Investment in KCS

6 Months Ended

Jun. 30, 2022

Equity Method Investments and Joint Ventures [Abstract]

Investment in KCS

Investment in KCS

The KCS investment carrying cost of $43,203 million reported on the Company's Interim Consolidated Balance Sheets as at June 30, 2022 reflects the consideration paid to acquire KCS, the asset recorded upon recognition of a deferred tax liability computed on an outside basis (see Note 5), the subsequent recognition of equity earnings, the dividend received from KCS, and foreign currency translation based on the quarter-end exchange rate.

The following table presents summarized financial information for KCS, on its historical cost basis:

Statement of Income

(in millions of Canadian dollars)(1)	For the three months ended June 30, 2022		For the six months ended June 30, 2022
Total revenues	$	1,079	$	2,065
Total operating expenses	680		1,297
Operating income	399		768
Less: Other(2)	59		98
Income before income taxes	340		670
Net income	$	248	$	485

(1) Amounts translated at the average FX rate for the three and six months ended June 30, 2022 of $1.00 USD = $1.28 CAD and $1.00 USD = $1.27 CAD, respectively.

(2) Includes Equity in net earnings of KCS's affiliates, Interest expense, FX loss, and Other income, net.