Canadian National Railway Company · TSX:CNR
Canadian National Railway — Q2 2017 Earnings Presentation
16 slides from Canadian National Railway's earnings presentation, Jul 25, 2017
Slide 1: Second Quarter 2017 Financial Results
Second Quarter 2017 Financial Results July 25, 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: Q2 Highlights
Q2 Highlights Solid top-line performance − Building on volume momentum started in Q4 2016 − Continued strong growth across most sectors in Q2 with overall RTMs up 18% − Inflation-plus pricing Balancing operational and service excellence − Pushing all levers to accommodate strong demand and maintain
Slide 5: Mike Cory, Executive VP and Chief Operating Officer
Mike Cory Executive VP and Chief Operating Officer
Slide 6: Operating Highlights
Operating Highlights Operating metrics in line or better relative to Q2-15, with a 6% increase in GTMs Train Productivity Yard Productivity Terminal Dwell (GTMs per train mile) (Cars per yard switching hour) (Entire railroad, hours) 53 51 9,331 9,446 14.6 14.6 48 8,712 8% 10% 13.6 Flat vs Q2-15 vs Q
Slide 7: JJ Ruest, Executive VP and Chief Marketing Officer
JJ Ruest Executive VP and Chief Marketing Officer
Slide 8: Q2 Top Line Performance
Q2 Top Line Performance Continued broad-based volume growth Highlights Volumes % of Total % Change – Favorable Revenues (2) (Unfavorable) Bulk 16% Revenues 17% Grain & Fertilizers 30% 16% (3%) Coal 25% 4% Carloads 14% Merchandise $ / Carload 3% 6% Petroleum & Chemicals 15% 16% (2%) Forest Products F
Slide 9: Market Outlook
Market Outlook Volume comparisons versus last year will be more challenging by September Intermodal Merchandise Bulk 24% of revenues 49% of revenues 20% of revenues • International • Steady frac sand demand into back • Canadian grain operations to run Good international volumes half of the year al
Slide 10: Ghislain Houle, Executive VP and Chief Financial Officer
Ghislain Houle Executive VP and Chief Financial Officer
Slide 11: Q2 Results
Q2 Results Solid financial performance Change Favorable In millions of Canadian dollars, except EPS data, unless otherwise indicated 2017 2016 (Unfavorable) Revenues $ 3,329 $ 2,842 17% Operating expenses 1,834 1,549 Operating income 1,495 1,293 16% Interest expense (123) (116) Other income (loss) 1
Slide 12: Q2 Operating Expenses
Q2 Operating Expenses Focused on tight cost management while experiencing strong volumes % Change at % constant Change currency (1) Favorable Favorable In millions of Canadian dollars, unless otherwise indicated 2017 2016 (Unfavorable) (Unfavorable) Labor and fringe benefits $ 527 $ 469 (12%) (10%)
Slide 13: Generating Strong Free Cash Flow
Generating Strong Free Cash Flow In millions of Canadian dollars, unless otherwise indicated 2017 YTD Net income $ 1,915 Non-cash adjustments 928 Payments for income taxes (333) Other working capital items 251 Net cash provided by operating activities 2,761 Capital expenditures (net) (1,071) Other i
Slide 14: Reaffirming 2017 Financial Outlook
Reaffirming 2017 Financial Outlook Expect to deliver adjusted diluted EPS in the range of C$4.95 to C$5.10 versus 2016 adjusted diluted EPS of C$4.59 (1) (2) − Volume growth of approximately 10% in terms of RTMs, with overall pricing above inflation Continuing to reinvest in the business for safety,
Slide 15: Luc Jobin, President and Chief Executive Officer
Luc Jobin President and Chief Executive Officer
Slide 16: Looking Ahead
Looking Ahead Creating value for our customers and shareholders - Economic environment remains supportive, but volume comparisons more challenging in the second half of the year - Strengthening Canadian dollar becoming a headwind - Key focus on balancing operational and service excellence - Leveragi
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