Canadian National Railway Company · TSX:CNR
Canadian National Railway — Q2 2013 Earnings Presentation
19 slides from Canadian National Railway's earnings presentation, Jul 22, 2013
Slide 1: Second Quarter 2013 Financial Results
Second Quarter 2013 Financial Results July 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: Q2 Highlights
Q2 Highlights Solid top line growth - revenue up 4% at constant currency Accommodated growth at low incremental cost - adjusted EPS up 11% Solid free cash flow generation Strong team execution -- steady improvement trend 4 Please see website, www.cn.ca/nonGAAP, for an explanation and/or reconciliati
Slide 5: Jim Vena, Executive Vice President and COO
Jim Vena Executive Vice President and COO
Slide 6: Q2 Operating Highlights
Q2 Operating Highlights Train Productivity Yard Productivity Terminal Dwell (GTMs per train mile) (Cars per yard switching hour) (Entire railroad, hours) 43 16.2 15.1 15.0 8,256 8,389 8,429 36 39 1% 10% 1% Better Better Better Q2-11 Q2-12 Q2-13 Q2-11 Q2-12 Q2-13 Q2-11 Q2-12 Q2-13 Locomotive Utilizat
Slide 7: Balancing Operational and Service Excellence
Balancing Operational and Service Excellence Weekly Car Order Fulfillment Switch Window Compliance Grain Spotting Performance (Merchandise – net of rejections) (Placement in promised window) (Placement on day promised) 92% 92% 85% 86% 90% 91% 91% 75% 83% Apr May June Apr May June Apr May June 2013 2
Slide 8: Jean-Jacques Ruest, Executive Vice President and CMO
Jean-Jacques Ruest Executive Vice President and CMO
Slide 9: Q2 Revenues
Q2 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 $ 478 $ 405 18% 17% Metals and minerals 304 293 4% 3% Forest products 358 344 4% 3% Automot
Slide 10: Intermodal Markets
Intermodal Markets Second Quarter Q2 Highlights (2013 vs 2012) Strong gains at the Port of Vancouver partly offset by weakness through Prince Rupert Revenues (1) 3% Sell One CN and strong service performance driving gains in domestic RTMs 6% Carloads 6% Yield impacted by a lower fuel surcharge and m
Slide 11: Bulk Markets
Bulk Markets Second Quarter Q2 Highlights (2013 vs 2012) Strong potash and fertilizer volumes driven by share gains and an improved market Revenues (1) 3% Increased pet coke exports largely offset by weakness in thermal coal markets RTMs -2% Carloads -2% Grain shipments lower after strong volumes in
Slide 12: Manufacturing Markets
Manufacturing Markets Second Quarter Q2 Highlights (2013 vs 2012) Strong energy markets and the continued recovery in U.S. housing drove growth in long- Revenues (1) 7% haul crude, frac sand, lumber and panels Continued weakness in pulp and paper and in RTMs 9% steel and related products Carloads 2%
Slide 13: Luc Jobin, Executive Vice President and CFO
Luc Jobin Executive Vice President and CFO
Slide 14: Q2 Results
Q2 Results Change Favorable In millions of Canadian dollars, except EPS data, unless otherwise indicated 2013 2012 (Unfavorable) Revenues $ 2,666 $ 2,543 5% Operating expenses 1,624 1,558 Operating income 1,042 985 6% Interest expense (88) (86) Other income 28 9 Income before income taxes 982 908 In
Slide 15: Q2 Operating Expenses
Q2 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 $ 498 $ 504 1% 2% Purchased services and material 341 305 (12%) (11%) Fuel 402
Slide 16: YTD Q2 Free Cash Flow
YTD Q2 Free Cash Flow In millions of Canadian dollars, unless otherwise indicated Net income $ 1,272 Non-cash adjustments 572 Payments for income taxes (456) Other working capital items (4) Cash flow from operations 1,384 Capital expenditures (net) (646) Major asset sales 52 Other investing 22 Cash
Slide 17: 2013 Financial Outlook
2013 Financial Outlook Maintaining financial outlook despite slower volume growth Aiming for high single-digit growth in 2013 diluted EPS over adjusted diluted EPS of C$5.61 in 2012 (1) Targeting free cash flow in the range of C$800M to C$900M (1) Please see website, www.cn.ca/nonGAAP, for an explan
Slide 18: Claude Mongeau, President and CEO
Claude Mongeau President and CEO
Slide 19: Balancing Operational and Service Excellence
Balancing Operational and Service Excellence Solid momentum in place Pursuing growth opportunities and tightly managing costs Gearing up to meet our full-year outlook 19
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