Canadian National Railway Company · TSX:CNR
Canadian National Railway — Q1 2012 Earnings Presentation
19 slides from Canadian National Railway's earnings presentation, Apr 23, 2012
Slide 1: First Quarter 2012 Financial Results
First Quarter 2012 Financial Results April 23, 2012
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS The financial results in this presentation were determined on the basis of U.S. GAAP. Prior assumptions (as of Jan. 24, 2012) Please refer to the website www.cn.ca/nonGAAP for the reconciliation of certain non- The Company forecast that North American industrial production
Slide 3: Claude Mongeau, President and Chief Executive Officer
Claude Mongeau President and Chief Executive Officer
Slide 4: Q1 Highlights
Q1 Highlights Very solid results Aided by milder winter Strong execution by the CN team Revenues up 12% at constant currency (1) Operating ratio at 66.2%, 2.8 pts better Adjusted diluted EPS of $1.18, up 31% (1) (1) Please see website, www.cn.ca/nonGAAP, for an explanation and/or reconci
Slide 5: Keith Creel, Executive Vice-President and Chief Operating Officer
Keith Creel Executive Vice-President and Chief Operating Officer
Slide 6: Q1 Operating Highlights
Q1 Operating Highlights Train Productivity Yard Throughput Terminal Dwell (GTM’s per train mile) (Cars per yard switching hour) (Entire railroad, hours) 8151 8207 37 37 7906 35 17.5 17.4 16.0 1% 6% 8% Better Better Better Q1-10 Q1-11 Q1-12 Q1-10 Q1-11 Q1-12 Q1-10 Q1-11 Q1-12 Locomotive Utilization C
Slide 7: Operational and Service Excellence
Operational and Service Excellence Strategic investment in capacity BC North gateway Chicago / EJ&E Strategic investment in locomotive fleet 65 new and 96 second-hand Labor agreements in place Two agreements ratified in Canada (USW, TCRC) Leveraging new DMIR/DWP/WC agreement in the U
Slide 8: Jean-Jacques Ruest, Executive Vice-President and Chief Marketing Officer
Jean-Jacques Ruest Executive Vice-President and Chief Marketing Officer
Slide 9: Q1 Revenues
Q1 Revenues % Change at % constant As Reported Change currency(1) In millions of Canadian dollars, unless otherwise indicated Favorable Favorable 2012 2011 (Unfavorable) (Unfavorable) Petroleum and chemicals $ 392 $ 342 15% 13% Metals and minerals 273 209 31% 29% Forest products 328 299 10% 9% Autom
Slide 10: Intermodal
Intermodal First Quarter (2012 vs 2011) Revenues (1) 17% RTMs 16% Carloads 13% Revenue / RTM (1) 0% Revenue / Carload (1) 3% Market Breakdown Solid growth from West Coast gateway services International 43% New Intermodal service offering 57% Domestic Continued strength in domestic volumes 2012
Slide 11: Bulk
Bulk First Quarter (2012 vs 2011) Revenues (1) 2% RTMs (3%) Carloads (11%) Revenue / RTM (1) 5% Revenue / Carload (1) 15% Commodity Breakdown Expansion of coal exports – Soft domestic thermal market Coal and Pet Coke 12% Improving fertilizer demand 30% Grain and Grain Products High wheat and c
Slide 12: Manufacturing
Manufacturing First Quarter (2012 vs 2011) Revenues (1) 15% RTMs 10% Carloads 8% Revenue / RTM (1) 5% Revenue / Carload (1) 6% Commodity Breakdown Lumber - Improving U.S. volumes - Stable Petroleum, Asian demand 12% Chemicals & Sulfur 35% Metals, Minerals & Strong North American shale oil drilli
Slide 13: Luc Jobin, Executive Vice-President and Chief Financial Officer
Luc Jobin Executive Vice-President and Chief Financial Officer
Slide 14: Q1 Results
Q1 Results Change Favorable In millions of Canadian dollars, except EPS data, unless otherwise indicated 2012 2011 (Unfavorable) Revenues $ 2,346 $ 2,084 13% Operating expenses 1,553 1,439 Operating income 793 645 23% Interest expense (86) (86) Other income 293 300 Income before income taxes 1,000 8
Slide 15: Q1 Operating Expenses
Q1 Operating Expenses % Change at % constant As Reported Change currency(1) In millions of Canadian dollars, unless otherwise indicated Favorable Favorable 2012 2011 (Unfavorable) (Unfavorable) Labor and fringe benefits $ 509 $ 473 (8%) (7%) Purchased services and material 299 286 (5%) (4%) Fuel 376
Slide 16: YTD 2012 Free Cash Flow
YTD 2012 Free Cash Flow In millions of Canadian dollars, unless otherwise indicated Net income $ 775 Non-cash adjustments 143 Payments for income taxes (27) Other working capital items (766) Capital expenditures (net) (224) Major asset sales 311 Other investing 2 Dividends (165) Effect of foreign ex
Slide 17: 2012 Financial Outlook Update
2012 Financial Outlook Update Assuming a gradual improvement in the North American economy Carload growth in mid single-digit range Pricing above inflation Aiming for a full 10% growth over 2011 on adjusted diluted EPS (1) Despite additional pension expense of about C$100M Free-cash flow
Slide 18: Claude Mongeau, President and Chief Executive Officer
Claude Mongeau President and Chief Executive Officer
Slide 19: Our Agenda to Deliver Results
Our Agenda to Deliver Results Becoming a Delivering Balancing Creating Solid True Supply Superior Operational Value for our Chain Enabler Growth & Service Shareholders Excellence A Great Outside-in DNA of Execution Franchise Perspective Innovation Through People 19
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