Canadian National Railway Company (CNR) Barclays 43rd Annual Industrial Select Conference summary

Key business performance and strategy

• Achieved 14% Q4 EPS growth and 7% annual EPS growth on 1% volume increase in 2025, with 8% free cash flow growth and significant operating ratio improvement.

• Focused on productivity, commercial presence, and a reset capital program, resulting in the best operational performance in over a decade.

• Entering 2026 with expectations of solid Q1 results, but growth is expected to be more back-end loaded due to macroeconomic uncertainty and tariff impacts.

• Grain, potash, energy, and coal volumes are strong, while international intermodal is expected to recover in the second half of the year.

• Tariffs on steel, aluminum, and forest products have reduced high-margin business, but efforts are underway to mitigate impacts and backfill with other volumes.

Capital allocation and cost management

• Capital spending has been reduced after completing major investments in locomotives and network capacity; priorities remain on maintaining capacity and fleet quality.

• Consistent dividend growth is a priority, with excess cash redirected to shareholders as capex needs decline.

• Ongoing cost initiatives include optimizing terminal operations, leveraging AI, and driving productivity in engineering and head office functions.

• Operating leverage is being built through a leaner cost structure, longer and heavier trains, and improved asset utilization.

Market environment and growth opportunities

• Freight recession has persisted for four years, but unique growth opportunities exist due to the network's position atop North America's resource base.

• Investments in mining, energy, and intermodal infrastructure, such as the Edson Sub and Rupert terminal, position the network for future volume growth.

• Domestic intermodal continues to grow, supported by strong service and network enhancements.

• Pricing remains above inflation, with corridor capacity available to absorb additional business.