Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 16, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | CP | |
Entity Registrant Name | CANADIAN PACIFIC RAILWAY LTD/CN | |
Entity Central Index Key | 16,875 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Common Stock, Shares Outstanding | 142,601,634 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false |
INTERIM CONSOLIDATED STATEMENTS
INTERIM CONSOLIDATED STATEMENTS OF INCOME (unaudited) - CAD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues | ||||
Total revenues | $ 1,898 | $ 1,595 | $ 5,310 | $ 4,841 |
Operating expenses | ||||
Compensation and benefits | 365 | 324 | 1,090 | 969 |
Fuel | 226 | 150 | 671 | 480 |
Materials | 47 | 45 | 155 | 142 |
Equipment Rents | 33 | 35 | 99 | 108 |
Depreciation and amortization | 174 | 162 | 516 | 493 |
Purchased services and other | 263 | 257 | 822 | 812 |
Total operating expenses | 1,108 | 973 | 3,353 | 3,004 |
Operating income | 790 | 622 | 1,957 | 1,837 |
Less: | ||||
Other (income) expense | (47) | (105) | 56 | (194) |
Other components of net periodic benefit recovery | (96) | (68) | (287) | (203) |
Net interest expense | 112 | 115 | 339 | 357 |
Income before income tax expense | 821 | 680 | 1,849 | 1,877 |
Income tax expense | 199 | 170 | 443 | 456 |
Net income | $ 622 | $ 510 | $ 1,406 | $ 1,421 |
Earnings per share | ||||
Basic earnings per share | $ 4.36 | $ 3.50 | $ 9.81 | $ 9.72 |
Diluted earnings per share | $ 4.35 | $ 3.50 | $ 9.78 | $ 9.70 |
Weighted-average number of shares (millions) | ||||
Basic | 142.6 | 145.5 | 143.2 | 146.2 |
Diluted | 143.1 | 145.8 | 143.7 | 146.6 |
Dividends declared per share | $ 0.6500 | $ 0.5625 | $ 1.8625 | $ 1.6250 |
Cargo and Freight [Member] | ||||
Revenues | ||||
Total revenues | $ 1,854 | $ 1,547 | $ 5,188 | $ 4,708 |
Non-Freight [Member] | ||||
Revenues | ||||
Total revenues | $ 44 | $ 48 | $ 122 | $ 133 |
INTERIM CONSOLIDATED STATEMEN_2
INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) - CAD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 622 | $ 510 | $ 1,406 | $ 1,421 |
Net gain (loss) in foreign currency translation adjustments, net of hedging activities | 12 | 19 | (24) | 38 |
Change in derivatives designated as cash flow hedges | 1 | 2 | 36 | 11 |
Change in pension and post-retirement defined benefit plans | 28 | 38 | 86 | 113 |
Other comprehensive income (loss) before income taxes | 41 | 59 | 98 | 162 |
Income tax recovery (expense) on above items | (22) | (34) | (11) | (78) |
Other comprehensive income (loss) | 19 | 25 | 87 | 84 |
Comprehensive income | $ 641 | $ 535 | $ 1,493 | $ 1,505 |
INTERIM CONSOLIDATED BALANCE SH
INTERIM CONSOLIDATED BALANCE SHEETS AS AT (unaudited) - CAD ($) $ in Millions | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets | ||||||
Cash and cash equivalents | $ 150 | $ 338 | ||||
Accounts receivable, net | 759 | 687 | ||||
Materials and supplies | 156 | 152 | ||||
Other current assets | 65 | 97 | ||||
Total current assets | 1,130 | 1,274 | ||||
Investments | 201 | 182 | ||||
Properties | 17,792 | 17,016 | ||||
Goodwill and intangible assets | 192 | 187 | ||||
Pension asset | 1,726 | 1,407 | ||||
Other assets | 68 | 69 | ||||
Total assets | 21,109 | 20,135 | ||||
Current liabilities | ||||||
Accounts payable and accrued liabilities | 1,189 | 1,238 | ||||
Long-term debt maturing within one year | 480 | 746 | ||||
Total current liabilities | 1,669 | 1,984 | ||||
Pension and other benefit liabilities | 746 | 749 | ||||
Other long-term liabilities | 232 | 231 | ||||
Long-term debt | 7,806 | 7,413 | ||||
Deferred income taxes | 3,528 | 3,321 | ||||
Total liabilities | 13,981 | 13,698 | ||||
Shareholders’ equity | ||||||
Share capital | 2,017 | 2,032 | ||||
Additional paid-in capital | 47 | 43 | ||||
Accumulated other comprehensive loss | (1,654) | $ (1,673) | (1,741) | $ (1,715) | $ (1,740) | $ (1,799) |
Retained earnings | 6,718 | 6,103 | ||||
Total shareholders' equity | 7,128 | 6,437 | $ 5,565 | $ 4,626 | ||
Total liabilities and shareholders’ equity | $ 21,109 | $ 20,135 |
INTERIM CONSOLIDATED STATEMEN_3
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - CAD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Operating activities | ||||
Net income | $ 622 | $ 510 | $ 1,406 | $ 1,421 |
Reconciliation of net income to cash provided by operating activities: | ||||
Depreciation and amortization | 174 | 162 | 516 | 493 |
Deferred income taxes | 77 | 77 | 155 | 168 |
Pension funding in excess of expense | (84) | (59) | (238) | (178) |
Foreign exchange (gain) loss on long-term debt | (38) | (105) | 55 | (200) |
Settlement of forward starting swaps on debt issuance | 0 | 0 | (24) | 0 |
Other operating activities, net | (6) | (1) | (23) | (88) |
Change in non-cash working capital balances related to operations | (72) | (57) | (66) | (167) |
Cash provided by operating activities | 673 | 527 | 1,781 | 1,449 |
Investing activities | ||||
Additions to properties | (430) | (319) | (1,084) | (895) |
Proceeds from sale of properties and other assets | 7 | 13 | 16 | 29 |
Other investing activities | 0 | 0 | (1) | 5 |
Cash used in investing activities | (423) | (306) | (1,069) | (861) |
Financing activities | ||||
Dividends paid | (92) | (83) | (255) | (229) |
Issuance of CP Common Shares | 4 | 2 | 16 | 39 |
Purchase of CP Common Shares | 0 | (226) | (559) | (368) |
Issuance of long-term debt, excluding commercial paper | 0 | 0 | 638 | 0 |
Repayment of long-term debt, excluding commercial paper | (5) | (3) | (744) | (17) |
Net repayment of commercial paper | (53) | 0 | 0 | 0 |
Settlement of forward starting swaps on de-designation | 0 | 0 | 0 | (22) |
Cash (used in) provided by financing activities | (146) | (310) | (904) | (597) |
Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents | (5) | (7) | 4 | (13) |
Cash position | ||||
Increase (decrease) in cash and cash equivalents | 99 | (96) | (188) | (22) |
Cash and cash equivalents at beginning of period | 51 | 238 | 338 | 164 |
Cash and cash equivalents at end of period | 150 | 142 | 150 | 142 |
Supplemental disclosures of cash flow information: | ||||
Income taxes paid | 74 | 78 | 230 | 364 |
Interest paid | $ 147 | $ 140 | $ 380 | $ 385 |
INTERIM CONSOLIDATED STATEMEN_4
INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited) - CAD ($) shares in Millions, $ in Millions | Total | Share capital [Member] | Additional paid-in capital [Member] | Accumulated other comprehensive loss [Member] | Retained earnings [Member] |
Beginning balance (shares) at Dec. 31, 2016 | 146.3 | ||||
Beginning balance at Dec. 31, 2016 | $ 4,626 | $ 2,002 | $ 52 | $ (1,799) | $ 4,371 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 1,421 | 0 | 0 | 0 | 1,421 |
Other comprehensive income | 84 | 0 | 0 | 84 | 0 |
Dividends declared | (237) | $ 0 | 0 | 0 | (237) |
Common Shares repurchased (in shares) | (1.8) | ||||
Common Shares repurchased | (368) | $ (26) | 0 | 0 | (342) |
Shares issued under stock option plan (shares) | 0.5 | ||||
Shares issued under stock option plan | 39 | $ 49 | (10) | 0 | 0 |
Ending balance (shares) at Sep. 30, 2017 | 145 | ||||
Ending balance at Sep. 30, 2017 | 5,565 | $ 2,025 | 42 | (1,715) | 5,213 |
Beginning balance (shares) at Dec. 31, 2017 | 144.9 | ||||
Beginning balance at Dec. 31, 2017 | 6,437 | $ 2,032 | 43 | (1,741) | 6,103 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 1,406 | 0 | 0 | 0 | 1,406 |
Other comprehensive income | 87 | 0 | 0 | 87 | 0 |
Dividends declared | (267) | 0 | 0 | 0 | (267) |
Effect of stock-based compensation expense | 8 | $ 0 | 8 | 0 | 0 |
Common Shares repurchased (in shares) | (2.5) | ||||
Common Shares repurchased | (559) | $ (35) | 0 | 0 | (524) |
Shares issued under stock option plan (shares) | 0.2 | ||||
Shares issued under stock option plan | 16 | $ 20 | (4) | 0 | 0 |
Ending balance (shares) at Sep. 30, 2018 | 142.6 | ||||
Ending balance at Sep. 30, 2018 | $ 7,128 | $ 2,017 | $ 47 | $ (1,654) | $ 6,718 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | These unaudited interim consolidated financial statements of Canadian Pacific Railway Limited (“CP”, or “the Company”), expressed in Canadian dollars, reflect management’s estimates and assumptions that are necessary for their fair presentation in conformity with generally accepted accounting principles in the United States of America (“GAAP”). They do not include all disclosures required under GAAP for annual financial statements and should be read in conjunction with the 2017 annual consolidated financial statements and notes included in CP's 2017 Annual Report on Form 10-K. The accounting policies used are consistent with the accounting policies used in preparing the 2017 annual consolidated financial statements, except for the newly adopted accounting policies discussed in Note 2. CP's operations can be affected by seasonal fluctuations such as changes in customer demand and weather-related issues. This seasonality could impact quarter-over-quarter comparisons. |
Accounting Changes
Accounting Changes | 9 Months Ended |
Sep. 30, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Accounting Changes | Implemented in 2018 Revenue from Contracts with Customers On January 1, 2018, the Company adopted the new Accounting Standards Update ("ASU") 2014-09, issued by the Financial Accounting Standards Board ("FASB"), and all related amendments under FASB Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers, using the modified retrospective method. Comparative financial information has not been restated and continues to be reported under the accounting standards in effect for those periods. The Company did not recognize any adjustment to the opening balance of retained earnings upon adoption of ASC Topic 606. The Company expects the impact of adoption of this new standard to be immaterial to the Company’s net income on an ongoing basis. Compensation - Retirement Benefits On January 1, 2018, the Company adopted the changes required under ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit Cost under FASB ASC Topic 715, Retirement Benefits as issued by the FASB in March 2017. In accordance with the ASU, beginning on January 1, 2018, the Company reports the current service cost component of net periodic benefit cost in Compensation and benefits on the Company’s Consolidated Statements of Income, and reports the Other components of net periodic benefit recovery as a separate item outside of Operating income on the Company’s Consolidated Statements of Income. The Company has applied these changes in presentation retrospectively, which resulted in a decrease in Operating income of $68 million and $203 million for the three and nine months ended September 30, 2017, respectively. These changes in presentation do not result in any changes to net income or earnings per share. Details of the components of net periodic benefit costs are provided in Note 12 Pensions and other benefits. The ASU also prospectively restricts capitalization of net periodic benefit costs to the current service cost component when applicable. This restriction has no impact on the Company’s operating income or amounts capitalized because the Company has and continues to only capitalize an appropriate portion of current service cost for self-constructed properties. Derivatives and Hedging In August 2017, the FASB issued ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities, under FASB ASC Topic 815, Derivatives and Hedging. This improves the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities in its financial statements. These amendments also make targeted improvements to simplify the application of the hedge accounting guidance in GAAP. The amendments require the entire change in the fair value of the hedging instrument to be recorded in Other comprehensive income for effective cash flow hedges. Consequently, any ineffective portion of the change in fair value will no longer be recorded to the Consolidated Statement of Income as it arises. While the amendments are effective for public entities beginning on January 1, 2019, early adoption is permitted and the Company early adopted this ASU effective January 1, 2018. Entities are required to apply the amendments in this update to hedging relationships existing on the date of adoption, reflected as a cumulative-effect adjustment as of the beginning of the fiscal year of adoption. Other amendments to presentation and disclosure are applied prospectively. No significant cumulative-effect adjustment was required. Accumulated Other Comprehensive Income - Reclassification In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income under FASB ASC Topic 220, Income Statement - Reporting Comprehensive Income. The current standard ASC Topic 740, Income Taxes, requires deferred tax liabilities and assets to be adjusted for the effect of a change in tax laws or rates with the effect included in income from continuing operations in the reporting period that includes the enactment date. This includes the tax effects of items in Accumulated other comprehensive income ("AOCI") that were originally recognized in Other comprehensive income, subsequently creating stranded tax effects. This ASU allows a reclassification from AOCI to Retained earnings for stranded tax effects specifically resulting from the U.S. federal government's recently enacted tax bill, the Tax Cuts and Jobs Act. The amendments are effective for public entities beginning on January 1, 2019 and early adoption is permitted. Entities are required to apply these amendments either in the period of adoption or retrospectively to each period in which the effect of the change in tax rate from the Tax Cuts and Jobs Act was recognized. The Company early adopted this ASU effective January 1, 2018, electing not to change AOCI, Retained earnings or disclosure in the Company's Interim Consolidated Financial Statements. Future changes Leases |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue is recognized when obligations under the terms of a contract with a customer are satisfied. Revenue is measured as the amount of consideration the Company expects to receive in exchange for providing services. Government-imposed taxes that the Company collects concurrent with revenue-generating activities are excluded from revenue. In the normal course of business the Company does not generate any material revenue through acting as an agent for other entities. The following is a description of primary activities from which the Company generates revenue. Freight revenues The Company provides rail freight transportation services to a wide variety of customers and transports bulk commodities, merchandise freight and intermodal traffic. The Company signs service agreements with customers that dictate future services the Company is to perform for a customer at the time a bill of lading or service request is received. Each bill of lading or service request represents a separate and distinct performance obligation that the Company is obligated to satisfy. The transaction price is generally in the form of a fixed fee determined at the inception of the bill of lading or service request. The Company allocates the transaction price to each distinct performance obligation based on the estimated standalone selling price for each performance obligation. As each bill of lading or service request represents a separate and distinct performance obligation, the estimated standalone selling price is assessed at an observable price which is fair market value. Certain customer agreements include variable consideration in the form of rebates, discounts, or incentives. The expected value method is used to estimate variable consideration and is allocated to the applicable performance obligation and is recognized when the related performance obligation is satisfied. Additionally, the Company offers published rates for services through public tariffs in which a customer can request service, triggering a performance obligation of the Company. In accordance with ASC Topic 606, railway freight revenues continue to be recognized over time as services are provided based on the percentage of completed service method. Volume rebates to customers are accrued as a reduction of freight revenues based on estimated volumes and contract terms as freight service is provided. Freight revenues also include certain ancillary and other services provided in association with the performance of rail freight movements. Revenues from these activities are not material and therefore have been aggregated with the freight revenues from customer contracts with which they are associated. Non-freight revenues In accordance with ASC Topic 606, non-freight revenues, including passenger revenues, switching fees, and revenues from logistic services, continue to be recognized at the point in time the services are provided or when the performance obligations are satisfied. Non-freight revenues also include leasing revenues. Disaggregation of revenue The following table disaggregates the Company’s revenues from contracts with customers by major source: For the three months ended September 30 For the nine months ended September 30 (in millions of Canadian dollars) 2018 2017 (1) 2018 2017 (1) Freight Grain $ 384 $ 351 $ 1,113 $ 1,107 Coal 171 165 486 478 Potash 130 103 358 310 Fertilizers and sulphur 55 52 171 181 Forest products 76 67 211 202 Energy, chemicals and plastics 339 208 874 651 Metals, minerals, and consumer products 208 192 595 552 Automotive 85 68 247 223 Intermodal 406 341 1,133 1,004 Total freight revenues 1,854 1,547 5,188 4,708 Non-freight excluding leasing revenues 28 34 76 91 Revenues from contracts with customers 1,882 1,581 5,264 4,799 Leasing revenues 16 14 46 42 Total revenues $ 1,898 $ 1,595 $ 5,310 $ 4,841 (1) Prior period amounts have not been adjusted under the modified retrospective method. Satisfying performance obligations |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Loss ("AOCL") by Component | 9 Months Ended |
Sep. 30, 2018 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Changes in Accumulated Other Comprehensive Loss (AOCL) by Component | For the three months ended September 30 (in millions of Canadian dollars) Foreign currency net of hedging activities (1) Derivatives and (1) Pension and post- (1) Total (1) Opening balance, July 1, 2018 $ 110 $ (64 ) $ (1,719 ) $ (1,673 ) Other comprehensive (loss) income before reclassifications (1 ) (2 ) 1 (2 ) Amounts reclassified from accumulated other comprehensive loss — 2 19 21 Net other comprehensive (loss) income (1 ) — 20 19 Closing balance, September 30, 2018 $ 109 $ (64 ) $ (1,699 ) $ (1,654 ) Opening balance, July 1, 2017 $ 124 $ (97 ) $ (1,767 ) $ (1,740 ) Other comprehensive loss before reclassifications (5 ) — — (5 ) Amounts reclassified from accumulated other comprehensive loss — 2 28 30 Net other comprehensive (loss) income (5 ) 2 28 25 Closing balance, September 30, 2017 $ 119 $ (95 ) $ (1,739 ) $ (1,715 ) (1) Amounts are presented net of tax. For the nine months ended September 30 (in millions of Canadian dollars) Foreign currency net of hedging activities (1) Derivatives and (1) Pension and post- (1) Total (1) Opening balance, January 1, 2018 $ 109 $ (89 ) $ (1,761 ) $ (1,741 ) Other comprehensive income before reclassifications — 19 — 19 Amounts reclassified from accumulated other comprehensive loss — 6 62 68 Net other comprehensive income — 25 62 87 Closing balance, September 30, 2018 $ 109 $ (64 ) $ (1,699 ) $ (1,654 ) Opening balance, January 1, 2017 $ 127 $ (104 ) $ (1,822 ) $ (1,799 ) Other comprehensive loss before reclassifications (8 ) (7 ) — (15 ) Amounts reclassified from accumulated other comprehensive loss — 16 83 99 Net other comprehensive (loss) income (8 ) 9 83 84 Closing balance, September 30, 2017 $ 119 $ (95 ) $ (1,739 ) $ (1,715 ) (1) Amounts are presented net of tax. Amounts in Pension and post-retirement defined benefit plans reclassified from AOCL are as follows: For the three months ended September 30 For the nine months ended September 30 (in millions of Canadian dollars) 2018 2017 2018 2017 Amortization of prior service costs (1) $ (1 ) $ (1 ) $ (2 ) $ (3 ) Recognition of net actuarial loss (1) 29 39 88 116 Total before income tax 28 38 86 113 Income tax recovery (9 ) (10 ) (24 ) (30 ) Total net of income tax $ 19 $ 28 $ 62 $ 83 (1) Impacts " Other components of net periodic benefit recovery |
Other (Income) Expense
Other (Income) Expense | 9 Months Ended |
Sep. 30, 2018 | |
Other Income and Expenses [Abstract] | |
Other Income and Expenses | For the three months ended September 30 For the nine months ended September 30 (in millions of Canadian dollars) 2018 2017 2018 2017 Foreign exchange (gain) loss on long-term debt $ (38 ) $ (105 ) $ 55 $ (200 ) Other foreign exchange (gains) losses (1 ) (3 ) 2 (5 ) Insurance recovery of legal settlement — — — (10 ) Charge on hedge roll and de-designation — — — 13 Other (8 ) 3 (1 ) 8 Other (income) expense $ (47 ) $ (105 ) $ 56 $ (194 ) |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | For the three months ended September 30 For the nine months ended September 30 (in millions of Canadian dollars) 2018 2017 2018 2017 Current income tax expense $ 122 $ 93 $ 288 $ 288 Deferred income tax expense 77 77 155 168 Income tax expense $ 199 $ 170 $ 443 $ 456 During the nine months ended September 30, 2018, legislation was enacted to decrease the Iowa and Missouri state corporate income tax rates. As a result of these changes, the Company recorded a deferred tax recovery of $21 million in the second quarter of 2018 related to the revaluation of deferred income tax balances as at January 1, 2018. The effective tax rates for the three and nine months ended September 30, 2018 , were 24.23% and 23.95% , respectively, compared to 24.95% and 24.28% for the same periods in 2017 . For the three months ended September 30, 2018 , the effective tax rate excluding the discrete item of the foreign exchange ("FX") gain of $38 million on the Company's U.S. dollar-denominated debt, was 24.75% . For the three months ended September 30, 2017 , the effective tax rate excluding the discrete items of the FX gain of $105 million on the Company's U.S. dollar-denominated debt, and the $3 million deferred tax expense related to legislation enacted to increase the Illinois state income tax rate, was 26.50% For the nine months ended September 30, 2018 , the effective tax rate excluding the discrete items of the FX loss of $55 million on the Company's U.S. dollar-denominated debt and the $21 million tax recovery described above, was 24.75% . For the nine months ended September 30, 2017 , the effective tax rate excluding the discrete items of the management transition recovery of $51 million related to the retirement of the Company's Chief Executive Officer, the FX gain of $200 million on the Company's U.S. dollar-denominated debt, an insurance recovery of $10 million on a legal settlement, the $13 million charge associated with the hedge roll and de-designation, and the $14 million tax net recovery related to legislation enacted to increase the Illinois tax rate and decrease the Saskatchewan provincial corporate income tax rate, was 26.50% |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | At September 30, 2018 , the number of shares outstanding was 142.6 million ( September 30, 2017 - 145.0 million ). Basic earnings per share have been calculated using net income for the period divided by the weighted-average number of shares outstanding during the period. The number of shares used in earnings per share calculations is reconciled as follows: For the three months ended September 30 For the nine months ended September 30 (in millions) 2018 2017 2018 2017 Weighted-average basic shares outstanding 142.6 145.5 143.2 146.2 Dilutive effect of stock options 0.5 0.3 0.5 0.4 Weighted-average diluted shares outstanding 143.1 145.8 143.7 146.6 For the three and nine months ended September 30, 2018 , there were 0.3 million and 0.2 million options, respectively, excluded from the computation of diluted earnings per share because their effects were not dilutive ( three and nine months ended September 30, 2017 - 0.3 million and 0.3 million |
Debt
Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Revolving credit facility Effective June 8, 2018, the Company amended its U.S. $2.0 billion revolving credit facility agreement dated September 26, 2014. This fifth amending agreement included, among other things, the extension of the five year maturity date from June 28, 2022 to June 28, 2023 and the cancellation of the U.S. $1.0 billion one-year plus one-year credit facility agreement. As at September 30, 2018 , the remaining U.S. $1.0 billion credit facility was undrawn. Issuance of long-term debt During the second quarter of 2018, the Company issued U.S. $500 million 4.000% 10 -year Notes due June 1, 2028 for net proceeds of U.S. $495 million ( $638 million ). These notes pay interest semi-annually and are unsecured but carry a negative pledge. In conjunction with the issuance, the Company settled a notional U.S. $500 million of forward starting floating-to-fixed interest rate swap agreements ("forward starting swaps") for a payment of U.S. $19 million ( $24 million ) (see Note 10). This payment was included in cash provided by operating activities consistent with the location of the related hedged item on the Company's Interim Consolidated Statements of Cash Flows. Retirement of long-term debt During the second quarter of 2018, the Company repaid U.S. $275 million 6.500% 10 -year Notes at maturity for a total of U.S. $275 million ( $352 million ) and $375 million 6.250% 10 -year Medium Term Notes at maturity for a total of $375 million . Commercial paper program The Company has a commercial paper program which enables it to issue commercial paper up to a maximum aggregate principal amount of U.S. $1.0 billion in the form of unsecured promissory notes. The commercial paper is backed by the U.S. $1.0 billion revolving credit facility. As at September 30, 2018 and December 31, 2017, the Company had no commercial paper borrowings. The Company presents issuances and repayments of commercial paper, all of which have a maturity of less than 90 days |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Shareholders' Equity | On May 10, 2017, the Company announced a new normal course issuer bid ("NCIB"), commencing May 15, 2017, to purchase up to 4.38 million Common Shares for cancellation before May 14, 2018 . The Company completed this NCIB on May 10, 2018 . All purchases were made in accordance with the NCIB at prevalent market prices plus brokerage fees, or such other prices that were permitted by the Toronto Stock Exchange, with consideration allocated to share capital up to the average carrying amount of the shares, and any excess allocated to retained earnings. The following table describes activities under the share repurchase program: For the three months ended September 30 For the nine months ended September 30 2018 2017 2018 2017 Number of Common Shares repurchased — 1,145,400 2,495,962 1,828,300 Weighted-average price per share (1) $ — $ 196.46 $ 223.97 $ 201.50 Amount of repurchase (in millions) (1) $ — $ 225 $ 559 $ 368 (1) Includes brokerage fees. On October 17, 2018, the Company announced that it intends to implement a new NCIB to repurchase, for cancellation, up to approximately 5.68 million |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments | A. Fair values of financial instruments The Company categorizes its financial assets and liabilities measured at fair value into a three-level hierarchy established by GAAP that prioritizes those inputs to valuation techniques used to measure fair value based on the degree to which they are observable. The three levels of the fair value hierarchy are as follows: Level 1 inputs are quoted prices in active markets for identical assets and liabilities; Level 2 inputs, other than quoted prices included within Level 1, are observable for the asset or liability either directly or indirectly; and Level 3 inputs are not observable in the market. When possible, the estimated fair value is based on quoted market prices and, if not available, it is based on estimates from third party brokers. For non-exchange-traded derivatives classified in Level 2, the Company uses standard valuation techniques to calculate fair value. Primary inputs to these techniques include observable market prices (interest, FX and commodity) and volatility, depending on the type of derivative and the nature of the underlying risk. The Company uses inputs and data used by willing market participants when valuing derivatives and considers its own credit default swap spread as well as those of its counterparties in its determination of fair value. All derivatives and long-term debt are classified as Level 2. The carrying values of financial instruments equal or approximate their fair values with the exception of long-term debt: (in millions of Canadian dollars) September 30, 2018 December 31, 2017 Long-term debt (including current maturities): Fair value $ 9,206 $ 9,680 Carrying value 8,286 8,159 The estimated fair value of current and long-term borrowings has been determined based on market information where available, or by discounting future payments of principal and interest at estimated interest rates expected to be available to the Company at period end. B. Financial risk management Derivative financial instruments Derivative financial instruments may be used to selectively reduce volatility associated with fluctuations in interest rates, FX rates, the price of fuel and stock-based compensation expense. Where derivatives are designated as hedging instruments, the relationship between the hedging instruments and their associated hedged items is documented, as well as the risk management objective and strategy for the use of the hedging instruments. This documentation includes linking the derivatives that are designated as fair value or cash flow hedges to specific assets or liabilities on the Company's Interim Consolidated Balance Sheets, commitments or forecasted transactions. At the time a derivative contract is entered into and at least quarterly thereafter, an assessment is made as to whether the derivative item is effective in offsetting the changes in fair value or cash flows of the hedged items. The derivative qualifies for hedge accounting treatment if it is effective in substantially mitigating the risk it was designed to address. It is not the Company’s intent to use financial derivatives or commodity instruments for trading or speculative purposes. FX management The Company conducts business transactions and owns assets in both Canada and the United States. As a result, the Company is exposed to fluctuations in the value of financial commitments, assets, liabilities, income or cash flows due to changes in FX rates. The Company may enter into FX risk management transactions primarily to manage fluctuations in the exchange rate between Canadian and U.S. currencies. FX exposure is primarily mitigated through natural offsets created by revenues, expenditures and balance sheet positions incurred in the same currency. Where appropriate, the Company may negotiate with customers and suppliers to reduce the net exposure. Net investment hedge The FX gains and losses on long-term debt are mainly unrealized and can only be realized when U.S. dollar-denominated long-term debt matures or is settled. The Company also has long-term FX exposure on its investment in U.S. affiliates. The majority of the Company’s U.S. dollar-denominated long-term debt has been designated as a hedge of the net investment in foreign subsidiaries. This designation has the effect of mitigating volatility on Net income by offsetting long-term FX gains and losses on U.S. dollar-denominated long-term debt and gains and losses on its net investment. The effect of the net investment hedge recognized in “Other comprehensive income” for the three and nine months ended September 30, 2018 was an unrealized FX gain of $96 million and an unrealized FX loss of $177 million , respectively ( three and nine months ended September 30, 2017 - an unrealized FX gain of $180 million and $342 million , respectively). Interest rate management The Company is exposed to interest rate risk, which is the risk that the fair value or future cash flows of a financial instrument will vary as a result of changes in market interest rates. In order to manage funding needs or capital structure goals, the Company enters into debt or capital lease agreements that are subject to either fixed market interest rates set at the time of issue or floating rates determined by ongoing market conditions. Debt subject to variable interest rates exposes the Company to variability in interest expense, while debt subject to fixed interest rates exposes the Company to variability in the fair value of debt. To manage interest rate exposure, the Company accesses diverse sources of financing and manages borrowings in line with a targeted range of capital structure, debt ratings, liquidity needs, maturity schedule, and currency and interest rate profiles. In anticipation of future debt issuances, the Company may enter into forward rate agreements, that are designated as cash flow hedges, to substantially lock in all or a portion of the effective future interest expense. The Company may also enter into swap agreements, designated as fair value hedges, to manage the mix of fixed and floating rate debt. Forward starting swaps During the second quarter of 2018, the Company settled a notional U.S. $500 million of forward starting swaps related to the U.S. $500 million 4.000% 10 -year Notes issued in the same period. The fair value of these derivative instruments at the time of settlement was a loss of U.S. $19 million ( $24 million ). The changes in fair value of the forward starting swaps for the three and nine months ended September 30, 2018 was $ nil and a gain of $31 million , respectively ( three and nine months ended September 30, 2017 - $ nil and a loss of $12 million , respectively). This was recorded in "Accumulated other comprehensive loss”, net of tax, and is being reclassified to "Net interest expense" until the underlying hedged notes are repaid. For the three and nine months ended September 30, 2018 , a net loss of $2 million and $7 million , respectively, related to settled forward starting swap hedges has been amortized to “Net interest expense” ( three and nine months ended September 30, 2017 - a net loss of $3 million and $8 million , respectively). The Company expects that during the next twelve months, an additional $9 million |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | At September 30, 2018 , the Company had several stock-based compensation plans, including stock option plans, various cash settled liability plans and an employee share purchase plan. These plans resulted in an expense for the three and nine months ended September 30, 2018 of $28 million and $60 million , respectively ( three and nine months ended September 30, 2017 - an expense of $11 million and $16 million , respectively). Effective January 31, 2017, Mr. E. Hunter Harrison resigned from all positions held by him at the Company, including as the Company’s Chief Executive Officer and a member of the Board of Directors of the Company. In connection with Mr. Harrison’s resignation, the Company entered into a separation agreement with Mr. Harrison. Under the terms of the separation agreement, the Company agreed to a limited waiver of Mr. Harrison’s non-competition and non-solicitation obligations. Effective January 31, 2017, pursuant to the separation agreement, Mr. Harrison forfeited certain pension and post-retirement benefits and agreed to the surrender for cancellation of 22,514 performance share units ("PSUs"), 68,612 deferred share units ("DSUs"), and 752,145 stock options. As a result of this agreement, the Company recognized a recovery of $51 million in "Compensation and benefits" in the first quarter of 2017. Of this amount, $27 million related to a recovery from cancellation of certain pension benefits. Stock option plan In the nine months ended September 30, 2018 , under CP’s stock option plans, the Company issued 282,125 options at the weighted-average price of $240.91 per share, based on the closing price on the grant date. Pursuant to the employee plan, these options may be exercised upon vesting, which is between 12 months and 48 months after the grant date, and will expire after seven years . Under the fair value method, the fair value of the stock options at the grant date was approximately $16 million . The weighted-average fair value assumptions were approximately: For the nine months ended September 30, 2018 Grant price $240.91 Expected option life (years) (1) 5.00 Risk-free interest rate (2) 2.22% Expected stock price volatility (3) 24.81% Expected annual dividends per share (4) $2.3854 Expected forfeiture rate (5) 4.7% Weighted-average grant date fair value per option granted during the period $55.63 (1) Represents the period of time that awards are expected to be outstanding. Historical data on exercise behaviour, or when available, specific expectations regarding future exercise behaviour, were used to estimate the expected life of the option. (2) Based on the implied yield available on zero-coupon government issues with an equivalent term commensurate with the expected term of the option. (3) Based on the historical stock price volatility of the Company’s stock over a period commensurate with the expected term of the option. (4) Determined by the current annual dividend at the time of grant. The Company does not employ different dividend yields throughout the contractual term of the option. On May 10, 2018, the Company announced an increase in its quarterly dividend to $0.6500 per share, representing $2.6000 on an annual basis. (5) The Company estimated forfeitures based on past experience. This rate is monitored on a periodic basis. Performance share unit plan In the nine months ended September 30, 2018 , the Company issued 161,323 PSUs with a grant date fair value of approximately $39 million . These units attract dividend equivalents in the form of additional units based on the dividends paid on the Company’s Common Shares. PSUs vest and are settled in cash or in CP Common Shares, approximately three years after the grant date, contingent upon CP’s performance ("performance factor"). The performance period for the PSUs issued in the nine months ended September 30, 2018 is January 1, 2018 to December 31, 2020. The fair value of these PSUs is measured periodically until settlement, using either a lattice-based valuation model or a Monte Carlo simulation model. The performance period for the PSUs issued in 2015 was January 1, 2015 to December 31, 2017. The performance factors for these PSUs were Operating Ratio, ROIC, TSR compared to the S&P/TSX 60 index and TSR compared to Class I railways. The resulting payout was 160% of the Company's average share price that was calculated using the last 30 trading days preceding December 31, 2017. In the first quarter of 2018, payouts occurred on the total outstanding awards, including dividends reinvested, totaling $30 million on 82,800 outstanding awards. Deferred share unit plan In the nine months ended September 30, 2018 , the Company granted 13,888 DSUs with a grant date fair value of approximately $3 million . DSUs vest over various periods of up to 48 months and are only redeemable for a specified period after employment is terminated. An expense to income for DSUs is recognized over the vesting period for both the initial subscription price and the change in value between reporting periods. Restricted share unit plan In the nine months ended September 30, 2018 , the Company granted 21,895 restricted share units ("RSUs") with a grant date fair value of approximately $5 million . The RSUs are notional full value shares that attract dividend equivalents in the form of additional units based on the dividends paid on the Company’s Common Shares. RSUs have no performance factors attached to them and are vested and settled in cash after a period of three years |
Pensions and Other Benefits
Pensions and Other Benefits | 9 Months Ended |
Sep. 30, 2018 | |
Retirement Benefits [Abstract] | |
Pensions and Other Benefits | In the three months ended September 30, 2018 , the Company made contributions of $13 million (three months ended September 30, 2017 - $11 million ) to its defined benefit pension plans. In the nine months ended September 30, 2018 , the Company made net contributions of $25 million (nine months ended September 30, 2017 - $35 million ), to its defined benefit pension plans, which is net of a $10 million refund of plan surplus (nine months ended September 30, 2017 - $nil). Net periodic benefit costs for defined benefit pension plans and other benefits recognized in the three and nine months ended September 30, 2018 included the following components: For the three months ended September 30 Pensions Other benefits (in millions of Canadian dollars) 2018 2017 2018 2017 Current service cost (benefits earned by employees) $ 30 $ 26 $ 3 $ 3 Other components of net periodic benefit (recovery) cost: Interest cost on benefit obligation 110 112 5 5 Expected return on fund assets (239 ) (223 ) — — Recognized net actuarial loss 29 38 — 1 Amortization of prior service costs (1 ) (1 ) — — Total other components of net periodic benefit (recovery) cost (101 ) (74 ) 5 6 Net periodic benefit (recovery) cost $ (71 ) $ (48 ) $ 8 $ 9 For the nine months ended September 30 Pensions Other benefits (in millions of Canadian dollars) 2018 2017 2018 2017 Current service cost (benefits earned by employees) $ 90 $ 77 $ 9 $ 9 Other components of net periodic benefit (recovery) cost: Interest cost on benefit obligation 329 338 14 15 Expected return on fund assets (716 ) (669 ) — — Recognized net actuarial loss 86 114 2 2 Amortization of prior service costs (2 ) (3 ) — — Total other components of net periodic benefit (recovery) cost (303 ) (220 ) 16 17 Net periodic benefit (recovery) cost $ (213 ) $ (143 ) $ 25 $ 26 |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | In the normal course of its operations, the Company becomes involved in various legal actions, including claims relating to injuries and damage to property. The Company maintains provisions it considers to be adequate for such actions. While the final outcome with respect to actions outstanding or pending at September 30, 2018 cannot be predicted with certainty, it is the opinion of management that their resolution will not have a material adverse effect on the Company’s financial position or results of operations. Legal proceedings related to Lac-Mégantic rail accident On July 6, 2013, a train carrying petroleum crude oil operated by Montreal Maine and Atlantic Railway (“MMAR”) or a subsidiary, Montreal Maine & Atlantic Canada Co. (“MMAC” and collectively the “MMA Group”), derailed in Lac-Mégantic, Québec. The derailment occurred on a section of railway owned and operated by the MMA Group. The previous day CP had interchanged the train to the MMA Group, and after the interchange, the MMA Group exclusively controlled the train. In the wake of the derailment, MMAC sought court protection in Canada under the Companies’ Creditors Arrangement Act, R.S.C. , 1985, c. C-36 and MMAR filed for bankruptcy in the United States. Plans of arrangement have been approved in both Canada and the U.S. (the “Plans”). These Plans provide for the distribution of a fund of approximately $440 million amongst those claiming derailment damages. A number of legal proceedings, set out below, were commenced after the derailment in Canada and/or in the U.S. against CP and others: (1) Québec's Minister of Sustainable Development, Environment, Wildlife and Parks (the "Minister") ordered various parties, including CP, to clean up the derailment site (the “Cleanup Order”). CP appealed the Cleanup Order to the Administrative Tribunal of Québec (the “TAQ”). The Minister subsequently served a Notice of Claim seeking $95 million for compensation spent on cleanup. CP filed a contestation of the Notice of Claim with the TAQ (the “TAQ Proceeding”). CP and the Minister agreed to stay the TAQ Proceedings pending the outcome of the Province of Québec's action, described in item #2 below. (2) Québec’s Attorney General sued CP in the Québec Superior Court initially claiming $409 million in damages, which claim was amended and reduced to $315 million (the “Province’s Action”). The Province’s Action alleges that CP exercised custody or control over the petroleum crude oil until its delivery to Irving Oil, that CP was negligent in its custody and control of the petroleum crude oil and that therefore CP is jointly and severally liable with third parties responsible for the derailment and vicariously liable for the acts and omissions of MMAC. (3) A class action in the Québec Superior Court on behalf of persons and entities residing in, owning or leasing property in, operating a business in or physically present in Lac-Mégantic at the time of the derailment (the “Class Action”) was certified against CP, MMAC and the train conductor, Mr. Thomas Harding ("Harding"). The Class Action seeks unquantified damages, including for wrongful death, personal injury, and property damage arising from the derailment. All known wrongful death claimants in the Class Action have opted out and, by court order, cannot re-join the Class Action. (4) Eight subrogated insurers sued CP in the Québec Superior Court initially claiming approximately $16 million in damages, which claim was amended and reduced to $14 million (the “Promutuel Action”) and two additional subrogated insurers sued CP in the Québec Superior Court claiming approximately $3 million in damages (the “Royal Action”). Both Actions contain essentially the same allegations as the Province’s Action. The lawsuits do not identify the parties to which the insurers are subrogated, and therefore the extent to which these claims overlap with the proof of claims process under the Plans is difficult to determine at this stage. The Royal Action has been stayed pending the determination of the consolidated proceedings described below. The Province’s Action, the Class Action and the Promutuel Action have been consolidated and will proceed together through the litigation process in the Québec Superior Court. While each Action will remain a separate legal proceeding, there will be a trial to determine liability issues commencing mid-September 2019, and subsequently, if necessary, a trial to determine damages issues. (5) Forty-eight plaintiffs (all individual claims joined in one action) sued CP, MMAC and Harding in the Québec Superior Court claiming approximately $5 million in damages for economic loss and pain and suffering. These plaintiffs assert essentially the same allegations as those contained in the Class Action and the Province’s Action against CP. The plaintiffs assert they have opted-out of the Class Action. All but two of the plaintiffs were plaintiffs in litigation against CP, described in paragraph 7 below, that originated in the U.S. who either withdrew their claims or had their case dismissed in the U.S. (6) An adversary proceeding filed by the MMAR U.S. estate representative (“Estate Representative”) in Maine accuses CP of failing to abide by certain regulations (the “Adversary Proceeding”). The Estate Representative alleges that CP should not have moved the petroleum crude oil train because an inaccurate classification by the shipper was or should have been known. The Estate Representative seeks damages for MMAR’s business value (as yet unquantified) allegedly destroyed by the derailment. (7) A class action and mass tort action on behalf of Lac-Mégantic residents and wrongful death representatives commenced in Texas and wrongful death and personal injury actions commenced in Illinois and Maine against CP were all removed to and consolidated in Maine (the “Maine Actions”). The Maine Actions allege that CP negligently misclassified and mis-packaged the petroleum crude oil being shipped. On CP’s motion, the Maine Actions were dismissed by the Court on several grounds. The plaintiffs are appealing the dismissal decision. (8) The Trustee (the “WD Trustee”) for the wrongful death trust (the “WD Trust”), as defined and established by the Estate Representative under the Plans, asserts Carmack Amendment claims against CP in North Dakota federal court (the “Carmack Claims”). The WD Trustee seeks to recover approximately $6 million for damaged rail cars, and the settlement amounts the consignor and the consignee paid to the bankruptcy estates, alleged to be $110 million and $60 million , respectively. On CP’s motion, the federal court in North Dakota dismissed the Carmack Claims on timeliness grounds but the Eighth Circuit Court of Appeals reversed that decision. CP is seeking a rehearing of the Eighth Circuit Court of Appeals decision, failing which CP will seek dismissal of the Carmack Claims on various other grounds. At this stage of the proceedings, the risk of a finding of liability and the quantum of potential losses cannot be determined. CP denies liability and is vigorously defending the above noted proceedings. Environmental liabilities Environmental remediation accruals, recorded on an undiscounted basis unless a reliable, determinable estimate as to an amount and timing of costs can be established, cover site-specific remediation programs. The accruals for environmental remediation represent CP’s best estimate of its probable future obligation and include both asserted and unasserted claims, without reduction for anticipated recoveries from third parties. Although the recorded accruals include CP’s best estimate of all probable costs, CP’s total environmental remediation costs cannot be predicted with certainty. Accruals for environmental remediation may change from time to time as new information about previously untested sites becomes known, and as environmental laws and regulations evolve and advances are made in environmental remediation technology. The accruals may also vary as the courts decide legal proceedings against outside parties responsible for contamination. These potential charges, which cannot be quantified at this time, may materially affect income in the particular period in which a charge is recognized. Costs related to existing, but as yet unknown, or future contamination will be accrued in the period in which they become probable and reasonably estimable. The expense included in “Purchased services and other” for the three and nine months ended September 30, 2018 was $2 million and $4 million , respectively ( three and nine months ended September 30, 2017 - $1 million and $3 million ). Provisions for environmental remediation costs are recorded in “Other long-term liabilities”, except for the current portion which is recorded in “Accounts payable and accrued liabilities”. The total amount provided at September 30, 2018 was $80 million ( December 31, 2017 - $78 million ). Payments are expected to be made over 10 years |
Condensed Consolidating Financi
Condensed Consolidating Financial Information | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Condensed Consolidating Financial Information | Canadian Pacific Railway Company, a 100%-owned subsidiary of Canadian Pacific Railway Limited (“CPRL”), is the issuer of certain debt securities, which are fully and unconditionally guaranteed by CPRL. The following tables present condensed consolidating financial information (“CCFI”) in accordance with Rule 3-10(c) of Regulation S-X. Investments in subsidiaries are accounted for under the equity method when presenting the CCFI. For the three months ended September 30, 2018 (in millions of Canadian dollars) CPRL (Parent Guarantor) CPRC (Subsidiary Issuer) Non-Guarantor Subsidiaries Consolidating Adjustments and Eliminations CPRL Consolidated Revenues Freight $ — $ 1,316 $ 538 $ — $ 1,854 Non-freight — 31 92 (79 ) 44 Total revenues — 1,347 630 (79 ) 1,898 Operating expenses Compensation and benefits — 246 117 2 365 Fuel — 177 49 — 226 Materials — 33 11 3 47 Equipment rents — 27 6 — 33 Depreciation and amortization — 105 69 — 174 Purchased services and other — 224 123 (84 ) 263 Total operating expenses — 812 375 (79 ) 1,108 Operating income — 535 255 — 790 Less: Other (income) expense (4 ) (46 ) 3 — (47 ) Other components of net periodic benefit (recovery) expense — (97 ) 1 — (96 ) Net interest (income) expense (2 ) 121 (7 ) — 112 Income before income tax expense and equity in net earnings of subsidiaries 6 557 258 — 821 Less: Income tax (recovery) expense (1 ) 142 58 — 199 Add: Equity in net earnings of subsidiaries 615 200 — (815 ) — Net income $ 622 $ 615 $ 200 $ (815 ) $ 622 For the three months ended September 30, 2017 (in millions of Canadian dollars) CPRL (Parent Guarantor) CPRC (Subsidiary Issuer) Non-Guarantor Subsidiaries Consolidating Adjustments and Eliminations CPRL Consolidated Revenues Freight $ — $ 1,092 $ 455 $ — $ 1,547 Non-freight — 38 90 (80 ) 48 Total revenues — 1,130 545 (80 ) 1,595 Operating expenses Compensation and benefits — 218 103 3 324 Fuel — 116 34 — 150 Materials — 33 11 1 45 Equipment rents — 35 — — 35 Depreciation and amortization — 108 54 — 162 Purchased services and other — 195 146 (84 ) 257 Total operating expenses — 705 348 (80 ) 973 Operating income — 425 197 — 622 Less: Other (income) expense (10 ) (100 ) 5 — (105 ) Other components of net periodic benefit (recovery) expense — (69 ) 1 — (68 ) Net interest (income) expense (2 ) 126 (9 ) — 115 Income before income tax expense and equity in net earnings of subsidiaries 12 468 200 — 680 Less: Income tax expense 7 99 64 — 170 Add: Equity in net earnings of subsidiaries 505 136 — (641 ) — Net income $ 510 $ 505 $ 136 $ (641 ) $ 510 For the nine months ended September 30, 2018 (in millions of Canadian dollars) CPRL (Parent Guarantor) CPRC (Subsidiary Issuer) Non-Guarantor Subsidiaries Consolidating Adjustments and Eliminations CPRL Consolidated Revenues Freight $ — $ 3,667 $ 1,521 $ — $ 5,188 Non-freight — 89 271 (238 ) 122 Total revenues — 3,756 1,792 (238 ) 5,310 Operating expenses Compensation and benefits — 740 346 4 1,090 Fuel — 523 148 — 671 Materials — 106 38 11 155 Equipment rents — 88 11 — 99 Depreciation and amortization — 314 202 — 516 Purchased services and other — 647 428 (253 ) 822 Total operating expenses — 2,418 1,173 (238 ) 3,353 Operating income — 1,338 619 — 1,957 Less: Other expense (income) 7 81 (32 ) — 56 Other components of net periodic benefit (recovery) expense — (289 ) 2 — (287 ) Net interest expense (income) 4 356 (21 ) — 339 (Loss) income before income tax expense and equity in net earnings of subsidiaries (11 ) 1,190 670 — 1,849 Less: Income tax (recovery) expense (2 ) 327 118 — 443 Add: Equity in net earnings of subsidiaries 1,415 552 — (1,967 ) — Net income $ 1,406 $ 1,415 $ 552 $ (1,967 ) $ 1,406 For the nine months ended September 30, 2017 (in millions of Canadian dollars) CPRL (Parent Guarantor) CPRC (Subsidiary Issuer) Non-Guarantor Subsidiaries Consolidating Adjustments and Eliminations CPRL Consolidated Revenues Freight $ — $ 3,310 $ 1,398 $ — $ 4,708 Non-freight — 104 278 (249 ) 133 Total revenues — 3,414 1,676 (249 ) 4,841 Operating expenses Compensation and benefits — 644 320 5 969 Fuel — 370 110 — 480 Materials — 101 28 13 142 Equipment rents — 110 (2 ) — 108 Depreciation and amortization — 325 168 — 493 Purchased services and other — 613 466 (267 ) 812 Total operating expenses — 2,163 1,090 (249 ) 3,004 Operating income — 1,251 586 — 1,837 Less: Other (income) expense (35 ) (166 ) 7 — (194 ) Other components of net periodic benefit (recovery) expense — (206 ) 3 — (203 ) Net interest (income) expense (9 ) 390 (24 ) — 357 Income before income tax expense and equity in net earnings of subsidiaries 44 1,233 600 — 1,877 Less: Income tax expense 9 259 188 — 456 Add: Equity in net earnings of subsidiaries 1,386 412 — (1,798 ) — Net income $ 1,421 $ 1,386 $ 412 $ (1,798 ) $ 1,421 For the three months ended September 30, 2018 (in millions of Canadian dollars) CPRL (Parent Guarantor) CPRC (Subsidiary Issuer) Non-Guarantor Subsidiaries Consolidating Adjustments and Eliminations CPRL Consolidated Net income $ 622 $ 615 $ 200 $ (815 ) $ 622 Net gain (loss) in foreign currency translation adjustments, net of hedging activities — 96 (84 ) — 12 Change in derivatives designated as cash flow — 1 — — 1 Change in pension and post-retirement defined — 27 1 — 28 Other comprehensive income (loss) before income taxes — 124 (83 ) — 41 Income tax expense on above items — (22 ) — — (22 ) Equity accounted investments 19 (83 ) — 64 — Other comprehensive income (loss) 19 19 (83 ) 64 19 Comprehensive income $ 641 $ 634 $ 117 $ (751 ) $ 641 For the three months ended September 30, 2017 (in millions of Canadian dollars) CPRL (Parent Guarantor) CPRC (Subsidiary Issuer) Non-Guarantor Subsidiaries Consolidating Adjustments and Eliminations CPRL Consolidated Net income $ 510 $ 505 $ 136 $ (641 ) $ 510 Net gain (loss) in foreign currency translation adjustments, net of hedging activities — 180 (161 ) — 19 Change in derivatives designated as cash flow — 2 — — 2 Change in pension and post-retirement defined — 36 2 — 38 Other comprehensive income (loss) before income taxes — 218 (159 ) — 59 Income tax expense on above items — (34 ) — — (34 ) Equity accounted investments 25 (159 ) — 134 — Other comprehensive income (loss) 25 25 (159 ) 134 25 Comprehensive income (loss) $ 535 $ 530 $ (23 ) $ (507 ) $ 535 For the nine months ended September 30, 2018 (in millions of Canadian dollars) CPRL (Parent Guarantor) CPRC (Subsidiary Issuer) Non-Guarantor Subsidiaries Consolidating Adjustments and Eliminations CPRL Consolidated Net income $ 1,406 $ 1,415 $ 552 $ (1,967 ) $ 1,406 Net (loss) gain in foreign currency translation adjustments, net of hedging activities — (177 ) 153 — (24 ) Change in derivatives designated as cash flow — 36 — — 36 Change in pension and post-retirement defined — 82 4 — 86 Other comprehensive (loss) income before income taxes — (59 ) 157 — 98 Income tax expense on above items — (10 ) (1 ) — (11 ) Equity accounted investments 87 156 — (243 ) — Other comprehensive income 87 87 156 (243 ) 87 Comprehensive income $ 1,493 $ 1,502 $ 708 $ (2,210 ) $ 1,493 For the nine months ended September 30, 2017 (in millions of Canadian dollars) CPRL (Parent Guarantor) CPRC (Subsidiary Issuer) Non-Guarantor Subsidiaries Consolidating Adjustments and Eliminations CPRL Consolidated Net income $ 1,421 $ 1,386 $ 412 $ (1,798 ) $ 1,421 Net gain (loss) in foreign currency translation adjustments, net of hedging activities — 342 (304 ) — 38 Change in derivatives designated as cash flow — 11 — — 11 Change in pension and post-retirement defined — 108 5 — 113 Other comprehensive income (loss) before income taxes — 461 (299 ) — 162 Income tax expense on above items — (77 ) (1 ) — (78 ) Equity accounted investments 84 (300 ) — 216 — Other comprehensive income (loss) 84 84 (300 ) 216 84 Comprehensive income $ 1,505 $ 1,470 $ 112 $ (1,582 ) $ 1,505 As at September 30, 2018 (in millions of Canadian dollars) CPRL (Parent Guarantor) CPRC (Subsidiary Issuer) Non-Guarantor Subsidiaries Consolidating Adjustments and Eliminations CPRL Consolidated Assets Current assets Cash and cash equivalents $ — $ 103 $ 47 $ — $ 150 Accounts receivable, net — 592 167 — 759 Accounts receivable, intercompany 119 128 182 (429 ) — Short-term advances to affiliates — 1,049 4,676 (5,725 ) — Materials and supplies — 123 33 — 156 Other current assets — 45 48 (28 ) 65 119 2,040 5,153 (6,182 ) 1,130 Long-term advances to affiliates 1,090 5 88 (1,183 ) — Investments — 35 166 — 201 Investments in subsidiaries 11,366 11,728 — (23,094 ) — Properties — 9,395 8,397 — 17,792 Goodwill and intangible assets — — 192 — 192 Pension asset — 1,726 — — 1,726 Other assets — 57 11 — 68 Deferred income taxes 6 — — (6 ) — Total assets $ 12,581 $ 24,986 $ 14,007 $ (30,465 ) $ 21,109 Liabilities and shareholders’ equity Current liabilities Accounts payable and accrued liabilities $ 93 $ 822 $ 302 $ (28 ) $ 1,189 Accounts payable, intercompany 4 297 128 (429 ) — Short-term advances from affiliates 5,356 366 3 (5,725 ) — Long-term debt maturing within one year — 480 — — 480 5,453 1,965 433 (6,182 ) 1,669 Pension and other benefit liabilities — 668 78 — 746 Long-term advances from affiliates — 1,178 5 (1,183 ) — Other long-term liabilities — 114 118 — 232 Long-term debt — 7,754 52 — 7,806 Deferred income taxes — 1,941 1,593 (6 ) 3,528 Total liabilities 5,453 13,620 2,279 (7,371 ) 13,981 Shareholders’ equity Share capital 2,017 538 6,127 (6,665 ) 2,017 Additional paid-in capital 47 1,653 92 (1,745 ) 47 Accumulated other comprehensive (loss) income (1,654 ) (1,654 ) 571 1,083 (1,654 ) Retained earnings 6,718 10,829 4,938 (15,767 ) 6,718 7,128 11,366 11,728 (23,094 ) 7,128 Total liabilities and shareholders’ equity $ 12,581 $ 24,986 $ 14,007 $ (30,465 ) $ 21,109 As at December 31, 2017 (in millions of Canadian dollars) CPRL (Parent Guarantor) CPRC (Subsidiary Issuer) Non-Guarantor Subsidiaries Consolidating Adjustments and Eliminations CPRL Consolidated Assets Current assets Cash and cash equivalents $ — $ 241 $ 97 $ — $ 338 Accounts receivable, net — 508 179 — 687 Accounts receivable, intercompany 97 153 215 (465 ) — Short-term advances to affiliates 500 1,004 4,996 (6,500 ) — Materials and supplies — 120 32 — 152 Other current assets — 31 66 — 97 597 2,057 5,585 (6,965 ) 1,274 Long-term advances to affiliates 590 — 410 (1,000 ) — Investments — 27 155 — 182 Investments in subsidiaries 10,623 12,122 — (22,745 ) — Properties — 8,982 8,034 — 17,016 Goodwill and intangible assets — — 187 — 187 Pension asset — 1,407 — — 1,407 Other assets — 56 13 — 69 Deferred income taxes 3 — — (3 ) — Total assets $ 11,813 $ 24,651 $ 14,384 $ (30,713 ) $ 20,135 Liabilities and shareholders’ equity Current liabilities Accounts payable and accrued liabilities $ 82 $ 844 $ 312 $ — $ 1,238 Accounts payable, intercompany 3 309 153 (465 ) — Short-term advances from affiliates 5,291 1,185 24 (6,500 ) — Long-term debt maturing within one year — 746 — — 746 5,376 3,084 489 (6,965 ) 1,984 Pension and other benefit liabilities — 672 77 — 749 Long-term advances from affiliates — 1,000 — (1,000 ) — Other long-term liabilities — 108 123 — 231 Long-term debt — 7,362 51 — 7,413 Deferred income taxes — 1,802 1,522 (3 ) 3,321 Total liabilities 5,376 14,028 2,262 (7,968 ) 13,698 Shareholders’ equity Share capital 2,032 1,037 6,730 (7,767 ) 2,032 Additional paid-in capital 43 1,643 259 (1,902 ) 43 Accumulated other comprehensive (loss) income (1,741 ) (1,742 ) 417 1,325 (1,741 ) Retained earnings 6,103 9,685 4,716 (14,401 ) 6,103 6,437 10,623 12,122 (22,745 ) 6,437 Total liabilities and shareholders’ equity $ 11,813 $ 24,651 $ 14,384 $ (30,713 ) $ 20,135 For the three months ended September 30, 2018 (in millions of Canadian dollars) CPRL (Parent Guarantor) CPRC (Subsidiary Issuer) Non-Guarantor Subsidiaries Consolidating Adjustments and Eliminations CPRL Consolidated Cash provided by operating activities $ 87 $ 416 $ 319 $ (149 ) $ 673 Investing activities Additions to properties — (303 ) (127 ) — (430 ) Proceeds from sale of properties and other assets — 4 3 — 7 Advances to affiliates — — (209 ) 209 — Repayment of advances to affiliates — 499 345 (844 ) — Repurchase of share capital from affiliates 500 236 — (736 ) — Cash provided by (used in) investing activities 500 436 12 (1,371 ) (423 ) Financing activities Dividends paid (92 ) (92 ) (57 ) 149 (92 ) Return of share capital to affiliates — (500 ) (236 ) 736 — Issuance of CP Common Shares 4 — — — 4 Repayment of long-term debt, excluding commercial paper — (5 ) — — (5 ) Net repayment of commercial paper — (53 ) — — (53 ) Advances from affiliates 209 — — (209 ) — Repayment of advances from affiliates (708 ) (136 ) — 844 — Cash used in financing activities (587 ) (786 ) (293 ) 1,520 (146 ) Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents — 17 (22 ) — (5 ) Cash position Increase in cash and cash equivalents — 83 16 — 99 Cash and cash equivalents at beginning of period — 20 31 — 51 Cash and cash equivalents at end of period $ — $ 103 $ 47 $ — $ 150 For the three months ended September 30, 2017 (in millions of Canadian dollars) CPRL (Parent Guarantor) CPRC (Subsidiary Issuer) Non-Guarantor Subsidiaries Consolidating Adjustments and Eliminations CPRL Consolidated Cash provided by operating activities $ 98 $ 322 $ 213 $ (106 ) $ 527 Investing activities Additions to properties — (193 ) (126 ) — (319 ) Proceeds from sale of properties and other assets — 11 2 — 13 Advances to affiliates — — (50 ) 50 — Repayment of advances to affiliates 159 1 — (160 ) — Capital contributions to affiliates — (26 ) — 26 — Repurchase of share capital from affiliates — 32 — (32 ) — Cash provided by (used in) investing activities 159 (175 ) (174 ) (116 ) (306 ) Financing activities Dividends paid (83 ) (83 ) (23 ) 106 (83 ) Issuance of share capital — — 26 (26 ) — Return of share capital to affiliates — — (32 ) 32 — Issuance of CP Common Shares 2 — — — 2 Purchase of CP Common Shares (226 ) — — — (226 ) Repayment of long-term debt, excluding commercial paper — (3 ) — — (3 ) Advances from affiliates 50 — — (50 ) — Repayment of advances from affiliates — (159 ) (1 ) 160 — Cash used in financing activities (257 ) (245 ) (30 ) 222 (310 ) Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents — (2 ) (5 ) — (7 ) Cash position (Decrease) increase in cash and cash equivalents — (100 ) 4 — (96 ) Cash and cash equivalents at beginning of period — 178 60 — 238 Cash and cash equivalents at end of period $ — $ 78 $ 64 $ — $ 142 For the nine months ended September 30, 2018 (in millions of Canadian dollars) CPRL (Parent Guarantor) CPRC (Subsidiary Issuer) Non-Guarantor Subsidiaries Consolidating Adjustments and Eliminations CPRL Consolidated Cash provided by operating activities $ 235 $ 1,309 $ 782 $ (545 ) $ 1,781 Investing activities Additions to properties — (701 ) (383 ) — (1,084 ) Proceeds from sale of properties and other assets — 10 6 — 16 Advances to affiliates — (63 ) (209 ) 272 — Repayment of advances to affiliates — — 840 (840 ) — Repurchase of share capital from affiliates 500 783 — (1,283 ) — Other — — (1 ) — (1 ) Cash provided by (used in) investing activities 500 29 253 (1,851 ) (1,069 ) Financing activities Dividends paid (255 ) (255 ) (290 ) 545 (255 ) Return of share capital to affiliates — (500 ) (783 ) 1,283 — Issuance of CP Common Shares 16 — — — 16 Purchase of CP Common Shares (559 ) — — — (559 ) Issuance of long-term debt, excluding commercial paper — 638 — — 638 Repayment of long-term debt, excluding commercial paper — (744 ) — — (744 ) Advances from affiliates 272 — — (272 ) — Repayment of advances from affiliates (209 ) (631 ) — 840 — Cash used in financing activities (735 ) (1,492 ) (1,073 ) 2,396 (904 ) Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents — 16 (12 ) — 4 Cash position Decrease in cash and cash equivalents — (138 ) (50 ) — (188 ) Cash and cash equivalents at beginning of year — 241 97 — 338 Cash and cash equivalents at end of year $ — $ 103 $ 47 $ — $ 150 For the nine months ended September 30, 2017 (in millions of Canadian dollars) CPRL (Parent Guarantor) CPRC (Subsidiary Issuer) Non-Guarantor Subsidiaries Consolidating Adjustments and Eliminations CPRL Consolidated Cash provided by operating activities $ 256 $ 875 $ 716 $ (398 ) $ 1,449 Investing activities Additions to properties — (494 ) (401 ) — (895 ) Proceeds from sale of properties and other assets — 17 12 — 29 Advances to affiliates (1,079 ) (550 ) (1,157 ) 2,786 — Capital contributions to affiliates — (1,039 ) — 1,039 — Repurchase of share capital from affiliates — 32 — (32 ) — Other — 6 (1 ) — 5 Cash used in investing activities (1,079 ) (2,028 ) (1,547 ) 3,793 (861 ) Financing activities Dividends paid (229 ) (229 ) (169 ) 398 (229 ) Issuance of share capital — — 1,039 (1,039 ) — Return of share capital to affiliates — — (32 ) 32 — Issuance of CP Common Shares 39 — — — 39 Purchase of CP Common Shares (368 ) — — — (368 ) Repayment of long-term debt, excluding commercial paper — (17 ) — — (17 ) Advances from affiliates 1,381 1,405 — (2,786 ) — Settlement of forward starting swaps on de-designation — (22 ) — — (22 ) Cash provided by (used in) financing activities 823 1,137 838 (3,395 ) (597 ) Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents — (6 ) (7 ) — (13 ) Cash position Decrease in cash and cash equivalents — (22 ) — — (22 ) Cash and cash equivalents at beginning of year — 100 64 — 164 Cash and cash equivalents at end of year $ — $ 78 $ 64 $ — $ 142 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | These unaudited interim consolidated financial statements of Canadian Pacific Railway Limited (“CP”, or “the Company”), expressed in Canadian dollars, reflect management’s estimates and assumptions that are necessary for their fair presentation in conformity with generally accepted accounting principles in the United States of America (“GAAP”). They do not include all disclosures required under GAAP for annual financial statements and should be read in conjunction with the 2017 annual consolidated financial statements and notes included in CP's 2017 Annual Report on Form 10-K. The accounting policies used are consistent with the accounting policies used in preparing the 2017 annual consolidated financial statements, except for the newly adopted accounting policies discussed in Note 2. CP's operations can be affected by seasonal fluctuations such as changes in customer demand and weather-related issues. This seasonality could impact quarter-over-quarter comparisons. |
Accounting Changes (Policies)
Accounting Changes (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Accounting Changes | Implemented in 2018 Revenue from Contracts with Customers On January 1, 2018, the Company adopted the new Accounting Standards Update ("ASU") 2014-09, issued by the Financial Accounting Standards Board ("FASB"), and all related amendments under FASB Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers, using the modified retrospective method. Comparative financial information has not been restated and continues to be reported under the accounting standards in effect for those periods. The Company did not recognize any adjustment to the opening balance of retained earnings upon adoption of ASC Topic 606. The Company expects the impact of adoption of this new standard to be immaterial to the Company’s net income on an ongoing basis. Compensation - Retirement Benefits On January 1, 2018, the Company adopted the changes required under ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit Cost under FASB ASC Topic 715, Retirement Benefits as issued by the FASB in March 2017. In accordance with the ASU, beginning on January 1, 2018, the Company reports the current service cost component of net periodic benefit cost in Compensation and benefits on the Company’s Consolidated Statements of Income, and reports the Other components of net periodic benefit recovery as a separate item outside of Operating income on the Company’s Consolidated Statements of Income. The Company has applied these changes in presentation retrospectively, which resulted in a decrease in Operating income of $68 million and $203 million for the three and nine months ended September 30, 2017, respectively. These changes in presentation do not result in any changes to net income or earnings per share. Details of the components of net periodic benefit costs are provided in Note 12 Pensions and other benefits. The ASU also prospectively restricts capitalization of net periodic benefit costs to the current service cost component when applicable. This restriction has no impact on the Company’s operating income or amounts capitalized because the Company has and continues to only capitalize an appropriate portion of current service cost for self-constructed properties. Derivatives and Hedging In August 2017, the FASB issued ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities, under FASB ASC Topic 815, Derivatives and Hedging. This improves the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities in its financial statements. These amendments also make targeted improvements to simplify the application of the hedge accounting guidance in GAAP. The amendments require the entire change in the fair value of the hedging instrument to be recorded in Other comprehensive income for effective cash flow hedges. Consequently, any ineffective portion of the change in fair value will no longer be recorded to the Consolidated Statement of Income as it arises. While the amendments are effective for public entities beginning on January 1, 2019, early adoption is permitted and the Company early adopted this ASU effective January 1, 2018. Entities are required to apply the amendments in this update to hedging relationships existing on the date of adoption, reflected as a cumulative-effect adjustment as of the beginning of the fiscal year of adoption. Other amendments to presentation and disclosure are applied prospectively. No significant cumulative-effect adjustment was required. Accumulated Other Comprehensive Income - Reclassification In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income under FASB ASC Topic 220, Income Statement - Reporting Comprehensive Income. The current standard ASC Topic 740, Income Taxes, requires deferred tax liabilities and assets to be adjusted for the effect of a change in tax laws or rates with the effect included in income from continuing operations in the reporting period that includes the enactment date. This includes the tax effects of items in Accumulated other comprehensive income ("AOCI") that were originally recognized in Other comprehensive income, subsequently creating stranded tax effects. This ASU allows a reclassification from AOCI to Retained earnings for stranded tax effects specifically resulting from the U.S. federal government's recently enacted tax bill, the Tax Cuts and Jobs Act. The amendments are effective for public entities beginning on January 1, 2019 and early adoption is permitted. Entities are required to apply these amendments either in the period of adoption or retrospectively to each period in which the effect of the change in tax rate from the Tax Cuts and Jobs Act was recognized. The Company early adopted this ASU effective January 1, 2018, electing not to change AOCI, Retained earnings or disclosure in the Company's Interim Consolidated Financial Statements. Future changes Leases |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table disaggregates the Company’s revenues from contracts with customers by major source: For the three months ended September 30 For the nine months ended September 30 (in millions of Canadian dollars) 2018 2017 (1) 2018 2017 (1) Freight Grain $ 384 $ 351 $ 1,113 $ 1,107 Coal 171 165 486 478 Potash 130 103 358 310 Fertilizers and sulphur 55 52 171 181 Forest products 76 67 211 202 Energy, chemicals and plastics 339 208 874 651 Metals, minerals, and consumer products 208 192 595 552 Automotive 85 68 247 223 Intermodal 406 341 1,133 1,004 Total freight revenues 1,854 1,547 5,188 4,708 Non-freight excluding leasing revenues 28 34 76 91 Revenues from contracts with customers 1,882 1,581 5,264 4,799 Leasing revenues 16 14 46 42 Total revenues $ 1,898 $ 1,595 $ 5,310 $ 4,841 (1) |
Changes in Accumulated Other _2
Changes in Accumulated Other Comprehensive Loss ("AOCL") by Component (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Changes in Accumulated Other Comprehensive Loss (AOCL) by Component | For the three months ended September 30 (in millions of Canadian dollars) Foreign currency net of hedging activities (1) Derivatives and (1) Pension and post- (1) Total (1) Opening balance, July 1, 2018 $ 110 $ (64 ) $ (1,719 ) $ (1,673 ) Other comprehensive (loss) income before reclassifications (1 ) (2 ) 1 (2 ) Amounts reclassified from accumulated other comprehensive loss — 2 19 21 Net other comprehensive (loss) income (1 ) — 20 19 Closing balance, September 30, 2018 $ 109 $ (64 ) $ (1,699 ) $ (1,654 ) Opening balance, July 1, 2017 $ 124 $ (97 ) $ (1,767 ) $ (1,740 ) Other comprehensive loss before reclassifications (5 ) — — (5 ) Amounts reclassified from accumulated other comprehensive loss — 2 28 30 Net other comprehensive (loss) income (5 ) 2 28 25 Closing balance, September 30, 2017 $ 119 $ (95 ) $ (1,739 ) $ (1,715 ) (1) Amounts are presented net of tax. For the nine months ended September 30 (in millions of Canadian dollars) Foreign currency net of hedging activities (1) Derivatives and (1) Pension and post- (1) Total (1) Opening balance, January 1, 2018 $ 109 $ (89 ) $ (1,761 ) $ (1,741 ) Other comprehensive income before reclassifications — 19 — 19 Amounts reclassified from accumulated other comprehensive loss — 6 62 68 Net other comprehensive income — 25 62 87 Closing balance, September 30, 2018 $ 109 $ (64 ) $ (1,699 ) $ (1,654 ) Opening balance, January 1, 2017 $ 127 $ (104 ) $ (1,822 ) $ (1,799 ) Other comprehensive loss before reclassifications (8 ) (7 ) — (15 ) Amounts reclassified from accumulated other comprehensive loss — 16 83 99 Net other comprehensive (loss) income (8 ) 9 83 84 Closing balance, September 30, 2017 $ 119 $ (95 ) $ (1,739 ) $ (1,715 ) (1) |
Amounts in Pension and Post-retirement Defined Benefit Plans Reclassified from AOCL | Amounts in Pension and post-retirement defined benefit plans reclassified from AOCL are as follows: For the three months ended September 30 For the nine months ended September 30 (in millions of Canadian dollars) 2018 2017 2018 2017 Amortization of prior service costs (1) $ (1 ) $ (1 ) $ (2 ) $ (3 ) Recognition of net actuarial loss (1) 29 39 88 116 Total before income tax 28 38 86 113 Income tax recovery (9 ) (10 ) (24 ) (30 ) Total net of income tax $ 19 $ 28 $ 62 $ 83 (1) Impacts " Other components of net periodic benefit recovery |
Other (Income) Expense (Tables)
Other (Income) Expense (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Other Income and Expenses [Abstract] | |
Other Income and Expenses | For the three months ended September 30 For the nine months ended September 30 (in millions of Canadian dollars) 2018 2017 2018 2017 Foreign exchange (gain) loss on long-term debt $ (38 ) $ (105 ) $ 55 $ (200 ) Other foreign exchange (gains) losses (1 ) (3 ) 2 (5 ) Insurance recovery of legal settlement — — — (10 ) Charge on hedge roll and de-designation — — — 13 Other (8 ) 3 (1 ) 8 Other (income) expense $ (47 ) $ (105 ) $ 56 $ (194 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Summary of Income Tax Expense | For the three months ended September 30 For the nine months ended September 30 (in millions of Canadian dollars) 2018 2017 2018 2017 Current income tax expense $ 122 $ 93 $ 288 $ 288 Deferred income tax expense 77 77 155 168 Income tax expense $ 199 $ 170 $ 443 $ 456 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Number of Shares Used In the Earnings Per Share Calculations | The number of shares used in earnings per share calculations is reconciled as follows: For the three months ended September 30 For the nine months ended September 30 (in millions) 2018 2017 2018 2017 Weighted-average basic shares outstanding 142.6 145.5 143.2 146.2 Dilutive effect of stock options 0.5 0.3 0.5 0.4 Weighted-average diluted shares outstanding 143.1 145.8 143.7 146.6 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Activities Under Share Repurchase Program | The following table describes activities under the share repurchase program: For the three months ended September 30 For the nine months ended September 30 2018 2017 2018 2017 Number of Common Shares repurchased — 1,145,400 2,495,962 1,828,300 Weighted-average price per share (1) $ — $ 196.46 $ 223.97 $ 201.50 Amount of repurchase (in millions) (1) $ — $ 225 $ 559 $ 368 (1) Includes brokerage fees. On October 17, 2018, the Company announced that it intends to implement a new NCIB to repurchase, for cancellation, up to approximately 5.68 million |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Value and Carrying Value of Long-term Debt | The carrying values of financial instruments equal or approximate their fair values with the exception of long-term debt: (in millions of Canadian dollars) September 30, 2018 December 31, 2017 Long-term debt (including current maturities): Fair value $ 9,206 $ 9,680 Carrying value 8,286 8,159 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Weighted-Average Fair Value Assumptions | The weighted-average fair value assumptions were approximately: For the nine months ended September 30, 2018 Grant price $240.91 Expected option life (years) (1) 5.00 Risk-free interest rate (2) 2.22% Expected stock price volatility (3) 24.81% Expected annual dividends per share (4) $2.3854 Expected forfeiture rate (5) 4.7% Weighted-average grant date fair value per option granted during the period $55.63 (1) Represents the period of time that awards are expected to be outstanding. Historical data on exercise behaviour, or when available, specific expectations regarding future exercise behaviour, were used to estimate the expected life of the option. (2) Based on the implied yield available on zero-coupon government issues with an equivalent term commensurate with the expected term of the option. (3) Based on the historical stock price volatility of the Company’s stock over a period commensurate with the expected term of the option. (4) Determined by the current annual dividend at the time of grant. The Company does not employ different dividend yields throughout the contractual term of the option. On May 10, 2018, the Company announced an increase in its quarterly dividend to $0.6500 per share, representing $2.6000 on an annual basis. (5) |
Pensions and Other Benefits (Ta
Pensions and Other Benefits (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Retirement Benefits [Abstract] | |
Net Periodic Benefit Cost for Defined Benefit Pension Plans and Other Benefits | Net periodic benefit costs for defined benefit pension plans and other benefits recognized in the three and nine months ended September 30, 2018 included the following components: For the three months ended September 30 Pensions Other benefits (in millions of Canadian dollars) 2018 2017 2018 2017 Current service cost (benefits earned by employees) $ 30 $ 26 $ 3 $ 3 Other components of net periodic benefit (recovery) cost: Interest cost on benefit obligation 110 112 5 5 Expected return on fund assets (239 ) (223 ) — — Recognized net actuarial loss 29 38 — 1 Amortization of prior service costs (1 ) (1 ) — — Total other components of net periodic benefit (recovery) cost (101 ) (74 ) 5 6 Net periodic benefit (recovery) cost $ (71 ) $ (48 ) $ 8 $ 9 For the nine months ended September 30 Pensions Other benefits (in millions of Canadian dollars) 2018 2017 2018 2017 Current service cost (benefits earned by employees) $ 90 $ 77 $ 9 $ 9 Other components of net periodic benefit (recovery) cost: Interest cost on benefit obligation 329 338 14 15 Expected return on fund assets (716 ) (669 ) — — Recognized net actuarial loss 86 114 2 2 Amortization of prior service costs (2 ) (3 ) — — Total other components of net periodic benefit (recovery) cost (303 ) (220 ) 16 17 Net periodic benefit (recovery) cost $ (213 ) $ (143 ) $ 25 $ 26 |
Condensed Consolidating Finan_2
Condensed Consolidating Financial Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Interim Condensed Consolidating Statements of Income | Interim Condensed Consolidating Statements of Income For the three months ended September 30, 2018 (in millions of Canadian dollars) CPRL (Parent Guarantor) CPRC (Subsidiary Issuer) Non-Guarantor Subsidiaries Consolidating Adjustments and Eliminations CPRL Consolidated Revenues Freight $ — $ 1,316 $ 538 $ — $ 1,854 Non-freight — 31 92 (79 ) 44 Total revenues — 1,347 630 (79 ) 1,898 Operating expenses Compensation and benefits — 246 117 2 365 Fuel — 177 49 — 226 Materials — 33 11 3 47 Equipment rents — 27 6 — 33 Depreciation and amortization — 105 69 — 174 Purchased services and other — 224 123 (84 ) 263 Total operating expenses — 812 375 (79 ) 1,108 Operating income — 535 255 — 790 Less: Other (income) expense (4 ) (46 ) 3 — (47 ) Other components of net periodic benefit (recovery) expense — (97 ) 1 — (96 ) Net interest (income) expense (2 ) 121 (7 ) — 112 Income before income tax expense and equity in net earnings of subsidiaries 6 557 258 — 821 Less: Income tax (recovery) expense (1 ) 142 58 — 199 Add: Equity in net earnings of subsidiaries 615 200 — (815 ) — Net income $ 622 $ 615 $ 200 $ (815 ) $ 622 For the three months ended September 30, 2017 (in millions of Canadian dollars) CPRL (Parent Guarantor) CPRC (Subsidiary Issuer) Non-Guarantor Subsidiaries Consolidating Adjustments and Eliminations CPRL Consolidated Revenues Freight $ — $ 1,092 $ 455 $ — $ 1,547 Non-freight — 38 90 (80 ) 48 Total revenues — 1,130 545 (80 ) 1,595 Operating expenses Compensation and benefits — 218 103 3 324 Fuel — 116 34 — 150 Materials — 33 11 1 45 Equipment rents — 35 — — 35 Depreciation and amortization — 108 54 — 162 Purchased services and other — 195 146 (84 ) 257 Total operating expenses — 705 348 (80 ) 973 Operating income — 425 197 — 622 Less: Other (income) expense (10 ) (100 ) 5 — (105 ) Other components of net periodic benefit (recovery) expense — (69 ) 1 — (68 ) Net interest (income) expense (2 ) 126 (9 ) — 115 Income before income tax expense and equity in net earnings of subsidiaries 12 468 200 — 680 Less: Income tax expense 7 99 64 — 170 Add: Equity in net earnings of subsidiaries 505 136 — (641 ) — Net income $ 510 $ 505 $ 136 $ (641 ) $ 510 For the nine months ended September 30, 2018 (in millions of Canadian dollars) CPRL (Parent Guarantor) CPRC (Subsidiary Issuer) Non-Guarantor Subsidiaries Consolidating Adjustments and Eliminations CPRL Consolidated Revenues Freight $ — $ 3,667 $ 1,521 $ — $ 5,188 Non-freight — 89 271 (238 ) 122 Total revenues — 3,756 1,792 (238 ) 5,310 Operating expenses Compensation and benefits — 740 346 4 1,090 Fuel — 523 148 — 671 Materials — 106 38 11 155 Equipment rents — 88 11 — 99 Depreciation and amortization — 314 202 — 516 Purchased services and other — 647 428 (253 ) 822 Total operating expenses — 2,418 1,173 (238 ) 3,353 Operating income — 1,338 619 — 1,957 Less: Other expense (income) 7 81 (32 ) — 56 Other components of net periodic benefit (recovery) expense — (289 ) 2 — (287 ) Net interest expense (income) 4 356 (21 ) — 339 (Loss) income before income tax expense and equity in net earnings of subsidiaries (11 ) 1,190 670 — 1,849 Less: Income tax (recovery) expense (2 ) 327 118 — 443 Add: Equity in net earnings of subsidiaries 1,415 552 — (1,967 ) — Net income $ 1,406 $ 1,415 $ 552 $ (1,967 ) $ 1,406 For the nine months ended September 30, 2017 (in millions of Canadian dollars) CPRL (Parent Guarantor) CPRC (Subsidiary Issuer) Non-Guarantor Subsidiaries Consolidating Adjustments and Eliminations CPRL Consolidated Revenues Freight $ — $ 3,310 $ 1,398 $ — $ 4,708 Non-freight — 104 278 (249 ) 133 Total revenues — 3,414 1,676 (249 ) 4,841 Operating expenses Compensation and benefits — 644 320 5 969 Fuel — 370 110 — 480 Materials — 101 28 13 142 Equipment rents — 110 (2 ) — 108 Depreciation and amortization — 325 168 — 493 Purchased services and other — 613 466 (267 ) 812 Total operating expenses — 2,163 1,090 (249 ) 3,004 Operating income — 1,251 586 — 1,837 Less: Other (income) expense (35 ) (166 ) 7 — (194 ) Other components of net periodic benefit (recovery) expense — (206 ) 3 — (203 ) Net interest (income) expense (9 ) 390 (24 ) — 357 Income before income tax expense and equity in net earnings of subsidiaries 44 1,233 600 — 1,877 Less: Income tax expense 9 259 188 — 456 Add: Equity in net earnings of subsidiaries 1,386 412 — (1,798 ) — Net income $ 1,421 $ 1,386 $ 412 $ (1,798 ) $ 1,421 |
Interim Condensed Consolidating Statements of Comprehensive Income | Interim Condensed Consolidating Statements of Comprehensive Income For the three months ended September 30, 2018 (in millions of Canadian dollars) CPRL (Parent Guarantor) CPRC (Subsidiary Issuer) Non-Guarantor Subsidiaries Consolidating Adjustments and Eliminations CPRL Consolidated Net income $ 622 $ 615 $ 200 $ (815 ) $ 622 Net gain (loss) in foreign currency translation adjustments, net of hedging activities — 96 (84 ) — 12 Change in derivatives designated as cash flow — 1 — — 1 Change in pension and post-retirement defined — 27 1 — 28 Other comprehensive income (loss) before income taxes — 124 (83 ) — 41 Income tax expense on above items — (22 ) — — (22 ) Equity accounted investments 19 (83 ) — 64 — Other comprehensive income (loss) 19 19 (83 ) 64 19 Comprehensive income $ 641 $ 634 $ 117 $ (751 ) $ 641 For the three months ended September 30, 2017 (in millions of Canadian dollars) CPRL (Parent Guarantor) CPRC (Subsidiary Issuer) Non-Guarantor Subsidiaries Consolidating Adjustments and Eliminations CPRL Consolidated Net income $ 510 $ 505 $ 136 $ (641 ) $ 510 Net gain (loss) in foreign currency translation adjustments, net of hedging activities — 180 (161 ) — 19 Change in derivatives designated as cash flow — 2 — — 2 Change in pension and post-retirement defined — 36 2 — 38 Other comprehensive income (loss) before income taxes — 218 (159 ) — 59 Income tax expense on above items — (34 ) — — (34 ) Equity accounted investments 25 (159 ) — 134 — Other comprehensive income (loss) 25 25 (159 ) 134 25 Comprehensive income (loss) $ 535 $ 530 $ (23 ) $ (507 ) $ 535 For the nine months ended September 30, 2018 (in millions of Canadian dollars) CPRL (Parent Guarantor) CPRC (Subsidiary Issuer) Non-Guarantor Subsidiaries Consolidating Adjustments and Eliminations CPRL Consolidated Net income $ 1,406 $ 1,415 $ 552 $ (1,967 ) $ 1,406 Net (loss) gain in foreign currency translation adjustments, net of hedging activities — (177 ) 153 — (24 ) Change in derivatives designated as cash flow — 36 — — 36 Change in pension and post-retirement defined — 82 4 — 86 Other comprehensive (loss) income before income taxes — (59 ) 157 — 98 Income tax expense on above items — (10 ) (1 ) — (11 ) Equity accounted investments 87 156 — (243 ) — Other comprehensive income 87 87 156 (243 ) 87 Comprehensive income $ 1,493 $ 1,502 $ 708 $ (2,210 ) $ 1,493 For the nine months ended September 30, 2017 (in millions of Canadian dollars) CPRL (Parent Guarantor) CPRC (Subsidiary Issuer) Non-Guarantor Subsidiaries Consolidating Adjustments and Eliminations CPRL Consolidated Net income $ 1,421 $ 1,386 $ 412 $ (1,798 ) $ 1,421 Net gain (loss) in foreign currency translation adjustments, net of hedging activities — 342 (304 ) — 38 Change in derivatives designated as cash flow — 11 — — 11 Change in pension and post-retirement defined — 108 5 — 113 Other comprehensive income (loss) before income taxes — 461 (299 ) — 162 Income tax expense on above items — (77 ) (1 ) — (78 ) Equity accounted investments 84 (300 ) — 216 — Other comprehensive income (loss) 84 84 (300 ) 216 84 Comprehensive income $ 1,505 $ 1,470 $ 112 $ (1,582 ) $ 1,505 |
Interim Condensed Consolidating Balance Sheets | Interim Condensed Consolidating Balance Sheets As at September 30, 2018 (in millions of Canadian dollars) CPRL (Parent Guarantor) CPRC (Subsidiary Issuer) Non-Guarantor Subsidiaries Consolidating Adjustments and Eliminations CPRL Consolidated Assets Current assets Cash and cash equivalents $ — $ 103 $ 47 $ — $ 150 Accounts receivable, net — 592 167 — 759 Accounts receivable, intercompany 119 128 182 (429 ) — Short-term advances to affiliates — 1,049 4,676 (5,725 ) — Materials and supplies — 123 33 — 156 Other current assets — 45 48 (28 ) 65 119 2,040 5,153 (6,182 ) 1,130 Long-term advances to affiliates 1,090 5 88 (1,183 ) — Investments — 35 166 — 201 Investments in subsidiaries 11,366 11,728 — (23,094 ) — Properties — 9,395 8,397 — 17,792 Goodwill and intangible assets — — 192 — 192 Pension asset — 1,726 — — 1,726 Other assets — 57 11 — 68 Deferred income taxes 6 — — (6 ) — Total assets $ 12,581 $ 24,986 $ 14,007 $ (30,465 ) $ 21,109 Liabilities and shareholders’ equity Current liabilities Accounts payable and accrued liabilities $ 93 $ 822 $ 302 $ (28 ) $ 1,189 Accounts payable, intercompany 4 297 128 (429 ) — Short-term advances from affiliates 5,356 366 3 (5,725 ) — Long-term debt maturing within one year — 480 — — 480 5,453 1,965 433 (6,182 ) 1,669 Pension and other benefit liabilities — 668 78 — 746 Long-term advances from affiliates — 1,178 5 (1,183 ) — Other long-term liabilities — 114 118 — 232 Long-term debt — 7,754 52 — 7,806 Deferred income taxes — 1,941 1,593 (6 ) 3,528 Total liabilities 5,453 13,620 2,279 (7,371 ) 13,981 Shareholders’ equity Share capital 2,017 538 6,127 (6,665 ) 2,017 Additional paid-in capital 47 1,653 92 (1,745 ) 47 Accumulated other comprehensive (loss) income (1,654 ) (1,654 ) 571 1,083 (1,654 ) Retained earnings 6,718 10,829 4,938 (15,767 ) 6,718 7,128 11,366 11,728 (23,094 ) 7,128 Total liabilities and shareholders’ equity $ 12,581 $ 24,986 $ 14,007 $ (30,465 ) $ 21,109 As at December 31, 2017 (in millions of Canadian dollars) CPRL (Parent Guarantor) CPRC (Subsidiary Issuer) Non-Guarantor Subsidiaries Consolidating Adjustments and Eliminations CPRL Consolidated Assets Current assets Cash and cash equivalents $ — $ 241 $ 97 $ — $ 338 Accounts receivable, net — 508 179 — 687 Accounts receivable, intercompany 97 153 215 (465 ) — Short-term advances to affiliates 500 1,004 4,996 (6,500 ) — Materials and supplies — 120 32 — 152 Other current assets — 31 66 — 97 597 2,057 5,585 (6,965 ) 1,274 Long-term advances to affiliates 590 — 410 (1,000 ) — Investments — 27 155 — 182 Investments in subsidiaries 10,623 12,122 — (22,745 ) — Properties — 8,982 8,034 — 17,016 Goodwill and intangible assets — — 187 — 187 Pension asset — 1,407 — — 1,407 Other assets — 56 13 — 69 Deferred income taxes 3 — — (3 ) — Total assets $ 11,813 $ 24,651 $ 14,384 $ (30,713 ) $ 20,135 Liabilities and shareholders’ equity Current liabilities Accounts payable and accrued liabilities $ 82 $ 844 $ 312 $ — $ 1,238 Accounts payable, intercompany 3 309 153 (465 ) — Short-term advances from affiliates 5,291 1,185 24 (6,500 ) — Long-term debt maturing within one year — 746 — — 746 5,376 3,084 489 (6,965 ) 1,984 Pension and other benefit liabilities — 672 77 — 749 Long-term advances from affiliates — 1,000 — (1,000 ) — Other long-term liabilities — 108 123 — 231 Long-term debt — 7,362 51 — 7,413 Deferred income taxes — 1,802 1,522 (3 ) 3,321 Total liabilities 5,376 14,028 2,262 (7,968 ) 13,698 Shareholders’ equity Share capital 2,032 1,037 6,730 (7,767 ) 2,032 Additional paid-in capital 43 1,643 259 (1,902 ) 43 Accumulated other comprehensive (loss) income (1,741 ) (1,742 ) 417 1,325 (1,741 ) Retained earnings 6,103 9,685 4,716 (14,401 ) 6,103 6,437 10,623 12,122 (22,745 ) 6,437 Total liabilities and shareholders’ equity $ 11,813 $ 24,651 $ 14,384 $ (30,713 ) $ 20,135 |
Interim Condensed Consolidating Statements of Cash Flows | Interim Condensed Consolidating Statements of Cash Flows For the three months ended September 30, 2018 (in millions of Canadian dollars) CPRL (Parent Guarantor) CPRC (Subsidiary Issuer) Non-Guarantor Subsidiaries Consolidating Adjustments and Eliminations CPRL Consolidated Cash provided by operating activities $ 87 $ 416 $ 319 $ (149 ) $ 673 Investing activities Additions to properties — (303 ) (127 ) — (430 ) Proceeds from sale of properties and other assets — 4 3 — 7 Advances to affiliates — — (209 ) 209 — Repayment of advances to affiliates — 499 345 (844 ) — Repurchase of share capital from affiliates 500 236 — (736 ) — Cash provided by (used in) investing activities 500 436 12 (1,371 ) (423 ) Financing activities Dividends paid (92 ) (92 ) (57 ) 149 (92 ) Return of share capital to affiliates — (500 ) (236 ) 736 — Issuance of CP Common Shares 4 — — — 4 Repayment of long-term debt, excluding commercial paper — (5 ) — — (5 ) Net repayment of commercial paper — (53 ) — — (53 ) Advances from affiliates 209 — — (209 ) — Repayment of advances from affiliates (708 ) (136 ) — 844 — Cash used in financing activities (587 ) (786 ) (293 ) 1,520 (146 ) Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents — 17 (22 ) — (5 ) Cash position Increase in cash and cash equivalents — 83 16 — 99 Cash and cash equivalents at beginning of period — 20 31 — 51 Cash and cash equivalents at end of period $ — $ 103 $ 47 $ — $ 150 For the three months ended September 30, 2017 (in millions of Canadian dollars) CPRL (Parent Guarantor) CPRC (Subsidiary Issuer) Non-Guarantor Subsidiaries Consolidating Adjustments and Eliminations CPRL Consolidated Cash provided by operating activities $ 98 $ 322 $ 213 $ (106 ) $ 527 Investing activities Additions to properties — (193 ) (126 ) — (319 ) Proceeds from sale of properties and other assets — 11 2 — 13 Advances to affiliates — — (50 ) 50 — Repayment of advances to affiliates 159 1 — (160 ) — Capital contributions to affiliates — (26 ) — 26 — Repurchase of share capital from affiliates — 32 — (32 ) — Cash provided by (used in) investing activities 159 (175 ) (174 ) (116 ) (306 ) Financing activities Dividends paid (83 ) (83 ) (23 ) 106 (83 ) Issuance of share capital — — 26 (26 ) — Return of share capital to affiliates — — (32 ) 32 — Issuance of CP Common Shares 2 — — — 2 Purchase of CP Common Shares (226 ) — — — (226 ) Repayment of long-term debt, excluding commercial paper — (3 ) — — (3 ) Advances from affiliates 50 — — (50 ) — Repayment of advances from affiliates — (159 ) (1 ) 160 — Cash used in financing activities (257 ) (245 ) (30 ) 222 (310 ) Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents — (2 ) (5 ) — (7 ) Cash position (Decrease) increase in cash and cash equivalents — (100 ) 4 — (96 ) Cash and cash equivalents at beginning of period — 178 60 — 238 Cash and cash equivalents at end of period $ — $ 78 $ 64 $ — $ 142 For the nine months ended September 30, 2018 (in millions of Canadian dollars) CPRL (Parent Guarantor) CPRC (Subsidiary Issuer) Non-Guarantor Subsidiaries Consolidating Adjustments and Eliminations CPRL Consolidated Cash provided by operating activities $ 235 $ 1,309 $ 782 $ (545 ) $ 1,781 Investing activities Additions to properties — (701 ) (383 ) — (1,084 ) Proceeds from sale of properties and other assets — 10 6 — 16 Advances to affiliates — (63 ) (209 ) 272 — Repayment of advances to affiliates — — 840 (840 ) — Repurchase of share capital from affiliates 500 783 — (1,283 ) — Other — — (1 ) — (1 ) Cash provided by (used in) investing activities 500 29 253 (1,851 ) (1,069 ) Financing activities Dividends paid (255 ) (255 ) (290 ) 545 (255 ) Return of share capital to affiliates — (500 ) (783 ) 1,283 — Issuance of CP Common Shares 16 — — — 16 Purchase of CP Common Shares (559 ) — — — (559 ) Issuance of long-term debt, excluding commercial paper — 638 — — 638 Repayment of long-term debt, excluding commercial paper — (744 ) — — (744 ) Advances from affiliates 272 — — (272 ) — Repayment of advances from affiliates (209 ) (631 ) — 840 — Cash used in financing activities (735 ) (1,492 ) (1,073 ) 2,396 (904 ) Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents — 16 (12 ) — 4 Cash position Decrease in cash and cash equivalents — (138 ) (50 ) — (188 ) Cash and cash equivalents at beginning of year — 241 97 — 338 Cash and cash equivalents at end of year $ — $ 103 $ 47 $ — $ 150 For the nine months ended September 30, 2017 (in millions of Canadian dollars) CPRL (Parent Guarantor) CPRC (Subsidiary Issuer) Non-Guarantor Subsidiaries Consolidating Adjustments and Eliminations CPRL Consolidated Cash provided by operating activities $ 256 $ 875 $ 716 $ (398 ) $ 1,449 Investing activities Additions to properties — (494 ) (401 ) — (895 ) Proceeds from sale of properties and other assets — 17 12 — 29 Advances to affiliates (1,079 ) (550 ) (1,157 ) 2,786 — Capital contributions to affiliates — (1,039 ) — 1,039 — Repurchase of share capital from affiliates — 32 — (32 ) — Other — 6 (1 ) — 5 Cash used in investing activities (1,079 ) (2,028 ) (1,547 ) 3,793 (861 ) Financing activities Dividends paid (229 ) (229 ) (169 ) 398 (229 ) Issuance of share capital — — 1,039 (1,039 ) — Return of share capital to affiliates — — (32 ) 32 — Issuance of CP Common Shares 39 — — — 39 Purchase of CP Common Shares (368 ) — — — (368 ) Repayment of long-term debt, excluding commercial paper — (17 ) — — (17 ) Advances from affiliates 1,381 1,405 — (2,786 ) — Settlement of forward starting swaps on de-designation — (22 ) — — (22 ) Cash provided by (used in) financing activities 823 1,137 838 (3,395 ) (597 ) Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents — (6 ) (7 ) — (13 ) Cash position Decrease in cash and cash equivalents — (22 ) — — (22 ) Cash and cash equivalents at beginning of year — 100 64 — 164 Cash and cash equivalents at end of year $ — $ 78 $ 64 $ — $ 142 |
Accounting Changes - Narrative
Accounting Changes - Narrative (Details) - CAD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Accounting Standards Update 2017-07 [Member] | ||
Change in Accounting Estimate [Line Items] | ||
New Accounting Pronouncement, Effect of Adoption, Quantification | $ 68 | $ 203 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - CAD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | $ 1,882 | $ 1,581 | $ 5,264 | $ 4,799 |
Leasing revenues | 16 | 14 | 46 | 42 |
Total revenues | 1,898 | 1,595 | 5,310 | 4,841 |
Freight [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 1,854 | 1,547 | 5,188 | 4,708 |
Freight [Member] | Grain [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 384 | 351 | 1,113 | 1,107 |
Freight [Member] | Coal [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 171 | 165 | 486 | 478 |
Freight [Member] | Potash [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 130 | 103 | 358 | 310 |
Freight [Member] | Fertilizer and Sulphur [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 55 | 52 | 171 | 181 |
Freight [Member] | Forest Products [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 76 | 67 | 211 | 202 |
Freight [Member] | Energy, Chemicals and Plastic [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 339 | 208 | 874 | 651 |
Freight [Member] | Metals, Minerals and Consumer Products [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 208 | 192 | 595 | 552 |
Freight [Member] | Automotive [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 85 | 68 | 247 | 223 |
Freight [Member] | Intermodal [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 406 | 341 | 1,133 | 1,004 |
Non-Freight [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | $ 28 | $ 34 | $ 76 | $ 91 |
Changes in Accumulated Other _3
Changes in Accumulated Other Comprehensive Loss ("AOCL") by Component - Changes in AOCL by Component (Details) - CAD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
AOC Income (Loss), Opening balance | $ (1,673) | $ (1,740) | $ (1,741) | $ (1,799) |
Other comprehensive income (loss) before reclassifications | (2) | (5) | 19 | (15) |
Amounts reclassified from accumulated other comprehensive loss | 21 | 30 | 68 | 99 |
Net current-period other comprehensive income (loss) | 19 | 25 | 87 | 84 |
AOC Income (Loss), Closing balance | (1,654) | (1,715) | (1,654) | (1,715) |
Foreign currency net of hedging activities | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
AOC Income (Loss), Opening balance | 110 | 124 | 109 | 127 |
Other comprehensive income (loss) before reclassifications | (1) | (5) | 0 | (8) |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | 0 | 0 |
Net current-period other comprehensive income (loss) | (1) | (5) | 0 | (8) |
AOC Income (Loss), Closing balance | 109 | 119 | 109 | 119 |
Derivatives and other | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
AOC Income (Loss), Opening balance | (64) | (97) | (89) | (104) |
Other comprehensive income (loss) before reclassifications | (2) | 0 | 19 | (7) |
Amounts reclassified from accumulated other comprehensive loss | 2 | 2 | 6 | 16 |
Net current-period other comprehensive income (loss) | 0 | 2 | 25 | 9 |
AOC Income (Loss), Closing balance | (64) | (95) | (64) | (95) |
Pension and post-retirement defined benefit plans | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
AOC Income (Loss), Opening balance | (1,719) | (1,767) | (1,761) | (1,822) |
Other comprehensive income (loss) before reclassifications | 1 | 0 | 0 | 0 |
Amounts reclassified from accumulated other comprehensive loss | 19 | 28 | 62 | 83 |
Net current-period other comprehensive income (loss) | 20 | 28 | 62 | 83 |
AOC Income (Loss), Closing balance | $ (1,699) | $ (1,739) | $ (1,699) | $ (1,739) |
Changes in Accumulated Other _4
Changes in Accumulated Other Comprehensive Loss ("AOCL") by Component - Amounts in Pension and Post-Retirement Defined Benefit Plans Reclassified from AOCL (Details) - CAD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Total before income tax | $ 821 | $ 680 | $ 1,849 | $ 1,877 |
Income tax recovery | (199) | (170) | (443) | (456) |
Net of income tax | 622 | 510 | 1,406 | 1,421 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Amortization of prior service costs | (1) | (1) | (2) | (3) |
Recognition of net actuarial loss | 29 | 39 | 88 | 116 |
Total before income tax | 28 | 38 | 86 | 113 |
Income tax recovery | (9) | (10) | (24) | (30) |
Net of income tax | $ 19 | $ 28 | $ 62 | $ 83 |
Other (Income) Expense (Details
Other (Income) Expense (Details) - CAD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Other Income and Expenses [Abstract] | ||||
Foreign exchange (gain) loss on long-term debt | $ (38) | $ (105) | $ 55 | $ (200) |
Other foreign exchange (gains) losses | (1) | (3) | 2 | (5) |
Insurance recovery of legal settlement | 0 | 0 | 0 | (10) |
Charge on hedge roll and de-designation | 0 | 0 | 0 | 13 |
Other | (8) | 3 | (1) | 8 |
Total other (income) expense | $ (47) | $ (105) | $ 56 | $ (194) |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income Tax Expense (Details) - CAD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Current income tax expense | $ 122 | $ 93 | $ 288 | $ 288 |
Deferred income tax expense | 77 | 77 | 155 | 168 |
Income tax expense | $ 199 | $ 170 | $ 443 | $ 456 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - CAD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Jun. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |||||
Tax (recovery) expense due to changes in income tax rates | $ (21) | $ 3 | $ (21) | $ (14) | |
Effective tax rate | 24.23% | 24.95% | 23.95% | 24.28% | |
Foreign exchange (gain) loss on long-term debt | $ (38) | $ (105) | $ 55 | $ (200) | |
Effective tax rate, excluding discrete items | 24.75% | 26.50% | 24.75% | 26.50% | |
Insurance recovery of legal settlement | $ 0 | $ 0 | $ 0 | $ (10) | |
Charge on hedge roll and de-designation | $ 0 | $ 0 | $ 0 | 13 | |
Chief Executive Officer [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation and benefits | $ (51) |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Employee Stock Options | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Number of options excluded from the computation of diluted earnings per share | 0.3 | 0.3 | 0.2 | 0.3 | ||
Share capital [Member] | ||||||
Earnings Per Share [Abstract] | ||||||
Number of shares outstanding | 142.6 | 145 | 142.6 | 145 | 144.9 | 146.3 |
Earnings Per Share - Number of
Earnings Per Share - Number of Shares Used in Earnings Per Share Calculations (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share [Abstract] | ||||
Weighted average basic shares outstanding | 142.6 | 145.5 | 143.2 | 146.2 |
Dilutive effect of stock options | 0.5 | 0.3 | 0.5 | 0.4 |
Weighted average diluted shares outstanding | 143.1 | 145.8 | 143.7 | 146.6 |
Debt - Revolving Credit Facilit
Debt - Revolving Credit Facility (Narrative) (Details) - USD ($) $ in Billions | Jun. 08, 2018 | Jun. 23, 2017 | Sep. 30, 2018 |
Revolving Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Credit Facility, Maximum Borrowing Capacity | $ 2 | $ 1 | |
Five year maturity credit facility, maturity date | Jun. 28, 2023 | Jun. 28, 2022 | |
One Year Plus One Year Term Out Portion [Member] | |||
Line of Credit Facility [Line Items] | |||
One-year plus one-year credit facility canceled during the period | $ 1 |
Debt - Long-term Debt (Details)
Debt - Long-term Debt (Details) $ in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2018CAD ($) | Jun. 30, 2018CAD ($) | Jun. 30, 2018USD ($) | Sep. 30, 2017CAD ($) | Sep. 30, 2018CAD ($) | Sep. 30, 2017CAD ($) | Sep. 30, 2018USD ($) | |
Debt Instrument [Line Items] | |||||||
Settlement of forward starting swaps on debt issuance | $ 0 | $ 0 | $ 24 | $ 0 | |||
U.S. $275 million 6.500% 10-year Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Interest Rate | 6.50% | ||||||
Debt Instrument, Term | 10 years | 10 years | |||||
Extinguishment of Debt, Amount | $ 352 | $ 275 | |||||
$375 million 6.250% 10-year Medium Term Notes [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Interest Rate | 6.25% | ||||||
Debt Instrument, Term | 10 years | 10 years | |||||
Extinguishment of Debt, Amount | $ 375 | ||||||
Forward Starting Swaps [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Floating-to-fixed interest rate swaps, Notional amount | $ 500 | $ 500 | |||||
Settlement of forward starting swaps on debt issuance | $ 24 | $ 19 | |||||
U.S. $500 million 4.000% 10-year Notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Face Amount | $ 500 | ||||||
Debt Instrument, Interest Rate | 4.00% | ||||||
Debt Instrument, Term | 10 years | 10 years | 10 years | ||||
Debt Instrument, Maturity Date | Jun. 1, 2028 | Jun. 1, 2028 | |||||
Proceeds from Issuance of Debt | $ 638 | $ 495 |
Debt - Commercial Paper Program
Debt - Commercial Paper Program (Narrative) (Details) $ in Billions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Revolving Credit Facility [Member] | |
Debt Instrument [Line Items] | |
Credit total available amount | $ 1 |
Commercial Paper [Member] | |
Debt Instrument [Line Items] | |
Credit total available amount | $ 1 |
Debt instrument maturity | less than 90 days |
Shareholders Equity - Narrative
Shareholders Equity - Narrative (Details) - shares | 9 Months Ended | ||
Sep. 30, 2018 | Oct. 17, 2018 | May 10, 2017 | |
Normal Course Issuer Bid (NCIB) [Member] | |||
Share repurchase expiration date | May 14, 2018 | ||
Normal Course Issuer Bid (NCIB) [Member] | Maximum [Member] | |||
Common shares authorized to be repurchased (in shares) | 4,380,000 | ||
Subsequent Event [Member] | Current Normal Course Issuer Bid (NCIB) [Member] | Maximum [Member] | |||
Common shares authorized to be repurchased (in shares) | 5,680,000 |
Shareholders' Equity - Activiti
Shareholders' Equity - Activities Under Shares Repurchase Program (Detail) - CAD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Common Shares repurchased | $ 559 | $ 368 | ||
Normal Course Issuer Bid (NCIB) [Member] | ||||
Common Shares repurchased (in shares) | 0 | 1,145,400 | 2,495,962 | 1,828,300 |
Weighted-average price per share | $ 0 | $ 196.46 | $ 223.97 | $ 201.50 |
Common Shares repurchased | $ 0 | $ 225 | $ 559 | $ 368 |
Financial Instruments - FV and
Financial Instruments - FV and CV of Long-term Debt (Details) - CAD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Schedule of Investments [Line Items] | ||
Long-term Debt, Fair value | $ 9,206 | $ 9,680 |
Carrying Value Measurement [Member] | ||
Schedule of Investments [Line Items] | ||
Long-term Debt, Carrying value | $ 8,286 | $ 8,159 |
Financial Instruments (Details)
Financial Instruments (Details) $ in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2018CAD ($) | Jun. 30, 2018CAD ($) | Sep. 30, 2017CAD ($) | Sep. 30, 2018CAD ($) | Sep. 30, 2017CAD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | |
U.S. $500 million 4.000% 10-year Notes | |||||||
Schedule of Investments [Line Items] | |||||||
Debt Instrument, Face Amount | $ 500 | ||||||
Debt Instrument, Interest Rate | 4.00% | ||||||
Debt Instrument, Term | 10 years | 10 years | |||||
Forward Starting Swaps [Member] | |||||||
Schedule of Investments [Line Items] | |||||||
Floating-to-fixed interest rate swaps, Notional amount | $ 500 | $ 500 | |||||
Fair value loss | $ (24) | $ (19) | |||||
Gain (Loss) on Derivative, Net | $ 31 | $ (12) | |||||
Forward Starting Swaps [Member] | Net Interest Expense [Member] | |||||||
Schedule of Investments [Line Items] | |||||||
Derivative losses amortized to net interest expense | $ 2 | $ 3 | 7 | 8 | |||
Derivative losses expected to be amortized to net interest expense | (9) | ||||||
Net Investment Hedging [Member] | |||||||
Schedule of Investments [Line Items] | |||||||
Gain (Loss) on Derivative, Net | $ 96 | $ 180 | $ (177) | $ 342 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - CAD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||||
Stock-based compensation expense | $ 28 | $ 11 | $ 60 | $ 16 | |
Employee Stock Options | |||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||||
Number of options issued (shares) | 282,125 | ||||
Weighted average exercise price on the grant date (per share) | $ 240.91 | ||||
Expiration period | 7 years | ||||
Grant date fair value, options | $ 16 | ||||
Employee Stock Options | Minimum [Member] | |||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||||
Vesting period | 12 months | ||||
Employee Stock Options | Maximum [Member] | |||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||||
Vesting period | 48 months | ||||
Performance Shares [Member] | |||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||||
Vesting period | 3 years | ||||
Units issued | 161,323 | ||||
Grant date fair value | $ 39 | ||||
PSU payout percentage | 160.00% | ||||
Number of trading days | 30 days | ||||
PSU payout | $ 30 | ||||
PSUs vested in the period | 82,800 | ||||
Deferred Share Units [Member] | |||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||||
Vesting period | 48 months | ||||
Units issued | 13,888 | ||||
Grant date fair value | $ 3 | ||||
Restricted Stock Units (RSUs) [Member] | |||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||||
Vesting period | 3 years | ||||
Units issued | 21,895 | ||||
Grant date fair value | $ 5 | ||||
Chief Executive Officer [Member] | |||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||||
Compensation and benefits | (51) | ||||
Pension benefits | $ (27) | ||||
Chief Executive Officer [Member] | Employee Stock Options | |||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||||
Forfeited vested and unvested options | 752,145 | ||||
Chief Executive Officer [Member] | Performance Shares [Member] | |||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||||
Forfeited awards other than options | 22,514 | ||||
Chief Executive Officer [Member] | Deferred Share Units [Member] | |||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||||
Forfeited awards other than options | 68,612 |
Stock-Based Compensation - Weig
Stock-Based Compensation - Weighted-Average Fair Value Assumptions (Details) - CAD ($) | May 10, 2018 | Sep. 30, 2018 | Dec. 31, 2018 |
Scenario, Forecast [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected annual dividends per share | $ 2.6000 | ||
Employee Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average exercise price on the grant date (per share) | $ 240.91 | ||
Expected option life (years) | 5 years | ||
Risk-free interest rate | 2.22% | ||
Expected stock price volatility | 24.81% | ||
Expected annual dividends per share | $ 0.6500 | $ 2.3854 | |
Estimated forfeiture rate | 4.70% | ||
Weighted average grant date fair value of options granted during the year (per share) | $ 55.63 |
Pensions and Other Benefits - N
Pensions and Other Benefits - Narrative (Details) - Pension Plans, Defined Benefit [Member] - CAD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Contributions made by the company | $ 13 | $ 11 | $ 25 | $ 35 |
Refund of plan surplus | $ (10) |
Pensions and Other Benefits -_2
Pensions and Other Benefits - Net Periodic Benefit Cost for DB Pension Plans and Other Benefits (Details) - CAD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Total other components of net periodic benefit (recovery) cost | $ (96) | $ (68) | $ (287) | $ (203) |
Pension Plans, Defined Benefit [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Current service cost (benefits earned by employees) | 30 | 26 | 90 | 77 |
Interest cost on benefit obligation | 110 | 112 | 329 | 338 |
Expected return on fund assets | (239) | (223) | (716) | (669) |
Recognized net actuarial loss | 29 | 38 | 86 | 114 |
Amortization of prior service costs | (1) | (1) | (2) | (3) |
Total other components of net periodic benefit (recovery) cost | (101) | (74) | (303) | (220) |
Net periodic benefit (recovery) cost | (71) | (48) | (213) | (143) |
Other Postretirement Benefit Plans, Defined Benefit [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Current service cost (benefits earned by employees) | 3 | 3 | 9 | 9 |
Interest cost on benefit obligation | 5 | 5 | 14 | 15 |
Expected return on fund assets | 0 | 0 | 0 | 0 |
Recognized net actuarial loss | 0 | 1 | 2 | 2 |
Amortization of prior service costs | 0 | 0 | 0 | 0 |
Total other components of net periodic benefit (recovery) cost | 5 | 6 | 16 | 17 |
Net periodic benefit (recovery) cost | $ 8 | $ 9 | $ 25 | $ 26 |
Contingencies - Legal Proceedin
Contingencies - Legal Proceedings (Details) - Lac-Megantic Rail Accident [Member] $ in Millions | May 14, 2018CAD ($)claim | Dec. 28, 2017CAD ($) | Oct. 10, 2017CAD ($) | Jul. 11, 2016CAD ($)claim | Jul. 05, 2016CAD ($) | Jul. 04, 2016CAD ($)claim | Apr. 12, 2016CAD ($) | Jul. 06, 2015CAD ($) | Sep. 30, 2018CAD ($) |
Claimed damages as a result of derailment | |||||||||
Other Commitments [Line Items] | |||||||||
Amount of fund to be distributed | $ 440 | ||||||||
Irving Oil [Member] | |||||||||
Other Commitments [Line Items] | |||||||||
Value of damages sought | $ 60 | ||||||||
Quebec Minister of Sustainable Development, Environment, Wildlife and Parks | |||||||||
Other Commitments [Line Items] | |||||||||
Value of damages sought | $ 95 | ||||||||
Quebec Attorney General | |||||||||
Other Commitments [Line Items] | |||||||||
Value of damages sought | $ 315 | $ 409 | |||||||
Initial Insurer Claimants | Subrogated insurance claim | |||||||||
Other Commitments [Line Items] | |||||||||
Value of damages sought | $ 14 | $ 16 | |||||||
Number of pending claims | claim | 8 | ||||||||
Additional Insurer Claimants | Subrogated insurance claim | |||||||||
Other Commitments [Line Items] | |||||||||
Value of damages sought | $ 3 | ||||||||
Number of pending claims | claim | 2 | ||||||||
Plaintiff [Member] | |||||||||
Other Commitments [Line Items] | |||||||||
Value of damages sought | $ 5 | ||||||||
Number of Plaintiffs | claim | 48 | ||||||||
The WD Trustee | Damages railcars loss recovery | |||||||||
Other Commitments [Line Items] | |||||||||
Value of damages sought | 6 | ||||||||
Montreal Maine and Atlantic Railway | World Fuel Entities [Member] | |||||||||
Other Commitments [Line Items] | |||||||||
Value of damages sought | $ 110 |
Contingencies - Environmental L
Contingencies - Environmental Liabilities (Details) - CAD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Site Contingency [Line Items] | |||||
Total amount provided for provisions for environmental remediation costs | $ 80 | $ 80 | $ 78 | ||
Term for expected payments to be made | 10 years | ||||
Purchased Services and Other [Member] | |||||
Site Contingency [Line Items] | |||||
Environmental remediation expense | $ 2 | $ 1 | $ 4 | $ 3 |
Condensed Consolidating Finan_3
Condensed Consolidating Financial Information - Interim Condensed Consolidating Statements of Income (Details) - CAD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues | ||||
Total revenues | $ 1,898 | $ 1,595 | $ 5,310 | $ 4,841 |
Operating expenses | ||||
Compensation and benefits | 365 | 324 | 1,090 | 969 |
Fuel | 226 | 150 | 671 | 480 |
Materials | 47 | 45 | 155 | 142 |
Equipment Rents | 33 | 35 | 99 | 108 |
Depreciation and amortization | 174 | 162 | 516 | 493 |
Purchased services and other | 263 | 257 | 822 | 812 |
Total operating expenses | 1,108 | 973 | 3,353 | 3,004 |
Operating income | 790 | 622 | 1,957 | 1,837 |
Less: | ||||
Other (income) expense | (47) | (105) | 56 | (194) |
Other components of net periodic benefit recovery cost | (96) | (68) | (287) | (203) |
Net interest expense (income) | 112 | 115 | 339 | 357 |
Income before income tax expense | 821 | 680 | 1,849 | 1,877 |
Income tax expense (recovery) | 199 | 170 | 443 | 456 |
Equity in net earnings of subsidiaries | 0 | 0 | 0 | 0 |
Net income | 622 | 510 | 1,406 | 1,421 |
Consolidating Adjustments and Eliminations [Member] | ||||
Revenues | ||||
Total revenues | (79) | (80) | (238) | (249) |
Operating expenses | ||||
Compensation and benefits | 2 | 3 | 4 | 5 |
Fuel | 0 | 0 | 0 | 0 |
Materials | 3 | 1 | 11 | 13 |
Equipment Rents | 0 | 0 | 0 | 0 |
Depreciation and amortization | 0 | 0 | 0 | 0 |
Purchased services and other | (84) | (84) | (253) | (267) |
Total operating expenses | (79) | (80) | (238) | (249) |
Operating income | 0 | 0 | 0 | 0 |
Less: | ||||
Other (income) expense | 0 | 0 | 0 | 0 |
Other components of net periodic benefit recovery cost | 0 | 0 | 0 | 0 |
Net interest expense (income) | 0 | 0 | 0 | 0 |
Income before income tax expense | 0 | 0 | 0 | 0 |
Income tax expense (recovery) | 0 | 0 | 0 | 0 |
Equity in net earnings of subsidiaries | (815) | (641) | (1,967) | (1,798) |
Net income | (815) | (641) | (1,967) | (1,798) |
CPRL (Parent Guarantor) [Member] | Reportable Legal Entities [Member] | ||||
Revenues | ||||
Total revenues | 0 | 0 | 0 | 0 |
Operating expenses | ||||
Compensation and benefits | 0 | 0 | 0 | 0 |
Fuel | 0 | 0 | 0 | 0 |
Materials | 0 | 0 | 0 | 0 |
Equipment Rents | 0 | 0 | 0 | 0 |
Depreciation and amortization | 0 | 0 | 0 | 0 |
Purchased services and other | 0 | 0 | 0 | 0 |
Total operating expenses | 0 | 0 | 0 | 0 |
Operating income | 0 | 0 | 0 | 0 |
Less: | ||||
Other (income) expense | (4) | (10) | 7 | (35) |
Other components of net periodic benefit recovery cost | 0 | 0 | 0 | 0 |
Net interest expense (income) | (2) | (2) | 4 | (9) |
Income before income tax expense | 6 | 12 | (11) | 44 |
Income tax expense (recovery) | (1) | 7 | (2) | 9 |
Equity in net earnings of subsidiaries | 615 | 505 | 1,415 | 1,386 |
Net income | 622 | 510 | 1,406 | 1,421 |
CPRC (Subsidiary Issuer) [Member] | Reportable Legal Entities [Member] | ||||
Revenues | ||||
Total revenues | 1,347 | 1,130 | 3,756 | 3,414 |
Operating expenses | ||||
Compensation and benefits | 246 | 218 | 740 | 644 |
Fuel | 177 | 116 | 523 | 370 |
Materials | 33 | 33 | 106 | 101 |
Equipment Rents | 27 | 35 | 88 | 110 |
Depreciation and amortization | 105 | 108 | 314 | 325 |
Purchased services and other | 224 | 195 | 647 | 613 |
Total operating expenses | 812 | 705 | 2,418 | 2,163 |
Operating income | 535 | 425 | 1,338 | 1,251 |
Less: | ||||
Other (income) expense | (46) | (100) | 81 | (166) |
Other components of net periodic benefit recovery cost | (97) | (69) | (289) | (206) |
Net interest expense (income) | 121 | 126 | 356 | 390 |
Income before income tax expense | 557 | 468 | 1,190 | 1,233 |
Income tax expense (recovery) | 142 | 99 | 327 | 259 |
Equity in net earnings of subsidiaries | 200 | 136 | 552 | 412 |
Net income | 615 | 505 | 1,415 | 1,386 |
Non-Guarantor Subsidiaries [Member] | Reportable Legal Entities [Member] | ||||
Revenues | ||||
Total revenues | 630 | 545 | 1,792 | 1,676 |
Operating expenses | ||||
Compensation and benefits | 117 | 103 | 346 | 320 |
Fuel | 49 | 34 | 148 | 110 |
Materials | 11 | 11 | 38 | 28 |
Equipment Rents | 6 | 0 | 11 | (2) |
Depreciation and amortization | 69 | 54 | 202 | 168 |
Purchased services and other | 123 | 146 | 428 | 466 |
Total operating expenses | 375 | 348 | 1,173 | 1,090 |
Operating income | 255 | 197 | 619 | 586 |
Less: | ||||
Other (income) expense | 3 | 5 | (32) | 7 |
Other components of net periodic benefit recovery cost | 1 | 1 | 2 | 3 |
Net interest expense (income) | (7) | (9) | (21) | (24) |
Income before income tax expense | 258 | 200 | 670 | 600 |
Income tax expense (recovery) | 58 | 64 | 118 | 188 |
Equity in net earnings of subsidiaries | 0 | 0 | 0 | 0 |
Net income | 200 | 136 | 552 | 412 |
Cargo and Freight [Member] | ||||
Revenues | ||||
Total revenues | 1,854 | 1,547 | 5,188 | 4,708 |
Cargo and Freight [Member] | Consolidating Adjustments and Eliminations [Member] | ||||
Revenues | ||||
Total revenues | 0 | 0 | 0 | 0 |
Cargo and Freight [Member] | CPRL (Parent Guarantor) [Member] | Reportable Legal Entities [Member] | ||||
Revenues | ||||
Total revenues | 0 | 0 | 0 | 0 |
Cargo and Freight [Member] | CPRC (Subsidiary Issuer) [Member] | Reportable Legal Entities [Member] | ||||
Revenues | ||||
Total revenues | 1,316 | 1,092 | 3,667 | 3,310 |
Cargo and Freight [Member] | Non-Guarantor Subsidiaries [Member] | Reportable Legal Entities [Member] | ||||
Revenues | ||||
Total revenues | 538 | 455 | 1,521 | 1,398 |
Non-Freight [Member] | ||||
Revenues | ||||
Total revenues | 44 | 48 | 122 | 133 |
Non-Freight [Member] | Consolidating Adjustments and Eliminations [Member] | ||||
Revenues | ||||
Total revenues | (79) | (80) | (238) | (249) |
Non-Freight [Member] | CPRL (Parent Guarantor) [Member] | Reportable Legal Entities [Member] | ||||
Revenues | ||||
Total revenues | 0 | 0 | 0 | 0 |
Non-Freight [Member] | CPRC (Subsidiary Issuer) [Member] | Reportable Legal Entities [Member] | ||||
Revenues | ||||
Total revenues | 31 | 38 | 89 | 104 |
Non-Freight [Member] | Non-Guarantor Subsidiaries [Member] | Reportable Legal Entities [Member] | ||||
Revenues | ||||
Total revenues | $ 92 | $ 90 | $ 271 | $ 278 |
Condensed Consolidating Finan_4
Condensed Consolidating Financial Information - Interim Condensed Consolidating Statements of Comprehensive Income (Details) - CAD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | $ 622 | $ 510 | $ 1,406 | $ 1,421 |
Net gain (loss) in foreign currency translation adjustments, net of hedging activities | 12 | 19 | (24) | 38 |
Change in derivatives designated as cash flow hedges | 1 | 2 | 36 | 11 |
Change in pension and post-retirement defined benefit plans | 28 | 38 | 86 | 113 |
Other comprehensive income (loss) before income taxes | 41 | 59 | 98 | 162 |
Income tax recovery (expense) on above items | (22) | (34) | (11) | (78) |
Equity accounted investments | 0 | 0 | 0 | 0 |
Other comprehensive income (loss) | 19 | 25 | 87 | 84 |
Comprehensive income | 641 | 535 | 1,493 | 1,505 |
Consolidating Adjustments and Eliminations [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | (815) | (641) | (1,967) | (1,798) |
Net gain (loss) in foreign currency translation adjustments, net of hedging activities | 0 | 0 | 0 | 0 |
Change in derivatives designated as cash flow hedges | 0 | 0 | 0 | 0 |
Change in pension and post-retirement defined benefit plans | 0 | 0 | 0 | 0 |
Other comprehensive income (loss) before income taxes | 0 | 0 | 0 | 0 |
Income tax recovery (expense) on above items | 0 | 0 | 0 | 0 |
Equity accounted investments | 64 | 134 | (243) | 216 |
Other comprehensive income (loss) | 64 | 134 | (243) | 216 |
Comprehensive income | (751) | (507) | (2,210) | (1,582) |
CPRL (Parent Guarantor) [Member] | Reportable Legal Entities [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | 622 | 510 | 1,406 | 1,421 |
Net gain (loss) in foreign currency translation adjustments, net of hedging activities | 0 | 0 | 0 | 0 |
Change in derivatives designated as cash flow hedges | 0 | 0 | 0 | 0 |
Change in pension and post-retirement defined benefit plans | 0 | 0 | 0 | 0 |
Other comprehensive income (loss) before income taxes | 0 | 0 | 0 | 0 |
Income tax recovery (expense) on above items | 0 | 0 | 0 | 0 |
Equity accounted investments | 19 | 25 | 87 | 84 |
Other comprehensive income (loss) | 19 | 25 | 87 | 84 |
Comprehensive income | 641 | 535 | 1,493 | 1,505 |
CPRC (Subsidiary Issuer) [Member] | Reportable Legal Entities [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | 615 | 505 | 1,415 | 1,386 |
Net gain (loss) in foreign currency translation adjustments, net of hedging activities | 96 | 180 | (177) | 342 |
Change in derivatives designated as cash flow hedges | 1 | 2 | 36 | 11 |
Change in pension and post-retirement defined benefit plans | 27 | 36 | 82 | 108 |
Other comprehensive income (loss) before income taxes | 124 | 218 | (59) | 461 |
Income tax recovery (expense) on above items | (22) | (34) | (10) | (77) |
Equity accounted investments | (83) | (159) | 156 | (300) |
Other comprehensive income (loss) | 19 | 25 | 87 | 84 |
Comprehensive income | 634 | 530 | 1,502 | 1,470 |
Non-Guarantor Subsidiaries [Member] | Reportable Legal Entities [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | 200 | 136 | 552 | 412 |
Net gain (loss) in foreign currency translation adjustments, net of hedging activities | (84) | (161) | 153 | (304) |
Change in derivatives designated as cash flow hedges | 0 | 0 | 0 | 0 |
Change in pension and post-retirement defined benefit plans | 1 | 2 | 4 | 5 |
Other comprehensive income (loss) before income taxes | (83) | (159) | 157 | (299) |
Income tax recovery (expense) on above items | 0 | 0 | (1) | (1) |
Equity accounted investments | 0 | 0 | 0 | 0 |
Other comprehensive income (loss) | (83) | (159) | 156 | (300) |
Comprehensive income | $ 117 | $ (23) | $ 708 | $ 112 |
Condensed Consolidating Finan_5
Condensed Consolidating Financial Information - Interim Condensed Consolidating Balance Sheets (Details) - CAD ($) $ in Millions | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets | ||||||
Cash and cash equivalents | $ 150 | $ 338 | ||||
Accounts receivable, net | 759 | 687 | ||||
Accounts receivable, inter-company | 0 | 0 | ||||
Short-term advances to affiliates | 0 | 0 | ||||
Materials and supplies | 156 | 152 | ||||
Other current assets | 65 | 97 | ||||
Total current assets | 1,130 | 1,274 | ||||
Long-term advances to affiliates | 0 | 0 | ||||
Investments | 201 | 182 | ||||
Investments in subsidiaries | 0 | 0 | ||||
Properties | 17,792 | 17,016 | ||||
Goodwill and intangible assets | 192 | 187 | ||||
Pension asset | 1,726 | 1,407 | ||||
Other assets | 68 | 69 | ||||
Deferred income taxes | 0 | 0 | ||||
Total assets | 21,109 | 20,135 | ||||
Current liabilities | ||||||
Accounts payable and accrued liabilities | 1,189 | 1,238 | ||||
Accounts payable, inter-company | 0 | 0 | ||||
Short-term advances from affiliates | 0 | 0 | ||||
Long-term debt maturing within one year | 480 | 746 | ||||
Total current liabilities | 1,669 | 1,984 | ||||
Pension and other benefit liabilities | 746 | 749 | ||||
Long-term advances from affiliates | 0 | 0 | ||||
Other long-term liabilities | 232 | 231 | ||||
Long-term debt | 7,806 | 7,413 | ||||
Deferred income taxes | 3,528 | 3,321 | ||||
Total liabilities | 13,981 | 13,698 | ||||
Shareholders’ equity | ||||||
Share capital | 2,017 | 2,032 | ||||
Additional paid-in capital | 47 | 43 | ||||
Accumulated other comprehensive (loss) income | (1,654) | $ (1,673) | (1,741) | $ (1,715) | $ (1,740) | $ (1,799) |
Retained earnings | 6,718 | 6,103 | ||||
Total shareholders' equity | 7,128 | 6,437 | $ 5,565 | $ 4,626 | ||
Total liabilities and shareholders’ equity | 21,109 | 20,135 | ||||
Consolidating Adjustments and Eliminations [Member] | ||||||
Current assets | ||||||
Cash and cash equivalents | 0 | 0 | ||||
Accounts receivable, net | 0 | 0 | ||||
Accounts receivable, inter-company | (429) | (465) | ||||
Short-term advances to affiliates | (5,725) | (6,500) | ||||
Materials and supplies | 0 | 0 | ||||
Other current assets | (28) | 0 | ||||
Total current assets | (6,182) | (6,965) | ||||
Long-term advances to affiliates | (1,183) | (1,000) | ||||
Investments | 0 | 0 | ||||
Investments in subsidiaries | (23,094) | (22,745) | ||||
Properties | 0 | 0 | ||||
Goodwill and intangible assets | 0 | 0 | ||||
Pension asset | 0 | 0 | ||||
Other assets | 0 | 0 | ||||
Deferred income taxes | (6) | (3) | ||||
Total assets | (30,465) | (30,713) | ||||
Current liabilities | ||||||
Accounts payable and accrued liabilities | (28) | 0 | ||||
Accounts payable, inter-company | (429) | (465) | ||||
Short-term advances from affiliates | (5,725) | (6,500) | ||||
Long-term debt maturing within one year | 0 | 0 | ||||
Total current liabilities | (6,182) | (6,965) | ||||
Pension and other benefit liabilities | 0 | 0 | ||||
Long-term advances from affiliates | (1,183) | (1,000) | ||||
Other long-term liabilities | 0 | 0 | ||||
Long-term debt | 0 | 0 | ||||
Deferred income taxes | (6) | (3) | ||||
Total liabilities | (7,371) | (7,968) | ||||
Shareholders’ equity | ||||||
Share capital | (6,665) | (7,767) | ||||
Additional paid-in capital | (1,745) | (1,902) | ||||
Accumulated other comprehensive (loss) income | 1,083 | 1,325 | ||||
Retained earnings | (15,767) | (14,401) | ||||
Total shareholders' equity | (23,094) | (22,745) | ||||
Total liabilities and shareholders’ equity | (30,465) | (30,713) | ||||
CPRL (Parent Guarantor) [Member] | Reportable Legal Entities [Member] | ||||||
Current assets | ||||||
Cash and cash equivalents | 0 | 0 | ||||
Accounts receivable, net | 0 | 0 | ||||
Accounts receivable, inter-company | 119 | 97 | ||||
Short-term advances to affiliates | 0 | 500 | ||||
Materials and supplies | 0 | 0 | ||||
Other current assets | 0 | 0 | ||||
Total current assets | 119 | 597 | ||||
Long-term advances to affiliates | 1,090 | 590 | ||||
Investments | 0 | 0 | ||||
Investments in subsidiaries | 11,366 | 10,623 | ||||
Properties | 0 | 0 | ||||
Goodwill and intangible assets | 0 | 0 | ||||
Pension asset | 0 | 0 | ||||
Other assets | 0 | 0 | ||||
Deferred income taxes | 6 | 3 | ||||
Total assets | 12,581 | 11,813 | ||||
Current liabilities | ||||||
Accounts payable and accrued liabilities | 93 | 82 | ||||
Accounts payable, inter-company | 4 | 3 | ||||
Short-term advances from affiliates | 5,356 | 5,291 | ||||
Long-term debt maturing within one year | 0 | 0 | ||||
Total current liabilities | 5,453 | 5,376 | ||||
Pension and other benefit liabilities | 0 | 0 | ||||
Long-term advances from affiliates | 0 | 0 | ||||
Other long-term liabilities | 0 | 0 | ||||
Long-term debt | 0 | 0 | ||||
Deferred income taxes | 0 | 0 | ||||
Total liabilities | 5,453 | 5,376 | ||||
Shareholders’ equity | ||||||
Share capital | 2,017 | 2,032 | ||||
Additional paid-in capital | 47 | 43 | ||||
Accumulated other comprehensive (loss) income | (1,654) | (1,741) | ||||
Retained earnings | 6,718 | 6,103 | ||||
Total shareholders' equity | 7,128 | 6,437 | ||||
Total liabilities and shareholders’ equity | 12,581 | 11,813 | ||||
CPRC (Subsidiary Issuer) [Member] | Reportable Legal Entities [Member] | ||||||
Current assets | ||||||
Cash and cash equivalents | 103 | 241 | ||||
Accounts receivable, net | 592 | 508 | ||||
Accounts receivable, inter-company | 128 | 153 | ||||
Short-term advances to affiliates | 1,049 | 1,004 | ||||
Materials and supplies | 123 | 120 | ||||
Other current assets | 45 | 31 | ||||
Total current assets | 2,040 | 2,057 | ||||
Long-term advances to affiliates | 5 | 0 | ||||
Investments | 35 | 27 | ||||
Investments in subsidiaries | 11,728 | 12,122 | ||||
Properties | 9,395 | 8,982 | ||||
Goodwill and intangible assets | 0 | 0 | ||||
Pension asset | 1,726 | 1,407 | ||||
Other assets | 57 | 56 | ||||
Deferred income taxes | 0 | 0 | ||||
Total assets | 24,986 | 24,651 | ||||
Current liabilities | ||||||
Accounts payable and accrued liabilities | 822 | 844 | ||||
Accounts payable, inter-company | 297 | 309 | ||||
Short-term advances from affiliates | 366 | 1,185 | ||||
Long-term debt maturing within one year | 480 | 746 | ||||
Total current liabilities | 1,965 | 3,084 | ||||
Pension and other benefit liabilities | 668 | 672 | ||||
Long-term advances from affiliates | 1,178 | 1,000 | ||||
Other long-term liabilities | 114 | 108 | ||||
Long-term debt | 7,754 | 7,362 | ||||
Deferred income taxes | 1,941 | 1,802 | ||||
Total liabilities | 13,620 | 14,028 | ||||
Shareholders’ equity | ||||||
Share capital | 538 | 1,037 | ||||
Additional paid-in capital | 1,653 | 1,643 | ||||
Accumulated other comprehensive (loss) income | (1,654) | (1,742) | ||||
Retained earnings | 10,829 | 9,685 | ||||
Total shareholders' equity | 11,366 | 10,623 | ||||
Total liabilities and shareholders’ equity | 24,986 | 24,651 | ||||
Non-Guarantor Subsidiaries [Member] | Reportable Legal Entities [Member] | ||||||
Current assets | ||||||
Cash and cash equivalents | 47 | 97 | ||||
Accounts receivable, net | 167 | 179 | ||||
Accounts receivable, inter-company | 182 | 215 | ||||
Short-term advances to affiliates | 4,676 | 4,996 | ||||
Materials and supplies | 33 | 32 | ||||
Other current assets | 48 | 66 | ||||
Total current assets | 5,153 | 5,585 | ||||
Long-term advances to affiliates | 88 | 410 | ||||
Investments | 166 | 155 | ||||
Investments in subsidiaries | 0 | 0 | ||||
Properties | 8,397 | 8,034 | ||||
Goodwill and intangible assets | 192 | 187 | ||||
Pension asset | 0 | 0 | ||||
Other assets | 11 | 13 | ||||
Deferred income taxes | 0 | 0 | ||||
Total assets | 14,007 | 14,384 | ||||
Current liabilities | ||||||
Accounts payable and accrued liabilities | 302 | 312 | ||||
Accounts payable, inter-company | 128 | 153 | ||||
Short-term advances from affiliates | 3 | 24 | ||||
Long-term debt maturing within one year | 0 | 0 | ||||
Total current liabilities | 433 | 489 | ||||
Pension and other benefit liabilities | 78 | 77 | ||||
Long-term advances from affiliates | 5 | 0 | ||||
Other long-term liabilities | 118 | 123 | ||||
Long-term debt | 52 | 51 | ||||
Deferred income taxes | 1,593 | 1,522 | ||||
Total liabilities | 2,279 | 2,262 | ||||
Shareholders’ equity | ||||||
Share capital | 6,127 | 6,730 | ||||
Additional paid-in capital | 92 | 259 | ||||
Accumulated other comprehensive (loss) income | 571 | 417 | ||||
Retained earnings | 4,938 | 4,716 | ||||
Total shareholders' equity | 11,728 | 12,122 | ||||
Total liabilities and shareholders’ equity | $ 14,007 | $ 14,384 |
Condensed Consolidating Finan_6
Condensed Consolidating Financial Information - Interim Condensed Consolidating Statements of Cash Flows (Details) - CAD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Condensed Financial Statements, Captions [Line Items] | ||||
Cash provided by operating activities | $ 673 | $ 527 | $ 1,781 | $ 1,449 |
Investing activities | ||||
Additions to properties | (430) | (319) | (1,084) | (895) |
Proceeds from sale of properties and other assets | 7 | 13 | 16 | 29 |
Advances to affiliates | 0 | 0 | 0 | 0 |
Repayment of advances to affiliates | 0 | 0 | 0 | |
Capital contributions to affiliates | 0 | 0 | ||
Repurchase of share capital from affiliates | 0 | 0 | 0 | 0 |
Other investing activities | 0 | 0 | (1) | 5 |
Cash used in investing activities | (423) | (306) | (1,069) | (861) |
Financing activities | ||||
Dividends paid | (92) | (83) | (255) | (229) |
Issuance of share capital | 0 | 0 | ||
Return of share capital to affiliates | 0 | 0 | 0 | 0 |
Issuance of CP Common Shares | 4 | 2 | 16 | 39 |
Purchase of CP Common Shares | 0 | (226) | (559) | (368) |
Issuance of long-term debt, excluding commercial paper | 638 | |||
Repayment of long-term debt, excluding commercial paper | (5) | (3) | (744) | (17) |
Net repayment of commercial paper | (53) | 0 | 0 | 0 |
Advances from affiliates | 0 | 0 | 0 | 0 |
Repayments of advances from affiliates | 0 | 0 | 0 | |
Settlement of forward starting swaps on de-designation | 0 | 0 | 0 | (22) |
Cash (used in) provided by financing activities | (146) | (310) | (904) | (597) |
Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents | (5) | (7) | 4 | (13) |
Cash position | ||||
Increase (decrease) in cash and cash equivalents | 99 | (96) | (188) | (22) |
Cash and cash equivalents at beginning of period | 51 | 238 | 338 | 164 |
Cash and cash equivalents at end of period | 150 | 142 | 150 | 142 |
Consolidating Adjustments and Eliminations [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Cash provided by operating activities | (149) | (106) | (545) | (398) |
Investing activities | ||||
Additions to properties | 0 | 0 | 0 | 0 |
Proceeds from sale of properties and other assets | 0 | 0 | 0 | 0 |
Advances to affiliates | 209 | 50 | 272 | 2,786 |
Repayment of advances to affiliates | (844) | (160) | (840) | |
Capital contributions to affiliates | 26 | 1,039 | ||
Repurchase of share capital from affiliates | (736) | (32) | (1,283) | (32) |
Other investing activities | 0 | 0 | ||
Cash used in investing activities | (1,371) | (116) | (1,851) | 3,793 |
Financing activities | ||||
Dividends paid | 149 | 106 | 545 | 398 |
Issuance of share capital | (26) | (1,039) | ||
Return of share capital to affiliates | 736 | 32 | 1,283 | 32 |
Issuance of CP Common Shares | 0 | 0 | 0 | 0 |
Purchase of CP Common Shares | 0 | 0 | 0 | |
Issuance of long-term debt, excluding commercial paper | 0 | |||
Repayment of long-term debt, excluding commercial paper | 0 | 0 | 0 | 0 |
Net repayment of commercial paper | 0 | |||
Advances from affiliates | (209) | (50) | (272) | (2,786) |
Repayments of advances from affiliates | 844 | 160 | 840 | |
Settlement of forward starting swaps on de-designation | 0 | |||
Cash (used in) provided by financing activities | 1,520 | 222 | 2,396 | (3,395) |
Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents | 0 | 0 | 0 | 0 |
Cash position | ||||
Increase (decrease) in cash and cash equivalents | 0 | 0 | 0 | 0 |
Cash and cash equivalents at beginning of period | 0 | 0 | 0 | 0 |
Cash and cash equivalents at end of period | 0 | 0 | 0 | 0 |
CPRL (Parent Guarantor) [Member] | Reportable Legal Entities [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Cash provided by operating activities | 87 | 98 | 235 | 256 |
Investing activities | ||||
Additions to properties | 0 | 0 | 0 | 0 |
Proceeds from sale of properties and other assets | 0 | 0 | 0 | 0 |
Advances to affiliates | 0 | 0 | 0 | (1,079) |
Repayment of advances to affiliates | 0 | 159 | 0 | |
Capital contributions to affiliates | 0 | 0 | ||
Repurchase of share capital from affiliates | 500 | 0 | 500 | 0 |
Other investing activities | 0 | 0 | ||
Cash used in investing activities | 500 | 159 | 500 | (1,079) |
Financing activities | ||||
Dividends paid | (92) | (83) | (255) | (229) |
Issuance of share capital | 0 | 0 | ||
Return of share capital to affiliates | 0 | 0 | 0 | 0 |
Issuance of CP Common Shares | 4 | 2 | 16 | 39 |
Purchase of CP Common Shares | (226) | (559) | (368) | |
Issuance of long-term debt, excluding commercial paper | 0 | |||
Repayment of long-term debt, excluding commercial paper | 0 | 0 | 0 | 0 |
Net repayment of commercial paper | 0 | |||
Advances from affiliates | 209 | 50 | 272 | 1,381 |
Repayments of advances from affiliates | (708) | 0 | (209) | |
Settlement of forward starting swaps on de-designation | 0 | |||
Cash (used in) provided by financing activities | (587) | (257) | (735) | 823 |
Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents | 0 | 0 | 0 | 0 |
Cash position | ||||
Increase (decrease) in cash and cash equivalents | 0 | 0 | 0 | 0 |
Cash and cash equivalents at beginning of period | 0 | 0 | 0 | 0 |
Cash and cash equivalents at end of period | 0 | 0 | 0 | 0 |
CPRC (Subsidiary Issuer) [Member] | Reportable Legal Entities [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Cash provided by operating activities | 416 | 322 | 1,309 | 875 |
Investing activities | ||||
Additions to properties | (303) | (193) | (701) | (494) |
Proceeds from sale of properties and other assets | 4 | 11 | 10 | 17 |
Advances to affiliates | 0 | 0 | (63) | (550) |
Repayment of advances to affiliates | 499 | 1 | 0 | |
Capital contributions to affiliates | (26) | (1,039) | ||
Repurchase of share capital from affiliates | 236 | 32 | 783 | 32 |
Other investing activities | 0 | 6 | ||
Cash used in investing activities | 436 | (175) | 29 | (2,028) |
Financing activities | ||||
Dividends paid | (92) | (83) | (255) | (229) |
Issuance of share capital | 0 | 0 | ||
Return of share capital to affiliates | (500) | 0 | (500) | 0 |
Issuance of CP Common Shares | 0 | 0 | 0 | 0 |
Purchase of CP Common Shares | 0 | 0 | 0 | |
Issuance of long-term debt, excluding commercial paper | 638 | |||
Repayment of long-term debt, excluding commercial paper | (5) | (3) | (744) | (17) |
Net repayment of commercial paper | (53) | |||
Advances from affiliates | 0 | 0 | 0 | 1,405 |
Repayments of advances from affiliates | (136) | (159) | (631) | |
Settlement of forward starting swaps on de-designation | (22) | |||
Cash (used in) provided by financing activities | (786) | (245) | (1,492) | 1,137 |
Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents | 17 | (2) | 16 | (6) |
Cash position | ||||
Increase (decrease) in cash and cash equivalents | 83 | (100) | (138) | (22) |
Cash and cash equivalents at beginning of period | 20 | 178 | 241 | 100 |
Cash and cash equivalents at end of period | 103 | 78 | 103 | 78 |
Non-Guarantor Subsidiaries [Member] | Reportable Legal Entities [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Cash provided by operating activities | 319 | 213 | 782 | 716 |
Investing activities | ||||
Additions to properties | (127) | (126) | (383) | (401) |
Proceeds from sale of properties and other assets | 3 | 2 | 6 | 12 |
Advances to affiliates | (209) | (50) | (209) | (1,157) |
Repayment of advances to affiliates | 345 | 0 | 840 | |
Capital contributions to affiliates | 0 | 0 | ||
Repurchase of share capital from affiliates | 0 | 0 | 0 | 0 |
Other investing activities | (1) | (1) | ||
Cash used in investing activities | 12 | (174) | 253 | (1,547) |
Financing activities | ||||
Dividends paid | (57) | (23) | (290) | (169) |
Issuance of share capital | 26 | 1,039 | ||
Return of share capital to affiliates | (236) | (32) | (783) | (32) |
Issuance of CP Common Shares | 0 | 0 | 0 | 0 |
Purchase of CP Common Shares | 0 | 0 | 0 | |
Issuance of long-term debt, excluding commercial paper | 0 | |||
Repayment of long-term debt, excluding commercial paper | 0 | 0 | 0 | 0 |
Net repayment of commercial paper | 0 | |||
Advances from affiliates | 0 | 0 | 0 | 0 |
Repayments of advances from affiliates | 0 | (1) | 0 | |
Settlement of forward starting swaps on de-designation | 0 | |||
Cash (used in) provided by financing activities | (293) | (30) | (1,073) | 838 |
Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents | (22) | (5) | (12) | (7) |
Cash position | ||||
Increase (decrease) in cash and cash equivalents | 16 | 4 | (50) | 0 |
Cash and cash equivalents at beginning of period | 31 | 60 | 97 | 64 |
Cash and cash equivalents at end of period | $ 47 | $ 64 | $ 47 | $ 64 |