Investment in KCS

9 Months Ended

Sep. 30, 2022

Equity Method Investments and Joint Ventures [Abstract]

Investment in KCS

Investment in KCS

The KCS investment carrying cost of $45,964 million reported on the Company's Interim Consolidated Balance Sheets as at September 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 dividends 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 September 30, 2022		For the nine months ended September 30, 2022
Total revenues	$	1,152	$	3,216
Total operating expenses	728		2,024
Operating income	424		1,192
Less: Other(2)	67		164
Income before income taxes	357		1,028
Net income	$	263	$	748

(1) Amounts translated at the average FX rate for the three and nine months ended September 30, 2022 of $1.00 USD = $1.31 CAD and $1.00 USD = $1.28 CAD, respectively.

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