EFTA01371114.pdf

31 October 2017 Railroads Canadian Rails Revenue Trends Revenue at CP has increased at a 3.4% CAGR since 2000 due almost entirely to growth in revenue per carload (aka yields: +3.2% CAGR) as carload growth has been somewhat limited (+0.3% CAGR). CNI's yield growth reflects core pricing gains as well as a longer length of haul as revenue ton-miles have actually increased at a 1.3% CAGR over that time. The largest contributors to revenue growth have been industrial and consumer products (9. I% CAGR) and grain (4.3% CAGR) which help offset declines in fertilizers and sulphur (-2.5% CAGR) and forest products (-1.8% CAGR). In 2016, CP generated CS6.28 in revenue, marking a 7.2% yoy decline from 2015. Figure 80: CP Revenue Breakdown FY2016 Figure 81: CP Revenue Trends & YoY Changes 8,000 15% Metals, Minerals, Auto E 7,000 6% 10% Consumer Products 6% Intermodal 6,000 b° 9% 5% 22% to 5,000 4% 0% 0 7, 4,000 (5%) g 3,000 ≥ Forest Products 4) 2,000 -7% (10%) 4% cc 1,000 (15%) Fertilizers & Sulphur 0 (20%) 5% % rb 4. ebe* Potash VP CP I,CP A.O.\ (1, AtCis 0 0\ `1, et• 6% Total Operating Revenue —*—YoY Change Swat' Pantie Bonk Canonass Sane Devrsene Bork Coram R.Vgs Revenue for CP is fairly straight forward at a high level - volume (measured in carloads) and yield (measured in avg. revenue per carload). Carload yields can vary significantly depending on a number of factors including mix of volume, length of haul, movements in core/underlying price, fuel surcharges, and currency. In 2016, CP moved just over 2.5M carloads earning an average of CS2,400 in revenue/ carload. Below we highlight CP's exposure by carload and the corresponding revenue the company generated on those particular carload classifications. Figure 82; CP Carload Breakdown Figure 83: CP Revenue per Carload by Commodity (20 I 6A) Auto 5,000 4,757 am: 4,154 Metals, Minerals, S% 4,000 3,433 3,394 Consumer Products 2,904 2,880 2,814 I(so.0 Intermodal 3,000 2,400 817‘ 1,990 I 39% 2,000 1,343 Energy, chems, plastics 10% 1,000 0 I iii Forest Products... , t" _firy eb Fertilizers & Sulphur. 2% Potash k tv- gip %sit Oct's p;te IS ; IF% 4% &gem Doss, Om* Contain IMO Sanr Dans*, Set Carp., Deutsche Bank Securities Inc Page 41 CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0064311 CONFIDENTIAL SDNY_GM_00210495 EFTA01371114