Canadian National Railway Company · TSX:CNR
Canadian National Railway — Q3 2013 Earnings Presentation
20 slides from Canadian National Railway's earnings presentation, Oct 22, 2013
Slide 1: Third Quarter 2013 Financial Results
Third Quarter 2013 Financial Results October 22, 2013
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: Q3 Highlights
Q3 Highlights Outpacing base market conditions - Bulk revenues rebounding in September Growing at low incremental cost - Solid operating ratio of 59.8% Delivering safely and responsibly - FRA accident ratio of 1.31 4
Slide 5: Jim Vena, Executive Vice President and COO
Jim Vena Executive Vice President and COO
Slide 6: Q3 Operating Highlights
Q3 Operating Highlights Train Productivity Yard Productivity Terminal Dwell (GTMs per train mile) (Cars per yard switching hour) (Entire railroad, hours) 8,511 44 16.3 15.1 8,159 8,305 37 39 14.4 2% 13% 5% Better Better Better Q3-11 Q3-12 Q3-13 Q3-11 Q3-12 Q3-13 Q3-11 Q3-12 Q3-13 Locomotive Utilizat
Slide 7: Balancing Operational and Service Excellence
Balancing Operational and Service Excellence Raising the bar by driving simultaneous improvements in operating efficiency and customer service - Pushing decision making down to the front line Network investments in place to enhance resiliency and support growth - Key Edmonton-Winnipeg corridor Conti
Slide 8: Jean-Jacques Ruest, Executive Vice President and CMO
Jean-Jacques Ruest Executive Vice President and CMO
Slide 9: Q3 Revenues
Q3 Revenues % Change at % constant As Reported Change currency (1) In millions of Canadian dollars, unless otherwise indicated Favorable Favorable 2013 2012 (Unfavorable) (Unfavorable) Petroleum and chemicals $ 485 $ 416 17% 13% Metals and minerals 324 293 11% 7% Forest products 362 336 8% 5% Automo
Slide 10: Intermodal Markets
Intermodal Markets Third Quarter Q3 Highlights (2013 vs 2012) International – End-to-end supply-chain approach produced market share gains Revenues (1) 12% RTMs 14% Domestic – New products, new terminals, Carloads 8% solid service as defined by customers Revenue / RTM (1) -2% Revenue / Carload (1) 3
Slide 11: Bulk Markets
Bulk Markets Third Quarter Q3 Highlights (2013 vs 2012) Grain stocks depleted in advance of new crop Revenues (1) -4% RTMs -9% Potash volumes impacted by world Carloads -10% market turmoil Revenue / RTM (1) 5% Outlook Revenue / Carload (1) 6% Record grain crop in Canada U.S. grain crop above five-ye
Slide 12: Manufacturing Markets
Manufacturing Markets Third Quarter Q3 Highlights (2013 vs 2012) Strong energy-related markets; crude, frac sand, petrochemicals, energy steel Revenues (1) 8% Solid lumber / panel shipments to the RTMs 9% U.S. and lumber to China Carloads 4% Automotive sales and production overall Revenue / RTM (1)
Slide 13: Luc Jobin, Executive Vice President and CFO
Luc Jobin Executive Vice President and CFO
Slide 14: Q3 Results
Q3 Results Change Favorable In millions of Canadian dollars, except EPS data, unless otherwise indicated 2013 2012 (Unfavorable) Revenues $ 2,698 $ 2,497 8% Operating expenses 1,614 1,512 Operating income 1,084 985 10% Interest expense (89) (84) Other income 5 18 Income before income taxes 1,000 919
Slide 15: Q3 Operating Expenses
Q3 Operating Expenses % Change at % constant As Reported Change currency (1) In millions of Canadian dollars, unless otherwise indicated 2013 2012 Favorable Favorable (Unfavorable) (Unfavorable) Labor and fringe benefits $ 521 $ 476 (9%) (8%) Purchased services and material 318 304 (5%) (3%) Fuel 39
Slide 16: YTD Q3 Free Cash Flow
YTD Q3 Free Cash Flow In millions of Canadian dollars, unless otherwise indicated Net income $ 1,977 Non-cash adjustments 826 Payments for income taxes (655) Other working capital items 302 Cash flow from operations 2,450 Capital expenditures (net) (1,185) Major asset sales 52 Other investing (18) C
Slide 17: 2013 Financial Outlook
2013 Financial Outlook Finishing 2013 on a strong note Aiming for high single-digit growth over 2012 on adjusted diluted EPS (1) Targeting free cash flow in the range of C$800M to C$900M (1) (1) Please see website, www.cn.ca/nonGAAP, for an explanation and/or reconciliation of these non-GAAP measure
Slide 18: Claude Mongeau, President and CEO
Claude Mongeau President and CEO
Slide 19: Deepening Our Strategic Agenda
Deepening Our Strategic Agenda Gaining momentum with solid Q3 Strengthening our supply-chain mindset and capabilities Creating solid value for our customers and shareholders 19
Slide 20: Slide 20
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