Ladies and gentlemen, CN's fourth quarter and full-year 2020 financial results conference call will begin momentarily. I would like to remind you that today's remarks contain forward-looking statements within the meaning of applicable securities laws. Such statements are based on assumptions that may not materialize and are subject to risks described in CN's fourth quarter and full-year 2020 financial results press release and analyst presentation document that can be found on CN's website. As such, actual results could differ materially. Reconciliations for any non-GAAP measures are also posted on CN's website at www.cn.ca. Please stand by. The call will begin shortly. Welcome to the CN fourth quarter and full-year 2020 financial results conference call. I would now like to turn the meeting over to Paul Butcher, Vice President, Investor Relations. Ladies and gentlemen, Mr. Butcher. Thank you, Simon. Good afternoon, everyone, and thank you for joining us for CN's fourth quarter and full-year 2020 financial results conference call. I would like to remind you about the comments already made regarding forward-looking statements. With me today is JJ Ruest, our President and Chief Executive Officer, Ghislain Houle, our Executive Vice President and Chief Financial Officer, Rob Reilly, our Executive Vice President and Chief Operating Officer, Keith Reardon, our Senior Vice President, Consumer Products Supply Chain, and James Cairns, our Senior Vice President, Rail Centric Supply Chain. I do want to remind you to please limit yourself to one question so that everyone has the opportunity to participate in the Q&A session. The IR team will be available after the call for any follow-up questions. It is now my pleasure to turn over the call to CN's President and Chief Executive Officer, JJ Ruest. Well, thank you. Thank you, Paul. Good afternoon, everyone. At CN, we wish you all a safe, healthy, and constructive 2021. Reflecting back on 2020, a year with blockade, a spring of COVID, a summer of sharp but uneven business recovery, a year when our railroaders became recognized as truly essential workers. A year when our people produced for our society, produced for CN, for that, I personally offer my appreciation to all of them. The business recovery continued. Volume are steady and strong at CN. Some sectors remain challenged, our operating metrics are improving, the commercial team has a game plan to work on the yield of our new business mix. We are optimistic about 2021, especially the economy and the GDP of the second half. We are more cautious about Q1, especially as it pertains to lockdown and preventive quarantine on our operating employee in the communities where we operate. This recovery has a different mix of business. Some markets recovered very fast in V-shape, like consumer goods coming on shore via our five ports, and some markets stayed depressed, like crude and refinery product. In one market, it's been simply solid like a rock, and that would be grain export in both Canada and United States. We ended 2020 solid. We generated record free cash flow of over CAD 3.2 billion for the year. The Q4 adjusted EPS growth was 14%. We have industry-leading fuel efficiencies, and our revenue ton-mile volume growth was 10%. Today, we are showing our confidence in the future by reinstating guidance, by announcing a 7% dividend increase, by resuming share buyback, and investing to accelerate technology to our operation and investing in connectivities with our customers. In simple terms, investing in the long term. On that note, I will pass it on to Rob. Rob? All right. Thank you, JJ. I also want to thank the women and men of CN for their efforts, not only this quarter, but also during this truly unprecedented year. While many people in the world, and even on this call, were able to work remotely, our railroaders have shown up day in and day out to move our customers' freight. I am extremely proud of the work performed this year by the team. We continue to build on the momentum we came out of Q3 with following the volume recovery, and we're optimistic about the future and are prepared to handle the volume that is coming at us. During Q4, we experienced a volume increase of 10%, but through the team's disciplined execution of the plan, our corresponding crew starts grew by just 4%. We also saw both our train length and train weight improve, moving more freight with fewer crew starts while maximizing the use of our locomotive fleet. Our train and engine crew labor productivity improved 19% year-over-year as we moved more freight with fewer people. Our headcount in transportation was down 8%, engineering down 7%, mechanical down 11%, and network operations down 20%. The team has also delivered for our customers, setting all-time records for movement of Canadian grain during 10 consecutive months. In January here, as of yesterday, we've already set another record for the 11th straight month. All of this while effectively handling volume increases in propane, lumber, and intermodal. The railroad continues to operate well. We continue to raise the bar for fuel efficiency, improving by 6% versus the same quarter last year and achieving over a 4% improvement for the entire year. The team's efforts this year have helped us avoid nearly 300,000 tons of CO2 emissions and saved us nearly CAD 60 million from our fuel efficiency initiatives alone this year. CN continues to be the fuel efficiency leader of all North American railroads. As safety is a core value at CN, we were able to improve our personal injury rate by 15% for the year, while our accident rate also improved 18%. We have an uncompromising commitment to safe operations, making sure that CN will be the safest railroad possible for our railroaders, our customers, and the communities in which we operate. In the quarter, we continued to prepare for the future by expanding our capacity in Western Canada and completing three additional sidings on the route to the Port of Prince Rupert. We have a strategic advantage in Prince Rupert, and we plan to deliver on that advantage by having the available capacity to handle the projected growth over the next decade. As we look ahead, we're prepared for the projected growth, and we will continue to safely deliver for our customers. We will expand our leadership in fuel efficiency and carbon emissions reduction. We will build on our strong foundation of PSR principles with the evolution of digital scheduled railroading, DSR, improving the safety, efficiency, and the customer experience with CN. Our autonomous track inspection cars and our autonomous inspection portals will add next generation technology to them in 2021, expanding their positive safety impact to our railroad. Our handheld device technology will continue to eliminate millions of printed pages of paper annually and improve our customer-facing services. As I pass this to James, I again want to recognize the extraordinary resilience of our CN network and our employees that helped deliver these results. James? Thank you, Rob. During Q4, we started to see a more balanced demand recovery with many carload markets tracking near or above pre-COVID levels. Overall, our carload franchise finished the year strong, setting several new records in December. Energy-related carloads, which tend to be much longer haul, are still well off 2019 levels and had an outweighed negative impact on yield for the quarter. Grain, both Canadian and U.S., remained strong through Q4. As Rob mentioned, we set new records for Canadian grain each month of the quarter. We saw strong shipments of potash in the quarter, and December marked an all-time record for domestic potash shipments as we grew market share. Lumber and panel volumes were strong in the quarter, setting a record in December, a full 6% better than our previous record set in 2015. Propane volumes for the quarter, both domestic and export, were a bright spot, with AltaGas propane exports exceeding 53,000 bbl /d in December. In Q4, crude revenue declined by close to 65%, but we saw an increase in the relative percentage of heavy crude, which made up almost 60% of our crude revenue in the quarter, demonstrating the resiliency of our heavy crude franchise. U.S. export coal volumes were up nearly 40% for the quarter, while Canadian coal was negatively impacted by the temporary closure of CST and Coal Valley mines and the permanent closure of the Teck Cardinal River mine. In summary, the positive momentum we saw in Q4 and December in particular positions us well for 2021, where we expect to see continued improvement in our mix and yield. Smartly managing capacity and price will be the theme for 2021. We have introduced several new commercial programs, car auctions, seasonal pricing, and threshold pricing that create flexibility to adjust price to meet increasing market demand. Additionally, lower volumes of speed-restricted light crude in Q1 will help us protect network fluidity in winter and create capacity for quicker turning, higher margin freight. This year, we expect to see continued strength in lumber and panels with strong housing demand as well as repairs and renovations, pushing inventory restocking earlier than usual. We continue to focus on turning assets faster to improve yield and meet demand. Canadian and U.S. grain are expected to be growth drivers in 2021. The current Canadian crop was an all-time record, and there's still more grain to move. Demand for U.S. grain is driven by strong export pricing for soybeans and corn. We are well-positioned to move more grain in both Canada and the U.S. By the end of Q1, we will have over 4,200 new high-capacity hopper cars cycling on our network. We will also continue to take advantage of the 50% increase in Vancouver grain export capacity, all exclusively and physically served by CN, allowing us to move more grain faster using fewer resources. Our three-coast network reach helps drive durable carload growth and is a long-term structural advantage that cannot be replicated. Propane export volumes through Prince Rupert will continue to ramp up as Pembina's new export facility comes online and AltaGas momentum continues. U.S. export coal volumes will grow in Q1, driven by new pet coke moving from Chicago to the U.S. Gulf Coast. Ray-Mont Logistics will open a new export plastic bagging facility in Mobile, Alabama, in late 2021. Once again, demonstrating how our unique tri-coastal reach connects producers with desirable end markets. We continue to price ahead of railway cost inflation and maintain a disciplined approach to yield management in order to optimize our network utilization. With that, I'll turn it over to Keith. Thank you, James. CN's participation in the strong consumer-based economic recovery continued into the fourth quarter. We handled record port volumes in Q4. Combined, the West Coast ports of Prince Rupert and Vancouver grew at just under 17% versus 2019 and set an all-time quarterly record. Halifax and Montreal combined grew just over 5% versus 2019, setting a Q4 record. Domestic business was also strong as grocery, e-commerce, and consumer products purchasing drove the new economy. Our combined container volumes led all railroads in growth for Q4 at about 15% above 2019. 2021 volumes are strong into week three and are projected to continue at these levels into at least the end of Q1. In automotive, we have a year-over-year decline in volumes and an improvement in per unit profitability. Macroeconomic factors, delays in SUV product launches, and some volume demarketing related to profit margin drove the volume decline. We made progress in fixing the port train imbalances of Q3 due to the huge surge of imports and the lack of enough exports back to the ports. Ongoing joint efforts have increased train sizes, slot utilization, and train balance, key levers of profitability. In Q4, yield management initiatives produced year-over-year margin improvements for intermodal and automotive. Densification of trains, elimination of work events online and in terminals, reduction of empty miles, improved efficiencies in container and auto handling in our terminals are some of the many initiatives we will continue to drive in 2021. Technology solutions in our first and last mile door-to-door services are producing significant fuel savings and decarbonization improvements. Collaboration with our supply chain partners to expand their gateways into our network has produced significant growth opportunities. Our teams continuously work on key infrastructure and technology initiatives that improve our supply chain costs and service levels. With a robust 2021 demand climate, we are focused on the best use of our capacity while pricing our services in line with the economic value being created by our unique three-coast network. I will now pass it on to Ghislain for the financial perspective. Thanks, Keith. Good evening, everyone. My comments will start on page 11 of the presentation with highlights of our solid fourth quarter performance. During the quarter, we witnessed significant volume improvements, both sequentially and on a year-over-year basis, and continued to right-size our resources for the recovery while remaining disciplined and focused on tightly controlling our costs. Volumes in terms of RTMs were up 10% versus last year, while revenues were up 2% at almost CAD 3.7 billion, impacted by continuing changes in business mix. Operating income was up 16% versus last year. Our operating ratio was 61.4%, a 380 basis point improvement over our adjusted operating ratio last year. Net income grew by roughly CAD 150 million, with diluted EPS of CAD 1.43, 17% higher than last year. Excluding a workforce adjustment provision in 2019, our adjusted diluted EPS was up a solid 14% versus last year. Foreign exchange had no material impact on our financial results in the quarter. Turning to page 12, let me highlight a few of our key expense categories. Labor and fringe benefit expense was essentially flat versus last year. This was mostly driven by higher incentive compensation and pension expense, offset by a workforce adjustment in 2019, an 8% lower average headcount in 2020 or 2,200 less employees. Purchased services and material expense was 4% lower than last year, mostly due to lower outsourced services and incident costs, partly offset by higher repairs and maintenance expense. Fuel expense was 25% lower than last year, driven by a 27% decrease in price and an over 6% improvement in fuel efficiency, partly offset by 9% higher workload. Now let me turn to our full-year results on page 13. I am very proud of our performance that again demonstrated our resiliency and capacity to adapt to quickly changing conditions in unprecedented times. We completed 2020 with revenues close to CAD 14 billion, 7% lower than 2019. Our operating expenses were 3% lower than last year, resulting in 15% lower operating income versus 2019. Our adjusted operating ratio stood at 61.9%, essentially flat with 2019's adjusted operating ratio. Excluding one-time non-recurring events in both years, our adjusted diluted EPS came in at CAD 5.31, 8% lower than 2019. Now moving to cash on page 14. We generated free cash flow of over CAD 3.2 billion for the full-year. Excluding a CAD 330 million tax refund related to the U.S. CARES Act new loss carryback rules, free cash flow was close to CAD 2.9 billion. There's still much uncertainty and instability in the current environment, we are seeing some positive economic signs, and we remain confident about the outlook for this company. With that said, we are pleased to reinstate our financial outlook for 2021, which is summarized on page 15. The current demand for 2021 that James and Keith talked about should translate into mid-single-digit volume growth in terms of RTMs for the full-year versus 2020, with pricing ahead of rail inflation at a minimum, and continuing our strong focus on yield management. With this, we expect to deliver EPS growth in the high single-digit range versus 2020 adjusted diluted EPS of CAD 5.31. This assumes a Canadian to U.S. dollar average exchange rate of around $ 0.80 for the full-year versus approximately $ 0.75 in 2020, generating a headwind of roughly CAD 0.20-CAD 0.25 on EPS year-over-year. Our capital envelope for 2021 is approximately CAD 3 billion, with initiatives to increase capacity in Western Canada, enable growth, and continue investing in technology as we move to a digital scheduled railroading model. With that, we expect to deliver free cash flow in the range of CAD 3 billion-CAD 3.3 billion, which will continue to drive improvement in free cash flow conversion. Finally, we are pleased to announce that our Board of Directors approved a 7% dividend increase for 2021. This represents the 25th consecutive year of dividend increase since the IPO of 1995, providing consistent returns to shareholders year after year. The board also approved a new share buyback program of up to 14 million shares for an amount of up to CAD 1.5 billion, to be returned through a normal course issuer bid from February 1, 2021 to January 31, 2022. We plan to resume buybacks next week. We are supporting the recovery while controlling our costs, and we remain confident in our ability to deliver value to our long-term shareholders. On this note, back to you, JJ. Well, thank you, Ghislain. Before we turn it to question, I just want to use a second here to make some closing remark. Our focus is very clear. We price ahead of inflation at a minimum. We manage yield and productivity both. We generate steady and solid free cash flow. We are a leader to bring technology into rail operation and the customer's experience, and we have a solid and broad ESG agenda. CN is a long-term investor play focused on sustainable, profitable growth. With that, operator, we will turn it back to you to answer the questions from the analyst. Your first question comes from the line of Fadi Chamoun with BMO. Your line is open. Good afternoon, Fadi. Good afternoon. Thank you for taking my question. Maybe on this mix and yield story and kind of going into 2021, I mean, the yield per RTM was, I think, down 1% in Q2, and that went to 3% in Q3 and 6% in Q4. Can you give us a little bit of kind of background around what's kind of causing this, more specifically within the categories, and how should we think about that yield going into the first half of 2021? I'm guessing it's probably one of the factor why the operating leverage implied in the guidance seemed a little bit muted, and if there are other factors that are kind of holding that operating leverage, if you can kind of walk us through those as well. Yeah. Thank you, Fadi. It's an important aspect, definitely, and we recognize that. I think James could probably provide good colors on the mix, but also on the action plan that we have in terms of working on the mix of our new book of business. James? Yeah. Well, thanks for the question, Fadi. As we came out of COVID, we've seen a quicker recovery in our consumer products business, that's our intermodal business, than we saw in the carload business. Industrial production, a key indicator of carload growth, continues to improve. Our mix is getting back to historic levels. Thinking about Q3, we moved about 69% of our business with carload. Going into Q4, that escalated to 74% of our business was carload as industrial production picks up. Rest assured, we're going to continue to move the needle on the carload growth driven by improvements in North America and industrial production. We're also working to make our own luck and improve yield within each segment. For example, on the carload side, we purposefully scaled back speed-restricted light crude through December and into Q1 to create capacity for higher-margin freight moving through the winter months where capacity, as you know, is precious. In addition to that, we have a number of commercial yield initiatives that protect capacity to ensure that we can move the most profitable freight as we see the pace of recovery escalate. As we move into the second half of the year, I think things get back in balance for sure, and we want to make sure that we have the capacity protected to move the highest-margin freight. Thanks for that, Fadi. Thank you, Fadi. Mix is an important aspect, and we're working on it very hard. Okay. Thank you. The other part of the question, like on the cost side, are there anything on the pension side or cost per comp or anything like that that could be kind of holding that operating leverage going into 2021? Okay. Since, Fadi, you're the first one asking question, we'll do it in two parts, but I will ask everybody to focus on one item. On the cost side, Ghislain. Yeah, Fadi, on the cost side, we do have a cost headwind. We have about CAD 200 million of cost headwind related to depreciation and related to incentive compensation, and I would say it's about 50/50. On the pension side, I would say we have a very insignificant tailwind in 2021 versus 2020. No, nothing to report huge on pension, but definitely CAD 200 million of cost headwind coming into 2021. Thanks, Fadi. Thank you. Thank you. Your next question comes from the line of Chris Wetherbee with Citi. Your line is open. Hey. Thanks, guys. Maybe if I can stick on that line there for a minute and just think about the operating ratio. Certainly, if you want to provide some color around 2021, that would be great. I guess maybe bigger picture, as you think about sort of the opportunities for growth on the network, are we going to hear where there's maybe equal parts revenue opportunity as well as operating ratio opportunity? I guess I'm kind of thinking about that 60 benchmark that's out there, whether you have the ability to kind of get past that, lower than that with what you see from a revenue opportunity that's out there. Yeah. Chris, very good question. Definitely at CN is we don't have a volume problem. Volume is an opportunity. Regarding the operating ratio, Rob, you want to talk to that? Absolutely, and thanks for the question, Chris. I think there's opportunities abound here as we look into 2021. In terms of the operating ratio, we're certainly shooting for a full-year operating ratio below 60, and we do believe that's achievable. Beyond some of the structural headwinds that Ghislain talked about that are non-operating challenges on depreciation and compensation, even some of the mix headwinds that we'll have. We found ways coming out of the volume recovery to do things more efficiently. Some of that you're seeing in the headcount, some of those efficiencies are structural. We still see opportunities as we look into 2021. Car velocity, train speed, train length, we see opportunities to improve all three as we go into this year. We'll continue to drive, even though we're the leader in fuel efficiency, we'll continue to improve that here in 2021. We're optimistic about it. All of that with the work hand-in-hand with James and Keith and what they're doing on the top line, that'll help us. We're about people, fuel, and purchasing, and we're focusing on all three to try and make this cost structure as effective as it can be. Very optimistic as we look into 2021. Thanks for the question. Thank you, Chris. Your next question comes from the line of Cherilyn Radbourne with TD Securities. Your line is open. Thanks very much, and good afternoon. Wanted to ask a question on the technology agenda, which I believe is expected to yield CAD 200 million-CAD 400 million of savings over time. I appreciate those savings are back-end loaded, but was just curious whether they're starting to crystallize more fully as you make progress against that agenda. Thanks. Yeah. Thank you for Cherilyn. Very good question. It's one of our focus for this year and the years to come, and we're making significant progress, especially as it relates to preventive maintenance. You want to give some example, Rob, of some of the benefits that we currently experience right now, and maybe talk about some what we have in mind for 2021? Yeah, absolutely. Thanks for the question, Cherilyn. We know of four cases in the past 12 months in terms of track-caused derailments that our ATIP cars would have prevented had they been running. Now we've got those during the course of 2020 covering our entire core main from the Atlantic to the Pacific to the Gulf. As we move into 2021 and we take on a couple more cars, we'll start to expand into our branch lines. Along the safety piece of it in reducing train accidents, we did see a decrease in terms of the cost of train accidents and also the number of train accidents. On the portals themselves, we're about halfway through our algorithm development, but each week and each day, I can tell you our portals are actually finding defects that the human eye is not, and they're actually making our railroads safer. We'll continue to develop that here into 2021 as we add cameras to our portals, and then we'll reassess as we go forward. Thanks for the question. That's my one. Thank you, Cherilyn. Thank you. Your next question comes from the line of Ken Hoexter with Bank of America. Your line is open. Good afternoon. Great. Good Good afternoon. Hey, JJ. Just I'm a little surprised that I don't think I've ever heard the term structural cost so many times from CN on a call. It used to be the other rails. Let me go to the growth side. Do you think, coming back to James and Keith's comments before, do you think you're being conservative on the growth given the need for Western investment? Is that something that's slowing you down from chasing more volume in 2021, or is that not an issue, it's more the market pace? Let's see, James. Not James. Keith, if you want to talk about that. There is volume growth at CN. I think there's no shortage of that, but we also want to manage what comes at us. Keith? Yes. Thanks for the question, Ken. We do have other coasts that we serve as well. We saw growth in Halifax. We actually see some opportunities in the first and second quarter there to maybe have some new services. Well, we will. We also see in the Gulf Coast opportunity for another service. We've been bringing more business on in Q3, Q4. We also are leveraging our TransX and H&R product. That's one of the things that we've been able to do, is grow in the consumer and the refrigerated market. We do have plans for growth on the West with our customers, whether it's through Rupert or Vancouver. We are trying to grow, Ken, we're just working with Rob and his team to manage it effectively and efficiently. We want to make sure we provide a good service for our customers day in and day out. We are going to grow. Yeah, Ken, if I might ask, on Q1, we're a little more conservative because there's still a lot of things that might happen with COVID and vaccine and either things start to go the right direction or we might slip a bit. When we look at the second half, you got to believe that the pandemic will have to be more under control, and we're much more bullish in the second half, especially as James' mentioned earlier on the initial product side, on the cargo side. That's good business for CN. We'll see how the winter goes along in terms of COVID, but I think so far so good. We're up to 10% above RTM year-to-date, and grain as a model and for us at CN are currently very solid. Thanks for the question. Your next question comes from the line of Benoit Poirier with Desjardins. Your line is open. Yeah. Good afternoon, everyone. With respect to Milton, you just received approval for the logistics hub project. Could you maybe talk about the next milestone, the capital deployment, and how it will impact the flow on your network down the road? Thank you very much. Thank you, Benoit. Yes, we did obtain approval. Keith, you want to talk about the next step from here? Thanks, JJ. Thanks, Benoit. We're very pleased with the approval that we received last week. We know there's a couple more small steps to go through that we will go through here in the next several months, but we do plan construction to start in 2021. We do see that this new terminal will allow us to expand our capacity in the GTHA. It's going to allow us to provide better service. It's going to allow us to have better costs of providing that service. Again, it's going to grow our capacity. What trains we run through there and that type of thing is still to come, since it's probably going to be about two years out before it's completed, Benoit. Okay, perfect. Thank you very much. Thank you. Thank you. Your next question comes from the line of Scott Group with Wolfe Research. Your line is open. Hey, guys. Hello, Scott. Thanks. I just want to make sure I'm understanding the modeling pieces right. If we have mid single-digit RTM and some price and the buyback, and you get to a sub-60 OR, it gets you to at least double-digit earnings growth. Maybe just are we missing something there? Any thoughts for us? Thank you. We have a big headwind on FX that I talked in my remarks, Scott, and I'll just remind you of the rule of thumb is every cent of appreciation of the Canadian dollar to the U.S. dollar is CAD 0.05 of EPS on an annualized basis, and it's CAD 35 million of net income. If you back that in, we are assuming that this FX will create a headwind of anywhere between CAD 0.20 and CAD 0.25, we're assuming that FX will remain at CAD 0.80. God knows where it's going to be. That's what we're assuming. If you adjust for that, we would be in the double-digit range to your point. The FX is really a big headwind for us at this point in time, we'll see how it evolves during the year. Thanks, Scott, for your question. Okay. Yeah. It's high single digit. If it was a constant FX, we would be at the double digit. It's CAD 0.25 of EPS at CAD 0.80. Thank you, Scott. Your next question comes from the line of Konark Gupta with Scotiabank. Thanks. Good afternoon. My question is on capacity. Obviously several container terminals on your network expand capacity or target growth, and you are obviously seeing some industrial economy recovery here. Would you say or think the 20% kind of capital intensity envelope that you kind of boil down to this year and maybe in the future, would that be enough to prepare for potential opportunities you have in 2021 and beyond? Rob, you want to talk about network capacity, especially through Rupert and Vancouver? Yeah, absolutely. Konark, I just want to make sure I understood it. You also asked about container hub capacity, is that correct? Yeah, absolutely. Okay. I'm talking about the total capital on the left on that- Yeah. In support of your expansion plans. Thanks. Yeah, absolutely. In terms of the mainline capacity, we continue, as I said in my opening remarks, continue to expand our capacity, particularly headed to the Port of Prince Rupert. Really you'll see our focused investment in terms of mainline capacity, going forward as it is last year and continuing west of Edmonton. We see the growth opportunities in Western Canada, both in Rupert and Vancouver, we'll continue to prepare to handle that. From a container terminal standpoint, I know Keith's on here, maybe you want to add a few things? Keith? Thanks, Rob. Thanks, Konark. Yes, we do have plans. We're going to finish up our construction process at our new terminal just outside of Minneapolis. We're also expanding and making some improvements in Chicago. We have a couple of things that we're doing here in Brampton. We have some things we're doing in Calgary, Edmonton. All of these minor expansions or some updates to some of our terminals are all in the capital plan. Okay. Thank you. Thank you. Your next question comes from the line of Walter Spracklin with RBC. Your line is open. Yeah. Thanks very much. Good afternoon, everyone. Good afternoon. I was wondering if you could talk a little bit about some of the inputs into your labor cost side. I know you mentioned the pension, but can you give us some color on how you see headcount evolving through the year? Certainly going through winter now, and whether that is aiming to come off, and a little on your kind of total cost per employee. I know you didn't pay out all your bonuses this year, and what kind of headwind, certainly if you hit your targets here, what kind of headwind would we be looking at in terms of bonus payments for next year? Okay. Thank you, Walter. Maybe on the headcount and the operating ratio of people to volume, do you want to take that, Rob? Then Ghislain can finish it regarding the replenishment of the bonus. Rob? Absolutely. When you look at some of our operating functions, mechanical engineering, net ops, we'll see that headcount remain muted. Some of the changes we made will continue to produce dividends going forward. On the train and engine standpoint, crew members will continue to grow that headcount as volume dictates, but we'll do it at a lesser rate than the increase in volume. Good example is Q3 to Q4 and the sequential growth. We saw 12% growth in volume, and only a 5% headcount. We will be hiring to handle the volume, particularly in the second half of the year. It won't be at the same rate as the volume increase. Ghislain? Yeah, maybe on your second part, Walter, of your question. As I said previously, we have CAD 200 million of cost headwind next year. CAD 100 million is incentive compensation. It's really the replenishment of our bonus. Obviously, when you look at the average comp per employee, you should expect that to be slightly up, because again, you'll have more incentive compensation per employee next year than we have this year. Appreciate the time. Thanks. Thank you, Walter. Your next question comes from the line of David Vernon with Bernstein. Your line is open. Hey, good afternoon, guys. Hey, David. I was wondering if you could talk about this margin topic outside of the framework of 2021. You guys have put a lot of money into technology capacity, efficiency. Sounds like the revenue side, you're managing yields pretty well. As you think about where you're going to be running the railroad in the next three to four years, what should we be expecting as far as kind of how those investments in technology and things play into the business? Is this going to be a case of it helping you to accelerate growth, or should we be thinking that you're going to be running the business in somewhere in that mid to high 50s range on an operating ratio perspective? Broadly speaking, David, it'll be coming sort of maybe half and half commercial effort and getting better value for our product as well as on the cost. You want to talk about incremental margin, Rob, Ghislain? I can talk a little bit about your question on margins, David, and also on technology. I think we're quite bullish on technology. I think that, as you know, in the last Analyst Day, we said, I think Cherilyn asked a question about the benefits, we told people CAD 200 million-CAD 400 million. million. We're still tracking that very well. I think, first and foremost, that technology will really improve safety. That's first and foremost. The productivity and efficiency and the cost takeout is a byproduct. Very good byproduct, don't get me wrong. Really, it's safety. If we can fully automate all the inspection we do of track and of train, it's incredible what we can do in terms of reducing accident cost and solidifying our social license to operate. I think with the effective deployment and the value created deployment of technology, absolutely, you can expect in the next few years that our margins will improve. Absolutely. We said that when we talked about this a few years ago, that unfortunately in IT and in technology, the benefits are back-end loaded because you need to build it and test it before it actually produce. Now we can see it starting producing, and you should see that in the next few years. That will really not only produce the savings and improve the margins to where we need to be, but also it will fundamentally change the way we do business at CN, and we're quite bullish about it. If I might add, it's high time for the rail industry to adopt technology and automation. It's also high time for the rail industry to really define ESG in a much broader perspective. We're very much focused on those two areas, automating technology and ESG way beyond just fuel efficiency. This is more of a follow-up than a second question. As you think about that rate of change, are we thinking that this starts to accelerate in the next two to three years or in the next three to five? I'm just trying to get a sense of where I should be directing investors in terms of expectations on how quickly this can develop. I think we're starting to see benefits coming in this year, and then it'll continue to accelerate. We didn't have a whole lot of benefits before because, again, you need to build it before you actually can see. Rob has got some good examples on how we use the ATIP car and how we use the portal, and it's coming in loud and clear. Stay tuned, but we're quite excited and quite bullish about it. Yeah. As maybe simply said, as Rob said earlier, an OR that starts with a five is very achievable at CN despite the CAD 20 million headwind that Ghislain was talking about on depreciation and replenishment of bonus. The team is capable of doing that. Thank you, David. Thank you. Your next question comes from the line of Steve Hansen with Raymond James. Your line is open. Yeah. Good evening, guys. Just a quick one on the coal side, if I may. I don't think we've seen real net growth in your coal business for some time now, and you've obviously got some contract business coming over your way. Can you just maybe give us a bit better perspective on what we should expect here going forward, both with the new Teck business that's ready to go live soon, as well as the broader set of opportunities you guys have? I know you've spoken to some export opportunities. Just trying to frame that in the context of not a segment that we've seen a lot of growth in recently. Thanks. Thank you, Steve. Good question. James is our expert in coal, and we have a couple of puts and takes in that market. James, you want to give some more color? Yeah, I would say coal is looking very good, very strong for CN in 2021. The Teck deal, I think we're all familiar with that. April is going to be our go time for the Teck deal. We should see a fairly rapid ramp-up to full volumes with that Teck deal. Part of that Teck deal was some significant investments to be made in unlocking capacity on the North Shore in Vancouver. Because we've made those investments, now we're well-positioned to move more grain in the North Shore, more products in the North Shore, and looking at growing our volumes beyond just the coal business. When you look at U.S. coal, U.S. coal is really going to be a significant tailwind for CN as we move into 2021. We have a very strong export program. The pricing for export thermal and metallurgical coal seems to be favorable if you look at the futures, certainly above our customers' break even. Last, I'd like to say that we've got two coal plants, one metallurgical, one thermal, that were shuttered on CN in 2020. Looking at the forward curve on pricing, it's favorable for one or both of those coal plants to restart. We're pretty bullish on what the outlook is going to be for coal on the CN network through 2021 here. Thank you for the question. Good color. Maybe while we're talking about bulk, Rob, you want to talk about how we're doing this month in terms of grain? As I mentioned, we set 10 straight monthly records, all-time monthly records in terms of moving Canadian grain. January, we've actually already exceeded the all-time January record, we're well-positioned. We're bringing on new high-capacity cars, just like we did in the latter half of 2020. We have more of those coming, which will help further that, we're in a really good position, we continue to handle it. Yep. Six days to go, and we've already exceeded an all-time record in grain export. Thank you, Steve. Your next question comes from the line of Jon Chappell with Evercore ISI. Your line is open. Thank you. Good afternoon. Rob, earlier you addressed the cadence around bringing headcount back on slower than volumes. The term managing capacity and the excitement around volumes, especially in the second half of the year, has come up a few times. When you think about other parts of the cost structure, equipment, locomotives, whether leased or owned cars, et cetera. Should we think about it the same way as the CN labor? Continuing to bring it on in anticipation of a recovery in the business, but still at a slower pace, and then kind of wait to see the whites of the eyes on volume, before you really move on bringing some of those costs back? Yeah. Rob? Yeah. Really good question. The short answer to that is yes, think about it the same way. We will make sure the volume is there as we bring resources on, whether that's equipment, people, and we'll continue to build capacity for it. As we see the car miles and train speed improve, that will also help in terms of our car velocity and trains. As I look at it so far this month, and the month is almost out, we're operating really well right now. We're up double digits in terms of volume. Car velocity is up double digits, train speed's up, train length's up. We're seeing some of the fruits of the labor here in late Q3, early Q4, and we plan on building on that momentum here as we go through it. You can say we really haven't had a winter. We've had three straight days of nearly -40 in Manitoba and Saskatchewan. Although we see some degradation in a minor way to some of those key metrics, we're well-positioned to respond to it, and we see a quick recovery. Really off to a very strong start this year, and we plan on building on that momentum. Thanks. That's great. Thank you, Rob. Thank you, Jon. Thank you. Your next question comes from the line of Brian Ossenbeck with JPMorgan. Your line is open. Hey, good afternoon. Thanks for taking the question. Maybe one on price. I know there's a lot of new initiatives I think James mentioned. Maybe it'll help if you can give an example of how those are being deployed and some of the early results. I guess looking past maybe offsetting the management of mix a bit, do you think that these things are something you can push further on in terms of price, maybe go a little bit higher than inflation? As you mentioned, JJ, volume is not a problem. Looking to see your willingness to maybe pull the pricing lever to mitigate some of those challenges and also to get recoup of the capital spent on the accelerated tech investment. Very good question, Brian. James, you'll start, and after that, Keith, if you could also comment. James? Yeah, thank you, Brian. Let's talk about yield a little bit. We've got a number of initiatives. I think I talked about a couple in my opening remarks. I'll give you a couple more examples. On the iron ore side of our business, our iron ore volume was up 22% in the fourth quarter, and it's part because of some yield initiatives we have underway with new fleet, longer trains, more efficient trains. With the new fleet we deployed, where we have them in place, we can move 15% more iron ore using the same resources. Allows us to take out a train start a week and move the same amount of iron ore. That's been successful. Also, on the grain side of things, grain has just been an outstanding example of how we can put a detailed focus on the business and get some really good outcomes. The outcome we're looking for here is moving more grain for our grain customers. This is a combination of deploying the new cars, right-sizing our unit trains to match horsepower so that we don't leave any empty spots available that we could've moved. It's customer investments in country and port infrastructure that allow us to run very efficient long unit trains. New sidings on the CN side of things that we can accommodate this additional grain growth and not deteriorate our velocity on the network. Another example might be some seasonal pricing that we've put in place. As you know, Q1 every year is a capacity constraint. Where we can, we want to draw traffic that would prefer to run in Q1 into Q4, where we have the capacity to move it. We did that quite successfully, particularly on the frac sand side of the business. These are all activities that are undergoing to create capacity so we can move more freight or create the opportunity to move the best paying freight where we have that capacity. It's a pretty exciting time at CN as we embark on this renewed focus on yield, I would say. Keith? Keith? Yes. Brian, we are focused on yield, and we're focused on price. We have a lot of cross-functional teams actually in Intermodal and in Rob's shop, Doug Ryhorchuk and others, where we're working on those yield programs. I mentioned quite a few of the operational side earlier, but on the commercial side, we also have yield programs in place and price programs. On the yield side, it's making sure that the right containers are getting on the right trains. We've worked with our customers. They want capacity, we're working with them to get them the right capacity and the right gateways. We've moved some trains around, some stuff that was maybe in one gateway, we've moved it to another gateway to densify that train. All of that together, as Rob is talking about, we're running the railroad better. We're able to go out and get more price, and our target is inflation plus pricing in all that we do. Not just one or two customers, but in all that we do. Thank you, Brian. All right. Thank you. Your next question comes from the line of Tom Wadewitz with UBS. Your line is open. Hello, Tom. Yeah. Hi, JJ. I guess this question may be a little bit of a variation on the one you were just talking about, but I guess when I think of your franchise and how you run it, I think you guys have a lot of potential for kind of leading the industry in RTM growth or volume growth, or at least being at the high end, and your forecast is somewhat muted given easy comps, at least in second quarter. I understand that quality revenue, but I guess, is there a capacity consideration that's meaningful too, or is there an element that says there can be upside scenarios that are maybe likely or maybe it's a little bit conservative on volume? I guess I'm just surprised there isn't maybe a base case that's stronger on the volume side. I wondered if you could talk a little bit more about that. Tom, it's a very good question. Maybe I'll take that one. We are a bit conservative at Q1. We would like to see the eye of the Q1 economy. We would like to see the eye of how the pandemic will evolve, whether or not at some point, we may have a number of employees in quarantine and that might affect the capacity of our network. So far so good. We're in lockdown in Montreal today. They have a curfew every night, that's not necessarily your usual thing. We're very confident that when the pandemic starts to be controlled with vaccination, and vaccination is going to be a little slow in Canada and the U.S., this should be a strong economy for us on the other side, whether it's industrial product, the consumer is already very solid. Volume at CN is not a problem. Volume at CN is a strength. We have enough crews to run our train. We want to make sure they all stay healthy and don't have 200 of them in quarantine. After that, we'll see. I think on the capacity side, there is capacity at CN. There's also a very conscious effort at CN to recognize capacity is precious. Capacity costs money. We like to see intermodal vessel coming to our port, but we want to be sure that they pay the price to pay, especially when it's business that it might not be there 12 months from now, because it's obviously coming from the U.S. West Coast port as well. We want to be sure we protect capacity for propane going to the West Coast, coal going to the West Coast, grain going to the West Coast. There's a mindset of doing some arbitrage, if you wish, into what we do first and what we do second. Long-term business first. A business that may or may not be there 12 months from now, if we do it, we would want to be paid a higher price or a different price than normal contract business. As we do all that, which is a bit of a new sport at CN, because let's face it, our port business has become almost too good. Also, it was imbalanced early days because we basically had lots of import and no export, which is not the best way. When you run an imbalanced network, it costs a little money. Are we conservative? No. Ask us again in April. Right. Okay. Thanks for the perspective. Thank you, Tom. Your next question comes from the line of Brandon Oglenski with Barclays. Your line is open. Hey, good afternoon, everyone. Thanks for taking my question. I guess, JJ, following up on that, or maybe this one's better for Keith, but can you talk about the competitive dynamics specifically in international and domestic intermodal markets? I think we saw another large contract go to your competitor at the end of the year. Is that part of the conservative outlook on volume as well? Brandon, I guess I'll take that one. Just not to correct you, but the large customer that you're talking about, we'll hold the majority of that volume moving forward. It was not a winner-take-all type of thing. In fact, we picked and choose what we wanted, where we wanted it, that fit into our network. We've been working very hard on that contract. It's not complete yet, but we will definitely get our more than fair share. With regard to the domestic business, we're always competing, but the types of products and services that we have and the geography that we serve has served us very well during COVID. I think there's a reason why you saw our growth in Q4 and why you see the growth in Q1 being industry leading. We're satisfied with our products, our services, and we love our network. Thanks, Brandon. Thanks, Brandon. Thanks for the clarification. Yep. Your next question comes from the line of Allison Landry with Credit Suisse. Your line is open. Good afternoon, Allison. This is Allison. Good afternoon. I just wanted to ask about the potential for M&A in the short line space. We've obviously seen some activity there recently. Historically, CN has been relatively active. If you could maybe speak to any opportunities that might be a strategic fit for CN that you see, and then sort of specifically, as we think about the growth potential at Halifax and in Eastern Canada, and perhaps if you could comment on CSX's acquisition of the Pan Am and if there are any commercial opportunities there that you could benefit from. Thank you. You want to talk about M&A activities or just venture the same? I can talk overall, Allison. Thanks for the question of M&A. As you know, we're always on the lookout to do M&A. It needs to fit our network. We don't want to diversify for the pleasure of diversification. That's not our game. Whatever can add to our network, either extending our reach or that we can put more business on our network, we're always on the lookout. We have a list that we're following up and nothing really that is really hot right now, but it's certainly on our radar screen. Part of our strategy is inorganic growth. We're following up on that for sure. If it allows us to get to markets that today we can't get because of our reach, and obviously it makes a lot of sense, hence why we also want to keep a strong balance sheet. We want to keep a strong balance sheet because not only we saw the value of it during the pandemic in 2020, but also because if there is a deal coming in, we can act very quickly and do it on an all-cash basis and be successful. Yeah. We're on the lookout. If something makes sense and fits our network and fits our strategy, it needs to fit our strategy long term, then obviously we can move very quickly on it. Yeah. We have a small team that looks at that all the time, and we don't wait for phone calls to come in. We also make some outbound calls, and we'll see what the future holds. Thank you, Allison. Thank you. Your next question comes from the line of Bascome Majors with Susquehanna. Your line is open. Hello, Bascome. Good afternoon, and thanks for taking my question. To extend sort of the growth question a bit further out, you've embraced the supply chain collaboration and share gain-driven strategy for a decade now, and we're approaching the point where every other Class 1 rail is going to enter a steady state of running their version of the Hunter Harrison operating principles that underpin what you do at CN and operating ratios that reflect that. As the industry pivots kind of from this operational realignment to maybe a broader and more consistent growth strategy, does this open up some modal share opportunities for CN and industry as a whole for, say, the next three years versus the last three? Just strategically, how do you think about that? Thanks. Yeah. Thank you. It's a very good question, and it certainly does. That's one of the reasons when we look at CapEx and when we look at implementing technology, we just don't talk just about railroad operation like inspection or locomotive or eventually equipment different than diesel. We also talk about we want to invest into the customer's experience, where we would automate and digitize the customer's experience in a way that they want us to provide services to them. In that case, doing that also with other supply chain partner in the supply chain, like port operators or shipping line or rental companies. Definitely the CN story long term is one of growth, profitable growth. Profitable growth from an existing account and profitable growth from new accounts. Some of these new accounts might come from the competition, but they might very well also come from supply chain that we're not part of it today. The reality is, at least at CN, we believe that investing in technology that relates to the supply chain experience, people being able to track their product from A to Z, and not just at CN, but when they're coming to us or via a port or going back to a port is very much part of how the long-term future of the company is. If we do joint venture or acquisition, some of them might be technology-related, or some of them might be with partners like port operators and whatnot. The evolution of PSR gets into digitizing the scheduled railroading, but also into bringing an element of service in the scheduled railroading that's also closer to what the customers expect, which means that it's visibility and control to their freight beyond the rail, before the rail, and after the rail as well. We actually have a group that's really working on that very actively. This morning, the board approved two promotions in our technology group. One of them is a person who's going to be very strong on automation of rail operation, and the other one is very strong in terms of automating the supply chain services that we offer to a customer. It's a good question, Bascome, because it really talks about the future of CN and the future of the industry. Thank you. Thank you. Do we have time for more questions, Paul? No. Slide 30. Thank you. This is Simon. I would like to turn the meeting back over to yourself, Mr. Ruest. Thank you. Thank you for all of you to joining us today. As usual, we want to have as many of you to ask questions and making good use of your time. Thank you for your time, and then we'll see you again in three months. Thank you. Thank you. Ladies and gentlemen, the conference has now ended. Please disconnect your lines at this time and thank you for your participation. Thank you and have a great day.