CSX Corporation (CSX) Earnings Call Transcript & Summary

Next up for real content for today, we have CSX and CEO, Joe Hinrichs . Joe, thanks so much for being here.

Thanks for having me, Ravi. Good morning, everyone.

So maybe we can start by where we started with everybody else, which is you giving us a sense of the demand environment that you see it right now. Obviously, the rails, particularly the Eastern rails, particularly yourself, has seen some pretty nice volume tailwind in the last 12 months or so, which appears to be actually picking up. So kind of how would you characterize them?

Yes. Thanks. I think the third quarter volume is up compared to the first half of the year. For us, what's been good to see as chemical businesses come back and we're a strong chemical franchise. You've seen the intermodal, both domestic and international which has picked up. Autos are up for the year, although it slowed down a little bit lately, but still up for the year. We're expecting a strong Midwest grain harvest and movement to the Southeast. So we're encouraged by the ag and food side. . What's been weak. The metals all year, steel, prices have been down and forest products have been a little then, for us, a unique short-haul fertilizer and phosphate have been a little bit down. But overall, the demand environment has held up pretty well given the external environment. IDP isn't doing anything great and the overall economy has kind of fits and starts, but we're encouraged by what the merchandise volume has been doing lately, for sure.

Got it. We've heard about some of the LTL trucking companies point to a slowing in industrial end markets between July and August. Have you seen something similar? Or has it been...

No, I think the only thing we really saw in that time frame with autos was a little slow to get back up after the shutdowns, probably because they're watching their inventories and what's happening with demand. But I wouldn't say that we saw slowdown anywhere else. Intermodal was still up for us even in that period. .

Nobody knows auto in this industry better than you do. So can you just unpack your comment a little bit more kind of why was that slowing? Kind of do you see that accelerating at 25%? Because there's been a lot of focus and attention on the auto market rebounding post-COVID and then you have high interest rates and start. So where do you see the outlook for that particular end market?

I think it's hard to do a generic answer because every company is in a different spot. But I think certainly, interest rates have been high, at least for this period. for a decent amount of time now that consumers are feeling that. So as interest rates start to come down, that will be good for the auto industry. Inventories have built back up. So you've seen -- what we saw coming out of shutdown with some -- there were some launches. And so that held units for a while with a couple of customers. It's fascinating to watch all the different customers from this angle. The same time, I think Stellantis has been out there talking about their inventories and then making some adjustments. And so just it's a mixed bag, but I think some of its inventory, watching the inventory levels and some of that was just launch-related. But I think there's -- I think the -- we've seen more commercials and more interest rate reductions and whatnot going on in the auto industry. And I'm hopeful that with interest rates coming down and continued stimulation, the demand should be there. .

Got it. So just to kind of put a wrap on that. You've guided to volumes low to mid-single-digit improvement. Right now, we are just about in the middle of that range. So do you feel like there's room to accelerate that towards the mid-single-digit level? .

SP29085718 Probably not accelerate, but we feel good about the volumes that we're seeing, especially on the merchandise side, obviously, the intermodal we talked about, but -- and again, the chemical being our largest franchise, there's still strong demand for export coal, even though prices have come down recently on metallurgical coal. If the trucking environment can get a little healthier, that could help with intermodal because there's a lot of competition there. But I think the volumes are going to hold up nicely, and we've seen encouraging signs so far in the third quarter. .

Got it. I want to switch gears a little bit and talk about just growth as a topic and a few questions there because I think when you sort of became an outsider or became as a rail CEO, I think you were the first U.S. rail CEO at least to really kind of talk up, hey, we need growth mean to kind of change the month or here a little bit and kind of move away from cost towards growth. And I think a lot of your peers kind of have followed you. What drove that change? How has that been so far? How has that resonated? And what do you see that growth pipeline looking like for CSX? .

Yes. I think -- so my perspective is heavily influenced by my experience of 30 years in the auto industry. And I tell this story a lot because it's true. I watch the transition over 30 years of having rail docks and all the facilities and putting things in box cars, engines, transmissions, frames, sheet metal and it all went to truck. And so -- and the reason for that, a lot was around service. And just in time was part of it because of the inventory carrying but a lot of it had to do with reliability and repeatability of service. And so it's not illogical to me to understand the industry hasn't grown because the industry didn't serve customers well. And so our view along, certainly since I've been here, is that in order to grow this business, we have to give customers a reason to trust us that we're going to be there for them because there are advantages to rail over trucking for sure, lower cost, better for the environment, better for taxpayers, safer, all those things that we know, but it has to be reliable because it doesn't matter what the cost is if it doesn't show up. So our belief was if you don't start prioritizing the customer and provide better service, you're going to never get out of the cycle. And then our thesis is to provide better service, we've got to engage with our employees to provide a better culture and a better experience because they're the ones we're buying the service. And we're not tied to an assembly line in the rail industry. It's a lot of discretionary effort, a lot of things happening out there in real time. So I just believe in my heart that their advantages rail has, but we have to offset decades worth of view that wasn't customer-centric, wasn't reliable, and we have to provide better service. .

How have that -- those conversations been so far? Is it just a case of convincing the customer that, hey, we have changed in the services there? Or does it have to [ leave ] the price? .

It really is -- every customers have a different experience is looking for different things, but it's about that repeatable, reliable service. I mean every survey has been done in the last couple of years -- last 18 months or so, CSX has led, whether it's from groups, advisers or whether it's from general commerce or other things. And that consistency matters because it's not about a onetime. This quarter, we did something great, but -- so it's about consistency. So that has to take place over time. . Because it is resonating with customers, but it's more than just the consistency of the service. It's do they feel valued and prioritized. Do they feel like they matter? Or are they captive and therefore, it doesn't really matter. And we've worked really hard to improve our communications, our responsiveness, even how we measure. We went out and asked customers when I got here you measure our success and our measures that just the same we believe me, they don't measure velocity and dwell, all right? They care about on-time performance. They care about communications, care about customer switch last mile, first mile, they care about all those kinds of things. And they care deeply about the variability. It's not -- you're an hour late, but if you're 12 hours late, those are different impacts, right? So it's just listening to customers and prioritizing them. The fascinating thing is because when I first got this job, and I was talking to analysts, you weren't in this role, but -- and I was talking to investors like, oh my gosh, it's going to cost a lot of money. This is anti -- 3 letters, one start with P. But it's not, you have to -- in order to serve the customer better, you have to run an efficient network because it's the only way you can do it. And that's where the cost base is. They're not in [ contact with each other ]. It's just a matter of prioritization and also balance. And so what we've been doing, especially in the last couple of quarters, is really trying to find that fine balance in what do the customers want and how do we get more efficient? And we've shown in the last couple of quarters some efficiency coming out of tweaking the plans . And that -- our dwell has gone up a little bit, but our velocity has gotten a lot better. The dwell has gone up because we've actually combined trains and work with customers for service levels, but actually, it lowers our cost, and they're happy. You can't be in pursuit of any 1 dimension or 1 measurement system. You have to -- it really what's important to the customer and how can you optimize your cost to deliver that.

That's a great way of putting it. Is that set of customer needs consistent across end markets? Or is that kind of different....

It's very different actually. Obviously, intermodal has its own space. but intermodal customers count on as speed and then also getting the trucks in and out of the terminals quickly, that dwell time, the delay in this, it's all about that. So we weren't even measuring that to a large extent and weren't even prioritizing it. We are prioritizing the speed but we weren't prioritizing their view of the world, which is when my truck driver shows up, how quickly do I get through the gate? How quickly do I get my container and do I get out? And can that get better, better, better? And we're now doing that. And that's one of the reasons why our intermodal business is #1 in customer service for many now surveys in a row. But a chemical customer cares, first and foremost, about safety and risk. And then also cares about, obviously, the timeliness because they own the fleet. So turnover -- turnaround time is pretty important. Automotive customers care just as much about empties being arriving as they do about delivery of the finished vehicles. We're always focused on the finished vehicle delivery. But they care deeply, I know I lived it, about the empties being there to load because if they can't load, they start getting all jammed up and there's a cost and quality and all kinds of other things. So they're all different. Some want you to get there early, some don't really care if you're early. It's just -- everyone is different, and we can't treat them all the same. Coal customers unit train is very different, right? They want empties there to load because they don't want to put call on the ground. So there's lots of different things to think about, which makes it kind of fun and fascinating.

Sounds like a hard job, Joe.

It's not -- it's complicated, it's hard because of the weather and because of all the variabilities, but it's kind of fun because each 1 of these needs a different solution and each one of these is own little business in themselves, which to me is kind of fun. .

Got it. Just sticking to the growth topic, you've been very vocal about the pipeline of opportunities that you guys have coming on the kind of on your network. Can you just talk about a little bit on some of the bigger chunks that you think are kind of fairly imminent over the next year or 2? .

Yes, we're blessed to be centered in the Southeast United States, which is where a lot of the industrial development is happening, you're seeing stuff move in the Midwest, Northeast down to the Southeast or new stuff coming to the Southeast. And it's really broad-based. We have over 500 projects going on with our industrial development program. We have the site process where we use -- where we rate them and we work with the local jurisdictions to make it work. We had a great team in industrial development. That's exciting. And we've said it could be a point or two of revenue coming for the next several years because of how that work. It's not just electrification. It's a little bit of everything in our portfolio, which is great. that's going to continue, I believe, we all believe. Some will go to Mexico and some will come to the U.S. And that's pro-CSX. That's pro-rail because a lot of those customers are looking for rail to be part of the solution are looking for connectivity to our network, either through a short line or direct onto our network. So we're encouraged by that. I mean a lot of companies know they've got long-term emissions reduction requirements to meet and they're thinking long term when they make these massive investments and they locate. So they're also thinking about that 10, 20, 30 years out. We're very encouraged by it, and we'll have a lot more to say about that in our Investor Day seminar.

Absolutely. What are your -- and probably your customers' thoughts on near-shoring at this point, kind of -- obviously, a pretty tremendous opportunity for you kind of as the supply chains become localized. But at the same time, there may be some risk of losing some of those volumes to truck and you have an intermodal -- international intermodal business as well. So how do you think about all the puts and takes there? And has any of that changed with the geopolitical environment over the last few months?

So I don't think any -- too much of it has changed. I mean international model is going to be around forever because there's just things that are now not made in the U.S., they won't be made in the U.S. I don't think we're going to have a textile business come back as an example. And so whether it's made in China or made in Southeast Asia or made in Mexico or something of that effect. So I don't think that's going to affect too much. If there are tariffs and other things that happen on certain elements of the marketplace that could affect things. But on balance, it's probably a net positive for us. Because if they're going to locate in the U.S., they're probably going to go in the Southeast. So it would be on balance probably good for us. But we watch it very carefully. We're very excited about the new interchange point with CPKC and Myrtlewood, Alabama coming across that Meridian Speedway and gives us more access to Mexico and some parts of Texas in partnership with CPKC. That's going to be a big deal for us, hopefully soon. And so I think we're well positioned for that. We're watching the port dynamics and everyone is interested in that. I mean, our view is not likely to be a long strike, if there is one on the eastern ports. But on balance, actually, there's not a lot of risk for us over an extended period of time because if things move to the west, they still got to get to the population in the east. So then it's just a longer haul for us, actually. And a lot of stuff that comes into the Eastern ports gets trucked from the port to the population centers that are on the Eastern seaboard. So in many cases, it could actually be a short-term positive for us. So it's not a big risk to us, but we don't -- obviously, we are hoping it doesn't happen. We don't want it to happen. We're very proud of the investments and the growth that's happening on the Eastern seaboard, [ win ] the ports, and we're proud to be a part of that. That's something to watch as well in the near term.

Yes. That was my next question actually. So can you unbind that a little bit more? Can you remind us what the time lines are? And kind of any steps -- are you taking any preemptive steps right now to maybe prepare for that? The Canadian ports when they saw something similar sort of volume diversion away? Are you seeing any of that right now? .

Yes. I don't think -- well, there is more movement in the -- there is more going on the Western ports and more movement coming across, which has been good for our domestic intermodal business. Is that pull ahead? We're not really sure no one's really come out publicly and said it. Because the eastern port volume is still up a little bit. So we'll have to watch that. We're not taking a lot of precautions because we have a good partnership with both -- with the Western rails and good, strong intermodal business with them, and we're ready at the interchange points to do more, if necessary. We didn't get really affected too much by the Canadian because we don't really interchange a lot with the Canadian rails out of Canada. But we're watching it very carefully. At the end of the month is the time line that you asked about. So it's not that far away. Again, having a lot of labor experience in my life, I'm hopeful that there's always a lot of rhetoric, but I'm hopeful that in the last hours, they'll find a resolution. .

Got it. Understood. So I mean, in the past few years, you've seen a lot of almost bouncing back and forth between West Coast and East Coast because they had their own labor situation, then kind of it's coming here. Where do you think that ultimately settles out? And kind of when you -- there's not a dramatic change in global supply chains, like between West Coast and East Coast, like do you think one can take share from the other? .

Well, we saw East Coast take share over the last 3 years I think it will settle down a little bit. There's been more risk over the last couple of decades on the West versus East. There has [ definitely ] been a stoppage in the East in quite some time. There's been more stoppages in the west. But I hope that what we see going forward is some stability that's good for everybody to plan their logistics network and plan their lanes, et cetera. My hope and my expectation would be that it will sell down once we get through this Eastern thing. Good news is both West and East ports are investing heavily in growth potential and capacity in most of -- the big ports and getting more efficient, which is good for all of us. And that should help with the flow of goods, which is good for all of us. .

So that was very good color on volumes. Kind of how are you thinking in terms of the pricing dynamics here? What's your -- do you have a target price that you're going for? And kind of what do you think the conversion is like, for instance, there have been some questions about whether some of the volume growth you've seen kind of has come at the cost of price, kind of what's that balance look like?

So it's really a dirt sale of 2 stories between merchandise and intermodal. The intermodal business has seen some pressure from the trucking environment. There's so much excess capacity and rates are down. So the pricing in the intermodal side has not been where we would have hoped. But the merchandise pricing has been strong, and it's been good, and we're really encouraged by that. Now so that's those 2 worlds. And so merchandise is 3/4 of our revenue, half our volume. So it's really important that we have strong pricing there. And a lot of that is due to the service. I mean the good, reliable industry-leading service is really contributing to that. I will say, though, a couple of things have happened more recently, fuel prices have come down. So fuel surcharge -- on the revenue side, fuel surcharge will be lower probably for the rest of the year. And also metallurgical coal prices have come down pretty meaningfully in the last few weeks, which will hurt our coal RPU, will lower our coal RPU in the fourth quarter. So a combination of those 2 things, which aren't within our control. So the things we control, the pricing, has been good. The operations are performing well. Merchandise volume is up meaningfully. Intermodal business is up meaningfully. Things we can control and influence. But 2 things we don't control, fuel prices and magical coal prices are both working against us. So that's going to put us in the lower end of that range we gave on revenue, where we said low single to mid-digit increase the volume. We said that, and we're trending nicely there. But because of things on fuel surcharge and metallurgic coal prices, you'll see us on the lower end of that guidance on revenue, things we can't control. But I feel good about the volume and feel good about our service. .

Got it. I was just thinking about '25. I'm not asking you for pricing guidance of any kind, but would you -- like if you got, say, a 2% to 3%, even 3% to 4%, like is that enough to offset inflation the way you see it right now?

Well, obviously, we're expecting and seeing inflation overall come down. We have a good line of sight of what our labor inflation is going to be because we've reached agreements with more than half of our workforce going forward. So that's 4% next year, next July, 4.5% this July. So we're in a heightened period on the labor side, although we are seeing some efficiency, which are helping some of that. So if inflation comes down as expected and interest rates come down, which hopefully affects the consumer, the other thing we need is the trucking environment to stabilize. It's been a long trough. So the trucking environment can stabilize and actually start to -- the rates can go up. That would be contributory to a better pricing environment on the intermodal side. But I feel good about the merchandise side. We feel good about our cost structure, and we'll have to watch and see what happens on the intermodal side. But again, it's a good business, not a bad business. It's just it's feeling some of the pressures from the trucking capacity. .

Got it. Just moving to the cost side. You mentioned that the labor deals, again, you led the industry kind of in reaching these agreements. Can you just talk about a little bit more kind of what precipitated that? And kind of are you happy with the outcome? .

So we are happy with the outcome. But -- so we tried -- I think it's -- because I think the TCU press release acknowledge this. So we tried as an industry to voluntarily come together to get some deals done early. And the logic behind that was nobody won from what happened last time. everyone was dissatisfied. The employees, the unions, the government, who had to intervene, regulators, customers, who had a couple of times go through, are we striking or not. And so we came together as an industry, I chaired the AR this year. We came together as an industry and said, "Can we try to do something different. And so we couldn't get there as a coalition, and so we quickly -- CSX wanted to do this and lead because we think the advantages outweigh the cost. And we're proud of the results. We're encouraged by how quickly we were able to get over half of our workforce. There's still work to be done. They have to be ratified, but also still more agreements to be done. The benefit this gives us, I think people misunderstand national negotiations a little bit in the rail industry. At the national level, because when you have a coalition and there's value in having a coalition. When you have a coalition, you're dealing with very high-level things because everyone else is work rules and different agreements are different. And so you're dealing with wages, general wage increases, health care, medical benefits, time-off provisions. But the work real stuff, the real meaningful stuff about helping you get more efficient and get better happens anyway on your own property. You can't do that because UP's issues are different than ours and BNSF's different than NS, et cetera. So the good news here is we reach these agreements, our workforce feels appreciated and valued. They don't go through what happened last time. They waited 3 years to get a raise. They had to go through COVID, this high inflation environment, bad taste in their mouth, didn't feel valued, hurt us attracting people. So we get rid of all that. And then we can focus on working together now once we get the noise of the national agreement done to get -- to help us be safer, be more efficient, work better together and work on things that are in our interest to do so. But you have to clear the decks of the national stuff to get to that stuff. And if it takes you 3 years [indiscernible] you never get to the local stuff, it's kind of happened last time. So I think -- we think it's a big opportunity, but it also resets the relationship with our union partners and with our employees. And the big thing about us at CSX is about this one CSX culture that we want our employees to feel valued and appreciated respectively included and listen to. And I can tell you, I'm out in the field every week, randomly showing up in yards and which I really get a feel for what's going on. And the biggest issue I heard often was other than safety, which is always in everyone's mind is -- what happened last time didn't work for us and really made us feel like we weren't part of the company. And so I can tell you in the last few weeks when I've been out, several yards, the employees really do appreciate the proactive nature of what CSX has done and the industry has done to get this noise out of the way and try something different and start working on the other things that need to be worked on and give us 5 years to work on that instead of 2.

Yes, absolutely. So speaking of the other things is going to be worked on, we won't say the P word, but this industry kind of had a tendency to just focus on cost-cutting above everything else and maybe you went a little too far there. Obviously, you and your peers are focused a lot more on service right now. How do you think about cost versus productivity actions versus investing in the service? Again, how do you think of just a pure cost per carload, ex inflation, how does that trend?

So it's a great question and something we spend a lot of time on. And Mike Cory and his team have been great about us, I think in the last couple of quarters, showing you can do all the above, but it's a balancing act. When you're only pursuing operating ratio improvements, you can have a tendency to leave some attractive business on the side because it will hurt your OR, but it can improve your margin. You can improve your income. So I like to describe to people if we have a 40% rail business and 40% margin rail business, and someone brings an intermodal business at 30% margin, but nothing else changes. And you don't pursue that because it hurts your OR, you didn't create value. You actually left value on the table because your cost of capital is less than 10%, right? So we have to reframe the dialogue around making sure the rail is efficient, which is what the cost or revenue approach was about, which generate a lot of value in many ways. . But we also have to recognize that it's great shareholder value. We're going to grow our EPS. We want to grow our balance sheet capability. We want to grow -- profitably grow, important. And so the key thing for us is to keep all that in balance. So we invest strategically in key locations to help with service, but recognizing that, again, as I said earlier, -- to provide the best service, you have to be more efficient. This is a network. And if it's not flowing with good fluidity, your cost structure is going to get in trouble. So you don't want to add too much volume or too much on that affects your fluidity because your cost structure will go out of whack. But at the same time, as we have capacity in almost every train that we run right now, you can add to that a very strong incremental margins. and make sure you have the capability to do that. On any given day, the limitations to our network are not the actual physical infrastructure, it's usually cruise availability. Because just having the right people at the right place and time and show up for work and be there and have them trained and have them ready to run. And so how you coordinate that and what size trains you're using and how you do things is really important to optimize crew availability. It goes back to working with the unions again. Because if you're fighting over this bigger stuff, you never get down to how do we work on the crew availability challenge, around schedules, around all of that, having the right people trained and all those things, which we can do in partnership if we have a true partnership. So that's the balancing we have to do. And all metrics matter, but not one can matter over the other. At the end of the day, we want to show you that we can demonstrate efficiency improvements, revenue growth and with our strong cash earnings, return some value to shareholders and that will give you double-digit EPS growth. And if we can stimulate that more with more demand because we're serving customers better, all the better.

So on that metric point, what is the metric or metrics that you would like to be measured by? Is it EPS growth? Is it cash flow? Is it EBIT growth?

I think EPS growth is important because that's a shareholder perspective. I think that's important. Margin is really important. They're related, but obviously, more shares you buy back, EPS can be impacted. But margin is really important because margin can be worked out on both from both equations cost and revenue. And I think we -- the industry ended -- ended up spending too much time on the cost side, which is great, important but we need to balance work on both of those. . So margin growth and operating income growth are important, but probably more operating income growth and margin growth because if you -- again, as I said earlier, if you've got really strong margins and you turn away business, it's a little bit less, your margin might go down, but you might earn more. So operating income, efficiency around margin, keeping your margins strong, and then it gives you a profitable growth, which leads to EPS growth, especially with the return to shareholders we can do. And I think it's important to look at volume and revenue growth because it shows you how healthy your business is and your demand portfolio is with your customers over time. Because one of the knocks in this industry because we have not able to offset the [ coal ] loss. With intermodal, we replaced it with intermodal largely, we haven't grown. But man, what's the potential of this business if we can get customers to be advocates for rail sure. And that potential exists because we have benefits to give them as long as we provide reliable, repeatable and dependable service. .

Absolutely. On that note, any questions from the room?

My question is just sort of on the cost efficiencies that you guys have been driving this year. You alluded to them a little bit earlier, but would love to unpack kind of what's left to come in the second half of the year, maybe in particularly in light of some of those revenue headwinds? And then as a bigger picture, like how do you get confidence that if volume inflect a little bit more strongly, macro comes back that you're going to be able to hold on to those, not have to resource up and kind of undue or unwind anything that you've done today?

Wonderful questions. And frankly, I'm not going to give you a lot of answers because we're going to address both those questions in our Investor Day in November, and I want to give away some of the fun story. But.....

It's in the [indiscernible] Island, we'll be there, one way or the other.

Yes, we want you there. But it's important because one of the ways we do that is by looking at our network and investing in places to provide ourselves more efficiency and capability to get ready for when that comes. And also, Mike has been very vocal publicly about the opportunity he sees for us to redesign our network and our service plan to optimize the travel time and to take out of route miles out, which can be substantial savings for ourselves and our customers. There's too little dangling things there. but very important topics, but I got to save a little bit for -- some people come to see us in early November.

Understood. Maybe just to quickly wrap up here, you're very clearly focused on the safety side of things. And I think the STB and the regulators will be very happy to hear the industry's growth focus now away from cutting, but at the same time, regulation has been a focus area, especially for safety kind of, how would you characterize that right now is that stabilized or? .

I think the industry has come together on this topic very well after what happened with Norfolk Southern derailment in East Palestine and the reacting to that. I'm encouraged by the progress we're making. There's more to be done to be sure. We focus a lot on the bearings and the wheel temperatures and whatnot because there's a risk there. But I'm encouraged by the work that's being done in the industry and what we're doing. We've taken -- we took a whole -- we had some fatalities last year that were unacceptable, and we have to own that. And so we've taken a step back and we have revamped our entire safety culture team. We have a 3-year plan with an outside services helping to -- just to -- we have to this industry tolerates a lot more risk than it should. And a lot of it has to do with the environment we're in. Our people see things happen on a daily basis. I mean, it's a staggering thing for me coming from the auto industry to see the railroad crossing accidents and the suicides and the things that happen on our network. And I think in some cases, it numbs our people to the risk that are out there. And we have to not accept that. There's more to be done. There will be a rail safety legislation at some point. We wanted to be focused on actual real safety and not all the other political agendas that got involved in this. But at the end of the day, I'm encouraged by the industry coming together on this. There's a lot more to be done, and we're committed to it. And it's important. We're already the safest way to transport on land, but by far, but we got -- we can be better. And we have to embrace -- we can talk about it, we have to embrace technology to be part of that solution. And we need our regulators and the companies to work together to make that happen. And that's been a challenge. That's an opportunity in the future. .

Got it. Joe, thanks for a great update and looking forward to Investor Day.

Thanks, everybody. Appreciate it. Thank you.