Good afternoon, ladies and gentlemen, and welcome to the CSX Corporation Q4 2020 earnings call. As a reminder, today's call is being recorded. During this call, all participants will be in a listen-only mode. Following the presentation, we will be conducting a question and answer session. To ask a question press star one. For opening remarks and introduction, I would like to turn the call over to Mr. Bill Slater, Chief Investor Relations Officer for CSX Corporation. Thank you. Good afternoon, everyone. Joining me on today's call are Jim Foote, President and Chief Executive Officer, Kevin Boone, Chief Financial Officer, and Jamie Boychuk, Executive Vice President of Operations. On slide two is our forward-looking disclosure, followed by our non-GAAP disclosure on slide three. With that, it is my pleasure to introduce President and Chief Executive Officer, Jim Foote. Thanks, Bill, and thank you to everyone listening in today. I want to begin by recognizing all of CSX's employees for continually responding to the challenges of 2020. Our results are a testament to our amazing people and the strength of our company. The core principles instilled over the last few years allowed us to act decisively with coordinated effort and alignment across the company. Over the course of the year, we re-examined every process from the ground up to identify and eliminate unnecessary steps across the railroad and, as a result, uncovered significant opportunities to build upon the progress made during our transformation. These changes will provide benefits for years to come. Now let's turn to slide five of the presentation and our fourth quarter financial results. Operating income grew 5% to $1.2 billion, and the operating ratio improved 300 basis points to a new fourth quarter record of 57%. Our reported earnings per share were $0.99. I want to point out that this figure includes a $0.05 per share charge related to the early retirement of debt. For the full year, despite lower overall economic activity and historic demand volatility, CSX produced a full-year operating ratio of 58.8%, exceeding our initial guidance of a 59 operating ratio. Moving to slide six, fourth quarter revenue declined 2% on 4% higher volumes as intermodal revenue growth was more than offset by lower fuel surcharge revenue and declines in coal. Merchandise revenue and volume were flat as revenue growth in chemicals, ag and food, metals and equipment, and fertilizers was offset by declines in other markets and lower fuel surcharges. Intermodal revenue grew 6% on 11% higher volumes to new quarterly record levels. This performance was driven by a combination of strong demand for transportation services due to inventory replenishment and volume growth from East Coast ports. Coal revenue was down 18% on 9% lower volumes as the coal business continues to be negatively impacted by lower domestic utility demand, industrial production, and global met coal prices. Other revenue was down 6% as increased intermodal storage revenue was more than offset by a higher reserve for freight in transit and lower demurrage charges. Turning to slide seven, we remain committed to being the safest railroad. In the fourth quarter, we achieved a new quarterly record low number of personal injuries and full-year record lows for both personal injuries and train accidents. While our efforts to build a culture of safety can be seen in the annual performance trends, we can always be better. We have launched new near-miss and workplace hazard reporting programs that encourage employees to report potential safety concerns. We are also working to increase awareness of incidents and trends by conducting joint terminal tours with CSX management and local labor representatives. This proactive approach to reporting and communications is helping drive increased employee engagement as we identify and eliminate unsafe practices across the railroad. Turning to slide eight, we have previously discussed how the use of autonomous car and track inspection technologies is helping us meet our safety goals, and we will continue to invest in new programs to improve safety. However, we have a much broader vision on the increased use of technology in our business. Technology is foundational to our growth. We are actively investing in new technologies across the railroad but are barely scratching the surface of what is possible. We are making our intermodal yards smarter and more autonomous. We are piloting programs that will further fuel efficiency, such as allowing us to optimize speed across the full trip of a train. In the field, we're getting rid of paper-based processes and converting to digital ones that allow faster communications, better data capture, and improved safety compliance. As we look to the future, we are upgrading our dispatch system to lay the groundwork for enhanced network performance through dynamic real-time routing decisions. We see opportunities to implement predictive analytics in our maintenance programs to both reduce mechanical failures and more systematically identify areas of track most in need of investment. Additionally, beyond these significant operating benefits, we are investing to improve our customer experience and create easier and more streamlined processes for our customers to do business with CSX. Every action we take is designed to make CSX smarter, faster, and more reliable. Turning to slide nine, we remain committed to sustainably managing our own business as well as helping our customers reduce their emissions. In 2020, customer shipping with CSX avoided more than 10 million metric tons of carbon dioxide emissions. To put this into context, this figure is roughly equivalent to the emissions produced powering all the buildings in New York City for almost a full year. We remain focused on furthering these environmental benefits, not only by continuing to improve the efficiency of our own operations, but also by providing a reliable alternative to trucking that allows our customers to meet their emissions goals without having to sacrifice the reliability of their supply chain. We have set ambitious long-term goals in order to remain leaders in sustainability, and we are committed to expanding the benefits rail offers as the most sustainable mode of land-based transportation. Let's turn to slide 10 and look at our operating performance for the quarter. Clearly, the simultaneous rapid increase in both volumes and COVID-related employee absences impacted the network. Overall, the railroad is running well, and we were still able to drive incremental efficiencies. Locomotive productivity achieved a new quarterly record for GTMs per available horsepower, and we set a new fourth quarter record for fuel efficiency of 0.94 gallons per thousand gross ton miles. On slide 11, our improved efficiency is further illustrated, which compares volumes and asset levels against the pre-COVID and prior year periods. As volumes return, our revised operating plan is allowing us to operate at a sustainably higher level of asset utilization. This is reflected both in the sequential trends, where volumes have increased at twice the rate of asset redeployment, as well as double-digit productivity gains we have maintained between year-over-year volume and asset levels in the second half. While the team did an excellent job of working during this period to make the network more efficient, our number one priority remains providing our customers a high-quality service product. There is still significant leverage built into the operating plan, but as volumes grow, we have been and will continue to add crews and locomotives as needed to serve our customers well. Turning to slide 12, our carload trip plan performance was 75% for the quarter, and intermodal trip plan was 84%. Like all transportation and logistics companies, we have faced challenges from both the rising number of COVID cases, along with broader supply chain disruptions from volatile demand, inventory shortages, and imbalanced freight flows. This team has done an admirable job navigating this environment. We expect these trip plan figures will return to and then exceed our results from the beginning of 2020. While our performance is still at industry-leading levels, we hold ourselves to a higher standard. I'll turn it over to Kevin for review of the finances. Thank you, Jim, and good afternoon, everyone. After a challenging year, we are all excited to turn the page to 2021. We accomplished a lot this past year, which sets us up well as the economy recovers from the impact of the pandemic. While many markets remain challenged, we did see an improving business environment in the fourth quarter, delivered both volume and operating income growth for the first time in 2020. We managed costs through the year and made sustainable improvements to the train plan, which will drive operating leverage as volumes return. We once again delivered a quarterly record operating ratio. Excluding real estate gains, this marked the third quarterly record in 2020, an extraordinary accomplishment by this entire team. This past year, we focused on what we could control, navigating the uncertain and volatile business environment while successfully driving efficiencies across the business. Our goal in 2021 and beyond is to leverage the growth ahead of us. And sustaining business efficiency gains and driving further improvements across the business. Looking at the fourth quarter income statement, revenue was down 2% as continued volume growth and pricing gains in our intermodal business were offset by the ongoing effects of weak coal demand and lower fuel recovery. Merchandise revenue was in line with the fourth quarter of 2019. We have seen positive momentum as revenue improved 5% sequentially from the third quarter, above normal seasonality. Total expenses were down 7% in the quarter on a 4% increase in volume. Walking down the expense line items, labor and fringe was 11% lower, reflecting the benefit of the train plan optimization and an 8% reduction in total head count. Throughout 2020, our operating team continued to refine the train plan in response to the dynamic volume environment. These improvements enabled significant efficiency in the fourth quarter as crew starts were down 11%, while overall volumes were up 4%. Lower crew starts in the quarter also translated to fewer active trains and as a result, reduced the need for locomotives. The smaller fleet drove a 14% reduction in our locomotive labor expense. We were also able to hold the line on the significant reductions made earlier in the year to our engineering contract labor expense, as well as our intermodal terminal workforce, even as volumes continue to increase sequentially. Lifts per man hour, a key measure of efficiency for our intermodal workforce, improved 23% when compared to the fourth quarter of 2019. Moving forward, we are preparing for growth. The current environment remains challenging and unpredictable with COVID related mark offs significantly impacting pockets of our network. We wish the best for these employees and hope for their speedy recovery. Moving forward, we will hopefully begin to see improvement from current levels. We continue to focus on crew availability and are currently accelerating our first half hiring efforts to be prepared in the event of stronger demand. We expect head count will likely exceed attrition in the H1 of the year to provide flexibility should demand surprise positively, particularly in the second half. We will manage it closely and adjust accordingly as we monitor the trajectory of the potential volume recovery. MS&O expense increased 4% or $19 million in the fourth quarter. Adjusting for the $20 million headwind from real estate gains, MS&O expense would have been roughly flat, as efficiency and volume related savings were offset by inflation and other items. The improvements to our train plan I mentioned before also drove savings, including lower crew travel and repositioning costs, as well as lower locomotive materials and contracted service expense. Real estate gains were minimal in the fourth quarter. Looking beyond 2020, we continue to manage a pipeline of future properties that we will monetize when conditions are favorable. Our base case is for real estate sales activity to be roughly flat. As I've said before, we will also continue to pursue opportunities to leverage our real estate to generate recurring revenue streams. Fuel expense was $77 million favorable, a 36% improvement year-over-year, driven by a 33% decrease in the per gallon price and record fourth quarter fuel efficiency. We continue to invest in technologies that will drive further improvement in fuel efficiency, widening the advantage over truck, and demonstrating our continued commitment to sustainability. Looking at other expenses, depreciation increased $3 million or 1% in the quarter. This reflects a larger asset base as well as the impact of a road and track depreciation study. Depreciation expense is expected to be a $10 million-$20 million headwind in 2021. Equipment rent expense increased $4 million or 5% as higher days per load across all markets resulted in increased freight car rents. Turning below the line, interest expense was flat as higher net debt balances were offset by a lower weighted average coupon. Other income decreased $48 million, reflecting a make whole charge related to the early redemption of $500 million of long-term notes that were set to mature in 2023. Income tax expense increased $24 million or 11% due to higher pre-tax income, as well as the cycling of certain state and federal tax benefits recognized in the fourth quarter of 2019. Closing out the income statement, CSX delivered operating income of $1.2 billion, reflecting a fourth quarter record 57% operating ratio. Turning to the cash side of the equation on slide 15. On a full year basis, capital investment was relatively flat. Even during the pandemic, we remain committed to investments that prioritize the safety and reliability of our core track, bridge, and signal infrastructure. This commitment will not change. By level loading the maintenance spend, we are improving the safety and fluidity of our network without requiring a step up in core infrastructure spend going forward. Capital allocation remains a focus, and we have a healthy pipeline of high return investments we expect to invest in this year. In 2020, free cash flow before dividends was $2.6 billion, down versus 2019, primarily reflecting lower operating income, but also impacted by lower proceeds from property sales. Free cash flow generation remains a key focus of this team. Even during 2020's challenging environment, free cash flow conversion on net income was about 95%. We expect to stay above 90%, even with slightly higher CapEx and an increase in the expected cash tax rate. Our cash and short-term investment balance remains strong, ending the quarter at $3.1 billion. Our expectation remains that this balance will normalize over time as we continue to invest in the business and return capital to shareholders through dividends and share repurchases. With that, let me turn it back to Jim for his closing remarks. Great. Thanks a lot, Kevin. Concluding with slide 17, we expect to return to growth in 2021 for both CSX and the U.S. economy. While much debate remains around the pace of this growth as we transition from COVID headwinds to potential stimulus-fueled tailwinds, we believe CSX is well-positioned to grow volumes faster than the prevailing GDP growth rate in 2021. Merchandise volumes should outpace industrial production growth as we convert additional truck volumes off the highway and onto CSX. We expect intermodal volumes to grow even faster than merchandise as the business continues to benefit from the ongoing inventory restocking and a tight truck market. Following an extremely challenging year, we expect the coal business to begin recovering from 2020 trough levels. As volumes increase, we will drive incremental operating leverage by efficiently absorbing the additional cars and containers into our revised train plan. We still have significant opportunity to add volumes onto the existing trains. We'll add train starts as needed to maintain high levels of customer service. We project full-year CapEx of $1.7 billion-$1.8 billion. This spend reflects ongoing investments in our core infrastructure, combined with several high return growth investments for technology and sales and marketing initiatives. We will continue to evaluate attractive growth investment opportunities as they arise. From a network perspective, we still have ample line of road and terminal capacity. Lastly, we remain committed to returning excess cash flow to shareholders. We will repurchase shares through our ongoing buyback program. We will look to be opportunistic with share repurchases as we utilize our roughly $6 billion of buyback authority. The actions taken in 2020 have positioned CSX for success, and we are taking the necessary steps to ensure that we are prepared to handle the expected growth in 2021. This past year is proof that although we have accomplished great things during our transformation, our team is still finding opportunities to push this company to new heights. I enter this year as excited as I have ever been for what the future holds for CSX. Thank you. I'll now turn it back to Bill for questions. As you may have noted at the beginning of the call, Mark Wallace is unfortunately not joining us today as he's dealing with a non-COVID personal health issue. The rest of the team will do its best to answer any marketing questions you may have. Thank you, Jim. In the interest of time, I would ask everyone to please limit themselves to one question. With that, we will now take questions. Thank you. We will now conduct our question and answer session. Your first question comes from the line of Brandon Oglenski from Barclays. Your line is open. Hey, good afternoon, everyone, and thanks for taking my question. Well, Jim, I guess maybe we can start there, unfortunate for Mark he's not here, but you guys do sound like you have some confidence that merchandise, I think you've said, will grow in excess of industrial production and intermodal even better than your merchandise outcomes. I guess, are there any specific examples you can give us, where you're winning in the network, and delivering this new service product that we've heard about for a couple of years? How's that translating into confidence this year? Well, in many respects, the conversion of trucks off the highway back onto the rail system, we've talked about it for many years, where it's our existing customers today, where we're doing a lot of work with them already in their boxcar fleet. We know them very well, but we've never really had an opportunity to take a look at their book of business from what they're doing on the doors on the other side of the plant, so to speak, where they're sending it out in truck. Now that our service product has become more reliable, we've been able to capture more and more of that wallet share. That applies whether it's in forest products, whether it's in pulpboard, whether it's in metals, whether it's in chemicals, you name it. We've been able to do that, and I think that's clearly the strategy that we will continue to pursue, along with looking at ways through our TRANSFLO opportunities where we can reach customers' business that before we didn't have the capability to handle because we didn't focus on kind of the last mile business if we didn't directly connect to a customer's location. It's a combination of different factors that spread out really across the entire spectrum of merchandise. Again, principally because our service now is as reliable as a truck, and obviously, maybe it's the easy way, but let's go to our customers that we already know and do business with, and shake the tree there and there is a ton of opportunity for us. Again, similarly in our intermodal franchise, while we're getting more businesses, we're looking at lanes that before we couldn't compete in because we had somewhat of a disjointed network, and we've worked hard to rationalize and improve the service on the network, and that's bringing us additional business. We've been building on this for a number of years, and we expect it to continue to pay benefits in 2021. Thank you, Jim. Your next question comes from the line of Ken Hoexter from Bank of America. Your line is open. Great. Good afternoon. Jim, maybe you could just talk a bit about the missed business opportunity given COVID. Kevin kind of threw out some thoughts that there was some missed opportunity. Can you quantify your thoughts looking back and maybe what that means as how fast you bring employees back into 2021? In terms of missed opportunities, we, CSX, are no different than anybody else in the country. Our employees have been impacted by the virus, to the same degree as everyone else, if not more in the transportation sector because they're essential workers and they're out there on the front lines, in and out every single day, making sure the goods get across the country, and we can take care of people that have the luxury to sit home and ride this thing out. If we've missed any opportunities, it's been as the surge of traffic came back in the third quarter, just about the time the virus began to tick up, and then clearly it took off with the Thanksgiving holiday. We're aware of that. We're prepared for that and maybe we've missed something along the way. I think what Kevin was more and more concerned with, and Kevin is not bashful to express his opinions on this, we think that based upon all the work we've done for the company to make sure that we can grow this business, and with the potential for a rebound in the economy, and with the potential for maybe stimulus, and with the potential for maybe additional transportation spend by the government, we don't want to miss out on something if it comes along. We want to be ready to handle it. We're planning, we're preparing, we're making sure clearly we have track capacity. Clearly we have assets in terms of locomotives, et cetera. What we want to make sure is we have the employees. This is not like we can go hire some guy off the street and put him to work the next day. It takes five, six months to train these people to get them ready. We're aware of the curve, and we want to make sure that we're managing to the curve. I think that's what Kevin was referring to in any missed opportunity, was to make sure that we're prepared to handle growth when it comes. Thanks, Jim. Your next question comes from the line of Amit Mehrotra from Deutsche Bank. Thank you, operator. Hi, everybody. Kevin, I guess with the dynamic of intermodal growth outpacing merchandise growth this year, do you think yields can be up in 2021 versus 2020? If you can just also talk about the magnitude of OR improvement, how should we think about OR improvement given the benefits of higher volume, but then obviously some of the adverse mix that comes with the intermodal outpacing merchandise? Yeah, I think, as I mentioned last quarter, we had the greatest contribution from our intermodal business, which has traditionally been viewed as the least profitable segment of our business. Yeah, we put up a record OR. I think we again proved that in the fourth quarter. You saw the intermodal business obviously having the strongest growth. Again, we were able to deliver record OR performance. As we go into 2021, as with any year, there's normal inflation costs that you have to offset and overcome as you want to improve your margins. Going into next year, we have labor inflation a little bit higher than what we saw in 2020. We have health and welfare costs ticking up a little bit more than what we saw last year. Really inflation, when I look over the long-term average, is probably a little bit under that long-term average, so not a huge significant headwind. Really the variable here is going to be the growth. I am very confident if growth exceeds our expectations, that we'll drop that through at a very attractive incremental margin. Our goal here is to be prepared for the growth, to grow operating income. That's really the goal of what we're talking about around here. It's exciting to talk about and prepare for growth. That's what we're looking at. I mentioned in the H1 of the year, we'll accelerate our hiring to make sure we're prepared for whatever environment comes in the second half. Jamie will quickly adjust accordingly if things change on us, which as we know, this has been a dynamic environment, and we just want to be ahead of the curve and be prepared for it and be able to deliver. I think we all say shame on us if we can't deliver the growth when it comes. That's what we're talking about here internally. Could you just answer the yield question in terms of whether you think yields will be up year-over-year in 2021? Yeah, I think when you look at the H1 of the year, we'll have some fuel surcharge. Fuel will still be a headwind really in the first quarter. That will start to moderate as you get into the second quarter. H2 of the year, you'll see a little bit less fuel surcharge headwind. Coal in the H1 of the year, probably on a yield basis, will be a little bit of headwind. Obviously, you know that market's pretty dynamic, particularly on the export side, but see some support going in the H2 of the year. I would say, definitely expect second half to be improved over first half, but that always goes back to mix as well. If we see some of our higher RPU business, whether it's chemicals or other areas, see continued strength, that certainly helps the dynamic there. The coal dynamic should moderate H1 of the year and really not be as much of a headwind going forward. Okay. Thank you very much. Your next question comes from the line of Allison Landry from Credit Suisse. Your line is open. Thanks. Good afternoon and great job on the quarter. Without specifically focusing on where the OR can go in 2021, I sort of wanted to ask a longer-term question. It sort of seems feasible to do a 55 OR this year, but it just seems like you guys are pushing the boundaries of what we thought might have been even remotely possible for an Eastern rail. I would just love to hear your thoughts on how you view the potential for the longer-term profitability of the business. Obviously, you guys are gaining share, and Jim, you highlighted a number of efficiencies that will come in the future from technology investments. Any thought there? Just sort of lastly, Jim, if you could sort of tell us what you think about the difference between a long haul and a short haul railroad as it comes down to the long-term profitability and if there truly are any structural differences. Thank you. Great, Allison. Good one question. Three years ago, it was just only a couple, three years ago when we were in New York talking about how we were going to take this wore-out, beat-up, run-down railroad and have a 60% operating ratio in a couple, three years, and everybody said "You guys are crazy. It can't be done." Now I think you said that you want double nickels here in next year. We're trying to grow operating income and earnings per share so that we can reward our shareholders and not just get singularly focused on this operating ratio. The operating ratio pretty much will be what it is. Obviously, you saw what we can do when we get our hands dirty and we get focused on what needs to be done in order to run the company better. I truly believe as Jamie and his team, in collaboration with Mark and the sales and marketing team, collaborate on how we need to get this company running more, even much, much, much more reliably and faster in the future in order to provide a better quality product to our customers. The ultimate result of all of that is that we take a lot of crazy unnecessary activities out of the system that we do today, and that drives down the cost. Without focusing on a specific reduction in the operating ratio, I firmly believe that we will continue to drive efficiency, and we'll do that as we focus on building a better product for our customers. In terms of short haul railroads versus long haul railroads in the operating ratio, again, every railroad is slightly different. Every railroad has its nuances. We used to have some really, really, really nice long haul routes across Western Canada back in the day when I used to work there. It was very nice to ride along and take a look at the moose and some green fields and a little bit of this and a little bit of that, and go for couple 1,000 miles. There weren't any customers. Here we're winding around and maybe got a little shorter haul, a little more challenges, but we're stopping all the time because we got customers all over the place. It comes with what it is. There's a lot of business activity in the East that we have the opportunity here to take advantage of. That's a good thing. Another part of my history goes back to my days at the Chicago and North Western when we built the line into the Powder River Basin, the coal fields, a subsidiary called Western Railroad Properties, which is about 200 miles long, had an operating ratio that started with a four handle. Every railroad property is different. Every railroad property is unique. Our goal is to have the best quality product and do it in the most efficient way, and if we do those two things, the thing that happens is we make a lot of money doing it. Thank you. Your next question comes from the line of Tom Wadewitz from UBS. Your line is open. Yeah, good afternoon. Wanted to see if you could give a sense of, I think, Kevin, you said you're going to add headcount above the pace of attrition. I know there's a lead time to have T&E get them recruited and get them trained up and on the system. I would assume you have pretty good visibility to what that number is if you look at the next quarter or two, and wanted to see if you could give us a sense, is that sequentially a 1% increase or three or just kind of magnitude? Is it a big step up or is it something that's pretty gradual? Is that something we should think about in terms of our margin modeling in H1 of the year? Is it just kind of small, so doesn't really affect how you do with incrementals or margins? No, this is, and maybe I'll hand it over to Jamie to talk a little bit about his strategy and what he's really planning for here. No, these aren't in order of magnitude, huge step up in our hiring process. A lot of it's to get ahead of the attrition rates that we see coming ahead in 2021. I think we're pretty confident that, again, we're going to have the operating leverage that we've continued to deliver. I wouldn't expect headcount to go up more than the volumes that we're going to see and the revenue increases. We'll adjust the model accordingly as I think we have more visibility, hopefully, going forward on where volumes are trending. We've seen a lot of volatility in every market out there. Hopefully, that volatility starts to diminish here a bit, as we move to the H2 of the year. Jamie? Yeah, thanks. If I was to look at percentages, when you think about it, our attrition rate is somewhere around 8% per year. What we want to do is kind of front load that attrition rate, keep a good eye on our discussions with Mark and his team to make sure we're ahead of that business that might be coming our way as we progress through the year, which then allows us to backfill the rest of that attrition towards the back end of the year. If the business doesn't come, we'll be in a situation where we can at least attrit out to the end of the year, and go from there. Again, as Jim said, it takes four to six months to make a conductor. If we don't get ahead of this now, and the business comes along, we're going to be leaving it on the ground, and that's the last thing we want to do. The headcount increases sequentially early in the year, and then if the business isn't there, the attrition could kick in and it could fall back off. Is that essentially what you're saying? Absolutely. That's how we're setting it up, you got it. Okay. Thank you. Our next question comes from the line of Justin Long from Stephens. Your line is open. Thanks, good afternoon. I wanted to ask about comp per employee. Kevin, any color you can provide on what you're expecting there over the course of 2021? Maybe for Jamie, I was wondering if we could get an update on the number of locomotives in storage today and what you're anticipating for that utilization rate going forward. I'll take the comp for employee. As I talked about in my opening remarks, we're going to see a little bit of more labor inflation this year. We'll see the management increase take effect here January 1, which is a little bit different than what we've seen in previous years. That'll be effective in the first quarter. Overall, I think, historically, we talked about this 3% increase and without knowing what really incentive comp can move around quarter-to-quarter, all those things, I think a 3% kind of range is a good starting point. Look on the asset side, in particular, locomotives. We started this back in 2017 with almost 4,000 locomotives. Our fleet's down 2,150, I think, today, right around that area. We've got hundreds of locomotives still in storage, ready to pull out when needed. We're also continuing to invest in our locomotive fleet. I mean, our CapEx coming up this year, we're going to continue to rebuild locomotives. We've got 67 in the plan this year and continuing to do that as we go forward. It's really important that we continue to invest in the assets that we have. That allows us to put Trip Optimizer, distributed power, fuel savings, as well as reliability. We're comfortable with the assets that we have now. We just want to continue to invest in rebuilding what we have going forward. Okay, great. Thanks for the time. Your next question comes from the line of Scott Group from Wolfe Research. Your line is open. Hey, thanks. Afternoon, guys. Kevin, any color you can give us on MS&O costs that you expect for the year? I know it's volatile, but any color there? On the OR, I know we're not getting guidance, but almost always the full year OR is better than fourth quarter. Is there anything wrong with that line of thinking right now? The first quarter better than fourth quarter? No, meaning if you look at a full year- Okay. It's almost always better than the fourth quarter you just had. Again, I think we gave relative revenue guidance because there is a little bit of uncertainty, I think, as you get into the second half. Hopefully, some of these initiatives that Jim talked about will take hold, and we'll see the economy strengthen through the back half of the year. I think we're real comfortable just saying that we're pretty confident in the incremental margins that we've been able to deliver, and we'll continue to do that, particularly as if we get stronger revenue growth than we expect there. That's the opportunity. On the MS&O, when you look at the fourth quarter, really, we're able to deliver what we thought we were going to do when we guided in the third quarter. Real estate sales going into 2021 will be flat, so not a real big factor or driver on those costs on a year-over-year basis. We do expect inflation to hit us in 2021 there. Again, it's an area where we have a lot of focus, and we'll continue to try to find opportunities to take out costs. I think expect some normal inflation impact to that line item, but nothing real impactful there moving into 2021. It'll move also with volume. If volume is a little bit higher than what we expect, you would see some variable costs move up with that as well. Okay. Thank you, guys. Your next question comes from the line of Chris Wetherbee from Citi. Your line is open. Yeah. Hey, thanks. Good afternoon. Yeah, I guess I wanted to ask a question about service. We think about the H2 of the year. Obviously, service was a little bit more challenged, still quite good, but down from where you were in the H1 of the year. When you think about headcount and maybe resources, is there a level, I guess, number one, on the service, is there a level where you feel like you're comfortable or maybe you need to address it to move the needle moving back up? Second, when you think about maybe a little bit of the front load from a headcount perspective, does that have an impact on the service, or would you expect that to have an impact on the services as you move into the H1 of the year? Yeah, let me just make a general comment, and then Jamie can answer you into the details about where we are in terms of headcount. I think the railroads are not unique in the H2 of the year. This phenomena with everyone trying to keep up with this unprecedented volume is creating issues, whether it be in foreign ports, whether it be in ocean vessels, whether it be in the West Coast ports, the East Coast ports, the railroads, the trucks, the logistics service providers, you name it. Everybody is dealing with a situation where volumes are unprecedented and volatile. At the same time, when we have hundreds, literally hundreds of employees off sick or in quarantine. One day it's on the west side of the railroad, and the next day it's on the east side of the railroad, the next day it's on the north side of the railroad, the next day it's in Florida. For us to be doing the job from a service standpoint right now, I don't think anybody is saying they're having problems because the railroads are screwed up. We're doing a really, really, really good job of managing our way through this, and I'll let Jamie talk in some more detail about what it is we're doing. I think Jim really nailed it with respect to some of the pockets we're seeing and why some of the levels aren't where they were historically. You really look at some of the stuff that we have gained, though, as well. When you look at 19% all-time record train length increase year-over-year, the fuel efficiency, everything else that we've been able to keep and maintain and continue to move forward as we talk about 2021. I can tell you today Jim said hundreds and hundreds of employees are off. That's correct. As we start to see 100 employees less, let's say, today than we were a few weeks ago, yeah, we're starting to feel that we're getting even more fluid. As those numbers come down, we feel like we have the right number of people out there if everyone returned to work. I wish I could predict where the next pocket was going to be and try to send people that way, but it's difficult to do that. Yeah, we're going to hit some bumps and bruises, I think, over the next quarter or so on some of our service levels, but we are pushing. Is there a limit where we're happy? No, absolutely not. If anyone wants to ask the question, is there anything left? What else are you going to continue to do? It's normally a question we get asked. Well, our dwell and velocity isn't where it needs to be. That's an opportunity. As we continue to maintain all the hard work that we've done with the new plan and the team that I've got out there working hard day in and day out on dwell and velocity and what's going on in the terminals, we're going to get that much better. As business comes back and as we do some hiring, it helps us move the new commodities that we have come online. Really, what we have today is just a matter of dealing with the pockets that are out there. I can tell you, it is a daily exercise in trying to understand how some terminals we work around have 40% of our employees being off with COVID. It doesn't just normally hit a small percentage. We do have it across the property, but we have some pockets where 40% of our employees are gone for a period of time. We've got a great team that moves into there, helps out. We work ourselves through it. We work around it, which is great about the network we have, is we can do that and continue to move the product. Look, we will see our numbers continue to improve as we move forward. Again, sometimes it's a daily exercise depending on where we're having our COVID issues. Got it. Thanks for the call, guys. Appreciate it. Your next question comes from the line of Bascome Majors from Susquehanna. Your line is open. Yes, good afternoon. Kevin, you talked about your excess cash balance and looking to normalize it over time. Is that something you're targeting for this year, or could that be more gradual? Just any thoughts on how you want to manage your liquidity and balance sheet with the cash flow you expect to generate this year would be helpful. Thanks. Yeah, I think, look, I would expect something lower by the time we exit this year. Yeah, I think that's probably a this year event. We'll watch it closely here. Certainly, as we get more comfortable with the trajectory of the economy and those things, we'll have those discussions internally here on what makes sense. We always want to be opportunistic, so we'll be there opportunistically in the stock as well. It gives us a lot of flexibility. We're going to generate a lot of cash this year as well. It's a good position to be in. It's a position of strength. We'll do the best we can. Thank you. Your next question comes from the line of Brian Ossenbeck from JP Morgan. Your line is open. Hey, good evening. Thanks for taking the question. Jim, maybe I'll take you up on the dwell and velocity one. They have deteriorated for a while here. Obviously, volumes have been quite volatile. How you've had longer trains to help offset that. Challenge doesn't seem to be a headwind financially now, but we've also seen the cars online come up quite a bit. Maybe you can dig in a little bit deeper and give us a sense as to what has been the challenge outside of labor and what do you see sort of the opportunities, maybe a timeframe as to seeing some improvement. If, Jim, you can comment on the growth opportunities you're seeing from the truck conversion side. That doesn't sound like any of the service challenges now or in recent quarters are really affecting anything. I'd like you to just clarify that for us as well. If the customers are just needing capacity and you have it, and it's really just tough out there for everybody. Okay. I'll try to take a stab at You were hard to hear, but let me try to work down with respect to what we're sitting with with some of our metrics. Yeah. Our dwell and our velocity definitely has been impacted here over the past probably couple of months. We've seen probably more of a deterioration really over the past month, if you take a look at some of our numbers. Again, a lot of that's COVID related. For us, it's really important to show that as an opportunity as well. As we continue to move things faster and we get our dwell to where we know it can be and will be, those are costs that are going to continue to come out as we look at our plan. Cars online, our target, we're a little bit above where our target, where we really want it to be. You got to think, when we started this back in 2017, we were over 150,000 cars online. Now we're somewhere around 100,000, maybe 120,000, depending on where you're looking at it. We have done some things differently on that end. There was a time, I would say a year ago, where we were shooting for a 90% fill rate because we didn't necessarily understand whether the fill rate was correct with what the customers were ordering and not ordering. Mark and his team have done an unbelievable job working with us to understand that that fill rate now, pushing it to 100%, gives us that extra business that Jim's been talking about knocking on our customers' doors to say, "Hey, why are you trucking when you got rail service? Give it to us and allow us that reliability. That means at some point, you're going to have to bring on some cars online as you take a look at fulfilling 100% fill rate. That's what we're pushing towards in our model. We're comfortable with that. We're keeping a good eye on what those cars look like as they move around. If anything, the opportunity as we look at the car fleet we have now, as we start picking up that velocity, we're going to get more loads out of those cars that are out there, which is more opportunity for us to be able to spin the customer cars. Some of the highest numbers that we have year-over-year are private cars. That's an opportunity there for customers to spin their cars faster and give us four or five more loads a year as we get quicker. Look, it's opportunity, opportunity as we move forward with the plan that we put in. By doing all those things correctly in a coordinated fashion between operations and sales and marketing, that's what's driving this business from the highway onto the rail. Got it. Thank you. Your next question comes from the line of David Vernon from Bernstein. Your line is open. Hey, guys. Thanks for taking the question. Jamie, I was wondering if you could kind of help us understand that rate of resource addition in relation to volume growth. I think you guys are laying out a picture that says somewhere in the mid-single digits on volume, and I'm not asking you to confirm that as a volume guide. I'm just trying to get a sense for if we're going to be at that level of volume growth, what level of resource do you need to add into the network from today's levels to kind of keep pace with that at the service level you want to provide? Look, when we talk about hard assets with respect to locomotives, we're in a good spot. Are we going to need to use some more locomotives as some volume starts to come back? Yeah. When you look at bulk business, definitely those are pure train starts. When you look at our car fleet, I'm comfortable that as our dwell continues to come down as we move forward, we'll need less boxcars. We're going to make sure that we hit that fulfillment rate of 100%. That's a 10% difference when you really think about 90% was a target a year or so ago. Now it's 100% as we move forward with our customers showing the reliability of being there with the car supply we say we're going to be. Yeah, you're going to see a bit of an increase. Where we're at right now is a good spot. As we move faster, as I mentioned, we'll get that many more loads out of the cars that are out there, which is going to help that growth as we continue to move forward. I think we've really touched on the people side of things. Front loading is the right thing to do. It gives us that four to six months to do that hiring practice, and deal with the attrition that we see out there and prepare us for what's going to happen towards the second half. Yeah, David, the hiring is really offsetting the attrition that we expect through the full year, but really front-end loading that so we can get ahead of it and react to any volume upside that could occur in the second half. Yeah, I'm just trying to get a sense for like, do we need to be at this 1,902 level? Could we accommodate a 5% volume growth with the current headcount level, or does it need to be a little bit higher than that? What's the proportion at which the headcount would need to be added back? I think a lot of this is going to give us the ability to hit the hot pockets where we're low on crews right now, and it's really redistributing, Jamie, correct me if I'm wrong, redistributing a lot of the employees to where we were going to need them, where we see the growth coming. Yeah. It's based off of, obviously, we look at our attrition rate and where it's at and where we expect those employees to attrit out. This is working very close with the marketing team. This is very, as Jim mentioned earlier, the closer that Mark and myself and our teams work together, we know and have an idea where this business growth is going to come from. Could it throw us a curveball? Sure, it could. You know, as it stands right now, we're preparing in those areas that we need to, and we're going to make sure that we hire to make sure we capture that growth. Look at cars online, really, when you look at year-over-year, the percentage is 12%, but really we're down 4% full year versus prior full year. We're not talking about a big percentage point here. It's really important that we give the reliability of getting that boxcar to 100% fulfillment if we want those customers to convert over. Thank you. Your next question comes from the line of Jonathan Chappell from Evercore ISI. Your line is open. Thank you. Good evening, everyone. Thanks for confirming the view on coal improving from the 2020 trough levels. I wanted to get your views on how much of that is anticipation of the domestic market versus the export market, and as it relates to the latter, we're seeing shortages in certain regions of the world because of the bitter winter weather, and some trade issues. Have you seen any uptick in your export coal opportunities given some of those issues? Yeah, I think when you look at our coal business, fourth quarter showed a little bit of strength versus the previous three. We're exiting the year at a little bit better position than what we saw called the middle of the year here. Going into next year, probably the strength that we anticipate will really be on the domestic side with a little bit of the utility stockpiles below normal levels. We see some opportunity there. You see the same benchmark prices on the export side that we see. They stabilize, which is a good sign. They're still well below the levels that we saw pre-pandemic. Whether that's an opportunity from here, we hope so. I think the risk-reward is probably a little bit more balanced than it has been in previous years or particularly coming into 2020. You're probably referencing the China, Australia spat they have on the coal side right now, not helping the global prices right now, not really helping us. Hopefully, that gets resolved and we'll see some maybe met price upside here going forward, but that's a very difficult market for us to predict. On the thermal side, if you look at our business today in the fourth quarter, really, that export business is 75% met and 25% thermal. If you get some of these polar vortex impacting some of the global markets and get a cold wave here, maybe that's an opportunity because we're delivering very little to Europe and other areas today. We're going into the year cautiously optimistic. Don't see a huge upside case, but see a little bit of stability and strength off of the fourth quarter. Sounds great. Thanks, Kevin. Your next question comes from the line of Jordan Alliger from Goldman Sachs. Your line is open. Yeah. Hi. Just one quick question. To the extent you have it, do you have your economic thoughts that sort of underpin the commentary you made on volume? In other words, volumes greater than GDP, merchandise greater than industrial production. What is your economic guys saying around those two measures? Well, as I said, there are a lot of different views on what the underlying number is going to be. Right now, we're trying to find what is the most reliable number for us to look at. Also at the same time, as you know, everybody's adjusting their numbers, and to a large degree, some of them, they're adjusting them down. Our guys have a, I'm sure they have an independent view, but it's not something that we're going to put out there as what we think right now is something that we're willing to bet the farm on, so to speak, in how we're going to run the company. We're trying to look at all the different viewpoints. As we move further into 2021, hopefully things get clearer and clearer for us as we progress. Okay, thanks so much. Your next question comes from the line of Jason Seidl from Cowen. Your line is open. Thank you, operator. Hey, gentlemen. My best to Mark. Hope he feels better. Wanted to talk a little bit about your trip plan compliance. It looks like things are going in the right direction on the car load side. Talk a little bit about what you guys are doing there to improve that. Is there really anything that the railroad can do right now to materially move the intermodal trip plan compliance, or is this all just sort of congestion needs to work through some of the ports and some of the inland facilities? Let me start with the trip plans on the intermodal side. We have what we consider probably on both ends, the most stringent trip plans out there with respect to always making sure that we measure both loads and empties, whether that's intermodal or on the merchandise side. I'd like to say our times are probably some of the most stringent times out there, where on the intermodal side, you're arriving to the minute. Over the past couple of months or month or so, UPS peak was amazing. It was a big, big quarter. I don't think that's a surprise. As we felt some pressure at different ports in different areas, we got the opportunity to move even more UPS traffic than we expected to. Some of our international traffic that isn't as time sensitive, may have taken a little longer to get off the port than we normally would to make sure we moved the time-sensitive traffic. Going forward, I fully look at our numbers with respect to the intermodal side, 90 above is where we should be. We're shooting for above 95% on that, and I'm confident that our team is there. We're starting to see some of those numbers hit already as we've moved past some of that UPS peak. On the car load side, again, you miss by two hours on the car load side, that's it. It's failed, whether it's a load or an empty. Our connections are tight from terminal to terminal, and if you have some of those COVID pockets, where 40% of your terminal is off, and it takes you an extra six or eight or 10 hours to get a car through a terminal, that's a failure. We're not willing to change our standards and our metrics with respect to where they sit to getting to that last mile. We're going to work through this, which we have. We've seen some improvement on the numbers. Not as quick as I would like to see some of those continue to move forward. We do have the best metrics with respect to those who look at trip plans out there today. We're confident that moving forward, we're going to see that number get up into the 1980s. Our target will continue to be to push forward with that, which will allow that reliability for Mark and his team to go out there and continue to sell this product that we built. That's great color, and I'm glad to hear things are moving in the right direction on the numbers, and everyone be safe out there. Appreciate the time, as always. Thank you. Your next question comes from the line of Ravi Shanker from Morgan Stanley. Your line is open. Thanks for being here, everyone. Just to kind of wind up here, am I expecting a bit of a tone shift on the OR here? I think over time you guys have kind of clearly mentioned that you are going to be pursuing growth to a greater extent going forward. As we think of that three to five year OR algorithm going forward, again, you're starting to sound a little bit more like the Canadian rails who are saying, "Hey, OR is not the only thing as a standalone." We're going to be looking at growth and growing EBIT dollars here. Are you targeting sticking to a high 1950s OR but pushing the top line much higher from here? Well, again, we've never said that we are singularly focused on one thing only, that's trying to get the operating ratio down. Just in simplistic terms, if we wanted a 50 operating ratio, we'd have a 50 operating ratio. We'd do it quickly. Not sure what would be left of the company in the process. It's always a balance between trying to do things as efficiently as you possibly can while you're delivering a good product to the customer so you can grow the business. That's always, from day one, since I walked in the door here, been the plan. It just takes a while to get the railroad to run right so you can start to be able to generate some new business. The algorithm going forward is the algorithm that we've had in place for the last three, going on four years, focused on delivering a really high quality, good, reliable product to the customer which allows you to get more business. If you do that, you drive a whole bunch of unnecessary costs out of the company and you increase efficiency. When you do that, you make a lot of money. When you make a lot of money, shareholders are happy. That's our simple business plan. Great. Maybe just a quick follow-up. We have a new administration sworn in. Are there any two or three things you're looking for from D.C., something you're watching out for, either as in a tailwind or a headwind? Government stability. Is that too much to ask for? That would be a good start. Let's give them a couple of weeks to figure out whether or not we're going to have that, and then we can start figuring out if there's any significant real change in anybody's agenda. We're used to working with, not only on the federal level, but we operate in 22, 23 states. Some of them are led by a Democratic governor and some are led by a Republican governor. We're used to dealing with all kinds of philosophies and viewpoints as it relates to government relations with business. It's not new to us. We'll just figure out what to do and how to interact, and then we'll get along fine with everybody. Great. Thanks, guys. Your next question comes from the line of Walter Spracklin from RBC Capital Markets. Your line is open. Yeah, thanks so much. Good evening. Just to follow up on that question with regards to Washington and looking back, a swing in power in favor of the Democrats has not been a good thing from a railroad regulatory standpoint. Now that your ORs are trending where they are, Jim, do you see any risk that regulators start to put close attention on the returns you're getting now and introduce new risk of changes or more leniency or favoritism towards customer here? No, not necessarily. There's a mix on the STB that goes back and forth in terms of whether it's now, I guess it's 3-2 versus what it was before, maybe 2-3 versus maybe what it was at one point in time. This is something we're always dealing with. We're not unique in the sense that we have a regulator. It's not like every airline, railroad, telephone company, TV company, you name it, anybody that's got a regulator all of a sudden is worried about the end of days. We just adapt, and we figure out what it is their concerns are, and we work appropriately with them, and we've been doing this for a couple of hundred years and doing it successfully. Okay, understand. If I could, just a clarification question for Kevin here. On the question of yield, I know you answered that on a segmented basis. If I lump it all together, am I right in interpreting what you said, that yield is going to be negative in the early part of the year and possibly turn positive in the back half? Is that the right way to look at yield? It's been so negative this year, it'll obviously have a pretty big impact depending on which direction we go on the magnitude of the yield here. Yeah. Like I said, the fuel surcharge will be a headwind in the first quarter. That'll weigh on the yield similarly to what we saw in the fourth quarter here. That will moderate in the second quarter, and then I think you'll see some improvement. I always have to caveat it with mix matters, right? Depending on what markets, hopefully, the strong markets like our chemical business and others continue to have some upside, and that'll obviously be a huge impact to our yield performance. If the coal export market strengthens, as you know, our contracts are structured to participate in the commodity prices if they strengthen. That would be also an opportunity for us into the back half of the year. Offsetting that, I think we are still very bullish on, as you heard us talk about on the intermodal side, it's a really good business for us, happens to have a lower RPU. We made good money there. Jamie's ready to handle more growth there, and we have a great team going after more opportunities. All else equal, where we see it today, which will change probably tomorrow. Yeah, a little bit of headwinds in the first quarter, probably strengthening into the back half of the year. Okay. Appreciate the time. Thank you. Your next question comes from the line of David Ross from Stifel. Your line is open. Thank you. I love the enthusiasm, operator. Kevin, I wanted to follow up on your last comment there about intermodal, specifically related to intermodal pricing. Is the expectation for better than normal intermodal pricing given what's going on in the truckload market, or is it going to be more of a cost recovery, low single-digit type yield improvement story? We don't see real-time, some of our partners see in terms of price. We'll generally see a lag there. There's also inflation adjusters that occur on a lag basis as well. Again, it kind of flips with my commentary around probably second half, hopefully showing some improvement over the first half. Unfortunately, in strong markets, we don't get to reprice our entire book of business today. These things happen over time. We'll need the markets to remain strong and supportive. That, I think we're somewhat optimistic, but there's a lot of time will tell with what happens going forward. If the economy can strengthen the back half of the year, that certainly will help the discussions our sales and marketing team are having. They're out there selling the business hard right now. Good. Thanks. Ladies and gentlemen, this concludes our question and answer session and concludes today's teleconference. Thank you for your participation in today's call. You may now disconnect.