Canadian National Railway Company (CNI) Cash Flow Statement

Across the ten reported quarters, the OCF/NI ratio has mostly ranged between 1.0 and 1.8, which indicates that reported earnings are not inflated by non-cash revenue recognition. The weakest quarter, 2025Q1 at 1.00, still shows full conversion, and this pattern suggests the depreciation base of roughly $485M per quarter is doing much of the work in bridging the gap. Investors should monitor whether this depreciation-driven conversion remains sustainable if capital spending continues to outpace D&A.

The FCF margin swings appear driven less by operating performance and more by the timing of capital expenditures, which have ranged from roughly $440M to $1.2B per quarter. Because net margins have remained near 25% with far less volatility, the divergence suggests that FCF is the more useful gauge of underlying capital intensity. Warrants monitoring of whether the elevated capex cadence is a structural step-up or a timing effect.

The spikes above 25% in several quarters align with periods of heavier track and equipment spending, which is consistent with a 19,500-mile network requiring continuous maintenance. Capex has generally run near or below D&A on average, which suggests the network is not being aggressively expanded, though the lumpy quarterly profile limits predictability. Investors should treat the average rather than any single quarter when judging the maintenance burden.

Dividend payments have stayed nearly flat across all ten quarters, while buybacks and acquisitions have fluctuated widely, with the largest outflow near $1.1B in 2024Q2 and 2025Q3. This pattern suggests the dividend is treated as a fixed commitment funded from operating cash, with discretionary buybacks absorbing residual FCF. Management's willingness to fund sizable buybacks during periods of elevated capex may warrant closer review of capital allocation priorities.