November 29, 2006 11:00 ET

CN to increase 2007 capital spending to C$1.6 billion

MONTREAL, QUEBEC--(CCNMatthews - Nov. 29, 2006) - CN announced today plans to spend C$1.6 billion on capital programs in 2007, an increase of four per cent over the level of 2006.

E. Hunter Harrison, president and chief executive officer of CN, said: "In 2007 we will invest more than C$1 billion in track infrastructure to maintain a safe railway and to improve the productivity and fluidity of our network across Canada and mid-America. This reflects our key priorities - plant quality and safety, building capacity and speed, accelerating growth potential, and improving productivity across the board."

CN will spend more than C$800 million in 2007 on basic capital, replacing rail, ties and other track materials and improving bridges. CN will also invest close to C$200 million in network and growth-related projects, including:

- Extended sidings and double-stack clearances on the railway's B.C. North Line to accommodate container traffic from the Prince Rupert Intermodal Terminal, which is scheduled to open in the second half of 2007;

- New siding capacity between Winnipeg and Chicago, and

- Continued upgrading of its freight car classification yard in Memphis, Tenn.

In Western Canada alone, CN plans to invest nearly C$350 million in track infrastructure to enhance the plant and to take advantage of growth prospects in North American trade with Asia and the boom in the West.

CN's equipment spending is targeted to reach approximately C$350 million in 2007 to tap growth opportunities and to improve the quality of the fleet. This will include about C$200 million for locomotives, covering the acquisition of 65 new units and continued spending on other improvements to the core fleet. Almost C$150 million will be spent on freight cars and intermodal equipment to meet customer requirements in the marketplace.

CN expects to spend more than C$200 million on facilities to grow the business, including transloads and distribution centres, on information technology to improve service and operating efficiency, as well as on other projects that will allow the railroad to increase productivity.

Harrison said: "CN's 2007 capex program - equal to almost 20 per cent of our revenues - represents a major commitment to running a safe, efficient and productive railway for our customers and the communities in which we operate."

This news release contains forward-looking statements. 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. Important factors that could cause such differences include, but are not limited to, industry competition, legislative and/or regulatory developments compliance with environmental laws and regulations, various events which could disrupt operations, including natural events such as severe weather, droughts, floods and earthquakes, the effects of adverse general economic and business conditions, inflation, currency fluctuations, changes in fuel prices, labour disruptions, environmental claims, investigations or proceedings, other types of claims and litigation, and other risks detailed from time to time in reports filed by CN with securities regulators in Canada and the United States. Reference should be made to CN's most recent Form 40-F filed with the United States Securities and Exchange Commission, its Annual Information Form filed with the Canadian securities regulators, its 2005 Annual Consolidated Financial Statements and Notes thereto and Management's Discussion and Analysis (MD&A), as well as its 2006 quarterly consolidated financial statements and MD&A, for a summary of major risks.

CN - 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.C., Montreal, Halifax, New Orleans, and Mobile, Ala., and the key cities of Toronto, Buffalo, Chicago, Detroit, Duluth, Minn./Superior, Wis., Green Bay, Wis., Minneapolis/St. Paul, Memphis, St. Louis, and Jackson, Miss., with connections to all points in North America.

Contact Information

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    System Director, Media Relations
    (905) 669-3384
    Robert Noorigian (Investment Community)
    Vice-President, Investor Relations
    (514) 399-0052