Union Pacific Corp (UNP) Q3 2026 Earnings Call Transcript

Thank you for accessing Union Pacific Corporation's 2026 Third Quarter Earnings Conference Call, held at 8.45 a.m. Eastern Time on October 22, 2026, in Omaha, Nebraska. This presentation and the accompanying materials include statements that contain estimates, projections, or expectations regarding the company's financial results and operations and future economic conditions. These statements are forward-looking statements as defined by the Federal Securities Law. Forward-looking statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. The materials accompanying this presentation include more detailed information regarding forward-looking information and these risks and uncertainties. In addition, please refer to the company's website and SEC filings for additional information about our risk factors.

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

Thanks, Rob. Sorry, I'm rather fast this morning. I'm ready to go. I overstepped you, so hopefully I don't do that to everybody today. Nah, I hope I am. We're ready to go here. So why don't we take a step back and think about where we are as a company and what we're doing. So this morning, my wife, for whatever reason, got me up a little early, okay? So I had a little more time to look at the railroad real close, and the first thing I look at is what's happening to the railroad weather-wise. and bottom line is this is my favorite time of the year to railroad and Eric will tell you the same thing you know engineering programs are in a different place the railroad is well set up you don't have the extremes too much of an extreme of weather and it is a beautiful morning here in Omaha absolutely gorgeous I'll tell you it's a great place to live in a wonderful spot but so the railroad's good now the range of temperature we have is from the low 30s to the high 80s but that's who we are and we have thousands of employees out there right now okay yesterday we had 2.31 billion gtms a product that we moved in this railroad and all the people out there and i got to congratulate them on the quarter that we had so very excited to share with all of you uh who we are what we're doing and one thing we're not changing is the key pillars that we have safety for us is the foundation and eric will take you through some of the detail but where we are this year on an injury rate improvement from last year where we are in the derailment rate significant improvement from last year that continues all the work we've done is very exciting as a foundation of everything that we do and listen safety for us is more than just a number It's about people going home exactly the same way as they showed up when they came to work, and it's the movement of the goods that we have for America. We are moving products across the western states and pretty soon across the entire country that just helps the economy and helps businesses move ahead. So I love where we are, safety, and I know Eric's got some more detail on that as we move ahead. And service, absolutely I love where our service is. is we're delivering what we sold the customer and what we agreed to. And operational excellence, I see numbers in detail that I had a chance this morning to spend probably a half an hour, usually it's five minutes, on that show me that the number of cars that missed their plan, that we call 32-hour cars, is like 15% lower with business up. The number of locomotives we have out there running and operating don't match the amount of business increase, meaning we have way less locomotives operating, so much more efficient with them. The way the cars are turning, the car velocity is exactly the same as it was last year at this time with increase in business to show the resiliency of our buffer and how we handle traffic. So I guess if I don't stop there, I might as well just tell everybody to keep quiet and we'll just go to questions and answers. But let me, real quick, tell you who's here with me. Our chief financial officer, of course, Jennifer's with me every quarter. Love having her here. She's next to me. Kenny Rocker, executive VP of marketing and sales, always in the right spot right there to my right. And across the table, Eric Geringer, our executive vice president of operations. And I can't be prouder of what the team has done. If we can turn to slide four and quickly review. So this morning, Union Pacific reported record financial results as net income total of $2.1 billion, and our adjusted earnings per share grew 15% to $3.53. Union Pacific's third quarter results demonstrate our ability to safely deliver the service we sold our customers while efficiently handling 6% volume growth. Higher fuel prices, we're a big cost driver, but when we take out the impact of fuel price and merger costs, our core operating ratio improved 110 basis points from last year. Now, I'll let the team walk you through the results in more detail, and then I'll come back to talk about the Q&A and maybe a quick wrap-up before we finish the call. And, Jennifer, all yours with some of the details on the financials, please.

All right. Thank you, Jim, and good morning, everyone. I'll begin with our third quarter income statement on slide six, where operating revenue of $7.2 billion increased 15% versus last year. Digging into the components of our growth further, freight revenue totaled $6.8 billion, up 15% on 6% volume growth. In addition, higher year-over-year fuel prices and the related fuel surcharge added 900 basis points to freight revenue. Although our quarterly pricing gains continue to exceed our inflation dollars, that contribution from price was masked by business mix, as nearly 75 percent of our quarterly volume growth was from domestic and international intermodal traffic. Wrapping up the top line, other revenue increased 21 percent to $384 million, as higher intermodal volume contributed to increases in both accessorial and subsidiary revenue. Turning to expense, our appendix slides will provide more detail, as our total operating expense increased 15 percent to $4.3 billion, primarily from the higher diesel fuel prices. Compensation and benefits expense increased 4 percent, as cost per employee was up 5 percent, driven by higher wages, incentive compensation, and training costs. Offsetting some of that cost pressure was a 1 percent decrease in headcount against that 6% volume growth, enabling us to generate our ninth consecutive quarter of record workforce productivity. Fuel expense grew 69% on a 64% increase in average fuel price and 4% higher gross ton miles. Year over year, our price per gallon increased from $2.56 to $4.21 and added 140 basis points to our operating ratio. Purchase services and material expense increased 9 percent as a result of inflation, intermodal related costs for our loop subsidiary and the railroad, as well as cost to add surge locomotives to the active fleet. These increases were partially offset by lower year-over-year merger costs. Equipment and other rents declined 3 percent versus 2025 as we more than offset the impact volume growth with lower car hire and operating lease expense. Putting it all together, we had a record quarter with reported earnings per share of $3.49. Adjusted for merger costs, earnings per share totaled $3.53, and our operating ratio was 58.8 percent. Turning to cash returns in the balance sheet on slide seven, our record financial results translated into 18 percent growth in cash term operations to $8.3 billion. Free cash flow totaled $2.4 billion after we reinvested in our network and increased our third quarter dividend 3%, the 20th consecutive year providing our shareholders with an annual dividend raise. We finished the quarter holding $3.1 billion between cash and short-term investments and with an adjusted debt to EBITDA ratio of 2.4 times. We will continue growing our cash reserves in anticipation of closing the Norfolk Southern merger in the second half of 2027. Looking out to the remainder of 2026 on slide 8, we are affirming our outlook of reported EPS growth in the high single-digit range versus 2025's reported EPS of $11.98. And as a quick reminder, that $11.98 included 30 cents from a fourth quarter land sale. We are also affirming our ability to continue improving our core operating ratio in 2026 and leading the industry. Our 2026 reported operating ratio remains challenged by higher fuel prices as we are currently expecting prices to average around $4.85 per gallon in the fourth quarter. We are also updating our capital spend to $3.5 billion for 2026 as we invest for growth and pull ahead some of the capital work planned for 2027. Overall, we're delivering strong financial results in 2026 as we consistently execute on the three key levers for our railroad success, volume, pricing, and productivity. I'll now turn it over to Kenny to provide an update on the markets.

All right. Thank you, Jennifer, and good morning. We delivered a record revenue quarter with freight revenue increasing 15% to $6.8 billion. Excluding fuel surcharge, freight revenue grew $5.6 billion. That's the result of our team at Union Pacific winning in the marketplace, pricing to the value of our service product, and executing for our customers. We talked about the key drivers for each of our business groups. With our bulk segment here to last year on flat volume, short grain demand, global fuels, these gains were partially offset by lower wheat shipments, resulting from a softer heart. as lower natural gas prices and elevated inventories move into industrial. Revenue was up for long service products, industrial car loads, and freight revenue, excluding fuel. We saw growth in all construction project wins located in Leeds. We also benefited from sustained strength in our domestic, driven by business development wins across petroleum, binary utilization, record levels. for the quarter increased on a nine percent increase in volume and set a record and freight revenue excluding fuel domestic intermodal deliver consecutive record quarter in both volumes development and the deployment of buffer resources sent volume growth versus last year we saw strengthened auto parts driven by growth at the slide 11 grain and grain product positive impact from new facilities, including Bungie and 5B, both in Dalhart, Texas. Our industrial development pipeline in this market remains strong. In fact, I recently took part of CHS's new. We also see continued upside from renewable fuels and feedstocks supported by further policy certainty. Lower natural gas prices and elevated inventories will continue to be a challenge. Our pricing discipline is a market-driven decline. It's on winning new business and outperforming industrial production in metals, our construction projects, and domestic steel production. We are excited to see the Golden Triangle Polymers plan and startup activities towards full operations, global supply. Overall, we expect continued momentum supported by our strong service product and the investments we've made in the Gulf. And wrapping up with premium, Domestic Intermotor is on track to double digits, and the poor automotive we expect business wins to continue to offset markets. While we delivered a record third quarter, our focus is to build upon that it's a pricing to the value of our service for new opportunities across the network. And with that, I'll turn it over to Eric.

Thank you, Kenny, and good morning. The team operated at a consistently high level, safely supporting 6% volume growth while providing strong service for our customers. By remaining agile and strategically deploying resources, we overcame weather-related and seasonal network challenges and improved network fluidity. Importantly, we continue to be disciplined and committed to personal injury and derailment prevention efforts as our employee safety and derailment rates both improved against our three-year rolling average. Moving to slide 13. The majority of our key operating metrics improved in the quarter of 2026, even as car load volume increased 6%, reinforcing the importance of maintaining surge resources and highlighting the resiliency of our network. Freight car velocity increased 1% to 228 miles per day, driven by a 2% improvement in terminal dwell. This marks our fourth straight quarter of terminal dwell below 20 hours, demonstrating our ability to run an efficient network while handling higher demand. We delivered the service we sold to our customers. Intermodal Service Performance Index finished at 92% as intermodal volume grew 11%. We responded quickly to capitalize on the improving freight market by unstacking containers and utilizing our buffer of resources. Manifest Service Performance Index finished at 93% against best-ever industrial car loads. While these results reflect solid execution, we continue to see opportunities to perform even better. We know what is possible, which is why our Service Performance Index is set to continually challenge the team by setting the threshold at our best monthly performance. Moving to slide 14. Operating discipline and consistent execution of the fundamentals drove another quarter of record workforce productivity, record train length, and record fuel consumption. Locomotive productivity of 140 gross ton miles per horsepower a day was even with last year's record third quarter. The active locomotive fleet increased 2% to handle 4% higher gross ton miles, demonstrating strong asset efficiency. Additionally, we continue to benefit from our ongoing locomotive modernization investments and fuel conservation initiatives, as our fuel consumption rate decreased 2% and set a new quarterly record. Workforce productivity improved 5% as our active train, engine, and yard workforce increased 1% against 6% higher car loads. We remain diligent in our hiring approach, aligning resources with demand while delivering for our customers. And finally, we continue to safely increase train length, which improved 2% to nearly 10,000 feet. This remarkable progress is supported by technology improvements and mainline capacity infrastructure investments that enhance network efficiency. These results are a testament of our unwavering focus on safety, service, and operational excellence. The team is well-positioned to serve our customers and empowered to raise the bar on what's possible. With that, I'll turn it back over to Jim.

Thank you, Eric. Thanks everybody. Great presentation on who we are and what we're doing. So listen, before I tidy this up and get to the questions, which is the part I'm looking forward to is the real smart questions we're going to get this morning, I'd like to talk about Jennifer, my favorite CFO and the person that's been by my side since I came back as CEO. I've known Jennifer and I met her first in 2019 and then when she took over as CFO in 2020. And she is grounded, tough, sweet, tough, and tough. So I find that to be a perfect mix. And she has delivered for this company for many years. And I have to thank her for extending her stay a year longer than when I came back to work. She was going to stay for a couple of years and then depart, and she's been with me for three years, and we'll finish off early next year. So I can't be more pleased that she's going to go enjoy herself and do things with her and Kippy and enjoy life a little bit. I know she's going to miss me, and she's going to miss this railroad, and who knows? You know, it's just October, so we'll leave it at that. But, Jennifer, thank you very much for everything you've done.

Thank you, Jim, for the very kind words.

No, no, I speak truth. If you were awful, I would have just said, thank you very much. Away you go. Go enjoy yourself and don't come watch the door as it hits you in the back. I'd be gone by now. That's what I'm saying. So listen, Jennifer, in all seriousness, you've done a spectacular job for this company, seeing all the things that it's been through, and you've been very helpful on the merger and everything else we've done. So congratulations to you. But I wouldn't mind real quick, just before I get to the question, summarize what you've heard and make sure that everybody's clear and provide a quick update on the merger with Norfolk Southern. Our third quarter results reflect the strength of our franchise and our ability to execute at a consistently high level. Six percent volume growth and 110 basis points of core operating ratio improvement don't just happen. It's the result of a long-term execution of our strategy, and that has enabled record financials and reinforcing our position as industry leader year to date in 2026 we delivered reported earnings per share growth of nine percent exactly in line with our outlook of reported high single digit growth we are focused on what's possible delivered at the highest level and winning even more business as to the status of our merger with norfolk southern the surface transportation board published a procedural schedule based on the schedule we should be reporting our first earnings as a merged company a year from now we also have requested for the second time ex parte communications that's lawyer talk jim vena talk is we are more than willing to have open discussion with the stb for any information they need or if anybody at the stb or others want us to take through all the detail in those 8 000 pages because there is a lot of benefits for the country for our customers, for our employees, and for the movement of goods seamlessly at a faster rate that's in that 8,000-page detail that we've given. So we're hoping that they accept the ex parte and we're able to stop any of this, that we're trying to hold back any information. This is the second time we've done that, and it's real important to think that we have always been open and willing to talk about. And we can hardly wait to see the November 18th openness from anybody that wants to put comments in about who we are and what we've been doing with the merger. Now, we're very confident the merger application and the information we've provided are the most extensive and transparent merger record ever submitted. And it demonstrates through fact and analysis that the best way to enhance the U.S. freight supply chain is through the UPNS combination. Our merger, as I said before, but I'd love to repeat myself on this, will deliver substantial measurable benefits by strengthening the supply chain. It will lower transportation costs and provide faster, more seamless rail service options that enable our customers to compete and help keep goods affordable for American consumers. And you can see it every day, even with the latest announcements from some of our competitors. they know they have to up their game and be better to be able to compete against this railroad when we get the merger approved. And with that, Rob, let's go to questions and answers. Thank you very much.

Thank you, Mr. Venna, and best wishes, Jennifer. We'll now be conducting our question and answer session. To ask a question at this time, you may press star 1 from your telephone keypad, and a confirmation tone will indicate your lines in the question queue. Let me press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We do remind you that due to a number of analysts joining us on the call today, we'll be limiting everyone to one question to accommodate as many participants as possible. Thank you. And our first question is from the line of Chris Weatherby with Wells Fargo. Please receive your question.

Good morning, Chris.

Good morning, Jim. And congrats, Jennifer. I don't want to imply we're getting old, but I think you and I have been talking for a very long time, so well-deserved in your retirement, so wish you all the best. I think I wanted to start maybe big picture on the M&A side, Jim, just where you kind of left off, I guess. How do you think about sort of the receptivity? I know in mid-November we'll get some commentary from all the folks who want to sort of weigh in on the merger, and it'll probably be incremental to some of the stuff we've heard already from some of the other railroads. You obviously were very successful getting an agreement with CN. How do you think about potentially sort of staving off some of the other potential asks by further agreements? I don't know if there's any receptivity that you're sort of seeing out there from competitors or other folks in the industry. I just want to get a sense of how you're thinking about sort of discussions that may be going on in the background with other folks in the industry.

Yeah, Chris, listen, I appreciate the question. And I can't believe you and Jennifer think you might be old, okay? I don't know. I woke up this morning. I was ready to run over anybody that was in my way coming into the office, and I'm a lot older than all of you guys, but that's okay. But let's get through the whole M&A. So I think sometimes we have to make sure that we understand what it is that we're doing. This is an end-to-end attachment between the two companies that give the extent of possibility of how people want to move. This is not a big overlap. We knew we had to fix some of the areas, a very small piece, the St. Louis, Kansas City, and with Canadian National, listen, we have a deal that should be announced, finalized completely right away with all the T's crossed and the I's dotted, and Tracy and Robinson and her team have done a spectacular job of protecting Canadian National, and we've done a good job of protecting Union Pacific, and that deal is just about done, so I love it. But given that, really, there isn't a lot of opportunity to say, what do we trade? Are we willing to trade benefits for the industry? But there is not a lot of competitive benefit that we need to fix within the merger and what we're going to deliver. And listen, I've seen what people have asked for, their very first one, without the detail. and hopefully nobody has their kids on this. I hate to tell people, there is no Santa Claus, okay? So it's not a freebie that you get to go in front of Santa Claus and wish for something that's going to happen on December 25th in the morning and you get it delivered down the chute, okay, the fireplace. Most places don't have real fireplaces anymore, so it's fake. So what they're putting in, their dream is off. it needs to be fact based on what the impact is and it's pretty hard for anybody anybody in this industry other than being selfish for themselves or trying to get something for free and this is going to be a long answer even even some of the unions that are against us that are part of the coalition ask the unions that are in the coalition if they've asked their partners the railroads to guarantee a job for life for every employee like we have okay so So the benefits of what we're doing is across the board for consumers, for the nation, for our employees, and I don't think we're going to have a lot that we have to move. The STB was pretty clear when they approved the Canadian Pacific and Kansas City merger. They handed out no concessions because there was no big overlap and movement. The pattern is set, and that's why I'm looking forward to go through this process, Chris. Sorry for the long answer. Hopefully I answered it.

Always appreciate the perspective, and best wishes, Jennifer.

Thanks, Chris. Our next question is from the line of Jonathan Chappelle with Evercore ISI. Please receive your question. Jonathan, perhaps your line is on mute. Mr. Venna appears he may have lost his line. I'll move on. Our next question will be from Ken Hexter with Bank of America.

Hey, great. Good morning, Jen. It's definitely been a long time since we met back in 2002, so thanks for all your help along the way, and best of luck in your next phase. You know, I guess if I jump into, I guess, looking forward, right, volumes are trending at double digits, quarter to date, so it looks like you've accelerated a bit. Kenny, good job there. But maybe, Jen, dig into the outlook a bit for upper single-digit growth. You're raising your CapEx $200 million. You noted you used your surge resources. So if that growth sustains, maybe thoughts on investments or capital going forward, ability to beat the targets and sustain, given your need to increase the investment and keep pace. And, you know, if you're using surge resources, do you have some left on the side if you continue to get this strong growth?

Yeah, Ken, thanks for the question, and thanks for the well wishes. Yeah, we feel very confident that we have sufficient resources that we can deploy and continue to handle the growth seamlessly and continue to put up the great numbers, the record results that we have done so far. But we're wanting to make sure we maintain that surge buffer. And so that's what I was referencing in the comments around purchase services, is we've put more locomotives into service to handle the growth, still hitting record locomotive productivity, but we want to maintain that buffer because if we get another leg up on the growth, we want to be ready for it. Same with hiring. I think we've got to call it 300-plus folks in training right now because we want to make sure we have those crew resources available. But we are getting, to your point, great volume leverage, and that's what gives us confidence that we're going to be able to finish the year in a very strong manner, putting up, you know, high single-digit earnings per share growth. It's just been a great year. The thing that's been the variable that we weren't anticipating coming into the year is the high fuel prices, and certainly that has an impact on our results, weighs on our margins, but the team is doing a great job in working with that when you think about our fuel conservation efforts and really the fact that rails are so much more fuel-efficient than truck. that's actually enabling us to win even more business and bring it on to the railroad. You know, in terms of the capital, we look at capital over a multi-year period, and some projects you can accelerate, some projects stall a little bit, depending on permitting and all the variables that go into it. We had an opportunity, and I'll let Eric weigh in here, to pull some things forward, and certainly we had the cash resources to do it, and it just made sense to do that this year.

Yeah, and when you think about, Ken, where we made those adjustments, Jennifer mentioned the locomotives. That's an important one. You know that we've been in multi-year contracts in our modernization overhaul of locomotives, and we saw some opportunity because of how well the railroad continues to operate to pull some of that forward. And that's a down payment in the future growth that Kenny's bringing to the railroad. And then the others were some infrastructure-related opportunities that, again, because the railroad is running so well, we saw the opportunity to pull some of those projects ahead. And I'm just going to reiterate Jennifer's point. When we said used, we didn't say used up. We utilized some of our buffer of resources, of which we have many buffer resources still left across the board.

I think you had 589 locomotives excess this morning. That is correct. 289 stores sitting there wondering what the heck you're going to do with them, and the other one's ready to go if we had bulk go up or AGRs or we had an issue. So, Ken, I like where we are. It's pretty exciting right now. Good question, though. I love it.

Appreciate it. Thank you.

Thank you.

The next question is from the line of Scott Group with Wolf Research. Please receive your question. Morning, Scott. How are you?

Hey, thanks. Good morning. I echo those comments to Jennifer. Jim, do the comments from Coaster change your view at all of deal approval, what you need to do to get deal approval? And then just separately, Kenny, I mean, just the yield ex-fuel were flat, and I know there's mix, but I think there's an expectation that with better volume, rising trucking rates, that rail pricing is going to accelerate. Is that a reasonable expectation, and when do you think we start to see that? Thank you.

Yeah, listen, I think you were asking me about one of the four STV members that put out the separate note after they accepted the application and moved it forward. Is that right? is that what you were asking Scott sorry correct yes okay but bottom line is is is if you take a look at what's in the application benefits across the board in far of how we enhance competition how we enhance the product for our customers how we're going to be able to make it less expensive if we're faster if we remove touch points every customer that uses our railroad that used to have to hand it off to somebody else is going is going to have a reduction in supply chain costs it is like automatic it's basic business we see that every day when and we see that every day even today when we go hand off to a short line or hand off to somebody else versus the mileage and what we charge to be able to handle it on our own railroad so that's a given so listen i always take people's position and i read it and i said to myself i wonder if he used ai to summarize the 8 000 pages and all the detail or what but he's a smart guy so he has the position and we're clear and we'd love to have the ex parte discussion with the board to take them through what the benefits are it's up to them if they want to have that or not but we're clear on what our case is Scott it is a benefit for this country and I don't know how many times I have to say it and I'm not trying to say it to make sure people hear me other than to say it's fact Canada has two railroads to go across the entire nation there's a reason for that and they're not split up even though some of them don't like it one of them doesn't like us to have the same thing here and at the end of the day it's a benefit and we are able to provide a better product to our customers and that's what it's all about and that's why this is going to be approved i'm 99.999 sure that it's going to be approved kenny you want to take the second half you ready to go yeah yeah so uh first of all i mean we don't want to lose sight of the fact that we had a record revenue

year x and we've done that in not just one area in a couple places that you heard in my comment you know it's a dynamic market when we're going out there to price Every day we're competing against barge. We're competing against sourcing options. We're competing against truck. There's a lot of competition out there that we have to compete against, and Eric and the team have provided us an excellent service product, and that's what we stand on. And so we're going to price to what the market can support. We want our customers to win. We want to win, too, but we want our customers to go out there and win with the excellent service product that we have. So as the service product supports it, we're going to keep pricing to what the market can support. Thank you very much, Scott.

Thank you. Our next question is from the line of Jason Seidel with TD Cowan. Please receive your question.

Hey, thank you. Hey, good morning, Jim. And I'll jump on the train for saying congratulations to Jennifer and thanks for, you know, putting up with guys like me for the past almost 25 years. I wanted to talk a little bit sort of about now that we're in the merits phase and we're coming up along the comments period. Jim, can you talk to maybe some of the ongoing discussions to, you know, get more people on the side of supporting the mergers, whether they be customers or some of the unions that may not be supporting right now? Is this something that's ongoing, and could we expect some more sort of letters of support, or is this something that we're just going to have to wait for the comments and we're going to look forward from there?

Well, I think it's important that we wait for the comments and see what everybody puts forward and let's talk about the union piece because you raised it Bottom line is is no one has given a guaranteed job for life for any employee Unionized employee in the railroad industry ever every employee and It's amazing. So what are we supposed to give? What else is there to give? We're going to grow the business so there's more employees that work because we're going to have a much more efficient railroad. And the rail unions that understand that benefit signed up real quick. And I don't need them to sign up because, for me, it's more important than our employees. And sometimes I wonder whether the union at the highest level is worried about their employees or worry about the employees, they're our employees that are unionized or they're worried about their union. You know, the Teamsters, listen, trucking is real important to them, and it's truly amazing that we have them part of the against coalition with railroads that have not guaranteed jobs. And, in fact, some of them have been cutting people left and right over the last few months, and they still think that's a better model than being. So I don't know how you make a deal there. And the merits will show that we have a great plan for our employees. We care about our employees, and we want them to win. So that's where I'm at with it. So I don't see us making a deal with anybody. Now, if it gets reasonable, if people want to talk, I'm good. On the customer side, we have over 500 customers that have written letters of support. across this spectrum of, and we don't have very many, if any, just a little number of people that have actually gone into the STB and said we're against it. We have a lot of customers that we've met that say we want to go through and understand through the process, and I'm good with that. That's a smart move for some of them. But we also just had, in the last two weeks, customers that are in the chemical industry that put a letter of support for us, and they're actually single origination with us in Texas, because they see the benefit of that handoff of not happening when we close the deal with Norfolk Southern. So, sorry for the long answer, but I think from the customer side, big support. From the union side, our employees understand it. We just finished a survey of our employees, and the feedback's about as good as it's ever been because they understand what providing, think about it. We hire an 18-year-old because that's who we like to hire, to be one of our people in repairing locomotives, on the track, operating locomotives, tech people, everything else. And we say to them, you're unionized, you've been with us for one day, you have a job for life, And the average pay at Union Pacific, all in with benefits, is $160,000. I'm not sure about anybody else, but unless it's Rich Katz that might be all on this call, okay, there's a lot of benefit for that for everybody that works for Union Pacific. I'm not ready to hurt that. Kenny, you've got your hand up, but where do you go? Kenny's excited. He wants to correct something I said or what, Kenny?

Hey, look, we had about 30 of our customers that are excited about the merger. They're going to be helping us with the feedback that they're looking forward to this happening.

Yeah, I forgot that, Kenny. That's why I got Kenny and Eric and Jennifer with me. I go on and I forget. So I'll try to shorten the answers because otherwise we're going to be here until lunchtime, okay? Away we go.

I appreciate it, Jim. The next question is in the line of Walter Spracklin with RBC Capital Markets. Please receive your question.

Yeah, thanks very much. Good morning, everyone. Jennifer, Echo as well, congrats on the retirement, wishing you all the best. Perhaps this is for Kenny. When we look at your intermodal volumes, they've been very good. We're focused a little bit here on some of the items that both you and Jennifer have mentioned on truck-to-rail conversion opportunity. Can you buy, well, maybe trifurcate here between how that volume growth is coming in, whether you're seeing it mostly in economic, general economic coming out of the freight recession type of driver, is it business wins, or is it that truck-to-rail conversion? Just if you could size it for us, you know, in order of magnitude in those three buckets, or if there's other buckets I'm not mentioning here, but I'd appreciate if you could give that kind of color.

Well, this is great. I appreciate that question. I'm getting excited that I get to trifurcate the volume growth. Just take a step back. Remember, we saw the inflection and the acceleration of these diesel prices. And I said it in my comments. You know, this is our fifth quarter of the last couple quarters. We've seen some things happen with the fuel. So, yes, that has helped us go out and win some business. But before, like I mentioned, this has helped us go out and win that business five quarters ago. And then lastly, you look at some of the investments that we made over the last couple, three, few years. They are paying off, as we thought, as in Kansas City, Inland Empire. Having that capacity, we talked a little bit about resources, and Jim and I debate this all the time. What's the right buffer for our UP rail fleet? We have it. We're 100% on our mutual commitment program for customers on our rail box, but then on the boxcar side, Eric, we're 100% near 100% on car orders. So you put it all together. It's all of it, but it starts with the foundation of a strong service product, the investments we've made in the network. Appreciate that.

Tell everybody what our strategy is completely, Kenny, okay? Just like that. Thanks, Walter.

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

Morning, David.

Hey, good morning, guys. Thanks for taking the question. And, Jennifer, congratulations and best of luck on the next chapter here. Kenny, I wonder if you could help us understand what's going on with the intermodal business in terms of profitability. It looks like the RPUs came in maybe a little bit lighter than we would have expected, just given what's happening in the truck market. I'm not sure if that's mixed on an underlying basis. It also looks like accessorials are elevated and purchase services a little bit up. So if you could kind of give us a sense for, you know, how the business is performing from a profitability standpoint and how you expect it to perform into 2027 as you get around to maybe the contracts resetting, some of the index-based pricing starting to respond to what we're seeing in the truck market, catch up on fuel, that kind of thing. Thank you.

Yeah, so remember, David, we saw a transition in what's going on with the truck rates and truck capacity really over, I'll call it, spring to, you know, summer. Much of the bid season was pretty much baked now. Opportunity as we move several months of 2027 inflection that occurred in the summer. So looking forward, you would expect.

Yeah, and then, David, just on your question or tying in the purchase services, I did reference intermodal volume, so we've got our loop subsidiary, so as intermodal volumes grow with them, we tend to see an increase in some of the drayage costs. That was part of it. You certainly, when you think about our intermodal ramps, they're primarily operated by third-party contractors. As we're putting more volume through those ramps, you see some elevation there. But I think it's also important to point out that on the other revenue line, you saw a 21% increase growth year-over-year there. That really is intermodal driven as well because that's the revenue that you're seeing come through on that subsidiary side as well as some of the accessorals associated with our containers. And one thing to recall for everybody is that's what I think is a big differentiator for UP is not only do we have strong relationships with asset-based IMCs, we also work with the non-asset-based guys because we have our own intermodal box fleet. And that's what Kenny was referring to when he said we've got all the players on the field. But that's been a big plus for us this year.

Listen, thank you very much. Good question.

The next question is in the line of Stephanie Moore with Jeffries. Please receive your question. Morning, Stephanie.

Good morning. Appreciate it. Maybe taking this into a different conversation and first, Jennifer, thank you very much for all the help and working with you over the years. So I guess maybe starting out, you know, Investors, I think, are obviously splicing and dicing a lot of the freight data right now, and I think they're trying to form a broader view on the economy. You've obviously called out some pretty broad-based strengths across industrials, and I think maybe beyond data centers, what are you hearing from customers about demand through the rest of the year? And then on the other side of this, given what we've seen as of late in the food and beverage side maybe being a little bit softer, do you think that's idiosyncratic, or do you think that maybe you're seeing something early on in terms of just the broader consumer? So any color in the volume environment would be great.

So let me start and then pass it off to all three of you that want to comment. Bottom line is it's nice that we see strength in the industrial market, and industrial for us goes across products that Americans use to build things, to move things, to tidy things up, whether it's steel, you name it, is there, including our premium business. And our bulk business is pretty good, right, so the movement of all that. So all that goes across the section. And we have not seen or any indicator of the consumer slowing down that the consumer spends. Is there parts of the economy that are probably facing the higher inflationary pressure? Absolutely there is. But there's a big piece still that are spending money and going out and buying, and that's what we see. And, Kenny, you want to or any of the rest of you get more detail?

I just want to really more or less talk mindset and the results. I mean, we don't come in and say, hey, the economy is, you know, tracking it one way and, oh, from the macroeconomic indicators, industrial production up 1%, industrial team up 6%, automotive down 1% goes in parts, up in the positive, housing starts. They haven't been where they want, where we'd like them to be, but we're going to outperform the macroeconomic indicator. So, yeah, we want to pay attention to it, but our goal is to outperform it.

Great question. Thank you very much.

The next question is in line of Jordan Alger with Goldman Sachs. Please receive your question. Morning, Jordan.

Hi, morning. Yeah, just wanted to come back to fuel, you know, in light of the energy volatility maybe talk a little bit more about what you can do around fuel efficiency ability to to improve on that and then you know in light of the volatility any any impact on the third quarter uh drag can you maybe talk to how you're thinking about the fourth quarter and the fuel impact thanks let me make one point and then eric and jennifer or kenny but especially the two of you get through this bottom line is this is the way we are we railroads are much more efficient we cost us way less per ton to move products across the u.s so when fuel prices go up it's naturally an advantage what we need to do is show all those customers that are

trying us now or deciding they're going to do this that our service level is high enough that they should stay with us and not all of them will as they drop but bottom line is is we see a time for us to show what a high level of service is what consistency is in movement and that the and the cost structure can be better for them and it's better at the end of the day for the final consumer so i like where we are and we'll deal with fuel with the fuel surcharge you know we've got long-term programs that we go in and out with and uh and i think it's good and it's clear and our customers understand where it is building on jim's foundation so then you start thinking about the specific initiatives we have now we're a little bit different than other railroads where

other railroads start by talking about initiatives we start by talking about the fundamentals because when you're trying to conserve fuel or generate productivity or generate capacity it's not about initiatives first it's about the fundamentals so when you see us increase the fleet by two percent but we're handling four percent higher gtms in the quarter that's us executing on the fundamentals. When you see us grow train length 2% to nearly 10,000 feet, that's us executing on the fundamentals that also saves us fuel. Then on top of that, we've got our technology portfolio from our energy management system to our precision train builder that dictates the use of locomotives en route to even when we think about how we manage the locomotives inside the terminals. At 14-hour dwell, which was also a 2% improvement in the quarter versus previous same quarter previous year. We're doing all the things you would expect us to, Jordan, and then we wrap around that as one last layer, our perpetual dissatisfaction with our performance, always challenging ourselves to look for what's the next thing, whether the next thing is new or doing more of the thing that's already making us successful. And in the quarter, it netted out a 2% improvement in our fuel conservation, but we're not done.

So you're actually doing something out there. I appreciate that, okay? Listen, great results, and I love the detail on what we're doing specifically. If you stay the same, you burn fuel at a certain level, even if your locomotive is more efficient with the money we're spending on them. But if you can operate the same amount of business with the same amount of locomotives and a larger train size, we end up winning less cost, more efficiency. Love the story.

Well done, Eric.

Just the last point of your question there, Jordan, in terms of how do we see that impacting the fourth quarter. So you heard me say that we're looking at pricing right now in terms of fuel prices for the fourth quarter to be around $4.85 a gallon. That compares to $4.21 that we averaged in the third quarter. So at this point, I would say we're probably going to see a little bit greater impact to fourth quarter, and we said it had about 140 basis point drag to us in the third quarter. So that's how I would look at it sitting here today. Obviously, if we see a change in fuel prices, we'll update folks, but that's the current lay of that land.

Thank you very much for the question. Great question. Thank you.

The next question is from the line of Ari Rosa with Citi. Please receive your question.

Ari, how are you this morning?

Hey, how are you, Jim? Good morning, and congrats to Jennifer. I echo everyone else in appreciating her contributions.

Ari, can I stop you there? This congratulations for somebody retiring, I don't understand, okay? Like, it's one more month of work than to be retired. I thought if anybody should be congratulating Kenny, Eric, and Jim, that we're still going to work. This idea of congratulations to retirement, I have no idea. But go ahead, ask the question. I'm good. Fair enough.

Well, Jim, I know you're signed up for many more years ahead, so it's good to hear. I'm sure a lot of folks will be encouraged by that. But, Jim, just going back to the merger, I'm curious what you say to customers who say, look, you know, I understand the benefits, the efficiency benefits that come from not having to switch between railroads, but are concerned about the downstream merger effects and what happens with kind of that wave of further consolidation that could follow. If that's the big concern that customers have, what do you say in response to that?

I'll tell you, and I've sat down with a lot of customers, okay? Top 50 customers, I've written them a letter, specifically to their CEOs, ask me any question you want, and I won't get into the detail with everything. I have met, Kenny, I could probably pretty fairly say between you and me, hundreds of customers, and we talked through, and actually, once we go through the detail, they go, son of a gun, okay? This sounds pretty good. They understand that every commodity that we move for them is competitive against another shipper, and it's driven by what the market is, or even they understand that it's competitive against the world, whether it's soybeans going to Mexico, whether it's corn being exported, whether it's steel products. So when they see the efficiency that we can give, they understand it and they see it. Now, let's talk about the next step. It's pretty straightforward. You can see what we're going through with the STB. It doesn't matter what people think. First of all, Berkshire, who actually is the company that owns the subsidiary, Burlington Northern, has been pretty black and white that they don't want a merger. I don't know how they change. They've been spending a lot of money. I just got a seven-hour deposition with their lawyers, okay, talking about every freaking question in the world. And, you know, they say they're against it. So I don't, in my lifetime, if they're against it, it sure won't be with BNSF. It's going to be with somebody else. But let's say they get religion. They still have to go through the process and prove that they're not, they're going to improve, improve. I'll be honest. I have no problem with them if they merged. If CSX and BNSF merged, I think the customers in the U.S. would get a better product and you would win against the world. So that's where I'm at with it, Ari. And I tell you, when I go through that and I'm not nervous and we give them the facts of what we're in that application and what we're doing, I hate to tell you, most of them go, well, we'll still go through it, but we see the benefits of what. Kenny, maybe you can add something that I'm missing there.

I mean, I believe we do a good job of personalizing the discussion with the customers. You've got some customers that, boy, they've got 10,000 rail cars, and then you have that conversation about the fleet savings, and it matters to them. You have some customers that have to pay Drake costs at the interchange, and you have a conversation with them, and they understand the benefits. You have other customers that want to compete, as you mentioned, globally and have optionality, whether it's P&W, the Gulf, competing with barge. So I know the customers see the value that's there. Good question, Larry. Appreciate it.

The next question is in the line of Brian Ostenbeck with J.P. Morgan. Please receive your question.

Brian, how are you?

Hey, good morning, Jim. Good morning, Jennifer. Jennifer, I'll give you also congrats, but also I know you like talking about the quarterly. Well, wait for a second here, Jim. You like talking about the quarterly OR cadence, so I know you're going to miss that. So maybe you can walk us through that for the fourth quarter, some of the puts and takes, and that gave us a little bit on fuel. And then, Jim, for all the other stakeholders that we've talked about here, one that we haven't heard too much about, I don't really know your level of interaction, but it would just be like the DOJ and maybe the DOT, but they're on a little bit of a different track, obviously different entities. There's a lot of history there, so we'd love to hear any context you can provide with your interactions with them because their comments are due, I think, sometime in early December. So thank you.

Yeah, listen, Brian, you're a smart guy. You work for one of the biggest banks in the world, if not for sure pretty close. So you guys have a lot of history of how the regulatory environment works. Pretty simple. The STB is the regulatory agency that will review and decide how we move ahead. The DOJ has the right to put comments in one sense I would have liked the DOJ process because it would have been done already. Okay, but We go through the STB process so their comments are going to come forward. Have we had meetings with them? Yeah, they they want to learn about the railroad industry and what we're doing and and when they put their comments on Which we have sat down with them and we'll continue to answer questions of anybody Department of Transportation or DOJ so that people can get facts, because there's a lot of missed facts out there where people just don't understand what the true facts are. So at the end of it, that's what we've done. The rest, Jennifer?

Yeah, Brian, in terms of fourth quarter OR, so you heard my comments relative to fuel. You know, obviously when you think about seasonality, you do tend to have some seasonal changes going with second and third quarter, where you tend to have your highest volumes of the year, that's where you tend to have your greatest ORs, you know, we'll likely see, well, very strong growth here continuing on in the fourth quarter, just on an absolute basis, you know, probably a little bit of a seasonal step back when you consider the holidays and everything that happens in the fourth quarter. So you obviously need to take that into consideration. But I think the important point is on a core operating basis, you have seen us make year over year, improvements to our core OR, and that's going to continue. We have a great line of sight to being able to continue to very efficiently move this volume growth, and that will enable us to continue to improve.

Thank you very much, Brian.

Thanks, Jim. Thanks, Jennifer.

Next question is from the line of Tom Wadovitz with UBS. Pleasure to see with your question.

Morning, Tom. Yeah, good morning. And, you know, Jennifer, I'd just say thank you and wish you well. You know, pleasure interacting with you and benefiting from your insights over the years. Jim, I just got to say I'm a little more optimistic on Santa Claus than you are, but anyways, a little more of a fan. But maybe, you know.

Yeah, but you know who Santa Claus is, right? It's not real.

Yeah, yeah, I guess so. All right, so let's see. I understand what you're. I'm sorry about that.

That's the question. I apologize.

No, no, no. I'm trying to add a little humor. I think your position is pretty clear. Single line service is a strong benefit. That's a compelling driver for the merger, and you've got some other elements in there. But let's say that there are potential elements of consideration for the constituencies, kind of labor shippers, railroads. how do you think shortlining is a component of what you would want to do in the future is that important to say hey there's some branch lines inefficient and you know we'd like to have flexibility or is that something that it's not really important I'm just thinking that's a you know a point of potential negotiation and then with respect to the CN deal does that preclude you from giving access to another railroad on that St. Louis to Kansas City? Or is it like, you know, if you wanted to do that, you really could?

Well, we can do anything that we can control, Tom. But at the end of the day, the Canadian National deal fixes that issue of a little concentration and overlap on that piece. And, listen, Canadian National is a very good railroad, goes across Canada, goes all the way to the Gulf, and is going to give a lot of opportunity for customers in there when they serve them to compete against us, and we're looking forward to that. So we're pretty comfortable with where we are, but we always are willing to listen. And you said something about short lines, and it sort of sounded like you thought maybe we would short line more. No, we are not going to sell off pieces of our railroad, large pieces, to anybody. Okay? I've always found that, in fact, I've found that short lines are really good at some things. But listen, if you take a look at the way short lines work and what they do, we should be able to do that ourselves. And we do that every day on our railroad. So we're pretty good at dealing with customers. We're pretty good at growing the business. And a lot of the business that's being given and we see the short lines that we have attached to the Union Pacific and Norfolk Southern will grow because of the business that we're going to grow on the railroad. But listen, it's a bigger picture. If you step back, short lines in the United States of America do receive a lot of funding from the federal government per mile and tax breaks that put them in a different place in how they operate. But that's not enough for me to think. And if you think about it, they get $3,400 a mile for every railroad. And some of them are not small mom-and-pop railroads anymore. I think Genesee and Wyoming was bought out by a couple of foreign investment funds for $8.5 billion. So even though they own over 100 short lines, it's really not a short line. It's a big railroad, a big piece of business. So I'm not into selling to somebody else our railroad unless it allows us to grow more business and to be able to deliver a better product for our customers. And I think Union Pacific, with where we are operational efficiency, where we are with assets, where we've invested in our railroad, most of the time we want to keep everything internal and grow and be able to manage it ourselves, Tom. So hopefully I answered the question.

Yeah, maybe just another component. Any thoughts on, like, are there active discussions with the parties? Is there a phase when you might expect them to become more active with, you know, what you might offer, whether it's shippers, labor, other railroads?

Listen, I'm willing to talk to anybody, but at the end of the day, it has to be a good reason. It can't be just because I want it, okay? So let's go back to the Santa Claus piece. Right now, they put a piece of paper out that says what they want from Santa Claus. Santa Claus is not real, so we're going to look at it. But I have to wait to see what factually they can put in on the November 18th deadline to see if there's an issue there that we've missed. I don't think we've missed anything. But if there is, more than willing to talk. And I'll be honest, you know, even though I've known some of the CEOs at the other railroads and some of the people below them for a long time, for some reason they don't talk to me very often anymore right now. I'm still a nice guy, right, Jennifer?

Yes, very nice.

You know, they've got this coalition against making America better. They have a coalition that won't give the employees a guaranteed job for life. It's truly interesting, Tom, truly interesting. I love where we are.

Okay, great. Thanks for the time, Jim.

Thank you.

Our next question is from the line of Jonathan Chappell with Evercore ISI. Please receive their question.

Good morning. Good morning, Jonathan.

I can hear you.

Can you hear me this time, Jim? All right, great. Sorry, I don't know what happened before, but I was doing some damage control with my two young kids, explaining to them about Mr. Vena, just lying about that Santa thing.

Oh, son of a gun, I apologize. Are you serious? I apologize.

No, I'm not serious. They're at school. They do believe, but they're at school, and that was all my fault. I have no idea what happened.

Don't let them hear me, okay? I'm worried about my grandkids. If my wife was listening, I'm going, after I said that, I said, holy cow, I could get myself in big trouble at home. That's not the place I want to be in trouble, okay?

No, I'm not going to let my nine-year-old read the transcript tonight like he typically does. But anyway, I don't know who wants to take this, maybe Eric, but nine consecutive quarters of workforce productivity, you're investing more now with your capital envelope. Kenny talked about intermodal, basically going from strength to strength. It seems like the West Coast ports are set up really well. At a certain point, do you reach a hurdle where wringing out more workforce productivity becomes more difficult as you shift to more top-line volume growth, or is this just kind of an evergreen opportunity that may have been flowed depending on where we are in the cycle?

Yeah, thank you for that question, Jonathan. You know, I don't think it's either one of those. It's because when you think about the way that we think about productivity, you know, the driver behind why we focus on it is to ensure that we're putting Kenny and the team in the best possible position to compete in the market. And no matter what the markets are giving us, no matter what the railroad's like, that's always going to be with us. There's always going to be a drive and a strong commitment to put Kenny and the team in the best possible position. Now, if you think then within that and you say, okay, now what do we think about workforce productivity as we look out, I still see opportunities. Hell, before I came to this call, I had two phone calls this morning where we were talking about things that are related to workforce productivity. So even on a daily basis, we see opportunities. And then what you've seen us do and you'll continue to see us do is, as I mentioned with Jordan's question, focusing on the fundamentals. That's perpetual. We'll never stop doing that. And then the technology side. Yeah. The technology part, you know, we talk a lot about it. We don't necessarily always talk a lot in detail. but when you think about the technology side, right, it's first designed to improve the decision-making of our frontline leaders. And, you know, we've talked about a lot of results here today. All right, while all the four of us are part of it, the reality is the 29,000 people out in the field that are switching boxcars, fixing track, fixing cars, they're the ones that actually made the results happen. And so if you can give them, which we have, and you can continue to empower them to make even better decisions, you're going to drive workforce productivity that way. And then when you think of some of our work around semi-autonomous operations in our terminals, on our engineering gangs, inside our locomotive facilities, you're just adding layer and layer and layer of success that we've delivered on, and I don't see an end to it.

Listen, great question. Thank you, Eric. What time is NA supposed to start? Nine o'clock? Eight minutes? Okay, lightning round. Okay, we'll be fast.

Next question is from the line of Rika Harnain with Deutsche Bank. Good morning. How are you?

Hey, good morning. Jim, you can chuckle, but I have to tell Jennifer how, you know, we've been really impressed by the quality and consistency of Union Pacific's execution over the past few years. And Jennifer, obviously, you played a major role in that success. So congratulations, and, you know, I'm sure you're proud of what you've helped build. So for my question, it's for Eric and maybe just following up on, you know, that last question, actually. From a technology standpoint, you know, are there capabilities, tools, or operating systems at NS that you don't have today or vice versa that make you particularly excited about the merger opportunity? And, you know, on a related note and maybe more broadly for the team, for Kenny or Jim, what do you make of autonomous trucking as sort of a competitive offering to railroads? You know, as that technology matures, do you see it as a meaningful competitive threat or do you think investors are sort of overestimating its impact to rail? I would love to hear, you know, what structural advantages rail retains that, you know, it can't replicate. I'm sure fuel efficiency is top of the list, but I'd love to hear that from you.

Let me answer that last one real quick. I'm going to try to get off. I don't want to overlap with NS. Bottom line is you always have to look at how you move forward, not backwards. So autonomous is going to happen. We need to be ready for it to be the most efficient railroad in North America, which we are today, and we will continue to find ways to be better. We will use technology every way to be able to move it ahead. So that's the challenge, and it's exciting. It would be boring to get up in the morning and say, well, guess what, we're railroading. I love it. We have a lot of plans on how we move this railroad forward to make it, and part of it is this merger that will help us be able to give much more seamless operation. Eric, real quick on the tech.

I love the way you framed that question, because oftentimes the question we get asked is, what can UP bring to the NS? But you're right. There are things on the NS that we will look forward to bringing to the Union Pacific. And we're talking about those because we can talk about integration. So, like, one example, just briefly, their wayside technology for the inspection of rolling stock, whether that's locomotives or rail cars, is really impressive. And the technology behind it, the software, right? identify the defects even better than our system so yeah we're looking forward to taking the best of Union Pacific to the NS and the best of NS and bringing it to Union Pacific thank you very much okay next question and the question is the line of final question from the line of Brandon Glensky of Barclays thanks for getting me in here yep morning Jim and Jennifer condolences they have to go drink margarita now Brandon you could take ask any question you want.

Take your time.

Well, Jim, maybe we'll be a little critical here. I know you have a majority of the unions, but obviously the B-lit here is against the merger. So maybe if you can speak to that. And then in the responsive request from a number of your competitors, they've called out this vertical competition issue that the STB could be incrementally concerned about with this merger and obviously given the closer comments as well i guess is there like a medium ground on some of these responsive requests where you could see potentially more deals happening to you know get this across what could be you know really arbitrary issues approving competitive enhancement in the future thank you yeah listen i would be remiss not to say and i i get it i'm aggressive against the side that says like what are we going to give but there's always deals to be made okay but let's listen let's wait because time is real important you know if you're

playing poker you don't put everything down before you see the last card or the third card coming out so bottom line is I'm waiting to see what they put in in November 18th that has to be factual has to show what their concerns are and how we move ahead so and then at that point we'll re-examine I think we've done a good job so far I said it before I was surprised that the comments that we got from one of the STB members, especially when we were the ones that said we'd be open for discussion. So it is what it is. That's part of the process, and that's why we applied again. With the unions, the BLET, let's get serious. People don't understand this. Again, there's a deal to be made, but every locomotive engineer that's covered under the BLET, the Brotherhood of Locomotive Engineer Entrainment, and actually gather and increase their seniority with Smart TD, who's a proponent for this, who's accepted it and sees the benefit. If somebody from the BLT gets cut back and they can't hold as an engineer, they become a conductor, and guess what? So they're all protected already. I have no idea what – I've already got a deal that covers every one of our locomotive engineers at both railroads, So I have no idea what the BLET is doing. They want to get something like job protection for life. I'm not into that. I'm not setting this company. So I'm not going to do things that are going to hurt this company. And I know I'm going longer than I should. At the end of the day, if anybody thinks we're going to make a bad deal for Union Pacific, we're not. We will walk away from this. We're pretty strong, as we've just shown this quarter, and we will move ahead. But it's so good and compelling for the country that it's crazy for us not to push this to the final piece. Anybody else want to comment? But good question. Thank you very much.

Thank you.

We have time for one more. I think that's it, right? Thank you very much. Appreciate it. Listen, all I have to say is this, is I'm real proud of the team. I really am. And everybody, the management team, the unionized employees, everybody at Union Pacific, heck of a quarter. And it's about who we are, what we want to do, and how we win and move ahead. And I love our competitors getting better. I love our competitors getting more efficient because we make up such a small amount, this railroads of the total products that are moved in the U.S., that we could all grow and win. And we work together so many places together to win. And I think this merger has driven people to get – merger discussion has driven people to get better. And I love it. A little more competition, movement of products more by rail than by truck, decongesting highway systems, decongesting city roads. I'm telling you, it's a win-win, and I love it, and we'll talk to you all next quarter. And, Jennifer, in all seriousness, congratulations, okay? Even though I don't understand retirement, but congratulations, enjoy yourself, and all the best, and thanks for everything you've done. Thank you very much, everyone.

Thank you. Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines at this time and have a wonderful day.