Financial Data and Key Metrics Changes - The reported operating ratio for Q1 2025 was 60.7%, flat compared to the previous year despite a 90 basis point headwind from fuel and leap year effects [5][16] - Earnings per share for Q1 2025 was $2.70, reflecting a $0.19 or 7% headwind from fuel and leap year [6][16] - Net income for Q1 2025 was $1.6 billion, essentially flat versus last year, with operating income also flat despite a 7% volume growth [7][16] Business Line Data and Key Metrics Changes - Freight revenue grew 1% year-over-year to $5.7 billion, with a 4% increase when excluding fuel surcharge impacts [9][10] - Bulk segment revenue was up 1% due to a 2% increase in volume, while industrial revenue decreased by 1% on a 1% decrease in volume [24][26] - Premium revenue increased by 5% on a 13% increase in volume, reflecting strong customer demand [27] Market Data and Key Metrics Changes - AAR car loadings were up just over 7% compared to last year, indicating a solid start to Q2 2025 [29] - Challenges are anticipated in the food and beverage sector, particularly in the U.S. beer market, while coal volumes are expected to remain strong [29] - Grain exports into Mexico are expected to remain robust, supported by business development efforts [30] Company Strategy and Development Direction - The company aims to maintain its three-year targets set during the Investor Day, focusing on EPS growth in the high single to low double-digit range [20][21] - Continued emphasis on service and operational excellence is a key part of the strategy, with a focus on maximizing pricing and efficiency [8][21] - The company is actively pursuing business development opportunities, including new customer acquisitions and expansions [35][36] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertainty in the marketplace but expressed confidence in the company's ability to adapt and perform [21][60] - The first quarter performance was viewed positively, with strong volumes and service metrics heading into Q2 [22][57] - Management remains committed to long-term guidance despite current market volatility and challenges [21][72] Other Important Information - Operating expenses for Q1 2025 were $3.7 billion, flat year-over-year, with productivity gains offsetting inflation and volume-related costs [13][16] - The company returned $2.5 billion to shareholders in Q1 2025 through dividends and share repurchases [19] - The adjusted debt to EBITDA ratio was 2.8 times at the end of the quarter, maintaining an A-rating from credit agencies [19] Q&A Session Summary Question: 2025 Guidance and Uncertainty - Management acknowledged the uncertainty in the market but reiterated confidence in achieving long-term targets, emphasizing the importance of operational efficiency [56][61] Question: Revenue Growth Assumptions - Management indicated that while the first quarter was flat, they are optimistic about achieving high single-digit earnings growth, contingent on volume and pricing strategies [68][72] Question: Pricing Strength and Sustainability - Management noted that the strong pricing in Q1 was a result of both inflation catch-up and improved service performance, with expectations for continued pricing strength [80][84] Question: Impact of Tariffs and Trade Policies - Management highlighted the need for clarity regarding tariffs and trade policies, emphasizing the importance of maintaining customer relationships and adapting to changing supply chain patterns [121][123] Question: Resource Management for Volatility - Management confirmed that they maintain a buffer of resources to manage volatility and ensure service delivery, utilizing technology for efficient decision-making [132][136]