Canadian National Railway Company · TSX:CNR
Canadian National Railway — Q1 2016 Earnings Presentation
17 slides from Canadian National Railway's earnings presentation, Apr 25, 2016
Slide 1: First Quarter 2016 Financial Results
First Quarter 2016 Financial Results April 25, 2016
Slide 2: Forward-Looking Statements
Forward-Looking Statements The financial results in this presentation were determined on the basis of U.S. GAAP. Forward-looking statements are not guarantees of future performance and involve Please refer to the website www.cn.ca/nonGAAP for the reconciliation of certain non- known and unknown risk
Slide 3: Claude Mongeau, President and Chief Executive Officer
Claude Mongeau President and Chief Executive Officer
Slide 4: Q1 Highlights
Q1 Highlights Responding swiftly to the weaker volume environment − Aligning resources with weaker volumes to drive efficiency − Leveraging the diversity of our franchise Balancing Operational and Service Excellence − Maintaining focus on safety while delivering strong operating performance − Record
Slide 5: Jim Vena, Executive VP and Chief Operating Officer
Jim Vena Executive VP and Chief Operating Officer
Slide 6: Q1 Operating Highlights
Q1 Operating Highlights Train Productivity Yard Productivity Terminal Dwell (GTMs per train mile) (Cars per yard switching hour) (Entire railroad, hours) 8% 9% 15% Locomotive Utilization Car Velocity Train Velocity (Trailing GTMs per total horsepower) (Car miles per day) (mph) 5% 14% 10% A milder wi
Slide 7: Operational and Service Excellence
Operational and Service Excellence SAFETY EFFICIENCY FIRST ACROSS THE BOARD SUPERIOR EXECUTION SERVICE AND FOCUS TEAMWORK AND ACCOUNTABILITY 7
Slide 8: JJ Ruest, Executive VP and Chief Marketing Officer
JJ Ruest Executive VP and Chief Marketing Officer
Slide 9: Q1 Top Line Performance
Q1 Top Line Performance Volumes % change – favorable (unfavorable) Carloads Bulk RTMs Grain & Fertilizers (5%) Revenues (4%) (3%) Coal (31%) Carloads (7%) (47%) Merchandise $ / Carload 3% Petroleum & Chemicals (7%) (17%) RTMs (9%) Forest Products 4% 9% Metals & Minerals (25%) ¢ / RTM 4% (18%) Automo
Slide 10: Outlook
Outlook Intermodal Merchandise Bulk • International • U.S. housing starts driving carload • Canadian grain − Strong volume growth at Halifax growth in lumber, panels and other − Negative volume outlook with − Overall flat volumes on the housing-related goods tougher comps for Q2 and Q3 West Coast −
Slide 11: Luc Jobin, Executive VP and Chief Financial Officer
Luc Jobin Executive VP and Chief Financial Officer
Slide 12: Q1 Results
Q1 Results Change Favorable In millions of Canadian dollars, except EPS data, unless otherwise indicated 2016 2015 (Unfavorable) Revenues $ 2,964 $ 3,098 (4%) Operating expenses 1,747 2,035 Operating income 1,217 1,063 14% Interest expense (123) (104) Other income 5 4 Income before income taxes 1,09
Slide 13: Q1 Operating Expenses
Q1 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 $ 590 $ 668 12% 16% Purchased services and material 408 457 11% 14% Fuel 235 361 35% 40% De
Slide 14: YTD Free Cash Flow
YTD Free Cash Flow In millions of Canadian dollars, unless otherwise indicated 2016 Net income $ 792 Non-cash adjustments 462 Payments for income taxes (236) Other working capital items 47 Net cash provided by operating activities 1,065 Capital expenditures (net) (469) Other investing activities (11
Slide 15: Revised 2016 Financial Outlook
Revised 2016 Financial Outlook CN now aims to deliver earnings in line with 2015 adjusted diluted EPS of C$4.44 (1) − Carloads expected to be lower than last year by 4-5%, with pricing staying above inflation − Higher foreign exchange and fuel price assumptions Continuing to reinvest in the business
Slide 16: Claude Mongeau, President and Chief Executive Officer
Claude Mongeau President and Chief Executive Officer
Slide 17: Wrap-up
Wrap-up - Very solid first quarter results - Revised outlook in line with more challenging environment - Continued investments to drive service and safety improvements Building for the future 17
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