Q3 2025 Canadian Pacific Kansas City Ltd Earnings Call

October 29, 2025

And I'll be your conference operator today at this time I would like to welcome everyone to see Pkc's third quarter 2025 conference call. The slides accompanying today's call are available at Investor Dot C. P. K C. R Dot com.

Operator: Good afternoon. My name is David, and I'll be your conference operator today. At this time, I'd like to welcome everyone to CPKC's Q3 2025 Conference Call. The slides accompanying today's call are available at investor.cpkcr.com. All lines have been placed on mute to prevent any background noise. After the speaker's 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, you can press star and two. I would now like to introduce Chris de Bruin, Vice President, Capital Markets, to begin the conference call.

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 you can press star two.

Speaker #2: Please stand by; your program is about to begin. Good afternoon. My name is David, and I'll be your conference operator today.

I would now like to introduce Christa Berlin, Vice President capital markets to begin the conference call.

Speaker #2: At this time, I'd like to welcome everyone to Canadian Pacific Kansas City's third quarter 2025 earnings conference call. The slides accompanying today's call are available at investor.

Thank you David Good afternoon, everyone and thank you for joining us today before we begin I want to remind you. This presentation contains forward looking information and actual results may differ materially the risks uncertainties and other factors influence actual results are described on slide two in the press release and in the <unk>.

Chris de Bruin: Thank you, David. Good afternoon, everyone. Thank you for joining us today. Before we begin, I want to remind you this presentation contains forward-looking information and 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 US regulators. This presentation also contains non-GAAP measures outlined on slide three. 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. The formal remarks will be followed by Q&A. In the interest of time, we appreciate if you limit your questions to one.

Chris de Bruyn: Thank you, David. Good afternoon, everyone. Thank you for joining us today. Before we begin, I want to remind you this presentation contains forward-looking information and 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 US regulators. This presentation also contains non-GAAP measures outlined on slide three. 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. The formal remarks will be followed by Q&A. In the interest of time, we appreciate if you limit your questions to one.

Speaker #2: All lines have been placed on mute to prevent any background noise . After the speakers remarks , there will be a question and answer session .

Speaker #2: 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 , you can press star and two .

<unk> filed with Canadian and U S. Regulators. This presentation also contains non-GAAP measures outlined on slide three with me here today is Keith Creel, our President and Chief Executive Officer, <unk>, <unk>, Our executive Vice President and Chief Financial Officer, John Brooks, Our executive Vice President and Chief Marketing Officer, Margaret Our executive Vice.

Speaker #2: I would now like to introduce Chris Debruin, Vice President, Capital Markets, to begin the conference call.

Speaker #3: Thank you . David . Good afternoon , everyone , and thank you for joining us today . Before we begin , I want to remind you this presentation contains forward looking information and actual results may differ materially .

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 one it's now my pleasure to turn the call.

Speaker #3: The risks , uncertainties and other factors that could influence actual results are described on slide two in the press release and in the filed with Canadian and US regulators .

Produce our president and CEO, Mr. Keith Creel, Alright, Thanks, Chris and good afternoon, everyone for joining us here on the call to discuss our third quarter results as always do I'm going to start by expressing our heartfelt gratitude and respect for the 20000 strong family of variable orders across these three nations that and deliver the results that we get down are sharing that.

Chris de Bruin: It's now my pleasure to introduce our President and CEO, Mr. Keith Creel.

Chris de Bruyn: It's now my pleasure to introduce our President and CEO, Mr. Keith Creel.

Keith Creel: All right. Thanks, Chris, good afternoon, everyone, for joining us here on the call to discuss our Q3 results. As I always do, I'm gonna start by expressing heartfelt gratitude and respect for the 20,000 strong family of rail voters across these three nations that delivered the results that we get down are sharing with you today. Speaking of the results, the team delivered strong volume growth in the quarter of 5%. Revenues were up $3.7 billion, up 3%. Operating ratio of 60.7, which was a 220 basis points improvement in earnings per share of $1.10, an increase of 11% versus a year ago.

Speaker #3: This presentation also contains non-GAAP measures outlined on slide three . With me here today is Keith Creel , our president and Chief Executive Officer , Nadeem Velani .

Speaker #3: Our Executive Vice President and Chief Financial Officer, John Brooks; our Executive Vice President and Chief Marketing Officer, Mark Redd; and our Executive Vice President and Chief Operating Officer. The formal remarks will be followed by a Q&A.

With you today, so speaking to the results the team delivered strong volume growth in the quarter, 5% revenues were up.

$3 7 billion up 3% operating ratio of 67, which was the 220 basis points improvement in earnings per share of $1 10, an increase of 11% versus a year ago and most importantly, we saw strong performance from a safety perspective with improvements in both our personal injuries.

Speaker #3: In the interest of time , we'd appreciate if you limit your questions to one . It is now my pleasure to turn to introduce our president and CEO , Mr. Keith Creel .

Speaker #4: Thanks , Chris , and good afternoon , everyone , for joining us here on the call to discuss our third quarter results . As always do I'm going to start by expressing heartfelt gratitude and respect for the 20,000 strong family of railroaders across these three nations that delivered the results that we get on our sharing with you today .

Keith Creel: Most importantly, we saw a strong performance from a safety perspective with improvements in both our FRA personal injuries as well as our industry-leading train accident frequencies. Despite what has been consistent macro and trade policy headwinds, the team continues to generate a diverse, profitable growth across a number of areas. We produce a continuing trend of differentiated performance in our automotive franchise with another record quarter, strength in our bulk franchise with strong growth both in grain and potash. Another strong quarter in intermodal growth in domestic and international, which included an important milestone that we've spoken to before in the quarter with the opening of the new Americo facility here at our terminal in Kansas City.

Well as our industry, leading train accident frequencies.

Right.

Consistent macro and trade policy headwinds the team continues to generate a diverse profitable growth across a number of areas. We produce a continuing trend of differentiated performance in our automotive franchise with another record quarter.

Speaker #4: So speaking of the results , the team delivered strong volume growth in the quarter of 5% . Revenues up 3.7 billion , up 3% .

Speaker #4: Operating ratio of 60.7, which was a 220 basis point improvement in earnings per share of $1.10, an increase of 11% versus a year ago.

Strength in our bulk franchise with strong growth, both in grain and potash and <unk>.

Strong quarter in intermodal growth in domestic and international which included an important milestone that we've spoken to before in the quarter with the opening of the New America facility here at our terminal in Kansas City. This is first the first of several facilities that will be co located on the CP Casey and again, it's a perfect example of our.

Speaker #4: Most importantly , we saw strong performance from a safety perspective , with improvements in both our personal injuries as well as our industry leading train accident free frequencies .

Speaker #4: Despite what has been consistent macro and trade policy headwinds, the company continues to generate a diverse, profitable growth across a number of areas.

Keith Creel: This is the first of several facilities that will be co-located on the CPKC, and again, it's a perfect example of our ability to be market makers with our unique industry network. Mark and the team delivered a very strong execution on the operating side with results, with improvements across a number of our key metrics. The network overall is performing well. We have a lot of operating momentum heading into the end of the year to close out, and we remain on track and fully expect to deliver on our guidance of 10% to 14% earnings growth versus a year ago. That said, while there's certainly a lot of focus currently on potential industry consolidation, we remain focused on executing this unique growth opportunity that CPKC represents. A couple of comments on UP and NS as it pertains to the proposed merger.

Ability to be market makers with our unique.

Speaker #4: We produced a continuing trend of differentiated performance in our automotive franchise with another record quarter strength in our bulk franchise with strong growth both in grain and potash .

Industry network, Mark and the team delivered a very strong execution on the operating side with the results.

With improvements across a number of our key metrics. The network overall is performing well we have a lot of operating momentum heading into the end of the year to close out and we remain on track and fully expect to deliver on our guidance of 10% to 14% earnings growth.

Speaker #4: Another strong quarter in intermodal growth and domestic and international , which included an important milestone that we've spoken to before in the quarter with the opening of the new Americold facility here at our terminal in Kansas City .

<unk> was a year ago.

That said, while there's certainly a lot of focus currently on potential industry consolidation. We remain focused on executing this unique growth opportunity that <unk> represents a.

Speaker #4: This is first a first of several facilities that will be co-located on the Cpkc . And again , is a perfect example of our ability to be market makers with our unique industry network marking the team delivered a very strong execution of the operating side with results with improvements across a number of our key metrics .

A couple of comments on UPN NFS as it pertains to the proposed merger I think we've been very clear about our views. We strongly believe further consolidation is not necessary at this time and is not in the best interest of the industry the shippers or the U S economy have as we said before we remain and we will be active participants throughout the regulatory process.

Keith Creel: I think we've been very clear about our views. We strongly believe further consolidation is not necessary at this time and is not in the best interest of the industry, the shippers, or the US economy. As we said before, we remain and will be active participants throughout the regulatory process to ensure that the facts are known and understood about what a merger of this size and scale means. Just for reiterating the obvious, the proposed merger would result in 1 single line of railroad handling about 40% of the freight rail traffic in the United States. This proposed merger, in spite of what's been said, represents overlapping key markets such as Chicago, Memphis, St. Louis, and New Orleans. This is not a simple end-to-end merger.

Speaker #4: The network overall is performing well . We have a lot of operating momentum heading into the end of the year to close out , and we remain on track and fully expect to deliver on our guidance of 10 to 14% earnings growth versus a year ago .

To ensure that the facts are known and understood about what a merger of this size and scale means.

Speaker #4: That said , while there's certainly a lot of focus currently on potential industry consolidation , we remain focused on executing this unique growth opportunity that cpkc represents .

This for reiterating the obvious the proposed merger would result in one single line railroad handling about 40%, but the freight rail traffic in the United States. This proposed merger in spite of what's been said.

Speaker #4: A couple of comments on VPNs as it pertains to the proposed merger . I think we've been very clear about our views . We strongly believe further consolidation is not necessary at this time and is not in the interest of the industry .

Represents overlapping key markets, such as Chicago Memphis, St. Louis in New Orleans. This is not a simple end to end merger. The merger of this magnitude introduces unprecedented risk by heavily kind of trading much of decision, making for our national rail network with.

Speaker #4: The shippers or the U.S. economy. As we said before, we remain and will be active participants throughout the regulatory process to ensure that the facts are known and understood about what a merger of this size and scale means.

Keith Creel: A merger of this magnitude introduces unprecedented risk by heavily concentrating much of the decision-making for our national rail network with undeniable implications on the entire supply chain. That said, while this is certainly driving a lot of focus, we will remain pleased even if this consolidation happens on maintaining our industry-leading position to continue delivering industry-leading results. A direct threat from a transcon merger to CPKC is minimal. This is a proposed east-west merger. Our network is primarily north-south. By no means does this merger impair or change our unique growth prospects that our three-country network has created for us for years to come, and I'm confident for the merger to meet the regulatory standard it will have to meet, the conditions will have to be meaningful. While much is still to be determined, our story remains unchanged.

<unk> implications on the entire supply chain.

Speaker #4: Just for reiterating the obvious , the proposed merger would result in one single line railroad handling about 40% of the freight rail traffic in the United States .

That said, while this is certainly driving a lot of focus.

We will remain.

Speaker #4: This proposed merger, in spite of what has been said, represents overlapping key markets: Chicago, Memphis, St. Louis, and New Orleans.

These to even if this consolidation happens on maintaining our industry, leading position to continue delivering industry leading results.

Speaker #4: This is not a simple end to end merger . A merger of this magnitude introduces unprecedented risk by heavily concentrating much of the decision making for our national rail network with undeniable implications on the entire supply chain .

The direct threat from a transcon <unk> merger to see PKC is minimal. This is a proposed east west merger our network is.

Primarily north south bound.

No means to further impair change our unique growth prospects that are three country network, it's crazy for us for years to come and I'm confident for the merger to meet the regulatory standards, but it will have to meet the conditions will have to be meaningful.

Speaker #4: That said , while this is certainly driving a lot of focus , we will remain . Pleased even if this consolidation happens . On maintaining a industry leading position to continue delivering industry leading results in a direct threat from a merger , to Cpkc is minimal .

So while much is still to be determined our story remains unchanged and we have a unique network.

The Napoli of proven team and a differentiated growth opportunity in front of us that will continue to set of supporting growth and execution for years to come.

Keith Creel: We have a unique network, undeniably a proven team, and a differentiated growth opportunity in front of us that will continue to set us apart in growth and execution for years to come. We're well positioned to finish the year strong, to produce another year of double-digit earnings growth. This network, this team, this opportunity is unique, and we're gonna continue to deliver value for all stakeholders. With that said, I'm gonna hand it over to Mark to speak to the operation. John's gonna bring a little color on the markets, and Nadeem, the numbers, and then we'll open it up for questions.

We are well positioned to finish the year strong to produce another year of double digit earnings growth. This network. This team. This opportunity is unique and we're going to continue to deliver value for all stakeholders. So with that said I'm going to hand, it over to mark to speak to the operation John is going to bring a lot of color on the markets and they deem the numbers and then we'll open it up for questions.

Speaker #4: This is a proposed east west merger , argues network is primarily north south . By no means does merger impair change . Our unique growth prospects that our three country network has created for us for years to come .

Speaker #4: And I'm confident for the merger to meet the regulatory standard , it will have to meet the conditions , will have to be meaningful .

Speaker #4: So while much is still to be determined, our story remains unchanged. We have a unique network, undeniably a proven team, and a differentiated growth opportunity in front of us that will continue to set us apart in growth and execution for years to come.

Okay. Thanks, Keith good afternoon, I'd like to start by thanking our employees for their dedication and hard work in producing results.

Mark Redd: Thanks, Keith. Good afternoon. I'd like to start by thanking our employees for their dedication and hard work in producing these results. The strong operating performance is a testament to the team's effort and execution in Q3. Looking at the Q3 results, we saw improvements to several of the key operating metrics. If you look at terminal dwell improved by 2%, velocity improved by 1%, train length and train weight improved by 2%. Following the technology cutover that we executed in Q2, we're now leveraging the integrated Canadian-US operating systems to drive further efficiencies and operating discipline. In the quarter, we saw CP legacy network operate at a record productivity and car velocity levels, while the legacy KCS network achieved its highest ever throughput levels.

Strong operating performance is a testament to the team's effort and execution in the third quarter.

Looking at the third quarter results, we saw improvements to several of the key operating metrics Youre looking at terminal dwell improved by 2% velocity improved by 1% train length and train weight and improve by 2%. Following the technology cutover that we executed in the second quarter. We are now leveraging the integrated Canadian U S. Operator.

Speaker #4: We're well positioned to finish the year strong , to produce another year of double digit earnings growth . This network , this team , this opportunity is unique and we're going to continue to deliver value for all stakeholders .

Speaker #4: So with that said, I'm going to hand it over to Marc to speak to the operation. John's going to bring a little color on the markets, and they'll deem the numbers.

Speaker #4: And then we'll open it up for questions .

Systems to drive further efficiencies and operating discipline in the quarter, we saw CPE legacy network operate at a record productivity in car velocity levels.

Speaker #5: Thanks , Keith . Good afternoon . I'd like to start by thanking our employees for their dedication and hard work in producing results .

Speaker #5: The strong operating performance is a testament to the team's effort and execution . The third quarter . Looking at the third quarter results , we saw improvements to several key operating metrics .

The legacy Casey's network achieved its highest ever throughput levels were carrying.

And this momentum into the fourth quarter with solid improvements to the key operating metrics, including velocity dwell and.

Mark Redd: We're carrying this momentum into the Q4 with solid improvements to the key operating metrics, including velocity, dwell, Car-Miles per Car Day, and on-time departures. The strong network performance continues to provide John and his team a product they can sell into. Our 100-series transcontinental and intermodal trains in Canada are delivering consistent performance, along with low dock dwell at Centerm at Vancouver South Shore. This is also supporting the growth within Gemini. Velocity across the bulk network is mid-single digits, driving efficient service for the strong grain harvest in Canada and the US, along with the rest of the bulk franchise. As we continue to drive efficiencies across the network, we expect to further improve in our industry-leading PSR service model, delivering efficient growth and strong customer service. Now turning to safety.

Speaker #5: We look at terminal dwell improved by 2%, velocity improved by 1%, train length and train weight improved by 2%. Following the technology cut over the.

Car miles per car day in on time departures.

The strong network performance continues to provide John and his team a product they can sell into our 100 series Trans Continental intermodal trains and Canada, delivering consistent performance along with low dock dwell, let's send term bank at Vancouver, South Shore. This is also supporting the growth within Germany.

Speaker #5: We executed in the second quarter , we're now leveraging the Canadian U.S. operating systems to drive further efficiencies and operating discipline . In the quarter , we saw CP Legacy Network operate at a record productivity and velocity levels .

Velocity across the bulk network is mid single digits driving efficient service for the grain for the strong grain harvest in Canada, and the U S. Along with the rest of the bulk franchise as we continue to drive efficiencies across the network, we expect to further improve and our industry, leading DSR service model <unk>.

Speaker #5: The legacy KCS network achieved its highest ever throughput levels , were this momentum into the fourth quarter , with solid improvements to the key operating metrics , including velocity , dwell , car miles per car day , and on time departures .

Speaker #5: The strong network performance continues to provide John and his team a product they can sell into our 100 series transcontinental intermodal trains in Canada are delivering consistent performance , along with low Doc dwell .

Every efficient growth and strong customer service now turning to safety.

We strive for perfect perfection during the quarter safety is a continuous journey. Despite a challenging <unk> that occurred in the quarter I'm encouraged and we delivered another quarter with year over year improvements in safety.

Mark Redd: While we strive for perfect perfection during the quarter, safety is a continuous journey. Despite a challenging derailment that occurred in the quarter, I am encouraged that we delivered another quarter with year-over-year improvements in safety. If I look at personal injuries, we landed at 0.95, which is a 3% improvement. Train accident frequency was a 1.15, which is 20% for the quarter. Turning to planning. As we moved into the end of the quarter, our resources are well aligned with our growth outlook. We have now received 91 of the 100 Tier 4 scheduled for delivery this year, locomotives. As we deploy these locomotives primarily on a 100-series transcontinental intermodal service, we're delivering about a 30% reduction in service interruptions compared to a year ago.

Speaker #5: At term at Vancouver South Shore . This is also supporting the growth within Gemini velocity across the bulk network is mid-single digits , driving efficient service for the grain for the strong grain harvest in Canada and the US , along with the rest of the bulk franchise .

Personal injuries, we landed at <unk> 95, which is a 3% improvement train accident frequency was a 1.15, which is 20% for the quarter.

Speaker #5: As we continue to drive efficiencies across the network , we expect to further improve in our industry , leading PSR service model , delivering efficient growth and strong customer service .

Turning to planning as we moved into the end of the quarter. Our resources are well aligned with our growth outlook. We have now received 91 of the 100 tier four scheduled for delivery. This year locomotives as we deploy these locomotives primarily around a 100 series Trans Continental intermodal service we're delivering.

Speaker #5: Now , turning to safety . While we strive for perfect perfection during the quarter , safety is a continuous journey . Despite a challenging derailment that occurred in the quarter .

Speaker #5: I am encouraged that we delivered another quarter with year over year improvements in safety . If I look at personal injuries , we landed at 0.95 , which is a 3% improvement train accident frequency was a 1.15 , which is 20% for the quarter .

During about a 30% reduction in service interruptions compared to a year ago as we're looking to the future we expect to see.

Mark Redd: As we look into the future, we expect to see an additional 70-plus locomotives in 2026, with further support and industry-leading growth outlook. We will also improve the efficiency and reliability of this fleet. In closing, the network is performing well. We are properly resourced to handle the strong grain harvest in Canada and the US. Investments in capital, capacity, safety, locomotives are driving strong network performance, and we are well positioned to execute strong this quarter. Now I'll pass it over to John.

An additional 70 plus locomotives in 2026 with further support to an industry leading growth outlook improve we will also improve the efficiency and reliability reliability of this fleet.

Speaker #5: Turning to planning, as we moved into the end of the quarter, our resources are well aligned with our growth outlook. We have now received 91 of the 100 Tier 4 units scheduled for delivery this year.

Closing the network is performing well we are properly resource to handle the strong grain harvest in Canada and the U S.

<unk> capital.

Speaker #5: Locomotives. As we deploy these locomotives primarily on a 100-series transcontinental intermodal service, we're delivering about a 30% reduction in service interruptions compared to a year ago.

Capacity safety locomotives are driving strong network performance and we are well positioned to execute strong this quarter.

I'll pass it over to John Alright, Thanks, Mark and good afternoon, everyone. I am pleased with our third quarter performance of this franchise is a resilient and our team is producing differentiated growth. Despite the challenging macro economy. We are laser focused on the things we can control our operations at <unk>.

Speaker #5: As we look into the future , we expect to see an additional 70 plus locomotives in 2026 with further support in industry leading growth outlook improved .

John Brooks: All right. Thank you, Mark, good afternoon, everyone. I'm pleased with our Q3 performance of this franchise is resilient and our team is producing differentiated growth despite a challenging macro economy. We are laser focused on the things we can control. Our operations, as Mark said, are delivering strong service that we can sell into, and we are pricing to the value of our capacity and our service. Looking at our Q3 results. This quarter, we delivered freight revenue growth of 4% on 5% increase in RTMs, both the revenue and RTM all-time Q3 records. Cents for RTM was down 1%. Our pricing remains strong as the team continues to deliver renewal pricing above our long-term outlook of 3% to 4%.

Speaker #5: We will also improve the efficiency and reliability of reliability of this fleet . In closing , the network is performing well . We are properly resourced to handle the strong grain harvest in Canada and the US .

Mark said are delivering strong service that we can sell into and we're pricing to the value of our capacity in our service.

Speaker #5: Investments in capital capacity , safety locomotives are driving strong network performance and we are well positioned to execute strong this quarter . I'll pass it over to John .

Now looking at our third quarter results. This quarter, we delivered freight revenue growth of 4% on 5% increase in our Tms, both our revenue and RPM all time Q3 record.

Speaker #6: All right . Thank you , Mark , and good afternoon everyone . I'm pleased with our third quarter performance of this franchise . Is resilient and our team is producing differentiated growth despite a challenging macro economy .

Hence for RPM was down 1% our pricing remains strong as the team continues to deliver renewal pricing above our long term outlook of 3% to 4% pricing.

Speaker #6: We are laser focused on the things we can control our operations . As Mark said , are delivering strong service that we can sell into .

Pricing was offset by mix as we delivered strong growth in bulk in international intermodal, while continuing to leverage our full network and grow our longer length of haul traffic all of which contributed to lower cents per RPM.

John Brooks: Pricing was offset by mix as we delivered strong growth in bulk and international intermodal, while continuing to leverage our full network and grow our longer length-of-haul traffic, all of which contributed to lower cents per RTM. Now taking a closer look at our Q3 revenue performance, I'll speak to the FX-adjusted results. Starting with bulk. Grain revenues were up 4% on 6% volume growth. US grain was strong with volumes up 13% over prior year. We continue to see strong growth into Mexico and the US South as our network unlocks new opportunities and we expand our share into these markets. Looking to the end of the year, the US corn and soybean harvest is going strong.

Speaker #6: And we are pricing to the value of our capacity and our service. Now, looking at our third quarter results this quarter, we delivered freight revenue growth of 4% on a 5% increase in RTMs, both A and RTM.

Now taking a closer look at our third quarter revenue performance I will speak to the FX adjusted results starting with bulk.

Speaker #6: All time Q3 records . Since for RTM was down 1% , our pricing remained strong as a team continues to deliver renewal pricing above our long term outlook of 3 to 4% .

Revenues were up 4% on 6% volume growth U S grain was strong with volumes up 13% over prior year, we continue to see strong growth in the Mexico and the U S South as our network unlocks new opportunities and we expand our share into these markets.

Speaker #6: Pricing was offset by mix as we delivered strong growth in bulk and international intermodal , while continuing to leverage our full network and grow our longer length of haul traffic .

Looking to the end of the year the U S corn and soybean harvest is going strong while our PNW export program is impacted by the tariffs on soybeans are green team is working with our customers across Canada, the U S and Mexico to identify alternative markets and incremental opportunities to backfill.

Speaker #6: All of which contributed to lower cents per RTM . Now , taking a closer look at our third quarter revenue performance , I'll speak to the FX adjusted results starting with bulk grain revenues were up 4% on 6% volume growth .

John Brooks: While our PNW export program is impacted by the tariffs on soybeans, our grain team is working with our customers across Canada, the US, and Mexico to identify alternative markets and incremental opportunities to backfill a portion of this market shortfall. Canadian grain volumes were down 2%, driven by lower carryout stocks from the 2024/2025 harvest, along with lower demand for canola exports. Our outlook, though, is positive for this new crop, and we expect this new crop to be in the range of 78 to 80 million metric tons ahead of the 5-year average, and we expect a strong close to the year for our grain franchise. Potash revenues and volumes up 15%. The strong performance was driven by positive demand fundamentals and strong network performance that supported efficient potash export cycles.

Speaker #6: US grain was strong , with volumes up 13% over prior year . We continue to see strong growth in the Mexico and the US South as our network unlocks new opportunities and we expand our share into these markets .

A portion of this market shortfall Canadian grain volumes were down 2% driven by lower Carryout stocks from the $2024 25 harvest along with lower demand for ethanol exports. Our outlook, though is positive for this new crop and we expect this new crop to be in the range of 70.

Speaker #6: Looking to the end of the year , the US corn and soybean harvest is going strong . While our PA export program is impacted by the tariffs on soybeans , our grain team is working with our customers across Canada , the US and Mexico to identify alternative markets and incremental opportunities to backfill a portion of this market shortfall .

8% to 80 million metric tons.

Head of the five year average and we expect a strong close to the year for our grain franchise.

Potash revenues and volumes by 15% the strong performance was driven by positive demand fundamentals and strong network performance that supported efficient potash exports cycles. While canpotex is fully committed to the end of the year compares are more challenging and we expect growth to moderate.

Speaker #6: Canadian grain volumes were down 2% , driven by lower carryout stock from the 20 2425 harvest , along with lower demand for canola exports .

John Brooks: While Canpotex is fully committed to the end of the year, compares are more challenging and we expect growth to moderate as we move through Q4. To finish out bulk, we closed our Q3 with coal revenue up 3% on 2% volume growth. Growth in Canadian met coal was driven by improved production at our mines and continued inventory drawdowns. This was partially offset with our US coal franchise, driven by a facility outage that happened during the quarter. Now moving on to merchandise. Energy, chemicals, and plastics revenue and volume were down 2%. The decline was driven by a softer base demand, lower crude, and lower refined fuel volumes due to customs border challenges going into Mexico. These headwinds were partially offset by new wins and increased volumes of LPGs.

As we move through Q4.

Speaker #6: Our outlook , though , is positive for this new crop and we expect this new crop to be in the range of 78 to 80 million metric tons , ahead of the five year we expect a strong close to the year for our grain franchise .

And to finish up bulk we closed our third quarter with coal revenue up 3% and 2% volume growth.

Growth in Canadian met coal was driven by improved production at our mines and continued inventory drawdowns. This was partially offset with our U S. Coal franchise, driven by a specific facility outage that happened during the quarter.

Speaker #6: Potash revenues and volumes increased by 15%. The strong performance was driven by positive demand fundamentals and strong network performance that supported efficient potash export cycles.

Now moving on to merchandise energy chemicals, and plastics revenue and volume were down 2%. The decline was driven by a softer based demand lower crude and lower refined fuel volumes due to customs border challenges going into Mexico.

Speaker #6: While Canpotex is fully committed to the end of the year , compares our more challenging and we expect growth to moderate as we move through Q4 and to finish out bulk .

Speaker #6: We closed our third quarter with coal revenue up 3% on 2% . Volume growth . Growth in Canadian coal was driven by improved production at our mines and continued inventory drawdowns .

These headwinds were partially offset by new wins.

And increased volumes of LPG.

With LPG volumes, starting to ramp up and refined fuel shipments rebounding in Mexico, we expect ECP to improve as we exit the year.

John Brooks: With LPG volumes starting to ramp up and refined fuel shipments rebounding into Mexico, we expect ECP to improve as we exit the year. In forest products, revenues and volumes were down 3% and 1% respectively. Volumes in this space continue to be impacted by macro softness within our base demand. However, our team continues to outperform the industry by offsetting some of the broader macro impacts to this business with self-help initiatives and extended length of haul. Metals, minerals, and consumer products revenues and volumes were up 2%. The growth was driven by frac sand volumes to the Bakken, new business wins in the aggregate space, and an increase in both US domestic steel shipments and trade between Canada and Mexico. These efforts helped to offset the impact of tariffs on cross-border steel.

Speaker #6: This was partially offset with our US coal franchise , driven by a facility outage that happened during the quarter . Now moving on to merchandise , energy , chemicals and plastics .

In forest products revenues and volumes were down, 3% and 1% respectively.

Speaker #6: Revenue and volume were down 2% . The decline was driven by a softer base demand , lower crude and lower refined fuel volumes customs border challenges going into Mexico .

Volumes in this space continued to be impacted by macro softness within our base demand.

Our team continues to outperform the industry by offsetting some of the broader macro impacts to this business with self help initiatives and extended length of haul.

Speaker #6: These headwinds were partially offset by new wins and increased volumes of lpgs , with LPG volumes starting to ramp up and refined fuel shipments rebounding into We expect ECP to improve as we exit the year in forest products .

Metals minerals and consumer products revenues and volumes were up 2% the growth was driven by Frac sand volumes to the Bakken new business wins in the aggregate space and and an increase in both U S domestic steel shipments and trade between Canada and Mexico.

Speaker #6: Revenues and volumes were down 3% and 1%, respectively. Volumes in this space continue to be impacted by macro softness within our base demand.

These efforts helped to offset the impact of tariffs on cross border steel.

Now looking ahead, we are encouraged by industrial development projects that are coming online along with further growth opportunities from our land bridge shipments.

Speaker #6: However , our team continues to outperform the industry by offsetting some of the broader macro impacts to this business with self-help initiatives and extended length of haul metals , minerals , and consumer products .

John Brooks: Now looking ahead, we are encouraged by industrial development projects that are coming online, along with further growth opportunities from our land bridge shipments. Moving to the automotive area. As Keith said, revenue was up 2% on 9% volume growth. Both are records. I'm pleased with the performance and resiliency of our auto franchise, despite the uncertainty from evolving trade policy. This continues to be an area of unique growth for CPKC, driven by our advantage footprint, serving both production plants and auto compounds across North America. Despite some of the recent chip and aluminum supply challenges, we are well on our way to producing another record year. Closing with intermodal, revenue was up 7% on 11% volume growth. We delivered strong growth from our domestic intermodal franchise with volumes up 13%.

Moving to the automotive area.

Key said revenue was up 2% on 9% volume growth both are records.

Speaker #6: Revenues and volumes were up 2%. The growth was driven by frac sand volumes to the Bakken, new business wins in the aggregate space, and an increase in both U.S. domestic steel shipments and trade between Canada and Mexico.

I am pleased with performance and resiliency of our franchise. Despite the uncertainty from evolving trade policy. This continues to be an area of unique growth for CP Casey driven by our advantaged footprint, serving both production plants and auto compounds across North America. Despite.

Speaker #6: These efforts helped to offset the impact of tariffs on cross-border steel . Now , looking ahead , we are encouraged by industrial development projects that are coming online , along with further growth opportunities from our land bridge shipments .

Despite some of the recent shift in aluminum supply challenges, we are well on our way to producing another record year.

Closing with intermodal revenue was up 7% on 11% volume growth, we delivered strong growth from our domestic intermodal franchise with volumes up 13%. We continue continue to have a strong line of sight to domestic intermodal growth from multiple areas, including our business.

Speaker #6: Moving to the automotive area . As Keith said , revenue was up 2% on 9% . Volume growth . Both our records . I'm pleased with the performance and resiliency of our auto franchise .

Speaker #6: Despite the uncertainty from evolving trade policy , this continues to be an area of unique growth for Cpkc , driven by our advantaged footprint serving both production plants and auto compounds across North America .

John Brooks: We continue to have a strong line of sight to domestic intermodal growth from multiple areas, including our business growth with Schneider, new auto parts moves, volumes out of the Americold cold storage warehouse co-located with us in Kansas City, and our service with CSX connecting shippers in Mexico, Texas, and the US Southeast. Moving to international intermodal, volumes were up 10% on continued growth from Gemini through our ports at Vancouver, Saint John, and Lázaro Cárdenas. While we definitely have seen pull-forward volumes in a muted peak season, we expect our strong service product and diverse port access to continue to drive opportunities for us in international. In closing, while we are certainly not immune to the many challenges in the freight environment, we continue to drive differentiated growth with our un-unique and resilient North American franchise.

Growth with Schneider, New auto parts move volumes out of the Americold cold storage warehouse co located with us in Kansas City.

Speaker #6: Despite some of the recent chip and aluminum supply challenges , we are well on our way to producing another record year , closing with intermodal revenue was up 7% on 11% .

And our service with <unk> connecting shippers in Mexico, Texas is in the U S southeast.

Moving to international intermodal volumes were up 10% on continued growth from Gemini through our corporate Cat Vancouver, St John and Lazar Roe.

Speaker #6: Volume growth . We delivered strong growth from our domestic intermodal franchise with volumes up 13% . We continue continue to have a strong line of sight to domestic intermodal growth from multiple areas , including our business growth with Schneider , New Auto Parts moves volumes out of the Americold cold storage warehouse co-located with us in Kansas City , and our service with CSX connecting shippers in Mexico , Texas and the US southeast .

While we definitely have seen pull forward volumes in a muted peak season, we expect our strong service product and diverse port access to continue to drive opportunities for us and international.

In closing, while we are certainly not immune to the many challenges in the freight environment. We continue to drive differentiated growth with our unique and resilient North American franchise, we are delivering mid single digit volume, while pricing to the value of our capacity and our service and are looking for.

Speaker #6: Moving to international intermodal volumes are up 10% on continued growth from Gemini through our ports at Vancouver , Saint John and Lazaro . While we definitely have seen pull forward volumes in a muted peak season , we expect our strong service product and diverse port access to continue to drive opportunities for us in international .

John Brooks: We are delivering mid-single digit volumes while pricing to the value of our capacity and our service. Now looking forward, we continue to be well positioned to outperform the industry and the macro on the strength of this franchise, paired with our unique synergies and self-help. With that, I'll pass it to Nadeem.

<unk>, we continue to be well positioned to outperform the industry and the macro on the strength of this franchise paired with our unique synergies and self help with that I'll pass it to <unk>.

Thanks, John and good afternoon, I'll be referring to our third quarter results on slide 12 to start.

Nadeem Velani: All right. Thanks, John. Good afternoon. I'll be referring to our Q3 results on slide 12 to start. CPKC's reported operating ratio was 63.5%, and the core adjusted operating ratio came in at 60.7%, a 220 basis point improvement over prior year. Diluted earnings per share was $1.01, and core adjusted diluted earnings per share was $1.10, up 11% versus last year. Taking a closer look at our expenses on slide 13, I'll speak to the year-over-year variance on an FX-adjusted basis. Comp and benefits expense was $619 million, or $615 million adjusted for acquisition costs.

Speaker #6: In closing, while we are certainly not immune to the many challenges in the freight environment, we continue to drive differentiated growth with our unique and resilient North American franchise.

<unk> reported operating ratio was 63, 5% in the core adjusted operating ratio came in at 67%, a 220 basis point improvement over prior year.

Speaker #6: We are delivering mid-single-digit volume while pricing to the value of our capacity and our service. Now, looking forward, we continue to be well positioned to outperform the industry and the macro on the strength of this franchise, paired with our unique synergies and self-help.

Diluted earnings per share was $1 <unk> and core adjusted diluted diluted earnings per share was $1 10 up 11% versus last year.

A closer look at our expenses on slide 13, I'll speak to the year over year variance on an FX adjusted basis.

Speaker #6: With that, I'll pass it to Nadeem.

Speaker #7: All right . Thanks , John , and good afternoon . I'll be referring to our third quarter results on slide 12 . To start , CPCs reported operating ratio was 63.5% and the core adjusted operating ratio came in at 60.7% .

Comp and benefits expense was $619 million or $615 million adjusted for acquisition costs year over year decline was driven by lower stock based compensation and efficiency gains from workforce optimization and other productivity actions, including improved train weight, along with lower debt heading and held the wait time.

Nadeem Velani: The year-over-year decline was driven by lower stock-based compensation and efficiency gains from workforce optimization and other productivity actions, including improved train weights along with lower deadheading and held away time. The decline was partially offset by inflation and volume variable increases from higher GTMs. To close the year, we expect our average headcount to continue to be slightly lower year-over-year, driving strong labor productivity gains. Fuel expense was $416 million, down 2% year-over-year. The decline was driven primarily by the elimination of the Canadian Federal Carbon Tax on 1 April, partially offset by a volume variable increase from higher GTMs. Overall, changes in fuel prices were a $0.02 headwind to EPS in the quarter. Materials expense was $114 million, up 15% year-over-year.

Speaker #7: A 220 basis point improvement over prior year . Diluted earnings per share was $1.01 and core adjusted diluted diluted earnings per share was $1.10 , up 11% versus last year .

The decline was partially offset by inflation and volume variable increases from higher <unk> Atms.

To close the year, we expect our average head count to continue to be slightly lower lower year over year, driving strong labor productivity gains.

Speaker #7: Taking a closer look at our expenses on slide 13 , I'll speak to the year over year variances on an FX adjusted basis .

Fuel expense was $416 million down 2% year over year. The decline was driven primarily by the elimination of the Canadian federal.

Speaker #7: Comp and benefits expense was $619 million , or $615 million , adjusted for acquisition costs . The year over year decline was driven by lower stock based compensation and efficiency gains from workforce optimization and other productivity actions , including improved training rates along with lower deadheading , and held away time .

Carbon tax on April one, partially offset by a volume variable increase from higher GPM.

Overall changes in fuel prices were a <unk> <unk> headwind to EPS in the quarter.

Materials expense was $114 million up 15% year over year. The increase continues to be driven by the long term parts agreement that was put in place in the fourth quarter of 2024.

Speaker #7: The decline was partially offset by inflation in volume. Variable increases from higher GTMs. To close the year, we expect our average headcount to continue to be slightly lower.

Nadeem Velani: The increase continues to be driven by the long-term parts agreement that was put in place in Q4 2024. Higher materials expense had a favorable offset within PS&O for net savings in the quarter. The increase to materials expense was partially offset by reduced locomotive maintenance spend from improved fleet performance. Equipment rents expense was $109 million. Increased car hire payments along with inflation impacts from growth in automotive volumes drove the increase. Depreciation and amortization expense was up 6%, resulting from a larger asset base. Purchase services and other expense was $565 million, or $555 million adjusted for acquisition costs and purchase accounting. The decline was driven by lower casualty costs, savings from the long-term parts agreement, as well as other productivity and insourcing initiatives.

Higher materials expense had a favorable offset within <unk> for net savings in the quarter.

Speaker #7: Lower year over year , driving strong labor productivity gains . Fuel expense was $415 million , down 2% year over year . The decline was driven primarily by the elimination of the Canadian federal carbon tax on April 1st , partially offset by a volume variable increase from higher gtms .

The increase in materials expense is partially offset by reduced locomotive maintenance spend.

Fleet performance.

Equipment Rins expense was $109 million.

<unk> car hire payments, along with inflation impacts from growth in automotive volumes drove the increase.

Speaker #7: Overall , changes in fuel prices were a two cent headwind to EPs in the quarter . Materials expense was $114 million , up 15% year over year .

Depreciation and amortization expense was up 6%, resulting from a larger asset base.

Speaker #7: The increase continues to be driven by the long term parts agreement that was put in place in the fourth quarter of 2020 . Four .

Purchased services and other expense was $565 million or $555 million adjusted for acquisition costs and purchase accounting.

Speaker #7: Higher materials expense had a favorable offset within snow for net savings in the quarter . The increase to materials expense was partially offset by reduced locomotive maintenance spend from improved fleet performance , equipment rent expense was $109 million , increased car hire payments , along with inflation impacts from growth in automotive volumes , drove the increase depreciation and amortization expense was up 6% , resulting from a larger asset base purchase services and other expense was $565 million , or $555 million .

The decline was driven by lower casualty costs savings from the long term parts agreement as well as other productivity and sourcing initiatives overall, we delivered solid financial results. Despite a $39 million sequential increase in casualty expense.

Nadeem Velani: Overall, we delivered solid financial results despite a $39 million sequential increase in casualty expense, with a $0.03 impact on earnings per. Looking ahead, Mark and his team have our network running well and the volume outlook is solid with strong harvest in both Canada and the US. We continue to generate strong labor productivity and maintain line of sight to solid margin improvement in Q4. Moving below the line on slide 14, other components of net periodic benefit recovery was $107 million, reflecting the effect of favorable pension plan asset returns in 2024. Net interest expense was $222 million or $216 million excluding the impact of purchase accounting. The year-over-year increase was driven by interest incurred on new debt issued in Q1 and Q2 of this year.

But the <unk> impact on earnings.

Looking ahead, Mark and his team have our network running well and the volume outlook is solid with strong harvest in both Canada and the U S.

<unk> to generate strong labor productivity and maintain line of sight to solid margin improvement in the fourth quarter.

Speaker #7: Adjusted for acquisition costs and purchase accounting . The decline was driven by lower casualty costs , savings from the long term parts agreement , as well as other productivity and insourcing initiatives .

Moving below the line on slide 14, other components of net periodic benefit recovery was $107 million, reflecting the effect of favorable pension plan asset returns in 2024.

Speaker #7: Overall , we delivered solid financial results despite a $39 million sequential increase in casualty expense with a three cent impact on earnings per .

Net interest expense was $222 million or $216 million, excluding the impact of purchase accounting year.

The year over year increase was driven by interest by interest incurred on new debt issued in Q1 and Q2 of this year.

Speaker #7: Looking ahead , Mark and his team have our network running well and the volume outlook is solid , with strong harvest in both Canada and the US .

Income tax expense was $296 million or $325 million adjusted for significant items and purchase accounting.

Speaker #7: The continue to generate strong labor productivity and maintain line of sight to solid margin improvement . In the fourth quarter . Moving below the line on slide 14 .

Nadeem Velani: Income tax expense was $296 million or $325 million adjusted for significant items and purchase accounting. We continue to expect CP-CPKC's core adjusted effective tax rate to be approximately 24.5% in Q4 and for the full year. Turning to slide 15 in cash flow. Year-to-date cash provided by operating activities increased 6% to $3.8 billion, while year-to-date cash used in financing activities was up 45%, driven primarily by the share repurchase program. From a CapEx perspective, we've invested $860 million in the quarter and remain on track to invest approximately $2.9 billion in 2025, in line with the outlook we provided in January.

<unk> expect CP <unk> core adjusted effective tax rate to be approximately 24, 5% in Q4 and for the full year.

Speaker #7: Other components of . Net periodic benefit recovery was 107 million , reflecting the effect of favorable pension plan asset returns in 2024 . Net interest expense was 222 million , or 216 million , excluding the impact of purchase accounting .

Turning to slide 15 and cash flow.

Year to date cash provided by operating activities increased 6% to $3 8 billion, while year to date cash used in financing financing activities was up 45% driven primarily by the share repurchase program.

Speaker #7: The year over year increase was driven by interest by interest incurred on new debt issued in Q1 and Q2 of this year . Income tax expense was 296 million , or 325 million , adjusted for significant items and purchase accounting .

From a capex perspective.

Sure.

Invested $860 million in the quarter and remain on track to invest approximately $2 9 billion in 2025 in line with the outlook we provided in January.

Speaker #7: We continue to expect CP cp-kcs core Adjusted effective tax rate to be approximately 24.5% in Q4 and for the full year . Turning to slide 15 and cash flow year to date , cash provided by operating activities increased 6% to 3.8 billion , while year to date cash used in finance financing activities was up 45% , driven primarily by the share repurchase program .

<unk> on our share repurchase program, we have continued to take advantage of the volatility in the market to reward shareholders with disciplined and opportunistic returns, we see strong value in our share price at current levels.

Nadeem Velani: Focusing on our share repurchase program, we have continued to take advantage of the volatility in the market to reward shareholders with disciplined and opportunistic returns. We see strong value in our share price at current levels, and as of the end of Q3, we've repurchased 34 million shares or approximately 91% of the program we announced in March. As we look towards the end of the year, our network is running well and primed to serve strong harvests in Canada and the US. John and his team are delivering mid-single-digit volume growth and strong pricing is in a challenging macroeconomic environment. We're controlling our costs, improving the resiliency of our business and the power of our North American network. We remain well-positioned to meet our guidance and lead the industry with another year of double-digit earnings growth.

And as of the end of the third quarter, we repurchased 34 million shares or approximately 91% of the program we announced in March.

Speaker #7: From a CapEx perspective, we're reinvesting $860 million in the quarter and remain on track to invest approximately $2.9 billion in 2025. In line with the outlook we provided in January, we are focusing on our share repurchase program.

We look towards the end of the year, our network is running well and prime to serve strong harvests in Canada and the U S. John and his team are delivering mid single.

Volume growth and strong pricing.

Hi.

In a challenging economic macroeconomic environment we're in.

Speaker #7: We have continued to take advantage of the volatility in the market to reward shareholders with disciplined and opportunistic returns . We see strong value in our share price at current levels and as and as of the end of the third quarter , we've repurchased 34 million shares or approximately 91% of the program .

Controlling our costs, improving the resiliency of our business and the power of our North American network, we remain well positioned to meet our guidance and lead the industry with another year of double digit earnings growth with that I'll turn it back over to Keith to wrap things up alright. Thank you gentlemen, why don't we open it up for questions operator.

Nadeem Velani: With that, I'll turn it back over to Keith, to wrap things up.

Speaker #7: We announced in March . As we look towards the end of the year , our network is running well and primed to serve strong harvest in Canada and the US .

Keith Creel: All right. Thank you, gentlemen. Why don't we open it up for questions, operator?

Absolutely. Thank you 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 Star two.

Operator: Absolutely. Thank you. If you would like to ask a question, simply press star then 1 on your telephone keypad. If you would like to withdraw your question, press star and 2. As previously highlighted, please limit yourself to 1 question. We'll take our first question from Fadi Chamoun with BMO Capital Markets. Please go ahead. Your line is open.

Speaker #7: John and his team are delivering mid-single digit volume growth and strong pricing is a challenging economic , macroeconomic environment . We're controlling our costs , improving the resiliency of our business and the power of our North American network .

As previously highlighted please limit yourself to one question.

We'll take our first question from faulty Johnson with BMO capital markets. Please go ahead. Your line is open.

Speaker #7: We remain well positioned to meet our guidance and lead the industry with another year of double digit earnings growth . With that , I'll turn it back over to Keith to wrap things up .

Yes. Thank you good evening, everyone. So.

Fadi Chamoun: Yes. Thank you. Good evening, everyone. A question on the M&A topic, if I may. You know, there's been a lot of kind of conversations, discussion out there that if this UP and SC merger ultimately happens, it's gonna trigger, you know, potentially the end game, which effectively ends up being two North American, kind of two major North American railroads, as I understand it. I was just wondering, Keith, from your perspective, does this have to happen? Ultimately, does this consist of moving into that scenario in a multiple of one phase or two phases? You know, also, is there a scenario where one merger happen and ultimately, the rest of the industry can continue to operate at the status quo?

A question on the M&A topic.

Speaker #4: All right . Thank you , gentlemen , why don't we open it up for questions ? Operator .

If I may.

Speaker #2: Absolutely . Thank you . If you would like to ask a question , simply press star . Then the number one on your telephone keypad .

This has been a lot of.

Conversations discussion out there that.

<unk> merger ultimately hub.

Speaker #2: If you would like to withdraw your question , press star . And two , as previously highlighted , please limit yourself to one question .

<unk> bin it's going to trigger.

Potentially the end game, which effectively ended up being two north American.

Kind of two major North American railroad.

Speaker #2: We'll take our first question from Fadi Chamoun with BMO Capital Markets . Please go ahead . Your line is open .

I understand.

I was just wondering Keith from your perspective.

I have to hop in ultimately.

Speaker #8: Yes . Thank you . Good evening everyone . So a question on M&A topic . If I may . You know , there's been a lot of kind of conversations , discussion out there that if this merger ultimately happens , it's going to trigger , you know , potentially the end game which effectively ends up being two North American kind of two major North American railroads .

Does this consist of.

Moving into that scenario.

Multiple.

One trains or two phases.

Or.

So is there a scenario where one merger happen and ultimately.

The rest of the industry can.

We continue to.

Operator.

The status quo.

Speaker #8: I , as I understand it and I was just wondering if from your perspective , does this have to happen ? In ultimately does this consist of moving into that scenario in a multiples of one phase or two phases ?

Yes.

Really good question.

Keith Creel: Yeah. Fadi, that's a really good question. I mean, obviously, it's gonna depend on the details. We've not yet had the benefit of reading UP and NS's merger application. I would say this, I know there's an echo chamber. I read it, I hear it, I sense it. I know there's a lot of invested investors that perhaps want this to be a layup. This is not a layup, number one. It's not a foregone conclusion that they get approved. You know, what we do know is the hurdle is gonna be high. These are rules that have never been tested. There's a public interest test, enhancing competition, a review of downstream impacts, which to your point, includes the likelihood or potential of additional rail consolidation, that those standards have to be met, and this STB is thorough.

<unk> I mean, obviously, it's going to depend on the details.

Not yet had the benefit.

Of reading Cnns's merger application.

I would say this.

I know, there's an echo chamber read it here at our sense. It I know, there's a lot of invested investors that perhaps <unk>. This is not a lay up.

Speaker #8: You know, is there a scenario where one merger happened and ultimately the rest of the industry can continue to operate at the status quo?

Number one.

It's not a foregone conclusion.

And get approved.

What we do know the hurdle is going to be high. These are rules that have never been tested.

Speaker #4: Yes . Sorry . That's a really good question . And a lot I mean , obviously it's going to depend on the details .

There's a public interest test enhancing competition review of downstream impacts which to your point.

Speaker #4: We've not yet had the benefit of reading NS merger application . I would say this . I know there's an echo chamber . I'll read it , I hear it , I sense it , I know there's a lot of invested investors that perhaps want this to be a layup .

The likelihood or potential of additional rail consolidation.

Those things have to be met and this STB is thorough.

I am certain of that I can say that had more so than anybody else in this industry because I've walked this fall can experience this journey and getting our deal approve which was under the old rules.

Keith Creel: I'm certain of that. I can say that more so than anybody else in this industry because I've walked this walk and experienced this journey in getting our deal approved, which was under the old rules, with the hurdle rate not even remotely close to being the same standard. Again, I think to assume or to expect is reckless. That being said, if it gets approved, that's a big if, but if it does, then to your point, depending on what the conditions are, would answer the question. I would make a case to serve and to meet and exceed all those tests that how could it be approved without significant conditions to protect balance in the industry, to protect competition, to enhance competition, given the market power that that size railroad would exert. I would agree. Mr. Vena and I definitely agree.

Speaker #4: This is not a layup . Number one . It's not a foregone conclusion that to get approved , you know what we do know is the hurdle is going to be high .

What the hurdle rate not even remotely close to being the same standard.

So again, I think to assume or to expected plus.

Speaker #4: These are rules that have never been tested . There's a public interest test enhancing competition a review of downstream impacts which to your point , includes likelihood or potential of additional rail consolidation

That being said if it gets approved.

That's a big if but if it does then to your point depending on what the conditions are.

<unk> answered the question.

I would make the case to serve and to meet and exceed all those tests.

How could it be approved without significant conditions to protect balance in the industry to protect competition to enhanced competition given the market power that that size railroad would exert.

So I would agree Mr van or not definitely this STB is smart.

Keith Creel: This STB is smart. Maybe what we don't see eye to eye on is, or maybe not being recognized, this STB has experienced the applicant's behavior historically in previous mergers from 30 years ago, the integration risks that occurred, and most recently, the service failures that occurred in the United States rail industry just 4 years ago. The applicants were before the STB in a service hearing expressing concerns. The applicants have STB relative to the allegations of serious concern on utilizing embargoes to regulate their network. You know, that memory can't be ignored. I don't see that this regulator would set those memories aside in the weight of how they review not only the application, but ultimately determine what their conditions might be to protect the overall strength and health of the US rail network.

Maybe what we don't see eye to eye on.

Is there maybe not be breaking out.

Hello.

This he has experienced the applicants behavior historically previous mergers.

From 30 years ago, the integration risk that occurred and most recently the service failures that occurred in the United States rail industry, just four years ago.

The applicants were before the STB at a service hearing expressing concerns the app <unk> TB relative to the allegations of serious concern on utilizing embargoes.

To regulate their network so.

That may be ignored.

I'm pleased that this regulator, which set those memories the side in the way of how they review not only the application, but ultimately determine what their conditions might be to protect.

The overall strength and health of the U S rail network because ultimately that's what their mandate is to protect the U S rail network to <unk>.

Keith Creel: Because ultimately, that's what their mandate is, it's to protect the US rail network, to make sure that their decisions protect the public interest and ultimately lead to, if we have consolidation, an environment that exists. If the UP and NS are standalone, the others that have to compete have a fair shot at doing that. It's not competition. Let me be clear, it is not competition that anyone is scared of. I think that's a very assumptive statement to make. It's anticompetitive that we recognize and that we're concerned about, and it will be our mandate and our objective to make sure that if that merger is approved, conditions allow anticompetitive behavior to be minimized or eliminated. Yes, you know, with the right conditions, Patty, that's a potential outcome. Again, there's so much more to be determined out of this process.

Make sure that their decision to protect the public interest and ultimately lead to if we have consolidation and environment that exists.

If the <unk> stand alone the others that have to compete have a fair shot at doing that.

It's not competition, let me be clear it is not competition that anyone is scared of I think thats, a various sub to statement to make.

That competitive that we recognize and there were concerns about and it will be our mandate and our objective to make sure that if that mergers.

Conditions allow anti competitive behavior to be minimized or eliminated.

So yes.

With the right conditions fatty that's a potential outcome, but again there is so much more to be determined out of this process. There's a lot of stakeholders that are going to weigh in.

Keith Creel: There's a lot of stakeholders that are going to weigh in. There's going to be people that speak loudly and speak boldly, there are going to be customers, quite frankly, that perhaps they don't want to voice their strong heart feelings for fear of intimidation or fear of retaliation. I'm sure that if they're not said publicly, they'll be said privately. All those facts and conditions and stakeholders' views, I believe this STB will take seriously. I believe their decision, if approved, will contain significant conditions. If they don't meet the standard, I believe they have the mandate, they have the commitment to get this right. History needs it to be right. Our nation needs it to be right. If they don't meet the conditions and the standards, I believe they'll reject it.

There is going to be people that speak.

Loudly.

Slowly and theyre going to be customers quite frankly that perhaps they don't want a voice.

They're.

Strong heartfelt feelings for fear of intimidation or fear of retaliation, but I'm sure that if they're not set publicly there'll be said privately and all those facts and conditions and stakeholders views I believe this STC will take seriously and I believe their decision.

Approval contain significant conditions or if they don't meet the standard I believe they they have that mandate.

They have the commitment to get this right history needs it to be right our nation needs to be right and if they don't meet the conditions of the standardized fleet they'll rejected.

Okay.

We will take our next question from Chris Wetherbee with Wells Fargo. Please go ahead. Your line is open.

Operator: We'll take our next question from Christian Wetherbee with Wells Fargo. Please go ahead. Your line is open.

Hey, Thanks, good afternoon, and I appreciate the comments Keith I guess, maybe just piggybacking on that as you think about the sort of landscape for now and we don't have the application yet we don't know ultimately how the STB is going to respond to that sort of what's the strategy that you can employ are there opportunities for you in the relative near term.

Christian Wetherbee: Yeah. Thanks. Good afternoon. Appreciate the comments, Keith. I guess maybe just piggybacking on that, as you think about the sort of landscape for now, and we don't have the application yet, and we don't know ultimately how the STB is going to respond to that, sort of what's the strategy that you can employ? Are there opportunities for you in the relative near term, you know, to leverage other relationships in the space? How do you think about sort of the landscape right now, at least over the next several quarters?

To leverage other relationships in the space I guess, how do you think about sort of the landscape right now at least over the next several quarters.

Yes.

There is absolutely, yes, and we said when this all started we're not going to sit on our laurels.

Keith Creel: Yeah, the answer is absolutely yes. You know, we said when this all started, we're not going to sit on our laurels. You know, we've been very engaged with the non-applicants to look at creating alliances and to leverage as the regulations require us to exhaust all avenues to achieve merger-like benefits without the risk that a merger represents. Yes, there's opportunities that we're exploring with the western competitor to UP. There's opportunities that we're exploring with the eastern competitor to the NS. We're starting to connect the dots to create markets. I'll tell you, the strategic piece of our railroad that's becoming even more so critically important is that Meridian Speedway. You know, that Meridian Speedway that what was when we took over the railroad is no longer the same.

We've been very engaged with the non Apple.

To look at creating alliances and deleverage.

The regulations require us to exhaust all avenues to achieve merger like bid out the risk.

Our merger represents so.

So yes, there's opportunities that we're exploring with the western competitor Theres opportunities there, we're exploring with eastern competitor.

[Analyst]: For you in the relative near term, to leverage other relationships in the space? How do you think about sort of the landscape right now, at least over the next several quarters?

To the E&S and.

And we're starting to connect the dots to to create markets that I'll tell you the strategic strategic piece of our railroad that is becoming even more so critically important is that already in speedway that meridian speedway debt.

Keith Creel: Yeah, I would say the answer is absolutely yes. You know, we said when this all started, we're not going to sit on our laurels. We've been very engaged with the non-appetizers to look at creating alliances and to leverage, as the regulations require us to, to exhaust all avenues to achieve merger-like benefits without the risk that a merger represents. Yes, there's opportunities that we're exploring with the Western competitor to UP. There's opportunities that we're exploring with the Eastern competitor to the NS. We're starting to connect the dots to create markets. I'll tell you, the strategic piece of our railroad that's becoming even more so critically important is that Meridian Speedway. You know, that Meridian Speedway that was when we took over the railroad is no longer the same.

What was when we took over the railroad is no longer the same it has been enhanced with the connection at Meridian with sex the <unk>, Alabama through Montgomery, two Atlanta, It unlocks a SEC.

Keith Creel: It has been enhanced with the connection at Meridian with the CSX via Myrtlewood, Alabama, through Montgomery to Atlanta. It unlocks a second mainline alternative that gives us unique industry advantage to create markets and bridge traffic between Dallas markets and between southeast US markets. I'm not talking about just intermodal. I'm talking more importantly, the industrial heartland. You think about the industrial development that's being driven to realize President Trump's ambitions, the additional infrastructure that's being put in place for these AI data centers and power centers along that corridor between those southern states and our network runs straight across it. That transaction that we made, which was a niche acquisition over the last two years, we've been investing heavily in it.

Mainline alternative.

So yes, there's opportunities that we're exploring with the western competitor Theres opportunities there, we're exploring with the eastern competitor.

That gives us unique industry advantage to create market and bridge traffic between Dallas markets in between.

The E&S and.

And we're starting to connect the dots to to create markets. It I'll tell you the strategic strategic piece of our railroad that's becoming even more so critically important is that already in speedway that meridian speedway that.

Southeast U S markets and Im not talking about just the intermodal <unk> more importantly, the industrial Heartland do you think about the industrial development, that's being driven to realize president Trump's ambitions.

What was when we took over the railroad is no longer the same it has been enhanced with the connection at Meridian with sex the <unk>, Alabama through Montgomery, two Atlanta, It unlocks a second mainline alternative.

Additional infrastructure, that's being put in place.

Keith Creel: It has been enhanced with the connection at Meridian with the C6 via Myrtlewood, Alabama, through Montgomery to Atlanta. It unlocks a second mainline alternative that gives us unique industry advantage to create markets and bridge traffic between Dallas markets and between Southeast U.S. markets. I'm not talking about just intermodal. I'm talking, more importantly, the industrial heartland. You think about the industrial development that's being driven to realize President Trump's ambitions, the additional infrastructure that's being put in place for these AI data centers and power centers along that corridor between those southern states, and our network runs straight across it. That transaction that we made, which was a niche acquisition over the last two years, we've been investing heavily in it.

For these.

AI data centers and power centers, along that corridor between those southern states that our network runs straight across it.

That transaction that we made which was a niche acquisition over the last two years, we've been investing heavily in it I had the opportunity just last month to take an inspection trip with the <unk> team that started in Montgomery, Alabama went through Murdo silver to meridian into Shreveport.

That gives us unique industry advantage to create market and bridge traffic between Dallas markets in between.

Keith Creel: I had the opportunity just last month to take an inspection trip with the CSX team that started in Montgomery, Alabama, went through Myrtlewood over to Meridian into Shreveport. What was a little short line railroad by, I would say January, February 2026, is going to be a Class Four railroad that allows us to create a transit time and a product option never before possible that's going to connect Atlanta to Dallas in about 30 hours. You think about when people have always thought about the Speedway as being an intermodal product, yes, it is. Yes, we're going to protect our commitment to our partners in that, in that joint venture in what is now NS, and perhaps in the future might be UP. At the same time, it's still the railroad that we dispatch. It has tremendous opportunity.

Southeast U S markets and Im not talking about just intermodal I'm talking more importantly, the industrial Heartland do you think about the industrial development, that's being driven to realize president Trump's ambition.

So what was a little short line railroad.

But I would say January February of 2026 is going to be a class four.

The additional infrastructure, that's being put in place.

Railroad that allows us to create a transit time and our product never before possible.

For these.

AI data centers and power centers, along that corridor between those southern states and our network runs straight across it.

<unk>.

Atlanta, Dallas and about 30 hours, you think about when people have always thought about the speedway as being an intermodal product, yes. It is and yes, we're going to protect our commitment.

That transaction that we made which was the niche acquisition over the last two years, we've been investing heavily in it I had the opportunity just last month to take an inspection trip with the <unk> that started in Montgomery, Alabama went through Murdo Philberta meridian into Shreveport.

Keith Creel: I had the opportunity just last month to take an inspection trip with the CSX team that started in Montgomery, Alabama, went through Myrtlewood, over to Meridian, and to Shreveport. What was a little short-line railroad by, I would say, January or February of 2026 is going to be a class four railroad that allows us to create a transit time and a product option never before possible that's going to connect Atlanta to Dallas in about 30 hours. People have always thought about the Speedway as being an intermodal product. Yes, it is. We're going to protect our commitment to our partners in that joint venture with what is now NS and perhaps in the future might be UP. At the same time, it's still the railroad that we dispatch that has tremendous opportunity. It's not exclusive to freight traffic.

So our partners in that and that joint venture.

What is now an S and perhaps in the future might be.

But at the same time it is still the railroad that we dispatch it has tremendous opportunity it is.

So what was a little short line railroad.

Exclusive too.

But I would say January February of 2026 is going to be a class four.

Keith Creel: It's not exclusive to freight traffic. To create a product that allows us to connect the industrial heartland between Atlanta and Dallas is a pretty powerful model. The 30 hours is truck line competitive, single truck line competitive. I think it's a unique differentiator that can't be replicated in the UP-NS combination that's gonna allow us to win market share working with our partners in the West and our partners in the East. I can tell you they're motivated to work.

Freight traffic.

So to create a product that allows us.

Railroad that allows us to create a time and a product never before possible.

To connect the industrial Heartland between Atlanta, and Dallas is a pretty powerful model.

<unk>.

And at 30 hours, that's truck like competitive single truck like competitive I think it's a unique differentiator that can't be replicated and upenn combination that's going to allow us to win market share working with our partners in the west and our partners in the east.

Atlanta, Dallas and about 30 hours, you think about people have always thought about the speedway as being an intermodal product, yes. It is and yes, we're going to protect our commitment.

So our partners in that and that joint venture.

And I can tell you they are motivated to work.

What is now an S and perhaps in the future might be.

We will take our next question from Brian <unk> with Jpmorgan. Please go ahead. Your line is open.

But at the same time it is still the railroad that we dispatch it has tremendous opportunity it's not exclusive to.

Operator: We'll take our next question from Brian Ossenbeck with J.P. Morgan. Please go ahead. Your line is open.

Hey, good afternoon, thanks for taking the questions.

Freight traffic capex, so to create a product that allows us.

Keith Creel: To create a product that allows us to connect the industrial heartland between Atlanta and Dallas is a pretty powerful model. In 30 hours, it's truck-like competitive, single truck-like competitive. I think it's a unique differentiator that can't be replicated in a UP-NS combination that's going to allow us to win market share working with our partners in the West and our partners in the East. I can tell you they're motivated to work.

Brian Ossenbeck: Hey, good afternoon. Thanks for taking the questions. Maybe just to stick on that topic, Keith, can you give us a little bit of perspective in terms of the headlines we've been seeing around the Meridian Speedway and some of the service disagreements? I don't know if we're gonna see anything settled until the government reopens, but would appreciate your perspective there. You know, just what's the possibility to put through, you know, the Bigbee side of things when you get that track speed up? Is it 2026 when things start to unlock at the beginning of the year, or is that gonna be more of a ratable gain as we look into next year? Thank you.

Just to stick on that topic can you give us a little bit of perspective in terms of the headlines we've been seeing around the meridian Speedway and some of the service.

To connect the industrial Heartland between Atlanta, and Dallas is a pretty powerful model.

30 hours as truck like competitive single truck like competitive I think it's a unique differentiator that can't be replicated and upenn combination that's going to allow us to win market share working with our partners in the west and our partners in the east.

Agreements I don't know if youre going to see anything settled until the government reopens, but would've.

Would appreciate your perspective, there and then just what's the possibility to put through.

<unk> side of things when you get that.

That track speed up is it 2026, when things start to unlock the beginning of the year or is that going to be more of a ratable game as we look into next year. Thank.

And I can tell you they're motivated to work.

We will take our next question from Brian Austin back with Jpmorgan. Please go ahead. Your line is open.

Operator: We'll take our next question from Brian Ossenbeck with JPMorgan. Please go ahead. Your line is open.

Thank you.

Well the service product the actual infrastructure will be done January.

Keith Creel: Well, the service product, the actual infrastructure will be done January...

Brian Ossenbeck: Hey, good afternoon. Thanks for taking the questions. Maybe just to stick on that topic, Keith, can you give us a little bit of perspective in terms of the headlines we've been seeing around the Meridian Speedway and some of the service disagreements? I don't know if we're going to see anything settled until the government reopens, but I would appreciate your perspective there. You know, just what's the possibility to put through the Big D side of things when you get that track speed up? Is it 2026 when things start to unlock at the beginning of the year, or is that going to be more of a ratable gain as we look into next year? Thank you.

Hey, good afternoon, thanks for taking the questions maybe.

Yes.

Track speed to be out there, it's going to be a 49 am on our railroad youre talking about 100 miles.

Brian Ossenbeck: January, yeah. We'll have it.

Maybe just to stick on that topic, Keith can you give us a little bit of perspective in terms of the headlines we've been seeing around the meridian speedway and some of the sort.

Keith Creel: Track speed to be out there. It's gonna be a 49 mile an hour railroad. You're talking about 100 miles transit time from Montgomery to Meridian. Combined is gonna be three and a half, an hour and a half, five hours. You put that with a six-hour run to Atlanta on the CSX, you got 11-hour product to Meridian. I think right now what the NS does is 12 hours. There's room to improve that. It just depends on the density that we put over it for the additional capital investment if we wanna unlock some additional speed. That's not full potential, that's just the ripe, which we think for the market, the sweet spot.

Transit time from Montgomery Baratheon, combined is it going to be three and a half an hour and a half hours.

Disagreements I don't know if youre going to see anything settled until the government reopens, but.

So you put that with a six hour around Atlanta on the CSA actually got 11, our product to Meridian and I think right now with DNS does is 12 hours and there is room to improve that it just depends on the density that we put over it for the additional capital investment if we want to unlock some additional speed. So that's not full potential that's just.

I would appreciate your perspective, there and then just what's the possibility to put through on the <unk> side of things when you get that.

That track speed up is it 2026, when things start to unlock the beginning of the year or is that going to be more of a ratable game as we look into next year. Thank.

Thank you.

Well the service product the actual infrastructure will be done in January.

Keith Creel: The service product, the actual infrastructure, will be done in January.

The rifle, which we think where the March the sweet spot.

Brian Ossenbeck: January, yeah. We'll have it done.

Yes.

Now the dispute itself between sales and NFS and Thats. The dispute is because we have a commercial agreement with E&S to me.

Keith Creel: Track speed to be out there. It's going to be a 49-mile-an-hour railroad. You're talking about 100 miles transit time from Montgomery to Meridian combined is going to be three and a half, an hour and a half, five hours. You put that with a six-hour run to Atlanta on the CSX, you got an 11-hour product to Meridian. I think right now what the NS does is 12 hours. There's room to improve that. It just depends on the density that we put over it for the additional capital investment if we want to unlock some additional speed. That's not full potential. That's just the ripe potential we think for the market, the sweet spot.

Track speed to be out there, it's going to be a 49 mono railroad you're talking about 100 miles.

Keith Creel: Now the dispute itself between ourselves and NS, and that's who the dispute is because we have a commercial agreement with NS, to me is, quite frankly, a self-serving narrative that has no merit. We have prepared our response. We'll give it to the STB as soon as they open up, and it will lay out the real details. What this is a story of two partners that don't like our decision to run the railway the way it was designed. This railway goes back to 2006 when the NS invested with KCS to create the Speedway. There was financial consideration given. There was infrastructure built for 8,500 foot trains. Our predecessors at the KCS allowed the NS to run long trains.

Transit time from Montgomery to Meridian combined is it going to be three and a half an hour and a half hours.

Quite frankly.

The self serving narrative that has no merit.

Prepared our response.

So you put that with our six I'll run the Atlanta on the <unk> you got 11 hour product in Meridian and I think right now with the NSS is 12 hours and there is room to improve that it just depends on the density that we put over it for the additional capital investment if we want to unlock some additional speed. So that's not full potential that's just.

We will give it to the STB as soon as they open up and it will it will lay out the real details with this is is the story.

<unk> Parkers that don't like our decision to run the railway the way. It was designed this railway goes back to 2006, when the E&S invested with Acs to create the speedway. There was financial consideration given there was infrastructure Bill for 8500 footprints, our predecessors that the kcl allowed DNS.

The rifle, which we think for the market.

Spot.

Keith Creel: Now the dispute itself between ourselves and NS, and that's who the dispute is because we have a commercial agreement with the NS, to me is, quite frankly, a self-serving narrative that has no merit. We have prepared our response. We'll give it to the STB as soon as they open up, and it will lay out the real details. What this is, is a story of two partners that don't like our decision to run the railway the way it was designed. This railway goes back to 2006 when the NS invested with KCS to create the Speedway. There was financial consideration given. There was infrastructure built for 8,500-foot trains. Our predecessors at the KCS allowed the NS to run long trains. Frankly, the way I see it as an operating officer, it was to the demise of our customers.

Now the dispute itself between sales and NFS and that's either dispute is because we have a commercial agreement with E&S.

Yes.

To run long trains.

Frankly, the way I see it as an operating officer was to the demise of our customers. That's what we stopped and Thats what <unk> does not like there are provisions within that agreement.

Quite frankly.

Keith Creel: Frankly, the way I see it is an operating officer was to the demise of our customers. That's what we stopped, and that's what NS and UP does not like. There are provisions within that agreement. NS knows what they are. We know what they are. If they want to invest monies to run longer trains, they need to come to the table and invest the monies. The business today doesn't justify it, and I'm not gonna subsidize NS's operation, nor am I gonna subsidize UP's operation for their operational synergies at the cost of my service to my customers. I have a responsibility to protect my customers as well, and that's kind of what it boils down to. It's built to run 8,500 foot trains. That's what we're gonna do.

Ah self serving narrative that has no merit.

Prepared our response.

We will give it to the STB as soon as they open up and it will it will lay out the real details with this is is the story of.

<unk> what they are we know what they are if they want to invest monies to run longer trains then they need to come to the table invest the money the.

Two parkers that don't like our decision to run the railway the way. It was designed this railway goes back to 2006, when the E&S investment.

The business today doesn't justify it and I'm not going to subsidize ns's operation, nor am I going to subsidize <unk> operation for their operational synergies hit the cost of my service to my customers have a responsibility to protect my customers as well.

Yes to create the speedway there was financial consideration given there was infrastructure bill for 8500 foot strengths, our predecessors that the kcl allowed DNS.

What it boils down to its built to run 8500 foot train that's what we're going to do now what we have done out of respect for Mark George and his team for a temporary time period until we can get an additional crews, which we've hired entering training right now theres going to be an additional train start that comes on middle of November.

To run long trains.

Frankly, the way I see it as an operating officer was to the demise of our customers. That's what we stopped and Thats what <unk> does not like there are provisions within that agreement.

Keith Creel: What we have done, out of respect for Mark George and his team, for a temporary time period until we can get an additional cruise, which we've hired and are in training right now, there's gonna be an additional train start that comes on middle of November. In the meantime, NS has worked out a temporary agreement with us to pay us for the additional delays that were occurring, allowing one long eastbound run until that second train start is added the middle of November, and then we're gonna re-revert right back to an 8,500 foot railroad. I'll tell you, this is kind of the proof's in the pudding. When you try to oversubscribe a network and run long trains and the network's not built for it, some is gonna suffer.

Keith Creel: That's what we stopped, and that's what NS and UP does not like. There are provisions within that agreement. NS knows what they are. We know what they are. If they want to invest monies to run longer trains, then they need to come to the table and invest the money. The business today doesn't justify it, and I'm not going to subsidize NS's operation, nor am I going to subsidize UP's operation for their operational synergies at the cost of my service to my customers. I have a responsibility to protect my customers as well. That's kind of what it boils down to. It's built to run 8,500-foot trains. That's what we're going to do.

NSO is what they are we know what they are if they want to invest monies to run longer trains then they need to come to the table invest the money.

In the meantime, NFS is worked out a tape.

For your agreement with us to pay us for the additional delays that were occurring allowing one long eastbound run until that a second train start is that at the middle of November and that we're going to reverse.

The business today doesn't justify it and I'm not going to subsidize ns's operation, nor am I going to subsidize <unk> operation for their operational synergies at the cost of my service to my customers that have a responsibility to protect my customers as well and that kind of what it boils down to its built around 8500 foot train that's what we're going to do now what we have.

Right back to an 8500 foot railroad.

I'll tell you that's kind of the proofs in the pudding when you try to Oversubscribe and network and run long trains and the networks not built for it some is going to start the <unk>.

Keith Creel: Now, what we have done, out of respect for Mark George and his team, for a temporary time period until we can get an additional crew, which we've hired and are in training right now, there's going to be an additional train start that comes on middle of November. In the meantime, Norfolk Southern (NS) has worked out a temporary agreement with us to pay us for the additional delays that were occurring, allowing one long eastbound run until that second train start is added to the middle of November. We're going to revert right back to an 8,500-foot railroad. I'll tell you, this is kind of the proof's in the pudding. When you try to oversubscribe a network and run long trains and the network's not built for it, somebody's going to suffer.

Have done out of respect for Mark George and his team for a temporary time period until we can get an additional crews, which we've hired and are in training right now theres going to be an additional train start that comes on middle of November.

Communities across and G block, whether it's the yards, where you're holding the trains out with some of the applicants have some history in that.

Keith Creel: If it's the communities from the crossings you block, whether it's the yards where you're holding the trains out, which some of the applicants have some history in that, or it's our trains that have to take a siding, for someone else's train at our demise. We ran the railroad for 7, 8 weeks at 8,500 feet, over the last 2 months before we allowed this exception to occur. We measured the delay. Our trains were taking over an 11-hour delay a day to accommodate a long east train. It doesn't make any sense. It's not the right operating decision. It's not the right commercial decision. It's not the right bottom line decision. We're being fair and reasonable. It's no more than that.

Our trains that had to take a siding.

For someone else's trends at our demise, we ran the railroad for seven or eight weeks at 8500 feet over the last two months before we allow this exception to occur we measured the delay powertrain for taken over 11 hour play a day.

In the meantime, NFS is worked out a.

A temporary agreement with us to pay us for the additional delays that were occurring allowing one long eastbound run until that a second train start is added the middle of November and that we're going to revert back to an 8500 foot railroad.

To accommodate following.

And I'll tell you that's kind of the proofs in the pudding when you try to Oversubscribe and network and run longer trains in the networks not build forth. Some he is going to suffer the two communities across <unk> block, whether it's the yards, where you're holding the trains out.

It doesn't make any sense it.

It's not the right thing decision, it's not the right commercial decision, it's not the right bottom line decision, we're being fair.

Keith Creel: Whether it's the communities in the cross-engine block, whether it's the yards where you're holding the trains out, which some of the applicants have some history in that, or it's our trains that had to take a siding for someone else's train at our demise. We ran the railroad for seven, eight weeks at 8,500 feet over the last two months before we allowed this exception to occur. We measured the delay. Our trains were taking over an 11-hour delay a day to accommodate a long eastbound train. It doesn't make any sense. It's not the right operating decision. It's not the right commercial decision. It's not the right bottom-line decision. We're being fair and reasonable. It's no more than that.

It's no more than that.

Some of the applicants have some history in that for our trains that have to take a siding.

We'll take our next question from Jonathan Chappell with Evercore ISI. Please go ahead. Your line is open.

Operator: We'll take our next question from Jonathan Chappell with Evercore ISI. Please go ahead. Your line is open.

Thank you and good afternoon, Keith I'll, let you take a little break here Nadeem and John.

Keith Creel: Thank you. Good afternoon. Keith, I'm gonna let you take a little break here. Nadeem and John, we've seen the quarter to date volumes trending, you know, not at mid-single digits. I think there was an anticipation, just given the way that October's been, that, you know, getting to that mid-single digit full year, that double-digit earnings growth full year may be a bit challenging and really, frankly, off the table. It's a bit surprising that you've kept it. Can you kind of just help us forge the path over the next 8 to 9 weeks on how you get that volume up to the mid-single digits, how you get that sub 57 OR? You know, just what do you have line of sight on that's clear to you that that's still attainable with just 8 weeks to go?

Jonathan Chappell: Thank you. Good afternoon. Keith, I'm gonna let you take a little break here. Nadeem and John, we've seen the quarter to date volumes trending, you know, not at mid-single digits. I think there was an anticipation, just given the way that October's been, that, you know, getting to that mid-single digit full year, that double-digit earnings growth full year may be a bit challenging and really, frankly, off the table. It's a bit surprising that you've kept it. Can you kind of just help us forge the path over the next 8 to 9 weeks on how you get that volume up to the mid-single digits, how you get that sub 57 OR? You know, just what do you have line of sight on that's clear to you that that's still attainable with just 8 weeks to go?

In the quarter to date volumes trending not at mid single digits. So.

I think there is an anticipation just given the way that October has been that getting to that mid single digit full year that double digit earnings growth full year may be a bit challenging and really frankly off the table. So it's a bit surprising that you've kept it can you kind of just help us.

To accommodate following.

Train doesn't make any sense. It is not the right thing decision, it's not the right commercial decision, it's not the right bottom line decision, we're being fair and reasonable.

For now.

Forged the path over the next eight to nine weeks on how you get that volume up to the mid single digits. How do you get that sub 57 LR.

Okay.

And we'll take our next question from Jonathan Chappell with Evercore ISI. Please go ahead. Your line is open.

Operator: We'll take our next question from Jonathan Chappell with Evercore ISI. Please go ahead. Your line is open.

Just what do you have line of sight on Thats clear to you that that's still attainable with just eight weeks ago.

Thank you and good afternoon.

Brian Ossenbeck: Thank you. Good afternoon. Keith, I'm going to let you take a little break here. Nadeem and John, we've seen the quarter-to-date volumes trending, you know, not at mid-single digits. I think there was an anticipation, just given the way that October's been, that, you know, getting to that mid-single-digit full year, that double-digit earnings growth full year may be a bit challenging and, frankly, off the table. It's a bit surprising that you've kept it. Can you kind of just help us forge the path over the next eight to nine weeks on how you get that volume up to the mid-single digits, how you get that sub-57% operating ratio? You know, just what do you have line of sight on that's clear to you that that's still attainable, with just eight weeks to go?

I'll, let you take a little break here.

Beaman and John.

We've seen quarter to date volumes trending.

Yeah. Good question I would say that if you look at at our year over year, certainly tough compares as we speak so that's known to us.

Nadeem Velani: Yeah. No, good question. I'd say that if you look at our year-over-year, certainly tough compares as we speak, so that's known to us. Not really any surprises on that front. We also have some very easy compares in November when you think about some of the labor disruptions a year ago that impacted our business through some of our customers as well. When we look at the opportunity in November and December, we think that we have the ability to continue to deliver the mid-single-digit RTMs. I think we have strong visibility. Now, there's a chip shortage issue on the auto side that's come up, and we're mindful of that.

Got it mid single digits. So.

There was an anticipation just given the way that October has been that getting to that mid single digit full year that double digit earnings growth full year may be a bit challenging and really frankly off the table. So it's a bit surprising that you've kept it can you kind of just help us.

So not really any surprises on that front.

But we also have some very easy compares in November when you think about some of the.

The labor disruptions a year ago.

Forged the path over the next eight to nine weeks on how you get that volume up to the mid single digits. How do you get that sub 57 LR.

That impacted our business through.

Through some of our customers as well and so.

When we look at the opportunity in November and December we think that we.

Just what do you have line of sight on Thats clear to you that that is still attainable.

We have.

To deliver the mid single digit our Tam and.

Weeks ago.

And that will be.

John Brooks: Yeah. No, good question. I'd say that if you look at our year-over-year, certainly tough compares as we speak. That's known to us, not really any surprises on that front. We also have some very easy compares in November. You think about some of the labor disruptions a year ago that impacted our business through some of our customers as well. When we look at the opportunity in November and December, we think that we have the ability to continue to deliver the mid-single-digit RTMs. That'll be, I think we have strong visibility. Now, there's a chip shortage issue on the auto side that's come up, and we're mindful of that. We think on the bulk side, there's enough offsets to be able to support our top-line view and our guidance from that perspective.

Yeah. Good question I would say that if you look at at our year over year, certainly tough compares as we speak so that's known to us.

I think we have strong visibility now theres, a chip shortage issue on the auto side that that.

Thats come up and we're mindful of that but we think on the on the bulk side there's enough.

Not really any surprises on that front.

Nadeem Velani: We think on the bulk side, there's enough offsets to be able to support our top-line view and our guidance from that perspective. From a cost point of view, from an operating leverage point of view, I think we're gonna see benefits similar to what we saw Q4 a year ago or the previous year to that. You know, we've had some very strong finishes to the year, and we have good visibility to the ability to get a sub 57 type of operating ratio or that level, plus or minus, depending on what mark-to-market the stock price is as well. We are very confident we'll be able to achieve at least 10% EPS growth for the year.

Offsets to be able to support our topline view in our guidance from that perspective from a cost point of view from an operating leverage point of view I think we're going to see benefits similar to what we saw Q4.

But we also have some very easy compares in November when you think about some of the.

The labor disruptions a year ago.

That impacted our business through.

Through some of our customers as well and so.

When we look at the opportunity in November and December we think that we.

A year ago.

Previous year to that we've had some very strong finishes to the year and we have good visibility to the ability to get.

We have.

To deliver that mid single digit our Tam and that will be.

I think we have strong visibility now theres, a chip shortage issue on the auto side that.

157 type of operating ratio or that level, plus or minus depending on what mark to market the stock prices as well, but we are very confident we'll be able to to achieve at least 10% EPS growth for the year. So we're not backing off of that.

<unk> come up and we're mindful of that but we think on the on the bulk side there is enough.

Offsetting to be able to support our topline view in our guidance from that perspective.

Nadeem Velani: We're not backing off of that, with eight or nine weeks here left to go.

Eight or nine weeks here left to go.

John Brooks: From a cost point of view, from an operating leverage point of view, I think we're going to see benefits, similar to what we saw Q4 of a year ago. For the previous year to that, we've had some very strong finishes to the year. We have good visibility to the ability to get a sub-57 type of operating ratio or that level, plus or minus, depending on what mark-to-market the stock price is as well. We are very confident we'll be able to achieve at least 10% EPS growth for the year. We're not backing off of that, with eight or nine weeks here left to go.

From a cost point of view from an operating leverage point of view I think we're going to see benefits similar to what we saw Q4.

Well take our next question from Steve Hansen with Raymond James. Please go ahead. Your line is open.

A year ago.

Operator: We'll take our next question from Steve Hansen with Raymond James. Please go ahead. Your line is open.

The previous year to that we've had some very strong finishes to the year and we have good visibility to the ability to get some.

Yes. Thanks for time, guys quick one I just wanted to dovetail back on the grain.

Steve Hansen: Yeah, thanks for time, guys. Quick one. I just wanted to dovetail back on the grain opportunity. I recognize you've described it as being a sizable harvest, but, you know, do you feel like the customers have given you a sense for whether there's upside opportunity or how that's gonna track in terms of timing? Just mindful of some of the feed issues still out there and pricing on the farm and whether or not farmers are gonna be eager to move it through Q4 or gonna be deferring into the first half. Thanks.

Opportunity I recognize you've described it as being a sizeable harvest, but do you feel like the customers that gives you a sense for whether there is upside opportunity.

57 type of operating ratio or that level, plus or minus depending on what mark to market the stock prices as well.

Or how that's going to track in terms of the timing just mindful of some of the REIT issue.

But we are very confident we'll be able to to achieve at least 10% EPS growth for the year. So we're not backing off of that.

We are still out there and great thing on the farm and whether or not the farmers can be eager to move it through the fourth quarter are going to be.

Eight or nine weeks here left to go.

<unk> into the first half.

Yes, Thanks, Steve John Yes, certainly it's something we're watching closely.

Nadeem Velani: Yeah. Thanks, Steve. It's John. Yeah, certainly it's something we're watching closely. There's no doubt it feels like the grain companies are having to sort of pull the grain into the elevator a little bit, you know, versus maybe that typical push we'll see at harvest. You know, right now, I'm pleased with our cycles. I'm pleased with the number of sets we have in play in Canada. You know, honestly, we've been able to whatever softness we've maybe felt in the North, we've been able to let the bag fill with good opportunities on our Southern franchise. It's gonna be teamwork between the two franchises, Canada and the US, and we're gonna need sort of all the markets at play. Our execution is as we described.

John Brooks: Yeah. Thanks, Steve. It's John. Yeah, certainly it's something we're watching closely. There's no doubt it feels like the grain companies are having to sort of pull the grain into the elevator a little bit, you know, versus maybe that typical push we'll see at harvest. You know, right now, I'm pleased with our cycles. I'm pleased with the number of sets we have in play in Canada. You know, honestly, we've been able to whatever softness we've maybe felt in the North, we've been able to let the bag fill with good opportunities on our Southern franchise. It's gonna be teamwork between the two franchises, Canada and the US, and we're gonna need sort of all the markets at play. Our execution is as we described.

Well take our next question from Steve Hansen with Raymond James. Please go ahead. Your line is open.

Operator: We'll take our next question from Steve Hansen with Raymond James. Please go ahead. Your line is open.

There is no doubt it feels like the grain companies are having to sort of pull the grain into the elevator a little bit.

Yes. Thanks for time guys quick one I just wanted to dovetail back on the grain opportunities I recognize you've described it as being a sizeable harvest, but do you feel like the customers that gives you a sense for whether there's upside opportunity.

Mark Redd: Yeah, thanks for that, guys. Quick one. I just wanted to dovetail back on the grain opportunity. I recognize you've described it as being a sizable harvest. Do you feel like the customers have given you a sense for whether there's upside opportunity or how that's going to track in terms of timing? Just mindful of some of the grain issues still out there and pricing on the farm and whether or not farmers are going to be eager to move it through the fourth quarter or are going to be deferring into the first half. Thanks.

Versus maybe that that typical push we will see at harvest right.

Right now.

I am pleased with our cycles I'm pleased with the number of sets we have in play in Cana.

How that's going to track in terms of the timing just mindful of some of it.

Canada and honestly, we have been able to whatever softness we may be felt in the north we have been able to backfill with good opportunities.

They're still out there and pricing on the farm and whether or not the farmers can be eager to move it through the fourth quarter.

Going into the first half.

On our southern franchise, so it's going to be teamwork between the two franchises, Canada and in the U S.

John Brooks: Yeah. Thanks, Steve. It's John. Yeah, certainly, it's something we're watching closely. There's no doubt it feels like the grain companies are having to sort of pull the grain into the elevator a little bit, you know, versus maybe that typical push we'll see at harvest. You know, right now, I'm pleased with our cycles. I'm pleased with the number of sets we have in play in Canada. And, you know, honestly, we've been able to, whatever softness we've maybe felt in the north, we've been able to backfill with good opportunities on our southern franchise. It's going to be teamwork between the two franchises, Canada and in the U.S., and we're going to need sort of all the markets at play. Our expectation is, as we described, we're going to run it hard right to the end.

Yes, Thanks, Steve It's John Yes, certainly it's something we're watching closely.

There is no doubt it feels like the grain companies are having to sort of pull the green into the elevator a little bit.

And we're going to need sort of all the markets at play but are is as we described we're going to run it hard right to the end.

Versus maybe that that typical push we will see at harvest.

Nadeem Velani: We're gonna run it hard right to the end.

John Brooks: We're gonna run it hard right to the end.

Right now.

We'll take our next question from Scott Group with Wolfe Research. Please go ahead. Your line is open.

I am pleased with our cycles I'm pleased with the number of sets we have in play in <unk>.

Operator: We'll take our next question from Scott Group with Wolfe Research. Please go ahead. Your line is open.

Hey, thanks.

Canada and honestly, we have been able to whatever softness we may be felt in the north we have been able to backfill with good opportunities.

Nadeem <unk> have been down a bit the last couple of quarters can you just talk about underlying pricing trends and when do you think this metric turns positive and then maybe Keith just bigger picture.

Scott Group: Hey, thanks. Nadeem, since Cents per GTM have been down a bit the last couple quarters, can you just talk about underlying pricing trends and when you think this metric turns positive? Then maybe, Keith, just bigger picture. You know, when I think back to the Analyst Day, you guys talked about a mid-teens earnings algorithm, and it's been closer to 10. That's still really good on a relative basis, but not like at the absolute level you talked about. Do you still think mid-teens is the right algorithm? What do we need to unlock it? Is it just macro? Is it more price, cost? I don't know, what do you think we need to sort of get back to that mid-teens growth?

On our on our southern franchise, so it's going to be teamwork between the two franchises, Canada and in the U S.

I think back to the analyst day, you guys talked about a mid teens.

Earnings algorithm and it's been closer to 10 is still really good on a relative basis, but not the absolute level you talked about do you still think mid teens is the right algorithm what do we need to unlock it is it just macro or is it more price cost.

And we're going to need sort of all the markets at play, but our position is as we described we're going to run it hard right to the end.

Operator: We'll take our next question from Scott Group with Wolf Research. Please go ahead. Your line is open.

We'll take our next question from Scott Group with Wolfe Research. Please go ahead. Your line is open.

What do you think we need to sort of get back to that mid teens growth.

Hey, thanks.

Nadeem Velani: Hey, thanks. Nadeem, since parts of the M have been down a bit the last couple of quarters, can you just talk about underlying pricing trends and when you think this metric turns positive? Maybe, Keith, just bigger picture. When I think back to the analyst day, you guys talked about a mid-teens earnings algorithm. It's been closer to 10%. That's still really good on a relative basis, but not at the absolute level you talked about. Do you still think mid-teens is the right algorithm? What do we need to unlock it? Is it just macro? Is it more price, cost? I don't know. What do you think we need to sort of get back to that mid-teens growth?

Nadeem part GM have been down a bit the last couple of quarters can you just talk about underlying pricing trends and when you think this metric turns positive and then maybe Keith just bigger picture.

Alright, Thanks, Scott So just a reminder, that federal carbon tax that.

Nadeem Velani: All right. Thanks, Scott. Just a reminder that that federal carbon tax that was removed in April, that did impact Cents per RTM, but the thing is it also to flow through, so it does come out of our expenses. That's been a big headwind on Cents per RTM the last few quarters. All that to say, in Q4, we should see positive Cents per RTM, so we should see it inflect positive right now as we speak. That'll be supportive. I'd say that, you know, you'll see small low single digits, but it will be positive as we speak. We've also had some mixed impacts that have impacted that.

Was removed in April that did impact since for our Tam, but thing is it also to flow through so it does come out of our expenses. So.

When I think back to the analyst day, you guys talked about a mid teens.

That's been a big headwind.

<unk> the last few quarters, but.

All that to say in Q4, we should see positive sense per RPM. So we should see it inflect positive.

Right now as we speak so.

That will be.

What do you think we need to sort of get.

Supportive I would say that.

Back to that mid teens growth.

Yes.

Youll see all low single digits, but it will be positive as we speak we both had some mix impacts that have impacted that.

John Brooks: All right. Thanks, Scott. Just a reminder that the federal carbon tax that was removed in April did impact cents per RTM. The thing is, it also does flow through, so it does come out of our expenses. That has been a big headwind on cents per RTM the last few quarters. All that to say, in Q4, we should see positive cents per RTM. We should see it inflect positive right now as we speak. That will be supportive. I'd say that you'll see small low single digits, but it will be positive as we speak. We've also had some mix impacts that have impacted that. Autos, for example, the length of haul is up significantly and the mix of business. We should see that turn. Pricing has been strong.

Alright, Thanks, Scott So just a reminder that federal carbon tax.

Was removed in April that did impact since for our Tam, but thing is it also to flow through so it does come out of our expenses. So.

Autos for example, the length of haul has been up significantly in the mix of business, but we should see that turn pricing has been strong John and his team have done an exceptional job of being able to keep that above inflation in closer to 4% on a same store basis. So I would say that that will.

Nadeem Velani: You know, autos, for example, the length of haul has been up significantly and the mix of business, but we should see that turn. Pricing has been strong. John and his team have done an exceptional job of being able to keep that above inflation and closer to 4% on a same-store basis. I'd say that will continue as we foresee into 2026. To your point on double digit versus kind of mid-teens, you know, the macro has been challenging. There's been, you know, some have also heard us, crude this quarter was a casualty with a crude derailment was a significant headwind, which we didn't foresee.

That's been a big.

Headwind on <unk>, the last few quarters, but.

All that to say in Q4, we should see positive sense per RPM. So we should see it inflect positive.

Continue.

As we foresee in 2026.

Right now as we speak so that'll.

That'll be.

To your point on on double digit versus kind of mid teens.

I would say that.

Youll see.

So the macro has been challenging theres been.

Low single digits, but it will be positive as we speak we both had some mix impacts that have impacted that.

Also hurt us.

<unk> this quarter was significant.

With the crude derailment was a significant headwind.

We didn't foresee if we didn't have that we had a more normal casualty.

Nadeem Velani: You know, if we didn't have that, if we had a more normal casualty expense in the quarter, we would've been sub 60 for the quarter. That's on us. We put it on the ground, and we have to take those costs. I would

John Brooks: John and his team have done an exceptional job of being able to keep that above inflation and closer to 4% on a same-store basis. I'd say that will continue as we foresee into 2026. To your point on double-digit versus kind of mid-teens, the macro has been challenging. There's been some also hurt us, crude. This quarter was a significant casualty with a crude derailment, which was a significant headwind we didn't foresee. If we didn't have that, if we had a more normal casualty expense in the quarter, we would have been sub-60 for the quarter. That's on us. We put it on the ground, and we have to take those costs. I would imagine, and I expect, going forward, we'll have a more normal casualty. Our safety numbers have been strong, but the cost of incidents have been high. That will be supportive.

<unk> in the quarter, we would've been sub 60 for the quarter now Thats on US we we put it on the ground and we.

You have to take those costs, but.

That will continue.

We foresee in 2026.

Imagine and I expect going forward, we will have a more normal casualty our safety numbers have been strong, but the cost of incidents have been high so that will be supportive.

John Brooks: Imagine, and I expect, going forward, we'll have a more normal casualty. Our safety numbers have been strong, but the cost of incidents have been high. That will be supportive. As far as the mid-teens, we'll start seeing benefits of share repurchase starting next year, right? We announced the program in Q1, kinda mid, late Q1 of 2020 of this year. 2026, we'll start seeing year-over-year benefits from the lower share count. That was part of the algorithm of getting double-digit closer to mid-teens type of growth. We've delivered quite well on the volume front, but I think we could do more with a better macro environment. We're still waiting for that turn.

Nadeem Velani: Imagine, and I expect, going forward, we'll have a more normal casualty. Our safety numbers have been strong, but the cost of incidents have been high. That will be supportive. As far as the mid-teens, we'll start seeing benefits of share repurchase starting next year, right? We announced the program in Q1, kinda mid, late Q1 of 2020 of this year. 2026, we'll start seeing year-over-year benefits from the lower share count. That was part of the algorithm of getting double-digit closer to mid-teens type of growth. We've delivered quite well on the volume front, but I think we could do more with a better macro environment. We're still waiting for that turn.

To your point on on double digit versus kind of mid teens.

So the macro has been challenging theres been.

As far as the mid teens, we will start seeing benefits of share repurchase starting next year, when we announced the program in Q1 kind of mid late Q1 of 2020 of this year. So 2026, we'll start seeing year over year benefits from the lower share count and that was part of the algorithm of getting double digit closer to mid.

Also hurt us.

This quarter was significant our casualty crude derailment was a significant headwind, which we didn't foresee if we didn't have that if we had a more normal casualty.

<unk> expense in the quarter, we would've been sub 60 for the quarter now that's on US we we put it on the ground and we.

Teens type of growth.

Delivered quite well on the volume front, but I think we can do more with a better macro environment. So we're still waiting for that turn but as that and flex.

Have to take those costs, but.

Imagine and I expect going forward, we will have a more normal casualty our safety numbers have been strong, but the cost of incidents have been high so that will be supportive.

John Brooks: As that inflects, and we start seeing a more supportive economy, we start seeing some of this tariff noise get behind us and more certainly for our customers, we start seeing this benefits of strong bulk volumes, especially with this very strong Canadian grain crop. I think you have a potential, 2026 for that to turn closer to what we highlighted at our Investor Day as mid-teens EPS growth. That's kind of what we had highlighted as through to 2028. We're kind of in that sweet spot of 2026 to 2027 to 2028 of being in that mid-teens, and I still feel that we can achieve that.

And we start seeing its more supportive economy, we started seeing some of this tariff noise get behind us and more certainty for our customers. We start seeing the benefits of strong bulk volumes, especially with this very strong Canadian grain crop I think you have a potential.

Nadeem Velani: As that inflects, and we start seeing a more supportive economy, we start seeing some of this tariff noise get behind us and more certainly for our customers, we start seeing this benefits of strong bulk volumes, especially with this very strong Canadian grain crop. I think you have a potential, 2026 for that to turn closer to what we highlighted at our Investor Day as mid-teens EPS growth. That's kind of what we had highlighted as through to 2028. We're kind of in that sweet spot of 2026 to 2027 to 2028 of being in that mid-teens, and I still feel that we can achieve that.

John Brooks: As far as the mid-teens, we'll start seeing benefits of share repurchase starting next year, right? We announced the program in Q1, kind of mid-late Q1 of 2024. In 2026, we'll start seeing year-over-year benefits from the lower share count. That was part of the algorithm of getting double-digit closer to mid-teens type of growth. We've delivered quite well on the volume fronts, but I think we could do more with a better macro environment. We're still waiting for that turn. As that inflects, and we start seeing a more supportive economy, we start seeing some of this tariff noise get behind us and more certainty for our customers. We start seeing the benefits of strong bulk volumes, especially with this very strong Canadian grain crop. I think you have a potential, 2026 for that to turn closer to what we highlighted at our investor day as mid-teens, EPS growth.

As far as the mid teens, we will start seeing benefits of share repurchase starting next year, when we announced the program in Q1 kind of mid late Q1 of 2020 of this year. So 2026, we will start seeing year over year benefits from the lower share count and that was part of the algorithm of getting double digit closer to the mid <unk>.

26 for that to turn closer to what we highlighted at our Investor day is mid teens EPS growth and that's kind of what we had highlighted.

Teens type of growth, we've delivered quite well on the on the volume front, but I think we can do more with a better macro environment. So we're still waiting for that turn but as that and flex and.

Through to 2028, so we're kind of in that sweet spot of 26% to 27%, 28% being in that mid teens and I still feel that we can achieve that.

And we start seeing its more supportive economy, we start seeing some of this tariff noise get behind us and more certainty for our customers. We started seeing the benefits of strong bulk volumes, especially with this very strong Canadian grain crop I think you have a potential to.

We'll take our next question from <unk> with Scotiabank. Please go ahead. Your line is open.

Operator: We'll take our next question from Konark Gupta with Scotiabank. Please go ahead. Your line is open.

Thanks for taking my question, maybe it's for John perhaps.

Konark Gupta: Thanks for taking my question. I think maybe it's for John, perhaps. If we look into Q4, I guess, you have easier comps coming up in November, December. Any insights into the potash and intermodal traffic, John, so far in October? Seems like pretty low, and I think you flagged some of the comps issues in the potash. Anything else besides the comps that's being on the potash and on the intermodal side, any issues you're seeing with the imports coming down on the US ports?

If we look into Q4, I guess, you have easier comps coming up in November December, but any any insights into the potash and intermodal traffic John So far in October it seems like pretty low and I think you flagged.

26 for that to turn closer to what we highlighted at our Investor day is mid teens EPS growth and that's kind of what we had highlighted.

John Brooks: That's kind of what we had highlighted as through to 2028. We're kind of in that sweet spot of 2026 to 2027 to 2028 of being in that mid-teens, and I still feel that we can achieve that.

Some would be comps issues in the potash, but anything else. Besides the comps that's being on the potash and on the intermodal side any issues youre seeing but imports coming down on the U S sports.

Through to 2028, so we're kind of in that sweet spot of 26% to 27% 28 being in that mid teens and I still feel that we can achieve that.

Yes so.

We'll take our next question from <unk> Gupta with Scotiabank. Please go ahead. Your line is open.

Operator: We'll take our next question from Kanak Gupta with Scotiabank. Please go ahead. Your line is open.

Yes, the potash is all driven around the compares we just we had some surge testing some different things. We did last year that made October awfully strong.

John Brooks: Yeah. Yes, the potash is all driven around the compares. We just, we had some surge testing and some different things we did last year that made October awfully strong. Now I do expect, you know, Canpotex, as I said, is sold out to close the year. We're gonna run that and push that as hard as we can. You know, in the intermodal front, I expect a really strong close on our domestic intermodal. We've got continued good line of sight, as I mentioned in my prepared remarks, to a number of pieces of business that are gonna start up in the quarter. And frankly, we're just starting to see the ramp-up of our reefer business in and out of Mexico with Americold.

[Analyst]: Thanks for taking my question. I think maybe it's for John, perhaps. If we look into Q4, I guess you have easier comps coming up in November, December. Any insights into the potash and intermodal traffic, John, so far in October? It seems like pretty low. I think you flagged some of the comps issues in the potash. Anything else besides the comps that's weighing on the potash and on the intermodal side? Any issues you're seeing with the imports coming down on the U.S. ports?

Thanks for taking my question, maybe John perhaps.

Now I do expect.

Canpotex is I said is sold out to to close the year, we're going to run that and push that as hard as we can.

Some would be comps issues in the potash, but anything else. Besides the comps that's being on the potash and the intermodal side and the issues youre seeing but imports coming down on the U S ports.

On the intermodal front.

Expect a really strong close on our domestic intermodal.

We've got continued good line of sight as I mentioned in my prepared remarks to a number of pieces of business that are going to start up in the quarter.

Yes so.

John Brooks: Yeah. The potash is all driven around the compares. We just had some surge testing and some different things we did last year that made October awfully strong. I do expect, you know, Campatex, as I said, is sold out to close the year. We're going to run that and push that as hard as we can. You know, on the intermodal front, I expect a really strong close on our domestic intermodal. We've got continued good line of sight, as I mentioned in my prepared marks, to a number of pieces of business that are going to start up in the quarter. Frankly, we're just starting to see the ramp-up of our reefer business in and out of Mexico with AmeriCold. Continued to be, and frankly, our transload business across Canada continues to be strong. I see pretty good numbers on our domestic intermodal side.

Yes, the potash is all driven around the compares we just we had some surge testing and some different things. We did last year that made October awfully strong.

Frankly, we are just starting to see the ramp up of our reefer business.

And out of Mexico with Americold, So I continued to be and frankly, our trans load business across Canada.

Now I do expect.

John Brooks: Continued to be, and frankly, our transload business across Canada continues to be strong. I see pretty good numbers on our domestic intermodal side. You know, the international has been a challenge relative to Q3, some of the, maybe the pull-ahead volumes and muted peak. That being said, I'm not seeing the blank sailings. I'm not seeing additional challenges. I can tell you we're kind of foreseeing the current run rate to persist as we move through November and December.

Canpotex is I said is sold out to to close the year, we're going to run that and push that as hard as we can.

Continues to be strong so.

I see I see pretty good numbers on our domestic intermodal side.

In the intermodal front I.

The international has been a challenge relative to the third quarter some of them, maybe the pull ahead volumes and muted peak.

Expect a really strong close on our domestic intermodal.

We've got continued good line of sight as I mentioned in my prepared remarks.

But that being said I'm not seeing the blank sailings I am not seeing additional challenges I can tell you we're kind of foreseeing the current run rate to persist as we move through November and December.

A number of pieces of business that are going to start up in the quarter.

And frankly, we're just starting to see the ramp up of our reefer business.

And out of Mexico with Americold, So I continued to be and frankly, our trans load business across Canada.

We will take our next question from Walter <unk> with RBC capital markets. Please go ahead.

Operator: We'll take our next question from Walter Spracklen with RBC Capital Markets. Please go ahead.

Continues to be strong so.

I see I see pretty good numbers on our domestic intermodal side.

Yes, thanks, very much David good afternoon, everyone.

Walter Spracklin: Yeah. Thanks very much, David. Good afternoon, everyone. I'd like to come back to you, John, on volumes. I know Norfolk Southern in their call flagged that they were seeing some diversions in volume away from them as a result of the proposed merger. I think most would see CSX as the beneficiary of that. I'm curious to see if you're seeing any customers being making decisions along those lines that would favor you and seeing in terms of volumes over to your line currently. Could you see that as contract negotiations come up, do you see any opportunity to take advantage of that if that is indeed a trend we're seeing into 2026?

John Brooks: The international has been a challenge relative to the third quarter, maybe some of the pull-ahead volumes and muted peak. That being said, I'm not seeing the blank sailings. I'm not seeing additional challenges. I can tell you we're kind of foreseeing the current run rate to persist as we move through November and December.

Like to come back to you John.

The international has been a.

On volumes in <unk>.

Relative to the third quarter some of them, maybe the pull ahead volumes and muted peak.

I know Norfolk southern in there and they are in their call.

But that being said I'm not seeing the blank sailings I'm not seeing additional challenges I can tell you we're kind of foreseeing the current run rate to persist as we move through November and December.

Flag that they were seeing some diversions in volume away from them as a result of the proposed merger and I think most would say <unk> is the beneficiary of that but I'm curious to see if you're seeing any customers being.

Making decisions along those lines that would favor you and seeing in terms of volumes over to your line currently.

We will take our next question from Walter <unk> with RBC capital markets. Please go ahead.

Operator: We'll take our next question from Walter Spracklin with RBC Capital Markets. Please go ahead.

Nadeem Velani: Yeah, thanks very much, David. Good afternoon, everyone. I'd like to come back to you, John, on volumes. I know Norfolk Southern, in their call, flagged that they were seeing some diversions in volume away from them as a result of the proposed merger. I think most would see CSX as the beneficiary of that. I'm curious to see if you're seeing any customers making decisions along those lines that would favor you and seeing, in terms of volumes, over to your line currently, or could you see that as contract negotiations come up? Do you see any opportunity to take advantage of that if that is indeed a trend we're seeing into 2026?

Yes, thanks, very much David good afternoon, everyone.

Or could you see that.

As contract negotiations come up.

Like to come back to you John.

Do you see any opportunity to take advantage of that if that is indeed a.

On volumes.

Norfolk Southern in there and they are in their call.

A trend we are seeing into 2026.

Flagged that they were seeing some diversions in volume away from them as a result of the.

Well sort of emphasize the key said theres certainly a lot of dialogue going on on that front and what sort of products weakened.

John Brooks: Well, I sort of emphasize what Keith said. There's certainly a lot of dialogue going on on that front on what sort of products we can partner and create to leverage the strengths of some of those other franchises. You know, those are things that, you know, maybe we've looked at in the past, but are certainly maybe coming to the forefront in terms of opportunities. I do believe that narrative becomes a part of what our, you know, 2026 growth platform could look like and add. There's no doubt about we're already seeing opportunities shift onto our Meridian Speedway route with the CSX. You know, as Keith mentioned, the product design is to be up and running in Q1 of 2026, but it's not a bad product as we sit here today.

Our proposed merger and I think most would say <unk> is the beneficiary of that but I'm curious to see if youre seeing any customers being.

<unk> and create the leverage the strengths of some of those other <unk>.

Franchises.

Those are things that maybe we've looked at in the past but are certainly.

Making decisions along those lines that would favor you and seeing in terms of volumes over to your line.

Currently.

Maybe coming to the forefront in terms of opportunities I do believe that narrative becomes.

Or could you see that as contract negotiations come up.

Do you see any opportunity to take advantage of that if that is indeed a.

Part of.

What our 2026th growth platform could look like in an AD. There is no doubt about we're already seeing opportunities.

A trend we're seeing into 2026.

Bob.

John Brooks: I sort of emphasize what Keith said. There's certainly a lot of dialogue going on on that front and what sort of products we can partner in and create the leverage and strengths of some of those other franchises. You know, those are things that maybe we've looked at in the past, but are certainly maybe coming to the forefront in terms of opportunities. I do believe that narrative becomes a big part of what our 2026 growth platform could look like and add. There's no doubt about it, we're already seeing opportunities shift onto our Meridian Speedway route with CSX. As Keith mentioned, the product design is to be up and running in Q1 of 2026, but it's not a bad product as we sit here today. There's certain customers that certainly want the optionality, or have been willing to test that product.

To emphasize the key said Theres certainly a lot of dialogue going on on that front and what sort of products weakened.

Shift onto our Meridian Speedway route with the CSF.

Hartner and create the leverage the strengths of some of those other <unk>.

Keith mentioned the <unk>.

Product design is to be up and running in Q1 of 'twenty six, but it's not a bad product as we sit here today.

Franchises.

Those are things that maybe we've looked at in the past but are certainly.

And.

There are certain customers that certainly want the optionality.

John Brooks: There's certain customers that certainly want the optionality or have been willing to test that product. You know, we talk a lot about maybe in and out of Texas, Atlanta, in those marketplaces, but there's an awful lot of freight that is just really conducive to our network into the Southeast that flows out of Mexico.

Maybe coming to the forefront in terms of opportunities I do believe that narrative becomes.

Been willing to test that product so that in.

We talk a lot about maybe in and out of Texas.

Bart.

Of what our 2026th growth platform could look like an AD. There is no doubt about it we're already seeing opportunities.

Atlanta in those marketplaces, but theirs.

There's an awful lot of freight that is just really conducive to our network.

Shift onto our Meridian Speedway route with the CSF.

Into the southeast that flows out of Mexico.

And that's frankly, an area or whether it is competing against <unk>.

Keith mentioned.

Nadeem Velani: That's, frankly, an area whether it is competing against, you know, short line, today, or taking trucks off the road, that we've been able to key on with the CSX team. Frankly, a lot of that is new growth opportunities. It's not taking freight off of NS or another competitor. It's new opportunities we're bringing to the roof. In the same vein, there are those opportunities where customers are looking for optionality, and we'll give them that.

John Brooks: That's, frankly, an area whether it is competing against, you know, short line, today, or taking trucks off the road, that we've been able to key on with the CSX team. Frankly, a lot of that is new growth opportunities. It's not taking freight off of NS or another competitor. It's new opportunities we're bringing to the roof. In the same vein, there are those opportunities where customers are looking for optionality, and we'll give them that.

The product design is to be up and running in Q1 of 2006, but it's not a bad product as we sit here today.

<unk> see.

Today.

Or taking trucks off the road that we've been able to key on with the <unk>.

There are certain customers that certainly want the optionality.

<unk> team.

And frankly, a lot of that is new growth opportunity, that's not taken freight off of off of.

Been willing to test that product, so and that in.

John Brooks: We talk a lot about maybe in and out of Texas, Atlanta, and those marketplaces, but there's an awful lot of freight that is just really conducive to our network, into the Southeast that flows out of Mexico. That's, frankly, an area whether it is competing against short sea today, or taking trucks off the road, that we've been able to key on with the CSX team. Frankly, a lot of that is new growth opportunities. It's not taking freight off of NS or another competitor. It's new opportunities we're bringing to roost. In the same vein, there are those opportunities where customers are looking for optionality, and we'll give them that.

NFS or another competitor, it's new opportunities, we're bringing the roof, but but in the same vein. There are those opportunities where customers are looking for optionality and we will give them that.

We talk a lot about maybe in and out of Texas.

Atlanta and in those marketplaces, but theirs.

There's an awful lot of freight that is just really conducive to our network.

And John I would add from an operating side I mean from the MB connection that we add through Myrtle wood.

Mark Redd: John, I would add from an operating side, I mean, from the M&B connection that we have through Myrtlewood, it's, you know, Mike Cory and team, CSX team, they've been really energized with us on the operating side to make that happen, to get the speed of the network up and just make the good positive connection at Myrtlewood itself. That certainly is promising.

Into the southeast that flows out of Mexico.

Mike Orienting SaaS X team has been they've been really energized with us on the operating side to make that happen.

And that's frankly, an area whether it is competing against.

Short sea.

Get the get the speed of the network up and just make the good positive connection that Myrtle would itself. So certainly as promised.

Today.

Or taking trucks off the road that we've been able to Qian.

The <unk> team.

And frankly, a lot of that is new growth opportunity, that's not taken freight off of.

We will take our next question from Ken <unk> with Bank of America. Please go ahead. Your line is open.

Operator: We'll take our next question from Ken Hoexter with Bank of America. Please go ahead. Your line is open.

Hey, great good afternoon.

Ken Hoexter: Hey, great, good afternoon. Mark, first time in a while, I think we've heard you break out kind of the KCS network versus the CP network and performance. Can you delve into maybe what's left to get KCS to CP operating levels? You know, I don't know, Nadeem, if you wanna talk about the cost synergies or go back to the synergies of what you've achieved and where we're trending on those. Keith, just an M&A quick one, but do you think political pressure to get the M&A process moving faster can have an effect or will this take the full 16, 17 months of a normal process?

Mark first time in a while I think we've heard you break out kind of the Acs network versus the CP network and.

Nadeem Velani: John, I would add from an operating side, from the M&B connection that we had through Myrtlewood, Mike Corey and the CSX team have been really energized with us on the operating side to make that happen, to get the speed of the network up and just make the good positive connection at Myrtlewood itself. It certainly is promising.

John I would add from an operating side I mean from the human connection that we add through Myrtle wood.

<unk> can you delve into.

Maybe what's left to get Casey's to.

Mike Orienting SaaS next team has been had been really energized with us on the operating side to make that happen to get the get the speed of the network up and just make the good positive connection that Myrtle would itself. So certainly as promised.

CP operating levels.

I don't know Nadeem, if you want to talk about the cost synergies or go.

Go back to the synergies of what you've achieved and where we're trending on those.

And then Keith just on M&A quick one, but do you think political pressure to get the M&A process moving faster.

We will take our next question from Ken <unk> with Bank of America. Please go ahead. Your line is open.

Operator: We'll take our next question from Ken Hoexter with Bank of America. Please go ahead. Your line is open.

Okay.

Have an effect or will this take the full 16 17 months.

Mark Redd: Hey, great. Good afternoon. Mark, first time in a while, I think we've heard you break out kind of the KCS network versus the CP network and performance. Can you delve into maybe what's left to get KCS to CP operating levels? I don't know, Nadeem, if you want to talk about the cost synergies or go back to the synergies of what you've achieved and where we're trending on those. Keith, just an M&A quick one, do you think political pressure to get the M&A process moving faster can have an effect, or will this take the full 16, 17 months of a normal process?

Hey, great good afternoon.

A normal process.

Mark first time in a while I think we've heard you break out kind of the Casey's network versus the CP network and performance can you delve into.

Yes, let me I'll answer that one before Mark I think there is no way in the world for this to have a thorough review that it occurs less than 16 to 17 months.

Keith Creel: Yeah, I'll answer that one before Mark. I think there's no way in the world for this to have a thorough review that it occurs in less than 16 to 17 months. I think that's sufficient. If you think about our review, our review took a lot longer than that. You've got an STB that, quite frankly, the chair of the STB has signaled, and I believe I'll hold him to his word, that he's gonna take the statutes and the timeline seriously. That means don't exceed them. I also think it means, especially with you know, the gravity of this transaction, it also means don't cut them short. You've got a lot of people that deserve and want and will need to take ample time to review the application, ample time to respond.

Maybe what's left to get case, yes.

I think thats sufficient if you think about our review our review took a lot longer than that you've got an STB that.

To CP operating levels.

I don't know Nadeem, if you want to talk about the cost synergies or or go back to the synergies of what you've achieved and where we're trending on those.

Quite frankly.

The chair of the STB signal that I believe are holding to his word that he is going to take the statutes and the timelines seriously that means don't exceed and I also think it means, especially with the granted the gravity of this transaction. It also means don't cut I'm sure you've got a lot of people that deserve and want and we will need to take.

Keith just on M&A quick one, but do you think political pressure to get the MAA process moving faster.

Can can have an effect or will this take the full 16 17 months of <unk>.

Normal process.

Ample time to review the application Apple ample time to respond and I think that's the only way you get to a place where the STB can make a fulsome thorough decision as if all the facts have been shared and heard and understood and then they will ultimately decide does it or does it not meet the public interest does it or does it not enhanced competition.

Keith Creel: Yeah, let me, I'll answer that one before Mark. I think there's no way in the world for this to have a thorough review that it occurs in less than 16 to 17 months. I think that's efficient. If you think about our review, our review took a lot longer than that. You've got an STB that, quite frankly, the chair of the STB has signaled, and I believe I'll hold him to his word, that he's going to take the statutes and the timeline seriously. That means don't exceed them. I also think it means, especially with the gravity of this transaction, it also means don't cut them short. You've got a lot of people that deserve and want and will need to take ample time to review the application, ample time to respond.

Yeah, Let me I'll answer that one before market I think there is no way in the world for this to have a thorough review that it occurs less than 16 to 17 months.

Keith Creel: I think that's the only way you get to a place where the STB can make a fulsome, thorough decision, is if all the facts have been shared and heard and understood, and then they'll ultimately decide, does it or does it not meet the public interest test? Does it or does it not enhance competition? If so, what conditions are required for that to be true? Again, I get back to, I'm not gonna put odds on it. It's not a layup. I'm gonna stick with basketball. You know, it's not a half court shot, it's a three-quarter shot the way I see it. We'll see how efficient the applicants are to navigate that.

I think thats sufficient if you think about our review our review took a lot longer than that you've got an STB that.

Frankly the.

The chair of the STB signaled that I believe are holding to his word that he is going to take the statutes in the times on seriously that means don't exceed them and I also think it means, especially with the granted the gravity of this transaction. It also means don't cut I'm sure you've got a lot of people that deserve and want and we will need to take.

Mission.

And if so what conditions are required for that to be true.

And again I get back to I'm, not going to put odds on it it's not a lay up let's stick with the basketball.

It's not a half for chat, it's three quarter shot the way I see it.

So.

How efficient.

The advocates are to navigate that.

Keith Creel: I think that's the only way you get to a place where the STB can make a full and thorough decision is if all the facts have been shared and heard and understood. Then they'll ultimately decide, does it or does it not meet the public interest test? Does it or does it not enhance competition? If so, what conditions are required for that to be true? Again, I get back to I'm not going to put odds on it. It's not a layup. I'm going to stick with basketball. You know, it's not a half-quarter shot. It's a three-quarter shot the way I see it. We'll see how efficient the applicants are to navigate that.

So from the churn from the operating side I would say three things. One is just getting that operating system behind us I mean, not just in itself helps us we've made those steps I talked about it.

Mark Redd: From the operating side, Ken, I would say, you know, 3 things. 1 is just getting that operating system behind us. I mean, that just in itself helps us. We've made those steps. I talked about it in my noted remarks. Bargaining with some of the unions that we have down on the KCS property, we continue to do that as we leverage some of the agreements, some of the stuff that we can do with customers to streamline some of the crew districts, which we have done. We will continue to do that. Those are opportunities. I think probably 1 of the biggest ones is just next week.

<unk> remarks.

Bargaining with some of the unions that we have down on the ACS property, we continue to do that as we leverage some of the the agreement some of the stuff that we can do with customers to streamline some of the crew districts, where we have done we will continue to do that those are opportunities I think probably one of the biggest ones is just next week.

Asian.

And if so what conditions are required for that to be true.

And again I get back to I'm, not going to put odds on it it's not a lay up let's stick with the basketball.

It's not <unk> three quarter shot the way I see it.

So we'll see.

Efficient.

As we walk into year three of GM meetings in Calgary that I'll lead with the Gms, we look for opportunities specifically on Acs of how we can look at Capex that we put in the ground and how we can leverage those citing is leverage those locomotives.

Mark Redd: I mean, as we walk into year three of GM meetings in Calgary that I lead with the GMs, we look for opportunities specifically on KCS of how we can look at CapEx that we put in the ground, how we can leverage those sidings, leverage those locomotives, the crew districts that we have that we can redefine, the deadheading, the recrews, all of that type of stuff that we could just do a better job of, at because we know more of than we did from day one. Some of the car fleets that we can interchange and spin faster, from John's group selling a service that we could do something differently.

The advocates are to navigate that.

So from the churn from the operating side I would say three things. One is just getting that operating system behind us I mean, just in itself helps us we've made those steps I talked about it amount noted remarks.

Nadeem Velani: Ken, from the operating side, I would say three things. One is just getting that operating system behind us. That just in itself helps us. We've made those steps. I talked about it in my noted remarks. Bargaining with some of the unions that we have down on the KCS property, we continue to do that as we leverage some of the agreements, some of the stuff that we could do with customers to streamline some of the crew districts, which we have done, and we'll continue to do that. Those are opportunities. I think probably one of the biggest ones is just next week.

The crew districts that we have that we can redefine the dead heading the re crews all of that type of stuff that we could just do a better job.

Because we know more of than we did from day one.

Some of the car fleets that we can interchange and spin faster from John's group selling the service that we could do something differently. I mean, all of that conversations I don't have next week that are probably exposed tens of millions of dollars that we can pull out just from the operating expense side that we will look at and certainly put that right back.

Nadeem Velani: As we walk into year three of GM meetings in Calgary that I lead with the GMs, we look for opportunities specifically on KCS of how we can look at CapEx that we put in the ground, how we can leverage those sidings, leverage those locomotives, the crew districts that we have that we can redefine, the deadheading, the re-crews, all of that type of stuff that we could just do a better job of at because we know more than we did from day one. Some of the car fleets that we can interchange and spin faster, from John's group selling the service that we could do something differently.

I mean, as we walk into year three of GM meetings in Calgary that I'll lead with the Gms, we look for opportunities specifically on Acs of how we can look at Capex that we put in the ground, how we can leverage those starting to leverage those locomotives.

Mark Redd: I mean, all that conversations I'll have next week that'll probably expose, you know, tens of millions of dollars that we can pull out just from the operating expense side that we'll look at. Certainly put that right back in our annual budget because it's budgeting time for us.

Our annual budget, because its budgeting time for us.

And Ken just on your third question, we have boat.

Nadeem Velani: Ken, just on your third question, we had about I think $165 million of synergies on the expense side that we've achieved year to date, that I'd bucket that in operational benefits, operational improvements that some of the things that Mark just talked about. I'd say that from a sourcing point of view, so utilizing, we're kind of merging contracts with both companies and being able to look at our procurement practices and being able to benefit on our contract spend is a big part of it.

The crew districts that we have that we can redefine the dead, adding the re crews all of that type of stuff that we could just do a better job at but because we have no more of than we did from day one.

$165 million of synergies on the expense side that.

We've achieved year to date.

I'd bucket that an operational benefits operational improvement that some of the things that Mark just talked about.

The car fleets that we can interchange and spin faster from John's group selling new service that we could do something differently. I mean, all of that conversations I don't have next week data probably exposed tens of millions of dollars that we can pull out just from the operating expense side that we will look at and certainly put that right back.

Say that from a.

From a sourcing point of view, so utilizing where kind of emerging contracts with both companies and being able to.

Nadeem Velani: All that's conversations I'll have next week that'll probably expose tens of millions of dollars that we can pull out just from the operating expense side that we'll look at and certainly put that right back in our annual budget because it's budgeting time for us.

To look at our procurement practices and be able to benefit on our.

Contract spend is a big part of it and then I would say that the operating efficiency.

Annual budget, because its budgeting time for us.

John Brooks: Ken, just on your third question, we had about $165 million of synergies on the expense side that we've achieved year to date. I'd bucket that in operational benefits, operational improvements, that some of the things that Mark just talked about. I'd say that from a sourcing point of view, utilizing kind of merging contracts with both companies and being able to look at our procurement practices and be able to benefit on our contract spend is a big part of it. I'd say that the operating efficiencies, and now that we're past the day in on the IT cutover, we've been able to reduce headcount on the G&A side by about almost 300 people total with the combined entity. Those are the three buckets I'd highlight as leading to the majority of the expense benefits on the synergies.

Nadeem Velani: I'd say that the operating efficiencies and now that we're past the day in on the IT cut over, we've been able to reduce headcount on the G&A side, by about almost 300 people total with the combined entity. Those are the three buckets I'd highlight as leading to the majority of the expense benefits on the synergies. I'd highlight that that's significantly higher than what we had initially thought we'd achieve as part of the combination.

And Ken just on your third question, we have boat.

Efficiencies and now that we're past the day and on the it cutover, we've been able to reduce head count on the G&A side.

$165 million of synergies on the expense side that.

We've achieved year to date.

By about almost 300 people total.

I'd bucket that an operational benefits operational improvement that some of the things that Mark just talked about.

With the combined entity. So those are the three buckets I'd highlight is leading to the majority of the the expense benefits on the synergies.

Say that from a from a sourcing point of view, so utilizing where kind of emerging contracts with both companies and being able to.

Highlight that thats significantly higher than what we had.

Initially thought we would achieve as part of the combination.

To look at our procurement practices and be able to benefit on our contract spend is a big part of it and then I'd say that the operating efficiencies and now that we're past the day and on the it cutover, we've been able to reduce head count on the G&A side.

We will take our next question from Tom <unk> with UBS. Please go ahead. Your line is open.

Operator: We'll take our next question from Thomas Wadewitz with UBS. Please go ahead. Your line is open.

Yes. Good afternoon, so Keith I wanted to ask you in a bit more on the kind.

Ken Hoexter: Yeah, good afternoon. Keith, I wanted to ask you and then, you know, a bit more on the.

Tom Wadewitz: Yeah, good afternoon. Keith, I wanted to ask you and then, you know, a bit more on the.

Kind of views on the deal and how your commentary.

About almost 300 people total.

Thomas Wadewitz: Kind of views on the deal and how your commentary, how you look at it differently than what we've heard from Jim Vena. You know, his characterization is, hey, it's less than, it's maybe 10 specific production plants that are dual served. Your commentary is like, hey, it's a number of large terminal areas or city areas that have a lot of overlap. I guess the other thing I want to ask about is, you know, there's a bit of a paradox in the sense of you're saying there's really not risk for CP that's CPKC, that's north-south flows. At the same time, you know, kind of market power of such a large railroad, UPNS, would really be something of concern. I don't know if that market power or the risk is like, you know, bundling.

Tom Wadewitz: Kind of views on the deal and how your commentary, how you look at it differently than what we've heard from Jim Vena. You know, his characterization is, hey, it's less than, it's maybe 10 specific production plants that are dual served. Your commentary is like, hey, it's a number of large terminal areas or city areas that have a lot of overlap. I guess the other thing I want to ask about is, you know, there's a bit of a paradox in the sense of you're saying there's really not risk for CP that's CPKC, that's north-south flows. At the same time, you know, kind of market power of such a large railroad, UPNS, would really be something of concern. I don't know if that market power or the risk is like, you know, bundling.

If you look at it differently than what we've heard from Jim Vena.

With the combined entity. So those are the three buckets I'd highlight is leading to the majority of the expense benefits on the synergies and.

His characterization is hey, it's less than 10 specific production plants that are dual served your commentary is like hey, it's a number of large terminal areas or city areas that have a lot of overlap.

John Brooks: I'd highlight that that's significantly higher than what we had initially thought we'd achieve as part of the combination.

Highlight that thats significantly higher than what we had.

Initially thought we'd achieve as part of the combination.

And I guess, the other thing I want to ask about is.

We will take our next question from Tom Waterworks with UBS. Please go ahead. Your line is open.

Operator: We'll take our next question from Tom Wadewitz with UBS. Please go ahead. Your line is open.

There's a bit of a paradox in the sense of Youre, saying Theres really not risks for CP to CP Casey Thats north to south flows, but at the same time.

Nadeem Velani: Good afternoon. Keith, I wanted to ask you a bit more on the kind of views on the deal and how your commentary, how you look at it differently than what we've heard from Jim Venna. His characterization is, hey, it's less than, it's maybe 10 specific production plants that are dual-served. Your commentary is like, hey, it's a number of large terminal areas or city areas that have a lot of overlap. I guess the other thing I want to ask about is, there's a bit of a paradox in the sense of you're saying there's really not risk for CPKC that's north-south flows. At the same time, the market power of such a large railroad, UPNS, would really be something of concern.

Yes. Good afternoon, so Keith I wanted to ask you in a bit more on the kind of views on the deal and how your commentary.

Kind of market power of such a large railroad upenn would really be something of concern. So I don't know if that market power or the risk because like.

If you look at it differently than what we've heard from Jim Vena.

Bundling like they take some plants you serve and they serve a lot more plants of a chemical customer and they somehow rassam business away from you or just how we ought to think about the risks and why from a rail perspective, it's a concern to have such a big big competitor I just wanted to see if you could offer more on how you framed it in term.

His characterization I would say, it's less than it's maybe 10 specific production plants that are dual served your commentary is like hey, it's a number of large terminal areas or city areas that have a lot of overlap.

Thomas Wadewitz: Like they take some plants you serve, and they serve a lot more plants of a chemical customer, and they somehow wrest some business away from you. Just how we ought to think about the risk, and why from a rail perspective it's a concern to have such a big competitor. Just wanted to ask, you know, see if you could offer more on how you framed it in terms of, you know, overlap and risk.

Tom Wadewitz: Like they take some plants you serve, and they serve a lot more plants of a chemical customer, and they somehow wrest some business away from you. Just how we ought to think about the risk, and why from a rail perspective it's a concern to have such a big competitor. Just wanted to ask, you know, see if you could offer more on how you framed it in terms of, you know, overlap and risk.

And I guess, the other thing I want to ask about is.

Overlap and risk.

There's a bit of a paradox in the sense of Youre, saying theres really not risks for CP.

Yes, I think the sheer size and scale market power certainly ought to be aware of.

PKC Thats north to south flows, but at the same time.

Keith Creel: Yeah. I think sheer size and scale market power is something you have to be aware of. you know, historically, if you can protect gateways, but if you've got enough reach and scale, it's not the gateway traffic that gets impacted, it's the captive traffic. Will or won't the applicants utilize and leverage that market power to take prices up on captive if they're not rewarded with traffic over the gateway? that's their question to answer, not mine. Those would be the things that I would look at. the other thing I think about is to minimize it to only a few people that are impacted, enhancing competition, number one, there's no precedence on what that definition standard is yet.

Historically, you can protect gateways, but if you've got enough reach and scale its not the gateway traffic that gets impacted it's the captive traffic. So we'll have all the applicants utilize and leverage their market power to take prices up on captive if theyre not rewarded with traffic over the gateway that's there.

Kind of market power of such a large railroad upenn would really be something of concern. So I don't know if that market power of the risks because like.

Nadeem Velani: I don't know if that market power or the risk is like bundling, like they take some plants you serve, and they serve a lot more plants of a chemical customer, and they somehow rest in business away from you, or just how we ought to think about the risk and why, from a rail perspective, it's a concern to have such a big competitor. Just wanted to ask if you could offer more on how you framed it in terms of overlap and risk.

Bundling like they take some plants you serve and they serve a lot more plants of a chemical customer and they somehow restaurant business away from you or just how we ought to think about the risk and why from a rail perspective. It is a concern to have such a big big competitor just wanted to.

That's their question to answer not mine those would be the things that I would look at and then the other thing I think about is to minimize it to only a few people that are impacted enhancing competition number one it's not there's no precedent. So what that definition standard is yet, but I would <unk>.

See if you could offer more on how you framed it in terms of overlap and risk.

Keith Creel: Yeah, I think sheer size and scale market power is something you have to be aware of. You know, historically, you can protect gateways, but if you've got enough reach and scale, it's not the gateway traffic that gets impacted. It's the captive traffic. Will or won't the applicants utilize and leverage that market power to take prices up on captive if they're not rewarded with traffic over the gateways? That's their question to answer, not mine. Those would be the things that I would look at. The other thing I think about is to minimize it to only a few people that are impacted. Enhancing competition, number one, there's no precedence on what that definition standard is yet. I would argue that just considering a two-to-one as the definition of reducing competition, and that's the only concerns that need to be addressed, is a very minimalistic, ill-fated definition.

Yes, I think sheer size and scale market power certainly ought to be aware of.

Historically, you can protect gateways, but if you've got enough reach and scale its not the gateway traffic that gets impacted it's the captive traffic. So we'll have all the applicants utilize and leverage that market power to take prices up on captive if theyre not rewarded with traffic over the gateway that's there.

Argued that just considering a two to one.

Keith Creel: I would argue that just considering a two-to-one as the definition of reducing competition, and that's the only concern that need to be addressed, is a very minimalistic, ill-fated definition. I just don't think that's gonna meet the STB standard. That's quite frankly the way it's been presented. You've got overlap in key markets. You've got customers gonna have fewer options. I don't say you're enhancing competition if you reduce options. Again, all that's got to be worked out in the application. The other thing I want to be true, and I want to make sure conditions exist, is that the applicants are held to their commitments and held to kind of teeth so they don't behave in anti-competitive behavior.

Yes.

The definition of reducing competition and thats, the only concerns that need to be addressed as a very minimalistic.

Ill fated definition I, just don't think that's going to meet the STB standard.

And that's quite frankly, it's been presented <unk> got overlap in key markets <unk> got customers going to have fewer.

That's their question to answer not mine those would be the things that I would look at and then the other thing I think about is to minimize it to only a few people that are impacted enhancing competition number one it's not there's no precedence on what that definition standard is yet, but I would <unk>.

Options.

I don't say, you're enhancing competition, if you reduce options. So again all of that's got to be worked out in the application. The other thing I want to be true.

I want to make sure if conditions exist is that the applicants are held to their commitments and held to.

Argued that just considering a two to one.

Yes.

Kind of teeth, so they don't behave in anti competitive behavior I don't take it lightly.

The definition of reducing competition and that's the only concern that need to be addressed as a very minimalistic.

Keith Creel: I don't take it lightly with our experience since our merger, with what happened in the battle that we had to fight just over an existing condition that was given to the KCS that we inherited, by way of the UPSP merger, the South End rights. A lot of people have forgotten about that. I have not. UP decided once we came together by sake of name change alone, what historically had been acceptable South End rights traffic that CP would interchange to KCS, to go to the Houston marketplace, was cut off by the UP. They said, You know what? You're not CP interchanging to KCS anymore. My name alone, your shippers are not entitled to that market anymore. That's anti-competitive. You cut off a market. They knew it was wrong. We knew it was wrong. We took them to the STB.

With our experience since our merger.

Ill fated definition I, just don't think that's going to meet the STB standard.

Keith Creel: I just don't think that's going to meet the STB standard. That's quite frankly the way it's been presented. You've got overlap in key markets. You've got customers going to have fewer options. I don't say you're enhancing competition if you reduce options. All that's got to be worked out in the application. The other thing I want to be true and I want to make sure conditions exist is that the applicants are held to their commitments and held to kind of, teeth so they don't behave in anti-competitive behavior. I don't take it lightly with our experience since our merger with what happened in the battle that we had to fight just over an existing condition that was given to the KCS that we inherited, by way of the UP-STB merger, the South End rights. A lot of people have forgotten about that. I have not.

What happens is the battle that we had to fight just over an existing condition that was given to the casey's that we inherited.

And that's quite frankly, it's been presented <unk> got overlap in key markets <unk> got customers are going to have fewer.

By way of the PSP merger, the South and writes a lot of people forgotten about that I have not decided once we came together by sake of name change alone what historically had been acceptable south and writes traffic that CP with interchange to Casey's.

Options.

I don't say, you're enhancing competition, if you reduce options. So again all of that's got to be worked out in the application. The other thing I want to be true.

Want to make sure conditions exist is that the applicants are held to their commitments and held to.

To go to the Houston marketplace.

Was cut off by the E&P. They said you know what youre not CP interchange indicates yes anymore my name alone.

Kind of teeth, so they don't behave in anti competitive behavior I don't take it lightly.

Are your shippers are not entitled to that market anymore, <unk> competitive you cut off of market <unk>.

With our experience since our merger.

What happens is the battle that we had to fight just over an existing condition that was given to the casey's that we inherited.

<unk> was wrong, we knew was wrong, we took into the STB. The facts were heard it took two years to get to a decision just because you can I don't think its right for any railroad or any business just because they can to try to impose their wheel that has an adverse impact in the marketplace. So when you want to talk about what we're concerned about that's the key.

By way of the PSP merger, the South and writes a lot of people forgotten about that I have not Upa decided once we came together by sake of name change alone what historically had been acceptable sales in Reits traffic that CP with interchange the Casey's to.

Keith Creel: The facts were heard. It took two years to get to a decision just because you can. I don't think it's right for any railroad or any business just because they can to try to impose their will that has an adverse impact in the marketplace. When you want to talk about what we're concerned about, that's the kind of behavior we're concerned about. I hope that I'm surprised, and I hope that Mr. Vena and team submit the conditions and the assurances in their application that makes us all rest easily. I don't know.

Keith Creel: UP decided once we came together by sake of name change alone, what historically had been acceptable South End rights traffic that CP would interchange to KCS, to go to the Houston marketplace, was cut off by the UP. They said, "You know what? You're not CP interchanging to KCS anymore. By name alone, your shippers are not entitled to that market anymore. That's anti-competitive." You cut off a market. They knew it was wrong. We knew it was wrong. We took them to the STB. The facts were heard. It took two years to get to a decision. Just because you can. I don't think it's right for any railroad or any business just because they can to try to impose their will that has an adverse impact on the marketplace. When you want to talk about what we're concerned about, that's the kind of behavior we're concerned about.

Behavior, we're concerned about and I hope.

To go to the Houston marketplace.

I hope that I'm surprised and I hope that Mr Van and team.

Cut off by the E&P. They said you know what youre not CP interchange indicate Ics anymore My name alone.

Our net debt.

The conditions in the assurances.

Their application that makes us all rest easily.

Are your shippers are not entitled to that market anymore, that's anti competitive he cut off of market.

No all I know is what's happened in the past and what's happened in the past is not a very warm.

Keith Creel: All I know is what's happened in the past, and what's happened in the past is not a very warm thought about what might happen in the future without the right conditions and the right teeth to, I guess, make sure that those conditions are enforced in a decision, if a decision comes that's favorable, so we can protect and enhance competition for this nation's freight shippers.

It was wrong, we knew was wrong and we took into the STB. The facts were heard it took two years to get to a decision just because you can I don't think it's right for any railroad or any business just because they can to try to impose their wheel that has an adverse impact in the marketplace. So when you want to talk about what we're concerned about that's the <unk>.

Thought about what might happen in the future without the right conditions and the right team.

I guess make sure that those conditions are enforced and a decision if the decision comes its favorable so we can protect.

And enhance competition for this nation's freight shippers.

Behavior, we're concerned about and I hope I.

We will take our next question from Brandon <unk> with Barclays. Please go ahead. Your line is open.

Keith Creel: I hope that I'm surprised, and I hope that Mr. Venna and team submit the conditions and the assurances in their application that make us all rest easily. I don't know. All I know is what's happened in the past, and what's happened in the past is not a very warm thought about what might happen in the future without the right conditions and the right teeth to, I guess, make sure that those conditions are enforced in a decision if a decision comes that's favorable so we can protect and enhance competition for this nation's freight shippers.

I hope that I'm surprised and I hope that Mr Van and team.

Thomas Wadewitz: We'll take our next question from Brandon Oglenski with Barclays. Please go ahead. Your line is open.

Operator: We'll take our next question from Brandon Oglenski with Barclays. Please go ahead. Your line is open.

Mid.

Hey, good evening, everyone. Thanks for taking the question John as you look into next year, especially with all the ups and downs of trade, but can you talk to maybe some of the business wins that you have that support the longer term growth profile of this business.

The conditions in the assurances.

Brandon Oglenski: Hey, good evening, everyone. Thanks for taking the question. John, as you look into next year, especially with all the ups and downs of trade, but can you talk to maybe some of the business wins that you have that support the longer term growth profile of this business? Maybe if you could give us some early insight to maybe where you see volumes next year too, if you're willing to go there.

Their application that makes us all rest easily.

Don't know all I know is what's happened in the past and what's happened in the past is not a very warm.

Thought about what might happen in the future without the right conditions and the right team.

And maybe if you could give us some early insight, maybe where you see volumes next year or two if youre willing to go there.

I guess make sure that those conditions are enforced and a decision if the decision comes its favorable so we can protect.

No Brandon.

Ready to go there, yet, but I'm sure that will be a topic in January I know it will.

John Brooks: Brandon, I don't know if I'm quite ready to go there yet, but I'm sure that'll be a topic in January. I know it will. Look, I fully expect we will outperform. We'll do what we do. We outperform our peers, we outperform the macro. I fully expect that in 2026. I don't see the recipe right now changing a whole lot. You know, if some of this grain, whether it be soybeans or the Canadian crop rolls, you know, out of Q4 and into next year, that's gonna be an area of strength for us. There's a sizable crop on both sides of the border. If we don't get it now, we're gonna get it next year. I see that as an opportunity.

And enhance competition for this nation's freight shippers.

Look.

Fully expect.

We will take our next question from Brandon <unk> with Barclays. Please go ahead. Your line is open.

Operator: We'll take our next question from Brandon Oglenski with Barclays. Please go ahead. Your line is open.

We will outperform what we will do what we do we outperform our peers, we outperformed the macro.

Brian Ossenbeck: Hey, good evening, everyone. Thanks for taking the question. John, as you look into next year, especially with all the ups and downs of trade, can you talk to maybe some of the business wins that you have that support the longer-term growth profile of this business? Maybe if you could give us some early insight to maybe where you see volumes next year too, if you're willing to go there.

Hey, good evening, everyone and thanks for taking the question John as you look into next year, especially with all the ups and downs of trade, but can you talk to maybe some of the business wins that you have that support the longer term growth profile of this business.

I fully expect that in 2026, I don't see the recipe right now changing a whole lot.

If some of this screen whether it be soybeans are the Canadian crop roles.

And maybe if you could give us some early insight, maybe where you see volumes next year or two if youre willing to go there.

Out of Q4 and into next year, that's going to be an area of strength for US there is a sizable crop on both sides of the border if we don't get it now.

No Brandon.

John Brooks: Brandon, I don't know if I'm quite ready to go there yet, but I'm sure that'll be a topic in January. I know it will. Look, I fully expect we will outperform. We'll do what we do. We outperform our peers. We outperform the macro. I fully expect that in 2026. I don't see the recipe right now changing a whole lot. You know, if some of this grain, whether it be soybeans or the Canadian crop, rolls out of Q4 and into next year, that's going to be an area of strength for us. There's a sizable crop on both sides of the border. If we don't get it now, we're going to get it next year. I see that as an opportunity. We exceeded my $300 million target this year for where I saw new synergies.

Ready to go there, yet, but I'm sure there'll be a topic in January I know it will.

We're going to get it next year, so I see that as an opportunity.

Look.

We exceeded $300 million target this year for where I saw new synergies.

Fully expect.

John Brooks: You know, we exceeded my $300 million target this year for where I saw new synergies. You know, I fully expect our self-help initiatives and synergies, whether it be, you know, continuing to grow our MMX, our intermodal route, our 180, 181, you know, the reefer business that I spoke to, continued growth down at Lázaro, with Jim and I. I fully expect the synergy area to produce another $300 million of opportunity for this franchise. We'll continue that price discipline that Keith spoke to. You know, and maybe 2 areas that are a little unique to next year that I see is we've got a really strong industrial development pipeline shaping up.

We will outperform what we will do what we do we outperform our peers, we outperformed the macro.

I fully expect that in 2026, I don't see the recipe right now changing a whole lot.

I fully expect our self help initiatives and synergies whether it would be.

Continuing to grow our our MMX, our intermodal route or 180 181.

If some of this screen whether it be soybeans are the Canadian crop roles.

<unk> business that I spoke to continued growth down at Lazar row with Gemini I fully expect the synergy area to produce another $300 million of of opportunity for this franchise will continue that price discipline that that that Keith spoke to.

Out of Q4 and into next year, that's going to be an area of strength for US there is a sizable crop on both sides of the border if we don't get it now.

We're going to get it next year, so I see that as an opportunity.

We exceeded $300 million target this year for where I saw new synergies.

In.

Maybe two areas that are a little unique to next year that I see as we've got a really strong industrial development pipeline shaping up.

John Brooks: I fully expect our self-help initiatives and synergies, whether it be continuing to grow our MMX, our intermodal route, our 180, 181, the reefer business that I spoke to, continued growth down at Lazaro with Gemini. I fully expect the synergy area to produce another $300 million of opportunity for this franchise. We'll continue that price discipline that Keith spoke to. Maybe two areas that are a little unique to next year that I see is we've got a really strong industrial development pipeline shaping up. These are new facilities that are being built on our railroad that'll be up and running here in Q4 and early in 2026. Frankly, that's a $200 million-plus opportunity of, again, just new business that's going to start up on the railroad.

I fully expect our self help initiatives and synergies whether it would be.

These are either French new facilities that are being built on our railroad that'll be up and running here in Q4 and early in 2026 and frankly that is.

<unk> to grow our our MMX, our intermodal route or 180 181.

John Brooks: These are French new facilities that are being built on our railroad that'll be up and running here in Q4 and early in 2026. Frankly, that's a $200 million plus opportunity of, again, just new business that's gonna start up on the railroad. Then you combine that finally with, you know, stuff we already talked to relative to some of these partnerships and opportunities with our connecting roads. That's sort of what the recipe looks like, Brandon.

$200 million plus opportunity of again, just new business that you're going to start up on on the railroad and then you combine that finally with.

Stuff, we already talked to relative to some of these partnerships and opportunities with our connecting roads.

In.

Maybe two areas that are a little unique to next year that I see as we've got a really strong industrial development pipeline shaping up.

And that's sort of what the recipe looks like Brandon.

We will take our next question from Ravi Shanker with Morgan Stanley.

Operator: We'll take our next question from Ravi Shanker with Morgan Stanley. Please go ahead. Your line is open.

These are either France, new facilities that are being built on our railroad that'll be up and running here in Q4 and early in 2026 and frankly that's.

Please go ahead your line is open.

Good day and good evening, everyone. So just on pricing I know you commented on the kind of pricing.

Ravi Shanker: Good, thanks. Good evening, everyone. Just on pricing, I know you kind of commented on the kind of pricing being above the long-term target of 3 to 4%. I think it has been for a few quarters now. I'm wondering if there's any opportunity to maybe take up that long-term target, or do you think that you guys are just overperforming now for whatever reasons, and maybe that kind of comes back down to that 3 to 4% over time?

Pricing being above the long term target of 3% to 4% I think it hasnt been for a few quarters now I'm wondering if.

$200 million plus opportunity of again, just new business that you're going to start up on on the railroad and then you combine that finally with.

There is any opportunity to maybe take up that long term target or do you think that you guys are just over performing now for whatever reasons and maybe that kind of comes back down to that 3% to 4% over time.

John Brooks: You combine that finally with stuff we already talked to relative to some of these partnerships and opportunities with our connecting roads, and that's sort of what the recipe looks like, Brandon.

Stuff, we already talked to relative to some of these partnerships and opportunities with our connecting roads.

And thats sort of what the recipe looks like Brandon.

I don't.

Ravi I don't see it really.

John Brooks: You know, I don't, Ravi, I don't see it really. You know, inflation has certainly come down and those pressures, I think we've felt them kind of through the year. We knew they were gonna play out that way. Again, it's all around pricing the value of service and capacity. Frankly, that's a discipline that as Naveed said, I'm super pleased with the team's efforts down there. I'll tell you, we're definitely out performing our peer railroads on that front, and we're gonna push hard. Those targets for my sales team are gonna continue to be in that neighborhood as I look to 2026.

We will take our next question from Ravi Shanker with Morgan Stanley. Please go ahead. Your line is open.

Operator: We'll take our next question from Ravi Shanker with Morgan Stanley. Please go ahead. Your line is open.

Inflation has certainly come down in those pressures.

I think we've we've felt them kind of through the year, we knew they were going to play out that way.

[Analyst]: Good. Thanks. Good evening, everyone. Just on pricing, I know you kind of commented on the kind of pricing being above the long-term target of 3% to 4%. I think it has been for a few quarters now. I'm wondering if there's any opportunity to maybe take up that long-term target, or do you think that you guys are just overperforming now for whatever reasons and maybe that kind of comes back down to that 3% to 4% over time? You know.

Good day and good evening, everyone. So just wondering pricing I know you commented on the kind of.

Pricing being above the long term target of 3% to 4% I think it hasnt been for a few quarters now I'm wondering if.

Again, it's all around pricing to the value of the service and capacity and free.

Frankly, that's a discipline.

That.

<unk> said I'm Super pleased with the team's efforts down there I'll tell you we're definitely out.

Performing our peer railroads.

On that front, and we're going to push hard those targets.

I do.

John Brooks: Ravi, I don't see it really. You know, inflation has certainly come down in those pressures. I think we've felt them kind of through the year. We knew they were going to play out that way. Again, it's all around pricing, the value of the service, and capacity. Frankly, that's a discipline that I'm, as Nadeem said, I'm super pleased with the team's efforts down there. I'll tell you, we're definitely outperforming our peer railroads on that front, and we're going to push hard. Those targets for my sales team are going to continue to be in that neighborhood as I look to 2026. I fully expect those pressures to be out there, but we're going to fight for every quarter point, you know, based on the service and the capacity this railroad provides.

Ravi I don't see it really.

For my sales team are going to continue to be in that neighborhood as I look to 2026, so yes, those I fully expect those pressures.

Inflation has certainly come down in those pressures.

I think we've we've felt them kind of through the year, we knew they were going to play out that way.

John Brooks: Yeah, I fully expect those pressures to be out there, we're going to fight for every quarter point, you know, based on the service and the capacity this railroad provides.

To be out there, but we're going to fight for every quarter point.

Again, it's all around pricing to the value of the service and capacity.

Based on the service and the capacity. This railroad provides Ravi if we had a stronger macro as I commented earlier I think that would be supportive of some incremental pricing, but I don't think that thats something thats.

<unk>.

Frankly, that's a discipline.

Nadeem Velani: Yeah, Ravi, if we had a stronger macro, as I commented earlier, I think that'd be supportive of some incremental pricing. I don't think that that's something that we've been able to benefit from the past, say, 10 months or past year.

That.

<unk> said I'm Super pleased with the team's efforts on there I'll tell you we're definitely out.

We've been able to.

Performing our peer railroads.

Benefits from the past 10 months or past year.

On that front, and we're going to push hard those targets.

We'll take our next question from Ari Rosa with Citigroup. Please go ahead. Your line is open.

For my sales team are going to continue to be in that neighborhood as I look to 2026, so yes, those I fully expect those pressures.

Operator: We'll take our next question from Ariel Rosa with Citigroup. Please go ahead. Your line is open.

Yes, hi, good afternoon, Keith you mentioned that maybe some shippers or various stakeholders might be reluctant to speak up for various reasons I'm just curious behind the scenes what kind of conversations you are having and where do the fears lie in terms of what the risk.

Ariel Rosa: Yeah. Hi, good afternoon. Keith, you mentioned that maybe some shippers or various stakeholders might be reluctant to speak up for various reasons. I'm just curious, behind the scenes, what kind of conversations you're having, and where do the fears lie in terms of what the risks are that are posed from kind of the UP NS proposal? Not to be overly cynical, but is there any dimension in which you worry that by virtue of being a Canadian rail, your voice might not be listened to as carefully or kind of, you won't get the same weight that a US rail might have as the kind of merger process moves forward?

To be out there, but we're going to fight for every quarter point.

John Brooks: Ravi, if we had a stronger macro, as I commented earlier, I think that'd be supportive of some incremental pricing, but I don't think that that's something that we've been able to benefit from the past, say, 10 months or past year.

Sorry that opposed from kind of the <unk> proposal.

And then not to be overly cynical, but is there any dimension in which you worry that by virtue.

We've been able to.

Benefits from the past 10 months or past year.

Canadian rail.

Well take our next question from Ari Rosa with Citigroup. Please go ahead. Your line is open.

Operator: We'll take our next question from Ari Rosa with Citigroup. Please go ahead. Your line is open.

Voice might not be.

Listened to us carefully or kind of.

You won't get the same weight that U S well might have as we kind of merger process moves forward.

[Analyst]: Yeah. Hi, good afternoon. Keith, you mentioned that maybe some shippers or various stakeholders might be reluctant to speak up for various reasons. I'm just curious, behind the scenes, what kind of conversations you're having and where do the fears lie in terms of what the risks are that are posed from the UPNS proposal? Not to be overly cynical, but is there any dimension in which you worry that by virtue of being a Canadian rail, your voice might not be listened to as carefully or you won't get the same weight that a U.S. rail might have as the merger process moves forward?

Well I.

I guess the way I'd answer the second question first is where North American rail company, where that uniquely the only rail that connects all free nations.

Keith Creel: I guess the way I'd answer the second question first is we're a North American rail company. We're uniquely the only rail that connects all three nations. 40% of our revenue, 40% of our business is in the United States. The monies we invest are significant. A third of our employees live and work and are taxpaying members of the United States, taxpayer citizens. We are undeniably wrapped in the American flag, and we care as much about America as we equally care about Canada, as we equally care about Mexico. We have that responsibility. I can't decide if someone's gonna dismiss our impact. I think it's material. I think it's meaningful. I think we've invested heavily into this nation, as we'll continue to do that, and we're gonna have a voice.

40% of our revenue, 40% of our business is in United States. The monies, we invest or significant a third of our employees live and work in our tax paying members of the United States taxpayer citizens.

Sorry that opposed from kind of the <unk> proposal.

And then <unk>.

Not to be overly cynical, but is there any dimension in which you worry that by virtue.

Being a Canadian rail.

We are undeniably.

Your voice might not be.

Wrapped in the American flag and we care as much about America is weak and we care about candidates weekly care about Mexico, we have that responsibility. So I cant decide if someone's going to dismiss our.

Listened to us carefully or kind of.

You won't get the same way that a U S well might have as we kind of merger process moves forward.

Well I.

Keith Creel: I guess the way I'd answer the second question first is we're a North American rail company. We're uniquely the only rail that connects all three nations. 40% of our revenue, 40% of our business is in the United States. The monies we invest are significant. A third of our employees live and work, and are taxpaying members of the United States, taxpayer citizens. We are undeniably wrapped in the American flag, and we care as much about America as we equally care about Canada, as we equally care about Mexico. We have that responsibility. I can't decide if someone's going to dismiss our impact. I think it's material. I think it's meaningful. I think we've invested heavily into this nation as we'll continue to do that. We're going to have a voice. It's up to those that listen to decide if they want to diminish it.

<unk> I think it's material I think it's meaningful.

I guess the way I'd answer the second question versus where North American rail company, where that uniquely the only rail that connects all free nations.

We've invested heavily into this nation as we'll continue to do that and we're going to have a voice it's up to those that listened to decide if they want to diminish. It I think it is relevant and I think its truth based and I think its tax that truly can't be denied.

Keith Creel: It's up to those that listen to decide if they want to diminish it. I think it's relevant, and I think it's truth-based, and I think it's facts that truly can't be denied. The part about the customers, I can't reveal the specific discussions. Undeniably, there's a common theme and concern about retaliation. People are reluctant to speak up publicly. Yes, you hear associations. You know, I heard Mr. Vena say they don't have a direct commercial relationship with UP. I would agree. They're speaking on behalf of their customers who do. To be so dismissive, I think is a bit irresponsible. Again, that's my view, not obviously Jim's. In time, we'll see. There'll be private discussions. There'll be public discussions. You're gonna hear the associations speak out.

40% of our revenue 40% of our business is in United States. The monies, we investor significant a third of our employees live and work in our tax paying members of the United States taxpayer citizens.

About the customers I can't reveal that specific discussions but are the anomaly. There is a common theme and concerned about retaliation people reluctant to speak up.

We are undeniably.

Wrapped in the American flag and we care as much about America is weak and we care about candidates weekly care about Mexico, we have that responsibility so I can't.

<unk>, Yes, you hear associations.

Mr Van to say, they don't have a direct commercial relationship.

Decide if someone's going to dismiss our impact I think it's material I think it's meaningful.

I would disagree, but theyre speaking on behalf of their customers, who do so it's davita. So dismissive I think is a bit.

We've invested heavily into this nation as we will continue to do that and we're going to have a voice it's up to those that listened to decide if they want to diminish it but I think it is relevant and I think its truth based and I think its tax that truly can't be denied.

A bit irresponsible, but again Thats my view not obviously gms.

But in time, we'll see there'll be private discussions there'll be public discussions youre going to hear the association's speak out in the end I'm sure that some customers will take that step their application and their comps will.

Keith Creel: I think it's relevant, and I think it's truth-based, and I think it's facts that truly can't be denied. The part about the customers, I can't reveal the specific discussions, but undeniably, there's a common theme and concern about retaliation. People are reluctant to speak up, publicly. Yes, you hear associations. I heard Mr. Venna say they don't have a direct commercial relationship with UP. I would agree. They're speaking on behalf of their customers who do. To be this dismissive, I think, is a bit irresponsible. Again, that's my view, not obviously Jim's. In time, we'll see. There'll be private discussions. There'll be public discussions. You're going to hear the associations speak out. In the end, I'm sure that some customers will take that step. Their application and their comments will bear their concerns, and they'll best bear their concerns better than I can. I think a powerful thought.

About the customers I can't reveal that specific discussions, but other anomaly theres a common theme and concerned about retaliation people reluctant to speak up.

Keith Creel: In the end, I'm sure that some customers will take that step. Their application and their comments will bear their concerns, and they'll best bear their concerns better than I can. I think a powerful thought. I hear this word, there's been 400 customers that have offered letters of support. I'm not saying that doesn't matter. Their voice matters. How many more have said nothing? Silence says a lot.

Colbert their concerns and the El best fair their concerns better than I can but I think a powerful fall.

<unk>, Yes, you hear associations.

Mr Van to say I don't have that direct commercial relationship.

I hear this word there has been 400 customers that have offered letters of support.

I would agree but theyre speaking on behalf of their customers, who do so it's davita. So dismissive I think is a bit.

And I'm, not saying that doesn't matter their voice matters.

But have any more said nothing.

Balance is a lot.

A bit irresponsible, but again, that's my view not obviously gms.

And we have reached our allotted time for Q&A.

But in time, we'll see there'll be private discussions there'll be public discussions youre going to hear the association's sneak out in the end I'm sure that some customers will take that step their application and their comps will bear their concerns and they'll best further concerns better than I can but I would say.

Operator: We have reached our allotted time for Q&A. I'd now like to turn the call back over to Mr. Keith Creel.

I would like to turn the call back over to Mr. Keith Creel.

Okay, well listen thank you, let me wrap up with where I started thank you for your time. This afternoon. It's been some some thoughtful discussion I know this is an industry that quite frankly.

Keith Creel: Okay. Well, listen, thank you. Let me wrap up with where I started. Thank you for your time this afternoon. It's been some thoughtful discussion. I know this is an industry that, quite frankly, seems to be continually in a state of change. Regardless how those changes may roll out this company, you can believe is gonna be focused on safely and efficiently delivering for our customers and delivering on the growth opportunities that this unique network has created, that enables the value creation that we've committed to for our shareholders and for those that have trusted us with their capital dollars. We look forward to executing a strong Q4, and we look forward in Q1 sharing those results with you. Everyone have a blessed holiday. Till then, we'll talk soon. Thank you.

Seems to be continually in a state of change regardless, how those changes may rollout. This company. You can believe is going to be focused on safely and efficiently delivering for our customers and delivering on the growth opportunities that this unique network has created that enables the value creation that we've committed to for our shareholders and for those that are trust.

<unk> powerful fall.

Keith Creel: I hear this word. There's been 400 customers that have offered letters of support. I'm not saying that doesn't matter. Their voice matters. How many more have said nothing? Silence says a lot.

I hear this word there's been 400 customers that have offered letters of support.

And I'm, not saying that doesn't matter their voice matters, but have any more said nothing.

Balance is a lot.

And we have reached our allotted time for Q&A I would now like to turn the call back over to Mr. Keith Creel.

Operator: We have reached our allotted time for Q&A. Now I'd like to turn the call back over to Mr. Keith Creel.

Good us.

With their capital dollars, we look forward to executing a strong fourth quarter and we look forward in first quarter sharing those results with you and everyone have a blessed holiday.

Keith Creel: Okay. Thank you. Let me wrap up with where I started. Thank you for your time this afternoon. It's been some thoughtful discussion. I know this is an industry that, quite frankly, seems to be continually in a state of change. Regardless of how those changes may roll out, this company, you can believe, is going to be focused on safely and efficiently delivering for our customers and delivering on the growth opportunities that this unique network has created, that enables the value creation that we've committed to for our shareholders and for those that have trusted us with their capital dollars. We look forward to executing a strong fourth quarter, and we look forward in the first quarter to sharing those results with you. Everyone, have a blessed holiday. Till then, we'll talk soon. Thank you.

Okay, well listen thank you, let me wrap up with where I started thank you for your time. This afternoon. It's been some some thoughtful discussion I know this is an industry that quite frankly.

We'll talk soon thank you.

This concludes today's conference call you may now disconnect.

Operator: This concludes today's conference call. You may now disconnect.

It seems to be continually in a state of change regardless, how those changes may rollout. This company. You can believe is going to be focused on safely and efficiently delivering for our customers and delivering on the growth opportunities that this unique network has created that enables the value creation that we've committed to for our shareholders and for those that are <unk>.

Just at Us.

Their capital dollars, we look forward to executing a strong fourth quarter and we look forward in the first quarter sharing those results with you and everyone have a blessed holiday until then we'll talk soon thank you.

This concludes today's conference call you may now disconnect.

Operator: This concludes today's conference call. You may now disconnect.

[music].

Sure.

[music].

Q3 2025 Canadian Pacific Kansas City Ltd Earnings Call

Request a DemoDemo

CP.

CPKC

Earnings