CN announces new normal course issuer bid for share repurchase and 7% dividend increase
CN (NYSE: CNI) announced a new normal course issuer bid allowing the repurchase of up to 14 million common shares, equating to 2.36% of shares outstanding as of January 18, 2021. The bid runs from February 1, 2021, to January 31, 2022, reflecting confidence in generating free cash flow and continuing dividend growth. Additionally, a 7% increase in the quarterly dividend to C$0.6150 per share was approved, payable on March 31, 2021. The company previously repurchased nearly 2 million shares in its expiring bid, returning C$225 million to shareholders.
- Share repurchase of up to 14 million shares enhances shareholder value.
- 7% increase in quarterly dividend demonstrates financial strength and commitment to shareholder returns.
- Company shows confidence in generating free cash flow.
- None.
MONTREAL, Jan. 26, 2021 (GLOBE NEWSWIRE) -- 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 a seven per cent increase in the 2021 dividend on the Company's common shares outstanding.
The Bid permits CN to purchase, for cancellation, over a 12-month period up to 14 million common shares, representing 2.36 per cent of the 593,951,550 common shares issued and outstanding of the Company not held by insiders on January 18, 2021. On that date, 711,653,063 CN common shares were issued and outstanding.
The Bid – starting on February 1, 2021, and ending no later than January 31, 2022 – will be conducted through a combination of discretionary transactions and automatic repurchase plans at market prices prevailing at the time of purchase, through the facilities of the Toronto and New York stock exchanges, or alternative trading systems, if eligible, and will conform to their regulations. Purchases may also be conducted using derivative-based programs, accelerated share repurchase transactions, or other methods of acquiring shares, subject to any required regulatory approval and on such terms and at such times as shall be permitted by applicable laws.
Ghislain Houle, CN executive vice-president and chief financial officer, said: “We are confident in CN’s ability to generate free cash flow over the business cycle and we are pleased to announce that we will be resuming the use of surplus capital to repurchase Company shares in 2021, while maintaining our 25-year track record of dividend growth”.
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 332,893 common shares under the Bid.
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 January 2020 for the purchase of up to 16 million common shares expires on January 31, 2021. As at the close of trading on January 18, 2021, CN had repurchased 1,982,778 common shares at a weighted-average price of C
CN's Board of Directors also approved a first-quarter 2021 dividend on the Company's common shares outstanding. A quarterly dividend of sixty-one and a half cents (C
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 relating to potential purchases of common shares for cancellation under a normal course issuer bid. By their nature, forward-looking statements involve risks, uncertainties and assumptions, and are subject to the discretion of CN's Board of Directors in respect of the declaration of dividends. The Company 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.
Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and other factors which may cause the actual results or performance of the Company to be materially different from the outlook or any future results or performance 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 include, but are not limited to, the duration and effects of the COVID-19 pandemic, general economic and business conditions, particularly in the context of the COVID-19 pandemic; 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; and other risks detailed from time to time in reports filed by CN with securities regulators in Canada and the United States. Reference should 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.
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.
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. As the only railroad connecting Canada’s Eastern and Western coasts with the U.S. South through a 19,500 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 | Paul Butcher |
| Senior Manager | Vice-President |
| Media Relations | Investor Relations |
| (514) 399-7956 media@cn.ca | (514) 399-0052 investor.relations@cn.ca |
FAQ
What is the new normal course issuer bid approved by CN?
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