CN (CNI) announces new normal course issuer bid for share repurchase and 18% dividend increase

CN (TSX: CNR) (NYSE: CNI) announced today that its Board of Directors has approved the repurchase of its shares under a new normal course issuer bid (Bid) and approved an 18 per cent increase in the 2019 dividend on the Company's common shares outstanding.

The Bid permits CN to purchase, for cancellation, over a 12-month period up to 22 million common shares, representing 3.62 per cent of the 607,533,033 common shares issued and outstanding of the Company not held by insiders on Jan. 18, 2019. On that date, 726,568,390 CN common shares were issued and outstanding.

The Bid – starting on Feb. 1, 2019, and ending no later than Jan. 31, 2020 – will be conducted through a combination of discretionary transactions and automatic repurchase plans through the facilities of the Toronto and New York stock exchanges, or alternative trading systems, if eligible, and will conform to their regulations.

Ghislain Houle, CN executive vice-president and chief financial officer, said: “Supported by our strong ability to generate cash flow, we are investing significantly to support growth opportunities while continuing to reward our shareholders. We maintain our target of a 35% adjusted dividend payout ratio and we continue to return surplus cash through share repurchases.”

The decisions regarding the timing and size of future purchases of common shares under the Bid are subject to management’s discretion and are based on a variety of factors, including market conditions. The new Bid was approved by the Toronto Stock Exchange (TSX) today.

TSX rules permit CN to purchase daily, through TSX facilities, a maximum of 288,266 common shares under the Bid. Purchases under the Bid will be made by means of open market transactions.

The price paid by CN for its open market purchases of common shares will be the market price at the time of acquisition, plus brokerage fees.

CN believes that the repurchase of its shares represents an appropriate and beneficial use of the Company's funds.

CN's current normal course issuer bid announced in October 2018 for the purchase of up to 5.5 million common shares expires on Jan. 31, 2019. As at the close of trading on Jan. 28, 2019, CN has repurchased 3,911,447 common shares at a weighted-average price of C$108.73 per share, excluding brokerage fees, returning C$425 million to its shareholders. Purchases were made on the open market. CN will continue purchasing shares under this normal course issuer bid until Jan. 31, 2019.

The sum of the 5.5 million common shares sought for purchase and approved by TSX in October 2018, and the 22 million common shares sought for purchase under the Bid to commence on Feb. 1, 2019, falls within the maximum number of common shares that can be purchased pursuant to TSX rules on normal course issuer bids, that is 10% of the public float of the common shares or 5% of the issued and outstanding common shares, within any 12-month period.

CN's Board of Directors also approved a first-quarter 2019 dividend on the Company's common shares outstanding. A quarterly dividend of fifty-three and three-fourths cents (C$0.5375) per common share will be paid on March 29, 2019, to shareholders of record at the close of business on March 8, 2019.

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