Financial Data and Key Metrics Changes - In Q4 2025, the company achieved a 14% growth in EPS and a 7% growth for the full year, aligning with mid to high single-digit guidance [7] - The operating ratio improved to 60.1% in Q4, a 250 basis point improvement year-over-year, and 61.7% for the full year, improving 120 basis points compared to 2024 [7][32] - Free cash flow reached $3.3 billion, up 8% driven by cash from operations, with disciplined capital spending [7][35] Business Line Data and Key Metrics Changes - The company saw a 5% year-over-year increase in workload, supported by strong grain demand, achieving record-setting grain tonnage for four consecutive months [17] - Intermodal revenues increased by 13% internationally and 6% domestically, benefiting from a favorable comparison against last year's port labor disruption [25] - Petroleum and Chemicals segments experienced growth, particularly a 9% increase in natural gas liquids volumes driven by strong domestic demand [25] Market Data and Key Metrics Changes - The company faced challenges in the forest products and metals markets due to weak fundamentals and tariffs, impacting overall revenue by over $350 million in 2025 [26] - The outlook for 2026 indicates flat volumes compared to 2025, with expectations of continued pressure in forest products and metals [30][37] Company Strategy and Development Direction - The company is focused on disciplined execution, prioritizing areas it can control, and maintaining strong cash flow while returning excess capital to shareholders [6][12] - The management emphasized the importance of operational efficiency and cost control, with plans to leverage productivity gains as volumes improve [12][20] - The company is positioned to benefit from its access to North American markets and a strong natural resource base, with a focus on diversifying trade [15][58] Management's Comments on Operating Environment and Future Outlook - Management acknowledged significant macroeconomic volatility and uncertainty, particularly regarding tariffs and trade flows, which could impact future performance [10][11] - The company expects a challenging environment in 2026, with a focus on maintaining pricing discipline and productivity despite headwinds [37] - Management expressed confidence in the underlying earnings power of the business and the potential for growth as market conditions normalize [75] Other Important Information - The board approved a 3% increase in dividends, marking the 30th consecutive year of dividend growth, reflecting confidence in cash generation [36] - A new share buyback program was authorized, allowing the repurchase of up to 24 million common shares [36] Q&A Session Summary Question: Update on incremental revenue target - The company closed Q4 with $100 million in incremental revenue, with an additional $100 million in the pipeline for January [44] Question: Clarification on depreciation - The variance in depreciation is due to a favorable study and corrections from over-depreciation in past acquisitions [49] Question: Long-term earnings power and CapEx - The company is focused on structural cost reduction and has invested in network capacity, positioning itself for future growth despite current headwinds [73][75] Question: Volume outlook for 2026 - The company expects strength in agriculture and energy sectors, while forest products and metals may face challenges [66]

Fourth Quarter and Full Year 2025 Financial and Operating Results January 30th, 2026 Q4 Introduction CN reports its financial results in accordance with United States generally accepted accounting principles (GAAP). CN may also use non-GAAP measures in this presentation that do not have any standardized meaning prescribed by GAAP. These non-GAAP measures may not be comparable to similar measures presented by other companies. Forward-looking statements Certain statements included in this presentation constit ...

Core Viewpoint - CN has announced a 3% increase in its 2026 dividend and a new share repurchase program, reflecting strong cash flow and a disciplined capital management approach [1][2]. Dividend Announcement - The Board of Directors approved a quarterly dividend of C$0.9150 per common share, to be paid on March 31, 2026, to shareholders of record by March 10, 2026 [6]. Share Repurchase Program - The new normal course issuer bid (Bid) allows CN to repurchase up to 24 million common shares, representing 3.9% of the total shares outstanding as of January 22, 2026 [2][4]. - The Bid will run from February 4, 2026, to February 3, 2027, and will include various methods of share acquisition, subject to regulatory approvals [3][4]. - The previous share repurchase program, which allowed for the purchase of up to 20 million shares, is set to expire on February 3, 2026, with 15,250,222 shares repurchased at an average price of C$134.44 [5].

Core Insights - CN reported strong financial and operational results for Q4 and the full year 2025, demonstrating disciplined execution and a focus on customer opportunities [2][3] - The company anticipates continued macroeconomic uncertainty and geopolitical risks in 2026, emphasizing disciplined capital allocation and cost management to enhance free cash flow [3] Quarterly Financial Results Highlights - Q4 2025 diluted EPS grew by 12%, or 14% on an adjusted basis, with an operating ratio of 61.2%, improving by 1.4 points [6][7] - Revenues for Q4 2025 reached C$4,464 million, a 2% increase from Q4 2024, while operating income rose by 6% to C$1,733 million [7] - Net income for Q4 2025 was C$1,248 million, a 9% increase compared to the previous year [7] Full-Year Financial Highlights - For the full year 2025, diluted EPS increased by 8%, or 7% on an adjusted basis, with an operating ratio of 61.9%, improving by 1.5 points [6][8] - Total revenues for 2025 were C$17,304 million, up 2% from 2024, with operating income increasing by 5% to C$6,587 million [7] - Net income for 2025 was C$4,720 million, a 6% increase from 2024 [7] Operating Performance Highlights - Gross ton miles (GTMs) increased by 5% to 118,923 million in Q4 2025, while revenue ton miles (RTMs) rose by 4% to 61,707 million [7] - The operating expenses per GTM decreased by 4% to 2.30 cents in Q4 2025 [7] - Full-year GTMs increased by 1% to 463,002 million, and RTMs also rose by 1% to 238,159 million [14] Shareholder Returns - The Board of Directors approved a 3% increase in the quarterly cash dividend for 2026, marking the 30th consecutive year of dividend increases [11] - CN plans to repurchase up to 24 million common shares over a 12-month period starting February 4, 2026 [11] 2026 Financial Guidance - CN expects volume growth in RTMs to be flat in 2026, with adjusted diluted EPS growth anticipated to slightly exceed volume growth [10] - The capital program spending for 2026 is set at C$2.8 billion, a decrease of C$500 million from 2025 [6][10]

Canadian National reported fourth-quarter revenue and operating income improved as it moved higher volumes of freight more efficiently from the same period a year ago. Revenues of US$3.30 billion increased 2% while operating income of $1.28 billion was higher by 6%, the company said in a release prior to market openings. Adjusted operating income increased 9% to $1.32 billion. Net income of $920 million also was 9% higher, and adjusted net income of $1.28 million grew 12%. Diluted earnings per share inc ...

Core Insights - The company views 2025 as a pivotal year for operational changes aimed at enhancing resilience and efficiency under PSR 2.0 [1] - Safety and operational improvements were emphasized, with zero reportable mainline derailments in Q4 and over 75% of monthly traffic scanned by new digital inspection technology [1][4] Financial Performance - In Q4, total volume decreased by 4% and total revenue fell by 2%, although revenue per unit (RPU) increased by 2% year-over-year [2][6] - The adjusted operating ratio for Q4 was reported at 65.3, with earnings per share (EPS) at $3.22 and free cash flow of $2.2 billion for 2025 [5][14] - The company guided a cost envelope for 2026 between $8.2 billion and $8.4 billion, with capital expenditures (capex) projected at approximately $1.9 billion [19][20] Operational Highlights - The company reported significant improvements in safety metrics, including a 15% improvement in the reportable injury ratio and a 31% reduction in reportable accidents [9] - Productivity metrics showed a 4% increase in train load, nearly 10% reduction in horsepower per ton, and a 31% decrease in unscheduled stops year-over-year [7][9] Segment Performance - Merchandise volume increased by 1% year-over-year in Q4, driven by the automotive and chemicals markets, while intermodal volume fell by 7% and coal revenue declined by 11% due to lower seaborne prices [8][10][11] - For the full year, merchandise revenue excluding fuel grew by $287 million, or 4%, with record annual revenue achieved across all merchandise business groups [12][13] Future Outlook - The company plans to focus on safety, consistent service, and cost control in 2026, while addressing inflationary pressures and maintaining productivity commitments [19][21] - The merger process with Union Pacific is ongoing, with the company responding to regulatory requests and emphasizing stakeholder engagement [22]

Financial Results Announcement - CN will issue its fourth-quarter and full-year 2025 financial and operating results on January 30, 2026, at 7:30 a.m. Eastern Time [1] - A conference call to review the results and the railway's outlook will start at 8:30 a.m. Eastern Time, led by Tracy Robinson, CN President and CEO [1] Participation Details - Interested parties can participate via telephone by dialing 1-800-715-9871 (Canada/U.S.) or 1-647-932-3411 (International), using passcode 4883669 [2] - Participants are advised to join the call 10 minutes early, and a live webcast will be available on CN's investor website [2] Company Overview - CN transports over 300 million tons of natural resources, manufactured products, and finished goods across North America annually [3] - The company operates a nearly 20,000-mile rail network, connecting Canada's Eastern and Western coasts with the U.S. Midwest and Gulf Coast, contributing to sustainable trade since 1919 [3]

Core Viewpoint - Canadian Pacific Kansas City Limited (CPKC) operates the only single-line rail network connecting Canada, the U.S., and Mexico, with approximately 20,000 miles of track [1] Company Overview - CPKC is classified as a Class I railroad, indicating its significant size and operational capacity within the North American rail industry [1] Market Position - The company plays a crucial role in linking three major North American economies, which may provide unique competitive advantages in logistics and transportation [1]

Financial Data and Key Metrics Changes - In Q4 2025, total revenue decreased by 2% due to a 4% decline in overall volume, partially offset by a 2% increase in revenue per unit (RPU) [17][24] - The operating ratio for the quarter was reported at 65.3, reflecting a degradation due to top-line headwinds [24][25] - Free cash flow increased to $2.2 billion, up nearly $500 million from the previous year, with the highest conversion rate since 2021 [28] Business Line Data and Key Metrics Changes - Merchandise volume increased by 1%, driven by the automotive and chemicals markets, with merchandise revenue (less fuel) growing by 2% year-over-year [17][19] - Intermodal business experienced a 7% decline in volume, leading to a 6% decrease in revenue, despite a slight RPU increase of 1% [18] - Coal volume increased due to higher electricity demand, but revenue decreased by 11% due to lower seaborne coal prices [18][21] Market Data and Key Metrics Changes - The overall market outlook remains uncertain, with mixed expectations for vehicle production and manufacturing activity [21][22] - Elevated natural gas activity is driving demand in non-crude chemical sectors, while intermodal markets are expected to remain soft due to tariff volatility [22] - Utility coal demand is expected to remain strong, but seaborne coal prices face significant pressure [22] Company Strategy and Development Direction - The company is focused on safety, service reliability, and cost control as it navigates a challenging demand environment and prepares for a merger [29][30] - Capital spending is being reduced to $1.9 billion for 2026, reflecting a prudent approach while maintaining network reliability and safety [30] - The merger is viewed as a necessary catalyst for growth, aiming to enhance competition and provide better service options for customers [31] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a tough demand environment and competitive pressures impacting revenue, particularly in intermodal [36][38] - The company is committed to maintaining cost discipline and is prepared to handle various volume growth scenarios [30][36] - There is a focus on fighting for quality revenue and optimizing service offerings to retain and grow customer relationships [70][71] Other Important Information - The company achieved a record year in merchandise revenue, with significant improvements in safety performance, including zero reportable mainline derailments in Q4 [6][10] - The PSR 2.0 transformation has led to improved operational efficiency, with a 7% productivity increase despite a 4% reduction in workforce [7][12] Q&A Session Summary Question: How is the company thinking about volume and revenue strategy in a weak freight backdrop? - Management indicated a tough demand environment and acknowledged a revenue headwind from enhanced competition, but expressed confidence in maintaining performance in merchandise while addressing challenges in intermodal [36][38] Question: What is the perspective on the merger and its impact on competition? - Management emphasized that the merger would enhance competition and provide customers with more options, countering claims from competitors [43][45] Question: What steps are being taken to stem freight leakage due to competition? - The company is actively offering new services and optimizing revenue lines to combat competitive pressures, with a focus on quality revenue [50][51] Question: Can you elaborate on the operational expense guidance and its implications for earnings growth? - Management outlined that operational expenses are influenced by inflation, land sales, and productivity initiatives, with a focus on achieving year-over-year earnings growth despite challenges [60][62]

Financial Data and Key Metrics Changes - In Q4 2025, overall volume decreased by 4%, leading to a 2% reduction in total revenue [17][24] - The operating ratio for the quarter was reported at 65.3, with EPS at $3.22 per share [24] - Full-year results showed a 5% increase in net income compared to the previous year, despite a revenue growth projection of 3% that did not materialize [28] Business Line Data and Key Metrics Changes - Merchandise volume increased by 1%, driven by the automotive and chemicals markets, with merchandise revenue (less fuel) growing by 2% year-over-year [17][19] - Intermodal business experienced a 7% decline in volume, with revenue down by 6% due to challenging market conditions [18] - Coal volume increased due to higher electricity demand, but revenue decreased by 11% due to lower seaborne coal prices [18][21] Market Data and Key Metrics Changes - The outlook for merchandise markets remains mixed, with expectations of modest manufacturing activity growth amid economic uncertainty [21] - Intermodal markets are expected to remain soft due to tariff volatility and oversupply in truck capacity [22] - Utility coal demand is expected to remain strong, while seaborne coal prices face significant pressure [22] Company Strategy and Development Direction - The company is focused on safety, service reliability, and cost control as it navigates a challenging demand environment [29][30] - A reduction in capital spending to $1.9 billion for 2026 reflects a prudent approach while maintaining network reliability and safety [30] - The ongoing merger is viewed as a necessary catalyst for growth, enhancing competition and providing better service options for customers [31] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a tough demand environment and competitive pressures impacting revenue [36][50] - The company is committed to maintaining cost discipline and is prepared to handle various volume growth scenarios [30][62] - There is a focus on delivering quality revenue and optimizing service performance to retain customers [70] Other Important Information - The company achieved a record year in merchandise revenue, with significant improvements in safety performance, including zero reportable mainline derailments in Q4 [6][10] - The PSR 2.0 transformation has led to improved operational efficiency, with a 7% productivity increase despite a 4% reduction in workforce [7][12] Q&A Session Summary Question: How is the company thinking about volume and revenue strategy? - Management indicated a tough demand environment and acknowledged a revenue headwind from enhanced competition, focusing on maintaining cost within guidance [35][36] Question: What is the perspective on the merger and its impact on competition? - Management responded that competing railroads are opposed to the merger for self-serving reasons, emphasizing that the merger will enhance competition and provide better service options for customers [42][45] Question: What steps are being taken to stem freight leakage due to competition? - Management highlighted new service offerings and a commitment to fight for quality revenue, indicating readiness to adapt to competitive pressures [50][51] Question: Can you elaborate on the operational expense guidance and year-over-year earnings growth? - Management outlined that operational expenses are influenced by inflation, land sales, and productivity initiatives, with a focus on achieving year-over-year earnings growth despite challenges [57][62]