Canadian National Railway Company · TSX:CNR
Canadian National Railway — Q3 2017 Earnings Presentation
17 slides from Canadian National Railway's earnings presentation, Oct 24, 2017
Slide 1: Third Quarter 2017 Financial Results
Third Quarter 2017 Financial Results October 24, 2017
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. By their nature, forward-looking statements involve risks,
Slide 3: Luc Jobin, President and Chief Executive Officer
Luc Jobin President and Chief Executive Officer
Slide 4: Q3 Highlights
Q3 Highlights Strong demand across most segments − 10% increase in RTMs and inflation-plus pricing − Key drivers of growth include frac sand, intermodal, coal and Canadian grain Balancing operational and service excellence − Operating ratio of 54.7% – in line with our expectations − Increasing capit
Slide 5: Mike Cory, Executive VP and Chief Operating Officer
Mike Cory Executive VP and Chief Operating Officer
Slide 6: Operating Highlights
Operating Highlights Quarterly record for GTMs in Q3 Train Productivity Yard Productivity Terminal Dwell (GTMs per train mile) (Cars per yard switching hour) (Entire railroad, hours) 53 52 1,430 9,503 50 16.0 9,315 14.2 13.5 1,330 8,829 1,285 1,2308% 4% 13% 1,200 vs Q3-15 vs Q3-15 vs Q3-15 1,130 1,1
Slide 7: Investing for the Long Term
Investing for the Long Term Experiencing strong volume growth across most segments Hiring and other personnel initiatives Additional locomotives coming on-line Continuing to invest in infrastructure, yards and equipment − Advancing some investments to be shovel- ready in spring of 2018 7
Slide 8: JJ Ruest, Executive VP and Chief Marketing Officer
JJ Ruest Executive VP and Chief Marketing Officer
Slide 9: Q3 Top Line Performance
Q3 Top Line Performance Solid results across most segments Highlights Volumes % of Total % Change Revenues (2) at constant % Change currency (1) Bulk Favorable Favorable (3%) (Unfavorable) (Unfavorable) Grain & Fertilizers 2% 15% (7%) Coal 40% 4% Revenues 7% 9% Merchandise Carloads 11% 3% Petroleum
Slide 10: Market Outlook
Market Outlook Working closely with customers and supply chain partners Intermodal Merchandise Bulk 26% of revenues 49% of revenues 19% of revenues • International • Ongoing energy sector recovery – • Committed to deliver on Canadian Demand is strong frac sand, steel and heavy crude grain exports
Slide 11: Ghislain Houle, Executive VP and Chief Financial Officer
Ghislain Houle Executive VP and Chief Financial Officer
Slide 12: Q3 Results
Q3 Results Solid financial performance % Change Favorable In millions of Canadian dollars, except EPS data, unless otherwise indicated 2017 2016 (Unfavorable) Revenues $ 3,221 $ 3,014 7% Operating expenses 1,762 1,607 Operating income 1,459 1,407 4% Interest expense (119) (118) Other income 5 - Inco
Slide 13: Q3 Operating Expenses
Q3 Operating Expenses Managing costs in a high volume environment % Change at constant % Change currency (1) Favorable Favorable In millions of Canadian dollars, unless otherwise indicated 2017 2016 (Unfavorable) (Unfavorable) Labor and fringe benefits $ 525 $ 495 (6%) (8%) Purchased services and ma
Slide 14: Generating Strong Free Cash Flow
Generating Strong Free Cash Flow In millions of Canadian dollars, unless otherwise indicated 2017 YTD Net income $ 2,873 Non-cash adjustments 1,373 Payments for income taxes (498) Other working capital items 419 Net cash provided by operating activities 4,167 Capital expenditures (net) (1,795) Other
Slide 15: Reaffirming 2017 Financial Outlook
Reaffirming 2017 Financial Outlook Expect to deliver adjusted diluted EPS in the range of C$4.95 to C$5.10 versus 2016 adjusted diluted EPS of C$4.59 (1) (2) − Volume growth of approximately 10% in terms of RTMs, with overall pricing above inflation Increasing our capital envelope by an additional C
Slide 16: Luc Jobin, President and Chief Executive Officer
Luc Jobin President and Chief Executive Officer
Slide 17: Looking Ahead
Looking Ahead Creating value for our customers and shareholders Economic environment remains very supportive Focused on delivering superior service to our customers Adjusting and optimizing our resources to accommodate strong demand and future growth opportunities Solid plan in place given confidenc
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