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CANADIAN PACIFIC KANSAS CITY LTD/CN Annual Report, Year Ended Dec 31, 2021

Filing Date
Filed February 23, 2022
Period End
December 31, 2021
Security
CP
In the record · 2016–202610-K2010-Q328-K361

CP filed 20 annual reports (10-K), 32 quarterly reports (10-Q) and 361 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Jun ’18Jun ’18
  2. Leadership change8-K · Mar ’21Mar ’21
  3. Leadership change8-K · Jul ’26Jul ’26

01—Abstract

Summary

Summary of the 10-K filed February 23, 2022. Cited figures are marked; the original filing is the authoritative source.

Canadian Pacific Kansas City Ltd. (CP) reported strong financial performance in 2021, with diluted earnings per share (EPS) increasing by 16% to $4.18a.

Total revenues grew 4% to $7,995 millionb, driven by higher freight rates, although volumes measured by revenue ton-miles (RTMs) saw a slight decrease. The company's operational efficiency improved, reflected in an operating ratio of 59.9%. A significant development was the successful closing of the acquisition of Kansas City Southern (KCS) on December 14, 2021, for approximately $36 billion (U.S. $28 billion).

While KCS is currently in a voting trust pending regulatory approval, this strategic move is expected to create the first direct rail network connecting Canada, the U.S., and Mexico, enhancing market reach and competitive service options. CP also highlighted its commitment to sustainability, including progress on its Hydrogen Locomotive Program and recognition on global sustainability indices.

02—Key points

Key Highlights

  1. Diluted EPS increased by 16% to $4.18 in 2021, up from $3.59 in 2020.
  2. Total revenues grew 4% year-over-year to $7,995 million, primarily due to higher freight rates.
  3. Completed the acquisition of Kansas City Southern (KCS) for approximately $36 billion, creating a significant transcontinental network.
  4. Maintained a strong operating ratio of 59.9%, demonstrating operational efficiency.
  5. Invested $1.53 billion in capital expenditures, focusing on track and roadway enhancements.
  6. Demonstrated commitment to sustainability with advancements in its Hydrogen Locomotive Program and inclusion in key sustainability rankings.
  7. Experienced a 1% decrease in revenue ton-miles (RTMs) due to lower volumes in specific commodities like Grain and Potash, partly impacted by severe weather events.

03—Questions

Frequently Asked Questions

  1. What was CP's financial performance in 2021?

    In 2021, CP reported a 16% increase in diluted EPS to $4.18 and a 4% increase in total revenues to $7,995 million, driven by higher freight rates. The company's operating ratio improved to 59.9%.

  2. What is the significance of the Kansas City Southern (KCS) acquisition?

    CP completed the acquisition of KCS for approximately $36 billion on December 14, 2021. This strategic transaction is set to create the first direct rail network connecting the U.S., Mexico, and Canada, offering expanded market reach and new competitive transportation services. KCS is currently held in a voting trust pending regulatory approval.

  3. How did operational performance fare in 2021?

    CP demonstrated strong operational efficiency with an operating ratio of 59.9%. Key performance indicators showed improvements in average train weight and length, reflecting better asset utilization. However, average train speed slightly decreased due to weather conditions and wildfire impacts.

  4. What are CP's key sustainability initiatives mentioned in the report?

    CP highlighted its progress on its Hydrogen Locomotive Program, aiming to develop North America's first hydrogen-powered line-haul freight locomotive. The company also noted its inclusion in the Corporate Knights Global 100 Index and the Dow Jones Sustainability North American Index, underscoring its commitment to environmental, social, and governance (ESG) factors.

04—Continue

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