Canadian National Railway Company · TSX:CNR
Canadian National Railway — Q4 2016 Earnings Presentation
17 slides from Canadian National Railway's earnings presentation, Jan 24, 2017
Slide 1: Fourth Quarter and Full-Year 2016 Financial Results
Fourth Quarter and Full-Year 2016 Financial Results January 24, 2017
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: Highlights
Highlights Outstanding performance in a challenging year Strong results in Q4 − Adjusted diluted EPS of C$1.23, up 4% − Positive momentum on volumes with RTMs up 4% − Solid operational performance despite more difficult winter conditions in December Capping a solid performance in 2016 − Adjusted dil
Slide 5: Mike Cory, Executive VP and Chief Operating Officer
Mike Cory Executive VP and Chief Operating Officer
Slide 6: Operating Highlights
Operating Highlights Industry-leading operating efficiencies Train Productivity Yard Productivity Terminal Dwell (GTMs per train mile) (Cars per yard switching hour) (Entire railroad, hours) 5% 7% 6% 6% 1% 7% 9,449 53 9,314 15.0 51 9,002 50 14.5 14.3 8,739 14.0 48 Q4-15 Q4-16 2015 2016 Q4-15 Q4-16 2
Slide 7: JJ Ruest, Executive VP and Chief Marketing Officer
JJ Ruest Executive VP and Chief Marketing Officer
Slide 8: Q4 Top Line Performance
Q4 Top Line Performance Return to volume growth with strong gains in grain, automotive and metals & minerals Highlights Volumes % of Total % Change – Favorable Revenues (2) (Unfavorable) Bulk 9% Revenues 2% Grain & Fertilizers 17% 20% (12%) Coal (7%) 4% Carloads 3% Merchandise $ / Carload (2%) (1%)
Slide 9: Market Outlook
Market Outlook For 2017, expect RTM growth in the range of 3-4% Intermodal Merchandise Bulk 22% of revenues 48% of revenues 24% of revenues • International • Bullish on finished vehicle traffic • Bumper grain crop in Canada and − Modest improvement in global − Driven by new business first rate servi
Slide 10: Ghislain Houle, Executive VP and Chief Financial Officer
Ghislain Houle Executive VP and Chief Financial Officer
Slide 11: Q4 Results
Q4 Results Strong performance despite difficult winter conditions Change Favorable In millions of Canadian dollars, except EPS data, unless otherwise indicated 2016 2015 (Unfavorable) Revenues $ 3,217 $ 3,166 2% Operating expenses 1,822 1,812 Operating income 1,395 1,354 3% Interest expense (123) (1
Slide 12: Q4 Operating Expenses
Q4 Operating Expenses Productivity gains and tightly managing costs % Change at % constant Change currency (1) Favorable Favorable In millions of Canadian dollars, unless otherwise indicated 2016 2015 (Unfavorable) (Unfavorable) Labor and fringe benefits $ 565 $ 608 7% 7% Purchased services and mate
Slide 13: Full-Year Results
Full-Year Results Outstanding results in a challenging year Change Favorable In millions of Canadian dollars, except EPS data, unless otherwise indicated 2016 2015 (Unfavorable) Revenues $ 12,037 $ 12,611 (5%) Operating expenses 6,725 7,345 Operating income 5,312 5,266 1% Interest expense (480) (439
Slide 14: Full-Year Free Cash Flow
Full-Year Free Cash Flow In millions of Canadian dollars, unless otherwise indicated 2016 Net income $ 3,640 Non-cash adjustments 1,853 Payments for income taxes (653) Other working capital items 362 Net cash provided by operating activities 5,202 Capital expenditures (net) (2,695) Major asset sales
Slide 15: 2017 Financial Outlook
2017 Financial Outlook Expect to deliver earnings growth in the mid single- digit range over 2016 adjusted diluted EPS of C$4.59 (1) (2) − Volume growth in the range of 3-4% in terms of RTMs, with overall pricing above inflation Committed to investing in our network, our people and our processes for
Slide 16: Luc Jobin, President and Chief Executive Officer
Luc Jobin President and Chief Executive Officer
Slide 17: Looking Ahead
Looking Ahead Creating value for our customers and shareholders - Economic environment remains challenging, but expect to see moderate volume growth in 2017 - Maintaining strong focus on operational excellence with unwavering commitment to safety - Continue to deliver quality service to our customer
Canadian National Railway Company — Q4 2016 Earnings Presentation on 6ix