● |
Operating income of C$1,382 million, an increase of 76 per cent, or nine per cent on an adjusted basis. (1)
|
● |
Revenues of C$3,598 million, an increase of C$389 million or 12 per cent.
|
● |
Diluted earnings per share (EPS) of C$1.46, an increase of 90 per cent, and adjusted diluted EPS of C$1.49, an increase of 16 per cent. (1)
|
● |
Operating ratio of 61.6 per cent, an improvement of 13.9 points, or an increase of 1.2 points on an adjusted basis. (1)
|
● |
Free cash flow for the first six months of 2021 was C$1,280 million. (1)
|
● |
Federal Railroad Association (FRA) injury frequency rate and accident rate improved by 31 per cent and 16 per cent, respectively.
|
● |
Fuel efficiency improved by two per cent to 0.86 US gallons of locomotive fuel consumed per 1,000 gross ton miles.
|
● |
Train length (in feet) decreased by two per cent.
|
● |
Through dwell (entire railroad, hours) improved by eight per cent.
|
● |
Car velocity (car miles per day) improved by four per cent.
|
● |
Through network train speed (mph) decreased by two per cent.
|
|
CN | 2021 Quarterly Review – Second Quarter 1
|
2 CN | 2021 Quarterly Review – Second Quarter |
|
|
CN | 2021 Quarterly Review – Second Quarter 3
|
Contacts:
|
|
Media
|
Investment Community
|
Mathieu Gaudreault
|
Paul Butcher
|
Senior Advisor
|
Vice-President
|
Media Relations
|
Investor Relations
|
1 (833) 946-3342
|
(514) 399-0052
|
media@cn.ca
|
investor.relations@cn.ca
|
4 CN | 2021 Quarterly Review – Second Quarter |
|
Three months ended June 30
|
Six months ended June 30
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Financial measures
|
||||||||||||||||
Key financial performance indicators (1)
|
||||||||||||||||
Total revenues ($ millions)
|
3,598
|
3,209
|
7,133
|
6,754
|
||||||||||||
Freight revenues ($ millions)
|
3,452
|
3,038
|
6,875
|
6,462
|
||||||||||||
Operating income ($ millions)
|
1,382
|
785
|
2,709
|
2,000
|
||||||||||||
Adjusted operating income ($ millions) (2)
|
1,382
|
1,271
|
2,572
|
2,486
|
||||||||||||
Net income ($ millions)
|
1,034
|
545
|
2,008
|
1,556
|
||||||||||||
Adjusted net income ($ millions) (2)
|
1,058
|
908
|
1,930
|
1,778
|
||||||||||||
Diluted earnings per share ($)
|
1.46
|
0.77
|
2.82
|
2.18
|
||||||||||||
Adjusted diluted earnings per share ($) (2)
|
1.49
|
1.28
|
2.71
|
2.49
|
||||||||||||
Free cash flow ($ millions) (2)
|
741
|
1,008
|
1,280
|
1,581
|
||||||||||||
Gross property additions ($ millions)
|
729
|
714
|
1,141
|
1,317
|
||||||||||||
Share repurchases ($ millions)
|
123
|
—
|
414
|
379
|
||||||||||||
Dividends per share ($)
|
0.615
|
0.575
|
1.230
|
1.150
|
||||||||||||
Financial position (1)
|
||||||||||||||||
Total assets ($ millions)
|
46,256
|
45,199
|
46,256
|
45,199
|
||||||||||||
Total liabilities ($ millions)
|
25,918
|
26,424
|
25,918
|
26,424
|
||||||||||||
Shareholders’ equity ($ millions)
|
20,338
|
18,775
|
20,338
|
18,775
|
||||||||||||
Financial ratio
|
||||||||||||||||
Operating ratio (%)
|
61.6
|
75.5
|
62.0
|
70.4
|
||||||||||||
Adjusted operating ratio (%) (2)
|
61.6
|
60.4
|
63.9
|
63.2
|
||||||||||||
Operational measures (3)
|
||||||||||||||||
Statistical operating data
|
||||||||||||||||
Gross ton miles (GTMs) (millions)
|
116,735
|
102,386
|
237,515
|
216,365
|
||||||||||||
Revenue ton miles (RTMs) (millions)
|
59,246
|
52,517
|
120,700
|
110,887
|
||||||||||||
Carloads (thousands)
|
1,469
|
1,294
|
2,900
|
2,629
|
||||||||||||
Route miles (includes Canada and the U.S.)
|
19,500
|
19,500
|
19,500
|
19,500
|
||||||||||||
Employees (end of period)
|
24,376
|
22,112
|
24,376
|
22,112
|
||||||||||||
Employees (average for the period)
|
24,410
|
22,431
|
24,459
|
23,848
|
||||||||||||
Key operating measures
|
||||||||||||||||
Freight revenue per RTM (cents)
|
5.83
|
5.78
|
5.70
|
5.83
|
||||||||||||
Freight revenue per carload ($)
|
2,350
|
2,348
|
2,371
|
2,458
|
||||||||||||
GTMs per average number of employees (thousands)
|
4,782
|
4,564
|
9,711
|
9,073
|
||||||||||||
Operating expenses per GTM (cents)
|
1.90
|
2.37
|
1.86
|
2.20
|
||||||||||||
Labor and fringe benefits expense per GTM (cents)
|
0.59
|
0.55
|
0.62
|
0.60
|
||||||||||||
Diesel fuel consumed (US gallons in millions)
|
100.4
|
90.2
|
211.7
|
199.1
|
||||||||||||
Average fuel price ($ per US gallon)
|
3.24
|
2.08
|
3.05
|
2.53
|
||||||||||||
Fuel efficiency (US gallons of locomotive fuel consumed per 1,000 GTMs)
|
0.86
|
0.88
|
0.89
|
0.92
|
||||||||||||
Train weight (tons)
|
9,840
|
9,922
|
9,623
|
9,491
|
||||||||||||
Train length (feet)
|
8,749
|
8,886
|
8,536
|
8,389
|
||||||||||||
Car velocity (car miles per day)
|
205
|
197
|
195
|
186
|
||||||||||||
Through dwell (entire railroad, hours)
|
7.7
|
8.4
|
8.0
|
8.4
|
||||||||||||
Through network train speed (miles per hour)
|
19.5
|
19.9
|
18.8
|
18.9
|
||||||||||||
Locomotive utilization (trailing GTMs per total horsepower)
|
204
|
204
|
201
|
192
|
||||||||||||
Safety indicators (4)
|
||||||||||||||||
Injury frequency rate (per 200,000 person hours)
|
0.95
|
1.38
|
1.29
|
1.85
|
||||||||||||
Accident rate (per million train miles)
|
1.79
|
2.13
|
1.49
|
2.05
|
(1)
|
Amounts expressed in Canadian dollars and prepared in accordance with United States generally accepted accounting principles (GAAP), unless otherwise noted.
|
(2)
|
See supplementary schedule entitled Non-GAAP Measures for an explanation of these non-GAAP measures.
|
(3)
|
Statistical operating data, key operating measures and safety indicators are unaudited and based on estimated data available at such time and are subject to change as more complete information becomes available.
Definitions of gross ton miles, fuel efficiency, train weight, train length, car velocity, through dwell and through network train speed are included within the Company’s Management’s Discussion and Analysis. Definitions of all other
indicators are provided on CN’s website, www.cn.ca/glossary.
|
(4)
|
Based on Federal Railroad Administration (FRA) reporting criteria.
|
|
CN | 2021 Quarterly Review – Second Quarter 5
|
Three months ended June 30
|
Six months ended June 30
|
|||||||||||||||||||||||||||||||
2021
|
2020
|
% Change
Fav (Unfav)
|
% Change at constant currency
Fav (Unfav) (1)
|
2021
|
2020
|
% Change
Fav (Unfav)
|
% Change at constant
currency
Fav (Unfav) (1)
|
|||||||||||||||||||||||||
Revenues ($ millions) (2)
|
||||||||||||||||||||||||||||||||
Petroleum and chemicals
|
685
|
585
|
17
|
%
|
28
|
%
|
1,346
|
1,376
|
(2
|
%)
|
4
|
%
|
||||||||||||||||||||
Metals and minerals
|
377
|
308
|
22
|
%
|
34
|
%
|
745
|
713
|
4
|
%
|
12
|
%
|
||||||||||||||||||||
Forest products
|
451
|
413
|
9
|
%
|
20
|
%
|
880
|
846
|
4
|
%
|
11
|
%
|
||||||||||||||||||||
Coal
|
158
|
140
|
13
|
%
|
19
|
%
|
284
|
283
|
—
|
%
|
4
|
%
|
||||||||||||||||||||
Grain and fertilizers
|
609
|
649
|
(6
|
%)
|
—
|
%
|
1,322
|
1,259
|
5
|
%
|
9
|
%
|
||||||||||||||||||||
Intermodal
|
1,037
|
874
|
19
|
%
|
23
|
%
|
2,005
|
1,723
|
16
|
%
|
20
|
%
|
||||||||||||||||||||
Automotive
|
135
|
69
|
96
|
%
|
114
|
%
|
293
|
262
|
12
|
%
|
20
|
%
|
||||||||||||||||||||
Total freight revenues
|
3,452
|
3,038
|
14
|
%
|
22
|
%
|
6,875
|
6,462
|
6
|
%
|
12
|
%
|
||||||||||||||||||||
Other revenues
|
146
|
171
|
(15
|
%)
|
(7
|
%)
|
258
|
292
|
(12
|
%)
|
(6
|
%)
|
||||||||||||||||||||
Total revenues
|
3,598
|
3,209
|
12
|
%
|
20
|
%
|
7,133
|
6,754
|
6
|
%
|
11
|
%
|
||||||||||||||||||||
Revenue ton miles (RTMs) (millions) (3)
|
||||||||||||||||||||||||||||||||
Petroleum and chemicals
|
10,054
|
8,832
|
14
|
%
|
14
|
%
|
20,786
|
22,520
|
(8
|
%)
|
(8
|
%)
|
||||||||||||||||||||
Metals and minerals
|
6,652
|
3,881
|
71
|
%
|
71
|
%
|
12,945
|
10,357
|
25
|
%
|
25
|
%
|
||||||||||||||||||||
Forest products
|
6,957
|
6,029
|
15
|
%
|
15
|
%
|
13,627
|
12,351
|
10
|
%
|
10
|
%
|
||||||||||||||||||||
Coal
|
4,648
|
4,242
|
10
|
%
|
10
|
%
|
8,674
|
8,320
|
4
|
%
|
4
|
%
|
||||||||||||||||||||
Grain and fertilizers
|
14,922
|
15,062
|
(1
|
%)
|
(1
|
%)
|
32,763
|
29,261
|
12
|
%
|
12
|
%
|
||||||||||||||||||||
Intermodal
|
15,409
|
14,157
|
9
|
%
|
9
|
%
|
30,642
|
26,919
|
14
|
%
|
14
|
%
|
||||||||||||||||||||
Automotive
|
604
|
314
|
92
|
%
|
92
|
%
|
1,263
|
1,159
|
9
|
%
|
9
|
%
|
||||||||||||||||||||
Total RTMs
|
59,246
|
52,517
|
13
|
%
|
13
|
%
|
120,700
|
110,887
|
9
|
%
|
9
|
%
|
||||||||||||||||||||
Freight revenue / RTM (cents) (2) (3)
|
||||||||||||||||||||||||||||||||
Petroleum and chemicals
|
6.81
|
6.62
|
3
|
%
|
12
|
%
|
6.48
|
6.11
|
6
|
%
|
13
|
%
|
||||||||||||||||||||
Metals and minerals
|
5.67
|
7.94
|
(29
|
%)
|
(22
|
%)
|
5.76
|
6.88
|
(16
|
%)
|
(10
|
%)
|
||||||||||||||||||||
Forest products
|
6.48
|
6.85
|
(5
|
%)
|
4
|
%
|
6.46
|
6.85
|
(6
|
%)
|
1
|
%
|
||||||||||||||||||||
Coal
|
3.40
|
3.30
|
3
|
%
|
8
|
%
|
3.27
|
3.40
|
(4
|
%)
|
—
|
%
|
||||||||||||||||||||
Grain and fertilizers
|
4.08
|
4.31
|
(5
|
%)
|
—
|
%
|
4.04
|
4.30
|
(6
|
%)
|
(2
|
%)
|
||||||||||||||||||||
Intermodal
|
6.73
|
6.17
|
9
|
%
|
13
|
%
|
6.54
|
6.40
|
2
|
%
|
5
|
%
|
||||||||||||||||||||
Automotive
|
22.35
|
21.97
|
2
|
%
|
12
|
%
|
23.20
|
22.61
|
3
|
%
|
10
|
%
|
||||||||||||||||||||
Total freight revenue / RTM
|
5.83
|
5.78
|
1
|
%
|
8
|
%
|
5.70
|
5.83
|
(2
|
%)
|
3
|
%
|
||||||||||||||||||||
Carloads (thousands) (3)
|
||||||||||||||||||||||||||||||||
Petroleum and chemicals
|
143
|
131
|
9
|
%
|
9
|
%
|
293
|
304
|
(4
|
%)
|
(4
|
%)
|
||||||||||||||||||||
Metals and minerals
|
241
|
217
|
11
|
%
|
11
|
%
|
464
|
458
|
1
|
%
|
1 |
% |
||||||||||||||||||||
Forest products
|
90
|
83
|
8
|
%
|
8
|
%
|
176
|
171
|
3
|
%
|
3
|
%
|
||||||||||||||||||||
Coal
|
100
|
71
|
41
|
%
|
41
|
%
|
169
|
148
|
14
|
%
|
14
|
%
|
||||||||||||||||||||
Grain and fertilizers
|
162
|
162
|
—
|
%
|
—
|
%
|
338
|
312
|
8
|
%
|
8
|
%
|
||||||||||||||||||||
Intermodal
|
691
|
609
|
13
|
%
|
13
|
%
|
1,367
|
1,157
|
18
|
%
|
18
|
%
|
||||||||||||||||||||
Automotive
|
42
|
21
|
100
|
%
|
100
|
%
|
93
|
79
|
18
|
%
|
18
|
%
|
||||||||||||||||||||
Total carloads
|
1,469
|
1,294
|
14
|
%
|
14
|
%
|
2,900
|
2,629
|
10
|
%
|
10
|
%
|
||||||||||||||||||||
Freight revenue / carload ($) (2) (3)
|
||||||||||||||||||||||||||||||||
Petroleum and chemicals
|
4,790
|
4,466
|
7
|
%
|
17
|
%
|
4,594
|
4,526
|
2
|
%
|
8
|
%
|
||||||||||||||||||||
Metals and minerals
|
1,564
|
1,419
|
10
|
%
|
21
|
%
|
1,606
|
1,557
|
3
|
%
|
10
|
%
|
||||||||||||||||||||
Forest products
|
5,011
|
4,976
|
1
|
%
|
10
|
%
|
5,000
|
4,947
|
1
|
%
|
8
|
%
|
||||||||||||||||||||
Coal
|
1,580
|
1,972
|
(20
|
%)
|
(16
|
%)
|
1,680
|
1,912
|
(12
|
%)
|
(9
|
%)
|
||||||||||||||||||||
Grain and fertilizers
|
3,759
|
4,006
|
(6
|
%)
|
—
|
%
|
3,911
|
4,035
|
(3
|
%)
|
1
|
%
|
||||||||||||||||||||
Intermodal
|
1,501
|
1,435
|
5
|
%
|
9
|
%
|
1,467
|
1,489
|
(1
|
%)
|
1
|
%
|
||||||||||||||||||||
Automotive
|
3,214
|
3,286
|
(2
|
%)
|
7
|
%
|
3,151
|
3,316
|
(5
|
%)
|
2
|
%
|
||||||||||||||||||||
Total freight revenue / carload
|
2,350
|
2,348
|
—
|
%
|
7
|
%
|
2,371
|
2,458
|
(4
|
%)
|
1
|
%
|
(1)
|
See supplementary schedule entitled Non-GAAP Measures for an explanation of this non-GAAP measure.
|
(2)
|
Amounts expressed in Canadian dollars.
|
(3)
|
Statistical operating data and related key operating measures are unaudited and based on estimated data available at such time and are subject to change as more complete information becomes available.
|
6 CN | 2021 Quarterly Review – Second Quarter |
|
Three months ended June 30
|
Six months ended June 30
|
|||||||||||||||
In millions, except per share data
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Net income
|
$
|
1,034
|
$
|
545
|
$
|
2,008
|
$
|
1,556
|
||||||||
Adjustments:
|
||||||||||||||||
Amortization of bridge financing fees
|
32 |
— |
32 |
— |
||||||||||||
Loss (recovery) on assets held for sale
|
—
|
486
|
(137
|
)
|
486
|
|||||||||||
Income tax expense (recovery) (1)
|
(8
|
)
|
(123
|
)
|
27
|
(264
|
)
|
|||||||||
Adjusted net income
|
$
|
1,058
|
$
|
908
|
$
|
1,930
|
$
|
1,778
|
||||||||
Basic earnings per share
|
$
|
1.46
|
$
|
0.77
|
$
|
2.83
|
$
|
2.19
|
||||||||
Impact of adjustments, per share
|
0.03
|
0.51
|
(0.11
|
)
|
0.31
|
|||||||||||
Adjusted basic earnings per share
|
$
|
1.49
|
$
|
1.28
|
$
|
2.72
|
$
|
2.50
|
||||||||
Diluted earnings per share
|
$
|
1.46
|
$
|
0.77
|
$
|
2.82
|
$
|
2.18
|
||||||||
Impact of adjustments, per share
|
0.03
|
0.51
|
(0.11
|
)
|
0.31
|
|||||||||||
Adjusted diluted earnings per share
|
$
|
1.49
|
$
|
1.28
|
$
|
2.71
|
$
|
2.49
|
(1)
|
Includes the tax impact of: (i) adjustments based on the nature of the item for tax purposes and related tax rates in the applicable jurisdiction; or (ii) tax law changes and rate enactments.
|
|
CN | 2021 Quarterly Review – Second Quarter 7
|
Three months ended June 30
|
Six months ended June 30
|
|||||||||||||||
In millions, except percentage
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Operating income
|
$
|
1,382
|
$
|
785
|
$
|
2,709
|
$
|
2,000
|
||||||||
Adjustment: Loss (recovery) on assets held for sale
|
—
|
486
|
(137
|
)
|
486
|
|||||||||||
Adjusted operating income
|
$
|
1,382
|
$
|
1,271
|
$
|
2,572
|
$
|
2,486
|
||||||||
Operating ratio (1)
|
61.6
|
%
|
75.5
|
%
|
62.0
|
%
|
70.4
|
%
|
||||||||
Impact of adjustment
|
—
|
(15.1)-
|
pts |
1.9-
|
pts |
(7.2)-
|
pts |
|||||||||
Adjusted operating ratio
|
61.6
|
%
|
60.4
|
%
|
63.9
|
%
|
63.2
|
%
|
(1)
|
The operating ratio is defined as operating expenses as a percentage of revenues.
|
Three months ended June 30
|
Six months ended June 30
|
|||||||||||||||
In millions
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Net cash provided by operating activities
|
$
|
1,475
|
$
|
1,757
|
$
|
2,427
|
$
|
2,937
|
||||||||
Net cash used in investing activities
|
(1,642
|
)
|
(749
|
)
|
(2,055
|
)
|
(1,356
|
)
|
||||||||
Net cash provided before financing activities
|
(167
|
)
|
1,008
|
372
|
1,581
|
|||||||||||
Adjustment: Pending acquisition (1)
|
908
|
—
|
908
|
—
|
||||||||||||
Free cash flow
|
$
|
741
|
$
|
1,008
|
$
|
1,280
|
$
|
1,581
|
(1)
|
Relates to an advance to KCS and other transaction costs paid. See Note 3 - Pending KCS acquisition to CN’s unaudited Interim Consolidated Financial Statements for additional information.
|
8 CN | 2021 Quarterly Review – Second Quarter |
|
In millions, unless otherwise indicated
|
As at and for the twelve months ended June 30,
|
2021
|
2020
|
||||||
Debt
|
$
|
13,719
|
$
|
14,162
|
|||||
Adjustments:
|
|||||||||
Operating lease liabilities, including current portion
|
379
|
451
|
|||||||
Pension plans in deficiency
|
545
|
523
|
|||||||
Adjusted debt
|
$
|
14,643
|
$
|
15,136
|
|||||
Net income
|
$
|
4,014
|
$
|
3,624
|
|||||
Interest expense
|
559
|
554
|
|||||||
Income tax expense
|
1,310
|
1,004
|
|||||||
Depreciation and amortization
|
1,603
|
1,555
|
|||||||
EBITDA
|
7,486
|
6,737
|
|||||||
Adjustments:
|
|||||||||
Loss (recovery) on assets held for sale
|
(137
|
)
|
486
|
||||||
Other income
|
(48
|
)
|
(35
|
)
|
|||||
Other components of net periodic benefit income
|
(349
|
)
|
(316
|
)
|
|||||
Operating lease cost
|
135
|
156
|
|||||||
Adjusted EBITDA
|
$
|
7,087
|
$
|
7,028
|
|||||
Adjusted debt-to-adjusted EBITDA multiple (times)
|
2.07
|
2.15
|
|
CN | 2021 Quarterly Review – Second Quarter 9
|