Condensed Consolidating Financial Information (Tables)

9 Months Ended

Sep. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Interim Condensed Consolidating Statements of Income

Interim Condensed Consolidating Statements of Income

For the three months ended September 30, 2019    

(in millions of Canadian dollars)	CPRL (Parent Guarantor)			CPRC (Subsidiary Issuer)			Non-Guarantor Subsidiaries			Consolidating Adjustments and Eliminations			CPRL Consolidated
Revenues
Freight	$	—		$	1,381		$	551		$	—		$	1,932
Non-freight	—			35			115			(103		)	47
Total revenues	—			1,416			666			(103		)	1,979
Operating expenses
Compensation and benefits	—			238			114			3			355
Fuel	—			164			46			—			210
Materials	—			35			12			3			50
Equipment rents	—			36			(3		)	—			33
Depreciation and amortization	—			112			73			—			185
Purchased services and other	—			194			192			(109		)	277
Total operating expenses	—			779			434			(103		)	1,110
Operating income	—			637			232			—			869
Less:
Other expense (income)	3			27			(1		)	—			29
Other components of net periodic benefit (recovery) expense	—			(100		)	1			—			(99		)
Net interest expense (income)	—			118			(8		)	—			110
(Loss) income before income tax expense and equity in net earnings of subsidiaries	(3		)	592			240			—			829
Less: Income tax expense	1			156			54			—			211
Add: Equity in net earnings of subsidiaries	622			186			—			(808		)	—
Net income	$	618		$	622		$	186		$	(808	)	$	618

Interim Condensed Consolidating Statements of Income

For the three months ended September 30, 2018                 

(in millions of Canadian dollars)	CPRL (Parent Guarantor)			CPRC (Subsidiary Issuer)			Non-Guarantor Subsidiaries			Consolidating Adjustments and Eliminations			CPRL Consolidated
Revenues
Freight	$	—		$	1,316		$	538		$	—		$	1,854
Non-freight	—			31			92			(79		)	44
Total revenues	—			1,347			630			(79		)	1,898
Operating expenses
Compensation and benefits	—			246			117			2			365
Fuel	—			177			49			—			226
Materials	—			33			11			3			47
Equipment rents	—			27			6			—			33
Depreciation and amortization	—			105			69			—			174
Purchased services and other	—			224			123			(84		)	263
Total operating expenses	—			812			375			(79		)	1,108
Operating income	—			535			255			—			790
Less:
Other (income) expense	(4		)	(46		)	3			—			(47		)
Other components of net periodic benefit (recovery) expense	—			(97		)	1			—			(96		)
Net interest (income) expense	(2		)	121			(7		)	—			112
Income before income tax expense and equity in net earnings of subsidiaries	6			557			258			—			821
Less: Income tax (recovery) expense	(1		)	142			58			—			199
Add: Equity in net earnings of subsidiaries	615			200			—			(815		)	—
Net income	$	622		$	615		$	200		$	(815	)	$	622

Interim Condensed Consolidating Statements of Income

For the nine months ended September 30, 2019    

(in millions of Canadian dollars)	CPRL (Parent Guarantor)			CPRC (Subsidiary Issuer)			Non-Guarantor Subsidiaries			Consolidating Adjustments and Eliminations			CPRL Consolidated
Revenues
Freight	$	—		$	4,028		$	1,561		$	—		$	5,589
Non-freight	—			98			344			(308		)	134
Total revenues	—			4,126			1,905			(308		)	5,723
Operating expenses
Compensation and benefits	—			769			369			6			1,144
Fuel	—			518			137			—			655
Materials	—			110			40			11			161
Equipment rents	—			116			(14		)	—			102
Depreciation and amortization	—			318			210			—			528
Purchased services and other	—			712			512			(325		)	899
Total operating expenses	—			2,543			1,254			(308		)	3,489
Operating income	—			1,583			651			—			2,234
Less:
Other (income) expense	(7		)	(54		)	3			—			(58		)
Other components of net periodic benefit (recovery) expense	—			(298		)	4			—			(294		)
Net interest (income) expense	(2		)	360			(22		)	—			336
Income before income tax expense and equity in net earnings of subsidiaries	9			1,575			666			—			2,250
Less: Income tax expense	3			373			98			—			474
Add: Equity in net earnings of subsidiaries	1,770			568			—			(2,338		)	—
Net income	$	1,776		$	1,770		$	568		$	(2,338	)	$	1,776

Interim Condensed Consolidating Statements of Income

For the nine months ended September 30, 2018    

(in millions of Canadian dollars)	CPRL (Parent Guarantor)			CPRC (Subsidiary Issuer)			Non-Guarantor Subsidiaries			Consolidating Adjustments and Eliminations			CPRL Consolidated
Revenues
Freight	$	—		$	3,667		$	1,521		$	—		$	5,188
Non-freight	—			89			271			(238		)	122
Total revenues	—			3,756			1,792			(238		)	5,310
Operating expenses
Compensation and benefits	—			740			346			4			1,090
Fuel	—			523			148			—			671
Materials	—			106			38			11			155
Equipment rents	—			88			11			—			99
Depreciation and amortization	—			314			202			—			516
Purchased services and other	—			647			428			(253		)	822
Total operating expenses	—			2,418			1,173			(238		)	3,353
Operating income	—			1,338			619			—			1,957
Less:
Other expense (income)	7			81			(32		)	—			56
Other components of net periodic benefit (recovery) expense	—			(289		)	2			—			(287		)
Net interest expense (income)	4			356			(21		)	—			339
(Loss) income before income tax expense and equity in net earnings of subsidiaries	(11		)	1,190			670			—			1,849
Less: Income tax (recovery) expense	(2		)	327			118			—			443
Add: Equity in net earnings of subsidiaries	1,415			552			—			(1,967		)	—
Net income	$	1,406		$	1,415		$	552		$	(1,967	)	$	1,406

Interim Condensed Consolidating Statements of Comprehensive Income

Interim Condensed Consolidating Statements of Comprehensive Income

For the three months ended September 30, 2019             

(in millions of Canadian dollars)	CPRL (Parent Guarantor)		CPRC (Subsidiary Issuer)			Non-Guarantor Subsidiaries		Consolidating Adjustments and Eliminations			CPRL Consolidated
Net income	$	618	$	622		$	186	$	(808	)	$	618
Net (loss) gain in foreign currency translation adjustments, net of hedging activities	—		(68		)	60		—			(8		)
Change in derivatives designated as cash flow hedges	—		2			—		—			2
Change in pension and post-retirement defined benefit plans	—		19			1		—			20
Other comprehensive (loss) income before income taxes	—		(47		)	61		—			14
Income tax recovery on above items	—		3			—		—			3
Equity accounted investments	17		61			—		(78		)	—
Other comprehensive income	17		17			61		(78		)	17
Comprehensive income	$	635	$	639		$	247	$	(886	)	$	635

Interim Condensed Consolidating Statements of Comprehensive Income

For the three months ended September 30, 2018     

(in millions of Canadian dollars)	CPRL (Parent Guarantor)		CPRC (Subsidiary Issuer)			Non-Guarantor Subsidiaries			Consolidating Adjustments and Eliminations			CPRL Consolidated
Net income	$	622	$	615		$	200		$	(815	)	$	622
Net gain (loss) in foreign currency translation adjustments, net of hedging activities	—		96			(84		)	—			12
Change in derivatives designated as cash flow hedges	—		1			—			—			1
Change in pension and post-retirement defined benefit plans	—		27			1			—			28
Other comprehensive income (loss) before income taxes	—		124			(83		)	—			41
Income tax expense on above items	—		(22		)	—			—			(22		)
Equity accounted investments	19		(83		)	—			64			—
Other comprehensive income (loss)	19		19			(83		)	64			19
Comprehensive income	$	641	$	634		$	117		$	(751	)	$	641

Interim Condensed Consolidating Statements of Comprehensive Income

For the nine months ended September 30, 2019             

(in millions of Canadian dollars)	CPRL (Parent Guarantor)		CPRC (Subsidiary Issuer)			Non-Guarantor Subsidiaries			Consolidating Adjustments and Eliminations			CPRL Consolidated
Net income	$	1,776	$	1,770		$	568		$	(2,338	)	$	1,776
Net gain (loss) in foreign currency translation adjustments, net of hedging activities	—		173			(150		)	—			23
Change in derivatives designated as cash flow hedges	—		8			—			—			8
Change in pension and post-retirement defined benefit plans	—		58			3			—			61
Other comprehensive income (loss) before income taxes	—		239			(147		)	—			92
Income tax expense on above items	—		(41		)	—			—			(41		)
Equity accounted investments	51		(147		)	—			96			—
Other comprehensive income (loss)	51		51			(147		)	96			51
Comprehensive income	$	1,827	$	1,821		$	421		$	(2,242	)	$	1,827

Interim Condensed Consolidating Statements of Comprehensive Income

For the nine months ended September 30, 2018             

(in millions of Canadian dollars)	CPRL (Parent Guarantor)		CPRC (Subsidiary Issuer)			Non-Guarantor Subsidiaries			Consolidating Adjustments and Eliminations			CPRL Consolidated
Net income	$	1,406	$	1,415		$	552		$	(1,967	)	$	1,406
Net (loss) gain in foreign currency translation adjustments, net of hedging activities	—		(177		)	153			—			(24		)
Change in derivatives designated as cash flow hedges	—		36			—			—			36
Change in pension and post-retirement defined benefit plans	—		82			4			—			86
Other comprehensive (loss) income before income taxes	—		(59		)	157			—			98
Income tax expense on above items	—		(10		)	(1		)	—			(11		)
Equity accounted investments	87		156			—			(243		)	—
Other comprehensive income	87		87			156			(243		)	87
Comprehensive income	$	1,493	$	1,502		$	708		$	(2,210	)	$	1,493

Interim Condensed Consolidating Balance Sheets

Interim Condensed Consolidating Balance Sheets

As at September 30, 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	$	—		$	45		$	100	$	—		$	145
Accounts receivable, net	—			581			189		—			770
Accounts receivable, intercompany	158			136			232		(526		)	—
Short-term advances to affiliates	—			1,099			4,918		(6,017		)	—
Materials and supplies	—			150			38		—			188
Other current assets	—			51			32		—			83
	158			2,062			5,509		(6,543		)	1,186
Long-term advances to affiliates	1,090			6			86		(1,182		)	—
Investments	—			31			184		—			215
Investments in subsidiaries	11,748			12,427			—		(24,175		)	—
Properties	—			10,080			8,829		—			18,909
Goodwill and intangible assets	—			—			195		—			195
Pension asset	—			1,572			—		—			1,572
Other assets	—			167			295		—			462
Deferred income taxes	5			—			—		(5		)	—
Total assets	$	13,001		$	26,345		$	15,098	$	(31,905	)	$	22,539
Liabilities and shareholders’ equity
Current liabilities
Accounts payable and accrued liabilities	$	128		$	926		$	361	$	—		$	1,415
Accounts payable, intercompany	7			383			136		(526		)	—
Short-term advances from affiliates	5,651			363			3		(6,017		)	—
Long-term debt maturing within one year	—			634			41		—			675
	5,786			2,306			541		(6,543		)	2,090
Pension and other benefit liabilities	—			640			72		—			712
Long-term advances from affiliates	—			1,176			6		(1,182		)	—
Other long-term liabilities	—			224			355		—			579
Long-term debt	—			8,295			13		—			8,308
Deferred income taxes	—			1,956			1,684		(5		)	3,635
Total liabilities	5,786			14,597			2,671		(7,730		)	15,324
Shareholders’ equity
Share capital	1,982			537			6,071		(6,608		)	1,982
Additional paid-in capital	45			1,648			96		(1,744		)	45
Accumulated other comprehensive (loss) income	(1,992		)	(1,992		)	692		1,300			(1,992		)
Retained earnings	7,180			11,555			5,568		(17,123		)	7,180
	7,215			11,748			12,427		(24,175		)	7,215
Total liabilities and shareholders’ equity	$	13,001		$	26,345		$	15,098	$	(31,905	)	$	22,539

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

Interim Condensed Consolidating Statements of Cash Flows

For the three months ended September 30, 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	$	709		$	608		$	267		$	(761	)	$	823
Investing activities
Additions to properties	—			(321		)	(143		)	—			(464		)
Proceeds from sale of properties and other assets	—			1			3			—			4
Advances to affiliates	—			—			(7		)	7			—
Repayment of advances to affiliates	—			101			—			(101		)	—
Other	—			—			(1		)	—			(1		)
Cash used in investing activities	—			(219		)	(148		)	(94		)	(461		)
Financing activities
Dividends paid	(116		)	(716		)	(45		)	761			(116		)
Issuance of CP Common Shares	6			—			—			—			6
Purchase of CP Common Shares	(498		)	(2		)	—			—			(500		)
Repayment of long-term debt, excluding commercial paper	—			(6		)	—			—			(6		)
Net issuance of commercial paper	—			355			—			—			355
Advances from affiliates	—			7			—			(7		)	—
Repayment of advances from affiliates	(101		)	—			—			101			—
Other	—			(2		)	—			—			(2		)
Cash used in financing activities	(709		)	(364		)	(45		)	855			(263		)
Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents	—			—			1			—			1
Cash position
Increase in cash and cash equivalents	—			25			75			—			100
Cash and cash equivalents at beginning of period	—			20			25			—			45
Cash and cash equivalents at end of period	$	—		$	45		$	100		$	—		$	145

Interim Condensed Consolidating Statements of Cash Flows

For the three months ended September 30, 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	$	87		$	416		$	319		$	(149	)	$	673
Investing activities
Additions to properties	—			(303		)	(127		)	—			(430		)
Proceeds from sale of properties and other assets	—			4			3			—			7
Advances to affiliates	—			—			(209		)	209			—
Repayment of advances to affiliates	—			499			345			(844		)	—
Repurchase of share capital from affiliates	500			236			—			(736		)	—
Cash provided by (used in) investing activities	500			436			12			(1,371		)	(423		)
Financing activities
Dividends paid	(92		)	(92		)	(57		)	149			(92		)
Return of share capital to affiliates	—			(500		)	(236		)	736			—
Issuance of CP Common Shares	4			—			—			—			4
Repayment of long-term debt, excluding commercial paper	—			(5		)	—			—			(5		)
Net repayment of commercial paper	—			(53		)	—			—			(53		)
Advances from affiliates	209			—			—			(209		)	—
Repayment of advances from affiliates	(708		)	(136		)	—			844			—
Cash used in financing activities	(587		)	(786		)	(293		)	1,520			(146		)
Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents	—			17			(22		)	—			(5		)
Cash position
Increase in cash and cash equivalents	—			83			16			—			99
Cash and cash equivalents at beginning of period	—			20			31			—			51
Cash and cash equivalents at end of period	$	—		$	103		$	47		$	—		$	150

Interim Condensed Consolidating Statements of Cash Flows

For the nine months ended September 30, 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	$	1,494		$	1,371		$	721		$	(1,629	)	$	1,957
Investing activities
Additions to properties	—			(778		)	(369		)	—			(1,147		)
Proceeds from sale of properties and other assets	—			13			5			—			18
Advances to affiliates	—			(250		)	(267		)	517			—
Repayment of advances to affiliates	—			749			4			(753		)	—
Capital contributions to affiliates	—			(125		)	—			125			—
Other	—			1			(7		)	—			(6		)
Cash used in investing activities	—			(390		)	(634		)	(111		)	(1,135		)
Financing activities
Dividends paid	(298		)	(1,498		)	(131		)	1,629			(298		)
Issuance of share capital	—			—			125			(125		)	—
Issuance of CP Common Shares	20			—			—			—			20
Purchase of CP Common Shares	(962		)	(2		)	—			—			(964		)
Issuance of long-term debt, excluding commercial paper	—			397			—			—			397
Repayment of long-term debt, excluding commercial paper	—			(491		)	—			—			(491		)
Net issuance of commercial paper	—			601			—			—			601
Advances from affiliates	495			22			—			(517		)	—
Repayment of advances from affiliates	(749		)	(4		)	—			753			—
Other	—			(2		)	—			—			(2		)
Cash used in financing activities	(1,494		)	(977		)	(6		)	1,740			(737		)
Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents	—			(1		)	—			—			(1		)
Cash position
Increase in cash and cash equivalents	—			3			81			—			84
Cash and cash equivalents at beginning of year	—			42			19			—			61
Cash and cash equivalents at end of year	$	—		$	45		$	100		$	—		$	145

Interim Condensed Consolidating Statements of Cash Flows

For the nine months ended September 30, 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	$	235		$	1,309		$	782		$	(545	)	$	1,781
Investing activities
Additions to properties	—			(701		)	(383		)	—			(1,084		)
Proceeds from sale of properties and other assets	—			10			6			—			16
Advances to affiliates	—			(63		)	(209		)	272			—
Repayment of advances to affiliates	—			—			840			(840		)	—
Repurchase of share capital from affiliates	500			783			—			(1,283		)	—
Other	—			—			(1		)	—			(1		)
Cash provided by (used in) investing activities	500			29			253			(1,851		)	(1,069		)
Financing activities
Dividends paid	(255		)	(255		)	(290		)	545			(255		)
Return of share capital to affiliates	—			(500		)	(783		)	1,283			—
Issuance of CP Common Shares	16			—			—			—			16
Purchase of CP Common Shares	(559		)	—			—			—			(559		)
Issuance of long-term debt, excluding commercial paper	—			638			—			—			638
Repayment of long-term debt, excluding commercial paper	—			(744		)	—			—			(744		)
Advances from affiliates	272			—			—			(272		)	—
Repayment of advances from affiliates	(209		)	(631		)	—			840			—
Cash used in financing activities	(735		)	(1,492		)	(1,073		)	2,396			(904		)
Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents	—			16			(12		)	—			4
Cash position
Decrease in cash and cash equivalents	—			(138		)	(50		)	—			(188		)
Cash and cash equivalents at beginning of year	—			241			97			—			338
Cash and cash equivalents at end of year	$	—		$	103		$	47		$	—		$	150