Canadian National Railway Company · TSX:CNR
Canadian National Railway — Q3 2015 Earnings Presentation
16 slides from Canadian National Railway's earnings presentation, Oct 27, 2015
Slide 1: Third Quarter 2015 Financial Results
Third Quarter 2015 Financial Results October 27, 2015
Slide 2: Forward-Looking Statements
Forward-Looking Statements The financial results in this presentation were determined on the basis of U.S. GAAP. Important risk factors that could affect the forward-looking statements include, but Please refer to the website www.cn.ca/nonGAAP for the reconciliation of certain non- are not limited t
Slide 3: Luc Jobin
Luc Jobin Executive VP and Chief Financial Officer
Slide 4: Q3 Highlights
Q3 Highlights Managing through the weaker volume environment • Leveraging our franchise diversity • Quickly recalibrating resources to drive efficiency Balancing Operational and Service Excellence • Maintaining end-to-end supply chain focus • Record operating ratio of 53.8% Strong financial results
Slide 5: Jim Vena
Jim Vena Executive VP & Chief Operating Officer
Slide 6: Q3 Operating Highlights
Q3 Operating Highlights Train Productivity Yard Productivity Terminal Dwell (GTMs per train mile) (Cars per yard switching hour) (Entire railroad, hours) 8,829 50 16.0 8,635 46 14.2 2% 9% 11% Locomotive Utilization Car Velocity Train Velocity (Trailing GTMs per total horsepower) (Car miles per day)
Slide 7: Maintaining Industry Leading Efficiency
Maintaining Industry Leading Efficiency Culture of execution • Data driven front-line decision making • Keeping safety as the top priority Intense focus on asset utilization • Locomotives, railcars, people • Zeroing-in on both the detail and the overall network Maintaining Operational and Service Ex
Slide 8: JJ Ruest
JJ Ruest Executive VP & Chief Marketing Officer
Slide 9: Q3 Top Line Performance
Q3 Top Line Performance Volumes % change – favorable (unfavorable) Carloads Revenues 3% RTMs Bulk (7%) Carloads -6% Grain & Fertilizers (6%) (10%) $ / Carload 9% Coal (22%) Merchandise RTMs -6% (4%) Petroleum & Chemicals (8%) ¢ / RTM 10% Forest Products Flat 1% (25%) Metals & Minerals (16%) 2% Autom
Slide 10: Outlook
Outlook Bulk Merchandise Intermodal • Canadian grain crop below 5-year • Lumber and panels driven by U.S. • International traffic remains strong average housing starts, CN large railcar fleet − New vessel calls in Prince Rupert − Impacting 2016 carloads and expired softwood lumber tax (Maersk) and H
Slide 11: Luc Jobin
Luc Jobin Executive VP and Chief Financial Officer
Slide 12: Q3 Results
Q3 Results Change Favorable In millions of Canadian dollars, except EPS data, unless otherwise indicated 2015 2014 (Unfavorable) Revenues $ 3,222 $ 3,118 3% Operating expenses 1,735 1,832 Operating income 1,487 1,286 16% Interest expense (111) (94) Other income 11 (2) Income before income taxes 1,38
Slide 13: Q3 Operating Expenses
Q3 Operating Expenses % Change at % constant Change currency (1) Favorable Favorable In millions of Canadian dollars, unless otherwise indicated 2015 2014 (Unfavorable) (Unfavorable) Labor and fringe benefits $ 588 $ 580 (1%) 6% Purchased services and material 401 378 (6%) 3% Fuel 293 446 34% 45% De
Slide 14: YTD Free Cash Flow
YTD Free Cash Flow In millions of Canadian dollars, unless otherwise indicated 2015 Net income $ 2,597 Non-cash adjustments 1,231 Payments for income taxes (581) Other working capital items 600 Net cash provided by operating activities 3,847 Capital expenditures (net) (2,064) Other investing (102) N
Slide 15: Affirming 2015 Financial Outlook
Affirming 2015 Financial Outlook Double-digit earnings growth over 2014 adjusted diluted EPS of C$3.76 (1) • Despite slower growth environment • Disciplined inflation-plus pricing Reinvesting in the business • 2015 capital envelope of C$2.7B • Focusing on the safety, integrity and fluidity of our pl
Slide 16: Looking Ahead
Looking Ahead • Leveraging a great franchise and a well-diversified portfolio • Committed to our agenda of Operational and Service Excellence • On track to achieve full-year guidance Creating value for our customers and shareholders 16 16
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