Slides
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Shauneen Bruder Chair of the Board
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Tracy Robinson President and Chief Executive Officer Cristina Circelli Vice-President, Corporate Secretary and General Counsel SENIOR OFFICERS Ghislain Houle Executive Vice-President and Chief Financial Officer
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FORWARD-LOOKING STATEMENTS 5 Certain statements included in this presentation are “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and under Canadian securities laws, including statements based on management’s assessment and assumptions and publicly available information with respect to CN. By their nature, forward-looking statements involve risks, uncertainties and assumptions. CN cautions that its assumptions may not materialize and that current economic conditions render such assumptions, although reasonable at the time they were made, subject to greater uncertainty. Forward-looking statements may be identified by the use of terminology such as “believes,” “expects,” “anticipates,” “assumes,” “outlook,” “plans,” “targets,” or other similar words. 2025 key assumptions CN has made a number of economic and market assumptions in preparing its 2025 outlook. The Company now assumes slightly positive growth in North American industrial production in 2025 (compared to its January 30, 2025 assumption of approximately 1%). For the 2024/2025 crop year, the grain crop in Canada was in line with its five-year average and the U.S. grain crop was above its five-year average. The Company continues to assume that the 2025/2026 grain crop in Canada will be in line with its five-year average and now assumes that the U.S. grain crop will be above its five-year average (compared to its January 30, 2025 assumption that the 2025/2026 grain crop in the U.S. will be in line with its five-year average). CN continues to assume RTM growth will be in the low to mid single-digit range. CN also continues to assume that in 2025, the value of the Canadian dollar in U.S. currency will be approximately $0.70, and now assumes that in 2025 the average price of crude oil (West Texas Intermediate) will be in the range of US$60 - US$70 per barrel (compared to its January 30, 2025 assumption of being in the range of US$70 - US$80 per barrel). 2024-2026 key assumptions CN has made a number of economic and market assumptions in preparing its three-year financial perspective. CN continues to assume that the North American industrial production will increase by approximately 1% CAGR over the 2024 to 2026 period. CN continues to assume pricing above rail inflation. CN continues to assume that the value of the Canadian dollar in U.S. currency will be approximately $0.70 and that the average price of crude oil (West Texas Intermediate) will be in the range of US$70 - US$80 per barrel during this period. The Company notes there is a heightened recessionary risk related to tariffs and trade actions taken by various countries. Should the recessionary risk materialize, demand for freight transportation would be negatively impacted. Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and other factors which may cause actual results, performance or achievements of CN to be materially different from the outlook or any future results, performance or achievements implied by such statements. Accordingly, readers are advised not to place undue reliance on forward-looking statements. Important risk factors that could affect the forward-looking statements include, but are not limited to, general economic and business conditions, including factors impacting global supply chains such as pandemics and geopolitical conflicts and tensions; “trade restrictions, trade barriers, or the imposition of tariffs or other changes to international trade arrangements,“ industry competition; inflation, currency and interest rate fluctuations; changes in fuel prices; legislative and/or regulatory developments; compliance with environmental laws and regulations; actions by regulators; increases in maintenance and operating costs; security threats; reliance on technology and related cybersecurity risk; transportation of hazardous materials; various events which could disrupt operations, including illegal blockades of rail networks, and natural events such as severe weather, droughts, fires, floods and earthquakes; climate change; labor negotiations and disruptions; environmental claims; uncertainties of investigations, proceedings and other types of claims and litigation; risks and liabilities arising from derailments; timing and completion of capital programs; the availability of and cost competitiveness of renewable fuels and the development of new locomotive propulsion technology; reputational risks; supplier concentration; pension funding requirements and volatility; and other risks detailed from time to time in reports filed by CN with securities regulators in Canada and the U.S., including its Annual Information Form and Form 40-F. CN has sustainability-related commitments and climate goals, and continues to assess the impact on its operations of related initiatives, plans and proposals that CN and other stakeholders (including government, regulatory and other bodies) are pursuing in relation to climate change and carbon emissions. The achievement of CN’s climate goals is subject to several risks and uncertainties, including those disclosed in the section entitled Business risks: Reputation of the 2024 Annual Report. The achievement of these goals is also subject to circumstances outside of the Company’s control, including the availability and cost competitiveness of renewable fuels and the development and availability of new technologies, such as alternative propulsion locomotive technologies, and the cooperation of third parties such as suppliers, customers, supply chain partners and regulators. While the Company currently believes its goals are reasonably achievable, there can be no certainty that the Company will achieve any or all of these goals within the stated timeframe, or that achieving any of these goals will meet all of the expectations of its stakeholders or applicable legal requirements. If the Company is unable to achieve its climate goals or satisfy the expectations of its stakeholders, its brand and reputation could be materially and adversely affected. Forward-looking statements reflect information as of the date on which they are made. CN assumes no obligation to update or revise forward looking statements to reflect future events, changes in circumstances, or changes in beliefs, unless required by applicable securities laws. In the event CN does update any forward- looking statement, no inference should be made that CN will make additional updates with respect to that statement, related matters, or any other forward-looking statement.
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DELIVERING RESPONSIBLY
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SAFETY OUR CORE VALUE
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SUSTAINABILITY
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OUR TALENTED RAILROADERS
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OUR COMMUNITIES
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GOVERNANCE
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SAFETY MOMENT
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To join the conference call, you must call either: 1-844-418-2221 (toll-free in Canada and the U.S.) (506) 560-2221 (outside of Canada and the U.S.)
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NOTICE OF MEETING
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APPOINTMENT OF SCRUTINEERS
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REPORT ON QUORUM
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CONSOLIDATED FINANCIAL STATEMENTS
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ELECTION OF DIRECTORS
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Denise Gray DIRECTOR NOMINEES Shauneen Bruder David Freeman Robert Knight Michel Letellier Margaret McKenzie Al Monaco Tracy Robinson Susan C. Jones Jo-ann dePass Olsovsky Justin Howell
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APPOINTMENT OF AUDITORS
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24 ADVISORY VOTE ON COMPENSATION
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CLIMATE ACTION PLAN
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Ghislain Houle Executive Vice-President and Chief Financial Officer
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Strong Track Record of Fuel/Carbon Efficiency AS A MOVER OF THE ECONOMY, CN IS COMMITTED TO PLAYING A KEY ROLE IN THE TRANSITION TO A LOW-CARBON ECONOMY 45% Reduction in locomotive greenhouse gas (GHG) emission intensity since 1993 #1 In the North American rail industry, consuming ~15% less locomotive fuel per GTM than the industry average
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Committed to Reducing GHG Emissions CN’S NET-ZERO 2050 GHG EMISSION TARGET APPROVED BY SBTi IN 2024 18.6% Progress towards Scope 1 & 2 target, at the end of 2023 30.8% Progress towards Scope 3 target, at the end of 2023 SBTi: Science-Based Targets initiative Actively working with our customers to help them reduce their transportation supply chain GHG emissions
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Advancing our Carbon Reduction Initiatives With 87% of our Scope 1 GHG emissions generated from rail operations, the best way to reduce our carbon footprint is by continuously improving our rail efficiency Fleet renewal Innovative technology Big data Operating practices Cleaner fuels ACTIVELY ENGAGING WITH OTHER RAIL COMPANIES, SUPPLIERS AND GOVERNMENTS TO ADVANCE INITIATIVES
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ADVISORY VOTE ON CLIMATE ACTION PLAN
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VOTE ON ITEMS OF BUSINESS
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VOTE RESULTS
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AL MONACO JO-ANN DEPASS OLSOVSKY ROBERT KNIGHT SUSAN C. JONES MARGARET MCKENZIE MICHEL LETELLIER DENISE GRAY SHAUNEEN BRUDER TRACY ROBINSON DAVID FREEMAN INTRODUCTION OF DIRECTORS JUSTIN HOWELL
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Ghislain Houle Executive Vice-President and Chief Financial Officer
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4.97 6.90 7.44 8.53 7.01 2020 2021 2022 2023 2024 Earnings Per Share RUNNING A SCHEDULED OPERATION IS OUR FOUNDATION FOR GROWTH DILUTED EARNINGS PER SHARE (1) ($ Cdn) 9% CAGR ADJUSTED DILUTED EARNINGS PER SHARE (1)(2) ($ Cdn) 8% CAGR (1) In the first quarter of 2022, the Company changed its method of calculating market-related values of pension assets for its defined benefit plans using a retrospective approach. Comparative figures have been adjusted to conform to the change in methodology. (2) This non-GAAP measure does not have any standardized meaning prescribed by GAAP and therefore may not be comparable to similar measures presented by other companies. See Company's website https://www.cn.ca/en/events/2025/05/agm-2025 for an explanation of this non-GAAP measure. -18% 5.28 5.95 7.46 7.28 7.10 2020 2021 2022 2023 2024 -2%
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Top-Line Growth REVENUES DRIVEN BY STRONG PRICING, PARTLY OFFSET BY LOWER FUEL SURCHARGE 230.4 233.1 235.8 232.6 235.5 2020 2021 2022 2023 2024 13,819 14,477 17,107 16,828 17,046 2020 2021 2022 2023 2024 REVENUE TON MILES (1) (Billions) 1% CAGR REVENUES ($M Cdn) 5% CAGR (1) The movement of a ton of freight over one mile for revenue. +1% +1%
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61.9% 61.2% 59.5% 60.8% 62.9% 2020 2021 2022 2023 2024 Operating Expenses HIGHER LABOR COSTS, NEGATIVE IMPACT OF F/X, AND LOSS ON ASSETS HELD FOR SALE, PARTIALLY OFFSET BY LOWER FUEL EXPENSE OPERATING EXPENSES ($M Cdn) ADJUSTED OPERATING RATIO (1) (%) 9,042 8,861 10,267 10,231 10,799 2020 2021 2022 2023 2024 +6% 2.1 pts (1) This non-GAAP measure does not have any standardized meaning prescribed by GAAP and therefore may not be comparable to similar measures presented by other companies. See Company's website https://www.cn.ca/en/events/2025/05/agm-2025 for an explanation of this non-GAAP measure.
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Free Cash Flow DECREASED FREE CASH FLOW DRIVEN BY HIGHER CAPITAL INVESTMENTS AND LOWER CASH FROM OPERATING ACTIVITIES 3,227 3,296 4,259 3,887 3,092 2020 2021 2022 2023 2024 FREE CASH FLOW (1) ($M Cdn) -20% (1) This non-GAAP measure does not have any standardized meaning prescribed by GAAP and therefore may not be comparable to similar measures presented by other companies. See Company's website https://www.cn.ca/en/events/2025/05/agm-2025 for an explanation of this non-GAAP measure.
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Capital Investment Overview CAPITAL INVESTMENTS IMPROVE NETWORK SAFETY, RESILIENCY AND FLUIDITY 1.3 2.6 3.1 8.1 Capacity, Service and Efficiency Rolling Stock Information Technology and Other Core Track and Roadway CAPITAL INVESTMENTS 2020-2024 ($B Cdn) $3.5B invested in 2024 net of customer reimbursements
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Prudent Financial Management COMMITTED TO MAINTAINING A STRONG BALANCE SHEET AS WE MANAGE TO OUR LEVERAGE TARGET OF 2.5x 2.25x 2.60x 2023 2024 ADJUSTED DEBT-TO-ADJUSTED EBITDA MULTIPLE (1) (As at and for the year ended December 31) (1) This non-GAAP measure does not have any standardized meaning prescribed by GAAP and therefore may not be comparable to similar measures presented by other companies. See Company's website https://www.cn.ca/en/events/2025/05/agm-2025 for an explanation of this non-GAAP measure.
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Rewarding Our Shareholders OVER $23 BILLION RETURNED TO SHAREHOLDERS OVER THE LAST FIVE YEARS SHARE BUYBACK ($M Cdn) Current normal course issuer bid for up to 20M shares (February 4, 2025 through February 3, 2026) DIVIDENDS ($M Cdn) 5% increase in dividend per share in 2025 379 1,582 4,709 4,551 2,651 2020 2021 2022 2023 2024 1,634 1,740 2,004 2,071 2,138 2020 2021 2022 2023 2024 Buyback suspended due to pandemic
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Total Shareholder Return Index: Closing price on December 31, 2019 = 100 Assumes reinvestment of dividends (1) Cumulative total return over the last five years. CNR 37% (1) S&P 82% (1) CNI 23% (1) TSX 45% (1) 100 150 200 2019 2020 2021 2022 2023 2024 CNR CNI TSX S&P SOLID SHAREHOLDER VALUE CREATION
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Q1-2025 Earnings Per Share SOLID Q1 PERFORMANCE DILUTED EARNINGS PER SHARE ($ Cdn) 1.72 1.85 Q1-2024 Q1-2025 +8%
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Tracy Robinson President and Chief Executive Officer
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SAFETY ALWAYS COMES FIRST
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50 INVESTING FOR A MORE SUSTAINABLE FUTURE
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51 SERVICE EXCELLENCE THAT POWERS GROWTH
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GROWING OUR BUSINESS
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GROWING OUR PEOPLE
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LOOKING AHEAD
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55 THANK YOU
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QUESTION PERIOD
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To join the conference call, you must call either: 1-844-418-2221 (toll-free in Canada and the U.S.) (506) 560-2221 (outside of Canada and the U.S.)
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QUESTION PERIOD