Q2 2026 Union Pacific Corp Earnings Call

July 23, 2026

Speaker #2: Greetings, and welcome to the UNION PACIFIC Q2, 2026, earnings call. At this time, all participants are in listen-only mode. A brief question-and-answer session will follow the formal presentation.

Operator 2: Greetings. Welcome to the Union Pacific Q2 2026 earnings call. At this time, all participants are in listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. As a reminder, this conference is being recorded, and the slides for today's presentation are available on Union Pacific's website. It is now my pleasure to introduce your host, Mr. Jim Vena, Chief Executive Officer for Union Pacific. Thank you, Mr. Vena. You may begin.

Operator: Greetings. Welcome to the Union Pacific Q2 2026 earnings call. At this time, all participants are in listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. As a reminder, this conference is being recorded, and the slides for today's presentation are available on Union Pacific's website. It is now my pleasure to introduce your host, Mr. Jim Vena, Chief Executive Officer for Union Pacific. Thank you, Mr. Vena. You may begin.

Speaker #2: If anyone should require operator assistance during the conference, please press *0 from your telephone keypad. As a reminder, this conference is being recorded, and the slides for today's presentation are available on UNION PACIFIC's website.

Speaker #2: It is now my pleasure to introduce your host, Mr. Jim Vena, Chief Executive Officer for Union Pacific. Thank you, Mr. Vena. You may begin.

Speaker #3: Thank you, Rob. Really appreciate it. Listen, pretty special day here today, great day to be putting our results out for the second quarter. And it's my wife's birthday, so it's a double win and she would have complained big time if this quarter wasn't good.

Jim Vena: Thank you, Rob. Really appreciate it. Listen, pretty special day here today. Great day to be putting our results out for Q2, and it's my wife's birthday, so it's a double win. She would've complained big time if this quarter wasn't good. Let me just highlight how it is moving forward. She might have been mean to me today. Why don't we get started? Here with me today in Omaha is our Chief Financial Officer, Jennifer Hamann, our Executive Vice President of Marketing and Sales, Kenny Rocker, and our Executive Vice President of Operations, Eric Gehringer. Good day to railroad out there. Weather's good. A little storm coming in, nothing we can't handle. Right, Eric?

Speaker #3: So let me just highlight how it is. Moving forward, she might have been mean to me today, so why don't we get started? Here with me today in Omaha is our Chief Financial Officer, Jennifer Hamann, our Executive Vice President of Marketing and Sales, Kenyatta Rocker, and our Executive Vice President of Operations, Eric Gehringer.

Speaker #3: Good day to railroad out there. Weather's good, a little storm coming in, but nothing we can't handle, right, Eric?

Speaker #4: Yes.

Eric Gehringer: Yes.

Speaker #3: Perfect. Now, let's review the highlights on slide 4. This morning, we reported record financial results driven by strong execution and 2% volume growth. Net income totaled $2 billion, and earnings per share after we adjust for merger costs grew to $3.41.

Jim Vena: Perfect. Let's review the highlights on slide four. This morning, we reported record financial results driven by strong execution and 2% volume growth. Net income totaled $2 billion, and earnings per share after we adjust for merger costs grew to $3.41. There was a lot of in and outs as we compare our performance against last year. Fuel was a big driver of both surcharge revenue and expense this year, and we had some one-timers we called out last year. What's real important is when we remove all of that, we see solid core improvement in our results with growth in revenue and operating income, and we were about 10 basis points better on our operating ratio. The team will walk you through the quarter in more detail, and then I will come back and wrap it up before we go to Q&A.

Speaker #3: There was a lot of in and outs as we compare our performance against last year. Fuel was a big driver of both surcharge revenue and expense this year, and we had some one-timers we called out last year.

Speaker #3: But what's really important is, when we remove all of that, we see solid core improvement in our results with growth in revenue and operating income, and we were about 10 basis points better on our operating ratio.

Jim Vena: What's real important is when we remove all of that, we see solid core improvement in our results with growth in revenue and operating income, and we were about 10 basis points better on our operating ratio. The team will walk you through the quarter in more detail, and then I will come back and wrap it up before we go to Q&A. I am very excited this morning on the Q&A, looking for some great smart questions from our smart analysts and owners. We will start with Jennifer and the Q2 financials. Jennifer?

Speaker #3: Now, the team will walk you through the quarter in more detail, and then I'll come back and wrap it up before we go to Q&A.

Speaker #3: I'm very excited this morning on the Q&A, looking for some great smart questions from our smart analysts. And owners. We'll start with Jennifer, and a second quarter financials.

Jim Vena: I am very excited this morning on the Q&A, looking for some great smart questions from our smart analysts and owners. We will start with Jennifer and the Q2 financials. Jennifer?

Speaker #3: Jennifer?

Speaker #5: All right. Thanks, Jim, and good morning, everyone. Let's begin with our second quarter income statement on slide 6. Our operating revenue of $6.9 billion increased 12% versus last year, and freight revenue also grew 12% to $6.5 billion.

Jennifer Hamann: All right. Thanks, Jim. Good morning, everyone. Let's begin with our Q2 income statement on slide six, where operating revenue of $6.9 billion increased 12% versus last year. Freight revenue also grew 12% to $6.5 billion. Breaking down the drivers of freight revenue, volume growth added 225 basis points. Fuel surcharge revenue added 750 basis points and increased roughly $460 million, reflecting the impact of higher year-over-year fuel prices and volume. Solid core pricing combined with business mix to drive 175 basis points of freight revenue improvement. Importantly, our quarterly pricing dollars continue to exceed inflation dollars as we compete and win business at levels that reflect the value of our rail service.

Speaker #5: Breaking down the drivers of freight revenue, volume growth added $225 basis points. Fuel surcharge revenue added $750 basis points, and increased roughly $460 million reflecting the impact of higher year-over-year fuel prices and volume.

Speaker #5: Solid core pricing, combined with business mix, drove a 175 basis point improvement in freight revenue. Importantly, our quarterly pricing dollars continue to exceed inflation dollars as we compete and win business at levels that reflect the value of our rail service.

Speaker #5: I also want to call out that second quarter business mix was a slight headwind in the quarter, as growth in domestic intermodal outpaced expectations and offset the mix benefit of less international intermodal traffic.

Jennifer Hamann: I also want to call out that Q2 business mix was a slight headwind in the quarter as growth in domestic intermodal outpaced expectations and offset the mix benefit of less international intermodal traffic. Wrapping up the top line, other revenue increased 11% to $346 million as higher volume drove increases in both subsidiary and accessorial revenue. Turning to expense, our appendix slides provide more detail as total operating expenses increased 13% to $4.1 billion, primarily from higher diesel fuel prices. Compensation and benefits expense improved 1% against last year's reported results, which included the final brake person buyout agreement of $55 million. Excluding that agreement, Q2 cost per employee increased 7%, driven by higher wage and benefit costs. A key driver to offsetting wage inflation is workforce productivity, and we have delivered eight consecutive quarters of record results.

Speaker #5: Wrapping up the top line, other revenue increased 11% to $346 million, as higher volume drove increases in both subsidiary and assessorial revenue. Turning to expense, our appendix slides provide more detail as total operating expenses increased 13% to $4.1 billion.

Speaker #5: Primarily from higher diesel fuel prices. Compensation and benefits expense improved 1% against last year's reported results, which included the final break person buyout agreement of $55 million.

Speaker #5: Excluding that agreement, second quarter cost per employee increased 7%, driven by higher wage and benefit costs. A key driver to offsetting wage inflation is workforce productivity.

Speaker #5: And we have delivered eight consecutive quarters of record results. Although we're confident we'll continue that productivity trend, we now expect full-year compensation per employee to increase around 6%.

Jennifer Hamann: Although we're confident we'll continue that productivity trend, we now expect full-year compensation per employee to increase around 6%. Fuel expense grew 63% on a 60% increase in average fuel price and 2% higher gross ton miles. Year over year, our price per gallon grew from $2.42 to $3.86 and added 120 basis points to our operating ratio. Purchase services and material expense increased 10% due to merger-related costs as well as higher intermodal and subsidiary expenses. Despite increased volume, fewer operating equipment leases and record Q2 cycle times drove a 7% reduction in equipment and other rents, and other expense grew 13% on higher casualty costs. Income tax expense increased 29%, reflecting last year's one-time $115 million deferred state tax benefit and higher pre-tax income this year, partially offset by some good news in 2026 from state taxes.

Speaker #5: Fuel expense grew 63% on a 60% increase in average fuel price and 2% higher gross ton miles. Year-over-year, our price per gallon grew from $2.42 to $3.86, and added $120 basis points to our operating ratio.

Speaker #5: Purchased services and material expense increased 10% due to merger-related costs as well as higher intermodal and subsidiary expenses. Despite increased volume, fewer operating equipment leases, and record second quarter cycle times drove a 7% reduction in equipment and other rents.

Speaker #5: And other expense grew 13% on higher casualty costs. Income tax expense increased 29%, reflecting last year's one-time $115 million deferred state tax benefit and higher pre-tax income this year, partially offset by some good news in 2026 from state taxes.

Speaker #5: Put it all together, we had a record quarter with reported earnings per share of $3.36, adjusted for merger costs, our earnings per share totaled $3.41, and operating ratio was 59.2%.

Jennifer Hamann: Put it all together, we had a record quarter with reported earnings per share of $3.36. Adjusted for merger costs, our earnings per share totaled $3.41, and operating ratio was 59.2%. Turning to cash and returns in the balance sheet on slide seven, our strong financial results carried forward into cash from operations of $5.5 billion, up 21% versus last year. Free cash flow totaled $1.8 billion after we invested in our network and returned an industry-leading dividend to our shareholders. We also paid down $1.5 billion of long-term debt in H1 of the year, resulting in an adjusted debt to EBITDA ratio of 2.5x. Turning to our outlook on slide eight, we have delivered a very strong H1 2026 as we execute on our strategy and deliver improvement in safety, service, and operational excellence, leading to caseload growth.

Speaker #5: Turning to cash and returns in the balance sheet on slide 7, our strong financial results carried forward into cash from operations of $5.5 billion, up 21% versus last year.

Speaker #5: Free cash flow totaled $1.8 billion after we reinvested in our network and returned an industry-leading dividend to our shareholders. We also paid down $1.5 billion of long-term debt in the first half of the year, resulting in an adjusted debt-to-EBITDA ratio of 2.5 times.

Speaker #5: Turning to our outlook on slide 8, we have delivered a very strong first half 2026 as we execute on our strategy and deliver improvement in safety, service, and operational excellence, leading to carload growth.

Speaker #5: From that focused approach, we have generated reported earnings per share growth of 6% year to date, in line with our January outlook. Looking to the remainder of the year, we are raising our 2026 outlook to reported EPS growth in the high single-digit range, as we continue to efficiently move increased volume on our network.

Jennifer Hamann: From that focused approach, we have generated reported earnings per share growth of 6% year to date, in line with our January outlook. Looking to the remainder of the year, we are raising our 2026 outlook to reported EPS growth in the high single-digit range as we continue to efficiently move increased volume on our network. We also expect to continue delivering operating ratio improvement and maintain our position of industry leadership, even against ongoing margin pressure from fuel. Fuel prices remain volatile, and our recent purchases have been over $4 a gallon. Overall, a strong H1 of 2026, coupled with an improved outlook, highlight our ability to grow volumes, deliver for customers, and manage costs, a strategy that delivers value for all of our stakeholders. With that, I'll turn it over to Kenny.

Speaker #5: We also expect to continue delivering operating ratio improvement and maintain our position of industry leadership, even against ongoing margin pressure from fuel. Fuel prices remain volatile, and our recent purchases have been over $4 a gallon.

Speaker #5: Overall, a strong first half of 2026, coupled with an improved outlook, highlight our ability to grow volumes, deliver for customers, and manage costs, a strategy that delivers value for all of our stakeholders.

Speaker #5: With that, I'll turn it over to Kenny.

Speaker #3: Thank you, Jennifer, and good morning. We had a very strong second quarter as freight revenue grew 12% to $6.5 billion and, if you exclude fuel surcharge, grew 4% to $5.5 billion.

Kenny Rocker: Thank you, Jennifer, and good morning. We had a very strong Q2 as freight revenue grew 12% to $6.5 billion, and if you exclude fuel surcharge, grew 4% to $5.5 billion. Both were best ever records. Let's walk through the key drivers on slide 10. Starting with our bulk segment, revenue was up 7% compared to last year on a 1% decline in volume. Grain and grain products had double-digit volume growth in Q2, driven by strong export demand, facility expansions, and growth in renewable fuels and associated feedstocks. That resulted in record Q2 volume and revenue. Meanwhile, coal volume was challenged by weaker natural gas prices, mild weather across our served locations, and customer downtime. These factors adversely impacted overall demand. Shifting to Industrial, revenue was up 8% on a 3% increase in volume.

Speaker #3: Both were best ever records. Let's walk through the key drivers on slide 10. Starting with our bulk segment, revenue was up 7% compared to last year, on a 1% decline in volume.

Speaker #3: Grain and grain products had double-digit volume growth in the second quarter, driven by strong export demand, facility expansions, and growth in renewable fuels and associated feedstocks.

Speaker #3: That resulted in record second quarter volume and revenue. Meanwhile, coal volume was challenged by weaker natural gas prices, mild weather across our serve locations, and customer downtime.

Speaker #3: These factors adversely impacted overall demand. Shifting to Industrial, revenue was up 8% on a 3% increase in volume. When you exclude fuel surcharge, strong core pricing gains delivered record freight revenue and average revenue per car.

Kenny Rocker: When you exclude fuel surcharge, strong core pricing gains delivered record freight revenue and average revenue per car. Petrochemicals growth was driven by improved demand and new business. In metals and minerals, volumes rose on higher domestic steel production and business development wins, more than offsetting the ongoing weakness in the export soda ash market. Premium revenue for the quarter increased 21% on a 4% increase in volume and a 16% increase in average revenue per car, reflecting higher fuel surcharge, core pricing, and improved business mix. Domestic Intermodal delivered its fourth consecutive record quarter in both volume and revenue. It's evident our outstanding service set the foundation to grow the business, and that's exactly what we're doing. In Q2, private asset, rail asset, and parcel volumes were all up double digits, benefiting from constrained truck capacity and share gains.

Speaker #3: Petrochemicals growth was driven by improved demand and new business. In metals and minerals, volumes rose to higher on higher domestic steel production and business development wins, more than offsetting the ongoing weakness in the export so dash market.

Speaker #3: Premium revenue for the quarter increased 21% on a 4% increase in volume, and a 16% increase in average revenue per car, reflecting higher fuel surcharge, core pricing, and improved business mix.

Speaker #3: Domestic intermodal delivered its fourth consecutive record quarter in both volume and revenue. It's evident our outstanding service set the foundation to grow the business.

Speaker #3: And that's exactly what we're doing. In the second quarter, private asset, rail asset, and parcel volumes were all up double digits, benefiting from constrained truck capacity and share gains.

Kenny Rocker: In Q2, private asset, rail asset, and parcel volumes were all up double digits, benefiting from constrained truck capacity and share gains. Our buffer resources allowed us to respond quickly to increase customer demand. International Intermodal volume was down 14% versus last year. However, we saw improvement as we closed out the quarter, driven by stronger West Coast import volumes. In Automotive, results were positive despite market softness due to strong business development results. Looking ahead on slide 11, Grain and Grain Products is positioned for further H2 growth, driven by strong export demand, ongoing business development, and new facility openings. I'm excited about AGP's new export facility that opens next week in Grays Harbor, Washington. We also see continued upside from growing renewable fuels and feedstock markets, supported by greater policy certainty.

Speaker #3: Our buffer resources allowed us to respond quickly to increased customer demand. International intermodal volume was down 14% versus last year. However, we saw improvement as we closed out the quarter, driven by stronger West Coast import volumes.

Kenny Rocker: Our buffer resources allowed us to respond quickly to increase customer demand. International Intermodal volume was down 14% versus last year. However, we saw improvement as we closed out the quarter, driven by stronger West Coast import volumes. In Automotive, results were positive despite market softness due to strong business development results. Looking ahead on slide 11, Grain and Grain Products is positioned for further H2 growth, driven by strong export demand, ongoing business development, and new facility openings. I'm excited about AGP's new export facility that opens next week in Grays Harbor, Washington. We also see continued upside from growing renewable fuels and feedstock markets, supported by greater policy certainty. In Coal, elevated inventories and lower natural gas prices will make for a challenging H2.

Speaker #3: In automotive, results were positive despite market softness due to strong business development results. Looking ahead on slide 11, grain and grain products is positioned for further second half growth, driven by strong export demand, ongoing business development, and new facility openings.

Speaker #3: I'm excited about AGP's new export facility that opens next week in Graves Harbor, Washington. We also see continued upside from growing renewable fuels and feedstock markets supported by greater policy certainty.

Speaker #3: In coal, elevated inventories and lower natural gas prices will make for a challenging second half. We will continue to watch this market closely but Eric and his team have proven they can quickly flex to handle shifts in volume.

Kenny Rocker: In Coal, elevated inventories and lower natural gas prices will make for a challenging H2. We will continue to watch this market closely. Eric and his team have proven they can quickly flex to handle shifts in volume. Business wins are also helping to offset some of the market-driven declines. Moving to Industrial. We still see a soft housing market. We remain firmly focused on winning new business and outperforming industrial production. We expect continued strength in metals, growth from industrial development efforts, and increased petrochemicals from customer wins like the startup of CP Chem that I mentioned last quarter. Wrapping up with Premium, we expect Domestic Intermodal to continue to perform very well, supported by over-the-road conversions and our service product. International Intermodal will fully lap last year's tariff volatility in August.

Kenny Rocker: We will continue to watch this market closely. Eric and his team have proven they can quickly flex to handle shifts in volume. Business wins are also helping to offset some of the market-driven declines. Moving to Industrial. We still see a soft housing market. We remain firmly focused on winning new business and outperforming industrial production. We expect continued strength in metals, growth from industrial development efforts, and increased petrochemicals from customer wins like the startup of CP Chem that I mentioned last quarter. Wrapping up with Premium, we expect Domestic Intermodal to continue to perform very well, supported by over-the-road conversions and our service product. International Intermodal will fully lap last year's tariff volatility in August. We expect volume to be positive in H2. For Automotive, we expect new business to offset market weakness.

Speaker #3: Business wins are also helping to offset some of the market-driven declines. Moving to industrial, we still see a soft housing market, but we remain firmly focused on winning new business and outperforming industrial production.

Speaker #3: We expect continued strength in metals, growth from industrial development efforts, and increased petrochemicals from customer wins like the startup of CP Chem that I mentioned last quarter.

Speaker #3: And wrapping up with premium, we expect domestic intermodal to continue to perform very well. Supported by over-the-road conversions and our service product. International intermodal will fully lap last year's tariff volatility in August, and we expect volume to be positive in the second half.

Kenny Rocker: We expect volume to be positive in H2. For Automotive, we expect new business to offset market weakness. While we're proud of the record Q2, the team is focused on capturing the opportunities ahead. Our approach does not change. Price of the service we provide, invest for growth, and keep winning new business. With that, I'll turn it over to Eric.

Speaker #3: And for automotive, we expect new business to offset market weakness. So, while we're proud of the record second quarter, the team is focused on capturing the opportunities ahead.

Kenny Rocker: While we're proud of the record Q2, the team is focused on capturing the opportunities ahead. Our approach does not change. Price of the service we provide, invest for growth, and keep winning new business. With that, I'll turn it over to Eric.

Speaker #3: Our approach does not change. Price of the service we provide, invest for growth, and keep winning new business. And with that, I'll turn it over to Eric.

Speaker #5: Thank you, Kenny, and good morning. We delivered record second quarter operating performance, ran a fluid network, and improved safety all while handling 2% more volume.

Eric Gehringer: Thank you, Kenny, and good morning. We delivered record Q2 operating performance, ran a fluid network, and improved safety, all while handling 2% more volume. It all starts with safety, and both employee and derailment rates improved versus their respective three-year rolling averages, highlighting the team's dedication to critical safety rule compliance and human factor prevention initiatives. Moving to slide 13. We provided exceptional service as freight car velocity increased 5% to 231 miles per day and set a Q2 record. Train speed increased 3%, and terminal dwell improved 7% as we tied our Q1 record of 19.7 hours, our third straight quarter below 20 hours. Both the Intermodal and Manifest Service Performance Indices finished at 95%, demonstrating our ability to execute on the fundamentals and effectively utilize our buffer of resources. This enabled the team to support double-digit domestic intermodal growth at very high service levels.

Speaker #5: It all starts with safety, and both employee and derailment rates improve versus their respective three-year rolling averages, highlighting the team's dedication to critical safety rule compliance and human factor prevention initiatives.

Speaker #5: Moving to slide 13, we provided exceptional service, as freight car velocity increased 5% to 231 miles per day and set a second-quarter record.

Speaker #5: Train speed increased 3%, and terminal dwell improved 7% as we tied our first quarter record of 19.7 hours—our third straight quarter below 20 hours.

Speaker #5: Both the intermodal and manifest service performance indices finished at 95%, demonstrating our ability to execute on the fundamentals and effectively utilize our buffer of resources.

Speaker #5: This enabled the team to support double-digit domestic intermodal growth at very high service levels. And remember, this bar only gets harder for us as it resets based on monthly best, which we achieved in 2025.

Eric Gehringer: This enabled the team to support double-digit domestic intermodal growth at very high service levels. Remember, this bar only gets harder for us as it resets based on monthly bests, which we achieved in 2025. Opportunities remain to improve, and we are committed to providing consistent, reliable service while growing with our customers. Moving to slide 14. Our key efficiency metrics reflect our commitment to operational excellence as we delivered record workforce productivity, record train length, and record fuel consumption.

Eric Gehringer: Remember, this bar only gets harder for us as it resets based on monthly bests, which we achieved in 2025. Opportunities remain to improve, and we are committed to providing consistent, reliable service while growing with our customers. Moving to slide 14. Our key efficiency metrics reflect our commitment to operational excellence as we delivered record workforce productivity, record train length, and record fuel consumption.

Speaker #5: Opportunities remain, to improve, and we are committed to providing consistent reliable service while growing with our customers. Moving to slide 14, our key efficiency metrics reflect our commitment to operational excellence as we delivered record workforce productivity, record train length, and record fuel consumption.

Speaker #5: The team is relentlessly focused on identifying opportunities to further enhance service, productivity, and efficiency across the network by first executing on the fundamentals then implementing new technologies and finally investing prudently back into the railroad.

Ken Hoexter: The team is relentlessly focused on identifying opportunities to further enhance service, productivity, and efficiency across the network by first executing on the fundamentals, then implementing new technologies, and finally, investing prudently back into the railroad. Locomotive productivity of 142 improved 1% as the average active fleet decreased 1% against 2% higher gross ton miles. We successfully onboarded incremental volume by leveraging existing train starts, demonstrating strong asset utilization and efficiency. Our fuel consumption rate improved 1% as we continue to benefit from fuel conservation initiatives and locomotive technology and modernization investments. Workforce productivity increased 5% on 2% higher volume. Our active train engine and yard workforce decreased 2%, demonstrating our discipline in remaining more than volume variable. Finally, train length grew 2% versus last year, driven by continued optimization of the transportation plan and reduced train starts.

Eric Gehringer: The team is relentlessly focused on identifying opportunities to further enhance service, productivity, and efficiency across the network by first executing on the fundamentals, then implementing new technologies, and finally, investing prudently back into the railroad. Locomotive productivity of 142 improved 1% as the average active fleet decreased 1% against 2% higher gross ton miles. We successfully onboarded incremental volume by leveraging existing train starts, demonstrating strong asset utilization and efficiency. Our fuel consumption rate improved 1% as we continue to benefit from fuel conservation initiatives and locomotive technology and modernization investments. Workforce productivity increased 5% on 2% higher volume. Our active train engine and yard workforce decreased 2%, demonstrating our discipline in remaining more than volume variable.

Speaker #5: Locomotive productivity of 142 improved 1% as the average active fleet decreased 1% against 2% higher gross ton miles. We successfully onboarded incremental volume by leveraging existing train starts, demonstrating strong asset utilization and efficiency.

Speaker #5: Our fuel consumption rate improved 1% as we continue to benefit from fuel conservation initiatives and locomotive technology and modernization investments. Workforce productivity increased 5% on 2% higher volume.

Speaker #5: Our active train engine and yard workforce decreased 2%, demonstrating our discipline and remaining more than volume variable. Finally, train length grew 2% versus last year driven by continued optimization of the transportation plan and reduced train starts.

Eric Gehringer: Finally, train length grew 2% versus last year, driven by continued optimization of the transportation plan and reduced train starts. Closing the quarter, we delivered on the fundamentals while growing volumes and effectively serving our customers. We have the capacity to grow while continuing to improve safety and service. As Kenny's outlook has improved, we've been agile and re-examined our base resources and buffer, aligning both to support growth. We are also continuing to make strategic capacity investments, including the Houston Complex, Pacific Northwest Siding extensions, and Sunset Double Track projects. The operating team is demonstrating daily that we are ready to grow with our customers while delivering the service we sold them. With that, I'll turn it back over to Jim.

Speaker #5: Closing the quarter, we delivered on the fundamentals while growing volumes and effectively serving our customers. We have the capacity to grow while continuing to improve safety and service.

Ken Hoexter: Closing the quarter, we delivered on the fundamentals while growing volumes and effectively serving our customers. We have the capacity to grow while continuing to improve safety and service. As Kenny's outlook has improved, we've been agile and re-examined our base resources and buffer, aligning both to support growth. We are also continuing to make strategic capacity investments, including the Houston Complex, Pacific Northwest Siding extensions, and Sunset Double Track projects. The operating team is demonstrating daily that we are ready to grow with our customers while delivering the service we sold them. With that, I'll turn it back over to Jim.

Speaker #5: As Kenny's outlook has improved, we've been agile and reexamined our base resources and buffer. Aligning both to support growth. We are also continuing to make strategic capacity investments including the Houston Complex, Pacific Northwest Siding Extensions, and Sunset Double Track Projects.

Speaker #5: The operating team is demonstrating daily that we are ready to grow with our customers, while delivering the service we sold them. With that, I'll turn it back over to Jim.

Speaker #3: Thank you, Eric, Kenny, Jennifer. Why don't we turn to slide 16? Before we get to your questions, I'd like to quickly summarize what you've heard and provide an update on our merger with Norfolk Southern.

Jim Vena: Thank you, Eric, Kenny, Jennifer. Why don't we turn to slide 16? Before we get to your questions, I'd like to quickly summarize what you've heard and provide an update on our merger with Norfolk Southern. As the team walked through, we had a very strong Q2 as volumes, pricing, and operational efficiency drove record financial results. The network continues to be very fluid, and our buffer of resources is supporting broad-based growth. Looking ahead, we are prepared to meet increased customer demand with best-in-class safety, service, and operational excellence. For our 2026 outlook, we are raising to full-year reported EPS growth in the high single-digit range. As to the status of our merger with Norfolk Southern, first, we met a very important milestone when the Surface Transportation Board accepted our application as complete on 28 May.

Speaker #3: As the team walked through, we had a very strong second quarter as volumes, pricing, and operational efficiency drove record financial results. The network continues to be very fluid and our buffer of resources is supporting broad-based growth.

Speaker #3: Looking ahead, we are prepared to meet increased customer demand with best-in-class safety, service, and operational excellence. For our 2026 outlook, we are raising to full-year reported EPS growth in the high single-digit range.

Speaker #3: As to the status of our merger with Norfolk Southern, first, we met a very important milestone when the surface transportation board accepted our application as complete on May 28th.

Speaker #3: And on Monday, we will meet another important milestone when we complete the supplemental information ask from the board. As you see when you read it, we've carefully answered each of the board's questions.

Jim Vena: On Monday, we will meet another important milestone when we complete the supplemental information asked from the board. As you'll see when you read it, we've carefully answered each of the board's questions. We've also taken the opportunity to further improve the competitive nature of our merger through an expansion of Committed Gateway Pricing, among several other voluntary commitments. This is in addition to the merger benefits of seamless single-line service, better reliability, lower costs, and greater competition against trucks and other railroads. Also yesterday, we announced that we reached a merger settlement agreement with the railroad I used to work for, Canadian National. I said from day one that our merger will create a stronger railroad industry that delivers better service for customers. Our agreement with CN, Canadian National, reinforces those commitments. Our merger is unprecedented and deserves a careful review. We've done our homework.

Speaker #3: We also we've also taken the opportunity to further improve the competitive nature of our merger through an expansion of committed gateway pricing, among several other voluntary commitments.

Speaker #3: This is in addition to the merger benefits of seamless, single-line service, better reliability, lower costs, and greater competition against trucks and other railroads. Also, yesterday, we announced that we reached a merger settlement agreement with the railroad I used to work for, Canadian National.

Speaker #3: I said from day one that our merger will create a stronger railroad industry that delivers better service per customers. Our agreement with the CN, Canadian National, reinforces those commitments.

Jim Vena: Our agreement with CN, Canadian National, reinforces those commitments. Our merger is unprecedented and deserves a careful review. We've done our homework. Now, versus almost one year ago when we first announced our plans to merge, we have even more conviction that our transaction is in the public interest and will deliver benefits for our stakeholders, especially our customers. The case for our transcontinental railroad is clear, and we're ready to go. With that, Rob, we're ready to take questions.

Speaker #3: Our merger is unprecedented and deserves a careful review. We've done our homework. Now versus almost one year ago when we first announced our plans to merge, we have even more conviction that our transaction is in the public interest and will deliver benefits for our stakeholders, especially our customers.

Jim Vena: Now, versus almost one year ago when we first announced our plans to merge, we have even more conviction that our transaction is in the public interest and will deliver benefits for our stakeholders, especially our customers. The case for our transcontinental railroad is clear, and we're ready to go. With that, Rob, we're ready to take questions.

Speaker #3: The case for our transcontinental railroad is clear and we're ready to go. With that, Rob, we're ready to take questions.

Speaker #4: Thank you. We'll now begin the question and answer session. If you'd like to ask a question, please press star one on your telephone keypad.

Operator 2: Thank you. We'll now begin the question and answer session. If you'd like to ask a question, please press *1 on your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press *2 if you'd like to withdraw your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Due to the number of analysts joining us on the call today, we'll be limiting everyone to one question to accommodate as many participants as possible. Thank you. The first question is from the line of Ken Hoexter with Bank of America.

Operator: Thank you. We'll now begin the question and answer session. If you'd like to ask a question, please press *1 on your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press *2 if you'd like to withdraw your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Due to the number of analysts joining us on the call today, we'll be limiting everyone to one question to accommodate as many participants as possible. Thank you. The first question is from the line of Ken Hoexter with Bank of America.

Speaker #4: And a confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to withdraw your question from the queue.

Speaker #4: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Do the number of analysts joining us on the call today will be limiting everyone to one question to accommodate as many participants as possible.

Speaker #4: Thank you. And the first question is from the line of Ken Hekster with Bank of America. Please proceed.

Jim Vena: Morning, Ken.

Speaker #6: Good morning, Ken.

Speaker #7: Hey, good morning, Jim. You know, I guess a two-parter. One, a little confusion on the 14-cent fuel gain is that just all upside from fuel and the pricing?

Ken Hoexter: Hey, good morning, Jim. I guess a two-parter. One, a little confusion on the $0.14 fuel gain. Is that just all upside from fuel and the pricing? Maybe if, Jen, you could just delve into that a little bit. Then if you can expand on the commercial agreement with CN, the access to the EJ and E, maybe talk about what that gives you and what you're giving up on the network down south.

Speaker #7: Maybe if Jen, you could just delve into that a little bit, and then, if you can, expand on the commercial agreement with CN—the access to the EJ&E. Maybe talk about what that gives you and what you're giving up on the network down south.

Speaker #6: Jennifer, why don't you?

Jim Vena: Jennifer, why don't you-

Speaker #1: Yeah, Ken, on the fuel piece, you know, we're just calling out the fact that it did have the 120 basis point headwind to our operating ratio.

Jennifer Hamann: Yeah, Ken, on the fuel piece, we're just calling out the fact that it did have the 120 basis point headwind to our operating ratio mathematically. When you look at the difference between expense and surcharge, the benefit there was the $0.14.

Speaker #1: Mathematically, but then when you look at the difference between expense and surcharge, the benefit there was the $0.14.

Speaker #6: Okay. And on the Canadian National announcement yesterday, it was in two parts. The one part was something that we knew that we wanted to make sure and we said it right from the start.

Jim Vena: Okay, on the Canadian National announcement yesterday, it was in two parts. The one part was something that we knew that we wanted to make sure, and we said it right from the start, and what we looked at with the merger, that we needed to do something. We told the Surface Transportation Board twice that we never wanted to take control and get over 50%. In fact, we called meetings at the TRRA, and the other railroads didn't show up. At the end of the day, the nice part about the deal is that clears that up as far as ownership of the Kansas City Terminal and TRRA.

Speaker #6: And when we looked at what the merger that we needed to do something and we told the surface transportation board twice that we never wanted to take control and get over 50%.

Speaker #6: In fact, we called meetings at the TRRA and the other railroads didn't show up. But at the end of the day, the nice part about the deal is that clears that up as far as ownership, the Kansas City terminal, and TRRA.

Speaker #6: It also allows the Canadian National to come over between St. Louis, just east of St. Louis, to Kansas City, and give optionality to the customers of known area because we would have ended up with the two rail lines that we use in directional and we would have had another one.

Jim Vena: It also allows Canadian National to come over between St. Louis, just east of St. Louis to Kansas City, and give optionality to the customers in the old area because we would have ended up with the 2 rail lines that we use in directional, and we would have had another one. We thought it was prudent for us not to be too concentrated. Again, that was the only part of the company where we have a significant overlap, and that was a pretty small area when you take a look at the entire railroad. With Canadian National, we've got an MOU that takes care of that. We also talked about, it goes with our commitment to keep every gateway open.

Speaker #6: So we thought it was prudent for us not to be too concentrated. Ken, that was the only part of the company where we have a significant overlap, and that was a pretty small area when you take a look at the entire railroad.

Speaker #6: So with Canadian National, we have an MOU that takes care of that. And then we also talked about, and it goes with our commitment, to keep every gateway open.

Speaker #6: And Canadian National says, "Listen, can we figure out a way to get into Mexico to be able to move traffic and use we could still use Chicago if we wanted to, but we want to be clear that we could use a priority location that they find better to be able to have access into Mexico." And we worked out a deal.

Jim Vena: Canadian National says, "Listen, can we figure out a way to get into Mexico to be able to move traffic and we could still use Chicago if we wanted to, but we want to be clear that we could use a priority location that they find better to be able to have access into Mexico," we worked out a deal. For that, we said, "Listen, we want better access through Chicago, East, West." Sometimes people look at things in the short term instead of long term, and they don't understand. Listen, I've worked in Chicago and I worked at Canadian National, where it took us longer to get a train from the north side of Chicago to the south side of Chicago, where our terminal was, than it did to run it from Prince Rupert to the northern part of Chicago.

Speaker #6: And for that, we said, "Listen, we want better access through Chicago, east-west." And sometimes people look at things in the short term instead of the long term, and they don't understand.

Speaker #6: Listen, I've worked in Chicago, and I worked at Canadian National, where it took us longer to get a train from the north side of Chicago to the south side of Chicago where our terminal was, than it did to run it from Prince Rupert to the northern part of Chicago.

Speaker #6: So anytime a railroad can figure out a way to be able to run much more seamless east-west to make interchange connections or run-through trains, that's what we've done.

Jim Vena: Any time a railroad can figure out a way to be able to run much more seamless East, West to make interchange connections or run through trains, that's what we've done. It's a win-win. It's a win for Union Pacific, and it's also a great position for Canadian National. I think it's a deal that is going to help both of us be able to increase traffic from both of us because of what we're able to take off the roads and move more of it on the rail. Ken, maybe you didn't want that much detail, but I just gave it to you, okay?

Speaker #6: It's a win-win. It's a win for Union Pacific and it's also a great position for Canadian National. I think it's a deal that is going to help both of us be able to increase traffic from both of us because of what we're able to take off the roads and move more of it on the rail.

Speaker #6: So Ken, maybe you didn't want that much detail, but I just gave it to you, okay?

Speaker #7: No, I appreciate it. Have a great birthday dinner night. Thanks, Jim.

Ken Hoexter: No, appreciate it. Have a great birthday dinner tonight. Thanks, Jim.

Speaker #6: You bet. If I'm good, I'll take her out. Or if she's good, I'll take her out. If not, we're just ordering in McDonald's, okay?

Jim Vena: You bet. If I'm good, I'll take her out, or if she's good, I'll take her out. If not, we're just ordering in McDonald's, okay?

Speaker #4: Our next question is from the line of Chris Wetherby with Wells Fargo. Please proceed with your question.

Operator 2: Our next question is from the line of Chris Wetherbee with Wells Fargo. Please proceed with your question.

Operator: Our next question is from the line of Chris Wetherbee with Wells Fargo. Please proceed with your question.

Speaker #6: One thing.

Chris Wetherbee: Morning, Chris.

Jim Vena: Morning, Chris.

Speaker #5: Thanks. Good morning, guys. Morning. So maybe sticking on that topic, I guess I just wanted to kind of see if you could expand a little bit on how you think this plays out, both from a revenue synergy perspective?

Chris Wetherbee: Hey, thanks. Good morning, guys. Morning. Maybe sticking on that topic, I guess I just wanted to see if you could expand a little bit on how you think this plays out, both from a revenue synergy perspective. I think in the initial merger agreement, there was some concessions baked in, $several hundred million of potential concessions. Maybe thinking about this agreement that you've constructed and how it may influence some of the revenue synergies and concession numbers, and then maybe a bigger picture, is this the first of what could be multiple of these types of arrangements? I guess, how do you feel about the receptivity of the rest of the rail industry? This is a big move coming from potential opposition to agreement to get on board with the deal. Just want to get a sense of how you see the landscape right now.

Speaker #5: I think there's initially in the initial merger agreement, there was some concessions baked in, several hundred million dollars of potential concessions. So maybe thinking about this agreement that you've constructed and how it may influence some of the revenue synergies and concession numbers and then maybe bigger picture, is this the first of what could be multiple of these types of arrangements?

Speaker #5: I guess how do you feel about the receptivity of the rest of the rail industry? This is a big move coming from potential opposition to agreement to get on board with the deal.

Speaker #5: Just want to get a sense of how you see the landscape right now.

Speaker #6: Yeah, listen, Chris, I won't get into too much detail—some other discussions we've had. But I'll tell you that if people are reasonable, we are more than willing to come, and this one is a reasonable expansion for Canadian National, and it's great for Union Pacific.

Jim Vena: Listen, Chris, I won't get into too much detail, some other discussions we've had, but I'll tell you that if people are reasonable, we are more than willing to come, and this one is a reasonable expansion for Canadian National, and it's great for Union Pacific. As far as the impact, listen, we knew we were going to have to do that. We see this as, for both of us, a growth story, not a limiting factor on business. This will not impact what we're doing. Remember, we're still going to have to have them operate on our railroad to get to Mexico. What it does is it makes them much more competitive against the Canadian Pacific Kansas City. They're able to originate out of Canada and compete head on and sell a direct link, we see that as them being able to grow more business and not be less, that we should be able to get more revenue on trackage or whatever else that we do and how we finalize the deal. It's a real positive, Chris.

Speaker #6: As far as the impact listen, we knew we were going to have to do that. We see this as for both of us a growth story, not a limiting factor on business.

Speaker #6: So this will not impact what we're doing. Remember, we're still going to have to have them operate on our railroad to get to Mexico.

Speaker #6: So it's not like and what it does is it makes a much more competitive against the Canadian Pacific, Kansas City. So they're able to originate out of Canada and compete head on and sell it direct link and we see that as them being able to grow more business and not be less and then we should be able to get more revenue on trackage or whatever else that we do and how we finalize the deal.

Jim Vena: They're able to originate out of Canada and compete head on and sell a direct link, we see that as them being able to grow more business and not be less, that we should be able to get more revenue on trackage or whatever else that we do and how we finalize the deal. It's a real positive, Chris.

Speaker #6: So, it's a real positive, Chris.

Speaker #1: Yeah, and I would just say a big part of it, which is addressing the three to two, two to one as well as access into Kansas City was all part of what we knew we were probably going to have to do something to address that.

Jennifer Hamann: I would just say a big part of it, which is addressing the 3 to 2 to 1, as well as access into Kansas City, was all part of what we knew we were probably going to have to do something to address that. All part of our thinking.

Speaker #1: So, all part of our thinking.

Speaker #5: Perfect. Thanks for your time. I appreciate it.

Chris Wetherbee: Perfect. Thanks for the time. Appreciate it.

Jim Vena: Have a good one, Chris.

Speaker #6: Have a good one, Chris.

Speaker #4: The next question is in the line of Walter Schracklin with RBC. Please proceed with your question.

Operator 2: The next question is in the line of Walter Spracklin with RBC. Please proceed with your question.

Operator: The next question is in the line of Walter Spracklin with RBC. Please proceed with your question.

Speaker #7: Well, thanks very much. Good morning. Good, good. And I know, Jim, as you mentioned, you worked a lot on the EG&E when certainly when we first met and some of the loop arounds and efficiencies you get and as you translate into the Transcon solution is quite compelling.

Walter Spracklin: Yeah, thanks very much.

Jim Vena: Morning, Walter.

Walter Spracklin: Good morning.

Jim Vena: How are you?

Walter Spracklin: Good. I know, Jim, as you mentioned, you worked a lot on the EG&E, certainly when we first met, and some of the loop arounds and efficiencies you get, and as you translate into the Transcon solution is quite compelling. Curious if whether when you were talking to CN, does this open the avenue now for more cooperation with CN? Or is this something, okay, we've addressed this now with CN, let's move on to any of the other railroads? Just curious whether you're seeing this as, okay, that's one player we've addressed, and now we move on, or is there avenue for further opportunities with CN that might have come up in the conversations?

Speaker #7: I'm curious—when you were talking to CN, does this open the avenue now for more cooperation with CN, or is this something where we've addressed it and now, with CN, let's move on to any of the other railroads?

Speaker #7: Just curious whether you're seeing this as, okay, that's one player we've addressed and now we move on, or is there an avenue for further opportunities with CN, as that might have come up in the conversations?

Speaker #6: So listen, let's start with fundamentally. We would have never been able to get to this kind of deal with Canadian National if it wasn't because of going through the merger.

Jim Vena: Listen, let's start with fundamentally, we would have never been able to get to this kind of deal with Canadian National if it wasn't because of going through the merger. Okay? That's the problem with anybody thinking that it's easy to make a deal with another railroad or another company, is, Walter, pretty tough. Okay? It was the merger that drove this, and it was something that helped us and helped Canadian National. It truly is a win-win. I'm not sure what the next step is. Okay? I really don't. The problem we have is because we do not have a whole bunch of overlap, we've basically dealt with our 2 to 1 and 3 to 2 customers even. There isn't a lot else that we need to give up. What is it that you give? You give access to somebody around Nashville?

Speaker #6: Okay? So that's the problem with people. Anybody thinking that it's easy to make a deal with another railroad or another company is, Walter, pretty tough.

Speaker #6: Okay? So it was the merger that drove this. And it was something that helped us and helped Canadian National. It truly is a win-win.

Speaker #6: I'm not sure what the next step is. Okay? I really don't. Would I like to make the problem we have is because we do not have a whole bunch of overlap.

Speaker #6: We've basically dealt with our two to one and three to two customers even. There isn't a lot else that we need to give up.

Speaker #6: Like, what is it that you give? You give access to somebody around Nashville? Well, we'd like access to a different part of Florida, further south than Jacksonville.

Jim Vena: Well, we'd like access to Florida, further south in Jacksonville. At the end of the day, it's going to be difficult, but we're always open to have discussions. We really are. If something happens. I love our relationship with Canadian National, but I'll tell you, they don't give me any deference because I know they're a railroad. I'll be honest. They're tough negotiators. Son of a gun. Okay? I was hoping I didn't have to give them that much access into Mexico, but at the end of the day, they're tough negotiators. They're smart, but I like that. That's what you want, Walter, is to be able to move the deal forward together. If there's other things that we can figure out how to do, we'll do that. We really will. I don't see a whole bunch of things that are sitting on the platter.

Speaker #6: So at the end of the day, it's going to be difficult, but we're always open to have discussions. We really are. And if something happens, and I love our relationship with Canadian National, but I'll tell you, they don't give me any deference because I know they're a railroad.

Speaker #6: I'll be honest. They're tough negotiators. Son of a gun. Okay? I was hoping I didn't have to give them that much access into Mexico, but at the end of the day, they're tough negotiators.

Speaker #6: They're smart. But I like that. That's what you want. Walter, is this to be able to move the deal forward together? And if there's other things that we can figure out how to do, we'll do that.

Speaker #6: We really will. But I don't see a whole bunch of things that are sitting on the platter. And, Walter, because I think you've met my wife, you know I would never take her out for a burger, okay?

Jim Vena: We really will. I don't see a whole bunch of things that are sitting on the platter. Walter, because I think you've met my wife, you know I would never take her out for a burger, okay? Sometimes I like having a joke. Like, the chance of me having a marriage for 43 years like I have, or 44 years, and take her out for a burger for her birthday, that would not work out good, okay?

Jim Vena: Walter, because I think you've met my wife, you know I would never take her out for a burger, okay? Sometimes I like having a joke. Like, the chance of me having a marriage for 43 years like I have, or 44 years, and take her out for a burger for her birthday, that would not work out good, okay?

Speaker #6: Sometimes I like having a joke. Like the chance of me having a marriage for 43 years like I have or 44 years and take her out for a burger for her birthday, that would not work out good.

Speaker #6: Okay?

Speaker #7: Yeah. McDonald's is not on the menu. I got it. Okay. Thanks very much, Jim. Appreciate it.

Walter Spracklin: Yeah. McDonald's is not on the menu. I got it. Okay.

Jim Vena: It is not, no.

Walter Spracklin: Thanks very much, Jim. Appreciate it.

Speaker #6: We're in Omaha. It could be like a nice steak from Omaha, I'm telling you. A nice Wagyu from a farm out in Iowa or Nebraska.

Jim Vena: We're in Omaha. It should be, like, a nice steak from Omaha. I'm telling you, nice Wagyu from a farm out in Iowa or Nebraska. I'm looking forward to it tonight.

Speaker #6: I'm looking forward to it tonight.

Speaker #7: That might play out a bit better. Okay. Thanks again, Jim.

Walter Spracklin: That might play out a bit better. Okay. Thanks again, Jim.

Speaker #4: The next question is from Jonathan Chappelle with Evercore ISI. Please proceed with your question.

Operator 2: The next question is from the line of Jonathan Chappell with Evercore ISI. Please proceed with your question.

Operator: The next question is from the line of Jonathan Chappell with Evercore ISI. Please proceed with your question.

Speaker #6: Morning.

Kenny Rocker: Morning.

Jim Vena: Morning.

Speaker #5: Thank you. Good morning. Hey, Jim. Jennifer, shifting gears away from the merger for a second—you raised the EPS guide versus three months ago.

Kenny Rocker: Thank you. Good morning. Hey, Jim. Jennifer, shifting gears away from the merger for a second. You raised the EPS guide versus three months ago, while also raising the outlook for your most important cost line item with the cost per employee. Can you help us kind of solve then for where the majority of the upside's coming from? Is that volumes running better than expected? Is it surcharge tailwind benefiting you more than you thought in H2, more productivity in other line items? How do we kind of rectify those two changes?

Jonathan Chappell: Thank you. Good morning. Hey, Jim. Jennifer, shifting gears away from the merger for a second. You raised the EPS guide versus three months ago, while also raising the outlook for your most important cost line item with the cost per employee. Can you help us kind of solve then for where the majority of the upside's coming from? Is that volumes running better than expected? Is it surcharge tailwind benefiting you more than you thought in H2, more productivity in other line items? How do we kind of rectify those two changes?

Speaker #5: While also raising the outlook for your most important cost line item, with the cost per employee. So, can you help us kind of solve, then, for where the majority of the upside is coming from?

Speaker #5: Are those volumes running better than expected? Is it the surcharge tailwind benefiting you more than you thought in Q2? Or is it more productivity in other line items?

Speaker #5: How do we kind of rectify those two changes?

Speaker #1: Yeah. I mean, I think you kind of answered your own question there a little bit, Jonathan. It really is a number of different things.

Jennifer Hamann: Yeah, I think you kind of answered your own question there a little bit, Jonathan. It really is a number of different things. Certainly, when you hear Kenny talk and look at his outlook in terms of how the business is performing and what we see the opportunity for the H2, it's stronger than when we thought it was coming into the year, which is great news, we feel very bullish about that. You see how Eric and his team are handling that increased volume, doing it very efficiently, a very cost-efficient manner, and giving a great service product to support our customers as they're growing their business. It's all of those things, and we feel great about it. It's a great setup for the H1 and looking forward to a strong H2.

Speaker #1: Certainly, when you hear Kenny talk and look at his outlook in terms of how the business is performing and what we see the opportunity for the second half of the year, it's stronger than when we thought it was coming into the year, which is great news.

Speaker #1: And we feel very bullish about that. Then you see how Eric and his team are handling that increased volume, doing it very efficiently, in a very cost-efficient manner, and providing great service and support for our customers as they're growing their business.

Speaker #1: So it's all of those things. And we feel great about it. It's a great setup for the first half. And looking forward to a strong second half.

Speaker #6: Thank you.

Jonathan Chappell: Thank you.

Speaker #5: Thank you.

Operator 2: The next question's from the line of David Vernon with Bernstein. Please proceed with your question.

Operator: The next question's from the line of David Vernon with Bernstein. Please proceed with your question.

Speaker #4: The next question is in the line of David Vernon with Bernstein. Please proceed with your question.

Speaker #6: Morning, David.

Jim Vena: Morning, David.

Speaker #8: Hey, good morning, guys. Thanks for fitting me in here. So I'm going to try to squeeze two into here because you guys are quick on the next question, Mike.

David Vernon: Hey, good morning, guys. Thanks for fitting me in here. I'm going to try to squeeze two into here because you guys are quick on the next question, Mike. The first question is really around the outlook for H2. Kenny, you sound pretty positive about everything except coal, which sounds like a throwback to last decade. I wanted to ask if you're seeing any sort of broadening of industrial demand outside of anything related to data center construction, anything that you're seeing in the economic tea leaves that would tell you that we are starting to see some broader industrial recovery kind of building up. The second question would be around the Falcon service, right? How does this agreement sort of change that?

Speaker #8: The first question is really around the outlook for the second half. Kenny, you sound pretty positive about everything except coal, which sounds like a throwback to last decade.

Speaker #8: I wanted to ask if you're seeing any sort of broadening of industrial demand outside of anything related to sort of data center construction, anything that you're seeing in the economic tea leaves that would tell you that we are starting to see some broader industrial recovery kind of building up.

Speaker #8: And then the second question would be around the Falcon service, right? How does this agreement sort of change that? Or is CN going to be running some of its own trains?

David Vernon: Is CN going to be running some of its own trains, or is that totally separate from what you guys announced today? Thank you.

Speaker #8: Or is that totally separate from what you guys announced today? Thank you.

Speaker #6: Yeah. So, the first question: we look at car orders, and we're at 100% fulfilling those. Those are up slightly. And so, yes, if you look at it broadly—if you look at the car orders, and I'm talking across the board—there is some slight uptick that's there.

Kenny Rocker: Yeah. The first question, we look at car orders, and we're at 100% fulfilling those, and those are up slightly. Yes, if you look at it broadly, if you look at the car orders, and I'm talking across the board, there is some slight uptick that's there. You're also seeing that in the momentum that we talked about on the industrial side. That's largely a lot of our carload business, where we've had record average revenue per car and candidly record revenue that's there. That's encouraging to us as we move and turn into the H2. There are some things that we're doing that make our lot in life a lot better. You look at grain and grain products, we've got a few more facilities that are coming online, some that are export, some that are domestic.

Speaker #6: You're also seeing that in the momentum that we talked about on the industrial side. That's largely a lot of our car load business where we've had record average revenue per car.

Speaker #6: And candidly, record revenue is there. So that's encouraging to us as we move and turn into the second half. And then there are some things that we're doing to make our lot in life a lot better.

Speaker #6: So you look at grain and grain products. We've got a few more facilities that are coming online, some that are export, some that are domestic.

Speaker #6: Automotive is not a it's not a great overall macro area, but we won new business to go out and compete in that area. So a little bit of a macro bump on the industrial side, but also we're balancing that and supplementing that by winning new business.

Kenny Rocker: Automotive is not a great overall macro area, but we've won new business to go out and compete in that area. A little bit of a macro bump on the industrial side, but also, we're balancing that and supplementing that by winning new business. I think the second question was around the Falcon. Our Falcon product with CN is going well. The service product is strong. Eric, you've really helped us out on the CN there. As we look at Mexico again, and you can see the numbers, Mexico, we've done well in Mexico, and we see that occurring as we go through.

Speaker #6: I think the second question was around the Falcon. Our Falcon product with CN is going well. The service product is strong. Eric, you've really helped us out in seeing there.

Speaker #6: So as we look at Mexico again, and you can see the numbers, Mexico, we've done well in Mexico. And we see that. Occurring as we go through.

Speaker #8: Kenny, sorry for interrupting. Or Eric, you guys should talk about we've talked about open gateways. And the Falcon was through Chicago, but we have no problem with making sure that the other railroads come to our network and move the way the customers want it to move.

Jim Vena: Kenny, sorry for interrupting. Eric, you guys should talk about, we talked about open gateways and the Falcon was through Chicago, but we have no problem with making sure that the other railroads come to our network and move the way the customers want it to move.

Speaker #6: So when we think about the Falcon, it is independent of this. And to Jim's point, our commitment as part of the merger, which has remained unchanged and will remain unchanged, is full access to all the active interchange points.

Eric Gehringer: When we think about the Falcon, it is independent of this. To Jim's point, our commitment as part of the merger, which has remained unchanged and will remain unchanged, is full access to all the active interchange points. When some people think about that, they underestimate, when I say interchange points, they think of places like Chicago and New Orleans, which are obviously incredibly important to us and all the other railroads. Just remember that every single day, there's 260 interchange points across the Union Pacific network as we sit here today. We're really committing to that 260 open interchanges, just like they were yesterday, just like they were a month ago.

Speaker #6: And when some people think about that, they underestimate—when I say interchange points, they think of places like Chicago and New Orleans, which are obviously incredibly important to us and all the other railroads.

Speaker #6: But just remember that every single day there's 260 interchange points across the Union Pacific network as we sit here today. So we're really committing to that.

Eric Gehringer: We're really committing to that 260 open interchanges, just like they were yesterday, just like they were a month ago. That's going to remain that, because to Jim's point, our partnerships with all of the railroads are incredibly important when you consider 40% of our volume every day is interchanged to another railroad or received by us from another railroad.

Speaker #6: 260 open interchanges just like they were yesterday, just like they were a month ago. And that's going to remain that because to Jim's point, our partnerships with all of the railroads are incredibly important.

Eric Gehringer: that's going to remain that, because to Jim's point, our partnerships with all of the railroads are incredibly important when you consider 40% of our volume every day is interchanged to another railroad or received by us from another railroad.

Speaker #6: When you consider 40% of our volume every day is interchanged to another railroad or received by us from another railroad. Perfect. Thanks, David.

David Vernon: Perfect.

Jim Vena: Thanks, David.

Speaker #4: Our next question is from the line of Stephanie Moore with Jefferies. Please proceed with your question.

Operator 2: Our next question is from the line of Stephanie Moore with Jefferies. Please proceed with your question.

Operator: Our next question is from the line of Stephanie Moore with Jefferies. Please proceed with your question.

Speaker #6: Morning, Stephanie.

Jim Vena: Morning, Stephanie.

Speaker #7: Hi, good morning. Thank you guys. I guess I wanted to maybe ask a bigger picture question here. For whoever on the team would like it, but I wanted to ask a little bit about just maybe the reindustrialization theme that we're seeing across the US and maybe that means a bit more domestic manufacturing and maybe less imports coming onto the West Coast.

Stephanie Moore: Hi. Good morning. Thank you, guys. I guess I wanted to maybe ask a bigger picture question here, for whoever on the team would like it. I wanted to ask a little bit about just maybe the re-industrialization theme that we're seeing across the US, and maybe that means a bit more domestic manufacturing and maybe less imports coming onto the West Coast. Can you maybe frame how you think the network is positioned to handle what could be a pretty big medium term theme here over the next five, 10 years? Thanks.

Speaker #7: So can you maybe frame how you think the network is positioned to handle what could be a pretty big medium-term theme here over the next 5, 10 years?

Speaker #7: Thanks.

Speaker #6: So Kenny, why don't you talk about what you see with all the construction, different products, hot markets, cooler markets real quick, and then Eric talk about the railroad and how it is.

Jim Vena: Kenny, why don't you talk about what you see with all the construction, different products, hot markets, cooler markets real quick, and then Eric, talk about the railroad and how it is.

Speaker #5: Yeah, Stephanie, you're really asking about what we call our industrial development area where we're either expanding out of plan or locating a new customer on our network.

Kenny Rocker: Yeah. Stephanie, you're really asking about what we call our industrial development area, where we're either expanding at a plant or locating a new customer on our network. That pipeline has remained strong, and we've seen a lot of new customers come onto our network. I talked about AGP, which is a grain customer, but then we've also seen it with Hyundai Steel that's bringing on new production here in the US into the Gulf. That pipeline is strong, and we see it show up in other areas. Someone talked a little bit earlier about the data centers, but we're seeing really good strength, really good pipeline. We're converting that at a great rate. We're seeing a robust number of RFIs, meaning our opportunity to compete in that area. We're bullish, and we're excited about that. We've been able to convert on that.

Speaker #5: And that pipeline has remained strong, and we've seen a lot of new customers come onto our network. I talked about AGP, which is a grain customer, but then we've also seen it with Hyundai Steel that's bringing on new production.

Speaker #5: Here in the US, into the Gulf. That pipeline is strong and we see it show up in other areas. Someone talked a little bit earlier about the data centers.

Speaker #5: But we're seeing really good strength, really good pipeline. We're converting that out of great rate. We're seeing robust number of RFIs, meaning our opportunity to compete in that area.

Speaker #5: And so we're bullish and we're excited about that. We've been able to convert on that.

Speaker #6: And then Stephanie, as far as the railroad's ability to handle it, we are and we remain poised to be able to handle that growth.

Eric Gehringer: Stephanie, as far as the railroad's ability to handle it, we are, and we remain poised to be able to handle that growth. You saw that, a couple examples here recently. You go back to last year with the 33% increase in international intermodal, and we handled it. We handled it well. You look at what's happened in the domestic intermodal market, which credit to Kenny and his team, they've done a great job bringing that growth to our railroad. You've seen us handle that exceptionally well, especially when you see 5% increases on car velocity in a period of the year where historically, no matter how many years you go back, we actually would degrade by about 15 to 20 miles per day. 50 days into the summer, we haven't had any degradation, and we don't plan to have any degradation.

Speaker #6: You saw that in a couple of examples here recently. You go back to last year with the 33% increase in international intermodal, and we handled it.

Speaker #6: We handled it well. Then you look at what's happened in the domestic intermodal market, which credit to Kenny and his team, they've done a great job bringing that growth to our railroad.

Speaker #6: And you've seen us handle that exceptionally well, especially when you see 5% increases on car velocity in a period of the year where, historically—no matter how many years you go back—we actually would degrade by about 15 to 20 miles per day.

Speaker #6: But 50 days into the summer, we haven't had any degradation and we don't plan to have any degradation. Now, that really tells you that the fundamentals of the railroad are strong.

Eric Gehringer: That really tells you that the fundamentals of the railroad are strong. Every single metric I gave this quarter, last quarter, the quarter before that indicate that we're not only strong, but we continue to make more progress. On the capacity side, to be able to handle that, and you used examples like the West Coast and Mexico, think about what we've been doing, and this is not a new thing. We've always invested in our capital, invested that into the railroad prudently. Whether you're thinking about the more than $125 million we've invested in our Houston complex, whether you think about our continued work to finish double tracking the Sunset Route from Yuma all the way to Tucson, so that we're actually double track all the way to El Paso.

Speaker #6: Every single metric I gave this quarter, last quarter, the quarter before that indicate that we're not only strong, but we continue to make more progress.

Speaker #6: Now, on the capacity side, to be able to handle that, and you used examples like the West Coast and Mexico, think about what we've been doing.

Speaker #6: And this is not a new thing. We've always invested in our capital, invested that into the railroad prudently. So whether you're thinking about the more than 125 million dollars we've invested in our Houston complex, whether you think about our continued work to finish double tracking the sunset route from Yuma all the way to Tucson so that we're actually double track all the way to El Paso, and even on the bulk side and the manifest side, when you think about our signing construction projects and signing extension projects up in the Pacific Northwest and across Iowa, we are poised.

Eric Gehringer: Even on the bulk side and the manifest side, when you think about our siding construction projects and siding extension projects up in the Pacific Northwest and across Iowa, we are poised, we'll continue to be poised, and we'll continue to maintain a buffer so that when unexpected growth comes because of all of Kenny's team's hard work, we can bring it out of the railroad with an immediate yes to our customer.

Speaker #6: We'll continue to be poised and we'll continue to maintain a buffer so that when unexpected growth comes, because of all of Kenny's team's hard work, we can bring it onto the railroad with an immediate yes to our customer.

Speaker #8: Yeah. And just one last thing

Jennifer Hamann: Just one last thing to add there, Stephanie. You've heard us talk about our pipeline of industrial projects where Kenny mentioned the RFIs. We've got about 200 of those in the pipeline today. It's a very strong pipeline, we feel very bullish about our opportunity to continue to grow there.

Speaker #7: to add there, Stephanie. So you've heard us talk about our pipeline of industrial projects where you're and Kenny mentioned the RFIs. We've got about 200 of those in the pipeline today.

Speaker #7: It's a very strong pipeline, so we feel very positive about our opportunity to continue to grow there.

Speaker #6: Perfect. Thank you very much, Stephanie.

Jim Vena: Perfect. Thank you very much, Stephanie.

Speaker #4: The next question is from the line of Tom Motivitz with UBS. Please proceed.

Operator 2: The next question is from the line of Thomas Wadewitz with UBS. Please proceed.

Operator: The next question is from the line of Tom Wadewitz with UBS. Please proceed.

Jim Vena: Morning, Tom.

Speaker #6: Morning, Tom.

Speaker #8: Hi. Yeah, good morning, Jim. So in congratulations on this deal with CN. That seems like a really nice step forward for you in terms of making the case with STB.

Thomas Wadewitz: Yeah. Good morning, Jim. Congratulations on this deal with CN. That seems like a really nice step forward for you in terms of making the case with STB. I wanted to ask you, just for a little more kind of understanding on how you would view that deal. Can you give us any kind of framing of, we say three to two to one customers when you consider the customers on St. Louis to Kansas City or in St. Louis area that are seeing, getting access to, how large is that group? Is that five customer facilities? Is that 50? Is there any way to frame that? I guess the other component would just be their access to your line on Memphis to Eagle Pass. Would you expect CN to compete with you on business to and from Mexico?

Tom Wadewitz: Yeah. Good morning, Jim. Congratulations on this deal with CN. That seems like a really nice step forward for you in terms of making the case with STB. I wanted to ask you, just for a little more kind of understanding on how you would view that deal. Can you give us any kind of framing of, we say three to two to one customers when you consider the customers on St. Louis to Kansas City or in St. Louis area that are seeing, getting access to, how large is that group? Is that five customer facilities? Is that 50? Is there any way to frame that?

Speaker #8: I wanted to ask you just for a little more kind of understanding on how you would view that deal. So can you give us any kind of framing of when you say 3 to 2, 2 to 1 customers, when you consider the customers on St.

Speaker #8: Louis to Kansas City or in St. Louis area that are CMs getting access to, how large is that group? Is that like five customer facilities?

Speaker #8: Is that like 50? Is there any way to kind of frame that? And then I guess the other component would just be their access to your line on Memphis to Eagle Pass.

Tom Wadewitz: I guess the other component would just be their access to your line on Memphis to Eagle Pass. Would you expect CN to compete with you on business to and from Mexico? Is that like, hey, this is going to really enable them to compete with CP on business that's more like, call it Eastern Canada to Mexico? Just want to see if you could give us a little bit more perspective on how meaningful that is and how you think it affects the competition.

Speaker #8: Would you expect CN to compete with you on business to and from Mexico, or is that like, hey, this is going to really enable them to compete with CP on business?

Thomas Wadewitz: Is that like, hey, this is going to really enable them to compete with CP on business that's more like, call it Eastern Canada to Mexico? Just want to see if you could give us a little bit more perspective on how meaningful that is and how you think it affects the competition.

Speaker #8: It's more like call it Eastern Canada to Mexico. Just want to see if you could give us a little bit more perspective on kind of the how meaningful that is and how you think it affects the competition.

Speaker #6: Okay. The new deal is Canada to Mexico. So it's not competitive with us. It's good for both of us. It allows them to sell it.

Jim Vena: Okay. The new deal is Canada to Mexico, it's not competitive with us. It's good for both of us. It allows them to sell it. Second is, as far as the number of 3 to 2 and 2 to 1, it's in the application, Tom. It's absolutely a small number. Out of the thousands of customers we have, we're talking about a couple of handfuls, if that. Jennifer, what's the exact number? I don't want to put the wrong number out.

Speaker #6: Second is, as far as the number of 3 to 2 and 2 to 1, it's in the application Tom. It's absolutely a small number.

Speaker #6: Out of the thousands of customers we have, we're talking about a couple of handfuls—if that. Jennifer, what's the exact number? I don't want to put the wrong number out.

Jennifer Hamann: I think.

Speaker #6: Because it's being a freaking moving target.

Jim Vena: It's being a freaking moving target.

Jennifer Hamann: Yeah, the 2 to 1 is three or four, and the 3 to 2, I think is low 30s.

Speaker #7: Yeah, the 2 to 1 is 3 or 4 and the 3 to 2, I think, is low 30s.

Speaker #6: Right. So that's it. So out of all our customers, and we said that we would fix the 2 to 1s and we have a remedy even for the 3 to 2s, which truly is let's get serious.

Jim Vena: Right. That's it. Out of all our customers, and we said that we would fix the 2 to 1s, and we have a remedy even for the 3 to 2s, which truly is. Let's get serious. If somebody has 2 plus a truck or 2, they should be competitive, but we want to make sure that there's no question about leaving every optionality that people have. Tom, I'll take exception to 1 thing on yours. It's pretty straightforward. This merger doesn't need a lot of help, okay? I've been pretty adamant about this, and what people are missing is when you give customers a seamless single-point railroad that can move things a longer distance, that automatically makes the thing less expensive for the customer and more competitive against any other product that's out there. People want to make noise about whether we need to help this.

Speaker #6: If somebody asked 2 plus a truck or 2, they should be competitive, but we want to make sure that there's no question about leaving every optionality that people have.

Speaker #6: Tom, I'll take exception to one thing on yours. It's pretty straightforward. This merger doesn't need a lot of help. Okay? And I've been pretty adamant about this and what people are missing is when you give customers a seamless single point railroad that can move things longer distance, that is automatically makes the thing less expensive for the customer.

Speaker #6: And more competitive against any other product that's out there. So people want to make noise about whether we need to help this. I think the CN deal, the Canadian national deal is great for both of us with EJ&E and the Mexico and then within the piece.

Jim Vena: I think the CN deal, the Canadian National deal, is great for both of us, with EJ&E and the Mexico, and then within the piece. We're talking a small number of customers. This is a growth deal. We see taking trucks off the road to go across the US faster and take things that are right now going through cities and less fuel efficient, more greenhouse gas, impacting roads, that of course, everybody knows, trucks do not pay their full share of the construction and capital costs on the interstate system while we pay for all ours, but we want to put them on our railroad. This is truly more compelling today than we looked at it than ever before. You can see, because it only touches. Think about that. Less than 10 customers go 2 to 1. This is truly an end-to-end that wins.

Speaker #6: But we're talking a small number of customers. This is a growth deal. We see taking trucks off the road to go across the US faster and take things that are right now going through cities and less fuel efficient, more greenhouse gas, impacting roads that, of course, everybody knows trucks do not pay their full share of the construction and capital costs on the interstate system.

Speaker #6: While we pay for all ours, but we want to put them on our railroad. So this is truly more compelling today than we looked at it than ever before.

Jim Vena: This is truly more compelling today than we looked at it than ever before. You can see, because it only touches. Think about that. Less than 10 customers go 2 to 1. This is truly an end-to-end that wins. We think we have a strong case. People, they can write stories that aren't factual, can say whatever they want. The facts are pretty clear. You got me going a little bit this morning. Good morning.

Speaker #6: And you can see because it only touches think about that less than 10 customers go 2 to 1. This is truly an end to end that wins.

Speaker #6: We think we have a strong case. People that can write stories that aren't factual can say whatever they want the facts are pretty clear.

Jim Vena: We think we have a strong case. People, they can write stories that aren't factual, can say whatever they want. The facts are pretty clear. You got me going a little bit this morning. Good morning.

Speaker #6: So you got me going a little bit this morning. Good morning.

Speaker #8: Jim, do you think you'll get a shipper agreement as well? Are you optimistic on that?

Thomas Wadewitz: Jim, do you think you'll get a shipper agreement as well? Are you optimistic on that?

Tom Wadewitz: Jim, do you think you'll get a shipper agreement as well? Are you optimistic on that?

Speaker #6: Sorry, you broke up on the one piece. What did he say?

Jim Vena: Sorry, you broke up on the one piece. What did he say? Shipper?

Jim Vena: Sorry, you broke up on the one piece. What did he say?

Jennifer Hamann: Shipper?

Speaker #8: Oh, no, I'm just. I'm saying like yeah, you got to see agreement with CN. Do you think he'll announce some kind of big shipper agreements as well or maybe not for a while?

Thomas Wadewitz: No,

Tom Wadewitz: No,

Jim Vena: Oh, shipper.

Thomas Wadewitz: Yeah, you got to see agreement with CN. Do you think it'll announce some kind of big shipper agreements as well or maybe not for a while?

Tom Wadewitz: Yeah, you got to see agreement with CN. Do you think it'll announce some kind of big shipper agreements as well or maybe not for a while?

Speaker #6: Listen, we talked to our customers all the day and we have set a number of customers that and how do we move ahead? How do we make sure that they understand how it is and how they can win in the marketplace?

Jim Vena: Listen, we talk to our customers all the day. How do we move ahead? How do we make sure that they understand how it is and how they can win in the marketplace? Yeah, we're not going to announce them because they're private deals. At the end of the day, absolutely, we've been talking to a lot of customers. I sent a letter to our top 50 customers saying, "If you have any questions about the business that we're doing together," and I sent it to their CEOs, "here's my phone number.

Speaker #6: So, yeah, we're not going to announce them because they're private deals, but at the end of the day, absolutely, we've been talking to a lot of customers.

Speaker #6: I sent the letter to our top 50 customers, saying if you have any questions about the business that we're doing together. And I sent it to their CEOs.

Speaker #6: Here's my phone number. Give me a call, text me, and we'll get the teams together to go through details so you understand what the benefits are.

Jim Vena: Give me a call, text me, and we'll get the teams together to go through details so you understand what the benefits are. I had a meeting on Monday with one of the big shippers here in the Midwest. They're not going to come out, and he told me black and white. He says, "Listen, I'm not going to come out to support it because the other people have not. I worry about what they might say and do if I do." At the end of the day, he says, "I see the advantage." If we're moving pulse products from the Southeast US to the West, which they are, they see the seamless. Customers, absolutely. Thanks for the question. It got me to fill in all the gaps of what I haven't been able to say yet this morning. Appreciate it.

Speaker #6: I had a meeting on Monday with one of the big shippers here in the Midwest and they're not going to come out and he told me black and white.

Speaker #6: He says, listen, I'm not going to come out to support it because the other people have not—worry about what they might say and do if I do.

Speaker #6: But at the end of the day, he says, I see the advantage. If we're moving products from the Southeast US to the West, which they are, they see the seamless.

Speaker #6: So, customers, absolutely. And thanks for the question. It got me to fill in all the gaps of what I haven't been able to say yet this morning.

Speaker #6: So appreciate it.

Thomas Wadewitz: Okay, thank you, Jim.

Tom Wadewitz: Okay, thank you, Jim.

Speaker #8: Okay. Thank you, Jim.

Speaker #5: Next question through the line of Brian Austin. Back with JP Morgan. Please assume through question.

Operator 2: Next question is from the line of Brian Ossenbeck with J.P. Morgan. Pleased to see you with your question.

Operator: Next question is from the line of Brian Ossenbeck with J.P. Morgan. Pleased to see you with your question.

Speaker #6: Morning, Brian.

Jim Vena: Morning, Brian.

Speaker #5: Hey, good morning, Jim. Good morning, team, thanks for taking the question. Maybe just one real quick for Jennifer, then a couple for Jim. Jennifer, the Comp ratio head up 6%.

Brian Ossenbeck: Hey, good morning, Jim. Good morning, team. Thanks for taking the question. Maybe just one real quick for Jennifer, then a couple for Jim. Jennifer, the comp per head up 6%. Typically, you have good visibility on that to start the year. It continues to move up a bit. Just wanted to see what the driver was for that. Jim, you mentioned or hinted that there'll be some, I guess, improvements, expanding of the CGP and a couple other, I guess, voluntary enhancements, if you want to call them that we'll see on Monday. Wanted to see if you could get a little bit more granular on that, give us a little bit of a preview of what to expect. Of course, the STB had a couple decisions out yesterday.

Speaker #5: I mean, typically you have good visibility on that to start the year. It continues to move up a bit. Just wanted to see what the driver was for that.

Speaker #5: And then Jim, you mentioned or hinted that there'll be some I guess improvements, expanding of the CGP in a couple other I guess voluntary enhancements if you want to call them that that we'll see on Monday.

Speaker #5: One of the see if you could get a little bit more granular on that gives a little bit of a preview of what to expect.

Brian Ossenbeck: Wanted to see if you could get a little bit more granular on that, give us a little bit of a preview of what to expect. Of course, the STB had a couple decisions out yesterday. One that was interesting, just the trackage rights, the reciprocal switching with UP going back to Lake Charles. Is that anything that you think sets the precedent as you start to work towards the review of the transaction on the merits? Thanks very much.

Speaker #5: And then of course, the STB had a couple decisions out yesterday. One that was interesting just the trackage rights, the reciprocal switching with UP going back to Lake Charles.

Brian Ossenbeck: One that was interesting, just the trackage rights, the reciprocal switching with UP going back to Lake Charles. Is that anything that you think sets the precedent as you start to work towards the review of the transaction on the merits? Thanks very much.

Speaker #5: Is that anything that you think sets the precedent as you start to work towards the merits the review of the transaction on the merits?

Speaker #5: Thanks very much.

Speaker #6: Oh, so real quick on the STB. Listen, I think they were very prudent when they came out with the decisions and basically they just said that there's certain things that were in place that just make sense and you can't just automatically ask for access for nothing on somebody else's property.

Jim Vena: Real quick on the STB. Listen, I think they were very prudent when they came out with the decisions. Basically, they just said that there are certain things that were in place that just make sense. You can't just automatically ask for access for nothing on somebody else's property. It would be like somebody setting up a coffee shop and going to Starbucks and saying, "I want to set up a coffee shop in Starbucks because I drove by the freaking place." That doesn't make a particle of sense, and that's what the STB said. We're very happy. Now, are we happy with every decision? No. They want us to put out detailed information on employees. You think about it, we've given it to every law firm that covers every person that might want to comment on this deal.

Speaker #6: It would be like somebody setting up a coffee shop and going to Starbucks and saying, I want to set up a coffee shop in Starbucks because I drove by the freaking place.

Speaker #6: That doesn't make a particle of sense, and that's what the STB said. So we're very happy. Now, are we happy with every decision? No.

Speaker #6: They want us to put out detailed information on employees, and you think about where we're going—we've given it to every law firm that covers every person that might want to comment on this deal.

Speaker #6: So at the end of the day, are we happy with that one? I'm not because it impacts people's lives. And I always worry about that and how it impacts our employees.

Jim Vena: At the end of the day, are we happy with that one? I'm not, because it impacts people's lives, and I always worry about that and how it impacts our employees. Overall, I think it's a clear win for Union Pacific that our position was correct in how things were done with the three cases. On that's where I am with it. Jennifer?

Speaker #6: But overall, I think it's a clear win for Union Pacific that our position was correct in how things were done with the three cases.

Speaker #6: So on that, that's where I am with it. Jennifer?

Speaker #2: Yeah, on the Compar employee piece, Brian, it really is wage inflation and benefits. So really the part that's been a little bit hotter than we were expecting coming into the year is on the health and welfare side.

Jennifer Hamann: Yeah. On the comp per employee piece, Brian, it really is wage inflation and benefits. Really the part that's been a little bit hotter than we were expecting coming into the year is on the health and welfare side. You're right, the wage inflation is known. Just as a reminder, we had the 4% for the H1 of the year, and effective 1 July, we now have 3.75% increase in terms of the unionized wages. Good, healthy increases there, and that's where we're just running a little bit hot.

Speaker #2: You're right. The wage inflation is known. Just as a reminder, we had the 4% for the first half of the year and effective July 1st, we now have 3 quarters percent increase in terms of the unionized wages.

Speaker #2: So, good, healthy increases there. And that's where we're just running a little bit hot.

Speaker #6: So per employee, we're up, but how's the productivity? Remind everybody.

Jim Vena: Per employee, we're up, but how's the productivity? Remind everybody.

Speaker #8: Yeah, absolutely. So when you think about some of the numbers that I report in my prepared comments, they start to give you some perspective but I have the benefit to be able to peel that back and see at the ground level exactly what's happening.

Eric Gehringer: Yeah, absolutely. When you think about some of the numbers that I report in my prepared comments, they start to give you some perspective, but I have the benefit to be able to peel that back and see at the ground level exactly what's happening. To Jennifer's point, while we are running hot on that, we've seen continued progress on the productivity side. You don't grow train length to almost 9,900 feet by chance. If you think about it, not that long ago, we were at 7,500 feet. Our 2% gain is on a very large gain over the last 5 years, and we don't see a stop to that.

Speaker #8: And so to Jennifer's point, while we are running hot on that, we've seen continued progress on the productivity side. You don't grow train length to almost 9,900 feet by chance.

Speaker #8: If you think about it, not that long ago, we were at 7,500 feet. So our 2% gain is on a very large gain over the last five years.

Speaker #8: And we don't see a stop to that. I often get asked, can you make it to 10,000 feet? We've got the team here at Union Pacific that takes challenges like that very seriously and looks for safe opportunities for us to be able to do that.

Eric Gehringer: I often get asked, Can you make it to 10,000 feet? We got the team here at Union Pacific that takes challenges like that very seriously and looks for safe opportunities for us to be able to do that. Now, when you look down even deeper into our terminals and you look at line of road with our wage increases, our challenge that we take on every year, we focus on every quarter, every week, is to offset as much wage inflation as possible. You can see how we've done that. You can see that when you're increasing car velocity and you're running at 231 miles per day, you're dropping your recruit rate to 4.5%. We did that in the quarter. That's two whole points better than it was last year. I can go on and on. Terminal dwell being down 7%, run-through dwell being down 8%.

Speaker #8: Now, when you look down even deeper into our terminals and you look at line of road, with our wage increases, right, our challenge that we take on every year, we focus on every quarter, every week, is this offset as much wage inflation as possible.

Speaker #8: And you can see how we've done that. You can see that when you're increasing car velocity and you're running at 231 miles per day, you're dropping your recruit rate to 4.5%.

Speaker #8: We did that in the quarter. That's two whole points better than it was last year. And I can go on and on—terminal dwell being down 7%.

Speaker #8: Run-through dwell down being down 8%. It's all those things that our team and the operating department with the support of the rest of the company do every single day.

Eric Gehringer: It's all those things that our team in the operating department, with the support of the rest of the company, do every single day, and I could not be more proud of them, mostly because they're perpetually dissatisfied, always looking for more opportunities. We're going to offset as much inflation as we possibly can, and our track record demonstrates we do that quite well.

Speaker #8: And I could not be more proud of them. Mostly because they're perpetually dissatisfied, always looking for more opportunities. And we're going to offset as much inflation as we possibly can.

Speaker #8: And our track record demonstrates we do that quite well.

Speaker #6: You know what, you had a third question in there. Oh, sorry. A subpart. What was the third subpart?

Jim Vena: You know what? You had a third question in there, or sorry, a subpart. What was the third subpart?

Speaker #5: Thank you for that, and for humoring me there. I think, just to give us all a preview of what to expect from the supplementals, because it sounds like there might be a couple of additional things—you went above and beyond the initial list.

Brian Ossenbeck: Thank you for that, humoring me there. Yeah, I think just to give us all a preview of what to expect on the supplementals, because it sounds like there might be a couple additional things. You went above and beyond the initial list. Thank you.

Speaker #6: I was hoping you forgot that piece, okay, when I asked you. But bottom line is, listen, there's a whole bunch of detail in there.

Jim Vena: I was hoping you forgot that piece, okay? When I asked you. Bottom line is.

Brian Ossenbeck: No chance.

Brian Ossenbeck: There's a whole bunch of detail in there. What the expansion does is we went out and talked to our customers, and the feedback we received was, "Would you guys examine?" We went to detail with a lot of them to say, "Listen, it'll help us being able to." Just because, and I've always talked about distances is your enemy if you try to route things the wrong way. The bottom line is when we went through that, you'll see it in the application, we've expanded it because of what our customers gave us of feedback. Again, we don't see that as a negative because the more you can open up some of those things to make sure the optionality is there, we get more business out of it, and it's about growth.

Jim Vena: There's a whole bunch of detail in there. What the expansion does is we went out and talked to our customers, and the feedback we received was, "Would you guys examine?" We went to detail with a lot of them to say, "Listen, it'll help us being able to." Just because, and I've always talked about distances is your enemy if you try to route things the wrong way. The bottom line is when we went through that, you'll see it in the application, we've expanded it because of what our customers gave us of feedback. Again, we don't see that as a negative because the more you can open up some of those things to make sure the optionality is there, we get more business out of it, and it's about growth.

Speaker #6: What the expansion does is we actually we went out and talked to our customers. And the feedback we received was, would you guys examine and we went the detail with a lot of them to say, listen, it'll help us being able to just because and I've always talked about distances is your enemy if you try to route things the wrong way.

Speaker #6: So the bottom line is, when we went through that, we'll see it in the application. We've expanded it because of what our customers gave us a feedback.

Speaker #6: Again, we don't see that as a negative, because the more you can open up some of those things to make sure the optionality is there, we get more business out of it.

Speaker #6: And it's about growth. So Eric, I thought Eric was going to give you a real quick, yeah, our productivity was again great, but he decided to show you the whole freaking railroad.

Jim Vena: Eric, I thought Eric was going to give you a real quick, our productivity was, again, great, but he decided to show you the whole freaking railroad. I love it. He's starting to sound more like me, okay? Pretty soon, Eric, I don't even have to come on these calls. Between you and Kenny and Jennifer, you guys have got it. That's where we are. You'll have to wait till Monday, okay? I can't let the whole cat out of the bag.

Speaker #6: I love it. He's starting to sound more like me, okay? Pretty soon, Eric, I don't even have to come on these calls. Between you and Kenny and Jennifer, you guys have got it.

Speaker #6: But so that's where we are. You'll have to wait till Monday, okay? I can't let the whole cat out of the bag.

Speaker #5: Understood. Thanks very much for your time.

Brian Ossenbeck: Understood. Thank you very much for the time.

Speaker #6: Have a good one.

Jim Vena: Have a good one.

Speaker #1: The next question comes from the line of Jason Seidl with TD Cowen. Please proceed with your question.

Operator 2: The next question is from the line of Jason Seidl with TD Cowen. Please proceed with your question.

Operator: The next question is from the line of Jason Seidl with TD Cowen. Please proceed with your question.

Eric Gehringer: Morning, Jason.

Jim Vena: Morning, Jason.

Speaker #7: Morning, Jason.

Speaker #8: Hey, morning, Jim. Congrats on a good quarter here. One of the focus on two different things. One, I guess I want to talk to Eric a little bit about operations guys doing a great job out there.

Jason Seidl: Morning, Jim. Congrats on a good quarter. I guess I want to talk to Eric a little bit about operations. Guys doing a great job out there. How much ability do you have to take on additional freight without adding much in the way of headcount or other expenses, particularly on the intermodal side for both the near term and also the longer term as you look at some of your forecasts that are out there for the deal? I guess for Kenny, how should we think about pricing on intermodal as it flows through your network for the remainder of the year in 2027?

Speaker #8: How much ability do you have to take on additional freight without sort of adding much in the way of headcount or other expenses, particularly on the intermodal side?

Speaker #8: For both the near term and also sort of the longer term as you look at some of your forecasts that are out there for the deal, and then I guess for Kenny, how should we think about pricing on intermodal as it flows through your network for the remainder of the year in '27?

Speaker #8: All right, so let me start. You asked the question in the context of the merger. When we put in our application, we said that there would be an incremental increase.

Eric Gehringer: Let me start. You asked the question in the context of the merger. When we put in our application, we said that there would be an incremental increase in our union employees to be able to handle the revenue synergies that Kenny and the team have identified with the help of Norfolk Southern. Don't be surprised by the fact that when we look at that, we didn't start in that place. You start from the place of, we know our transportation plan and we know our network, and Norfolk Southern knows their transportation plan and their network. You look first for where do you have latent capacity within your existing train starts. You've seen our history over the last four to five years. We've done an exceptional job of being able to utilize latent capacity. You always want to look there first.

Speaker #8: And our union employees to be able to handle the revenue synergies that Kenny and the team have identified with the help of Norfolk Southern.

Speaker #8: But don't be surprised by the fact that when we look at that, we didn't start in that place. You start from the place of we know our transportation plan and we know our network and Norfolk Southern knows their transportation plan and their network.

Speaker #8: And you look first for where do you have latent capacity within your existing train starts? Now, you've seen our history over the last four to five years.

Speaker #8: We've done an exceptional job of being able to utilize latent capacity, so you always want to look there first. From there, we then overlay the new volume that's coming onto the railroad.

Eric Gehringer: We've done an exceptional job of being able to utilize latent capacity. You always want to look there first. From there, we then overlay the new volume that's coming onto the railroad, and we have to add some train starts. We've been clear with that, and it's in the application that those train starts involve trains that are going to go from LA, generally speaking, from LA to Chicago.

Eric Gehringer: From there, we then overlay the new volume that's coming onto the railroad, and we have to add some train starts. We've been clear with that, and it's in the application that those train starts involve trains that are going to go from LA, generally speaking, from LA to Chicago.

Speaker #8: And we have to add some train starts. Now, we've been clear with that and it's in the application that those train starts involve trains that are going to go from LA generally speaking from LA to Chicago.

Jim Vena: Well, I'm not, but I want to make sure we understand.

Speaker #7: Well, I'm not, but I want to make sure you understand.

Eric Gehringer: I'm sorry, I got.

Eric Gehringer: I'm sorry, I got. We will.

Jim Vena: We will.

Speaker #8: We sort of give them a high level. I don't want the other railroads to listen in though.

Eric Gehringer: Just sort of give them a high-level picture. I don't want the other railroads to listen in, though.

Jim Vena: Just sort of give them a high-level picture. I don't want the other railroads to listen in, though.

Jim Vena: Yeah, I know. I know. Jason, he's afraid I'm giving away the secret recipe.

Eric Gehringer: Yeah, I know. I know. Jason, he's afraid I'm giving away the secret recipe.

Speaker #7: Yeah, I know. I know. Jason, he's afraid I'm giving away the secret recipe, but the secret recipe stays here.

Eric Gehringer: The secret sauce stays here, sadly.

Jim Vena: The secret sauce stays here, sadly.

Jim Vena: That's right. That sauce is our people, and we will make sure that we have the appropriate number of people to make sure we run the railroad, but also do it in a volume variable way.

Eric Gehringer: That's right. That sauce is our people, and we will make sure that we have the appropriate number of people to make sure we run the railroad, but also do it in a volume variable way.

Speaker #8: That's right.

Speaker #7: That source is our people. And we will make sure that we have the appropriate number of people to make sure we run the railroad, but also do it in a volume-variable way.

Speaker #2: And that last part is important, is you're not going to see people grow at the same level as volume.

Kenny Rocker: That last part's important, is you're not going to see people grow at the same level as volume.

Jennifer Hamann: That last part's important, is you're not going to see people grow at the same level as volume.

Eric Gehringer: Yeah, that's exactly right.

Speaker #7: That's exactly right.

Jim Vena: Listen, Eric, I love it, son of a gun, I thought you were pretty soon going to say how we start people and what our terminal time is and how we got that down.

Speaker #8: Listen, Eric, I love it, but son of a gun, I thought you were getting—pretty soon you were going to say how we start people and what our terminal type is, and how we got that down.

Eric Gehringer: I'm not giving that secret sauce away.

Jim Vena: Would you stop, for God's sakes? Kenny?

Speaker #8: Would you stop for God's sake? Kenny?

Jason Seidl: Eric, you can just email that all to me, that's fine.

Speaker #7: Eric, you can just email that all to me. That's fine.

Speaker #5: So I tell you, Jason, we're coming from a position of strong momentum. You heard me talk about the fourth consecutive quarter of record volume.

Kenny Rocker: I tell you, Jason, we're coming from a position of strong momentum. You heard me talk about the fourth consecutive quarter of record volume.

Kenny Rocker: I tell you, Jason, we're coming from a position of strong momentum. You heard me talk about the fourth consecutive quarter of record volume. We already have that momentum, and Eric just talked about it. He's given us a strong service product that we sell. Because we're moving boxes faster, we're talking to customers about price when you're doing that, and BCOs want to align with us because of that. As we're able to quote these new rates, as the private asset folks are able to quote new rates to the IMCs, we are getting a little bit more price uplift as we move throughout the year.

Speaker #5: So we already have that momentum. And Eric just talked about it. He's given us a strong service product that we sell. And because we're moving boxes faster, we're talking to customers about price.

Kenny Rocker: We already have that momentum, and Eric just talked about it. He's given us a strong service product that we sell. Because we're moving boxes faster, we're talking to customers about price when you're doing that, and BCOs want to align with us because of that. As we're able to quote these new rates, as the private asset folks are able to quote new rates to the IMCs, we are getting a little bit more price uplift as we move throughout the year. Obviously, the biggest opportunity for us will be as we enter into the next bid season, but we're pulling more containers out of the storage. Our private asset folks are doing the same thing. On these spot moves, it's a small percentage of our business, but we are getting some of that price uplift now.

Speaker #5: When you're doing that in BCOs want to align with us because of that. So as we're able to quote these new rates, as the private asset folks are able to quote new rates, the IMCs, we are getting a little bit more price uplift as we move throughout the year.

Speaker #5: Obviously, the biggest opportunity for us will be as we enter into the next bid season. But we're pulling more containers out of the storage.

Kenny Rocker: Obviously, the biggest opportunity for us will be as we enter into the next bid season, but we're pulling more containers out of the storage. Our private asset folks are doing the same thing. On these spot moves, it's a small percentage of our business, but we are getting some of that price uplift now. The big apple is once we get into the next bid season.

Speaker #5: Our private asset folks are doing the same thing. And on these spot moves, it's a small percentage of our business, but we are getting some of that price uplift now.

Speaker #5: But the big apple is once we get into the next bid season.

Kenny Rocker: The big apple is once we get into the next bid season.

Speaker #8: Okay, thank you very much. Good question. If the rest of the people who are on want to ask questions, I want to answer everybody's question, but we're going to try to be real fast because I do not want to overlap with Norfolk Southern, who's coming on here at the top of the hour.

Operator 2: Okay.

Jason Seidl: Okay.

Jim Vena: Thank you very much. Good question. Maybe the rest of the people that are on, I want to answer everybody's question, but we're going to try to be real fast because I do not want to overlap with Norfolk Southern, who's coming on here at the top of the hour. If we could ask the question, you might not get as long an answer. Ask me any, and the team any yes or no, we'll be quick. Away we go.

Speaker #8: So if we could ask the question, you might not get as long an answer. Ask me any and the team, any yes or no will be quick and where we go.

Speaker #1: Sure. The next questions in the line of Ari Rosa with Citigroup.

Operator 2: The next question's in the line of Ari Rosa with Citigroup.

Operator: The next question's in the line of Ari Rosa with Citigroup.

Speaker #8: Ari, good morning.

Jim Vena: Ari, good morning.

Speaker #9: Hey, good morning, Jim. I'll give you a yes or no question. Just was there any discussion with the STB prior to reaching the agreement with CN?

Ari Rosa: Hey, good morning, Jim. I'll give you a yes or no question. Just, was there any discussion with the STB prior to reaching the agreement with CN? To the extent you can give any color around how it came together, whether it was you approaching CN or the other way around, it would be appreciated. Thanks.

Speaker #9: And to the extent you can give any color around how it came together—whether it was you approaching CN or the other way around—that would be appreciated.

Speaker #9: Thanks.

Speaker #8: The answer is no with the STB, and I don't know who made the first call. Probably it was me.

Jim Vena: The answer is no with the STB, I don't know who made the first call. Probably was me.

Speaker #9: Okay. Fair enough. Thanks.

Ari Rosa: Okay, fair enough. Thanks.

Jim Vena: That was quick, I appreciate it, Ari. Thank you.

Speaker #8: That was quick. I appreciate it. Thank you.

Speaker #1: The next question is from the line of Brendan Oglesky with Barclays.

Operator 2: The next question is in the line of Brandon Oglenski with Barclays.

Operator: The next question is in the line of Brandon Oglenski with Barclays.

Speaker #8: Morning, Brendan.

Jim Vena: Morning, Brandon.

Speaker #10: Hey, Jim. Good morning. And sorry, I haven't been on the full call here, so maybe I'm being redundant with my question too, so you can just tell me to shut up.

Brandon Oglenski: Hey, Jim. Good morning. Sorry, I haven't been on the full call here, so maybe I'm being redundant with my question, too, so you can just tell me to shut up.

Speaker #10: But in the world where truck availability and spot rates are so volatile, up like 50% in the last six or nine months, I mean, doesn't this just embolden the case for transcontinental rail mergers and I mean, congratulations on the deal with CN.

Jim Vena: No

Brandon Oglenski: In the world where truck availability and spot rates are so volatile, up like 50% in the last six or nine months. Doesn't this just embolden the case for transcontinental rail mergers? Congratulations on the deal with CN. Do you need to do more like that as well, just to win over more hearts and minds here? Maybe that's where it is. Is this going to close, Jim?

Speaker #10: Do you need to do more like that as well just to win over more hearts and minds here? And maybe that's where it is.

Speaker #10: Is this going to close, Jim?

Speaker #8: This merger is going to close. It's just too compelling for the country. It would be a mistake for this deal not to close.

Jim Vena: The merger's going to close. It's just too compelling for the country. It would be a mistake for this deal not to close. We would be harming. Canada goes across the entire country, and there's a reason why they haven't applied to the Canadian equivalent to the STB to split their railroad up there, both of them, because it doesn't make a particle of sense. It hurts customers, hurts the country. This deal will close, and it'll close with limited impact just because it's an end-to-end. Yes, as far as I'm concerned, if there's something else with other people, we'll move ahead. Anything else I missed? Brandon Oglenski, thank you very much.

Speaker #8: We would be harming Canada. Goes across the entire country and there's a reason why they haven't applied to the Canadian equivalent to the STB to split their railroad up there.

Speaker #8: Both of them because it doesn't make a particle of sense. It hurts customers, hurts the country. So this deal will close. And it'll close with limited impact just because it's an end to end.

Speaker #8: So and yes, as far as I'm concerned, it's if there's something else with other people, we'll move ahead. Anything else I missed? Brendan, thank you very much.

Speaker #1: Our next question is from the line of Jordan Alinger with Goldman Sachs. Please proceed with your question.

Operator 2: Our next question is from the line of Jordan Alliger with Goldman Sachs. Please proceed with your question.

Operator: Our next question is from the line of Jordan Alliger with Goldman Sachs. Please proceed with your question.

Speaker #9: Yeah, hi, morning. Hi. Yeah, I know there's a lot of moving parts on the yield front between fuel and mix and core price, but is there a way you could maybe give some thoughts at least on how you're thinking about revenue per car load, whether it be the third quarter or the second half, taking into context core price mix and the fuel impact volatile as it may be?

Jordan Alliger: Good morning. Hi. I know there's a lot of moving parts on the yield front between fuel and mix and core price, but is there a way you could maybe give some thoughts, at least on how you're thinking about revenue per carload, whether it be the Q3 or the H2, take into context, core price, mix, and the fuel impact, volatile as it may be. Thanks.

Speaker #9: Thanks.

Speaker #8: So let me start and then Kenny, real quick, talk about X fuel the way we look at it too and just give an idea because we don't always split everything up particularly.

Jim Vena: Let me start, and then Kenny, real quick, talk about ex-fuel the way we look at it, too, and just give an idea, because we don't always split everything up, particularly. Put it this way, if you remove all the noise, we actually had a 58 operating ratio. Okay? That tells you fundamentally who we are and what we're doing. We absolutely report the way we're supposed to report, but if you remove the noise from those things because fuel is an impact of 120 basis points. You take that away from our reported, we're at 58. The railroad is good. Kenny, second piece.

Speaker #8: Put it this way: if you remove all the noise, we actually had a 58 operating ratio. Okay? So that tells you fundamentally who we are and what we're doing.

Speaker #8: We don't we like to we absolutely report the way we're supposed to report, but if you remove the noise from those things that are because fuel is an impact of 120 basis points.

Speaker #8: So you take that away from our report, we're at 58. So the railroad is good. Kenny, second piece?

Speaker #5: Yeah, we do look at revenue X fuel and let me just leave with the fact that on the service end, Eric on our car load business has the SPI is oscillated between 95 and 100 depending on where it is.

Kenny Rocker: We do look at revenue ex-fuel, and let me just leave with the fact that on the service end, Eric on our carload business says, the SPI has oscillated between 95 and 100, depending on where it is, and we price according to that. Most times, this shows up in average revenue per car. I talked a little bit about that, depending on the mix. With the service that we're providing, the investments that we're making, with the market where it is and the truck prices where they are, we're going to make sure that we're pricing to that value proposition.

Speaker #5: And we price according to that. Most times, it shows up in average revenue per car. I talked a little bit about that, depending on the mix.

Speaker #5: But we're going to with the service that we're providing, the investments that we're making, with the market where it is and the truck prices where they are, we're going to make sure that we're pricing to that value proposition.

Speaker #9: Yeah, just one quick comment

Jennifer Hamann: Just one quick comment on mix, though, Jordan. As you heard me say, it was a little bit of a headwind for us in the Q2. That surprised us a little bit just because of how strong domestic intermodal came on in the back half of the quarter. As we look then to the H2 with domestic intermodal likely staying very strong and maybe some upside on the international side, we'll probably see a little bit more pressure on that mix side, but it's great business. We're handling it well, and we look forward to the contribution that provides us.

Speaker #8: on mix though, Jordan. So as you heard me say, it was a little bit of a headwind for us in the second quarter. That surprised us a little bit just because of how strong domestic intermodal came on in the back half of the quarter.

Speaker #8: As we look, then, to the second half, with domestic intermodal likely staying very strong and maybe some upside on the international side, we'll probably see a little bit more pressure on that mix side, but it's great business.

Speaker #8: We're handling it well. And we look forward to the contribution that provides us. Yeah. Listen, thank you very much. And we love the way July is running so far and you guys can all see the car loads.

Jim Vena: Listen, thank you very much. We love the way July is running so far, you guys can all see the car loads. Thank you very much.

Speaker #8: Thank you very much.

Speaker #1: The next question is from the line of Vasco Majors with Stevens.

Operator 2: The next question is from the line of Bascome Majors with Stephens.

Operator: The next question is from the line of Bascome Majors with Stephens.

Speaker #8: Vascom, how are you this morning?

Jim Vena: Bascome, how are you this morning?

Speaker #5: Hey, Jim, how you doing? Thanks for the time here. As you look forward in get to the point on Monday where you release the next set of things, the STB has asked for, where do you think we land on in the procedural schedule where we get to the point where you see the more formalized list of demands for some of the competitors that oppose the merger and ultimately those the hearings where we discuss that live with the regulator and just does the agreement that you've reached with the CN change the tone of that in any way that you think is meaningful or impactful for those of us watching?

Bascome Majors: Hey, Jim. How you doing? Thanks for the time here. As you look forward and get to the point on Monday where you release the next set of things the STB has asked for, where do you think we land on in the procedural schedule where we get to the point where you see the more formalized list of demands for some of the competitors that oppose the merger, ultimately, the hearings where we discuss that live with the regulator. Does the agreement that you've reached with the CN.

Bascome Majors: change the tone of that in any way that you think is meaningful or impactful for those of us watching? Thank you.

Speaker #5: Thank you.

Speaker #8: Well, I think the deal with CN clears up some of those things that we said that we needed to clear up. So that's real helpful.

Jim Vena: Well, I think the deal with CN clears up some of those things that we said that we needed to clear up, that's real helpful. It expands competitiveness coming out of Canada to Mexico. It expands our capability to go through Chicago faster. I love it. Not a problem there at all. What was the other part of the question?

Speaker #8: And it expands competitiveness coming out of Canada, to Mexico, and then it expands our capability to go through Chicago faster. So I love it.

Speaker #8: Not a problem there at all. As far as—what was the other part of the question?

Speaker #11: I mean, on hearings. The timing on hearings.

Bascome Majors: Timing on hearings.

Jim Vena: What's that?

Bascome Majors: The timing on hearings.

Speaker #8: Oh, the timing? My chief legal officer and everybody that we've hired, some of the best law firms say the statute is pretty black and white when you accept the application.

Jim Vena: Oh, the timing? My chief legal officer, and everybody that we've hired, some of the best law firms, say the statute's pretty black and white. When you accept the application, they have a year. I just follow the law, right? Like, if I get caught speeding out there, when I get pulled over, the police officer says to me, "Well, you know why I pulled you over?" I go, "Yes, I was going 70 in a 55 zone." He goes, "Son of a gun, you're telling me the truth." Yeah. Usually, it gets me off of the ticket. I like to be honest and upfront. The statute's pretty black and white. It's clear. We would expect the clock to have started when they accepted the application. The next step is people get to comment.

Speaker #8: They have a year. So I just follow the law. Right? If I get caught speeding out there, when I get pulled over, the police officer says to me, you know why I pulled you over?

Speaker #8: I go, 'Yes, I was going 70 in a 55 zone.' And he goes, 'Son of a gun, you're telling me the truth.' Yeah, usually it gets me off of the ticket.

Speaker #8: So I like to be honest and upfront. The statute is pretty black and white. It's clear. So we would expect the clock to have started when they accepted the application.

Speaker #8: The next step is people get the comment. So we're looking forward to that—looking forward to finally having people put their facts in and telling us factually what it is, not some high-level, whether Union Pacific has the capability to operate the system across the country and worrying about this and that.

Jim Vena: We're looking forward to that, looking forward to finally people putting their facts in and telling us factually what it is, not some high level, whether Union Pacific has the capability to operate the system across the country and worried about this and that. I'm looking forward to it, to tell you the truth, and let's hurry up and get this thing done. We're not going to get it done for my birthday on 17 August, but I love it. Let's move ahead. Good question.

Speaker #8: So I'm looking forward to it, to tell you the truth. And let's hurry up and get this thing done. We're not going to get it done for my birthday on August 17th, but I love it.

Speaker #8: Let's move ahead. Good question.

Speaker #5: Thank you very much.

Bascome Majors: Thank you.

Jim Vena: Thank you very much.

Speaker #1: The next question is from Ravi Shankar with Morgan Stanley. Please proceed with your question.

Operator 2: The next question's from the line of Ravi Shanker with Morgan Stanley. Please proceed with your question.

Operator: The next question's from the line of Ravi Shanker with Morgan Stanley. Please proceed with your question.

Speaker #8: Morning.

Jim Vena: Morning.

[Analyst] (Morgan Stanley): Hi, good morning. This is Madison on for Ravi.

Madison Pasterchick: Hi, good morning. This is Madison on for Ravi.

Speaker #12: Hi, good morning. This is Madison on for Ravi.

Jim Vena: Madison, I like having you on, okay? I can't remember the last time I talked to Ravi. I knew you were going to be on. Thank you very much.

Speaker #8: Madison, I like having you on, okay? I can't remember the last time I talked to Ravi. I knew you were going to be on.

Speaker #8: Thank you very much.

[Analyst] (Morgan Stanley): Thank you. I like talking to you guys, too. I think we're just wondering, how does fuel impact seasonality on numbers in Q3 and Q4, and how we should be thinking about the opportunity on OR?

Madison Pasterchick: Thank you. I like talking to you guys, too. I think we're just wondering, how does fuel impact seasonality on numbers in Q3 and Q4, and how we should be thinking about the opportunity on OR?

Speaker #12: Thank you. I like talking to you guys too. I think we're just wondering how does fuel impact seasonality on numbers in third quarter and fourth quarter and how we should be thinking about kind of like the opportunity on OR.

Speaker #8: Yeah. So in terms of fuel, I mean, it likely will continue to pressure OR. As I mentioned, we're paying a little bit north of $4 a gallon right now.

Jennifer Hamann: Yeah. In terms of fuel, it likely will continue to pressure OR. As I mentioned, we're paying a little bit north of $4 a gallon right now. Even with that, though, we're still very confident that we're going to make margin improvement. We feel like when we look at what we see ahead for ourselves in terms of volume opportunity, in terms of our continued gains from productivity and efficiency, we should be able to overcome the headwinds from the fuel. Who knows exactly how it's going to play out, that's why we just need to be nimble, need to try to become more fuel efficient to the extent that we can. Obviously, we're already more fuel efficient than truck, and that's a benefit to us. More fuel efficient, more emissions friendly. We'll wait and see how that plays out overall.

Speaker #8: Even with that, though, we're still very confident that we're going to make margin improvement. We feel like when we look at what we see ahead for ourselves in terms of volume opportunity, in terms of our continued gains from productivity and efficiency, we should be able to overcome the headwinds from the fuel.

Speaker #8: Who knows exactly how it's going to play out? So that's why we just need to be nimble. We need to try to become more fuel efficient to the extent that we can.

Speaker #8: Obviously, we're already more fuel efficient than truck, and that's a benefit to us. More fuel efficient, more emissions-friendly. But we'll wait and see how that plays out overall.

Speaker #11: What we always worry about is what happens with our customers.

Jim Vena: We always worry about what happens with our customers.

Jennifer Hamann: Oh, yeah, no, true. That's a good point, Jim. I should mention that. The issue with fuel can be what that does to overall price inflation and the consumer, if that stays high enough, long enough, that it starts to reduce demand overall.

Speaker #8: Oh, yeah. No, true. That's a good point, Jim. I should mention that. The issue with fuel can be what that does to overall price inflation and the consumer.

Speaker #8: And if that stays high enough long enough that it starts to reduce demand overall—no, we have not.

Jim Vena: We haven't seen it so far.

Jennifer Hamann: No, we have not.

Speaker #11: But that's always a worry, and that's why I'd rather have fuel prices come down and not gather that extra revenue from fuel, because we're better off having the consumer strong.

Jim Vena: That's always a worry, and that's why I'd rather have fuel prices come down and not gather that extra revenue from fuel, because we're better off having the consumer strong. Kenny, they've been pretty strong right now?

Speaker #11: So, Kenny, they've been pretty strong right now.

Speaker #5: They have.

Kenny Rocker: They have.

Speaker #11: That's a yes or no.

Jim Vena: That's a yes or no.

Kenny Rocker: Yes. That's a strong yes.

Speaker #5: Yeah. That's a strong yes.

Speaker #11: I love it. Good question. Thank you very much. Say hi to Ravi for me.

Jim Vena: I love it.

Kenny Rocker: Yeah.

Jim Vena: Good question. Thank you very much. Say hi to Ravi for me.

Speaker #12: Thank you.

[Analyst] (Morgan Stanley): Thank you.

Madison Pasterchick: Thank you.

Speaker #1: Our next question is from the line of Jeff Kaufman with Citizen Bank. Please proceed with your question.

Operator 2: Our next question's from the line of Craig Kaufman with Vertical Research. Please proceed with your question.

Operator: Our next question's from the line of Craig Kaufman with Vertical Research. Please proceed with your question.

Speaker #8: Morning, Jeff.

Kenny Rocker: Morning, Craig.

Jim Vena: Morning, Craig.

Kenny Rocker: Thank you very--

Jeff Kauffman: Thank you very-- Hey. Good morning, Jim. Congratulations. This is terrific news. I have a question for Kenny. Kenny, the volume environment feels pretty good. Some of this, as you mentioned, is customers can't find truck capacity because of the driver shortage. I think some of this is customers may be diverting because of the pricing and the fuel surcharge situation. One of these is a little stickier with longer-term potential. One of these is a little more temporary. Can you talk about what you feel is just shorter-term customers scrambling to the rails and then beyond intermodal, which is kind of the obvious conversion? What other rail commodities do you think are seeing a benefit from whatever is going on in the trucking industry that's creating this shortage of capacity?

Speaker #2: Thank you very hey, good morning, Jim. Congratulations. Just terrific news. I have a question for Kenny. Kenny, the volume environment feels pretty good. Some of this, as you mentioned, is customers can't find truck capacity because of the driver shortage.

Craig Kaufman: Hey. Good morning, Jim. Congratulations. This is terrific news. I have a question for Kenny. Kenny, the volume environment feels pretty good. Some of this, as you mentioned, is customers can't find truck capacity because of the driver shortage. I think some of this is customers may be diverting because of the pricing and the fuel surcharge situation. One of these is a little stickier with longer-term potential. One of these is a little more temporary. Can you talk about what you feel is just shorter-term customers scrambling to the rails and then beyond intermodal, which is kind of the obvious conversion? What other rail commodities do you think are seeing a benefit from whatever is going on in the trucking industry that's creating this shortage of capacity?

Speaker #2: I think some of this is customers maybe diverting because of the pricing and the fuel surcharge situation. One of these is a little stickier, with longer-term potential.

Speaker #2: One of these is a little more temporary. Can you talk about what you feel is just shorter-term customers scrambling to the rails and then beyond intermodal, which is kind of the obvious conversion, what other rail commodities do you think are seeing a benefit from whatever is going on in the trucking industry that's creating the shortage of capacity?

Speaker #5: Yeah. So one part that you did not mention is the fact that we are winning business. And we are winning over the road business.

Kenny Rocker: One part that you did not mention is the fact that we are winning business, and we are winning over-the-road business, and that's not necessarily tied to one or the other. That's just a strong service product that we have. Yes, as you look at the overall domestic intermodal network, what's helping us out is the fact that we have different levers and optionality for our customers. We've got our Railbox, which we've deployed. For a couple of years now, I've been talking about the number of private asset folks that we have that give our BCOs optionality. With that strong service product, that's how we're going out and winning the business and setting aside where fuel is. Yes, to your point, there are other markets that are very strong for us. You look at what's happening in our petrochemicals market.

Speaker #5: And that's not necessarily tied to one or the other. That's just a strong service product that we have. But yes, as you look at the overall domestic intermodal network, what's helping us out is the fact that we have different levers and optionality for our customers.

Speaker #5: We've got our railbox, which we've deployed. For a couple of years now, I've been talking about the number of private asset folks that we have.

Speaker #5: They give our BCOs optionality. So with that strong service product, that's how we're going out and winning the business. And setting aside where fuel is.

Speaker #5: And yes, to your point, there are other markets that are very strong for us. If you look at what's happening in our petrochemicals market, that's been a strong uptick for us.

Kenny Rocker: That's been a strong uptick for us. We talked about some wins there, That market is also strong and we're moving a lot export. We've invested in the Gulf for our storage and transit network to support that. Same thing with our grain network. We've invested and put in new facilities on the grain network, Eric and his team has shown us that we can flex to different markets. Last year, it was Mexico. This year, it's been the Gulf. Whether it's the PNW, the Gulf, or Mexico, we're able to flex in those markets, wins in automotive. As you look at the overall landscape, coal is still the wild card, I got out of the business of trying to figure out how to forecast coal a while ago.

Speaker #5: We talked about some wins there, but that market is also strong and we're moving a lot export. And we've invested in the Gulf for our storage and transit network to support that.

Speaker #5: Same thing with our grain network. We've invested and put in new facilities on the grain network. And Eric and his team have shown us that we can flex to different markets.

Speaker #5: Last year, it was Mexico. This year has been the Gulf. Whether it's the P&W, the Gulf, or Mexico, we're able to flex in those markets wins in automotive.

Speaker #5: So, as you look at the overall landscape, coal is still the wildcard, and I got out of the business of trying to figure out how to forecast coal a while ago.

Speaker #5: But I'm very bullish on where we sit from a demand standpoint and our ability to win new business.

Kenny Rocker: I'm very bullish on where we sit from a demand and our ability to win new business.

Speaker #1: Perfect. Thank you very much, and thanks for the question. The next question is from Harrison Bauer with Susquehanna.

Jim Vena: Perfect. Thank you very much. Thanks for the question.

Jennifer Hamann: The next question is in the line of Harrison Bauer with Susquehanna.

Operator: The next question is in the line of Harrison Bauer with Susquehanna.

Speaker #8: Harrison, good morning.

Jim Vena: Harrison, good morning.

Harrison Bauer: Great. Morning, Jim and team. Thanks for taking my question. Jumping off Kenny's point on some of the rail assets that you're deploying, can you walk through maybe the thought process, decision, and the opportunity that you have in some of your assets? Are private assets constrained right now? Maybe how does this allow you to accrue more economics, whether through peak season surcharges or into next bid season? Thank you.

Speaker #12: Great. Morning, Jim and team. Thanks for taking my question. Jumping off Kenny's point on some of the rail assets that you're deploying, can you walk through maybe the thought process, decision, and the opportunity that you have in some of your assets?

Speaker #12: Are private assets constrained right now? And then, maybe, how does this allow you to accrue more economics, whether through peak season surcharges or into next bid season?

Speaker #12: Thank you.

Speaker #8: I love the way you asked that. I think you always need to price on what the market provides that you can still move the product and win.

Jim Vena: I love the way you asked that. I think you always need to price on what the market provides that you can still move the product and win. That's the way we look at it. If we can price higher because of it, which we have, we're going to do that. As far as the assets, sure, we went from having a whole bunch of our containers stored to just about all of them out. What we're doing is we're trying to drive more productivity by being able to get the turns on them quicker so we can get more turns on there, and we see some of that. That's what it's all about. We've always liked to have a buffer. Now, we chewed up a big piece of the buffer, we're sitting in a place where I think there's still more growth and we're not going to limit it, of course, we're going to price and be smart about how we price so we can continue to move. Kenny, anything you want to add, or you good?

Speaker #8: So that's the way we look at it. If we can price higher because of it—which we have—then we're going to do that.

Speaker #8: As far as the assets, sure, we went from having a whole bunch of our containers stored to just about all of them out. But what we're doing is we're trying to drive more productivity by being able to get the turns on them quicker so we can get more turns on there, and we see some of that.

Speaker #8: So that's what it's all about. And we've always liked to have a buffer. Now, we chewed up a big piece of the buffer, and we're sitting in a place where I think there's still more growth, and we're not going to limit it.

Jim Vena: Now, we chewed up a big piece of the buffer, we're sitting in a place where I think there's still more growth and we're not going to limit it, of course, we're going to price and be smart about how we price so we can continue to move. Kenny, anything you want to add, or you good?

Speaker #8: But of course, we're going to price—and be smart about how we price—so we can continue to move. Kenny, anything you want to add, or are you good?

Speaker #5: No. And I said this a little bit earlier. The private asset folks, they have ample capacity. With that new business, that's a positive for us.

Kenny Rocker: No. I said this a little bit earlier, the private asset folks, they have ample capacity.

Jim Vena: Perfect.

Kenny Rocker: Accept new business, that's a positive for us. You've seen some of the surcharges that we put in place for a small amount.

Speaker #5: And you've seen some of the surcharges that we put in place for small amount.

Jim Vena: Right on

Speaker #8: Right on.

Kenny Rocker: of the customers. We'll do that if we have to.

Speaker #5: Of the customers will do that if we have to.

Jim Vena: Yeah. People on our railroad have capacity, right?

Speaker #8: Yeah. People on our railroad have capacity, right?

Speaker #5: Right. Yeah.

Kenny Rocker: Absolutely.

Jim Vena: They have extra assets.

Speaker #8: They have extra assets. Good question. Thank you very much. Last one. We're going to do it and get it done.

Kenny Rocker: Yeah.

Jim Vena: Good question. Thank you very much. Last one. We're going to do it and get it done.

Speaker #1: And the last one is from Rico Harnain with Deutsche Bank.

Operator 2: Last one is from Richa Harnaun with Deutsche Bank.

Operator: Last one is from Richa Harnain with Deutsche Bank.

Speaker #8: Good morning.

Jim Vena: Good morning.

Speaker #12: Wow, good morning. Honored to be the last question—thanks for squeezing me in. I just wanted to clarify, maybe by piggybacking off that last point.

Richa Harnaun: Good morning. Honored to be the last question. Thanks for squeezing me in. I just wanted to clarify, maybe piggybacking off that last point, and maybe drilling down more into the intermodal commercial strategies. I'm curious how you're partnering with other IMCs, and even though you just said your private assets have capacity, but are other IMCs you work with private assets struggling with drayage drivers? We've heard that's a concern that's been popping up over the last couple of months, and how the strategy has changed and is influencing your ability to address the strong demand. We've also been hearing transcon intermodal trends are pretty competitive. It sounds like you're doing a good job getting price. Just curious if you square all of that. Thank you.

Richa Harnain: Good morning. Honored to be the last question. Thanks for squeezing me in. I just wanted to clarify, maybe piggybacking off that last point, and maybe drilling down more into the intermodal commercial strategies. I'm curious how you're partnering with other IMCs, and even though you just said your private assets have capacity, but are other IMCs you work with private assets struggling with drayage drivers? We've heard that's a concern that's been popping up over the last couple of months, and how the strategy has changed and is influencing your ability to address the strong demand. We've also been hearing transcon intermodal trends are pretty competitive. It sounds like you're doing a good job getting price. Just curious if you square all of that. Thank you.

Speaker #12: And maybe drilling down more into the intermodal commercial strategy. I'm curious how you're partnering with other IMCs and you just said your private assets have capacity, but are other IMCs you work with private asset struggling with drayage drivers?

Speaker #12: We've heard that's a concern that's been popping up over the last couple of months, and how the strategy has changed and is influencing your ability to address the strong demand.

Speaker #12: We've also been hearing that transcon intermodal trends are pretty competitive. But it sounds like you're doing a good job getting price. Just curious if you can square all of that.

Speaker #12: Thank you.

Speaker #8: Okay. So listen, I think it's a two-parter. One thing about this team here is operations and marketing work close every day to figure out exactly the question that you're asking.

Jim Vena: Listen, I think it's a two-parter. One thing about this team here is operations and marketing work close every day to figure out exactly the question that you're asking. How do we do this, and how do we make things more efficient so we can get the asset turns quicker so that we can use less assets and use that 20-plus % capacity buffer we have on our railroad to be able to run it faster? Don't kid yourself, Jennifer's in there like a dirty shirt, pushing these guys around to make sure that they're spending money the right way and the capital. I'm going to let the team talk about this. It's the last question, but you guys don't go on for 10 freaking minutes because we need to let NS on, okay? Away you go. Do whatever you want.

Speaker #8: How do we do this, and how do we make things more efficient so we can get the asset turns quicker, so that we can use fewer assets and utilize that 20-plus percent capacity buffer we have on our railroad to be able to run it faster? And don't kid yourself, Jennifer's in there like a dirty shirt, pushing these guys around to make sure that they're spending money the right way and the capital.

Speaker #8: So I'm going to let the team talk about this. It's the last question. But you guys don't go on for 10 freaking minutes because we need to let NS on, okay?

Speaker #8: So away you go. Whatever you want.

Kenny Rocker: Let me make this clear because that's a great question. We're very judicious about how we supplement our capital and our containers out to the IMCs. We're crystal clear on the ones that have higher dwell versus the ones that have lower dwell, and we're not afraid to have difficult conversations with them about it. If you're sitting on our box a long time, that's a problem, and we're going to address it with you.

Speaker #5: Let me make this clearer, because that's a great question. We're very judicious about how we supplement our capital and our containers out to the IMCs.

Speaker #5: We're crystal clear on the ones that have higher dwell versus the ones that have lower dwell, and we're not afraid to have difficult conversations with them about it.

Speaker #5: So if you're sitting on our box a long time, that's a problem. And we're going to address it with you.

Speaker #8: You don't want to say anything, Eric?

Jim Vena: You don't want to say anything, Eric?

Speaker #4: I think Kenny did a great job explaining exactly how we think about it.

Eric Gehringer: I think Kenny did a great job explaining exactly how we think about it.

Jim Vena: Well, let me tell you for you. Bottom line is who we are, and this is culturally, and it's not just Eric and I, okay? Eric's a real smart guy. He's well-educated, but I'm telling you, he's a railroader. Probably five or six years ago, I would've said he was an engineer or in the engineering department. Now he's a railroader. What we do and what he's led the team and the people, the culture that we've developed from the frontline people, they're not afraid to make a mistake. We want them to push. We want them to look at what's possible, and we want to make sure we move ahead. That's who we are. When we do that, because you can't operate a railroad that's spread out across the entire country and think you're going to make every decision from Omaha, you have to make it locally.

Speaker #8: Well, let me say, the bottom line is who we are—and this is culturally. And it's not just Eric and I, okay? Eric's a real smart guy.

Speaker #8: Okay? He's well-educated, but I'm telling you, he's a railroader. Probably five or six years ago, I would have said he was an engineer or in the engineering department.

Speaker #8: Now he's a railroader. And what we do and what he's led the team and the people, the culture that we've developed from the frontline people, they're not afraid to make a mistake.

Speaker #8: We want them to push. We want them to look at what's possible, and we want to make sure we move ahead. That's who we are.

Jim Vena: That's who we are. When we do that, because you can't operate a railroad that's spread out across the entire country and think you're going to make every decision from Omaha, you have to make it locally. I love where we are. We're clear on what we have to do. If we need to speed up something, we react quick, we decide how we're going to do that, we measure the heck out of it, and we move ahead. Listen, that's where we are. Jennifer, anything before we tie her up?

Speaker #8: And when we do that—because you can't operate a railroad that's spread out across the entire country and think you're going to make every decision from Omaha—you have to make it locally.

Speaker #8: So I love where we are. We're clear on what we have to do. If we need to speed up something, we react quickly. We decide how we're going to do that.

Jim Vena: I love where we are. We're clear on what we have to do. If we need to speed up something, we react quick, we decide how we're going to do that, we measure the heck out of it, and we move ahead. Listen, that's where we are. Jennifer, anything before we tie her up?

Speaker #8: We measure the heck out of it and we move ahead. So listen, that's where we are. Jennifer, anything before we tie her up?

Speaker #12: Yeah. The only thing I'll say is I think you slid something in there at the end of your question about Transcontinental pricing, Transcontinental margins.

Jennifer Hamann: Yeah. The only thing I'll say is, I think you slid something in there at the end of your question about transcontinental pricing, transcontinental margins. Again, we have surcharges out earlier than normal on our assets. We see very strong demand, and we're providing a great service product. We are competing in a market that is strengthening, and we're not putting discounts into that marketplace.

Speaker #12: Again, we have surcharges out earlier than normal on our private on our assets. We see very strong demand and we're providing a great service product.

Speaker #12: So, we are competing in a market that is strengthening, and we're not putting discounts into that marketplace.

Speaker #8: Well, listen, that was the last question. So why don't we just tie it up real quick? Going to look forward to having another discussion here in a few months.

Jim Vena: Well, listen, that was the last question. Why don't we just tie it up real quick? We're going to look forward to having another discussion here in a few months. We don't look backwards, okay? It's done. We're delivering for this next quarter and seeing what we can do to get this merger approved quicker than slower because we think it's a benefit. We want to move ahead and return for our shareholders a high return like we talked about, where the EPS is going to be a high single digit. I'm excited about where we are, what we're doing, and blessed to have a team that makes my life easy. I get up in the morning and sometimes I wonder what I'm going to do. Everyone, have a great day. Thank you very much.

Speaker #8: And we don't look backwards. Okay? It's done. So we're delivering for this next quarter and seeing what we can do to get this merger approved, quicker than slower.

Speaker #8: Because we think it's a benefit. We want to move ahead. And return for our shareholders a high return like we talked about where the EPS is going to be high single digit.

Speaker #8: So I'm excited about what where we are, what we're doing, and blessed to have a team that makes my life easy. I get up in the morning and sometimes I wonder what I'm going to do.

Speaker #8: Everyone, have a great day. Thank you very much.

Operator 2: Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation. Have a wonderful day.

Operator: Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation. Have a wonderful day.

Q2 2026 Union Pacific Corp Earnings Call

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