Q1 2025 Canadian Pacific Kansas City Ltd Earnings Call

Operator: Standby, we're about to begin.

Please standby we're about to begin.

Beau: Good afternoon, everyone. My name is Beau, and I will...

Bob: Good afternoon, everyone. My name is Bob and I will be your conference operator today at this time I would like to welcome everyone to see Pkc's first quarter 2025 conference call the.

Operator: Operator Today. At this time, I would like to welcome everyone to CPKC's first quarter 2025 Slides accompanying today's call are available at investor.com.

Bob: Slides accompanying today's call are available at Investor Dot C. P. K C. R. Dotcom all lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question simply press Star then the number one on your telephone keypad. If you would like to withdraw your question press.

Operator: KCR . All lines have been placed on mute to prevent any background noise. If you would like to ask a question, simply press star 9. would like to withdraw your question press star 2.

Chris: I would now like to Vice President, Thank you both.

Christian: Starts you I would now like to introduce Mr. Christian <unk>, Vice President capital markets to begin the conference call. Please go ahead Sir.

Speaker Change: Thank you Paul.

Keith Creel: Good afternoon, everyone, and thank you for joining us today. Before we begin, I want to remind you this presentation contains forward-looking information. Actual results may differ materially. The risks, uncertainties, and other factors that could influence actual results are described on slide two, in the press release, and in the MD&A filed with Canadian and U.S. regulators. This presentation also contains non-GAP measures outlined on slide three.

Speaker Change: Afternoon, everyone and thank you for joining us today before we begin I want to remind you. This presentation contains forward looking information actual results may differ materially the risks uncertainties and other factors that could influence actual results are described on slide two in the press release and in the MD&A filed with Canadian and U S. Regulators. This presentation also.

Speaker Change: Contains non-GAAP measures outlined on slide three.

Keith Creel: With me here today is Keith Creel, our President and Chief Executive Officer, Nadeem Velani, our Executive Vice President and Chief Financial Officer, John Brooks, our Executive Vice President and Chief Marketing Officer, and Mark Redd, our Executive Vice President and Chief Operating Officer.

With me here today is Keith Creel, our President and Chief Executive Officer, Dean <unk>, Our executive Vice President and Chief Financial Officer, John Brooks, Our executive Vice President and Chief Marketing Officer, and Mark <unk>, Our executive Vice President and Chief operating officer. The formal remarks will be followed by Q&A and the interest of time, we would appreciate if you limit your questions to <unk>.

Keith Creel: The formal remarks will be followed by Q&A. In the interest of time, we would appreciate if you limit your questions to one.

Keith Creel: It is now my pleasure to introduce our President and CEO, Mr. Keith Creel. Hey, thanks, Chris. That's certainly great to be with here with everyone here with everyone today.

Speaker Change: It is now my pleasure to introduce our president and CEO, Mr. Keith Creel it thanks, Chris.

Speaker Change: Certainly great to be with you with everyone here with everyone today for storage business.

Keith Creel: First word of business. I'd be remiss not to pay tribute and express my appreciation to the 20,000-strong team of railroaders we have spread across three nations that I get the privilege to serve with on a daily basis that actually produce these results, results that certainly Demonstrate industry best performance. First quarter, the team delivered revenue of $3.8 billion, which is up 8%, the revenue growth. is driven by volume growth of 4%, an operating ratio of 62.5, which is 150 basis point improvement, and industry best earnings growth at 14%, producing $1.06 of earnings.

Speaker Change: I'd be remiss not to pay tribute and express my appreciation to the 20000 strong team of railroad or as we have spread across three nations that I get privilege to serve with them on a daily basis that actually produce these results results that certainly.

Speaker Change: [noise] demonstrate industry best performance.

Speaker Change: First quarter the team delivered revenue of $3 8 billion, which is up 8% revenue growth.

Speaker Change: This is driven by volume growth of 4%.

Speaker Change: An operating ratio of 62, five which is 150 basis point improvement.

Speaker Change: And industry best earnings growth at 14% producing a dollar in six cents of earnings finally, most importantly, a record performance from a safety perspective, driving tremendous improvement on both train accidents as well as personal injuries.

Keith Creel: Finally, most importantly, a record performance from a safety perspective, driving tremendous improvement on both train accidents as well as personal injury.

Speaker Change: If it were undoubtedly off to a strong start in 2025, and we're experiencing a strong start to the second quarter as well that being said there is certainly an undeniable macro environment uncertainty just trade policy uncertainty and currency uncertainty as such based on what we do know today, we do feel.

Speaker Change: It's prudent and responsible to adjust our guidance at this time.

Keith Creel: That said, I firmly believe as a leader, it's our responsibility to drive positive results with those things that we control. We're not paid to make excuses, crisis creates opportunities, and that's how we're approaching this uncertainty around tariffs and trade policies. Our base business remains strong, it's reflected in the results in the quarter, and our volumes year to date driven by strength in our grain portfolio, coal, potash, intermodal, including a record quarter on our Midwest Mexico Express, as well as a new partnership with Gemini. The uncertainty that's created by these shifting trade policies on a positive side is also accelerating opportunities that we always eventually felt would develop when we combined these two companies.

Speaker Change: That said I firmly believe as a leader it's our responsibility to drive positive results for those things that we control.

Speaker Change: Not paid to make excuses crisis creates opportunities and that's how we're approaching this uncertainty around tariffs and trade policies. Our base business remains strong it's reflected in the results in the quarter and our volumes year to date driven by strength in our green portfolio coal potash intermodal, including a record quarter on a Midwest Mexico.

Speaker Change: For us as well as the new partnership with Gemini.

Speaker Change: The uncertainty.

Speaker Change: That's created by these shifting trade policies on a positive side is also accelerating opportunities that we always eventually felt with developed when we combine these two companies.

Keith Creel: This unparalleled three-nation network is uniquely built for times like this. We stepped up to this trade storm that we're facing to become market makers. We're seeing opportunities with new trade flows between Canada and Mexico. We've got increased refined fuels, LPGs, plastics, grains that our customers in Canada are sending south as they look to diversify their end markets. Our network connects to those new end markets, a land bridge to Mexico uniquely. The ability to move more appliances coming north, furniture, food products, finished vehicles, and auto parts from Mexico to Canada as well. CPKC uniquely serves as a land bridge between Canada and Mexico.

Speaker Change: Unparallel three nation network is uniquely built for times like this.

Speaker Change: We stepped into this trade storm that we're facing to become market makers were seeing opportunities for new trade flows between Canada, and Mexico, they've got increased refined fuels LPG plastics grains that our customers in Canada are sending south as they look to diversify their end markets are network connects to those.

Speaker Change: Even in markets that land bridge to Mexico uniquely the ability to move more appliances coming north furniture food products finished vehicles and auto parts from Mexico to Canada as well see PKC uniquely serves as a land bridge between Canada, and Mexico were working closely with our customers and creating these industry unique positive outcomes.

Keith Creel: We're working closely with our customers in creating these industry unique positive outcomes.

Keith Creel: But it's not just at the customer level that we're driving these results. Our teams are working closely with the government in Canada, at the federal, provincial level, as well as the government in Mexico regarding policies that could further incentivize growing Canada to Mexico trade volumes. We're hearing from both governments a genuine desire to see the Canada-Mexico trade relationship mature and deepen, and we're playing a major role in supporting that agenda.

Speaker Change: But it's not just that the cover level customer level that we are driving these results. Our teams are working closely with the government in Canada at the federal provincial level as well as the government of Mexico regarding policies that could further in center buys growing Canada, Mexico trade bodies, we're hearing from both governments a genuine desire to see the Canada, Mexico trade.

Speaker Change: They ship mature and deepen and we're playing a major role in supporting that agenda agenda.

Keith Creel: Now let's talk more on the U.S. front with the FRA, another very encouraging area of opportunity. Positive developments and opportunities that we've been actively working on from a regulatory perspective.

Speaker Change: Now, let's talk more on the U S front with the F. R E. Another very encouraging area of opportunity positive developments and opportunities that we've been actively working on from a regulatory perspective I'm extremely encouraged by the early discussions with Secretary Duffy.

Keith Creel: I'm extremely encouraged by the early discussions with Secretary Duffy and the U.S. Department of Transportation team, especially those in place at the FRA on their willingness to implement process changes and utilization of technology to deliver safer and more reliable outcomes. It makes too much sense not to do these things.

Speaker Change: And the U S Department of transportation team, especially those in place at the F. R E on their willingness to implement process changes and utilization of technology.

Speaker Change: To deliver safer more reliable outcomes. It makes too much sense not to do these things Mark will get into the details they're fact based data driven.

Mark Redd: Mark will get into the details. They're fact-based, data-driven results and opportunities that the regulator wants. to embrace for best outcomes from a safety perspective as well as from a service perspective. This is all, again, refreshing change in my mind, common sense, best sense, value-creating change.

Speaker Change: Results are and opportunities that the regulator wants.

Speaker Change: To embrace for best outcomes from a safety perspective, as well as from a surface perspective. This is all again refreshing change in my mind common sense best sense value, creating change.

Keith Creel: In line with other value creation opportunities that we realized in the quarter, the PCRC, the Panama Canal Railway, as you've seen early in the month after careful evaluation, we made the decision to divest our 50% stake in the railroad. The sale of this nine core asset to a key strategic partner, a major customer of the PCRC allows us to focus on our core business and generates additional capital that we deploy to create value for shareholders elsewhere. and our three nation network.

Speaker Change: In line with other value creation opportunities that we realized in the quarter. The P. C. R C. The Panama Canal railway as you've seen early in the mice after careful evaluation.

Speaker Change: We made the decision to divest our 50% stake in the railroad the sale of this non core asset to a key strategic partner a major customer the PCR C allows us to focus on our core business and generates additional capital that can be deployed to create value for our shareholders elsewhere.

Speaker Change: And our three nation network with shareholder returns and other areas of strength last month, having delivered on our commitment to repay debt and reduce our leverage following the merger, we announced a new 4% share buyback program and just yesterday, we announced a 20% increase in our core.

Keith Creel: When shareholder returns another area of strength last month having delivered on our commitment to repay debt and reduce our leverage following the merger, we announced a new 4% share buyback program. And just yesterday, we announced a 20% increase in our quarterly dividend. I'm very pleased for this company to be in a position of strength again to begin returning cash to shareholders, particularly amidst a volatile market. So in closing, let me say this, the short-term uncertainties undoubtedly from the macro to trade policies, that said, this network is performing extremely well, and volumes continue to be strong.

Speaker Change: Dividend I'm very pleased with this company to be in a position of strength again to begin returning cash to shareholders, particularly amidst a volatile market.

Speaker Change: So in closing let me say this the short term.

Speaker Change: Uncertainties undoubtedly from the macro to trade policies that said this network is performing extremely well and volumes continued to be strong with continued the momentum we carried for 2020 for the first four months of 2025, just as we told you. We would do we have the opportunity the network and the team to drive a differentiated outcome.

Keith Creel: We've continued the momentum we carried from 2024 to the first four months of 2025, just as we told you we would do.

Keith Creel: We have the opportunity, the network and the team to drive a differentiated outcome, and that's exactly what we will do.

Speaker Change: And that's exactly what we will do so.

Keith Creel: So with that said, I'm going to turn it over to Mark to speak a bit to the operation. John, provide some color on the markets, Nadeem on the numbers, and then we'll open it up for questions.

So with that said I'm going to turn it over to mark to speak a bit to the operation John provide some color on the markets name on the numbers and then well open up for questions. What do you mark Thank.

Mark Redd: Over to you, Mark. Okay, yeah. Thank you, Keith, and good afternoon. The operating team did deliver another strong performance for the quarter, demonstrating why they're the best in the business. We're focused on safely delivering our precision scheduled service model is delivering exceptional results. Even during some of the challenging winter operating conditions throughout most of February. Dealing with three consecutive weeks of extreme cold is no easy feat.

Mark: Thank you Keith.

Mark: Good afternoon.

Mark: Operating team did deliver another strong strong performance for the quarter demonstrating why they are the best in the business, they're focused on safely delivering our precision scheduled service model is delivering exceptional results even during some of the challenging winter operating conditions throughout most of February.

Mark: Healing with three consecutive weeks of extreme Cowen is no easy feat.

Mark Redd: And I'm particularly proud of how quickly our network bounced back to produce a record. We have carried this momentum also into second quarter. Think about the results. We continue to drive strong year over year operating improvements. Our train weight and length improved 5% and 4%. Our locomotive productivity improved 3%. Fuel efficiency was flat despite the challenging winter. We deliver it on strong demand and in March we delivered the strongest daily GTMs in our combined company. We met demand safely, efficiently, in part by leveraging our prior investments in locomotive interoperability, allowing us to send power from the southern portion of the network to the western portion of Canada, where we saw a significant surge in GDP.

Mark: Particularly proud of how quickly our network bounce back to produce a record March we have carried this momentum also into second quarter.

Mark: Think about the results we continue to drive strong year over year operating improvements, our train weight and length, and 5% and 4% our locomotive productivity improved 3% fuel efficiency was flat despite the challenging winter.

Mark: We delivered on strong demand and in March we delivered the strongest daily GTS and our combined company history.

Mark: We met the demand safely efficiently and part of by leveraging our prior investments in locomotive interoperability, allowing us to send power from the southern portion of the network to the Western portion of Canada, where we saw a significant surge in GTS a resilient network is well positioned to maintain this momentum quickly adapt to <unk>.

Mark Redd: Resilient Network is well positioned to maintain this momentum, quickly adapt to changes in the operating environment.

Mark: As in the operating environment as needed.

Mark Redd: If I look at safety, um... FRA personal injuries were 0.98, which is 14% better year over year improvement. Our FRA train accident at a record 0.38, that's 58% improvement year over year and noted a record performance as a combined couple. And although we never stop striving to do better, I'm extremely proud of the team for their commitment to our home safe.

Mark: If I look at safety.

Mark: Yeah for any personal injuries were <unk> 98, which is 14% better year over year improvement our F. R. E train accident at a record 38, 58% improvement year over year and noted a record performance as a combined company.

Mark: And although we never stopped striving to do better I'm extremely proud of the team for their commitment to our homesite culture.

Mark: Oh.

Mark Redd: I look at the labor update, just turn to the labor. I'm pleased on the progress we have made in this space. Recently, we announced four-year agreements ratified by both Unifor, MWED, and USW in Canada, representing our mechanical, engineering, and clerical forces. We're also working closely with the unions in the U.S. to expand our hourly agreements. These hourly agreements will support some of the redefined crew districts that we are in the process of implementing. As we evaluate traffic flows across this new network, combining crew districts in certain areas will allow us to run extended runs, further improve cycle times, and deliver more resilient service to our customers.

If I look at the labor update just turn into labor I'm pleased on the progress we have made in this space recently, we announced four year agreements ratified by both.

Mark: Uniform <unk> and U S W and Canada, representing our mechanical engineering and clerical forces.

Mark: We're also working closely with the unions in the U S to expand our hourly agreement. So he's already agreements will support some of the redefined crew districts that we are in the process of implementing.

Mark: As we evaluate traffic flows across this new network combining crew districts in certain areas will allow us to run extended runs further improved cycle times and deliver more resilient service to our customers.

Mark Redd: Keith is Keith noted and very proud. We're working closely with the FRA on a number of initiatives that will enhance safety and generate operational improvement. including removing redundant air test at the US-Mexican border. Also securing the final waiver approval to optimize where we change bat orders, bat order wheels on our network, driving yard efficiencies and also reducing dwell at key locations like Kansas City and Laredo. Exploring our code wheel technology that when implemented in Canada, or when we did implement in Canada, we've identified 30% more defects than the standard test. And the ability to better utilize our broken rail detection in dark territories.

Speaker Change: Keith as Keith noted and very proud we're working closely with the FAA on a number of initiatives that will enhance safety and generate operational improvements, including removing redundant are taxed at the U S. Mexican border.

Speaker Change: Also secure in the final waiver approval to optimize where we change bad orders.

Speaker Change: And that older wells on our network driving <unk> yard efficiencies and also reducing dwell at key locations like Kansas City and Laredo.

Speaker Change: Florida, our coldwell technology that will that when implemented in Canada.

Speaker Change: When we did implement in Canada, we've identified 30% more defects than standard tests.

Speaker Change: And the ability to better utilize our broken rail detection the dark territories. Since we began this in 2021, we've detected 150 <unk>.

Mark Redd: Since we began this in 2021, we've detected 150 instances of broken rail preventing numerous, numerous derailments. I'm extremely encouraged by the FRA on their willingness to explore the process and technology improvements which will lead to improved safety outcomes and enhancements.

Speaker Change: Instances of broken rail preventing numerous numerous derailments I'm extremely encouraged by the FAA on their willingness to explore the process and technology improvements, which will lead to improved safety outcomes and enhance service.

Mark Redd: As I look at the balance of 2025, our capital plan is built to support safe, efficient, sustainable growth through pinpointed investment. We have capital investments coming online this year, including merger settings and CTC that we spoke about, along with targeted investments in Mexico and Kansas City area to improve fluidity through those key core We're also beginning to take on delivery of the new tier four locomotives in the coming week that will support our growth and improve reliability and fuel efficiency for We will continue to make targeted safety investments across the network, including hotbox detectors and broken rail detectors.

Speaker Change: As I look at the balance of 2025, our capital plan is built to support safe efficient sustainable growth through pinpointed investments.

Speaker Change: We have capital investments coming online. This year include the merger sidings in CPC that we spoke about along with targeted investments in Mexico, and Kansas City area to improve fluidity through those key core doors. We're also beginning to take on delivery of the new tier four locomotives ended coming week that will support our growth and improve reliability.

Speaker Change: And fuel efficiency for our fleet, we will continue to make targeted safety investments across the network, including Hotbox detectors, and broken rail detectors, which are improving safety and generating material expense savings.

Mark Redd: which are improving safety and generating material expense savings.

Mark Redd: So in closing, we have a lot of momentum operationally. This network is built to drive growth with the team that with the team that The operating team and commercial team are closely aligned and work with each other on our customers to adapt quickly to changes in demand and traffic.

Speaker Change: So in closing we have a lot of momentum operationally. This network is built to drive growth with the team there with the team to execute it the operating team and commercial team are closely aligned and work with each other on our customers to adapt quickly to changes in demand and traffic flows.

Mark Redd: With that, I'll pass. All right.

Speaker Change: I'll pass it over to John Alright, Thank you Mark and good afternoon, everyone.

John Brooks: Thank you, Mark, and good afternoon, everyone. I'm extremely pleased with the record volumes and revenue, continued strong pricing and unique value for our customers that we delivered this quarter. This performance is unique, particularly impressive if you think about the weather impacts from February, along with the macro and tariff policy uncertainty. Q2 is off to a strong start, as Keith said, and our network is performing quite well. And although we continue to face this uncertainty, the team is laser focused on what we can control, and I'm confident in our ability to deliver disciplined growth to this network.

John: Extremely pleased with the record volumes and revenue continued strong pricing and unique value for our customers that we delivered this quarter. This performance is unique particularly impressive if you think about the weather impact from February along with the macro and tariff policy uncertainty.

Speaker Change: Q2 is off to a strong start as Keith said and our network is performing quite well and although we continue to face uncertainty. The team is laser focused on what we can control and I'm confident in our ability to deliver disciplined growth to this network.

Nadeem Velani: Now looking at our Q1 results, this quarter we delivered freight revenue growth of 9% on a 4% increase in RTMs. Sense for RTM was up 5%, with strong pricing and FX partially offset by fuel and mix. Now taking a closer look at our first quarter performance, I'll speak on an FX Adjusted Results. Starting with our bulk business, grain revenues were up 4% on 3% volume growth, a record Q1 performance. Canadian grain volumes were up 12% driven by increased grain to Vancouver and Mexico if export demand remains steady and we drive unique growth from our synergies.

Speaker Change: Now looking at our Q1 results this quarter, we delivered freight revenue growth of 9% on a 4% increase in our Tms since per RPM was up 5% with strong pricing and FX, partially offset by fuel and mix now.

Speaker Change: Now taking a closer look at our first quarter performance.

Speaker Change: Speak on an FX adjusted results, starting with our bulk business grain revenues were up 4% on 3% volume growth a record Q1 performance.

Speaker Change: Canadian grain volumes were up 12% driven by increased screen to Vancouver, and Mexico export demand remains steady and we drive unique growth from our synergies.

Nadeem Velani: Now looking forward, our comps remained favorable through the first half of the year, the VRCPI was recently reported at 3.1%, and our outlook for further synergies remained strong.

Speaker Change: Now looking forward our comps remain favorable through the first half of the year. The BRC CPI was recently reported at three 1% and our outlook for further synergies remained strong.

Nadeem Velani: Moving to U.S. grain, volumes were down 5% over prior year as we saw reduced volumes of U.S. grain export. However, our U.S. grain franchise remains well-positioned with available grain stocks, and as we look ahead, we expect steady volumes across multiple outlets, including to the PNW, Canada, eastern U.S., and down to Mexico.

Speaker Change: Moving to U S grain volumes were down 5% over prior year as we saw reduced volumes of U S. Grain exports. However, our U S grain franchise remains well positioned with available grain stocks and as we look ahead, we expect steady volumes across multiple outlets, including to the PNW.

Speaker Change: Canada, Eastern U S and down to Mexico.

Nadeem Velani: We also had a record Q1 in Potash with revenues up 10% and 8% volume growth. With positive demand fundamentals and Campitex fully committed at strong levels for the first half of the year, we continue to expect another strong year of potash growth in 2025.

Speaker Change: We also had a record Q1 in potash with revenues up 10% and 8% volume growth with.

Speaker Change: With positive demand fundamentals and Canpotex fully committed at strong levels through the first half of the year. We continue to expect another strong year of potash growth in 2025.

Nadeem Velani: And to finish out bulk, we closed the quarter with coal revenue up 21% on 10% volume growth. Strength was driven by higher Canadian met coal as we moved more volume to Vancouver and Thunder Bay driven by inventory drawdowns resulting from the prior labour strikes and weather impacts.

Speaker Change: And to finish out bulk we closed the quarter with coal revenue up 21% on 10% volume growth.

Speaker Change: Strength was driven by higher Canadian met coal as we move more volume to Vancouver, and Thunder Day Thunder Bay, driven by inventory drawdowns, resulting from the prior labor strikes and weather impacts.

Nadeem Velani: Now moving to our merchandise business segment. Energy, chemicals and plastics revenue grew 3% on flat volumes. Our base ECP franchise continues to deliver volume growth across multiple commodities from synergies, self-help, market share gains, and they were offset this quarter though by lower crude volume. We had strong growth from refined fuel shipments and plastics from both the U.S. Gulf Coast and Canada into Mexico. We also posted an all-time record LPG performance in the quarter as our network is efficiently connecting Canadian production with destinations in the U.S. and Mexico.

Speaker Change: Now moving to our merchandise business segment energy chemicals, and plastics revenue grew 3% on flat volumes our base ECP franchise continues to deliver volume growth across multiple commodities from synergies and self help market share gains and they were offset this quarter, though by.

Speaker Change: Lower crude volumes.

Speaker Change: We had strong growth from refined fuel shipments in plastics from both the U S. Gulf Coast in Canada in Mexico. We also posted an all time record LPG performance in the quarter as our network as efficiently connecting Canadian production with destinations in the U S and Mexico.

Nadeem Velani: Looking ahead, we have a very positive outlook for this business segment. with opportunities across multiple commodities, improving crude fundamentals, and new opportunities for trade directly between Mexico and Canada.

Speaker Change: Looking ahead, we have a very positive outlook for this business segment.

Speaker Change: With opportunities across multiple commodities, improving crude fundamentals and new opportunities for trade directly between Mexico and Canada.

Nadeem Velani: Forest Products revenues were up 2% on 4% volume growth. We continue to drive synergies and extended length of haul in this space, despite uncertain markets and a softer base demand. Volume this quarter did benefit from higher wood pulp and paperboard, driven by synergies and a new contract that we secured last fall. Metals, minerals and consumer products revenue was down 1% on flat volumes. A softer demand environment coupled with supply chain shifts impacted the volumes in the quarter. These declines were partially offset by higher volumes of frac sand and aggregate.

Speaker Change: Forest products revenues were up 2% on 4% volume growth, we continue to drive synergies and extended length of haul in this space despite uncertain market and a softer base demand volume this quarter did benefit from higher wood pulp and paperboard driven by synergies and a new contract.

Speaker Change: That we secured last fall.

Speaker Change: Metals minerals and consumer products revenue was down 1% on flat volumes.

Speaker Change: Softer demand environment, coupled with supply chain shifts impacted the volumes in the quarter. These declines were partially offset by higher volumes of frac sand and aggregates.

Nadeem Velani: Looking forward, we see lower cross border steel demand resulting from the tariffs. However, we expect to see partial offsets from growth at two new aggregate transload terminals, along with the development of direct steel moves that our network can facilitate between Canada and Mexico.

Speaker Change: Looking forward, we see lower cross border steel demand, resulting from the tariffs. However, we expect to see partial offsets from growth at two new aggregate trans load terminals, along with the development of direct steel moves that our network can facilitate between Canada and Mexico.

Nadeem Velani: Moving on to the automotive area. Revenues were up 18% on 24% volume growth. We posted another record quarter as this continues to be an area of unique growth for CPKC, driven by our advantaged footprint serving production plants and auto compounds across North America, along with our closed loop service solution.

Speaker Change: Yes.

Speaker Change: Moving onto the automotive area revenues were up 18% and 24% volume growth we posted another record quarter. As this continues to be an area of unique growth for CP Casey driven by our advantaged footprint servicing production plants in auto compounds across North America, along with our <unk>.

Speaker Change: <unk> loop service solution.

Nadeem Velani: While evolving trade policy has resulted in choppy volumes. Our long term outlook remains strong and we're staying close with our customers to drive growth in this business segment.

Speaker Change: While evolving trade policy has resulted in choppy volumes.

Speaker Change: Our long term outlook remains strong and we're staying close with our customers to drive growth in this business segment.

Nadeem Velani: On the intermodal side, revenue and volumes were up 4%. Starting with domestic intermodal, we delivered solid performance this quarter with volumes up 8%. We are seeing steady volumes with our Canadian retail customers and strong momentum on our MMX 180-181 service as customers continue to take advantage of the fastest, most efficient cross-border rail solution between the US, Mexico, and Canada. Our volumes on this service were up 42% in Q1 and marked with our highest volume month on record. Now looking ahead, we have good line of sight to domestic intermodal growth as our business with Schneider National continues to outperform and AmeriCold's cold storage warehouse located, co-located in Kansas City starts ramping up mid-year.

Speaker Change: On the intermodal side revenue and volumes were up 4% starting with domestic intermodal we delivered solid performance this quarter with volumes up 8%, we are seeing steady volumes with our Canadian retail customers and strong momentum on our <unk> 180 181 service.

Speaker Change: As customers continue to take advantage of the fastest most efficient cross border rail solution between the U S, Mexico and Canada are.

Speaker Change: Our volumes on this service were up 42% in Q1 and March was our highest volume month on record.

Speaker Change: Now looking ahead, we have good line of sight to domestic intermodal growth as our business with Schneider National continues to outperform and Americold cold storage warehouse located co located in Kansas City starts ramping up mid year.

Nadeem Velani: On the international intermodal front, the volumes were flat in the quarter. We saw higher volumes through the port of St. John and Lazaro, primarily with half a gloid, as Gemini vessels started to ramp up in March. However, some of that growth is offset by lower volumes through Vancouver and Montreal. Looking forward, we continue to see a lot of opportunity in this space as the Gemini Alliance increasingly utilizes CPKC served ports, which you are now seeing in our volumes quarter to date. While the Trans-Pacific market is experiencing volatility as a result of tariffs, our diverse port access across North America and reliable service proposition positions us well as trade policy evolves.

Speaker Change: On the international intermodal front volumes were flat in the quarter, we saw higher volumes through the port of St. John in Lazar row, primarily with half egg Lloyd as Gemini vessels started to ramp up in March.

Speaker Change: However, some of that growth was offset by lower volumes through Vancouver and Montreal.

Speaker Change: Looking forward, we continue to see a lot of opportunity in this space as the Gemini Alliance increasingly utilizes CPE Casey Sir imports, which you are now seeing in our volumes quarter to date.

Speaker Change: While the trans Pacific market experiencing volatility as a result of tariffs or divorce or diverse port access across North America, and reliable service proposition positions us well as trade policy evolves.

Nadeem Velani: To close, while the macro in trade policy remains uncertain, we continue to be confident in the unique growth opportunities this franchise has, coupled with strong fundamentals in our bulk business and disciplined pricing. I'm extremely encouraged by this network's resiliency and this team's ability to develop and convert new markets, and I remain confident in our volume outlook for the year.

Speaker Change: To close while the macro and trade policy remains uncertain, we continue to be confident in a unique growth opportunity. This franchise has coupled with strong fundamentals in our bulk business and disciplined pricing.

Speaker Change: Im extremely encouraged by this network resiliency and this team's ability to develop and convert new markets and I remain confident in our volume outlook for the year.

Nadeem Velani: So with that, I'll now pass it over to Nadeem. Great, thanks, John. And good afternoon. Turning to our first quarter results on slide 12, CPKC's reported operating ratio was 65.3%. And the core adjusted operating ratio came in at 62.5% of 150 basis point improvement over prior year. Deluded Earnings Per Share was $0.97, and Core Adjusted Deluded Earnings Per Share was $1.06, up 14% versus last year. Taking a closer look at our expenses on slide 13, I will speak to the year-over-year variances on an effects-adjusted basis. Compton Benefits Expense was $682 million or $677 million adjusted for acquisition costs.

Speaker Change: With that I'll now pass it over to Nadeem, great. Thanks, John and good afternoon, turning to our first quarter results on Slide 12 C. Pkc's reported operating ratio was 65, 3% and the core adjusted operating ratio came in at 62, 5% of 150 basis point improvement over prior year.

Speaker Change: Diluted earnings per share was <unk> 97, and core adjusted diluted earnings per share was $1 six up 14% versus last year.

Speaker Change: Taking a closer look at our expenses on slide 13, I will speak to the year over year variances on an FX suggested basis.

Speaker Change: Comp and benefits expense was $682 million or $677 million adjusted for acquisition costs.

Nadeem Velani: The year-over-year decline was driven by lower stock-based compensation and efficiency gains from improved train weights and lower crew costs, partially offset by inflation and volume-driven increases from higher GTMs. As we look to the rest of the year, we expect our average headcount to be roughly flat, driving labor productivity gains against mid-single-digit volume growth. Fuel expense was $481 million, up 3% year-over-year. The increase was driven by 3% higher GTMs, partially offset by lower price, and continued improved efficiency. The change in fuel prices was a $22 million or 20 basis point headwind to the quarter. Materials expense was $123 million, adjusted for acquisition costs.

Speaker Change: The year over year decline was driven by lower stock based compensation and efficiency gains from improved train weights and lower crew costs, partially offset by inflation and volume driven increases from higher GTS.

Speaker Change: As we look to the rest of the year, we expect our average head count to be roughly flat driving labor productivity gains against the mid single digit volume growth.

Speaker Change: Fuel expense was $481 million up 3% year over year. The increase was driven by 3% higher GTS, partially offset by lower price and continued improved efficiency.

Speaker Change: The change in fuel prices was a $22 million or 20 basis point headwind to the quarter.

Speaker Change: Materials expense was $123 million adjusted for acquisition costs year over year increase was driven primarily by the long term parts agreement that was put in place last year driving higher materials expense favorable offset within <unk> for net savings in the quarter. We also saw higher maintenance expense this quarter driven by <unk>.

Nadeem Velani: The year-over-year increase was driven primarily by the long-term parts agreement that was put in place last year, driving higher materials expense with a favorable offset within PS&O for net savings in the quarter. We also saw higher maintenance expense this quarter, driven by unfavorable weather conditions. Equipment rents were $99 million, up 14% year-over-year. The increase was driven by higher volume as we continue to extend length of haul, particularly for our automotive business, along with reduced efficiency from weather impacts in the quarter. Appreciation amortization expense was up 4% resulting from a higher asset base. Purchase Services and Other Expense was $573 million adjusted for acquisition costs and purchase accounting, down 1% year-over-year.

Speaker Change: Unfavorable weather conditions.

Speaker Change: Equipment rents were.

Speaker Change: $99 million up 14% year over year, the increase was driven by higher volume as we continue to extend length of haul, particularly for our automotive business along with reduced efficiency from weather impacts in the quarter.

Speaker Change: Depreciation and amortization expense was up 4%, resulting from a higher asset base.

Speaker Change: Purchased services and other expense was $573 million adjusted for acquisition costs and purchase accounting.

Speaker Change: 1% year over year.

Nadeem Velani: The year-over-year decline was driven by savings from the Long-Term Parts Agreement, which I mentioned earlier, along with lower casualty expense. These savings were partially offset by the impact of lapping a $34 million one-time non-competition waiver received last year. Despite the impact of weather this quarter, we continue to drive efficiency and cost-synergy gains. These gains, along with lower inflation, are driving sustainable improvements to our cost structure. Moving below the line on slide 14, other expense was $7 million in Q1, driven by FX impacts in the quarter. Other components of net periodic benefit recovery was $107 million, reflecting primarily the lower discount rate compared to 2024.

Speaker Change: Year over year decline was driven by savings from the long term parts agreement, which I mentioned earlier, along with lower casualty expense. These savings were partially offset by the impact of lapping a 31 $34 million one time non competition waiver received last year.

Speaker Change: Despite the impact of weather this quarter, we continue to drive efficiency and cost synergy gains these gains along with lower inflation are driving sustainable improvements to our cost structure.

Speaker Change: Moving below the line on slide 14, other expense was $7 million in Q1, driven by FX impacts in the quarter other.

Speaker Change: Other components of net periodic benefit recovery was $107 million, reflecting primarily the lower discount rate compared to 2024.

Nadeem Velani: Net Interest Expense was $216 million or $211 million excluding the impact of purchase accounts. The year-over-year increase was driven by higher short-term debt balances and new long-term debt issued in the quarter, along with FX impact. Income tax expense was $292 million or $322 million adjusted for significant items and purchase accounting. For 2025, we continue to expect CBKC's core adjusted effective tax rate to be approximately 24.5%. Now turning to slide 15 in cash flow, Q1 cash provided by operating activities increased 14% to approximately $1.2 billion. continued our strong level of investment in the network with CapEx spend of $711 million in the quarter.

Speaker Change: Net interest expense was $216 million or $211 million, excluding the impact of purchase accounting the year over year increase was driven by higher short term debt balances new long term debt issued in the quarter along with FX impacts.

Speaker Change: Tax expense was $292 million or $322 million adjusted for significant items and purchase accounting.

Speaker Change: For 2025, we continue to expect CDK six core adjusted effective tax rate to be approximately 24, 5%.

Speaker Change: Now turning to slide 15, and cash flow Q1 cash provided by operating activities increased 14% to approximately $1 2 billion.

Speaker Change: We continued our strong level of investment in the network with Capex spend of $711 million in the quarter cash flow remains strong as we delivered $466 million and adjusted free cash for the quarter.

Nadeem Velani: Cash flow remains strong as we delivered $466 million in adjusted free cash for the quarter. Quarter also marked an important milestone as we resumed shareholder returns for the first time since the merger. In late February, aligned with our principles of disciplined and opportunistic shareholder returns, we announced a new 4% share repurchase program. This was an acceleration from our original plan in order to take advantage of volatility in the market. In the first month of the program, we repurchased 3.5 million shares, or approximately 9%. In line with our strategy of a balanced approach to shareholder returns, as Keith mentioned, yesterday we announced a 20% increase to our quarterly dividend.

Speaker Change: The quarter also marked an important milestone as we resumed shareholder returns for the first time since the merger in late February aligned with our principles of disciplined and opportunistic shareholder returns, we announced a new 4% share repurchase program.

Speaker Change: This was an acceleration from our original plan in order to take advantage of volatility in the market in the first months of the program, we repurchased three 5 million shares or approximately 9%.

Speaker Change: In line with our strategy of a balanced approach to shareholder returns as Keith mentioned yesterday, we announced a 20% increase to our quarterly dividend. This dividend will continue to be an important avenue to return cash to shareholders and we intend to gradually increase it over time towards a payout ratio of 20% to 30%.

Nadeem Velani: This dividend will continue to be an important avenue to return cash to shareholders, and we intend to gradually increase it over time towards a payout ratio of 20 to 30%.

Nadeem Velani: Now looking at our guidance update. In January, we gave a wider guidance range, acknowledging macro uncertainty, and we committed to updating that outlook as we learn more. Four months into the year, we are tracking right on plan with volumes up mid-single digits. The updated guidance reflects our current view of the impacts from trade policies on certain areas of our business, as well as the impact from a stronger Canadian dollar, which at current levels would present a two-point headwind to the guidance we issued in January. Taking a step back in review of the quarter, Mark and his team have the network running extremely well.

Speaker Change: Now looking at our guidance update.

Speaker Change: January we gave a wider guidance range acknowledging macro uncertainties and we're committed to updating that outlook as we learn more four months ended the year. We are tracking right on plan with volumes up mid single digits. The updated guidance reflects our current view of the impacts from trade policies on certain areas of our business.

Speaker Change: As well as the impact from a stronger Canadian dollar, which at current levels what percent or 2% a two point headwind to the guidance we issued in January.

Speaker Change: Taking a step back and review of the quarter Mark and his team have the network running extremely well John and his team are driving industry, leading growth and we are still tracking to mid single digit volume growth for the year.

Nadeem Velani: John and his team are driving industry leading growth, and we are still tracking the mid single digit volume growth for the year. We continue to deliver discipline on price and cost control, and we have resumed returning cash to shareholders. While much remains uncertain, the team continues to deliver strong results, and we're very well positioned for another year of double-digit earnings growth.

Speaker Change: We continue to deliver discipline on price and cost control and we have resumed returning cash to shareholders. While much remains uncertain. The team continues to deliver strong results and we're very well positioned for another year of double digit earnings growth.

Keith Creel: With that, Keith, I'll turn it over back to you. Okay, thanks, gentlemen.

Speaker Change: With that Keith ill turn it over back to you. Okay. Thanks, gentlemen, operator, let's open it up for questions.

Operator: Operator, let's open it up for questions. Thank you very much.

Speaker Change: Yeah.

Speaker Change: Certainly Mr. Creel. Thank you very much ladies and gentlemen at this time, if you would like to ask a question simply press Star then the number one on your telephone keypad.

Operator: Ladies... If you would like to ask a question, simply press star then the number 1 on your telephone keypad.

Operator: I would like to withdraw your question.

Speaker Change: I would like to withdraw your question Press Star two as previously highlighted please limit yourself to one question. We go first this afternoon to Scott group of Wolfe Research.

Scott: First this afternoon, to Scott Hey, thanks, afternoon. So, John, I wanted to start with you. There's seemingly this big sort of import cliff coming into the U.S. wondering, are we seeing that? Are we expecting to see the same thing into Canadian ports and Mexican ports?

Speaker Change: Okay. Thanks.

Speaker Change: Afternoon, So Jonathan I wanted to start with you.

Speaker Change: Seemingly this big sort of import cliff coming into the U S and.

Speaker Change: I'm wondering are we seeing are we expecting to see the same thing into the Canadian ports and Mexican ports.

Scott: How do you think about the impact of the COVID-19 pandemic on the economy? that and maybe this is silly but do you think there's opportunities for Canadian ports to be gaining share from U.S. ports maybe as a workaround with tariffs?

Speaker Change: How do you think about the impact of that and maybe this is silly but.

Speaker Change: Do you think there is opportunities for Canadian ports to be gaining share from U S ports, maybe as a work around with tariffs and then just like broadened out to the broader like tariff thing just.

Speaker Change: What you like what percentage of your book of business you think is ultimately.

Unknown Attendee: Smith, Larry Zimmerman, Tashana Presents, Gustavo Gabraleo a president and executive director of the Small Business Center Industry Foundation of Texas at the University of Northern California in Latin America. Small Business Center Industry Foundation of Texas at the University of Northern California in Latin America in Tariff exposed here.

Speaker Change: <unk> exposed here I know there was a bunch, but broadly in tariffs.

Unknown Attendee: Broadly, I'm terrified. Hope I got most of them. Really helpful. You got it. Thank you.

Speaker Change: Alright, let me see if I can work through that a little bit.

Speaker Change: On the international front I would say we were very different than I think what.

Speaker Change: The U S roads may or may not.

Speaker Change: Phase here in terms of that cliff.

Speaker Change: I would say, we really haven't seen a whole lot of pull ahead on on that front at all as it relates to international.

Speaker Change: Our volumes are I think uniquely positioned strong right now and I think you can definitely see it in the numbers.

Speaker Change: Right now it's simply on the basis of the partners that we've selected.

Speaker Change: The growth with Gemini and they're off to a really good start and I would tell you those those volumes both at port of St. John and add some term in Vancouver have been somewhat stronger than we expected.

Speaker Change: And again.

Speaker Change: As you know the majority of our freight over time has somewhat transitioned maybe a little bit more away from cross border U S freight to.

Speaker Change: A higher profile of Canadian destined freight in and I think we're benefiting from that right now.

Speaker Change: And maybe to that point.

Speaker Change: <unk>.

Speaker Change: Very small percent of our book Im going to say less than 1%.

Speaker Change: Is international freight that would be let's call it from China destined to the U S through through our through our Canadian part so.

Speaker Change: I would characterize that as a little risk.

Speaker Change: And honestly, we continue to see strong growth at Lazar ROE I think I've consistently said at last year. It was the fastest growing port.

Speaker Change: In North America, and frankly, the world in many cases and Lazar Road continues to show good growth.

Speaker Change: Not only with our domestic service within in Mexico.

Speaker Change: But then but then also we've seen a steady growth in some of our cross border business and that that continues today that largely has not been impacted by any tariffs.

Speaker Change: So.

Speaker Change: I feel really good about what the future holds on our international business right now.

Speaker Change: Broadly speaking on the tariffs.

Speaker Change: Certainly the automotive area is an area that.

Speaker Change: It presents some risk and choppiness that we've been watching.

Speaker Change: The steel tariffs are an area that we're keenly focused on and working with our customers on alternatives.

Speaker Change: As I look ahead.

Speaker Change: We get to new crop in the harvest in the U S. We.

Speaker Change: We'll certainly be watching how our soybean movements.

Speaker Change: Progress export to China, and what alternative markets, we can develop for for that business and really those are the areas that we're focused on.

Speaker Change: I think the good news is that.

Keith: As Keith alluded to.

Speaker Change: Really the balance of our book has been quite strong so far year to date.

Speaker Change: I Hope I got most of them are really helpful. You got it. Thank you.

Scott: Hey, Scott.

Speaker Change: Thanks Scott.

Walter: Thank you. We'll go next now to Walter <unk> with RBC capital markets. Please go ahead.

Walter Spracklin: Walter Spracklin with RBC Capital. Thanks very much, operator. Good afternoon, everyone. So my question is really on your volume cadence. And John, you mentioned that your second quarter seems to be starting out even stronger than your first and accelerating. I mean, last week was up almost 20%. And you didn't change your RTM guide as part of the EPS guide. And just wanted to dive in a little bit more as to what really is leading you to an EPS growth reduction while holding your RTMs, which your RTMs are still at mid single digit, and if anything, accelerating from here.

Speaker Change: Thanks, very much operator, good afternoon, everyone. So my question is really on your volume cadence and John you mentioned that your second quarter seems to be starting out even.

Walter: Even stronger than your first and accelerating I mean last week was up almost 20%.

Walter: And you didn't change your Artyem guide as part of the EPS Guide I just wanted to.

Walter: To dive in a little bit more as to what really is is leading you to an EPS growth reduction while holding your our Tms.

Walter: Which your Tms are still at mid single digit and if anything accelerating from here. So just curious the logic there and in terms of how you map out your guidance by each of those.

Nadeem Velani: So just curious, the logic there in terms of how you map out your your guidance by each of those by each of those in Walter, let me just take that just in terms of where the Canadian dollars has really appreciated since the beginning of the year. Our initial guidance had a Canadian dollar exchange rate around $1.42, $1.43 level. You know, I looked today, we're closer to $1.37, $1.38. So that in and of itself has an EPS impact of about two percentage points. So if you look at the low end of guidance, we went from 12% down to 10.

Walter: Each of those inputs.

Walter: Well Walter let me just take that just in terms of where the Canadian dollar is really appreciated since the beginning of the year. Our initial guidance had had.

Walter: Pat.

Walter: Canadian dollar exchange rate of around $1 $42 43 level.

Walter: Look today, we're closer to 137% 38, so that in and of itself has an EPS impact.

Walter: Of about two percentage points. So if you look at the low end of guidance. We went from 12% down to 10, and that's really the big driver of that really around the currency. So.

Nadeem Velani: And that's really the big driver of that really around the currency. So, you know, we still anticipate that mid single digit RTM growth, as I mentioned. So that's, that's the big driver. Appreciate that color. Thanks, Nadeem. Thanks, Walter.

Walter: We still anticipate that mid single digit of our Tam growth as I mentioned, so that's that's a big driver.

Speaker Change: I appreciate that color thanks, Andy.

Andy: Thanks Walter.

Unknown Attendee: Your next question. Yeah, thanks.

Speaker Change: Thank you. Your next question comes from Chris Wetherbee of Wells Fargo. Please go ahead.

Chris: Good afternoon. Maybe just to follow up on that. So I guess the low end kind of moves with FX. Should we assume that the high end kind of ticks down a little bit more maybe on the lower end of mid single digit RTMs?

Speaker Change: Yeah. Thanks, Good afternoon, maybe just a follow up on that so I guess, the low end kind of moves with FX should we assume that the high end kind of ticked down a little bit more maybe on the lower end of mid single digit RPM. So then I guess, maybe if I broaden out the question a little bit for 2025, how do you think about the <unk> in that context, maybe you want to answer on <unk> or give some thoughts.

Chris: And I guess maybe if I broaden out the question a little bit for 2025, how do you think about the OR in that context? Maybe you want to answer on 2Q or give some thoughts around the full year, whatever is helpful. Yeah, I'd say Chris, I think that's fair in terms of, you know, when we factor in some of the tariff impact and policy changes that could have an impact on the top end of volume. So, you know, maybe it's not six, maybe it's closer to five and that type of level. You know, as far as the OR, you should see sequential improvement from the 62.5.

Speaker Change: Around the full year whenever it's helpful.

Speaker Change: Yes.

Speaker Change: Hey, Chris I think that's fair in terms of.

Speaker Change: When we factor in some of the tariff impact in.

Speaker Change: Policy changes that could have an impact on the top end of volumes. So maybe it's not six maybe it's closer to five and that type of level.

Speaker Change: Okay.

Speaker Change: As far as the or you should see sequential improvement from the 62 and a half of course Q1 has typically much higher.

Chris: Of course, Q1 has a typically much higher OR than the rest of the year, and I expect that to continue to improve over the course of the year. You know, we don't anticipate the labor disruptions that impacted our ports and international volumes last year that impacted our network when we had some of those stop and starts last August. So I think the impact that we had on casualty a year ago will become a big tailwind to the OR. So I'm quite bullish about our ability to get back sub 60 and leverage this great volume that we've got to start the year.

Speaker Change: Or then the rest of the year and I expect that to continue to improve over the course of the year.

Speaker Change: Traditionally we've seen two to 250 basis point of improvement in the or and I don't see why not especially in this kind of volume environment, where we're seeing.

Speaker Change: Such a strong start to the quarter and we've got some pretty easy comps in the may.

Speaker Change: For the year I fully expect us to be able to deliver a sub 60 or for the year.

Speaker Change: I don't see why we can't do that you've got fuel prices fuel surcharge coming off that's supportive to the or kind of neutral from operating income, but still helpful.

Speaker Change: At the end of the day, we're running extremely well.

Speaker Change: At work Mark and team have at Harman and so from a efficiency point of view I think operationally, we're going to see some benefits there.

Speaker Change: We don't anticipate the labor disruptions that impacted our ports and international volumes last year that impacted our network. When we saw had some of those stops and starts last August. So I think the impact that we had on casualty a year ago was a.

Speaker Change: A big tailwind to the or so I'm quite bullish about our ability to to get back sub 60 and leverage.

Speaker Change: This great volume that we've got to start the year.

Chris: That's great. Thank you very much. Appreciate it. Thanks Chris.

Speaker Change: That's great. Thank you very much appreciate it.

Chris: Thanks, Chris.

Speaker Change: We'll go next now to Bryan Austin back of Jpmorgan. Please go ahead.

Brian Ossenbeck: Afternoon, thanks for taking the questions. John, maybe for you, I think you mentioned that the cross border really hadn't. Too much of an impact, so I just wanted to see if you could impact that a little bit more. 181 seems to be a big driver there, but I would have thought. Network issues with your peer and East, The buyback to ramp up from here.

Bryan Austin: Afternoon, Thanks for taking the questions.

Speaker Change: John maybe for you I think you mentioned that the cross border really hadn't seen too much of impacts I just wanted to see if you could impact that a little bit more of it.

Speaker Change: 180, <unk> seems to be a big driver there, but I would have thought with maybe some network issues with your peers.

Speaker Change: In the east that might've been slow down, especially with the auto.

Speaker Change: Buy ins as well so I thought there would be appreciated and then just maybe if you can talk about how we should expect the pace of the buyback to ramp up from here after a pretty strong start in the first quarter. Thank.

Speaker Change: Thank you.

John Brooks: Yeah, Brian, so maybe a couple of things there. So, you know, certainly, as some of these tariff noise rolled on and off, you know, specific to let's say autos at the beginning of April, there's no doubt we saw some choppiness and in some of those cross border flows coming out of Mexico underwear network. Now, I can tell you that has progressively smoothed out through the month. And as of the last couple days, I think all of our production facilities are up and running and shipping automobiles. So I feel good on that. You know, the domestic product that you're talking about, the MMX, those volumes have just continued to be growing and strong.

Speaker Change: Yes, Brian So maybe a couple of things there. So certainly as some of the tariff noise rolled on and off specific let's say autos at the beginning of April.

Speaker Change: No doubt we saw some choppiness in some of those cross border flows coming out of Mexico onto our network now I can tell you that has progressively smoothed out through the month and as of the last couple of days I think all of our production facilities are up and running and shipping automobiles. So.

Speaker Change: I feel good on that.

Domestic product.

Speaker Change: That youre talking about the <unk>.

Speaker Change: Those volumes have just continued to be <unk>.

John Brooks: Schneider, you know, I'm excited to say that we've just launched this week over 200 new shipments specific to auto parts in conjunction with Schneider on our network. It's brand new business that we're bringing on. And it's really, you know, our first foray into a major way of moving that business. So I'm quite pleased with that. And, you know, frankly, we're still kind of just in the early innings of growth with CSX as we as we work on that product to the southeast. You know, other areas, you know, we've probably seen a little bit of cross border impact specific to some of our steel business that moves out of out of Mexico into the US.

Speaker Change: <unk> and strong Schneider.

I am excited to say that we've just launched this week.

Speaker Change: Over 200, new shipments specific to auto parts in conjunction with Schneider on our network, it's brand new business that we're bringing on and it's really.

Speaker Change: Our first foray into into a major way of moving that business.

So I am quite pleased with that.

Speaker Change: Frankly, we're still kind of just in the early innings of growth with CSI acts as we as we work on that product to the southeast.

Speaker Change: Other areas.

Speaker Change: We've probably seen a little bit of cross border.

Speaker Change: Impacts specific to some of our steel business that news out of out of Mexico into the U S. But that being said, we've also seen some new opportunities materialize in which we're actually shipping some steel products out of Mexico up in the Canada and some other markets.

John Brooks: But that being said, we've also seen some new opportunities materialize, in which we're actually shipping some steel products out of Mexico, up into into Canada into some other markets. So, you know, there certainly is some impact there. But the team is not resting. As Keith said, it's an all out blitz, literally, to do everything we can to make our own luck as all this uncertainty sort of unfolds on the tariff.

Speaker Change: So.

Speaker Change: Theres certainly has some impact there.

Speaker Change: But but the team is not resting as Keith said, if it's an all out Blitz literally.

Speaker Change: To do everything we can to make our own luck is all of this uncertainty sort of unfolds on the tariff front.

Nadeem Velani: Brian, just on the buyback, so you'll see the filings. I mean, we've been quite aggressive. I think as of yesterday, we bought back 20% of the program, the 4 million, 4% share buyback for the year. So 20% of that program is complete. You should expect us to finish it by the end of the year, you know, completing about 10% of the capacity per month. You know, we've been quite aggressive given the pullback, given the compression and multiples and given the fact that we're trading at a discount compared to where we should be trading. And so we're going to be aggressive up to the point that we see the stock price getting closer to our intrinsic value.

Speaker Change: Hey, Brian just on the buyback. So you will see the filings I mean, we've been quite aggressive I think as of yesterday, we bought back 20% of the program.

Speaker Change: The 4 million, 4% share buyback for the for the year, So 20% of that program is complete.

Speaker Change: You should expect us to finish it by the end of the year.

Speaker Change: Completing about 10% of the.

Speaker Change: The <unk>.

Speaker Change: Capacity per months.

Speaker Change: We've been quite aggressive given the pullback given the compression in multiples.

Speaker Change: The fact that we're trading at a discount compared to where we should be trading and so we're going to be aggressive.

Speaker Change: Up to the point that we see.

Speaker Change: The stock price getting closer to our intrinsic value. So so you should expect this program to be complete by the end of the year.

Nadeem Velani: So you should expect this program to be complete by the end of the year.

Speaker Change: Okay helpful. Thank you.

Speaker Change: Thanks, Brian.

Fadi Chamoun: Fadi Chamoun BMO Thank you.

Fatty Shimon: And your next question will come from fatty Shimon of BMO capital markets. Please go ahead.

Fatty Shimon: Thank you.

Fadi Chamoun: I want to circle back on the volume framework, maybe a little bit more medium term. When this network was put together, the biggest kind of addressable market opportunity felt like being U.S.-Mexico driven in various end markets and A lot of these end markets feel like they're under attack a little bit with these trade policy, whether it's autos or steel and other things like Do you, I mean, from your comment doesn't feel like your, your outlook is dampened by any of these things. I just wanted to get some additional framework from you. Where do you see the opportunity potentially if these end markets kind of do come under attack and ultimately end up being more, more, more punitive from a gross But Fadi, I'll let John provide a little color, but I'll just say at a high level, you know, listen, if these end markets are impacted That's our job then to shift and create solutions.

Fatty Shimon: I wanted to circle back on the volume framework, maybe a little bit more medium term.

Fatty Shimon: When when the network was put together the biggest kind of addressable market opportunity might be.

Fatty Shimon: Our U S Mexico drove in various end markets.

Fatty Shimon: A lot of these markets feel like they're under attack a little bit with these trade ballsy, whether it's autos or.

Fatty Shimon: Steel and other things like.

Fatty Shimon: Do you have do you I mean.

Fatty Shimon: From your comment that and feel like you are.

Speaker Change: Your outlook is dampened by any of the things I just wanted to get some additional framework from you where do you see the opportunity potentially these end markets kind of do come under attack and ultimately end up being.

Fatty Shimon: More more more punitive from a growth perspective.

Fatty Shimon: Sorry, I'll, let John provide a little color, but I'll, just say at a high level.

Fatty Shimon: Listen if these end markets are impacted.

Fatty Shimon: That's our job then to shift and create solutions and when I talk about market makers and I'll talk about land bridge if.

Keith Creel: And when I talk about market makers, and I talk about land bridge, you know, if we lose a little bit, because of the impact of tariffs on autos or tariffs on steel, number one, we don't think it's going to be material, this thing started to settle out, it's doing exactly what we thought it would do. And the automotive manufacturers are back online, just making those, those shifts overnight are impossible to do. There's still a demand in the US for vehicles, and these OEMs are producing them. That said, this crisis that's been created with the uncertainty in Canada, Mexico, and lessening their dependence upon US markets has created opportunities, you know, making this numbers that offset some of those headwinds.

Fatty Shimon: If we lose a little bit because of the impact of tariffs on autos are tariffs on steel number one we don't think it's going to be material. This thing started to settle out it's doing exactly what we thought it would do in the automotive manufacturers are back online just making those those shifts overnight or impossible to do there is still demand in the U S for vehicles and <unk>.

Fatty Shimon: <unk> are producing in that.

Fatty Shimon: That said this crisis, that's been created with the uncertainty in Canada, Mexico, and and lessening their dependents upon U S markets has created opportunities.

Fatty Shimon: They can this numbers that offset some of those headwinds just over the last month, John can give you more color and names if necessary, but theres over $100 million of new revenue that this crisis has created.

Keith Creel: Just over the last month, John could give you more color and names, if necessary, but there's over $100 million of new revenue that this crisis has created, that originates in Alberta that goes to Mexico. So you start thinking about the puts and the takes. And this, again, this network is uniquely enabled to be able to do that. So if we lose here, we're going to gain there. And it's our job to go out and convert those opportunities. And that's exactly the expectation that John and his team have. And that's exactly what they're doing.

Fatty Shimon: It originates in Alberta that goes to Mexico.

Fatty Shimon: So you start thinking about the puts and takes in this again. This network is uniquely enabled to be able to do that so if we lose here, we're getting gain there and it's our job to go out and divert those opportunities and thats exactly the expectation that John and his team have and Thats exactly what theyre doing.

John Brooks: Fadi, I think, you know, from our team, we're focused on what we can control. And, and frankly, not that we're not keenly watching the tariffs evolve and understanding those impacts, but we are laser focused on the task at hand. And to Keith's point, that's that sales blitzes, that's getting our, you know, we just finished a 60 day sales blitz, where we met with over 500 customers. We believe we've developed 100 million of new wins, simply in that effort that we'll onboard, mostly in the merchandise and ECT spaces. To Keith's point, we've seen good momentum, you know, largely, I would say, again, in the, in the But it doesn't stop there.

Fatty Shimon: Saturday.

Fatty Shimon: I think you know from our team we're focused on what we can control and frankly not that we are.

Fatty Shimon: Not keenly watching the tariffs evolve and understanding those impacts, but we are laser focused on the task at hand, and the key point.

Fatty Shimon: That sales blitzes, that's getting our.

Fatty Shimon: <unk> finished the 60 days sales Blitz.

Fatty Shimon: Where we met with over 500 customers.

Fatty Shimon: We believe we've developed a 100 million of new wins.

Fatty Shimon: In that effort that we'll onboard.

Fatty Shimon: Mostly in the merchandize in ECP spaces.

Fatty Shimon: The key point, we've seen good momentum.

Speaker Change: Largely I would say again in the in the energy space, but really across all commodities to figure out how we enhance this land, Brian Chin and connect in Mexico in Canada, but it doesn't stop there.

John Brooks: It's, you know, dusting off the conversion files that we talked about back at IR day. And, you know, there's still 100 million that I've targeted to my team, there that is three to two and four to two routes that, that we can convert and provide a better product for, for our customer. So when I guess you, you put all that together, Combined with the resiliency of our bulk franchise, which, again, I think if you look back to recession and pandemic time, that bulk franchise has stood up against a lot of uncertainty. And we feel really good about the demand in coal potash and both US and Canadian grain.

Speaker Change: Dusting off the conversion files that we talked about back at IR day and.

Speaker Change: There is still a 100 million that I've targeted to my team. There that is three to $2 <unk> to two routes that that we can convert and provide a better product for our customer so.

Speaker Change: I guess, if you put all of that together.

Speaker Change: Combined with the resiliency of our bulk franchise, which again I think if you look back to recession and pandemic time.

Speaker Change: That bulk franchise has stood up against a lot of uncertainty.

Speaker Change: And we feel really good about the demand.

Speaker Change: In coal potash in both U S and Canadian grain.

Nadeem Velani: I fully expect we're going to outperform on our synergies this year.

Speaker Change: I fully expect we're going to outperform on our synergies this year.

Nadeem Velani: I'll bring you back. I think we can grow by $300 million in run rate on synergies in 2025. And I have no reason to believe we can't do that and potentially even outperform that. And I can assure you, we're going to continue to be and we have been super disciplined on our pricing. The pricing model is held in really strong. I'm super proud of the team. And we're going to keep the foot, we're going to keep it in throttle eight on the pricing front as we look forward.

Speaker Change: I'll bring you back.

Speaker Change: I think we can grow by $300 million and run rate on synergies in 2025, and I have no reason to believe we can't do that and potentially even outperform that.

Speaker Change: And I can assure you we're going to continue to be and we have been.

Speaker Change: Super disciplined on our pricing.

Pricing model has held in really strong super proud of the team and we're going to keep the foot when we're going to keep it and throttle eight.

Speaker Change: On the pricing front as we as we look forward fatty I've got I'm going to give you a case in point this is.

Keith Creel: Fadi, I'm going to give you a case in point. This is a fellow Canadian. I'm going to give you a Canadian success story that this crisis has created. So just last week, I was in Toronto. and I was having a conversation with a CEO, fellow CEO of a very large Canadian retailer about opportunities about diversifying markets about imports about exports that might not involve the United States if that's not the desired market or the warranted market to go to and the question about how many things are on Canadian shelves that Canadian consumers purchase. that yesterday originating in the United States, but where do they truly originate from?

Speaker Change: As a fellow Canadian I'm going to give you a Canadian success story.

Speaker Change: This crisis has created so just last week I was in Toronto.

Speaker Change: And I was having a conversation with them.

Speaker Change: CEO fellow CEO of a very large Canadian retailer.

Speaker Change: About opportunities about diversifying markets about imports about exports.

Speaker Change: That might not involve the United States, if that's not the desired market or.

Speaker Change: The warrant to market to go to the question about how many things are on Canadian shales, the Canadian consumers purchase.

Speaker Change: That yesterday originated in the United States, but where do they truly originate from where are they produced and if you really get into the detail.

Keith Creel: Where are they produced? And if you really get into the detail. And you're motivated to create solutions for the customer, you lead them to information that quite frankly, you see that a lot of these products In this case, are produced in Mexico, then they're trucked to the United States to be packaged and labeled and warehoused and then trucked out of the United States to go across the border. to the Canadian Shell. So is that good for the environment? I'd say no. Is that good for cost control and for optimizing a supply chain? I'd say that's not best in class.

Speaker Change: And you're motivated to create solutions for the customer you lead them to information that quite frankly.

Speaker Change: You see that a lot of these products.

Speaker Change: In this case are produced in Mexico than their truck to the United States to be packaged and labeled and warehouse and then trucked out of the United States to go across the border.

Speaker Change: So the Canadian shell so is that good for the environment I would say no.

Speaker Change: Is that good for cost control it for optimizing our supply chain I would say that's not best in class, but when you're a railroad that can uniquely connect the origin destination and the middleman is redundant or not necessary an inefficient and in some cases. They don't want you to be there that creates opportunities. So those discussions.

Keith Creel: But when you're a railroad that can uniquely connect the origin, the destination, and the middleman is redundant or not necessary and inefficient, and in some cases, they don't want you to be there, that creates opportunities. So those discussions are being had. They're being had with people that have interested and motivated minds. And for us to be able to help create some of those wins, it's just all a creative durability that this unique combination has created. Again, creating a solution that quite frankly Before was never possible, and even today, only this railroad can create that kind of solution.

Speaker Change: <unk> are being had.

Speaker Change: They are being have with people that have interested and motivated mines and for us to be able to help create some of those wins. It's just all accretive to our ability that this unique combination has created again, creating a solution that quite frankly.

Speaker Change: Before was never possible and even today only this railroad can create that kind of solution.

Keith Creel: That's the power of this network.

Speaker Change: The power of this network.

Unknown Attendee: That's great. I appreciate the details.

Speaker Change: That's great appreciate the details thanks.

Speaker Change: Thanks.

Ravi Shanker: Your next question will come from Ravi Shanker of Good afternoon, everyone. Just to follow up on the point of controlling the controllables here. What is the plan if there is a prolonged cliff in incoming port volumes? Is there a pandemic playbook you can dust off on costs? Anything you can do with labor flexibility? Or is it just a wait and see approach?

Speaker Change: Thank you. Your next question will come from Ravi Shanker of Morgan Stanley. Please go ahead.

Speaker Change: Great. Thanks, Good afternoon, everyone just a follow up on the point of <unk>.

Speaker Change: Trolling the controllable is here.

Speaker Change: Is the plan if there is a prolonged cliff in incoming port volumes is there.

Speaker Change: Pandemic playbook again dust off on costs.

Speaker Change: Anything you can do with labor flexibility or is it just a wait and see approach.

Speaker Change: No, it's never going to be a wait and see we're always paying attention to that Ravi and I can tell you I've been doing this for three decades, now and I've been a <unk> leader in this industry for two decades and I've been through several recessions up cycles down cycles, we have metrics in our company, we see slippage when it's occurring and we take action on a daily and on.

Speaker Change: The weekly basis. So we see we have visibility to this alleged clear if we see the shifts coming we know two or three weeks ahead of time, we're not going to wait two or three weeks to take action, we're going to start lining up responsible action. We can adjust crew starts we can adjust fleet sizes. We can adjust yard expenses, we have all kinds of levers there.

Speaker Change: We quite frankly have pretty good muscle memory in swing history of pulling in and swinging in this railroad and those kind of times.

Speaker Change: We're going to be the best ship in the storm Theres no doubt about it I don't think thats going to happen.

Speaker Change: Planning for a recession, but we're always prepared for one.

Keith Creel: In case I would add, I mean, we're two years in this CPKC, and we're experiencing up now on the southern region that where we can react quite quickly, move power around, crew starts, whatever it is we need to do. Again, I think he said it better, control what we can control, and that's what we will do. It's not a... Oner, so thank you.

Keith: And Keith I would add I mean, we're two years in this.

Speaker Change: C. P. Casey we're experienced enough now on the southern region that where we can react quite quickly move power around crew starts whatever it is we need to do again I think you said it better control, what we can control and Thats, what we will do it it's not an answer.

Keith: Understood. Thank you.

Keith: Yes.

Tom Wadewitz: to Tom Wadewitz. Yeah, good afternoon. So, you know, I think, Keith and John, you've had some pretty interesting commentary on kind of pivoting to the, you know, Canada, Mexico opportunity. And you mentioned 100 million opportunity out of this Alberta to Mexico. Is there more perspective you can offer? Like, if you said, not sure the right framework, but just trying to think about the size of that relative to if you said, you know, Mexico Canada relative to the size of your Mexico US business is I'm assuming it's a lot smaller, but maybe like what the starting point is.

Speaker Change: We'll go next now to Tom <unk> of UBS. Please go ahead.

Tom: Yes, good afternoon. So.

Speaker Change: Keith and John you've had some pretty interesting commentary on kind of pivoting to the.

Speaker Change: Canada, Mexico opportunity and you mentioned $100 million opportunity out of.

Speaker Change: Have you felt burger to Mexico.

Speaker Change: Is there more perspective, you can offer like if you said that should the right framework, but just trying to think about the size of that relative to if you said you know.

Speaker Change: Mexico, Canada relative to the size of your Mexico U S business is I'm, assuming it's a lot smaller but.

Speaker Change: Maybe like what the starting point is and I guess other examples of where you potentially could see growth outside of ECP or just to frame it a little bit more because it seems something new and pretty interesting, but little hard to get your arms around how to frame it or give it context. Thank you.

Tom Wadewitz: And I guess other examples of where you potentially could see growth outside of ECP or just to frame it a little bit more, because, you know, it seems something new and pretty interesting, but a little hard to get your arms around how to frame it or, you know, give it context. Thank you.

John Brooks: Yeah, Tom, it's a good question. And honestly, it's as part of this sales blitz we've deployed, it's really been trying to understand that and peg it ourselves. I can tell you between LPG, plastic, Fewles, and frankly, those have been the biggest three so far. The ECP space has led the way. Now, I'll tell you, I was down in Mexico last week meeting with a number of customers, and certainly some of the steel business down there has been impacted by cross border and that. But... Getting into a discussion with the CEO of this major steel company and really picking his brain around, well, have you sold into the Canadian market and what products would be conducive?

Tom: Tom its.

Speaker Change: Good question and it's honestly it's.

Speaker Change: As part of this sales Blitz, we've deployed it's really been trying to understand that.

Speaker Change: And peg it ourselves.

Speaker Change: I can tell you between LPG plastics.

Speaker Change: And frankly those have been the biggest three so far.

Speaker Change: The ECP has led the way I will tell you I was down in Mexico last week meeting with a number of customers.

Speaker Change: And certainly some of the steel business down there has been has been impacted by cross border in that but.

Speaker Change: Getting into a discussion with the CEO of this major steel company and really picking your brain around.

Speaker Change: Sold into the Canadian market, and what products would be conducive and frankly, maybe not dissimilar to what we stepped into when we took over kcl on the auto front.

John Brooks: And frankly, you know, maybe not dissimilar to what we stepped into when we took over KCS on the auto front, kind of that crisis and in creating something good out of that with our closed loop, we're kind of in the early innings of that in this process. And I don't, to your point, it probably isn't anywhere to the order of magnitude, you know, in terms of like Mexico into the U.S. or Canada into the U.S., but there's certainly an opportunity there. And I'll just give you another, just an example to help frame it up. Like grain that moves out of the U.S.

Speaker Change: And of that crisis, and creating something good out of that with our closed loop, we're kind of in the early innings of that in this process and I don't think to your point.

Speaker Change: It probably isn't anywhere to the mortar order of magnitude in terms of like Mexico into the U S or Canada.

Speaker Change: Into the U S.

Speaker Change: There's certainly an opportunity there and I would just give you another.

Speaker Change: Example to help frame it up like grain that moves out of the U S. Today in the Mexico.

John Brooks: today into Mexico does not have to be fumigated, that it can move, I'm going to say generally seamlessly into the market. Grain out of Canada is an area where past regulation has required this grain to be fumigated. And it also requires some different documentation and policy to move into Canada or into Mexico. And it's not that we're not doing it today. We are. But as Keith talked about, these are the things we're working with the governments on both sides of the border to say, you know, how do we foster this, in this case, grain trade in a more seamless way that we can certainly enable through our 8,500 foot grain product out of Canada and Mexico.

Speaker Change: It does not have to be fumigated debt.

Speaker Change: It can move.

Speaker Change: I'm going to say generally seamlessly into the market grain out of Canada is an area where past regulation is required this screen to be fumigated.

Speaker Change: And it also requires some different documentation and policy to move into Canada or into Mexico, and it's not it's not we're not doing it today, we are but as Keith talked about these are the things we're working with the governments on both sides of the border to say how do we foster this in.

Speaker Change: This case grain trade in a more seamless way.

Speaker Change: That we can certainly enable through our 8500 foot grain product out of Canada, and Mexico. So so look.

John Brooks: A lot said there, but I'll be able to probably hopefully quantify it a lot better as we move down this path. But I would say the most important point is we're not resting on our laurels here. We're attacking this opportunity just like we did the autos a year and a half ago, and we're already starting to see some early results.

Speaker Change: A lot.

Speaker Change: That said, there, but and I'll be able to probably hopefully quantify it.

Speaker Change: A lot better as we move down this path, but I would say the most important point is we're not resting on our laurels here. We're attacking this opportunity just like we did the autos a year and a half ago and.

Speaker Change: We're already starting to see some early early results.

John Brooks: So it sounds like it could broaden out from ECP and maybe steel and grain and could be broader than that, but you just need some kind of time to see how that develops. Is that fair?

Speaker Change: So it sounds like it could broaden out from ECP and maybe feel in grain and it could be broader than that but you just need some time to see how that develops is that fair.

Keith Creel: We got to sweat it out, you know, to Tom, to John's point talking about grain, speaking to that specifically, we had a move two weeks ago that it was a test move, a new move for us. We got oats that originated in Saskatchewan, that went all the way deep into Mexico. It's a 3000 mile unit train move. That's a pretty exciting Unknown Attendee I think the final thing to think about when you think about the power of that, but again, that fumigation is an impediment. It's additional cost. It's additional time. It affects the assets. It affects the rate we have to charge.

Speaker Change: We've got to sweat it out.

Speaker Change: Tom to John's point talking about grain is speaking to that specifically, we had to move two weeks ago that.

Speaker Change: It was a test move the needle move for us to get Oates that originated Saskatchewan that went all the way deepened in Mexico. It's a 3000 mile unit train move that's a pretty exciting.

Speaker Change: The thing to think about when you think about the power of that but again that fumigation as an impediment. It's additional costs additional time it affects the assets. It affects the rate we have to charge. It affects the customer service. So why does it need to be there we got the mines and the motivation now and the attention to the Mexican government, we've got a great spirit of <unk>.

Keith Creel: It affects the customer service. So, you know, why does it need to be there? We've got the minds and the motivation now and the attention of the Mexican government. We've got a great spirit of partnership with the Mexican government. We educate. We communicate. We eliminate those unnecessary barriers, and we incent trade, more trade to move between the nations of Canada and Mexico.

Speaker Change: With the Mexican government, we educate we communicate we eliminate those unnecessary barriers and we incent trade more trade to move between the nations of Canada and Mexico.

Speaker Change: Yes.

Unknown Attendee: Great. Thanks for the time.

Speaker Change: Great. Thanks for the time.

Kevin Chang: Your next question comes from Kevin Chang of CIBC. Good afternoon. Thanks for taking my question. Maybe just on the auto front, it does feel like, at least with this U.S. administration, you know, reshoring U.S. auto production is definitely key to their industrial policy. And I think over the past few weeks, we continue to hear more D3 OEMs and foreign OEMs, you know, talk about increasing U.S. production.

Speaker Change: Thank you. Your next question comes from Kevin Chiang of CIBC. Please go ahead.

Kevin Chiang: Good afternoon. Thanks for taking my question, maybe just on the auto front.

Kevin Chiang: Does it feel like at least with this U S administration re shoring U S auto production is down.

Kevin Chiang: Key to the industrial policy and I think over the past few weeks, we continue to hear more <unk>, three Oems and foreign Oems.

Kevin Chiang: You'll talk about increasing U S production I'd be interested in knowing what discussions you are having with these customers as they look to reshape their supply chain.

John Brooks: I'd be interested in knowing, you know, what discussions you're having with these customers as they look to reshape their supply chain and I guess how CPKC can assist with that. Well, maybe maybe a couple points on that, Kevin. I guess, first of all, as I said, at the beginning, we're, we're in a pretty good position on our auto franchise right now. We've got all our production facilities up running and shipping. And I can tell you, you know, for the most part, inventories are fairly low across at least our network and across Canada. So, so that's been actually pretty supportive of volumes.

Kevin Chiang: I guess, how <unk> can assist with that.

Kevin Chiang: Well, maybe maybe a couple points on that Kevin I.

I guess first of all.

Kevin Chiang: As I said at the beginning where we are in a pretty good position on our auto franchise right now.

Kevin Chiang: Got all our production facilities up and running and shipping and I can tell you.

Kevin Chiang: For the most part inventories are fairly low.

Kevin Chiang: Across.

Kevin Chiang: Our network and across Canada.

Kevin Chiang: So that's been actually pretty supportive of volumes and I do believe the consumer.

John Brooks: And, and I do believe the consumer as a whole, maybe has been a little more aggressive in looking to buy an automobile, maybe earlier in this year than maybe they had planned. And that's spurring some demand. I can tell you, I met with a leading automotive shipper here a couple weeks ago, and they got 60,000 unfilled orders in Canada alone. Those are sales made where they're waiting on vehicles to get into the marketplace. And that's certainly the area which, you know, we do best and we fill. You know, the other piece that I would point to is, we got 6,000 available acres across this network in three countries that we can develop.

Kevin Chiang: As a whole maybe has been a little more aggressive in looking to buy an automobile.

Kevin Chiang: Maybe earlier in this year than maybe they had planned and thats spurring some demand.

Kevin Chiang: I can tell you and I met with.

Kevin Chiang: A leading automotive shipper here a couple of weeks ago, and they got 60000 unfilled orders in Canada alone. Those are sales made where they are waiting on vehicles.

Kevin Chiang: To get into the marketplace.

Kevin Chiang: And Thats certainly the area, which we do best and we fell.

Kevin Chiang: The other piece that I would point to is we've got 6000 available acres across this network in three countries that we can develop.

John Brooks: And, and I think you've heard this story and our land value quite a bit over the years on how we've created, you know, unique opportunities for our shippers and our customers and co-location, you know, across our franchise. And certainly that is something that we've been aggressive to get into the marketplace. And, you know, frankly, we just published the nine site ready locations that we've gone out and we're actively, you know, marketing those locations with, well, not only the OEMs and automotive companies, but, you know, all sorts of supportive industry that may be looking to do more or build more in the States.

Kevin Chiang: And I think you've heard this story in our land value quite.

Kevin Chiang: Quite a bit over the years on how we've created unique opportunities for our shippers and our customers and co location.

Kevin Chiang: Across our franchise and certainly that is something that.

Kevin Chiang: We've been aggressive to get into the marketplace.

Kevin Chiang: And.

Kevin Chiang: Frankly, we just.

Kevin Chiang: Published nine site ready locations.

Kevin Chiang: That we've gone out and were actively marketing those locations with not only the Oems and automotive companies, but all sorts of supportive industry that may be looking to do more or build more in in the states.

John Brooks: So we'll see what that brings. But, you know, as it stands right now, I fully expect in our automotive franchise to continue to produce at the record rate we've been able to do really last year and through the first quarter. That's great, Calder.

Kevin Chiang: So we'll see what that brings but as it stands right now.

Kevin Chiang: I fully expect in our automotive franchise to continue to produce at the at a record rate we've been able to do really last year and through the first quarter.

Unknown Attendee: Thank you very much.

Speaker Change: That's great color. Thank you very much.

Kevin Chiang: Yeah.

Stephanie Moore: Now to Stephanie. Hi, good afternoon. Thank you. One is a quick follow-up question and just your commentary in terms of OR performance for the full year and the second quarter. Did I hear you correctly with the kind of idea that you expect OR to improve as the year progresses? Are you meaning kind of sequentially off of this first quarter level? Yeah. Okay, got it. Thank you.

Kevin Chiang: We'll go next now to Stephanie more with Jefferies. Please go ahead.

Stephanie: Hi, good afternoon. Thank you.

Speaker Change: One is a quick follow up question and just your commentary in terms of our performance.

Speaker Change: The full year and the second quarter did I hear you correctly kind of idea that you expect <unk> to improve as the year progresses are you, meaning kind of sequentially off of this first quarter level.

Speaker Change: Yes, absolutely.

Speaker Change: Okay got it. Thank you and then second more of a big picture question here.

Stephanie Moore: And then second, more of a big picture question here. You know, as you've had it, whether it was your sales blitz, or just continuing to have conversations with customers, have you, particularly those customers in Mexico or with businesses in and out of Mexico, have you seen any kind of increase in activity of maybe production move to Mexico or plans to move to Mexico, just given the disruptions or potential disruption and trade lanes, you know, from other parts of the world, and maybe viewing Mexico as a viable alternative from a manufacturing standpoint? Thanks. Well, you know what, the Industrial Development Pipeline...

Speaker Change: Well there is your sales blitz or just continuing to have conversations with customers have you, particularly those customers in Mexico are with businesses in and out of Mexico have you seen any kind of increase in activity, maybe production move to Mexico or plan to move to Mexico, just given the disruption or potential dis.

Speaker Change: <unk> and trade lane from other parts of the World and maybe viewing Mexico as a viable alternative from a manufacturing standpoint. Thanks.

Speaker Change: Well you know what.

Speaker Change: The industrial development pipeline.

John Brooks: On our network in Mexico, it was really strong. A number of projects underway, under development, under construction. I wouldn't characterize, Stephanie, that maybe we're seeing a glut of new. We've certainly seen some pause, but I would say the majority are continuing to push forward, which is something we've watched really close, given some of this uncertainty, if those projects would be shelved or changed, or the boardrooms were thinking differently around those investments. And we really haven't seen that at all on a We're going to continue to certainly push that narrative. Thank you. Appreciate it.

Speaker Change:

Speaker Change: On our network in Mexico, It was really strong.

Speaker Change: A number of projects underway underdeveloped.

Speaker Change: <unk> under construction.

Speaker Change: I wouldn't characterize Stephanie that maybe we're seeing a glut of new we've certainly seen some pause but.

Speaker Change: I would say the majority are continuing to push forward.

Speaker Change: Which is something we've watched really close given some of this uncertainty if those projects would be shelf or changed or.

Speaker Change: Sort of the boardrooms, we're thinking differently around those investments and we really haven't seen that.

Speaker Change: At all on a grand scale. So I continue to believe that our Mexican territory is right for development.

Speaker Change: And we're going to continue to certainly push that veterinary dose.

Speaker Change: Thank you I appreciate it.

Speaker Change: Yes.

Speaker Change: Okay.

Jonathan Chappell: Go next now to Jonathan Chappell. Evercore ISI Thank you. Good afternoon.

Speaker Change: Thank you we'll go next to Jonathan Chappell of Evercore Evercore ISI. Please go ahead.

Jonathan Chappell: Thank you and good afternoon.

John Brooks: John, I feel like if we didn't have the crisis to talk about, there might be a little bit more focus on Gemini. I know you were super excited about it late last year, and you've mentioned it a couple times this afternoon. Is there any way to put numbers around what the Gemini potential is, given your positioning with the two partners there, whether it's in units or revenue? And has that changed at all over what's called the 12 to 24-month period, just given some of the uncertainty that's emerged since that partnership started? You know what, John, my enthusiasm around it is not waning one bit.

Jonathan Chappell: John I feel like if we didn't have the crisis to talk about there might be a little bit more focus on Gemini now you're super excited about it late last year you mentioned a couple of times. This morning. This afternoon is there any way to put numbers around what the Gemini potential is given your positioning with the two partners there whether it's in units our revenue and has that changed at all.

Jonathan Chappell: Or kind of what's called the 12 to 24 months period.

Jonathan Chappell: Given some of the uncertainty thats emerged since that partnership started.

Jonathan Chappell: John.

Jonathan Chappell: <unk> azzam around it has not waned one bit actually there.

John Brooks: Actually, it started off, I would say, even faster than we anticipated. DP World is doing a tremendous job with Gemini at Centerm. We are tempted to quantify it a little bit for you, but we're moving quickly towards two trains a day. That's the pressure I'm wanting to put on Mark and the team in Vancouver to get the two trains a day launched out of Centerm, and the majority of that tied to Gemini. They've done a great job at Port of St. John. Mariska's moved their service now as part of Gemini out of Halifax down to that port, so we're super pleased with that.

Jonathan Chappell: It started off.

Jonathan Chappell: I'd say, even faster than we anticipated DP world is doing a tremendous job with Gemini at <unk> term.

Jonathan Chappell: We are.

Jonathan Chappell: Hemp to quantify it a little bit for you.

Jonathan Chappell: We're moving quickly towards two trains a day.

Jonathan Chappell: That's the pressure on wanted to put on Mark and the team in Vancouver.

Jonathan Chappell: To get to two trains a day launch status and term.

Jonathan Chappell: And the majority of that tied to tied to Gemini.

Jonathan Chappell: They've done a great job.

Jonathan Chappell: Part of St. John.

Jonathan Chappell: Americans move their service.

Jonathan Chappell: Now as part of Gemini out of Halifax down to that port.

Jonathan Chappell: So we're super pleased with that.

John Brooks: You know, maybe the one area that we'll watch is Lazaro. We have a lot of opportunity between Mariska and HAPAG focused on cross-border into the U.S. I would say the momentum hasn't slowed on that. Certainly, a portion of that was tied to imports through Mexico from China, so we're watching that and how that may change or not. But honestly, I don't really feel that that's going to be a needle mover at the end of the day. But needless to say, no, I continue to be super excited about what Gemini brings to this network. Thanks, John.

Jonathan Chappell: Maybe the one area that we'll watch as Lazar Roe.

Jonathan Chappell: We have a law.

Jonathan Chappell: A lot of opportunity between Maersk and Hapag focused on cross border into into the U S.

Jonathan Chappell: I would say the momentum hasnt slowed on that certainly a portion of that was tied to import through Mexico from from China. So, we're we're watching that and how that may change or not but honestly I don't.

Jonathan Chappell: Really feel that that's going to be a needle mover.

Jonathan Chappell: And at the end of the day.

Jonathan Chappell: Yeah.

Jonathan Chappell: But needless to say no I continue to be Super excited about Gemini brings to this network.

Speaker Change: Thanks, John.

And your next question will come from Ken <unk> of Bank of America. Please go ahead.

Nadeem Velani: Hoexter of Bank of America. Great. Good afternoon. John, or I guess Nadeem, you've had a couple questions in the OR, but I just want to understand that the normal post 1Q to 2Q, you get about 260 basis points. I think, I just want to understand your comment there, can you outpace normal performance given the weather you had, or were you saying the weather wasn't? Harding, the Ken, I think that 200 to 250 basis points a realistic expectation. Obviously, there's areas where we can't control like stock-based comp. And if that becomes a tailwind, it could be bigger than that.

Speaker Change: Great good afternoon.

Speaker Change: John I.

Speaker Change: I guess Nadeem, just you've had a couple of questions on golar, but I'm trying to understand that the normal post <unk> you got about 260 basis points I think I'm trying to understand your comment there can you outpace normal performance given the weather you had or or were you, saying the weather wasn't.

Speaker Change: Two difficult that is just going to be a normal path and then my question John on pricing you haven't really gotten a lot of pricing you mentioned pricing real quick but revenue priority I'm really accelerated.

Speaker Change: I guess focused on coal grain potash ECP any any thoughts you want to talk about seeing some of the accelerating strength in some of those commodities.

Speaker Change: Ken I think that 200 to 250 basis points, a realistic expectation, obviously theres areas, where we can't control like stock based comp in there.

Speaker Change: If that becomes.

Speaker Change: A tailwind it could be bigger than that.

Nadeem Velani: So, you know, I'm optimistic it won't, but I think the 200, 250 is fair.

Speaker Change: Im optimistic that long, but.

Speaker Change: I think the $202 50 is fair.

Nadeem Velani: And Ken, a few comments on pricing. I continue to tell you that this team is the best in the industry in pricing to the value of our service and capacity. And I think that's what we've continued to see. Our renewals are on the very top end, four to 5% plus. I'm quite pleased with that. I can tell you in this quarter, we've repriced two existing legacy KCS contracts that were out there. There wasn't much left to reprice, and we got through those this quarter in a positive way. So I feel good about that. You know, I think we landed in IR day back then at pricing at three to 4%.

Speaker Change: Thanks, Ken.

Speaker Change: Comments on pricing.

Speaker Change: I continue to tell you. The team is the best in the industry and pricing to the value of our servicing capacity and I think that's what we've continued to see our renewals are on the very top end, 4% to 5% plus.

Speaker Change: I'm quite pleased with that.

Speaker Change: I can tell you in this quarter.

Speaker Change: We've repriced two existing legacy.

Speaker Change: Tcs contracts that were out there there wasn't much left to reprice in and we got through those this quarter.

Speaker Change: Positive way so.

Speaker Change: I feel good about that.

Speaker Change: I think we guided an IR.

Speaker Change: Good day back then at pricing at 3% to 4% I My expectation is to exceed that and as I said earlier.

Nadeem Velani: My expectation is to exceed that. And as I said earlier, VRCPI came in today at 3.1% for our 25, 26 crop year. So we're pleased with where that landed. So again, we'll keep it on throttle eight as it relates to pricing. Thanks, Sean.

Speaker Change: <unk> CPI.

Speaker Change: Came in today at three 1% for our.

Speaker Change: $25 26 crop year, so we're pleased with where that landed.

Speaker Change: So again, we will keep it on throttle eight as it relates to pricing.

Speaker Change: Thanks, Sean.

Steven Hansen: And your next question will come from Steve Hansen. Oh yeah, thanks. Keith, I was pretty taken by your upbeat commentary about the FRA discussions pertaining to technology deployment, and I guess some potential benefits to safety and service.

Speaker Change: And your next question will come from Steve Hansen of Raymond James. Please go ahead.

Speaker Change: Okay.

Steve Hansen: Oh, Yes, I think Thats excuse me and Keith I was pretty taken by your upbeat commentary about the FDA discussions pertaining to technology deployment and I guess, some potential benefits that the fee and service is there a way to frame the <unk>.

Keith Creel: Is there a way to... Timeframe around. A very short term, the changes that Mark spoke to on that orders with our green fleet, there's an optimal design that we've implemented. Since spending and investing some money in IFG, which is our terminal there in Kansas City that allows specifically the legacy KCS gray network to benefit from and takes cars that would have been shuffled up to Kenokee Yard to be battle order repaired and then shuffled back down to be in train. So we're going to get some relief with a waiver that allows us to take them out and train at Laredo as well as at IFG, which optimize that supply chain.

Steve Hansen: Frame around that deployment and what you think it could ultimately mean to the efficiency and safety.

Steve Hansen: A very short term the changes that mark spoke to on.

Steve Hansen: That orders with our Green fleet Theres, an optimal design that we've implemented.

Steve Hansen: <unk> spending and investing some money in <unk>, which is our terminal there in Kansas City that allow us specifically the legacy case, yes, great network to benefit from it takes cars that would've been shuffled up kudoka yard to be bad order repaired and then shuffle back down to being trained so we're going to get some relief with a waiver that allows us to take.

Steve Hansen: I'm out and train at Laredo, as well as at RFG, which optimize that supply chain and thats imminent.

Keith Creel: And that's imminent. Yeah, that's yeah, that's within the days. We'll have it soon. I've already spoke about it this morning. And then part two on the air, the redundant airbrake test that Mark spoke of, we expect that in the near term as well. Yeah, so we've had, we've had FRA on property for the past two weeks in Laredo, seeing very good signs doing a doing a good job on our, our, our staff down there showing them what we do, how we do it. And we believe within the coming months, It's a really good dialogue back and forth.

Steve Hansen: Yes, that's within the days, we'll have it soon I've already spoke about it. This morning, and then part two on the air the redundant air brake tests that Mark spoke of we expect that in the near term as well, yes. So we've had we've had FRE on property for the past two weeks in Laredo seem very good signs.

Doing a good job on R. R.

Steve Hansen: Our staff down there as shown on what we do how we do it.

Steve Hansen: We believe within the coming months.

Steve Hansen: It's a really good dialogue back and forth I know I spent some time in Washington, just like you did.

Keith Creel: I know I spent some time in Washington just like you did and good dialogue with FRA, good dialogue with kind of what they see with data, how we can use that data to embed a lot of different things that were taken away over the past years. That's great to hear.

Steve Hansen: Good dialog with fr dialog with kind of what they see with data how we can use that data to them better a lot of different things that were taken away over the past years.

Unknown Attendee: Appreciate the call.

Steve Hansen: That's great to hear in particular.

Mark Redd: Yeah. And we'll go next now to Brandon. Hey, good afternoon, everyone. Thanks for taking the question. Mark, I guess following up on that, I know you spoke to the FRA as well in your prepared remarks, but I think you mentioned something along the lines of, you know, getting your labor agreements in place is helping the network actually run better. Or maybe I misheard you on that.

Steve Hansen: Okay.

Speaker Change: And we go next now to Brandon Hope Glinski of Barclays. Please go ahead.

Speaker Change: Hey, good afternoon, everyone. Thanks for taking my question Mark I guess following up on that I know you spoke to the SRA as well in your prepared remarks, but I think you mentioned something along the lines of getting your labor agreements in place is helping the network actually run better or maybe I misheard you on that but I guess, what's the plan. This year just looking at from an operational perspective.

Mark Redd: But I guess what's the plan this year? Just, you know, looking at from an operational perspective, combating inflation and getting efficiency up even Yeah, so a couple of things. First, I would say every year, we have GM meetings where we look at taking cost out. We do that first, regardless of what, you know, increase that we have, as far as cost of living for unions, we look at that first 50, 60, upward of 70 million that would take out just cost alone. And then for the stability that we have spoke about is the three unions that we've already signed up this year at 3%.

Speaker Change: <unk> inflation and getting the efficiency up even further.

Speaker Change: Yes, so a couple of things first I would say every year, we have GM meetings, where we look at taking cost out we do that first regardless of what.

Speaker Change: Increase that we have as far as cost of living for unions. We look at that first 50 60 of Howard.

Speaker Change: Upward of $70 million that would take out just cost alone and then for the stability that we have spoke about is the three unions that we've already signed up this year at 3% that'd be a four year deal where you are on the cost of finished enough TCR C and the <unk>, which is the dispatchers that would be coming up in the coming weeks.

Mark Redd: That'd be a four year deal, we're on the cuffs of finishing up TCRC and the RTCs, which is the dispatchers that'll be coming up in the coming weeks. We'll go to coming out of mediation on that and should have that finished up in arbitration.

Speaker Change: Go to.

Speaker Change: Coming out of mediation on that and should have that finished up in arbitration here. Soon now when we turn to the U S side, we are still looking at our hourly agreements. We can have hourly agreements across a couple of the.

Mark Redd: Now, when we turn to the US side, we are still looking at our hourly agreements. We can have hourly agreements across a couple of the southern region, meaning the former Mid-South KCS, some of the LNA territory, just HVAC, some of the operating agreements they've had in place. So looking at doing some of those hourly agreements. So some of that you can change some of the crew base around. You can also run longer in some areas, which we have implemented toward the New Orleans route. So certainly every opportunity we can take now we're taking. And then once we get new agreements in place, we can build upon that.

Speaker Change: The southern region, meaning the former Midsouth Acs some of the elevated territory of just takes you back some of the operating agreement that you've had in place. So looking at doing some of those hourly agreements down there. So some of that you can change some of the crew base around you can also run longer in some areas, which we have implemented.

Towards the New Orleans route. So certainly every opportunity we can take now were taken and then once we get new agreements in place we can build upon that.

Mark Redd: And I would even say just from the Mexico perspective, we can continue to work with the unions in Mexico to do more. I know it's You know, it's steady state and we work with them every, every month and every year to do those agreements, but it's certainly making progress for sure.

Speaker Change: And I would even say just from the Mexico perspective, we can continue to work with the unions in Mexico to do more.

Speaker Change: At steady state and we work with them every every month and every year to do those agreements, but it is certainly making progress for sure.

Unknown Attendee: Thank you, Mark. will come from RE. Great, thanks.

Speaker Change: Okay.

Mark: Thank you Mark.

Speaker Change: Yes.

Speaker Change: And your next question will come from Ari Rosa of Citigroup. Please go ahead.

Unknown Attendee: Good afternoon. So going back to the regulatory discussion, maybe you could talk about what are some of the other areas that you're pursuing and just how impactful you think they could be in terms of the cost savings opportunity or the efficiency opportunity that's gained from that. Thank you. Yeah, so the Codewheel technology is something we've had in place for years in Canada. And partly what that does for you is increases the cycles of turns on trains, meaning the equipment of grain hoppers, if it's coal, whatever the cycle may be, includes locomotives, so I can do more with less, because I'm spinning the asset so much faster.

Ari Rosa: Great. Thanks, good afternoon.

Going back to the regulatory discussion maybe you could talk about what are some of the other areas that youre pursuing and just how impactful do you think they could be in terms of the cost savings opportunity or the efficiency opportunity. That's gained from that thank you.

Yes, so the code wheel technology is something we've had in place for years in Canada, and partly what that does for years increases the cycles of turns on trains, meaning the equipment of <unk>.

Ari Rosa: Grain hoppers, if its call whatever the cycle may be includes locomotives. So I can do more with less because I'm spin in the assets. So much faster and you talk about what we can control. That's what we can control. So when I do the inspections of that can certainly pinpoint mechanical work whenever I do have to stop the train to do.

Mark Redd: And if you talk about what we can control, that's what we can control. So when I do the the inspections of that, I can certainly pinpoint mechanical work whenever I do have to stop the train to do the inspection. I can understand what I can do at once, not just several times on inspection. So working with FRA, if we can get that in place with the U.S. operations, we can certainly do that toward the PNW. We can certainly do that down toward Mexico. And again, it's a one-stop shop with inspections. There's lots of money to be had in that.

Ari Rosa: The inspection and I can understand what I can do at once not just several time on inspection so working with FRE, if we can get that in place with the.

Ari Rosa: With the U S operations, we can certainly do that towards the <unk>, we can certainly do that down towards Mexico and again, it's a one stop shop with inspections, there's lots of money to be had in that I don't want to quantify it until we can see exactly what we can do with that yet but again there is many more opportunities from a safety perspective.

Mark Redd: I don't want to quantify it until we can see exactly what we can do with that yet. But again, there's many more opportunities from a safety perspective. From hot box detectors that we talked about, just inspections of the portals that we have where we can do more work and inspect cars and see more defects than we do today from the human eye, and certainly from a technology perspective, that is much better.

Ari Rosa: From Hotbox detectors that we talked about just inspections of the.

Ari Rosa: Portals that we have where we can do more work and a spec cars and see more defects than we do today from the human eye.

Benoit Poirier: Not saying it will get away from the human eye, we'll always do that work, but I guarantee you we'll have a safer railroad Go next now to Benoit Poirier of Desjardins. Yes, thank you very much. And thanks for taking my question.

Ari Rosa: Certainly from a technology perspective that it's much better now than it will get away from you and I will always do that work, but I guarantee you we will have a safer railroad because.

Ben <unk>: Thank you. We'll go next now to Ben <unk> of Desjardins Securities.

Ben <unk>: Yes. Thank you very much and thanks for taking my question John with respect to the China vessel surcharge I was wondering if you have seen any customer react to this potential.

John Brooks: John, with respect to the China vessel surcharge, I was wondering if you have seen any customer react to this potential, any new calls into your ports as customers try to diversify away from US ports, and talking about port movement with respect to St. John, given the increased the Red Sea Canal and the, have you seen any increased dialogue to ramp up at a faster pace the operation in St. John in the, or through the eastern ports? Thank you. Yeah, I, you know what, it's been a while, we've got pretty good momentum at St. John. Again, I feel really good with, you know, the ramp up of Gemini there, but our existing business with the other steam shift lines has been growing also.

Ben <unk>: Any new calls into your reports as customers try to diversify away from U S sports and talking about Fort movement with respect to St. John.

Ben <unk>: Given the increased momentum with the south or southeast Asia.

Speaker Change: Movement at the Red Sea channel and.

Ben <unk>: <unk>.

Ben <unk>: Have you seen any increased dialogue to two to ramp up at the <unk>.

Ben <unk>: Faster pace.

Ben <unk>: Operations in St John and or through the eastern ports. Thank you.

Ben <unk>: Yes.

Ben <unk>: We've got pretty good momentum.

Ben <unk>: St John.

Ben <unk>: Again, I feel really good with.

Ben <unk>: The ramp up of Gemini, there, but our existing business.

Ben <unk>: With the other steam ship lines has been growing also.

John Brooks: And, you know, frankly, we just turned on a number of additional gen sets in that marketplace. That's going to provide export opportunities, frankly, of products that maybe traditionally were coming out of the US, frozen products coming out of the US that now we're, we're working with Canadian producers of similar products for export. And a lot of that's going to be pointed at St. John for us. So, you know, I overall feel, you know, ongoing positivity around the whole St. John opportunity and on the backs of the growth we already have at that location. We got a good upside on capacity as well.

Ben <unk>: Frankly, we just turned on a number of additional gen sets.

Ben <unk>: In that marketplace.

Ben <unk>: That's going to provide export opportunities frankly of products that maybe traditionally were coming out of the U S.

Ben <unk>: Frozen products coming out of the U S that now where we're working with Canadian producers of similar products for export.

Ben <unk>: And a lot of that is going to be pointed at St. John for us. So.

Ben <unk>: Yeah.

Ben <unk>: Overall feel.

Ben <unk>: Ongoing positivity around the whole St John opportunity in.

Ben <unk>: <unk> of the growth we are already at that location.

Ben <unk>: <unk> again.

Ben <unk>: Again, good upside on capacity as well I mean, there is plenty of room out there we've got some industry what was the other part of <unk>.

John Brooks: plenty of room What was the other part, Benoit? Oh, with respect to the, uh... Unknown Interpreter-Mesmerism- methods-background, Unknown Interpreter-Free Hackker-reactions, Unknown Interpreter-non-verbal Topics, Phenomena, Analgesia, You know what? I would say pretty minimal at this point. You know, I think overall there's a fair amount of relief on sort of the changes that were implemented versus what that could have been initially when it was talked about. So, you know, I think the steamship lines will adjust their fleets appropriately. Ultimately, you know, for the U.S. port, I'm not sure that it's going to impact us a whole lot one way or the other, whether you think about Mexico and Canada.

Ben <unk>: With respect to the.

Ben <unk>: China vessel surcharge wetter.

Ben <unk>: Or increased dialogue for people wanting to go to Canada instead.

Ben <unk>: I would say pretty minimal at at this point.

Ben <unk>: I think overall, there's a fair amount of relief fund sort of the changes that were implemented versus what that could have been initially when it was talked about so.

Ben <unk>: I think the steamship lines will adjust their fleets appropriately.

Ben <unk>: Ultimately.

Ben <unk>: For the U S ports I'm not sure that is going to impact us a whole lot one way or the other whether it's think about Mexico and.

Unknown Attendee: You know, we are looking at a few opportunities down in the Texas area with some existing business and what alternatives, if in fact, some of these applications may apply to that business. But again, these aren't huge opportunities. But certainly it's a wait and see and we'll understand it more as it progresses as we get closer and closer to October. Okay, many thanks. Okay, thank you.

Ben <unk>: And.

Ben <unk>: In Canada.

Ben <unk>: We are looking at a few opportunities down in the Texas area with some existing business and what alternatives. If in fact some of these applications may apply to that business, but again.

Ben <unk>: These arent.

Ben <unk>: Huge opportunities.

Ben <unk>: But certainly it's a wait and see and we will understand more as it progresses as we get closer and closer to October.

Speaker Change: Okay. Many thanks.

Ben <unk>: Okay. Thank you.

Beau: We have reached our allotted time for Q&A.

Ben <unk>: Thank you we have reached our allotted time for Q&A I would now like to turn the call back over to Mr. Keith Creel.

Keith Creel: I would now like to turn the call back Thank you. Listen, thank you for your time this afternoon. I hope you walk away with a bit of color. Certainly, in spite of the winter, in spite of the many uncertainties that that we're all facing. We produced a very strong first quarter, we're set up well to produce a strong year in 2025. This unique three nation network is built for times like this. We're going to create solutions, not excuses that will lead the industry unique Growth outcomes and value for our shareholders not just in 2025 but beyond.

Ben <unk>: Thank you Melissa and thank you for your time. This afternoon I Hope you walk away with a bit of color certainly in spite of the winter in spite of the many uncertainties that we're all facing.

Ben <unk>: We produced a very strong first quarter, we're set up well to reduce our store.

Ben <unk>: Growing year in 2025. This unique three nation network is built for times like this we're going to create solutions not excuses that will lead the industry unique.

Ben <unk>: Growth outcomes and value for our shareholders not just in 2025, but beyond.

Operator: Thank you and we look forward to sharing our second quarter results. Thank you.

Ben <unk>: Thank you and we look forward to sharing our second quarter results.

Ben <unk>: Yeah.

Operator: Ladies and gentlemen... Today's CPK Conference Call. Again, thanks so much for joining us, everyone.

Thank you, ladies and gentlemen that will conclude todays <unk> first quarter 2025 conference call again, thanks, so much for joining US everyone. We wish you all a great remainder of your day Goodbye.

Operator: We wish you all a

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