Norfolk Southern Corp (NSC) 2023 Q4 法說會逐字稿

Greetings, and welcome to the Norfolk Southern Corporation Fourth Quarter 2023 Earnings Call.

您好，歡迎參加諾福克南方公司 2023 年第四季財報電話會議。

(Operator Instructions) As a reminder, this conference is being recorded.

（操作員指示）謹此提醒，本次會議正在錄製中。

It's now my pleasure to introduce Luke Nichols, Senior Director, Investor Relations. Thank you. Mr. Nichols, you may begin.

現在我很高興向大家介紹投資者關係高級總監 Luke Nichols。謝謝。尼科爾斯先生，您可以開始了。

Thank you, and good morning, everyone. Please note that during today's call, we will make certain forward-looking statements within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These statements relate to future events or future performance of Norfolk Southern Corporation, which are subject to risks and uncertainties and may differ materially from actual results. Please refer to our annual and quarterly reports filed with the SEC for a full disclosure of those risks and uncertainties we view as the most important.

謝謝大家，大家早安。請注意，在今天的電話會議中，我們將根據1995 年《私人證券訴訟改革法案》的安全港條款做出某些前瞻性陳述。這些陳述涉及諾福克南方公司的未來事件或未來業績，這些陳述受到風險和不確定性，可能與實際結果有重大差異。請參閱我們向美國證券交易委員會提交的年度和季度報告，以全面揭露我們認為最重要的風險和不確定性。

Our presentation slides are available at norfolksouthern.com, in the Investors section, along with a reconciliation of any non-GAAP measures used today to comparable GAAP measures.

我們的簡報投影片可在norfolksouthern.com 的「投資者」部分中找到，以及當今使用的任何非公認會計準則衡量標準與可比較公認會計準則衡量標準的調節表。

Turning to Slide 3. It's now my pleasure to introduce Norfolk Southern's President and Chief Executive Officer, Alan Shaw.

轉向幻燈片 3。現在我很高興介紹諾福克南方航空的總裁兼首席執行官艾倫·肖 (Alan Shaw)。

Good morning, everyone, and thank you for joining Norfolk Southern's Fourth Quarter 2023 Earnings Call. Here with me today are Mark George, our Chief Financial Officer; Paul Duncan, our Chief Operating Officer; and Ed Elkins, our Chief Marketing Officer.

大家早安，感謝您參加諾福克南方航空 2023 年第四季財報電話會議。今天和我在一起的是我們的財務長馬克喬治 (Mark George)； Paul Duncan，我們的營運長；以及我們的首席行銷長 Ed Elkins。

Last year was historically challenging with a major derailment to start off the year, followed by network disruptions, and compounded by a stubbornly weak freight market. The Eastern Ohio incident tested our resolve. I'm proud that our team responded decisively and responsibly to protect this great franchise and our shareholders, and to address the community's concerns.

去年是歷史性的挑戰，年初發生了一次重大脫軌事件，隨後網路中斷，加上貨運市場持續疲軟，雪上加霜。俄亥俄州東部事件考驗了我們的決心。我感到自豪的是，我們的團隊果斷、負責任地做出了反應，以保護這個偉大的特許經營權和我們的股東，並解決社區的擔憂。

With an unwavering commitment, we have strengthened our safety and service. We have kept and will continue to keep our promises to make things right in Ohio, to improve our service to our customers, and to make a safe railroad even safer. A crisis allows you to accelerate change and we acted. This includes a number of positive changes to how we design the network and assemble trains with measurable results. As we show on Slide 4, our improvement in safety is already being highlighted by a dramatic 42% reduction in our mainline accident rate in 2023.

憑藉著堅定不移的承諾，我們加強了安全和服務。我們已經並將繼續信守我們的承諾，使俄亥俄州的事情變得正確，改善我們對客戶的服務，並使安全的鐵路更加安全。危機可以讓你加速變革，我們採取了行動。這包括我們設計網路和組裝列車的方式發生了一些積極的變化，並取得了可衡量的結果。如投影片 4 所示，我們在安全方面的改進已經透過 2023 年幹線事故率大幅下降 42% 來體現。

2023 was also historically important for Norfolk Southern because we began to implement and advance our new strategy to position our business for sustainable growth and success. The intermodal service composite chart on the right side of Slide 4 tells an important story that speaks to the clear gains we have made in both resiliency and service following significant strides in service in 2022. With our investments in resiliency through leadership plan and resources, we demonstrated the ability to execute our strategy to run a safer railroad that delivers a compelling service product to our customers and handles increased business, a balanced approach to safely delivering service, productivity and growth.

2023 年對於諾福克南方航空來說也具有重要的歷史意義，因為我們開始實施和推進新策略，以使我們的業務實現永續成長和成功。幻燈片4 右側的多式聯運服務綜合圖表講述了一個重要的故事，說明了繼2022 年服務取得重大進展之後，我們在彈性和服務方面取得了明顯的進步。透過我們透過領導計畫和資源對彈性進行投資，我們展示了執行我們的策略的能力，即運營更安全的鐵路，為我們的客戶提供引人注目的服務產品並處理增加的業務，這是安全提供服務、生產力和成長的平衡方法。

We overcame multiple significant network disruptions in 2023 and exited the year with the best intermodal service we have delivered in over 3 years, all while intermodal volume grew 5%. Entering 2024 with a safer and more fluid network that is attracting growth, we have the platform to narrow our focus to specific areas to drive increased productivity. And we are building positive momentum by executing on our strategic vision. Part of that strategic vision is our commitment to industry competitive margins, and we are determined to deliver on that promise just as we have delivered on promises on service and safety as volumes grew.

2023 年，我們克服了許多重大的網路中斷，並以 3 年來提供的最佳多式聯運服務結束了這一年，同時多式聯運量成長了 5%。進入 2024 年，網路將更加安全、更加流暢，從而吸引成長，我們擁有平台將重點縮小到特定領域，以提高生產力。我們正在透過執行我們的策略願景來建立積極的勢頭。這個策略願景的一部分是我們對產業競爭性利潤的承諾，我們決心兌現這一承諾，就像我們隨著產量的成長兌現對服務和安全的承諾一樣。

We will leverage our PSR operating plan with our current resource base to meaningfully improve velocity and resilience within our merchandise network, which accounts for 2/3 of our train starts. As we achieve a high degree of compliance to the plan and merchandise, we will reduce variability, complexity and cost. We are driving that forward now with the results already seen in December and January. It will drive asset velocity that will lead to productivity gains and cost savings. And in 2024, we are targeting a double-digit percentage improvement in terminal dwell, which is a good barometer of the health of our, and fluidity, of our merchandise network.

我們將利用我們的 PSR 營運計劃和我們目前的資源基礎，有意義地提高我們的商品網路的速度和彈性，該網路占我們列車開動量的 2/3。當我們實現對計劃和產品的高度合規性時，我們將減少可變性、複雜性和成本。我們現在正在推動這一進程，並已在 12 月和 1 月看到結果。它將推動資產週轉速度，從而提高生產力並節省成本。到 2024 年，我們的目標是終端停留時間實現兩位數百分比的改善，這是我們商品網路健康狀況和流動性的良好晴雨表。

Paul will go into more detail about how we are planning to build on our success in intermodal, deploying changes to accelerate our merchandise network, which I've noted will be a major source of productivity for Norfolk Southern in 2024 and beyond. To further describe what we are doing to improve profitability and drive smart growth in 2024, Ed will talk about how his team is winning business and pushing hard to negotiate price in excess of inflation.

Paul 將更詳細地介紹我們計劃如何在多式聯運方面取得成功，部署變革以加速我們的商品網絡，我已經指出，這將是諾福克南方航空 2024 年及以後生產力的主要來源。為了進一步描述我們為提高獲利能力和推動 2024 年智慧成長所做的努力，Ed 將談論他的團隊如何贏得業務並努力推動價格談判超過通膨。

Importantly, we are streamlining our cost structure and eliminating inefficiencies. We invested in 2023 to enhance safety and service. We will see the benefits of this in our cost structure in 2024. We will take actions this year to reduce costs in other areas. This includes a program to reduce management headcount by roughly 7% to help offset increases in critical operating areas.

重要的是，我們正在精簡成本結構並消除效率低下的情況。我們在 2023 年進行了投資，以增強安全性和服務。到 2024 年，我們將在我們的成本結構中看到這一點的好處。今年我們將採取行動，降低其他領域的成本。其中包括一項將管理人員人數減少約 7% 的計劃，以幫助抵消關鍵營運領域的成長。

Our groundbreaking transformation will take time. We recognize the necessary investments in resiliency and service had temporarily increased our cost structure, particularly visible during the trough in this freight cycle.

我們的突破性轉型需要時間。我們認識到，對彈性和服務的必要投資暫時增加了我們的成本結構，在貨運週期的低谷期間尤其明顯。

On Slide 5, you'll see we laid out the scenario where during a down cycle we may modestly underperform in order to be coiled to secure volume and incremental margin when the freight cycle recovers.

在投影片 5 上，您會看到我們列出了這樣一種情況：在下行週期中，我們的表現可能會略有下降，以便在貨運週期恢復時確保銷量和增量利潤。

While we didn't expect 2023 to be a continuation of a soft rate market, coupled with numerous disruptions, we are optimistic that recovery is on the horizon and our investments will yield returns. We will deliver near-term margin improvement as we implement our strategic vision: a balance between safe service, productivity and smart growth. We are on the path to achieve that balance.

雖然我們預期 2023 年不會延續軟利率市場，且會出現許多幹擾，但我們樂觀地認為復甦即將到來，我們的投資將產生回報。在實施我們的策略願景時，我們將實現近期利潤率的提高：安全服務、生產力和智慧成長之間的平衡。我們正在努力實現這種平衡。

In the aftermath of the derailment and network disruptions, we have improved safety and service in a responsible manner and are in securing new business with a stabilized network and a high degree of compliance to the plan. We will continue to iterate the plan, reducing complexity and enhancing executability and balance. All of this will unlock productivity and fluidity, which, in line with our strategy, will allow us to attract more volume at accretive incremental margins and deliver top-tier revenue and earnings growth at industry competitive margins.

在脫軌和網路中斷之後，我們以負責任的方式改善了安全和服務，並透過穩定的網路和高度遵守計劃來確保新業務。我們將繼續迭代該計劃，降低複雜性並增強可執行性和平衡性。所有這些都將釋放生產力和流動性，這符合我們的策略，這將使我們能夠以增量利潤吸引更多銷量，並以具有行業競爭力的利潤實現頂級收入和盈利增長。

With strong franchise advantages that will serve us well as we move through this economic cycle, we are poised for a bright future as we balance safe service, productivity and growth.

憑藉強大的特許經營優勢，在我們度過這個經濟週期時，我們將受益匪淺，在安全服務、生產力和成長之間取得平衡，我們將為光明的未來做好準備。

I'll turn it over to Mark and the rest of the team, who will add some context around the timing and magnitude of our planned improvements in performance and profitability.

我會將其交給馬克和團隊的其他成員，他們將添加一些有關我們計劃的績效和盈利能力改進的時間和幅度的背景資訊。

Thank you, Alan, and good morning, everyone. I'll start on Slide 7 with an update on our costs related to the Eastern Ohio derailment. During the fourth quarter, we reached a significant milestone with the bulk of the soil remediation being completed. It's an encouraging achievement. However, as you'll note, we incurred $137 million charge in the quarter, which related to an extension of the time line for ongoing testing as well as additional work that will be completed in nearby streams. There was another $89 million incurred in legal costs and other fees. But of note, we received $76 million of insurance recoveries, bringing the total recoveries in 2023 to just over $100 million. From a cash perspective, the net outflow in 2023 was $652 million after the insurance recoveries.

謝謝艾倫，大家早安。我將從幻燈片 7 開始，介紹與俄亥俄州東部脫軌相關的成本的最新情況。第四季度，我們實現了一個重要的里程碑，大部分土壤修復工作已完成。這是一項令人鼓舞的成就。然而，正如您所注意到的，我們在本季度產生了 1.37 億美元的費用，這與正在進行的測試的時間線的延長以及將在附近的流程中完成的額外工作有關。另外還有 8,900 萬美元的法律費用和其他費用。但值得注意的是，我們收到了 7,600 萬美元的保險賠款，使 2023 年的賠款總額略高於 1 億美元。從現金角度來看，保險理賠後2023年的淨流出量為6.52億美元。

While we're pleased with our remediation accomplishments, we currently expect ongoing monitoring efforts and cleanup efforts will continue through 2024. There will be additional costs in the future related to legal settlements and fees, although the amounts and timing cannot currently be estimated.

雖然我們對補救成果感到滿意，但我們目前預計持續的監測工作和清理工作將持續到 2024 年。未來還會有與法律和解和費用相關的額外費用，但目前無法估計金額和時間。

Moving to Slide 8, where we illustrate the impact of these fourth quarter results on our results. Our GAAP results are in the first row. While on row 2 we isolate the accounting to our Q4 financials related to the incident. At the bottom of the chart, you'll note the comparisons of the adjusted results to prior year. I'll be talking about our adjusted results for the remainder of the discussion.

轉到投影片 8，我們在其中說明了第四季度業績對我們業績的影響。我們的 GAAP 結果位於第一行。在第 2 行，我們將會計與與該事件相關的第四季財務資料隔離。在圖表底部，您會注意到調整後的結果與前一年的比較。我將在餘下的討論中討論我們的調整結果。

Revenues were down nearly 5%, while adjusted operating expense was 3% higher. The adjusted operating ratio for Q4 2023 was 68.8%, which represented a year-over-year deterioration but notably was up 30 basis point sequential improvement from our third quarter performance. The sequential improvement is encouraging but we fell short of our expectations as service-related costs did not come down as we anticipated.

收入下降近 5%，而調整後的營運費用則上漲 3%。 2023 年第四季調整後的營運率為 68.8%，年比有所惡化，但與第三季的業績相比，環比提高了 30 個基點。連續的改善令人鼓舞，但我們沒有達到我們的預期，因為服務相關成本並沒有像我們預期的那樣下降。

While our recovery efforts related to the IT outages in late Q3 restored service quickly for our customers and allowed us to handle more business, it cost more money in the form of crew-related expenses that persisted well into the fourth quarter. On an adjusted basis, operating income was down 19% year-over-year. Net income and EPS were down 19% and 17%, respectively.

雖然我們與第三季末IT 中斷相關的恢復工作迅速為客戶恢復了服務，並使我們能夠處理更多業務，但以與船員相關的費用形式花費了更多資金，這種費用一直持續到第第四季。調整後的營業收入較去年同期下降19%。淨利潤和每股收益分別下降 19% 和 17%。

Turning now to Slide 9. Adjusted operating expense for the quarter was up $59 million. The increase, excluding fuel decline, was up $123 million. The largest drivers of the increase were employment growth as well as inflation across all categories. In comp and ben, looking to '24, we plan to keep overall head count levels flat versus the year-end '23 exit rate, with some additional mechanical craft hiring to be offset by upcoming reductions in the nonagreement category that Alan discussed.

現在轉向幻燈片 9。該季度調整後的營運費用增加了 5900 萬美元。不包括燃油下降在內，這一增幅增加了 1.23 億美元。成長的最大驅動因素是就業成長以及所有類別的通貨膨脹。在比較和本方面，展望“24”，我們計劃保持總體人員數量水平與“23”年底的退出率持平，一些額外的機械工藝招聘將被艾倫討論的非協議類別即將減少所抵消。

Purchased services was up due to higher costs associated with technology spend as well as increased mechanical services, including repairs around our auto fleet as we prepare for growth opportunities in 2024. The increase in rents was driven by short-term locomotive resources and increased car supply for our auto fleet. We expect quarterly rents in 2024 to remain slightly above these fourth quarter levels due to more adverse TTX equity costs and volume metric related increases, partially offset by benefits coming from improved velocity.

由於技術支出相關成本上升以及機械服務增加（包括我們為 2024 年的成長機會做準備而對車隊進行的維修），購買的服務有所增加。租金上漲是由短期機車資源和汽車供應增加推動的為我們的車隊。我們預計 2024 年的季度租金將略高於第四季度的水平，因為 TTX 股權成本和交易量指標相關的增長更為不利，但部分被速度提高帶來的好處所抵消。

The increase in materials relates to locomotive and freight car repairs. Claims were lower year-over-year. Recall that in Q4 2022, we had a large adverse adjustment. The other component is unfavorable, driven mainly by fewer real estate gains.

材料的增加與機車和貨車維修有關。索賠額較去年同期下降。回想一下，2022 年第四季度，我們進行了一次較大的不利調整。另一個因素則不利，主要是房地產收益減少所致。

Moving now to Slide 10. Last quarter, we introduced this slide to help investors think about our service costs and resiliency investments, which are 2 components of our current cost structure. On the left side, we see costs that should not be part of our cost structure and have grown out of service that has not met planned levels, mainly related to recrews and overtime. These costs did not step down as expected in Q4 due to the crew-related costs we incurred to accelerate service recovery for our customers after the IT outages. So while service has been at strong levels exiting the year, Q1 costs will remain somewhat elevated in part from the cold weather we are seeing here in January. Overall service costs should meaningfully unwind in Q2.

現在轉向投影片 10。上個季度，我們推出這張投影片是為了幫助投資人思考我們的服務成本和彈性投資，這是我們目前成本結構的兩個組成部分。在左側，我們看到不應該成為我們成本結構一部分的成本，並且已經超出了未達到計劃水平的服務，主要與船員和加班有關。這些成本在第四季度並未如預期下降，因為我們在 IT 中斷後為加速客戶服務恢復而產生了與船員相關的成本。因此，儘管今年以來服務一直處於強勁水平，但第一季的成本仍將有所上升，部分原因是我們在一月份看到的寒冷天氣。第二季整體服務成本應該會顯著下降。

On the right hand, we show costs tied to our investments in resiliency, mainly related to additional T&E crews that we have added in locations where we were understaffed as we position Norfolk Southern to realize outsized growth in revenue and margin in a growing volume environment. Our total T&E headcount is now at an appropriate level that will allow us to absorb volume growth in '24 and beyond. There will be some additional hiring in mechanical crafts that will be offset by reductions in non-agreement positions. The additional craft hires mean that resiliency costs will settle in roughly in the $55 million per quarter range in 2024. Adding those resources will drive benefits over time of being an even safer and higher-velocity operation.

在右側，我們顯示了與我們的彈性投資相關的成本，主要與我們在人手不足的地方增加了額外的差旅和娛樂人員有關，因為我們使諾福克南方航空在不斷增長的銷售環境中實現收入和利潤的大幅成長。我們的 T&E 總人數目前處於適當水平，這將使我們能夠吸收 24 年及以後的銷售成長。機械工藝方面將會有一些額外的招聘，這將被非協議職位的減少所抵消。額外的工藝僱用意味著到 2024 年，彈性成本將穩定在每季約 5,500 萬美元的範圍內。隨著時間的推移，增加這些資源將帶來更安全、更高速營運的效益。

Moving to Slide 11 and results below operating income. Other income of $38 million was up $4 million in the quarter, driven by higher interest income on the extra cash we are carrying ahead of the CSR closing. The adjusted effective tax rate was 19.2%, due to a rate adjustment on our deferred state income taxes and tax-free gains on favorable company-owned life insurance. For 2024, we expect our tax rate to be in the usual 23% to 24% range.

轉到投影片 11，結果低於營業收入。本季其他收入為 3,800 萬美元，增加了 400 萬美元，這是由於我們在 CSR 交割之前持有的額外現金利息收入增加。調整後的有效稅率為 19.2%，這是由於我們的遞延國家所得稅和優惠的公司自有人壽保險的免稅收益進行了稅率調整。 2024 年，我們預計稅率將在通常的 23% 至 24% 範圍內。

Turning to Slide 12 and recapping our full year results. We started the year planning for modest top line growth that would afford a level of expense growth to help drive our strategic track toward resiliency. The disruptive events of the year and an adverse macro environment upended this. Revenue declined 5%, which was meaningfully affected by about 6 points of pressure from lower fuel surcharge revenue and a sharp year-over-year decline in storage fees. At the same time, OpEx rose 5%, fueled by inflation and investments in our business. As a result, operating income fell 18%, with the operating ratio rising to 67.4%. Favorable below the line items and benefits from share repurchases held the EPS decline to 15%.

轉向幻燈片 12 並回顧我們的全年業績。我們從今年開始就計劃實現適度的收入成長，這將能夠承受一定程度的費用成長，以幫助推動我們的策略軌道走向彈性。今年的顛覆性事件和不利的宏觀環境顛覆了這一點。收入下降 5%，主要受到燃油附加費收入下降約 6 個百分點以及倉儲費較去年同期大幅下降的壓力影響。同時，在通貨膨脹和業務投資的推動下，營運支出成長了 5%。營業收入因此下降18%，營業比率上升至67.4%。有利的線下專案和股票回購帶來的好處使每股盈餘下降了 15%。

In 2023, free cash flow was $1.4 billion lower than the prior year, representing the impact of the $650 million derailment-related outlays as well as the lower operating income, coupled with higher CapEx. Shareholder distributions in '23 were $1.8 billion, with 2/3 being driven by our rock-solid dividend and the remainder from share repurchase activity.

2023 年，自由現金流比前一年減少 14 億美元，這是由於 6.5 億美元的脫軌相關支出以及營業收入下降和資本支出增加的影響。 2023 年的股東分配為 18 億美元，其中 2/3 來自我們堅如磐石的股息，其餘則來自股票回購活動。

I'll mention that we did issue debt in November and built up our cash balance to $1.6 billion at year-end as we prepare to fund the strategic CSR purchase that is scheduled to close on March 15. As a result, we will see higher interest expense in 2024, and we will temporarily suspend share repurchases while we absorb the asset and bring our credit metrics back into our target range.

我要提到的是，我們確實在11 月發行了債務，並在年底將現金餘額增加到了16 億美元，因為我們準備為定於3 月15 日完成的戰略性CSR 收購提供資金。因此，我們將看到更高的價格2024 年利息支出，我們將暫時停止股票回購，同時吸收資產並將信用指標恢復到目標範圍。

It's important to remember that CSR is a highly strategic, critical artery in our network, for which we had a rare window to secure and guarantee control of the asset forever. This also enables us to control longer-term costs that could have begun to escalate sharply with the upcoming lease renewal.

重要的是要記住，企業社會責任是我們網路中的一條高度策略性的關鍵動脈，為此我們有一個難得的窗口來確保和保證對資產的永久控制。這也使我們能夠控制長期成本，這些成本可能隨著即將到來的續租而開始急劇上升。

I'll now hand over to Paul, who can provide an update on our operations.

我現在將交給保羅，他可以提供我們運營的最新資訊。

Thank you, Mark, and good morning. Turning to Slide 15 to begin our operations discussion with safety. We made progress in enhancing safety in 2023. We finished the year with our second-best injury rate in 8 years but we are striving for better. We enhanced our conductor training program and continue to leverage our partnership with Atkins Nuclear, a foremost expert in safety across all industries. We also closed 2023 with a 42% reduction in our mainline accident rate and the fewest mainline accidents since 1999. Thank you to all of our craft colleagues and leaders for enhancing safety at Norfolk Southern this last year.

謝謝你，馬克，早安。轉向投影片 15，開始我們的安全營運討論。 2023 年，我們在加強安全方面取得了進展。我們以 8 年來第二高的受傷率結束了這一年，但我們正在努力爭取更好。我們加強了指揮培訓計劃，並繼續利用與各行業最重要的安全專家阿特金斯核電的合作關係。 2023 年結束時，我們的幹線事故率下降了 42%，是自 1999 年以來幹線事故最少的。感謝我們所有的工藝同事和領導者去年加強了諾福克南方航空的安全性。

While these are very noteworthy accomplishments, we must become even safer. When the major incident in Eastern Ohio happened in early 2023, we were already in the process of reviewing and adjusting our train makeup rules and it was a high priority of mine. We ended up accelerating network by a lot. What we produced was an even better product than we already had, which helped us make such progress in mainline accidents, and we are striving to become even safer.

雖然這些都是非常值得注意的成就，但我們必須變得更安全。當 2023 年初俄亥俄州東部發生重大事件時，我們已經在審查和調整我們的列車組成規則，這是我的首要任務。我們最終大大加速了網路。我們生產的產品比我們現有的產品更好，這幫助我們在幹線事故中取得瞭如此大的進步，而且我們正在努力變得更加安全。

This is the platform for which we can now lever up our train plan to deliver productivity and growth. Though the change in our operating rules was implemented on an accelerated time line and caused network disruption, we know it was the right move for the long term and we kept our promises to restore fluidity and service levels in the second half of 2023. The future of our operation is very bright and I am proud of the work we did in 2023 on this front to keep our promises.

這是我們現在可以利用我們的列車計劃來實現生產力和成長的平台。儘管我們的營運規則變更是在加速的時間內實施的，並導致了網路中斷，但我們知道從長遠來看這是正確的舉措，並且我們信守了在2023 年下半年恢復流動性和服務水平的承諾。我們的營運非常光明，我對 2023 年我們在這方面為兌現承諾所做的工作感到自豪。

Moving to Slide 16 for further discussion on service levels. We took a modest step backwards to begin the quarter related to the system outages that we experienced but quickly regain footing and continued our glide path of improvement in November and December. It is important to note that we deliberately chose to deploy additional resources so that we could balance restoring fluidity while delivering peak volume.

請轉至投影片 16，進一步討論服務等級。由於我們經歷過的系統中斷，我們在本季度開始時稍微倒退了一步，但很快就重新站穩腳跟，並在 11 月和 12 月繼續我們的改進之路。值得注意的是，我們特意選擇部署額外的資源，以便我們能夠在恢復流動性和提供尖峰流量之間取得平衡。

We were successful on that front. We delivered a very strong service for our intermodal customers during peak season and pushed overall volumes to their highest levels in over 2.5 years as you will hear more about from Ed. But as you heard from Mark, it did result in higher-than-planned service recovery costs in the quarter. We remain sharply focused on reducing those and have actively been unwinding more T&E crew expense in recent weeks in areas such as temporary deployments, overtime, recrews and other crew-related expenses. This has included reducing our intensity of GO Team members deployed on the network. Now that we have made this next step function improvement in intermodal service, we expect to remain there as we transition to leveraging our resources to drive greater productivity and growth.

我們在這方面取得了成功。我們在旺季為多式聯運客戶提供了非常強大的服務，並將總貨運量推至 2.5 年來的最高水平，您將從 Ed 那裡聽到更多。但正如您從馬克那裡聽到的那樣，這確實導致本季的服務恢復成本高於計劃。我們仍然高度重視減少這些費用，並在最近幾週積極削減更多的 T&E 船員費用，包括臨時部署、加班、船員和其他船員相關費用等領域。這包括減少我們在網路上部署的 GO 團隊成員的強度。現在我們已經在多式聯運服務方面進行了下一步的功能改進，我們希望在過渡到利用我們的資源來推動更高的生產力和成長時繼續保持這一水平。

Turning to Slide 17 for a discussion on productivity. We've improved 4% sequentially within workforce productivity and expect an improving glide path to continue. We are driving this in 4 ways: One, by improving fluidity; two, by maintaining strict discipline and accountabilities to plan compliance in our operations; three, through discrete productivity initiatives that we'll discuss in a moment; and finally, through converting trainees to productive employees.

請參閱投影片 17，討論生產力。我們的員工生產力連續提高了 4%，並預計將繼續保持良好的下滑趨勢。我們透過四種方式推動這個目標：一是提高流動性；第二，保持嚴格的紀律和責任，以規劃我們的營運合規性；第三，透過我們稍後將討論的離散生產力計劃；最後，將實習生轉變為高效率的員工。

As promised last quarter, we ended the year with 600 conductor trainees. We are now confident with the overall size of our T&E workforce to efficiently serve the growth that is on the horizon. On the locomotive front, referencing our service commentary, miles per day remained lower as we kept additional power and service to jump start the network with peak volume. This is an area that will benefit significantly from further improvements in velocity as faster train speeds allow us to drive our locomotives in the terminals on time and send them back out on their scheduled connections. And lastly, fuel efficiency finished flat despite the additional locomotives online, thanks to our initiatives. And this is an area we are intensely focused on improving in 2024.

正如上季度所承諾的那樣，我們在年底擁有了 600 名指揮實習生。現在，我們對我們的差旅與娛樂員工隊伍的整體規模充滿信心，能夠有效地服務即將到來的成長。在機車方面，參考我們的服務評論，每天的行駛里程仍然較低，因為我們保留了額外的電力和服務以在峰值流量下啟動網路。這一領域將從速度的進一步提高中受益匪淺，因為更快的火車速度使我們能夠準時在航站樓駕駛我們的機車，並將它們按預定的連接送回。最後，儘管有更多機車上線，但由於我們的舉措，燃油效率仍持平。這是我們在 2024 年重點改進的一個領域。

Moving to Slide 18. The next phase of our operational improvement will be marked by enhancing the velocity and resilience within our merchandise network. Recall that our TOP|SPG operating plan, which we launched in 2022, brought further PSR principles to our intermodal network, driving enhancements to container velocity and resilience with intermodal. That successful evolution enabled intermodal service to remain strong throughout 2023, particularly in Q4 where we delivered the best intermodal service in over 3 years while delivering on peak season.

轉到投影片 18。我們營運改善的下一階段將以提高商品網路的速度和彈性為標誌。回想一下，我們在 2022 年推出的 TOP|SPG 營運計畫為我們的多式聯運網路帶來了進一步的 PSR 原則，推動了貨櫃速度和多式聯運彈性的提高。這一成功的演變使多式聯運服務在 2023 年全年保持強勁，特別是在第四季度，我們在旺季提供了 3 年來最好的多式聯運服務。

Now we are building on that success with further enhancements in our merchandise network. First, we are improving our execution and discipline to run with a higher level of plan compliance. We're tying together the improvements we've made around our operational strategy leadership accountabilities and resource allocation by sweating our assets further and strict execution to the plan.

現在，我們正在這成功的基礎上進一步增強我們的商品網絡。首先，我們正在提高執行力和紀律，以更高水準的計畫合規性運作。我們透過進一步利用我們的資產和嚴格執行計劃，將我們圍繞營運策略、領導責任和資源分配所做的改進結合在一起。

Next, we are leveraging precision train building processes embedded into our terminals to optimize connections and depart trains on time. We're already seeing the benefits that arise from success in driving scheduled network velocity. Our success will be demonstrated by making sustained improvement in terminal dwell, where, as Alan mentioned in his opening remarks, we expect to drive a low double-digit percentage improvement in 2024 versus 2023. Investors can also track our progress in the AAR train speed, particularly the subset of manifest train speed, which has an outsized impact on our cost structure as well as merchandise trip plan compliance and car velocity, the outcomes of improving speed, dwell and disciplined execution of plan. Of course, there is always week-to-week noise in these measures, so we would look for improvements in trends on a rolling 12-week basis.

接下來，我們利用嵌入到航站樓的精密列車建造流程來優化連接並準時發車。我們已經看到了成功提高預定網路速度所帶來的好處。我們的成功將透過終端停留時間的持續改善來證明，正如艾倫在開場白中提到的那樣，我們預計2024 年將比2023 年實現兩位數的低百分比改善。投資者還可以跟踪我們在AAR列車速度方面的進展，特別是列車明顯速度的子集，它對我們的成本結構以及商品行程計劃合規性和汽車速度、提高速度、停留時間和嚴格執行計劃的結果產生巨大影響。當然，這些指標中總是存在每週的噪音，因此我們會在 12 週滾動的基礎上尋找趨勢的改善。

On Slide 19, I'd like to provide more detail on how sustaining these velocity improvements will drive down our cost structure. First, we will see reductions in various buckets of T&E related expense, and that will also help to lower our headcount intensity. Next, as we spin up the flywheel, we'll get cars moving faster, a critical element to scheduled rarity and overall productivity. Having our yards in mainlines more fluid will indicate that cars are flowing unimpeded through the network. This will drive a capacity and productivity dividend within our fleets, in our yards and on our main lines. That, in turn, will allow us to bring on growth at low incremental cost, lifting the overall workforce and locomotive productivity and achieving service resilience that will allow us to take further share from truck. Driving these benefits into our operation by improving the velocity and resilience of the merchandise network will be a key aspect of delivering progress in 2024.

在投影片 19 上，我想提供更多有關維持這些速度改進將如何降低我們的成本結構的詳細資訊。首先，我們將看到各種差旅費相關費用的減少，這也將有助於降低我們的員工強度。接下來，當我們旋轉飛輪時，我們將使汽車移動得更快，這是預定稀有度和整體生產力的關鍵因素。讓我們的主幹線車場更加流暢，將表明汽車可以暢通無阻地通過網路。這將推動我們的船隊、船廠和幹線的產能和生產力紅利。反過來，這將使我們能夠以較低的增量成本實現成長，提高整體勞動力和機車生產率，並實現服務彈性，使我們能夠從卡車中獲得更多份額。透過提高商品網路的速度和彈性，將這些優勢融入我們的營運中，將是 2024 年取得進展的關鍵方面。

Thank you, and I'll now turn the call over to Ed.

謝謝您，我現在將把電話轉給艾德。

Thanks, Paul, and good morning to everybody on the call. Beginning on Slide 21, let's cover our commercial results for the fourth quarter. Overall volume improved 3%, led by growth in intermodal and our automotive markets. Now despite volume growth, total revenue and revenue per unit declined for the quarter due to lower revenue from fuel surcharge and intermodal storage and fees, along with negative shipment mix within the portfolio continuing from last quarter as well as headwinds from a weak truck price environment due to the persistent overabundance of capacity.

謝謝保羅，祝所有參加電話會議的人早安。從投影片 21 開始，我們來介紹一下第四季的商業表現。在多式聯運和汽車市場成長的帶動下，總銷量成長了 3%。目前，儘管銷量成長，但由於燃油附加費和多式聯運倉儲和費用收入下降，加上上季度持續的投資組合中的負發貨組合以及卡車價格環境疲軟帶來的不利因素，本季總收入和單位收入有所下降由於產能持續過剩。

Looking at merchandise, volume was flat compared to the prior period and revenue was challenged by lower revenue from fuel surcharge compared to that prior period. RPU less fuel increased 1% as price gains more than offset the impacts from negative mix. This increase set a new quarterly record for Norfolk Southern and marks the 34th of the last 35 consecutive quarters of year-over-year growth in merchandise RPU less fuel. We're committed to driving value through price and this commitment is demonstrated through quarterly record set in our automotive market for revenue, revenue less fuel, revenue per unit, and revenue per unit less fuel.

從商品來看，銷售量與上期相比持平，收入受到燃油附加費收入較上期下降的挑戰。 RPU 減去燃料後增加了 1%，因為價格上漲足以抵消負面組合的影響。這一增長為諾福克南方航空創造了新的季度記錄，也是過去 35 個季度商品 RPU（扣除燃料）同比增長的第 34 個季度。我們致力於透過價格推動價值，這項承諾透過汽車市場收入、減去燃料的收入、每單位收入和每單位減去燃料的收入創下的季度記錄來證明。

Let's move to intermodal. Volume in the quarter increased 5% year-over-year, with gains in both our domestic and international lines of business. Revenue for Intermodal was down 13% year-over-year, primarily driven by significantly lower revenue from storage and fees in the prior period. Also lower fuel prices and an excess supply of available trucks as well as negative mix within our international business impacted revenue per unit negatively. Excluding the impacts of fuel and elevated storage and fees, which are related to supply chain congestion, Intermodal RPU declined 1% in the quarter. We're confident our domestic franchise is a coiled spring, positioned to yield strong incremental value as the truck market recovers.

讓我們轉向聯運。本季銷量較去年同期成長 5%，國內和國際業務均有所成長。多式聯運的收入年減 13%，主要是由於上一時期倉儲和費用收入大幅下降。此外，較低的燃油價格和可用卡車供應過剩以及我們國際業務中的負面組合對單位收入產生了負面影響。排除與供應鏈擁塞相關的燃料以及倉儲和費用上漲的影響，多式聯運 RPU 本季下降了 1%。我們相信，我們的國內特許經營權是一個螺旋彈簧，隨著卡車市場的復甦，將產生強勁的增量價值。

Turning to coal. Overall volume increased slightly, with strong demand for export more than offsetting declines in our utility coal franchise. The market for utility confronted persistently high stockpiles and low natural gas prices. Coal revenue was down 4% year-over-year, with lower commodity prices and lower revenue from fuel surcharge negatively impacting RPU.

轉向煤炭。整體銷售略有增加，強勁的出口需求足以抵消我們公用事業煤炭特許經營權的下降。公用事業市場面臨持續高庫存和低天然氣價格的問題。煤炭收入年減 4%，大宗商品價格下降和燃油附加費收入下降對 RPU 產生負面影響。

Now let's turn to Slide 22 and review results for the full year. Total volume came in at 6.7 million units, a 1% decrease from 2022. Volume declines were most significant in intermodal and our energy-related chemical commodities. On the positive side, lower ocean freight rates, advanced demand for international intermodal and rising vehicle production activity drove growth in our automotive franchise, both of which contributed meaningfully to offsetting larger declines. Revenue for the year was $12.2 billion, down 5% or $590 million from 2022, driven by lower revenue from fuel surcharge and storage fees as well as lower volume.

現在讓我們轉向幻燈片 22 並回顧全年的結果。總銷量為 670 萬件，較 2022 年下降 1%。多式聯運和能源相關化學商品的銷量下降最為顯著。從積極的方面來看，海運費率下降、國際多式聯運需求增加以及汽車生產活動的增加推動了我們汽車特許經營權的增長，這兩者都為抵消更大的下降做出了有意義的貢獻。由於燃油附加費和倉儲費收入下降以及銷量下降，全年收入為 122 億美元，比 2022 年下降 5%，即 5.9 億美元。

I do think it's important to point out, however, that if we exclude the $650 million revenue hit from fuel and storage fees, which is essentially a post-pandemic normalization of those items, underlying revenue was actually positive, even with volume down 1%, which speaks to our commitment to core pricing smart growth. RPU excluding fuel, intermodal storage and fees increased 2% as we realized above budget price results in merchandise and in coal. In fact, we set annual records for merchandise revenue, revenue less fuel and RPU less fuel.

然而，我確實認為有必要指出，如果我們排除燃料費和倉儲費造成的6.5 億美元收入損失（這本質上是這些項目在大流行後的正常化），那麼基本收入實際上是正數，即使交易量下降了1% ，這反映了我們對核心定價智慧成長的承諾。由於我們意識到商品和煤炭的價格高於預算，不包括燃料、聯運倉儲和費用的 RPU 增加了 2%。事實上，我們創下了商品收入、收入減去燃料和 RPU 減去燃料的年度記錄。

Objectively, the freight environment in 2023 was soft with weak demand for goods, lower levels of manufacturing activity and generally less freight coming in from overseas. These conditions amplified the excess capacity in transportation pressuring margins and growth opportunities. Our focus throughout the year was creating value with a resilient network to drive growth. In the fourth quarter, we saw that growth materialize with improved volume, and that volume will bolster our revenue performance in the coming year as we execute our pricing strategy to grow core revenue per unit.

客觀而言，2023年的貨運環境疲軟，貨物需求疲軟，製造業活動水準較低，來自海外的貨運普遍減少。這些情況加劇了運輸業的產能過剩，對利潤率和成長機會帶來壓力。我們全年的重點是透過彈性網路創造價值以推動成長。在第四季度，我們看到成長隨著銷售量的提高而實現，隨著我們執行定價策略以增加單位核心收入，銷售量將提振我們來年的收入表現。

Let's look ahead to 2024 on Slide 23. Our market outlook is for modest volume growth. In merchandise markets, overall volume growth is expected to be driven by gains in steel shipments. Automotive will grow on continued strength in vehicle production, including new EV business. Improved fluidity and increased network velocity will lift our effective capacity in both of these markets.

讓我們在幻燈片 23 上展望 2024 年。我們的市場前景是銷量溫和成長。在商品市場，整體銷售成長預計將受到鋼材出貨量成長的推動。汽車產業將隨著汽車生產（包括新電動車業務）的持續強勁而成長。流動性的改善和網路速度的提高將提高我們在這兩個市場的有效能力。

Shifting to intermodal, we are optimistic that increasing levels of international trade will boost demand for both our domestic and international services. There's still uncertainty around how quickly capacity in the truck market rightsizes. Additionally, the strength of the consumer could pressure growth if the economy softens.

轉向多式聯運，我們樂觀地認為，國際貿易水準的提高將增加對我們國內和國際服務的需求。卡車市場產能調整的速度仍存在不確定性。此外，如果經濟疲軟，消費者的實力可能會對經濟成長造成壓力。

Lastly, our coal outlook is for relatively flat volume levels compared to last year. Demand for export coal is forecasted to be high but some of this demand will be met via a shift of historically domestic coal to export markets. Utility demand will be driven by stockpile levels, which are forecast to remain elevated in 2024, aside from extreme weather events.

最後，我們的煤炭產量前景是與去年相比相對持平。預計出口煤炭需求將很高，但部分需求將透過將歷史上國內煤炭轉向出口市場來滿足。公用事業需求將受到庫存水準的推動，預計除了極端天氣事件外，庫存水準在 2024 年將保持在較高水準。

Looking at price, we expect strong pricing conditions in our merchandise markets, aided by our improved service product. However, as mentioned, a persistently weak truck market will mute the opportunity for intermodal price with contract truck rates expected to trend roughly sideways from their current levels throughout 2024. We also faced some headwinds on coal pricing this year related to difficult comparisons for seaborne coal prices, with additional pressure from high stockpiles and weak natural gas prices.

就價格而言，我們預計在我們改進的服務產品的幫助下，我們的商品市場的定價條件將強勁。然而，如前所述，持續疲軟的卡車市場將削弱多式聯運價格的機會，預計整個2024 年合約卡車費率將在目前水平上大致橫向波動。今年我們在煤炭定價方面也面臨一些阻力，與海運煤炭的難以比較有關高庫存和疲軟的天然氣價格帶來額外壓力。

All said, we still expect to generate pricing above rail inflation in 2024. When we take all this together, we are reasonably confident that overall market fundamentals will create opportunities for us to bring on new freight and further the volume trend we achieved in the fourth quarter of 2023, while delivering incremental top line revenue growth through core pricing gains as we price into the value of our enhanced service product.

總而言之，我們仍然預計2024 年的定價將高於鐵路通膨。綜合考慮所有這些因素，我們有理由相信，整體市場基本面將為我們創造新的貨運機會，並進一步推動我們在第四季度實現的貨運量趨勢2023 年第四季度，同時隨著我們對增強型服務產品的價值進行定價，透過核心定價收益實現增量收入成長。

Finally, let's turn to Slide 24. I'd like to give you some examples of how our customer-centric approach is yielding smart and sustainable growth. Last February, our team met with FedEx Ground with the intent to enhance Norfolk Southern service for their transportation network. We listened to their business forecast and made strategic adjustments that we knew would set us up to better serve this valued customer. We charted a better way forward for both of our organizations. As a result, we were able to significantly increase our volume for FedEx Ground during peak season and we look forward to continuing that growth into the future.

最後，讓我們轉向投影片 24。我想向您提供一些範例，說明我們以客戶為中心的方法如何實現明智且可持續的成長。去年二月，我們的團隊與 FedEx Ground 進行了會面，旨在增強諾福克南方航空的運輸網路服務。我們聽取了他們的業務預測並做出了策略調整，我們知道這些調整將使我們能夠更好地服務於這位尊貴的客戶。我們為我們兩個組織制定了更好的前進方向。因此，我們能夠在旺季期間大幅增加聯邦快遞陸運的貨運量，並且我們期待未來繼續保持這種成長。

We also landed a new plastic recycling plant in Ohio with our new customer, PureCycle, which is expected to launch this quarter. This is a great example of the circular loop that is possible within the plastic supply chain and how Norfolk Southern can deliver that resin in a carbon-friendly manner.

我們還與新客戶 PureCycle 在俄亥俄州建立了一家新的塑膠回收廠，預計將於本季啟動。這是塑膠供應鏈中可能存在的循環迴路的一個很好的例子，以及諾福克南方公司如何以碳友善的方式提供樹脂。

Finally, 2023 was another successful year for the Norfolk Southern Industrial Development team. We partnered with 62 customers to facilitate the completion of strategic industrial development projects in 2023. Collectively, these projects represent $3.1 billion in customer investment and the creation of more than 4,150 new jobs along Norfolk Southern lines. As we look into 2024, we're encouraged by the continued robust pipeline of customers that are looking to locate facilities along our lines. These successes in 2023 are indicative of the success that we expect in '24 and demonstrates our strategy to deliver a better way forward for our customers, our communities and for our shareholders.

最後，2023 年對諾福克南方工業發展團隊來說又是個成功的一年。我們與 62 家客戶合作，推動在 2023 年完成戰略工業發展項目。這些項目總共代表了 31 億美元的客戶投資，並在諾福克南方鐵路沿線創造了 4,150 多個新就業機會。展望 2024 年，我們對持續強勁的客戶管道感到鼓舞，他們希望在我們的線路上尋找設施。 2023 年的這些成功預示著我們在 24 年所期望的成功，並展示了我們為客戶、社區和股東提供更好的前進道路的策略。

With that, I'll turn it back over to Alan.

這樣，我會把它轉回給艾倫。

We overcame a number of challenges in 2023 and we are moving forward with confidence. Our resolve to deliver on all aspects of our strategy has never been stronger. We restored service and improved safety in a responsible manner to protect our franchise and long-term shareholder value. We ended 2023 with the best intermodal service we've seen in years and with an encouraging 5% increase in intermodal volume. Now we enter 2024 with a fluid network, which will drive productivity gains and further growth this year.

2023年，我們克服了許多挑戰，滿懷信心前進。我們實現戰略各個方面的決心從未如此堅定。我們以負責任的方式恢復服務並提高安全性，以保護我們的特許經營權和長期股東價值。 2023 年結束時，我們提供了多年來最好的多式聯運服務，多式聯運量增加了 5%，令人鼓舞。現在，我們進入了 2024 年，網路流暢，這將推動今年生產力的提高和進一步的成長。

Turning to our outlook. We anticipate roughly 3 points of revenue growth in 2024. This growth, combined with our productivity initiatives, will yield strong accretive incremental margins with operating income growing in excess of revenues. Net income and EPS growth will be suppressed in 2024 versus 2023, owing to higher interest expense from the highly strategic acquisition of CSR, along with the temporary suspension of our share repurchase program. As for the progression through the year, typical seasonality suggests that second quarter and third quarter should be our strongest in terms of margin performance.

轉向我們的展望。我們預計 2024 年營收將成長約 3 個百分點。這種成長與我們的生產力計畫相結合，將產生強勁的增量利潤，營業收入的成長將超過營收的成長。與 2023 年相比，2024 年的淨利和每股盈餘成長將受到抑制，原因是高度策略性收購 CSR 帶來的利息支出增加，以及我們的股票回購計畫的暫停。至於全年的進展，典型的季節性表明，就利潤率表現而言，第二季和第三季應該是我們最強勁的。

Obviously, the first quarter will have some industry-wide impact, from widespread cold weather in January, and our first quarter still has year-over-year headwinds from storage fees, fuel revenue and export coal price. In line with the Investor Day guidance, over the midterm horizon, we anticipate delivering strong incremental margins, presuming a normal freight cycle and mix and 3 to 4 points of revenue growth. A combination of volume absorption, productivity initiatives and a commitment to cost control will be key drivers.

顯然，由於一月份普遍寒冷的天氣，第一季將對整個行業產生一些影響，而且我們第一季仍然面臨來自倉儲費、燃料收入和出口煤炭價格的同比阻力。根據投資者日指導，在中期範圍內，假設貨運週期和組合正常，收入增長 3 到 4 個百分點，我們預計將實現強勁的增量利潤。銷售吸收、生產力措施和成本控制承諾的結合將是關鍵驅動因素。

We aren't going to give you a specific margin target but it should result in between 100 to 150 basis points of margin improvement annually, on the pathway to narrow the margin gap with peers and deliver industry competitive margins. You'll start to see progress along those lines in 2024 once we lap some of the revenue compare challenges in the first half. We see a path to outsized gains on the up cycle, leveraging volume growth within existing resources, ample productivity runway, and strong core pricing that can outpace inflation pressures. As we narrow our margin gap over time, the secular growth prospects of our powerful franchise will deliver shareholder value through earnings momentum and free cash flow generation.

我們不會為您提供具體的利潤率目標，但它應該會導致每年利潤率提高 100 到 150 個基點，從而縮小與同行的利潤率差距並提供具有行業競爭力的利潤率。一旦我們克服了上半年的一些收入比較挑戰，您將在 2024 年開始看到這些方面的進展。我們看到了一條在上行週期中實現巨大收益的途徑，利用現有資源內的銷售增長、充足的生產力跑道以及可以超越通膨壓力的強勁核心定價。隨著時間的推移，我們的利潤差距不斷縮小，我們強大的特許經營權的長期成長前景將透過獲利動力和自由現金流的產生來實現股東價值。

And with that, let's open the call for questions.

接下來，讓我們開始提問。

(Operator Instructions) Due to the number of analysts joining us on the call today, we will be limiting everyone to 1 question each to accommodate as many participants as possible.

（操作員說明）由於今天參加我們電話會議的分析師數量較多，我們將限制每個人每人只能提出 1 個問題，以容納盡可能多的參與者。

Our first question comes from the line of Chris Wetherbee with Citigroup.

我們的第一個問題來自花旗集團的 Chris Wetherbee。

I wanted to think a little bit about the bigger picture here, Alan. You talked about the 100 to 150 basis points of OR opportunity per year over a 3-year period. As we kind of think about you guys relative to some of your closer peers, that's about half of the gap that exists today. So I guess as you think over, is there more opportunity beyond that? It just takes time to get there? Do you think that there's still -- there is the potential for a structural gap between you and your closest geographic peer? Just want to get a sense of how you think about the opportunity maybe beyond that 3 years and how it might play out.

我想稍微考慮一下這裡的大局，艾倫。您談到了 3 年期間每年 100 到 150 個基點的 OR 機會。當我們相對於一些更接近的同齡人來看待你們時，這大約是今天存在的差距的一半。所以我想你仔細想想，除此之外還有更多的機會嗎？只是需要時間才能到達嗎？您是否認為您和地理上最接近的同行之間仍然存在潛在的結構性差距？只是想了解您如何看待三年後的機會以及它可能會如何發揮作用。

Chris, we've committed to industry competitive margins. And in '23, we overcame a lot. We made a lot of progress on our strategic plan. We enhanced safety, we improved service, we attracted new business, we overcame challenges. As we look into '24, it's really a focus on productivity. And we feel like we're going to be on that pathway of 100 to 150 basis points a year, particularly as we get into the second half of the year and lap some of these revenue comps. But we gave a 3-year outlook but that's not an endpoint. We have talked about continuous productivity improvement as one of the 3 components of our balanced strategy of safe service, continuous productivity improvement and smart growth.

克里斯，我們致力於提供具有行業競爭力的利潤。在23年，我們克服了許多困難。我們的策略計劃取得了很大進展。我們提高了安全性，改善了服務，吸引了新業務，克服了挑戰。當我們展望 24 世紀時，我們確實關注的是生產力。我們覺得我們將走上每年 100 到 150 個基點的道路，特別是當我們進入今年下半年並完成其中一些收入比較時。但我們給了 3 年展望，但這並不是終點。我們已經談到，持續生產力提高是我們安全服務、持續生產力提高和智慧成長平衡策略的三個組成部分之一。

Our next question comes from the line of Ken Hoexter with Bank of America.

我們的下一個問題來自美國銀行的 Ken Hoexter。

I guess I'm still surprised by that time frame, right? It should seem like there's still moves that would get you that leverage a bit quicker, I guess, just compared to some moves we've seen some other rails. So maybe just was the impetus for some of these changes, the headcount, the 3-year OR targets, there's been some activist chatter in the market, is that something that's edging you behind in terms of making some of these changes? And then I guess, ultimately, the question is, is pricing accretive to margins in '24?

我想我仍然對那個時間框架感到驚訝，對吧？我想，與我們在其他軌道上看到的一些舉措相比，似乎仍然有一些舉措可以讓您更快地利用槓桿。因此，也許只是其中一些變化的推動力，人員數量，3 年 OR 目標，市場上有一些積極的議論，這是否是導致您在進行這些變化方面落後的因素？然後我想，最終的問題是，定價是否會增加 24 年的利潤？

Ken, our -- with us entering the third year of a freight recession, with the investments that we've made in safety and service that are delivering meaningful results, it's clear that our cost structure is too high for our revenue base and in 2024. And so we address service, we address safety, we addressed growth in '23. We did it in a responsible manner to protect our franchise and our shareholders. Now as we enter 2024, we've got a much more fluid network, much safer network, a network that is attracting growth, and it's a focus on productivity.

肯，我們的——隨著我們進入貨運衰退的第三個年頭，我們在安全和服務方面所做的投資正在帶來有意義的成果，很明顯，我們的成本結構對於我們的收入基礎來說太高了，而且到2024 年。 因此，我們解決了服務問題，我們解決了安全問題，我們解決了 23 年的增長問題。我們以負責任的方式這樣做，以保護我們的特許經營權和股東。現在，當我們進入 2024 年時，我們擁有一個更流暢、更安全的網絡，一個正在吸引成長的網絡，並且它注重生產力。

And so yes, we're looking at every cost out there. And we're looking at discretionary costs. We're looking at management costs. And we're focused on productivity, because it is a balanced plan.

所以，是的，我們正在考慮每項成本。我們正在考慮可自由支配的成本。我們正在考慮管理成本。我們專注於生產力，因為這是一個平衡的計劃。

I'll let Ed talk about price.

我會讓艾德談談價格。

Yes. We were successful in '23 on price, and in '24, we have a good price plan that's strong and really is going to produce value every quarter this year. So we feel good about where we are with price. And there's a couple of things that I'll add to that. We're feeling really good about where we are with our service trajectory at this point. We're hearing from customers that they appreciate the value that we're providing for them. And we're doing it at the facility level, going out and talking to customers focused on that first and final mile and how we add value. And that's going to produce value for us and for our shareholders all year long.

是的。我們在 23 年的價格方面取得了成功，在 24 年，我們制定了一個很好的價格計劃，該計劃很強大，並且確實會在今年每個季度產生價值。因此，我們對目前的價格狀況感覺良好。我還要補充幾件事。我們對目前的服務軌跡感到非常滿意。我們從客戶那裡得知，他們欣賞我們為他們提供的價值。我們正在設施層面上這樣做，走出去與客戶交談，重點關注第一英里和最後一英里以及我們如何增加價值。這將為我們和我們的股東全年創造價值。

I appreciate it. And I know one question but I'm just trying to understand, are you saying then we get better margins in '24? Is that pricing outpacing that cost? I just -- sorry, just trying to understand the answer there, Ed.

我很感激。我知道一個問題，但我只是想了解一下，你是說我們在 24 年會獲得更好的利潤嗎？這個定價是否超過了成本？我只是——抱歉，只是想理解那裡的答案，艾德。

That's part of the equation. That's part of the equation, for sure.

這是等式的一部分。當然，這是等式的一部分。

Our next question comes from the line of Scott Group with Wolfe Research.

我們的下一個問題來自斯科特集團和沃爾夫研究公司。

So Alan, you've been telling us for a little while now that maybe we'll see weaker decrementals at the trough but then we'll see better incrementals on the way back up. I think about Q4 where we started to see the way back up, we saw some pretty good volume growth, and the incremental margins were still really muted even with a nice fuel ag tailwind. So how do I think about why we didn't see it this quarter? And then maybe just going forward, you just said the cost structure is too high. I don't know that I heard that you're telling us that costs come down from here though. Maybe I misheard or do costs come down from here? And then I don't know, just to put it all together, Mark, sometimes you just give us some color on near-term OpEx and margin, how to think about Q1, that would be helpful.

艾倫，你已經告訴我們一段時間了，也許我們會在谷底看到較弱的減量，但隨後我們會在回升時看到更好的增量。我想到第四季度，我們開始看到回升的方式，我們看到了一些相當不錯的銷售成長，即使在燃料農業的良好順風下，增量利潤率仍然非常低。那麼我如何看待為什麼我們本季沒有看到它呢？然後也許就繼續前進，你剛才說成本結構太高了。我不知道我聽說你告訴我們成本從這裡開始下降。也許我聽錯了，或者成本是從這裡降低的嗎？然後我不知道，只是把所有這些放在一起，馬克，有時你只需給我們一些關於近期營運支出和利潤率的信息，以及如何考慮第一季度，這會很有幫助。

Yes, Scott. We had to overcome a lot in '23. And we made investments in a prudent manner to enhance safety, enhance service and attract growth, particularly in our most service-sensitive markets. And so we're -- with respect, we're putting proof points up on the board. As we moved through into the fourth quarter, we were still wrestling with a service product that was off plan, which adds complexity, adds variability and adds costs. We're operating in a really tough freight environment. And we were dealing with pretty healthy year-over-year inflation. And we're still lapping some difficult comps with respect to the fuel surcharge revenue and with respect to storage revenue, right?

是的，斯科特。 23年我們必須克服很多困難。我們以審慎的方式進行投資，以提高安全性、增強服務並吸引成長，特別是在我們對服務最敏感的市場。因此，恕我直言，我們正在將證據放在黑板上。當我們進入第四季度時，我們仍在努力解決未計劃的服務產品，這增加了複雜性、可變性並增加了成本。我們在一個非常艱難的貨運環境中運作。我們正在應對相當健康的年比通膨。我們仍在燃油附加費收入和儲存收入方面進行一些困難的比較，對嗎？

And mix.

並混合。

And mix. And so as we move into '24, those things are going to start to unwind themselves, right? We've got a much more fluid network. We're operating on plan. That will drive out our service recovery costs. And then after that, we're going to continue to iterate to our plan. That's going to help drive productivity. And we're going to attract new business. And as you noted, our strategy is all about outperforming during an up market. I don't see that in the next 6 months, when the economy does recover, it always does, when the freight market does recover, and it always does, we're going to be cold for growth.

並混合。因此，當我們進入 24 世紀時，這些事情就會開始自行緩解，對嗎？我們擁有更流暢的網路。我們正在按計劃進行。這將消除我們的服務恢復成本。之後，我們將繼續迭代我們的計劃。這將有助於提高生產力。我們將吸引新業務。正如您所指出的，我們的策略就是在市場上漲期間表現出色。我不認為在未來 6 個月內，當經濟確實復甦時，總是如此，當貨運市場確實復甦時，而且總是如此，我們會對成長感到冷淡。

Mark, any color on the OpEx, the OR Q1 again? I just -- I didn't -- I don't know that -- I asked, I mean, you said the cost structure is too high. Does it come down or not? I guess I'm not -- still not sure what the answer is.

馬克，OpEx、OR Q1 上有什麼顏色嗎？我只是──我沒有──我不知道──我問，我的意思是，你說成本結構太高了。到底是下來還是不下來？我想我不是——仍然不確定答案是什麼。

So I think as you go into Q1, you're going to have some of the normal seasonality that has an impact on your OR. So I think you need to expect that the first half, Q1 in particular, is probably going to step back. But then we feel much better as we lap a lot of the headwinds that we've been talking about from this first half, the intermodal storage charges, some of the fuel price and some of the other RPU challenges we're having on coal price. I think as we get to that back half is where you're going to really start to see much stronger incrementals and drop-through.

因此，我認為當您進入第一季時，您將會遇到一些對您的 OR 產生影響的正常季節性因素。所以我認為你需要預料到上半年，尤其是第一季，可能會有所回落。但隨後我們感覺好多了，因為我們克服了上半年我們一直在談論的許多不利因素，包括多式聯運倉儲費、一些燃料價格以及我們在煤炭價格方面面臨的其他一些 RPU 挑戰。我認為當我們到達後半部分時，您將真正開始看到更強大的增量和下降。

Our next question comes from the line of Amit Mehrotra with Deutsche Bank.

我們的下一個問題來自德意志銀行的 Amit Mehrotra。

I guess, Alan, if we look at the 3-year plan, I think if you ask every railroad in North America, they tell you that they also would expect to improve margins by 100 to 150 basis points a year from where we are today. So I guess the negative implication of that outlook is that you're not actually narrowing the gap. You're just improving your position from where you are but the gap actually stays intact. So I'd be curious to get your perspective on that.

艾倫，我想，如果我們看一下 3 年計劃，我想如果你詢問北美的每家鐵路公司，他們會告訴你，他們還期望每年將利潤率比現在提高 100 到 150 個基點。所以我認為這種前景的負面影響是你實際上並沒有縮小差距。你只是在提高你的位置，但差距實際上保持不變。所以我很想知道你對此的看法。

And I think the cost structure is high, which is you're addressing that by taking these difficult actions with nonsalaried workers and I know that's a really difficult decision. But it seems also like -- when I look at the cost structure, it seems like the answer to something going wrong is growing as many resources at that problem as possible. If I look at materials expense or rent expense. And if I talk to any operating intensive railroad, their answer is you never really drown a problem with resources. That's the opposite of what you should do.

我認為成本結構很高，你正在透過對無薪工人採取這些困難的行動來解決這個問題，我知道這是一個非常困難的決定。但當我審視成本結構時，似乎解決問題的方法就是為該問題增加盡可能多的資源。如果我看一下材料費用或租金費用。如果我與任何營運密集型鐵路公司交談，他們的答案是你永遠不會真正淹沒資源問題。這與你應該做的相反。

So I'm trying to understand the removal of the nonunion or the rationalization of the nonunion employees is one step in that direction. But are we having to rethink about how we actually operate the railroad day in and day at and how we respond to issues because it seems like that's kind of the root cause of the problem in terms of where the gap is today? Sorry for the long-winded question but I just want to get your perspective on that.

因此，我試圖理解取消非工會或非工會員工的合理化是朝這個方向邁出的一步。但是，我們是否必須重新思考我們如何日復一日地實際運營鐵路以及我們如何應對問題，因為從今天的差距來看，這似乎是問題的根本原因？很抱歉問了這個冗長的問題，但我只是想了解您對此的看法。

What was the first part of your question?

你問題的第一部分是什麼？

Well, just in terms of the -- yes, sure, Alan. The 3-year outlook, 100 to 150 basis points, every rail on the continent will think that, so you're not actually narrowing the gap. So that was the question.

嗯，就——是的，當然，艾倫而言。 3年展望，100到150個基點，非洲大陸的每家鐵路公司都會這麼認為，所以你其實並沒有縮小差距。這就是問題所在。

Well, that's our commitment. Our commitment is industry competitive margins and top-tier revenue and earnings growth. And we said we're going to do that through an economic cycle. We said we would have difficulty within the industry competitive margins during a trough in the freight market. And candidly, we didn't expect some of the incidents that occurred in 2023, the network disruptions, the Eastern Ohio incident, and a continuation of a very difficult truck market. We invested throughout 2023 for the long term -- in the long-term best interest of Norfolk Southern and our shareholders. And we improved service, we improved safety, volumes grew in the fourth quarter.

嗯，這就是我們的承諾。我們的承諾是具有行業競爭力的利潤率以及一流的收入和盈利增長。我們說過我們將透過一個經濟週期來做到這一點。我們表示，在貨運市場低谷期間，我們將難以在產業內保持競爭優勢。坦白說，我們沒有預料到 2023 年會發生一些事件，包括網路中斷、俄亥俄州東部事件以及卡車市場持續困難的局面。我們在 2023 年全年進行長期投資——符合諾福克南方航空和我們股東的長期最佳利益。我們改善了服務，提高了安全性，第四季度的銷售量有所成長。

Now we can really narrow our focus, right? We can narrow our focus into productivity. And that's exactly what we're doing. And we're going to drive that by operating to the plan, a high degree of compliance to the plan. That will shed resources. That's going to shed a lot of the service recovery resources that you just referenced. As we get on plan, we'll continue to iterate the plan and look for additional ways to drive out complexity, drive out costs and improve balance.

現在我們真的可以縮小我們的焦點了，對嗎？我們可以將注意力集中在生產力上。這正是我們正在做的事情。我們將透過按照計劃運營、高度遵守計劃來推動這一目標。這將減少資源。這將浪費您剛才提到的大量服務恢復資源。當我們按計劃進行時，我們將繼續迭代該計劃，並尋找其他方法來消除複雜性、降低成本並改善平衡。

And just adding to what Alan said, as we think back to the fourth quarter, it was all about driving intermodal service, recognizing that the service sensitivity to that was going to directly drive growth of this railroad, which we did see. The shift in the layering on now is towards driving that discipline and rigor inside of our merchandise network. We recognize that is where our single biggest opportunity is.

補充一下艾倫所說的，當我們回顧第四季度時，這一切都是為了推動多式聯運服務，認識到對此的服務敏感性將直接推動這條鐵路的增長，我們確實看到了這一點。現在分層的轉變是為了推動我們的商品網絡內部的紀律和嚴謹。我們認識到這就是我們最大的機會所在。

Total T&E as a result of that essentially troughed in October. And we expect that we're going to see greater productivity as we continue to dial in our merchandise network, that's going to be a reduced number of recrews and all of the associated costs: taxis, hotels, [deadheading], overtime, car hire, equipment expense. We're going to see improved capacity in our merchandise network as cars per carload improves. So that's the flywheel impact that we're talking about.

因此，T&E 總額在 10 月基本觸底。我們預計，隨著我們繼續撥入我們的商品網絡，我們將看到更高的生產力，這將減少工作人員的數量和所有相關成本：計程車、酒店、[空頭]、加班、汽車租賃、設備費用。隨著每車車輛數量的增加，我們將看到我們的商品網路的容量有所提高。這就是我們正在討論的飛輪影響。

So to your question about what is fundamentally changing moving forward, it's from where we are now moving forward, a direct focus on merchandise recognizing. That's our next single biggest lever for productivity.

因此，對於您提出的關於未來發生根本性變化的問題，我們現在正在前進，直接關注商品識別。這是我們提高生產力的下一個最大槓桿。

That's where 2/3 of our operating costs are.

這是我們 2/3 的營運成本所在。

Our next question comes from the line of Jon Chappell with Evercore ISI.

我們的下一個問題來自 Evercore ISI 的 Jon Chappell。

I hate to keep on the guidance a bit but I'm going to move up to the revenue line here. I'm just trying to understand the roughly 3%. I get that there's macro headwinds. I understand the first half may be difficult. But by the same token, you have incredibly easy volume comps given all the disruption from February until August. And Ed talked about the continuation of the pricing above inflation. So one would probably expect the volumes to be a little bit better than 3% just given the comparison. So are we saying that all-in yield may be down this year? Or is there just like a healthy element of conservatism that you're putting into the macro economy in the first half of the year that may be temping that number down?

我不想繼續關注指導，但我將在這裡向上移動到收入線。我只是想了解大約 3%。我知道存在宏觀阻力。我知道上半場可能會很困難。但出於同樣的原因，考慮到從 2 月到 8 月的所有乾擾，您的銷售量比較非常容易。艾德談到了定價繼續高於通膨的問題。因此，根據比較結果，人們可能會預期成交量會比 3% 稍好。那我們是說今年的總殖利率可能會下降嗎？或者，您在今年上半年的宏觀經濟中是否存在健康的保守主義元素，這可能會導致這一數字下降？

I think -- this is Ed, by the way. There is a lot of uncertainty around what's going to happen here in the first half of the year. I think the Street's baked a lot of expectations around Fed actions and we'll see where that goes. But frankly, you look at first quarter and we see a pretty sedate volume opportunities here in the first quarter and the recent weather events for the entire industry has kind of confirmed that. But then we see a steady progression of volume improvement throughout the year. And I think volume improvement will probably lead the parade, so to speak, in terms of revenue and yield improvement for us. But we're pretty confident we might be conservative around coal price, but that's I think the right thing to do for ourselves as well as for the rest of the industry.

我想——順便說一句，這是艾德。今年上半年會發生什麼事存在著許多不確定性。我認為華爾街對聯準會的行動抱有很多期望，我們將拭​​目以待。但坦白說，你看看第一季度，我們看到第一季的銷售機會相當穩定，整個產業最近的天氣事件也證實了這一點。但隨後我們看到全年銷量穩定成長。我認為，就我們的營收和產量提高而言，銷售量的提高可能會引領潮流。但我們非常有信心我們可能對煤炭價格持保守態度，但我認為這對我們自己以及行業的其他公司來說都是正確的做法。

Our next question comes from the line of Tom Wadewitz with UBS.

我們的下一個問題來自瑞銀集團的湯姆‧瓦德維茲 (Tom Wadewitz)。

I want to ask you one granular one and then kind of a higher-level one. So I guess on the granular question, for Paul, should we think about, with a fairly muted volume backdrop, that train starts would come down in '24? Or are you thinking kind of, hey, the schedule is set and we'll keep that where it is? And then the higher-level question, I think when investors look at Norfolk, they say, okay, there is a potential idiosyncratic opportunity to run the system better. Maybe that runs on its own regardless of freight market. But I don't know that that's clear. So should we look at it as more of a kind of idio improvement story? Or is this really a freight market, freight cycle leverage story, right? That it's really when the freight market improves, if that second half, is that's '25, then you're just really well positioned for that? So I think just trying to figure out what's really the right way to look at the Norfolk story.

我想問你一個細粒度的問題，然後是更高層次的問題。所以我想，對於保羅來說，在具體的問題上，我們是否應該考慮一下，在成交量相當低的背景下，火車開工率會在 24 年下降？或者你是否在想，嘿，時間表已經確定，我們會保持原樣？然後是更高層次的問題，我認為當投資者關注諾福克時，他們會說，好吧，有一個潛在的特殊機會可以更好地運行該系統。也許無論貨運市場如何，它都會自行運作。但我不知道這是否清楚。那麼我們是否應該將其視為一種 idio 改進故事？或者這真的是一個貨運市場、貨運週期槓桿故事，對嗎？這確實是貨運市場好轉的時候，如果下半年是 25 年，那麼你們真的已經做好準備了嗎？所以我認為只是想找出看待諾福克故事的真正正確的方法。

Why don't you address the first question?

為什麼不回答第一個問題呢？

Yes, absolutely, Tom. Thanks for the question. So we think about it not just as train starts but overall T&E productivity. It's all about getting the most from our crews. And we're going to see that improve through not only the -- what we've seen here over the past several weeks for improvements in network velocity but running more disciplined to plan and layer down initiatives. We know running more disciplined to plan is already starting to show itself in reductions in T&E expense. You've seen it in the other productivity measures from the slides.

是的，絕對是，湯姆。謝謝你的提問。因此，我們不僅在火車啟動時考慮這個問題，還考慮整體差旅和娛樂生產力。這一切都是為了從我們的團隊中獲得最大利益。我們將看到這種改善不僅透過過去幾週我們在這裡看到的網路速度的提高，而且還透過更嚴格的計劃和分層計劃來實現。我們知道，更嚴格地執行計畫已經開始體現在差旅費用的減少上。您已經在幻燈片的其他生產力衡量標準中看到了這一點。

We're going to make further iterations to the plan as we get more discipline, particularly in our merchandise network. And that's only going to drive improvements in GTMs per horsepower but also on the T&E side. We've got a number of initiatives beyond just running the plan more disciplined and seeing that cost come out, again, that we're layering on. We've got pool transitions taking place. So as we have gotten more fluid and more consistent, we have transitioned more short-pool runs to long-pool runs, again, because we've got greater consistency and velocity in the network, that has productivity benefits. We have put more towards assigned service from a T&E standpoint. That means we've got assigned crew pools and turns, that reduces hotels, van expenses, has a quality-of-life benefit.

隨著我們獲得更多紀律，特別是在我們的商品網絡中，我們將進一步迭代該計劃。這不僅會推動每匹馬力 GTM 的改進，而且還會推動 T&E 方面的改進。我們也採取了許多舉措，不僅是更嚴格地執行計劃，並再次看到我們正在分層的成本。我們正在進行池轉換。因此，隨著我們變得更加流暢和更加一致，我們再次將更多的短池運行轉變為長池運行，因為我們在網路中獲得了更高的一致性和速度，這具有生產力優勢。從差旅和娛樂的角度來看，我們對指定服務投入了更多。這意味著我們已經分配了船員池和輪流，這減少了酒店、貨車費用，並提高了生活品質。

We're going to roll out predictable work scheduling this year on our conductors -- or with our conductor, excuse me. More than 80% of our schedule -- our network is scheduled, meaning as we layer in predictable work scheduling, we will see a benefit in reductions in displacement time. We've got a number of board consolidation initiatives that are taking place. And we're driving accountabilities to run lean and to plan inside of our merchandise yard.

今年我們將為我們的指揮推出可預測的工作安排——或者與我們的指揮一起，對不起。我們超過 80% 的日程安排——我們的網路都是預定的，這意味著當我們分層可預測的工作安排時，我們將看到減少位移時間的好處。我們正在進行許多董事會合併措施。我們正在推動責任，以實現精益運營並在我們的商品場內進行規劃。

So that all translates into we're going to see train length on the merchandise side. We've got line of sight on some improvements we can make there, not only through further iterations of the plan. We've also got some investments planned this year in some of our major merch channels that are going to drive productivity and train length. Intermodal train length went up in Q4 as a direct result of us not only delivering great service, but customers rewarding us with business. And again, we're going to continue to work on that.

因此，這一切都意味著我們將在商品方面看到火車的長度。我們已經看到了可以在那裡做出的一些改進，而不僅僅是透過計劃的進一步迭代。今年我們也計劃對一些主要商品管道進行一些投資，這些投資將提高生產力和列車長度。第四季多式聯運列車長度增加，這不僅是我們提供優質服務的直接結果，也是客戶給予我們業務的回報。再說一遍，我們將繼續為此努力。

And from a bulk standpoint, you've heard us talk about the various longer-term initiatives we have with our customers to invest in facilities, particularly in our (inaudible) network. Several elevators are investing. And we expect to really see the benefits as that -- those investments come to play.

從整體的角度來看，您已經聽到我們談論我們與客戶一起投資設施的各種長期計劃，特別是我們的（聽不清楚）網絡。幾部電梯正在投資。我們期望真正看到這樣的好處——這些投資開始發揮作用。

And Tom, your second question. As we've lapped -- gone through 2023, and we've made the necessary improvements in safety and service and attractive growth, we can really start to focus on productivity in our own plan and execution of that plan. That provides benefit as well. And then our whole strategy is about outperforming during the up cycle. Our franchise is built to outperform during the up cycle. You've seen us recover from network disruptions much faster than we have in the past. So there's a proof point as well. We're not calling when that up cycle occurs. But when it does, we do believe that we will outperform and we will attract new business with high incremental margins.

湯姆，你的第二個問題。隨著我們已經走過 2023 年，我們在安全和服務以及有吸引力的增長方面做出了必要的改進，我們可以真正開始關注我們自己的計劃和該計劃的執行中的生產力。這也帶來了好處。然後我們的整個策略就是在上升週期中表現出色。我們的特許經營權旨在在上升週期中超越大盤。您已經看到我們從網路中斷中恢復的速度比過去快得多。所以也有一個證明點。當上升週期發生時我們不會打電話。但當它發生時，我們確實相信我們會表現出色，並且會以高增量利潤吸引新業務。

So it's improving our own operations and executability with the plans as we can now narrow our focus on really operate into the plan and driving efficiencies, and then participating and outperforming during the up cycle.

因此，它正在透過計劃改善我們自己的營運和可執行性，因為我們現在可以將重點集中在計劃的實際運營和提高效率上，然後在上升週期中參與並表現出色。

Our next question comes from the line of Brian Ossenbeck with JPMorgan.

我們的下一個問題來自摩根大通的布萊恩·奧森貝克 (Brian Ossenbeck)。

Just a quick follow-up for Paul. If you can just give us some sense in terms of how much of those productivity metrics you're talking about are actually independent of volume, I'm sure that would help. But how much do you have line of sight if volume stays flat or maybe doesn't recover in the back half? And then just to ask more broadly, do you think there's a structural margin gap that will always be here for this network versus some of your peers? I mean do you have roughly 10 percentage points more intermodal, more truck competitive, you can have shorter length of haul dynamics in international as well, lighter weight, more touches?

只是保羅的快速跟進。如果您能讓我們了解您所談論的生產力指標中有多少實際上與數量無關，我相信這會有所幫助。但是，如果後半段成交量保持平穩或沒有恢復，您的視線有多少？然後更廣泛地問一下，您認為該網絡與您的一些同行相比是否始終存在結構性利潤差距？我的意思是，你們的多式聯運是否提高了大約 10 個百分點，卡車更具競爭力，國際運輸的動態長度也更短，重量更輕，接觸更多？

So I'd just be curious to hear if that's something you think about in the long term in terms of closing that gap that might be a hindrance, or if there's something I'm not thinking about from a productivity density perspective that could make that incorrect assumption.

因此，我很想知道，從長遠來看，這是否是您在縮小可能成為障礙的差距方面考慮的事情，或者是否有一些我沒有從生產力密度角度考慮的事情可能會導致這種情況錯誤的假設。

Brian, each franchise has unique strengths. We have committed to top-tier revenue and top-tier earnings growth coupled with industry competitive margins. We're going to deliver that. We've got a franchise that faces the fastest-growing segments of the U.S. economy and a franchise that's poised for growth. We're entering the third year of a freight recession.

布萊恩，每個特許經營權都有獨特的優勢。我們致力於實現一流的收入和一流的獲利成長以及具有行業競爭力的利潤率。我們將交付它。我們擁有面向美國經濟成長最快的領域的特許經營權，以及即將成長的特許經營權。我們正進入貨運衰退的第三年。

That will unwind. And when it does, the enhancements that we've made to safety, the enhancements that we've made to service, the ability to attract business in the fourth quarter in automotive and intermodal, which are our most service-sensitive markets, right, give us a pathway to success going forward and allow us to unlock our full potential. And Paul and his team and the entire executive team are intently focused on driving out cost inefficiencies and driving productivity.

這樣就會放鬆下來。當它發生時，我們在安全方面的增強，我們在服務方面的增強，以及第四季度在汽車和多式聯運領域吸引業務的能力，這是我們對服務最敏感的市場，對吧，為我們提供一條通往成功的道路，讓我們充分發揮潛能。保羅和他的團隊以及整個執行團隊都專注於消除成本效率低下並提高生產力。

Let me just add real quick. This entire team recognizes that a margin gap exists today between where we are and where we should be. And we're focused intently on closing and narrowing that gap before we get to an area of talking about why any remaining gap exists. There's a lot of runway still for us organically and self-help.

讓我快速添加一下。整個團隊都意識到，今天我們的現狀和我們應該達到的目標之間存在著差距。在我們討論為什麼存在剩餘差距之前，我們會集中精力縮小這一差距。我們還有很多有機和自助的跑道。

Yes. And the specific around how much is initiatives versus volume adjust, many of those initiatives that I spoke to are going to continue regardless of the volume environment. The iterations to the plan are always going to continue. But that is going to be the lever that is most sensitive to volume. But we're going to continue to drive train length. We're going to continue to drive crew productivity regardless of the volume environment.

是的。至於具體的舉措與數量調整的比例，我談到的許多舉措都將持續下去，無論數量環境如何。計劃的迭代總是會持續下去。但這將是對成交量最敏感的槓桿。但我們將繼續延長列車長度。無論數量環境如何，我們都將持續提高工作人員的生產力。

Our next question comes from the line of Brandon Oglenski with Barclays.

我們的下一個問題來自巴克萊銀行的布蘭登·奧格倫斯基。

And I guess maybe the frustration from the investor side is that if we go back a couple of analyst meeting, and maybe even back to 2015, the mantra here has always been that we're trying to close the gap. But I guess, constructively, Paul or Ed, can you help us understand where you are in trip plan compliance with your customers? Because I think ultimately, it's consistency of service that matters, right? So what can you talk about what did you learn through changing the makeup rules through 2023? And where is the future on service to your customers? What are you seeing today?

我想也許投資者方面的挫折感是，如果我們回顧幾次分析師會議，甚至可能回到 2015 年，這裡的口號一直是我們正在努力縮小差距。但我想，保羅或艾德，建設性地想，您能幫助我們了解您在遵守客戶的旅行計劃方面處於什麼位置嗎？因為我認為最終重要的是服務的一致性，對嗎？那麼您能談談透過 2023 年化妝規則的改變您學到了什麼嗎？為客戶提供服務的未來在哪裡？你今天看到了什麼？

Well, let me start off, and I'd love to have Ed jump in here as well. From an intermodal perspective as we look at where we finished fourth quarter, we delivered the best intermodal service we have put across this railroad in several years. And customers rewarded us with volume as a result. We expect to maintain that level of service based on what we've heard from our customers is their expectation. From a merchandise standpoint, we continue to see improvements in merchandise trip plan compliance throughout the year.

好吧，讓我開始吧，我也想讓艾德也加入進來。從多式聯運的角度來看，當我們看到第四季度的業績時，我們提供了幾年來在這條鐵路上提供的最好的多式聯運服務。結果，客戶以銷售回報了我們。我們希望根據客戶的期望來維持這種服務水準。從商品的角度來看，我們全年繼續看到商品旅行計畫合規性的改善。

To your point around the train maker pools, we said that we were going to recover after we had moved forward with those, meant to, again, drive greater safety and resiliency across our network. We feel very confident that we've seen merchandise trip line compliance continue to come up throughout the year, and we feel that we're very confident as we look at 2024, based on the further discipline that we are going to build and drive inside of our merchandise network.

對於您關於火車製造商池的觀點，我們說過，在我們推進這些工作後，我們將恢復元氣，這意味著再次提高我們網路的安全性和彈性。我們非常有信心，我們看到全年商品運輸線合規性不斷提高，並且基於我們將在內部建立和推動的進一步紀律，我們對 2024 年充滿信心我們的商品網絡。

I'd offer a couple of proof points, just to think about that are recent. The first one is we have one of our very largest customers comment to us that, emerging from the weather events that just happened in the past year -- or excuse me, the past week, that we recovered better than just about anybody else. And we really take that to heart because they themselves are a broad survey of many other railroads. So we think that that's really important as a proof point for resilience. As we return back to plan faster and faster after inevitable events, that's going to define a large part of the value that we're offering customers.

我想提供幾個證據點，只是想一下最近發生的事。第一個是我們最大的客戶之一向我們評論說，從去年剛發生的天氣事件中——或者對不起，過去一周，我們恢復得比其他任何人都好。我們確實牢記這一點，因為它們本身就是對許多其他鐵路的廣泛調查。所以我們認為這作為彈性的證明非常重要。當我們在不可避免的事件發生後越來越快地返回計劃時，這將定義我們為客戶提供的大部分價值。

Our next question comes from the line of Justin Long with Stephens Inc.

我們的下一個問題來自賈斯汀朗 (Justin Long) 與史蒂芬斯公司 (Stephens Inc.) 的電話。

So for 2024, there are a lot of moving pieces that you've talked about. But when you put it all together, do you think you'll be within that targeted longer-term range of 100 to 150 basis points of annual improvement in the OR? And Mark, I think you and Alan both mentioned the interest expense headwind you'll have this year. I was wondering if you could help quantify that year-over-year headwind.

因此，對於 2024 年，您談到了很多令人感動的事情。但是，當您將所有這些放在一起時，您認為您的 OR 年度改進是否會處於 100 至 150 個基點的長期目標範圍內？馬克，我想你和艾倫都提到了今年將面臨的利息支出阻力。我想知道您是否可以幫助量化逐年的逆風。

Yes. Thanks, Justin. Let's be explicit with interest. We've got -- we ended 2023 with about $17.2 billion of outstanding debt. The effective interest rate is about 4.7%. So I would model about $210 million a quarter for interest expense on the go forward. We've essentially kind of prefunded that CSR acquisition. So that should be relatively steady within a couple of few million dollars per quarter of that. And as we look at the moving pieces, again, we've got some headwinds here in the first half. I think as volume starts to grow as we go from Q2 to Q3 and then into Q4, we should really start to see with the compares a pretty good improvement year-over-year.

是的。謝謝，賈斯汀。讓我們有興趣地明確一下。截至 2023 年，我們的未償債務約為 172 億美元。實際利率約為4.7%。因此，我預計未來每季利息支出約為 2.1 億美元。我們基本上已經為 CSR 收購預先提供了資金。因此，這應該相對穩定在每季幾百萬美元的範圍內。當我們再次審視那些變化的部分時，我們在上半場遇到了一些阻力。我認為，隨著從第二季度到第三季度，再到第四季度，銷量開始成長，我們真的應該開始看到同比有相當好的改善。

So I don't see so much in the first quarter, certainly. I think there's a risk of regression there. But I think as we navigate the second quarter depending on volumes, but in particular, in the second half, is where you'll see most of the improvement. And look, I think that 100, 150 that we're talking about kind of on the go-forward, we should definitely be there in the back half. Whether it translates into a full year amount or not, I think, depends on a number of other factors.

所以我當然在第一季看不到那麼多。我認為那裡存在回歸的風險。但我認為，當我們根據銷售量來度過第二季時，特別是在下半年，你會看到大部分的改善。看，我認為我們正在討論的 100、150 是在前進，我們絕對應該出現在後半區。我認為，它是否轉化為全年金額取決於許多其他因素。

Our next question comes from the line of Jason Seidl with TD Cowen.

我們的下一個問題來自 Jason Seidl 和 TD Cowen 的對話。

I'll put the bat away for the horse that is guidance here and turn the attention a little bit to what you're seeing in terms of impacts from any diversions on the port side, whether they're from geopolitical events from the Panama Canal. And if you haven't seen them yet, do you expect to see them? And what sort of impact should we look for going forward?

我將把蝙蝠放在一邊，讓這裡的指導者把注意力轉向你所看到的港口一側任何改道所產生的影響，無論它們是否來自巴拿馬運河的地緣政治事件。如果您還沒見過他們，您希望見到他們嗎？未來我們應該期待什麼樣的影響？

Ed, what do you hear from customers?

艾德，你從顧客那裡聽到了什麼？

We're talking to our customers a lot about this. It's a situation that has grown over time. We haven't seen any impact yet to our volumes. In fact, our East Coast port volumes continue to be remarkably strong. And we are hearing customers start to evaluate their West Coast options, and that makes sense given some rather unprecedented things that are going on. But regardless, the great thing about our network is we're well-positioned to pick up that volume growth, whether it comes in the East Coast or the West Coast. And I think we're going to be able to very ably serve our customers and satisfy their needs.

我們與客戶就此進行了許多討論。這種情況隨著時間的推移而不斷發展。我們還沒有看到對我們的銷量有任何影響。事實上，我們的東海岸港口吞吐量仍然非常強勁。我們聽到客戶開始評估他們的西海岸選擇，考慮到正在發生的一些相當前所未有的事情，這是有道理的。但無論如何，我們網路的偉大之處在於我們處於有利地位，可以實現銷售成長，無論是在東海岸還是西海​​岸。我認為我們將能夠非常出色地服務我們的客戶並滿足他們的需求。

Ed, is there a preference on East Coast versus West Coast in the network?

Ed，網路中是否有東岸和西岸的偏好？

Well, there's all kinds of preferences. But no, we've got the network built for -- to take on volume, whether it comes through the East Coast or the West Coast. I think there's probably more intermodal conversion opportunity when it comes through the West Coast. But we've gotten very good at doing short-haul intermodal with our international customers.

嗯，有各種各樣的偏好。但不，我們建立的網路是為了增加流量，無論是透過東海岸還是西海​​岸。我認為經過西海岸時可能會有更多的多式聯運轉換機會。但我們非常擅長與國際客戶進行短程聯運。

Frankly, that's one of the benefits of our franchise, right? We got the most powerful intermodal franchise in the East, which serves 60% of the consumers. So no matter whatever comes in the East Coast or West Coast, we're going to handle it.

坦白說，這是我們特許經營的好處之一，對嗎？我們獲得了東部最強大的多式聯運特許經營權，為60%的消費者提供服務。因此，無論東海岸或西海岸發生什麼，我們都會處理。

Our next question comes from the line of Allison Poliniak with Wells Fargo.

我們的下一個問題來自艾莉森·波利尼亞克 (Allison Poliniak) 與富國銀行 (Wells Fargo) 的對話。

So with the focus on long-term growth, could you maybe talk to the growth investment embedded in CapEx? Is it higher, is it lower? And then with that longer-term margin road map, is there an offset embedded in that, given just sort of the ongoing investment in service that (inaudible) is making? Just any thoughts there.

因此，隨著對長期成長的關注，您能否談談資本支出中嵌入的成長投資？是高了還是低了？然後，考慮到（聽不清楚）正在進行的服務投資，在長期利潤路線圖上是否有抵銷作用？只是有任何想法。

Mark, do you want to talk about the capital program, please?

馬克，你想談談資本計畫嗎？

Yes. The capital -- I mean, the capital guidance actually for '23, I think I mentioned in my prepared remarks that was going to be largely flat with 2022. And I would say that the mix within that, between reinvesting in the business and safety and resilience, it's about the same as what it was in '22, call it, about 60%, 65%, and the growth element to that is the balance, call it, 35%, and that's pretty consistent between the 2 years, Allison.

是的。資本——我的意思是，實際上23 年的資本指導，我想我在準備好的發言中提到過，該指導將基本上與2022 年持平。我想說的是，其中的組合，即業務再投資與安全之間和彈性，它與 22 年的情況大致相同，稱之為 60%、65%，而成長要素就是平衡，稱之為 35%，這兩年之間非常一致，艾莉森.

Second part of your question, again, I don't recall.

你問題的第二部分，我又不記得了。

Yes. Just in that longer-term margin road map, obviously, you're investing in service. Is there sort of an offset embedded in that margin just given this ongoing investment, it just certainly doesn't end here. Just trying to think through that.

是的。顯然，就長期利潤路線圖而言，您正在投資服務。鑑於這項持續的投資，該利潤中是否存在某種抵消，它肯定不會就此結束。只是想思考一下。

Well, I know that a faster network is a less expensive network. So as we invest in service and we invest in resiliency, it translates to fewer recrews, fewer network disruptions, fewer -- less overtime, less equipment rents, improved fuel consumption and fuel efficiency. So yes, that's the part of our franchise -- or pardon me, of our strategy, right, is that balance between service productivity and growth, and they build on each other.

嗯，我知道更快的網路是更便宜的網路。因此，當我們投資於服務和彈性時，它意味著更少的工作人員、更少的網路中斷、更少的加班、更少的設備租金、改善的燃油消耗和燃油效率。所以，是的，這是我們特許經營權的一部分——或者請原諒我，我們策略的一部分，對吧，是服務生產力和成長之間的平衡，並且它們是相互基礎的。

The velocity piece plays into the growth.

速度部分參與了成長。

Our next question comes from the line of Jordan Alliger with Goldman Sachs.

我們的下一個問題來自喬丹·阿利格 (Jordan Alliger) 與高盛 (Goldman Sachs) 的關係。

Just a couple of clarifications or make sure I understand. In terms of thinking about this year, in light of the -- you mentioned steadily increasing volume assumptions and then increasing incrementals, particularly in the second half and the year-over-year improvement in margin notably in the second half. I guess the question is, what needs to happen to do better than the 100 to 150, the longer-term target? I would imagine part of the plan for the back half of this year is probably to exceed that, I would think.

只需進行一些澄清或確保我理解。就今年的思考而言，鑑於——您提到了銷售假設的穩定增加，然後增量的增加，特別是在下半年，以及利潤率的同比改善，尤其是在下半年。我想問題是，需要做什麼才能比 100 到 150 這個長期目標做得更好？我想今年下半年的計劃的一部分可能會超過這個數字。

And then secondarily, can you give a little more color around the use of cash this year? I think you said you're suspending the buyback but the interest expense is pretty high. So is debt reduction part of it? Because I think you also mentioned you want to get the liquidity ratios more in line. So maybe where do you hope to end the year on that front?

其次，您能否對今年的現金使用情況進行更多說明？我想你說要暫停回購，但利息費用相當高。那麼債務削減是其中的一部分嗎？因為我認為您也提到您希望使流動性比率更加一致。那麼，也許你希望在這方面結束這一年呢？

Yes, Jordan, on the cash side, we've got the big CSR purchase here in March. We've gone outside of our preferred debt-to-EBITDA range at the very end of the year, in part because we've had to also fund these ballasting costs. So that will continue to consume some cash as well in 2024. And then we've got the CSR purchase in addition to that. There are no debt redemptions planned this year. So it's really an issue of operating cash, minus CapEx, gets you to free cash flow. And then in that free cash flow, we've got our CapEx budget, which is flat with last year as well as the CSR purchase.

是的，喬丹，在現金方面，我們三月在這裡進行了大規模的企業社會責任採購。今年年底，我們已經超出了我們首選的債務與 EBITDA 範圍，部分原因是我們還必須為這些壓載成本提供資金。因此，到 2024 年，這也將繼續消耗一些現金。除此之外，我們也進行了 CSR 購買。今年沒有計劃償還債務。所以這其實是個營運現金的問題，減去資本支出，讓你獲得自由現金流。然後，在自由現金流中，我們得到了資本支出預算，與去年以及企業社會責任採購持平。

From there, we don't expect to have remaining cash to do share repurchase. So as we go into 2025, we should be in a better track with EBITDA growth to start to have a more normal capital allocation cycle like we've experienced in the past.

從那時起，我們預計不會有剩餘現金來進行股票回購。因此，當我們進入 2025 年時，我們的 EBITDA 成長應該處於更好的軌道，開始像我們過去經歷的那樣，開始有一個更正常的資本配置週期。

And then just the first part.

然後只是第一部分。

Yes, why don't you repeat the first part?

是的，為什麼不重複第一部分呢？

Yes. I mean, you've mentioned a few times that you expect steadily increasing volumes and steady increasing incrementals as we move through the year, with the second half seeing the lion's share, I suppose, of the margin improvement. So I guess I'm just curious, would the plan contemplate in excess of the 100 to 150 in the back half? And what needs to happen to do that? I assume it's volume, but...

是的。我的意思是，您曾多次提到，您預計今年的銷售和增量將穩定增加，我認為下半年將看到利潤率改善的最大份額。所以我想我只是好奇，該計劃是否會考慮後半部分超過 100 到 150 人？需要做什麼才能做到這一點？我認為是音量，但...

Yes. So Jordan, I think as you look at it, one thing that's going to happen on the cost side is the service costs that I laid out in my chart will come out. They may not come out as great in the first quarter, largely because of what we're doing to mitigate the cold weather but they're going to come out. And they're going to start coming out in the first quarter. And the plan is that most of those will start to release here in the second quarter, if not be completely gone. So that provides us some traction for sure.

是的。所以喬丹，我認為當你看到它時，成本方面將發生的一件事是我在圖表中列出的服務成本將會出現。它們在第一季的表現可能不會那麼好，主要是因為我們正在採取措施緩解寒冷的天氣，但它們將會出現。它們將於第一季開始上市。計劃是，其中大部分將在第二季開始發布，如果不是完全消失的話。所以這肯定為我們提供了一些動力。

A lot of the other fluidity and improvements that Paul mentioned will start to really take hold and provide traction where we actually think our T&E counts may end the year a little bit lower than where they started the year, which means you're taking on more volume and you're actually having perhaps fewer crews, that's embedded productivity right there. And then, of course, we're doing actions on the nonagreement side that will also yield some benefits.

保羅提到的許多其他流動性和改進將開始真正發揮作用並提供牽引力，我們實際上認為我們的 T&E 計數可能會比年初略低一些，這意味著您將承擔更多數量，而且實際上可能需要更少的工作人員，這就是生產力。當然，我們在非協議方面採取的行動也會帶來一些好處。

So we feel really good about our back half and our margin profile. I think a little bit stronger revenue, we can absolutely outperform that 150 in the back half -- the 100 to 150 in the back half and possibly be there for the full year because of it.

所以我們對我們的後半部分和利潤狀況感覺非常好。我認為，如果收入稍微強勁一些，我們絕對可以超越下半年的 150 家公司——後半區的 100 到 150 家公司，並且可能因此全年都保持在這一水平。

Our next question comes from the line of Ravi Shanker with Morgan Stanley.

我們的下一個問題來自拉維·尚克 (Ravi Shanker) 與摩根士丹利 (Morgan Stanley) 的對話。

Maybe just a high-level question here, and maybe going back to some of the previous questions asked and just tying it up. I mean, look, there's always a margin gap to your peers, and it's kind of easy to point to cost as a reason why. But you guys have been cutting costs for many years and you've taken a lot of resources down and you've done a lot to improve the service product. I think you have the lowest cost per carload of any of your peers. At what point is this not really a cost problem and it's more of a revenue problem and that needs the bulk of the resources addressing that rather than trying to take out more cost?

也許這裡只是一個高級問題，也許回到之前提出的一些問題並將其捆綁起來。我的意思是，你看，與同行之間總是存在著利潤差距，而且很容易將成本作為原因。但你們多年來一直在削減成本，削減了大量資源，並為改進服務產品做了很多工作。我認為你們的每輛車成本是同行中最低的。什麼時候這不是真正的成本問題，而是更多的收入問題，需要大量資源來解決這個問題，而不是試圖降低更多成本？

Look, it's a balanced approach, and we overcame a lot of Norfolk Southern specific headwinds in 2023. And we enter 2024 and with a safer network, a more fluid network and a network that is attracting business from our most service-sensitive customers. Once we get through this freight recession, and we will, we are poised for outperformance during the up cycle. That is the essence of our strategy. We're doing what we laid out at our Investor Day 14 months ago. And I'm proud of the way that we've overcome these obstacles in 2023 and set the stage for margin improvement in 2024, while protecting the best long-term interest of our shareholders and the Norfolk Southern franchise.

看，這是一種平衡的方法，我們在2023 年克服了諾福克南部的許多特定阻力。進入2024 年，我們擁有更安全的網絡、更流暢的網絡以及吸引我們對服務最敏感的客戶的業務的網路。一旦我們度過了這次貨運衰退（我們會的），我們就將在上升週期中表現出色。這就是我們戰略的本質。我們正在按照 14 個月前投資者日的計劃行事。我為我們在 2023 年克服這些障礙並為 2024 年利潤率改善奠定基礎，同時保護股東和諾福克南方特許經營權的最佳長期利益的方式感到自豪。

Yes. Make no mistake, Ravi, this franchise, this network is built to handle a lot more volume but we have a lot of cost runway ahead of us. And that's what we're focused on right now and we're certainly going to welcome the revenue when it comes. And I think, again, that's going to drive the high incrementals at that point. Thank you.

是的。毫無疑問，拉維，這個特許經營權、這個網絡是為了處理更多的數量而建立的，但我們面前有很多成本跑道。這就是我們現在關注的重點，當然會歡迎收入的到來。我再次認為，這將推動那時的高增量。謝謝。

Our next question comes from the line of David Vernon with Bernstein.

我們的下一個問題來自大衛·弗農和伯恩斯坦的對話。

Mark, on the topic of costs, I think there were some headlines last night about some headcount actions nonunion workforce. Is there a specific cost program in place with a quantifiable number that we can be thinking about in terms of pursuit of sort of the nonoperational costs as we kind of await the flywheel is starting to spin?

馬克，關於成本的話題，我認為昨晚有一些關於非工會勞動力人數統計行動的頭條新聞。是否有一個具體的成本計劃和一個可量化的數字，當我們等待飛輪開始旋轉時，我們可以考慮追求某種非營運成本？

Well, with regard to the nonagreement program, maybe I'm going to assume that's what you're referring to, we had mentioned about 7% was our target and that's going to yield over 300 people. And -- but I think the timing will probably start to take effect here in the second quarter, just the way the voluntary program works. So we'll start to see the cost relief take place here in the second quarter. And frankly, the savings amount will depend upon the mix of the folks that put their names in. So we certainly internally have a number in mind and we'll see where it settles after that. But we're going to -- but aside from that, there are other areas we're going to go after.

好吧，關於非協議計劃，也許我會假設這就是你所指的，我們提到大約 7% 是我們的目標，這將產生超過 300 人。而且 - 但我認為時間可能會在第二季度開始生效，就像自願計劃的運作方式一樣。因此，我們將在第二季開始看到成本減輕。坦白說，節省的金額將取決於輸入名字的人的組合。因此，我們內部肯定有一個數字，之後我們會看看它的結果。但我們將會——但除此之外，我們還會關注其他領域。

Again, we're not happy with our Purchased service spend. We were in a year of very, very difficult, challenging situation where we had to quickly get our network up and running again from a number of challenges, be it weather or accidents. So we've put a lot of money into quickly revamp -- using some outside services to quickly revamp our network on the mechanical side as well as engineering side. I would hope that those things start to really settle down. That's our focus, Paul and I, as well as even on the technology spend, where we've been using a lot more software as a service -- cloud-based services which show up in purchased services as opposed to CapEx. So that's been putting pressure on our Purchased services. But we've got to try to, again, put a lid on that growth.

同樣，我們對購買的服務支出並不滿意。我們正處於非常非常困難、充滿挑戰的一年，我們必須快速恢復網路並重新運行，以應對天氣或事故等諸多挑戰。因此，我們投入了大量資金進行快速改造——使用一些外部服務在機械方面和工程方面快速改造我們的網路。我希望這些事情開始真正安定下來。保羅和我，這就是我們的重點，甚至是技術支出，我們一直在使用更多的軟體即服務——基於雲端的服務，這些服務出現在購買的服務中，而不是資本支出中。因此，這給我們的外購服務帶來了壓力。但我們必須再次嘗試限制這種成長。

And I will mention that can't discount inflation. Inflation in 2023 was well over 4% in our cost structure. As we go into 2024, I expect to see inflation maybe be half of that impact. So that's going to be another area of tailwind. So thanks for the question, David.

我要提到的是，這不能抵消通貨膨脹。在我們的成本結構中，2023 年的通貨膨脹率遠超過 4%。當我們進入 2024 年時，我預計通膨可能是其中一半的影響。所以這將是另一個順風的領域。謝謝你的提問，大衛。

That's helpful. And maybe just to squeeze one in here. On the CSR purchase. Obviously, you're going to be adding depreciation on the rent side. Is there any sort of like net benefit of owning that property versus just renting? Or is this just more about avoiding future lease payments?

這很有幫助。也許只是為了在這裡擠一個。關於CSR購買。顯然，您將在租金方面增加折舊。擁有該房產與僅僅租房相比是否有任何類似的淨收益？或者這更多的是為了避免未來的租賃付款？

Yes. Look, I think the biggest issue is these costs could have quickly run away from us upon lease renewal. We did not control what the lease rate was going to be and we knew that would go to arbitration, and it could be a significant multiple of where we were. So it's really a benefit when you think about what it could be on the go forward, overall. There is some above-the-line benefits that we have in our depreciation today that lessen as well as the rent payment that goes away. But again, the interest burden and a pause on share repurchase provides a temporary hurdle for us.

是的。聽著，我認為最大的問題是這些費用可能會在續租時很快就從我們身邊消失。我們無法控制租賃費率，我們知道這將進入仲裁，而且可能是我們當時水準的幾倍。因此，當您考慮未來可能會發生什麼時，總體而言，這確實是一個好處。今天的折舊減少了我們的一些線外好處，而且租金也消失了。但同樣，利息負擔和股票回購的暫停給我們帶來了暫時的障礙。

All right. We've got it wrong. We've got another question before we wrap up here.

好的。我們搞錯了。在結束之前我們還有另一個問題。

Our next question comes from the line of Walter Spracklin with RBC Capital Markets.

我們的下一個問題來自加拿大皇家銀行資本市場部的 Walter Spracklin。

So Alan, I just want to understand, again, at the end of the day here, you're talking about top tier volume growth at industry competitive margins. And when I look at industry competitive margins, say, consensus estimates for next year, it's in 60% to 61% range of OR for each of the -- each of your peers. And even if they do nothing and they don't move in their OR at all, and I just take the midpoint of your 100, 150, I mean that's 6 years before you can get to industry competitive margins. So is that what we're communicating here? Is that the setup? Or we just look -- am I looking at it the wrong way? Maybe you can help me there.

所以艾倫，我只想再次了解一下，您所說的是行業競爭利潤率下的頂級銷售成長。當我查看行業競爭利潤時，比如說，明年的共識估計，每個同行的 OR 範圍都在 60% 到 61% 之間。即使他們什麼都不做，也根本沒有改變他們的手術室，我只是取你的 100、150 的中點，我的意思是，你需要 6 年才能獲得具有行業競爭力的利潤。這就是我們在這裡交流的內容嗎？是這樣設定的嗎？或者我們只是看──我看問題的方式是錯的嗎？也許你可以在那裡幫助我。

That's -- we've given you a road map for the next 3 years on how we're going to narrow the gap with our peers with respect to margin. Our commitment is industry competitive margins. We've given you an outline of where we're headed based on where we see markets, if there's more lift in the freight market, then I fully expect that we're going to outperform because our investments in safety and service and our ability to attract growth in the fastest-growing markets, in the most service-sensitive markets are going to yield outsized benefits to Norfolk Southern and our shareholders during an up cycle. But we're not calling that yet.

也就是說，我們已經為您提供了未來 3 年的路線圖，說明我們將如何縮小與同業在利潤方面的差距。我們的承諾是具有產業競爭力的利潤。我們已經根據我們對市場的看法，向您概述了我們的發展方向，如果貨運市場有更多的提升，那麼我完全預計我們將表現出色，因為我們在安全和服務方面的投資以及我們的能力為了吸引成長最快的市場的成長，在服務最敏感的市場中，諾福克南方航空和我們的股東將在上升週期中獲得巨大的利益。但我們還沒有這麼稱呼。

Our final question this morning comes from the line of Bascome Majors with Susquehanna International Group.

今天早上我們的最後一個問題來自巴斯克梅專業與薩斯奎哈納國際集團的聯繫。

Mark, you've been candid about the lumpy legal outflows and the insurance inflows on the cash flow front you're going to see from the Eastern Ohio incident and how that's going to be with you for some time here. But as we think about the cost structure, can you talk a little more about the ongoing operating cost increases that came from that, and how fully burdened what we saw in the fourth quarter was for that, and what may still be ahead? And I'm thinking things like insurance premiums or depreciation or say, maintenance or testing contracts but really anything you can share on the ongoing cost increase and how far along we are in that process, would be really helpful.

馬克，你對俄亥俄州東部事件中你將看到的現金流方面的法律資金流出和保險資金流入以及這將如何影響你一段時間持坦率態度。但當我們考慮成本結構時，您能否多談談由此帶來的持續營運成本增加，以及我們在第四季度看到的負擔有多大，以及未來可能會發生什麼？我在想諸如保險費或折舊之類的事情，或者說，維護或測試合同，但實際上，您可以分享的有關持續成本增加以及我們在此過程中進展情況的任何信息都會非常有幫助。

So I'm interpreting the question beyond the East Palestine specific impacts that we reported and kind of the after-effects of it that are in the operating results. And I'll ask Paul to help. But clearly, there were impacts that consequential from East Palestine where we accelerated those train makeup rule changes that certainly had an impact in the second quarter and probably going into the third quarter. I think we've ingested that now. And that's no longer really providing any adverse impact.

因此，我對這個問題的解釋超出了我們報告的東巴勒斯坦具體影響以及其在營運結果中的後果。我會請保羅幫忙。但顯然，東巴勒斯坦產生了相應的影響，我們加快了火車組成規則的變化，這肯定會在第二季產生影響，並可能持續到第三季。我想我們現在已經接受了這一點。這不再真正帶來任何不利影響。

We have installed more additional wayside detectors that we're carrying. We're doing more testing. We've got some more people monitoring our wayside deaths, et cetera. I wouldn't say that the incremental direct safety costs that come out of EP are consequential. And frankly, I think, ultimately, they're going to yield to better results in the go forward because we are running a safer railroad, we're having much better derailment experience in terms of less frequency as a result of some of the operational changes, including the makeup rules, have had. So overall, there's probably some -- for sure, some lingering incremental costs because we're doing things different but there will be a benefit longer term.

我們已經安裝了更多我們攜帶的路邊探測器。我們正在做更多測試。我們還有更多的人在監視我們的路邊死亡事件等等。我不會說 EP 帶來的增量直接安全成本是必然的。坦白說，我認為，最終，他們將在未來取得更好的結果，因為我們正在運營一條更安全的鐵路，由於一些運營方面的原因，我們在減少脫軌頻率方面擁有更好的脫軌體驗。包括化妝規則在內的變化已經發生。所以總的來說，可能會有一些——當然，一些揮之不去的增量成本，因為我們正在做不同的事情，但從長遠來看會有好處。

Paul, do you want to add anything?

保羅，你想補充什麼嗎？

Yes. I'll just add. Thanks, Mark. The proof is in the pudding that we saw a 42% reduction in our mainline accident rate this year. So as Alan described, part of our strategy has been to safely deliver reliable and resilient service, and 2023 was a challenging year for us but those are the types of things that are going to move the needle in driving towards we have a safer, more resilient product on the railroad. So yes, there are going to be some of those costs, as Mark just outlined very well that remain embedded with the offset being we're going to see and deliver a safer product for our customers and through the communities that we serve.

是的。我就補充一下。謝謝，馬克。布丁就是證據，今年我們的幹線事故率下降了 42%。因此，正如艾倫所描述的，我們策略的一部分是安全地提供可靠和有彈性的服務，2023 年對我們來說是充滿挑戰的一年，但這些類型的事情將推動我們擁有一個更安全、更安全的環境鐵路上的彈性產品。所以，是的，其中會有一些成本，正如馬克剛才很好地概述的那樣，這些成本仍然嵌入在抵消中，我們將看到並透過我們服務的社群為我們的客戶提供更安全的產品。

Thank you. Ladies and gentlemen, this concludes our question-and-answer session. I'll turn the floor back to Mr. Shaw for final comments.

謝謝。女士們先生們，我們的問答環節到此結束。我將把最後的意見轉回給肖先生。

Thank you for joining us today.

感謝您今天加入我們。

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.

謝謝。今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與。