Canadian Pacific announces solid fourth-quarter operating performance

CALGARY, Jan. 29, 2013 /CNW/ - Canadian Pacific Railway Limited (TSX: CP) (NYSE: CP) announced its fourth-quarter 2012 results today.  CP's diluted earnings per share, excluding significant items (*see Non-GAAP Measures below) comprised of labour restructuring and asset impairment charges was $1.28.  This compares favourably with fourth quarter of 2011 diluted earnings per share, exclusive of significant items of $1.11, an improvement of 15 per cent.  Reported diluted earnings per share for the fourth-quarter 2012, inclusive of significant items, was $0.08. Reported diluted earnings per share in fourth-quarter 2011, inclusive of significant items, was $1.30.

CP's operating ratio, excluding significant items (*see Non-GAAP Measures below) was 74.8 per cent for fourth-quarter 2012, which compares favourably to 2011's operating ratio of 78.5 per cent.  Reported operating ratio for fourth-quarter 2012, inclusive of significant items was 96.0 per cent.

"Canadian Pacific is moving forward on our transformational journey to become the most efficient railroad in North America," said E. Hunter Harrison, President and Chief Executive Officer.   "This quarter, CP saw strong operating performance as we continued to implement significant changes to how we run the railroad."

"Management made a number of hard decisions this quarter including booking several significant items.  With these decisions now behind us, we anticipate record-setting financial and operational results starting in 2013," added Harrison.

Fourth-Quarter Significant Items

Announced items that impacted reported fourth-quarter 2012 and 2011 earnings include:

2012:

  • $53 million labour restructuring charge ($39 million after tax), which unfavourably impacted diluted earnings per share ("EPS") by 22 cents
  • $185 million impairment of Powder River Basin and other investment ($111 million after tax), which unfavourably impacted diluted EPS by 64 cents
  • $80 million asset impairment of certain locomotives ($59 million after tax), which unfavourably impacted diluted EPS by 34 cents

2011:

  • $6 million advisory fees related to shareholder matters, which unfavourably impacted diluted EPS by 3 cents
  • $37 million income tax benefit, which favourably impacted diluted EPS in 2011 by 22 cents

Financial Expectations for Full Year 2013

  • Revenue growth to be in the high single digits
  • Operating ratio to be in the low 70s
  • Diluted EPS to be up in excess of 40 per cent versus 2012's diluted EPS, excluding significant items (*see Non-GAAP Measures below) of $4.34

Key Assumptions for Full Year 2013

  • Average fuel cost per gallon of US$3.45 per U.S. gallon
  • Tax rate in the range of 25 per cent to 27 per cent
  • Canadian to U.S. exchange rate at par

Defined Benefit Pension Expense Assumptions

  • Defined benefit pension expense in 2013 and 2014 in the range of $50 million to $60 million per year, increasing to be in the range of $90 million to $110 million in 2015 and 2016

Conference Call Information

CP will discuss its results with analysts in a conference call beginning at 11:00 a.m. Eastern time (9:00 a.m. Mountain time) on January 29, 2013.

Conference Call Access

Toronto participants dial in number: (647) 427-7450
Operator assisted toll free dial in number: 1-888-231-8191
Callers should dial in 10 minutes prior to the call.

Webcast

For those with Internet access we encourage you to listen via CP's website at www.cpr.ca. To access the webcast and the presentation material, click on the "Invest In CP" tab.

A replay of the conference call will be available by phone through February 28, 2012 at 416-849-0833 or toll free 1-855-859-2056, password 85400106. A webcast of the presentation and an audio file will be available at www.cpr.ca under "Invest In CP" tab.

Non-GAAP Measures

We present non-GAAP measures and cash flow information to provide a basis for evaluating underlying earnings and liquidity trends in our business that can be compared with the results of our operations in prior periods.  These non-GAAP measures exclude significant items that are not among our normal ongoing revenues and operating expenses.  They have no standardized meaning and are not defined by GAAP and, therefore, are unlikely to be comparable to similar measures presented by other companies.

Diluted earnings per share, excluding significant items provides management with a measure of earnings on a per share basis that can help in a multi-period assessment of long-term profitability and also allows management and other external users of our consolidated financial statements to compare profitability on a long-term basis with that of our peers.  U.S. GAAP reported full year diluted earnings per share in 2012 was $2.79.  Diluted earnings per share, excluding significant items was $4.34, which excludes the fourth quarter significant items discussed above as well as an additional $0.35 related to management transition costs, advisory fees related to shareholder matters and an Ontario statutory tax rate change.  U.S. GAAP reported full year diluted earnings per share in 2011 was $3.34.  Diluted earnings per share, excluding significant items was $3.15, which excludes advisory fees related to shareholder matters and a significant favourable tax item.  Operating ratio, excluding significant items provides a measure of the profitability of the railway on an ongoing basis.  It provides the percentage of revenues used to operate the railway on an ongoing basis as it excludes significant items.

For further information regarding non-GAAP measures see our Management's Discussion and Analysis for the third quarter of 2012 or the document Non-GAAP Measures on our web site at www.cpr.ca.

Note on forward-looking information

This news release contains certain forward-looking statements relating but not limited to our operations, anticipated financial performance, planned capital expenditures, and business prospects.  Undue reliance should not be placed on forward-looking information as actual results may differ materially. To the extent that we have provided guidance that contains non-GAAP financial measures, we may not be able to provide a reconciliation to the GAAP measure due to unknown variables and uncertainty related to future results.

By its nature, CP's forward-looking information involves numerous assumptions, inherent risks and uncertainties, including but not limited to the following factors: changes in business strategies; general North American and global economic, credit and business conditions; risks in agricultural production such as weather conditions and insect populations; the availability and price of energy commodities; the effects of competition and pricing pressures; industry capacity; shifts in market demand; inflation; changes in laws and regulations, including regulation of rates; changes in taxes and tax rates; potential increases in maintenance and operating costs; uncertainties of investigations, proceedings or other types of claims and litigation; labour disputes; risks and liabilities arising from derailments; transportation of dangerous goods; timing of completion of capital and maintenance projects; currency and interest rate fluctuations; effects of changes in market conditions and discount rates on the financial position of pension plans and investments; and various events that could disrupt operations, including severe weather, droughts, floods, avalanches and earthquakes as well as security threats and governmental response to them, and technological changes.  Other risks are detailed from time to time in reports filed by CP with securities regulators in Canada and the United States.  Reference should be made to "Management's Discussion and Analysis" in CP's annual and interim reports, Annual Information Form and Form 40-F.

Except as required by law, CP undertakes no obligation to update publicly or otherwise revise any forward-looking information, whether as a result of new information, future events or otherwise.

About Canadian Pacific

Canadian Pacific (TSX:CP)(NYSE:CP) is a transcontinental railway in Canada and the United States with direct links to eight major ports, including Vancouver and Montreal, providing North American customers a competitive rail service with access to key markets in every corner of the globe. CP is a low-cost provider that 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 Canadian Pacific.


CONSOLIDATED STATEMENTS OF INCOME     
(in millions of Canadian dollars, except per share data)
(unaudited)

        For the three months
ended December 31
    For the year
ended December 31
        2012     2011     2012     2011
Revenues                      
  Freight $ 1,464    $ 1,375    $ 5,550    $ 5,052 
  Other   38      33      145      125 
Total revenues   1,502      1,408      5,695      5,177 
Operating expenses                      
  Compensation and benefits   378      389      1,506      1,426 
  Fuel   256      267      999      968 
  Materials   60      58      238      243 
  Equipment rents   48      51      206      209 
  Depreciation and amortization   140      123      539      490 
  Purchased services and other   242      217      940      874 
  Asset impairment (Note 2)   265          265     
  Labour restructuring (Note 3)   53          53     
Total operating expenses   1,442      1,105      4,746      4,210 
                         
Operating income   60      303      949      967 
Less:                      
  Other income and charges       10      37      18 
  Net interest expense    69      61      276      252 
                           
(Loss) income before income tax expense   (12)     232      636      697 
                           
Income tax (recovery) expense   (27)     11      152      127 
Net income $ 15    $ 221    $ 484    $ 570 
                         
                         
Earnings per share                      
  Basic earnings per share $ 0.08    $ 1.31    $ 2.82    $ 3.37 
  Diluted earnings per share $ 0.08    $ 1.30    $ 2.79    $ 3.34 
                           
Weighted-average number of shares (millions)                      
  Basic   173.3      169.8      171.8      169.5 
  Diluted   174.7      170.8      173.2      170.6 
                           
Dividends declared per share $ 0.3500    $ 0.3000    $ 1.3500    $ 1.1700 
                           
See notes to interim consolidated financial information.                      

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions of Canadian dollars)
(unaudited)

          For the three months
ended December 31
    For the year
ended December 31
          2012      2011      2012      2011 
Net income $ 15    $ 221    $ 484    $ 570 
  Net (loss) gain in foreign currency translation 
adjustments, net of hedging activities
  (1)         11     
  Change in derivatives designated as cash flow hedges   (2)     (1)         (7)
  Change in defined benefit pension and post-retirement 
plans
  (211)     (1,000)     (50)     (883)
  Other comprehensive loss before income taxes   (214)     (993)     (30)     (890)
  Income tax recovery on above items   58    250             240 
  Equity accounted investments    (2)         (2)    
Other comprehensive loss   (158)   (743)     (32)   (650)
Comprehensive (loss) income  $ (143)   $ (522)   $ 452    $ (80)
                         
See notes to interim consolidated financial information.                      

 

CONSOLIDATED BALANCE SHEETS
(in millions of Canadian dollars)
(unaudited)

 
 
   
   
December 31
2012 
 
 
December 31
2011 
Assets          
Current assets          
  Cash and cash equivalents  $ 333    $ 47 
  Accounts receivable, net   546      518 
  Materials and supplies   136      138 
  Deferred income taxes   254      101 
  Other current assets   60      52 
        1,329      856 
               
Investments  (Note 2)   83      167 
Net properties (Note 2)   13,013      12,752 
Goodwill and intangible assets (Note 2)   161      192 
Other assets    141      143 
Total assets $ 14,727    $ 14,110 
               
Liabilities and shareholders' equity          
Current liabilities          
  Short-term borrowing $   $ 27 
  Accounts payable and accrued liabilities (Note 3)   1,176      1,133 
  Long-term debt maturing within one year   54      50 
        1,230      1,210 
               
Pension and other benefit liabilities   1,366      1,372 
Other long-term liabilities (Note 3)   306      365 
Long-term debt   4,636      4,695 
Deferred income taxes   2,092      1,819 
Total liabilities   9,630      9,461 
               
Shareholders' equity          
  Share capital   2,127      1,854 
  Additional paid-in capital    41      86 
  Accumulated other comprehensive loss   (2,768)     (2,736)
  Retained earnings   5,697      5,445 
        5,097      4,649 
Total liabilities and shareholders' equity $ 14,727    $ 14,110 
               
See notes to interim consolidated financial information.          

 

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions of Canadian dollars)
(unaudited)

          For the three months
ended December 31
  For the year
ended December 31
            2012     2011     2012     2011
Operating activities                      
  Net income $ 15    $ 221    $ 484    $ 570 
    Reconciliation of net income to cash provided by (used in)
operating activities:
                     
      Depreciation and amortization   140      123      539      490 
      Deferred income taxes   (22)     68      140      187 
      Pension funding in excess of expense   (17)     (607)     (61)     (647)
      Asset impairment (Note 2)   265          265     
      Labour restructuring, net (Note 3)   50          50     
      Other operating activities, net     (3)     (65)     (84)     (112)
      Change in non-cash working capital balances related to 
operations 
  41      99      (5)     24 
Cash provided by (used in) operating activities   469      (161)     1,328      512 
                               
Investing activities                      
  Additions to properties   (336)     (400)     (1,148)     (1,104)
  Proceeds from the sale of properties and other assets       30      145      71 
  Other   (7)     (4)     (8)     (11)
Cash used in investing activities   (336)     (374)     (1,011)     (1,044)
                               
Financing activities                      
  Dividends paid   (61)     (51)     (223)     (193)
  Issuance of common shares   62      16      198      29 
  Issuance of long-term debt       757      71      757 
  Repayment of long-term debt   (9)     (257)     (50)     (401)
  Net increase (decrease) in short-term borrowing       28      (27)     28 
  Other       (3)         (3)
Cash (used in) provided by financing activities   (7)     490      (30)     217 
                               
Effect of foreign currency fluctuations on U.S. dollar-                      
denominated cash and cash equivalents   -      (5)     (1)     1 
Cash position                      
  Increase (decrease) in cash and cash equivalents   126      (50)     286      (314)
  Cash and cash equivalents at beginning of period    207      97      47      361 
Cash and cash equivalents at end of period $ 333    $ 47    $ 333    $ 47 
                               
Supplemental disclosures of cash flow information:                      
  Income taxes paid (refunded)  $   $   $ (3)   $
  Interest paid $ 84    $ 91    $ 278    $ 271 
                               
See notes to interim consolidated financial information.                      

 

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(in millions of Canadian dollars, except common share amounts)
(unaudited)

    Common
shares (in
millions)
    Share
capital
  Additional
paid-in
capital
  Accumulated
other
comprehensive
loss
  Retained
earnings
  Total
shareholders'
equity
Balance at January 1, 2012 170.0   $ 1,854 $ 86  $ (2,736) $ 5,445  $ 4,649 
Net income  -     -       484    484 
Other comprehensive loss -     -     (32)     (32)
Dividends declared -     -       (232)   (232)
Effect of stock-based compensation expense -     -   25        25 
Shares issued under stock option plans 3.9     273   (70)       203 
Balance at December 31, 2012 173.9   $ 2,127 $ 41  $ (2,768) $ 5,697  $ 5,097 
                           
    Common
shares (in
millions)
    Share
capital
  Additional
paid-in
capital
  Accumulated
other
comprehensive
loss 
  Retained
earnings
  Total
shareholders'
equity
Balance at January 1, 2011 169.2   $ 1,813 $ 24  $ (2,086) $ 5,073  $ 4,824 
Net income  -     -       570    570 
Other comprehensive loss -     -     (650)     (650)
Dividends declared -     -       (198)   (198)
Effect of stock-based compensation expense -     -   16        16 
Changes to stock-based compensation awards -     -   57        57 
Shares issued under stock option plans 0.8     41   (11)       30 
Balance at December 31, 2011 170.0   $ 1,854 $ 86  $ (2,736) $ 5,445  $ 4,649 
                           
See notes to interim consolidated financial information.          

 

NOTES TO INTERIM CONSOLIDATED FINANCIAL INFORMATION
December 31, 2012
(unaudited)

1 Basis of presentation

This unaudited interim consolidated financial information of Canadian Pacific Railway Limited ("CP", or "the Company") reflects management's estimates and assumptions that are necessary for its fair presentation in conformity with accounting principles generally accepted in the United States of America ("GAAP").  This information does not include all disclosures required under GAAP for annual and interim financial statements and should be read in conjunction with the 2011 consolidated financial statements and 2012 consolidated interim financial statements.  The accounting policies used are consistent with the accounting policies used in preparing the 2011 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 necessary to present fairly such information.

2  Asset impairment

(in millions of Canadian dollars) For the three
months ended
December 31, 2012
   
Powder River Basin impairment and other investment(1) (a) $ 185
Impairment loss on locomotives (b)   80
Asset impairment, before tax     $ 265
             
(1)Includes impairment of other investment of $5 million            

(a) Powder River Basin impairment

As part of the acquisition of Dakota, Minnesota & Eastern Railroad Corporation ("DM&E") in 2007, CP acquired the option to build a 260 mile extension of its network into coal mines in the Powder River Basin ("PRB").

Due to continued deterioration in the market for domestic thermal coal, including a sharp deterioration in 2012, in the fourth quarter of 2012 CP deferred plans to extend its rail network into the PRB coal mines indefinitely.  The amount of the impairment was $180 million ($107 million after tax).  The impairment was comprised of the following and was charged against income as an "Asset impairment":

             
(in millions of Canadian dollars) For the three
months ended
December 31, 2012
           
Option impairment       $ 26
Construction plans, including capitalized interest         134
Land, land option appraisals, including capitalized interest         20
Total impairment       $ 180

(b) Impairment loss on locomotives

In the fourth quarter of 2012, CP reached a decision to dispose of a certain series of locomotives to improve operating efficiencies, and accordingly performed an impairment test on these assets.  The impairment test determined that the net book value of these locomotives at the date of the impairment test was $80 million higher than their estimated fair value.  The impairment charge of $80 million ($59 million after tax) was recorded as an "Asset impairment" to be consistent with CP's policy to record a gain or loss for the sale or retirement of larger groups of depreciable assets that are unusual, and were not anticipated in depreciation studies.

3  Labour restructuring 

In the fourth quarter of 2012, CP recorded a charge of $53 million ($39 million after tax) for a labour restructuring initiative which was included in "Labour restructuring" in the Consolidated Statements of Income, and "Accounts payable and accrued liabilities" and "Other long-term liabilities" in the Consolidated Balance Sheets.  The resulting position reductions are expected to be completed by the end of 2014.

Summary of Rail Data  
                               
Fourth Quarter         Year
  2012      2011  Fav/(Unfav)         %    Financial (millions, except per share data)     2012      2011  Fav/(Unfav)      % 
                               
                      Revenues                      
$ 1,464    $ 1,375    $ 89      Freight revenue   $ 5,550    $ 5,052    $ 498  10 
  38      33      15      Other revenue     145      125      20  16 
  1,502      1,408      94    Total revenues     5,695      5,177      518  10 
                                               
                                               
                      Operating expenses                      
  378      389      11      Compensation and benefits     1,506      1,426      (80) (6)
  256      267      11      Fuel     999      968      (31) (3)
  60      58      (2) (3)     Materials     238      243     
  48      51          Equipment rents     206      209     
  140      123      (17) (14)     Depreciation and amortization     539      490      (49) (10)
  242      217      (25) (12)     Purchased services and other     940      874      (66) (8)
  265          (265)     Asset impairment     265          (265)
  53          (53)     Labour restructuring     53          (53)
  1,442      1,105      (337) (30)   Total operating expenses (OE)     4,746      4,210      (536) (13)
                                               
                                               
  60      303      (243) (80)   Operating income     949      967      (18) (2)
                                               
                      Less:                      
                                               
      10      70      Other income and charges     37      18      (19) (106)
  69      61      (8) (13)     Net interest expense     276      252      (24) (10)
                                               
                                               
  (12)     232      (244) (105)   (Loss) income before income tax expense     636      697      (61) (9)
                                               
  (27)     11      38  345      Income tax (recovery) expense     152      127      (25) (20)
                                               
                                               
$ 15    $ 221    $ (206) (93)   Net income   $ 484    $ 570    $ (86) (15)
                                               
                                               
  96.0      78.5      (17.5) (1,750) bps   Operating ratio (%)     83.3      81.3      (2.0) (200) bps
                                               
                                               
$ 0.08    $ 1.31    $ (1.23) (94)     Basic earnings per share   $ 2.82    $ 3.37    $ (0.55) (16)
                                               
                                               
$ 0.08    $ 1.30    $ (1.22) (94)     Diluted earnings per share   $ 2.79    $ 3.34    $ (0.55) (16)
                                               
                                               
                      Shares Outstanding                      
                                               
  173.3      169.8      3.5      Weighted average number of shares
outstanding (millions)
    171.8      169.5      2.3 
                                               
  174.7      170.8      3.9      Weighted average number of diluted shares
outstanding (millions)
    173.2      170.6      2.6 
                                               
                                               
                      Foreign Exchange                      
                                               
  1.01      0.98      (0.03) (3)     Average foreign exchange rate
(US$/Canadian$)
    1.00      1.01      0.01 
                                               
  0.99      1.02      (0.03) (3)     Average foreign exchange rate
(Canadian$/US$)
    1.00      0.99      0.01 

Summary of Rail Data (Page 2)
                                                 
  Fourth Quarter             Year
2012    2011    Fav/(Unfav)   %           2012    2011    Fav/(Unfav)   %
                                                 
                      Commodity Data                      
                                                 
                        Freight Revenues (millions)                      
$ 355    $ 323    $ 32    10        - Grain   $ 1,172    $ 1,100    $ 72   
  156      158      (2)   (1)       - Coal     602      556      46   
  133      133              - Sulphur and fertilizers     520      549      (29)   (5)
  335      288      47    16        - Industrial and consumer products     1,268      1,017      251    25 
  99      94              - Automotive     425      338      87    26 
  46      47      (1)   (2)       - Forest products     193      189       
  340      332              - Intermodal     1,370      1,303      67   
                                                 
$ 1,464    $ 1,375    $ 89        Total Freight Revenues   $ 5,550    $ 5,052    $ 498    10 
                                                 
                        Millions of Revenue Ton-Miles (RTM)                      
  9,628      9,111      517          - Grain     33,082      32,481      601   
  5,809      5,860      (51)   (1)       - Coal     22,375      21,041      1,334   
  3,838      4,899      (1,061)   (22)       - Sulphur and fertilizers     17,058      20,468      (3,410)   (17)
  8,347      6,478      1,869    29        - Industrial and consumer products     30,469      24,122      6,347    26 
  561      535      26          - Automotive     2,482      2,080      402    19 
  1,129      1,176      (47)   (4)       - Forest products     4,713      4,960      (247)   (5)
  6,217      6,025      192          - Intermodal     24,853      23,907      946   
                                                 
  35,529      34,084      1,445        Total RTMs     135,032      129,059      5,973   
                                                 
                        Freight Revenue per RTM (cents)                      
  3.69      3.55      0.14          - Grain     3.54      3.39      0.15   
  2.69      2.70      (0.01)         - Coal     2.69      2.64      0.05   
  3.47      2.71      0.76    28        - Sulphur and fertilizers     3.05      2.68      0.37    14 
  4.01      4.45      (0.44)   (10)       - Industrial and consumer products     4.16      4.22      (0.06)   (1)
  17.65      17.57      0.08          - Automotive     17.12      16.25      0.87   
  4.07      4.00      0.07          - Forest products     4.10      3.81      0.29   
  5.47      5.51      (0.04)   (1)       - Intermodal     5.51      5.45      0.06   
                                                 
  4.12      4.03      0.09        Total Freight Revenue per RTM     4.11      3.91      0.20   
                                                 
                        Carloads (thousands)                      
  122      121              - Grain     433      450      (17)   (4)
  88      87              - Coal     337      313      24   
  43      48      (5)   (10)       - Sulphur and fertilizers     177      199      (22)   (11)
  119      114              - Industrial and consumer products     469      421      48    11 
  39      39              - Automotive     162      145      17    12 
  16      17      (1)   (6)       - Forest products     67      72      (5)   (7)
  253      250              - Intermodal     1,024      997      27   
                                                 
  680      676            Total Carloads     2,669      2,597      72   
                                                 
                        Freight Revenue per Carload                      
$ 2,910    $ 2,669    $ 241          - Grain   $ 2,707    $ 2,444    $ 263    11 
  1,773      1,816      (43)   (2)       - Coal     1,786      1,776      10   
  3,093      2,771      322    12        - Sulphur and fertilizers     2,938      2,759      179   
  2,815      2,526      289    11        - Industrial and consumer products     2,704      2,416      288    12 
  2,538      2,410      128          - Automotive     2,623      2,331      292    13 
  2,875      2,765      110          - Forest products     2,881      2,625      256    10 
  1,344      1,328      16          - Intermodal     1,338      1,307      31   
                                                 
$ 2,153    $ 2,034    $ 119        Total Freight Revenue per Carload   $ 2,079    $ 1,945    $ 134   

Summary of Rail Data (Page 3)
                                 
Fourth Quarter       Year
 2012    2011 (1)    Fav/(Unfav)    %        2012    2011 (1)    Fav/(Unfav)    %
                                 
                Operations Performance                
                                 
66,204    65,472    732      Freight gross ton-miles (millions)   254,354    247,955    6,399   
10,046    10,611    (565)   (5)   Train miles (thousands)   40,270    40,145    125   
7,014    6,587    427      Average train weight - excluding local traffic (tons)   6,709    6,593    116   
6,132    5,654    478      Average train length - excluding local traffic (feet)   5,838    5,665    173   
24.0    23.4    0.6      Average train speed - AAR definition (mph)   24.4    21.3    3.1    15 
17.3    17.7    0.4      Average terminal dwell - AAR definition (hours)   17.6    19.9    2.3    12 
201.7    183.5    18.2    10    Car miles per car day   202.3    160.1    42.2    26 
                                 
197.1    175.1    22.0    13    Locomotive productivity (daily average GTMs/active HP)   179.8    166.7    13.1   
4.7    4.5    0.2      Employee productivity (million GTMs/expense employee)   17.4    17.5    (0.1)   (1)
                                 
 1.14     1.17     0.03        Fuel efficiency(2)    1.15     1.18     0.03     
 74.4     76.0     1.6        U.S. gallons of locomotive fuel consumed (millions)(3)    289.2     290.8     1.6     
3.47    3.45    (0.02)   (1)   Average fuel price (U.S. dollars per U.S. gallon)   3.45    3.38    (0.07)   (2)
                                 
 2.18     1.69     (0.49)    (29)   OE per GTM (cents)(4)    1.87     1.70     (0.17)    (10)
 1.70     1.72     0.02        OE per GTM - Adjusted (cents)(5)    1.72     1.71     (0.01)    (1)
                                 
 16,282     16,616     334        Average number of active employees - Total(6)    16,657     16,097     (560)    (3)
 14,108     14,459     351        Average number of active employees - Expense(6)    14,594     14,169     (425)    (3)
 15,671     16,428     757        Number of employees at end of period - Total(6)    15,671     16,428     757     
 13,945     14,764     819        Number of employees at end of period - Expense(6)    13,945     14,764     819     
                                 
42.2    46.7    4.5    10    Average daily active cars on-line (thousands)   40.9    51.4    10.5    20 
952    1,085    133    12    Average daily active road locomotives on-line   1,007    1,085    78   
                                 
                                 
                Safety                
                                 
1.89    1.70    (0.19)   (11)   FRA personal injuries per 200,000 employee-hours   1.46    1.85    0.39    21 
1.68    1.40    (0.28)   (20)   FRA train accidents per million train-miles   1.67    1.88    0.21    11 

(1) Certain prior period figures have been revised to conform with current presentation or have been updated to reflect new information.
(2)  Fuel efficiency is defined as U.S. gallons of locomotive fuel consumed per 1,000 GTMs - freight and yard.
(3)  Includes gallons of fuel consumed from freight, yard and commuter service but excludes fuel used in capital projects and other non-freight activities.
(4) Gross Ton-Mile (GTM) is the movement of the combined tons (freight car tare, inactive locomotive tare, and contents) a distance of one mile.
(5)      OE per GTM - Adjusted is calculated consistently with OE per GTM except for the exclusion of net gains on land sales, to eliminate the volatile nature of these sales, fuel price impact, to remove the volatility of fuel prices and to provide comparative fuel expenses at the 2011 fuel price, CEO transition, asset impairment and labour restructuring costs, to eliminate the impact of these significant items that are not among our normal ongoing operating expenses.  Net gains on land sales were $1 million and $20 million for the three months ended December 31, 2012 and 2011, respectively, and $23 million and $25 million for the year ended December 31, 2012 and 2011, respectively.  The impact in fuel price, net of hedging and B.C. carbon tax, was unfavourable $2 million for the three months ended December 31, 2012 and unfavourable $25 million for the year ended December 31, 2012. CEO transition costs were nil for the three months ended December 31, 2012 and $42 million for the year ended December 31, 2012.  Asset impairment costs were $265 million for the three months and year ended December 31, 2012.  Labour restructuring costs were $53 million for the three months and year ended December 31, 2012.
(6)     An employee is defined as an individual who has worked more than 40 hours in a standard biweekly pay period.  This excludes part time employees, contractors, consultants, and trainees.

 

 

 

 

 

SOURCE: Canadian Pacific

For further information:

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Ed Greenberg 
Canadian Pacific 
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Janet Weiss
Canadian Pacific
Tel.: (403) 319-3233
e-mail:  investor@cpr.ca