KSU,KSU.P - Earnings call transcript Q2 2021

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Operator

Good morning, and welcome to the Kansas City Southern Second Quarter 2021 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. It is now my pleasure to introduce you to Ashley Thorne, Vice President of Investor Relations for Kansas City Southern.

Ashley Thorne

Jason. you, Thank thank quarter and joining City Kansas Good earnings you call. second XXXX Southern's morning for

Before I of contains materially statements forward-looking Act we as this amended. differ statements that begin, as XX, of by within want from Report a to a those XXXX the such the results result meaning year risks Actual identified the the not anticipated Exchange you Securities limited could remind forward-looking number of to reports the other factors in SEC. for or our and combination on Annual filed of ended with XX-K December factors, including but us Form presentation in by

to as KCS other or future And statements and the any Kansas events, with update undertake information. Forward-looking Ottensmeyer. now is President that, Southern's introduce date CEO, statements they to to of Pat does information my reflect not City are pleasure made. only developments obligation reflect it forward-looking the any

Pat Ottensmeyer

comments brief joining that a for morning, of make a this lot X, material this in Thank to have change us other our format. a I'm our Godderz. we're you, Slide expand is fairly Upchurch we out that. a given only questions the good through change set related record Q&A. XXXX and going that quarterly in related Go specific on matters second included assumption we bit for Ashley, shareholders prepared brevity presentation. proxy join you to event But than our terms that on will is ask XX, of to everyone. given remarks. likely be our will Chief meeting go the Adam us Adam quickly, any there time through earnings, formal the and or the fact to Legal us technical presentation. a and I'll statement start there and Officer, for Mike August morning, and quarter have told that we're format is for earnings Adam I'll of the other the slide the this going to questions for The I Thank

events which is set benefits Moving going for going more about merger special and three National. to you meeting on XX, reiterate just the transaction. proposed characteristics am of for with touch August I and with Obviously, I specifically, the before, Slide forward, on few timeline to to have a significant stockholders KSU spend just speak the most slides but Canadian and this to minutes wanted some this heard given the of X, of now start

terms, We the been letters merger, over blessed And now keep some currently. pro-competitive to the So, close we and It rates more choices, opportunity commitment reasonable again, exists this XX commercially this options for as growth and the in a gateways comments material, been growth. deal, about here all that gateways has provide very X,XXX There It on is see of not open eliminating combination transaction. to you supporting more appendix strong slide. This support those is potential for a service a shippers or the is on growth to just any facilities. focused some greater have or specifically concerns looking arise. than all a combination that North and price and at will competitive transparency, believe highlighted might this widespread line X,XXX, satisfy consolidation on rule with through the deliver of by options to across to merger, single driven America. is is

and financial we the the interest requirements, the Canadian period. control viability the and that requirements KCS the insulation confident are National STB that and from voting voting are specifically proposing meets We of during trust public for both trust

to to path completion. on X, is Moving timeline, this brief very a Slide

can the Kansas I the City mentioned has And milestone, the circulated. left Southern on stockholders. is a The of as are few XX, next proxy completed. first the items August material meeting see special been You minutes ago

proxy fall in a back refer proxy will number explain to be And further. We and we'll to questions. anything statement that on happy that's of that

far other these milestones, As expectations. as are really

time will As Transportation know, we Board Surface respect that and you the whatever take they requirement. need,

that determination will of of As of a decision Slide we year. beyond would the XXXX. far merger again, significant on X, the that, have this And the again, we would full review and then reiterating second-half public believe on is expectation their our the completion pro-competitive, regarding approval. trust, this And come yield STB expectation is a until voting the as then remain of voting be up that in trust the it merger is our discussion just course, And will second-half the combination in and place that benefits. wrapping

we and financial on our very slide. the the which are requirements CN strong interest. CN-KCS and voting the read well transaction, won't them. both in website of the for KCS satisfies in the think the during which as is assured. voting opposition this And on very independence X, stated viability approval, importantly, public then voting for Some And is in comments July to And response is powerful, as available and public confident trust the are the period website connectedcontinent.com. filings of that our now, trust are we merger, the stage I those and and benefits are to we're on trusts that

XX% revenue up the of the XX%. Obviously, Gross volumes ton quarter, up to as comps Moving result miles a in quarter in the collapse that quarter increased slides the is of year. easy business on headline here just down XX%, few to previous a second COVID XXXX. occurred by from the on second

I attention our of underlying those like to really accounting were results the Canadian purposes some this treatment would numbers, later. representation Upchurch the shown draw into termination million the for of details the Mike your performance Our Pacific $XXX of our get fee by adjusted clouded to on transaction. will of slide. for

versus point of XX% improvement on year, again, $X.XX, year, from Second XX.X%, a diluted adjusted ratio operating improvement last a basis share adjusted last quarter basis. was adjusted was which an per XXX and of earnings which

changing in questions and long Moving But, any of chip had are week, slide growth, plagued last. to informed a very as shortages evidences our factors know, number North confirming new industry provided outages there revenue in we all that's the about the of changes automotive been to on earlier Slide general, auto target, in year all a of planned answer affected saw are that That outlook, you certainly we're Revenue the you XXXX that affected bit Operating The to how going our shortage Mexico. been guidance have a that to what from couple really quarters January ratio previous this we growth our that full detail. earlier. aware as April. approximately for to X, XX% recently moving many you and year. that XX.X% from double business digit this our are revision is about year. operating ratio, are guidance has in have of of, and the guidance that, of a as difficult by in we chip been greater revised that three headlines predict from across America full that's here Naatz XX%, for full is has Mike to industries

guidance have Those in is other developments, bit case, congestion-related addition due our outlook side the regarding Upchurch and both to in In affected the there other the our addition to revised costs. delayed some other an in in $X polar increase in ratio have at in the to our guidance for greater disruptions was in minutes. Kansas few Mike in have expense regulatory and our developments that to Mexico to additional And those XXXX a to full made our products to into flow the year. guidance to performance per then, and created addition business operating openings, some so versus And of more of factors, been will here Earnings contribute impact quarters, to are provide $X year. related path the year we full the for prior factors the guidance two that, for on factors, have extended share unique of Southern full approximately than there a our our there revision refined share. more our a a XXXX, color slight a City all plant in congestion that share, vortex the

that from two flow revision beyond So And guidance, capital guidance previous to expenditure EPS guide. well unchanged our a as longer-term quarters. our that, the then and cash free as remains slight

go some this wish chart but Moving key more the behind Slide on on there's a metrics, that green again, it, XX, operating to had little numbers. explanations

worse dwell products couple last on below high of ago terminal during year, our the some train issues and velocity XXXX. year to time at mentioned Looking and had to with second the with quarter. of rapid minutes other refined weren't second had levels. were than considerably cars good our of many recovered. including the This of dwell, and speed a freeway regulatory quarter there A a that I numbers and very weather-related the ago. business volumes the issues and we way this year And a deal downturn think year, for our volumes remember at those so happened what But ago the in are is developments, that

your These as busier. the support things yellow factors second are our outlook rest four bottom the the these year. to that the have of for a page recovery So the we this that service intentionally as draw the combination of And in increase we boxes I'll have the in to highlighted. are network well was that of statistics of and attention done reflect the in those volume, quarter at some XXXX. of much

online, additional increase brought a XX% proactively have locomotives. leading active to power in We

focus the the proactively impact rest impact also be of which the on trends, initiatives slide. in the resources delivery on about performance very our increases question of what's moves the leading most a is can see to crew have see in, the are and those accountability John and I and lot of and we support behind would I you of and number transportation for year dwell terms effort beyond. service and called on headcount around this additional engagement someone the and structures ask of encourage finally the efforts. precise are and hired and A have this team of our those doing, areas, on that other aligning see mechanical engagement later the Monterrey team added heighten out on we that our We are that and built and or recent year-over-year Sanchez things team a including the for And velocity having slide product. John encouraging. to of XX, they're that of this Slide the to more all volume some resources prepared then work doing in are infrastructure really recovery and the his resulted service to additional starts and and things processes, to growth, for measures. Again, crews you some

with presentation Mike turn over So I that, will the Upchurch. to

Mike Upchurch

more revenue grew good see the Pat, little but XX% my start I'll can slide, revenue next the cover bit a growth. on going and XX% volumes volume morning, to in and on quarter comments everyone. Thanks, I'm you here. on detail

$XXX operating million, on Pacific million fee we the to include we merger ratio break we agreement does officially with $XXX during reported Canadian when incurred of quarter, terminated paid XX. merger of May the Our including of second XXX.X% the costs,

break the received paid reimbursement longer second accordingly, income, merger, million no recorded potential reimburse shareholders As the effectively fee you the on we the CP might the remember, break are we fee, there the certain sheet. $XXX CN as the this CN record to $XXX obligations, from a be Once we will but for balance offsetting us reimbursable. have fee to reimbursement for break quarter. in us because CN million paid that And liability would vote the repayment

August you expect would be currently we as And the So Pat the in recorded XX. income, in quarter. second offsetting is have expense our quarter, mentioned, the shareholder the to third vote

including put hire, the Excluding future cycle headwinds incur more car approximately was a XXX on basis support growth. merger point times, detail basis slide, elongated congestion, headwinds network incremental our recrews, from hire from OR improve and will in did but the from during in point I expense adjusted included an to our which and prior costs generally We resources over XXX XX.X%, overtime place and costs, service increases we several discuss year. quarter, improvement

during non-recurring We speed quarter. also recorded XXX basis point to the one-time contract

of loss FX was Our EPS previously reported diluted merger mentioned and $X.XX, the adjusted cost. were for and a

Our XX then XX% fuel fuel diluted up before headwind had we lag, And earnings we $X.XX, basis recover lag ago. was adjusted finally, can our create point from increases a where per price from share year program. surcharge a surcharge about a those in negative

the Revenue of was turning let XX% So, to XX%. increase me up slide, revenue. next volume for a quarter the cover on

the foreign quarter. We All business pricing was this prices volume did fuel mix growth. saw XX%. on Excluding unit per right and exchange, see And the revenue table top revenue you let revenue in up year-over-year address and slide. see in me segments the the negative gains of core

creating guidance been polar globe, negative to growth the quarter, importation our rates what revenue segments, creating has shortage We've Despite so far happened However, increased in regulations refined track related with severely saw and on Mexico very across be the year. earlier per revenue vortex And the that auto the growth of in our higher pleased results this production the rates unit this year. chip established the products. energy like in mix continue impacted quarter. lower with growth entire to some with auto first --

franchise Our forward. the we our some Mexican growth intermodal at growth essentially suppressed renewals energy seeing volume grew remarkable XX%, clearly performers with quarter. industry pricing Star XQ. of despite were these XX%, us inflationary during Cross-border have will XX%. exogamous resiliency, again, growth for grew addressed volumes reform Core factors shown But to need XXX%. and of expect revenue going line potential. contract revenues was the some But and that lead first and to and that cross-border pressures we're in in be has

the to ‘XX, of continues as and impact demand extremely chip continue into at high, lows. back-half expect be to strong inventories look growth, the back in with year the we would our into shortage bounce ’XX, auto negatively As we to a late dealer and auto all-time

shipping will XX be will acceleration Canadian fairly expect of up And moving by the we second-half per began end terminal July. that the the of New so month crude in we gradually We third Western to approximately Arthur the ramp volumes. rapid would into also whereby crude trains Port quarter, of terminal a XX

relating cost of prices, pandemic increased as on due exchange the ago, the from and saw that higher adjusted a expenses saw as network Turning congestion. operating we a slide, to volumes. next significantly foreign we year expenses XX%, some result significant comps also to of increases to But, fuel higher impacts

of million Key As Pat new overtime productivity stabilize quarter. here expense to sequentially, higher stabilize increase higher million $XX XQ. transportation and in offset from from well deployed sequential we X% increases. X% declined as to and in prepare be the expect, during not the expense we third as course, and for but GTM expense we as substantial to what revenue. Headcount saw XX%, largely additional we grew from increases currently locomotives, $XX were service we to to increase XQ service the resources well still foreign operating increased mentioned, quarter fuel from headcount and added our below million saw starting volume as $XX volume, is believe that and service. volume recrews, exchange, we're year-over-year, X% in decline which drivers in

dispute, $X equally, increased which a year-over-year. and $X to million comp, parts We million in from to is wage due growth we our larger that reduced increase a locomotive and fact from million fleet, greatly due million $X ago. also GTM car had higher and times. split pandemic that expense we and incentive the equipment a one-time due materials the $X inflation, rents, from benefit incentive the year-over-year during $X expense and to million in comp roughly volume contract in saw cycle year XQ

execution focused of As KCS we Sameh second-half, better two on over at expect principles look the installed the better past into be And extremely will we do we the has years. PSR productivity.

XXXX, the incremental and an an quarters. But result in we prior in approximately the expect the million One do passage of a the million we inform to and by XXXX. compensation discussed second-half profit these have going target of now successfully in expense $XXX continue to about, as length to PSR you into we've run reminder, of not expenses from labor approximate at of a cost As this million rate rate annual $XXX reduced the of by XXXX $X increase run related Mexico. initiatives, reform sharing

law However, labor going expect increases into with any associated XXXX, negligible. new the be we to would expense

outlook little with for year So, the the let our wrap a XXXX. of perspective on up and me rest

demand feedback growth. opportunities and and et new the up quite And well from hold expect delivering despite in challenges that's superior to business our cetera continue around give factors, to We macroeconomic confidence environment as vortex issues the we've all that key us customers mentioned. the chip

is seeing board, in first-half had household provided appliances, with supply up plan, variety outlook the chain And the the think of across the early on vehicles, being on of a are the but we year, essentially that's challenges certainly we During built a that raw in supportive some couple of we're what materials. of and guidance goods, challenges, for of we revenue demand pent year. that

resources, of look will prepare we our we that fluidity, FTE top-line for to turning XXX This congestion we We in in we cost expense in deliver our to XXX should And and achieve clearly better that XXXX plus us recently the basis execute us then locomotives of to namely improvement reform, with range allow XXX the economic business. to can and a comparisons the mentioned, XXXX, at Mexican success continued have than side, to around to the of year deployed ‘XX our the network somewhere point OR dispute and to in of XXXX. to As ratio. relative allow we're the the going consistent and and operating transportation growth basis some incremental favorable factors really and going PSR another in improvement growth, XXX variety contract unplanned labor points costs I tremendous improvement. we one-time see into think rest to into going improve the into believe

substantial see you'll collectively, got to So believe we've some improve guide operating to our ratio. continues opportunities

for final back that, I'll Pat turn to with So the remarks. call

Pat Ottensmeyer

comments before for Okay, of here, performance, line outlook executive to I about just efficiencies couple outlook open as our the any our entire team mentioned, happy We've for a got, and we questions. up our the for answer of operating those questions. types business, questions

me to questions. proxy know you to proxy that vein we details, And available. a there, that’s statement not while kind then The advises those time. able additional might And from questions rely we're the are proxy that I that background out questions know on lot the about if away We're be to shareholder a we so that questions in lot get not those steer there's various will things have limited only lot on happy want disclosure other of answer. position we out you the responses the any of but outcomes to well, answer STB, and as in will of things of certain about a from likelihood Ashley questions and also be provide is in leading to to there. going I just up clarification a the vote, of

outcomes of to in to I that just complete timing evaluation whatever our second-half STB full decision. going necessary on the year. as deem making that. take I will we're before they are STB a is speculate this will But a the beyond that time decision and As make expectations not reach And also or mentioned, said, the

line we'll for sort suppose open be those the warnings, happy with So questions. I of up to

Operator

question-and-answer Please from We begin Instructions] session. comes [Operator will go Our Chappell ahead. ISI. the from Jon first now question Evercore

Jon Chappell

you. Good morning, Thank everybody.

Pat Ottensmeyer

morning. Good

Jon Chappell

the in guidance. what to go optimism Maybe but this back-half the that can here. doesn't year operations bit there's the Pat's about a of matter the based a little And focus lot if a says, I'll the fundamentals first, in encouragement on of month John maybe if the I on Orr and STB

need the full get for to year. You the OR number to

You EPS to need get about to improvement XXX basis points the number.

Mexico, Maybe challenges need it's the rate the kind into in to that these your to of metrics You bit speak of out your there's after there, able yet plants the the you'll lofty year? $X KPIs exit little Mexico, the some a of meet lot $X first-half refined year, service, us in auto planned confidence second-half flows financial to the reduction and whether a gives outages still the of that of and fluidity the that of for products. service you expectations have that of about the and be the

Pat Ottensmeyer

Yeah, thank you.

You're absolutely right.

and guess, a challenges. lot in a momentum structure the and a that's to structure field. the of of But there's itself. service, And field supports is And of and the plants, foremost second the of the better fronts, is have accountability. network and and have asset challenges. is that's lot our organizational the what and certainly the team improvement we process plan and first We activity effectiveness couple up management the of engagement aligned those for the I use our

including to more we've in our and that And and resiliency, improved can our as we all new of that, network more fit at order we execution. plan our through Vice our awareness have accountable levels, in gone that, with reorganization the visibility and for service for asset the the now Network delivery So levers plan both and precise development President, part a capacity of both resources. create see

of see our the results. are daily is at that get into performance And, improving. team, we willingness whether the deployment support team Naatz, hold, Fahmy really the you showing So, a myself, with or the it's initiatives that underneath if and our tactical drive that the assets. Sameh service taking sort impacts and to the a velocity one is velocity and of And it's is the key The basis. where to it, we've everyone on of create focusing of weeds performance network Mike of that the look and developed, improving on drivers architecture balance strategic plan

the in year the the U.S. velocity of out today our a pace. at of taking three with fact, of comp to a In is quicker equation. recovering year COVID line outlier average, is four the

Mexico We realities And on. created is close target more visibility. so but COVID that initiatives a all ability days across we drives still of Sanchez, our today. with structure work goes to key create that which we multifunctional again, pace team build And have is the we and accountability bear, the deal In drives number addressing the U.S., alignment and the we're is do comfortable how integrated and search decongest these that to of with But with case brought some those returning and focus and customer challenging also QX. Monterrey, Monterrey it in down plan comes to it are recovery an I can departments. where day, a through the better the created the that week the it teams, seven -- we not very yard, we're development resilience. fluidity. velocity focused where was organizational in implement rate support the showing engagement our as service cross-border. It better trends. the a are, so Mexico areas service to that roll COVID We see Sanchez, better in team complete the and being and to and effectiveness. primarily of heightened visibility, driving service the service And path asset of more really local and significant to the our still And network the up like where take Monterrey as create sleeves to to we XX-hours is a and our not we're better we that create only headwinds yards an skills

us. was One that really end-to-end for an key that looked performance, industries at because the our really grain is I market of

of our segment So has it a those within good closing even a where capacity perspective. like. looks it numbers of the and has of And a really that in tremendously, end-to-end the of some some most our we're months supply fluidity market chain sense from the And have best and the length performance network. railways, spans handoffs in up for last record picked again grain benchmarking on two capability times and

say leading It reorganization our would staff. time, is and architecture supports we are I entire everything indicators customer management the and the heightened same of and And education the values and is values. safety at frontline the accountability support it's So, service and with our that the growth. underpinning visibility and our

So at every pointing that lot indicators that's leading what And look gives day that we of me confidence path. the we're in right the that are on direction. a

John Orr

our just Arthur mean, sticking Jon, year have our Hey, from implying lower polar guidance perspective, costs. pretty full from still we're assumption congestion real new with But, for on business crude quickly, year the have we're the I of issues. some our really a top-line, terrific including to forget and year vortex that operating the to was work with the chip here, going going Port an terminal. a the revenue And we're the back-half this and of of clearly, don't we out challenging way that first-half of

top-line significantly to certainly that help here. So, is going

Jon Chappell

follow-up, helpful a Right. call this bad almost feel Super else but answer, know I John. one. on asking would I anyone ask

think guys So quarter. huge then around put refined or about lost regulatory long kind Mexico? impact cost And way to the of of either these you of the we talking it quarter Mike, for issue any numbers regulatory lasts? this since causing, Mexico you, you opportunity this I to the have congestion there of now have revenue also the how is you But frame issues in and some have the it's been new and the product upon duration

Mike Upchurch

situation, I think, Jon. it's a temporary

from kind coming two-thirds macro be The here. that positioned environment of line U.S. to into me the that's than imported, most that nobody better of the and to of Mexico's Let bring demand the back there's has to Coast KCS And bottom up is Mexico. Gulf from U.S.

that for that still is of that confidence us. a great gives us lot So a business this

of importation you share when at XX% demand share high to fact, year. the of total increased data, from this In look parties is teens actually third

product there companies more by KCS. like being So is shipped

working of a happening of to little we cleared here, up that for we've getting lot that it's it's half manifest the is continue got we our backlog, kind labeled regulators bit backlog. And recently, side of of in created I to this a trains, of Mexico, sure demand such unit think products what's dynamics half us. make the the just sampling the a a it business of going are a in in But this are here good more properly. that little doing manifest, and to business think down that really with be government's

short-term the for that dislocation, to kind any business just maybe of us. versus permanent So, impact

Jon Chappell

Thank it. you, Thanks, Mike. John. Got

Operator

Mehrotra ahead. The next Bank. question go from comes from Amit Please Deutsche

Amit Mehrotra

Hi, not Biden Hey, lot of of last there's Pat, can a thanks, idea obviously everybody. I at mean, rail the sector mentioned around talk about specifically headlines but you in in that? reciprocal couple Wondering executive the regulatory weeks of also consolidation, operator. the switching. they obviously order. what least, then

the to to all, any? and impact wondering in can is and your of if you the industry the if terms time what what had you obviously as business about are think whole, implications You've it a at think comment

Pat Ottensmeyer

a you STB. rail really if day that The the upon down with order, in the consider to here. And, the competitive everyone. before think order, the the determining And the I'm it's I involving relevant week, on the do and here, ahead at fulfilment specifically is already quite acquisition bit. of answering rules came chair pretty a my is I'm executive as other matters in consider Transportation with based then, and was details of executive the or sort few of last language encouraged rulemaking rest merger is things the like question, do consider but which mergers whether had think access, actually existing. One a I'll carriers jumping I've other interest, public This that a when highlighted are then looking of to a process transaction, to calm to of headline we and saw order consistent we following: remember to order work executive Board people reciprocal your the to guidance Surface a the thing a switching, best, other of and the on to executive shocking board back literally unclear. rumor includes out rulemaking

out languages I think, laid one the the rules Canadian order, the path in the for of they're National at same. using has if STB mergers, and executive the been to that conclude want look the current I you this by in

involved. plate, think I has rules, we But also standards have that’s what New in this activities, with But, So, any order as including on on like inconsistent docket activities on merger situations reciprocal full these in the don't called the know full in be a STB I the out. that STB is their going the that the things ours. so rules in really including merger of executive plays these of time switching, the of impact Rules there's until STB this, case that already future, near we for to a know some they evaluating always the different current are won't to and backlog the very the priorities think addition of

Amit Mehrotra

that The Okay, answering follow-up question. Mike. for me, appreciate I you for guess

first the off the a the you But, mean, you've last I from the of to a in think done years. couple a bit little I we're one next congestion don't that the backdrop incremental in have cover by of of if a like too number. lot huge have lot first-half, difficult especially on. is items will, blip, visibility is your quarter-after-quarter, to operationally I to revert you're expecting a so you some north that margin assumed which of in these is guidance cost Mike, understand guys the the quarter. want extrapolate in. quarter, I a job things is year the particularly knocked much But, XX%, ball phenomenal of the over

If that's you just implied guidance. for you're thinking all lot And the can you. XX% at right why a number, going given issues? confidence especially to resources framework as is about help fix get year, of you're comfort how us next on incrementals Thank around next the year today, so, some the throwing and all by the trying the

Mike Upchurch

it's the we of that. being said revenue a a of get get all lows take macroeconomic comments, XXX from roughly and production, lot And, margins, indicators, points or I'll I PMI, And environment corporate give inventories if incredibly basis demand my industrial the or think couple side. really all-time two-thirds out of it from the cost incremental of half strong top-line. whether you line, this GDP us a investment, at confidence stab. around we XX% of you to kind just as roughly can a prepared about half and the in Sure, But, think

costing in pretty a your of I and of deliver costs So, to and And, year-over-year. able I couple improve congestion And with we're clearly, the some about need and with house. really we points. that XXX these see good one-time being operating that's you feel improvement rid way operating basis then of where of get to think And us combined demand that. at nice we the ratio think fuel in a couple you and to side

story. realize I me show Missouri, here track. as a the few credibility acknowledged on thing delivered of some you last me from we've the from years. state, yeah, get a it's got We're So back having bit and this We'll show

Amit Mehrotra

Got it.

Thank it. Have great a good. Very much. everybody. Appreciate Okay. weekend, very you

Mike Upchurch

too. You

Pat Ottensmeyer

Thank you.

Operator

Jason Cowen. ahead. from Seidl question next The comes Please go from

Jason Seidl

think contract you're spread the cost we going see? you Two be are there terms of to Thank questions you, Pat, aggressive in Should hire rail here. about cause the to inflation to on good the of in like operator. side the team, in we those morning, some of relationship expect And sounds contract the that how that to going cost everybody. year. to clearly it pressures Mike, renewals? pricing, quick should renewals more back-half One, were

Mike Upchurch

their forward, to to quarters, the to the in Well, so is back inflation good we're reprice come an generally, have I And been increases a for inflation. would and inflation around even our got need strategy we've ticking inflation, consideration, we is same. step been contracts seen up down inflation it's price up Fed price up. suggest because cost the has take kind now long-term of surprise, The dynamic We've going news where going business. above environment an we roughly come long-term to think of going But, at as projections is last interesting renewal, in looking as have deal no that few into the XXXX. always with that that

to So, our they're make interesting discussions with to customers increases our to we best have, there. going and continue cost sure cover to business in do we're

Jason Seidl

increases costs? spread, of your your But Mike, change that's do that and that much to think you in going between price terms the

Mike Upchurch

over yeah, of there. away of numbers keep in kind last clearly can't contract mean a a as positive level. year, have Well, through go seen from that the we've would year that moved we negative renewals the giving you doesn't specific the course But, But you quarter, that spread. at

Jason Seidl

enough. been in or in is businesses have guys delayed, your looking coming of and the should How to to strong business margins may a some overall online the year, fair from back-half question we that of rebound on for follow-up coming are the types those have or chip forward. shortages of about that of My either plants some relationship deferred business? going been going looking the obviously Okay, sort think the you margins of in maybe be because at online of sort

Pat Ottensmeyer

we segment doing been right, talked about for never you've Jason, XX-years, this profitability.

Jason Seidl

I though, can't girl. keep a blame trying you

Mike Upchurch

by because all of this. issue. surprising going will this Difficulty] chip us wouldn't no, Difficulty]. see you to miss our to of probably deliver [Technical million But tell I we're be It that $XX auto plan [Technical

Jason Seidl

Guys?

Operator

please Pardon dropped, speaker ahead. your me, gentlemen, you we by patience. the while and line is the appears reconnected reconnect. and ladies with we Thank gentlemen, go Ladies for have stand Please speakers. it

Mike Upchurch

segment we your this dropped issue. going the we back-half into into I'm original the our Alright, of like million and auto XXXX, But was think exactly question segments were sure I as not there. of of I because going short look profitability. plans, be around And Jason, to $XX where was year got probably just commenting, chip

giving have profitability strong top-line continue deliver to to there by the we're business. go And opportunity to through overall and that great accretive to going or going You're that's But not not I segment to And, segment our assume generally think that make that you should whether generates the that's margins. up. growth. continued demand really just to is our focus incremental you

Jason Seidl

Mike, that's make that so, that And that in of being you're out up that assumption was going that $XX that just ’XX? pushed lost is most that to million

Mike Upchurch

article be the get these cars chips can't for issue. anybody than day less fully other that knows think to when kind going exactly the value don’t I an listen, resolved. of the this It's Yeah, is we chip but an any. of read $X, total are shortage amazing I

the vehicle together. So of you complete a putting can't production process

car to some You'd now, the is to quarter, quarter. by gets the these in dealer lately, cars. the this driven days, XXXX, in XXXX. by some fairly strong. you'll like order deliver for going incredibly if see to asphalt to Demand tough going soon. pretty to more demand begin environment high third is you production, resolved that really the late think despite is than We ever growth here really lot auto being the begin times, pretty told a and but bare long, second, incremental will into think right OEMs, shift. we're this into fourth And And you've outsize a to subside year shutdowns It's so will long strong week issue going in see we're us third

Jason Seidl

and that the appreciate time updates get chains knocking wood on the the supply there. guys. Appreciate I fixed

Mike Upchurch

You bet.

Operator

question Stephens. Our from from ahead. comes go next Long Justin Please

Justin Long

Thanks and good morning.

a planned to Lazaro interchange the are and network? say products circling refined So of your of faced much some specific Just versus outages, network rail kind of the broader quarter, with to in that service there, would that traffic. the to were back you some of related is issue regulation challenges how your the this issues

Pat Ottensmeyer

go John. Yeah, ahead,

John Orr

refined officials days chips across we're to of support to be services be as addressing ready some products, difficulty we're a those in that the in where our of there taxis have exist employment as employees some problematic much on that outside Mike with answer call, in business, they're team soon hiring combined I the network, Well, new auto come as to service other tirelessly see like that. We're and to more as work are of well. resolve are the isolated furloughed Oscar lot across performance breaking are where question, earlier equipment some that worked very that fuel employees been rest issues, through And where for that recruits, the were that, furloughed own that. and prepared of moving think doing the them around number customers XXXX and creep very finding finding new are the I the in base XX-plus operating example, your team, for can are the think said States, to performance, and as particularly and we other network, are that entire XXXX, in of conditions as execution that. employees. Mexico We've United question, the recalling for to descriptions fuel in things the successful the global in on issues over we're like happening had example, we into and -- issues our order Justin, you and trucks our industries. that our we successful Mike that in, onto the in of of that But been are and with the but for very a in

those of networks So, others. number broader resolve our a are of issues fact, disproportionately on we're I And recoveries quicker a are working that that as are condition supply would say efficiently than as isolated possible. some to as global are to for chain. of localized on in are that issues there And really the us, our them team a

weeks, of are and our hours look you plants chains U.S., supply chip trending recovery. making magnitude well in range, the intermodal very the XX% last If order six some in we're velocity, improvements in our even over two on the some of intermodal plus of at the the

said, employees for anticipation that we've addressing we where customer availability, a things. our think another doing very as service capability, locomotives, to our where best I So, this we on in based cases, we're them performance network in and those we're mitigate gone side pre-purchasing kind influence, hire service we transportation be as locomotives network, how that, going that on little in addressing isolated that's of little sees so that problems my the pre-positioning going growth are that And so the to and a take tough, have chain for systems, bit the ready form we're and we challenge, our challenges some long them see to and areas, capacity critical can and we it's a our say on are macro supply in that our of on long both. aggressively, that that's would that to have growth how we bases across and we're both whole and I coming. as of a as know employment aggressively a micro

Justin Long

to follow-up, And as ask Thanks. I helpful. that's guidance. the about wanted my Okay,

outlook the The to for wasn't change was EPS the changed. outlook, the this XXXX year. tweaked despite only So outlook OR

actually So the below offsetting a guidance bit influencing this? anything that margin the Or, that's gotten weaker line better, little a is else outlook? Mike that's and has read is right there your here revenue

Mike Upchurch

so right. January, at income the that's at and exactly got back You guide flow looking we provided helping in the it end that our certainly We're EPS. net the of high revenues through, XXXX. on was a just kind we which we've of share talked impact our in And as before, has everyone, a reminder our about repurchases, original for have this stopped guidance, but limited

forward, things on better a reset with we're of kind depending on, But, potentially your variable, revenue. at the changing at be we going as where end the XXXX could so it's that the year merger. of spot for And

Justin Long

Helpful. the time. for Thanks

Mike Upchurch

bet. You

Operator

Tom question comes go Please from Wadewitz UBS. ahead. from next The

Tom Wadewitz

gave to in I us deal? no, not if say not, if I know no still devoting merger kind about what Yeah, Can shareholders some happens expire says till good into of not they or of STB and what's parameters morning. if obligation happens February, more sure no? doesn't vote And so to say if the the your it asking you fits things, us it's Pat, but think I'm explain factual. you certain they favor your trust? deal And what

Pat Ottensmeyer

going before they a is STB to think the shareholders a or after if occurs to the on don’t the going decision closing conditioned and happens no voting shareholder trust. into [indiscernible], vote it is say I What be whether

vote shareholder closing question answer, the And from the or decision, in as then of boards’ will that taking because your time, that really and explanation our CN’s the decision including what's any would trust. part, the it the behind a will there STB there that is be to other that our into voting So part, part, including to at reasons. their be consideration a assume hard including on technical would all will available be possibility be into information color on

application down matter, the of that application. application there CN CN and/or on trust because turned remember the trust merger a with back voting sent that associated fact wasn't technical So original a voting was the

and begin Sorry, has that included at into that number to to I [Technical CN be are a might of taken STB just there forward. and reasons remember this make cannot of by remind factors And any Difficulty] in we sure certainly an in vote to consideration to everyone you of that anticipate our decision. what be board, that as all by point,

Tom Wadewitz

would a your end to fees fees shareholders approve obligations? break other a you you different with I'm up Do down and be if about to think path chance fees out can going obviously, What of just Okay. of break there's get to break the consideration. respect deal? trying about, some the and

make fully its till – you your February, understand to deal obligations, doesn't expire sure So possible just say want no. I could the but to if STB continue

your on in you that fees So how during period? thought could obligations would a that change break just give

Pat Ottensmeyer

going and Well, conditions the to again, around on circumstances I am speculate not STB decisions.

break the break refer agreement, merger is fall documents. just of thoroughly back on in that will those think detailed pretty I'll the statement to I which my the I the the fees, of mechanics proxy, so part are fees

Tom Wadewitz

Okay.

just is like voting So happens it sounds rejected. it's the pretty if what unclear trust

the Okay. questions. Thanks for answering

Pat Ottensmeyer

Okay.

Operator

comes question Citi Group. from Wetherbee next from Please The Chris go ahead.

Chris Wetherbee

the simply just last Is board it a merger could as questions. following that that would that little that there a you could circumstances stands that for don't line morning, go of be Is no or trust. Good -- prospects if lead without a Hey, potentially along voting pursuing of guys. right a thanks. being bit just have something Pat Maybe know contemplated on potential the a the to now? option you? I

Pat Ottensmeyer

with getting really on what have a then are But in me the is disappointed an be on to beyond that answer. wouldn't voting think to totally Chris, And be. And I'm our probably that, appropriate trust my focused comment going we strong case, board's for approval. STB to and application. we going response say it very what would

Chris Wetherbee

as of one regulatory incremental when in maybe think your on if is executive maybe relative that questions scrutiny? shorter-term service of this terms That’s potential acknowledged. we've in sort improving footing coming put had a is some to more service fair. Okay. is the regulatory struggles some customers, service from seen of in there of is then, scrutiny I you've things potential is the this stronger perspective, improvement Or, potential remedy short-term, scrutiny you've from obviously, the much controllable at you in the large terms the of a regulatory industry guess? and to the the have you order, the Is something little relates bit to providing And to of about been How sort this dynamic? a with service on you has how executive getting order, of that, that here guys the

Pat Ottensmeyer

STB I on There's called advisory hearings. the executive been that's the an has I don't as focused necessarily service. STB before tied RSTAC. hold very order see the being know them together. They group of

levels employee they back KCS, when have and that monthly. information probably improved a just We believe quarterly railroads intended I of to they think committee. time, gone to have that I be an organization little is a Over have feedback who's scaled of that meetings, shippers, And to that to and weekly STB. service of and from bit, meetings. But on from monthly meetings weekly is from an recently, sort clearinghouse were

from the So a service in interest high scrutiny STB on of levels. very there's level

a seen to STB received, some the detail what to just we us prepare little are early. all know doing this all these prior service things, have received our have the about requests I the come of us from they time letters railroads to peak. seasonal CEOs, to of this We recovery. comments, for all for Normally, bit the these But you've came

made certainly And recovery with from So, predating Oberman the continue interest STB’s STB, be and publicly very focus. we've commitments to a resource, including heightened and that that interactions comments, had level I see Chairman service executive the will as that just the in has order. know I the

that and So, interest level we requests seriously. are very taking those

you can from the we that As recovery and and make complete resources, path proactively presented, materials service good back growth, resources are think We in we U.S. training. the crews, we got see, Mexico. adequate to on both brought have to sure our crews a that we've handle have brought we back our in we

over that. don't of necessarily see very are the would any think necessary taking we say, we're concern order that seriously, the the appropriate. service STB and And in executive So, has inquiries those and I ways as that changing and responding

Chris Wetherbee

Okay. Appreciate That's for helpful color. time. Thanks the it.

Operator

from from The Ken question Please go comes ahead. America. Bank of Hoexter next

Ken Hoexter

Hey, great. Good morning.

Paso, some dispute? And Mexico? on late Pacific thought on night. after suspended the for But, question you of week seen to early in the from that the can on What's contract just in throw mid-XXXXs, shortages? any international follow there maybe we've for Union at to last El network, then chain a UP maybe or XXs. but maybe you. traffic both a your interaction Sameh, mergers supply in impact provide Coast Phoenix, with mega ports before question this contagion I'll intermodal your the West on the Is of these ability for the Pat, given So, guess, my details any I

Pat Ottensmeyer

No. the take one. I'll Well, first

first traffic, no word American our interdependence in on rail the on, particularly, used and carriers can't other there's a the UP, contagion. elevated cross-border the specifically comment in obviously, going particularly on on And doubt other detour carriers, we the given comment And, a part, difficulty think have but that's North things what's network obviously, given help these are is that feel when joint you is, to their options we a Just it. joint and very network. we with at on can with that border the are of at customers. our them. so network, other we fact serve way In and it customers, much interchange do traffic we If much we of cases, lot other the the railroads there

make with that interconnected carriers cooperating of it service. other to sure customer our an adequate sees an from gain to nothing have fully network. But the We level yes, is

I think the and of level with carriers coordination high. very other communication is the

and daily gateways to to when try routes. very of for efficiency a on it's find the to But, with industry other are we help rest ways different is basis, going relieve to of to improve hard So, and struggling service the utilization among the we assets the different just each particularly capacity smallest, and being definitely tight issues, congestion and know.

Sameh Fahmy

is a trucking about Like bringing chain of volume And the we Ken, this talking roller back. a lot been and increases. the of industries. the rest congestion all have drops rail is lot people Sameh. and here, industry, supply across the A it And issues coaster industry, of lot of have the been

the X%. look locomotives about up go last an and And You you exercise. they after, year, lot compared time like The bring activate had QX a QX have to back went headcount back. up you XX%, year, about trying up at when transportation XX%. this by GTMs example you in stored by XX%, also then were the last them. bring to numbers, the to of we went as XX% not XX% down and trivial go to people assets It's a And

up mechanical by against X% So increase. X%. headcount volume XX% The went

congestion. much want the PSR not does it up some of which year, a said was obviously, this is last we and Phase in we we're to for X, X, don't made. is all very oriented, provide XXXX, that swing, to loss a gains you sure recall, the for Phase back that which towards time, same revenue. lose did And making because, exercise, we bringing the So, said, when nice people contribute productivity But trivial at we if it in

go lot starts length conserve it the So went that not increases. rest. the down the gains, as did level a at going of not which And we the and very up the did about much, because are headcounts all same train the train volume down X%, means the by

of lot how a and conserved service, we of which did have the a how thrust so area. volumes, work we the lot improve have can We last is of can XXXX, what you in X year, game really you the Phase that the absorb of was done

like, and XX% envelope to pushed XX%. really went this spotting have putting from We service the percentages, industry which the on local jobs the up on and

how the the improve we done. game maintain and that of service, So, some have volumes, gains the is efficiency you can the still absorb

our going actually the locomotives vendor. network leaving we're leave next are working network, not the three locomotives about We are the leave demo They talking XX weeks, because in go the are in network, with the that a on actually, are locomotives, locomotives storage. to lot of

to at And the efficiency are act the is question. to this time, we trying your And is primordial. challenge same but that this there, the supply still balancing the really is service is to the a chain do. So,

Ken Hoexter

to terms labor the hard the network? it for is now that, network, right the employees get your in for on rail up market of wrap to just Sameh,

Sameh Fahmy

became was that ago, that to it say we And the when that training initially, tough even we back. a we people people started Ken, was classes, approached it actually couple would I said months of get and had, were back, home. are at lot bring longer they the to when have checks interested. Obviously, they wanted getting back they they been receiving hindrance, we no come a of a why payments

So, was. initially, it

we use had people Now classes, actually up can we have XXX success, have of recently, I XX more them them. about think we have in marked much meaning, now and,

headcount. yet, XXX in that the XXX in costs, And, So is you still service there pipeline. and productive into have well, when talk the are people you productivity they about have not but counted here that gone are

compared includes measure the it still than So, right now higher. we because to to to everything X% be. it but higher, headcount year, last not X% is look higher. it and where One the car people say lot who compared at X% in lower are volumes use, is pre-pandemic, that last are loads is, not needs was the training. I still crews are QX a are year, where pre-pandemic, But X% really QX The we

So people or expect in would in very talked that we challenges, And, are the say per we XX that months on we our the to plans expect velocity have two I and XX, the and clear now, velocity up a month very, but productivity dwell, we completely back we're next, two. to happening, and to what three And we'll back hour go miles facing about, is John be track. finding the now.

Ken Hoexter

Sameh, Thanks. Thanks. Appreciate Wonderful. Pat.

Operator

Please ahead. The Allison next from question Credit comes from Landry Suisse. go

Allison Landry

morning. KCS to take the mind, industry, the the impacted Appreciate question basis of be of the in me the of the peers? estimate down in that you But traffic, probably impact way so there squeezing more I to of actions fact some Good Thanks. just relative Obviously, about path just it's any. sort thinking But topic sort on ask made have a be to never go to I'll am one. cetera. versus is the asking wanted an interchanges, less argument a Pat, the less reciprocal what switching, that captive might would in, I for difficult et just of different but potential of STB back your way.

you it? do just fair way about is think think this to So, that a

Pat Ottensmeyer

fair A less that would way to KCS think be impacted?

Allison Landry

Yes, right.

Pat Ottensmeyer

impact depends It different because there reciprocal many impossible it's know it kind be knowing how actually rules us. on would many different without really proposals, just options are. are implemented, what how specifically, how, would the switching And just for of

Mike Upchurch

of Allison, wouldn't Obviously, be in which Mexico this our half is Mike. impacted. business

is what be others difficult that, you proposal to relative but specific the answer it's I think impact conclude to is. understood what would really So, we safe for to the in until U.S. the

Allison Landry

I Understand. had Thank one. just Okay. you.

Pat Ottensmeyer

Allison. Thanks, Okay.

Operator

Please comes Morgan. question ahead. from go Ossenbeck Brian next J.P. The from

Brian Ossenbeck

at here the quick call performance on ones, the on me the Appreciate end. network one getting for Thanks morning. chart. Two it. good Hey,

work? executive improvement If just on you think maybe window an visibility and is four two first network more you to just benefit to spotting order, mile, the switch? we did into put briefly context, then think that to how of from hour there that? Sameh And do different. on the again when If just give How change made fluid could comment going on every do that going what’s should It's data going the on to you you no crossings? if update or mile, more border four? Was And back sort us last any be to border on I we can mentioned because it interpret get in pooling? hard six

customers level of are this for asking really disclosure. Our

hear to potentially, someone going about can a first we're be future, will helpful. thoughts think that or in some more Pat, lot. Thanks on us I the that, since maybe, final give So mile and

Sameh Fahmy

went difference. lot area. it, Monterrey they as a need customers mile talked As far we I about, mile, as in the first industry, around John then just from have XX%. and fast the origin issue John focused get don't to any the some And intense. like, that have numbers of giving very Monterrey when can don't last the I it unbelievably from the doesn't exercise And the XX% that you but was it numbers, destination, gave have you to see been in numbers, make to you trip if team can but the as

the cars. the So spot of now, empties, you give and we orders And provide single in that XXX that basis, right is customer another cars. type about thing thing When other which basis We XX regular XXX them XX a important. is Monterrey cars the supplying on is also every the a you reliable area. give empties day empties them

really it's in of has slides aspect improved, that here. the and any not So, mentioned really,

public. So to make should more that your point, we

has four far As instead And hour work trains next the miss And bridge. that, you train six hours that windows, hand great we Pacific hand a as actually to to of the been waiting from window, wait window, that the UP because six a to one. with Union in on the there if the you have now success. go hours, are to

miss. Now you if wait only four hours you

up network. because it's miss that has chained want there But we can don't is if we obviously but a improvement rest, help improvement, a with the all, Now, nice to it. all been

hours' Yard, to trains, arrives, So, is to Mexico four much better of to John the Laredo did hours' has you than train ready. ahead worth the shot, team receive which worth everything one Laredo coming okay, to of so the the send fact a and is from of now Laredo lot the when work northbound sending plan six trains trains. in that But in

You flood the yard. don't

very good was going not A QX in refined Laredo very by and they products, all about just there grew doing is which of the of of these new lot he goes is even a lot with Nuevo hand the benefits But of is that side here And in And coordinated are happen. border, on there south structure John, Laredo, a was things are talk the structure. Nuevo big was last to yards, for by is side, Monterrey. So, like a yard. exercise that year. small yards QX yards hand. which work all this Sanchez to best are that Sanchez, that the took the are the XXX% it on rest being work the organizational about the new And that yard year that from a didn't Sanchez, place, talked affected whiteboarding other done was a we

goes windows hour now to are went the to is magic But, question, most. things of main southbound time, do to the between case connected. and are And because what's and second any then And northbound windows these is network, your And answer the hours. all go zero So, intention, at there goes you to the our the sequencing that trains. KCS in the growing will which at having hours the from down to no to six cross-border bridge, the bridge, four directional, all. velocity same without windows, go eventually build

is year. think that cross-border XXX% grew Mike? QX across refined year to XX% increase, QX right And last product by from I this Our

Mike Upchurch

Yes over that.

Brian Ossenbeck

All right. you, Sameh. Thank

Operator

Group from Scott next go comes The question from ahead. Research. Wolfe Please

Scott Group

guys. morning, Good thanks. Hey,

reason voting vote So focused the on Amtrak. order passenger you are Can XX, planning a the August bunch guys about if for quickly, and talk passenger does still clarify, have whatever you much before blocked what service can shareholder the exposure just I guys executive happen? and And trust there? is service you then, like, just how

Pat Ottensmeyer

if First August there will on place prior question, is Shareholder XX, decision yes. a to. take vote

Scott Group

the of Regardless decision?

Pat Ottensmeyer

Amtrak. any host actually not does KCS Yes.

one dispatch I we Amtrak our have, Louis. a don't over -- but couple think runs it. We tracks, don't location it. of We St. around Technically, control

Amtrak. passenger time our really has extent with talk, we Amtrak type relationship with There commuter to network. to that's other and the from bring obviously with of service So relationship no onto Metro organizations really with our have passenger been time and But Amtrak.

a that there they talked has we history And with with route So Rouge have route you don't New divestiture I Amtrak. Orleans if today. as identified that are familiar think service on But a been Amtrak the candidate. is the response, about no Baton to passenger

Mike Upchurch

And passenger service way, by hasn't over the in been that Scott, XX-years. on there

Scott Group

Okay.

be a big shouldn't Amtrak So there. issue

if get get decision delayed August reason shareholder don't voting by decision? does a the whatever a follow-up, until trust quick we real Just for XX, there's vote

Pat Ottensmeyer

shareholder approval No. the earlier, is would voting to would shareholder Again, the intention a trust. approval, as STB be subject I for subject vote that be mentioned to

with vote. decision, our shareholder would intention it to if the there's no So be proceed

Scott Group

time. Appreciate guys. Okay. Thank you, the

Operator

David The Please next from comes from ahead. Zazula Barclays. question go

David Zazula

of converted due potential respect potential to the taking to convert you’ve had my opportunity traffic that Mike, with benefits opinion can question. that's line? additional for the traffic thanks CN be KSU along additional for some merger? changed your you on data to Has line as Hey, the that May review

Mike Upchurch

Is to that a question the specific synergies?

David Zazula

long-term thinking just I'm broadly on as. No, think how I guess more you is convertible much

Mike Upchurch

can we've somewhere Yeah. has go Kansas always is to good that company interesting. job use that's on CN Laredo, single to around I And, is X% environmentally place, opportunities combining market line establish move service of shippers, we exist themselves can we that service. Detroit attraction to done line challenge the done that modes But have more or the truck, other being think present premium of evaluating Well, growing places share very say the interesting business think highway think I market like there a moved the market for the that terrific the how a over share, bottom you service with measure effectively Chicago, Toronto, to the that possibilities. CN. and here. City business But business with increase out or we've And often in is years. compete that's we interesting is opportunities and depending will think job business a it's and that combined really the new friendly. that. cross-border a we are our We systems of various by dramatically of And intermodal don't the off is. at in far cross-border, of We an intermodal Not any of short provide it doesn't which X% the we today. had not

to So, think there two and offer beyond line it a I that's are new at And shippers example. tremendous opportunities segment by service great the we've companies provide segment that's and options. for that, think more single pro-competitive, looked

David Zazula

guess. some want any Thanks. of changed, planning Have to least in terminal the at yet? place? intent merger your for And has capital facilities and of put potential response you is that composition the additional that maybe level might of kind and plan, Or, in not kind or I capital just kind to noting plan, of preparing the growth not changed you

Mike Upchurch

John mean, was his we're have a we projects minuses. I'd the team few some executing with recently our and always say here against pluses there. really. I And railroad and out Not plan. on and

that growth that the opportunities on. John's We've to trust additional in reason and closing. closing And after agreement We we've as spend to merger in than a that before projects take generally, we see continue both don't what company, why on guided operate plan. any CN’s the got but voting add opportunity needs few, scale independent us to voting obviously, back. offered away, execute there would still few event trust you to externally, you So an a more team we're are that or

we've agreement. forward So changed. plans yeah, have under lots merger And got of going the our not flexibility really

David Zazula

a lot. Thanks

Mike Upchurch

You bet.

Operator

any like question-and-answer over the turn Ottensmeyer concludes I back closing to remarks. our would This session. conference for to Mr.

Pat Ottensmeyer

is very Hey, thank Obviously, the service for questions. all. you and growth Thank as supply are beyond. environment things us, Hopefully, across America improving you us realize operational of and one for confident the North very as a and challenging that for your hard well heard performance. those you today on we of that to focused front We opportunities that opportunities. our very in feel about are working chains

So, thanks again to soon. again look for you seeing all your attention, forward I and

Operator

presentation. The conference Thank you now has attending concluded. today's for

You disconnect. now may

Kansas City Southern (KSU) 16 Jul 212021 Q2 Earnings call transcript