Morning, ladies and gentlemen. Rudy, can you shut the door there? Train's supposed to leave on time. Good morning, ladies and gentlemen. My name is Robert Pace, and I'm the Chair of the Board of CN. [Foreign language] . CN is an iconic company, a proud company, a great company. This year is very special for CN. We are celebrating our 100th anniversary on June 6. We are proud of the unique role our company has played in nation building, connecting people and markets. We have, we have evolved from a collection of various railways into a leading transportation and supply chain company. From our beginnings in June 6, 1919, CN helped to stitch the country together. Our passenger service carried troops during wartime and immigrants to new horizons in peacetime.
Our deep history of innovation included CNR Radio, North America's first radio network, which later became CBC. CN also founded Trans-Canada Air Lines, which is now Air Canada. Over the past 100 years, including our privatization in 1995 and our expansion of our network down to New Orleans, CN has become an iconic brand, known for innovation and operational excellence. It has been our custom to hold our annual general meetings in cities across North America's network, and it's certainly a thrill to be celebrating this anniversary in Montréal, our home and our headquarters. It is a pleasure to be in a city, a region, and a province where we have such a dynamic relationship. Montréal is home to 3,000 active CN employees.
In 2018, CN invested $515 million to strengthen our rail network and support safety, efficiency, and long-term growth in Québec. In 2018 alone, we contributed $2.1 billion in local spending and invested $2.6 million in community organizations, ranging from hospitals, food banks, and universities. CN's roots reach back to the earliest days of Canadian railroading, when, in 1836, a group of Montréal businessmen opened Canada's first railway, the Champlain St. Lawrence Railroad. CN still operates this stretch of track to this day. The crews and trains working in and around Montréal are part of our network that spans Canada, Mid-America, from Chicago to New Orleans, and Mobile, Alabama. We transport freight traffic seamlessly over an almost 20,000 route mile network, reflecting more than $8 billion of strategic acquisitions since 1998.
Our operational and service excellence agenda has produced a range of innovative services for intermodal, merchandise, bulk commodity shipments, and we have become a true supply chain enabler. On behalf of CN's Board of Directors , I'm now pleased to call to order the annual meeting of the shareholders of Canadian National Railway Company. I'd like to welcome all the distinguished guests. We are very pleased to have with us today several former directors who we have honored as director emeritus in recognition of their extraordinary contributions to the CN Board of Directors. I'll ask them to stand and remain standing until everyone has been introduced, and that you hold your applause until the end. From New York, Michael Armellino. From Alberta, Hugh Bolton. Again, from Alberta, James Gray. From Ontario, the Honourable Ed Lumley. And from Ontario, Barb Ritchie, the wife of the late Ced Ritchie .
From Ontario, Ed Neufeld. Finally, we're very honored to have with us the chairman of the board and the CEO of CN, who led the privatization, David McLean and Paul Tellier, and they were the two driving forces that got us to where we are today. I also want their wives, who supported them through all this, Andrée and Brenda, to stand up. Thank you. Before we begin with the business of the meeting, I would ask Sean Finn, our Executive Vice President, Corporate Services, and Chief Legal Officer, to give a safety briefing for this meeting.
Bonjour, good morning. [Foreign language] procedures for the Windsor building. We are in the Windsor Room, has an alarm system with a sound system and a vocal message. If the alarm starts, you have to leave the room. We have to evacuate the premises, leave the rooms by through the doors on your right-hand side to proceed in the passage outside, and go over to the other street, Peel, and wait in the park on the other side of the street. Maybe look to your left, your right, to see the people around you, so that they find themselves also at the assembly point. Pertaining to the medical, there's Karen Scalzo. She is certified.
Karen, can you identify yourself? Thank you, Karen. And our friend and colleague, Steve Covey, our police chief for 911. Steve, can you do this, 911? Yeah. Thank you, that's right. Please, the French translation of is available on the website, cn.ca. [Foreign language] alarm system. If an evacuation order is given, I'd ask you to leave by the doors as you came in to your right. Proceed to the hallway to your right, across Peel Street carefully, onto the park, where we're gonna muster together across the street.
I'd ask that you look to your left, to your right, to make sure that the people who are with you also find their way across the street. In the event of a medical emergency, Constable Karen Scalzo, still there, is a qualified first aid medical responder, and Steve Covey, our friend and chief of police, has been designated to call 911 should an emergency arise. Just before I hand the meeting back over to the chairman, I want to say a few words, obviously, this morning. You know, we're very-- we're thinking of those affected by the flooding here in Québec, as well in Ontario and in New Brunswick.
I'm pleased to announce this morning that CN will be donating CAD 75,000 to the Red Cross, to help support those who may need some extra help during these difficult times. Merci beaucoup. Bonne journée.
Thank you, Sean. As Sean mentioned, every work assignment at CN begins with a safety briefing, and nothing is more important to us than creating a safe place to work. Safety isn't just a priority at CN, it's a core value. It's part of our DNA. The safety of the men and women who work for CN is of paramount importance to us. We devote significant effort and resources to ensuring a safe environment and culture in pursuit of our goal of being the safest railway in North America. The goal is to eliminate work-related accidents altogether. Through technology, employee education, and promoting a safety mindset throughout the company, we work diligently to improve our results each year.
CN's significant and ongoing investments in its training programs and in its training facilities in Winnipeg and Chicago are designed to strengthen CN's safety culture and prepare a new generation of safety-conscious railroaders. Despite our best efforts, however, it saddens me to report that one of our employees died in service since our last annual general meeting. Mr. Pierre-Luc Lévesque of Edmundston, New Brunswick, died on December fourth, 2018. This tragedy reminds us all that railroading can be an unforgiving industry, and how important safety is. I urge everyone to be highly vigilant of both the personal safety and protecting colleagues as we perform our duties. This is the best way we can honor the memory of our colleague. Please rise and join me in a moment of silence in his memory. Thank you.
I would now like to introduce the senior officers of CN who are present on the stage today. In the center is J.J. Ruest, President and Chief Executive Officer of the company. On J.J.'s right is Ghislain Houle, Executive Vice President and Chief Financial Officer of the company. On J.J.'s left is Sean Finn. I'll act as chair, as chair of the meeting, and Sean will act as secretary of the meeting. During the meeting, I will entertain questions relating to a specific motion after that motion has been moved and seconded, but before the vote on that motion takes place. If you have questions or motions, please use the floor microphones when addressing this meeting. There are two microphones in the room. Also, identify yourself and state whether you are a shareholder or a proxy holder. There will also be two short presentations.
J.J. will give the president's address, and Ghislain Houle will outline the highlights of CN's 2018 financial performance and our recent Q1 2019 results. After Ghislain's remarks, we will welcome any general questions. On behalf of the board of the company, we'd like to thank the shareholders who have submitted their proxies in advance of the meeting. Of course, only registered shareholders or their proxy holders are entitled to take an active part or vote at this meeting today. To move this meeting along, a number of shareholders have already agreed to move and second formal motions, and I will call upon them at the appropriate times. We'll conduct a ballot on the election of directors and the non-binding advisory resolution on the company's approach to executive compensation. I'll explain the procedure to be followed at the appropriate time.
Regarding the nomination of auditors, we'll proceed on the motion by a show of hands. The corporate secretary of the company has advised me that the notice calling this meeting and the accompanying information circular, form of proxy, and annual report, or notice thereof, were mailed starting on March 26, 2019, to holders of common shares at the close of business, March 8, 2019, the record date. A copy of the confirmation of mailing of such documents has been filed with me for inclusion with the minutes of this meeting. With your agreement, I'll appoint Mark Thompson and Pina Pacifico of Computershare Trust Company of Canada, the transfer agent for CN's common shares, to act as scrutineers. I've been advised by the scrutineers that based on the proxies received prior to the meeting and the shareholders and proxy holders attending this meeting, there is a quorum present.
I therefore declare that the meeting has been regularly called and properly constituted for the transaction of business. The next item of business is the submission of the financial statements of the company. The annual report of the company, which contains the consolidated financial statements of the company and its subsidiaries at December 31, 2018, together with the report of the auditors, management, discussion, and analysis, has been mailed to shareholders of the company who have requested it. Copies are also made available to you this morning in the hallway. There is no formal action to be taken today with regard to this item on the agenda. However, as I previously mentioned, Ghislain Houle, our Chief Financial Officer, will be delivering a report on the financial statements later this morning. We will now proceed with the election of directors.
According to a resolution of the board, 13 directors are to be elected. Information regarding nominees is set out in the Management Information Circular sent to shareholders. I would now ask Sean to read the names of those nominated for election as directors in the Management Information Circular .
Chairman, the following individuals are nominated for election as directors of the Canadian National Railway Company: Shauneen Bruder, Donald Carty, Donald Carty, Ambassador Gordon Giffin, Julie Godin, Edith Holiday, Maureen Kempston Darkes, The Honorable Denis Losier, The Honorable Kevin Lynch, James O’Connor, Robert Pace, Robert Phillips, Jean-Jacques Ruest, and Laura Stein.
I'll ask Sam Forgione to nominate the directors.
Good morning, Mr. Chairman. My name is Sam Forgione. I'm a shareholder of the company, and I'm pleased to nominate each of the persons named by the secretary of the meeting to be elected as directors, to hold office until the next annual meeting of shareholders, or until his or her successor is duly elected or appointed.
Thank you, Sam. Mike Archambault, will you second the nomination?
[Foreign language].
Hi, my name is Archambault. I'm a shareholder.
Are there any further nominations? Are there any further nominations? That's a good sign. As there are no further nominations, I will declare the nominations closed. Pursuant to the resolution adopted by the Board of Directors , 13 directors are to be elected and 13 eligible candidates have been nominated. I now direct that a ballot be taken on the motion to elect the directors. The names of the 13 nominees for election as directors are set out on the ballot. You should mark the ballot opposite the names of each of the persons whom you wish to vote and complete the form. Please sign and print your name in the places indicated at the bottom of the ballot, and indicate the total number of shares that you're entitled to vote as a registered shareholder or a proxy holder. The Board of Directors recommends, recommends voting for the election of directors.
Many shareholders present have already filed their proxies. These shareholders should not complete the ballot, since their shares will be voted in accordance with the instructions contained in the proxies granted to their proxy holders. Registered shareholders who have not sent in their proxy and proxy holders who are present have received the ballot at the registration desk. It is included in the agenda package handed to you. If you're entitled to vote today, but have not received the ballot, please raise your hand so that the scrutineers may provide you with a ballot. Please hold on to the ballot form. We will collect them after the ballot on the advisory vote on executive compensation. We'll now proceed with the appointment of the auditors.
I would now like to call upon Jim O’Connor, a member of our audit committee of the board, to present the motion to appoint the auditors of the company. Jim?
Thank you, Mr. Chairman. My name is James O’Connor. I'm a shareholder of the company. I move that KPMG LLP be appointed auditors of the company to hold office for the fiscal year 2019, or until the close of the next annual meeting of shareholders.
Thank you, Jim. Paul Butcher, would you please second the motion? [Foreign language] Merci, Paul. All those in favor of the motion? [Foreign language].
All those opposed? It's a good group. I declare that KPMG has been appointed as auditors of the company to hold office for the fiscal year 2019, or until the close of the next annual meeting of shareholders. The next item on the agenda is the consideration of the non-binding advisory resolution on the company's approach to executive compensation. The statement of executive compensation contained in the company's information circular, made available to shareholders, discloses such approach in detail. The results of the vote will not be binding on the board. However, the board will take into account the results of the vote, together with other pertinent information or comments from shareholders when considering the company's approach to executive compensation. I'll ask Janet Drysdale to present the motion.
Good morning, Mr. Chairman. My name is Janet Drysdale, and I'm a shareholder of the company. I move that the non-binding advisory resolution on executive compensation, as outlined on page 9 of the Management Information Circular , be approved.
Thank you, Janet. Jamie Lockwood, would you second the motion?
Mr. Chairman, my name is Jamie Lockwood. I'm a shareholder of the company, and I second the motion.
Thank you, Jamie. I direct that a ballot be taken on the motion to adopt a non-binding advisory resolution on the company's approach to executive compensation. You should sign and print your name in the places indicated at the bottom of the ballot. Please indicate the total number of shares that you are entitled to vote as a registered shareholder and/or proxy holder. You are asked to either vote for or against the motion. The Board of Directors recommends voting for the motion. When your ballot form is completed, please hand it together with the other ballots to the nearest attendant. Others? Any others, just raise your hand. Okay, I therefore declare the poll closed.
Will the scrutineers please finish collecting all the ballots, count the votes, and report back to me. We do not have any other business to bring before the meeting. While the scrutineers are computing the ballots, we'll now move on to the next item, our President and CEO's presentation. On behalf of CN's Board of Directors , I'd like to express my appreciation for the ongoing support of our shareholders. In 2018, CN returned $3.3 billion to shareholders in the form of dividends and share repurchases. I'm proud that CN's dividend has increased on average by 16% every year since our IPO in 1995. 2018 was a notable year for CN on a number of fronts, and challenging in others, especially in terms of capacity and volume.
Under J.J.'s leadership, CN's well-earned reputation for operational and service excellence has returned to historic levels, and volumes continue to grow. The company has delivered another solid financial performance in 2018. As a result, the board was pleased to approve an 18% increase in our annual dividend, the 23rd consecutive annual increase for the company. The board is proud of CN's recovery and the long track record of outstanding performance. J.J. and CN's senior leadership team are well prepared to bring CN's agenda of supply chain innovation, as well as operational service excellence to the next level. It is with great pleasure that I now call upon the President and Chief Executive Officer, J.J., to address shareholders about our substantial 2018 successes and capacity expansion, to talk about the next steps in CN's remarkable transformational journey.
Thank you, Mr. Chairman. Merci, Robert. [Foreign language] today, pertaining to the 24th general meeting as a company that is in the stock market. The trains and the transported immigrants in a new life. Our network for transportation opened new markets in the West, communities and also North communities. All along our history, CN answers to the definition of a durable company, but our engagement towards the development is over this definition. Our strategic definition of pertaining to durable development for contribution to build a better future.
Philosophy extends to all aspects of the business, from safety in the field, to integrity in the boardroom, from enabling stronger communities, to minimizing our environmental footprint. It's certainly a thrill for me to be speaking to you here in Montréal, our home, our headquarters, for the last 100 years. From our beautiful city, we serve many customers, large and small, new and longstanding, like Rio Tinto Alcan, a global leader in aluminum, Ray-Mont Logistics, an international operator in the container export supply chain, or Olymel, a major Canadian protein exporter, using our cold supply chain services. CN also served the Port of Montréal, the second largest container port of the country, and a partners in CN for a long, long time. Comme mentionné par Monsieur Robert Pace, almost 3,000 people of, for CN work here in Montréal and whereabouts.
At the beginning of this year, CN was recognized as one of the best employer in Montreal, and for the third consecutive year, for the third consecutive year, recognized in Canada pertaining to diversity. I am quite proud of our engagement for the development of our personnel and our implication in the community. CN's success was always attributable to our people. In pertaining to the world, the commercial context to us today, it is important for us that more than ever, we invest in our talent to have and to go forward, to to have more action. A winning team of talent is one of my main priorities. Developing our top talent in ways that bring the greatest value to CN and to our shareholders.
We're fortunate to have highly experienced team members, highly experienced railroaders, that are working cohesively as one team. We know that the industry, our savvy, and our supply chain expertise is something that we can build on over many years. And many customers learning visits around the world, this makes us smarter as to how to go about the market. This underscores our practice of investing in our in-house talent so that our people know their future is here at CN. In fact, we have quite a number of men and women who are second- and third-generation employees, and we're very proud of that.
We are also hiring, hiring from quite a numbers of other industries and working with supply chain experts from here and abroad to gain a diversity of perspective and more quickly define, you know, a new frontier of the art of the possible for the rail industry. Ghislain nous parlera des champs, l'industrie du ferroviaire. Ghislain will talk to us in a few minutes. As a lot of you know, at the beginning of 2018, the CN had a challenge pertaining to clients and capacity for the network. We put investments for the infrastructures and our energetic response. Abraham and team gave us exceptional elasticity. Notwithstanding a first quarter that was not too good, the performance for the CN got better during the last 9 months of 2018.
The volume that is transported in tons and miles, commercial ton-miles, increased by 5%. The operating revenue increased by 10% to reach $14.3 billion, and the earnings per share, the diluted and adjusted, augmented by 10% to situate itself at $5.50. Another record again. In the last 100 years, we're a witness of the IPO. That was the best in the history of Canada for Canadians, the one on CN in 1995. The expansion of CN became an American giant, and in emblematic with shareholders, Canadian, American, European, synonym for innovation, excellence in operations and the supply chain, another digitizing operation to reduce costs and expanding our rail revenue to organic and inorganic growth. There's nothing more important to me personally than safety.
In my view, it is a key to be an outstanding railroading company. CN has a wide range of initiatives to enhance our strong safety culture and ensure our people have the necessary training and tools to work safely. Our two CN training learning centers, training learning campuses, have trained over 10,000 new hires, experienced railroaders, and customers over the course of 2018. What an achievement! We also continue our successful Looking Out for Each Other programs, with each team member looking after one another, to be vigilant about one another's safety, and to speak up when there's something unsafe that needs to be addressed. I also want to recognize the work of over 100 Joint Union Management Health and Safety Committees that are actively working to reduce injuries and accidents.
At this point, I would like to draw your attention to a short video which highlights some of our achievements in 2018.
2018, a year of building for the future and deepening commitment to core values. On the threshold of our second century, CN's board, team, investors, and partners can be proud. We delivered on the promises of 2017 with growth, record capital investments, and the largest number of infrastructure projects in our 100-year history. We welcome new leadership with a vision for the future, and our team grew, not only in number, but with a focus on talent and development. In 2018, we leveraged technology, training, and community engagement to help reach our goal of being North America's safest railway. We expanded and rejuvenated our fleet with state-of-the-art equipment and invested to better serve our customers in natural resources sectors and meet the growing demands of Canadian grain producers.
CN is proud to help move the continent's food from farm to table and beyond. Our 2018 grain plan was the product of extensive consultation with key stakeholders and reflects their valuable feedback. By the end of the year, our grain movements were on a record-setting pace. 2018 was a banner year for CN and our port partners, and we continue to invest in the temperature-controlled segment to handle growth and develop new markets. CN continues to be recognized for our sustainability and climate action efforts. We are committed to minimizing our impact on the ecosystems we touch. Since 2012, CN has become the leading private non-forestry tree planter in Canada. Our network passes through or is adjacent to 200 First Nations territories. In 2018, we were recognized for working closely with Aboriginal communities and businesses.
We continue to put diversity and inclusiveness front and center in our strategy to attract and retain the best people. 2019 marks CN's one hundredth anniversary, and we've been preparing something special, a touring celebration of the people, places, and events that have made us what we are. Together, we will take advantage of our strengths and use our achievements as a springboard to capitalize on the opportunities ahead.
Yes, now on board. Yeah, extremely prepared. The contribution of all 25,000 employees. That's what people do, and I'm hoping that you appreciate the effort of all the 25,000 employees of CN. As you can see from the video, we're leveraging recent advances in technology to achieve our goal of continuous improvement in safety. Several initiatives are also key to our efforts. First, we're investing in cutting-edge inspection technologies for our trains. Our new automated inspection portals , because featuring high-definition cameras with infrared lighting that capture a 260-degree view of the train as it travels to the portal. These real-time inspections will then assist to identify preventive maintenance. The first 4 portals are currently in operation, namely in Winnipeg, and 3 more will be installed in 2019, namely in Memphis.
This year was also planned to build 5 autonomous track inspection rail cars that will run on a network, and then next year we're going to be building another 3. Third, we're providing mobile devices to all of our 9,000 crews who work on our trains, as well as mobile devices for repair crews, who fix trains. And we are implementing smart network solutions to digitize operations, to be able to better plan for activities and enhance safety on our network. As they ramp up during the year to come, these new systems will improve inspection quality, provide rich data analytics, generate productive model, and drive capacity and safety. There's no doubt in my mind, technology has an important role to play in the rail industry's future, especially in CN, and CN wants to be a pioneer in making that happen.
In regards to top line revenue growth, we see long-term good potential for organic growth in Canada and United States, and for the global trade via our three coasts. Let me expand on a few opportunities, for example, in United States. Illinois-based internal coal shipments to the Gulf Coast remain strong following a good, good year, 2018. Steady growth in U.S. housing market, which is driving volume for lumber, but also import containers into the continent. Several expanding petrochemical plants in the U.S. Gulf, namely Louisiana, are expected to add significant incremental capacities in the coming years. We are also broadening our range of intermodal services in the U.S. by joining the EMP Joint Container Pool. This is the largest interline service of 53-foot containers, and it would help us provide continental-wide supply chain solution for the movement of consumer goods.
To increase the fluidity of our network to handle this growing volume, we're undertaking the largest infrastructure program in CN history, including adding new locomotives and segment of double track. For example, we're nearly doubling - we're doubling near Ranier, Minnesota, the border crossing facilities on the main line between Winnipeg and Chicago. We're also implementing live lift operation at Port Huron, Michigan, border crossing. Live lift operation minimize customs rejection and speed up the fluidity of the Canadian borders in both directions.
Now, again, we're gonna put our. We bought 1,000 wagons, grain, 1,300 of forest products, 1,400 containers for products of what is to be consumed. And we also have played a major part, we received of this material and the delivery, which will be finished in 2020. Over the last year, we also invested in a record $3.5 billion in our program of expenses for immobilization. This year, we also plan to invest $3.9 million. In other words, for each dollar that has been gained by CN, roughly 25 cents will actually be reinvested in the company, and we could actually see something realize on that growth internally and our programs in terms of security. And the security for our employees and to communicate, which in the world.
Our partners also invested additionally to that, on the farms, on the agriculture, all invested to actually bring a larger, on the harvest, being more efficient. The ones that are exploring the silos, modernizing the installations will also be a growth in that exportation. And actually, 80% of the silos in the construction, in the cereal, the grain silos, have been actually enlarged and have been done on the network of CN. The results, we will actually bring forward the record volumes, which will bring forward in the Canadian grain market.
Make the reinvestment, investment in the ports. In 2018, the Port of Prince Rupert and DP World celebrated historic milestone, handling over 1 million TEU for the first time in a calendar year. This remarkable performance was due to more international ocean shipping lines adopting the Rupert Transcontinental Gateway. Also, to companies like Ray-Mont Logistics, establishing locally new container grain export operations to balance the load of these ships, and to CN unmatched commercial development activities in Asia, in a number of countries and large cities. Prince Rupert is the fastest growing continental gateway on the West Coast, and we expect the pace to continue for several more reasons. For example, there is 2 new steel coking coal mines that have restarted operations last October, which are using the Rupert gateway.
There's also a new thermal coal mine that will be starting this month of May, that's going to be using, mostly the Prince Rupert gateway. And our first Alberta and BC propane export terminal, AltaGas, is also opening this spring, exporting Canadian gas, Canadian propane overseas and getting a better value for our natural resource. Sustainable wood pellet also exports is taking place over Prince Rupert and Vancouver to countries who are making clean electricities, namely Japan and UK. Almost every port that we serve are planning major expansion over the next few years. The Port of Montréal, Port of Vancouver, the Port of Prince Rupert, Port of Québec City, Halifax, Mobile, Alabama, et cetera. They all diligently working to secure permits, securing financing, and securing private investors to extend import/export trades.
We just signed an agreement with the Vancouver Fraser Port Authority and the Canadian government to double track a 4-kilometer section of rail that links the container terminal on the South Coast of Vancouver to our national rail network.
By building the second track inside the city of Vancouver, CN will be able to better flow the traffic in and out of the Port of Vancouver, and enabling, and especially important, enabling the expansion of Centerm and Vanterm container terminal in Vancouver. Our tradition of inorganic growth acquisition also continue with the recent acquisition of TransX, one of Canada's largest intermodal transportation company, which will allow us to expand our skills in temperature control supply chains. We're keeping a close eye on additional acquisition opportunities with a strong focus on services that feed the rail network, that is, that brings volume to our existing core network, building the existing partnerships, and that extend our commercial and physical reach further. Wayne Gretzky once said, "You miss 100% of the shots you never take.
You miss 100% of the shots you never take." Our team of talented and experienced railroaders at CN are ready to grab the opportunities as they present themselves to meet the growing needs, needs of the North American economy. The CN is not afraid, and is a company that has a rich history, that has a promising future. We are positioned to be a leader for the security, innovation, growth for the next 100 years. Merci. Thank you. Thank you for your presence today.
Thank you, J.J. I'll now call on Ghislain Houle, CN's Executive Vice President and Chief Financial Officer, to discuss CN's 2018 financial performance and our first quarter of this year.
Thank you, Mr. Chairman. I would also like to thank shareholders joining us this morning here in Montréal and via webcast. It is my pleasure to be here today to present my report. I would like to thank our shareholders that are here with us through web and here present. It is a pleasure for me today to be here to present you my report.
He has just reviewed with you our strategic agenda of growing through organic and inorganic opportunities, developing our top talent into an even stronger team, and leveraging technology, all supported by our strong operational discipline and unwavering commitment to safety. Our strategic agenda is built on a track record of consistent financial performance. CN has grown its adjusted earnings per share at a compound annual rate of 10% over the last 5 years. For 2018, reported earnings per share decreased 19% to $5.87. Excluding items that affect the comparability of financial results, the impact of non-core asset sales, provision for workforce reductions, and the effect of changes to U.S. tax legislation, adjusted earnings per share grew 10% compared to 2017.
During the first quarter of 2018, we faced operating challenges that impacted our customer service and our financial performance. Under J.J.'s leadership, we put in place a resource plan to increase capacity and improve our resiliency. The plan included $400 million of track capacity investments, primarily in Western Canada, a significant increase in operating crews, and the addition of new locomotives and rail cars. Through these actions and the hard work of CN's railroaders that pulled together as one team to restore our operations and service to our customers, we produced adjusted earnings per share growth of 17% over the last nine months of the year versus the same period in 2017. An impressive turnaround. I will now briefly comment on the key drivers that underpin this performance.
Revenues were slightly above $14.3 billion, almost $1.3 billion higher than 2017, with all of that growth generated during the last three quarters of the year. Volume, measured in terms of revenue ton miles, grew 5%, mainly driven by petroleum products, coal, and Canadian grain, which was above the industry average. CN generated operating income of close to $5.5 billion in 2018, an increase of 5% as a result of freight rate increases, higher applicable fuel surcharge rates, and higher volumes, partly offset by higher fuel prices and higher costs from increased volumes. 2018, operating expenses increased by 13%, mainly due to higher fuel prices, higher costs as a result of increased volumes, and operating performance below 2017 levels.
Our reported operating ratio was 61.6%. Adjusting for a provision for workforce reduction, our operating ratio was 61.5%, up 170 basis points versus 2017, largely due to challenging operating conditions in the first quarter of 2018. In 2018, free cash flow was slightly above $2.3 billion, excluding the benefit of non-asset sales, non-core asset sales. Strong free cash flow generation is critical for CN, as it allows us to repay debt obligations, pay dividends, repurchase shares, seize inorganic growth opportunities, and position ourselves for the long haul. The rail industry is one of the most capital-intensive industries in North America, with railways spending billions of private dollars every year on the infrastructure we own, operate, maintain, and expand.
In 2018, CN reinvested a record $3.5 billion on capital programs and included record investments in capacity in order to accommodate continued growth at low incremental costs. Over the last 5 years, the company has invested approximately $14 billion that have helped us deliver our strategic goals and maintain our industry leadership. Over half that amount is related to track infrastructure, including the replacement of rail and ties and maintenance of bridges consistent with our commitment to safety. While the rail industry is capital intensive, our balance sheet remains strong, thanks to our steady cash flow generation and a disciplined approach to capital allocation. Our single-A investment-grade credit rating means that we have continuous access to low-cost sources of funds to reinvest back to the business and return cash to shareholders. Our capital allocation priorities have been consistent over many years.
First priority is reinvestment in the business, which I spoke about a few minutes ago. Next, we return capital to shareholders in the form of both dividends and share repurchases. Our dividend per share has grown every year since the company was privatized in 1995 at an average rate of 16% per year. Our track record continues into 2019, with our Board of Directors approval of an 18% increase in our dividend, making it our 23rd consecutive annual increase. We continue to target a 35% adjusted dividend payout ratio. Our share repurchases also have been steady, with cumulative purchases of over $9 billion in the last five years. In 2018, the company repurchased $2 billion worth of stock.
Our current program, which runs until January 2020, provides for the potential repurchase of up to 22 million shares, and we have allocated $1.7 billion to support it. On a combined basis, we have returned nearly $15 billion to shareholders in the last five years. Our track record in delivering on our strategic goals has produced solid financial results year- after- year and has translated into significant stock price appreciation. Over the last five years, adjusting for the stock splits and adding the reinvestment of dividends, the cumulative total return on CN stock was 81% in Canadian dollar value. By comparison, over the same period, the TSX increased by 22% and the S&P 500 increased by 50%. Yesterday, we reported our first quarter 2019 financial results.
Despite extreme cold weather conditions across large parts of our network in February and March, we delivered solid results. Volume growth in terms of revenue ton miles was 3% compared to last year, and diluted EPS came in at $1.08, an increase of 8% over the same period last year. Excluding the charge related to the replacement of our Positive Train Control back office systems, our adjusted diluted EPS was up 17% versus last year. The investment in capacity, people, and equipment we made during 2018 helped us perform well in January under normal winter conditions, and also enabled us to recover more quickly from the extreme cold temperatures throughout February and early March. In 2019, we are planning to invest $3.9 billion, including incremental capacity investments, to provide excellent service and enable continued growth at low incremental costs.
The major components of this capital budget include the acquisition of 140 locomotives, of which we have received 63 units so far, with another 52 expected before the end of the second quarter, and investments to increase track capacity, largely in Western Canada. Our capital plan also includes our program for basic track and rail infrastructure and investments for the continued implementation of Positive Train Control in the United States. Although there are signs of slower growth, we continue to see a broadly positive economic backdrop in North America, and consumer spending remains healthy. Given that, and despite the weather-related challenges that impacted volumes in the first quarter, we remain confident to deliver high single-digit volume growth in terms of RTM for the full year versus 2018 in a favorable pricing environment.
We are therefore reaffirming our guidance of Adjusted EPS growth in the range, in the low double-digit range versus 2018 adjusted diluted EPS of $5.50. We are still assuming the Canadian to US dollar exchange rate to be approximately 0.75, while the fuel prices are now in the range of $60-$65 per barrel for WTI, versus our previous assumptions of $50-$55 per barrel. We remain committed to the pillars of our strategic agenda that J.J. laid out, and we continue to manage the business to deliver sustainable value today and for the long term. Ladies and gentlemen, thank you for your attention.
Thank you, Ghislain. I now have received the report of the scrutineers. According to the proxies received and the ballots cast, our directors received on average 96% approval. I therefore declare that the 13 directors' nominees set out in the Management Information Circular have been duly elected as directors of the company to hold office until the next annual meeting of shareholders or until their successors are duly elected or appointed. I also declare that the non-binding advisory Say on Pay resolution on the company's approach to executive compensation has been approved by 97% of the holders of shares represented in person or by proxy at this meeting. I would now like to present the members of our Board of Directors and congratulate them on their election to the board.
They are a talented group from all over North America who make every effort to bring value to shareholders of this company. I'll ask each of them seated before you to rise and face the audience and remain standing until all of them have been introduced. I would ask you to hold your applause until they've all been introduced. From Ontario, Shauneen Bruder. From Georgia, Ambassador Gordon Giffin. From Québec, Julie Godin. From Florida, Edith Holiday. From Ontario, Maureen Kempston Darkes. From New Brunswick, and I might add, a grandfather for the first time, the Honorable Denis Losier. The Honorable Kevin Lynch from Ontario. From Florida, James O’Connor. From British Columbia, Robert Phillips. Your homegrown J.J. from Montréal. And from California, Laura Stein. And Don Carty couldn't be with us today. He had a recent surgery on his ankle, but I know he's listening.
These are your directors, and my name is Robert Pace, Chair of the Board. Thank you, ladies and gentlemen. As I mentioned, CN will celebrate its 100th anniversary on June 6. As part of the celebrations, I'm pleased to show you this video highlighting our moving celebrations that will be taking place over our network over the next year to mark 100 years in operation.
Let's celebrate. Because for 100 years, we have been connecting people, communities, business, and technology. We became one of the world's leading railways, linking the farthest reaches of our continent to the rest of the world, conquering vast spaces and unforgiving conditions, and building up a proud land. Along the way, we welcomed new citizens, educated young minds, and provided opportunities to people from all walks of life in an increasing number of fields. For 100 years, we have shaped the landscape of our continent and improved the lives of its people. And this is how we're going to celebrate: with a specially designed moving celebration that will travel Canada and the U.S. Delivering entertainment, information, and inspiration, spreading the word to audiences of all ages, and creating unforgettable moments and experiences that will spread our incredible story of accomplishment.
We're not just doing it to celebrate the past. We're doing it because CN matters more today than it ever has and will shape the world for 100 years to come. Because every day, with safety as our core value, we are connecting power, communications, and data to increase security and efficiency, transporting more of what North Americans use to build, work, play, and to dream, to more places than ever before. We're CN. We're 100 years old. As the world moves into a future filled with undreamed-of possibilities, we're leading the way, and that's worth celebrating.
As we have now completed all of the business to come before this meeting, I'll entertain a motion to conclude the formal part of this meeting. Michael Farkouh, would you kindly introduce a motion to that effect?
Mr. Chairman, my name is Michael Farkouh, and I'm a shareholder of the company, and I move that the formal part of this meeting be concluded.
Thank you, Mike. Fiona Murray, will you second the motion?
Good morning, Mr. Chairman. My name is Fiona Murray. I am a shareholder of the company, and I second the motion.
Thank you, Fiona. All those in favor, raise your hand I declare the motion carried, and this meeting is closed. We now have time for general questions. We invite any shareholder or proxy holder of the company who has a question to come forward and use the floor microphones. In the interest of time and fairness to everyone who wishes to ask the questions, I ask you to restrict your questions to the matters relevant to the business of the company. Prior to asking your question, please state your name and whether you are a shareholder or a proxy holder of the company. Microphone one.
Good morning, monsieur. Good morning. Congratulations for an exceptional performance. As a Canadian, I am very proud of CN. I'm Michel Servant . My wife is a shareholder. I have two questions. The first one, I saw in the media that the Alberta government decided to buy 1,000 cars to transport cereals. I didn't understand why a government orders cars, while you're the transporter?
Take that question.
So we could talk a little bit about our decisions. He said that we bought 1,000 cars, modern cars, to transport cereals for export. We also bought cars to transport wood, paper, pulp paper, and steel, and we have no car transporting oil. Oil cars for oil are always furnished by the client. So pertaining to the decision of the Alberta government to buy and rent cars, it's not for me to decide or talk in their name. But the way it is worked in transportation of oil products, the client has to take the decision or to rent or buy or not to do so for those equipments. I understand better, thank you.
My second question is, so congrats for the consultation, votes for the compensation on the, on the board, and I was asking myself, I know that the firm does for the comparing the different, railroad companies to determine a fair, compensation. With, Hunter Harrison, the story of it, that was recruited from your competitor to go on the, U.S. side. We offered him $ 78 million for three years, so 300 million for three years. How can we exclude this, data in the, review for compensation, that will be used eventually? I'm not the one to comment on comp i t's the, the board that does that. All I could say is that I'm quite satisfied of the way that the council, the board compensates the CN people, including myself.
I understand that you are, so I would be as well. No, what I mean is that the firm that drives this research, if it includes compensation of the last Hunter Harrison, it brings an important distortion. I understand you should be well compensated, you do an excellent work, but there's an element there that comes into play. Yes. As I said, it is not for me to determine how I'm compensated. I work on, I have employees under me, and they obtain a competitive salary, and at the same time, they have a performance pertaining to what they're asked of them. As a president, I'm not the one to comment for our employees. I'm not.
I will not repeat it, but I tell myself, pertaining to the board, there's a sensitivity to this information since it brings something false to the portrait of people compensation in the railroad. Jacques, I understand you have to realize that when a board goes over compensation, the president, the representative of other railroads, you take into account, but it's not an average, it's people. I was there for some time, I can make ensure you that there is a wide gap of compensation is not taken into account by the board. Mike? Yes. Michel Gauthier, a shareholder. I have two short questions. The operating ratio is deteriorated three years in a row. What do we expect for the next years? You are talking probably about the operating ratio, the operating ratio? Yes. Yes.
So we have to start with an objective, middle-term, objective. When we look at the difficulties that we had pertaining to services and capacities, the last winter of last year, it is evident that we are not necessarily equipped, pertaining to employees and the source, to, so that the economy moves, so with us. So we made sure that we, rewarded our shareholders, so to make sure that the employees can move and produce the work needed of them. The winter operations are very hard. We have a role in the economy towards Canada. CN is the biggest railroad company. We are way bigger, that's much smaller. We are, have to be able to, be able to move the economy, whether the economy is strong or is slowing down.
Either we have to operate in difficult conditions in winter, easier conditions in the summer. So definitely, last year, we added equipment, employees to be able to go into the 2019 winter in better condition than last year. And you remember that last year, the farmers in the Western Canada and the wood industry didn't have the services that they needed. So we have to take the operating ratio in this optic. We are running a marathon with the industry, where our clients, with the Canadian and North American economy. And I am confident that we'll have an operating ratio that is quite competitive for our competitors. It would be a mistake to have a lower ratio for each quarterly result. For 10-20 years, we sacrifice our clients if we do so.
My second question is, I mean, the trackage rights that increase, what do you—what will you do to so the situation changes? All the KPIs pertaining to the schedule and loading have improved. When you look at the last few weeks, we have had 7 very difficult weeks during the winter, from mid-January, end of February, where the weather, the temperature of our network, from Thunder Bay to east of the Rockies, we always, it was the temperatures at that point, -35 degrees Celsius, -40 degrees Celsius. So at this temperature, it's not possible to operate as easily at the same cost than summer. What happens for sure, that our trains are shorter, our runs are more congested.
But since March, and you look at our KPIs in April, that are available on our website on a regular basis, I think each week, you will see that the number of cars diminished a lot, a lot in the yards. Also, the tonnage by train was improved. Velocity of the cars was improved. It reflects that we have resources to operate, and also conditions are now favorable to, for our workers.
Good morning. My name is Irene Kwan. I'm a shareholder of the company. My question is: What is the, what is the situation with the Western Grain movement now?
On the Western Grain , we're doing extremely well. In fact, we're extremely proud of, you know, how much, how well we're doing in Western Grain , take into account the winter we've had this year. But probably the most telling statistics I could give you is that, basically, as of today, or as of late last week, we take the call up on every Saturday night of every week. We are 1.9 million metric ton ahead of last year, at the same time for the crop year. So our crop year goes from August 1 to July 31 of every year, and at this point in time, we've moved 1.9 million metric ton more than last year at the same time. So obviously, we came through for the Canadian farmer, for the Canadian grain industry, for the Canadian export.
I'm extremely proud of Mike's teams and what they've done on Canadian grain, and how we were even able to pull through fairly successfully relative to the past seven weeks of very cold temperature.
Thank you.
President, my question is the following for the management team. CN recently announced a record investment program in this investment capital program. Could you please elaborate where this actually takes place, and for the future also?
Yes, of course. The capital program this year, like last year, is very important for us. It actually focused on long term. It focused on growth. It, it focused on efficiency, on productivity. Also focused, to see if that network is able to perform under certain stresses. It could be on, periods which are very difficult, for example, of the, you know, for the flowing of the water in the waters. For to do this, majorly and principally, actually, the growth is very, very strong in western Canada. We're talking about Chicago, all the way to Vancouver, from Toronto to Rupert.
We actually are putting infrastructures to have more trains on our network, and that means these are, supplementary, railways. So another train could o r there are sections with double, double, tracks, triple, triple trains going on. These are one of the important elements of this investment capital. Second element is on the locomotives. They are new, first of all. Their environmental performance is superior to the other ones of the locomotives we have. And finally, the security aspect. We spoke about that a little earlier. We talked about the portal, that they be in the measure to be in the Winnipeg. We talked about the wagon, that we put equipment to actually inspect the, in an automated way, [per se] , the track.
So this is a more secure network, and it permits us to actually keep a more preventive maintenance going. So these are the three main areas, which we want to invest, and more often, what we call the principal or the major lines, which have been drawn, and, Chicago towards the west and toward, and Toronto going towards the west also. These are the major, major lines we're looking at.
From Toronto, CN Rail shareholder from Toronto, Ontario. My question is, how do you see the impact of the new North American Trade Agreement on your operations?
I'm a free trader by nature. Before I joined CN, I used to work for a chemical company, CIL, Imperial Chemical, and we were doing a lot of trade with a lot of many continents. I think that the North South Trade is a natural trade, just for example, proximity. I think free trade, not only with United States, but also with Europe, on the CETA, with Asia, with China, these are extremely key toward the future of what, as to why Canada is what it is and as well to our future. I'm optimistic that these agreement eventually all get resolved, that you know, the logic will prevail, that the countries with who we trade benefit as much as us, as about, you know, creating economic wealth.
Free trade or any trade agreement with United States, Europe, Asia, is very much for what CN is promoting and enabling as well.
Thank you.
At the microphone, so we'll call the meeting to a close. Thank you, J.J., and we'll gather and have a discussion outside. Thank you.