So with that, let me turn the presentation over to Fredrik to review the financials.
Fredrik Eliasson - EVP and CFO: Thank you Oscar. Good morning everyone. Looking at the top line, revenue increased 5% in the fourth quarter as gains in merchandise and intermodal continued to offset the decline in coal. Expenses increased 7% versus last year as increased labor, MS&O, and depreciation cost more than offset favorability in fuel and rents.
Operating income was $813 million, down $2 million versus the prior year.
Looking below the line, interest expense was down $6 million versus last year, driven by modestly low debt levels and favorable interest rates on debt that was refinanced in 2013.
Other income declined $59 million, primarily driven by the cycling of $57 million pre-tax gain on the sale of a nonoperating property in the fourth quarter of 2012.
Income taxes were $248 million in the quarter for an effective tax rate of approximately 37%. Overall, net earnings were $426 million and EPS was $0.42 per share, down from $449 million and $0.44, respectively, from the prior year period. The prior year period has been revised and includes a revenue adjustment, which increased EPS of $0.01 per share, the details of which are disclosed in the quarterly financial report.
As we turn to the next slide, let's briefly discuss how fuel lag impacted the quarter. On a year-over-year basis, the effect of the lag in our fuel surcharge program was $2 million favorable. This reflects $7 million of positive in-quarter lag during the fourth quarter 2013 versus $5 million of positive in-quarter lag for the same period in the prior year. Based on the current forward curve, we would expect the year-over-year fuel lag impact to be roughly flat in the first quarter.
Turning to the next slide, let's review our expenses. Overall expenses increased 7% in the quarter. I will talk about the top three expense items in more detail on the next slide, but let me first briefly speak to the bottom two on this chart.
Depreciation was up 4% to $281 million due to the increase in the net asset base. Looking at 2014, we anticipate depreciation to be up around $10 million on a year-over-year basis in each quarter.
Equipment rent was down 2% to $95 million as efficiency more than offset higher volume related costs.
Now, let's discuss our other expenses starting with labor and fringe on the left. Labor and fringe expense increased 7% or $51 million versus last year on higher incentive compensation, volume related costs associated with the 6.5% increase in gross ton miles, and inflation.
Looking at 2014, we currently expect employment levels to remain roughly flat. In addition, we expect labor inflation to increase around $15 million to $20 million on a year-over-year basis in each quarter. We also expect full-year incentive compensation to no longer be a headwind.
Moving to the right on the slide, MS&O expense increased 17% or $93 million versus last year, driven by the cycling of $35 million of real estate gains recognized in 2012, as well as $31 million increase in expenses related to higher volume and resource levels.