Canadian National Railway Company · TSX:CNR
Canadian National Railway — Q4 2013 Earnings Presentation
19 slides from Canadian National Railway's earnings presentation, Jan 30, 2014
Slide 1: Fourth Quarter 2013 Financial Results
Fourth Quarter 2013 Financial Results January 30, 2014
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS The financial results in this presentation were determined on the basis of U.S. GAAP. Important risk factors that could affect the forward-looking statements include, Please refer to the website www.cn.ca/nonGAAP for the reconciliation of certain non- but are not limited t
Slide 3: Claude Mongeau, President and CEO
Claude Mongeau President and CEO
Slide 4: 2013 Highlights
2013 Highlights Building on our supply chain approach - Outpaced the economy with record volumes and revenues Continuing to balance Operational and Service Excellence - Industry-leading 63.4% operating ratio Delivering safely and responsibly - Solid 9% year-over-year improvement in FRA accident rati
Slide 5: Jim Vena, Executive Vice President and COO
Jim Vena Executive Vice President and COO
Slide 6: 2013 Operating Highlights
2013 Operating Highlights Train Productivity Yard Productivity Terminal Dwell (GTMs per train mile) (Cars per yard switching hour) (Entire railroad, hours) 43 42 16.1 16.1 15.6 15.8 8,391 8,455 8,324 8,438 40 38 1% 1% 8% 11% Flat 1% Better Better Better Better Worse Q4-12 Q4-13 2012 2013 Q4-12 Q4-13
Slide 7: Balancing Operational and Service Excellence
Balancing Operational and Service Excellence Dealing with current extreme cold weather Targeting continued fuel efficiency gains - in the range of 1.5% Working all levers to efficiently absorb volume growth Investing in the network - safety first, always - productivity and capacity for growth Focuse
Slide 8: Jean-Jacques Ruest, Executive Vice President and CMO
Jean-Jacques Ruest Executive Vice President and CMO
Slide 9: Revenues
Revenues Fourth Quarter Full Year % % Change at Change at % constant constant In millions of Canadian dollars, unless Change currency (1) currency (1) Favorable Favorable Favorable otherwise indicated 2013 2012 2013 (Unfavorable) (Unfavorable) (Unfavorable) Petroleum and chemicals $ 519 $ 427 22% 17
Slide 10: 2014 Outlook
2014 Outlook Volume Growth Outperforming in intermodal with market innovation Forest Products + and new products Metals & Minerals + Petroleum & Chemicals ++ Taking advantage of the CN franchise to grow Automotive + energy, housing, automotive, manufacturing markets Grain ++ Fertilizers H1+ Huge Can
Slide 11: Luc Jobin, Executive Vice President and CFO
Luc Jobin Executive Vice President and CFO
Slide 12: Q4 Results
Q4 Results Change Favorable In millions of Canadian dollars, except EPS data, unless otherwise indicated 2013 2012 (Unfavorable) Revenues $ 2,745 $ 2,534 8% Operating expenses 1,778 1,612 Operating income 967 922 5% Interest expense (91) (86) Other income (loss) (2) (5) Income before income taxes 87
Slide 13: Q4 Operating Expenses
Q4 Operating Expenses % Change at % constant Change currency (1) In millions of Canadian dollars, unless otherwise indicated 2013 2012 Favorable Favorable (Unfavorable) (Unfavorable) Labor and fringe benefits $ 594 $ 463 (28%) (26%) Purchased services and material 364 340 (7%) (4%) Fuel 422 400 (6%)
Slide 14: Full-Year Results
Full-Year Results Change Favorable In millions of Canadian dollars, except EPS data, unless otherwise indicated 2013 2012 (Unfavorable) Revenues $ 10,575 $ 9,920 7% Operating expenses 6,702 6,235 Operating income 3,873 3,685 5% Interest expense (357) (342) Other income 73 315 Income before income ta
Slide 15: 2013 Free Cash Flow
2013 Free Cash Flow (1) In millions of Canadian dollars, unless otherwise indicated Net income $ 2,612 Non-cash adjustments 1,242 Payments for income taxes (890) Other working capital items 584 Net cash provided by operating activities 3,548 Capital expenditures (net) (1,973) Major asset sales 52 Ot
Slide 16: 2014 Financial Outlook
2014 Financial Outlook Aiming for double-digit earnings growth over 2013 adjusted diluted EPS of C$3.06 (1) - With mid-single digit carload growth and pricing above inflation Targeting free cash flow in the range of C$1.6 - C$1.7B (1) (2) - Capital envelope of C$2.1B Also rewarding shareholders - Sh
Slide 17: Claude Mongeau, President and CEO
Claude Mongeau President and CEO
Slide 18: Looking Ahead
Looking Ahead Proud of our solid results in 2013 Overcoming challenges of extreme cold weather Taking our safety agenda to the next level Momentum to help deliver solid 2014 results 18 18
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