Earnings Per Share

12 Months Ended

Dec. 31, 2018

Earnings Per Share [Abstract]

Earnings Per Share

Basic earnings per share have been calculated using Net income for the year divided by the weighted average number of shares outstanding during the year.

Diluted earnings per share have been calculated using the treasury stock method which assumes that any proceeds received from the exercise of in-the-money options would be used to purchase CP Common Shares at the average market price for the period. For purposes of this calculation, at December 31, 2018, there were 1.3 million dilutive options outstanding (2017 – 1.4 million; 2016 – 2.2 million).

The number of shares used and the earnings per share calculations are reconciled as follows:

(in millions of Canadian dollars, except per share data)	2018		2017		2016
Net income	$	1,951	$	2,405	$	1,599
Weighted average basic shares outstanding (millions)	142.9		145.9		149.6
Dilutive effect of weighted average number of stock options (millions)	0.4		0.4		0.9
Weighted average diluted shares outstanding (millions)	143.3		146.3		150.5
Earnings per share – basic	$	13.65	$	16.49	$	10.69
Earnings per share – diluted	$	13.61	$	16.44	$	10.63

In 2018, the number of options excluded from the computation of diluted earnings per share because their effect was not dilutive was 0.2 million (2017 – 0.3 million; 2016 – 0.4 million).