AMM Steel Tube + Pipe Trans-loading Options Kevin Hoffmeyer General Mgr, International Bulk Services

Transcription

1 AMM Steel Tube + Pipe Trans-loading Options Kevin Hoffmeyer General Mgr, International Bulk Services March 11,

2 FORWARD-LOOKING STATEMENTS The financial results in this presentation were determined on the basis of U.S. GAAP. Please refer to the website for the reconciliation of certain non- GAAP measures to comparable GAAP measures. To the extent we have provided guidance which are non-gaap financial measures, we may not be able to provide a reconciliation to the GAAP measures, due to unknown variables and uncertainty related to future results. Certain information included in this presentation constitutes forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and under Canadian securities laws. CN cautions that, by their nature, these forward-looking statements involve risks, uncertainties and assumptions. The Company cautions that its assumptions may not materialize and that current economic conditions render such assumptions, although reasonable at the time they were made, subject to greater uncertainty. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results or performance of the Company or the rail industry to be materially different from the outlook or any future results or performance implied by such statements. Key assumptions used in determining forward-looking information are set forth below. Current assumptions CN is maintaining the 2013 financial outlook it issued on Jan. 22, 2013, except for its revised plan to invest approximately C$2 billion in capital programs in 2013, compared with the previous plan to invest C$1.9 billion. Approximately C$1.1 billion of the total expenditure will be targeted on track infrastructure to maintain a safe and fluid railway network. In addition, the Company will invest in projects to support a number of productivity and growth initiatives. Important risk factors that could affect the forward-looking statements include, but are not limited to, the effects of general economic and business conditions, industry competition, inflation, currency and interest rate fluctuations, changes in fuel prices, legislative and/or regulatory developments, compliance with environmental laws and regulations, actions by regulators, various events which could disrupt operations, including natural events such as severe weather, droughts, floods and earthquakes, labor negotiations and disruptions, environmental claims, uncertainties of investigations, proceedings or other types of claims and litigation, risks and liabilities arising from derailments, and other risks detailed from time to time in reports filed by CN with securities regulators in Canada and the United States. Reference should be made to Management s Discussion and Analysis in CN s annual and interim reports, Annual Information Form and Form 40-F filed with Canadian and U.S. securities regulators, available on CN s website, for a summary of major risk factors. CN assumes no obligation to update or revise forward-looking statements to reflect future events, changes in circumstances, or changes in beliefs, unless required by applicable Canadian securities laws. In the event CN does update any forward-looking statement, no inference should be made that CN will make additional updates with respect to that statement, related matters, or any other forward-looking statement. CN has made a number of economic and market assumptions in preparing its 2013 outlook. The Company is forecasting that North American industrial production for the year will increase by about two per cent. CN also expects U.S. housing starts to be in the range of 950,000 units and U.S. motor vehicles sales to be approximately 15 million units. In addition, CN is assuming that 2013/2014 grain crop production in both Canada and the U.S. will be in-line with their respective five-year averages. With respect to the 2012/2013 crop, production in Canada was slightly above the five-year average while production in the U.S. was below the five-year average. With these assumptions, CN assumes carload growth of three to four per cent, along with continued pricing improvement above inflation. CN also assumes the Canadian-U.S. exchange rate to be around parity for 2013 and that the price of crude oil (West Texas Intermediate) for the year to be in the range of US$90-$100 per barrel. 2

3 A Great Franchise Global West 26% Domestic Canada 20% Global East 3% Transborder 32% Well Diversified Portfolio Intermodal 21% Petroleum and Chemicals 18% Grain and Fertilizers 15% Forest Products 13% Metals and Minerals 12% Coal 7% Automotive 5% Other Revenues 9% Based on 2013 revenues Global South 3% Domestic U.S. 16% 22,000 route-miles Unique 3 coast reach, accessing over 75% of NA s population Moving 20% of Canada s export traffic Enabling over $250 billion worth of trade Unparalleled Network Reach 3

4 More than a Railroad Prince Rupert Hay River Fort McMurray Prince George Edmonton Fort Saskatchewan Saskatoon Cornerbrook St-John s Vancouver Calgary Wilmar Winnipeg Thunder Bay Montreal Quebec Moncton Saint John Halifax Port Access Automotive Distribution Facilities Toronto Buffalo Offices across Asia and South America Forest Products Distribution Centers CargoFlo Bulk Handling Facilities Metals Distribution Centers Intermodal Terminals Joliet Opened 2013 Memphis Jackson Detroit Chicago New Orleans Indianapolis Opened 2013 Connecting domestic and international supply chains Providing greater reach and additional destinations Also offering innovative products, i.e. CoolCargo and OnDeck container sleds

5 Supply Chain Solutions Manufacture Transport Load Ship Transport Destination Warehousing and Distribution More than 80 strategically located facilities CargoFlo Network of 19 CargoFlo bulk distribution terminals Facilitate the movement of liquid and solid products quickly, safely and contaminant-free Logistics Parks Located in Calgary, Chicago, Memphis, Montreal and Toronto Enhances customers access, connecting rail with trucks, vessels and barges while providing warehousing Freight Forwarding Simplifies international importing and exporting which can involve many carriers, administrative and legal requirements Customs Brokerage Service Ensures that shipments in and out of the U.S., Canada, and Mexico are cleared and managed efficiently 5

6 Loads in thousands Supply Chain Solutions: Iron Ore CN owns and operates four ore docks on three Great Lakes Two Harbors MN (L. Superior) Duluth MN (L. Superior) Escanaba MI (L. Michigan) Conneaut OH (L. Erie) CN owns Great Lakes Fleet, the top iron ore shipper in the Great Lakes Direct rail access to the iron range in Minnesota and the producer in the Upper Peninsula, MI 621, , , , Supporting Growth in the Steel Industry 6

7 Port Access

8 Gulf Coast Port Access

9 Served by CN and other Class I railroads, plus 70 steamship lines, 16 barge lines and 75 truck lines Average of 2,400 vessel calls per year 22 million square-foot (2 million square-metre) cargo-handling area 6 million square-foot (558,000 square-metre) covered storage area Direct, economical rail connections to or from other North American ports Port of New Orleans

10 4 million square-foot (372,000 square-metre) cargo handling area 5 miles (8 kms) of waterfront 37 berths (27 for General Cargo/Intermodal) 1,205 vessel calls in 2000 (portwide) Terminal railroad access to CN mail line Port of Mobile

11 West Coast Access

12 Gateway between Asia-Pacific and key North American markets Daily Intermodal doublestack transcontinental train service to Canadian and US markets 20 major cargo terminals 50 berths Port of Vancouver

13 Closest port to Asia by up to 58 hours of sailing time compared to any other West Coast port in North America Deepest harbour in North America Year-round service ice-free harbor and no congestion Closest port to open ocean minimizes pilotage time in Canadian waters and reduces costs Port of Prince Rupert

14 Atlantic Coast Port Access

15 Shortest and most direct shipping route between Central Canada, the U.S. Midwest and Northeast Year-round navigation for ocean vessels Fully-integrated seamless CN Intermodal transportation to major markets Direct CN dockside rail access no transshipment required Port of Montreal

16 Closest major port to Europe, in close proximity to the Great Circle Route One full day faster to Europe than other North American east coast ports Preferred connection with Europe, the Mediterranean, the Middle East first port of call for westbound and last port of call for eastbound voyages Port of Halifax

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18 Overcome Adversity & Deliver Results

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20 Steel Transload Facilities 20

21 Loads in thousands Metals & Minerals CN serves customers that are leaders in all areas of the metals and minerals sectors Including steel, construction materials, iron ore, non-ferrous metals and concentrates, machinery and dimensional loads Our far-reaching rail service, transload and port facilities make us a strong partner We are working closely with customers to develop innovative transportation solutions to make the entire supply chain more efficient With a focus on first-mile and last-mile initiatives, CN has improved car order fulfillment Supporting Growth in the Oil-and-Gas Industry & the Manufacturing Sector 21

22 Fort McMurray Bienfait Brockville Windsor Hamilton Edmonton Oil & Gas, AB Edmonton, AB Fort McMurray, AB Fort Saskatchewan, AB Calgary, AB Bienfait, SK Saskatoon, SK Regina, SK Brockville, ON Montreal, QC Toronto, ON Hamilton, ON Windsor, ON Chicago, IL Memphis, TN Steel Transload Facilities 22

23 Eastern Canada Terminals Hamilton & Toronto Toronto CN s Toronto MDC is positioned in the middle of Canada s largest consumer market 60,000 square foot facility with 28,000 square feet of inventory storage space Products handled: coil, sheet, plate, bar & structural, pipe & tube and dimensional loads Hamilton Hamilton area is home to Canada s steel manufacturing, distribution and processing industries CN s Hamilton MDC is strategically positioned in the largest Canada U.S. Steel transportation corridor 60,000 square foot facility with 20,000 square feet of inventory storage space Both facilities are temperature controlled and offer 24/7 transload and warehouses services. 23

24 NASCO Chicago Terminal Chicago is the US Midwest s distribution hub for metals and building supplies Located on 190 acres of land at the Port of Chicago adjacent to CN s Kirk Yard and Interstate 90 Multi Modal Transportation options by rail, truck, intermodal container inland barge and ocean going vessel Products handled: coil, sheet, plate, bar & structural, pipe & tube, dimensional loads, bulk cargoes (granulated pig iron, pig iron, DRI and ferro-manganese) Current throughout capacity at 1,700,000 tons annually 24

25 Western Canada Terminals Fort Saskatchewan Facility, AB Focused on the handling of steel, pipe, frac sand, oil equipment and products, caustic soda, methanol, lumber products, dimensional loads and more Edmonton Oil & Gas Service Centre, AB Located just minutes away from CN s Clover Bar Yard in the heart of Alberta s thriving oil and gas industry A 44-acre facility with outdoor lighting and fencing Edmonton Metals Distribution Centre An 11-acre facility, focused on the handling of structural steel, bar, plate, coil and tubular products Fort McMurray Terminal 180 acres facility capable of handling both finished steel and raw materials Calgary, AB Fort McMurray, AB Regina, SK Saskatoon, SK 25

26 Innovative Products Working with our customers to design the equipment, the loading patterns and the processes required to move their product safely and efficiently. MTT Insert Coil-Tainer Flat Rack Innovate, Develop, Implement, Support, Improve Langh Container 26

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28 Mobile Transportation Trays (MTTs) Safe and secure loading in 53ft containers Seamless travel on CN network Commodities travel inside the container and are protected from the elements No costly tarping required Payload capacity to 55,000 lbs in Canada and Mexico (minus weight of MTT) CN network extends to Mexico City, Monterrey, and San Luis Potosi and all major manufacturing centres CN transloading facilities in Alberta, British Columbia, Ontario and Illinois capable of loading and unloading the inserts Forecasted Demand MTT Equivalent Demand Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 28

29 Flat Racks Conventional Flatracks Currently leasing small fleet of 40 conventional flat racks. 48 foot FR s also available if needed Leased fleet used primarily for Stubbe business from ON to AB pre-fab concrete slabs Rail Decks Currently approved by AAR in interchange and allowed on CN Network with restrictions (these restrictions do not allow for movement of Canadian payloads) Deflection testing successfully conducted at NASCO on Apr 23 using CN Canadian payload maximum of 60,000 lbs Restrictions to be revised to allow new max payload and double stacking on top of Rail Decks. Revised restrictions will generate renewed interest in product 29

30 Exploring Options... CN-approved for weight distribution of steel coil: Coil-Tainer Langh Coil Container StrangLLP Holland Universal Cargosled 30

31 2-3 additional slides on MTT, flatracks 203 Thank You and coil-tainers to be added. Becoming a True Supply Chain Enabler 31