31 October 2017 Railroads Canadian Rails Total carload volumes have increased at a 0.3% CAGR since 2000, but declined 0.4% CAGR since 2006. The decline has largely been driven by sulphur and fertilizers (-10.4% CAGR) and forest products (-6.9% CAGR) which offset solid growth in industrial and consumer product carloads (5.9% CAGR). Interestingly, however, those commodities which saw the largest carload declines exhibited the strongest yield growth - sulphur and fertilizers rev/carload increased 6.8% CAGR and forest products increased 5.9% CAGR - as CP elected to move more profitable freight. Overall revenue per carload has increased at a 3.6% CAGR since 2006. In the figures below we provide historical and our forecasted carload and yield trends followed by a more granular breakdown of CP's key commodity groups and our thoughts moving forward. Figure 84: CP Carload Growth (2005-2019E} 3,000 F 8 2,750 2 2,500 O 2,250 2,000 40. -4% I Figure S5: CP Revenue per Carload 12005-2019E) 15% 2,750 10% w 714 2,500 40/6 5% s 73 2250 3% 0% 6 ... 2,000 8.1 750 (5%) )- o 1.750 (10%) 2 1,500 (15%) t 1,250 cc 1 (20%) ,000 (5%) iv@ tet:3 9 9 ib <<, (t. net\ 'ON .19\ i5S‘ ra..: Total Carloads —4+19—YorVY Change g:i Revenue per carload S VoY Change 15% 9 't 9 't, > Cr C. C. %P e "1.9\ "153% e e Sane Dandle Sint Cows,/ lava 1 Sara Deana,* Sint Ca taine SW. Commodity breakdown Below we breakdown the key revenue categories for CP and the drivers behind them. Grain - the largest revenue contributor for CP accounting for 24% of total revenue in 2016. Grain revenue has increased at a 5.0% CAGR since 2006 amidst modest volume growth (1.2% CAGR) and strong improvement in yields (+3.8% CAGR). We note that roughly 2/3 of CP's grain business is Canadian grain which is transported from the Canadian Prairies (Alberta, Saskatchewan, Manitoba) to Canadian ports for export and to eastern Canada, the U.S. and Mexico for domestic