Canadian National Railway Company · TSX:CNR
Canadian National Railway — Investor Presentation (November 2005)
45 slides from Canadian National Railway's investor presentation, Nov 15, 2005
Slide 1: Cautionary Statement for Purposes of the Safe Harbor Provisions
Cautionary Statement for Purposes of the “Safe Harbor” Provisions of the U.S. Private Securities Litigation Reform Act of 1995 All financial information reflected herein is expressed in Canadian dollars and determined on the basis of United States generally accepted accounting principles (U.S. GAAP)
Slide 2: Statistical highlights
* Adjusted to exclude items affecting the comparability of results. See Appendix C for a reconciliation of non-GAAP measures. ** First nine months Statistical highlights First nine months unaudited 2000 2001 (1) 2002 2003 2004 (2) 2004 (2) 2005 Route miles 15,532 17,986 17,821 17,544 19,304 19,303 1
Slide 3: Timeline since privatization
CN – North America’s Railroad Timeline since privatization November 1995 Privatization of CN February 1998 Illinois Central acquisition announced April 1998 CN and Kansas City Southern announce a 15-year marketing alliance July 1999 Acquisition of Illinois Central December 1999 CN/BNSF proposed comb
Slide 4: Precision railroading
Precision railroading CN pioneered the scheduled railroading concept in North America, when it introduced its service plan in 1998. Under the plan, CN runs regularly scheduled trains that leave at predetermined times. Each car or container has a specific trip plan that fits into the design of the tr
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Slide 6: Continuous improvement
Continuous improvement Trip Plan Compliance and Car Velocity are just two of the key statistics used at CN. These are important measures of service performance and network velocity. For the third quarter of 2005, CN’s Trip Plan Compliance (excluding BC Rail and GLT) score improved by four percentage
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Slide 10: CN's ports – global trade gateways
CN’s ports – global trade gateways
Slide 11: Prince Rupert port
Prince Rupert is also the deepest port in North America, with the ability to accommodate tomorrow’s 12,000-TEU (twenty-foot equivalent unit) container superships. It is also the safest West Coast port in terms of navigational risk factors and is the closest port to open ocean, which minimizes pilota
Slide 12: Sales, marketing and service
Sales, marketing – and service
Slide 13: Sales and marketing
utilization and leveraging of market and competitive knowledge. In CN’s Intermodal commodity group, the traditional marketing activities are also supported by IMX principles which focus on capacity management for profitable growth by smoothing traffic flows, increasing speed and reliability, and imp
Slide 14: CN's Intermodal terminals
CN’s Intermodal terminals across Canada and in the U.S. are strategically positioned to serve major urban areas, allowing the Company to deliver customers’ shipments to destinations across North America. CN also provides international reach to customers through the Ports of Vancouver, Halifax, Montr
Slide 15: CN hub centers
CN hub centers
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Slide 17: Grain estimates
(1) Estimates Source: Agriculture Canada, Grain and Oilseeds Supply and Disposition, September 20, 2005 (2) Excluding imports
Slide 18: Grain estimates
(1) Estimates Source: US Department of Agriculture, October 12, 2005 (2) Estimates based on 2000/2001 – 2004/2005 (3) Excluding imports
Slide 19: Grain estimates
(1) Estimates Source: US Department of Agriculture, October 12, 2005 (2) Estimates based on 2000/2001 – 2004/2005 (3) Excluding imports
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Slide 23: Coal mines and terminals served
CN provides service to and from the following coal mines in western Canada. Canadian facilities Coal mines Operator Location Estimated annual production . Bienfait Luscar, Ltd. Estevan, SK 2.8 million tonnes . Burnt River Western Canadian Coal Tumbler Ridge, BC 1 million tonnes . Cheviot Elk Valley
Slide 24: Forest products
Forest products
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Slide 26: Forest products review
CN-developed Clean Car Program has been adopted by the industry. Under this initiative, railcar Unloaders undertake to release railcars in clean condition and report any damages to a central CN location. CN then repairs any damaged railcars before they are sent to customers for the next loads. CN Pa
Slide 27: Outlook
Outlook Automotive manufacturers continue to invest in CN-served plants in Michigan and Ontario. In the fourth quarter of 2006, General Motors will commence shipping from a new vehicle-assembly plant located adjacent to CN’s main line in Lansing, MI. Ford will be retooling its Oakville, ON assembly
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Slide 29: Oil and gas industry growth
CN’s network is uniquely positioned to take advantage of oil-and-gas industry growth. Higher crude oil prices have led to significant investments in the Alberta oil sands. These investments and additional planned expansions are creating rail-volume growth opportunities for CN, especially within its
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Slide 33: Managing energy costs
Managing energy costs Hedging Given the volatility of fuel prices, CN has used fuel hedges to help smooth fuel expenses. This called for entry into swap positions on crude and heating oil to cover a target percentage of future fuel consumption up to two years in advance. However, with an increased a
Slide 34: % % 1.50 % % 1.75 % % 2.00 % % 2.25 %
% % 1.50 % % 1.75 % % 2.00 % % 2.25 %
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% 2.50 % % 2.75 % % 3.00 % % 3.25 % % 3.50 % % 3.75 % % 4.00 % % 4.25 % % 4.50 % % 4.75 % % 5.00 % % 5.25 % % 5.50 % % 5.75 % % 6.00 % % 6.25 % % 6.50 % % 6.75 % % 7.00 % % 7.25 % % 7.50 % % 7.75 % % 8.00 % % 8.25 % % 8.50 % % 8.75 % % 9.00 % % 9.25 % % 9.50 % % 9.75 % % 10.00 % % 10.25 % % 10.50 %
Slide 36: Modernization
Modernization of the locomotive fleet has continued in 2005 – CN negotiated purchase agreements with both ElectroMotive Diesel, Inc. and GE for the acquisition of 75 high-horsepower locomotives in 2005-2006 with an option for another 75 units prior to year-end 2008. CN’s information- and communicati
Slide 37: The right people
The right people
Slide 38: U.S. union breakdown
U.S. union breakdown by company as of September 30, 2005 Members IC 2,786 GTW 1,340 WC 1,329 GLT 5,934 U.S. union breakdown as of September 30, 2005 Union Members BMWE 1,738 UTU 1,266 Shopcraft 1,130 BLE TCU clerks Others 5,934
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Slide 42: Share repurchases
Share repurchases In the second quarter of 2005, the Company completed its 14.0 million share repurchase program, which began November 1, 2004, repurchasing the remaining 5.4 million common shares for $401 million, at an average price of $74.30 per share. The total cost of the program was $1.021 bil
Slide 43: Appendix A: Financial and statistical data
Appendix A Financial and statistical data u.s. gaap Appendix A CANADIAN NATIONAL RAILWAY COMPANY unaudited QUARTERLY CONSOLIDATED STATEMENT OF INCOME 2003 – 2005 (1) $ in millions, unless otherwise indicated 2003 2004 2005 Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Revenues Petroleum and chemicals $
Slide 44: www.cn.ca
www.cn.ca
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Canadian National Railway — Investor Presentation (November 2005) on 6ix