CN 's first-quarter 2005 performance benefited from $121 million
in revenues from the rail and related holdings of Great Lakes
Transportation LLC (GLT) and BC Rail, whose operations CN
consolidated on May 10, 2004, and July 14, 2004, respectively.S., with
connections to all points in North America .S.8
---------------------------------------------------------------------
------------------- --------------------------------------------------
See accompanying notes to consolidated financial statements.S. Accordingly, the Company's results of operations for
the quarter ended March 31, 2004 excluded the results of operations
of both GLT and BC Rail. The Company has a contingent residual
interest of approximately 10% of receivables sold, which is recorded
in Other current assets.

06 $ 0.74
Basic earnings per share, pro forma $ 1.S. Accordingly, the Company
accounts for costs related to employee work-related injuries based on
actuarially developed estimates of the ultimate cost associated with
such injuries, including compensation, health care and administration
costs.

As at March 31, 2005, the Company had aggregate reserves for personal
injury and other claims of $649 million ($642 million at December 31,
2004). Guarantees and indemnifications
In the normal course of business, the Company, including certain of
its subsidiaries, enters into agreements that may involve providing
certain guarantees or indemnifications to third parties and others,
which extend over the term of the agreement.

Guarantee of residual values of operating leases
The Company has guaranteed a portion of the residual values of
certain of its assets under operating leases with expiry dates
between 2005 and 2012, for the benefit of the lessor.


CANADIAN NATIONAL RAILWAY COMPANY
SELECTED RAILROAD STATISTICS (U.25 5%
Metals and minerals 4.74

Diluted earnings per share $ 1.

powderham sidings

2 per cent, a
3 .2% 72. Subject to regulatory and shareholder approval at the
Company's 2005 Annual Meeting of Shareholders, the maximum number of
options which may be issued under the plan will be increased by an
additional 7.
If compensation cost had been determined based upon fair values at
the date of grant for awards under all plans, the Company's pro forma
net income and earnings per share would have been as follows:


Three months ended March 31, 2005 2004
---------------------------------------------------------------------
Net income, as reported (in millions) $ 299 $ 210

Add (deduct) compensation cost, net of
applicable taxes, determined under:

Fair value method for all awards granted
after Jan 1, 2003 (SFAS No. gallon.$380 million to fix the treasury component on
these future debt issuances. Although the
effect on operating results and liquidity cannot be reasonably
estimated, management believes , based on current information, that
environmental matters will not have a material adverse effect on the
Company's financial condition or competitive position. To the extent of any actual
claims under these agreements, the Company maintains provisions for
such items, which it considers to be adequate.40 1.53 1.6
Accident rate per million train miles 1.


CANADIAN NATIONAL RAILWAY COMPANY
SUPPLEMENTARY INFORMATION (U.56 4%
Intermodal 3.70 3.

knebworth wetekamp

Reference should
be made to CN's most recent Form 40-F filed with the United States
Securities and Exchange Commission, and the Annual Information Form
filed with the Canadian securities regulators, for a summary of major
risks. As such, at March 31, 2005, the note receivable,
including accrued interest, of $60 million has been presented in
Other current assets.

Note 4 - Financing activities

In January 2005, the Company repaid its borrowings of U.36 per share. 123) 21 4

Fair value method for all
awards (SFAS No.
These indemnifications survive the termination of such agreements or
trust deeds. There are no recourse provisions to recover
any amounts from third parties. Free cash
flow does not have any standardized meaning prescribed by GAAP and
may, therefore, not be comparable to similar measures presented by
other companies.73
-------------------------------------------- ---------------
-----------------------------------------------------------

(1) The pro forma figures reflect the Company's results of operations
as if the Company had acquired GLT and BC Rail on January 1,
2004.

Certain of the 2004 comparative figures have been reclassified in
order to be consistent with the 2005 presentation.


CANADIAN NATIONAL RAILWAY COMPANY
SUPPLEMENTARY PRO FORMA INFORMATION (U.

www.

Research and Markets: Insight to the Phenomena of Low Frequency Noise and Vibration and Their Powerful Effects on Man Animals and the Environment Spread Acros

butlin sidings

04 per diluted share, an
increase of 42 per cent from year-earlier net income of $210 million,
or 73 cents per diluted share;

- Revenues of $1,706 million, an increase of 19 per cent;

- Operating income up 33 per cent to $526 million;

- Record first-quarter operating ratio of 69. In the first quarter of 2004,
the CAW strike reduced CN's operating income and net income by $35
million and $24 million, respectively., Montreal, Halifax, New
Orleans, and Mobile, Ala . GAAP)
---------------------------------------------------------------------
---------------- -----------------------------------------------------
(In millions)

Three months ended
March 31
-------------------
2005 2004
------------------------------------- --------------------------------
(Unaudited )
Common shares (1)

Balance, beginning of period $ 4,706 $ 4,664

Stock options exercised and other 86 18

Share repurchase program (Note 4) (77) -
----------------------------------------------------- ----------------
Balance, end of period $ 4,715 $ 4,682
-------- -------------------------------------------------------------
----------------------------------- ----------------------------------

Accumulated other comprehensive loss

Balance, beginning of period $ (148) $ (129)

Other comprehensive income (loss):

Unrealized foreign exchange loss on translation
of U.

The pro forma figures for both GLT and BC Rail do not reflect
synergies, and accordingly, do not account for any potential
increases in operating income, any estimated cost savings or
facilities consolidation.$285 million (Cdn$347 million) under its commercial
paper program.55% -
Expected stock price volatility 25% -
Average dividend per share $ 1.00 -
------------ ---------------------------------------------------------
(1) In the first quarter of 2004, the Company did not grant any stock
option awards. These derivative instruments were
accounted for as cash flow hedges whereby the cumulative change in
their market value had been recorded in Other comprehensive income
(loss). Contingencies
In the normal course of its operations, the Company becomes involved
in various legal actions, including claims relating to personal
injuries, occupational disease and damage to property. Of that amount, $6 million represents the expected
cash outlay for such guarantees , while the remaining $3 million
represents the Company's obligation to stand ready and honor the
guarantees that were entered into subsequent to January 1, 2003. The Company has granted
guarantees for which no liability has been recorded, as they relate
to the Company's future performance.66 3.4
---------------------------------------------------------------------

Financial ratios

Debt to total capitalization ratio (% at
end of period) 35.66 2.82 3%
Coal 2.

pinewoods dymchurch

dollar-denominated revenues and expenses,
and, accordingly, reduced the company's first-quarter 2005 revenues,
operating income and net income by approximately $60 million, $25
million, and $15 million, respectively. GAAP)
---------------------------------------------------------------------
--------------------------- ------------------------------------------
(In millions)

Three months ended March 31
-------------------- --------
Variance
2005 2004 Fav
(Unfav)
---------------------------------------------------------------------
(Unaudited)

Revenues

Petroleum and chemicals $ 275 $ 250 10%
Metals and minerals 199 134 49%
Forest products 404 320 26%
Coal 79 67 18%
Grain and fertilizers 276 256 8%
Intermodal 287 228 26%
Automotive 122 130 (6%)
Other items 64 53 21%
-----------------------------------------------------------
1,706 1,438 19%

Operating expenses

Labor and fringe benefits 499 419 (19%)
Purchased services and material 206 190 (8%)
Depreciation and amortization 156 142 (10%)
Fuel 166 122 (36%)
Equipment rents 47 63 25%
Casualty and other 106 107 1%
-----------------------------------------------------------
1,180 1,043 (13%)
---------------------------------------- -------------------

Operating income $ 526 $ 395 33%
-- -------------------------------------------------------------------
----------------------------- ----------------------------------------

Operating ratio 69. Payout is also conditional upon the
attainment of targets relating to return on invested capital over the
four-year period and to the Company's share price during the 20-day
period ending on December 31, 2008.

In Canada, employee injuries are governed by the workers'
compensation legislation in each province whereby employees may be
awarded either a lump sum or future stream of payments depending on
the nature and severity of the injury.
There are no recourse provisions to recover any amounts from third
parties.S.5
Freight revenue per RTM (cents) 3.54
GTMs per average number of employees (thousands) 3,776 3,674
Diesel fuel consumed (U.95 3 .25 15.64 3.

lackham knebworth

Highlights

- Net income of $299 million, or $1.3-percentage point improvement over first-quarter 2004 performance;

- Free cash flow of $310 million, compared with $272 million for
the comparable period of 2004.

The continued appreciation of the Canadian dollar affected the
conversion of CN's U.S. GAAP).73

Weighted-average number of shares

Basic 281.

Certain of the 2004 comparative figures have been reclassified in
order to be consistent with the 2005 presentation.

(b) Stock options
In the first quarter of 2005, the Company granted approximately 0. For the three
months ended March 31, 2005, the Company recorded compensation cost
of $7 million compared to $2 million, for the same 2004 period.71

Diluted earnings per share, as reported $ 1.S. These derivative instruments are carried
at market value on the balance sheet and are accounted for as cash
flow hedges whereby the effective portion of the cumulative change in
the market value of the derivative instruments has been recorded in
Other comprehensive income (loss).S. A liability for the minimum amount
of unasserted occupational disease claims is also accrued to the
extent they can be reasonably estimated. As a result, the Company incurs significant compliance
and capital costs, on an ongoing basis, associated with environmental
regulatory compliance and clean-up requirements in its railroad
operations and relating to its past and present ownership, operation
or control of real property . At March 31, 2005, the maximum exposure in
respect of these guarantees was $96 million of which $9 million has
been recorded.S.20
GTMs per U.4
------------------------------------------- --------------------------
---------------------------------------------------------------------

(1) Includes the impact of the Company's fuel hedging program. GAAP)
------------------------ ---------------------------------------------
--------------------------------------------------- ------------------

Three months ended March 31
---------------------------
2005 2004 Variance
pro Fav
forma(1) (Unfav)
------------ ---------------------------------------------------------
(Unaudited)
Revenue ton miles (millions)

Petroleum and chemicals 8,058 7,934 2%
Metals and minerals 4,293 4,403 (2%)
Forest products 10,240 9,656 6%
Coal 3,385 3,220 5%
Grain and fertilizers 10,368 10,075 3%
Intermodal 7,763 6,990 11%
Automotive 800 834 (4%)
-------------------------------------------------- ---------
44,907 43,112 4%

Freight revenue / RTM (cents)

Total freight revenue per RTM 3.25 15.ca

Canadian National Railway Company (TSX:CNR) (NYSE:CNI)

finelli wetekamp

(1) Please see discussion and reconciliation of this non-GAAP
adjusted performance measure in the attached supplementary schedule,
Non-GAAP Measures.5 288.


CANADIAN NATIONAL RAILWAY COMPANY
CONSOLIDATED STATEMENT OF OPERATING INCOME (U.S.S.


CANADIAN NATIONAL RAILWAY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (U.

The Company has an accounts receivable securitization program,
expiring in June 2006, under which it may sell, on a revolving basis,
a maximum of $500 million ($450 million prior to February 2005) of
eligible freight trade and other receivables outstanding at any point
in time, to an unrelated trust.S.) 19,221 17,544
Employees (end of period) 22,390 21,424
Employees (average during period) 22,371 21,219
------ ---------------------------------------------------------------

Productivity

Operating ratio (%) 69.8 34. GAAP)
-------------------------------- -------------------------------------
----------------------------------------------------------- ----------

Free cash flow
The Company believes that free cash flow is a useful measure of
performance as it demonstrates the Company's ability to generate cash
after the payment of capital expenditures and dividends.

vanstone poore

C. At March
31, 2005, the Company had 280. For comparative purposes only, if the
Company had acquired both GLT and BC Rail on January 1, 2004, based
on their respective historical amounts, net of the amortization of
the difference between the Company's cost to acquire GLT and BC Rail
and their respective net assets (based on preliminary estimates of
the fair value of GLT 's and BC Rail's assets and liabilities),
revenues, net income, and basic and diluted earnings per share would
have been $1,557 million, $211 million, $0. On March 29, 2005, the
Company refinanced , by way of amendment, its revolving credit
facility, which was scheduled to mature in December 2005 , for a
five-year period to March 2010.

Note 5 - Stock-based compensation

For the three months ended March 31, 2005 and 2004, the Company
recorded total compensation cost for awards under all plans of $28
million and $4 million, respectively. At March 31, 2005, the Company had approximately 1.5 million options remained authorized for future
issuances. gallons at an average price of U.
gallon , and 17% of the estimated 2006 fuel consumption, representing
approximately 69 million U. At March 31, 2005, Accumulated
other comprehensive loss included an unrealized gain of $170 million,
$115 million after tax ($92 million, $62 million after tax at
December 31, 2004), of which $152 million relates to derivative
instruments that will mature within the next twelve months and are
presented in Other current assets. As at March 31, 2005, the carrying value
for guarantees for which the Company was able to determine the fair
value, was $1 million.70 3.

butlin ottaway

News Editors

MONTREAL ----CN today reported its
financial results for the first quarter ended March 31, 2005.
Automotive revenues declined by six per cent. The
Company has been in compliance with these covenants throughout the
quarter. As at March 31, 2005, the Company had letters of credit of
$299 million under its revolving credit facility and outstanding
borrowings of U. The
Company follows the intrinsic value method for cash settled awards. The
realized gain of $12 million accumulated in other comprehensive loss
will be recorded into income, as a reduction of interest expense,
over the term of the debt based on the interest payment schedule. For all other legal actions, the Company maintains, and
regularly updates on a case-by-case basis, provisions for such items
when the expected loss is both probable and can be reasonably
estimated based on currently available information. jury system or
individual settlements, and represent a major expense for the
railroad industry. If the fair
value of the assets, at the end of their respective lease term, is
less than the fair value, as estimated at the inception of the lease,
then the Company must, under certain conditions, compensate the
lessor for the shortfall.

Other guarantees
The Company, including certain of its subsidiaries, has granted
irrevocable standby letters of credit and surety bonds, issued by
highly rated financial institutions, to third parties to indemnify
them in the event the Company does not perform its contractual
obligations. Due to the nature of
the indemnification clauses, the maximum exposure for future payments
may be material.59 0.S.1 1.59 (2%)
-------------------------------- ---------------------------


Carloads (thousands)

Petroleum and chemicals 154 151 2%
Metals and minerals 238 225 6%
Forest products 181 178 2%
Coal 104 109 (5%)
Grain and fertilizers 144 144 -
Intermodal 294 260 13%
Automotive 72 76 (5%)
-------------------------------------- ---------------------
1,187 1,143 4%

Freight revenue / carload (dollars)

Total freight revenue per carload 1,383 1,306 6%

Commodity groups:
Petroleum and chemicals 1,786 1,748 2%
Metals and minerals 836 764 9%
Forest products 2,232 2,073 8%
Coal 760 651 17 %
Grain and fertilizers 1,917 1,799 7%
Intermodal 976 877 11%
Automotive 1,694 1,711 (1%)
--------------------------------------------------------------------
--------- -----------------------------------------------------------

(1) The pro forma figures reflect the Company's results of operations
as if the Company had acquired GLT and BC Rail on January 1,
2004.com/reports/c18364

Laura Wood
Senior Manager
Research and Markets
press@researchandmarkets.

pinewoods dymchurch

GAAP)
------------------------------------------------ ---------------------
---------------------------------------------------------------------
(In millions, except per share data)

Three months ended
March 31
-------------------
2005 2004
---------------------------------------------------------------------
(Unaudited)

Revenues $ 1,706 $ 1,438
---------------------------------------------------------- -----------

Operating expenses 1,180 1,043
--------- ------------------------------------------------------------

Operating income 526 395

Interest expense (75 ) (72)

Other loss (4) (13)
------- --------------------------------------------------------------

Income before income taxes 447 310

Income tax expense (148 ) (100)
---------------------------------------------------------------------

Net income $ 299 $ 210
-------------------------------------- -------------------------------
----------------------------------------------------------------- ----

Earnings per share

Basic $ 1.S. and BC Rail Partnership (collectively BC Rail) were
acquired and consolidated effective May 10, 2004 and July 14, 2004,
respectively. The credit facility provides for borrowings
at various interest rates , including the Canadian prime rate,
bankers' acceptance rates, the U. The Company has
repurchased a total of 8.8 million.2 -
Risk-free interest rate 3.$500 million
6. Commitments
As at March 31, 2005, the Company had commitments to acquire railroad
ties, rail, freight cars, locomotives and other equipment at an
aggregate cost of $474 million ($194 million at December 31, 2004). As at March 31, 2005, the maximum potential liability
under these guarantees was $437 million of which $357 million was for
workers' compensation and other employee benefits and $80 million was
for equipment under leases and other.41 3.

knebworth powderham

"By staying focused on cost control and asset utilization, we
continue to be well positioned to convert revenue gains into strong
bottom line growth.

The financial results in this press release are reported in
Canadian dollars and were determined on the basis of U., and the key cities of Toronto, Buffalo,
Chicago, Detroit, Duluth, Minn.S.08 per share.4 million share
units which vest conditionally upon the attainment of targets
relating to the Company's share price during the six-month period
ending December 31 , 2008.02 $ 0.S.

While the Company believes that it has identified the costs likely to
be incurred for environmental matters in the next several years,
based on known information, the Company 's ongoing efforts to identify
potential environmental concerns that may be associated with its
properties may lead to future environmental investigations, which may
result in the identification of additional environmental costs and
liabilities. The magnitude of such additional liabilities and the
costs of complying with environmental laws and containing or
remediating contamination cannot be reasonably estimated due to:

(i) the lack of specific technical information available with
respect to many sites;
(ii) the absence of any government authority, third-party orders, or
claims with respect to particular sites;
(iii) the potential for new or changed laws and regulations and for
development of new remediation technologies and uncertainty
regarding the timing of the work with respect to particular
sites;
(iv) the ability to recover costs from any third parties with
respect to particular sites; and

therefore, the likelihood of any such costs being incurred or whether
such costs would be material to the Company cannot be determined at
this time.S.

Certain of the comparative statistical data and related productivity
measures have been restated to reflect changes to estimated
statistical data previously reported.52 32 %
Forest products 3. The Company defines free cash flow as cash provided
from operating activities, excluding changes in the level of accounts
receivable sold under the securitization program, less investing
activities and dividends paid, and adjusted for significant
acquisitions as they are not indicative of normal day-to-day
investments in the Company's asset base, calculated as follows:


Three months ended
March 31
-------------------
In millions 2005 2004
---------------------------------------------------------------------

Cash provided from operating activities $ 583 $ 305

Less:
Investing activities (149) 16
Dividends paid (71) (55)
-------------------

Cash provided before financing activities 363 266
-------------------
--------- ----------

Adjustment:
Change in level of accounts receivable sold (53) 6
-------------------

Free cash flow $ 310 $ 272
----------------------------------------------- ----------------------
---------------------------------------------------------------------


CANADIAN NATIONAL RAILWAY COMPANY
SUPPLEMENTARY INFORMATION
PRO FORMA CONSOLIDATED STATEMENT OF INCOME (U.researchandmarkets. As such, it represents the state-of-the-art in
low frequency research . The phenomena of low frequency noise and vibration and
their powerful effects on man, animals and the environment spread across
several disciplines including psychology, civil and mechanical engineering ,
architecture, geophysics and acoustics.

Key topics include:

-- Sources of infrasound and low frequency noise and vibration: detection,
measurement and analysis;
-- Propagation of infrasound and low frequency noise in the atmosphere;
-- Propagation of vibration in the ground and in structures;
-- Perception of infrasound, low frequency noise and vibration by man and
animals; effects on man and animals;
-- Interaction of low frequency noise and vibration: vibrations caused by
noise, radiation of noise from vibrating structures;
-- Low frequency noise and vibration control.

Contents include the following:-

-- Mitigation of cable vibrations using rubber bushings and viscous
dampers
-- Low frequency noise in a paper mill control room
-- Low frequency noise assessment -- a new insight?
-- Comparative cabin noise analysis in light aircraft and in cars
-- Experimental study on the relationship between the wave shape of
impulsive infrasound and the rattling of windows
-- Noise and vibration reducing measures to the Souterrain Tramtunnel in
The Hague optimally tuned to the situation
-- A Non-Linear Three-Dimensional Dynamic Model for Cylindrical Rubber
Vibration Isolators
-- Acoustical Standards for Classroom Design: Comparison of International
Standards and Low Frequency Criteria
-- Vibro acoustic modeling for periodic force and impact loading on
circular plates in a disc horn
- - Proposed Criteria in Residential Communities for Low Frequency Noise
from Industrial Sources
-- An Evaluation Method of Low Frequency Noise in Complex Sound
Environment under Existence of Background Noise
-- Acceptable limits and their percentiles for low frequency noise in
ordinary adults and complainants
-- Thresholds, psychometric functions and detection ratios below
thresholds of low frequency noise in ordinary adults and complainants
-- Thresholds , unpleasantness and acceptable limits of low frequency noise
in older adults and complainants
-- Infrasound Emission from Wind Turbines
-- Publication of "Handbook to Deal with Low Frequency Noise (2004)"
-- Field measurement of wayside low-frequency noise emitted from tunnel
portals and trains of high-speed railway
-- Rattling thresholds of windows or doors by ground vibration
-- Low frequency lateral acceleration and subjective ratings of
acceleration intensity and driving confidence in production cars
-- Whole body vibration measurements and calculations of the daily 8-hour
values in Finnish working environments
-- Methods for measuring the dynamic stiffness of resilient rail
fastenings for low frequency vibration isolation of railways, their
problems and possible solutions
-- Proposals for the kinetic estimation of Infrasound for autonomic nerve
disease and for the sensibility of human body
-- The influence of a noise barrier on nuisance caused by vibrations
-- Occupational exposure to noise, hand-arm vibration and organic solvents
in dockyard and glass factory workers
-- The impact of low frequency noise on the cognitive functions in humans
-- An investigation of low-frequency noise complaints
-- Vibroacoustic disease -- what is known to date
- - Vibroacoustic disease -- associated respiratory tract pathology
-- Vibroacoustic disease -- the response of biological tissue to low
frequency noise
-- Low Frequency Noise Measurements
-- Whole-Body Vibration of Forest Machine Drivers
-- Modelling Critical Train Velocity on Soft Soils, Case
-- Modelling of Soil Vibrations from Metro Tunnels in Sevilla
-- Modelling of Soil Vibrations from Railway Viaducts
-- A consideration of the relationship between subjective unpleasantness
and body surface vibrations induced by complex low-frequency noise
-- Measurement of whole-body vibration strain for the standing posture
-- Do wind turbines produce significant low frequency sound levels?
-- Masking of low frequency sound by band noise and its psychological
response
-- Hearing loss in workers exposed to different type of noise , organic
solvents and hand-arm vibration
-- Vibration perception assessment in two different measuring conditions
in workers exposed to mechanical vibrations

For more information visit
http://www.

Miniature Railways and Railroads are real passenger carrying railways in miniature from gauges 3.

modelbouwvereniging pinewoods

"Our strong performance was driven by a number of factors - a
solid economy, revenue gains from CN's 2004 acquisitions, a higher
fuel surcharge, freight rate increases , and a return to more normal
traffic levels following the first-quarter 2004 Canadian Auto Workers
(CAW) strike.

Operating expenses for first-quarter 2005 increased by 13 per
cent to $1 ,180 million, largely because of the inclusion of $96
million in GLT and BC Rail expenses, higher labour and fringe
benefits, and increased fuel costs, all of which were partly offset
by lower equipment rents.,
Minneapolis/St.9 284.5% 3.

Note 2 - Acquisitions

Great Lakes Transportation LLC's railroads and related holdings (GLT)
and BC Rail Ltd.S.S.48 $ -
--- ------------------------------------------------------------------
(1) In the first quarter of 2004 , the Company did not grant any stock
option awards.S.25% Debentures due 2034, subsequently issued on July 9, 2004.

As at March 31, 2005, the Company had not recorded any additional
liability with respect to these guarantees, as the Company does not
expect to make any additional payments associated with these
guarantees. As at March 31, 2005, the Company had not recorded a
liability associated with these indemnifications, as the Company does
not expect to make any payments pertaining to these indemnifications. GAAP)
--------------------------------------------------------------- ------
---------------------------------------------------------------------
(In millions, except per share data)

Three months ended March 31
---------------------------
2005 2004 Variance
pro Fav
forma(1) (Unfav)
---------------- -----------------------------------------------------
(Unaudited)

Revenues

Petroleum and chemicals $ 275 $ 264 4%
Metals and minerals 199 172 16%
Forest products 404 369 9%
Coal 79 71 11%
Grain and fertilizers 276 259 7%
Intermodal 287 228 26%
Automotive 122 130 (6%)
Other items 64 64 -
-----------------------------------------------------------
1,706 1,557 10%

Operating expenses

Labor and fringe benefits 499 463 (8%)
Purchased services and materials 206 216 5%
Depreciation and amortization 156 154 (1%)
Fuel 166 134 (24%)
Equipment rents 47 60 22%
Casualty and other 106 116 9%
------- ----------------------------------------------------
1 ,180 1,143 (3%)

Operating income 526 414 27%

Interest expense (75) (93)

Other loss (4) (12)
-----------------------------------------------------------
Income before income taxes 447 309

Income tax expense (148) (98)
-----------------------------------------------------------

Net income $ 299 $ 211
----------------------------------------------- ------------
-----------------------------------------------------------

Operating ratio 69. DUBLIN, Ireland, Research and Markets
( http://www.

frimley poore

CANADIAN NATIONAL RAILWAY COMPANY
CONSOLIDATED BALANCE SHEET (U. At
March 31, 2005, 0. The Company granted 0.04 $ 0.35
Freight revenue per carload ($) 1,383 1,418
Operating expenses per GTM (cents) 1. gallon of fuel consumed 812 821
---------------------------------------------------------------------

Safety indicators

Injury frequency rate per 200,000 person hours 2.S.2
--------------------------------- --------------------------
-----------------------------------------------------------

Basic earnings per share $ 1.

pinewoods vasona

Paul, Memphis, St.


CANADIAN NATIONAL RAILWAY COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS (U. The amended
credit facility agreement retains customary limitations on debt as a
percentage of total capitalization, but eliminates the requirement
for maintaining tangible net worth above pre-defined levels.6 million common shares since November 1,
2004 , the inception of the program, for $620 million, at an average
price of $72. The RSUs granted are scheduled for payout
after three years and vest upon the attainment of targets relating to
return on invested capital over the three-year period and to the
Company's share price during the three -month period ending December
31, 2007.7
million conventional stock options to designated senior management
employees, that vest over a period of four years of continuous
employment.70
-- -------------------------------------------------------------------

Compensation cost related to stock option awards granted in the
current period under the fair value based approach was calculated
using the Black-Scholes option-pricing model with the following
assumptions:


Three months ended March 31, 2005 2004(1)
-------------------------------- -------------------------------------
Expected option life (years) 5.

D.

General indemnifications
In the normal course of business, the Company has provided
indemnifications, customary for the type of transaction or for the
railway business, in various agreements with third parties, including
indemnification provisions where the Company would be required to
indemnify third parties and others.34
Labor and fringe benefits expense per GTM (cents) 0.33 2%
Metals and minerals 4.66 2.newscom.

knebworth modelbouwvereniging

CN's first-quarter 2005 net income rises 42 per cent to $299 million or $1.04 per diluted share

S. GAAP)
------ ---------------------------------------------------------------
--------------------------------- ------------------------------------
(In millions)

Three months ended
March 31
-------------------
2005 2004
------------------------------------------------------- --------------
(Unaudited)
Operating activities

Net income $ 299 $ 210
Adjustments to reconcile net income to net cash
provided from operating activities:
Depreciation and amortization 157 143
Deferred income taxes 136 55
Equity in earnings of English Welsh and
Scottish Railway (5) 5
Other changes in:
Accounts receivable 64 8
Material and supplies (51) (35)
Accounts payable and accrued charges (21) (66)
Other net current assets and liabilities (10) (29)
Other 14 14
---------------------------------------------------------------------
Cash provided from operating activities 583 305
-------------------------------------------------------- -------------

Investing activities

Net additions to properties (153) (125)
Other, net 4 141
------ ---------------------------------------------------------------
Cash provided from (used by) investing activities (149) 16
------------------------------------------------------------------ ---

Dividends paid (71) (55)

Financing activities

Issuance of long-term debt 620 491
Reduction of long-term debt (651) (726)
Issuance of common shares 70 14
Repurchase of common shares (347) -
----- ----------------------------------------------------------------
Cash used by financing activities (308) (221)
------------------------------------------------------------ ---------

Net increase in cash and cash equivalents 55 45

Cash and cash equivalents, beginning of period 147 130
------------------------------------ ---------------------------------
Cash and cash equivalents, end of period $ 202 $ 175
---------------------------------------------------------------------
------------------ ---------------------------------------------------

Supplemental cash flow information
Net cash receipts from customers and other $ 1,886 $ 1,404
Net cash payments for:
Employee services, suppliers and other expenses (1,113) (931)
Interest (91) (74)
Workforce reductions (31) (32)
Personal injury and other claims (27) (36)
Pensions (2) (6)
Income taxes (39) (20)
---------------------------------------------------------------------
Cash provided from operating activities $ 583 $ 305
-------------------------------- -------------------------------------
----------------------------------------------------------- ----------
See accompanying notes to consolidated financial statements. federal funds effective rate and
the London Interbank Offer Rate, plus applicable margins. At March 31, 2005, pursuant to the
agreement, the maximum amount of eligible receivables had been sold,
compared to $445 million at December 31, 2004.

(a) Restricted share units
In the first quarter of 2005, the Company granted approximately 0.4
million restricted share units (RSUs) to designated management
employees entitling them to receive payout in cash based on the
Company's share price.S. The Company follows an actuarial-based approach
and accrues the expected cost for personal injury and property damage
claims and asserted occupational disease claims, based on actuarial
estimates of their ultimate cost.64 3.10 11%
Grain and fertilizers 2.

poore powderham

"

Commodity groups that registered revenue gains during the quarter
were metals and minerals (49 per cent); forest products (26 per
cent); intermodal (26 per cent); coal (18 per cent); petroleum and
chemicals (10 per cent ); and grain and fertilizers (eight per cent).S. Award payout will be equal to the
number of share units vested on December 31, 2008 multiplied by the
Company's 20-day average share price ending on such date. Due to the
nature of the vesting conditions, no compensation cost was recorded
for the first quarter of 2005.04 $ 0.

Note 6 - Derivative instruments

Fuel
At March 31, 2005, the Company had hedged approximately 50% of the
estimated remaining 2005 fuel consumption , representing approximately
151 million U.$9
million (Cdn$12 million) upon the pricing of the U.S.

Effective January 1, 2003, the Company is required to recognize a
liability for the fair value of the obligation undertaken in issuing
certain guarantees on the date the guarantee is issued or modified. The guarantee instruments mature at various dates between
2005 and 2010. Indemnifications are found in
various types of contracts with third parties which include, but are
not limited to, (a) contracts granting the Company the right to use
or enter upon property owned by third parties such as leases,
easements, trackage rights and sidetrack agreements; (b) contracts
granting rights to others to use the Company's property, such as
leases, licenses and easements; (c) contracts for the sale of assets
and securitization of accounts receivable; (d) contracts for the
acquisition of services; (e) financing agreements; (f) trust
indentures, fiscal agency agreements, underwriting agreements or
similar agreements relating to debt or equity securities of the
Company and engagement agreements with financial advisors; (g)
transfer agent and registrar agreements in respect of the Company's
securities; (h) trust agreements relating to pension plans and other
plans, including those establishing trust funds to secure the payment
to certain officers and senior employees of special retirement
compensation arrangements; (i) master agreements with financial
institutions governing derivative transactions; and (j) settlement
agreements with insurance companies or other third parties whereby
such insurer or third party has been indemnified for any present or
future claims relating to insurance policies, incidents or events
covered by the settlement agreements.

5 2.33 2.66 3.46 6%

Commodity groups:
Petroleum and chemicals 3.

finelli vasona

06 $ 0.74

Diluted $ 1. dollar denominated long-term debt
designated as a hedge of the net investment
in U.5 million.89 per U. The Company settled these treasury locks at a gain of U.59 (2%)
---------------------------------------- -------------------

Carloads (thousands)

Petroleum and chemicals 154 147 5%
Metals and minerals 238 96 148%
Forest products 181 152 19%
Coal 104 103 1%
Grain and fertilizers 144 142 1%
Intermodal 294 261 13%
Automotive 72 76 (5%)
-------------------------------------------------- ---------
1,187 977 21%

Freight revenue / carload (dollars)

Total freight revenue per carload 1,383 1,418 (2%)

Commodity groups:
Petroleum and chemicals 1,786 1,701 5%
Metals and minerals 836 1,396 (40%)
Forest products 2,232 2,105 6%
Coal 760 650 17%
Grain and fertilizers 1,917 1,803 6%
Intermodal 976 874 12%
Automotive 1,694 1,711 (1%)
---------------------------------------------------------------------
----- ----------------------------------------------------------------

Certain of the comparative statistical data and related productivity
measures have been restated to reflect changes to estimated
statistical data previously reported and reclassified in order to be
consistent with the 2005 presentation.41 3.91 19%
Forest products 3.

vasona modelbouwvereniging

Hunter Harrison, president and chief executive officer of CN,
said: "CN had an exceptional quarter, achieving - for the first time
- an operating ratio of less than 70 per cent for the first three
months of the year.

This news release contains forward-looking statements., Green Bay, Wis.

CANADIAN NATIONAL RAILWAY COMPANY
CONSOLIDATED STATEMENT OF INCOME (U.5 million common shares
outstanding.S.$0. gallons at an average price of
U.S. Although the Company considers such provisions to be adequate
for all its outstanding and pending claims, the final outcome with
respect to actions outstanding or pending at March 31, 2005, or with
respect to future claims, cannot be predicted with certainty, and
therefore there can be no assurance that their resolution will not
have a material adverse effect on the Company's financial position or
results of operations in a particular quarter or fiscal year. Costs related
to any future remediation will be accrued in the year in which they
become known.

As at March 31, 2005, the Company had aggregate accruals for
environmental costs of $111 million ($113 million as at December 31,
2004).

CN Pension Plan, CN 1935 Pension Plan and BC Rail Ltd Pension Plan
The Company has indemnified and held harmless the current trustee and
the former trustee of the Canadian National Railways Pension Trust
Funds, the trustee of the BC Rail Ltd Pension Trust Fund, and the
respective officers, directors, employees and agents of such
trustees, from any and all taxes, claims, liabilities, damages, costs
and expenses arising out of the performance of their obligations
under the relevant trust agreements and trust deeds, including in
respect of their reliance on authorized instructions of the Company
or for failing to act in the absence of authorized instructions. GAAP)
-------------------------------------------------- -------------------
---------------------------------------------------------------------

Three months ended
March 31
---------- ---------
2005 2004
--------------- ------------------------------------------------------
(Unaudited)
Statistical operating data

Freight revenues ($ millions) 1,642 1,385
Gross ton miles (GTM) (millions) 84,476 77,953
Revenue ton miles (RTM) (millions) 44,907 41,294
Carloads (thousands) 1,187 977
Route miles (includes Canada and the U.S. GAAP)
- --------------------------------------------------------------------
---------------------------- -----------------------------------------

Three months ended March 31
----------------------------
Variance
2005 2004 Fav
(Unfav )
---------------------------------------------------------------------
(Unaudited)
Revenue ton miles (millions)

Petroleum and chemicals 8,058 7,694 5%
Metals and minerals 4,293 3,808 13%
Forest products 10,240 8,799 16%
Coal 3,385 3,187 6%
Grain and fertilizers 10,368 9,982 4%
Intermodal 7,763 6,990 11%
Automotive 800 834 (4%)
-------------------------------------- ---------------------
44,907 41,294 9%

Freight revenue / RTM (cents)

Total freight revenue per RTM 3.35 9%

Commodity groups:
Petroleum and chemicals 3.4% 4.04 $ 0.20 6%
Grain and fertilizers 2.

lackham powderham

This accomplishment was all the more striking
given a severe winter and weather-related disruptions on parts of our
network early in the quarter. generally
accepted accounting principles (U.

Certain of the 2004 comparative figures have been reclassified in
order to be consistent with the 2005 presentation.


CANADIAN NATIONAL RAILWAY COMPANY
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (U.74 per basic share and
$0.

Note 3 - Note receivable from English Welsh and Scottish Railway
(EWS)

In May 2005, subject to certain conditions, EWS intends to fully
redeem the Company's 8% note receivable due 2009, at the principal
amount together with accrued but unpaid interest at the date of
redemption. The credit facility is available for
general corporate purposes, including back-stopping the Company's
commercial paper program .

The Company follows the fair value based approach for stock option
awards and had prospectively applied this method of accounting to all
awards granted, modified or settled on or after January 1, 2003. 123) (27) (12)
-------------------
Pro forma net income (in millions) $ 293 $ 202
-------------------
-------------------

Basic earnings per share, as reported $ 1.

At March 31, 2005, Accumulated other comprehensive loss included an
unamortized gain of $12 million, $8 million after tax.

C.2 72.com
Fax: +353 1 4100 980

steamers gauge

S.5

Diluted 287. For the three months ended
March 31, 2005, the Company recorded compensation cost of $19 million
compared to $3 million, for the same 2004 period.

B. These include, but are
not limited to, residual value guarantees on operating leases,
standby letters of credit and surety bonds, and indemnifications that
are customary for the type of transaction or for the railway
business.
In addition, where the Company expects to make a payment in respect
of a guarantee, a liability will be recognized to the extent that one
has not yet been recognized.66 3.64 9%
Coal 2.cn.

butlin knebworth

This resulted in double-digit revenue increases at five
of our seven commodity groups , with particular strength in metals and
minerals, forest products, and intermodal traffic. This is the real power of CN's operating
leverage.3
------------------------------------------------- --------------------
---------------------------------------------------------------------
See accompanying notes to consolidated financial statements. GAAP)
--------------------------------- ------------------------------------
------------------------------------------------------------ ---------
(In millions)

March 31 December 31 March 31
2005 2004 2004
------------------------ ---------------------------------------------
(Unaudited) (Unaudited)
Assets

Current assets:
Cash and cash equivalents $ 202 $ 147 $ 175
Accounts receivable (Note 4) 727 793 519
Material and supplies 178 127 155
Deferred income taxes 250 364 126
Other 399 279 252
---------------------------------------------------------------------
1,756 1,710 1,227

Properties 19,799 19,715 18,421
Intangible and other assets 873 940 781
---------------------------------------------------------------------

Total assets $ 22,428 $ 22,365 $ 20,429
----------------------------------------------- ----------------------
---------------------------------------------------------------------

Liabilities and shareholders' equity

Current liabilities:
Accounts payable and accrued
charges $ 1,586 $ 1,605 $ 1,366
Current portion of long-term debt
(Note 4) 225 578 149
Other 77 76 82
-------------------------------------------------------- -------------
1,888 2,259 1,597

Deferred income taxes 4,802 4,723 4,642
Other liabilities and deferred
credits 1,474 1,513 1,200
Long-term debt (Note 4) 4,956 4,586 4,367

Shareholders' equity:
Common shares 4,715 4,706 4,682
Accumulated other comprehensive
loss (91) (148) (111)
Retained earnings 4,684 4 ,726 4,052
---------------------------------------------------------------------
9,308 9,284 8,623
------------------------------------- --------------------------------

Total liabilities and
shareholders' equity $ 22,428 $ 22,365 $ 20,429
--------------------------------------------------------------- ------
---------------------------------------------------------------------
See accompanying notes to consolidated financial statements.6
million RSUs outstanding under the Plan.

(c) Vision 2008 Share Unit Plan
In the first quarter of 2005, the Board of Directors of the Company
approved a special share unit plan with a four-year term to December
2008, entitling designated senior management employees to receive
payout in cash in January 2009.73
Diluted earnings per share, pro forma $ 1.


Three months ended March 31, 2005 2004(1)
---------------------------------------------------------------------
Weighted average fair value of
options granted $ 18.

Interest rate
In the first quarter of 2004, in anticipation of future debt
issuances, the Company entered into treasury lock transactions for a
notional amount of U.
The Company also had outstanding information technology service
contracts of $18 million and agreements with fuel suppliers to
purchase approximately 58% of the estimated remaining 2005 volume,
45% of its anticipated 2006 volume, and 10% of its anticipated 2007
volume at market prices prevailing on the date of the purchase. The amount recorded reflects
a 25-year horizon as the Company expects that a large majority of
these cases will be received over such period.S.

ottaway pinewoods

CN
cautions that, by their nature, forward-looking statements involve
risk and uncertainties and that its results could differ materially
from those expressed or implied in such statements. Louis , and Jackson, Miss.

(1) During the first quarter of 2005, the Company issued 2. GAAP), contain all adjustments (consisting of normal
recurring accruals) necessary to present fairly Canadian National
Railway Company's (the Company) financial position as at March 31,
2005 and December 31 and March 31, 2004, its results of operations,
changes in shareholders' equity and cash flows for the three months
ended March 31, 2005 and 2004. While management believes that the disclosures presented
are adequate to make the information not misleading, these interim
consolidated financial statements and notes should be read in
conjunction with the Company's Interim Management's Discussion and
Analysis and Annual Consolidated Financial Statements and notes
thereto.73 per diluted share, respectively , for the three months ended
March 31, 2004.S.

In the first quarter of 2005, under its current share repurchase
program, the Company repurchased 4.6 million common shares for $347
million, at an average price of $75.76 per U.S.

Note 8 - Major commitments and contingencies

A . A risk of environmental liability is
inherent in railroad and related transportation operations; real
estate ownership, operation or control; and other commercial
activities of the Company with respect to both current and past
operations. gallons in millions) 104 95
Average fuel price ($/U.33 2.57 4%
Intermodal 3.com/cgi-bin/prnh /20040820/RESEARCH )
This volume contains the 40-plus papers presented at the 11th
international meeting on low frequency noise and vibration and its control, at
Maastricht in September 2004.

vasona inch

Canadian National Railway Company spans Canada and mid-America,
from the Atlantic and Pacific oceans to the Gulf of Mexico, serving
the ports of Vancouver, Prince Rupert, B. generally accepted accounting
principles (U.$90 million
(Cdn$108 million) outstanding at December 31, 2004 under its
U. On an
ongoing basis, management reviews and compares the assumptions
inherent in the latest actuarial study with the current claim
experience and, if required, adjustments to the liability are
recorded. As a result, the Company was
unable to determine the fair value of the guarantees and accordingly,
no liability was recorded.S.2% 73.26 13%
Automotive 15.

Certain of the 2004 comparative figures have been reclassified in
order to be consistent with the 2005 presentation.

5ins to 20ins.

gauge trackage

(1)

E.04 $ 0.S.$1,000 million revolving credit facility. The total number of options outstanding at March 31,
2005, including conventional , performance, and
performance-accelerated options was 11.$0. An actuarial study is
conducted on an annual basis by an independent actuarial firm. Environmental matters
The Company's operations are subject to federal, provincial, state,
municipal and local regulations under environmental laws and
regulations in Canada and the United States concerning, among other
things, emissions into the air; discharges into waters; the
generation, handling, storage, transportation, treatment and disposal
of waste, hazardous substances, and other materials; decommissioning
of underground and aboveground storage tanks; and soil and
groundwater contamination. There can thus be no assurance that material liabilities
or costs related to environmental matters will not be incurred in the
future , or will not have a material adverse effect on the Company's
financial position or results of operations in a particular quarter
or fiscal year, or that the Company's liquidity will not be adversely
impacted by such environmental liabilities or costs. gallon) (1) 1.


CANADIAN NATIONAL RAILWAY COMPANY
NON-GAAP MEASURES (U.S.95 3.researchandmarkets.

wythall modelbouwvereniging

/Superior, Wis. subsidiaries (37) (32)

Unrealized foreign exchange gain on translation
of the net investment in foreign operations 44 54

Unrealized holding gain on fuel derivative
instruments (Note 6) 78 20

Unrealized holding loss on interest rate
derivatives (Note 6) - (15 )

---------------------------------------------------------------------
Other comprehensive income before income taxes 85 27

Income tax expense (28) (9)
---------------------------------------------------------------------
Other comprehensive income 57 18
--------------------------------- ------------------------------------
Balance, end of period $ (91) $ (111)
---------------------------------------------------------------------
-------------- -------------------------------------------------------

Retained earnings

Balance, beginning of period $ 4,726 $ 3,897

Net income 299 210
Share repurchase program (Note 4) (270) -
Dividends (71) (55)
--------------------------- ------------------------------------------
Balance, end of period $ 4,684 $ 4,052
---------------------------------------------------------------------
------------ ---------------------------------------------------------
See accompanying notes to consolidated financial statements.0 million
common shares as a result of stock options exercised. GAAP)
-------- -------------------------------------------------------------
----------------------------------- ----------------------------------

Note 1 - Basis of presentation

In management's opinion , the accompanying unaudited interim
consolidated financial statements, expressed in Canadian dollars ,
and prepared in accordance with U.S.

These interim consolidated financial statements and notes have been
prepared using accounting policies consistent with those used in
preparing the Company's 2004 Annual Consolidated Financial
Statements.

Note 7 - Pensions and other post -retirement benefits

For the quarters ended March 31, 2005 and 2004, the components of net
periodic benefit cost for pensions and other post-retirement benefits
were as follows:

(a) Components of net periodic benefit cost for pensions

In millions Three months ended March 31, 2005 2004
---------------------------------------------------------------------
Service cost $ 36 $ 29
Interest cost 185 180
Amortization of prior service cost 5 5
Expected return on plan assets (221) (208)
-----------------
Net periodic benefit cost $ 5 $ 6
---------------------------------------------------------------------
---------------------------------------------------------------------

(b) Components of net periodic benefit cost for post-retirement
benefits

In millions Three months ended March 31, 2005 2004
---------------------------------------------------------------------
Service cost $ 2 $ 2
Interest cost 5 4
Amortization of prior service cost - 1
Recognized net actuarial gain (1) -
-----------------
Net periodic benefit cost $ 6 $ 7
---------------------------------------------------------------------
- --------------------------------------------------------------------


For the 2005 funding year, the Company expects to make total
contributions of $120 million for all its defined benefit plans of
which $2 million have been made at March 31, 2005.

In the United States, employee work-related injuries, including
occupational disease claims, are compensated according to the
provisions of the Federal Employers' Liability Act (FELA), which
requires either the finding of fault through the U. However, such exposure cannot be determined with
certainty.

The Company has entered into various indemnification contracts with
third parties for which the maximum exposure for future payments
cannot be determined with certainty.26 13%
Automotive 15.06 $ 0.com/reports/c18364 ) has announced the
addition of Proceedings, Low Frequency 2004 11th International Meeting on Low
Frequency Noise and Vibration and its Control Maastricht, Netherlands, 30
August - 1 September 2004 to their offering
(Logo: http://www.

ottaway trackage

---

- - kjjkjk

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