Canadian National (CN) reported that Kansas City Southern (KCS) notified it on September 15, 2021 that their May 21 merger agreement had been terminated.
Two receipts, different purposes
CN’s October 19, 2021 report separates the receipts:
Termination fee: CN reported receiving US$700 million from KCS.
Refund: KCS returned US$700 million to Brooklyn US Holdings, Inc. (Holdco), CN’s wholly owned subsidiary. This repaid CN’s earlier advance connected with KCS’s fee under its original Canadian Pacific (CP) agreement.
The note does not establish the advance’s precise payment day or separate settlement dates for the fee and refund.
Follow the funding
CP’s October 20, 2021 report supplies the other perspective. KCS had paid CP a US$700 million termination fee on May 21, 2021, ending their original agreement.
CP then remitted US$1.4 billion to KCS on September 15, 2021 in connection with KCS’s payment of the CN termination fee and refund.
Keep KCS beside that remittance as its direct recipient when tracing the disclosed funding path.
CP recorded the remittance as “Payment to Kansas City Southern” in its interim balance sheets. That historical presentation is not accounting guidance.
Adding the fee and refund reconciles the total; it does not establish profit.
For your payment summary, ask: what does each amount compensate or return, and which entity pays and receives it?