2025 pricing determination in the spring.

Doug Macdonald: Recall that this year's inflation index for regulated grain movement is 12% and we will receive our 'twenty to 'twenty four 'twenty five pricing determination in the spring.

Doug McDonald: U.S. Green will benefit from the acquisition of the IANR pending SCB approval, which we anticipate being completed sometime by next fall.

Doug Macdonald: U S Green will benefit from the acquisition of the INR pending STB approval, which we anticipate being completed from time by next fall.

Speaker Change: I'll now cover off some of the key operating metrics, starting with car velocity. What we view as the all-in metric of how well the railway is running, it averaged 215 miles per day in Q4.

Doug McDonald: We are projecting automotive demand to remain strong and volumes roughly on par with 2023, even with some outages related to retooling for EV production.

We are projecting automotive demand to remain strong and volumes roughly on par with 2023, even with some outages related to retooling for EV production.

Speaker Change: That is 4% versus last year and one of our best Q4s ever. Importantly, we maintain this level of velocity right up to the end of the year, even as volumes are ramping up. True dwell of 6.9 hours was a 4% improvement over last year.

Doug Macdonald: For International Intermodal, we continue to work on filling up Prince Rupert and building on recent momentum in Vancouver.

Doug McDonald: For International Intermodal, we continue to work on filling up Prince Rupert and building on recent momentum in Vancouver.

Doug McDonald: Coal was up 1%, with Canadian coal up 5% due to strong export met coal from northern BC and U.S. coal down 9% due to an operational issue at one of our customers' mines. Canadian grain shippers did not use all of the available supply chain capacity in Q4. Weaker global commodity pricing led to a holdback in grain shifting volumes into H1 2024. However, our Q4 U.S. grain exports were tempered by lower demand in China and increased global supply. Automotive RTMs were up 22%, continuing the strong trend that started in early 2023 with dealer inventory restocking.

Doug McDonald: We also expect growth in our southern ports in the Gulf driven by new service offerings into the Midwest.

We also expect growth in our southern ports in the Gulf driven by new service offerings into the Midwest.

Doug McDonald: Overall, we see a gradual return to pre-COVID volume levels over the next few quarters.

Overall, we see a gradual return to pre COVID-19 volume levels over the next few quarters.

Speaker Change: This is even more impressive given our traffic mix had less intermodal volume this year, which we know typically does not sit in a terminal for very long. Continued focus on terminal throughput and collaboration between yards and the operation centers enabled this further improvement, to give you a bit more color on our solid operating performance. Network train speed of 19.6 miles per hour for Q4 is flat versus last year, but it improved 5% on a full year basis to 19.8 miles per hour versus 18.9 in 2022. Doug will talk about the customer's perspective of our service in a minute. But the metric I keep a close eye on is our local service commitment performance, or LSVP. This means getting the customers the right cars, on the right day, and in the right service window. Our fourth quarter LSCP was nearing an all-time high.

Doug McDonald: Domestic growth will come from our new interline partnerships, specifically targeting truck volume.

Doug Macdonald: Domestic growth will come from our new interline partnerships, specifically targeting truck volumes.

Doug McDonald: We have capacity on the network, in our terminals, and with our fleet to grow volumes as the economy improves.

We have capacity on the network in our terminals and with our fleet to grow volumes as the economy improves.

Doug Macdonald: In summary, we've rotated through some of the headwinds which challenged us in 2023.

Doug McDonald: In summary, we've rotated through some of the headwinds which challenged us in 2023.

We have good momentum.

Doug McDonald: We have good momentum, CN's customer service is excellent, and our CN-specific growth projects are delivering.

Doug Macdonald: <unk> customer service is excellent and our CN specific growth projects are delivering.

Speaker Change: With that, I'll pass it over to Chris Lang and go through the numbers.

With that I'll pass it over to Jeff Lang and go through the numbers.

Doug McDonald: Turning to Intermodal, International was down 11%, mainly due to the lingering effect of the port strike, particularly for Prince Rupert traffic. However, imports at both West Coast ports returned to pre-ILWU strike levels by December. We are encouraged by the sequential uptake in volume in the fourth quarter and with our ongoing discussions with Steamship Line customers. Domestic was down 3%, mainly in our retail segment. Our efforts in the CN-specific initiatives like Falcon and EMP have delivered volumes, mitigating some of the overall market software. Moving to the outlook on slide 12, as Tracy said, we will benefit from a more favorable economy, but more importantly, our CM-specific growth initiatives are starting to deliver. We see lumber and panels coming back gradually in 2024.

Chris Wetherbee: Merci beaucoup Doug. J'ai le plaisir de parler de nos résultats du quatrième temps.

Merci Beaucoup Doug.

Jeff Lang: This is a little notice was does get the on premise.

Doug McDonald: Turning to slide 14, volumes in terms of RTMs were higher by 2% on a year-over-year basis, while revenues were down roughly

Turning to slide 14 volumes in terms of Rpms were higher by 2% on a year over year basis, while revenues were down roughly 2%.

Doug McDonald: We delivered operating income of around $1.8 billion, 5% lower than last year, with an operating ratio of 59.3%, 140 basis points higher than last year.

Jeff Lang: We delivered operating income of around $1 8 billion, 5% lower than last year with an operating ratio of 59, 3%, a 140 basis points higher than last year.

Speaker Change: I am confident the team will continue to execute and keep it at or above our 90% goal as we go through 2024. Incremental metric improvement is a continuous journey looking for every gain we can through process and execution. The team is always looking for any types of operational efficiencies in everything they do.

Jeff Lang: We had two nonrecurring items below the line.

Doug McDonald: We add two non-recurring items below the line.

Doug McDonald: During the quarter, we implemented a tax reorganization that produced around $700 million of one-timing.

Jeff Lang: During the quarter, we implemented a tax reorganization that produced around $700 million of one time income.

Doug McDonald: As a consequence of this, our overall tax status, both in Canada and in the U.S., has not materially changed, and our effective tax rate for 2024 will be approximately 25%.

Jeff Lang: As a consequence of this our overall tax status, both in Canada and in the U S has not materially changed and our effective tax rate for 2024 will be approximately 25%.

Speaker Change: Some of our recent performance, as Ed used to say, has hit the sweet spot for this network. Our focus is to have balance in our metrics, not focused solely on one to the detriment of the other, and always being mindful of cost versus benefit. Now, I will turn it over to Doug. Thanks, Derek.

Doug McDonald: So about 50 basis points higher than in 2023.

Jeff Lang: So about 50 basis points higher than in 2023.

Doug McDonald: There is optimism in the economy about interest rates coming down, which should help stimulate new construction permits, and there is still a shortage of approximately 6 million homes in the U.S. We project more frac stands and LPG shipments due to increased drilling in Northeast BC, and this will be supported by the new siding near Fort St. John, as mentioned in our Investor Day initiatives. In 2023, crude shipments were at an almost five-year low, but given the forecast for Canadian crude production, along with the delay in the startup of the Trans Mountain Pipeline, we see opportunities to handle incremental crude business in 2024. CN Fuels Facility in our McMillan Yard will begin wet commissioning this month and will start producing Carlos and ramping up through Q1.

Doug McDonald: Cash taxes will be around 80% of our overall effective tax, which is in line with prior years.

Jeff Lang: Cash taxes will be around 80% of our overall effective tax which is in line with prior years.

Doug McDonald: We also monetize a surplus right-of-way in Ontario amounting to approximately $130 million.

Jeff Lang: We also monetize a surplus right of way in Ontario, amounting to approximately $130 million.

Doug McDonald: On a reported basis, EPS was $3.29, up 57% versus last year.

Doug: Tracy already touched on the transition later this year with Remy, who is out in the field getting his boots dirty and seeing the operations up close. I gotta hand it to Derek and Pat and the whole operating team, who continue to deliver top-notch service. The feedback from customers is that we're continuing to hit the right spot and make adjustments where needed. We continue to deliver core pricing ahead of CN cost inflation. Turn to slide 11 now.

Jeff Lang: On a reported basis EPS was $3 29 up 57% versus last year.

Doug McDonald: However...

Jeff Lang: However, excluding these onetime items adjusted EPS was $2 <unk> down.

Doug McDonald: Excluding these one-time items, adjusted EPS was $2.02, down 4% year-over-year.

Jeff Lang: Down 4% year over year.

Doug McDonald: In terms of expenses, labor was 12% higher versus last year, driven by 5% higher average headcount and general wage increases.

Jeff Lang: In terms of expenses labor was 12% higher versus last year, driven by 5% higher average head count and general wage increases.

Doug McDonald: Fuel expense was more than $100 million lower than in the same period last year, mostly due to a 17% decrease in fuel prices.

Jeff Lang: Fuel expense was more than a $100 million lower than in the same period last year, mostly due to a 17% decrease in fuel prices.

Doug: Fourth quarter revenues were down 2% versus last year on lower intermodal storage fees and a lower applicable fuel surcharge, partially offset by volumes and solid same-store prices. RTMs, which we view as the best measure of volume, were up 2% in the quarter, driven by record potash movements, strong propane, Canadian met coal exports, and refined petroleum products. We've seen sequential volume improvements since we hit the trow in July, as we said on our last call. P&C volumes were up 12% in the quarter. With the exception of crude oil, all segments were up on a year-over-year basis.

Jeff Lang: Turning to our full year results on slide 15, we delivered an adjusted EPS of 2% lower than last year, which is aligned with our revised guidance.

Doug McDonald: Turning to our full year results on slide 15, we delivered an adjusted EPS of 2% lower than last year, which is aligned with our revised guidance.

Doug McDonald: We have now sold out capacity in phase two of this project, and construction is underway. For potash exports, we expect to see a year-over-year headwind starting in Q1 related to the business we picked up in 2023 while the Portland terminal was down. We continue to get strong rateable volumes with our premium service and utilize our available capacity in Eastern Canada. For Canadian coal, we have met coal production capacity coming online in the back half of the year related to the new Valerie mine and the Quintet restart in Q4. As mentioned earlier, this year's Canadian harvest is down versus last year, but we are expecting a normal crop for the 2024-25 crop year and a better Q4 than what we just saw.

Doug McDonald: Our full year operating ratio of 60.8% was up 90 basis point versus last year on an adjusted basis.

Jeff Lang: Our full year operating ratio of 68% was up 90 basis points versus last year on an adjusted basis. Despite significant disruptions in Q2 and Q3 from forest fires floods.

Doug McDonald: Despite significant disruptions in Q2 and Q3, from forest fires,

Doug McDonald: Flooding and the West Coast port strike that negatively impacted EPS by roughly 17 cents.

Jeff Lang: Flooding and the West coast Port strike that negatively impacted EPS by roughly 17.

Doug McDonald: We generated close to $3.9 billion of free cash flow for the year.

Jeff Lang: We generated close to $3 $9 billion of free cash flow for the year.

Doug McDonald: Disciplined capital expenditures of $3.1 billion, excluding capital recoverable from customers, represents around 18.5% of revenue.

Jeff Lang: Disciplined capital expenditures of $3 1 billion.

Doug: We are handling record propane exports and are in line with the CN-specific growth initiative laid out at Investor Day. We also saw increased gas and diesel shipments out of Alberta and a modest recovery for chemicals and plastics feedstock. In Metals and Minerals, RTMs were up 3% with positive growth across all segments, including frac, sand, scrap, steel, and aluminum, except for iron ore, where cars were up, and RTMs were down due to a shift back to more short-haul domestic shipping. To finish off on merchandise, Forest Products volumes were down 5% driven by softer market conditions.

Jeff Lang: Excluding capital recoverable from customers represents around 18, 5% of revenues.

Doug McDonald: We are investing in our rail car fleet and continue to invest steadily in track maintenance.

Jeff Lang: We are investing in our railcar fleet and continue to invest steadily in track maintenance as well as capacity expansions time with our customers volumes and always with a view to capital efficiency.

Doug McDonald: as well as capacity expansion,

Doug McDonald: Time with our customers volumes and always with a view to capital efficiency.

Doug McDonald: Recall that this year's inflation index for regulated grain movement is 12%, and we will receive our 2024-2025 pricing determination in the spring. U.S. Green will benefit from the acquisition of the IANR pending SCB approval, which we anticipate being completed sometime by next fall. We are projecting automotive demand to remain strong and volumes roughly on par with 2023, even with some outages related to retooling for EV production. For International Intermodal, we continue to work on filling up Prince Rupert and building on recent momentum in Vancouver. We also expect growth in our southern ports in the Gulf driven by new service offerings into the Midwest. Overall, we see a gradual return to pre-COVID volume levels over the next few quarters. Domestic growth will come from our new interline partnerships, specifically targeting truck volume. We have capacity on the network, in our terminals, and with our fleet to grow volumes as the economy improves. In summary, we've rotated through some of the headwinds that challenged us in 2023. We have good momentum, CN's customer service is excellent, and our CN-specific growth projects are delivering.

Jeff Lang: ROIC, which is highly sensitive to the income numerator came in slightly under 15% and three.

Doug McDonald: ROIC, which is highly sensitive to the income numerator, came in slightly under 15% in 2023.

Jeff Lang: Moving to slide 16, let me provide some visibility to 2024.

Doug McDonald: Moving to slide 16, let me provide some visibility to 2024.

Doug McDonald: We believe the economy for the year will be more constructive than in 2023, with slightly positive industrial production growth and interest rates stabilizing.

Jeff Lang: We believe the economy for the year will be more constructive than in 2023 with slightly positive industrial production growth and interest rates stabilizing.

In addition consensus opinion on the risk of an economic recession appears to have diminished.

Doug McDonald: In addition, consensus opinion on the risk of an economic recession appears to have diminished.

Doug: For bulk, starting with fertilizers, RTMs were up 85%. We handle incremental domestic and record potash exports using our available capacity in the eastern and southern regions. Coal was up 1%, with Canadian coal up 5% due to strong export MET coal from northern BC and U.S. coal down 9% due to an operational issue at one of our customers' mines. Canadian grain shippers did not use all of the available supply chain capacity in Q4.

Doug McDonald: However.

Jeff Lang: However, the.

Doug McDonald: The environment remains quite volatile with continued monetary policy and geopolitical risks.

Jeff Lang: The environment remains quite volatile with continued monetary policy and geopolitical risk.

Doug McDonald: Weak sectors, particularly intermodal international and forest products, continue to improve sequentially and should stabilize to pre-pandemic levels.

Jeff Lang: With sector, particularly intermodal international and forest products continued to improve sequentially and should stabilize to pre pandemic levels.

Doug McDonald: We assume that Canadian grain will come back to a three-year average in the second half of the year.

Jeff Lang: We assume the Canadian grain will come back to a three year average in the second half of the year.

Doug McDonald: With this in mind, and along with our CM-specific growth initiatives, we expect volumes in terms of RTMs to be in the mid-single-digit range.

Jeff Lang: With this in mind and along with our CN specific growth initiatives, we expect volumes in terms of rpms to be in the mid single digit range.

Doug: Weaker global commodity prices led to a holdback in grain, shifting volumes into H1 2024. However, our Q4 U.S. grain exports were tempered by lower demand in China and increased global supply. Automotive RTMs were up 22%, continuing the strong trend that started in early 2023 with dealer inventory restocking. Turning to intermodal, international is down 11% mainly due to the lingering effect of the pork strike, particularly for Prince Rupert traffic. However, imports from both West Coast ports return to pre-ILWU strike levels by December. We are encouraged by the sequential uptick in volume in the fourth quarter and with our ongoing discussions with Steamship Line customers. Domestic was down 3%, mainly in our retail segment.

Doug McDonald: As volumes come back, we should see the positive impact of our operating leverage, particularly with merchandise business, where we currently have capacity on our trains and can bring in on volumes at low incremental cost.

Jeff Lang: As volumes come back we should see the positive impact of our operating leverage, particularly with merchandise business, where we currently have capacity on our trains and can bring them on volumes at low incremental cost.

Jeff Lang: However, we have roughly $200 million.

Jeff Lang: Cost headwinds, mostly related to depreciation and incentive compensation and pension.

With that, I'll pass it over to Chris Lang and go through the numbers. Merci beaucoup, Doug. J'ai le plaisir de parler des résultats du quatrième trimestre. Turning to slide 14, volumes in terms of RTMs were higher by 2% on a year-over-year basis, while revenues were down roughly. We delivered operating income of around $1.8 billion, 5% lower than last year, with an operating ratio of 59.3%, 140 basis points higher than last year. We add two non-recurring items below the line. During the quarter, we implemented a tax reorganization that produced around $700 million of one-time gains. As a consequence of this, our overall tax status, both in Canada and in the U.S., has not materially changed, and our effective tax rate for 2024 will be approximately 25%, meaning about 50 basis points higher than in 2023. Cash taxes will be around 80% of our overall effective tax, which is in line with prior years. We also monetize a surplus right-of-way in Ontario amounting to approximately $130 million.

Doug McDonald: Incentive Compensation and Pension.

Jeff Lang: We assume foreign exchange for the year of around 75, and <unk> of 70 to 80 million U S dollar per barrel.

Doug McDonald: We assume foreign exchange for the year of around 75 cents and WTI of 70 to 80 US dollars per barrel.

Doug McDonald: In this environment, we expect to deliver about 10% EPS growth in 2024 versus 2023.

Jeff Lang: In this environment, we expect to deliver about 10% EPS growth in 2024 versus 2023.

Jeff Lang: Our capex for 2024 will be around $3 5 billion net.

Doug McDonald: Our CapEx for 2024 will be around $3.5 billion net of customer contributions, and we expect ROIC to be 15% to 17% within the targeted range provided at our investor data.

Jeff Lang: Net of customer contributions and we expect ROIC to be 15% to 17% within the targeted range provided at our Investor day.

Jeff Lang: In terms of shareholder distributions, we are pleased to announce that our board of directors approved a 7% dividend increase for 2024.

Doug McDonald: In terms of shareholder distributions, we are pleased to announce that our Board of Directors approved a 7% dividend increase for 2024.

Doug: Our efforts in the CN-specific initiatives, like Falcon and EMP, produced volumes, mitigating some of the overall market softness. Moving to the outlook on slide 12, As Tracy said, we will benefit from a more favorable economy, but more importantly, our CM-specific growth initiatives are starting to deliver. We see lumber and panels coming back gradually in 2024. There is optimism in the economy about interest rates coming down, which should help stimulate new construction permits. And there is still a shortage of approximately 6 million homes in the US.

Doug McDonald: This represents the 28th consecutive year of dividend increase since the 1995 IPO.

Jeff Lang: This represented the 28th consecutive year of dividend increase since the $19 95 IPO.

Jeff Lang: The board also approved a new share buyback program of up to 32 million shares for an amount in the range of $4 billion.

Doug McDonald: The Board also approved a new share buyback program of up to 32 million shares for an amount in the range of $4 billion through a normal course issuer bid from February 1, 2024 to January 31, 2025, in line with our previous program's budget before we opportunistically increased it last October.

Jeff Lang: Through our normal course issuer bid from February one 2024 to January 31, 2025 in line with our previous programs budget before we Opportunistically increased it last October.

Doug McDonald: In conclusion, let me reiterate a few points.

Jeff Lang: In conclusion, let me reiterate a few points we.

Doug McDonald: We have delivered seven consecutive quarters of exceptional operating performance.

Jeff Lang: We have delivered seven consecutive quarters of exceptional operating performance.

On a reported basis, EPS was $3.29, up 57% versus last year. However...

Doug: We project more crack stands and LPG shipments due to increased drilling in Northeast B.C., and this will be supported by the new siting near Fort St. John, as mentioned in our Investor Day initiatives. In 2023, crude shipments were at an almost five-year low, but given the forecast for Canadian crude production, along with the delay in the startup of the Trans Mountain Pipeline, we see opportunities to handle incremental crude business in 2024. CN Fuels' facility in our McMillan yard will begin wet commissioning this month and will start producing Carlos and ramping up through Q1.

Doug McDonald: We are providing excellent customer service.

Jeff Lang: We are providing excellent customer service.

Doug McDonald: We have managed through significant external challenges to deliver strong relative financial performance.

Jeff Lang: We have managed through significant external challenges to deliver strong relative financial performance.

Excluding these one-time items, adjusted EPS was $2.02, down 4% year-over-year. In terms of expenses, labor was 12% higher versus last year, driven by a 5% higher average headcount and general wage increases. Fuel expense was more than $100 million lower than in the same period last year, mostly due to a 17% decrease in fuel prices.

Doug McDonald: Although we remain mindful of ongoing economic and geopolitical volatility, we are calling for some recovery in 2024.

Jeff Lang: Although we remain mindful of ongoing economic and geopolitical volatility we are calling for some recovery in 2024.

Doug McDonald: In particular, we expect Intermodal International to return to pre-COVID levels and Forrest products to gradually ramp up over the next 18 months.

Jeff Lang: In particular, we expect intermodal international to return to pre Covid levels and forest products to gradually ramp up over the next 18 months.

Jeff Lang: Our pivot to growth is underway and assuming a positive economic backdrop, we are guiding for EPS growth of around 10% versus 2023 underpinned by mid single digit volume growth.

Doug McDonald: Our pivot to growth is underway, and assuming a positive economic backdrop, we are guiding for EPS growth of around 10% versus 2023, underpinned by mid-single-digit volume growth.

Turning to our full year results on slide 15, we delivered an adjusted EPS of 2% lower than last year, which is aligned with our revised guidance. Our full year operating ratio of 60.8% was up 90 basis points versus last year on an adjusted basis. Despite significant disruptions in Q2 and Q3, from forest fires, flooding, and the West Coast port strike that negatively impacted EPS by roughly 17 cents, we generated close to $3.9 billion of free cash flow for the year.

Doug: We have now sold out capacity in Phase 2 of this project, and construction is underway. For potash exports, we expect to see a year-over-year headwind starting in Q1 related to the business we picked up in 2023 while the Portland terminal was down. We continue to get strong rateable volumes with our premium service and utilize our available capacity in Eastern Canada. For Canadian coal, we have met coal production capacity coming online in the back half of the year related to the new Valerie mine and the Quintet restart in Q4. As mentioned earlier, this year's Canadian harvest is down versus last year, but we are expecting a normal crop for the 2024-25 crop year and a better Q4 than what we just saw. Recall that this year's inflation index for regulated grain movement is 12%, and we will receive our 2024-2025 pricing determination in the spring. U.S. Green will benefit from the acquisition of the IANR pending STB approval, which we anticipate being completed sometime by next fall.

Doug McDonald: We have a strong balance sheet and we plan on using that financial flexibility to take advantage of our opportunities.

Jeff Lang: We have a strong balance sheet and we plan on using the financial flexibility to take advantage of opportunities.

Doug McDonald: Let me pass it back to Tracy.

Let me pass it back to Tracy.

Tracy Robinson: Thanks, Suzanne. Well said. Operator will now go to questions.

Tracy Robinson: Thanks, Suzanne offset operator, we will now go to questions.

Speaker Change: Thank you. We will now begin the question and answer session. As previously mentioned, we ask that you kindly limit yourselves to one question.

Speaker Change: Thank you we will now begin the question and answer session. As previously mentioned, we ask that you kindly limit yourself to one question.

Speaker Change: Our first question will come from Chris Wetherbee from Citi. Please go ahead. Your line is open.

Speaker Change: Our first question will come from Chris Wetherbee from Citi. Please go ahead. Your line is open.

Chris Wetherbee: Hey, thanks. Good afternoon. Maybe starting on the 24 guide, if we could maybe unpack some of the moving parts a little bit. So, RTM guide, mid-single digits, and then I think, Ghislaine, you talked about maybe $200 million of some cost headwinds there. You have about 5% coming below the line, so I just want to make sure I understand sort of the operating leverage of the business. Is it mostly offset by the 200, or maybe we can kind of think about how you should be able to generate incremental margins on that mid-single digit RTM guide?

Chris Wetherbee: Hey, Thanks, good afternoon.

Disciplined capital expenditures of $3.1 billion, excluding capital recoverable from customers, represent around 18.5% of revenue. We are investing in our rail car fleet and continue to invest steadily in track maintenance, as well as capacity expansion, in line with our customers' volumes and always with a view to capital efficiency. ROIC, which is highly sensitive to the income numerator, came in slightly under 15% in 2023. Moving to slide 16, let me provide some visibility to 2024. We believe the economy for the year will be more constructive than in 2023, with slightly positive industrial production growth and interest rates stabilizing. In addition, the consensus opinion on the risk of an economic recession appears to have diminished. However, the environment remains quite volatile with continued monetary policy and geopolitical risks.

Chris Wetherbee: Maybe starting on the 24 guide if we could maybe unpack some of the moving parts a little bit So Artyom guide mid single digits.

Chris Wetherbee: And then I think just when you talked about maybe $200 million of some cost headwinds there.

5% coming below the lines I, just want to make sure I understand sort of the operating leverage of the business are mostly offset by the 200 and maybe we can kind of think about how you should be able to generate incremental margins on that mid single digit RPM growth.

Chris Wetherbee: Okay. Chris This is Jason let me take a shot at that so and we've got a forecast of 10% EPS and then volume as you've noted the forecast assumes a gentle kind of recovery economically as we go through the year, but it also assumes.

Chris Wetherbee: Okay, Chris, this is Tracy. Let me take a shot at this. So, we've got a forecast of 10% EPS, and on volume, as you've noted, the forecast assumes a gentle kind of recovery economically as we go through the year, but it also assumes those customer-specific growth initiatives that you heard Doug talk about. On margin, as volumes come back, we should see the positive impact of our operating leverage. So, as volumes went down, we saw it go down. As volumes come back up, we're going to lift, especially in the merchandise business where we currently have to pass.

Doug: We are projecting automotive demand to remain strong, and volume is roughly on par with 2023, even with some outages related to retooling for EV production. For International Intermodal, we continue to work on filling up Prince Rupert and building on recent momentum in Vancouver. We also expect growth in our southern ports in the Gulf, driven by new service offerings into the Midwest. Overall, we see a gradual return to pre-COVID volume levels over the next few quarters. Domestic growth will come from our new interline partnerships, specifically targeting truck volume.

Jason: Those customer specific growth initiatives that you heard Doug talk about on margin.

Jason: As volumes come back we should see the positive impact of our operating metrics.

Jason: As volumes went down we saw go down as volumes come back up are going to lift, especially in the merchandise business, where we currently have capacity on our training and of course in a pricing environment.

Weak sectors, particularly intermodal international and forest products, continue to improve sequentially and should stabilize to pre-pandemic levels. We assume that Canadian grain will come back to a three-year average in the second half of the year. With this in mind, and along with our CM-specific growth initiatives, we expect volumes in terms of RTMs to be in the mid-single-digit range. As volumes come back, we should see the positive impact of our operating leverage, particularly in the merchandise business, where we currently have capacity on our trains and can bring in volumes at a low incremental cost. Incentive Compensation and Pension

Tracy Robinson: on our trains and of course the pricing environment.

Tracy Robinson: You know, as you've watched us over the last 18 months, we continue to both deliver and we continue to expect pricing above rail inflation. So that's all positive news. We do have the headwinds that you just talked about, but that's going to be offset to the extent that we'll drive the 10% to the bottom.

Jason: LNG flushes over the last 18 months, we continue to both deliver and we continue to expect pricing above rail inflation. So that's all positive news, we do have the headwinds that <unk> talked about that Ken.

Doug: We have capacity on the network, in our terminals, and with our fleet to grow volumes as the economy improves. In summary, we've rotated through some of the headwinds that challenged us in 2023. We have good momentum, CN's customer service is excellent, and our CN-specific growth projects are delivering. With that, I'll pass it over to Shislaine and go through the numbers. Merci beaucoup Doug. J'ai le plaisir de parler des résultats de notre quatrième test.

Speaker Change: It's going to be offset to the extent that will drive the 10% to the bottom line that makes sense.

Speaker Change: Does that make sense?

Speaker Change: It does, so just a way to think about it is there still is the sort of normal operating leverage on the revenue growth, mostly offset by those incremental costs, but that kind of gets you to, you know, kind of core growth before the buyback in line with RTM growth. Is that roughly the right way to think about it? Yeah, you got it pretty much. Thanks. Next? Okay, thank you.

Speaker Change: It does so just the way to think about it is there still is sort of normal operating leverage on the revenue growth, mostly offset by the by those incremental cost to pay that kind of gets you to.

Speaker Change: Core growth before the buyback in line with our Tam growth is that roughly the right way to think about it yes.

Speaker Change: Yes, you got it pretty much.

Next okay. Thank you.

Speaker Change: Our next question comes from Cherilyn Radbourne from TD Cowan. Please go ahead, your line is open.

We assume foreign exchange for the year of around 75 cents and WTI of 70 to 80 US dollars per barrel. In this environment, we expect to deliver about 10% EPS growth in 2024 versus 2023. Our CapEx for 2024 will be around $3.5 billion net of customer contributions, and we expect ROIC to be 15% to 17% within the targeted range provided by our investor data. In terms of shareholder distributions, we are pleased to announce that our Board of Directors approved a 7% dividend increase for 2024. This represents the 28th consecutive year of dividend increases since the 1995 IPO. The Board also approved a new share buyback program of up to 32 million shares for an amount in the range of $4 billion through a normal course issuer bid from February 1, 2024 to January 31, 2025, in line with our previous program's budget before we opportunistically increased it last October. In conclusion, let me reiterate a few points.

Speaker Change: Our next question comes from Cherilyn Radbourne from TD Cowen. Please go ahead. Your line is open.

Shislaine: Turning to slide 14, volumes in terms of RTMs were higher by 2% on a year-over-year basis, while revenues were down roughly. We delivered operating income of around $1.8 billion, 5% lower than last year, with an operating ratio of 59.3%, 140 basis points higher than last year. We have two non-recurring items below the line. During the quarter, we implemented a tax reorganization that produced around $700 million of one-time income.

Cherilyn Radbourne: Thanks very much. Good afternoon. I just wanted to dig in a little bit in terms of international, intermodal. And you did mention that the Canadian West Coast market share was back to pre-strike levels in December. Just curious, given what we're seeing in the Red Sea and on the Panama Canal, just be curious whether you're seeing inquiries at this point that could be incremental to that market share and how likely those volumes might be to be sticky.

Cherilyn Radbourne: Thanks, very much good afternoon.

Cherilyn Radbourne: Just wanted to dig in a little bit in terms of international intermodal.

Cherilyn Radbourne: And you did mention that the Canadian West coast market share with back to pre strike levels in December just curious given what we're seeing in the Red Sea in Panama.

Cherilyn Radbourne: Panama Canal, just be curious whether youre seeing inquiries at this point that could be incremental to that market share.

Cherilyn Radbourne: How likely those volumes might be sticky.

Speaker Change: Thanks, Charlene its Doug.

Cherilyn Radbourne: Thanks, Charlene. It's Doug. No, it's a great question. It's obviously an ever-changing environment out there. So, we spend a lot of time talking with customers about it. We are seeing, obviously, some capacity come out of the vessel market with them having to go around Africa now. So, we see some tightening overall. And with that, we're starting to hear with the different problems of both the Panama and the Suez Canal that the West Coast is looking like a more viable option moving forward. We haven't seen those volumes come in yet, but we're expecting them to gradually ramp up if they do come forward. But so far, so good. We've actually just been able to maintain our pre-COVID levels now for the last, I'll say, almost eight weeks. And we see that continuing on moving forward on both Prince Rupert and

Doug Macdonald: It's a great question, it's obviously an ever changing environment out there. So we spent a lot of time talking with customers about it we are seeing obviously some capacity come out of the vessel market with them having to go around GOR around Africa now so we see some tightening overall and with that we're starting to.

Shislaine: As a consequence of this, our overall tax status, both in Canada and in the U.S., has not materially changed, and our effective tax rate for 2024 will be approximately 25%, so about 50 basis points higher than in 2023. Cash taxes will be around 80% of our overall effective tax, which is in line with prior years.

Here with the different problems of both the Panama and the Suez Canal that the West Coast is looking like a more viable option moving forward, we haven't seen those volumes come in yet, but we're expecting them to gradually ramp up if they do come forward, but so far so good we've actually just who have been able to maintain our pre COVID-19 levels now.

Shislaine: We also monetize a surplus right-of-way in Ontario amounting to approximately $130 million. On a reported basis, EPS was $3.29, up 57% versus last year. However, excluding these one-time items, Adjusted EPS was $2.02, down 4% year-over-year. In terms of expenses, labor was 12% higher versus last year, driven by a 5% higher average headcount and general wage increases. Fuel expense was more than $100 million lower than in the same period last year, mostly due to a 17% decrease in fuel prices.

The last I'll say, almost eight weeks and we see that continuing on moving forward on both Prince Rupert and Vancouver.

Tracy Robinson: We have delivered seven consecutive quarters of exceptional operating performance.

Speaker Change: That's my one. Thank you.

Speaker Change: That's my one thank you.

Speaker Change: Our next question comes from Ken Hoexter from Bank of America. Please go ahead your line is open.

Tracy Robinson: We are providing excellent customer service, and we have managed through significant external challenges to deliver strong relative financial performance.

Speaker Change: Our next question comes from Ken <unk> from Bank of America. Please go ahead. Your line is open.

Ken Hoexter: Great. Hey, good afternoon. Trace, you were just saying, I guess in the EPS target of 10%, you're looking at long-term going up to 10% to 15%. I just want to understand the acceleration. You talked about hiring, I guess pre-hiring employees. Are you saying you're pre-resourced now because of the work rule changes, or are you going to accelerate the hiring? I just want to understand the cost implications versus your growth targets. Thanks.

Ken: Great Hey, good afternoon.

Ken: Tracy just plain I guess in the EPS target of 10% Youre looking at long term going up to 10 to 15, just want to understand the acceleration you talked about hiring.

Tracy Robinson: Although we remain mindful of ongoing economic and geopolitical volatility, we are calling for some recovery in 2024. In particular, we expect Intermodal International to return to pre-COVID levels and Forrest products to gradually ramp up over the next 18 months. Our pivot to growth is underway, and assuming a positive economic backdrop, we are guiding for EPS growth of around 10% versus 2023, underpinned by mid-single-digit volume growth. We have a strong balance sheet, and we plan on using that financial flexibility to take advantage of our opportunities. Let me pass it back to Tracy.

Shislaine: Turning to our full-year results, on slide 15, we delivered an adjusted EPS of 2% lower than last year, which is aligned with our revised guidance. Our full-year operating ratio of 60.8% was up 90 basis points versus last year on an adjusted basis. Despite significant disruptions in Q2 and Q3, from forest fires, flooding, and the West Coast forest strike that negatively impacted EPS by roughly $0.17, PG&E generated close to 3.9 billion dollars of free cash flow for the year. Disciplined capital expenditures of $3.1 billion, excluding capital recoverable from customers, represents around 18.5% of revenue. We are investing in our rail car fleet and continue to invest steadily in track maintenance, as well as Capacity Expansion, in line with our customers' volumes and always with a view to capital efficiency. ROIC, which is highly sensitive to the income numerator, came in slightly under 15% in 2003.

Ken: Pre hiring employees or are you, saying your pre resource now because of the.

Ken: Because of the work rule changes or are you going to accelerate the hiring I just wanted to stand the cost implications versus your growth targets. Thanks.

Trace: I'll start with that one, Ken. So we've been hiring through the year to offset attrition. And that's the lever we're using right now to manage our workforce size is hiring relative to attrition. And as we look forward, you'll see our hiring ramp up to match the volumes as we see them coming back. We've got a great line of sight on a number of the areas. Doug kind of took you through them. And so we're getting ready for those.

Speaker Change: I'll start with outlined Ken So we've been hiring through the year to offset attrition in Q. That's lever. We're using right now are to manage our workforce size instead of hiring relative to attrition and as we look forward.

Speaker Change: Youll see our hiring ramp up to match the volumes as we see them coming back we've got great line of sight on a number of the areas that kind of took you through them.

Speaker Change: And so we're getting ready for that.

Speaker Change: Our next question will come from Scott Group from Wolf Research. Please go ahead, your line is open.

Tracy Robinson: Thanks, Suzanne.

Speaker Change: Our next question will come from Scott Group from Wolfe Research. Please go ahead. Your line is open.

Tracy Robinson: Well said,

Operator: Operator. I will now go to questions. Thank you.

Scott H. Group: Hey, thanks. Good afternoon. So when you talk about price above inflation, I'm just wondering, do you see that spread widening or moderating this year? And then just near term, any way to quantify the weather impact we're seeing in Q1 and then any update you can give us on the labor front with the conductors in Canada? Thank you.

Operator: We will now begin the question and answer session.

Scott H. Group: Hey, Thanks, good afternoon. So.

Scott H. Group: When you talk about price above inflation I'm, just wondering do you see that spread widening or moderating. This year and then just near term any way to quantify the weather impact we're seeing in Q1, and then any update you can give us on on the labor front.

Chris Wetherbee: As previously mentioned, we ask that you kindly limit yourselves to one question. Our first question will come from Chris Wetherbee from Citi. Please go ahead. Your line is open. Hey, thanks.

Chris Wetherbee: Good afternoon. Maybe starting with the 24 guide, if we could maybe unpack some of the moving parts a little bit. So, RTM guide, mid-single digits, and then I think, Ghislaine, you talked about maybe $200 million of some cost headwinds there.

Shislaine: Moving to slide 16, let me provide some visibility to 2024. We believe the economy for the year will be more constructive than in 2023, with slightly positive industrial production growth and interest rates stabilizing. In addition, the consensus opinion on the risk of an economic recession appears to have diminished.

Speaker Change: With the conductors in Canada. Thank you.

Speaker Change: Thank you so much.

Speaker Change: Sounded like an awful lot of questions.

Speaker Change: But chad.

Speaker Change: I'm going to kick it quick run over them, if I can remember them and Debbie guys can come in behind me, but we want one question.

Speaker Change: <unk>.

Speaker Change: The first one was on price. So, I mean, I think it depends. Clearly, it's a little tighter pricing environment than we've seen in the past. But we have, for the guys I've given Doug, a pretty solid customer service product to sell. And so we are achieving pricing. We continue to achieve pricing that's above inflation. The margin above inflation is going to be different in different commodities and in different areas. But we see no reason to believe that that's not going to be.

Speaker Change: The first one was done on.

Speaker Change: Price. So I think it depends clearly it's not as it's a little tighter pricing environment that we've seen in the past.

Tracy Robinson: You have about 5% coming below the line, so I just want to make sure I understand sort of the operating leverage of the business. Is it mostly offset by the 200, or maybe we can kind of think about how you should be able to generate incremental margins on that mid-single digit RTM guide? Okay, Chris, this is Tracy. Let me take a shot at this. So, we've got a forecast of 10% EPS, and on volume, as you've noted, the forecast assumes a gentle kind of recovery economically as we go through the year, but it also assumes those customer-specific growth initiatives that you heard Doug talk about. On margin, as volumes come back, we should see the positive impact of our operating leverage.

Shislaine: However, the environment remains quite volatile with continued monetary policy and geopolitical risks. Weak sectors, particularly intermodal international and forest products, continue to improve sequentially and should stabilize to pre-pandemic levels. With this in mind, and along with our CM-specific growth initiatives, we expect volumes in terms of RTMs to be in the mid-single-digit range. As volumes come back, we should see the positive impact of our operating leverage, particularly in the merchandise business, where we currently have capacity on our trains and can bring in volumes at low incremental costs. However, we have roughly $200 million in cost headwinds, mostly related to depreciation, Incentive Compensation, and Ben Shapiro.

Speaker Change: While we have seen you guys have given dug in pretty solid.

Speaker Change: Customer service product to sell and so we are achieving.

Speaker Change: Pricing, we continue to achieve pricing above inflation the margin above inflation is going to be different in different commodities and different areas, but we see no reason to believe that that's not going to continue.

Speaker Change: Thank you for watching!

What was the next winter whether it's on the weather.

Speaker Change: It's on the weather.

Speaker Change: The winter weather, and I can take that one. So we had a very cold snap of minus 40 to minus 50 Celsius about a week. We did see some disruption during that period of time as we had difficulty moving throughout that period. But I will say this, to speak to the strength, the resiliency of our discipline scheduled operating plan, just as we saw as we recovered from the ILWU strike, the wildfires and the flooding last year in 2023, the way we run the network and we're always working back to the plan, that's our North Star. We were able to get our legs back under us, get the operation moving again, and we're regaining our momentum, getting our speed and our velocity back. Metrics are improving already.

Speaker Change: The winter weather and I can I can take that one so we had a very cold snap of minus 40 to minus 50 Celsius about a week, we did see some disruption during that period of time as we had difficulty moving throughout that period, but I will say this to speak to the strength the resiliency of our disciplined.

Tracy Robinson: So, as volumes went down, we saw it go down. As volumes come back up, we're going to lift them, especially in the merchandise business, where we currently have to pass on our trains and, of course, the pricing environment. You know, as you've watched us over the last 18 months, we continue to both deliver and expect pricing above rail inflation. So that's all positive news. We do have the headwinds that you just talked about, but that's going to be offset to the extent that we'll drive the 10% to the bottom. Does that make sense?

Speaker Change: <unk> operating plan just as we saw as we recovered from the IOW strike the wildfires and the flooding last year in 2023, the way we run the network and we're always working back to the plan, but that is our north star we were able to get to we were able to get on.

Shislaine: We assume foreign exchange for the year of around $0.75 and WTI of $70-80 USD per barrel. In this environment, we expect to deliver about 10% EPS growth in 2024 versus 2023. Our CapEx for 2024 will be around $3.5 billion net of customer contributions, and we expect ROIC to be 15 to 17% within the targeted range provided at our investor day. In terms of shareholder distributions, we are pleased to announce that our board of directors approved a 7% dividend increase for 2024. This represents the 28th consecutive year of dividend increases since the 1995 IPC.

Speaker Change: Our legs back under us get the operation moving again, and where we're regaining our momentum getting our speed and our velocity back metrics are improving already.

Speaker Change: Okay. Thanks, Thanks for that Scott David <unk>.

Speaker Change: Okay, thanks. Thanks for that Scott. David, or who's next?

Speaker Change: Our next question comes from David Vernon from Bernstein. Please go ahead. Your line is open.

Speaker Change: Our next question comes from David Vernon from Bernstein. Please go ahead. Your line is open. Hey, good afternoon. Thanks for taking the question. So, Doug, you know, the RTM, the mid-single-digit RTM expectations, can you give us some sense of visibility into some of the bigger chunks and when they should start coming in? Yeah, we're off to a little bit of a weaker start on the year. I'm just trying to get a sense for, as you think of that, the ramp that you've got much more detail on, if you could share with us any color on, you know, when we expect to see the inflection in the sequential volume.

David Vernon: Hey, good afternoon, thanks for taking the question.

Chris Wetherbee: It does, so just a way to think about it is that there still is the sort of normal operating leverage on revenue growth, mostly offset by those incremental costs, but that kind of gets you to, you know, kind of core growth before the buyback in line with RTM growth.

David Vernon: The RPM the mid single digit RPM expectations can you give us some sense of visibility into some of the bigger chunks and when they when they should start coming in and we're off to a little bit of a weaker start on the year and I'm just trying to get a sense for as you think about the ramp that you have got much more detail on if you could share with us any color on when we expect to.

Shislaine: The board also approved a new share buyback program of up to 32 million shares for an amount in the range of $4 billion through a normal course issuer bid from February 1, 2024 to January 31, 2025. In conclusion, let me reiterate a few points. We have delivered seven consecutive quarters of exceptional operating performance and are providing excellent customer service. We have managed through significant external challenges to deliver strong relative financial performance.

Tracy Robinson: Is that roughly the right way to think about it?

David Vernon: See the inflection in the sequential volumes.

Operator: Yeah, you got it pretty much covered. Thanks. Next?

Speaker Change: Thanks David so you know I guess like the slide 12 is a great indicator but you know we're expecting a gradual ramp up over the year and things like forest products which we expect to see a gradual recovery and it's not going to be anything it's not going to be a straight up arrow or anything so we know that's going to happen same with most of the products that are on there and a lot of those are going to tie right into the economy that gradual recovery that Tracy talked about that's what we're expecting so we're going to see that so you're going to see more come in the back half than the front half but you know we're working with the customers to do that as quickly as possible we talked about the two coal mines that are coming on and those are both in H2 as well but with it with international intermodal seeing that perk up as of last December which we just talked about so we're going to see that start to poke right away and we're expecting a gradual recovery in the domestic

Speaker Change: Thanks, David.

Cherilyn Radbourne: Okay, thank you. Our next question comes from Cherilyn Radbourne from TD Cowan. Please go ahead, your line is open.

Speaker Change: Like the slide 12 is a great indicator, but we're expecting a gradual ramp up over the year in things like forest products, which we expect to see a gradual recovery and it's not going to be anything it's not going to be a straight up arrow or anything. So we know that's going to happen same with most of the products that are on there and a lot of those are going to die right into.

Cherilyn Radbourne: Thanks very much.

Cherilyn Radbourne: Good afternoon. I just wanted to dig in a little bit in terms of international and intermodal transport.

Speaker Change: The economy at that gradual recover that Tracy talked about that's what we're expecting so we're going to see that so youre going to see more come in in the back half than the front half, but we're working with the customers to do that as quickly as possible. We talked about the two coal mines that are coming on and those are both in <unk> as well, but with international intermodal seeing that.

Shislaine: Although we remain mindful of ongoing economic and geopolitical volatility, we are calling for some recovery in 2024. In particular, we expect Intermodal International to return to pre-COVID levels and Forest Products to gradually ramp up over the next 18 months. Our pivot to growth is underway, and assuming a positive economic backdrop, we are guiding for EPS growth of around 10% versus 2023, underpinned by mid-single-digit volume growth. We have a strong balance sheet, and we plan on using that financial flexibility to take advantage of opportunities. Let me pass it back to Tracey.

Doug McDonald: And you did mention that the Canadian West Coast market share was back to pre-strike levels in December.

Cherilyn Radbourne: Just curious, given what we're seeing in the Red Sea and on the Panama Canal, whether you're seeing inquiries at this point that could be incremental to that market share and how likely those volumes might be to be sticky.

Speaker Change: As of last December, which we just talked about so we're going to see that start to poke right away and we're expecting a gradual recovery in the domestic market.

Doug McDonald: Thanks, Charlene.

Doug McDonald: It's Doug.

Doug McDonald: No, it's a great question. It's obviously an ever-changing environment out there.

Speaker Change: All right, thank you. And then the labor costs for accommodating the work rule changes, you know, is that has that been sort of season now? Are we kind of running it at the right level as far as kind of staffing and resourcing? Or are we still kind of figuring out how to make the schedules work with the new hours of service regulation?

Speaker Change: Alright. Thank you and then the labor costs for accommodating the work. We will changes is that has that been sort of season now or are we kind of running it at the right level as far as kind of staffing and resourcing or are we still kind of figuring out how to make the schedules work with.

Doug McDonald: So, we spend a lot of time talking with customers about it. We are seeing, obviously, some capacity come out of the vessel market with them having to go around Africa now. So, we see some tightening overall. And with that, we're starting to hear about the different problems of both the Panama and the Suez Canal that the West Coast is looking like a more viable option moving forward. We haven't seen those volumes come in yet, but we're expecting them to gradually ramp up if they do come forward. But so far, so good. We've actually just been able to maintain our pre-COVID levels now for the last, I'll say, almost eight weeks.

Speaker Change: The new hours of service regulations, sorry, David we're only taking one for persons.

Speaker Change: Sorry, David, we're only taking one per person.

Speaker Change: Thanks, guys.

Speaker Change: Thought I'd give it a shot at it thanks guys.

Speaker Change: Thank you.

Speaker Change: <unk>.

Speaker Change: Our next question comes from Fadi Chamoun from BMO. Please go ahead. Your line is open.

Tracey: Thanks, Josiah. Well said. The operator will now go to questions. Thank you. We will now begin the question and answer session. As previously mentioned, we ask that you kindly limit yourself to one question. Our first question will come from Chris Wetherbee from Citi. Please go ahead.

Speaker Change: Our next question comes from <unk> <unk> from BMO. Please go ahead. Your line is open.

Speaker Change: Yes. Thank you.

Fadi Chamoun: Yes, thank you.

Fadi Chamoun: Just one clarification first. The comment around volume back to 2019 level, is that for total RTM or are you talking about intermodal specifically as well?

Just one clarification first the comment that our own volume back to 2019 levels is that for total RPM or are you talking about intermodal specifically as well.

Fadi Chamoun: And then my main question is really,

Chris Wetherbee: Your line is open. Hey, thanks. Good afternoon.

Speaker Change: And then.

Speaker Change: My main question is really if you.

Fadi Chamoun: If you can extend kind of the outlook that you talked about, mid-single-digit RTM, like, if we take that into...

Chris Wetherbee: Maybe starting on the 24 guide, if we could maybe unpack some of the moving parts a little bit. So, RTM guide, mid-single digits. And then I think, Ghislaine, you talked about maybe $200 million of some cost headwinds there. You have about 5% coming below the line. So I just want to make sure I understand sort of the operating leverage of the business. Is it mostly offset by the 200?

Speaker Change: Can extend kind of the outlook that you talked about mid single digit RPM.

Doug McDonald: And we see that continuing on moving forward on both Prince Rupert and. That's my one. Thank you.

Speaker Change: We think that into.

Fadi Chamoun: Revenue, what are the moving parts like from a mixed perspective? I'm guessing pricing incremental to that five that gets you a high single digit, but what's your thoughts on mix and how should we think about all these moving pieces from a revenue perspective?

Speaker Change: Revenues what are the moving parts like from a mix perspective, I am guessing pricing incremental to the $5. It gets you a high single digit, but what's your thoughts on mix and how should we think about all the moving pieces from a revenue perspective.

Ken Hoexter: Our next question comes from Ken Hoexter from Bank of America. Please go ahead. Your line is open. Great. Hey, good afternoon.

Speaker Change: Well those are long two questions but.

Speaker Change: Well, that was a long two questions, but so really the second one is the critical one. So we don't forecast on the revenues, Fadi, but on the mid-single digits, we expect that to carry out in our usual fashion. We expect the average car dollars per car to apply. And I think you guys can do the math from there. But yeah, we're pretty happy with the forecast.

Tracy Robinson: Trace, you were just saying, I guess in the EPS target of 10%, you're looking at long-term going up to 10% to 15%.

Speaker Change: So really the second one is the critical one so we don't forecast on the revenues fatty but on the mid single digits, we expect that to carry out in our usual fashion, we expect the average dollars.

Chris Wetherbee: Or maybe we can kind of think about how you should be able to generate incremental margins on that mid-single digit RTM. Okay, Chris, this is Tracy. Let me take a shot at this. So, you know, we've got a forecast of 10% EPS and then volume, as you've noted, the forecast assumes, you know, a gentle kind of recovery economically as we go through the year, but it also assumes those customer-specific growth initiatives that you heard Doug talk about. On margin, as volumes come back, we should see the positive impact of our operating leverage. So, as volumes went down, we, you know, we saw it go down.

Ken Hoexter: I just want to understand the acceleration.

Speaker Change: Dollars per car to apply and I think you guys can do the math from there.

Tracy Robinson: You talked about hiring, or I guess pre-hiring, employees.

Ken Hoexter: Are you saying you're pre-resourced now because of the work rule changes, or are you going to accelerate the hiring? I just want to understand the cost implications versus your growth targets. Thanks.

Speaker Change: But we were.

Speaker Change: We're pretty happy with the forecast.

Speaker Change: Yeah.

Speaker Change: Thank you and with respect to the call.

Speaker Change: And with respect to the comment around 2019 level or pre-COVID level, is that an intermodal forecast for volume to be back to 2019 or is that a total up? Yeah.

Speaker Change: Comment that on 2019 level or pre COVID-19 levels is that intermodal.

Speaker Change: Forecasts for volume could be back between in.

Tracy Robinson: I'll start with that one, Ken. So we've been hiring through the year to offset attrition. And that's the lever we're using right now to manage our workforce size is hiring relative to attrition. And as we look forward, you'll see our hiring ramp up to match the volumes as we see them coming back. We've got a great line of sight on a number of areas.

Speaker Change: Total RPM.

Speaker Change: Yeah, I think that was your one question and you can go to the investor relations team after the call for the other.

Speaker Change: Yeah, I think that was your one question and you can go to the Investor Relations team after the call or the other.

Speaker Change: Thanks.

Speaker Change: Our next question comes from Ravi Shanker from Morgan Stanley. Please go ahead. Your line is open.

Speaker Change: Our next question comes from Ravi Shanker from Morgan Stanley. Please go ahead. Your line is open.

Ravi Shanker: Thanks, everyone. Tracy or Doug, can you give us an update on the Falcon service, please? What's the operational rollout been like over the first few months? What's it been like selling the product to customers, et cetera?

Ravi Shanker: Hello, everyone.

Ravi Shanker: Doug can you give us an update on the Falcon service. Please.

Doug Macdonald: The operational rollout been like after the first few months.

Tracy: As volumes come back up, we're going to lift, especially in the merchandise business, where we currently have to pass on our train, and of course, the pricing environment. You know, as you've watched this over the last 18 months, we continue to both deliver, and we continue to expect pricing above rail inflation. So that's all positive news. We do have the headwinds that Jevon talked about, but, you know, that's going to be offset to the extent that we'll drive the 10% to the bottom of the list. Does that make sense? Yes, it does.

Doug Macdonald: What's it been like selling the product the customer et cetera.

Speaker Change: Okay, well, that's a good question. We'll have Derek start off on the operational side. Yeah, hey, good afternoon. No, it's been a very exciting product we've had with our partners at the FXC and the Union Pacific. It is acting as one seamless service. You know, we're consistently delivering on the public transit time with our customers, and we look forward to continuing to grow that here in 2024. So, solid momentum in 2023, and I see that partnership between the three of us only continuing to grow in 2024. Yeah, and on the revenues, listen, we told everyone it's going to be very slow growth off the truck market, and that's what it is, but that's okay, right? We're expecting it. We're both, the UP and FXC and us are working hand-in-hand to grow that. The big bid cycle is really only starting up in Q1, where we'll be going after truck business that's out there, and we hope to see some solid growth moving into the rest of the year.

Doug Macdonald: Okay, well that's a good question will hub Derek start off on the operational side, Yes, Hey, good afternoon, no. It's been a very exciting product we have with our partners at the <unk> and the Union Pacific is acting as one seamless service, we're consistently delivering on the public transit time with our customers and we look forward to continuing to grow that here in 2024.

Doug McDonald: Doug kind of took you through them.

Tracy Robinson: And so we're getting ready for those.

Scott H. Group: Our next question will come from Scott Group from Wolf Research.

Scott H. Group: Please go ahead; your line is open.

Scott H. Group: Hey, thanks.

Scott H. Group: Good afternoon,

Tracy Robinson: So when you talk about price above inflation, I'm just wondering, do you see that spread widening or moderating this year?

Derek Taylor: Solid momentum in 2023, and I see the partnership between the three of US only continuing to grow in 'twenty four.

Scott H. Group: And then, just near term, any way to quantify the weather impact we're seeing in Q1 and then any update you can give us on the labor front with the conductors in Canada? Thank you. Thank you so much.

Derek Taylor: On the revenues listen we've told everyone is going to be very slow growth off the truck market and that's what it is.

Tracy: So just the way to think about it is that there still is the sort of normal operating leverage on revenue growth, mostly offset by those incremental costs, but that kind of gets you to, you know, kind of core growth before the buyback in line with RTM growth. Is that roughly the right way to think about it? Yeah, you got it pretty much.

Derek Taylor: But that's okay right, we're expecting at where both the <unk> and efficacy and US are working hand in hand to grow that the big bid cycle is really only starting up in Q1, we will be going after truck business. That's out there and we hope to see some solid growth moving into the rest of the year.

Tracy Robinson: The first one was on price. So, I mean, I think it depends. Clearly, it's a little tighter pricing environment than we've seen in the past, but we have, for the guys I've given Doug, a pretty solid customer service product to sell. And so we are achieving prices. We continue to achieve prices that are above inflation. The margin above inflation is going to be different for different commodities and in different areas, but we see no reason to believe that it's not going to be.

Speaker Change: Thanks for your question.

Speaker Change: Thanks for your questions. Thank.

Speaker Change: Thank you.

Speaker Change: Thank you.

Speaker Change: Our next question comes from Walter Spracklin from RBC Capital Markets. Please go ahead your line is open.

Speaker Change: Our next question comes from Walter <unk> from RBC Capital markets. Please go ahead. Your line is open.

Speaker Change: Thanks. Next. Okay.

Speaker Change: Thank you. Our next question comes from Cherilyn Radbourne from TD Cowan. Please go ahead, your line is open. Thanks very much, good afternoon.

Walter Spracklin: Yeah, thanks very much. Good afternoon, everyone. So I wanted to zero in here on the first quarter, and I know you don't typically give quarterly guidance, but I think it's important given last year was such a tough compare, and now you've come off to a tough start here due to the weather. Is it possible, do you think, when we frame the 10% over a quarterly basis, is it possible that you can see any growth in the first quarter given how tough the compare is and the weather to start, and therefore is most of it all kind of back-end loaded for the 10%?

It's very much good afternoon, everyone. So I wanted to zero in here on on the first quarter and I know you're not you don't typically give quarterly guidance, but I think it's important given last year was such a tough compare and you've come up too.

Cherilyn Radbourne: Just wanted to dig in a little bit in terms of international and intermodal, and you did mention that the Canadian West Coast market share was back to pre-strike levels in December. Just curious, given what we're seeing in the Red Sea and on the Panama Canal, whether you're seeing an increase at this point that could be incremental to that market share and how likely those volumes might be to be sticky. Thanks Cheryl, and it's Doug. No, it's a great question.

Unnamed Speaker: Thank you for watching!

Doug McDonald: It's the weather. The winter weather, and I can take that one. So we had a very cold snap of minus 40 to minus 50 Celsius for about a week. We did see some disruption during that period of time as we had difficulty moving throughout that period.

Speaker Change: Ill start here due to the weather.

Speaker Change: Alright.

Speaker Change: Is it possible do you think when we frame the 10% over a quarterly basis.

Speaker Change: Is it possible that you can see any growth in the first quarter given given how tough the compare is in.

Speaker Change: And the weather to start and therefore is most of it all kind of backend loaded with the 10%.

Doug McDonald: But I will say this, to speak to the strength and resiliency of our disciplined scheduled operating plan, just as we saw as we recovered from the ILWU strike, the wildfires, and the flooding last year in 2023. The way we run the network, and we're always working back to the plan, that's our North Star. We were able to get our legs back under us, get the operation moving again, and we're regaining our momentum, getting our speed and our velocity back. Metrics are already improving.

Thanks alternate maybe I'll just start I'll hand, it over to you Glenn but I'll start by saying it is going to be a tough compare we had a big quarter last year and some.

Speaker Change: Thanks, Walter. Maybe I'll just start. I'll hand it over to Ghislaine, but I'll start by saying it is going to be a tough compare. We had a big quarter last year and some very different weather than the way we started off this year. But Ghislaine, did you want to make any comments on that? No, I think that's right. I think we told the market on many conferences that Q1 was going to be a very tough comp. If you remember last year, our EPS was up 38% and our OR was 61%, which is not kind of winter-like type of OR. So we know that. We've baked that in into our forecast and into our 10%. We've accounted for regular winter. We did start, and as Pat said, we had seven days of deep freeze in the west. Hopefully, that's behind us. It's behind us for now. And hopefully, as we get into February, then we don't get that sustained cold. But yeah, I mean, we know that the Q1 was going to be a tough comp, but that's all factored in into our 10% EPS growth for the year. Thanks, Walter, for the question. Thank you. Thanks.

Glenn: I think different weather than the way we started off this year, but just did you wont make any comments on that.

Doug: It's obviously an ever-changing environment out there, so we spent a lot of time talking with customers about it. We are seeing obviously some capacity come out of the vessel market with them having to go around Africa now. So we see some tightening overall. And with that, we're starting to hear about the different problems with both the Panama and the Suez Canal that the West Coast is looking like a more viable option moving forward. We haven't seen those volumes come in yet, but we're expecting them to gradually ramp up if they do come forward. But so far, so good. We've actually just been able to maintain our pre-COVID levels now for the last, I'll say, almost eight weeks.

Speaker Change: That's right I think we told the market.

Speaker Change: On many conferences that.

Speaker Change: Q1 was going to be a very tough comp. If you remember last year, our EPS was up 38% and ror was 61, which is not kind of winter like <unk>. So we know that we've baked that in into our forecasts and into our 10% we have accounted for a regular winter.

Speaker Change: We did start in that as Pat said, we had seven days of deep freeze in the west hopefully.

Speaker Change: That's behind us its behind us for now and hopefully as we get into February then we don't get that sustained coal, but yes. I mean, we know that Q1 was going to be a tough comp, but thats all factored in into our 10% EPS growth for the year. Thanks Walter for the question. Thank you.

Scott H. Group: Okay, thanks.

Scott H. Group: Thanks for that, Scott.

Unnamed Speaker: David, or who's next? Our next question comes from David Vernon from Bernstein.

David Vernon: Please go ahead. Your line is open.

Speaker Change: Our next question comes from <unk> Gupta from Scotiabank. Please go ahead. Your line is open.

Speaker Change: Our next question comes from Konark Gupta from Scotiabank. Please go ahead, your line is open.

David Vernon: Hey, good afternoon. Thanks for taking the time to ask the question.

Doug McDonald: So, Doug, you know, the RTM, the mid-single-digit RTM expectations. Can you give us some sense of visibility into some of the bigger chunks and when they should start coming in?

Konark Gupta: Good evening everyone and best wishes to Doug and Remy for their respective roles. Question for Pat, you said destination performance is improving, but what's your realistic target there, Pat, and what's required from your interchange partners to get to that level?

Gupta: Good evening everyone.

Ravi Shankar: Best wishes to Doug in Miami for the respective roles questions for Pat.

Doug: And we see that continuing on moving forward on both Prince Rupert and. That's my question. Thank you. Our next question comes from Ken Hoexter from Bank of America. Please go ahead, your line is open. Great. Hey, good afternoon.

You said destination performance.

Ravi Shankar: It's improving.

Ravi Shankar: But what's your realistic target their past and what's required from your interchange partners to get to that level.

David Vernon: Yeah, we're off to a little bit of a weaker start this year. I'm just trying to get a sense for, as you think of that, the ramp that you've got much more detail on, if you could share with us any color on when we expect to see the inflection in the sequential volume.

Pat Whitehead: Thank you for the question, and we desire to continue to squeeze that delta between launch and land. We look to get another few percentage points out of that, squeeze that gap between how we launch trains and how we arrive them into terminals. We originate, terminate the majority of our traffic on our own lines, so we're not as dependent on the other carriers for that metric, and that's where I talked a bit about reducing train meet delays online, which is a product of getting trains out on time, train schedules make the train meets, and making timely crew swaps. So that's really our focus, to continue to squeeze that delta between launch and land. Thank you very much for the question. Thank you.

Speaker Change: The corner. Thank you for the question and we did.

Speaker Change: <unk> desire to continue to squeeze that delta between launch and land, we look to get another two percentage points out of that squeeze that gap between how we launch trained in how we arrived them into terminals, we originate terminated.

Ken Hoexter: Tracy, you're displaying, I guess, in the EPS target of 10%, you're looking at long term going up to 10 to 15. Just want to understand the acceleration. You talked about hiring, I guess, pre-hiring employees. Are you saying you're pre-resourced now because of the work rule changes, or are you going to accelerate the hiring? I just want to understand the cost implications versus your growth targets. Thanks. I'll start with that one, Ken.

Doug McDonald: Thanks David so you know I guess like the slide 12 is a great indicator but you know we're expecting a gradual ramp up over the year and things like forest products which we expect to see a gradual recovery and it's not going to be anything it's not going to be a straight up arrow or anything so we know that's going to happen same with most of the products that are on there and a lot of those are going to tie right into the economy that gradual recovery that Tracy talked about that's what we're expecting so we're going to see that so you're going to see more come in the back half than the front half but you know we're working with the customers to do that as quickly as possible we talked about the two coal mines that are coming on and those are both in H2 as well but with it with international intermodal seeing that perk up as of last December which we just talked about so we're going to see that start to poke right away and we're expecting a gradual recovery in the domestic, All right, thank you.

Speaker Change: The majority of our traffic on our own line. So we're not as dependent on the.

Speaker Change: The other carriers for that metric and Thats, where I talked a bit about reducing train meet delays online, which is a product of getting trains out on time train schedules make the train meets and making timely crew swaps. So that's really our focus to continue to squeeze that delta between launch and land. Thank you very much for the questions. Thank you.

Speaker Change: Our next question comes from Brandon <unk> from Barclays. Please go ahead. Your line is open.

Speaker Change: Our next question comes from Brandon Oglenski from Barclays. Please go ahead, your line is open.

Ken Hoexter: So we've been hiring through the year to offset attrition. And that's the lever we're using right now to manage our workforce size is hiring relative to attrition. And as we look forward, you'll see our hiring ramp up to match the volumes as we see them coming back. We've got a great line of sight on a number of the areas, Doug kind of took you through them, and so we're getting ready for those. Our next question will come from Scott Group from Wolfe Research. Please go ahead; your line is open. Hey, thanks. Good afternoon.

Brandon Oglenski: Hey, good afternoon, everyone. And thanks for taking my one question. Just Lane, I was hoping you could update us here on, you know, the change in the dividend. And obviously, if you were to go to that full, you know, repurchase this year, that'd be quite a bit of, you know, cash flow out the door. So where are you seeing leverage in the near term, and especially in the context of, you know, that 10 to 15% plan over the next three years? Would you be willing to take it up higher right now?

Brandon: Hey, good afternoon, everyone and thanks for taking my one question Helane.

Speaker Change: I was hoping you could update us here on the change in the dividend and obviously if you were to go to that Paul.

Speaker Change: Repurchase this year that would be quite a bit of.

Speaker Change: Cash flow out the door, so where are you seeing leverage in the near term and especially in the context of that 10% to 15% plan over the next three years would you be willing to take it up higher right now.

Lane: Yeah, so as we said, we're looking at the targeted leverage over time of 2.5. I mean, if you look at this year, we finished at 2.25.

Speaker Change: Yes, so as we said.

We're looking at the targeted leverage over time of two five I mean, if you look at this year, we finished at 225.

Lane: We typically, you know, grow our dividends in line with earnings growth. You'll see that we're slightly below because we do that over time. And if you remember in 2023, our dividends were up 8% and our earnings are down 2%. So we have a long-term view. We have a long-term view on these two things. I think that as we said in Investor Day, our leverage will be 2.5% over time if economic conditions warrant. So that's why we went back and toned back a little bit of our share buyback to $4 billion. Last year, we wanted to be opportunistic due to the stock price and where it was. And again, I think on terms of dividend, I'm very proud to say that it's the 28th year that we've increased our dividend and that's very good. So that's what we're thinking and we're thinking long-term and without any jerky reactions.

Speaker Change: We typically grow our dividends in line with earnings growth Youll see that were slightly below because we do that over time and if you remember in 2023, our dividends were up 8% and our earnings are down too. So we have a long term view, we have a long term.

David Vernon: And then the labor costs for accommodating the work rule changes, you know, have that been sort of season now? Are we kind of running it at the right level as far as kind of staffing and resourcing goes? Or are we still kind of figuring out how to make the schedules work with the new hours of service regulation?

Scott H. Group: So when you talk about price above inflation, I'm just wondering, do you see that spread widening or moderating this year? And then, just near term, any way to quantify the weather impact we're seeing in Q1 and then any update you can give us on the labor front with the conductors in Canada. Thank you. It sounded like an awful lot of questions, but you know, I'm going to take a quick run over them if I can remember them, and you guys can come in behind me, but we want one question. The first one was on price. So I mean, I think it depends.

View on these two things I think that as we said in Investor day, our leverage will be 2.5 over overtime, if economic conditions warrant. So why we that's why we went back and toned back a little bit of our share buyback two 4 billion last year, we wanted to be opportunistic due to the stock price and where it was.

Unnamed Speaker: Sorry, David, we're only taking one per person.

Unnamed Speaker: Thanks, guys.

Fadi Chamoun: Thank you. Our next question comes from Fadi Chamoun from BMO. Please go ahead. Your line is open. Yes, thank you. First, the comment around volume back to the 2019 level, is that for total RTM or are you talking about intermodal specifically as well?

Speaker Change: And again I think in terms of dividend I am very proud to say that thats, the 28th year that we've increased our dividend and.

Speaker Change: And Thats very good so that's what we're thinking and we're thinking long term and without any jerky reaction.

Tracy Robinson: And then my main question is really, if you can extend kind of the outlook that you talked about, mid-single-digit RTM, like, if we take that into...

Speaker Change: Thanks for the question, Brendan.

Scott H. Group: Clearly, it's a little tighter pricing environment than we've seen in the past, but we have, so the guys have given Doug a pretty solid customer service product to sell. And so we are achieving prices, and we continue to achieve prices that are above inflation. But the margin above inflation is gonna be different for different commodities and in different areas. But we see no reason to believe that that's not going to happen. It's the weather, the winter weather, and I can take that one.

Speaker Change: So the question Linda.

Speaker Change: Yes.

Our next question comes from Tom Waterworks from UBS. Please go ahead. Your line is open.

Speaker Change: Our next question comes from Tom Wadowitz from UBS. Please go ahead, your line is open.

Fadi Chamoun: Revenue, what are the moving parts like from a mixed perspective?

Thomas Wadewitz: Yeah, good afternoon. Wanted to ask you a little bit about trained lengths and how you view that opportunity. I think where you're running now is, you know, a little bit below where you've achieved in the past. And so would you expect to see that expand? I don't know if you can get to, you know, 8,200, 8,300 feet, something like that. And is that, you know, if you realize that, is that a potential driver of upside on what the margin might be relative to your guidance?

Thomas Wadewitz: Yes. Good afternoon wanted to ask you a little bit about train lengths and how you view that opportunity I think where youre running now.

Tracy Robinson: I'm guessing pricing incremental to that five that gets you a high single digit, but what are your thoughts on mix and how should we think about all these moving pieces from a revenue perspective? Well, that was a long two questions, but really, the second one is the critical one. So we don't forecast revenues, Fadi, but on the mid-single digits, we expect that to carry out in our usual fashion. We expect the average car dollars per car to apply. And I think you guys can do the math from there. But yeah, we're pretty happy with the forecast.

A little bit below where you've achieved in the past.

Thomas Wadewitz: And so would you expect to see that expand I don't know if you can get to 80 to 180 to 300 feet something like that.

Thomas Wadewitz: And is that if you realize that is that a potential driver of upside on on what the margin might be relative to your guidance.

Scott H. Group: So we had a very cold snap of minus 40 to minus 50 Celsius for about a week. We did see some disruption during that period of time as we had difficulty moving throughout that period. But I will say this to speak to the strength and the resiliency of our disciplined scheduled operating plan, just as we saw as we recovered from the ILWU strike, the wildfires, and the flooding last year in 2023. The way we run the network, and we're always working back to the plan. But that's our North Star.

Fadi Chamoun: And with respect to the comment around the 2019 level or the pre-COVID level, is that an intermodal forecast for volume to be back to 2019, or is that a total increase?

Speaker Change: Hey, Tom it's there or good afternoon, I think when you look at it.

Thomas Wadewitz: Hey, Tom, it's Derek. Good afternoon. I think when you look at it, you know, right now we can grow at a lower incremental cost with our manifest business because we can add the traffic on existing trains. You know, part of the schedule operation is remaining balanced and turning and sweating the assets.

Speaker Change: Right now we can grow at a lower incremental cost with our manifest business because we can add the traffic on existing trades part of the schedule operation is remaining balanced and turn it into sweating. The assets now when you look at it from an intermodal point of view that as something Thats been down that's coming back that will actually help our train length out as that grows throughout the year.

Tracy Robinson: Yeah. Yeah. I think that was your only question, and you can go to the investor relations team after the call for the other.

Thomas Wadewitz: Now, when you look at it from an intermodal point of view, that is something that's been down, that's coming back. That will actually help our train length out as that grows throughout the year. So, overall, you know, we're well positioned to grow at a low incremental cost, and that's the key as we look at it going forward.

Ravi Shanker: Our next question comes from Ravi Shanker from Morgan Stanley. Please go ahead. Your line is open. Thanks, everyone.

Speaker Change: So we're overall, we're well positioned to grow at a low incremental cost.

Speaker Change: We were able to get our legs back under us, get the operation moving again, and we're regaining our momentum, getting our speed and our velocity back. Metrics are improving already. Okay, thanks to that Scott. David, who's next?

Tracy Robinson: Tracy or Doug, can you give us an update on the Falcon service, please?

Derek Taylor: What's the operational rollout been like over the first few months? What's it been like selling the product to customers, et cetera?

Speaker Change: The key is we look at it going forward.

Speaker Change: Thanks for the question.

Speaker Change: Thanks for the question.

Speaker Change: Our next question comes from Amit Mehrotra from Deutsche Bank. Please go ahead. Your line is open.

Speaker Change: Our next question comes from Amit Mehrotra from Deutsche Bank. Please go ahead. Your line is open.

Doug McDonald: Okay, well, that's a good question.

Derek Taylor: We'll have Derek start off on the operational side. Yeah, hey, good afternoon. No, it's been a very exciting product we have developed with our partners at the FXC and Union Pacific. It is acting as one seamless service.

Amit Mehrotra: Thanks. Hi, everyone. I guess my one question would just be on yield. Obviously, there's a pricing component of yield, there's a mixed component, there's a fuel component. I think fuel was a pretty nice benefit, at least on a lag basis in the fourth quarter. And just, Lane, can you just talk about, like,

Speaker Change: Our next question comes from David Vernon from Bernstein. Please go ahead, your line is open. Hey, good afternoon.

Amit Mehrotra: Thanks, Hi, everyone.

Amit Mehrotra: My one question would just be on yield.

We see there's a pricing component of yield there's a mix component.

David Vernon: Thanks for taking the question. So, Doug, you know, the RTM, the mid-single-digit RTM expectations. Can you give us some sense of visibility into some of the bigger chunks and when they should start coming in? We're off to a little bit of a weaker start this year, and I'm just trying to get a sense for, as you think of that, the ramp that you've got much more detail on, if you could share with us any color on when we expect to see the inflection in the sequential volume. Thanks, David. So, you know, I guess slide 12 is a great indicator, but, you know, we're expecting a gradual ramp-up over the year, and things like forest products, which we expect to see a gradual recovery, and it's not going to be anything. It's not going to be a straight up arrow or anything.

Doug McDonald: You know, we're consistently delivering on public transit time with our customers, and we look forward to continuing to grow that here in 2024.

Amit Mehrotra: Fuel component I think fuel was a pretty nice benefit at least on a lag basis in the fourth quarter and.

Speaker Change: Can you just talk about like.

Speaker Change: This does you'll take a step down when you adjust for that fuel.

Amit Mehrotra: Does yield take a step down when you adjust for that fuel and when do we actually see like the pricing benefit in the yield number obviously mixed adjusted or not adjusted for mixed because the concern I guess I have at least is that yield comes down in the first quarter as these fuel surcharges lag and I'm just trying to understand what the outlook or cadence of that yield improvement is as you progress with the year.

Derek Taylor: So, solid momentum in 2023, and I see that partnership between the three of us only continuing to grow in 2024.

Speaker Change: And when do we as we see like the pricing benefit in the yield number obviously mixes Justin we're not adjusted for mix.

Doug McDonald: Yeah, and on revenues, listen, we told everyone it's going to be very slow growth in the truck market, and that's what it is, but that's okay, right? We're expecting it. We're both, the UP and FXC and us are working hand-in-hand to grow that. The big bid cycle is really only starting up in Q1, where we'll be going after truck business that's out there, and we hope to see some solid growth moving into the rest of the year. Thanks for your question.

Speaker Change: The concern I guess I have at least as the yield comes down in the first quarter as these fuel surcharges wagon and I'm just trying to understand what the outlook of cadence of that yield improvement is as you progressed through the year.

Speaker Change: So I can open up and then I can let Doug talk more a little bit about yield, but on fuel, Amit, I think when you look at the lag in the fourth quarter, it was around four or five cents favorable in the quarter and on a year-over-year basis it was as well. So it wasn't a big deal, and I can turn it over to you, Doug, for the mix.

Speaker Change: So I can I can open up and then I can let Doug talk more a little bit about yield but on fuel amid.

When you look at the lag in the fourth quarter it was around $4 <unk> favorable.

Unnamed Speaker: Thank you.

Walter Spracklin: Our next question comes from Walter Spracklin from RBC Capital Markets. Please go ahead, your line is open. Yeah, thanks very much. Good afternoon, everyone. So I wanted to zero in on the first quarter, and I know you don't typically give quarterly guidance, but I think it's important given last year was such a tough comparison, and now you've come off to a tough start here due to the weather.

Speaker Change: In the quarter and on a year over year basis, it was as well.

Doug: So, we know that's going to happen. Same with most of the products that are on there, and a lot of those are going to tie right into the economy. That gradual recovery that Tracy talked about is what we're expecting. So, we're going to see that, so you're going to see more come in the back half than the front half, but, you know, we're working with the customers to do that as quickly as possible. We talked about the two coal mines that are coming on, and those are both in H2 as well, but with it, with the international intermodal, we're seeing that perk up as of last December, which we just talked about. So, we're going to see that start to pick up right away, and we're expecting a gradual recovery in the domestic market. All right, thank you.

Speaker Change: So it wasn't a big deal.

Speaker Change: And I can turn it over to you Doug for the mix piece.

Doug McDonald: Yeah, our traffic's relatively stable, but there's always going to be a mixed component. So depending upon which product line you're talking about, it's going to have a very different impact. I mean, I'm not going to get on all of them on the call here, Amit, but we can always sit down and go and do it after. So the other thing that I want to just highlight is we should not see any impact on the container storage fees moving forward into Q1 and beyond. That'll have a big impact.

Doug Macdonald: Yes, our traffic's relatively stable, but there's always going to be a Mexican ponant, so depending upon which product line you are talking about it it's going to have a very different impact I mean, I'm not going to get on all of them want to call here, Amit So, but it's we can always sit down with the trade. It would go and do it after so all of the other thing that I'll just highlight as we do.

Tracy Robinson: Is it possible, do you think, when we frame the 10% over a quarterly basis, is it possible that you can see any growth in the first quarter given how tough the comparison is and the weather to start, and therefore is most of it all kind of back-end loaded for the 10%?

Doug Macdonald: We should not see any impact on the container storage fees moving forward into Q1 and beyond that will have a big impact.

Speaker Change: Thanks for the question.

Thanks for the question.

Our next question comes from Brian Austin back from Jpmorgan. Please go ahead. Your line is open.

Speaker Change: Our next question comes from Brian Ossenbeck from JP Morgan. Please go ahead. Your line is open.

Thanks, Walter.

Walter Spracklin: Maybe I'll just start.

Speaker Change: And then the labor costs for accommodating the work rule changes, you know, have that been sort of seasoned now? Are we kind of running it at the right level as far as staffing and resourcing go? Or are we still kind of figuring out how to make the schedules work with the new hours of service regulation? Sorry, David, we're only taking one per person. I thought I'd give it a shot.

Brian Ossenbeck: Hey, thanks for taking the question. Doug, just wanted to ask if you can give us an update on the CN-specific projects which you quantified at the Investor Day. It sounds like maybe some of them are moving a little bit forward faster than you thought, but how does that shape look like in 2024? Is it back half-weighted like some of the broader economy stuff that you've been highlighting? And I think in the past you've also given...

I'll hand it over to Ghislaine, but I'll start by saying it is going to be a tough comparison.

Brian Austin: Hey, Thanks for taking the question.

Brian Austin: Just wanted to ask if you can give us.

Brian Austin: Update on the CN specific projects would you quantify that in Investor day. It sounds like maybe some of them are moving a little bit faster than you thought, but how does that shape look like in 2024 is it back half weighted like some of the broader economy stuff that you've been highlighting and I think in the past you also given.

Walter Spracklin: We had a big quarter last year and some very different weather than the way we started off this year.

But, Ghislaine, did you want to make any comments on that?

Walter Spracklin: No, I think that's right.

Speaker Change: Thanks, guys. Thank you. Our next question comes from Fadi Chamoun from BMO. Please go ahead, your line is open.

I think we told the market at many conferences that Q1 was going to be a very tough comp.

Brian Ossenbeck: some visibility to how much of that is sort of contracted or

Brian Austin: Some visibility as to how much of that is sort of contracted or.

Brian Austin: Spoken for in terms of those carloads so.

Speaker Change: Thank you.

Fadi Chamoun: Yes, thank you. Just one clarification first, the comment around volume back to the 2019 level, is that for total RTM or are you talking about intermodal specifically as well? And then my main question is really.

Walter Spracklin: If you remember last year, our EPS was up 38%, and our OR was 61%, which is not the kind of winter-like type of OR.

Date, there would be helpful. Thanks.

Speaker Change: Thanks Brian, I actually have the presentation in front of me just because I know I get this question too often, right, so when you're talking about some of the bulk commodities, you know, a lot of that's going to be in the new canola crush and as well as the new mines coming online, so an example is like obviously BHP, we're expecting to see some volumes there, but that won't be until 2026, and the canola crush plants look like they've been pushed back a little, so it'll be more back-end weighted towards 2026. When you look at the renewables, right, we're starting to see some of that with respect to the crush plants as well, but we're starting to see some of the renewable projects come on and some of the ethanol, but once again, that'll be a little bit more back-ended, except we should see some ethanol synergies this year. The big one that we've managed to move forward with obviously is the announcement we did with AltaGas on the export of LPG, so I'll be honest, we've actually hit our target already with respect, but it'll be going forward, but on a going forward basis. We've hit the 40,000 carloads that we had at the bottom end of the forecast just with that one contract, so that's a huge, huge win for us.

Speaker Change: Thanks, Bryan I actually have the presentation in front of you I don't want to get this question too often right. So when you are talking about some of the bulk commodities a lot of that's going to be in the new canola crush and as well as the new mines coming online. So an example is like obviously BHP, we're expecting to see some volumes there, but that won't be till 2002.

So we know that

Walter Spracklin: We've baked that into our forecast and into our 10%.

Fadi Chamoun: If you can extend kind of the outlook that you talked about, mid-single-digit RTM, like, if we take that into... Ravineaux, what are the moving parts from a mixed perspective? I'm guessing pricing incremental to that five gets you high single-digit, but what are your thoughts on mixed? And how should we think about all these moving pieces from a revenue perspective? Well, that was a long two questions, but really, the second one is the critical one.

We've accounted for a regular winter.

Walter Spracklin: We did start, and as Pat said, we had seven days of deep freeze in the west.

Speaker Change: Six and the canola crush plants look like they've been pushed back a little bit more backend weighted towards 2026. When you look at the renewables right. We're starting to see some of that with respect to the crush plants as well, but we're starting to see some of the renewable projects come on and some of the ethanol, but once again that will be a little bit more back ended except when we should see some.

Hopefully, that's behind us now.

Walter Spracklin: It's behind us for now.

And hopefully, as we get into February, we won't get that sustained cold.

Walter Spracklin: But yeah, I mean, we know that Q1 was going to be a tough comp, but that's all factored in into our 10% EPS growth for the year.

Ravineaux: So we don't forecast revenues, Fadi, but on the mid single digits, we expect that to carry out in our usual fashion. We expect the average car dollars per car to apply. And I think you guys can do the math from there. But yeah, we were pretty happy with the forecast. And with respect to the comment around the 2019 level or the pre-COVID level, is that an intermodal forecast for volume to be back to 2019 or is that a total? Yeah, I think that was your only question.

Speaker Change: Ethanol search synergies this year the big one that we've managed to move forward with obviously is the announcement, we did with Alta gas on the export of LPG. So I'll be honest, we've actually hit our target already with respect, but it'll be going forward, but on a going forward basis. We've hit the 40000 carloads that we had at the bottom end of the forecast.

Thanks, Walter, for the question.

Walter Spracklin: Thank you.

Thanks.

Walter Spracklin: Our next question comes from Konark Gupta from Scotiabank.

Please go ahead; your line is open.

Walter Spracklin: Good evening, everyone, and best wishes to Doug and Remy for their respective roles.

Speaker Change: With that one contract.

Question for Pat: you said destination performance is improving, but what's your realistic target there, Pat, and what's required from your interchange partners to get to that level?

Speaker Change: It's a huge huge win for us now.

Speaker Change: Now, the Toronto Fuel Facility, that's also almost done, well, it's actually done construction in Phase 1, but we actually delayed startup because we sold out Phase 2 now, and we're actually integrating the Phase 2 construction before it starts up. So, that'll be starting up in Q1, but that's phenomenal that we've actually got it sold. So, we're actually at the high end of that one by the end of this year. So, that's fantastic again. And then you've got some of the EV supply chains. Now, that's one that's actually, we're a little uncertain now. We did move about 800 carloads of product for the lithium mines from northern Quebec for export. So, that is moving forward, but with the EV pushback a little bit with some of the announcements, we're expecting some of that to get pushed back. But we still see all the battery plants progressing on our line. They're still moving forward with Norfolk and some of the others, and some are still under NDA that we can't talk about. And then the last big one is the northern BC projects that we put forward. And that, we did put a siding in there. Last year, we're starting to see the growth on the frac stand moving up there, as well as some of the propane coming down. So, that one is moving forward as well on target. And I'll say the very last one was our expansion within the intermodal. So, listen, we're starting to see some progress there with the volume starting to come back. We're working with our customers diligently, both on all of our ports in Halifax, in Montreal, even St. John. We restarted service there in Prince Rupert and in Vancouver. But we also started up a new service in Gulfport. And we're growing mobile. So, I think, overall, it's moving forward. I won't be able to give you specific numbers on that one because we're working with our customers to sell that out. I hope that was a comprehensive answer.

Speaker Change: Now the Toronto fuel facility that is also almost done while it's actually done construction of phase one, but we actually delayed startup because we sold out phase two now and we're actually integrating the phase II construction before it starts up so that will be starting up in Q1, but thats a phenomenon that we've actually got it sold so we're actually at the high end of that one by the end of the end of this.

Walter Spracklin: Thank you for the question, and we desire to continue to squeeze that delta between launch and land.

We look to get another few percentage points out of that, squeeze that gap between how we launch trains and how we bring them into terminals.

Ravineaux: And you can go to the investor relations team after the call for the other. Our next question comes from Ravi Shanker from Morgan Stanley. Please go ahead, your line is open. Thanks, everyone. Tracy or Doug, can you give us an update on the Falcon service, please? What's the operational rollout been like after the first few months? What's it been like selling the product to customers, etc.?

Speaker Change: Here, So thats fantastic again, and then you got some of the EV supply chains now Thats, one thats actually were a little uncertain. Now we are we did move about 800 carloads or product by that Lithia minds from northern Quebec for export. So that is moving forward, but with the EV pushed back a little bit with some of the announcements we're expecting some of that to get pushed back but we still.

Walter Spracklin: We originate and terminate the majority of our traffic on our own lines, so we're not as dependent on the other carriers for that metric, and that's where I talked a bit about reducing train meet delays online, which is a product of getting trains out on time, train schedules making train meets, and making timely crew swaps.

Ravineaux: Okay, well, that's a good question. We'll have Derek start off on the operational side. Yeah, hey, good afternoon. No, it's been a very exciting product we have had with our partners at the FXC and Union Pacific. It is acting as one seamless service. You know, we're consistently delivering on public transport's time with our customers, and we look forward to continuing to grow that here in 2024. So, solid momentum in 2023, and I see that partnership between the three of us only continuing to grow in 2024. Yeah, and on revenues, listen. We told everyone it's going to be very slow growth on the truck market, and that's what it is, but that's okay, right? We're expecting it.

All the battery plants progressing on our line there is still moving forward with nor halt in some of the others and some are still under NDA that we can't talk about and then the last big one is.

So that's really our focus, to continue to squeeze that delta between launch and land.

Speaker Change: The northern BC projects that we put forward and that we did put a siding in there last year, we're starting to see the growth on the Frac sand moving up there as well as some of the propane coming down so that one is moving forward as well on target.

Walter Spracklin: Thank you very much for the question.

Thank you.

Walter Spracklin: Our next question comes from Brandon Oglenski from Barclays.

Please go ahead; your line is open.

Walter Spracklin: Hey, good afternoon, everyone.

Speaker Change: And I will say the very last one was our expansion within the intermodal so listen we're starting to see some progress there with the volume starting to come back we're working with our customers diligently both on all of our parts in Halifax, and Montreal, even St. John We restarted service, there and Prince Rupert and in Vancouver, but we also start up a new service.

And thanks for taking my one question.

Walter Spracklin: Just Lane, I was hoping you could update us on, you know, the change in the dividend.

And obviously, if you were to go to that full, you know, repurchase this year, that'd be quite a bit of cash flow out the door.

Walter Spracklin: So where are you seeing leverage in the near term, and especially in the context of, you know, that 10 to 15% plan over the next three years?

Speaker Change: Both the UP and FXC and us are working hand-in-hand to grow that. The big bid cycle is really only starting up in Q1, where we'll be going after truck business that's out there, and we hope to see some solid growth moving into the rest of the year. Thanks for your questions.

Speaker Change: And Gulfport as well and we're trying and we're growing mobile so I think overall, it's moving forward and I won't be able to give you specific numbers on that one because we're working with our customers to solve that out I hope that was a comprehensive answer.

Would you be willing to take it up higher right now?

Walter Spracklin: Yeah, so as we said, we're looking at a targeted leverage over time of 2.5.

Speaker Change: Yeah, no need for a second. Thanks.

Speaker Change: No need for a second.

I mean, if you look at this year, we finished at 2.25.

Speaker Change: Okay.

Speaker Change: Our next question comes from Justin Long from Stevens. Please go ahead, your line is open.

Speaker Change: Our next question comes from Justin Long from Stephens. Please go ahead. Your line is open.

Walter Spracklin: We typically, you know, grow our dividends in line with earnings growth.

Speaker Change: Thank you. Our next question comes from Walter Spracklin from RBC Capital Markets. Please go ahead, your line is open. Yeah, thanks very much. Good afternoon, everyone.

Justin Long: Thanks, and good afternoon, you mentioned earlier, the $200 million of cost headwinds this year, but could you break that out in a little bit more detail across the three different buckets that you mentioned and does the guidance assume that you can improve.

Justin Long: Thanks and good afternoon. You mentioned earlier the $200 million of cost headwinds this year, but could you break that out in a little bit more detail across the three different buckets that you mentioned, and does the guidance assume that you can improve the OR year over year despite these cost headwinds, or will that be challenging?

You'll see that we're slightly below average because we do that over time.

Walter Spracklin: And if you remember, in 2023, our dividends were up 8%, and our earnings were down 2%.

Walter Spracklin: So I wanted to zero in here on the first quarter. And I know you don't typically give quarterly guidance, but I think it's important given last year was such a tough compare.

So we have a long-term view.

Walter Spracklin: We have a long-term view on these two things.

I think that, as we said on Investor Day, our leverage will be 2.5% over time if economic conditions warrant it.

Justin Long: Year over year, despite these cost headwinds or will that be challenging.

Speaker Change: Yeah, thanks, Justin. So the $200 million, if you want, you know, breaking it out is about $100 million on depreciation. And I would say the other half, the other $100 million, call it half and half on incentive compensation and pension.

Speaker Change: Yeah. Thanks, Justin so the $200 million of breaking it out is about $100 million on depreciation and I would say the other half the other 100 million call it half and half on incentive compensation and pension.

Walter Spracklin: And now you've come up to a tough start here due to the weather. Is it possible, do you think, when we frame the 10% over a quarterly basis, is it possible that you can see any growth in the first quarter, given how tough the comparison is and the weather to start? And therefore, is most of it all kind of back-end loaded for the 10%? Thanks, Walter. Maybe I'll just start. I'll hand it over to Giseland, but I'll start by saying it is going to be a tough comparison.

Walter Spracklin: So that's why we went back and toned down a little bit of our share buyback to $4 billion.

Last year, we wanted to be opportunistic due to the stock price and where it was.

Speaker Change: and absolutely, I think that, you know, having these cost headwinds, we still believe that we will improve our margins. And Tracy made the point, actually, that, you know, it's tough on margins when actually, you know, volumes is down and when volumes pick up, we do have space, as we've mentioned before, to add the traffic on some of our trains, including and especially the merchandise trains. So, we are definitely believe and, you know, that we will improve margins, you know, in 2024. Let me just add to that, Justin. You know, I have to say that I have been really pleased with our operational cost for the past, you know, two years, especially in light of some of the headwinds that we've had over that time. I think our record speaks pretty positively there and just spoke to around, you know, how we think it'll play out this year. But we'll be managing costs closely and we expect that our... Margin leverage is going to continue to grow over time.

Speaker Change: And absolutely I think that you know having these cost headwinds we still.

Walter Spracklin: And again, in terms of dividends, I'm very proud to say that this is the 28th year that we've increased our dividend, and that's very good.

Speaker Change: We still believe that we will improve our margins and Tracy made the point actually that.

Speaker Change: It's tough on.

So that's what we're thinking, and we're thinking long-term and without any jerky reactions.

Speaker Change: Margins went actually volumes as dominant volume pick up we do have space as we've mentioned before too to add the traffic on some of our trains, including and especially the Merchandised range. So we are definitely believe in.

Walter Spracklin: Thanks for the question, Brendan.

Our next question comes from Tom Wadowitz from UBS.

Walter Spracklin: Please go ahead; your line is open.

Giseland: We had a big quarter last year and some very different weather than the way we've started off this year, but Gis, did you want to make any comments on that? No, I think that's right. I think we told the market, you know, at many conferences that Q1 was going to be a very tough comp. If you remember last year, our EPS was up 38 percent, and our OR was 61, which is not kind of a winter-like type of OR. So we know that

Yeah, good afternoon.

Walter Spracklin: I wanted to ask you a little bit about training lengths and how you view that opportunity.

I think where you're running now is, you know, a little bit below where you've achieved in the past.

Speaker Change: And that we will improve margins.

Speaker Change: In 2024, let me just add to that Jeff and you know I guess.

Walter Spracklin: And so would you expect to see that expand?

I don't know if you can get to, you know, 8,200, 8,300 feet, something like that.

Speaker Change: To say that I have been really pleased with our operational costs.

Speaker Change: Over the past two years, especially in light of some of the headwinds that we've had over that time I think our record speaks pretty positively Darin and Joe spoke to around how we think it will play out this year, but we'll be managing costs closely and we expect that our margin leverage is going to continue to grow over time.

Walter Spracklin: And is that, you know, if you realize that, is that a potential driver of upside on what the margin might be relative to your guidance?

Giseland: We've baked that in into our forecast and into our 10 percent. We have accounted for regular winter. It did start, and as Pat said, we had seven days of deep freeze in the West.

Hey, Tom, it's Derek.

Speaker Change: You know, as the volume strengthens. So that would be the way to think about it.

Walter Spracklin: Good afternoon,

Speaker Change: The volume strength and so that.

I think when you look at it, you know, right now, we can grow at a lower incremental cost with our manifest business because we can add traffic on existing trains.

Speaker Change: That would be the way to think about it.

Speaker Change: Thanks for the question. Understood. That's helpful. Thanks.

Speaker Change: Thanks for the understood that's helpful. Thanks.

Speaker Change: Hopefully, that's behind us. It's behind us for now. And hopefully, as we get into February, we won't get that sustained cold.

Speaker Change: Our next question comes from John Chappell from Evercore ISI. Please go ahead. Your line is open.

Speaker Change: Our next question comes from Jon Chapelle from Evercore ISI. Please go ahead. Your line is open.

Walter Spracklin: You know, part of the schedule operation is remaining balanced and turning and sweating the assets.

Jonathan Chappell: Thank you. Doug, I want to go back to Rupert. You noted back to pre-COVID levels, but you also mentioned a little bit later you're continuing to work to fill Rupert. So is there any way to quantify what capacity is available in Rupert right now and how much international intermodal can grow if the economy dodges a hard landing and maybe Rupert gets up to the full capacity you envisioned?

Jonathan Chappell: Thank you Doug I wanted to go back to Rupert we noted back to pre Covid levels, but you also mentioned a little bit later, you are continuing to work to fill Rupert. So is there any way to quantify what capacity is available and Rupert right now and how much international intermodal can grow with the economy does as a hard landing and maybe refer gets up to full capacity you envision.

Speaker Change: But yeah, I mean, we know that Q1 was going to be a tough comp, but that's all factored in into our 10 percent EPS growth for the year. Thanks, Walter, for the question. Thank you. Our next question comes from Konar Gupta from Scotiabank. Please go ahead.

Now, when you look at it from an intermodal point of view, that is something that's been down, but it's coming back.

Walter Spracklin: That will actually help our train length out as that grows throughout the year.

So, overall, you know, we're well positioned to grow at a low incremental cost, and that's the key as we look at it going forward.

Speaker Change: Okay.

Doug McDonald: Oh, it's a good question. So, you know, Rupert is one of our, you know, it's the crown jewel we have up there, right? So I would sit there and say, not only are we growing the intermodal, but you know, we're growing our propane franchise for export out there, we're growing the coal still going out there. So there's and the wood pellets as well. So not just that, but you know, really hitting on the intermodal, I'll say the international probably dipped down to the lowest at just over half a million TEUs that we're running through the terminal. It's got a capacity just over one, so 1.2 really, that we can go up to easily. And then you start to stretch the terminal a little bit, but that's great. That's where we'd love to get to with our partner DP World. So we're working with our customers on how we fill that out. So we're being very structured about it. And with the changes that are going on, obviously, with the Red Sea and the Suez Canal and the Panama Canal, we're seeing some a lot of interest come to try and fill that up. So we just want to be very diligent, we want to match it to our operation with both Pat and Derek, and we won't want to oversell it, we've got to make sure if we're going to contract it out with their customers, that we're going to be able to move it as efficiently as we have been, and keep that terminal dwell down under three days, which is really what our goal is.

Speaker Change: It's a good question. So Rupert is one of our crown Jewel, we have up there right. So I would sit there and say not only are we growing the intermodal, but we're growing our propane franchise for export out there we're growing the coal still going out there. So there is and the wood pellets as well so not just that but it's really hitting on the intermodal.

Walter Spracklin: Thanks for the question.

Konar Gupta: Your line is open. Good evening, everyone, and best wishes to Doug and Remy for their respective roles. Question for Pat. You said destination performance is improving. But what's your realistic target there, Pat, and what's required from your interchange partners to get to that level? So Conor, thank you for the question, and we desire to continue to squeeze that delta between launch and land. We look to get another few percentage points out of that, squeeze that gap between how we launch trains and how we arrive them into terminals. We originate and terminate the majority of our traffic on our own lines, so we're not as dependent on the other carriers for that metric, and that's where I talked a bit about reducing train meet delays online, which is a product of getting trains out on time, train schedules making the train meets, and making timely Thank you very much for the question. Thank you. Our next question comes from Brandon Oglenski from Barclays. Please go ahead; your line is open. Hey, good afternoon, everyone.

Our next question comes from Amit Mehrotra of Deutsche Bank.

Walter Spracklin: Please go ahead.

Your line is open.

Walter Spracklin: Thanks.

Hi everyone.

Walter Spracklin: I guess my one question would just be on yield.

Obviously, there's a pricing component of yield, there's a mixed component, and there's a fuel component.

Speaker Change: The international probably dip down to the lowest at just over half a million teus that were running through the terminal. It's got a capacity just over one so one to really that we can go up to easily and.

Walter Spracklin: I think fuel was a pretty nice benefit, at least on a lag basis, in the fourth quarter.

And just, Lane, can you just talk about, like, Does yield take a step down when you adjust for that fuel and when do we actually see like the pricing benefit in the yield number obviously mixed adjusted or not adjusted for mixed because the concern I guess I have at least is that yield comes down in the first quarter as these fuel surcharges lag and I'm just trying to understand what the outlook or cadence of that yield improvement is as you progress with the year.

And then you start to stretch the terminal a little bit, but thats, great Thats, where wed love to get to with our partner DP World. So we're working with our customers on how we fill that out so we're being very structured about it and with the changes that are going on obviously with the Red Sea in the Suez Canal in the Panama Canal.

Speaker Change: We're seeing some a lot of interest come to try and fill that up. So we just want to be very diligent we want to match it to our operation with both patent Derrick and we wont want to oversell. It we've got to make sure. If we're going to have contracted out with their customers that we're going to be able to move it as efficiently as we have been and keep that terminal dwell down under three days, which is really what our goal is.

Walter Spracklin: So I can open up and then I can let Doug talk a little bit more about yield, but on fuel, Amit, I think when you look at the lag in the fourth quarter, it was around four or five cents favorable in the quarter and on a year-over-year basis, it was as well.

Speaker Change: Thank you Doug.

Speaker Change: Thank you.

Speaker Change: Our last question will come from Michael Kiprios from Deja Gland Capital Markets. Please go ahead, your line is open.

Speaker Change: Our last question will come from Michael Kim from Daiwa Capital markets. Please go ahead. Your line is open.

Michael Kiprios: Good afternoon and thanks for taking my question. Your fourth quarter grain volumes are down 13% and you had mentioned earlier that maybe some of the grain farmers decide to hold back on some volume through the end of the year. Do you have an idea what percentage of this grain you expect to be carried over and recouped in the first half? And maybe an update on the discussion with the farmers and the current grain dynamics, hopefully. Thank you.

So it wasn't a big deal, and I can turn it over to you, Doug, for the mix.

Brandon Oglenski: And thanks for taking my one question. Just Lane, I was hoping you could update us on, you know, the change in the dividend. And obviously, if you were to go to that full repurchase this year, that'd be quite a bit of cash flow out the door. So where are you seeing leverage in the near term, and especially in the context of, you know, that 10 to 15% plan over the next three years, would you be willing to take it up higher right now? Yeah, so as we said, we were looking at the targeted leverage over time of 2.5. I mean, if you look at this year, we finished at 2.25.

Michael Kim: Good afternoon, and thanks for taking my question.

Walter Spracklin: Yeah, our traffic's relatively stable, but there's always going to be a mixed component.

Michael Kim: Fourth quarter grain volumes were down 13%. Then you had mentioned earlier that maybe someone that green farmers decided to hold back on some volume through the end of the year do you have an idea of what percentage of this screen you expect be carried over and recouped in the first half and maybe an update on the discussion with the farmers and the Korean Green dynamics separately. Thank you.

So depending upon which product line you're talking about, it's going to have a very different impact.

Walter Spracklin: I mean, I'm not going to get on all of them on the call here, Amit, but we can always sit down and do it later.

Speaker Change: Sure, I'll talk specifically about Canadian grain first, and then the U.S. grain is a little bit, well, I'll just go Canadian grain first, how's that? So, listen, the prices, farmers have had great pricing the last couple of years, so they're used to getting a very good price on the market. So, this year, the world market, actually, there's a lot of surplus from other countries out there. They've had good crops, it's driven the price down, so the Canadian farmer is sitting there saying, I'm going to hold on to grain until I get a better price. So, we've had probably one of the lowest Q4 demands I've seen in my history at the company, but they still have to sell, right? So, they're sitting on farm, that inventory is there, anything that we didn't move in Q4 will shift into Q1 and Q2, so that's great. Now, I think you can just really take what we did last year, say what didn't move, and it just moves further out, so I won't give specific numbers. At the same time, I do believe we've had a fairly good crop. You know, the StatsCan brought it up to $67 million. Metric tons in their forecast, finally, and that is actually a good-sized crop, not as good as last year, but a really great crop, and I think a lot of it was really good on our network. So, I think we have a lot of grain to move. We're going to be very busy for the rest of Q1 with Pat and Derek, and I think we're going to have a really good tail end to Q2.

Michael Kim: Sure.

Michael Kim: Specifically about the Canadian grain first and then the U S grain is a little bit I'll just go Canadian Greenfield, how does that so listen the prices farmers have had great pricing in the last couple of years. So they are used to getting a very good price on the market. So this year the world market actually Theres a lot of surplus from other countries out there they've had a good <unk>.

So the other thing that I want to just highlight is that we should not see any impact on container storage fees moving forward into Q1 and beyond.

Doug: That'll have a big impact. Thanks for the question.

Unnamed Speaker: Our next question comes from Brian Ossenbeck from JP Morgan.

Brandon Oglenski: We typically, you know, grow our dividends in line with earnings growth. You'll see that we're slightly below because we do that over time. And if you remember, in 2023, our dividends were up 8%, and our earnings were down, too. So we have a long-term view. We have a long-term view on these two things. I think that, as we said on Investor Day, our leverage will be 2.5 over time if economic conditions warrant it. So that's why we went back and toned down a little bit of our share buyback to $4 billion.

Unnamed Speaker: Please go ahead. Your line is open.

Michael Kim: <unk>, it's driven the price down so the Canadian farmer, sitting there, saying I'm going to hold onto Grand plug at a better price. So we've had probably one of the lowest Q4 demands I've seen in my history at the company, but they still have to sell right. So they're sitting on farm that inventory is there anything that we didn't move in Q4 will shift into Q1 and Q2.

Unnamed Speaker: Hey, thanks for taking the question.

Doug: Doug, just wanted to ask if you can give us an update on the CN-specific projects which you quantified at the Investor Day. It sounds like maybe some of them are moving a little bit forward faster than you thought, but how does that shape look like in 2024? Is it back half-weighted like some of the broader economy stuff that you've been highlighting? And I think in the past you've also given.., some visibility to how much of that is sort of contracted or, Thank you. Thanks Brian, I actually have the presentation in front of me just because I know I get this question too often, right, so when you're talking about some of the bulk commodities, you know, a lot of that's going to be in the new canola crush and as well as the new mines coming online, so an example is like obviously BHP, we're expecting to see some volumes there, but that won't be until 2026, and the canola crush plants look like they've been pushed back a little, so it'll be more back-end weighted towards 2026.

So that's great now I think you can just really take what we did last year or say what didn't move and it just moves further out so I won't give specific numbers at the same time I do believe we've had a fairly good crop.

Michael Kim: SaaS brought it up to 67 million metric tons in their forecasts finally, and that is actually a good sized crop not as good as last year, but a really great crop and I think a lot of it was really good on our network. So I think we have a lot of grain to move we're going to be very busy for the rest of Q1 with patent Derek and I think we're going to have a really good tail into Q2.

Brandon Oglenski: Last year, we wanted to be opportunistic due to the stock price and where it was. And again, on terms of dividend, I'm very proud to say that it's the 28th year that we've increased our dividend. And that's very good.

Speaker Change: Thanks for your thank you I appreciate it.

Speaker Change: Thanks for your time. Thank you. I appreciate it.

Brandon Oglenski: So that's what we're thinking. And we're thinking long-term and without any jerky reaction. Thanks for the question, Brendan. Our next question comes from Tom Wadewitz from UBS. Please go ahead; your line is open. Yeah, good afternoon.

Speaker Change: Yeah.

Speaker Change: This concludes the question and answer session. I would like to turn the call back over to Tracy Robinson.

Speaker Change: This concludes the question and answer session I would like to turn the call back over to Tracy Robinson.

Tracy Robinson: Thanks, Julianne. So a strong finish to 2023, capping off seven quarters now of operational and service excellence.

Tracy Robinson: Thanks Julien.

Tracy Robinson: A strong finish to 2023 capping off seven quarters now of operational and service excellence and a great set up as we start into 2024 stock plan is working our make the plan around the plan to sell the plant approach is driving the right results and this railroad right now is running as well as ever.

Doug: When you look at renewables, right, we're starting to see some of that with respect to the crush plants as well, but we're starting to see some of the renewable projects come on and some of the ethanol, but once again, that'll be a little bit more back-ended, except we should see some ethanol synergies this year. The big one that we've managed to move forward with obviously is the announcement we did with AltaGas on the export of LPG. So I'll be honest, we've actually hit our target already with respect, but it'll be going forward, but on a going forward basis. We've hit the 40,000 carloads that we had at the bottom end of the forecast just with that one contract, so that's a huge, huge win for us.

Thomas Wadewitz: Wanted to ask you a little bit about training length and how you view that opportunity. I think where you're running now is, you know, a little bit below where you've achieved in the past. And so, would you expect to see that expand? I don't know if you can get to, you know, 8,200, 8,300 feet, something like that.

Tracy Robinson: and a great setup as we start into 2024 so our plan is working our make the plan run the plan sell the plan approach is driving the right results and this railroad right now is running as well as ever and I like the team that we have our growth initiatives are ramping up I'm really excited about the momentum and the opportunities we have over the next quarters I want to thank you all for being here with us today and we look forward to talking again very soon thank you

Tracy Robinson: Mike and team that we have our growth initiatives are ramping up.

Tracy Robinson: Really excited about the momentum and the opportunities we have over the next quarters I want to thank you all for being here with US today, and we look forward to talking again very soon thank you.

Speaker Change: The conference call has now ended thank you for your participation you may now disconnect your line.

Speaker Change: The conference call has now ended. Thank you for your participation. You may now disconnect your lines.

Thomas Wadewitz: And is that, you know, if you realize that, is that a potential driver of upside on what the margin might be relative to your guidance? Hey, Tom, it's Derek. Good afternoon. I think when you look at it, you know, right now, we can grow at a lower incremental cost with our manifest business because we can add traffic on existing trains. You know, part of the schedule operation is remaining balanced and turning and splitting the assets. Now, when you look at it from an intermodal point of view, that is something that's been down, that is coming back. That will actually help our train length out as that grows throughout the year. So overall, we're well positioned to grow at a low incremental cost, and that's the key as we look at it going forward. Thanks for the question. Our next question comes from Amit Mehrotra from Deutsche Bank. Please go ahead; your line is open.

Speaker Change: Thank you for watching! Thank you for watching! Thank you for watching!

Okay.

Speaker Change: [music].

Speaker Change: Yes.

Doug: Now, the Toronto Fuel Facility, that's also almost done, well, it's actually done construction in Phase 1, but we've actually delayed startup because we sold out Phase 2 now, and we're actually integrating the Phase 2 construction before it starts up. So, that'll be starting up in Q1, but it's phenomenal that we've actually got it sold. So, we're actually at the high end of that one by the end of this year. So, that's fantastic again.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Doug: And then you've got some of the EV supply chains. Now, that's one that's actually, we're a little uncertain about now. We did move about 800 carloads of product for the lithium mines from northern Quebec for export. So, that is moving forward, but with the EV pushback a little bit with some of the announcements, we're expecting some of that to get pushed back. But we still see all the battery plants progressing on our line.

Amit Mehrotra: Thanks. Hi everyone. I guess my one question would just be on yield. Obviously, there's a pricing component of yield, there's a mix component, there's a fuel component. I think fuel was a pretty nice benefit, at least on a lag basis, in the fourth quarter. And just like, can you just talk about like, Does yield take a step down when you adjust for that fuel, and when do we actually see the pricing benefit in the yield number, obviously mixed adjusted, or not adjusted for mixed, because the concern I guess I have is that yield comes down in the first quarter as these fuel surcharges lag, and I'm just trying to understand what the outlook or cadence of that yield improvement is as you progress through the year But on fuel, Amit, I think when you look at the lag in the fourth quarter, it was around four or five cents favorable in the quarter. And on a year-over-year basis, it was as well. So it wasn't a big deal.

Speaker Change: Yes.

Doug: They're still moving forward with Norfolk and some others, and some are still under NDA that we can't talk about. And then the last big one is the northern BC projects that we put forward. And that we did put a siding in there last year. Last year, we were starting to see growth on the frac stand moving up there, as well as some of the propane coming down. So, that one is moving forward as well on target. And I'll say the very last one was our expansion within the intermodal. So, listen, we're starting to see some progress there with the volume starting to come back. We're working with our customers diligently, both at all of our ports in Halifax, in Montreal, even in St. John. We restarted service there in Prince Rupert and in Vancouver, but we also started up a new service in Gulfport. And we're growing mobile. So, I think, overall, it's moving forward. I won't be able to give you specific numbers on that one because we're working with our customers to sell it out. I hope that was a comprehensive answer.

Yeah.

Amit Mehrotra: And I can turn it over to you, Doug, for the mix. Yeah, our traffic's relatively stable, but there's always going to be a mixed component. So depending upon which product line you're talking about, it's going to have a very different impact. I mean, I'm not going to get on all of them on the collar about it.

Doug: So but it's, we can always sit down with a trade; we'll go and do it after. So all the other things that I want to just highlight are we did, we should not see any impact on the container storage fees moving forward into Q1 and beyond. That's, that'll have a big impact. Thanks for the question. Our next question comes from Brian Ossenbeck from J.P. Morgan. Please go ahead, your line is

Unnamed Speaker: Yeah, no need for a second. Thanks. Our next question comes from Justin Long from Stevens. Please go ahead; your line is open. Thanks and good afternoon. You mentioned earlier the $200 million of cost headwinds this year, but could you break that out in a little bit more detail across the three different buckets that you mentioned, and does the guidance assume that you can improve OR year over year despite these cost headwinds, or will that be challenging?

Brian Ossenbeck: Hey, thanks for taking the question. Doug just wanted to ask if you can give us an update on the CN specific projects which you quantified at the investor day. It sounds like maybe some of them are moving a little bit forward faster than you thought, but what does that shape look like in 2024?

Yeah, thanks, Justin. So the $200 million, if you want, you know, breaking it out, is about $100 million in depreciation. And I would say the other half, the other $100 million, call it half and half on incentive compensation and pension. And absolutely, I think that, you know, having these cost headwinds, we still believe that we will improve our margins. And Tracy made the point, actually, that, you know, it's tough on margins when, actually, volumes are down, and when volumes pick up, we do have space, as we've mentioned before, to add traffic on some of our trains, including and especially the merchandise trains.

Doug: Is it back halfway to some of the broader economic stuff that you've been highlighting? And I think in the past you've also given some visibility to how much of that is sort of contracted or spoken for in terms of those carloads. So an update there would be helpful. Thanks.

Speaker Change: © transcript Emily Beynon © transcript Emily Beynon © transcript Emily Beynon © transcript Emily Beynon © transcript Emily Beynon © transcript Emily Beynon © transcript Emily Beynon

Speaker Change: [music].

Speaker Change: Thanks Brian, I actually have the presentation in front of me just because I know I get this question too often. Right, so when you're talking about some of the bulk commodities, you know, a lot of that's going to be in the new Canola Crush and as well as the new mines coming online. So an example is obviously BHP, we're expecting to see some volumes there, but that won't be till 2026. And the Canola Crush plants look like they've been pushed back a little, so they'll be more back end weighted towards 2026. When you look at renewables, right, we're starting to see some of that with respect to the Crush plants as well, but we're starting to see some of the renewable projects come on and some of the ethanol. But once again, that'll be a little bit more back-end, except we should see some ethanol synergies this year.

Speaker Change: Okay.

Tracy: So, we definitely believe and you know that we will improve margins, you know, in 2024.

Speaker Change: Yes.

Speaker Change: [music].

Let me just add to that, Justin.

Unnamed Speaker: You know, I have to say that I have been really pleased with our operational costs for the past, you know, two years, especially in light of some of the headwinds that we've had over that time. I think our record speaks pretty positively there and I just spoke about how we think it'll play out this year. But we'll be managing costs closely, and we expect that our... margin leverage is going to continue to grow over time. You know, as the volume strengthens.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Thanks.

Yes.

Speaker Change: Okay.

Unnamed Speaker: So that would be the way to think about it.

Speaker Change: Okay.

Speaker Change: Yes.

Justin Long: Thanks for the question.

Unnamed Speaker: understood.

Speaker Change: Okay.

Justin Long: That's helpful. Thanks.

Speaker Change: Yes.

Unnamed Speaker: Our next question comes from John Chappell from Evercore ISI.

Speaker Change: Okay.

Speaker Change: Okay.

Jonathan Chappell: Please go ahead. Your line is open.

Jonathan Chappell: Thank you.

Speaker Change: Okay.

Doug: Doug, I want to go back to Rupert. You mentioned returning to pre-COVID levels, but you also mentioned a little bit later you're continuing to work to fill Rupert. So is there any way to quantify what capacity is available in Rupert right now and how much international intermodal can grow if the economy dodges a hard landing and maybe Rupert gets up to the full capacity you envisioned? Oh, it's a good question. So, you know, Rupert is one of our crown jewels we have up there, right? So I would sit there and say, not only are we growing intermodal, but we're growing our propane franchise for export out there, we're growing the coal still going out there.

Speaker Change: The big one that we've managed to move forward with obviously is the announcement we did with AltaGas on the export of LPG. So I'll be honest, we've actually hit our target already with respect to, it'll be going forward, but on a going forward basis, we've hit the 40,000 carloads that we had at the bottom end of the forecast just with that one contract. So that's a huge, huge win for us.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Now, the Toronto Fuel Facility, that's also almost done, well, it's actually done construction in Phase 1, but we actually delayed start-up because we sold out Phase 2 now, and we're actually integrating the Phase 2 construction before it starts up, so that'll be starting up in Q1, but that's phenomenal that we've actually got it sold, so we're actually at the high end of that one by the end of this year, so that's fantastic again. And then you got some of the EV supply chains, now that's one that's actually, we're a little uncertain now, we are, we did move about 800 carloads of product by the lithium mines from Northern Quebec for export, so that is moving forward, but with the EV pushed back a little bit with some of the announcements, we're expecting some of that to get pushed back, but we still see all the battery plants progressing on our line, they're still moving forward with Norfolk and some of the others, and some are still under NDA that we can't talk about.

Speaker Change: Okay.

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Speaker Change: Sure.

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Speaker Change: Yes.

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Speaker Change: And then the last big one is the Northern BC projects that we put forward, and that, we did put a siding in there last year, we're starting to see the growth on the frack stand moving up there as well as some of the propane coming down, so that one is moving forward as well on target, and I'll say the very last one was our expansion within the intermodal, so listen, we're starting to see some progress there with the volume starting to come back, we're working with our customers diligently both on all of our ports in Halifax, in Montreal, even St. John, we restarted service there in Prince Rupert and in Vancouver, but we also started up a new service in Gulfport as well, and we're growing mobile. So I think overall it's moving forward, I won't be able to give you specific numbers on that one because we're working with our customers to sell that out. I hope that was a comprehensive answer. Yeah, no need for a second.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: © transcript Emily Beynon © transcript Emily Beynon © transcript Emily Beynon © transcript Emily Beynon © transcript Emily Beynon

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Thanks. Our next question comes from Justin Long from Stevens. Please go ahead, your line is open. Thanks and good afternoon.

Yes.

Speaker Change: Okay.

Justin Long: You mentioned earlier the $200 million of cost headwinds this year, but could you break that out in a little bit more detail across the three different buckets that you mentioned? And does the guidance assume that you can improve OR year over year despite these cost headwinds, or will that be challenging? Yeah, thanks Justin. So the $200 million, if you want, you know, breaking it out, it's about $100 million in depreciation. And I would say the other half, the other $100 million, call it half and half on incentive compensation and pension.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: Yes.

Speaker Change: Great.

Speaker Change: And absolutely, I think that, you know, having these cost headwinds, we still believe that we will improve our margins. And Tracy made the point, actually, that, you know, it's tough on margins when actually, you know, volumes are down, and volumes pick up. We do have space, as we've mentioned before, to add traffic on some of our trains, including and especially merchandise trains. So, we are definitely believing, you know, that we will improve margins, you know, in 2024. Let me just add to that, Justin. You know, I'd have to say that I have been really pleased with our operational cost performance over the past, you know, two years, especially in light of some of the headwinds that we've had over that time.

Speaker Change: Okay.

Doug: So there's also the wood pellets as well. So not just that, but really hitting on the intermodal, I'll say the international probably dipped down to the lowest at just over half a million TEUs that we're running through the terminal. It's got a capacity of just over one, so 1.2 really, that we can go up to easily. And then you start to stretch the terminal a little bit, but that's great. That's where we'd love to get to with our partner DP World, so we're working with our customers on how we can fill that out. So we're being very structured about it. And with the changes that are going on, obviously, with the Red Sea and the Suez Canal and the Panama Canal, we're seeing a lot of interest come to try and fill that up.

Yes.

Speaker Change: [music].

Speaker Change: Good morning.

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: Okay.

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Sure.

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Speaker Change: Yes.

Yes.

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Doug: So we just want to be very diligent; we want to match it to our operation with both Pat and Derek, and we won't want to oversell it. We've got to make sure if we're going to contract it out with their customers that we're going to be able to move it as efficiently as we have been and keep that terminal dwell down under three days, which is really what our goal is.

Speaker Change: I think our record speaks pretty positively there and I just spoke to you about how we think it'll play out this year. But we'll be managing costs closely, and we expect that our margin leverage is going to continue to grow over the next year, you know, as volume increases. So that would be the way to think about it. Thanks for the question. Understood. That's helpful. Our next question comes from John Chappell from Evercore ISI. Please go ahead; your line is open.

Speaker Change: Okay.

Speaker Change: Yes.

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Speaker Change: Sure.

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Sure.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Sure.

Speaker Change: [music].

Jonathan Chappell: Thank you.

Speaker Change: © transcript Emily Beynon © transcript Emily Beynon © transcript Emily Beynon

Unnamed Speaker: Our last question will come from Michael Kiprios of Deja Gland Capital Markets.

Michael Kiprios: Please go ahead, your line is open. Good afternoon, and thanks for taking my question.

Unnamed Speaker: Your fourth-quarter grain volumes are down 13%, and you had mentioned earlier that maybe some grain farmers would decide to hold back on some volume through the end of the year.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Doug: Do you have an idea what percentage of this grain you expect to be carried over and recouped in the first half? And maybe an update on the discussion with the farmers and the current grain dynamics, hopefully. Thank you. Sure. I'll talk specifically about Canadian grain first, and then U.S. grain is a little bit, well, I'll just go with Canadian grain first. How's that?

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Sure.

Jonathan Chappell: Thank you. Doug, I want to go back to Rupert. You noted back to pre-COVID levels, but you also mentioned a little bit later that you're continuing to work to fill Rupert. So is there any way to quantify what capacity is available in Rupert right now and how much international, intermodal traffic can grow if the economy dodges a hard landing and maybe Rupert gets up to the full capacity you envision? Oh, it's a good question.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Doug: So, listen, the prices, farmers have had great prices for the last couple of years, so they're used to getting a very good price on the market. So, this year, on the world market, actually, there's a lot of surplus from other countries out there. They've had good crops, and that's driven the price down, so the Canadian farmer is sitting there saying, I'm going to hold on to grain until I get a better price. So, we've had probably one of the lowest Q4 demands I've seen in my history at the company, but they still have to sell, right?

Speaker Change: Okay.

Okay.

Speaker Change: Thank you.

Speaker Change: Great.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Thank you for watching. Thank you for watching. Thank you for watching. Thank you for watching. Thank you for watching. Thank you for watching. Thank you for watching.

Okay.

[music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Doug: So, they're sitting on the farm, that inventory is there, anything that we didn't move in Q4 will shift into Q1 and Q2, so that's great. Now, I think you can just really take what we did last year, say what didn't move, and it just moves further out, so I won't give specific numbers. At the same time, I do believe we've had a fairly good crop. You know, StatsCan brought it up to $67 million.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

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Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: Okay.

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Speaker Change: Okay.

Speaker Change: Okay.

Doug: Metric tons in their forecast, finally, and that is actually a good-sized crop, not as good as last year, but a really great crop, and I think a lot of it was really good on our network. So, I think we have a lot of grain to move. We're going to be very busy for the rest of Q1 with Pat and Derek, and I think we're going to have a really good tail end to Q2.

Speaker Change: Thanks.

Speaker Change: Sure.

Sure.

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: Yes.

Okay.

Speaker Change: Right.

Speaker Change: Yes.

Speaker Change: Yes.

Michael Kiprios: Thanks for your time.

Michael Kiprios: Thank you.

Speaker Change: Sure.

Unnamed Speaker: I appreciate it.

Tracy Robinson: This concludes the question and answer session.

Speaker Change: Yes.

Speaker Change: Okay.

Unnamed Speaker: I would like to turn the call back over to Tracy Robinson.

Speaker Change: Sure.

Speaker Change: Okay.

Tracy Robinson: Thanks, Julianne. So a strong finish to 2023, capping off seven quarters now of operational and service excellence, and a great setup as we start into 2024 so our plan is working our make the plan run the plan sell the plan approach is driving the right results and this railroad right now is running as well as ever and I like the team that we have our growth initiatives are ramping up I'm really excited about the momentum and the opportunities we have over the next quarters I want to thank you all for being here with us today and we look forward to talking again very soon thank you, The conference call has now ended.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Thanks.

Speaker Change: Okay.

Speaker Change: Okay.

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Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

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Speaker Change: Yes.

Doug: So, you know, Rupert is one of our crown jewels we have up there, right? So, I would sit there and say, not only are we growing the intermodal, but, you know, we're growing our propane franchise for export out there. We're growing the coal still going out there. So, there's and the wood pellets as well.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Okay.

Unnamed Speaker: Thank you for your participation.

Speaker Change: Thanks.

Unnamed Speaker: You may now disconnect your lines.

Unnamed Speaker: Thank you for watching!

Unnamed Speaker: Thank you for watching!

Speaker Change: Okay.

Unnamed Speaker: Thank you for watching!

Speaker Change: Yes.

Speaker Change: Thank you.

Unnamed Speaker: transcript Emily Beynon transcript Emily Beynon transcript Emily Beynon transcript Emily Beynon transcript Emily Beynon transcript Emily Beynon transcript Emily Beynon transcript Emily Beynon transcript Emily Beynon transcript Emily Beynon transcript Emily Beynon transcript Emily Beynon transcript Emily Thank you for watching. Thank you for watching.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Doug: So, not just that, but, you know, it's really hitting on the intermodal. I'll say the international probably dipped down to the lowest at just over half a million TEUs that were running through the terminal. It's got a capacity of just over one. So, one, 1.2 really, that we can go up to easily. And then you start to stretch the terminal a little bit, but that's great.

Speaker Change: Sure.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Thanks.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Thanks.

Speaker Change: Thanks.

Yes.

Unnamed Speaker: Thank you for watching.

Speaker Change: Yes.

Unnamed Speaker: Thank you for watching.

Speaker Change: Yes.

Unnamed Speaker: Thank you for watching.

Speaker Change: Yes.

Unnamed Speaker: Thank you for watching.

Speaker Change: Okay.

Unnamed Speaker: Thank you.

Doug: That's where we'd love to get to with our partner DP World. So, we're working with our customers on how we fill that out. So, we're being very structured about it. And with the changes that are going on, obviously, with the Red Sea and the Suez Canal and the Panama Canal, we're seeing some, a lot of interest come to try and fill that up.

Unnamed Speaker: Good afternoon,

Speaker Change: Yes.

Julianne: My name is Julianne, and I will be your conference operator today.

Speaker Change: Okay.

Speaker Change: Okay.

Unnamed Speaker: Welcome to CN's fourth quarter and full year 2023 Financial and Operating Results conference call. All participants are now in listen-only mode. After the speaker's remarks, there will be a question and answer session, during which we ask that you kindly limit yourself to one question.

Speaker Change: Thanks.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Thanks.

Speaker Change: Yes.

Julianne: I'd now like to turn the call over to Stacey Alderson, Assistant Vice President, Investor Relations.

Speaker Change: Okay.

Speaker Change: Okay.

Doug: So, we just want to be very diligent. We want to match it to our operation with both Pat and Derek, and we won't want to oversell it. We've got to make sure if we're going to contract it out with their customers that we're going to be able to move it as efficiently as we have been and keep that terminal dwell time down under three days, which is really what our goal is. Thank you. Our last question will come from Michael Kiprios from Desjardins Capital Markets. Please go ahead; your line is open.

Speaker Change: Sure.

Thank you.

Stacey Alderson: Ladies and gentlemen, Ms. Alderson.

Speaker Change: Yes.

Yes.

Stacey Alderson: Thank you, Operator.

Speaker Change: Right.

Stacey Alderson: Bonjour à tous et merci de vous joindre à notre conférence sur les résultats du quatrième trimestre et l'année 2023. Good afternoon, everyone, and thank you for joining us for CN's fourth quarter and full year 2023 Financial and Operating Results Conference.

Sure.

Speaker Change: Thank you for watching. Thank you.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Stacey Alderson: Before we begin, I'd like to draw your attention to the forward-looking statements and additional legal information available at the beginning of the presentation. As a reminder, today's conference call contains certain projections and other forward-looking statements within the meaning of U.S. and Canadian securities laws. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied in these statements. These risks and uncertainties are more fully described in our cautionary statement regarding forward-looking statements in our presentation.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Michael Kiprios: Good afternoon, and thanks for taking my question. Your fourth-quarter grain volumes are down 13%. And you had mentioned earlier that maybe some of the grain farmers would decide to hold back on some volume through the end of the year. Do you have an idea what percentage of this grain you expect to be carried over and recouped in the first half? And maybe an update on the discussion with the farmers and the current grain dynamics? I believe so. Thank you. Sure, I'll talk specifically about Canadian grain first, and then the U.S. grain is a little bit... I'll just go with Canadian grain first.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: <unk>.

Speaker Change: Sure.

Speaker Change: Good afternoon. My name is Julianne and I will be your conference operator today.

Speaker Change: Good afternoon. My name is Julian I will be your conference operator today.

Julianne: Welcome to CN's fourth quarter and full year 2023 Financial and Operating Results Conference call.

Speaker Change: Welcome to CN fourth quarter, and full year 2023 financial and operating results conference call.

Stacey Alderson: After the prepared remarks, we will conduct a Q&A session. I would ask that you please limit yourself to one question so we can get to hear from as many of you as possible.

Julianne: All participants are now in listen-only mode.

Speaker Change: All participants are now in listen only mode.

Julianne: After the speaker's remarks, there will be a question and answer session.

Speaker Change: After the Speakers' remarks, there will be a question and answer session.

Tracy Robinson: The IR team will be available after the call for any follow-up questions.

Julianne: during which we ask that you kindly limit yourself to one question.

Tracy Robinson: Joining us on the call today are Tracy Robinson, our President and CEO, Pat Whitehead, our Chief Network Operations Officer, Derek Taylor, our Chief Field Operations Officer, Doug McDonald, our Chief Marketing Officer, and Ghislaine Houlle, our Chief Financial Officer.

During which we ask that you kindly limit yourself to one question.

Julianne: I'd now like to turn the call over to Stacey Alderson, Assistant Vice President, Investor Relations.

Speaker Change: I would now like to turn the call over to Stacie Alderson Assistant Vice President Investor Relations, Ladies and gentlemen, Ms Alderson.

Speaker Change: How's that? So listen, the prices. Farmers have had great prices for the last couple of years. So they're used to getting a very good price on the market. So this year, on the world market, actually, there's a lot of surplus from other countries out there. They've had good crops, and it's driven the price down. So the Canadian farmer is sitting there saying, I'm going to hold on to grain until I get a better price. So we've had probably one of the lowest Q4 demands I've seen in my history at the company, but they still have to sell. So they're sitting on the farm; that inventory is there.

Stacey Alderson: Ladies and gentlemen, Ms. Alderson.

Stacey Alderson: Thank you, operator. Bonjour à tous et merci de vous joindre à notre appel conférence sur les résultats du quatrième trimestre et l'année 2023.

Stacie Alderson: Thank you operator, <unk> comparable leases have you kept the emptiness Lenny Damian that swap.

Stacey Alderson: Good afternoon everyone and thank you for joining us for CN's fourth quarter and full year 2023 Financial and Operating Results Conference.

Speaker Change: Good afternoon, everyone and thank you for joining us for <unk> fourth quarter, and full year 2023 financial and operating results conference call before.

Tracy Robinson: It is now my pleasure to turn the call over to CN's President and Chief Executive Officer, Tracy Robinson.

Stacey Alderson: Before we begin, I'd like to draw your attention to the forward-looking statements and additional legal information available at the beginning of the presentation.

Speaker Change: Before we begin I'd like to draw your attention to the forward looking statements and additional legal information available at the beginning of the presentation. As a reminder, today's conference call contains certain projections and other forward looking statements within the meaning of the U S and Canadian Securities laws.

Stacey Alderson: As a reminder, today's conference call contains certain projections and other forward-looking statements within the meaning of the U.S. and Canadian securities law.

Speaker Change: Anything that we didn't move in Q4, we'll shift into Q1 and Q2. So that's great. Now, I think you can just really take what we did last year, say what didn't move, and it just moves further out. So I won't give specific numbers.

Stacey Alderson: These statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied in these statements.

Speaker Change: These statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied E statements.

Speaker Change: At the same time, I do believe we've had a fairly good crop. The Sats Kang brought it up to 67 million metric tons in their forecast, finally. And that is actually a good size crop, not as good as last year, but a really great crop. And I think a lot of it was really good on our network.

Stacey Alderson: They are more fully described in our cautionary statement regarding forward-looking statements in our presentation.

Speaker Change: They are more fully described in our cautionary statement regarding forward looking statements in our presentation.

Stacey Alderson: After the prepared remarks, we will conduct a Q&A session.

Speaker Change: After the prepared remarks, we will conduct the Q&A session I would ask that you. Please limit yourself to one question. So we can get to hear from as many of you as possible.

Speaker Change: I would ask that you please limit yourself to one question so we can get to hear from as many of you as possible.

Speaker Change: So I think we have a lot of grain to move. We're going to be very busy for the rest of Q1 with Pat and Derek, and I think we're going to have a really good tail into Q2. Thanks for your time.

Speaker Change: The IR team will be available after the call for any follow-up questions.

Speaker Change: The IR team will be available after the call for any follow up questions.

Speaker Change: Thank you. This concludes the question and answer session. I would like to turn the call back over to Tracy Robinson.

Speaker Change: Joining us on the call today are Tracy Robinson, our President and CEO,

Speaker Change: Joining us on the call today are Tracy Robinson, our president and CEO.

Tracy Robinson: Merci, c'est fait, bienvenue à tous.

Tracy Robinson: I want to start today by welcoming Derek and Pat to their first call.

Speaker Change: Pat Whitehead, our Chief Network Operations Officer,

Tracy Robinson: It's great to have you guys with us, and I also want to extend a warm welcome to Remy, who's out in the field today, immersing himself in the operation. You'll all have a chance to meet him over the next few months or so. Doug remains in charge of our commercial organization and our growth efforts, and he is, of course, here today with us. Doug will be retiring this year, and there'll be a little more to say on that at that time, but I very much appreciate your presence and partnership over the last couple of years, and I know that Doug will do a great job in getting Remy set up with our commercial team. Now, this transition later this year will be seamless for both our customers and our employees.

Speaker Change: Pac Whitehead, our Chief Network operations Officer.

Tracy Robinson: Thanks, Julian. So a strong finish to 2023, capping off seven quarters now of operation and service, and a great setup as we start into 2024. So our plan is working. Our make the plan, run the plan, sell the plan approach is driving the right results, and this railroad is running as well as ever, and I like the team that we have. Our growth initiatives are ramping up. I'm really excited about the momentum and the opportunities we have over the next quarters. I want to thank you all for being here with us today, and we look forward to talking again very soon. Thank you.

Speaker Change: Derek Taylor, our Chief Field Operations Officer.

Speaker Change: Derek Taylor, our Chief Field operations Officer.

Speaker Change: Doug McDonald, our Chief Marketing Officer, and Ghislaine Houlle, our Chief Financial Officer.

Speaker Change: Doug Macdonald, our Chief marketing officer, and <unk> <unk>.

Speaker Change: Our Chief Financial Officer.

Speaker Change: It is now my pleasure to turn the call over to CN's President and Chief Executive Officer, Tracy Robinson.

Tracy Robinson: It is now my pleasure to turn the call over to <unk>, President and Chief Executive Officer, Tracy Robinson Missy.

Tracy Robinson: Merci, c'est fait, bienvenue à tous.

Tracy Robinson: <unk> being the newest.

Tracy Robinson: I want to start today by welcoming Derek and Pat to their first call. It's great to have you guys with us.

Tracy Robinson: I want to start today by welcoming Derek can Pat to their first call. It's great to have you guys with us and I also want to extend a warm welcome to women who is out in the field today immersing himself in the operation Youll all have a chance to meet him over the next two months or so.

Tracy Robinson: And I also want to extend a warm welcome to Remy, who's out in the field today, immersing himself in the operation. You'll all have a chance to meet him over the next few months or so.

Tracy Robinson: Doug remains in charge of our commercial organization and our growth efforts, and he is, of course, here today with us. Doug will be retiring this year.

Speaker Change: The conference call has now ended. Thank you for your participation. You may now disconnect your line. ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? , , , , , , , , , , ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? Good afternoon.

Tracy Robinson: Doug remains in charge of our commercial organization and our growth efforts and he has of course here today with us that will be retiring this year and there'll be a little more to say on this at that time.

Tracy Robinson: We are railroading here for the long term, and we're fortunate to have a lot of very strong and experienced talent. And we're going to supplement that now and again with people from different backgrounds and perspectives. This is going to make us even stronger, which is important as we continue to refine our path forward and advance our growth. And we're also taking a long-term approach when it comes to our networks. We know that our network has always been core to the CN Advantage and to our ability to provide our customers with solutions for their business.

Julianne: My name is Julianne, and I will be your conference operator today. Welcome to CN's fourth quarter and full year 2023 Financial and Operating Results Conference Call. All participants are now in listen-only mode.

Tracy Robinson: and there'll be a little more to say on this at that time but I very much appreciated, Doug, your presence and partnership over the last couple of years and I know that Doug will do a great job in getting Remy set up with our commercial team. Now this transition later this year will be seamless to both our customers and our employees.

Speaker Change: Very much appreciated Doug your presence and partnership over the last couple of years and I know that Doug will do a great job in getting Remy setup with our commercial team now. This transition later this year will be seamless to both our customers and are in place.

Julianne: After the speaker's remarks, there will be a question and answer session, during which, we ask that you kindly limit yourself to one question. I'd now like to turn the call over to Stacey Alderson, Assistant Vice President, Investor Relations. Ladies and gentlemen, Miss Alderson.

Tracy Robinson: We are railroading here for the long term.

Speaker Change: We are railroading here for the long term and we're fortunate to have a lot of very strong experienced talent and we're going to supplement that knowing again with talent with different backgrounds and perspectives and this is going to make us even stronger which is important as we continue to refine our path forward and advance our <unk>.

Tracy Robinson: and we're fortunate to have a lot of very strong and experienced talent.

Tracy Robinson: And we're going to supplement that now and again with different backgrounds and perspectives.

Tracy Robinson: Where it makes sense to add to our network to position us to do more or better of this, and in the fourth quarter, closing on the CB&M will give us more opportunities to densify the eastern part of our network in the coming years. And in December, we signed an agreement to purchase the Iowa Northern, the ninth addition to our network in the Midwest. It will give customers in that area better market access, and for us, it will deepen our network reach and boost our aid. So I want to welcome those who might be listening in for the first time today to our Railroad. We do expect to fully integrate the Iowa Northern property later this year pending a positive outcome of the STB review process. Before I ask the team to get into the details, I'll just recap where we are, and I'll start by saying that we ended the year with some meaningful improvements in both our accidents and injuries. I am very pleased with both the work that has gone into this and the impact, and we're going to continue those efforts.

Tracy Robinson: This is going to make us even stronger, which is important as we continue to refine our path forward and advance our growth.

Stacey Alderson: Thank you, Operator. Bonjour à tous et merci de vous rejoindre à notre conférence téléphonique sur les résultats du quatrième trimestre et l'année 2023. Good afternoon, everyone, and thank you for joining us for CN's fourth quarter and full year 2023 Financial and Operating Results Conference. Before we begin, I'd like to draw your attention to the forward-looking statements and additional legal information available at the beginning of the presentation. As a reminder, today's conference call contains certain projections and other forward-looking statements within the meaning of the U.S. and Canadian securities laws. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied in these statements.

Speaker Change: Growth mandate.

Tracy Robinson: And we're also taking a long-term approach when it comes to our networks.

Speaker Change: And we're also taking.

Speaker Change: Long term approach when it comes to our network. We know that our network has always been core to see an advantage and to our ability to provide our customers with solutions for their businesses.

Tracy Robinson: We know that our network has always been core to the CN Advantage and to our ability to provide our customers with solutions for their business.

Tracy Robinson: Where it makes sense to add to our network to position us to do more or better of this,

Speaker Change: Sure It makes sense to add to our network to position us to do more better vis we'll do so in the fourth quarter, we closed on the CBS, which will give us more opportunities to densify the eastern part of our network in coming years.

Tracy Robinson: and in the fourth quarter,

Tracy Robinson: Closed on the CB&M.

Tracy Robinson: will give us more opportunities to densify the eastern part of our network in coming years.

Tracy Robinson: And in December, we signed an agreement to purchase the Iowa Northern, the ninth addition to our network in the Midwest. It will give customers in that area better market access.

Speaker Change: And in December we signed an agreement with <unk>.

Speaker Change: Richard The Iowa, Northern Nice addition to our network in the Midwest. It will give customers in that area better market access and for US It will deepen our network reach and boost our AG business.

Tracy Robinson: and for us it will deepen our network reach and boost our aid.

Tracy Robinson: So I want to welcome those who might be listening in for the first time today to our Railroad

Stacey Alderson: They are more fully described in our cautionary statement regarding forward-looking statements in our presentation. After the prepared remarks, we will conduct a Q&A session. I would ask that you please limit yourself to one question so we can get to hear from as many of you as possible.

I want to welcome those who might be listening in to the first time today to a railroad Sam.

Tracy Robinson: We do expect to fully integrate the Iowa Northern property later this year pending a positive outcome of the STB review process.

Speaker Change: We do expect to fully integrate the Iowa Northern property later this year pending a positive outcome at the STB review process.

Tracy Robinson: Before I ask the team to get into the details, I'll just recap where we are, and I'll start

Tracy Robinson: This will be a relentless drive and operation.

Stacey Alderson: The IR team will be available after the call for any follow-up questions. Joining us on the call today are Tracy Robinson, our President and CEO; Pat Whitehead, our Chief Network Operations Officer; and Derek Taylor, our Chief Field Operations Officer.

Speaker Change: Now before I ask the team to get into the details I'll, just recap, where we are and I'll start with safety.

Tracy Robinson: We came into the fourth quarter a little battle-hardened after a couple of difficult quarters last year, where we managed through a freight recession and a number of external shocks. In Q4, we had the gift of some kinder weather, and our operations team took full advantage, posting some really strong on-time and velocity.

Tracy Robinson: We ended the year with some meaningful improvements in both our accidents and injuries.

Speaker Change: We ended the year with some meaningful improvements in both our accident and injury frequency.

Tracy Robinson: and I am very pleased with both the work that has gone into this and the impact.

Speaker Change: I am very pleased with both of them work has gone into this and the impact it has had and.

Tracy Robinson: and we're going to continue those efforts. This will be a relentless drive

Speaker Change: And we're going to continue those efforts this will be a relentless drive to zero.

Tracy Robinson: and the operation.

Speaker Change: And on the operation.

Tracy Robinson: We came into the fourth quarter a little battle-hardened after a couple of difficult quarters last year.

Stacey Alderson: Douglas Donald, our Chief Marketing Officer, and Gisela Ulp, our Chief Financial Officer. It is now my pleasure to turn the call over to CM's President and Chief Executive Officer, Tracy Robinson. Merci, c'est fait, bienvenue.

Speaker Change: We came into the fourth quarter, a little battle hardened after a couple of difficult quarters last year.

Tracy Robinson: and where we managed through a freight recession and a number of external shocks

Tracy Robinson: And as we rounded the corner into this year, we kicked off with some extreme winter temperatures across the network. But as we lived out of that, the team is well on their way to getting this place back to that same level of opportunity. Whatever comes at us, we know that sticking with this model will ensure resiliency, enabling us always to perform at our best. Our full-year car velocity, for example, and this includes the challenges of the second and third quarters, was 213 miles per day. That's a 9% improvement over 2020. We're running a plan, we're getting more out of our assets, and this is driving some very consistent service levels to our customers and many more. Thank you very much.

Speaker Change: While we manage through a freight recession and a number of external shocks and in Q4, we have yet to some kind of weather and our operations team took full advantage posting some really strong on time and velocity metrics.

Tracy Robinson: And in Q4, we have the gift of some kinder weather, and our operations team took full advantage, posting some really strong on-time and velocity.

Tracy Robinson: I want to start today by welcoming Derek and Pat to their first call. It's great to have you guys with us. And I also want to extend a warm welcome to Remy, who's out in the field today, immersing himself in the operation. You'll all have a chance to meet him over the next few months or so. Doug remains in charge of our commercial organization and our growth efforts, and he is, of course, here today with us. But he will be retiring this year.

Tracy Robinson: And as we rounded the corner into this year, we kicked off with some extreme winter temperatures across the network. But as we lived out of that, the team is well on their way to getting this place back to that same level of opportunity.

Speaker Change: And as we rounded the corner into this year, we kicked off with some extreme winter temperatures across the network, but as we lift out of that the team is well underway to getting this place back to that same level of operation.

Tracy Robinson: Whatever comes at us, we know that sticking with this model will ensure resiliency, enabling us always to perform at our best.

Speaker Change: Whenever it comes out as we know that thinking that this model will ensure resiliency, enabling us always to perform at our best.

Tracy Robinson: And there'll be a little more to say on this at that time, but I have very much appreciated your presence and partnership over the last couple of years. And I know that Doug will do a great job in getting Remy set up with our commercial team. Now this transition later this year will be seamless to both our customers and our employees. We are railroading here for the long haul, and we're fortunate to have a lot of very strong and experienced talent. And we're going to supplement that now and again with talent with different backgrounds and perspectives.

Tracy Robinson: Our full-year car velocity, for example, and this is including the challenges of the second and third quarter, was 213 miles per day. That's a 9% improvement over 2020.

Speaker Change: Our full year car velocity for example, and this is including the challenges of the second and third quarter with 213 miles per day, that's a 9% improvement over 2022.

Tracy Robinson: At the end of the day, this is about doing what we say we need to do. We have a plan, and we're executing it. We've been building up our track record operationally over these last seven quarters, and I think I speak for the entire... It feels really good to have that CN group back. Turning to our quarter and full year results, I'll keep it to just a few highlights. Our fourth-quarter adjusted EPS was 4% lower than last year, and our operating ratio was 59.3%. For the year, adjusted EPS was 2% lower, and our operating ratio was 60.8%. These are the kind of results we can be very proud of in a challenging, and we said last quarter that we'd seen the bottom in volumes, and this has played out as we've seen sequential improvement in our Q4RQ.

Tracy Robinson: We're running a plan, we're getting more out of our assets, and this is driving some very consistent service levels to our customers.

Speaker Change: We're running the plan, we're getting more out of our assets and this is driving some very consistent service levels to our customers.

Tracy Robinson: and many more.

Speaker Change: Strong consistent resilient operation is table stakes in this industry and the necessary foundation to move the economy and for us to deliver our growth agenda.

Speaker Change: Thank you very much.

Speaker Change: At the end of the day, this is about doing what we say we need to do.

Speaker Change: At the end of the day. This is about doing what we say.

Speaker Change: We have a plan and we're executing it.

We have a plan and we're executing well.

Speaker Change: We've been building up our track record operationally over these last seven quarters, and I think I speak for the entire...

Speaker Change: We've been building up our track record operationally over these last seven quarters, and I think I speak for the entire team.

Speaker Change: It feels really good to have that CN group back.

Speaker Change: Feels really good to have that CN grew back.

Speaker Change: Turning to our quarter and full year results, I'll keep it to just a few highlights.

Speaker Change: Turning to our quarter and full year results I'll I'll keep it to just a few highlights.

Speaker Change: Our fourth quarter adjusted EPS was 4% lower than last year.

Speaker Change: Our fourth quarter, adjusted EPS was 4% lower than last year, and our operating ratio was 59, 3%.

Speaker Change: and our operating ratio was 59.3%.

Tracy Robinson: This is going to make us even stronger, which is important as we continue to refine our path forward and advance our growth. And we're also taking a long-term approach when it comes to our network. We know that our network has always been core to the CN Advantage and to our ability to provide our customers with solutions for their business.

Speaker Change: For the year, adjusted EPS was 2% lower and our operating ratio was 60.8%.

Speaker Change: For the year adjusted EPS was 2% lower and our operating ratio was 68%. These are the kind of results, we can be very proud of and a challenging environment.

Tracy Robinson: We're up by 10. Now there remain question marks on the economy as we move into 2022. We're expecting continued improvement as the year progresses, and just now, we'll give you more details on all of our. Beyond the lift from a strengthening economy, we're also working on our growth. We leverage our network, our strong service, and our customer and supply chain partnerships, and these are starting to bear fruit, and in some cases more quickly than we possibly could. Doug will give you some color on that, and you'll hear Pat and Derek review the state of our operations, and we're ready for the volumes to start.

Speaker Change: These are the kind of results we can be very proud of in a challenging

Speaker Change: and we said last quarter that we'd seen the bottom in volumes and this has played out as we've

Speaker Change: And we said last quarter that we've seen environment volumes and this has played out as we expected we have seen sequential improvement in our Q4 rpms were up 10%.

Speaker Change: We've seen sequential improvement in our Q4RQ.

Tracy Robinson: Where it makes sense to add to our network, to position us to do more or better of this, we'll do so. And in the fourth quarter, we launched quotes on the CBN app, which will give us more opportunities to densify the eastern part of our network in the coming years. And in December, we signed an agreement to purchase the Iowa Northern, tonight's addition to our network in the Midwest.

Speaker Change: We're up 10.

Speaker Change: Now there remains question marks on the economy as we move into 2022.

Speaker Change: Now there remains a question mark on the economy as we move into 2024, we're expecting a continued improvement as the year progresses, and <unk> will give you more detail on all of our centers.

Speaker Change: We're expecting a continued improvement as the year progresses and just now we'll give you more details on all of our

Speaker Change: Beyond the lift from a strengthening economy, we're also working our growth

Speaker Change: Beyond the lift from a strengthening economy, we're also working our growth initiatives.

Speaker Change: We leverage our network, our strong service, and our customer and supply chain partnerships.

Speaker Change: Leverage our network, our strong service and our customer and supply chain partnerships and these are starting to bear fruit and in some cases more quickly than we plan Doug will give you some color on that and you'll hear Pat and Derek review the state of our operations and we are ready for the volumes to start to lift.

Tracy Robinson: This gives me confidence in our EPS guidance of approximately 10% growth over 2025. I'll now hand it over to the team to fill out the details.

Speaker Change: and these are starting to bear fruit and in some cases more quickly than we possibly could.

Speaker Change: Doug will give you some color on this and you'll hear Pat and Derek review the state of our operations and we're ready for the volumes to start.

Tracy Robinson: It will give customers in that area better market access, and for us, it will deepen our network reach and boost our ambitions. So I want to welcome those who might be listening in for the first time today to our railroad. We do expect to fully integrate the Iowa Northern property later this year, pending a positive outcome of the STB review process. Before I ask the team to get into the details, I'll just recap where we are, and I'll start with safety.

Pat Whitehead: Pat, you're up.

Pat Whitehead: Merci Tracy et bienvenue à tous.

Pat Whitehead: It's great to be on the call today.

Pat Whitehead: I'll begin with safety. In the fourth quarter, our injury frequency ratio was down 14%, and our accident rate was down 29%.

Doug McDonald: This gives me the confidence in our EPS guidance of approximately 10% growth over 2025.

Speaker Change: This gives me the confidence in our EPS guidance of approximately 10% growth over 2023.

Speaker Change: I'll now hand it over to the team to fill out the details. Pat, you're up.

Pat Whitehead: These results maintained a solid full-year performance, demonstrating our progress toward a commitment-based safety culture. For the full year, the injury frequency ratio improved 13%, and the accident rate improved 17%. This represents a record low year for injuries at CN, but we know we can and that we must do better. I'm proud of the positive strides we're making on our safety metrics, but this is a journey, and we won't be satisfied until all employees go home safely at the end of every shift. We are focused on our vision of a workplace that is free of accidents and injuries. We are committed to working as a team across all crafts and departments to achieve this vision.

Speaker Change: I'll now hand, it over to the team to fill out the detail that youre at.

Pat Whitehead: Merci Tracy et bienvenue à tous. It's great to be on the call today. I'll begin with safety. In the fourth quarter, our injury frequency ratio was down 14% and our accident rate was down 29%.

Speaker Change: ELC Traci <unk>.

Traci: It's great to be on the call today I'll begin with safety in the fourth quarter, our injury frequency ratio was down 14% and our accident rate was down 29%.

Tracy Robinson: We ended the year with some meaningful improvements in both our accidents and injuries, and I am very pleased with both the work that has gone into this and the impact. We're going to continue those efforts. This will be a relentless drive on the operation. We came into the fourth quarter a little battle-hardened after a couple of difficult quarters last year, where we managed to reframe the recession and a number of external... And in Q4, we had the gift of some kinder weather, and our operations team took full advantage, posting some really strong on-time and velocity. Now as we round the corner into this year, we kicked off with some extreme winter temperatures across the network. But as we lived out of that, the team is well on their way to getting this place back to that same level of opportunity. Whatever comes at us, we know that sticking with this model will ensure resiliency, enabling us always to perform at our best. Our full-year car velocity, for example, and this includes the challenges of the second and third quarters, was 213 miles per day.

Pat Whitehead: These results kept a solid full-year performance, demonstrating our progress toward a commitment-based safety culture.

Traci: These results capped a solid full year performance, demonstrating our progress toward a commitment based safety culture.

Pat Whitehead: For the full year, injury frequency ratio improved 13% and the accident rate improved 17%.

For the full year injury frequency ratio improved 13% and the accident rate improved 17%.

Pat Whitehead: This represents a record low year for injuries at CN, but we know we can and that we must do better.

Traci: This represents a record low year for injuries at CN, but we know we can and that we must do better.

Pat Whitehead: I'm proud of the positive strides we're making on our safety metrics, but this is a journey, and we won't be satisfied until all employees go home safely at the end of every shift. We are focused on our vision of a workplace that is free of accidents and injuries.

Traci: I'm proud of the positive strides, we're making on our safety metrics, but this is a journey and we won't be satisfied until all employees go home safely at the end of every shift we are focused on our vision of a workplace that is free of accidents and injuries. We are committed to working as a team across all crafts and departments to achieve.

Pat Whitehead: Training and Development. Technology and behavior-based safety activities are essential to enhancing our safety.

Pat Whitehead: We are committed to working as a team across all crafts and departments to achieve this vision.

Pat Whitehead: One of the keys to supporting better safety outcomes is running a more predictable operation. Predictability is what underpins our velocity and our resilience. CN's Scheduled Operating Model has delivered seven consecutive quarters of operational and service excellence.

Traci: This vision training and development.

Pat Whitehead: Training and Development.

Pat Whitehead: Technology and behavior-based safety activities are essential to enhancing our safety.

Traci: Technology and behavior based safety activities are essential to enhancing our safety culture.

Pat Whitehead: One of the keys supporting better safety outcomes is running a more predictable operation.

Traci: One of the key supporting better safety outcomes is running a more predictable operation.

Pat Whitehead: Predictability is what underpins our velocity and our resilience.

Pat Whitehead: Now, as we've said, the plan is dynamic and needs to adjust to our traffic. So, with volumes rising, we have been refining our train pack. For example, we added a train start out of Prince Rupert, and we adjusted the Vancouver train plan to accommodate an uptick in volume in this corridor. Departing and arriving trains on time, what we call launch and land, continues to be a key focus of both the network operations and the field. These are the basics of scheduled railroading.

Predictability is what underpins our velocity and our resiliency.

Pat Whitehead: CN's Scheduled Operating Model has delivered seven consecutive quarters of operational and service excellence.

Traci: <unk> scheduled operating model has delivered seven consecutive quarters of operational and service excellence.

Pat Whitehead: Now, as we've said, the plan is dynamic and needs to adjust to our traffic. So, with volumes rising, we have been refining our train pack.

Traci: Now as we've said the plan is dynamic and needs to adjust to our track so with volumes rising we have been refining our train package. For example, we added a train start out of Prince Rupert and we adjusted the Vancouver train plan to accommodate an uptick in volume in this corridor.

Pat Whitehead: For example, we added a train start out of Prince Rupert, and we adjusted the Vancouver train plan to accommodate an uptick of volume in this corridor.

Tracy Robinson: That's a 9% improvement over 2020. We're running the plan. We're getting more out of our assets, and this is driving some very consistent service levels to our customers and the necessary foundation to move the economy and for us to deliver our growth agenda. At the end of the day, this is about doing what we say we're going to do. We have a plan, and we're, We've been building up our track record operationally over these last seven quarters, and I think I speak for the entire... It feels really good to have that CN group back. Turning to our quarter and full year results, I'll keep it to just a few highlights. Our fourth-quarter adjusted ETS was 4% lower than last year, and our operating ratio was 59.7 for the year. Adjusted EPS was 2% lower, and our operating ratio was 60.8%.

Pat Whitehead: Departing and arriving trains on time, what we call launch and land, continues to be a key focus of both the network operations and field.

Traci: Departing and arriving trains on ton, what we call launch and land continues to be a key focus of both the network operations and field teams.

Pat Whitehead: Fourth quarter origin train performance remained solid and in line with prior quarters at around 90%.

Pat Whitehead: These are the basics of scheduled railroading.

Traci: These are the basics of scheduled railroading.

Pat Whitehead: Fourth quarter origin train performance remained solid and in line with prior quarters at around 90%.

Traci: Fourth quarter origin train performance remains solid and in line with prior quarters at around 90% right, where we needed to be to ensure on time train meets.

Pat Whitehead: Right where we need it to be to ensure on-time training. Q4 destination train performance was 70%. And we know there's room for improvement here by continuing to reduce our train meet delays and making timely crew swaps at intermediate trains. But I'm pleased with how the network and field teams have managed the complexity of crew scheduling introduced by the new Canadian work restaurant. We continue to learn and adjust training schedules to adapt to this new requirement. Now you're going to hear more from Doug on volumes, but my team is getting ready for business. Making sure we have the right resources in place. We have a number of capital projects that will enable short-term operating efficiency and unlock long-term growth across the core mainline from the West Coast to Chicago.

Pat Whitehead: Right where we need it to be to ensure on-time training.

Pat Whitehead: Q4 destination train performance was 70%.

Traci: Q4 destination train performance was 70% and we know there's room for improvement here by continuing to reduce our train meet delays in making timely crew swaps at intermediate terminals.

Pat Whitehead: And we know there's room for improvement here by continuing to reduce our train meet delays and making timely crew swaps at intermediate trains.

Pat Whitehead: I'm pleased with how the network and field teams have managed the complexity to crew scheduling introduced by the new Canadian work restaurant.

I am pleased with how the network and field teams that manage the complexity to crew scheduling introduced by the new Canadian work restaurants, we continue to learn and adjust train schedules to adapt to this new requirement.

Pat Whitehead: We continue to learn and adjust training schedules to adapt to this new requirement.

Speaker Change: Now you're going to hear more from Doug on volumes, but my team is getting ready for the business.

Tracy Robinson: These are the kind of results we can be very proud of in a challenging environment. And we said last quarter that we'd seen the bottom in volumes, and this has played out as we expected. We've seen sequential improvement in our Q4RQ, but now there remain question marks on the economy as we move into 2020. We're expecting continued improvement as the year progresses, and just now, we'll give you more details on all of our... Beyond the Lift from a Strengthening Economy. We're also working on our growth, leveraging our network, our strong service, and our customer and supply chain partners. And these are starting to bear fruit, and in some cases, more quickly than we thought. Doug will give you some color on that.

Now you're going to hear more from Doug on volumes, but my team is getting ready for the business, making sure. We have the right resources in place we have a number of capital projects that will enable short term operating efficiency and unlock long term growth across our core mainline from the west coast to Chicago.

Speaker Change: Making sure we have the right resources in place.

Doug McDonald: We have a number of capital projects that will enable short-term operating efficiency and unlock long-term growth across the core mainline from the West Coast to Chicago.

Doug McDonald: In 2024, we are investing in additional double track along our Vancouver to Chicago corridors with projects on our Edson sub and on the former EJ&E around Chicago.

Doug Macdonald: In 2024, we are investing in additional double track to lower our Vancouver to Chicago corridor with projects on our essence up and on the former EJ any around Chicago.

Pat Whitehead: In 2024, we are investing in additional double track along our Vancouver to Chicago corridors with projects on our Edson sub and on the former EJ&E around Chicago. We continue to invest in rolling stock. The Locomotive Modification Program is well underway, and we are renewing a number of our car forms. Our training campuses were very busy in 2023. We qualified 900 plus new conductors to cover attrition and meet the requirements of the work rest changes in Canada, and we're now ramping up to align with our growth forecast.

Doug McDonald: We continue to invest in rolling stock.

Doug Macdonald: We continue to invest in rolling stock.

Doug McDonald: The Locomotive Modification Program is well underway, and we are renewing a number of our car forms.

Doug Macdonald: The locomotive modification program is well underway and we are renewing a number of our car fleets.

Doug McDonald: Our training campuses were very busy in 2023. We qualified 900 plus new conductors to cover attrition and meet the requirements of the work rest changes in Canada, and we're now ramping up to align with our growth forecast.

Doug Macdonald: Our training campuses were very busy in 2023.

Doug Macdonald: We qualified 900, plus new conductors to cover attrition and meet the requirements of the work risk changes in Canada, and we are now ramping up to align with our growth forecast.

Doug: And you'll hear Pat and Derek review the state of our operations, and we're ready for the volumes to start. This gives me confidence in our EPS guidance of approximately 10% growth over 2020. I'll now hand it over to the team to fill out the details. Pat, you're up. Merci, Tracy et bienvenue à tous.

Doug McDonald: So overall, from a resource perspective, we're poised to meet the forecasted demand and grow with our customers.

Doug Macdonald: So overall from a resource perspective, we are poised to meet the forecasted demand and grow with our customers.

Doug McDonald: I'll now pass it to my good friend, Derek, to talk about how the team executed in the fourth round.

Speaker Change: I'll pass it to my good friend, Eric to talk about how the team executed in the fourth quarter.

Pat Whitehead: So overall, from a resource perspective, we're poised to meet the forecasted demand and grow with our customers.

Pat Whitehead: It's great to be on the call today. I'll begin with safety. In the fourth quarter, our injury frequency ratio was down 14%, and our accident rate was down 29%.

Derek Taylor: Thanks, Pat, and good afternoon, everyone.

Eric: Thanks, and good afternoon, everyone.

Derek Taylor: The team finished the last quarter of 2023 with strong operational momentum and we started the new year with a very fluid nature.

The team finished the last quarter of 2023 with strong operational momentum and we started the new year with a very fluid network.

Derek Taylor: I'll now pass it to my good friend, Derek, to talk about how the team performed in the fourth round. Thanks, Pat, and good afternoon, everyone. The team finished the last quarter of 2023 with strong operational momentum, and we started the new year with a very fluid nature. While we've benefited from unseasonably mild weather and no major disruptions in the fourth quarter, I give full credit to the team for remaining focused and continuing to deliver excellent customer service.

Derek Taylor: While we've benefited from unseasonably mild weather and no major disruptions in the fourth quarter, I give full credit to the team for remaining focused and continuing to deliver excellent customer service.

Eric: While we benefited from unseasonably mild weather and no major disruptions in the fourth quarter I give full credit to the team for remaining focused and continuing to deliver excellent customer service.

Pat Whitehead: These results cap solid full-year performance, demonstrating our progress toward a commitment-based safety culture. For the full year, the injury frequency ratio improved 13%, and the accident rate improved 17%. This represents a record low year for injuries at CN, but we know we can, and that we must, do better. I'm proud of the positive strides we're making on our safety metrics, but this is a journey, and we won't be satisfied until all employees go home safely at the end of every shift. We are focused on our vision of a workplace that is free of accidents and injuries.

Derek Taylor: Finishing with positive momentum was key because over the last two weeks, we've had more seasonal weather across the network with frigid temperatures, significant snow, and blizzard conditions.

Eric: Finishing with positive momentum was key because over the last two weeks, we've had more seasonal weather across the network with frigid temperatures significant snow and blizzard conditions.

Derek Taylor: As we've said before,

Eric: As we've said before.

Derek Taylor: Our make-the-plan, run-the-plan approach is not just about driving velocity and reliability.

Or make the plan from the planned approach is not just about driving velocity and reliability.

Derek Taylor: Finishing with positive momentum was key because, over the last two weeks, we've had more seasonal weather across the network with frigid temperatures, significant snow, and blizzard conditions. As we've said before, our make-the-plan, run-the-plan approach is not just about driving velocity and reliability. It also builds operational resilience, allowing us to bounce back quicker after this kind of disruption. We're talking days instead of weeks. I'll now cover off some of the key operating metrics, starting with Car Velocity. What we view as the all-in metric of how well the railway is running, it averaged 215 miles per day in Q4. That is 4% versus last year and one of our best Q4s ever.

Derek Taylor: It also builds an operational resilience

Eric: It also builds an operational resiliency, allowing us to bounce back quicker. After this kind of disruption we're talking days instead of weeks.

Derek Taylor: Allowing us to bounce back quicker after this kind of disruption.

Derek Taylor: We're talking days instead of weeks.

Derek Taylor: I'll now cover off some of the key operating metrics.

Eric: I will now cover off some of the key operating metrics.

Pat Whitehead: We are committed to working as a team across all crafts and departments to achieve this vision. Training and Development. Technology and behavior-based safety activities are essential to enhancing our safety. One of the keys supporting better safety outcomes is running a more predictable operation. Predictability is what underpins our velocity and our resilience. TN's Scheduled Operating Model has delivered seven consecutive quarters of operational and service excellence. Now, as we've said, the plane is dynamic and needs to adjust to our traffic. So with volumes rising, we have been refining our train package. For example, we added a train start out of Prince Rupert, and we adjusted the Vancouver train plan to accommodate an uptick in volume on this route. Departing and arriving trains on time, what we call launch and landing, continues to be a key focus of both network operations and field. These are the basics of scheduled railroading.

Derek Taylor: Starting with Car Velocity.

Eric: Starting with car velocity, what we view as the all in metric of how well the <unk> is running.

Derek Taylor: What we view as the all-in metric of how well the railway is running,

Derek Taylor: It averaged 215 miles per day in Q4.

Eric: It averaged 215 miles per day in Q4.

Derek Taylor: That is the 4% versus last year and one of our best Q4s ever.

Eric: That is up 4% versus last year, and one of our best Q4 as ever.

Derek Taylor: Importantly, we maintain this level of velocity right up to the end of the year, even as volumes are ramping up.

Eric: Importantly, we maintain this level of velocity right up to the end of the year, even as volumes were ramping up.

Derek Taylor: Importantly, we maintain this level of velocity right up to the end of the year, even as volumes are ramping up. Through Dwell of 6.9 hours was a 4% improvement over last year. This is even more impressive given our traffic mix had less intermodal volume this year, which we know typically does not sit in a terminal for very long. Continued focus on terminal throughput and collaboration between yards and the operation centers enabled this further improvement. To give you a bit more color on our solid operating performance, Network train speed of 19.6 mph for Q4 is flat versus last year, but it improved 5% on a full year basis to 19.8 mph versus 18.9 in 2022. Doug will talk about the customer's perspective of our service in a minute.

Derek Taylor: Through Dwell of 6.9 hours was a 4% improvement over last year.

Eric: Through dwell of $6 nine hours was a 4% improvement over last year.

Derek Taylor: This is even more impressive given our traffic mix had less intermodal volume this year, which we know typically does not sit in a terminal for very long.

Eric: This is even more impressive given our traffic mix had less intermodal volume this year, which we know typically does not sit in a terminal for very long.

Derek Taylor: Continued focus on terminal throughput and collaboration between yards and the operation centers enabled this further improvement.

Eric: Continued focus on terminal throughput and collaboration between yards in the operation centers enabled this further improvement.

Derek Taylor: To give you a bit more color on our solid operating performance,

Eric: To give you a bit more color on our solid operating performance.

Derek Taylor: Network train speed of 19.6 mph for Q4 is flat versus last year, but improved 5% on a full year basis to 19.8 mph versus 18.9 in 2022.

Eric: Network train speed of $19 six miles per hour for Q4 is flat versus last year, but improved 5% on a full year basis to $19 eight miles per hour versus $18 nine in 2022.

Pat Whitehead: In the fourth quarter, Origin Train performance remained solid and in line with prior quarters at around 90%, right where we need it to be to ensure on-time training. Q4 Destination Train Performance was 70%, and we know there's room for improvement here by continuing to reduce our train meet delays and making timely crew swaps at intermediate stations. I'm pleased with how the network and field teams have managed the complexity of crew scheduling introduced by the new Canadian Work Restaurant. We continue to learn and adjust train schedules to adapt to this new requirement. Now you're going to hear more from Doug on volumes, but my team is getting ready for business. Making sure we have the right resources in place. We have a number of capital projects that will enable short-term operating efficiency and unlock long-term growth across the core mainline from the West Coast to Chicago.

Speaker Change: Doug will talk about the customer's perspective of our service in a minute.

Speaker Change: Doug will talk about the customer's perspective of our service in a minute.

Speaker Change: But the metric I keep a close eye on is our local service commitment performance

Speaker Change: But the metric I keep a close eye on is our local service commitment performance.

Derek Taylor: But the metric I keep a close eye on is our local service commitment performance, or LSVP. This means getting the customers the right cars on the right day and in the right service window. Our fourth-quarter LSCP was nearing an all-time high. I am confident the team will continue to execute and keep it at or above our 90% goal as we go through 2024.

Speaker Change: or LSVP.

Or else VP.

Speaker Change: This means getting the customers the right cars on the right day and in the right service window.

Speaker Change: This means getting the customers the right cars on the right day and in the right service window.

Speaker Change: Our fourth quarter LSCP was nearing all-time high.

Speaker Change: Our fourth quarter LSC P was nearing all time highs.

Speaker Change: I am confident the team will continue to execute and keep it at or above our 90% goal as we go through 2024.

Speaker Change: I am confident the team will continue to execute and keep it at or above our 90% goal as we go through 2024.

Speaker Change: Incremental metric improvement is a continuous journey looking for every gain we can through process and execution.

Derek Taylor: Incremental metric improvement is a continuous journey looking for every gain we can through process and execution. The team is always looking for any types of operational efficiencies in everything they do.

Speaker Change: Incremental metric improvement is a continuous journey looking for every gain we can through process and execution.

Speaker Change: The team is always looking for any types of operational efficiencies in everything they do.

Speaker Change: The team is always looking for any types of operational efficiencies in everything they do.

Derek Taylor: Some of our recent performance, as Ed used to say, has hit the sweet spot for this network. Our focus is to have balance in our metrics, not focus solely on one to the detriment of the other, and always be mindful of cost versus benefit.

Speaker Change: Some of our recent performance, as Ed used to say, has hit the sweet spot for this network.

Some of our recent performance is that used to say has hit the sweet spot for this network.

Speaker Change: Our focus is to have balance in our metrics.

Doug: In 2024, we are investing in additional double track along our Vancouver to Chicago corridors with projects on our Edson sub and on the former EJ&E around Chicago. We continue to invest in rolling stock. The Locomotive Modification Program is well underway, and we are renewing a number of our cars... Our training campuses were very busy in 2023. We qualified 900 plus new conductors to cover attrition and meet the requirements of the work rest changes in Canada.

Speaker Change: Our focus is to have balance in our metrics not focused solely on one to the detriment of the other and always being mindful of cost versus benefits.

Speaker Change: Not focus solely on one to the detriment of the other, and always being mindful of cost versus benefit.

Speaker Change: Now, I will turn it over to Doug.

Derek Taylor: Now, I will turn it over to Doug.

Speaker Change: Now I will turn it over to Doug.

Doug McDonald: Thanks, Derek. Tracy already touched on a transition later this year with Remy, who is out in the field getting his boots dirty and seeing the operations up close.

Doug Macdonald: Thanks, Eric Tracy I already touched on our transition later this year with Remy, who is outlet feels getting us foods dirty and seeing the operations up close I got ahead, it's Derek and Pat and the whole operating team who continue to deliver top notch service. The feedback from customers is that we're continuing bright spot.

Doug McDonald: Thanks, Derek.

Doug McDonald: Tracy already touched on a transition later this year with Remy, who is out in the field getting his boots dirty and seeing the operations up close. I got ahead of Derek and Pat and the whole operating team, who continue to deliver top-notch service. The feedback from customers is that we're continuing to hit the right spot and make adjustments where needed. We continue to deliver core pricing ahead of CN cost inflation. Turn to slide 11 now. Fourth quarter revenues were down 2% versus last year due to lower intermodal storage fees and a lower applicable fuel surcharge. Partially offset by volumes and solid same-store pricing. RTMs, which we view as the best measure of volume, were up 2% in the quarter, driven by record potash movements, strong propane, Canadian met coal exports, and refined petroleum products. We've seen sequential volume improvements since we hit the trough in July, as we said on our last call. P&C volumes were up 12% in the quarter. With the exception of crude oil, all segments were up on a year-over-year basis.

Doug McDonald: I got ahead of Derek and Pat and the whole operating team who continue to deliver top-notch service.

Doug McDonald: The feedback from customers is that we're continuing to hit the right spot and make adjustments where needed.

Doug Macdonald: And make adjustments where needed.

Doug McDonald: We continue to deliver core pricing ahead of CN cost inflation.

Doug Macdonald: We continue to deliver core pricing ahead of CN cost inflation.

Doug McDonald: Turn to slide 11 now.

Doug Macdonald: Turning to slide 11, now fourth quarter revenues were down 2% versus last year on lower intermodal storage fees and a lower applicable fuel surcharge, partially offset by volumes and solid same store pricing.

Doug: And we're now ramping up to align with our growth forecast. So overall, from a resource perspective, we're poised to meet the forecasted demand and grow with our customers. I'll now pass the baton to my good friend Derek to talk about how the team executed in the fourth quarter. Thanks, Pat, and good afternoon, everyone.

Doug McDonald: Fourth quarter revenues were down 2% versus last year on lower intermodal storage fees and a lower applicable fuel surcharge.

Doug McDonald: Partially offset by volumes and solid same-store pricing.

Doug McDonald: RTMs, which we view as the best measure of volume, were up 2% in the quarter, driven by record potash movements, strong propane, Canadian met coal exports, and refined petroleum products.

Doug Macdonald: Our Tms, which we view as the best measure of volume were up 2% in the quarter driven by record potash movements strong propane Canadian met coal exports and refined petroleum products.

Derek Taylor: The team finished the last quarter of 2023 with strong operational momentum, and we started the new year with it very fluid. While we benefited from unseasonably mild weather and no major disruptions in the fourth quarter, I give full credit to the team for remaining focused and continuing to deliver excellent customer service. Finishing with positive momentum was key because, over the last two weeks, we've had more seasonal weather across the network, with frigid temperatures, significant snow, and blizzard conditions. As we've said before, our make-the-plan, run-the-plan approach is not just about driving velocity and reliability. It also builds operational resilience, allowing us to bounce back quicker after this kind of disruption. We're talking days instead of weeks.

Doug McDonald: We've seen sequential volume improvements since we hit the trough in July, as we said on our last call.

Doug Macdonald: We've seen sequential volume improvements since we hit the trial in July as we said on our last call.

Doug McDonald: P&C volumes were up 12% in the quarter,

Doug Macdonald: P&C volumes were up 12% in the quarter with the exception of crude oil all segments were up on a year over year basis.

Doug McDonald: With the exception of crude oil, all segments were up on a year-over-year basis.

Doug McDonald: We are handling record propane exports and in line with the CN-specific growth initiative laid out at Investor Day.

Doug Macdonald: We are handling record propane exports and in line with our CN specific growth initiatives laid out at Investor day.

Doug McDonald: We are handling record propane exports and are in line with the CN-specific growth initiative laid out at Investor Day. We also saw increased gas and diesel shipments out of Alberta and a modest recovery for chemicals and plastics feedstock. In metals and minerals, RTMs were up 3% with positive growth across all segments, including frac sand, scrap steel, and aluminum, except for iron ore, where cars were up, and RTMs were down due to a shift back to more short haul domestic shipping. To finish off on merchandise, Forest Products volumes were down 5%, driven by softer market conditions. For bulk, starting with fertilizers, RTMs were up 85%. We handle incremental domestic and record potash exports using our available capacity in the eastern and southern regions. Coal was up 1%, with Canadian coal up 5% due to strong export met coal from northern BC and U.S. coal down 9% due to an operational issue at one of our customers' mines.

Doug McDonald: We also saw increased gas and diesel shipments out of Alberta and a modest recovery for chemicals and plastics feedstock.

Doug Macdonald: We also saw increased gas and diesel shipments out of Alberta, and a modest recovery for chemicals and plastics feedstocks.

Doug McDonald: Metals and minerals, RTMs were up 3% with positive growth across all segments, including frac sand, scrap steel, and aluminum, except for iron ore where cars were up and RTMs were down due to a shift back to more short haul domestic shipping.

Doug Macdonald: Metals and minerals Rpms were up 3% with positive growth across all segments, including Frac sand scrap steel and aluminum.

Speaker Change: I'll now cover off some of the key operating metrics, starting with car velocity. What we view as the all-in metric of how well the railway is running, it averaged 215 miles per day in Q4.

Doug Macdonald: Step four iron ore, where cars were up and rpms were down due to a shift back to more short haul domestic shipments.

Doug McDonald: To finish off on merchandise, Forest Products volumes were down 5%, driven by softer market conditions.

Speaker Change: That is 4% versus last year and one of our best Q4s ever. Importantly, we maintain this level of velocity right up to the end of the year, even as volumes are ramping up. True dwell of 6.9 hours was a 4% improvement over last year.

Doug Macdonald: Finish off on merchandise forest products volumes were down 5% driven by softer market conditions.

Doug McDonald: For bulk, starting with fertilizers, RTMs were up 85%.

Doug Macdonald: For bulk starting with fertilizers rpms were up 85%.

Doug McDonald: We handle incremental domestic and record potash exports using our available capacity in the eastern and southern regions.

Doug Macdonald: Handle incremental domestic and record potash exports using our available capacity in the eastern and southern regions.

Speaker Change: This is even more impressive given our traffic mix had less intermodal volume this year, which we know typically does not sit in a terminal for very long. Continued focus on terminal throughput and collaboration between YARDS and the operation centers enabled this further improvement, to give you a bit more color on our solid operating performance. Network train speed of 19.6 mph for Q4 is flat versus last year, but it improved 5% on a full year basis to 19.8 mph versus 18.9 in 2022. Doug will talk about the customer's perspective of our service in a minute. But the metric I keep a close eye on is our local service commitment performance, or LSVP. This means getting customers the right cars, on the right day, and in the right service window. Our fourth quarter LSEP was nearing an all-time high.

Doug McDonald: Coal was up 1%, with Canadian coal up 5% due to strong export met coal from northern BC and U.S. coal down 9% due to an operational issue at one of our customers' mines.

Doug Macdonald: Core was up 1% with Canadian coal up 5% due to strong export met coal from northern BC and U S coal down 9% due to our operational issue at one of our customers minds.

Doug McDonald: Canadian grain shippers did not use all of the available supply chain capacity in Q4.

Doug Macdonald: Canadian grain shippers did not use all of the available supply chain capacity in Q4.

Doug McDonald: Canadian grain shippers did not use all of the available supply chain capacity in Q4. Weaker global commodity prices led to a holdback in grain, shifting volumes into H1 2024. Our Q4 U.S. grain exports were tempered by lower demand in China and increased global supply. However, automotive RTMs were up 22%, continuing the strong trend that started in early 2023 with dealer inventory restocking. Turning to intermodal, international was down 11%, mainly due to the lingering effect of the port strike, particularly for Prince Rupert traffic. However, imports at both West Coast ports returned to pre-ILWU strike levels by December. We are encouraged by the sequential uptake in volume in the fourth quarter and with our ongoing discussions with Steamship Line customers. Domestic was down 3%, mainly in our retail segment.

Doug McDonald: Weaker global commodity pricing led to a holdback in grain, shifting volumes into H1 2024.

Doug Macdonald: Weaker global commodity pricing led to a hold back in grain shifting volumes into <unk> 2024.

Doug McDonald: Our Q4 U.S. grain exports were tempered by lower demand in China and increased global supply.

Doug Macdonald: Our Q4 U S grain exports were tempered by lower demand in China and increased global supply.

Doug McDonald: Automotive RTMs were up 22%, continuing the strong trend that started in early 2023 with dealer inventory restocking.

Doug Macdonald: Automotive rpms were up 22% continuing the strong trend that started in early 2023 with dealer inventory restocking.

Speaker Change: I am confident the team will continue to execute and keep it at or above our 90% goal as we go through 2024. Incremental metric improvement is a continuous journey looking for every gain we can through process and execution. The team is always looking for any types of operational efficiencies in everything they do.

Doug McDonald: Turning to intermodal, international was down 11%, mainly due to the lingering effect of the port strike, particularly for Prince Rupert traffic.

Doug Macdonald: Turning to intermodal international was down 11%, mainly due to the lingering effect of the port strike, particularly for Prince Rupert traffic.

Doug McDonald: However, imports at both West Coast ports return to pre-ILWU strike levels by December.

Doug Macdonald: However, imports at both West Coast Port returned to pre <unk> used strike levels by December we are encouraged by the sequential uptick in volume in the fourth quarter and with our ongoing discussions with steamship line customers.

Speaker Change: Some of our recent performance, as Ed used to say, has hit the sweet spot for this network. Our focus is to have balance in our metrics, not focused solely on one to the detriment of the other, and always being mindful of cost versus benefit. Now, I will turn it over to Doug. Thanks, Derek.

Doug McDonald: We are encouraged by the sequential uptake in volume in the fourth quarter and with our ongoing discussions with Steamship Line customers.

Doug McDonald: Domestic was down 3% mainly in our retail segment. Our efforts in the CN-specific initiatives like Falcon and EMP produced volumes, mitigating some of the overall market software.

Doug Macdonald: Domestic was down 3% mainly in our retail segment our efforts in the CN specific initiatives like Falcon and E&P produced volumes mitigating some of the overall market softness.

Doug McDonald: Our efforts in the CN-specific initiatives like Falcon and EMP have delivered volumes, mitigating some of the overall market software. Moving to the outlook on slide 12, as Tracy said, we will benefit from a more favorable economy, but more importantly, our CM-specific growth initiatives are starting to deliver. We see lumber and panels coming back gradually in 2024. There is optimism in the economy about interest rates coming down, which should help stimulate new construction permits, and there is still a shortage of approximately 6 million homes in the U.S. We project more frac stands and LPG shipments due to increased drilling in northeast BC, and this will be supported by the new siding near Fort St. John as mentioned in our Investor Day initiatives.

Doug: Tracy already touched on the transition later this year with Remy, who is out in the field getting his boots dirty and seeing the operations up close. I gotta hand it to Derek and Pat and the whole operating team, who continue to deliver top-notch service. The feedback from customers is that we're continuing to hit the right spot and make adjustments where needed. We continue to deliver core pricing ahead of CN cost inflation. Turn to slide 11 now.

Doug McDonald: Moving to the outlook on slide 12,

Doug Macdonald: Moving to the outlook on slide 12 as.

Doug McDonald: As Tracy said, we will benefit from a more favorable economy, but more importantly, our CM-specific growth initiatives are starting to deliver.

Speaker Change: As Tracy said, we will benefit from a more favorable economy, but more importantly, our CN specific growth initiatives are starting to deliver.

Doug McDonald: We see lumber and panels coming back gradually in 2024. There is optimism in the economy about interest rates coming down, which should help stimulate new construction permits, and there is still a shortage of approximately 6 million homes in the U.S.

Speaker Change: We see lumber and panels coming back gradually in 2024, there is optimism in the economy about interest rates coming down which should help stimulate new constructive construction permits and there is still a shortage of approximately 6 million homes in the U S.

Doug: Fourth quarter revenues were down 2% versus last year on lower intermodal storage fees and a lower applicable fuel surcharge, partially offset by volumes and solid same-store prices. RTMs, which we view as the best measure of volume, were up 2% in the quarter, driven by record potash movements, strong propane, Canadian-met coal exports, and refined petroleum products. We've seen sequential volume improvements since we hit the trow in July, as we said on our last call. P&C volumes were up 12% in the quarter. With the exception of crude oil, all segments were up on a year-over-year basis.

Doug McDonald: We project more frac stands and LPG shipments due to increased drilling in northeast BC and this will be supported by the new siding near Fort St. John as mentioned in our Investor Day initiatives.

We project more frac sand and LPG shipments due to increased drilling in northeast BC and this will be supported by the new siding near Fort St. John as mentioned in our Investor day initiatives.

Doug McDonald: In 2023, crude shipments were at an almost five-year low, but given the forecast for Canadian crude production, along with the delay in the startup of the Trans Mountain Pipeline, we see opportunities to handle incremental crude business in 2024.

Doug McDonald: In 2023, crude shipments were at an almost five-year low, but given the forecast for Canadian crude production, along with the delay in the startup of the Trans Mountain Pipeline, we see opportunities to handle incremental crude business in 2024. The CN Fuels Facility in our McMillan Yard will begin wet commissioning this month and will start producing Carlos and ramping up through Q1. We have now sold out capacity in phase two of this project, and construction is underway. For potash exports, we expect to see a year-over-year headwind starting in Q1 related to the business we picked up in 2023 while the Portland terminal was down.

In 2023 crude shipments were at an almost five year low, but driven given the forecast for Canadian crude production along with the delay in the startup of the Trans Mountain pipeline, we see opportunities to handle incremental crude business in 2024.

Doug McDonald: CN Fuels Facility in our McMillan Yard will begin wet commissioning this month and will start producing Carlos and ramping up through Q1.

Speaker Change: CN fuels facility in our Macmillan yard will begin wet commissioning this month, and we will start producing carloads and ramping up through Q1.

Doug: We are handling record propane exports and are in line with the CN-specific growth initiative laid out at Investor Day. We also saw increased gas and diesel shipments out of Alberta and a modest recovery for chemicals and plastics feedstock. In Metals and Minerals, RTMs were up 3% with positive growth across all segments, including frac, sand, scrap, steel, and aluminum, except for iron ore, where cars were up, and RTMs were down due to a shift back to more short-haul domestic shipping. To finish off on merchandise, Forest Products volumes were down 5% driven by softer market conditions.

Doug McDonald: We have now sold out capacity in phase two of this project and construction is underway.

Speaker Change: We have now sold out capacity in phase two of this project and construction is underway.

Doug McDonald: For potash exports, we expect to see a year-over-year headwind starting in Q1 related to the business we picked up in 2023 while the Portland terminal was down.

Speaker Change: For potash exports, we expect to see a year over year headwind starting in Q1 related to the business. We picked up in 2023, while the Portland terminal was down.

Doug McDonald: We continue to get strong rateable volumes with our premium service and utilizing our available capacity in Eastern Canada.

Speaker Change: We continue to get strong ratable volumes with our premium service and utilizing our available capacity in eastern Canada.

Doug McDonald: We continue to get strong rateable volumes with our premium service and utilize our available capacity in Eastern Canada. For Canadian coal, we have met coal production capacity coming online in the back half of the year related to the new Valerie mine and the Quintet restart in Q4. As mentioned earlier, this year's Canadian harvest is down versus last year, but we are expecting a normal crop for the 2024-25 crop year and a better Q4 than what we just saw. Recall that this year's inflation index for regulated grain movement is 12%, and we will receive our 2024-2025 pricing determination in the spring. U.S. Green will benefit from the acquisition of the IANR pending SCB approval, which we anticipate being completed sometime by next fall.

Doug McDonald: In Canadian coal, we have met coal production capacity coming online in the back half of the year related to the new Valerie mine and the Quintet restart in Q4.

Speaker Change: In Canadian coal, we have met coal production capacity coming online in the back half of the year related to the new Valerie mine and the quintet restart in Q4.

Doug: For bulk, starting with fertilizers, RTMs were up 85%. We handle incremental domestic and record potash exports using our available capacity in the eastern and southern regions. Coal was up 1%, with Canadian coal up 5% due to strong export MEC coal from northern BC and U.S. coal down 9% due to an operational issue at one of our customers' mines. Canadian grain shippers did not use all of the available supply chain capacity in Q4.

Doug McDonald: As mentioned earlier, this year's Canadian harvest is down versus last year, but we are expecting a normal crop for the 2024-25 crop year and a better Q4 than what we just saw.

Speaker Change: As mentioned earlier this year's Canadian harvest is down versus last year, but we're expecting a normal crop or the 'twenty 'twenty four 'twenty five crop year and a better Q4 than what we just saw.

Doug McDonald: Recall that this year's inflation index for regulated grain movement is 12% and will receive our 2024-2025 pricing determination in the spring.

Speaker Change: Recall that this year's inflation index for regulated grain movement is 12% and we will receive our 'twenty 'twenty four 'twenty five pricing determination in the spring.

Doug McDonald: U.S. Green will benefit from the acquisition of the IANR pending SCB approval, which we anticipate being completed sometime by next fall.

Speaker Change: U S Green will benefit from the acquisition of the INR pending STB approval, which we anticipate being completed from time by next fall.

Doug: Weaker global commodity prices led to a holdback in grain, shifting volumes into H1 2024. However, our Q4 U.S. grain exports were tempered by lower demand in China and increased global supply. Automotive RTMs were up 22%, continuing the strong trend that started in early 2023 with dealer inventory restocking. Turning to intermodal, international is down 11% mainly due to the lingering effect of the pork strike, particularly for Prince Rupert traffic. However, imports from both West Coast ports return to pre-ILWU strike levels by December. We are encouraged by the sequential uptick in volume in the fourth quarter and with our ongoing discussions with Steamship Line customers. Domestic was down 3%, mainly in our retail segment.

Doug McDonald: We are projecting automotive demand to remain strong and volumes roughly on par with 2023, even with some outages related to retooling for EV production.

Doug McDonald: We are projecting automotive demand to remain strong and volumes roughly on par with 2023, even with some outages related to retooling for EV production. For International Intermodal, we continue to work on filling up Prince Rupert and building on recent momentum in Vancouver. We also expect growth in our southern ports in the Gulf driven by new service offerings into the Midwest. Overall, we see a gradual return to pre-COVID volume levels over the next few quarters. Domestic growth will come from our new interline partnerships, specifically targeting truck volume. We have capacity on the network, in our terminals, and with our fleet to grow volumes as the economy improves. In summary, we've rotated through some of the headwinds that challenged us in 2023. We have good momentum, CM's customer service is excellent, and our CM-specific growth projects are delivering.

Speaker Change: We are projecting automotive demand to remain strong and volume is roughly on par with 2023, even with some outages related to retooling for EV production.

Doug McDonald: For International Intermodal, we continue to work on filling up Prince Rupert and building on recent momentum in Vancouver.

Speaker Change: For International Intermodal, we continue to work on filling up Prince Rupert and building on recent momentum in Vancouver.

Doug McDonald: We also expect growth in our southern ports in the Gulf driven by new service offerings into the Midwest.

Speaker Change: We also expect growth in our southern ports in the Gulf driven by our new service offerings into the Midwest.

Doug McDonald: Overall, we see a gradual return to pre-COVID volume levels over the next few quarters.

Speaker Change: Overall, we see a gradual return to pre COVID-19 volume levels over the next few quarters.

Doug McDonald: Domestic growth will come from our new interline partnerships, specifically targeting truck volume.

Speaker Change: Domestic growth will come from our new interline partnerships, specifically targeting truck volumes.

Doug McDonald: We have capacity on the network, in our terminals, and with our fleet to grow volumes as the economy improves.

We have capacity on the network in our terminals and with our fleet to grow volumes as the economy improves.

Doug McDonald: In summary, we've rotated through some of the headwinds which challenged us in 2023.

Speaker Change: In summary, we've rotated through some of the headwinds which challenged us in 2023.

Doug: Our efforts in the CM-specific initiatives, like Falcon and EMP, produced volumes, mitigating some of the overall market softness. Moving to the outlook on slide 12, As Tracy said, we will benefit from a more favorable economy, but more importantly, our CM-specific growth initiatives are starting to deliver. We see lumber and panels coming back gradually in 2024. There is optimism in the economy about interest rates coming down, which should help stimulate new construction permits. And there is still a shortage of approximately 6 million homes in the US.

Doug McDonald: We have good momentum, CM's customer service is excellent, and our CM-specific growth projects are delivering.

Speaker Change: We have good momentum.

Speaker Change: Customer service is excellent and our CN specific growth projects are delivering.

Speaker Change: With that, I'll pass it over to Chris Lang and go through the numbers.

With that, I'll pass it over to Chris Lang and go through the numbers. Merci beaucoup Doug. J'ai le plaisir de parler de nos résultats du quatrième trimestre.

Speaker Change: With that I'll pass it over to Jeff Lang and go through the numbers.

Chris Wetherbee: Merci beaucoup Doug. J'ai le plaisir de parler de nos résultats du quatrième temps.

Jeff Lang: Merci Beaucoup Doug.

Jeff Lang: This is a little notice was does get the NPS.

Doug McDonald: Turning to slide 14, volumes in terms of RTMs were higher by 2% on a year-over-year basis while revenues were down roughly

Jeff Lang: Turning to slide 14 volumes in terms of our Tms were higher by 2% on a year over year basis, while revenues were down roughly 2%.

Turning to slide 14, volumes in terms of RTMs were higher by 2% on a year-over-year basis while revenues were down roughly. We delivered operating income of around $1.8 billion, 5% lower than last year, with an operating ratio of 59.3%, 140 basis points higher than last year. We had two non-recurring items below the line. During the quarter, we implemented a tax reorganization that produced around $700 million of one-timing. As a consequence of this, our overall tax status, both in Canada and in the U.S., has not materially changed, and our effective tax rate for 2024 will be approximately 25%.

Doug McDonald: We delivered operating income of around $1.8 billion, 5% lower than last year, with an operating ratio of 59.3%, 140 basis points higher than last year.

Jeff Lang: We delivered operating income of around $1 8 billion, 5% lower than last year with an operating ratio of 59, 3%, a 140 basis points higher than last year.

Doug: We project more crack stands and LPG shipments due to increased drilling in Northeast D.C., and this will be supported by the new siting near Fort St. John, as mentioned in our Investor Day initiatives. In 2023, crude shipments were at an almost five-year low, but given the forecast for Canadian crude production, along with the delay in the startup of the Trans Mountain Pipeline, we see opportunities to handle incremental crude business in 2024. GN Fuels facility in our McMillan yard will begin wet commissioning this month and will start producing carloads and ramping up through Q1.

Doug McDonald: We had two non-recurring items below the line.

Jeff Lang: We add two nonrecurring items below the line.

Doug McDonald: During the quarter, we implemented a tax reorganization that produced around $700 million of one-timing.

Jeff Lang: During the quarter, we implemented a tax reorganization that produced around $700 million of one time income.

Doug McDonald: As a consequence of this, our overall tax status, both in Canada and in the U.S., has not materially changed, and our effective tax rate for 2024 will be approximately 25%.

Jeff Lang: As a consequence of this our overall tax status, both in Canada and in the U S has not materially changed and our effective tax rate for 2024 will be approximately 25%.

Doug McDonald: So about 50 basis points higher than in 2023.

Jeff Lang: So about 50 basis points higher than in 2023.

Doug McDonald: Cash taxes will be around 80% of our overall effective tax, which is in line with prior years.

Jeff Lang: Cash taxes will be around 80% of our overall effective tax which is in line with prior years.

Doug: We have now sold out capacity in Phase 2 of this project, and construction is underway. For Potash Exports, we expect to see a year-over-year headwind starting in Q1 related to the business we picked up in 2023 while the Portland terminal was down. We continue to get strong rateable volumes with our premium service and utilize our available capacity in Eastern Canada. For Canadian coal, we have net coal production capacity coming online in the back half of the year related to the new Valerie mine and the Quintet restart in Q4. As mentioned earlier, this year's Canadian harvest is down versus last year, but we are expecting a normal crop for the 2024-25 crop year and a better Q4 than what we just saw. We call this year's inflation index for regulated grain movement is 12%, and we'll receive our 2024-2025 pricing determination in the spring. U.S. Green will benefit from the acquisition of the IANR pending STB approval, which we anticipate being completed sometime by next fall.

So, about 50 basis points higher than in 2023. Cash taxes will be around 80% of our overall effective tax, which is in line with prior years.

Doug McDonald: We also monetize a surplus right-of-way in Ontario amounting to approximately $130 million.

Jeff Lang: We also monetize a surplus right of way in Ontario, amounting to approximately $130 million.

Doug McDonald: On a reported basis, EPS was $3.29, up 57% versus last year.

Jeff Lang: On a reported basis EPS was $3 29 up 57% versus last year.

We also monetize a surplus right-of-way in Ontario amounting to approximately $130 million. On a reported basis, EPS was $3.29, up 57% versus last year. However... Excluding these one-time items, adjusted EPS was $2.02, down 4% year-over-year. In terms of expenses, labor was 12% higher versus last year, driven by a 5% higher average headcount and a general wage increase. Fuel expense was more than $100 million lower than in the same period last year, mostly due to a 17% decrease in fuel prices. Turning to our full-year results, on slide 15, we delivered an adjusted EPS of 2% lower than last year, which is aligned with our revised guidance.

Doug McDonald: However...

Jeff Lang: However, excluding these onetime items adjusted EPS was $2 <unk> down.

Doug McDonald: Excluding these one-time items, adjusted EPS was $2.02, down 4% year-over-year.

Jeff Lang: Down 4% year over year.

Doug McDonald: In terms of expenses, labor was 12% higher versus last year, driven by 5% higher average headcount and general wage increase.

Jeff Lang: In terms of expenses labor was 12% higher versus last year, driven by 5% higher average head count and general wage increases.

Doug McDonald: Fuel expense was more than $100 million lower than in the same period last year, mostly due to a 17% decrease in fuel prices.

Jeff Lang: Fuel expense was more than $100 million lower than in the same period last year, mostly due to a 17% decrease in fuel prices.

Doug McDonald: Turning to our full-year results on slide 15, we delivered an adjusted EPS of 2% lower than last year, which is aligned with our revised guidance.

Jeff Lang: Turning to our full year results on slide 15, we delivered an adjusted EPS of 2% lower than last year, which is in line with our revised guidance.

Doug McDonald: Our full year operating ratio of 60.8% was up 90 basis point versus last year on an adjusted basis.

Jeff Lang: Our full year operating ratio of 68% was up 90 basis points versus last year on an adjusted basis. Despite significant disruptions in Q2 and Q3 from forest fires floods.

Our full year operating ratio of 60.8% was up 90 basis points versus last year on an adjusted basis, despite significant disruptions in Q2 and Q3, from forest fires, flooding, and the West Coast port strike that negatively impacted EPS by roughly 17 cents.

Doug McDonald: Despite significant disruptions in Q2 and Q3, from forest fires,

Doug McDonald: Flooding and the West Coast port strike that negatively impacted EPS by roughly 17 cents.

Jeff Lang: Flooding and the West coast Port strike negatively impacted EPS by roughly 17.

Doug McDonald: We generated close to $3.9 billion of free cash flow for the year.

Jeff Lang: We generated close to $3 $9 billion of free cash flow for the year.

Doug: We are projecting automotive demand to remain strong, and volume is roughly on par with 2023, even with some outages related to retooling for EV production. For International Intermodal, we continue to work on filling up Prince Rupert and building on recent momentum in Vancouver. We also expect growth in our southern ports in the Gulf, driven by new service offerings into the Midwest. Overall, we see a gradual return to pre-COVID volume levels over the next few quarters. Domestic growth will come from our new interline partnerships, specifically targeting truck volume.

Doug McDonald: Discipline capital expenditures of $3.1 billion, excluding capital recoverable from customers, represents around 18.5% of revenue.

Jeff Lang: Disciplined capital expenditures of $3 1 billion, excluding capital recoverable from customers represents around 18, 5% of revenues.

We generated close to $3.9 billion of free cash flow for the year.

Discipline capital expenditures of $3.1 billion, excluding capital recoverable from customers, represent around 18.5% of revenue. We are investing in our rail car fleet and continue to invest steadily in track maintenance, as well as capacity expansion. Time with our customers' volumes and always with a view to capital efficiency. ROIC, which is highly sensitive to the income numerator, came in slightly under 15% in 1993. Moving to slide 16, let me provide some visibility to 2024. We believe the economy for the year will be more constructive than in 2023, with slightly positive industrial production growth and interest rates stabilizing. In addition, consensus opinion on the risk of an economic recession appears to have diminished. However, the environment remains quite volatile with continued monetary policy and geopolitics. Weak sectors, particularly intermodal international and forest products, continue to improve sequentially and should stabilize to pre-pandemic levels.

Doug McDonald: We are investing in our rail car fleet and continue to invest steadily in track maintenance,

Jeff Lang: We are investing in our railcar fleet and continue to invest steadily in track maintenance as well as capacity expansions time with our customers volumes and always with a view to capital efficiency.

Doug McDonald: as well as capacity expansion.

Doug McDonald: Time with our customers volumes and always with a view to capital efficiency.

Doug McDonald: ROIC, which is highly sensitive to the income numerator, came in slightly under 15% in 1993.

Jeff Lang: Our ROIC, which is highly sensitive to the income numerator came in slightly under 15% and three.

Doug McDonald: Moving to slide 16, let me provide some visibility to 2024.

Jeff Lang: Moving to slide 16, let me provide some visibility to 2024.

Doug McDonald: We believe the economy for the year will be more constructive than in 2023, with slightly positive industrial production growth and interest rates stabilizing.

Doug: We have capacity on the network, in our terminals, and with our fleet to grow volumes as the economy improves. In summary, we've rotated through some of the headwinds that challenged us in 2023. We have good momentum. CN's customer service is excellent, and our CN-specific growth projects are delivering. With that, I'll pass it over to Shislaine and go through the numbers. Merci beaucoup, Doug. J'ai le plaisir de parler des résultats du 4e temps.

Jeff Lang: We believe the economy for the year will be more constructive than in 2023 with slightly positive industrial production growth and interest rates stabilizing.

Doug McDonald: In addition, consensus opinion on the risk of an economic recession appears to have diminished.

Jeff Lang: In addition consensus opinion on the risk of an economic recession appears to have diminished.

Doug McDonald: However,

Jeff Lang: However, the.

Doug McDonald: The environment remains quite volatile with continued monetary policy and geopolitical

Jeff Lang: The environment remains quite volatile with continued monetary policy and geopolitical risks.

Doug McDonald: Weak sectors, particularly intermodal international and forest products, continue to improve sequentially and should stabilize to pre-pandemic levels.

Jeff Lang: We expected, particularly intermodal international and forest products continued to improve sequentially and to stabilize to pre pandemic levels.

Doug McDonald: We assume that Canadian grain will come back to a three-year average in the second half of the year.

Jeff Lang: We assume the Canadian grain will come back to a three year average in the second half of the year.

Doug McDonald: With this in mind, and along with our CM-specific growth initiatives, we expect volumes in terms of RTMs to be in the mid-single-digit range.

Shislaine: Turning to slide 14, volumes in terms of RTMs were higher by 2% on a year-over-year basis, while revenues were down roughly 2%. We delivered operating income of around $1.8 billion, 5% lower than last year, with an operating ratio of 59.3%, 140 basis points higher than last year. We have two non-recurring items below the line. During the quarter, we implemented a tax reorganization that produced around $700 million of one-time charges. As a consequence of this, our overall tax status, both in Canada and in the U.S., has not materially changed, and our effective tax rate for 2024 will be approximately 25%. So, about 50 basis points higher than in 2023. Cash taxes will be around 80% of our overall effective tax, which is in line with prior years.

Jeff Lang: With this in mind and along with our CN specific growth initiatives, we expect volumes in terms of rpms to be in the mid single digit range.

We assume that Canadian grain will come back to a three-year average in the second half of the year. With this in mind, and along with our CM-specific growth initiatives, we expect volumes in terms of RTMs to be in the mid-single-digit range. As volumes come back, we should see the positive impact of our operating leverage, particularly in the merchandise business, where we currently have capacity on our trains and can bring in volumes at low incremental costs.

Doug McDonald: As volumes come back, we should see the positive impact of our operating leverage, particularly with merchandise business, where we currently have capacity on our trains and can bring in on volumes at low incremental costs.

Jeff Lang: As volumes come back we should see the positive impact of our operating leverage, particularly with merchandise business, where we currently have capacity on our trains and can bring them on volumes at low incremental cost.

Doug McDonald: However, we have roughly $200 million in cost headwinds, mostly related to depreciation,

Jeff Lang: However, we have roughly $200 million.

Jeff Lang: Cost headwinds, mostly related to depreciation and incentive compensation and pension.

Doug McDonald: Incentive Compensation and Pension.

Jeff Lang: We assume foreign exchange for the year of around 75, and WTO of 70 to 80 million U S dollar per barrel.

Doug McDonald: We assume foreign exchange for the year of around 75 cents and WTI of 70 to 80 U.S. dollars per barrel.

Doug McDonald: In this environment, we expect to deliver about 10% EPS growth in 2024 versus 2023.

Jeff Lang: In this environment, we expect to deliver about 10% EPS growth in 2024 versus 2023.

However, we have roughly $200 million in cost headwinds, mostly related to depreciation, Incentive Compensation, and pension.

Doug McDonald: Our CapEx for 2024 will be around $3.5 billion net of customer contributions, and we expect ROIC to be 15% to 17% within the targeted range provided at our investor desk.

Jeff Lang: Our capex for 2024 will be around $3 5 billion net of customer contributions and we expect ROIC to be 15% to 17% within the targeted range provided at our Investor day.

We assume foreign exchange for the year of around 75 cents and WTI of 70 to 80 U.S. dollars per barrel. In this environment, we expect to deliver about 10% EPS growth in 2024 versus 2023. Our CapEx for 2024 will be around $3.5 billion net of customer contributions, and we expect ROIC to be 15% to 17% within the targeted range provided at our investor desk. In terms of shareholder distributions, we are pleased to announce that our Board of Directors approved a 7% dividend increase for 2024. This represents the 28th consecutive year of dividend increases since the 1995 IPO. The Board also approved a new share buyback program of up to 32 million shares for an amount in the range of $4 billion through a normal course issuer bid from February 1, 2024 to January 31, 2025, in line with our previous program's budget before we opportunistically increased it last October. In conclusion, let me reiterate a few points. We have delivered seven consecutive quarters of exceptional operating performance.

Shislaine: We also monetize a surplus right-of-way in Ontario amounting to approximately $130 million. On a reported basis, EPS was $3.29, up 57% versus last year. However, excluding these one-time items, Adjusted EPS was $2.02, down 4% year-over-year. In terms of expenses, labor was 12% higher versus last year, driven by a 5% higher average headcount and general wage increases. Fuel expense was more than $100 million lower than in the same period last year, mostly due to a 17% decrease in fuel prices.

Doug McDonald: In terms of shareholder distributions, we are pleased to announce that our Board of Directors approved a 7% dividend increase for 2024.

Jeff Lang: In terms of shareholder distributions, we're pleased to announce that our board of directors approved a 7% dividend increase for 2024.

Doug McDonald: This represents the 28th consecutive year of dividend increase since the 1995 IPO.

This represents a 28th consecutive year of dividend increase since the $19 95 IPO.

Doug McDonald: The Board also approved a new share buyback program of up to 32 million shares for an amount in the range of $4 billion through a normal course issuer bid from February 1, 2024 to January 31, 2025, in line with our previous program's budget before we opportunistically increased it last October.

Jeff Lang: The board also approved a new share buyback program of up to 32 million shares for an amount in the range of $4 billion.

Jeff Lang: Through our normal course issuer bid from February one 2024 to January 31, 2025 in line with our previous programs budget before we Opportunistically increased it last October.

Shislaine: Turning to our full-year results, on slide 15, we delivered an adjusted EPS of 2% lower than last year, which is aligned with our revised guidance. Our full-year operating ratio of 60.8% was up 90 basis points versus last year on an adjusted basis. Despite significant disruptions in Q2 and Q3, from forest fires, flooding, and the West Coast Forest Strike that negatively impacted EPS by roughly $0.17, Enron generated close to 3.9 billion dollars of free cash flow for the year. Disciplined capital expenditures of $3.1 billion, excluding capital recoverable from customers, represents around 18.5% of revenue. We are investing in our rail car fleet and continue to invest steadily in TrackMain, as well as Capacity Expansion, in line with our customers' volumes and always with a view to capital efficiency. ROIC, which is highly sensitive to the income numerator, came in slightly under 15% in 2003.

Doug McDonald: In conclusion, let me reiterate a few points.

In conclusion, let me reiterate a few points we.

Doug McDonald: We have delivered seven consecutive quarters of exceptional operating performance.

We have delivered seven consecutive quarters of exceptional operating performance.

Doug McDonald: We are providing excellent customer service.

Jeff Lang: While providing excellent customer service.

Doug McDonald: We have managed through significant external challenges to deliver strong relative financial performance.

Jeff Lang: We have managed through significant external challenges to deliver strong relative financial performance.

Doug McDonald: Although we remain mindful of ongoing economic and geopolitical volatility, we are calling for some recovery in 2024.

Jeff Lang: Although we remain mindful of ongoing economic and geopolitical volatility we are calling for some recovery in 2024.

Doug McDonald: In particular, we expect Intermodal International to return to pre-COVID levels and Forrest products to gradually ramp up over the next 18 months.

Jeff Lang: In particular, we expect intermodal international to return to pre Covid levels and forest products to gradually ramp up over the next 18 months.

Doug McDonald: Our pivot to growth is underway, and assuming a positive economic backdrop, we are guiding for EPS growth of around 10% versus 2023, underpinned by mid-single-digit volume growth.

Jeff Lang: Our pivot to growth is underway and assuming a positive economic backdrop, we are guiding for EPS growth of around 10% versus 2023 underpinned by mid single digit volume growth.

Doug McDonald: We have a strong balance sheet and we plan on using that financial flexibility to take advantage of our opportunities.

Jeff Lang: We have a strong balance sheet and we plan on using the financial flexibility to take advantage of opportunities.

We are providing excellent customer service, and we have managed through significant external challenges to deliver strong relative financial performance.

Doug McDonald: Let me pass it back to Tracy.

Jeff Lang: Let me pass it back to Tracy.

Tracy Robinson: Thanks, Suzanne. Well said. Operator will now go to questions.

Tracy Robinson: Zion will offset operator, we will now go to questions.

Speaker Change: Thank you. We will now begin the question and answer session. As previously mentioned, we ask that you kindly limit yourselves to one question.

Speaker Change #100: Thank you we will now begin the question and answer session. As previously mentioned, we ask that you kindly limit yourself to one question.

Although we remain mindful of ongoing economic and geopolitical volatility, we are calling for some recovery in 2024. In particular, we expect Intermodal International to return to pre-COVID levels and Forrest products to gradually ramp up over the next 18 months. Our pivot to growth is underway, and assuming a positive economic backdrop, we are guiding for EPS growth of around 10% versus 2023, underpinned by mid-single-digit volume growth. We have a strong balance sheet, and we plan on using that financial flexibility to take advantage of our opportunities.

Shislaine: Moving to slide 16, let me provide some visibility to 2024. We believe the economy for the year will be more constructive than in 2023, with slightly positive industrial production growth and interest rates stabilizing. In addition, the consensus opinion on the risk of an economic recession appears to have diminished. However, the environment remains quite volatile with continued monetary policy and geopolitical risks.

Speaker Change: Our first question will come from Chris Wetherbee from Citi. Please go ahead, your line is open.

Speaker Change #100: Our first question will come from Chris Wetherbee from Citi. Please go ahead. Your line is open.

Chris Wetherbee: Hey, thanks. Good afternoon. Maybe starting on the 24 guide, if we could maybe unpack some of the moving parts a little bit. So, RTM guide, mid-single digits, and then I think, Ghislaine, you talked about maybe $200 million of some cost headwinds there. You have about 5% coming below the line, so I just want to make sure I understand sort of the operating leverage of the business. Is it mostly offset by the 200, or maybe we can kind of think about how you should be able to generate incremental margins on that mid-single digit RTM guide?

Hey, Thanks, good afternoon.

Chris Wetherbee: Maybe starting on the 24 guide if we could maybe unpack some of the moving parts a little bit so.

Chris Wetherbee: Artyom guide mid single digits.

Chris Wetherbee: And then I think just when you talked about maybe $200 million of some cost headwinds there.

Chris Wetherbee: About 5% coming below the lines I, just want to make sure I understand sort of the operating leverage of the business is it mostly offset by the 200 or maybe we can kind of think about how you should be able to generate incremental margins on that mid single digit RPM growth.

Shislaine: Weak sectors, particularly intermodal international and forest products, continue to improve sequentially and should stabilize to pre-pandemic levels. We assume that Canadian grain will come back to a three-year average in the second half of the year. With this in mind, and along with our CM-specific growth initiatives, we expect volumes in terms of RTMs to be in the mid-single-digit range. As volumes come back, we should see the positive impact of our operating leverage, particularly in the merchandise business, where we currently have capacity on our trains and can bring in volumes at low incremental costs. However, we have roughly $200 million in cost headwinds, mostly related to depreciation, Incentive Compensation, and Ben Shapiro.

Chris Wetherbee: Okay, Chris, this is Tracy. Let me take a shot at this. So, you know, we've got a forecast of 10% EPS, and on volume, as you've noted, you know, the forecast assumes, you know, a gentle kind of recovery economically as we go through the year, but it also assumes those customer-specific growth initiatives that you heard Doug talk about. On margin, as volumes come back, we should see the positive impact of our operating leverage. So, as volumes went down, we, you know, we saw it go down. As volumes come back up, we're going to lift, especially in the merchandise business where we currently have to pass.

Chris Wetherbee: Okay. Chris This is Jason let me take a shot at that so and we've got a forecast of 10% EPS and then volume as you've noted.

Tracy: Let me pass it back to Tracy.

Tracy: Thanks, Suzanne.

Tracy: Well said,

Operator: Operator. I will now go to questions. Thank you.

Jason: Forecast assumes.

Jason: What kind of recovery economically as we go through the year, but it also assumes.

Operator: We will now begin the question and answer session. As previously mentioned, we ask that you kindly limit yourselves to one question.

Jason: Those customer specific growth initiatives that you've heard Doug talk about on margin.

Chris Wetherbee: Our first question will come from Chris Wetherbee from Citi.

Jason: As volumes come back we should see the positive impact of our operating metrics as.

Jason: As volumes went down we we saw it go down and volumes come back up are going to lift, especially in the merchandise business, where we currently have capacity.

Chris Wetherbee: Please go ahead; your line is open.

Chris Wetherbee: Hey, thanks.

Tracy Robinson: on our trains and of course the pricing environment.

Chris Wetherbee: Good afternoon,

Jason: On our training and of course in the pricing environment.

Tracy: Maybe, starting on the 24 guide, we could maybe unpack some of the moving parts a little bit.

Tracy Robinson: You know, as you've watched us over the last 18 months, we continue to both deliver and we continue to expect pricing above rail inflation. So that's all positive news. We do have the headwinds that you just talked about, but that's going to be offset to the extent that we'll drive the 10% to the bottom.

Inflections over the last 18 months, we continue to both deliver and we continue to expect pricing above rail inflation. So that's all positive news, we do have the headwinds <unk> talked about but.

Chris Wetherbee: So, RTM guide, mid-single digits, and then I think, Ghislaine, you talked about maybe $200 million of some cost headwinds there.

Jason: That's going to be offset to the extent that will drive the 10% to the bottom line that makes sense.

Tracy: You have about 5% coming below the line, so I just want to make sure I understand sort of the operating leverage of the business.

Shislaine: We assume foreign exchange for the year of around $0.75 and WTI of $70-80 USD per barrel. In this environment, we expect to deliver about 10% EPS growth in 2024 versus 2023. Our CapEx for 2024 will be around $3.5 billion net of customer contributions, and we expect ROIC to be 15% to 17% within the targeted range provided by our investors. In terms of shareholder distributions, we are pleased to announce that our Board of Directors approved a 7% dividend increase for 2024. This represents the 28th consecutive year of dividend increases since the 1995 IPC.

Speaker Change: Does that make sense?

Speaker Change: It does. So just a way to think about it is there still is the sort of normal operating leverage on the revenue growth, mostly offset by those incremental costs. That kind of gets you to, you know, kind of core growth before the buyback in line with RTM growth. Is that roughly the right way to think about it? Yeah, you got it pretty much. Thanks. Next? Okay, thank you.

Jason: It does so just the way to think about it is there still is sort of normal operating leverage on the revenue growth, mostly offset by the by those incremental costs that could that kind of gets you to.

Chris Wetherbee: Is it mostly offset by the 200, or maybe we can kind of think about how you should be able to generate incremental margins on that mid-single digit RTM guide?

Jason: Kind of core growth before the buyback in line with RPM growth is that roughly the right way to think about it.

Tracy: Okay, Chris, this is Tracy. Let me take a shot at this. So, you know, we've got a forecast of 10% EPS, and on volume, as you've noted, the forecast assumes, you know, a gentle kind of recovery economically as we go through the year, but it also assumes those customer-specific growth initiatives that you heard Doug talk about.

Speaker Change #101: Yes, you got it pretty much.

Speaker Change #102: Next okay. Thank you.

Speaker Change: Our next question comes from Cherilyn Radbourne from TD Cowan. Please go ahead, your line is open.

Speaker Change #103: Our next question comes from Cherilyn Radbourne from TD Cowen. Please go ahead. Your line is open.

Cherilyn Radbourne: Thanks very much. Good afternoon. I just wanted to dig in a little bit in terms of international, intermodal. And you did mention that the Canadian West Coast market share was back to pre-strike levels in December. Just curious, given what we're seeing in the Red Sea and on the Panama Canal, just be curious whether you're seeing inquiries at this point that could be incremental to that market share and how likely those volumes might be to be sticky.

Thanks, very much good afternoon.

Cherilyn Radbourne: Just wanted to dig in a little bit in terms of international intermodal.

Cherilyn Radbourne: And you did mention that the Canadian West coast market share with back to pre strike levels in December just curious given what we're seeing in the Red Sea in Panama.

Doug: On margin, as volumes come back, we should see the positive impact of our operating leverage.

Tracy: So, as volumes went down, we, you know, we saw it go down. As volumes come back up, we're going to lift them, especially in the merchandise business, where we currently have to pass on our trains and, of course, the pricing environment. You know, as you've watched us over the last 18 months, we continue to both deliver and expect pricing above rail inflation. So that's all positive news. We do have the headwinds that you just talked about, but that's going to be offset to the extent that we'll drive the 10% to the bottom.

Cherilyn Radbourne: Panama Canal, just be curious whether youre seeing inquiries at this point that could be incremental to that market share.

Cherilyn Radbourne: How likely those volumes might be to be sticky.

Cherilyn Radbourne: Thanks, Charlene. It's Doug. No, it's a great question. It's obviously an ever-changing environment out there. So, we spend a lot of time talking with customers about it. We are seeing, obviously, some capacity come out of the vessel market with them having to go around Africa now. So, we see some tightening overall. And with that, we're starting to hear with the different problems of both the Panama and the Suez Canal that the West Coast is looking like a more viable option moving forward. We haven't seen those volumes come in yet, but we're expecting them to gradually ramp up if they do come forward. But so far, so good. We've actually just been able to maintain our pre-COVID levels now for the last, I'll say, almost eight weeks. And we see that continuing on moving forward on both Prince Rupert and...

Speaker Change #104: Thanks, Charlene its Doug.

That's a great question, it's obviously an ever changing environment out there. So we spent a lot of time talking with customers about it we are seeing obviously some capacity come out of the vessel market with them having to go around to go around Africa now so we see some tightening overall and with that we're sorry Randy.

Shislaine: The board also approved a new share buyback program of up to 32 million shares for an amount in the range of $4 billion through a normal course issuer bid from February 1, 2024 to January 31, 2025. In conclusion, let me reiterate a few points. We have delivered seven consecutive quarters of exceptional operating performance and are providing excellent customer service. We have managed through significant external challenges to deliver strong relative financial performance.

Tracy: Does that make sense? Yes, it does.

Here with the different problems that both Panama and the Suez Canal that the West Coast is looking like a more viable option moving forward, we haven't seen those volumes come in yet, but we're expecting them to gradually ramp up if they do come forward, but so far so good we've actually just who have been able to maintain our pre COVID-19 levels now.

Chris Wetherbee: So just a way to think about it is that there still is the sort of normal operating leverage on revenue growth, mostly offset by those incremental costs.

Tracy: That kind of gets you to, you know, kind of core growth before the buyback in line with RTM growth.

Speaker Change #104: For the last I'll say, almost eight weeks and we see that continuing on moving forward on bolt Prince Rupert and Vancouver.

Chris Wetherbee: Is that roughly the right way to think about it?

Speaker Change: That's my one. Thank you.

Speaker Change #105: That's my one thank you.

Tracy: Yeah, you got it pretty much right. Thanks.

Speaker Change: Our next question comes from Ken Hoexter from Bank of America. Please go ahead your line is open.

Speaker Change #106: Our next question comes from Ken <unk> from Bank of America. Please go ahead. Your line is open.

Operator: Next? Okay, thank you.

Cherilyn Radbourne: Our next question comes from Cherilyn Radbourne from TD Cowan. Please go ahead, your line is open. Thanks very much. Good afternoon. I just wanted to dig in a little bit in terms of international and intermodal.

Shislaine: Although we remain mindful of ongoing economic and geopolitical volatility, we are calling for some recovery in 2024. In particular, we expect Intermodal International to return to pre-COVID levels and forest products to gradually ramp up over the next 18 months. Our pivot to growth is underway, and assuming a positive economic backdrop, we are guiding for EPS growth of around 10% versus 2023, underpinned by mid-single-digit volume growth. We have a strong balance sheet, and we plan on using that financial flexibility to take advantage of opportunities. Let me pass it back to Tracey.

Ken Hoexter: Great. Hey, good afternoon. Tracy or Ghislaine, I guess in the EPS target of 10%, you're looking at long term going up to 10 to 15. Just want to understand the acceleration. You talked about hiring, I guess, pre-hiring employees. Are you saying you're pre-resourced now because of the work rule changes or you're going to accelerate the hiring? I just want to understand the cost implications versus your growth targets. Thanks.

Ken: Great Hey, good afternoon.

Ken: Tracy just plain I guess in the EPS target of 10% Youre looking at long term going up to 10 to 15, just want to understand the acceleration you talked about hiring.

Ken: Pre hiring employees are you, saying you are pre resource now because of the.

Doug: And you did mention that the Canadian West Coast market share was back to pre-strike levels in December.

Ken: Because of the work rule changes or are you going to accelerate the hiring I just wanted to stand the cost implications versus your growth targets. Thanks.

Cherilyn Radbourne: Just curious, given what we're seeing in the Red Sea and on the Panama Canal, whether you're seeing inquiries at this point that could be incremental to that market share and how likely those volumes might be to be sticky.

Tracy Robinson: I'll start with that one, Ken. So we've been hiring through the year to offset attrition. And that's the lever we're using right now to manage our workforce size is hiring relative to attrition. And as we look forward, you'll see our hiring ramp up to match the volumes as we see them coming back. We've got a great line of sight on a number of the areas Doug kind of took you through them. And so we're getting ready for those.

Speaker Change #107: I'll start with outlet Ken So we've been hiring through the year to offset attrition and QE. That's lever. We're using right now are to manage our workforce size instead of hiring relative to attrition and as we look forward you will see our hiring ramp up to match the volumes as we see them coming back we've got great line of sight on.

Doug: Thanks, Charlene.

Doug: It's Doug.

Doug: No, it's a great question. It's obviously an ever-changing environment out there.

Speaker Change #107: A number of the areas that kind of took you through them.

Speaker Change #107: And so we're getting ready for that.

Tracey: Thanks, Suzanne. Well said. Operator. I will now go to questions. Thank you. We will now begin the question and answer session. As previously mentioned, we ask that you kindly limit yourselves to one question. Our first question will come from Chris Wetherbee from Citi. Please go ahead; your line is open. Hey, thanks. Good afternoon. Maybe starting on the 24 guide, if we could maybe unpack some of the moving parts a little bit. So RTM guide, mid single digits.

Doug: So, we spend a lot of time talking with customers about it. We are seeing, obviously, some capacity come out of the vessel market with them having to go around Africa now. So, we see some tightening overall. And with that, we're starting to hear about the different problems of both the Panama and the Suez Canal that the West Coast is looking like a more viable option moving forward. We haven't seen those volumes come in yet, but we're expecting them to gradually ramp up if they do come forward. But so far, so good. We've actually just been able to maintain our pre-COVID levels now for the last, I'll say, almost eight weeks.

Speaker Change: Our next question will come from Scott Group from Wolf Research. Please go ahead, your line is open.

Speaker Change #108: Our next question will come from Scott Group from Wolfe Research. Please go ahead. Your line is open.

Scott H. Group: Hey, thanks. Good afternoon. So when you talk about price above inflation, I'm just wondering, do you see that spread widening or moderating this year? And then just near term, any way to quantify the weather impact we're seeing in Q1 and then any update you can give us on the labor front with the conductors in Canada? Thank you.

Scott H. Group: Hey, Thanks, good afternoon. So.

Scott H. Group: When you talk about price above inflation I'm, just wondering do you see that spread widening or moderating. This year and then just near term any way to quantify the weather impact we're seeing in Q1, and then any update you can give us on on the labor front.

Speaker Change #109: With the conductors in Canada. Thank you.

Speaker Change: Thank you so much.

Speaker Change #110: Sounded like an awful lot of questions.

Speaker Change #110: But.

Doug: And we see that continuing on moving forward on both Prince Rupert and... That's my one.

Chris Wetherbee: And then I think, Ghislaine, you talked about maybe $200 million of some cost headwinds there, and about 5% coming below the line. So I just want to make sure I understand sort of the operating leverage of the business. Is it mostly offset by the 200?

Speaker Change #110: I'm going to kick it quick run over them if I can remember them and then you guys can come in behind me, but we want one question.

Operator: Thank you. The next question comes from Ken Hoexter from Bank of America.

Speaker Change #110: <unk>.

Speaker Change: The first one was on price. So, I mean, I think it depends. Clearly, it's a little tighter pricing environment than we've seen in the past. But we have, for the guys I've given Doug, a pretty solid customer service product to sell. And so we are achieving pricing. We continue to achieve pricing that's above inflation. The margin above inflation is going to be different in different commodities and in different areas. But we see no reason to believe that that's not going to keep up.

Speaker Change #110: The first one was done.

Please go ahead. Your line is open.

Speaker Change #110: On price.

Great

Hey, good afternoon.

Speaker Change #110: It depends clearly it's not as it's a little tighter pricing environment that we've seen in the past.

Tracy: Tracy or Ghislaine, I guess in the EPS target of 10%, you're looking at long term going up to 10 to 15.

Speaker Change #110: But we have so the guys have given Doug is pretty solid.

Chris Wetherbee: Or maybe we can kind of think about how you should be able to generate incremental margins on that mid single-digit RTM. Okay, Chris, this is Tracy. Let me take a shot at this. So we've got a forecast of 10% EPS and then volume, as you've noted, the forecast assumes, you know, a gentle kind of recovery economically as we go through the year, but it also assumes those customer-specific growth initiatives that you heard Doug talk about. On margin, as volumes come back, we should see the positive impact of our operating leverage. So as volumes went down, we, you know, we saw it go down. As volumes come back up, we're going to lift them, especially in the merchandise business, where we currently have to pass on our train, and of course, the pricing environment.

I just want to understand the acceleration.

Tracy: You talked about hiring, I guess, pre-hiring employees.

Speaker Change #110: Customer service product to sell and so we are achieving.

Are you saying you're pre-resourced now because of the work rule changes, or are you going to accelerate the hiring?

Speaker Change #110: Pricing, we continue to achieve pricing above inflation the margin above inflation is going to be different in different commodities and different areas, but we see no reason to believe that that's not going to continue.

Tracy: I just want to understand the cost implications versus your growth targets.

Operator: Thanks. I'll start with that one, Ken.

Speaker Change: Thank you for watching!

Speaker Change #110: What was the next winter weather on the weather.

Speaker Change: It's on the weather.

Scott H. Group: So we've been hiring through the year to offset attrition. And that's the lever we're using right now to manage our workforce size is hiring relative to attrition. And as we look forward, you'll see our hiring ramp up to match the volumes as we see them coming back.

Speaker Change: The winter weather and I can I can take that one. So we had a very cold snap of minus 40 to minus 50 celsius about a week. We did see some disruption during that period of time as we had difficulty moving throughout that period but I will say this to speak to the strength you know the resiliency of our discipline scheduled operating plan just as we saw as we recovered from the ILWU strike the wildfires and the flooding last year in 2023 the way we run the network and we're always working back to the plan but that's our North Star we were able to get we were able to get our legs back under us get the operation moving again and we're we're regaining our momentum getting our speed and our velocity back metrics are improving already. Thanks for watching!

Speaker Change #111: The winter weather and I can I can take that one so we had a very cold snap of minus 40 to minus 50 Celsius about a week, we did see some disruption during that period of time as we had difficulty moving throughout that period, but I will say this to speak to the strength the resiliency of our discipline.

Tracy: We've got a great line of sight on a number of the areas Doug kind of took you through.

Scott H. Group: And so we're getting ready for those.

Tracy: Our next question will come from Scott Group from Wolf Research.

Speaker Change #111: <unk> operating plan just as we saw as we recovered from the IOW strike the wildfires and the flooding last year in 2023, the way we run the network and we're always working back to the plan, but that's our North Star we were able to get to we were able to get our legs back under us get the operation moving again, and where we're regaining our momentum.

Operator: Please go ahead; your line is open.

Operator: Hey, thanks.

Scott H. Group: Good afternoon,

Scott H. Group: So when you talk about price above inflation, I'm just wondering, do you see that spread widening or moderating this year? And then, just near term, any way to quantify the weather impact we're seeing in Q1 and then any update you can give us on the labor front with the conductors in Canada?

Tracy Robinson: You know, as you've watched us over the last 18 months, we continue to both deliver and expect pricing above rail inflation. So that's all positive news. We do have the headwinds that Jislan talked about, but, you know, that's going to be offset to the extent that we'll drive the 10% to the bottom. Does that make sense? It does.

Speaker Change #111: Getting our speed and our velocity back metrics are improving already.

Speaker Change #100: Okay, thanks. Thanks for that, Scott. David, or who's next?

Speaker Change #112: Okay. Thanks, Thanks for that Scott Janet Moor of project.

Speaker Change #100: Our next question comes from David Vernon from Bernstein. Please go ahead. Your line is open. Hey, good afternoon. Thanks for taking the question. So, Doug, you know, the RTM, the mid-single-digit RTM expectations, can you give us some sense of visibility into some of the bigger chunks and when they should start coming in? We're off to a little bit of a weaker start on the year, and I'm just trying to get a sense for, as you think of that, the ramp that you've got much more detail on, if you could share with us any color on, you know, when we expect to see the inflection in the sequential volumes.

Speaker Change #113: Our next question comes from David Vernon from Bernstein. Please go ahead. Your line is open.

Tracy: Thank you.

Tracy: Thank you so much.

Scott H. Group: The first one was on price.

Hey, good afternoon. Thanks for taking the question so Doug the RPM in the mid single digit RPM expectations can you give us some sense of visibility into some of the bigger chunks and when they when they should start coming in and we're off to a little bit of a weaker start on the year and I'm just trying to get a sense for as you think of the ramp that you have got much more detail on it.

Tracy: So, I mean, I think it depends.

Scott H. Group: Clearly, it's a slightly tighter pricing environment than we've seen in the past.

Tracy Robinson: So just the way to think about it is that there still is the sort of normal operating leverage on revenue growth, mostly offset by those incremental costs, but that kind of gets you to, you know, kind of core growth before the buyback in line with RTM growth. Is that roughly the right way to think about it? Yeah, you got it pretty much.

Tracy: But we have, for the guys I've given Doug, a pretty solid customer service product to sell. And so we are achieving prices. We continue to achieve prices that are above inflation.

Speaker Change #113: If you could share with us any color on when we expect to see the inflection in the sequential volumes.

Doug McDonald: Thanks David so you know I guess like the slide 12 is a great indicator but you know we're expecting a gradual ramp up over the year and things like forest products which we expect to see a gradual recovery and it's not going to be anything it's not going to be a straight up arrow or anything so we know that's going to happen same with most of the products that are on there and a lot of those are going to tie right into the economy that gradual recovery that Tracy talked about that's what we're expecting so we're going to see that so you're going to see more come in the back half than the front half but you know we're working with the customers to do that as quickly as possible we talked about the two coal mines that are coming on and those are both in H2 as well but with it with a international intermodal seeing that perk up as of last December which we just talked about so we're going to see that start to poke right away and we're expecting a gradual recovery in the domestic

Speaker Change #114: Thanks, David.

Tracy: The margin above inflation is going to be different for different commodities and in different areas, but we see no reason to believe that it's not going to keep up. Thank you for watching! It's on the weather. The winter weather, and I can I can take that one. So we had a very cold snap of minus 40 to minus 50 celsius for about a week.

Speaker Change #114: Slide 12 is a great indicator, but we're expecting a gradual ramp up over the year, if things like forest products, which we expect to see a gradual recovery and it's not going to be anything it's not going to be a straight up arrow or anything. So we know that's going to happen same with most of the products that are on there and a lot of those are going to dive right into it.

Tracy Robinson: Thanks. Next. Okay, thank you. Our next question comes from Cherilyn Radbourne from TD Cowan. Please go ahead, your line is open. Thanks very much, good afternoon.

Cherilyn Radbourne: Just wanted to dig in a little bit in terms of international and intermodal. And you did mention that the Canadian West Coast market share was back to pre-strike levels in December. Just curious, given what we're seeing in the Red Sea and on the Panama Canal, would you be curious whether you're seeing an increase at this point that could be incremental to that market share and how likely those volumes might be to be sticky. Thanks, Cheryl, and it's Doug.

Tracy: We did see some disruption during that period of time as we had difficulty moving throughout that period but I will say this to speak to the strength you know the resiliency of our discipline scheduled operating plan just as we saw as we recovered from the ILWU strike the wildfires and the flooding last year in 2023 the way we run the network and we're always working back to the plan but that's our North Star we were able to get we were able to get our legs back under us get the operation moving again and we're we're regaining our momentum getting our speed and our velocity back metrics are improving already. Thanks for watching! Okay, thanks.

Speaker Change #114: The economy at that gradual recover that Tracy talked about that's what we're expecting so we're going to see that so youre going to see more come in the back half than the front half, but we're working with the customers to do that as quickly as possible. We talked about the two coal mines that are coming on and those are both at <unk> as well, but with the international intermodal seeing that FERC.

Speaker Change #114: As of last December, which we just talked about so we're going to see that start to poke right away and we're expecting a gradual recovery in the domestic market.

Doug: No, it's a great question. It's obviously an ever changing environment out there. So we spent a lot of time talking with customers about it. We are seeing, obviously, some capacity come out of the vessel market with them having to go around Africa now. So we see some tightening overall, and with that, we're starting to hear about the different problems with both the Panama and the Suez Canal that the West Coast is looking like a more viable option moving forward. We haven't seen those volumes come in yet, but we're expecting them to gradually ramp up if they do come forward. But so far, so good. We've actually just been able to maintain our pre-COVID levels now for the last, I'll say, almost eight weeks.

Speaker Change #101: All right, thank you. And then the labor costs for accommodating the work rule changes, you know, is that has that been sort of season now? Are we kind of running it at the right level as far as kind of staffing and resourcing? Or are we still kind of figuring out how to make the schedules work with the new hours of service regulation?

Speaker Change #115: Alright. Thank you and then the labor costs for accommodating the work. We will changes is that has that been sort of season now are we kind of running it at the right level as far as kind of staffing and resourcing or are we still kind of figuring out how to make the schedules work with.

Speaker Change #116: The new hours of service regulations, sorry, David we're only taking one for persons.

Speaker Change #102: Sorry, David, we're only taking one per person.

Unnamed Speaker: Thanks for that, Scott. David, or who's next?

Speaker Change #103: I thought I'd give it a shot. Thanks, guys.

David Vernon: Our next question comes from David Vernon of Bernstein.

Get thought I'd give it a shot at it thanks guys. Okay. Thank you.

Speaker Change #104: Thank you.

Speaker Change #105: Our next question comes from Fadi Chamoun from BMO. Please go ahead, your line is open.

Unnamed Speaker: Please go ahead. Your line is open.

Speaker Change #117: Our next question comes from <unk> <unk> from BMO. Please go ahead. Your line is open.

Unnamed Speaker: Hey, good afternoon.

Doug: Thanks for taking the question.

Unnamed Speaker: So, Doug, you know, the RTM, the mid-single-digit RTM expectations, can you give us some sense of visibility into some of the bigger chunks and when they should start coming in? We're off to a little bit of a weaker start on the year, and I'm just trying to get a sense for, as you think of that, the ramp that you've got much more detail on, if you could share with us any color on, you know, when we expect to see the inflection in the sequential volumes. Thanks David so you know I guess like the slide 12 is a great indicator but you know we're expecting a gradual ramp up over the year and things like forest products which we expect to see a gradual recovery and it's not going to be anything it's not going to be a straight up arrow or anything so we know that's going to happen same with most of the products that are on there and a lot of those are going to tie right into the economy that gradual recovery that Tracy talked about that's what we're expecting so we're going to see that so you're going to see more come in the back half than the front half but you know we're working with the customers to do that as quickly as possible we talked about the two coal mines that are coming on and those are both in H2 as well but with it with a international intermodal seeing that perk up as of last December which we just talked about so we're going to see that start to poke right away and we're expecting a gradual recovery in the domestic, All right, thank you.

Fadi Chamoun: Yes, thank you.

Speaker Change #118: Yes. Thank you.

Fadi Chamoun: Just one clarification first. The comment around volume back to 2019 level, is that for total RTM or are you talking about intermodal specifically as well?

BMO: Just one clarification first the comment around volume back to 2019 level is that for total RPM or are you talking about intermodal specifically as well.

Fadi Chamoun: And then my main question is really,

BMO: And then.

My main question is really.

Fadi Chamoun: If you can extend kind of the outlook that you talked about, mid-single-digit RTM, like if we take that into...

Doug: And we see that continuing on moving forward on both Prince Rupert and. That's my question. Thank you. Our next question comes from Ken Hoexter from Bank of America. Please go ahead, your line is open. Great. Hey, good afternoon.

BMO: If you can extend kind of the outlook that you talked about mid single digit RPM like.

BMO: We think that into.

Fadi Chamoun: Revenues, what are the moving parts like from a mixed perspective? I'm guessing pricing incremental to that five that gets you a high single digit, but what's your thought on mix and how should we think about all these moving pieces from a revenue perspective?

BMO: Revenues what are the moving parts like from a mix perspective, I am guessing pricing incremental to the $5. It gets you a high single digit, but what's your thoughts on mix and how should we think about all the moving pieces from a revenue perspective.

Ken Hoexter: Tracy, you're displaying, I guess, in the EPS target of 10%, you're looking at long term going up to 10 to 15. Just want to understand the acceleration. You talked about hiring, I guess, pre-hiring employees. Are you saying you're pre-resourced now because of the work rule changes, or are you going to accelerate the hiring? I just want to understand the cost implications versus your growth targets. Thanks. I'll start with that one, Ken.

Speaker Change #120: Well those are long two questions but.

Speaker Change #106: Well, that was a long two questions, but so really the second one is the critical one. So we don't forecast on the revenues, Fadi, but on the mid-single digits, we expect that to carry out in our usual fashion. We expect the average car dollars per car to apply. And I think you guys can do the math from there. But, yeah, we we're we're pretty happy with the forecast.

Speaker Change #120: So really the second one is the critical one so we don't forecast on the revenues value, but on the mid single digits, we expect that to carry out our usual fashion, we expect the average dollars.

Speaker Change #120: Dollars per car to apply and I think you guys can do the math from there.

Speaker Change #120: But we were.

Speaker Change #120: We're pretty happy with the forecast.

Speaker Change #120: Yeah.

Speaker Change #107: And with respect to the comment around 2019 level or pre-COVID level, is that an intramural forecast for volume to be back to 2019 or is that a total of the year?

Speaker Change #121: Thank you and with respect to the call.

Speaker Change #121: Comment that on 2019 level or pre COVID-19 level as that of intermodal.

Ken Hoexter: So we've been hiring through the year to offset attrition. And that's the lever we're using right now to manage our workforce size is hiring relative to attrition. And as we look forward, you'll see our hiring ramp up to match the volumes as we see them coming back. We've got a great line of sight on a number of the areas, Doug kind of took you through them.

Speaker Change #121: Forecasts for volume could be back to clean.

Speaker Change #108: I think that was your one question and you can go to the investor relations team after the call for the other.

Speaker Change #122: Yeah, I think that was your one question and you can go to the Investor Relations team after the call for the other one.

Speaker Change #122: Thanks.

Speaker Change #109: Our next question comes from Ravi Shanker from Morgan Stanley. Please go ahead, your line is open.

Our next question comes from Ravi Shanker from Morgan Stanley. Please go ahead. Your line is open.

Ravi Shanker: Thanks, everyone. Tracy or Doug, can you give us an update on the Falcon service, please? What's the operational rollout been like over the first few months? What's it been like selling the product to customers, et cetera?

Ravi Shanker: Thanks, everyone.

Ken Hoexter: And so we're getting ready for those. Our next question will come from Scott Group from Wolfe Research. Please go ahead, your line is open. Hey, thanks. Good afternoon.

Ravi Shanker: Doug can you give us an update on the Falcon service. Please.

Doug Macdonald: What's the operational rollout been like after the first few months.

Doug Macdonald: What's it been like selling the product the customer et cetera.

Unnamed Speaker: And then the labor costs for accommodating the work rule changes, you know, is that sort of season now? Are we kind of running it at the right level as far as staffing and resourcing go? Or are we still kind of figuring out how to make the schedules work with the new hours of service regulation? Sorry, David, we're only taking one per person. I thought I'd give it a shot. Thanks, guys. Thank you.

Scott H. Group: So when you talk about price above inflation, I'm just wondering, do you see that spread widening or moderating this year? And then, just near term, any way to quantify the weather impact we're seeing in Q1 and then any update you can give us on the labor front with the conductors in Canada. Thank you. It sounded like an awful lot of questions, but I'm going to take a quick run over them if I can remember them, and you guys can come in behind me, but we want one question. The first one was on price. So I mean, I think it depends.

Speaker Change #110: Okay, well, that's a good question. We'll have Derek start off on the operational side. Yeah, hey, good afternoon. No, it's been a very exciting product we've had with our partners at the FXC and the Union Pacific. It is acting as one seamless service. You know, we're consistently delivering on the public transit time with our customers, and we look forward to continuing to grow that here in 2024. So, solid momentum in 2023, and I see that partnership between the three of us only continuing to grow in 2024. Yeah, and on the revenues, listen, we told everyone it's going to be very slow growth off the truck market, and that's what it is, but that's okay, right? We're expecting it. We're both, the UP and FXC and us are working hand-in-hand to grow that. The big bid cycle is really only starting up in Q1, where we'll be going after truck business that's out there, and we hope to see some solid growth moving into the rest of the year.

Doug Macdonald: Okay, well that's a good question will hub Derek start off on the operational side, Yeah, Hey, good afternoon, it's been a very exciting product we have with our partners at the FX and the new Pacific. It is acting as one seamless service, we're consistently delivering on the public transit time with our customers and we look forward of continuing to grow that here in 2024.

So solid momentum in 2023, and I see the partnership between the three of US only continuing to grow in 'twenty four yeah on.

Doug Macdonald: On the revenues listen we've told everyone is going to be very slow growth off the truck market and that's what it is.

Fadi Chamoun: Our next question comes from Fadi Chamoun from BMO.

But that's okay right, we're expecting at where both the <unk> and efficacy and US are working hand in hand to grow that the big bid cycle is really only starting up in Q1, where we'll be going after truck business. That's out there and we hope to see some solid growth moving into the rest of the year.

Scott H. Group: Clearly, it's a little tighter pricing environment than we've seen in the past, but we have, the guys have given Doug a pretty solid customer service product to sell. And so we are achieving prices, and we continue to achieve prices that are above inflation. But the margin above inflation is gonna be different for different commodities and in different areas. But we see no reason to believe that that's not going to happen. It's the weather. The Winter Weather, and I can take that one.

Unnamed Speaker: Please go ahead; your line is open. Yes, thank you.

Unnamed Speaker: Just one clarification first. The comment around volume back to the 2019 level, is that for total RTM, or are you talking about intermodal specifically as well? And then my main question is really, If you can extend the kind of the outlook that you talked about, mid-single-digit RTM, like if we take that into... Revenues, what are the moving parts like from a mixed perspective? I'm guessing pricing incremental to that five that gets you a high single digit, but what's your thought on mix and how should we think about all these moving pieces from a revenue perspective? Well, that was a long two questions, but really, the second one is the critical one. So we don't forecast revenues, Fadi, but on the mid-single digits, we expect that to go out in our usual fashion.

Speaker Change #111: Thanks for your question.

Speaker Change #123: Thanks for your questions.

Speaker Change #112: Thank you.

Speaker Change #124: Thank you.

Speaker Change #113: Our next question comes from Walter Spracklin from RBC Capital Markets. Please go ahead, your line is open.

Speaker Change #125: Our next question comes from Walter <unk> from RBC Capital markets. Please go ahead. Your line is open.

Walter Spracklin: Yeah, thanks very much. Good afternoon, everyone. So I wanted to zero in here on the first quarter, and I know you don't typically give quarterly guidance, but I think it's important given last year was such a tough compare, and now you've come off to a tough start here due to the weather. Is it possible, do you think, when we frame the 10% over a quarterly basis, is it possible that you can see any growth in the first quarter given how tough the compare is and the weather to start, and therefore is most of it all kind of back-end loaded for the 10%?

Walter: Yes, thanks, very much good afternoon, everyone. So I wanted to zero in here on on the first quarter and I know you're not you don't typically give quarterly guidance, but I think it's important given last year was such a tough compare and now you've you've come up.

Scott H. Group: So we had a very cold snap of minus 40 to minus 50 Celsius for about a week. We did see some disruption during that period of time as we had difficulty moving throughout that period. But I will say this to speak to the strength, you know, the resiliency of our disciplined scheduled operating plan, just as we saw as we recovered from the ILWU strike, the wildfires, and the flooding last year in 2023. The way we run the network, and we're always working back to the plan, but that's our North Star. We were able to get our legs back under us, get the operation moving again, Metrics are already improving. Okay, thanks. Thanks for that Scott. David, or who's next?

A tough start here due to the weather.

Speaker Change #127: Is it is it possible do you think.

Speaker Change #127: When we frame the 10% over a quarterly basis.

Speaker Change #127: Is it possible that you can see any growth in the first quarter given given how tough the compare is in.

Unnamed Speaker: We expect the average car price per car to apply, and I think you guys can do the math from there. But, yeah, we're pretty happy with the forecast. And with respect to the comment around the 2019 level or pre-COVID level, is that an intramural forecast for volume to be back to 2019 or is that a total for the year? I think that was your only question, and you can go to the investor relations team after the call for the other.

Speaker Change #127: The weather to start and therefore is most of it all kind of backend loaded with 10%.

Speaker Change #114: Thanks, Walter. Maybe I'll just start. I'll hand it over to Ghislaine, but I'll start by saying it is going to be a tough compare. We had a big quarter last year and some very different weather than the way we've started off this year, but Ghislaine, did you want to make any comments on that? No, I think that's right. I think we told the market on many conferences that Q1 was going to be a very tough comp. If you remember last year, our EPS was up 38%, and our OR was 61%, which is not kind of winter-like type of OR. So, we know that. We've baked that in into our forecast and into our 10%. We've accounted for regular winter. We did start, and as Pat said, we had seven days of deep freeze in the west. Hopefully, that's behind us. It's behind us for now, and hopefully, as we get into February, then we don't get that sustained cold. But, yeah, I mean, we know that Q1 was going to be a tough comp, but that's all factored in into our 10% EPS growth for the year. Thanks, Walter, for the question. Thank you. Thanks.

Speaker Change #128: Thanks, I'll turn it maybe I'll just start I'll hand, it over to you Glen I'll start by saying it is going to be a tough compare we had a big quarter last year and some dairy.

Glen: Different weather than the way we started off this year, but just did you want to make any comments on that.

That's right I think we told the market.

Glen: On many conferences that.

Glen: Q1 was going to be a very tough comp. If you remember last year, our EPS was up 38% and ror was 61, which is not kind of winter like <unk>. So we know that we baked that in into our forecast and into our 10%.

Ravi Shanker: Our next question comes from Ravi Shanker of Morgan Stanley.

Scott H. Group: Our next question comes from David Vernon from Bernstein. Please go ahead, your line is open. Hey, good afternoon.

Unnamed Speaker: Please go ahead; your line is open. Thanks, everyone.

David Vernon: Thanks for taking the question. So, Doug, you know, the RTM, the mid-single-digit RTM expectations. Can you give us some sense of visibility into some of the bigger chunks and when they should start coming in? We're off to a little bit of a weaker start this year, and I'm just trying to get a sense for, as you think of that, the ramp that you've got much more detail on, if you could share with us any color on when we expect to see the inflection in the sequential volume. Thanks, David. So, you know, I guess slide 12 is a great indicator, but, you know, we're expecting a gradual ramp-up over the year, and things like forest products, which we expect to see a gradual recovery, and it's not going to be anything. It's not going to be a straight up arrow or anything.

Glen: We have accounted for a regular winter.

Tracy or Doug, can you give us an update on the Falcon service, please?

Glen: Did start and as Pat said, we had seven days of deep freeze in the west hopefully.

Unnamed Speaker: What's the operational rollout been like over the first few months? What's it been like selling the product to customers, et cetera? Okay, well, that's a good question.

Speaker Change #130: That's behind us its behind us for now and hopefully as we get into February than we don't get that sustained coal, but yes. I mean, we know that Q1 was going to be a tough comp, but that's all factored into our 10% EPS growth for the year. Thanks Walter for the question. Thank you.

Derek: We'll have Derek start off on the operational side.

Unnamed Speaker: Yeah, hey, good afternoon.

Unnamed Speaker: No, it's been a very exciting product we have had with our partners at the FXC and Union Pacific. It is acting as one seamless service.

Speaker Change #115: Our next question comes from Konark Gupta from Scotiabank. Please go ahead, your line is open.

Speaker Change #131: Our next question comes from <unk> Gupta from Scotiabank. Please go ahead. Your line is open.

Unnamed Speaker: You know, we're consistently delivering on public transit time with our customers, and we look forward to continuing to grow that here in 2024.

Konark Gupta: Good evening, everyone. And best wishes to Doug and Remy for their respective roles. Question for Pat. You said destination performance is improving. But what's your realistic target there, Pat? And what's required from your interchange partners to get to that level?

Good evening everyone.

Ravi Shankar: Best wishes to Doug in Miami for the respective roles.

Speaker Change #132: Question for Pat.

Pat Whitehead: You said destination performance.

Pat Whitehead: It's improving.

Unnamed Speaker: So, solid momentum in 2023, and I see that partnership between the three of us only continuing to grow in 2024. Yeah, and on revenues, listen. We told everyone it's going to be very slow growth on the truck market, and that's what it is, but that's okay, right? We're expecting it. We're both, the UP and FXC, and us are working hand-in-hand to grow that. The big bid cycle is really only starting up in Q1, where we'll be going after truck business that's out there, and we hope to see some solid growth moving into the rest of the year.

Pat Whitehead: But what's your realistic target their path and what's required from your interchange partners to get to that level.

Pat Whitehead: Thank you for the question, and we desire to continue to squeeze that delta between launch and land. We look to get another few percentage points out of that, squeeze that gap between how we launch trains and how we arrive them into terminals. We originate, terminate the majority of our traffic on our own lines, so we're not as dependent on the other carriers for that metric, and that's where I talked a bit about reducing train meet delays online, which is a product of getting trains out on time, train schedules make the train meets, and making timely crew swaps. So that's really our focus, to continue to squeeze that delta between launch and land. Thank you very much for the question. Thank you.

Speaker Change #134: The corner. Thank you for the question and we did.

Speaker Change #134: <unk> desire to continue to squeeze that delta between launch and land, we look to get another two percentage points out of that squeeze that gap between how we launched trained in how we arrived them into terminals, we originate terminated.

Doug: So, we know that's going to happen. Same with most of the products that are on there, and a lot of those are going to tie right into the economy. That gradual recovery that Tracy talked about is what we're expecting. So, we're going to see that. So, you're going to see more come in the back half than the front half, but, you know, we're working with the customers to do that as quickly as possible. We talked about the two coal mines that are coming on, and those are both in H2 as well, but with international intermodal, we're seeing that pick up as of last December, which we just talked about. So, we're going to see that start to pick up right away, and we're expecting a gradual recovery in the domestic market. All right, thank you.

Speaker Change #134: The majority of our traffic on our own line. So we're not as dependent on the other carriers for that metric and Thats, where I talked a bit about reducing train meet delays online, which is a product of getting trains out on time train schedules make the train meets and making timely crew swaps. So that's really our focus to continue to squeeze that Dell.

Between launch and land. Thank you very much for the questions. Thank you.

Unnamed Speaker: Thanks for your question.

Unnamed Speaker: Thank you.

Walter Spracklin: Our next question comes from Walter Spracklin of RBC Capital Markets.

Speaker Change #116: Our next question comes from Brandon Oglenski from Barclays. Please go ahead, your line is open.

Our next question comes from Brandon <unk> from Barclays. Please go ahead. Your line is open.

Brandon Oglenski: Hey, good afternoon, everyone. And thanks for taking my one question. Just, Lane, I was hoping you could update us here on, you know, the change in the dividend. And obviously, if you were to go to that full, you know, repurchase this year, that'd be quite a bit of, you know, cash flow out the door. So where are you seeing leverage in the near term, and especially in the context of, you know, that 10 to 15% plan over the next three years? Would you be willing to take it up higher right now?

Hey, good afternoon, everyone and thanks for taking my one question just lane I was hoping you could update us here on the change in the dividend and obviously if you were to go to that for <unk>.

Unnamed Speaker: Please go ahead; your line is open. Yeah, thanks very much.

Unnamed Speaker: Good afternoon, everyone. So I wanted to zero in on the first quarter, and I know you don't typically give quarterly guidance, but I think it's important given last year was such a tough comparison, and now you've come off to a tough start here due to the weather. Is it possible, do you think, when we frame the 10% over a quarterly basis, is it possible that you can see any growth in the first quarter given how tough the comparison is and the weather to start, and therefore is most of it all kind of back-end loaded for the 10%? Thanks, Walter. Maybe I'll just start.

Speaker Change #134: Repurchase this year that would be quite a bit of cash.

Speaker Change #135: Cash flow out the door, so where are you seeing leverage in the near term and especially in the context of that 10% to 15% plan over the next three years would you be willing to take it up higher right now.

Speaker Change: And then the labor costs for accommodating the work rule changes, you know, have that been sort of seasoned now? Are we kind of running it at the right level as far as staffing and resourcing go? Or are we still kind of figuring out how to make the schedules work with the new hours of service regulation? Sorry, David, we're only taking one per person. I thought I'd give it a shot.

Lane: Yeah, so as we said, we're looking at the targeted leverage over time of 2.5. I mean, if you look at this year, we finished at 2.25.

Speaker Change #136: Yes, so as we said.

We're looking at the targeted leverage over time of two five I mean, if you look at this year, we finished at 225.

Lane: We typically grow our dividends in line with earnings growth. You'll see that we're slightly below because we do that over time. And if you remember in 2023, our dividends were up 8% and our earnings are down 2%. So we have a long-term view. We have a long-term view on these two things. I think that as we said in Investor Day, our leverage will be 2.5% over time if economic conditions warrant. So that's why we went back and toned back a little bit of our share buyback to $4 billion. Last year, we wanted to be opportunistic due to the stock price and where it was. And again, I think on terms of dividend, I'm very proud to say that it's the 28th year that we've increased our dividend and that's very good. So that's what we're thinking and we're thinking long-term and without any jerky reaction.

Speaker Change #136: We typically grow our dividends in line with earnings growth Youll see that were slightly below because we do that over time and if you remember in 2023, our dividends were up 8% and our earnings are down too. So we have a long term view, we have a long term.

I'll hand it over to Ghislaine, but I'll start by saying it is going to be a tough comparison.

Speaker Change: Thanks, guys. Thank you. Our next question comes from Fadi Chamoun from BMO. Please go ahead, your line is open.

<unk> on these two things I think that as we said in Investor day, our leverage will be 2.5 over overtime, if economic conditions warrant. So why we that's why we went back and toned back a little bit of our share buyback two 4 billion last year, we wanted to be opportunistic due to the stock price and where it was.

Unnamed Speaker: We had a big quarter last year and some very different weather than the way we've started off this year, but Ghislaine, did you want to make any comments on that?

Fadi Chamoun: Yes, thank you. Just one clarification first, the comment around volume back to the 2019 level, is that for total RTM or are you talking about intermodal specifically as well? And then my main question is really...

Unnamed Speaker: No, I think that's right. I think we told the market at many conferences that Q1 was going to be a very tough comp. If you remember last year, our EPS was up 38%, and our OR was 61%, which is not a winter-like type of OR. So, we know that. We've baked that in to our forecast and into our 10%. We've accounted for regular winter. We did start, and as Pat said, we had seven days of deep freeze in the west. Hopefully, that's behind us. It's behind us for now, and hopefully, as we get into February, then we won't get that sustained cold. But, yeah, I mean, we know that Q1 was going to be a tough comp, but that's all factored in into our 10% EPS growth for the year.

Speaker Change #136: And again I think in terms of dividend I am very proud to say that thats. The 28 year that we've increased our dividend and that's very good. So that's what we're thinking and we're thinking long term and without any jerky reaction.

Fadi Chamoun: If you can extend kind of the outlook that you talked about, mid-single-digit RTM, like, if we take that into... I'm going to ask you to share with us your thoughts on revenue. What are the moving parts, like from a mixed perspective?

Speaker Change #117: Thanks for the question, Brendan.

Fadi Chamoun: I'm guessing if you add pricing incremental to that five, it gets you high single digits, but what are your thoughts on mix and how should we think about all these moving pieces from a revenue perspective? Well, that was a long two questions, but really, the second one is the critical one. So we don't forecast revenues, Fadi, but on the mid single digits, we expect that to carry out in our usual fashion. We expect the average car dollars per car to apply. And I think you guys can do the math from there. But yeah, we were pretty happy with the forecast. And with respect to the comment around the 2019 level or the pre-COVID level, is that an intermodal forecast for volume to be back to 2019 or is that a total? Yeah, I think that was your only question. And you can go to the investor relations team after the call for the other one. Our next question comes from Ravi Shanker from Morgan Stanley. Please go ahead.

Speaker Change #137: Thanks for the question Brandon.

Speaker Change #137: Yes.

Speaker Change #118: Our next question comes from Tom Wadowitz from UBS. Please go ahead. Your line is open.

Speaker Change #138: Our next question comes from Tom Waterworks from UBS. Please go ahead. Your line is open.

Speaker Change #138: Okay.

Thomas Wadewitz: Yeah, good afternoon. Wanted to ask you a little bit about trained lengths and how you view that opportunity. I think where you're running now is, you know, a little bit below where you've achieved in the past. And so would you expect to see that expand? I don't know if you can get to, you know, 8,200, 8,300 feet, something like that. And is that, you know, if you realize that, is that a potential driver of upside on what the margin might be relative to your guidance?

Thomas Wadewitz: Yes. Good afternoon wanted to ask you a little bit about train lengths and how you view that opportunity I think where youre running now.

Thomas Wadewitz: A little bit below where you've achieved in the past.

Thomas Wadewitz: And so would you expect to see that expand I don't know if you can get to 80 to 180 300 feet something like that.

Walter: Thanks, Walter, for the question.

Thomas Wadewitz: And is that if you realize that is that a potential driver of upside on on what the margin might be relative to your guidance.

Unnamed Speaker: Thank you.

Unnamed Speaker: Thanks. Our next question comes from Konark Gupta from Scotiabank.

Thomas Wadewitz: Hey, Tom, it's Derek. Good afternoon. I think when you look at it, you know, right now we can grow at a lower incremental cost with our manifest business because we can add the traffic on existing trains. You know, part of the schedule operation is remaining balanced and turning and sweating the assets.

Speaker Change #139: Hey, Tom its theyre good afternoon, I think when you look at it.

Konark Gupta: Please go ahead; your line is open.

Unnamed Speaker: Good evening, everyone, and best wishes to Doug and Remy for their respective roles. Question for Pat.

Speaker Change #139: Now we can grow at a lower incremental cost with our manifest business because we can add the traffic on existing trains part of the schedule operation is remaining balanced and turn it into sweating. The assets now when you look at it from an intermodal point of view that as something Thats been down that's coming back that will actually help our train length out as that grows throughout the year.

Pat: You said that destination performance is improving.

Thomas Wadewitz: Now, when you look at it from an intermodal point of view, that is something that's been down, that's coming back. That will actually help our train length out as that grows throughout the year. So, overall, we're well positioned to grow at a low incremental cost, and that's the key as we look at it going forward.

Unnamed Speaker: But what's your realistic target there, Pat? And what's required from your interchange partners to get to that level? Thank you for the question, and we desire to continue to squeeze that delta between launch and land. We look to get another few percentage points out of that, squeeze that gap between how we launch trains and how we bring them into terminals. We originate and terminate the majority of our traffic on our own lines, so we're not as dependent on the other carriers for that metric, and that's where I talked a bit about reducing train meet delays online, which is a product of getting trains out on time, train schedules making the train meets, and making timely crew swaps. So that's really our focus, to continue to squeeze that delta between launch and land. Thank you very much for the question. Thank you.

Ravi Shanker: Your line is open. Thanks, everyone. Tracy or Doug, can you give us an update on the Falcon service, please? What's the operational rollout been like after the first few months? What's it been like selling the product to customers, etc.? Okay, well, that's a good question.

So we're overall, we're well positioned to grow at a low incremental cost.

Speaker Change #139: The key is we look at it going forward.

Speaker Change #140: Thanks for the question.

Speaker Change #119: Thanks for the question.

Speaker Change #120: Our next question comes from Amit Mehrotra from Deutsche Bank. Please go ahead. Your line is open.

Speaker Change #141: Our next question comes from Amit Mehrotra from Deutsche Bank. Please go ahead. Your line is open.

Ravi Shanker: We'll have Derek start off on the operational side. Yeah, hey, good afternoon. No, it's been a very exciting product we have had with our partners at the FXC and Union Pacific. It is acting as one seamless service. You know, we're consistently delivering on public transport's time with our customers, and we look forward to continuing to grow that here in 2024. So there was solid momentum in 2023, and I see that partnership between the three of us only continuing to grow in 2024. Yeah, and on revenues, listen, we told everyone it's going to be very slow growth in the truck market, and that's what it is. But that's okay, right?

Amit Mehrotra: Thanks. Hi, everyone. I guess my one question would just be on yield. Obviously, there's a pricing component of yield, there's a mixed component, there's a fuel component. I think fuel was a pretty nice benefit, at least on a lag basis in the fourth quarter. And just, Lane, can you just talk about, like,

Amit Mehrotra: Thanks, Hi, everyone.

Amit Mehrotra: My one question would just be on yield.

We see there's a pricing component of yield there's a mix component with a fuel component I think fuel was a pretty nice benefit at least on a lag basis in the fourth quarter and.

Amit Mehrotra: Can you just talk about like.

Amit Mehrotra: Does yield take a step down when you adjust for that fuel and when do we actually see like the pricing benefit in the yield number obviously mix adjusted or not adjusted for mix because the concern I guess I have at least is that yield comes down in the first quarter as these fuel surcharges lag and I'm just trying to understand what the outlook or cadence of that yield improvement is as you progress this year.

Amit Mehrotra: This does you'll take a step down when you adjust for that you will.

Brandon Oglenski: Our next question comes from Brandon Oglenski from Barclays.

Amit Mehrotra: And when do we as we see like the pricing benefit in the yield number obviously mixes Justin we're not adjusted for mix.

Unnamed Speaker: Please go ahead, your line is open. Hey, good afternoon, everyone. And thanks for taking my one question.

Speaker Change #142: The concern I guess I have at least as the yield come down in the first quarter as these fuel surcharges wagon and I'm just trying to understand what the outlook of cadence of that yield improvement is as you progressed through the year.

Just, Lane, I was hoping you could update us on, you know, the change in the dividend.

Unnamed Speaker: And obviously, if you were to go to that full repurchase this year, that'd be quite a bit of cash flow out the door. So where are you seeing leverage in the near term, and especially in the context of, you know, that 10 to 15% plan over the next three years? Would you be willing to take it up higher right now? Yeah, so as we said, we're looking at the targeted leverage over time of 2.5. I mean, if you look at this year, we finished at 2.25. We typically grow our dividends in line with earnings growth. You'll see that we're slightly below because we do that over time. And if you remember, in 2023, our dividends were up 8%, and our earnings were down 2%. So we have a long-term view. We take a long-term view on these two things.

Speaker Change #121: So I can open up, and then I can let Doug talk more a little bit about yield, but on fuel, Amit, I think when you look at the lag in the fourth quarter, it was around four or five cents favorable in the quarter, and on a year-over-year basis, it was as well. So it wasn't a big deal, and I can turn it over to you, Doug, for the mix.

Speaker Change: We're expecting it. Both the UP and FXC and us are working hand in hand to grow that. The big bid cycle is really only starting up in Q1, where we'll be going after truck business that's out there, and we hope to see some solid growth moving into the rest of the year. Thanks for your questions.

Speaker Change #143: So I can I can open up and then I can let Doug talk more a little bit about yield but on fuel amid.

When you look at the lag in the fourth quarter it was around $4 <unk> favorable.

In the quarter and on a year over year basis, it was as well.

Speaker Change #143: So it wasn't a big deal.

Speaker Change: Thank you. Our next question comes from Walter Spracklin from RBC Capital Markets. Please go ahead, your line is open. Yeah, thanks very much. Good afternoon, everyone.

Speaker Change #143: And I can turn it over to you Doug for the mix piece.

Doug McDonald: Yeah, our traffic's relatively stable, but there's always going to be a mixed component. So depending upon which product line you're talking about, it's going to have a very different impact. I mean, I'm not going to get on all of them on the call here, Amit, but we can always sit down with a trade, go and do it after. So the other thing that I want to just highlight is we should not see any impact on the container storage fees moving forward into Q1 and beyond. That'll have a big impact.

Doug Macdonald: Yes, our traffic's relatively stable, but there's always going to be a Mexican ponant, so depending upon which product line. You are talking about it's going to have a very different impact I mean, I'm not going to get on all of them want to call here, Amit So, but we can always sit down with the trade. It would go and do it after so all of the other thing that I'll just highlight as we do.

Walter Spracklin: So I wanted to zero in here on the first quarter. And I know you don't typically give quarterly guidance. But I think it's important given last year was such a tough comparison. And now you've come up to a tough start here due to the weather. Or is it is it possible?

We should not see any impact on the container storage fees moving forward into Q1 and beyond that will have a big impact.

Speaker Change #122: Thanks for the question.

Speaker Change #144: Thanks for the question.

Speaker Change: Do you think when we frame the 10% over a quarterly basis? Is it possible that you can see any growth in the first quarter given how tough the comparison is and, and the weather to start and, therefore, is most of it all kind of back-end loaded for the 10%? Thanks, Walter. Maybe I'll just start. I'll hand it over to Giselaine, but I'll start by saying it is going to be a tough comparison.

Speaker Change #123: Our next question comes from Brian Ossenbeck from JP Morgan. Please go ahead, your line is open.

Speaker Change #145: Our next question comes from Brian Austin back from Jpmorgan. Please go ahead. Your line is open.

Unnamed Speaker: I think that, as we said on Investor Day, our leverage will be 2.5% over time if economic conditions warrant it.

Brian Ossenbeck: Hey, thanks for taking the question. Doug, just wanted to ask if you can give us an update on the CN-specific projects which you quantified at the Investor Day. It sounds like maybe some of them are moving a little bit forward faster than you thought, but how does that shape look like in 2024? Is it back half-weighted like some of the broader economy stuff that you've been highlighting? And I think in the past you've also given

Brian Austin: Hey, Thanks for taking the question.

Brian Austin: Just wanted to ask if you can give us an update on the CN specific projects, which you quantified at the Investor day. It sounds like maybe some of them are moving a little bit faster.

Unnamed Speaker: So that's why we went back and toned down a little bit of our share buyback to $4 billion last year. Last year, we wanted to be opportunistic due to the stock price and where it was. And again, I think in terms of dividends, I'm very proud to say that it's the 28th year that we've increased our dividend, and that's very good. So that's what we're thinking, and we're thinking long-term and without any jerky reaction. Thanks for the question, Brendan.

Brian Austin: Faster than you thought, but how does that shape look like in 2024 is it back half weighted like some of the broader economy stuff that you've been highlighting and I think in the past you also given some.

Giselaine: We had a big quarter last year and some very different weather than the way we've started off this year, but Gis, did you want to make any comments on that? No, I think that's right. I think we told the market, you know, at many conferences that Q1 was going to be a very tough comp. If you remember last year, our EPS was up 38 percent, and our OR was 61, which is not kind of a winter-like type of OR. So we know that

Brian Ossenbeck: some visibility to how much of that is sort of contracted or

Brian Austin: Some visibility as to how much of that is sort of contracted or.

Brian Austin: Spoken for in terms of those carloads so.

Speaker Change #124: Thank you for your time, and we'll see you next time.

Date, there would be helpful. Thanks.

Speaker Change #125: Thanks Brian. I actually have the presentation in front of me just because I know I get this question too often, right? So when you're talking about some of the bulk commodities, you know, a lot of that's going to be in the new canola crush and as well as the new mines coming online. So an example is like obviously BHP, we're expecting to see some volumes there, but that won't be till 2026. And the canola crush plants look like they've been pushed back a little, so it'll be more back-end weighted towards 2026. When you look at the renewables, right, we're starting to see some of that with respect to the crush plants as well, but we're starting to see some of the renewable projects come on and some of the ethanol. But once again, that'll be a little bit more back-ended, except we should see some ethanol synergies this year. The big one that we've managed to move forward with obviously is the announcement we did with AltaGas on the export of LPG. So I'll be honest, we've actually hit our target already with respect. It'll be going forward, but on a going forward basis. We've hit the 40,000 carloads that we had at the bottom end of the forecast just with that one contract. So that's a huge, huge win for us.

Speaker Change #146: Thanks, Bryan I actually have the presentation in front of asbestos.

Thomas Wadewitz: Our next question comes from Tom Wadowitz from UBS.

I get this question too often right. So when you are talking about some of the bulk commodities a lot of that's going to be in the new canola crush and as well as the new mines coming online. So an example is like obviously BHP, we're expecting to see some volumes there, but that won't be till 2026, and the canola crush plants look like they've been pushed back a little bit more.

Unnamed Speaker: Please go ahead. Your line is open.

Unnamed Speaker: Yeah, good afternoon. I wanted to ask you a little bit about training lengths and how you view that opportunity. I think where you're running now is, you know, a little bit below where you've achieved in the past. And so would you expect to see that expand? I don't know if you can get to, you know, 8,200, 8,300 feet, something like that. And is that, you know, if you realize that, is that a potential driver of upside on what the margin might be relative to your guidance?

Gis: We've baked that in into our forecast and into our 10 percent. We have accounted for regular winter. We did start, and as Pat said, we had seven days of deep freeze in the West. Hopefully, that's behind us. It's behind us for now, and hopefully, as we get into February, then we won't get that sustained cold.

Speaker Change #146: Backend weighted towards 2026, when you look at the renewables right. We're starting to see some of that with respect to the crush plants as well, but we're starting to see some of the renewable projects come on and some of the ethanol, but once again that will be a little bit more back ended except we should see some ethanol synergies. This year. The big one that we've managed to move forward with.

Speaker Change #146: Obviously as the announcement, we did with all the gas on the export of LPG. So I'll be honest, we've actually hit our target already with respect that it'll be going forward, but on a going forward basis. We hit the 40000 carloads that we had at the bottom end of the forecast just with that one contract.

Gis: But yeah, I mean, we know that Q1 was going to be a tough comp, but that's all factored in into our 10 percent EPS growth for the year. Thanks, Walter, for the question. Thank you. Our next question comes from Konar Gupta from Scotiabank. Please go ahead, your line is open.

Derek: Hey, Tom, it's Derek. Good afternoon. I think when you look at it, you know, right now, we can grow at a lower incremental cost with our manifest business because we can add traffic on existing trains. You know, part of the schedule operation is remaining balanced and turning and sweating the assets. Now, when you look at it from an intermodal point of view, that is something that's been down, that is coming back. That will actually help our train length out as that grows throughout the year. So, overall, we're well positioned to grow at a low incremental cost, and that's the key as we look at it going forward. Thanks for the question.

Speaker Change #146: That's a huge huge win for us.

Speaker Change #125: Now, the Toronto Fuel Facility, that's also almost done, well, it's actually done construction in Phase 1, but we actually delayed startup because we sold out Phase 2 now, and we're actually integrating the Phase 2 construction before it starts up. So, that'll be starting up in Q1, but that's phenomenal that we've actually got it sold, so we're actually at the high end of that one by the end of this year. So, that's fantastic again. And then you've got some of the EV supply chains. Now, that's one that's actually, we're a little uncertain now. We did move about 800 carloads of product for the lithium mines from northern Quebec for export, so that is moving forward, but with the EV pushback a little bit with some of the announcements, we're expecting some of that to get pushed back, but we still see all the battery plants progressing on our line. They're still moving forward with Norfolk and some of the others, and some are still under NDA that we can't talk about. And then the last big one is the northern BC projects that we put forward, and that we did put a siding in there. Last year, we're starting to see the growth on the frac stand moving up there, as well as some of the propane coming down. So, that one is moving forward as well on target. And I'll say the very last one was our expansion within the intermodal. So, listen, we're starting to see some progress there with the volume starting to come back. We're working with our customers diligently, both on all of our ports in Halifax, in Montreal, even St. John. We restarted service there in Prince Rupert and in Vancouver, but we also started up a new service in Galt. So, we're working on that port as well, and we're trying, and we're growing mobile. So, I think overall, it's moving forward. I won't be able to give you specific numbers on that one because we're working with our customers to sell that out. I hope that was a comprehensive answer.

Now the Toronto fuel facility that is also almost done while it's actually done construction in phase one, but we actually delayed startup because we sold out phase III now and we're actually integrating the phase II construction before it starts up so that will be starting up in Q1, but thats a phenomenon that we've actually got it sold so we're actually at the high end of that one by the end of the end of this.

Konar Gupta: Good evening, everyone, and best wishes to Doug and Remy for their respective roles. Question for Pat: you said destination performance is improving. But what's your realistic target there, Pat? And what's required from your interchange partners to get to that level?

Unnamed Speaker: Our next question comes from Amit Mehrotra of Deutsche Bank.

Amit Mehrotra: Please go ahead.

Speaker Change #146: Here, So thats fantastic again, and then you got some of the EV supply chains now Thats, one thats actually were a little uncertain. Now we are we did move about 800 carloads or product lithium minds from northern Quebec for export so that is moving forward, but with the EV pushed back a little bit with some of the announcements we're expecting some of that to get pushed back but we still.

Unnamed Speaker: Your line is open.

Amit Mehrotra: Thanks.

Konar Gupta: So Connor, thank you for the question, and we desire to continue to squeeze that delta between launch and land. We look to get another few percentage points out of that, squeeze that gap between how we launch trains and how we bring them into terminals. We originate and terminate the majority of our traffic on our own line, so we're not as dependent on the other carriers for that metric, and that's where I talked a bit about reducing train meet delays online, which is a product of getting trains out on time, train schedules making the train meets, and making timely crew swaps, so that's really our focus, to continue to squeeze that delta between launch and land. Thank you very much for the Thank you. Our next question comes from Brandon Oglenski from Barclays. Please go ahead, your line is open. Hey, good afternoon, everyone, and thanks for taking my one question.

Unnamed Speaker: Hi everyone. I guess my one question would just be on yield.

Lane: Obviously, there's a pricing component of yield, there's a mixed component, there's a fuel component. I think fuel was a pretty nice benefit, at least on a lag basis in the fourth quarter. And just, Lane, can you just talk about, like, Does yield take a step down when you adjust for that fuel and when do we actually see like the pricing benefit in the yield number obviously mix adjusted or not adjusted for mix because the concern I guess I have at least is that yield comes down in the first quarter as these fuel surcharges lag and I'm just trying to understand what the outlook or cadence of that yield improvement is as you progress this year.

Speaker Change #146: All the battery plants progressing on our line Theres still moving forward with nor halt in some of the others and some are still under NDA that we can't talk about and then the last big one is.

Speaker Change #146: The northern BC projects that we put forward and that we did put a siding in there last year, we're starting to see the growth on the Frac sand moving up there as well as some of the propane coming down so that one is moving forward as well on target.

Speaker Change #146: And I will say the very last one was our expansion within the intermodal so listen we're starting to see some progress there with the volume starting to come back we're working with our customers diligently both on all of our parts in Halifax, and Montreal, even St. John We've restarted service, there and Prince Rupert and in Vancouver, but we also start up a new service.

Lane: So I can open up, and then I can let Doug talk a little bit more about yield, but on fuel, Amit, I think when you look at the lag in the fourth quarter, it was around four or five cents favorable in the quarter, and on a year-over-year basis, it was as well. So it wasn't a big deal, and I can turn it over to you, Doug, on the mix.

Speaker Change #146: And Gulfport as well and we're trying and we're growing mobile so I think overall, it's moving forward and I won't be able to give you specific numbers on that one because we are working with our customers to solve that out I hope that was a comprehensive answer.

Brandon Oglenski: Just Lane, I was hoping you could update us here on, you know, the change in the dividend. And obviously, if you were to go to that full repurchase this year, that'd be quite a bit of cash flow out the door. So where are you seeing leverage in the near term? And especially in the context of, you know, that 10 to 15 percent plan over the next three years, would you be willing to take it up higher right now? Yeah, so as we said, we were looking at a targeted leverage over time of 2.5. But if you look at this year, we finished at 2.25.

Speaker Change #126: Yeah, no need for a second. Thanks.

Speaker Change #147: Yes, no need for a second.

Speaker Change #147: Alright.

Speaker Change #127: Our next question comes from Justin Long from Stevens. Please go ahead, your line is open.

Speaker Change #148: Our next question comes from Justin Long from Stephens. Please go ahead. Your line is open.

Doug: Yeah, our traffic's relatively stable, but there's always going to be a mixed component. So depending upon which product line you're talking about, it's going to have a very different impact. I mean, I'm not going to get on all of them on the call here, Amit, but we can always sit down with a trade, and go and do it afterward. So the other thing that I want to just highlight is we should not see any impact on the container storage fees moving forward into Q1 and beyond. That'll have a big impact. Thanks for the question.

Justin Long: Thanks, and good afternoon. You mentioned earlier the $200 million of cost headwinds this year, but could you break that out in a little bit more detail across the three different buckets that you mentioned, and does the guidance assume that you can improve the OR year over year despite these cost headwinds, or will that be challenging?

Justin Long: Thanks, and good afternoon, you mentioned earlier, the $200 million of cost headwinds this year, but could you break that out in a little bit more detail across the three different buckets that you mentioned and does the guidance assume that you can improve.

Justin Long: Year over year, despite these cost headwinds or will that be challenging.

Brandon Oglenski: We typically grow our dividends in line with earnings growth. You'll see that we're slightly below because we do that over time. And if you remember, in 2023, our dividends were up 8%, and our earnings were down 2%. So we have a long-term view. We have a long-term view on these two things. I think that, as we said on Investor Day, our leverage will be 2.5% over time if economic conditions warrant it. That's why we went back and toned down a little bit of our share buyback to $4 billion last year. Last year, we wanted to be opportunistic due to the stock price and where it was. And again, I think, in terms of dividends, I'm very proud to say that this is the 28th year that we've increased our dividend, and that's very good.

Speaker Change #128: Yeah, thanks, Justin. So the $200 million, if you want, you know, breaking it out is about $100 million on depreciation. And I would say the other half, the other $100 million, call it half and half on incentive compensation and pension.

Speaker Change #149: Yeah. Thanks, Justin so the $200 million of breaking it out as about $100 million on depreciation and I would say the other half the other 100 million call it half and half on incentive compensation and pension.

Speaker Change #129: and absolutely, I think that, you know, having these cost headwinds, we still believe that we will improve our margins. And Tracy made the point, actually, that, you know, it's tough on margins when actually, you know, volumes is down and when volumes pick up, we do have space, as we've mentioned before, to add the traffic on some of our trains, including and especially the merchandise trains. So, we are definitely believe and, you know, that we will improve margins, you know, in 2024. Let me just add to that, Justin, you know, I have to say that I have been really pleased with our operational cost over the past, you know, two years, especially in light of some of the headwinds that we've had over that time. I think our record speaks pretty positively there and just spoke to around, you know, how we think it'll play out this year. But we'll be managing costs closely and we expect that our... Margin leverage is going to continue to grow over time.

And absolutely I think that you know.

Unnamed Speaker: Our next question comes from Brian Ossenbeck from JP Morgan.

Speaker Change #149: Having these cost headwinds we still.

Brian Ossenbeck: Please go ahead; your line is open.

Speaker Change #149: We still believe that we will improve our margins and Tracy made the point actually that.

Unnamed Speaker: Hey, thanks for taking the question.

Doug: Doug, just wanted to ask if you can give us an update on the CN-specific projects which you quantified at Investor Day. It sounds like maybe some of them are moving a little bit forward faster than you thought, but what does that shape look like in 2024? Is it back half-weighted like some of the broader economic stuff that you've been highlighting? And I think in the past you've also given some visibility to how much of that is sort of contracted or, Thank you for your time, and we'll see you next time. Thanks Brian. I actually have the presentation in front of me just because I know I get this question too often, right? So when you're talking about some of the bulk commodities, you know, a lot of that's going to be in the new canola crush and as well as the new mines coming online. So an example is, obviously, BHP. We're expecting to see some volumes there, but that won't be till 2026. And the canola crush plants look like they've been pushed back a little, so it'll be more back-end weighted towards 2026.

Speaker Change #149: It's tough on margins went actually volumes as dominant volume pick up we do have space as we've mentioned before to have to add the traffic on some of our trains, including and especially the Merchandised range. So we are definitely believe that.

Speaker Change #149: We will improve margins.

Speaker Change #150: In 2024, and let me just add to that Jeff.

Jeff Lang: To say that I have been really pleased with our operational costs.

Jeff Lang: Over the past two years, especially in light of some of the headwinds that we've had over that time I think our record speaks pretty positively there.

Brandon Oglenski: So that's what we're thinking, and we're thinking long-term and without any jerky reaction. Thanks for the question, Brendan. Our next question comes from Tom Wadewitz from UBS. Please go ahead, your line is open.

Jeff Lang: And it just spoke to you around how we think it will play out this year, but we'll be managing costs closely and we expect that our margin leverage is going to continue to grow over time.

Speaker Change #129: You know, as the volume.

Thomas Wadewitz: Yeah, good afternoon. I wanted to ask you a little bit about training length and how you view that opportunity. I think where you're running now is, you know, a little bit below where you've achieved in the past. And so would you expect to see that expand? I don't know if you can get to, you know, 8,200, 8,300 feet, something like that.

Jeff Lang: The volume strength and so that.

Speaker Change #130: So that would be the way to think about it.

Speaker Change #151: That would be the way to think about it.

Speaker Change #131: Thanks for the question. Understood. That's helpful. Thanks.

Speaker Change #152: Thanks for the understood that's helpful. Thanks.

Speaker Change #132: Our next question comes from John Chappell from Evercore ISI. Please go ahead, your line is open.

Speaker Change #153: Our next question comes from Jon Chapelle from Evercore ISI. Please go ahead. Your line is open.

Doug: When you look at renewables, right, we're starting to see some of that with respect to the crush plants as well, but we're starting to see some of the renewable projects come on, and some of the ethanol. But once again, that'll be a little bit more back-ended, except we should see some ethanol synergies this year. The big one that we've managed to move forward with obviously is the announcement we did with AltaGas on the export of LPG. So I'll be honest; we've actually hit our target already with respect. It'll be going forward, but on a going forward basis. We've hit the 40,000 carloads that we had at the bottom end of the forecast just with that one contract. So that's a huge, huge win for us.

Jonathan Chappell: Thank you. Doug, I want to go back to Rupert. You noted back to pre-COVID levels, but you also mentioned a little bit later you're continuing to work to fill Rupert. So is there any way to quantify what capacity is available in Rupert right now and how much international intermodal can grow if the economy dodges a hard landing and maybe Rupert gets up to the full capacity you envision?

Jonathan Chappell: Thank you Doug I want to go back to Rupert We noted back to pre Covid levels, but you also mentioned a little bit later, you are continuing to work to fill Rupert. So is there any way to quantify what capacity is available and Rupert right now and how much international intermodal can grow with the economy does as a hard landing and maybe Rupert gets up to full capacity you envisioned.

Thomas Wadewitz: And is that, you know, if you realize that, is that a potential driver of upside on what the margin might be relative to your guidance? Hey, Tom, it's Derek. Good afternoon. I think when you look at it, you know, right now, we can grow at a lower incremental cost with our manifest business because we can add traffic on existing trains. You know, part of the schedule operation is remaining balanced and turning and splitting the assets. Now when you look at it from an intermodal point of view, that is something that's been down, that is coming back. That will actually help our train length out as that grows throughout the year. So overall, we're well positioned to grow at a low incremental cost, and that's the key as we look at it going forward. Thanks for the question. Our next question comes from Amit Mehrotra from Deutsche Bank. Please go ahead; your line is open. Thanks. Hi everyone.

Jonathan Chappell: Okay.

Doug McDonald: So, oh, it's a good question. So, you know, Rupert is one of our, you know, it's the crown jewel we have up there, right? So, I would sit there and say, not only are we growing the intermodal, but, you know, we're growing our propane franchise for export out there, we're growing the coal still going out there. So, there's, and the wood pellets as well. So, not just that, but, you know, it's really hitting on the intermodal. I'll say the international probably dipped down to the lowest at just over half a million TEUs that we're running through the terminal. It's got a capacity just over one. So, one, 1.2, really, that we can go up to easily. And then you start to stretch the terminal a little bit, but that's great. That's where we'd love to get to with our partner DP World. So, we're working with our customers on how we fill that out. So, we're being very structured about it. And with the changes that are going on, obviously, with the Red Sea and the Suez Canal and the Panama Canal, we're seeing some, a lot of interest come to try and fill that up. So, we just want to be very diligent. We want to match it. We want to match it to our operation with both Pat and Derek, and we won't want to oversell it. We've got to make sure if we're going to contract it out with their customers that we're going to be able to move it as efficiently as we have been and keep that terminal dwell down under three days, which is really what our goal is.

Jonathan Chappell: It's a good question. So Rupert is one of our crown Jewel, we have up there right. So I would sit there and say not only are we growing the intermodal, but we're growing our propane franchise for export out there we're growing our coal still going out there. So there is and the wood pellets as well so not just that but it's really hitting on the intermodal.

Doug: Now, the Toronto Fuel Facility is also almost done, well, it's actually done construction in Phase 1, but we've actually delayed startup because we sold out Phase 2 now, and we're actually integrating the Phase 2 construction before it starts up. So, that'll be starting up in Q1, but it's phenomenal that we've actually got it sold, so we're actually at the high end of that one by the end of this year. So, that's fantastic again. And then you've got some of the EV supply chains.

The international probably dip down to the lowest at just over half a million teus that we're running through the terminal. It's got a capacity just over one so one to really that we can go up to easily and.

And then you start to stretch the terminal a little bit, but thats, great Thats, where wed love to get to with our partner DP World. So we're working with our customers on how we fill that out so we're being very structured about it and with the changes that are going on obviously with the Red Sea in the Suez Canal in the Panama Canal.

Doug: Now, that's one that we're a little uncertain about now. We did move about 800 carloads of product for the lithium mines from northern Quebec for export, so that is moving forward, but with the EV pushback a little bit with some of the announcements, we're expecting some of that to get pushed back, but we still see all the battery plants progressing on our line. They're still moving forward with Norfolk and some of the others, and some are still under NDA that we can't talk about. And then the last big one is the northern BC projects that we put forward, and we did put a siding in there. Last year, we were starting to see growth on the frac stand moving up there, as well as some of the propane coming down.

Amit Mehrotra: I guess my one question would just be on yield. Obviously, there's a pricing component of yield, there's a mix component, there's a fuel component. I think fuel was a pretty nice benefit, at least on a lag basis, in the fourth quarter. And just playing, can you just talk about like, Does yield take a step down when you adjust for that fuel? And when do we actually see, like, the pricing benefit in the yield number?

Jonathan Chappell: We're seeing some a lot of interest come to try and fill that up. So we just want to be very diligent we want to match it to our operation with both patent Derrick and we work on all of our solid we've got to make sure. If we're going to have contracted out with their customers that we're going to be able to move it as efficiently as we have been and keep that terminal dwell down under three days, which is really what our goal is.

Speaker Change #133: Thank you.

Speaker Change #154: Thank you Doug.

Speaker Change #134: Our last question will come from Michael Kiprios from Deja Gland Capital Markets. Please go ahead, your line is open.

Doug: So, that one is moving forward as well on target. And I'll say the very last one was our expansion within the intermodal. So, listen, we're starting to see some progress there with the volume starting to come back. We're working with our customers diligently, both at all of our ports in Halifax, in Montreal, even in St. John. We restarted service there in Prince Rupert and in Vancouver, but we also started up a new service in Galt. So, we're working on that port as well, and we're trying, and we're growing mobile. So, I think overall, it's moving forward.

Speaker Change #155: Our last question will come from Michael Kim from Daiwa Capital markets. Please go ahead. Your line is open.

Speaker Change: Obviously, mix adjusted or not adjusted for mix, because the concern, I guess I have, at least, is that yield comes down in the first quarter as these fuel surcharges lag. And I'm just trying to understand what the outlook or cadence of that yield improvement is as you progress this year. So I can open up and then I can let Doug talk a little bit more about you. But on fuel, Amit, I think when you look at the lag in the fourth quarter, it was around four or five cents favorable in the quarter. And on a year-over-year basis, it was as well, so it wasn't a big deal.

Michael Kiprios: Good afternoon and thanks for taking my question. Your fourth quarter grain volumes are down 13% and you had mentioned earlier that maybe some of the grain farmers decide to hold back on some volume through the end of the year. Do you have an idea what percentage of this grain you expect to be carried over and recooked in the first half? And maybe an update on the discussion with the farmers and the current grain dynamics, I believe. Thank you.

Michael Kim: Good afternoon, and thanks for taking my question.

Michael Kim: Fourth quarter grain volumes were down 13% then you had mentioned earlier that maybe some of the grain farmers decided to hold back on some volume through the end of the year do you have an idea of what percentage of this screen you expect be carried over and recouped in the first half and maybe an update on the discussion with the farmers and the green dynamics separately. Thank you.

Speaker Change #135: Sure, I'll talk specifically about Canadian grain first, and then the U.S. grain is a little bit, well, I'll just go Canadian grain first, how's that? So, listen, the prices, farmers have had great pricing the last couple of years, so they're used to getting a very good price on the market. So, this year, the world market, actually, there's a lot of surplus from other countries out there. They've had good crops, it's driven the price down, so the Canadian farmer is sitting there saying, I'm going to hold on to grain until I get a better price. So, we've had probably one of the lowest Q4 demands I've seen in my history at the company, but they still have to sell, right? So, they're sitting on farm, that inventory is there, anything that we didn't move in Q4 will shift into Q1 and Q2, so that's great. Now, I think you can just really take what we did last year, say what didn't move, and it just moves further out, so I won't give specific numbers. At the same time, I do believe we've had a fairly good crop. You know, the StatsCan brought it up to $67 million. Metric tons in their forecast, finally, and that is actually a good-sized crop, not as good as last year, but a really great crop, and I think a lot of it was really good on our network. So, I think we have a lot of grain to move. We're going to be very busy for the rest of Q1 with Pat and Derek, and I think we're going to have a really good tail end to Q2.

Doug: I won't be able to give you specific numbers on that one because we're working with our customers to sell it out.

Michael Kim: Sure.

Speaker Change #156: Specifically about the Canadian grain first and then the U S grain is a little bit I'll just go Canadian Greenfield How's that so listen the prices farmers have had great pricing in the last couple of years. So they're used to getting a very good price on the market. So this year the world market actually Theres a lot of surplus from other countries out there they've had a good <unk>.

Doug: I hope that was a comprehensive answer.

Doug: Yeah, no need for a second. Thanks.

Unnamed Speaker: Our next question comes from Justin Long from Stevens.

Justin Long: Please go ahead; your line is open.

Unnamed Speaker: Thanks, and good afternoon. You mentioned earlier the $200 million of cost headwinds this year, but could you break that out in a little bit more detail across the three different buckets that you mentioned, and does the guidance assume that you can improve OR year over year despite these cost headwinds, or will that be challenging? Yeah, thanks, Justin. So the $200 million, if you want, you know, breaking it out, it's about $100 million in depreciation. And I would say the other half, the other $100 million, call it half and half on incentive compensation and pension. And absolutely, I think that, you know, having these cost headwinds, we still believe that we will improve our margins.

Crops, it's driven the price down so the Canadian farmer is sitting there, saying I'm going to hold onto Grand till I get a better price. So we've had probably one of the lowest Q4 demands I've seen in my history at the company, but they still have to sell right. So they're sitting on farm that inventory is there anything that we didn't move in Q4 will shift into Q1 and Q2.

Speaker Change: And I can turn it over to you, Doug, for the mix. Yeah, our traffic's relatively stable, but there's always going to be a mixed component. So depending upon which product line you're talking about, it's going to have a very different impact. I mean, I'm not going to get on all of them on the collar about it.

Doug: So, but we can always sit down with a trade; we'll go and do it after. So all the other things that I want to just highlight are we did, we should not see any impact on the container storage fees moving forward into Q1 and beyond. That's a big, Thanks for the question. Our next question comes from Brian Ossenbeck from J.P. Morgan. Please go ahead, your line is open.

Speaker Change #156: So that's great now I think you can just really take what we did last year or say what didn't move and it just moves further out so I won't give specific numbers at the same time I do believe we've had a fairly good crop.

Speaker Change #156: SaaS brought it up to 67 million metric tons in their forecast finally, and that is actually a good sized crop not as good as last year, but I really great crop and I think a lot of it was really good on our network. So I think we have a lot of grain to move we're going to be very busy for the rest of Q1 with patent Derek and I think we're going to have a really good tail into Q2.

Unnamed Speaker: And Tracy made the point, actually, that, you know, it's tough on margins when, actually, volumes are down, and when volumes pick up, we do have space, as we've mentioned before, to add traffic on some of our trains, including and especially the merchandise trains.

Brian Ossenbeck: Hey, thanks for taking the question. Doug just wanted to ask if you can give us an update on the CN specific projects which you quantified at the end of Investor Day. It sounds like maybe some of them are moving a little bit forward faster than you thought, but what does that shape look like in 2024?

Speaker Change #136: Thanks for your time. Thank you. I appreciate it.

Speaker Change #157: Thanks for your thanks I appreciate it.

Speaker Change #157: Yes.

Speaker Change #137: This concludes the question and answer session. I would like to turn the call back over to Tracy Robinson.

Speaker Change #158: This concludes the question and answer session I would like to turn the call back over to Tracy Robinson.

Tracy: So, we definitely believe and you know that we will improve margins, you know, in 2024.

Speaker Change: Is it back half way to like some of the broader economic stuff that you've been highlighting? And I think in the past you've also given some visibility to how much of that is sort of contracted or spoken for in terms of those carloads. So an update there would be helpful. Thanks. Thanks Brian. I actually have the presentation in front of me just because I know I get this question too often, right? So when you're talking about some of the bulk commodities, you know, a lot of that's going to be in the new Canola Crush and as well as the new mines coming online. So an example is, obviously, BHP.

Tracy Robinson: Thanks, Julianne. So a strong finish to 2023, capping off seven quarters now of operational and service exits.

Tracy Robinson: Thanks Julien.

Unnamed Speaker: Let me just add to that, Justin. You know, I have to say that I have been really pleased with our operational costs over the past, you know, two years, especially in light of some of the headwinds that we've had over that time.

Tracy Robinson: A strong finish to 2023 capping off seven quarters now of operational and service excellence and a great set up as we start into 2024 stock plan is working and make the plan around the planned sale of the plant approach is driving the right results and this railroad right now is running as well as ever.

Tracy Robinson: and a great setup as we start into 2024 so our plan is working our make the plan run the plan sell the plan approach is driving the right results and this railroad right now is running as well as ever and i like the team that we have our growth initiatives are ramping up i'm really excited about the momentum and the opportunities we have over the next quarters i want to thank you all for being here with us today and we look forward to talking again very soon thank

Tracy: I think our record speaks pretty positively there and just spoke to you about how we think it'll play out this year. But we'll be managing costs closely, and we expect that our... Margin leverage is going to continue to grow over time, you know, as volume increases. So that would be the way to think about it.

Speaker Change #159: Mike the team that we have our growth initiatives are ramping up I'm really excited about the momentum and the opportunities we have over the next quarters I want to thank you all for being here with US today, and we look forward to talking again very soon thank you.

Speaker Change: We're expecting to see some volumes there, but that won't be till 2026, and the Canola Crush plants look like they've been pushed back a little to be more back-end weighted towards 2026. When you look at renewables, right, we're starting to see some of that with respect to the Crush plants as well, but we're starting to see some of the renewable projects come on and some of the But once again, that'll be a little bit more back-ended, except we should see some ethanol synergies this year. The big one that we've managed to move forward with is obviously the announcement we did with AltaGas on the export of LPG. So I'll be honest; we've actually hit our target already with respect.

Justin Long: Thanks for the question.

Justin Long: I understand. That's helpful.

Justin Long: Thanks.

Unnamed Speaker: Our next question comes from John Chappell from Evercore ISI.

Speaker Change #138: The conference call has now ended. Thank you for your participation. You may now disconnect your line.

Jonathan Chappell: Please go ahead; your line is open.

Speaker Change #160: The conference call has now ended thank you for your participation you may now disconnect your line.

Unnamed Speaker: Thank you.

Doug: Doug, I want to go back to Rupert. You mentioned returning to pre-COVID levels, but you also mentioned a little bit later you're continuing to work to fill Rupert.

Doug: So is there any way to quantify what capacity is available in Rupert right now and how much international intermodal can grow if the economy dodges a hard landing and maybe Rupert gets up to the full capacity you envision? So, oh, it's a good question. So, you know, Rupert is one of our crown jewels we have up there, right? So, I would sit there and say, not only are we growing intermodal, but, you know, we're growing our propane franchise for export out there, we're growing the coal still going out there. So, there's, and wood pellets as well. So, not just that, but, you know, it's really hitting on the intermodal.

Speaker Change: It'll be going forward, but on a going forward basis, we've hit the 40,000 carloads that we had at the bottom end of the forecast just with that one contract. So that's a huge, huge win for us. Now, the Toronto Fuel Facility, that's also almost done, well, it's actually done construction in Phase 1, but we actually delayed start-up because we sold out Phase 2 now, and we're actually integrating the Phase 2 construction before it starts up, so that'll be starting up in Q1, but that's phenomenal that we've actually got it sold, so we're actually at the high end of that one by the end of this year, so that's fantastic again. And then you got some of the EV supply chains, now that's one that's actually, we're a little uncertain now, we are, we did move about 800 carloads of product by the lithium mines from Northern Quebec for export, so that is moving forward, but with the EV pushed back a little bit with some of the announcements, we're expecting some of that to get pushed back, but we still see all the battery plants progressing on our line, they're still moving forward with Norfolk and some of the others, and some are still under NDA that we can't talk about.

Doug: I'll say the international probably dipped down to the lowest at just over half a million TEUs that we're running through the terminal. It's got a capacity of just over one. So, one, 1.2, really, that we can go up to easily. And then you start to stretch the terminal a little bit, but that's great. That's where we'd love to get to with our partner DP World. So, we're working with our customers on how we can fill that out. So, we're being very structured about it. And with the changes that are going on, obviously, with the Red Sea and the Suez Canal and the Panama Canal, we're seeing some, a lot of interest come to try and fill that up. So, we just want to be very diligent.

Doug: We want to match it to our operation with both Pat and Derek, and we won't want to oversell it. We've got to make sure that if we're going to contract it out with their customers, we're going to be able to move it as efficiently as we have been and keep that terminal dwell down under three days, which is really what our goal is. Thank you.

Speaker Change: And then the last big one is the Northern BC projects that we put forward, and that we did put a siding in there last year. We're starting to see the growth on the frack stand moving up there as well as some of the propane coming down, so that one is moving forward as well on target. And I'll say the very last one was our expansion within intermodal, so listen, we're starting to see some progress there with the volume starting to come back, we're working with our customers diligently both at all of our ports, in Halifax, in Montreal, even St. John; we restarted service there in Prince Rupert and in Vancouver, but we also started up a new service in Gulfport as well, and we're growing mobile. So I think overall it's moving forward; I won't be able to give you specific numbers on that one because we're working with our customers to sell it out. I hope that was a comprehensive answer. Yeah, no need for a second one.

Doug: Our last question will come from Michael Kiprios from Deja Gland Capital Markets. Please go ahead; your line is open. Good afternoon and thanks for taking my question. Your fourth-quarter grain volumes are down 13%, and you had mentioned earlier that maybe some grain farmers would decide to hold back on some volume through the end of the year. Do you have an idea what percentage of this grain you expect to be carried over and recooked in the first half? And maybe an update on the discussion with the farmers and the current grain dynamics? Thank you. Sure, I'll talk specifically about Canadian grain first, and then the U.S. grain is a little bit, well, I'll just go with Canadian grain first, how's that? So, listen, the prices. Farmers have had great prices for the last couple of years, so they're used to getting a very good price on the market.

Speaker Change: Thanks. Our next question comes from Justin Long from Stevens. Please go ahead, your line is open. Thanks and good afternoon.

Doug: So, this year, the world market actually has a lot of surplus from other countries out there.

Doug: They've had good crops, and that has driven the price down, so the Canadian farmer is sitting there saying, I'm going to hold on to grain until I get a better price.

Justin Long: You mentioned earlier the $200 million of cost headwinds this year, but could you break that out in a little bit more detail across the three different buckets that you mentioned? And does the guidance assume that you can improve OR year over year despite these cost headwinds, or will that be challenging? Yeah, thanks, Justin. So the $200 million, if you want, you know, breaking it out, it's about $100 million in depreciation. And I would say the other half, the other $100 million, call it half and half on incentive compensation and pension.

Doug: So, we've had probably one of the lowest Q4 demands I've seen in my history at the company, but they still have to sell, right?

Doug: So, they're sitting on the farm, that inventory is there, anything that we didn't move in Q4 will shift into Q1 and Q2, so that's great. Now, I think you can just really take what we did last year, say what didn't move, and it just moves further out, so I won't give specific numbers. At the same time, I do believe we've had a fairly good crop. You know, StatsCan brought it up to $67 million.

Speaker Change: And absolutely, I think that, you know, having these cost headwinds, we still believe that we will improve our margins. And Tracy made the point, actually, that, you know, it's tough on margins when actually, you know, volumes are down, and volumes pick up. We do have space, as we've mentioned before, to add traffic on some of our trains, including and especially the merchandise trains.

Doug: Metric tons in their forecast, finally, and that is actually a good-sized crop, not as good as last year, but a really great crop, and I think a lot of it was really good on our network. So, I think we have a lot of grain to move. We're going to be very busy for the rest of Q1 with Pat and Derek, and I think we're going to have a really good tail end to Q2. Thanks for your time. Thank you. I appreciate it.

Speaker Change: So we are definitely believing, you know, that we will improve margins, you know, in 2024. Let me just add to that, Justin. I'd have to say that I have been really pleased with our operational cost performance over the past, you know, two years, and especially in light of some of the headwinds that we've had over that time. I think our record speaks pretty positively there.

Unnamed Speaker: This concludes the question and answer session.

Unnamed Speaker: I would like to turn the call back over to Tracy Robinson.

Justin Long: And I just spoke to you about how we think it'll play out this year. But we'll be managing costs closely, and we expect that our margin leverage is going to continue to grow. So that would be the way to think about it.

Tracy Robinson: Thanks, Julianne. So a strong finish to 2023, capping off seven quarters now of operational and service exits, and a great setup as we start into 2024 so our plan is working our make the plan run the plan sell the plan approach is driving the right results and this railroad right now is running as well as ever and i like the team that we have our growth initiatives are ramping up i'm really excited about the momentum and the opportunities we have over the next quarters i want to thank you all for being here with us today and we look forward to talking again very soon thank, The conference call has now ended.

Justin Long: Thanks. Our next question comes from John Chappell from Evercore ISI. Please go ahead, your line is open.

Jonathan Chappell: Thank you. Doug, I want to go back to Rupert. You noted back to pre-COVID levels, but you also mentioned a little bit later that you're continuing to work to fill Rupert. So is there any way to quantify what capacity is available in Rupert right now and how much international and intermodal traffic can grow if the economy dodges a hard landing and maybe Rupert gets up to the full capacity you envisioned? Oh, it's a good question.

Unnamed Speaker: Thank you for your participation. You may now disconnect your line.

Doug: So, you know, Rupert is one of our crown jewels we have up there, right? So, I would sit there and say, not only are we growing intermodal, but we're growing our propane franchise for export out there. We're growing coal still going out there. So, there's, and wood pellets as well. So, not just that, but, you know, it's really hitting on the intermodal. I'll say the international probably dipped down to the lowest at just over half a million TEUs that were running through the terminal. It's got a capacity just over one. So, one, 1.2, really, that we can go up to easily. And then you start to stretch the terminal a little bit, but that's great.

Doug: That's where we'd love to get to with our partner DP World. So, we're working with our customers on how we fill that out. So, we're being very structured about it. And with the changes that are going on, obviously, with the Red Sea and the Suez Canal and the Panama Canal, we're seeing some, a lot of interest come to try and fill that up. So, we just want to be very diligent.

Doug: We want to match it to our operation with both Pat and Derek, and we won't want to oversell it. We've got to make sure if we're going to contract it out with their customers that we're going to be able to move it as efficiently as we have been and keep that terminal dwell time down under three days, which is really what our goal is. Thank you. Our last question will come from Michael Kiprios of Dejavu Capital Markets. Please go ahead; your line is open.

Michael Kiprios: Good afternoon, and thanks for taking my question. Your fourth-quarter grain volumes are down 13%. And you had mentioned earlier that maybe some of the grain farmers would decide to hold back on some volume through the end of the year. Do you have an idea what percentage of this grain you expect to be carried over and recouped in the first half? And maybe an update on the discussion with the farmers and the current grain dynamics? Thank you. Sure, I'll talk specifically about Canadian grain first, and then the U.S. grain is a little bit... I'll just go with Canadian grain first. How's that? So listen, the prices. Farmers have had great prices in the last couple of years. So they're used to getting a very good price on the market.

Michael Kiprios: So this year, the world market, actually, there's a lot of surplus from other countries out there because they've had good crops. It's driven the price down. So the Canadian farmer is sitting there saying, I'm going to hold on to grain until I get a better price. So we've had probably one of the lowest Q4 demands I've seen in my history at the company, but they still have to sell. So they're sitting on the farm, that inventory is there.

Michael Kiprios: Anything that we didn't move in Q4, we'll shift into Q1 and Q2. So that's great. Now, I think you can just really take what we did last year, say what didn't move, and it just moves further out. So I won't give specific numbers.

Michael Kiprios: At the same time, I do believe we've had a fairly good crop. StatsCan brought it up to 67 million metric tons in their forecast, finally. And that is actually a good size crop, not as good as last year, but a really great crop. And I think a lot of it was really good on our network.

Michael Kiprios: So I think we have a lot of grain to move. We're going to be very busy for the rest of Q1 with Pat and Derek, and I think we're going to have a really good tail into Q2.

Michael Kiprios: Thanks for your time. Thank you. I appreciate it. This concludes the question and answer session. I would like to turn the call back over to Tracy Robinson.

Tracy Robinson: Thanks, Julian. So a strong finish to 2023, capping off seven quarters now of operation and service, and a great setup as we start into 2024. So our plan is working. Our make the plan, run the plan, sell the plan approach is driving the right results, and this railroad is running as well as ever, and I like the team that we have. Our growth initiatives are ramping up. I'm really excited about the momentum and the opportunities we have over the next quarters.

Speaker Change: I want to thank you all for being here with us today, and we look forward to talking again very soon. Thank you. The conference call has now ended. Thank you for your participation. You may now disconnect your line.