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CN transporting record levels of Canadian grain

Grain shipments exceed those CN promised Ottawa prior to federal government’s order-in-council stipulating minimum volumes

MONTREAL, May 28, 2014 — CN (TSX: CNR) (NYSE: CNI) said today its transportation of Western Canadian grain in the 2013-2014 crop year has now surpassed its prior historical record and exceeds what it promised the Canadian government in mid-February, a full month before the government’s order-in-council took effect requiring railways to move specific volumes.

CN’s hopper car deliveries to Western Canadian grain elevators in May are expected to average 5,500 carloads per week — a full 50 per cent more than the eight-year historical average, and 38 per cent more than the best-May ever.

Claude Mongeau, president and chief executive of CN, said: “I wrote to Agriculture Minister Gerry Ritz in February when emotions started to boil in the midst of the brutal polar vortex that hobbled the operations of all railroads. This was a month before Ottawa’s order-in-council was announced, and I promised the minister that CN would move 4,500 carloads of grain per week as soon as extreme cold weather abated, rising to 5,500 cars per week after the Port of Thunder Bay opened for business.

“We have done exactly what we promised, without the need for regulatory intervention. In fact, the strength of our grain transportation performance is unprecedented. With our rapid rebound since March, and our solid performance last fall before winter took a toll on operations, we are on course to break all records for Canadian grain. Crop year-to-date, CN’s grain volumes are four per cent better than its previous best and 13 per cent above average‎ performance. And we would have been closer to 10 per cent above our prior record if it hadn’t been for grain companies failing to use available rail capacity last August and early September when it was becoming clear that Canadian grain growers would harvest a huge crop.”

Mongeau said CN is now aiming to move close to 6,000 hopper cars of grain weekly during this summer with its recently-introduced customer fleet integration plan, and the deployment in Canada of its temporarily surplus fleet of hopper cars used in U.S. service during the next three months.

“Assuming grain elevator companies are capable of consistently unloading this increased volume, these plans should propel us into even greater record territory by the end of the crop-year in early August. With solid supply chain collaboration, we expect to see a crop carry-over of grain in the range of 18 million tonnes, which would be only about six million tonnes above the average despite a massive 100-year crop.”

Agriculture Canada is also projecting a carry-over of grain of 18.5 million tonnes and calling for a crop of about 62 million tonnes next year, slightly above trend-line average and well below 76 million tonnes in the current crop-year. If these forecasts prove to be accurate, this will lead to another year with high stocks of grain to move in 2014/15.

Mongeau concluded: “True supply chain collaboration and normal commercial alignment — not ill-advised and unwarranted regulation as contemplated by the federal government — is what we need to help deliver this significant volume efficiently to the benefit of Canada’s grain-growing sector.”

About CN
CN (TSX: CNR) (NYSE: CNI) is a true backbone of the economy, transporting approximately C$250 billion worth of goods annually for a wide range of business sectors, ranging from resource products to manufactured products to consumer goods, across a rail network spanning Canada and mid-America. CN – Canadian National Railway Company, along with its operating railway subsidiaries — serves the cities and ports of Vancouver, Prince Rupert, B.C., Montreal, Halifax, New Orleans, and Mobile, Ala., and the metropolitan areas of Toronto, Edmonton, Winnipeg, Calgary, Chicago, Memphis, Detroit, Duluth, Minn./Superior, Wis., and Jackson, Miss., with connections to all points in North America.

Forward-Looking Statements
Certain information included in this news release is “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and under Canadian securities laws. CN cautions that, by their nature, these forward-looking statements involve risks, uncertainties and assumptions. 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. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results or performance of the Company or the rail industry to be materially different from the outlook or any future results or performance implied by such statements.

Important risk factors that could affect the forward-looking statements include, but are not limited to, the effects of general economic and business conditions, 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, various events which could disrupt operations, including natural events such as severe weather, droughts, floods and earthquakes, labor negotiations and disruptions, environmental claims, uncertainties of investigations, proceedings or other types of claims and litigation, risks and liabilities arising from derailments, 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, available on CN’s website, for a summary of major risks.

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 Canadian 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.

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Communications and Public Affairs



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Janet Drysdale
Investor Relations


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