31 October 2017 Railroads Canadian Rails On the other hand, CNI's carload trends appear to be losing steam with Intermodal and "Other" being the only carload groupings up yoy over the past four weeks. Figure 7: CP carload growth appears to be gaining Figure 8! as CNI's carload trajectory appears to be losing momentum... steam • Carloads growing YoY as Carloads growing YoY • Carloads declining YoY I I • Carloads declining YoY IIIII i if illill IIIIIIIIIIIIIIIIIIIIII ca %.0 ‘42 to to to to t.O C a a San ON.Mo Sank AM z - a s — 2 Mew (Mao. Art AM CP is putting the pieces together to leverage a better network After building a better foundation, i.e. lower-cost base and better service, CP has begun putting the pieces together to prof itably grow its revenue base. A key piece, in our view, was the appointment of John Brooks as CMO in February, 2017. In the 2.5 years prior to John's appointment as CMO, Keith Creel was largely responsible for overseeing sales and marketing at CP. At the same time, however, Creel was acting COO and being groomed to be Hunter Harrison's replacement. Combined with the major task of turning around North America's least profitable railroad, its easy to see how marketing/sales efforts largely went by the wayside. In addition to John's appointment as CMO, these efforts have been reinvigorated through a number of initiatives: • Trip Plan - Introduced in late 2016, Trip Plan allows customers to track shipments on a car by car basis thereby eliminating inefficiencies and increasing delivery accuracy. This service helped drive on-time performance above 90% in 2016 (well above industry avg). Enhanced intermodal offering - CP recently opened its transload facility in Vancouver which helps steamship lines more efficiently manage their containers. Transload facilities enable the interchange of commodities to different rail cars / containers. This allows CP to utilize a steamship's containers for inland or