Canadian National Railway Company (CNR) Barclays 42nd Annual Industrial Select Conference summary

Strategic growth and operational performance

• Committed to driving volume growth faster than the general economy by leveraging a strong, continent-spanning network and customer-specific initiatives.

• Over 50% of projected volume growth in 2024 is from CN-specific projects, with a third from normalization after labor disruptions.

• January 2024 saw strong volumes and earnings, with February impacted by severe winter but expected to recover within two weeks.

• Operating plan has proven resilient, with local service running above 90% and asset velocity targets being met.

• No significant macroeconomic lift expected in 2024; guidance is based on modest economic growth and internal initiatives.

Tariffs, trade, and external risks

• Tariffs are expected to have some impact, but not enough to cause recession or high inflation; scenario planning has included these risks.

• About 30% of volume crosses the Canada-U.S. border, with energy products less affected by tariffs; currency weakness acts as a shock absorber, benefiting EPS.

• More than 70% of business is not cross-border and thus less exposed to tariff risks.

• Customers, especially in automotive, are discussing potential delays in capital projects due to uncertainty.

Capital allocation and shareholder returns

• Capital expenditure remains a priority, with CAD 3.5 billion spent annually, half on maintenance.

• Dividend growth has been consistent for 29 years, targeting alignment with earnings growth.

• Share buybacks are planned to support leverage targets and maintain a strong balance sheet.

• Incremental growth in the east and south leverages existing capacity, requiring minimal capital and driving high ROI.