Canadian National Railway Company (CNR) investor relations material

Opening remarks and service performance

• Service levels are strong, supporting both volume growth and pricing power.

• Pricing strategy remains consistent, focused on pricing ahead of rail cost inflation and selling into available capacity.

Pricing, inflation, and mix impacts

• Pricing is measured on a same-store basis, but mix headwinds, especially from forest products, are offsetting gains.

• Rail cost inflation is mainly driven by labor and materials, running at 2.5%-3%.

• Regulated grain pricing is increasing at a slower rate, with a lagged effect on margins.

• Fuel costs are largely covered by surcharges, but regulated grain has embedded fuel, causing timing mismatches.

Volume trends and segment performance

• RTM growth was about 3% in Q1 and is tracking similarly in Q2, ahead of expectations.

• Strength seen in grain (Canada and US), refined petroleum, natural gas liquids, metals, and potash.

• Automotive and metals have proven more resilient than anticipated despite tariffs.

• Housing market weakness continues to impact lumber and related segments, with recovery tied to lower mortgage rates and higher housing starts.