All right, good morning, everyone. My name's Garrett Holland, Senior Analyst covering transportation and logistics here at Baird. We appreciate you being here at the conference. It's great to kick off day two with CSX. From the company, we've got Mike Cory, Executive Vice President and Chief Operating Officer, as well as Sean Pelkey, Executive Vice President and Chief Financial Officer. Matthew Korn also here, Head of Investor Relations and Strategy. We're going to dive right into Q&A, but if you have any questions, feel free to raise your hand, and we'll be sure to work you into the conversation. So, gentlemen, thanks for being here today. I guess maybe just to set the table, what do both of you see as the structural advantages of the CSX business and network? You go ahead. Sure. Yeah, well, Garrett, thanks for having us here today. Before I get into comments, I do want to recognize we had an announcement yesterday. Nathan Goldman, our Chief Legal Officer, is leaving us after decades of service. He's a trusted advisor, a friend, a great coworker. So, you know, happy for him and happy to have Mike Burns come in behind him. So, but in terms of where we are structurally, I think we're in a great spot, right? I said last week at our Investor Day, you know, we've got a competitive advantage, which is a network that serves two-thirds of the U.S. population, a tremendous merchandise franchise that I think until recently has been underutilized. We haven't fully captured the potential of that network. And I think that's because, you know, we're at a good point now in terms of where the capacity is. We've reduced a lot of train starts over the years, including some just recently as Mike's been kind of re-engineering the network, so we've got capacity to grow into the network at very strong incremental margins. We talked about 50%-70% incremental margin on the growth that we project over the next couple of years, so excited about where the future takes us and also the efficiency opportunities we can drive while we're absorbing some volume growth onto the network. Yeah, Garrett, I'll just add a couple of things. You know, from an operational perspective, the opportunity, because of the wide book of business, the different commodities, the two-thirds U.S. population, helps us to really re-engineer, as Sean's saying, some of the locations that over time, you know, we've made changes to. And we can increase speed, but also know when we make an investment, the volume is going to be there because it's very condensed. And so from a network perspective and operations, as much as it's complex with customers and touches, we do have the facility and the view to elongate some of those things and really try to make it more linear. And there's great opportunity in that because of the volume we have, the type. I know that the team has messaged the importance of culture and the cultural change that's gone on over the past few years. Can you give us some anecdotes, or how would you describe the importance of that as you both see it? I'll jump on that one, Sean. The company's gone through tremendous change in the last four or five years. You know, and as someone who lived it, you know, 20 years ago at CN for a good nine, ten years, you just lose, you know, the whole is far greater than the sum of the parts. I mean, it's simple to say, but we have really been driven by operations over the last few years. And I don't want to say we've lost the ability to use the talent that we have in other functions, but there's great opportunity when operations and marketing and right down to the ground level are connected because at the end of the day, we want to serve our customers. We want to do it in an efficient way, right? And so the culture piece means everybody's not just valued, but they're accountable, they're empowered. They're all about learning what we do together. And we've got everything just in operations alone, the various functions. We've been able to bring groups together like engineering and transportation and reduce our overall cost just because it's not just communication, but people are building processes together, not within their own groups. And as we expand that throughout the company, it's the only way we are going to grow efficiently, but our number one focus is our culture. Yeah, and I would just add, Garrett, that when your employees feel valued and respected, they get hungry, they want to win, they want to fight for the team and for the success of the company. I think you're seeing that happen. We had a customer panel the night before the Investor Day last week. I know not everybody was able to join us there, but I think what you saw there was evidence. We had two customers come and join us on the panel with Kevin and speak to what's happening at CSX, how we're approaching those customer partnerships differently, engaging both our sales and marketing and our operations teams with the customers to think creatively about how we convert some of that truck share over to rail in a way that we've never been able to do it before. I think what you heard from the customers directly was five years ago, we wouldn't have been willing to do this with CSX, let alone any other railroad. That has changed given some of the transformation that's happened at CSX. The service product is better. They're working to figure out ways to convert this freight in a way that, you know, they haven't been willing to do before. And operations is coming along with it. We're not selling into areas we don't have capacity. We're doing it smartly and, you know, using close collaboration between operations and sales and marketing. That's great perspective. Obviously, over the last week, we've had a change in administration with the election outcome. It's early days, obviously, but help us understand the impacts as you see them from potential tariffs, tax reform, and deregulation? I'm not going to predict what's going to ensue in the next couple of years. What I will say is to the extent there's tax reform, CSX is going to be a direct beneficiary of that. You know, we are, you know, we're a U.S. company. We pay our taxes and we pay them at the federal statutory rate, so that would benefit us. You know, we do think that there are some markets that have been in, you know, sort of this holding period, waiting period that have been in cyclical decline. Obviously, the truckload market's been very challenging the last couple of years. So I think there's some hope and optimism that we may start to see those things turn as we get into 2025 and 2026. We're not necessarily building that into our forecasts. Our baseline assumptions are for industrial production growth of 1%, GDP growth of 2%. But we do see, you know, scenarios that could play out that could be supportive to see certain markets like metals, autos, and truck competitive markets start to turn in the next couple of years. From a regulatory standpoint, you know, I think we've always worked very, very well with our regulators, whether it be the STB or the FRA or others. Our goal is going to be to continue to partner with those agencies to try to drive positive change for the industry that's pro-competitive, that's pro-growth. And we see a lot of opportunities, frankly, to continue to invest in technology that can drive safety and productivity enhancements. And we're hopeful that as we see the future play itself out, some of those opportunities will come to fruition. Yeah, much more to come there. Mike, help us understand what you're seeing as you look at the service metrics and performance of the network, as Sean referred to, lower train starts with volume growth in Q3 encouraging. You know, is there more opportunity to take resources off the network? What do you see today? Yeah, Garrett, well, you know, let's start off with this last quarter. It was a tough quarter with the storms. And really, I think I said it at our Analyst Day, up till July, we were really humming. Things were good. All of our metrics were in the right line. And so it's been a real, it's been disruptive this last few months. And like I said at the day, we essentially are back in terms of fluidity. We're not back where our metrics will be. A slight little overhang in Florida. Florida was shut down for quite a while, and it's a big customer source for us. But in terms of the efficiency, yes. And this isn't just brute, hard, get out in the field efficiency, although that's the first thing we always look at. Are we being efficient with the tools and the people we have? When I talk about optimizing the network, there's opportunity to create these economies of scale where we can eliminate areas that are single point of contact or touch. So cars stop, get switched, come back. The more we can amalgamate that into one location, it's really the speed we're after. Speed will then spiral through all the costs that we actually have. And I see great this next year coming up with the initiatives we have in place. I see metrics improving. I'm not looking generally to find one number that fits. It's really about service, safety, service, and cost. And as we go through these exercises, we're really looking hard at externalizing some of our metrics with our customers, with our employees, so that we're not just focused inwardly. And I think that's where there's a big gain, and it drives it back to culture. It drives it back to people really understanding what they need to do. So I see the metrics improving, but the metrics aren't, the ones we publish aren't just the only thing we look at. Now, that's great perspective. You know, if we think about the Cumberland example, how did that, you know, how did you discover that? You're taking route miles out. Where do you see more opportunity for optimization across the network? You know, we identified about eight locations, and we haven't strategically built them into the long-term plan. This is straight, and I don't like to use the term PSR. I wasn't brought up on that, but this is about people getting out in the field and looking and asking and learning. So for me, I was looking essentially, we were looking at our crew utilization in the terminal of Baltimore. And when you start doing those things, you go past one location, you look at the whole crew, and then Cumberland was a piece of it. And when I got there and saw the condition of the yard, I just started asking questions. And sure enough, a decision was made to shut the hump down, which was fine, but then not to make it more efficient. That decision wasn't made, and we effectively shut more of the yard down over time. But, you know, if things are done just in little pieces, you don't notice the big overall output at the end. And in this case, there were millions of out-of- route miles. There were locations we set up, like I said, that cars would get there, stop, reswitch, the same train that set them off the next day would pick them up. So we needed, it was an obvious one to me. And we've got out of the eight locations, something as simple. We have a hump yard where we have a pullback track that's 6,000 ft. Trains are about 9,000 ft to come in, and the receiving tracks are 9,000 ft. So every time a train comes in, we can only hump 6,000 ft of it. So it's a duplication. It's double handling of some cars on the same train. You'd think, why not increase the size of the pullback? Well, we are. It's simple, but you ask why? It's because people don't ask why. And that's really the foundation we're trying to create to learn and ask and understand. And again, I'm going to keep coming back to culture. This isn't just operations. We work very closely with operations and marketing. We work very closely with finance. We work very closely with our community, our community people in terms of making sure the things we're doing are long-lasting. And so those questions, like I said, we have eight of them. We have Ohio as a location. We have various yards. We want to look at creating some mass. I could keep going through all of them, but it's continuous. It never ends. To stay on that topic, I had the opportunity and good fortune to tour the Waycross facility last week, so we're in the yard tower, you know, sitting next to the yard master and just watching, you know, these cars come in, uncouple, roll over the hump, down into the bowl, just a picture of cars. Four cars a minute. You know, the error rate, you tell me, close to zero. Oh, yeah. No, you don't hump cars twice if you can help it. But yet, Waycross was cited as a yard, your largest terminal, where there is more opportunity for efficiency. Where do you see that? What do you see when you're in the tower? I see occupation of the hump. I see people moving. Those are the first things you look at. When those aren't happening, you're not getting the best out of your asset, but Waycross, for example, it's such a key location for us. We needed to build surge capacity, and we really learned this through these storms. When traffic backs up, the way our network works, it can affect thousands of miles away, and so with Waycross, it was something as simple as you saw all the locomotives we have stored there, and they're for later on for remodifying. We found a perfect location to build a surge yard where we could not hump necessarily, but flat switch 700 cars, so these key areas for us have to have some resiliency. It doesn't mean we hire people, we have extra things. It just means when you look at the infrastructure, you want to be able to expand and at the same time contract when the volumes come, and that's really what we're doing at Waycross, is using another yard that's within Waycross to now become a surge yard, so when volumes get too much for the hump, because we do, we will have a limit, then we're able to continue the flow through Waycross. Yeah, it's a fascinating place, but it's not just all, you know, decades of experience. You're using a lot of technology. Absolutely. You know, it looks like a trading floor, screens everywhere. How are you using technology to improve operations, the customer experience? Visibility of data. We're starting to create one single source of information. We're building that visibility, though, so it's a linear view for people to see. We did not have the information for the people in the field to look beyond where they were, and this 24, 48, as far out as we can go to see and plan and react is what we're trying to build, but in a place like Waycross, you got to remember, I started 40-something years ago, and I started in a hump yard in Winnipeg at Symington Yard at CN. There was like seven or eight people doing the job of three, and the technology that you see that takes the car, it has 27 different variables. It's looking at weight. It's looking at the last four or five times it came through the yard, how fast it rolls, the type of car, the type of wheels, the distance to the next. It's doing all these things that humans did, and we continue to expand on that. More so now, though, from the visibility of information and the ability to machine learn some of our decisions so that we can not just provide a front-end view of information, but here are some scenarios and some suggestions as to what you can do. That's the next step. Oh, that's great. Obviously, you need a strong service foundation and culture, but the benefit there should yield growth. Talk a little bit more about the Select Sites program. You've been at this for years. It takes time to install that production capacity for your customers. But what's the visibility you have from a growth standpoint as you think about your merchandise business? Yeah, we've got a lot of visibility. So you're talking about our Industrial Development site selection. And, you know, we've seen such a significant pickup in the amount of activity there. Not only that, but also the capabilities that we have internally have gotten much better. We've got boots on the ground across our network to work with developers, with local authorities, make sure we're figuring out where are those sites that are rail-served or potentially rail-served. And let's make sure those sites are ready to go. They're shovel-ready. They've got utilities, they've got roads, they've got the rail capability, permits, everything that's needed. So when you've got a company that's looking to locate quickly on a rail-served site, everything's in place. And by the way, most of the time we don't own the property, so it's not on our balance sheet, which is nice. And so we're ready. When that activity occurs, we partner, and then you're talking about building a relationship with a customer that in most cases is going to be decades long. That initial contract might be five to 10 years, so we've got tremendous visibility as those plants come online to the growth that we expect and the sustainability of that growth over a long period of time, usually with relatively minimal investment. So the returns on it are quite high. We've got about 540 projects that are in the active pipeline. We've got 40 Select Sites that's more than triple what we had just a year ago, so the team's really been working hard to expand that pipeline, and we're optimistic that as we continue to see onshoring of manufacturing and companies looking to bring their supply chains more local, that's going to benefit us. Christina Bottomley, who leads Industrial Development, showed a heat map slide of where all that Industrial Development activity is taking place. If you overlay our network on top of that, it's a perfect match. There's little pockets out west, but by and large, you know, the vast majority of what's happening is benefiting CSX in the east. Yeah, just to guarantee, one of the benefits as this process goes through, we in operations now have very good line of sight when we're talking what we're doing for capital, how we're re-engineering the network. We are right next to Christina and the group, but more so the information they provide on what's available. So we are ready for it, or we'll be ready for it. You know, the other big growth driver you talked about was the modal conversion opportunity. You've got an advantage with East Coast port connectivity. You're building more port access inlands and working with those national accounts. You know, why is that attractive business for the rail, you know, just given the lower yield dynamic? Talk about, you know, the profitability of that business and the growth opportunity you see. Yeah, so we've got tremendous access to the East Coast ports, which have been growing phenomenally over the last several years, and you know, as Maryclare Kenney, who leads Intermodal, pointed out at our investor day, those inland ports are, you know, they want to add dots to the map, and they want to do it on CSX's territory. So yes, there are short-haul movements coming in from the port to the inland port, but we have the operational capacity to meet those needs, and we can do it in a very cost-efficient manner, so the revenue per unit, it'll be quote-unquote negative mix for us, slightly lower RPU than our average, but the incremental margins on that business are just as good as the rest of the business, I would say, right in that range of 50%-70%. And in some cases, maybe even on the higher end, given the relatively few touches we need to make there. So it's good business. There's great opportunity there. The other piece is really partnering with the channel partners to figure out where are they moving freight that can fit on our intermodal network. Maryclare talked about an opportunity set of four-to-five million loads potentially. That's over time, but the point being, there's freight that's moving today via truck really just because nobody's ever taken the time to look at how can we bid that into a solution that fits intermodal. The service product is there. The intermodal service that we run is truck-like. We see that in the surveys that come back, and we've done a lot to invest in the technology around intermodal facilities and process improvement as well to even further enhance that customer experience. So lots of opportunity for growth at strong incremental margins. Yeah, and I would just add the amount of facilities we have. And we're doing the same exercise there as we are in the operating field. We're looking at what the synergies are, where we can expand, where we have footprint, but at the same time, everything from how many machines we have, how many lifts we do. We've gone through the whole exercise to make sure that we're very robust, ready for growth, but at the same time, we're not going to sit and be ineffective or inefficient as it comes. Now, clearly, significant long-term growth opportunity. As you think about the fourth quarter, how are volume trends tracking relative to expectations, and describe the progress you've made in remediating some of the challenges after the worst hurricane since Katrina? Yeah, I'll talk about volumes. Let Mike talk about the hurricane recovery. But clearly, volumes were impacted by the hurricane. We knew that last month during the quarter call that that was going to be an impact to the network. It has, I would say, the impacts that we expected, about $30 million of revenue, about $20 million of costs. It looks like that's pretty much in line with what we're going to see. Most of that is behind us now. And, you know, it impacted really across the board, but we definitely saw it in aggregates. We saw it in phosphates with the mining that happens down in the Tampa area. Autos were impacted. Our ag and food business was impacted. If you strip out all of that noise, we still see strength in the underlying markets with growth in merchandise. The chemicals business has been good for us all year long. Aggregates has been a really good news story. There's a lot of construction activity. We have a very strong franchise there, so that's been a positive, and intermodal has been growing, international more so than domestic, but we've seen some strength in our domestic UMAX program recently and with some private channel partners as well, so there definitely are some areas where we've got some positive tailwinds. And as we get into next year, we're hopeful that some of the markets that have been a little choppier, like metals and autos, have been growing, but not quite to what we expected this year. We may see some of those start to turn around. Yeah, and in terms of recovery, Garrett, we spoke about that last week. You know, within 36 hours, we were rerouting traffic away from the affected area. And since it's taken place, we've been back in. We have, I don't want to give you time frames, but we're, you know, at some point mid-next year, we hope to have the Blue Ridge back. But we are really focused right now on continuing to refine the product, the movement of those cars that we did change because there's ebbs and flows. We're traveling, we're rerouting cars that effectively are going twice as many miles as they would normally. And it's a little bit of a bubble at times because you get, we move coal, we move ethanol, and we move some merchandise over that line. And we're trying to fit it all into an existing line and watch ourselves in terms of not so out of route that the customer's affected, but it's coming. We're out there working as we speak, so. Yeah, significant disruption, but resilient performance nonetheless. How do you get paid for that service? I appreciated the chart last week in showing those pricing dollars ahead of inflation. But help us understand those pricing conversations as you're having them with customers and your ability to realize the value you're delivering. Yeah, I mean, it's a partnership. And I think those conversations are very constructive two-way dialogues. You know, there's cases where you got to look at it market by market. There's opportunities in some markets to take a little more price, and some markets are a little more competitive depending on the environment and what other competition might be out there. So we look at it as a portfolio, and on average, we're pricing well in excess of inflation. There's areas where we've got customers that say, "Hey, you know, I've got an opportunity to convert some freight. It's this many loads. If I do that, can we take the price increase that you're giving me and reduce that slightly?" Still getting good price, maybe not quite as good, but the overall bottom line profit goes up of that business. There's trade-offs that you make, but overall, still feel very confident in our ability to price in excess of inflation like we've been doing the last decade. And where do you see, you outlined some big buckets for potential optimization and further efficiency gains? We're talking asset utilization, fuel, safety, discretionary non-labor costs. How do you size that opportunity within those various buckets? Take a stab. You're the finalist. I can give you something for each bucket. There's something in each one, but I'll take a bucket. I think overall, I mean, we're not going to put a specific number on it, but I think the way we think about it and the way we plan is what do we have line of sight to and how do we work to try to offset most of the cost inflation, if not all of it, for the following year? There are going to be some areas we're going to have to add resources or add dollars based on growth opportunities, but there's also areas to pick up efficiency, drive costs down. So that's generally how we plan and try to match it. Each year may not be exactly a perfect match, but that's kind of what we're headed towards. Yeah, we have opportunity to grow on our existing trains. That's number one. Number two, I talked about optimizing. That's all about speed. That's increasing or decreasing the amount of dwell on locomotives, for instance. You really look at locomotives because you get fuel and cost there, and generally that's pulling a train. And so that's the next thing you're looking at. Those are the two cost drivers. And really, to Sean's point, the growth that we're trying to get, we're looking to fit it in as best as possible. But I just want to back to culture. We hire so many people every year, and to have our attrition rate be very low versus very high as it is today, there's an incredible amount of savings for each percentage of people that we get to stay after two years. I think that's a big cost driver because the second piece is people that stay longer, get better at what they do, help us become more repeatable, and those are more of the spiral of costs that just fall out, and that's a huge driver for us with 18,000 operating employees. Yeah, I'm glad you brought that up, Mike. Labor productivity has to be a huge opportunity. But how are you training the next generation of railroaders? We talked to Casey and enjoyed that conversation last week as well. But it's a very specialized skill set. How do you transfer your knowledge, decades of experience so we've got the next generation ready to go? I don't even know how to put it. Sean said boots on the ground. Sometimes it's hands on the shoulders. But we are very engaged from the point of we've redeveloped all of our frontline supervisor training programs. We engage with them on a weekly basis at a senior level. Not just me, but I have a group of about 150 senior leaders in operations that through our SafeCSX program, we've now come together on a regular basis. And it's more than just about safety. It's about how are we going to work collectively. And with this, you start to identify talent that's out there. And then from within that talent, we've included them even further. Key operating people are involved in many things that prior to a year ago, they weren't involved in. They were focused on dwell, train starts, or excuse me, train performance, and so on. You need to give people exposure and then give them the opportunity, and you'll create the bench. And that's what we're doing. But it's really hands-on. It's, first of all, fundamental training that they need to get the things that someone like me understands. And then it's actually really deep in the field, including them, making them part of something that we're trying to deliver here, whether it's optimization of yards, more culture where they're getting closer to their employees. It's all the things you do to build a solid bench of people for the future. That's a big part. That's great, and Sean, this obviously nets to your three-year outlook as you look at a CAGR for high single, low double-digit earnings growth. There's some unique factors that may tail into 2025, but 2026 and 2027 look good as you realize some of those growth benefits. Help us understand the puts and takes as you see it over that three-year horizon. Yeah, so I mean, I think every year over the three years, the expectation is that we're going to grow merchandise and intermodal in excess of the economy. That should be a constant. What the economy does is something we can't control, but our pipeline of growth should support something ahead of that. And we'll be able to drop that through at strong incremental margins. Each year will be a little bit different based on all the other factors that are more outside of our control. What happens with coal prices, what happens with fuel prices, all those types of things. Specific to 2025, we flagged a couple of things. Domestic coal, we've got some challenges going into next year. A couple of plants that'll close, low natural gas prices persisting. And then just the network, right? We've got the outages around the Blue Ridge Sub, and there's some reroute costs associated with that and the Howard Street Tunnel, which we were looking at originally having to do that project over a three-year time frame. 12 hours a day shutting that route down, that would have been a significant customer impact. We're going to condense that into a very short period of time, hopefully within the year next year. There'll be some costs associated with that to reroute the trains, so that'll impact. But huge. It'll make 20 points better. Huge savings, huge savings by not having to wait three years. Absolutely. Yeah, I look forward to that long-term benefit. I guess with the remaining time, just be interested in how you'd express your confidence in the ability for the CSX network to realize this growth potential? It's been a challenge for the industry historically. But help us understand the confidence in your potential to chase it down. Yeah, well, I mean, look, the Industrial Development is happening right now. We've got plants that have already opened that are ramping. We have plants where the dirt's moving. The plants are going to open, right? And those will ramp. So I think very clear line of sight to that, which we've talked about as one to two points of net growth, even with some offsetting reductions. And then the customer conversions is happening as well. We go in every week and we review everything that the sales and marketing team has won the previous week. And there's always a list of three, four, five new wins. So you're creating carryover wins for next year that then go into the following year and the following year. So there's tremendous momentum there. And I've got no doubt that the operating team is going to absorb that growth and do it at high incrementals. So I'd say that we're functioning well, we're working well, and the visibility is actually quite high. Can't control the economy, can't control commodity prices, but with what we can control, we've got a lot of confidence. We are extremely focused on the customer partnership. I'm talking from operations. At the field level, engaging with the dock foreman and then all the way up, that's how you grow. That's how you become sticky. We are located in, in my experience, the best possible location to do it, two-thirds of the U.S. population. That's great perspective with that. We'll pause there. Thank you so much, Mike. Thanks, Sean. Thanks to the CSX team for being here and hope all of you have a great day too at the conference. Thank you. Thank you.