FORM
6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant
to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of January, 2006
Commission File Number: 001-02413
Canadian
National Railway Company
(Translation of registrants name into English)
935 de
la Gauchetiere Street West
Montreal, Quebec
Canada H3B 2M9
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F | Form 40-F X |
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes | No X |
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes | No X |
Indicate by check mark whether by furnishing the information contained in this Form, the Registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
Yes | No X |
If Yes is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A
Canadian National Railway
Company
Table of Contents
Item 1 | Press Release dated January 24, 2006, titled “CN reports fourth-quarter 2005 earnings per share of C$1.56 and record full-year 2005 free cash flow of C$1.3 billion. |
Item 1
News | |
North Americas Railroad | FOR IMMEDIATE RELEASE |
Stock symbols: TSX: CNR / NYSE: CNI
www.cn.ca
CN reports fourth-quarter 2005 earnings per share of C$1.56 and record full-year 2005 free cash flow of C$1.3 billion
MONTREAL, Jan. 24, 2006 CN today reported its financial and operating results for the fourth quarter and year ended Dec. 31, 2005.
Fourth-quarter 2005 financial highlights
E. Hunter Harrison, president and chief executive officer of CN, said: I am very pleased with CNs strong financial results for the fourth quarter and full-year 2005. They reflect disciplined execution by the CN team and its ability to overcome some major challenges during the year.
1
All the pieces came together stronger pricing, gains from our acquisitions, and solid returns from good service, cost control and improved productivity. Our business model continued to fire on all cylinders, creating substantial shareholder value. That was demonstrated by our record free cash flow of C$1.3 billion for 2005. And that performance, Im happy to report, allowed CNs Board of Directors to approve today a 30 per cent increase in our quarterly cash dividend and a two-for-one stock split.
Revenues for the fourth quarter of 2005 increased nine per cent over fourth-quarter 2004 to C$1,886 million, with intermodal, metals and minerals, and automotive commodity groups registering double-digit revenue gains. Forest products, petroleum and chemicals, coal, and grain and fertilizers revenues also improved. These gains were recorded despite the unfavourable C$40-million translation impact of the stronger Canadian dollar on U.S.-dollar denominated revenues.
Operating expenses for the quarter increased by three per cent over fourth-quarter 2004 to C$1,166 million and were favourably affected by the C$20-million translation impact of the stronger Canadian dollar on U.S.-dollar denominated expenses.
Full-year 2005
Net income for 2005 was C$1,556 million, an increase of 24 per cent, while diluted earnings per share for the year increased 28 per cent to C$5.54. Operating income for 2005 rose 21 per cent to C$2,624 million. Revenues for the year increased by 11 per cent to C$7,240 million, while operating expenses increased by five per cent to C$4,616 million. The companys 2005 operating ratio improved by 3.1 percentage points to 63.8 per cent.
2
CNs 2005 revenue performance was driven largely by:
These gains were partly offset by the unfavourable C$260-million translation impact of the stronger Canadian dollar on U.S.-dollar denominated revenues.
Revenues by commodity group and operating expenses for 2005
Forest products revenues benefited from continued solid demand for Canadian lumber and panels and an improved market position for paper, while higher intermodal revenues in part reflected strong container imports into the Port of Vancouver.
CNs improved market position in petroleum products helped to increase petroleum and chemicals revenues, although this was partly offset by soft conditions in several market segments. Grain and fertilizers revenues improved owing to higher export shipments of U.S. corn, as well as increased shipments of Canadian barley and canola, partly offset by the decreased availability of high-quality Canadian wheat for export via west coast ports.
3
Strong shipments of construction materials, aluminum and Canadian steel products helped to drive increased metals and minerals revenues. Automotive revenues benefited from higher import vehicles into the ports of Vancouver and Halifax, and new finished vehicle production in the southern U.S. that began in the second half of 2004, both of which were partly offset by lower auto production at CN-served facilities in southern Ontario and Michigan. CNs coal revenues improved primarily as a result of new metallurgical-coal mines in western Canada.
The increase in CNs 2005 operating expenses was largely attributable to higher fuel costs, the inclusion of a full year of GLT and BC Rail expenses, and increased purchased services and material costs. These increases were partly offset by the favourable C$155-million translation impact of the stronger Canadian dollar on U.S.-dollar denominated expenses, lower equipment rents, and lower casualty and other expenses.
The financial results in this press release were determined on the basis of U.S. generally accepted accounting principles (U.S. GAAP).
(1) Please see discussion and reconciliation of this non-GAAP adjusted performance measure in the attached supplementary schedule, Non-GAAP Measure.
This news release contains forward-looking statements. CN cautions that, by their nature, forward-looking statements involve risk and uncertainties, including the assumption that the positive economic trends in North America and Asia will continue, and that its results could differ materially from those expressed or implied in such statements. Reference should be made to CNs most recent Form 40-F filed with the United States Securities and Exchange Commission, its Annual Information Form filed with the Canadian securities regulators, and its 2004 and 2005 Annual Consolidated Financial Statements and Managements Discussion and Analysis, for a summary of major risks.
4
Canadian National Railway Company spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico, serving the ports of Vancouver, Prince Rupert, B.C., Montreal, Halifax, New Orleans, and Mobile, Ala., and the key cities of Toronto, Buffalo, Chicago, Detroit, Duluth, Minn./Superior, Wis., Green Bay, Wis., Minneapolis/St. Paul, Memphis, St. Louis, and Jackson, Miss., with connections to all points in North America.
- 30 -
Contacts: Media Mark Hallman System Director, Media Relations (905) 669-3384 |
Investment Community Robert Noorigian Vice-President, Investor Relations (514) 399-0052 |
5
CANADIAN NATIONAL RAILWAY COMPANY |
CONSOLIDATED STATEMENT OF INCOME (U.S. GAAP) |
(In millions, except per share data) |
|
|
Three months ended December 31 |
|
Year ended December 31 |
| |||||||
2005 | 2004 | (1) | 2005 | 2004 | (1) | |||||||
(Unaudited) | ||||||||||||
Revenues | $ | 1,886 | $ | 1,736 | $ | 7,240 | $ | 6,548 | ||||
Operating expenses | 1,166 | 1,129 | 4,616 | 4,380 | ||||||||
Operating income | 720 | 607 | 2,624 | 2,168 | ||||||||
Interest expense | (74 | ) | (75 | ) | (299 | ) | (294 | ) | ||||
Other income (loss) | 10 | 25 | 12 | (20 | ) | |||||||
Income before income taxes | 656 | 557 | 2,337 | 1,854 | ||||||||
Income tax expense | (226 | ) | (181 | ) | (781 | ) | (596 | ) | ||||
Net income | $ | 430 | $ | 376 | $ | 1,556 | $ | 1,258 | ||||
Earnings per share | ||||||||||||
Basic | $ | 1.59 | $ | 1.32 | $ | 5.64 | $ | 4.41 | ||||
Diluted | $ | 1.56 | $ | 1.29 | $ | 5.54 | $ | 4.34 | ||||
Weighted-average number of shares | ||||||||||||
Basic | 270.0 | 285.1 | 275.8 | 285.1 | ||||||||
Diluted | 275.4 | 290.7 | 281.1 | 289.9 | ||||||||
(1) Includes Great Lakes Transportation LLCs railroads and related holdings (GLT) and BC Rail from May 10, 2004 and July 14, 2004, respectively. |
These unaudited interim consolidated financial statements, expressed
in Canadian dollars, and prepared in accordance with U.S. generally accepted
accounting principles (U.S. GAAP), contain all adjustments (consisting
of normal recurring accruals) necessary to present fairly Canadian National
Railway Company's (the Company) financial position as at December 31, 2005
and December 31, 2004, and its results of operations, changes in shareholders'
equity and cash flows for the three months and years ended December 31,
2005 and 2004. These consolidated financial statements have been prepared
using accounting policies consistent with those used in preparing the Company's
2005 Annual Consolidated Financial Statements and should be read in conjunction
with such statements, notes thereto and Management's Discussion and Analysis
(MD&A).
6
CANADIAN NATIONAL RAILWAY COMPANY |
CONSOLIDATED STATEMENT OF OPERATING INCOME (U.S. GAAP) |
(In millions) |
Three months ended December 31 | Year ended December 31 | |||||||||||||||
|
||||||||||||||||
2005 |
|
2004 |
(1) |
Variance Fav (Unfav) |
|
|
2005 |
2004 |
(1) |
Variance Fav (Unfav) |
| |||||
(Unaudited) | ||||||||||||||||
Revenues | ||||||||||||||||
Petroleum and chemicals | $ | 283 | $ | 268 | 6% | $ | 1,096 | $ | 1,059 | 3% | ||||||
Metals and minerals | 215 | 193 | 11% | 837 | 714 | 17% | ||||||||||
Forest products | 436 | 399 | 9% | 1,738 | 1,505 | 15% | ||||||||||
Coal | 75 | 72 | 4% | 331 | 284 | 17% | ||||||||||
Grain and fertilizers | 310 | 299 | 4% | 1,119 | 1,063 | 5% | ||||||||||
Intermodal | 339 | 300 | 13% | 1,270 | 1,117 | 14% | ||||||||||
Automotive | 139 | 125 | 11% | 514 | 510 | 1% | ||||||||||
Other items | 89 | 80 | 11% | 335 | 296 | 13% | ||||||||||
1,886 | 1,736 | 9% | 7,240 | 6,548 | 11% | |||||||||||
Operating expenses | ||||||||||||||||
Labor and fringe benefits | 453 | 469 | 3% | 1,841 | 1,819 | (1% | ) | |||||||||
Purchased services and material | 224 | 185 | (21% | ) | 814 | 746 | (9% | ) | ||||||||
Depreciation and amortization | 157 | 153 | (3% | ) | 627 | 598 | (5% | ) | ||||||||
Fuel | 199 | 151 | (32% | ) | 725 | 528 | (37% | ) | ||||||||
Equipment rents | 46 | 49 | 6% | 192 | 244 | 21% | ||||||||||
Casualty and other | 87 | 122 | 29% | 417 | 445 | 6% | ||||||||||
1,166 | 1,129 | (3% | ) | 4,616 | 4,380 | (5% | ) | |||||||||
Operating income | $ | 720 | $ | 607 | 19% | $ | 2,624 | $ | 2,168 | 21 | % | |||||
Operating ratio | 61.8 | % | 65.0 | % | 3.2 | 63.8 | % | 66.9 | % | 3.1 | ||||||
(1) Includes GLT and BC Rail from May 10, 2004 and July 14, 2004, respectively.
Certain of the 2004 comparative figures have been reclassified in order
to be consistent with the 2005 presentation.
7
CANADIAN NATIONAL RAILWAY COMPANY |
CONSOLIDATED BALANCE SHEET (U.S. GAAP) |
(In millions) |
|
|
December 31 2005 |
|
|
December
31 2004 |
|
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 62 | $ | 147 | ||
Accounts receivable | 623 | 793 | ||||
Material and supplies | 151 | 127 | ||||
Deferred income taxes | 65 | 364 | ||||
Other | 248 | 279 | ||||
1,149 | 1,710 | |||||
Properties | 20,078 | 19,715 | ||||
Intangible and other assets | 961 | 940 | ||||
Total assets | $ | 22,188 | $ | 22,365 | ||
Liabilities and shareholders' equity | ||||||
Current liabilities: | ||||||
Accounts payable and accrued charges | $ | 1,478 | $ | 1,605 | ||
Current portion of long-term debt | 408 | 578 | ||||
Other | 72 | 76 | ||||
1,958 | 2,259 | |||||
Deferred income taxes | 4,817 | 4,723 | ||||
Other liabilities and deferred credits | 1,487 | 1,513 | ||||
Long-term debt | 4,677 | 4,586 | ||||
Shareholders' equity: | ||||||
Common shares | 4,580 | 4,706 | ||||
Accumulated other comprehensive loss | (222 | ) | (148 | ) | ||
Retained earnings | 4,891 | 4,726 | ||||
9,249 | 9,284 | |||||
Total liabilities and shareholders' equity | $ | 22,188 | $ | 22,365 | ||
These unaudited interim consolidated financial statements, expressed in Canadian dollars, and prepared in accordance with U.S. GAAP, contain all adjustments (consisting of normal recurring accruals) necessary to present fairly the Companys financial position as at December 31, 2005 and December 31, 2004, and its results of operations, changes in shareholders' equity and cash flows for the three months and years ended December 31, 2005 and 2004. These consolidated financial statements have been prepared using accounting policies consistent with those used in preparing the Company's 2005 Annual Consolidated Financial Statements and should be read in conjunction with such statements, notes thereto and MD&A.
8
CANADIAN NATIONAL RAILWAY COMPANY |
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY (U.S. GAAP) |
(In millions) |
Three months ended December 31 |
|
Year ended |
|||||||||||
2005 | 2004 | (1) | 2005 | 2004 | (1) | ||||||||
(Unaudited) | |||||||||||||
Common shares (2) | |||||||||||||
Balance, beginning of period | $ | 4,605 | $ | 4,742 | $ | 4,706 | $ | 4,664 | |||||
Stock options exercised and other | 30 | 30 | 176 | 108 | |||||||||
Share repurchase programs (3) | (55 | ) | (66 | ) | (302 | ) | (66 | ) | |||||
Balance, end of period | $ | 4,580 | $ | 4,706 | $ | 4,580 | $ | 4,706 | |||||
Accumulated other comprehensive loss | |||||||||||||
Balance, beginning of period | $ | (169 | ) | $ | (57 | ) | $ | (148 | ) | $ | (129 | ) | |
Other comprehensive income (loss): | |||||||||||||
Unrealized foreign exchange gain on translation of | |||||||||||||
U.S. dollar denominated long-term debt designated as a | |||||||||||||
hedge of the net investment in U.S. subsidiaries | 29 | 217 | 152 | 326 | |||||||||
Unrealized foreign exchange loss on translation of | |||||||||||||
the net investment in foreign operations | (43 | ) | (302 | ) | (233 | ) | (428 | ) | |||||
Increase (decrease) in unrealized holding gains on fuel | |||||||||||||
derivative instruments | (70 | ) | (58 | ) | (35 | ) | 54 | ||||||
Realized gain on settlement of interest rate swaps | - | - | - | 12 | |||||||||
Minimum pension liability adjustment | 4 | 8 | 4 | 8 | |||||||||
Other comprehensive loss before income taxes | (80 | ) | (135 | ) | (112 | ) | (28 | ) | |||||
Income tax recovery | 27 | 44 | 38 | 9 | |||||||||
Other comprehensive loss | (53 | ) | (91 | ) | (74 | ) | (19 | ) | |||||
Balance, end of period | $ | (222 | ) | $ | (148 | ) | $ | (222 | ) | $ | (148 | ) | |
Retained earnings | |||||||||||||
Balance, beginning of period | $ | 4,763 | $ | 4,612 | $ | 4,726 | $ | 3,897 | |||||
Net income | 430 | 376 | 1,556 | 1,258 | |||||||||
Share repurchase programs (3) | (235 | ) | (207 | ) | (1,116 | ) | (207 | ) | |||||
Dividends | (67 | ) | (55 | ) | (275 | ) | (222 | ) | |||||
Balance, end of period | $ | 4,891 | $ | 4,726 | $ | 4,891 | $ | 4,726 | |||||
(1) | Includes GLT and BC Rail from May 10, 2004 and July 14, 2004, respectively. |
(2) | For the three months and year ended December 31, 2005, the Company issued 0.3 million and 3.3 million common shares, respectively, as a result of stock options exercised. At December 31, 2005, the Company had 268.4 million common shares outstanding. |
(3) | In 2005, the Company repurchased 18.0 million common shares under its share repurchase programs; 8.0 million common shares for $670 million (average price of $83.81 per share) under its new 16.0 million share repurchase program and 10.0 million common shares for $748 million (average price of $74.78 per share) under its previous 14.0 million share repurchase program, which was completed by the second quarter of 2005. |
9
CANADIAN NATIONAL RAILWAY COMPANY |
CONSOLIDATED STATEMENT OF CASH FLOWS (U.S. GAAP) |
(In millions) |
|
|
Three months ended December 31 |
|
|
|
Year ended December 31 |
| ||||||
2005 | 2004 | (1) | 2005 | 2004 | (1) | ||||||||
(Unaudited) | |||||||||||||
Operating activities | |||||||||||||
Net income | $ | 430 | $ | 376 | $ | 1,556 | $ | 1,258 | |||||
Adjustments to reconcile net income to net cash provided from | |||||||||||||
operating activities: | |||||||||||||
Depreciation and amortization | 157 | 154 | 630 | 602 | |||||||||
Deferred income taxes | 103 | 66 | 547 | 366 | |||||||||
Equity in earnings of English Welsh and Scottish Railway | 2 | (3 | ) | (4 | ) | 4 | |||||||
Other changes in: | |||||||||||||
Accounts receivable | 18 | (93 | ) | 142 | (233 | ) | |||||||
Material and supplies | 25 | 18 | (25 | ) | 10 | ||||||||
Accounts payable and accrued charges | 28 | 115 | (156 | ) | 5 | ||||||||
Other net current assets and liabilities | (75 | ) | (24 | ) | 8 | 21 | |||||||
Other | 6 | 79 | 7 | 106 | |||||||||
Cash provided from operating activities | 694 | 688 | 2,705 | 2,139 | |||||||||
Investing activities | |||||||||||||
Net additions to properties | (388 | ) | (365 | ) | (1,180 | ) | (1,072 | ) | |||||
Acquisition of BC Rail | - | - | - | (984 | ) | ||||||||
Acquisition of GLT | - | - | - | (547 | ) | ||||||||
Other, net | 15 | 23 | 105 | 192 | |||||||||
Cash used by investing activities | (373 | ) | (342 | ) | (1,075 | ) | (2,411 | ) | |||||
Dividends paid | (67 | ) | (55 | ) | (275 | ) | (222 | ) | |||||
Financing activities | |||||||||||||
Issuance of long-term debt | 987 | 1,353 | 2,728 | 8,277 | |||||||||
Reduction of long-term debt | (1,019 | ) | (1,381 | ) | (2,865 | ) | (7,579 | ) | |||||
Issuance of common shares | 11 | 25 | 115 | 86 | |||||||||
Repurchase of common shares | (290 | ) | (273 | ) | (1,418 | ) | (273 | ) | |||||
Cash provided from (used by) financing activities | (311 | ) | (276 | ) | (1,440 | ) | 511 | ||||||
Net increase (decrease) in cash and cash equivalents | (57 | ) | 15 | (85 | ) | 17 | |||||||
Cash and cash equivalents, beginning of period | 119 | 132 | 147 | 130 | |||||||||
Cash and cash equivalents, end of period | $ | 62 | $ | 147 | $ | 62 | $ | 147 | |||||
Supplemental cash flow information | |||||||||||||
Net cash receipts from customers and other | $ | 1,830 | $ | 1,740 | $ | 7,375 | $ | 6,501 | |||||
Net cash payments for: | |||||||||||||
Employee services, suppliers and other expenses | (921 | ) | (882 | ) | (3,872 | ) | (3,628 | ) | |||||
Interest | (70 | ) | (83 | ) | (306 | ) | (282 | ) | |||||
Workforce reductions | (15 | ) | (12 | ) | (87 | ) | (93 | ) | |||||
Personal injury and other claims | (21 | ) | (28 | ) | (92 | ) | (106 | ) | |||||
Pensions | (54 | ) | (34 | ) | (127 | ) | (161 | ) | |||||
Income taxes | (55 | ) | (13 | ) | (186 | ) | (92 | ) | |||||
Cash provided from operating activities | $ | 694 | $ | 688 | $ | 2,705 | $ | 2,139 | |||||
| |||||||||||||
(1) Includes GLT and BC Rail from May 10, 2004 and July 14, 2004, respectively. |
10
CANADIAN NATIONAL RAILWAY COMPANY |
SELECTED RAILROAD STATISTICS (U.S. GAAP) |
|
Three
months ended December 31 |
|
Year ended December 31 |
| ||||
|
||||||||
2005 | 2004 | (1) | 2005 | 2004 | (1) | |||
(Unaudited) | ||||||||
Statistical operating data | ||||||||
Freight revenues ($ millions) | 1,797 | 1,656 | 6,905 | 6,252 | ||||
Gross ton miles (GTM) (millions) | 87,828 | 88,636 | 342,894 | 332,807 | ||||
Revenue ton miles (RTM) (millions) | 45,598 | 45,973 | 179,701 | 174,240 | ||||
Carloads (thousands) | 1,208 | 1,245 | 4,841 | 4,578 | ||||
Route miles (includes Canada and the U.S.) | 19,221 | 19,304 | 19,221 | 19,304 | ||||
Employees (end of period) | 21,540 | 22,679 | 21,540 | 22,679 | ||||
Employees (average during period) | 21,862 | 23,043 | 22,246 | 22,470 | ||||
Productivity | ||||||||
Operating ratio (%) | 61.8 | 65.0 | 63.8 | 66.9 | ||||
Freight revenue per RTM (cents) | 3.94 | 3.60 | 3.84 | 3.59 | ||||
Freight revenue per carload ($) | 1,488 | 1,330 | 1,426 | 1,366 | ||||
Operating expenses per GTM (cents) | 1.33 | 1.27 | 1.35 | 1.32 | ||||
Labor and fringe benefits expense per GTM (cents) | 0.52 | 0.53 | 0.54 | 0.55 | ||||
GTMs per average number of employees (thousands) | 4,017 | 3,847 | 15,414 | 14,811 | ||||
Diesel fuel consumed (U.S. gallons in millions) | 101 | 103 | 403 | 391 | ||||
Average fuel price ($/U.S. gallon) | 1.89 | 1.43 | 1.72 | 1.30 | ||||
GTMs per U.S. gallon of fuel consumed | 870 | 861 | 851 | 851 | ||||
Safety indicators | ||||||||
Injury frequency rate per 200,000 person hours | 2.3 | 2.3 | 2.4 | 2.6 | ||||
Accident rate per million train miles | 2.5 | 1.7 | 1.6 | 1.6 | ||||
Financial ratios | ||||||||
Debt-to-total capitalization ratio (% at end of period) | 35.5 | 35.7 | 35.5 | 35.7 | ||||
|
(1) Includes GLT and BC Rail
from May 10, 2004 and July 14, 2004, respectively.
Certain of
the comparative statistical data and related productivity measures have been
restated to reflect changes to estimated statistical data previously
reported.
11
CANADIAN NATIONAL RAILWAY COMPANY |
SUPPLEMENTARY INFORMATION (U.S. GAAP) |
|
Three months ended December 31 | |
Year ended December 31 | |||||||||
2005 |
2004 |
(1) |
Variance Fav (Unfav) |
2005 |
2004 |
(1) |
Variance Fav (Unfav) |
|||||
(Unaudited) | ||||||||||||
Revenue ton miles (millions) | ||||||||||||
Petroleum and chemicals | 7,949 | 8,057 | (1% | ) | 31,235 | 31,421 | (1% | ) | ||||
Metals and minerals | 4,245 | 4,066 | 4% | 16,848 | 16,352 | 3% | ||||||
Forest products | 10,581 | 10,191 | 4% | 42,330 | 39,369 | 8% | ||||||
Coal | 3,003 | 3,342 | (10% | ) | 13,576 | 12,684 | 7% | |||||
Grain and fertilizers | 10,918 | 11,290 | (3% | ) | 40,393 | 40,091 | 1% | |||||
Intermodal | 8,094 | 8,185 | (1% | ) | 32,184 | 31,002 | 4% | |||||
Automotive | 808 | 842 | (4% | ) | 3,135 | 3,321 | (6% | ) | ||||
45,598 | 45,973 | (1% | ) | 179,701 | 174,240 | 3% | ||||||
Freight revenue / RTM (cents) | ||||||||||||
Total freight revenue per RTM | 3.94 | 3.60 | 9% | 3.84 | 3.59 | 7% | ||||||
Commodity groups: | ||||||||||||
Petroleum and chemicals | 3.56 | 3.33 | 7% | 3.51 | 3.37 | 4% | ||||||
Metals and minerals | 5.06 | 4.75 | 7% | 4.97 | 4.37 | 14% | ||||||
Forest products | 4.12 | 3.92 | 5% | 4.11 | 3.82 | 8% | ||||||
Coal | 2.50 | 2.15 | 16% | 2.44 | 2.24 | 9% | ||||||
Grain and fertilizers | 2.84 | 2.65 | 7% | 2.77 | 2.65 | 5% | ||||||
Intermodal | 4.19 | 3.67 | 14% | 3.95 | 3.60 | 10% | ||||||
Automotive | 17.20 | 14.85 | 16% | 16.40 | 15.36 | 7% | ||||||
Carloads (thousands) | ||||||||||||
Petroleum and chemicals | 146 | 151 | (3% | ) | 594 | 596 | - | |||||
Metals and minerals | 246 | 254 | (3% | ) | 994 | 801 | 24% | |||||
Forest products | 172 | 181 | (5% | ) | 712 | 678 | 5% | |||||
Coal | 101 | 113 | (11% | ) | 448 | 429 | 4% | |||||
Grain and fertilizers | 151 | 157 | (4% | ) | 566 | 577 | (2% | ) | ||||
Intermodal | 322 | 314 | 3% | 1,248 | 1,202 | 4% | ||||||
Automotive | 70 | 75 | (7% | ) | 279 | 295 | (5% | ) | ||||
1,208 | 1,245 | (3% | ) | 4,841 | 4,578 | 6% | ||||||
Freight revenue / carload (dollars) | ||||||||||||
Total freight revenue per carload | 1,488 | 1,330 | 12% | 1,426 | 1,366 | 4% | ||||||
Commodity groups: | ||||||||||||
Petroleum and chemicals | 1,938 | 1,775 | 9% | 1,845 | 1,777 | 4% | ||||||
Metals and minerals | 874 | 760 | 15% | 842 | 891 | (5% | ) | |||||
Forest products | 2,535 | 2,204 | 15% | 2,441 | 2,220 | 10% | ||||||
Coal | 743 | 637 | 17% | 739 | 662 | 12% | ||||||
Grain and fertilizers | 2,053 | 1,904 | 8% | 1,977 | 1,842 | 7% | ||||||
Intermodal | 1,053 | 955 | 10% | 1,018 | 929 | 10% | ||||||
Automotive | 1,986 | 1,667 | 19% | 1,842 | 1,729 | 7% | ||||||
|
(1) Includes GLT and BC Rail from May 10, 2004 and July 14, 2004, respectively.
Certain of the comparative statistical data and related productivity measures have been restated to reflect changes to estimated statistical data previously reported and reclassified in order to be consistent with the 2005 presentation.
12
CANADIAN NATIONAL RAILWAY COMPANY |
SUPPLEMENTARY INFORMATION PRO FORMA CONSOLIDATED STATEMENT OF INCOME (U.S. GAAP) |
(In millions, except per share data) |
|
Year ended December 31 | ||||||||
|
2005 | |
|
2004 pro forma |
(1) |
Variance Fav (Unfav) |
| ||
(Unaudited) | |||||||||
Revenues | |||||||||
Petroleum and chemicals | $ | 1,096 | $ | 1,086 | 1% | ||||
Metals and minerals | 837 | 773 | 8% | ||||||
Forest products | 1,738 | 1,606 | 8% | ||||||
Coal | 331 | 291 | 14% | ||||||
Grain and fertilizers | 1,119 | 1,068 | 5% | ||||||
Intermodal | 1,270 | 1,117 | 14% | ||||||
Automotive | 514 | 510 | 1% | ||||||
Other items | 335 | 322 | 4% | ||||||
7,240 | 6,773 | 7% | |||||||
Operating expenses | |||||||||
Labor and fringe benefits | 1,841 | 1,895 | 3% | ||||||
Purchased services and material | 814 | 788 | (3% | ) | |||||
Depreciation and amortization | 627 | 618 | (1% | ) | |||||
Fuel | 725 | 550 | (32% | ) | |||||
Equipment rents | 192 | 234 | 18% | ||||||
Casualty and other | 417 | 460 | 9% | ||||||
4,616 | 4,545 | (2% | ) | ||||||
Operating income | 2,624 | 2,228 | 18% | ||||||
Interest expense | (299 | ) | (337 | ) | |||||
Other income (loss) | 12 | (19 | ) | ||||||
Income before income taxes | 2,337 | 1,872 | |||||||
Income tax expense | (781 | ) | (600 | ) | |||||
Net income | $ | 1,556 | $ | 1,272 | |||||
Operating ratio | 63.8 | % | 67.1 | % | 3.3 | ||||
Diluted earnings per share | $ | 5.54 | $ | 4.39 | |||||
Diluted weighted-average number of shares | 281.1 | 289.9 | |||||||
(1) The pro forma figures reflect the Company's results of operations as if the Company had acquired GLT and BC Rail on January 1, 2004.
Certain of the 2004 comparative figures have been reclassified in order to be consistent with the 2005 presentation.
13
CANADIAN NATIONAL RAILWAY COMPANY |
SUPPLEMENTARY PRO FORMA INFORMATION (U.S. GAAP) |
|
Year ended December 31 | |||||
2005 | 2004 pro forma |
(1) | Variance Fav (Unfav) |
| ||
(Unaudited) | ||||||
Revenue ton miles (millions) | ||||||
Petroleum and chemicals | 31,235 | 31,868 | (2 | %) | ||
Metals and minerals | 16,848 | 17,257 | (2 | %) | ||
Forest products | 42,330 | 41,119 | 3 | % | ||
Coal | 13,576 | 12,791 | 6 | % | ||
Grain and fertilizers | 40,393 | 40,248 | - | |||
Intermodal | 32,184 | 31,002 | 4 | % | ||
Automotive | 3,135 | 3,321 | (6 | %) | ||
179,701 | 177,606 | 1 | % | |||
Freight revenue / RTM (cents) | ||||||
Total freight revenue per RTM | 3.84 | 3.63 | 6 | % | ||
Commodity groups: | ||||||
Petroleum and chemicals | 3.51 | 3.41 | 3 | % | ||
Metals and minerals | 4.97 | 4.48 | 11 | % | ||
Forest products | 4.11 | 3.91 | 5 | % | ||
Coal | 2.44 | 2.28 | 7 | % | ||
Grain and fertilizers | 2.77 | 2.65 | 5 | % | ||
Intermodal | 3.95 | 3.60 | 10 | % | ||
Automotive | 16.40 | 15.36 | 7 | % | ||
Carloads (thousands) | ||||||
Petroleum and chemicals | 594 | 603 | (1 | %) | ||
Metals and minerals | 994 | 991 | - | |||
Forest products | 712 | 729 | (2 | %) | ||
Coal | 448 | 446 | - | |||
Grain and fertilizers | 566 | 579 | (2 | %) | ||
Intermodal | 1,248 | 1,202 | 4 | % | ||
Automotive | 279 | 295 | (5 | %) | ||
4,841 | 4,845 | - | ||||
Freight revenue / carload (dollars) | ||||||
Total freight revenue per carload | 1,426 | 1,331 | 7 | % | ||
Commodity groups: | ||||||
Petroleum and chemicals | 1,845 | 1,801 | 2 | % | ||
Metals and minerals | 842 | 780 | 8 | % | ||
Forest products | 2,441 | 2,203 | 11 | % | ||
Coal | 739 | 652 | 13 | % | ||
Grain and fertilizers | 1,977 | 1,845 | 7 | % | ||
Intermodal | 1,018 | 929 | 10 | % | ||
Automotive | 1,842 | 1,729 | 7 | % | ||
Certain of the comparative statistical data and related productivity measures have been restated to reflect changes to estimated statistical data previously reported and reclassified in order to be consistent with the 2005 presentation.
14
CANADIAN NATIONAL RAILWAY COMPANY |
NON-GAAP MEASURE (U.S. GAAP) |
Free
cash flow
The
Company believes that free cash flow is a useful measure of performance as it
demonstrates the Companys ability to generate cash after the payment of capital
expenditures and dividends. Free cash flow does not have any standardized
meaning prescribed by GAAP and may, therefore, not be comparable to similar
measures presented by other companies. The Company defines free cash flow as
cash provided from operating activities, excluding changes in the level of
accounts receivable sold under the securitization program, less investing
activities and dividends paid, and adjusted for significant acquisitions as they
are not indicative of normal day-to-day investments in the Companys asset
base, calculated as follows:
In millions | Three
months ended December 31 |
|
Year
ended December 31 | ||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||
Cash provided from operating activities | $ | 694 | $ | 688 | $ | 2,705 | $ | 2,139 | |||||
Less: | |||||||||||||
Investing activities | (373 | ) | (342 | ) | (1,075 | ) | (2,411 | ) | |||||
Dividends paid | (67 | ) | (55 | ) | (275 | ) | (222 | ) | |||||
Cash provided (used) before financing activities | 254 | 291 | 1,355 | (494 | ) | ||||||||
Adjustments: | |||||||||||||
Change in accounts receivable sold | (11 | ) | (20 | ) | (54 | ) | (12 | ) | |||||
Acquisition of BC Rail | - | - | - | 984 | |||||||||
Acquisition of GLT | - | - | - | 547 | |||||||||
Free cash flow | $ | 243 | $ | 271 | $ | 1,301 | $ | 1,025 | |||||
|
15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Canadian National Railway Company | ||
Date:Janaury 25, 2006 | By: | /s/ Cristina Circelli |
Name:
Cristina Circelli Title: General Counsel |