CN Announces Solid Fourth Quarter and Year-End Results
- Fourth quarter diluted earnings per share (EPS) growth of 12%, or 14% on an adjustedbasis (1)
- Fourth quarter operating ratio of 61.2%, or 60.1% on an adjusted basis(1)
- 2025 diluted EPS growth of 8%, or 7% on an adjusted basis(1)
- 2025 operating ratio of 61.9%, or 61.7% on an adjusted basis(1)
- Approximately 15 million shares repurchased in 2025 for approximatelyC$2 billion
- Capital program spending set atC$2.8 billion* for 2026, a decrease of C$500 million from 2025(2)
MONTREAL, Jan. 30, 2026 (GLOBE NEWSWIRE) -- CN (TSX: CNR) (NYSE: CNI) today reported its financial and operating results for the fourth quarter and year ended December 31, 2025.
"Our team delivered a strong fourth quarter and closed 2025 with disciplined execution and a relentless focus on capturing opportunities for our customers. I thank our railroaders for their commitment to running the railroad safely and efficiently. In a challenging demand environment, their focus on service, cost control and productivity drove solid performance.
As we enter 2026, we expect continued macroeconomic uncertainty and elevated geopolitical risk. We are managing through this environment by focusing on what we can control: disciplined capital allocation, rigorous cost management and strengthening free cash flow. This approach positions CN to respond quickly as volumes shift and to deliver sustainable long-term value for shareholders. "
– Tracy Robinson, President and Chief Executive Officer, CN
Quarterly Financial Results Highlights
Fourth-quarter2025 compared tofourth-quarter2024
- Revenues of C$4,464 million, an increase of C$106 million, or 2%.
- Operating income of C$1,733 million, an increase of C$105 million, or 6%, and adjusted operating income of C$1,782 million, an increase of C$154 million, or 9%. (1)
- Operating ratio of 61.2%, an improvement of 1.4-points, and adjusted operating ratio of 60.1%, an improvement of 2.5 points. (1)
- Net income of C$1,248 million, an increase of C$102 million, or 9%, and adjusted net income of C$1,284 million, an increase of C$138 million, or 12%. (1)
- Diluted EPS of C$2.03, an increase of 12% and adjusted diluted EPS of C$2.08, an increase of 14%. (1)
- The Company repurchased close to 4.4 million shares in the fourth quarter for approximately C$600 million.
Quarterly Operating Performance Highlights **
Fourth-quarter2025 compared tofourth-quarter2024
- Gross ton miles (GTMs) increased 5% to 118,923 (millions).
- Revenue ton miles (RTMs) increased 4% to 61,707 (millions).
- Through dwell decreased 1% to 7.0 (entire railroad hours).
- Car velocity increased 2% to 215 (car miles per day).
- Through network train speed of 19.2 (mph) was in line with prior year.
- Fuel efficiency of 0.875 (US gallons of locomotive fuel consumed per 1,000 GTMs), was 1% more efficient.
- Train length increased 3% to 7,868 (feet).
- GTMs per average number of employees increased 8% to 4,957 (thousands).
- Operating expenses per GTM decreased 4% to 2.30 (cents).
2025 Financial Highlights
Full-year2025 compared to full-year2024
- Revenues of C$17,304 million, an increase of C$258 million, or 2%.
- Operating income of C$6,587 million, an increase of C$340 million, or 5%, and adjusted operating income of C$6,636 million, an increase of C$311 million, or 5%. (1)
- Operating ratio of 61.9%, an improvement of 1.5 points, and adjusted operating ratio of 61.7%, an improvement of 1.2 points. (1)
- Net income of C$4,720 million, an increase of C$272 million, or 6%, and adjusted net income of C$4,756 million, an increase of C$250 million, or 6%. (1)
- Diluted EPS of C$7.57, an increase of 8% and adjusted diluted EPS of C$7.63, an increase of 7%. (1)
- Free cash flow of C$3,336 million, an increase of C$244 million, or 8%. (1)
- Net cash provided by operating activities of C$7,049 million, an increase of C$350 million, or 5%, and net cash used in investing activities of C$3,713 million, an increase of C$106 million, or 3%.
- Adjusted EBITDA of C$8,734 million, an increase of 4%. (1)
- Adjusted debt-to-adjusted EBITDA of 2.51 times as at and for the year ended December 31, 2025. (1)
- Return on invested capital (ROIC) of 12.9% was in line with prior year, and adjusted ROIC of 13.0%, a decrease of 0.1-point. (1)
- The Company repurchased approximately 15 million shares in the year for approximately C$2 billion.
2025 Operating Performance Highlights **
Full-year2025 compared to full-year2024
- GTMs increased 1% to 463,002 (millions).
- RTMs increased 1% to 238,159 (millions).
- Through dwell increased 1% to 7.1 (entire railroad hours).
- Car velocity decreased 1% to 206 (car miles per day).
- Through network train speed decreased 1% to 18.8 (mph).
- Fuel efficiency of 0.873 (US gallons of locomotive fuel consumed per 1,000 GTMs), was in line with prior year.
- Train length increased 1% to 7,909 (feet).
- GTMs per average number of employees increased 4% to 18,893 (thousands).
- Operating expenses per GTM decreased 2% to 2.31 (cents).
* Net of customer reimbursements.
** Statistical operating data and key operating measures are unaudited and based on estimated data available at such time and are subject to change as more complete information becomes available.
2026 financial guidance (1)(2)
CN assumes that volume growth in terms of RTMs will be flattish. The Company expects that adjusted diluted EPS growth will slightly exceed volume growth.
In 2026, CN plans to invest approximately C$2.8 billion in its capital program, net of amounts reimbursed by customers. The Company also expects to continue improving its free cash flow conversion throughout 2026.
Shareholder returns
The Company’s Board of Directors approved a 3% increase to CN’s 2026 quarterly cash dividend, effective for the first quarter of 2026. This is the 30th consecutive year of dividend increases, demonstrating our confidence in the long-term financial health of the Company. In addition, the Company’s Board of Directors also approved a new Normal Course Issuer Bid (NCIB) that permits CN to purchase, for cancellation, over a 12-month period up to 24 million common shares, starting on February 4, 2026, and ending no later than February 3, 2027.
CONFERENCE CALL DETAILS
CN 's senior officers will review the results and the railway 's outlook in a conference call starting at 8:30 a.m. Eastern Time on January 30. Tracy Robinson, CN President and Chief Executive Officer, will lead the call. Parties wishing to participate via telephone may dial 1-800-715-9871 (Canada/U.S.), or 1-647-932-3411 (International), using 4883669 as the passcode. Participants are advised to dial in 10 minutes prior to the call.
(1) Non-GAAP Measures
CN reports its financial results in accordance with United States generally accepted accounting principles (GAAP). CN may also use non-GAAP measures in this news release that do not have any standardized meaning prescribed by GAAP. These non-GAAP measures may not be comparable to similar measures presented by other companies. For further details of these non-GAAP measures, including a reconciliation to the most directly comparable GAAP financial measures, refer to the attached supplementary schedule, Non-GAAP Measures.
CN 's outlook, guidance or targets (2) exclude certain adjustments, which are expected to be comparable to adjustments made in prior years. However, management cannot individually quantify on a forward-looking basis the impact of these adjustments, 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 outlook, guidance or targets.
(2) Forward-Looking Statements
Certain 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, including 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, " "goals, " or other similar words.
2026 key assumptions
CN has made a number of economic and market assumptions in preparing its 2026 outlook. The 2025/2026 grain crops in Canada and the U.S. were above their respective five-year averages. The Company assumes that the 2026/2027 grain crops in Canada and the U.S. will be in line with their respective five-year averages. CN assumes RTM growth will be flattish. CN also assumes that in 2026, the value of the Canadian dollar in U.S. currency will be $0.715, and assumes that in 2026 the average price of crude oil (West Texas Intermediate) will be in the range of US$60 - US$70 per barrel. The Company notes there is a heightened demand risk as a result of the volatile macroeconomic conditions and global trade tensions.
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 or tensions; trade restrictions, trade barriers, or the imposition of tariffs or other changes to international trade arrangements; 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 and other regulatory claims or proceedings; increases in maintenance and operating costs; security threats; reliance on technology and related cybersecurity risk; 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 and 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; reputational risks; supplier concentration; pension funding requirements and volatility; 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 (MD&A) 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.
The achievement of CN’s climate goals is subject to several risks and uncertainties, including those disclosed in the MD&A in CN 's annual and interim reports. There can be no certainty that the Company will achieve any or all of these goals within the stated timeframe, or that achieving any of these goals will meet all of the expectations of its stakeholders or applicable legal requirements.
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 incorporated by reference into this news release.
This earnings news release is available on the Company 's website at www.cn.ca/financial-results and on SEDAR+ at www.sedarplus.ca as well as on the U.S. Securities and Exchange Commission 's website at www.sec.gov through EDGAR.
About CN
CN powers the economy by safely transporting more than 300 million tons of natural resources, manufactured products, and finished goods throughout North America every year for its customers. With its nearly 20,000-mile rail network and related transportation services, CN connects Canada’s Eastern and Western coasts with the U.S. Midwest and the U.S. Gulf Coast, contributing to sustainable trade and the prosperity of the communities in which it operates since 1919.
| Contacts: | |
| Media | Investment Community |
| Ashley Michnowski | Stacy Alderson |
| Senior Manager | Assistant Vice-President |
| Media Relations | Investor Relations |
| (438) 596-4329 | (514) 399-0052 |
| media@cn.ca | investor.relations@cn.ca |
SELECTED RAILROAD STATISTICS – UNAUDITED
| Three months ended December 31 | Year ended December 31 | |||
| 2025 | 2024 | 2025 | 2024 | |
| Financial measures | ||||
| Key financial performance indicators(1) | ||||
| Total revenues ($ millions) | 4,464 | 4,358 | 17,304 | 17,046 |
| Freight revenues ($ millions) | 4,312 | 4,183 | 16,681 | 16,395 |
| Operating income ($ millions) | 1,733 | 1,628 | 6,587 | 6,247 |
| Adjusted operating income ($ millions) (2)(3) | 1,782 | 1,628 | 6,636 | 6,325 |
| Net income ($ millions) | 1,248 | 1,146 | 4,720 | 4,448 |
| Adjusted net income ($ millions)(2)(3) | 1,284 | 1,146 | 4,756 | 4,506 |
| Diluted earnings per share ($) | 2.03 | 1.82 | 7.57 | 7.01 |
| Adjusted diluted earnings per share ($)(2)(3) | 2.08 | 1.82 | 7.63 | 7.10 |
| Net cash provided by operating activities ($ millions) | 2,227 | 1,995 | 7,049 | 6,699 |
| Net cash used in investing activities ($ millions) | 1,232 | 963 | 3,713 | 3,607 |
| Free cash flow ($ millions)(2)(4) | 995 | 1,032 | 3,336 | 3,092 |
| Gross property additions ($ millions) | 1,229 | 944 | 3,658 | 3,549 |
| Share repurchases ($ millions) | 599 | 153 | 2,047 | 2,651 |
| Dividends per share ($) | 0.8875 | 0.8450 | 3.5500 | 3.3800 |
| Financial ratio | ||||
| Operating ratio (%)(5) | 61.2 | 62.6 | 61.9 | 63.4 |
| Adjusted operating ratio (%)(2)(3) | 60.1 | 62.6 | 61.7 | 62.9 |
| Operational measures(6) | ||||
| Statistical operating data | ||||
| Gross ton miles (GTMs) (millions) | 118,923 | 113,660 | 463,002 | 457,694 |
| Revenue ton miles (RTMs) (millions) | 61,707 | 59,305 | 238,159 | 235,538 |
| Carloads (thousands) | 1,363 | 1,324 | 5,458 | 5,390 |
| Route miles (includes Canada and the U.S., end of year) | 18,900 | 18,800 | 18,900 | 18,800 |
| Employees (end of period) | 23,839 | 24,671 | 23,839 | 24,671 |
| Employees (average for the period) | 23,989 | 24,862 | 24,507 | 25,304 |
| Key operating measures | ||||
| Freight revenue per RTM (cents) | 6.99 | 7.05 | 7.00 | 6.96 |
| Freight revenue per carload ($) | 3,164 | 3,159 | 3,056 | 3,042 |
| GTMs per average number of employees (thousands) | 4,957 | 4,572 | 18,893 | 18,088 |
| Operating expenses per GTM (cents) | 2.30 | 2.40 | 2.31 | 2.36 |
| Labor and fringe benefits expense per GTM (cents) | 0.77 | 0.78 | 0.76 | 0.75 |
| Diesel fuel consumed (US gallons in millions) | 104.0 | 100.1 | 404.0 | 401.1 |
| Average fuel price ($ per US gallon) | 3.85 | 4.15 | 3.91 | 4.41 |
| Fuel efficiency (US gallons of locomotive fuel consumed per 1,000 GTMs) | 0.875 | 0.881 | 0.873 | 0.876 |
| Train weight (tons) | 9,265 | 9,034 | 9,173 | 9,087 |
| Train length (feet) | 7,868 | 7,670 | 7,909 | 7,831 |
| Car velocity (car miles per day) | 215 | 210 | 206 | 209 |
| Through dwell (entire railroad, hours) | 7.0 | 7.1 | 7.1 | 7.0 |
| Through network train speed (miles per hour) | 19.2 | 19.2 | 18.8 | 18.9 |
| Locomotive utilization (trailing GTMs per total horsepower) | 195 | 186 | 190 | 186 |
| Safety indicators (7) | ||||
| Injury frequency rate (per 200,000 person hours) | 0.73 | 1.17 | 0.96 | 1.07 |
| Accident rate (per million train miles) | 1.90 | 1.75 | 1.84 | 1.69 |
| (1) | Amounts expressed in Canadian dollars and prepared in accordance with United States generally accepted accounting principles (GAAP), unless otherwise noted. |
| (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. |
| (3) | See the supplementary schedule entitled Non-GAAP Measures – Adjusted performance measures for an explanation of these non-GAAP measures. |
| (4) | See the supplementary schedule entitled Non-GAAP Measures – Free cash flow for an explanation of this non-GAAP measure. |
| (5) | Operating ratio is defined as operating expenses as a percentage of revenues. |
| (6) | Statistical operating data, key operating measures and safety indicators are unaudited and based on estimated data available at such time and are subject to change as more complete information becomes available. Definitions of gross ton miles, revenue ton miles, freight revenue per RTM, fuel efficiency, train weight, train length, car velocity, through dwell and through network train speed are included within the Company’s Management’s Discussion and Analysis. Definitions of all other indicators are provided on CN 's website, www.cn.ca/glossary. |
| (7) | Based on Federal Railroad Administration (FRA) reporting criteria. |
SUPPLEMENTARY INFORMATION – UNAUDITED
| Three months ended December 31 | Year ended December 31 | ||||||||||||
| 2025 | 2024 | % Change Fav (Unfav) | % Change at constant currency (1) Fav (Unfav) | 2025 | 2024 | % Change Fav (Unfav) | % Change at constant currency (1) Fav (Unfav) | ||||||
| Revenues ($ millions) (2) | |||||||||||||
| Petroleum and chemicals | 901 | 868 | 4 | % | 4 | % | 3,478 | 3,414 | 2 | % | 1 | % | |
| Metals and minerals | 466 | 488 | (5 | %) | (4 | %) | 1,962 | 2,048 | (4 | %) | (6 | %) | |
| Forest products | 433 | 469 | (8 | %) | (8 | %) | 1,839 | 1,931 | (5 | %) | (6 | %) | |
| Coal | 235 | 238 | (1 | %) | (1 | %) | 960 | 929 | 3 | % | 3 | % | |
| Grain and fertilizers | 1,098 | 1,038 | 6 | % | 6 | % | 3,658 | 3,422 | 7 | % | 6 | % | |
| Intermodal | 964 | 876 | 10 | % | 10 | % | 3,892 | 3,757 | 4 | % | 3 | % | |
| Automotive | 215 | 206 | 4 | % | 4 | % | 892 | 894 | — | % | (2 | %) | |
| Total freight revenues | 4,312 | 4,183 | 3 | % | 3 | % | 16,681 | 16,395 | 2 | % | 1 | % | |
| Other revenues | 152 | 175 | (13 | %) | (13 | %) | 623 | 651 | (4 | %) | (5 | %) | |
| Total revenues | 4,464 | 4,358 | 2 | % | 2 | % | 17,304 | 17,046 | 2 | % | — | % | |
| Revenue ton miles (RTMs) (millions) (3) | |||||||||||||
| Petroleum and chemicals | 12,388 | 11,767 | 5 | % | 5 | % | 46,626 | 46,530 | — | % | — | % | |
| Metals and minerals | 6,376 | 6,646 | (4 | %) | (4 | %) | 27,073 | 28,829 | (6 | %) | (6 | %) | |
| Forest products | 4,813 | 5,268 | (9 | %) | (9 | %) | 20,472 | 22,111 | (7 | %) | (7 | %) | |
| Coal | 5,142 | 5,326 | (3 | %) | (3 | %) | 20,777 | 20,165 | 3 | % | 3 | % | |
| Grain and fertilizers | 19,448 | 17,904 | 9 | % | 9 | % | 67,773 | 64,594 | 5 | % | 5 | % | |
| Intermodal | 12,780 | 11,652 | 10 | % | 10 | % | 52,249 | 50,190 | 4 | % | 4 | % | |
| Automotive | 760 | 742 | 2 | % | 2 | % | 3,189 | 3,119 | 2 | % | 2 | % | |
| Total RTMs | 61,707 | 59,305 | 4 | % | 4 | % | 238,159 | 235,538 | 1 | % | 1 | % | |
| Freight revenue / RTM (cents) (2)(3) | |||||||||||||
| Petroleum and chemicals | 7.27 | 7.38 | (1 | %) | (1 | %) | 7.46 | 7.34 | 2 | % | — | % | |
| Metals and minerals | 7.31 | 7.34 | — | % | — | % | 7.25 | 7.10 | 2 | % | — | % | |
| Forest products | 9.00 | 8.90 | 1 | % | 1 | % | 8.98 | 8.73 | 3 | % | 1 | % | |
| Coal | 4.57 | 4.47 | 2 | % | 2 | % | 4.62 | 4.61 | — | % | — | % | |
| Grain and fertilizers | 5.65 | 5.80 | (3 | %) | (3 | %) | 5.40 | 5.30 | 2 | % | 1 | % | |
| Intermodal | 7.54 | 7.52 | — | % | — | % | 7.45 | 7.49 | (1 | %) | (1 | %) | |
| Automotive | 28.29 | 27.76 | 2 | % | 1 | % | 27.97 | 28.66 | (2 | %) | (4 | %) | |
| Total freight revenue / RTM | 6.99 | 7.05 | (1 | %) | (1 | %) | 7.00 | 6.96 | 1 | % | — | % | |
| Carloads (thousands) (3) | |||||||||||||
| Petroleum and chemicals | 167 | 163 | 2 | % | 2 | % | 646 | 648 | — | % | — | % | |
| Metals and minerals | 223 | 244 | (9 | %) | (9 | %) | 900 | 974 | (8 | %) | (8 | %) | |
| Forest products | 66 | 71 | (7 | %) | (7 | %) | 278 | 299 | (7 | %) | (7 | %) | |
| Coal | 117 | 113 | 4 | % | 4 | % | 472 | 456 | 4 | % | 4 | % | |
| Grain and fertilizers | 202 | 194 | 4 | % | 4 | % | 720 | 690 | 4 | % | 4 | % | |
| Intermodal | 539 | 490 | 10 | % | 10 | % | 2,234 | 2,115 | 6 | % | 6 | % | |
| Automotive | 49 | 49 | — | % | — | % | 208 | 208 | — | % | — | % | |
| Total carloads | 1,363 | 1,324 | 3 | % | 3 | % | 5,458 | 5,390 | 1 | % | 1 | % | |
| Freight revenue / carload ($) (2)(3) | |||||||||||||
| Petroleum and chemicals | 5,395 | 5,325 | 1 | % | 1 | % | 5,384 | 5,269 | 2 | % | 1 | % | |
| Metals and minerals | 2,090 | 2,000 | 5 | % | 5 | % | 2,180 | 2,103 | 4 | % | 2 | % | |
| Forest products | 6,561 | 6,606 | (1 | %) | (1 | %) | 6,615 | 6,458 | 2 | % | 1 | % | |
| Coal | 2,009 | 2,106 | (5 | %) | (5 | %) | 2,034 | 2,037 | — | % | (1 | %) | |
| Grain and fertilizers | 5,436 | 5,351 | 2 | % | 2 | % | 5,081 | 4,959 | 2 | % | 1 | % | |
| Intermodal | 1,788 | 1,788 | — | % | — | % | 1,742 | 1,776 | (2 | %) | (2 | %) | |
| Automotive | 4,388 | 4,204 | 4 | % | 4 | % | 4,288 | 4,298 | — | % | (2 | %) | |
| Total freight revenue / carload | 3,164 | 3,159 | — | % | — | % | 3,056 | 3,042 | — | % | (1 | %) |
| (1) | 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 supplementary schedule entitled Non-GAAP Measures – Constant currency for an explanation of this non-GAAP measure. |
| (2) | Amounts expressed in Canadian dollars. |
| (3) | Statistical operating data and related key operating measures are unaudited and based on estimated data available at such time and are subject to change as more complete information becomes available. |
NON-GAAP MEASURES – UNAUDITED
In this supplementary schedule, the “Company” or “CN” refers to Canadian National Railway Company, together with its wholly-owned subsidiaries. Financial information included in this schedule is expressed in Canadian dollars, unless otherwise noted.
CN reports its financial results in accordance with United States generally accepted accounting principles (GAAP). The Company also uses non-GAAP measures that do not have any standardized meaning prescribed by GAAP, including adjusted performance measures, constant currency, free cash flow, adjusted debt-to-adjusted EBITDA multiple, return on invested capital (ROIC) and adjusted ROIC. These non-GAAP measures may not be comparable to similar measures presented by other companies. From management’s perspective, these non-GAAP measures are useful measures of performance and provide investors with supplementary information to assess the Company’s 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 diluted 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 CN 's performance and may include the following adjustments:
- operating expense adjustments: workforce reduction program, advisory costs related to rail consolidation matters, depreciation expense on the deployment of a replacement system, advisory fees related to shareholder matters, losses and recoveries from assets held for sale, business acquisition-related costs;
- non-operating expense adjustments: business acquisition-related financing fees, merger termination income, gains and losses on disposal of property; and
- the effect of changes in tax laws including rate enactments and changes in tax positions affecting prior years.
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.
For the three months and year ended December 31, 2025, the Company 's adjusted net income was $1,284 million, or $2.08 per diluted share and $4,756 million, or $7.63 per diluted share, respectively, which excludes:
- employee termination benefits and severance costs related to a workforce reduction program of $34 million, or $25 million after-tax ($0.04 per diluted share) recorded in the fourth quarter in Labor and fringe benefits within the Consolidated Statement of Income; and
- advisory costs related to analysis and advocacy for the U.S. Surface Transportation Board (STB) enforcement of antitrust laws pertaining to the potential merger between Union Pacific and Norfolk Southern of $15 million, or $11 million after-tax ($0.01 and $0.02 per diluted share for the three months and year ended December 31, 2025, respectively) recorded in the fourth quarter in Purchased services and materials within the Consolidated Statements of Income.
For the three months and year ended December 31, 2024, the Company 's adjusted net income was $1,146 million, or $1.82 per diluted share, and $4,506 million, or $7.10 per diluted share, respectively. The adjusted figure for the year ended December 31, 2024 excludes a loss on assets held for sale of $78 million, or $58 million after-tax ($0.09 per diluted share), recorded in the second quarter, resulting from an agreement to transfer the ownership and related risks and obligations of the Quebec Bridge located in Quebec, Canada, to the Government of Canada.
Adjusted net income is defined as Net income in accordance with GAAP adjusted for certain significant items. Management believes that adjusted net income provides additional insight to management and investors into the Company 's operations and underlying business trends as well as facilitate period-to-period comparisons, as it excludes certain significant items that are not reflective of CN 's underlying business operations and could distort the analysis of trends in business performance. Adjusted diluted earnings per share is defined as adjusted net income divided by the weighted-average diluted shares outstanding. This measure helps management and investors evaluate the Company 's profitability on a per-share basis, facilitating the assessment of period-over-period performance by removing the impact of significant, non-recurring items.
The following table provides a reconciliation of Net income and Earnings per share in accordance with GAAP, as reported for the three months and years ended December 31, 2025 and 2024, to the non-GAAP adjusted performance measures presented herein:
| Three months ended December 31 | Year ended December 31 | ||||||||||
| In millions, except per share data | 2025 | 2024 | 2025 | 2024 | |||||||
| Net income | $ | 1,248 | $ | 1,146 | $ | 4,720 | $ | 4,448 | |||
| Adjustments: | |||||||||||
| Operating expense adjustments: | |||||||||||
| Workforce reduction program | 34 | — | 34 | — | |||||||
| Advisory costs related to rail consolidation matters | 15 | — | 15 | — | |||||||
| Loss on assets held for sale | — | — | — | 78 | |||||||
| Tax adjustments: | |||||||||||
| Tax effect of adjustments (1) | (13 | ) | — | (13 | ) | (20 | ) | ||||
| Total adjustments | 36 | — | 36 | 58 | |||||||
| Adjusted net income | $ | 1,284 | $ | 1,146 | $ | 4,756 | $ | 4,506 | |||
| Diluted earnings per share | $ | 2.03 | $ | 1.82 | $ | 7.57 | $ | 7.01 | |||
| Impact of adjustments, per share | 0.05 | — | 0.06 | 0.09 | |||||||
| Adjusted diluted earnings per share | $ | 2.08 | $ | 1.82 | $ | 7.63 | $ | 7.10 |
| (1) | The tax impact of adjustments is based on the nature of the item for tax purposes and related tax rates in the applicable jurisdiction. |
Adjusted operating income is defined as Operating income in accordance with GAAP adjusted for certain significant operating expense items that are not reflective of CN 's underlying business operations. This measure helps management and investors assess the Company 's core operating results by excluding items that may distort the analysis of ongoing business performance. Adjusted operating expenses is defined as Operating expenses in accordance with GAAP adjusted for certain significant operating expense items that are not reflective of CN 's underlying business operations. This measure provides management and investors with a view of ongoing costs which exclude unusual or non-recurring items, enabling more accurate assessment of cost management and resource allocation across reporting periods. Adjusted operating ratio is defined as adjusted operating expenses as a percentage of revenues. For management and investors, the adjusted operating ratio serves as a key performance indicator of cost management and overall operational effectiveness, as it demonstrates how effectively management controls costs relative to total revenue by excluding unusual or non-recurring items.
The following table provides a reconciliation of Operating income, Operating expenses and operating ratio, as reported for the three months and years ended December 31, 2025 and 2024, to the non-GAAP adjusted performance measures presented herein:
| Three months ended December 31 | Year ended December 31 | |||||||||||
| In millions, except percentages | 2025 | 2024 | 2025 | 2024 | ||||||||
| Operating income | $ | 1,733 | $ | 1,628 | $ | 6,587 | $ | 6,247 | ||||
| Adjustments: | ||||||||||||
| Workforce reduction program | 34 | — | 34 | — | ||||||||
| Advisory costs related to rail consolidation matters | 15 | — | 15 | — | ||||||||
| Loss on assets held for sale | — | — | — | 78 | ||||||||
| Total adjustments | $ | 49 | $ | — | $ | 49 | $ | 78 | ||||
| Adjusted operating income | $ | 1,782 | $ | 1,628 | $ | 6,636 | $ | 6,325 | ||||
| Operating expenses | $ | 2,731 | $ | 2,730 | $ | 10,717 | $ | 10,799 | ||||
| Total adjustments | (49 | ) | — | (49 | ) | (78 | ) | |||||
| Adjusted operating expenses | $ | 2,682 | $ | 2,730 | $ | 10,668 | $ | 10,721 | ||||
| Operating ratio | 61.2 | % | 62.6 | % | 61.9 | % | 63.4 | % | ||||
| Impact of adjustments | (1.1)% | — | % | (0.2)% | (0.5)% | |||||||
| Adjusted operating ratio | 60.1 | % | 62.6 | % | 61.7 | % | 62.9 | % |
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 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 $1.395 and $1.398 per US$1.00 for the three months and year ended December 31, 2025, respectively, and $1.399 and $1.370 per US$1.00 for the three months and year ended December 31, 2024, respectively. On a constant currency basis, the Company’s Net income for the three months and year ended December 31, 2025 would have been lower by $4 million ($0.01 per diluted share) and lower by $49 million ($0.08 per diluted share), respectively.
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 three months and year ended December 31, 2025:
| Three months ended December 31 | Year ended December 31 | |||||||||||||||||||||
| In millions, except per share data | 2025 | Constant currency impact | 2024 | % Change at constant currency Fav (Unfav) | 2025 | Constant currency impact | 2024 | % Change at constant currency Fav (Unfav) | ||||||||||||||
| Revenues | ||||||||||||||||||||||
| Petroleum and chemicals | $ | 901 | $ | — | $ | 868 | 4 | % | $ | 3,478 | $ | (43 | ) | $ | 3,414 | 1 | % | |||||
| Metals and minerals | 466 | 1 | 488 | (4 | %) | 1,962 | (33 | ) | 2,048 | (6 | %) | |||||||||||
| Forest products | 433 | — | 469 | (8 | %) | 1,839 | (31 | ) | 1,931 | (6 | %) | |||||||||||
| Coal | 235 | — | 238 | (1 | %) | 960 | (7 | ) | 929 | 3 | % | |||||||||||
| Grain and fertilizers | 1,098 | — | 1,038 | 6 | % | 3,658 | (36 | ) | 3,422 | 6 | % | |||||||||||
| Intermodal | 964 | 1 | 876 | 10 | % | 3,892 | (18 | ) | 3,757 | 3 | % | |||||||||||
| Automotive | 215 | (1 | ) | 206 | 4 | % | 892 | (14 | ) | 894 | (2 | %) | ||||||||||
| Total freight revenues | 4,312 | 1 | 4,183 | 3 | % | 16,681 | (182 | ) | 16,395 | 1 | % | |||||||||||
| Other revenues | 152 | 1 | 175 | (13 | %) | 623 | (6 | ) | 651 | (5 | %) | |||||||||||
| Total revenues | 4,464 | 2 | 4,358 | 2 | % | 17,304 | (188 | ) | 17,046 | — | % | |||||||||||
| Operating expenses | ||||||||||||||||||||||
| Labor and fringe benefits | 913 | 1 | 883 | (4 | %) | 3,510 | (27 | ) | 3,422 | (2 | %) | |||||||||||
| Purchased services and material | 591 | 4 | 598 | 1 | % | 2,306 | (10 | ) | 2,313 | 1 | % | |||||||||||
| Fuel | 437 | (1 | ) | 481 | 9 | % | 1,786 | (39 | ) | 2,060 | 15 | % | ||||||||||
| Depreciation and amortization | 456 | — | 489 | 7 | % | 1,938 | (17 | ) | 1,892 | (2 | %) | |||||||||||
| Equipment rents | 106 | 1 | 98 | (9 | %) | 432 | (7 | ) | 392 | (8 | %) | |||||||||||
| Other | 228 | 2 | 181 | (27 | %) | 745 | (10 | ) | 642 | (14 | %) | |||||||||||
| Loss on assets held for sale | — | — | — | — | % | — | — | 78 | 100 | % | ||||||||||||
| Total operating expenses | 2,731 | 7 | 2,730 | — | % | 10,717 | (110 | ) | 10,799 | 2 | % | |||||||||||
| Operating income | 1,733 | (5 | ) | 1,628 | 6 | % | 6,587 | (78 | ) | 6,247 | 4 | % | ||||||||||
| Interest expense | (234 | ) | — | (231 | ) | (1 | %) | (913 | ) | 14 | (891 | ) | (1 | %) | ||||||||
| Other components of net periodic benefit income | 126 | — | 113 | 12 | % | 502 | — | 454 | 11 | % | ||||||||||||
| Other income (loss) | 44 | — | (2 | ) | 2300 | % | 88 | (1 | ) | 42 | 107 | % | ||||||||||
| Income before income taxes | 1,669 | (5 | ) | 1,508 | 10 | % | 6,264 | (65 | ) | 5,852 | 6 | % | ||||||||||
| Income tax recovery (expense) | (421 | ) | 1 | (362 | ) | (16 | %) | (1,544 | ) | 16 | (1,404 | ) | (9 | %) | ||||||||
| Net income | $ | 1,248 | $ | (4 | ) | $ | 1,146 | 9 | % | $ | 4,720 | $ | (49 | ) | $ | 4,448 | 5 | % | ||||
| Diluted earnings per share | $ | 2.03 | $ | (0.01 | ) | $ | 1.82 | 11 | % | $ | 7.57 | $ | (0.08 | ) | $ | 7.01 | 7 | % |
Free cash flow
Free cash flow is a useful measure of liquidity as it demonstrates the Company 's 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 combinations and (ii) merger transaction-related payments, cash receipts and cash income taxes, which are items that are not indicative of 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 three months and years ended December 31, 2025 and 2024, to the non-GAAP free cash flow presented herein:
| Three months ended December 31 | Year ended December 31 | |||||||||||
| In millions | 2025 | 2024 | 2025 | 2024 | ||||||||
| Net cash provided by operating activities | $ | 2,227 | $ | 1,995 | $ | 7,049 | $ | 6,699 | ||||
| Net cash used in investing activities | (1,232 | ) | (963 | ) | (3,713 | ) | (3,607 | ) | ||||
| Free cash flow | $ | 995 | $ | 1,032 | $ | 3,336 | $ | 3,092 |
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 Company 's 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 Company’s Consolidated Balance Sheets as well as Operating lease liabilities, including current portion and pension plans in deficiency recognized on the Company 's 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 CN 's 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, reported as at and for the years ended December 31, 2025 and 2024, respectively, to the adjusted measures presented herein, which have been used to calculate the non-GAAP adjusted debt-to-adjusted EBITDA multiple:
| In millions, unless otherwise indicated | As at and for the year ended December 31, | 2025 | 2024 | ||||
| Debt (1) | $ | 21,206 | $ | 20,894 | |||
| Adjustments: | |||||||
| Operating lease liabilities, including current portion (2) | 424 | 477 | |||||
| Pension plans in deficiency (3) | 329 | 350 | |||||
| Adjusted debt | $ | 21,959 | $ | 21,721 | |||
| Net income | $ | 4,720 | $ | 4,448 | |||
| Interest expense | 913 | 891 | |||||
| Income tax expense | 1,544 | 1,404 | |||||
| Depreciation and amortization | 1,938 | 1,892 | |||||
| Operating lease cost (4) | 160 | 153 | |||||
| Other components of net periodic benefit income | (502 | ) | (454 | ) | |||
| Other income | (88 | ) | (42 | ) | |||
| Adjustments: | |||||||
| Workforce reduction program (5) | 34 | — | |||||
| Advisory costs related to rail consolidation matters (6) | 15 | — | |||||
| Loss on assets held for sale (7) | — | 78 | |||||
| Adjusted EBITDA | $ | 8,734 | $ | 8,370 | |||
| Adjusted debt-to-adjusted EBITDA multiple(times) | 2.51 | 2.60 |
| (1) | Represents the aggregate of Current portion of long-term and Long-term debt as disclosed on the Consolidated Balance Sheets. |
| (2) | Represents the present value of operating lease payments. |
| (3) | Represents the total funded deficit of all defined benefit pension plans with a projected benefit obligation in excess of plan assets. |
| (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 related to a workforce reduction program, recorded in Labor and fringe benefits within the Consolidated Statements of Income. |
| (6) | Represents advisory costs related to analysis and advocacy for STB enforcement of antitrust laws pertaining to the potential merger between Union Pacific and Norfolk Southern recorded in the fourth quarter in Purchased services and materials within the Consolidated Statements of Income. |
| (7) | Relates to a loss on assets held for sale of $78 million recorded in the second quarter of 2024, resulting from an agreement to transfer the ownership and related risks and obligations of the Quebec Bridge located in Quebec, Canada, to the Government of Canada. |
ROIC and adjusted ROIC
ROIC and adjusted ROIC are useful measures for management and investors to evaluate the efficiency of the Company 's 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 Company 's 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 Company 's 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:
| In millions, except percentage | As at and for the year ended December 31, | 2025 | 2024 | ||||
| Net income | $ | 4,720 | $ | 4,448 | |||
| Interest expense | 913 | 891 | |||||
| Tax on interest expense (1) | (225 | ) | (214 | ) | |||
| Return | $ | 5,408 | $ | 5,125 | |||
| Average total shareholders ' equity | $ | 21,310 | $ | 20,584 | |||
| Average long-term debt | 20,014 | 17,931 | |||||
| Average current portion of long-term debt | 1,036 | 1,753 | |||||
| Less: Average cash, cash equivalents, restricted cash and restricted cash equivalents | (382 | ) | (663 | ) | |||
| Average invested capital | $ | 41,978 | $ | 39,605 | |||
| ROIC | 12.9 | % | 12.9 | % | |||
| Adjusted net income (2) | $ | 4,756 | $ | 4,506 | |||
| Interest expense | 913 | 891 | |||||
| Adjusted tax on interest expense (3) | (226 | ) | (214 | ) | |||
| Adjusted return | $ | 5,443 | $ | 5,183 | |||
| Average invested capital | $ | 41,978 | $ | 39,605 | |||
| Adjusted ROIC | 13.0 | % | 13.1 | % |
| (1) | 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 2025 was 24.6% (2024 - 24.0%). |
| (2) | 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 supplementary schedule entitled Non-GAAP measures – Adjusted performance measures for an explanation of this non-GAAP measure. |
| (3) | 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 for 2025 was 24.7% (2024 - 24.0%). |
INTERIM CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
CONSOLIDATED STATEMENTS OF INCOME – UNAUDITED
| Three months ended December 31 | Year ended December 31 | |||||||||||
| In millions, except per share data | 2025 | 2024 | 2025 | 2024 | ||||||||
| Revenues | $ | 4,464 | $ | 4,358 | $ | 17,304 | $ | 17,046 | ||||
| Operating expenses | ||||||||||||
| Labor and fringe benefits | 913 | 883 | 3,510 | 3,422 | ||||||||
| Purchased services and material | 591 | 598 | 2,306 | 2,313 | ||||||||
| Fuel | 437 | 481 | 1,786 | 2,060 | ||||||||
| Depreciation and amortization | 456 | 489 | 1,938 | 1,892 | ||||||||
| Equipment rents | 106 | 98 | 432 | 392 | ||||||||
| Other | 228 | 181 | 745 | 642 | ||||||||
| Loss on assets held for sale | — | — | — | 78 | ||||||||
| Total operating expenses | 2,731 | 2,730 | 10,717 | 10,799 | ||||||||
| Operating income | 1,733 | 1,628 | 6,587 | 6,247 | ||||||||
| Interest expense | (234 | ) | (231 | ) | (913 | ) | (891 | ) | ||||
| Other components of net periodic benefit income | 126 | 113 | 502 | 454 | ||||||||
| Other income (loss) | 44 | (2 | ) | 88 | 42 | |||||||
| Income before income taxes | 1,669 | 1,508 | 6,264 | 5,852 | ||||||||
| Income tax expense | (421 | ) | (362 | ) | (1,544 | ) | (1,404 | ) | ||||
| Net income | $ | 1,248 | $ | 1,146 | $ | 4,720 | $ | 4,448 | ||||
| Earnings per share | ||||||||||||
| Basic | $ | 2.03 | $ | 1.82 | $ | 7.58 | $ | 7.02 | ||||
| Diluted | $ | 2.03 | $ | 1.82 | $ | 7.57 | $ | 7.01 | ||||
| Weighted-average number of shares | ||||||||||||
| Basic | 615.4 | 628.9 | 623.1 | 633.5 | ||||||||
| Diluted | 616.0 | 629.5 | 623.7 | 634.5 | ||||||||
| Dividends declared per share | $ | 0.8875 | $ | 0.8450 | $ | 3.5500 | $ | 3.3800 |
See accompanying Notes to Interim Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME – UNAUDITED
| Three months ended December 31 | Year ended December 31 | |||||||||||
| In millions | 2025 | 2024 | 2025 | 2024 | ||||||||
| Net income | $ | 1,248 | $ | 1,146 | $ | 4,720 | $ | 4,448 | ||||
| Other comprehensive income (loss) | ||||||||||||
| Net gain (loss) on foreign currency translation | (78 | ) | 293 | (286 | ) | 388 | ||||||
| Net change in pension and other postretirement benefit plans | 388 | 986 | 424 | 1,025 | ||||||||
| Derivative instruments | (2 | ) | (1 | ) | (2 | ) | (20 | ) | ||||
| Other comprehensive income before income taxes | 308 | 1,278 | 136 | 1,393 | ||||||||
| Income tax expense | (124 | ) | (160 | ) | (183 | ) | (134 | ) | ||||
| Other comprehensive income (loss) | 184 | 1,118 | (47 | ) | 1,259 | |||||||
| Comprehensive income | $ | 1,432 | $ | 2,264 | $ | 4,673 | $ | 5,707 |
See accompanying Notes to Interim Consolidated Financial Statements.
CONSOLIDATED BALANCE SHEETS – UNAUDITED
| December 31 | December 31 | ||||||
| In millions | As at | 2025 | 2024 | ||||
| Assets | |||||||
| Current assets | |||||||
| Cash and cash equivalents | $ | 350 | $ | 389 | |||
| Restricted cash and cash equivalents | 13 | 12 | |||||
| Accounts receivable | 1,117 | 1,164 | |||||
| Material and supplies | 734 | 720 | |||||
| Other current assets | 257 | 334 | |||||
| Total current assets | 2,471 | 2,619 | |||||
| Properties | 49,148 | 47,960 | |||||
| Operating lease right-of-use assets | 440 | 485 | |||||
| Pension asset | 5,362 | 4,541 | |||||
| Deferred income tax assets | 611 | 689 | |||||
| Intangible assets, goodwill and other | 523 | 773 | |||||
| Total assets | $ | 58,555 | $ | 57,067 | |||
| Liabilities and shareholders ' equity | |||||||
| Current liabilities | |||||||
| Accounts payable and other | $ | 2,790 | $ | 2,810 | |||
| Current portion of long-term debt | 906 | 1,166 | |||||
| Total current liabilities | 3,696 | 3,976 | |||||
| Deferred income tax liabilities | 11,223 | 10,874 | |||||
| Other liabilities and deferred credits | 999 | 612 | |||||
| Pension and other postretirement benefits | 453 | 483 | |||||
| Long-term debt | 20,300 | 19,728 | |||||
| Operating lease liabilities | 316 | 343 | |||||
| Total liabilities | 36,987 | 36,016 | |||||
| Shareholders ' equity | |||||||
| Common shares | 3,454 | 3,474 | |||||
| Common shares in Share Trusts | (152 | ) | (129 | ) | |||
| Additional paid-in capital | 415 | 372 | |||||
| Accumulated other comprehensive loss | (1,067 | ) | (1,020 | ) | |||
| Retained earnings | 18,918 | 18,354 | |||||
| Total shareholders ' equity | 21,568 | 21,051 | |||||
| Total liabilities and shareholders ' equity | $ | 58,555 | $ | 57,067 |
See accompanying Notes to Interim Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS ' EQUITY – UNAUDITED
| Number of common shares | Common shares in Share Trusts | Additional paid-in capital | Accumulated other comprehensive loss | Retained earnings | Total shareholders ' equity | |||
| In millions | Outstanding | Share Trusts | Common Shares | |||||
| Balance at September 30, 2025 | 617.7 | 1.0 | $ 3,468 | $ (137) | $ 404 | $ (1,251) | $ 18,789 | $ 21,273 |
| Net income | 1,248 | 1,248 | ||||||
| Stock options exercised | 0.1 | 10 | — | 10 | ||||
| Settlement of equity settled awards | 0.1 | (0.1) | 9 | (14) | 2 | (3) | ||
| Stock-based compensation and other | 25 | (1) | 24 | |||||
| Repurchase of common shares | (4.4) | (24) | (575) | (599) | ||||
| Share purchases by Share Trusts | (0.2) | 0.2 | (24) | (24) | ||||
| Other comprehensive income | 184 | 184 | ||||||
| Dividends | (545) | (545) | ||||||
| Balance at December 31, 2025 | 613.3 | 1.1 | $ 3,454 | $ (152) | $ 415 | $ (1,067) | $ 18,918 | $ 21,568 |
| Number of common shares | Common shares in Share Trusts | Additional paid-in capital | Accumulated other comprehensive loss | Retained earnings | Total shareholders ' equity | |||
| In millions | Outstanding | Share Trusts | Common Shares | |||||
| Balance at December 31, 2024 | 627.9 | 0.9 | $ 3,474 | $ (129) | $ 372 | $ (1,020) | $ 18,354 | $ 21,051 |
| Net income | 4,720 | 4,720 | ||||||
| Stock options exercised | 0.5 | 63 | (7) | 56 | ||||
| Settlement of equity settled awards | 0.2 | (0.2) | 33 | (68) | 21 | (14) | ||
| Stock-based compensation and other | 118 | (5) | 113 | |||||
| Repurchase of common shares | (14.9) | (83) | (1,964) | (2,047) | ||||
| Share purchases by Share Trusts | (0.4) | 0.4 | (56) | (56) | ||||
| Other comprehensive loss | (47) | (47) | ||||||
| Dividends | (2,208) | (2,208) | ||||||
| Balance at December 31, 2025 | 613.3 | 1.1 | $ 3,454 | $ (152) | $ 415 | $ (1,067) | $ 18,918 | $ 21,568 |
See accompanying Notes to Interim Consolidated Financial Statements.
| Number of common shares | Common shares in Share Trusts | Additional paid-in capital | Accumulated other comprehensive loss | Retained earnings | Totals shareholders ' equity | |||
| In millions | Outstanding | Share Trusts | Common Shares | |||||
| Balance at September 30, 2024 | 628.8 | 1.0 | $ 3,477 | $ (128) | $ 360 | $ (2,138) | $ 17,887 | $ 19,458 |
| Net income | 1,146 | 1,146 | ||||||
| Stock options exercised | — | 3 | — | 3 | ||||
| Settlement of equity settled awards | 0.1 | (0.1) | 7 | (7) | — | — | ||
| Stock-based compensation and other | 19 | (1) | 18 | |||||
| Repurchase of common shares | (1.0) | (6) | (147) | (153) | ||||
| Share purchases by Share Trusts | — | — | (8) | (8) | ||||
| Other comprehensive income | 1,118 | 1,118 | ||||||
| Dividends | (531) | (531) | ||||||
| Balance at December 31,2024 | 627.9 | 0.9 | $ 3,474 | $ (129) | $ 372 | $ (1,020) | $ 18,354 | $ 21,051 |
| Number of common shares | Common shares in Share Trusts | Additional paid-in capital | Accumulated other comprehensive loss | Retained earnings | Totals shareholders ' equity | |||
| In millions | Outstanding | Share Trusts | Common Shares | |||||
| Balance at December 31, 2023 | 642.7 | 1.1 | $ 3,512 | $ (144) | $ 373 | $ (2,279) | $ 18,655 | $ 20,117 |
| Net income | 4,448 | 4,448 | ||||||
| Stock options exercised | 0.4 | 47 | (6) | 41 | ||||
| Settlement of equity settled awards | 0.5 | (0.5) | 65 | (80) | (42) | (57) | ||
| Stock-based compensation and other | 85 | (3) | 82 | |||||
| Repurchase of common shares | (15.4) | (85) | (2,566) | (2,651) | ||||
| Share purchases by Share Trusts | (0.3) | 0.3 | (50) | (50) | ||||
| Other comprehensive income | 1,259 | 1,259 | ||||||
| Dividends | (2,138) | (2,138) | ||||||
| Balance at December 31,2024 | 627.9 | 0.9 | $ 3,474 | $ (129) | $ 372 | $ (1,020) | $ 18,354 | $ 21,051 |
See accompanying Notes to Interim Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS – UNAUDITED
| Three months ended December 31 | Year ended December 31 | |||||||||||
| In millions | 2025 | 2024 | 2025 | 2024 | ||||||||
| Operating activities | ||||||||||||
| Net income | $ | 1,248 | $ | 1,146 | $ | 4,720 | $ | 4,448 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
| Depreciation and amortization | 456 | 489 | 1,938 | 1,892 | ||||||||
| Pension income and funding | (105 | ) | (97 | ) | (410 | ) | (385 | ) | ||||
| Deferred income taxes | 144 | 18 | 334 | 325 | ||||||||
| Loss on assets held for sale | — | — | — | 78 | ||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Accounts receivable | 132 | 132 | 92 | 205 | ||||||||
| Material and supplies | 43 | 17 | (24 | ) | (6 | ) | ||||||
| Accounts payable and other | 149 | 181 | 220 | (107 | ) | |||||||
| Other current assets | (10 | ) | 23 | (123 | ) | — | ||||||
| Other operating activities, net | 170 | 86 | 302 | 249 | ||||||||
| Net cash provided by operating activities | 2,227 | 1,995 | 7,049 | 6,699 | ||||||||
| Investing activities | ||||||||||||
| Property additions | (1,229 | ) | (944 | ) | (3,658 | ) | (3,549 | ) | ||||
| Other investing activities, net | (3 | ) | (19 | ) | (55 | ) | (58 | ) | ||||
| Net cash used in investing activities | (1,232 | ) | (963 | ) | (3,713 | ) | (3,607 | ) | ||||
| Financing activities | ||||||||||||
| Issuance of debt | 970 | 366 | 1,965 | 3,483 | ||||||||
| Repayment of debt | (26 | ) | (510 | ) | (446 | ) | (1,038 | ) | ||||
| Change in commercial paper, net | (638 | ) | (625 | ) | (612 | ) | (1,381 | ) | ||||
| Settlement of foreign exchange forward contracts on debt | (14 | ) | 122 | 3 | 120 | |||||||
| Issuance of common shares for stock options exercised | 10 | 3 | 56 | 41 | ||||||||
| Withholding taxes remitted on the net settlement of equity settled awards | (2 | ) | — | (9 | ) | (52 | ) | |||||
| Repurchase of common shares | (587 | ) | (150 | ) | (2,059 | ) | (2,600 | ) | ||||
| Purchase of common shares for settlement of equity settled awards | (1 | ) | — | (5 | ) | (5 | ) | |||||
| Purchase of common shares by Share Trusts | (24 | ) | (8 | ) | (56 | ) | (50 | ) | ||||
| Dividends paid | (545 | ) | (531 | ) | (2,208 | ) | (2,138 | ) | ||||
| Net cash used in financing activities | (857 | ) | (1,333 | ) | (3,371 | ) | (3,620 | ) | ||||
| Effect of foreign exchange fluctuations on cash, cash equivalents, restricted cash and restricted cash equivalents | (1 | ) | 4 | (3 | ) | 5 | ||||||
| Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents | 137 | (297 | ) | (38 | ) | (523 | ) | |||||
| Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of period | 226 | 698 | 401 | 924 | ||||||||
| Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period | $ | 363 | $ | 401 | $ | 363 | $ | 401 | ||||
| Cash and cash equivalents, end of period | $ | 350 | $ | 389 | $ | 350 | $ | 389 | ||||
| Restricted cash and cash equivalents, end of period | 13 | 12 | 13 | 12 | ||||||||
| Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period | $ | 363 | $ | 401 | $ | 363 | $ | 401 | ||||
| Supplemental cash flow information | ||||||||||||
| Interest paid | $ | (216 | ) | $ | (210 | ) | $ | (979 | ) | $ | (926 | ) |
| Income taxes paid | $ | (227 | ) | $ | (288 | ) | $ | (935 | ) | $ | (1,221 | ) |
See accompanying Notes to Interim Consolidated Financial Statements.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
1 – Basis of presentation
In these notes, the "Company " or "CN " refers to, Canadian National Railway Company, together with its wholly-owned subsidiaries. The accompanying unaudited Interim Consolidated Financial Statements ( "Interim Consolidated Financial Statements "), expressed in Canadian dollars, have been prepared in accordance with United States generally accepted accounting principles (GAAP) for interim financial statements. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements. In management 's opinion, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included. Interim operating results are not necessarily indicative of the results that may be expected for the full year.
These Interim Consolidated Financial Statements have been prepared using accounting policies consistent with those used in preparing CN 's 2024 Annual Consolidated Financial Statements and should be read in conjunction with such statements and Notes thereto.
2 – Recent accounting pronouncements
The following Accounting Standards Update (ASU) issued by the Financial Accounting Standards Board (FASB) have been adopted by the Company:
ASU 2023-09 – Income Taxes (Topic 740): Improvements to Income Tax Disclosures
The ASU amends the rules on income tax disclosures by modifying or eliminating certain existing income tax disclosure requirements in addition to establishing new requirements. The amendments address investor requests for more transparency about income taxes, including jurisdictional information, by requiring consistent categories and greater disaggregation of information. The ASU’s two primary amendments relate to the rate reconciliation and income taxes paid annual disclosures.
Reconciling items presented in the rate reconciliation will be in dollar amounts and percentages, and will be disaggregated into specified categories with certain reconciling items further broken out by nature and/or jurisdiction using a 5% threshold of domestic federal taxes. Income taxes paid will be disaggregated between federal, provincial/territorial, and foreign taxing jurisdictions using a 5% threshold of total income taxes paid net of refunds received.
The ASU is effective for annual periods beginning after December 15, 2024. The Company will reflect the relevant annual disclosure changes prospectively, including the disaggregation of rate reconciliation items and income tax payments by specified categories, nature and/or jurisdiction as described above within the 2025 Annual Consolidated Financial Statements.
ASU 2025-05 – Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets
This ASU introduces an optional practical expedient to simplify the estimation of expected credit losses on current trade receivables and current contract assets arising from revenue transactions. When elected, an entity may assume that current conditions at the balance sheet date will remain unchanged over the remaining life of the assets in developing its reasonable and supportable forecast; entities still adjust historical loss information to reflect current conditions, but they need not incorporate forward-looking macroeconomic forecasts for assets within scope.
The amendments in this ASU are effective for annual periods beginning after December 15, 2025. The Company will reflect the relevant annual disclosure changes prospectively within the 2025 Annual Consolidated Financial Statements.
The following recent ASU issued by the Financial Accounting Standards Board (FASB) have an effective date after December 31, 2025 and have not been adopted by the Company:
ASU 2025-10 — Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities
This ASU introduces comprehensive accounting guidance for government grants received by business entities by expanding Topic 832 beyond disclosure-only requirements to include recognition, measurement, presentation, and disclosure. The main provisions establish that government grants should not be recognized until it is probable that the Company will comply with the conditions attached to the grant and that the grant will be received. The ASU also provides guidance on accounting for grants related to income and grants related to assets, including acceptable presentation approaches, and introduces enhanced disclosure requirements intended to improve transparency and comparability of government grant information.
The amendments in this ASU are effective for annual periods beginning after December 15, 2028, including interim periods within these fiscal years. Early adoption is permitted. The amendments in this ASU may be adopted using a prospective, modified retrospective, or full retrospective transition approach, depending on the nature of the grants and the transition method elected.
The Company is evaluating the effects that the adoption of the ASU will have on its Consolidated Financial Statements and disclosures.
ASU 2025-06 – Intangibles - Goodwill and Other Internal-Use Software (Subtopic 350-40)
This ASU modernizes the accounting for internal-use software by removing references to prescriptive and sequential software development stages. The main provisions establish that capitalization begins when management authorizes and commits to funding the software project and it is probable the project will be completed and used as intended. The ASU also introduces enhanced disclosure requirements that align internal-use software disclosures to property, plant and equipment. It also consolidates guidance for website development by integrating it into the framework for internal-use software.
The amendments in this ASU are effective for annual periods beginning after December 15, 2027, including interim periods within these fiscal years. Early adoption is permitted. The amendments in this ASU must be adopted either prospectively, retrospectively or using a modified transition approach based on project status and prior capitalization.
The Company is evaluating the effects that the adoption of the ASU will have on its Consolidated Financial Statements and disclosures.
ASU 2024-03 – Disaggregation of Income Statement Expenses (Subtopic 220-40)
This ASU aims to provide stakeholders a clearer understanding of an entity 's expenses and enhance their ability to assess performance, forecast expenses and evaluate the entity 's potential for future cash flows. The ASU amends the rules on income statement expense disclosures and requires public business entities to disaggregate and disclose, in tabular format in the notes to financial statements, specified categories of expenses contained within certain income statement expense line items; to integrate certain amounts that were already required to be disclosed under current GAAP with the new disaggregation requirements and to qualitatively disclose descriptions of the amounts remaining that were not separately disaggregated. The ASU also requires public business entities to disclose the total amount of selling expenses and, in annual reporting periods, an entity 's definition of those selling expenses. This ASU does not change or remove the current disclosure requirements of expense line items on the face of the Consolidated Statements of Income.
The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments in this ASU should be applied either prospectively to Consolidated Financial Statements issued for reporting periods following the effective date, or retrospectively to any or all prior periods presented in the Consolidated Financial Statements.
The Company is evaluating the effects that the adoption of the ASU will have on its Consolidated Financial Statements disclosures.
Other recently issued ASUs required to be applied on or after December 31, 2025 have been evaluated by the Company and are not expected to have a significant impact on the Company 's Consolidated Financial Statements.
3 – Business acquisition
Iowa Northern Railway Company
On December 6, 2023, the Company acquired the shares of the Iowa Northern Railway Company (IANR), a Class III short-line railroad that owns and leases approximately 175 route miles in northeast Iowa that are connected to CN’s U.S. rail network. CN paid US$230 million ($312 million), including transaction costs to date. IANR serves upper Midwest agricultural and industrial markets covering many goods, including biofuels and grain. This transaction represents a meaningful opportunity to support the growth of local business by creating single-line service to North American destinations, while preserving access to existing carrier options.
The shares of IANR were deposited into an independent voting trust while the U.S Surface Transportation Board (STB) considered the Company 's application to acquire control of IANR. During the trust period, IANR continued to be operated under its current management and the Company could not exercise day-to-day control. As a result, the Company recorded its investment in IANR at its acquisition cost under the equity method of accounting.
On January 14, 2025, the STB issued a final decision approving CN’s application to acquire control of IANR, subject to certain conditions. The Company assumed control of IANR on March 1, 2025 (Control Date) and began consolidating IANR on that date, accounting for the acquisition as a business combination achieved in stages. The Company derecognized its previously held equity method investment in IANR of $320 million as of March 1, 2025 and remeasured the investment at its Control Date fair value of $344 million resulting in a net remeasurement gain of $24 million recorded in Other income in the Consolidated Statements of Income. The fair value of the previously held equity interest in IANR was determined through the use of a discounted cash flow approach, which incorporated the Company’s best estimates of various assumptions including, but not limited to, discount rates and terminal growth rates and multiples.
The Company 's Consolidated Balance Sheet includes the assets and liabilities of IANR as of the Control Date, and since that time, IANR’s results of operations have been included in the Company 's results of operations. The Company has not provided pro forma information relating to the pre-control date period as the acquisition was not material.
The following table summarizes the final purchase price allocation with the fair value at the Control Date of the previously held equity interest in IANR, as well as the amounts recognized for the identifiable assets acquired and liabilities assumed on the Control Date:
| (in millions) | March 1, 2025 | ||
| Consideration | |||
| Fair value of previously held equity method investment (1) | $ | 344 | |
| Recognized amounts of identifiable assets acquired and liabilities assumed (1) | |||
| Current assets | $ | 10 | |
| Properties | 426 | ||
| Other non-current assets | 10 | ||
| Current liabilities | (20 | ) | |
| Deferred income tax liabilities | (90 | ) | |
| Other non-current liabilities | (23 | ) | |
| Total identifiable net assets(2) | $ | 313 | |
| Goodwill(3) | $ | 31 |
| (1) | As at the Control Date, the Company 's fair value of the previously held equity interest in IANR and the related purchase price allocation was preliminary and subject to change over the measurement period, permitted to be up to one year from the Control Date. In the fourth quarter of 2025, based on updated information available to the Company, the fair value of net assets acquired was increased by $2 million to reflect changes to certain assets and liabilities which were insignificant, resulting in a decrease to Goodwill for the same amount. The Company’s fair value of the previously held equity interest in IANR and the purchase price allocation is now final. |
| (2) | Includes operating lease right-of-use assets and liabilities. There were no identifiable intangible assets. |
| (3) | The goodwill acquired through the business combination is mainly attributable to the premium of an established business operation. The goodwill is not deductible for tax purposes. |
The final fair values of Properties were determined using valuation techniques including the market approach and the cost approach. The significant assumptions used to determine the final fair value of Properties were mostly related to a selection of comparable assets and inflation.
4 – Subsequent event
Normal course issuer bid (NCIB)
On January 30, 2026, the Company announced that its Board of Directors had approved a new NCIB, which allows for the repurchase of up to 24.0 million common shares between February 4, 2026 and February 3, 2027.
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