http://www.morningstar.com/earnings/25115614-canadian-national-railway-co-cni-q1-2011.aspx

Canadian National Railway Co CNI
Q1 2011 Earnings Call Transcript

Transcript Call Date 04/26/2011

Operator: All participants, thank you for standing-by. The conference is ready to begin. Welcome to CN’s First Quarter 2011 Financial Results Conference Call.

I would like to turn the meeting over to Mr. Robert Noorigian, Vice President Investor Relations. Ladies and gentlemen, Mr. Noorigian

Robert Noorigian - VP, IR: Good afternoon. Thank you for joining us for CN’s first quarter 2011 conference call. I’d like to remind you again about the comments that have already been made regarding the forward-looking statements and the information that you can find on the web.

With me today is Claude Mongeau, CN's President and Chief Executive Officer; Luc Jobin, Executive Vice President and Chief Financial Officer; Mr. Keith Creel, Executive Vice President and Chief Operating Officer; J.J. Ruest, Executive Vice President and Chief Marketing Officer; and after the presentation, as we have mentioned a number of times, we'll be taking questions from all of the participants or a number of the participants that are listening. Would you please limit your questions to one to be fair to us, and also to be fair to your colleagues?

With that, it's now my pleasure to introduce Claude Mongeau, CN's President and Chief Executive Officer.

Claude Mongeau - President and CEO: Thank you, Bob, and thank you all for joining us for our first quarter call. I think it's a very good set of results that we want to discuss with you. We've obviously had a challenging environment to deal with during the winter, but our level of preparation and our focus on execution really put us in good step. I think, as you will see, when you hear some of the details from Keith, we were able to maintain a very good service overall and continue to make progress in terms of running a solid railroad for our customers.

Actually did well from an efficiency standpoint. If you step back and look at it with enough perspective, most of our metrics are better than where we were in 2009. So, solid operating performance, continued focus on engaging our customers, J.J. will report on some of that in more details, but really, I'm very pleased with the growth that we've been able to achieve across all of the commodity groups.

So overall, 9% revenue growth, if I look at it on a constant currency basis, the solid efficiency allowing us to deliver a 69% operating ratio in a tough winter. Good EPS growth, C$0.90 on an adjusted basis, (C$0.55) more if you add the gain that we made on the sale of a corridor here in Toronto and solid performance in terms of the free cash flow. Luc will give you some more detail, but to be able to deliver solid earnings, but also monetization of a corridor for just under C$300 million once again this year is testament to our focus on all levers of value creation.

So overall, I'm very, very pleased with the first quarter. It's a solid start to the year, and we believe that we have a solid potential to continue to deliver a solid shareholder value throughout the year.

With that, I'll let for Keith to give you some of the details on our operations.

Keith Creel - EVP and COO: Thanks Claude. As you said, first quarter was certainly solid start 2011. Grain, there is always room for improvement, but overall I'm very pleased with the way our operating team delivered on service and productivity for us during what was by most objective measures, clearly a tough one.

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