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 |
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes | No X |
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes | No X |
Indicate by check mark whether by furnishing the information contained in this Form, the Registrant 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
Item
1
|
|
Press Release
dated April 21, 2008, titled “CN reports
Q1-2008 net income of C$311 million, or C$0.64 per diluted share; now
expects full-year diluted EPS growth in mid-single digit
range”.
|
|
|
|
Item
2
|
|
Interim
Consolidated Financial Statements and Notes thereto (U.S.
GAAP)
|
|
|
|
Item
3
|
|
Management’s
Discussion and Analysis (U.S. GAAP)
|
|
|
|
Item
4
|
|
Certificate of
CEO
|
|
|
|
Item
5
|
|
Certificate of
CFO
|
■
|
Diluted
earnings per share increased two per cent to
C$0.64.
|
■
|
Net
income declined four per cent to C$311
million.
|
■
|
Revenues
increased one per cent to C$1,927
million.
|
■
|
Operating
income declined seven per cent to C$523 million, with the Company’s
operating ratio rising by 2.3 points to 72.9 per
cent.
|
■
|
The
stronger Canadian dollar relative to the U.S. dollar, which affects the
conversion of CN’s U.S. dollar-denominated revenues and expenses, reduced
first-quarter 2008 net income by approximately C$30 million, or C$0.06 per
diluted share.
|
Contacts:
|
|
Media
|
Investment
Community
|
Mark
Hallman
|
Robert
Noorigian
|
Director
|
Vice-President
|
Communications,
Media
|
Investor
Relations
|
(905)
669-3384
|
(514)
399-0052
|
Three
months ended
|
||||||||
March
31
|
||||||||
2008
|
2007
|
|||||||
(Unaudited)
|
||||||||
Revenues
|
$ | 1,927 | $ | 1,906 | ||||
Operating
expenses
|
||||||||
Labor and
fringe benefits
|
461 | 485 | ||||||
Purchased
services and material
|
285 | 276 | ||||||
Fuel
|
310 | 219 | ||||||
Depreciation
and amortization
|
175 | 171 | ||||||
Equipment
rents
|
64 | 66 | ||||||
Casualty and
other
|
109 | 128 | ||||||
Total
operating expenses
|
1,404 | 1,345 | ||||||
Operating
income
|
523 | 561 | ||||||
Interest
expense
|
(86 | ) | (88 | ) | ||||
Other income
(loss)
|
(6 | ) | 4 | |||||
Income before
income taxes
|
431 | 477 | ||||||
Income tax
expense
|
(120 | ) | (153 | ) | ||||
Net
income
|
$ | 311 | $ | 324 | ||||
Earnings per
share (Note
7)
|
||||||||
Basic
|
$ | 0.64 | $ | 0.64 | ||||
Diluted
|
$ | 0.64 | $ | 0.63 | ||||
Weighted-average
number of shares
|
||||||||
Basic
|
482.8 | 510.2 | ||||||
Diluted
|
488.6 | 517.8 | ||||||
See
accompanying notes to unaudited consolidated financial
statements.
|
March
31
|
December
31
|
March
31
|
||||||||||
2008
|
2007
|
2007
|
||||||||||
(Unaudited)
|
(Unaudited)
|
|||||||||||
Assets
|
||||||||||||
Current
assets:
|
||||||||||||
Cash and cash
equivalents
|
$ | 334 | $ | 310 | $ | 106 | ||||||
Accounts
receivable (Note
3)
|
621 | 370 | 508 | |||||||||
Material and
supplies
|
212 | 162 | 208 | |||||||||
Deferred
income taxes
|
67 | 68 | 83 | |||||||||
Other
|
111 | 138 | 184 | |||||||||
1,345 | 1,048 | 1,089 | ||||||||||
Properties
|
20,754 | 20,413 | 20,988 | |||||||||
Intangible and
other assets
|
2,065 | 1,999 | 1,646 | |||||||||
Total
assets
|
$ | 24,164 | $ | 23,460 | $ | 23,723 | ||||||
Liabilities
and shareholders' equity
|
||||||||||||
Current
liabilities:
|
||||||||||||
Accounts
payable and accrued charges
|
$ | 1,262 | $ | 1,282 | $ | 1,460 | ||||||
Current portion
of long-term debt (Note
3)
|
269 | 254 | 244 | |||||||||
Other
|
71 | 54 | 50 | |||||||||
1,602 | 1,590 | 1,754 | ||||||||||
Deferred
income taxes
|
5,021 | 4,908 | 5,025 | |||||||||
Other
liabilities and deferred credits
|
1,404 | 1,422 | 1,532 | |||||||||
Long-term debt
(Note
3)
|
6,064 | 5,363 | 5,602 | |||||||||
Shareholders'
equity:
|
||||||||||||
Common
shares
|
4,241 | 4,283 | 4,426 | |||||||||
Accumulated
other comprehensive income (loss)
|
9 | (31 | ) | (50 | ) | |||||||
Retained
earnings
|
5,823 | 5,925 | 5,434 | |||||||||
10,073 | 10,177 | 9,810 | ||||||||||
Total
liabilities and shareholders' equity
|
$ | 24,164 | $ | 23,460 | $ | 23,723 | ||||||
See
accompanying notes to unaudited consolidated financial
statements.
|
Three
months ended
|
||||||||
March
31
|
||||||||
2008
|
2007
|
|||||||
(Unaudited)
|
||||||||
Common shares (1)
|
||||||||
Balance,
beginning of period
|
$ | 4,283 | $ | 4,459 | ||||
Stock options
exercised and other
|
23 | 23 | ||||||
Share repurchase
programs (Note
3)
|
(65 | ) | (56 | ) | ||||
Balance, end
of period
|
$ | 4,241 | $ | 4,426 | ||||
Accumulated
other comprehensive income (loss)
|
||||||||
Balance,
beginning of period
|
$ | (31 | ) | $ | (44 | ) | ||
Other
comprehensive income (loss):
|
||||||||
Unrealized
foreign exchange gain (loss) on:
|
||||||||
Translation of
the net investment in foreign operations
|
187 | (56 | ) | |||||
Translation of
U.S. dollar-denominated long-term debt
|
||||||||
designated as
a hedge of the net investment in U.S. subsidiaries
|
(182 | ) | 47 | |||||
Pension and
other postretirement benefit plans (Note 5)
:
|
||||||||
Amortization
of net actuarial loss included in net periodic benefit
cost
|
(1 | ) | 12 | |||||
Amortization
of prior service cost included in net periodic benefit
cost
|
6 | 5 | ||||||
Other
comprehensive income before income taxes
|
10 | 8 | ||||||
Income tax
recovery (expense)
|
30 | (14 | ) | |||||
Other
comprehensive income (loss)
|
40 | (6 | ) | |||||
Balance, end
of period
|
$ | 9 | $ | (50 | ) | |||
Retained
earnings
|
||||||||
Balance,
beginning of period
|
$ | 5,925 | $ | 5,409 | ||||
Adoption of new
accounting pronouncements
(2)
|
- | 95 | ||||||
Restated
balance, beginning of period
|
5,925 | 5,504 | ||||||
Net
income
|
311 | 324 | ||||||
Share repurchase
programs (Note
3)
|
(302 | ) | (287 | ) | ||||
Dividends
|
(111 | ) | (107 | ) | ||||
Balance, end
of period
|
$ | 5,823 | $ | 5,434 | ||||
See
accompanying notes to unaudited consolidated financial
statements.
|
(1)
|
During
the first quarter of 2008, the Company issued 0.8 million common shares as
a result of stock options exercised and repurchased 7.3 million common
shares under its current share repurchase program. At March 31, 2008, the
Company had 478.7 million common shares
outstanding.
|
(2)
|
On
January 1, 2007, the Company adopted Financial Accounting Standards Board
(FASB) Interpretation (FIN) No. 48, “Accounting
for Uncertainty in Income Taxes,” and
early adopted the measurement date provisions of Statement of Financial
Accounting Standards (SFAS) No. 158, “Employers’ Accounting
for Defined Benefit Pension and Other Postretirement Plans, an amendment
of FASB Statements No. 87, 88, 106, and 132(R).” The
application of FIN No. 48 on January 1, 2007 had the effect of decreasing
the net deferred income tax liability and increasing Retained earnings by
$98 million. The application of SFAS No. 158 on January 1, 2007 had the
effect of decreasing Retained earnings by $3
million.
|
Three
months ended
|
||||||||
March
31
|
||||||||
2008
|
2007
|
|||||||
(Unaudited)
|
||||||||
Operating
activities
|
||||||||
Net
income
|
$ | 311 | $ | 324 | ||||
Adjustments to
reconcile net income to net cash provided from
|
||||||||
operating
activities:
|
||||||||
Depreciation
and amortization
|
175 | 172 | ||||||
Deferred
income taxes
|
25 | 7 | ||||||
Other changes
in:
|
||||||||
Accounts
receivable
|
(235 | ) | 176 | |||||
Material and
supplies
|
(48 | ) | (19 | ) | ||||
Accounts
payable and accrued charges
|
(68 | ) | (402 | ) | ||||
Other net
current assets and liabilities
|
38 | (18 | ) | |||||
Other
|
(33 | ) | 23 | |||||
Cash provided
from operating activities
|
165 | 263 | ||||||
Investing
activities
|
||||||||
Property
additions
|
(177 | ) | (203 | ) | ||||
Other,
net
|
11 | 10 | ||||||
Cash used by
investing activities
|
(166 | ) | (193 | ) | ||||
Financing
activities
|
||||||||
Issuance of
long-term debt
|
1,055 | 434 | ||||||
Reduction of
long-term debt
|
(580 | ) | (145 | ) | ||||
Issuance of
common shares due to exercise of stock options
|
||||||||
and related
excess tax benefits realized
|
18 | 18 | ||||||
Repurchase of
common shares
|
(367 | ) | (343 | ) | ||||
Dividends
paid
|
(111 | ) | (107 | ) | ||||
Cash provided
from (used by) financing activities
|
15 | (143 | ) | |||||
Effect of
foreign exchange fluctuations on U.S. dollar-denominated cash and cash
equivalents
|
10 | - | ||||||
Net
increase (decrease) in cash and cash equivalents
|
24 | (73 | ) | |||||
Cash and cash
equivalents, beginning of period
|
310 | 179 | ||||||
Cash
and cash equivalents, end of period
|
$ | 334 | $ | 106 | ||||
Supplemental
cash flow information
|
||||||||
Net cash
receipts from customers and other
|
$ | 1,748 | $ | 2,074 | ||||
Net cash
payments for:
|
||||||||
Employee
services, suppliers and other expenses
|
(1,339 | ) | (1,237 | ) | ||||
Interest
|
(100 | ) | (114 | ) | ||||
Workforce
reductions
|
(6 | ) | (9 | ) | ||||
Personal
injury and other claims
|
(26 | ) | (20 | ) | ||||
Pensions
|
(22 | ) | (1 | ) | ||||
Income
taxes
|
(90 | ) | (430 | ) | ||||
Cash provided
from operating activities
|
$ | 165 | $ | 263 | ||||
See
accompanying notes to unaudited consolidated financial
statements.
|
Vision
2008 Share Unit
|
Voluntary
Incentive
|
|||||||||||||||||||||||
RSUs
|
Plan
(Vision)
|
Deferral
Plan (VIDP)
|
||||||||||||||||||||||
In
millions
|
Nonvested
|
Vested
|
Nonvested
|
Vested
|
Nonvested
|
Vested
|
||||||||||||||||||
Outstanding at
December 31, 2007
|
1.6 | 0.9 | 0.8 | - | 0.2 | 1.9 | ||||||||||||||||||
Granted
|
0.7 | - | - | - | - | - | ||||||||||||||||||
Forfeited
|
(0.1 | ) | - | - | - | - | - | |||||||||||||||||
Vested during
period
|
- | - | - | - | (0.1 | ) | 0.1 | |||||||||||||||||
Payout
|
- | (0.9 | ) | - | - | - | (0.2 | ) | ||||||||||||||||
Conversion
into VIDP
|
- | - | - | - | - | - | ||||||||||||||||||
Outstanding
at March 31, 2008
|
2.2 | - | 0.8 | - | 0.1 | 1.8 |
In
millions, unless otherwise indicated
|
RSUs (1)
|
Vision (1)
|
VIDP (2)
|
Total
|
||||||||||||||||||||||||||||
2003
|
||||||||||||||||||||||||||||||||
Year
of grant
|
2008
|
2007
|
2006
|
2005
|
2004
|
2005
|
onwards
|
|||||||||||||||||||||||||
Stock-based
compensation expense
|
||||||||||||||||||||||||||||||||
recognized
over requisite service period
|
||||||||||||||||||||||||||||||||
Three months
ended March 31, 2008
|
$ | 7 | $ | 2 | $ | 4 | $ | - | $ | 1 | $ | 3 | $ | 6 | $ | 23 | ||||||||||||||||
Three months
ended March 31, 2007
|
N/A | $ | 8 | $ | 3 | $ | 4 | $ | 2 | $ | 1 | $ | 5 | $ | 23 | |||||||||||||||||
Liability
outstanding
|
||||||||||||||||||||||||||||||||
March 31,
2008
|
$ | 7 | $ | 13 | $ | 33 | $ | - | $ | 1 | $ | 11 | $ | 93 | $ | 158 | ||||||||||||||||
December 31,
2007
|
N/A | $ | 11 | $ | 29 | $ | 48 | $ | 4 | $ | 8 | $ | 95 | $ | 195 | |||||||||||||||||
Fair
value per unit
|
||||||||||||||||||||||||||||||||
March 31,
2008
|
$ | 29.38 | $ | 31.36 | $ | 40.79 | $ | - | $ | 49.77 | $ | 20.27 | $ | 49.77 | N/A | |||||||||||||||||
Fair
value of awards vested during period
|
||||||||||||||||||||||||||||||||
Three months
ended March 31, 2008
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 1 | $ | 1 | ||||||||||||||||
Three months
ended March 31, 2007
|
N/A | $ | - | $ | - | $ | - | $ | 5 | $ | - | $ | 1 | $ | 6 | |||||||||||||||||
Nonvested
awards at March 31, 2008
|
||||||||||||||||||||||||||||||||
Unrecognized
compensation cost
|
$ | 11 | $ | 7 | $ | 6 | $ | - | $ | 3 | $ | 3 | $ | 6 | $ | 36 | ||||||||||||||||
Remaining
recognition period (years)
|
2.75 | 1.75 | 0.75 | - | 0.75 | 0.75 | 3.75 | N/A | ||||||||||||||||||||||||
Assumptions (3)
|
||||||||||||||||||||||||||||||||
Stock price ($)
|
$ | 49.77 | $ | 49.77 | $ | 49.77 | N/A | $ | 49.77 | $ | 49.77 | $ | 49.77 | N/A | ||||||||||||||||||
Expected stock
price volatility
(4)
|
22% | 23% | 26% | N/A | N/A | 28% | N/A | N/A | ||||||||||||||||||||||||
Expected term
(years) (5)
|
2.75 | 1.75 | 0.75 | N/A | N/A | 0.75 | N/A | N/A | ||||||||||||||||||||||||
Risk-free
interest rate
(6)
|
2.66% | 2.62% | 2.52% | N/A | N/A | 1.88% | N/A | N/A | ||||||||||||||||||||||||
Dividend rate
($) (7)
|
$ | 0.92 | $ | 0.92 | $ | 0.92 | N/A | N/A | $ | 0.92 | N/A | N/A |
(1)
|
Compensation
cost is based on the fair value of the awards at period-end using the
lattice-based valuation model that uses the assumptions as presented
herein, except for time-vested
RSUs.
|
(2)
|
Compensation
cost is based on intrinsic value.
|
(3)
|
Assumptions
used to determine fair value are at March 31,
2008.
|
(4)
|
Based
on the historical volatility of the Company's stock over a period
commensurate with the expected term of the
award.
|
(5)
|
Represents
the remaining period of time that awards are expected to be
outstanding.
|
(6)
|
Based
on the implied yield available on zero-coupon government issues with an
equivalent term commensurate with the expected term of the
awards.
|
(7)
|
Based
on the annualized dividend
rate.
|
Options
outstanding
|
||||||||||||||||
Number
|
Weighted-average
|
Weighted-average
|
Aggregate
|
|||||||||||||
of
options
|
exercise
price
|
years to
expiration
|
intrinsic
value
|
|||||||||||||
In
millions
|
In
millions
|
|||||||||||||||
Outstanding at
December 31, 2007
(1)
|
14.7 | $ | 24.55 | |||||||||||||
Granted
|
0.9 | $ | 48.46 | |||||||||||||
Forfeited
|
- | $ | - | |||||||||||||
Exercised
|
(0.8 | ) | $ | 15.06 | ||||||||||||
Outstanding
at March 31, 2008
(1)
|
14.8 | $ | 26.71 | 4.8 | $ | 342 | ||||||||||
Exercisable
at March 31, 2008
(1)
|
12.4 | $ | 22.90 | 4.1 | $ | 333 |
(1)
|
Stock
options with a U.S. dollar exercise price have been translated to Canadian
dollars using the foreign exchange rate in effect at the balance sheet
date.
|
In
millions, unless otherwise indicated
|
||||||||||||||||||||
Year
of grant
|
2008
|
2007
|
2006
|
2005
|
Total
|
|||||||||||||||
Stock-based
compensation expense
|
||||||||||||||||||||
recognized
over requisite service period (1)
|
||||||||||||||||||||
Three months
ended March 31, 2008
|
$ | 3 | $ | 1 | $ | - | $ | 1 | $ | 5 | ||||||||||
Three months
ended March 31, 2007
|
N/A | $ | 4 | $ | 1 | $ | 1 | $ | 6 | |||||||||||
Fair
value per unit
|
||||||||||||||||||||
At grant date
($)
|
$ | 12.43 | $ | 13.36 | $ | 13.80 | $ | 9.19 | N/A | |||||||||||
Fair
value of awards vested during period
|
||||||||||||||||||||
Three months
ended March 31, 2008
|
$ | - | $ | 3 | $ | 3 | $ | 3 | $ | 9 | ||||||||||
Three months
ended March 31, 2007
|
N/A | $ | - | $ | 4 | $ | 3 | $ | 7 | |||||||||||
Nonvested
awards at March 31, 2008
|
||||||||||||||||||||
Unrecognized
compensation cost
|
$ | 7 | $ | 4 | $ | 3 | $ | 2 | $ | 16 | ||||||||||
Remaining
recognition period (years)
|
3.8 | 2.8 | 1.8 | 0.8 | N/A | |||||||||||||||
Assumptions
(1)
|
||||||||||||||||||||
Grant price ($)
|
$ | 48.46 | $ | 52.79 | $ | 51.51 | $ | 36.33 | N/A | |||||||||||
Expected stock
price volatility
(2)
|
27% | 24% | 25% | 25% | N/A | |||||||||||||||
Expected term
(years) (3)
|
5.3 | 5.2 | 5.2 | 5.2 | N/A | |||||||||||||||
Risk-free
interest rate
(4)
|
3.58% | 4.12% | 4.04% | 3.50% | N/A | |||||||||||||||
Dividend rate
($) (5)
|
$ | 0.92 | $ | 0.84 | $ | 0.65 | $ | 0.50 | N/A |
(1)
|
Compensation
cost is based on the grant date fair value using the Black-Scholes
option-pricing model that uses the assumptions at the grant
date.
|
(2)
|
Based
on the historical volatility of the Company's stock over a period
commensurate with the expected term of the
award.
|
(3)
|
Represents
the period of time that awards are expected to be outstanding. The Company
uses historical data to estimate option exercise and employee termination,
and groups of employees that have similar historical exercise behavior are
considered separately.
|
(4)
|
Based
on the implied yield available on zero-coupon government issues with an
equivalent term commensurate with the expected term of the
awards.
|
(5)
|
Based
on the annualized dividend
rate.
|
In
millions
|
Three
months ended March 31,
|
2008
|
2007
|
||||||
Service
cost
|
$ | 35 | $ | 38 | |||||
Interest
cost
|
200 | 186 | |||||||
Expected
return on plan assets
|
(251 | ) | (234 | ) | |||||
Amortization
of prior service cost
|
5 | 5 | |||||||
Recognized net
actuarial loss
|
- | 13 | |||||||
Net
periodic benefit cost (income)
|
$ | (11 | ) | $ | 8 | ||||
(b)
Components of net periodic benefit cost for postretirement
benefits
|
|||||||||
In
millions
|
Three
months ended March 31,
|
2008
|
2007
|
||||||
Service
cost
|
$ | 1 | $ | 1 | |||||
Interest
cost
|
4 | 4 | |||||||
Curtailment
gain
|
(2 | ) | (3 | ) | |||||
Amortization
of prior service cost
|
1 | - | |||||||
Recognized net
actuarial gain
|
(1 | ) | (1 | ) | |||||
Net
periodic benefit cost
|
$ | 3 | $ | 1 |
(i)
|
the lack of
specific technical information available with respect to many
sites;
|
(ii)
|
the absence of
any government authority, third-party orders, or claims with respect to
particular sites;
|
(iii)
|
the potential
for new or changed laws and regulations and for development of new
remediation technologies and uncertainty regarding the timing of the work
with respect to particular sites;
|
(iv)
|
the ability to
recover costs from any third parties with respect to particular sites;
and
|
(a)
|
contracts
granting the Company the right to use or enter upon property owned by
third parties such as leases, easements, trackage rights and sidetrack
agreements;
|
(b)
|
contracts
granting rights to others to use the Company’s
property, such as leases, licenses and
easements;
|
(c)
|
contracts for
the sale of assets and securitization of accounts
receivable;
|
(d)
|
contracts for
the acquisition of services;
|
(e)
|
financing
agreements;
|
(f)
|
trust
indentures, fiscal agency agreements, underwriting agreements or similar
agreements relating to debt or equity securities of the Company and
engagement agreements with financial
advisors;
|
(g)
|
transfer agent
and registrar agreements in respect of the Company’s
securities;
|
(h)
|
trust and
other agreements relating to pension plans and other plans, including
those establishing trust funds to secure payment to certain officers and
senior employees of special retirement compensation
arrangements;
|
(i)
|
pension
transfer agreements;
|
(j)
|
master
agreements with financial institutions governing derivative transactions;
and
|
(k)
|
settlement
agreements with insurance companies or other third parties whereby such
insurer or third party has been indemnified for any present or future
claims relating to insurance policies, incidents or events covered by the
settlement agreements.
|
In
millions, except per share data
|
Three
months ended March 31,
|
2008
|
2007
|
||||||
Net
income
|
$ | 311 | $ | 324 | |||||
Weighted-average
shares outstanding
|
482.8 | 510.2 | |||||||
Effect of
stock options
|
5.8 | 7.6 | |||||||
Weighted-average
diluted shares outstanding
|
488.6 | 517.8 | |||||||
Basic earnings
per share
|
$ | 0.64 | $ | 0.64 | |||||
Diluted
earnings per share
|
$ | 0.64 | $ | 0.63 |
Three
months ended
|
||||||||
March
31
|
||||||||
2008
|
2007
|
|||||||
(Unaudited)
|
||||||||
Statistical
operating data
|
||||||||
Rail freight
revenues ($ millions)
|
1,760 | 1,754 | ||||||
Gross ton
miles (GTM) (millions)
|
84,327 | 81,741 | ||||||
Revenue ton
miles (RTM) (millions)
|
44,959 | 44,093 | ||||||
Carloads
(thousands)
|
1,132 | 1,131 | ||||||
Route miles
(includes Canada and the U.S.)
|
20,421 | 20,263 | ||||||
Employees (end
of period)
|
22,703 | 22,139 | ||||||
Employees
(average for the period)
|
22,636 | 21,478 | ||||||
Productivity
|
||||||||
Operating
ratio (%)
|
72.9 | 70.6 | ||||||
Rail freight
revenue per RTM (cents)
|
3.91 | 3.98 | ||||||
Rail freight
revenue per carload ($)
|
1,555 | 1,551 | ||||||
Operating
expenses per GTM (cents)
|
1.66 | 1.65 | ||||||
Labor and
fringe benefits expense per GTM (cents)
|
0.55 | 0.59 | ||||||
GTMs per
average number of employees (thousands)
|
3,725 | 3,806 | ||||||
Diesel fuel
consumed (U.S. gallons in millions)
|
99 | 96 | ||||||
Average fuel
price ($/U.S. gallon)
|
3.02 | 2.18 | ||||||
GTMs per U.S.
gallon of fuel consumed
|
852 | 851 | ||||||
Financial
ratio
|
||||||||
Debt to total
capitalization ratio (% at end of period)
|
38.6 | 37.3 | ||||||
Safety
indicators
|
||||||||
Injury frequency
rate per 200,000 person hours (2)
|
2.1 | 1.6 | ||||||
Accident rate per
million train miles
(2)
|
2.7 | 2.7 |
(1)
|
Includes
data relating to companies acquired as of the date of
acquisition.
|
(2)
|
Based
on Federal Railroad Administration (FRA) reporting
criteria.
|
Three
months ended March 31
|
||||||||||||
Variance
|
||||||||||||
2008
|
2007
|
Fav
(Unfav)
|
||||||||||
(Unaudited)
|
||||||||||||
Revenues
(millions of dollars)
|
||||||||||||
Petroleum and
chemicals
|
319 | 303 | 5 | % | ||||||||
Metals and
minerals
|
205 | 198 | 4 | % | ||||||||
Forest
products
|
330 | 410 | (20 | %) | ||||||||
Coal
|
99 | 89 | 11 | % | ||||||||
Grain and
fertilizers
|
340 | 309 | 10 | % | ||||||||
Intermodal
|
351 | 313 | 12 | % | ||||||||
Automotive
|
116 | 132 | (12 | %) | ||||||||
Other
revenues
|
167 | 152 | 10 | % | ||||||||
1,927 | 1,906 | 1 | % | |||||||||
Revenue
ton miles (millions)
|
||||||||||||
Petroleum and
chemicals
|
8,426 | 7,870 | 7 | % | ||||||||
Metals and
minerals
|
4,091 | 3,850 | 6 | % | ||||||||
Forest
products
|
8,458 | 10,105 | (16 | %) | ||||||||
Coal
|
3,392 | 3,100 | 9 | % | ||||||||
Grain and
fertilizers
|
11,829 | 10,788 | 10 | % | ||||||||
Intermodal
|
8,089 | 7,591 | 7 | % | ||||||||
Automotive
|
674 | 789 | (15 | %) | ||||||||
44,959 | 44,093 | 2 | % | |||||||||
Rail
freight revenue / RTM (cents)
|
||||||||||||
Total
rail freight revenue per RTM
|
3.91 | 3.98 | (2 | %) | ||||||||
Commodity
groups:
|
||||||||||||
Petroleum and
chemicals
|
3.79 | 3.85 | (2 | %) | ||||||||
Metals and
minerals
|
5.01 | 5.14 | (3 | %) | ||||||||
Forest
products
|
3.90 | 4.06 | (4 | %) | ||||||||
Coal
|
2.92 | 2.87 | 2 | % | ||||||||
Grain and
fertilizers
|
2.87 | 2.86 | - | |||||||||
Intermodal
|
4.34 | 4.12 | 5 | % | ||||||||
Automotive
|
17.21 | 16.73 | 3 | % | ||||||||
Carloads
(thousands)
|
||||||||||||
Petroleum and
chemicals
|
145 | 146 | (1 | %) | ||||||||
Metals and
minerals
|
238 | 231 | 3 | % | ||||||||
Forest
products
|
127 | 152 | (16 | %) | ||||||||
Coal
|
87 | 90 | (3 | %) | ||||||||
Grain and
fertilizers
|
151 | 141 | 7 | % | ||||||||
Intermodal
|
327 | 305 | 7 | % | ||||||||
Automotive
|
57 | 66 | (14 | %) | ||||||||
1,132 | 1,131 | - | ||||||||||
Rail
freight revenue / carload (dollars)
|
||||||||||||
Total
rail freight revenue per carload
|
1,555 | 1,551 | - | |||||||||
Commodity
groups:
|
||||||||||||
Petroleum and
chemicals
|
2,200 | 2,075 | 6 | % | ||||||||
Metals and
minerals
|
861 | 857 | - | |||||||||
Forest
products
|
2,598 | 2,697 | (4 | %) | ||||||||
Coal
|
1,138 | 989 | 15 | % | ||||||||
Grain and
fertilizers
|
2,252 | 2,191 | 3 | % | ||||||||
Intermodal
|
1,073 | 1,026 | 5 | % | ||||||||
Automotive
|
2,035 | 2,000 | 2 | % |
In
millions
|
Three
months ended March 31,
|
2008
|
2007
|
||||||
Cash provided
from operating activities
|
$ | 165 | $ | 263 | |||||
Cash used by
investing activities
|
(166 | ) | (193 | ) | |||||
Cash provided
(used) before financing activities
|
(1 | ) | 70 | ||||||
Adjustments:
|
|||||||||
Change in
accounts receivable securitization
|
163 | (139 | ) | ||||||
Dividends
paid
|
(111 | ) | (107 | ) | |||||
Effect of
foreign exchange fluctuations on U.S. dollar-denominated cash and cash
equivalents
|
10 | - | |||||||
Free
cash flow
|
$ | 61 | $ | (176 | ) |
Three months ended March
31
|
||||||||
$ in millions, except per share
data, or unless otherwise indicated
|
2008
|
2007
|
||||||
(Unaudited)
|
||||||||
Financial
results
|
||||||||
Revenues
|
$ | 1,927 | $ | 1,906 | ||||
Operating
income
|
$ | 523 | $ | 561 | ||||
Net income
|
$ | 311 | $ | 324 | ||||
Operating
ratio
|
72.9% | 70.6% | ||||||
Basic earnings per
share
|
$ | 0.64 | $ | 0.64 | ||||
Diluted earnings per
share
|
$ | 0.64 | $ | 0.63 | ||||
Dividend declared per
share
|
$ | 0.23 | $ | 0.21 | ||||
Financial
position
|
||||||||
Total
assets
|
$ | 24,164 | $ | 23,723 | ||||
Total long-term financial
liabilities
|
$ | 12,489 | $ | 12,159 | ||||
Statistical operating data and
productivity measures (a)
|
||||||||
Employees (average for
the period)
|
22,636 | 21,478 | ||||||
Gross ton miles (GTM) per average
number of employees (thousands)
|
3,725 | 3,806 | ||||||
GTMs per U.S. gallon of fuel
consumed
|
852 | 851 |
In millions, unless otherwise
indicated
|
Three months ended March
31,
|
2008
|
2007
|
% Change
|
|||||||||
(Unaudited)
|
|||||||||||||
Rail freight
revenues
|
$ | 1,760 | $ | 1,754 | - | ||||||||
Other
revenues
|
167 | 152 | 10 | % | |||||||||
Total
revenues
|
$ | 1,927 | $ | 1,906 | 1 | % | |||||||
Rail freight
revenues:
|
|||||||||||||
Petroleum and
chemicals
|
$ | 319 | $ | 303 | 5 | % | |||||||
Metals and
minerals
|
205 | 198 | 4 | % | |||||||||
Forest
products
|
330 | 410 | (20 | %) | |||||||||
Coal
|
99 | 89 | 11 | % | |||||||||
Grain and
fertilizers
|
340 | 309 | 10 | % | |||||||||
Intermodal
|
351 | 313 | 12 | % | |||||||||
Automotive
|
116 | 132 | (12 | %) | |||||||||
Total rail freight
revenues
|
$ | 1,760 | $ | 1,754 | - | ||||||||
Revenue ton miles (RTM)
(millions)
|
44,959 | 44,093 | 2 | % | |||||||||
Rail freight revenue/RTM
(cents)
|
3.91 | 3.98 | (2 | %) |
Three months ended March
31,
|
2008
|
2007
|
% Change
|
|||||||||
Revenues (millions)
|
$ | 319 | $ | 303 | 5 | % | ||||||
RTMs (millions)
|
8,426 | 7,870 | 7 | % | ||||||||
Revenue/RTM (cents)
|
3.79 | 3.85 | (2 | %) |
Three months ended March
31,
|
2008
|
2007
|
% Change
|
|||||||||
Revenues (millions)
|
$ | 205 | $ | 198 | 4 | % | ||||||
RTMs (millions)
|
4,091 | 3,850 | 6 | % | ||||||||
Revenue/RTM (cents)
|
5.01 | 5.14 | (3 | %) |
Three months ended March
31,
|
2008
|
2007
|
% Change
|
|||||||||
Revenues (millions)
|
$ | 330 | $ | 410 | (20 | %) | ||||||
RTMs (millions)
|
8,458 | 10,105 | (16 | %) | ||||||||
Revenue/RTM (cents)
|
3.90 | 4.06 | (4 | %) |
Three
months ended March 31,
|
2008
|
2007
|
%
Change
|
||||||||||
Revenues(millions)
|
$ | 99 | $ | 89 | 11 | % | |||||||
RTMs(millions)
|
3,392 | 3,100 | 9 | % | |||||||||
Revenue/RTM
(cents)
|
2.92 | 2.87 | 2 | % |
Three
months ended March 31,
|
2008
|
2007
|
%
Change
|
||||||||||
Revenues(millions)
|
$ | 340 | $ | 309 | 10 | % | |||||||
RTMs(millions)
|
11,829 | 10,788 | 10 | % | |||||||||
Revenue/RTM
(cents)
|
2.87 | 2.86 | - |
Three
months ended March 31,
|
2008
|
2007
|
%
Change
|
||||||||||
Revenues(millions)
|
$ | 351 | $ | 313 | 12 | % | |||||||
RTMs(millions)
|
8,089 | 7,591 | 7 | % | |||||||||
Revenue/RTM
(cents)
|
4.34 | 4.12 | 5 | % |
Three
months ended March 31,
|
2008
|
2007
|
%
Change
|
||||||||||
Revenues(millions)
|
$ | 116 | $ | 132 | (12 | %) | |||||||
RTMs(millions)
|
674 | 789 | (15 | %) | |||||||||
Revenue/RTM
(cents)
|
17.21 | 16.73 | 3 | % |
Percentage of
revenues
|
|||||||||||||||||||||
In
millions
|
Three
months ended March 31,
|
2008
|
2007
|
%
Change
|
2008
|
2007
|
|||||||||||||||
(Unaudited)
|
|||||||||||||||||||||
Labor and
fringe benefits
|
$ | 461 | $ | 485 | 5 | % | 23.9 | % | 25.4 | % | |||||||||||
Purchased
services and material
|
285 | 276 | (3 | %) | 14.8 | % | 14.5 | % | |||||||||||||
Fuel
|
310 | 219 | (42 | %) | 16.1 | % | 11.5 | % | |||||||||||||
Depreciation
and amortization
|
175 | 171 | (2 | %) | 9.1 | % | 9.0 | % | |||||||||||||
Equipment
rents
|
64 | 66 | 3 | % | 3.3 | % | 3.5 | % | |||||||||||||
Casualty and
other
|
109 | 128 | 15 | % | 5.7 | % | 6.7 | % | |||||||||||||
Total
operating expenses
|
$ | 1,404 | $ | 1,345 | (4 | %) | 72.9 | % | 70.6 | % |
In
millions, except per share data
|
||||||||||||||||||||||||||||||||
2008
|
2007
|
2006
|
||||||||||||||||||||||||||||||
Quarter
|
Quarters
|
Quarters
|
||||||||||||||||||||||||||||||
First
|
Fourth
|
Third
|
Second
|
First
|
Fourth
|
Third
|
Second
|
|||||||||||||||||||||||||
Revenues
|
$ | 1,927 | $ | 1,941 | $ | 2,023 | $ | 2,027 | $ | 1,906 | $ | 2,000 | $ | 2,032 | $ | 2,000 | ||||||||||||||||
Operating
income
|
$ | 523 | $ | 736 | $ | 768 | $ | 811 | $ | 561 | $ | 756 | $ | 844 | $ | 805 | ||||||||||||||||
Net
income
|
$ | 311 | $ | 833 | $ | 485 | $ | 516 | $ | 324 | $ | 499 | $ | 497 | $ | 729 | ||||||||||||||||
Basic earnings
per share
|
$ | 0.64 | $ | 1.70 | $ | 0.97 | $ | 1.02 | $ | 0.64 | $ | 0.97 | $ | 0.95 | $ | 1.38 | ||||||||||||||||
Diluted
earnings per share
|
$ | 0.64 | $ | 1.68 | $ | 0.96 | $ | 1.01 | $ | 0.63 | $ | 0.95 | $ | 0.94 | $ | 1.35 | ||||||||||||||||
Dividend
declared per share
|
$ | 0.2300 | $ | 0.2100 | $ | 0.2100 | $ | 0.2100 | $ | 0.2100 | $ | 0.1625 | $ | 0.1625 | $ | 0.1625 |
In
millions, except per share data
|
|||||||||||||||||||||||||||||||||
2008
|
2007
|
2006
|
|||||||||||||||||||||||||||||||
Quarter
|
Quarters
|
Quarters
|
|||||||||||||||||||||||||||||||
First
|
Fourth
|
Third
|
Second
|
First
|
Fourth
|
Third
|
Second
|
||||||||||||||||||||||||||
Deferred
income tax recoveries (a)
|
$ | 11 | $ | 284 | $ | 14 | $ | 30 | $ | - | $ | 27 | $ | - | $ | 250 | |||||||||||||||||
Gain on sale
of Central Station Complex (after-tax) (b)
|
- | 64 | - | - | - | - | - | - | |||||||||||||||||||||||||
Gain on sale
of investment in EWS(after-tax) (c)
|
- | 41 | - | - | - | - | - | - | |||||||||||||||||||||||||
UTU strike
(after-tax) (d)
|
- | - | - | - | (35 | ) | - | - | - | ||||||||||||||||||||||||
Impact on net
income
|
$ | 11 | $ | 389 | $ | 14 | $ | 30 | $ | (35 | ) | $ | 27 | $ | - | $ | 250 | ||||||||||||||||
Basic earnings
per share
|
$ | 0.02 | $ | 0.79 | $ | 0.03 | $ | 0.06 | $ | (0.07 | ) | $ | 0.05 | $ | - | $ | 0.48 | ||||||||||||||||
Diluted
earnings per share
|
$ | 0.02 | $ | 0.78 | $ | 0.03 | $ | 0.06 | $ | (0.07 | ) | $ | 0.05 | $ | - | $ | 0.46 |
(a)
|
Deferred
income tax recoveries resulted mainly from the enactment of corporate
income tax rate changes in Canada.
|
(b)
|
The
Company sold its Central Station Complex in Montreal for proceeds of $355
million before transaction costs. A gain of $92 million ($64
million after-tax) was recognized immediately in Other income
(loss).
|
(c)
|
The
Company sold its 32% ownership interest in EWS for cash proceeds of $114
million, resulting in a gain on disposition of the investment of $61
million ($41 million after-tax), which was recorded in Other income
(loss).
|
(d)
|
A
strike by 2,800 members of the UTU impacted first-quarter 2007 operating
income and net income by approximately $50 million and $35 million,
respectively.
|
In
millions
|
Three
months ended March 31,
|
2008
|
2007
|
||||||
Track and
roadway
|
$ | 134 | $ | 147 | |||||
Rolling
stock
|
53 | 30 | |||||||
Buildings
|
4 | 6 | |||||||
Information
technology
|
17 | 17 | |||||||
Other
|
13 | 9 | |||||||
Gross property
additions
|
221 | 209 | |||||||
Less: capital
leases(a)
|
44 | 6 | |||||||
Property
additions
|
$ | 177 | $ | 203 |
(a)
|
During
the first quarter of 2008, the Company recorded $44 million ($6 million in
2007) of assets it acquired through equipment leases, for which an
equivalent amount was recorded in
debt.
|
In
millions
|
Three
months ended March 31,
|
2008
|
2007
|
||||||
Cash provided
from operating activities
|
$ | 165 | $ | 263 | |||||
Cash used by
investing activities
|
(166 | ) | (193 | ) | |||||
Cash provided
(used) before financing activities
|
(1 | ) | 70 | ||||||
Adjustments:
|
|||||||||
Change in
accounts receivable securitization
|
163 | (139 | ) | ||||||
Dividends
paid
|
(111 | ) | (107 | ) | |||||
Effect of
foreign exchange fluctuations on U.S. dollar-denominated cash and cash
equivalents
|
10 | - | |||||||
Free
cash flow
|
$ | 61 | $ | (176 | ) |
Adjusted
debt-to-total capitalization ratio
|
|||||||||
March
31,
|
2008
|
2007
|
|||||||
Debt-to-total
capitalization ratio (a)
|
38.6% | 37.3% | |||||||
Add : Present value of
operating lease commitments plus securitization financing (b)
|
4.0% | 4.2% | |||||||
Adjusted
debt-to-total capitalization ratio
|
42.6% | 41.5% | |||||||
Adjusted
debt-to-adjusted EBITDA
|
|||||||||
$ in millions, unless otherwise indicated |
Twelve
months ended March 31,
|
2008
|
2007
|
||||||
Debt
|
$ | 6,333 | $ | 5,846 | |||||
Add : Present value of
operating lease commitments plus securitization financing (b)
|
1,135 | 1,102 | |||||||
Adjusted
debt
|
7,468 | 6,948 | |||||||
Operating
income
|
2,838 | 2,966 | |||||||
Add : Depreciation and
amortization
|
681 | 657 | |||||||
EBITDA
|
3,519 | 3,623 | |||||||
Add : Deemed interest
on operating leases
|
41 | 33 | |||||||
Adjusted
EBITDA
|
$ | 3,560 | $ | 3,656 | |||||
Adjusted
debt-to-adjusted EBITDA
|
2.1
times
|
1.9
times
|
(a)
|
Debt-to-total
capitalization is calculated as total long-term debt plus current portion
of long-term debt divided by the sum of total debt plus total
shareholders’ equity.
|
(b)
|
The
operating lease commitments have been discounted using the Company’s
implicit interest rate for each of the periods
presented.
|
2013 &
|
||||||||||||||||||||||||||||
In
millions
|
Total
|
2008
|
2009
|
2010
|
2011
|
2012
|
thereafter
|
|||||||||||||||||||||
Long-term debt
obligations(a)
|
$ | 5,176 | $ | 175 | $ | 309 | $ | - | $ | 1,041 | $ | - | $ | 3,651 | ||||||||||||||
Interest on
long-term debt obligations
|
5,595 | 226 | 289 | 276 | 271 | 231 | 4,302 | |||||||||||||||||||||
Capital lease
obligations(b)
|
1,660 | 99 | 171 | 106 | 171 | 80 | 1,033 | |||||||||||||||||||||
Operating
lease obligations(c)
|
867 | 116 | 132 | 111 | 87 | 71 | 350 | |||||||||||||||||||||
Purchase
obligations(d)
|
870 | 395 | 161 | 112 | 54 | 37 | 111 | |||||||||||||||||||||
Other
long-term liabilities reflected on
|
||||||||||||||||||||||||||||
the balance
sheet (e)
|
942 | 57 | 60 | 53 | 45 | 43 | 684 | |||||||||||||||||||||
Total
obligations
|
$ | 15,110 | $ | 1,068 | $ | 1,122 | $ | 658 | $ | 1,669 | $ | 462 | $ | 10,131 |
(a)
|
Presented
net of unamortized discounts, of which $836 million relates to
non-interest bearing Notes due in 2094, and excludes capital lease
obligations of $1,157 million which are included in “Capital lease
obligations.”
|
(b)
|
Includes
$1,157 million of minimum lease payments and $503 million of imputed
interest at rates ranging from 3.0% to
7.9%.
|
(c)
|
Includes
minimum rental payments for operating leases having initial non-cancelable
lease terms of one year or more. The Company also has operating
lease agreements for its automotive fleet with minimum one-year
non-cancelable terms for which its practice is to renew monthly
thereafter. The estimated annual rental payments for such
leases are approximately $30 million and generally extend over five
years.
|
(d)
|
Includes
commitments for railroad ties, rail, freight cars, locomotives and other
equipment and services, and outstanding information technology service
contracts and licenses.
|
(e)
|
Includes
expected payments for workers’ compensation, workforce reductions,
postretirement benefits other than pensions and environmental liabilities
that have been classified as contractual settlement
agreements.
|
March
31
|
December
31
|
March
31
|
||||||||||
In
millions
|
2008
|
2007
|
2007
|
|||||||||
(Unaudited)
|
(Unaudited)
|
|||||||||||
Pension
asset
|
$ | 1,811 | $ | 1,768 | $ | 1,292 | ||||||
Pension
liability
|
193 | 187 | 203 | |||||||||
Other
postretirement benefits liability
|
269 | 266 | 285 | |||||||||
Provision for
personal injury and other claims
|
458 | 446 | 613 | |||||||||
Provision for
environmental costs
|
109 | 111 | 121 | |||||||||
Net deferred
income tax provision
|
4,954 | 4,840 | 4,942 | |||||||||
Properties
|
20,754 | 20,413 | 20,988 |
(1)
|
I have
reviewed this report on Form 6-K of Canadian National Railway
Company;
|
(2)
|
Based on my
knowledge, this report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made,
not misleading with respect to the period covered by this
report;
|
(3)
|
Based on my
knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
(4)
|
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
(a)
|
Designed such
disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being
prepared;
|
(b)
|
Designed such
internal control over financial reporting, or caused such internal control
over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in
accordance with generally accepted accounting
principles;
|
(c)
|
Evaluated the
effectiveness of the registrant’s disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation;
and
|
(d)
|
Disclosed in
this report any change in the registrant’s internal control over financial
reporting that occurred during the registrant’s most recent fiscal quarter
that has materially affected, or is reasonably likely to materially
affect, the registrant’s internal control over financial reporting;
and
|
(5)
|
The
registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent
functions):
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information;
and
|
(b)
|
Any fraud,
whether or not material, that involves management or other employees who
have a significant role in the registrant's internal control over
financial reporting.
|
/s/ E. Hunter
Harrison
|
|
E.
Hunter Harrison
|
|
President and
Chief Executive Officer
|
(1)
|
I have
reviewed this report on Form 6-K of Canadian National Railway
Company;
|
(2)
|
Based on my
knowledge, this report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made,
not misleading with respect to the period covered by this
report;
|
(3)
|
Based on my
knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
(4)
|
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
(a)
|
Designed such
disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being
prepared;
|
(b)
|
Designed such
internal control over financial reporting, or caused such internal control
over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in
accordance with generally accepted accounting
principles;
|
(c)
|
Evaluated the
effectiveness of the registrant’s disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation;
and
|
(d)
|
Disclosed in
this report any change in the registrant’s internal control over financial
reporting that occurred during the registrant’s most recent fiscal quarter
that has materially affected, or is reasonably likely to materially
affect, the registrant’s internal control over financial reporting;
and
|
(5)
|
The
registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent
functions):
|
(a)
|
All significant
deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to
adversely affect the registrant's ability to record, process, summarize
and report financial information;
and
|
(b)
|
Any fraud,
whether or not material, that involves management or other employees who
have a significant role in the registrant's internal control over
financial reporting.
|
/s/
Claude Mongeau
|
|
Claude
Mongeau
|
|
Executive
Vice-President and Chief
Financial
Officer
|
Canadian National Railway Company | |||||
Date: April 23, 2008 | By: | /s/ Cristina Circelli | |||
Name: | Cristina Circelli | ||||
Title: | Deputy
Corporate Secretary and General Counsel |