☒
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Canada
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98-0355078
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(State or Other Jurisdiction
of Incorporation or Organization)
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(IRS Employer
Identification No.)
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7550 Ogden Dale Road S.E.
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Calgary
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AB
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T2C 4X9
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(Address of Principal Executive Offices)
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(Zip Code)
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Title of Each Class
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Trading Symbol(s)
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Name of Each Exchange on which Registered
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Common Shares, without par value, of
Canadian Pacific Railway Limited |
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CP
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New York Stock Exchange
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Toronto Stock Exchange
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Perpetual 4% Consolidated Debenture Stock of Canadian Pacific Railway Company
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CP/40
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New York Stock Exchange
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BC87
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London Stock Exchange
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Large accelerated filer
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þ
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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PART I
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Page
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Item 1.
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Business
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Item 1A.
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Risk Factors
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
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Information about our Executive Officers
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PART II
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Item 5.
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Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities
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Item 6.
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Selected Financial Data
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Item 7.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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Item 7A.
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Quantitative and Qualitative Disclosures About Market Risk
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Item 8.
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Financial Statements and Supplementary Data
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Item 9.
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Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
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Item 9A.
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Controls and Procedures
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Item 9B.
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Other Information
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PART III
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Item 10.
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Directors, Executive Officers and Corporate Governance
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Item 11.
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Executive Compensation
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence
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Item 14.
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Principal Accounting Fees and Services
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PART IV
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Item 15.
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Exhibits, Financial Statement Schedule
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Item 16.
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Form 10-K Summary
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Signatures
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•
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Provide Service: Providing efficient and consistent transportation solutions for the Company’s customers. “Doing what we say we are going to do” is what drives CP in providing a reliable product with a lower cost operating model. Centralized planning aligned with local execution is bringing the Company closer to the customer and accelerating decision-making.
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•
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Control Costs: Controlling and removing unnecessary costs from the organization, eliminating bureaucracy and continuing to identify productivity enhancements are the keys to success.
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•
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Optimize Assets: Through longer and heavier trains, and improved asset utilization, the Company is moving increased volumes with fewer locomotives and cars while unlocking capacity for future growth potential.
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•
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Operate Safely: Each year, CP safely moves millions of carloads of freight across North America while ensuring the safety of our people and the communities through which we operate. Safety is never to be compromised. CP strives for continuous implementation of state-of-the-art safety technology, safety management systems, and safety culture with our employees to ensure safe, efficient operations across our network.
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•
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Develop People: CP recognizes that none of the other foundations can be achieved without its people. Every CP employee is a railroader and the Company has established a culture focused on our values of accountability, diversity and pride, in everything we do. Coaching and mentoring all employees into becoming leaders will continue to drive CP forward.
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2019 Freight Revenues
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2018 Freight Revenues
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2017 Freight Revenues
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2019 Freight Revenues
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2018 Freight Revenues
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2017 Freight Revenues
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2019 Bulk Revenues
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2018 Bulk Revenues
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2017 Bulk Revenues
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(40% of Freight Revenues)
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(41% of Freight Revenues)
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(44% of Freight Revenues)
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2019 Grain Revenues
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2018 Grain Revenues
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2017 Grain Revenues
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(55% of Bulk Revenues; 22% of Freight Revenues)
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(53% of Bulk Revenues; 22% of Freight Revenues)
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(54% of Bulk Revenues; 24% of Freight Revenues)
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2019 Coal Revenues
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2018 Coal Revenues
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2017 Coal Revenues
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(22% of Bulk Revenues; 9% of Freight Revenues)
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(23% of Bulk Revenues; 9% of Freight Revenues)
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(22% of Bulk Revenues; 10% of Freight Revenues)
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2019 Potash Revenues
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2018 Potash Revenues
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2017 Potash Revenues
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(15% of Bulk Revenues; 6% of Freight Revenues)
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(16% of Bulk Revenues; 7% of Freight Revenues)
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(15% of Bulk Revenues; 6% of Freight Revenues)
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2019 Fertilizers & Sulphur Revenues
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2018 Fertilizers & Sulphur Revenues
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2017 Fertilizers & Sulphur Revenues
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(8% of Bulk Revenues; 3% of Freight Revenues)
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(8% of Bulk Revenues; 3% of Freight Revenues)
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(9% of Bulk Revenues; 4% of Freight Revenues)
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2019 Merchandise Revenues
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2018 Merchandise Revenues
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2017 Merchandise Revenues
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(39% of Freight Revenues)
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(37% of Freight Revenues)
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(35% of Freight Revenues)
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2019 Forest Products Revenues
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2018 Forest Products Revenues
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2017 Forest Products Revenues
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(10% of Merchandise Revenues;
4% of Freight Revenues) |
(11% of Merchandise Revenues;
4% of Freight Revenues) |
(12% of Merchandise Revenues;
4% of Freight Revenues) |
2019 Energy, Chemicals & Plastics Revenues
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2018 Energy, Chemicals & Plastics Revenues
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2017 Energy, Chemicals & Plastics Revenues
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(52% of Merchandise Revenues;
20% of Freight Revenues) |
(47% of Merchandise Revenues;
17% of Freight Revenues) |
(41% of Merchandise Revenues;
14% of Freight Revenues) |
2019 Metals, Minerals & Consumer Products Revenues
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2018 Metals, Minerals & Consumer Products Revenues
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2017 Metals, Minerals & Consumer Products Revenues
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(26% of Merchandise Revenues;
10% of Freight Revenues) |
(30% of Merchandise Revenues;
11% of Freight Revenues) |
(34% of Merchandise Revenues;
12% of Freight Revenues) |
2019 Automotive Revenues
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2018 Automotive Revenues
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2017 Automotive Revenues
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(12% of Merchandise Revenues;
5% of Freight Revenues) |
(12% of Merchandise Revenues;
5% of Freight Revenues) |
(13% of Merchandise Revenues;
5% of Freight Revenues) |
2019 Intermodal Revenues
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2018 Intermodal Revenues
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2017 Intermodal Revenues
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(21% of Freight Revenues)
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(22% of Freight Revenues)
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(21% of Freight Revenues)
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•
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protecting the environment;
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•
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ensuring compliance with applicable environmental laws and regulations;
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•
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promoting awareness and training;
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•
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managing emergencies through preparedness; and
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•
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encouraging involvement, consultation and dialogue with communities along the Company’s rail lines.
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•
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CP employs its own police service that works closely with communities and other law enforcement and government agencies to promote railway safety and infrastructure security. As a railway law enforcement agency, CP Police Services is headquartered in Calgary, with police officers assigned to over 25 field offices responsible for railway police operations in six Canadian provinces and 14 U.S. states. CP Police Services operates on the CP rail network as well as in areas where CP has non-railway operations.
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•
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CP’s Police Communication Centre (“PCC”) operates 24 hours a day. PCC receives reports of emergencies, dangerous or potentially dangerous conditions, and other safety and security issues from our employees, the public, and law enforcement and other government officials. PCC ensures that proper emergency responders are notified as well as governing bodies.
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•
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CP’s Security Management Plan is a comprehensive, risk-based plan modelled on and developed in conjunction with the security plan prepared by the Association of American Railroads post-September 11, 2001. Under this plan, CP routinely examines and prioritizes railway assets, physical and cyber vulnerabilities, and threats, as well as tests and revises measures to provide essential railway security. To address cyber security risks, CP implements mitigation programs that evolve with the changing technology threat environment. The Company has also worked diligently to establish backup sites to ensure a seamless transition in the event that the Company's operating systems are the target of a cyber-attack. By doing so, CP is able to maintain network fluidity.
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•
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CP security efforts consist of a wide variety of measures including employee training, engagement with our customers and training of emergency responders.
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Total
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First main track
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12,683
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Second and other main track
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1,088
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Passing sidings and yard track
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4,353
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Industrial and way track
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779
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Total track miles
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18,903
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Major Classification Yards
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Major Intermodal Terminals
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Transload Facilities
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Vancouver, British Columbia
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Vancouver, British Columbia
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Vancouver, British Columbia
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Calgary, Alberta
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Calgary, Alberta
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Toronto, Ontario
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Edmonton, Alberta
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Edmonton, Alberta
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Hamilton, Ontario
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Moose Jaw, Saskatchewan
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Regina, Saskatchewan
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Lachine, Québec
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Winnipeg, Manitoba
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Winnipeg, Manitoba
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Toronto, Ontario
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Vaughan, Ontario
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Montréal, Québec
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Montréal, Québec
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Chicago, Illinois
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Chicago, Illinois
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St. Paul, Minnesota
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Minneapolis, Minnesota
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Freight cars
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Owned
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Leased
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Total
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Average Age
(in years)
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Box car
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2,594
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250
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2,844
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30
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Covered hopper
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7,607
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9,699
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17,306
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24
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Flat car
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1,461
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770
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2,231
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26
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Gondola
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3,648
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1,440
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5,088
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21
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Intermodal
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1,319
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150
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1,469
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15
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Multi-level autorack
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2,894
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719
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3,613
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26
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Company service car
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2,396
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174
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2,570
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45
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Open top hopper
|
105
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—
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105
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32
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Tank car
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33
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9
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42
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12
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Total freight cars
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22,057
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13,211
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35,268
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25
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Intermodal equipment
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Owned
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Leased
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Total
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Average Age
(in years)
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Containers
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8,804
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—
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8,804
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7
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Chassis
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6,290
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601
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6,891
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11
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Total intermodal equipment
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15,094
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601
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15,695
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9
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Name, Age and Position
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Business Experience
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Keith Creel, 51
President and Chief Executive Officer
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Mr. Creel became President and CEO of CP on January 31, 2017. Previously, he was President and Chief Operating Officer ("COO") from February 5, 2013, to January 30, 2017.
Prior to joining CP, Mr. Creel was Executive Vice-President and COO at CN from January 2010 to February 2013. During his time at CN, Mr. Creel held various positions including Executive Vice-President, Operations, Senior Vice-President Eastern Region, Senior Vice-President Western Region, and Vice-President of the Prairie Division.
Mr. Creel began his railroad career at Burlington Northern Railway in 1992 as an intermodal ramp manager in Birmingham, Alabama. He also spent part of his career at Grand Trunk Western Railroad as a superintendent and general manager, and at Illinois Central Railroad as a trainmaster and director of corridor operations, prior to its merger with CN in 1999.
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Mark Redd, 49
Executive Vice-President, Operations
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Mr. Redd has been Executive Vice-President Operations since September 1, 2019. Before this appointment, he was Senior Vice-President Operations Western Region from February 2, 2017 to August 31, 2019 and Vice-President Operations Western Region from April 20, 2016 to February 1, 2017.
Previous to these roles, he was General Manager Operations U.S. West and General Manager Operations Central Division. He was named CP's 2016 Railroader of the Year. Prior to joining CP in October 2013, Mr. Redd worked for over 20 years at Kansas City Southern Railway where he held a variety of leadership positions in network and field operations. Mr. Redd holds bachelor and Master of Business Administration ("MBA") degrees from the University of Missouri – Kansas City.
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Nadeem Velani, 47
Executive Vice-President and Chief Financial Officer
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Mr. Velani has been Executive Vice-President and CFO of CP since October 17, 2017. Previous to this appointment, he was the Vice-President and CFO of CP from October 19, 2016 to October 16, 2017, Vice-President, Investor Relations from October 28, 2015 and Assistant Vice-President, Investor Relations from March 11, 2013.
Prior to joining CP, Mr. Velani spent 15 years at CN where he worked in a variety of positions in Strategic and Financial Planning, Investor Relations, Sales and Marketing, and the Office of the President and CEO.
Mr. Velani holds a Bachelor of Economics degree from Western University and an MBA in Finance/International Business from McGill University.
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John Brooks, 49
Executive Vice-President and Chief Marketing Officer
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Mr. Brooks has been Executive Vice-President and Chief Marketing Officer ("CMO") of CP since February 14, 2019. Previous to this appointment, he was the Senior Vice-President and CMO of CP from February 14, 2017 to February 13, 2019. He has worked in senior marketing roles at CP since he joined the Company in 2007, most recently as Vice-President, Marketing – Bulk and Intermodal.
Mr. Brooks began his railroading career with UP and later helped start I&M Rail Link, LLC, which was purchased by DM&E in 2002. Mr. Brooks was Vice-President, Marketing at DM&E prior to it being acquired by CP in 2007.
With more than 20 years in the railroading business, Mr. Brooks brings a breadth of experience to the CMO role that is pivotal to CP's continued and future success.
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James Clements, 50
Senior Vice-President, Strategic Planning and Technology Transformation
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Mr. Clements has been Senior Vice-President, Strategic Planning and Technology Transformation since September 1, 2019. Before this appointment, he was the Vice-President, Strategic Planning and Transportation Services of CP since 2014. Mr. Clements has responsibilities that include strategic network issues, Network Service Centre operations and Information Services. In addition, he has responsibility for all of CP’s facilities and real estate across North America.
Mr. Clements has been at CP for 25 years and his previous experience covers a wide range of areas of CP’s business, including car management, finance, joint facilities agreements, logistics, grain marketing and sales in both Canada and the U.S., as well as marketing and sales responsibility for various other lines of business at CP.
He has an MBA in Finance/International Business from McGill University and a Bachelor of Science in Computer Science and Mathematics from McMaster University.
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Jeffrey Ellis, 52
Chief Legal Officer and Corporate Secretary
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Mr. Ellis has been Chief Legal Officer and Corporate Secretary of CP since November 23, 2015. Mr. Ellis is accountable for the overall strategic leadership, oversight and performance of the legal, corporate secretarial, government relations and public affairs functions of CP in Canada and the U.S.
Prior to joining CP in 2015, Mr. Ellis was the U.S. General Counsel at BMO Financial Group. Before joining BMO in 2006, Mr. Ellis was with the law firm of Borden Ladner Gervais LLP in Toronto, Ontario.
Mr. Ellis has Bachelor of Arts and Master of Arts degrees from the University of Toronto, Juris Doctor and Master of Laws degrees from Osgoode Hall Law School, and an MBA from the Richard Ivey School of Business, Western University. Mr. Ellis is a member of the bars of New York, Illinois, Ontario and Alberta.
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Mike Foran, 46
Vice-President, Market Strategy and
Asset Management
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Mr. Foran has been Vice-President, Market Strategy and Asset Management of CP since February 14, 2017. His prior roles with CP include Vice-President Network Transportation from 2014 to 2017, Assistant Vice-President Network Transportation from 2013 to 2014, and General Manager – Asset Management from 2012 to 2013. In over 20 years at CP, Mr. Foran has worked in operations, business development, marketing and general management.
Mr. Foran holds an Executive MBA from the Ivey School of Business at Western University and a Bachelor of Commerce from the University of Calgary.
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Michael Redeker, 59
Vice-President and Chief Information Officer
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Mr. Redeker has been Vice-President and Chief Information Officer ("CIO") of CP since October 15, 2012.
Prior to joining CP, Mr. Redeker was Vice-President and CIO of Alberta Treasury Branch from May 2007 to September 2012. He also spent 11 years at IBM Canada, where he focused on delivering quality information technology services within the financial services industry.
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Laird Pitz, 75
Senior Vice-President and Chief Risk Officer
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Mr. Pitz has been Senior Vice-President and Chief Risk Officer ("CRO") of CP since October 17, 2017. Previously, he was the Vice-President and CRO of CP from October 29, 2014 to October 16, 2017 and the Vice-President, Security and Risk Management of CP from April 2014 to October 2014.
Prior to joining CP, Mr. Pitz was retired from March 2012 to April 2014, and Vice-President, Risk Mitigation of CN from September 2003 to March 2012.
Mr. Pitz, a Vietnam War veteran and former Federal Bureau of Investigation special agent, is a 40-year career professional who has directed strategic and operational risk mitigation, security and crisis management functions for companies operating in a wide range of fields, including defence, logistics and transportation.
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Chad Rolstad, 43
Vice-President, Human Resources and Chief Culture Officer
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Mr. Rolstad has been Vice-President, Human Resources since February 14, 2019 and the Chief Culture Officer since September 1, 2019. Previous to this appointment, he was Assistant Vice-President, Human Resources of CP from August 1, 2018 to February 13, 2019 and Assistant Vice-President, Strategic Procurement of CP from April 10, 2017 to July 31, 2018.
Prior to joining CP, Mr. Rolstad held various leadership positions at BNSF Railway in marketing and operations.
Mr. Rolstad has a Bachelor of Science from the Colorado School of Mines and an MBA from Duke University.
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2019
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Total number of shares purchased(1)
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Average price paid per share(2)
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Total number of shares purchased as part of publicly announced plans or programs
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Maximum number of shares (or units) that may yet be purchased under the plans or programs
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October 1 to October 31
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312,279
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|
$
|
284.65
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|
312,279
|
|
—
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November 1 to November 30
|
—
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|
—
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|
—
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—
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December 1 to December 31
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298,409
|
|
333.96
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|
298,409
|
|
4,502,453
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Ending Balance
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610,688
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$
|
308.74
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|
610,688
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N/A
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(in millions, except per share data, percentage and ratios)
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2019
|
|
2018
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2017
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2016
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2015
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|||||
Financial Performance and Liquidity
|
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||||||||||
Total revenues
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$
|
7,792
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|
$
|
7,316
|
|
$
|
6,554
|
|
$
|
6,232
|
|
$
|
6,712
|
|
Operating income
|
3,124
|
|
2,831
|
|
2,519
|
|
2,411
|
|
2,618
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|
|||||
Adjusted operating income(1)
|
3,124
|
|
2,831
|
|
2,468
|
|
2,411
|
|
2,550
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|
|||||
Net income
|
2,440
|
|
1,951
|
|
2,405
|
|
1,599
|
|
1,352
|
|
|||||
Adjusted income(1)
|
2,290
|
|
2,080
|
|
1,666
|
|
1,549
|
|
1,625
|
|
|||||
Basic earnings per share ("EPS")
|
17.58
|
|
13.65
|
|
16.49
|
|
10.69
|
|
8.47
|
|
|||||
Diluted EPS
|
17.52
|
|
13.61
|
|
16.44
|
|
10.63
|
|
8.40
|
|
|||||
Adjusted diluted EPS(1)
|
16.44
|
|
14.51
|
|
11.39
|
|
10.29
|
|
10.10
|
|
|||||
Dividends declared per share
|
3.1400
|
|
2.5125
|
|
2.1875
|
|
1.8500
|
|
1.4000
|
|
|||||
Cash provided by operating activities
|
2,990
|
|
2,712
|
|
2,182
|
|
2,089
|
|
2,459
|
|
|||||
Cash used in investing activities
|
(1,803
|
)
|
(1,458
|
)
|
(1,295
|
)
|
(1,069
|
)
|
(1,123
|
)
|
|||||
Cash used in financing activities
|
(1,111
|
)
|
(1,542
|
)
|
(700
|
)
|
(1,493
|
)
|
(957
|
)
|
|||||
Free cash(1)
|
1,357
|
|
1,289
|
|
874
|
|
1,007
|
|
1,381
|
|
|||||
Financial Position
|
|
|
|
|
|
||||||||||
Total assets(2)
|
$
|
22,367
|
|
$
|
21,254
|
|
$
|
20,135
|
|
$
|
19,221
|
|
$
|
19,637
|
|
Total long-term debt, including current portion
|
8,757
|
|
8,696
|
|
8,159
|
|
8,684
|
|
8,957
|
|
|||||
Total shareholders' equity
|
7,069
|
|
6,636
|
|
6,437
|
|
4,626
|
|
4,796
|
|
|||||
Financial Ratios
|
|
|
|
|
|
||||||||||
Operating ratio(3)
|
59.9
|
%
|
61.3
|
%
|
61.6
|
%
|
61.3
|
%
|
61.0
|
%
|
|||||
Adjusted operating ratio(1)
|
59.9
|
%
|
61.3
|
%
|
62.4
|
%
|
61.3
|
%
|
62.0
|
%
|
|||||
Return on invested capital ("ROIC")(1)
|
17.9
|
%
|
15.3
|
%
|
20.5
|
%
|
14.4
|
%
|
12.9
|
%
|
|||||
Adjusted ROIC(1)
|
16.9
|
%
|
16.2
|
%
|
14.7
|
%
|
14.0
|
%
|
15.2
|
%
|
|||||
Dividend payout ratio(4)
|
17.9
|
%
|
18.5
|
%
|
13.3
|
%
|
17.4
|
%
|
16.7
|
%
|
|||||
Adjusted dividend payout ratio(1)
|
19.1
|
%
|
17.3
|
%
|
19.2
|
%
|
18.0
|
%
|
13.9
|
%
|
|||||
Long-term debt to Net income ratio(5)
|
3.6
|
|
4.5
|
|
3.4
|
|
5.4
|
|
6.6
|
|
|||||
Adjusted net debt to adjusted EBITDA ratio(1)
|
2.4
|
|
2.6
|
|
2.6
|
|
2.9
|
|
2.8
|
|
(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 in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
(2)
|
Current period amount is as reported in compliance with GAAP following the adoption of Accounting Standards Update ("ASU") 2016-02 under the cumulative effect adjustment transition approach, discussed further in Item 8. Financial Statements and Supplementary Data, Note 2 Accounting changes. The comparative periods' amounts have not been restated and continue to be reported under the accounting standards in effect for those periods.
|
(3)
|
Operating ratio is defined as operating expenses divided by revenues.
|
(4)
|
Dividend payout ratio is defined as dividends declared per share divided by Diluted EPS.
|
(5)
|
Long-term debt to Net income ratio is defined as long-term debt, including long-term debt maturing within one year, divided by Net income.
|
|
Page
|
Executive Summary
|
|
2020 Outlook
|
|
Performance Indicators
|
|
Results of Operations
|
|
Impact of Foreign Exchange on Earnings
|
|
Impact of Fuel Price on Earnings
|
|
Impact of Share Price on Earnings
|
|
Operating Revenues
|
|
Operating Expenses
|
|
Other Income Statement Items
|
|
Liquidity and Capital Resources
|
|
Non-GAAP Measures
|
|
Off-Balance Sheet Arrangements
|
|
Critical Accounting Estimates
|
|
Forward-Looking Statements
|
•
|
Financial performance – In 2019, CP reported Diluted earnings per share ("EPS") of $17.52, a 29% increase from $13.61 in 2018. Adjusted diluted EPS increased to $16.44, a 13% improvement compared to $14.51 in 2018. CP’s commitment to service and operational efficiency produced an Operating ratio of 59.9%. Adjusted diluted EPS is defined and reconciled in Non-GAAP Measures and discussed further in Results of Operations of this Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
•
|
Total revenues – CP’s Total revenues increased by 7% to $7,792 million in 2019 from $7,316 million in 2018, driven primarily by higher freight rates.
|
•
|
Operating performance – CP's average train speed increased by 3% to 22.2 miles per hour and average dwell time decreased by 6% to 6.4 hours in 2019 primarily due to the completion of network infrastructure projects which improved network fluidity. Average train weight remained relatively unchanged at 9,129 tons and average train length increased by 1% to 7,388 feet due to improvements in operating plan efficiency, in each case compared to 2018. These metrics are discussed further in Performance Indicators of this Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
|
|
RTM growth
|
Adjusted diluted EPS(1)
|
Capital expenditures
|
Outlook
|
Mid-single digits
Revised at the end of the third quarter to low-single digits
|
Double-digit Adjusted diluted EPS growth from full-year 2018 Adjusted diluted EPS of $14.51
|
Approximately $1.60 billion
|
Actual outcomes
|
Revenue ton-miles ("RTMs") increased by 171 million, or 0.1%
|
Adjusted diluted EPS growth of 13% to $16.44
|
$1.65 billion
|
|
|
|
|
% Change
|
||||||
For the year ended December 31
|
2019
|
|
2018(1)
|
|
2017(1)
|
|
2019 vs. 2018
|
2018 vs. 2017
|
||
Operations Performance
|
|
|
|
|
|
|||||
Gross ton-miles (“GTMs”) (millions)
|
280,724
|
|
275,362
|
|
252,195
|
|
2
|
|
9
|
|
Train miles (thousands)
|
32,924
|
|
32,312
|
|
30,632
|
|
2
|
|
5
|
|
Average train weight – excluding local traffic (tons)
|
9,129
|
|
9,100
|
|
8,806
|
|
—
|
|
3
|
|
Average train length – excluding local traffic (feet)
|
7,388
|
|
7,313
|
|
7,214
|
|
1
|
|
1
|
|
Average terminal dwell (hours)
|
6.4
|
|
6.8
|
|
6.6
|
|
(6
|
)
|
3
|
|
Average train speed (miles per hour, or "mph")
|
22.2
|
|
21.5
|
|
22.6
|
|
3
|
|
(5
|
)
|
Fuel efficiency (U.S. gallons of locomotive fuel consumed /1,000 GTMs)
|
0.955
|
|
0.953
|
|
0.980
|
|
—
|
|
(3
|
)
|
Total employees (average)
|
13,103
|
|
12,756
|
|
12,083
|
|
3
|
|
6
|
|
Total employees (end of period)
|
12,694
|
|
12,840
|
|
12,215
|
|
(1
|
)
|
5
|
|
Workforce (end of period)
|
12,732
|
|
12,866
|
|
12,294
|
|
(1
|
)
|
5
|
|
Safety Indicators
|
|
|
|
|
|
|||||
FRA personal injuries per 200,000 employee-hours
|
1.42
|
|
1.48
|
|
1.65
|
|
(4
|
)
|
(10
|
)
|
FRA train accidents per million train-miles
|
1.06
|
|
1.10
|
|
0.99
|
|
(4
|
)
|
11
|
|
•
|
network disruptions from labour negotiations in the second quarter of 2018;
|
•
|
harsher weather conditions and increased network disruptions in the first quarter of 2018; and
|
•
|
higher volumes in the second half of the year and increased delays from accelerated track and roadway capital programs in the third quarter of 2018.
|
•
|
network disruptions from labour negotiations in the second quarter of 2018;
|
•
|
harsher weather conditions and increased network disruptions in the first quarter of 2018; and
|
•
|
higher volumes and increased delays from accelerated track and roadway capital programs in the third quarter of 2018.
|
•
|
higher freight rates;
|
•
|
the efficiencies generated from improved operating performance and asset utilization;
|
•
|
the favourable impact of change in FX of $39 million; and
|
•
|
the favourable impact from changes in fuel prices of $38 million.
|
•
|
increased operating expense associated with higher casualty costs in 2019 of $76 million (excluding FX);
|
•
|
higher stock-based compensation of $58 million;
|
•
|
cost inflation; and
|
•
|
increased weather related costs as a result of harsh winter operating conditions in the first quarter of 2019.
|
•
|
cost inflation;
|
•
|
management transition recoveries of $51 million associated with Mr. E. Hunter Harrison's retirement as CEO of CP in 2017; and
|
•
|
higher depreciation and amortization driven primarily from a higher asset base as a result of capital program spending in 2018.
|
•
|
higher Operating income;
|
•
|
FX translation gains on debt and lease liabilities in 2019 compared to FX translation losses on debt in 2018; and
|
•
|
a higher income tax recovery associated with changes in tax rates.
|
•
|
higher freight rates;
|
•
|
the favourable impact of changes in fuel prices; and
|
•
|
the efficiencies generated from improved operating performance and asset utilization.
|
•
|
increased operating expense associated with higher casualty costs in 2019;
|
•
|
higher stock-based compensation; and
|
•
|
cost inflation.
|
•
|
the unfavourable impact of changes in fuel prices;
|
•
|
cost inflation; and
|
•
|
management transition recoveries of $51 million associated with Mr. E. Hunter Harrison's retirement as CEO of CP in 2017.
|
•
|
a higher average invested capital base due to higher Retained earnings from Net income;
|
•
|
higher Income tax expense due to a lower income tax recovery associated with changes in tax rates; and
|
•
|
the unfavourable impact of FX translation losses on debt in 2018 compared to FX translation gains in 2017.
|
Average exchange rates (Canadian/U.S. dollar)
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
|||||
For the year ended – December 31
|
$
|
1.33
|
|
$
|
1.30
|
|
$
|
1.30
|
|
$
|
1.33
|
|
$
|
1.28
|
|
For the three months ended – December 31
|
$
|
1.32
|
|
$
|
1.32
|
|
$
|
1.27
|
|
$
|
1.33
|
|
$
|
1.34
|
|
Exchange rates (Canadian/U.S. dollar)
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
|||||
Beginning of year – January 1
|
$
|
1.36
|
|
$
|
1.25
|
|
$
|
1.34
|
|
$
|
1.38
|
|
$
|
1.16
|
|
Beginning of quarter – April 1
|
$
|
1.33
|
|
$
|
1.29
|
|
$
|
1.33
|
|
$
|
1.30
|
|
$
|
1.27
|
|
Beginning of quarter – July 1
|
$
|
1.31
|
|
$
|
1.32
|
|
$
|
1.30
|
|
$
|
1.29
|
|
$
|
1.25
|
|
Beginning of quarter – October 1
|
$
|
1.32
|
|
$
|
1.29
|
|
$
|
1.25
|
|
$
|
1.31
|
|
$
|
1.33
|
|
End of year – December 31
|
$
|
1.30
|
|
$
|
1.36
|
|
$
|
1.25
|
|
$
|
1.34
|
|
$
|
1.38
|
|
High/Low exchange rates (Canadian/U.S. dollar)
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
|||||
High
|
$
|
1.36
|
|
$
|
1.37
|
|
$
|
1.37
|
|
$
|
1.46
|
|
$
|
1.40
|
|
Low
|
$
|
1.30
|
|
$
|
1.23
|
|
$
|
1.21
|
|
$
|
1.25
|
|
$
|
1.17
|
|
Average Fuel Price (U.S. dollars per U.S. gallon)
|
2019
|
|
2018
|
|
2017(1)
|
|
|||
For the year ended – December 31
|
$
|
2.49
|
|
$
|
2.72
|
|
$
|
2.16
|
|
For the three months ended – December 31
|
$
|
2.53
|
|
$
|
2.71
|
|
$
|
2.43
|
|
Toronto Stock Exchange (in Canadian dollars)
|
2019
|
|
2018
|
|
2017
|
|
|||
Opening Common Share price, as at January 1
|
$
|
242.24
|
|
$
|
229.66
|
|
$
|
191.56
|
|
Ending Common Share price, as at March 31
|
$
|
275.34
|
|
$
|
227.20
|
|
$
|
195.35
|
|
Ending Common Share price, as at June 30
|
$
|
308.43
|
|
$
|
240.92
|
|
$
|
208.65
|
|
Ending Common Share price, as at September 30
|
$
|
294.42
|
|
$
|
273.23
|
|
$
|
209.58
|
|
Ending Common Share price, as at December 31
|
$
|
331.03
|
|
$
|
242.24
|
|
$
|
229.66
|
|
Change in Common Share price for the year ended December 31
|
$
|
88.79
|
|
$
|
12.58
|
|
$
|
38.10
|
|
New York Stock Exchange (in U.S. dollars)
|
2019
|
|
2018
|
|
2017
|
|
|||
Opening Common Share price, as at January 1
|
$
|
177.62
|
|
$
|
182.76
|
|
$
|
142.77
|
|
Ending Common Share price, as at March 31
|
$
|
206.03
|
|
$
|
176.50
|
|
$
|
146.92
|
|
Ending Common Share price, as at June 30
|
$
|
235.24
|
|
$
|
183.02
|
|
$
|
160.81
|
|
Ending Common Share price, as at September 30
|
$
|
222.46
|
|
$
|
211.94
|
|
$
|
168.03
|
|
Ending Common Share price, as at December 31
|
$
|
254.95
|
|
$
|
177.62
|
|
$
|
182.76
|
|
Change in Common Share price for the year ended December 31
|
$
|
77.33
|
|
$
|
(5.14
|
)
|
$
|
39.99
|
|
|
|
|
|
2019 vs. 2018
|
2018 vs. 2017
|
||||||||||||||||
For the year ended December 31
|
2019
|
2018
|
2017
|
Total Change
|
% Change
|
FX Adjusted % Change(2)
|
Total Change
|
% Change
|
FX Adjusted % Change(2)
|
||||||||||||
Freight revenues (in millions)(1)
|
$
|
7,613
|
|
$
|
7,152
|
|
$
|
6,375
|
|
$
|
461
|
|
6
|
5
|
$
|
777
|
|
12
|
|
12
|
|
Non-freight revenues (in millions)
|
179
|
|
164
|
|
179
|
|
15
|
|
9
|
8
|
(15
|
)
|
(8
|
)
|
(8
|
)
|
|||||
Total revenues (in millions)
|
$
|
7,792
|
|
$
|
7,316
|
|
$
|
6,554
|
|
$
|
476
|
|
7
|
5
|
$
|
762
|
|
12
|
|
12
|
|
Carloads (in thousands)
|
2,766.4
|
|
2,739.8
|
|
2,634.2
|
|
26.6
|
|
1
|
N/A
|
105.6
|
|
4
|
|
N/A
|
|
|||||
Revenue ton-miles (in millions)
|
154,378
|
|
154,207
|
|
142,540
|
|
171
|
|
—
|
N/A
|
11,667
|
|
8
|
|
N/A
|
|
|||||
Freight revenue per carload (in dollars)
|
$
|
2,752
|
|
$
|
2,611
|
|
$
|
2,420
|
|
$
|
141
|
|
5
|
4
|
$
|
191
|
|
8
|
|
8
|
|
Freight revenue per revenue ton-mile (in cents)
|
4.93
|
|
4.64
|
|
4.47
|
|
0.29
|
|
6
|
5
|
0.17
|
|
4
|
|
4
|
|
|
|
|
|
2019 vs. 2018
|
2018 vs. 2017
|
|||||||||||||||
For the year ended December 31
|
2019
|
2018
|
2017
|
Total Change
|
% Change
|
FX Adjusted % Change(1)
|
Total Change
|
% Change
|
FX Adjusted % Change(1)
|
|||||||||||
Freight revenues (in millions)
|
$
|
1,684
|
|
$
|
1,566
|
|
$
|
1,532
|
|
$
|
118
|
|
8
|
6
|
$
|
34
|
|
2
|
|
2
|
Carloads (in thousands)
|
431.4
|
|
429.4
|
|
440.7
|
|
2.0
|
|
—
|
N/A
|
(11.3
|
)
|
(3
|
)
|
N/A
|
|||||
Revenue ton-miles (in millions)
|
36,941
|
|
36,856
|
|
37,377
|
|
85
|
|
—
|
N/A
|
(521
|
)
|
(1
|
)
|
N/A
|
|||||
Freight revenue per carload (in dollars)
|
$
|
3,904
|
|
$
|
3,645
|
|
$
|
3,477
|
|
$
|
259
|
|
7
|
6
|
$
|
168
|
|
5
|
|
5
|
Freight revenue per revenue ton-mile (in cents)
|
4.56
|
|
4.25
|
|
4.10
|
|
0.31
|
|
7
|
6
|
0.15
|
|
4
|
|
4
|
|
|
|
|
2019 vs. 2018
|
2018 vs. 2017
|
||||||||||||||||
For the year ended December 31
|
2019
|
2018
|
2017
|
Total Change
|
% Change
|
FX Adjusted % Change(1)
|
Total Change
|
% Change
|
FX Adjusted % Change(1)
|
||||||||||||
Freight revenues (in millions)
|
$
|
682
|
|
$
|
673
|
|
$
|
631
|
|
$
|
9
|
|
1
|
|
1
|
$
|
42
|
|
7
|
|
7
|
Carloads (in thousands)
|
304.3
|
|
304.3
|
|
306.0
|
|
—
|
|
—
|
|
N/A
|
(1.7
|
)
|
(1
|
)
|
N/A
|
|||||
Revenue ton-miles (in millions)
|
21,820
|
|
22,443
|
|
22,660
|
|
(623
|
)
|
(3
|
)
|
N/A
|
(217
|
)
|
(1
|
)
|
N/A
|
|||||
Freight revenue per carload (in dollars)
|
$
|
2,241
|
|
$
|
2,211
|
|
$
|
2,061
|
|
$
|
30
|
|
1
|
|
1
|
$
|
150
|
|
7
|
|
7
|
Freight revenue per revenue ton-mile (in cents)
|
3.13
|
|
3.00
|
|
2.78
|
|
0.13
|
|
4
|
|
4
|
0.22
|
|
8
|
|
8
|
|
|
|
|
2019 vs. 2018
|
2018 vs. 2017
|
||||||||||||||||
For the year ended December 31
|
2019
|
2018
|
2017
|
Total Change
|
% Change
|
FX Adjusted % Change(1)
|
Total Change
|
% Change
|
FX Adjusted % Change(1)
|
||||||||||||
Freight revenues (in millions)
|
$
|
462
|
|
$
|
486
|
|
$
|
411
|
|
$
|
(24
|
)
|
(5
|
)
|
(6
|
)
|
$
|
75
|
|
18
|
19
|
Carloads (in thousands)
|
149.3
|
|
158.4
|
|
137.4
|
|
(9.1
|
)
|
(6
|
)
|
N/A
|
|
21.0
|
|
15
|
N/A
|
|||||
Revenue ton-miles (in millions)
|
17,297
|
|
18,371
|
|
15,751
|
|
(1,074
|
)
|
(6
|
)
|
N/A
|
|
2,620
|
|
17
|
N/A
|
|||||
Freight revenue per carload (in dollars)
|
$
|
3,094
|
|
$
|
3,071
|
|
$
|
2,988
|
|
$
|
23
|
|
1
|
|
—
|
|
$
|
83
|
|
3
|
3
|
Freight revenue per revenue ton-mile (in cents)
|
2.67
|
|
2.65
|
|
2.61
|
|
0.02
|
|
1
|
|
—
|
|
0.04
|
|
2
|
2
|
|
|
|
|
2019 vs. 2018
|
2018 vs. 2017
|
|||||||||||||||||
For the year ended December 31
|
2019
|
2018
|
2017
|
Total Change
|
% Change
|
FX Adjusted % Change(1)
|
Total Change
|
% Change
|
FX Adjusted % Change(1)
|
|||||||||||||
Freight revenues (in millions)
|
$
|
250
|
|
$
|
243
|
|
$
|
241
|
|
$
|
7
|
|
3
|
|
1
|
$
|
2
|
|
1
|
|
1
|
|
Carloads (in thousands)
|
57.0
|
|
58.1
|
|
57.7
|
|
(1.1
|
)
|
(2
|
)
|
N/A
|
0.4
|
|
1
|
|
N/A
|
|
|||||
Revenue ton-miles (in millions)
|
3,846
|
|
4,051
|
|
3,849
|
|
(205
|
)
|
(5
|
)
|
N/A
|
202
|
|
5
|
|
N/A
|
|
|||||
Freight revenue per carload (in dollars)
|
$
|
4,386
|
|
$
|
4,186
|
|
$
|
4,178
|
|
$
|
200
|
|
5
|
|
3
|
$
|
8
|
|
—
|
|
1
|
|
Freight revenue per revenue ton-mile (in cents)
|
6.50
|
|
6.00
|
|
6.27
|
|
0.50
|
|
8
|
|
7
|
(0.27
|
)
|
(4
|
)
|
(4
|
)
|
|
|
|
|
2019 vs. 2018
|
2018 vs. 2017
|
||||||||||||||
For the year ended December 31
|
2019
|
2018
|
2017
|
Total Change
|
% Change
|
FX Adjusted % Change(1)
|
Total Change
|
% Change
|
FX Adjusted % Change(1)
|
||||||||||
Freight revenues (in millions)
|
$
|
304
|
|
$
|
284
|
|
$
|
265
|
|
$
|
20
|
|
7
|
5
|
$
|
19
|
|
7
|
8
|
Carloads (in thousands)
|
71.5
|
|
68.6
|
|
65.8
|
|
2.9
|
|
4
|
N/A
|
2.8
|
|
4
|
N/A
|
|||||
Revenue ton-miles (in millions)
|
4,974
|
|
4,763
|
|
4,484
|
|
211
|
|
4
|
N/A
|
279
|
|
6
|
N/A
|
|||||
Freight revenue per carload (in dollars)
|
$
|
4,252
|
|
$
|
4,139
|
|
$
|
4,036
|
|
$
|
113
|
|
3
|
1
|
$
|
103
|
|
3
|
3
|
Freight revenue per revenue ton-mile (in cents)
|
6.11
|
|
5.96
|
|
5.92
|
|
0.15
|
|
3
|
1
|
0.04
|
|
1
|
1
|
|
|
|
|
2019 vs. 2018
|
2018 vs. 2017
|
||||||||||||||
For the year ended December 31
|
2019
|
2018
|
2017
|
Total Change
|
% Change
|
FX Adjusted % Change(1)
|
Total Change
|
% Change
|
FX Adjusted % Change(1)
|
||||||||||
Freight revenues (in millions)
|
$
|
1,534
|
|
$
|
1,243
|
|
$
|
898
|
|
$
|
291
|
|
23
|
22
|
$
|
345
|
|
38
|
39
|
Carloads (in thousands)
|
358.1
|
|
334.6
|
|
269.5
|
|
23.5
|
|
7
|
N/A
|
65.1
|
|
24
|
N/A
|
|||||
Revenue ton-miles (in millions)
|
29,356
|
|
27,830
|
|
21,327
|
|
1,526
|
|
5
|
N/A
|
6,503
|
|
30
|
N/A
|
|||||
Freight revenue per carload (in dollars)
|
$
|
4,284
|
|
$
|
3,715
|
|
$
|
3,333
|
|
$
|
569
|
|
15
|
14
|
$
|
382
|
|
11
|
12
|
Freight revenue per revenue ton-mile (in cents)
|
5.23
|
|
4.47
|
|
4.21
|
|
0.76
|
|
17
|
15
|
0.26
|
|
6
|
6
|
|
|
|
|
2019 vs. 2018
|
2018 vs. 2017
|
|||||||||||||||||
For the year ended December 31
|
2019
|
2018
|
2017
|
Total Change
|
% Change
|
FX Adjusted % Change(1)
|
Total Change
|
% Change
|
FX Adjusted % Change(1)
|
|||||||||||||
Freight revenues (in millions)
|
$
|
752
|
|
$
|
797
|
|
$
|
739
|
|
$
|
(45
|
)
|
(6
|
)
|
(8
|
)
|
$
|
58
|
|
8
|
|
8
|
Carloads (in thousands)
|
234.3
|
|
252.2
|
|
255.3
|
|
(17.9
|
)
|
(7
|
)
|
N/A
|
|
(3.1
|
)
|
(1
|
)
|
N/A
|
|||||
Revenue ton-miles (in millions)
|
10,684
|
|
11,858
|
|
11,468
|
|
(1,174
|
)
|
(10
|
)
|
N/A
|
|
390
|
|
3
|
|
N/A
|
|||||
Freight revenue per carload (in dollars)
|
$
|
3,210
|
|
$
|
3,161
|
|
$
|
2,894
|
|
$
|
49
|
|
2
|
|
—
|
|
$
|
267
|
|
9
|
|
9
|
Freight revenue per revenue ton-mile (in cents)
|
7.04
|
|
6.72
|
|
6.44
|
|
0.32
|
|
5
|
|
3
|
|
0.28
|
|
4
|
|
4
|
|
|
|
|
2019 vs. 2018
|
2018 vs. 2017
|
||||||||||||||
For the year ended December 31
|
2019
|
2018
|
2017
|
Total Change
|
% Change
|
FX Adjusted % Change(1)
|
Total Change
|
% Change
|
FX Adjusted % Change(1)
|
||||||||||
Freight revenues (in millions)
|
$
|
352
|
|
$
|
322
|
|
$
|
293
|
|
$
|
30
|
|
9
|
7
|
$
|
29
|
|
10
|
11
|
Carloads (in thousands)
|
114.4
|
|
108.3
|
|
105.1
|
|
6.1
|
|
6
|
N/A
|
3.2
|
|
3
|
N/A
|
|||||
Revenue ton-miles (in millions)
|
1,427
|
|
1,347
|
|
1,321
|
|
80
|
|
6
|
N/A
|
26
|
|
2
|
N/A
|
|||||
Freight revenue per carload (in dollars)
|
$
|
3,077
|
|
$
|
2,975
|
|
$
|
2,785
|
|
$
|
102
|
|
3
|
1
|
$
|
190
|
|
7
|
7
|
Freight revenue per revenue ton-mile (in cents)
|
24.67
|
|
23.92
|
|
22.15
|
|
0.75
|
|
3
|
1
|
1.77
|
|
8
|
8
|
|
|
|
|
2019 vs. 2018
|
2018 vs. 2017
|
||||||||||||||||
For the year ended December 31
|
2019
|
2018
|
2017
|
Total Change
|
% Change
|
FX Adjusted % Change(1)
|
Total Change
|
% Change
|
FX Adjusted % Change(1)
|
||||||||||||
Freight revenues (in millions)
|
$
|
1,593
|
|
$
|
1,538
|
|
$
|
1,365
|
|
$
|
55
|
|
4
|
|
3
|
|
$
|
173
|
|
13
|
13
|
Carloads (in thousands)
|
1,046.1
|
|
1,025.9
|
|
996.7
|
|
20.2
|
|
2
|
|
N/A
|
|
29.2
|
|
3
|
N/A
|
|||||
Revenue ton-miles (in millions)
|
28,033
|
|
26,688
|
|
24,303
|
|
1,345
|
|
5
|
|
N/A
|
|
2,385
|
|
10
|
N/A
|
|||||
Freight revenue per carload (in dollars)
|
$
|
1,523
|
|
$
|
1,499
|
|
$
|
1,370
|
|
$
|
24
|
|
2
|
|
1
|
|
$
|
129
|
|
9
|
9
|
Freight revenue per revenue ton-mile (in cents)
|
5.68
|
|
5.76
|
|
5.62
|
|
(0.08
|
)
|
(1
|
)
|
(2
|
)
|
0.14
|
|
2
|
2
|
2019 Operating Expenses
|
2018 Operating Expenses
|
2017 Operating Expenses
|
|
|
|
|
2019 vs. 2018
|
2018 vs. 2017
|
||||||||||||||||||
For the year ended December 31 (in millions)
|
2019
|
|
2018
|
|
2017
|
|
Total Change
|
% Change
|
FX Adjusted % Change(1)
|
Total Change
|
% Change
|
FX Adjusted % Change(1)
|
|||||||||||
Compensation and benefits
|
$
|
1,540
|
|
$
|
1,468
|
|
$
|
1,309
|
|
$
|
72
|
|
5
|
|
4
|
|
$
|
159
|
|
12
|
|
12
|
|
Fuel
|
882
|
|
918
|
|
677
|
|
(36
|
)
|
(4
|
)
|
(6
|
)
|
241
|
|
36
|
|
36
|
|
|||||
Materials
|
210
|
|
201
|
|
190
|
|
9
|
|
4
|
|
4
|
|
11
|
|
6
|
|
6
|
|
|||||
Equipment rents
|
137
|
|
130
|
|
142
|
|
7
|
|
5
|
|
3
|
|
(12
|
)
|
(8
|
)
|
(8
|
)
|
|||||
Depreciation and amortization
|
706
|
|
696
|
|
661
|
|
10
|
|
1
|
|
1
|
|
35
|
|
5
|
|
5
|
|
|||||
Purchased services and other
|
1,193
|
|
1,072
|
|
1,056
|
|
121
|
|
11
|
|
10
|
|
16
|
|
2
|
|
2
|
|
|||||
Total operating expenses
|
$
|
4,668
|
|
$
|
4,485
|
|
$
|
4,035
|
|
$
|
183
|
|
4
|
|
3
|
|
$
|
450
|
|
11
|
|
11
|
|
•
|
increased operating expense associated with higher casualty costs incurred in 2019 of $76 million (excluding FX);
|
•
|
higher stock-based compensation primarily driven by an increase in stock price of $58 million;
|
•
|
cost inflation;
|
•
|
the unfavourable impact of the change in FX of $48 million;
|
•
|
increased weather related costs as a result of harsh winter operating conditions in the first quarter of 2019; and
|
•
|
higher volume variable expenses.
|
•
|
the unfavourable impact from changes in fuel prices of $197 million;
|
•
|
higher volume variable expenses;
|
•
|
cost inflation;
|
•
|
management transition recoveries of $51 million associated with Mr. E. Hunter Harrison's retirement as CEO of CP in 2017;
|
•
|
higher depreciation and amortization due to a higher asset base as a result of the capital program spending in 2018;
|
•
|
a charge associated with a loss contingency of $20 million;
|
•
|
increased weather related costs as a result of harsh winter operating conditions in the first quarter of 2018;
|
•
|
higher stock-based compensation of primarily driven by stronger performance against targets, partially offset by the changes in share price; and
|
•
|
higher incentive compensation.
|
•
|
higher stock-based compensation primarily driven by an increase in stock price of $58 million;
|
•
|
the impact of wage and benefit inflation;
|
•
|
the impact of harsher winter operating conditions driven by operational inefficiencies and increased track labour and overtime;
|
•
|
the unfavourable impact of the change in FX of $11 million; and
|
•
|
higher volume variable expenses as a result of an increase in workload as measured by GTMs.
|
•
|
lower incentive compensation;
|
•
|
lower pension current service cost of $14 million; and
|
•
|
labour efficiencies.
|
•
|
higher volume variable expenses as a result of an increase in workload as measured by GTMs;
|
•
|
management transition recoveries of $51 million associated with Mr. E. Hunter Harrison's retirement as CEO of CP;
|
•
|
the impact of wage and benefit inflation;
|
•
|
higher stock-based compensation of primarily driven by stronger performance against targets, partially offset by the changes in share price;
|
•
|
higher incentive compensation;
|
•
|
an increase in training programs; and
|
•
|
harsher winter operating conditions.
|
•
|
the unfavourable impact from higher fuel prices of $197 million;
|
•
|
an increase in workload, as measured by GTMs; and
|
•
|
a fuel tax recovery received in 2017 that related to prior periods of $8 million.
|
•
|
higher spending on locomotive maintenance and overhauls;
|
•
|
weather related materials;
|
•
|
cost inflation; and
|
•
|
the unfavourable impact of the change in FX of $1 million.
|
|
|
|
|
2019 vs. 2018
|
2018 vs. 2017
|
||||||||||||||
For the year ended December 31 (in millions)
|
2019
|
|
2018
|
|
2017
|
|
Total Change
|
% Change
|
Total Change
|
% Change
|
|||||||||
Support and facilities
|
$
|
278
|
|
$
|
264
|
|
$
|
266
|
|
$
|
14
|
|
5
|
|
$
|
(2
|
)
|
(1
|
)
|
Track and operations
|
278
|
|
268
|
|
251
|
|
10
|
|
4
|
|
17
|
|
7
|
|
|||||
Intermodal
|
222
|
|
221
|
|
197
|
|
1
|
|
—
|
|
24
|
|
12
|
|
|||||
Equipment
|
125
|
|
143
|
|
157
|
|
(18
|
)
|
(13
|
)
|
(14
|
)
|
(9
|
)
|
|||||
Casualty
|
149
|
|
73
|
|
72
|
|
76
|
|
104
|
|
1
|
|
1
|
|
|||||
Property taxes
|
133
|
|
124
|
|
121
|
|
9
|
|
7
|
|
3
|
|
2
|
|
|||||
Other
|
29
|
|
20
|
|
7
|
|
9
|
|
45
|
|
13
|
|
186
|
|
|||||
Land sales
|
(21
|
)
|
(41
|
)
|
(15
|
)
|
20
|
|
(49
|
)
|
(26
|
)
|
173
|
|
|||||
Total Purchased services and other
|
$
|
1,193
|
|
$
|
1,072
|
|
$
|
1,056
|
|
$
|
121
|
|
11
|
|
$
|
16
|
|
2
|
|
•
|
an increase in number and severity of casualty incidents of $73 million (excluding FX), which were the result of difficult operating conditions due to weather in the first half of 2019, reported in Casualty;
|
•
|
lower gains on land sales of $20 million mainly as a result of the sale of the Bass Lake railway line in 2018;
|
•
|
the unfavourable impact of the change in FX of $11 million;
|
•
|
an increase in legal fees, reported in Support and facilities;
|
•
|
higher snow removal and other weather related costs; and
|
•
|
higher property taxes due to higher tax rates.
|
•
|
a decrease in charges associated with contingencies of $10 million, reported in Other;
|
•
|
a decrease in costs for locomotive warranty service agreements due to the insourcing of maintenance of certain locomotives in the company's fleet, reported in Equipment; and
|
•
|
costs related to labour disruptions in the second quarter of 2018, reported in Track and operations.
|
•
|
a charge associated with a loss contingency of $20 million, reported in Other;
|
•
|
higher intermodal expenses related to pickup and delivery, reported in Intermodal; and
|
•
|
higher costs due to winter weather related impacts and costs related to labour disruptions, reported primarily in Track and operations.
|
•
|
higher taxable earnings;
|
•
|
an increase in unrecognized tax benefits of $24 million; and
|
•
|
net income tax recoveries in 2018 of $21 million as a result of the Iowa and Missouri corporate tax rate decreases.
|
For the year ended December 31
(in millions, except for track miles and crossties)
|
2019
|
|
2018
|
|
2017
|
|
|||
Additions to capital
|
|
|
|
||||||
Track and roadway
|
$
|
1,004
|
|
$
|
965
|
|
$
|
958
|
|
Rolling stock and containers
|
426
|
|
401
|
|
198
|
|
|||
Information systems(1)
|
70
|
|
86
|
|
78
|
|
|||
Buildings and other
|
164
|
|
122
|
|
132
|
|
|||
Total – accrued additions to capital
|
1,664
|
|
1,574
|
|
1,366
|
|
|||
Less:
|
|
|
|
||||||
Non-cash transactions
|
17
|
|
23
|
|
26
|
|
|||
Cash invested in additions to properties (per Consolidated Statements of Cash Flows)
|
$
|
1,647
|
|
$
|
1,551
|
|
$
|
1,340
|
|
Track installation capital programs
|
|
|
|
||||||
Track miles of rail laid (miles)
|
246
|
|
281
|
|
313
|
|
|||
Track miles of rail capacity expansion (miles)
|
11
|
|
4
|
|
4
|
|
|||
Crossties installed (thousands)
|
1,122
|
|
1,015
|
|
1,138
|
|
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
|
|
|
|
|
Commercial paper program
|
|
|
|
Standard & Poor's
|
A-2
|
N/A
|
|
Moody's
|
|
P-2
|
N/A
|
•
|
in the fourth quarter, a deferred tax expense of $24 million as a result of a provision for an uncertain tax item of a prior period that unfavourably impacted Diluted EPS by 17 cents;
|
•
|
in the second quarter, a deferred tax recovery of $88 million due to the change in the Alberta provincial corporate income tax rate that favourably impacted Diluted EPS by 63 cents; and
|
•
|
during the course of the year, a net non-cash gain of $94 million ($86 million after deferred tax) due to FX translation of debt and lease liabilities as follows:
|
–
|
in the fourth quarter, a $37 million gain ($32 million after deferred tax) that favourably impacted Diluted EPS by 22 cents;
|
–
|
in the third quarter, a $25 million loss ($22 million after deferred tax) that unfavourably impacted Diluted EPS by 15 cents;
|
–
|
in the second quarter, a $37 million gain ($34 million after deferred tax) that favourably impacted Diluted EPS by 24 cents; and
|
–
|
in the first quarter, a $45 million gain ($42 million after deferred tax) that favourably impacted Diluted EPS by 30 cents.
|
•
|
in the second quarter, a deferred tax recovery of $21 million due to reductions in the Missouri and Iowa state tax rates that favourably impacted Diluted EPS by 15 cents; and
|
•
|
during the course of the year, a net non-cash loss of $168 million ($150 million after deferred tax) due to FX translation of debt as follows:
|
–
|
in the fourth quarter, a $113 million loss ($103 million after deferred tax) that unfavourably impacted Diluted EPS by 72 cents;
|
–
|
in the third quarter, a $38 million gain ($33 million after deferred tax) that favourably impacted Diluted EPS by 23 cents;
|
–
|
in the second quarter, a $44 million loss ($38 million after deferred tax) that unfavourably impacted Diluted EPS by 27 cents; and
|
–
|
in the first quarter, a $49 million loss ($42 million after deferred tax) that unfavourably impacted Diluted EPS by 29 cents.
|
•
|
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 $541 million as a result of changes in income tax rates as follows:
|
–
|
in the fourth quarter, a deferred tax recovery of $527 million, primarily due to the U.S. tax reform, that favourably impacted Diluted EPS by $3.63;
|
–
|
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 $186 million ($162 million after deferred tax) due to FX translation of debt as follows:
|
–
|
in the fourth quarter, a $14 million loss ($12 million after deferred tax) that unfavourably impacted Diluted EPS by 8 cents;
|
–
|
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 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 third quarter, a $68 million gain ($42 million after current tax) related to the sale of Delaware & Hudson Railway Company, Inc. ("D&H") South that favourably impacted Diluted EPS by 26 cents;
|
•
|
in the third quarter, a $47 million charge ($35 million after deferred tax) related to the early redemption premium on notes that unfavourably impacted Diluted EPS by 22 cents;
|
•
|
in the second quarter, a deferred income tax expense of $23 million as a result of the change in the Alberta provincial corporate income tax rate that unfavourably impacted Diluted EPS by 14 cents; and
|
•
|
during the course of the year, a net non-cash loss of $297 million ($257 million after deferred tax) due to FX translation of debt as follows:
|
–
|
in the fourth quarter, a $115 million loss ($100 million after deferred tax) that unfavourably impacted Diluted EPS by 64 cents;
|
–
|
in the third quarter, a $128 million loss ($111 million after deferred tax) that unfavourably impacted Diluted EPS by 69 cents;
|
–
|
in the second quarter, a $10 million gain ($9 million after deferred tax) that favourably impacted Diluted EPS by 5 cents; and
|
–
|
in the first quarter, a $64 million loss ($55 million after deferred tax) that unfavourably impacted Diluted EPS by 34 cents.
|
|
For the year ended December 31
|
||||||||||||||
(in millions)
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
|||||
Net income as reported
|
$
|
2,440
|
|
$
|
1,951
|
|
$
|
2,405
|
|
$
|
1,599
|
|
$
|
1,352
|
|
Less significant items (pre-tax):
|
|
|
|
|
|
||||||||||
Legal settlement charge
|
—
|
|
—
|
|
—
|
|
(25
|
)
|
—
|
|
|||||
Insurance recovery of legal settlement
|
—
|
|
—
|
|
10
|
|
—
|
|
—
|
|
|||||
Charge on hedge roll and de-designation
|
—
|
|
—
|
|
(13
|
)
|
—
|
|
—
|
|
|||||
Gain on sale of D&H South
|
—
|
|
—
|
|
—
|
|
—
|
|
68
|
|
|||||
Management transition recovery
|
—
|
|
—
|
|
51
|
|
—
|
|
—
|
|
|||||
Impact of FX translation gain (loss) on debt and lease liabilities
|
94
|
|
(168
|
)
|
186
|
|
79
|
|
(297
|
)
|
|||||
Early redemption premium on notes
|
—
|
|
—
|
|
—
|
|
—
|
|
(47
|
)
|
|||||
Add:
|
|
|
|
|
|
||||||||||
Tax effect of adjustments(1)
|
8
|
|
(18
|
)
|
36
|
|
4
|
|
(26
|
)
|
|||||
Income tax rate changes
|
(88
|
)
|
(21
|
)
|
(541
|
)
|
—
|
|
23
|
|
|||||
Provision for uncertain tax item
|
24
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Adjusted income
|
$
|
2,290
|
|
$
|
2,080
|
|
$
|
1,666
|
|
$
|
1,549
|
|
$
|
1,625
|
|
|
For the year ended December 31
|
||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
|||||
Diluted earnings per share as reported
|
$
|
17.52
|
|
$
|
13.61
|
|
$
|
16.44
|
|
$
|
10.63
|
|
$
|
8.40
|
|
Less significant items (pre-tax):
|
|
|
|
|
|
||||||||||
Legal settlement charge
|
—
|
|
—
|
|
—
|
|
(0.17
|
)
|
—
|
|
|||||
Insurance recovery of legal settlement
|
—
|
|
—
|
|
0.07
|
|
—
|
|
—
|
|
|||||
Charge on hedge roll and de-designation
|
—
|
|
—
|
|
(0.09
|
)
|
—
|
|
—
|
|
|||||
Gain on sale of D&H South
|
—
|
|
—
|
|
—
|
|
—
|
|
0.42
|
|
|||||
Management transition recovery
|
—
|
|
—
|
|
0.35
|
|
—
|
|
—
|
|
|||||
Impact of FX translation gain (loss) on debt and lease liabilities
|
0.67
|
|
(1.17
|
)
|
1.27
|
|
0.53
|
|
(1.84
|
)
|
|||||
Early redemption premium on notes
|
—
|
|
—
|
|
—
|
|
—
|
|
(0.30
|
)
|
|||||
Add:
|
|
|
|
|
|
||||||||||
Tax effect of adjustments(1)
|
0.05
|
|
(0.12
|
)
|
0.25
|
|
0.02
|
|
(0.16
|
)
|
|||||
Income tax rate changes
|
(0.63
|
)
|
(0.15
|
)
|
(3.70
|
)
|
—
|
|
0.14
|
|
|||||
Provision for uncertain tax item
|
0.17
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Adjusted diluted earnings per share
|
$
|
16.44
|
|
$
|
14.51
|
|
$
|
11.39
|
|
$
|
10.29
|
|
$
|
10.10
|
|
|
For the year ended December 31
|
||||||||||||||
(in millions)
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
|||||
Operating income as reported
|
$
|
3,124
|
|
$
|
2,831
|
|
$
|
2,519
|
|
$
|
2,411
|
|
$
|
2,618
|
|
Less significant items:
|
|
|
|
|
|
||||||||||
Gain on sale of D&H South
|
—
|
|
—
|
|
—
|
|
—
|
|
68
|
|
|||||
Management transition recovery
|
—
|
|
—
|
|
51
|
|
—
|
|
—
|
|
|||||
Adjusted operating income
|
$
|
3,124
|
|
$
|
2,831
|
|
$
|
2,468
|
|
$
|
2,411
|
|
$
|
2,550
|
|
|
For the year ended December 31
|
|||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
Operating ratio as reported
|
59.9
|
%
|
61.3
|
%
|
61.6
|
%
|
61.3
|
%
|
61.0
|
%
|
Less significant items:
|
|
|
|
|
|
|||||
Gain on sale of D&H South
|
—
|
|
—
|
|
—
|
|
—
|
|
(1.0
|
)
|
Management transition recovery
|
—
|
|
—
|
|
(0.8
|
)
|
—
|
|
—
|
|
Adjusted operating ratio
|
59.9
|
%
|
61.3
|
%
|
62.4
|
%
|
61.3
|
%
|
62.0
|
%
|
|
For the year ended December 31
|
||||||||||||||
(in millions, except for percentages)
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
|||||
Operating income
|
$
|
3,124
|
|
$
|
2,831
|
|
$
|
2,519
|
|
$
|
2,411
|
|
$
|
2,618
|
|
Less:
|
|
|
|
|
|
||||||||||
Other (income) expense
|
(89
|
)
|
174
|
|
(178
|
)
|
(45
|
)
|
335
|
|
|||||
Other components of net periodic benefit recovery
|
(381
|
)
|
(384
|
)
|
(274
|
)
|
(167
|
)
|
(70
|
)
|
|||||
Tax(1)
|
806
|
|
749
|
|
111
|
|
675
|
|
728
|
|
|||||
|
$
|
2,788
|
|
$
|
2,292
|
|
$
|
2,860
|
|
$
|
1,948
|
|
$
|
1,625
|
|
Average invested capital
|
$
|
15,579
|
|
$
|
14,964
|
|
$
|
13,961
|
|
$
|
13,532
|
|
$
|
12,561
|
|
ROIC
|
17.9
|
%
|
15.3
|
%
|
20.5
|
%
|
14.4
|
%
|
12.9
|
%
|
|
For the year ended December 31
|
||||||||||||||
(in millions, except for percentages)
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
|||||
Adjusted operating income
|
$
|
3,124
|
|
$
|
2,831
|
|
$
|
2,468
|
|
$
|
2,411
|
|
$
|
2,550
|
|
Less:
|
|
|
|
|
|
||||||||||
Other (income) expense
|
(89
|
)
|
174
|
|
(178
|
)
|
(45
|
)
|
335
|
|
|||||
Other components of net periodic benefit recovery
|
(381
|
)
|
(384
|
)
|
(274
|
)
|
(167
|
)
|
(70
|
)
|
|||||
Significant items (pre-tax):
|
|
|
|
|
|
||||||||||
Legal settlement charge
|
—
|
|
—
|
|
—
|
|
(25
|
)
|
—
|
|
|||||
Insurance recovery of legal settlement
|
—
|
|
—
|
|
10
|
|
—
|
|
—
|
|
|||||
Charge on hedge roll and de-designation
|
—
|
|
—
|
|
(13
|
)
|
—
|
|
—
|
|
|||||
Impact of FX translation gain (loss) on debt and lease liabilities
|
94
|
|
(168
|
)
|
186
|
|
79
|
|
(297
|
)
|
|||||
Early redemption premium on notes
|
—
|
|
—
|
|
—
|
|
—
|
|
(47
|
)
|
|||||
Tax(1)
|
874
|
|
788
|
|
724
|
|
673
|
|
716
|
|
|||||
|
$
|
2,626
|
|
$
|
2,421
|
|
$
|
2,013
|
|
$
|
1,896
|
|
$
|
1,913
|
|
Average invested capital
|
$
|
15,579
|
|
$
|
14,964
|
|
$
|
13,961
|
|
$
|
13,532
|
|
$
|
12,561
|
|
Less impact of periodic significant items net of tax on the above average:
|
|
|
|
|
|
||||||||||
Income tax recovery from income tax rate changes
|
44
|
|
11
|
|
270
|
|
—
|
|
(11
|
)
|
|||||
Provision for uncertain tax item
|
(12
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Legal settlement charge
|
—
|
|
—
|
|
—
|
|
(9
|
)
|
—
|
|
|||||
Insurance recovery of legal settlement
|
—
|
|
—
|
|
4
|
|
—
|
|
—
|
|
|||||
Charge on hedge roll and de-designation
|
—
|
|
—
|
|
(5
|
)
|
—
|
|
—
|
|
|||||
Gain on sale of D&H South
|
—
|
|
—
|
|
—
|
|
—
|
|
21
|
|
|||||
Early redemption premium on notes
|
—
|
|
—
|
|
—
|
|
—
|
|
(18
|
)
|
|||||
Management transition recovery
|
—
|
|
—
|
|
20
|
|
—
|
|
—
|
|
|||||
Adjusted average for the 12 months of total shareholders' equity, long-term debt, long-term debt maturing within one year and short-term borrowing
|
$
|
15,547
|
|
$
|
14,953
|
|
$
|
13,672
|
|
$
|
13,541
|
|
$
|
12,569
|
|
Adjusted ROIC
|
16.9
|
%
|
16.2
|
%
|
14.7
|
%
|
14.0
|
%
|
15.2
|
%
|
|
For the year ended December 31
|
||||||||||||||
(in millions)
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
|||||
Cash provided by operating activities
|
$
|
2,990
|
|
$
|
2,712
|
|
$
|
2,182
|
|
$
|
2,089
|
|
$
|
2,459
|
|
Cash used in investing activities
|
(1,803
|
)
|
(1,458
|
)
|
(1,295
|
)
|
(1,069
|
)
|
(1,123
|
)
|
|||||
Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents
|
(4
|
)
|
11
|
|
(13
|
)
|
(13
|
)
|
45
|
|
|||||
Less:
|
|
|
|
|
|
||||||||||
Settlement of forward starting swaps on debt issuance
|
—
|
|
(24
|
)
|
—
|
|
—
|
|
—
|
|
|||||
Investment in Central Maine & Québec Railway
|
(174
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Free cash
|
$
|
1,357
|
|
$
|
1,289
|
|
$
|
874
|
|
$
|
1,007
|
|
$
|
1,381
|
|
|
|
|
|
2019 vs. 2018
|
|
2018 vs. 2017
|
||||||||||||||||||||
(in millions)
|
Reported 2019
|
|
Reported 2018
|
|
Reported 2017
|
|
Variance
due to FX |
FX Adjusted 2018
|
FX Adj. % Change
|
|
Variance
due to FX |
FX Adjusted 2017
|
FX Adj. % Change
|
|||||||||||||
Freight revenues by line of business
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Grain
|
$
|
1,684
|
|
$
|
1,566
|
|
$
|
1,532
|
|
$
|
19
|
|
$
|
1,585
|
|
6
|
|
|
$
|
—
|
|
$
|
1,532
|
|
2
|
|
Coal
|
682
|
|
673
|
|
631
|
|
2
|
|
675
|
|
1
|
|
|
—
|
|
631
|
|
7
|
|
|||||||
Potash
|
462
|
|
486
|
|
411
|
|
6
|
|
492
|
|
(6
|
)
|
|
(1
|
)
|
410
|
|
19
|
|
|||||||
Fertilizers and sulphur
|
250
|
|
243
|
|
241
|
|
4
|
|
247
|
|
1
|
|
|
(1
|
)
|
240
|
|
1
|
|
|||||||
Forest products
|
304
|
|
284
|
|
265
|
|
5
|
|
289
|
|
5
|
|
|
(1
|
)
|
264
|
|
8
|
|
|||||||
Energy, chemicals and plastics
|
1,534
|
|
1,243
|
|
898
|
|
17
|
|
1,260
|
|
22
|
|
|
(1
|
)
|
897
|
|
39
|
|
|||||||
Metals, minerals, and consumer products
|
752
|
|
797
|
|
739
|
|
16
|
|
813
|
|
(8
|
)
|
|
(1
|
)
|
738
|
|
8
|
|
|||||||
Automotive
|
352
|
|
322
|
|
293
|
|
7
|
|
329
|
|
7
|
|
|
(2
|
)
|
291
|
|
11
|
|
|||||||
Intermodal
|
1,593
|
|
1,538
|
|
1,365
|
|
10
|
|
1,548
|
|
3
|
|
|
(1
|
)
|
1,364
|
|
13
|
|
|||||||
Freight revenues
|
7,613
|
|
7,152
|
|
6,375
|
|
86
|
|
7,238
|
|
5
|
|
|
(8
|
)
|
6,367
|
|
12
|
|
|||||||
Non-freight revenues
|
179
|
|
164
|
|
179
|
|
1
|
|
165
|
|
8
|
|
|
—
|
|
179
|
|
(8
|
)
|
|||||||
Total revenues
|
$
|
7,792
|
|
$
|
7,316
|
|
$
|
6,554
|
|
$
|
87
|
|
$
|
7,403
|
|
5
|
|
|
$
|
(8
|
)
|
$
|
6,546
|
|
12
|
|
|
|
|
|
2019 vs. 2018
|
|
2018 vs. 2017
|
||||||||||||||||||||
(in millions)
|
Reported 2019
|
|
Reported 2018
|
|
Reported 2017
|
|
Variance
due to FX |
FX Adjusted 2018
|
FX Adj. % Change
|
|
Variance
due to FX |
FX Adjusted 2017
|
FX Adj. % Change
|
|||||||||||||
Compensation and benefits
|
$
|
1,540
|
|
$
|
1,468
|
|
$
|
1,309
|
|
$
|
11
|
|
$
|
1,479
|
|
4
|
|
|
$
|
(1
|
)
|
$
|
1,308
|
|
12
|
|
Fuel
|
882
|
|
918
|
|
677
|
|
18
|
|
936
|
|
(6
|
)
|
|
—
|
|
677
|
|
36
|
|
|||||||
Materials
|
210
|
|
201
|
|
190
|
|
1
|
|
202
|
|
4
|
|
|
—
|
|
190
|
|
6
|
|
|||||||
Equipment rents
|
137
|
|
130
|
|
142
|
|
3
|
|
133
|
|
3
|
|
|
—
|
|
142
|
|
(8
|
)
|
|||||||
Depreciation and amortization
|
706
|
|
696
|
|
661
|
|
4
|
|
700
|
|
1
|
|
|
—
|
|
661
|
|
5
|
|
|||||||
Purchased services and other
|
1,193
|
|
1,072
|
|
1,056
|
|
11
|
|
1,083
|
|
10
|
|
|
(3
|
)
|
1,053
|
|
2
|
|
|||||||
Total operating expenses
|
$
|
4,668
|
|
$
|
4,485
|
|
$
|
4,035
|
|
$
|
48
|
|
$
|
4,533
|
|
3
|
|
|
$
|
(4
|
)
|
$
|
4,031
|
|
11
|
|
|
For the year ended December 31
|
||||||||||||||
(in dollars, except for percentages)
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
|||||
Dividends declared per share
|
$
|
3.1400
|
|
$
|
2.5125
|
|
$
|
2.1875
|
|
$
|
1.8500
|
|
$
|
1.4000
|
|
Diluted EPS
|
17.52
|
|
13.61
|
|
16.44
|
|
10.63
|
|
8.40
|
|
|||||
Dividend payout ratio
|
17.9
|
%
|
18.5
|
%
|
13.3
|
%
|
17.4
|
%
|
16.7
|
%
|
|
For the year ended December 31
|
||||||||||||||
(in dollars, except for percentages)
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
|||||
Dividends declared per share
|
$
|
3.1400
|
|
$
|
2.5125
|
|
$
|
2.1875
|
|
$
|
1.8500
|
|
$
|
1.4000
|
|
Adjusted diluted EPS
|
16.44
|
|
14.51
|
|
11.39
|
|
10.29
|
|
10.10
|
|
|||||
Adjusted dividend payout ratio
|
19.1
|
%
|
17.3
|
%
|
19.2
|
%
|
18.0
|
%
|
13.9
|
%
|
(in millions, except for ratios)
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
|||||
Long-term debt including long-term debt maturing within one year as at December 31
|
$
|
8,757
|
|
$
|
8,696
|
|
$
|
8,159
|
|
$
|
8,684
|
|
$
|
8,957
|
|
Net income for the year ended December 31
|
2,440
|
|
1,951
|
|
2,405
|
|
1,599
|
|
1,352
|
|
|||||
Long-term debt to Net income ratio
|
3.6
|
|
4.5
|
|
3.4
|
|
5.4
|
|
6.6
|
|
(in millions)
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
|||||
Long-term debt including long-term debt maturing within one year as at December 31
|
$
|
8,757
|
|
$
|
8,696
|
|
$
|
8,159
|
|
$
|
8,684
|
|
$
|
8,957
|
|
Add:
|
|
|
|
|
|
||||||||||
Pension plans deficit(1)
|
294
|
|
266
|
|
278
|
|
273
|
|
295
|
|
|||||
Operating lease liabilities(2)
|
354
|
|
387
|
|
281
|
|
361
|
|
439
|
|
|||||
Less:
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
133
|
|
61
|
|
338
|
|
164
|
|
650
|
|
|||||
Adjusted net debt as at December 31
|
$
|
9,272
|
|
$
|
9,288
|
|
$
|
8,380
|
|
$
|
9,154
|
|
$
|
9,041
|
|
|
For the year ended December 31
|
||||||||||||||
(in millions)
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
|||||
Net income as reported
|
$
|
2,440
|
|
$
|
1,951
|
|
$
|
2,405
|
|
$
|
1,599
|
|
$
|
1,352
|
|
Add:
|
|
|
|
|
|
||||||||||
Net interest expense
|
448
|
|
453
|
|
473
|
|
471
|
|
394
|
|
|||||
Income tax expense
|
706
|
|
637
|
|
93
|
|
553
|
|
607
|
|
|||||
EBIT
|
3,594
|
|
3,041
|
|
2,971
|
|
2,623
|
|
2,353
|
|
|||||
Less significant items (pre-tax):
|
|
|
|
|
|
||||||||||
Legal settlement charge
|
—
|
|
—
|
|
—
|
|
(25
|
)
|
—
|
|
|||||
Insurance recovery of legal settlement
|
—
|
|
—
|
|
10
|
|
—
|
|
—
|
|
|||||
Charge on hedge roll and de-designation
|
—
|
|
—
|
|
(13
|
)
|
—
|
|
—
|
|
|||||
Gain on sale of D&H South
|
—
|
|
—
|
|
—
|
|
—
|
|
68
|
|
|||||
Management transition recovery
|
—
|
|
—
|
|
51
|
|
—
|
|
—
|
|
|||||
Impact of FX translation gain (loss) on debt and lease liabilities
|
94
|
|
(168
|
)
|
186
|
|
79
|
|
(297
|
)
|
|||||
Early redemption premium on notes
|
—
|
|
—
|
|
—
|
|
—
|
|
(47
|
)
|
|||||
Adjusted EBIT
|
3,500
|
|
3,209
|
|
2,737
|
|
2,569
|
|
2,629
|
|
|||||
Add:
|
|
|
|
|
|
||||||||||
Operating lease expense
|
83
|
|
97
|
|
104
|
|
111
|
|
127
|
|
|||||
Depreciation and amortization
|
706
|
|
696
|
|
661
|
|
640
|
|
595
|
|
|||||
Less:
|
|
|
|
|
|
||||||||||
Other components of net periodic benefit recovery
|
381
|
|
384
|
|
274
|
|
167
|
|
70
|
|
|||||
Adjusted EBITDA
|
$
|
3,908
|
|
$
|
3,618
|
|
$
|
3,228
|
|
$
|
3,153
|
|
$
|
3,281
|
|
(in millions, except for ratios)
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
|||||
Adjusted net debt as at December 31
|
$
|
9,272
|
|
$
|
9,288
|
|
$
|
8,380
|
|
$
|
9,154
|
|
$
|
9,041
|
|
Adjusted EBITDA for the year ended December 31
|
3,908
|
|
3,618
|
|
3,228
|
|
3,153
|
|
3,281
|
|
|||||
Adjusted net debt to Adjusted EBITDA ratio
|
2.4
|
|
2.6
|
|
2.6
|
|
2.9
|
|
2.8
|
|
Payments due by period (in millions)
|
Total
|
|
2020
|
|
2021 & 2022
|
|
2023 & 2024
|
|
Thereafter
|
|
|||||
Contractual commitments
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest on long-term debt and finance leases
|
$
|
11,117
|
|
$
|
431
|
|
$
|
804
|
|
$
|
690
|
|
$
|
9,192
|
|
Long-term debt
|
8,692
|
|
592
|
|
842
|
|
568
|
|
6,690
|
|
|||||
Finance leases
|
151
|
|
7
|
|
113
|
|
13
|
|
18
|
|
|||||
Operating leases(1)
|
395
|
|
80
|
|
106
|
|
79
|
|
130
|
|
|||||
Supplier purchase
|
3,090
|
|
699
|
|
1,295
|
|
727
|
|
369
|
|
|||||
Other long-term liabilities(2)
|
495
|
|
53
|
|
102
|
|
99
|
|
241
|
|
|||||
Total contractual commitments
|
$
|
23,940
|
|
$
|
1,862
|
|
$
|
3,262
|
|
$
|
2,176
|
|
$
|
16,640
|
|
Payments due by period (in millions)
|
Total
|
|
2020
|
|
2021 & 2022
|
|
2023 & 2024
|
|
Thereafter
|
|
|||||
Certain other financial commitments
|
|
|
|
|
|
||||||||||
Letters of credit
|
$
|
80
|
|
$
|
80
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Capital commitments
|
664
|
|
332
|
|
200
|
|
61
|
|
71
|
|
|||||
Total certain other financial commitments
|
$
|
744
|
|
$
|
412
|
|
$
|
200
|
|
$
|
61
|
|
$
|
71
|
|
|
2019
|
2018
|
||||||||||||||||
(in millions of Canadian dollars)
|
Current service cost
|
|
Other components
|
|
Total
|
|
Current service cost
|
|
Other components
|
|
Total
|
|
||||||
Defined benefit pensions
|
$
|
107
|
|
$
|
(414
|
)
|
$
|
(307
|
)
|
$
|
120
|
|
$
|
(405
|
)
|
$
|
(285
|
)
|
Defined contribution pensions
|
11
|
|
—
|
|
11
|
|
10
|
|
—
|
|
10
|
|
||||||
Post-retirement benefits
|
4
|
|
16
|
|
20
|
|
5
|
|
18
|
|
23
|
|
||||||
Self-insured workers' compensation and long-term disability benefits
|
7
|
|
17
|
|
24
|
|
7
|
|
3
|
|
10
|
|
||||||
All plans
|
$
|
129
|
|
$
|
(381
|
)
|
$
|
(252
|
)
|
$
|
142
|
|
$
|
(384
|
)
|
$
|
(242
|
)
|
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 re-laid 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.
|
|
Page
|
|
|
Report of Independent Registered Public Accounting Firm
|
|
|
|
Consolidated Statements of Income
|
|
For the Year Ended December 31, 2019, 2018, and 2017
|
|
|
|
Consolidated Statements of Comprehensive Income
|
|
For the Year Ended December 31, 2019, 2018, and 2017
|
|
|
|
Consolidated Balance Sheets
|
|
As at December 31, 2019 and 2018
|
|
|
|
Consolidated Statements of Cash Flows
|
|
For the Year Ended December 31, 2019, 2018, and 2017
|
|
|
|
Consolidated Statements of Changes in Shareholders' Equity
|
|
For the Year Ended December 31, 2019, 2018, and 2017
|
|
|
|
Notes to Consolidated Financial Statements
|
•
|
Evaluated the effectiveness of controls over self-constructed assets, including those over the capitalization of direct cost additions to self-constructed assets.
|
•
|
Selected a sample of direct costs, and obtained evidence to support the capitalized additions to self-constructed assets and assessed whether these expenditures met the capitalization criteria under US GAAP.
|
•
|
Evaluated the effectiveness of controls over defined benefit pension plans, including those over the determination of the discount rate and the expected return on fund assets.
|
•
|
With the assistance of an actuarial specialist, we evaluated the reasonableness of the discount rate by:
|
–
|
Assessing the methodology used in management’s determination of the discount rate,
|
–
|
Testing the underlying source information, and
|
–
|
Developing a range of independent estimates and comparing those to the discount rate selected by management.
|
•
|
With the assistance of an actuarial specialist, we evaluated the reasonableness of the expected return on fund assets by:
|
–
|
Assessing the methodology used in management’s determination of the expected return on fund assets,
|
–
|
Testing the underlying source information, and
|
–
|
Comparing management’s assumptions to historical data and available market trends.
|
•
|
Evaluated management’s ability to accurately forecast the discount rate and expected return on fund assets by comparing actual results to management’s historical forecasts.
|
Year ended December 31 (in millions of Canadian dollars, except per share data)
|
2019
|
|
2018
|
|
2017
|
|
|||
Revenues (Note 3)
|
|
|
|
||||||
Freight
|
$
|
7,613
|
|
$
|
7,152
|
|
$
|
6,375
|
|
Non-freight
|
179
|
|
164
|
|
179
|
|
|||
Total revenues
|
7,792
|
|
7,316
|
|
6,554
|
|
|||
Operating expenses
|
|
|
|
||||||
Compensation and benefits (Note 23, 24)
|
1,540
|
|
1,468
|
|
1,309
|
|
|||
Fuel
|
882
|
|
918
|
|
677
|
|
|||
Materials
|
210
|
|
201
|
|
190
|
|
|||
Equipment rents
|
137
|
|
130
|
|
142
|
|
|||
Depreciation and amortization
|
706
|
|
696
|
|
661
|
|
|||
Purchased services and other (Note 12)
|
1,193
|
|
1,072
|
|
1,056
|
|
|||
Total operating expenses
|
4,668
|
|
4,485
|
|
4,035
|
|
|||
Operating income
|
3,124
|
|
2,831
|
|
2,519
|
|
|||
Less:
|
|
|
|
||||||
Other (income) expense (Note 4)
|
(89
|
)
|
174
|
|
(178
|
)
|
|||
Other components of net periodic benefit recovery (Note 23)
|
(381
|
)
|
(384
|
)
|
(274
|
)
|
|||
Net interest expense (Note 5)
|
448
|
|
453
|
|
473
|
|
|||
Income before income tax expense
|
3,146
|
|
2,588
|
|
2,498
|
|
|||
Income tax expense (Note 6)
|
706
|
|
637
|
|
93
|
|
|||
Net income
|
$
|
2,440
|
|
$
|
1,951
|
|
$
|
2,405
|
|
Earnings per share (Note 7)
|
|
|
|
||||||
Basic earnings per share
|
$
|
17.58
|
|
$
|
13.65
|
|
$
|
16.49
|
|
Diluted earnings per share
|
$
|
17.52
|
|
$
|
13.61
|
|
$
|
16.44
|
|
Weighted-average number of shares (millions) (Note 7)
|
|
|
|
||||||
Basic
|
138.8
|
|
142.9
|
|
145.9
|
|
|||
Diluted
|
139.3
|
|
143.3
|
|
146.3
|
|
Year ended December 31 (in millions of Canadian dollars)
|
2019
|
|
2018
|
|
2017
|
|
|||
Net income
|
$
|
2,440
|
|
$
|
1,951
|
|
$
|
2,405
|
|
Net gain (loss) in foreign currency translation adjustments, net of hedging activities
|
37
|
|
(60
|
)
|
24
|
|
|||
Change in derivatives designated as cash flow hedges
|
10
|
|
38
|
|
19
|
|
|||
Change in pension and post-retirement defined benefit plans
|
(661
|
)
|
(449
|
)
|
80
|
|
|||
Other comprehensive (loss) income before income taxes
|
(614
|
)
|
(471
|
)
|
123
|
|
|||
Income tax recovery (expense) on above items
|
135
|
|
169
|
|
(65
|
)
|
|||
Other comprehensive (loss) income (Note 8)
|
(479
|
)
|
(302
|
)
|
58
|
|
|||
Comprehensive income
|
$
|
1,961
|
|
$
|
1,649
|
|
$
|
2,463
|
|
As at December 31 (in millions of Canadian dollars, except Common Shares)
|
2019
|
|
2018
|
|
||
Assets
|
|
|
||||
Current assets
|
|
|
||||
Cash and cash equivalents
|
$
|
133
|
|
$
|
61
|
|
Accounts receivable, net (Note 10)
|
805
|
|
815
|
|
||
Materials and supplies
|
182
|
|
173
|
|
||
Other current assets
|
90
|
|
68
|
|
||
|
1,210
|
|
1,117
|
|
||
Investments (Note 13)
|
341
|
|
203
|
|
||
Properties (Note 14, 21)
|
19,156
|
|
18,418
|
|
||
Goodwill and intangible assets (Note 11, 15)
|
206
|
|
202
|
|
||
Pension asset (Note 23)
|
1,003
|
|
1,243
|
|
||
Other assets (Note 16, 21)
|
451
|
|
71
|
|
||
Total assets
|
$
|
22,367
|
|
$
|
21,254
|
|
Liabilities and shareholders’ equity
|
|
|
||||
Current liabilities
|
|
|
||||
Accounts payable and accrued liabilities (Note 17, 21)
|
$
|
1,693
|
|
$
|
1,449
|
|
Long-term debt maturing within one year (Note 18, 19, 21)
|
599
|
|
506
|
|
||
|
2,292
|
|
1,955
|
|
||
Pension and other benefit liabilities (Note 23)
|
785
|
|
718
|
|
||
Other long-term liabilities (Note 20, 21)
|
562
|
|
237
|
|
||
Long-term debt (Note 18, 19, 21)
|
8,158
|
|
8,190
|
|
||
Deferred income taxes (Note 6)
|
3,501
|
|
3,518
|
|
||
Total liabilities
|
15,298
|
|
14,618
|
|
||
Shareholders’ equity
|
|
|
||||
Share capital (Note 22)
Authorized unlimited Common Shares without par value. Issued and outstanding are 137.0 million and 140.5 million as at December 31, 2019 and 2018, respectively. |
1,993
|
|
2,002
|
|
||
Authorized unlimited number of first and second preferred shares; none outstanding.
|
|
|
||||
Additional paid-in capital
|
48
|
|
42
|
|
||
Accumulated other comprehensive loss (Note 8)
|
(2,522
|
)
|
(2,043
|
)
|
||
Retained earnings
|
7,550
|
|
6,635
|
|
||
|
7,069
|
|
6,636
|
|
||
Total liabilities and shareholders’ equity
|
$
|
22,367
|
|
$
|
21,254
|
|
Approved on behalf of the Board:
|
|
|
|
|
|
|
|
|
|
|
/s/ ISABELLE COURVILLE
|
|
|
/s/ JANE L. PEVERETT
|
|||
|
|
Isabelle Courville, Director,
|
|
|
Jane L. Peverett, Director,
|
|||
|
|
Chair of the Board
|
|
|
Chair of the Audit and Finance Committee
|
Year ended December 31 (in millions of Canadian dollars)
|
2019
|
|
2018
|
|
2017
|
|
|||
Operating activities
|
|
|
|
||||||
Net income
|
$
|
2,440
|
|
$
|
1,951
|
|
$
|
2,405
|
|
Reconciliation of net income to cash provided by operating activities:
|
|
|
|
||||||
Depreciation and amortization
|
706
|
|
696
|
|
661
|
|
|||
Deferred income taxes (Note 6)
|
181
|
|
256
|
|
(210
|
)
|
|||
Pension recovery and funding (Note 23)
|
(360
|
)
|
(321
|
)
|
(237
|
)
|
|||
Foreign exchange (gain) loss on debt and lease liabilities (Note 4)
|
(94
|
)
|
168
|
|
(186
|
)
|
|||
Settlement of forward starting swaps on debt issuance (Note 18, 19)
|
—
|
|
(24
|
)
|
—
|
|
|||
Other operating activities, net
|
143
|
|
(79
|
)
|
(113
|
)
|
|||
Change in non-cash working capital balances related to operations (Note 9)
|
(26
|
)
|
65
|
|
(138
|
)
|
|||
Cash provided by operating activities
|
2,990
|
|
2,712
|
|
2,182
|
|
|||
Investing activities
|
|
|
|
||||||
Additions to properties
|
(1,647
|
)
|
(1,551
|
)
|
(1,340
|
)
|
|||
Investment in Central Maine & Québec Railway (Note 11)
|
(174
|
)
|
—
|
|
—
|
|
|||
Proceeds from sale of properties and other assets (Note 12)
|
26
|
|
78
|
|
42
|
|
|||
Other
|
(8
|
)
|
15
|
|
3
|
|
|||
Cash used in investing activities
|
(1,803
|
)
|
(1,458
|
)
|
(1,295
|
)
|
|||
Financing activities
|
|
|
|
||||||
Dividends paid
|
(412
|
)
|
(348
|
)
|
(310
|
)
|
|||
Issuance of CP Common Shares (Note 22)
|
26
|
|
24
|
|
45
|
|
|||
Purchase of CP Common shares (Note 22)
|
(1,134
|
)
|
(1,103
|
)
|
(381
|
)
|
|||
Issuance of long-term debt, excluding commercial paper (Note 18)
|
397
|
|
638
|
|
—
|
|
|||
Repayment of long-term debt, excluding commercial paper (Note 18)
|
(500
|
)
|
(753
|
)
|
(32
|
)
|
|||
Net issuance of commercial paper (Note 18)
|
524
|
|
—
|
|
—
|
|
|||
Settlement of forward starting swaps on de-designation (Note 19)
|
—
|
|
—
|
|
(22
|
)
|
|||
Other
|
(12
|
)
|
—
|
|
—
|
|
|||
Cash used in financing activities
|
(1,111
|
)
|
(1,542
|
)
|
(700
|
)
|
|||
Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents
|
(4
|
)
|
11
|
|
(13
|
)
|
|||
Cash position
|
|
|
|
||||||
Increase (decrease) in cash and cash equivalents
|
72
|
|
(277
|
)
|
174
|
|
|||
Cash and cash equivalents at beginning of year
|
61
|
|
338
|
|
164
|
|
|||
Cash and cash equivalents at end of year
|
$
|
133
|
|
$
|
61
|
|
$
|
338
|
|
|
|
|
|
||||||
Supplemental disclosures of cash flow information:
|
|
|
|
||||||
Income taxes paid
|
$
|
506
|
|
$
|
318
|
|
$
|
425
|
|
Interest paid
|
$
|
444
|
|
$
|
463
|
|
$
|
475
|
|
(in millions of Canadian dollars, except per share data)
|
Share
capital |
|
Additional
paid-in capital |
|
Accumulated
other comprehensive loss |
|
Retained
earnings |
|
Total
shareholders’ equity |
|
|||||
Balance at December 31, 2016
|
$
|
2,002
|
|
$
|
52
|
|
$
|
(1,799
|
)
|
$
|
4,371
|
|
$
|
4,626
|
|
Net income
|
—
|
|
—
|
|
—
|
|
2,405
|
|
2,405
|
|
|||||
Other comprehensive income (Note 8)
|
—
|
|
—
|
|
58
|
|
—
|
|
58
|
|
|||||
Dividends declared ($2.1875 per share)
|
—
|
|
—
|
|
—
|
|
(319
|
)
|
(319
|
)
|
|||||
Effect of stock-based compensation expense
|
—
|
|
3
|
|
—
|
|
—
|
|
3
|
|
|||||
CP Common Shares repurchased (Note 22)
|
(27
|
)
|
—
|
|
—
|
|
(354
|
)
|
(381
|
)
|
|||||
Shares issued under stock option plan (Note 22)
|
57
|
|
(12
|
)
|
—
|
|
—
|
|
45
|
|
|||||
Balance at December 31, 2017
|
2,032
|
|
43
|
|
(1,741
|
)
|
6,103
|
|
6,437
|
|
|||||
Net income
|
—
|
|
—
|
|
—
|
|
1,951
|
|
1,951
|
|
|||||
Other comprehensive loss (Note 8)
|
—
|
|
—
|
|
(302
|
)
|
—
|
|
(302
|
)
|
|||||
Dividends declared ($2.5125 per share)
|
—
|
|
—
|
|
—
|
|
(358
|
)
|
(358
|
)
|
|||||
Effect of stock-based compensation expense
|
—
|
|
11
|
|
—
|
|
—
|
|
11
|
|
|||||
CP Common Shares repurchased (Note 22)
|
(66
|
)
|
—
|
|
—
|
|
(1,061
|
)
|
(1,127
|
)
|
|||||
Shares issued under stock option plan (Note 22)
|
36
|
|
(12
|
)
|
—
|
|
—
|
|
24
|
|
|||||
Balance at December 31, 2018
|
2,002
|
|
42
|
|
(2,043
|
)
|
6,635
|
|
6,636
|
|
|||||
Impact of accounting change (Note 2)
|
—
|
|
—
|
|
—
|
|
(5
|
)
|
(5
|
)
|
|||||
Balance at January 1, 2019, as restated
|
2,002
|
|
42
|
|
(2,043
|
)
|
6,630
|
|
6,631
|
|
|||||
Net income
|
—
|
|
—
|
|
—
|
|
2,440
|
|
2,440
|
|
|||||
Other comprehensive loss (Note 8)
|
—
|
|
—
|
|
(479
|
)
|
—
|
|
(479
|
)
|
|||||
Dividends declared ($3.1400 per share)
|
—
|
|
—
|
|
—
|
|
(434
|
)
|
(434
|
)
|
|||||
Effect of stock-based compensation expense
|
—
|
|
15
|
|
—
|
|
—
|
|
15
|
|
|||||
CP Common Shares repurchased (Note 22)
|
(54
|
)
|
—
|
|
—
|
|
(1,086
|
)
|
(1,140
|
)
|
|||||
Shares issued under stock option plan (Note 22)
|
45
|
|
(9
|
)
|
—
|
|
—
|
|
36
|
|
|||||
Balance at December 31, 2019
|
$
|
1,993
|
|
$
|
48
|
|
$
|
(2,522
|
)
|
$
|
7,550
|
|
$
|
7,069
|
|
Principal subsidiary
|
Incorporated under the laws of
|
Canadian Pacific Railway Company
|
Canada
|
Soo Line Railroad Company (“Soo Line”)
|
Minnesota
|
Delaware and Hudson Railway Company, Inc. (“D&H”)
|
Delaware
|
Dakota, Minnesota & Eastern Railroad Corporation (“DM&E”)
|
Delaware
|
Mount Stephen Properties Inc. (“MSP”)
|
Canada
|
•
|
Acceptance of the package of practical expedients, permitting the Company not to reassess lease existence, classification, and capitalization of initial direct costs previously determined for all leases under Topic 840, Leases;
|
•
|
Acceptance of the previous accounting treatment for land easements where Topic 840 was not applied; and
|
•
|
Use of hindsight at transition to determine lease term length.
|
(in millions of Canadian dollars)
|
As reported
December 31, 2018 |
|
New lease standard
cumulative-effect |
|
As restated
January 1, 2019 |
|
|||
Assets
|
|
|
|
||||||
Properties
|
$
|
18,418
|
|
$
|
(12
|
)
|
$
|
18,406
|
|
Other assets
|
71
|
|
399
|
|
470
|
|
|||
Liabilities
|
|
|
|
||||||
Accounts payable and accrued liabilities
|
1,449
|
|
58
|
|
1,507
|
|
|||
Other long-term liabilities
|
237
|
|
337
|
|
574
|
|
|||
Deferred income taxes
|
3,518
|
|
(3
|
)
|
3,515
|
|
|||
Shareholders' equity
|
|
|
|
||||||
Retained earnings
|
$
|
6,635
|
|
$
|
(5
|
)
|
$
|
6,630
|
|
(in millions of Canadian dollars)
|
2019
|
|
2018
|
|
2017
|
|
|||
Freight
|
|
|
|
||||||
Grain
|
$
|
1,684
|
|
$
|
1,566
|
|
$
|
1,532
|
|
Coal
|
682
|
|
673
|
|
631
|
|
|||
Potash
|
462
|
|
486
|
|
411
|
|
|||
Fertilizers and sulphur
|
250
|
|
243
|
|
241
|
|
|||
Forest products
|
304
|
|
284
|
|
265
|
|
|||
Energy, chemicals and plastics
|
1,534
|
|
1,243
|
|
898
|
|
|||
Metals, minerals and consumer products
|
752
|
|
797
|
|
739
|
|
|||
Automotive
|
352
|
|
322
|
|
293
|
|
|||
Intermodal
|
1,593
|
|
1,538
|
|
1,365
|
|
|||
Total freight revenues
|
7,613
|
|
7,152
|
|
6,375
|
|
|||
Non-freight excluding leasing revenues
|
116
|
|
102
|
|
117
|
|
|||
Revenues from contracts with customers
|
7,729
|
|
7,254
|
|
6,492
|
|
|||
Leasing revenues
|
63
|
|
62
|
|
62
|
|
|||
Total revenues
|
$
|
7,792
|
|
$
|
7,316
|
|
$
|
6,554
|
|
(in millions of Canadian dollars)
|
2019
|
|
2018
|
|
||
Opening balance
|
$
|
2
|
|
$
|
2
|
|
Revenue recognized that was included in the contract liability balance at the beginning of the period
|
(2
|
)
|
(2
|
)
|
||
Increases due to consideration received, net of revenue recognized during the period
|
146
|
|
2
|
|
||
Closing balance
|
$
|
146
|
|
$
|
2
|
|
(in millions of Canadian dollars)
|
2019
|
|
2018
|
|
2017
|
|
|||
Foreign exchange (gain) loss on debt and lease liabilities
|
$
|
(94
|
)
|
$
|
168
|
|
$
|
(186
|
)
|
Other foreign exchange (gains) losses
|
(4
|
)
|
3
|
|
(7
|
)
|
|||
Insurance recovery of legal settlement
|
—
|
|
—
|
|
(10
|
)
|
|||
Charge on hedge roll and de-designation
|
—
|
|
—
|
|
13
|
|
|||
Other
|
9
|
|
3
|
|
12
|
|
|||
Other (income) expense
|
$
|
(89
|
)
|
$
|
174
|
|
$
|
(178
|
)
|
(in millions of Canadian dollars)
|
2019
|
|
2018
|
|
2017
|
|
|||
Interest cost
|
$
|
471
|
|
$
|
475
|
|
$
|
491
|
|
Interest capitalized to Properties
|
(17
|
)
|
(20
|
)
|
(16
|
)
|
|||
Interest expense
|
454
|
|
455
|
|
475
|
|
|||
Interest income
|
(6
|
)
|
(2
|
)
|
(2
|
)
|
|||
Net interest expense
|
$
|
448
|
|
$
|
453
|
|
$
|
473
|
|
(in millions of Canadian dollars)
|
2019
|
|
2018
|
|
2017
|
|
|||
Current income tax expense
|
$
|
525
|
|
$
|
381
|
|
$
|
303
|
|
Deferred income tax expense
|
|
|
|
||||||
Origination and reversal of temporary differences
|
316
|
|
214
|
|
371
|
|
|||
Effect of tax rate decrease
|
(95
|
)
|
(21
|
)
|
(541
|
)
|
|||
Effect of hedge of net investment in foreign subsidiaries
|
(38
|
)
|
64
|
|
(42
|
)
|
|||
Other
|
(2
|
)
|
(1
|
)
|
2
|
|
|||
Total deferred income tax expense (recovery)
|
181
|
|
256
|
|
(210
|
)
|
|||
Total income taxes
|
$
|
706
|
|
$
|
637
|
|
$
|
93
|
|
Income before income tax expense
|
|
|
|
||||||
Canada
|
$
|
2,392
|
|
$
|
1,788
|
|
$
|
1,829
|
|
Foreign
|
754
|
|
800
|
|
669
|
|
|||
Total income before income tax expense
|
$
|
3,146
|
|
$
|
2,588
|
|
$
|
2,498
|
|
Income tax expense
|
|
|
|
||||||
Current
|
|
|
|
||||||
Canada
|
$
|
410
|
|
$
|
336
|
|
$
|
257
|
|
Foreign
|
115
|
|
45
|
|
46
|
|
|||
Total current income tax expense
|
525
|
|
381
|
|
303
|
|
|||
Deferred
|
|
|
|
||||||
Canada
|
141
|
|
174
|
|
256
|
|
|||
Foreign
|
40
|
|
82
|
|
(466
|
)
|
|||
Total deferred income tax expense (recovery)
|
181
|
|
256
|
|
(210
|
)
|
|||
Total income taxes
|
$
|
706
|
|
$
|
637
|
|
$
|
93
|
|
(in millions of Canadian dollars)
|
2019
|
|
2018
|
|
||
Deferred income tax assets
|
|
|
||||
Amount related to tax losses carried forward
|
$
|
6
|
|
$
|
11
|
|
Liabilities carrying value in excess of tax basis
|
139
|
|
97
|
|
||
Unrealized foreign exchange losses
|
26
|
|
85
|
|
||
Environmental remediation costs
|
22
|
|
23
|
|
||
Other
|
4
|
|
2
|
|
||
Total deferred income tax assets
|
197
|
|
218
|
|
||
Valuation allowance
|
—
|
|
(5
|
)
|
||
Total net deferred income tax assets
|
197
|
|
213
|
|
||
Deferred income tax liabilities
|
|
|
||||
Properties carrying value in excess of tax basis
|
3,524
|
|
3,496
|
|
||
Pensions carrying value in excess of tax basis
|
83
|
|
164
|
|
||
Other
|
91
|
|
71
|
|
||
Total deferred income tax liabilities
|
3,698
|
|
3,731
|
|
||
Total net deferred income tax liabilities
|
$
|
3,501
|
|
$
|
3,518
|
|
(in millions of Canadian dollars, except percentage)
|
2019
|
|
2018
|
|
2017
|
|
|||
Statutory federal and provincial income tax rate (Canada)
|
26.77
|
%
|
26.86
|
%
|
26.56
|
%
|
|||
Expected income tax expense at Canadian enacted statutory tax rates
|
$
|
842
|
|
$
|
695
|
|
$
|
663
|
|
(Decrease) increase in taxes resulting from:
|
|
|
|
||||||
(Gains) losses not subject to tax
|
(19
|
)
|
8
|
|
(27
|
)
|
|||
Canadian tax rate differentials
|
—
|
|
—
|
|
1
|
|
|||
Foreign tax rate differentials
|
(33
|
)
|
(55
|
)
|
(9
|
)
|
|||
Effect of tax rate decrease
|
(95
|
)
|
(21
|
)
|
(541
|
)
|
|||
Valuation allowance
|
(5
|
)
|
5
|
|
—
|
|
|||
Unrecognized tax benefits(1)
|
33
|
|
—
|
|
1
|
|
|||
Other(1)
|
(17
|
)
|
5
|
|
5
|
|
|||
Income tax expense
|
$
|
706
|
|
$
|
637
|
|
$
|
93
|
|
(in millions of Canadian dollars)
|
2019
|
|
2018
|
|
2017
|
|
|||
Unrecognized tax benefits at January 1
|
$
|
13
|
|
$
|
13
|
|
$
|
13
|
|
Increase in unrecognized:
|
|
|
|
||||||
Tax benefits related to the current year
|
9
|
|
1
|
|
—
|
|
|||
Tax benefits related to prior years
|
34
|
|
—
|
|
—
|
|
|||
Dispositions:
|
|
|
|
||||||
Gross uncertain tax benefits related to prior years
|
—
|
|
(1
|
)
|
—
|
|
|||
Settlements with taxing authorities
|
(4
|
)
|
—
|
|
—
|
|
|||
Unrecognized tax benefits at December 31
|
$
|
52
|
|
$
|
13
|
|
$
|
13
|
|
(in millions of Canadian dollars, except per share data)
|
2019
|
|
2018
|
|
2017
|
|
|||
Net income
|
$
|
2,440
|
|
$
|
1,951
|
|
$
|
2,405
|
|
Weighted-average basic shares outstanding (millions)
|
138.8
|
|
142.9
|
|
145.9
|
|
|||
Dilutive effect of stock options (millions)
|
0.5
|
|
0.4
|
|
0.4
|
|
|||
Weighted-average diluted shares outstanding (millions)
|
139.3
|
|
143.3
|
|
146.3
|
|
|||
Earnings per share – basic
|
$
|
17.58
|
|
$
|
13.65
|
|
$
|
16.49
|
|
Earnings per share – diluted
|
$
|
17.52
|
|
$
|
13.61
|
|
$
|
16.44
|
|
(in millions of Canadian dollars)
|
Before
tax amount |
|
Income tax (expense) recovery
|
|
Net of tax
amount |
|
|||
For the year ended December 31, 2019
|
|
|
|
||||||
Unrealized foreign exchange (loss) gain on:
|
|
|
|
||||||
Translation of the net investment in U.S. subsidiaries
|
$
|
(251
|
)
|
$
|
—
|
|
$
|
(251
|
)
|
Translation of the U.S. dollar-denominated long-term debt designated as a hedge of the net investment in U.S. subsidiaries (Note 19)
|
288
|
|
(38
|
)
|
250
|
|
|||
Realized loss on derivatives designated as cash flow hedges recognized in income
|
10
|
|
(2
|
)
|
8
|
|
|||
Change in pension and other benefits actuarial gains and losses
|
(661
|
)
|
175
|
|
(486
|
)
|
|||
Other comprehensive loss
|
$
|
(614
|
)
|
$
|
135
|
|
$
|
(479
|
)
|
For the year ended December 31, 2018
|
|
|
|
||||||
Unrealized foreign exchange gain (loss) on:
|
|
|
|
||||||
Translation of the net investment in U.S. subsidiaries
|
$
|
419
|
|
$
|
—
|
|
$
|
419
|
|
Translation of the U.S. dollar-denominated long-term debt designated as a hedge of the net investment in U.S. subsidiaries (Note 19)
|
(479
|
)
|
64
|
|
(415
|
)
|
|||
Change in derivatives designated as cash flow hedges:
|
|
|
|
||||||
Realized loss on cash flow hedges recognized in income
|
10
|
|
(3
|
)
|
7
|
|
|||
Unrealized gain on cash flow hedges and other
|
28
|
|
(8
|
)
|
20
|
|
|||
Change in pension and other benefits actuarial gains and losses
|
(447
|
)
|
115
|
|
(332
|
)
|
|||
Change in prior service pension and other benefit costs
|
(2
|
)
|
1
|
|
(1
|
)
|
|||
Other comprehensive loss
|
$
|
(471
|
)
|
$
|
169
|
|
$
|
(302
|
)
|
For the year ended December 31, 2017
|
|
|
|
||||||
Unrealized foreign exchange (loss) gain on:
|
|
|
|
||||||
Translation of the net investment in U.S. subsidiaries
|
$
|
(295
|
)
|
$
|
—
|
|
$
|
(295
|
)
|
Translation of the U.S. dollar-denominated long-term debt designated as a hedge of the net investment in U.S. subsidiaries (Note 19)
|
319
|
|
(42
|
)
|
277
|
|
|||
Change in derivatives designated as cash flow hedges:
|
|
|
|
||||||
Realized loss on cash flow hedges recognized in income
|
25
|
|
(6
|
)
|
19
|
|
|||
Unrealized loss on cash flow hedges and other
|
(6
|
)
|
2
|
|
(4
|
)
|
|||
Change in pension and other benefits actuarial gains and losses
|
84
|
|
(20
|
)
|
64
|
|
|||
Change in prior service pension and other benefit costs
|
(4
|
)
|
1
|
|
(3
|
)
|
|||
Other comprehensive income
|
$
|
123
|
|
$
|
(65
|
)
|
$
|
58
|
|
(in millions of Canadian dollars)
|
2019
|
|
2018
|
|
||
Unrealized foreign exchange gain on translation of the net investment in U.S. subsidiaries
|
$
|
611
|
|
$
|
862
|
|
Unrealized foreign exchange loss on translation of the U.S. dollar-denominated long-term debt designated as a hedge of the net investment in U.S. subsidiaries
|
(499
|
)
|
(749
|
)
|
||
Net deferred losses on derivatives and other
|
(54
|
)
|
(62
|
)
|
||
Amounts for defined benefit pension and other post-retirement plans not recognized in income (Note 23)
|
(2,580
|
)
|
(2,094
|
)
|
||
Accumulated other comprehensive loss
|
$
|
(2,522
|
)
|
$
|
(2,043
|
)
|
(in millions of Canadian dollars)
|
Foreign currency
net of hedging activities(1) |
|
Derivatives and
other(1) |
|
Pension and post-
retirement defined benefit plans(1) |
|
Total(1)
|
|
||||
Opening balance, January 1, 2019
|
$
|
113
|
|
$
|
(62
|
)
|
$
|
(2,094
|
)
|
$
|
(2,043
|
)
|
Other comprehensive loss before reclassifications
|
(1
|
)
|
—
|
|
(550
|
)
|
(551
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
8
|
|
64
|
|
72
|
|
||||
Net current-period other comprehensive (loss) income
|
(1
|
)
|
8
|
|
(486
|
)
|
(479
|
)
|
||||
Closing balance, December 31, 2019
|
$
|
112
|
|
$
|
(54
|
)
|
$
|
(2,580
|
)
|
$
|
(2,522
|
)
|
Opening balance, January 1, 2018
|
$
|
109
|
|
$
|
(89
|
)
|
$
|
(1,761
|
)
|
$
|
(1,741
|
)
|
Other comprehensive income (loss) before reclassifications
|
4
|
|
19
|
|
(417
|
)
|
(394
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
8
|
|
84
|
|
92
|
|
||||
Net current-period other comprehensive income (loss)
|
4
|
|
27
|
|
(333
|
)
|
(302
|
)
|
||||
Closing balance, December 31, 2018
|
$
|
113
|
|
$
|
(62
|
)
|
$
|
(2,094
|
)
|
$
|
(2,043
|
)
|
(in millions of Canadian dollars)
|
2019
|
|
2018
|
|
||
Amortization of prior service costs(1)
|
$
|
—
|
|
$
|
(2
|
)
|
Recognition of net actuarial loss(1)
|
84
|
|
117
|
|
||
Total before income tax
|
84
|
|
115
|
|
||
Income tax recovery
|
(20
|
)
|
(31
|
)
|
||
Total net of income tax
|
$
|
64
|
|
$
|
84
|
|
(in millions of Canadian dollars)
|
2019
|
|
2018
|
|
2017
|
|
|||
Source (use) of cash:
|
|
|
|
||||||
Accounts receivable, net
|
$
|
27
|
|
$
|
(107
|
)
|
$
|
(91
|
)
|
Materials and supplies
|
(8
|
)
|
(11
|
)
|
9
|
|
|||
Other current assets
|
(24
|
)
|
30
|
|
(26
|
)
|
|||
Accounts payable and accrued liabilities
|
(21
|
)
|
153
|
|
(30
|
)
|
|||
Change in non-cash working capital
|
$
|
(26
|
)
|
$
|
65
|
|
$
|
(138
|
)
|
(in millions of Canadian dollars)
|
2019
|
|
2018
|
|
||
Freight
|
$
|
637
|
|
$
|
677
|
|
Non-freight
|
210
|
|
168
|
|
||
|
847
|
|
845
|
|
||
Allowance for doubtful accounts
|
(42
|
)
|
(30
|
)
|
||
Total accounts receivable, net
|
$
|
805
|
|
$
|
815
|
|
(in millions of Canadian dollars)
|
2019
|
|
|
Fair value of net assets acquired:
|
|
||
Accounts receivable, net
|
$
|
7
|
|
Properties
|
42
|
|
|
Intangible assets (Note 15)
|
5
|
|
|
Accounts payable and accrued liabilities
|
(2
|
)
|
|
Long-term debt maturing within one year (Note 18)
|
(11
|
)
|
|
Other long-term liabilities
|
(4
|
)
|
|
Total identifiable assets and liabilities
|
$
|
37
|
|
Goodwill (Note 15)
|
10
|
|
|
|
$
|
47
|
|
Consideration:
|
|
||
Cash, net of cash acquired
|
$
|
47
|
|
(in millions of Canadian dollars)
|
2019
|
|
2018
|
|
||
Investment in CMQ U.S. accounted for on an equity basis (Note 11)
|
$
|
127
|
|
$
|
—
|
|
Other rail investments accounted for on an equity basis
|
166
|
|
160
|
|
||
Other investments
|
48
|
|
43
|
|
||
Total investments
|
$
|
341
|
|
$
|
203
|
|
(in millions of Canadian dollars except percentages)
|
2019
|
2019
|
|
2018
|
|||||||||||||||||||||
|
Weighted-average annual depreciation rate
|
|
Cost
|
|
|
Accumulated
depreciation |
|
|
Net book
value |
|
|
Cost
|
|
|
Accumulated
depreciation |
|
|
Net book
value |
|
||||||
Track and roadway
|
2.8
|
%
|
$
|
19,299
|
|
|
$
|
5,522
|
|
|
$
|
13,777
|
|
|
$
|
18,599
|
|
|
$
|
5,236
|
|
|
$
|
13,363
|
|
Buildings
|
2.9
|
%
|
833
|
|
|
237
|
|
|
596
|
|
|
781
|
|
|
218
|
|
|
563
|
|
||||||
Rolling stock
|
2.8
|
%
|
4,529
|
|
|
1,445
|
|
|
3,084
|
|
|
4,467
|
|
|
1,613
|
|
|
2,854
|
|
||||||
Information systems software(1)
|
10.0
|
%
|
527
|
|
|
215
|
|
|
312
|
|
|
551
|
|
|
252
|
|
|
299
|
|
||||||
Other
|
5.2
|
%
|
2,067
|
|
|
680
|
|
|
1,387
|
|
|
1,984
|
|
|
645
|
|
|
1,339
|
|
||||||
Total
|
$
|
27,255
|
|
|
$
|
8,099
|
|
|
$
|
19,156
|
|
|
$
|
26,382
|
|
|
$
|
7,964
|
|
|
$
|
18,418
|
|
(in millions of Canadian dollars)
|
2019
|
2018
|
||||||||||||||||
|
Cost
|
|
Accumulated
depreciation |
|
Net book
value |
|
Cost
|
|
Accumulated
depreciation |
|
Net book
value |
|
||||||
Buildings
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1
|
|
$
|
1
|
|
$
|
—
|
|
Rolling stock
|
303
|
|
130
|
|
173
|
|
311
|
|
124
|
|
187
|
|
||||||
Other
|
4
|
|
—
|
|
4
|
|
—
|
|
—
|
|
—
|
|
||||||
Total assets held under finance lease
|
$
|
307
|
|
$
|
130
|
|
$
|
177
|
|
$
|
312
|
|
$
|
125
|
|
$
|
187
|
|
|
Goodwill
|
|
|
Intangible assets
|
|
|||||||||||
(in millions of Canadian dollars)
|
Net
carrying amount |
|
|
Cost
|
|
Accumulated
amortization |
|
Net
carrying amount |
|
Total goodwill and intangible assets
|
|
|||||
Balance at December 31, 2017
|
$
|
178
|
|
|
$
|
22
|
|
$
|
(13
|
)
|
$
|
9
|
|
$
|
187
|
|
Amortization
|
—
|
|
|
—
|
|
(1
|
)
|
(1
|
)
|
(1
|
)
|
|||||
Foreign exchange impact
|
16
|
|
|
—
|
|
—
|
|
—
|
|
16
|
|
|||||
Balance at December 31, 2018
|
194
|
|
|
22
|
|
(14
|
)
|
8
|
|
202
|
|
|||||
Additions (Note 11)
|
10
|
|
|
5
|
|
—
|
|
5
|
|
15
|
|
|||||
Amortization
|
—
|
|
|
—
|
|
(1
|
)
|
(1
|
)
|
(1
|
)
|
|||||
Foreign exchange impact
|
(10
|
)
|
|
—
|
|
—
|
|
—
|
|
(10
|
)
|
|||||
Balance at December 31, 2019
|
$
|
194
|
|
|
$
|
27
|
|
$
|
(15
|
)
|
$
|
12
|
|
$
|
206
|
|
(in millions of Canadian dollars)
|
2019
|
|
2018
|
|
||
Operating lease ROU assets (Note 2, 21)
|
$
|
358
|
|
$
|
—
|
|
Long-term materials
|
41
|
|
26
|
|
||
Contracted customer incentives
|
32
|
|
11
|
|
||
Prepaid leases
|
—
|
|
10
|
|
||
Other
|
20
|
|
24
|
|
||
Total other assets
|
$
|
451
|
|
$
|
71
|
|
(in millions of Canadian dollars)
|
2019
|
|
2018
|
|
||
Trade payables
|
$
|
453
|
|
$
|
474
|
|
Accrued charges
|
348
|
|
360
|
|
||
Contract liabilities(1) (Note 3)
|
142
|
|
2
|
|
||
Income and other taxes payable
|
139
|
|
104
|
|
||
Accrued interest
|
131
|
|
135
|
|
||
Dividends payable
|
114
|
|
91
|
|
||
Stock-based compensation liabilities
|
85
|
|
53
|
|
||
Payroll-related accruals
|
78
|
|
78
|
|
||
Operating lease liabilities (Note 2, 21)
|
69
|
|
—
|
|
||
Accrued vacation
|
60
|
|
61
|
|
||
Personal injury and other claims provision
|
55
|
|
68
|
|
||
Provision for environmental remediation (Note 20)
|
7
|
|
8
|
|
||
Other(1)
|
12
|
|
15
|
|
||
Total accounts payable and accrued liabilities
|
$
|
1,693
|
|
$
|
1,449
|
|
(in millions of Canadian dollars except percentages)
|
|
Maturity
|
Currency
in which payable |
2019
|
|
2018
|
|
|||
7.250%
|
10-year Notes
|
(A)
|
May 2019
|
U.S.$
|
$
|
—
|
|
$
|
477
|
|
9.450%
|
30-year Debentures
|
(A)
|
Aug 2021
|
U.S.$
|
325
|
|
341
|
|
||
5.100%
|
10-year Medium Term Notes
|
(A)
|
Jan 2022
|
CDN$
|
125
|
|
125
|
|
||
4.500%
|
10-year Notes
|
(A)
|
Jan 2022
|
U.S.$
|
324
|
|
339
|
|
||
4.450%
|
12.5-year Notes
|
(A)
|
Mar 2023
|
U.S.$
|
454
|
|
477
|
|
||
2.900%
|
10-year Notes
|
(A)
|
Feb 2025
|
U.S.$
|
909
|
|
955
|
|
||
3.700%
|
10.5-year Notes
|
(A)
|
Feb 2026
|
U.S.$
|
324
|
|
340
|
|
||
4.000%
|
10-year Notes
|
(A)
|
Jun 2028
|
U.S.$
|
649
|
|
682
|
|
||
3.150%
|
10-year Notes
|
(A)
|
Mar 2029
|
CDN$
|
399
|
|
—
|
|
||
7.125%
|
30-year Debentures
|
(A)
|
Oct 2031
|
U.S.$
|
454
|
|
477
|
|
||
5.750%
|
30-year Debentures
|
(A)
|
Mar 2033
|
U.S.$
|
318
|
|
334
|
|
||
4.800%
|
20-year Notes
|
(A)
|
Sep 2035
|
U.S.$
|
388
|
|
408
|
|
||
5.950%
|
30-year Notes
|
(A)
|
May 2037
|
U.S.$
|
578
|
|
607
|
|
||
6.450%
|
30-year Notes
|
(A)
|
Nov 2039
|
CDN$
|
400
|
|
400
|
|
||
5.750%
|
30-year Notes
|
(A)
|
Jan 2042
|
U.S.$
|
319
|
|
336
|
|
||
4.800%
|
30-year Notes
|
(A)
|
Aug 2045
|
U.S.$
|
712
|
|
748
|
|
||
6.125%
|
100-year Notes
|
(A)
|
Sep 2115
|
U.S.$
|
1,169
|
|
1,228
|
|
||
8.000%
|
5-year Promissory Notes
|
(B)
|
up to Jun 2020
|
U.S.$
|
11
|
|
—
|
|
||
5.41%
|
Senior Secured Notes
|
(C)
|
Mar 2024
|
U.S.$
|
100
|
|
113
|
|
||
6.91%
|
Secured Equipment Notes
|
(D)
|
Oct 2024
|
CDN$
|
91
|
|
106
|
|
||
7.49%
|
Equipment Trust Certificates
|
(E)
|
Jan 2021
|
U.S.$
|
55
|
|
57
|
|
||
Obligations under finance leases
|
|
|
|
|
||||||
2.97%
|
|
(F)
|
Jun 2020
|
CDN$
|
3
|
|
—
|
|
||
6.99%
|
|
(F)
|
Mar 2022
|
U.S.$
|
99
|
|
104
|
|
||
6.57%
|
|
(F)
|
Dec 2026
|
U.S.$
|
45
|
|
52
|
|
||
12.77%
|
|
(F)
|
Jan 2031
|
CDN$
|
4
|
|
4
|
|
||
Commercial Paper
|
|
|
|
U.S.$
|
516
|
|
—
|
|
||
|
|
|
8,771
|
|
8,710
|
|
||||
Perpetual 4% Consolidated Debenture Stock
|
(G)
|
|
U.S.$
|
39
|
|
41
|
|
|||
Perpetual 4% Consolidated Debenture Stock
|
(G)
|
|
G.B.£
|
6
|
|
6
|
|
|||
|
|
|
8,816
|
|
8,757
|
|
||||
Unamortized fees on long-term debt
|
|
|
(59
|
)
|
(61
|
)
|
||||
|
|
|
8,757
|
|
8,696
|
|
||||
Less: Long-term debt maturing within one year
|
|
|
599
|
|
506
|
|
||||
|
|
|
$
|
8,158
|
|
$
|
8,190
|
|
(in millions of Canadian dollars)
|
December 31, 2019
|
|
December 31, 2018
|
|
||
Long-term debt (including current maturities):
|
|
|
||||
Fair value
|
$
|
10,149
|
|
$
|
9,639
|
|
Carrying value
|
8,757
|
|
8,696
|
|
(in millions of Canadian dollars)
|
2019
|
|
2018
|
|
||
Operating lease liabilities, net of current portion (Note 2, 21)
|
$
|
285
|
|
$
|
—
|
|
Stock-based compensation liabilities, net of current portion
|
111
|
|
81
|
|
||
Provision for environmental remediation, net of current portion(1)
|
70
|
|
74
|
|
||
Deferred revenue on rights-of-way license agreements, net of current portion(2)
|
20
|
|
24
|
|
||
Deferred gains on sale leaseback transactions(2)
|
6
|
|
13
|
|
||
Other, net of current portion
|
70
|
|
45
|
|
||
Total other long-term liabilities
|
$
|
562
|
|
$
|
237
|
|
(in millions of Canadian dollars)
|
2019
|
|
|
Operating lease cost
|
$
|
89
|
|
Short-term lease cost
|
10
|
|
|
Variable lease cost
|
13
|
|
|
Sublease income
|
(3
|
)
|
|
|
|
||
Finance Lease Cost
|
|
||
Amortization of right-of use-assets
|
9
|
|
|
Interest on lease liabilities
|
11
|
|
|
Total lease costs
|
$
|
129
|
|
(in millions of Canadian dollars)
|
Classification
|
2019
|
|
|
Assets
|
|
|
||
Operating
|
Other assets
|
$
|
358
|
|
Finance
|
Properties, net book value
|
177
|
|
|
|
|
|
||
Liabilities
|
|
|
||
Current
|
|
|
||
Operating
|
Accounts payable and accrued liabilities
|
69
|
|
|
Finance
|
Long-term debt maturing within one year
|
7
|
|
|
Long-term
|
|
|
||
Operating
|
Other long-term liabilities
|
285
|
|
|
Finance
|
Long-term debt
|
144
|
|
|
2019
|
|
Weighted-Average Remaining Lease Term
|
|
|
Operating leases
|
7 years
|
|
Finance leases
|
4 years
|
|
|
|
|
Weighted-Average Discount Rate
|
|
|
Operating leases
|
3.45
|
%
|
Finance leases
|
7.07
|
%
|
(in millions of Canadian dollars)
|
2019
|
|
|
Cash paid for amounts included in measurement of lease liabilities
|
|
||
Operating cash outflows from operating leases
|
$
|
82
|
|
Operating cash outflows from finance leases
|
10
|
|
|
Financing cash outflows from finance leases
|
6
|
|
|
|
|
||
Right-of-use assets obtained in exchange for lease liabilities
|
|
||
Operating leases
|
38
|
|
|
Finance leases
|
4
|
|
(in millions of Canadian dollars)
|
Finance Leases
|
|
Operating Leases
|
|
||
2020
|
$
|
11
|
|
$
|
80
|
|
2021
|
10
|
|
55
|
|
||
2022
|
108
|
|
51
|
|
||
2023
|
8
|
|
39
|
|
||
2024
|
9
|
|
40
|
|
||
Thereafter
|
21
|
|
130
|
|
||
Total lease payments
|
167
|
|
395
|
|
||
Imputed interest
|
(16
|
)
|
(41
|
)
|
||
Present value of lease payments
|
$
|
151
|
|
$
|
354
|
|
(number of shares in millions)
|
2019
|
|
2018
|
|
2017
|
|
Share capital, January 1
|
140.5
|
|
144.9
|
|
146.3
|
|
CP Common Shares repurchased
|
(3.8
|
)
|
(4.6
|
)
|
(1.9
|
)
|
Shares issued under stock option plan
|
0.3
|
|
0.2
|
|
0.5
|
|
Share capital, December 31
|
137.0
|
|
140.5
|
|
144.9
|
|
|
2019
|
|
2018
|
|
2017
|
|
|||
Number of Common Shares repurchased(1)
|
3,794,149
|
|
4,683,162
|
|
1,888,100
|
|
|||
Weighted-average price per share(2)
|
$
|
300.65
|
|
$
|
240.68
|
|
$
|
201.53
|
|
Amount of repurchase (in millions)(2)
|
$
|
1,141
|
|
$
|
1,127
|
|
$
|
381
|
|
|
Pensions
|
|
Other benefits
|
||||||||||||||||
(in millions of Canadian dollars)
|
2019
|
|
2018
|
|
2017
|
|
|
2019
|
|
2018
|
|
2017
|
|
||||||
Current service cost (benefits earned by employees)
|
$
|
107
|
|
$
|
120
|
|
$
|
103
|
|
|
$
|
11
|
|
$
|
12
|
|
$
|
12
|
|
Other components of net periodic benefit cost (recovery):
|
|
|
|
|
|
|
|
||||||||||||
Interest cost on benefit obligation
|
450
|
|
438
|
|
451
|
|
|
20
|
|
19
|
|
20
|
|
||||||
Expected return on fund assets
|
(947
|
)
|
(955
|
)
|
(893
|
)
|
|
—
|
|
—
|
|
—
|
|
||||||
Recognized net actuarial loss
|
84
|
|
114
|
|
153
|
|
|
12
|
|
2
|
|
(1
|
)
|
||||||
Amortization of prior service costs
|
(1
|
)
|
(2
|
)
|
(5
|
)
|
|
1
|
|
—
|
|
1
|
|
||||||
Total other components of net periodic benefit (recovery) cost
|
(414
|
)
|
(405
|
)
|
(294
|
)
|
|
33
|
|
21
|
|
20
|
|
||||||
Net periodic benefit (recovery) cost
|
$
|
(307
|
)
|
$
|
(285
|
)
|
$
|
(191
|
)
|
|
$
|
44
|
|
$
|
33
|
|
$
|
32
|
|
|
Pensions
|
|
Other benefits
|
||||||||||
(in millions of Canadian dollars)
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
||||
Change in projected benefit obligation:
|
|
|
|
|
|
||||||||
Benefit obligation at January 1
|
$
|
11,372
|
|
$
|
11,679
|
|
|
$
|
501
|
|
$
|
518
|
|
Current service cost
|
107
|
|
120
|
|
|
11
|
|
12
|
|
||||
Interest cost
|
450
|
|
438
|
|
|
20
|
|
19
|
|
||||
Employee contributions
|
41
|
|
47
|
|
|
—
|
|
1
|
|
||||
Benefits paid
|
(646
|
)
|
(640
|
)
|
|
(34
|
)
|
(33
|
)
|
||||
Foreign currency changes
|
(10
|
)
|
20
|
|
|
—
|
|
2
|
|
||||
Actuarial loss (gain)
|
1,296
|
|
(292
|
)
|
|
43
|
|
(18
|
)
|
||||
Projected benefit obligation at December 31
|
$
|
12,610
|
|
$
|
11,372
|
|
|
$
|
541
|
|
$
|
501
|
|
|
Pensions
|
|
Other benefits
|
||||||||||
(in millions of Canadian dollars)
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
||||
Change in fund assets:
|
|
|
|
|
|
||||||||
Fair value of fund assets at January 1
|
$
|
12,349
|
|
$
|
12,808
|
|
|
$
|
4
|
|
$
|
4
|
|
Actual return on fund assets
|
1,528
|
|
82
|
|
|
1
|
|
—
|
|
||||
Employer contributions
|
53
|
|
36
|
|
|
34
|
|
32
|
|
||||
Employee contributions
|
41
|
|
47
|
|
|
—
|
|
1
|
|
||||
Benefits paid
|
(646
|
)
|
(640
|
)
|
|
(34
|
)
|
(33
|
)
|
||||
Foreign currency changes
|
(6
|
)
|
16
|
|
|
—
|
|
—
|
|
||||
Fair value of fund assets at December 31
|
$
|
13,319
|
|
$
|
12,349
|
|
|
$
|
5
|
|
$
|
4
|
|
Funded status – plan surplus (deficit)
|
$
|
709
|
|
$
|
977
|
|
|
$
|
(536
|
)
|
$
|
(497
|
)
|
|
2019
|
|
2018
|
||||||||||
(in millions of Canadian dollars)
|
Pension
plans in surplus |
|
Pension
plans in deficit |
|
|
Pension
plans in surplus |
|
Pension
plans in deficit |
|
||||
Projected benefit obligation at December 31
|
$
|
(12,076
|
)
|
$
|
(534
|
)
|
|
$
|
(10,884
|
)
|
$
|
(488
|
)
|
Fair value of fund assets at December 31
|
13,079
|
|
240
|
|
|
12,127
|
|
222
|
|
||||
Funded Status
|
$
|
1,003
|
|
$
|
(294
|
)
|
|
$
|
1,243
|
|
$
|
(266
|
)
|
|
Pensions
|
|
Other benefits
|
||||||||||
(in millions of Canadian dollars)
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
||||
Pension asset
|
$
|
1,003
|
|
$
|
1,243
|
|
|
$
|
—
|
|
$
|
—
|
|
Accounts payable and accrued liabilities
|
(11
|
)
|
(11
|
)
|
|
(34
|
)
|
(34
|
)
|
||||
Pension and other benefit liabilities
|
(283
|
)
|
(255
|
)
|
|
(502
|
)
|
(463
|
)
|
||||
Total amount recognized
|
$
|
709
|
|
$
|
977
|
|
|
$
|
(536
|
)
|
$
|
(497
|
)
|
|
Pensions
|
|
Other benefits
|
||||||||||
(in millions of Canadian dollars)
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
||||
Net actuarial loss:
|
|
|
|
|
|
||||||||
Other than deferred investment gains
|
$
|
3,434
|
|
$
|
2,233
|
|
|
$
|
91
|
|
$
|
61
|
|
Deferred investment gains
|
41
|
|
611
|
|
|
—
|
|
—
|
|
||||
Prior service cost
|
1
|
|
—
|
|
|
1
|
|
2
|
|
||||
Deferred income tax
|
(964
|
)
|
(797
|
)
|
|
(24
|
)
|
(16
|
)
|
||||
Total (Note 8)
|
$
|
2,512
|
|
$
|
2,047
|
|
|
$
|
68
|
|
$
|
47
|
|
(percentages)
|
2019
|
|
2018
|
|
2017
|
|
Benefit obligation at December 31:
|
|
|
|
|
|
|
Discount rate
|
3.25
|
|
4.01
|
|
3.80
|
|
Projected future salary increases
|
2.75
|
|
2.75
|
|
2.75
|
|
Health care cost trend rate
|
5.50
|
(1)
|
6.00
|
(1)
|
7.00
|
(2)
|
Benefit cost for year ended December 31:
|
|
|
|
|
|
|
Discount rate
|
4.01
|
|
3.80
|
|
4.02
|
|
Expected rate of return on fund assets (3)
|
7.50
|
|
7.75
|
|
7.75
|
|
Projected future salary increases
|
2.75
|
|
2.75
|
|
2.75
|
|
Health care cost trend rate
|
6.00
|
(1)
|
7.00
|
(2)
|
7.00
|
(2)
|
|
|
|
Percentage of plan assets
at December 31 |
|
Asset allocation (percentage)
|
Asset allocation target
|
Policy range
|
2019
|
2018
|
Cash and cash equivalents
|
1.2
|
0 – 10
|
0.9
|
1.1
|
Fixed income
|
24.1
|
20 – 40
|
24.6
|
25.6
|
Public equity
|
45.1
|
35 – 55
|
54.5
|
50.2
|
Real estate and infrastructure
|
9.8
|
4 – 13
|
6.8
|
7.7
|
Private debt
|
9.8
|
4 – 13
|
2.4
|
1.3
|
Absolute return
|
10.0
|
4 – 13
|
10.8
|
14.1
|
Total
|
100.0
|
|
100.0
|
100.0
|
|
Assets Measured at Fair Value
|
Investments
measured at NAV(1)
|
|
Total Plan
Assets
|
|
|||||||
(in millions of Canadian dollars)
|
Quoted prices in
active markets for identical assets (Level 1) |
|
Significant other
observable inputs (Level 2) |
|
||||||||
December 31, 2019
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
112
|
|
$
|
—
|
|
$
|
—
|
|
$
|
112
|
|
Fixed income
|
|
|
|
|
||||||||
Government bonds(2)
|
233
|
|
1,857
|
|
—
|
|
2,090
|
|
||||
Corporate bonds(2)
|
273
|
|
819
|
|
—
|
|
1,092
|
|
||||
Mortgages(3)
|
159
|
|
5
|
|
—
|
|
164
|
|
||||
Public equities
|
|
|
|
|
||||||||
Canada
|
1,351
|
|
—
|
|
—
|
|
1,351
|
|
||||
U.S. and international
|
5,883
|
|
22
|
|
—
|
|
5,905
|
|
||||
Real estate(4)
|
—
|
|
—
|
|
724
|
|
724
|
|
||||
Infrastructure(5)
|
—
|
|
—
|
|
187
|
|
187
|
|
||||
Private debt(6)
|
—
|
|
—
|
|
313
|
|
313
|
|
||||
Derivative instruments(7)
|
—
|
|
(59
|
)
|
—
|
|
(59
|
)
|
||||
Absolute return(8)
|
|
|
|
|
||||||||
Funds of hedge funds
|
—
|
|
—
|
|
1,418
|
|
1,418
|
|
||||
Multi-strategy funds
|
—
|
|
—
|
|
22
|
|
22
|
|
||||
|
$
|
8,011
|
|
$
|
2,644
|
|
$
|
2,664
|
|
$
|
13,319
|
|
December 31, 2018
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
127
|
|
$
|
12
|
|
$
|
—
|
|
$
|
139
|
|
Fixed income
|
|
|
|
|
||||||||
Government bonds(2)
|
101
|
|
1,281
|
|
—
|
|
1,382
|
|
||||
Corporate bonds(2)
|
128
|
|
1,606
|
|
—
|
|
1,734
|
|
||||
Mortgages(3)
|
41
|
|
—
|
|
—
|
|
41
|
|
||||
Public equities
|
|
|
|
|
||||||||
Canada
|
1,287
|
|
—
|
|
—
|
|
1,287
|
|
||||
U.S. and international
|
4,892
|
|
24
|
|
—
|
|
4,916
|
|
||||
Real estate(4)
|
—
|
|
—
|
|
697
|
|
697
|
|
||||
Infrastructure(5)
|
—
|
|
—
|
|
259
|
|
259
|
|
||||
Private debt(6)
|
—
|
|
—
|
|
162
|
|
162
|
|
||||
Derivative instruments(7)
|
—
|
|
(7
|
)
|
—
|
|
(7
|
)
|
||||
Absolute return(8)
|
|
|
|
|
||||||||
Funds of hedge funds
|
—
|
|
—
|
|
1,189
|
|
1,189
|
|
||||
Multi-strategy funds
|
—
|
|
—
|
|
286
|
|
286
|
|
||||
Credit funds
|
—
|
|
—
|
|
32
|
|
32
|
|
||||
Equity funds
|
—
|
|
—
|
|
232
|
|
232
|
|
||||
|
$
|
6,576
|
|
$
|
2,916
|
|
$
|
2,857
|
|
$
|
12,349
|
|
(in millions of Canadian dollars)
|
Pensions
|
|
Other benefits
|
|
||
2020
|
$
|
620
|
|
$
|
34
|
|
2021
|
623
|
|
32
|
|
||
2022
|
627
|
|
31
|
|
||
2023
|
630
|
|
30
|
|
||
2024
|
633
|
|
30
|
|
||
2025 – 2029
|
3,203
|
|
144
|
|
|
Options outstanding
|
Non-vested options
|
||||||||
|
Number of
options |
|
Weighted-average
exercise price |
|
Number of
options |
|
Weighted-average
grant date fair value |
|
||
Outstanding, January 1, 2019
|
1,533,598
|
|
$
|
176.02
|
|
714,102
|
|
$
|
48.94
|
|
Granted
|
224,730
|
|
$
|
269.99
|
|
224,730
|
|
$
|
63.69
|
|
Exercised
|
(334,127
|
)
|
$
|
125.12
|
|
N/A
|
|
N/A
|
|
|
Vested
|
N/A
|
|
N/A
|
|
(169,193
|
)
|
$
|
47.59
|
|
|
Forfeited
|
(7,855
|
)
|
$
|
234.59
|
|
(7,855
|
)
|
$
|
54.75
|
|
Outstanding, December 31, 2019
|
1,416,346
|
|
$
|
199.12
|
|
761,784
|
|
$
|
53.54
|
|
Vested or expected to vest at December 31, 2019(1)
|
1,385,626
|
|
$
|
197.89
|
|
N/A
|
|
N/A
|
|
|
Exercisable, December 31, 2019
|
654,562
|
|
$
|
162.59
|
|
N/A
|
|
N/A
|
|
|
Options outstanding
|
Options exercisable
|
|||||||||||||||
Range of exercise prices
|
Number of
options |
|
Weighted-average
years to expiration |
Weighted-average
exercise price |
|
Aggregate
intrinsic value (millions) |
|
Number of
options |
|
Weighted-average
exercise price |
|
Aggregate
intrinsic value (millions) |
|
||||
$51.17 – $167.50
|
354,357
|
|
4.1
|
$
|
123.00
|
|
$
|
74
|
|
303,455
|
|
$
|
116.84
|
|
$
|
65
|
|
$167.51 – $197.05
|
355,040
|
|
4.1
|
$
|
188.53
|
|
$
|
51
|
|
135,532
|
|
$
|
175.30
|
|
$
|
21
|
|
$197.06– $247.87
|
376,654
|
|
4.8
|
$
|
222.75
|
|
$
|
41
|
|
215,465
|
|
$
|
218.98
|
|
$
|
24
|
|
$247.88 – $313.16
|
330,295
|
|
5.9
|
$
|
265.23
|
|
$
|
22
|
|
110
|
|
$
|
260.52
|
|
$
|
—
|
|
Total(1)
|
1,416,346
|
|
4.7
|
$
|
199.12
|
|
$
|
187
|
|
654,562
|
|
$
|
162.59
|
|
$
|
110
|
|
|
2019
|
|
2018
|
|
2017
|
|
|||
Expected option life (years)(1)
|
5.00
|
|
5.00
|
|
5.48
|
|
|||
Risk-free interest rate(2)
|
2.22
|
%
|
2.22
|
%
|
1.85
|
%
|
|||
Expected stock price volatility(3)
|
25.04
|
%
|
24.81
|
%
|
26.94
|
%
|
|||
Expected annual dividends per share(4)
|
$
|
2.6191
|
|
$
|
2.3854
|
|
$
|
2.0010
|
|
Expected forfeiture rate(5)
|
6.05
|
%
|
4.70
|
%
|
2.80
|
%
|
|||
Weighted-average grant date fair value of options granted during the year
|
$
|
63.69
|
|
$
|
55.63
|
|
$
|
45.78
|
|
(in millions of Canadian dollars)
|
2019
|
|
2018
|
|
2017
|
|
|||
Total intrinsic value
|
$
|
63
|
|
$
|
17
|
|
$
|
36
|
|
Cash received by the Company upon exercise of options
|
26
|
|
24
|
|
45
|
|
|
2019
|
|
2018
|
|
Outstanding, January 1
|
395,048
|
|
334,028
|
|
Granted
|
134,260
|
|
162,255
|
|
Units, in lieu of dividends
|
4,032
|
|
3,643
|
|
Settled
|
(117,228
|
)
|
(66,243
|
)
|
Forfeited
|
(12,976
|
)
|
(38,635
|
)
|
Outstanding, December 31
|
403,136
|
|
395,048
|
|
|
2019
|
|
2018
|
|
Outstanding, January 1
|
152,760
|
|
156,547
|
|
Granted
|
19,912
|
|
16,481
|
|
Units, in lieu of dividends
|
1,608
|
|
1,551
|
|
Settled
|
(12,110
|
)
|
(20,072
|
)
|
Forfeited
|
(951
|
)
|
(1,747
|
)
|
Outstanding, December 31
|
161,219
|
|
152,760
|
|
(in millions of Canadian dollars)
|
2019
|
|
2018
|
|
2017
|
|
|||
Plan
|
|
|
|
||||||
PSUs
|
$
|
54
|
|
$
|
30
|
|
$
|
31
|
|
DSUs
|
4
|
|
6
|
|
6
|
|
|||
Other
|
—
|
|
1
|
|
2
|
|
|||
Total
|
$
|
58
|
|
$
|
37
|
|
$
|
39
|
|
(1)
|
Québec's Minister of Sustainable Development, Environment, Wildlife and Parks ordered various parties, including CP, to clean up the derailment site and served CP with a Notice of Claim for $95 million for those cleanup costs. CP appealed the cleanup order and contested the Notice of Claim with the Administrative Tribunal of Québec. These proceedings are stayed pending determination of the Attorney General of Québec (“AGQ”) action (paragraph 2 below).
|
(2)
|
The AGQ sued CP in the Québec Superior Court claiming $409 million in damages, which was amended and reduced to $315 million (the “AGQ Action”). The AGQ Action alleges that: (i) CP exercised custody or control over the petroleum crude oil until its delivery to Irving Oil and was negligent in that custody and control; and (ii) CP is vicariously liable for the acts and omissions of the MMA Group.
|
(3)
|
A class action in the Québec Superior Court on behalf of persons and entities residing in, owning or leasing property in, operating a business in, or physically present in Lac-Mégantic at the time of the derailment was certified against CP on May 8, 2015 (the "Class Action"). Other defendants including MMAC and, Mr. Thomas Harding ("Harding") were added to the Class Action on January 25, 2017. The Class Action seeks unquantified damages, including for wrongful death, personal injury, and property damage.
|
(4)
|
Eight subrogated insurers sued CP in the Québec Superior Court claiming approximately $16 million in damages, which was amended and reduced to $14 million (the “Promutuel Action”), and two additional subrogated insurers sued CP claiming approximately $3 million in damages (the “Royal Action”). Both actions contain similar allegations as the AGQ Action. The actions do not identify the subrogated parties, and therefore overlap with the claims process under the Plans is unclear. The Royal Action is stayed pending determination of the consolidated proceedings described below.
|
(5)
|
Forty-eight plaintiffs (all individual claims joined in one action) sued CP, MMAC and Harding in the Québec Superior Court claiming approximately U.S. $5 million in damages for economic loss and pain and suffering, and asserting similar allegations as in the Class Action and the AGQ Action. The plaintiffs opted-out of the Class Action and all but two are also plaintiffs in litigation against CP, described in paragraph 7 below. This action is stayed pending determination of the consolidated claims described above.
|
(6)
|
The MMAR U.S. estate representative commenced an action against CP in November 2014 in the Maine Bankruptcy Court claiming that CP failed to abide by certain regulations and seeking damages for MMAR’s loss in business value (as yet unquantified). This action asserts that CP knew or ought to have known that the shipper misclassified the petroleum crude oil and therefore should have refused to transport it.
|
(7)
|
The class and mass tort action commenced against CP in June 2015 in Texas (on behalf of Lac-Mégantic residents and wrongful death representatives) and the wrongful death and personal injury actions commenced against CP in June 2015 in Illinois and Maine, were all transferred and consolidated in
|
(8)
|
The trustee for the wrongful death trust commenced Carmack Amendment claims against CP in North Dakota Federal Court, seeking to recover approximately U.S. $6 million for damaged rail cars and lost crude and reimbursement for the settlement paid by the consignor and the consignee under the Plans (alleged to be U.S. $110 million and U.S. $60 million, respectively). This action is scheduled for trial in August 2020.
|
•
|
a guarantee to uphold an equity investee's credit facility of $19 million at December 31, 2019;
|
•
|
guarantees to pay other parties in the event of the occurrence of specified events, including damage to equipment, in relation to assets used in the operation of the railway through operating leases, rental agreements, easements, trackage, and interline agreements; and
|
•
|
indemnifications of certain tax-related payments incurred by lessors and lenders.
|
(in millions of Canadian dollars)
|
Canada
|
|
United States
|
|
Total
|
|
|||
2019
|
|
|
|
||||||
Revenues
|
$
|
5,675
|
|
$
|
2,117
|
|
$
|
7,792
|
|
Long-term assets excluding financial instruments and pension assets
|
13,131
|
|
7,020
|
|
20,151
|
|
|||
2018
|
|
|
|
||||||
Revenues
|
5,232
|
|
2,084
|
|
7,316
|
|
|||
Long-term assets excluding financial instruments and pension assets
|
12,133
|
|
6,759
|
|
18,892
|
|
|||
2017
|
|
|
|
||||||
Revenues
|
4,667
|
|
1,887
|
|
6,554
|
|
|||
Long-term assets excluding financial instruments and pension assets
|
11,505
|
|
5,947
|
|
17,452
|
|
For the quarter ended
|
2019
|
2018
|
||||||||||||||||||||||
(in millions of Canadian dollars, except per share data)
|
Dec. 31
|
|
Sep. 30
|
|
Jun. 30
|
|
Mar. 31
|
|
Dec. 31
|
|
Sep. 30
|
|
Jun. 30
|
|
Mar. 31
|
|
||||||||
Total revenues
|
$
|
2,069
|
|
$
|
1,979
|
|
$
|
1,977
|
|
$
|
1,767
|
|
$
|
2,006
|
|
$
|
1,898
|
|
$
|
1,750
|
|
$
|
1,662
|
|
Operating income
|
890
|
|
869
|
|
822
|
|
543
|
|
874
|
|
790
|
|
627
|
|
540
|
|
||||||||
Net income
|
664
|
|
618
|
|
724
|
|
434
|
|
545
|
|
622
|
|
436
|
|
348
|
|
||||||||
Basic earnings per share(1)
|
$
|
4.84
|
|
$
|
4.47
|
|
$
|
5.19
|
|
$
|
3.10
|
|
$
|
3.84
|
|
$
|
4.36
|
|
$
|
3.05
|
|
$
|
2.41
|
|
Diluted earnings per share(1)
|
4.82
|
|
4.46
|
|
5.17
|
|
3.09
|
|
3.83
|
|
4.35
|
|
3.04
|
|
2.41
|
|
(in millions of Canadian dollars)
|
CPRL (Parent Guarantor)
|
|
CPRC (Subsidiary Issuer)
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments and Eliminations
|
|
CPRL Consolidated
|
|
|||||
Revenues
|
|
|
|
|
|
||||||||||
Freight
|
$
|
—
|
|
$
|
5,527
|
|
$
|
2,084
|
|
$
|
2
|
|
$
|
7,613
|
|
Non-freight
|
—
|
|
135
|
|
570
|
|
(526
|
)
|
179
|
|
|||||
Total revenues
|
—
|
|
5,662
|
|
2,654
|
|
(524
|
)
|
7,792
|
|
|||||
Operating expenses
|
|
|
|
|
|
||||||||||
Compensation and benefits
|
—
|
|
1,042
|
|
490
|
|
8
|
|
1,540
|
|
|||||
Fuel
|
—
|
|
695
|
|
187
|
|
—
|
|
882
|
|
|||||
Materials
|
—
|
|
142
|
|
53
|
|
15
|
|
210
|
|
|||||
Equipment rents
|
—
|
|
177
|
|
(9
|
)
|
(31
|
)
|
137
|
|
|||||
Depreciation and amortization
|
—
|
|
423
|
|
283
|
|
—
|
|
706
|
|
|||||
Purchased services and other
|
—
|
|
967
|
|
742
|
|
(516
|
)
|
1,193
|
|
|||||
Total operating expenses
|
—
|
|
3,446
|
|
1,746
|
|
(524
|
)
|
4,668
|
|
|||||
Operating income
|
—
|
|
2,216
|
|
908
|
|
—
|
|
3,124
|
|
|||||
Less:
|
|
|
|
|
|
||||||||||
Other (income) expense
|
(12
|
)
|
(86
|
)
|
9
|
|
—
|
|
(89
|
)
|
|||||
Other components of net periodic benefit (recovery) cost
|
—
|
|
(388
|
)
|
7
|
|
—
|
|
(381
|
)
|
|||||
Net interest (income) expense
|
(1
|
)
|
474
|
|
(25
|
)
|
—
|
|
448
|
|
|||||
Income before income tax expense and equity in net earnings of subsidiaries
|
13
|
|
2,216
|
|
917
|
|
—
|
|
3,146
|
|
|||||
Less: Income tax expense
|
3
|
|
522
|
|
181
|
|
—
|
|
706
|
|
|||||
Add: Equity in net earnings of subsidiaries
|
2,430
|
|
736
|
|
—
|
|
(3,166
|
)
|
—
|
|
|||||
Net income
|
$
|
2,440
|
|
$
|
2,430
|
|
$
|
736
|
|
$
|
(3,166
|
)
|
$
|
2,440
|
|
(in millions of Canadian dollars)
|
CPRL (Parent Guarantor)
|
|
CPRC (Subsidiary Issuer)
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments and Eliminations
|
|
CPRL Consolidated
|
|
|||||
Revenues
|
|
|
|
|
|
||||||||||
Freight
|
$
|
—
|
|
$
|
5,098
|
|
$
|
2,054
|
|
$
|
—
|
|
$
|
7,152
|
|
Non-freight
|
—
|
|
120
|
|
361
|
|
(317
|
)
|
164
|
|
|||||
Total revenues
|
—
|
|
5,218
|
|
2,415
|
|
(317
|
)
|
7,316
|
|
|||||
Operating expenses
|
|
|
|
|
|
||||||||||
Compensation and benefits
|
—
|
|
996
|
|
466
|
|
6
|
|
1,468
|
|
|||||
Fuel
|
—
|
|
716
|
|
202
|
|
—
|
|
918
|
|
|||||
Materials
|
—
|
|
139
|
|
49
|
|
13
|
|
201
|
|
|||||
Equipment rents
|
—
|
|
137
|
|
(7
|
)
|
—
|
|
130
|
|
|||||
Depreciation and amortization
|
—
|
|
424
|
|
272
|
|
—
|
|
696
|
|
|||||
Purchased services and other
|
—
|
|
886
|
|
522
|
|
(336
|
)
|
1,072
|
|
|||||
Total operating expenses
|
—
|
|
3,298
|
|
1,504
|
|
(317
|
)
|
4,485
|
|
|||||
Operating income
|
—
|
|
1,920
|
|
911
|
|
—
|
|
2,831
|
|
|||||
Less:
|
|
|
|
|
|
||||||||||
Other expense (income)
|
19
|
|
193
|
|
(38
|
)
|
—
|
|
174
|
|
|||||
Other components of net periodic benefit (recovery) cost
|
—
|
|
(386
|
)
|
2
|
|
—
|
|
(384
|
)
|
|||||
Net interest expense (income)
|
3
|
|
478
|
|
(28
|
)
|
—
|
|
453
|
|
|||||
(Loss) income before income tax (recovery) expense and equity in net earnings of subsidiaries
|
(22
|
)
|
1,635
|
|
975
|
|
—
|
|
2,588
|
|
|||||
Less: Income tax (recovery) expense
|
(4
|
)
|
469
|
|
172
|
|
—
|
|
637
|
|
|||||
Add: Equity in net earnings of subsidiaries
|
1,969
|
|
803
|
|
—
|
|
(2,772
|
)
|
—
|
|
|||||
Net income
|
$
|
1,951
|
|
$
|
1,969
|
|
$
|
803
|
|
$
|
(2,772
|
)
|
$
|
1,951
|
|
(in millions of Canadian dollars)
|
CPRL (Parent Guarantor)
|
|
CPRC (Subsidiary Issuer)
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments and Eliminations
|
|
CPRL Consolidated
|
|
|||||
Revenues
|
|
|
|
|
|
||||||||||
Freight
|
$
|
—
|
|
$
|
4,516
|
|
$
|
1,859
|
|
$
|
—
|
|
$
|
6,375
|
|
Non-freight
|
—
|
|
140
|
|
372
|
|
(333
|
)
|
179
|
|
|||||
Total revenues
|
—
|
|
4,656
|
|
2,231
|
|
(333
|
)
|
6,554
|
|
|||||
Operating expenses
|
|
|
|
|
|
||||||||||
Compensation and benefits
|
—
|
|
879
|
|
423
|
|
7
|
|
1,309
|
|
|||||
Fuel
|
—
|
|
522
|
|
155
|
|
—
|
|
677
|
|
|||||
Materials
|
—
|
|
134
|
|
41
|
|
15
|
|
190
|
|
|||||
Equipment rents
|
—
|
|
143
|
|
(1
|
)
|
—
|
|
142
|
|
|||||
Depreciation and amortization
|
—
|
|
400
|
|
261
|
|
—
|
|
661
|
|
|||||
Purchased services and other
|
—
|
|
826
|
|
585
|
|
(355
|
)
|
1,056
|
|
|||||
Total operating expenses
|
—
|
|
2,904
|
|
1,464
|
|
(333
|
)
|
4,035
|
|
|||||
Operating income
|
—
|
|
1,752
|
|
767
|
|
—
|
|
2,519
|
|
|||||
Less:
|
|
|
|
|
|
||||||||||
Other (income) expense
|
(33
|
)
|
(149
|
)
|
4
|
|
—
|
|
(178
|
)
|
|||||
Other components of net periodic benefit (recovery) cost
|
—
|
|
(278
|
)
|
4
|
|
—
|
|
(274
|
)
|
|||||
Net interest (income) expense
|
(12
|
)
|
517
|
|
(32
|
)
|
—
|
|
473
|
|
|||||
Income before income tax expense (recovery) and equity in net earnings of subsidiaries
|
45
|
|
1,662
|
|
791
|
|
—
|
|
2,498
|
|
|||||
Less: Income tax expense (recovery)
|
7
|
|
475
|
|
(389
|
)
|
—
|
|
93
|
|
|||||
Add: Equity in net earnings of subsidiaries
|
2,367
|
|
1,180
|
|
—
|
|
(3,547
|
)
|
—
|
|
|||||
Net income
|
$
|
2,405
|
|
$
|
2,367
|
|
$
|
1,180
|
|
$
|
(3,547
|
)
|
$
|
2,405
|
|
(in millions of Canadian dollars)
|
CPRL (Parent Guarantor)
|
|
CPRC (Subsidiary Issuer)
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments and Eliminations
|
|
CPRL Consolidated
|
|
|||||
Net income
|
$
|
2,440
|
|
$
|
2,430
|
|
$
|
736
|
|
$
|
(3,166
|
)
|
$
|
2,440
|
|
Net gain (loss) in foreign currency translation adjustments, net of hedging activities
|
—
|
|
288
|
|
(251
|
)
|
—
|
|
37
|
|
|||||
Change in derivatives designated as cash flow hedges
|
—
|
|
10
|
|
—
|
|
—
|
|
10
|
|
|||||
Change in pension and post-retirement defined
benefit plans |
—
|
|
(651
|
)
|
(10
|
)
|
—
|
|
(661
|
)
|
|||||
Other comprehensive loss before income taxes
|
—
|
|
(353
|
)
|
(261
|
)
|
—
|
|
(614
|
)
|
|||||
Income tax recovery on above items
|
—
|
|
132
|
|
3
|
|
—
|
|
135
|
|
|||||
Equity accounted investments
|
(479
|
)
|
(258
|
)
|
—
|
|
737
|
|
—
|
|
|||||
Other comprehensive loss
|
(479
|
)
|
(479
|
)
|
(258
|
)
|
737
|
|
(479
|
)
|
|||||
Comprehensive income
|
$
|
1,961
|
|
$
|
1,951
|
|
$
|
478
|
|
$
|
(2,429
|
)
|
$
|
1,961
|
|
(in millions of Canadian dollars)
|
CPRL (Parent Guarantor)
|
|
CPRC (Subsidiary Issuer)
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments and Eliminations
|
|
CPRL Consolidated
|
|
|||||
Net income
|
$
|
1,951
|
|
$
|
1,969
|
|
$
|
803
|
|
$
|
(2,772
|
)
|
$
|
1,951
|
|
Net (loss) gain in foreign currency translation adjustments, net of hedging activities
|
—
|
|
(479
|
)
|
419
|
|
—
|
|
(60
|
)
|
|||||
Change in derivatives designated as cash flow hedges
|
—
|
|
38
|
|
—
|
|
—
|
|
38
|
|
|||||
Change in pension and post-retirement defined
benefit plans |
—
|
|
(455
|
)
|
6
|
|
—
|
|
(449
|
)
|
|||||
Other comprehensive (loss) income before income taxes
|
—
|
|
(896
|
)
|
425
|
|
—
|
|
(471
|
)
|
|||||
Income tax recovery (expense) on above items
|
—
|
|
171
|
|
(2
|
)
|
—
|
|
169
|
|
|||||
Equity accounted investments
|
(302
|
)
|
423
|
|
—
|
|
(121
|
)
|
—
|
|
|||||
Other comprehensive (loss) income
|
(302
|
)
|
(302
|
)
|
423
|
|
(121
|
)
|
(302
|
)
|
|||||
Comprehensive income
|
$
|
1,649
|
|
$
|
1,667
|
|
$
|
1,226
|
|
$
|
(2,893
|
)
|
$
|
1,649
|
|
(in millions of Canadian dollars)
|
CPRL (Parent Guarantor)
|
|
CPRC (Subsidiary Issuer)
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments and Eliminations
|
|
CPRL Consolidated
|
|
|||||
Net income
|
$
|
2,405
|
|
$
|
2,367
|
|
$
|
1,180
|
|
$
|
(3,547
|
)
|
$
|
2,405
|
|
Net gain (loss) in foreign currency translation adjustments, net of hedging activities
|
—
|
|
318
|
|
(294
|
)
|
—
|
|
24
|
|
|||||
Change in derivatives designated as cash flow hedges
|
—
|
|
19
|
|
—
|
|
—
|
|
19
|
|
|||||
Change in pension and post-retirement defined
benefit plans |
—
|
|
82
|
|
(2
|
)
|
—
|
|
80
|
|
|||||
Other comprehensive income (loss) before income taxes
|
—
|
|
419
|
|
(296
|
)
|
—
|
|
123
|
|
|||||
Income tax (expense) recovery on above items
|
—
|
|
(66
|
)
|
1
|
|
—
|
|
(65
|
)
|
|||||
Equity accounted investments
|
58
|
|
(295
|
)
|
—
|
|
237
|
|
—
|
|
|||||
Other comprehensive income (loss)
|
58
|
|
58
|
|
(295
|
)
|
237
|
|
58
|
|
|||||
Comprehensive income
|
$
|
2,463
|
|
$
|
2,425
|
|
$
|
885
|
|
$
|
(3,310
|
)
|
$
|
2,463
|
|
(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
|
$
|
—
|
|
$
|
37
|
|
$
|
96
|
|
$
|
—
|
|
$
|
133
|
|
Accounts receivable, net
|
24
|
|
597
|
|
184
|
|
—
|
|
805
|
|
|||||
Accounts receivable, intercompany
|
164
|
|
313
|
|
249
|
|
(726
|
)
|
—
|
|
|||||
Short-term advances to affiliates
|
—
|
|
1,387
|
|
3,700
|
|
(5,087
|
)
|
—
|
|
|||||
Materials and supplies
|
—
|
|
144
|
|
38
|
|
—
|
|
182
|
|
|||||
Other current assets
|
—
|
|
41
|
|
49
|
|
—
|
|
90
|
|
|||||
|
188
|
|
2,519
|
|
4,316
|
|
(5,813
|
)
|
1,210
|
|
|||||
Long-term advances to affiliates
|
1,090
|
|
7
|
|
84
|
|
(1,181
|
)
|
—
|
|
|||||
Investments
|
—
|
|
32
|
|
309
|
|
—
|
|
341
|
|
|||||
Investments in subsidiaries
|
10,522
|
|
11,165
|
|
—
|
|
(21,687
|
)
|
—
|
|
|||||
Properties
|
—
|
|
10,287
|
|
8,869
|
|
—
|
|
19,156
|
|
|||||
Goodwill and intangible assets
|
—
|
|
—
|
|
206
|
|
—
|
|
206
|
|
|||||
Pension asset
|
—
|
|
1,003
|
|
—
|
|
—
|
|
1,003
|
|
|||||
Other assets
|
—
|
|
173
|
|
278
|
|
—
|
|
451
|
|
|||||
Deferred income taxes
|
4
|
|
—
|
|
—
|
|
(4
|
)
|
—
|
|
|||||
Total assets
|
$
|
11,804
|
|
$
|
25,186
|
|
$
|
14,062
|
|
$
|
(28,685
|
)
|
$
|
22,367
|
|
Liabilities and shareholders’ equity
|
|
|
|
|
|
||||||||||
Current liabilities
|
|
|
|
|
|
||||||||||
Accounts payable and accrued liabilities
|
$
|
146
|
|
$
|
1,189
|
|
$
|
358
|
|
$
|
—
|
|
$
|
1,693
|
|
Accounts payable, intercompany
|
6
|
|
402
|
|
318
|
|
(726
|
)
|
—
|
|
|||||
Short-term advances from affiliates
|
4,583
|
|
490
|
|
14
|
|
(5,087
|
)
|
—
|
|
|||||
Long-term debt maturing within one year
|
—
|
|
548
|
|
51
|
|
—
|
|
599
|
|
|||||
|
4,735
|
|
2,629
|
|
741
|
|
(5,813
|
)
|
2,292
|
|
|||||
Pension and other benefit liabilities
|
—
|
|
698
|
|
87
|
|
—
|
|
785
|
|
|||||
Long-term advances from affiliates
|
—
|
|
1,174
|
|
7
|
|
(1,181
|
)
|
—
|
|
|||||
Other long-term liabilities
|
—
|
|
206
|
|
356
|
|
—
|
|
562
|
|
|||||
Long-term debt
|
—
|
|
8,145
|
|
13
|
|
—
|
|
8,158
|
|
|||||
Deferred income taxes
|
—
|
|
1,812
|
|
1,693
|
|
(4
|
)
|
3,501
|
|
|||||
Total liabilities
|
4,735
|
|
14,664
|
|
2,897
|
|
(6,998
|
)
|
15,298
|
|
|||||
Shareholders’ equity
|
|
|
|
|
|
||||||||||
Share capital
|
1,993
|
|
538
|
|
4,610
|
|
(5,148
|
)
|
1,993
|
|
|||||
Additional paid-in capital
|
48
|
|
406
|
|
265
|
|
(671
|
)
|
48
|
|
|||||
Accumulated other comprehensive (loss) income
|
(2,522
|
)
|
(2,522
|
)
|
581
|
|
1,941
|
|
(2,522
|
)
|
|||||
Retained earnings
|
7,550
|
|
12,100
|
|
5,709
|
|
(17,809
|
)
|
7,550
|
|
|||||
|
7,069
|
|
10,522
|
|
11,165
|
|
(21,687
|
)
|
7,069
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
11,804
|
|
$
|
25,186
|
|
$
|
14,062
|
|
$
|
(28,685
|
)
|
$
|
22,367
|
|
(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
|
$
|
—
|
|
$
|
42
|
|
$
|
19
|
|
$
|
—
|
|
$
|
61
|
|
Accounts receivable, net
|
—
|
|
629
|
|
186
|
|
—
|
|
815
|
|
|||||
Accounts receivable, intercompany
|
125
|
|
167
|
|
224
|
|
(516
|
)
|
—
|
|
|||||
Short-term advances to affiliates
|
—
|
|
1,602
|
|
4,651
|
|
(6,253
|
)
|
—
|
|
|||||
Materials and supplies
|
—
|
|
136
|
|
37
|
|
—
|
|
173
|
|
|||||
Other current assets
|
—
|
|
39
|
|
29
|
|
—
|
|
68
|
|
|||||
|
125
|
|
2,615
|
|
5,146
|
|
(6,769
|
)
|
1,117
|
|
|||||
Long-term advances to affiliates
|
1,090
|
|
5
|
|
93
|
|
(1,188
|
)
|
—
|
|
|||||
Investments
|
—
|
|
24
|
|
179
|
|
—
|
|
203
|
|
|||||
Investments in subsidiaries
|
11,443
|
|
12,003
|
|
—
|
|
(23,446
|
)
|
—
|
|
|||||
Properties
|
—
|
|
9,579
|
|
8,839
|
|
—
|
|
18,418
|
|
|||||
Goodwill and intangible assets
|
—
|
|
—
|
|
202
|
|
—
|
|
202
|
|
|||||
Pension asset
|
—
|
|
1,243
|
|
—
|
|
—
|
|
1,243
|
|
|||||
Other assets
|
—
|
|
57
|
|
14
|
|
—
|
|
71
|
|
|||||
Deferred income taxes
|
6
|
|
—
|
|
—
|
|
(6
|
)
|
—
|
|
|||||
Total assets
|
$
|
12,664
|
|
$
|
25,526
|
|
$
|
14,473
|
|
$
|
(31,409
|
)
|
$
|
21,254
|
|
Liabilities and shareholders’ equity
|
|
|
|
|
|
||||||||||
Current liabilities
|
|
|
|
|
|
||||||||||
Accounts payable and accrued liabilities
|
$
|
115
|
|
$
|
1,017
|
|
$
|
317
|
|
$
|
—
|
|
$
|
1,449
|
|
Accounts payable, intercompany
|
4
|
|
344
|
|
168
|
|
(516
|
)
|
—
|
|
|||||
Short-term advances from affiliates
|
5,909
|
|
341
|
|
3
|
|
(6,253
|
)
|
—
|
|
|||||
Long-term debt maturing within one year
|
—
|
|
506
|
|
—
|
|
—
|
|
506
|
|
|||||
|
6,028
|
|
2,208
|
|
488
|
|
(6,769
|
)
|
1,955
|
|
|||||
Pension and other benefit liabilities
|
—
|
|
639
|
|
79
|
|
—
|
|
718
|
|
|||||
Long-term advances from affiliates
|
—
|
|
1,182
|
|
6
|
|
(1,188
|
)
|
—
|
|
|||||
Other long-term liabilities
|
—
|
|
120
|
|
117
|
|
—
|
|
237
|
|
|||||
Long-term debt
|
—
|
|
8,135
|
|
55
|
|
—
|
|
8,190
|
|
|||||
Deferred income taxes
|
—
|
|
1,799
|
|
1,725
|
|
(6
|
)
|
3,518
|
|
|||||
Total liabilities
|
6,028
|
|
14,083
|
|
2,470
|
|
(7,963
|
)
|
14,618
|
|
|||||
Shareholders’ equity
|
|
|
|
|
|
||||||||||
Share capital
|
2,002
|
|
538
|
|
5,946
|
|
(6,484
|
)
|
2,002
|
|
|||||
Additional paid-in capital
|
42
|
|
1,656
|
|
92
|
|
(1,748
|
)
|
42
|
|
|||||
Accumulated other comprehensive (loss) income
|
(2,043
|
)
|
(2,043
|
)
|
839
|
|
1,204
|
|
(2,043
|
)
|
|||||
Retained earnings
|
6,635
|
|
11,292
|
|
5,126
|
|
(16,418
|
)
|
6,635
|
|
|||||
|
6,636
|
|
11,443
|
|
12,003
|
|
(23,446
|
)
|
6,636
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
12,664
|
|
$
|
25,526
|
|
$
|
14,473
|
|
$
|
(31,409
|
)
|
$
|
21,254
|
|
(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
|
$
|
1,601
|
|
$
|
2,133
|
|
$
|
1,026
|
|
$
|
(1,770
|
)
|
$
|
2,990
|
|
Investing activities
|
|
|
|
|
|
||||||||||
Additions to properties
|
—
|
|
(1,243
|
)
|
(404
|
)
|
—
|
|
(1,647
|
)
|
|||||
Investment in Central Maine & Québec Railway
|
—
|
|
(47
|
)
|
(127
|
)
|
—
|
|
(174
|
)
|
|||||
Proceeds from sale of properties and other assets
|
—
|
|
21
|
|
5
|
|
—
|
|
26
|
|
|||||
Advances to affiliates
|
—
|
|
(263
|
)
|
(396
|
)
|
659
|
|
—
|
|
|||||
Repayment of advances to affiliates
|
—
|
|
468
|
|
1,350
|
|
(1,818
|
)
|
—
|
|
|||||
Capital contributions to affiliates
|
—
|
|
(125
|
)
|
—
|
|
125
|
|
—
|
|
|||||
Repurchase of share capital from affiliates
|
1,246
|
|
1,345
|
|
—
|
|
(2,591
|
)
|
—
|
|
|||||
Other
|
—
|
|
1
|
|
(9
|
)
|
—
|
|
(8
|
)
|
|||||
Cash provided by (used in) investing activities
|
1,246
|
|
157
|
|
419
|
|
(3,625
|
)
|
(1,803
|
)
|
|||||
Financing activities
|
|
|
|
|
|
||||||||||
Dividends paid
|
(412
|
)
|
(1,612
|
)
|
(158
|
)
|
1,770
|
|
(412
|
)
|
|||||
Issuance of share capital
|
—
|
|
—
|
|
125
|
|
(125
|
)
|
—
|
|
|||||
Return of share capital to affiliates
|
—
|
|
(1,246
|
)
|
(1,345
|
)
|
2,591
|
|
—
|
|
|||||
Issuance of CP Common Shares
|
26
|
|
—
|
|
—
|
|
—
|
|
26
|
|
|||||
Purchase of CP Common Shares
|
(1,132
|
)
|
(2
|
)
|
—
|
|
—
|
|
(1,134
|
)
|
|||||
Issuance of long-term debt, excluding commercial paper
|
—
|
|
397
|
|
—
|
|
—
|
|
397
|
|
|||||
Repayment of long-term debt, excluding commercial paper
|
—
|
|
(500
|
)
|
—
|
|
—
|
|
(500
|
)
|
|||||
Net issuance of commercial paper
|
—
|
|
524
|
|
—
|
|
—
|
|
524
|
|
|||||
Advances from affiliates
|
495
|
|
151
|
|
13
|
|
(659
|
)
|
—
|
|
|||||
Repayment of advances from affiliates
|
(1,813
|
)
|
(5
|
)
|
—
|
|
1,818
|
|
—
|
|
|||||
Other
|
(11
|
)
|
(1
|
)
|
—
|
|
—
|
|
(12
|
)
|
|||||
Cash used in financing activities
|
(2,847
|
)
|
(2,294
|
)
|
(1,365
|
)
|
5,395
|
|
(1,111
|
)
|
|||||
Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents
|
—
|
|
(1
|
)
|
(3
|
)
|
—
|
|
(4
|
)
|
|||||
Cash position
|
|
|
|
|
|
||||||||||
(Decrease) increase in cash and cash equivalents
|
—
|
|
(5
|
)
|
77
|
|
—
|
|
72
|
|
|||||
Cash and cash equivalents at beginning of year
|
—
|
|
42
|
|
19
|
|
—
|
|
61
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
—
|
|
$
|
37
|
|
$
|
96
|
|
$
|
—
|
|
$
|
133
|
|
(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
|
$
|
316
|
|
$
|
1,968
|
|
$
|
1,128
|
|
$
|
(700
|
)
|
$
|
2,712
|
|
Investing activities
|
|
|
|
|
|
||||||||||
Additions to properties
|
—
|
|
(971
|
)
|
(580
|
)
|
—
|
|
(1,551
|
)
|
|||||
Proceeds from sale of properties and other assets
|
—
|
|
35
|
|
43
|
|
—
|
|
78
|
|
|||||
Advances to affiliates
|
—
|
|
(611
|
)
|
(209
|
)
|
820
|
|
—
|
|
|||||
Repayment of advances to affiliates
|
—
|
|
—
|
|
866
|
|
(866
|
)
|
—
|
|
|||||
Repurchase of share capital from affiliates
|
500
|
|
964
|
|
—
|
|
(1,464
|
)
|
—
|
|
|||||
Other
|
—
|
|
18
|
|
(3
|
)
|
—
|
|
15
|
|
|||||
Cash provided by (used in) investing activities
|
500
|
|
(565
|
)
|
117
|
|
(1,510
|
)
|
(1,458
|
)
|
|||||
Financing activities
|
|
|
|
|
|
||||||||||
Dividends paid
|
(348
|
)
|
(348
|
)
|
(352
|
)
|
700
|
|
(348
|
)
|
|||||
Return of share capital to affiliates
|
—
|
|
(500
|
)
|
(964
|
)
|
1,464
|
|
—
|
|
|||||
Issuance of CP Common Shares
|
24
|
|
—
|
|
—
|
|
—
|
|
24
|
|
|||||
Purchase of CP Common Shares
|
(1,103
|
)
|
—
|
|
—
|
|
—
|
|
(1,103
|
)
|
|||||
Issuance of long-term debt, excluding commercial paper
|
—
|
|
638
|
|
—
|
|
—
|
|
638
|
|
|||||
Repayment of long-term debt, excluding commercial paper
|
—
|
|
(753
|
)
|
—
|
|
—
|
|
(753
|
)
|
|||||
Advances from affiliates
|
820
|
|
—
|
|
—
|
|
(820
|
)
|
—
|
|
|||||
Repayment of advances from affiliates
|
(209
|
)
|
(657
|
)
|
—
|
|
866
|
|
—
|
|
|||||
Cash used in financing activities
|
(816
|
)
|
(1,620
|
)
|
(1,316
|
)
|
2,210
|
|
(1,542
|
)
|
|||||
Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents
|
—
|
|
18
|
|
(7
|
)
|
—
|
|
11
|
|
|||||
Cash position
|
|
|
|
|
|
||||||||||
Decrease in cash and cash equivalents
|
—
|
|
(199
|
)
|
(78
|
)
|
—
|
|
(277
|
)
|
|||||
Cash and cash equivalents at beginning of year
|
—
|
|
241
|
|
97
|
|
—
|
|
338
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
—
|
|
$
|
42
|
|
$
|
19
|
|
$
|
—
|
|
$
|
61
|
|
(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
|
$
|
338
|
|
$
|
1,334
|
|
$
|
989
|
|
$
|
(479
|
)
|
$
|
2,182
|
|
Investing activities
|
|
|
|
|
|
||||||||||
Additions to properties
|
—
|
|
(950
|
)
|
(390
|
)
|
—
|
|
(1,340
|
)
|
|||||
Proceeds from sale of properties and other assets
|
—
|
|
29
|
|
13
|
|
—
|
|
42
|
|
|||||
Advances to affiliates
|
(590
|
)
|
(550
|
)
|
(1,528
|
)
|
2,668
|
|
—
|
|
|||||
Repayment of advances to affiliates
|
—
|
|
242
|
|
243
|
|
(485
|
)
|
—
|
|
|||||
Capital contributions to affiliates
|
—
|
|
(1,039
|
)
|
—
|
|
1,039
|
|
—
|
|
|||||
Repurchase of share capital from affiliates
|
—
|
|
156
|
|
—
|
|
(156
|
)
|
—
|
|
|||||
Other
|
—
|
|
5
|
|
(2
|
)
|
—
|
|
3
|
|
|||||
Cash used in investing activities
|
(590
|
)
|
(2,107
|
)
|
(1,664
|
)
|
3,066
|
|
(1,295
|
)
|
|||||
Financing activities
|
|
|
|
|
|
||||||||||
Dividends paid
|
(310
|
)
|
(310
|
)
|
(169
|
)
|
479
|
|
(310
|
)
|
|||||
Issuance of share capital
|
—
|
|
—
|
|
1,039
|
|
(1,039
|
)
|
—
|
|
|||||
Return of share capital to affiliates
|
—
|
|
—
|
|
(156
|
)
|
156
|
|
—
|
|
|||||
Issuance of CP Common Shares
|
45
|
|
—
|
|
—
|
|
—
|
|
45
|
|
|||||
Purchase of CP Common Shares
|
(381
|
)
|
—
|
|
—
|
|
—
|
|
(381
|
)
|
|||||
Repayment of long-term debt, excluding commercial paper
|
—
|
|
(32
|
)
|
—
|
|
—
|
|
(32
|
)
|
|||||
Advances from affiliates
|
1,383
|
|
1,285
|
|
—
|
|
(2,668
|
)
|
—
|
|
|||||
Repayment of advances from affiliates
|
(485
|
)
|
—
|
|
—
|
|
485
|
|
—
|
|
|||||
Settlement of forward starting swaps
|
—
|
|
(22
|
)
|
—
|
|
—
|
|
(22
|
)
|
|||||
Cash provided by (used in) financing activities
|
252
|
|
921
|
|
714
|
|
(2,587
|
)
|
(700
|
)
|
|||||
Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents
|
—
|
|
(7
|
)
|
(6
|
)
|
—
|
|
(13
|
)
|
|||||
Cash position
|
|
|
|
|
|
||||||||||
Increase in cash and cash equivalents
|
—
|
|
141
|
|
33
|
|
—
|
|
174
|
|
|||||
Cash and cash equivalents at beginning of year
|
—
|
|
100
|
|
64
|
|
—
|
|
164
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
—
|
|
$
|
241
|
|
$
|
97
|
|
$
|
—
|
|
$
|
338
|
|
(a)
|
Financial Statements
|
(b)
|
Financial Statement Schedule
|
(in millions of Canadian dollars)
|
Beginning balance at January 1
|
|
Additions charged to expenses
|
|
Payments and other reductions
|
|
Impact of FX
|
|
Ending
balance at December 31 |
|
|||||
Accruals for personal injury and other claims provision(1)
|
|||||||||||||||
2017
|
$
|
130
|
|
$
|
66
|
|
$
|
(77
|
)
|
$
|
(1
|
)
|
$
|
118
|
|
2018
|
$
|
118
|
|
$
|
93
|
|
$
|
(60
|
)
|
$
|
1
|
|
$
|
152
|
|
2019
|
$
|
152
|
|
$
|
142
|
|
$
|
(152
|
)
|
$
|
(1
|
)
|
$
|
141
|
|
Environmental liabilities
|
|||||||||||||||
2017
|
$
|
85
|
|
$
|
5
|
|
$
|
(8
|
)
|
$
|
(4
|
)
|
$
|
78
|
|
2018
|
$
|
78
|
|
$
|
6
|
|
$
|
(7
|
)
|
$
|
5
|
|
$
|
82
|
|
2019
|
$
|
82
|
|
$
|
6
|
|
$
|
(8
|
)
|
$
|
(3
|
)
|
$
|
77
|
|
(c)
|
Exhibits
|
Exhibit
|
Description
|
3
|
Articles of Incorporation and Bylaws:
|
4
|
Instruments Defining the Rights of Security Holders, Including Indentures:
|
|
|
10
|
Material Contracts:
|
|
|
|
|
101.INS**
|
Inline XBRL Instance Document
|
101.SCH**
|
Inline XBRL Taxonomy Extension Schema Document
|
101.CAL**
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
101.LAB**
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
101.DEF**
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
101.PRE**
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
104 **
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
|
|
The following financial information from Canadian Pacific Railway Limited’s Annual Report on Form 10-K for the year ended December 31, 2019, formatted in Extensible Business Reporting Language (XBRL) includes: (i) the Consolidated Statements of Income of each of the three years ended December 31, 2019, 2018, and 2017; (ii) the Consolidated Statements of Comprehensive Income for each of the three years ended December 31, 2019, 2018, and 2017; (iii) the Consolidated Balance Sheets at December 31, 2019 and 2018; (iv) the Consolidated Statements of Cash Flows for each of the three years ended December 31, 2019, 2018, and 2017; (v) the Consolidated Statements of Changes in Shareholders’ Equity for each of the three years ended December 31, 2019, 2018, and 2017; and (vi) the Notes to Consolidated Financial Statements.
|
CANADIAN PACIFIC RAILWAY LIMITED
|
|
(Registrant)
|
|
By:
|
/s/ KEITH CREEL
|
|
Keith Creel
|
|
Chief Executive Officer
|
Signature
|
Title
|
/s/ KEITH CREEL
|
Chief Executive Officer and Director
|
Keith Creel
|
(Principal Executive Officer)
|
|
|
/s/ NADEEM VELANI
|
Executive Vice-President and Chief Financial Officer
|
Nadeem Velani
|
(Principal Financial Officer)
|
|
|
/s/ ISABELLE COURVILLE
|
Chair of the Board of Directors
|
Isabelle Courville
|
|
|
|
/s/ JOHN R. BAIRD
|
Director
|
John R. Baird
|
|
|
|
/s/ GILLIAN H. DENHAM
|
Director
|
Gillian H. Denham
|
|
|
|
/s/ EDWARD R. HAMBERGER
|
Director
|
Edward R. Hamberger
|
|
|
|
/s/ REBECCA MACDONALD
|
Director
|
Rebecca MacDonald
|
|
|
|
/s/ EDWARD L. MONSER
|
Director
|
Edward L. Monser
|
|
|
|
/s/ MATTHEW H. PAULL
|
Director
|
Matthew H. Paull
|
|
|
|
/s/ JANE L. PEVERETT
|
Director
|
Jane L. Peverett
|
|
|
|
/s/ ANDREA ROBERTSON
|
Director
|
Andrea Robertson
|
|
|
|
/s/ GORDON T. TRAFTON
|
Director
|
Gordon T. Trafton
|
|
|
(1)
|
change any maximum number of shares that the Corporation is authorized to issue;
|
|
(2)
|
create new classes of shares;
|
|
(3)
|
reduce or increase its stated capital, if its stated capital is set out in the articles;
|
|
(4)
|
change the designation of all or any of its shares and add, change or remove any rights, privileges, restrictions and conditions, including rights to accrued dividends, in respect of all or any of its shares, whether issued or unissued;
|
|
(5)
|
change the shares of any class or series, whether issued or unissued, into a different number of shares of the same class or series or into the same or a different number of shares of other classes or series;
|
|
(6)
|
divide a class of shares, whether issued or unissued, into series and fix the number of shares in each series and the rights, privileges, restrictions and conditions thereof;
|
|
(7)
|
authorize the directors to divide any class of unissued shares into series and fix the number of shares in each series and the rights, privileges, restrictions and conditions thereof;
|
|
(8)
|
authorize the directors to change the rights, privileges, restrictions and conditions attached to unissued shares of any series;
|
|
(9)
|
revoke, diminish or enlarge any authority conferred under items (7) and (8) above; and,
|
|
(10)
|
add, change or remove restrictions on the issue, transfer or ownership of shares.
|
Significant subsidiary
|
Incorporated under the laws of
|
Canadian Pacific Railway Company
|
Canada
|
6061338 Canada Inc.
|
Canada
|
Mount Stephen Properties Inc.
|
Canada
|
3939804 Canada Inc.
|
Canada
|
6211241 Canada Inc.
|
Canada
|
Dakota, Minnesota & Eastern Railroad Corporation
|
Delaware
|
CP (US) Holding Corporation
|
Delaware
|
Soo Line Holding Company
|
Delaware
|
Soo Line Corporation
|
Minnesota
|
Soo Line Railroad Company
|
Minnesota
|
CPFL S.à.r.l.
|
Luxembourg
|
CPFS AG
|
Switzerland
|
1.
|
I have reviewed this Annual Report on Form 10-K of Canadian Pacific Railway Limited;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
|
Date: February 20, 2020
|
|
/s/ KEITH CREEL
|
|
|
Keith Creel
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K of Canadian Pacific Railway Limited;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
|
Date: February 20, 2020
|
|
/s/ NADEEM VELANI
|
|
|
Nadeem Velani
|
|
|
Executive Vice-President and Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
|
|
Date: February 20, 2020
|
|
|
|
/s/ KEITH CREEL
|
|
|
|
|
Keith Creel
|
|
|
|
|
President and Chief Executive Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
|
|
Date: February 20, 2020
|
|
|
|
/s/ NADEEM VELANI
|
|
|
|
|
Nadeem Velani
|
|
|
|
|
Executive Vice-President and Chief Financial Officer
|