CN has announced a significant development today, with its Board of Directors approving a 7% increase in the 2024 dividend on the Company’s outstanding common shares. In addition, the Board has given the green light for a new normal course issuer bid (Bid) that includes the repurchase of the company’s shares.
Under the approved Bid, CN has the authorization to buy back up to 32 million common shares over the next 12 months. This represents 5.63% of the total 568,002,080 common shares issued and outstanding by the Company not held by insiders as of January 18, 2024. On that date, the total issued and outstanding common shares were 642,832,885.
Ghislain Houle, Executive Vice-President and Chief Financial Officer of CN, commented on the decision, stating, “CN has continued to deliver good financial results and free cash flow despite challenging market conditions. Our performance and expectations support maintaining our uninterrupted growth in dividends since privatization. We are also announcing a new share repurchase program that is consistent with the announcement we made at our May investor day to gradually increase our leverage over time, subject to economic conditions.”
The Bid is scheduled to take place from February 1, 2024, to January 31, 2025. It will involve a combination of discretionary transactions and automatic repurchase plans at prevailing market prices. Transactions will be conducted through the facilities of the Toronto and New York stock exchanges or alternative trading systems in Canada and the United States. Additionally, purchases may be made using derivative-based programs, accelerated share repurchase transactions, or other methods, subject to regulatory approvals.
The decision-making process for the timing and size of future share purchases under the Bid will be at the discretion of CN’s management, taking into account various factors, including market conditions. The Toronto Stock Exchange (TSX) has approved the new Bid, with rules permitting CN to purchase a maximum of 263,790 common shares daily through TSX facilities.
CN emphasizes that the share repurchase is considered an appropriate and beneficial use of the Company’s funds. The current normal course issuer bid, announced in January 2023, will expire on January 31, 2024. As of January 18, 2024, CN had already repurchased 27,831,537 common shares at a weighted average price of C$156.25 per share, excluding brokerage fees, returning C$4,349 million to its shareholders.
In addition to the share repurchase, CN’s Board of Directors has approved a first-quarter 2024 dividend of eighty-four and a half cents (C$0.8450) per common share. This dividend is set to be paid on March 28, 2024, to shareholders of record as of March 7, 2024.
It’s important to note that the forward-looking statements in this news release are subject to risks and uncertainties, and CN cautions that actual results may differ materially from those expressed or implied. Factors such as economic conditions, industry competition, regulatory developments, and other risks outlined in CN’s reports filed with securities regulators may impact the Company’s performance.
CN states that forward-looking statements reflect information as of the date on which they are made, and the company assumes no obligation to update or revise them unless required by applicable securities laws. Any updates made should not be inferred as an indication of additional updates on related matters or forward-looking statements. Information on CN’s website is not incorporated by reference into this news release.
About CN
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 more than 300 million tons of natural resources, manufactured products, and finished goods throughout North America every year. CN’s network connects Canada’s Eastern and Western coasts with the U.S. South through an 18,800-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.