Investment in KCS

6 Months Ended

Jun. 30, 2024

Equity Method Investments and Joint Ventures [Abstract]

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

For the period April 1 to 13, 2023 and the period January 1 to April 13, 2023, the Company recognized $26 million and $230 million of equity earnings of KCS, respectively, and received dividends from KCS for the same periods of $nil and $300 million. Included within the equity earnings of KCS recognized for the period April 1 to 13, 2023 and the period January 1 to April 13, 2023 was amortization (net of tax) of basis differences of $6 million and $48 million, respectively, 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:

Consolidated Statements of Income


(in millions of Canadian dollars)(1)	For the period April 1 to April 13, 2023		For the period January 1 to April 13, 2023
Total revenues	$	164	$	1,351
Total operating expenses	109		888
Operating income	55		463
Less: Other(2)	9		83
Income before income taxes	46		380
Net income	$	34	$	280

(1) Amounts translated at the average foreign exchange ("FX") rate for the period April 1 to April 13, 2023 and the period January 1 to April 13, 2023 of $1.00 USD = $1.35 CAD.

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