Supply Chain Partners in Coal

1. Supply Chain Partners in Coal Jay Roberts Account Manager - Bulk 2012 Northeast British Columbia Community Coal & Energy Forum October 11, 2012 - Chetwynd, British Columbia

2. Coal mines Ports Coal represents 10% of CN carloads Based on 2011 revenues CN’s Network Spans North America

3. CN CP BNSF • CN network provides built-in redundancy for coal export shipments via West Coast CN has direct access to three terminals on the west coast (Neptune and Westshore in Vancouver and RTI in Prince Rupert) Powder River Basin Multiple Options to West Coast

4. 4165 nautical miles / 13.6 days No queue 3964 nautical miles / 12.9 days Advantage Prince Rupert 5 day queue Aug., 2012 Metal Strategies report Value Proposition – Met Coal

5. 4165 nautical miles / 13.6 days No queue 4415 nautical miles / 14.4 days Advantage Prince Rupert 10 day queue Aug., 2012 Metal Strategies report Value Proposition – Thermal Coal/Petcoke

6. Geopolitically North America is a very stable environment • CN network provides a built-in redundancy of three ports and two separate routes to export • Canadian coal has many advantages • Competitive alternative source versus Australian & Indonesian coal • Established & proven quality coal for the Japanese, Chinese and Korean markets • Proven reserves with the existing mines that can be expanded & new mines that are being developed • Is closer via the Port of Prince Rupert to Japan, China and South Korea than Newcastle, Australia • Canada has all the infrastructure for rail and port required to export additional tonnage with marginal capital expense • CN – Rupert is one supply chain on West Coast of North America with available (or expandable) capacity from current to 30MMT in 2014, with possibility to expand to 60MMT by 2016 Advantages of Canadian West Coast Coal

7. New Mine Projects 1 Quintette (Teck) Coalspur (thermal) Summit Coal HD Mining Xstrata Coal Canada Mount Klappan Cardero Coal Roman Mountain (Peace River) Echo Hill (Hillsborough) (thermal) Kailuan Dehua (Gething) Canadian Dehua (Wapiti River) Alberta Coal (Fox Creek) (thermal) Atrum Coal (Groundhog) Coalmont County Coal Transalta 7 8 6 1 4 3 2 2 3 5 4 5 9 6 7 7 8 9 13 14 11 12 10 15 13 12 10 16 15 11 12 13 14 16 16 Projects Underway 1 2 3 8 7 6 5 4 9

8. A Solid Agenda in Place Becoming a True Supply Chain Enabler Delivering Superior Growth Creating Solid Value for our Shareholders Balancing Operational & Service Excellence A Great Franchise Outside-in Perspective DNA of Innovation Execution Through People 8

9. A Supply Chain Approach Collaborative, transparent, data-driven process 9

10. Coal - Supporting Significant Export Growth Prince Rupert RTI Capacity* 24 M Vancouver 11M PMV Capacity* 45 M Convent Capacity* *Metric Tonnes Existing mines & expansions 34 M 20M 10 M 4 M CN Coal Franchise *Metric Tonnes *Short Tons Potential new mines Aiming to Double our Coal Export Franchise New Orleans 10

11. Mines Help synchronize production plans with each link of supply chain (mine, rail, port and vessel) and facilitate growth plans for existing and new mines Railways Manage constraints at the ports and facilitate expansions to maximize coal throughput Port Terminals Build relationships with key stakeholders Vessels Minimize vessel dwells Integrate a supply chain concept across each segment from the mine to the end customer Our Supply Chain Approach

12. Ridley Terminals Supply Chain Logistics Vessel Lineup Ridley Terminals Inventory Tonnage Required Trains Req’d Trains Loaded Empty To Mine Days Remaining Mine XX Tonnage Tonnes Date 68,000 74,200 Shi Dai 2 30-Sep 99,010 0 0.0 0 52,190 48,012 77,000 Kaiyo 30-Sep Max allowed 200,000 4.4 1.0 2.0 5 Potential vessel demurrage: recovery plan in motion with customers and Ridley Terminals Enhancing our Supply Chain

13. Advantages • Transparency • Visibility • Engagement • Communication • Synchronizing: • Mine • Rail • Port • With vessels Improving from “Good to Great” Service

14. 24MMT 18MMT 30MMT 40+ MMT 14MMT J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D 2012 2013 2014 2015 3rd Stacker / Reclaimer 2nd rotary dumper, new thaw shed, 35 acres to add storage 4th Stacker / Reclaimer Additional land to add storage, new track and construction of 2nd berth Ridley Terminal Expansion Plan

15. Targeted investment in advance of forecasted traffic increase in the Ridley corridor • Priorities based on reducing stand-off time / train meets • As volumes increase in the future, it is a matter of adding more sidings to handle the traffic • 40MMT = 8 loaded trains per day = 16 trains [loaded + empty] per day • CN to construct five long sidings in 2012 on B.C. North Line as part of C$155-million multi-year capital program to expand freight train capacity to handle rising traffic in Edmonton-Prince Rupert corridor • CN has extended or constructed 21 sidings to handle 12,000-foot trains between Edmonton and Prince Rupert since 2004 Investment in Sidings in BC North

16. Major locomotive acquisition program to accommodate anticipated traffic growth and to improve operational efficiency • 65 new high-horsepower locomotives as well as 96 second-hand high-horsepower locomotives that will be upgraded • Retirement of older, high-maintenance locomotives and the cascading of less fuel-efficient main-line units • Delivery in 2013-14 of 65 new locomotives includes the acquisition of alternating-current locomotives (AC) - much higher adhesion or train-pulling ability at low speeds – will be assigned to heavy-haul coal service in northern British Columbia and Alberta • 50 per cent of CN’s high-horsepower locomotive fleet will have DP by the end of 2013 • 6 month window required for hiring and training crews Investment in Locomotives and Crews