Canadian National Railway Company · TSX:CNR
Canadian National Railway — Q3 2016 Earnings Presentation
16 slides from Canadian National Railway's earnings presentation, Oct 25, 2016
Slide 1: Third Quarter 2016 Financial Results
Third Quarter 2016 Financial Results October 25, 2016
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 Overcoming weak macro environment with solid bottom line performance − Revenues down 6% with RTMs declining 3% − Record quarterly operating ratio of 53.3% Balancing Operational and Service Excellence − Relentless focus on safety and productivity − Continuing to deliver superior service
Slide 5: Mike Cory, Executive VP and Chief Operating Officer
Mike Cory Executive VP and Chief Operating Officer
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) 9,315 8,829 14.2 53 13.5 50 6% 6% 5% Q3-15 Q3-16 Q3-15 Q3-16 Q3-15 Q3-16 Locomotive Utilization Car Velocity Train Velocity (Trailing GTMs per tot
Slide 7: JJ Ruest, Executive VP and Chief Marketing Officer
JJ Ruest Executive VP and Chief Marketing Officer
Slide 8: Q3 Top Line Performance
Q3 Top Line Performance Volumes Carloads % of Total % Change – Favorable RTMs Revenues (2) (Unfavorable) Bulk Revenues (6%) 5% Grain & Fertilizers 16% 9% (21%) Coal 4% Carloads (4%) (36%) Merchandise $ / Carload (2%) (7%) Petroleum & Chemicals 18% (14%) (2%) RTMs (3%) Forest Products 15% 3% (4%) Met
Slide 9: Market Outlook
Market Outlook Intermodal Merchandise Bulk • International • Steady improvement in U.S. housing • Bumper grain crop in Canada to − Global trade remains subdued starts underlying growth in lumber and support strong demand into Q3 2017 − Working with partners to fill the other housing-related goods vo
Slide 10: Ghislain Houle, Executive VP and Chief Financial Officer
Ghislain Houle Executive VP and Chief Financial Officer
Slide 11: Q3 Results
Q3 Results Change Favorable In millions of Canadian dollars, except EPS data, unless otherwise indicated 2016 2015 (Unfavorable) Revenues $ 3,014 $ 3,222 (6%) Operating expenses 1,607 1,735 Operating income 1,407 1,487 (5%) Interest expense (118) (111) Other income - 11 Income before income taxes 1,
Slide 12: Q3 Operating Expenses
Q3 Operating Expenses % Change at % constant Change currency (1) Favorable Favorable In millions of Canadian dollars, unless otherwise indicated 2016 2015 (Unfavorable) (Unfavorable) Labor and fringe benefits $ 495 $ 588 16% 16% Purchased services and material 379 401 5% 5% Fuel 261 293 11% 11% Depr
Slide 13: YTD Free Cash Flow
YTD Free Cash Flow In millions of Canadian dollars, unless otherwise indicated 2016 Net income $ 2,622 Non-cash adjustments 1,379 Payments for income taxes (566) Other working capital items 389 Net cash provided by operating activities 3,824 Capital expenditures (net) (2,029) Other investing activit
Slide 14: Raising CN's 2016 Financial Outlook
Raising CN’s 2016 Financial Outlook Now expect 2016 adjusted diluted EPS to be up approximately 1% versus 2015 adjusted diluted EPS of C$4.44 (1) (2) − Carloads still expected to be lower than last year in the mid- single-digit range, with overall pricing above inflation Committed to investing in ou
Slide 15: Luc Jobin, President and Chief Executive Officer
Luc Jobin President and Chief Executive Officer
Slide 16: Looking Ahead
Looking Ahead - Volume environment remains sluggish, but constructive in certain markets - Driving our agenda of operational and service excellence - Providing quality service to our customers - Raising our full-year guidance Creating value for our customers and shareholders 16
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