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Investment in KCS
 3 Months Ended
Mar. 31, 2023
Equity Method Investments and Joint Ventures [Abstract]  
Investment in KCS Investment in KCS
The investment in KCS of $44,955 million as at March 31, 2023 (December 31, 2022 - $45,091 million) reflects the consideration paid to acquire KCS, the offsetting asset recorded upon recognition of a deferred tax liability computed on an outside basis, the subsequent recognition of equity earnings, the dividends received from KCS, and foreign currency translation based on the quarter-end exchange rates.

For the three months ended March 31, 2023, the Company recognized $204 million of equity earnings of KCS (March 31, 2022 - $198 million, and received dividends from KCS of $300 million (March 31, 2022 - $334 million). The foreign currency translation of the investment in KCS for this period totaled $41 million (March 31, 2022 - $608 million). Included within the $204 million of equity earnings of KCS recognized for the three months ended March 31, 2023 (March 31, 2022 - $198 million) was amortization (net of tax) of $42 million of basis differences (March 31, 2022 - $40 million). These basis differences relate to depreciable property, plant and equipment, intangible assets with definite lives, and long-term debt, and are amortized over the related assets' remaining useful lives and the remaining terms to maturity of the debt instruments.

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 March 31, 2023For the three months ended March 31, 2022
Total revenues$1,187 $986 
Total operating expenses779 617 
Operating income408 369 
Less: Other(2)
74 39 
Income before income taxes334 330 
Net income$246 $238 
(1) Amounts translated at exchange rates averaging $1.00 USD = $1.35 CAD for the three months ended March 31, 2023 and $1.00 USD= $1.27 CAD for the three months ended March 31, 2022.
(2) Includes Equity in net earnings of KCS's affiliates, Interest expense, FX loss, and Other income, net.