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)
|
13
|
2006
|
2005
|
|||||||
Investments
at fair
value
|
$ |
191,783,521
|
$ |
168,190,753
|
||||
Receivables:
|
||||||||
Participants’
contributions
|
860,840
|
814,470
|
||||||
Employer’s
contributions
|
86,285
|
72,661
|
||||||
Total
receivables
|
947,125
|
887,131
|
||||||
Net
assets available for benefits,
at fair value
|
192,730,646
|
169,077,884
|
||||||
Adjustment
from fair value to
contract value
|
||||||||
for
fully benefit-responsive investment contracts
|
159,041
|
198,083
|
||||||
Net
assets available for
benefits
|
$ |
192,889,687
|
$ |
169,275,967
|
||||
2006
|
2005
|
|||||||
Additions
to net
assets:
|
||||||||
Investment
income:
|
||||||||
Dividends
and
interest
|
$ |
9,603,820
|
$ |
6,441,163
|
||||
Net
appreciation in fair value of
investments (note 7)
|
10,620,022
|
4,979,256
|
||||||
Total
investment
income
|
20,223,842
|
11,420,419
|
||||||
Contributions:
|
||||||||
Participants
|
15,060,963
|
14,869,871
|
||||||
Employer
|
1,474,323
|
1,330,941
|
||||||
Rollover
contributions and
other
|
225,291
|
31,171
|
||||||
Total
contributions
|
16,760,577
|
16,231,983
|
||||||
Total
additions
|
36,984,419
|
27,652,402
|
||||||
Deductions
from net
assets:
|
||||||||
Participants’
distributions
|
13,278,768
|
10,800,601
|
||||||
Transfer
out of plan assets, net
(note 5)
|
49,436
|
574,024
|
||||||
Administrative
expenses
|
42,495
|
31,229
|
||||||
Total
deductions
|
13,370,699
|
11,405,854
|
||||||
Net
increase
|
23,613,720
|
16,246,548
|
||||||
Net
assets available for benefits,
beginning of year
|
169,275,967
|
153,029,419
|
||||||
Net
assets available for benefits,
end of year
|
$ |
192,889,687
|
$ |
169,275,967
|
||||
2006
|
2005
|
|||||||
Mutual
funds:
|
||||||||
Fidelity
Spartan U.S. Equity Index
Fund
|
$ |
36,724,295
|
$ |
34,493,992
|
||||
American
Funds Investment Co. of
America
|
32,196,716
|
30,153,388
|
||||||
PIMCO
Total Return
Fund
|
16,091,040
|
16,818,361
|
||||||
American
Funds EuroPacific Growth
Fund
|
15,913,576
|
12,077,474
|
||||||
Dodge
&
Cox
Balanced
Fund
|
10,948,419
|
9,363,276
|
||||||
Fidelity
Capital Appreciation
Fund
|
10,037,036
|
9,550,874
|
||||||
Common
stock
fund:
|
||||||||
CN
Stock
Fund
|
14,194,739
|
9,589,677
|
||||||
Common
collective trust
fund:
|
||||||||
Fidelity
Managed Income Portfolio
II
|
13,423,383
|
13,513,258
|
||||||
Money
market
fund:
|
||||||||
Fidelity
Retirement Money Market
Portfolio
|
10,833,936
|
8,980,910
|
2006
|
2005
|
|||||||
Mutual
funds
|
$ |
10,035,927
|
$ |
2,967,358
|
||||
CN
stock
fund
|
584,095
|
2,011,898
|
||||||
$ |
10,620,022
|
$ |
4,979,256
|
December
31,
2006
|
||||
Net
assets available for benefits
per the financial statements
|
$ |
192,889,687
|
||
Less:
Adjustment from contract
value to fair value for
|
||||
fully
benefit-responsive investment contracts
|
159,041
|
|||
Net
assets available for benefits
at fair value per the Form 5500
|
$ |
192,730,646
|
||
December
31,
2006
|
||||
Total
investment income per the
financial statements
|
$ |
20,223,842
|
||
Less:
Adjustment from contract
value to fair value for
|
||||
fully
benefit-responsive investment contracts
|
159,041
|
|||
Total
investment income per the
Form 5500
|
$ |
20,064,801
|
||
Description
of
investment,
|
|||||||
including
maturity
date,
|
|||||||
Identity
of issuer, borrower,
lessor or
|
rate
of interest,
collateral,
|
Current
|
|||||
similar
party
|
par,
or maturity
value
|
value
|
|||||
Mutual
funds:
|
|||||||
*
|
Fidelity
Spartan U.S. Equity Index
Fund
|
731,851
shares
|
$ 36,724,295
|
||||
American
Funds Investment Co. of
America
|
960,809
shares
|
32,196,716
|
|||||
PIMCO
Total Return
Fund
|
1,550,196
shares
|
16,091,040
|
|||||
American
Funds EuroPacific Growth
Fund
|
341,786
shares
|
15,913,576
|
|||||
*
|
Fidelity
Capital Appreciation
Fund
|
370,234
shares
|
10,037,036
|
||||
Dodge
&
Cox
Balanced
Fund
|
125,728
shares
|
10,948,419
|
|||||
ICM
Small Company
Portfolio
|
221,443
shares
|
8,275,334
|
|||||
Calamos
Growth
Fund
|
97,526
shares
|
5,256,669
|
|||||
Dodge
&
Cox
Stock
Fund
|
23,849
shares
|
3,659,859
|
|||||
*
|
Fidelity
Spartan International
Index Fund
|
31,945
shares
|
1,410,035
|
||||
*
|
Fidelity
Freedom Income
Fund
|
81,923
shares
|
945,387
|
||||
*
|
Fidelity
Freedom 2010
Fund
|
160,356
shares
|
2,344,408
|
||||
*
|
Fidelity
Freedom 2015
Fund
|
5,621
shares
|
68,573
|
||||
*
|
Fidelity
Freedom 2020
Fund
|
141,691
shares
|
2,200,455
|
||||
*
|
Fidelity
Freedom 2025
Fund
|
255
shares
|
3,259
|
||||
*
|
Fidelity
Freedom 2030
Fund
|
59,632
shares
|
955,907
|
||||
*
|
Fidelity
Freedom 2035
Fund
|
1,673
shares
|
22,072
|
||||
*
|
Fidelity
Freedom 2040
Fund
|
82,704
shares
|
784,033
|
||||
*
|
Fidelity
Freedom 2045
Fund
|
540
shares
|
5,798
|
||||
*
|
Fidelity
Freedom 2050
Fund
|
11,932
shares
|
128,267
|
||||
Total
mutual
funds
|
$ 147,971,138
|
||||||
Common
stock
fund:
|
|||||||
*
|
CN
Stock
Fund
|
404,767
shares
|
14,194,739
|
||||
Money
market
fund:
|
|||||||
*
|
Fidelity
Retirement Money Market
Portfolio
|
10,833,936
shares
|
10,833,936
|
||||
Common
collective trust
fund:
|
|||||||
*
|
Fidelity
Managed Income Portfolio
II
|
13,423,383
shares
|
13,423,383
|
||||
*
|
Participant
loans
|
4.0%
- 10.5%,
maturing
|
|||||
through
October
2016
|
5,519,366
|
||||||
$ 191,942,562
|
Canadian
National Railway Company
Union Savings
Plan for U.S. Operations
|
||
(Name
of Plan)
|
||
Date:
June 29, 2007
|
/s/
Ardyth Cutler
|
|
Plan
Administrator
|