Summary
Canadian Pacific Kansas City Ltd. (CP) reported strong financial performance in 2021, with diluted earnings per share (EPS) increasing by 16% to $4.18. Total revenues grew 4% to $7,995 million, 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.
Key Highlights
- 1Diluted EPS increased by 16% to $4.18 in 2021, up from $3.59 in 2020.
- 2Total revenues grew 4% year-over-year to $7,995 million, primarily due to higher freight rates.
- 3Completed the acquisition of Kansas City Southern (KCS) for approximately $36 billion, creating a significant transcontinental network.
- 4Maintained a strong operating ratio of 59.9%, demonstrating operational efficiency.
- 5Invested $1.53 billion in capital expenditures, focusing on track and roadway enhancements.
- 6Demonstrated commitment to sustainability with advancements in its Hydrogen Locomotive Program and inclusion in key sustainability rankings.
- 7Experienced 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.