Canadian National Railway Company

Good afternoon. My name is Julianne and I will be your conference operator today. Welcome to CN's fourth quarter and full year 2023 financial and operating results conference call. All participants are now in listen only mode. After the speaker's remarks, there will be a question and answer session during which we ask that you kindly limit yourself to one question. I'd now like to turn the call over to Stacey Alderson, Assistant Vice President, Investor Relations. Ladies and gentlemen, Ms. Alderson.

Thank you, Operator. Good afternoon, everyone, and thank you for joining us for CN's fourth quarter and full year 2023 Financial and Operating Results Conference Call. Before we begin, I'd like to draw your attention to the forward-looking statements and additional legal information available at the beginning of the presentation. As a reminder, today's conference call contains certain projections and other forward-looking statements within the meaning of the US and Canadian securities laws. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied in these statements. They are more fully described in our cautionary statement regarding forward-looking statements in our presentation. After the prepared remarks, we will conduct a Q&A session. I would ask that you please limit yourself to one question so we can get to hear from as many of you as possible. The IR team will be available after the call for any follow-up questions. Joining us on the call today are Tracy Robinson, our President and CEO, Pat Whitehead, our Chief Network Operations Officer, Derek Taylor, our Chief Field Operations Officer, Doug McDonald, our Chief Marketing Officer, and Jislan Ul, our Chief Financial Officer. It is now my pleasure to turn the call over to CN's President and Chief Executive Officer, Tracy Robinson.

I want to start today by welcoming Derek and Pat to their first call. It's great to have you guys with us. And I also want to extend a warm welcome to Remy, who's out in the field today, immersing himself in the operation. You'll all have a chance to meet him over the next few months or so. Doug remains in charge of our commercial organization and our growth efforts, and he is, of course, here today with us. Doug will be retiring this year. And there'll be a little more to say on this at that time, but I very much appreciated, Doug, your presence and partnership over the last couple of years. And I know that Doug will do a great job in getting Remy set up with our commercial team. Now, this transition later this year will be seamless to both our customers and our employees. We are railroading here for the long term, and we're fortunate to have a lot of very strong and experienced talent at CNC. And we're going to supplement that now and again with different backgrounds and perspectives. And this is going to make us even stronger, which is important as we continue to refine our path forward and advance our growth mandate. And we're also taking a long-term approach when it comes to our network. We know that our network has always been core to the CN Advantage and to our ability to provide our customers with solutions for their businesses. Where it makes sense, To add to our network, to position us to do more or better of this, we'll do so. Now in the fourth quarter, we closed on the CB&S, which will give us more opportunities to densify the eastern part of our network in coming years. And in December, we signed an agreement to purchase the Iowa Northern. It's a nice addition to our network in the Midwest. It will give customers in that area better market access. And for us, it will deepen our network reach and boost our ag business. So I want to welcome those who might be listening in for the first time today to our railroad family. We do expect to fully integrate the Iowa Northern property later this year, pending a positive outcome of the STB review process. Now before I ask the team to get into the details, I'll just recap where we are. And I'll start with safety. We ended the year with some meaningful improvements in both our accident and injury frequencies. And I am very pleased with both the work that has gone into this and the impact it has had. And we're going to continue those efforts. This will be a relentless drive to zero. And on the operation, we came into the fourth quarter a little battle-hardened after a couple of difficult quarters last year, where we managed through a freight recession and a number of external shocks. And in Q4, we had the gift of some kinder weather, and our operations team took full advantage of it. posting some really strong on-time and velocity metrics. As we rounded the corner into this year, we kicked off with some extreme winter temperatures across the network. But as we lived out of that, the team is well on their way to getting this place back to that same level of operation. Whatever comes at us, we know that sticking with this model will ensure resiliency, enabling us always to perform at our best. Our full-year car velocity, for example, and this is including the challenges of the second and third quarter, was 213 miles per day. That's a 9% improvement over 2022. We're running a plan. We're getting more out of our assets, and this is driving some very consistent service levels to our customers. A strong, consistent, resilient operation is table stakes in this industry and the necessary foundation to move the economy and for us to deliver our growth agenda. At the end of the day, this is about doing what we say we will do. We have a plan, and we're executing it. We've been building up our track record operationally over these last seven quarters, and I think I speak for the entire team that it feels really good to have that CN group back. Turning to our quarter and full year results, I'll keep it to just a few highlights. Our fourth quarter adjusted ETS was 4% lower than last year. and our operating ratio was 59.3%. For the year, adjusted EPS was 2% lower, and our operating ratio was 60.8%. These are the kind of results we can be very proud of in a challenging environment. And we said last quarter that we'd seen the bottom in volumes, and this has played out as we expected. We've seen sequential improvement, and our Q4 RTMs were up 10%. Now, there remains question marks on the economy as we move into 2024. We're expecting a continued improvement as the year progresses, and just now we'll give you more details on all of our assumptions. But beyond the lift from a strengthening economy, we're also working our growth initiatives that leverage our network, our strong service, and our customer and supply chain partnerships. And these are starting to bear fruit, and in some cases, more quickly than we planned. Doug will give you some color on this. And you'll hear Pat and Derek review the state of our operations, and we're ready for the volumes to start to lift. This gives me the confidence in our EPS guidance of approximately 10% growth over 2023. I'll now hand it over to the team to fill out the details. Pat, you're up.