# EDGAR Filing Document

**Accession Number:** 0000016875
**File Stem:** 0000016875-23-000004
**Filing Date:** 2023-1
**Character Count:** 93175
**Document Hash:** cb05d41b03d056b1a3a89b0c20a25aec
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000016875-23-000004.hdr.sgml**: 20230131

**ACCESSION NUMBER**: 0000016875-23-000004

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 16

**CONFORMED PERIOD OF REPORT**: 20230131

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230131

**DATE AS OF CHANGE**: 20230131

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** CANADIAN PACIFIC RAILWAY LTD/CN
- **CENTRAL INDEX KEY:** 0000016875
- **STANDARD INDUSTRIAL CLASSIFICATION:** RAILROADS, LINE-HAUL OPERATING [4011]
- **IRS NUMBER:** 980355078
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-01342
- **FILM NUMBER:** 23572775

**BUSINESS ADDRESS:**
- **STREET 1:** 7550 OGDEN DALE ROAD S.E.
- **CITY:** CALGARY ALBERTA
- **STATE:** A0
- **ZIP:** T2C 4X9
- **BUSINESS PHONE:** 403-319-3591

**MAIL ADDRESS:**
- **STREET 1:** 7550 OGDEN DALE ROAD S.E.
- **CITY:** CALGARY ALBERTA
- **STATE:** A0
- **ZIP:** T2C 4X9

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** CANADIAN PACIFIC LTD
- **DATE OF NAME CHANGE:** 19930507

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** CANADIAN PACIFIC RAILWAY CO
- **DATE OF NAME CHANGE:** 19710818

?xml version="1.0" ? cp-20230131

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 8-K** 

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934**

**January 31, 2023**

Date of Report (Date of earliest event reported)

**Canadian Pacific Railway Limited** 

(Exact name of registrant as specified in its charter)

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Canada** | **001-01342** | **001-01342** | **001-01342** | **98-0355078** |
| (State or other jurisdiction<br>of incorporation) | (Commission<br>File Number) | (Commission<br>File Number) | (Commission<br>File Number) | (IRS Employer<br>Identification No.) |
| | **7550 Ogden Dale Road S.E.** | **7550 Ogden Dale Road S.E.** | | |
| | **Calgary** | **AB** | **T2C 4X9** | |
| | (Address of Principal Executive Offices) | (Address of Principal Executive Offices) | (Zip Code) | |

---

Registrant's telephone number, including area code **(403) 319-7000** 

**Not Applicable**

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐&nbsp;&nbsp;&nbsp;&nbsp;Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐&nbsp;&nbsp;&nbsp;&nbsp;Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐&nbsp;&nbsp;&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐&nbsp;&nbsp;&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

**Securities registered pursuant to Section 12(b) of the Act:**

---

| | | |
|:---|:---|:---|
| **Title of Each Class** | **Trading Symbol(s)** | **Name of Each Exchange on which Registered** |
| **Common Shares, without par value, of <br>Canadian Pacific Railway Limited** | **CP** | **New York Stock Exchange** |
| **Common Shares, without par value, of <br>Canadian Pacific Railway Limited** | **CP** | **Toronto Stock Exchange** |
| **Perpetual 4% Consolidated Debenture Stock of Canadian Pacific Railway Company** | **CP/40** | **New York Stock Exchange** |
| **Perpetual 4% Consolidated Debenture Stock of Canadian Pacific Railway Company** | **BC87** | **London Stock Exchange** |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

------

**ITEM 2.02**&nbsp;&nbsp;&nbsp;&nbsp;**Results of Operations and Financial Condition.**

The following information is furnished pursuant to Item 2.02, "Results of Operations and Financial Condition."

On January 31, 2023, Canadian Pacific Railway Limited ("CP") issued a press release setting forth its financial results for its three months and year ended December 31, 2022. A copy of CP's press release is attached hereto as Exhibit 99.1. CP does not intend for this Item 2.02 or Exhibit 99.1 to be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or to be incorporated by reference into filings under the Securities Act of 1933, as amended.

**ITEM 9.01**&nbsp;&nbsp;&nbsp;&nbsp;**Financial Statements and Exhibits.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(d) Exhibits** 

---

| | |
|:---|:---|
| **Exhibit No.** | **Exhibit Description** |
| <u>[Exhibit 99.1](exhibit991-q42022earningsr.htm)</u> | <u>[Press release issued January 31, 2023 by Canadian Pacific Railway Limited and furnished pursuant to Item 2.02, "Results of Operations and Financial Condition."](exhibit991-q42022earningsr.htm)</u> |
| Exhibit 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

------

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | | |
|:---|:---|:---|:---|
| Dated: January 31, 2023 |  |  |  |
|  | CANADIAN PACIFIC RAILWAY LIMITED | CANADIAN PACIFIC RAILWAY LIMITED | CANADIAN PACIFIC RAILWAY LIMITED |
|  | By: | /s/ Nizam Hasham | /s/ Nizam Hasham |
|  |  | Name: | Nizam Hasham |
|  |  | Title: | Assistant Corporate Secretary |

---

## Exhibit 99.1

![beavera30a.jpg](beavera30a.jpg)

Release: &nbsp;&nbsp;&nbsp;&nbsp;Jan. 31, 2023

**CP reports fourth-quarter results; ready to unite a continent in 2023**

Calgary - Canadian Pacific Railway Limited (TSX: CP) (NYSE: CP) today announced its fourth-quarter results, including revenues of $2.46 billion, operating ratio ("OR") of 59.8 percent, adjusted OR<sup>1</sup> of 59.1 percent, diluted earnings per share ("EPS") of $1.36 and core adjusted diluted EPS<sup>1</sup> of $1.14.

**Fourth quarter 2022 highlights**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Revenues increased 21 percent to $2.46 billion, from $2.04 billion in Q4 2021

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Volumes, as measured in revenue ton-miles, increased 8 percent

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Reported OR increased by 60 basis points to 59.8 percent from 59.2 percent

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Adjusted OR<sup>1</sup>, increased 160 basis points to 59.1 percent

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Reported diluted EPS increased to $1.36, from $0.74 in Q4 2021

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Core adjusted diluted EPS<sup>1</sup> increased to $1.14, from $0.96 in Q4 2021

"We finished the year with the people, capacity and resources in place to meet the needs of our customers today and are well-positioned to make history in 2023," said Keith Creel, CP President and CEO. "In a year of changing conditions and challenges, in order to support the broader economy and prepare for our proposed combination, we executed one of the largest hiring plans and capital investment programs in our company's history."

**Full-year 2022 highlights**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Federal Railroad Administration ("FRA")-reportable train accident frequency declined 15 percent to 0.93 from 1.10 in 2021

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Revenues increased 10 percent to $8.81 billion from $8.0 billion in 2021

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Generated $2.7 billion in free cash<sup>1</sup>, an increase of 52 percent

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• OR increased 230 basis points to 62.2 percent

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Adjusted OR<sup>1</sup> increased 380 basis points to 61.4 percent

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Reported diluted EPS decreased to $3.77 from $4.18

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Core adjusted diluted EPS<sup>1</sup> was flat compared to 2021 at $3.77

"We remain focused on our precision scheduled railroading model and fundamentals of efficiency and strong service to our customers as we await a decision by the U.S. Surface Transportation Board on our proposed combination with Kansas City Southern, which we anticipate occurring later this quarter," said Creel.

CP again led the industry in safety, achieving the lowest FRA-reportable train accident frequency among Class 1 railroads for the 17<sup>th</sup> consecutive year.

**Conference Call Details**

CP will discuss its results with the financial community in a conference call beginning at 4:30 p.m. ET (2:30 p.m. MT) on Jan. 31, 2023.

<sup>1</sup> These measures have no standardized meanings prescribed by accounting principles generally accepted in the United States of America ("GAAP") and, therefore, may not be comparable to similar measures presented by other companies. For information regarding non-GAAP measures, including reconciliations to the most comparable GAAP measures, see the attached supplementary schedule Non-GAAP Measures.

------

**Conference Call Access**

Canada and U.S.: 866-831-8713

International: 203-518-9822

\*Conference ID: CPQ422

*Callers should dial in 10 minutes prior to the call.* 

**Webcast**

We encourage you to access the webcast and presentation material in the Investors section of CP's website at <u>investor.cpr.ca</u>.

A replay of the fourth-quarter conference call will be available by phone through to Feb. 7, 2023, at 800-723-7372 (Canada/U.S.) or 402-220-2666 (International).

**Note on forward-looking information**

This news release may contain certain forward-looking information and forward-looking statements (collectively, "forward-looking information") within the meaning of applicable securities laws. Forward-looking information includes, but is not limited to, statements concerning expectations, beliefs, plans, goals, objectives, assumptions and statements about possible future events, conditions, and results of operations or performance. Forward-looking information may contain statements with words or headings such as "financial expectations", "key assumptions", "anticipate", "believe", "expect", "plan", "will", "outlook", "should" or similar words suggesting future outcomes. This news release contains forward-looking information relating, but not limited to statements concerning, the success of our business, changes to economic and industry conditions, the status of the CP-Kansas City Southern ("KCS") transaction, including related regulatory approvals, and the opportunities arising there from, our operations, priorities and plans, anticipated financial and operational performance, business prospects and demand for our services and growth opportunities.

The forward-looking information that may be in this news release is based on current expectations, estimates, projections and assumptions, having regard to CP's experience and its perception of historical trends, and includes, but is not limited to, expectations, estimates, projections and assumptions relating to: changes in business strategies, North American and global economic growth and conditions; commodity demand growth; sustainable industrial and agricultural production; commodity prices and interest rates; performance of our assets and equipment; sufficiency of our budgeted capital expenditures in carrying out our business plan; geopolitical conditions, applicable laws, regulations and government policies; the availability and cost of labour, services and infrastructure; the satisfaction by third parties of their obligations to CP; carbon markets, evolving sustainability strategies, and scientific or technological developments; and the impacts of the COVID-19 pandemic on CP businesses, operating results, cash flows and/or financial condition. Although CP believes the expectations, estimates, projections and assumptions reflected in the forward-looking information presented herein are reasonable as of the date hereof, there can be no assurance that they will prove to be correct. Current conditions, economic and otherwise, render assumptions, although reasonable when made, subject to greater uncertainty.

Undue reliance should not be placed on forward-looking information as actual results may differ materially from those expressed or implied by forward-looking information. By its nature, CP's forward-looking information involves inherent risks and uncertainties that could cause actual results to differ materially from the forward looking information, including, but not limited to, the following factors: changes in business strategies and strategic opportunities; general Canadian, U.S., Mexican and global social, economic, political, credit and business conditions; risks associated with agricultural production such as weather conditions and insect populations; the availability and price of energy commodities; the effects of competition and pricing pressures, including competition from other rail carriers, trucking companies and maritime shippers in Canada, the U.S. and Mexico; North American and global economic growth and conditions; industry capacity; shifts in market demand; changes in commodity prices and commodity demand; uncertainty surrounding timing and volumes of commodities being shipped via CP; inflation; geopolitical instability; changes in laws, regulations and government policies, including regulation of rates; changes in taxes and tax rates; potential increases in maintenance and operating costs; changes in fuel prices; disruption in fuel supplies; uncertainties of investigations, proceedings or other types of claims and litigation; compliance with environmental regulations; labour disputes; changes in labour costs and labour difficulties; risks and liabilities arising from derailments; transportation of dangerous goods; timing of completion of capital and maintenance projects; sufficiency of budgeted capital expenditures in carrying out business plans; services and infrastructure; the satisfaction by third parties of their obligations; currency and interest rate fluctuations; exchange

------

Any forward-looking information contained in this news release is made as of the date hereof. Except as required by law, CP undertakes no obligation to update publicly or otherwise revise any forward-looking information, or the foregoing assumptions and risks affecting such forward-looking information, whether as a result of new information, future events or otherwise.

**About Canadian Pacific**

Canadian Pacific is a transcontinental railway in Canada and the United States with direct links to major ports on the west and east coasts. CP provides North American customers a competitive rail service with access to key markets in every corner of the globe. CP is growing with its customers, offering a suite of freight transportation services, logistics solutions and supply chain expertise. Visit cpr.ca to see the rail advantages of CP. CP-IR

**Contacts:**

**Media**

<u>Alert_MediaRelations@cpr.ca</u> 

**Investment Community**

Maeghan Albiston

403-319-3591

<u>investor@cpr.ca</u> 

------

**FINANCIAL INFORMATION**

**INTERIM CONSOLIDATED STATEMENTS OF INCOME**

**(unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the three months ended December 31** | **For the three months ended December 31** | **For the year ended December 31** | **For the year ended December 31** |
| (in millions of Canadian dollars, except share and per share data) | **2022** | 2021 | **2022** | 2021 |
| **Revenues** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Freight | $**2413** | $1994 | $**8627** | $7816 |
| &nbsp;&nbsp;&nbsp;Non-freight | **49** | 46 | **187** | 179 |
| **Total revenues** | **2462** | 2040 | **8814** | 7995 |
| **Operating expenses** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Compensation and benefits | **416** | 405 | **1570** | 1570 |
| &nbsp;&nbsp;&nbsp;Fuel | **399** | 231 | **1400** | 854 |
| &nbsp;&nbsp;&nbsp;Materials | **69** | 51 | **260** | 215 |
| &nbsp;&nbsp;&nbsp;Equipment rents | **43** | 29 | **140** | 121 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | **219** | 206 | **853** | 811 |
| &nbsp;&nbsp;Purchased services and other (Note 4) | **327** | 286 | **1262** | 1218 |
| **Total operating expenses** | **1473** | 1208 | **5485** | 4789 |
| **Operating income** | **989** | 832 | **3329** | 3206 |
| Less: |  |  |  |  |
| &nbsp;&nbsp;Equity (earnings) loss of Kansas City Southern (Note 4)  | **(447)** | 141 | **(1074)** | 141 |
| &nbsp;&nbsp;&nbsp;Other expense (income) (Note 2) | **4** | (16) | **17** | 237 |
| &nbsp;&nbsp;&nbsp;Merger termination fee | **—** |  | **—** | (845) |
| &nbsp;&nbsp;&nbsp;Other components of net periodic benefit recovery | **(107)** | (101) | **(411)** | (387) |
| &nbsp;&nbsp;&nbsp;Net interest expense | **166** | 125 | **652** | 440 |
| **Income before income tax expense** | **1373** | 683 | **4145** | 3620 |
| &nbsp;&nbsp;Income tax expense (Note 3) | **102** | 151 | **628** | 768 |
| **Net income** | $**1271** | $532 | $**3517** | $2852 |
| **Earnings per share** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic earnings per share | $**1.37** | $0.74 | $**3.78** | $4.20 |
| &nbsp;&nbsp;&nbsp;Diluted earnings per share | $**1.36** | $0.74 | $**3.77** | $4.18 |
| **Weighted-average number of shares (millions)** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic | **930.3** | 718.4 | **930.0** | 679.7 |
| &nbsp;&nbsp;&nbsp;Diluted | **933.2** | 721.3 | **932.9** | 682.8 |
| **Dividends declared per share** | $**0.190** | $0.190 | $**0.760** | $0.760 |

---

See Notes to Interim Consolidated Financial Information.

------

**INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME**

**(unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the three months ended December 31** | **For the three months ended December 31** | **For the year ended December 31** | **For the year ended December 31** |
| (in millions of Canadian dollars) | **2022** | 2021 | **2022** | 2021 |
| Net income | $**1271** | $532 | $**3517** | $2852 |
| &nbsp;&nbsp;&nbsp;Net (loss) gain in foreign currency translation adjustments, net of hedging activities | **(320)** | (294) | **1628** | (291) |
| &nbsp;&nbsp;&nbsp;Change in derivatives designated as cash flow hedges | **1** | (21) | **6** | 48 |
| &nbsp;&nbsp;Change in pension and post-retirement defined benefit plans | **581** | 1128 | **680** | 1286 |
| &nbsp;&nbsp;&nbsp;Equity accounted investments | **(187)** | 9 | **(5)** | 9 |
| Other comprehensive income before income taxes | **75** | 822 | **2309** | 1052 |
| Income tax expense on above items | **(117)** | (282) | **(115)** | (341) |
| Other comprehensive (loss) income | **(42)** | 540 | **2194** | 711 |
| **Comprehensive income** | $**1229** | $1072 | $**5711** | $3563 |

---

See Notes to Interim Consolidated Financial Information.

------

**INTERIM CONSOLIDATED BALANCE SHEETS AS AT**

**(unaudited)**

---

| | | |
|:---|:---|:---|
| | **December 31** | December 31 |
| (in millions of Canadian dollars) | **2022** | 2021 |
| **Assets** |  |  |
| **Current assets** |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $**451** | $69 |
| &nbsp;&nbsp;&nbsp;Restricted cash and cash equivalents | **—** | 13 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | **1016** | 819 |
| &nbsp;&nbsp;&nbsp;Materials and supplies | **284** | 235 |
| &nbsp;&nbsp;&nbsp;Other current assets | **138** | 216 |
|  | **1889** | 1352 |
| Investment in Kansas City Southern (Note 4)  | **45091** | 42309 |
| Investments  | **223** | 209 |
| Properties | **22385** | 21200 |
| Goodwill and intangible assets | **386** | 371 |
| Pension asset | **3101** | 2317 |
| Other assets | **420** | 419 |
| **Total assets** | $**73495** | $68177 |
| **Liabilities and shareholders' equity** |  |  |
| **Current liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities | $**1703** | $1609 |
| &nbsp;&nbsp;&nbsp;Long-term debt maturing within one year | **1510** | 1550 |
|  | **3213** | 3159 |
| Pension and other benefit liabilities | **538** | 718 |
| Other long-term liabilities | **520** | 542 |
| Long-term debt | **18141** | 18577 |
| Deferred income taxes (Note 3) | **12197** | 11352 |
| **Total liabilities** | **34609** | 34348 |
| **Shareholders' equity** |  |  |
| &nbsp;&nbsp;&nbsp;Share capital | **25516** | 25475 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | **78** | 66 |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive income (loss) | **91** | (2103) |
| &nbsp;&nbsp;&nbsp;Retained earnings | **13201** | 10391 |
|  | **38886** | 33829 |
| **Total liabilities and shareholders' equity** | $**73495** | $68177 |

---

See Notes to Interim Consolidated Financial Information.

------

**INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the three months ended December 31** | **For the three months ended December 31** | **For the year ended December 31** | **For the year ended December 31** |
| (in millions of Canadian dollars) | **2022** | 2021 | **2022** | 2021 |
| **Operating activities** |  |  |  |  |
| Net income | $**1271** | $532 | $**3517** | $2852 |
| Reconciliation of net income to cash provided by operating activities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | **219** | 206 | **853** | 811 |
| &nbsp;&nbsp;&nbsp;Deferred income tax (recovery) expense | **(15)** | 52 | **136** | 242 |
| &nbsp;&nbsp;&nbsp;Pension recovery and funding | **(70)** | (61) | **(288)** | (249) |
| &nbsp;&nbsp;Equity (earnings) loss of Kansas City Southern (Note 4)  | **(447)** | 141 | **(1074)** | 141 |
| &nbsp;&nbsp;&nbsp;Foreign exchange (gain) loss on debt and lease liabilities (Note 2) | **—** | 32 | **—** | (7) |
| Dividends from Kansas City Southern (Note 4)  | **564** |  | **1157** |  |
| Other operating activities, net | **35** | 14 | **(67)** | (36) |
| Change in non-cash working capital balances related to operations | **163** | (312) | **(92)** | (66) |
| **Cash provided by operating activities** | **1720** | 604 | **4142** | 3688 |
| **Investing activities** |  |  |  |  |
| Additions to properties | **(539)** | (421) | **(1557)** | (1532) |
| Investment in Kansas City Southern | **—** | (10526) | **—** | (12299) |
| Proceeds from sale of properties and other assets | **21** | 31 | **58** | 96 |
| Other | **—** | 6 | **3** | 5 |
| **Cash used in investing activities** | **(518)** | (10910) | **(1496)** | (13730) |
| **Financing activities** |  |  |  |  |
| Dividends paid | **(176)** | (127) | **(707)** | (507) |
| Issuance of CP Common Shares | **13** | 5 | **32** | 25 |
| Issuance of long-term debt, excluding commercial paper | **—** | 10673 | **—** | 10673 |
| Repayment of long-term debt, excluding commercial paper | **(12)** | (10) | **(571)** | (359) |
| Proceeds from term loan | **—** |  |  | 633 |
| Repayment of term loan | **—** |  | **(636)** |  |
| Net repayment of commercial paper | **(713)** | (388) | **(415)** | (454) |
| Acquisition-related financing fees | **—** | (6) | **—** | (51) |
| Other | **—** | (17) | **—** | (24) |
| **Cash (used in) provided by financing activities** | **(888)** | 10130 | **(2297)** | 9936 |
| **Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents** | **(1)** | 35 | **20** | 41 |
| **Cash position** |  |  |  |  |
| Increase (decrease) in cash, cash equivalents and restricted cash | **313** | (141) | **369** | (65) |
| Cash, cash equivalents and restricted cash at beginning of period | **138** | 223 | **82** | 147 |
| **Cash, cash equivalents and restricted cash at end of period** | $**451** | $82 | $**451** | $82 |
| **Supplemental disclosures of cash flow information:** |  |  |  |  |
| Income taxes paid | $**89** | $151 | $**408** | $552 |
| Interest paid | $**174** | $61 | $**641** | $426 |

---

See Notes to Interim Consolidated Financial Information.

------

**INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY** 

**(unaudited)**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **For the three months ended December 31** | **For the three months ended December 31** | **For the three months ended December 31** | **For the three months ended December 31** | **For the three months ended December 31** | **For the three months ended December 31** |
|<br>(in millions of Canadian dollars except per share data) | **Common shares (in millions)** | **Share<br>capital** | **Additional<br>paid-in<br>capital** | **Accumulated<br>other<br>comprehensive<br>income (loss)** | **Retained<br>earnings** | **Total<br>shareholders'<br>equity** |
| **Balance as at October 1, 2022** | **930.1** | $**25498** | $**77** | $**133** | $**12106** | $**37814** |
| &nbsp;&nbsp;&nbsp;Net income | **—** | **—** | **—** | **—** | **1271** | **1271** |
| &nbsp;&nbsp;&nbsp;Other comprehensive loss | **—** | **—** | **—** | **(42)** | **—** | **(42)** |
| &nbsp;&nbsp;&nbsp;Dividends declared ($0.190 per share) | **—** | **—** | **—** | **—** | **(176)** | **(176)** |
| &nbsp;&nbsp;&nbsp;Effect of stock-based compensation expense | **—** | **—** | **6** | **—** | **—** | **6** |
| &nbsp;&nbsp;&nbsp;Shares issued under stock option plan | **0.4** | **18** | **(5)** | **—** | **—** | **13** |
| **Balance as at December 31, 2022** | **930.5** | $**25516** | $**78** | $**91** | $**13201** | $**38886** |
| Balance as at October 1, 2021 | 666.9 | $2008 | $68 | $(2643) | $10035 | $9468 |
| &nbsp;&nbsp;&nbsp;Net income |  |  |  |  | 532 | 532 |
| &nbsp;&nbsp;&nbsp;Other comprehensive income |  |  |  | 540 |  | 540 |
| &nbsp;&nbsp;&nbsp;Dividends declared ($0.190 per share) |  |  |  |  | (176) | (176) |
| &nbsp;&nbsp;&nbsp;Effect of stock-based compensation expense |  |  | 5 |  |  | 5 |
| &nbsp;&nbsp;&nbsp;Shares issued for Kansas City Southern acquisition | 262.6 | 23461 | (5) |  |  | 23456 |
| &nbsp;&nbsp;&nbsp;Shares issued under stock option plan | 0.2 | 6 | (2) |  |  | 4 |
| Balance as at December 31, 2021 | 929.7 | $25475 | $66 | $(2103) | $10391 | $33829 |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** |
|<br>(in millions of Canadian dollars except per share data) | **Common shares (in millions)** | **Share<br>capital** | **Additional<br>paid-in<br>capital** | **Accumulated<br>other<br>comprehensive<br>(loss) income** | **Retained<br>earnings** | **Total<br>shareholders'<br>equity** |
| **Balance at January 1, 2022** | **929.7** | $**25475** | $**66** | $**(2103)** | $**10391** | $**33829** |
| &nbsp;&nbsp;&nbsp;Net income | **—** | **—** | **—** | **—** | **3517** | **3517** |
| &nbsp;&nbsp;&nbsp;Other comprehensive income | **—** | **—** | **—** | **2194** | **—** | **2194** |
| &nbsp;&nbsp;&nbsp;Dividends declared ($0.760 per share) | **—** | **—** | **—** | **—** | **(707)** | **(707)** |
| &nbsp;&nbsp;&nbsp;Effect of stock-based compensation expense | **—** | **—** | **23** | **—** | **—** | **23** |
| &nbsp;&nbsp;&nbsp;Shares issued for Kansas City Southern acquisition | **—** | **—** | **(2)** | **—** | **—** | **(2)** |
| &nbsp;&nbsp;&nbsp;Shares issued under stock option plan | **0.8** | **41** | **(9)** | **—** | **—** | **32** |
| **Balance as at December 31, 2022** | **930.5** | $**25516** | $**78** | $**91** | $**13201** | $**38886** |
| Balance at January 1, 2021 | 666.3 | $1983 | $55 | $(2814) | $8095 | $7319 |
| &nbsp;&nbsp;&nbsp;Net income |  |  |  |  | 2852 | 2852 |
| &nbsp;&nbsp;&nbsp;Other comprehensive income |  |  |  | 711 |  | 711 |
| &nbsp;&nbsp;&nbsp;Dividends declared ($0.760 per share) |  |  |  |  | (556) | (556) |
| &nbsp;&nbsp;&nbsp;Effect of stock-based compensation expense |  |  | 23 |  |  | 23 |
| &nbsp;&nbsp;&nbsp;Shares issued for Kansas City Southern acquisition | 262.6 | 23461 | (5) |  |  | 23456 |
| &nbsp;&nbsp;&nbsp;Shares issued under stock option plan | 0.8 | 31 | (7) |  |  | 24 |
| Balance as at December 31, 2021 | 929.7 | $25475 | $66 | $(2103) | $10391 | $33829 |

---

See Notes to Interim Consolidated Financial Information.

------

**NOTES TO INTERIM CONSOLIDATED FINANCIAL INFORMATION**

**December 31, 2022** 

**(unaudited)**

**1&nbsp;&nbsp;&nbsp;&nbsp;Basis of presentation** 

This unaudited interim consolidated financial information of Canadian Pacific Railway Limited ("CPRL") and its subsidiaries (collectively, "CP", or "the Company"), expressed in Canadian dollars, reflects management's estimates and assumptions that are necessary for its fair presentation in conformity with generally accepted accounting principles in the United States of America ("GAAP"). It does not include all disclosures required under GAAP for annual financial statements and interim financial statements, and should be read in conjunction with the 2021 annual consolidated financial statements and notes included in CP's 2021 Annual Report on Form 10-K and 2022 interim consolidated financial statements. The accounting policies used are consistent with the accounting policies used in preparing the 2021 annual consolidated financial statements.

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.

In management's opinion, the unaudited interim consolidated financial information includes all adjustments (consisting of normal and recurring adjustments) necessary to present fairly such information. Interim results are not necessarily indicative of the results expected for the fiscal year.

**2&nbsp;&nbsp;&nbsp;&nbsp;Other expense (income)** 

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the three months ended December 31** | **For the three months ended December 31** | **For the year ended December 31** | **For the year ended December 31** |
| (in millions of Canadian dollars) | **2022** | 2021 | **2022** | 2021 |
| Foreign exchange loss (gain) on debt and lease liabilities | $**—** | $32 | $**—** | $(7) |
| Other foreign exchange (gains) losses | **(1)** | 5 | **—** | (4) |
| Acquisition-related (recoveries) costs (Note 4) | **—** | (48) | **—** | 247 |
| Other | **5** | (5) | **17** | 1 |
| Other expense (income) | $**4** | $(16) | $**17** | $237 |

---

**3&nbsp;&nbsp;&nbsp;&nbsp;Income taxes** 

During the fourth quarter and for the year ended December 31, 2022, the Company recorded a deferred tax recovery of $24 million to reverse an uncertain tax position as this amount is no longer expected to be realized.

During the fourth quarter and for the year ended December 31, 2022, the Company recorded a deferred tax recovery of $27 million and $19 million, respectively, on the outside basis difference of the change in the equity investment in KCS.

During the fourth quarter and for the year ended December 31, 2021, the Company recorded a deferred tax recovery of $33 million on the outside basis difference of the change in the equity investment in KCS from initial recognition on December 14, 2021.

**4&nbsp;&nbsp;&nbsp;&nbsp;Business acquisition**

On December 14, 2021, the Company purchased 100% of the issued and outstanding shares of KCS. From December 14, 2021, the date of purchase, all purchased shares of KCS are held in an independent voting trust (the "Trust") pending the approval from the U.S. Surface Transportation Board ("STB") of the Company's application for control of KCS.

The Company accounts for its investment in KCS using the equity method of accounting while the STB considers the Company's application to control KCS. The STB review of CP's proposed control of KCS while KCS is in the voting trust is expected to be completed in the first quarter of 2023. The investment in KCS of $45,091 million as at December 31, 2022, includes $1,074 million of equity earnings of KCS and foreign currency translation of $2,891 million, offset by dividends of $1,157 million received in the year ended December 31, 2022. Included within the $447 million and $1,074 million of equity earnings of KCS recognized for the three months and year ended December 31, 2022 was amortization (net of tax) of basis differences of $42 million and $163 million, respectively. These basis differences relate to depreciable property, plant and equipment, intangible assets with definite lives, and long-term debt, and are amortized over the related assets' remaining useful lives, and the remaining terms to maturity of the debt instruments.

During the fourth quarter and for the year ended December 31, 2022, the Company incurred $17 million and $74 million, in acquisition-related costs, respectively, recorded within "Purchased services and other" in the Company's Interim Consolidated

------

Statements of Income. Acquisition-related costs of $10 million and $49 million incurred by KCS during the fourth quarter and for the year ended December 31, 2022 are included within "Equity (earnings) loss of Kansas City Southern" in the Company's Interim Consolidated Statements of Income. Equity earnings of KCS recognized for the three months and year ended December 31, 2022 also included KCS's gain on unwinding of interest rate hedges of $212 million, which is net of CP's associated purchase accounting basis differences and tax.

During the fourth quarter and for the year ended December 31, 2021, the Company incurred $157 million and $599 million, respectively, in acquisition-related costs associated with the KCS acquisition, of which costs of $36 million and $183 million were recorded within "Purchased services and other", and recoveries of $48 million and costs of $247 million were recorded within "Other expense (income)" in each period, respectively. Acquisition-related costs, net of tax, of $169 million, incurred by KCS during the 18 days from the date the transaction closed into the voting trust, were included within "Equity loss of Kansas City Southern" in the Company's Interim Consolidated Statements of Income.

------

![cpclassicbeavera14a.jpg](cpclassicbeavera14a.jpg)

**<u>Summary of Rail Data</u>**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Fourth Quarter** | **Fourth Quarter** | **Fourth Quarter** | **Fourth Quarter** | **Year** | **Year** | **Year** | **Year** |
| **<u>Financial (millions, except per share data)</u>** | **2022** | **2021** | **Total Change** | **% Change** | **2022** | **2021** | **Total Change** | **% Change** |
| <u>Revenues</u> |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Freight | $**2413** | $1994 | $419 | **21** | $**8627** | $7816 | $811 | **10** |
| &nbsp;&nbsp;&nbsp;Non-freight | **49** | 46 | 3 | **7** | **187** | 179 | 8 | **4** |
| Total revenues | **2462** | 2040 | 422 | **21** | **8814** | 7995 | 819 | **10** |
| <u>Operating expenses</u> |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Compensation and benefits | **416** | 405 | 11 | **3** | **1570** | 1570 |  | **—** |
| &nbsp;&nbsp;&nbsp;Fuel | **399** | 231 | 168 | **73** | **1400** | 854 | 546 | **64** |
| &nbsp;&nbsp;&nbsp;Materials | **69** | 51 | 18 | **35** | **260** | 215 | 45 | **21** |
| &nbsp;&nbsp;&nbsp;Equipment rents | **43** | 29 | 14 | **48** | **140** | 121 | 19 | **16** |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | **219** | 206 | 13 | **6** | **853** | 811 | 42 | **5** |
| &nbsp;&nbsp;&nbsp;Purchased services and other | **327** | 286 | 41 | **14** | **1262** | 1218 | 44 | **4** |
| Total operating expenses | **1473** | 1208 | 265 | **22** | **5485** | 4789 | 696 | **15** |
| Operating income | **989** | 832 | 157 | **19** | **3329** | 3206 | 123 | **4** |
| Less: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Equity (earnings) loss of Kansas City Southern | **(447)** | 141 | (588) | **(417)** | **(1074)** | 141 | (1215) | **(862)** |
| &nbsp;&nbsp;&nbsp;Other expense (income) | **4** | (16) | 20 | **(125)** | **17** | 237 | (220) | **(93)** |
| &nbsp;&nbsp;&nbsp;Merger termination fee | **—** |  |  | **—** | **—** | (845) | 845 | **(100)** |
| &nbsp;&nbsp;&nbsp;Other components of net periodic benefit recovery | **(107)** | (101) | (6) | **6** | **(411)** | (387) | (24) | **6** |
| &nbsp;&nbsp;&nbsp;Net interest expense | **166** | 125 | 41 | **33** | **652** | 440 | 212 | **48** |
| Income before income tax expense | **1373** | 683 | 690 | **101** | **4145** | 3620 | 525 | **15** |
| &nbsp;&nbsp;&nbsp;Income tax expense | **102** | 151 | (49) | **(32)** | **628** | 768 | (140) | **(18)** |
| Net income | $**1271** | $532 | $739 | **139** | $**3517** | $2852 | $665 | **23** |
| Operating ratio (%) | **59.8** | 59.2 | 0.6 | **60 bps** | **62.2** | 59.9 | 2.3 | **230 bps** |
| &nbsp;&nbsp;&nbsp;Basic earnings per share | $**1.37** | $0.74 | $0.63 | **85** | $**3.78** | $4.20 | $(0.42) | **(10)** |
| &nbsp;&nbsp;&nbsp;Diluted earnings per share | $**1.36** | $0.74 | $0.62 | **84** | $**3.77** | $4.18 | $(0.41) | **(10)** |
| **<u>Shares Outstanding</u>** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Weighted average number of basic shares outstanding (millions) | **930.3** | 718.4 | 211.9 | **29** | **930.0** | 679.7 | 250.3 | **37** |
| &nbsp;&nbsp;&nbsp;Weighted average number of diluted shares outstanding (millions) | **933.2** | 721.3 | 211.9 | **29** | **932.9** | 682.8 | 250.1 | **37** |
| **<u>Foreign Exchange</u>** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Average foreign exchange rate (U.S.$/Canadian$) | **0.74** | 0.79 | (0.05) | **(6)** | **0.77** | 0.80 | (0.03) | **(4)** |
| &nbsp;&nbsp;&nbsp;Average foreign exchange rate (Canadian$/U.S.$) | **1.36** | 1.26 | 0.10 | **8** | **1.30** | 1.25 | 0.05 | **4** |

---

------

![cpclassicbeavera14a.jpg](cpclassicbeavera14a.jpg)

**<u>Summary of Rail Data (Continued)</u>**

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Fourth Quarter** | **Fourth Quarter** | **Fourth Quarter** | **Fourth Quarter** | **Fourth Quarter** | **Year** | **Year** | **Year** | **Year** | **Year** |
| **<u>Commodity Data</u>** | **2022** | **2021** | **Total Change** | **% Change** | **FX Adjusted % Change**<sup>(1)</sup> | **2022** | **2021** | **Total Change** | **% Change** | **FX Adjusted % Change**<sup>(1)</sup> |
| **Freight Revenues (millions)** |  |  |  |  |  |  |  |  |  |  |
| - Grain | $**655** | $440 | $215 | **49** | 42 | $**1776** | $1684 | $92 | **5** | 3 |
| - Coal | **119** | 134 | (15) | **(11)** | (13) | **577** | 625 | (48) | **(8)** | (8) |
| - Potash | **136** | 115 | 21 | **18** | 13 | **581** | 463 | 118 | **25** | 23 |
| - Fertilizers and sulphur | **88** | 78 | 10 | **13** | 6 | **332** | 305 | 27 | **9** | 6 |
| - Forest products | **104** | 89 | 15 | **17** | 9 | **403** | 348 | 55 | **16** | 12 |
| - Energy, chemicals and plastics | **384** | 414 | (30) | **(7)** | (11) | **1394** | 1563 | (169) | **(11)** | (13) |
| - Metals, minerals and consumer products | **229** | 193 | 36 | **19** | 12 | **884** | 728 | 156 | **21** | 18 |
| - Automotive | **116** | 87 | 29 | **33** | 27 | **438** | 376 | 62 | **16** | 14 |
| - Intermodal | **582** | 444 | 138 | **31** | 29 | **2242** | 1724 | 518 | **30** | 29 |
| Total Freight Revenues | $**2413** | $1994 | $419 | **21** | 16 | $**8627** | $7816 | $811 | **10** | 8 |
| **Freight Revenue per Revenue Ton-Mile (RTM) (cents)** |  |  |  |  |  |  |  |  |  |  |
| - Grain | **5.46** | 4.66 | 0.80 | **17** | 12 | **5.03** | 4.43 | 0.60 | **14** | 11 |
| - Coal | **4.06** | 3.44 | 0.62 | **18** | 16 | **3.85** | 3.41 | 0.44 | **13** | 13 |
| - Potash | **3.51** | 2.90 | 0.61 | **21** | 16 | **3.20** | 2.78 | 0.42 | **15** | 13 |
| - Fertilizers and sulphur | **7.41** | 6.66 | 0.75 | **11** | 5 | **6.96** | 6.30 | 0.66 | **10** | 7 |
| - Forest products | **7.56** | 6.23 | 1.33 | **21** | 14 | **7.02** | 6.09 | 0.93 | **15** | 11 |
| - Energy, chemicals and plastics | **6.00** | 6.74 | (0.74) | **(11)** | (15) | **5.66** | 6.14 | (0.48) | **(8)** | (10) |
| - Metals, minerals and consumer products | **8.01** | 6.79 | 1.22 | **18** | 11 | **7.55** | 6.52 | 1.03 | **16** | 13 |
| - Automotive | **27.10** | 22.48 | 4.62 | **21** | 15 | **25.23** | 21.30 | 3.93 | **18** | 16 |
| - Intermodal | **7.44** | 6.63 | 0.81 | **12** | 10 | **7.19** | 6.22 | 0.97 | **16** | 15 |
| Total Freight Revenue per RTM | **6.21** | 5.54 | 0.67 | **12** | 8 | **5.82** | 5.22 | 0.60 | **11** | 9 |
| **Freight Revenue per Carload** |  |  |  |  |  |  |  |  |  |  |
| - Grain | $**5170** | $4297 | $873 | **20** | 15 | $**4648** | $3951 | $697 | **18** | 15 |
| - Coal | **2102** | 1991 | 111 | **6** | 4 | **2139** | 2144 | (5) | **—** | (1) |
| - Potash | **3897** | 3186 | 711 | **22** | 17 | **3631** | 3068 | 563 | **18** | 16 |
| - Fertilizers and sulphur | **5867** | 4875 | 992 | **20** | 13 | **5372** | 4736 | 636 | **13** | 10 |
| - Forest products | **5843** | 4811 | 1032 | **21** | 14 | **5513** | 4728 | 785 | **17** | 13 |
| - Energy, chemicals and plastics | **5039** | 5267 | (228) | **(4)** | (8) | **4687** | 4883 | (196) | **(4)** | (6) |
| - Metals, minerals and consumer products | **3748** | 3244 | 504 | **16** | 9 | **3560** | 3076 | 484 | **16** | 12 |
| - Automotive | **4394** | 3655 | 739 | **20** | 15 | **4195** | 3443 | 752 | **22** | 19 |
| - Intermodal | **1946** | 1752 | 194 | **11** | 9 | **1892** | 1622 | 270 | **17** | 16 |
| Total Freight Revenue per Carload | $**3381** | $3041 | $340 | **11** | 7 | $**3101** | $2857 | $244 | **9** | 7 |

---

<sup>(1)</sup> This earnings measure has no standardized meaning prescribed by GAAP and, therefore, is unlikely to be comparable to similar measures presented by other companies. This measure is defined and reconciled in Non-GAAP Measures of this Earnings Release.

------

![cpclassicbeavera14a.jpg](cpclassicbeavera14a.jpg)

**<u>Summary of Rail Data (Continued)</u>**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Fourth Quarter** | **Fourth Quarter** | **Fourth Quarter** | **Fourth Quarter** | **Year** | **Year** | **Year** | **Year** |
| **<u>Commodity Data (Continued)</u>** | **2022** | **2021** | **Total Change** | **% Change** | **2022** | **2021** | **Total Change** | **% Change** |
| **Millions of RTM** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;- Grain | **11990** | 9435 | 2555 | **27** | **35325** | 37999 | (2674) | **(7)** |
| &nbsp;&nbsp;&nbsp;- Coal | **2933** | 3894 | (961) | **(25)** | **14970** | 18345 | (3375) | **(18)** |
| &nbsp;&nbsp;&nbsp;- Potash | **3879** | 3966 | (87) | **(2)** | **18176** | 16671 | 1505 | **9** |
| &nbsp;&nbsp;&nbsp;- Fertilizers and sulphur | **1187** | 1172 | 15 | **1** | **4772** | 4845 | (73) | **(2)** |
| &nbsp;&nbsp;&nbsp;- Forest products | **1375** | 1428 | (53) | **(4)** | **5741** | 5718 | 23 | **—** |
| &nbsp;&nbsp;&nbsp;- Energy, chemicals and plastics | **6404** | 6141 | 263 | **4** | **24625** | 25469 | (844) | **(3)** |
| &nbsp;&nbsp;&nbsp;- Metals, minerals and consumer products | **2858** | 2842 | 16 | **1** | **11710** | 11170 | 540 | **5** |
| &nbsp;&nbsp;&nbsp;- Automotive | **428** | 387 | 41 | **11** | **1736** | 1765 | (29) | **(2)** |
| &nbsp;&nbsp;&nbsp;- Intermodal | **7819** | 6696 | 1123 | **17** | **31173** | 27704 | 3469 | **13** |
| Total RTMs | **38873** | 35961 | 2912 | **8** | **148228** | 149686 | (1458) | **(1)** |
| **Carloads (thousands)** |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;- Grain | **126.7** | 102.4 | 24.3 | **24** | **382.1** | 426.2 | (44.1) | **(10)** |
| &nbsp;&nbsp;&nbsp;- Coal | **56.6** | 67.3 | (10.7) | **(16)** | **269.8** | 291.5 | (21.7) | **(7)** |
| &nbsp;&nbsp;&nbsp;- Potash | **34.9** | 36.1 | (1.2) | **(3)** | **160.0** | 150.9 | 9.1 | **6** |
| &nbsp;&nbsp;&nbsp;- Fertilizers and sulphur | **15.0** | 16.0 | (1.0) | **(6)** | **61.8** | 64.4 | (2.6) | **(4)** |
| &nbsp;&nbsp;&nbsp;- Forest products | **17.8** | 18.5 | (0.7) | **(4)** | **73.1** | 73.6 | (0.5) | **(1)** |
| &nbsp;&nbsp;&nbsp;- Energy, chemicals and plastics | **76.2** | 78.6 | (2.4) | **(3)** | **297.4** | 320.1 | (22.7) | **(7)** |
| &nbsp;&nbsp;&nbsp;- Metals, minerals and consumer products | **61.1** | 59.5 | 1.6 | **3** | **248.3** | 236.7 | 11.6 | **5** |
| &nbsp;&nbsp;&nbsp;- Automotive | **26.4** | 23.8 | 2.6 | **11** | **104.4** | 109.2 | (4.8) | **(4)** |
| &nbsp;&nbsp;&nbsp;- Intermodal | **299.0** | 253.4 | 45.6 | **18** | **1185.2** | 1062.9 | 122.3 | **12** |
| Total Carloads | **713.7** | 655.6 | 58.1 | **9** | **2782.1** | 2735.5 | 46.6 | **2** |

---

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Fourth Quarter** | **Fourth Quarter** | **Fourth Quarter** | **Fourth Quarter** | **Fourth Quarter** | **Year** | **Year** | **Year** | **Year** | **Year** |
| | **2022** | **2021** | **Total Change** | **% Change** | **FX Adjusted % Change**<sup>(1)</sup> | **2022** | **2021** | **Total Change** | **% Change** | **FX Adjusted % Change**<sup>(1)</sup> |
| **Operating Expenses (millions)** |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Compensation and benefits | $**416** | $405 | $11 | **3** |  | $**1570** | $1570 | $— | **—** | (1) |
| &nbsp;&nbsp;&nbsp;Fuel | **399** | 231 | 168 | **73** | 62 | **1400** | 854 | 546 | **64** | 59 |
| &nbsp;&nbsp;&nbsp;Materials | **69** | 51 | 18 | **35** | 33 | **260** | 215 | 45 | **21** | 20 |
| &nbsp;&nbsp;&nbsp;Equipment rents | **43** | 29 | 14 | **48** | 43 | **140** | 121 | 19 | **16** | 13 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | **219** | 206 | 13 | **6** | 4 | **853** | 811 | 42 | **5** | 4 |
| &nbsp;&nbsp;&nbsp;Purchased services and other | **327** | 286 | 41 | **14** | 12 | **1262** | 1218 | 44 | **4** | 3 |
| Total Operating Expenses | $**1473** | $1208 | $265 | **22** | 18 | $**5485** | $4789 | $696 | **15** | 13 |

---

<sup>(1)</sup> This earnings measure has no standardized meaning prescribed by GAAP and, therefore, is unlikely to be comparable to similar measures presented by other companies. This measure is defined and reconciled in Non-GAAP Measures of this Earnings Release.

------

![cpclassicbeavera14a.jpg](cpclassicbeavera14a.jpg)

**<u>Summary of Rail Data (Continued)</u>**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Fourth Quarter** | **Fourth Quarter** | **Fourth Quarter** | **Fourth Quarter** | **Year** | **Year** | **Year** | **Year** |
| | **2022** | **2021** | **Total Change** | **% Change** | **2022** | **2021** | **Total Change** | **% Change** |
| **<u>Operations Performance</u>** |  |  |  |  |  |  |  |  |
| Gross ton-miles ("GTMs") (millions) | **69622** | 64574 | 5048 | **8** | **269134** | 271921 | (2787) | **(1)** |
| Train miles (thousands) | **7509** | 6991 | 518 | **7** | **28899** | 29397 | (498) | **(2)** |
| Average train weight - excluding local traffic (tons) | **9978** | 10011 | (33) | **—** | **10064** | 9967 | 97 | **1** |
| Average train length - excluding local traffic (feet) | **8244** | 8229 | 15 | **—** | **8350** | 8200 | 150 | **2** |
| Average terminal dwell (hours) | **8.0** | 7.5 | 0.5 | **7** | **8.0** | 7.2 | 0.8 | **11** |
| Average train speed (miles per hour, or "mph")<sup>(1)</sup> | **21.1** | 22.3 | (1.2) | **(5)** | **21.4** | 21.6 | (0.2) | **(1)** |
| Locomotive productivity (GTMs / operating horsepower)<sup>(2)</sup> | **196** | 193 | 3 | **2** | **196** | 201 | (5) | **(2)** |
| Fuel efficiency<sup>(3)</sup> | **0.972** | 0.941 | 0.031 | **3** | **0.955** | 0.931 | 0.024 | **3** |
| U.S. gallons of locomotive fuel consumed (millions)<sup>(4)</sup> | **67.7** | 60.8 | 6.9 | **11** | **257.0** | 253.3 | 3.7 | **1** |
| Average fuel price (U.S. dollars per U.S. gallon) | **4.34** | 3.03 | 1.31 | **43** | **4.19** | 2.70 | 1.49 | **55** |
| **<u>Total Employees and Workforce</u>** |  |  |  |  |  |  |  |  |
| Total employees (average)<sup>(5)</sup> | **13000** | 12113 | 887 | **7** | **12570** | 12337 | 233 | **2** |
| Total employees (end of period)<sup>(5)</sup> | **12754** | 11834 | 920 | **8** | **12754** | 11834 | 920 | **8** |
| Workforce (end of period)<sup>(6)</sup> | **12824** | 11872 | 952 | **8** | **12824** | 11872 | 952 | **8** |
| **<u>Safety Indicators</u>**<sup>(7)</sup> |  |  |  |  |  |  |  |  |
| FRA personal injuries per 200,000 employee-hours | **1.12** | 0.75 | 0.37 | **49** | **1.01** | 0.92 | 0.09 | **10** |
| FRA train accidents per million train-miles | **1.19** | 1.03 | 0.16 | **16** | **0.93** | 1.10 | (0.17) | **(15)** |

---

<sup>(1)</sup> Average train speed is defined as a measure of the line-haul movement from origin to destination including terminal dwell hours. It is calculated by dividing the total train miles travelled by the total train hours operated. This calculation does not include delay time related to customers or foreign railroads and excludes the time and distance travelled by: i) trains used in or around CP's yards; ii) passenger trains; and iii) trains used for repairing track.

<sup>(2)</sup> Locomotive productivity is defined as daily GTMs divided by daily average operating horsepower. Operating horsepower excludes units offline, tied up or in storage, or in use on other railways, and includes foreign units online.

<sup>(3)</sup> Fuel efficiency is defined as U.S. gallons of locomotive fuel consumed per 1,000 GTMs.

<sup>(4)</sup> Includes gallons of fuel consumed from freight, yard and commuter service but excludes fuel used in capital projects and other non-freight activities.

<sup>(5)</sup> An employee is defined as an individual currently engaged in full-time, part-time, or seasonal employment with CP.

<sup>(6)</sup> Workforce is defined as total employees plus contractors and consultants.

<sup>(7)</sup> FRA personal injuries per 200,000 employee-hours for the three months ended December 31, 2021 was previously reported as 0.71, restated to 0.75 in this Earnings Release. This restatement reflects new information available within specified periods stipulated by the FRA but that exceed the Company's financial reporting timeline.

------

![cpclassicbeavera14a.jpg](cpclassicbeavera14a.jpg)

**Non-GAAP Measures**

The Company presents Non-GAAP measures to provide a basis for evaluating underlying earnings and liquidity trends in the Company's business that can be compared with the results of operations in prior periods. In addition, these Non-GAAP measures facilitate a multi-period assessment of long-term profitability, allowing management and other external users of the Company's consolidated financial information to compare profitability on a long-term basis, including assessing future profitability, with that of the Company's peers.

These Non-GAAP measures have no standardized meaning and are not defined by accounting principles generally accepted in the United States of America ("GAAP") and, therefore, may not be comparable to similar measures presented by other companies. The presentation of these Non-GAAP measures is not intended to be considered in isolation from, as a substitute for, or as superior to the financial information presented in accordance with GAAP.

**Non-GAAP Performance Measures**

The Company uses adjusted earnings results including Adjusted income, Adjusted diluted earnings per share, Adjusted operating income and Adjusted operating ratio to evaluate the Company's operating performance and for planning and forecasting future business operations and future profitability. Core adjusted income and Core adjusted diluted earnings per share are presented to provide financial statement users with additional transparency by isolating for the impact of KCS purchase accounting. KCS purchase accounting represents the amortization of basis differences, being the difference in value between the consideration paid to acquire KCS and the underlying carrying value of the net assets of KCS immediately prior to its acquisition by the Company, net of tax, as recognized within Equity (earnings) loss of Kansas City Southern in the Company's Interim Consolidated Statements of Income. All assets subject to KCS purchase accounting contribute to income generation and will continue to amortize over their estimated useful lives. These Non-GAAP measures provide meaningful supplemental information regarding operating results because they exclude certain significant items that are not considered indicative of future financial trends either by nature or amount or provide improved comparability to past performance. As a result, these items are excluded for management assessment of operational performance, allocation of resources and preparation of annual budgets. These significant items may include, but are not limited to, restructuring and asset impairment charges, individually significant gains and losses from sales of assets, acquisition-related costs, the merger termination payment received, KCS's gain on unwinding of interest rate hedges (net of CP's associated purchase accounting basis differences and tax), as recognized within Equity (earnings) loss of Kansas City Southern in the Company's Interim Consolidated Statements of Income, the foreign exchange ("FX") impact of translating the Company's debt and lease liabilities (including borrowings under the credit facility), discrete tax items, changes in the outside basis tax difference between the carrying amount of CP's equity investment in KCS and its tax basis of this investment, changes in income tax rates, changes to an uncertain tax item, and certain items outside the control of management. Acquisition-related costs include legal, consulting, financing fees, integration planning costs consisting of third-party services and system migration, fair value gain or loss on FX forward contracts and interest rate hedges, FX gain on U.S. dollar-denominated cash on hand from the issuances of long-term debt to fund the KCS acquisition, and transaction and integration costs incurred by KCS, net of tax, which were recognized within Equity (earnings) loss of Kansas City Southern in the Company's Interim Consolidated Statements of Income. These items may not be non-recurring. However, excluding these significant items from GAAP results allows for a consistent understanding of the Company's consolidated financial performance when performing a multi-period assessment including assessing the likelihood of future results. Accordingly, these Non-GAAP financial measures may provide insight to investors and other external users of the Company's consolidated financial information.

Significant items that impact reported earnings for 2022 and 2021 include:

In 2022, there were five significant items included in Net income as follows:

• in the fourth quarter, a gain of $212 million due to KCS's gain on unwinding of interest rate hedges (net of CP's associated purchase accounting basis differences and tax) recognized in Equity earnings of KCS that favourably impacted Diluted EPS by 23 cents;

• in the fourth quarter, a deferred tax recovery of $24 million as a result of a reversal of an uncertain tax item related to a prior period that favourably impacted Diluted EPS by 3 cents;

• in the third quarter, a deferred tax recovery of $12 million due to a decrease in the Iowa state tax rate that favourably impacted Diluted EPS by 1 cent;

• during the course of the year, a net deferred tax recovery of $19 million on changes in the outside basis difference of the equity investment in KCS that favourably impacted Diluted EPS by 2 cents as follows:

–in the fourth quarter, a deferred tax recovery of $27 million on changes in the outside basis difference of the equity investment in KCS that favourably impacted Diluted EPS by 3 cents;

–in the third quarter, a deferred tax recovery of $9 million on changes in the outside basis difference of the equity investment in KCS that favourably impacted Diluted EPS by 1 cent;

–in the second quarter, a deferred tax expense of $49 million on changes in the outside basis difference of the equity investment in KCS that unfavourably impacted Diluted EPS by 5 cents; and

–in the first quarter, a deferred tax recovery of $32 million on changes in the outside basis difference of the equity investment in KCS that favourably impacted Diluted EPS by 3 cents; and

------

![cpclassicbeavera14a.jpg](cpclassicbeavera14a.jpg)

• during the course of the year, acquisition-related costs of $123 million in connection with the KCS acquisition ($108 million after current tax recovery of $15 million), including costs of $74 million recognized in Purchased services and other, and $49 million recognized in Equity earnings of KCS, that unfavourably impacted Diluted EPS by 12 cents as follows:

–in the fourth quarter, acquisition-related costs of $27 million ($16 million after current tax recovery of $11 million), including costs of $17 million recognized in Purchased services and other and $10 million recognized in Equity earnings of KCS, that unfavourably impacted Diluted EPS by 3 cents;

–in the third quarter, acquisition-related costs of $30 million ($33 million after current tax expense of $3 million), including costs of $18 million recognized in Purchased services and other and $12 million recognized in Equity earnings of KCS, that unfavourably impacted Diluted EPS by 3 cents;

–in the second quarter, acquisition-related costs of $33 million ($29 million after current tax recovery of $4 million), including costs of $19 million recognized in Purchased services and other and $14 million recognized in Equity earnings of KCS, that unfavourably impacted Diluted EPS by 3 cents; and

–in the first quarter, acquisition-related costs of $33 million ($30 million after current tax recovery of $3 million), including costs of $20 million recognized in Purchased services and other and $13 million recognized in Equity earnings of KCS, that unfavourably impacted Diluted EPS by 3 cents.

2021:

• in the fourth quarter, a deferred tax recovery of $33 million on changes in the outside basis difference of the equity investment in KCS that favourably impacted Diluted EPS by 5 cents;

• in the second quarter, the merger termination payment received of $845 million ($748 million after current taxes) in connection with KCS's termination of the Agreement and Plan of Merger (the "Original Merger Agreement") effective May 21, 2021 that favourably impacted Diluted EPS by $1.11;

• during the course of the year, acquisition-related costs of $599 million in connection with the KCS acquisition ($500 million after current tax recovery of $107 million net of deferred tax expense of $8 million), including costs of $183 million recognized in Purchased services and other, $169 million recognized in Equity loss of KCS, and $247 million recognized in Other expense (income), that unfavourably impacted Diluted EPS by 75 cents as follows:

–in the fourth quarter, acquisition-related costs of $157 million ($157 million after current tax recovery of $13 million net of deferred tax expense of $13 million), including costs of $36 million recognized in Purchased services and other, $169 million in Equity loss of KCS, and a $48 million recovery recognized in Other (income) expense, that unfavourably impacted Diluted EPS by 22 cents;

–in the third quarter, acquisition-related costs of $98 million ($80 million after current tax recovery of $61 million net of deferred tax expense of $43 million), including costs of $15 million recognized in Purchased services and other and $83 million recognized in Other expense (income), that unfavourably impacted Diluted EPS by 12 cents;

–in the second quarter, acquisition-related costs of $308 million ($236 million after current taxes of $25 million and deferred taxes of $47 million), including costs of $99 million recognized in Purchased services and other and $209 million recognized in Other expense (income), that unfavourably impacted Diluted EPS by 35 cents; and

–in the first quarter, acquisition-related costs of $36 million ($27 million after current taxes of $8 million and deferred taxes of $1 million), including costs of $33 million recognized in Purchased services and other and $3 million recognized in Other expense (income), that unfavourably impacted Diluted EPS by 4 cents; and

• during the course of the year, a net non-cash gain of $7 million ($6 million after deferred tax) due to FX translation of debt and lease liabilities that favourably impacted Diluted EPS by 1 cent as follows:

–in the fourth quarter, a $32 million loss ($28 million after deferred tax) that unfavourably impacted Diluted EPS by 4 cents;

–in the third quarter, a $46 million loss ($40 million after deferred tax) that unfavourably impacted Diluted EPS by 6 cents;

–in the second quarter, a $52 million gain ($45 million after deferred tax) that favourably impacted Diluted EPS by 7 cents; and

–in the first quarter, a $33 million gain ($29 million after deferred tax) that favourably impacted Diluted EPS by 4 cents.

------

![cpclassicbeavera14a.jpg](cpclassicbeavera14a.jpg)

**Reconciliation of GAAP Performance Measures to Non-GAAP Performance Measures**

The following tables reconcile the most directly comparable measures presented in accordance with GAAP to the Non-GAAP measures:

Adjusted income is calculated as Net income reported on a GAAP basis adjusted for significant items. Core adjusted income is calculated as Adjusted income less KCS purchase accounting.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the three months ended December 31** | **For the three months ended December 31** | **For the year ended December 31** | **For the year ended December 31** |
| (in millions of Canadian dollars) | **2022** | 2021 | **2022** | 2021 |
| **Net income as reported** | $**1271** | $532 | $**3517** | $2852 |
| Less significant items (pre-tax): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;KCS net gain on unwind of interest rate hedges | **212** |  | **212** |  |
| &nbsp;&nbsp;&nbsp;Acquisition-related costs | **(27)** | (157) | **(123)** | (599) |
| &nbsp;&nbsp;&nbsp;Merger termination fee | **—** |  | **—** | 845 |
| &nbsp;&nbsp;&nbsp;Impact of FX translation gain (loss) on debt and lease liabilities | **—** | (32) | **—** | 7 |
| Add: |  |  |  |  |
| &nbsp;&nbsp;Tax effect of adjustments<sup>(1)</sup> | **(11)** | (4) | **(15)** | (1) |
| &nbsp;&nbsp;&nbsp;Deferred tax recovery on the outside basis difference of the investment in KCS | **(27)** | (33) | **(19)** | (33) |
| &nbsp;&nbsp;&nbsp;Income tax rate changes | **—** |  | **(12)** |  |
| &nbsp;&nbsp;&nbsp;Reversal of provision for uncertain tax item | **(24)** |  | **(24)** |  |
| **Adjusted income** | $**1024** | $684 | $**3358** | $2565 |
| Less: KCS purchase accounting | **(42)** | (8) | **(163)** | (8) |
| **Core adjusted income** | $**1066** | $692 | $**3521** | $2573 |

---

<sup>(1)</sup> The tax effect of adjustments was calculated as the pre-tax effect of the adjustments multiplied by the applicable tax rate for the above items of 5.84% and 16.97% for the three months and year ended December 31, 2022, respectively, and 2.27% and 0.51% for the three months and year ended December 31, 2021, respectively. The applicable tax rates reflect the taxable jurisdictions and nature, being on account of capital or income, of the significant items.

------

![cpclassicbeavera14a.jpg](cpclassicbeavera14a.jpg)

Adjusted diluted earnings per share is calculated using Adjusted income, as defined above, divided by the weighted-average diluted number of Common Shares outstanding during the period as determined in accordance with GAAP. Core adjusted diluted earnings per share is calculated as Adjusted diluted earnings per share less KCS purchase accounting.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the three months ended December 31** | **For the three months ended December 31** | **For the year ended December 31** | **For the year ended December 31** |
| | **2022** | 2021 | **2022** | 2021 |
| **Diluted earnings per share as reported** | $**1.36** | $0.74 | $**3.77** | $4.18 |
| Less significant items (pre-tax): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;KCS net gain on unwind of interest rate hedges | **0.23** |  | **0.23** |  |
| &nbsp;&nbsp;&nbsp;Acquisition-related costs | **(0.04)** | (0.22) | **(0.14)** | (0.88) |
| &nbsp;&nbsp;&nbsp;Merger termination fee | **—** |  | **—** | 1.24 |
| &nbsp;&nbsp;&nbsp;Impact of FX translation gain (loss) on debt and lease liabilities | **—** | (0.05) | **—** | 0.01 |
| Add: |  |  |  |  |
| &nbsp;&nbsp;Tax effect of adjustments<sup>(1)</sup> | **(0.01)** | (0.01) | **(0.02)** |  |
| &nbsp;&nbsp;&nbsp;Deferred tax recovery on the outside basis difference of the investment in KCS | **(0.03)** | (0.05) | **(0.02)** | (0.05) |
| &nbsp;&nbsp;&nbsp;Income tax rate changes | **—** |  | **(0.01)** |  |
| &nbsp;&nbsp;&nbsp;Reversal of provision for uncertain tax item | **(0.03)** |  | **(0.03)** |  |
| **Adjusted diluted earnings per share** | $**1.10** | $0.95 | $**3.60** | $3.76 |
| Less: KCS purchase accounting | **(0.04)** | (0.01) | **(0.17)** | (0.01) |
| **Core adjusted diluted earnings per share** | $**1.14** | $0.96 | $**3.77** | $3.77 |

---

<sup>(1)</sup> The tax effect of adjustments was calculated as the pre-tax effect of the adjustments multiplied by the applicable tax rate for the above items of 5.84% and 16.97% for the three months and year ended December 31, 2022, and 2.27% and 0.51% for the three months and year ended December 31, 2021, respectively. The applicable tax rates reflect the taxable jurisdictions and nature, being on account of capital or income, of the significant items.

Adjusted operating income is calculated as Operating income reported on a GAAP basis less significant items.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the three months ended December 31** | **For the three months ended December 31** | **For the year ended December 31** | **For the year ended December 31** |
| (in millions of Canadian dollars) | **2022** | 2021 | **2022** | 2021 |
| **Operating income as reported** | $**989** | $832 | $**3329** | $3206 |
| Less significant item: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Acquisition-related costs | **(17)** | (36) | **(74)** | (183) |
| **Adjusted operating income** | $**1006** | $868 | $**3403** | $3389 |

---

Adjusted operating ratio excludes those significant items that are reported within Operating income.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the three months ended December 31** | **For the three months ended December 31** | **For the year ended December 31** | **For the year ended December 31** |
| | **2022** | 2021 | **2022** | 2021 |
| **Operating ratio as reported** | **59.8%** | 59.2% | **62.2%** | 59.9% |
| Less significant item: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Acquisition-related costs | **0.7%** | 1.7% | **0.8%** | 2.3% |
| **Adjusted operating ratio** | **59.1%** | 57.5% | **61.4%** | 57.6% |

---

*Adjusted Return on Invested Capital ("Adjusted ROIC")*

Return on average shareholders' equity is calculated as Net income divided by average shareholders' equity, averaged between the beginning and ending balance over a trailing twelve month period. Adjusted ROIC is calculated as Adjusted return divided by Adjusted average invested capital. Adjusted return is defined as Net income adjusted for interest expense, tax effected at the Company's adjusted annualized effective tax rate, and significant items in the Company's Consolidated Financial Statements, tax effected at the applicable tax rate. Adjusted average invested capital is defined as the sum of total Shareholders' equity, Long-term debt, and Long-term debt maturing within one year, as presented in the Company's Consolidated Financial Statements,

------

![cpclassicbeavera14a.jpg](cpclassicbeavera14a.jpg)

each averaged between the beginning and ending balance over a trailing twelve month period, adjusted for the impact of significant items, tax effected at the applicable tax rate, on closing balances as part of this average. Adjusted ROIC excludes significant items reported in the Company's Consolidated Financial Statements, as these significant items are not considered indicative of future financial trends either by nature or amount, and excludes interest expense, net of tax, to incorporate returns on the Company's overall capitalization. Adjusted ROIC is a performance measure that measures how productively the Company uses its long-term capital investments, representing critical indicators of good operating and investment decisions made by management, and is an important performance criteria in determining certain elements of the Company's long-term incentive plan. Adjusted ROIC is reconciled below from Return on average shareholders' equity, the most comparable measure calculated in accordance with GAAP.

Calculation of Return on average shareholders' equity

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** |
| (in millions of Canadian dollars, except for percentages) | **2022** | **2022** | 2021 | 2021 |
| Net income as reported | **$** | **3517** | $| 2852 |
| Average shareholders' equity | **36358** | **36358** | 20574 | 20574 |
| **Return on average shareholders' equity** | **9.7%** | **9.7%** | 13.9% | 13.9% |

---

Reconciliation of Net income to Adjusted return

---

| | | |
|:---|:---|:---|
| | **For the year ended December 31** | **For the year ended December 31** |
| (in millions of Canadian dollars) | **2022** | 2021 |
| **Net income as reported** | $**3517** | $2852 |
| Add: |  |  |
| &nbsp;&nbsp;&nbsp;Net interest expense | **652** | 440 |
| &nbsp;&nbsp;Tax on interest<sup>(1)</sup> | **(145)** | (106) |
| &nbsp;&nbsp;&nbsp;Significant items (pre-tax): |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;KCS net gain on unwind of interest rate hedges | **(212)** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Acquisition-related costs | **123** | 599 |
| &nbsp;&nbsp;&nbsp;&nbsp;Merger termination fee | **—** | (845) |
| &nbsp;&nbsp;&nbsp;&nbsp;Impact of FX translation gain on debt and lease liabilities | **—** | (7) |
| &nbsp;&nbsp;Tax on significant items<sup>(2)</sup> | **(15)** | (1) |
| &nbsp;&nbsp;&nbsp;Deferred tax recovery on the outside basis difference of the investment in KCS | **(19)** | (33) |
| &nbsp;&nbsp;&nbsp;Income tax rate changes | **(12)** |  |
| &nbsp;&nbsp;&nbsp;Reversal of provision for uncertain tax item | **(24)** |  |
| **Adjusted return** | $**3865** | $2899 |

---

<sup>(1)</sup> Tax was calculated at the adjusted annualized effective tax rate of 22.24% and 23.85% for the years ended December 31, 2022 and 2021, respectively.

<sup>(2)</sup> Tax was calculated as the pre-tax effect of the adjustments multiplied by the applicable tax rate for the above items of 16.97% and 0.51% for the years ended December 31, 2022 and 2021, respectively. The applicable tax rates reflect the taxable jurisdictions and nature, being on account of capital or income, of the significant items.

------

![cpclassicbeavera14a.jpg](cpclassicbeavera14a.jpg)

Reconciliation of Average shareholders' equity to Adjusted average invested capital

---

| | | |
|:---|:---|:---|
| | **For the year ended December 31** | **For the year ended December 31** |
| (in millions of Canadian dollars) | **2022** | 2021 |
| **Average shareholders' equity** | $**36358** | $20574 |
| Average long-term debt, including long-term debt maturing within one year | **19889** | 14949 |
|  | $**56247** | $35523 |
| Less: |  |  |
| &nbsp;&nbsp;&nbsp;Significant items (pre-tax): |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;KCS net gain on unwind of interest rate hedges | **106** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Acquisition-related costs | **(62)** | (300) |
| &nbsp;&nbsp;&nbsp;&nbsp;Merger termination fee | **—** | 423 |
| &nbsp;&nbsp;Tax on significant items<sup>(1)</sup> | **8** | 1 |
| &nbsp;&nbsp;&nbsp;Deferred tax recovery on the outside basis difference of the investment in KCS | **10** | 16 |
| &nbsp;&nbsp;&nbsp;Income tax rate changes | **6** |  |
| &nbsp;&nbsp;&nbsp;Reversal of provision for uncertain tax item | **12** |  |
| **Adjusted average invested capital** | $**56167** | $35383 |

---

<sup>(1)</sup> Tax was calculated at the pre-tax effect of the adjustments multiplied by the applicable tax rate of 16.97% and 0.90% for the years ended December 31, 2022 and 2021, respectively. The applicable tax rate reflects the taxable jurisdictions and nature, being on account of capital or income, of the significant items.

Calculation of Adjusted ROIC

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** |
| (in millions of Canadian dollars, except for percentages) | **2022** | **2022** | 2021 | 2021 |
| Adjusted return | **$** | **3865** | $| 2899 |
| Adjusted average invested capital | **56167** | **56167** | 35383 | 35383 |
| **Adjusted ROIC** | **6.9%** | **6.9%** | 8.2% | 8.2% |

---

*Free Cash*

Free cash is calculated as Cash provided by operating activities, less Cash used in investing activities, adjusted for changes in Cash and cash equivalents balances resulting from FX fluctuations, the operating cash flow impacts of acquisition-related costs associated with the KCS transaction including settlement of cash flow hedges upon debt issuance and FX gain on U.S. dollar-denominated cash held to fund the KCS acquisition, the merger termination payment received related to KCS's termination of the Original Merger Agreement, and the acquisition of KCS. Free cash is a measure that management considers to be a valuable indicator of liquidity. Free cash is useful to investors and other external users of the Company's Consolidated Financial Statements as it assists with the evaluation of the Company's ability to generate cash to satisfy debt obligations and discretionary activities such as dividends, share repurchase programs, and other strategic opportunities, and is an important performance criteria in determining certain elements of the Company's long-term incentive plan. The acquisition-related costs and the merger termination fee related to the KCS acquisition are not indicative of operating trends and have been excluded from Free cash. The acquisition of KCS is not indicative of investment trends and has also been excluded from Free cash. Free cash should be considered in addition to, rather than as a substitute for, Cash provided by operating activities.

------

![cpclassicbeavera14a.jpg](cpclassicbeavera14a.jpg)

Reconciliation of Cash Provided by Operating Activities to Free Cash

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the three months ended December 31** | **For the three months ended December 31** | **For the year ended December 31** | **For the year ended December 31** |
| (in millions of Canadian dollars) | **2022** | 2021 | **2022** | 2021 |
| **Cash provided by operating activities** | $**1720** | $604 | $**4142** | $3688 |
| Cash used in investing activities | **(518)** | (10910) | **(1496)** | (13730) |
| Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents | **(1)** | 35 | **20** | 41 |
| Less: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Acquisition-related costs | **(18)** | (293) | **(67)** | (340) |
| &nbsp;&nbsp;&nbsp;Merger termination fee | **—** |  | **—** | 845 |
| &nbsp;&nbsp;&nbsp;Investment in Kansas City Southern | **—** | (10526) | **—** | (12299) |
| **Free cash** | $**1219** | $548 | $**2733** | $1793 |

---

*Foreign Exchange Adjusted % Change*

FX adjusted % change allows certain financial results to be viewed without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons in the analysis of trends in business performance. Financial result variances at constant currency are obtained by translating the comparable period of the prior year results denominated in U.S. dollars at the foreign exchange rates of the current period.

FX adjusted % changes in revenues are further used in calculating FX adjusted % change in freight revenue per carload and RTM. FX adjusted % changes in revenues are as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **For the three months ended December 31** | **For the three months ended December 31** | **For the three months ended December 31** | **For the three months ended December 31** | **For the three months ended December 31** |
| (in millions of Canadian dollars) | **Reported 2022** | Reported 2021 | Variance<br>due to FX | FX Adjusted 2021 | FX Adjusted % Change |
| Freight revenues by line of business |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Grain | $**655** | $440 | $20 | $460 | 42 |
| &nbsp;&nbsp;&nbsp;&nbsp;Coal | **119** | 134 | 2 | 136 | (13) |
| &nbsp;&nbsp;&nbsp;&nbsp;Potash | **136** | 115 | 5 | 120 | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;Fertilizers and sulphur | **88** | 78 | 5 | 83 | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Forest products | **104** | 89 | 6 | 95 | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;Energy, chemicals and plastics | **384** | 414 | 17 | 431 | (11) |
| &nbsp;&nbsp;&nbsp;&nbsp;Metals, minerals and consumer products | **229** | 193 | 12 | 205 | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;Automotive | **116** | 87 | 4 | 91 | 27 |
| &nbsp;&nbsp;&nbsp;&nbsp;Intermodal | **582** | 444 | 7 | 451 | 29 |
| Freight revenues | **2413** | 1994 | 78 | 2072 | 16 |
| Non-freight revenues | **49** | 46 |  | 46 | 7 |
| **Total revenues** | $**2462** | $2040 | $78 | $2118 | 16 |

---

------

![cpclassicbeavera14a.jpg](cpclassicbeavera14a.jpg)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** |
| (in millions of Canadian dollars) | **Reported 2022** | Reported 2021 | Variance<br>due to FX | FX Adjusted 2021 | FX Adjusted % Change |
| Freight revenues by line of business |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Grain | $**1776** | $1684 | $34 | $1718 | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;Coal | **577** | 625 | 3 | 628 | (8) |
| &nbsp;&nbsp;&nbsp;&nbsp;Potash | **581** | 463 | 9 | 472 | 23 |
| &nbsp;&nbsp;&nbsp;&nbsp;Fertilizers and sulphur | **332** | 305 | 9 | 314 | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Forest products | **403** | 348 | 12 | 360 | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;Energy, chemicals and plastics | **1394** | 1563 | 31 | 1594 | (13) |
| &nbsp;&nbsp;&nbsp;&nbsp;Metals, minerals and consumer products | **884** | 728 | 22 | 750 | 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;Automotive | **438** | 376 | 9 | 385 | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;Intermodal | **2242** | 1724 | 13 | 1737 | 29 |
| Freight revenues | **8627** | 7816 | 142 | 7958 | 8 |
| Non-freight revenues | **187** | 179 | 1 | 180 | 4 |
| **Total revenues** | $**8814** | $7995 | $143 | $8138 | 8 |

---

FX adjusted % changes in operating expenses are as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **For the three months ended December 31** | **For the three months ended December 31** | **For the three months ended December 31** | **For the three months ended December 31** | **For the three months ended December 31** |
| (in millions of Canadian dollars) | **Reported 2022** | Reported 2021 | Variance<br>due to FX | FX Adjusted 2021 | FX Adjusted % Change |
| Compensation and benefits | $**416** | $405 | $10 | $415 |  |
| Fuel | **399** | 231 | 15 | 246 | 62 |
| Materials | **69** | 51 | 1 | 52 | 33 |
| Equipment rents | **43** | 29 | 1 | 30 | 43 |
| Depreciation and amortization | **219** | 206 | 4 | 210 | 4 |
| Purchased services and other | **327** | 286 | 6 | 292 | 12 |
| **Total operating expenses** | $**1473** | $1208 | $37 | $1245 | 18 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** |
| (in millions of Canadian dollars) | **Reported 2022** | Reported 2021 | Variance<br>due to FX | FX Adjusted 2021 | FX Adjusted % Change |
| Compensation and benefits | $**1570** | $1570 | $18 | $1588 | (1) |
| Fuel | **1400** | 854 | 27 | 881 | 59 |
| Materials | **260** | 215 | 2 | 217 | 20 |
| Equipment rents | **140** | 121 | 3 | 124 | 13 |
| Depreciation and amortization | **853** | 811 | 8 | 819 | 4 |
| Purchased services and other | **1262** | 1218 | 13 | 1231 | 3 |
| **Total operating expenses** | $**5485** | $4789 | $71 | $4860 | 13 |

---

------

![cpclassicbeavera14a.jpg](cpclassicbeavera14a.jpg)

FX adjusted % change in operating income is as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **For the three months ended December 31** | **For the three months ended December 31** | **For the three months ended December 31** | **For the three months ended December 31** | **For the three months ended December 31** |
| (in millions of Canadian dollars) | **Reported 2022** | Reported 2021 | Variance<br>due to FX | FX Adjusted 2021 | FX Adjusted % Change |
| **Operating income** | $**989** | $832 | $41 | $873 | 13 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** | **For the year ended December 31** |
| (in millions of Canadian dollars) | **Reported 2022** | Reported 2021 | Variance<br>due to FX | FX Adjusted 2021 | FX Adjusted % Change |
| **Operating income** | $**3329** | $3206 | $72 | $3278 | 2 |

---

*Dividend Payout Ratio and Core Adjusted Dividend Payout Ratio* 

Dividend payout ratio is calculated as dividends declared per share divided by Diluted EPS. Core adjusted dividend payout ratio is calculated as dividends declared per share divided by Core adjusted diluted EPS, as defined above. This ratio is a measure of shareholder return and provides information on the Company's ability to declare dividends on an ongoing basis, excluding significant items and the impact of KCS purchase accounting.

Starting with this Earnings Release, Core adjusted dividend payout ratio is presented to provide users with additional transparency by isolating for the impact of KCS purchase accounting.

Calculation of Dividend Payout Ratio

---

| | | |
|:---|:---|:---|
| | **For the year ended December 31** | **For the year ended December 31** |
| (in Canadian dollars, except for percentages) | **2022** | 2021 |
| Dividends declared per share | $**0.760** | $0.760 |
| Diluted EPS | **3.77** | 4.18 |
| **Dividend payout ratio** | **20.2%** | 18.2% |

---

Calculation of Core Adjusted Dividend Payout Ratio

---

| | | |
|:---|:---|:---|
| | **For the year ended December 31** | **For the year ended December 31** |
| (in Canadian dollars, except for percentages) | **2022** | 2021 |
| Dividends declared per share | $**0.760** | $0.760 |
| Core adjusted diluted EPS | **3.77** | 3.77 |
| **Core adjusted dividend payout ratio** | **20.2%** | 20.2% |

---

*Adjusted Net Debt to Adjusted EBITDA Ratio and Pro-forma adjusted Net Debt to Pro-forma adjusted EBITDA Ratio*

Adjusted net debt to Adjusted earnings before interest, tax, depreciation and amortization ("EBITDA") ratio is calculated as Adjusted net debt divided by Adjusted EBITDA. The Adjusted net debt to Adjusted EBITDA ratio is a key credit measure used to assess the Company's financial capacity. The ratio provides information on the Company's ability to service its debt and other long-term obligations from operations, excluding significant items, and is an important performance criteria in determining certain elements of the Company's long-term incentive plan. The Adjusted net debt to Adjusted EBITDA ratio is reconciled below from the Long-term debt to Net income ratio, the most comparable measure calculated in accordance with GAAP.

Beginning in the first quarter of 2022, CP added disclosure of Pro-forma adjusted net debt to Pro-forma adjusted EBITDA ratio to better align with CP's debt covenant calculation, which incorporates the trailing twelve month adjusted EBITDA of KCS as well as KCS's outstanding debt. CP is incorporating the trailing twelve month adjusted EBITDA of KCS on a pro-forma basis, as CP is not entitled to earnings prior to the acquisition date of December 14, 2021. CP does not control KCS while it is in the voting trust during review of our merger application by the STB, though CP is the beneficial owner of KCS's outstanding shares and receives cash dividends from KCS. The adjustment to include the trailing twelve month EBITDA and KCS's outstanding debt provides users of the financial statements with better insight into CP's progress in achieving deleveraging commitments. KCS's disclosed

------

![cpclassicbeavera14a.jpg](cpclassicbeavera14a.jpg)

U.S. dollar financial values for the years ended December 31, 2022 and December 31, 2021 were adjusted to Canadian dollars reflecting the FX rate for the appropriate period presented, respectively.

Calculation of Long-term Debt to Net Income Ratio

Long-term debt to Net income ratio is calculated as long-term debt, including long-term debt maturing within one year, divided by Net income.

---

| | | |
|:---|:---|:---|
| (in millions of Canadian dollars, except for ratios) | **2022** | 2021 |
| Long-term debt including long-term debt maturing within one year as at December 31 | $**19651** | $20127 |
| Net income for the year ended December 31 | **3517** | 2852 |
| **Long-term debt to Net income ratio** | **5.6** | 7.1 |

---

Reconciliation of Long-term Debt to Adjusted Net Debt and Pro-forma Adjusted Net Debt

Adjusted net debt is defined as Long-term debt, Long-term debt maturing within one year and Short-term borrowing as reported on the Company's Consolidated Balance Sheets adjusted for pension plans deficit, operating lease liabilities recognized on the Company's Consolidated Balance Sheets, and Cash and cash equivalents. Adjusted net debt is used as a measure of debt and long-term obligations as part of the calculation of Adjusted Net Debt to Adjusted EBITDA.

---

| | | |
|:---|:---|:---|
| (in millions of Canadian dollars)<sup>(1)</sup> | **2022** | 2021 |
| **CP Long-term debt including long-term debt maturing within one year as at December 31** | $**19651** | $20127 |
| Add: |  |  |
| &nbsp;&nbsp;Pension plans deficit<sup>(2)</sup> | **175** | 263 |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities | **270** | 283 |
| Less: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | **451** | 69 |
| **CP Adjusted net debt as at December 31** | $**19645** | $20604 |
| **KCS's long-term debt including long-term debt maturing within one year as at December 31** | $**5119** | $4789 |
| Add: |  |  |
| &nbsp;&nbsp;&nbsp;KCS operating lease liabilities | **136** | 87 |
| Less: |  |  |
| &nbsp;&nbsp;&nbsp;KCS cash and cash equivalents | **281** | 430 |
| **KCS Adjusted net debt as at December 31** | **4974** | 4446 |
| **CP Adjusted net debt as at December 31** | **19645** | 20604 |
| **Pro-forma Adjusted net debt as at December 31** | $**24619** | $25050 |

---

<sup>(1)</sup> KCS's amounts were translated at the period end FX rate of $1.35 and $1.27 for the years ended December 31, 2022 and 2021, respectively.

<sup>(2)</sup> Pension plans deficit is the total funded status of the Pension plans in deficit only.

Reconciliation of Net Income to EBIT, Adjusted EBIT and Adjusted EBITDA and Pro-forma Adjusted EBITDA

Earnings before interest and tax ("EBIT") is calculated as Net income before Net interest expense and Income tax expense. Adjusted EBIT excludes significant items reported in both Operating income and Other expense (income). Adjusted EBITDA is calculated as Adjusted EBIT plus operating lease expense and Depreciation and amortization, less Other components of net periodic benefit recovery. Adjusted EBITDA is used as a measure of liquidity derived from operations, excluding significant items, as part of the calculation of Adjusted Net Debt to Adjusted EBITDA.

------

![cpclassicbeavera14a.jpg](cpclassicbeavera14a.jpg)

---

| | | |
|:---|:---|:---|
| | **For the year ended December 31** | **For the year ended December 31** |
| (in millions of Canadian dollars)<sup>(1)</sup> | **2022** | 2021 |
| **CP Net income as reported** | $**3517** | $2852 |
| Add: |  |  |
| &nbsp;&nbsp;&nbsp;Net interest expense | **652** | 440 |
| &nbsp;&nbsp;&nbsp;Income tax expense | **628** | 768 |
| **EBIT** | **4797** | 4060 |
| Less significant items (pre-tax): |  |  |
| &nbsp;&nbsp;&nbsp;KCS net gain on unwind of interest rate hedges | **212** |  |
| &nbsp;&nbsp;&nbsp;Acquisition-related costs | **(123)** | (599) |
| &nbsp;&nbsp;&nbsp;Merger termination fee | **—** | 845 |
| &nbsp;&nbsp;&nbsp;Impact of FX translation gain on debt and lease liabilities | **—** | 7 |
| **Adjusted EBIT** | **4708** | 3807 |
| Add: |  |  |
| &nbsp;&nbsp;&nbsp;Operating lease expense | **75** | 72 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | **853** | 811 |
| Less: |  |  |
| &nbsp;&nbsp;&nbsp;Other components of net periodic benefit recovery | **411** | 387 |
| **CP Adjusted EBITDA** | $**5225** | $4303 |
| **Net income attributable to KCS and subsidiaries** | $**1290** | $675 |
| Add: |  |  |
| &nbsp;&nbsp;&nbsp;KCS interest expense | **204** | 196 |
| &nbsp;&nbsp;&nbsp;KCS income tax expense | **426** | 269 |
| **KCS EBIT** | **1920** | 1140 |
| Less significant items (pre-tax): |  |  |
| &nbsp;&nbsp;&nbsp;KCS merger costs | **(60)** | (310) |
| &nbsp;&nbsp;&nbsp;KCS gain on settlement of treasury lock agreements | **352** |  |
| **KCS Adjusted EBIT** | **1628** | 1450 |
| Add: |  |  |
| &nbsp;&nbsp;&nbsp;KCS total lease cost | **43** | 40 |
| &nbsp;&nbsp;&nbsp;KCS depreciation and amortization | **509** | 459 |
| **KCS Adjusted EBITDA** | $**2180** | $1949 |
| **CP Adjusted EBITDA** | $**5225** | $4303 |
| Less: |  |  |
| &nbsp;&nbsp;Equity earnings (loss) of KCS<sup>(2)</sup> | **1074** | (141) |
| &nbsp;&nbsp;Acquisition-related costs of KCS<sup>(3)</sup> | **49** | 169 |
| &nbsp;&nbsp;KCS net gain on unwind of interest rate hedges<sup>(4)</sup> | **(212)** |  |
| **Pro-forma Adjusted EBITDA** | $**6494** | $6224 |

---

<sup>(1)</sup> KCS's amounts were translated at the quarterly average FX rate of $1.36, $1.30, $1.28, and $1.27 for Q4 2022, Q3 2022, Q2 2022 and Q1 2022 and $1.26, $1.26, $1.23, and $1.27 for Q4 2021, Q3 2021, Q2 2021, and Q1 2021, respectively.

<sup>(2)</sup> Equity earnings of KCS were part of CP's reported net income and, therefore, have been deducted in arriving to the Pro-forma Adjusted EBITDA.

<sup>(3)</sup> Acquisition-related costs of KCS have been adjusted in CP's Adjusted EBITDA calculation above, therefore have been deducted in arriving to the Pro-forma Adjusted EBITDA.

<sup>(4)</sup> KCS net gain on unwind of interest rate hedges has been adjusted in CP's Adjusted EBITDA calculation above, therefore has been added back in arriving to the Pro-forma Adjusted EBITDA.

------

![cpclassicbeavera14a.jpg](cpclassicbeavera14a.jpg)

Calculation of Adjusted Net Debt to Adjusted EBITDA Ratio and Pro-forma Adjusted Net Debt to Pro-forma Adjusted EBITDA Ratio

---

| | | |
|:---|:---|:---|
| (in millions of Canadian dollars, except for ratios) | **2022** | 2021 |
| Adjusted net debt as at December 31 | $**19645** | $20604 |
| Adjusted EBITDA for the year ended December 31 | **5225** | 4303 |
| **Adjusted net debt to Adjusted EBITDA ratio** | **3.8** | 4.8 |

---

---

| | | |
|:---|:---|:---|
| (in millions of Canadian dollars, except for ratios) | **2022** | 2021 |
| Pro-forma adjusted net debt as at December 31 | $**24619** | $25050 |
| Pro-forma adjusted EBITDA for the year ended December 31 | **6494** | 6224 |
| **Pro-forma adjusted net debt to Pro-forma adjusted EBITDA ratio** | **3.8** | 4.0 |

---

<br>