(Source: Canadian Pacific Railway press release, January 29, 2013)
CALGARY, Alberta — Canadian Pacific Railway Limited announced its fourth-quarter 2012 results today. CP’s diluted earnings per share, excluding significant items 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 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.
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, 2013 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.