News Editors

MONTREAL----CN today reported its
financial results for the first quarter ended March 31, 2005."

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)., Montreal, Halifax, New
Orleans, and Mobile, Ala.73

Weighted-average number of shares

Basic 281.3
----------------------------------------------------------- ----------
---------------------------------------------------------------------
See accompanying notes to consolidated financial statements.5 million common shares
outstanding.

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.5 million options remained authorized for future
issuances.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. 123) (27) (12)
-------------------
Pro forma net income (in millions) $ 293 $ 202
-------------------
-------------------

Basic earnings per share , as reported $ 1.

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).

C. Costs related
to any future remediation will be accrued in the year in which they
become known.66 3. Reservations to ride the Georgetown Loop Historic Railroad
and tour the Lebanon Silver Mine can be made by calling
1-888-456-6777.

coaling anthracite

In the first quarter of 2004,
the CAW strike reduced CN's operating income and net income by $35
million and $24 million, respectively.

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.$285 million (Cdn$347 million) under its commercial
paper program. 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, 2007.02 $ 0.S.

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. 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. 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. 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.35
Freight revenue per carload ($) 1,383 1,418
Operating expenses per GTM (cents) 1.34
Labor and fringe benefits expense per GTM (cents ) 0.S.4
---------------------------------------------------------------------
------------- --------------------------------------------------------

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

CANADIAN NATIONAL RAILWAY COMPANY
SUPPLEMENTARY PRO FORMA INFORMATION (U. The
park was founded by the Colorado Historical Society in 1959 and the
three miles of narrow -gauge line that connects Georgetown and Silver
Plume, Colorado, as well as the Lebanon Silver Mine , were refurbished
and eventually opened as a heritage tourist attraction. The park
includes nearly 1,000 acres, 12 buildings and four railway bridges,
including the nearly 100-foot-high Devil's Gate bridge over Clear
Creek and the railroad.

camaguey hackworth

S. Paul, Memphis, St.S.S.

CANADIAN NATIONAL RAILWAY COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (U. The Company has a contingent residual
interest of approximately 10% of receivables sold, which is recorded
in Other current assets.

(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. 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.73
Diluted earnings per share, pro forma $ 1. 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).
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. 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. 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.2% 73.26 13%
Automotive 15. 5,
2005.com

Railstar Corporation

Headquartered in Cape Vincent, New York , Railstar Corporation
began operating the Georgetown Loop Historic Railroad in 2005.

railfan predecessors

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

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

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. 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.$90 million
(Cdn$108 million) outstanding at December 31, 2004 under its
U.8 million. Due to the
nature of the vesting conditions, no compensation cost was recorded
for the first quarter of 2005.S.
gallon , and 17% of the estimated 2006 fuel consumption, representing
approximately 69 million U. 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). 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 . The engine then sat idle
and unnoticed in a field for many years until, in 2004, staff at the
plant recognized its historic importance.

predecessors transadelaide

dollar denominated long-term debt
designated as a hedge of the net investment
in U. 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.

In the first quarter of 2005, under its current share repurchase
program , the Company repurchased 4. At
March 31, 2005, 0.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.

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.2 72.64 9%
Coal 2.04 $ 0.

simplex alweg

Highlights

- Net income of $299 million, or $1.S., with
connections to all points in North America. 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.

(1) During the first quarter of 2005, the Company issued 2. 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.36 per share.5 million.06 $ 0 . A liability for the minimum amount
of unasserted occupational disease claims is also accrued to the
extent they can be reasonably estimated.

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

railroadiana transadelaide

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

This news release contains forward-looking statements. At March
31, 2005, the Company had 280.S. At March 31, 2005, the Company had approximately 1. 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) Stock options
In the first quarter of 2005, the Company granted approximately 0. 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.$9
million (Cdn$12 million) upon the pricing of the U.$500 million
6.

As at March 31, 2005, the Company had aggregate accruals for
environmental costs of $111 million ($113 million as at December 31,
2004). 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. Due to the nature of
the indemnification clauses, the maximum exposure for future payments
may be material.74

Diluted earnings per share $ 1.

Gondola Cars

The Colorado Historical Society has acquired a number of historic
gondolas , which are a type of freight car used to transport bulk cargo
including rock, ore, coal and scrap metal. The No.
The train runs daily until Oct.

hackworth predecessors

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. 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). 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. 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.

CANADIAN NATIONAL RAILWAY COMPANY
CONSOLIDATED STATEMENT OF OPERATING INCOME (U.S. 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. The Company has
repurchased a total of 8. The total number of options outstanding at March 31,
2005, including conventional, performance , and
performance-accelerated options was 11.04 $ 0.S.54
GTMs per average number of employees (thousands) 3,776 3,674
Diesel fuel consumed (U.S.10 11%
Grain and fertilizers 2.82 3%
Coal 2.20 6%
Grain and fertilizers 2.ca

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

705 and No.

hackworth anthracite

This is the real power of CN's operating
leverage. generally
accepted accounting principles (U./Superior, Wis.06 $ 0. and BC Rail Partnership (collectively BC Rail) were
acquired and consolidated effective May 10, 2004 and July 14, 2004,
respectively.76 per U.

The Company has entered into various indemnification contracts with
third parties for which the maximum exposure for future payments
cannot be determined with certainty.S.

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

railfan railroaders

0 million
common shares as a result of stock options exercised. 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.S. 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.

Note 8 - Major commitments and contingencies

A. 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.6
Accident rate per million train miles 1.25 15.70 3.georgetownlooprr.

alweg camaguey

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. The
Company has been in compliance with these covenants throughout the
quarter.

(a) Restricted share units
In the first quarter of 2005, the Company granted approximately 0.71

Diluted earnings per share, as reported $ 1.04 $ 0.S.

D. At March 31, 2005, the maximum exposure in
respect of these guarantees was $96 million of which $9 million has
been recorded. As at March 31, 2005, the carrying value
for guarantees for which the Company was able to determine the fair
value, was $1 million.8 34.41 3.95 3. 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 69.4% 4.33 2%
Metals and minerals 4. Narrow-gauge locomotives in
this weight class are becoming very rare because of modernization and
the operational switch to standard-gauge equipment.

predecessors garratt

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.C. 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.

CANADIAN NATIONAL RAILWAY COMPANY
CONSOLIDATED BALANCE SHEET (U. 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. generally accepted accounting
principles (U.S.74 per basic share and
$0.

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.4
million restricted share units (RSUs) to designated management
employees entitling them to receive payout in cash based on the
Company's share price. 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.S.59 0. These gondolas have now been modified
for passenger service. The Georgetown Loop
was originally built in the late 1800s and closed in the 1930s.

kccc honouring

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.

"By staying focused on cost control and asset utilization, we
continue to be well positioned to convert revenue gains into strong
bottom line growth.74

Diluted $ 1.S.

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.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) 5.55% -
Expected stock price volatility 25% -
Average dividend per share $ 1.S.

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 amount recorded reflects
a 25 -year horizon as the Company expects that a large majority of
these cases will be received over such period.

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. As a result, the Company was
unable to determine the fair value of the guarantees and accordingly,
no liability was recorded. gallon) (1) 1.20
GTMs per U.66 2.73
-----------------------------------------------------------
------- ----------------------------------------------------

(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 .95 3.25 15. Solid floors replaced drop doors and bench
seats were installed along the sides .
Railstar Corporation also owns and operates the Erie Canal Village
historic park and museum in Rome, New York, which includes a two-foot
narrow-gauge steam railway and an authentic mule-drawn canal boat, as
well as a narrow-gauge equipment manufacturing factory in Watertown,
New York.

interurban anthracite

,
Minneapolis/St.

Certain of the 2004 comparative figures have been reclassified in
order to be consistent with the 2005 presentation.S.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.6
million RSUs outstanding under the Plan.

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, 2005.5 2.66 3.41 3.

www. 746 even served for a time as an
unofficial community dumpster. 2, 2005, and an optional tour of
the Lebanon Silver Mine along the route is available until Sept.georgetownlooprr.com

Background

The Colorado Historical Society

The Colorado Historical Society is a statewide organization with
12 museums and historic sites across the state, including the
Georgetown Loop Historic Mining + Railroad Park.

anthracite railfanning

The continued appreciation of the Canadian dollar affected the
conversion of CN's U.S. 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. 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. As such, at March 31, 2005, the note receivable,
including accrued interest, of $60 million has been presented in
Other current assets.S. 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.
There are no recourse provisions to recover any amounts from third
parties. 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.66 3.53 1.25 5%
Metals and minerals 4. The railroad
industry nicknamed this particular type of locomotive "Critter" or
"Big Critter. This series of open freight cars were originally
built to haul coal and continued in this service for 64 years.

predecessors kccc

S.

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 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.

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.S. 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. 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. The guarantee instruments mature at various dates between
2005 and 2010.

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. To the extent of any actual
claims under these agreements, the Company maintains provisions for
such items, which it considers to be adequate. gallons in millions) 104 95
Average fuel price ($/U.S.26 13%
Automotive 15. Drop bottom gondolas No. For more information about the Georgetown Loop Historic
Railroad , prices, reservations, directions to the park and the season
schedule, please visit www.

locomotive interurban

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. Louis, and Jackson, Miss.S. The Company settled these treasury locks at a gain of U.

B. 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.

CANADIAN NATIONAL RAILWAY COMPANY
SUPPLEMENTARY INFORMATION (U.56 4%
Intermodal 3.59 (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.

CANADIAN NATIONAL RAILWAY COMPANY
NON-GAAP MEASURES (U. 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. 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.

utilises alweg

(1)

E.
Automotive revenues declined by six per cent.

Certain of the 2004 comparative figures have been reclassified in
order to be consistent with the 2005 presentation . The credit facility is available for
general corporate purposes, including back-stopping the Company 's
commercial paper program. As at March 31, 2005, the Company had letters of credit of
$299 million under its revolving credit facility and outstanding
borrowings of U.6 million common shares since November 1,
2004, the inception of the program, for $620 million, at an average
price of $72. The Company granted 0.00 -
------------------------------------------------------------------ ---
(1) In the first quarter of 2004, the Company did not grant any stock
option awards.

Three months ended March 31, 2005 2004(1)
------------------- --------------------------------------------------
Weighted average fair value of
options granted $ 18.48 $ -
---------------------------------------------- -----------------------
(1) In the first quarter of 2004, the Company did not grant any stock
option awards.25% Debentures due 2034, subsequently issued on July 9, 2004. 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.

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. 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.40 1.70 3.2
------------------------------------------------ -----------
-----------------------------------------------------------

Basic earnings per share $ 1.66 2.59 (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.cn. 12 narrow-gauge steam locomotive for the season-opening day of the
Georgetown Loop Historic Mining + Railroad Park , Saturday, a 1940s-era, 44-ton General Electric
diesel/electric locomotive -- to the Colorado Historical Society to
use for backup operations and maintenance at the park. For more information, visit
www .

railfan utilises

, and the key cities of Toronto, Buffalo,
Chicago, Detroit, Duluth, Minn.04 $ 0.

CANADIAN NATIONAL RAILWAY COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS (U.

Note 4 - Financing activities

In January 2005, the Company repaid its borrowings of U.7
million conventional stock options to designated senior management
employees, that vest over a period of four years of continuous
employment .74
Basic earnings per share, pro forma $ 1. 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.

CANADIAN NATIONAL RAILWAY COMPANY
SELECTED RAILROAD STATISTICS (U.) 19,221 17,544
Employees (end of period) 22,390 21,424
Employees (average during period) 22 ,371 21,219
---------------------------------------------------------------------

Productivity

Operating ratio (%) 69.33 2.64 3.

maryport semmering

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.9 284.5 288.8
------------ ---------------------------------------------------------
--------------------------------------- ------------------------------
See accompanying notes to consolidated financial statements.

Note 2 - Acquisitions

Great Lakes Transportation LLC's railroads and related holdings (GLT)
and BC Rail Ltd.73 per diluted share, respectively, for the three months ended
March 31, 2004.$1,000 million revolving credit facility. 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. The
Company follows the intrinsic value method for cash settled awards.89 per U. However, such exposure cannot be determined with
certainty.

Business Editors/Travel Writers

DENVER----The Colorado Historical
Society and Railstar Corporation will debut the recently refurbished
No. 718, were among a group of
a hundred comparable cars manufactured for the Rio Grande American Car
+ Foundry in 1904.

utilises locomotive

S. 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. federal funds effective rate and
the London Interbank Offer Rate, plus applicable margins.6 million common shares for $347
million, at an average price of $75 . gallon. 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).

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. 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 .

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. gallon of fuel consumed 812 821
-------------------- -------------------------------------------------

Safety indicators

Injury frequency rate per 200,000 person hours 2.4
------------------------------------------------------------ ---------

Financial ratios

Debt to total capitalization ratio (% at
end of period) 35.

Certain of the comparative statistical data and related productivity
measures have been restated to reflect changes to estimated
statistical data previously reported. 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.

predecessors semmering

"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.

CANADIAN NATIONAL RAILWAY COMPANY
CONSOLIDATED STATEMENT OF INCOME (U.5

Diluted 287.5% 3. 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. 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.35 9%

Commodity groups:
Petroleum and chemicals 3.06 $ 0.46 6%

Commodity groups:
Petroleum and chemicals 3. When
narrow-gauge freight operations ceased, many of the 700 series were
moved to Durango for storage.

locomotive coaling

2 per cent, a
3.

The financial results in this press release are reported in
Canadian dollars and were determined on the basis of U.

CANADIAN NATIONAL RAILWAY COMPANY
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (U. 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.
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. 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. The Company has granted
guarantees for which no liability has been recorded, as they relate
to the Company's future performance.
These indemnifications survive the termination of such agreements or
trust deeds. There are no recourse provisions to recover
any amounts from third parties.5
Freight revenue per RTM (cents) 3.1 1. 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 3.52 32%
Forest products 3.S.91 19%
Forest products 3.33 2.57 4%
Intermodal 3.

utilises stoneboro

, Green Bay, Wis.2% 72. The credit facility provides for borrowings
at various interest rates, including the Canadian prime rate,
bankers ' acceptance rates, the U.08 per share. 123) 21 4

Fair value method for all
awards (SFAS No.$0.S.S.

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.S.

All Aboard the Georgetown Loop Historic Railroad; Narrow-Gauge Steam Train Rides Begin May 28

tramways garratt

S. 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, 2008.2 -
Risk-free interest rate 3. gallons at an average price of U.S. gallons at an average price of
U.$0 .$380 million to fix the treasury component on
these future debt issuances.

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

64 3.S. 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." It pulled tons of steel ingots at the plant and
operated in that capacity until the 1980s . 746, and side dump gondola No.