Investment in KCS

3 Months Ended

Mar. 31, 2024

Equity Method Investments and Joint Ventures [Abstract]

On April 14, 2023, the Company assumed control of KCS and subsequently derecognized its previously held equity method investment in KCS (see Note 8).

For the three months ended March 31, 2023, the Company recognized $204 million of equity earnings of KCS, and received dividends from KCS of $300 million. Included within the equity earnings of KCS recognized for the period was amortization (net of tax) of basis differences of $42 million that related 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, for the period ended March 31, 2023:

Statement of Income


(in millions of Canadian dollars)(1)	For the three months ended March 31, 2023
Total revenues	$	1,187
Total operating expenses	779
Operating income	408
Less: Other(2)	74
Income before income taxes	334
Net income	$	246

(1) Amounts translated at the average foreign exchange ("FX") rate $1.00 USD = $1.35 CAD for the three months ended March 31, 2023.

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