Canadian Pacific to write-down Powder River Basin option
CALGARY, Dec. 3, 2012 /PRNewswire/ - Canadian Pacific (TSX:CP)(NYSE: CP) today announced it will take a fourth quarter pre-tax non-cash charge of approximately $180 million ($107 million after tax) on its option to build into the Powder River Basin (PRB).
When CP acquired the Dakota Minnesota & Eastern railroad in 2007, it also acquired the option to build a 260-mile extension of its network into coal mines in the PRB. Components of the charge include the option, engineering design costs, land and capitalized interest.
It is CP's intention to defer indefinitely plans to extend its rail network into the PRB coal mines based on continued deterioration in the market for domestic thermal coal, including a sharp deterioration in 2012.
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SOURCE Canadian Pacific