MONTREAL, April 23, 2024 — CN (TSX: CNR) (NYSE: CNI) today reported its financial and operating results for the first quarter ended March 31, 2024.

“Our team of railroaders delivered to plan in the first quarter and our scheduled operating model continued to enhance our service to customers. Looking forward, we are confident for 2024. We are seeing the expected improvements in the economy, and our CN-specific growth opportunities are materializing. We remain committed to delivering on our growth agenda and powering the economy.”

–Tracy Robinson, President and Chief Executive Officer, CN

•Revenue ton miles (RTMs) remained flat at 59,749 (millions).

•Revenues of C$4,249 million, a decrease of C$64 million, or 1%.

•Operating income of C$1,546 million, a decrease of C$116 million, or 7%.

•Operating ratio, defined as operating expenses as a percentage of revenues, of 63.6% an increase of 2.1-points.

•Diluted earnings per share (EPS) of C$1.72, a decrease of 5%.

Reaffirming 2024 and long-term financial outlook (1)

CN reaffirms its 2024 outlook and expects to deliver adjusted diluted EPS growth of approximately 10% and expects to invest approximately C$3.5 billion in its capital program, net of amounts reimbursed by customers. The Company also expects return on invested capital (ROIC) to be within the targeted range of 15%-17%.

CN reiterates its longer-term financial perspective and continues to target compounded annual diluted EPS growth in the range of 10%-15% over the 2024-2026 period driven by growing volumes more than the economy, pricing above rail inflation and incrementally improving efficiency, all of which assumes a supportive economy. (2)

CN's senior officers will review the results and the railway's outlook in a conference call starting at 4:30 p.m. Eastern Time on April 23. Tracy Robinson, CN President and Chief Executive Officer, will lead the call. Parties wishing to participate via telephone may dial 1-800-715-9871 (Canada/U.S.), or 1-647-932-3411 (International), using 7188340 as the passcode. Participants are advised to dial in 10 minutes prior to the call.

CN's full-year adjusted diluted EPS outlook (2) excludes certain adjustments, which are expected to be comparable to adjustments made in prior years. However, management cannot individually quantify on a forward-looking basis the impact of these adjustments on its adjusted diluted EPS because these items, which could be significant, are difficult to predict and may be highly variable. As a result, CN does not provide a corresponding GAAP measure for, or reconciliation to, its adjusted diluted EPS outlook.

Certain statements included in this news release constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and under Canadian securities laws, including statements based on management’s assessment and assumptions and publicly available information with respect to CN. By their nature, forward-looking statements involve risks, uncertainties and assumptions. CN cautions that its assumptions may not materialize and that current economic conditions render such assumptions, although reasonable at the time they were made, subject to greater uncertainty. Forward-looking statements may be identified by the use of terminology such as "believes," "expects," "anticipates," "assumes," "outlook," "plans," "targets", or other similar words.

CN has made a number of economic and market assumptions in preparing its 2024 outlook. The Company continues to assume slightly positive North American industrial production in 2024. For the 2023/2024 crop year, the grain crop in Canada was below its three-year average (also below when excluding the significantly lower 2021/2022 crop year) and the U.S. grain crop was above its three-year average. The Company continues to assume that the 2024/2025 grain crop in Canada will be in line with its three-year average (excluding the significantly lower 2021/2022 crop year) and the U.S. grain crop will also be in line with its three-year average. CN continues to assume RTM growth in the mid-single digit range. CN assumes continued pricing above rail inflation upon contract renewals. CN also continues to assume that in 2024, the value of the Canadian dollar in U.S. currency will be approximately $0.75, and now assumes that in 2024 the average price of crude oil (West Texas Intermediate) will be approximately in the US$80 - US$90 range per barrel (compared to its January 23, 2024 assumption of approximately US$70 - US$80 per barrel).

CN has made a number of economic and market assumptions in preparing its three-year financial perspective. CN assumes that the North American industrial production will increase by at least two percent CAGR over the next three years. CN assumes continued pricing above rail inflation. CN assumes that the value of the Canadian dollar in U.S. currency will be approximately $0.75 and that the average price of crude oil (West Texas Intermediate) will be approximately US$80 per barrel during this period.

Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and other factors which may cause actual results, performance or achievements of CN to be materially different from the outlook or any future results, performance or achievements implied by such statements. Accordingly, readers are advised not to place undue reliance on forward-looking statements. Important risk factors that could affect the forward-looking statements in this news release include, but are not limited to, general economic and business conditions, including factors impacting global supply chains such as pandemics and geopolitical conflicts and tensions; industry competition; inflation, currency and interest rate fluctuations; changes in fuel prices; legislative and/or regulatory developments; compliance with environmental laws and regulations; actions by regulators; increases in maintenance and operating costs; security threats; reliance on technology and related cybersecurity risk; trade restrictions or other changes to international trade arrangements; transportation of hazardous materials; various events which could disrupt operations, including illegal blockades of rail networks, and natural events such as severe weather, droughts, fires, floods and earthquakes; climate change; labor negotiations and disruptions; environmental claims; uncertainties of investigations, proceedings and other types of claims and litigation; risks and liabilities arising from derailments; timing and completion of capital programs; the availability of and cost competitiveness of renewable fuels and the development of new locomotive propulsion technology; reputational risks; supplier concentration; pension funding requirements and volatility; and other risks detailed from time to time in reports filed by CN with securities regulators in Canada and the United States. Reference should also be made to Management’s Discussion and Analysis (MD&A) in CN’s annual and interim reports, Annual Information Form and Form 40-F, filed with Canadian and U.S. securities regulators and available on CN’s website, for a description of major risk factors relating to CN.

Forward-looking statements reflect information as of the date on which they are made. CN assumes no obligation to update or revise forward-looking statements to reflect future events, changes in circumstances, or changes in beliefs, unless required by applicable securities laws. In the event CN does update any forward-looking statement, no inference should be made that CN will make additional updates with respect to that statement, related matters, or any other forward-looking statement. Information contained on, or accessible through, our website is not incorporated by reference into this news release.

This earnings news release, as well as additional information, including the Financial Statements, Notes thereto and MD&A, is contained in CN’s Quarterly Review available on the Company's website at www.cn.ca/financial-results and on SEDAR+ at www.sedarplus.ca as well as on the U.S. Securities and Exchange Commission's website at www.sec.gov through EDGAR.

CN is a world-class transportation leader and trade-enabler. Essential to the economy, to the customers, and to the communities it serves, CN safely transports more than 300 million tons of natural resources, manufactured products, and finished goods throughout North America every year. CN's network connects Canada’s Eastern and Western coasts with the U.S. South through an 18,800 mile rail network. CN and its affiliates have been contributing to community prosperity and sustainable trade since 1919. CN is committed to programs supporting social responsibility and environmental stewardship.

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(1)Amounts expressed in Canadian dollars and prepared in accordance with United States generally accepted accounting principles (GAAP), unless otherwise noted.

(2)This non-GAAP measure does not have any standardized meaning prescribed by GAAP and therefore, may not be comparable to similar measures presented by other companies. See the supplementary schedule entitled Non-GAAP Measures – Free cash flow for an explanation of this non-GAAP measure.

(3)Operating ratio is defined as operating expenses as a percentage of revenues.

(4)Statistical operating data, key operating measures and safety indicators are unaudited and based on estimated data available at such time and are subject to change as more complete information becomes available. Definitions of gross ton miles, revenue ton miles, freight revenue per RTM, fuel efficiency, train weight, train length, car velocity, through dwell and through network train speed are included within the Company’s Management’s Discussion and Analysis. Definitions of all other indicators are provided on CN's website, www.cn.ca/glossary.

(5)Based on Federal Railroad Administration (FRA) reporting criteria.

(1)This non-GAAP measure does not have any standardized meaning prescribed by GAAP and therefore, may not be comparable to similar measures presented by other companies. See the supplementary schedule entitled Non-GAAP Measures – Constant currency for an explanation of this non-GAAP measure.

(2)Amounts expressed in Canadian dollars.

(3)Statistical operating data and related key operating measures are unaudited and based on estimated data available at such time and are subject to change as more complete information becomes available.

In this supplementary schedule, the "Company" or "CN" refers to Canadian National Railway Company, together with its wholly-owned subsidiaries. Financial information included in this schedule is expressed in Canadian dollars, unless otherwise noted.

CN reports its financial results in accordance with United States generally accepted accounting principles (GAAP). The Company also uses non-GAAP measures that do not have any standardized meaning prescribed by GAAP, including adjusted performance measures, free cash flow, constant currency and adjusted debt-to-adjusted EBITDA multiple. These non-GAAP measures may not be comparable to similar measures presented by other companies. From management's perspective, these non-GAAP measures are useful measures of performance and provide investors with supplementary information to assess the Company's results of operations and liquidity. These non-GAAP measures should not be considered in isolation or as a substitute for financial measures prepared in accordance with GAAP.

The Company did not present any adjusted performance measures as there were no adjustments in the first quarter of 2024 and 2023.

(1)Represents the present value of operating lease payments.

(2)Represents the total funded deficit of all defined benefit pension plans with a projected benefit obligation in excess of plan assets.

(3)Represents the operating lease costs recorded in Purchased services and material and Equipment rents within the Consolidated Statements of Income.

(4)Relates to advisory fees related to shareholder matters recorded in Other expense within the Consolidated Statements of Income. See the section entitled Non-GAAP measures - Adjusted performance measures of the Company's 2023 Annual MD&A for additional information.

The accompanying unaudited Interim Consolidated Financial Statements ("Interim Consolidated Financial Statements"), expressed in Canadian dollars, have been prepared in accordance with United States generally accepted accounting principles (GAAP) for interim financial statements. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements. In management's opinion, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included. Interim operating results are not necessarily indicative of the results that may be expected for the full year.

These Interim Consolidated Financial Statements have been prepared using accounting policies consistent with those used in preparing CN's 2023 Annual Consolidated Financial Statements and should be read in conjunction with such statements and Notes thereto.

(1)As at March 31, 2024, the Company had remaining performance obligations related to freight in-transit, for which revenues of $82 million ($98 million as at March 31, 2023) are expected to be recognized in the next period.

The Company has various retirement benefit plans under which substantially all of its employees are entitled to benefits at retirement age, generally based on compensation and length of service and/or contributions. Additional information relating to the retirement benefit plans is provided in Note 18 – Pensions and other postretirement benefits to the Company's 2023 Annual Consolidated Financial Statements.

For details on the Company's available financing sources, see Note 16 – Debt to the Company's 2023 Annual Consolidated Financial Statements. For the three months ended March 31, 2024, the following changes occurred:

On March 28, 2024, the Company's revolving credit facility agreements were amended to extend their respective tenors by one additional year each. The unsecured credit facility of $2.5 billion consists of two tranches of $1.25 billion and are now maturing on March 31, 2027 and March 31, 2029. The unsecured credit facility of $1.0 billion is now maturing on March 17, 2026. On March 28, 2024, the Company amended its revolving credit facilities to transition from the Canadian Dollar Offered Rate (CDOR) to the Canadian Overnight Repo Rate Average (CORRA). The credit facilities provide borrowings at various benchmark interest rates, such as the Secured Overnight Financing Rate (SOFR) and CORRA, plus applicable margins, based on CN's credit ratings. Both revolving credit facility agreements have one financial covenant, which limits debt as a percentage of total capitalization. The Company is in compliance as at March 31, 2024.

As at March 31, 2024 and December 31, 2023, the Company had no outstanding borrowings under these revolving credit facilities and there were no draws during the three months ended March 31, 2024.

During the first three months of 2024, the Company repaid $10 million of its equipment loans and on March 22, 2024, issued a $412 million equipment loan under these facilities. As at March 31, 2024 and December 31, 2023, the Company had outstanding borrowings of $1,094 million and $677 million, respectively, at a weighted-average interest rate of 6.01% and 6.09%, respectively, and had $366 million and $769 million available to be drawn under these facilities, respectively.

As at March 31, 2024 and December 31, 2023, the Company had total commercial paper borrowings of US$1,730 million ($2,342 million) and US$1,360 million ($1,801 million), respectively, at a weighted-average interest rate of 5.43% and 5.63%, respectively, presented in Current portion of long-term debt on the Consolidated Balance Sheets.

As at March 31, 2024 the Company had accounts receivable securitization borrowings of $100 million at a weighted-average interest rate of 5.36%, secured by and limited to $119 million of accounts receivable, presented in the Current portion of long-term debt on the Consolidated Balance Sheets and had $350 million remaining availability under this facility. As at December 31, 2023, the Company had no outstanding borrowings under the accounts receivable securitization program and had $450 million available under this facility.

(1)Includes brokerage fees.

(2)Includes settlements in subsequent periods.

The Company has various stock-based compensation plans for eligible employees. A description of the major plans other than the changes specified below is provided in Note 20 – Stock-based compensation to the Company's 2023 Annual Consolidated Financial Statements.

(1)Performance share unit (PSU) awards and restricted share unit (RSU) awards are granted under the Share Units Plan. PSU-ROIC awards and PSU-TSR awards settle depending on the level of attainment of a target return on invested capital (ROIC) performance condition, and on the level of attainment of a target total shareholder return (TSR) market condition, respectively, as defined by the award agreement, over the plan period of three years. RSU awards settle depending on continued employment throughout the plan period, and are not subject to market or performance conditions.

(2)Deferred share unit (DSU) awards are granted under the Voluntary Incentive Deferral Plan.

(1)The grant date fair value of equity settled PSU-ROIC awards granted in 2024 of $32 million is valued based on the closing share price of the Company's stock on the date of the grant. As at March 31, 2024, total unrecognized compensation cost related to all outstanding awards was $37 million and is expected to be recognized over a weighted-average period of 2.5 years. PSU-ROIC awards granted as of January 1, 2024 are no longer conditional upon the attainment of a minimum share price market condition for settlement.

(2)The grant date fair value of equity settled PSU-TSR awards granted in 2024 of $27 million is calculated using a Monte Carlo simulation model. As at March 31, 2024, total unrecognized compensation cost related to all outstanding awards was $39 million and is expected to be recognized over a weighted-average period of 2.3 years. The Company's TSR as of January 1, 2024 is measured relative to the S&P North American LargeMidCap transportation index.

(3)The grant date fair value of equity settled RSU awards granted in 2024 of $17 million is valued based on the closing share price of the Company's stock on the date of the grant. As at March 31, 2024, total unrecognized compensation cost related to all outstanding awards was $19 million and is expected to be recognized over a weighted-average period of 2.6 years.

(4)Units granted in lieu of dividends are included for the Share Unit Plan awards granted as of January 1, 2024. As they relate to a minimal amount of units, they have not been quantified.

(5)Equity settled PSU-ROIC awards granted in 2021 met the minimum share price condition for settlement and attained a performance vesting factor of 190%. Equity settled PSU-TSR awards granted in 2021 attained a performance vesting factor of 119%. In the first quarter of 2024, these awards were settled, net of the remittance of the participants' withholding tax obligation of $46 million, by way of disbursement from the Share Trusts of 0.3 million common shares.

(1)The grant date fair value of equity settled DSU awards granted in 2024 of $4 million is calculated using the Company's stock price on the grant date. As at March 31, 2024, the aggregate intrinsic value of all equity settled DSU awards outstanding amounted to $65 million.

(2)The total fair value of equity settled DSU awards vested, the number of units outstanding that were nonvested, unrecognized compensation cost, the remaining recognition period, and the withholding tax obligation remitted on the settlement of DSU awards have not been quantified as they relate to a minimal number of units.

As at March 31, 2024 the liability for cash settled DSU awards was $5 million based on a closing stock price of $178.37 ($5 million based on a closing stock price of $166.55 as at December 31, 2023).

(1)Stock options with a US dollar exercise price have been translated into Canadian dollars using the foreign exchange rate in effect at the balance sheet date.

(2)The grant date fair value of options granted in 2024 of $14 million ($36.60 per option) is calculated using the Black-Scholes option-pricing model. The options granted in 2024 vest over a four-year period compared to a five-year period for options granted in the years 2020 to 2023. As at March 31, 2024, total unrecognized compensation cost related to all outstanding awards was $30 million and is expected to be recognized over a weighted-average period of 3.4 years.

(3)The weighted-average term to expiration of options outstanding was 6.6 years and the weighted-average term to expiration of exercisable stock options was 5.3 years. As at March 31, 2024, the aggregate intrinsic value of in-the-money stock options outstanding amounted to $145 million and the aggregate intrinsic value of stock options exercisable amounted to $112 million.

(1)As at March 31, 2024, total fair value of units purchased with Company contributions that vested in 2024 was $7 million.

(2)As at March 31, 2024, total unrecognized compensation cost related to all outstanding awards was $17 million and is expected to be recognized over the next twelve months.

(1)The Company releases stranded tax effects from Accumulated other comprehensive loss to Net income upon the liquidation or termination of the related item.

(2)Foreign exchange gain (loss) on translation of net investment in foreign operations.

(3)Foreign exchange gain (loss) on translation of US dollar-denominated debt designated as a hedge of the net investment in foreign operations. The Company designates US dollar-denominated debt of the parent company as a foreign currency hedge of its net investment in foreign operations. Accordingly, from the dates of designation, foreign exchange gains and losses on translation of the Company's US dollar-denominated debt are recorded in Accumulated other comprehensive loss, which minimizes the volatility of earnings resulting from the conversion of US dollar-denominated debt into Canadian dollars.

(4)Total before tax reclassified to Other components of net periodic benefit income in the Consolidated Statements of Income and included in net periodic benefit cost. See Note 4 – Pensions and other postretirement benefits for additional information.

(5)Cumulative gains or losses of the treasury locks are included in Derivative instruments.

As at March 31, 2024, the Company had fixed and variable commitments to purchase locomotives, engineering services, rail, information technology services and licenses, railroad cars, rail ties, wheels as well as other equipment and services with a total estimated cost of $2,517 million. Costs of variable commitments were estimated using forecasted prices and volumes.

In the normal course of business, the Company becomes involved in various legal actions seeking compensatory and occasionally punitive damages, including actions brought on behalf of various purported classes of claimants and claims relating to employee and third-party personal injuries, occupational disease and property damage, arising out of harm to individuals or property allegedly caused by, but not limited to, derailments or other accidents.

As at March 31, 2024, the Company had aggregate reserves for personal injury and other claims of $299 million, of which $62 million was recorded as a current liability ($311 million as at December 31, 2023, of which $51 million was recorded as a current liability).

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 as at March 31, 2024, or with respect to future claims, cannot be reasonably determined. When establishing provisions for contingent liabilities the Company considers, where a probable loss estimate cannot be made with reasonable certainty, a range of potential probable losses for each such matter, and records the amount it considers the most reasonable estimate within the range. However, when no amount within the range is a better estimate than any other amount, the minimum amount in the range is accrued. For matters where a loss is reasonably possible but not probable, a range of potential losses cannot be estimated due to various factors which may include the limited availability of facts, the lack of demand for specific damages and the fact that proceedings were at an early stage. Based on information currently available, the Company believes that the eventual outcome of the actions against the Company will not, individually or in the aggregate, have a material adverse effect on the Company's financial position. However, due to the inherent inability to predict with certainty unforeseeable future developments, there can be no assurance that the ultimate resolution of these actions will not have a material adverse effect on the Company's results of operations, financial position or liquidity.

The Company's provision for specific environmental sites is undiscounted and includes costs for remediation and restoration of sites, as well as monitoring costs. Costs related to any unknown existing or future contamination will be accrued in the period in which they become probable and reasonably estimable. Additional information relating to the Company's environmental matters is provided in Note 22 – Major commitments and contingencies to the Company's 2023 Annual Consolidated Financial Statements.

As at March 31, 2024, the Company had aggregate accruals for environmental costs of $58 million, of which $39 million was recorded as a current liability ($58 million as at December 31, 2023, of which $39 million was recorded as a current liability). The Company anticipates that the majority of the liability at March 31, 2024 will be paid out over the next five years. Based on the information currently available, the Company considers its accruals to be adequate.

As at March 31, 2024, the Company had outstanding letters of credit of $338 million ($337 million as at December 31, 2023) under the committed bilateral letter of credit facilities and $152 million ($152 million as at December 31, 2023) under the uncommitted bilateral letter of credit facilities, and surety and other bonds of $157 million ($157 million as at December 31, 2023), all issued by financial institutions with investment grade credit ratings to third parties to indemnify them in the event the Company does not perform its contractual obligations.

As at March 31, 2024, the maximum potential liability under these guarantee instruments was $647 million ($646 million as at December 31, 2023), of which $605 million ($603 million as at December 31, 2023) related to other employee benefit liabilities and workers' compensation and $42 million ($43 million as at December 31, 2023) related to other liabilities. The guarantee instruments expire at various dates between 2024 and 2025.

As at March 31, 2024, the Company had not recorded a liability with respect to guarantees and indemnifications as the Company did not expect to make any payments under its guarantees and indemnifications.

The Company uses derivative financial instruments from time to time in the management of its foreign currency and interest rate exposures. The Company has limited involvement with derivative financial instruments in the management of its risks and does not hold or issue them for trading or speculative purposes.

The financial instruments that the Company measures at fair value on a recurring basis in periods subsequent to initial recognition are categorized into the following levels of the fair value hierarchy based on the degree to which inputs are observable:

•Level 1: Inputs are quoted prices for identical instruments in active markets

•Level 2: Significant inputs (other than quoted prices included in Level 1) are observable

•Level 3: Significant inputs are unobservable

The carrying amounts of Cash and cash equivalents and Restricted cash and cash equivalents approximate fair value. These financial instruments include highly liquid investments purchased three months or less from maturity, for which the fair value is determined by reference to quoted prices in active markets.

The carrying amounts of Accounts receivable, Other current assets and Accounts payable and other approximate fair value due to their short maturity, unless otherwise specified. The fair value of derivative financial instruments, included in Other current assets and Accounts payable and other is classified as Level 2 and is used to manage the Company's exposure to foreign currency risk and interest rate risk. The fair value is measured by discounting future cash flows using a discount rate derived from market data for financial instruments subject to similar risks and maturities.

The carrying amount of the Company's debt does not approximate fair value. The fair value is estimated based on quoted market prices for the same or similar debt instruments, as well as discounted cash flows using current interest rates for debt with similar terms, company rating, and remaining maturity. The Company classifies debt as Level 2. As at March 31, 2024, the Company's debt, excluding finance leases, had a carrying amount of $19,736 million ($18,435 million as at December 31, 2023) and a fair value of $18,664 million ($17,844 million as at December 31, 2023). The carrying amount of debt excluding finance leases exceeded the fair value due to market rates being higher than the stated coupon rates.

Certain statements included in this MD&A are "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and under Canadian securities laws, including statements based on management’s assessment and assumptions and publicly available information with respect to CN. By their nature, forward-looking statements involve risks, uncertainties and assumptions. CN cautions that its assumptions may not materialize and that current economic conditions render such assumptions, although reasonable at the time they were made, subject to greater uncertainty. Forward-looking statements may be identified by the use of terminology such as "believes," "expects," "anticipates," "assumes," "outlook," "plans," "targets", or other similar words.

Forward-looking statements include, but are not limited to, those set forth in the table below, which also presents key assumptions used in determining the forward-looking statements. See also the section of this MD&A entitled 2024 Business outlook and assumptions.

Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and other factors which may cause actual results, performance or achievements of CN to be materially different from the outlook or any future results, performance or achievements implied by such statements. Accordingly, readers are advised not to place undue reliance on forward-looking statements. Important risk factors that could affect the forward-looking statements include, but are not limited to, general economic and business conditions, including factors impacting global supply chains such as pandemics and geopolitical conflicts and tensions; industry competition; inflation, currency and interest rate fluctuations; changes in fuel prices; legislative and/or regulatory developments; compliance with environmental laws and regulations; actions by regulators; increases in maintenance and operating costs; security threats; reliance on technology and related cybersecurity risk; trade restrictions or other changes to international trade arrangements; transportation of hazardous materials; various events which could disrupt operations, including illegal blockades of rail networks, and natural events such as severe weather, droughts, fires, floods and earthquakes; climate change; labor negotiations and disruptions; environmental claims; uncertainties of investigations, proceedings and other types of claims and litigation; risks and liabilities arising from derailments; timing and completion of capital programs; the availability of and cost competitiveness of renewable fuels and the development of new locomotive propulsion technology; reputational risks; supplier concentration; pension funding requirements and volatility; and other risks detailed from time to time in reports filed by CN with securities regulators in Canada and the U.S., including its Annual Information Form and Form 40-F. See the section entitled Business risks of this MD&A and the Company's 2023 Annual MD&A for a description of major risk factors relating to CN.

Forward-looking statements reflect information as of the date on which they are made. CN assumes no obligation to update or revise forward-looking statements to reflect future events, changes in circumstances, or changes in beliefs, unless required by applicable securities laws. In the event CN does update any forward-looking statement, no inference should be made that CN will make additional updates with respect to that statement, related matters, or any other forward-looking statement. Information contained on, or accessible through, our website is not incorporated by reference into this MD&A.

This Management's Discussion and Analysis (MD&A) dated April 23, 2024, relates to the consolidated financial position and results of operations of Canadian National Railway Company, together with its wholly-owned subsidiaries, collectively "CN" or the "Company," and should be read in conjunction with the Company's March 31, 2024 Interim Consolidated Financial Statements and Notes thereto. It should also be read in conjunction with the Company's 2023 Annual Consolidated Financial Statements, and the 2023 Annual MD&A. All financial information reflected herein is expressed in Canadian dollars and prepared in accordance with United States generally accepted accounting principles (GAAP), unless otherwise noted.

CN's common shares are listed on the Toronto and New York stock exchanges. Additional information about CN filed with Canadian securities regulatory authorities and the United States Securities and Exchange Commission (SEC), including the Company's 2023 Annual Information Form and Form 40-F, may be found online on SEDAR+ at www.sedarplus.ca, on the SEC's website at www.sec.gov through EDGAR, and on the Company's website at www.cn.ca in the Investors section. Printed copies of such documents may be obtained by contacting CN's Corporate Secretary's Office.

•Revenues of $4,249 million, a decrease of $64 million, or 1%.

•Operating income of $1,546 million, a decrease of $116 million, or 7%.

•Operating ratio, defined as operating expenses as a percentage of revenues, of 63.6%, an increase of 2.1-points.

•Diluted earnings per share (EPS) of $1.72, a decrease of 5%.

•Free cash flow of $529 million, a decrease of $64 million, or 11%. (1)

•

•Injury frequency rate of 1.20 (per 200,000 person hours), an increase of 22%. (2)

•Accident rate of 1.68 (per million train miles), an increase of 10%. (2)

•Through dwell remained flat at 7.1 (entire railroad, hours).

•Car velocity of 205 (car miles per day), a decrease of 3%.

•Through network train speed of 18.7 (mph), a decrease of 7%.

•Fuel efficiency of 0.896 (US gallons of locomotive fuel consumed per 1,000 gross ton miles (GTMs)), an improvement of 1%.

•Train length remained flat at 7,787 (feet).

•Revenue ton miles (RTMs) remained flat at 59,749 (millions).

(1)This non-GAAP measure does not have any standardized meaning prescribed by GAAP and therefore, may not be comparable to similar measures presented by other companies. See the section of this MD&A entitled Liquidity and capital resources – Free cash flow for an explanation and reconciliation of this non-GAAP measure.

(2)Based on Federal Railroad Administration (FRA) reporting criteria.

On April 9, 2024, the Federal Railroad Administration (FRA) issued a final rule establishing minimum requirements for the size of train crews depending on the type of operation. The FRA's new rule requires railroad operations to have a minimum of two crew members, except in certain circumstances, including remote-control operations. The rule includes a process to petition the FRA for special approval to operate with fewer than two crew members. The rule will become effective on June 10, 2024. The rail industry has challenged the rule as arbitrary and contrary to law in federal circuit court.

No assurance can be given that these and any other current or future regulatory or legislative initiatives by the U.S. federal government and agencies will not materially adversely affect the Company's results of operations or its competitive and financial position.

On February 29, 2024, the STB accepted CN’s application to acquire control of the Iowa Northern Railroad Company (IANR) and confirmed the transaction qualifies as minor. Under the governing statute, the STB must approve the transaction unless it finds a merger would substantially lessen competition. The STB has set a schedule to perform its review and a final decision is expected to be issued by July 26, 2024 with an effective date of 30 days thereafter.

As at March 31, 2024, CN employed a total of 18,299 employees in Canada, of which 13,415, or 73%, were unionized employees, and 6,880 employees in the U.S., of which 5,812, or 84%, were unionized employees.

On March 1, 2024, CN reached a tentative agreement with United Steel Workers Union (USW) renewing the collective agreement for a three-year term. The agreement covers approximately 2,500 track and bridge employees at CN, primarily responsible for track maintenance across Canada. The agreement is awaiting ratification by its membership.

The four-year tentative agreement reached on January 17, 2024 between Canadian National Transportation Limited (CNTL), a wholly owned subsidiary of the Company, and Unifor, governing approximately 750 owner-operator truck drivers in Canada, was not ratified by union membership. The Minister of Labor has appointed a conciliator and the parties are scheduled to meet on May 1, 2024. The earliest possible date of a labor disruption would be May 7, 2024.

On November 27, 2023, negotiations commenced with Teamsters Canada Rail Conference (TCRC). The TCRC represents approximately 6,600 conductors, conductor trainees, yard coordinators and locomotive engineers across CN’s network in Canada. On February 16, 2024, CN filed a Notice of Dispute with the Minister of Labor. On March 1, 2024 the Minister of Labor appointed a conciliator, and the parties have been meeting with the conciliator to reach a collective agreement. The earliest possible date of labor disruption would be May 22, 2024.

The Company’s collective agreements remain in effect until the bargaining process outlined under the Canada Labor Code has been exhausted.

2024 Business outlook and assumptions

The Company continues to assume slightly positive North American industrial production in 2024. For the 2023/2024 crop year, the grain crop in Canada was below its three-year average (also below when excluding the significantly lower 2021/2022 crop year) and the U.S. grain crop was above its three-year average. The Company continues to assume that the 2024/2025 grain crop in Canada will be in line with its three-year average (excluding the significantly lower 2021/2022 crop year) and the U.S. grain crop will also be in line with its three-year average.

In 2024, the Company continues to expect to invest approximately $3.5 billion in its capital program, net of amounts reimbursed by customers, to improve the safety, efficiency and integrity of its network. These investments are intended to also enable and support the growth of the Company and will be financed with cash generated from operations or with cash from financing activities.

The forward-looking statements discussed in this 2024 Business outlook and assumptions section are subject to risks and uncertainties that could cause actual results or performance to differ materially from those expressed or implied in such statements and are based on certain factors and assumptions which the Company considers reasonable, about events, developments, prospects and opportunities that may not materialize or that may be offset entirely or partially by other events and developments. In addition to the assumptions and expectations discussed in this section, reference should be made to the section of this MD&A entitled Forward-looking statements for assumptions and risk factors affecting such statements.

(1)Operating ratio is defined as operating expenses as a percentage of revenues.

(2)This non-GAAP measure does not have any standardized meaning prescribed by GAAP and therefore, may not be comparable to similar measures presented by other companies. See the section of this MD&A entitled Liquidity and capital resources – Free cash flow for an explanation of this non-GAAP measure.

(3)Total long-term liabilities is the difference between Total liabilities and Total current liabilities.

Revenues for the first quarter of 2024 were $4,249 million compared to $4,313 million for the same period in 2023, a decrease of $64 million, or 1%. The decrease was mainly due to lower Freight revenue per RTM, while volumes remained flat:

•Volumes: remained flat mainly due to higher shipments of potash, refined petroleum products, frac sand, international intermodal and natural gas liquids; offset by lower shipments of coal, grain, forest products and crude oil.

•Freight revenue per RTM: decreased mainly due to lower fuel surcharge revenues and an increase in the average length of haul; partly offset by freight rate increases.

Operating expenses for the first quarter of 2024 were $2,703 million compared to $2,651 million for the same period in 2023. The increase of $52 million, or 2%, was mainly due to higher labor and fringe benefits expense driven by general wage increases and higher average headcount; partly offset by lower fuel prices.

Operating income for the first quarter of 2024 decreased by $116 million, or 7%, to $1,546 million when compared to the same period in 2023. The operating ratio, defined as operating expenses as a percentage of revenues, was 63.6% in the first quarter of 2024 compared to 61.5% in the first quarter of 2023, a 2.1-point increase.

Net income for the first quarter of 2024 was $1,103 million, a decrease of $117 million, or 10%, and diluted earnings per share decreased by 5% to $1.72, when compared to the same period in 2023.

(1)GTMs: The workload performed by system trains in hauling freight or equipment. GTMs are calculated by multiplying the trailing weight by the distance the train moved. A larger number is an indicator of more traffic (and thus more revenue) being moved.

(2)Train weight: An efficiency measurement on how much tonnage each mainline train handles on average as it crosses the network. Calculated as the total of GTMs and divided by total train miles, this measure provides insight on how well each train was maximized in terms of its capacity to move traffic. This operating measure was formerly named Train productivity.

(3)Train length: An efficiency measurement on average trailing length of each mainline train on the network. Calculated as the total of car foot miles (the sum of car length multiplied by miles travelled for each trailing car) divided by total train miles, this measure provides insight on how well each train was maximized in terms of its capacity to move traffic.

(4)Through network train speed: A measure of the line-haul movement from origin to destination, including time at terminals. The average speed is calculated by dividing train miles by total hours operated, excluding yard and local trains, passenger trains, maintenance of way trains, and foreign trains. This measure represents the fluidity of trains on the network, with a higher value also indicating a more fluid network.

(5)Fuel efficiency: This measure represents how efficient the Company is in the generation and utilization of locomotive horsepower in freight train operations, with a lower number indicating improved performance. Fuel efficiency is defined as US gallons of locomotive fuel consumed per 1,000 GTMs.

(6)Through dwell: The average time a car resides within terminal boundaries expressed in hours. The measurement begins with a customer release, received interchange, or train arrival event and ends with a customer placement (actual or constructive), delivered or offered in interchange, or train departure event. This excludes stored, bad ordered, maintenance of way cars, or cars with dwell greater than 10 days. This measure represents the efficiency of handling cars within the terminal, with a lower value indicating higher performance.

(7)Car velocity: The average miles per day traveled by loaded and empty cars (including all active cars whether private, foreign or CN owned) on company lines. This measure represents the fluidity of cars on the network, calculated by the sum of miles each car traveled divided by the sum of all of the cars’ active time, with a higher value indicating a smoother and more fluid operation.

Car velocity and through network train speed were negatively impacted by colder temperatures in Western Canada compared to more favorable winter operating conditions in 2023, congestion around Vancouver and lower crew availability driven by new Canadian Duty and Rest Period Rules which came into effect on May 25, 2023.

This MD&A makes reference to non-GAAP measures, including adjusted performance measures, constant currency, free cash flow and adjusted debt-to-adjusted EBITDA multiple that do not have any standardized meaning prescribed by GAAP and therefore, may not be comparable to similar measures presented by other companies. From management's perspective, these non-GAAP measures are useful measures of performance and provide investors with supplementary information to assess the Company's results of operations and liquidity. These non-GAAP measures should not be considered in isolation or as a substitute for financial measures prepared in accordance with GAAP.

For further details of these non-GAAP measures, including a reconciliation to the most directly comparable GAAP financial measures, refer to the sections of this MD&A entitled Non-GAAP measures: Constant currency, as well as the section entitled Liquidity and capital resources: Free cash flow and Adjusted debt-to-adjusted EBITDA multiple. The Company did not present any adjusted performance measures as there were no adjustments in the first quarter of 2024 and 2023.

(1)This non-GAAP measure does not have any standardized meaning prescribed by GAAP and therefore, may not be comparable to similar measures presented by other companies. See the section of this MD&A entitled Non-GAAP measures – Constant currency for an explanation of this non-GAAP measure.

(2)RTMs is a measure of volumes and is calculated by multiplying the weight in tons of the shipment lading being transported by the number of miles that the shipment is transported on company lines. CN uses RTMs as the primary measure of volumes as compared to Carloads, since RTMs also takes into account the length of haul and weight in the movement.

(3)Freight revenue per RTM is an indicator of yield and represents revenue earned for transporting one ton of freight over a distance of one mile.

For the first quarter of 2024, revenues decreased by $64 million, or 1%, when compared to the same period in 2023, mainly due to lower Freight revenue per RTM, while volumes remained flat:

•Volumes: remained flat mainly due to higher shipments of potash, refined petroleum products, frac sand, international intermodal and natural gas liquids; offset by lower shipments of coal, grain, forest products and crude oil.

•Freight revenue per RTM: decreased mainly due to lower fuel surcharge revenues and an increase in the average length of haul; partly offset by freight rate increases.

Fuel surcharge revenues decreased by $161 million in the first quarter of 2024 compared to the same period in 2023, mainly due to lower applicable fuel prices.