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On Jan. 28, Canadian National Railway Co. reported its fourth-quarter financial results, which included a record quarterly operating ratio of 66.1 — a 2.2 point improvement compared with the same 2002 period.

The Class I earned quarterly net income of $224 million compared with $22 million in fourth-quarter 2002, which included a $173 million after-tax charge to increase CN's provision for U.S. personal injury and other claims, and a $79 million after-tax charge for workforce reductions.

The 19 percent year-over-year appreciation of the Canadian dollar vs. the U.S. dollar reduced CN's fourth-quarter revenue, operating income and net income by about $145 million, $45 million and $25 million, respectively. Quarterly revenue of $1.5 billion decreased 2 percent, but operating expenses of $1 billion declined 31 percent compared with the same 2002 period.

"We delivered strong fourth-quarter results in the face of the continuing challenges of the strong Canadian dollar and high fuel costs," said CN President and Chief Executive Officer E. Hunter Harrison in a prepared statement. "Excluding the conversion impact of the stronger dollar, revenues would have risen 7 percent for the final three-month period of 2003. We believe our fourth-quarter results set the stage for continued strong performance in 2004"

For all of 2003, CN earned net income and operating income of $1 billion and $1.8 billion, respectively, compared with $800 million and $1.5 billion, respectively, in 2002.

But an annual 12 percent appreciation of the Canadian dollar reduced the Class I's revenue, operating income, and net income by $380 million, $120 million and $62 million, respectively. CN's annual operating ratio worsened 0.4 points to 69.8 after adjustments.