CN Announces Partnership With BC Rail.Business Editors VANCOUVER, British Columbia--(BUSINESS WIRE)--Nov. 25, 2003 Partnership Will Benefit Province's Forest Products Industry, Ensure Effective Rail Competition and Promote Economic Development of B.C.'s North CN (NYSE NYSE See: New York Stock Exchange : CNI (1) (Certified NetWare Instructor) See Novell certification. (2) (Coalition for Networked Information, Washington, DC, www.cni.org) A partnership of the Association of Research Libraries, CAUSE and EDUCOM, founded in 1990. )(TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension : CNR See riser card. CNR - Communication and Network Riser ) announced today it will pay the B.C. government $1 billion in cash to acquire the outstanding shares of BC Rail Ltd., along with the right to operate over BC Rail's roadbed road·bed n. 1. a. The foundation upon which the ties, rails, and ballast of a railroad are laid. b. A layer of ballast directly under the ties. 2. The foundation and surface of a road. under a long-term lease. BC Rail's rail bed will remain in public hands, with CN assuming responsibility for rail transportation and infrastructure maintenance. E. Hunter Harrison E. Hunter Harrison (born 1944) is a Tennessee-born railroader who currently is the president and Chief Executive Officer of Canadian National Railway (CN). Life Born in Tennessee, he began as a carman-oiler at the Frisco Railroad in Memphis, Tennessee in 1964, , president and chief executive officer of CN, said: "CN is pleased that the B.C. government has selected us to partner with BC Rail. Our financial strength, operating excellence, and investment in the future of BC Rail will create lasting economic value for all of B.C. "Purchasing the BC Rail franchise is a strategically important initiative for CN, one that will strengthen our forest products business and that has significant scope for shareholder value creation. "We firmly believe our plan for BC Rail will best serve the province's forest products industry, northern communities and vital tourism trade. The rail combination will offer BC Rail shippers unparalleled routes to major NAFTA NAFTA in full North American Free Trade Agreement Trade pact signed by Canada, the U.S., and Mexico in 1992, which took effect in 1994. Inspired by the success of the European Community in reducing trade barriers among its members, NAFTA created the world's and international markets - a new network of routes that will strengthen the competitiveness of the B.C. economy. "Our partnership with B.C. also reflects CN's commitment to promote open and fair competition and to share the transaction's synergies with shippers. We will offer BC Rail's shippers the 'best of both worlds' - the efficiencies and route advantages of CN's single line-service to key markets, and the option of routing traffic to other railways at the Vancouver gateway at lower average rates than those now charged by BC Rail." Harrison said: "Another key objective of our partnership is economic and community development in B.C.'s North. First, we will locate our B.C. North Division office in Prince George Prince George, city (1991 pop. 69,653), central British Columbia, Canada, at the confluence of the Fraser and Nechako rivers. It is a railroad division point and a distribution center for a lumber region. and inject new work into the city's BC Rail shop complex. These initiatives will assure local decision-making and a highly responsive work force to meet the needs of BC Rail shippers, and help mitigate the employment impact of new rail efficiencies. Second, CN is committed to grow freight volumes in the Northwest Corridor in cooperation with the Port of Prince Rupert Prince Rupert, city (1991 pop. 16,620), W British Columbia, Canada, on Kaien Island, in Chatham Sound near the mouth of the Skeena River, S of the Alaska border. . And third, we will actively support the introduction of new and exciting train tours over BC Rail between Vancouver, Whistler whistler: see marmot. See Windows XP. and the B.C. North. CN and BC Rail will soon request proposals from qualified companies to select third party operators for these trains." CN plans to invest one million dollars in a new state-of-the-art wheel shop at BC Rail's Prince George Shop complex, and will in-source wheel work currently contracted out and assign CN system freight car and locomotive work to the facility. Harrison also said: "CN has extensive experience in working with Aboriginal groups, supports the treaty process and will respect existing agreements and protocols with BC Rail." The integration of CN and BC Rail operations will be conducted in step-by-step fashion over a three-year period, ensuring a smooth transition for shippers and fair treatment of employees. Excluding 115 employees who are already inactive, BC Rail currently has a workforce of 1,380 employees. CN's operating plan in future will require a workforce of 950, including 95 employees who would be surplus were it not for the company's plan to perform new mechanical work at BC Rail's Prince George shops, and 60 employees to be relocated within CN's system in Western Canada
Western Canada, commonly referred to as the West . CN estimates 250 BC Rail employees are eligible for early retirement, and that the remaining 180 job reductions will be accomplished by attrition or severance. "We will do our utmost to work with BC Rail communities to pursue growth opportunities and to find creative ways to lessen the impact of our operating plan on employment levels," said Harrison. CN expects the combined CN/BC Rail networks to generate revenue gains from market share captured from trucks, and to produce cost synergies from new operating efficiencies and greater asset utilization. CN will finance the transaction with debt and expects it to be accretive to its earnings per share and free cash flow in the first year of BC Rail operation. Harrison said: "CN is a shareholder focused company. Since the company's initial public offering in November 1995, CN's share price has grown by almost 500 per cent. "CN has a record of flawlessly bringing other railroads into its system. This success has delivered real benefits to shippers, shareholders and employees. We expect nothing less in the integration of BC Rail into CN's network." The B.C. government will enact legislation to effect the partnership with CN. The transaction is subject to approval by Canada's Competition Bureau and is expected to close in the first quarter of 2004. Information on the partnership and maps of the combined networks are available at www.cn.ca/BCRailpartnership, or click on the CN-BC Rail icon on CN's home page, www.cn.ca/. 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. Reference should be made to CN's most recent Form 40-F filed with the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Securities and Exchange Commission, and the Annual Information Form filed with the Canadian securities regulators, for a summary of major risks. Canadian National Railway Company Canadian National Railway Company (NYSE: CNI, TSX: CNR) is a Canadian rail transportation company that operates the Canadian National Railway. It was created in December, 1918 as a Crown corporation of the Government of Canada to nationalize several bankrupt rail systems spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of Mexico Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east , serving the ports of Vancouver, Prince Rupert, B.C., Montreal, Halifax, New Orleans New Orleans (ôr`lēənz –lənz, ôrlēnz`), city (2006 pop. 187,525), coextensive with Orleans parish, SE La., between the Mississippi River and Lake Pontchartrain, 107 mi (172 km) by water from the river mouth; founded , 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 North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . FACT SHEET BC Rail and CN a partnership creating lasting value for B.C. Significantly improves BC Rail service -- CN, with 1,300 route miles The number of miles that are spanned by a telecommunications network. It does not include combined wire mileage due to multiple wires or fibers within a single cable or by overlapping segments, just the total geographic distance between cities or other terminal points. of track and 1,400 employees in B.C., offers BC Rail shippers the shortest and fastest route to key NAFTA markets - 700 miles less to Toronto and Memphis than competing carriers and 650 miles less to Chicago. CN has strong relationships with connecting U.S. carriers operating in the Western U.S. -- CN is the only railroad connecting directly with BC Rail at Prince George and North Vancouver North Vancouver, city (1991 pop. 38,436), SW British Columbia, Canada, on Burrard Inlet of the Strait of Georgia, opposite Vancouver, of which it is a suburb. Shipbuilding, woodworking, and the shipping of grain, lumber, and ore are the chief industries. . Network integration will create a critical mass of traffic at Prince George to start a new "Chicago Express Chicago Express Airlines, Inc. (IATA: C8, ICAO: WDY, and Callsign: Windy City) was a regional airline formerly based at Chicago Midway International Airport located in Chicago, Illinois. It operated regional feeder services under the name ATA Connection. " train for the forest products industry on a schedule of less than four days. -- CN's industry-leading "scheduled railroading rail·road·ing n. The construction or operation of railroads. Noun 1. railroading - the activity of designing and constructing and operating railroads rail technology " practices will offer BC Rail customers trip plans for shipments measured in hours, not days. -- Improved car fleet - CN will acquire 600 new centrebeam cars and upgrade 1,500 boxcars box·car n. 1. A fully enclosed railroad car, typically having sliding side doors, used to transport freight. 2. boxcars Games A pair of sixes on the first throw in craps. Noun 1. to accommodate anticipated truck share gains in the forest products segment. Fleet capacity will also increase as a result of improved car cycles. -- CN's unique Guaranteed Car Supply Program will assure shippers the right car, at the right place, at the right time. "Best of both worlds" for B.C. shippers -- CN commits to share merger synergies with shippers and assure them competitive options through its Open Gateway Rate and Service Commitment. Shippers will be able to choose the efficiencies and route advantages of CN's single-line services to key markets. They will also maintain the option of routing traffic to other railways at the Vancouver gateway at rates, on average, that are seven per cent less than those now charged by BC Rail. -- Shippers choosing to route traffic via competitive railroads at Vancouver will have access to pre-established, public rates and receive service equal to that which CN provides for its own traffic. New work in Prince George, potential new container terminal A container terminal is a facility where cargo containers are transhipped between different transport vehicles, for onward transportation. The transhipment may be between ships and land vehicles, for example trains or trucks, in which case the terminal is described as a at Prince Rupert -- CN will make Prince George home to its new B.C. North Division office and will inject new work into the city's BC Rail shops. -- The new office will oversee B.C. North operations and house a customer-support pod for the forest products industry. With 75 per cent of B.C. forest products shippers located within 200 miles of Prince George, the new office will improve responsiveness to forest products shippers. -- CN will invest $1 million in a modern system wheel shop at BC Rail's Prince George Shop Complex, and in-source CN system freight car and locomotive work there. -- CN is uniquely positioned to leverage the competitive advantages of the Port of Prince Rupert and Northwest trade corridor and is actively working with the port on a potential new container terminal at Prince Rupert to move traffic from Asia to Eastern Canada Eastern Canada (also the Eastern provinces) is the region of Canada generally considered to be east of Manitoba, consisting of the following provinces:
up to $15 million in rail infrastructure improvements to accommodate double-stack container trains on its BC North line. -- With increased traffic anticipated in the new partnership with BC Rail, CN is committed to reopen the link between Dawson Creek and Hythe to facilitate grain movements from the Peace Region. -- CN will actively support the introduction of new and exciting train tours over BC Rail between Vancouver, Whistler and the B.C. North. CN and BC Rail soon will request proposals from qualified companies to select third parties to operate these trains. -- CN will work with the B.C. government to facilitate the upgrading of the Sea-to-Sky Highway and ensure rail alternatives for a successful 2010 Winter Olympics. -- CN has extensive experience in working with Aboriginal groups, supports the treaty process and will respect BC Rail's agreements and protocol. Fair value for British Columbians This is a list of notable people born, raised, or long-time resident to the Canadian province of British Columbia. Premiers
-- CN will pay the B.C. government $1 billion in cash to acquire the outstanding shares of BC Rail Ltd., along with the right to operate over BC Rail's roadbed under a 60-year lease, which is renewable for a further 30 years. -- CN's operation of BC Rail will generate new tax streams for municipalities along the BC Rail network and for the B.C. government, including approximately $7 million in new property taxes for cities and towns. -- The transaction will leave in government hands BC Rail's important Port Subdivision The Port Subdivision is a railroad line owned by New York Central Lines LLC and operated by CSX Transportation in the U.S. state of New York. The line runs from Selkirk north to Albany[1] along a former New York Central Railroad line. entering Deltaport and Roberts Bank Port, and other surplus real estate assets. -- The transaction will significantly improve rail service, improving the competitiveness of B.C. industry. |
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