Revenue and Business Segments - In 2024, the Company generated Freight revenues totaling 12,281 million in 2023[31]. - The Bulk business represented approximately 35% of total Freight revenues in 2024, with Grain accounting for 61% of bulk revenues and 21% of total Freight revenues[32]. - The Coal business contributed approximately 19% of bulk revenues and 7% of total Freight revenues in 2024[39]. - The Potash business represented approximately 12% of bulk revenues and 4% of total Freight revenues in 2024[41]. - The Merchandise business accounted for approximately 47% of total Freight revenues in 2024, with Energy, Chemicals and Plastics making up 42% of merchandise revenues[50]. - The Automotive business represented approximately 19% of merchandise revenues and 9% of total Freight revenues in 2024[59]. - The Intermodal business contributed approximately 18% of total Freight revenues in 2024, with domestic intermodal representing 55% of Intermodal revenues[61][65]. - Fuel surcharge revenues accounted for approximately 12% of the Company's Freight revenues in 2024, totaling 28 million or 2% from 2023[69][70]. Operational Developments - The Company opened the CPKC Dallas Automotive Facility in Wylie, Texas, enhancing its closed-loop rail service for automotive manufacturers[60]. - The Company is actively developing new offerings such as transload facilities and new train services to remain competitive in the logistics market[72]. - First-quarter revenues are typically lower due to winter weather conditions, with operating income also affected by seasonal fluctuations[73]. Environmental and Regulatory Compliance - The Company has a consolidated 2030 locomotive GHG emissions reduction target validated by the Science Based Targets Initiative (SBTi)[99]. - The Company established a Carbon Reduction Task Force in 2022 to evaluate and implement climate action measures to reduce GHG emissions[100]. - The Company developed North America's first line-haul hydrogen-powered freight locomotive, with two in service and two in testing as of 2024[101]. - CPKCM holds a concession from the Mexican government until June 2047, with an annual concession duty of 1.25% of gross revenues[83]. - The Company is subject to extensive federal, provincial, state, and local environmental laws and regulations, which could materially affect its financial condition[85]. - The Company has implemented an Environmental Management System to reduce environmental risk and ensure compliance with applicable laws[86]. - The Company is required to maintain operational standards for its rail lines and return assets in specified condition at the end of the concession period[84]. - The Company’s U.S. operations are subject to safety regulations enforced by the Federal Railroad Administration and the Pipeline and Hazardous Materials Safety Administration[79]. - The Company’s rail operations in Canada are subject to economic regulation by the Canadian Transportation Agency, which indirectly regulates rates[75]. Workforce and Labor Relations - As of December 31, 2024, the total number of employees was 19,797, a decrease of 130 from 19,927 in 2023[104]. - The total workforce, including contractors and consultants, was 19,924, down 114 from 20,038 in 2023[104]. - The FRA-reportable personal injury incidents rate per 200,000 employee-hours decreased by 18% to 0.95 in 2024, compared to 1.16 in 2023[113]. - The FRA-reportable train accident rate per million train-miles decreased by 5% to 1.01 in 2024, down from 1.06 in 2023[113]. - Unionized employees represent nearly 73% of the workforce, with 74 active bargaining units[106]. - In Canada, there are eight bargaining units representing approximately 7,100 unionized active employees, with three agreements open for renewal[107]. - In the U.S., there are 65 active bargaining units representing about 4,200 unionized active employees, with 62 agreements recently opened for renewal[108]. - Approximately 3,200 employees in Mexico are covered by a single labor agreement, with terms subject to annual renegotiation[109]. - The Company has been recognized as one of Alberta's Top 85 Employers for six consecutive years, highlighting its commitment to attracting and retaining talent[118]. - The Company emphasizes diversity, with 33.3% of its Board of Directors being women and 58.3% identifying as members of designated groups[125]. - The Company faces human capital risks due to the availability of qualified personnel, particularly locomotive engineers, which could adversely affect operations and financial condition[138]. - Strikes or work stoppages related to collective bargaining agreements with labor unions could disrupt operations and negatively impact financial results[139]. Financial Condition and Risks - The company has $22,623 million in indebtedness as of December 31, 2024, which may reduce liquidity and limit flexibility in responding to business opportunities[179]. - The company's operations in Mexico are subject to significant economic and political risks, including potential adverse effects from currency fluctuations, inflation, and changes in government policies[157]. - The company is exposed to climate-related risks, including severe weather events that could disrupt operations and lead to substantial costs for infrastructure modifications[165]. - The company has established a GHG emissions reduction target, which may be impacted by various risks and uncertainties, including changes in carbon markets and regulatory environments[168]. - Fluctuations in the peso-dollar exchange rate could adversely affect the company's financial statements and tax obligations, potentially increasing cash tax obligations[163]. - The company has invested significantly in developing intermodal operations, which depend on the volume of Asian shipments routed through the Port of Lázaro Cárdenas[161]. - Changes in global economic conditions and international trade policies could negatively affect demand for commodities transported by the company, impacting financial results[176]. - The company faces liquidity risks due to potential instability in capital markets, which could restrict access to financing and increase costs[178]. - The company is subject to risks related to public health crises, such as pandemics, which can create economic disruption and volatility[177]. - The company’s ability to meet debt service obligations may be adversely affected by downturns in the U.S. or Mexican economies[161]. Financial Performance - Total revenues for 2024 reached CAD 14,546 million, a 15.8% increase from CAD 12,555 million in 2023[380]. - Operating income for 2024 was CAD 5,179 million, up 18.0% from CAD 4,388 million in 2023[380]. - Net income for 2024 was CAD 3,713 million, a decrease of 5.4% compared to CAD 3,923 million in 2023[381]. - The projected benefit obligation of the Company's defined benefit pension plan was CAD 10,166 million as of December 31, 2024[375]. - The fair value of the Company's fixed rate debt would increase by approximately CAD 1.7 billion with a hypothetical one percentage point decrease in interest rates[367]. - The Company reported net interest expense of CAD 801 million for 2024, compared to CAD 771 million in 2023[380]. - Comprehensive income for 2024 was CAD 7,093 million, significantly higher than CAD 3,205 million in 2023[381]. - The Company may need to raise substantial additional financing to fund working capital and capital expenditures[184]. - The Company’s ability to comply with debt covenants is subject to various risks and uncertainties[183]. - A hypothetical one percentage point change in interest rates on the Company's floating rate debt obligations is not material as of December 31, 2024[366]. - Total assets increased to CAD 87,744 million in 2024, up from CAD 79,902 million in 2023, representing a growth of 9.2%[382]. - Net income for 2024 was CAD 3,713 million, a decrease of 5.4% from CAD 3,923 million in 2023[385]. - Cash and cash equivalents rose to CAD 739 million in 2024, compared to CAD 464 million in 2023, marking a 59% increase[385]. - Total liabilities increased to CAD 38,854 million in 2024, up from CAD 37,491 million in 2023, reflecting a growth of 3.6%[382]. - Shareholders' equity reached CAD 48,890 million in 2024, an increase of 15.5% from CAD 42,411 million in 2023[382]. - The company reported net cash provided by operating activities of CAD 5,269 million in 2024, up from CAD 4,137 million in 2023, indicating a 27.4% increase[385]. - The company paid CAD 709 million in dividends in 2024, consistent with the previous year[386]. - Additions to properties amounted to CAD 2,825 million in 2024, compared to CAD 2,468 million in 2023, representing a 14.5% increase[385]. - The company recognized other comprehensive income of CAD 3,298 million in 2024, a significant increase from a loss of CAD 709 million in 2023[386]. - The company’s long-term debt stood at CAD 19,804 million in 2024, slightly up from CAD 19,351 million in 2023, reflecting a 2.3% increase[382]. Accounting and Financial Reporting - The Company uses the expected value method to estimate variable consideration, including volume rebates, which are recognized as a reduction of freight revenues[397]. - Performance obligations are generally expected to be satisfied in the following reporting period if not fully satisfied at the end of the current reporting period[398]. - The Company follows the asset and liability method for income taxes, with deferred income tax assets and liabilities determined based on enacted tax rates[399]. - A valuation allowance is recorded to reduce deferred income tax assets if it is more likely than not that they will not be realized[400]. - The Company recognizes tax benefits from uncertain tax positions only if there is a greater than 50% likelihood of being sustained upon examination[401]. - Basic earnings per share is calculated using the weighted-average number of Common Shares outstanding during the year[403]. - Equity-method investments are initially recognized at cost and adjusted for the Company's share of income or losses[404]. - Business acquisitions involve estimates and assumptions to determine the fair values of acquired assets and liabilities, which may be adjusted during the measurement period[407].
CPKC(CP) - 2024 Q4 - Annual Report