Canadian National Railway Company (CNR) Earnings Call Transcript & Summary

All right. Good morning. Welcome back to day 2 of the Industrials Conference here at JPMorgan, kicking off the transports track early this morning with Canadian National. So I'm Brian Ossenbeck. I cover transport logistics for JPMorgan. Excited to have Ghislain Houle, who's the CFO of Canadian National; and Stacy Alderson, who's Investor Relations, up here on stage with me. So we're going to skip it over to Ghislain for a little bit of opening comments, then we'll get into Q&A. And if you've got a question in the room, you can raise your hand, and we'll get a mic to you as well. But thanks very much, Ghislain. Appreciate being here. Over to you.

Thanks, Brian. And listen, I mean, we're happy to be here in New York. Yesterday, it was a beautiful, beautiful day here, 19 degrees, I think, Celsius, a little bit better than up north in Canada. Thanks for being in the room, and thanks some people on the webcast listening to us and taking interest in our great company. I'll make Brian, a few comments, and then obviously, we'll go to your questions and you've got good questions that investors are going to be interested about. I think that I would be remiss to say that there's a little bit of noise in the environment right now. There's a little bit of noise. The headlines are changing every day. You read the headlines in the morning. They're different than the headlines in the afternoon. But we remain quite bullish on 2025. We're happy that we will get labor stability versus the last 2 years. If you remember, we had strikes on the longshoremen and then our -- the railroads on strike in 2024 and then strikes in the longshoremen in 2 years. So we will get labor stability. I think that -- when you look at it, I think we feel very comfortable we'll be able to grow our volumes over and above the economy. I think that our customer service has never been that great with our scheduled railroading model, and therefore, we'll be able to price above rail inflation. And we're very comfortable we will deliver operating leverage in 2025 versus 2024, especially with all these one-timers we had last year and so on and so forth. When you look at the year and the way that it started, I mean, January, and we give you volumes in terms of RTMs and carloads, you will know that volumes have been very strong in January. February has been a bit tougher. I'm not going to complain about the weather. I mean we are in Canada. We are the railroad of the North, and winter shows itself, and it did. Last year, we had an easy February. This year, a little bit tougher. But -- so our volumes were up 11% in January, down 14%. There is a backlog out there. We are recovering in March. I mean our volumes -- Stacy was telling me that our volumes are up 7% or 8%, Stacy. So there is a backlog. We have recalled some of our conductors. If you remember in the Q4 call, we said we had furloughed 750 people. We've recalled some of them, and I'm happy to report that the recall rates have been very good. When the qualified conductors recall, success rates has been 90% and the trainees has been 75%. So we are picking up the recovery. We hope -- and I think we will deliver a great March, and therefore, we will deliver hopefully, a good Q1. And when you look at overall, the volumes over the year, we said that our assumption was low to mid-single digit. Half of this will come from CN's specific growth initiatives. And Stacy will give you a bit -- I know you have a question on this, and Stacy will give you a bit of proof point on these growth initiatives. On tariffs, I know it's on everybody's mind. And again, it's back and forth. I think what I'll say is at the end of the day, we -- our guidance of 10% to 15% EPS growth, we've done tons of different scenarios in and around tariffs. What we have not assumed is that tariffs would bring Canada to go to a recession or the U.S. to have significant impact on inflationary issues in the U.S. due to tariffs. We have not assumed that. But everything else, we're very confident with our guidance of 10% to 15%. And we're looking forward to deliver in terms of normal operating conditions, which we have not seen in the last couple of years and demonstrate to investors that this team can execute and deliver on what they say they do. I don't know, Stacy, do you want to add anything or?

That was a great opening. I think we should get to questions.

Say that again.

Great opening.

It's on record.

On record.

Okay. Well, maybe just to start with, you mentioned winter always comes, but there's also supply chains that you're connected with and partners with as well. So maybe just to start with that, how is the fluidity in the network? How is the recoverability? And if you're going to use resiliency as well, like how is everything bouncing back relative to?

It's bouncing back. I mean snow does not impact railroading as much as cold. You know this if you've been following us for many, many years. Cold, when you have a sustained cold weather, minus 30, minus 35%, then you just cannot have the brakes because, again, air brakes, it's air breaks. So you can't push the air. So you've got to reduce the size of your train. And therefore, in many cases, you've got to double the number of trains to move the same amount of volume. So we've had a little bit of that in February. January was okay. But as the weather is breaking, I think that now we can see the fluidity coming back. I mean when I look at car velocity, I mean, car velocity was in the 190-ish per day. Now it's up to 210. So car velocity, dwell is down. So we're getting -- and it's not only us, it's the supply chain, to your point. It's -- some of our customers are getting out as well. They're more fluid. It's easier for us to go and spot the cars, get the cars out and so on and so forth. So this is just regular Canadian winter. It is what it is. We've seen it for 50 years. We'll see it again. I'll probably retire by the time we don't see it again. But I mean, we're -- we're just running much better than we did in February. Believe it or not, I mean, in Canada, and I'm not complaining and I'm not defensive, there were two earthquakes in Western Canada, earthquakes. So we have earthquakes now in Canada. So if people don't believe that climate change is actually happening, it is happening. We've had forest fires in Western Canada in the summer, as you know, for the last 3, 4 years. So now we're trying -- we're starting to model this thing because I'm telling Tracy, listen, we've modeled operating conditions in the winter for 50 years. Now we need to start modeling stuff happening in the summer because it has happened. So -- but we are an outdoor sport. I think we're -- I think for long haul, we're much better than trucking from an environment standpoint, but also from an efficiency standpoint. And so to answer your question, long answer to your short question is our operations is doing much better. Car velocity is up and the railroad is running pretty well. And our operating model, and I want to reemphasize this, the scheduled operating model, starting the trains on time is key. And since Tracy has joined us, and she made that very, very clear, start that train on time, even if it's a small train, then we'll work to build that train up. That's the right operating model for CN. And it's working out. And by the way, I mean, when we had issues in February, Stacy, we were able to pick it back up very quickly, much more than if you push on long trains and instead of -- because that's the conundrum. It's long trains versus starting your trains on time, and that's the right operating model for CN, and it shows its benefit.

It's cold when it gets cold enough where it's the same Celsius and Fahrenheit in the...

At one point, minus 35, then it's the same. And at that temperature really, the reality is you're not even moving. You're not moving. So what the guys are doing is they park the trains at night. They wait until the sun gets up in the morning and then we rush to move the trains. But listen, it is what it is. I mean, this is Canada and Winnipeg, you should go there in Winnipeg in January, February, it's a lovely place. It's a bit cold.

It definitely is. Well, just to finish with the short-term stuff, it sounds like if we look at seasonality for the first quarter, it's hard to say what seasonality has been in the past, just given COVID and all the dynamics. But it sounds like you have a little bit worse weather, but things are recovering. So all else equal, it sounds like kind of a normal first quarter -- from a fourth quarter perspective.

I would say so. I would say so. Listen, I don't want to complain about the weather because I've seen it. I've been there like you have your beard, but it's not gray like mine. So I've been here a few years. I think that stuff happens. I think that I'm looking forward, like I'm very -- I'm quite bullish on March. March has been quite good so far. And we've got all heads on deck, and we want to deliver a good quarter. We want to show the markets that we can deliver under normal operating condition. And this has not been the case, unfortunately, in the last little while. That's what we're -- that -- and under Tracy's leadership, everybody is focused on delivering the results. And that's what we want to do, and I'm confident that we will do that. And then we start the year strong. We start the year from the front tees, not the back tees. And then as you know, we have easier comps coming up, but we want to show that we can execute and we can execute on what we told the markets we say we're going to do.

So you did touch on tariffs a little bit earlier just to come back to that because I'm assuming it's having some impact on shippers and what they're trying to do, what they're planning for in all the different scenarios. So maybe you could characterize that a little bit. And then if you can give a couple of examples of the end markets or commodities that you're most focused on that could have a bit more volatility.

So Stacy here can jump in. I didn't bring her just for fun here, so she can jump in. But everybody is kind of on pins and needles related to this. So far, I must say we have not seen dramatic changes in traffic flows. We have not seen dramatic changes in customers' behavior. But like I said, everybody is on pins and needles because we don't know. I mean you get up in the morning and okay, so I didn't know this. And -- or yesterday, you and I were talking, Doug Ford puts 25% of surtax on electricity, then Mr. Trump gets pissed off, puts 50% tariffs on steel and aluminum, then they back off. So it's back and forth. Now I'm going to say this, and then I'm going to turn it over to Stacy. There are some natural shock absorbers out there. I mean if you look at the Canadian dollar, Canadian dollar, since the threat of tariffs have gone down. Last year, we were around CAD 0.74, CAD 0.75 to U.S. Now we're about CAD 0.68, CAD 0.69. So that makes Canadian exporters more productive. Fuel prices is another. Fuel prices, WTI was USD 74, USD 75 per barrel. Now it's like USD 65, USD 66. So there are natural shock absorbers. But clearly, the markets, and you saw the Dow yesterday came down again another 2% or 1.5%, 2%. The day before was another 1.5%, 2%. So the markets don't like uncertainty. I think that's the biggest issue with all of this is it brings uncertainty, and we just don't know what's going to come up next. And it looks a bit emotional as well, which is never good for business, like emotions is never good in business. but Stacy, do you want to jump in on some of this in terms of specifics?

Yes. I think day-to-day, like your point is even week-to-week, customers are making decisions. We have some end markets like in the metal sector, steel, where they're turning shipments from Canada to the U.S. on and off kind of based on the news of the day. So -- and then we have other areas like aluminum where our customers are telling us they'll continue to ship. They're still able to be competitive even with the tariff. I'm not sure about the 50%, but certainly the 25%. So it's kind of a mixed bag of reactions. But I can tell you that our marketing team is working very closely with customers to have those discussions and have alternative gateways or options for them to explore.

I think at the end of the day, I think we're very confident with our model. We're very confident with our guidance. I think if something really unfortunate happens. It won't be a CN problem. It will be a world problem. It will be something that will affect a lot of companies, a lot of people. We're very -- I mean, we have our game plan. We have our CN growth initiatives that customers have invested a lot of money. So they're going to use it, and Stacy will give a few examples when you get to that question. But I think -- and then our cost containment efforts are working very, very well. The team is gelling. You said to me that you met Remi, our new Chief Commercial Officer. We're very ecstatic to have him. He's a great guy. He's doing very, very well. He was the CEO of a lumber company before, and he's taking Doug McDonald's place, and he's done -- is doing well. He's in front of our customers. I think he's going to be in Dubai next week and other places to meet customers. So Tracy is doing a great job in making that team because at the end of the day, what it's all about, especially when you look at companies, it's about people because you can have the best infrastructure in the world, you can have the best tracks in the world. If you don't have the right team and the right people to convert the value of these assets to value to shareholders, then you have nothing. And I've seen great teams, and I've seen not so great teams in my career. And I can tell you that we have a great team right now, and I'm ecstatic to be part of it.

Just real quick on the uncertainty with the stop and start of the tariffs. Has that affected operations to any extent? Or how is the team working through that?

No. I think that, as I said, there's a backlog related to the fact that we couldn't move all the traffic that we had. The demand continues to be strong. Demand continues to be strong. I mean -- and there's a backlog. And when I look at like the operating guys, like we talk RTMs, revenue ton miles, the operating guys call GTMs, gross tonne miles. And the difference between both is one is a load and the other is the operating guys says, well, you need to move the empties. So the GTMs is the empties. When I look at the last, what, Stacy, 2, 2.5 weeks, the GTMs have been up 1.4 billion a day. I haven't seen this for a long time, okay? Like it's good when we do 1.2, 1.3. And they've been able to do this with still about 600 people that are furloughed. So it's unbelievable what they've done. And we just had a Board yesterday, the day before. I said it's unbelievable what they're doing. And they're managing this. And I know you have a question on these work rest rules. And they've been able to manage this despite work rest. And you know these work rest rules have an impact on crew availability. So it's been quite remarkable. We deferred management -- we have 120 management positions to fill up, and we've deferred it because we want to protect the -- so we want to control our costs very tightly because we want to protect the downside. We want to make sure we hit that. We will hit that guidance. Trust me, we will. And then I'm telling Tracy, well, 120 positions that we've been able to defer, maybe we don't need 120 positions. We have to look at this very, very closely. Maybe it's not zero, but maybe it's not 120. So we will look at this very closely. So we're managing our costs very closely. Same thing. I mean, if the guys can produce 1.4 billion GTMs with 600 furlough, then maybe we don't need to recall all of these people. Again, we have attrition. So -- and we have quite a bit of attrition. So maybe you bring them up as attrition happens. But we can be way more productive than we believe is my view. And we have a tendency to be a bit scared and a bit tiptoeing and so on and so forth. But I remember, I mean, I used to -- was a young treasurer and debating with an analyst from Moody's, top guy from Moody's when we were 70 OR, 70 OR and he said, you can -- and everybody else was 85. And he said, you will not be able to hold 70, it's impossible. And I didn't push back because I was young and I didn't know. And look, we're not even happy with 60 or 61 or whatever today, and we believe that we can move it down. So I think that we can be way more productive than we believe.

So on the work/rest rules, as you mentioned, that was a bit of a challenge, I think, this time last year, maybe a little bit in the spring as well. So maybe you can bring us up to speed on that because it was fairly disruptive and where do you stand in terms of all the negotiations that have been -- since then, do you have a pretty good visibility and labor stability.

It was -- you remember, Brian, work/rest rules were implemented by the government in May of 2023. We did not have an issue with them at the time because they were already taking -- addressed into the collective agreement. The problem was the unintended consequence that these work/rest rule became stacked up over and above what's already there. So when you look -- and we said to the market, this will have an impact of about $100 million. And when you look at it, that was a problem. That was a problem. Now we're working to help our -- we're working to help ourselves. We have a couple of local agreements that impacted some of the crew availability. So we've canceled those. So -- because the impact of the work/rest rules is really crew availability. So -- and we're working to do that. And I would say I would finish on this is I would say that now we're lapping a full year effect of those work/rest rules. So if anything, the worst is behind us. I think that going forward, I think, if anything, you will get some betterments related to this. And by the way, the conductors and locomotive engineers, they don't like it either because with the work rest res, they have to spend more time away from home. because now they have to rest. And so they don't -- and they make less money because they paid by the miles. So they don't like it either. We need to find a solution to this. I think the worst is behind us. And hopefully, we help ourselves on crew availability going forward.

So it wasn't just CN and the Canadian rails with labor issues that hit the ports as well. That's right a couple of times. So now that hopefully, all that's done or at least in arbitration in some cases, what are the conversations with BCOs and the ocean carriers as they look at the, I guess, specifically the Western Canadian ports and establishing those calls, and I think Gemini is going to start ramping up here before too long.

That's right. I think there's no -- I would be lying to say that the Canadian supply chain has not been hit a little bit in the last 2 years with those Definitely. So I think that Remi and the team and everybody is going out there and selling the supply chain in Canada back. I think that right now, we do have labor stability. I think that the conductors, locomotive engineer, to your point, will have an arbitrated deal. Hopefully, it will be a long-term deal. I'm happy to report that we just signed the signals and communications guys. We signed Unifor. These are the people that are at the auto compounds and intermodal, and we signed them actually before the agreement actually expired, which is unseen of. So I think 2025 will have labor stability. Now there is geopolitical risk. We talked about this all over the place. But as I said, it's not going to be a CN issue. It's going to be a world issue. if it is an issue. I think that we're well set up to deliver. I think that people are coming back in Rupert. I mean when you look at it, and Stacy, correct me if I'm wrong, Rupert has a capacity of 1.6 million. We did 1.2 pre-COVID TEUs per year. Last year, despite all of the noise, we did 700,000 to 800,000. And we've been quite conservative. We've modeled that we would do about 900,000 TEUs this year. That's in our guidance. And I'm comfortable that we will do this even maybe probably a little bit better. So I think things are coming back to your point, the Gemini service is coming back. There is -- and I know you have a question on this where there might be a tax on port of call for China built ships. And I think your question...

How will that affect the -- will that be a benefit?

That's right. So would that divert some of the business from U.S. West Coast port to Canada? Maybe. I don't think it would be long-lived. All I need to say on this is that we have not modeled. So if there is some diversion and we have some benefits related to this, then that's going to be cherry on the cake. We have not modeled for any of this. I don't know if you want to add anything. I've been talking a lot.

That's okay.

Yes. Maybe we can talk a little bit about the CN-specific initiatives.

Yes sure.

Because obviously, there's quite a bit of uncertainty elsewhere. So where do you have a bit more visibility in like said money being invested.

I'll give a couple of examples, maybe one in each of the regions. So in the Eastern region, as we've spoken about before, we have the new Toronto fuel distribution facility, which started up in May of last year. So this is actually a customer that invested $100 million plus. It's a rail to truck transload there for refined fuels like gasoline and diesel. We saw a couple of thousand carloads last year. Obviously, we'll have the full year effect of Phase 1 this year. And then we have Phase 2 that's going to come on board probably at the end of Q3 this year. So that's, again, a substantial customer investment with years and years of volumes attached to it. And then maybe if I go to the U.S.

There was a first phase, but I think now we're looking at the third phase. I mean there's -- so this thing had a first phase to $100 million, then they invested another second phase. And now we're talking about a third phase of that project. So that project keeps -- this is like a mushroom. It keeps on growing, which is great. And it's right in our yard in Toronto.

Surplus lands that we have.

I mean, I don't know. I mean, sometimes we've said in the past, well, it's not really related to the economy and some people would say, well, eventually, everything is related a bit to the economy. But if you've invested hundreds and hundreds of million dollars, you'll use it. Eventually, you'll use it, and it's going to be there for 30 years. So go on carry on...

No problem. And then in the South, we have a new soybean crush facility located in Iowa on our lines, and that delivered last year about 4,000 carloads of outbound oil and meal. It started up sometime in the second half. So again, we'll have the full year effect of that. And then moving to the West where we have a number of opportunities. Maybe I'll just focus on one. In Northeast BC, we have obviously a lot of drilling that's going on natural gas drilling in the Montney shale. We transport a lot of frac sand up there for them to use in the drilling activity. Last year, we had one customer invest in a receiving terminal there, so we could ship unit train size quantities. So we have another customer that's opening another receiving facility. I think near Taylor BC, the first one was in Chetwynd. So all in that kind of area in Northeast BC. Again, lots of customer investment there. And we expect -- we had a banner year for frac sand last year, I think 70,000 carloads, and we're expecting to have pretty decent growth again this year, driven by that volume that's going up there.

All I'm going to say is when you look at 2024, we delivered, what, 1.3% RTM growth despite a lot of one-timers. So when you look at our low to mid-single-digit volume growth, I think it's -- I'm very comfortable with that. I mean there's no way -- and when you look our volume growth, half of it, Stacy, will be from those initiatives you just talked about. And we're just basing our -- from the economy, like it's about 0.5%. 1% will be the lapping of these one-timers and then 0.5% coming from the economy. We're assuming -- we're not assuming industrial production to be in the 2-plus percent. If you remember at the Investor Day a few years ago, we're assuming 1%, which is, I mean, consensus is around that for industrial production. And as I said, we look at a lot of different economic indicators. We're giving one to investors to simplify this thing. But -- and then I must say I'm very pleased with our pricing. I mean, our pricing, our service has been very, very good. I mean surveys have been going out there, not only from us. I mean, RBC does a big customer survey. The customers are very pleased with our service. And this helps in pricing. Now pricing is always tough. I mean you don't go in front of customers and say, I'm going to increase your price by 5% and you get a big hug and a kiss. But that doesn't happen that way. But I mean, we've continued to deliver pricing above rail inflation on a same-store basis. And I know you will say, well, what do you assume as inflation? Well, when you look at our labor, which is our biggest cost in Canada, the model has been -- I mean, the agreements that we just signed that I talked about, the pattern is about 3%. So it's in that range, and we're pricing. And I know we don't give out that number. None of the rails do. But I can tell you that we are continuing to deliver pricing above rail inflation, which is what we need to deliver -- to deliver that 10% to 15% EPS growth that we have.

So in terms of -- just a little more specifics on the cost side, you guys have always done a very good job in fuel efficiency. You just talked about labor. What are some of the other productivity initiatives? I know they never really end, but are there any that you're looking at this year.

I think that a lot of people have questioned the fact that we have two COOs. And when things don't go that great, then you will question a lot of things. And it hasn't gone that great in the last 2 years for all of the reasons that you and I go, but you and I know. But I think that Pat Whitehead being -- like Derek Taylor, he's focusing on the day-to-day -- these guys, they look at their screens, they look at where the fires are and then they put out the fires. And if there's no fires, they'll create one because they love it, and that's how they're good, and they become exception management experts. The problem if you have one CEO is you do this day in, day out, but you don't take a lot of attention on engineering, mechanical. And engineering, when you look at CN and other rails is the same, it's like a $3 billion construction company. So Pat is focused a little bit more on the long term, but also engineering, mechanical, safety. So we will provide proof points. We are providing proof points, and there's a lot of benefits to be done in engineering. Now some of it will not hit the P&L. Some of it will hit capital, but $1 is $1. And we can see -- and we've put a young, very, very good, young finance person in charge of engineering called Jamie Lockwood. So he's coming in. And engineering in the past, the culture has been we'll fix the track. Cost has not been their first and foremost. I don't want to say that they didn't care about the cost, but it hasn't been their first and foremost. He's coming in and saying, no, no, no, no. We have to do it all. We have to chew and we have to walk and chew gum at the same time. Not only will we fix the track, we have to fix it at the lowest cost possible. And Pat is overseeing this. So I think that that's the value. And those are some of the benefits that we will get over and above the 600 furlough that we have right now, over and above the 120 people management positions that we have not filled. Fuel efficiency is another one where, again, it's attention to detail, it's throttle notch limitations and so on and so forth. So it's -- so you don't get a home run. It's a little here, it's a little there. It's 10 million here, it's 5 million there. But when you add them up, that makes a big difference. And I don't know if you want to add anything because you've been around for a while, too. And I think that's the right model. The mechanical is the other thing. I mean we have like 1,600 high-horsepower locomotives. And when we have one of them crapping up on us on the Northern Ontario division in the middle of Norway, it kills you. So now Pat overseeing mechanical is overseeing locomotive reliability, which is key, which is huge. And those things are -- I know it takes time to pan out, but trust me, it will.

Yes. I'd just say, generally speaking, like we're going to have to -- we're focused on getting back some of that unproductive that we incurred last year. So year-on-year, we're going to be focused on productivity. And the other thing that's really helpful, obviously, is volume. When we have more volume, we're able to fill out trains more at low incremental cost, and that also helps with your productivity. So those are two big areas that I think Derek and Pat are very focused on.

I'll end with one question on short lines and just acquisitions in general. So you just closed the Iowa Northern.

We're happy about that. Yes, it took us a little longer.

Got it done.

But it's done.

We got some single lines, some grain on there. So maybe you can talk a little bit about that. And then just in general, do you feel like rails are going back to more -- picking up more short lines? Do you have visibility to ones that make more sense? Or is this going to be just opportunistic as they come up?

So I'm going to say a few points and then we have a few minutes. I want to conclude. But definitely, Iowa Northern, we're happy. It took longer, but it is a good acquisition. It's small. So it's not going to move the needle and so on. So listen, the strength of a railroad is you can't replicate it, like we own 8,000 bridges. The weakness of it is you go to where you go and you don't go to where you don't go. So you're limited by your network reach. So one of the ways to grow is to extend your network reach. and Iowa Northern is exactly this. So we're not interested like Genesee & Wyoming to buy pockets of railroads that don't connect. But railroads that connect with us that brings us to markets where we don't have access on our own. If it's at the right price and it's for sale, why not? And Iowa Northern was exactly that case. So the Falcon partnership that we have with UP is another way for us to extend our network reach into Mexico, and we do it with partnership with UP. So we have a list that we're monitoring of railroads that connect with us. I mean you could take a railroad and look at the different short lines that connect with us. And if they come on sale and they come at the right price, obviously, and they're accretive, even if they may be a little bit dilutive to the operating ratio, they're accretive to earnings, then we're interested. And that was the Iowa Northern took a little longer to close, but we have them, and we're happy to have them, and we welcome them into the CN family. And if there's others that come online, we are definitely interested. Listen, there's 27, 26 seconds left. So I think, listen, there's a lot of noise out there as we started the discussion. I think we're in a good space. There's been a lot of one-timers in the last 2 years, unfortunately. Unfortunately, we brought those up. I don't want to be defensive. It is what it is. I think that we are looking forward to operate in a normal -- in a quasi-normal operating environment and show investors that we can deliver. I think when I look at the stock price, we're extremely cheap. I mean, we went down lower than 140 yesterday with all the noise. But anyway, I'm a big shareholder. I'm not as big as some of you in the room, but I believe, and I hope you all believe as well.

Well we just recently upgraded for the first time.

I know in a decade.

So we believe as well. Thank you very much for coming, Ghislain and Stacy. We really appreciate your time kicking us off here on data. Thank you. Thanks a lot.