Report
of Independent Registered Public Accounting Firm
|
1
|
Statements
of Net Assets Available for Benefits as of
|
|
December
31, 2006 and 2005
|
2
|
Statements
of Changes in Net Assets Available
for Benefits for
|
|
the
years ended December 31, 2006 and 2005
|
3
|
Notes
to Financial Statements
|
4
|
Schedule
H, Line 4i – Schedule of Assets (Held at End of Year)
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14
|
2006
|
2005
|
|||||||
Investments
at fair
value
|
$ |
131,124,345
|
$ |
124,155,174
|
||||
Receivables:
|
||||||||
Participants’
contributions
|
327,425
|
275,631
|
||||||
Employer’s
contributions
|
165,362
|
84,569
|
||||||
Total
receivables
|
492,787
|
360,200
|
||||||
Net
assets available for benefits,
at fair value
|
131,617,132
|
124,515,374
|
||||||
Adjustment
from fair value to
contract value
|
||||||||
for fully benefit-responsive
investment contracts
|
306,501
|
431,644
|
||||||
Net
assets available for
benefits
|
$ |
131,923,633
|
$ |
124,947,018
|
||||
2006
|
2005
|
|||||||
Additions
to net
assets:
|
||||||||
Investment
income:
|
||||||||
Dividends
and
interest
|
$ |
7,269,023
|
$ |
5,408,232
|
||||
Net
appreciation in fair value of
investments (note 7)
|
6,845,485
|
4,003,579
|
||||||
Total
investment
income
|
14,114,508
|
9,411,811
|
||||||
Contributions:
|
||||||||
Participants
|
5,414,405
|
5,150,847
|
||||||
Employer
|
2,680,207
|
1,746,335
|
||||||
Rollover
contributions and
other
|
485,343
|
668,841
|
||||||
Total
contributions
|
8,579,955
|
7,566,023
|
||||||
Transfer
of plan assets, net (note
5)
|
49,436
|
12,955,351
|
||||||
Total
additions
|
22,743,899
|
29,933,185
|
||||||
Deductions
from net
assets:
|
||||||||
Participants’
distributions
|
15,759,010
|
12,386,643
|
||||||
Administrative
expenses
|
8,274
|
10,071
|
||||||
Total
deductions
|
15,767,284
|
12,396,714
|
||||||
Net
increase
|
6,976,615
|
17,536,471
|
||||||
Net
assets available for benefits,
beginning of year
|
124,947,018
|
107,410,547
|
||||||
Net
assets available for benefits,
end of year
|
$ |
131,923,633
|
$ |
124,947,018
|
||||
2006
|
2005
|
||||||||
Common
collective
trust fund:
|
|||||||||
Fidelity
Managed
Income Portfolio II
|
$ |
25,869,321
|
$ |
29,446,922
|
|||||
Mutual
funds:
|
|||||||||
Fidelity
Capital
Appreciation Fund
|
15,446,808
|
14,129,467
|
|||||||
American
Funds
EuroPacific Growth Fund
|
13,745,592
|
11,776,175
|
|||||||
Dodge
&
Cox
Balanced Fund
|
12,066,131
|
11,603,799
|
|||||||
ICM
Small
Company Portfolio
|
11,606,667
|
10,534,727
|
|||||||
American
Funds
Investment Co.
of America
|
10,453,301
|
10,195,571
|
|||||||
Fidelity
Spartan U.S. Equity Index Fund
|
10,039,735
|
9,925,379
|
|||||||
PIMCO
Total Return Fund
|
*
|
6,534,038
|
|||||||
Common
stock:
|
|||||||||
Canadian
National Railway Company
|
10,583,078
|
9,339,344
|
|||||||
* At
December 31, 2006, fair value did not exceed 5% of the Plan’s
net assets
available for benefits.
|
2006
|
2005
|
|||||||
Mutual
funds
|
$ |
6,578,725
|
$ |
2,479,386
|
||||
CN
common stock
|
266,760
|
1,524,193
|
||||||
$ |
6,845,485
|
$ |
4,003,579
|
December
31,
2006
|
||||
Net
assets available for benefits
per the financial statements
|
$ |
131,923,633
|
||
Less:
Adjustment from contract
value to fair value for
|
||||
fully
benefit-responsive investment contracts
|
306,501
|
|||
Net
assets available for benefits
at fair value per the Form 5500
|
$ |
131,617,132
|
December
31,
2006
|
||||
Total
investment income per the
financial statements
|
$ |
14,114,508
|
||
Less:
Adjustment from contract
value to fair value for
|
||||
fully
benefit-responsive investment contracts
|
306,501
|
|||
Total
investment income per the
Form 5500
|
$ |
13,808,007
|
Description
of
investment
|
|||||||
including
maturity date,
|
|||||||
Identity
of issuer,
borrower,
|
rate
of
interest, collateral,
|
Current
|
|||||
lessor,
or similar
party
|
par,
or maturity
value
|
value
|
|||||
Mutual
funds:
|
|||||||
*
|
Fidelity
Capital
Appreciation Fund
|
569,783
shares
|
$ 15,446,808
|
||||
American
Funds
EuroPacific Growth Fund
|
295,223
shares
|
13,745,592
|
|||||
Dodge
&
Cox
Balanced Fund
|
138,564
shares
|
12,066,131
|
|||||
ICM
Small
Company Portfolio
|
310,588
shares
|
11,606,667
|
|||||
American
Funds
Investment Co. of America
|
311,946
shares
|
10,453,301
|
|||||
*
|
Fidelity
Spartan
U.S. Equity Index Fund
|
200,074
shares
|
10,039,735
|
||||
PIMCO
Total
Return Fund
|
619,454
shares
|
6,429,929
|
|||||
Dodge
&
Cox
Stock Fund
|
26,406
shares
|
4,052,233
|
|||||
Calamos
Growth
Fund
|
64,218
shares
|
3,461,341
|
|||||
*
|
Fidelity
Spartan
International Index Fund
|
25,678
shares
|
1,133,446
|
||||
*
|
Fidelity
Freedom
Income Fund
|
27,695
shares
|
319,602
|
||||
*
|
Fidelity
Freedom
2010 Fund
|
87,542
shares
|
1,279,871
|
||||
*
|
Fidelity
Freedom
2015 Fund
|
12,225
shares
|
149,147
|
||||
*
|
Fidelity
Freedom
2020 Fund
|
56,262
shares
|
873,752
|
||||
*
|
Fidelity
Freedom
2025 Fund
|
609
shares
|
7,782
|
||||
*
|
Fidelity
Freedom
2030 Fund
|
36,226
shares
|
580,697
|
||||
*
|
Fidelity
Freedom
2035 Fund
|
1,323
shares
|
17,445
|
||||
*
|
Fidelity
Freedom
2040 Fund
|
49,608
shares
|
470,283
|
||||
*
|
Fidelity
Freedom
2045 Fund
|
891
shares
|
9,572
|
||||
*
|
Fidelity
Freedom
2050 Fund
|
1,127
shares
|
12,120
|
||||
Total
mutual
funds
|
$ 92,155,454
|
||||||
Common
stock:
|
|||||||
*
|
Canadian
National Railway Company
|
245,917
shares
|
10,583,078
|
||||
Money
market
fund:
|
|||||||
*
|
Fidelity
Retirement Money Market Portfolio
|
1,587,558
shares
|
1,587,558
|
||||
Common
collective trust
fund:
|
|||||||
*
|
Fidelity
Managed
Income Portfolio II
|
25,869,321
shares
|
25,869,321
|
||||
*
|
Participant
loans
|
4.00%
- 9.25%, maturing
through December 2016 |
1,235,435 | ||||
$ 131,430,846
|
|||||||
Canadian
National Railway Company
Management
Savings Plan for U.S. Operations
|
||
(Name
of Plan)
|
||
Date:
June 29, 2007
|
/s/
Ardyth Cutler
|
|
Plan
Administrator
|