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CN releases Q4 and full year 2020 results

(Source: CN press release, January 26, 2021)

MONTREAL — CN is proud to announce that its diluted earnings per share (EPS) grew 17 per cent, and 14 per cent on an adjusted basis in the fourth quarter, while free cash flow for the full-year 2020 reached a record of over C$3.2 billion. (1)

“2020 was a year like no other and thanks to our colleagues, who are essential workers, we got through it together and kept the economy moving while setting impressive new volume records in key markets. Our operations remained very nimble in the fourth quarter as we right-sized to meet the increased demand while we maintained industry leading fuel efficiency. We continue to actively implement our long-term strategy, focusing on sustainable growth and deploying advanced technology to generate value for all of our stakeholders.” — JJ Ruest, President and Chief Executive Officer, CN.

Financial results highlights

Fourth-quarter 2020 compared to fourth-quarter 2019

• Revenues of C$3,656 million, an increase of C$72 million or two per cent.
• Diluted EPS of C$1.43, an increase of 17 per cent, or 14 per cent on an adjusted basis. (1)
• Operating ratio of 61.4 per cent, a decrease of 4.6 points, or 3.8 points on an adjusted basis. (1)
• Operating income of C$1,411 million, an increase of 16 per cent, or 13 per cent on an adjusted basis. (1)

Full-year 2020 compared to full-year 2019

• Revenues of C$13,819 million, a decrease of C$1,098 million or seven per cent.
• Diluted EPS of C$5.00, a decrease of 14 per cent, and adjusted diluted EPS of C$5.31, a decrease of eight per cent. (1)
• Operating ratio of 65.4 per cent, an increase of 2.9 points, and adjusted operating ratio of 61.9 per cent, an increase of 0.2 points. (1)
• Operating income of C$4,777 million, a decrease of 15 per cent, and adjusted operating income of C$5,263 million, a decrease of eight per cent. (1)
• Free cash flow was C$3,227 million, an increase of C$1,235 million. (1)
• Adjusted return on invested capital (adjusted ROIC) of 13.4 per cent, a decrease of 1.7 points. (1)

2021 outlook and shareholder distributions (2)

“While the recovery remains uneven across the markets we serve, we are pleased by the momentum in volume demand that grew during the fourth quarter and continues to grow. We are increasingly optimistic about 2021 and we are reinstating our full-year financial outlook. We are also pleased to be announcing our plans for C$3.0 billion of capital investments to stay ahead of the demand and keep meeting our customers' needs through safe and efficient operations,” added Ruest.

CN is targeting to deliver EPS growth in the high single-digit range this year compared to adjusted diluted EPS of C$5.31 in 2020. (1)

CN is also targeting free cash flow in the range of C$3.0 billion to C$3.3 billion in 2021 compared to C$3.2 billion in 2020. (1)

The Company assumes mid-single digit volume growth in 2021 in terms of revenue ton miles (RTMs) as it sees growth opportunities, despite continued weakness in sectors of the broad freight environment.

Wednesday, January 27, 2021

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