Group 1: Company Performance - Canadian National's (CNI) top line is bolstered by strong segmental performance, with overall revenue ton miles (RTMs) growing by 13% year over year in Q2 2024, driven by a 19% rise in international intermodal and a 12% rise in petroleum and chemicals [2][5] - The company is expanding its fleet, with the 2024-2025 Grain Plan including the delivery of 750 new high-efficiency grain hopper cars and a focus on scheduled railroading and safety improvements [3][4] - CNI declared a quarterly dividend of C$0.8450 per share in Q2 2024 and repurchased 3.5 million common shares for $597 million, with plans to repurchase up to 32 million shares between Feb. 1, 2024, and Jan. 31, 2025 [4] Group 2: Operating Expenses and Liquidity - Total operating expenses increased by 12.8% year over year in Q2 2024, primarily due to a 13.8% rise in labor costs, which account for 30.7% of total operating expenses [5][6] - Fuel costs, comprising 19.7% of total operating expenses, jumped by 12.6% year over year, contributing to the overall increase in operating expenses [6] - CNI's liquidity position is concerning, with a current ratio of 0.63, indicating potential difficulties in meeting short-term obligations [6] Group 3: Market Performance - Shares of CNI have declined by 6.6% year to date, contrasting with the industry's growth of 0.5% during the same period [6]

madsci Why I am invested in Canadian National Canadian National Railway (NYSE:CNI) remains my favorite stock among Class 1 railroads. Its three-coastal network and its balanced exposure to several commodities are not always correlated. This, coupled with a conservative balance sheet and a management team that is careful not to increase leverage excessively, have made it stand out as the most convincing stock in the industry in the past two years. CNI 2024 Investor Presentation Let me give you an example. Wh ...

yorkfoto Introduction I have to be honest. One of the hardest parts of my job is putting myself in other people's shoes. When I make financial decisions, I obviously make them based on my personal situation. As I'm 29, my goals are very different from someone who's retired, close to retirement, or a freshman in college. To make matters more complicated, age is just one of many variables. Some people have high-paying jobs and no mortgage. Others have to work additional jobs to have excess capital to invest. ...

About this content About Angela Harmantas Angela Harmantas is an Editor at Proactive. She has over 15 years of experience covering the equity markets in North America, with a particular focus on junior resource stocks. Angela has reported from numerous countries around the world, including Canada, the US, Australia, Brazil, Ghana, and South Africa for leading trade publications. Previously, she worked in investor relations and led the foreign direct investment program in Canada for the Swedish government. S ...

Canadian National Railway Company (CNI) is preparing to resume operations after Canada's Labour Minister, Steven MacKinnon, referred the labor dispute for binding arbitration. Canadian National is waiting for formal orders from the Canada Industrial Relations Board ("CIRB") to resume operations in the country. The railroad operator from Canada remains disappointed that the labor dispute with the Teamsters Canada Railway Conference ("TCRC") could not be resolved even after nine months of negotiations and req ...

About this content About Angela Harmantas Angela Harmantas is an Editor at Proactive. She has over 15 years of experience covering the equity markets in North America, with a particular focus on junior resource stocks. Angela has reported from numerous countries around the world, including Canada, the US, Australia, Brazil, Ghana, and South Africa for leading trade publications. Previously, she worked in investor relations and led the foreign direct investment program in Canada for the Swedish government. S ...

Core Viewpoint - CN has announced its intention to lock out employees represented by the Teamsters Canada Rail Conference (TCRC) on August 22, 2024, if no agreement or binding arbitration is reached before that date [1][2]. Group 1: Labor Conflict and Negotiations - CN is proceeding with a phased shutdown of its network due to the ongoing labor conflict, which may lead to a complete lockout if unresolved [2][3]. - The company has made multiple offers to the TCRC since January 2024, including improved wages and working conditions, all of which have been rejected [4][5]. - In June, CN proposed binding arbitration to resolve the dispute, which the TCRC also declined [6]. Group 2: Current Employment Conditions - Conductors and locomotive engineers currently work approximately 160 days a year, combining various duty and rest period rules [7]. - In 2023, the average conductor earned about $121,000, while the average locomotive engineer earned approximately $150,000, excluding pension and medical benefits [7]. Group 3: Embargoes and Operational Impact - CN will issue embargoes to restrict the movement of goods in the event of a labor disruption, effective within 48 hours of issuance [8]. - During a work stoppage, no products will be transported by rail, with only limited train movements within yards permitted due to a lack of certified management train crews [9]. - If a settlement or arbitration agreement is reached, CN will lift embargoes and resume normal operations [10].

Core Viewpoint - Canadian National Railway (CNI) remains a strong long-term investment opportunity despite recent share price declines, driven by its competitive advantages and growth prospects in the North American rail market [2][13]. Industry Overview - The North American railroad industry is characterized by limited competition, with only six major players, allowing companies like Canadian National to maintain high returns and margins [3][5]. - Railroads, particularly Canadian National, benefit from a duopoly in many areas, which reduces pricing pressure and enhances profitability [3]. Financial Performance - In Q2 2024, Canadian National reported freight revenues of C$4.33 billion, a 6.7% year-on-year increase, primarily due to growth in the Canadian grain sector and record volumes along the Vancouver rail corridor [6]. - Operating income for the same quarter was C$1.558 billion, down C$42 million from the previous year, attributed to higher operating expenses and labor costs [7]. - The operating ratio increased to 64%, reflecting a 3.4% rise compared to the previous year, indicating higher costs relative to revenues [7]. Growth Drivers - Canadian National is investing heavily in infrastructure, with a capital expenditure forecast of C$3.5 billion for the year, focusing on key growth areas such as the Vancouver and Prince Rupert corridors [9]. - The expansion of the Prince Rupert port, which offers shorter sailing times to Asia, is expected to significantly boost rail service demand and revenue [8][9]. Shareholder Returns - Canadian National has a strong track record of returning value to shareholders, with 28 years of continuous dividend growth, increasing from C$0.07 in 1995 to a forecast C$3.38 in 2024, representing a 15% cumulative annual growth rate [3]. - The company has also reduced its share count by over 11% in the past five years through significant share buybacks [4]. Valuation - An EV/EBIT valuation methodology suggests a stable EBIT margin of 42.5% for Canadian National, with a target market cap of $98.1 billion by the end of 2027, translating to a target share price of $173 [10][11].

Core Viewpoint - CN is seeking intervention from the Minister of Labour due to stalled negotiations with the TCRC, which poses risks to the Canadian economy from prolonged uncertainty [1][2]. Group 1: Negotiation Status - Negotiations with the TCRC resumed, but no meaningful progress has been made, leading CN to lose faith in the process [2]. - CN has made four offers to the TCRC since the beginning of the year, focusing on wages, rest, and labor availability, all of which were rejected by the union [4][6]. - The latest offer included a proposal for third-party arbitration, which was also rejected by the TCRC [4][7]. Group 2: Potential Shutdown - Without immediate progress or binding arbitration, CN plans to initiate a phased shutdown of its network, starting with embargoes on hazardous goods, leading to a lockout on August 22nd [3]. - Embargoes will prevent the transportation of products within Canada during a work stoppage, with only limited train movements allowed [9][10]. Group 3: Economic Impact - Supply chains require predictability, and the potential for labor disruption creates safety risks and uncertainty for industries reliant on rail transport [5]. - Prolonged uncertainty from the labor conflict will negatively affect consumers and workers across various sectors in Canada [5]. Group 4: Current Employment and Compensation - In 2023, the average conductor earned approximately $121,000, while the average locomotive engineer earned about $150,000, excluding pension and medical benefits [8]. - Conductors and locomotive engineers currently work around 160 days a year, factoring in duty and rest period rules [8]. Group 5: Company Background - CN operates a nearly 20,000-mile rail network, transporting over 300 million tons of goods annually, contributing to sustainable trade and community prosperity since 1919 [12].

UPDATE SUSTAINABLE, PROFITABLE GROWTH 2024 INVESTOR FACT BOOK Exhibit 99.1 MOVING FORWARD TOGETHER CN powers the economy by safely transporting more than 300 million tons of natura resources, manufactured products, and finished goods throughout North America every year for its customers. With its 18,800-mile rail network and related transportation services, CN connects Canada's Eastern and Western coasts with the U.S. Midwest and the Gulf of Mexico, contributing to sustainable trade and the prosperity of th ...