Good afternoon everyone. I hope everyone had a great lunch and again, thank you for attending day one of Barclays Industrial Select Conference. I'm Brandon Oglensky, airline and transport analyst. Next up we have Norfolk Southern. Normally I would just go right into questions about the stock and everything, but I think I'm going to give. We're joined by the way, by Mark George, company's CFO, and Ed Elkins, Chief Marketing Officer. I know we're going to have a great discussion about the future, but sure, a lot of folks have seen there's quite a bit of media attention surrounding Norfolk, so I'm going to open it up with Mark here. You don't say. Anyway, thanks, Brandon. Ed and I are thrilled to be here and I do have some remarks I want to make today because obviously the topic du jour is the tragic events that happened in East Palestine. I do want to remind everyone before we start here that during our talk today we will be making some forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including those described in our Form 10-K with the SEC and those also related to the recent derailment. Before we get into business, you know, I just want to mention that Alan Shaw, he remains on site in East Palestine as we continue to support that community and it's imperative that we make things right there. We've been in that community a long time, over 100 years and we will continue to be there going forward. We are fully dedicated to making things right in that community. As you're all aware, February 3, Norfolk Southern train derailed there. Approximately 50 cars were involved, 11 of which contained hazardous materials. There is a lot of misinformation that's out there and a lot of speculation too. I’d strongly encourage that all of you get your information from the NTSB and the EPA. They remain fact oriented. Here are some other facts you know. Within an hour of the incident, Norfolk Southern representatives were on site and took action to ensure the safety of the residents in close coordination with local, state and federal officials. That work is continuing now thanks to the swift response of the law enforcement and fire departments, several government agencies and our crews. The initial impact was contained and we also immediately established a Family Assistance Center within the first 18 hours to address the needs of the community and to support those who were directly impacted. To date, our Family Assistance Center has provided more than $6 million of direct aid to support the community with $3.8 million of it so far directly to the citizens who are impacted by the incident, and we're not done with that. In the two or three days following the incident with Alan Shaw on the ground in East Palestine. Palestine, I apologize. Norfolk Southern coordinated with first responders, the Ohio and Pennsylvania authorities, including the governors of those two states, as well as the Ohio National Guard, to develop a plan to manually vent several rail cars via a controlled breach. That was under the supervision of experts and first responders. To protect the environment, materials from the controlled breach were drained into pits and embankments so that they could be safely remediated. These steps were critical to mitigate the immediate danger to the area and ensure the safety of East Palestine residents. Listen, the experts were very worried about the pressure that was building in these cars, given the heat around it. The vents on the top of the cars that would release the pressure were no longer operating. If these cars had exploded, it would have projected steel shrapnel along a very large stretch of land into the community, potentially causing life threatening injuries or frankly, death. It also would have released the gas in a worse polluting form across a much bigger area, causing a bigger issue for cleanup. At the end of the day, this controlled burn was by far and away considered the best alternative. We take responsibility to East Palestine very seriously. Over the weeks, we've met with the local leaders, we've met with the local residents and business owners. We provided and will continue to provide reassurances that we're here to stay and we're here for the long term. The first phase of our cleanup operation concentrated on safety measures to preserve life and property. We have since removed more than 15,000 tons of soil and debris. We have also removed over 1.1 million gallons of impacted water. Additionally, we have taken actions installing pumps to redirect the Sulphur Run stream around the derailment site. We are working with environmental experts to collect samples around the groundwater there and along the stream banks. For air quality, we have completed nearly 500 in-home air tests in conjunction with the EPA and other governmental agencies. Importantly, this monitoring has indicated that the air quality remains safe. Despite this, we provided air purifiers for residents for use in their homes, and we have also purchased air purifiers for the city and their municipal buildings. Finally, you know, we continue to cooperate with the NTSB in its ongoing investigation of the cause of the derailment. The NTSB, again, is the only source of reliable information on this. I encourage you to look at their preliminary release and subsequent releases. The majority of the hazardous rail cars have been decontaminated and they're being held on site to allow the NTSB to finish its investigation, after which we will remove them and scrap them. We understand that this is very much a defining moment for Norfolk Southern and we will not be judged by what we say now and here, but it's our actions as we go forward. We know there's still a lot of questions without answers, and over this past weekend we launched our own site to provide information and data that's called nsmakingitright.com so I encourage you to go and peruse the information that's posted there now. Finally, I know that this investor group is interested in the cost impact to the railroad. Frankly, the focus on cost has taken a backseat to our focus and really it's all about getting things right in the community of East Palestine. We expect to provide more fulsome information on the cost impacts no later than our first quarter earnings release. In the interim I can provide you the following information regarding our insurance coverage and how we think you should be thinking about the financial impact of the derailment. We maintain insurance coverage intended for losses from incidents such as this one, and it would apply above separate self insurance limits for third party liabilities of $75 million of self insurance and also $75 million of self insurance related to first party property losses. Two separate policies. Our liability policy attaches for coverage losses above $75 million and up to $800 million or up to $1.1 billion for specified types of pollution releases. It's intended to protect against legal liabilities for bodily injury and property damage to third parties. Our first property policy is intended to cover loss or damage to property that the company owns or that is in our custody or control, and to certain types of lost revenue and extra expenses. It applies to approximately 82% of covered losses above that first $75 million up to $275 million. Of course, as you would expect any discussion of insurance, there's many qualifiers, including our insurance, our insurers' reservation of their rights to further investigate and contest coverage, the express restrictions and sub limits of coverage, and various policy exclusions, including those for governmental fines or penalties. With regard to how to think about the financial impact of the derailment at this time. Although our financial analysis is still very, very much in process and early, things will develop in the weeks and months ahead, we think it's prudent to note that this derailment differs from prior derailments that may be used for comparative purposes. Specifically, the Graniteville derailment that Norfolk Southern had back in 2005. They differ really in two key ways. First, our self-insurance amounts have increased compared to 2005. As I mentioned, there's $75 million self-insurance rates right now. Back in 2005, we had a $25 million threshold for the third party injury and property damage policy and a $12.5 million self-insurance limit for our own first party coverage. Much higher self-insurance limits. Second, the Graniteville derailment was 18 years ago. There has been inflation in 18 years. That has to get really contemplated as you think about the costs related to cleanup as well as litigation. With that, Brandon, let's talk about business. All right, Mark, I really appreciate that, and I guess I won't ask the question what your preliminary thoughts are on the total cost, but appreciate the context you provided here. I guess, though, you know, understand situation. Does this change your view in any way on, you know, priorities for investment? Because I know you guys have been talking about technology investment, improving service, reliability. How does that fit into the focus on safety at Norfolk? I mean, safety really is our number one priority at Norfolk Southern. You can see the progress we've made over the past decade on far fewer derailments than we've ever had. Even all of our other safety metrics have gone in the right direction. It is, it has been, and it will be a top priority for this company when it comes to how much we spend on it. It's. It's really simple. You know, I gave guidance back in January and also talked about it at investor day. We spend $2.1 billion right now in 2023 on capital, and half of that, a little more than $1 billion, is really reinvesting in the railroad. Okay. Which really drives safety and resiliency of the railroad. It's replacing our track infrastructure. It's 500 miles of track every year that gets replaced. We are using technology to target exactly which 500 miles should be replaced based on fatigue, using telemetry cars, and really testing to make sure that we aren't just guessing based on age of rail, but actually on specific optic scans to determine where we see fatigue and trying to be far more targeted. We have been increasing our safety spend, and I would imagine we will continue to increase our safety spend. Appreciate that. I know. Ed, do you want to add anything more on the safety side? No, I think, you know, I think you said it exactly right. Technology is going to play a growing role in how we address safety and how we address reliability across the railroad. We're already seeing it employed in a number of different areas, and I think it'll just only grow from this point going forward. There's a lot of good things out there. And then speaking about getting information correct, you know, I think there's been a lot of discussion about the impact on the commercial side of the business from the unfortunate derailment. Can you just talk to current business trends on your network and how impactful this has been? I think the derailment itself was impactful for probably a couple weeks in terms of deferring freight, either not shipping or diverting to another route adverse to us. We have restored operations for the most part through that area. The ripple effects or downstream effects of some of those diversions have pretty much sorted itself out at this point. We had a great January. We felt like we had a lot of momentum heading into February. It certainly decelerated a bit since then. Okay, sorry. Decelerated from then? Yeah. Can you maybe put a little bit more context around that? Sure. You know, I think as the railroad slowed down around the derailment, we started to lose cycle times on some of our equipment, which probably diverted some of that freight away. Our cycle times have started. They've leveled off now, and we expect to see them improve going forward. At the same time, you know, the consumer economy, whether it's intermodal as a proxy for that or other portions, there's clearly some demand destruction going on out there. Truck prices remain very low. Demand on the consumer goods side is pretty sedate. Okay. I mean, we've been watching import levels that have come down quite a bit into this country the last few months. Are you hearing from your customers or your channel partners of inventory destocking taking place? Is there an outlook that this could improve? You know, I believe based on what I've heard, that a lot of that destocking has taken place. And the supply chain itself, we're. I think we're in the early innings of it starting to unlock itself, so to speak. And that's going to bode well going forward. Most of our channel partners are incredibly bullish on 2023, particularly in the second half of the year. Our biggest customer, J.B. Hunt, on the intermodal side is investing heavily, and you probably listen to their earnings call in the fourth quarter. They were. They're very bullish on the second half of the year. We're bullish as well, because they are. Okay, appreciate that. I did not start off with the audience response questions, but I figured we can do that now. If you can queue up question number one, and for those in the audience that have not done this yet, just pick up the keypad and vote. Do you currently own Norfolk? Yes. Overweight, two market weight or three underweight. Got some potential stock owners here. Question number two, what is your general bias towards Norfolk right now? Positive, negative or neutral? Appreciate everyone, the generalizer of the test. Question number three, in your opinion, through cycle EPS growth for Norfolk will be above peers, in line with peers or below peers. All right, question number four, in your opinion, what should Norfolk selling do with excess cash, bolt on M& A, larger M& A, share repurchases, dividends, debt pay down or internal investment? We'll get you these results after. Yeah, that's great. While the audience is taking this one, Mark, you know we just, you had an investor day not that long ago in Atlanta and something that we've witnessed over the years covering the railroads. Inevitably when demand goes up like it did during the pandemic, there's service challenges and generally service decreases. That is not a Norfolk specific comment, but more about the industry and for sure, you know, Norfolk was impacted as well. What steps have you guys taken? Because I think that was a big focus of the investor day that we don't want to get in this up and down cycle. We want to keep more consistency with your cost base, with your crew base. Can you talk to some of those issues? Yeah, look, our strategy is really simple. We can't grow. We've been a shrinking railroad and compensating for it by reducing cost over the past six, seven, eight years. You can't shrink your way to growth at the end of the day. We see a big opportunity to recapture share from the highway, put it back on this contained infrastructure that the freight railroads have. We want to try to drive that growth. We recognize that the standards of service for freight that travels on the railroad has elevated and it's got to be more akin to that of truck that the customers are accustomed to. That is going to require some level of investment to make sure that we can provide more consistent service and better visibility to the freight moves. At the same time, unlike truck, when we have downturns in the past, the history of this industry has been to quickly shed resources, furlough people, and at the end of the day, you know, it's kind of worked to minimize the decremental margins on the way down. What we saw and observed, a little bit of a microcosm of this back in Q2 of 2020, during the pandemic, a lot of the roads, including us, you know, went into furlough mode because Covid, we thought, could last for a long time. It could mimic 2008. We probably were a little bit shyer about the level of furloughing we did. In Q1, our operating ratio had ballooned to 70%. We took a little bit of criticism from the street about that because I think the other roads went deeper, faster and mitigated the margin erosion in that quarter. When the V- shaped recovery started, we actually had a spectacular second quarter because we were able to handle the volume as it was coming back because we had the resources ready to, ready to run. That was a little bit of a test drive for this resiliency model that we rolled out back in December that we're not going to be so quick in the future to furlough people because what we've recognized is when the volume comes back and you can't serve it, the top line loss just dwarfs the incremental cost of holding on to those resources for an extra quarter or two. That's really the model that we're talking about. You know, a couple of other things came out during the pandemic, which is that when we as an industry, when we used to furlough, we'd have a pretty high recall rate. You know, people would come back. During the pandemic, with all of the lifestyle choices that people had, very low unemployment out there as well, the recall rate was very low. That put us all behind the eight ball and we had to go out and hire externally. That requires months of recruiting plus months of training. You have to do it in various locations. These are not fungible resources that can go anywhere on your network. You have to do it across 95 different hiring locations. You have to be very targeted. The duration of lost revenue was long and it lasted quite a while. We learned a lot of lessons from this. That's it. Yeah, I want to add two things to that. The first is I think the average employee tolerance for furlough and recall, whatever the industry, is probably lower now than it was pre Covid. There's almost two jobs for every unemployed worker right now. There's lots of choices out there. The model we've employed for a long time, and I've been with Norfolk Southern 35 years. I was a brakeman and a local locomotive engineer. I got furloughed, but I came back. The most important part about this, though, about this strategy, is the markets that we're pursuing, which is the flexible freight market. That is that freight that could go by rail or go by truck, depending on how much value it receives from either one of those. That market has a different tolerance for variance than it did 35 years ago. I have a different tolerance for service variance than I had 30 years ago. My expectation as an individual is much different now. The markets that we're pursuing have moved away from that model of tolerance. We have to deliver a better service. That's what it comes down to. One that is low variance over a very long period of time, I guess. Where would you place your service outcomes today? I think we're on the road to being where we need to be. You know, one thing that we're doing right now is we have teams of folks talking to key customers across our network about what sort of service will deliver value for them three to five years from now. Not tomorrow, but for the future. Because we need to be building now the plan, the resources, the leadership and execution to deliver that product three to five years from now. We gotta be doing it right now. Okay. By the way, if there's any audience questions, just feel free to raise your hand. We'll get you a mic. You guys did lay out a plan to grow volumes in excess of GDP. I think, if I'm not mistaken, Intermodal was the big driver of that. How are you working with your channel partners? We've definitely heard the bullishness from J.B. Hunt too. Sure. What's the incremental opportunity? I think there is a view that Intermodal hasn't been growing as fast in the past few years for whatever reasons. Have we tapped out of the easily convertible business in the marketplace? Certainly not. I can't speak for other parts of the country, but in the part of the country where we live in the eastern United States, we have. We've only started to tap that market. There's a tremendous value that we provide for our channel partners and for their customers by delivering intermodal transportation in what would be called shorter haul lanes and other railroads. There's a tremendous amount of opportunity, not only in the traditional, what I would call warehouse to warehouse model, which is where intermodal has generally been successful over the past 20 years. There's an entire constellation of freight associated with store door delivery. Or another way to think of it is freight that changes ownership enroute. Right. have got to deliver a different value service to be able to penetrate those markets. That is what we are working on. How close are you working together with those channel partners to unlock those? Very closely. More so than in the past? You know, we've had great relationships with our key channel partners like J.B. Hunt, Hub Group, UPS, FedEx, others for a long time. As we've sort of trained our guns, so to speak, on this flexible freight market, that understanding, coordination, and frankly investment by both parties has to take place. Okay. I think you did mention something about softer truck pricing, which I think a lot of folks are understandable about freight rates went up a lot, but they've come down the past year. How does that impact your book of business? You know, Intermodal offers tremendous value for a lot of customers. Now over the long, over the long course of not only time but also of freight history, we've done a really good job staying up against the truckload contract price over time. You know there's, there's ebbs and flows to that. Our customers, those third party providers like a J.B. Hunt logistics providers, they're competing every day for freight. We know we have to. The way that we compete is by offering that value. You know, a good service is the, a good service product is the only thing that people are willing to pay us for. Does that mean investors should expect that pricing is maybe a little bit tougher in the near term? You know, pricing, pricing ebbs and flows. But we have a solid core price point plan not only in Intermodal but across our, across our book of business. You know, there's RPU and then there's price. Right. There are some RPU headwinds that we know are going to be out there. Fuel is one of them. Right. The extraordinary price of some commodities like coal last year that probably will not be replicated this year. The silo charges associated with that supply chain congestion, as those unwind, those are going to be RPU headwinds. Our core, our core pricing plan is very strong and I feel really good about it. Okay. Mark, is it right to focus? You had a question out there, you were invited. Oh, I didn't see it, sorry. Thanks. I want to explore a little bit further your comments you had a few minutes ago on labor. You know, I think a lot of investors have heard this from a lot of companies. I'm going to use a term called labor hoarding and that may be not something that resonates exactly with you, but generically this concept that we don't want to lay people off, we don't want to furlough people because they might go somewhere else. To your point, there's two for one. You know, at some point, and I get what you're saying in terms of the cost of that, but at some point that's untenable. You know, your margins get to a point where like we can't do this and this is industrial conference. You know, most of us probably sit here and look at PMIs, new order activity, they're getting worse. Forget what stocks are doing, they're getting worse, they're getting materially worse. You know, how do you put that into your calculus when you say, okay, if I look at new order activity, you obviously are going to be the shippers of those new orders that are declining significantly. Not a little bit, significantly, unless the ISM and the PMIs are just completely wrong versus what they've been over the past 50 years. How do we think about that labor component? Because at some point there's just less stuff to ship, the margins are going to contract and at some point you have to make a hard decision. This isn't just a question for you. I think for a lot of companies, like when does this sort of crossover happen? We say, okay, we've got to pull the plug. We've seen it in tech, we've seen it in some other industries, but we haven't seen it yet in sort of manufacturing, industrial logistics. Just love your, love your thoughts along that conversation. Thank you. Yeah, bringing it back to us in particular, you know, we still have 95 different crew bases or hiring locations and many of those are still below minimum staffing levels. We still have, we're still in deficit for where the demand currently is. Forget about demand growth in the future. We still need to add resources just to get all of those 95 hiring locations up to sufficient levels. On top of that, while there is, and I'll let Ed go into this a little bit more, while there is demand destruction, there is some mitigating share recapture opportunity. You know, there is volume that wants to be on the railroad that's been temporarily defrayed to the highway. That can help mitigate some of those contracting forces that you described. Ed, once you drill into that. A little bit better, as we've seen our service accelerate, we've seen customers come back to the railroad. You know, there are many supply chains out there that, you know, recognize extraordinary value with the service that we can deliver. Some of them have their factories designed around receiving shipments or sending shipments by rail. When we can turn faster and present them with another piece of equipment to load, they want to load it because it's very expensive to do other options. They do have other options. Some of them have had to make other arrangements because of the kind of service that we've delivered over time. We're waiting patiently for them to unwind those other arrangements that, frankly, are not superior to us so they can come back and they've made those. They've made those choices clear to us. They want to come back. The third piece of this, I think, is even in a freight environment that is not so great right now on the consumer package side, there are still customers that derive exceptional value from Norfolk Southern, particularly in the east, particularly with Intermodal, because of our partnerships with our channel partners, but also because of our geographic coverage. There are a few layers of what I would call immediate clawback of some freight. Yeah, and look, I don't want to be tone deaf to the underlying question as well, which is, you know, if we get into a point where there is a sustained weakness in the economic environment and we start seeing volumes actually fall off for us, there are other levers we can do before we have to even think about furloughing again. You know, there's, you know, attrition. We actually attribute a fair amount of people, which is why the hiring will continue, just to replace attrition. I would imagine that you'll always see us having, at any given time, you know, 500 plus or minus in our trainee program just to address attrition. So we can let attrition play a role in helping us downsize in the future. You know, when we take people off, you have to remember when the volume is not, a lot of these people are paid via activity. So if there is lower volume and the crews are not having as much activity, there is some cost benefit that we enjoy as well from just having them work less, although there's always a risk. They go and try to find supplemental work, and that's when you lose them. I think a little bit unique to our industry is people tend to get paid on the number of runs they do or activity based. You do get some savings from that while you're evaluating when a recovery may come. We're a little bit over time here, but if we just queue up question number five, we'll cycle through the next three questions very quickly. Mark, as we wrap this up, really appreciate you guys coming here. In your opinion, what multiple of 2023 earnings should Norfolk Southern stock trade? Just go ahead and pull these as soon as we pull them up, please. That's a great question. Question number six, what do you see as the most significant investment headwind for Norfolk? Core growth, margin performance, capital deployment or execution strategy? Question number seven, does ESG play an active role in your investment decision regarding relating to Norfolk? These are great questions. They are great questions. Mark and Ed, thank you so much for coming down. Appreciate the being up front. Thank you. Thank you so much, Brandon.