John Brooks: Yes, Steve. So the mix was quite interesting in Q1. I spoke about the certainly the short haul domestic intermodal that shifted away from the railroad. We definitely saw volumes decline in our U.S. coal business which are also very short haul business. But on top of that we layered on strength in international, strength in grain, strength in potash, some of those longer haul plus the synergies, the growth in the MMX and in the ECP area that you alluded to which is largely Alberta down to the Gulf and even in New Mexico. I do believe this is, we’re just seeing a natural progression of what this rail looks like in the future and just maybe over the last accented in Q1 more than we anticipated. I expect that to moderate and normalize.
The other thing I will point out because I think it’s important if you guys think about mix is we have really forecasted a strong automotive Q1 with all the business wins and some of the pent up demand. And certainly we outperformed and we set a record in that quarter, but I’ll just remind you it did fall very short of our expectations. So there was a lot of good length of haul there and high sense for RTM traffic that didn’t materialize in Q1 that certainly we’re seeing ramp up here in Q2.
Keith Creel: I think I’ll add a little bit of color to that John because I see it a little bit differently. When you say normalize, I don’t think we’re going to normalize until we’ve fully built out our closed loop automotive supply chain. We’ve got Wiley Terminal opening up end of the quarter. In June, that’s going to allow vehicles that are produced and shipped out of Ontario today that currently link the haul into Chicago. That link the haul is going to end in Dallas, Texas for CPKC. It’s going to create empty supply to go down to Mexico and links to Paul that today perhaps stop at Laredo or Robstown are going to be going to Minneapolis, St. Paul or going to Canada. So again, this thing is a multiple chapter story. We’re not going to get it built out overnight. It’s a 2-, 3-, 4-, 5-year plan. That in and of itself, that one business unit offers significant, I think accretive incremental improvements to driving that length of fall.
Operator: Your next question comes from Scott Group with Wolfe Research.
Scott Group: You guys keep referring to a potential strike. It almost feels as if like your guidance assumes that we are going to have a strike or said differently, if we do have sort of a normal short lived strike, do you still feel confident about doing double-digit earnings growth this year? And then maybe just bigger picture, Keith, when I look at Q1 revenues up 2%, operating income is flat. Do you think I guess, I know we get some strike uncertainty, but going forward like it feels like we’re at the point now where like the story is going to really start showing up in the model in terms of better revenue growth, meaningful margin improvements and significant earnings growth. Is that the right way to think about it that we’re sort of we’re there now and it’s going to all start showing up in the model?
Keith Creel: I think we’re at an inflection point. So as this thing starts to play out, Scott, I think you’ve got that captured accurately.
Nadeem Velani: And Scott, if we have kind of a strike that’s not extended, uncomfortable that we can still hit our double-digit EPS guidance for the year.
Operator: Your next question comes from Tom Wadewitz with UBS.
Tom Wadewitz: Yes. Good morning. I guess a lot of things to you can ask about on the growth drivers. You’ve got a lot of things going on. How do you think about, you mentioned kind of new service that we get approval from STB with Schneider? Would you think of that as being kind of new origination points or kind of new connectivity that gives you new volume? Or do you think some of it is service goes from Norfolk to CSX? Or I guess how do we think about obviously, there’s some noise going on with the agreement you have or the concessions that you got related to John Orr leaving. So I don’t know if you could give some broader comments on kind of the opportunity and how much is new business and how much do you think might end up being shifting on that kind of Mexico and Meridian Speedway opportunity?
Keith Creel: Okay, thanks. Let me say this. All this noise about the agreement over the Meridian Speedway is just that, it’s much to do about nothing. At the end of the day, all we’ve done is take issues that were right for dispute off the table. We’re going to have unfettered opportunity to compete in partnership with NS, to compete in partnership with CSX. This isn’t about share shift. If there’s any, it might be nominal. There’s some overlapping markets in the Southeast that perhaps they both serve. But what this is, is about growth. It opens up competition in new markets for CSX’s customers and lanes that NS can’t offer them that opportunity. And conversely with NS, they’re no worse off. We’ve got 2 situations here where we can uniquely partner with both railroads.
It’s enabling investment to create an alternative route. The customer has a choice. Competition wins. Service wins. The only true threat in this unless you’re afraid to compete is truly the truck. That’s where the competition is. That’s where the growth is going to come from and set I-20 that runs parallel to that Meridian Speedway that we’re going to be competing against. This is strong competitive business. So any and again, it’s much to do about nothing. I think this is a win, win situation. And again, I’ll close saying the only other loser in this perhaps are the lawyers that would have been fighting on our behalf and the dispute with NS over some of those very right for dispute considerations that were eliminated with our agreement. And listen, if anybody wants to see the truth and see the facts, we filed with the STB the agreement, go look at it.
You’ll see for yourself that exactly what we’re saying and in fact exactly what NS has said is exactly what the truth is. It’s much to do about nothing. Let’s get over this and let’s get to competing and being great partners within us and being great partners with the CSX. That’s what our intention is to be.
