Operator: Welcome to the CN's First Quarter 2021 Financial and Operating Results Conference Call. I would now like to turn the meeting over to Paul Butcher, the Vice President, Investor Relations. Ladies and gentlemen, Mr. Butcher.

Paul Butcher: Well.

Thank you, Christina. Good afternoon, everyone, and thank you for joining us for CN's first quarter 2021 financial results conference call. I would like to remind you about the comments already made regarding forward-looking statements. With me today is JJ Ruest, our President and Chief Executive Officer; Ghislain Houle, our Executive Vice President and Chief Financial Officer; Rob Reilly, our Executive Vice President and Chief Operating Officer; And Sean Finn, our Executive Vice President, Corporate Services and Chief Legal Officer. I do want to remind you to please limit yourselves to one question so that everyone has the opportunity to participate in the Q&A session.

The IR team will be available after the call for any follow-up questions. It is now my pleasure to turn the call over to CN's President and Chief Executive Officer, JJ Ruest.

JJ Ruest: Well, thank you, Paul, and good afternoon to everyone. I hope you all had a safe, healthy and constructive start to 2021. Here at CN, we're off to a good strong running start.

The underlying performance of CN has been strong. And this is thanks to our dedicated colleague. Our railroaders delivered despite severe winter operating conditions, unprecedented demand and number of markets like port and grain and ongoing challenge during the pandemic. As you can see from Slide 5, CN is on track to become the premier railway of the 21st century. We are focused on our role as an engine of the North American economy growth and prosperity, as well as a supply chain and environmental leader.

We pioneer and we're the first to implement precision schedule railroading across our network, and we are a clear industry leader in ESG. Our strong balance sheet is a testament to operational excellence, and we continue to prudently invest in the business and our strategy as we grow and expand our reach. CN has a long-standing successful track record of strategic and acquisitive acquisition throughout North America, which has resulted in successful integration of our current rail network. In line with our existing strategy, CN made a superior proposal to acquire KCS. This is the right next step for both CN and KCS towards becoming the premier railway of the 21st century.

Turning to Slide 6. We are confident that together with KCS experienced and very talented team, we will be able to continue that success in a combination of CN and KCS to the benefit of both companies. Specifically, this offer will deliver a superior value to KCS shareholders.

Rob Reilly: All right. Thank you, JJ, and thank you to the talented employees of CN who helped deliver a very solid quarter.

Ghislain Houle: Yes, thank you, Rob. My comments will start on Page 16 of the presentation, which will give a bit more color on some of the highlights of our first quarter performance that JJ discussed earlier. During the quarter, we booked non-cash benefit of $137 million to recover part of the charge we recognize on the non-core branch lines we put up for sale in Q2 last year. Recall that in Q1 of 2020, earnings also included an income tax recovery of $141 million, resulting from the CARES Act. Excluding these nonrecurring items adjusted net income was around $870 million, essentially flat, with adjusted diluted EPS of $1.23, up 1% versus last year.

If we adjust for the impact of fuel lag and stronger Canadian dollar, our adjusted EPS would have been up 11% so quite a solid underlying performance.

JJ Ruest: Thank you, Rob and thank you Ghislain Houle and thank you for all of you to joining us today. It's a proactive approach way pro-economic growth merger that we're proposing connecting more sellers and buyers. And I would like to take a moment to reiterate some of the highly compelling aspect of our proposal, like combining with KCS; we would compete head-to-head on all three coasts at lower costs, safer service, and better fuel efficiencies for Mexico through heartland of America. This will result in a safer, faster, cleaner, stronger railway.

In addition, we will bring our leading ESG and operating expertise to KCS business to the benefit of both companies' stakeholders, as mentioned doing our April 20 announcement. Based on our conservative and preliminary analysis of publicly available information, the combined company is expected to achieve EBITDA synergies approaching $1 billion, with the vast majority coming from additional revenue opportunity. The strong cash flow generation of the combined company will allow the company to rapidly delever following the close of this transaction. We anticipate the transaction will be accretive to CN's adjusted diluted earnings per shares in the first full year following termination of the voting trust and CN assuming control of KCS and double-digit accretion of a full realization thereafter. We are confident in the strength of our business and strategies and progressed toward becoming the premier railway of the 21st century.

We look forward to engaging constructively with the KCS board and all relevant stakeholders to deliver the superior transaction with KCS. To deliver greater choice and efficiencies for customers, and deliver enhanced opportunities for employee and local communities. Overall, we have a better bid, better way or better partner, better railway and the best solution for KCS and a North American economy. On that note, we will start to take some questions. Operator?

Operator: And your first question comes from the line of David Vernon with Bernstein.

JJ Ruest: Good afternoon, David. DavidVernon: Good afternoon, guys. So, JJ, I wan to kind of ask this question again a little bit. I know we talked about this when you made the bid. But looking at this transaction, why is now the right time to come in with competing offer here? Like where - like what's changed in the market that makes this such a better deal than might have been two or three or five years ago at a lower price point?
JJRuest: So there's many reasons why now and I covered them those earlier last week.

But the main reason why now is that the Board of KCS obviously after a very thorough thinking have decided it's time for them to crystallize the value for their shareholders. Therefore, they're willing at this point to entertain doing a merger and with a strategic partner or a merger with basically another railroad that -- so the timing of that is also very much dependent whether or not you have a partner with who you could dance. And then from an economy point of view where the beginning of a post economic recovery, the GDP forecast for North America looks very, as good as can be. We had the USMCA, which was renewed, which is also something that has specific value to an top combination. And then depending, who you believe, and although the time of Mexico, this might be the decade of Mexico in terms of new shoring.

Now that there is some challenge between relationship North America and China, but also the fact that, the cost of labor in China has been rising to the point where Mexico might have a better decade. And all that you put that together, the fact that long-term money is affordable. When you put all that together, it says to CN, yes, it's time for you to make a good offer to the KCS Board and for them to consider very seriously. DavidVernon: That's very clear. Maybe if I can just kind of squeeze one little follow-up in here.

As you think about the unique drivers of value, is it more about getting CN rail connections further west, or further south?
JJRuest: So the driver of value here really definitely for us to be successful, we need to create a superior product, a product that can really compete with long haul truck. And on that point, I could ask Rob to comment on that. But right now, the rail network in North America is not really designed to really be as successful as can be for long haul distance from, say, Mexico City all the way to Detroit and Toronto on the East, or Mexico City to Wisconsin and Calgary on the West. In order to do that, putting two railroads together really makes it appealing. You want to make some comment, Rob, about the product that we have in mind?
RobReilly: Yes.

Sure, JJ. David, when you look at it, and as JJ just talked about, with the USMCA contract just finalized here last year, it really needs a strong transportation option. We don't get to Mexico, and certainly the KCS does. And it allows us to really become the true North American railroad really connecting the continent. But we bring a lot of things to the table when we look at it.

When we look at the different industries, the auto industry would get a second line of service between Detroit and Kansas City that would help increase and enhance options. Intermodal service from Mexico to the upper Midwest and Southern Ontario that's actually being trucked today, it's on I-35. It's really about taking it off the highway saving fuel and emissions, really increasing choices for shippers. For farmers in the Midwest, Iowa, Illinois, Wisconsin, Indiana, and others see opportunities to better access the Mexican market. Our reach and port access with - would open the Midwest in KCS shippers to the world, quite frankly, from the Atlantic to the Pacific in the Gulf.

For Canadian aluminum producers, the ability to directly reach markets in Southern U.S. and Mexico. For lumber and panel buyers in Texas, CN's force products franchise gets fully unlocked and allows for further optimization and utilization of our fleet of over 10,000 center beams and boxcars. I could keep going on, but there's a lot of things this combination would bring enhancing choices for shippers and customers. And really being the backbone of USMCA.

JJRuest: Yes, pro-choice, pro-competition, and very much focused on growth. Thank you, David.

Operator: And your next question comes from the line of Scott Group with Wolfe Research. JJRuest: Good afternoon, Scott. ScottGroup: Hey, thanks.

Afternoon, guys. So I'm going to - I want to ask about the operating ratio, just because it does look like this. It'll be worst among the rails this quarter. And I know you talked about maybe a sub 60 OR earlier in the quarter, is that now in this higher guidance? And then longer-term, CP talked about, maybe a low 50s OR pro forma with KCS. How do you think about your OR longer-term on a pro forma basis? And maybe do you see opportunities to leverage some of the success that KCS’ has had with PSR to get your margins back on track?
JJRuest: So maybe I can start and then Ghislain add.

But when we look long-term, we looked at the North American network focusing on the economic trial I was talking about earlier, and significant growth coming from intermodal. So in a world of growth, growth from intermodal, the focus at CN will be very much more EPS than trying to get the lowest OR that one could get, for example, if you move a lot of crude, a lot of coal. Ghislain?
GhislainHoule: Yes. And on that front, JJ, thanks, On EPS, we're quite proud of our results for this quarter. I mean, when you look, our earnings are up 1%, all the other rails are down, including our Canadian competitor, they stated that their earnings was up.

But if you take out the $50 million of one-time land sales, they're actually down 5%. So we're up 1%. And when you look at the underlying fundamentals of the business, as we mentioned, we would be up 11% when we consider the fuel lag, and we consider FX, so quite proud of EPS, and this is what we're focused on.
ScottGroup: Can you just…
JJRuest: Go ahead. ScottGroup: No, sorry to interrupt.

Go ahead. JJ.
JJRuest: As I said, we were focused on EPS. The focus is on EPS, that's what we want to optimize. ScottGroup: Okay.

And Ghislain, can you clarify where the guidance is on OR though?
GhislainHoule: No, I mean, our guidance, as we and we're quite proud, I mean, we upped our guidance, I think that we're quite bullish on the economy coming forward on the markets and we've upped our guidance, as you know, to targeting double-digit EPS growth. And that's what our guidance is with backed up by a mid, high single-digit RTM growth. That's our guidance. Thanks, Scott, thanks for the question. ScottGroup: Thank you.

Operator: Your next question comes from the line of Cherilyn Radbourne with TD Securities. JJRuest: Good afternoon, Cherilyn. CherilynRadbourne: Thanks very much. Good afternoon. I wanted to ask in relation to the increase in guidance for the year and particularly the increase in your volume outlook.

Obviously, intermodal has been very strong. So maybe that's the upside. But we'd love to know if you're starting to see some signs of life in the carload side of the business, which I think would be, helpful from a mix standpoint. Thanks. JJRuest: So Rob, you want to talk about what we expect to move between now and the end of the year?
RobReilly: Yes, so Cherilyn, we actually see some positive movement here, particularly in the second half of the year is really where we see the upside as economy really starts to kick in, we are moving quite a bit of gas, moving out to export through the port of Prince Rupert.

Actually, the second gas terminal just opened up. The Forest Products group has continued to stay strong here, we talked about grain. I think the single, the carload franchise really starts to move in the second half of the year, quite frankly, is what we see the big side in terms of the upside, Cherilyn. JJRuest: Yes, it's pretty broad base, pretty broad base.

Operator: Your next question comes from a line of Tom Wadewitz with UBS.

TomWadewitz: Yes. JJ, thank you for the question here. I wanted to try to get your sense of the kind of negotiation with KSU. And how you address maybe some of the concerns that they potentially would have regarding the regulatory process. So I guess in particular, CP now has visibility with the waiver that they would be able to go to a voting process.

You don't yet have that visibility. And so is that a significant barrier to an agreement with KSU? Are there things that you can do in terms of the negotiation that would address concern that they might have that they reached an agreement with you? But then STB comes back and says no, we're not going to allow you to do a voting trust. JJRuest: Thank you for the question, Tom. So we've only put an offer to KCS, Tuesday of last week, and it's only this morning that we file for the voting trust. So and we fully intend to address every regulatory issue concern that KCS has.

So maybe Sean, maybe you could give a brief briefing and update kind of where we're at in the process of doing these different things. SeanFinn: Sure. Thanks, JJ. Sure, Tom. Happy to do so.

So obviously, Dow signed a nondisclosure agreement with KCS and we have access to the data room, but we're going to start a dialogue in the coming days with them. I think you saw today we filed that the STB a letter setting out our views on the process by which the STB will rule on the voting trust. First of all, secondly, we also filed a petition with our voting trust, which is identical to the other voting trust before the STB was put forward by CP. Our application very simple, we're just asking the STB as they enunciate their process to approve the voting trust that they do both at the same time. So the same track the same standards, and ultimately comes a decision at the same time with respect to both CP's voting trust and our voting trust and we're very confident even working with KCS who obviously be interested in both parties saying their voting trust getting approved, that be adopted a process that is fair, transparent and even handed.

And we're confident that the STB will do that. We've asked them to rule by May 31, which puts us in line to be in a position where both voting trust have been approved of STB prior to the vote by the KCS shareholders sometime in June. So obviously, that dialogue is ongoing; we will be able to show no doubt with the KCS that when it comes to the voting trust, our position is identical to CP's. And hopefully, we're very confident that the STB will rule on both at the same time, we think that's the best approach to have an even level playing field for everybody. And ultimately, at this stage, as you know the standards for the voting trust is public interest, it does not go to the competitive issues.

But again, our transaction is pro competitive, where we have new choices, additional choices for customers in the US and across the network. And we're very confident that we'll get to voting interest to be approved with STB in early June, late May. TomWadewitz: Do you need an agreement first for them to review it or not an agreement with KSU or not necessarily. SeanFinn: No, not, we filed -- we opened our proceeding last week and we follow the voting interest and it's not required that you have a final agreements signed before they approve the voting interest.

Operator: Your next question comes from a line of Allison Landry with Credit Suisse.

AllisonLandry: Good afternoon. Maybe just following up on Tom's question. I mean, there seems to be some disparity between CN's view about what the public interest standard actually means. Specifically for the voting trust, compared with how CP is outlining their view of the public interest standard. So maybe if you could just sort of walk us through how you understand the STB language, what you think it means? I mean, basically CP is trying to or is arguing that, competition is something that will be considered, I think what CN saying it's more about, financial fitness and the divestiture of the asset, so hoping that you could provide some clarity on your view on what the public interest standard means, specifically for the voting trust.

Thank you. JJRuest: Sean, you want to talk to these technical points?
SeanFinn: Sure. I am very happy to. Well, first of all, I get Allison, our position is that our bid is pro competitive, will create choices for customers, and therefore it doesn't have competition. I also want to comment, our view is there are no insolvable regulatory problems.

I mean, there's a history of these issues that are raised in the context of an STB application is being mitigated and worked out with, obviously, the customers through the STB process. The standard with respect to the voting trust is very clear. And our trust is exactly the same as CP as a public interest standard, but it focuses on the risk of financial harm of the applicant carriers. And that goes through if that for some reason, a transaction would have to be approved that both carriers in our case, KCS and CN will remain financially viable at the post the transaction, if you have to unwind the voting trust and we're very confident both companies are extremely viable would not have an issue post the voting trust, if it were not to be approved, ensuring that there's no improper control of KCS. And it is clear both in our and our voting trust that there is no control by CN.

The trustee being Dave Starling is an independent trustee, with the great experience when it comes to both the rail industry but also KCS specifically, and we were able to welcome his independence as trustee. And therefore, we are very confident that the public standards test that must be met at this stage will be analyzed by the STB. And again, the issue will be and we're asking this to be to do is apply the same standards and the same criteria and the same timeframe for both voting trusts. So we're confident that when the STB receives both applicants detailed submission on the public interest that they will come to the view that in our case, we made the public interest trust and our voting trust will be approved by the STB.

Operator: Your next question comes from line of a Ken Hoexter with Bank of America.

KenHoexter: Hey, great, good afternoon JJ, Robin, Ghislain and team. Looking at the cost side of the 66 OR again, cost on near term on employees relatively to your -- the flat performance in the quarter. How do you think you ramp as volumes ramp through the year and your thoughts on costs and I guess maybe long term your thoughts on synergies you mentioned kind of top line versus the cost side as well. Thanks. JJRuest: Thank you, Ken.

So maybe I can start and then Rob can add in. So the month of February was a bit of an expensive month for the railroad, some of the polar vortex. We talked about yield same store price of 4.2%. So that's a good trend. We like that numbers.

And the volume ahead of us is obviously positive and constructive, just like the economy. And when you look at all the series of KPI that Rob is going to during the presentation on the operation side, we've made progress just about on all fronts, if not all front. So I mean we are with that in light, things looks, it looks positive for the rest of the year. Rob, I don't know if you want to add to --
RobReilly: Yes, Ken on, if you just look at our operations team, so what it takes to move the freight out there in the first quarter, our operations headcount, even though I said volume was up 6%. Our headcount was down 6%.

And operations roughly about 800 people less to move that freight. As I mentioned, our labor productivity was up 9%. When we look at it, as we came out of the COVID, depth of second quarter, last year, into the third quarter, we didn't bring all of our resources back on a one-to-one basis. And we've been able to maintain that here through the second half of last year. And then certainly in the first quarter this year.

As you look at the second quarter, this year versus last year, of course, we're going in a different direction, we're seeing growth versus the big downturn we saw, really, at the end of April, in May, is where it started to trough on us. So we weren't doing any hiring last year in the second quarter at all. That all stopped as soon as COVID set in. And we made, as you recall, we had a lot of people furloughed to the contrary, we're actually hiring. We're actually hiring conductors right now getting ready for the second half of this year.

So we're preparing we're optimistic about the second half of this year in terms of the volume. And that's really where our focuses are preparing to move that. GhislainHoule: And maybe, JJ, I can add, if you're looking Kenn at the labor costs of Q1 being higher. That's all major variances incentive compensation, because the Rob's point, our average number of employees in the quarter were down 3%.

Operator: Your next question comes from line of Brian Ossenbeck with JPMorgan.

BrianOssenbeck: Hey, good afternoon. Thanks for taking the question. Just a quick one on the end markets. Can you just remind us what impact you think you'll see from the ELD mandate when it becomes effective in Canada mid this year? We have heard some concerns about the availability of devices being certified. Is that really something that you're focused on having impact on some of your end markets that overlap with trucking?
JJRuest: So maybe I can pick this one up.

Most trucking firm in Canada will do cross borders have to have the equipment already, because that's what is a legal require in United States. So then you're left with only the fleet that's only running in Canada that has to meet that mandate by mid year. So the impact is I would say I would qualify as slightly positive. Because already a good portion of the fleet had to be converted, because a number of equipment move cross border, so the impact is a slight positive. But I think it's coming up at a time when the economy is going to be strong.

So really, the economy is going to be a bigger factor than ELD implementation.

Operator: Your next question comes from line of Jason Seidl with Cowen. JasonSeidl: Hey, JJ and team. Thanks for taking my question. I want to talk on any of the customer overlap that may exist.

And maybe you could walk us through some of your options on how to sort of placate the STB and the customers going forward with the deal. JJRuest: So the overlap is well known is between Baton Rouge and New Orleans where both CN and KCS have a parallel line. And, we know the detail of that, and we think we can definitely solve that, as Sean said earlier, to the one problem, but none of them are unsolvable, then we'll resolve them. And I don't know, Rob, you want to add other little color over that?
RobReilly: Yes, I think you hit it. The overlap, just like we said on Tuesday, is really between Baton Rouge and New Orleans, where we do have a few customers that their options will go from two to one.

We knew that going in and we said that in again, that represents less than 1% of the combined railroads network. So we will remedy it. There's a number of things you can do with that including divestiture of the line but we'll cross that bridge when the time comes, but we will handle it, other places that are out there that have been mentioned. I'll just go through them real quick. Jackson, Mississippi, there's

no 2:1.

E St. Louis.

No 2:1, Springfield, Illinois,

no 2:1, Council Bluffs,

no 2:1, Mobile, Alabama,

no 2:1. In fact, the port of mobile, Alabama has sent in their support for our proposed merger. So they get it.

If for some reason there is another issue out there, we'll work with our customers to remedy that as we always have. And, as JJ said, it's important to note that in a little over three business days, over 500 letters of support, that's significant in terms of what we're seeing out there. Thanks for the question. JJRuest: Hopefully, this help clarify, everything has been said on this in the last week. So thank you for the question, Jason.

Next question?

Operator: Your next question comes from line of Justin Long with Stephens. JustinLong: Thanks, good afternoon. I wanted to ask about the 75 locomotive orders that you mentioned. I think you got approval for that from the board. Any color you can give on the expected timing of those units and when they should be delivered? And is this an order that's contingent on the merger being approved? Or is this predicated on just the stand alone business and the growth you're expecting?
JJRuest: So maybe I'll pass it on to Rob.

But just to clarify the approval of the board for the green fleet expansion, and the locomotive fleet expansion took place before we made the offer through KCS. Rob?
RobReilly: That's exactly right; it had nothing to do with the merger and does not have anything to do with the merger. It's really based on growth and growth prospects we see over the next 12 to 24 months, in terms of timing, we expect to get, roughly 25 of those here in the second half of this year, the other 50, the first half of next year, there could be some variability of volumes bigger than that we could pull some of those forward. But that's about what we look like in terms of the timing. JJRuest: Yes.

So we're not losing our focus at all on Canadian grain and Canadian farmers. We're making a major capital investment over three years adding renewing 3,500 new low cube, high capacity hopper cars, and the 75 locomotive, we got some flexibility about when we take them. And that's basically our commitment that as we see growth coming, we want to be prepared for it. We want to be able to move the economy and do our part for to enable the recovery post COVID.

Operator: Your next question comes from line of Chris Wetherbee with Citi.

ChrisWetherbee: Hey, guys, thanks for taking the question. I guess maybe a couple of things here. First, just on the voting trusts when you think about sort of the similar approaches that you'd like the STB to take review both of them. I guess I'm trying to make sure I understand that relative to the desire to have your yield reviewed by the new merger rules as opposed this are seeking the waiver, there is a reason why maybe the same rules make sense for the trust as opposed to potentially the deal. And then, in terms of what ultimately kind of becomes the industry ultimately shapes how would you expect something to, the downstream effects to look if you were to be able to acquire case, do you think this triggers something else in the future? Do you think this is sort of one and done? And this is it.

JJRuest: So thank you, Chris. That's a question often asked. So we will refer to our expert here, Sean, to cover that. SeanFinn: Thanks, Chris, on the question of the waiver. Maybe what you're asking about but be specific, no, we believe we can close the transaction on new rules or old rules.

So for some reason, the STB were to rule but we've taken the position from the outset that, we find -- we think that this transaction should be reviewed of the new rules, first of all, secondly, it does provide and obviously, our 500 or more support letters are recognized the fact that CN has taken the position that we are confident that under the new rules, we can get this transaction approved and closed. And when it comes to evaluating the voting trust, again, we're the view that clearly in our submission, what we said is that we want the same standards apply and the same timeline and the public interest test for the approval of the voting trust. Our submission is that it is the same for both voting trusts, leading that to ask the STB to rule both at the same time, and hopefully adopting a process which will allow us to even level playing field excuse me, which is fair, transparent and even handed. So obviously, our position is that when it comes to the voting trust, our regulatory assessment is identical to CP when it comes to getting it approved as a vehicle to use to move on to the next level of this transaction. JJRuest: So I hope this help.

Go ahead. ChrisWetherbee: Is that downstream effects? What do you think about that?
JJRuest: Well, I think that's something that will be obviously assessed by the board based on the new rules on the overall transaction. And we'll address those as they come through. But again, our capability of demonstrating it is pro-competitive, that has Rob clearly explained that there's no -- there has competition, and there's not -- there are areas where we have to address with mitigation, but we remain confident that on the new rules, we can get this transaction approved and closed.

Operator: And your next question comes from the line of Jon Chappell with Evercore ISI.

JonChappell: Good afternoon. Hi, JJ. I want to ask about the impact of what's going on in the port of Montreal right now. Obviously, this one was a little bit more expected. And it sounded like there was business already shifting to Halifax.

How was your network positioned for the proactive shift in freight? And if you can just remind us what was the impact both from a volume and a cost perspective on the prior strike? And how do you expect it to be similar or different this time around?
JJRuest: So this is the second time in about six months that we have a labor disruption. And the last time it was maybe it caught shippers or importers by surprise, this time, because it was second, it was a second time and this was also they had a specific deadline. So customers saw it coming diversion of freight that would take place many weeks ago. That's no, that's another important aspect. When the disruption took place last year, it was disruptive to our own operation.

So I would say we, there was a new business, but it was also unplanned costs as a result of. So this time, we're organized differently. I'm sure the importer is also organized differently. There's been diversion of freight already to St. John and Halifax, both.

And currently, the federal government is actually looking at potentially having some regulation that may bring either their work stoppage to a close or maybe bring the two party closer together. So all in, it's not a big to do in terms of our second quarter result.

Operator: Your next question comes from the Brandon Oglenski with Barclays. BrandonOglenski: Good afternoon, and thanks for taking my questions. I guess.

JJ or Rob, like it throws a lot of public discussion last week about how your potential combination would be somewhat anti competitive from a rail perspective. And I think it wouldn't be on, just the shared line in Louisiana. So can you give us maybe some more extensive response those comments, especially in relation to underlying agreements, which supposedly could be more challenged going forward?
JJRuest: Well, maybe I'll start. I mean, frankly, our focus, from the beginning has been on KCS. And creating value for their shareholders and their customers as well as CN shareholders.

The combination that we're proposing is really pro competitive, it's really about creating new products, new services to compete harder, there's nothing wrong with competition, competition is good. It brings innovation, bring new services, it helps connect more buyers with more sellers. CN as a bigger network, we can actually connect more destinations. All these gateway will remain open. CN is -- railroad including CN we make good money after changing traffic with another railroad so there's definitely no incentive financially or otherwise, not to make continue to grow the interchange business with all the railroad including the CP at Kansas City.

So a merger that's based on growth is a merger that really is looking for a bigger pie of the overall freight in North America, not to -- we're not looking for a bigger pie, or a bigger size of a small pie. We're looking for a bigger pie. And therefore, interchanging with another railroad as well as a competing much harder with truck with obviously what we created now as a premier railroad for the 21st century focus on the economy ahead, the economy ahead of us is going to be much more related to consumers and to intermodal, or a lot less reliant on thermal coal and crude has been good, good and bad at time and crude is too volatile, to actually do a merger of this size. And so I mean, there's -- our view is always from the beginning. This is pro competition is to create new products.

It's about growth. And it's about creating region for freight shipper to use a rail network. I don't know, Rob you want to add something. RobReilly: Yes, you nailed it. I think you hit on all the key points that just re emphasize, as JJ said, we plan on keeping the gateways open; there's no plans to shut those.

So, as far as your question on the inner line, that's our plan. JJRuest: Yes. And just to add, when you look at the ports, Mobile, New Orleans, Montreal, Quebec City, Halifax, Vancouver, Rupert, Lazaro Cardenas, Veracruz, all these ports, with this combination can really connect to even more inter land market, you could connect St. Louis, Memphis, Kansas City to all three coasts, transatlantic trade to Kansas City, Gulf, South American control to Kansas City, coming from the west as well, you could potentially give an opportunity again for the Lazaro Cardenas to potentially be an option for those who import products in Houston and or export product from Houston, back to Asia, when you look at the map, you're going to look at what it could do to actually enhance the economy and enable something that was put together with a lot of effort USMCA and enable the continent also, to do more trade within itself, you have now the content of a finished vehicle, North America requires the higher content made from North America. So that means more product, more parts moving within the continent, very long haul.

And that's what this combination is all about is to support and enable, the economy ahead, not with no intention of reducing competition or closing gateway.

Operator: Your next question comes from the line up Amit Recruta with Deutsche Bank. UnidentifiedAnalyst: Thank you for letting me asks a question. JJ, I want to ask a previous question slightly a different way if I could, so, bear with me for a second. I mean, you and the team have, obviously done a lot of work offered a compelling proposal, I think that's undeniable.

But at the end of the day, the outcome is quite binary. And what I was hoping you could help us with is, how CNI is impacted by a potential CP KCS merger, both, I guess with respect to the competitive implications for CNI, and then also does an outcome like that necessitate the need for your company, and the CNI board to pursue other acquisition opportunities to counterbalance that competitive implication. JJRuest: So thanks for the question, Amit. So that's really a question for later. It's something we've been talking about, obviously, for the last many, many years as to the so-called end game; our focus really is the opportunity at hand.

The board of KCS has decided that they're willing to partner with another railroad, a strategic partner and CN from the very beginning of when we got privatized, the first thing that we did was made an acquisition early on of the Elanor Central, we had a marketing alliance with KCS. And then early days, we've been focused on what was at the time known as NAFTA. NAFTA has now been renewed with somewhat different labor, a lot of the, what NAFTA attraction was still there today. So that's really the focus that we have. I think, if this doesn't happen, then, we'll see at that point at that time, but there's a lot of value.

And we believe, as Sean was saying earlier, that we can resolve these different issues as they come. And that's what we're focused on right now. But just look at the CN Network the way it is today with three coasts, huge amount of potential, just stand alone. Just remember when we started 25 years ago, the company was no way what it was today, we build it up over 17-18 different acquisitions, big and small, we build it up with organic growth. And that is always be the case.

We are very innovative, very nimble. And we're going to keep doing that. Right now, we're focusing on one specific, the KCS. And being the NAFTA railroad, the USMCA railroad. It doesn't mean that we have -- our future is any different long term, we have a bright future no matter what.

But we think that this is the time to do this one transaction. First time since I joined CN that actually KCS is actually willing to merge with another railroad. So we'll jump on that. SeanFinn: JJ, if I may just want to be clear that I talked about the voting trust before clearly our application. There's no date yet for the KCS shareholder vote.

But our application today, we're looking to have the -- our voting trust approved on the same timeline as CP will interest the same standards in the same criteria, and that'd be done prior to the voting trust for KCS. When I said voting trust by the end of May or June and while presumptuous I'm assuming that's when it could take place. But clearly, I wanted to be clear that we want to ensure that the STB rules on both voting trusts prior to the KCS shareholder vote later this year.
JJRuest: Very important point. Thank you, Sean.

Operator: Your next question comes from line of Benoit Poirier with Desjardins Capital. BenoitPoirier: Yes. Good afternoon, everyone. Obviously, very good color about the voting trust. But now when we look at the data room, could you provide maybe more color about the timing to perform data room analysis? I know it's not your first time.

And I would assume it's more virtual these days. And if you could also provide some color about the timing to my -- make and binding proposal in the finalized, definitive merger agreement. Thank you. JJRuest: Sean, you want to cover that?
SeanFinn: Yes. Benoit Poirier, thank you.

Yes. They said, we've started -- we'll be starting tomorrow, hopefully getting access to the data room. Looking at the material that's in there it is a virtual data room to your question, Benoit. That could take us two weeks, two and a half weeks to get our confirmatory due diligence completed, and therefore allow us to then move to finalizing. We've already tabled a draft merger agreement.

We have one ready to go. So we'll just update it in line with the due diligence and hopefully, we'll be engaging very proactively and very respectfully in the days to come with the KCS team. And we're looking forward to be in a position to have hopefully, a merger agreement, in the next 30 to 40 days.

Operator: Thank you, I would like to turn the meeting back over to Mr. JJ Ruest.

JJ Ruest: Well, thank you for joining us today. Obviously, it's an important time in CN history. As we mentioned earlier, we're proud of our first quarter results, economy ahead of us looks good. The operating metrics are solid, fuel efficiency is good. Very important to us also is our safety performance, much improved on the personnel injuries and train accident.

So a lot of good things that look good for the quarters to come. On the long-term view, obviously, the desire of CN to give reason to the board of KCS to consider a combination with us is very much top of mind. And we're going to be putting a lot of focus and effort onto that in the coming week. So thank you for joining us today and more to come in the weeks and months to come. Thank you.

Operator: You're welcome. The conference has now ended. Please disconnect your lines at this time. And thank you for your participation.