ONWARD TOGETHER 2019 annual report Except where otherwise indicated, all financial information reflected in this document is expressed in Canadian dollars and determined on the basis of United States generally accepted accounting principles (GAAP). Certain statements included in this annual report constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and under Canadian securities laws. By their nature, forward-looking statements involve risks, uncertainties and assumptions. The Company 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 are not guarantees of future performance and involve risks, uncertainties and other factors that may cause the actual results or performance of the Company to be materially different from the outlook or any future results or performance 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, the effects of general economic and business conditions; 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 that could disrupt operations, including natural events such as severe weather, droughts, fires, floods and earthquakes; climate change; labour negotiations and disruptions; environmental claims; uncertainties of investigations, proceedings or other types of claims and litigation; risks and liabilities arising from derailments; timing and completion of capital programs; and other risks detailed from time to time in reports filed by CN with securities regulators in Canada and the United States. Reference should be made to “Management’s Discussion and Analysis” 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 (www.cn.ca), for a description of major risk factors. 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. As used herein, “Company” or “CN” refers to Canadian National Railway Company and, as the context requires, its wholly-owned subsidiaries. TABLE OF CONTENTS II Highlights IV Message from Robert Pace V Message from JJ Ruest VIII CN100 – A Moving Celebration X Delivering Responsibly for a Sustainable Future XIV Delivering Superior Service for Our Customers XVII Growth through Operational Supply Chain Leadership XX Taking Precision Scheduled Railroading to New Heights XXII Board of Directors XXIII Select Senior Officers of the Company XXIV Shareholder and Investor Information FINANCIAL SECTION 1 Selected Railroad Statistics – unaudited 2 Management’s Discussion and Analysis 54 Management’s Report on Internal Control over Financial Reporting 55 Report of Independent Registered Public Accounting Firm photo above by: Tim Stevens, CN Lubricator Maintainer Hinton, AB 58 Consolidated Financial Statements cover photo by: 62 Notes to the Consolidated Matthew Waller, CN Locomotive Engineer Jasper, AB Financial Statements CN 2019 ANNUAL REPORT I Hay River Fort Nelson HIGHLIGHTS Prince Rupert Fort McMurray Reinvesting in the Company Prince George $ CAPITAL Edmonton Sept-Îles EXPENDITURES Saskatoon 3.9B Kamloops Baie-Comeau We completed a record capital expenditure program to increase capacity, particularly Matane Calgary in our Western Region, supporting our ability to grow at low incremental cost. Vancouver Winnipeg Hearst Moncton Regina Thunder Bay Slower revenue growth Quebec Halifax Montreal Saint John Sault $ Duluth Ste. Marie REVENUES Stevens 14.9B Chippewa Falls Point Green Toronto 2019 revenues rose by $0.6 billion, or 4%, compared to 2018, Minneapolis/St. Paul Bay which was less than expected due to slower economic growth. Arcadia Sarnia Buffalo Fond du Lac Detroit Conneaut Sioux City Stable earnings Joliet Toledo Omaha Chicago Pittsburgh ADJUSTED East Peoria $ DILUTED $ DILUTED Springfield Indianapolis 1 Decatur 5.83 EPS 5.80 EPS East St. Louis While diluted earnings per share decreased 1% compared to 2018, adjusted diluted EPS1 increased 5%. Improved fuel efficiency Memphis TONS OF CARBON 48K EMISSIONS SAVED Jackson 2019 fuel efficiency (GTMs per US gallon of fuel consumed) improved 1%, saving Gulfport Mobile approximately 48,000 tons of carbon emissions, and maintaining CN’s fuel Baton Rouge Pascagoula efficiency leadership versus the average of Class I North American railways. New Orleans 1 See the section entitled Adjusted performance measures in the MD&A for an explanation of this non-GAAP measure. II CN 2019 ANNUAL REPORT Hay River Fort Nelson Prince Rupert Fort McMurray Prince George Edmonton Sept-Îles Saskatoon Kamloops Baie-Comeau Matane Calgary Vancouver Winnipeg Hearst Moncton Regina Thunder Bay Quebec Halifax Montreal Saint John Sault Duluth Ste. Marie Stevens Chippewa Falls Point Green Toronto Minneapolis/St. Paul Bay Arcadia Sarnia Buffalo Fond du Lac Detroit Conneaut Sioux City Joliet Toledo Pittsburgh Omaha East Peoria Chicago Springfield Indianapolis Decatur East St. Louis Memphis CN main lines Jackson Secondary and feeder lines Shortline partners Gulfport Mobile Baton Rouge Ports served by CN Pascagoula New Orleans CN 2019 ANNUAL REPORT III MESSAGE FROM ROBERT PACE I feel honoured to serve as Chair of the Board of our magnificent Company, especially now during the 100th anniversary of its founding. Throughout this special year, I’ve had the opportunity to celebrate with thousands of people from coast to coast to coast. CELEBRATING 100 YEARS OF SERVICE STRIVING FOR THE HIGHEST STANDARDS One of the most notable CN100 events for me was At CN, we believe an ethical business is a sustainable participating in a citizenship ceremony for 11 new Canadians business. That’s why we strive to continuously improve in my hometown of Halifax, NS. The special event took place our culture of integrity and ensure transparency in our aboard CN’s historic business car at Pier 1 in Halifax. I had the communications. CN’s business practices continue to be opportunity to speak to the new citizens about CN’s history recognized. In 2019, The Globe and Mail placed CN first in and its connections to nation-building. CN was a big part the industrials group and seventh overall among Canadian of transporting over one million immigrants from Pier 21 in publicly traded companies for the quality of our governance Halifax between 1925 and 1971. The ceremony was one of the practices. CN was also ranked as one of Corporate Knights’ most memorable events I’ve attended in my years with CN. 2020 Global 100 Most Sustainable Corporations in the World Over the past 100 years, CN has become an iconic brand, and CN received Best in Sector – Industrials honours in synonymous with innovation and operational excellence. Our IR Magazine’s global ranking of investor relations excellence. deep history of innovation includes CNR Radio, North America’s CN has been listed on the Dow Jones Sustainability World first radio network, which later became the Canadian Index for eight consecutive years. Additionally, we continue Broadcasting Corporation. CN also founded Trans-Canada to be a member of the FTSE4Good Index, Global Challenges Airlines, which is now Air Canada, and built telecom Index and Jantzi Social Index, among others. infrastructure that is still in use today. Among CN’s many To benefit from a broader range of perspectives and operational innovations, we were the first North American experiences, CN is making strides to increase diversity railroad to use diesel locomotives in mainline service and, many within the Company and on the Board, where 38% of our years later, we pioneered Precision Scheduled Railroading. directors are women. CN is the first transportation company Today, as we close off our CN100 celebrations, I am proud of in Canada to receive the Progressive Aboriginal Relations our legacy and very encouraged by what the future holds. Bronze Level certification from the Canadian Council for Aboriginal Business. We were also selected as one of REWARDING OUR SHAREHOLDERS Canada’s Best Diversity Employers by The Globe and Mail. On behalf of CN’s Board of Directors, I would like to thank our I’m proud of the Company’s performance in 2019 and I feel shareholders and other stakeholders for their continued support. very optimistic as we move ONWARD, together. In 2019, CN returned $3.2 billion