Q2 2025 Union Pacific Corp Earnings Call
Greetings and welcome to the Union Pacific second quarter 2025 earnings call.
This time all participants are in listening mode.
A brief question, answer session will follow the formal presentation.
If anyone today should require operator assistance, please press star Zero from your telephone keypad.
As a reminder, this conference is being recorded and the slides for today's presentation are available on Union Pacific's website.
Speaker Change: It's now my pleasure to introduce your host, Mr. Jim Venna chief executive officer for Union Pacific.
Speaker Change: Thank you, Mr. Venit. You may now begin your presentation.
Speaker Change: Thanks Robyn. Thanks everyone for joining us this morning. Another beautiful day in Omaha.
Speaker Change: Skies are clear this morning and, uh, wonderful day to be railroading. So, good morning, everyone. And thank you for joining us today for Union, Pacific's second quarter, 2025 earnings call. I'm joined in Omaha by our Chief Financial Officer, Jennifer Haymon, our Executive Vice President of marketing and sales Kenny rocker and our Executive Vice President operations, Eric Gehringer as you'll hear from the team this morning, we are delivering on our strategy and our results demonstrate our commitment to Leading the industry as we set new standards for safety service and operational excellence.
Speaker Change: Now if we turn over to a slide 3 this morning Union, Pacific reported 2025 second quarter earnings per share of $3.15.
Speaker Change: We had 2 unusual and offsetting items in the second quarter a deferred tax benefit and the labor expense for a crew ratification agreement, both of which Jennifer will discuss in more detail.
Speaker Change: Those items are adjusted earnings per share is $3.33 up. 12% versus last year's adjusted results, volume growth, core pricing gains and productivity improvements drove the solid results in the quarter, our adjusted second quarter, operating ratio was 58.1%, improving 230 basis, points versus last year's adjusted results.
Speaker Change: Freight Revenue, excluding fuel cell. Charge grew 6% in the second quarter setting best ever quarterly and year-to-date records in 2025.
Speaker Change: In addition we set quarterly records in both quarters for Workforce. Productivity was second quarter ranking as the best ever importantly we efficiently handled the first half volume growth while also improving our safety and service performance.
Speaker Change: I'm very comfortable with where we are and pleased with the level at execution. I see a cross the company. NeXT, the team will walk you through the quarter in more detail and then I'll come back and wrap it up before we go to Q&A with that Jennifer second quarter results. All right. Thank you. Jim and good morning. Everyone.
Speaker Change: I'll start with a walk down of our second quarter. Income statement on slide 5 with operating revenue of 6.2 billion dollars improved 2% versus last year. While Freight revenue of 5.8 billion set a second quarter record and increase 4% breaking down. The drivers of freight Revenue volume growth in the quarter, added 375 basis points,
Speaker Change: if you'll search charge revenue of 569 million declined, 100 million or 225 basis points as lower year-over-year, fuel prices reduced, our freight revenues,
Speaker Change: Price combined with mix for a 200 basis. Point benefit to Freight Revenue versus last year as strong core pricing dollars more than offset. The continued business mix impact. We are disciplined in our pricing supported by a strong service product and for the third consecutive quarter yielded price dollars, net of inflation that were a creative to our operating ratio
Speaker Change: Wrapping up the Top Line, other Revenue declined 16% to 311 million.
Speaker Change: Included in the year-over-year. Change are the items that we've discussed previously, last year's Intermodal equipment sale and the Metro transfer
Speaker Change: Also, impacting other Revenue in the quarter were lower at the sural and subsidiary revenues.
Speaker Change: Switching to expenses are appendix slides provide some more detail but I'll walk through the highlights. As operating expense increased only 1% to 3.6 billion against a 4%. Increase in quarterly Vol looking closer at the expense lines, compensation and benefits increase 5% driven by the brake person. Biode agreement of 55 million. This is the third and final break person agreement. Further enabling more efficient car handling.
Speaker Change: When you adjust for the brake person agreement, quarterly compensation and benefits. Expense increased 1%. While our cost per employee increased 3 and a half percent.
Speaker Change: These results demonstrate how a 3% lower Workforce level and strong productivity almost entirely offset the impact of voyage inflation.
Speaker Change: We would expect a similar level of increase in compensation per employee for the full year as we continue to leverage process improvements and Technology to offset wage increases.
Speaker Change: Additionally, in the quarter, we transferred close to 250 employees to Metra completing the majority of the transfers. We began in the second quarter of 2024.
Speaker Change: Fuel expense declined. 8% on an 11% decrease in fuel prices from $2.73 to $2.42 per gallon. Our fuel consumption rate improved 2% and set a second quarter record
Speaker Change: Ongoing benefits from our fuel and locomotive initiatives coupled with running a more fuel-efficient business, mix drove the Improvement.
Speaker Change: Equipment in Netherlands increased 5%, driven by lower Equity income and our business mix.
Speaker Change: Finally other expense improved 5% versus last year.
Speaker Change: More than offset last year's 46 million gain from the Intermodal equipment sale.
Speaker Change: Our reported operating income grew to 2.5 billion, dollars of second quarter record.
Speaker Change: Income tax expense improved 14% as a state tax legislation change, provided a 1-time deferred tax benefit of 115 million. More than offsetting the tax increase from higher income.
Speaker Change: Our reported net income totaled, 1.9 billion, and earnings per share was 3.15.
Speaker Change: Excluding those unusual items in the quarter, adjusted earnings per share was $3.33.
Speaker Change: Our adjusted operating ratio came in at 58.1%, reflecting the 90 basis point impact of the brake person agreement.
Speaker Change: Overall, a very strong quarterly performance by the team executing on all elements of our strategy and demonstrating what's possible from the Union Pacific franchise.
Speaker Change: Turning to shareholder returns in the balance sheet. On slide 6. Our second quarter cash from operations total. 4.5 billion dollars up more than 500 million versus last year.
Speaker Change: through the second quarter, we've returned 4.3 billion to our shareholders, through a combination of share repurchases, and dividends
Speaker Change: And in keeping with our investor day commitments, we announced a 3% dividend increase last week.
Speaker Change: This marks the 19th consecutive year of annual increases.
Speaker Change: Our adjusted debt to ibid doll ratio finished the quarter at 2.8 times and we remain a rated by our 3 credit rating agencies.
Speaker Change: Looking out to the remainder of 2025 on slide 7, we expect third quarter of the revenue to be in line with our second quarter results. Due to continued softness in the auto market and lower assets. Orals additionally, other income will look more like first quarter results as a result of lower expected. Real estate gains.
Speaker Change: For volume everyone, recalls the benefit that we experience in the second half of 2024 from the surging International Intermodal, flows through the West Coast ports.
Speaker Change: Month to date in July. We are seeing the impact of the Tariff pause as reflected in the current volume search.
Speaker Change: Similar to last year or seamlessly handling this volume. Although we do expect volume to moderate to the point of sequential decline, through the quarter on the flip side, our diverse franchises providing numerous growth opportunities which Kenny will discuss a bit later.
Speaker Change: Operationally, we plan to stay the course.
Kenny Rocker: And keep driving improvement, working safely, controlling our costs, providing good service and seeking out price opportunities. That reflect the value of that service product.
Kenny Rocker: Our second quarter results, support our conviction in the 3-year targets introduced last September.
Kenny Rocker: Specific to 2025 EPS growth will be consistent with attaining. Our 3 year, EPS cage review of high single to low double digit growth.
Kenny Rocker: Further, we reaffirm our view on a creative pricing industry-leading, operating ratio and roic. And of course our Capital deployment strategy is unchanged.
The team is confident and energized and ready to deliver value for our stakeholders with that. I'm going to turn it over to Kenny to provide more details on the business.
Kenny Rocker: Thank you, Jennifer and good morning. We delivered a solid second quarter, great revenues total 5.8 billion, which was up, 6%, excluding fuel search charges driven by strong core pricing, gains and increased volume.
Kenny Rocker: Confidence.
Kenny Rocker: In the strength of our service products, the team remains bullish on our pricing strategy and that's approach continues to deliver positive results.
Let's Jump Right In and talk about the key drivers for each of these business groups.
Kenny Rocker: Starting with our bulk segment revenue for the quarter was up, 10% compared to last year with an 11% increase in volume while our lower fuel surcharge and business. Mix resulted in a slight decrease, in average revenue per car.
Kenny Rocker: Strength and coal was driven by strong customer demand due to favorable natural gas pricing, and the start of lower Colorado, River Authority shipments.
Kenny Rocker: Softer domestic grain demand was more than offset by strengthening export shipments to the gulf and Mexico resulting in double digit growth.
Kenny Rocker: grain products volume was also up for the quarter, which continues to be driven by new soybean Crush production in Nebraska and Kansas
Kenny Rocker: Turned into industrial revenue was up, 4% for the quarter on a 3%, increase in volume and a 2% increase, in average revenue per Carlo.
Kenny Rocker: strong core pricing, gains were partially offset by business, mix and lower fuel, search charges
Kenny Rocker: Rock shipments remain solid. This quarter driven by a strong customer demand and favorable weather conditions compared to last year.
Kenny Rocker: An increase shipment of industrial. Chemicals were partially offset by continued softness in our Forest Products markets.
Kenny Rocker: Down 4%, on a 1% increase in volume and a 4%, decrease in average revenue per car.
Kenny Rocker: reflecting, the mixed impact of increase International and a moto shipment and lower fuel search charges
Kenny Rocker: In a moto volumes continue to show year-over-year growth as our business development efforts, offset Market uncertainty and store consumer spending.
Kenny Rocker: Automotive volumes were down based on reduced OEM production.
Kenny Rocker: Earning a 510, despite the challenge in Market Outlook, our hustle mindset and continued focus on Business Development, gives us the edge to outperform.
Starting with bulk. We expect coal volumes to significantly exceed last year's levels driven by current forecasts on natural gas prices through the remainder of 2025 and the new volume with LC.
Kenny Rocker: Grain had a strong first half of the year. And while we are still a couple months from Fall Harvest,
Kenny Rocker: the 2025 crop looks favorable and we are working to finalize customer demand.
Kenny Rocker: We're evaluating competitive risk to the fourth quarter exports.
Kenny Rocker: As it relates to grain products. Our intent Business Development Focus will offset policy related uncertainty and renewable fuels and Associated feed stocks.
Moving to Industrial our strong investments in our Gulf Coast franchise. Continue to help us win in the petrochemical markets.
Kenny Rocker: For example, we are proud to serve dial new expansion in Freeport Texas, which began operations last month.
We anticipate stable performance in the metals and minerals markets.
Kenny Rocker: tariff, activity continues to impact metal shipments but this is balanced by continued strength and construction specifically in the south
With our exceptional service, we're well positioned to capture that demand.
Additionally, we anticipate petroleum volume to remain challenged due to business shifts, and our commitment to balance volume at the right margin.
Kenny Rocker: Wrap it up with premium as Jennifer indicated, strong comparisons and port, shifts will challenge International and domestic and Immortal volume.
Kenny Rocker: We saw an uptick in automotive volumes at the end of the second quarter. And we recently converted new Auto Parts, volume originating from Mexico. That said softer vehicle sells are a concern
Kenny Rocker: While we are remain mindful of external pressures, including potential tariff implications, that could influence consumer Behavior. We're focused on the strength within our control and I am confident. We'll win in the marketplace.
Kenny Rocker: That confidence is reinforced by the Investments, we're making to expand our capabilities and our footprint. Just last week we opened our new Kansas City in a moto terminal, our fourth new Intermodal terminal in the past few years. Since 2020 we've invested over 1.4 billion to support growth and expansion in our inter motorul business.
Kenny Rocker: But our Focus extends Beyond premium, the Industrial Development team is actively driving Carlo growth managing nearly 400 projects that are opening new doors for us.
Kenny Rocker: so,
Kenny Rocker: As we move into the second half of the year, I'm encouraged by our Dynamic service and adaptability of our team. What truly sets us apart is our Relentless ability to rise to any Challenge from unexpected International and Moto Vine to surges in cold we've proven we will deliver
Kenny Rocker: Our commercial and operations teams are working together to unlock growth and unexpected areas. We don't wait for opportunities, we create them turning momentum into impact and driving results that matter. And with that, I'll turn it over to Eric to review our operational performance.
Eric Gehringer: Thank you, Kenny, and good morning the team delivered. Another strong operating performance in the second quarter demonstrating exceptional results behind our strategy of safety service, and operational excellence.
Eric Gehringer: Our agility was once again on full display. As we effectively, handled a 30% surge in Coen. Renewable shipments.
Eric Gehringer: All while providing the service. We sold our customers.
Eric Gehringer: Ultimately, it's another proof statement highlighting our robust and reliable service product, which is imperative as we strive to grow with our existing customers and unlock new markets.
Eric Gehringer: Moving to key performance metrics on slide 12.
Eric Gehringer: Safety remains our top priority at Union Pacific and our goal is to be the safest Railroad in North America.
Eric Gehringer: Rolling average, we won't stop until each and every employee goes home safe every day.
Eric Gehringer: Freight car velocity the best measure of fluidity on the railroad. Improved 10% to 221 miles per day.
Eric Gehringer: Driving. The performance was both reduced terminal dwell, as well as increased train speed, which improved 7 and 3 respectively.
Eric Gehringer: We continue to leverage new technology to enhance terminal processes and adjust Transportation plans, eliminating touch points while simultaneously improving cycle times.
Eric Gehringer: Importantly, we are turning our customers assets faster, and enabling growth through efficiency.
Eric Gehringer: Also key is how that translates into our service for our customers.
Eric Gehringer: And in the second quarter, both inner modal and manifest service performance improved year-over-year to 99 and 977 respectively.
Eric Gehringer: our buffer of resources coupled with,
Eric Gehringer: Further improvements in line of Road. Variability terminal run through dwell. And first mile Last, Mile performance is generating a very high level of service for our customers. It's a great work by the team as we deliver on our service commitments.
Eric Gehringer: Now let's review our key efficiency metrics on, slide 13.
Eric Gehringer: As I mentioned before, fluidity is king. And the results on this slide are a byproduct of the exceptional results throughout the quarter.
Eric Gehringer: It's the team pushing the limits of what's possible to drive continuous improvements across our Railroad.
Eric Gehringer: Locomotive productivity, improved 5% versus last year. A second quarter record, as we officially handle, the heavier business mix while also improving dwell times across the network.
Eric Gehringer: Workforce productivity, which includes all employees improved 9% and marked an all-time quarterly record.
Eric Gehringer: Similar to first quarter, our active train engine and yard Workforce decreased 1%. Again demonstrating, excellent operating leverage against the 4% volume growth. We are confident. There is more opportunity in front of us as we leverage technology to make our Workforce safer and more efficient.
Eric Gehringer: Train, lengthen, the quarter grew both sequentially and year-over-year.
Eric Gehringer: In fact, the second quarter set, an all-time record at nearly 9,700 ft.
Eric Gehringer: It continues to be an ongoing source of productivity as we look to reduce crew, starts and prove asset utilization and build capacity on our Network.
Eric Gehringer: Wrapping up, we have tremendous operational momentum momentum. That is enabling growth across our railroad. Our footprint is unparalleled and built to handle that growth. It's on us to execute it in efficient service focused manner.
Kenny Rocker: We will continue to work hand-in-hand with Kenny's team remaining agile with our customers to quickly adapt to changes in demand and traffic flows.
Eric Gehringer: Jim.
Speaker Change: Eric, thank you very much.
Speaker Change: The entire team, but before we get to your questions, I'd like to quickly summarize what you've heard from uh from all of us.
Speaker Change: First, as you heard from Jennifer, the team is delivering on our strategy. We're generating car load growth and price by delivering the service we sold to our customers. While driving continued productivity into the network, we are controlling what we can control. We produce quarterly records in Freight revenue and operating income and a best ever record and Freight Revenue excluding
Speaker Change: Fuel. And I'm confident our 58.1% adjusted operating ratio.
Speaker Change: Will be industry-leading, can you summarize second quarter volume and revenue drivers and discussed his thoughts for the second half of 2025 unknowns remain, but we are focused on all performing our markets and pricing to the value. We're providing our customers. The second quarter surgeon Cole and our ability to seamlessly handle. It demonstrates the value. Our buffer of resources provides as we compete and win business next Eric reviewed our strong operating results, safety metrics continue to show great Improvement. As we strive to lead the in the
Speaker Change: Tree and bring our employees home, safe.
Speaker Change: Operationally, the network is running at a very high level delivering on our service. And operating plans, we will remain agile and ready to handle whatever comes our way. Wrapping up, we remain committed to the long-term guidance that we laid out at our investor day last September.
Speaker Change: You see that in our results and in last week's dividend increase. We are confident. We will remain the industry leader, as we drive value for our shareholders.
Speaker Change: The foundation is built. We are growing with our customers and we have strong momentum as we continue to maximize the value of this great franchise.
Speaker Change: In addition to today's earnings release.
Speaker Change: We also just announced that Union Pacific and Norfolk Southern are engaged in advanced discussions regarding a potential business combination.
Rob: Take any questions relating to this topic during the Q&A. With that Rob. We're ready to start the Q&A. Thank you.
Rob: Thank you, Mr. Vina. We'll now be conducting the question and answer session.
Rob: If you like to ask a question at this time, please press star 1 from your telephone keypad and a confirmation tone. Indicate, your line is in the question queue.
Rob: You may press star 2. If you'd like to remove your question from the queue.
Rob: For participant. So you can speak or equipment. It may be necessary to pick up your handset before pressing the star keys.
Speaker Change: Due to the number of analysts joining us on the call, today will be limiting everyone to 1 question to accommodate as many participants as possible.
Speaker Change: Thank you. And the first question today comes from the line of John Chappelle with evercore isi. Please receive your question.
Speaker Change: Good morning, John. Thank you. Good morning, Jim. Um, that's quite a curveball with the press release and not taking any questions about, uh, the thing everyone's going to ask you about. So, uh, let me phrase it this way and you can answer it right? How you so choose, everything you've just laid out before the mention of the press release. Uh, is everything you said you're going to do and you're going to join the momentum is amazing. The O is best in business, you know, pricing balance, everything's working the way it's supposed to and you're doing this in a very tough Freight environment.
Speaker Change: So why now potentially take on, you know, a multi-year distraction that could potentially Sidetrack, the organic momentum that you're already building.
Speaker Change: So why don't we back up a little bit in time? Because I think uh you have to think about things in time and place.
Speaker Change: So um I've been involved with Union Pacific with a short little time when I was on sabbatical as I described it since 2019. And since 2019 it's it was a journey to be able to have a team which I'm very proud of the team that's sitting here with me and everybody that works at Union Pacific.
Speaker Change: To fundamentally Drive the efficiency, you drive the productivity drive, that customer, focus Drive the capability to deliver and sell, and be able to move products at a high level for our customers in an efficient manner. If we look forward,
Speaker Change: Truly it's it's we look at what's possible and what's better and that's what this is all about. This is everything else in the world is moving ahead. Technology wise and fundamentally going to change.
Speaker Change: so I've been railroading for maybe way too long and I remember when there was 5 people on trains,
Speaker Change: And there was a 4 and 3. I also remember when, uh, when locomotives couldn't communicate, and we could not run,
Speaker Change: In train power. If you stand still, you get left behind
Speaker Change: So I love where we are because if you fundamentally have a railroad, that's operating in the way we operate and the way we can react, then you can do things that help the nation help, our customers win. And that's what it's all about.
Speaker Change: So sorry for the long answer, but I thought I, I frame it for you.
Speaker Change: I appreciate it. Thanks Jim, you're welcome.
Speaker Change: Next question is from the line of Brian. Austin back with JP Morgan. Please receive your question.
Brian: Morning, Brian.
Brian: Hey, good morning, Jim morning team. Thanks for taking the question. Um
Brian: So it would assess more of a philosophical 1 for you. Jim, you know, we we've seen efforts to give shippers options like reciprocal switching. You know over the past decade. Just remanded that back to the stb. But what's your view on just conceptually that
Brian: Reciprocal switching, Open Access, giving shippers more, uh, options. And maybe an exchange for the news. You just announced. And you've also talked about
Brian: The rail industry hasn't done a great job for Intermodal growth in the past, making some tough decisions. I wanted to see if you had some further comments on that, maybe a direct to shipper offering at some point. So that's a lot of theoretical stuff but I appreciate your your thoughts on that. Jim thank you. So who we are? Who are we at Union Pacific? Okay, I can't talk about the industry in general. There are people I think have the very similar goals. We want. We know that if we provide service at a high level,
Brian: And the service is what we sold the customer. We have a range of customers that need different types of service, some of these speed, some of the consistency, some of these storage, some need additional, but
Brian: 2 weeks ago or today nothing changes in what we think we need to do to continue to grow this and absolutely help the country. The more we can move uh off of Highways onto our railroad. The more we allow our customers to be able to win in the marketplace, by giving a a tie in with them and have that service and product, where it should be, is a win. So, that's the way I look at it, Brian. Hopefully, uh, you can see the philosophy that we all have here.
Brian: Yeah. Appreciate Jim. Good luck. Thank you. Thank you.
Chris Wipy: The next question is from the line of Chris wpy with Wells Fargo.
Chris: Morning. Chris.
Brian: Good morning, Jim. Um, thanks for taking the question, I guess, you know, uh, about a month or so ago. I think in a public forum, you you noted that you'd only do things that you thought were possible and I guess just maybe big picture as you're thinking about the industry moving forward here. I think your comments were interesting about not standing still. I guess when you think about what's possible in is this the landscape that would allow you know, changes to occur, whether it be from a ship or perspective, from a technology perspective from a regulatory perspective and I guess we're just trying to get a sense of, you know, how you see sort of the receptivity of the other stakeholders in the industry. As you think about what you need specific to trying to accomplish over the next several years.
Speaker Change: You know, I think it's a great question and I do talk about what's possible. And that's the way we think here at Union Pacific is is. And if you take a look at what we've done, we don't look at uh, and we never have
Speaker Change: but we're very, very
Speaker Change: Diligent in going through any decisions that we make, and I can go back in my time here and I could go back to my time to the other great railroad that I work for Canadian national Railways. Okay, great company. Uh, great franchise and
Speaker Change: When when I came here and the team, we decided that what we wanted to be able to do is make sure that we make smart decisions, how we move ahead, how we operate, how we sell and Kenny does that and his team every day and Jennifer Keeps Us grounded. She's some of the discussions, you would find very interesting on making sure that we are driving to the best decision possible. But that's who we are, is if we can fundamentally operate a railroad in a safe,
Speaker Change: provide great service and be operationally. Excellent, then we can look at what's possible and decide what we want to do next. We never take decisions lightly. We do not flip. Italy, wake up 1 morning and say, we're going to do something like, we just announced that we're in discussion and we thought about it yesterday we've done a lot of homework to get us to this place and I'm not going to comment as nobody would expect.
Speaker Change: Me too. You know, only a fool would expect me in the middle of when we're having discussions to start getting into any details. So and none of you are fools. I've met you all. You guys are smart people. So at the end of the day, I'm very comfortable where we are. We're diligent on the decision making. We thought it was prudent for us where we were and to be fully, uh, uh, uh, tell our shareholders, and everybody exactly what we're, where we at, at this morning, after the quarter that we had. And, uh, we're moving ahead. So, thanks for the question.
Speaker Change: Thank you, appreciate it.
Speaker Change: Next question is from the line of Stephanie Moore with Jeffrey's. Please receive your question.
Stephanie Moore: Good morning.
Stephanie Moore: Hi, good morning, thank you. Can you hear me?
Speaker Change: I can hear you clear. How are you this morning? Great. I'm doing very well. Well, I figure if I ask you questions, you won't ask me a question, and we'll do a 2 week. Go ahead. You're more than welcome to ask me, whatever questions you'd like. Um, well, okay.
Speaker Change: Well, you know, maybe I'll I'll jump away from the topic to your, um, real quick here. Um, you know, I wanted to talk a little bit about the rail itself. I mean, you've made tremendous progress, the network is working, um, about as, as that as well as as it has. So if you think about the back half of the year and you talk about really the the cost performance as we go from 22 to 32. If you wanted to share any puts and takes about anything, that might not continue from the second quarter into the third quarter and the
Speaker Change: Same time how we should think about maybe some potential benefits. As we look to the back half of the year and ultimately hitting that whole year Target. Thank you.
Speaker Change: And as we think about how we're going to execute that, you know, the game plan, really isn't different. We've got a great team executing against some very challenging goals and they're delivering on those goals. Now we're looking for opportunities, always it never ends that Perpetual dissatisfaction that I've spoken about before, that's our mindset or seeing what's possible. So I still see opportunities in how we think about improving service, from a 12 perspective which also has the benefit of driving efficiency to make Kenny even more competitive in the market with this team, I still see opportunities in the locomotive dwell side. We set a second, best record ever in the second quarter at 15.4 hours. There's no reason that can't be below 15 and the teams up against that, even outside of the Court Transportation team. It's about how we think about automation within engineering and mechanical, So the plan isn't different, it's to continue to be safe, it's to continue to give good service and its continued to find new and inventive ways to be efficient.
Speaker Change: Yeah, so I'll go through a few things I mentioned in my script. Uh certainly we expect for our Co business to uh be up significantly. We're looking at grain. We've got a great harvest out there. We'll see where the man takes the a like the fact that our Network and Eric has a network that we can move wherever the the Grain and traffic flows. Take us on the industrial side. You know, I'm excited and pumped up about the winds that we have in the marketplace. We're winning as our customers are expanding on us. Uh, and they're aligned
Speaker Change: Investments that we made in the Gulf Coast.
Speaker Change: On the premium side, the fight will be on International Intermodal. And bottom line is, we've got to back fill that volume and uh, some of the ways we do that is on the domestic side. And I'll tell you, when you have a strong service product, like we have, we're going to introduce new products. We're going to introduce a 7-Day a week service from Tacoma. And to Chicago, We're going to introduce a 7-Day a week service, from Memphis to Dallas. We're going to introduce the Kansas City, Intermodal terminal. That's the fourth 1 in the last few years. So when you got a strong service product and you're introducing what we're doing, I feel really good about, you know, where we expect to be. Yes. So Stephanie, um, you know, Eric and Kenny both both had great points in terms of the railroads running really well. Kenny and his team are out there executing, you know, we called out the 1-time that we have relative to the expense line with the the labor agreement. Certainly that's not going to repeat itself, as you're thinking sequentially, second quarter
Speaker Change: Of the third quarter. So all really good progress and feel really good about those things. The only thing, I'll remind you of and we've talked about this before is that this is going to be a little bit of an unusual year for us. When you think about the volume Cadence, usually you have your stronger volumes in your third and fourth quarter because of the strong comp that we have with the international Intermodal, and how we see that trending, that's likely not going to happen. Um, you know, in fact we're expecting some sequential declines through the back half, but set that aside,
Speaker Change: The team is, is executing at a very high level, and will continue to do that.
Speaker Change: Thank you very much.
Speaker Change: The next question is from the line of Tom wits with UBS, please. Receive your question morning. Tom.
Speaker Change: Yeah, hey Jim. So uh, I I want to see you, you know, you since you had the trains magazine article back in, may we really uh, had a dramatic uh, impact on the discussion on consolidation, there's been, you know, enough time I would imagine some of your you know uh did contacts and buddies in the the customer and super side of you know reached out to you and and probably giving you some feedback. Can you offer any thoughts on kind of what the flavor of that feedback is or you know, shipper is Bravely concerned? Are they? You know from the chemical sippers are they excited about you know, maybe in a mobile zippers, excited about a trans railroad. Is there anything high level you can give us on just you know uh kind of initial shipper response over the last couple months. Thank you.
Speaker Change: So so Tom, uh, we we deal with our uh our unions and our employees uh um all the time. And we decided this round to uh, have direct negotiations. And, and we've signed up
Uh, close to about 36% now, our of our employees are signed up, or have a tentative agreement. And that's the way our relationship is with our employees. We want our employees, uh, to come to work.
Deliver. We need them to work and be very efficient. We give them everything we can to make sure that they work in a safe Manner and all the training necessary using technology. So that's how I look at the at the labor and Union Pacific. It's in the a real positive place. And we're moving ahead, uh, just like, uh, like we want to under, uh, all the agreements that we have.
Speaker Change: Yeah, I I think I was really asking more about shipper feedback on potential. Uh,
Transcontinental.
Yeah. Tom, I sent it from the start is is
Speaker Change: Pretty clear. I you never negotiate publicly.
I think we came out and we're very specific in what we said this morning and that's about all I'm going to say, I'm not going to get into any other detail, uh, when you're in the middle of the negotiation. I don't know about you guys. But, uh, last time I looked when I went and bought a, a home, and I've only moved like 19 times. I don't go tell everybody on the street, what I'm thinking, and where I am, and what I'm going to pay or anything else, you're negotiations. So it's Advanced negotiations, which is good, but that's it. It's as far as I'm going to say Tom, okay.
Speaker Change: Fair enough.
Speaker Change: Thank you.
Speaker Change: The next question is in the line of Basco Majors with Susana, please just see you with your questions.
Jim Venna: Morning. Good morning, Jim. Um, you
as you look out long term, you know,
Jim Venna: up has been pretty committed to the modification approach to refreshing your locomotive Fleet over the last 3 years. Is that agreement? Which I believe predated your arrival. Jim comes to an end here in the next couple of quarters you. How do you feel about the fleet today? Um, you know, what are your intentions and desire to continue? Refreshing it longer
Jim Venna: Term and you know, does a does a combination make that a little more complicated uh than it would have been otherwise. Thank you.
Jim Venna: So that it takes 5 critical assets 5. Critical resources to run this Railroad and locomotives is 1 of them. So what you always want to make sure you're doing and we do it every single day. Is to ensure that to your point, we're making the proper investments in our locomotive Fleet.
Jim Venna: To be clear. We are as we look at the modernization program, that's 1 part of it. It's a very important part of it. It's what allows us to continue to improve reliability. Renew the fleet deliver fuel improvements as well as greenhouse gas emission reductions, but we also have our overhaul program, which is another way to keep our Fleet and a specific operational order that runs efficiently runs reliably. We also have Investments that we make every single day in our shops when we do modifications to the locomotives. So as I look out, all 3 are going to remain very important. Now, the distribution of where we spend in those 3, buckets may change based on the condition of the fleet or the mix of traffic, but all 3 are critical components for us to deliver a consistent and reliable service product to our customers.
Jim Venna: Thank you. Thanks. BAS.
Ken Hexter: The next question is in the line of Ken hexter with Bank of America pleased to see with your question.
Morning Ken. Hey, good morning Jim and team and uh, certainly a a, a loud uh, announcement this morning. So um I want to ask about the operating potential, right? You're at a 581, maybe can you talk about where you think you can still take this Railroad in terms of of operating ratio efficiency? And Jen, you you talked about the ability to hit the upper single digit low double digits Target. I, I think you were kind of saying specifically to this year, right? I I just want to clarify that where it hadn't been. I don't think that specific before and Jim just can you clarify just using words right. You mentioned that it's an advanced. Is there a different stages of discussions that it like we should be taking away with the advanced comment? Thanks.
Speaker Change: Well, that was pretty good Panda. 3 questions. Jennifer, why don't you reiterate? What? Our, what our uh know, we're going to deliver moving forward, our guns? Yeah, thanks. Ken. I don't, we have not said anything different on that EPS piece than what we've been saying, all year. Uh, we're reiterating our 3 year Target. We're confident in our ability to, to, to hit that. We've said that this year's performance will be consistent with hitting that, so I, I really there, there's been no change there. And, you know, obviously, the world's changed a little bit since last September. Um,
You know, we weren't expecting tariffs. We weren't expecting some of the things in the economy. Conversely, we're running, as well as we ever have. So lots of puts and takes all in. We're still very confident in our ability to hit those targets.
Speaker Change: And on the on the second pieces of operation efficiency can, you know, me? You you and I have talked uh if we haven't talked to 100 times I'd be surprised is is I'm very consistent on that. I don't get out and tell people and put a number out and say, this is what we're going to deliver because there's so many puts and takes.
Speaker Change: In uh, in operating the railroad. But bottom line is our goal is is to be the most efficient that would mean.
Speaker Change: so, we have
Speaker Change: It can deliver and that's what it's all about for us and we're real happy in the last few quarters. I think uh, we've been in the in the position that we're leading the industry in that and we want to continue to do that. What it looks like down the road. I don't know. You know if Kenny could go get a whole bunch more price, he would really help us on the on the operating ratio. So maybe I'll have to push him a little harder, can I? I I know you. You've told me a few times that I pushed Kenny a little too hard. So I just thought I'd remind you about that.
Speaker Change: Did I miss any of your questions? Because you had 3 or 4, just the advanced comment. I just want to understand. Is there a signal there? Or what? What, what it means? I, I don't know what what you're trying to send with that comment.
Speaker Change: There's nothing there. Just read it. Then. Think about what it says. That's it. It's as simple as that and you're a smart guy. Okay.
Speaker Change: Appreciate it. Tim thank you. Thank you very much.
Speaker Change: The next question is from the line of Daniel imbro with Stevens. Good to see you with your questions.
Speaker Change: Good morning, Daniel. Yeah. Hey, hey, good morning. Thanks for taking the question, Jim. Um, maybe a different question on regulation here and, and to follow up on part of Chris's question earlier, just with the new Administration and maybe lower regulatory backdrop or are we seeing any progress on things like 0 to 0? 1 Man Crews. I mean, you mentioned, you knew it when it was 5 man, crew is 4 man Crews. I mean, any progress on that push towards automation or, or any closer to a more efficient future with this new Administration?
Yeah, you know, Eric has really been leading a lot of that uh discussion with the F and and so I'll let him let him speak. Go ahead, Eric, Daniel, we're definitely seeing momentum, you know we've always appreciated our partnership with the FAA as an example.
Eric Gehringer: Right now those engagements they they've been uh very effective. They've been prompt. We're trying to move as quickly as possible both as a railroad and the fra but also in the industry. Now you pointed out some of the Technologies and and certainly those are parts of our discussions. But it's broader than that, you know, as we look at Technologies even outside of what's related to group or the number of people in the Capitol locomotive, there's a lot of opportunity for us to continue to improve safety by being allowed to implement Technologies. Some of which have been around for a while, some of which that are just new and some of which that were developing. So, I'm very happy with where we are with all of them. I think the way to measure us against that is the speed at, which we can get through those conversations and get it on, not just our railroad, but many other railroads because the net benefit is a safer railroad industry.
Great. Appreciate the answer.
Eric Gehringer: Thank you very much.
Speaker Change: Our next question is from the line of Jason Sidle with TD, Colin, please receive with your questions. Thanks, operator morning. Um, you know, I I, I guess with your, uh, with your line of questioning or how limited you can be, I could I could ask about if you guys had up too much money and Bouchard for 10 and a half million the season, but I'm going to try anyway. Um, you know, there's been a lot of talk uh about you know, opening up some of this Watershed traffic or accessing it. So can you talk about sort of the market that's out there for the rail industry in terms of how much business you think is available to assess whether it be through a deal or through railroads working together more closely?
Speaker Change: Well, well, let me, let me talk, let me talk real quick about, uh, about the business and the way we look at it, okay? Because that's what's important is is is if you you build the fundamentals and have any have a very efficient railroad, you can open up markets.
That you can handle within the physical plant that you have and that's real important for us.
Speaker Change: Delivering, delivering at a, at a high level.
To deliver what we sold and what we agreed to with the customer. And they know we're consistent and not just, for a short period of time is really important for us to open up opportunity and that's what's really important. And, and you know what? Um I I have a little fun with candy every so often. But Candi is real close to the customers and what we're doing and how we're looking at it and how we want to build together to to win. So, Kenny wanted to fill in some of the gaps. Yeah, I'll just say
Speaker Change: Through our Inner Line alliances. We've always looked at uh, which markets we can open up when you have a strong efficient. Uh,
Speaker Change: Network and and service products that we have today that allows us to look at new opportunities and allows our customers to look at new opportunities. So we're going to keep with that uh, mindset and see if we can grow the business.
Speaker Change: Perfect. Thank you very much. Thanks for the question.
Speaker Change: Thanks.
Speaker Change: Next question, comes from the line of Scott, group, with wolf research, please.
Speaker Change: See, with your questions.
Speaker Change: Good morning, Scott.
Speaker Change: Operating ratio second half price, mix as as you sort of think about the business. And then I know Kenny that
Kenny Rocker: strength and Cole, you know, putting aside the contracts within like
Kenny Rocker: What the sense from customers about the sustainability of this? Do we need to just think about. We start thinking about coal a little bit differently, just giving everything going on the power markets.
Speaker Change: Okay, Scott, I think that was about a 3-part question, but I'm going to give you extra credit because you asked about the fundamentals of the business. So, um, in terms of, you know, how we think about, oh, obviously, Jim's talked about that. That's a, that's an outcome of all the efforts that that we're putting forward. But, you know, our Challenge and our task as a management team is to make continuous Improvement. And so we feel very confident our ability to continue to drive Improvement, as we move through the back, half of the year, um, and you mentioned price mix. So yeah, is we look at the back half of the year. We do actually think assuming, uh, our belief is correct, which I, I think it is in terms of what's going to happen with International Intermodal, as a part of our business mix. We should see that mixed piece turn more positive as as we move through, uh, the second half. So that is an expectation that that we have in their Scott. I think you're you're spot on with that, even though I 1 last comment and then I'll let Kenny talk to Coal but just as a reminder on the coal piece while it
Speaker Change: Is, um, you know, has a higher Arc than our International Intermodal. It is still below the system average. Um, so Kenny, okay? So, yes, and I talked about the natural gas prices. That's certainly playing a role.
Speaker Change: uh but more importantly, the service product that Eric and his team is providing us being able to pull ahead more times and deliver
Speaker Change: More trains especially in a time where they need it, when natural gas prices, are where they are. We benefited from that, obviously, we've talked about the wind, which is also, uh, uplift for us with LC. And I think you had a question about the future and we'll see what happens. I mean, we're looking closely at the impact of, you know, data centers out there and cloud computing. Uh, will it have an impact on coal overall? And maybe we'll see some retirements get pushed out. But right now we're really being opportunistic, uh, with the service and capturing what we can.
Speaker Change: A great opportunity for you to reinforce the buffer resources that they're there. Can you bring the business to the railroad? We're not waiting weeks and months. We're finding that. We have the locomotives, they're pre-positioned. We have the crews and we get the volume on the railroad. Absolutely Build It in America. Yeah, you bet.
Scott, thank you very much, appreciate it.
Speaker Change: Thank you.
Speaker Change: Everyone, a chance to ask a question. We asked you on another question, still 1?
Speaker Change: The next question comes from the line of RA. All right, with de Bank, please receive your questions.
Speaker Change: Good morning. Hey everyone, good morning.
um, so maybe we you can talk
Speaker Change: A little bit about how you see your Intermodal Channel Partners, the imc's fitting into the equation of driving, you know, more domestic, Intermodal and enabling more conversions, you know, it seems like you're doing more translating Services through your own subsidiaries. Do you think that sustainable or you can grow it? You know, can you talk about the new products you're in the domestic side? 7 days a week in various markets, are your IMC, Partners able to keep up? And then I know, uh, just a bone is 1. If you throw me a bone, given its on the Core Business, can you also talked about, I think over 400 projects and you have a line of sight to winning those winning those. And maybe you can talk about, like, customer feedback on turning those on. If those conversations are being accelerated by the new tax plan, anything on the long term outlook for the revenue growth would be helpful. Thank you.
yeah, I I'll just talk, uh, high level about Intermodal and I'll tell you, we're excited about the
Speaker Change: Framework. We have with our portfolio of private asset customers and our own railbox. When we talk to Bo's, they like the fact that they've got a choice of imc's and private asset owners to look at our rail box is very competitive and we've seen it compete. Very favorably in the marketplace.
Speaker Change: The second part of your question is around Industrial Development and yes, the team is out there hustling to bring on more traffic. Uh, engage. We've had some really strong winds already this year. We look at those that's 40 year access. That will be around for a while. We've seen that Cadence there. Uh,
Speaker Change: a slight uptick and run rate from what we've seen uh, in the previous year it's hard to pinpoint down that's because of a
Speaker Change: Thank you, great. Have a good day. Thank you.
Speaker Change: Our next question is from the line of Brandon nolinski with Barclays. Please just use your question.
Speaker Change: Morning, Brandon.
Speaker Change: Hi.
Speaker Change: Good morning Jim. And I guess I want to ask 1 on the historical perspective of the industry just giving your career like how has the interchange process for customers evolved? I mean we always used to talk about Chicago as being a real pain point and so I guess can you talk to where that is today? Some of the challenges that you still see with your shippers and maybe some of the inherent limitations on dealing with that given today's structure?
Speaker Change: I think you always uh, always have to look at how you simplify the movement of products and we do that internally in how we use our Network. And that it's a great example of uh, how we operate. So you can come out of the LA Basin with a number of different products. Not just in our mobile and decide how you're going to move it to the different markets and how, what you've sold to the customer on speed and what the more you can do that. So you remove touch points and we do that all the time. Eric, we spend a lot of time looking at ways that we don't have to process cars in multiple hump yards or mult, multiple switching facilities. And that's 1 of the
You know, here I am talking about our secret sauce. We, we spend a lot of time worried about and have technology that helps us be able to examine it. So for us, that's real important. That's the way we operate. And if you can you can have a much more fluid less touching Railroad and that's what we've driven, it helps us being able to provide a higher level of service because you remove some of that uh noise that happens when you hand off. So, you know, if it gets to the hump yard in in Englewood and you hump it there and then you want to go uh, go all the way to Minneapolis and you're trying to figure out that you, you know, we used to touch those cars 2 or 3 times. Every time you touch something could go wrong but if you do it, uh, in a much more seamless manner, the way we have and also in a cost efficient manner.
Kenny Rocker: Um, it's a win-win sorry for getting into the detail but that's just the way my mind works and and I think Eric does as good a job or maybe even better than me at looking at that stuff. So I give the team a lot of credit and Kenny loves it because we remove some of the noise on how we move the traffic and make it uh less expensive for us to move so that's that's the way I look at it.
Speaker Change: Thanks for the question.
Speaker Change: Thank you.
Speaker Change: The next question is from the line of Walter spracklin. With RBC, please just use your question morning. Walter. How are you? Good, good. Um, yeah. I was lost. My Oilers didn't make it again. Yeah, we were talking. Son of a gun. Okay, keep on going. Let's get back to the railroad. Absolutely, uh, so so I'm going to put murder, you know, if we put aside murder, talk to you. I mean, you and I we have talked in the past about usband traffic making its way up through Canadian ports and that's been a target for you in terms of repatriating that I was wondering, have you ever Quantified that as a total addressable Market as to how much how much you could reach repatriate? And if you even if we were to go after that is, is the port a big bottleneck at all? And in terms of you getting that volume or is it, you know, forget that volume. If we get more East West fluidity, it's really domestic that you're going to focus on not International or modal.
Speaker Change: Well I think you as a as a railroad we look at all ways to be able to grow our business and the the win in the marketplace and that uh it's the entire supply chain is the only way you win. You can have the most efficient 1 piece of it.
That will not Walter allow you to win that business. But if you can deliver it and listen the Canadians and I was there with CN, they've done a a CN and I don't know, CP quite as well. But uh, I'm absolutely sure that Keith's all over at big time. He's a smart guy. Same thing with Tracy,
Kenny Rocker: very smart person. So at the end of the day, they're working hard to make their supply chain better, my job. And all of us here is is to have a competitive product product that we can win. We are competing as railroads every day, so I'll be honest, if I could figure out a way to drop about 3, trains a day coming out of Canada, going into Chicago and uh, winning that Marketplace. I think that's my job. And that's my responsibility and I would do it. Kenny anything. You want to add? Yeah, just the reiterate very strong service product. You heard me talk about, uh, ways that we can penetrate those markets. You know, how do you get a service product that we've created from Tacoma into the Chicago Market? That's 1 way, another way of creating a new ramp at Twin City. So uh, we are on offense when it comes to trying to go out there and grab new business.
Speaker Change: Walter, thank you very much, appreciate it. Thank you, Jim.
Speaker Change: The next question is from the line of Jordan Olinger with Goldman Sachs. Please receive with your question.
Speaker Change: Yeah. Hi just morning just curiosity question you know simultaneous with the discussions you're having with Norfolk Southern do you actually pre discuss or engage in like pre merger chats with the surface Transportation board around this? Thank you.
Speaker Change: Yeah. Listen, I appreciate the question but like I said,
Speaker Change: We've given all the information that 1, those 2 lines that we put out and that's where we are right now. I think that's a lot of information we handed out today. So, uh, so for us, that's that's where we are. And, uh, we'll see what happens next but I appreciate the question. Thank you, thanks.
Speaker Change: Next question is from the line of David Vernon with Bernstein. This is you with your question.
David Vernon: Hey guys. Um and uh Jim thanks for disproving the the thesis that Bolton service or somehow have been in this quarter. Um, very good to thank you very much. Can you is, is you're looking at the um um the the Tariff impacts on some of the grain export risks? You know, I guess it. It occurs to me that that that there could be exports out of this equation is going to be a negative. Um, but if you're looking at the business, whether you're metals or some of the more um, domestic movements, are you seeing any positive as as Freight flows are kind of being redirected, or you know, terrible?
Speaker Change: Sir, is that advising additional production inside of the US? Um, can you talk a little bit about how that balance?
David Vernon: From an overall.
Speaker Change: Impact on the book of business, thanks.
Speaker Change: Biggest positive is the service product that we have out there to handle the stocks and stars that come with tariffs that we've seen over the last call at 7 to to 9 months.
Speaker Change: The also traffic flows have changed. And so when you have a prepared service network and strong service, that's the positive for us,
Taking a step back. If you look at it externally, uh we are starting to see a few uh, green shoots out there. Uh, I met with the customer a couple months ago that said that they were shifting some of their production from, uh,
Speaker Change: Asia and to Mexico, and we've got a strong service product, uh, coming out of Mexico. I mentioned our Industrial Development, uh, pipeline. We're keeping an eye on that to see if uh, we see a little bit more growth on the metal side. Over the long term, we think that that'll be a positive force, even if it doesn't happen today or next week, so encouraged by that.
Speaker Change: Thank you very much, appreciate it.
Speaker Change: All right.
Speaker Change: Thank you. Our next question is from the line of Ari Rosa with credit Swiss, this is you with your questions. All right, good morning.
Ari Rosa: Hey, good morning. Jim and congrats on a nice quarter here. Uh, Jim, you talked about evolving to the changing business environment. It's not really m&a specific but I I was hoping you could talk about what constraints you think up has from kind of a structural Network perspective that inhibited growth a and kind of what prevents you from taking more share off the highways especially with the service levels. As strong as they are today.
Ari Rosa: That sort of type of question a lot. And I like to push my team a little bit so Jennifer, it's yours. Well, thank you Jen. Um, so I'm going to channel my inner Kenny rocker on this 1. Um,
Ari Rosa: but, you know, I think
Ari Rosa: First of all, it does start with the the fundamentals of how we approach our customers, and how we can be flexible with them and how we can provide a great service product. So 1 of the things we really haven't talked about, maybe an inch should talk about more is
Eric and his team are very much partnered with Kenny's team to say, what is this? Customer need, we're, we're deep into those conversations, not just saying, here's our service product. Do you like it? It's more. What service product do you need? And how can we introduce that? How can we serve you better to meet those needs? Can he referenced earlier where we're introducing a couple new Intermodal service products? I know we've got lots of examples, too on the Manifest side where in those customer.
Sessions, they've told us, they need either more frequent day a week service. Maybe changing time of day, Etc. And Eric and his team have worked with that. And that's picked up incremental car loads. And then, I'd also take you back to
Kenny Rocker: With the strong service product, we're saving money for our customers, by taking days out of their Transit time. That's real money for, for our customers, in terms of inventory and in terms of their equipment assets. So it's a, it's a all of of up kind of effort and it's winning and Kenny just raised his hand. So I think he wants to add something Jennifer, you got a A+ but I think that that was good. Thank you. The 1 thing, I'll add that Jim and Erica uh brought to Us is around Carr Supply and equipment supply and you know nearing 100% in that order fulfillment number we're really excited about that and customers are excited.
Kenny Rocker: It gives us an opportunity to get 1 or 2 more cars out of that facility. So that's another win for us.
Kenny Rocker: All right. Thank you very much.
The next question is from the line of Ravi Shanker with Morgan Stanley, please, just shoot with your question. Uh, great thanks. Uh, thanks. Thanks for all the discussion today. Uh, maybe just a follow-up to a previous question. Uh, obviously, you've had, uh, many, many, many, many customer conversations over the years, uh, to what extent have you been effectively asked by your shipper. Customers to see if you can put together something like a transcript on Railroad because they want a service like that. Uh, and they want to take trucks off the road and have to do to what extent kind of has this been, uh, precipitated by customer conversations.
Speaker Change: Customers tell us this, they've been very consistent with me. My entire career. What's my service?
Speaker Change: How do I move to a to the markets? What are my options and then it comes down to what do you charge me for it? So if we can, if we can win on the service, we can win on that. Customers are happy and you can see that like fundamentally this quarter and I think sometimes we get caught up in other noise. But if you look at fundamentally this quarter, we were able to grow our business, okay? We were able to increase our Revenue, we were able to show how efficient we could be when our, our total compensation was up at 1% above with all the inflationary, that's who we are. That's what we sell to our customers. And if we do that, our customers are aligned with us. They want to be with Union Pacific. They want to be with this railroad, they want to win and they want to be with the railroad that opens opportunity for them. It's as simple as that. That's all I have to say. Thank you very much.
Speaker Change: Understood, thank you.
Speaker Change: Thank you. Our final question is from the line of Jeff. Kaufmann with vertical research. Please receive with your question morning, Jeff. Thank you man. Hey, good morning and congratulations to terrific quarter. Thank you for squeezing me in. Um Jen
Speaker Change: Have you looked at the 1, big, beautiful Bill. And it says how that might impact the uh, opportunities and cash flow at the company?
I can ReStore in 100% bonus depreciation obviously is a benefit. We think, um, you know, for us, it's probably uh, cash 250 to 300 million incremental on an annual basis.
Speaker Change: Okay. And that's the primary impact. Are there other?
Speaker Change: Available through the bill, uh, R&D credit regulatory. Yeah, so I think, uh, that's all there.
Speaker Change: Yeah, so there's lots of Jennifer. The only thing I would add is is is you know, the administration talking about deregulation making sure that that, that the businesses have the opportunity to win because we do compete against everybody else in the world is real important to us. And I like some of those things that work specifically in the big, beautiful bill, but help us to compete better and be able to move our products, uh, within the US and internationally. So, thank you for, thank you for the question and I guess, operator. That's the last question. So if I can just, uh,
Tie it up. So I apologize for the curve ball that we sent out, but we thought it was a prudent to put that out.
Speaker Change: But fundamentally was was is more important to myself and the entire team and all 30,000 of of us that work at Union Pacific is as to move this company forward.
Speaker Change: We like where we are.
Speaker Change: Do we have more work to do? We Eric, says it? Well, we are never satisfied. I never wake up in the morning and say, my God, what am I going to do today? It's who can I push? And what can I do to deliver better better operations, and better value to our customers. So we're excited. We had a great quarter, we got a build on this for the third quarter and we're looking forward to having a discussion with all of you uh, for sure. At when we report after the third quarter, have a great day, thank you very much for listening in and taking the time,
Speaker Change: Thank you, ladies and gentlemen. This includes today's conference, you may now disconnect your lines at this time and have a wonderful day.