Canadian National/Illinois Central Integration Launched Today; Canadian National Now is North America's Railroad.

MONTREAL--(BUSINESS WIRE)--July 1, 1999--

Canadian National Railway Company (CN) (NYSE:CNI) (ME:CNR.) (TSE:CNR.) took control today of Illinois Central Corporation (IC), parent of Illinois Central Railroad Company and launched a step-by-step integration of CN and IC operations.

CN now spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico.

CN President and Chief Executive Officer Paul M. Tellier said, "The end-to-end merger of CN and IC at Chicago offers shippers a larger world with greater choice. It offers them extended market reach, integrated, single-line service in fast-growing North American Free Trade Agreement corridors, new routings and gateway options, and quicker, more efficient handling of freight shipments around and through the busy Chicago rail hub. CN's marketing alliance with Kansas City Southern Railway Company complements the CN/IC merger by extending customer reach to the U.S. Southwest and Mexico."

Tellier said CN and IC are a formidable combination. "IC's high level of service reliability, effective teamwork and emphasis on local customer support, together with CN's technology base, strong network management and system of dedicated account managers, will materially improve customer service."

Tellier said CN's top priority "is a seamless integration of the two railroads. Extensive planning is complete. Today we start a methodical integration of CN and IC operations over a one- to three-year period."

Safety and the maintenance of strong customer service are the forefront of the integration process, which includes a new divisional structure to focus CN's operations and marketing groups squarely on customer needs and traffic growth while securing the efficiencies of the merged company.

The new corporate structure took effect today in the United States, with the creation of the Midwest division based in Chicago and Gulf division headquartered in Jackson, Miss. Three new Canadian divisions -- Pacific, Prairie and Eastern Canada -- were established May 1.

"The new organizational structure will produce a strong North American network benefiting from centralized strategic leadership and standards, as well as economies of scale," Tellier said. "At the same time it will empower field-level managers and new divisional sales forces, giving them greater autonomy to serve shippers and to respond to local market opportunities. Significantly, more officers will have expense and revenue management responsibilities."

Shippers will not perceive any significant change during the initial stages of the integration process. The integration has a number of key steps:

--   Centralized coordination of network operations, power
     distribution and car fleet allocation will start this month. This
     will simplify car interchange at Chicago, improving car transit
     times and productivity. No immediate changes will occur in
     front-line supervision or basic processes such as car ordering,
     car releasing and tracing. Future changes will be introduced and
     communicated to employees and customers well in advance of
     implementation.

--   A staged integration of CN and IC information technology (IT)
     systems will commence today, with minor changes being made
     initially to allow the new rail system to coordinate activities
     and share information effectively. CN's and IC's IT systems will
     continue to operate separately until July 2000.

--   CN will re-launch its Web site later this month with
     state-of-the-art technology for customers to track shipments.

--   CN's Service Reliability Strategy (SRS) information system will
     replace IC's Traffic Control System (TCS) in July 2000. In the
     interim, the two information systems for car tracing and
     estimated time of arrival for shipments will be linked.

--   Customers initially will continue to deal separately with CN and
     IC for electronic commerce, specifically for service requests,
     bills of lading, freight invoices and payments. Systems
     integration will be tested and implemented by July 2000, after
     which all CN and IC e-commerce will be available through a single
     source.

--   The existing customer support structure will remain in place for
     both CN and IC.

--   The post-merger rail system will retain dedicated account
     managers who will work closely with operations and service
     representatives. Major shared accounts will have the option of a
     single point of contact starting today, with all shared customers
     having that option by July 2000.

Canadian National Railway Company spans Canada and mid-America, from the Atlantic and Pacific oceans and the Gulf of Mexico, serving the ports of Vancouver, Montreal, Halifax, New Orleans and Mobile, Ala., and key cities of Toronto, Buffalo, Chicago, Detroit, Memphis, St. Louis and Jackson, Miss., with connections to all points in North America.

Attention News Editors:

     Video footage of CN and IC locomotives and trains are available
on satellite.

Canadian Satellite
Time:         14:00 to 14:10 (10 min. window) July 01, 1999
Instructions: Satellite: Anik E 1 no. 8B Channel 16; Video
              Frequency: 4020MHZ; Audio Sub-carrier: 6.8 -
              6.2; C-Band; Polarization on Vertical Mode;
              Satellite Position: 111.1 Degrees West; Anik
              Express / 10 minute window.

U. S. Satellite
Time:         14:15 to 14:30 (15 min. window) July 01, 1999
Instructions: Satellite: Telstar 5 Transponder 14 Channel 14;
              Video Frequency: 3980; C-Band; Polarization
              Horizontal; Audio Sub-carrier: 6.2 - 6.8;
              Satellite Position 97 Degrees West.