Katie U. Cook - Director-Investor Relations James A. Squires - President, Chief Executive Officer & Director Alan H. Shaw - Chief Marketing Officer & Executive Vice President Mark D. Manion - Chief Operating Officer & Executive Vice President Marta R. Stewart - Chief Financial Officer & Executive Vice President Finance

Allison M. Landry - Credit Suisse Securities (USA) LLC (Broker) Alexander Vecchio - Morgan Stanley & Co. LLC Scott H. Group - Wolfe Research LLC John Barnes - RBC Capital Markets LLC Chris Wetherbee - Citigroup Global Markets, Inc. (Broker) Jason H. Seidl - Cowen & Co. LLC Bascome Majors - Susquehanna Financial Group LLLP Robert H. Salmon - Deutsche Bank Securities, Inc. Matt Troy - Nomura Securities International, Inc. Kenneth Scott Hoexter - Bank of America Merrill Lynch Brian Colley - Stephens, Inc. Cherilyn Radbourne - TD Securities Ben J. Hartford - Robert W. Baird & Co., Inc. (Broker) J. David Scott Vernon - Sanford C. Bernstein & Co. LLC Thomas Wadewitz - UBS Securities LLC Brandon Robert Oglenski - Barclays Capital, Inc. Brian P. Ossenbeck - JPMorgan Securities LLC Jeff A. Kauffman - The Buckingham Research Group, Inc. Cleo Zagrean - Macquarie Capital (USA), Inc. Tom Kim - Goldman Sachs & Co.

Greetings. Welcome to Norfolk Southern Corporation Second Quarter 2015 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Katie Cook, Director of Investor Relations. Thank you, Ms. Cook. You may now begin.

Thank you, Rob, and good morning. Before we begin today's call, I would like to mention a few items. First, the slides of the presenters are available on our website at norfolksouthern.com in the Investors section. Additionally, transcripts and downloads of today's call will be posted on our website. Please be advised that during this call, we may make certain forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties, and our actual results may differ materially from those projected. Please refer to our annual and quarterly reports filed with the SEC for a full discussion of those risks and uncertainties we view as most important. Additionally, keep in mind that all references to reported results excluding certain adjustments, that is non-GAAP numbers, have been reconciled on our website in the Investors section. Now, it is my pleasure to introduce Norfolk Southern's CEO and President, Jim Squires. James A. Squires - President, Chief Executive Officer & Director: Thank you, Katie. Good morning and welcome to Norfolk Southern's second quarter 2015 earnings conference call. With me today are our Chief Marketing Officer, Alan Shaw; our Chief Operating Officer, Mark Manion; and our Chief Financial Officer, Marta Stewart. Now, let's go straight to the financial results. Our reported second quarter earnings were $1.41 per share, 21% lower than last year's record results. The decrease was largely due to lower coal volumes and lower fuel surcharge revenues. These are challenging conditions, but there's some good news as our business mix undergoes a significant change. Our intermodal volumes top last year's second quarter record levels. And our merchandise volumes were up for the quarter as well despite pressure in the steel market. Moreover, revenue per unit, excluding fuel surcharges, was positive for merchandise as well as for intermodal, which was…

Thank you. We'll now be conducting a question-and-answer session. Due to the number of analysts joining us on the call today, we'll be limiting everyone to one primary question and one follow-up question to accommodate as many participants as possible. Thank you. Our first question is from the line of Allison Landry with Credit Suisse. Please go ahead with your questions. Allison M. Landry - Credit Suisse Securities (USA) LLC (Broker): Good morning. In terms of the service performance, when do you expect to have the network back in balance? And could you quantify for us the impact of the inefficiencies in the second quarter? James A. Squires - President, Chief Executive Officer & Director: Good morning. It's Jim. Let me take a first stab at that. We've made significant improvements in service in the second quarter. Velocity and terminal dwell are both trending favorably and we're making a lot of headway on our internal composite service metric as well. So we continue to – we expect that trend to continue in the second half as well, in the third quarter and through the fourth quarter. And that will continue to be our goal to push service ever higher. Mark, would you like to comment next? Mark D. Manion - Chief Operating Officer & Executive Vice President: Only to say we've made a lot of progress. I mean if you think about it what we've accomplished so far, we're about 90% of the way toward our – what has been our historical high in the past. And we have every intention of getting all the way there, so. James A. Squires - President, Chief Executive Officer & Director: Marta, why don't you comment on the resource implications in the second half? Marta R. Stewart - Chief Financial Officer & Executive…

Our next question is from the line of Bill Greene with Morgan Stanley. Please proceed with your questions. Alexander Vecchio - Morgan Stanley & Co. LLC: Good morning. It's Alex Vecchio in for Bill. So you mentioned that you expect the domestic utility coal to run about 20 million tons per quarter and you lowered the export coal run rate to about 3 million tons. You also talked a little bit about some other commodities. But when we kind of take it all together can you give us a sense of what's embedded in your expectations for total volumes on a year-over-year basis in the back half of 2015? Do you think 4Q volumes might be positive on an easier comp, or should we be expecting kind of volume declines to persist for the balance of the year? Alan H. Shaw - Chief Marketing Officer & Executive Vice President: We see some fundamental growth in many of our markets, which we expect to continue into the second half of the year. The overhang we're going to see is the fuel surcharge revenue that Marta referenced, which is going to kind of mask the core pricing gains and the volume growth that we're seeing in other markets. Alexander Vecchio - Morgan Stanley & Co. LLC: Okay. Do you have a sense for like how the total carloads might track, though, in the back half? Alan H. Shaw - Chief Marketing Officer & Executive Vice President: We expect that it'll be up over last year. Alexander Vecchio - Morgan Stanley & Co. LLC: Okay. That's helpful. And then just specifically on the lowered expectations for 4Q revenues to be actually down year-over-year instead of I think slightly up was your prior expectation. Is that entirely attributable to either the export coal and fuel surcharge or are there other areas that kind of contributed to that slightly lower outlook on the fourth quarter? Alan H. Shaw - Chief Marketing Officer & Executive Vice President: Good question. The other primary driver of that would be reduced crude oil volumes. And you can see that very easily as you take a look at Brent and WTI pricing. Alexander Vecchio - Morgan Stanley & Co. LLC: Okay. Great. Thanks very much for the time.

Our next question is from the line of Scott Group with Wolfe Research. Please proceed with your questions.

Hey. Thanks. Morning. James A. Squires - President, Chief Executive Officer & Director: Morning, Scott.

So, Marta, you guys have been giving a little bit more transparency, which has been helpful. Wondering if you have a comfort kind of telling us that second quarter is the bottom for earnings and we should see sequential earnings improvement from second quarter to third quarter or if maybe from a margin standpoint, we see less of a margin headwind from – in third quarter than we did in second quarter, if you feel comfortable there. And then maybe specifically on the $47 million of lower incentive and stock-based comp, do you have any rough guidance on that for the third quarter and fourth quarter? Marta R. Stewart - Chief Financial Officer & Executive Vice President Finance: Okay. Well, let me start with the second question first. The stock-based comp did have a very large decrease in the second quarter of this year, and that's primarily because of the comp with the second quarter of last year. As you know, that was an all-time high quarter for us and so the accruals that quarter were very high, therefore, the relative comparisons. Going forward into the third quarter and fourth quarter, we think we still will have favorable comparisons in that line item, but they won't be to the degree they were in the second quarter. And then moving on to the rest of the year, kind of overall, and I think it's really driven by the things Alan discussed with coal and crude. But we expect that some of the comps will get a little bit easier otherwise, and so, we do expect a somewhat of an improvement going into the back half. Alan H. Shaw - Chief Marketing Officer & Executive Vice President: Yeah. Volume comps will improve as we get deeper into the second half of the year.

Okay. That's helpful. And then maybe one last one for Jim or Alan, just big picture as I think back the past five years or so. You guys have seen some of the better volume growth in the industry, but yield growth has lagged the other rails. Do you see that changing or the focus changing where you start to get more pricing and maybe sacrifice a little bit of volume going forward? James A. Squires - President, Chief Executive Officer & Director: Scott, it's Jim. Yeah. I think you put your finger on the issue in the second quarter in particular, and for the balance of the year, albeit the next couple of quarters ought to be less worse. And so, yes, we certainly are going to lean into revenue per unit growth. The encouraging thing about even the second quarter was outside of coal, growth in revenue ex-fuel surcharge impacts, and we would expect that to continue for the balance of the year. So we're seeing that positive trend in overall mix. And we're going to continue to push on that along with core pricing. We're satisfied with the level of core price increases that we have experienced so far this year. And we're going to continue to push that based on market conditions at a rate better than real cost inflation.

Okay. Thank you, guys. Marta R. Stewart - Chief Financial Officer & Executive Vice President Finance: Welcome.

Our next question is from the line of John Barnes with RBC Capital Markets. Please proceed with your questions.

Hey. Good morning. Thank you for taking my question. A couple of things on the service side, going back there for just a second. You talked about crew starts still being up in the quarter despite carloads being down on a year-over-year basis. Are you getting towards a better ratio of crew starts to carloads and is that where you start to see that improvement from, say, that $25 million drag to the $5 million drag on the efficiency cost? James A. Squires - President, Chief Executive Officer & Director: Mark, why don't you take that one? Mark D. Manion - Chief Operating Officer & Executive Vice President: Okay. I'd be glad to. We are seeing improvement particularly as we got into the latter part of May and June. And we think that we'll continue to see improvement as the velocity of the railroad picks up and obviously helps the crew starts. We really, in a big way, reduced our re-crews these last couple of months. We feel that trend will continue.

All right. Very well. And then, lastly, as my follow-up, the other rails have all – as part of their earnings announcements – have been pretty vocal about furloughs and locomotives and storage. You didn't provide really near the degree of color around that. Is it that you haven't really started the furlough plan yet? Is it that you're still winding through and dealing with the service so you haven't yet started that? And the same thing on locos, I mean, it sounds like you put some in storage, but can you give us a feel for maybe the numbers in storage and where you stand on just resources kind of in the pipeline? Mark D. Manion - Chief Operating Officer & Executive Vice President: Yeah. Sure. I'd be glad to. First of all, on the locomotive side, we have begun storing. We're at about 50 locomotives in storage right now. And we're going to be able to continue storing. I'd like to see us get up in the 200 range, not sure just how quickly we can do that, but that's the plan. And again as the velocity improves, it'll help us do that. On the crews side, we haven't furloughed because we haven't had the need to furlough. We're trying to be really measured and balanced as far as the hiring goes. And we're getting this, as I indicated in the remarks, we are reaching that point where we are about at a balance and we are tapering off on the hiring now. But – and we will probably see – we're beginning to see indications in just very few select spots where there would be a possibility of furlough going forward, but I don't think it's going to be a big number. And if you look back through history, our number on the furlough side just hasn't been quite as high as what some of the other railroads experience. So we'll see how it goes. But I don't think we're going to have a big furlough number. We're trying to hire the right number of people. James A. Squires - President, Chief Executive Officer & Director: I would characterize our resource plan in the second half as one of stabilization. And you heard Mark say earlier that we're trending towards attrition-based hiring in the second half. Similarly, we're starting to put locomotives up. We have a few more units coming online, but very few. And we can pivot on resources if we have to. If we see the trend in car loadings moving against us, then we can obviously pivot quickly in resources. And we demonstrated that in the second quarter by reducing our capital spending for the year as Marta mentioned now, and we're doing so without hurting the long-term prospects of the enterprise or really disrupting our reinvestment plan. But we certainly can modulate resources and we will if necessary.

Thank you. Our next question is from the line of Chris Wetherbee with Citigroup. Please go ahead with your questions.

Hey. Thanks. Good morning, guys. Can you maybe comment a little bit more about pricing? You kind of highlighted that sequentially. I think we saw a bit of a step-up in the pricing dynamic. I just wanted to get a rough sense of sort of maybe how big is – what the magnitude of that was and maybe how you think about sort of the opportunity. How much more do we have as we go through this year? Does it still feel like sort of the underlying businesses where you are getting growth or still relatively ripe for that? James A. Squires - President, Chief Executive Officer & Director: Thanks, Chris. I will let Alan address that. Alan H. Shaw - Chief Marketing Officer & Executive Vice President: Certainly. Chris, we are seeing market-based pricing that is generally above rail inflation. And the good point for us is that we're seeing it in our growth markets. We're seeing it in intermodal where our RPU was up – ex-fuel, was up 3% in the second quarter. And we expect that kind of growth to continue. There's a latent demand for rail capacity out there. And the prices that we're putting out into the market are holding and we expect that to continue.

Okay. That's helpful. And then when you think about the buyback in the second half of the year, you've stepped forward, I think, in the first half, so far and bought back a decent amount of shares. I guess when you think about sort of the second half outlook, should we expect more of the same? Just want to get a rough sense at these levels or how you see that opportunity playing out. James A. Squires - President, Chief Executive Officer & Director: Marta, why don't you take that one? Marta R. Stewart - Chief Financial Officer & Executive Vice President Finance: So, we have previously guided to a full year share buyback of $1.2 billion and we're still on track for that.

Okay. So that's the way we should think about the back half. Marta R. Stewart - Chief Financial Officer & Executive Vice President Finance: That's correct.

Okay. Thanks for the time. I appreciate it. Marta R. Stewart - Chief Financial Officer & Executive Vice President Finance: Thank you.

Our next question is from the line of Jason Seidl of Cowen & Company. Please go ahead with your questions. Jason H. Seidl - Cowen & Co. LLC: Thank you very much and good morning, everyone. I wanted to touch on intermodal a little bit. You referred to it, obviously, as one of your growth markets, and obviously, it's done well over the last couple years. Wanted to ask, have you guys lost a little share back to the trucking market? We've seen some of the major truckload carriers add a little capacity out here and the East is a little bit more competitive. James A. Squires - President, Chief Executive Officer & Director: We'll let Alan address the specifics of the volume trend in the second quarter. But let me just say intermodal will continue to be one of our growth opportunities – truckload diversions in general both intermodally and in our merchandise sectors as well. And the other really encouraging thing about the intermodal revenue trend now is the increase in revenue per unit, as Alan mentioned earlier. Alan? Alan H. Shaw - Chief Marketing Officer & Executive Vice President: Yeah. Number one, we are facing pretty difficult comps. Our intermodal franchise grew 11% in the second quarter of last year. And so, we posted growth on top of that. Truck capacity, as you noted, has improved, but it still trails demand. And you can see that empirically in the fact that truckload pricing continues to move up, which gives us not only a good outlook for what our volumes are going to look like long term, but also what our price is going to look like. We are seeing really strong growth on our internationals segment where our customers are shifting more volume to our East Coast…

Thank you. The next question is coming from the line of Bascome Majors with Susquehanna. Please go ahead with your questions.

Yeah. Good morning. So, I wanted to focus a little more on seasonality now that you've reported a full quarter with the fuel surcharge headwind, and presumably as steep as it can get with the WTI-based programs with the $64 trigger now at zero. The volume trend on a year-over-year basis seems to be stabilizing; the service levels are improving as you talked about earlier. So, looking forward, second half is consistently seasonally stronger than the first half for you guys. But the Street consensus is modeling second half versus first half earnings increased at a pretty steep level. It looks like the steepest since 2009. So, just from a high level, do you think – are you looking for an above seasonal outcome in the second half year? James A. Squires - President, Chief Executive Officer & Director: Well, Bascome as we said earlier, we do expect second half results to be less worse than we experienced in the first half. However, we still do face some significant headwinds, particularly in the third quarter. Fuel surcharge revenue in the third quarter of last year was still running strong, just below second quarter fuel surcharge levels in 2014 – pardon me, just above so actually, it's a little bit tougher headwind in the third quarter. In addition, we do have the extra Roanoke-related expenses we flagged. In other areas of expenses, we would expect a more favorable trend. Alan, would you like to comment? Alan H. Shaw - Chief Marketing Officer & Executive Vice President: Yeah. I think, that we are going to see – we'll have better comps in the fourth quarter with respect to volume than we will in the third quarter. And we're still right now exposed to foreign exchange risk and the prices – mainly the commodities that we handle, and we see that with coal and – with coal, crude oil and steel right now.

All right. Thanks for the color, guys.

Thank you. Our next question is from the line of Rob Salmon with Deutsche Bank. Please go ahead with your question.

Hey. Thanks. If I could turn the discussion a little bit back to the intermodal side of the business particularly the domestic side, how much do you think that, in terms of the volume growth deceleration, was a result of some of the pricing initiatives, service not being quite where you guys wanted, although it's continuing to get better as well as just some softer broad-based demand that we saw last quarter. James A. Squires - President, Chief Executive Officer & Director: Alan, why don't you comment on that? Alan H. Shaw - Chief Marketing Officer & Executive Vice President: Yeah. As we take a look at our second quarter domestic intermodal business, I think the headwinds and the factors that limited our growth are temporary. Number one is the West Coast port issue. As you were probably aware, much of or a high percentage of the volume that comes in the West Coast in 40-foot containers gets re-stuffed into 53-foot boxes and moves transcon, anywhere between 25% and 40%. That would show up normally in our domestic volumes, but did not this quarter. So that was a limiting factor, particularly early in the quarter. And then while we didn't lose business to truck due to service, it limited our ability to grow. And we're working hard, we're improving our service, and we think that will be behind us.

And do you think that some of the pricing initiatives that you guys kind of undertook did have an impact one way or the other in terms of the domestic volumes? Alan H. Shaw - Chief Marketing Officer & Executive Vice President: No. We see that truckload pricing is actually up this year. Our customers are increasing their pricing. And so, it's just the overall healthy environment for pricing and the truck market right now. It's just not growing as much as it did this time last year.

And would you expect pricing as we look out to next year to be in line with kind of what you're experiencing this year? Or do you expect that to potentially improve, given the better service proposition? Or are you a little bit cautious about some of the more balanced supply/demand in the truckload marketplace? Alan H. Shaw - Chief Marketing Officer & Executive Vice President: Yeah. I'll address that long term. We feel that the fundamentals are there for long term for increased demand for highway-to-rail conversions. We're taking a long-term view of this as our customers when we sit down and we figure out our relationship going forward and the need to ensure rail capacity and pricing.

All right. Thanks so much for the time.

Our next question is from the line of Matt Troy with Nomura Securities. Please go ahead with your questions.

Thanks. Good morning, everyone. Just wanted to ask a question about intermodal and specifically the peak season. We've heard mix messages across the freight ecosystem about an inventory build in retail. We've certainly heard that from retail as substantially impacting volumes in June. Some folks expressing optimism, if you will, about a peak season perhaps being a little bit later, but it's just that optimism. I was just wondering based on the hard and real conversations you're having with your customers, what's your sense for the traditional peak? I know it's flattened in the last several years, but is it something that we should expect to see emerge in the third quarter? Is the initial read that it will be somewhat disappointing? I just wanted to get a sense of what your planning was given the resources on the network and your conversations with customers. James A. Squires - President, Chief Executive Officer & Director: Thanks and good morning, Matt. Alan, what's your sense of peak? Alan H. Shaw - Chief Marketing Officer & Executive Vice President: Well, as Matt had noted, it's relatively flat now and it's spread over the entire year over the last couple of years. Generally, peak, for us, has been associated with their national volumes that largely shows up in August and September. And as we've noted, our international volumes are really healthy right now. We've got a good franchise; customers are shifting more international volume to the East Coast ports. So there's opportunity for growth for us in the – in August and September in our international franchise.

Okay. And that international share gain obviously contributing to that, just – I'm wondering if you could help us, from a mix perspective, is that comparable in terms of length of haul versus when you're getting hand-off traffic from the West Coast carriers? Is it mix negative in that it might be a little bit shorter or is it moving further inland and actually into West Coast markets? Just wondering about that share gain and just what it meant from a mix implication on that Newport volume that have been diverted. Alan H. Shaw - Chief Marketing Officer & Executive Vice President: Yeah. I wouldn't say it's negative. It does allow us to generate more revenue density on a train and to the extent that we can provide more efficient service associated with that, then it certainly makes it more truck competitive.

Okay. Got it. Thank you, everybody.

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

Great. Good morning. Alan, just a little bit on the – on coal again. Just – you've seen accelerating downtick on your volumes overall – total volumes, almost 4% quarter-to-date. So is there anything dragging coal down further given you're down about 20% quarter-to-date? I get the 3 million ton outlook on international and that accelerates to – down, I don't know, 40%, 45% year-on-year. But are we seeing something on the domestic side? Maybe you could address on the utilities side a little bit. Alan H. Shaw - Chief Marketing Officer & Executive Vice President: All right. Ken, I think we're still going to hold firm with our projection of 20 million tons for domestic. That will be – and that's over the next 18 months to 24 months. So, it's going to be subject to weather conditions and just general demand. But, no, we really haven't seen anything right now on the domestic debt is any more alarming than what we've already guided to.

But you are seeing an accelerating down – I mean, right, we are seeing an acceleration on the downside? Alan H. Shaw - Chief Marketing Officer & Executive Vice President: For the first couple of weeks of this quarter, our domestic volumes are down versus last year, but we still feel good about 20 million tons for the quarter.

Okay. And then on the domestic side, I just want to revisit the individual lanes; can you talk about growth on the Crescent versus the Heartland and kind of where you're seeing that? Are you seeing growth differentials between the different lanes? Alan H. Shaw - Chief Marketing Officer & Executive Vice President: We are seeing – our primary growth drivers right now are on Crescent and on Heartland.

Can you provide us the updates like you used to on percentages, or do you no longer provide that level of detail? Alan H. Shaw - Chief Marketing Officer & Executive Vice President: We've seen Crescent and Heartland quarter volumes along with other targeted quarter volumes rise in line with the trends that we have seen the last couple of quarters if I recall. So, for example, Crescent was up 6% in the quarter, better than the overall domestic intermodal trend, Heartland was up 2%.

Okay. Just if I can follow up on the first one, Alan, just to let it go at this, but if we are at 20 million tons on domestic, I just want to understand, is that utility and steel and industrial or are you talking 20 million utility alone? Alan H. Shaw - Chief Marketing Officer & Executive Vice President: Ken, that would be 20 million utility alone.

Okay. So then, you're – just if you get the 3 million tons and 20 million utility – okay. Just there's quite a large differential between where you're trending now. So you're looking for a pretty big snap up in the last two months of the quarter, I guess, then? Alan H. Shaw - Chief Marketing Officer & Executive Vice President: Yes.

Okay. All right. Thanks for the time.

Our next question is from the line of Justin Long with Stephens. Please go ahead with your question.

Morning. This is actually Brian Colley on the call for Justin. So just wanted to talk about the negative mix impact we're seeing from coal, particularly with intermodal being the largest driver to carload increases for the rails. If this trend doesn't really have an end in sight, are there structural changes or pricing efforts where we could see you get more aggressive in order to mitigate this negative mix impact? James A. Squires - President, Chief Executive Officer & Director: Well, we certainly did see an effect from mix at a high level in the second quarter. And with coal being down as much as it was, that creates a challenge for us in terms of improving margin and growing the bottom line. With that said, our longer-term outlook is for coal volumes to stabilize. And now, we've guided down on the export side of the business for the foreseeable future. Now, that's been historically a very volatile part of the business. But the good news is, we think that we have seen and are at the bottom in terms of utility coals – the volume may vary from quarter-to-quarter depending on weather, in particular, but we think $20 million is a reasonable run rate at least for the next 12 months to 18 months or so. So, that would imply stabilization. We'll wait and see. Eventually, we will see supply come out of global market and we should see it boost the export coal volume as well. And that will help with the mix. In the meantime, we're going to grow intermodal, and we will grow merchandise volumes. That's one of three parts to our overall strategy: grow the top lines through pricing based on market conditions at a rate better than rail inflation; grow volume particularly intermodal and merchandise volume profitably. And secondly, we're going to work on return on capital by prioritizing capital spending in favor of revenue growth opportunities and profit margin. And third service. Continuing to improve service is really the key to both the top line growth and better returns on capital as well.

Thanks. And if I could just follow up real quick on that. I mean, just some of the rails have talked about this incremental margin framework of around 50% longer-term. Is that the right way to think about your business once we start to see volumes increase on a year-over-year basis? And if so, is that incremental margin framework only achievable at coal environment that's at least flat or stabilized? James A. Squires - President, Chief Executive Officer & Director: We do believe 50% incremental margin is a reasonable goal going forward. Now, that certainly – it would certainly (54:09) if coal volumes do in fact stabilize.

Great. Thanks for the time.

Thank you. Our next question is from the line of Cherilyn Radbourne with TD Securities. Please proceed with your questions.

Thanks very much, and good morning. I was just wondering if you could offer some thoughts on where you think head count will end the year versus last year. James A. Squires - President, Chief Executive Officer & Director: Marta? Marta R. Stewart - Chief Financial Officer & Executive Vice President Finance: Okay. So, previously, in our January and our April calls, we guided to the fact that we thought we would increase 1,000 in total from the fourth quarter of last year average. And we still think we're on that run rate. So if you look at the fourth quarter of last year to the first quarter of this year, we were up 500, then sequentially the first quarter to the second quarter another 100. So, net we're up 600 through June 30. So we expect that in the third quarter and fourth quarter, we'll be up an additional 400.

Okay. That's helpful. And then I think you have indicated that it's your intention over time to convert to on-highway, diesel-based fuel surcharge programs. Just wondering if you can provide any update on your progress year-to-date on that. James A. Squires - President, Chief Executive Officer & Director: I'll let Alan address that. That is a goal. We recognize that there's been a bit of a mismatch in having our revenues fuel surcharges based on WTI with expense obviously based on diesel prices. So, Alan, why don't you talk about our plan for reducing some of that volatility? Alan H. Shaw - Chief Marketing Officer & Executive Vice President: One way to reduce the volatility would be to shift the benchmark from WTI base to an on-highway diesel. We're going to approach that with our customers as individual contracts expire. The average duration of our contract is a little bit over three years. So it is going to take some time to make a meaningful shift in that. And we are also committed during that time period not to sacrifice market-based pricing for premature shift in the fuel surcharge program.

Okay. Thank you. That's all for me.

Our next question is from the line of Ben Hartford with Robert W. Baird. Please proceed with your questions. Ben J. Hartford - Robert W. Baird & Co., Inc. (Broker): Yeah. Thanks. Marta, real quick, could I get your perspective on the dividend? I noticed on Friday the announced dividend for 3Q was flat relative to 2Q. It looked like that was the first time that has been the case sequentially, 2Q to 3Q since 2009. Can you talk about some of the components that drove that decision not to raise the dividend sequentially and maybe just provide perspective on what you expect the dividend policy to be going forward? Marta R. Stewart - Chief Financial Officer & Executive Vice President Finance: Well, our dividend policy just overall – stepping back – our dividend policy long term is to – is a one-third payout ratio. So, in the past, we have sometimes raised the dividend in July and sometimes not. So that's not really a departure from what we've done over the years. You're correct that the last couple of years, we have raised in January and July. So we feel comfortable with the $0.59. We feel comfortable where we are with our payout ratio, and then the future of course will be guided by our future profitability. Ben J. Hartford - Robert W. Baird & Co., Inc. (Broker): Okay. That's helpful. Thank you.

Our next question is from the line of David Vernon with Bernstein Investment Research. Please go ahead with your questions. J. David Scott Vernon - Sanford C. Bernstein & Co. LLC: Great. Thanks for taking the question. Hey, Alan, maybe just to – could you talk a little bit about the coal pricing trends in the fuel business, sort of ex-fuel. That number was down a lot – a little bit more than it has been in the past. I'm just wondering if that was all fuel decline or if you're also seeing some negative mix or some possible price declines in there. Alan H. Shaw - Chief Marketing Officer & Executive Vice President: Hey, could you repeat that? J. David Scott Vernon - Sanford C. Bernstein & Co. LLC: Well, as you think about the coal pricing ex-fuel? Alan H. Shaw - Chief Marketing Officer & Executive Vice President: Coal? J. David Scott Vernon - Sanford C. Bernstein & Co. LLC: Yeah. Alan H. Shaw - Chief Marketing Officer & Executive Vice President: Okay. Yeah. There were – we did see a decline in our pricing with respect to coal. A lot of that has to do with mix changes as you know, export tends to be a longer haul move for us than utility. So, a 38% decline in export, coal volumes in the quarter is going to have a disproportionate impact on our overall RPU ex-fuel. J. David Scott Vernon - Sanford C. Bernstein & Co. LLC: So it was predominantly mix? There wasn't another step down in export rates or any pricing action on the utility coal business in the quarter? Alan H. Shaw - Chief Marketing Officer & Executive Vice President: I would say, it was – it's predominantly mix. We're looking at each of…

Thank you. Our next question is from the line of Tom Wadewitz with UBS. Please go ahead with your questions.

Yeah. Good morning. Jim, I wanted to ask you a question. It's – I guess notable, you did lower the CapEx number this year. And I know that sometimes that's tricky to do when you're in the midst of a year and you have to plan these things ahead of time. So that's notable. Do you think your approach in terms of managing the company is going to be a little more aggressive in terms of paring back on CapEx versus maybe what we've seen over the last eight years or so, 10 years? Is that a fair way to look at it? And if so, how would you think about 2016-2017 CapEx? Could those fall a bit from where we're at this year? James A. Squires - President, Chief Executive Officer & Director: Good morning, Tom. Let me comment first on the 2016 mid-year reduction. We did make the decision to reduce capital somewhat this year. I wouldn't make too much of it. It was a rather modest 5% reduction, but we saw an opportunity and we jumped on it. We're trying to be disciplined with our capital spending. And as I said, target revenue growth with our CapEx and profit margin. Going forward, we will try to manage capital spending ex-PTC down to about 15% to 17% of sales. Now, that may take a while. That's a big change from the level of capital spending where we've been. But we recognize the need to be judicious with capital reinvestments. We're committed to the business. We're absolutely going to reinvest in core assets on a steady-state basis, but we will also be mindful of the need to drive returns through better capital turnover as well. And that means prioritizing capital toward revenue growth.

Right. So that doesn't sound like a big change, but maybe somewhat of a tweak in terms of the way you look at CapEx? James A. Squires - President, Chief Executive Officer & Director: Right. Exactly.

Okay. And then as a follow-up, and I think, Jim, this is probably for you and for you Alan. What about on pricing? Is there also room for not a major change, but a little bit of a tweak where you say we're going to be a little bit more focused on price versus volume whereas in the past we've been looking at both price and volume, but maybe a little bit more focused on volume? James A. Squires - President, Chief Executive Officer & Director: Well, I wouldn't say we've held back in terms of our pricing emphasis in the past. So no real change there either. But we are determined to raise prices in line with market opportunities and market conditions at a rate better than rail inflation. That is our goal. We recognize that that's a vital part of growing our top line. Alan, you want to comment on that? Alan H. Shaw - Chief Marketing Officer & Executive Vice President: Yeah. I would say that, looking forward, particularly in our growth markets, price and volume are not mutually exclusive. We're investing long term. Our customers are – see the same issues in the trucking industry that we do. And they're looking for long-term partnerships.

Okay. So, no real change in price versus volume for you guys versus the prior team. Obviously, you're part of the prior team, but I'm just saying given your – you know you could tweak things on the margin given your new positions. James A. Squires - President, Chief Executive Officer & Director: Listen, we want both. We want both pricing and volume growth. And we think we can get both. We're going to lean into pricing. We recognize that's critical part of growing the top line. But we see lots of volume growth opportunities out there as well. Truck conversions will continue to be central to our volume growth strategy, and that means intermodal but also carload. So, yes pricing, yes volume growth.

Right. Okay. Thank you. Appreciate it.

The next question is coming from the line of Brandon Oglenski with Barclays. Please go ahead with your questions.

Hey. Good morning. Thanks for taking my question here. Alan, I hate to keep harping on this, but it does look like in the last five weeks or so, and this is really near term, by the way, but your volume run rate has definitely steps below 150,000 units per week. So, from our perspective, it looks like things are sequentially deteriorating. And I know you're calling for sequential improvement. So is there something about the last six months or two months that we shouldn't be that concerned with that will come back in your network as we go through the fourth quarter this year? Alan H. Shaw - Chief Marketing Officer & Executive Vice President: No. I would say we are keeping a very watchful eye on it. And a lot of the decline that we've seen over the last four weeks to six weeks as you've noted has been associated with our export coal franchise, which we've previously discussed.

Okay. Appreciate that. And, Jim, I guess following up on that line of questions there. Norfolk has seen pretty good volume growth the last five years under Wick, and obviously, the OR was flat. I know you had a lot of coal headwinds through that period. You did say that you think coal markets are at a bottom. But I feel like we've had that conversation on this call for three years or four years now where we think things have bottomed, but then natural gas prices go lower or another external shock happens with coal and we're again facing that same headwind. I'm sure it's not lost on you that your OR is now probably the highest amongst the major railroads here that are publicly-traded. So what can investors expect from you as CEO? Are we going to aggressively attack the OR with cost reductions even if coal doesn't stabilize from here? James A. Squires - President, Chief Executive Officer & Director: You bet. I mean, we absolutely are determined to lower our operating ratio. I think we have the ability to do so. And let me just reiterate, our strategy here, it's a three parts strategy. The first thing we're going to do is grow the top line. Now, that'll obviously be easier if coal volume stabilize. But we're determined to grow volume and pricing. And secondly, we are going to push on return on capital by prioritizing capital spending around revenue growth, recognizing that it is in capital turnover where we have lagged in the past few years. And third, service is the key to all of this. And I'm really pleased to report that we saw service and network improvements in the second quarter. We expect those to continue in the second half. So, the way we look at it, there's been progress evident on all fronts in terms of the top line growth with the exception of coal which faces clear near-term headwinds. We did see growth in merchandise and intermodal revenue ex-fuel surcharges. So that's very positive. Secondly, in terms of return on capital, longer-term story, but we demonstrated our willingness to take a look at our capital spending plan in the second quarter, and we will continue to do so in line with our previous comments. And third, service is the key of it all, and we saw service improvements in the second quarter, which we expect to persist in the second half.

Thank you.

Our next question is from the line of Brian Ossenbeck with JPMorgan. Please go ahead with your questions.

Thank you and good morning. Thanks for taking my call. So, on the strength of merchandise, I just wanted to ask for a bit of characterization of the NGL market opportunity out of the Marcellus and Utica. It looks like chemicals was clearly a good area for carload growth this quarter. How early do you think you are in pursuing that opportunity? Are there other fractionators, other facilities coming online? And maybe from a mix perspective, if you could characterize kind of the length of haul relative to the overall portfolio? James A. Squires - President, Chief Executive Officer & Director: Alan, why don't you tackle that one? Alan H. Shaw - Chief Marketing Officer & Executive Vice President: Sure. There is additional capacity coming online in the fractionator area, also with current fractionators expanding. And so, we continue to see growth in that. The length of haul is really no different from what else we're handling. I will tell you in the chemical arena, the other headwind we are facing though is crude oil. And that's been another decline for us in the last couple of weeks. So back to the earlier question of what's changed in the last four weeks to six weeks, it's effectively export coal and crude oil.

Okay. Thanks. And then just one quick follow-up on coal and maybe just answer some of the questions about the possibility for it to improve in the third quarter and beyond. Where the inventory levels at the utilities? I think in the past quarter is around 70 days for the South, which is right around target. The North was a little bit above where average was. And if you could just update us with those numbers. Alan H. Shaw - Chief Marketing Officer & Executive Vice President: Yeah. On average, the utility stockpiles are about 20 days above target, about 25 days up in the North and 15 days in the South.

Okay. And South target is 70 or so and the North is 50 roughly? Alan H. Shaw - Chief Marketing Officer & Executive Vice President: Right.

Okay. All right. Thanks a lot for the color.

Thank you. The next question is from the line of Jeff Kauffman with Buckingham Research. Please go ahead with your questions.

Thank you very much. Hey, guys. Quick question, I want to go back to the question you had on length of haul and mix in the coal franchise. I understand the export tends to be longer-haul coal and that would be mix impact. But when I'm running the algebra, it looks like your length of haul was down almost 7%, 8% on the coal franchise? I'm just doing basic math dividing revenue ton miles by tons. Can you talk about some of the other mix elements going on? Because I thought the story was we're sourcing more out of Illinois, a little less out of Central App. In theory, that should have been additive to length of haul. So could you discuss a little bit more on what's going on with mix in the coal area? Alan H. Shaw - Chief Marketing Officer & Executive Vice President: Yeah. We did have some spot moves in the second quarter of last year that were longer length of haul. And our utility South network tends to be a little bit longer length of haul than our utility in North.

Okay. So that was the primary driver of the mix differential. And does that continue into 3Q? Or was that more of a second quarter effect? Alan H. Shaw - Chief Marketing Officer & Executive Vice President: Well, it depends upon are you comparing it sequentially? Or are you comparing it year-over-year?

Let's go year-over-year. Alan H. Shaw - Chief Marketing Officer & Executive Vice President: Then I would say that that does continue into the third quarter.

Okay. And then Ken Hoexter's question similarly, you identified the 20 million as just being domestic utility, the 3 million being export. So, really no change in your view in terms of coke, iron ore or domestic industrial? Alan H. Shaw - Chief Marketing Officer & Executive Vice President: Right. Correct. Which also, to your point, tends to be a shorter length of haul.

Right. And fewer tons per car. Guys, thanks. James A. Squires - President, Chief Executive Officer & Director: Welcome. Alan H. Shaw - Chief Marketing Officer & Executive Vice President: Yeah.

Thank you. The next question is from the line of Cleo Zagrean with Macquarie. Please go ahead with your questions. Cleo Zagrean - Macquarie Capital (USA), Inc.: Good morning. Can you hear me all right? James A. Squires - President, Chief Executive Officer & Director: Yes. Good morning, Cleo. Cleo Zagrean - Macquarie Capital (USA), Inc.: Good morning. My first question relates to merchandise yields. With (01:11:27) down 10% year-over-year and a continuation of the first quarter, perhaps down low single-digit ex-fuel. Can you help us understand any change in trend there in terms of mix and same-store sales into the second half and maybe next year? Thank you. James A. Squires - President, Chief Executive Officer & Director: Cleo, actually, RPU, excluding fuel surcharge in the merchandise segment was favorable in the second quarter. Cleo Zagrean - Macquarie Capital (USA), Inc.: I was referring to revenue-per-ton mile what people may also call yield. James A. Squires - President, Chief Executive Officer & Director: Revenue-per-ton mile. Well, let me just say that our expectation is that we will see a continuation of core pricing, same-store sales pricing at a rate in line with market conditions and better-than-real inflation. And so, that's a trend that you saw when looking at it at the level of RPU, ex fuel surcharges in the second quarter. And as we've said, we expect that to persist especially in merchandise but also in intermodal in the second half. Alan, did you want to add anything to that? Alan H. Shaw - Chief Marketing Officer & Executive Vice President: Yeah. I'd say that were some mix impacts. We've seen declines in steel, which we've commented on and frac sand, which didn't have a higher RPU for us. So there's a negative mix impact there. Cleo Zagrean -…

Our next question is from the line of Tom Kim of Goldman Sachs. Please go ahead with your question. Tom Kim - Goldman Sachs & Co.: Hey. Good morning. Thanks. I had a couple of questions on intermodal. I guess, just first off on the international side, we obviously have seen that the big benefit with the West Coast port disruptions the effect of it being resolved. And I guess as we look forward to the second half of the year, what do you think a reasonable growth rate for international intermodal should be? I mean, would it be safe to assume something close to GDP is sort of reasonable? Alan H. Shaw - Chief Marketing Officer & Executive Vice President: Typically, we've said that international will grow at 1 times to 1.5 times GDP to the extent that there's a greater shift towards East Coast ports certainly at least in the near-term, we have the opportunity for growth that's above that. Tom Kim - Goldman Sachs & Co.: Okay. That's really helpful. And I guess as we look a little bit further forward and supposedly the Panama Canal expansion should be completed first half next year, I would think that this should drive more business to the Gulf and to the East Coast, but I'm wondering what's your perspective around the puts and takes around the intermodal side of the business. Thanks. Alan H. Shaw - Chief Marketing Officer & Executive Vice President: Did you say Gulf and the East Coast? Tom Kim - Goldman Sachs & Co.: Yeah. The U.S. Gulf and the East Coast. Alan H. Shaw - Chief Marketing Officer & Executive Vice President: Yeah. We've already seen a shift as many of these vessels are used in the Suez Canal to hit the East Coast. And the West Coast labor disruption shifted even more. So, the Panama Canal could certainly help. We don't think that that's going to be a threat to our international franchise. Tom Kim - Goldman Sachs & Co.: Okay. That makes sense. Just to clarify then, so you're basically assuming that the share shift has effectively been done given that some of the big liners already moving capacities through the Suez? Alan H. Shaw - Chief Marketing Officer & Executive Vice President: Yeah. I would say much of it has been done. There is still some that's being implemented right now, which is why we're seeing pretty strong growth in our international franchise. Tom Kim - Goldman Sachs & Co.: Okay. All right. That's very helpful. Thank you.

Thank you. At this time, I will turn the floor back to Mr. Jim Squires for closing remarks. James A. Squires - President, Chief Executive Officer & Director: All right. Well, thank you, everyone. We appreciate your participation in today's call. And we look forward to speaking with you next quarter.

Thank you. This concludes today's teleconference. Thank you for your participation and you may now disconnect your lines at this time.