Operator: Our next question comes from Walter Spracklin from RBC Capital Markets. Please go ahead. Your line is open.
Walter Spracklin: Yeah. Thanks very much. Good afternoon, everyone. So I wanted to zero in here on the first quarter, and I know you don’t typically give quarterly guidance, but I think it’s important given last year was such a tough compare and now you’ve come off to a tough start here due to the weather. Is it possible, do you think, when we frame the 10% over a quarterly basis, is it possible that you can see any growth in the first quarter given how tough the compare is and the weather to start, and therefore is most of it all kind of back end loaded for the 10%.
Tracy Robinson: Thanks, Walter. Maybe I’ll just start, I’ll hand it over to Ghislain, but I’ll start by saying it is going to be a tough compare. We had a big quarter last year and some very different weather than the way we’ve started off this year. But Ghis, did you want to make any comments on that?
Ghislain Houle: No, I think that’s right. I think we told the market on many conferences that Q1 was going to be a very tough comp. If you remember last year our EPS was up 38% and our OR was 61%, which is not kind of winter like type of OR. So we know that we’ve baked that in, into our forecast and into our 10%, but we have accounted for regular winter. We did start and as Pat said, we had seven days of deep freeze in the west, hopefully, that’s behind us. It’s behind us for now. And hopefully, as we get into February, then we don’t get that sustained cold. But yeah, I mean, we know that Q1 was going to be a tough comp, but that’s all factored in, into our 10% EPS growth for the year. Thanks, Walter, for the question.
Walter Spracklin: Thank you. Thanks.
Operator: Our next question comes from Konark Gupta from Scotiabank. Please go ahead. Your line is open.
Konark Gupta: Good evening, everyone, and best wishes to Doug and Remi for their respective roles. The question is for Pat, you said destination performance is improving. But what’s your realistic target there, Pat, and what’s required from your interchange partners to get to that level?
Patrick Whitehead: So, Konark, thank you for the question. And we desire to continue to squeeze that delta between launch and land. We look to get another few percentage points out of that squeeze, that gap between how we launch trains and how we arrive them into terminals. We originate, terminate the majority of our traffic on our own line, so we’re not as dependent on the other carriers for that metric. And that’s where I talked a bit about reducing train meet delays online, which is a product of getting trains out on time. Train schedules make the train meets and making timely crew swaps. So that’s really our focus, to continue to squeeze that delta between launch and land. Thank you very much for the question.
Konark Gupta: Thank you.
Operator: Our next question comes from Brandon Oglenski from Barclays. Please go ahead. Your line is open.
Brandon Oglenski: Hey, good afternoon, everyone, and thanks for taking my one question. Ghislain, I was hoping you could update us here on the change in the dividend. And obviously, if you were to go to that full repurchase this year, that’d be quite a bit of cash flow out the door. So where are you seeing leverage in the near term and especially in the context of that 10% to 15% plan over the next three years? Would you be willing to take it up higher right now?
Ghislain Houle: Yeah. So, as we said, we’re looking at the targeted leverage over time of 2.5. I mean, if you look at this year, we finished at 2.25. We typically grow our dividends in line with earnings growth. You’ll see that we’re slightly below because we do that over time. And if you remember, in 2023, our dividends were up 8% and our earnings are down 2%. So we have a long-term view, we have a long-term view on these two things. I think that, as we said in the Investor Day, our leverage will be 2.5 over time if economic conditions warrant. So that’s why we went back and toned back a little bit of our share buyback to 4 billion. Last year, we wanted to be opportunistic due to the stock price and where it was. And again, I think, in terms of dividend, I’m very proud to say that it’s the 28th year that we’ve increased our dividend and that’s very good.
So that’s what we’re thinking, and we’re thinking long-term and without any jerky reaction. Thanks for the question, Brandon.
Brandon Oglenski: Thank you.
Operator: Our next question comes from Tom Wadewitz from UBS. Please go ahead. Your line is open.
Thomas Wadewitz: Yeah. Good afternoon. Wanted to ask you a little bit about trained lengths and how you view that opportunity. I think where you’re running now is a little bit below where you’ve achieved in the past. And so would you expect to see that expand? I don’t know if you can get to 8,200, 8,300 feet, something like that. And is that, if you realize that, is that a potential driver of upside on what the margin might be relative to your guidance?
Derek Taylor: Hey, Tom, it’s Derek. Good afternoon. I think when you look at it, you know, right now we can grow at a lower incremental cost with our manifest business, because we can add the traffic on existing trains. Part of a scheduled operation is remaining balanced and turning and splitting the assets. Now, when you look at it from an intermodal point of view, that is something that’s been down, that’s coming back, that will actually help our train length out as that grows throughout the year. So, overall, we’re well positioned to grow at a low incremental cost, and that’s the key as we look at it going forward.
Doug MacDonald: Thanks for the question.
Operator: Our next question comes from Amit Mehrotra from Deutsche Bank. Please go ahead. Your line is open.
Amit Mehrotra: Thanks. Hi, everyone. I guess my one question would just be on yield, obviously, there is a pricing component to yield. There’s a mix component. There’s a fuel component. I think fuel was a pretty nice benefit, at least on a lag basis, in the fourth quarter. And Ghislain, can you just talk about like — does yield take a step down when you adjust for that fuel and when do we actually see like the pricing benefit in the yield number? Obviously mix adjusted or not adjusted for mix, because the concern, I guess, I have at least, is that yield comes down in the first quarter as these fuel surcharges lag. And I’m just trying to understand what the outlook of cadence of that yield improvement is as you progress through the year.
