Canadian National Railway Company · TSX:CNR
Canadian National Railway — Q4 2015 Earnings Presentation
18 slides from Canadian National Railway's earnings presentation, Jan 26, 2016
Slide 1: Fourth Quarter and Full-Year 2015 Financial Results
Fourth Quarter and Full-Year 2015 Financial Results January 26, 2016
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, but Please refer to the website www.cn.ca/nonGAAP for the reconciliation of certain non- are not limited t
Slide 3: Claude Mongeau, President and Chief Executive Officer
Claude Mongeau President and Chief Executive Officer
Slide 4: Highlights
Highlights Very strong Q4 results overall − Swift response to declining volume trends − Diluted EPS of $1.18, up 15% − Balancing Operational and Service Excellence Capping a solid 2015 performance − Staying on top of our key markets, with good pricing − Core focus on efficiency with 58.2% operating
Slide 5: Jim Vena, Executive VP and Chief Operating Officer
Jim Vena Executive VP and Chief Operating Officer
Slide 6: Operating Highlights
Operating Highlights Train Productivity Yard Productivity Terminal Dwell (GTMs per train mile) (Cars per yard switching hour) (Entire railroad, hours) 3% 1% 9% 9% 15% 11% Locomotive Utilization Car Velocity Train Velocity (Trailing GTMs per total horsepower) (Car miles per day) (mph) 2% 3% 16% 13% 5
Slide 7: Operational and Service Excellence
Operational and Service Excellence SAFETY PRODUCTIVITY Culture and engagement Labor and fuel SERVICE CAPACITY Customer-centric Re-aligning resources end-to-end approach 7
Slide 8: JJ Ruest, Executive VP and Chief Marketing Officer
JJ Ruest Executive VP and Chief Marketing Officer
Slide 9: Q4 Top Line Performance
Q4 Top Line Performance Volumes % change – favorable (unfavorable) Carloads Revenues -1% RTMs Carloads -8% $ / Carload 8% Coal Merchandise RTMs -5% Petroleum & Chemicals ¢ / RTM 5% Forest Products Metals & Minerals Same Store Price* 3% *Price on same store revenues – ~75% of CN’s revenues are same s
Slide 10: Outlook
Outlook Intermodal Merchandise Bulk • International – growth in U.S business • U.S. housing starts and weak • Canadian grain crop (2015/2016) − Full-year impact of new vessel Canadian dollar driving lumber and now in line with 5-year average calls at Prince Rupert and Halifax panels − Good outlook f
Slide 11: Luc Jobin, Executive VP and Chief Financial Officer
Luc Jobin Executive VP and Chief Financial Officer
Slide 12: Q4 Results
Q4 Results Change Favorable In millions of Canadian dollars, except EPS data, unless otherwise indicated 2015 2014 (Unfavorable) Revenues $ 3,166 $ 3,207 (1%) Operating expenses 1,812 1,947 Operating income 1,354 1,260 7% Interest expense (119) (94) Other income 16 13 Income before income taxes 1,25
Slide 13: Q4 Operating Expenses
Q4 Operating Expenses % Change at % constant Change currency (1) Favorable Favorable In millions of Canadian dollars, unless otherwise indicated 2015 2014 (Unfavorable) (Unfavorable) Labor and fringe benefits $ 608 $ 592 (3%) 4% Purchased services and material 437 442 1% 8% Fuel 304 448 32% 42% Depr
Slide 14: Full-Year Results
Full-Year Results Change Favorable In millions of Canadian dollars, except EPS data, unless otherwise indicated 2015 2014 (Unfavorable) Revenues $ 12,611 $ 12,134 4% Operating expenses 7,345 7,510 Operating income 5,266 4,624 14% Interest expense (439) (371) Other income 47 107 Income before income
Slide 15: Full-Year Free Cash Flow
Full-Year Free Cash Flow 2015 2014 Change Favorable In millions of Canadian dollars, unless otherwise indicated (Unfavorable) Net income $ 3,538 $ 3,167 Non-cash adjustments 1,758 1,386 Payments for income taxes (725) (722) Other working capital items 569 550 Net cash provided by operating activitie
Slide 16: 2016 Financial Outlook
2016 Financial Outlook Expect to deliver mid single-digit earnings growth over 2015 adjusted diluted EPS of C$4.44 (1) − Slightly negative carloads but pricing above inflation Continuing to reinvest in the business for safety and efficiency − Capital envelope of C$2.9B, including negative foreign ex
Slide 17: Claude Mongeau, President and Chief Executive Officer
Claude Mongeau President and Chief Executive Officer
Slide 18: Looking Ahead
Looking Ahead − Managing through the weaker volume environment − Leveraging a great franchise and a well-diversified portfolio − Committed to our agenda of Operational and Service Excellence Focused on creating long-term shareholder value 18 18
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