Canadian National Announces Reporting Changes in the First Quarter of Illinois Central Control.

MONTREAL--(BUSINESS WIRE)--Oct. 1, 1999--

(ME:CNR.) (TSE:CNR.) (NYSE:CNI) Canadian National (CN) announced today it will start consolidating the financial results of Illinois Central Corporation (IC) in its forthcoming third-quarter 1999 financial statements.

The consolidation of financial statements will be applied retroactively to Jan. 1, 1999, to give investors a full picture of the combined Company's year-to-date financial performance. CN accounted for IC's results on an equity basis prior to taking control of the U.S. railroad on July 1, 1999.

CN's results for the three-month period ended yesterday will be issued on Oct. 19.

Starting with third-quarter 1999, CN will also adopt new revenue and expense classifications, change the way it capitalizes refurbishment of certain fixed assets and various expenses, and employ a new method to determine workers' compensation liability.

"These changes will allow us to manage the new CN as a single entity with harmonized accounting policies," said Claude Mongeau, CN's recently-appointed senior vice-president and chief financial officer. "The changes will also make it easier for investors and investment analysts to compare CN's financial results with those of other North American railroads."

Reflecting the accounting policy changes, CN/IC's consolidated net income for the first half of 1999 was $339 million, compared with CN's reported six-month-1999 net income of $334 million, including $55-million of equity in the earnings of IC.

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, Montreal, Halifax, New Orleans, and Mobile, Ala., and the key cities of Toronto, Buffalo, Chicago, Detroit, Memphis, St. Louis, and Jackson, Miss., with connections to all points in North America.