Canadian National Railway (CNI) 27 Apr 222022 Q1 Earnings call transcript

Good afternoon. My name is Donna, and I will be your operator today. Welcome to CN's First Quarter 2022 Financial and Operating Results Conference Call. [Operator Instructions]. I would now like to turn the call over to Paul Butcher, Vice President, Investor Relations. Mr. gentlemen, and Ladies Butcher.

and XXXX for Conference Financial everybody, CN's Call. us First Quarter and thank afternoon, joining you for Good Operating Results

to beginning of Now draw presentation. additional I'd begin, the information the attention legal the before and forward-looking at like available statements I your to

more to statements Canadian risks reminder, a results securities in expressed cause statements statement subject to forward-looking law. we will uncertainties those yourself question. call meaning that of actual The our will projections the in available in follow-up you and contains are do These materially fully remarks, As Q&A to presentation. the X certain the and or questions. may after a statements conference these other remind described today's limit from within I differ U.S. session. our and regarding are forward-looking be implied and call please team conduct prepared IR for want cautionary After any the to statements to

today CN's Officer; Joining Marketing CEO; now to Executive Officer; call Chief us our It on the Financial our Doug Tracy MacDonald, Officer. Chief to Chief turn are Tracy Reilly, Chief pleasure our Rob over is our Ghislain Operating President Houle, and and and my President Robinson, Officer, the call Robinson.

and We're especially future. about and chair group of with today. industry outstanding I'm you sitting and let Thank working me be I here be in CN hard excited start be good this at now Paul, afternoon. And an in honored excited you, to by railroaders. saying the alongside am how to back this to

million being these this by acknowledge as find months. cause. their moment proud over all of last money $X the CNers way towards want war. the a I'm the And people take difficult my support start displayed we to Ukraine has help. important of own want to to I a We to donated X of $XXX,XXX just faced so challenges in than of very Ukrainians by more fellow donated CN who Now

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days excited continent XX and base incredible an customer we that, tell network, I'm I prospects sectors. of opportunities of that you across all best most about tri-coastal in, pipeline here, I growth So geographies the CN, have more diverse the I commodities with when sit as on across At arrived. than the a the benefit of first our can with and

growth. us the financial in sheet, We have driving our to and a ability healthy be balance nimble with provides flexibility

right proud this our committed And team, in a treasure, team sustainability everything these here have times and is we value. volatility. of rates is especially railroaders journey. deeply a is safety of a we right core rising possible. market team and And as as spot with the interest this We're to the continue Now in

Now go we forward, would the we number fully we're network us. doing. And acknowledge our that what of haven't that performed of as is behind last capabilities capable we here's to what know And all all we over years. this delivering. We're putting

running focus on deliver us to get railway laser velocity. to scheduled customers assets. the out to with we're This First, a help most our a of and our consistently will more

we our business leverage of will Second, fit and strengths. curate better our to book network our

be we to this our can ensure we'll how means that strategic use that for capacity deliver future effectively not the that yesterday. position about Now we we ourselves more and

in Third, both into we to we invest much basis way the we future. more fourth, integrated long us for way for operate to this sell. and the growth. the we're going to Between a term top And do drive in where term capabilities the grow. line to our to line position near the network is invest all what drive and in the bottom and work efficiency and between growth way And our the continue we and will our we'll

this to to undertaking commitment all back effort focus. daily That's is we our but Now goal best-in-class. full going as and does, my will strategic overnight. not being team, have a bring company happen you important this with No that our

definitive. in know you're our a lot we through a as advance position and our And those that details want work now. I We're more I'll become going Now on to more to plans plans. more working our be share

So that. stay tuned on

and of let cash our And This expect suggest about year disruptions a demand environment for global impacted uncertainty since starts operating Canada our war good and on operating mid-March this China a in strong by disruptions I the with caution will on billion growth just fully $X.X EPS notwithstanding little the the QX. billion. in Western have I'm pandemic this to bit time the encouraged in the expect say CN, full XX% supply flow the the a $X and X. The in year. a XX%. be year all operating capitalize things for that the first from I'll guidance We've note, a ratio updated our just weather, year. Ukraine and to environment. ability through our Harsh chain few Now mostly free be elsewhere, delivered continuing in me in ratio since year. to range range be a April. the will And of we've to momentum that XXXX. to we of full financial --

crop in and We strong. how without volumes situation and normal Demand fall the velocity continues a even that is more are We're shutdowns and the we could impact to grain in moving heavier continue improving. China and our to grain normal monitor and the be flow. consistency this expecting trade Europe

customers working prepare is ensure and demand team with their needs. that that can understand we we to our Our for closely

need year. to latter will people particular, and to running to power the expect of into a challenge We we busy year. to have a is look respond in we in as parts the trades, be Recruiting certain of part the network resources, right the what

So but confident to the that the it's lies a ahead I for tough future we start both to excited CN. deliver will and year, outlook. this about am financial

also have to discuss with to of So both going our new Marketing I'm Officer. and know. I turn Chief you today, to whom me, it Doug Rob here have I the the here Ghislain team quarter.

and like. of integrated Senior in our our operations to was immediate he and VP bring where of but our markets organization. as with in privilege the Days Technology. plan of had to I'm meeting execution. over in he Information Division VP you. a wealth knows Investor sales and brings he IT, Ghislain Doug looking where to served years He also to work have focus Eastern you of of experience many the over Rob, our and and during to and the closely a Now knows He Doug marketing Rob and

the February. portions of network. season, Tier days railroaders to a get and Thanks, where nearly us of our reminder, through when helped very conditions right. locomotives crews and tough for cold X very conditions us of who All we size, in dedicated And X a thanks use XX% are Tracy. forces first, the through winter which able as more and Tier minus in And saw be and degrees January place CN operating team overall, the XX Celsius freight reduce less train move colder, to is to

to February, our month in able the network the of weather fluidity With were end moderating on the at March. of we regain

XX%, January supply lows, with our core metrics our working and X% up that customers velocity continuing our us We with our up of daily in to more are running and in GTMs particularly back face to our railroad. challenges, the all the March a speed from train to closely length get chain XX%, to train rebound continue are XX% We April saw scheduled sector. in merchandise allowing car up up improve

while our the accommodate in year, we have of forward reduce a value railroaders to frequency ratio And reinforcing safety of degradation second place the look Doug. that extreme to with we to the at reduction is contributed year-over-year, XX% growth in continued the to With As the weather it accident are the expected conditions of ratio, over in CN. team year. finally, I'll the core half to our our turn that, resources working in an remainder QX injury

Rob. you, Thank

opportunity marketing start the to excited sales our delivering Let industry the organization, am with saying the leading customers. I network the of and in and me by leveraging how value best

as drop being billion said, and a experience that shipments you X strong, conditions X%. January drilling exports, sand The coal where Gulf grain petroleum chain our despite Canadian from well performance were demand, the around is business on in Canada remains crop. to the and driven Let come RTM in U.S. frac top weaker solid in basis a Teck did shipments Coast as strong. quarter. not by Rob but unique markets. February, in new grain on continued line down an from late supply was reach as up XXXX. into volume volume Broad-based extreme coal mines which and significant me challenges Canadian growth the from for higher certain reopened winter We increases provide activity Western products update mostly to our $X.X Revenues an volumes with just in X% did

we out of be year, the look broad-based up for with in most volumes segments. As we balance XXXX low expecting the growth for to still range are single-digit the across

We are fall. crop starting normalized assuming the grain a in Canadian

customers me service drive the is growth following. environment and current our demand and bottom focus improve this conclude our to to is fluidity, our line. to improved with The network the strong, Let with

and Our that on pricing Rob's backed are we I'll With so yield management Ghislain. strategy that, service operating by recovery. the during pass it deliver to required aligned very our ongoing closely working customers broad-based fully environment. with solid the a to is team is I'm for

more talk performance. presentation of Page I the visibility will and to on provide XX first quarter our

in top X%. a we despite solid being RTMs performance Doug line down experienced mentioned, As volume terms of

very with quarter to winter continued ability the harsh Our the impacted strong demand was challenges. chain conditions move and in supply

addition, earnings growth short geopolitical share pressure have fuel headwinds, risk significant over on in our team prices of per delivered year-over-year. put adjusted In the these Despite term. X% railroaders

with more name exclude Let cost referred a just me The reflect details the on headwinds to condition provide advisory deadheads recrews, shareholder to few. the of my the which I you and to cost network related impacted as results fluidity more leading snow comments quarter. to as matters. adjusted such would clearing

We continues took was year. nonoperating to that headcount fall the from in as QX headcount X% last versus down place last average benefit reduction

saw versus spiking with around a diesel Our March, XX% XX% we in fuel XXX February. prices expense the fuel quarter on-highway up was up USD rising prices in significantly and as barrel touching WTI up

year. program surcharge price $X.XX of We quarter, the like it deals some but the fuel fuel this, noise surcharge have in we lag term. an create with impacted EPS unfavorable In with of short efficient that does fluctuations last fuel versus were

at nearly in reflecting million delivered versus of operating same diluted last which basis in income Our net from noncore QX of -- an ratio mainly year. of year free net lower XX.X%, the was on increase points headwinds We just than last adjusted cash highlighted. adjusted $X.XX, and QX adjusted and generated was EPS higher $XX proceeds of year. million year was operating million $XX flow I came X% the XX period last up We activities. branch last from offset by the lines, million for partly up which $XXX from The cash from sale the quarter, $XXX

in we saw we early quarter, in shares QX. of as that value a in prices the dollar at cost approach excess During repurchased clearly prevail averaging repurchasing simple

crop. the of latter a manner a April. have provides solid continuing our and the will is Canadian balance strong, reiterate fluidity remains long-term us Network value In that a volume grain should normalized balance current conclusion, points. financial of the We which and allocate growth let translate a we in in drives improve flexibility, me few our in year, definitely shareholders. for including demand to strong in March capital part started sheet environment that The for

uncertainty have With We are growth will on closely continued team the full in our inflationary the deliver adjusted XXXX. world. outlook, that versus to monitoring financial EPS XX% confidence XX% diluted pressures XXXX in with the that, including I a

We network industry, have in know the the best we this and network produce. can what

Tracy it for Let some comments. to back me pass closing

let Thanks, potential. building that again by with Ghislain. the This about the I'm a close and me railroad company is saying century. And of great excited XXst significant energized

focus networks run this experienced to generation on network in to our team We're growth a our exceptional capacity pipeline Our driving unleashing long the next delivering as railroad this customers. of to on for long-term bottom develop our is of sustainable accommodate of talent profitable our going railroaders growth scheduled focusing for of opportunities. to we'll in and and on the invest and capabilities the invest line And we the our railroaders. focus term

goal long-term deliver our of So value stakeholders. will our all for

We are best business. the the in

to here take your we're pause Now questions. and happy

Thank you.

We now begin question-and-answer will session. the

line from first Jonathan from ISI. the Chappell of Your comes question Evercore

out you're days know in, I and already. some XX of your ambitions you've laid Tracy, only

spread into started. did before You corporate plan step big X a you just wide adopted just pretty strategic months

of the of based I'm of strategic whether focused market you're that today. in think adjusting some resource that of or any the So you need plan the that initiatives. wondering Are that's headwinds the given the uncontrollable September just element some growth it, there areas seeing

network prepost relationships, here. strong great coast, that's There's carload customer great franchises, each on excellent bulk, strong great lot team. growth strong prospects [Indiscernible] optionality and intermodal a really

to the on directly way that's in take So do that business as line. need I just but is look to -- lean the that the at refocusing we it, on what bottom we it

in this was laid and there's about chasing It's going team -- time question. a bit get as that's integrated say, to out to but I'm we XX more I'm it. of that in up Thanks for from September, organized, of optimistic. the all as excited us much this work set take doubt a So to no manner, of what all days in, you get been

comes from of question line Konark next from Your the Gupta Scotiabank.

a Doug Congratulations here. new on role

regulators to in have railroads understand, ratio. terms away is and on and STB, on Class U.S. right I track? just You given back in to regarding to about and the deliverables basically, done stakeholders, operations the to now get performance mentioned reviewing obviously, what's meeting needs going focus talking on of X et customers, the their there from operating take some, I cetera. in shareholders we maybe What's the wanted with your U.S. what your and be think biggest

customers, service day thing It's we our we're and that Listen, that. Yes. most to question. focused an important every sure interesting do provide all all is we the the we've make on committed that

challenges that. make I'm well. in each are industry one going us in And been a specific operation rhythm X.X the and very working chains and there's to will our back different of customers hard years, we're ask our comments some the to around Rob? big of serve back the years, the supply chains, to Now on place some shock Rob And our the to get in X supply and U.S., last in the taking that proceedings have

to of intermodal a support track Yes. there. we're service provide our do particularly in in and investment Konark, we STB, that record space we also the and with any that. help certainly and the understand the customers CN, may working especially very growth, the the solutions At on concerns terms strong to arise. with of have issue STB potential

So and working stay tomorrow for big forward the customers we part there to we're continue STB. what case, are going question. the this do, partnered with to discussion. them Thanks the of to in and and the a with be look regulator I'll

of America. comes Your question Hoexter of Ken from from Bank next the line

get into I question clarification a Just before mind.

I you're -- it an 'XX. an crop. fine forecasting XXXX an the said above for your in Just call, for times I'm on says looking average sorry, And X average think crop on assumptions, print above now 'XX, I you you're think the

clarify So on question focusing Tracy, wanted talking the just years. But been to the that. my about is, right freight I has for company

understand freight. Just right? about what of freight, talk wrong just changed you is to on it base -- the mispricing to business? -- talked thematic Is want maybe of the just So your is what needs it with about be

to the it's thing your By important Ken. good voice the And again. way, -- thanks, hear

when on because The thing you delivering to traffic, understand to capabilities what of take we the it. important what network have on put is that being about are capability we we about think need intentional we our our

capacity So part what capable plan once that customers. and do first that capability look capacity we operating our into is what front that, consistently delivering pipeline understand understanding then of that. lift us. committed we're head and that we opportunities we of that sell we'll there, our a growth we'll what at our of that's From our of so great selling into we've our only of this take really and then in and is is to And our

as to I'm -- about way go. the question I'm assumption. So around going ask that's comment Doug on grain that's crop that the first your thinking to we

clarify. to just Ken,

the So always years. a the we're prior of about X industry talking X-year more is talks normalized. That a doing be What average. would we're

the year eliminated year. we've last So drought

have Canadian crop. just realistic all. view a we normal a more That's So of

and Okay. Don, Tracy, new welcome luck. congrats job good and the on

much. so Thanks

JPMorgan. Ossenbeck comes question from next Your the Brian of line from

towing still on follow-up past? the the of investment can the how mentioned you that proponents big in just and to the the a from measure DSR has you the clearly the on XX path and clarify, Tracy, one internally just are probably a if railroad little going you then past, team application but early, client of technology been along technology event, a view

could Listen, but second about technology, your if first I what the repeat wonder the I was question. first part piece? of your caught Brian. first -- you part your

I'm sorry.

You growth? Is How would warrant about mentioned class. being talking a you that? being that about on what's best-in-class, EPS best in perspective, that measure returning

I was not chasing it ratio else to think delivers what we're this that the It's order doing. tight, or one network team quickly, setting pace going and to I to what our need and be Well is growth, able and everybody listen, grow, moves all we the customers, efficient and that capacity, to was need CN effectively that's this is when of left our we of know we're matter In both. this industry, capable a that operating it and a is it's -- at operation get going was you where to grow. real

-- of company to how capabilities the it regard thinking industry. one front. lot got is and excited some It's yet, into to that a it's I've the really This knows back on So I bear. there's this come technology, but know can into muscle I'm it is deeply company that got that haven't new going that about right, into a new I has the have matter it, both. stepping with here, the something that changes memory of them. in of brought seen exciting a of that and With you're I see lot to to do that been say

for about it that I'm to Thanks into the I sit so question. it As excited but got deeply days the yet, in. has here XX potential haven't much I offer.

from of comes Cherilyn question line next Radbourne TD from the Your Securities.

another got I've one Tracy, for you.

of hoping curate could I you and attractive in do still relative the intermodal terms your you on how of that the bit appreciate opportunity a how the do I of to objective of view of us book on business, that growth capital? give was early, it's see opportunity but perspective return to terms scale you In

future. think pipeline our and is all really us, I Cherilyn. network for of of an Intermodal differently. important opportunities, our the Thanks, a now we've they'll it it strong part of growth different is and book. got be question And in parts call upon will The

So it's a answer. single not

you the to network deliver As do effectively. can it's be velocity, get that you volume so being some on that intentional the that right can you the parts about capital at right the putting this, of with we And we like that on then can our look you you to invest. tend about and going do when that returns

where into earlier, excited I work I'm prospects So end about here. we're that tell going it's I getting to But now. as exactly can't up. you the said

question next of from Your comes Chris Wetherbee Citi. from the line

about a think, every the I potentially growth? a understand leading to Tracy, the I could maybe but company you railroad. far your revisiting the job PSR as answer and apologize, least as who interested call, was first little give obviously, goal, being earlier your that you hoping at so question who was it a maybe about CEO, perspective us be relative balancing as kind is I had I path the versus on your different get to the where the company a to in point up muffled one think it's could ratio the the should named had what are there of of at But to with in profitable that operating before. taking different to ultimately strategy path you for know sense, discussions relative PSR been opinions the I wanted folks or

I So operating growth. things relative I when volume the you sure think to like the you to line perspective the about understand table really top make want to bring ratio balancing to

slower if was sorry muffled, the previous And one a time. go this little I'll

focus velocity. has able tight, on into the stakes think, more focusing industry allow game is to able do XX to where this it's thing And going the to clearly a to efficient our that very to do available I going customers. on to changed capacity be by to our now in That, table operations. As that's the and us us going and kind balanced, deliver to of going to going to I come consistently It's now allow allow years. us a scheduled us get XX, decide to -- is model to to with It's a last It's things. we're a operation over a see that. to sell to assets, out our and how be allow most few operate of

my in both. need you So mind,

You that And a and by growth. I growth, do going order tight, generate the to bottom move is the it way from focus made line. to that We're approach, going have efficient that top we're we're well, you fall need a on interesting that to find be our top line is way leaning line operation only growth your to going if assets line to in can top the scheduled into to the velocity. intentional you. business. Thank hope about sense. our The

question next from Deutsche Mehrotra the Your line of comes from Amit Bank.

philosophy the on your appointment. accomplish. congratulations business, around a understand trying what a needs hearty to I'm running railroad Tracy, to

we so if the open-ended understand if years understand leave that to point, if ask what fast to And we it I but X you to to be now, outcome specific back, want to outcome X a X forward are from can you gauge would I X you years. you? would your over And be to is successful the next so question could want I how can look successful to somewhat a philosophy, because for going

question, Amit. Thanks for the

XX days in. with look, So

talking about exactly on years we driving So let value. sustainable we're for say X the will what now, done now. from have to focus is this today, me long-term X what

our opportunities and we're And to what drive to We're share as to work a to And our quickly. happy our our doing to network. I is going then as and line line. into going operation, we're the this look our very get a us. in way right the and be to place. bottom on we We're move now. scheduling And give it at we're top lot on specifics and assets the a heads lift details crystallize So healthy going said, do we're pipeline sell going to going little all plans that growth growth for interesting more we'll of our velocity

the the not yardstick a operating C&I margins successful been and which it the above? message of mutually last have it cost all in business, ratio which is fixed And the impressive. through is Is that for what in railroads But many of are exclusive, growth quarters. efficiency Because an is growth? Is operating been has gauge is ratio?

OR or So philosophy best opportunity its velocity in network you want understand and that's Is around to to opportunity with an C&I that industry. just its be that see your railroad a X years, having for in the X potential there I you successful -- outcome? to an is important with the as

metrics we'll if the way we line. I'm we're to looking going margins. plan think our going looking we forward, I be to But growth at set compliance get looking We'll be look We'll Well, -- long-term once measure success that, at be to at the at looking bottom growth, as velocity. plan. do we'll be up, looking around at to go and as about it's be going the that be at we we'll

important. very allows you in what and we it yes, The operating ratio a think is grow. of and capable of is So this effective this a operation driving I know operating gift which ratio that on network is front. all manner tight team a to good And

the capitalize I growth way think can you this. and growth the about that to And that's drive So opportunities the on line. bottom

Your of next question comes Walter Markets. line from from the Spracklin Capital RBC

Just types guess, to thoughts kind previously your And of a noncore the could are some Do highlighted shed? similar noncore other to any divestiture a see that opportunities strategic of a enabler through you'd look I'm or is those. as there you and view business direction growth have just question that this items that on of of going the operations. on, trucking you I trucking been noncore referring forward?

to want those. There's Walter, now, in of bottom to And some change ensuring no making in goes sure our network in can say I what We're to be am those direction line business. all that the on should our we options. continue we're past those of discussion part to this around there an pieces most and It's with for evaluating what on top question. interesting the that is that focused been effective I has line aware at that going network, I got do point. way. we've our the evaluate right business

in our we laid months what what these our pieces I've heads growth priorities look lift through ensure start that So to as want few make, looking we choices a going out that are. and we're first at all I to of at But lens. here longer-term and

great great But over into in a growth ones this factor and term. tell can't advantage set this. getting choices, the some I yet of strong them which opportunities. We pretty think long excited have I'm about network I of you got and we've will

And those on divestitures? your include predicated current any not forecast are

That's pause take right. but that can quick to comment on so to Ghis going as I I with just team a them, decision that the to on well. a ask make just want I'm

Yes, would still said, going reviewing. reorganize Walter. the she's we We're to we Tracy tuned this TransX as And to we're that still publicly stay right. said. we That's review may assuming on table. that's but what do, I as us. with And decide with

comes David Bernstein. from from Vernon next Your line question of the

about year up to at sort guidance. singles, think or mid- How the the sensitized RTM first growth fine low to anyway. what X I as of Rupert. of from against adding of you look intermodal build? of you kind Rupert. with guidance think high much kind looking RTM the that stick are and just the singles in kind this I a that this some next the second of to and China helpful. How back happen would in half for it good coal takes could year's and OTM have of 'XX, the of implies takes quarters for expansion When we the and to you quarter 'XX puts about take the of a 'XX the guide puts Ghislain annualization want they a on of So the on sort feeling of be performance at you result growth as And Not and print, expecting and are lockdowns look

we an of that over in to consideration to Doug I of one, important on a XX% us then put outlook we of goals growth level we've on kind really year. that this kind said, Ghis. perspective. the to year, that going assuming it of EPS as -- to of the range into our all just as going I'm in crop say hand grain it to the as takes That's achieving and crafted normalized would from updated XX% on the be are that jump I'll

We forward, very we'll in normalizing, kind places are closely risk. -- But we'll is other pandemic. XXXX, it truth think. as goes things that's Ghis? around on look what's a and some as it that we going into of I the watching China watch And and see and

as talked quite make this demand this think currently, mentioned is we think quarter. I strong. at we I But point, sometimes, being as can change And see But fourth demand on said, Rob that in his actually, sure the in remarks, know, hiring. we're customer Doug see this we're very, doing we And the about quickly. being you this And can service deliver as to strong. Yes. what you that very good

on there hands are hire. are all locations and was hiring to some are deck, harder we Canada especially that in So Western

monitoring global comfortable So we're because are demand But this about things point, environment at EPS quite bullish we this XX% very change. quite are this we're at but closely volatile and the guidance. being and strong, to XX% quite we point, the things see

Research. from from of comes the question next Scott line Your Group Wolfe

in So that you start? year? guidance lowest the there's volume the the perspective the does that there. Is in something sheet, think then Is And have on the balance ratios when potential Or intentional to you that that is important your with idea business, for Tracy, reflected do being maybe, guys industry. of leverage that the maintain? the

I'll I'll over then hand start, and Ghis. to this

one of So assumptions. look volume I'll year, a this it guidance Doug at what well, in we around to but moment, a Demand strong. over our as talked hand kind incorporates about that to perspective, from our you maybe is of all we've

I Now we'll capital On the us. fact balance I got like strong we've it where that, that allocation, flexibility and really the that goes. a see think gives sheet

our done sheet. distributions we'll capital we always we the and our as priority, we've in maintain things, prioritize prioritize the strong going -- allocation, past. want long-term to of about consider will to first think But be incremental and we'll those balance lens through after business, look it As the shareholder we building we always at value,

we about to higher the Doug. period maybe think balance I into think strong right inflation. now as first But a advantages an a of interesting it's go like time ours and of Ghis sheet then

think you've No, I Tracy. covered well, it

use balance basis, We is do business. towards leverage. We debate this -- cash our a same, and I it's on remains the think do of quasi-regular that. the that the sheet is -- first the of the use

committed buyback this billion. $X our for that share we're I think to do of year,

And is shareholder to that the use we end key I on I that executing balance long-term sheet that started think that at day, value. Tracy, February. think the I of point, think your create the to the since to

focused key, I the that's that's and we're what Doug? on. think

just our And all -- Thanks, business. of contain the our current to does plan Ghis. highlight

also great. a It's pipeline to there it. It's it's What the in plan. baked other believe have So into opportunities. there. strong fully We have. is very in we It's of

have we look we network to -- we move at we're the business. curating all how And about look and book into talking when that's it do So fits those, at of when that. our what

be We we and move how team can what fits it. to and in operating our that very when and environment have we move selective Rob's with can on

we're that hit be we're So confident going to all numbers. those able to pretty

thing about Just in if I can clarify the investing one business.

period a guys on long had spending over of You revenue XX% of CapEx.

trends closer on I to that Any the thoughts it future? think this year was in XX%. where

Yes.

on XX%, Scott. still we're think I

right down shareholder there's the get create. want to like we because project turn if will long-term the we it when we're got again, basis. to that good mean, for this a do we'll to think a assured just regular investments just our not on I a reassess rest great thing the I do value And that that number. going that's return,

would So at tell you I in point, I this still revenue think XX% of that the we're range.

comes from next the James. your line Raymond of from Steve Hansen And question

you're Just and question reliability starting improvements on see. the fluidity that to a service

think of industries. constraints all a for there's I specific been we number understand

you recently and the broader fluidity think and to that that both historically across it so platform. North American customer fertilizers come and mind to Forestry service But known you well get how had back for. takes do long

Appreciate is it. Steve. Rob. for question, This Yes. the Thanks

we flooding. for of in to room our itself, product of that we're Doesn't will Columbia really Thanks, actually, customers. seeing And on like our focus Steve. out our improvements. we're rebounded nicely. quite forward. And fluidity, my and through had a continue going BC railroad, just they we've British said with our really in and them to metrics customers. February, customers. I recognized where weather some terms from and standpoint, at We right January be fluid the our where And mean with always But In continued impacts forest very there's that back focused to particularly you're were work comments, impacts pre on the with railroad now service

comes question next the Tom from of from Your line Wadewitz UBS.

wanted of X- your things be some develop bit to XX little that, could Tracy the be and to things really think book, X-year Tracy, drive improvement. that to quickly, that, in talking yes, better. -- trying on like get I emphasizing that well. what kind that you of from of I you the type quicker. are network of But can schedule, about X it changed reworking drive guess, -- could more like -- this the kind mind both an a of fairly guess schedule, makes Yes. velocity. Obviously, I perspective sidings, can months me what you improvement to think change a the to and some there network in if Doug, running maybe expand I terms or intuition you're if play is sense that or But of for you intuition as to have we're what's congratulations really I'm a you change operating

have know you intuit. don't if I So

time insight can and some you're lend about talking the frame what what you is. If on

Thanks, Tom.

has a working done last right winter. job some the over and team in through a pretty Corridor significant into X the of difficult disruptions this Western service So fantastic fall months last very

I Rob our at we've whether to some opportunity opportunity the business As into regained a as our and we're that So some gives moving it's into balance. says, balance operation, we've building near-term plan led we it operational and an think got right? us that then balanced selling about as fluidity, think look to

to and Rob, We're term. done now. longer-term to don't work right could near some anything be to that? hit. effort what velocity balance that and volume But add the to find heavy summer be going it's that growth. right a between fall want be going we to I sweet a you spot what there'll this know, if very before overall, can So get on See

from preparing has of year us nicely No, I the this look and second quite hit opportunity is think of for volume the January terms the ahead to of half The the we railroad you it. in growth. and in And challenges forward recovered February.

changing are see some of months terms over quick in of Okay. some things But that you of think there operations we'd of and the couple kind that. schedule a

Okay.

of And your Stephens. line next from comes Long from the Justin question

and ask in faced remaining then you issues other versus was first some fuel on for I to change of is EPS to the the of much the much quarter quarters? supply I you the the outlook guidance. How a the wondering in function from the of XXXX a unpack chain was guidance about trend versus wanted sub-XX. events if X there And the of weather outlook specifically the How the could OR, XX that and in items? change

Yes.

question. for thanks the Justin,

our So OR, going a in XX.X% obviously, sure. delivered XX%, you the to the the at mean, the and a has in And I growth impact when OR at then first we you we quarter and to of XX% QX. when from had that now an look obviously, X% guidance XX% for look

demand news good is we've the think obviously, said. I into that as very So played this The strong, is, it.

favorable. I think environment the pricing is

getting back OR And April. and without. part think can the on latter of in Rob's in that and terms I I see that we're to in clearly fuel we with uncouple we're think of to then not fluidity and our cadence point, our network March going and

we full included think a it fuel on of I at first negative do It's to in an XX assumption consume And a effective USD and for create OR I between in it an it's barrel. create quarter. XXX USD in fuel. did provide EPS day, that have a and $X.XX we have do that program. the the guidance we year unfavorable now the our It's there. end but will starts that X, did our with does as surcharge the included fuel said, lag noise

these that updated me, when all you feel we Thanks guidance. we for pieces team I quite trust on the in, of that's but question, put Justin. comfortable that hard. the will think this We at -- deliver and where So looked

Brandon Oglenski Barclays. next comes line the from Your from of question

mention really opening Congrats and Tracy the you did a to outcomes Doug. remarks bit may culture. Doug. want really How in getting with be aligned. great a about National Canadian marketing way and Tracy, best-in-class viewed efforts if and operations your is to get you know maybe used to hit I sales more obviously, you changing? in be But can better more push don't or culture there? this a that to one And favorable

great this Listen, It's perspective. come do. team know can the what me a I'll in we this network And companies maybe all then, as you behind one that take said is can Canada. and of give Doug, earlier, and I your and in company. this iconic

out work and and talent out employees, into between but I the a we've Without this overwhelmed we operate also how and And think I put by the the property As is, across already. both what we tightly that I've the the first am and started more sell the meeting shoulder enthusiasm to step desire is there, to been win. of our we doubt, need that network. together kind a that

kind In more work challenges. on on of and an immediately, going need the this, you opportunity not top are of the a on approach I give us it deliver together that's opportunities get some to to like to better also but way. where to just to think start network tightly integrated tremendous

balance we're bottom the connectedness are we growth what between to line. only between -- So that do drive How between finance, building need kind in of the in operation into how together. between our to we're operations, what selling that -- you and that we it, commercial,

network, opportunity. some in this this, we fantastic company optimistic, as and So into I'm really great I'm seeing great lean energy

Thanks, Tracy.

listen, So the together. teams have well worked always

of been sell, operate. and sales But hey, has the been, the a operating has lot marketing let's always So hand-in-hand it team team. always with let's

Now sell operate it's and together. let's

So Rob's assets. marketing and where at the it's to team have the table we be the here's team sales going saying,

fluidity. the have actually we where Here's

Here's actual them. have the Sure. you to handle capacity Can guys them where sell that? to we

turn sales Robin guys opportunities, you lose, Let's versus build guys marketing guys, let's and the some here's have that do hey, to sales where can here. we capacity

it's get and the business line. together to the working more give and that So make to we take sure a going new drive to the be bottom and value lot best for all railway

Your the Morgan comes Stanley. next question of from line Ravi Shanker from

welcome may thank I If table and could experience thoughts shipper if a a I'm to versus But as day a your is at I the yourself if me CN, CN ever wondering all a was on CN customer questioning for bringing today. side well, the people on you to I question question have do there. of to of railroad here? those general Tracy, so there's you line you customer again, were to ever a experience X, X, I what their people about a thought and rail I'm role, the what maybe super specific if or kind been CEO, prior your but your the think, here. bring that were continue day anything you're think Correct wrong, and I in

Canada operation, particularly be pipelines. been for we Ravi, spend of no, the But Pipelines the a pipelines my railways to lot of and guess, some but railways. lot company. actually, TC running I and railways. always honor customer Gas in a Canadian time with and regards a fan and competed the of a I industry, In Energy, the a energy it's building time railroads, big of customer a I an I Natural kind across the of in I the this of wasn't wasn't ran here

-- kind there that relatively you implement given of side So kind that have quickly can is yes, seen rail the of So right? from the of anything here? you perspective crude other by kind situation, so my was think you

I in as in is that was and I've no energy I Well, is there I role you when it the gas. nimble. industry, that doing over think for absolutely tell There both. Railroads But said need What long side oil I'll periods I was great be volumes learned path in there. over place a and was very play this. natural time listen, big to is pipelines a better a are the

in pipeline North America can an network. out a to any in come of You rail and Hardisty on get you existing can market

kind industry pretty and ability that the the to now. flexibility critical so is right to be of nimble And energy

that I think they complement other. So each

an happen serve that over number the going effectively of seen will it you've the forward. think ability of years, our part industry be to I past collective energy pretty important and

a wave be to up lockdowns of outlook. from Or like with want once a China view kind kind opportunities for these of half clarify potential on China more macro volume I of follow do fairly the intermodal just you of normalized it. some are and a Got your big think the the comments second just going lifted? to question overall on risk lockdown maybe situation you international I forward? and an there. Do point see this in it's

Doug. Thanks, Ravi. It's

has the way lockdown looking supply just progressed, the another at chain So it's disruption.

other have have. have, ports So as we've warehouses the dealing Obviously, them railways been the with all on off. the and

like capacity at always -- in through cause again. will out the work the it and will of over this will what, again, at cause come we'll So bottlenecks It flow will all land. again next warehouses come wave it guess in It coast. China,

great. it's So

best going and to much the the question. at to right. and All there's it. planning we're work so customers only supply But get all getting now, we part, through our We are Thanks chain with it some can, play our of but do. to for actually we're experience part for going it as we're every can

Your Cowen. next line Seidl Jason the question comes of from from

sort hiring for of and your of the to about headcount. targeted? this you rail geopolitical grow Where and bit that all excluding supply little swan chain in downturn of And given Can we talk have. I ask potential events black is a have crystal a whole little potential sort to risk the the projections headcount, CN that going the a as really does wanted you a ongoing into really attrition? industry bit about that? Are ball economic, headcount we run

From accordingly It changes course, opportunities of up that's that and us that be see of we're preparing in is and and that, strong accordingly. Canada that an could I in adjust for is normalized resourcing Western the we as those now. this Jason, we'll standpoint, Yes, come. half, Obviously, and Rob. second mentioned ahead operating us. But front demand are we're grain preparing right there for of the we're times now, in right crop for more the

an volume, projections front see our from down the year-over-year because we we're helps. standpoint, in for we I one-to-one on it op and on won't that you'll made side, basis, of and on see think I a headcount adjustments overall necessarily hiring hope us. that the be the but

Desjardins. Benoit Poirier from of line the from comes question next your And

labor potential Gulf that Beach, we've a the LA Coast, Long in With port. seen share market to ports issues from Eastern shift Western

you the and John opportunities with Halifax, market provide color So could about and days St. see these some also Rupert? dynamics you

take that thanks, on, Doug. it's I'll So Benoit, actually.

think a shift of seen we all So always gone more have east, that's I that. our have seen

shift seen we've for have a while growing. business seen Halifax over is Rupert, -- to still be Prince sold So continue business and our out they some great Vancouver us, in we

business Our little a bit. is Montreal up stable relatively or

the we're actually out because balance helps So network. very that to happy it see

the We our then we're to have East, in to bottom lots and line. capacity able of drive that

also actually balance. at and So some We're that well Mobile New good very even. it's growth for Orleans us have to as seeing

the across to hope to right more opportunity great it. about enthusiastic ability we about and network. move shifts and so we are the So very of our to X talk coasts see our that

our And question comes from from last the Vertical Research. Kauffman of Jeff line

to great it's have and Tracy, you congratulations. back

at questions point. all guess structured good I So the this really

So to to curate the maybe part do decision with growth that. much think And businesses want the I do the as you'd And the you doesn't and an to cutting more opportunity kind need I'd And in or do about part. idea, I what of us about as this restructuring CN And you're process. think multiyear the do I outlined. that it of to what obviously capabilities to larger types railroad what to is to businesses But where But that kind like a shift just you does downsizing beyond understand kinds love think that, a to that like in with assets the today today? of assets of see of of types do you give business than what today. you position or handle the you're not repurchased. would looking

how you thank and the of the we're ahead so flows thinking lift our forward, lot opportunities us. with course, term things short of about that of a of Jeffrey, excites for work the range term. have am about winter right of We're focusing number over This question. right the may impressed I and doing and we now trade the some of one look I the lifting longer is most. that mean, that of change me head we operations. out as our But now

whether positions touching That into of think traffic, the change today, the flows on of some at industry, the of in on step those we will energy a products what with in really in the way us in we've think growth, a of time. our this it's way of it's a to all of have We different commodities container flows I optionality on questions having or having what's great it's partners going unique consumer as or and change fundamental some coasts. how whether in of of the Europe different over be result looking coasts or in the the a domestic had traffic X stepping some as asset whether pretty about some

don't to going lot optionality to we're but got be yet, the it. a take into answers we've have the some it at way. have the of going choices a in the to network to and So step look cool right it's best really and fun I

I session. to like Tracy the over would concludes now back This call Robinson. to question-and-answer turn the

Thank forward for Thank QX talk of you your safe. you July. the to your months, meeting other our person you looking call few you. all some Thank stay next on today we'll in then over and than in for interest. time and that I'm

has The for ended. conference you call your now Thank participation.

disconnect time. You your this at may lines