Canadian National's First-Quarter 2000 Net Income Rises 41 Per Cent to $196 Million From $139 Million a Year Earlier, Excluding Non-Recurring Items in Both Quarters.Business Editors MONTREAL--(BUSINESS WIRE)--April 24, 2000 (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :CNR See riser card. CNR - Communication and Network Riser .) (NYSE NYSE See: New York Stock Exchange :CNI (1) (Certified NetWare Instructor) See Novell certification. (2) (Coalition for Networked Information, Washington, DC, www.cni.org) A partnership of the Association of Research Libraries, CAUSE and EDUCOM, founded in 1990. ) Solid Revenue Growth and Better Asset Utilization Drive 4.6-Point Improvement in CN's Operating Ratio Operating Ratio A ratio that shows the efficiency of management by comparing operating expense to net sales: Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. National said today strong revenue growth and continued cost control generated first-quarter 2000 net income of $196 million, excluding a non-recurring item. Including a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. $58-million after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. gain related to the exchange of minority equity investments for common stock in 360networks Inc., CN's first-quarter 2000 net income rose to $254 million. For the first quarter of 1999, CN's net income was $139 million, excluding a $5-million after-tax cumulative effect of changes in accounting policy. Including those accounting changes, net income for the first three months of 1999 was $144 million. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the first three months of 2000 were 96 cents, excluding the one-time gain (28 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. ). Including it, CN's diluted earnings per share were $1.24. For the comparable period of 1999, diluted earnings per share were 72 cents, excluding the accounting policy changes (two cents per share). Including them, diluted earnings per share were 74 cents. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the latest quarter rose 29 per cent to $382 million. CN's operating ratio - a key measure of railroad railroad or railway, form of transportation most commonly consisting of steel rails, called tracks, on which freight cars, passenger cars, and other rolling stock are drawn by one locomotive or more. financial performance - improved by 4.6 points in the quarter to 72.2 per cent. First-quarter 2000 revenue increased by eight per cent to $1,372 million, with carloads rising by 10 per cent to 952 thousand. Despite the increased workload The term workload can refer to a number of different yet related entities. An amount of labor While a precise definition of a workload is elusive, a commonly accepted definition is the hypothetical relationship between a group or individual human operator and task demands. and significantly higher fuel costs, operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. rose only two per cent to $990 million. CN President and Chief Executive Officer Paul Paul, 1901–64, king of the Hellenes (1947–64), brother and successor of George II. He married (1938) Princess Frederika of Brunswick. During Paul's reign Greece followed a pro-Western policy, and the Cyprus question was temporarily resolved. M. Tellier said: "I am particularly pleased with our strong revenue performance in the quarter. It shows that CN is delivering on the commitment to build its business through superior service and strategic initiatives such as the acquisition of Illinois Illinois, river, United States Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. Central. "Five of CN's seven business units registered revenue gains. We benefited from strong exports of both Canadian grain and U.S. soybeans. Strong Canadian potash potash: see potassium carbonate. potash Name used for various inorganic compounds of potassium, chiefly the carbonate (K2CO3), a white crystalline material formerly obtained from wood ashes. exports, particularly to offshore markets, also contributed to revenue growth. "Robust North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. demand for automotive products, coupled with significant market share gains by CN, fueled the strong rise in automotive revenue. In addition, our intermodal in·ter·mod·al adj. Relating to transportation by more than one means of conveyance, as by truck and rail: intermodal transport. business unit enjoyed good traffic in both import/export and domestic markets and captured market share. Better market conditions for steel contributed to increased metals and minerals revenue, and forest products revenue improved as a result of higher movements of pulp and paper, and lumber lumber, term for timber that has been cut into boards for use as a building material. The major steps in producing lumber involve logging (the felling and preparation of timber for shipment to sawmills), sawing the logs into boards, grading the boards according to and panels. "The discipline of our scheduled railroad service plan continues to generate major dividends for CN and its customers. The plan is producing profitable revenue growth, containing operating costs operating costs npl → gastos mpl operacionales and vastly improving the utilization of our locomotive locomotive, vehicle used to pull a train of unpowered railroad cars. Types of Locomotives The steam-powered locomotive played a key role during the development and golden age of railroading, but, despite its long and picturesque history, it has and freight car fleets. It's it's 1. Contraction of it is. 2. Contraction of it has. See Usage Note at its. it's it is or it has it's be ~have also giving shippers a better transportation product - CN recorded a 90 per cent on-time performance for carload carload In commodities trading, a railroad car or truckload of grain that ranges from 1,400 to 2,500 bushels. and intermodal shipments during the latter part of the quarter. This is a significant feat, making CN a service leader among North American railroads rail·road n. 1. A road composed of parallel steel rails supported by ties and providing a track for locomotive-drawn trains or other wheeled vehicles. 2. ." The business units that posted revenue increases during first-quarter 2000 were grain and fertilizers (26 per cent); automotive (25 per cent); intermodal (11 per cent); metals and minerals (six per cent) and forest products (three per cent). Coal revenue declined 23 per cent owing to owing to prep. Because of; on account of: I couldn't attend, owing to illness. owing to prep → debido a, por causa de tough markets for Canadian metallurgical met·al·lur·gy n. 1. The science that deals with procedures used in extracting metals from their ores, purifying and alloying metals, and creating useful objects from metals. 2. coal, and petroleum and chemicals revenue slipped two per cent. During the latest quarter, fuel expenses jumped 63 per cent, reflecting significantly higher crude oil prices. Depreciation and amortization expenses rose six per cent, material costs increased three per cent and casualty and other expenses rose two per cent. Expenses were reduced for equipment rents (15 per cent); operating taxes (13 per cent); purchased services (four per cent); and labor and fringe benefits fringe benefits, n.pl the benefits, other than wages or salary, provided by an employer for employees (e.g., health insurance, vacation time, disability income). (three per cent). The financial results reported in this press release were prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting . Canadian National Railway Company Canadian National Railway Company (NYSE: CNI, TSX: CNR) is a Canadian rail transportation company that operates the Canadian National Railway. It was created in December, 1918 as a Crown corporation of the Government of Canada to nationalize several bankrupt rail systems spans Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of Mexico Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east , serving the ports of Vancouver Vancouver, city, Canada Vancouver, city (1991 pop. 471,844), SW British Columbia, Canada, on Burrard Inlet of the Strait of Georgia, opposite Vancouver Island and just N of the Wash. border. , Prince Rupert Prince Rupert, city (1991 pop. 16,620), W British Columbia, Canada, on Kaien Island, in Chatham Sound near the mouth of the Skeena River, S of the Alaska border. , B.C., Montreal Montreal (mŏn'trēôl`), Fr. Montréal (môNrāäl`), city (1991 pop. 1,017,666), S Que., Canada, on Montreal island, surrounded by St. Lawrence River and Rivière des Prairies. , Halifax Halifax, city, Canada Halifax, city (1991 pop. 114,455), provincial capital, S central N.S., Canada, on the Atlantic Ocean. It is the largest city in the Maritime Provinces and is one of Canada's principal ice-free Atlantic ports. , New Orleans New Orleans (ôr`lēənz –lənz, ôrlēnz`), city (2006 pop. 187,525), coextensive with Orleans parish, SE La., between the Mississippi River and Lake Pontchartrain, 107 mi (172 km) by water from the river mouth; founded , and Mobile, Ala ALA aminolevulinic acid. Ala alanine. ala (a´lah) pl. a´lae [L.] a winglike process. ., and the key cities of Toronto Toronto (tərŏn`tō), city (1998 est pop. 2,400,000), provincial capital, S Ont., Canada, on Lake Ontario. Toronto is the largest city in Canada and since the 1970s has been one of the fastest-changing cities in North America, experiencing , Buffalo, Chicago Chicago, city, United States Chicago (shĭkä`gō, shĭkô`gō), city (1990 pop. 2,783,726), seat of Cook co., NE Ill., on Lake Michigan; inc. 1837. , Detroit, Memphis, St. Louis, Jackson Jackson. 1 City (1990 pop. 37,446), seat of Jackson co., S Mich., on the Grand River; inc. 1857. It is an industrial and commercial center in a farm region. , Miss., with connections to all points in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. .
CANADIAN NATIONAL RAILWAY COMPANY
CONSOLIDATED STATEMENT OF INCOME (U.S. GAAP)
----------------------------------------------------------------------
----------------------------------------------------------------------
(In millions except per share data)
Three months ended
March 31
---------------------------
2000 1999
--------------------------------------------------------------------
(Unaudited)
Revenues $1,372 $1,269
Operating expenses 990 974
--------------------------------------------------------------------
Operating income 382 295
Interest expense (76) (81)
Other income (Note 3) 89 14
--------------------------------------------------------------------
Income before income taxes
and cumulative effect
of changes in accounting policy 395 228
Income tax expense (141) (89)
--------------------------------------------------------------------
Income before cumulative effect
of changes in accounting policy 254 139
Cumulative effect of changes
in accounting policy - 5
--------------------------------------------------------------------
Net income $254 $144
--------------------------------------------------------------------
--------------------------------------------------------------------
Earnings per share
Basic earnings per share before
cumulative effect of
changes in accounting policy $1.27 $0.72
Basic earnings per share $1.27 $0.75
Diluted earnings per share
before cumulative effect of
changes in accounting policy $1.24 $0.72
Diluted earnings per share $1.24 $0.74
Weighted average number of shares
Basic 200.7 191.9
Diluted 207.8 193.8
--------------------------------------------------------------------
--------------------------------------------------------------------
Certain of the 1999 comparative figures have been reclassified in
order to be consistent with the 2000 presentation.
CANADIAN NATIONAL RAILWAY COMPANY
CONSOLIDATED STATEMENT OF OPERATING INCOME (U.S. GAAP)
--------------------------------------------------------------------
--------------------------------------------------------------------
(In millions)
Three months ended March 31
------------------------------------
Variance
2000 1999 Fav
(Unfav)
--------------------------------------------------------------------
(Unaudited)
Revenues
Petroleum and chemicals $219 $224 (2 %)
Metals and minerals 95 90 6 %
Forest products 250 243 3 %
Coal 85 111 (23 %)
Grain and fertilizers 316 251 26 %
Intermodal 209 189 11 %
Automotive 148 118 25 %
Other items 50 43 16 %
---------------------------------------------------------
1,372 1,269 8 %
Operating expenses
Labor and fringe benefits 391 404 3 %
Purchased services 140 146 4 %
Depreciation and amortization 132 124 (6 %)
Equipment rents 70 82 15 %
Fuel 109 67 (63 %)
Material 62 60 (3 %)
Operating taxes 41 47 13 %
Casualty and other 45 44 (2 %)
---------------------------------------------------------
990 974 (2 %)
---------------------------------------------------------
Operating income $382 $295 29 %
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Operating ratio 72.2 % 76.8 % 4.6
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Certain of the 1999 comparative figures have been reclassified in
order to be consistent with the 2000 presentation.
CANADIAN NATIONAL RAILWAY COMPANY
CONSOLIDATED BALANCE SHEET (U.S. GAAP)
-------------------------------------------------------------------
-------------------------------------------------------------------
(In millions)
March 31 December March
31 31
2000 1999 1999
--------------------------------------------------------------------
(Unaudited) (Unaudited)
Assets
Current assets:
Cash and cash equivalents $180 $305 $102
Accounts receivable (Note 4) 751 800 777
Material and supplies 141 115 174
Deferred income taxes 131 146 159
Other 192 149 135
--------------------------------------------------------------------
1,395 1,515 1,347
Properties 14,660 14,620 14,167
Other assets and
deferred charges 377 295 320
--------------------------------------------------------------------
Total assets $16,432 $16,430 $15,834
--------------------------------------------------------------------
--------------------------------------------------------------------
Liabilities and shareholders'
equity
Current liabilities:
Accounts payable and
accrued charges $1,281 $1,373 $1,383
Current portion of
long-term debt 270 271 199
Other 90 120 88
--------------------------------------------------------------------
1,641 1,764 1,670
Deferred income taxes 3,055 2,975 2,722
Other liabilities and
deferred credits 1,297 1,287 1,487
Long-term debt 3,951 3,948 4,791
Convertible preferred securities 335 334 -
Shareholders' equity:
Common shares (Note 4) 4,482 4,597 4,148
Accumulated other
comprehensive income
(loss) (Note 5) (5) (6) 3
Retained earnings 1,676 1,531 1,013
--------------------------------------------------------------------
6,153 6,122 5,164
--------------------------------------------------------------------
Total liabilities and
shareholders' equity $16,432 $16,430 $15,834
--------------------------------------------------------------------
--------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (U.S. GAAP)
---------------------------------------------------------------------
---------------------------------------------------------------------
(In millions)
Accumulated
Issued and other Total
outstanding Common comprehensive Retained shareholders'
common shares shares income(loss) earnings equity
----------------------------------------------------------------------
(Unaudited)
Balance,
December 31,
1999 202.4 $4,597 $(6) $1,531 $6,122
Net income - - - 254 254
Stock
options
exercised
and employee
share plans 0.1 6 - - 6
Share
repurchase
program
(Note 4) (5.3) (121) - (74) (195)
Other
comprehensive
income
(Note 5) - - 1 - 1
Dividends - - - (35) (35)
---------------------------------------------------------------------
Balance,
March 31,
2000 197.2 $4,482 $(5) $1,676 $6,153
----------------------------------------------------------------------
----------------------------------------------------------------------
Certain of the 1999 comparative figures have been reclassified in
order to be consistent with the 2000 presentation.
CANADIAN NATIONAL RAILWAY COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS (U.S. GAAP)
----------------------------------------------------------------------
----------------------------------------------------------------------
(In millions)
Three months ended
March 31
---------------------------
2000 1999
--------------------------------------------------------------------
(Unaudited)
Operating activities
Net income $254 $144
Non-cash items in income:
Cumulative effect of changes
in accounting policy - (5)
Depreciation and amortization 135 127
Deferred income taxes 92 80
Gain on sale of investments (Note 3) (84) -
Other - (2)
Changes in:
Accounts receivable (Note 4) 49 (123)
Material and supplies (26) (20)
Accounts payable and accrued charges (52) (41)
Other net current assets and liabilities (73) (30)
Payments for workforce reduction (61) (57)
Other 17 (34)
--------------------------------------------------------------------
Cash provided from operating activities 251 39
--------------------------------------------------------------------
Investing activities
Net additions to properties (137) (185)
Net proceeds (costs) from
disposal of properties 11 (11)
Other - (1)
--------------------------------------------------------------------
Cash used by investing activities (126) (197)
--------------------------------------------------------------------
Dividends paid to shareholders (35) (29)
Financing activities
Issuance of long-term debt - 14
Reduction of long-term debt (41) (48)
Issuance of common shares 4 7
Repurchase of common shares (Note 4) (178) -
--------------------------------------------------------------------
Cash used by financing activities (215) (27)
--------------------------------------------------------------------
Net decrease in cash (125) (214)
Cash and cash equivalents,
beginning of period 305 316
--------------------------------------------------------------------
Cash and cash equivalents,
end of period $180 $102
--------------------------------------------------------------------
--------------------------------------------------------------------
Certain of the 1999 comparative figures have been reclassified in
order to be consistent with the 2000 presentation.
CANADIAN NATIONAL RAILWAY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (U.S. GAAP)
----------------------------------------------------------------------
----------------------------------------------------------------------
Note 1 - Basis of presentation In the opinion of management, the accompanying unaudited interim financial statements, prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ), contain all adjustments (consisting of normal recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. ) necessary to present fairly the Company's financial position as at March 31, 2000, December 31 and March 31, 1999, its results of operations for the three months ended March 31, 2000 and 1999 and cash flows for the three months ended March 31, 2000 and 1999. The Company has consolidated the results of Illinois Central Corporation (IC) effective January 1, 1999. While management believes that the disclosures presented are adequate to make the information not misleading, these consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge and notes should be read in conjunction with the Company's Annual Consolidated Financial Statements. Note 2 - Proposed combination of Canadian National and Burlington Northern Santa Fe Santa Fe, city, Argentina Santa Fe, city (1991 pop. 341,000), capital of Santa Fe prov., NE Argentina, a river port near the Paraná, with which it is connected by canal. On December 18, 1999, CN and Burlington Northern Santa Fe (BNSF BNSF Burlington Northern Santa Fe Corporation (railroad) ) entered into a Combination Agreement (the Combination) providing for the combination of the two companies (see Note 3 to the Company's 1999 Annual Consolidated Financial Statements). The Combination is subject to, among other things, approval by the shareholders of CN and BNSF, as well as approvals by Quebec Superior Court Quebec Superior Court is the highest trial Court in the Province of Quebec, Canada. It consists of 144 judges who are appointed by the federal government following the recommendation of the Premier of Quebec. and the U.S. Surface Transportation Board (STB See set-top box. STB - set-top box ). On March 17, 2000, the STB issued a decision directing large railroads not to pursue further merger activities until the STB has adopted new rules governing gov·ern v. gov·erned, gov·ern·ing, gov·erns v.tr. 1. To make and administer the public policy and affairs of; exercise sovereign authority in. 2. merger proceedings, which rules are to be issued in 15 months. Also, on March 17, 2000, CN issued a statement indicating the STB's delay of the proposed combination between CN and BNSF is contrary to public interest and that CN will appeal the STB decision, principally on the ground that the STB exceeded its powers in making this decision. On April 11, 2000, the Company announced that it had filed a motion with the United States Court of Appeals The United States courts of appeals (or circuit courts) are the intermediate appellate courts of the United States federal court system. A court of appeals decides appeals from the district courts within its federal judicial circuit, and in some instances from other for the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). Circuit (the Court) to stay the 15 month moratorium A suspension of activity or an authorized period of delay or waiting. A moratorium is sometimes agreed upon by the interested parties, or it may be authorized or imposed by operation of law. on rail mergers. In a separate motion, CN petitioned the Court to expedite ex·pe·dite tr.v. ex·pe·dit·ed, ex·pe·dit·ing, ex·pe·dites 1. To speed up the progress of; accelerate. 2. its judicial review of the STB's decision. Note 3 - Other income In March 2000, the Company exchanged its minority equity investments in certain joint venture companies for 11.4 million shares of 360networks Inc. (formerly Worldwide Fiber Inc.), a company which offers broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). network services for telecommunications companies See telecom company. , information service providers, application service providers and data-centric enterprises. The share exchange agreement was reached in connection with 360networks' April 20, 2000 initial public offering (IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. ) at a price of U.S.$14 per share. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the terms of the agreement with 360networks and securities regulations, it is not anticipated that the Company will sell its shares in 360networks within twelve months of the IPO. The Company recorded the shares received at their estimated fair value resulting in a pre-tax gain of $84 million, $58 million after-tax ($0.29 per basic share or $0.28 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share). The Company used the equity method of accounting for its minority equity investments until the exchange was completed. Following the exchange, the investment in 360networks Inc. was accounted for using the cost method. Beginning in the second quarter of 2000, following the IPO, the Company commenced accounting for its investment in accordance with Statement of Financial Accounting Standards (SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System ) No. 115, "Accounting for Certain Investments in Debt and Equity Securities." The shares will be classified as "available-for-sale securities" whereby the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of the shares will be adjusted at each balance sheet date to reflect the market value of the Company's shares. The unrealized gains Unrealized Gain A profit that results from holding on to an asset rather than cashing it in and using the funds. Notes: Let's say you own a stock that has doubled, but you haven't sold it yet. This is said to be an unrealized gain. and losses, net of taxes, will be reported as part of Other comprehensive income until such time as the shares are either sold or reclassifed to "trading securities." At the time of sale or reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. to "trading securities", the unrealized gain or loss, net of taxes, previously reported in Other comprehensive income would be reversed and reported in income. Under separate right-of-way sale agreements, the Company will receive revenues and fiber-optic strands for its own rail purposes. Once construction of the network is completed, the Company will have an uninterrupted North American fiber-optic-based communications network The transmission channels interconnecting all client and server stations as well as all supporting hardware and software. on its rights-of-way between Vancouver, Halifax and New Orleans. Note 4 - Financing activities On January 25, 2000, the Board of Directors of the Company approved a share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program which allows for the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of up to 13 million common shares of the Company's common stock pursuant to a normal course issuer bid, at prevailing market prices. As at March 31, 2000, the Company repurchased 5.35 million shares of its common stock at an average price of $36.50 per share. The Company, in 1998, entered into a five-year revolving agreement to sell eligible accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying up to a maximum of $250 million. At March 31, 2000 and December 31, 1999, pursuant to the agreement, $147 million and U.S.$40 million (Cdn$58 million) had been sold on a limited recourse Limited recourse A term describing a type of loan in which the lender has limited or no claim against the parent company if the collateral is insufficient to repay the debt. See:Nonrecourse. basis.
Note 5 - Comprehensive income
Three months ended
March 31
----------------------------
2000 1999
---------------------------------------------------------------------
(In millions) (Unaudited)
Net income $254 $144
Other comprehensive income (loss)
---------------------------------
Unrealized foreign exchange gain
(loss) on translation of U.S.
dollar denominated long-term
debt designated as a hedge
of the IC investment (3) 58
Unrealized foreign exchange gain
(loss) on translation of net
investment in IC 5 (63)
---------------------------------------------------------------------
Other comprehensive income
(loss) before income taxes 2 (5)
Income tax (expense) recovery on
other comprehensive income
(loss) items (1) 2
---------------------------------------------------------------------
Other comprehensive
income (loss) 1 (3)
---------------------------------------------------------------------
Comprehensive income $255 $141
---------------------------------------------------------------------
---------------------------------------------------------------------
Note 6 - Illinois Central Railroad Illinois Central Railroad (IC) former U.S. railroad founded in 1851 that merged with the Canadian National Railway Co. (CN) in 1999. After receiving its charter in 1851, the Illinois Central Railroad built its first line from Galena to Cairo, Ill. Company consolidated financial information The Company has fully and unconditionally guaranteed Unconditionally Guaranteed is the eighth LP by Captain Beefheart & the Magic Band, originally released in 1974. Upon release it was criticised for being too commercial, however it failed to give Beefheart any real chart success and peaked at #192 on the Billboard certain publicly issued debt of Illinois Central Railroad Company (ICRR ICRR Institute for Cosmic Ray Research (University of Tokyo) ICRR Illinois Central Railroad ICRR International Congress of Radiation Research ). Consequently, the Company has not presented separate financial statements and other disclosures, other than those presented below, because management has determined that such information is not material to the holders of ICRR debt. Summary financial information for ICRR, on its historical cost basis, is presented below.
Illinois Central Railroad Company
Condensed Consolidated Statement of Income
(In millions of U.S.$)
Three months ended
March 31
----------------------------
2000 1999
---------------------------------------------------------------------
(Unaudited)
Revenues $177 $157
Operating expenses 129 106
---------------------------------------------------------------------
Operating income 48 51
Other income 25 1
Interest expense (17) (7)
---------------------------------------------------------------------
Income before income
taxes 56 45
Income tax expense (23) (17)
---------------------------------------------------------------------
Net income $33 $28
---------------------------------------------------------------------
---------------------------------------------------------------------
Illinois Central Railroad Company
Condensed Consolidated Balance Sheet
(In millions of U.S.$)
March 31 December 31
2000 1999
---------------------------------------------------------------------
(Unaudited)
Assets
Current assets $230 $220
Non-current assets 1,771 1,735
---------------------------------------------------------------------
Total assets $2,001 $1,955
---------------------------------------------------------------------
---------------------------------------------------------------------
Liabilities and
stockholders' equity
Current liabilities $287 $282
Payable to affiliate 578 578
Long-term debt 511 512
Deferred income taxes 338 337
Other liabilities and reserves 179 171
Stockholders' equity 108 75
---------------------------------------------------------------------
Total liabilities and
stockholders' equity $2,001 $1,955
---------------------------------------------------------------------
---------------------------------------------------------------------
CANADIAN NATIONAL RAILWAY COMPANY
SELECTED RAILROAD STATISTICS (U.S. GAAP)
---------------------------------------------------------------------
---------------------------------------------------------------------
Three months ended
March 31
----------------------------
2000 1999
---------------------------------------------------------------------
(Unaudited)
Rail operations
Freight revenues ($ millions) 1,322 1,226
Gross ton miles (billions) 73.6 65.5
Revenue ton miles (RTM) (millions) 38,585 34,225
Route miles (includes Canada and the U.S.) 15,673 16,543
Operating expenses per RTM (cents) 2.57 2.85
Freight revenue per RTM (cents) 3.43 3.58
Carloads (thousands) 952 869
Freight revenue per carload ($) 1,389 1,411
Diesel fuel consumed
(Canadian gallons in millions) 76 69
Average fuel price ($/Canadian gallon) 1.37 0.91
Revenue ton miles per Canadian gallon
of fuel consumed 508 496
Locomotive bad order ratio (%) 6.6 8.1
Freight car bad order ratio (%)* 5.7 5.4
---------------------------------------------------------------------
Productivity
Operating ratio (%) 72.2 76.8
Freight revenue per route mile
($ thousands) 84 74
Revenue ton miles per route mile
(thousands) 2,462 2,069
Freight revenue per average number
of employees ($ thousands) 61 54
Revenue ton miles per average number
of employees (thousands) 1,768 1,499
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Employees
Number at end of period 21,953 23,104
Average number during period 21,825 22,839
Labor and fringe benefits per RTM (cents) 1.01 1.18
Injury frequency rate per 200,000
person hours 6.4 7.4
Accident rate per million train miles 2.4 2.3
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Financial
Debt to total capitalization ratio
(% at end of period) 42.5 49.1
Return on assets (% at end of period) ** 1.8 1.2
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* 1999 figure excludes Illinois Central Corporation.
** Income before cumulative effect of changes in accounting policy.
CANADIAN NATIONAL RAILWAY COMPANY
SUPPLEMENTARY INFORMATION (U.S. GAAP)
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Three months ended March 31
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2000 1999 Variance
Fav (Unfav)
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(Unaudited)
Revenue ton miles (millions)
Petroleum and chemicals 6,210 5,954 4 %
Metals and minerals 2,223 2,104 6 %
Forest products 7,175 6,571 9 %
Coal 4,247 4,890 (13 %)
Grain and fertilizers 12,003 8,950 34 %
Intermodal 5,880 5,107 15 %
Automotive 847 649 31 %
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38,585 34,225 13 %
Freight revenue / RTM (cents)
Petroleum and chemicals 3.53 3.76 (6 %)
Metals and minerals 4.27 4.28 -
Forest products 3.48 3.70 (6 %)
Coal 2.00 2.27 (12 %)
Grain and fertilizers 2.63 2.80 (6 %)
Intermodal 3.55 3.70 (4 %)
Automotive 17.47 18.18 (4 %)
Total 3.43 3.58 (4 %)
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Carloads (thousands)
Petroleum and chemicals 128 124 3 %
Metals and minerals 63 58 9 %
Forest products 123 119 3 %
Coal 135 137 (1 %)
Grain and fertilizers 149 126 18 %
Intermodal 266 227 17 %
Automotive 88 78 13 %
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952 869 10 %
Freight revenue / carload (dollars)
Petroleum and chemicals 1,711 1,806 (5 %)
Metals and minerals 1,508 1,552 (3 %)
Forest products 2,033 2,042 -
Coal 630 810 (22 %)
Grain and fertilizers 2,121 1,992 6 %
Intermodal 786 833 (6 %)
Automotive 1,682 1,513 11 %
Total 1,389 1,411 (2 %)
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