Good morning, everyone, and welcome to the Kansas City Southern Third Quarter 2021 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please also note, today’s event is being recorded. It is now my pleasure to introduce you to Ashley Thorne, Vice President, Investor Relations for Kansas City Southern.

Thank you, Jamey. Good morning, and thank you for joining Kansas City Southern's third quarter 2021 earnings call. Before we begin, I want to remind you that this presentation contains forward-looking statements within the meaning of the Securities Exchange Act as amended. Actual results could materially differ from those anticipated by such forward-looking statements as a result of a number of factors or combination of factors, including but not limited to the risks identified in our Annual Report on Form 10-K for the year ended December 31, 2020 and in other reports filed by us with the SEC. Forward-looking statements reflect the information only as of the date on which they are made. KCS does not undertake any obligation to update any forward-looking statements to reflect future events, developments or other information. And with that, it is now my pleasure to introduce Kansas City Southern's President and CEO, Pat Ottensmeyer.

Thank you, Ashley. Good morning, everyone. Thank you for joining us for our third quarter earnings call. I'll just start with Slide 4. I think it’s - most everyone here is well known, we did ask Adam Godderz to join us today, our General Counsel in the event we get into some detailed questions about the merger timeline. And you will probably all notice the absence of Sameh Fahmy from the agenda today. I think many of you probably saw the press release that we sent out last week, announcing that Sameh will be leaving the company between now and the end of the year. We had originally thought that this earnings call was going to be last week. Sameh had planned some very well deserved vacation that he continued to follow through on. I don't think Sameh has taken more than two consecutive days of vacation for the last almost three years. So Sameh is not with us today. Just reiterate what I said in the press release and what we said on other occasions, really cannot say enough about what Sameh brought to the company over the last almost three years, his enthusiasm, his focus, his passion. Those of you who know Sameh know that passion really is probably the one word that describes him better than any others, has been of tremendous value to us over the last almost three years. He has built a lot of very strong muscle tone across our organization with people that were here before, and are here now to carry on our focus on PSR disciplines. And very importantly, he help to recruit and strengthen our team. And most noticeably with the presence of John Orr, who you'll hear from later in this presentation. So we again will have the opportunity…

yep, Thank You, Pat. And as you said, there's a lot of encouragement from a network perspective with gross velocity and well in the range of best Q3 at this point. I just said the sequential improvement in gross velocity and dwell moving into the third quarter and the first three weeks of October is very promising. Or as you said the US lead promising, or as you said, the U.S led in the early part of Q3, the transformation and gross velocity and 12 were 30% and 10% better respectively. Thank you. Q2 levels. And in Mexico as you -- again as you said, the second half of Q3 was where we really start to see the traction for gross velocity and dwell. And we finished the quarter 18% and 23% better respectively than the Q2 levels. The strong performance is continuing into Q3, and as our velocity and dwell are in the 16 and 18 hour range. And what's really encouraging is the run rate improvements are continuing well into October. I feel particularly good about our resource levels. We have a more fluid network, and we're seeing improvement in utilization of both our locomotive centre crews. While our average locomotive fleet is up year over year, it really doesn't quite tell the full story. We began the quarter with an active fleet of 1,047 locomotives, and through improvements and initiatives and a lot of college sweat equity, we were able to park or return over 170 units. We exited the quarter with an active fleet of 868 units. And the average count in Q3 was 7% lower than what we saw in Q2. And we're continuing to push more of our fleet. And as of this morning, our range was in the 840 locomotives. Our T&E headcount…

Thanks, John, and good morning, everyone. I'm going to start my comments on Slide 10. I'll cover revenue and volumes in a little more detail on the next slide. But overall, quarterly revenues grew 13% on a 3% volume decline. Our reported operating ratio of 66.1% includes $37 million of merger related costs that we incur during the quarter. Excluding those merger costs, our adjusted OR was 61.2% to 240 basis point increase year-over-year and flat sequentially. As Pat mentioned, we had several discrete commercial challenges and increased costs from network congestion that I will discuss in more detail on the next few slides. But let me cover a few of the key expense items in the quarter that contributed to the adjusted OR. We incurred roughly $10 million or 130 basis points of incremental expense in the quarter from resources that we deployed to address the service challenges we were experiencing earlier in the year. You may remember that last quarter we referenced approximately 200 basis points of headwind from costs attributable to congestion. So the good news is these costs have come down as we've progressed through the third quarter and as John indicated, our networks running about as good as we've seen in a long time. The improved trajectory along with significantly improved service gives us a level of confidence that we will be able to leverage our resources deployed going forward and achieve better productivity. We also incurred $6 million or an 80 basis point higher year-over-year derailment and casualty expense. And as we discussed on the 2Q call, we incurred $4 million in the quarter, roughly a 50 basis point impact from Mexico outsourcing reform and I'll cover that in a little bit more detail in the following slides. Our overall reported, diluted earnings per…

Okay. I think, Mike, summarized the quarter really well. Just a couple of things that I would add, and that is, like the way he referred to the setup. Just we were quite intentional during this quarter to bring resources back to deal with network congestion, some unexpected things related to the fuel, the refined fuel issues in Mexico, the permitting requirements, et cetera. I think Slide 8, that John went through is really one of the most impactful here in our presentation today, just the magnitude of the improvement in some of our service metrics. We're seeing this down to the customer level as well. And we still believe that the revenue headwinds, the areas that Mike touched on are transitory. Maybe we can debate, how long transitory covers, what timeframe. Our crystal ball is no better than anybody else's. We are staying really close to our customers, but certainly in markets like the auto finish vehicles, that business will come back and I think we are set up. Again using Mike's term, very well for recovery when that business does return hopefully -- soon hopefully in the fourth quarter, but certainly early next year. And then obviously the focus on the merger making great progress there. And I think we see a clear path to getting all the regulatory and shareholder approvals and concluding that transaction in the next few months. So with that, the whole team is available for any of your questions.

Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Our first question today comes from Chris Wetherbee from Citigroup. Please go ahead with your question.

Good morning, Chris.

Good morning. Good morning, guys. Maybe I can just ask about the operating ratio. So you talked about sort of the setup going forward and maybe some improvement sequentially in how things were going. But we also talked about sort of some resource additions to be able to catch up on some of the service metrics that you're highlighting. So I guess maybe two-part question here. For the fourth quarter, do you think you can get back to year-over-year operating ratio improvement? And then as we think out beyond 2022, I appreciate -- to 2022 and beyond, I appreciate that you're pulling guidance because of a lack of visibility. But do you think we have to have rebased higher sort of our expectations for operating ratio and then we can improve upon that? Or do you think there's the ability to catch up, if what we're seeing is actually transitory. So just want to kind of understand, 4Q and then how you think the setup might progress as we move out into next year.

Well, there's a lot in that one, Chris. But I'll take a stab at that. Our goal is always to improve operating ratio and I do have some confidence here that from a cost perspective, we're progressing pretty well, particularly on the equipment side. I think we've still got a little ways to go on labor productivity and fuel efficiency, but lots of focus on that. And I think a lot of its just going to depend on the demand environment. Lazaro situation is very frustrating. We can't predict accurately when that relieves itself. Refined product, we continue to have a lot of confidence in that market. There's a huge gap in supply and demand that has to be fulfilled by importation and we're incredibly well-positioned. And we'd like to think that auto begins to show a little bit of strength as the chip issue resolves itself. But if there's one thing, we will know, the entire auto sector has been wrong about how long this chip issue is going to last. So, we're just going to have to wait and see. And then as we set up for 2022, I mean, we still feel incredibly good about this business. I made the comment about medium and long-term. We don't see the growth prospects having changed at all. And having gotten over the hump now on some of the service challenges, it's incumbent on us to get productivity back to some of the levels that we saw earlier. But as you see in the data, I mean, our velocity and dwell and tripping and compliance and all those other metrics we track every single day are improving. And I think that sets us up reasonably well going forward.

Great. Thanks for the time. I appreciate it.

Our next question comes from Ken Hoexter from Bank of America. Please go ahead with your question.

Hey, Pat, Mike and team. Just, if I can follow-up on the -- on some of these network issues. What resources do you have to protect yourself in Mexico? I mean, you've been dealing with the strikes, especially the teacher strikes for a really long time here. It doesn't seem like, I don't know if they're impacting other industries, or do you need the government to come in and shut down. I mean, this seems to be more a permanent ongoing impact. Maybe talk about what you've been doing and how you can control that if, if at all possible? And then, same thing in the energy reform. It sounds like you've got something going on that's been impacting and externally talked about your timeframe for resolution on those both. Thanks.

Just on the teacher strikes, this is -- anybody who's followed us for many years, it is a chronic issue in this part of the country. It's certainly gotten worse here recently, particularly because of some of the politics and the rivalry between the state level leadership and the federal level. We did have a transition in the leadership of the state of Michoacan in October 1. We were very hopeful and optimistic that that would be a breakthrough. We still think it will be a breakthrough longer-term, but the fact remains that the tracks aren't clear, the teachers haven't been removed. The issue is we need the government to enforce the law and remove the protesters and the blockage of our property. We're not law enforcement, we're not going to do that. And we are -- we lobby very aggressively with all levels of state and federal. Oscar spends a lot of time talking to government officials in Mexico, trying to make sure they understand the economic impact of this. I wrote a letter two days ago to the Finance Minister, reiterating the impact of this not just on us, on our customers, on citizens of Mexico who are employed by these companies. It does affect other businesses. The economic losses is very substantial. They do also block the highways from time to time. So it tends to be an equal opportunity disruption. But the fact remains the government is responsible for law enforcement and we just need them to do that. We are optimistic certainly that this will get resolved. We have reasons to think that payments are being made. That's what it's all about with the teachers, restoring their -- or addressing their complaints about compensation. And we just hope that the change in administration will lead…

I guess the only thing that I would add is to the extent that product continues to move and some of that product is moved over to truck, we're confident that, that eventually will move back to the rail because it's easier to administer from a regulatory perspective. And quite frankly, it's more cost effective and efficient way to move the product into the country.

Great. Thanks, Pat. Thanks, Mike.

Our next question comes from Amit Mehrotra from Deutsche Bank. Please go ahead with your question.

Thanks. Good morning, Pat. Just hoping to sticking with Mexico for a second. I was hoping you can give us an update on the approval process in Mexico. I know you don't really expect any insurmountable hurdles. But obviously you're progressing down that path, if you can give us any additional color. And then, Mike Upchurch, maybe even Mike Naatz obviously, wondering if you can kind of expand on the pricing opportunity you noted in your remarks. Obviously, capacity is constrained, just wondering if you can kind of compare the pricing opportunity today to maybe past periods of constrained capacity.

Before we all forget your question, we'll go to the COFECE. Our application is in. I think the ball is in COFECE's court to come back with a request for information. So it's fairly early, but I think we learned a lot about the process through prior experience here over the last several months. And so, I think this should be maybe a little bit easier. But until we get requests for information from COFECE, we're not exactly sure what that process is going to look like. There certainly should not be an issue here as everyone knows from an antitrust issue, Canadian Pacific terminates in Kansas City. They don't have any duplicate operations. So we think this is a fairly straightforward case. But we also know that COFECE has been challenged with staffing and resources. So their just normal backlog seems to be moving a little slower than we might like. But based on what we've heard so far, based on the feedback we've gotten from our advisors, we don't see any real difficulties with the case and hopefully can get approval in a matter of a few months.

I think on the pricing side of the house, as Mike mentioned earlier, we have an attractive pricing environment right now. Certainly inflation is something that we're watching. You're seeing high incremental costs and pricing in other modes of transportation. We're certainly seeing inflationary pressures in the railroad. And we basically will hold through the same premise that we've had in the past, which is that we will be pricing at or above inflation levels, rail inflation levels moving forward.

But isn't there an opportunity to price well above inflation levels given how constrained capacity is? I'm sorry to ask the follow-up, but just talk about your ability to price to the market rather than just price to inflation given how constrained that capacity is next year?

Yes, you're seeing that. To the extent that we have the opportunistic abilities to price, those are certainly things that we'll be taking into consideration as we negotiate our contracts.

Okay. Thank you guys. Appreciate it.

Hey, thanks, Amit.

Our next question comes from Brian Ossenbeck from JPMorgan. Please go ahead with your question.

Hey, good morning. Thanks for taking the question. Just want to come back to the refined products and energy reform just more broadly. Can you just comment, what's the net effect when the regulatory side settles down a bit on the imports? Do you expect more to go to unit trains as you probably get a little bit of consolidation on the permitting side? Because I'm a little surprised to see that truck is able to pick up some capacity here. So maybe you can even comment on that. And then secondly, we've seen more comments about the LPG pricing caps. That's a smaller part of energy reform. But I guess if you can comment on that as well, because it was a little surprising. I think there's a first move we've seen on pricing that kind of went against the energy reform. So you can comment maybe on the implications of that, what the impact has been on the market as well. That'd be helpful. Thank you.

All right. I'll go ahead and start. With respect to the comments on the refined products unit versus manifest train, our unit train business has been fairly consistent. We haven't seen the same magnitude of disruption that we've seen on the manifest side of the house. We do expect that as a regulatory environment and supply chain issues, I guess, more into a normal activity, we do expect that the manifest fuels will pick itself back up. It's that manifest business that has largely migrated to the trucking portion of the business where products are taking a short haul over the Mexico border into the northern Mexico, Central Mexico marketplaces. With respect to the LPGs, I'm not sure that I entirely understood the question, but obviously, Mexico has indicated that they are going to try to contain pricing on behalf of the consumers in Mexico. That may resolve results in Mexico effectively subsidizing the LPG costs as they move forward. But again this will be ultimately become a supply and demand question with respect to LPGs moving into the country.

Thank you. Yes, the question was about the pricing caps that [indiscernible] put on a couple months ago, which is the first time we've seen that since 2017. But it sounds like you aren't seeing too much of a volume impact from that. I was just curious if there's other implications of capping here that might translate to other products.

Well, there's [indiscernible] going to -- and there's markets that -- and there's alternative markets that those products can go to, those products are probably going to migrate into those other marketplaces.

Brian, just to put it in perspective though, we're moving 2,000 to 3,000 car loads a quarter that are tied to Mexican energy reform. So it's a pretty, pretty small part of our business. I wouldn't expect it to have a big impact.

Okay. Thank you guys. Appreciate it.

Our next question comes from Justin Long from Stephens. Please go ahead with your question.

Thanks and good morning. I wanted to ask another one on refined products. So, Pat, earlier, you mentioned that the permitting and inspection requirements could be a headwind for some time. Does that mean that you're viewing this as a structural change that you're going to have to overcome? Or do you think there's potential for some of these regulations to get pulled back? And I guess if it is a structural change, how does that influence the way you think about incremental margins and returns in this business?

I think it's maybe a little too early to know and I'll take a first shot at this and then maybe Mike and Oscar. What I meant is, there's obviously a heightened level of scrutiny not only on us, but some of our customers for permit compliance for inspections. And so some of the disruption that we're seeing here we've seen in the recent past and still experiencing is affecting the business because the players in the market, us, our customers are having to adapt to really a different compliance set of expectations. Once we work through all of that, I don't know exactly how this is going to play out. Would it result in some of the smaller players, some of the smaller participants and maybe some of the smaller terminals and receivers, deciding that they don't want to be in this business. And how that's going to play out in terms of the number of customers, the number of terminals, we can serve. The density of small terminals versus large terminals, I don't think we know how that's going to play out longer term. But I would say this and Mike, Oscar, and I think you guys can maybe add to this that at this moment, we definitely have seen fewer receiving terminals because of the change in the requirements. And I don't know, Mike, if you have thoughts or opinions about whether we will see all of those customers and locations come back or some consolidation that could actually have a benefit in terms of efficiency of the way we serve them and cost profile versus a more disparate type of a market.

I guess with respect to the receiving terminals, Pat, and those facilities, my numbers won't be exactly right here, but they should be directionally correct. I'd say as a result of the government going in on a regulatory basis and reviewing licenses and permits in proper operation, the number of servicing facilities has declined by about half. We expect that number will slowly rise as these entities get their business house in order, if you will. But of course, it is going to depend upon the regulatory authorities approving those things. To the extent that we're dealing with fewer entities, there are operational benefits to us in dealing with a -- somewhat smaller pool, because there's more efficiencies we expect to move more quantities into fewer destinations. And just keep in mind, the overall market dynamics still suggest that two thirds of the demand in Mexico needs to come from other countries, namely the U.S to make up the shortfall in demand here. And rail is going to be much more efficient than truck. And if you think about compliance with regulations, much easier to inspect with rail operations than it would be with trucks given the nature of our operations. So that's why we still feel good about this market as it settles back out.

Okay. Thanks, everyone. Appreciate the time.

Thank you.

Our next question comes from Tom Wadewitz from UBS. Please go ahead with your question.

Yes, good morning. I'm not going to ask you about refined products. But the -- let's see. Pat, I wanted to get your sense of kind of a longer term thought on outsourcing interest. I mean, the supply chain disruption we've seen this year has been just remarkable. And certainly the costs of importing from Asia have skyrocketed in terms of container rates. Do you have any kind of -- what have you seen from customers that would point to long-term opportunities for kind of outsourcing from Asia to Mexico? Are there any customer types or things that you'd say, well, this is kind of interesting from -- I know these things would take time, but from a longer term basis, if you have any thought kind of related to the dramatic disruption we've seen this year in supply chain.

You're right. These things take time. As we said in the recent past there, we can't show you a long list of announcements of new plant locations, whether it's in Mexico or across North America. Obviously, the combined CP KCS North American network is going to benefit and hopefully help drive some of these decisions across the entire continent. I think the thesis is still very much alive. The supply chain issues, the prolonged supply chain issues that everyone is very well aware of are certainly doing nothing, but fuel some of those decisions. And -- but there's a lot of work to do in terms of thinking up and implementing USMCA resolving differences between the three countries and specifically between U.S and Mexico on a lot of issues, make sure that our government policies don't diminish to a large extent the opportunity that really North America should be having. We had Mike Naatz and I -- and I'm not going to overplay this. It was very early, that we had a discussion last week with a very large discount retailer that was talking about resourcing virtually all of their material and production from that they currently are sourcing from Asia, coming into the West Coast to Mexico. This isn't a manufacturing company to retailer, but they were talking about significant volumes of product coming up from Mexico, changing their vendor supply network away from Asia to Mexico, and substantial volume that would be available to -- for us, intermodal and some of it truck obviously. But that was certainly an encouraging sign and kind of validates the thesis that supply chain decision makers are in fact looking to derisk global supply chains. Again, I don't know -- have anything terribly specific beyond that. Mike, I don't know if you have anything to add. But …

No, you said it well.

Okay, great. Thanks, Pat. Appreciate it.

Okay.

Our next question comes from Scott Group from Wolfe Research. Please go ahead with your question.

Hey, thanks. Good morning, guys. So can you just review the -- from the merger timeline, when do you think you'll know if we'll get an expedited review of the full merger by the STB? And then separately, Pat, I'm not sure if you guys are going to be doing a -- another earnings call early next year or not. But maybe for the year or so, while you guys are owned in trust, maybe can you just outline what your key priorities are for the business? Is it network operations? Is it growing the business? Is it earnings cash flow? Just what are you going to be focused on for that year or so.

I don't think it's going to change too much from what we are doing now, which is just improving network operations, being prepared to really take advantage of all of the growth opportunities that we believe are in front of us, whether it's the -- for the next year or so that we're in trust, or whether it's way beyond that. Certainly, you know the story of the CP-KCS merger thesis, it's all about growth. So we want to do everything we can to get our network prepared to handle our part of that. And I think I feel -- and Mike said it well, we're set up for that. We really believe that some of the revenue headwinds that we've been experiencing are still transitory. We can argue about how long period of time you are able to declare something transitory, but certainly the auto industry, no doubt that's going to return and we got 16 auto plants in Mexico and we -- when that business comes back, it could come back very strong. So I think it's going to be capital efficiency. It's going to be improving the performance of our network and doing all the things that we can. I've certainly dusted off the service begets growth mantra for the last few months, kind of not getting through COVID, that seem to fall by the wayside a little bit, but I don't think there's going to be any -- other than obviously dividend and capital allocation in terms of share repurchase and that type of thing, that will change. But I think in terms of focusing on the core elements of the business and John, and the operations team continuing to just get better in capital expenditures where we think we really need them to be prepared for growth. A good example is the second bridge at Laredo. We're definitely full steam ahead on that project, because we think that's going to be necessary. As far as the first question about the expedited merger review, I don't know when we will. I'm looking at Adam Godderz here, when we might have more clarity on whether the STB is going to accept that timeframe.

Yes, Scott, this is Adam, Pat is exactly right. I don't know that we have a good answer for you right now. Obviously, we're working on the merger application and I think we're in good shape to file that in the very near future, which will then really start that clock on the process for reviewing the full merger with the STB. I think we're still sort of holding true to the projection that the final merger approval, if you will, will be obtained there in the second half of 2022. But at this point, that's the best guidance we can give.

Okay. Thank you guys. Appreciate it.

Thank you, Scott.

Our next question comes from Bascome Majors from Susquehanna. Please go ahead with your question.

Yes, thanks for taking my question. Clearly, you're optimistic that a lot of the volume challenges are going to come back and you're resourcing appropriately. Can you talk through maybe parts of your business where you think demand has been lost, semi permanently or permanently? Just trying to think about where you're less optimistic about a snapback in a mid-term timeline? Thank you.

I guess, I'll start with that one. Coal has been very good to us here recently. Demand is higher and natural gas prices have supported use of coal. But as you know, that is something that tends to be very volatile, even though it's a small portion of our book and we're optimistic on that. Certainly going into the first half of next year, I'd say that some of the coal tailwinds that we've had are at risk and moving into the future.

Thank you.

Our next question comes from Brandon Obolensky from Barclays. Please go ahead with your question.

Hey, good morning, everyone and thanks for taking my question. Pat, I guess if we can just follow-up from Scott's question about priorities in 2022. It seems like some of these issues can be recurring, especially at the teachers strike. And obviously you don't know, like what regulations can change your end markets. But how do you build in more resiliency and variability in the model such that you can maintain operating ratio improvement going forward?

I think I'll maybe take a stab at that and ask John to comment on that. But I think it's just the improvements that we've made in some of the fundamentals and the focus on the way we operate. We needed to clear out some of the congestion and the issues that really caused us to get choked up. But I would say now that we really believe a lot of that is behind us and we're in a position where the network is performing extremely well. The one statistic that John mentioned was the grain cycles. I don't -- I mean, 15 years I've been here, I don't think we've ever seen grain cycle times for cross border grain going from Western Illinois all the way into deep into Mexico have ever been this good. So as the volume comes back, I think we are in really good position to handle that and handle it very efficiently because of the things we did during the third quarter to get the network back to a very high level of performance. So, John, in terms of resiliency and ability to handle these events and growth in the future. I don't know if you want to add to that.

Yes, thanks, Pat. It's a great question. And the reality is in the rail industry and any transportation ecosystem, there's always something going on somewhere, it's either a headwind or tailwind and the development of the team and the capability of perspective, execution capacity and deliverables are what separates leveraging up on the spot opportunity, or dealing effectively with interruption. Teacher strike, the refined fuel product issue and even some of the weather issues that we've had to deal with are not unique, especially to KCS to happen across a lot of airways. But the -- for me, it's the resilience of the team, the vertical and lateral alignment of operations, the commercial team and finance team to always be working on continuous improvement is the starting point. And you're right, Pat, when I look at the principles and the discipline that surround the improvement on the green -- cross border green supply chain, taking it down from 27 days to 15 days over the course of 5 or 6 months, is really the team diving into every segment of that supply chain, offline partners, first mile terminals, last mile terminals across two countries and across the border and breaking it down into manageable incremental improvements and setting standards. It's the same through any asset allocation, any people monitoring people support, and making that happen. So from my view, we're looking at what we've learned from continuous improvement. Where are the barriers. And we've got now a catalog of capacity improvements for the next 3 to 5 years based on a reasonable projected growth, based on the some of the headwinds we bumped up against through the course of this continuous improvement agenda. And when we look at it from a product level and view from PSR, making sure that…

Thank you.

And ladies and gentlemen, our next question comes from Jeffrey Kauffman.

Hello, thank you for taking my question. In light of some of the operating challenges with the autos and with what's going on in Lazaro, has there been any thoughts about the capital budget in terms of network investment? Are we still sticking with the same numbers that were out there? And I guess I was just wondering how your thoughts are shifting on that given the environment and some of the supply chain challenges?

Yes, we're not changing our focus on the required CapEx spend to support the growth in the business. We're much longer term thinkers and just a quarter ahead we have a lot of confidence we will continue to grow this business post combination with CP. A lot of revenue synergy is available to the combined network here that would suggest us that we keep our plans intact and make sure that we can handle the kind of volume that we've historically been able to deliver on this network. So no change at all.

Okay, that's my one. Thank you.

Thank you.

And ladies and gentlemen, with that we will be concluding today's question-and-answer session. I now like to turn the conference call back over to Mr. Ottensmeyer for any closing remarks.

Thanks everyone for your attention. We'll do our best to keep you all posted as things develop on the merger timeline front and look forward to seeing you all at conferences around the market here in the future. Thank you.

And ladies and gentlemen, that will conclude today's conference call. We do thank you for attending today's presentation. You may now disconnect your lines.