Hello, everyone. Hopefully, everyone can hear and see me Okay. I'm Richard Harnain, and I welcome you to Deutsche Bank's Annual Transportation Conference. This is DB's fourth such dedicated transportation event and the second one in this shiny new, relatively new, New York headquarters here we have in Columbus Circle. Not breaking any new ground here from that perspective. That said, this one is especially meaningful for me, considering it's my first time hosting as Lead Transportation Analyst. I hope we can make it just as memorable for you all as I'm sure it's going to be for me and my team. A niche conference here for sure. We have 10 corporates attending, but 10 that we'd say are critical to the US transportation landscape. Very excited to have 140 people in the building to discuss the latest in trends on the transportation scene. A special thanks to all of you who came out. We really appreciate the support and we know how valuable your time is, so thank you. What an interesting time to have this in coverage of transportation, right? All this tariff drama that could potentially jeopardize trade and goods demand has made it especially challenging to recommend names in a space that thrives on trade and goods demand. Given all the market risk out there, we've been really selective in our recommendations. In this context, we see rails as a uniquely attractive subsector among the ones we cover, offering a blend of defensive and offensive characteristics. We're now Buy-rated in all three Class I U.S. rails we cover. We're very pleased to be kicking off the Fireside Chat series today with the one we most recently upgraded on a much improved quarter, CSX with Kevin Boone, Chief Commercial Officer. A warm welcome to you, Kevin. Thank you. Thank you for joining. Thank you for allowing me that probably too long of a preamble. A big thank you to the Head of IRM Strategy, Matt Korn, who's also here, and General Counsel Casey Luchen for attending as well. There is lots to dig into, so maybe we can get started. Absolutely. All right. Great to be here. Thank you for having us. We've got a lot to talk about. Definitely. I promise we'll get to the topic everyone really wants to talk about. Maybe we can start with what you're making of the demand environment. You know, Kevin, you talked about how unusual Q2 was in terms of production outages with customers. Those were expected to improve in Q3 and Q4. Are they starting to improve? It looks like volumes have been running up quite nicely. They're up 1% off of a flat base. Like in Q2, flat year- over- year. Now we're up 1% year- over- year. Maybe you can color that in for us on what's driving that. How optimistic are you that such acceleration can continue based on customer activity and feedback? Yeah, you touched on it. There's a lot of things, obviously, from a tariff perspective and other things that are impacting our customers. We saw some of that in the second quarter. I think it's fair to say in some of the markets that we anticipated maybe seeing a little bit of improvement, we are seeing it a little start to happen. I think further into the quarter, you'll hopefully continue to see that. On the chemical side, we mentioned one particular customer that had had some outages. That's slowly coming back a bit, but it's been a little bit slow there. On the auto side, we have seen some quality holds, other things that have been a little bit slower, I would say, quarter to date. We are seeing some signs of life there and are encouraged by what we see in the near term in terms of production. Some of those production headwinds may be a little bit behind us. It's been a little bit choppy here and there. I think customers are more or less looking for direction in the market and uncertainty around where the tariffs are going to play out. I think you'll see investments being made. Aggregates still with the industrial development side still remains very, very robust in the Southeast. We're seeing those volumes very, very strong. The metals team has done a particularly great job of winning business. We've seen some great momentum on that side. I will point out that you will see some strong performance out of our intermodal team. We've been working on a number of things, some new service lanes and other things that will start to pick up here in next month and into the fourth quarter, which we're really excited about. Great. Maybe if you tie that into other drivers of near-term profitability. On the cost side, there's some headwinds Q2 to Q3, like the unique labor deal that you talked about. There's some Q2 good guys that maybe don't repeat. I think they were in the purchase services area. On yields, on your last call, you updated us that it was going to be very dependent on coal prices. Coal prices are running up nicely quarter to date. Gas prices are down. Lots of puts and takes there. I think consensus is modeled in something like 100 basis points of sequential OR deterioration Q2 to Q3. Is that a reasonable expectation? Do you think you could do better than that? Again, good volumes, service, export coal pricing off that, but maybe some cost headwinds in that gas trend? Yeah, I think first on the export coal side, or just pricing in general, we said it would be slightly down quarter- over- quarter. We'll see where things trend through the quarter. You did mention we've seen a little bit of stability in the met coal prices, which is you got to start somewhere. So we're starting there. We still see very, very strong demand into the Southeastern utilities. That continues to be a really good story for us that hopefully will continue through the remainder of the year and into next year. That's helpful. On the cost side, and I'll have Matthew correct me if I missed anything here, we talked about a labor agreement to step up and the labor agreement that happens on July 1. That's roughly $20 million, I think we said. Matthew, we also highlighted some P&O purchase services headwind or benefits that we received in the second quarter that won't repeat in the third. Finally, we did have a restructuring, management restructuring. That'll be a one-time item in the quarter that would, I think, be quantified around $15 million- $20 million in the third quarter. Obviously, that has benefits on an ongoing basis beyond the third quarter that we'll benefit from. Those are the things, distinct items, I think, that we pointed out. Okay. So are those the only items you would maybe take together and then bridge off of Q2, and then maybe some volume help can help offset them? Yeah, I think we're blessed with a great railroad that has a lot of operating leverage as we put good volume on it. Not all volume is made the same. We're really looking at profitable growth as the focus of our team. As you see that volume come through, I think the incremental margins should be very powerful. Okay. Any early thoughts on Q4? I think the street has been flat, sequential margins. Your margins have fallen 200 basis points on average the past 10 years. Of course, this is not a normal year, though, for CSX and coming off of some. The good news is we're going to be finally lapping the export coal prices by the fourth quarter. That headwind on a year-over-year basis will be not what it has been this year. That is the good news. As we turn the corner to 2026, I think we'll see where interest rates and other things trend. We obviously have the industrial development story, which I'm sure we'll dig into more, that will continue to ramp up and benefit us. I talked about some of the intermodal momentum that we have that will really start to show up in the fourth quarter, which we're excited about. Okay. That Howard Street intermodal, you can't sell until 2026, right? We can start actually taking all the outer route miles by the fourth quarter. Some of those costs related to the rerouting, we talked about millions of miles that outer route. We'll be able to run trains through the Howard Street Tunnel in the fourth quarter. We just won't be able to double stack it until the second quarter of next year. Got it. Okay. Yeah, with both projects finishing in the fourth quarter, you're going to see about that roughly $2 million a month start to fall off in that fourth quarter. Perfect. All right. A point that really resonated with us from the last few earnings calls, and it was one that you made, was around your NPS scores, remaining near record highs despite all of this disruption that's happening that you face to start the year. As Chief Commercial Officer, I guess there's probably no one better suited to address this topic than you. With such high customer satisfaction, do you think you're in a better position to win more customers' wallet share as your network becomes more efficient? Have you quantified that? Yeah, I think 100%. I do want to point out that Shannon, who runs our Customer Service group, has done an amazing job of staying up in front of customers. Things will happen day to day. Storms happen. There are other things you have to adjust to. It's about communicating with the customers. It's really about mitigating the big cases where you're really missing the service on a consecutive level. There has been a lot of focus with our operating team and Shannon's group around consecutive missed switches. If you're going to have an issue, make sure you're delivering the service next day. Those are what customers really remember, that really prolonged service outage that they experience. That's what really impacts their decisions on a long-term basis of whether they want to give more volume to the railroad. We're running really, really well. Mike and I and the team have never been more aligned in terms of how we deliver that service to the customer. It's also aligned around how do we take cost out. That's still a real focus of the team, how do we create a really efficient service at the same time and deliver what our customers want so we can grow our volumes. At the same time, we're constantly looking at the network, how we could speed up the network, and how we can make it more consistent. I think with an improving trucking market, at some point, this trucking cycle, which has been, we're almost three years down a down trucking cycle, will start to improve. I think we'll really capitalize on that. I will say, despite a trucking market that's not really helpful right now, every week we go through opportunities and new wins. We are seeing truck conversions come in every week. I think that only accelerates as we get into next year and really capitalize on the service that we're delivering today. What about versus other railroads? Your competitive position relative to maybe NS or? I think we have the best service out there in the East. I think that's something that we hear from our customers, and it's consistency. We had a little bit of a hiccup into that first quarter, but our ability to react to it, adjust, make sure we didn't shut down plants, that we were proactive in our communication, I think really went a long way. I think this time around was very different than maybe going back to 2017 or 2018 where you saw some of that customer disruption. That's why you saw the scores continue to outperform in terms of the feedback that we're getting from our customers. Okay, great. Finally, you probably figured it would be impossible to have a conversation with a sell-side analyst without at least an attempt to talk rail M&A. I know Casey's here to help keep the guardrails on. Maybe I'll open the floor up to you first to speak very generally about what you can and can't say on the topic. Yeah, you know, certainly following the news by Union Pacific and Norfolk Southern, I know it's a hot topic, right, that people want to discuss. What are the implications of a Transcon and those things? I will say I'm very limited in what I can share today. I would like to reiterate what Joe said on the second quarter call, which was very clear in terms of we're open, we're engaging in ways to create shareholder value. We reiterated that. We're focused on driving profitable growth to the CSX franchise. Finally, how can we improve service? Those are three really tenets of what we're trying to deliver. It's all going to drive shareholder value. I can tell you the board is highly engaged and is well advised. Beyond that, I'm sure there will be a time to share more. At this moment, that's probably all I'm going to talk to. Okay. Maybe we can talk in broad strokes then, just on your competitive stance. You talked about you're getting rail conversion opportunities every week. How do you assess your competitive stance versus over-the-road trucking today, especially on Transcon? Do you think there is significant opportunity for enhancement, either by way of more rail collaboration or otherwise? Yeah, I won't comment specifically on the Transcon. We're always collaborating as a team, looking at our network and how we can deliver a faster service, more reliable service with Mike. Those opportunities are still pretty vast when we look at it. We've gotten through this first quarter period where obviously we had some service disruption. Now the team's really leaning in. You've seen, you're going to continue to see us tweak different areas where we're driving out cost and increasing speed on our network, which ultimately translates into greater volume. One specific area is intermodal. We're seeing algorithms right now. If we can deliver at a certain time and a certain cost, the algorithms continue to give us more and more volume. We're really trying to understand that with some of our customers that use those things. Some of the opportunity that we're seeing in the near term to really drive that. That's the fun part of where we are right now. We're really leaning in and, I would say, playing offense around that and really understanding what are the lanes that really offer valuable, profitable growth and targeting those in a different way. Okay, great. When you do, I guess, lose to trucking, what are some of the issues that customers cite? Is it mainly speed that's the primary factor? Are there other inefficiencies that you think you can work on to really woo more customers? Yeah, I think first and foremost is reliability. That's what customers want to understand. You're not going to disrupt my customers that I'm serving. You're not going to disrupt my plants that I'm trying to run. That's first and foremost. I think we've done a good job of continuing to build that trust with our customers over the last few years. Customers can have a long memory. They remember in 2012, that time where something happened and that plant shut down. Time is on our side. As we continue to consistently deliver month- over- month, quarter- over- quarter, and year- over- year, those opportunities are more and more. We've got to lean into it as well and explain what we do and why we're different and how we're prepared when their business comes back or when they see a lot of demand come that we can serve it. That's been the challenge for the industry, is when you've seen an upcycle, typically the railroads have struggled with that a bit. I think we're creating a lot of resilience in their network. That's why we're making these investments in the Howard Street Tunnel. That's why we're reinvesting in the Blue Ridge. It creates a lot of resiliency in our network. That, quite frankly, makes our network more unique than most because we have alternative routes where other railroads are more reliant on single routes. We can adjust. If there's storms or other things, we have a lot of flexibility within there. That's exciting as we look out. We know some of these markets, like housing and auto markets, will eventually be tailwinds. I think during my whole time in this role, they haven't been wind at my back necessarily. At some point, that will change. We talk a lot about how our network is going to be ready to handle all of that growth when we see it. Okay. Just thinking about your competitive position, I know you talked about some of the unique positive characteristics of the network. Just your ability to compete, do you think it will be negatively impacted if there was this other merger? Do you think, I guess, when customers look at your network, do they evaluate it differently on Transcon versus your East Coast, North, South service? Do you think they look at it as one complete package, i.e., that your competitive positioning might be undermined if one of your competitors has a better Transcon product? I'm going to go back to the original statement. I am going to reconfigure your question here. We have a lot of things on our network that we're working on, whether it's the industrial development side, which we talked about, is going to provide a lot of growth opportunities. We're at the beginning stages of that accelerating. There are a lot of things that we think we can do on our network today and in some of our yards that are going to create a lot of outer route miles or eliminate a lot of outer route miles for our network. That translates to a better service for our customers and allows us to go out and win share, convert modal share from mainly trucks. We're excited about those opportunities. I think that's the framework I think we're going to keep it in today in terms of that discussion. No, I appreciate you attempting the question. I know Matt was shaking his head and got nervous, but I think he's trying. Yeah. All right. Pivoting back to your CSX standalone again, if M&A doesn't happen or doesn't happen soon for you or your competitors, it sounds like you feel very confident in some of the operating momentum and ability to drive volume at CSX. Maybe you could just double tap on that. With merchandise from attractive industrial development project pipeline, you've spoken about being a good source of growth, the enhanced intermodal franchise once Howard Street done, coal demand potentially sustainable, especially with recent administration support. Just talk about the leverage you have to win over the medium term, long term, ex-M&A. Yeah, when I take a step back at the whole industry, I wouldn't trade our footprint for anybody else's footprint. When you look at where goods want to go, two-thirds of the U.S. population today are on our network. The most valuable consumers in the world are on our network. We have a lot of visibility to it, and we track this on a daily basis. The industrial development activity and industrial activity that we're seeing is concentrated on our network and our geographic footprint, whether it's the Southeast or the Midwest. That's going to create a lot of value over time, and we're really leveraging into that. We don't talk about the ports probably enough. The East Coast ports, given the dynamics around tariffs and other things, are probably advantaged or will be advantaged. We believe they will be versus the West Coast ports. As you see trade volumes shift from China to other parts of the world, we'll really benefit from that. You can see the investments that are happening, whether it's in Savannah or other ports along the East Coast. They see a bright future, and that's a big benefit from our network perspective of how can we push more of that west into the network and benefit from that. There are a lot of things going on. You touched on the coal side, on the domestic side, what was a headwind for our business. We're seeing a lot of opportunities, data centers. A huge draw on power demand over the next few years makes these assets more valuable. I touched on it, I think, on the last earnings call. Utilization rates on these utility plants are very low, and if you can go from 40%- 60% utilization on, it's a significant opportunity for us. Those are the things that we're working with our customers to really drive. Utilities, maybe two years ago, was a headwind. We're seeing a very different market. The pressure to idle those plants or even the ratchet down utilization is not there. We're feeling that, given some of the demand that we're seeing here that we think is going to continue for the years ahead. Maybe we can talk about coal first. You talked about year- over- year that headwind kind of goes away in the fourth quarter. Do you think that opportunity for utilization advancement could be something that we see in the next month and year term, the next few quarters? We're highly focused on it. I think there is an opportunity. I just think we're arching, obviously, regulatory dynamics, I think, are helpful and don't put that implied pressure on these utilities to maybe ratchet down their utilization. That's helpful. Obviously, a very hot summer, and we're living through it in Florida, is not unhelpful. That's been a positive for us. The weather is a factor. I hope for a cold winter as well. That's helpful for our network as well. All right. Maybe we can talk about the industrial development pipeline that you referenced. You said it's unique to your franchise. A lot of these projects are on your network. You talked about hundreds of projects being a reason for the optimism for CSX despite the economic uncertainty out there. More specifically, I think Sean added there are 50 projects that are already in place this year, and then another 30 coming online in the back half of the year. Can you provide just some color around the margin profile and market exposures attached to that pipeline, maybe more near term? Maybe if I could just take a step back and why this is an interesting dynamic, why over the long term, I think, is a very different trend. First of all, over the last several decades, we've had a lot of industry leave our network and, quite frankly, everybody's network in the U.S. from a rail perspective. We believe that dynamic is shifting where we'll net up activity. When you think about the goods that come into the U.S. today, if they're coming into the Eastern port, about 15%- 20% of those goods actually hit the railroad today. Most of them are being trucked to the dense population centers that are along the coast. If these goods are now being manufactured, we'll say, in the Midwest or the Southeast, not only do we potentially move the input products that go into manufacturing those goods, we also get to have the outbound into the East Coast population centers from the Midwest and Southeast. You go from maybe zero move for a product to two moves. That's pretty powerful when you think about those dynamics there. When we take a step back on the overall portfolio, it's really around a lot of different. It basically touches every market we touch today. It's a diverse portfolio. It's not concentrated in one area. We put up charts in the past that show it's not about just automotive. It's not about just steel. It's really across every one of the markets that we serve. We're excited about it. When you think about the margin profile, it's similar to our current business today. Merchandise is a very good, profitable business for us. We should have similar dynamics. The incremental part of that is most of this volume will move on trains that exist today. It'll go in our manifest business on trains that are moving through our network today, which is very powerful from an incremental margin perspective. What should we think about in terms of the modeling? What's a good incremental margin profile to put in for the out years, I guess, on that? Yeah, I think it's similar to the rest of our merchandise business. We look at pricing levels. We're providing a great service, and we get value for that service. Typically, the transportation costs aren't the driver of whether that project is going to come to life or not. It's the ability to identify a great site that has great access to our network. Those are the really important factors. Power is a big factor in terms of decision-making on those sites. I do have to give the team a lot of credit. We have a lot of sites available to customers that are shovel-ready, which has put us in the market and allowed us to capitalize on it very quickly. Okay. He talked about auto and the housing market remaining constrained. Investors remain particularly concerned, I think, especially about the housing market getting worse in the near to medium term. Can you hit on your long-term earnings growth target? Can you hit that long-term earnings growth target of high single digits, low double digits for 2024- 2027 with those markets remaining under pressure? Do you embed some sort of recovery in your long-term outlook? Yeah, look, we have a diverse portfolio. That's what's great about what we do. When one market is not doing well, we've got to lean into other markets that have opportunities. That's what the team's working hard on. I talked about some of the things we're doing on the intermodal side and maybe a backdrop where we're seeing industrial production not positive. You've got to look for ways to grow. We've got a very engaged team that engages with our operating team to create more opportunities for us. We reiterated our guidance on the last earnings call. We see a path to delivering that. Obviously, having a little wind at our back is always, I would prefer that than not. We've got to find ways as a team to really find our own opportunities. We can't just rely on the economy to help us. We've got to gain share, modal share. Some of these things will eventually come. We can't predict if they're going to happen next year or in 2027 or 2028. In the absence of not knowing what's going to happen, we've got to drive our own opportunities. All right. Maybe shifting gears a bit, talk about the strategic value of your trucking business. Do you think it makes sense? Yeah. Synergies with your core business? Quality, chemicals is our largest segment of our business today, as everybody is aware. Quality gives us a unique opportunity to go to market and understand that market at a really intimate level in terms of how volumes are moving throughout the U.S. and then identifying opportunities, whether it's transloading, whether it's an ISO tank product, to really target a business that hasn't traditionally moved on the railroad. We are seeing a lot of momentum around that this year in a very challenged trucking market. We're seeing pretty extraordinary, pretty great growth, maybe not in triple digits, but close to that on a year-over-year basis, which is exciting. We're starting off on pretty low numbers. Randy and the team have really found some momentum with some of the largest customers. The great thing about the chemical industry, it's very sticky once you win it. That's the challenge, too, as you introduce a new product into the market. We've seen two very, very large customers start to adopt this product at a high level. You'll see others follow their lead, which we're encouraged by. The other thing that it really identifies or helps us is in our general discussions with our chemical customers, there are many discussions we've been able to bundle the product together and really offered us an opportunity, not only on the rail side, but also on the truck side, to have a different discussion with our customers. Randy, who leads our Quality Carriers, and I are going to go to Houston next week. We're going to see eight customers. The unique thing about that experience is we're not only bringing in the rail folks that work with us, but also the trucking side of their business is coming into the room. Getting those two groups together at the companies that we serve is usually a pretty tough task to do. Having that knowledge on both sides and being creative and coming up with solutions is really the opportunity that we're seeing. We probably need to do a better job. That's why we'll be in Houston to continue to capitalize on that. There is a lot of momentum around that and a lot of opportunities that it drives on the rail side, not just only on the truck side as well. I should mention, if anyone in the audience has questions, feel free to raise your hand and jump in. I just asked one on the chemicals. Is it all coming off the highway? Is there some coming off barge? Are there more? It's typically mostly off the highway. The barge is more difficult to compete with. We'll see opportunities. Obviously, there can be disruption on the Mississippi and other areas where we'll see opportunities here and there. Typically, barge is on water. Obviously, the economics, you can move a lot of volume on water pretty cheaply. Yeah, on the coal, you made the comments about customers maybe thinking about their business differently with the data centers backdrop. I think the regulatory side, right, the regulatory pressure from an environmental perspective might not quite be as robust as it was. I think at the margin, we're seeing that a bit in just the coal burn. They need a commitment to take the stockpiles. If they needed to take the stockpiles higher because they're not running at 40% anymore, how much would that mean to you at this point? If you think if we're in that 40% range and you could take it to 50%, 55%, 60%, that's fairly significant growth over time if we get to that point. Those conversations are happening. Those are opportunities, and it's something the team is working on all the time. We've got to, in that case, which is a good problem, we're going to have to look at and make sure the mine capacity is there. We've had a lot of mines, obviously, over the years shut down. I think there is mining capacity, but there'll have to be some investments there as well. What do you think on the timing for any of these coal plants announcing this type of thing? I I mean, you've seen small. I don't think they'll announce it. I don't think it's going to be an announcement. Carloads? No, I don't think you'll just see it show up in the carloads as an opportunity for us. Okay. Any opportunity to add customers in your portfolio that do coal, or are you pretty full on? You can't move a coal plant around or a utility plant around. I would say it's really protecting our base, making sure they're competitive in the market, which they are today. Obviously, with $3-ish gas prices, that makes coal burn economical, which we like. We can all debate on, obviously, what they export, continue to export this product, whether that will tighten the market further. I think there's some optimism there that natural gas prices could trend higher. I'm not going to make a prediction today. There's some thought out there, and that only helps our economics. Maybe you can talk about your relationship with your intermodal channel partners. Are you pleased with the relationship as you lean into more growth on your intermodal side? Are you happy with that arrangement? Do you think that there's more opportunity for you to do things on your own? I think UNP does a little bit on the margin on that front. Yeah, I mean, we work with all our customers. Obviously, I think you're alluding to the industry and some of the things that are going on there. We're here to deliver really good service. We have the best intermodal service in the East. We're taking time out of the transit times, which translate to additional opportunities for us. Mike and team are very focused on running these trains on time. We have the best on-time performance that we've had in my time here, and that allows you to capitalize on any opportunity. We're here to continue to grow that business. We'll make the investments in profitable growth. This Howard Street Tunnel, from a network perspective, is going to be a big deal. We outlined the opportunity at our investor conference. Having that access, basically, the last major quarter on our railroad opened to double-stack capability. Think about Southeast and the Northeast; it is a huge opportunity that we're going to capitalize on that all our customers, all our partners in that area can benefit from. Okay. Final Final question. Maybe talk about that Howard Street opportunity a bit more. What does double-stack intermodal service really mean for you? What type of opportunities is it going to open up that you don't have today? Yeah, today we have the I-95 corridor, which largely is underutilized, in our opinion. A big part of that reason is the intermodal volume is not economical when you can't double stack. It was one of the things that surprised me when I came into CSX in 2017 and was eventually in the CFO role, is the economics really change when you can double stack that container. Having that opportunity to reach markets that we haven't before and compete with perhaps the shortest haul from Atlanta and Atlanta up into the Northeast is pretty powerful from that side. We're going to allow our customers that are aligned with us to compete for that volume. I think it'll also translate into additional opportunities to grow that market, which we're really focused on, take more trucks off the highway. We're unique. We have a unique franchise in Florida. How do we look at that and continue to drive more volume that exists today on the truck that can move rail going forward? Just wondering if you can share your observation about your partnership with CPKC, which extends your reach much beyond the East Coast into Mexico and so on. How's that doing? What's the kind of any kind of challenging point in terms of this logistically and smoothness of fluidity of the network? I think when we made the announcement, we had a lot of capital that we had to put in that line. You're going to continue to see that service continue to improve, which allows us to go after a different market there. We have monthly, if not biweekly, touch points with the CPKC on identifying additional volume, mainly concentrated in Mexico that we can go after. There are a lot of opportunities with that line and that access. It's pretty unique for us. It creates a more efficient path into our network into the Southeast. We're really excited about it. I know the CPKC would say similar things. It's not just in the intermodal market. We're seeing auto and other areas with opportunity to grow that business. The vast, vast majority of this is just truck conversion today. That's why we're excited about it. We're highly focused on growing the pie, and this is really an avenue to do that. CSX is the railroad that's probably the furthest away from its margin highs, for arguably temporary factors and reasons. If you think about your ability to get back to an OR with a five handle on it, how do you feel? Could it even be better than what you had before, considering all of these positive things that you spoke about with respect to driving greater efficiencies, improving your network, all these industrial projects, et c? No, what I do know is the business we're targeting today has a very powerful incremental margin profile. We have a network with a lot of fixed costs, and as we identify more volume, the right volume to put on our network that we're very excited about, I mentioned all the opportunities. I think we think that drops through at a very meaningful incremental margin. Sean's talked a little bit about that. At the same time, I can tell you Mike is out there every day looking for ways to take costs out of the network. Those two things in combination are very powerful and allow us to deliver, I think, on our expectations to continue to improve our margin profile over time. Great. What worries you the most, I guess? Yeah, there's always noise out there with, obviously, the political dynamics and those things. I think what the market's looking for is certainty, right? When I'm thinking as a corporate and I want to make an investment, you want to know what the rules of engagement are. I think having that certainty, the sooner we can get to that, where are the tariffs ultimately going to land? Where are these decisions ultimately going to land? The tax profile, all of those things are important. I think these policies, there's a real optimistic case for our business that could be made. We've got to settle in. Customers have to have the confidence to make the investments. They're already making the investments, to be clear. You can see the tax policy around 100% depreciation on the structures is huge. It's huge. It's a game changer. I think you're going to really see that unleashed, hopefully, in the next year. That really benefits our network over time. Political uncertainty is up there in terms of worries. If we can settle down a bit and customers can get more clarity on where things are going, obviously, we talk about interest rates. Some of our most important markets are sensitive to the interest rate environment. There is a case being made that we'll start to see rates come down a bit here. I think that would be really healthy as we move into next year for our business. We'll see. We know there's a deficit both on the auto side and on housing in general. There are deficits, right? We're running below what long-term demand would suggest in both of those areas. Eventually, we think we should get to a point where that would represent underlying growth in the markets. In the absence of that, this team's got to work hard to go and find and capture share in the market. I think we're doing a good job. We can always do better. We're highly, highly focused on that. I guess in light of that, just from last week's updates and just last night's updates, we kind of touched on this, but just customer conversations more near term, do they feel better or worse? I know there's still a cloud of uncertainty out there. Any changes in customer conversation? I don't know. I think it's still the uncertainty prevails right now. I think there's hope, right? I think there's hope that as we turn into next year and maybe we can build a little momentum into the fourth quarter that we can see it. I'm not breaking any news. The industrial economy is pretty anemic right now. We're seeing it across our business. That's why we're so focused on driving opportunities that we can control. We'll continue to do that. When those markets come back, we're going to be here to serve. We'll benefit from those opportunities. The network will be ready to handle it, especially after all these investments that we've made. Any other questions you have? Yeah, go ahead. I know you're limited in terms of the mergers. We know that the STB guideline is to enhance competition. I wanted to share some observation in terms of in your interfacing with other railroads and so on. There are kind of areas that competition can be enhanced, for example, reciprocal switching and access to network. Those kind of things. Are there kind of areas that can improve with maybe some concession? I'm not going to speak specifically to that. We're going to have opportunities, and Joe probably will lead the charge on that to discuss any part around specifically Transcon and those things. I will say this hasn't changed for me since I've been in this position or for us, quite frankly, all the management team. We see a lot of things that we can do from an efficiency standpoint, not only within our network, but interchanges, all those things. That hasn't changed, right? That continues to be an opportunity to drive modal share for the industry as we get better, more consistent. Over half our volume touches another railroad, so the customer experience doesn't end at the CSX network. It extends through their total experience. On the intermodal side, it doesn't end with just the rail service. It ends with how do we integrate with the truck better. Those things are things we need to continue to solve for, and they are opportunities for us. How do we use technology to create more visibility for the customers so they can manage their supply chain and their inventories better, right? We're behind the truck in that area. Those are things that we talk a lot about internally. All of these things remain opportunities to get better, and over time, they represent more opportunity to gain share in the market. I'm very, very optimistic on that. Technology, we have Steve who's leading those efforts for us. There's a lot of things that we can do to really make that customer experience better, where they're more willing to give some of their most valuable freight to the railroad and trust us with that freight because they can have confidence it's going to be delivered to their customers that need it on time. Kevin, could you just give some more tangible examples of what type of initiatives you're targeting and how maybe a more supportive regulatory backdrop is helping you implement some of those changes? I don't think the regulatory backdrop has really anything to do with us pursuing growth. I think they've always been supportive of us going after modal share. There are so many beneficiaries in that, the communities that we obviously serve, taking trucks off the highway, all those things. Transloading is something that we've highlighted that I would point out again. We've had a lot of success in our transloading business this year. It's far outgrowing our core business today, and you're going to continue to see us make those investments. It's a way to reach those merchandise customers that aren't traditionally on the railroad today. It's spreading our footprint out beyond just the physical infrastructure of the railroad, where if we don't touch them with our rail infrastructure, this is a way where we can combine a truck and transloading to reach them. It's something that's created a lot of valuable growth for us in a market that's pretty challenged this year. You'll continue to see us make those investments in that area. We're really looking at ways where we can grow the pie, because that's the best way we can create value over time, is growing the pie. We're going to compete every day with the railroad, and we have the best service out there to compete. We have the best relationships, and I expect us to win. If we really want to change the growth algorithm for what we've been able to achieve historically, it's really capitalizing on industrial development and finding new ways to win share with our existing customers. I think we're along that path, and what I think you'll see is as the truck market tightens a bit, you'll really see that start to accelerate even more than what we were seeing today. Last but not least, maybe you can just touch on capital allocation real quick. Priorities. How do you feel about where your stock is trading, buybacks? I'll say the first priority is always a reinvestment in the network. We have this valuable asset. We have to continue to maintain the best service in the East. That's the first use of capital. I will tell you, Mike is always looking for efficiencies on the maintenance capital side of things. There's probably opportunities to do better. I know Sean looks at that all the time. Being more efficient with our capital spend to maintain our railroad is something that we're highly focused on. Growth opportunities, right, and profitable growth. That's going to be the first use of our capital. Beyond that, we're fortunate to generate a lot of free cash flow. We've had a history of returning that to shareholders over time. I think I don't see anything changing with that philosophy going forward. Anything else, anyone? Okay, we'll wrap it there. Thanks again, Kevin. Appreciate you having us. Thank you.