Walter Spracklin: Yes. Thanks very much. Good afternoon, everyone. Nadeem, great to have you back. My question, I guess, is on St. John. And you mentioned going to 150 this year, obviously up from a less than 90 run rate and now you’re pretty much running at a 300 run rate, so probably double that again in €˜23. You’re pointing to 824. Just curious, when you get to that level, how long do you think it will be that you could fill that 800 capacity in €˜24? And is L.A. Long Beach in the shorter queues and the less congestion over the West Coast. Does that hurt your ability to get up to $800,000 on a quick basis in €˜24 or beyond?
John Brooks: Well, Walter, you know what, I don’t think so. And the thesis all along, if we think back to when we bought the number one, it was €“ there was only one competitor in that marketplace. We identified a route that with our investment, with our partnership with and the NBSR, we’re able to create a service package that ultimately, long-term, we believe, is what is the enabler of the growth. We can get to Toronto, Montreal, Chicago on a 200 mile plus faster route. That’s not undeniable. And I think that’s given us opportunities to talk to these steamship lens, maybe a little differently than we have in the past. And I think the other point is I think about timeline in €˜24, €˜25 and beyond is a CP network that reaches Gulf Coast across Canada.
And with the STB, hopefully approving our transaction, being able to link in the Gulf and also potentially Lazaro down in Mexico, gives us a really nice menu to be able to work with our customers on. And as part of that, enabling customers to not only look at the West Coast, but grow that East Coast port of with us, but then also potentially further diversify themselves by potentially going down and utilizing the ton of capacity that we’re going to have available coming in through Mexico.
Walter Spracklin: That’s great story. Appreciate the time. Thank you.
Keith Creel: Thank you, Walter.
Operator: The next question comes from Ken Hoexter from Bank of America.
Ken Hoexter: Hi. Great. Nadeem, welcome back and good luck on the rest of this process as you go through here. It’s an exciting time to follow it. Can you talk about the test runs? I think you talked some of the lanes you’re testing with KCS on a commercial basis. Is there anything you can kind of talk about in the interim, you mentioned selling was 100% served by trucks. Maybe can you quantify that specific opportunity or the potential
John Brooks: Well, Ken, I’ll say this at this point. As I said, these are interline test moves that we’ve put together to, I guess, somewhat replicate or begin to sort of proof of concept with these customers. As I said, there is a moving 100% truck today. So part of the sale is helping the customer understand what that process and what that opportunity could look like. Obviously, in the future, if we’re blessed with single-line service between Toronto and Chicago and Laredo and ultimately down to Mexico, we wanted to begin to prove that we can compete head-to-head with trucks and ultimately provide that the liability that those customers are going to require. I can tell you that the second part of the story that’s kind of met around some of these opportunities is in these couple of examples I spoke to, we’ve done some work with the customers to identify the greenhouse gas emission savings at about 60% to 75% clip versus their current mode on those specific moves.
And it’s really become a unique and exciting sales tool that maybe far more than ever in the past, some of these customers have so to say that. That’s beyond the price and the savings and the reliability and the service, this is an important story for our companies. So I hope that helps, Ken.
Ken Hoexter: It sounded something I guess we will hear about in the future. Thanks a lot for your time.
John Brooks: For sure.
Operator: Our next question comes from Scott Group from Wolfe Research.
Scott Group: Hi, guys. So I understand 61 sort of not the CP standard. So do you think maybe is this a year where we can get back to that 57, 58 OR we had in €˜21. And then just in terms of like the consolidated results, and I know we can’t give specific guidance yet. But last year, you gave us directional commentary, low single-digit kind of earnings growth. Anything you could say it was double-digit earnings, the Street’s got high teens earnings growth? Any sort of directional color you can share? Thank you.
Nadeem Velani: Scott, I appreciate the question. I’d just say if we want to give guidance, we wouldn’t have given it. It’s difficult in this environment. We’re awaiting a decision from the STB. So out of respect for that, I think we should hold off on guidance for a consolidated entity. And in terms of the OR, I think Keith said it perfectly. I mean 61 is not something that we write about. There is opportunities, as John highlighted this year in terms of €“ on the volume side, but there is also uncertain on the macro front. So we think that €“ we think and we expect to see improvements. But to give you a quantum, I don’t think it’s appropriate right now, Scott. We will update you as the year unfolds. And as we progress on our potential transaction and you can expect an Investor Day from us later this year, and I think there will be time €“ plenty of time to give you a more formal kind of guidance when the time is appropriate.
Scott Group: All good. So I will leave it there. Thank you, guys.
Nadeem Velani: Thanks, Scott.
Operator: Our next question comes from Jason Seidl from Cowen.
Jason Seidl: Nadeem, welcome back. I wanted to touch on pricing a bit. I think you guys noted it continued to be strong. I was wondering if you could sort of compare it to where we were at in 3Q? And then does it need to actually get better from here given cost pressures?
Keith Creel: Jason, I would say we sustained and maybe even improved a little as we move through Q4. I would go as far as saying that high-single digit type pricing on renewals, certainly inflation plus. And just looking out so far, Q1, Q2 expectations in 2023, I would say pretty well lined up in that similar space. So, I remain optimistic on our pricing. And as we have always done in the past, certainly, we are very conscious of this inflationary environment, but a big part of our philosophy is pricing to the value of our service and capacity and whatever the inflation were €“ inflation environment is going to be, you can assure that we will continue to €“ the sales team will continue to price that way in the marketplace.
Jason Seidl: Appreciate the color understood and look forward to the next big announcement.
Keith Creel: As do we. Thanks Jason.
Operator: Your next question comes from Brandon Oglenski from Barclays. Thank you.
