Canadian National Railway Company · TSX:CNR
Canadian National Railway — Q4 2021 Earnings Presentation
18 slides from Canadian National Railway's earnings presentation, Jan 25, 2022
Slide 1: Fourth Quarter and Full Year 2021 Financial and Operating Results
Fourth Quarter and Full Year 2021 Financial and Operating Results January 25, 2022 TSX: CNR NYSE: CNI
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, including statements based on management’s assessment and a
Slide 3: On the call today
On the call today JJ Ruest President and CEO Ghislain Houle Executive Vice-President and Chief Financial Officer Rob Reilly Executive Vice-President and Chief Operating Officer James Cairns Senior Vice-President, Rail Centric Supply Chain Keith Reardon Senior Vice-President, Consumer Product Supply
Slide 4: JJ Ruest
JJ Ruest President and Chief Executive Officer
Slide 5: Outstanding Q4 results demonstrating strong execution and momentum
Outstanding Q4 results demonstrating strong execution and momentum Foundation laid for 2022 and beyond Q4 Adjusted Diluted EPS (1) Q4 Adjusted Operating Ratio (1) Full-year Free Cash Flow (1) $1.71 57.9% $3,296M 20% 350 bps 2% CN fourth-quarter record Upper end of full year guidance (1) These
Slide 6: Rob Reilly
Rob Reilly Executive VP and Chief Operating Officer
Slide 7: Strategic Plan produced sustainable efficiency gains in Q4
Strategic Plan produced sustainable efficiency gains in Q4 Employees Purchased services & materials Equipment rents end of period $ millions $ millions 97 565 24,381 23,765 504 82 22,604 Q4-20 Q4-21 Q4-20 Q4-21 Dec-20 Sep-21 Dec-21 ~1,800 $61M $15M vs 2020 vs Q4-20 vs Q4-20 ~1,150 11% 15% vs Q
Slide 8: Solid full-year operating performance, poised to accelerate in 2022
Solid full-year operating performance, poised to accelerate in 2022 (1) Car velocity Train length Through network train speed Through dwell car miles per day feet miles per hour entire railroad, hours 5% FLAT 4% 8% vs Full Year 2020 vs Full Year 2020 vs Full Year 2020 vs Full Year 2020 Personal inju
Slide 9: Redefining Railroading for the 21st Century
Redefining Railroading for the 21st Century First Class I railway to develop and implement Creating Strategic Value Recognized Leader in Digital Scheduled Railroad Through Sustainability Sustainability (DSR) 9
Slide 10: James Cairns and Keith Reardon
James Cairns Senior VP, Rail Centric Supply Chain Keith Reardon Senior VP, Consumer Product Supply Chain
Slide 11: Driving strong price and yield
Driving strong price and yield Yield Upscaling Record Same Store Price in 2021 • Improved same store price across all segments 6% 5.4% Continue to beat rail inflation 5% • Improved carload and intermodal business mix 4.0% 4.1% 4% 3.5% 3.5% • Priority train service at premium price 3.0% 3.0% 2.9% 3%
Slide 12: Leveraging our unique franchise and network reach
Leveraging our unique franchise and network reach Rail Centric Supply Chain Consumer Product Supply Chain Offsetting decline in Canadian grain Well-positioned for the recovery • Solid growth in Canadian coal volumes driven by Teck and • Retail, wholesale, and ocean-to-domestic container transloads w
Slide 13: Ghislain Houle
Ghislain Houle Executive VP and Chief Financial Officer
Slide 14: Yield and cost improvements driving outstanding Q4 results
Yield and cost improvements driving outstanding Q4 results Change Favorable In millions of Canadian dollars, except EPS data, unless otherwise indicated 2021) 2020) (Unfavorable) Revenues $ 3,753) $ 3,656) 3%) Operating expenses 2,187) 2,245) Operating income 1,566) 1,411) 11%) Interest expense (125
Slide 15: Right-sized cost structure delivering on Strategic Plan
Right-sized cost structure delivering on Strategic Plan Change at constant Change currency (1) In millions of Canadian dollars, unless otherwise Favorable Favorable indicated 2021 2020 (Unfavorable) (Unfavorable) Driven by higher capital credits and decrease in wages due to a 5% Labor and fringe ben
Slide 16: Generated 12% adjusted EPS growth for full year 2021
Generated 12% adjusted EPS growth for full year 2021 Change Favorable In millions of Canadian dollars, except EPS data, unless otherwise indicated 2021) 2020) (Unfavorable) Revenues $ 14,477) $ 13,819) 5%) Operating expenses 8,861) 9,042) Operating income 5,616) 4,777) 18%) Interest expense (610) (5
Slide 17: Delivered upper end of free cash flow guidance
Delivered upper end of free cash flow guidance In millions of Canadian dollars, unless otherwise indicated FY 2021) Net income $ 4,892) Non-cash adjustments 2,069) Income tax payments (759) Working capital items and other 769) Net cash provided by operating activities 6,971) Property additions (2,89
Slide 18: Set up for success on 2022 financial outlook
Set up for success on 2022 financial outlook (1) Delivering on our promise ~20% Adjusted EPS growth (2) ~57% Operating ratio ~15% ROIC (2) ~$4B ~20% growth in FCF (2) ~17% Capex as a % of revenues (3) Shareholder New share buyback program 19% dividend increase distributions in the range of $5B (1) P
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