John P. Lanigan, Jr.: Yes, particularly with the increased corn plantings.

John Larkin (Stifel Nicolaus): Where does that show up in your numbers?

John P. Lanigan, Jr.: It is in the Ag numbers. We captured all the fertilizers and the Ag numbers.

John Larkin (Stifel Nicolaus): Is that business y as profitable as the grain business itself?

Matthew K. Rose: Depends on what type of the grain business, some of it is more profitable because of the risk, the issue that we have of hauling some of those materials and then there is a plethora of different values that we get off of our grain business.

John Larkin (Stifel Nicolaus): What do you think the chances are that some of the recommendations of the Surface Transportation Commission at least get implemented over the next couple of years?

Matthew K. Rose: We gave the Congress the blue print specifically on some restructuring of the DOT and restructuring of the programs, there is a 110 federal programs out there and we narrowed it down to 10. What we did from a rail standpoint is that we had talked about the need for regulatory policies, labor policies that are pro-rail growth. Getting those things in front of people are important and there are some politically charged issues like gas tax increases that are going to be hard for the members of Congress to pass. It also helps for them to be able to point to an independent commission that across the board generally agreed that gas taxes need to go up to fund this infrastructure, and we gave them a lot reasons of why they need to do it. Whether they do it, probably is going to be this year, but as next T-Bill is being drafted hopefully we will start to see some of those recommendations we put into that.

David Feinberg (Goldman Sachs): The total dollar amount of expansionary CapEx is going to be the smallest amount that you have invested since 2004. Have you reached a point where Burlington Northern has completed the bulk of its expansion and capital projects or is the reduction year-over-year more a factor of your outlook for volume outlook and which of the projects you are going to invest less in, in 2008?

Matthew K. Rose: If you take a look out of ten year, you will see us where we got down to as low as $50 million or $75 million of expansion capacity. We know how to go low in expansion capacity. This team has done that before, we know how to go high, and we have had a high of almost $800 million. It is just the network is always going to flex up and down on two issues. One is what we see the sustainable growth that is coming on to the network and what the current capacity will allow us to do and then two, whether or not the returns will justify those investments. We are bullish long-term, all of these businesses will continue to grow, but we have got the capacity now by better velocity as well as the investments we put in to be able to handle that growth. We have always said, double-digit type returns, we will continue to invest in as long as we see the need for it. Right now, with the growth that we saw last year and what we are projecting this year, we will take less amount of expansion capacity that we are going to put in, but you still have to realize that several $100 million is still lot of money to put on a network to expand the railroad and if you look at it historically, these are still significant investments that we are making.

David Feinberg (Goldman Sachs): You have made the comment earlier that if you see a pick up in U.S. GDP growth in the second half of the year, you could see an outsize growth in terms of freight volumes in the U.S. Is the opposite true?

Matthew K. Rose: No, people are always asking us, are we in a recession as this thing getting worse? We are not the people to ask that. We can tell you how the network is reflected by the volumes and right now, our network and when we look at each of our commodities; it does not represent a core recession. If you define a recession by being negative 4%, 5% type of negative growth. That is not what we seeing at all. We are not saying that we are not headed towards a recession, we do not know that but right now our volumes do not represent that at all, but if we started to see negative 4% or 5% type GDP growth, you would see fewer gross ton miles on a highway and fewer gross ton miles in the railroad industry.

Walter Spracklin (RBC Capital Markets): The other Canadian companies have had some hiccups with their labor negotiation. Can you talk about any upcoming negotiations in 2008 and what are your thoughts going into those?

John P. Lanigan, Jr.: We have got two unions left. Assuming the UTU ratifies, we have got one smaller workgroup, but that is labor peace for us through 2010 and then we will began this process again in 209. We conclude the five year retroactive for three years past and then a year after we conclude, we usually start again. From our standpoint, everything is put to bed in 2008 and 2009.

Walter Spracklin (RBC Capital Markets): How you are looking at your share buyback, any big changes foreseen in that or in your dividend pay-off strategy?

Matthew K. Rose: For 2-08 it is more of the same and that is we are continually measuring our capability based upon our cash flow in relation to debt and cash flow in relation to interest and last year we bought back 40 million shares, spent between $1.1 billion and $1.2 billion. Based upon the cash flow we see generating that is comparable. In dividend, we always discuss and evaluate with the Board mid-year, we have that up to July meeting, and we will do the same. I do not expect that we will see any dramatic difference in what we have done over the past four or five years.

Walter Spracklin (RBC Capital Markets): On the fuel surcharge, participation rate is going up. Can you quantify the level of participation you are at right now versus where you were on a comparable basis same time last year?

John P. Lanigan, Jr.: We are up four to five basis points over last year. We have got over 90% of our customers with some form of fuel surcharge, either a direct fuel surcharge program or RCAP fuel.

Walter Spracklin (RBC Capital Markets): You are assuming a soft landing, may be a pick-up in the back half of 2008. Is that a fair characterization of how you are seeing the economic growth outlook for 2008 on a macro level?

Matthew K. Rose: Yes, it is fair. We are not saying that it is going to be a soft landing or not, we are expecting stronger volumes in the second half because of the year-over-year comps get released here. We expect the good reads with forecast trans-Pacific trade to be in that 4% to 5% range, we are expecting again about 4% to 5% of coal growth, should have a better Ag year, when the housing market bottoms and when you start to see bottom on lumber and all those things, we are not stating anything on that stuff.

Walter Spracklin (RBC Capital Markets): On the trans-Pacific trade, you are down 15% this year on that decision of the customer. Given the back half, you are seeing more of a general 4% to 5% run rate given all the long-term factors minus that customer, about a 4% to 5% growth in that line of business in the second half. Is that a fair assessment?