CN Operations have Recovered, Company Updates Outlook Following Labor Disruption

Operations have recovered but demand weakness persists in key sectors

MONTREAL, Sept. 10, 2024 (GLOBE NEWSWIRE) -- CN (TSX: CNR) (NYSE: CNI) announced today that its operations have recovered following several months of labor uncertainty as well as a complete shutdown of its Canadian network, and that it is adjusting its 2024 guidance and long-term financial outlook.

CN remains focused on the disciplined execution of its scheduled operating plan, growing volumes more than the economy as its company specific growth opportunities come online, pricing above rail inflation, and improving efficiency.

Network Recovery
The Company’s scheduled operating plan, and the steps taken to affect a safe and orderly shutdown, have enabled a swift network recovery following the labor stoppage. Car velocity, train speed and dwell have all recovered, and the Company is now essentially current with demand.

Updated 2024 financial guidance and long-term financial outlook ^{(1) (2)}
Due to the impact of CN’s labor uncertainty and work stoppage, the impact of the wildfires in Alberta, weaker than expected demand in forest products and metals, as well as the delayed recovery of overseas intermodal due to on-going port labor uncertainty, CN is revising its 2024 full year financial guidance. The quarter-to-date additional impact of labor uncertainty and the work stoppage, as well as the wildfires in Alberta, is estimated at around $0.20 of EPS.

CN now expects to deliver adjusted diluted EPS growth in the low single-digit range, compared to its July 23, 2024, expectation of mid to high single-digit growth. The Company continues to expect to invest approximately C$3.5 billion in its capital program, net of amounts reimbursed by customers. As a result of the reduction to earnings, CN now expects adjusted return on invested capital (ROIC) to be in the 13%-15% range, compared to its July 23, 2024, expectation of approximately 15%.

In light of updated expectations for 2024, and a weaker than expected economic environment, CN is replacing all its current financial outlook for the 2024-2026 period with the following: CN is now targeting compounded annual adjusted diluted EPS growth in the high single digit range.

(1) Non-GAAP Measures
CN reports its financial results in accordance with United States generally accepted accounting principles (GAAP). CN uses non-GAAP measures in this news release that do not have any standardized meaning prescribed by GAAP, including adjusted earnings per share (EPS), (referred to as adjusted performance measures). These non-GAAP measures may not be comparable to similar measures presented by other companies. For further details of these non-GAAP measures, including a reconciliation to the most directly comparable GAAP financial measures, refer to the section entitled “Adjusted performance measures” in the 2023 Annual MD&A, which may be found online on SEDAR at www.sedarplus.ca, on the SEC’s website at www.sec.gov through EDGAR, and on the Company’s website at www.cn.ca in the investors section. CN's full-year adjusted diluted EPS outlook and full-year adjusted ROIC outlook (2) exclude certain adjustments, which are expected to be comparable to adjustments made in prior years. However, management cannot individually quantify on a forward-looking basis the impact of these adjustments on its adjusted diluted EPS or its adjusted ROIC because these items, which could be significant, are difficult to predict and may be highly variable. As a result, CN does not provide a corresponding GAAP measure for, or reconciliation to, its adjusted diluted EPS outlook or its adjusted ROIC outlook.