Canadian Pacific announces solid fourth-quarter operating performance
CALGARY, Jan. 29, 2013 /PRNewswire/ - 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 | 3 | 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) | 8 | 11 | - | |||||||||
| Change in derivatives designated as cash flow hedges | (2) | (1) | 9 | (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 | 7 | 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 | 1 | (3) | 1 | (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) | $ | 5 | $ | 1 | $ | (3) | $ | 4 | ||||||
| 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 | 6 | Freight revenue | $ | 5,550 | $ | 5,052 | $ | 498 | 10 | |||||||||
| 38 | 33 | 5 | 15 | Other revenue | 145 | 125 | 20 | 16 | |||||||||||||||
| 1,502 | 1,408 | 94 | 7 | Total revenues | 5,695 | 5,177 | 518 | 10 | |||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| 378 | 389 | 11 | 3 | Compensation and benefits | 1,506 | 1,426 | (80) | (6) | |||||||||||||||
| 256 | 267 | 11 | 4 | Fuel | 999 | 968 | (31) | (3) | |||||||||||||||
| 60 | 58 | (2) | (3) | Materials | 238 | 243 | 5 | 2 | |||||||||||||||
| 48 | 51 | 3 | 6 | Equipment rents | 206 | 209 | 3 | 1 | |||||||||||||||
| 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: | |||||||||||||||||||||||
| 3 | 10 | 7 | 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 | 2 | Weighted average number of shares outstanding (millions) |
171.8 | 169.5 | 2.3 | 1 | |||||||||||||||
| 174.7 | 170.8 | 3.9 | 2 | Weighted average number of diluted shares outstanding (millions) |
173.2 | 170.6 | 2.6 | 2 | |||||||||||||||
| Foreign Exchange | |||||||||||||||||||||||
| 1.01 | 0.98 | (0.03) | (3) | Average foreign exchange rate (US$/Canadian$) |
1.00 | 1.01 | 0.01 | 1 | |||||||||||||||
| 0.99 | 1.02 | (0.03) | (3) | Average foreign exchange rate (Canadian$/US$) |
1.00 | 0.99 | 0.01 | 1 | |||||||||||||||
| 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 | 7 | ||||||||||
| 156 | 158 | (2) | (1) | - Coal | 602 | 556 | 46 | 8 | ||||||||||||||||
| 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 | 5 | 5 | - Automotive | 425 | 338 | 87 | 26 | ||||||||||||||||
| 46 | 47 | (1) | (2) | - Forest products | 193 | 189 | 4 | 2 | ||||||||||||||||
| 340 | 332 | 8 | 2 | - Intermodal | 1,370 | 1,303 | 67 | 5 | ||||||||||||||||
| $ | 1,464 | $ | 1,375 | $ | 89 | 6 | Total Freight Revenues | $ | 5,550 | $ | 5,052 | $ | 498 | 10 | ||||||||||
| Millions of Revenue Ton-Miles (RTM) | ||||||||||||||||||||||||
| 9,628 | 9,111 | 517 | 6 | - Grain | 33,082 | 32,481 | 601 | 2 | ||||||||||||||||
| 5,809 | 5,860 | (51) | (1) | - Coal | 22,375 | 21,041 | 1,334 | 6 | ||||||||||||||||
| 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 | 5 | - 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 | 3 | - Intermodal | 24,853 | 23,907 | 946 | 4 | ||||||||||||||||
| 35,529 | 34,084 | 1,445 | 4 | Total RTMs | 135,032 | 129,059 | 5,973 | 5 | ||||||||||||||||
| Freight Revenue per RTM (cents) | ||||||||||||||||||||||||
| 3.69 | 3.55 | 0.14 | 4 | - Grain | 3.54 | 3.39 | 0.15 | 4 | ||||||||||||||||
| 2.69 | 2.70 | (0.01) | - | - Coal | 2.69 | 2.64 | 0.05 | 2 | ||||||||||||||||
| 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 | 5 | ||||||||||||||||
| 4.07 | 4.00 | 0.07 | 2 | - Forest products | 4.10 | 3.81 | 0.29 | 8 | ||||||||||||||||
| 5.47 | 5.51 | (0.04) | (1) | - Intermodal | 5.51 | 5.45 | 0.06 | 1 | ||||||||||||||||
| 4.12 | 4.03 | 0.09 | 2 | Total Freight Revenue per RTM | 4.11 | 3.91 | 0.20 | 5 | ||||||||||||||||
| Carloads (thousands) | ||||||||||||||||||||||||
| 122 | 121 | 1 | 1 | - Grain | 433 | 450 | (17) | (4) | ||||||||||||||||
| 88 | 87 | 1 | 1 | - Coal | 337 | 313 | 24 | 8 | ||||||||||||||||
| 43 | 48 | (5) | (10) | - Sulphur and fertilizers | 177 | 199 | (22) | (11) | ||||||||||||||||
| 119 | 114 | 5 | 4 | - 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 | 3 | 1 | - Intermodal | 1,024 | 997 | 27 | 3 | ||||||||||||||||
| 680 | 676 | 4 | 1 | Total Carloads | 2,669 | 2,597 | 72 | 3 | ||||||||||||||||
| Freight Revenue per Carload | ||||||||||||||||||||||||
| $ | 2,910 | $ | 2,669 | $ | 241 | 9 | - Grain | $ | 2,707 | $ | 2,444 | $ | 263 | 11 | ||||||||||
| 1,773 | 1,816 | (43) | (2) | - Coal | 1,786 | 1,776 | 10 | 1 | ||||||||||||||||
| 3,093 | 2,771 | 322 | 12 | - Sulphur and fertilizers | 2,938 | 2,759 | 179 | 6 | ||||||||||||||||
| 2,815 | 2,526 | 289 | 11 | - Industrial and consumer products | 2,704 | 2,416 | 288 | 12 | ||||||||||||||||
| 2,538 | 2,410 | 128 | 5 | - Automotive | 2,623 | 2,331 | 292 | 13 | ||||||||||||||||
| 2,875 | 2,765 | 110 | 4 | - Forest products | 2,881 | 2,625 | 256 | 10 | ||||||||||||||||
| 1,344 | 1,328 | 16 | 1 | - Intermodal | 1,338 | 1,307 | 31 | 2 | ||||||||||||||||
| $ | 2,153 | $ | 2,034 | $ | 119 | 6 | Total Freight Revenue per Carload | $ | 2,079 | $ | 1,945 | $ | 134 | 7 |
||||||||||
| 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 | 1 | Freight gross ton-miles (millions) | 254,354 | 247,955 | 6,399 | 3 | ||||||||
| 10,046 | 10,611 | (565) | (5) | Train miles (thousands) | 40,270 | 40,145 | 125 | - | ||||||||
| 7,014 | 6,587 | 427 | 6 | Average train weight - excluding local traffic (tons) | 6,709 | 6,593 | 116 | 2 | ||||||||
| 6,132 | 5,654 | 478 | 8 | Average train length - excluding local traffic (feet) | 5,838 | 5,665 | 173 | 3 | ||||||||
| 24.0 | 23.4 | 0.6 | 3 | Average train speed - AAR definition (mph) | 24.4 | 21.3 | 3.1 | 15 | ||||||||
| 17.3 | 17.7 | 0.4 | 2 | 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 | 8 | ||||||||
| 4.7 | 4.5 | 0.2 | 4 | Employee productivity (million GTMs/expense employee) | 17.4 | 17.5 | (0.1) | (1) | ||||||||
| 1.14 | 1.17 | 0.03 | 3 | Fuel efficiency(2) | 1.15 | 1.18 | 0.03 | 3 | ||||||||
| 74.4 | 76.0 | 1.6 | 2 | U.S. gallons of locomotive fuel consumed (millions)(3) | 289.2 | 290.8 | 1.6 | 1 | ||||||||
| 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 | 1 | OE per GTM - Adjusted (cents)(5) | 1.72 | 1.71 | (0.01) | (1) | ||||||||
| 16,282 | 16,616 | 334 | 2 | Average number of active employees - Total(6) | 16,657 | 16,097 | (560) | (3) | ||||||||
| 14,108 | 14,459 | 351 | 2 | Average number of active employees - Expense(6) | 14,594 | 14,169 | (425) | (3) | ||||||||
| 15,671 | 16,428 | 757 | 5 | Number of employees at end of period - Total(6) | 15,671 | 16,428 | 757 | 5 | ||||||||
| 13,945 | 14,764 | 819 | 6 | Number of employees at end of period - Expense(6) | 13,945 | 14,764 | 819 | 6 | ||||||||
| 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 | 7 | ||||||||
| 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
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