Canadian National, Illinois Central and Norfolk Southern Reach Agreement Concerning Proposed CN/IC Merger.

MONTREAL and NORFOLK, Va.--(BUSINESS WIRE)--Nov. 19, 1998-- Canadian National Railway Company (CN) (ME:CNR) (TSE:CNR) (NYSE:CNI), Illinois Central Corporation (IC) and Norfolk Southern Railway Company (NS) (NYSE:NSC) have reached a settlement agreement on outstanding issues in connection with the proposed CN/IC merger.

The agreement is subject to U.S. Surface Transportation Board (STB) approval of the CN/IC transaction.

Canadian National President and Chief Executive Officer Paul M. Tellier said: "I am gratified that CN, IC and NS were able to hammer out an industry solution to issues arising from the proposed CN/IC merger -- the approach the STB has said it favors in such transactions -- and that the railroads employed existing goodwill to forge a sound working relationship. This bodes well for the future."

David R. Goode, chairman, president and chief executive officer of Norfolk Southern Corporation, the parent of Norfolk Southern Railway, said: "NS is satisfied that the parties' settlement agreement fully and adequately addresses the concerns that NS has raised in this proceeding regarding the potential adverse impacts of the proposed CN/IC consolidation on capacity, congestion and service quality on CN/IC and NS rail lines and facilities. NS believes that such issues are best resolved by the parties themselves and is pleased that the parties were able to reach a privately negotiated arrangement."

Illinois Central President and Chief Executive Officer John D. McPherson said: "I am pleased that IC and CN have been able to address in full all of Norfolk Southern's capacity concerns relating to IC. IC and NS already have a strong partnership under which NS freight trains move over IC track in Illinois, and I'm optimistic that this settlement will solidify a good relationship between CN/IC and NS."

In recognition of the settlement agreement, NS will not oppose the CN/IC merger application or CN/IC's application for terminal trackage rights in Springfield, Ill. NS has also agreed to withdraw its request for conditions on the CN/IC transaction that are now pending before the STB. NS had previously filed a submission with the STB seeking certain conditions to STB approval of the CN/IC merger application.

Canadian National Railway Company (NYSE: CNI; TSE/ME: CNR) serves all of Canada and the U.S. Midwest, including the ports of Vancouver, Montreal and Halifax, and the key cities of Toronto, Chicago, Detroit and Buffalo, with connections to all points in North America.

Illinois Central Corporation, whose principal subsidiary is the Illinois Central Railroad Company, has a rail network consisting of approximately 3,370 route-miles (5,390 route-kilometres) of track running north-south between Chicago and the Gulf of Mexico, and east-west between Chicago and Nebraska and Iowa.

Norfolk Southern Railway Company, a major freight railroad, is the principal subsidiary of Norfolk Southern Corporation (NYSE: NSC), a Virginia-based holding company with headquarters in Norfolk, Va.