Business Context and Reporting Period
This Form 6-K filing by Canadian Pacific Railway Limited (CPRL) and Canadian Pacific Railway Company, dated November 24, 2015, serves to submit the company's audited consolidated financial statements for the fiscal year ended December 31, 2014. The filing also includes comparative data for the year ended December 31, 2013, and the three-year period ending December 31, 2014.
Key Financial Metrics
The filing text does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. These metrics are contained within the attached Exhibit 99.1 (the 2014 Annual Financial Statements), which is referenced but not detailed in the cover letter text.
Material Changes and Accounting Adjustments
The primary material change disclosed in this filing is a retrospective recasting of the 2014 Annual Financial Statements due to the adoption of Accounting Standards Update (ASU) 2015-03, "Simplifying the Presentation of Debt Issuance Costs," in the second quarter of 2015. Key adjustments include:
- Balance sheets for presented periods have been adjusted for the change in accounting principle.
- Recast totals were applied to "Other assets" and "Long-term debt."
- Notes 2 (Accounting changes), 17 (Other assets), 19 (Debt), and 20 (Financial instruments) were revised to reflect new carrying amounts.
- Except for these specific adjustments, historical financial information remains unchanged.
Guidance, Outlook, and Risks
The filing text does not contain management commentary, forward-looking guidance, outlook, or specific risk factors. The document focuses solely on the procedural submission of the recasted financial statements and the explanation of the accounting policy change.
Investor Verification Checklist
- Review Exhibit 99.1 to obtain the actual financial figures for revenue, net income, and cash flows for 2014 and 2013.
- Verify the specific dollar impact of the ASU 2015-03 adoption on "Other assets" and "Long-term debt" in the recasted balance sheets.
- Confirm that the supplemental Note 33 (CCFI Note) is included in the exhibit for condensed consolidating financial information.
- Ensure that any debt covenants or liquidity ratios are recalculated using the recasted debt figures rather than the original 2014 filings.