Good morning, everyone, and welcome to the Kansas City Southern Q3 2021 earnings conference call. It is now my pleasure to introduce you to Ashley Thorne, VP, Investor Relations for Kansas City Southern. Thank you, Jamie. Good morning, thank you for joining Kansas City Southern's Q3 2021 earnings call. Before we begin, I want to remind you that this presentation contains forward-looking statements within the meaning of the Securities Exchange Act as amended. Actual results can materially differ from those anticipated by such forward-looking statements as a result of a number of factors or combination of factors, including but not limited to, the risk identified in our annual report on Form 10-K for the year ended December 31st, 2020, and in other reports filed by us with the SEC. Forward-looking statements reflect the information only as of the date on which they are made. KCS does not undertake any obligation to update any forward-looking statements to reflect future events, developments, or other information. With that, it is now my pleasure to introduce Kansas City Southern's President and CEO, Pat Ottensmeyer. Thank you, Ashley. Good morning, everyone. Thank you for joining us for our Q3 earnings call. I'll just start with slide four. I think it's most everyone here is well known. We did ask Adam Godderz to join us today, our general counsel, in the event we get into some detailed questions about the merger timeline, and you will probably all notice the absence of Sameh Fahmy from the agenda today. I think many of you probably saw the press release that we sent out last week announcing that Sameh would be leaving the company between now and the end of the year. We had originally thought that this earnings call was going to be last week. Sameh had planned some very well-deserved vacation that he continued to follow through on. I don't think Sammy has taken more than two consecutive days of vacation for the last almost three years. Sammy's not with us today. Just to reiterate what I said in the press release and what we've said on other occasions, really cannot say enough about what Sammy brought to the company over the last almost three years. His enthusiasm, his focus, his passion, those of you who know Sammy know that passion really is probably the one word that describes him better than any others, has been of tremendous value to us over the last almost three years. He has built a lot of very strong muscle tone across our organization with people that were here before and are here now to carry on our focus on PSR disciplines. Very importantly, he helped recruit and strengthen our team, most noticeably with the presence of John Orr, who you'll hear from later in this presentation. We again will have the opportunity to celebrate Sammy and his contribution to KCS in November, next month, at the RailTrends Conference that I know a lot of you attend. We are going to be having a reception for Sammy on Thursday, November 18th in New York in connection with the RailTrends Conference. I know Sammy is very much looking forward to seeing everyone there and having an opportunity to chat with some of his closest friends in the investment community. If you haven't already become aware of that, mark your calendar for November 18th in New York City. With that, I will turn to slide five. I think the most important thing we will probably cover here in questions in this call is the path forward on the Canadian Pacific-Kansas City Southern merger. We continue to make very good progress toward closing our transaction with Canadian Pacific, as you know, to create the first single line rail network linking U.S., Mexico, and Canada, truly a North American rail franchise. We and Canadian Pacific have filed with the SEC a registration statement and proxy statement for use in connection with the shareholder votes on this transaction. Following completion of the SEC review process, we will announce the meeting date for our special shareholders meeting and mail proxy materials to our shareholders. We currently expect the special shareholder meeting for both KCS and CP to occur by the end of the year. As you know, KCS shareholders will receive their full consideration upon closing into the voting trust, which we expect in the Q1 of 2022. Closing into the voting trust is subject to KCS and CP shareholder approvals and satisfaction of other closing conditions, including Mexican regulatory approvals, most noticeably the COFECE antitrust agency. As a reminder, while KCS is in voting trust, our existing management team and board will continue to run and lead the business, and former KCS CEO, Dave Starling, will act as the independent trustee. While in trust, we will retain both full independence and the ability to manage capital investments according to our planned capital program. We anticipate receiving full STB merger and control approval and other applicable regulatory approvals in the second half of 2022, after which the voting trust will be terminated and CP would then have full voting rights and control of KCS. In advance of this milestone, we are working very closely with CP on the integration planning process and merger approval process. Following STB control, we intend to implement these integration plans and begin to unlock the full potential of our networks, our markets, and our people. Be happy to answer any questions in the Q&A section of the call later on. Moving on to slide six, I'll just briefly cover our results for the quarter. Revenues were up 13% from last year, or six percent after adjusting for FX and fuel. Volumes were down three percent from last year. We continue to operate in a challenging commercial environment with auto plant shutdowns caused by the global microchip shortage that everyone is very well aware of, teacher strikes and disruption of service in the stretch of our railroad between Lazaro Cardenas and Mexico City. Finally, increased regulation of refined fuel product shipments into Mexico that has resulted in supply chain disruptions in that area of our business. Masking some bright areas in improvement operations and customer service, which we will hit on shortly. We are very pleased with the improvement that we have seen in our service metrics, and certainly customer feedback, which, again, Mike and John will talk about later on. Q2 reported operating ratio of 66.1 and diluted earnings per share of $1.71, both of which include the impact of merger-related costs. Our adjusted operating ratio of 61.2 and adjusted EPS of $2.02 is a better view of our underlying results for the quarter. These results have fallen short of our expectations and previous guidance due primarily to the commercial challenges that I mentioned a moment ago. We deployed incremental resources in the Q2 to improve our service, restore network operating performance, and be prepared for the return of some of the revenue shortfalls that we experienced earlier this year. In addition to addressing service, we did expect demand to improve more quickly than it did, which has created pressure on our productivity, particularly early in the Q3. John will talk a little bit about the performance over the course of the quarter in a couple of minutes. We're the first to admit that visibility on the commercial side is limited given these challenges, and therefore we are suspending guidance at this time until we get a better feel for the duration of the chip shortage, teacher strikes, and refined product supply chain disruptions. Moving on to slide seven. We're pleased with the improvements we've made from a network perspective. The 15.3 miles per hour gross velocity was the best ever for a Q3, and dwell returned to more historical standards. Particularly encouraged by the sequential improvement throughout the quarter and into October. We exited the Q3 with gross velocity at 16.4 miles per hour and dwell of 19 hours. Our U.S. operations led improvements in the early part of the Q3 and have sustained and built upon that over the course of the quarter and into October. Mexico demonstrated accelerated improvement in the second half of the Q3 as well. I'm going to invite John Orr at this point to make a few comments while this slide is still up on the screen, and you're all hopefully looking at it. Just to touch on a few more details and some of the initiatives and momentum that we continue to see in our key operating metrics, and then cover network performance on the following slide as well. John, if you'd like to make some comments here. Yeah. Thank you, Pat. As you said, there's a lot of encouragement from a network perspective with gross velocity and dwell in the range of best Q3 and as you said, the sequential improvement in gross velocity and dwell moving into the third quarter and the first three weeks of October is very promising. As you said, the U.S. led in the early part of Q3, the transformation and gross velocity and dwell were 30% and 10% better respectively than Q2 levels. In Mexico, again as you said, the second half of Q3 was where we really start to see the traction for gross velocity and dwell, and we finished the quarter 18% and 23% better respectively than the Q2 levels. The strong performance is continuing into Q3, and as our velocity and dwell are in the 16 and 19 hour range. What's really encouraging is the run rate improvements are continuing well into October. I feel particularly good about our resource levels. We have a more fluid network, and we're seeing improvement in utilization of both our locomotives and our crews. While our average locomotive fleet is up year-over-year, it really doesn't quite tell the full story. We began the quarter with an active fleet of 1,047 locomotives, and through improvements and initiatives and a lot of, I'll call it sweat equity, we were able to park or return over 170 units. We exited the quarter with an active fleet of 868 units, and the average count in Q3 was seven percent lower than what we saw in Q2. We're continuing to push out more of our fleet. As of this morning, our range was in the 840 locomotives. Our T&E headcount is up year-over-year, and we brought back our crews from furlough, and we've added in key and select locations to meet the current demand, and as you said, for volume growth. Our crew utilization and GTMs per crew start are improving, and recrews were down to the lowest levels of the year in September. In the U.S., for example, recrews were down 60% versus May of 2021. I believe we're well positioned from a resource and capacity perspective to have a very, very successful peak season. The locomotive discipline will afford growth at low maintenance costs and through better yield and reliability. Our crew utilization initiatives are changing behaviors, resulting in metrics that are very healthy, with GTMs for crew starts well above historic levels. Fluid capacity and inventory levels are well understood, and the team is reacting in real time to ensure train counts and other controllables are adjusted accordingly. If we could move to slide eight. Here you can see the positive impact that additional resourcing and operating initiatives have on gross velocity and dwell, despite the broad and well-documented challenges of the North American global supply chain. Significant improvement in execution at the field level, driven by Timothy Livingston, and at the NOC level by Mike Walczak, are foundational to the improvements in our operating metrics. On-time origination of the network improved to 87% versus 77% a year ago. Within the overall network, the execution in Mexico really stands out. Rate car, rate train improvements from 282% versus 77%. Last mile, first mile performance has improved 86% and 83% versus 83% and 78% beginning in 2021. One of the barometers of our organizational health is the cross-border shuttle times. Our cycles for the most recent 20 days is approximately 15 days versus 27 days in the early spring. We implemented daily NOC-led cross-functional, cross-border grain calls earlier this year, where we drill into train and terminal operations to accelerate and optimize handoffs across divisions and interchange partners. The team measures themselves against offline and online destination performance, time distance standards, mechanical reliability, and readiness, and they make tactical decisions necessary to optimize the cycles. Given that these are some of the longest runs on KCS, from Southwest Illinois and Kansas City into Central and Southern Mexico, and traverse areas that we've talked about in the past as congestion points like Houston track adjacents, border zones, and the Monterrey area, this is one of the best examples I can give you of the discipline and adaptability that the team has been able to implement over the past several months. Structural improvements include rationalizing some of our Mexican network and removing all of the workload from our yards in Alameda, Venegas, and Nuevo Laredo. These moves were the key catalyst to unlocking velocity improvements in Mexico and driving the dramatic reduction in dwell that I previously mentioned. Executing them has strengthened the skill of the team and requires a sustained level of rigor and responsiveness to execute day in and day out. If I could add customer-facing metrics and performance improvement has followed the broader network trends. Our overall trip line compliance that measures the capability and reliability of our customer service is at the highest levels in over a year and has sequentially improved since July. Coordination and communication between sales and marketing and operations has much improved. As part of the Monterrey engagement effort, we have embedded the customer solutions into the operating control tower team. Real-time issue identification and decision-making are optimizing customer solutions in our very key market. This is delivering world-class first mile, last mile execution in this complex industrial complex. These are really the highlights of KCS's mature end-to-end product level view of PSR. We are focused on our customers with a bias towards growth through maximizing use and reliability of our assets and investing in resources to deliver reliable customer service and deal with increased complexity of the KCS and global supply chain. Most encouraging is the lateral and vertical alignment within operations and across the commercial and financial groups that is creating cohesive and sustainable momentum and very favorable results for our customers and stakeholders. With that, I'll turn things over to Mike Upchurch. Thanks, John, and good morning, everyone. I am going to start my comments on slide 10. I will cover revenue and volumes in a little more detail on the next slide, but overall, quarterly revenues grew 13% on a three percent volume decline. Our reported operating ratio of 66.1 includes $37 million of merger-related costs that we incurred during the quarter. Excluding those merger costs, our adjusted OR was 61.2, a 240 basis point increase year-over-year and flat sequentially. As Pat mentioned, we had several discrete commercial challenges and increased costs from network congestion that I will discuss in more detail in the next few slides. Let me cover a few of the key expense items in the quarter that contributed to the adjusted OR. We incurred roughly $10 million or 130 basis points of incremental expense in the quarter from resources that we deployed to address the service challenges we were experiencing earlier in the year. You may remember that last quarter we referenced approximately 200 basis points of headwind from costs attributable to congestion. The good news is these costs have come down as we've progressed through the Q3, and as John indicated, our network's running about as good as we've seen in a long time. The improved trajectory, along with significantly improved service, gives us a level of confidence that we will be able to leverage our resources deployed going forward and achieve better productivity. We also incurred $6 million or an 80 basis point higher year-over-year derailment and casualty expense. As we discussed on the 2Q call, we incurred $4 million in the quarter, roughly a 50 basis point impact from Mexico outsourcing reform, and I'll cover that in a little bit more detail in the following slides. Our overall reported diluted earnings per share were $1.71. Adjusted for merger costs and foreign exchange, the adjusted diluted earnings per share was $2.02, up 3% from a year ago. Continuing on slide 11, this quarter, we generated 13% revenue growth from a three percent decline in carloads. On a fuel FX constant basis, our revenue growth was 6%. As a reminder, fuel and foreign exchange impacts are generally operating income neutral over the long run, although we did experience a 50 basis point negative impact to OR in the quarter, largely due to higher fuel prices. Our revenue per unit was up 16%. We had some mix issues with intermodal car loads down 13% that ended up positively impacting overall RPU. We also benefited from positive pricing and length-of-haul increases in the U.S. that were primarily within our higher revenue per unit chemical and petroleum and industrial business units, in addition to seeing overall increases in revenue per unit from fuel and FX. Regarding price, we are keeping an eye on the recent uptick in inflation. Our Q3 pricing results were consistent with what we've seen in previous quarters this year. Rising inflation is increasingly concerning. We are carefully monitoring inflation as we work with customers to manage their overall transportation costs. As we review contracts and head into a heavy renewal season in the first half of 2022, and specifically, we have roughly two-thirds of our business that will get repriced in 2022, with almost half of that being in the Q1. We're certainly going to be mindful of the need to ensure pricing adequately covers inflationary costs. Turning to volumes, as Pat mentioned earlier, the Q3 volume decline was primarily due to three key areas, segments, the auto plant shutdowns driven by the global microchip shortage, and obviously overall volume related to finished vehicles was down about 30%. We saw some additional pressure on the intermodal auto parts business that we moved southbound into Mexico and other supply chain impacts, including plastics and metals that are inputs into auto production. Currently, it's unclear when these supply chains will normalize, but we are working closely with our customers to understand timing, and we stand ready to support them as their production normalizes. Service interruptions at Lázaro due to blockages resulting from the teachers' protests have impacted our volumes for more than 75 consecutive days now. In 3Q, we were essentially operating trains only in the month of July, with no traffic in August or September. During the quarter, the blockage of our line resulted in approximately $25 million of lost revenue, a 100 basis point negative impact to operating ratio, and about $0.13 negative impact to EPS. These blockages resulted in about 67% lower volumes for Lázaro Intermodal, as well as negative impacts to our heavy fuel oil moves for Pemex, along with some metals volumes. As we discussed last quarter, our refined fuel product shipments have been negatively impacted by increased government regulation in Mexico, resulting in certain supply chain disruptions. These temporary regulatory impacts resulted in 18% lower energy reform volumes. We continue to expect that these impacts are temporary as we continue to help the government ensure customer compliance with the new regulations. The underlying market dynamics remain unchanged. Mainly, the 2/3 of Mexican gasoline and diesel demand is being supplied by the import market, and KCS is obviously extremely well-positioned to bring that product from the U.S. Gulf Coast into Mexico to help cover the supply shortfall. While there is some evidence that there's been a shift in fuel importation from rail to truck, we continue to believe rail is far more efficient mode of transportation and that we will see volumes rebound. Strengths we're seeing in energy, industrial and consumer, and ag and min. Energy carloads were up 43%, driven by low coal stockpiles, steady demand, which has obviously been helped by high natural gas prices that have been hovering between $5 and $6, along with the startup of the DRUbit Port Arthur terminal. Industrial and consumer carloads were up seven percent. This business unit benefited somewhat from easy comps a year ago, but also healthy industrial demand and new steel production facilities that we've talked about for a while that have come online, and we still have a few new plants that'll open up later this year and into 2022. Finally, our ag and min carloads were up five percent on steady demand and the improved cycle times that John mentioned earlier. As Pat mentioned, we withdrew our guidance due to certain uncertainty related to the microchip issue, the Lázaro blockages, and the refined fuel supply chain disruptions. However, we do believe that these are transitory in nature and our medium to long-term outlook for those business units remains unchanged. Moving to slide 12. Given that the expense we incurred to recover from our service challenges and other drivers in the quarter, such as fuel price, FX, Mexico outsourcing reform, and higher derailment and casualty expenses, we saw an overall 18% increase in operating expense. Fuel increased $20 million from price and $3 million from consumption, primarily driven by fuel price increases in both countries and higher GTMs in the U.S. from increased bulk shipments. We also saw an $11 million increase in expense from foreign exchange. That was more than offset by a $12 million increase in revenue from FX. We experienced a $9 million increase from headcount and hours worked, which I'll talk a little bit more on about the next slide, along with a $4 million increase from wage and benefit inflation, which was partially offset by a $7 million reduction in incentive compensation. Additionally, as we signaled on our second quarter call, we incurred incremental expense in Q3 related to Mexico outsourcing reform. Specifically, we saw comp and benefits increase $5 million. That was partially offset by $1 million in lower purchase services from the insourcing activities for a $4 million net year-over-year increase. Looking forward, we would expect to incur an additional $3 million expense increase due to the outsourcing reform, believe the impact will be immaterial in 2022 as we fully realize the savings of insourcing vendor services. We also incurred a $6 million increase in materials and supplies, primarily from the increased locomotive fleet that John referenced. As we go into the fourth quarter, we should fully expect to see those costs decline given the decrease in the active locomotive fleet. Primarily due to higher derailments, we saw a $6 million increase in casualties. We also saw a $4 million increase in property tax, that's a negative year-over-year comp because of a $3 million credit we recorded in 3Q of 2020. We had a $4 million increase in employee expenses as we incurred higher lodging and taxi costs for our T&E crews resulting from higher crew starts. Finally, a $4 million year-over-year reduction in car hire, driven by supplier incentives and improved cycle times from the improvement in velocity. Finally, on slide 13, let me cover comp and ben and fuel expenses real quickly. Comp and benefits expense increased 14% or $16 million in Q3, $9 million from the headcount and work hours driven by a thre percent increase in headcount, which does exclude the impact of insourcing that we've provided more information on this slide. The increase in headcount and crew starts were almost entirely in the U.S. as we brought on resources to improve service and address a six percent volume growth that we saw in car loads in the U.S., which would have led the industry. As discussed on the prior slide, we did incur incremental expense in the quarter in comp and benefits on Mexico outsourcing. As I indicated earlier, we saw some benefits in purchase services and expect that impact going into 2022 to be immaterial. We also had a $4 million impact from foreign exchange, $4 million from wage and benefits, those increases were offset by a $7 million decline in incentive comp as we lowered our accrual for annual incentives compared to 3Q of 2020. Finally, fuel expense increased 53% in the quarter, driven by a 42% increase in fuel price, foreign exchange, and the increase in consumption. As I've done in prior quarters, maybe just a quick summary of the quarter, obviously a very tough quarter from a demand perspective, largely transitory type issues. We did have some cost creep, but we think we're getting much better there, particularly on the equipment side as we execute here in 4Q. Had some negative fuel price impacts and Mexican labor law impacts. From a sequential perspective, despite a decline of 4% in volumes, we saw a slightly improved operating ratio in 3Q. We think the setup for 4Q and going into 2022 will be better than what we saw in Q2 and Q3. With that, I'll turn the call back to Pat. Okay. I think Mike summarized the quarter really well. Just a couple of things that I would add, and that is I like the way he referred to the setup. We were quite intentional during this quarter to bring resources back to deal with network congestion, some unexpected things related to the refined fuel issues in Mexico, the permitting requirements, et cetera. I think slide 8 that John went through is really one of the most impactful here in our presentation today, just the magnitude of the improvement in some of our service metrics. We're seeing this down to the customer level as well. We still believe that the revenue headwinds, the areas that Mike touched on, are transitory. Maybe we can debate how long transitory covers, what time frame. Our crystal ball is no better than anybody else's. We're staying really close to our customers. Certainly in markets like the auto finished vehicles, that business will come back. I think we are set up, again, using Mike's term, very well for recovery when that business does return. Hopefully soon, hopefully in the fourth quarter, but certainly early next year. Obviously the focus on the merger, making great progress there. I think we see a clear path to getting all the regulatory and shareholder approvals and concluding that transaction in the next few months. With that, the whole team is available for any of your questions. Ladies and gentlemen, we'll now begin the question and answer session. Due to the number of participants on this morning's call, management would ask to limit yourselves to one question. At this time, we will pause momentarily to assemble the roster. Our first question today comes from Christian Wetherbee from Citigroup. Please go ahead with your question. Morning, Chris. Morning, guys. Maybe I could just ask about the operating ratio. You talked about sort of the setup going forward and maybe some improvement sequentially in how things were going. We also talked about sort of some resource additions to be able to catch up in some of the service metrics that you're highlighting. I guess maybe two-part question here. For the fourth quarter, do you think you can get back to year-over-year operating ratio improvement? As we think out to 2022 and beyond, I appreciate that you're pulling guidance because of a lack of visibility, but do you think we have to have rebased higher sort of our expectations for operating ratio, and then we can improve upon that? Do you think there's the ability to catch up if what we're seeing is actually transitory? I just want to kind of understand 4Q and then how you think the setup might progress as we move out into next year. Wow, there's a lot in that one, Chris. I'll take a stab at that. Our goal is always to improve operating ratio, and I do have some confidence here that from a cost perspective, we're progressing pretty well, particularly on the equipment side. I think we still got a little ways to go on labor productivity and fuel efficiency, but lots of focus on that. I think a lot of it is just going to depend on the demand environment. The Lazaro situation is very frustrating. We can't predict accurately when that relieves itself. Refined product, we continue to have a lot of confidence in that market. There's a huge gap in supply and demand that has to be fulfilled by importation, and we're incredibly well-positioned. You'd like to think that auto begins to show a little bit of strength as the chip issue resolves itself. If there's 1 thing we all know, the entire auto sector has been wrong about how long this chip issue is going to last. We're just going to have to wait and see. As we set up for 2022, we still feel incredibly good about this business. I made the comment about medium and long term, we don't see the growth prospects having changed at all. Having gotten over the hump now on some of the service challenges, it's incumbent on us to get productivity back to some of the levels that we saw earlier. As you see in the data, our velocity and dwell and trip planning and compliance and all those other metrics we track every single day are improving, and I think that sets us up reasonably well going forward. Great. Thanks for the time. Appreciate it. Our next question comes from Ken Hoexter from Bank of America. Please go ahead with your question. Hey, Pat, Mike, and team. Just if I can follow up on some of these network issues, what resources do you have to protect yourself in Mexico? You've been dealing with the strikes, especially the teacher strikes, for a really long time here. I don't know if they're impacting other industries or do you need the government to come in and shut down? This seems to be more a permanent ongoing impact. Maybe talk about what you've been doing and how you can control that, if at all possible. Same thing in the energy reform. It sounds like you've got something going on that's been impacting it externally. Talk about your timeframe for resolution on those both. Thanks. Just on the teacher strikes, anybody who's followed us for many years, it is a chronic issue in this part of the country. It's certainly gotten worse here recently, particularly because of some of the politics and the rivalry between the state level leadership and the federal level. We did have a transition in the leadership of the state of Michoacan in October 1st. We were very hopeful and optimistic that that would be a breakthrough. We still think it will be a breakthrough longer term, but the fact remains that the tracks aren't clear, the teachers haven't been removed. The issue is we need the government to enforce the law and remove the protesters and the blockage of our property. We're not law enforcement. We're not going to do that. We lobby very aggressively with all levels of state and federal. Oscar spends a lot of time talking to government officials in Mexico, trying to make sure they understand the economic impact of this. I wrote a letter two days ago to the finance minister reiterating the impact of this, not just on us, on our customers, on citizens of Mexico who are employed by these companies. It does affect other businesses. The economic loss is very substantial. They do also block the highways from time to time, so it tends to be an equal opportunity disruption. The fact remains the government is responsible for law enforcement, and we just need them to do that. We are optimistic, certainly, that this will get resolved. We have reasons to think that payments are being made. That's what it's all about with the teachers, restoring or addressing their complaints about compensation. We just hope that the change in administration will lead to some longer-term peace in that region that will allow us to get back to sustainable operations. I don't know. That's a mouthful. I don't know that I answered your question. As I said, it may not be a very satisfying answer, but that's the answer that we got. On the refined fuels, the 3rd quarter, I think we got surprised in the 2nd and 3rd quarter because the rules changed. The pipeline was, in terms of originations coming out of U.S. Gulf Coast, were humming along at very attractive levels. Then when the product was on the railroad moving into Mexico, we noticed that the government was cracking down on some of the permits and inspections That caused kind of a double whammy. Not only did it slow down our own supply chain and the flow of that product, but it caused some unusual congestion in our yards that rippled into added cost and service disruptions across our entire portfolio. That piece of it, the congestion and service disruption from a broader perspective, I think we feel like we've really resolved during the quarter. The heightened permit and inspection rules for this product are going to continue for some time, that may have the impact of dampening our growth and our opportunities there. I think we now know what the rules are. We're working very productively with the government. We know that the demand for these products is going to continue to be strong. Hopefully get back into a more normal, predictable cycle of how we can move this without the kind of interruptions that we've seen. I don't know, Mike, if you have anything to add to that. I guess the only thing that I would add is, to the extent that the product continues to move and some of that product has moved over to truck, we're confident that that eventually will move back to the rail because it's easier to administer from a regulatory perspective, and quite frankly, it's a more cost-effective and efficient way to move the product into the country. Great. Thanks, Pat. Thanks, Mike. Our next question comes from Amit Mehrotra from Deutsche Bank. Please go ahead with your question. Thanks. Good morning. Pat, just sticking with Mexico for a second. I was hoping you can give us an update on the approval process in Mexico. I know, you didn't really expect any insurmountable hurdles. Obviously you're progressing down that path, if you can give us any additional color. Mike Upchurch and maybe even Mike Naatz, obviously, wondering if you can kind of expand on the pricing opportunity you noted in your remarks. Obviously, capacity is constrained. Just wondering if you can kind of compare the pricing opportunity today to maybe past periods of constrained capacity. Before we all forget your question, we'll go to the COFECE. Our application is in. I think the ball is in COFECE's court to come back with a request for information. It's fairly early, but I think we learned a lot about the process through prior experience here over the last several months. I think this should be maybe a little bit easier. Until we get a request for information from COFECE, we're not exactly sure what that process is going to look like. There certainly should not be an issue here, as everyone knows, from an antitrust issue. Canadian Pacific terminates in Kansas City. They don't have any duplicate operations. We think this is a fairly straightforward case. We also know that COFECE has been challenged with staffing and resources. Their just normal backlog seems to be moving a little slower than we might like. Based on what we've heard so far, based on the feedback we've gotten from our advisors, we don't see any real difficulties with the case, and hopefully can get approval in a matter of a few months. I think on the pricing side of the house, as Mike mentioned earlier, we have an attractive pricing environment right now. Certainly inflation is something that we're watching. You're seeing high incremental costs and pricing in other modes of transportation. We're certainly seeing inflationary pressures in the railroad, and we basically will hold to the same promise that we've had in the past, which is that we will be pricing at or above inflation levels, rail inflation levels moving forward. Isn't there an opportunity to price well above inflation levels given how constrained capacity is? I'm sorry to ask the follow-up, but just talk about your ability to price to the market rather than just price to inflation, given how constrained the capacity is next year. Yeah, you're seeing that. To the extent that we have opportunistic abilities to price, those are certainly things that we'll be taking into consideration as we negotiate our contracts. Okay. All right. Thank you guys. Appreciate it. Okay, thanks, Amit. Our next question comes from Brian Ossenbeck from JPMorgan. Please go ahead with your question. Hey, good morning. Thanks for taking the question. I just wanted to come back to the refined products and energy reform, just more broadly. Can you just comment what's the net effect when the regulatory side settles down a bit on the imports? Do you expect more to go to unit trains, as you probably get a little bit of consolidation on the permitting side? I'm a little surprised to see that truck is able to pick up some capacity here. Maybe you can comment on that. Secondly, we've seen more comments about the LPG pricing caps. I know that's a smaller part of energy reform, but I guess if you can comment on that as well, because it was a little surprising. I think that was the first move we've seen on pricing that kind of went against the energy reform. You can comment maybe on the implications of that, what the impact has been on the market as well. That'd be helpful. Thank you. All right. I'll go ahead and start. With respect to the comments on the refined products unit versus manifest train, our unit train business has been fairly consistent. We haven't seen the same magnitude of disruption that we've seen on the manifest side of the house. We do expect that as the regulatory environment and supply chain issues come, I guess, more into a normal activity, we do expect that the manifest fuels will pick itself back up. It's that manifest business that has largely migrated to the trucking portion of the business, where products are taking a short haul over the Mexico border into the Northern Mexico, Central Mexico marketplaces. With respect to the LPGs, I'm not sure that I entirely understood the question, but obviously Mexico has indicated that they are going to try to contain pricing on behalf of the consumers in Mexico. That may result in Mexico effectively subsidizing the LPG costs as they move forward. Again, this will ultimately become a supply and demand question with respect to LPGs moving into the country. Thank you. Yeah, the question was about the pricing caps that the CRE put on a couple of months ago, which is the first time we've seen that since 2017. It sounds like you aren't seeing too much of a volume impact from that, and was just curious if there's other implications of capping here that might translate to other products. Well, if there's caps, and there's alternative markets that those products can go to, those products are probably going to migrate into those other marketplaces. Brian, just to put it in perspective, though, we're moving 2,000 to 3,000 car loads a quarter that are tied to Mexican energy reform. It's a pretty small part of our business. I wouldn't expect it to have a big impact. Okay. Thank you, guys. Appreciate it. Our next question comes from Justin Long from Stephens. Please go ahead with your question. Thanks, and good morning. Good morning. wanted to ask another one on refined products. Pat, earlier, you mentioned that the permitting and inspection requirements could be a headwind for some time. Does that mean that you're viewing this as a structural change that you're going to have to overcome, or do you think there's potential for some of these regulations to get pulled back? I guess if it is a structural change, how does that influence the way you think about incremental margins and returns in this business? I think it's maybe a little too early to know, and I'll take a first shot at this, and then maybe Mike and Oscar. What I meant is, there's obviously a heightened level of scrutiny, not only on us, but some of our customers, for permit compliance, for inspections. Some of the disruption that we're seeing here, we've seen in the recent past and still experiencing, is affecting the business because the players in the market, us, our customers, are having to adapt to really a different compliance set of expectations. Once we work through all of that, and I don't know exactly how this is going to play out, would it result in some of the smaller players, some of the smaller participants, and maybe some of the smaller terminals and receivers deciding that they don't want to be in this business. How that's going to play out in terms of the number of customers, the number of terminals we can serve, the density of small terminals versus large terminals, I don't think we know how that's going to play out longer term. I would say this, and Mike, Oscar, I think you guys can maybe add to this, that at this moment, we definitely have seen fewer receiving terminals because of the change in the requirements. I don't know, Mike, if you have thoughts or opinions about whether we will see all of those customers and locations come back or some consolidation that could actually have a benefit in terms of efficiency of the way we serve them and cost profile versus a more disparate type of a market. I guess with respect to the receiving terminals, Pat, and those facilities, my numbers won't be exactly right here, but they should be directionally correct. I'd say as a result of the government going in on a regulatory basis and reviewing licenses and permits and proper operation, the number of servicing facilities has declined by about half. We expect that that number will slowly rise as these entities get their business house in order, if you will. Of course, it is going to depend upon the regulatory authorities approving those things. To the extent that we're dealing with fewer entities, there are operational benefits to us in dealing with a somewhat smaller pool. There's more efficiencies, we expect to move more quantities into fewer destinations. Just keep in mind, the overall market dynamics still suggest that 2/3 of the demand in Mexico needs to come from other countries, namely the U.S., to make up the shortfall in demand here. Rail is going to be much more efficient than truck, and if you think about compliance with regulations, much easier to inspect with rail operations than it would be with trucks given the nature of our operations. That's why we still feel good about this market as it settles back out. Okay. Thanks, everyone. Appreciate the time. Thank you. Our next question comes from Tom Wadewitz from UBS. Please go ahead with your question. Yeah, good morning. I'm not going to ask you about refined products, but let's see. Pat, I wanted to get your sense of kind of a longer-term thought on outsourcing interest. The supply chain disruption we've seen this year has been just remarkable. Certainly the costs of importing from Asia have skyrocketed in terms of container rates. What have you seen from customers that would point to long-term opportunities for outsourcing from Asia to Mexico? Are there any customer types or things that you'd say, "Well, this is kind of interesting from I know these things would take time, but from a longer-term basis, if you have any thoughts, kind of related to the dramatic disruption we've seen this year in supply chain? You're right. These things take time. As we've said in the recent past, we can't show you a long list of announcements of new plant locations, whether it's in Mexico or across North America. Obviously, the combined CPKC's North American network is going to benefit and hopefully help drive some of these decisions across the entire continent. I think the thesis is still very much alive. The supply chain issues, the prolonged supply chain issues that everyone is very well aware of, are certainly doing nothing but fuel some of those decisions. Yes. There's a lot of work to do in terms of syncing up and implementing USMCA, resolving differences between the three countries, and specifically between U.S. and Mexico on a lot of issues. Make sure that our government policies don't diminish to a large extent the opportunity that really North America should be having. Mike Naatz and I, and I'm not going to overplay this, it was very early, but we had a discussion last week with a very large discount retailer that was talking about resourcing virtually all of their material and production that they currently are sourcing from Asia, coming into the West Coast, to Mexico. This isn't a manufacturing company, it's a retailer. They were talking about significant volumes of product coming up from Mexico, changing their vendor supply network away from Asia to Mexico. Substantial volume that would be available for us, intermodal, and some of it truck, obviously. That was certainly an encouraging sign and kind of validates the thesis that supply chain decision makers are in fact looking to de-risk global supply chains. Again, I don't have anything terribly specific beyond that. Mike, I don't know if you have anything to add. No, I think you said it well. Okay, great. Thanks, Pat. Appreciate it. Okay. Our next question comes from Scott Group from Wolfe Research. Please go ahead with your question. Hey, thanks. Morning, guys. Can you just review, for the merger timeline, when do you think you'll know if we'll get an expedited review of the full merger by the STB? Separately, Pat, I'm not sure if you guys are going to be doing another earnings call early next year or not. Maybe for the year or so while you guys are owned in trust, maybe can you just outline what your key priorities are for the business? Is it network operations? Is it growing the business? Is it earnings, cash flow? Just what are you going to be focused on for that year or so? Well, I don't think it's going to change too much from what we are doing now, which is just improving network operations, being prepared to really take advantage of all of the growth opportunities that we believe are in front of us, whether it's for the next year or so that we're in trust or whether it's way beyond that. Certainly, you know the story of the CP KCS merger thesis. It's all about growth. We want to do everything we can to get our network prepared to handle our part of that. I think, Mike said it well, we're set up for that. We really believe that some of the revenue headwinds that we've been experiencing are still transitory. We could argue about how long a period of time you are able to declare something transitory. Certainly the auto industry, no doubt that's going to return. We got 16 auto plants in Mexico, and when that business comes back, it could come back very strong. I think it's going to be capital efficiency, it's going to be improving the performance of our network, and doing all the things that we can. I've certainly dusted off the service begets growth mantra for the last few months. Kind of getting through COVID, that seemed to fall by the wayside a little bit. I don't think there's going to be any, other than obviously dividend and capital allocation in terms of share repurchase and that type of thing. That will change, but I think in terms of focusing on the core elements of the business, and John and the operations team continuing to just get better and capital expenditures where we think we really need them to be prepared for growth. A good example is the second bridge at Laredo. We're definitely full steam ahead on that project because we think that's going to be necessary. As far as the first question about the expedited merger review, I don't know when we will, I'm looking at Adam Godderz here, when we might have more clarity on whether the STB is going to accept that timeframe. Yeah, Scott, this is Adam. Pat's exactly right. I don't know that we have a good answer for you right now. Obviously, we're working on the merger application, and I think we're in good shape to file that in the very near future, which will then really start that clock on the process for reviewing the full merger with the STB. I think we're still sort of holding true to the projection that the final merger approval, if you will be obtained there in the second half of 2022. At this point, that's the best guidance we can give. Okay. Thank you, guys. Appreciate it. Thank you, Scott. Our next question comes from Bascome Majors from Susquehanna. Please go ahead with your question. Yeah, thanks for taking my question. Clearly you're optimistic that a lot of the volume challenges are going to come back and you're resourcing appropriately. Can you talk through maybe parts of your business where you think demand has been lost semi-permanently or permanently? Just trying to think about where you're less optimistic about a snapback in a midterm timeline. Thank you. I guess I'll start with that one. Coal has been very good to us here recently. Demand has been higher, natural gas prices have supported use of coal. As you know, that is something that tends to be very volatile, even though it's a small portion of our book, and we're optimistic on that. Certainly going into the first half of next year, I'd say that some of the coal tailwinds that we've had are at risk in moving into the future. Thank you. Sure. Our next question comes from Brandon Oglenski from Barclays. Please go ahead with your question. Hey, good morning, everyone, and thanks for taking my question. Pat, I guess if we can just follow up from Scott's question about priorities in 2022. It seems like some of these issues can be recurring, especially like the teacher strike. Obviously you don't know what regulations can change your end markets. How do you build in more resiliency and variability in the model such that you can maintain operating ratio improvement going forward? I think I'll maybe take a stab at that and ask John to comment on that. I think it's just the improvements that we've made in some of the fundamentals and the focus on the way we operate. We needed to clear out some of the congestion and the issues that really caused us to get choked up. I would say now that we really believe a lot of that is behind us, and we're in a position where the network is performing extremely well. The one statistic that John mentioned was the grain cycles. In 15 years I've been here, I don't think we've ever seen grain cycle times for cross-border grain going from western Illinois all the way deep into Mexico have ever been this good. As the volume comes back, I think we are in really good position to handle that, and handle it very efficiently because of the things we did during the third quarter to get the network back to a very high level of performance. John, in terms of resiliency and ability to handle these events and growth in the future, I don't know if you want to add to that? Thanks, Pat. It's a great question. The reality is, in the rail industry, in any transportation ecosystem, there's always something going on somewhere. It's either a headwind or a tailwind. The development of the team and the capability of prospective execution capacity and deliverables are what separates leveraging up on a spot opportunity or dealing effectively with interruption. Teacher strike, the refined fuel product issue, and even some of the weather issues that we've had to deal with are not unique, especially to KCS. They happen across a lot of railways. For me, it's the resilience of the team, the vertical and lateral alignment of operations, the commercial team, and the finance team to always be working on continuous improvement is the starting point. You're right, Pat, when I look at the principles and the discipline that surround the improvement on the cross-border grain supply chain, taking it down from 27 days to 15 days over the course of five or six months is really the team diving into every segment of that supply chain. Offline partners, first-mile terminal, last-mile terminals across two countries and across the border, and breaking it down into manageable, incremental improvements and setting standards. It's the same through any asset allocation, any people monitoring, people support, and making that happen. From my view, we're looking at what we've learned from continuous improvement. Where are the barriers? We've got now a catalog of capacity improvements for the next three to five years based on a reasonable projected growth, based on some of the headwinds we bumped up against through the course of this continuous improvement agenda. When we look at it from a product level and view from PSR, making sure that we focus on growth, that we're maximizing the use, and more importantly, the reliability, the health of our assets, the strength of our people to deliver reliable customer service, that creates that resiliency. Some of the early onset initiatives from slide eight that manifested themselves into the continuous improvement on dwell and velocity were the establishment of institutional playbooks that then set the standards for terminal activity, for how we see crews and crew management, where our next level of improvement is from a capacity perspective, from a collective bargaining perspective. It just takes us along that continuous improvement continuum. That's what I would say the health of the team, strength of the team from a network perspective down to the field, maintenance of way and engineering, creating reliable, sustainable value proposition for our customers. It can't be missed that from operations, commercial, and the financial group being cohesive and aligned in sustaining this momentum really builds the constructive tension within the organization to keep our elbows sharp and our eyes well-positioned on what our values are and deliver a safe, reliable customer service proposition. Even when we go somewhat long on assets like a locomotive, sweating them, making sure they're actually working, and if they're not, putting them in a position so that we reduce some of the fixed costs and variable costs so that they're ready when we need them. That to me is that discipline I'm seeing across the operating team. Thank you. Ladies and gentlemen, our next question comes from Jeff Kauffman. Hello. Thank you for taking my question. In light of some of the operating challenges with the autos and with what's going on in Lazaro, have there been any thoughts about the capital budget in terms of network investment, or are we still sticking with the same numbers that were out there? I guess I was just wondering how your thoughts are shifting on that, given the environment and some of the supply chain challenges. Yeah, we're not changing our focus on the required CapEx spend to support the growth in the business. We're much longer-term thinkers than just a quarter ahead. We have a lot of confidence we'll continue to grow this business post-combination with CP. A lot of revenue synergies available to the combined network here that would suggest to us that we keep our plans intact and make sure that we can handle the kind of volume that we've historically been able to deliver on this network. No change at all. Okay. That's my one. Thank you. Thank you. Ladies and gentlemen, with that, we will be concluding today's question and answer session. I'd now like to turn the conference call back over to Mr. Ottensmeyer for any closing remarks. Thanks everyone for your attention. We'll do our best to keep you all posted as things develop on the merger timeline front. Look forward to seeing you all at conferences around the market here in the future. Thank you. Ladies and gentlemen, that will conclude today's conference call. We do thank you for attending today's presentation. You may now disconnect your lines.