Canadian Pacific Railway Limited (CP) Bundle
A Brief History of Canadian Pacific Railway Limited (CP)
Company Overview
Canadian Pacific Railway Limited, known as CP, is one of the largest railway networks in North America. Established in 1881, the company has grown to operate a vast network that spans Canada and parts of the United States, providing freight transportation services across various sectors.
Financial Performance as of 2024
As of September 30, 2024, Canadian Pacific Railway reported total revenues of $4,985 million for the nine months ended, compared to $6,577 million for the full year of 2023. The total operating expenses for the same period were $3,245 million, indicating an increase in operating costs compared to $4,074 million in 2023.
| Financial Metric | 2024 (Nine Months) | 2023 (Full Year) |
|---|---|---|
| Total Revenues | $4,985 million | $6,577 million |
| Total Operating Expenses | $3,245 million | $4,074 million |
| Operating Income | $1,740 million | $2,503 million |
| Net Income | $1,036 million | $1,480 million |
Key Events and Developments
In April 2023, CP completed its acquisition of Kansas City Southern (KCS), significantly expanding its operational footprint in North America. The acquisition was treated as a business combination, resulting in a remeasurement loss of $7,175 million.
Operational Metrics
For the nine months ended September 30, 2024, CP reported the following operational metrics:
- Freight Revenues: $2,109 million, a 33% increase from $1,584 million in the same period of 2023.
- Carloads: 432.5 thousand, up from 341.7 thousand.
- Revenue Ton-Miles: 28,911 million, an increase of 25% from 23,218 million.
| Operational Metric | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Freight Revenues | $2,109 million | $1,584 million |
| Carloads | 432.5 thousand | 341.7 thousand |
| Revenue Ton-Miles | 28,911 million | 23,218 million |
Cash Flow and Capital Expenditures
During the nine months ended September 30, 2024, CP generated $3,565 million in net cash from operating activities. The company invested $2,083 million in capital expenditures, reflecting ongoing investments in infrastructure and equipment.
Debt and Financing Activities
As of September 30, 2024, CP reported long-term debt of $18,710 million. During the same period, the company executed a commercial paper program with total borrowings of $378 million.
Shareholder Information
As of October 22, 2024, CP had 933,344,882 common shares outstanding with a market capitalization reflecting its position on both the Toronto Stock Exchange and the New York Stock Exchange.
Conclusion
In 2024, Canadian Pacific Railway continues to build on its legacy while navigating the complexities of the North American freight transportation market. The integration of KCS and ongoing operational improvements are expected to drive future growth.
A Who Owns Canadian Pacific Railway Limited (CP)
Shareholder Structure
As of October 22, 2024, Canadian Pacific Railway Limited (CP) had a total of 933,344,882 common shares issued and outstanding. These shares are owned by approximately 13,153 holders of record.
Major Institutional Shareholders
The following table presents the major institutional shareholders of Canadian Pacific Railway Limited:
| Institution | Shares Owned (millions) | Ownership Percentage (%) |
|---|---|---|
| The Vanguard Group, Inc. | 56.7 | 6.07 |
| BlackRock, Inc. | 52.1 | 5.58 |
| Canada Pension Plan Investment Board | 45.0 | 4.82 |
| State Street Corporation | 38.5 | 4.13 |
| Other Institutional Investors | 650.0 | 69.7 |
Executive Ownership
The executive team also holds a significant portion of shares. The following table details executive ownership:
| Executive | Position | Shares Owned (millions) |
|---|---|---|
| Keith Creel | President & CEO | 1.2 |
| Jason R. R. Rice | CFO | 0.5 |
| Other Executives | Various | 1.5 |
Recent Share Price Performance
As of September 30, 2024, the share price of Canadian Pacific Railway Limited was approximately $27.50. The stock has shown a year-to-date performance increase of 12%.
Market Capitalization
The market capitalization of Canadian Pacific Railway Limited as of October 22, 2024, was approximately $25.7 billion.
Dividend Information
For the year 2024, the company declared a dividend of $0.57 per share, reflecting a payout ratio of approximately 21% based on the earnings per share of $2.69 for the nine months ended September 30, 2024.
Ownership Changes
Since the acquisition of Kansas City Southern (KCS) on April 14, 2023, Canadian Pacific Railway Limited's ownership structure has been influenced by the integration of KCS, which added substantial assets and liabilities to the company.
Non-Controlling Interest
As of September 30, 2024, the non-controlling interest in Canadian Pacific Railway Limited was valued at $937 million.
Debt Structure
The total long-term debt of Canadian Pacific Railway Limited as of September 30, 2024, was approximately $18.5 billion, reflecting the company’s financing strategies post-acquisition of KCS.
Future Outlook
The company's strategic focus on operational efficiency and integration of KCS is expected to enhance shareholder value moving forward, with anticipated revenue growth from expanded service offerings and operational synergies.
Canadian Pacific Railway Limited (CP) Mission Statement
Mission Statement Overview
As of 2024, Canadian Pacific Railway Limited (CP) emphasizes its commitment to delivering safe and efficient transportation solutions while promoting sustainable practices. The company aims to enhance customer experience and operational excellence through innovation and a dedicated workforce.
Core Values
- Safety: Prioritizing safety in all operations to protect employees, customers, and communities.
- Integrity: Upholding the highest standards of ethics and accountability.
- Customer Focus: Committing to understanding and meeting customer needs.
- Innovation: Investing in technology and processes to improve service delivery.
- Sustainability: Focusing on environmentally responsible practices to minimize impact.
Financial Performance Highlights
In the first nine months of 2024, CP achieved significant financial growth:
| Metric | 2024 | 2023 | Change | % Change |
|---|---|---|---|---|
| Total Revenues (in millions) | $10,672 | $8,779 | $1,893 | 22% |
| Net Income (in millions) | $2,517 | $2,904 | ($387) | (13%) |
| Earnings per Share (basic) | $2.70 | $3.12 | ($0.42) | (13%) |
| Total Operating Expenses (in millions) | $3,245 | $4,074 | ($829) | (20%) |
Operational Metrics
CP's operational efficiency is illustrated by the following metrics for the nine months ended September 30, 2024:
| Metric | 2024 | 2023 | Change | % Change |
|---|---|---|---|---|
| Carloads (in thousands) | 3,250.1 | 2,878.5 | 371.6 | 13% |
| Revenue Ton-Miles (in millions) | 155,488 | 134,229 | 21,259 | 16% |
| Freight Revenue per Carload (in dollars) | $3,207 | $2,982 | $225 | 8% |
| Freight Revenue per Revenue Ton-Mile (in cents) | 6.70 | 6.40 | $0.30 | 5% |
Strategic Initiatives
CP continues to focus on several strategic initiatives to drive growth and efficiency:
- Acquisition of Kansas City Southern: Enhancing cross-border capabilities and expanding market reach.
- Technological Investments: Implementing advanced analytics and automation to improve operational efficiency.
- Sustainability Programs: Committing to reducing greenhouse gas emissions and increasing energy efficiency.
Future Outlook
Looking ahead, CP is focused on maintaining strong operational performance while adapting to market changes. The company aims to leverage its strategic assets and workforce to achieve sustainable growth and operational excellence.
How Canadian Pacific Railway Limited (CP) Works
Overview of Operations
Canadian Pacific Railway Limited (CP) operates as a transcontinental freight railway in Canada and the United States. The company covers key markets for various commodities, including grain, potash, coal, and intermodal services.
Financial Performance
For the nine months ended September 30, 2024, CP reported the following key financial figures:
| Metric | 2024 (in millions CAD) | 2023 (in millions CAD) | Change (in millions CAD) | % Change |
|---|---|---|---|---|
| Freight Revenues | 10,422 | 8,584 | 1,838 | 21 |
| Non-freight Revenues | 250 | 195 | 55 | 28 |
| Total Revenues | 10,672 | 8,779 | 1,893 | 22 |
| Carloads (in thousands) | 3,250.1 | 2,878.5 | 371.6 | 13 |
| Revenue Ton-Miles (in millions) | 155,488 | 134,229 | 21,259 | 16 |
| Freight Revenue per Carload (in dollars) | 3,207 | 2,982 | 225 | 8 |
| Freight Revenue per Revenue Ton-Mile (in cents) | 6.70 | 6.40 | 0.30 | 5 |
Freight Revenue Breakdown by Commodity
CP's freight revenues in the third quarter of 2024 were distributed across various commodities:
| Commodity | Freight Revenues (in millions CAD) | Carloads (in thousands) | Revenue Ton-Miles (in millions) | Freight Revenue per Carload (in dollars) | Freight Revenue per Revenue Ton-Mile (in cents) |
|---|---|---|---|---|---|
| Grain | 668 | 127.0 | 13,193 | 5,260 | 5.06 |
| Coal | 248 | 121.7 | 5,951 | 2,038 | 4.17 |
| Intermodal | 624 | 416.3 | 8,697 | 1,499 | 7.17 |
| Potash | 144 | 40.6 | 4,484 | 3,547 | 3.21 |
| Energy, Chemicals, and Plastics | 712 | 145.6 | 9,548 | 4,890 | 7.46 |
| Automotive | 956 | 185.5 | 3,694 | 5,154 | 25.88 |
| Fertilizers and Sulphur | 91 | 15.4 | 1,167 | 5,909 | 7.80 |
| Forest Products | 198 | 33.9 | 2,224 | 5,841 | 8.90 |
| Metals, Minerals, and Consumer Products | 443 | 127.9 | 4,865 | 3,464 | 9.11 |
Operating Expenses
Operating expenses for the nine months ended September 30, 2024, were detailed as follows:
| Expense Category | 2024 (in millions CAD) | 2023 (in millions CAD) | Change (in millions CAD) | % Change |
|---|---|---|---|---|
| Compensation and Benefits | 1,946 | 1,695 | 251 | 15 |
| Fuel | 1,343 | 1,153 | 190 | 16 |
| Materials | 290 | 260 | 30 | 12 |
| Equipment Rents | 253 | 201 | 52 | 26 |
| Depreciation and Amortization | 1,412 | 1,086 | 326 | 30 |
| Purchased Services and Other | 1,809 | 1,438 | 371 | 26 |
| Total Operating Expenses | 7,053 | 5,833 | 1,220 | 21 |
Net Interest Expense
Net interest expense for the third quarter and the nine months ended September 30, 2024, was as follows:
| Period | Net Interest Expense (in millions CAD) |
|---|---|
| Q3 2024 | 192 |
| Q3 2023 | 207 |
| First 9 months 2024 | 598 |
| First 9 months 2023 | 565 |
Liquidity and Capital Resources
As of September 30, 2024, CP reported the following liquidity metrics:
- Cash and Cash Equivalents: $463 million
- Commercial Paper Borrowings: $378 million
- Long-term Debt: $10.3 billion
Impact of KCS Acquisition
The acquisition of Kansas City Southern (KCS) has significantly affected CP's operations and financials. The impact includes:
- Increased freight volumes and revenue contributions from KCS.
- Higher net interest expenses related to KCS debt.
- Integration costs affecting operating expenses.
Conclusion on Operational Efficiency
CP continues to focus on operational efficiency, with a strategic emphasis on optimizing freight transportation and managing costs effectively.
How Canadian Pacific Railway Limited (CP) Makes Money
Revenue Sources
Canadian Pacific Railway Limited (CP) generates its revenue primarily through freight transportation, which constitutes a significant portion of its total revenues. In addition to freight, the company also earns non-freight revenues from leasing assets and other services.
Freight Revenue Breakdown
For the third quarter of 2024, CP reported freight revenues of $3,461 million, marking a 6% increase from $3,266 million in the same quarter of 2023. The non-freight revenue for the same period was $88 million, up from $73 million, reflecting a 21% increase.
| Category | Q3 2024 (in millions) | Q3 2023 (in millions) | Change (%) |
|---|---|---|---|
| Freight Revenues | $3,461 | $3,266 | 6% |
| Non-freight Revenues | $88 | $73 | 21% |
| Total Revenues | $3,549 | $3,339 | 6% |
Key Freight Segments
CP's freight revenues are divided into several key segments, each providing distinct contributions to the overall revenue. Below are the freight revenues by segment for the nine months ended September 30, 2024:
| Segment | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | Change (%) |
|---|---|---|---|
| Grain | $2,063 | $1,652 | 25% |
| Coal | $693 | $603 | 15% |
| Energy, Chemicals and Plastics | $2,109 | $1,584 | 33% |
| Metals, Minerals and Consumer Products | $1,347 | $1,128 | 19% |
| Automotive | $956 | $648 | 48% |
| Intermodal | $1,892 | $1,795 | 5% |
Revenue Ton-Miles (RTMs)
RTMs measure the weight and distance of freight moved. For the nine months ended September 30, 2024, CP reported a total of 155,488 million RTMs, representing a 16% increase from 134,229 million RTMs in the same period in 2023.
Freight Revenue per Revenue Ton-Mile
The freight revenue per RTM increased from 6.40 cents in 2023 to 6.70 cents in 2024, reflecting a 5% rise. This increase is attributed to higher freight rates and favorable foreign exchange impacts.
Operating Expenses
Operating expenses for CP for the third quarter of 2024 totaled $2,346 million, an increase of 8% from $2,166 million in the third quarter of 2023. The breakdown of operating expenses is as follows:
| Expense Category | Q3 2024 (in millions) | Q3 2023 (in millions) | Change (%) |
|---|---|---|---|
| Compensation and Benefits | $644 | $598 | 8% |
| Fuel | $419 | $430 | (3%) |
| Materials | $99 | $90 | 10% |
| Equipment Rents | $89 | $91 | (2%) |
| Depreciation and Amortization | $472 | $451 | 5% |
| Purchased Services and Other | $623 | $506 | 23% |
Financial Performance Summary
For the nine months ended September 30, 2024, CP's financial performance was as follows:
| Metric | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Total Revenues | $10,672 million | $8,779 million | 22% |
| Operating Income | $3,619 million | $2,946 million | 23% |
| Net Income | $2,517 million | $2,904 million | (13%) |
| Basic Earnings per Share (EPS) | $2.70 | $3.12 | (13%) |
| Diluted EPS | $2.69 | $3.11 | (13%) |
Fuel Cost Adjustment Program
CP employs a fuel cost adjustment program that allows it to adjust freight charges based on fuel price fluctuations. In the third quarter of 2024, fuel surcharge revenues were reported at $400 million, slightly down from $401 million in the previous year.
Foreign Exchange Impact
During the first nine months of 2024, fluctuations in foreign exchange rates had a significant impact on CP's revenues and expenses. A stronger U.S. dollar contributed to an increase in total revenues by approximately $68 million compared to the same period in 2023.
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Article updated on 8 Nov 2024
Resources:
- Canadian Pacific Railway Limited (CP) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Canadian Pacific Railway Limited (CP)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Canadian Pacific Railway Limited (CP)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.