CSX Corporation (CSX) 2016 Q3 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the CSX Corporation third-quarter 2016 earnings call. As a reminder, today's call is being recorded. During this call all participants will be on listen-only mode.

各位女士、先生，早安，歡迎參加 CSX Corporation 2016 年第三季財報電話會議。提醒各位，今天的電話會議將被錄音。在本次會議期間，所有與會者將處於僅收聽模式。

For opening remarks and introductions, I would like to turn the call over to Mr. David Baggs, Vice President, Treasurer and Investor Relations Officer for CSX Corporation.

接下來進行開場致詞與介紹，我想把電話交給 CSX Corporation 副總裁、財務長兼投資人關係主管 David Baggs 先生。

Thank you, Shirley, and good morning everyone and again welcome to CSX Corporation's third-quarter 2016 earnings presentation. The presentation material that we will review this morning along with our expanded quarterly financial report and our safety and service measurements are available on our website at CSX.com under the investor section. In addition, following the presentation, the webcast replay will be unavailable on that same website.

謝謝妳，Shirley，各位早安，再次歡迎參加 CSX Corporation 2016 年第三季財報簡報。我們今天早上將檢視的簡報資料，以及我們擴充版的季度財務報告與安全及服務衡量指標，皆可於 CSX.com 的投資人專區取得。此外，簡報結束後，網路直播重播也將於同一網站提供。

This morning our presentation will be led by Michael Ward, the Company's Chairman and Chief Executive Officer, and Frank Lonegro, our Chief Financial Officer. In addition, Cindy Sanborn, our Chief Operating Officer, and Fredrik Eliasson, our Chief Sales and Marketing Officer, will be available during the question-and-answer session.

今天早上的簡報將由公司董事長兼執行長 Michael Ward，以及財務長 Frank Lonegro 主講。此外，營運長 Cindy Sanborn 與銷售暨行銷長 Fredrik Eliasson 將在問答環節中出席。

Now before I turn the presentation over to Michael, let me remind everyone that the presentation and other statements made by the Company contain forward-looking statements. You are encouraged to review the Company's disclosure in the accompanying presentation on slide two. This disclosure identifies forward-looking statements as well as the uncertainties and risks that could cause actual performance to differ materially from the results anticipated by these statements.

在我把簡報交給 Michael 之前，先提醒各位，本簡報以及公司所作的其他陳述包含前瞻性聲明。建議各位查閱隨附簡報第 2 頁中公司的揭露內容。該揭露說明了前瞻性聲明，以及可能導致實際表現與這些聲明所預期結果出現重大差異的不確定性與風險。

In addition, at the end of the presentation, we will conduct a question-and-answer session with the research analysts. With 30 analysts covering CSX and out of respect for everyone's time including our investors, I would ask as a courtesy for you to limit your questions to one primary question and one follow-up question.

另外，在簡報結束時，我們將與研究分析師進行問答環節。目前有 30 位分析師追蹤 CSX，為尊重各位（包括投資人）的時間，敬請每位提問者以禮貌為先，將問題限制為一個主要問題與一個追問。

With that let me turn the presentation over to CSX Corporation's Chairman and Chief Executive Officer, Michael Ward. Michael?

那麼，讓我把簡報交給 CSX Corporation 董事長兼執行長 Michael Ward。Michael？

Thank you, David. Good morning, everyone. Yesterday CSX reported third-quarter earnings per share of $0.48 compared to $0.52 per share in the same period last year. Revenue declined 8% in the quarter, consistent with an overall volume decline of 8% which included a 21% decline in coal volume.

謝謝你，David。各位早安。昨天 CSX 公布第三季每股盈餘為 0.48 美元，去年同期為每股 0.52 美元。本季營收下滑 8%，與整體運量下滑 8% 一致，其中包含煤炭運量下滑 21%。

Turning to operations, safety performance remained strong and service levels continued to meet or exceed customer expectations driving further network efficiency improvements.

就營運而言，安全表現依然強勁，服務水準持續符合或超越客戶期望，進一步帶動網路效率改善。

In addition, CSX further reduced structural costs in the quarter and aligned resource levels to lower volume while retaining the ability to flex those resources with demand. Continuing to match resources to demand combined with our ongoing initiatives to support network fluidity formed the foundation to maximize future merchandise and intermodal growth opportunities.

此外，CSX 在本季進一步降低結構性成本，並將資源水準調整至較低的運量，同時保留可隨需求彈性調度這些資源的能力。持續讓資源與需求相匹配，並結合我們支持網路順暢度的持續性措施，構成了把握未來一般貨運與聯運成長機會的基礎。

As significant cost savings partially offset the impact of lower volume and a changing business mix, operating income declined $92 million year-over-year to $841 million. At the same time, the operating ratio increased 70 basis points year-over-year to 69.0%.

由於顯著的成本節省部分抵銷了較低運量與業務組合變化的影響，營業利益年減 9,200 萬美元至 8.41 億美元。同時，營業比率年增 70 個基點至 69.0%。

Before I hand the presentation over to Frank, let me thank our employees, customers and suppliers for their skillful planning and tireless efforts working together to manage the effects of Hurricane Matthew over the weekend and through this week. Times like this remind us of the paramount importance of safety for our employees, customers and the communities we serve as well as the critical importance of the service we provide for American businesses.

在我把簡報交給 Frank 之前，讓我感謝我們的員工、客戶與供應商，於上週末及本週共同以周密規劃與不懈努力，協力管理颶風 Matthew 的影響。這樣的時刻提醒我們，員工、客戶以及我們所服務社區的安全至關重要，同時也凸顯我們為美國企業提供服務的關鍵性。

Now I will turn the presentation over to Frank who will take us through the third-quarter results and fourth-quarter outlook in more detail. Frank?

現在我把簡報交給 Frank，他將更詳細帶我們檢視第三季結果與第四季展望。Frank？

Thank you, Michael, and good morning, everyone. Let me begin by providing more detail on our third-quarter results.

謝謝你，Michael，各位早安。我先從更詳細說明我們第三季的結果開始。

As Michael mentioned, revenue was down 8% or $229 million versus the prior year driven primarily by lower volumes. Total volume decreased 8% which impacted revenue by about $220 million. In addition, fuel recoveries declined $63 million in the quarter but was offset by strong core pricing from an improved service product. Same-store sales, pricing for the third quarter was up 2.3% overall and 3.6% excluding coal.

如 Michael 所提，營收較去年同期下滑 8%，或 2.29 億美元，主要由較低運量所致。總運量下降 8%，對營收影響約 2.20 億美元。此外，本季燃油回收收入減少 6,300 萬美元，但被因服務產品改善而帶來的強勁核心定價所抵銷。第三季同店銷售（定價）整體上升 2.3%，若排除煤炭則上升 3.6%。

Other revenue decreased $9 million driven mainly by lower incidental charges versus the prior year. Expenses decreased 7% versus the prior year driven mainly by $112 million in efficiency gains and $53 million in lower volume-related costs. Operating income was $841 million in the third quarter, down 10% from last year.

其他營收減少 900 萬美元，主要因相較去年同期的零星費用收入較低。費用較去年同期下降 7%，主要受惠於 1.12 億美元的效率提升，以及 5,300 萬美元較低的運量相關成本。第三季營業利益為 8.41 億美元，較去年下降 10%。

Looking below the line, interest expense was up slightly from last year with higher debt levels partially offset by lower rates while other income increased $11 million. And finally, income taxes were $260 million in the quarter with an effective tax rate of about 36%.

再看營業利益以下項目，利息費用較去年小幅上升，較高的負債水準部分被較低利率所抵銷；其他收入增加 1,100 萬美元。最後，本季所得稅為 2.60 億美元，有效稅率約 36%。

Overall net earnings were $455 million, down 10% versus the prior year and EPS was $0.48 per share, down 8% versus last year.

整體淨利為 4.55 億美元，較去年同期下降 10%；每股盈餘為 0.48 美元，較去年下降 8%。

Now let me turn to the market outlook for the fourth quarter. Looking forward you will notice that the outlook reflects our adjusted market alignments. As released in our third-quarter earnings, we are now referring to our markets as shown on this slide which is consistent with how we are managing the business. The previous food and consumer market is now part of agricultural and food products; waste and the fly ash business have moved to chemicals, and the equipment business now resides in the renamed metals and equipment market.

接著我談第四季的市場展望。展望中各位會注意到，內容反映我們調整後的市場分類。如同我們在第三季財報中所發布的內容，我們現在依照本頁所示來稱呼各市場，這也與我們管理業務的方式一致。先前的食品與消費品市場現已併入農業與食品產品；廢棄物與飛灰業務已移至化學品；設備業務則歸入更名後的金屬與設備市場。

Reclass volume, revenue and RPU information for the last three years are available on our investor relations webpage.

過去三年的重分類運量、營收與每單位收入（RPU）資訊，可於我們投資人關係網頁取得。

In 2016, CSX's fiscal calendar includes a 53rd week and as such, we will be reporting a 14-week fourth-quarter. When taking the full quarter into account with an extra week versus the same period last year, we expect volume to be roughly flat. However, on a 13-week comparable quarter basis, we continue to see a soft but stabilizing industrial economy with volume down year-over-year.

2016 年，CSX 的會計年度行事曆包含第 53 週，因此我們將申報一個 14 週的第四季。若將多出的一週納入考量，與去年同期相比，我們預期運量大致持平。然而，以可比的 13 週季度基礎來看，我們仍看到工業經濟疲弱但趨於穩定，運量較去年同期下降。

In addition to the standard view we provide each quarter which on the slide shows expectations for the 13-week comparable period, we have included a red, yellow, green designation to the far right which shows the full quarter impact of the extra week on volume expectations. With that said, the market comments that follow reflect expectations on a 13-week comparable basis.

除了我們每季提供的標準視角（本頁顯示的是 13 週可比期間的預期）之外，我們也在最右側加入紅、黃、綠標示，用以呈現多出一週對整季運量預期的影響。話雖如此，以下的市場評論將以 13 週可比基礎的預期為準。

Automotive is again expected to grow as light vehicle production remains strong and new business continues to ramp up. Agricultural and food products is expected to be neutral. The record grain harvest will drive year-over-year gains. However, market dynamics for ethanol remain challenged near-term for CSX due to increased movements in storage in the Gulf region. Export coal is also neutral as we are seeing some near-term increase in metallurgical demand driven by reduced Chinese supply such that volume should be similar to last year's levels.

汽車業務預期將再度成長，因輕型車產量仍然強勁，且新業務持續放量。農業與食品產品預期持平。創紀錄的穀物收成將帶動年增。然而，就 CSX 而言，乙醇的市場動態短期仍具挑戰，原因是墨西哥灣地區的儲存移動增加。出口煤炭亦預期持平；我們看到因中國供給減少而帶動冶金煤需求短期回升，因此運量應與去年水準相近。

We expect our full-year export coal tonnage to be around 25 million tons.

我們預期全年出口煤炭運量約為 2,500 萬噸。

Chemicals will be down with continued weakness in drilling related products especially crude oil due to low crude oil prices and unfavorable spreads. This impact more than offsets growth in core chemicals and the continued to ramp up of new fly ash business.

化學品將下滑，因鑽探相關產品（尤其是原油）持續疲弱，主因為原油價格偏低及價差不利。此影響將大於核心化學品的成長，以及新飛灰業務持續放量所帶來的增長。

Domestic coal will again be down; however in the fourth quarter, we will cycle the start of the pronounced market weakness which took hold in the fourth quarter last year. While the excess supply of natural gas continues to provide a price point that favors gas burn over coal, the easier comparables will moderate the rate of decline we have seen over the last several quarters. We expect domestic coal tonnage to be relatively stable to what we saw in the third quarter.

國內煤炭將再度下滑；然而在第四季，我們將進入去年第四季開始並顯著成形的市場疲弱循環期。雖然天然氣供給過剩仍持續提供一個使燃氣發電相對於燃煤更具價格優勢的價位點，但較容易的比較基期將放緩我們在過去數季所見的下滑速度。我們預期國內煤炭運量將大致維持在第三季所見的水準。

Intermodal will decline as we continue to cycle competitive losses in international in the fourth quarter. Additionally as we previously reported, we will continue to cycle some short-haul traffic loss in the domestic market which began in the third quarter. Absent this, we continue to experience strength in the domestic segment driven by our strategic network investments that support highway to rail conversion.

由於我們在第四季將持續進入國際業務競爭性流失的循環期，聯運將下滑。此外，如同我們先前所報告的，我們將持續進入國內市場部分短程運量流失的循環期，該情況始於第三季。若不考慮此因素，我們在國內區段仍持續展現強勁表現，主要受惠於我們支持公路轉鐵路的策略性路網投資所帶動。

Minerals will be down in the quarter as we cycle a strong period last year that benefited from an extended aggregate shipping season in the north due to mild weather late into the year. Overall on a comparable 13-week basis, we expect volume to be down mid-single digits. Low crude oil, natural gas and other commodity prices as well as strength in the US dollar continue to challenge the rail marketplace although the impact of these factors is beginning to moderate as we move through a full year of this external climate.

本季礦產將下滑，因為我們將進入去年一段強勁期間的比較循環；該期間受惠於北方因年末天候溫和而使骨材運輸季節延長。整體而言，以可比的13週基礎計算，我們預期運量將下滑中個位數百分比。低原油、天然氣及其他商品價格，以及美元走強，仍持續對鐵路市場構成挑戰；不過，隨著我們走過這種外部環境的完整一年，這些因素的影響正開始趨於緩和。

When we report earnings in the fourth quarter, our GAAP numbers will include the full 14 weeks of volume in revenue. Again, a preview of 14-week volume expectations is reflected to the far right of the slide which in total represents about flat volume year-over-year.

當我們在第四季公布財報時，我們的GAAP數字將在營收中納入完整14週的運量。同樣地，14週運量預期的預覽已反映在投影片最右側，整體而言代表年對年運量約持平。

When we report next quarter, we will provide a breakout of volume and revenue for the final week of the fiscal year which is a holiday week to facilitate year-over-year comparisons.

當我們下季公布時，將提供會計年度最後一週（假期週）的運量與營收拆分，以利進行年對年比較。

Turning to the next slide, let me talk about our expectations for expenses in the fourth quarter. As a result of aggressive cost actions, we have achieved over $340 million of efficiency gains year to date and now expect full-year productivity savings to be about $400 million.

接著看下一張投影片，我來談談我們對第四季費用的預期。由於採取積極的成本行動，我們今年迄今已達成超過3.4億美元的效率提升，現在預期全年生產力節省約為4億美元。

Looking at the fourth quarter, the drivers for each expense category are shown on a comparable 13-week basis versus the prior year. Separately at the bottom of the slide, we have provided guidance for the incremental costs associated with the 53rd week this year. In addition, we will be cycling $48 million of restructuring costs in the fourth quarter which impacted labor and fringe by $37 million and MS&O by $11 million in the prior year.

就第四季而言，各費用類別的驅動因素係以可比的13週基礎與去年相比呈現。另外，在投影片底部，我們提供了與今年第53週相關的增量成本指引。此外，我們在第四季也將進入4,800萬美元重整成本的比較循環；該成本在去年對勞工與附加福利影響3,700萬美元，對MS&O影響1,100萬美元。

Looking first at labor and fringe, we expect fourth-quarter average headcount to be down slightly on a sequential basis although not to the same level we saw in the third quarter. Labor inflation is expected to be around $30 million in the fourth quarter which we expect to be more than offset by continued efficiency and volume-related cost savings.

先看勞工與附加福利，我們預期第四季平均人數將較前一季略降，但不會降到第三季所見的水準。第四季勞工通膨預期約為3,000萬美元，我們預期將被持續的效率提升與與運量相關的成本節省所抵銷且有餘。

Similar to this quarter, we expect a headwind in the fourth quarter of about $40 million versus the prior year driven by higher incentive compensation. As a reminder, in 2015 we saw incentive compensation decrease in the second half of the year, as sharp declines in the energy markets coupled with broad-based commodity and dollar impacts drove CSX's financial results well below our initial expectations.

與本季類似，我們預期第四季相較去年將有約4,000萬美元的不利因素，主要由較高的獎勵性薪酬所驅動。提醒一下，2015年我們在下半年看到獎勵性薪酬下降，因能源市場急遽下滑，加上廣泛的商品與美元影響，使CSX的財務結果遠低於我們最初的預期。

MS&O expense is expected to be relatively flat to the prior year with continued efficiency gains offsetting inflation. We expect fuel expense to decline in the fourth quarter with the higher cost per gallon year-over-year reflecting the current forward curve being more than offset by volume-related savings and continued focus on fuel efficiency.

MS&O費用預期將與去年大致持平，持續的效率提升將抵銷通膨。我們預期第四季燃料費用將下降；每加侖成本年對年較高反映目前的遠期曲線，但將被與運量相關的節省以及持續聚焦燃油效率所抵銷。

We expect depreciation in the fourth quarter to increase around $15 million versus the prior year reflecting the ongoing investment in the business partially offset by the favorable impact of an equipment life study.

我們預期第四季折舊將較去年增加約1,500萬美元，反映對業務的持續投資，部分被設備使用年限研究帶來的有利影響所抵銷。

Equipment and other rents in the fourth quarter are expected to be relatively flat to the prior year with a benefit of improved car cycle times offsetting higher freight car rates and the increase in volume related costs associated with automotive growth.

第四季設備及其他租金預期將與去年大致持平；車輛周轉時間改善帶來的效益，將抵銷較高的貨車租賃費率，以及與汽車業務成長相關的運量成本增加。

Finally, fourth-quarter expense will also be impacted by the extra week. And when we report earnings in the fourth quarter, we will provide detail to help you better understand the impact of the 53rd week. Now let me wrap up on the next slide.

最後，第四季費用也將受到額外一週的影響。而當我們在第四季公布財報時，將提供細節，協助各位更了解第53週的影響。現在讓我在下一張投影片做個總結。

With macroeconomic and energy headwinds impacting most markets, CSX once again delivered solid financial results in the third quarter. This success is driven by pricing for the relative value of rail service, driving efficiency gains and aligning resources to the softer demand environment which partially offset an 8% volume decline this quarter.

在總體經濟與能源逆風影響多數市場之際，CSX在第三季再次交出穩健的財務成果。這項成功來自於依據鐵路服務的相對價值進行定價、推動效率提升，以及將資源與較疲弱的需求環境對齊，從而部分抵銷本季8%的運量下滑。

To mitigate the weak demand, we have taken significant cost actions this year resulting in year-to-date efficiency savings of about $340 million and rightsizing savings of around $200 million. We continue to pursue structural cost opportunities across the network and now expect full-year efficiency savings to be about $400 million.

為了緩解疲弱需求，我們今年採取了重大的成本行動，使迄今效率節省約3.4億美元，規模調整（rightsizing）節省約2億美元。我們持續在全路網追求結構性成本機會，並且現在預期全年效率節省約為4億美元。

Looking at our expectations for the fourth quarter, as I mentioned previously, we expect volume to be relatively flat to last year which includes the impact of the extra week. We remain intensely focused on pricing to the value of our service and expect our strong cost performance to continue into the fourth quarter.

就我們對第四季的預期而言，如我先前提到的，我們預期運量相較去年將大致持平，其中包含額外一週的影響。我們仍高度聚焦於依據服務價值進行定價，並預期我們強勁的成本表現將延續至第四季。

We will also be cycling an $80 million property gain from the prior year which was below the line in other income in addition to cycling the $48 million in restructuring costs.

我們也將進入去年8,000萬美元不動產處分利益的比較循環；該項目在其他收益中列於營業利益以下，同時也將進入4,800萬美元重整成本的比較循環。

As a result, we expect fourth-quarter earnings per share on a reported basis including the impact of the extra week to be flat to slightly down versus the earnings we reported last year.

因此，我們預期第四季每股盈餘以報導基礎計（包含額外一週的影響）將與去年我們所報告的盈餘持平至略為下滑。

With that, let me turn the presentation back to Michael for his closing remarks.

接下來，我把簡報交回Michael，請他做結語。

Thank you, Frank. As you heard today, CSX is continuing to drive results for shareholders in this dynamic business climate by aggressively managing costs and delivering record efficiency savings. The men and women of CSX are working relentlessly to safely, efficiently and successfully serve our customers.

謝謝你，Frank。如各位今天所聽到的，CSX在這個多變的商業環境中，透過積極管理成本並創下紀錄的效率節省，持續為股東推動成果。CSX的全體同仁正不懈努力，以安全、高效率且成功的方式服務我們的客戶。

As we continue to manage through the current macroeconomic and energy environment, we are simultaneously focused on positioning CSX to maximize opportunities going forward. The transformation into the CSX of Tomorrow requires growth and increased profitability at our merchandise and intermodal businesses while preserving the business value of coal as it becomes a smaller part of CSX going forward.

在我們持續因應當前總體經濟與能源環境之際，我們也同時專注於讓CSX在未來能最大化把握機會的定位。轉型為「明日的CSX」需要我們的商品與聯運業務成長並提升獲利能力，同時在煤炭於未來成為CSX較小一部分之際，仍保留煤炭業務的商業價值。

With that focus, we will continue to drive earnings growth and margin expansion for our shareholders as we redeploy capital to further improve the network, support new technology solutions and automation and enhance merchandise and intermodal operations.

基於這項聚焦，我們將持續推動股東的盈餘成長與利潤率擴張，並重新配置資本以進一步改善路網、支持新技術解決方案與自動化，並強化商品與聯運營運。

With continued population growth as well as the challenges facing the trucking industry, we remain confident in the long-term secular growth prospects for domestic intermodal.

隨著人口持續成長以及卡車運輸產業面臨的挑戰，我們對國內聯運的長期結構性成長前景仍具信心。

In support of that vision, we continue our multiyear strategy to add network capabilities and new service offerings. This strategy supports improved profitability and the ability to serve ever more service sensitive freight.

為支持該願景，我們持續推動多年期策略，以提升路網能力並推出新的服務方案。此策略可支持獲利能力提升，並具備服務對時效更敏感貨物的能力。

As we look to the future, our core earnings power remains strong and the CSX of Tomorrow will continue delivering compelling shareholder value as we further progress towards a target of a mid-60s operating ratio longer term.

展望未來，我們的核心獲利能力仍然強勁；隨著我們進一步朝長期營業比率中段60%（mid-60s）的目標邁進，「明日的CSX」將持續為股東創造具吸引力的價值。

And now we will be pleased to take your questions.

現在我們很樂意回答各位的提問。

(Operator Instructions). Tom Wadewitz, UBS.

（接線員指示）。UBS的Tom Wadewitz。

Good morning, Michael. Good morning, everyone, and congratulations on the really strong results on the cost side. Obviously good execution. Wanted to on that topic just wanted to see if you could offer some thoughts about the run rate, the $400 million you are talking about this year is very strong and (inaudible) what does the pipeline look like and what does the run rate look like going forward? Is that something that you can potentially sustain at $300 million, $400 million in 2017? How would you -- can you offer some thoughts on the pipeline and how much is already done and what you can offer looking forward? Thanks.

早安，Michael。各位早安，也恭喜你們在成本端交出非常強勁的成果。顯然執行得很好。就這個主題我想請教一下，你們今年提到的4億美元節省非常亮眼，（聽不清）想了解一下後續的專案儲備（pipeline）長什麼樣，以及未來的節省「年化」水準（run rate）會如何？這是否有可能在2017年維持在3億到4億美元？你能否談談專案儲備、目前已完成多少，以及對未來的展望？謝謝。

Tom, good morning. This is Cindy. Here is how I think about this year and going into next year. So when we as a Company started looking at how coal was becoming less and less of our service product mix, we took a real hard look at how we needed to use our network differently to drive efficiencies, to drive margin expansion from a cost perspective. So a portion of what you have seen here this year is looking at structural changes in the coal fields and we are lapping those this month actually when we shut down Erwin and Corbin. So those we would not obviously repeat going into future years.

Tom，早安。我是Cindy。我對今年以及進入明年的看法如下。當我們公司開始看到煤炭在我們服務產品組合中的占比愈來愈低時，我們非常嚴肅地檢視了需要如何以不同方式運用我們的網路，以提升效率、並從成本角度推動利潤率擴張。因此，你今年看到的一部分成果，來自於我們在煤田區域所做的結構性調整；而我們其實在本月就會進入「比較基期」的影響，因為我們關閉了Erwin和Corbin。所以這些措施顯然不會在未來年度重複發生。

But we also have looked at driving density both on our routes, on our core routes, and density on our trains in terms of train length. And while we are lapping some of the big steps that we were able to take with train length, we do see other opportunities for that. It does require investments so the timing of it becomes contingent upon those investments coming to fruition.

但我們也著眼於提升密度：包括我們路線、核心路線的密度，以及列車密度（以列車長度來衡量）。雖然我們正在跨越（比較基期）一些我們在列車加長方面所能採取的大步驟，但我們確實仍看到其他機會。這需要投資，因此時點會取決於這些投資何時能夠落地見效。

Then there is a traditional productivity that we look at and have over many, many years and technology is a huge part of that. So is streamlining, streamlining to align with our core network, our Network of Tomorrow. And so when I think about that type of technology or that type of productivity, I see next year looking a little bit more normalized in terms of run rate offsetting inflation around $150 million. But we don't put any upper limits on productivity. We are going to address and bring in everything we possibly can. And I think particularly the technology lever is an exciting one for us both in terms of mobility and utilizing machine vision and then other areas around predictive analytics to help us be more reliable with our assets.

另外還有我們多年來一直在做的傳統生產力提升，而科技在其中扮演非常重要的角色。也包括精簡流程，讓其與我們的核心網路、我們的「明日網路」（Network of Tomorrow）一致。因此，當我想到這類科技或這類生產力提升時，我預期明年的年化節省會比較正常化，大約是抵銷通膨的1.5億美元左右。但我們不會對生產力設上限。我們會盡可能把所有能做的都納入並推進。我認為特別是科技這個槓桿對我們很令人振奮，包含行動化（mobility）、運用機器視覺，以及在預測分析等其他領域，幫助我們更可靠地運用資產。

So I think you see us -- we pulled a lot forward into this year which is part of what you are pulling on. I think we will see a more normal next year but we are not leaving anything on the table.

所以我想你會看到我們——我們把很多措施提前到今年，這也是你所關注的部分。我認為明年會更正常化，但我們不會把任何機會留在桌上。

So the $150 million you mentioned, that is a reasonable number to look at or that is kind of a core and you would expect to do beyond that?

所以你提到的1.5億美元，這是一個合理的參考數字，還是說那算是一個核心水準，而你們預期會做到超過這個數字？

That is a reasonable number to look at based on the investments we are going to make coming to fruition.

以我們將要進行的投資逐步落地見效來看，這是一個合理的參考數字。

Okay, great. Thank you.

好的，很棒。謝謝。

Allison Landry, Credit Suisse.

Allison Landry，瑞士信貸。

Good morning. This is Danny Schuster on for Allison. So last year you had on a net basis a couple of pennies of one-time benefits. I guess I was just trying to understand if earnings are flat to slightly down in 4Q this year, does that imply that core earnings are actually starting to grow and should we see that trend accelerate with continued cost reductions, moderated coal volumes, export coal pricing over the next few quarters? Thank you.

早安。我是Danny Schuster，代Allison提問。去年你們在淨額基礎上有幾美分的一次性利益。我想了解的是，如果今年第四季盈餘持平到小幅下滑，是否意味著核心盈餘其實已開始成長？而且隨著持續降本、煤炭運量趨於溫和、以及未來幾季出口煤價格變化，我們是否應該看到這個趨勢加速？謝謝。

Danny, it is Frank. We tried to give you some insight into Q4 for on a reported against a reported basis the flat to slightly down to try to give you a sense of some normal seasonality in the business quarter over quarter as well as perhaps a little bit of conservatism around what the impacts of the hurricane are ultimately going to be. So we tried to give you some clarity there.

Danny，我是Frank。我們試著就第四季提供一些指引：以「公告對公告」（reported 對 reported）的基礎來看，持平到小幅下滑，主要是想讓你理解一些業務在季度間的正常季節性，以及對颶風最終影響可能帶來的一點保守考量。所以我們試著在這裡提供一些清晰度。

And I think what you are going to continue to see us do as Cindy mentioned is continue to focus on a great service product and the productivity as well as strong pricing for the value of the service we provide. So the thesis will remain the same going forward. So I think we tried to give you some sense of where we will end up the quarter and obviously that gives you some implication for the year and thinking about next year as well.

而我認為你會持續看到我們如Cindy所提到的，繼續聚焦於優質的服務產品與生產力提升，同時也會針對我們所提供服務的價值維持強勁的定價。因此，往後的核心論點會維持不變。所以我想我們試著讓你對本季的落點有些概念，而這也會對你推估全年以及思考明年帶來一些含意。

Great. Thank you, Frank.

很好。謝謝你，Frank。

Rob Salmon, Deutsche Bank.

Rob Salmon，德意志銀行。

Good morning, guys. Frank, with your prior comments you alluded to incorporating some of the hurricane impact on the fourth quarter. Can you give us a sense of what is baked into the model?

各位早安。Frank，根據你先前的評論，你提到第四季已納入一些颶風影響。你能否讓我們了解一下模型裡已經反映了哪些假設？

And then actually a different question there, but we saw some really nice improvement in the intermodal RPU last quarter. Can you talk about your pricing initiatives within that segment and how much of that improvement was kind of the lapping out of some of the shorter length of haul business?

另外其實是另一個問題：我們看到上季聯運（intermodal）的每單位收入（RPU）有相當不錯的改善。你能談談你們在該分部的定價措施嗎？以及這個改善有多少是因為一些較短運距（length of haul）的業務已經跨越比較基期所帶來的？

So really three parts there. I will tackle the financial piece of the hurricane, kick it over to Cindy and let her talk about the hurricane impacts and then obviously Fredrik on the intermodal side.

所以這其實有三個部分。我先處理颶風在財務面的部分，接著交給Cindy談颶風的營運影響，然後當然由Fredrik談聯運部分。

We are still early in the process of understanding the impact of the hurricane. Cindy will talk about where we are operationally. We do have something modeled in there but it is really just an early estimate until we get everything back up and running and we do the tally, we really don't have a good number for you this morning. We will be out in early November and we will certainly have all of the things tied out by then and it will give you a sense of the impact then.

我們仍在早期階段，正在了解颶風的影響。Cindy會談我們在營運面目前的狀況。我們的確在模型中放入了一些影響，但在我們讓所有系統恢復運作並完成盤點之前，那真的只是初步估計；因此今天早上我們沒有一個很好的數字可以提供。我們會在11月初再對外更新，屆時我們一定會把所有項目都對齊並釐清，並讓你了解當時的影響程度。

But let me let Cindy talk about the operational piece.

不過先讓Cindy談談營運面的部分。

As far as Hurricane Matthew, I think both from a preparation and recovery, our employees have done an outstanding job managing through a storm that was highly impactful in terms of the amount of territory that was affected. So as of this morning, we are open on our core route on I-95 albeit with the use of generators to provide power to our assets that require electricity at crossings and signaling systems with generators. And commercial power still not back, we will still be nursing those generators until we can get commercial power back. But opening that route is very, very important to us. It is part of our triangle of core operations.

就馬修颶風而言，無論是事前準備或事後復原，我認為我們的員工在面對這場影響範圍極廣的風暴時，都做得非常出色。截至今天早上，我們在I-95的核心路線已經恢復通行，雖然我們必須使用發電機，為平交道與號誌系統等需要用電的資產供電。商用電力仍未恢復，我們還得靠這些發電機撐著，直到商用電力回來。但能夠打通這條路線對我們非常、非常重要。它是我們核心營運三角的一部分。

We do have yet still some branch lines that are out so unable to serve those customers as of this point. But we see good equipment availability and energy around getting those routes restored as well. And I think our impacts are going to be -- some will be capital, some will operating expense and then within that operating expense, we will see some cycle time impacts from the storm.

我們仍有一些支線尚未恢復，因此目前還無法服務那些客戶。但我們看到設備供給狀況良好，也有很高的動能在推動這些路線的修復。我認為我們的影響會是——一部分是資本支出，一部分是營運費用；而在營運費用之中，我們也會看到風暴造成的一些週期時間（cycle time）影響。

But truthfully I am extremely pleased with where we are considering where the hurricane affect us and how quickly we have been able to come back.

但坦白說，考量到颶風對我們造成的影響，以及我們能如此快速恢復，我對目前的進展感到非常滿意。

Cindy, on some of those secondary lines, the waters have not even peaked yet. So until it does, it is hard to even get in there and assess the damage, right?

Cindy，就那些次要線路而言，有些地方的水位甚至還沒到峰值。所以在水位到頂之前，很難進去評估損害，對吧？

Specifically in and around Lumberton, North Carolina, we still have our railroad under several feet of water and it is going to be days before those flood waters recede and obviously affecting the community as well. And restoring service in all of these areas we feel like helps the communities recover as we bring in supplies. So there is still quite a bit of work to do.

特別是在北卡羅來納州Lumberton周邊，我們的鐵路仍被數英尺深的積水淹沒，還需要好幾天洪水才會退去，當然也影響到當地社區。而我們覺得，在所有這些地區恢復服務，能在我們運入物資時幫助社區復原。所以仍有相當多的工作要做。

And then in terms of the intermodal question, we are continuing to get some price in intermodal. Obviously not as much as we have in the past because of the excess capacity that is out in the marketplace that is offset by what we are seeing on the fuel side. But we also are seeing some positive mix in the portfolio. Part of that is some of the short haul business that has shifted over. So overall, we are pretty pleased with the performance we have seen from an RP perspective in intermodal business.

接著就聯運（intermodal）這個問題而言，我們在聯運業務上仍持續取得一些價格提升。顯然不如過去那麼多，因為市場上存在的過剩運能，部分被我們在燃油端所看到的情況所抵銷。但我們也看到投資組合的組合結構出現一些正向變化。其中一部分來自一些已轉移過來的短程業務。因此整體而言，從聯運業務的RP角度來看，我們對目前看到的表現相當滿意。

Thanks so much for all of the color and congrats on a great quarter and managing through a really tough backdrop as well as navigating the hurricane.

非常感謝你提供這麼多細節，也恭喜本季表現出色，能在非常艱難的環境下持續推進，同時也成功應對了颶風。

Ravi Shanker, Morgan Stanley.

Ravi Shanker，摩根士丹利。

Good morning, everyone. So as a follow-up to the pricing question, your all-in same store pricing continues to remain above inflation which is great. But it has been sequentially declining a little bit. How do we think about that in the fourth quarter and beyond? What is the floor for that number? Is it at this level, is it inflation and does the bounce in export coal help you at all starting next quarter?

各位早安。作為對定價問題的追問，你們同店整體（all-in same store）定價仍高於通膨，這很棒。但它在序列上（逐季）有些微下滑。我們該如何看待第四季以及之後的走勢？這個數字的底部在哪裡？會是在目前水準、還是回到通膨水準？另外，出口煤炭的反彈是否會從下季開始對你們有所幫助？

Sure. So in terms of overall same-store pricing you're obviously transparent what we are doing there. Each and every quarter you will have an opportunity to see that in the fourth quarter. There is clearly a more difficult freight environment than has been there for a period of time as we see a significant amount of excess capacity. Our focus continues to be to price the value that we provide our customers to be able to continue to reinvest. We have an improved service product year-over-year that is very helpful. And what we are trying to do is to sell through this trough so to speak and sell the long-term access to a network and the capacity that we have.

當然。就整體同店定價而言，你也知道我們在這方面一直很透明。每一季你都有機會在第四季看到相關數據。隨著我們看到大量過剩運能，貨運環境顯然比過去一段時間更具挑戰。我們的重點仍是依據我們為客戶提供的價值來定價，以便能持續再投資。我們的服務產品相較去年有所改善，這非常有幫助。我們要做的是，某種程度上在這個谷底期把產品賣出去，並銷售長期的網路可及性以及我們所擁有的運能。

Specific to export coal, I think we have been very transparent over the last couple of years that as the market has gotten tougher since 2012, we have been taking our prices down to obviously optimize our own portfolio but also to help strategically some of the producers. We do have the ability to touch those contracts on essentially a quarterly basis or some of those are indexed. And so with the uptick in the benchmark that we have seen here which obviously gives us an opportunity to leverage that uptake, which is good news.

就出口煤炭而言，我想過去幾年我們一直很透明：自2012年以來市場變得更艱難時，我們一直在下調價格，當然是為了優化我們自己的投資組合，同時也在策略上協助部分生產商。我們基本上可以按季去調整這些合約，或其中一些是與指數連動。因此，隨著我們看到基準價格出現上揚，這顯然讓我們有機會去運用這波上升，這是好消息。

Great. Thank you.

很好。謝謝。

Ken Hoexter, Bank of America Merrill. Lynch.

Ken Hoexter，美國銀行美林。Lynch。

Great. Good morning. Thanks, Michael. Just wanted to talk, you mentioned to Tom earlier about increasing car lengths and maybe more investment. Cindy, is this something you need to make more additional CapEx and spending on to be able to get even longer train lengths? Is that something that you are starting to peak out or is there still additional room for productivity improvement there?

很好。早安。謝謝你，Michael。我想談一下，你先前對Tom提到增加車列長度以及可能更多投資。Cindy，這是否代表你們需要增加更多資本支出（CapEx）與投入，才能讓列車更長？這件事是否已開始接近上限，或在生產力提升方面仍有更多空間？

So I would say that we are making investments. I've been talking the last couple of quarters about our route from Nashville to Cincinnati that we were investing in this year that that would be in service as of the third quarter. So it is in service and we have seen some good improvement in length there. We were restricted to based on sightings to about 6500 feet on that corridor so it is that type of investments that we will continue (multiple speakers).

我會說我們確實正在投資。過去幾季我一直在談我們今年投資的納什維爾到辛辛那提路線，並表示第三季會投入營運。現在已經投入營運，我們也看到那段路線的列車長度有不錯的改善。由於會車線（sightings）限制，我們在那條走廊原本大約被限制在6,500英尺左右，所以我們會持續進行這類型的投資（多位講者）。

What can you do now?

你們現在可以做到多少？

Across there, about 12,000, about 12,000 feet. So moving forward, we have identified locations to continue those types of investments. But as you relieve the pressure on the corridor that we just did, then you now find that you are meeting up against some other impacts on other corridors. So that is where we will be looking and are looking and in the process of assessing and/or building to continue to improve in train length.

在那段大約12,000英尺，大約12,000英尺。所以往前看，我們已找出一些地點，會持續進行這類型的投資。但當你像我們剛做的那樣，解除某條走廊的壓力後，你就會發現又會碰到其他走廊上的一些影響。因此，我們會在那些地方著手，也正在著手，並在評估及／或建置的過程中，持續改善列車長度。

Hey, Ken, one other thing on the CapEx, was Cindy is referring to is absolutely what we are going to do going forward. It is a reallocation of capital within that longer-term guidance that we have spoken about previously. So as you go into 2017 the things that are strategically aligned in terms of the Network of Tomorrow, highly automated railroad, service excellence etc., those are going to be within the confines of the normal capital process. And as you size that next year, I wouldn't think of that as being incremental investment versus reallocated investment within that portfolio.

Ken，關於資本支出還有一點：Cindy剛提到的，確實就是我們未來要做的事。這是在我們先前談過的長期指引範圍內，進行資本的重新配置。因此，當你進入2017年，那些在策略上與「明日網路」（Network of Tomorrow）、高度自動化鐵路、服務卓越等方向一致的事項，都會在正常的資本流程框架內進行。而當你規劃明年的規模時，我不會把它視為額外的增量投資，而是把投資組合內的重新配置。

That is really helpful. Thanks, Frank. Just Fred, a follow-up if I may. On coal, your thoughts on utility on where inventory levels are, this is really interesting just given I don't know maybe the extended heat that we had here. But is there a stabilization going on on the domestic side? And your thoughts, are we at an inflection point perhaps where I don't know if inventory levels have come down far enough or if natural gas pricing is high enough, you maybe just throw some thoughts on the domestic side?

這非常有幫助。謝謝，Frank。Fred，如果可以我再追問一下。關於煤炭，你對公用事業端庫存水位的看法是什麼？這很有意思，因為我不知道是否與我們這裡延長的高溫有關。但國內端是否正在出現穩定？你怎麼看：我們是否可能正處於一個拐點？也許庫存已經降得夠多，或天然氣價格已經高到某個程度；請你談談國內端的看法。

So clearly the hot summer has been helpful, the cooling degree days has been very helpful especially in the South, we have seen significant reduction in the inventory levels I think in the South. In terms of days burn, we are down from 150 a year ago to somewhere around 100 now and even in the North, we have come down a little bit.

很明顯，炎熱的夏天帶來了幫助，冷房度日（cooling degree days）非常有利，尤其是在南部；我認為我們在南部看到庫存水位大幅下降。以可燃用天數（days burn）來看，我們從一年前的150天下降到現在大約100天左右，甚至在北部也略有下降。

I would say though overall that they are probably still slightly above where they would like for them to be. There are certain places they are less, certain places they are more. But they are probably still a little bit above where they would like for them to be. But it is good news that we are starting to see that. And we will also to you point, the natural gas prices they have come up a little bit, and that is also helpful. Generally though we do need to see those natural gas prices closer to $3.50 or above to make a really meaningful impact and we are excited where we are heading. We will have a much better view I think as we get into the fourth quarter and early next year in terms of what coal will do for 2017, not just on the domestic side but also on the export side.

不過我會說，整體而言庫存可能仍略高於他們希望的水準。有些地方較低，有些地方較高。但整體可能仍稍微高於他們理想的水準。不過好消息是，我們開始看到這樣的變化。另外如你所提，天然氣價格也上來了一點，這同樣有幫助。但一般而言，我們需要看到天然氣價格接近每百萬英熱單位（MMBtu）3.50美元或更高，才會產生真正有意義的影響；我們對目前的走向感到振奮。我想當我們進入第四季以及明年初時，對2017年煤炭走勢會有更清楚的視角，不僅是國內端，也包括出口端。

Thanks for the thoughts. Appreciate it.

謝謝你的看法。感謝。

Brandon Oglenski, Barclays.

Brandon Oglenski，巴克萊。

Good morning, Michael, and thanks for taking my question. So when I look at these efficiency numbers, they are pretty big. When we are (technical difficulty) 300 million 400 million in efficiency this year, that would equate to -- I don't know, maybe greater than 3% on the operating ratio, 300 basis points that is. So I mean is that the type of improvement that investors should be thinking about as we look into 2017 and beyond? Can we start to see 100 basis points, 200 basis points improvement annually on the operating ratio if these efficiency targets hold and you get to a more stable or maybe even a growth environment?

早安，Michael，謝謝你回答我的問題。我看這些效率數字，幅度相當大。如果我們今年有（技術問題）3億到4億美元的效率提升，那相當於——我不知道——也許對營運比率（operating ratio）改善超過3%，也就是300個基點。所以我的意思是，當我們展望2017年及之後，投資人應該以這種改善幅度來思考嗎？如果這些效率目標能維持，且你們進入更穩定、甚至成長的環境，我們是否能開始看到營運比率每年改善100個基點、200個基點？

I think as I said before, we had a pretty extraordinary year this year which you are referring to which is part of our views on how our business mix has changed with a less reliance upon coal. And so there are some structural take-out that we have put in place that can't repeat because it is structural around the coal markets.

我想如我之前所說，今年是相當不尋常的一年，你所提到的正是其中一部分；這也反映我們的業務組合已改變，對煤炭的依賴降低。因此，我們已經落實了一些結構性的成本移除（structural take-out），但因為這些是圍繞煤炭市場的結構性調整，所以無法重複發生。

But going forward, we have lapped for this year some of our train length initiatives but as I mentioned in the last question, we see opportunities going forward. We see productivity available to us that we traditionally have around streamlining again around our core network which is part of our Network of Tomorrow. But I think run rate wise looking into 2017, it would be more of a $150 million offsetting inflation kind of number to pace off of after having such a strong year this year. But we don't stop thinking about ways to improve in our efficiencies, we understand that as our business mix changes we have to make our merchandise in intermodal service products more profitable and the operating department has a huge lever we have to pull the cost side to make that happen.

但展望未來，我們今年在部分列車長度計畫上已經進入比較基期，不過如我在上一個問題提到的，我們仍看到未來的機會。我們看到仍有可用的生產力提升空間，傳統上我們會再次聚焦於核心路網的精簡化，這也是我們「明日路網（Network of Tomorrow）」的一部分。但若以運行率（run rate）來看、展望2017年，在今年表現如此強勁之後，較可能是一個約1.5億美元、用以抵銷通膨的數字作為基準。但我們不會停止思考提升效率的方法；我們理解隨著業務組合改變，我們必須讓一般貨運（merchandise）與聯運（intermodal）服務產品更具獲利性，而營運部門在成本端有很大的槓桿可以運用，以促成這件事。

So we are going to continue to look for those opportunities and drive it forward. I will say -- add to that that we also are going to serve our customers effectively to provide a very good service for them that allows Fredrik to grow the business and price the business.

因此我們會持續尋找這些機會並推動向前。我也要補充——我們同時也會有效地服務客戶，提供非常好的服務，讓Fredrik能夠擴大業務並為業務定價。

Brandon, one other thought is in terms of your allusion to growth there, as we grow especially if we grow in the class merchandise business in automotive and intermodal, you are going to see incremental margins that really pull on the operating leverage point. So in addition to the productivity line you should see the benefit of that again if the economy is cooperative for us longer-term.

Brandon，另外一個想法是，就你提到的成長而言，當我們成長、尤其是在汽車與聯運等一般貨運業務成長時，你會看到增量利潤率（incremental margins）確實會拉動營運槓桿。所以除了生產力那一條線之外，如果經濟在長期對我們有利、願意配合，你也應該會再次看到那方面的效益。

I should add we do see capability of adding growth in pretty much any market without adding cost back one for one so we do see great leverage there.

我還要補充，我們確實看到幾乎在任何市場都能在不把成本一比一加回去的情況下增加成長，因此我們在那方面確實有很好的槓桿。

I guess I don't want to be too critical here but if all you are doing is offsetting inflation next year let's say on the productivity side, this is going to come off as critical but how is the CSX of Tomorrow any different than grow to 65 by 2015 which we heard in 2011? It just sounds like it is going to be a struggle to get a lot of operating ratio improvement unless something changes on the demand side or am I thinking about that wrong?

我想我不想太過苛刻，但如果你們明年在生產力方面所做的只是抵銷通膨，這聽起來可能有點批評：那麼「明日的CSX」和我們在2011年聽到的「到2015年把營運比率降到65」有什麼不同？聽起來除非需求端有些變化，否則要取得很多營運比率改善會很吃力；還是我這樣想不對？

I think everything is on the table, has been far as long as I have worked here and we are continuing to make sure that any opportunity we have we are going to take advantage of. So I think to your point, it may seem not as strong as this year but our objectives are to not just look at 2017 by itself but also continuing into the future and drive operating margins on the cost side. And we are coming off a strong year. We think we can offset inflation next year but we are not going to leave any opportunity out there on the cost side.

我認為所有事情都在檯面上；至少就我在這裡工作的時間以來一直如此，而我們也會持續確保，只要有任何機會，我們都會加以利用。所以我想就你說的，可能看起來不如今年強勁，但我們的目標不只是單看2017年，而是也要延續到未來，並在成本端推動營運利潤率。而且我們是從一個強勁的年度走過來的。我們認為明年可以抵銷通膨，但我們不會在成本端放過任何機會。

Brandon, this is Michael. Obviously productivity is going to be key and as Cindy said, always strive to do more than what she is talking about. But growth does have to be a critical component as we move to the mid-60s operating ratio. We've got a very tepid economy here for the last two years and clearly growth has to be part of that equation. And we think with the service product we have, Fredrik's team, can grow it once we see any signs of vibrancy in the economy but that is part of the equation.

Brandon，我是Michael。顯然生產力會是關鍵；如Cindy所說，我們也一直努力做到比她所談的更多。但當我們要把營運比率推進到60%中段（mid-60s）時，成長必須是關鍵組成。過去兩年經濟相當疲弱，顯然成長必須納入這個方程式。我們認為以我們的服務產品，加上Fredrik的團隊，一旦經濟出現任何活力的跡象，就能帶動成長；但那是方程式的一部分。

Brandon, we are confident in our ability to get to the mid-60s operating ratio. The timing of that is going to depend on the rate of decline in coal obviously but continuing to focus on value pricing for the service product that we provide to our customers, continuing to have productivity offset inflation, I mean you do get margin expansion by doing that year-over-year.

Brandon，我們對達成60%中段的營運比率很有信心。達成的時間點顯然將取決於煤炭下滑的速度；但只要持續聚焦於我們提供給客戶的服務產品之價值定價（value pricing），並持續讓生產力抵銷通膨，我的意思是，你確實能透過逐年這樣做來擴大利潤率。

Okay, I appreciate it.

好的，感謝。

Brian Ossenbeck, JPM.

Brian Ossenbeck，JPM。

Good morning. Thanks for getting me on the call here. Just a question on the coal network and rationalizing that further. Obviously you made some actions with Erwin and Corbin but you are going to lap peer pretty soon into next year. So what are you looking at when it comes to being able to take the next steps? Is it just coal volumes getting to a certain level, densities perhaps getting a little bit higher when you factor in some of the point pricing? So just kind of your thought process and what you think just generally on timing for some of these initiatives to keep moving in the coal fields?

早安。謝謝讓我加入這通電話。我想問一個關於煤炭路網以及進一步合理化的問題。顯然你們在Erwin和Corbin已採取一些行動，但你們很快就會在明年進入同業比較基期（lap peer）。所以在能夠採取下一步方面，你們在看什麼？是煤炭運量降到某個水準、或在把一些點對點定價（point pricing）因素納入後，密度（densities）可能稍微提高嗎？所以想請教你們的思考流程，以及你們對於在煤田持續推動這些計畫之時間點的大致看法？

I think we are going to serve our coal customers well and that is -- Fredrik and I and our teams work on that to make sure that we are available and capable of providing service to our coal customers. As things change within the coal fields, I think even more than they already have, we will take the steps that we need to take to structurally change along with those changes.

我認為我們會把煤炭客戶服務好；Fredrik和我以及我們的團隊會一起確保，我們能夠隨時提供並具備服務煤炭客戶的能力。隨著煤田內部情勢變化——我想甚至會比目前已經發生的變化更大——我們會採取必要步驟，配合這些變化進行結構性的調整。

So we are prepared to continue to look there but it is a profitable business for us and we intend to stay in that business where the customers are for as long as they are there.

因此我們已準備好持續在那裡尋找機會；但這對我們而言是一門獲利的業務，我們打算在客戶仍在的地方、只要他們還在，就持續經營這項業務。

Okay. Thanks, Cindy. Michael, one follow-up on the growth that you mentioned, Port of Savannah was out maybe a couple of weeks ago now announcing a large expansion of the rail terminal there. It looks like they are going to double capacity, longer trains at the facility. Is that volume starting to be spoken for, attracting customers? Or do you really need to see the Port finish the complete expansion sometime in 2020 before that will really start to drive some more volume on your network? Thanks.

好的。謝謝，Cindy。Michael，我再追問一個你提到的成長：Savannah港大概在幾週前宣布將大幅擴建那裡的鐵路貨運站。看起來他們會把產能加倍、並在該設施運行更長的列車。那個運量是否已開始被預訂、吸引客戶？還是你們真的需要等到港口在2020年左右完成整體擴建後，才會真正開始在你們的路網上帶動更多運量？謝謝。

This is Fredrik. What we are seeing and have been seeing is a continued shift towards more East Coast international intermodal coming in versus West Coast. And as a result, the ports are clearly making investment not just Savannah but other ports as well and we are as well to make sure we can serve that. And that is attractive business that we want to get more of and as we see additional investments come online, we will have an opportunity. In the Savannah case, we certainly have grown our business significantly there already and we expect to continue to see that going forward but that is true for the other ports as well.

我是Fredrik。我們看到、而且一直看到的是，國際聯運貨量持續從西岸轉向更多由東岸進來。因此，各港口顯然都在投資——不只是Savannah，其他港口也是——我們也同樣在投資，以確保我們能夠提供服務。那是一門我們想要取得更多的具吸引力業務；隨著更多投資上線，我們將有機會。以Savannah為例，我們在那裡的業務其實已經顯著成長，我們也預期未來會持續看到成長；但其他港口也是如此。

All right. Thanks, Fredrik.

好的。謝謝，Fredrik。

Chris Wetherbee, Citigroup.

Chris Wetherbee，Citigroup。

Good morning, guys. My question is on CapEx. Just kind of wondering as we look at the year-to-date progress so far toward the $2.7 billion number, there still is a lot left to go here. I don't think you are taking the $2.7 billion number down. I'm guessing that the locomotive pull forward from 2017 might still be back-end waited and might be part of that sort of $1 billion plus that I think you are targeting for the fourth quarter. But just want to get a rough sense of maybe how we think about this number?

早安，各位。我的問題是關於資本支出（CapEx）。我只是想了解，當我們看今年迄今朝27億美元目標的進度，目前仍有很多尚未支出。我不認為你們會把27億美元的數字下修。我猜從2017年提前到今年的機車採購（locomotive pull forward）可能仍偏向在後段發生，並可能是你們第四季目標的10億美元以上那一塊的一部分。但我想大致了解一下，我們應該如何看待這個數字？

And then maybe thinking a little bit longer-term to a previous question, Frank, you said it is sort of a reallocation of where you are spending the capital. What is the right number to be thinking about of that reallocated capital? Is it a percent of revenue, is it an absolute number in the mid $2 billion type of range? I just want to get a rough sense of maybe how to think about that.

另外，從更長期來看、呼應前一個問題，Frank，你說這比較像是把資本支出重新配置到不同的用途。那麼對於這些被重新配置的資本，應該用什麼數字來思考才對？是營收的百分比？還是絕對金額、例如落在20多億美元中段（mid $2 billion）的區間？我只是想大致了解一下該如何思考。

Sure. It is Frank. So on the $2.7 billion, that is what we call our managed capital number. As part of that, you will have two things in there. You will have the $300 million or so that we pulled forward from the seller financing of next year into this year and paying off locomotives as delivered. The other piece which will show up in other financing activities so not in the property additions line will be $300 million for paying off engines that we took delivery of last year. So your $2.7 billion is again, we try to be very transparent with you in terms of the capital dollars that we are spending this year although you do have some geography differences on the cash flow statement.

當然。我是 Frank。關於這筆 27 億美元，那是我們所稱的「管理資本」數字。其中會包含兩個部分。第一個部分是約 3 億美元，我們把原本明年賣方融資的資金提前到今年，並在機車交付時逐步償付。另一個部分會列在其他融資活動中，而不是列在資產新增（property additions）那一行，金額為 3 億美元，用於償付我們去年交付的引擎。所以你的 27 億美元再次說明，我們試著在今年資本支出金額上對各位非常透明，儘管現金流量表上確實會因分類而有些差異。

In terms of 2017 when you think about where we are, we are looking very hard at infrastructure and equipment given the environment that we are in and given the Network of Tomorrow strategy that we have. What we have been talking about is in a normalized five or 10 year view in retrospect for CapEx, we generally spend somewhere between 12% and 15% of that capital portfolio on return seeking investments. What we are looking forward to doing on a going forward basis is to increase that allocation to more like 20% or 25% of the capital portfolio.

就 2017 年而言，當你思考我們目前的位置時，鑑於我們所處的環境以及我們的「明日網路（Network of Tomorrow）」策略，我們正非常仔細地檢視基礎建設與設備。我們一直在談的是，若以回顧的方式用一個常態化的 5 年或 10 年視角來看資本支出（CapEx），一般而言我們會把資本組合中的約 12% 到 15% 用於追求報酬的投資。而我們接下來要做的是，在未來把這個配置比例提高到更接近資本組合的 20% 或 25%。

So not looking to necessarily increase capital based on the strategy, really looking to reallocate to make sure that we are focused on the things that are going to drive value in the future.

因此，並不是要因為策略而必然提高資本總額，而是更著重於重新配置，確保我們聚焦在能在未來驅動價值的事項上。

Okay, that is helpful. I appreciate that color. And then the follow-up just sort of in the context of capital allocation across the spectrum, when you think about next year debt levels relative to share buybacks, how does share buyback play into the long-term plan?

好的，這很有幫助。感謝你提供這些補充說明。接著追問一下，從整體資本配置的脈絡來看，當你思考明年的負債水準相對於庫藏股回購時，股票回購在長期計畫中扮演什麼角色？

Sure. It is part of the balanced deployment of capital. Certainly the primary focus of capital is going to be to reinvest in the business for reliable railroad and accretive type investments. Secondarily would be the dividend piece and obviously we are looking hard at that since we took a break this year on the dividend. But we are going to look hard at that next year.

當然。這是資本均衡運用的一部分。資本的首要重點，肯定會是再投資於業務，以支持可靠的鐵路營運以及具增益（accretive）性質的投資。其次是股利的部分，顯然我們也正密切檢視，因為今年我們在股利上暫停了一次。但明年我們會認真評估這件事。

And then looking at where we are on operating cash flow next year and sizing a buyback program that generally we talk to you about in the end of the first quarter of the given year. So I think that order is important for the investors to keep in mind and realizing that the environment that we are in now is perhaps quite a bit different than the environment than we were in in 2015 when we increased the dividend buying $0.02 and announced the two-year, $2 billion program that we will complete by April of next year.

接著，我們會看明年的營運現金流狀況，並據此規劃回購方案的規模；一般我們會在該年度第一季末與各位溝通。所以我認為這個順序對投資人很重要，也要理解我們現在所處的環境，可能與 2015 年我們把股利提高 0.02 美元、並宣布兩年期 20 億美元回購計畫（我們將在明年 4 月前完成）時的環境有相當大的不同。

Okay, that is very helpful. Thank you for the time. I appreciate it.

好的，這非常有幫助。謝謝你撥冗。我很感謝。

Bascome Majors, Susquehanna.

Bascome Majors，Susquehanna。

Thank you, good morning. Frank, I wanted to drill down on another answer on the margins and cost side. Given the cost take-out that you have achieved over the last several quarters, it has been a while since we have had a year where you went from a big revenue decline to potentially return to growth and your best incrementals of the recent years have been around 50% on the margin side. I'm just curious not necessarily saying that revenue will return next year, but when it does return given the take-outs you have done, what kind of incrementals, ballpark, are you thinking about in the business?

謝謝，早安。Frank，我想針對你先前關於毛利率與成本面的另一個回答再深入一些。考量你們在過去幾個季度達成的成本削減成果，距離上一次我們看到你們從營收大幅下滑、到可能回到成長的一年已經有一段時間了；而你們近年最好的增量利潤率大約在 50% 左右。我只是好奇——不一定是說明年營收就會回升——但當營收回升時，考量你們已做的成本削減，你們對業務的增量利潤率大概（粗略）會怎麼看？

When you look at what we've done on the cost side certainly that sets up incremental margins that are probably better than what they have been historically. But as I alluded to in the answer to the earlier question, it really depends on how the business comes back. If it comes back in areas where you are adding a boxcar onto an existing train, an intermodal container onto an existing train, an auto wrack onto an existing train, that is really where you are going to get the incremental margin and the operating leverage that you are referring to.

從成本面來看，我們所做的事情確實讓增量利潤率可能會比過去的歷史水準更好。但如同我在前一個問題的回答中提到的，這真的取決於業務是如何回來的。如果回升發生在你只是把一節箱型車掛到既有列車上、把一個聯運貨櫃加到既有列車上、把一節汽車運輸車廂加到既有列車上，那才是你會看到你所提到的增量利潤率與營運槓桿的地方。

If it is something that is on the bulk side of the business which is going to be a new train start, the incremental margins are going to essentially be what the absolute margins are in that business by and large. So I do think we have set ourselves up for a good run as the economy improves and if volumes come back especially on the class side of the business.

如果回升是在散裝（bulk）業務那一側，且需要新增一班列車啟動，那增量利潤率基本上大致就會等同於該業務本身的絕對利潤率。所以我確實認為，隨著經濟改善、以及運量回升，特別是在我們所謂的「class」那一側的業務回來時，我們已經為一段良好的成長期做好準備。

Thank you for that and just a bit of a housekeeping on your cost guidance for 4Q, the MS&O guide, a flat year-over-year, that is signaling a pretty significant Q over Q growth maybe 12% or so. And I know you have the extra week but that is maybe 10 points or so above the typical sequential growth there. Can you just help us understand what is driving that besides above and beyond the extra week?

謝謝你的說明，另外有個小問題想確認一下：你們對第四季成本指引中，MS&O 指引為年對年持平，這代表季對季可能會有相當顯著的成長，大概 12% 左右。我知道有多一週的因素，但這可能仍比典型的季節性成長高出約 10 個百分點。你能否協助我們理解，除了多一週之外，還有哪些因素在推動？

Yes, there are a few things on the sequential side to think through given that we have got some incremental bulk business on the export side, the grain side and the automotive side, we have additional engines and freight cars in the mix relative to third quarter. So clearly that is going to impact the MS&O line on the materials and supply side.

是的，從季對季來看有幾件事需要釐清：考量出口端、穀物端以及汽車端的散裝業務有一些增量，我們相較第三季會有更多的引擎與貨車投入運用。因此這會明顯影響 MS&O 這一行中材料與供應的部分。

We are expecting normal seasonality in terms of normal winter. We didn't see necessarily as much of that last year but we are expecting that this year just given what we understand the winter to hold. There is a normal seasonal shift between the third quarter and the fourth quarter as we stop the construction season as it gets too cold and too icy to work up North. So we do have that.

我們預期會出現正常的季節性，也就是正常的冬季。去年我們未必看到那麼明顯，但今年基於我們對冬季狀況的理解，我們預期會回到正常。第三季到第四季之間也有一個正常的季節性轉換：當天氣變得太冷、太結冰而不適合在北方施工時，我們會結束施工季。所以這部分我們也會有。

And then there is normally on the technology side as annual hardware software maintenance contracts come due. So we have that just in terms of seasonality and we are usually a little less fuel-efficient as we get into the fourth quarter. I mean, we are going to pull on everything as you have seen us do already this year. But as we set up a more normal fourth quarter that is how we see it going.

另外在科技面，通常年度硬體、軟體維護合約到期時也會反映出來。所以就季節性而言我們會有這些因素，而且進入第四季時我們通常燃油效率會稍微差一些。我的意思是，我們會像今年你們已經看到的那樣，盡力在各方面拉動改善。但若以較正常的第四季來設定，這就是我們的看法。

The other thing to think through is a lot of the hurricane side expenses to the extent they hit the OpEx line are going to hit here. So we've got a little bit of a piece in there. And then when you look at the productivity as we have targeted about $400 million, it implies about a $60 million run rate for the quarter and that is a little less than what we had seen in the third quarter.

另外一點要考量的是，颶風相關費用在影響營業費用（OpEx）那一行的部分，會在這裡反映。所以其中會有一小部分。再者，若看我們以約 4 億美元為目標的生產力提升，換算下來代表本季約 6,000 萬美元的季度運行率（run rate），這比第三季看到的略低一些。

So you add all of that up and it is going to be it is going to be about flat on a year-over-year basis.

把這些全部加總起來，年對年大致就會是持平。

Thank you for your time.

謝謝你撥冗。

Scott Group, Wolfe Research.

Scott Group，Wolfe Research。

Thanks. Good morning, guys. Wanted to just go back to coal for a second. Fredrik, do you have the inventory levels for the North? And then on the met side, how quickly do the export rates reset higher and can you just kind of frame what that opportunity is? Maybe how much of the export rates dropped over the past five years and kind of order of magnitude, how much do you think they can rebound?

謝謝。各位早安。我想再回到煤炭話題一下。Fredrik，你有北方地區的庫存水位資料嗎？另外在冶金煤（met）方面，出口費率多久會重新上調（reset higher）？你能否大致說明那個機會有多大？也許可以談談過去五年出口費率下滑了多少，以及以量級來看，你認為它們可能反彈多少？

In terms of the inventory levels, we use PIRA data. So in the North, we went from about 95 days of burn at this time last year and we are down to 90 now and in the South 150 down to about 102. So significant improvement but as I said earlier, still above what I would consider target level at this time of the year. What is target has obviously changed a little bit more difficult, look more difficult these days because it depends a lot of where the utility is in the dispatch order, etc.

就庫存水位而言，我們使用 PIRA 的數據。因此在北區，我們從去年此時約 95 天的消耗天數降到現在的 90 天；南區則從 150 天降到約 102 天。所以改善幅度顯著，但如我先前所說，仍高於我認為此時節的目標水位。目標水位顯然也有些變化，這些日子看起來更難界定，因為它在很大程度上取決於公用事業在調度順序中的位置等等。

To your question about met, obviously it has come down significantly. I don't have a number that I think we have shared before but it is a significant adjustment and you have seen that play out in our RPU line really since 2012. And as we now sit here and we have seen the benchmark go up to [200 from 92.50] I think it was in the third quarter, that is an opportunity for us to leverage. And our contracts have evolved over time to be essentially quarterly or based on an index that is tied to the benchmark.

針對你關於 met 的問題，顯然它已大幅下滑。我手邊沒有一個我們之前曾分享過的數字，但這是一個顯著的調整，而你也從 2012 年以來在我們的 RPU 項目中看到這點逐步反映出來。而當我們現在坐在這裡，看到基準從第三季的 [92.50 上升到 200]，我認為這對我們而言是可以加以運用的機會。而我們的合約也隨時間演進，基本上改為按季，或是依據與該基準連動的指數來定價。

Okay. And then just lastly for Frank, I know we've got big incentive comp headwind in the fourth quarter, third quarter, should we be thinking about a similar large headwind in the first half of next year too? Or do we kind of move to more of a normalized incentive comp run rate on a year-over-year basis 2017?

好的。最後一個問題給 Frank：我知道第四季、第三季在大型獎酬激勵（incentive comp）方面有很大的逆風；那我們是否也應該預期明年上半年同樣會有類似的大幅逆風？還是說在 2017 年，我們會在年對年比較下回到較正常化的獎酬激勵費用水準？

Yes, more normalized.

是的，會更正常化。

Perfect. Thank you, guys.

太好了。謝謝各位。

Jason Seidel, Cowen.

Jason Seidel，Cowen。

Thank you, operator. I guess I will piggyback a little bit on that coal question. When you talk about more normalized target levels, where would you put those target levels in both your Southern and Northern regions?

謝謝，接線員。我想我會延伸一下剛才那個煤炭的問題。當你談到較正常化的目標水位時，你會把南區與北區的目標水位分別放在什麼位置？

As I said in the past, we have used a targeted base burn somewhere around 55 in the North, 70 in the South. However, I do think that could be a little bit misleading these days because of the fact that utilities are situated very differently in terms of where they are in the dispatch order. It was easier to give those target levels in the past when you were the baseload. Now it varies really by utility by utility.

如我過去所說，我們在北區的目標基準消耗天數大約是 55 天、南區約 70 天。不過，我確實認為在這些日子裡，這樣的說法可能有點誤導，因為各家公用事業在調度順序中的位置差異很大。過去當你是基載電源時，要給出這些目標水位比較容易。現在則真的會因公用事業而異。

But the good news is we made significant inroads especially in the South and we are getting closer to a more normalized level and there are utilities and we have seen this here over the last three months that clearly are below where they want to be but we still have several utilities that are significantly above.

但好消息是，我們已取得顯著進展，尤其是在南區；我們正更接近較正常化的水位。過去三個月我們也看到，確實有一些公用事業的庫存低於他們希望的水準，但我們仍有幾家公用事業的庫存顯著偏高。

Okay. When you look at that $3.50 bogey that you brought up with natural gas, if we are well above that for a considerable amount of time, what percent of the business do you think of your coal business is going to be positively affected by that?

好的。當你看你提到的天然氣 $3.50 這個門檻（bogey）時，如果我們在相當長一段時間都遠高於這個水準，你認為你們的煤炭業務中，大約有多少比例會因此受到正面影響？

So if you look at where we were here this quarter, we had about 58% of our business unit came from Illinois basin or Powder River basin. We saw a pretty significant shift toward the Illinois basin within the number and we have said publicly that when it is $3.50 or above, that part of our portfolio, so 58% of our portfolio, is essentially in the money. And that will allow for significant increased utilization of those plants.

如果你看我們本季的組成，大約有 58% 的業務單位來自伊利諾伊盆地（Illinois Basin）或粉河盆地（Powder River Basin）。我們看到在這個數字裡，明顯朝伊利諾伊盆地的比重移動；而我們也公開表示，當天然氣在 $3.50 或以上時，我們投資組合中的那一部分——也就是 58%——基本上就屬於「有利可圖／具經濟性」（in the money）。這將使那些電廠的利用率得以顯著提升。

Now there is a lot of other factors that plays into that. Clearly where the plants are located makes a big difference. As you all know that the natural gas price of $3.50 is Henry Hub price. It is very different in certain other parts of our service territory. But as a general rule, I still think that holds pretty well in terms of an indication where the plants that we serve become more competitive.

當然，還有很多其他因素會影響。很明顯，電廠所在地點會造成很大差異。各位也都知道，$3.50 的天然氣價格指的是 Henry Hub 價格。在我們服務區域的其他某些地方，價格會非常不同。但作為一般性原則，我仍認為這個門檻在判斷我們所服務的電廠何時變得更具競爭力方面，仍相當適用。

Okay, that was very helpful. I guess my follow-up question is going to be on the pricing side when you look at intermodal merchandise still well above your cost of inflation but it did decelerate on a sequential basis, how are you thinking about sort of that truck competitive market going forward? It looks like we have had a little bit of uptick on the spot side here and with ELDs coming up, what are you guys looking for in 2017 on that market?

好的，這非常有幫助。我接下來的問題會在定價面：當你看聯運雜貨（intermodal merchandise）的價格仍遠高於你們的成本通膨，但按季比較已放緩，你們如何看待未來卡車競爭市場的走向？看起來現貨市場最近有些回升，而且 ELD 即將上路，你們對 2017 年這個市場有什麼觀察與期待？

Sure. I mean it is clear that we have had a tough market for an extended period of time now in terms of excess capacity and it does impact not just intermodal business but certain markets within our merchandise business as well. Generally shorter haul, also generally lower contributory traffic that are most susceptible to being switched over to truck. As the market turns and it will turn, we see new orders of Class A trucks have come down significantly, 30%, 40% year-over-year year to date.

當然。很明顯，我們在運能過剩方面已經面臨一段很長時間的艱困市場；這不只影響聯運業務，也影響我們雜貨業務中的某些市場。一般而言，較短里程、同時也是貢獻度較低的貨流，最容易被轉移到卡車。隨著市場回轉——而它終將回轉——我們看到 A 級卡車的新訂單已顯著下滑，今年以來年對年下降 30% 到 40%。

We know ELDs will be coming in sometime in the second half of next year. And if the economy continues to expand and unemployment stays low, that should lead to a much better environment as we get into late 2017 and that will be helpful. So our challenge to our team right now is to sell that improved service product that we have, sell through this trough and sell the long-term access to our network that allows us to continue to reinvest in our business.

我們知道 ELD 會在明年下半年某個時間點上路。如果經濟持續擴張、失業率維持低檔，到了 2017 年下半年，環境應該會好很多，這會帶來幫助。因此，我們目前對團隊的挑戰是：把我們已改善的服務產品賣出去，在景氣谷底中持續銷售，並銷售我們網路的長期可及性，讓我們能持續再投資於業務。

Thank you for all that color and everyone thank you for your time as always.

謝謝你提供這麼多細節，也謝謝各位一如既往撥冗參與。

Ben Hartford, Baird.

Ben Hartford，Baird。

Good morning, all. Cindy, could you talk about when you would anticipate a trough in the employee count? Is there any sort of visibility to that during the fourth quarter or in the early part of 2017?

各位早安。Cindy，你能談談你預期員工人數何時會觸底嗎？在第四季或 2017 年初，對此是否有任何能見度？

It is Frank. What we did was we guided to down slightly sequentially but also put a bit of a qualifier on that one given the fact that we were probably down more than slightly sequentially from Q2 to Q3. So we are continuing to look across the board at all areas of resources whether it is train and engine crews are folks in the rest of the operating department or folks on the G&A side. I mean what you have seen is an across the board approach in terms of overall productivity as well as on the resource side in challenging the need for every dollar and every vacancy when it comes up, we are taking a look at it and making sure whether or not we need to fill that.

我是 Frank。我們先前的指引是按季小幅下降，但也加了一點但書，因為從第二季到第三季，我們的下降幅度可能不只是「小幅」。因此，我們持續全面檢視各領域的資源配置，不論是列車與機車乘務組（train and engine crews）、營運部門其他人員，或是 G&A 端的人員。你所看到的是一種全面性的作法：在整體生產力以及資源端，我們都在挑戰每一筆支出、每一個出缺；當有職缺出現時，我們都會檢視並確認是否真的需要補人。

So I think you are going to continue to see us focus although the magnitude of the decreases on a year-over-year basis are obviously going to get smaller and smaller as we go forward. But you will continue to see us look very hard at resources. Cindy, anything to add?

所以我認為你會看到我們持續聚焦，雖然年對年下降的幅度，隨著時間推進顯然會愈來愈小。但你仍會看到我們非常嚴格地檢視資源配置。Cindy，還有要補充的嗎？

I think you hit it.

我想你都說到了。

Good. Fredrik, if I could ask you just more of a conceptual question on the volume side. Volumes over the past 10 or 15 years have been flattish to even down. Obviously the coal headwinds have been noted. So as we look forward the economic environment being uncertain if we use industrial production growth as a guide, do you have confidence or any sort of visibility to volume growth more closely approximating even whatever US IP growth ends up being as coal, as we transition away from coal given the volume growth opportunities longer-term on the intermodal side? Or is that 10- to 15-year trend of kind of flattish volumes in the business, is that still a pretty appropriate bogie to think about over the next three to five years?

好的。Fredrik，如果可以我想問一個較概念性的運量問題。過去 10 到 15 年，運量大致持平甚至下滑。煤炭的逆風當然已被提及。因此往前看，在經濟環境不確定的情況下，如果我們以工業生產（IP）成長作為指標，當我們逐步轉離煤炭、且長期在聯運端有運量成長機會時，你是否有信心或任何能見度，讓運量成長能更接近美國 IP 的成長（不論最後是多少）？或者說，這種 10 到 15 年來運量大致持平的趨勢，仍是未來三到五年一個相當合適的「門檻／基準」（bogey）？

I think absolutely. I think that if you look over long period of time if you take up the coal business and just look at the correlation between IDP and our merchandise business, it has correlated pretty well with it, probably just slightly underperformed IDP over an extended period of time several decades.

我認為絕對是。我認為如果你拉長時間來看，若把煤炭業務納入並觀察 IDP 與我們商品業務之間的相關性，兩者的相關性一直相當不錯；在數十年的較長期間內，表現大概僅略低於 IDP。

As I think about 2017 right now and obviously we are in the middle of our planning season and getting a lot of feedback from our customers, if you take out our coal business and also the crude by rail business, which is energy related, if you take that out and we look at the rest of the portfolio, our merchandise and our intermodal business we feel pretty good about what the portfolio can do here after a very tough period of time. And that we have pretty good confidence that based on the economic indicators we are seeing right now, based on the feedback from the customer, that we can return to more normalized growth environment next year in our non-energy businesses.

就我目前對 2017 年的看法而言，顯然我們正處於規劃季中，並從客戶那裡收到大量回饋；如果把我們的煤炭業務以及同樣與能源相關的原油鐵路運輸業務排除，改看投資組合其餘部分，也就是我們的商品與聯運業務，在經歷一段非常艱難的時期之後，我們對這個投資組合在此能做到的表現感到相當樂觀。而且我們相當有信心，基於目前看到的經濟指標、以及客戶的回饋，我們的非能源業務明年可以回到較為正常化的成長環境。

We will have a much better sense of the energy businesses as we get through the fourth quarter. But we are encouraged by what we are seeing in terms of our initial planning assumptions right now.

隨著我們度過第四季，我們會對能源業務有更清楚的掌握。但就目前看到的初步規劃假設而言，我們感到受到鼓舞。

Okay, great. Thank you.

好的，很棒。謝謝。

Cherilyn Radbourne, TD Securities.

TD Securities 的 Cherilyn Radbourne。

Thanks very much and good morning. One of the things that really stood out in the quarter for me was just a year-over-year improvement in labor efficiency just given the volume decline that you were facing. Just wondering if you can give us some practical examples of how you are continuing to generate that labor productivity?

非常感謝，早安。本季對我來說最突出的其中一點，是在你們面臨運量下滑的情況下，勞動效率仍能較去年同期改善。想請問你們是否能提供一些實務例子，說明你們如何持續提升這樣的勞動生產力？

I think one of the better examples would be our longer train initiative so looking at density of trains and being able to operate the same number of cars in fewer chunks. I think we also were utilizing technology to help us as well and being able to automate processes. So those are probably two of the bigger examples I could give you.

我認為較好的例子之一是我們的長列車計畫，也就是提升列車密度，讓同樣數量的車廂能以較少的編組來運行。我想我們也運用科技來協助，並能將流程自動化。所以這大概是我能給的兩個較大的例子。

And then just in terms of for raw orders of magnitude, the 3900 or so positions that we were down year-over-year, the majority of those -- and this is both the efficiency side as well as the volume variable side -- come out of the train and engine mechanical and the operations support side of the business. But engineering, intermodal, G&A are also down year-over-year. We are down across the board in terms of resources on a year-over-year basis. And I think you are going to continue with perhaps the exception of technology as we really go into the highly automated railroad part of our strategy I mean pretty much every group is trying to be as lean as they can.

另外，就大致量級而言，我們年對年減少約 3,900 個職位，其中大多數——這同時包含效率面以及隨運量變動的部分——來自列車與機車的機械維修，以及營運支援端。但工程、聯運、以及 G&A 也都較去年同期下降。就資源而言，我們是全面年對年下降。我認為你們會看到這種趨勢持續，或許科技部門例外，因為我們正真正進入策略中的高度自動化鐵路階段；基本上每個團隊都在努力讓自己盡可能精實。

Great. Thank you. That is all for me.

很好。謝謝。我這邊就這些。

David Vernon, Bernstein.

Bernstein 的 David Vernon。

Good morning, guys. Thanks for taking the question. Congratulations on the productivity here. This has obviously been the big part of the story this year. And as we think about next year and the growth being a little bit more in the scheduled network businesses around merchandise and intermodal, should we be thinking that the incremental fall through on that business could actually be a little bit better than maybe we have seen the incremental margins on average run in the past?

各位早安。謝謝讓我提問。恭喜你們在生產力方面的表現。這顯然是今年故事的重點。那麼當我們思考明年，成長會更多來自於商品與聯運等排程式網路業務時，我們是否應該認為該業務的增量落底（incremental fall-through）其實可能會比過去平均看到的增量利潤率更好一些？

Yes, I think with the expenses that we have taken out in the scheduled network and sort of across the board that obviously sets us up for incremental margins that are healthy and perhaps a little bit better than they have been in the past. So yes is the answer to your question.

是的，我認為在排程式網路以及整體各方面我們已經削減的費用，顯然讓我們具備健康、而且可能比過去更好的增量利潤率條件。所以對你問題的答案是：是。

Excellent. And then maybe just kind of if we think about the business in the next couple of years let's say, if we are kind of flat volume, obviously the productivity has been a big part of it. But how should we be thinking about these sort of organic earnings potential in the business over the next couple of years? Is it possible to continue to pull out cost and grow for a few years or do you think it is going to be a little bit more of kind of holding the line just in kind of a flat growth environment?

很好。接著如果我們想像未來幾年（例如接下來兩三年）的業務狀況，假設運量大致持平，生產力當然是很大的一部分。但我們應該如何看待未來幾年公司這種內生性的獲利潛力？是否有可能在運量持平的環境下，仍能持續幾年拉出成本並帶動成長？還是你認為在平坦成長環境下會比較像是守住現狀？

I think if you are flat on volume and don't have any mix impacts associated with it, it is really going to be what we have been able to do in the past which is we will continue to offset inflation with productivity. We will continue to have value pricing that will fall to the bottom line and the combination of those two things will provide margin expansion on a year-over-year basis in the environment that you mentioned.

我認為如果運量持平，且沒有任何與組合（mix）相關的影響，那就會回到我們過去能做到的事情：我們會持續用生產力來抵銷通膨。我們也會持續進行價值定價（value pricing），其效益會落到最終盈餘；這兩者的結合，會在你提到的環境下帶來年對年的利潤率擴張。

So you actually expect a little bit of sustainable earnings power even if there was even if we were in a flat volume environment?

所以即使在運量持平的環境下，你們其實仍預期會有一些可持續的獲利能力？

Correct.

正確。

Excellent. Thanks very much for your time, guys, and congratulations on a great quarter.

太好了。非常感謝你們的時間，也恭喜本季表現出色。

Scott Schneeberger, Oppenheimer.

Oppenheimer 的 Scott Schneeberger。

Thanks, good morning. Automotive remains an area of strength for you. Just curious how sustainable do you think it is just from an end market perspective? And also you cite new business ramp ups in the slide deck. Just what type of contribution should we think about over the coming quarters there? Thanks.

謝謝，早安。汽車仍是你們的強項領域。想請教從終端市場角度來看，你認為這樣的強勢有多可持續？另外你們在簡報中提到新業務的爬坡（ramp ups）。未來幾季我們應該如何看待那部分的貢獻？謝謝。

Sure. So obviously auto has been at a pretty high level here this year in terms of production. I think the latest estimate that I have seen is by 2017, (inaudible) in terms of production, we are more closely tied to production than the sales. And next year the latest estimate I have is a slight increase to about 18 million vehicles and so that is helpful.

好的。顯然今年汽車在產量方面維持在相當高的水準。我看到的最新估計是到 2017 年，在產量方面（聽不清楚）；我們與產量的連動性比與銷量更高。而我對明年的最新估計是小幅增加到約 1,800 萬輛，因此這是有利的。

We have on boarded some new customers this year that has helped and the contribution of that traffic is very attractive. And it has been great journey for the automotive market overall coming out of recession. But it is probably fair to say that at the moment it looks like we are hitting that high watermark so to speak. We don't see it necessarily coming down significant from that. We think we are going to move more in line with what we are currently seeing. But obviously we are being nimble there as well and to adjust our resource level whether it is up or down and but right now be best estimate is for relatively flat environment for 2017.

我們今年導入了一些新客戶，這對我們有幫助，而這些運量的貢獻非常吸引人。整體汽車市場自衰退復甦以來一路走來也很不容易。但可以說，目前看起來我們大概正觸及所謂的高水位。我們不認為它會從這裡明顯下滑。我們認為它會更貼近我們目前看到的狀況來走。但顯然我們也會保持彈性，無論是上調或下調，都會調整資源水準；而目前我們的最佳估計是 2017 年將是相對持平的環境。

Great, thanks. Cindy, just following up on efficiency savings that we can infer here that you are looking for maybe a base level of 150 as we look out into 2017. As we look at our models and think about kind of the cadence through next year, is there anything special to keep in mind on that front or is it just a progressive build? Thanks.

很好，謝謝。Cindy，我想追問一下效率節省；從這裡我們可以推測，你們在展望 2017 年時，可能目標是一個約 150 的基準水準。當我們建立模型並思考明年的節奏時，這方面有沒有什麼特別需要留意的？還是就是逐步累積？謝謝。

Yes, I don't think there is anything specific that would cause you to want to put different values in for the different quarters. It will be pretty much across the board even.

是的，我不認為有任何特定因素會讓你想在不同季度放入不同的數值。基本上會相當平均地分布在各方面。

Thanks.

謝謝。

Justin Long, Stephens.

Stephens 的 Justin Long。

Thanks and good morning. So my first question was on coal. There are a lot of people that believe industry coal volumes will be up next year. I know you said 4Q weather will be important in terms of how things play out in 2017. But just assuming normal weather patterns, do you have any high-level directional thoughts on how your coal volumes could trend next year?

謝謝，早安。我第一個問題是關於煤炭。很多人認為明年產業煤炭運量會上升。我知道你提到第四季的天氣對 2017 年的走勢很重要。但若假設天氣型態正常，你對明年你們的煤炭運量可能如何變動，有沒有任何高層次的方向性看法？

I guess the only directional comment that I would say is it looks like by the end of this year over a five-year period, we will have lost about $2 billion of coal revenue, and this year alone probably in excess of $0.5 billion. So based on what we are seeing right now, we think next year's decline will be significantly less than that. But beyond that, I really do think I want to stick with what I said earlier which is that we will have an update for you when we do the fourth-quarter earnings call both on a domestic side and on the export side. Because I think we will be in a much better position as we are in the process of gathering our information from the utilities the 40 to 50 utilities that we serve and I think that is the best way to give you guidance is to take the input that we get from them so that it is a lot more accurate than trying to speculate at this point.

我想我唯一想做的方向性評論是，看起來到今年年底、以五年期間來看，我們將流失約20億美元的煤炭營收，而僅今年一年可能就超過5億美元。因此，根據我們目前所看到的情況，我們認為明年的下滑幅度將會明顯小於這個數字。但除此之外，我確實想維持我先前所說的，也就是我們會在第四季財報電話會議時，針對國內與出口兩個面向向各位更新。因為我認為，當我們正在向我們服務的40到50家公用事業公司蒐集資訊時，我們會處於更有利的位置；我也認為提供指引的最佳方式，是採用我們從他們那裡取得的輸入，這樣會比此刻試圖推測要精準得多。

Got it. But you seem to imply with your commentary that directionally you think it will be down next year, you are just not willing at this point to quantify that.

了解。但你在評論中似乎暗示，方向上你認為明年會下滑，只是你目前不願意量化那個幅度。

I think that is probably directional what I'm trying to say. I think that clearly the fact that natural gas prices have come up is helpful. It is still not at $3.50. Inventory levels are still above what they should be and we only have about 1 million tons or so that probably will come out next year in terms of plant closures. So that number is getting a lot smaller. But nevertheless, I think as we look at the crystal ball right now, it is probably a safe place to be.

我想這大概就是我想表達的方向。我認為天然氣價格回升這件事顯然是有幫助的。但仍未到3.50美元。庫存水位仍高於應有水準，而就電廠關閉而言，明年大概只有約100萬噸左右會退出。所以那個數字正在變得小很多。但即便如此，我認為以我們現在的水晶球來看，這大概是個相對安全的判斷。

But as I said, a cold winter, natural gas prices move up above that $3.50 mark and that picture can change very rapidly.

但如我所說，如果冬天很冷、天然氣價格上升並突破3.50美元的門檻，那個情勢可能會非常快速地改變。

Thanks, that is really helpful. One quick follow-up I wanted to ask on pricing. Fredrik, I believe you said you were still getting price in intermodal. But could you say if your intermodal pricing is above inflation or given the truck competition we are seeing, are we seeing below inflation price increases in that intermodal business?

謝謝，這真的很有幫助。我想就定價再追問一個很快的問題。Fredrik，我記得你說你在聯運業務仍能取得價格。但你能否說明，你們的聯運定價是高於通膨，還是考量到我們看到的卡車競爭，你們在聯運業務的漲價幅度其實低於通膨？

We have historically given you the break down into two categories that we have merchandise and intermodal combined and all in. I think we will stay at that level. Pricing is a critical part for us in order to continue to reinvest in the business and especially in intermodal since we put so much of our commercial capital toward intermodal. So being able to have the traffic at contributory levels, continue to push prices is a critical part of that strategy and we are getting positive pricing. Exactly where it is I think we will keep those buckets that we have in place today.

我們過去一向把它拆成兩個類別提供給各位：商品運輸（merchandise）與聯運合併後的整體（all in）。我想我們會維持在那個層級。定價對我們而言是關鍵，才能持續再投資於業務，尤其是聯運，因為我們把大量商業資本投入聯運。因此，能夠讓運量在具貢獻的水準下運行、並持續推動價格，是該策略的關鍵部分，而我們確實取得正向的定價。至於確切在哪個水準，我想我們會維持目前既有的分類方式。

Okay, fair enough. I appreciate the time and congrats on the quarter.

好的，合理。感謝你撥冗，也恭喜本季表現。

Walter Spracklin, RBC Capital Markets.

Walter Spracklin，RBC Capital Markets。

Good morning. This is (inaudible) stepping in for Walter Spracklin. Just circling back, you mentioned how your East Coast volumes are seeing a bit of a bump and we are just wondering how much of that volume bump is coming to the Panama Canal and are you seeing shifting of supply patterns there? And how should we think about that impact moving forward? Thanks so much.

早安。我是（聽不清）代替Walter Spracklin提問。回到你剛才提到的，你們東岸的運量有些回升，我們想了解這個運量回升有多少是來自巴拿馬運河，以及你們是否看到那裡的供應模式正在轉移？我們應該如何看待這個影響在未來的發展？非常感謝。

Sure. So this is Fredrik again. We have seen the shift for an extended period of time that we see more of our international car coming in on the East Coast ports. We have not seen a significant change in the amount of volume coming in since the Panama Canal got widened. What we are seeing that there are some bigger vessels coming in but generally it is not necessarily adding capacity. They are reconfiguring the strengths, there are fewer vessels and we are also seeing some realignment with vessels that before came through the Suez Canal that is now coming through the Panama Canal instead.

當然。我再說一次，我是Fredrik。我們在相當長的一段時間內都看到這樣的轉移，也就是更多國際車（international car）透過東岸港口進來。自從巴拿馬運河拓寬後，我們並未看到進港量出現顯著變化。我們看到的是有一些更大的船舶進港，但整體而言不一定是在增加運能。他們正在重新配置航線，有更少的船舶；我們也看到一些重新調整：以前走蘇伊士運河的船舶，現在改走巴拿馬運河。

But so there is not significant change but the pattern has been there for a long time and we do expect that pattern to continue that we will see more and more of our volume come through the East Coast ports.

不過，整體並沒有顯著變化；只是這個模式已經存在很久了，我們也預期這個模式會持續，也就是我們會看到越來越多的運量經由東岸港口進來。

Okay, got it. Thanks so much. Appreciate it.

好的，了解。非常感謝。感激不盡。

Brian Konigsberg, Vertical Research Partners.

Brian Konigsberg，Vertical Research Partners。

Good morning, guys. Thanks for taking my question. You guys covered quite a bit of ground. Just a question on inflation. It sounds just from the commentary in regards to efficiency you still expect it to remain pretty muted next year in the realm of 1.5%. But just looking at the labor costs, incrementals you are talking about for Q4, that is running around 4% probably includes a little bit extra from the extra week and then just metal prices have been strong maybe rolling over a little bit now.

早安，各位。謝謝回答我的問題。你們已經涵蓋了相當多的面向。我想問一個關於通膨的問題。從你們對效率的評論聽起來，你們仍預期明年通膨會相當溫和，大約在1.5%的範圍。但若看勞動成本，你們談到第四季的增量成本大約在4%左右，可能包含多出一週帶來的一些額外影響；另外金屬價格一直很強，現在可能稍微回落一些。

But is the expectation we are still going to be living in a pretty muted environment into 2017 despite some of the indicators that say it could be a little bit higher?

那麼，儘管有一些指標顯示通膨可能略高，你們的預期仍是2017年會處在相當溫和的環境嗎？

I think on the inflation side, we have been in a little bit of a muted environment here in the last couple of years. When you start thinking about the inflation more broadly as well as GDP and IDP potentially going up, there could be a little bit of pressure on the upside. There is a little bit of a nuance in the second half of the year for labor and fringe inflation that you are picking up on which is wage accruals that came up starting in the middle of the year. So there is that in there rather than a sort of core external inflation run rate that is out there.

我認為在通膨方面，過去幾年我們確實處在相對溫和的環境。當你開始更廣泛地思考通膨，以及GDP與IDP可能上升時，確實可能會有一些上行壓力。你提到的下半年勞動與附加福利（fringe）通膨有一點細微差異，那是從年中開始上升的薪資提列（wage accruals）。所以那部分更多是這個因素，而不是外部核心通膨的運行速度。

But I think what you are hearing from us is regardless of what inflation is, we are going to do our level best to more than offset that with productivity. So I think having something in that 150, 175 range for inflation next year is probably a good starting place and we will offset that with productivity.

但我想你們從我們這裡聽到的是：不論通膨是多少，我們都會盡最大努力用生產力提升來超過並抵銷它。因此，我認為明年通膨落在150到175個基點左右，可能是一個不錯的起點，而我們會用生產力來抵銷。

Great. If I could just follow up with a real quick one. Just on intermodal and the expectation that I guess pricing does firm a little bit later next year as supply and trucking comes down and the LDs go into place, is that assumption -- does it require improving demand for you to see improving pricing in that business or if we ran it just kind of where we stand today, does that make it a bit more challenging?

很好。如果可以，我再追問一個很快的問題。關於聯運，以及你們預期明年稍晚在供給與卡車運力下降、ELD開始實施後，定價會稍微轉強；這個假設——是否需要需求改善，你們才能在該業務看到定價改善？或者如果只是維持在我們今天的狀況，是否會更具挑戰？

It really is a supply and demand picture so if you have ELDs and other regulatory constraints put pressure on the supply side, clearly additional growth in the economy is also helpful and if you remove one or two of those, it is going to prolong the period where we see this excess capacity. So we are obviously following this very closely and hoping for an economy that picks up more than we currently expect, I think would be very helpful both in terms of our volume initiatives but also in terms of pricing.

這確實是一個供需的圖像；因此如果有ELD以及其他法規限制對供給端造成壓力，當然經濟的額外成長也會有所幫助；而如果你移除其中一兩個因素，就會拉長我們看到這種供給過剩的期間。所以我們顯然會非常密切地追蹤這些情況，也希望經濟回升幅度能高於我們目前的預期；我認為這對我們的運量推動，以及對定價，都會非常有幫助。

Understood. Great. Thanks, guys.

了解。很好。謝謝，各位。

Thank you. We will see you all next month, next quarter. Thank you.

謝謝。我們下個月、下個季度再見。謝謝。

This concludes today's teleconference. Thank you for your participation in today's call. You may disconnect your lines.

今天的電話會議到此結束。感謝各位參與今天的電話會議。您可以掛斷電話線。