Okay, thank you very much for joining us. My name is Walter Spracklin, and joining us for day two of our Canadian Industrials Conference, I'd like to welcome Tracy Robinson, CEO of CN. She does not really need an introduction, but, you know, 27 years of railroad experience, executive roles across many different divisions within railroading. She took a little hiatus at TC Energy, we will call it that, and then came back to railroading, present CEO since February 2022. Welcome to the stage. Thank you, Walter. Why don't we start with, you know, volume is topical right now with the world around us. You outlined some, you know, broad and, how should I say, ambitious targets for your company. Some are CN specific, some are kind of general economic. Does the world around us and everything that's happening with it take away from those CN specific initiatives? When we laid out our growth plan a couple of years ago, our, you know, our whole plan, it was underpinned by a couple of things. One was an expectation that the general North American economy would start to grow, right? I think our assumption was at a pace at about 2%. Of course, unfortunately, that has not happened so far. We're still looking forward into an economy that starts to recover. It's been actually just modestly positive in North America since then, a little bit of up, a little bit of down. You know, we got that off a little bit. The bigger part of our growth was work that we had done leading up to that event with our customers to identify how we could use kind of our, the uniqueness of our network to advantage our customers and get them into their markets in ways that were less related to, you know, the economic flows. As railroads, we go up and down with the economy. This was an effort to say, what is out there that can fundamentally kind of show a lift in our business? We found, you know, a pretty compelling pipeline of growth opportunity that was across, extended across most of our business lines and across, you know, most of our network, the east, the south, and the west. The economic growth has not materialized. I think it is coming. We will see what happens. I spent some time last week in Washington, and certainly they're very optimistic sometimes despite the numbers, but they're very optimistic. There's been a little bit of good news in the markets over the last little bit. We'll see where that goes. Certainly we'll be there to capitalize on that. The pipeline of specific growth initiatives is going very well. Now there's some that we knew, you know, it's not all going to, all going to work out the way that you expect it to. Some have been delayed if you think about some of the expectations around the EV market, right? Some of those are now delayed, and we'll see where that goes. Others are moving ahead more quickly. If you think about the NGL marketplace, you know, and the dramatic increases of NGLs out of Northern Alberta and BC exported through Rupert. You know, we're into the expansion of Reef now that'll come in next year. There's talk of a further expansion beyond that and associated with the frac sand that comes in from the U.S. up to Northeast BC. We now have three customers that are building high throughput facilities for frac sand, and we expect more expansion on that. That's coming far more quickly. This is a business development pipeline that constantly gets, you know, reassessed and moved, and there's more coming in, and there may be some that fall out. We're pretty optimistic about how it lands. Now I would tell you this, a big chunk of that, as you know, was the reconfiguration of our international intermodal program. We've done that over the last year. We now have, what we wanted to build was a portfolio that was specifically fit for our network. In Rupert, that means a strong U.S. kind of market. In Vancouver and Rupert, the Canadian, and of course we have the Halifax market as well. That has been postponed, delayed out of, coming out of last year. I think we were ramping last year at this time. I think we hit about, you know, a pace of 900,000 or a million TEUs at Rupert. We were on pace for some pretty good numbers for Vancouver. We had the labor uncertainty. In 2024, at the end of 2024, we had port strikes in Canada. In 2023, we had a port strike in the west coast of Canada. That has pushed all of that U.S. volume that we contracted. They had no choice to go down to the U.S. ports, and we're slowly pulling that back up. The fundamentals of that product are pretty strong. We, that's going to be delayed a little bit. As we look at the numbers and the way they're coming in, we're going to hit our targets more, but be more back end loaded in the three year guidance period. We're feeling pretty good about it. Yeah. Prince Rupert, I've always looked at as kind of an overflow valve for LA Long Beach. Is it really that? Do you need LA Long Beach to be congested in order for that volume to go up to Prince Rupert? At what level does Prince Rupert become almost disassociated from LA Long Beach? You know, you mentioned that you have to go to LA Long Beach anyway. To what extent do vessels now that are coming through Prince Rupert not need to go down to LA Long Beach if you can get enough volume to have kind of a conveyor system coming back and forth? I mean, that's the end goal. Yeah, it is. The international business is kind of unique in that it is the most competitive because a vessel can show up at any port. We've certainly seen that through COVID, through the recovery from COVID, and through some of the labor issues on the west coast in Canada. What we're building in Rupert is something that's got a fundamental structural benefit to the shipping lines and to our customers. If you think about that, it's two days closer sailing to Asia. We can get a container from Asia into Chicago faster than if you go through any other port. It's CAD for port fees. We've set up a program there and a product that is a kind of express service into Chicago. Gemini saw that, like Gemini, that's why Gemini chose Rupert for their U.S. business. They marketed, you know, their whole Gemini program based on the Rupert access into North America and into the Midwest of the United States. If you look at, as that volume has started to show up here, those containers do not well at all. That product is kind of structurally advantaged. If you look at what we are building around it, we have got an increase, you will see this when you go to Rupert, an increase in capacity through CAN Export, also to transload those containers that are going back. Load the containers that are otherwise going back empty. That is a structural advantage. There is Intermodal X that is being built that is going to increase the capacity to transload the containers, the 40 foots as they come off the vessels into 53 foots. The container then is available to go back. These all become structural advantages that I think improve that stickiness that you're talking about. We are seeing that volume start to climb again. We are really happy with the Gemini service and the confidence that they have shown in that product. You know, it is our mission number one to demonstrate that we can execute it. Now it's not just intermodal up in Prince Rupert. No, it's not. Maybe you could talk a little bit about some of the opportunities in liquids and other grain. Yeah. We have a grain terminal, as you know. I understand you've seen the inside. I thought the ladder there was fine. We've got a coal terminal, of course, in Rupert. Rupert is an intermodal, but it's also a bulk and a liquids terminal. The coal is going to serve the Quintette mine that opened up last year. That volume is going to continue to grow over the next number of years. Probably the most spectacular growth we're going to see in Rupert over the next number of years is on the liquid side. The NGLs are being exported. AltaGas's new Reef facility will open up at the end of next year. They're talking about expansion beyond that. You know, if you look at NGLs, you look at plastics, those will both see double-digit, you know, CAGRs over the next number of years. You're going to see this become a very well-rounded facility. If the government of Canada decides to remove the tanker ban that the previous administration put in in Northeast BC, there is lots of talk around the next potential of kind of liquids exports out of Rupert as well. We think that it is going to be a big part of our growth as we look forward. You know, if anything, this tariff discussions have prompted us as a country to look at potentially other markets. What better way than areas like Prince Rupert, Halifax, of getting that product to market. Vancouver has been a big part of your franchise. We were at our port tour this year, and you showcased some pretty interesting growth avenues in the North Shore with some of your customers there. I did not think that you would be able to get the capacity over those bridges and under the tunnel, and you have been able to pull it off. It has been pretty impressive. Can you talk a bit about some of the growth that you are seeing in Vancouver? What you see as that is an important port for you, and what are some of the growth potential out of that area? The whole west coast for us is really important in our franchise. We've got a pretty advantaged position with our new international portfolio along the west coast. We're at about a market share of 65% on the west coast of Canada. If you look at kind of what goes in and out of Vancouver, I think we handle about 70% of the trains to the DRZ. This is important to us, and it's important that it be fluid and effective. As you saw when you went to Vancouver, we're making some investments to ensure that that's the case, whether it be the ventilation in the tunnel, some enhancements in Thornton Yard. We're constructing a siding just outside Vancouver, and we've put one in Kamloops to just kind of continue to increase and ensure the fluidity through and the capacity through that terminal, all of, not just on international, but all of the bulk, the grain, and all the carloads through Vancouver. We see growth as we look at that, and we're going to get a return on that investment. Every kind of inch of growth in Vancouver is a little bit more difficult. It's difficult to squeeze it out. You've all been to Vancouver. It's a beautiful port, beautiful city, not a lot of room to move there. We do a great job of working with the other railroad at squeezing that capacity out, you know, and we'll continue to do that. The growth there, I think, you know, it looks a little bit different than Rupert. I think it'll be step function at Rupert. It'll be inches at Vancouver. Yeah. One of the things that I remarked on in Vancouver was the level of communication, whether it be, you know, you mentioned the DRZ, which is the directional running zone that you share with CP, and that collaborate, I want to say collaboration, but then at least the communication and sharing of resources. I found that your connectivity and communication with the Port of Vancouver open up capacity, right? The more you can talk about when a bridge lift is happening and when they're happening, that immediately creates capacity where inches and incremental is so important. How much of that, you know, that communication, that, you know, again, I do not want to say collaboration because they are competitors, but how much of that, how much more of that could we see within the railroad sector that would then open the door to further efficiency and overall service improvement? Railroads are one part of a much bigger supply chain. For the supply chain to work effectively, all the pieces have to work effectively. Although all of our instinct is to optimize our piece, really it only works when it optimizes the whole. Vancouver is, of course, the, you know, the best example of this. We work closely, as you say, with the port on when vessels come in, because there are issues around the queuing of the vessels. We time when trains come in, when vessels come in, when the bridge goes up. We worked very well together as railroads from an operations perspective and with the port. We've been doing much better at that, I would say, over the last number of years, but there remains opportunity on the timing of kind of the vessels to the trains and to the terminal capacity. We all, though, understand how critical that is for each part of the supply chain to work. It all has to work together. Lots of efforts on that. A couple of years ago, we did a very focused piece of work on grain, because of course, when the grain supply chain gets clogged up, everyone turns and points to the railroads. We got together with the port and the grain companies and said, let's just monitor it. We've got to find out where the bottlenecks are so that we can eliminate the bottlenecks. I came to the table and said, if it's our issue, we'll fix it. If it is somebody else's issue, you have to fix it as well. Of course, in that case, we discovered that the biggest issue was the unloading in the rain for grain. There are efforts underway to address that. Not an easy thing to address, but it requires transparency if we are going to make it work. We're not going to stop making it rain in Vancouver, are we? Not going to stop making it rain in Vancouver, but there are other solutions. I think the, you know, the next level of capacity we kind of, there is going to require that kind of transparency and partnership. Let's go from the west coast now to the east coast. You know, we hosted another port tour in Halifax one year, just a couple of years ago. I was really just amazed what PSA and the plans they had for the growth that they saw coming in. PSA had acquired some of the terminal assets in the Halifax area. Of course, certainly with a partnership with CN, because you single serve Halifax, you're going to be part of that, part of that. How has that now evolved, either because of the tariff situation or because of the economy? Where are we and where do we sit in terms of the east coast being an opportunity for you? As you say, Halifax is another really interesting point. It is a deep water port. It is the first port that you hit if you are transiting from Europe to the United States. You go within a few miles of Halifax. It is positioned and it is our intention to make it similar to Rupert from an international perspective. If you come into Halifax, a Canadian port, Canadian dollar port fees as well. The objective is to have you in Chicago before you can get off a vessel in New York. That capability is there. We tested it. The biggest thing, the issue has been over the last couple of years in Halifax is the Red Sea issue. If you are manufacturing in Southeast Asia or you are coming out of Europe, the fastest way to get to Chicago is through Halifax. When, you know, those restrictions came in the Red Sea, of course, they're transiting south to get to the United States. As we see that issue resolved, I think you're going to see a resurgence in Halifax. We also have a new investor in Halifax, an MSC or their partner company in TIL. They will bring with them some intention around more fully utilizing that port as well. There's a tremendous amount of capacity available. We have rail line capacity. The beautiful thing about that growth is we don't need to invest in order to secure it. That's amazing. We also have, as you know, Halifax is not the only east coast kind of port. We serve St. John as well. Lift a little bit of kind of container business out of there. It is a tidal port. It is not quite the same as Halifax, but it now is, of course, a big potash destination for us. The potash is moving again. They had some repairs to do on the loader. That is moving now. Again, we are moving probably for the rest of the year, 6-8 trains a month of potash. That is big, heavy bulk trains. We can move those into St. John. I think our potash volume overall is up 30% to 35% in May as a result of that. That is great volume for us in the Eastern Network as well. Let's move on to the question of tariffs. I want to keep it kind of high level because I never know where we sit on tariffs one day to the next. Let's talk about it, you know, exactly that. You're, you know, you're in the business of operating a network of trains, and they don't turn on a dime, but it seems that trade policy is, you know, one minute we have 100, you know, over 100% tariffs, and the next minute we have a fraction of that. How do you plan? What are you hearing from your customers? We heard overnight that Hapag-Lloyd now is saying there's a surge in volumes coming out of China now because of the resolution there. How do you plan for that? What is your latest in terms of what you've been hearing from customers about their intentions given the framework of the tariffs that exist today? When we, I think when we put our plan together for this year and we started talking to you guys about it, you know, we expected that this would be interesting and there would be a little bit of uncertainty as the Trump administration came in and started talking about their intentions around trade and tariffs. It was clear that this was going to be a very interesting year, and it's proving, as you say, to be the case. In truth, we haven't had a huge impact on our volumes yet. It's actually been very slight as we go. I would say that there's a level of frustration in our customer base, without a doubt, and a level of uncertainty, but generally everyone's calm. We are optimistic that the U.S. is going to work through this and we'll end up with trade agreements with most countries. We're starting to see that manifest. It was good news coming out of the U.S. and China over the last weekend. Not a big impact so far. We're staying very close to our customers as we always do. What we are noticing is that our customers are talking a little bit more around options around diversification. There's a lot more interest around Halifax, around Rupert, around what the options are. We're getting those questions from the Canadian government now as well as they think about the diversification strategies. We're working with them on that, but there's been no dramatic shifts. We just need all of us to be nimble. We've resourced kind of tightly this year, as you know, at the bottom end of our volume guidance range. We've got an ability to handle surge and to kind of ramp up. We are going to be kind of careful as we go through this year. We'll kind of wait for direction from our customers around where they're investing. You had flagged an air pocket that was coming because of blank sailings that were expected into L.A. Long Beach, but also hitting Prince Rupert. Are those now going to be somewhat offset, do you think, based on what you're hearing from your customers about, you know, this potential surge or snapback? If there was an air pocket and there is one emerging in May, could there be in June a better month because of that snapback as things normalize? Yeah. The air pocket, of course, you only get an air pocket on U.S. business. On our Canadian business, that should continue to flow. If you're not moving U.S. business, you're not going to see a lot of air pocket. We do have U.S. business in Rupert. We also have a little bit in Vancouver. The question is, and it looks like that pocket is closing a little bit. If there are manufactured products available, those can be loaded on a vessel within three days and then they're on their way over to Rupert. That would close the pocket a little bit. We're waiting for confirmation from the shipping lines and what that's going to look like. You could see a small kind of pocket in just our U.S. business. You know, I think that there's folks moving very quickly to close that off. I would say when you reported your results, there was a focus on the negative at that time. Now we're a little bit more optimistic, but let's touch on some of the downside risk. Recession is on top of people's mind. Trade tariff and trade policy driven recession. Are you seeing any evidence in terms of your customer discussions that demand is falling? Because what we're talking about before is more the timing of shipments. Are you seeing any evidence of demand falling? How do you prepare or position yourself going into next year if we do see a downturn in the economy? We have a really diversified kind of book of business. We have a bulk kind of portfolio that is coal, it is potash, it is grain that is not tied to the Canadian or North American economy. Those volumes tend to move. We have an industrial-based book of business that is some of the petroleum products, the NGLs that go to Japan and those types of things that are less sensitive. We have a consumer segment that is driven really by the economy and by consumer sentiment. That would be automotive. It would be lumber for housing. It would be some of the container business that we import with container goods. We are watching that very closely. Certainly, forest products has been soft for some time now. We're going to have to see interest rates fall and housing kind of lift in order to see that really pick up again. We did see a surge in it in the first quarter in anticipation of some tariffs. If you look at automotive, I would say it's a mixed bag. It's hard to get a sense of really where automotive is going in the near term. We haven't seen, we've seen a bit of a shift in the timing of volumes, but we haven't seen a big impact on the volumes very much at all. If you look at some of the other construction materials, metals and steel, a little bit of an impact, but not much. We're watching very closely. I would say that's where the risk is. We're not seeing it manifest yet other than in forest products. That's not a new thing that continues to be soft. Shifting now from revenue to operations. Last year we had a lot of challenges, whether it was, you know, labor shutting down kind of in May, then really in August. You had another labor issue at the ports later in the year. We had some pretty tough weather. We had some wildfires. We had unplanned maintenance downtimes. This year, the focus has been on operational excellence. You know, out in Vancouver, I met with Derek Taylor, your COO. He impressed me and he seems to have his hand on the pulse of what's been going on. Can you give us a bit of an update from an operational perspective? We had a tough February with weather. We've seen it rebounded. How is the railroad running right now? The priority for us is always on operational excellence, not just there. The whole operating model is based on two things. It is a scheduled operating model, as you know. It is based on consistent and excellent customer service and it is based on asset velocity. What we have discovered is that this operating model for this network also makes us very resilient. It is partly due to the team that we have got out there. Whether, you know, we are hit with weather pretty extreme, like we were in February, or whether we are hit with needing to shut the railroad down because of a labor issue, our ability to deal with those issues and get the railroad running again very quickly, I think, has been well demonstrated. That is a positive of the model. Right now, the railroad is running extremely well. We've got velocity at, in the last 28 days, it's well over 220 car miles a day, dwells down. We're running it very tightly. Customer service is excellence. We're back up over 90% on our last mile local service for our customers. That is table stakes. Like that is the way that we're going to run this railroad as we go forward. It is the way that we're going to grow it. We get more when we move with this kind of velocity. We get more out of every car, every asset that we have. We get a partnership with our customers that's more around what is the next opportunity as opposed to how do we fix the service. We're pretty proud of it. It's the foundation of our plan going forward. Keeping with operations, I did get an investor question yesterday. Was asking me to relate or ask you about your headcount and how it migrates through the year. His question was that it seemed to have ramped recently. Are you hiring or was that just a timing thing? Or, you know, where are you in terms of adding or subtracting headcount as we go through the course of the year? There are two drivers of our headcount right now. One is our T&E employees that run the trains. We have 550 of them on furlough right now. That is different depending on where they are in the network, of course. The West is pretty busy. The East right now is less busy. We have an ability in Canada to move those folks around into different regions as well. We have been as high as 800 earlier in this year. Right now we are 550, I think, on furlough. We make a decision kind of weekly between Derek, Pat, and Remi around what the near-term volume looks like and what we need to do. We can move that up and down. In general, we are sized and are making conscious decisions to size at the lower end of our volume estimates for this year. We're running it tight, but we've got the ability to surge. I think we've demonstrated that. The other piece of it is you've seen some management employees added year over year. This company made a decision a number of years ago that we were going to outsource a certain amount of our engineering work and other work to externals. That's a very expensive model. We are insourcing that again. The FTs are coming up, but the expense is going down. We think that that's the right kind of model for us right now. You're seeing a little bit of that play, but you should see overall our FT, our headcount be pretty flat, I think, on the year. Do we have any questions for Tracy before I keep going? Any questions from the floor? I'll do an awkward pause. See if there are any. Okay. Let's move to technology, Tracy. I mean, you're at the fore, you know, you don't have the benefit of a large industry of multiple players where you'll have someone developing technology for you. So you kind of have to do it yourself. You've been very innovative in that area. Can you talk about anything that excites you coming down the pipeline that we might not have seen fully yet? Or even something conceptual or something you might have in place right now that seems to be working? At CN, when we think about, you know, our technology focus has been primarily around safety and operational efficiency. If you think about all of the automated detection that we have, and Walter, I think you've seen the ATIP cars, the automated track inspection cars. We now have invested in 11 of these cars. They move across the network in trains at train speed. I think they all do about 1 million miles a year. They can pick up early issues, detect very early issues in track. We've seen our track kind of KPIs reduced by about 90%. Nine zero. Nine zero as a result of that. That is good business, good safety, but also good business. We have all the wayside detection, whether it is acoustic, we are increasing the acoustic across the network, whether it is heat or whether it is visual. We have that inspect the equipment as they go by at track speed. Of course, we now have the portals. We are continuing to work on the algorithms for the portals. We have a waiver in place now on some of our potash business where the regulators are respecting and acknowledging. The next big task is to get our partners in the regulator bodies to acknowledge the capability and the reliability of the technology. We have some waivers in place in our potash business that allow us to reduce manual inspection. The next generation of technology is going to be around the precursor to automation and the predictive ability to be able to take and optimize how you're moving volume across the network in a way that will allow, that will lead us to the automated future, which I think is something we're going to be doing a lot of work on with this next administration. You think that might lead to from two to one person crews at all, or is? It should. Right. Without a doubt. If you look at the way that as a population, we are experimenting on driverless vehicles on public roads, it's hard to believe that we can't get there on trains as well. Let me ask two more questions before we wrap. Pricing, I think I know the answer, but we'd love to hear it from you that it seems to be solid. Inflation type might be coming down a bit. Your cost price spread widening, is that the case? That is the case. I think we always have a mandate to grow our prices faster than we experience inflation. We do a lot of cost control on that as well. This first, and we have a pretty good track record of doing that. This first quarter has been particularly strong on pricing, grain, petroleum and chemicals, fertilizers. That has been a very great start on the year. You know, as we go forward, I mean, ultimately you price to the market of the product that you are moving. Our guys know our customers and know our commodities pretty well and they are very good at what they do. Last question now is on capital and shareholder returns. Your buyback, you did halt it, you know, got a little bit investor angst for having done that. You've restarted it. Talk a bit about your strategy in terms of how you implement your buyback. We like a healthy balance sheet. We think it's always been one of our strengths. We've increased our leverage over the past year and a half or so. We're continuing to look at what that leverage level should be. We'll look at it again as we go through this fall. Right now, you know, we've got a 2.5 target and we manage to that. We're in the market now. Right now we're being a little bit more, normally we're kind of mechanical about it, but we're being a little bit more opportunistic given the share price opportunity. You know, we've got a program in place. We'll execute that program. As I say, we're always looking at the returns. Our shareholders are important to us. We achieve that in a number of ways, but we're always looking at what that right leverage model should be. Any last remark for the group before you wind up here? You know, I think, you know, we've had a great, it's been an, there's a lot of uncertainty this year. We've had a great start to the year, Walter. The Q1 came in a very solid 8% EPS and 20 basis point improvement in operating ratio in our margins. We're halfway through Q2. This is going to be our toughest compare given what was going on last year in Q2. We're exactly where we thought we would be. You're going to see earnings growth and margin growth in Q2. Of course, the easiest comps were set up to in the tail end of the year. The railroad's running extremely well as we discussed. You know, so we've held our guidance at 10% to 15%. We're excited about this year. There's no labor. Labor is behind us. I think you're seeing what this railroad can do. Excellent. Tracy, thank you very much for your time. Thank you. Thank you.