# Canadian National Railway (CNR) — Financial Analysis

**Exchange:** NYSE  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-29  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/CNR/thesis · /stocks/CNR/memo

## Financial Snapshot

---
source: coverage-next-full
ticker: CNR
step: "04"
title: Financial Snapshot — 3-Year P&L Summary
created: 2026-05-29
---

### Step 04: Financial Snapshot

#### Income Statement Summary (3-Year)

All figures in USD millions except per-share data.

| Metric | FY2019 | FY2020 | FY2021 |
|--------|--------|--------|--------|
| **Revenue** | $4,577 | $4,546 | $5,330 |
| YoY Growth | — | (0.7%) | +17.2% |
| **Cost of Sales** | $3,721 | $3,619 | $4,137 |
| **Gross Profit** | $856 | $927 | $1,193 |
| Gross Margin | 18.7% | 20.4% | 22.4% |
| **SG&A Expense** | $551 | $513 | $570 |
| **Adjusted EBITDA** | ~$360 | ~$450 | ~$660 |
| Adj. EBITDA Margin | ~7.9% | ~9.9% | ~12.4% |
| **EBIT (Operating Income)** | ~$155 | ~$240 | ~$430 |
| EBIT Margin | ~3.4% | ~5.3% | ~8.1% |
| **Interest Expense (net)** | ~$(235) | ~$(215) | ~$(205) |
| **EBT (Pre-tax Income)** | ~$(80) | ~$25 | ~$225 |
| **Tax Expense (Benefit)** | ~$(15) | ~$(5) | ~$55 |
| **Net Income (GAAP)** | ~$(65) | ~$30 | ~$170 |
| Net Margin | NM | 0.7% | 3.2% |
| **Diluted EPS (GAAP)** | ~$(0.50) | ~$0.23 | ~$1.32 |
| **Adjusted EPS** | ~$0.40 | ~$0.95 | ~$2.20 |
| **Diluted Shares** | ~130M | ~130M | ~129M |

*Note: Figures derived from public filings. Adjusted EBITDA and Adjusted EPS exclude amortization of acquired intangibles (~$180-200M/yr from Ply Gem purchase price allocation), stock compensation, restructuring, and deal costs. GAAP net income was materially reduced by D&A from the large 2018 merger purchase price allocation.*

#### Revenue Bridge: FY2020 → FY2021

| Driver | Revenue Impact |
|--------|---------------|
| Volume (unit growth) | +~$400M |
| Price/Mix increases | +~$380M |
| **Total Change** | **+$784M (+17.2%)** |

FY2021 revenue growth was approximately evenly split between volume and price — a strong print driven by post-COVID housing boom and aggressive price pass-through of raw material inflation.

#### Gross Profit Trends

Gross margin expanded from 18.7% in FY2019 to 22.4% in FY2021 despite raw material inflation. This reflects:
1. **Operating leverage** on higher volumes
2. **Price increases outpacing cost inflation** (lag relationship)
3. **Commercial segment mix improvement** (IMP is higher-margin than standard metal buildings)
4. **Ongoing post-merger synergy capture**

The margin trajectory was viewed positively by analysts but raised questions about sustainability at cycle peak.

#### EBITDA Bridge Analysis

**FY2019 Adjusted EBITDA**: ~$360M (7.9% margin)
**FY2021 Adjusted EBITDA**: ~$660M (12.4% margin)

Key drivers of ~$300M EBITDA improvement:
- Volume growth contribution: ~$100M
- Price/mix contribution: ~$130M
- Synergy realization: ~$50M
- Operating efficiency: ~$20M

#### Interest Burden and Leverage

The post-merger debt load was CNR's most significant financial constraint:

| Metric | FY2019 | FY2020 | FY2021 |
|--------|--------|--------|--------|
| Total Debt | ~$2,950M | ~$2,800M | ~$2,650M |
| Cash | ~$120M | ~$210M | ~$250M |
| Net Debt | ~$2,830M | ~$2,590M | ~$2,400M |
| Net Debt / Adj. EBITDA | ~7.9x | ~5.8x | ~3.6x |
| Interest Coverage (EBITDA/Interest) | ~1.5x | ~2.1x | ~3.2x |

The leverage trajectory was strongly positive — from 7.9x in FY2019 (post-merger) to 3.6x by FY2021. De-leveraging was the central financial narrative of CNR's public life.

#### Non-GAAP Reconciliation Note

CNR reported both GAAP and Adjusted metrics. The difference was substantial:

**Key GAAP-to-Adjusted adjustments (FY2021)**:
- Add back: Amortization of acquired intangibles: ~$190M
- Add back: Stock-based compensation: ~$35M
- Add back: Restructuring and integration: ~$15M
- Add back: Deal-related costs: ~$8M
- **Total adjustment**: ~$248M

This means GAAP net income of ~$170M understated operating performance significantly. Adjusted earnings of ~$285M (on ~129M shares = ~$2.20 Adj. EPS) was the figure analysts focused on.

#### Partial Year FY2022 Performance

Through Q3 FY2022 (9 months ended October 1, 2022):

| Metric | Q1-Q3 FY2022 | Q1-Q3 FY2021 | YoY Change |
|--------|--------------|--------------|------------|
| Revenue | ~$4,210M | ~$3,730M | +12.7% |
| Adj. EBITDA | ~$480M | ~$480M | ~Flat |
| Adj. EBITDA Margin | ~11.4% | ~12.9% | -150 bps |

The flat EBITDA on growing revenue in FY2022 reflected significant raw material inflation headwinds — costs were rising faster than prices, compressing margins from their FY2021 peak. This margin compression was one factor in the stock's decline to CD&R's take-private price.

#### Profitability vs. Peers (FY2021)

| Company | Revenue | Adj. EBITDA Margin | Net Leverage |
|---------|---------|-------------------|-------------|
| **CNR** | $5.3B | 12.4% | 3.6x |
| Jeld-Wen (JELD) | $4.9B | ~12% | ~3.8x |
| Owens Corning (OC) | $8.5B | ~18% | ~1.5x |
| Masco (MAS) | $8.4B | ~20%+ | ~2x |
| LP Building Products | $4.1B | ~32% (cycle peak) | Net cash |
| James Hardie (JHX) | ~$3.7B | ~22% | ~2x |

CNR's EBITDA margins were broadly in line with Jeld-Wen but below the better-positioned building products players (OC, MAS), reflecting its high debt load, lower pricing power in vinyl vs. fiber cement, and still-in-progress post-merger integration.

#### Capital Expenditures

| Year | Capex | % of Revenue | Capex Type |
|------|-------|-------------|-----------|
| FY2019 | ~$100M | 2.2% | Maintenance + integration |
| FY2020 | ~$90M | 2.0% | Maintenance-heavy (COVID caution) |
| FY2021 | ~$115M | 2.2% | Maintenance + modest growth |

Capex was relatively modest as a % of revenue — CNR was harvesting its manufacturing footprint rather than making major facility investments. Depreciation exceeded capex, reflecting asset aging and intangible amortization from the merger.

#### Free Cash Flow

| Year | Adj. EBITDA | Capex | Cash Interest | Cash Taxes | Working Capital | Free Cash Flow |
|------|-------------|-------|--------------|-----------|-----------------|----------------|
| FY2019 | ~$360M | ~$100M | ~$220M | ~$10M | ~$(20M) | ~$10M |
| FY2020 | ~$450M | ~$90M | ~$205M | ~$5M | ~$(30M) | ~$120M |
| FY2021 | ~$660M | ~$115M | ~$195M | ~$70M | ~$(60M) | ~$220M |

FCF conversion improved dramatically through the period as EBITDA grew and interest costs declined. By FY2021, CNR was generating meaningful free cash flow — a key component of CD&R's take-private IRR calculation.

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/CNR/fundamental

## Navigation

- Overview: /stocks/CNR
- Financials (this page): /stocks/CNR/financials
- Thesis: /stocks/CNR/thesis
- Investment Memo: /stocks/CNR/memo
- Coverage universe: /stocks