Good afternoon. My name is Julianne, and I will be your operator today. All participants are now in a listen-only mode. At this time, I would like to turn the call over to Tracy Robinson, CN's President and Chief Executive Officer. Ladies and gentlemen, Ms. Robinson.

Thank you, Julianne, and good afternoon, everyone. We're here in Memphis today. We've had our Board meetings over the past two days and have had an opportunity to spend some time visiting our local facilities. Now we did a pre-recording of our prepared remarks over the weekend. But before we play those remarks, we received some very sad news today about the loss of one of our engineering employees. Early this morning, there was a motor vehicle accident in British Columbia. A semi-truck collided with the CN engineering vehicle with two employees on board. We are deeply saddened that one of our CN family members suffered fatal injuries as a result of the accident and died at the scene. The other employee traveling in the truck was taken to the hospital with critical injuries. I understand he’s now in critical, but stable condition. Our prayers are with him and his family. The second group of CN employees were traveling behind the first vehicle and were the first on the scene to respond. They showed tremendous courage and compassion in a critical situation, a very tragic and painful loss for all of us at CN and our hearts go out to the family affected. Before we move on to the business today, I want to remind all CN employees and everyone listening in today to take care of yourselves and those around you, stay safe. So operator, could you please start the pre-recording with Stacy Alderson, our Head of Investor Relations.

Good afternoon, everyone, and thank you for joining us on CN's first quarter 2024 financial and operating results conference call. Before we begin, I'd like to draw your attention to the forward-looking statements and additional legal information available at the beginning of the presentation. As a reminder, today's conference call contains certain projections and other forward-looking statements within the meaning of the U.S. and Canadian securities laws. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied in these statements. They are more fully described in our cautionary statement regarding forward-looking statements in our presentation. After the prepared remarks, we will conduct a Q&A session. I would ask that you please limit yourself to one question. The IR team will be available after the call for any follow-up questions. Now joining us on the call today are Tracy Robinson, our President and CEO; Pat Whitehead, our Chief Network Operations Officer; Derek Taylor, our Chief Field Operations Officer; Doug MacDonald, our Chief Marketing Officer; and Ghislain Houle, our Chief Financial Officer. It is now my pleasure to turn the call over to CN's President and Chief Executive Officer, Tracy Robinson.

Thanks, everyone for joining our call today. Q1 was a solid quarter. It played out as we expected and has set us up well for the growth that we see ahead of us. I'd like to start today with a few words related to last week's press release on Remi and Doug's transition. Firstly, I want to thank Doug not only for his many years of service to CN, but especially for his leadership and his wisdom over the last two years. You've done a great job, Doug. The recrafting of our book of business as we move back to the scheduled operating model and setting the commercial team up for continued success. And I want to personally wish you health and happiness in your retirement. We've been intentional about Remi's transition, starting with some pretty intense field exposure since he joined in January, followed by a deep dive into the commercial organization. He's a great fit with our team, and he's going to bring a new perspective to his Chief Commercial Officer role, especially having been in the customers’ shoes. He's in the room with us today, but he's not mic'd up. He'll be in the seat next quarter and spending some time with the investment community in the coming months. Now before we get into the details of the quarter, I know that TCRC negotiations in Canada have been on the minds of our customers and our employees and some other stakeholders. I want to provide a little context to what's happening. It’s important to us that we have an agreement that ensures the availability of our crews to run trains on time, in support of our customer service commitments and to support the growth of the industries we serve. It's also important that we can offer to our employees a predictable schedule with guaranteed days off that supports safe operations and allows them to plan and to live their lives. This improves the attractiveness of our work as we engage the next generation of conductors and engineers. The introduction of the new Canadian duty and rest rule last year, stacked on top of the provisions already in our collective agreements, has had a negative impact, both on the availability of crews to run trains and on scheduling for our people. In this round of bargaining, we're endeavoring to improve the predictability of when our train crews will work and when they’ll be off. It’s an important part of improving safety, providing more predictability to employees on when they'll work, giving them better work-life balance, and improving crew availability to support a consistent service for our customers and supporting the growth of the Canadian economy. We have this kind of agreement in the U.S., so we know how effective it is. We're continuing our constructive discussions with the TCRC leadership, and we remain focused on reaching a negotiated agreement. I hope that gives you a good sense of where we're at. Turning now to the quarter. As I said, it has come in as we expected. Safety continues to be an area of intense focus, that's going to speak to our performance on the quarter here. We are committed to improving our safety performance and advancing towards our goal of zero harm. On the operations, velocity and speed were solid this quarter despite some colder temperatures in Western Canada this year, some congestion in Vancouver, and a dip in crew availability related to the new Canadian regulations. I am proud of how we've performed and how we've adapted to the plan to align with what’s coming at us. Customer service remains a top priority, and I want to call out local service commitment performance. This is a key customer-facing metric, and at 92%, it improved 6% versus last year. Volumes are firming up. We're seeing momentum building. Doug will speak to end market performance and the outlook for the balance of the year, including updates on our CN-specific initiatives. These projects are lining up quite nicely, giving us increasing confidence in our volume outlook. As we know, we're up against a very strong performance last year, which included $0.10 of favorable fuel surcharge lag. So I'm pleased with our solid EPS of $1.72. This is right where we thought we'd be after three months. I'll leave it to Ghislain to walk us through the first quarter financial highlights in just a few minutes. But we are right where we want to be. The team is gelling, the operation is performing, and volumes are on the upswing. Putting it all together, I'm very happy with the direction we're headed and want to reaffirm the guidance we issued in January. I'll now hand it over to the team. Pat, you're up.

Injury and accident rates increased in Q1, despite our best efforts. Intense winter weather poses increased safety exposures. We have seen improvement in April and are now tracking in line year-to-date with CN's lowest ever frequency ratio in 2023. One area I want to highlight in our safety performance is slips, trips, and falls, which increased in the quarter. So what are we doing about it? We're addressing slips, trips and falls with several actions. The first I'll cover is our recently deployed walking simulators at our training centers. We've seen 30% fewer walking injuries with employees who have been trained with this tool. We're going to be deploying a mobile version of this simulator out to our workforce in the field. We've also rolled out our Enable OnGo app to the entire workforce, which is our hazard and near-miss reporting system. We've received and corrected over 3,300 hazards utilizing this system since its deployment in 2023. Now before I discuss the network, I want to address some of the comments that have been made recently regarding CN removing safety-critical rest in our current negotiations with TCRC. This is just not true. To be very clear, we successfully implemented the duty and rest period rules that were mandated in Canada in May of 2023 and have been in full compliance with these rules. We have managed operations accordingly. What we are doing is working to simplify the complexity of the stacking effect we experienced beginning in 2023 of the additional paid sick and personal leave days under the Canada Labor code, the duty and rest period rules, and the unavailable time provided by the legacy collective marketing agreement. We are fully committed to providing sufficient rest for our employees, and we will continue to work with our union partners to find solutions that benefit our employees and our customers. Now turning to the network. We remained largely fluid this quarter despite more impactful winter weather this year. While our scheduled operation gives us improved resiliency, we were challenged in certain pockets as the newly mandated work rest rules impacted labor availability. As for volume, we are currently seeing what we believe is a sustained increase in demand for intermodal volumes on the West Coast, which has increased existing train size to the point that we have added a combined additional eight trains per week out of Vancouver and Prince Rupert in April. To support the growth we see coming our way, we will continue to invest in network capacity in key corridors, what we call no regret capital. In 2024, we are on track to complete additional double track along our Vancouver to Chicago corridor, and we will finish a siding extension project, West of Kamloops, British Columbia. This will increase our capacity in this busy corridor and help alleviate some of the congestion we see from time to time in and out of Vancouver. I'll now ask Derek to speak about field execution in the first quarter.

Thanks, Pat, and good afternoon, everyone. Time and again, we've seen that our make the plan, run the plan, sell the plan model is the right one for our network. As you heard from Pat, Q1 had a number of ups and downs. January brought an extended cold snap in Western Canada that we recovered from in short order. Interestingly, in February, we had some ideal operating conditions and demand started to pick up. Then in March, Mother Nature reminded us that winter wasn't over yet on the northern part of our network. During that March time period, we also had a combination of continued strengthening demand, along with the beginning of work block season, particularly in the Edmonton to Vancouver corridor. In fact, daily train counts in that corridor are now approaching our 2018, 2019 high watermark years. These work blocks are critical for us to comply with and complete as they will support growth and fluidity going forward. However, they did cause some additional pressure in and out of the Vancouver gateway. Importantly, we've kept our yards fluid, which has enabled us to maintain a high level of service for our customers. In fact, our local service commitment performance or LSCP improved 6% versus last year to 92% for the quarter. Running the plan as the team is focused, and I'm really pleased that a few weeks into April, speed and velocity are back in line where we need them to be. We've got good operational momentum. So as volumes continue to ramp up through the year, we expect to deliver incremental operating leverage, particularly in terms of our manifest trains, which have room for growth at low incremental cost. To wrap it up, I'm convinced that continued strong alignment between the operations, marketing, and finance teams is key for us to grow profitably. This is a team effort. We're making sure there's tight coordination across the entire organization so that we have the capacity and service in place to keep delivering for our customers. Now, I will turn it over to Doug.

Thanks Derek and thanks, Tracy, for the kind words. I've been fortunate to spend my entire career at CN, and it has been a gratifying 35-year journey. I am thankful to all of you around the table, as well as the many others in and outside of CN for their support and help. I leave knowing that the team is well set up for the future. Looking at Slide 11, first quarter revenues were down 1% versus last year due to lower applicable fuel surcharge. We had solid pricing ahead of CN's cost of inflation. RTMs, our standard measure of volume, were flat in the quarter, as higher shipments of potash, refined petroleum products, frac sand, international intermodal, and natural gas liquids were offset by lower shipments of coal, grain, forest products, and crude oil. Petroleum and chemicals led the way in Q1 at 6% RTM growth, with record volumes in refined products and natural gas liquids. Q1 crude volumes were down year-over-year, but we expect them to move higher sequentially for the rest of 2024 from new business to the Gulf Coast. Our strategic investments in Northeast BC are paying off with stronger frac sand volumes, which drove a 4% increase in metals and minerals RTMs in Q1. Aluminum volumes also increased in the quarter due to market share gains from truck, given our consistent car supply and service. We also had new raw lithium interline shipments with the UP to Texas for battery production. Forest products RTMs decreased 5% in the quarter, but center beam orders for lumber have increased sequentially since Q4 last year. Our bus car fleet remains nearly sold out, indicating solid demand in multiple segments. In the bulk sector, Canadian coal was down 20% from production problems at several mines, while U.S. coal was down 23% from softer export demand for thermal coal. Grain and fertilizer RTMs were flat overall, as strong potash growth in Q1 fully offset softer grain volumes. Canadian grain demand was strong all quarter. We moved record grain tonnage in February, and there's pent-up demand heading into Q2. U.S. corn volumes decreased versus last year due to muted domestic and export demand. Automotive RTMs were up 6% on stronger Vancouver imports despite a slow start in Q1 from delayed new product launches. All plants are running normally now. Turning to intermodal. International was up 5% for the quarter, continuing the steady upward trend we've seen since Q4. Import RTMs via the ports of Vancouver and Prince Rupert are up 12%, as U.S. destined traffic returned after last summer's West Coast Canada strike. Port of Halifax volume was down due to Red Sea impacts. In Q1, we lapped the remaining comparable container storage revenues, roughly a $35 million impact this quarter, which negatively impacted revenue per RTM. Domestic volume was down 3% on ample truck capacity. Let's move to the outlook on Slide 12. The North American economy continues to be supportive. International intermodal continues to strengthen with strong service and dwell times at our ports. The Canadian export development at Rupert is well underway, as well as land clearing for the Ridley Island Energy Export Facility. We are also expecting to see a gradual recovery in the domestic intermodal markets as capacity exits the over-the-road segment. Automotive demand remains strong with some OEMs pushing back the timeline for retooling their plants for EV production. In bulk, Canadian met coal mines should return to full production. In addition, Conuma’s Quintette mine will start this summer, and the new Valerie mine is delayed until 2025 due to permitting. U.S. export thermal coal volumes will be challenged with low global demand and a surplus of natural gas. In terms of grain, we expect more oil and meal production from new and expanding crush plants in the second half. Our IANR acquisition, which remains subject to SCB approval, will create further volume growth for U.S. grain. Potash demand remains firm, but we expect lower volume in the balance of 2024 as we lap last year's Portland terminal outage. Our CN-specific growth projects are advancing as expected. In Northeast BC, our growing frac sand market for natural gas drilling also produces propane for export via Prince Rupert. New frac sand terminals are expected to be announced in the coming months to grow the market even more. Partnership initiatives like the EMP program, Falcon Premium, and Crowley service in Mexico, and access to Gulfport will deliver intermodal growth in the second half and beyond. CN's new fuel terminal at our yard in Toronto has received its first cars and ramp-up is commencing in May. Construction took a little longer since some Phase 2 construction was advanced to minimize downtime later in the year. Both Phase 1 and 2 are now sold out. We also moved our first steel cars into our new transload in Flat Rock, Michigan, which is all truck to rail conversion. We've come through the first quarter of 2024 in great shape with excellent service for our customers and a strong pipeline of significant growth opportunities that are starting to deliver. I want to recognize Remi, who has spent the last few months getting up to speed with the great CN people across our network. He'll be ready, more than ready for our next quarterly call. Over to you, Ghislain.

Turning to Slide 14. In the first quarter, we executed and delivered a financial performance in line with or maybe even a bit better than planned. Volumes in terms of RTMs were flat on a year-over-year basis, while our revenues were down roughly 1%. We delivered operating income of around $1.5 billion, 7% lower than last year, with a more winter-like operating ratio of 63.6% versus 61.5% last year, up 210 basis points. The first quarter EPS was $1.72 versus $1.82 for the first quarter last year, down $0.10 or 5%. Recall that last year, we had a favorable fuel lag tailwind of around $0.10 of EPS. We are monitoring fuel prices very closely. OHD, which drives fuel surcharge revenue, decreased by 17% versus last year, while our fuel prices driving our expense decreased only 6% year-over-year in Q1. In terms of expenses, labor was 10% higher versus last year, driven by 3% higher average headcount and general wage increases. Fuel expense was more than $40 million lower than in the same period last year, mostly due to a 6% decrease in fuel prices that I just mentioned. Our effective tax rate in the quarter was 24%, which is a bit lower than the guidance we provided in January. This was mostly due to the excess tax benefit on incentive compensation booked in the first quarter. We had anticipated this benefit in the quarter, so we will expect our effective tax rate for the full year to be around 25%. We generated around $530 million of free cash flow in Q1, about $65 million lower than last year, mainly due to higher capital expenditures, partly offset by higher net cash from operating activities. Under our current share repurchase program, which runs from February 1, 2024, to January 31, 2025, we have repurchased close to 3.5 million shares for almost $600 million as at the end of March. Our leverage ratio increased to around 2.4 times at the end of the first quarter. This increase is largely due to timing and reflects the atypical quarterly earnings trend in 2023. We expect the leverage ratio to decrease as we move through 2024 and earnings increase sequentially. Moving to Slide 15, let me provide some visibility to 2024. With economists’ sentiment on the macro environment improving sequentially, we continue to believe that the broad economy in 2024 will be more constructive than last year, with slightly positive industrial production growth and interest rates stabilizing. However, the environment remains quite volatile with continued monetary policy and geopolitical risks. Weak sectors, particularly intermodal international and forest products, continue to improve sequentially. We continue to assume that Canadian grain will come back to a three-year average in the second half of the year. We have good visibility on our CN-specific growth initiatives that account for half of our mid-single digit volume growth assumption in terms of RTMs, and these initiatives are diversified both from a commodity and geographic standpoint, and they are advancing per plan. Foreign exchange for the year continues to be around $0.75. Our WTI assumption is now in the range of $80 to $90 per barrel versus the previous range of $70 to $80 per barrel. With this in mind, we are confident that we will deliver 10% EPS growth in 2024 versus 2023. So in conclusion, let me reiterate a few points. We continue to deliver strong operating and financial performance. Our customers continue to benefit from our excellent service. We are encouraged by the positive direction of the macro environment. End market demand in most of our segments, importantly, intermodal international and forest products continue to show sequential growth. Our CN-specific growth initiatives are advancing and delivering as planned. We are committed to delivering operating leverage. We are confident in our EPS growth of around 10% this year versus 2023. Let me pass it back to Tracy.

Thanks, Ghislain. We're ready to take questions now.

Thank you. We will now begin the question-and-answer session. Our first question comes from Steve Hansen from Raymond James. Please go ahead. Your line is open.

Yes. Good afternoon. Thank you for the time. Look, I was hoping you could provide some additional color here on the international intermodal segment of late, seen some really good outsized growth there, but also seeing an increase in shipping length that looks like a distance halt. Just based upon your discussions with customers, what kind of visibility do you have on that sustaining through summer into the back half of the year?

Thanks, Steve. It's Doug. So we're seeing some great growth on the West Coast. Customers have really come back there after the strike last summer. We're seeing lots of growth in Vancouver, but we're also seeing it start to push up to Rupert. So that's working really well, and I think you can see that in the numbers. The customers are very confident that that's going to continue moving forward. They really like the service and the dwell time they're seeing from us. Now when you shift over to the East Coast, it's a little bit different story. They have more of an impact because of the Suez Canal. They're routing the boats around south of Africa and they come back up, which doesn’t impact the Canadian business, but it does impact the U.S. business because they’re going to buy a bunch of U.S. ports where they can offload that business there. So we’re seeing a little bit down at Halifax, a little bit down at Montreal because of all that. And we’re just hoping that, that will come back once that issue in the world gets cleared up. Thank you for your question.

Appreciate the color.

Okay. Thank you. Doug, congratulations on your retirement and thanks for all the insights and help over the years. My question is on pricing. You mentioned pricing ahead of inflation, what is inflation first, just to kind of help us benchmark what the pricing environment is like? And also, given kind of the strong demand we're seeing both on your network and your competitor network, is the pricing firming up? Do you expect that we could start to see some firming up in the pricing as we move through the year?

Thank you, Fadi. Overall, we are still managing to set prices above rail inflation. However, we are beginning to notice some pressure in the domestic intermodal sector due to current truck capacity issues. There is significant surplus capacity, and we anticipate a decline in North America as more shops go bankrupt and reduce that capacity in the market. This is the only area where we are seeing pressure. In terms of how we measure this, we continue to use the all-inclusive index minus fuel for our rail cost benchmarking. Thank you for your question.

Good afternoon. I want to discuss the comparison against the strikes and understand the specific initiatives for CN. You mentioned that there's minimal economic growth in the mid-single digits. It seems like some of the CN-specific issues were delayed. You talked about a coal field and someone mentioned that the auto field was delayed, but Phases 1 and 2 were sold out. I'm curious if that affects the growth outlook or if those areas are set to recover. I'd like to know more about the CN-specific growth initiatives to reach that target. Thank you.

Thanks, Ken. Everything is progressing according to plan. We have experienced a delay in one ongoing project this year, specifically the facility in our Mac Yard for Eastern fuels. We postponed that project to incorporate additional construction and sell out Phase 2. If we hadn't made that decision, we would face more interruptions in Phase 2 later this year and into next year, which we wanted to avoid. It was more economically sensible to address this upfront. Additionally, we secured further commitment from the customer, so that project is advancing well, and we will recover those volumes. Regarding the Valerie coal mine, we had limited volumes for this year, primarily focused on the next couple of years. Once the permitting is completed in the next few months, we will proceed with that project. Remi will provide an update during the next call. Everything else appears to be functioning smoothly, and I don't anticipate any other issues. I believe the projects will deliver as projected, and the economy is stable. I wanted to emphasize that to the community. Thanks for your question.

Thanks very much. Good afternoon. And Doug, all our best to you in your retirement. I wonder if there's a way that you could help us frame how much the CN specific growth opportunities added either volume or revenue in the quarter? And in terms of the relative importance of each that you're expecting for the year, are they basically listed in rank order of importance, the way that they're listed on Slide 11?

Thanks, Cherilyn. They're not listed in any order. We just kind of go through them. We don't really give guidance per specific projects out there. We have given some specific updates as to where we expect them to be on the list that we gave at Investor Day last year. So I'm sure the team can probably help you out with that after the call and say, here's where we're on each single one, but it's a little much to go into right here. Thanks for your question.

Thanks. Good afternoon, everyone. So I think the tone of this call is surprisingly bullish in this environment, especially given what you've seen from other transportation companies that we've heard so far. Do you guys have like evidence or more confidence in the cycle inflection in the back half of the year that's giving you that confidence? Obviously, you spoke of the idiosyncratic catalyst as well. But obviously, you need a macro backdrop to be supportive as well. So just trying to get a sense of how confident you are kind of in that full year number and the environment that's going to power it? Thank you.

Thank you for the question. We are planning for the year while considering the three-year guidance we previously provided, which was based on industrial production around 2%. Industrial production is showing more positive signs, although it's not at 2% yet. We are monitoring several indicators that Ghislain mentioned, and they give us confidence in an improvement in the underlying economy, which accounts for half of our growth. The other half comes from the specific growth initiatives that Doug has discussed. We are keeping a close eye on everything. Ghislain, do you have any additional comments?

Yeah. I think, Ravi, what makes us confident as well is that these CN-specific growth initiatives are very diversified from a commodity and from a geographic standpoint. So it’s not a one home run type of thing. It’s a lot of different singles. So if we're wrong on one of them on the negative side, we'll be more right on the positive for something else. So it's the law of compensating errors. So the fact that it’s a bunch of different projects, and we have great visibility on these as Doug just talked about, I think makes us very confident that our volume – we will deliver on our volumes. Thank you for the question.

Yes. Thank you very much and Doug, happy retirement and all the best. So one question, obviously, you made some comments about the softness for domestic intermodal, but I was wondering if you could talk about whether there's a different dynamic at play in Canada, given the longer average length of haul. And also, just in terms of headcounts going through the remainder of the year, could you talk about your expectation in terms of headcount given the ramp-up in volume in the second half? Thank you very much.

Thank you, Benoit. I’ll focus on the intermodal specific numbers. In Canada, you're right; we have a longer length of haul compared to the U.S. This gives us some added stability, although we do experience pressure when there's excess capacity, leading truckers to lower their rates, which affects our pricing. However, due to that longer length of haul, we’ve managed to maintain our position fairly well. There will be instances where we lose some market share and others where we gain it, which is a normal occurrence. We’re not overly concerned about this, and we believe that the business we’ve temporarily lost will return as trucking capacity decreases across North America and Canada. From a headcount standpoint, our team will be able to adapt.

Yeah. I can take that one. So as we look at – keep in mind that as we train T&E employees, it takes six months to nine months to have those folks ready in advance of the volume. So we will see our headcount increase, but it will not be a 1:1 increase. We’ll ramp up for the volume, but be a busy quarter at the training centers, but not a one-to-one increase. Thank you for the question.

Thanks and good afternoon and I echo the congratulations Doug. Maybe just one question on one of the projects you guys highlighted last year at the Investor Day. The Milton project, I think, it seems like the court overturned the federal government's decision to approve that project. Any thoughts on what are you expecting from that? Will that be delayed or will that be cancel them back to the drawing board? Any thoughts would be appreciated. Thanks.

Thanks, Konark. So yeah, it's a complicated issue, obviously. We have filed our appeal, and we expect to have a decision on the stay that we've appealed for in the next couple of months. At that point, we're not going to comment too much. We're going to wait for that to come back. If we're successful there, we will continue building. If we are not successful there, then we will have to decide how we move forward with that project, we are very dedicated to moving this project forward. If we’re going to grow the economy in Canada as well as in Southwestern Ontario, this project is critical. We will have this run forward. Thanks for your question.

Hey, good afternoon. Thanks and Doug, congratulations. I just wanted to figure out or just ask you if you could kind of help us understand coming out of 1Q, we’re flat RTMs, we're still looking at mid-singles for the back half of the year, which is obviously going to have quite a bit of mix in it. Can you just help us understand from where you're looking at the numbers? Like, where is the strength in the RTM is going to come, I know you've got a lot more detail on the CS-specific growth initiatives and the impact of mix here. But I'm just getting a lot of questions about whether that mid-single digit RTM number remains realistic. So if you could help us kind of understand that walk, that would be great.

Yeah. So hey, great question, David. So first of all, you are right. We were flat for Q1, but our whole project and list was geared towards April and on. So as a good example, in April, we're 7% up in RTM so far this month. So we knew that was really going to start to pop. We have the comparables that are there from last year. So we're easily going to be able to top some of them, so we're all set. We know there's going to be good growth in intermodal overseas, and that's what we've been seeing. It's a little bit lighter on domestic. We're seeing some other things pop in other areas. All of these are really just part of the economy as well as part of the projects, combine them all up, we're pretty confident that we are still going to be able to maintain our guidance.

Thanks and good afternoon. So I know the CapEx guidance didn't change overall, but I was wondering if you could provide any update on your locomotive plans for this year as it relates to both new locomotives and modernizations? And in addition to that, the CARB has proposed some regulations in the U.S. I know the EPA is looking at those currently. Just curious if you have any thoughts around what's been proposed and how that could potentially impact your locomotive strategy going forward if passed?

So I'll take that one. This is Pat Whitehead. Our plan is to continue modernizing our fleet. We will maintain our collaboration with Wabtec, and we are also making progress with rail modernization, which is our preferred approach as it involves the most reliable locomotive in the industry at this time. We will keep investing in that area. We are working with both original equipment manufacturers and looking into other technologies for future locomotives. We will stay on this course and continue to utilize the donor locomotives we purchased last year for our modernization program, with plans to convert those in the coming year.

And just let me add a little bit to that, as we finish up today. We are watching CARB very closely and where that is going to go with the rest of the industry. As an industry, this is something that we've got to get our heads around. We have made some investments ourselves on electric battery locomotives and on a hybrid locomotive. But clearly, as we go forward, this is something the industry will collaborate on more fully and decide on the ultimate path. It's an important effort for us and for the industry, and we'll keep you guys in the loop as we go along. Thanks so much for the question. So we'll wrap it up today. And as we do that, I'll reiterate the plan is working clearly. You guys' minds are on growth. Thanks for giving Doug such a good workout on his last call. Our minds are on growth as well, and we're feeling very optimistic around what we see ahead of us. We look forward to talking again with you in a few months. Thank you.

The conference call has now ended. Thank you for your participation. You may now disconnect your lines.