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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20459
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FORM 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
November 27, 2002
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Canadian National Railway Company
(Exact name of registrant as specified in its charter)
Canadian National Railway Company
(Translation of registrant's name into English)
935 de la Gauchetiere Street West
Montreal, Quebec
Canada H3B 2M9
(Address of principal executive office)
Indicate by check mark whether the registrant files or
will file annual reports under cover of Form
20-F or Form 40-F:
Form 20-F Form 40-F X
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Indicate by check mark whether the registrant by furnishing
the information contained in this Form is also thereby
furnishing the information to the Commission
pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
Yes No X
--- ---
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): N/A
MATERIAL CHANGE REPORT
Subsection 85(1) of the Securities Act (British Columbia)
Subsection 146(1) of the Securities Act (Alberta)
Subsection 84(1) of the Securities Act (Saskatchewan)
Subsection 75(2) of the Securities Act (Ontario)
Subsection 81(2) of the Securities Act (Nova Scotia)
Subsection 76(2) of the Securities Act (Newfoundland)
1. Reporting Issuer
Canadian National Railway Company
935 de La Gauchetiere Street West
Montreal, Quebec
H3B 2M9
2. Date of Material Change
November 26, 2002
3. Press release
The press release of Canadian National Railway Company ("CN") was issued
at Montreal, Quebec on November 26, 2002. A copy of the press release is
annexed hereto and forms an integral part of this material change report.
4. Summary of Material Change
CN announced fourth-quarter 2002 after-tax charges of $79 million for
productivity-driven job reductions and $173 million for shift to
actuarial-based methodology to account for U.S. personal injury and other
claims.
5. Full Description of Material Change
CN announced 1,146 permanent job reductions in a renewed drive to improve
productivity.
The job reductions in CN's latest productivity initiative will occur in
every corporate and operating function. About two-thirds of the reductions
will occur in Canada, with the remainder in the U.S. Roughly 30 per cent
of the reductions will be achieved through normal attrition and
retirement, 45 per cent by way of early retirement and 25 per cent through
severance packages.
In connection with the productivity initiative, CN expects to take a
fourth-quarter 2002 after-tax workforce adjustment charge of approximately
$79 million for severance and other payments to affected employees.
CN also announced that it is adopting an actuarial-based methodology to
determine its provision for U.S. personal injury and other claims,
including those for hearing loss, carpal tunnel syndrome and
asbestos-related disease.
Under an actuarial-based approach, the cost of employee injuries and other
claims will be charged to expense based on an actuarial estimate of the
ultimate cost and number of incidents in each year. Where unasserted
claims can be estimated and considered probable, CN will also record a
liability. As a result, CN expects to take an after-tax charge of
approximately $173 million in the fourth quarter.
Together the two charges will have an after-tax effect on CN's
fourth-quarter 2002 financial results of approximately $252 million, or
$1.25 per diluted share.
6. Reliance on Provisions Applying to Confidential Filing
Not applicable.
7. Omitted Information
Not applicable.
8. Senior Officer
Inquiries in respect of the material change referred to herein may be made
to:
SEAN FINN
Senior Vice-President, Chief Legal Counsel and Corporate Secretary
Canadian National Railway Company
935 de La Gauchetiere Street West
Montreal, Quebec
H3B 2M9
(514) 399-7091
9. Statement of Senior Officer
The information contained in this material change report accurately
discloses the material change referred to herein.
DATED in the city of Montreal, province of Quebec, this 26th day of November,
2002.
(signed) Sean Finn
Sean Finn
Senior Vice-President,
Chief Legal Officer and
Corporate Secretary
[CN LOGO] News
North America's Railroad FOR IMMEDIATE RELEASE
Stock symbols: TSX: CNR / NYSE: CNI
www.cn.ca
CN to take fourth-quarter 2002 after-tax charges of $79 million for
productivity-driven job reductions, $173 million for shift to actuarial-based
methodology to account for U.S. personal injury and other claims
MONTREAL, Nov. 26, 2002 ? Canadian National announced today 1,146 permanent job
reductions in a renewed drive to improve productivity. CN also said it will
adopt an actuarial-based methodology to account for United States personal
injury and other claims in line with United States Class 1 railroad practice.
The job reductions in CN's latest productivity initiative will occur in every
corporate and operating function. About two-thirds of the reductions will occur
in Canada, with the remainder in the U.S.
Roughly 30 per cent of the reductions will be achieved through normal attrition
and retirement, 45 per cent by way of early retirement and 25 per cent through
severance packages.
Paul M. Tellier, president and chief executive officer of CN, said: "We take no
joy in announcing these permanent job reductions, but CN must leave no stone
unturned in this productivity initiative given difficult conditions in our bulk
commodity businesses and escalating labour costs."
"CN is a capital- and labour-intensive corporation. Its capital budget exceeds
$1-billion annually and we have to earn the cost of that capital to continue to
invest in the railway. Labour and fringe benefit expenses account for roughly
40 per cent of total operating costs, so anytime we are looking to control
costs we must, by definition, look to control our labour costs."
"CN has become the rail industry's efficiency and service leader by focusing
squarely on productivity improvements and consistent, timely delivery of goods
for our customers. The permanent job reductions announced today reflect
efficiencies from large-scale information technology investments in
administrative functions and a smaller asset base - we have fewer locomotives
and freight cars to repair and maintain because of productivity improvements
from our scheduled railway operations."
In connection with the productivity initiative, CN expects to take a
fourth-quarter 2002 after-tax workforce adjustment charge of approximately $79
million for severance and other payments to affected employees.
CN also announced today it is adopting an actuarial-based methodology to
determine its provision for U.S. personal injury and other claims, including
those for hearing loss, carpal tunnel syndrome and asbestos-related disease.
Under an actuarial-based approach, the cost of employee injuries and other
claims will be charged to expense based on an actuarial estimate of the
ultimate cost and number of incidents in each year. Where unasserted claims can
be estimated and considered probable, CN will also record a liability. As a
result, CN expects to take an after-tax charge of approximately $173 million in
the fourth quarter. Approximately two-thirds of the charge is for
asbestos-related claims.
Tellier said: "The new methodology for determining our provision for Federal
Employers' Liability Act (FELA) and other claims is consistent with current
U.S. rail industry practice. The change reflects CN's growing presence in the
U.S., where the rail industry is uniquely susceptible to litigation involving
employee work-related injuries and occupational claims because of FELA, an
outmoded law passed in 1908 that applies to railroads. CN is faced with a
rising number of personal injury claims in the U.S., and we want to reflect our
expected liability in a consistent and forthright manner."
Together the two charges will have an after-tax effect on CN's fourth-quarter
2002 financial results of approximately $252 million, or $1.25 per diluted
share.
Tellier said: "With these unfortunate developments behind us, we are focused on
running our business. CN has a strong, diversified traffic base and a solid
game plan for growth. Our service-sensitive merchandise and intermodal segments
are growing faster than rail industry rates. We are the rail industry leader in
service and efficiency, and we intend to stay ahead. The bottom line is that CN
is committed to delivering on its promises to customers and shareholders."
This news release contains forward-looking statements. CN cautions that, by
their nature, forward-looking statements involve risk and uncertainties and
that its results could differ materially from those expressed or implied in
such statements. Reference should be made to CN's most recent Form 40-F filed
with the United States Securities and Exchange Commission, and the Annual
Information Form filed with the Canadian securities regulators, for a summary
of major risks.
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, Prince Rupert, B.C., Montreal, Halifax, New Orleans, and Mobile,
Ala., and the key cities of Toronto, Buffalo, Chicago, Detroit, Duluth,
Minn./Superior, Wis., Green Bay, Wis., Minneapolis/St. Paul, Memphis, St.
Louis, and Jackson, Miss., with connections to all points in North America.
Contacts:
Media Investment Community
Mark Hallman Robert Noorigian
System Director, Media Relations Vice-President, Investor Relations
(416) 217-6390 (514) 399-0052
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Canadian National Railway Company
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(Registrant)
Date: November 27, 2002 By: /s/ Sean Finn
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Sean Finn
Senior Vice-President,
Chief Legal Officer
Corporate Secretary