CN Outlines Three-year Financial Perspective
03 May 2023 - 10:45PM
Today, CN’s (TSX: CNR) (NYSE: CNI) executive team will meet with
the investment community in Chicago to present the Company’s
strategic agenda focused on accelerating sustainable, profitable
growth.
“We are confident in what the future holds for
CN. The path to sustainable and profitable growth is clear. We have
the proven record of our operating model combined with our
integrated approach and the right people to see it through. The
future of railroading is here, and it starts now.”
— Tracy
Robinson, President and Chief Executive Officer, CN
Key CN executives will present at the event.
Their presentations will focus on safety, how they will maintain
discipline in executing CN’s scheduled operating plan, how they
plan to capture emerging opportunities by selling into the plan, as
well as how they intend to use technology to drive incremental
efficiencies and make it easier for customers to do business with
CN.
2023 financial outlook (1)CN still aims to
deliver adjusted diluted earnings per share (EPS) growth in the mid
single digits over 2022 (2).
2024-2026 financial perspective (1) CN is
targeting to deliver 10%-15% diluted EPS growth over the next 3
years by growing volumes more than the economy, pricing above rail
inflation and incrementally improving efficiency.
(1) Forward-looking statementsCertain statements
included in this news release constitute “forward-looking
statements” within the meaning of the United States Private
Securities Litigation Reform Act of 1995 and under Canadian
securities laws, relating, but not limited to, statements with
respect to CN’s 2023 financial outlook and three-year financial
perspective and the related key assumptions. This forward-looking
information also includes but is not limited to statements based on
management’s 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.
2023 key assumptionsCN has made a number of
economic and market assumptions in preparing its 2023 outlook. The
Company continues to assume negative North American industrial
production in 2023. For the 2022/2023 crop year, the grain crop in
Canada was above its three-year average (or in line when excluding
the significantly lower 2021/2022 crop year) and the U.S. grain
crop was in line with its three-year average. The Company continues
to assume that the 2023/2024 grain crops in Canada and the U.S.
will be in line with their respective three-year averages
(excluding the significantly lower 2021/2022 crop year in Canada).
CN assumes continued pricing above rail inflation upon contract
renewals. CN assumes that in 2023, the value of the Canadian dollar
in U.S. currency will be approximately $0.75, and now assumes the
average price of crude oil (West Texas Intermediate) will be
approximately US$80 per barrel (compared to its January 24, 2023
assumption of being in the approximately US$75 - US$80 range per
barrel).
2024-2026 key assumptionsCN has made a number of
economic and market assumptions in preparing its three-year
financial perspective. CN assumes that the North American
industrial production will increase by approximately two percent
annually over the next three years. CN assumes continued pricing
above rail inflation. CN assumes that the value of the Canadian
dollar in U.S. currency will be approximately $0.75 and that the
average price of crude oil (West Texas Intermediate) will be
approximately US$80 per barrel during this period.
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 in this news release 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; the business opportunities
underlying the three-year financial perspective may not fully
materialize; 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; the
availability of and cost competitiveness of renewable fuels and the
development of new locomotive propulsion technology; and other
risks detailed from time to time in reports filed by CN with
securities regulators in Canada and the United States. Reference
should also be made to Management’s Discussion and Analysis in CN’s
annual and interim reports, Annual Information Form and Form 40-F,
filed with Canadian and U.S. securities regulators and available on
CN's website, for a description of major risk factors relating to
CN.
Forward-looking statements reflect information
as of 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.
Information contained on, or accessible through, our website is not
part of this news release.
(2) Caution Regarding Non-GAAP Measures CN
reports its financial results in accordance with United States
generally accepted accounting principles (GAAP). CN also uses the
non-GAAP measure adjusted diluted earnings per share in this news
release that does not have any standardized meaning prescribed by
GAAP. This non-GAAP measures may not be comparable to similar
measures presented by other companies. For further details of this
non-GAAP measure, including a reconciliation to the most directly
comparable GAAP financial measure, refer to the supplementary
schedule entitled Non-GAAP Measures for the year 2022, available at
www.cn.ca/en/financial-results.
CN’s 2023 full-year adjusted diluted EPS (1)
outlook and the 2024-2026 financial perspective exclude certain
adjustments, which are expected to be comparable to adjustments
made in prior years. However, management cannot individually
quantify on a forward-looking basis the impact of these adjustments
on its adjusted diluted EPS because these items, which could be
significant, are difficult to predict and may be highly variable.
As a result, CN does not provide a corresponding GAAP measure for,
or reconciliation to, its adjusted diluted EPS outlook.
About CNCN 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 more than 300 million tons of natural resources,
manufactured products, and finished goods throughout North America
every year. CN’s railroad connects Canada’s Eastern and Western
coasts with the U.S. South through a 18,600-mile rail network, CN
and its affiliates have been contributing to community prosperity
and sustainable trade since 1919. CN is committed to programs
supporting social responsibility and environmental stewardship.
Contacts:
Media |
Investment
Community |
Jonathan Abecassis |
Stacy Alderson |
Senior Manager |
Interim Assistant
Vice-President |
Media Relations |
Investor Relations |
438-455-3692media@cn.ca |
514-399-0052investor.relations@cn.ca |
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