First up on the transport track here, we have Canadian National being joined by Ghislain Houle, CFO of the company. Paul Butcher, head of IR. I know we're going to jump into a few questions here. Throughout the Fireside chats, we have audience response. You can hear these throughout the day. If we can go ahead and queue up the first question, please. Do you currently own Canadian National stock? If there's a little keypad in front of you there. The more input we get, the better we get. One, yes, overweight. Two, market rate. Three, underweight, or four, no, I do not own CN. Go ahead. [audio distortion] Number one. How old are you, Ghislain? All right, question number two. We'll get some more participation here. Question number two. What is your general bias towards Canadian National right now? Positive, negative, or neutral? Very positive. I can answer some of you if you want. You can just message me your keypad. Help you out. All right. Number three. In your opinion, through cycle, EPS growth for Canadian National will be above peers, in line with peers, or below peers. All right. Ghislain, thank you guys very much for coming down. Really appreciate you being here in sunny Miami. Can you tell us what's going on with Canadian National right now? 'Cause I think the commentary has been the first half of the year, more visibility, a little bit more questionable than second half. [audio distortion] Well, first of all, thanks for having us. As you can hear from the sound of my voice, I've got a little bit of a cold. But it's nice, it's always nice to come to sunny Florida in February when you come from Montreal. Paul Butcher with me, as we were called. Hopefully we'll answer all the questions. Thank you for people in the room and people on webcasting at CN. I'll start with a couple of comments, then we'll turn over to your questions. First of all, when you look at our business today, I think we're doing a little bit better than what we expected quarter to date. I mean, if you look at our volumes in terms of Revenue Ton-Miles, our volumes quarter to date are up 13%. That's, that's pretty good. Now, you remember, Brendan, last year, we were decreased this time of year. If you remember, it was extremely cold. When you look at the month of January and February last year, we had 85% of those days that we had some type of restriction on our trains versus 40% this year. We have easy comps. You know, what's in the bank is in the bank. When I look at what shows strength right now is really on the bulk side. You know, when I look at grain, when I look at sand, when I look at coal West Coast, I mean, these, you know, continue to show strength. When I look at the consumer segments, they continue to show weakness. In consumer segments, I mean, intermodal international, I mean lumber, I mean chemicals and plastics and refined petroleum products. They continue to show weakness. When I look at the macroeconomic environment, if you looked and census came out for February last week or so, and I think industrial production in the U.S. continues to weaken. I think we're close to 1.5% negative as we speak. The environment's quite volatile. We're still calling for a mild recession at CN. We'll see what happens. Interest rates, we believe, will continue to rise. We're being quite cautious. When you look at the railroad and the network, I'm extremely pleased that it's running extremely well, thanks to a scheduled railroad focus with car velocity, but also the weather is helping us. I'll give you a few stats. First of all, our car velocity is 210+ car miles per day. That's up close to 4% on a year-over-year basis. When you look at our cars online, we have 15,000 less cars online, and we're moving 13% more volume. That's the strength of the scheduled railroad model. You move more products with less cars. When you look at our origin train performance, we're at 85%, and that's versus 60% or so last year. I think we're doing quite well. Our 32 car dwell is down 65%. Railroad's running very well. As I said, we have only a month and 1/2 behind us. I don't want to count our chickens too early. We do have good visibility on grain for the first half of the year, as you mentioned. I think at one point in the second quarter, we will run out of grain to move. Right now in the second half of the year, we're assuming that Canadian grain will be a three-year average. We don't have visibility of this yet, so we'll see as we move towards the year. We're being cautious. Now from a longer term standpoint, I think the skies are quite bright for CN. I mean, the team is gelling together. I'm very happy to have Ed back. I've known him for 20 years. Ed, myself and Doug have known each other for 20, 25 years. I think we have some solid growth specific opportunities for CN that we'll walk investors through at our Investor Day on May second and third. Hopefully, Brendan, I'm sure you'll participate, and some of you in the room and on webcast will participate as well. We'll walk you through those, and you'll meet more people from CN during those two days as well. I think on this, I'll turn it over to your questions. Okay. Well, appreciate that. I wanna get to very specific CN questions, but I'd be remiss if I didn't ask about safety concerns for the broader railroad industry right now. Yeah. There's been a lot of media attention on another accident. Yeah. Do you see any changes coming from the regulatory side with a lot of political pressure on this right now? How would CN respond? Yeah. I can't talk for the regulator. What I can talk about though is CN. I mean, safety has always been a key focus at CN and will remain a key focus. I mean, when you look at, and I'm knocking on wood here, but we're close to 800 days without a fatality and about 600 days without a serious injury. Correct. You know, knocking on wood, we invest a lot in safety. I mean, we've talked a lot to the market about our Automated Track Inspection, cars. Again, this is, you know, to improve and to automate the way we inspect track to avoid, you know, issues. When you look at our rail breaks, Paul, I think they're down- 90%. 90%. That at the end of the day, the economic benefit of these Automated Track Inspection is the byproduct. Really, the first and foremost product and results of that investment is safety. I mean, when you look at it, we now cover the entire railroad on our entire tracks, including our branch lines. We have 10 of those cars on the premise. We're able to, you know, see defects in the rail. For us, this is what it's all about. So I think, you know, from a culture standpoint as well, we're focused on, you know, preventing accidents. Unfortunately, sometimes they happen. When they do, we have to respond in an appropriate manner. Again, I think that the investments, the other investments we've made, and we've talked a lot to the markets about, is the portals. Again, you know, inspecting cars through high resolution cameras while the train goes into a portal to see defects that are there without that you wouldn't be able to see with the human eye. This is all to prevent, you know, accidents or issues. We will continue to invest. Now, the regulator needs to come with us and support us on these investments. Some of these investments we do with other rail carriers as well, and we discuss them. I think that, everybody, the entire industry focuses on safety. I mean, safety is just good business. Rest assured that we will continue to focus on it and invest in safety at CN. Well, train inspections are still a very manual process, is that right? That's right. Still you need by regulation, you need to do a certified car inspector. This is a mechanical person going through, and it'll take, you know, an hour and a half trying to see under the undercarriage to inspect the train. With the portal, if you go through the portal, the portal will be able to see defects, you know, that the human eye won't be able to see. We have identified a lot of defects, Paul, on some of the trains that we wouldn't have identified visually. Right. You know, you do preventive maintenance. By preventive maintenance and better, you know, surgically, you know, modify some of these things, then it allows you to reduce accidents, and it allows you to get a better safety record, and it allows you to save lives. We're not 100% there on the portal. My view, on both, you know, track inspections and train inspections, the holy grail would be eventually, and I think the industry will get there, is to fully automate our inspections. Fully automate the inspections, where now you take the human factor out of it's data-driven. It's now you get better surgical, you know, maintenance on your track, on your train. You do it before issues happen. This is just good. It's good economically, but as I said, that's a byproduct. First and foremost, it's good for safety. Appreciate that. If we have questions from the audience, just raise your hand. We'll get you a mic. Ghislain, I think you hit on it in your prepared remarks, but you've had a lot of change in the C-suite, bringing back Mr. Harrison with Tracy, as CEO for the past year. What's the culture like at the top now at CN and- I'm extremely excited. I've been around for, you know, many years, 25 years. I'm going on my 26th year. I see my friend in the audience smiling here. You know, I've lived through five or six CEOs. I think that we've turned the corner. I think that, you know, we're going back to running a Scheduled Railroad. I've learned that when Hunter was around. You know, I've known Ed for 20 years or so. Tracy's coming in with a breath of fresh air. She's extremely focused, as you can see. She's really focused on running a Scheduled Railroad, focused on car velocity. The message is simple. Message is simple for employees. I mean, look at the results last year. We had the best results in the industry. I mean, EPS was up 25%. I mean, we had an OR. We had, you know, the second best OR. CSX beat us by a little bit, but we had, you know, 59.9. ROIC was close to 16%. Free cash flow, CAD 4.3 billion when we had guided for CAD 4.2 billion. The results are just there. I've lived the years where we were doing great, and we were looking at everybody in our rear mirror. You know, I got the last couple of years where I turned quite humble. We were lagging the others. We were growing the top line like crazy, but we weren't able to bring that top line to the bottom line. That's the key focus, is to bring the top line growth to the bottom line. How you do that is you need to grow in a disciplined manner, and you need to grow to your capacity. Then we have more demand and capacity than you need to take the opportunity to either curate the business or you take the opportunity to get more price. It's very simple. The team knows the message. Paul, I don't know whether you want to add anything, but I think people have a smile on from an incentive compensation standpoint. People had a good year last year. It's a spiral, right? When things go downward, they go downward. Now you've got long faces on Monday morning, etc, et c. Now people have a smile. Tracy. I mean, you better, and people in the audience have better, people on webcast. She's extremely humble, you know, she's focused on doing the right thing. She's not scared to make decisions, but she will, you know, she will collaborate and get feedback from a lot of us. She's made some tough personnel decisions, but she's made the right ones. I think. Listen, I know she's my boss, so she didn't pay me to say these things, by the way. I'm extremely excited, and I think that under her leadership, I think that, you know, the future is very bright. The changes that we've had at our board is also very positive. I mean, Shauneen Bruder, our chair, is extremely competent, and we've had a few additions on our board, guys like Rob Knight that used to be the CFO of UP. Rob knows what it's like to be sitting here and talking at an investment conference. He used to do them all at UP. We've had some other additions. Frankly, you know, we have one member right now on our board that has more than five year of tenure, and he's retiring in April due of age. We'll have a brand new board of directors at CN as of the AGM in April. These are all changes that fit together. You know, the key right now for us, myself, Ed, Doug, is to, is to groom the next generation of railroaders. I mean, we've been around for a while. At one point we will retire. I'm not going anywhere, Brendan, by the way. I'm only 59 and I've got a 15-year-old at home, so, I need to pay for his school, and the school is quite expensive. At one point we will. My role right now is to groom the next CFO, and to groom the next generation of railroaders. People that will attend to the May 2nd, May 3rd Investor Day will meet some of these people. They will meet, you know, they're in their mid-40s, early 50s. Some of them are even in their high 30s. You will meet some of them on the train trip. You will meet some of them at dinner. Our role right now is to push on scheduled railroading and deliver results, but also, groom that next generation that will lead this company for the next few years. Paul, I'm talking a lot. Do you want to add anything? No, I think you answered that very well. Mr. Boucher, what should we expect at the upcoming conference? Well, I think you've, as many of you have been to some of our events in the past, I think, something very similar. We typically do that over two days. As Ghislain said, the first day is about more living the experience, right? We're gonna have a train trip. You're gonna have an opportunity to visit our locomotive shop. We have our training center in Chicago as well. As you know, Chicago is very important for the rails. Right, about 25% of the business goes through Chicago. We will also highlight the key advantages that we have in the EG and E. The first day that the experience, you know, you have the opportunity to meet a lot of people. The next day it's more about, you know, telling the story about, you know, what we see here over the next few years. Definitely a lot of the focus will be on growth. We feel that we have a lot of growth opportunities that are out there. I think what's important is to be able to show that we can bring that top line to the bottom line, and that will be key. It'll be an exciting two days here. Appreciate that. Chicago is pretty nice in early May. Better than now. Pardon? Better than going in the winter. Better than now. Absolutely. Can you touch on, I think you guys have full year guidance for low single digit EPS growth? Yeah. Can you touch on at a high level the input side? Yeah. The key input, as I mentioned, that's why I talked in my opening remarks about Industrial Production. First of all, we're calling for a mild recession. Obviously the math doesn't really work if you say calling for a mild recession, but then my guidance will be, you know, double-digit EPS growth, and it just doesn't work. Right now, Industrial Production, we said we would do slightly better than Industrial Production. Industrial Production is continuing to weaken. As I said, it's close to 1.5%. If we're wrong and Industrial Production does better and volume does better, then we will do better, obviously. If the recession is deeper than what we believe and it's not mild, then we may do worse. That's certainly an input, that was important, you know, when we look at the guidance. We said that we would continue to price above rail inflation. We're focused on that as well. I mean, those are the big two key inputs. Maybe Paul- Yeah. You want to talk maybe about the buyback as well? Yeah. People have commented on the buyback. As you know, we reduced it a little bit from CAD 5 billion budget to CAD 4 billion. Share buyback is not all that accretive to earnings when you consider the, you know, financing costs. You know, we do not, you know, want to delever the balance sheet. I mean, again, you know, this is a good way and a good flexible way to return money to shareholders. At this time, you know, share buyback of CAD 4 billion, we're still remaining in the range of an Adjusted Debt to Okay. We are debating this internally about the use of our balance sheet. We continue to do that. I think that, you know, we are thinking of providing a little bit more visibility on this during our Investor Day. We'll see. Yeah, those are the main inputs for the guidance. We do have visibility, as I mentioned, on grain, and bulk continues to be strong in the first half. We have to see what happens in the second half. Grains a big beast right now. When you look at Q4, I mean, our volumes were up, but it's a misleading a little bit, especially when you consider volumes from Q3 to Q4. All segments are down, but it's all offset by grain. Grain was significantly up and like they're all down Bud, but I think by 10% or so in terms of RTM. Grain offset it and we had volume growth. We have to see what happens. At this point, as I said, we remain cautious. Frankly, when we get to the end of the first quarter, we typically, you know, we typically talk about guidance. Either we reaffirm it or we'll give a little bit of a notion on guidance when we get to that call on in April. Okay. Maybe if I could just add to that. I think, you know, as we don't have that much visibility right now on H2 on the labor front, what we're doing is we are actually not letting go or furloughing anybody, operating people. Understanding that there is that uncertainty out there. What that means is that if the economy does actually better than expected, we'll be ready for that rebound. We'll be ready to be able to move that additional business. We have the capacity. The network's running very, very well. That's the other. You know, if the economy does better, yes, we will do better as well. Yeah. To add on that. Exactly. We've said publicly that, if volumes go down, we're, you know, we're going to make decisions for the good of, for medium and long term of the business. We're not gonna chase a couple of pennies for a given quarter and send people home. If volumes weaken, we will take the opportunity to get ahead of ourselves in terms of training locomotive engineers, for example. You know, because remember that to train a locomotive engineer, you've got to take a full-fledged conductor out for about four, five, six months and train them. We will do these things. We have some locations in Canada that's hard to hire. We will wrap our arms around these people because we do want to be ready for the rebound. If volumes go down a little bit, then we will carry a little bit more cost than we would have maybe in the past by, you know, quickly sending people to furlough. I mean, we will look at hiring and we will adjust our hiring. You know, we are We're gonna refrain ourselves from having a jerky reaction that send people home quickly just in case a couple of pennies on a given quarter. I guess to your earlier comments about cash, can we queue up question number four for the audience? In your opinion, what should Canadian National do with excess cash? One is both on M&A, larger M&A, share repurchases, dividends, debt pay down or internal investment. It's just a little keypad in front of you there. I think you just hit one through six. Question number five on the topic of cash. In your opinion, what multiple of 2023 earnings should CN trade? Less than 10-12, 13-15, 15-18, 19-21. Okay. Question number six. What do you see as the most significant investment issue for Canadian National? Core growth, margin performance, capital deployment or execution. Thank you everyone for participating. We publish these after the event. Ghislain, now I know you talked about a lot of growth opportunities, which I wanna get into. Intermodal has been a segment and I think import activity actually was pretty weak in the fourth quarter. Was that true? Are you seeing, you know, destocking in the economy? Yeah, I can start, then Bud can jump in. We do see some weakness in intermodal, obviously. I think the, this is again, import intermodal is consumer products. As, as the economy weakens a little bit, we can see that. I mean, we've started to see some blank sailings, Bud. Correct. As well. Intermodal is a weakness, and I talked about that a little bit in my opening remarks. We'll see what happens. I think we did curate a little bit of that business as well, especially business that was coming into Western Canada where our capacity is tight. We took the opportunity as some of these contracts came due. We, you know, the pricing that came to us was not conducive for us to renew the business, so we took the opportunity to curate the business, some of that business. You know, yeah, I think we see some weakness. We'll see what happens, and we can see it again in January, February continuing a little bit. Stay tuned. That's why we're calling for a mild recession still, and, we'll see what happens. Yeah, I mean, it's weakness that you're seeing across the system, right? It's not just specific to CN. I think what's good for us is, you know, with our three-coast access, we have to provide that optionality for customers, for shippers. You know, Rupert continues to be, you know, I'd like to say the gift that keeps on giving, and there's capacity available there. You all know, you know, we started talking a lot over the last few years about Halifax. Our partnership with PSA has gone very well. They've actually hit a record last year, shipping, bringing in 600,000 CUs, and that's just half the capacity right now. There's room to grow. Even in the Gulf Coast, right? Whether it's Mobile or New Orleans, we have the opportunity to bring in more business there. I think, you know, yes, short term, there is some, maybe some inventory adjustments that are playing out here, but I think long term we have a really, really good story. Okay, we only have a few minutes left. Can we queue up the last audience question? This is about ESG. We have a new one here. Does ESG play an active role in your investment decision relating to CN? Yes, is a positive factor, or yes, it's a negative factor, or no, ESG does not play a role. I guess, can we hit on pricing, gentlemen? Because there's been so much inflation across the supply chain in the last two years. I think a big investor concern is not only do we have weak volumes in 2023, but is there deflationary pressures on price? I think we're very consistent on pricing and I think Patrick Whitehead and the team has done a great job into price above rail inflation. As we've said before, we have about 1/3 of our book of business that expires, that contracts expires in a given year. Again, you know, we'll be at those this year. I think we're confident that we'll continue to price above rail inflation. This is something, by the way, that under Tracy's leadership, we've changed. In the past, I don't think we've worked as integrated as we should have between operations, finance, marketing. Tracy has instituted, which I facilitate an operating committee where, you know, the four of us sit together and we look at all contract renewals, and we look at the business, we look at where it starts, we look at where it finishes, you know, the OD pair. We look at pricing. Then we discuss and we agree whether this is business that we want to continue or whether this is something that we wanna, you know, curate a little bit. I think this instituted a lot of discipline. I can assure you that, you know, the commercial team under the leadership of Doug, they're really focused on the bottom line. They're not just focused on growth, which in the past we have a little bit, probably too much. They're focused on the bottom line and, you know, price is important. You know what allows you to get price is good service. Right now under the Scheduled Railroad, we're more predictable, we're more reliable. Therefore, and look, I mean, I just said that we have 15,000 less cars. Some of these are private equipment. That equipment, the customer now, you know, can return some of these leases if there's lease, you know, to the lessor and save on the car ownership. You know, we move more product with the same amount of cars. It makes it easier for us to go back and say, "Hey, look, you were able to move way more product with less cars, but, you know, I need, you know, this price. This price is what's reasonable for both of us as a win-win relationship. The service is really the backbone of getting good price. The Scheduled Railroad really allows you to push this because again, you sweat your asset and you move that product with less cars and therefore the customer, if it's private equipment, gets some benefit. Then, you know, reasonably, you know, we get a little bit more price due to this. Well, appreciate all that. I know we have like 1 minute left. You wanted to have a couple closing remarks. Yeah. I think first of all, like I said, I'm quite excited to be at CN. I think that we're humble. We've learned from the last few years. I think our star is shining again, I think, you know, there was three quarters behind us. We need to deliver a good year. I'm confident that on a relative basis, we'll deliver very, very well. I think the team is gelling. I think, you know, the opportunities are out there, as Paul mentioned, and we will walk those through at the Investor Day. I think that we will continue to improve our margins. We know we need to do that year in, year out. I think that, you know, we've got a good bench strength at CN. We're grooming the next generation of railroaders, and I think this is gonna be a good ride in the next couple of years, next years to come. I think it's gonna be a good ride. Ride along with us. We'll just leave it, Paul. Thank you so much for coming down. Thank you. Really appreciate you coming here. Thank you.