EFTA Document EFTA01371114

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 Metals, Minerals, Consumer Products 9% Forest Products 4% Fertilizers & Sulphur 5% Potash 6% Swat' Pantie Bonk Canon ass Auto 6% Intermodal 22% Figure 81: CP Revenue Trends & YoY Changes 8,000 E 7,000 6,000 to 5,000 7, 4,000 g 3,000 cc 4) 2,000 1,000 b° 15% 6% 10% 5% 4% 0% 0 (5%) ≥ -7% (10%) (15%) 0 (20%) % rb 4. ebe* VP CP CP O.\ Cis \ `1, I, A. (1, At 0 0 et• Total Operating Revenue —*—YoY Change 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 Auto Metals, Minerals, S% Consumer Products 817‘ Energy, chems, plastics 10% Forest Products... Fertilizers & Sulphur. 2% &gem Doss, Om* Contain IMO Potash 4% am: Intermodal 39% Deutsche Bank Securities Inc Figure 83: CP Revenue per Carload by Commodity (20 I 6A) 5,000 4,000 3,000 2,000 1,000 0 4,757 4,154 3,433 3,394 I 2,904 2,880 2,814 1 I ,990 I iii 2,400 1,343 (so .0 , t" e b gip %sit _firy tv- Oct's p;te IF% k IS ; Sanr Dans*, Set Carp., Page 41 CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) CONFIDENTIAL SDNY_GM_00210495 DB-SDNY-0064311 EFTA01371114