Canadian National Railway Company · TSX:CNR
Canadian National Railway — Q2 2016 Earnings Presentation
17 slides from Canadian National Railway's earnings presentation, Jul 25, 2016
Slide 1: Second Quarter 2016 Financial Results
Second Quarter 2016 Financial Results July 25, 2016
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements included in this presentation constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and under Canadian securities laws. By their nature, forward-looking statements involve risks,
Slide 3: Luc Jobin, President and Chief Executive Officer
Luc Jobin President and Chief Executive Officer
Slide 4: Q2 Highlights
Q2 Highlights Improving margins in spite of challenging top line environment − Strong discipline in realigning resources to reduced freight demand − Record Q2 operating ratio of 54.5% Balancing Operational and Service Excellence − Pursuing opportunities for cost efficiencies across all functions, wh
Slide 5: Mike Cory, Executive VP and Chief Operating Officer
Mike Cory Executive VP and Chief Operating Officer
Slide 6: Q2 Operating Highlights
Q2 Operating Highlights Train Productivity Yard Productivity Terminal Dwell (GTMs per train mile) (Cars per yard switching hour) (Entire railroad, hours) 9,331 14.6 8,712 51 48 13.6 7% 6% 7% Q2-15 Q2-16 Q2-15 Q2-16 Q2-15 Q2-16 Locomotive Utilization Car Velocity Train Velocity (Trailing GTMs per tot
Slide 7: Operational and Service Excellence
Operational and Service Excellence Safety always first − Strong safety performance − Development of people Continued focus on cost management − Locomotives, cars, people − Team work and accountability Leverage CN’s superior service − Car order fulfillment consistently in the high 90% range − Ready f
Slide 8: JJ Ruest, Executive VP and Chief Marketing Officer
JJ Ruest Executive VP and Chief Marketing Officer
Slide 9: Q2 Top Line Performance
Q2 Top Line Performance Volumes % of Total % change – favorable (unfavorable) Revenues (2) Bulk (12%) Carloads 15% Revenues (9%) Grain & Fertilizers (12%) RTMs Coal (30%) 3% (31%) Carloads (12%) Merchandise $ / Carload 2% Petroleum & Chemicals (11%) 17% (23%) (2%) RTMs (11%) Forest Products 16% 3% (
Slide 10: Outlook
Outlook Intermodal Merchandise Bulk • International • U.S. housing starts drive growth in • Positive outlook for Canadian grain − Volumes remain challenging in H2 lumber and other housing-related goods − Bumper crop ahead, shipments − Sequential improvements at Rupert may start a month early − Capac
Slide 11: Ghislain Houle, Executive VP and Chief Financial Officer
Ghislain Houle Executive VP and Chief Financial Officer
Slide 12: Q2 Results
Q2 Results Change Favorable In millions of Canadian dollars, except EPS data, unless otherwise indicated 2016 2015 (Unfavorable) Revenues $ 2,842 $ 3,125 (9%) Operating expenses 1,549 1,763 Operating income 1,293 1,362 (5%) Interest expense (116) (105) Other income (1) 16 Income before income taxes
Slide 13: Q2 Operating Expenses
Q2 Operating Expenses % Change at % constant Change currency (1) Favorable Favorable In millions of Canadian dollars, unless otherwise indicated 2016 2015 (Unfavorable) (Unfavorable) Labor and fringe benefits $ 469 $ 542 13% 15% Purchased services and material 377 434 13% 15% Fuel 243 327 26% 29% De
Slide 14: YTD Free Cash Flow
YTD Free Cash Flow In millions of Canadian dollars, unless otherwise indicated 2016 Net income $ 1,650 Non-cash adjustments 929 Payments for income taxes (398) Other working capital items 155 Net cash provided by operating activities 2,336 Capital expenditures (net) (1,139) Other investing activitie
Slide 15: 2016 Financial Outlook
2016 Financial Outlook CN aims to deliver earnings in line with 2015 adjusted diluted EPS of C$4.44 (1) − Carloads expected to be lower than last year in the mid-single- digit range, with pricing staying above inflation Continuing to reinvest in the business for safety and efficiency − Capital envel
Slide 16: Luc Jobin, President and Chief Executive Officer
Luc Jobin President and Chief Executive Officer
Slide 17: The Journey Continues
The Journey Continues - Seamless transition to new executive team - Solid bench strength - Relentless focus on controlling costs and driving productivity - Maintaining industry-leading efficiency - Leveraging a great franchise and a well-diversified portfolio - Creating value for our customers throu
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