Morning, ladies and gentlemen, and welcome to the Norfolk Southern Corporation first quarter 2026 earnings conference call. At this time, note that all participant lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. Also note that this call is being recorded on Friday, April 24th, 2026. I would like to turn the conference over to Luke Nichols. Please go ahead, sir. Good morning, everyone. Please note that during today's call, we will make certain forward-looking statements within the meaning of the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. These statements relate to future events or future performance of Norfolk Southern Corporation, which are subject to risks and uncertainties and may differ materially from actual results. Please refer to our annual and quarterly reports filed with the SEC for a full discussion of those risks and uncertainties we view as most important. Our presentation slides are available at norfolksouthern.com in the Investors section, along with our reconciliation of any non-GAAP measures used today to the comparable GAAP measures, including adjusted or non-GAAP operating ratio. Please note that all references to our prospective operating ratio during today's call are being provided on an adjusted basis. Turning to slide three. I'll now turn the call over to Norfolk Southern's President and Chief Executive Officer, Mark George. Good morning, and thanks for joining us. With me today are John Orr, our Chief Operating Officer, Ed Elkins, our Chief Commercial Officer, and Jason Zampi, our Chief Financial Officer. Before we get into details, I wanted to start by recognizing our thoroughbred team. Working together, we successfully navigated another challenging winter, with weather events that affected most of our territory, putting real pressure on the network and our volumes in the month of February. As conditions normalized and our network recovered, we were able to capture the available volume in March and exited the quarter with solid momentum, all while staying focused on what matters most, operating the railroad safely. Our safety performance continues to excel, which remains our most important work. We're seeing the benefits of the investments we've made in technology, training, and standard processes, from digital inspection tools to more rigorous operating standards. These efforts are helping us detect and address potential issues earlier and keep our employees, customers, and communities we serve safe. Our FRA reportable accident rate is down yet again, thanks to the systems we have and our leadership. I'm proud of how our people stayed disciplined and committed through all the weather challenges and other distractions. On costs, we remained disciplined. Total adjusted expenses were up just 1% year-over-year, despite inflationary pressures, storm costs, and sharply higher fuel prices. We earned new business, expanded key relationships, and saw customer confidence grow across multiple sectors, reflecting improved execution and trust in our capabilities. We're seeing strength and encouraging results across multiple parts of the business, reflecting focused investments and improved coordination across our teams. Ed will walk through some of our wins and the underlying volume drivers in more detail. Lastly, stepping back to the broader environment, the macro remains a mix of puts and takes. Customers continue to manage dynamic and shifting supply chains, but our message is simple: Norfolk Southern is well-positioned to grow alongside of them. The strength of our network, combined with the flexibility we built into our cost structure, gives us confidence to navigate whatever the market brings. With that, I'll turn it over to John to get into the operational details. John? Good morning, everyone, and thanks, Mark. Throughout 2025, our Norfolk Southern team was focused on growing our team's capabilities, skills, and speak-up willingness, creating the environment to deeply embed our safety and service maturity and capabilities. Now, with a full quarter behind us in 2026, we are realizing measurable gains from those successive efforts. We are advancing and layering progressive PSR 2.0 structural changes to build more resilience and efficiencies across the railway, develop generational railway leaders, and provide our customers with the best possible service plan. As Mark noted, extreme and network-wide winter weather in the first quarter tested the network. I am very proud of the entire enterprise in the way we anticipated, prepared, and responded to deliver for our customers. The extraordinary commitment of more than 19,000 railroaders across our franchise was clear in the service and volume execution coming out of the system-wide storms. Thank you to all my fellow railroaders. The entire team delivered both daily and storm backlog demand and drove post-pandemic daily GTM volume records, made possible by our operations and commercial teams. Turning to slide five. At Norfolk Southern, safety is the core value to which all of our operating decisions are made. Our continued investment in safety is producing results while building a stronger, more durable safety culture. In the quarter, our FRA personal injury ratio was 1.10. This is consistent with full year 2025 performance. Our FRA accident ratio was 1.43. This reflects a 37% improvement year-over-year in the first quarter. Our FRA mainline accident ratio was 0.26. For the second consecutive year, Norfolk Southern continues to lead the way for Class I railroads in mainline incident reliability. This progress is not isolated. It is also mirrored in a reduction of non-FRA reportable accidents. These improvements reflect the strategic impact of our intentional coordination of field-level technology, coupled with execution across back-office work scope, process refinement, and field conversion engagement. Combined, we are creating reliable network value by engineering out risk from operations wherever our teams work. This holistic approach to safety improvement is now embedded in how we plan, execute, and manage the railway every day. While we are all proud and encouraged by our safety improvements, we are driven by a relentless drive for continuous improvement. Our enterprise is committed to putting in the work. We know there's more work to do. We are strengthening our stop work authority, reinforcing a speak-up culture, and relentlessly addressing root cause analysis to prevent block crossing and other incidents. Turning to slide six. Throughout the first quarter, the network demonstrated resilience in the variable demand environment we faced. Our focus remains on improving our train speed while maintaining balanced discipline around energy management and service levels, a core operational priority. While shipments were modestly lower year-over-year, we moved 1.1% more gross ton miles, reflecting stronger train productivity and better asset utilization across the network. Terminal dwell improved year-over-year, coupled with continuous focus on executions of the plan. This supports gains in car miles per day. We have been intentional about protecting service and operating the network at a lower cost structure. That discipline is reflected in 8.6% fewer recrews, improved locomotive reliability, and continued reductions in unscheduled train stops. Improved crew scheduling and greater crew availability are supporting stronger crew productivity across the network and a better aligned, qualified T&E crew base, which is down about 6% year-over-year. We continue to strategically recruit and renew our workforce in markets where we anticipate growth. Reliability drives improved productivity in crews, locomotive, and fuel efficiency. Taken together, these results demonstrate we are controlling what we can control, managing costs, improving efficiencies, and positioning the network to respond to the evolving market conditions. Turning to slide seven. At the core of PSR 2.0 is a self-reinforcing operating system, a flywheel where disciplined execution compounds over time. At Norfolk Southern, we know when we run the plan, reduce recrews, and improve network velocity, we create stability in the operation. Stability matters to our people and to our customers. It allows us to deliver our service and utilize assets more effectively, improve locomotive and field productivity, and operate with better energy efficiencies. Operational gains have manifested into the continued evolution of our service plan and its execution. They feed directly back into better schedules, better planning, and more consistent execution. We now have a connected system where every improvement strengthens the next. That compounding effect is how we intentionally build a more resilient railroad steadily over time. Our war rooms continue to translate this discipline into measurable results. The mechanical room has improved detection quality in our wheel integrity systems while delivering confirmed defect identification that directly improves safety and reliability. This is a clear example of technology process and field execution working together at scale. At the same time, our Need for Speed war room is embedding advanced analytics directly into daily operating decision-making. By pairing data science with frontline execution, we are improving plan quality, accelerating decisions, and strengthening the performance across our network. Disciplined execution across the organization is delivering results. In the first quarter, we achieved a fuel efficiency record, strengthening our competitive position in a high fuel price environment while protecting margins. More importantly, it reflects the repeatability of this operating system. Taken together, our PSR 2.0 transformation and operating systems position us to continue to outperform our original cost reduction commitments and deliver sustained progress across safety, service, and financial performance. With that, I'll turn it to you, Ed. Thanks a lot, John, and good morning, everybody. Let's move to slide nine. We closed out the first quarter with significant volume momentum, and this is offsetting a volatile February where severe winter weather impacted our customer car loadings for several weeks. Overall, volume finished down 1%, primarily due to challenging Intermodal market conditions as well as merger-related losses. However, revenue ended the quarter flat year-over-year, and RPU was up 2%, with solid core merchandise pricing and some favorable high-level mix, which were somewhat overshadowed by some puts and takes within the individual business groups, particularly within coal. Within merchandise, volume and revenue increased 1% from a year ago, and this was driven by continued share gains in our chemicals and our automotive markets. RPU less fuel was flat year-over-year within the segment, as strong core pricing was offset by mix interactions due to sustained growth of lower-rated commodities within our chemicals franchise that we've talked about for a couple of quarters now. In our Intermodal business, volumes decreased 4%, reflecting difficult comparisons related to tariff front-running in 2025, as well as impacts from the winter storms in the quarter and ongoing merger-related losses from prior quarters. Overall, Intermodal revenue declined 1%, and revenue less fuel decreased 2% due to these volume impacts, while improved pricing and positive mix within the segment drove RPU higher by 3% and RPU less fuel higher by 2%. Looking at coal, volume increased substantially as higher electricity demand, stockpile replenishment, and a supportive regulatory environment powered our utility segment. Now, this strength was partially offset by reduced volume in domestic met coal. While total coal volume increased 9%, revenue declined 2% as mix headwinds from utility growth and continued overhang of export pricing drove RPU down by 9%. Let's go to slide 10. Here we highlight several dynamic factors influencing our market outlook, including the conflict in Iran, which has obviously driven energy prices sharply upward in the near term. Our fuel surcharge revenue will be the most immediate impact as an offset to fuel expense. Additionally, we're aggressively pursuing volume and revenue opportunities in a variety of energy-related markets, while also monitoring potential impacts to overall consumer demand. Looking at merchandise, we have a subdued but positive outlook for vehicle production due to near-term economic uncertainty on the part of consumers. Manufacturing activity remains mixed, with output forecasted to expand modestly amid the shifting economic landscape. Energy prices and global supply chains will be significant wild cards in the months ahead due to the conflict in Iran. Depending on the duration of supply chain disruptions, we could see near-term opportunities in markets like natural gas liquids, export plastics, and potentially even crude oil. Looking to our Intermodal markets, international volumes are going to remain soft due to continued tariff volatility and trade pressures. On the other hand, retailers have been maintaining lean inventories in response to this macro uncertainty, for which eventual restocking offers some support for baseline freight activity. The truck market has turned relatively positive, with dry van rates trending upward in the first quarter of 2026, and capacity continues to right size while demand is firming. Taken together, we have an optimistic view of Intermodal, although we're tempering that optimism somewhat due to increased competitor activity following the merger announcement. Let's turn to coal, where a combination of global factors is supporting pricing across both metallurgical and thermal seaborne markets. Now most notably, the conflict in Iran is impacting global LNG supply chains, opening the global market to consider alternatives such as U.S.-sourced thermal coal. The utility outlook remains positive, as growing domestic electricity demand and inventory restocking should continue to support Norfolk Southern coal volumes. Okay, let's move to slide 11, where I'm excited to introduce an innovative new short line and transload partnership, which is subject to standard regulatory approval with Jaguar Transport Holdings. Unlike traditional short line transactions across the industry, which have been focused on finding efficiencies and leveraging lower density lines, our new partnership focuses on growth in a high-density switching corridor located in Doraville, Georgia. Our new partnership, which includes operation of both an industrial short line and our transload terminal, will deliver exceptional local service and responsive capacity to customers in the growing metro Atlanta market. Now, here's what I want everyone to take away. This new partnership is just the latest example of our larger growth strategy in action. We're focused on building and executing innovative deal structures that deliver new capabilities and exceptional value for our customers. Look for more innovative solutions and new capabilities in the months ahead as we continue to execute on our strategy for growth. With that, I'm going to turn it over to Jason Zampi to review our financial results. Thanks, Ed. I'll start with the reconciliation of our GAAP results to the adjusted numbers that I'll speak to today on slide 13. We incurred $52 million in merger-related expenses during the quarter, while total costs related to the Eastern Ohio incident were $10 million. Adjusting for these items, the operating ratio for the quarter was 68.7%, and EPS was $2.65 per share. Moving to slide 14, you'll find the comparison of our adjusted results versus last year. From a year-over-year perspective, the operating ratio increased 80 basis points. Inflation and fuel price headwinds drove an approximate 280 basis point increase. However, we were able to mitigate a large part of that increase through productivity and higher revenue per unit. Taking a closer look at our quarter on slide 15, overall costs were up 1% as we were able to offset an estimated 5% headwind from inflationary pressures. Specifically, fuel price alone was $31 million higher than last year and over $40 million higher than our expectations, a phenomenon that really accelerated in the later part of March and has continued here into the second quarter. We have continued to deliver on our productivity initiatives with fuel efficiency and labor productivity, delivering over $30 million in savings. Partially offsetting those gains, we had some volumetric increases that drove purchase services and rents higher in the quarter. To summarize our financial results on slide 16, while first quarter costs were only up 1% and in line with our cost guidance for 2026, the lack of revenue growth combined to drive a modest EPS reduction. While we overcame typical operating ratio seasonality in Q1, we are constantly striving to improve. We continue to refine our focus to unearth other opportunities, and you heard John talk about some of those initiatives as we work towards the $150+ million of efficiencies planned for this year, on top of the over $500 million in productivity we generated over the last two years. Fuel is obviously going to be a wild card the remainder of the year, and we anticipate it to be a headwind in the second quarter. Despite that, we expect to achieve typical margin seasonality from Q1 to Q2. We continue to move forward. John and team are continuing to drive productivity while maintaining a safe railroad with consistent and predictable service levels, and Ed and his team are pursuing high-quality growth opportunities across the entire book. Overall, we're executing to the plan we laid out, focusing on safety and service within a reasonable cost envelope while progressing through our merger application with UP. With that, I'll turn it over to Mark to wrap it up. Okay. Thank you, Jason. You all just heard that we are laser-focused on three fundamentals. First, safety. We continue to make progress through better tools, better processes, and a culture that treats safety as a value, not a metric. Second is service. Our customers are seeing our resilience coming out of the winter weather and getting back to consistent, reliable performance even as volumes increase. Third, costs. We're maintaining tight control, driving productivity, and aligning our expense base with demand as we fight to win volume. Overall, we see a promising story emerging where we can leverage any reasonable volume expansion the market presents with our commitment to control cost, giving us confidence in our ability to drive attractive and profitable growth. Now turning to guidance. Last quarter, we provided an adjusted operating cost envelope of $8.2 billion-$8.4 billion for 2026. I'm proud of how the NS team has handled all the challenges in Q1 to remain on track for our guide, and I remain confident in our cost control playbook. Now while the underlying cost structure remains intact, fuel prices are obviously putting upward pressure on the cost outlook. As you heard from Jason, the price surge in March alone resulted in expenses that were $40 million higher than our expectations. While we are sensitive to the impact the conflict and inflating energy markets are having on people's lives, today it is unclear on how long fuel prices will remain inflated and by how much over the remainder of the year. In light of this, we are maintaining our current cost guidance while acknowledging the near-term volatility and uncertainty on one of our key cost inputs. Our team has worked hard to be transparent with all of you. We will continue to monitor the situation as we progress through Q2 and gain more confidence on where fuel will settle, and we will update you accordingly. Finally, just as a brief update on the merger, we remain on track to refile the application by the end of the month. This revised application will be even stronger in articulating the benefits of creating the nation's first single-line transcontinental railroad. With that, let's open the call to questions. Thank you, sir. Ladies and gentlemen, if you do have any questions at this time, please press star followed by one on your touchtone phone. You will then hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by two. If you're using a speakerphone, you will need to lift the handset first before pressing any keys. Please go ahead and press star one now if you have any questions. Thank you. First, we will hear from Chris Wetherbee at Wells Fargo. Please go ahead, Chris. Yeah. Hey, thanks. Good morning, guys. Maybe one point of clarification, then a question. I guess, Jason, you mentioned normal OR seasonality, Q1 to Q2 Q, just kind of curious what you see that normal seasonality as being, just to clarify. Then Ed, you talked a little bit about competitive activity, I think particularly in Intermodal as it relates to the merger. I guess as you think about that, have we seen most of that happen already? Is that something that maybe still has yet to play out, and is it more than Intermodal, or is it really more sort of contained within Intermodal? Thank you. Hey, Chris. Jason. Let me start with the OR question. Just a reminder first about some of the headwinds that we've got in our plan. We've talked about inflation and some of those year-over-year pressures in that 4% range. We've got lower land sales. Specifically, you may recall we had a $35 million land sale in the second quarter last year that we don't expect this year. We've got to absorb those revenue losses from the competitive merger responses. Now, obviously, we have to deal with these fuel headwinds that are going to continue into the second quarter. That said, you put all those together, all those headwinds, we're really still expecting to be in that normal kind of sequential OR improvement. We think about that at about 200 basis points, and that's really due to all the productivity initiatives that we've got going on. An uptick in revenue from first quarter to second quarter, for sure. This is Ed. To your second question there, yeah, it's really, we think, primarily an intermodal story. It's playing out the way that we've anticipated so far. Frankly, we're doing everything we can to make sure that we're earning everything we can from both the road and from other modes. Thanks, Chris. Next question will be from Scott Group at Wolfe Research. Please go ahead, Scott. Hey, thanks. Ed, I have a question. Intermodal pricing is arguably somewhat cyclical, tied to truck pricing. Coal pricing's volatile. It feels like merchandise pricing has been the constant, and I see merchandise RPU ex fuel flat, and so maybe you'll say it's mixed, but just some thoughts I would have thought or hoped we'd see some better merchandise pricing. Mark, you mentioned quickly the merger, just applications coming next week. You've had months now to gather feedback. Anything that gives you more confidence in approval? Any feedback that gives you concern? Just any high-level thoughts. Thank you, guys. Ed, why don't you? Sure. I'll probably disappoint you because I'm going to say it's mixed, first of all. We've had a good quarter and a very strong track record on the core price here. RPU, of course, is not price. When we see our merchandise book, frankly, I think we're close to a record this quarter for RPU less fuel. It's really about growth in some of the lower-rated chemicals commodities, stuff like frac sand and NGLs, where we've done a really good job of earning new business there. At the same time, we continue to take price very aggressively where we can. I would say that for the most part, I'm really satisfied with where we've landed on core price, and adding incremental revenues through some of those low-rated commodities has been a good thing for us. Yeah. Thanks, Ed. Look, with regard to the merger, I think being out on the road and seeing how this has played out these past handful of months since we submitted the initial application, I'm feeling a lot better. As we talk to customers and understand the concerns, as customers are listening to the opposition and some of the scare tactics, and we get a chance to clarify with facts, I believe we have a really good story. The new application is going to confirm what we said in the original application on the logic of doing this deal and the benefits that a single line transcontinental railroad will bring to the country and to our shippers. In fact, we're going to have a much stronger set of data that actually makes the case even stronger. We feel pretty good about it, and I think right now it's just about trying to get on the clock, and by getting that application in on the 30th, the clock will start running. I feel better, Scott, than I did even five months ago when I felt really good. Thank you. Next question will be from Brian Ossenbeck at JP Morgan. Please go ahead, Brian. Hey, good morning. Thanks for taking the question. Just to clarify with Jason, can you give us the fuel and weather-related costs into the quarter? I don't think we heard the specific call-out here directly. Just to add, maybe going back to the 2026 market outlook, a bunch of the different, I guess, sub-segments here moved to a bit higher vehicle manufacturing, warehouse in particular. Truck makes sense, but maybe you can give a little bit more context as to what you're seeing and feeling in there that gives you the confidence to move those up a notch on your rating scale and maybe how that's expected to play out throughout the rest of the year. Thank you. Hey, Brian. First part of your question, thinking about fuel specifically versus prior year was up $31 million just from price. The really big impact that we're talking about is that difference compared to what we expected. Just in the month of March alone, that was up over $40 million. The price we paid per gallon in March was up 45% over last year, and we really see that same phenomenon happening again here in April. Splitting that up between prior year and then what our expectation was. I'd tell you on storm costs, and John, you can give a little color on this, but that was about $13 million-$15 million in the quarter of costs. John, you can give a little background on that. Yeah. Let's just go to fuel for a sec, because it's not just the price story, it's the consumption story. We set a consumption record that is compounding its value in the fuel efficiency cost levers that we've been pulling through our precision fuel operations all of last year and this year. With the help of finance, operations, IT, everybody, we've got an integrated fuel management system that is giving us value in both how we purchase it, how we distribute it, and of course, how we consume it through our energy management on board. Those are some things that are in a high-cost environment, give us those double coupon values that we can enjoy. As far as the storms are concerned, they were very concentrated. Unfortunately, they were across the whole Eastern Seaboard from North to South. Most of that we were able to work through very quickly, but in a concentrated way. The monies you see there impacted us, and the nice thing for our service is we were able to rebound and push through for the balance of the quarter. Yeah, this is Ed. You were asking about where we have optimism or where the markets are that we think have opportunities. I'll kind of just go around the horn and repeat somewhat I said on prepared remarks and try to get in a little bit more detail. Start with Intermodal. Clearly, there's a reason to be optimistic about domestic Intermodal, domestic non-premium. We've seen growth there despite some of those competitive headwinds that we talked about. I think there's more opportunity to come. When you think about higher fuel prices and what that does to our competitors on the road, it makes Intermodal more compelling naturally. With the good service product that we're able to offer, I think we have a compelling case to make there. International side, I think there's a lot of trade uncertainty still out there. Frankly, when you're comping against the pull forward that happened last year, that's going to be challenged. If I go to coal, we continue to be constructive on the utility side of the business. I think restocking will continue. I think electricity demand, over the medium term at least, is going to inflect upward. We feel good about that piece. Met side, or excuse me, on the export side, I think the U.S. coals are finding new opportunities overseas because of all the disruption from the conflict as well as commodity prices and constraints on sourcing from some of those things. We'll see how that plays out. On the industrial side, I think I mentioned in the prepared remarks that we're exploring actively opportunities that are showing up in places like NGLs, export plastics, as well as possibly even some of the petroleum products that will want to move in the current environment. Generally, we feel pretty good about manufacturing. There's some real signs of life out there, whether you're looking at the economic factors or even listening to various stories. We have, gosh, 400 or so projects in our industrial development pipeline. We're actually starting to see that pipeline begin to move. Last year, it was really held pretty tight, but we've had 12 projects come online in Q1 here, and that'll be worth about 70,000 loads when they're at full ramp. For the full year, we'd like to see a few dozen more of those come across the finish line, and we think we can. All right. Thanks, Brian. Next question will be from Jason Seidl at TD Cowen. Please go ahead, Jason. Thank you, operator. Mark and team, good morning, guys. I wanted to talk a little bit on the Intermodal side. I mean, obviously, there's some competitive dynamics going on impacting the business. One of the largest trucking companies indicated that they're already having inquiries from clients about peak season planning. I wanted to know where you stood with your discussions with customers on that, and then maybe a little bit on the new short line partnership initiative. Is this a one-off, or do you see if this gets approved, replicating this in other regions, and if so, where? I appreciate the questions. They're good ones. Again, I'm bullish on domestic non-premium intermodal for the rest of the year, at least for the foreseeable future, from a combination of factors. First one being, we've seen the supply of over-the-road drivers be constrained. I think that's going to continue to happen. I think I said it on an earlier call that we really need to see demand rather than supply be the thing that pushes us forward. I think we're starting to see that. You look at the price of on-highway diesel and what trucks are having to pay for that, Intermodal is going to be a compelling value proposition for a lot of customers. It's only compelling if we have a good service product, and that's what John and I are really focused on, is how do we deliver that value for customers. I feel pretty good about that piece. In terms of our new partnership with Jaguar, I meant what I said. It's an innovative deal that I think is going to deliver exceptional value for customers. If we can make it work, and I am very confident that we can, we're going to look to replicate this sort of deal elsewhere. Thank you. All right. Thanks a lot, Jason. Next question will be from Jonathan Chappell at Evercore ISI. Please go ahead, Jonathan. Thank you. Good morning. John, I wanted to ask you about two specific cost items and how we think about them going from here. You mentioned the fuel consumption down 6% year-over-year, but also down sequentially. I can't find another time where your fuel consumption was down Q4 to Q1, especially given the weather. Is that the new kind of base we should think about going forward? Maybe not 6% year-over-year improvement, but continue to march lower from here. Then also on headcount, you were in this tight little range all year last year, about 19,300–19,400 employees. Stepped down about 300 employees in Q1. What happened and why is headcount down? Again, is this going to be a tight range where we should be about down 300 every quarter for the rest of the year? Well, thanks for your questions. On our fuel productivity, while I'd like to take all the credit for such a sequential improvement, it is improving sequentially, but there are some accounting adjustments within that fuel number that give us a small benefit. Sequentially, we're improving, and that's really driven by treating fuel as a major cost lever and precision fueling, how we're managing that and how we're driving consumption, improving locomotive reliability, and fuel efficiencies. As we said before, it's a journey, and the program will stretch over several years, and it involves integrating more tech process refinement both in the field and here at 650 West Peachtree Street. It's integral in our strategies. While it is never going to be a straight line and the volatility in pricing is going to have its own aspect, our desire is to continue to march towards the most progressive fuel efficiencies we can get. That's aligned with our locomotive strategies, it's aligned with our conversions from DC to AC, and even found within how we restructure in our zero-based plan model and continue to have a relevant plan rather than a historic plan. As far as labor productivity is concerned, we're benefiting from fewer recrews. We've restructured our starts. Last year, our zero-based plan affected approximately 200 train starts and train revisions. This year, we have another pipeline of similar scale, and we'll continue to create predictable schedules. That helps because as we restructure starts, while it's being driven by volume and workload and held in place by zero-based plan, it's really focused on lowering held away, better using crew accuracy, lineups for crew rests and crew cycles, and those manifest into a more productive workforce. Our qualified count is really about not chasing the curve. It's about focus on retention, the accuracy of our new hire pipeline, and our training and onboarding to better position us to absorb growth with the best existing resources. Our pipeline is always active. We're recruiting the best people we can find, being very selective and giving them the benefit of a very robust and precise training program. Lots of work to do there, but we're exercising labor productivity and workload so that we can maintain our service structure and give our customers the best experience we can. I guess I would just add, we're really not just hiring to some aggregate number. We've got some 90 different crew bases across our network where people have to be qualified to operate in those specific districts. We have to monitor the demographics of each of those crew bases when we expect to see retirements come and get ahead of those curves, because it takes about six months to hire somebody, train somebody, qualify them, and expecting some attrition to happen during that process as well. We got to do that for 90 different crew bases. Now, some we've got cushion. Others we're in deficit because they're in locations where employment is full and very difficult place to hire. There's a lot of work that goes in to make sure that what productivities we're going to be driving across the network, so that allows us to absorb attrition versus when will volume come. It's a real delicate balance to determine the level of hiring for which location six months in the future in a very uncertain demand environment. I think right now we're doing well, but I will tell you it's probably the single biggest debate we have internally is the level of hiring we need to do based on the market outlooks. All right. Thank you, Jonathan. Next question is from David Vernon at Bernstein. Please go ahead, David. All right, David. David, we need your line. Question? Oh, sorry. Problem with the mute. I guess, Ed, as you think about the growth prospects for export thermal, if that were to kick in, can you kind of help us understand what the range of possible outcomes is there from a volume and also from a yield perspective? Would that be additive to RPU, negative to RPU? How do we think about the potential for a pickup in export coal affecting the revenue outlook for you guys? Yeah. Export thermal would be helpful to our RPU mix. The first quarter got hurt by winter weather. It was hard to get out of the ground, hard to move it, and hard to dump it. I think we're going to see that rebound, particularly if the conflict in the Middle East continues, there's going to be more markets open up to U.S. coal. Yeah, I'm optimistic about it, and it will be helpful. Thank you. All right. Thank you, David. Next question. Next question will be from Richa Talwar at Deutsche Bank. Please go ahead. Hey. Thanks, gentlemen. Yeah, I wanted to talk about costs. The 1% cost increase despite 5% inflation. Maybe you can talk about initiatives that you're focused on to keep that cost trajectory going. You gave us a lot on headcount and stuff and fuel efficiency, but maybe talk about some of the other buckets where you're seeing the most success, what hasn't been done that you think there's more potential for. That's on the cost side. Ed, I would love to hear. I think you said you feel really good about manufacturing picking up, and you've heard some anecdotes from your customers. I know you talked about the success you're winning on projects and things, but I'd love to hear maybe more broadly what you're sensing from the macro backdrop and what that hands to you. Thanks. Yeah, I'll start on the cost side. You point out I'd say pretty good cost control we had here in the first quarter, up 1% with 5% headwinds from inflation and fuel. It's really driven by a couple of things. We have a really good track record that we've shown over the last 2 years of getting about $500 million in productivity. We've got a lot of projects and initiatives in the hopper to hit that $150 million+. For the first quarter specifically, and then I'll turn it over to John to talk about what we're working on the remainder of the year. Just from fuel efficiency alone, we, last year, improved 5%, the year before that 3%. Now, first quarter, we're hitting all-time first quarter records, so really strong performance there. We will continue down that path. Labor productivity continues to be one of our biggest components, where we've really benefited quite a bit over the last two years. As we've talked about in the past, not just T&E productivity, but really labor productivity across the board. Yeah. Jason, you hit on that disciplined approach to this, and we're committed to it. We've adjusted our budgets accordingly. It's across all streams. Productivity, obviously, we started in T&E. Our zero-based planning through 2025 and the version three that we're undertaking in 2026 is giving us a benefit on crew starts with a focus on continuing to create our own capacity through weight and train length that give us the opportunity to really make the best use of our infrastructure. From the T&E, there are incidental costs that come out of that with running a more resilient railway, and leveraging our portals with fewer train starts, more mechanical resilience, better locomotive capability. All of those things flow through to purchased services and others. A big focus on our next generation of purchase service and enterprise resource management and the discipline around those major purchases, and fuel is going to continue to be a big driver of that. I'm really proud of what the team is doing on safety. Significantly lower incidents and accidents, even above and below the FRA reporting threshold. That's giving us the ability to really drive the plan, have accountability where our cars are, have more accuracy on when our trains arrive and depart. That gets us lower equipment rents, that gets us into better locomotive turns, better locomotive utilization. There's significant value in those things. It is really working the fundamentals with projects that are coming online and really driving big benefits. It's small wins and big wins put together that are going to really create the flywheel that we've got that's creating the improvement. Very good. Thanks, John. Thanks, Richa. Okay, next question. Ladies and gentlemen, a reminder to please limit yourself to one question. Thank you. Next will be Jordan Alliger at Goldman Sachs. Please go ahead, Jordan. Yeah. Hi. Morning. Just wanted to come back to, I know you've talked a lot about the Intermodal service, and that's a key focal point. I was looking at your network update slide, and it looks like the Intermodal service composite's been sort of 85%, which is off from the high of low 90s%. I guess, is that weather-related? Is it temporary? How do you address that? In your view, do you need to be above 90% to start getting market share back? Thanks. Well, let's talk about market share, but if you've heard me speak on these calls, I'm never pleased about any particular metric. I am pleased that sequentially, we're pacing slightly ahead of where we were last year at this time. It's not just the average. It's really getting down to the lane, getting down into the customer, the important commitments that we've made to our customers and their product view and their sorting view and the end-to-end capability that we're building in them. Yeah, I would love to be a higher number. I'm striving to be a higher number. Sequentially, very pleased that we're seeing that improvement. My job is to give Ed every opportunity to walk into any customer with good service in his back pocket to negotiate our market share. Yeah. Thanks, John. Look, I think we will have a better number, and I know you're working on it. Look, you nailed it, John, when you said that we focus at the lane level. There are some lanes that have a lot of potential. Some lanes have some potential. Where we have a lot of potential, and we have very good data on that, we're very focused on delivering an exceptional service product. That's what you and I talk about every single day. That doesn't necessarily manifest itself in an average. I can tell you right now that we're laser-focused on those lanes and those opportunities where we have a lot of potential to take traffic off the highway and deliver a very good service product for them. Thank you. Thanks, Jordan. Next is Tom Wadewitz at UBS. Please go ahead, Tom. Yeah. Good morning. Mark, I want to refer back to the fourth quarter call. I think you were maybe somewhat fresh off the share shift in intermodal, and you had some fairly aggressive comments, I think, on just competing in the market, and you were going to compete hard in the market. What do you think the competitive dynamic is like among rails in the East? It seems like there are puts and takes. Maybe you've got a little growth in chemicals, autos, maybe a little less rail share, I'm not sure. Then they've got some Intermodal. How do you think about that? Is it pretty stable? I think on the international and domestic, is there a share shift in international? That's just completely like for like customer and, I think, Ed, you talked about just the weakness in international being maybe just demand driven but not share shift. A couple thoughts on competitive dynamic and then just share at international Intermodal. Sure, Tom. Thanks. Good question. Look, obviously following the merger, you saw a flurry of new alliances taking place with our eastern peer and western peer and some of the Canadian railroads, and that has obviously had some level of impact on us. It's enhanced competition, frankly, just from the mere announcement of this merger. We talked about some of the losses that we've had, and that we're going to continue to fight like heck to retain our share and fight in other areas to gain, to offset some of that. That's what the team's been doing. They've been doing a great job, I think, competing. Look, I think you have to step back. This North American rail network is running pretty damn well. All the railroads are operating well, and they're all offering very good competitive products, which is really great because we are an integrated supply chain, and we cheer on the other roads to have good service because we all interchange with each other. Half of our volume interchanges with another railroad, so we don't want anybody to be in a bad service situation. It's not just us. We want everybody to be good, and they are all good right now. When it comes to the competitive offering, I think the product that John and the operations team has put out there has been really good. It's been really resilient. I think we're doing a good job on the commercial side as well, being more responsive and working to solve problems with our customers. I feel really good about our competitive position right now, I do, in pretty much all the areas. I think the challenge we have on the international side, there's a lot of uncertainty going back to tariffs of last year. There's been probably some inventory depletion that's taken place, and it hasn't seemed to really fully started to restock yet. International's been relatively weak. Not sure when that's going to turn around. Domestic, on the other hand, for other dynamics, I think given the cost profile with what fuel is doing to truckers, we feel pretty good about being able to start taking some share off the highway. Ed, why don't you talk a little bit more? Sure. I think you kind of nailed it. We believe that the product we're delivering is very competitive in the marketplace. You're right, Mark, we want all of our rail competitors to be very strong because oftentimes it's hard to get customers to discriminate between ourselves and other railroads. We're all just one big railroad, and that's true in many cases. We want strong rail competition. We're really focused on the highway. The competitive landscape continues to be very competitive. Frankly, higher fuel prices are probably helping us deliver additional value for customers across the board, particularly on the domestic Intermodal side. Yeah. We've seen a little bit of share shift, as you alluded to. Some of it's a competitive response, some of it's just more book diversification. We continue to work on how we can improve our position. I'm really proud of the team and what they've been able to do. Okay, thanks a lot, Tom. Next question will be from Walter Spracklin at RBC Capital Markets. Please go ahead, Walter. Yeah, thanks very much, operator. Good morning, everyone. My question is for Ed. Taking a little more high level on the freight recession, we're hearing a lot of commentary from your counterparts in trucking that is outright saying, this recession's coming to an end, but your peers in railroads seem to be a little bit more conservative in terms of making that call. Is this just a supply side thing where the new regs have driven better pricing for trucks, and that's what's causing that more positive view? Or I know the trucks have talked a little bit about higher demand in some of the industrial verticals. Just curious if you're seeing any green shoots on the demand side outside of truck pricing or just your own pricing that is suggesting that the freight recession might be finally coming to a bit of an end here. Look, real good question. I think I'm probably talking to the same folks you are when it comes to trucks on the supply side. There's a few uncertainties out there and a few parts of the equation that haven't been solved yet. The first one being, what's going on with housing and interest rates and inflation. Those are three big factors that I think really need to resolve themselves before we can declare anything over, so to speak. At the same time, we see the IPI come up. We've seen manufacturing for, I think, three straight months now be above water. We see some strength in the auto industry, both in terms of demand as well as supply. There are some green shoots, and we are cautiously optimistic about certain segments, but I remain vigilant on those three factors that I think really need to come around before we could say we're out of the woods. Yeah. I think to call an end to the freight recession may be a bit premature, but I think for us to be able to start taking share from highway, fuel prices are going to help that. That's a little bit of the optimism you hear. Some of the green shoots we see in industrial production, which usually has a six-month lead time, it gives us a little bit of optimism that maybe there's something there brewing. I think, Ed, you would say that when it comes to manufacturing, we're not necessarily seeing it yet. Yet Except for some of the components that go into manufacturing, those are areas like plastics and- Mm-hmm ...some metal components. We're starting to see some growth there. We're not calling an end to the freight recession, but we're saying there's green shoots. We'll keep an eye on it. All right. Thank you. Last question, right? Next is Brandon Oglenski at Barclays. Please go ahead, Brandon. Sorry, Mark, you got one more from me. Yeah. I'll keep it pretty short here. Jason, can you just help us, and maybe you already addressed this, but the average sequential OR change that you guys would view it in Q2, maybe just at a higher level. You guys have been working towards more safe outcomes and everything, I get it, but the operating ratio has been moving maybe in the wrong direction. Should we be thinking, though, if that freight market is turning, that there's a lot of potential for incremental margin here, too? Yeah. Absolutely. No doubt about that. We've got the capacity to move all this volume. John and the team have done a great job from a service perspective and making sure we're ready to handle it. We've got the resources in place. To your point, because of that capacity, when this comes through, it's at really good incrementals. I think he just wanted to hear the sequential margin improvement. You would think a couple points. Yeah. About 200 basis points of sequential OR benefit from first quarter to going into second quarter. Thanks a lot, Brandon. Look, I think just to kind of recap a little bit here. We told you at the beginning of the year that we were focused on preserving safety, maintaining service, and controlling costs while we were going to fight for every dollar of quality revenue we could. We did exactly that in the first quarter. Revenue being flat was lighter than we hoped, but we are more optimistic on the top line as we enter the second quarter because there are some signs of life emerging in the market. Now, that said, this is a very dynamic world with an awful lot of crosscurrents. We've just got to keep an eye on that. Let's keep an eye on those weekly volumes, and that'll give you some indication of how things are shaping up. We got a tight grip on costs right now and real good momentum on productivity and efficiency. We're going to carefully balance all of our resources so that we're able to move the volume when it comes, while we continue on this never-ending drive for productivity and efficiency. Regarding the merger, we're going to submit our revised application here on the 30th. Like I said before, the rationale is the same, but the depth and the quality of the data in the application considerably strengthens our case. Look, when you step back and look at it, our customers, our supply chains, they're increasingly national and global, but our U.S. freight rail network is fragmented. A single line transcontinental network is going to simplify service, reduce interchange complexity. It's going to allow freight to move more efficiently, more safely, and more reliably from origin to destination. That's what this is about. It really is going to deliver a very compelling proposition for more customers to choose rail over highway. Ultimately, I think that's good for the country, and it's good for everybody. Thanks, all, for your participation in today's call, and stay safe out there. Thank you. Thank you, sir. Ladies and gentlemen, this does indeed conclude the conference call for today. Once again, thank you for attending. At this time, we do ask that you please disconnect your lines. Have a good weekend.