Canadian National Railway Company · TSX:CNR

Canadian National Railway — Q2 2011 Earnings Presentation

19 slides from Canadian National Railway's earnings presentation, Jul 25, 2011

  1. Slide 1: Second Quarter 2011 Financial Results

    Second Quarter 2011 Financial Results July 25, 2011

  2. Slide 2: Forward-Looking Statements

    FORWARD-LOOKING STATEMENTS The financial results in this presentation were determined on the basis of U.S. Important risk factors that could affect the forward-looking statements GAAP. Please refer to the website www.cn.ca for the reconciliation of certain include, but are not limited to, the effect

  3. Slide 3: Claude Mongeau, President and Chief Executive Officer

    Claude Mongeau President and Chief Executive Officer

  4. Slide 4: Q2 2011 Highlights

    Q2 2011 Highlights Revenues of C$2,260M  up 11% at constant currency (1) Operating ratio of 61.3%  Essentially in line with last year Adjusted Diluted EPS of C$1.26 (1)  up 12% from last year YTD Free Cash flow of C$823M (1) Solid results overall (1) Please see website, www.cn.ca/nonGAAP, for an

  5. Slide 5: Keith Creel, Executive Vice-President and Chief Operating Officer

    Keith Creel Executive Vice-President and Chief Operating Officer

  6. Slide 6: Q2 Operating Highlights

    Q2 Operating Highlights GTM’s per train mile Cars per yard switching hour Terminal Dwell (entire railroad, hours) Trailing GTM’s per total Car miles per day Train Speed (mph) horsepower * Excluding EJ&E Performing well despite very challenging environment 6

  7. Slide 7: Maintain Focus on Precision Railroading

    Maintain Focus on Precision Railroading Responded quickly and effectively to floods, fires and mudslides  Traffic backlogs cleared  Network current and fluid Actively engaging in supply chain collaboration initiatives  Approach paying off  Strong customer focus Operational and Service Excellence

  8. Slide 8: Jean-Jacques Ruest, Executive Vice-President and Chief Marketing Officer

    Jean-Jacques Ruest Executive Vice-President and Chief Marketing Officer

  9. Slide 9: Q2 Revenues

    Q2 Revenues % Change at % constant As Reported Change currency(1) In millions of Canadian dollars, unless otherwise indicated Favorable Favorable 2011 2010 (Unfavorable) (Unfavorable) Petroleum and chemicals $ 340 $ 329 3% 8% Metals and minerals 245 210 17% 22% Forest products 317 299 6% 10% Automot

  10. Slide 10: Intermodal

    Intermodal Second Quarter (2011 vs 2010) Revenues (1) 15% RTMs 6% Carloads 10% ¢ / RTM (1) 9% Revenue / car (1) 5% Market Breakdown  Core growth engine for CN  Balanced growth in both import and export International traffic 45% 55%  Domestic retail to benefit from acquisition of Domestic 1,400 ne

  11. Slide 11: Bulk

    Bulk Second Quarter (2011 vs 2010) Revenues (1) 13% RTMs 7% Carloads (4%) ¢ / RTM (1) 6% Revenue / car (1) 18% Commodity Breakdown  Strong offshore demand for Western Canada and PRB coal. Some short-term mine Coal and Pet Coke production challenges. 15% 28% Grain and Grain  Canadian grain crop - e

  12. Slide 12: Manufacturing

    Manufacturing Second Quarter (2011 vs 2010) Revenues (1) 11% RTMs 2% Carloads 5% ¢ / RTM (1) 9% Revenue / car (1) 6% Commodity Breakdown  Continued strength in offshore exports of Petroleum, lumber, wood pulp and wood pellets Chemicals & Sulfur 12% Metals, Minerals  Frac sand and pipe shipments dr

  13. Slide 13: Luc Jobin, Executive Vice-President and Chief Financial Officer

    Luc Jobin Executive Vice-President and Chief Financial Officer

  14. Slide 14: Q2 Results

    Q2 Results Change Favorable In millions of Canadian dollars, except EPS data, unless otherwise indicated 2011 2010 (Unfavorable) Revenues $ 2,260 $ 2,093 8% Operating expenses 1,386 1,280 Operating income 874 813 8% Interest expense (85) (91) Other income 10 14 Income before income taxes 799 736 Inc

  15. Slide 15: Q2 Operating Expenses

    Q2 Operating Expenses % Change at % constant As Reported Change currency(1) In millions of Canadian dollars, unless otherwise indicated Favorable Favorable 2011 2010 (Unfavorable) (Unfavorable) Labor and fringe benefits $ 432 $ 414 (4%) (7%) Purchased services and material 268 250 (7%) (10%) Fuel 35

  16. Slide 16: YTD 2011 Free Cash Flow

    YTD 2011 Free Cash Flow In millions of Canadian dollars, unless otherwise indicated Net income $ 1,206 Non-cash adjustments 370 Payments for income taxes (215) Other working capital items 37 Capital expenditures (net) (597) Proceeds on rail-line sale 299 Other investing (1) 17 Dividends (296) Effect

  17. Slide 17: 2011 Financial Outlook

    2011 Financial Outlook  Continue to leverage the recovery  Pipeline of productivity initiatives  Solid mid-single-digit carload growth  Pricing above inflation  Some headwinds in 2011  Canadian dollar, Depreciation and Fuel  Higher cash taxes  Expecting up to 15% growth over 2010 adjusted di

  18. Slide 18: Claude Mongeau, President and Chief Executive Officer

    Claude Mongeau President and Chief Executive Officer

  19. Slide 19: Delivering on Our Strategic Agenda

    Delivering on Our Strategic Agenda Next level of Precision Railroading Smart Operational Sustainable stakeholder and Service top line engagement growth Excellence Connect with our people 19

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