LPG shipments were as demand for butane and propane outpaced last year. On the chemical side, on the petrochemical side, imported methanol over the west coast port of Kitimat, drove positive result and offset weakness in chlor-alkali other industrial chemicals.

The metals and mineral segment was down 4%. Demand for metals products was up. Rolled steel products pipe, steel construction materials like I-beams increased as did aluminum. Strength in business was offset as weaker housing construction materials, roofing granules, cement, etc, were down as weaker scrap steel shipments. Shipments of iron ore were down as manufacturers took maintenance downtime in this period.

Forest products were down 9%.

Forest products franchise continues to be impacted by the weak market conditions for these products. The weakest demand was lumber and panels where carloads were down 10% and 25% respectively.

- The papers segments weaker in North American demand for all grades of paper and there production cutbacks at five major served facilities.
- Carloads were up 7% in paper.
- Pulp shipments were relatively stable as worldwide demand is strong and there are record prices, for pulp creating export opportunities for Canadian manufacturers.

Automotive group was up 6% driven by two of large initiatives.

One was in the new Suzuki traffic that the company has been handling and the other servicing GM''s new lancing facility.

- Ford''s models produced at CN plants have been selling well, and the company is handling some additional increased volumes to western Canada.
- Bulk in total was up 10% with coal leading the way up 10%, Coke Canada up 16%, recognition there of the new mines that have come on line and are continuing demand for Canadian metallurgical coal.
- The U.S. coal down, again reflecting this short-haul Powder River Basin coal move to the Tennessee valley authority facility, which has been slowing declines throughout the year from a volume standpoint, again short-haul move and therefore not much of a revenue impact.

Grain and fertilizers continue to show positive results up 11%.

- Canada strong demand and a good quality wheat crop are driving good volumes towards CN''s ports.
- In the U.S. shipments of soybeans, ethanol, DDGs, and corn shipments from the U.S. into the Canadian markets were good, although they offset the gains or opportunities that the company had for corn movement to portend export markets in the U.S. fertilizer product shipments has also been good.
- Intermodal was down 1%. Volumes on West Coast port for import international containers were strong. However, some declines in East Coast port of Halifax, where the company has seen some traffic shift to carriers that are making Montreal their port of call versus Halifax, as well as some changes in service and marketing strategies by some of the carriers there. The domestic business was basically flat.

Year-to-Date Financial Highlights

- Net income was C$1,325 million, or C$2.59 per share, including deferred income tax recoveries of C$44 million (9 cents per share) resulting from the enactment of lower corporate tax rates in Canada and net capital losses arising from a reorganization of certain subsidiaries. Year-earlier net income was C$1,588 million, or C$2.95 per share, including a deferred income tax recovery of C$250 million (46 cents per share).

- Revenues were relatively flat at C$5,956 million, as freight rate increases and an overall improvement in traffic mix were largely offset by the impact of the first-quarter United Transportation Union (UTU) strike and adverse weather conditions, operational challenges, primarily in western Canada, the translation impact of a stronger Canadian dollar on U.S. dollar-denominated revenues, lower fuel surcharge revenues as a result of a decrease in the applicable year-over-year oil prices, and weakness in specific markets, particularly forest products.
- Revenue ton-miles declined 2% from the comparable period of 2006, while total rail freight revenue per ton-mile increased two per cent.

- Operating expenses increased 4% to C$3,816 million, mainly due to increased fuel, equipment rents and purchased services and material expenses, which were partly offset by the translation impact of a stronger Canadian dollar and lower casualty and other expenses. The nine-month operating ratio was 64.1%, a 2.5-point increase.
- In addition to the adverse weather conditions in the first quarter and operational challenges in the second quarter, the company''s results in the first nine months of 2007 included the impact of a first-quarter 2007 strike by 2,800 members of the UTU in Canada for which the company estimates that the impact on first-quarter 2007 operating income and net income approximated C$50 million and C$35 million, respectively (7 cents per share).

Fourth Quarter 2007 Outlook

- The company expects the headwinds to continue into the fourth quarter, especially the dollar, which has surged beyond parity, and also fuel prices. The exchange alone if the dollar was to stay at around at C$1.02 for the fourth quarter, last year the dollar was trading at 88 cents in the fourth quarter. Back on a year-over-year basis is a 14 increase, which means about 7 cents of EPS headwind from the conversion alone.
- The guidance that the company had provided was stronger pricing environment in the range of 4% to 5%, up from a range of 3% to 4%. The outlook for bulk is good in coal, grain, sulfur and potash. The company is expecting to see volume growth in the fourth quarter of 7% to 8%.
- The mixed outlook in merchandise will continue. The company is looking for that weakness to continue, although, it is certainly always in the hunt for new opportunities to offset that declines.

Fiscal 2007 Outlook

The company expects good volume, good growth and that should help offset the issues the company is facing from an exchange and fuel standpoint and with the closing of Central Station and EW West, which together should give around 20 cents of EPS, and for the full year the company should have 5% EPS growth. But excluding the gain on Central Station and EWS, overall full year EPS outlook is now flat on a year-over-year basis.

Key questions from the third quarter earnings call conducted by Canadian National Railway Company on October 22, 2007.

Unidentified Analyst: Did you break Central Station and EWS being 20 cents out?