Condensed Consolidating Financial Information (Tables)

3 Months Ended

Mar. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Interim Condensed Consolidating Statements of Income

For the three months ended March 31, 2019



(in millions of Canadian dollars)	CPRL (Parent Guarantor)			CPRC (Subsidiary Issuer)			Non-Guarantor Subsidiaries			Consolidating Adjustments and Eliminations			CPRL Consolidated
Revenues
Freight	$	—		$	1,244		$	482		$	—		$	1,726
Non-freight	—			29			114			(102		)	41
Total revenues	—			1,273			596			(102		)	1,767
Operating expenses
Compensation and benefits	—			274			130			2			406
Fuel	—			165			44			—			209
Materials	—			38			15			4			57
Equipment rents	—			33			2			—			35
Depreciation and amortization	—			96			64			—			160
Purchased services and other	—			278			187			(108		)	357
Total operating expenses	—			884			442			(102		)	1,224
Operating income	—			389			154			—			543
Less:
Other (income) expense	(5		)	(43		)	1			—			(47		)
Other components of net periodic benefit (recovery) expense	—			(98		)	1			—			(97		)
Net interest (income) expense	(1		)	122			(7		)	—			114
Income before income tax expense and equity in net earnings of subsidiaries	6			408			159			—			573
Less: Income tax expense	—			104			35			—			139
Add: Equity in net earnings of subsidiaries	428			124			—			(552		)	—
Net income	$	434		$	428		$	124		$	(552	)	$	434

Interim Condensed Consolidating Statements of Income

For the three months ended March 31, 2018



(in millions of Canadian dollars)	CPRL (Parent Guarantor)			CPRC (Subsidiary Issuer)			Non-Guarantor Subsidiaries			Consolidating Adjustments and Eliminations			CPRL Consolidated
Revenues
Freight	$	—		$	1,155		$	470		$	—		$	1,625
Non-freight	—			27			89			(79		)	37
Total revenues	—			1,182			559			(79		)	1,662
Operating expenses
Compensation and benefits	—			257			115			2			374
Fuel	—			168			47			—			215
Materials	—			35			15			5			55
Equipment rents	—			31			2			—			33
Depreciation and amortization	—			104			66			—			170
Purchased services and other	—			218			143			(86		)	275
Total operating expenses	—			813			388			(79		)	1,122
Operating income	—			369			171			—			540
Less:
Other expense (income)	6			48			(3		)	—			51
Other components of net periodic benefit recovery	—			(96		)	—			—			(96		)
Net interest expense (income)	8			114			(7		)	—			115
(Loss) income before income tax expense and equity in net earnings of subsidiaries	(14		)	303			181			—			470
Less: Income tax expense	—			86			36			—			122
Add: Equity in net earnings of subsidiaries	362			145			—			(507		)	—
Net income	$	348		$	362		$	145		$	(507	)	$	348

Interim Condensed Consolidating Statements of Comprehensive Income

For the three months ended March 31, 2019



(in millions of Canadian dollars)	CPRL (Parent Guarantor)		CPRC (Subsidiary Issuer)			Non-Guarantor Subsidiaries			Consolidating Adjustments and Eliminations			CPRL Consolidated
Net income	$	434	$	428		$	124		$	(552	)	$	434
Net gain (loss) in foreign currency translation adjustments, net of hedging activities	—		120			(104		)	—			16
Change in derivatives designated as cash flow hedges	—		2			—			—			2
Change in pension and post-retirement defined benefit plans	—		19			1			—			20
Other comprehensive income (loss) before income taxes	—		141			(103		)	—			38
Income tax expense on above items	—		(22		)	—			—			(22		)
Equity accounted investments	16		(103		)	—			87			—
Other comprehensive income (loss)	16		16			(103		)	87			16
Comprehensive income	$	450	$	444		$	21		$	(465	)	$	450

Interim Condensed Consolidating Statements of Comprehensive Income

For the three months ended March 31, 2018



(in millions of Canadian dollars)	CPRL (Parent Guarantor)		CPRC (Subsidiary Issuer)			Non-Guarantor Subsidiaries		Consolidating Adjustments and Eliminations			CPRL Consolidated
Net income	$	348	$	362		$	145	$	(507	)	$	348
Net (loss) gain in foreign currency translation adjustments, net of hedging activities	—		(150		)	130		—			(20		)
Change in derivatives designated as cash flow hedges	—		21			—		—			21
Change in pension and post-retirement defined benefit plans	—		28			1		—			29
Other comprehensive (loss) income before income taxes	—		(101		)	131		—			30
Income tax recovery on above items	—		6			—		—			6
Equity accounted investments	36		131			—		(167		)	—
Other comprehensive income	36		36			131		(167		)	36
Comprehensive income	$	384	$	398		$	276	$	(674	)	$	384

Interim Condensed Consolidating Balance Sheets

Interim Condensed Consolidating Balance Sheets As at March 31, 2019



(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	$	—		$	226		$	126	$	—		$	352
Accounts receivable, net	—			562			182		—			744
Accounts receivable, intercompany	131			166			207		(504		)	—
Short-term advances to affiliates	—			1,205			4,681		(5,886		)	—
Materials and supplies	—			145			37		—			182
Other current assets	—			78			20		—			98
	131			2,382			5,253		(6,390		)	1,376
Long-term advances to affiliates	1,090			5			91		(1,186		)	—
Investments	—			26			175		—			201
Investments in subsidiaries	11,195			12,032			—		(23,227		)	—
Properties	—			9,592			8,720		—			18,312
Goodwill and intangible assets	—			—			198		—			198
Pension asset	—			1,352			—		—			1,352
Other assets	—			141			330		—			471
Deferred income taxes	6			—			—		(6		)	—
Total assets	$	12,422		$	25,530		$	14,767	$	(30,809	)	$	21,910
Liabilities and shareholders’ equity
Current liabilities
Accounts payable and accrued liabilities	$	93		$	864		$	355	$	—		$	1,312
Accounts payable, intercompany	3			335			166		(504		)	—
Short-term advances from affiliates	5,512			370			4		(5,886		)	—
Long-term debt maturing within one year	—			496			—		—			496
	5,608			2,065			525		(6,390		)	1,808
Pension and other benefit liabilities	—			637			77		—			714
Long-term advances from affiliates	—			1,180			6		(1,186		)	—
Other long-term liabilities	—			229			369		—			598
Long-term debt	—			8,373			54		—			8,427
Deferred income taxes	—			1,851			1,704		(6		)	3,549
Total liabilities	5,608			14,335			2,735		(7,582		)	15,096
Shareholders’ equity
Share capital	1,997			537			5,946		(6,483		)	1,997
Additional paid-in capital	46			1,663			94		(1,757		)	46
Accumulated other comprehensive (loss) income	(2,027		)	(2,027		)	736		1,291			(2,027		)
Retained earnings	6,798			11,022			5,256		(16,278		)	6,798
	6,814			11,195			12,032		(23,227		)	6,814
Total liabilities and shareholders’ equity	$	12,422		$	25,530		$	14,767	$	(30,809	)	$	21,910

Condensed Consolidating Balance Sheets

As at December 31, 2018



(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

Interim Condensed Consolidating Statements of Cash Flows

For the three months ended March 31, 2019



(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	$	687		$	198		$	219		$	(691	)	$	413
Investing activities
Additions to properties	—			(141		)	(83		)	—			(224		)
Proceeds from sale of properties and other assets	—			4			2			—			6
Advances to affiliates	—			(250		)	(30		)	280			—
Repayment of advances to affiliates	—			643			—			(643		)	—
Other	—			—			(1		)	—			(1		)
Cash provided by (used in) investing activities	—			256			(112		)	(363		)	(219		)
Financing activities
Dividends paid	(91		)	(691		)	—			691			(91		)
Issuance of CP Common Shares	4			—			—			—			4
Purchase of CP Common Shares	(207		)	—			—			—			(207		)
Issuance of long-term debt, excluding commercial paper	—			397			—			—			397
Repayment of long-term debt, excluding commercial paper	—			(5		)	—			—			(5		)
Advances from affiliates	250			30			—			(280		)	—
Repayment of advances from affiliates	(643		)	—			—			643			—
Cash (used in) provided by financing activities	(687		)	(269		)	—			1,054			98
Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents	—			(1		)	—			—			(1		)
Cash position
Increase in cash and cash equivalents	—			184			107			—			291
Cash and cash equivalents at beginning of period	—			42			19			—			61
Cash and cash equivalents at end of period	$	—		$	226		$	126		$	—		$	352

Interim Condensed Consolidating Statements of Cash Flows

For the three months ended March 31, 2018



(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	$	65		$	392		$	135		$	(195	)	$	397
Investing activities
Additions to properties	—			(122		)	(119		)	—			(241		)
Proceeds from sale of properties and other assets	—			3			1			—			4
Advances to affiliates	—			(307		)	—			307			—
Repayment of advances to affiliates	—			—			502			(502		)	—
Repurchase of share capital from affiliates	—			423			—			(423		)	—
Other	—			—			(1		)	—			(1		)
Cash (used in) provided by investing activities	—			(3		)	383			(618		)	(238		)
Financing activities
Dividends paid	(82		)	(82		)	(113		)	195			(82		)
Return of share capital to affiliates				—			(423		)	423			—
Issuance of CP Common Shares	8			—			—			—			8
Purchase of CP Common Shares	(298		)	—			—			—			(298		)
Repayment of long-term debt, excluding commercial paper	—			(5		)	—			—			(5		)
Advances from affiliates	307			—			—			(307		)	—
Repayment of advances from affiliates	—			(502		)	—			502			—
Cash used in financing activities	(65		)	(589		)	(536		)	813			(377		)
Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents	—			2			3			—			5
Cash position
Decrease in cash and cash equivalents	—			(198		)	(15		)	—			(213		)
Cash and cash equivalents at beginning of period	—			241			97			—			338
Cash and cash equivalents at end of period	$	—		$	43		$	82		$	—		$	125