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As Of Filer Filing ForOnAs Docs:Size Issuer Filing Agent 9/09/22 Canadian National Railway Co. 6-K 9/08/22 1:10M Toppan Merrill/FA |
Document/Exhibit Description Pages Size
1: 6-K Current, Quarterly or Annual Report by a Foreign HTML 136K
Issuer
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| 1 | 1st Page Filing Submission | ||||
| " | 2022 Investor Fact Book Update | ||||
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of September2022
Commission File Number: 001-02413
Canadian National Railway Company
(Translation of registrants name into English)
935 de la Gauchetiere Street West
Montreal, Quebec
Canada H3B 2M9
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form20-F or Form40-F:
| Form 20-F | Form 40-F | x |
Indicate by check mark if the registrant is submitting the Form6-K in paper as permitted by Regulation S-T Rule101(b)(1):
| Yes | No | x |
Indicate by check mark if the registrant is submitting the Form6-K in paper as permitted by Regulation S-T Rule101(b)(7):
| Yes | No | x |
Indicate by check mark whether by furnishing the information contained in this Form, the Registrant is also thereby furnishing the information to the Commission pursuant to Rule12g3-2(b)under the Securities Exchange Act of 1934:
| Yes | No | x |
If Yes is marked, indicate below the file number assigned to the registrant in connection with Rule12g3-2(b): N/A
CANADIAN NATIONAL RAILWAY COMPANY
| Items | Description | |
| 1 | 2022 Investor Fact Book Update |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Canadian National Railway Company | ||||
| Date: | September9, 2022 | By: | /s/ Cristina Circelli | |
| Name: | Cristina Circelli | |||
| Title: | Vice-President, Deputy Corporate Secretary and General Counsel | |||
| POWERING SUSTAINABLE GROWTH 2022 INVESTOR FACT BOOK UPDATE |
| FORWARD-LOOKING STATEMENTS Certain statements included in the CN 2022 Investor Fact Book Update constitute 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 managements 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. 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; 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; trade restrictions or other changes to international trade arrangements; 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 or other types of claims and litigation; risks and liabilities arising from derailments; timing and completion of capital programs; and other risks detailed from time to time in reports filed by CN with securities regulators in Canada and the United States. Reference should be made to Managements Discussion and Analysis in CNs annual and interim reports, Annual Information Form and Form 40-F, filed with Canadian and U.S. securities regulators and available on CNs website, for a description of major risk factors relating to CN. Forward-looking statements reflect information as at 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. As used herein, Company or CN refers to Canadian National Railway Company and, as the context requires, its wholly owned subsidiaries. PICTURED ABOVE: Nathalie Bergeron, Locomotive Engineer, Montreal, QC ON THE COVER: Henry House, AB (photo by CN employee Tim Stevens) |
| Contents Except where otherwise indicated, all financial information reflected in this document is expressed in Canadian dollars and determined on the basis of United States generally accepted accounting principles (GAAP). OVERVIEW 02 Delivering Value For Our Shareholders 04 Key Advantages and Core Strengths 06 Message from the President and CEO 08 Financial and Operating Measures MARKETS 10 Market Overview 12 Petroleum and Chemicals 14 Metals and Minerals 16 Forest Products 18 Coal 20 Grain and Fertilizers 22 Intermodal 24 Automotive FINANCIALS 26 Quarterly Consolidated Statements of Income 27 Quarterly Consolidated Balance Sheets 28 Quarterly Consolidated Statements of Cash Flows 30 Quarterly Financial and Statistical Data 32 Non-GAAP Measures 40 Shareholder and Investor Information (1) 18,600 route miles reflects the Q1 2022 sale of non-core lines in Wisconsin, Michigan, and Ontario. CN is a world‑class transportation leader and trade enabler. Essential to the economy, to the customers, and to the communities it serves, CN safely transports about 300 million tonnes of natural resources, manufactured products, and finished goods throughout North America every year. CNs advantaged 18,600‑mile(1) rail network, which connects Canadas eastern and western coasts with the southern coast of the U.S., efficiently meets customers needs and drives enduring profitable growth. CN is committed to programs supporting social responsibility and environmental stewardship. POWERING SUSTAINABLE GROWTH POWERING SUSTAINABLE GROWTH 01 01 |
| 2021 highlights (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. See the Companys selected financial information restated for change in accounting policy filed on September 9, 2022, which may be found online on SEDAR at www.sedar.com, on the SECs website at www.sec.gov through EDGAR, and on the Companys website at www.cn.ca in the Investors section, for additional information. (2) These non-GAAP measures do not have any standardized meaning prescribed by GAAP and, therefore, may not be comparable to similar measures presented by other companies. See section entitled Non-GAAP Measures for an explanation of these non-GAAP measures. (3) Operating ratio is defined as operating expenses as a percentage of revenues. TOTAL REVENUES $14.5B FREE CASH FLOW (2) $3.3B DILUTED EARNINGS PER SHARE (1) $6.90 OPERATING RATIO (3) 61.2 % ADJUSTED DILUTED EARNINGS PER SHARE (1) (2) $5.95 ADJUSTED ROIC (2) 14.1% p Share repurchases p Dividends SHAREHOLDER DISTRIBUTION ($ millions) ) See section entitled Non-GAAP Measures for an explanation of these non-GAAP measures. $15B RETURNED TO SHAREHOLDERS OVER THE LAST FIVE YEARS 26 consecutive years of dividend growth (15% CAGR in dividend rate), with a 19% increase approved for 2022. CN suspended its share buyback program in 2020 (pandemic) and part of 2021 (proposed combination with Kansas City Southern KCS); CNs current normal course issuer bid is in the range of $5B for up to 42M shares. 88% TOTAL SHAREHOLDER RETURN SINCE JANUARY 2017 CNs share price on the TSX (CNR) has increased at a compound annual growth rate (CAGR) of 18.2% since our initial public offering (IPO) in 1995. DELIVERING VALUE FOR OUR SHAREHOLDERS CNR (TSX) CNI (NYSE) S&P 500 TSX CNS STOCK PERFORMANCE (Index: Closing price on December 3, 206 = 00) Source: FactSet Overview Overview CN | 2022 INVESTOR FACT BOOK UPDATE 02 |
| Ferland, ON Photo by CN employee Chris Wilson CN | 2022 INVESTOR FACT BOOK UPDATE 03 |
| Kamloops Fort Nelson Hay River Fort McMurray Matane Baie-Comeau Sept-les Springfield East St. Louis East Peoria Conneaut Pittsburgh New London Duluth Stevens Point Omaha Sioux City Sault Ste. Marie Fond du Lac Sarnia Buffalo Baton Rouge Minneapolis/St. Paul Regina Toledo Decatur Calgary Jackson Prince George Worcester Arcadia Chippewa Falls Auburn Indianapolis Joliet Pascagoula Green Bay Gulfport Moncton Syracuse Mobile Quebec Montreal New Orleans Prince Rupert Vancouver Halifax Saint John Saskatoon Chicago Memphis Edmonton Toronto Detroit Thunder Bay Winnipeg Strong balance sheet that provides financial flexibility CN is committed to long-term sustainable value for our shareholders. Our first use of cash is investing in our business to sustain and strengthen our network, ensure safety and fluidity, and enable growth. CN also returns value to shareholders through dividend payments and share repurchases. Building for a sustainable future Delivering Responsibly is at the heart of how CN operates. It means moving customer goods safely and efficiently, being environmentally responsible, attracting and developing the best railroaders, helping build safer, stronger communities, while adhering to the highest ethical standards. Advantaged network with three-coast access CN spans the continent, reaching from coast to coast to coast. The network was built through key acquisitions across Canada and in the U.S., including our fluidity advantage around Chicago. CNs unique footprint provides optionality that is of increasing importance to our customers in a world of emerging and shifting trade patterns. Scheduled railroad with a focus on velocity As the industry pioneers in scheduled railroading, CNs focus on car velocity benefits customers and shareholders alike. Running a scheduled railroad allows us to unlock additional capacity, while identifying key corridors for further capacity investment. CN main lines Secondary and feeder lines Shortline partners Ports served by CN LEGEND OPERATIONAL EXCELLENCE EVERY DAY CN is an operational and sustainability leader and an engine of North American economic growth and prosperity. We deliver reliable, efficient and cost-effective transportation services with a continuous focus on service, productivity and safety. CN facilitates end-to-end supply chains to unlock long-term, profitable growth and deliver sustainable transportation services for our customers. KEY ADVANTAGES AND CORE STRENGTHS REVENUES BY COMMODITY GROUP (% of total revenues) p % Intermodal p % Petroleum and chemicals p % Grain and fertilizers p % Forest products p % Metals and minerals p % Automotive p% Coal p % Other revenues REVENUES BY GEOGRAPHIC FLOW (% of freight revenues) p % Overseas p % Transborder p 8% Canadian domestic p % U.S. domestic Balanced and diverse portfolio Broad geographic exposure Overview Overview 04 CN | 2022 INVESTOR FACT BOOK UPDATE |
| Kamloops Fort Nelson Hay River Fort McMurray Matane Baie-Comeau Sept-les Springfield East St. Louis East Peoria Conneaut Pittsburgh New London Duluth Stevens Point Omaha Sioux City Sault Ste. Marie Fond du Lac Sarnia Buffalo Baton Rouge Minneapolis/St. Paul Regina Toledo Decatur Calgary Jackson Prince George Worcester Arcadia Chippewa Falls Auburn Indianapolis Joliet Pascagoula Green Bay Gulfport Moncton Syracuse Mobile Quebec Montreal New Orleans Prince Rupert Vancouver Halifax Saint John Saskatoon Chicago Memphis Edmonton Toronto Detroit Thunder Bay Winnipeg Gary Leithton Munger West Chicago Joliet Matteson Chicago Heights Griffith Goose Lake Markam Waukegan South Chicago Chicago Outer Belt (CN) Chicago INDIANA ILLINOIS LAKE MICHIGAN FASTEST RAIL ROUTE IN AND AROUND CHICAGO $14.5B REVENUES 19,500 ROUTE MILES 22,600 EMPLOYEES (end of period) $2.9B CAPITAL INVESTMENTS (1) As at or for the year ending December 31, 2021 2021 key statistics(1) 05 CN | 2022 INVESTOR FACT BOOK UPDATE |
| MESSAGE FROM THE PRESIDENT AND CEO This is an exciting time for CN, and I am honoured to step into the role of President and CEO. I am delighted to be back in the industry. It truly feels like coming home. Leading CN, one of North Americas iconic companies, comes with both the privilege and responsibility of ensuring the continents supply chains deliver consistently, safely and responsibly. CNs focus on our employees, customers, the communities in which we operate, our partners and our shareholders will remain our priority over the long term. We succeed together. This is a transformational period at CN. Our goal to build the railway of the future is an expression of our intent to continuously innovate in safety, in efficiency, in sustainability, in engagement. This is how we will deliver for the future. Powering sustainable growth The past two years have presented some significant challenges in North America and around the globe. The impact of the pandemic, the effects of climate change, and the uncertainty of global security have challenged our sense of safety and order and impacted the reliability of our supply chains. As an important enabler of domestic freight movement and global trade links, it has never been more important for CN to deliver. We are uniquely positioned to power sustainable growth. We have North Americas best network, spanning Canada from the Atlantic to the Pacific and through the American heartland to the Gulf of Mexico. We also have a team of experienced and motivated railroaders to propel operational excellence, every day. Overview 06 CN | 2022 INVESTOR FACT BOOK UPDATE |
| North Americas economy relies on our ability to safely deliver the essential products our customers need. More than ever, our continents resources, agricultural products and manufactured goods are needed around the world. CN has the connections and know‑how to drive the continued growth of our customers and success of our team. And we can do it in a manner that continues to advance the efficiency of our operations. Delivering responsibly CN believes in Delivering Responsibly. This means moving our customers goods safely and efficiently, and ensuring we deliver in an environmentally responsible manner; attracting, developing, and retaining top diverse talent; helping to make the communities we serve safer and stronger; and adhering to the highest ethical standards. This is what we believe, and it is the way we approach our work every day. The heart of CN is the more than 22,000 skilled and dedicated railroaders who come to work to deliver for our customers. I am proud of the perseverance and resilience of our team, who power our performance and growth, and who increasingly represent the diversity of the communities we serve. We are welcoming the next generation of railroaders to our Company. They are helping us in our efforts to innovate, to continuously improve the safety of our employees and communities, to lighten our environmental footprint, to further engage with our Indigenous and community partners, and to develop the capabilities of our team. The future of railroading at CN is very bright. Lets go! This team, operating on the best rail network in North America and powered by innovation, collaboration and diversity of thought, is positioned to deliver strong and sustainable value for our customers, our partners, our communities and our shareholders, now and over the long term. We will make CN the safest and the best railroad in North America, and we will continue to build the railway of the future. Tracy Robinson President and Chief Executive Officer This team, operating on the best rail network in North America and powered by innovation, collaboration and diversity of thought, is positioned to deliver strong and sustainable value... now and over the long term. 07 CN | 2022 INVESTOR FACT BOOK UPDATE |
| TOTAL REVENUES ($ millions) OPERATING RATIO (%) Adjusted Operating Ratio() DILUTED EARNINGS PER SHARE ($) Adjusted Diluted Earnings Per Share() Financial measures 2017 2018 2019 2020 2021 KEY FINANCIAL PERFORMANCE INDICATORS Total revenues ($ millions) 13,041 14,321 14,917 13,819 14,477 Freight revenues ($ millions) 12,293 13,548 14,198 13,218 13,888 Operating income ($ millions) 5,243 5,493 5,593 4,777 5,616 Adjusted operating income ($ millions) (1) 5,243 5,520 5,708 5,263 5,622 Net income ($ millions) (2) 5,470 4,312 4,198 3,545 4,899 Adjusted net income ($ millions) (1) (2) 3,764 4,040 4,171 3,767 4,225 Diluted earnings per share ($) (2) 7.22 5.85 5.81 4.97 6.90 Adjusted diluted earnings per share ($) (1) (2) 4.97 5.48 5.78 5.28 5.95 Free cash flow ($ millions) (1) 2,778 2,514 1,992 3,227 3,296 Gross property additions ($ millions) 2,703 3,531 4,079 2,863 2,897 Share repurchases ($ millions) 2,000 2,000 1,700 379 1,582 Dividends per share ($) 1.65 1.82 2.15 2.30 2.46 FINANCIAL POSITION Total assets ($ millions) 37,629 41,214 43,784 44,804 48,538 Total liabilities ($ millions) 20,973 23,573 25,743 25,153 25,794 Shareholders equity ($ millions) 16,656 17,641 18,041 19,651 22,744 FINANCIAL RATIOS Operating ratio (%) 59.8 61.6 62.5 65.4 61.2 Adjusted operating ratio (%) 59.8 61.5 61.7 61.9 61.2 Adjusted debt-to-adjusted EBITDA multiple (times) (1) 1.75 1.93 2.01 1.98 1.82 Return on invested capital (ROIC) (%) (1) (2) 22.4 16.6 15.2 12.7 16.4 Adjusted ROIC (%) (1) (2) 15.8 15.6 15.1 13.3 14.1 FINANCIAL AND OPERATING MEASURES (1) These non-GAAP measures do not have any standardized meaning prescribed by GAAP and, therefore, may not be comparable to similar measures presented by other companies. See section entitled Non-GAAP Measures for an explanation of these non-GAAP measures. (2) 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. See the Companys selected financial information restated for change in accounting policy filed on September 9, 2022, which may be found online on SEDAR at www.sedar.com, on the SECs website at www.sec.gov through EDGAR, and on the Companys website at www.cn.ca in the Investors section, for additional information. Financial highlights Overview 08 CN | 2022 INVESTOR FACT BOOK UPDATE |
| GROSS TON MILES GTMs (billions) CAR VELOCITY (car miles per day) THROUGH NETWORK TRAIN SPEED (miles per hour) Operating measures(3) 2017 2018 2019 2020 2021 STATISTICAL OPERATING DATA Gross ton miles (GTMs) (billions) 469.2 490.4 482.9 455.4 458.4 Revenue ton miles (RTMs) (billions) 237.1 248.4 242.0 230.4 233.1 Carloads (thousands) 5,737 5,976 5,912 5,595 5,701 Route miles (includes Canada and the U.S.) 19,500 19,500 19,500 19,500 19,500 Employees (end of period) 23,945 25,720 25,975 24,381 22,604 Employees (average for the period) 23,074 25,423 26,733 23,786 24,084 KEY OPERATING MEASURES Freight revenue per RTM (cents) 5.18 5.45 5.87 5.74 5.96 Freight revenue per carload ($) 2,143 2,267 2,402 2,362 2,436 GTMs per average number of employees (thousands) 20,335 19,290 18,063 19,144 19,033 Operating expenses per GTM (cents) 1.66 1.80 1.93 1.99 1.93 Labor and fringe benefits expense per GTM (cents) 0.54 0.58 0.61 0.60 0.63 Diesel fuel consumed (US gallons in millions) 441.4 462.7 451.4 407.2 402.8 Average fuel price ($/US gallon) 2.74 3.32 3.17 2.42 3.28 Fuel efficiency (US gallons of locomotive fuel consumed per 1,000 GTMs) 0.941 0.943 0.935 0.894 0.879 OPERATING METRICS Car velocity (car miles per day) 200 184 194 185 195 Yard productivity (cars per yard switching hour) 51 49 47 46 47 Locomotive utilization (trailing GTMs per total horsepower) 225 208 198 196 198 Train weight (tons) 9,424 9,163 9,125 9,501 9,658 Through dwell (hours) (4) 7.7 8.3 7.9 8.6 7.9 Through network train speed (miles per hour) (4) 20.3 18.0 18.5 18.5 19.2 CN ROLLING STOCK Diesel locomotives (end of period) 2,285 2,412 2,398 2,382 2,302 Freight cars (end of period) 65,019 66,978 64,607 62,857 56,730 (3) Statistical operating data, key operating measures, operating metrics and rolling stock information are unaudited and based on estimated data available at such time and are subject to change as more complete information becomes available. Definitions of these indicators are provided on our website, www.cn.ca/glossary. (4) The Company no longer reports Terminal dwell and Train velocity and has replaced these measures with Through dwell and Through network train speed, respectively. Comparative figures have been adjusted to conform to the current presentation. Operational highlights 09 CN | 2022 INVESTOR FACT BOOK UPDATE |
| REVENUES BY COMMODITY GROUP (% of total revenues) p % Intermodal p % Petroleum and chemicals p % Grain and fertilizers p % Forest products p % Metals and minerals p % Automotive p% Coal p % Other revenues 4% OTHER REVENUES 4% COAL 11% METALS AND MINERALS 4% AUTOMOTIVE 17% GRAIN AND FERTILIZERS 20% PETROLEUM AND CHEMICALS 28% INTERMODAL 12% FOREST PRODUCTS Well-diversified portfolio supported by a solid base of customers and supply chain partners STRONG CUSTOMER PARTNERSHIPS CN is committed to being a customer-centric organization. We work with all our supply chain partners to deliver sustainable top‑tier transportation services for our customers by anticipating their needs, understanding their growth plans, earning their trust, and being agile. Our business model is anchored on end‑to‑end collaboration with our customers and supply chain partners from true origin to ultimate destination. We add value to this model by leveraging our expertise and technological innovation to advise our customers and help them win in their markets, because when our customers grow, CN grows along with them. MARKET OVERVIEW 300M tons ANNUAL CARGO CARRIED 9 ports SERVED ACROSS NORTH AMERICA 65% OF TRAFFIC ORIGINATING AND TERMINATING ON CNS NETWORK REVENUES BY COMMODITY GROUP (% of total revenues) p % Intermodal p % Petroleum and chemicals p % Grain and fertilizers p % Forest products p % Metals and minerals p % Automotive p% Coal p % Other revenues $14.5B TOTAL REVENUES Markets CN | 2022 INVESTOR FACT BOOK UPDATE 10 |
| REVENUES CARLOADS $ millions thousands 2017 2018 2019 2020 2021 % Change(1) 2017 2018 2019 2020 2021 % Change(1) Petroleum and chemicals 2,208 2,660 3,052 2,631 2,816 7% 614 653 688 597 596 0% Metals and minerals 1,523 1,689 1,643 1,409 1,548 10% 995 1,030 1,008 935 969 4% Forest products 1,788 1,886 1,808 1,700 1,740 2% 424 418 375 342 339 (1%) Coal 535 661 658 527 618 17% 303 346 335 289 379 31% Grain and fertilizers 2,214 2,357 2,392 2,609 2,475 (5%) 619 632 619 663 628 (5%) Intermodal 3,200 3,465 3,787 3,751 4,115 10% 2,514 2,634 2,618 2,582 2,611 1% Automotive 825 830 858 591 576 (3%) 268 263 269 187 179 (4%) Total rail freight 12,293 13,548 14,198 13,218 13,888 5% 5,737 5,976 5,912 5,595 5,701 2% Other 748 773 719 601 589 (2%) Total 13,041 14,321 14,917 13,819 14,477 5% RTMS AVERAGE LENGTH OF HAUL millions miles 2017 2018 2019 2020 2021 % Change(1) 2017 2018 2019 2020 2021 % Change(1) Petroleum and chemicals 44,375 50,722 53,989 43,556 42,436 (3%) 819 874 885 828 814 (2%) Metals and minerals 27,938 27,993 25,449 21,561 26,743 24% 339 336 315 287 336 17% Forest products 30,510 29,918 27,187 25,602 25,948 1% 840 839 841 859 875 2% Coal 14,539 17,927 17,653 16,173 18,471 14% 435 464 470 497 421 (15%) Grain and fertilizers 56,123 57,819 55,597 61,736 58,733 (5%) 905 905 887 913 909 0% Intermodal 59,356 60,120 58,344 59,165 58,412 (1%) 1,848 1,826 1,816 1,812 1,825 1% Automotive 4,257 3,884 3,735 2,597 2,395 (8%) 802 762 741 738 685 (7%) Total 237,098 248,383 241,954 230,390 233,138 1% 775 782 777 784 763 (3%) (1) % change from 2020 to 2021. Performance summary 11 CN | 2022 INVESTOR FACT BOOK UPDATE |
| High River Ashcroft Scotford Joliet Flat Rock Windsor Hamilton Fort McMurray Ferndale, WA Mont Belvieu, TX Regina Saskatoon Saint John Chicago Quebec Detroit Mobile Toronto Montreal Memphis Moncton New Orleans Edmonton Calgary Winnipeg Prince Rupert Vancouver Baton Rouge Sarnia Halifax Thunder Bay Petroleum Chemicals and plastics Sulfur Natural gas liquids Ports served by CN 1 CargoFlo 1 Propane export facility 1 Petrochemical facility 1 Petrochemical hub Shale play CNS PETROLEUM AND CHEMICALS SUPPLY CHAIN For more information please visit www.cn.ca/petroleum PETROLEUM AND CHEMICALS RELIABLE AND INTEGRAL PART OF MOVING ENERGY Natural gas and oil are the building blocks of the petrochemical industry. CNs geographical footprint allows our customers access to all three major petrochemical hubs in North America the U.S. Gulf Coast, Alberta Heartland and Southwestern Ontario. Additionally, our access to state-of-the-art export terminals on the Pacific and Gulf of Mexico position our customers products to compete on a global scale. This unique and robust supply chain positions CN to support North Americas New Green Energy evolution. Markets 12 CN | 2022 INVESTOR FACT BOOK UPDATE |
| High River Ashcroft Scotford Joliet Flat Rock Windsor Hamilton Fort McMurray Ferndale, WA Mont Belvieu, TX Regina Saskatoon Saint John Chicago Quebec Detroit Mobile Toronto Montreal Memphis Moncton New Orleans Edmonton Calgary Winnipeg Prince Rupert Vancouver Baton Rouge Sarnia Halifax Thunder Bay REVENUES ($ millions) CARLOADS (thousands) RTMs (millions) AVERAGE LENGTH OF HAUL (miles) METRICS KEY FACTS CN is the only rail carrier servicing three petrochemical hubs in North America CN handles over 50% of all Canadian chemicals production Petroleum and chemicals shipments move in customer-supplied private cars Prince Rupert propane exports expand CNs scope to international markets COMMODITIES PETROLEUM PRODUCTS Propane, butane, crude oil, gasoline, diesel, jet fuel, fuel oil, lubricants, asphalt, condensate CHEMICALS AND PLASTICS Polyethylene, polyvinyl chloride (PVC), caustic soda, sulfuric acid, pulp mill chemicals SULFUR Molten and dry sulfur MARKET DRIVERS North American automotive, housing and medical production Chemical and plastics feedstock prices North American liquefied natural gas (LNG) production North American hydrogen production New investment interest in North American green energy production Renewable diesel and sustainable aviation fuel production 2021 VS. 2017 CAGR $2,816M 2021 REVENUES BUSINESS UNIT OVERVIEW AND MARKET DRIVERS p % Refined Petroleum Products p % Chemicals and Plastics p % Crude and Condensate p% Sulfur 202 COMMODITY BREAKDOWN (% of revenues) +6.3% - 0.7% - 0.2 % - 1.1% 13 CN | 2022 INVESTOR FACT BOOK UPDATE |
| Scotford Bienfait Joliet Flat Rock Hamilton Fort McMurray Jackson Decatur Indianapolis Conneaut Pittsburgh Sault Ste. Marie Escanaba Arcadia Duluth Two Harbors Prince George Surrey North Vancouver Regina Toledo Minneapolis/St. Paul Chippewa Falls New Richmond Saguenay Baie-Comeau Sept-les Saskatoon Saint John Chicago Quebec Detroit Mobile Toronto Montreal Memphis Moncton New Orleans Edmonton Calgary Winnipeg Prince Rupert Vancouver Halifax Thunder Bay CNS METALS AND MINERALS SUPPLY CHAIN Metals Minerals Energy materials Iron ore Ports served by CN s Aluminum smelters 1 CN metals distribution centres 1 CN iron ore docks 1 Intermodal terminals For more information please visit www.cn.ca/metals METALS AND MINERALS SUPPLY CHAIN COLLABORATION DRIVES GROWTH Demand for cyclical commodities like metals and minerals follows drivers such as manufacturing, construction and energy sector activity. CN works closely with our customers to understand and anticipate their market cycles and help reach new markets. We plan our capacity and service to align with the future needs of our customers while looking for opportunities to create new supply chain options. Markets 14 CN | 2022 INVESTOR FACT BOOK UPDATE |
| REVENUES ($ millions) CARLOADS (thousands) RTMs (millions) AVERAGE LENGTH OF HAUL (miles) METRICS KEY FACTS CN serves 10 aluminum smelters, more than any other railroad in North America CN is the top mover of aluminum, iron ore and base metal ore in North America CN directly serves all the top shale plays in Canada, including the Western Canada Sedimentary Basin COMMODITIES METALS AND MINERALS Steel, non-ferrous ores and base metals, construction materials, machinery, railway equipment and large loads ENERGY MATERIALS Frac sand and pipe IRON ORE MARKET DRIVERS Manufacturing production (e.g., automobiles, railcars, heavy equipment, aerospace) Non-residential construction activity Government spending on infrastructure projects World demand for ores and metals Oil and gas production Consumer goods production +0.4% - 0.7% - 0.2% - 1.1% $1,548M 2021 REVENUES BUSINESS UNIT OVERVIEW AND MARKET DRIVERS p % Metals p % Minerals p % Energy Materials p % Iron Ore 202 COMMODITY BREAKDOWN (% of revenues) 2021 VS. 2017 CAGR 15 CN | 2022 INVESTOR FACT BOOK UPDATE |
| Edson Prince George Surrey North Battleford Atikokan Brockville Saint John Chicago Detroit Mobile Toronto Montreal Memphis Moncton New Orleans Edmonton Calgary Winnipeg Prince Rupert Vancouver Halifax Quebec Thunder Bay CNS FOREST PRODUCTS SUPPLY CHAIN Lumber and panels Pulp and paper Ports served by CN 1 CN forest products distribution centres For more information please visit www.cn.ca/forestproducts FOREST PRODUCTS REACHING FARTHER WITH OUR CUSTOMERS Forest products have long been part of CNs core business, utilizing multiple and often complex supply chains. CN is a critical trade enabler and transportation partner, helping to move our customers products throughout North America and around the world. Reflecting strong demand for lumber and panels used in home repair, renovation and new construction, CN continues to support its customers with a dedicated fleet. Markets 16 CN | 2022 INVESTOR FACT BOOK UPDATE |
| Edson Prince George Surrey North Battleford Atikokan Brockville Saint John Chicago Detroit Mobile Toronto Montreal Memphis Moncton New Orleans Edmonton Calgary Winnipeg Prince Rupert Vancouver Halifax Quebec Thunder Bay REVENUES ($ millions) CARLOADS (thousands) RTMs (millions) AVERAGE LENGTH OF HAUL (miles) METRICS KEY FACTS Largest rail carrier of forest products in North America Nearly 10% of total CN revenue tied to the housing market Upgraded fleet of over 20,000 premium cars COMMODITIES LUMBER & PANELS Lumber, oriented strand board (OSB) panels, plywood, siding, engineered wood products, timber mats PULP & PAPER Woodpulp, newsprint, printing paper, paperboard, containerboard, logs, wood chips, wood pellets MARKET DRIVERS LUMBER & PANELS Residential construction, repair and remodeling activity, industrial activity PULP & PAPER Global consumption of pulp, paper, tissue and packaging - 0.7% - 5.4% +1.0 % -4.0 % 2021 VS. 2017 CAGR $1,740M 2021 REVENUES BUSINESS UNIT OVERVIEW AND MARKET DRIVERS p % Lumber and Panels p % Pulp and Paper 202 COMMODITY BREAKDOWN (% of revenues) 17 CN | 2022 INVESTOR FACT BOOK UPDATE |
| Joliet East Dubuque East St. Louis Grand Rivers Calvert City Metropolis Mound City Prince George Kamloops Saskatoon Halifax Chicago Quebec Detroit Mobile Toronto Montreal Memphis Moncton New Orleans Edmonton Calgary Winnipeg Prince Rupert Vancouver Thunder Bay Saint John Sarnia Regina Fort McMurray Lloydminster Baton Rouge CNS COAL SUPPLY CHAIN Canadian coal U.S. coal Petroleum coke Ports served by CN 1 Coal mines 1 Petroleum coke sourcing 1 Barge transload terminals s Export terminals For more information please visit www.cn.ca/coal COAL COAL SUPPLY CHAIN COLLABORATION CN collaborates with all stakeholders to maximize the efficiency of getting our customers product to market. To provide optimal service, CN works closely with the end-to-end components of the coal supply chain, from mine to export terminal, to understand every detail of our customers shipments, adapting services to focus on the entire movement through the complete supply chain. Markets 18 CN | 2022 INVESTOR FACT BOOK UPDATE |
| Joliet East Dubuque East St. Louis Grand Rivers Calvert City Metropolis Mound City Prince George Kamloops Saskatoon Halifax Chicago Quebec Detroit Mobile Toronto Montreal Memphis Moncton New Orleans Edmonton Calgary Winnipeg Prince Rupert Vancouver Thunder Bay Saint John Sarnia Regina Fort McMurray Lloydminster Baton Rouge REVENUES ($ millions) CARLOADS (thousands) RTMs (millions) AVERAGE LENGTH OF HAUL (miles) METRICS KEY FACTS Canadian coal consists of both thermal and metallurgical coal Opportunities to grow and facilitate metallurgical coal exports through Convent Marine Terminals in Louisiana CN moves an average of 38 million tons of coal every year Overall, coal represents 4% of CN revenues COMMODITIES Grades of bituminous coal from thermal to metallurgical Metallurgical coke Petroleum coke MARKET DRIVERS Price of natural gas Weather Environmental regulations Global supply/demand conditions Steel production Power consumption +3.7% +5.8% -0.8 % +6.2% 2021 VS. 2017 CAGR $618M 2021 REVENUES BUSINESS UNIT OVERVIEW AND MARKET DRIVERS p % Canadian Coal Export p % Petroleum Coke p % U.S. Coal Export p % U.S. Coal Domestic 202 COMMODITY BREAKDOWN (% of revenues) 19 CN | 2022 INVESTOR FACT BOOK UPDATE |
| Saskatoon Saint John Chicago Quebec Detroit Mobile Toronto Montreal Memphis Moncton New Orleans Edmonton Calgary Winnipeg Prince Rupert Vancouver Halifax Thunder Bay CNS GRAIN AND FERTILIZERS SUPPLY CHAIN Canadian grain U.S. grain Fertilizers potash Fertilizers other Ports served by CN For more information please visit www.cn.ca/grain and www.cn.ca/fertilizer GRAIN AND FERTILIZERS EVOLUTION AND INNOVATION IN THE GRAIN SUPPLY CHAIN CNs network investments and hopper car fleet renewal have been complimented by grain companies and producers capacity investments over the past decade. Technology supports the long-term trend of increased grain production, and the supply chains efficiency has evolved to deliver more efficient grain movement, especially during times of peak demand. CNs grain franchise is growing in Canada and the U.S., and is well positioned as renewable fuel production evolves in North America. Markets 20 CN | 2022 INVESTOR FACT BOOK UPDATE |
| Saskatoon Saint John Chicago Quebec Detroit Mobile Toronto Montreal Memphis Moncton New Orleans Edmonton Calgary Winnipeg Prince Rupert Vancouver Halifax Thunder Bay BUSINESS UNIT OVERVIEW AND MARKET DRIVERS REVENUES ($ millions) CARLOADS (thousands) RTMs (millions) AVERAGE LENGTH OF HAUL (miles) METRICS COMMODITIES GRAIN Wheat, canola, peas, oats, barley, peas, corn, soybeans, ethanol, distillers dried grains, canola and soybean meal and oil, other oils and fats, malt FERTILIZER Potash, ammonia nitrate, urea, phosphate fertilizers, anhydrous ammonia, ammonium sulphate, liquid fertilizers MARKET DRIVERS GRAIN Weather conditions, seeded and harvested acreage, mix of grain crops and crop yield, size and quality of individual crops, inter national market conditions FERTILIZER Input prices, demand, government policies, international competition $2,475M 2021 REVENUES BUSINESS UNIT OVERVIEW AND MARKET DRIVERS p % Canadian Grain Regulated p % Canadian Grain Commercial p % U.S. Grain Domestic p % U.S. Grain Exports p% Fertilizers Potash p% Fertilizers Other 202 COMMODITY BREAKDOWN (% of revenues) 2021 VS. 2017 CAGR +2.8% +0.4% +0.1% +1.1% KEY FACTS Canadian grain accounts for roughly two-thirds of CNs grain-related revenue Of the 42 new high-throughput elevators on the Prairies, 30 have been or are being built on CN lines CNs U.S. grain footprint stretches from the Midwest to the Gulf Coast CN transports fertilizer throughout North America as well as exports through the Canadian West and East Coasts 21 CN | 2022 INVESTOR FACT BOOK UPDATE |
| Joliet Jackson MEXICO Arcadia Chippewa Falls New Richmond Indianapolis Prince George Duluth Regina Saskatoon Halifax Chicago Quebec Detroit Mobile Toronto Montreal Memphis Moncton New Orleans Edmonton Calgary Winnipeg Prince Rupert Vancouver Thunder Bay Saint John INTERMODAL CNS INTERMODAL SUPPLY CHAIN International Domestic Ports served by CN 1 Intermodal terminals 1 Logistics parks OFFERING THE BEST OF BOTH WORLDS TO OUR CUSTOMERS Our close and collaborative partnerships with customers and supply chain stakeholders enable the sustainable growth of our intermodal business and allow our customers to reach new markets. CN has been resilient in delivering for our customers as we meet the challenges brought about by global supply chain disruptions, and we continue to work with our customers to utilize our capacity more efficiently, which produces greater returns for our shareholders. Markets 22 CN | 2022 INVESTOR FACT BOOK UPDATE |
| Joliet Jackson MEXICO Arcadia Chippewa Falls New Richmond Indianapolis Prince George Duluth Regina Saskatoon Halifax Chicago Quebec Detroit Mobile Toronto Montreal Memphis Moncton New Orleans Edmonton Calgary Winnipeg Prince Rupert Vancouver Thunder Bay Saint John REVENUES ($ millions) CARLOADS (thousands) RTMs (millions) AVERAGE LENGTH OF HAUL (miles) METRICS KEY FACTS Supply chain collaboration agreements with key ports CargoCool has one of Canadas largest reefer fleets CNTL is one of Canadas largest trucking companies Full membership in Equipment Management Pool (EMP) Dedicated customer service desk COMMODITIES INTERNATIONAL Import and export containerized traffic DOMESTIC Consumer products for large retailers Raw materials, manufactured goods and consumer products for wholesale trucking and logistics clients International to domestic container transload conversion options for shippers MARKET DRIVERS North American economy and consumer spending Global trade patterns North American industrial production +6.5 % +1.0 % -0.3% -0.4 % 2021 VS. 2017 CAGR $4,115M 2021 REVENUES BUSINESS UNIT OVERVIEW AND MARKET DRIVERS p % International p % Domestic 202 COMMODITY BREAKDOWN (% of revenues) 23 CN | 2022 INVESTOR FACT BOOK UPDATE |
| Windsor Milton London Markham Charny St. Johns Jackson Saskatoon Saint John Chicago Quebec Detroit Mobile Toronto Montreal Memphis Moncton New Orleans Edmonton Calgary Winnipeg Prince Rupert Vancouver Sarnia Halifax Thunder Bay New Richmond AUTOMOTIVE CNS AUTOMOTIVE SUPPLY CHAIN Finished vehicles Auto parts Ports served by CN 1 CN automotive facilities For more information please visit www.cn.ca/automotive WORKING WITH CUSTOMERS TO MITIGATE TURBULENT TIMES CNs automotive business maximizes our network advantage by providing consistent and reliable service, proactive communication, and continued investment in infrastructure and equipment. While CN continues to work closely with customers to mitigate the impact of global automotive supply chain disruptions and vehicle chip shortages, we are ready to handle future customer demand in an efficient and cost-effective manner. Markets 24 CN | 2022 INVESTOR FACT BOOK UPDATE |
| Windsor Milton London Markham Charny St. Johns Jackson Saskatoon Saint John Chicago Quebec Detroit Mobile Toronto Montreal Memphis Moncton New Orleans Edmonton Calgary Winnipeg Prince Rupert Vancouver Sarnia Halifax Thunder Bay New Richmond REVENUES ($ millions) CARLOADS (thousands) RTMs (millions) AVERAGE LENGTH OF HAUL (miles) METRICS KEY FACTS 2.3 million finished vehicles handled annually 18 automotive facilities Originating 16 North American vehicle assembly plants and ports 5,000 multi-level railcars in CNs fleet COMMODITIES Finished vehicles Auto parts MARKET DRIVERS Global and North American automotive production and sales Consumer confidence and disposable income Average age of vehicles in North America Price of fuel -8.6% - 9.6 % -3.9% -13.4 % 2021 VS. 2017 CAGR $576M 2021 REVENUES BUSINESS UNIT OVERVIEW AND MARKET DRIVERS p % Finished Vehicles p % Auto Parts 202 COMMODITY BREAKDOWN (% of revenues) 25 CN | 2022 INVESTOR FACT BOOK UPDATE |
| Unaudited ($ millions, unless otherwise indicated) 2020 2021 Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year REVENUES 3,545 3,209 3,409 3,656 13,819 3,535 3,598 3,591 3,753 14,477 OPERATING EXPENSES Labor and fringe benefits 743 563 662 755 2,723 785 692 728 674 2,879 Purchased services and material 578 518 491 565 2,152 549 527 502 504 2,082 Fuel 360 227 262 303 1,152 364 380 350 419 1,513 Depreciation and amortization 392 404 391 402 1,589 404 406 405 383 1,598 Equipment rents 105 107 123 97 432 89 83 82 82 336 Casualty and other 152 119 114 123 508 154 128 99 125 506 Loss (recovery) on assets held for sale - 486 - - 486 (137) - - - (137) Transaction-related costs - - - - - - 84 - 84 Total operating expenses 2,330 2,424 2,043 2,245 9,042 2,208 2,216 2,250 2,187 8,861 Operating income 1,215 785 1,366 1,411 4,777 1,327 1,382 1,341 1,566 5,616 Interest expense (139) (144) (137) (134) (554) (130) (158) (197) (125) (610) Other components of net periodic benefit income (1) 72 74 74 72 292 99 98 98 112 407 Merger termination fee - - - - - - - 886 - 886 Other income (expense) 11 (4) (1) - 6 (2) 51 (27) 21 43 Income before income taxes (1) 1,159 711 1,302 1,349 4,521 1,294 1,373 2,101 1,574 6,342 Income tax expense (1) (152) (171) (320) (333) (976) (318) (337) (415) (373) (1,443) Net income (1) 1,007 540 982 1,016 3,545 976 1,036 1,686 1,201 4,899 Operating ratio 65.7% 75.5% 59.9% 61.4% 65.4% 62.5% 61.6% 62.7% 58.3% 61.2% EARNINGS PER SHARE ($)(1) Basic 1.41 0.76 1.38 1.43 4.98 1.37 1.46 2.38 1.70 6.91 Diluted 1.41 0.76 1.38 1.42 4.97 1.37 1.46 2.37 1.70 6.90 WEIGHTED AVERAGE NUMBER OF SHARES (millions) Basic 712.3 710.7 711.0 711.2 711.3 711.0 709.0 708.7 705.3 708.5 Diluted 713.9 712.2 712.8 713.2 713.0 712.8 710.6 710.4 707.4 710.3 Dividends declared per share ($) 0.575 0.575 0.575 0.575 2.300 0.615 0.615 0.615 0.615 2.300 QUARTERLY CONSOLIDATED STATEMENTS OF INCOME (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. See the Companys selected financial information restated for change in accounting policy filed on September 9, 2022, which may be found online on SEDAR at www.sedar.com, on the SECs website at www.sec.gov through EDGAR, and on the Companys website at www.cn.ca in the Investors section, for additional information. Financials 26 CN | 2022 INVESTOR FACT BOOK UPDATE |
| Unaudited ($ millions) 2020 2021 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 ASSETS Current assets Cash and cash equivalents 488 375 285 569 518 569 2,194 838 Restricted cash and cash equivalents 525 529 531 531 529 525 493 503 Accounts receivable 1,269 1,063 1,149 1,054 1,177 1,219 1,210 1,074 Material and supplies 679 649 616 583 633 638 622 589 Income taxes receivable 371 345 332 - - - - - Other current assets 284 282 243 365 517 535 418 422 Total current assets 3,616 3,243 3,156 3,102 3,374 3,486 4,937 3,426 Properties 41,393 40,478 40,445 40,069 39,816 39,918 40,753 41,178 Operating lease right-of-use assets 503 466 447 435 403 395 444 445 Pension asset (1) 488 594 696 777 959 1,085 1,209 3,050 Intangible assets, goodwill and other 435 418 414 421 416 459 431 439 Advance to KCS and other transaction costs - - - - - 921 - - Total assets (1) 46,435 45,199 45,158 44,804 44,968 46,264 47,774 48,538 LIABILITIES AND SHAREHOLDERS EQUITY Current liabilities Accounts payable and other 2,146 2,300 2,125 2,364 2,162 2,171 2,328 2,612 Current portion of long-term debt 2,592 1,055 871 910 676 1,579 1,224 508 Total current liabilities 4,738 3,355 2,996 3,274 2,838 3,750 3,552 3,120 Deferred income taxes (1) 8,383 8,267 8,320 8,271 8,407 8,486 8,698 9,303 Other liabilities and deferred credits 674 625 563 534 529 508 451 427 Pension and other postretirement benefits 742 734 729 767 759 752 751 645 Long-term debt 12,695 13,107 12,915 11,996 12,252 12,140 12,332 11,977 Operating lease liabilities 369 336 322 311 289 284 321 322 SHAREHOLDERS EQUITY Common shares 3,658 3,667 3,692 3,698 3,710 3,709 3,727 3,704 Common shares in Share Trusts (126) (124) (115) (115) (96) (97) (104) (103) Additional paid-in capital 363 357 367 379 368 379 381 397 Accumulated other comprehensive loss (1) (3,153) (3,348) (3,424) (3,711) (3,728) (3,766) (3,581) (2,241) Retained earnings (1) 18,092 18,223 18,793 19,400 19,640 20,119 21,246 20,987 Total shareholders equity (1) 18,834 18,775 19,313 19,651 19,894 20,344 21,669 22,744 Total liabilities and shareholders' equity (1) 46,435 45,199 45,158 44,804 44,968 46,264 47,774 48,538 QUARTERLY CONSOLIDATED BALANCE SHEETS (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. See the Companys selected financial information restated for change in accounting policy filed on September 9, 2022, which may be found online on SEDAR at www.sedar.com, on the SECs website at www.sec.gov through EDGAR, and on the Companys website at www.cn.ca in the Investors section, for additional information. 27 CN | 2022 INVESTOR FACT BOOK UPDATE |
| Unaudited ($ millions) 2020 2021 Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year OPERATING ACTIVITIES Net income (1) 1,007 540 982 1,016 3,545 976 1,036 1,686 1,201 4,899 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 392 404 391 402 1,589 404 406 405 383 1,598 Pension income and funding (1) (86) (40) (35) (50) (211) (112) (52) (51) (99) (314) Amortization of bridge financing and other fees - - - - - - 32 65 - 97 Deferred income taxes (1) 292 (16) 91 114 481 152 98 109 154 513 Loss (recovery) on assets held for sale - 486 - - 486 (137) - - - (137) Changes in operating assets and liabilities: Accounts receivable (1) 187 (96) 68 158 (129) (49) 21 135 (22) Material and supplies (52) 24 28 20 20 (49) (5) 17 30 (7) Accounts payable and other (406) 114 (208) 451 (49) (212) (10) 82 281 141 Other current assets 7 (1) 19 (25) - 1 18 40 (24) 35 Other operating activities, net 27 59 48 12 146 58 1 84 25 168 Net cash provided by operating activities 1,180 1,757 1,220 2,008 6,165 952 1,475 2,458 2,086 6,971 INVESTING ACTIVITIES Property additions (603) (714) (691) (855) (2,863) (412) (729) (836) (914) (2,891) Advance for acquisition and other transaction-related costs - - - - - - (908) - - (908) Refund of advance for acquisition - - - - - - - 886 - 886 Acquisitions, net of cash acquired - - (8) - (8) - - - - - Other investing activities, net (4) (35) (23) (13) (75) (1) (5) (8) 54 40 Net cash used in investing activities (607) (749) (722) (868) (2,946) (413) (1,642) 42 (860) (2,873) QUARTERLY CONSOLIDATED STATEMENTS OF CASH FLOWS (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. See the Companys selected financial information restated for change in accounting policy filed on September 9, 2022, which may be found online on SEDAR at www.sedar.com, on the SECs website at www.sec.gov through EDGAR, and on the Companys website at www.cn.ca in the Investors section, for additional information. Financials 28 CN | 2022 INVESTOR FACT BOOK UPDATE |
| Unaudited ($ millions) 2020 2021 Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year FINANCING ACTIVITIES Issuance of debt 947 810 - 32 1,789 389 14 - - 403 Repayment of debt (606) (574) (11) (30) (1,221) (258) (16) (568) (19) (861) Change in commercial paper, net 304 (983) (160) (434) (1,273) 13 903 164 (1,014) 66 Bridge financing and other fees - - - - - - (93) (4) - (97) Settlement of foreign exchange forward contracts on debt 21 40 (22) (13) 26 (9) (15) 25 (9) (8) Issuance of common shares for stock options exercised 22 7 22 5 56 20 2 19 11 52 Withholding taxes remitted on the net settlement of equity settled awards (43) (1) (4) - (48) (27) - (5) (5) (37) Repurchase of common shares (379) - - - (379) (277) (137) (72) (1,096) (1,582) Purchase of common shares for settlement of equity settled awards (2) (1) (6) - (9) - - (25) (2) (27) Purchase of common shares by Share Trusts (6) (5) 3 (6) (14) (7) (7) (7) (5) (26) Dividends paid (409) (408) (408) (409) (1,634) (436) (436) (435) (433) (1,740) Net cash used in financing activities (151) (1,115) (586) (855) (2,707) (592) 215 (908) (2,572) (3,857) Effect of foreign exchange fluctuations on cash, cash equivalents, restricted cash, and restricted cash equivalents 3 (2) - (1) - - (1) 1 - - Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents 425 (109) (88) 284 512 (53) 47 1,593 (1,346) 241 Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period 588 1,013 904 816 588 1,100 1,047 1,094 2,687 1,100 Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period 1,013 904 816 1,100 1,100 1,047 1,094 2,687 1,341 1,341 Cash and cash equivalents, end of period 488 375 285 569 569 518 569 2,194 838 838 Restricted cash and cash equivalents, end of period 525 529 531 531 531 529 525 493 503 503 Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period 1,013 904 816 1,100 1,100 1,047 1,094 2,687 1,341 1,341 SUPPLEMENTAL CASH FLOW INFORMATION Interest paid (183) (92) (186) (90) (551) (174) (85) (174) (79) (512) Income taxes refunded (paid) 9 2 (371) 7 (353) (188) (193) (201) (177) (759) 29 CN | 2022 INVESTOR FACT BOOK UPDATE |
| Unaudited 2020 2021 Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year REVENUES ($ millions) Petroleum and chemicals 791 585 591 664 2,631 661 685 715 755 2,816 Metals and minerals 405 308 342 354 1,409 368 377 410 393 1,548 Forest products 433 413 421 433 1,700 429 451 425 435 1,740 Coal 143 140 118 126 527 126 158 169 165 618 Grain and fertilizers 610 649 608 742 2,609 713 609 510 643 2,475 Intermodal 849 874 992 1,036 3,751 968 1,037 1,061 1,049 4,115 Automotive 193 69 177 152 591 158 135 137 146 576 Total freight revenues 3,424 3,038 3,249 3,507 13,218 3,423 3,452 3,427 3,586 13,888 Other revenues 121 171 160 149 601 112 146 164 167 589 Total revenues 3,545 3,209 3,409 3,656 13,819 3,535 3,598 3,591 3,753 14,477 STATISTICAL OPERATING DATA Gross ton miles (GTMs) (millions) 113,979 102,386 113,693 125,310 455,368 120,780 116,735 110,690 110,196 458,401 Revenue ton miles (RTMs) (millions) 58,370 52,517 56,296 63,207 230,390 61,454 59,246 55,875 56,563 233,138 Carloads (thousands) 1,335 1,294 1,440 1,526 5,595 1,431 1,469 1,427 1,374 5,701 Route miles (includes Canada and the U.S.) 19,500 19,500 19,500 19,500 19,500 19,500 19,500 19,500 19,500 19,500 Employees (end of period) 23,975 22,112 24,008 24,381 24,381 24,577 24,376 23,765 22,604 22,604 Employees (average for the period) 25,264 22,431 23,177 24,272 23,786 24,508 24,410 24,312 23,107 24,084 QUARTERLY FINANCIAL AND STATISTICAL DATA Financials 30 CN | 2022 INVESTOR FACT BOOK UPDATE |
| (1) Based on Federal Railroad Administration (FRA) reporting criteria. 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 these indicators are provided on our website, www.cn.ca/glossary. Unaudited 2020 2021 Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year KEY OPERATING MEASURES Freight revenue per RTM (cents) 5.87 5.78 5.77 5.55 5.74 5.57 5.83 6.13 6.34 5.96 Freight revenue per carload ($) 2,565 2,348 2,256 2,298 2,362 2,392 2,350 2,402 2,610 2,436 GTMs per average number of employees (thousands) 4,512 4,564 4,905 5,163 19,144 4,928 4,782 4,553 4,769 19,033 Operating expenses per GTM (cents) 2.04 2.37 1.80 1.79 1.99 1.83 1.90 2.03 1.98 1.93 Labor and fringe benefits expense per GTM (cents) 0.65 0.55 0.58 0.60 0.60 0.65 0.59 0.66 0.61 0.63 Diesel fuel consumed (US gallons in millions) 108.9 90.2 97.2 110.9 407.2 110.4 101.4 93.7 97.3 402.8 Average fuel price ($/US gallon) 2.90 2.08 2.27 2.37 2.42 2.90 3.24 3.33 3.70 3.28 Fuel efficiency (US gallons of locomotive fuel consumed per 1,000 GTMs) 0.955 0.881 0.855 0.885 0.894 0.914 0.869 0.847 0.883 0.879 SAFETY INDICATORS(1) Injury frequency rate (per 200,000 person hours) 2.27 1.39 1.54 1.31 1.64 1.60 0.97 1.42 1.29 1.33 Accident rate (per million train miles) 1.98 2.13 1.70 1.69 1.87 1.33 1.99 2.05 2.06 1.82 31 CN | 2022 INVESTOR FACT BOOK UPDATE |
| CN reports its financial results in accordance with United States generally accepted accounting principles (GAAP). CN may use non-GAAP measures that do not have any standardized meaning prescribed by GAAP, including adjusted performance measures, free cash flow, constant currency, adjusted debt-to-adjusted EBITDA multiple and return on invested capital (ROIC) and adjusted ROIC. These non-GAAP measures may not be comparable to similar measures presented by other companies. From managements perspective, these non-GAAP measures are useful measures of performance and provide investors with supplementary information to assess the Companys results of operations and liquidity. These non-GAAP measures should not be considered in isolation or as a substitute for financial measures prepared in accordance with GAAP. Adjusted performance measures Adjusted net income, adjusted earnings per share, adjusted operating income, adjusted operating expenses and adjusted operating ratio are non-GAAP measures that are used to set performance goals and to measure CNs performance. Management believes that these adjusted performance measures provide additional insight to management and investors into the Companys operations and underlying business trends as well as facilitate period-to-period comparisons, as they exclude certain significant items that are not reflective of CNs underlying business operations and could distort the analysis of trends in business performance. NON-GAAP MEASURES These items may include: i. operating expense adjustments: workforce reduction program, depreciation expense on the deployment of replacement system, advisory fees related to shareholder matters, losses and recoveries from assets held for sale, business acquisition-related costs; ii. non-operating expense adjustments: business acquisition- related financing fees, merger termination income, gains and losses on disposal of property; and iii. the effect of tax law changes and rate enactments. These non-GAAP measures do not have any standardized meaning prescribed by GAAP and, therefore, may not be comparable to similar measures presented by other companies. Adjusted net income is defined as Net income in accordance with GAAP adjusted for certain significant items. Adjusted diluted earnings per share is defined as adjusted net income divided by the weighted-average diluted shares outstanding. Financials 32 CN | 2022 INVESTOR FACT BOOK UPDATE |
| Unaudited ($ millions, except per share data) Year ended December 31 2017 2018 2019 2020 2021 Net income (1) 5,470 4,312 4,198 3,545 4,899 Adjustments: Operating expense adjustments: Workforce reduction program 27 31 39 Depreciation expense on the deployment of replacement system 84 Advisory fees related to shareholder matters 20 Loss (recovery) on assets held for sale 486 (137) Transaction-related costs 84 Non-operating expense adjustments: Amortization of bridge financing and other fees 97 Merger termination fee (886) Gains on disposal of property (338) Tax adjustments: Tax effect of adjustments (2) 39 (30) (123) 109 Tax law changes and rate enactments (1,706) (112) (141) Total adjustments (1,706) (272) (27) 222 (674) Adjusted net income (1) 3,764 4,040 4,171 3,767 4,225 Diluted earnings per share (1) 7.22 5.85 5.81 4.97 6.90 Impact of adjustments, per share (2.25) (0.37) (0.03) 0.31 (0.95) Adjusted diluted earnings per share (1) 4.97 5.48 5.78 5.28 5.95 The following table provides a reconciliation of Net income and Earnings per share in accordance with GAAP, as reported for the periods specified, to the non-GAAP adjusted performance measures presented herein: (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. See the Companys selected financial information restated for change in accounting policy filed on September 9, 2022, which may be found online on SEDAR at www.sedar.com, on the SECs website at www.sec.gov through EDGAR, and on the Companys website at www.cn.ca in the Investors section, for additional information. (2) The tax impact of adjustments is based on the nature of the item for tax purposes and related tax rates in the applicable jurisdiction. 33 CN | 2022 INVESTOR FACT BOOK UPDATE |
| Unaudited ($ millions, except percentages) Year ended December 31 2017 2018 2019 2020 2021 Operating income 5,243 5,493 5,593 4,777 5,616 Operating expense adjustments: Workforce reduction program 27 31 39 Depreciation expense on the deployment of replacement system 84 Advisory fees related to shareholder matters 20 Loss (recovery) on assets held for sale 486 (137) Transaction-related costs 84 Total operating expense adjustments 27 115 486 6 Adjusted operating income 5,243 5,520 5,708 5,263 5,622 Operating expenses 7,798 8,828 9,324 9,042 8,861 Total operating expense adjustments (27) (115) (486) (6) Adjusted operating expenses 7,798 8,801 9,209 8,556 8,855 Operating ratio (1) 59.8% 61.6% 62.5% 65.4% 61.2% Impact of adjustments % (0.1)% (0.8)% (3.5)% % Adjusted operating ratio 59.8% 61.5% 61.7% 61.9% 61.2% Adjusted performance measures (cont.) Adjusted operating income is defined as Operating income in accordance with GAAP adjusted for certain significant operating expense items. Adjusted operating expenses is defined as Operating expenses in accordance with GAAP adjusted for certain significant operating expense items. Adjusted operating ratio is defined as adjusted operating expenses as a percentage of revenues. For the year ended December 31, 2017, the Company reported adjusted net income of $3,764million (2), or $4.97 per diluted share (2), which excludes a net deferred income tax recovery of $1,706million ($2.25 per diluted share) consisting of the following: in the fourth quarter, a deferred income tax recovery of $1,764million ($2.33 per diluted share) resulting from the enactment of a lower U.S. federal corporate income tax rate due to the Tax Cuts and Jobs Act (U.S. Tax Reform) and a deferred income tax expense of $50million ($0.07 per diluted share) resulting from the enactment of higher provincial corporate income tax rates; The following table provides a reconciliation of Operating income, Operating expenses and operating ratio, as reported for the periods specified, to the non-GAAP adjusted performance measures presented herein: (1) Operating ratio is defined as operating expenses as a percentage of revenues. (2) 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. See the Companys selected financial information restated for change in accounting policy filed on September 9, 2022, which may be found online on SEDAR at www.sedar.com, on the SECs website at www.sec.gov through EDGAR, and on the Companys website at www.cn.ca in the Investors section, for additional information. in the third quarter, a deferred income tax expense of $31million ($0.04 per diluted share) resulting from the enactment of a higher state corporate income tax rate; in the second quarter, a deferred income tax recovery of $18million ($0.02 per diluted share) resulting from the enactment of a lower provincial corporate income tax rate; and in the first quarter, a deferred income tax recovery of $5million ($0.01 per diluted share) resulting from the enactment of a lower provincial corporate income tax rate. NON-GAAP MEASURES (CONT.) Financials 34 CN | 2022 INVESTOR FACT BOOK UPDATE |
| For the year ended December 31,2018, the Company reported adjusted net income of $4,040million (2), or $5.48 per diluted share (2), which excludes employee termination benefits and severance costs related to a workforce reduction program of $27 million, or $20million after-tax ($0.03 per diluted share) in the fourth quarter and gains on disposal of property of $338million, or $292million after-tax ($0.40 per diluted share), consisting of the following: in the fourth quarter, a gain previously deferred on the 2014 disposal of a segment of the Guelph subdivision located between Georgetown and Kitchener, Ontario, together with the rail fixtures and certain passenger agreements (the Guelph), of $79 million, or $70 million after-tax ($0.10 per diluted share); in the third quarter, a gain on disposal of property located in Montreal, Quebec (the Doney and St-Francois Spurs) of $36million, or $32 million after-tax ($0.04 per diluted share); and in the second quarter, a gain on transfer of the Companys finance lease in the passenger rail facilities in Montreal, Quebec, together with its interests in related railway operating agreements (the Central Station Railway Lease), of $184million, or $156million after-tax ($0.21 per diluted share), and a gain on disposal of land located in Calgary, Alberta, excluding the rail fixtures (the Calgary Industrial Lead), of $39million, or $34million after-tax ($0.05 per diluted share). For the year ended December 31, 2019, the Company reported adjusted net income of $4,171million (2), or $5.78per diluted share (2), which excludes employee termination benefits and severance costs related to a workforce reduction program of $31million, or $23million after-tax ($0.03 per diluted share) in the fourth quarter; a deferred income tax recovery of $112million ($0.15 per diluted share) in the second quarter, resulting from the enactment of a lower provincial corporate income tax rate; and a depreciation expense of $84million, or $62million after-tax ($0.09 per diluted share) in the first quarter, related to costs previously capitalized for a Positive Train Control (PTC) back office system following the deployment of a replacement system. For the year ended December 31, 2020, the Company reported adjusted net income of $3,767million (2), or $5.28 per diluted share (2), which excludes a loss of $486 million, or $363million after-tax ($0.51 per diluted share) in the second quarter, resulting from the Companys decision to market for sale for on-going rail operations, certain non-core lines in Wisconsin, Michigan and Ontario, and a current income tax recovery of $141million ($0.20 per diluted share) in the first quarter resulting from the enactment of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a U.S. tax-and-spending package aimed at providing additional stimulus to address the economic impact of the COVID-19 pandemic. For the year ended December 31,2021, the Company reported adjusted net income of $4,225million (2), or $5.95 per diluted share (2), which excludes: employee termination benefits and severance costs related to a workforce reduction program of $39million, or $29million after-tax ($0.04 per diluted share) recorded in the third quarter in Labor and fringe benefits within the Consolidated Statements of Income; advisory fees related to shareholder matters of $20million, or $15million after-tax ($0.02 per diluted share) of which $13million, or $10 million after-tax ($0.02 per diluted share) was recorded in the fourth quarter and $7million, or $5million after-tax ($0.01 per diluted share) was recorded in the third quarter in Casualty and other within the Consolidated Statements of Income; the recovery of $137 million, or $102 million after-tax ($0.14 per diluted share) recorded in the first quarter related to the loss on assets held for sale in the second quarter of 2020, to reflect an agreement for the sale for on-going rail operations, certain non-core rail lines in Wisconsin, Michigan and Ontario to a short line operator; transaction-related costs, consisting of an advance to Kansas City Southern (KCS) and a related refund, net of transaction costs, of $84 million, or $70 million after-tax ($0.10 per diluted share), recorded in the third quarter resulting from the terminated CN Merger Agreement with KCS; amortization of bridge financing and other fees of $65million, or $60million after-tax ($0.08 per diluted share) recorded in the third quarter and $32million, or $24million after-tax ($0.03 per diluted share) recorded in the second quarter, resulting from the KCS transaction, recorded in Interest expense within the Consolidated Statements of Income; and merger termination fee paid by KCS to CN of $886million, or $770million after-tax ($1.08 per diluted share), recorded in the third quarter resulting from KCS notice of termination of the CN Merger Agreement with KCS. (2) In the first quarter of 2022, the Company changed its method of calculating market-related values of pension assets for its defined benefit plans using a retrospective approach. See the Companys selected financial information restated for change in accounting policy filed on September 9, 2022, which may be found online on SEDAR at www.sedar.com, on the SECs website at www.sec.gov through EDGAR, and on the Companys website at www.cn.ca in the Investors section, for additional information. 35 CN | 2022 INVESTOR FACT BOOK UPDATE |
| (1) Relates to the terminated CN KCS merger agreement. See Note 3 Acquisitions, Terminated CN KCS merger agreement, to the Companys 2021 Annual Consolidated Financial Statements and the section entitled Adjusted performance measures to the Companys 2021 Annual MD&A filed on February 1, 2022, which may be found online on SEDAR at www.sedar.com, on the SECs website at www.sec.gov through EDGAR, and on the Companys website at www.cn.ca in the Investors section, for additional information. (2) Relates to the acquisitions of H&R Transport Limited (H&R) and the TransX Group of Companies (TransX). See the section entitled Liquidity and capital resources Investing activities to the Companys 2021 Annual MD&A filed on February 1, 2022, which may be found online on SEDAR at www.sedar.com, on the SECs website at www.sec.gov through EDGAR, and on the Companys website at www.cn.ca in the Investors section, for additional information. Unaudited ($ millions) Year ended December 31 2017 2018 2019 2020 2021 Net cash provided by operating activities 5,516 5,918 5,923 6,165 6,971 Net cash used in investing activities (2,738) (3,404) (4,190) (2,946) (2,873) Net cash provided before financing activities 2,778 2,514 1,733 3,219 4,098 Adjustments: Transaction-related costs (1) 125 Advance for acquisition (1) 845 Refund of advance for acquisition (1) (886) Merger termination fee (1) (886) Acquisition, net of cash acquired (2) 259 8 Total adjustments 259 8 (802) Free cash flow 2,778 2,514 1,992 3,227 3,296 Free cash flow Free cash flow is a useful measure of liquidity as it demonstrates the Companys ability to generate cash for debt obligations and for discretionary uses such as payment of dividends, share repurchases and strategic opportunities. The Company defines its free cash flow measure as the difference between net cash provided by operating activities and net cash used in investing activities, adjusted for the impact of (i) business acquisitions and (ii) merger transaction-related payments, cash receipts and cash income taxes, which are items that are not indicative of Constant currency Financial results at constant currency allow results to be viewed without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons in the analysis of trends in business performance. Measures at constant currency are considered non-GAAP measures and do not have any standardized meaning prescribed by GAAP and, therefore, may not be comparable to similar measures presented by other companies. Financial results at constant currency are obtained by translating the current period results operating trends. Free cash flow does not have any standardized meaning prescribed by GAAP and, therefore, may not be comparable to similar measures presented by other companies. The following table provides a reconciliation of Net cash provided by operating activities in accordance with GAAP, as reported for the periods specified, to the non-GAAP free cash flow presented herein: denominated in US dollars at the weighted average foreign exchange rates used to translate transactions denominated in US dollars of the comparable period of the prior year. The average foreign exchange rates were $1.25 and $1.34 per US$1.00, for the years ended December 31, 2021 and 2020, respectively. On a constant currency basis, the Companys Net Income for the year ended December 31, 2021 would have been higher by $166million ($0.23 per diluted share). NON-GAAP MEASURES (CONT.) Financials 36 CN | 2022 INVESTOR FACT BOOK UPDATE |
| Unaudited ($ millions, except per share data) Year ended December 31 2021 Constant currency impact 2020 % Change at constant currency Fav (Unfav) Revenues Petroleum and chemicals 2,816 128 2,631 12% Metals and minerals 1,548 83 1,409 16% Forest products 1,740 93 1,700 8% Coal 618 17 527 20% Grain and fertilizers 2,475 80 2,609 (2%) Intermodal 4,115 95 3,751 12% Automotive 576 32 591 3% Total freight revenues 13,888 528 13,218 9% Other revenues 589 29 601 3% Total revenues 14,477 557 13,819 9% Operating expenses Labor and fringe benefits 2,879 65 2,723 (8%) Purchased services and material 2,082 60 2,152 % Fuel 1,513 94 1,152 (39%) Depreciation and amortization 1,598 44 1,589 (3%) Equipment rents 336 19 432 18% Casualty and other 506 27 508 (5%) Loss (recovery) on assets held for sale (137) (12) 486 131% Transaction-related costs 84 47 N/A Total operating expenses 8,861 344 9,042 (2%) Operating income 5,616 213 4,777 22% Interest expense (610) (35) (554) (16%) Other components of net periodic benefit income (1) 407 292 39% Merger termination fee 886 39 N/A Other income 43 4 6 683% Income before income taxes (1) 6,342 221 4,521 45% Income tax expense (1) (1,443) (55) (976) (53%) Net income (1) 4,899 166 3,545 43% Diluted earnings per share (1) 6.90 0.23 4.97 43% (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. See the Companys selected financial information restated for change in accounting policy filed on September 9, 2022, which may be found online on SEDAR at www.sedar.com, on the SECs website at www.sec.gov through EDGAR, and on the Companys website at www.cn.ca in the Investors section, for additional information. The following table provides a reconciliation of the impact of constant currency and related percentage change at constant currency on the financial results, as reported for the year ended December 31, 2021: 37 CN | 2022 INVESTOR FACT BOOK UPDATE |
| Adjusted debt-to-adjusted EBITDA multiple Management believes that the adjusted debt-to-adjusted EBITDA multiple is a useful credit measure because it reflects the Companys ability to service its debt and other long-term obligations. The Company calculates the adjusted debt-to- adjusted EBITDA multiple as adjusted debt divided by the last twelve months of adjusted EBITDA. Adjusted debt is defined as the sum of Long-term debt and Current portion of long-term debt as reported on the Companys Consolidated Balance Sheets as well as Operating lease liabilities, including current portion and pension plans in deficiency recognized on the Companys Consolidated Balance Sheets due to the debt-like nature of their contractual and financial obligations. Adjusted EBITDA is calculated as Net income excluding Interest expense, Income tax expense, Depreciation and amortization, operating lease cost, Other components of net periodic benefit income, Other income (loss), and other significant items that are not reflective of CNs underlying business operations and which could distort the analysis of trends in business performance. Adjusted debt and adjusted EBITDA are non-GAAP measures used to compute the Adjusted debt-to-adjusted EBITDA multiple. These measures do not have any standardized meaning prescribed by GAAP and, therefore, may not be comparable to similar measures presented by other companies. The following table provides a reconciliation of debt and Net income in accordance with GAAP, as reported for the periods specified, to the adjusted measures presented herein, which have been used to calculate the non-GAAP adjusted debt-to- adjusted EBITDA multiple: (1) Represents the present value of operating lease payments. (2) Represents the total funded deficit of all defined benefit pension plans with a projected benefit obligation in excess of plan assets. (3) 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. See the Companys selected financial information restated for change in accounting policy filed on September 9, 2022, which may be found online on SEDAR at www.sedar.com, on the SECs website at www.sec.gov through EDGAR, and on the Companys website at www.cn.ca in the Investors section, or additional information. (4) Represents the operating lease costs recorded in Purchased services and material and Equipment rents within the Consolidated Statements of Income. (5) Relates to employee termination benefits and severance costs for a workforce reduction program, recorded in Labor and fringe benefits within the Consolidated Statements of Income. (6) Relates to advisory fees related to shareholder matters recorded in Casualty and other within the Consolidated Statements of Income. (7) Relates to the loss (recovery) on assets held for sale resulting from the Company entering into an agreement for the sale of non-core lines. (8) Relates to the terminated CN KCS merger agreement. (9) Adjusted EBITDA for 2019 and 2018 has been restated to include the workforce reduction program adjustment in order to conform with the current definition and be comparable with adjustments made in 2021. Unaudited ($ millions, unless otherwise indicated) As at and for the year ended December 31 2017 2018 2019 2020 2021 Debt 10,828 12,569 13,796 12,906 12,485 Adjustments: Operating lease liabilities, including current portion (1) 478 579 501 418 430 Pension plans in deficiency (2) 455 477 521 553 447 Adjusted debt 11,761 13,625 14,818 13,877 13,362 Net income (3) 5,470 4,312 4,198 3,545 4,899 Interest expense 481 489 538 554 610 Income tax expense (recovery) (3) (400) 1,348 1,207 976 1,443 Depreciation and amortization 1,281 1,329 1,562 1,589 1,598 Operating lease cost (4) 191 218 171 143 131 Other components of net periodic benefit income (3) (296) (280) (297) (292) (407) Other income (12) (376) (53) (6) (43) Adjustments: Workforce reduction program (5) 27 31 39 Advisory fees related to shareholder matters (6) 20 Loss (recovery) on assets held for sale (7) 486 (137) Transaction-related costs (8) 84 Merger termination fee (8) (886) Adjusted EBITDA (9) 6,715 7,067 7,357 6,995 7,351 Adjusted debt-to-adjusted EBITDA multiple (times) 1.75 1.93 2.01 1.98 1.82 NON-GAAP MEASURES (CONT.) Financials 38 CN | 2022 INVESTOR FACT BOOK UPDATE |
| (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. See the Companys selected financial information restated for change in accounting policy filed on September 9, 2022, which may be found online on SEDAR at www.sedar.com, on the SECs website at www.sec.gov through EDGAR, and on the Companys website at www.cn.ca in the Investors section, or additional information. (2) The effective tax rate, defined as Income tax expense as a percentage of Income before income taxes, used to calculate the tax on Interest expense for 2021 was 22.8% (2020 - 21.6%, 2019 - 22.3%, 2018 - 23.8%, 2017 - 25.8%). Due to the negative effective tax rate reported by the Company in 2017, tax on interest expense for 2017 was calculated using an adjusted effective tax rate. (3) 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 the section entitled Adjusted performance measures for an explanation of this non-GAAP measure. (4) Relates to amortization of bridge financing and other fees resulting from the KCS transaction, recorded in Interest expense within the Consolidated Statements of Income. (5) The adjusted effective tax rate is a non-GAAP measure, defined as Income tax expense, net of tax adjustments as presented in Adjusted performance measures as a percentage of Income before taxes, net of pre-tax adjustments as presented in Adjusted performance measures. This measure does not have any standardized meaning prescribed by GAAP and, therefore, may not be comparable to a similar measure presented by other companies. The adjusted effective tax rate used to calculate the adjusted tax on interest expense less amortization of bridge financing and other fees for 2021 was 24.0% (2020 - 24.8%, 2019 - 24.4%, 2018 - 24.5%, 2017 - 25.8%). Unaudited ($ millions, except percentage) As at and for the year ended December 31 2017 2018 2019 2020 2021 Net income (1) 5,470 4,312 4,198 3,545 4,899 Interest expense 481 489 538 554 610 Tax on interest expense (2) (124) (116) (120) (120) (139) Return (1) 5,827 4,685 4,616 3,979 5,370 Average total shareholders' equity 15,749 17,149 17,841 18,846 21,198 Average long-term debt 9,098 10,067 11,626 11,931 11,987 Average current portion of long-term debt 1,785 1,632 1,557 1,420 709 Less: Average cash, cash equivalents, restricted cash and restricted cash equivalents (613) (656) (674) (844) (1,221) Average invested capital 26,019 28,192 30,350 31,353 32,673 ROIC (1) 22.4% 16.6% 15.2% 12.7% 16.4% Adjusted net income (1) (3) 3,764 4,040 4,171 3,767 4,225 Interest expense 481 489 538 554 610 Less: Amortization of bridge financing and other fees (4) (97) Tax on interest expense less amortization of bridge financing and other fees (5) (124) (120) (131) (137) (123) Adjusted return (1) 4,121 4,409 4,578 4,184 4,615 Average invested capital 26,019 28,192 30,350 31,353 32,673 Adjusted ROIC (1) 15.8% 15.6% 15.1% 13.3% 14.1% ROIC and adjusted ROIC ROIC and adjusted ROIC are useful measures for management and investors to evaluate the efficiency of the Companys use of capital funds and allow investors to assess the operating and investment decisions made by management. The Company calculates ROIC as return divided by average invested capital, both of which are non-GAAP measures. Return is defined as Net income plus interest expense after-tax, calculated using the Companys effective tax rate. Average invested capital is defined as the sum of Total shareholders equity, Long-term debt and Current portion of long-term debt less Cash and cash equivalents, and Restricted cash and cash equivalents, averaged between the beginning and ending balance over the last twelve-month period. The Company calculates adjusted ROIC as adjusted return divided by average invested capital, both of which are non-GAAP measures. Adjusted return is defined as adjusted net income plus interest expense after-tax, calculated using the Companys adjusted effective tax rate. Return, average invested capital, ROIC, adjusted return and adjusted ROIC do not have any standardized meaning prescribed by GAAP and, therefore, may not be comparable to similar measures presented by other companies. The following table provides a reconciliation of Net income and adjusted net income to return and adjusted return, respectively, as well as the calculation of average invested capital, which have been used to calculate ROIC and adjusted ROIC: 39 CN | 2022 INVESTOR FACT BOOK UPDATE |
| DESIGN: CAPSULE CREATIVE WWW.CAPSULECREATIVE.CA Transfer agent and registrar Computershare Trust Company of Canada Offices in: Montreal, QC; Toronto, ON; Calgary, AB; Vancouver, BC Telephone: 1-800-564-6253 www.investorcentre.com/service Co-transfer agent and co-registrar Computershare Trust Company, N.A. Attn: Stock Transfer Department Overnight mail delivery: 250 Royall Street Canton, MA 02021 Regular mail delivery: P.O. Box 43078 Providence, RI 02940-3078 Telephone: 303-262-0600 or 1-800-962-4284 Shareholder services Shareholders with questions concerning their shares should contact: Computershare Trust Company of Canada Shareholder Services 100 University Avenue, 8 th Floor Toronto, ON M5J 2Y1 Telephone: 1-800-564-6253 www.computershare.com Investor relations Paul Butcher Vice-President, Investor Relations Telephone: 514-399-0052 Greg Hamilton Senior Manager, Investor Relations Telephone: 514-399-4654 Mariusz Chojnacki Senior Manager, Investor Relations Telephone: 514-399-6464 Fax: 514-399-5985 Email: investor.relations@cn.ca Mailing address CN Investor Relations 935 de La Gauchetire St. W. 16 th Floor Montreal, QC H3B 2M9 www.cn.ca/investors SHAREHOLDER AND INVESTOR INFORMATION 40 CN | 2022 INVESTOR FACT BOOK UPDATE |
| www.cn.ca/investors CN Investor Relations understands the importance of communicating the CN story and the most current and timely information to our shareholders, the financial community and other stakeholders. The Investors section of our website holds a wealth of information to keep investors and potential investors informed and up-to-date. Key weekly metrics CN reports our performance measures weekly. These measures represent some of the key indicators of railroad performance. We report key weekly volume data for RTMs and carloads, and key weekly operating metrics such as car velocity, average train speed and through dwell. www.cn.ca/investors/key-weekly-metrics Latest financial results and reports We understand the importance of accessing the latest and historical financial and other company reports, including the Investor Fact Book, Annual Report and Sustainability Report. Each quarter, we update our Investor Presentation to showcase our commitment to share our great CN story. www.cn.ca/investors/reports-and-archives Current stock information We have a host of tools that provide helpful data about CNs common shares on the Toronto Stock Exchange (TSX: CNR) and the New York Stock Exchange (NYSE: CNI). These tools include: stock information, interactive charts, stock price history and splits, an investment calculator and dividends. www.cn.ca/investors/stock-information Upcoming webcasts and events Our executive team regularly interacts with the investment community through our quarterly investor call and industry conferences. We provide a comprehensive schedule of upcoming investor events on our website, including webcast information. Dont miss out on the latest news and events from CN. www.cn.ca/investors/events KEEPING INVESTORS UP-TO-DATE 41 CN | 2022 INVESTOR FACT BOOK UPDATE 41 CN | 2022 INVESTOR FACT BOOK UPDATE |
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| Filed on: | 9/9/22 | 6-K | ||
| For Period end: | 9/8/22 | 6-K | ||
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| 12/31/19 | 40-F, 6-K | |||
| 12/31/18 | 40-F, 6-K | |||
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