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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Canadian Pacific Kansas City Limited | NYSE:CP | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.68 | -0.87% | 77.75 | 78.815 | 72.29 | 77.60 | 3,094,545 | 01:00:00 |
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Canada
|
|
98-0355078
|
(State or Other Jurisdiction
of Incorporation or Organization)
|
|
(IRS Employer
Identification No.)
|
|
|
|
7550 Ogden Dale Road S.E.
Calgary, Alberta, Canada
|
|
T2C 4X9
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
Large accelerated filer
þ
|
|
Accelerated filer
o
|
|
Non-accelerated filer
o
|
|
Smaller reporting company
o
|
|
Emerging growth company
o
|
|
|
PART I - FINANCIAL INFORMATION
|
|
|
|
Page
|
|
||
|
|
|
|
||
|
For the Three and Nine Months Ended September 30, 2017 and 2016
|
|
|
|
|
|
||
|
For the Three and Nine Months Ended September 30, 2017 and 2016
|
|
|
|
|
|
||
|
As at September 30, 2017 and December 31, 2016
|
|
|
|
|
|
||
|
For the Three and Nine Months Ended September 30, 2017 and 2016
|
|
|
|
|
|
||
|
For the Nine Months Ended September 30, 2017 and 2016
|
|
|
|
|
|
||
|
|
|
|
||
|
||
|
||
|
||
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|
PART II - OTHER INFORMATION
|
|
|
|
For the three months ended September 30
|
|
For the nine months ended September 30
|
||||||||||||
(in millions of Canadian dollars, except share and per share data)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Revenues
|
|
|
|
|
|
|
|
|
||||||||
Freight
|
|
$
|
1,547
|
|
|
$
|
1,510
|
|
|
$
|
4,708
|
|
|
$
|
4,464
|
|
Non-freight
|
|
48
|
|
|
44
|
|
|
133
|
|
|
131
|
|
||||
Total revenues
|
|
1,595
|
|
|
1,554
|
|
|
4,841
|
|
|
4,595
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
|
||||||||
Compensation and benefits (Note 11)
|
|
256
|
|
|
294
|
|
|
766
|
|
|
907
|
|
||||
Fuel
|
|
150
|
|
|
138
|
|
|
480
|
|
|
394
|
|
||||
Materials
|
|
45
|
|
|
39
|
|
|
142
|
|
|
133
|
|
||||
Equipment rents
|
|
35
|
|
|
43
|
|
|
108
|
|
|
132
|
|
||||
Depreciation and amortization
|
|
162
|
|
|
155
|
|
|
493
|
|
|
478
|
|
||||
Purchased services and other (Note 4)
|
|
257
|
|
|
228
|
|
|
812
|
|
|
690
|
|
||||
Total operating expenses
|
|
905
|
|
|
897
|
|
|
2,801
|
|
|
2,734
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Operating income
|
|
690
|
|
|
657
|
|
|
2,040
|
|
|
1,861
|
|
||||
Less:
|
|
|
|
|
|
|
|
|
||||||||
Other income and charges (Note 5)
|
|
(105
|
)
|
|
71
|
|
|
(194
|
)
|
|
(119
|
)
|
||||
Net interest expense
|
|
115
|
|
|
116
|
|
|
357
|
|
|
355
|
|
||||
Income before income tax expense
|
|
680
|
|
|
470
|
|
|
1,877
|
|
|
1,625
|
|
||||
Income tax expense (Note 6)
|
|
170
|
|
|
123
|
|
|
456
|
|
|
410
|
|
||||
Net income
|
|
$
|
510
|
|
|
$
|
347
|
|
|
$
|
1,421
|
|
|
$
|
1,215
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share (Note 7)
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share
|
|
$
|
3.50
|
|
|
$
|
2.35
|
|
|
$
|
9.72
|
|
|
$
|
8.06
|
|
Diluted earnings per share
|
|
$
|
3.50
|
|
|
$
|
2.34
|
|
|
$
|
9.70
|
|
|
$
|
8.02
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average number of shares (millions) (Note 7)
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
145.5
|
|
|
147.3
|
|
|
146.2
|
|
|
150.7
|
|
||||
Diluted
|
|
145.8
|
|
|
148.3
|
|
|
146.6
|
|
|
151.6
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Dividends declared per share
|
|
$
|
0.5625
|
|
|
$
|
0.5000
|
|
|
$
|
1.6250
|
|
|
$
|
1.3500
|
|
|
For the three months ended September 30
|
|
For the nine months ended September 30
|
||||||||||||
(in millions of Canadian dollars)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income
|
$
|
510
|
|
|
$
|
347
|
|
|
$
|
1,421
|
|
|
$
|
1,215
|
|
Net gain (loss) in foreign currency translation adjustments, net of hedging activities
|
19
|
|
|
(7
|
)
|
|
38
|
|
|
33
|
|
||||
Change in derivatives designated as cash flow hedges
|
2
|
|
|
1
|
|
|
11
|
|
|
(75
|
)
|
||||
Change in pension and post-retirement defined benefit plans
|
38
|
|
|
47
|
|
|
113
|
|
|
137
|
|
||||
Other comprehensive income before income taxes
|
59
|
|
|
41
|
|
|
162
|
|
|
95
|
|
||||
Income tax expense on above items
|
(34
|
)
|
|
(3
|
)
|
|
(78
|
)
|
|
(51
|
)
|
||||
Other comprehensive income (Note 3)
|
25
|
|
|
38
|
|
|
84
|
|
|
44
|
|
||||
Comprehensive income
|
$
|
535
|
|
|
$
|
385
|
|
|
$
|
1,505
|
|
|
$
|
1,259
|
|
|
September 30
|
|
December 31
|
||||
(in millions of Canadian dollars)
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
142
|
|
|
$
|
164
|
|
Accounts receivable, net
|
628
|
|
|
591
|
|
||
Materials and supplies
|
157
|
|
|
184
|
|
||
Other current assets
|
65
|
|
|
70
|
|
||
|
992
|
|
|
1,009
|
|
||
Investments
|
185
|
|
|
194
|
|
||
Properties
|
16,700
|
|
|
16,689
|
|
||
Goodwill and intangible assets
|
187
|
|
|
202
|
|
||
Pension asset
|
1,356
|
|
|
1,070
|
|
||
Other assets
|
59
|
|
|
57
|
|
||
Total assets
|
$
|
19,479
|
|
|
$
|
19,221
|
|
Liabilities and shareholders’ equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
1,139
|
|
|
$
|
1,322
|
|
Long-term debt maturing within one year (Notes 8 and 10)
|
749
|
|
|
25
|
|
||
|
1,888
|
|
|
1,347
|
|
||
Pension and other benefit liabilities
|
726
|
|
|
734
|
|
||
Other long-term liabilities
|
221
|
|
|
284
|
|
||
Long-term debt (Note 10)
|
7,384
|
|
|
8,659
|
|
||
Deferred income taxes
|
3,695
|
|
|
3,571
|
|
||
Total liabilities
|
13,914
|
|
|
14,595
|
|
||
Shareholders’ equity
|
|
|
|
||||
Share capital
|
2,025
|
|
|
2,002
|
|
||
Additional paid-in capital
|
42
|
|
|
52
|
|
||
Accumulated other comprehensive loss (Note 3)
|
(1,715
|
)
|
|
(1,799
|
)
|
||
Retained earnings
|
5,213
|
|
|
4,371
|
|
||
|
5,565
|
|
|
4,626
|
|
||
Total liabilities and shareholders’ equity
|
$
|
19,479
|
|
|
$
|
19,221
|
|
|
For the three months ended September 30
|
|
For the nine months ended September 30
|
||||||||||||
(in millions of Canadian dollars)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Operating activities
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
510
|
|
|
$
|
347
|
|
|
$
|
1,421
|
|
|
$
|
1,215
|
|
Reconciliation of net income to cash provided by operating activities:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
162
|
|
|
155
|
|
|
493
|
|
|
478
|
|
||||
Deferred income taxes (Note 6)
|
77
|
|
|
50
|
|
|
168
|
|
|
233
|
|
||||
Pension funding in excess of expense (Note 12)
|
(59
|
)
|
|
(26
|
)
|
|
(178
|
)
|
|
(105
|
)
|
||||
Foreign exchange (gain) loss on long-term debt (Note 5)
|
(105
|
)
|
|
46
|
|
|
(200
|
)
|
|
(153
|
)
|
||||
Other operating activities, net
|
(1
|
)
|
|
(17
|
)
|
|
(88
|
)
|
|
(130
|
)
|
||||
Change in non-cash working capital balances related to operations
|
(57
|
)
|
|
36
|
|
|
(167
|
)
|
|
(217
|
)
|
||||
Cash provided by operating activities
|
527
|
|
|
591
|
|
|
1,449
|
|
|
1,321
|
|
||||
Investing activities
|
|
|
|
|
|
|
|
||||||||
Additions to properties
|
(319
|
)
|
|
(294
|
)
|
|
(895
|
)
|
|
(902
|
)
|
||||
Proceeds from sale of properties and other assets (Note 4)
|
13
|
|
|
16
|
|
|
29
|
|
|
87
|
|
||||
Other
|
—
|
|
|
—
|
|
|
5
|
|
|
(2
|
)
|
||||
Cash used in investing activities
|
(306
|
)
|
|
(278
|
)
|
|
(861
|
)
|
|
(817
|
)
|
||||
Financing activities
|
|
|
|
|
|
|
|
||||||||
Dividends paid
|
(83
|
)
|
|
(75
|
)
|
|
(229
|
)
|
|
(182
|
)
|
||||
Issuance of CP Common Shares
|
2
|
|
|
5
|
|
|
39
|
|
|
14
|
|
||||
Purchase of CP Common Shares (Note 9)
|
(226
|
)
|
|
(412
|
)
|
|
(368
|
)
|
|
(1,200
|
)
|
||||
Repayment of long-term debt, excluding commercial paper
|
(3
|
)
|
|
(12
|
)
|
|
(17
|
)
|
|
(30
|
)
|
||||
Net issuance of commercial paper (Note 8)
|
—
|
|
|
190
|
|
|
—
|
|
|
366
|
|
||||
Settlement of forward starting swaps (Note 10)
|
—
|
|
|
—
|
|
|
(22
|
)
|
|
—
|
|
||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||
Cash used in financing activities
|
(310
|
)
|
|
(304
|
)
|
|
(597
|
)
|
|
(1,035
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents
|
(7
|
)
|
|
2
|
|
|
(13
|
)
|
|
(16
|
)
|
||||
Cash position
|
|
|
|
|
|
|
|
||||||||
(Decrease) increase in cash and cash equivalents
|
(96
|
)
|
|
11
|
|
|
(22
|
)
|
|
(547
|
)
|
||||
Cash and cash equivalents at beginning of period
|
238
|
|
|
92
|
|
|
164
|
|
|
650
|
|
||||
Cash and cash equivalents at end of period
|
$
|
142
|
|
|
$
|
103
|
|
|
$
|
142
|
|
|
$
|
103
|
|
|
|
|
|
|
|
|
|
||||||||
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
|
||||||||
Income taxes paid
|
$
|
78
|
|
|
$
|
17
|
|
|
$
|
364
|
|
|
$
|
274
|
|
Interest paid
|
$
|
140
|
|
|
$
|
148
|
|
|
$
|
385
|
|
|
$
|
395
|
|
(in millions of Canadian dollars, except common share amounts)
|
|
Common shares (in millions)
|
|
|
Share
capital |
|
Additional
paid-in capital |
|
Accumulated
other comprehensive loss |
|
Retained
earnings |
|
Total
shareholders’ equity |
|
|||||
Balance at January 1, 2017
|
|
146.3
|
|
|
$
|
2,002
|
|
$
|
52
|
|
$
|
(1,799
|
)
|
$
|
4,371
|
|
$
|
4,626
|
|
Net income
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
1,421
|
|
1,421
|
|
|||||
Other comprehensive income (Note 3)
|
|
—
|
|
|
—
|
|
—
|
|
84
|
|
—
|
|
84
|
|
|||||
Dividends declared
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
(237
|
)
|
(237
|
)
|
|||||
CP Common Shares repurchased (Note 9)
|
|
(1.8
|
)
|
|
(26
|
)
|
—
|
|
—
|
|
(342
|
)
|
(368
|
)
|
|||||
Shares issued under stock option plan
|
|
0.5
|
|
|
49
|
|
(10
|
)
|
—
|
|
—
|
|
39
|
|
|||||
Balance at September 30, 2017
|
|
145.0
|
|
|
$
|
2,025
|
|
$
|
42
|
|
$
|
(1,715
|
)
|
$
|
5,213
|
|
$
|
5,565
|
|
Balance at January 1, 2016
|
|
153.0
|
|
|
$
|
2,058
|
|
$
|
43
|
|
$
|
(1,477
|
)
|
$
|
4,172
|
|
$
|
4,796
|
|
Net income
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
1,215
|
|
1,215
|
|
|||||
Other comprehensive income (Note 3)
|
|
—
|
|
|
—
|
|
—
|
|
44
|
|
—
|
|
44
|
|
|||||
Dividends declared
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
(202
|
)
|
(202
|
)
|
|||||
Effect of stock-based compensation expense
|
|
—
|
|
|
—
|
|
11
|
|
—
|
|
—
|
|
11
|
|
|||||
CP Common Shares repurchased (Note 9)
|
|
(6.9
|
)
|
|
(84
|
)
|
—
|
|
—
|
|
(1,126
|
)
|
(1,210
|
)
|
|||||
Shares issued under stock option plan
|
|
0.2
|
|
|
26
|
|
(11
|
)
|
—
|
|
—
|
|
15
|
|
|||||
Balance at September 30, 2016
|
|
146.3
|
|
|
$
|
2,000
|
|
$
|
43
|
|
$
|
(1,433
|
)
|
$
|
4,059
|
|
$
|
4,669
|
|
|
For the three months ended September 30
|
For the nine months ended September 30
|
Year ended December 31
(1)
|
|||||||||||||||
(in millions of Canadian dollars)
|
2017
|
2016
|
2017
|
2016
|
2017
|
2016
|
||||||||||||
Decrease in operating income
|
$
|
68
|
|
$
|
41
|
|
$
|
203
|
|
$
|
127
|
|
$
|
272
|
|
$
|
167
|
|
|
For the three months ended Septemb
er 30
|
|||||||||||
(in millions of Canadian dollars, net of tax)
|
Foreign currency
net of hedging activities |
Derivatives and other
|
Pension and post-retirement defined benefit plans
|
Total
|
||||||||
Opening balance, July 1, 2017
|
$
|
124
|
|
$
|
(97
|
)
|
$
|
(1,767
|
)
|
$
|
(1,740
|
)
|
Other comprehensive loss before reclassifications
|
(5
|
)
|
—
|
|
—
|
|
(5
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
2
|
|
28
|
|
30
|
|
||||
Net current-period other comprehensive (loss) income
|
(5
|
)
|
2
|
|
28
|
|
25
|
|
||||
Closing balance, September 30, 2017
|
$
|
119
|
|
$
|
(95
|
)
|
$
|
(1,739
|
)
|
$
|
(1,715
|
)
|
Opening balance, July 1, 2016
|
$
|
124
|
|
$
|
(157
|
)
|
$
|
(1,438
|
)
|
$
|
(1,471
|
)
|
Other comprehensive income (loss) before reclassifications
|
2
|
|
(1
|
)
|
1
|
|
2
|
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
2
|
|
34
|
|
36
|
|
||||
Net current-period other comprehensive income
|
2
|
|
1
|
|
35
|
|
38
|
|
||||
Closing balance, September 30, 2016
|
$
|
126
|
|
$
|
(156
|
)
|
$
|
(1,403
|
)
|
$
|
(1,433
|
)
|
|
For the nine months ended Septem
ber 30
|
|||||||||||
(in millions of Canadian dollars, net of tax)
|
Foreign currency
net of hedging activities |
Derivatives and other
|
Pension and post-retirement defined benefit plans
|
Total
|
||||||||
Opening balance, January 1, 2017
|
$
|
127
|
|
$
|
(104
|
)
|
$
|
(1,822
|
)
|
$
|
(1,799
|
)
|
Other comprehensive loss before reclassifications
|
(8
|
)
|
(7
|
)
|
—
|
|
(15
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
16
|
|
83
|
|
99
|
|
||||
Net current-period other comprehensive (loss) income
|
(8
|
)
|
9
|
|
83
|
|
84
|
|
||||
Closing balance, September 30, 2017
|
$
|
119
|
|
$
|
(95
|
)
|
$
|
(1,739
|
)
|
$
|
(1,715
|
)
|
Opening balance, January 1, 2016
|
$
|
129
|
|
$
|
(102
|
)
|
$
|
(1,504
|
)
|
$
|
(1,477
|
)
|
Other comprehensive loss before reclassifications
|
(3
|
)
|
(60
|
)
|
(1
|
)
|
(64
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
6
|
|
102
|
|
108
|
|
||||
Net current-period other comprehensive (loss) income
|
(3
|
)
|
(54
|
)
|
101
|
|
44
|
|
||||
Closing balance, September 30, 2016
|
$
|
126
|
|
$
|
(156
|
)
|
$
|
(1,403
|
)
|
$
|
(1,433
|
)
|
|
For the three months ended September 30
|
|
For the nine months ended September 30
|
||||||||||||
(in millions of Canadian dollars)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Amortization of prior service costs
(1)
|
$
|
(1
|
)
|
|
$
|
(2
|
)
|
|
$
|
(3
|
)
|
|
$
|
(5
|
)
|
Recognition of net actuarial loss
(1)
|
39
|
|
|
49
|
|
|
116
|
|
|
146
|
|
||||
Total before income tax
|
38
|
|
|
47
|
|
|
113
|
|
|
141
|
|
||||
Income tax recovery
|
(10
|
)
|
|
(13
|
)
|
|
(30
|
)
|
|
(39
|
)
|
||||
Net of income tax
|
$
|
28
|
|
|
$
|
34
|
|
|
$
|
83
|
|
|
$
|
102
|
|
|
For the three months ended September 30
|
|
For the nine months ended September 30
|
||||||||||||
(in millions of Canadian dollars)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Foreign exchange (gains) losses on long-term d
ebt
|
$
|
(105
|
)
|
|
$
|
46
|
|
|
$
|
(200
|
)
|
|
$
|
(153
|
)
|
Other foreign exchange (gain
s) losses
|
(3
|
)
|
|
2
|
|
|
(5
|
)
|
|
(5
|
)
|
||||
Legal settlement
|
—
|
|
|
25
|
|
|
—
|
|
|
25
|
|
||||
Insurance recovery of legal settlement
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
||||
Charge on hedge roll and de-designation (Note 10)
|
—
|
|
|
—
|
|
|
13
|
|
|
—
|
|
||||
Other
|
3
|
|
|
(2
|
)
|
|
8
|
|
|
14
|
|
||||
Total other income and charges
|
$
|
(105
|
)
|
|
$
|
71
|
|
|
$
|
(194
|
)
|
|
$
|
(119
|
)
|
|
For the three months ended September 30
|
|
For the nine months ended September 30
|
||||||||||||
(in millions of Canadian dollars)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Current income tax expense
|
$
|
93
|
|
|
$
|
73
|
|
|
$
|
288
|
|
|
$
|
177
|
|
Deferred income tax expense
|
77
|
|
|
50
|
|
|
168
|
|
|
233
|
|
||||
Income tax expense
|
$
|
170
|
|
|
$
|
123
|
|
|
$
|
456
|
|
|
$
|
410
|
|
|
For the three months ended September 30
|
For the nine months ended September 30
|
||||||
(in millions)
|
2017
|
2016
|
2017
|
2016
|
||||
Weighted-average basic shares outstanding
|
145.5
|
|
147.3
|
|
146.2
|
|
150.7
|
|
Dilutive effect of stock options
|
0.3
|
|
1.0
|
|
0.4
|
|
0.9
|
|
Weighted-average diluted shares outstanding
|
145.8
|
|
148.3
|
|
146.6
|
|
151.6
|
|
|
For the three months ended September 30
|
|
For the nine months ended September 30
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Number of Common Shares repurchased
|
1,145,400
|
|
|
1,782,200
|
|
|
1,828,300
|
|
|
6,910,000
|
|
||||
Weighted-average price per share
(1)
|
$
|
196.46
|
|
|
$
|
192.10
|
|
|
$
|
201.50
|
|
|
$
|
175.08
|
|
Amount of repurchase (in millions)
(1)
|
$
|
225
|
|
|
$
|
342
|
|
|
$
|
368
|
|
|
$
|
1,210
|
|
|
For the nine months ended September 30, 2017
|
Grant price
|
$199.08
|
Expected option life (years)
(1)
|
5.48
|
Risk-free interest rate
(2)
|
1.85%
|
Expected stock price volatility
(3)
|
26.94%
|
Expected annual dividends per share
(4)
|
$2.0010
|
Expected forfeiture rate
(5)
|
6.0%
|
Weighted-average grant date fair value per option granted during the period
|
$45.78
|
(1)
|
Represents the period of time that awards are expected to be outstanding. Historical data on exercise behaviour, or when available, specific expectations regarding future exercise behaviour, were used to estimate the expected life of the option.
|
(2)
|
Based on the implied yield available on zero-coupon government issues with an equivalent remaining term at the time of the grant.
|
(3)
|
Based on the historical stock price volatility of the Company’s stock over a period commensurate with the expected term of the option.
|
(4)
|
Determined by the current annual dividend at the time of grant. The Company does not employ different dividend yields throughout the contractual term of the option. On May 10, 2017, the Company announced an increase in its quarterly dividend to
$0.5625
per share, representing
$2.2500
on an annual basis.
|
(5)
|
The Company estimated forfeitures based on past experience. This rate is monitored on a periodic basis.
|
|
For the three months ended September 30
|
||||||||||||||
|
Pensions
|
|
Other benefits
|
||||||||||||
(in millions of Canadian dollars)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Current service cost (benefits earned by employees in the period)
|
$
|
26
|
|
|
$
|
26
|
|
|
$
|
3
|
|
|
$
|
2
|
|
Interest cost on benefit obligation
|
112
|
|
|
117
|
|
|
5
|
|
|
6
|
|
||||
Expected return on fund assets
|
(223
|
)
|
|
(211
|
)
|
|
—
|
|
|
—
|
|
||||
Recognized net actuarial loss
|
38
|
|
|
48
|
|
|
1
|
|
|
1
|
|
||||
Amortization of prior service costs
|
(1
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
||||
Net periodic (recovery) benefit cost
|
$
|
(48
|
)
|
|
$
|
(22
|
)
|
|
$
|
9
|
|
|
$
|
9
|
|
|
For the nine months ended September 30
|
||||||||||||||
|
Pensions
|
|
Other benefits
|
||||||||||||
(in millions of Canadian dollars)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Current service cost (benefits earned by employees in the period)
|
$
|
77
|
|
|
$
|
79
|
|
|
$
|
9
|
|
|
$
|
8
|
|
Interest cost on benefit obligation
|
338
|
|
|
350
|
|
|
15
|
|
|
16
|
|
||||
Expected return on fund assets
|
(669
|
)
|
|
(634
|
)
|
|
—
|
|
|
—
|
|
||||
Recognized net actuarial loss
|
114
|
|
|
143
|
|
|
2
|
|
|
3
|
|
||||
Amortization of prior service costs
|
(3
|
)
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
||||
Net periodic (recovery) benefit cost
|
$
|
(143
|
)
|
|
$
|
(67
|
)
|
|
$
|
26
|
|
|
$
|
27
|
|
(in millions of Canadian dollars)
|
CPRL (Parent Guarantor)
|
|
CPRC (Subsidiary Issuer)
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments and Eliminations
|
|
CPRL Consolidated
|
|
|||||
Revenues
|
|
|
|
|
|
||||||||||
Freight
|
$
|
—
|
|
$
|
1,092
|
|
$
|
455
|
|
$
|
—
|
|
$
|
1,547
|
|
Non-freight
|
—
|
|
38
|
|
90
|
|
(80
|
)
|
48
|
|
|||||
Total revenues
|
—
|
|
1,130
|
|
545
|
|
(80
|
)
|
1,595
|
|
|||||
Operating expenses
|
|
|
|
|
|
||||||||||
Compensation and benefits
|
—
|
|
149
|
|
104
|
|
3
|
|
256
|
|
|||||
Fuel
|
—
|
|
116
|
|
34
|
|
—
|
|
150
|
|
|||||
Materials
|
—
|
|
33
|
|
11
|
|
1
|
|
45
|
|
|||||
Equipment rents
|
—
|
|
35
|
|
—
|
|
—
|
|
35
|
|
|||||
Depreciation and amortization
|
—
|
|
108
|
|
54
|
|
—
|
|
162
|
|
|||||
Purchased services and other
|
—
|
|
195
|
|
146
|
|
(84
|
)
|
257
|
|
|||||
Total operating expenses
|
—
|
|
636
|
|
349
|
|
(80
|
)
|
905
|
|
|||||
Operating income
|
—
|
|
494
|
|
196
|
|
—
|
|
690
|
|
|||||
Less:
|
|
|
|
|
|
||||||||||
Other income and charges
|
(10
|
)
|
(100
|
)
|
5
|
|
—
|
|
(105
|
)
|
|||||
Net interest (income) expense
|
(2
|
)
|
126
|
|
(9
|
)
|
—
|
|
115
|
|
|||||
Income before income tax expense and equity in net earnings of subsidiaries
|
12
|
|
468
|
|
200
|
|
—
|
|
680
|
|
|||||
Less: Income tax expense
|
7
|
|
99
|
|
64
|
|
—
|
|
170
|
|
|||||
Add: Equity in net earnings of subsidiaries
|
505
|
|
136
|
|
—
|
|
(641
|
)
|
—
|
|
|||||
Net income
|
$
|
510
|
|
$
|
505
|
|
$
|
136
|
|
$
|
(641
|
)
|
$
|
510
|
|
(in millions of Canadian dollars)
|
CPRL (Parent Guarantor)
|
|
CPRC (Subsidiary Issuer)
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments and Eliminations
|
|
CPRL Consolidated
|
|
|||||
Revenues
|
|
|
|
|
|
||||||||||
Freight
|
$
|
—
|
|
$
|
1,078
|
|
$
|
432
|
|
$
|
—
|
|
$
|
1,510
|
|
Non-freight
|
—
|
|
35
|
|
95
|
|
(86
|
)
|
44
|
|
|||||
Total revenues
|
—
|
|
1,113
|
|
527
|
|
(86
|
)
|
1,554
|
|
|||||
Operating expenses
|
|
|
|
|
|
||||||||||
Compensation and benefits
|
—
|
|
181
|
|
111
|
|
2
|
|
294
|
|
|||||
Fuel
|
—
|
|
111
|
|
27
|
|
—
|
|
138
|
|
|||||
Materials
|
—
|
|
30
|
|
6
|
|
3
|
|
39
|
|
|||||
Equipment rents
|
—
|
|
48
|
|
(5
|
)
|
—
|
|
43
|
|
|||||
Depreciation and amortization
|
—
|
|
102
|
|
53
|
|
—
|
|
155
|
|
|||||
Purchased services and other
|
—
|
|
170
|
|
149
|
|
(91
|
)
|
228
|
|
|||||
Total operating expenses
|
—
|
|
642
|
|
341
|
|
(86
|
)
|
897
|
|
|||||
Operating income
|
—
|
|
471
|
|
186
|
|
—
|
|
657
|
|
|||||
Less:
|
|
|
|
|
|
||||||||||
Other income and charges
|
12
|
|
61
|
|
(2
|
)
|
—
|
|
71
|
|
|||||
Net interest (income) expense
|
(9
|
)
|
131
|
|
(6
|
)
|
—
|
|
116
|
|
|||||
(Loss) income before income tax expense and equity in net earnings of subsidiaries
|
(3
|
)
|
279
|
|
194
|
|
—
|
|
470
|
|
|||||
Less: Income tax expense
|
9
|
|
73
|
|
41
|
|
—
|
|
123
|
|
|||||
Add: Equity in net earnings of subsidiaries
|
359
|
|
153
|
|
—
|
|
(512
|
)
|
—
|
|
|||||
Net income
|
$
|
347
|
|
$
|
359
|
|
$
|
153
|
|
$
|
(512
|
)
|
$
|
347
|
|
(in millions of Canadian dollars)
|
CPRL (Parent Guarantor)
|
|
CPRC (Subsidiary Issuer)
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments and Eliminations
|
|
CPRL Consolidated
|
|
|||||
Revenues
|
|
|
|
|
|
||||||||||
Freight
|
$
|
—
|
|
$
|
3,310
|
|
$
|
1,398
|
|
$
|
—
|
|
$
|
4,708
|
|
Non-freight
|
—
|
|
104
|
|
278
|
|
(249
|
)
|
133
|
|
|||||
Total revenues
|
—
|
|
3,414
|
|
1,676
|
|
(249
|
)
|
4,841
|
|
|||||
Operating expenses
|
|
|
|
|
|
||||||||||
Compensation and benefits
|
—
|
|
438
|
|
323
|
|
5
|
|
766
|
|
|||||
Fuel
|
—
|
|
370
|
|
110
|
|
—
|
|
480
|
|
|||||
Materials
|
—
|
|
101
|
|
28
|
|
13
|
|
142
|
|
|||||
Equipment rents
|
—
|
|
110
|
|
(2
|
)
|
—
|
|
108
|
|
|||||
Depreciation and amortization
|
—
|
|
325
|
|
168
|
|
—
|
|
493
|
|
|||||
Purchased services and other
|
—
|
|
613
|
|
466
|
|
(267
|
)
|
812
|
|
|||||
Total operating expenses
|
—
|
|
1,957
|
|
1,093
|
|
(249
|
)
|
2,801
|
|
|||||
Operating income
|
—
|
|
1,457
|
|
583
|
|
—
|
|
2,040
|
|
|||||
Less:
|
|
|
|
|
|
||||||||||
Other income and charges
|
(35
|
)
|
(166
|
)
|
7
|
|
—
|
|
(194
|
)
|
|||||
Net interest (income) expense
|
(9
|
)
|
390
|
|
(24
|
)
|
—
|
|
357
|
|
|||||
Income before income tax expense and equity in net earnings of subsidiaries
|
44
|
|
1,233
|
|
600
|
|
—
|
|
1,877
|
|
|||||
Less: Income tax expense
|
9
|
|
259
|
|
188
|
|
—
|
|
456
|
|
|||||
Add: Equity in net earnings of subsidiaries
|
1,386
|
|
412
|
|
—
|
|
(1,798
|
)
|
—
|
|
|||||
Net income
|
$
|
1,421
|
|
$
|
1,386
|
|
$
|
412
|
|
$
|
(1,798
|
)
|
$
|
1,421
|
|
(in millions of Canadian dollars)
|
CPRL (Parent Guarantor)
|
|
CPRC (Subsidiary Issuer)
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments and Eliminations
|
|
CPRL Consolidated
|
|
|||||
Revenues
|
|
|
|
|
|
||||||||||
Freight
|
$
|
—
|
|
$
|
3,182
|
|
$
|
1,282
|
|
$
|
—
|
|
$
|
4,464
|
|
Non-freight
|
—
|
|
101
|
|
289
|
|
(259
|
)
|
131
|
|
|||||
Total revenues
|
—
|
|
3,283
|
|
1,571
|
|
(259
|
)
|
4,595
|
|
|||||
Operating expenses
|
|
|
|
|
|
||||||||||
Compensation and benefits
|
—
|
|
563
|
|
339
|
|
5
|
|
907
|
|
|||||
Fuel
|
—
|
|
317
|
|
77
|
|
—
|
|
394
|
|
|||||
Materials
|
—
|
|
95
|
|
24
|
|
14
|
|
133
|
|
|||||
Equipment rents
|
—
|
|
155
|
|
(23
|
)
|
—
|
|
132
|
|
|||||
Depreciation and amortization
|
—
|
|
316
|
|
162
|
|
—
|
|
478
|
|
|||||
Purchased services and other
|
—
|
|
499
|
|
469
|
|
(278
|
)
|
690
|
|
|||||
Total operating expenses
|
—
|
|
1,945
|
|
1,048
|
|
(259
|
)
|
2,734
|
|
|||||
Operating income
|
—
|
|
1,338
|
|
523
|
|
—
|
|
1,861
|
|
|||||
Less:
|
|
|
|
|
|
||||||||||
Other income and charges
|
(61
|
)
|
(89
|
)
|
31
|
|
—
|
|
(119
|
)
|
|||||
Net interest expense (income)
|
—
|
|
373
|
|
(18
|
)
|
—
|
|
355
|
|
|||||
Income before income tax expense and equity in net earnings of subsidiaries
|
61
|
|
1,054
|
|
510
|
|
—
|
|
1,625
|
|
|||||
Less: Income tax expense
|
12
|
|
254
|
|
144
|
|
—
|
|
410
|
|
|||||
Add: Equity in net earnings of subsidiaries
|
1,166
|
|
366
|
|
—
|
|
(1,532
|
)
|
—
|
|
|||||
Net income
|
$
|
1,215
|
|
$
|
1,166
|
|
$
|
366
|
|
$
|
(1,532
|
)
|
$
|
1,215
|
|
(in millions of Canadian dollars)
|
CPRL (Parent Guarantor)
|
|
CPRC (Subsidiary Issuer)
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments and Eliminations
|
|
CPRL Consolidated
|
|
|||||
Net income
|
$
|
510
|
|
$
|
505
|
|
$
|
136
|
|
$
|
(641
|
)
|
$
|
510
|
|
Net gain (loss) in foreign currency translation adjustments, net of hedging activities
|
—
|
|
180
|
|
(161
|
)
|
—
|
|
19
|
|
|||||
Change in derivatives designated as cash flow
hedges |
—
|
|
2
|
|
—
|
|
—
|
|
2
|
|
|||||
Change in pension and post-retirement defined
benefit plans |
—
|
|
36
|
|
2
|
|
—
|
|
38
|
|
|||||
Other comprehensive income (loss) before income taxes
|
—
|
|
218
|
|
(159
|
)
|
—
|
|
59
|
|
|||||
Income tax expense on above items
|
—
|
|
(34
|
)
|
—
|
|
—
|
|
(34
|
)
|
|||||
Equity accounted investments
|
25
|
|
(159
|
)
|
—
|
|
134
|
|
—
|
|
|||||
Other comprehensive income (loss)
|
25
|
|
25
|
|
(159
|
)
|
134
|
|
25
|
|
|||||
Comprehensive income
(loss)
|
$
|
535
|
|
$
|
530
|
|
$
|
(23
|
)
|
$
|
(507
|
)
|
$
|
535
|
|
(in millions of Canadian dollars)
|
CPRL (Parent Guarantor)
|
|
CPRC (Subsidiary Issuer)
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments and Eliminations
|
|
CPRL Consolidated
|
|
|||||
Net income
|
$
|
347
|
|
$
|
359
|
|
$
|
153
|
|
$
|
(512
|
)
|
$
|
347
|
|
Net (loss) gain in foreign currency translation adjustments, net of hedging activities
|
—
|
|
(70
|
)
|
63
|
|
—
|
|
(7
|
)
|
|||||
Change in derivatives designated as cash flow
hedges |
—
|
|
1
|
|
—
|
|
—
|
|
1
|
|
|||||
Change in pension and post-retirement defined benefit plans
|
—
|
|
45
|
|
2
|
|
—
|
|
47
|
|
|||||
Other comprehensive (loss) income before income taxes
|
—
|
|
(24
|
)
|
65
|
|
—
|
|
41
|
|
|||||
Income tax expense on above items
|
—
|
|
(3
|
)
|
—
|
|
—
|
|
(3
|
)
|
|||||
Equity accounted investments
|
38
|
|
65
|
|
—
|
|
(103
|
)
|
—
|
|
|||||
Other comprehensive income
|
38
|
|
38
|
|
65
|
|
(103
|
)
|
38
|
|
|||||
Comprehensive income
|
$
|
385
|
|
$
|
397
|
|
$
|
218
|
|
$
|
(615
|
)
|
$
|
385
|
|
(in millions of Canadian dollars)
|
CPRL (Parent Guarantor)
|
|
CPRC (Subsidiary Issuer)
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments and Eliminations
|
|
CPRL Consolidated
|
|
|||||
Net income
|
$
|
1,421
|
|
$
|
1,386
|
|
$
|
412
|
|
$
|
(1,798
|
)
|
$
|
1,421
|
|
Net gain (loss) in foreign currency translation adjustments, net of hedging activities
|
—
|
|
342
|
|
(304
|
)
|
—
|
|
38
|
|
|||||
Change in derivatives designated as cash flow
hedges |
—
|
|
11
|
|
—
|
|
—
|
|
11
|
|
|||||
Change in pension and post-retirement defined
benefit plans |
—
|
|
108
|
|
5
|
|
—
|
|
113
|
|
|||||
Other comprehensive income (loss) before income taxes
|
—
|
|
461
|
|
(299
|
)
|
—
|
|
162
|
|
|||||
Income tax expense on above items
|
—
|
|
(77
|
)
|
(1
|
)
|
—
|
|
(78
|
)
|
|||||
Equity accounted investments
|
84
|
|
(300
|
)
|
—
|
|
216
|
|
—
|
|
|||||
Other comprehensive income (loss)
|
84
|
|
84
|
|
(300
|
)
|
216
|
|
84
|
|
|||||
Comprehensive income
|
$
|
1,505
|
|
$
|
1,470
|
|
$
|
112
|
|
$
|
(1,582
|
)
|
$
|
1,505
|
|
(in millions of Canadian dollars)
|
CPRL (Parent Guarantor)
|
|
CPRC (Subsidiary Issuer)
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments and Eliminations
|
|
CPRL Consolidated
|
|
|||||
Net income
|
$
|
1,215
|
|
$
|
1,166
|
|
$
|
366
|
|
$
|
(1,532
|
)
|
$
|
1,215
|
|
Net gain (loss) in foreign currency translation adjustments, net of hedging activities
|
—
|
|
260
|
|
(227
|
)
|
—
|
|
33
|
|
|||||
Change in derivatives designated as cash flow
hedges |
—
|
|
(75
|
)
|
—
|
|
—
|
|
(75
|
)
|
|||||
Change in pension and post-retirement defined benefit plans
|
—
|
|
131
|
|
6
|
|
—
|
|
137
|
|
|||||
Other comprehensive income (loss) before income taxes
|
—
|
|
316
|
|
(221
|
)
|
—
|
|
95
|
|
|||||
Income tax expense on above items
|
—
|
|
(49
|
)
|
(2
|
)
|
—
|
|
(51
|
)
|
|||||
Equity accounted investments
|
44
|
|
(223
|
)
|
—
|
|
179
|
|
—
|
|
|||||
Other comprehensive income (loss)
|
44
|
|
44
|
|
(223
|
)
|
179
|
|
44
|
|
|||||
Comprehensive income
|
$
|
1,259
|
|
$
|
1,210
|
|
$
|
143
|
|
$
|
(1,353
|
)
|
$
|
1,259
|
|
(in millions of Canadian dollars)
|
CPRL (Parent Guarantor)
|
|
CPRC (Subsidiary Issuer)
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments and Eliminations
|
|
CPRL Consolidated
|
|
|||||
Assets
|
|
|
|
|
|
||||||||||
Current assets
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
$
|
78
|
|
$
|
64
|
|
$
|
—
|
|
$
|
142
|
|
Accounts receivable, net
|
—
|
|
464
|
|
164
|
|
—
|
|
628
|
|
|||||
Accounts receivable, inter-company
|
101
|
|
139
|
|
185
|
|
(425
|
)
|
—
|
|
|||||
Short-term advances to affiliates
|
500
|
|
560
|
|
4,869
|
|
(5,929
|
)
|
—
|
|
|||||
Materials and supplies
|
—
|
|
124
|
|
33
|
|
—
|
|
157
|
|
|||||
Other current assets
|
—
|
|
40
|
|
25
|
|
—
|
|
65
|
|
|||||
|
601
|
|
1,405
|
|
5,340
|
|
(6,354
|
)
|
992
|
|
|||||
Long-term advances to affiliates
|
591
|
|
—
|
|
410
|
|
(1,001
|
)
|
—
|
|
|||||
Investments
|
—
|
|
43
|
|
142
|
|
—
|
|
185
|
|
|||||
Investments in subsidiaries
|
9,746
|
|
11,201
|
|
—
|
|
(20,947
|
)
|
—
|
|
|||||
Properties
|
—
|
|
8,979
|
|
7,721
|
|
—
|
|
16,700
|
|
|||||
Goodwill and intangible assets
|
—
|
|
—
|
|
187
|
|
—
|
|
187
|
|
|||||
Pension asset
|
—
|
|
1,356
|
|
—
|
|
—
|
|
1,356
|
|
|||||
Other assets
|
—
|
|
51
|
|
8
|
|
—
|
|
59
|
|
|||||
Deferred income taxes
|
3
|
|
—
|
|
—
|
|
(3
|
)
|
—
|
|
|||||
Total assets
|
$
|
10,941
|
|
$
|
23,035
|
|
$
|
13,808
|
|
$
|
(28,305
|
)
|
$
|
19,479
|
|
Liabilities and shareholders’ equity
|
|
|
|
|
|
||||||||||
Current liabilities
|
|
|
|
|
|
||||||||||
Accounts payable and accrued liabilities
|
$
|
82
|
|
$
|
745
|
|
$
|
312
|
|
$
|
—
|
|
$
|
1,139
|
|
Accounts payable, inter-company
|
15
|
|
282
|
|
128
|
|
(425
|
)
|
—
|
|
|||||
Short-term advances from affiliates
|
5,279
|
|
640
|
|
10
|
|
(5,929
|
)
|
—
|
|
|||||
Long-term debt maturing within one year
|
—
|
|
749
|
|
—
|
|
—
|
|
749
|
|
|||||
|
5,376
|
|
2,416
|
|
450
|
|
(6,354
|
)
|
1,888
|
|
|||||
Pension and other benefit liabilities
|
—
|
|
657
|
|
69
|
|
—
|
|
726
|
|
|||||
Long-term advances from affiliates
|
—
|
|
1,001
|
|
—
|
|
(1,001
|
)
|
—
|
|
|||||
Other long-term liabilities
|
—
|
|
104
|
|
117
|
|
—
|
|
221
|
|
|||||
Long-term debt
|
—
|
|
7,334
|
|
50
|
|
—
|
|
7,384
|
|
|||||
Deferred income taxes
|
—
|
|
1,777
|
|
1,921
|
|
(3
|
)
|
3,695
|
|
|||||
Total liabilities
|
5,376
|
|
13,289
|
|
2,607
|
|
(7,358
|
)
|
13,914
|
|
|||||
Shareholders’ equity
|
|
|
|
|
|
||||||||||
Share capital
|
2,025
|
|
1,036
|
|
6,862
|
|
(7,898
|
)
|
2,025
|
|
|||||
Additional paid-in capital
|
42
|
|
1,641
|
|
268
|
|
(1,909
|
)
|
42
|
|
|||||
Accumulated other comprehensive (loss) income
|
(1,715
|
)
|
(1,716
|
)
|
411
|
|
1,305
|
|
(1,715
|
)
|
|||||
Retained earnings
|
5,213
|
|
8,785
|
|
3,660
|
|
(12,445
|
)
|
5,213
|
|
|||||
|
5,565
|
|
9,746
|
|
11,201
|
|
(20,947
|
)
|
5,565
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
10,941
|
|
$
|
23,035
|
|
$
|
13,808
|
|
$
|
(28,305
|
)
|
$
|
19,479
|
|
(in millions of Canadian dollars)
|
CPRL (Parent Guarantor)
|
|
CPRC (Subsidiary Issuer)
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments and Eliminations
|
|
CPRL Consolidated
|
|
|||||
Assets
|
|
|
|
|
|
||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
—
|
|
$
|
100
|
|
$
|
64
|
|
$
|
—
|
|
$
|
164
|
|
Accounts receivable, net
|
—
|
|
435
|
|
156
|
|
—
|
|
591
|
|
|||||
Accounts receivable, inter-company
|
90
|
|
113
|
|
206
|
|
(409
|
)
|
—
|
|
|||||
Short-term advances to affiliates
|
500
|
|
692
|
|
4,035
|
|
(5,227
|
)
|
—
|
|
|||||
Materials and supplies
|
—
|
|
150
|
|
34
|
|
—
|
|
184
|
|
|||||
Other current assets
|
—
|
|
38
|
|
32
|
|
—
|
|
70
|
|
|||||
|
590
|
|
1,528
|
|
4,527
|
|
(5,636
|
)
|
1,009
|
|
|||||
Long-term advances to affiliates
|
1
|
|
—
|
|
91
|
|
(92
|
)
|
—
|
|
|||||
Investments
|
—
|
|
47
|
|
147
|
|
—
|
|
194
|
|
|||||
Investments in subsidiaries
|
8,513
|
|
10,249
|
|
—
|
|
(18,762
|
)
|
—
|
|
|||||
Properties
|
—
|
|
8,756
|
|
7,933
|
|
—
|
|
16,689
|
|
|||||
Goodwill and intangible assets
|
—
|
|
—
|
|
202
|
|
—
|
|
202
|
|
|||||
Pension asset
|
—
|
|
1,070
|
|
—
|
|
—
|
|
1,070
|
|
|||||
Other assets
|
1
|
|
48
|
|
8
|
|
—
|
|
57
|
|
|||||
Deferred income taxes
|
11
|
|
—
|
|
—
|
|
(11
|
)
|
—
|
|
|||||
Total assets
|
$
|
9,116
|
|
$
|
21,698
|
|
$
|
12,908
|
|
$
|
(24,501
|
)
|
$
|
19,221
|
|
Liabilities and shareholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|||||
Accounts payable and accrued liabilities
|
$
|
73
|
|
$
|
945
|
|
$
|
304
|
|
$
|
—
|
|
$
|
1,322
|
|
Accounts payable, inter-company
|
14
|
|
292
|
|
103
|
|
(409
|
)
|
—
|
|
|||||
Short-term advances from affiliates
|
4,403
|
|
816
|
|
8
|
|
(5,227
|
)
|
—
|
|
|||||
Long-term debt maturing within one year
|
—
|
|
25
|
|
—
|
|
—
|
|
25
|
|
|||||
|
4,490
|
|
2,078
|
|
415
|
|
(5,636
|
)
|
1,347
|
|
|||||
Pension and other benefit liabilities
|
—
|
|
658
|
|
76
|
|
—
|
|
734
|
|
|||||
Long-term advances from affiliates
|
—
|
|
92
|
|
—
|
|
(92
|
)
|
—
|
|
|||||
Other long-term liabilities
|
—
|
|
152
|
|
132
|
|
—
|
|
284
|
|
|||||
Long-term debt
|
—
|
|
8,605
|
|
54
|
|
—
|
|
8,659
|
|
|||||
Deferred income taxes
|
—
|
|
1,600
|
|
1,982
|
|
(11
|
)
|
3,571
|
|
|||||
Total liabilities
|
4,490
|
|
13,185
|
|
2,659
|
|
(5,739
|
)
|
14,595
|
|
|||||
Shareholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|||||
Share capital
|
2,002
|
|
1,037
|
|
5,823
|
|
(6,860
|
)
|
2,002
|
|
|||||
Additional paid-in capital
|
52
|
|
1,638
|
|
298
|
|
(1,936
|
)
|
52
|
|
|||||
Accumulated other comprehensive (loss) income
|
(1,799
|
)
|
(1,799
|
)
|
712
|
|
1,087
|
|
(1,799
|
)
|
|||||
Retained earnings
|
4,371
|
|
7,637
|
|
3,416
|
|
(11,053
|
)
|
4,371
|
|
|||||
|
4,626
|
|
8,513
|
|
10,249
|
|
(18,762
|
)
|
4,626
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
9,116
|
|
$
|
21,698
|
|
$
|
12,908
|
|
$
|
(24,501
|
)
|
$
|
19,221
|
|
(in millions of Canadian dollars)
|
CPRL (Parent Guarantor)
|
|
CPRC (Subsidiary Issuer)
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments and Eliminations
|
|
CPRL Consolidated
|
|
|||||
Cash provided by operating activities
|
$
|
98
|
|
$
|
322
|
|
$
|
213
|
|
$
|
(106
|
)
|
$
|
527
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|||||
Additions to properties
|
—
|
|
(193
|
)
|
(126
|
)
|
—
|
|
(319
|
)
|
|||||
Proceeds from sale of properties and other assets
|
—
|
|
11
|
|
2
|
|
—
|
|
13
|
|
|||||
Advances to affiliates
|
—
|
|
—
|
|
(50
|
)
|
50
|
|
—
|
|
|||||
Repayment of advances to affiliates
|
159
|
|
1
|
|
—
|
|
(160
|
)
|
—
|
|
|||||
Capital contributions to affiliates
|
—
|
|
(26
|
)
|
—
|
|
26
|
|
—
|
|
|||||
Repurchase of share capital from affiliates
|
—
|
|
32
|
|
—
|
|
(32
|
)
|
—
|
|
|||||
Cash provided by (used in) invest
ing activities
|
159
|
|
(175
|
)
|
(174
|
)
|
(116
|
)
|
(306
|
)
|
|||||
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|||||
Dividends paid
|
(83
|
)
|
(83
|
)
|
(23
|
)
|
106
|
|
(83
|
)
|
|||||
Return of share capital to affiliates
|
—
|
|
—
|
|
(32
|
)
|
32
|
|
—
|
|
|||||
Issuance of share capital
|
—
|
|
—
|
|
26
|
|
(26
|
)
|
—
|
|
|||||
Issuance of CP Common Shares
|
2
|
|
—
|
|
—
|
|
—
|
|
2
|
|
|||||
Purchase of CP Common Shares
|
(226
|
)
|
—
|
|
—
|
|
—
|
|
(226
|
)
|
|||||
Repayment of long-term debt, excluding commercial paper
|
—
|
|
(3
|
)
|
—
|
|
—
|
|
(3
|
)
|
|||||
Advances from affiliates
|
50
|
|
—
|
|
—
|
|
(50
|
)
|
—
|
|
|||||
Repayment of advances from affiliates
|
—
|
|
(159
|
)
|
(1
|
)
|
160
|
|
—
|
|
|||||
Cash used in financing activities
|
(257
|
)
|
(245
|
)
|
(30
|
)
|
222
|
|
(310
|
)
|
|||||
Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents
|
—
|
|
(2
|
)
|
(5
|
)
|
—
|
|
(7
|
)
|
|||||
Cash position
|
|
|
|
|
|
||||||||||
(Decrease) increase in cash and cash equivalents
|
—
|
|
(100
|
)
|
4
|
|
—
|
|
(96
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
—
|
|
178
|
|
60
|
|
—
|
|
238
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
—
|
|
$
|
78
|
|
$
|
64
|
|
$
|
—
|
|
$
|
142
|
|
(in millions of Canadian dollars)
|
CPRL (Parent Guarantor)
|
|
CPRC (Subsidiary Issuer)
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments and Eliminations
|
|
CPRL Consolidated
|
|
|||||
Cash provided by operating activities
|
$
|
84
|
|
$
|
406
|
|
$
|
229
|
|
$
|
(128
|
)
|
$
|
591
|
|
Investing activities
|
|
|
|
|
|
||||||||||
Additions to properties
|
—
|
|
(238
|
)
|
(56
|
)
|
—
|
|
(294
|
)
|
|||||
Proceeds from sale of properties and other assets
|
—
|
|
6
|
|
10
|
|
—
|
|
16
|
|
|||||
Advances to affiliates
|
—
|
|
(275
|
)
|
(123
|
)
|
398
|
|
—
|
|
|||||
Repayment of advances to affiliates
|
—
|
|
14
|
|
—
|
|
(14
|
)
|
—
|
|
|||||
Capital contributions to affiliates
|
—
|
|
(46
|
)
|
—
|
|
46
|
|
—
|
|
|||||
Cash used in investing activities
|
—
|
|
(539
|
)
|
(169
|
)
|
430
|
|
(278
|
)
|
|||||
Financing activities
|
|
|
|
|
|
||||||||||
Dividends paid
|
(75
|
)
|
(75
|
)
|
(53
|
)
|
128
|
|
(75
|
)
|
|||||
Issuance of share capital
|
—
|
|
—
|
|
46
|
|
(46
|
)
|
—
|
|
|||||
Issuance of CP Common Shares
|
5
|
|
—
|
|
—
|
|
—
|
|
5
|
|
|||||
Purchase of CP Common Shares
|
(412
|
)
|
—
|
|
—
|
|
—
|
|
(412
|
)
|
|||||
Repayment of long-term debt, excluding commercial paper
|
—
|
|
(5
|
)
|
(7
|
)
|
—
|
|
(12
|
)
|
|||||
Net issuance of commercial paper
|
—
|
|
190
|
|
—
|
|
—
|
|
190
|
|
|||||
Advances from affiliates
|
398
|
|
—
|
|
—
|
|
(398
|
)
|
—
|
|
|||||
Repayment of advances from affiliates
|
—
|
|
—
|
|
(14
|
)
|
14
|
|
—
|
|
|||||
Cash (used in) provided by financing activities
|
(84
|
)
|
110
|
|
(28
|
)
|
(302
|
)
|
(304
|
)
|
|||||
Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents
|
—
|
|
—
|
|
2
|
|
—
|
|
2
|
|
|||||
Cash position
|
|
|
|
|
|
||||||||||
(Decrease) increase in cash and cash equivalents
|
—
|
|
(23
|
)
|
34
|
|
—
|
|
11
|
|
|||||
Cash and cash equivalents at beginning of period
|
—
|
|
47
|
|
45
|
|
—
|
|
92
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
—
|
|
$
|
24
|
|
$
|
79
|
|
$
|
—
|
|
$
|
103
|
|
(in millions of Canadian dollars)
|
CPRL (Parent Guarantor)
|
|
CPRC (Subsidiary Issuer)
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments and Eliminations
|
|
CPRL Consolidated
|
|
|||||
Cash provided by operating activities
|
$
|
256
|
|
$
|
875
|
|
$
|
716
|
|
$
|
(398
|
)
|
$
|
1,449
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|||||
Additions to properties
|
—
|
|
(494
|
)
|
(401
|
)
|
—
|
|
(895
|
)
|
|||||
Proceeds from sale of properties and other assets
|
—
|
|
17
|
|
12
|
|
—
|
|
29
|
|
|||||
Advances to affiliates
|
(1,079
|
)
|
(550
|
)
|
(1,157
|
)
|
2,786
|
|
—
|
|
|||||
Capital contributions to affiliates
|
—
|
|
(1,039
|
)
|
—
|
|
1,039
|
|
—
|
|
|||||
Repurchase of share capital from affiliates
|
—
|
|
32
|
|
—
|
|
(32
|
)
|
—
|
|
|||||
Other
|
—
|
|
6
|
|
(1
|
)
|
—
|
|
5
|
|
|||||
Cash used in investing activities
|
(1,079
|
)
|
(2,028
|
)
|
(1,547
|
)
|
3,793
|
|
(861
|
)
|
|||||
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|||||
Dividends paid
|
(229
|
)
|
(229
|
)
|
(169
|
)
|
398
|
|
(229
|
)
|
|||||
Return of share capital to affiliates
|
—
|
|
—
|
|
(32
|
)
|
32
|
|
—
|
|
|||||
Issuance of share capital
|
—
|
|
—
|
|
1,039
|
|
(1,039
|
)
|
—
|
|
|||||
Issuance of CP Common Shares
|
39
|
|
—
|
|
—
|
|
—
|
|
39
|
|
|||||
Purchase of CP Common Shares
|
(368
|
)
|
—
|
|
—
|
|
—
|
|
(368
|
)
|
|||||
Repayment of long-term debt, excluding commercial paper
|
—
|
|
(17
|
)
|
—
|
|
—
|
|
(17
|
)
|
|||||
Advances from affiliates
|
1,381
|
|
1,405
|
|
—
|
|
(2,786
|
)
|
—
|
|
|||||
Settlement of forward starting swaps
|
—
|
|
(22
|
)
|
—
|
|
—
|
|
(22
|
)
|
|||||
Cash provided by financing activities
|
823
|
|
1,137
|
|
838
|
|
(3,395
|
)
|
(597
|
)
|
|||||
Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents
|
—
|
|
(6
|
)
|
(7
|
)
|
—
|
|
(13
|
)
|
|||||
Cash position
|
|
|
|
|
|
|
|
|
|
|
|||||
Decrease in cash and cash equivalents
|
—
|
|
(22
|
)
|
—
|
|
—
|
|
(22
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
—
|
|
100
|
|
64
|
|
—
|
|
164
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
—
|
|
$
|
78
|
|
$
|
64
|
|
$
|
—
|
|
$
|
142
|
|
(in millions of Canadian dollars)
|
CPRL (Parent Guarantor)
|
|
CPRC (Subsidiary Issuer)
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments and Eliminations
|
|
CPRL Consolidated
|
|
|||||
Cash provided by operating activities
|
$
|
182
|
|
$
|
831
|
|
$
|
646
|
|
$
|
(338
|
)
|
$
|
1,321
|
|
Investing activities
|
|
|
|
|
|
||||||||||
Additions to properties
|
—
|
|
(576
|
)
|
(326
|
)
|
—
|
|
(902
|
)
|
|||||
Proceeds from sale of properties and other assets
|
—
|
|
74
|
|
13
|
|
—
|
|
87
|
|
|||||
Advances to affiliates
|
—
|
|
(792
|
)
|
(408
|
)
|
1,200
|
|
—
|
|
|||||
Repayment of advances to affiliates
|
—
|
|
222
|
|
—
|
|
(222
|
)
|
—
|
|
|||||
Capital contributions to affiliates
|
—
|
|
(403
|
)
|
—
|
|
403
|
|
—
|
|
|||||
Repurchase of share capital from affiliates
|
—
|
|
6
|
|
—
|
|
(6
|
)
|
—
|
|
|||||
Other
|
—
|
|
—
|
|
(2
|
)
|
—
|
|
(2
|
)
|
|||||
Cash used in investing activities
|
—
|
|
(1,469
|
)
|
(723
|
)
|
1,375
|
|
(817
|
)
|
|||||
Financing activities
|
|
|
|
|
|
||||||||||
Dividends paid
|
(182
|
)
|
(182
|
)
|
(156
|
)
|
338
|
|
(182
|
)
|
|||||
Return of share capital to affiliates
|
—
|
|
—
|
|
(6
|
)
|
6
|
|
—
|
|
|||||
Issuance of share capital
|
—
|
|
—
|
|
403
|
|
(403
|
)
|
—
|
|
|||||
Issuance of CP Common Shares
|
14
|
|
—
|
|
—
|
|
—
|
|
14
|
|
|||||
Purchase of CP Common Shares
|
(1,200
|
)
|
—
|
|
—
|
|
—
|
|
(1,200
|
)
|
|||||
Repayment of long-term debt, excluding commercial paper
|
—
|
|
(16
|
)
|
(14
|
)
|
—
|
|
(30
|
)
|
|||||
Net issuance of commercial paper
|
—
|
|
366
|
|
—
|
|
—
|
|
366
|
|
|||||
Advances from affiliates
|
1,186
|
|
—
|
|
14
|
|
(1,200
|
)
|
—
|
|
|||||
Repayment of advances from affiliates
|
—
|
|
—
|
|
(222
|
)
|
222
|
|
—
|
|
|||||
Other
|
—
|
|
(3
|
)
|
—
|
|
—
|
|
(3
|
)
|
|||||
Cash (used in) provided by financing activities
|
(182
|
)
|
165
|
|
19
|
|
(1,037
|
)
|
(1,035
|
)
|
|||||
Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents
|
—
|
|
(5
|
)
|
(11
|
)
|
—
|
|
(16
|
)
|
|||||
Cash position
|
|
|
|
|
|
||||||||||
Decrease in cash and cash equivalents
|
—
|
|
(478
|
)
|
(69
|
)
|
—
|
|
(547
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
—
|
|
502
|
|
148
|
|
—
|
|
650
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
—
|
|
$
|
24
|
|
$
|
79
|
|
$
|
—
|
|
$
|
103
|
|
•
|
Financial performance -
In the
third quarter
of
2017
, CP reported Diluted earnings per share ("EPS") of $
3.50
,
an increase
of
50%
as compared to 2016 primarily due to increased foreign exchange ("FX") gains on U.S. dollar-denominated debt and increased volumes in 2017. Adjusted diluted EPS, which excludes, amongst other factors, these FX gains, was $
2.90
in the
third quarter
of
2017
, an increase of
6%
compared to last year.
|
•
|
Total revenues -
Total revenues
increased
by
3%
in the
third quarter
of
2017
to
$1,595 million
from
$1,554 million
in the same period in
2016
.
|
•
|
Operating performance
- CP's average train weight
increased
by
1
% to
8,990
tons and terminal dwell time
improved
by
6
% to
6.6
hours. Average train speed
decreased
by
3
% to
23.1
miles per hour and average train length
decreased
by
1
% to
7,301
feet, primarily as a result of CP moving proportionately more frac sand and Potash, and decreases in Intermodal traffic compared to the same period in 2016. These metrics are discussed further in
Performance Indicators
of this Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
|
•
|
On October 17, 2017, the Board of Directors appointed Nadeem Velani to the position of Executive Vice-President and Chief Financial Officer from the position of Vice-President and Chief Financial Officer, and Laird Pitz to the position of Senior Vice-President and Chief Risk Officer from the position of Vice-President and Chief Risk Officer.
|
•
|
During the year, CP has become eligible to rely on the "foreign private issuer" exemption pursuant to SEC rules as a result of changes to the Company's Board, as evaluated at June 30, 2017. CP currently intends to continue utilizing U.S. domestic registrant forms 10-K, 10-Q and 8-K for its annual, quarterly and material events filings, respectively, and file its 2018 management proxy circular pursuant to Canadian securities law and regulation. The Company is assessing possible regulatory options with respect to shelf prospectuses and registration statements.
|
•
|
On July 17, 2017, CP declared a quarterly dividend of $0.5625 per share on the outstanding Common Shares. The dividend is payable on October 30, 2017 to holders of record at the close of business on September 29, 2017.
|
•
|
On May 10, 2017, CP announced a new normal course issuer bid ("NCIB") to repurchase, for cancellation, up to 4,384,062 of its Common Shares, which received Toronto Stock Exchange ("TSX") approval on May 10, 2017.
As at
September 30, 2017
, CP had repurchased
1.8 million
shares under the NCIB.
|
•
|
Also on May 10, 2017, CP announced an increase to the Company's quarterly dividend to $0.5625 per share from $0.50 per share. The dividend was paid on July 31, 2017 to holders of record at the close of business on June 30, 2017.
|
•
|
On May 16, 2017, the Government of Canada introduced the Transportation Modernization Act (Bill C-49) in Parliament. The bill proposes amendments to the Canada Transportation Act and the Railway Safety Act, among others, to (1) replace the 160 kilometre extended interswitching limit and the competitive line rate provisions with a new long-haul interswitching regime; (2) modify the existing Level of Service remedy for shippers by instructing the Canadian Transportation Agency to determine, upon receipt of a complaint, if a railway company is fulfilling its common carrier obligation to provide “adequate and suitable accommodation” of traffic, if it is satisfied that the service provided is the “highest level of service that is reasonable in the circumstances”; (3) allow the existing Service Level Agreement arbitration remedy to include the consideration of reciprocal financial penalties; (4) increase the threshold for summary Final Offer Arbitrations from $750,000 to $2 million; (5) bifurcate the Volume-Related Composite Price Index component of the annual Maximum Revenue Entitlement determination for
transportation of regulated grain, to encourage hopper car investment by CP and Canadian National Railway Company ("CN"); and (6) mandate the installation of locomotive voice and video recorders ("LVVRs"), with statutory permission for random access by railway companies and Transport Canada to the LVVR data in order to proactively strengthen railway safety in Canada. The bill is currently being considered by the Parliament of Canada. It is unclear when the proposed legislative amendments will be enacted into law.
|
|
For the three months ended September 30
|
|
|
For the nine months ended September 30
|
|
|||||||
|
2017
|
2016
(1)
|
% Change
|
2017
(1)
|
2016
(1)
|
% Change
|
||||||
Operations Performance
|
|
|
|
|
|
|
||||||
Gross ton-miles (“GTMs”) (millions)
|
62,311
|
|
60,297
|
|
3
|
|
186,899
|
|
180,461
|
|
4
|
|
Train miles (thousands)
|
7,444
|
|
7,305
|
|
2
|
|
22,786
|
|
22,626
|
|
1
|
|
Average train weight – excluding local traffic (tons)
|
8,990
|
|
8,891
|
|
1
|
|
8,775
|
|
8,623
|
|
2
|
|
Average train length – excluding local traffic (feet)
|
7,301
|
|
7,411
|
|
(1
|
)
|
7,193
|
|
7,257
|
|
(1
|
)
|
Average terminal dwell (hours)
|
6.6
|
|
7.0
|
|
(6
|
)
|
6.5
|
|
6.8
|
|
(4
|
)
|
Average train speed (miles per hour, or "mph")
|
23.1
|
|
23.9
|
|
(3
|
)
|
22.9
|
|
23.8
|
|
(4
|
)
|
Fuel efficiency (U.S. gallons of locomotive fuel consumed / 1,000 GTMs)
|
0.944
|
|
0.940
|
|
—
|
|
0.978
|
|
0.974
|
|
—
|
|
Total employees (average)
|
12,149
|
|
11,750
|
|
3
|
|
11,990
|
|
12,175
|
|
(2
|
)
|
Total employees (end of period)
|
12,135
|
|
11,773
|
|
3
|
|
12,135
|
|
11,773
|
|
3
|
|
Workforce (end of period)
|
12,219
|
|
11,827
|
|
3
|
|
12,219
|
|
11,827
|
|
3
|
|
Safety Indicators
|
|
|
|
|
|
|
|
|||||
FRA personal injuries per 200,000 employee-hours
|
1.63
|
|
1.87
|
|
(13
|
)
|
1.67
|
|
1.55
|
|
8
|
|
FRA train accidents per million train miles
|
0.95
|
|
1.24
|
|
(23
|
)
|
1.01
|
|
0.97
|
|
4
|
|
(1)
|
Certain figures have been revised to conform with current presentation or have been updated to reflect new information as certain operating statistics are estimated and can continue to be updated as actuals settle.
|
•
|
A
GTM
is the movement of one ton of train weight over one mile. GTMs are calculated by multiplying total train weight by the distance the train moved. Total train weight comprises the weight of the freight cars, their contents, and any inactive locomotives. An increase in GTMs indicates additional workload. GTMs for the
third quarter
of
2017
were
62,311 million
,
an increase
of
3%
compared with
60,297 million
in the same period of
2016
. This
increase
was primarily due to increased volumes of Energy, chemicals and plastics, frac sand, and Potash, partially offset by decreased volumes of Grain and Intermodal.
|
•
|
Train miles
are defined as the sum of the distance moved by all trains operated on the network. Train miles
increased
by
2%
for the
third quarter
of
2017
compared to the same period of
2016
. This reflects the impact of higher volumes partly offset by continuous improvements in train weights.
|
•
|
The
average train weight
is defined as the average gross weight of CP trains, both loaded and empty. This excludes trains in short-haul service, work trains used to move CP’s track equipment and materials, and the haulage of other railways’ trains on CP’s network. Average train weight
increased
by
1%
for the
third quarter
of
2017
compared to the same period of
2016
. This
increase
was due to continuous improvements in bulk train weights and operating plan efficiency, as well as higher frac sand, crude and Potash volumes compared to the same period in 2016.
|
•
|
The
average train length
is the sum of each car multiplied by the distance travelled, divided by train miles. Local trains are excluded from this measure. Average train length
decreased
by
1
% for the
third quarter
of
2017
compared to the same period of
2016
. This is a result of proportionately more shorter and heavier frac sand and crude trains and proportionately fewer longer and lighter intermodal trains, compared to the same period in 2016.
|
•
|
The
average terminal dwell
is defined as the average time a freight car resides within terminal boundaries expressed in hours. The timing starts with a train arriving at the terminal, a customer releasing the car to the Company, or a car arriving at interchange from another railway. The timing ends when the train leaves, a customer receives the car from CP, or the freight car is transferred to another railway. Freight cars are excluded if they are being stored at the terminal or used in track repairs. Average terminal dwell
improved
by
6
% in the
third quarter
of
2017
compared to the same period of
2016
. This favourable
decrease
was primarily due to continued improvements in yard operating performance and the focus and visibility provided through improved trip planning.
|
•
|
The
average train speed
is defined as a measure of the line-haul movement from origin to destination including terminal dwell hours. It is calculated by dividing the total train miles travelled by the total train hours operated. This calculation does
|
•
|
Fuel efficiency
is defined as U.S. gallons of locomotive fuel consumed per 1,000 GTMs - freight and yard. Fuel efficiency was essentially unchanged in the
third quarter
of
2017
compared to the same period of
2016
.
|
•
|
GTMs
for the first nine months
of
2017
were
186,899 million
,
an increase
of
4
% compared with
180,461 million
in the same period of
2016
. This
increase
was primarily due to increased volumes of frac sand, Potash, and Energy, chemicals and plastics, partially offset by decreased volumes of Intermodal.
|
•
|
Train miles
increased
by
1%
for the
first nine months
of
2017
compared to the same period of
2016
. This reflects the impact of higher volumes partly offset by continuous improvements in train weights.
|
•
|
Average train weight
increased
by
2
% for the
first nine months
of
2017
compared to the same period of
2016
. This increase was due to continuous improvements in bulk train weights and operating plan efficiency, as well as higher frac sand and Potash volumes compared to the same period in 2016.
|
•
|
Average train length
decreased
by
1
% for the
first nine months
of
2017
from the same period of
2016
. This
decrease
is primarily due to moving proportionately fewer longer and lighter intermodal trains and proportionately more shorter and heavier frac sand trains compared to the same period in 2016.
|
•
|
Average terminal dwell
improved
by
4
% in the
first nine months
of
2017
compared to the same period of
2016
. This favourable
decrease
was primarily due to continued improvements in yard operating performance and the focus and visibility provided through improved trip planning.
|
•
|
Average train speed
decreased
by
4
% in the
first nine months
of
2017
compared to the same period of
2016
. This unfavourable
decrease
was primarily due to increased volumes of heavier and slower frac sand and Potash trains, as well as decreased volumes of lighter and faster Intermodal trains, and harsher weather conditions in the first quarter of 2017.
|
•
|
Fuel efficiency
was essentially unchanged in the
first nine months
of
2017
compared to the same period of
2016
.
|
|
For the three months ended September 30
|
For the nine months ended September 30
|
||||||||||
(in millions, except per share data, percentages and ratios)
|
2017
|
2016
|
2017
|
2016
|
||||||||
Financial Performance
|
|
|
|
|
||||||||
Revenues
|
$
|
1,595
|
|
$
|
1,554
|
|
$
|
4,841
|
|
$
|
4,595
|
|
Operating income
|
690
|
|
657
|
|
2,040
|
|
1,861
|
|
||||
Adjusted operating income
(1)
|
690
|
|
657
|
|
1,989
|
|
1,861
|
|
||||
Net income
|
510
|
|
347
|
|
1,421
|
|
1,215
|
|
||||
Adjusted income
(1)
|
422
|
|
405
|
|
1,197
|
|
1,101
|
|
||||
Basic EPS
|
3.50
|
|
2.35
|
|
9.72
|
|
8.06
|
|
||||
Diluted EPS
|
3.50
|
|
2.34
|
|
9.70
|
|
8.02
|
|
||||
Adjusted diluted EPS
(1)
|
2.90
|
|
2.73
|
|
8.17
|
|
7.26
|
|
||||
Dividends declared per share
|
0.5625
|
|
0.5000
|
|
1.6250
|
|
1.3500
|
|
||||
Cash provided by operating activities
|
527
|
|
591
|
|
1,449
|
|
1,321
|
|
||||
Free cash
(1)
|
214
|
|
315
|
|
575
|
|
488
|
|
||||
Operating ratio
(2)
|
56.7
|
%
|
57.7
|
%
|
57.9
|
%
|
59.5
|
%
|
||||
Adjusted operating ratio
(1)
|
56.7
|
%
|
57.7
|
%
|
58.9
|
%
|
59.5
|
%
|
||||
|
As at September 30, 2017
|
As at December 31, 2016
|
||||||||||
Financial Position
|
|
|
|
|
||||||||
Total assets
|
$
|
19,479
|
|
$
|
19,221
|
|
||||||
Total long-term obligations
(3)
|
7,458
|
|
8,737
|
|
||||||||
Shareholders’ equity
|
5,565
|
|
4,626
|
|
||||||||
|
For the twelve months ended September 30
|
|||||||||||
|
2017
|
2016
|
||||||||||
Financial Ratios
|
|
|
|
|
||||||||
Return on invested capital ("ROIC")
(1)
|
15.9
|
%
|
14.3
|
%
|
||||||||
Adjusted ROIC
(1)
|
14.6
|
%
|
14.2
|
%
|
(1)
|
These measures have no standardized meanings prescribed by accounting principles generally accepted in the United States of America ("GAAP") and, therefore, may not be comparable to similar measures presented by other companies. These measures are defined and reconciled in
Non-GAAP Measures
of this Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
•
|
higher volumes;
|
•
|
higher defined benefit pension plan income of $26 million; and
|
•
|
a decrease in stock-based compensation expense.
|
•
|
the
favourable
impact of FX translation on U.S. dollar-denominated debt;
|
•
|
higher Operating income; and
|
•
|
a $25 million pre-tax legal settlement charge in 2016.
|
•
|
higher defined benefit pension plan income;
|
•
|
higher volumes; and
|
•
|
lower stock-based compensation expense.
|
•
|
higher volumes;
|
•
|
higher defined benefit pension plan income of
$76 million
;
|
•
|
management transition recovery of $51 million associated with Mr. E. Hunter Harrison's retirement as CEO of CP; and
|
•
|
efficiencies generated from improved operating performance and asset utilization.
|
•
|
higher volumes;
|
•
|
higher defined benefit pension plan income;
|
•
|
the management transition recovery; and
|
•
|
efficiencies generated from improved operating performance and asset utilization.
|
|
|
|
|
|
||
Average exchange rates (
Canadian dollar/U.S. dollar)
|
2017
|
|
2016
|
|
||
For the three months ended – September 30
|
$
|
1.25
|
|
$
|
1.30
|
|
For the nine months ended – September 30
|
$
|
1.31
|
|
$
|
1.32
|
|
|
|
|
|
|
||
Exchange rates (
Canadian dollar/U.S. dollar)
|
2017
|
|
2016
|
|
||
Beginning of year – January 1
|
$
|
1.34
|
|
$
|
1.38
|
|
Beginning of quarter – July 1
|
$
|
1.30
|
|
$
|
1.29
|
|
End of quarter – September 30
|
$
|
1.25
|
|
$
|
1.31
|
|
Average Fuel Price (U.S. dollars per U.S. gallon)
|
2017
|
|
2016
|
|
||
For the three months ended – September 30
|
$
|
2.08
|
|
$
|
1.90
|
|
For the nine months ended – September 30
|
$
|
2.07
|
|
$
|
1.72
|
|
Toronto Stock Exchange (in Canadian dollars)
|
2017
|
|
2016
|
|
||
Opening Common Share Price, as at January 1
|
$
|
191.56
|
|
$
|
176.73
|
|
Ending Common Share Price, as at June 30
|
$
|
208.65
|
|
$
|
166.33
|
|
Ending Common Share Price, as at September 30
|
$
|
209.58
|
|
$
|
200.19
|
|
Change in Common Share Price for the three months ended September 30
|
$
|
0.93
|
|
$
|
33.86
|
|
Change in Common Share Price for the nine months ended September 30
|
$
|
18.02
|
|
$
|
23.46
|
|
New York Stock Exchange (in U.S. dollars)
|
2017
|
|
2016
|
|
||
Opening Common Share Price, as at January 1
|
$
|
142.77
|
|
$
|
127.60
|
|
Ending Common Share Price, as at June 30
|
$
|
160.81
|
|
$
|
128.79
|
|
Ending Common Share Price, as at September 30
|
$
|
168.03
|
|
$
|
152.70
|
|
Change in Common Share Price for the three months ended September 30
|
$
|
7.22
|
|
$
|
23.91
|
|
Change in Common Share Price for the nine months ended September 30
|
$
|
25.26
|
|
$
|
25.10
|
|
|
|
|
2017 vs. 2016
|
|||||||||
For the three months ended September 30
|
2017
|
2016
|
Total Change
|
% Change
|
FX Adjusted
% Change (2) |
|||||||
Freight revenues (in millions)
(1)
|
$
|
1,547
|
|
$
|
1,510
|
|
$
|
37
|
|
2
|
|
4
|
Non-freight revenues (in millions)
|
48
|
|
44
|
|
4
|
|
9
|
|
9
|
|||
Total revenues (in millions)
|
$
|
1,595
|
|
$
|
1,554
|
|
$
|
41
|
|
3
|
|
5
|
Carloads (in thousands)
(3)
|
666.4
|
|
648.2
|
|
18.2
|
|
3
|
|
N/A
|
|||
Revenue ton-miles (in millions)
|
35,170
|
|
33,915
|
|
1,255
|
|
4
|
|
N/A
|
|||
Freight revenue per carload (dollars)
|
$
|
2,321
|
|
$
|
2,328
|
|
$
|
(7
|
)
|
—
|
|
2
|
Freight revenue per revenue ton-miles (cents)
|
4.40
|
|
4.45
|
|
(0.05
|
)
|
(1
|
)
|
1
|
(1)
|
Freight revenues include fuel surcharge revenues of
$52 million
in
2017
, and
$40 million
in
2016
. 2017 and 2016 fuel surcharge revenues include B.C. and Alberta
carbon taxes and levies
recovered.
|
(2)
|
FX Adjusted % Change does not have any standardized meaning prescribed by GAAP and, therefore is unlikely to be comparable to similar measures presented by other companies. FX adjusted variance is defined and reconciled in
Non-GAAP Measures
of this Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
|
(3)
|
Certain figures have been revised to conform with current presentation.
|
•
|
Freight revenues
were
$1,547 million
in the
third quarter
of
2017
, an
increase
of
$37 million
, or
2
%, from
$1,510 million
in the same period of
2016
. This
increase
was primarily due to higher volumes, as measured by revenue ton-miles, of frac sand, crude, domestic potash, domestic intermodal, Canadian coal and Canadian grain, and the favourable impact of higher fuel surcharge revenue of
$14 million
, slightly offset by lower volumes of international intermodal and U.S. grain, and the unfavourable impact of the change in FX of $29 million.
|
•
|
RTMs
are defined as the movement of one revenue-producing ton of freight over a distance of one mile. RTMs measure the relative weight and distance of rail freight moved by the Company. RTMs for the
third quarter
of
2017
were
35,170 million
, an
increase
of
4%
compared with
33,915 million
in the same period of
2016
. This
increase
was primarily due to increases in frac sand, crude, domestic potash, domestic intermodal, Canadian coal, energy products and Canadian grain, partially offset by decreases in international intermodal and U.S. grain.
|
•
|
Non-freight revenues
were
$48 million
in the
third quarter
of
2017
, an
increase
of
$4 million
, or
9%
, from
$44 million
in the same period of
2016
. This
increase
was primarily due to the recovery of prior costs following the expiration of a passenger service contract in 2017, partially offset by a decrease in passenger and switching revenues.
|
|
|
|
2017 vs. 2016
|
||||||||
For the nine months ended September 30
|
2017
|
2016
|
Total Change
|
% Change
|
FX Adjusted
% Change (2) |
||||||
Freight revenues (in millions)
(1)
|
$
|
4,708
|
|
$
|
4,464
|
|
$
|
244
|
|
5
|
6
|
Non-freight revenues (in millions)
|
133
|
|
131
|
|
2
|
|
2
|
2
|
|||
Total revenues (in millions)
|
$
|
4,841
|
|
$
|
4,595
|
|
$
|
246
|
|
5
|
6
|
Carloads (in thousands)
(3)
|
1,955.2
|
|
1,876.7
|
|
78.5
|
|
4
|
N/A
|
|||
Revenue ton-miles (in millions)
|
105,381
|
|
100,341
|
|
5,040
|
|
5
|
N/A
|
|||
Freight revenue per carload (dollars)
|
$
|
2,408
|
|
$
|
2,379
|
|
$
|
29
|
|
1
|
2
|
Freight revenue per revenue ton-miles (cents)
|
4.47
|
|
4.45
|
|
0.02
|
|
—
|
1
|
(1)
|
Freight revenues include fuel surcharge revenues of
$164 million
in
2017
, and
$90 million
in
2016
. 2017 and 2016 fuel surcharge revenues include B.C. and Alberta
carbon taxes and levies
recovered.
|
(2)
|
FX Adjusted % Change does not have any standardized meaning prescribed by GAAP and, therefore is unlikely to be comparable to similar measures presented by other companies. FX adjusted variance is defined and reconciled in
Non-GAAP Measures
of this Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
|
•
|
Freight revenues
were
$4,708 million
in the
first nine months
of
2017
, an
increase
of
$244 million
, or
5
%, from
$4,464 million
in the same period of
2016
. This
increase
was primarily due to an increase in volumes, as measured by RTMs, of frac sand, potash, Canadian grain, and domestic intermodal, and the favourable impact of higher fuel prices on fuel
|
•
|
RTMs
for the first nine months
of
2017
were
105,381 million
, an
increase
of
5
% compared with
100,341 million
in the same period of
2016
. This
increase
was primarily due to increases in frac sand, potash, Canadian grain, and domestic intermodal partially offset by decreases in international intermodal, fertilizers, and automotive.
|
•
|
Non-freight revenues
were
$133 million
in the
first nine months
of
2017
, an
increase
of
$2 million
, or
2%
, from
$131 million
in the same period of
2016
. This
increase
was primarily due to the recovery of prior costs following the expiration of a passenger service contract in 2017. This increase was partially offset by decreases in transload, switching and passenger revenues.
|
•
|
“Canadian Grain” and “U.S. Grain” were aggregated into the line of business "Grain";
|
•
|
“Chemicals and Plastics” and “Crude” were aggregated into the line of business "Energy, Chemicals and Plastics"; and
|
•
|
“Domestic Intermodal" and “International Intermodal” were aggregated into the line of business "Intermodal".
|
|
|
|
2017 vs. 2016
|
||||||||||
For the three months ended September 30
|
2017
|
2016
|
Total Change
|
% Change
|
FX Adjusted
% Change |
||||||||
Freight revenues (in millions)
|
$
|
351
|
|
$
|
372
|
|
$
|
(21
|
)
|
(6
|
)
|
(4
|
)
|
Carloads (in thousands)
|
108.0
|
|
113.6
|
|
(5.6
|
)
|
(5
|
)
|
N/A
|
|
|||
Revenue ton-miles (in millions)
|
8,627
|
|
9,180
|
|
(553
|
)
|
(6
|
)
|
N/A
|
|
|||
Freight revenue per carload (dollars)
|
$
|
3,251
|
|
$
|
3,272
|
|
$
|
(21
|
)
|
(1
|
)
|
2
|
|
Freight revenue per revenue ton-mile (cents)
|
4.07
|
|
4.05
|
|
0.02
|
|
—
|
|
3
|
|
|
|
|
2017 vs. 2016
|
||||||||
For the nine months ended September 30
|
2017
|
2016
|
Total Change
|
% Change
|
FX Adjusted
% Change |
||||||
Freight revenues (in millions)
|
$
|
1,107
|
|
$
|
1,041
|
|
$
|
66
|
|
6
|
7
|
Carloads (in thousands)
|
325.6
|
|
312.2
|
|
13.4
|
|
4
|
N/A
|
|||
Revenue ton-miles (in millions)
|
27,274
|
|
26,404
|
|
870
|
|
3
|
N/A
|
|||
Freight revenue per carload (dollars)
|
$
|
3,402
|
|
$
|
3,336
|
|
$
|
66
|
|
2
|
3
|
Freight revenue per revenue ton-mile (cents)
|
4.06
|
|
3.94
|
|
0.12
|
|
3
|
4
|
|
|
|
2017 vs. 2016
|
||||||||||
For the three months ended September 30
|
2017
|
2016
|
Total Ch
ange
|
% Change
|
FX Adjusted
% Change |
||||||||
Freight revenues (in millions)
|
$
|
165
|
|
$
|
160
|
|
$
|
5
|
|
3
|
|
4
|
|
Carloads (in thousands)
|
81.3
|
|
80.0
|
|
1.3
|
|
2
|
|
N/A
|
|
|||
Revenue ton-miles (in millions)
|
6,009
|
|
5,798
|
|
211
|
|
4
|
|
N/A
|
|
|||
Freight revenue per carload (dollars)
|
$
|
2,021
|
|
$
|
2,007
|
|
$
|
14
|
|
1
|
|
1
|
|
Freight revenue per revenue ton-mile (cents)
|
2.73
|
|
2.77
|
|
(0.04
|
)
|
(1
|
)
|
(1
|
)
|
|
|
|
2017 vs. 2016
|
||||||||
For the nine months ended September 30
|
2017
|
2016
|
Total Ch
ange
|
% Change
|
FX Adjusted
% Change |
||||||
Freight revenues (in millions)
|
$
|
478
|
|
$
|
454
|
|
$
|
24
|
|
5
|
6
|
Carloads (in thousands)
|
233.3
|
|
226.7
|
|
6.6
|
|
3
|
N/A
|
|||
Revenue ton-miles (in millions)
|
17,230
|
|
16,540
|
|
690
|
|
4
|
N/A
|
|||
Freight revenue per carload (dollars)
|
$
|
2,047
|
|
$
|
2,003
|
|
$
|
44
|
|
2
|
2
|
Freight revenue per revenue ton-mile (cents)
|
2.77
|
|
2.75
|
|
0.02
|
|
1
|
1
|
|
|
|
2017 vs. 2016
|
||||||||
For the three months ended September 30
|
2017
|
2016
|
Total Ch
ange
|
% Change
|
FX Adjusted
% Change |
||||||
Freight revenues (in millions)
|
$
|
103
|
|
$
|
81
|
|
$
|
22
|
|
27
|
29
|
Carloads (in thousands)
|
34.6
|
|
29.0
|
|
5.6
|
|
19
|
N/A
|
|||
Revenue ton-miles (in millions)
|
4,083
|
|
3,651
|
|
432
|
|
12
|
N/A
|
|||
Freight revenue per carload (dollars)
|
$
|
2,978
|
|
$
|
2,782
|
|
$
|
196
|
|
7
|
9
|
Freight revenue per revenue ton-mile (cents)
|
2.53
|
|
2.21
|
|
0.32
|
|
14
|
16
|
|
|
|
2017 vs. 2016
|
||||||||
For the nine months ended September 30
|
2017
|
2016
|
Total Ch
ange
|
% Change
|
FX Adjusted
% Change |
||||||
Freight revenues (in millions)
|
$
|
310
|
|
$
|
242
|
|
$
|
68
|
|
28
|
29
|
Carloads (in thousands)
|
102.9
|
|
84.2
|
|
18.7
|
|
22
|
N/A
|
|||
Revenue ton-miles (in millions)
|
11,919
|
|
10,333
|
|
1,586
|
|
15
|
N/A
|
|||
Freight revenue per carload (dollars)
|
$
|
3,013
|
|
$
|
2,878
|
|
$
|
135
|
|
5
|
5
|
Freight revenue per revenue ton-mile (cents)
|
2.60
|
|
2.35
|
|
0.25
|
|
11
|
12
|
|
|
|
2017 vs. 2016
|
||||||||||
For the three months ended September 30
|
2017
|
2016
|
Total Ch
ange
|
% Change
|
FX Adjusted
% Change |
||||||||
Freight revenues (in millions)
|
$
|
52
|
|
$
|
64
|
|
$
|
(12
|
)
|
(19
|
)
|
(17
|
)
|
Carloads (in thousands)
|
13.8
|
|
14.3
|
|
(0.5
|
)
|
(3
|
)
|
N/A
|
|
|||
Revenue ton-miles (in millions)
|
864
|
|
958
|
|
(94
|
)
|
(10
|
)
|
N/A
|
|
|||
Freight revenue per carload (dollars)
|
$
|
3,814
|
|
$
|
4,476
|
|
$
|
(662
|
)
|
(15
|
)
|
(13
|
)
|
Freight revenue per revenue ton-mile (cents)
|
6.08
|
|
6.68
|
|
(0.60
|
)
|
(9
|
)
|
(7
|
)
|
|
|
|
2017 vs. 2016
|
||||||||||
For the nine months ended September 30
|
2017
|
2016
|
Total Ch
ange
|
% Change
|
FX Adjusted
% Change |
||||||||
Freight revenues (in millions)
|
$
|
181
|
|
$
|
218
|
|
$
|
(37
|
)
|
(17
|
)
|
(17
|
)
|
Carloads (in thousands)
|
43.2
|
|
45.2
|
|
(2.0
|
)
|
(4
|
)
|
N/A
|
|
|||
Revenue ton-miles (in millions)
|
2,837
|
|
3,144
|
|
(307
|
)
|
(10
|
)
|
N/A
|
|
|||
Freight revenue per carload (dollars)
|
$
|
4,198
|
|
$
|
4,825
|
|
$
|
(627
|
)
|
(13
|
)
|
(13
|
)
|
Freight revenue per revenue ton-mile (cents)
|
6.39
|
|
6.93
|
|
(0.54
|
)
|
(8
|
)
|
(7
|
)
|
|
|
|
2017 vs. 2016
|
||||||||||
For the three months ended September 30
|
2017
|
2016
|
Total Ch
ange
|
% Change
|
FX Adjusted
% Change |
||||||||
Freight revenues (in millions)
|
$
|
67
|
|
$
|
71
|
|
$
|
(4
|
)
|
(6
|
)
|
(3
|
)
|
Carloads (in thousands)
|
17.2
|
|
16.9
|
|
0.3
|
|
2
|
|
N/A
|
|
|||
Revenue ton-miles (in millions)
|
1,157
|
|
1,217
|
|
(60
|
)
|
(5
|
)
|
N/A
|
|
|||
Freight revenue per carload (dollars)
|
$
|
3,870
|
|
$
|
4,211
|
|
$
|
(341
|
)
|
(8
|
)
|
(5
|
)
|
Freight revenue per revenue ton-mile (cents)
|
5.78
|
|
5.86
|
|
(0.08
|
)
|
(1
|
)
|
2
|
|
|
|
|
2017 vs. 2016
|
||||||||||
For the nine months ended September 30
|
2017
|
2016
|
Total Ch
ange
|
% Change
|
FX Adjusted
% Change |
||||||||
Freight revenues (in millions)
|
$
|
202
|
|
$
|
212
|
|
$
|
(10
|
)
|
(5
|
)
|
(4
|
)
|
Carloads (in thousands)
|
49.8
|
|
51.0
|
|
(1.2
|
)
|
(2
|
)
|
N/A
|
|
|||
Revenue ton-miles (in millions)
|
3,390
|
|
3,619
|
|
(229
|
)
|
(6
|
)
|
N/A
|
|
|||
Freight revenue per carload (dollars)
|
$
|
4,056
|
|
$
|
4,160
|
|
$
|
(104
|
)
|
(3
|
)
|
(2
|
)
|
Freight revenue per revenue ton-mile (cents)
|
5.96
|
|
5.87
|
|
0.09
|
|
2
|
|
3
|
|
|
|
|
2017 vs. 2016
|
||||||||||
For the three months ended September 30
|
2017
|
2016
|
Total Ch
ange
|
% Change
|
FX Adjusted
% Change |
||||||||
Freight revenues (in millions)
|
$
|
208
|
|
$
|
187
|
|
$
|
21
|
|
11
|
|
15
|
|
Carloads (in thousands)
|
64.7
|
|
57.4
|
|
7.3
|
|
13
|
|
N/A
|
|
|||
Revenue ton-miles (in millions)
|
4,992
|
|
3,971
|
|
1,021
|
|
26
|
|
N/A
|
|
|||
Freight revenue per carload (dollars)
|
$
|
3,227
|
|
$
|
3,254
|
|
$
|
(27
|
)
|
(1
|
)
|
2
|
|
Freight revenue per revenue ton-mile (cents)
|
4.18
|
|
4.71
|
|
(0.53
|
)
|
(11
|
)
|
(9
|
)
|
|
|
|
2017 vs. 2016
|
||||||||||
For the nine months ended September 30
|
2017
|
2016
|
Total Ch
ange
|
% Change
|
FX Adjusted
% Change |
||||||||
Freight revenues (in millions)
|
$
|
651
|
|
$
|
638
|
|
$
|
13
|
|
2
|
|
3
|
|
Carloads (in thousands)
|
194.0
|
|
185.1
|
|
8.9
|
|
5
|
|
N/A
|
|
|||
Revenue ton-miles (in millions)
|
15,302
|
|
14,295
|
|
1,007
|
|
7
|
|
N/A
|
|
|||
Freight revenue per carload (dollars)
|
$
|
3,357
|
|
$
|
3,448
|
|
$
|
(91
|
)
|
(3
|
)
|
(2
|
)
|
Freight revenue per revenue ton-mile (cents)
|
4.26
|
|
4.47
|
|
(0.21
|
)
|
(5
|
)
|
(3
|
)
|
|
|
|
2017 vs. 2016
|
|||||||||
For the three months ended September 30
|
2017
|
2016
|
Total Ch
ange
|
% Change
|
FX Adjusted
% Change |
|||||||
Freight revenues (in millions)
|
$
|
192
|
|
$
|
142
|
|
$
|
50
|
|
35
|
|
39
|
Carloads (in thousands)
|
68.2
|
|
50.3
|
|
17.9
|
|
36
|
|
N/A
|
|||
Revenue ton-miles (in millions)
|
3,030
|
|
2,171
|
|
859
|
|
40
|
|
N/A
|
|||
Freight revenue per carload (dollars)
|
$
|
2,806
|
|
$
|
2,821
|
|
$
|
(15
|
)
|
(1
|
)
|
2
|
Freight revenue per revenue ton-mile (cents)
|
6.32
|
|
6.53
|
|
(0.21
|
)
|
(3
|
)
|
—
|
|
|
|
2017 vs. 2016
|
||||||||||
For the nine months ended September 30
|
2017
|
2016
|
Total Ch
ange
|
% Change
|
FX Adjusted
% Change |
||||||||
Freight revenues (in millions)
|
$
|
552
|
|
$
|
415
|
|
$
|
137
|
|
33
|
|
34
|
|
Carloads (in thousands)
|
191.1
|
|
144.9
|
|
46.2
|
|
32
|
|
N/A
|
|
|||
Revenue ton-miles (in millions)
|
8,512
|
|
6,067
|
|
2,445
|
|
40
|
|
N/A
|
|
|||
Freight revenue per carload (dollars)
|
$
|
2,888
|
|
$
|
2,862
|
|
$
|
26
|
|
1
|
|
2
|
|
Freight revenue per revenue ton-mile (cents)
|
6.49
|
|
6.83
|
|
(0.34
|
)
|
(5
|
)
|
(4
|
)
|
|
|
|
2017 vs. 2016
|
||||||||||
For the three months ended September 30
|
2017
|
2016
|
Total Ch
ange
|
% Change
|
FX Adjusted
% Change |
||||||||
Freight revenues (in millions)
|
$
|
68
|
|
$
|
86
|
|
$
|
(18
|
)
|
(21
|
)
|
(18
|
)
|
Carloads (in thousands)
|
25.0
|
|
28.9
|
|
(3.9
|
)
|
(13
|
)
|
N/A
|
|
|||
Revenue ton-miles (in millions)
|
316
|
|
393
|
|
(77
|
)
|
(20
|
)
|
N/A
|
|
|||
Freight revenue per carload (dollars)
|
$
|
2,737
|
|
$
|
2,985
|
|
$
|
(248
|
)
|
(8
|
)
|
(5
|
)
|
Freight revenue per revenue ton-mile (cents)
|
21.62
|
|
21.91
|
|
(0.29
|
)
|
(1
|
)
|
2
|
|
|
|
|
2017 vs. 2016
|
||||||||||
For the nine months ended September 30
|
2017
|
2016
|
Total Ch
ange
|
% Change
|
FX Adjusted
% Change |
||||||||
Freight revenues (in millions)
|
$
|
223
|
|
$
|
270
|
|
$
|
(47
|
)
|
(17
|
)
|
(17
|
)
|
Carloads (in thousands)
|
79.9
|
|
97.2
|
|
(17.3
|
)
|
(18
|
)
|
N/A
|
|
|||
Revenue ton-miles (in millions)
|
1,016
|
|
1,305
|
|
(289
|
)
|
(22
|
)
|
N/A
|
|
|||
Freight revenue per carload (dollars)
|
$
|
2,788
|
|
$
|
2,777
|
|
$
|
11
|
|
—
|
|
1
|
|
Freight revenue per revenue ton-mile (cents)
|
21.92
|
|
20.68
|
|
1.24
|
|
6
|
|
7
|
|
|
|
|
2017 vs. 2016
|
||||||||||
For the three months ended September 30
|
2017
|
2016
|
Total Ch
ange
|
% Change
|
FX Adjusted
% Change |
||||||||
Freight revenues (in millions)
|
$
|
341
|
|
$
|
347
|
|
$
|
(6
|
)
|
(2
|
)
|
(1
|
)
|
Carloads (in thousands)
|
253.6
|
|
257.8
|
|
(4.2
|
)
|
(2
|
)
|
N/A
|
|
|||
Revenue ton-miles (in millions)
|
6,092
|
|
6,576
|
|
(484
|
)
|
(7
|
)
|
N/A
|
|
|||
Freight revenue per carload (dollars)
|
$
|
1,343
|
|
$
|
1,345
|
|
$
|
(2
|
)
|
—
|
|
1
|
|
Freight revenue per revenue ton-mile (cents)
|
5.59
|
|
5.27
|
|
0.32
|
|
6
|
|
7
|
|
|
|
|
2017 vs. 2016
|
|||||||||
For the nine months ended September 30
|
2017
|
2016
|
Total Ch
ange
|
% Change
|
FX Adjusted
% Change |
|||||||
Freight revenues (in millions)
|
$
|
1,004
|
|
$
|
974
|
|
$
|
30
|
|
3
|
|
3
|
Carloads (in thousands)
|
735.4
|
|
730.2
|
|
5.2
|
|
1
|
|
N/A
|
|||
Revenue ton-miles (in millions)
|
17,901
|
|
18,634
|
|
(733
|
)
|
(4
|
)
|
N/A
|
|||
Freight revenue per carload (dollars)
|
$
|
1,364
|
|
$
|
1,333
|
|
$
|
31
|
|
2
|
|
3
|
Freight revenue per revenue ton-mile (cents)
|
5.61
|
|
5.23
|
|
0.38
|
|
7
|
|
8
|
|
|
|
2017 vs. 2016
|
||||||||||
For the three months ended September 30 (in mill
ions)
|
2017
|
2016
|
Total Change
|
% Change
|
FX Adjusted % Change
(1)
|
||||||||
Compensation and benefits
|
$
|
256
|
|
$
|
294
|
|
$
|
(38
|
)
|
(13
|
)
|
(11
|
)
|
Fuel
|
150
|
|
138
|
|
12
|
|
9
|
|
12
|
|
|||
Materials
|
45
|
|
39
|
|
6
|
|
15
|
|
15
|
|
|||
Equipment rents
|
35
|
|
43
|
|
(8
|
)
|
(19
|
)
|
(17
|
)
|
|||
Depreciation and amortization
|
162
|
|
155
|
|
7
|
|
5
|
|
6
|
|
|||
Purchased services and other
|
257
|
|
228
|
|
29
|
|
13
|
|
15
|
|
|||
Total operating expenses
|
$
|
905
|
|
$
|
897
|
|
$
|
8
|
|
1
|
|
3
|
|
•
|
an adjustment reducing discontinuance liabilities for certain branch lines in 2016
;
|
•
|
higher volume variable expenses;
|
•
|
the unfavourable impact of increases in fuel price of
$9 million
;
|
•
|
the unfavourable impact of wage and benefit inflation;
|
•
|
higher depreciation expenses;
|
•
|
higher casualty costs; and
|
•
|
higher incentive based compensation.
|
•
|
higher defined benefit pension plan income of $26 million;
|
•
|
lower stock based compensation expense; and
|
•
|
the favourable impact of the change in FX of
$17 million
.
|
|
|
|
2017 vs. 2016
|
||||||||||
For the nine months ended September 30 (in mil
lions)
|
2017
|
2016
|
Total Change
|
% Change
|
FX Adjusted % Change
(1)
|
||||||||
Compensation and benefits
|
$
|
766
|
|
$
|
907
|
|
$
|
(141
|
)
|
(16
|
)
|
(15
|
)
|
Fuel
|
480
|
|
394
|
|
86
|
|
22
|
|
23
|
|
|||
Materials
|
142
|
|
133
|
|
9
|
|
7
|
|
8
|
|
|||
Equipment rents
|
108
|
|
132
|
|
(24
|
)
|
(18
|
)
|
(18
|
)
|
|||
Depreciation and amortization
|
493
|
|
478
|
|
15
|
|
3
|
|
3
|
|
|||
Purchased services and other
|
812
|
|
690
|
|
122
|
|
18
|
|
19
|
|
|||
Total operating expenses
|
$
|
2,801
|
|
$
|
2,734
|
|
$
|
67
|
|
2
|
|
3
|
|
•
|
the unfavourable impact of increases in fuel price of
$70 million
;
|
•
|
the gain on sale of CP's Arbutus Corridor in 2016 of $50 million;
|
•
|
higher volume variable expenses;
|
•
|
the impact of wage and benefit inflation;
|
•
|
an adjustment reducing discontinuance liabilities for certain branch lines in 2016
;
|
•
|
the gain on sale of surplus freight cars in 2016 of $17 million; and
|
•
|
higher depreciation expense.
|
•
|
higher defined benefit pension plan income of
$76 million
;
|
•
|
management transition recovery of $51 million associated with Mr. E. Hunter Harrison's retirement as CEO of CP;
|
•
|
efficiencies generated from improved operating performance and asset utilization; and
|
•
|
the favourable impact of the change in FX of
$15 million
.
|
•
|
higher defined benefit pension plan income of $26 million;
|
•
|
lower stock-based compensation driven primarily by the change in stock price;
|
•
|
the favourable impact of the change in FX of
$5 million
; and
|
•
|
lower labour expense due to operational efficiencies.
|
•
|
wage and benefit inflation;
|
•
|
higher incentive based compensation, and
|
•
|
higher volume variable expenses as a result of an increase in workload as measured in GTMs.
|
•
|
higher defined benefit pension plan income of
$76 million
;
|
•
|
management transition recoveries of $51 million associated with Mr. E. Hunter Harrison's retirement as CEO of CP;
|
•
|
lower labour expense due to operational efficiencies;
|
•
|
lower stock-based compensation driven primarily by the change in stock price; and
|
•
|
the favourable impact of the change in FX of $4 million.
|
|
|
|
2017 vs. 2016
|
||||||||
For the three months ended September 30 (in millions)
|
2017
|
|
2016
(1)
|
|
Total Change
|
% Change
|
|||||
Support and facilities
|
$
|
65
|
|
$
|
62
|
|
$
|
3
|
|
5
|
|
Track and operations
|
58
|
|
54
|
|
4
|
|
7
|
|
|||
Intermodal
|
49
|
|
44
|
|
5
|
|
11
|
|
|||
Equipment
|
35
|
|
39
|
|
(4
|
)
|
(10
|
)
|
|||
Casualty
|
20
|
|
15
|
|
5
|
|
33
|
|
|||
Property taxes
|
31
|
|
29
|
|
2
|
|
7
|
|
|||
Other
|
1
|
|
(10
|
)
|
11
|
|
(110
|
)
|
|||
Land sales
|
(2
|
)
|
(5
|
)
|
3
|
|
(60
|
)
|
|||
Total Purchased services and other
|
$
|
257
|
|
$
|
228
|
|
$
|
29
|
|
13
|
|
(1)
|
Certain comparative figures have been revised to conform with current presentation.
|
•
|
an adjustment reducing discontinuance liabilities for certain branch lines in 2016
, reported in Other;
|
•
|
higher casualty costs, primarily due to higher rolling stock costs associated with major incidents;
|
•
|
higher intermodal expenses related to pickup and delivery and terminal costs, reported in Intermodal;
|
•
|
lower gains on fewer land sales; and
|
•
|
higher right of way maintenance and dismantling costs, reported in Track and operations.
|
|
|
|
2017 vs. 2016
|
||||||||
For the nine months ended September 30 (in millions)
|
2017
|
|
2016
(1)
|
|
Total Change
|
% Change
|
|||||
Support and facilities
|
$
|
201
|
|
$
|
200
|
|
$
|
1
|
|
1
|
|
Track and operations
|
193
|
|
184
|
|
9
|
|
5
|
|
|||
Intermodal
|
144
|
|
132
|
|
12
|
|
9
|
|
|||
Equipment
|
120
|
|
122
|
|
(2
|
)
|
(2
|
)
|
|||
Casualty
|
55
|
|
49
|
|
6
|
|
12
|
|
|||
Property taxes
|
95
|
|
88
|
|
7
|
|
8
|
|
|||
Other
|
9
|
|
(25
|
)
|
34
|
|
(136
|
)
|
|||
Land sales
|
(5
|
)
|
(60
|
)
|
55
|
|
(92
|
)
|
|||
Total Purchased services and other
|
$
|
812
|
|
$
|
690
|
|
$
|
122
|
|
18
|
|
(1)
|
Certain comparative figures have been revised to conform with current presentation.
|
•
|
lower gains on land sales of
$55 million
;
|
•
|
the gain on sale of surplus freight cars in 2016 of $17 million, reported in Other;
|
•
|
an adjustment reducing discontinuance liabilities for certain branch lines in 2016
, reported in Other;
|
•
|
higher right of way maintenance and dismantling costs, reported in Track and operations;
|
•
|
higher third-party snow removal services, reported in Track and operations;
|
•
|
higher expenses related to pickup and delivery services, reported in Intermodal;
|
•
|
higher property taxes due to tax rate increases; and
|
•
|
higher casualty costs, primarily due to higher rolling stock costs associated with major incidents.
|
•
|
in the second quarter of 2016, the Company disposed of 1,000 surplus freight cars that had reached or were nearing the end of their useful life, in a non-monetary exchange for new freight cars. The Company recognized a gain on sale of $17 million from the transaction and the sale did not impact cash from investing activities; and
|
•
|
in the first quarter of 2016, the Company completed the sale of CP’s Arbutus Corridor to the City of Vancouver for gross proceeds of
$55 million
and a gain on sale of $50 million. The agreement allows the Company to share in future proceeds on the eventual development and/or sale of certain parcels of the Arbutus Corridor.
|
Long-term debt
|
|
Outlook
|
|
Standard & Poor's
|
|
|
|
|
Long-term corporate credit
|
BBB+
|
stable
|
|
Senior secured debt
|
A
|
stable
|
|
Senior unsecured debt
|
BBB+
|
stable
|
Moody's
|
|
|
|
|
Senior unsecured debt
|
Baa1
|
stable
|
DBRS
|
|
|
|
|
Unsecured debentures
|
BBB
|
stable
|
|
Medium-term notes
|
BBB
|
stable
|
|
|
|
|
$1 billion Commercial paper program
|
|
|
|
Standard & Poor's
|
A-2
|
N/A
|
|
Moody's
|
|
P-2
|
N/A
|
DBRS
|
|
R-2 (middle)
|
N/A
|
•
|
in the second quarter, a charge on hedge roll and de-designation of $13 million ($10 million after deferred tax) that unfavourably impacted Diluted EPS by 7 cents;
|
•
|
in the second quarter, an insurance recovery of a legal settlement of $10 million ($7 million after current tax) that favourably impacted Diluted EPS by 5 cents;
|
•
|
in the first quarter, a management transition recovery of $51 million related to the retirement of Mr. E. Hunter Harrison as CEO of CP ($39 million after deferred tax) that favourably impacted Diluted EPS by 27 cents;
|
•
|
during the course of the year, a net deferred tax recovery of $14 million as a result of the change in income tax rates as follows:
|
•
|
in the third quarter, a deferred tax expense of $3 million as a result of the change in the Illinois state corporate income tax rate change that unfavourably impacted Diluted EPS by 2 cents;
|
•
|
in the second quarter, a deferred tax recovery of $17 million as a result of the change in the Saskatchewan provincial corporate income tax rate that favourably impacted Diluted EPS by 12 cents; and
|
•
|
during the course of the year, a net non-cash gain of $200 million ($174 million after deferred tax) due to FX translation of the Company’s U.S. dollar-denominated debt as follows:
|
•
|
in the third quarter, a $105 million gain ($91 million after deferred tax) that favourably impacted Diluted EPS by 62 cents;
|
•
|
in the second quarter, a $67 million gain ($59 million after deferred tax) that favourably impacted Diluted EPS by 40 cents; and
|
•
|
in the first quarter, a $28 million gain ($24 million after deferred tax) that favourably impacted Diluted EPS by 16 cents.
|
•
|
in the third quarter, a $25 million expense ($18 million after current tax) related to a legal settlement that unfavourably impacted Diluted EPS by 12 cents; and
|
•
|
during the course of the year, a net non-cash gain of $79 million ($68 million after deferred tax) due to FX translation of the Company’s U.S. dollar-denominated debt as follows:
|
•
|
in the fourth quarter, a $74 million loss ($64 million after deferred tax) that unfavourably impacted Diluted EPS by 43 cents;
|
•
|
in the third quarter, a $46 million loss ($40 million after deferred tax) that unfavourably impacted Diluted EPS by 27 cents;
|
•
|
in the second quarter, an $18 million gain ($16 million after deferred tax) that favourably impacted Diluted EPS by 10 cents; and
|
•
|
in the first quarter, a $181 million gain ($156 million after deferred tax) that favourably impacted Diluted EPS by $1.01.
|
•
|
in the fourth quarter, a net non-cash loss of $115 million loss ($100 million after deferred tax) due to FX translation of the Company’s U.S. dollar-denominated debt that unfavourably impacted Diluted EPS by 64 cents.
|
|
For the three months ended September 30
|
For the nine months ended September 30
|
||||||||||
(in millions)
|
2017
|
2016
|
2017
|
2016
|
||||||||
Net income as reported
|
$
|
510
|
|
$
|
347
|
|
$
|
1,421
|
|
$
|
1,215
|
|
Less significant items (pretax):
|
|
|
|
|
||||||||
Management transition recovery
|
—
|
|
—
|
|
51
|
|
—
|
|
||||
Impact of FX translation on U.S. dollar-denominated debt
|
105
|
|
(46
|
)
|
200
|
|
153
|
|
||||
Charge on hedge roll and de-designation
|
—
|
|
—
|
|
(13
|
)
|
—
|
|
||||
Legal settlement charge
|
—
|
|
(25
|
)
|
—
|
|
(25
|
)
|
||||
Insurance recovery of legal settlement
|
—
|
|
—
|
|
10
|
|
—
|
|
||||
Income tax rate change
|
(3
|
)
|
—
|
|
14
|
|
—
|
|
||||
Tax effect of adjustments
(1)
|
14
|
|
(13
|
)
|
38
|
|
14
|
|
||||
Adjusted income
|
$
|
422
|
|
$
|
405
|
|
$
|
1,197
|
|
$
|
1,101
|
|
|
For the three months ended September 30
|
For the nine months ended September 30
|
||||||||||
|
2017
|
2016
|
2017
|
2016
|
||||||||
Diluted earnings per share as reported
|
$
|
3.50
|
|
$
|
2.34
|
|
$
|
9.70
|
|
$
|
8.02
|
|
Less significant items:
|
|
|
|
|
||||||||
Management transition recovery
|
—
|
|
—
|
|
0.35
|
|
—
|
|
||||
Impact of FX translation on U.S. dollar-denominated debt
|
0.72
|
|
(0.31
|
)
|
1.36
|
|
1.01
|
|
||||
Charge on hedge roll and de-designation
|
—
|
|
—
|
|
(0.09
|
)
|
—
|
|
||||
Legal settlement charge
|
—
|
|
(0.17
|
)
|
—
|
|
(0.16
|
)
|
||||
Insurance recovery of legal settlement
|
—
|
|
—
|
|
0.07
|
|
—
|
|
||||
Income tax rate change
|
(0.02
|
)
|
—
|
|
0.10
|
|
—
|
|
||||
Tax effect of adjustments
(1)
|
0.10
|
|
(0.09
|
)
|
0.26
|
|
0.09
|
|
||||
Adjusted diluted earnings per share
|
$
|
2.90
|
|
$
|
2.73
|
|
$
|
8.17
|
|
$
|
7.26
|
|
|
For the three months ended September 30
|
For the nine months ended September 30
|
||||||||||
(in millions)
|
2017
|
2016
|
2017
|
2016
|
||||||||
Operating income as reported
|
$
|
690
|
|
$
|
657
|
|
$
|
2,040
|
|
$
|
1,861
|
|
Less significant item:
|
|
|
|
|
||||||||
Management transition recovery
|
—
|
|
—
|
|
51
|
|
—
|
|
||||
Adjusted operating income
|
$
|
690
|
|
$
|
657
|
|
$
|
1,989
|
|
$
|
1,861
|
|
|
For the three months ended September 30
|
For the nine months ended September 30
|
||||||
|
2017
|
2016
|
2017
|
2016
|
||||
Operating ratio as reported
|
56.7
|
%
|
57.7
|
%
|
57.9
|
%
|
59.5
|
%
|
Less significant item:
|
|
|
|
|
||||
Management transition recovery
|
—
|
%
|
—
|
%
|
(1.0
|
)%
|
—
|
%
|
Adjusted operating ratio
|
56.7
|
%
|
57.7
|
%
|
58.9
|
%
|
59.5
|
%
|
|
For the twelve months ended September 30
|
|||||
(in millions, except for percentages)
|
2017
|
2016
|
||||
Operating income
|
$
|
2,757
|
|
$
|
2,538
|
|
Less:
|
|
|
|
|
||
Other income and charges
|
(120
|
)
|
(20
|
)
|
||
Tax
(1)
|
716
|
|
679
|
|
||
|
$
|
2,161
|
|
$
|
1,879
|
|
Average of total shareholders' equity, long-term debt, long-term debt maturing within one year and short-term borrowing
|
13,623
|
|
13,109
|
|
||
ROIC
|
15.9
|
%
|
14.3
|
%
|
|
For the twelve months ended September 30
|
|||||
(in millions, except for percentages)
|
2017
|
2016
|
||||
Operating income
|
$
|
2,757
|
|
$
|
2,538
|
|
Less significant item:
|
|
|
|
|
||
Management transition recovery
|
51
|
|
—
|
|
||
Adjusted operating income
|
2,706
|
|
2,538
|
|
||
Less:
|
|
|
|
|
||
Other income and charges
|
(120
|
)
|
(20
|
)
|
||
Add significant items (pretax):
|
|
|
|
|
||
Charge on hedge roll and de-designation
|
13
|
|
—
|
|
||
Legal settlement charge
|
—
|
|
25
|
|
||
Insurance recovery of legal settlement
|
(10
|
)
|
—
|
|
||
Impact of FX translation on U.S. dollar-denominated debt
|
(126
|
)
|
(38
|
)
|
||
Less:
|
|
|
|
|
||
Tax
(1)
|
708
|
|
680
|
|
||
|
$
|
1,995
|
|
$
|
1,865
|
|
Average of total shareholders' equity, long-term debt, long-term debt maturing within one year and short-term borrowing
|
13,623
|
|
13,109
|
|
||
Adjusted ROIC
|
14.6
|
%
|
14.2
|
%
|
|
For the three months ended September 30
|
For the nine months ended September 30
|
||||||||||
(in millions)
|
2017
|
2016
|
2017
|
2016
|
||||||||
Cash provided by operating activities
|
$
|
527
|
|
$
|
591
|
|
$
|
1,449
|
|
$
|
1,321
|
|
Cash used in investing activities
|
(306
|
)
|
(278
|
)
|
(861
|
)
|
(817
|
)
|
||||
Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents
|
(7
|
)
|
2
|
|
(13
|
)
|
(16
|
)
|
||||
Free cash
(1)
|
$
|
214
|
|
$
|
315
|
|
$
|
575
|
|
$
|
488
|
|
|
For the three months ended September 30
|
|||||||||||||
(in millions)
|
Reported 2017
|
Reported 2016
|
Variance
due to FX |
FX Adjusted 2016
|
FX Adjusted % Change
|
|||||||||
Freight revenues
|
$
|
1,547
|
|
$
|
1,510
|
|
$
|
(29
|
)
|
$
|
1,481
|
|
4
|
|
Non-freight revenues
|
48
|
|
44
|
|
—
|
|
44
|
|
9
|
|
||||
Total revenues
|
1,595
|
|
1,554
|
|
(29
|
)
|
1,525
|
|
5
|
|
||||
Compensation and benefits
|
256
|
|
294
|
|
(5
|
)
|
289
|
|
(11
|
)
|
||||
Fuel
|
150
|
|
138
|
|
(4
|
)
|
134
|
|
12
|
|
||||
Materials
|
45
|
|
39
|
|
—
|
|
39
|
|
15
|
|
||||
Equipment rents
|
35
|
|
43
|
|
(1
|
)
|
42
|
|
(17
|
)
|
||||
Depreciation and amortization
|
162
|
|
155
|
|
(2
|
)
|
153
|
|
6
|
|
||||
Purchased services and other
|
257
|
|
228
|
|
(5
|
)
|
223
|
|
15
|
|
||||
Total operating expenses
|
905
|
|
897
|
|
(17
|
)
|
880
|
|
3
|
|
||||
Operating income
|
$
|
690
|
|
$
|
657
|
|
$
|
(12
|
)
|
$
|
645
|
|
7
|
|
|
For the nine months ended September 30
|
|||||||||||||
(in millions)
|
Reported 2017
|
Reported 2016
|
Variance
due to FX |
FX Adjusted 2016
|
FX Adjusted % Change
|
|||||||||
Freight revenues
|
$
|
4,708
|
|
$
|
4,464
|
|
$
|
(29
|
)
|
$
|
4,435
|
|
6
|
|
Non-freight revenues
|
133
|
|
131
|
|
—
|
|
131
|
|
2
|
|
||||
Total revenues
|
4,841
|
|
4,595
|
|
(29
|
)
|
4,566
|
|
6
|
|
||||
Compensation and benefits
|
766
|
|
907
|
|
(4
|
)
|
903
|
|
(15
|
)
|
||||
Fuel
|
480
|
|
394
|
|
(3
|
)
|
391
|
|
23
|
|
||||
Materials
|
142
|
|
133
|
|
(1
|
)
|
132
|
|
8
|
|
||||
Equipment rents
|
108
|
|
132
|
|
(1
|
)
|
131
|
|
(18
|
)
|
||||
Depreciation and amortization
|
493
|
|
478
|
|
(1
|
)
|
477
|
|
3
|
|
||||
Purchased services and other
|
812
|
|
690
|
|
(5
|
)
|
685
|
|
19
|
|
||||
Total operating expenses
|
2,801
|
|
2,734
|
|
(15
|
)
|
2,719
|
|
3
|
|
||||
Operating income
|
$
|
2,040
|
|
$
|
1,861
|
|
$
|
(14
|
)
|
$
|
1,847
|
|
10
|
|
|
For the twelve months ended September 30
|
|||||
(in millions)
|
2017
|
2016
|
||||
Net income as reported
|
$
|
1,805
|
|
$
|
1,534
|
|
Add:
|
|
|
|
|
||
Net interest expense
|
473
|
|
477
|
|
||
Income tax expense
|
599
|
|
547
|
|
||
EBIT
|
2,877
|
|
2,558
|
|
||
Less significant items (pretax):
|
|
|
||||
Charge on hedge roll and de-designation
|
(13
|
)
|
—
|
|
||
Management transition recovery
|
51
|
|
—
|
|
||
Legal settlement charge
|
—
|
|
(25
|
)
|
||
Insurance recovery of legal settlement
|
10
|
|
—
|
|
||
Impact of FX translation on U.S. dollar-denominated debt
|
126
|
|
38
|
|
||
Adjusted EBIT
|
2,703
|
|
2,545
|
|
||
Less:
|
|
|
|
|
||
Net periodic pension and other benefit cost other than current service costs
|
243
|
|
141
|
|
||
Operating lease expense
|
(107
|
)
|
(115
|
)
|
||
Depreciation and amortization
|
(655
|
)
|
(633
|
)
|
||
Adjusted EBITDA
|
$
|
3,222
|
|
$
|
3,152
|
|
|
For the twelve months ended September 30
|
|||||
(in millions, except for ratios)
|
2017
|
2016
|
||||
EBIT
|
$
|
2,877
|
|
$
|
2,558
|
|
Adjusted EBIT
|
2,703
|
|
2,545
|
|
||
Net interest expense
|
473
|
|
477
|
|
||
Interest coverage ratio
|
6.1
|
|
5.4
|
|
||
Adjusted interest coverage ratio
|
5.7
|
|
5.3
|
|
(in millions)
|
2017
|
2016
|
||||
Long-term debt including long term debt maturing within one year as at September 30
|
$
|
8,133
|
|
$
|
8,879
|
|
Less:
|
|
|
||||
Pension plans in deficit
|
(266
|
)
|
(292
|
)
|
||
Net present value of operating leases
(1)
|
(284
|
)
|
(352
|
)
|
||
Cash and cash equivalents
|
142
|
|
103
|
|
||
Adjusted net debt as at September 30
|
$
|
8,541
|
|
$
|
9,420
|
|
(in millions, except for ratios)
|
2017
|
2016
|
||||
Adjusted net debt as at September 30
|
$
|
8,541
|
|
$
|
9,420
|
|
Adjusted EBITDA for the twelve months ended September 30
|
3,222
|
|
3,152
|
|
||
Adjusted net debt to Adjusted EBITDA ratio
|
2.7
|
|
3.0
|
|
Payments due by period (in millions)
|
Total
|
|
2017
|
|
2018 & 2019
|
|
2020 & 2021
|
|
2022 & beyond
|
|
|||||
Contractual commitments
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest on long-term debt and capital lease
|
$
|
11,322
|
|
$
|
90
|
|
$
|
833
|
|
$
|
752
|
|
$
|
9,647
|
|
Long-term debt
|
8,067
|
|
7
|
|
1,199
|
|
414
|
|
6,447
|
|
|||||
Capital leases
|
158
|
|
7
|
|
9
|
|
11
|
|
131
|
|
|||||
Operating lease
(1)
|
369
|
|
24
|
|
124
|
|
80
|
|
141
|
|
|||||
Supplier purchase
|
1,914
|
|
135
|
|
1,050
|
|
170
|
|
559
|
|
|||||
Other long-term liabilities
(2)
|
472
|
|
26
|
|
108
|
|
102
|
|
236
|
|
|||||
Total contractual commitments
|
$
|
22,302
|
|
$
|
289
|
|
$
|
3,323
|
|
$
|
1,529
|
|
$
|
17,161
|
|
Payments due by period (in millions)
|
Total
|
|
2017
|
|
2018 & 2019
|
|
2020 & 2021
|
|
||||
Certain other financial commitments
|
|
|
|
|
||||||||
Letters of credit
|
$
|
314
|
|
$
|
314
|
|
$
|
—
|
|
$
|
—
|
|
Capital commitments
|
316
|
|
181
|
|
122
|
|
13
|
|
||||
Total certain other financial commitments
|
$
|
630
|
|
$
|
495
|
|
$
|
122
|
|
$
|
13
|
|
Key Assumptions
|
Assessments
|
•
Whole and remaining asset lives
|
•
Statistical analysis of historical retirement patterns;
•
Evaluation of management strategy and its impact on operations and the future use of specific property assets;
•
Assessment of technological advances;
•
Engineering estimates of changes in current operations and analysis of historic, current and projected future usage;
•
Additional factors considered for track assets: density of traffic and whether rail is new or has been relaid in a subsequent position;
•
Assessment of policies and practices for the management of assets including maintenance; and
•
Comparison with industry data.
|
•
Salvage values
|
•
Analysis of historical, current and estimated future salvage values.
|
2017
|
Total Number of Shares Purchased
(1)
|
Average Price Paid per Share
(2)
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
Maximum Number of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
|
||||
July 1 to July 31
|
528,500
|
|
193.73
|
|
528,500
|
|
3,172,662
|
|
August 1 to August 31
|
521,200
|
|
191.46
|
|
521,200
|
|
2,651,462
|
|
September 1 to September 30
|
95,700
|
|
193.20
|
|
95,700
|
|
2,555,762
|
|
Ending Balance
|
1,145,400
|
|
196.46
|
|
1,145,400
|
|
N/A
|
|
Exhibit
|
Description
|
|
|
|
|
101.INS**
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
101.SCH**
|
XBRL Taxonomy Extension Schema Document
|
101.CAL**
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.LAB**
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.DEF**
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.PRE**
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
The following financial information from Canadian Pacific Railway Limited’s Quarterly Report on Form 10-Q for the third quarter ended September 30, 2017, formatted in Extensible Business Reporting Language (XBRL) includes: (i) the Interim Consolidated Statements of Income for the third quarters and first nine months ended September 30, 2017 and 2016; (ii) the Consolidated Statements of Comprehensive Income for the third quarters and nine months ended September 30, 2017 and 2016; (iii) the Consolidated Balance Sheets at September 30, 2017, and December 31, 2016; (iv) the Consolidated Statements of Cash Flows for the third quarters and first nine months ended September 30, 2017 and 2016; (v) the Consolidated Statements of Changes in Shareholders’ Equity for the first nine months ended September 30, 2017 and 2016; and (vi) the Notes to Consolidated Financial Statements.
|
CANADIAN PACIFIC RAILWAY LIMITED
|
|
(Registrant)
|
|
By:
|
/s/ NADEEM VELANI
|
|
Nadeem Velani
|
|
Executive Vice-President and Chief Financial Officer
(Principal Financial Officer)
|
1 Year Canadian Pacific Kansas ... Chart |
1 Month Canadian Pacific Kansas ... Chart |
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