(Source: Canadian Pacific Railway press release, January 26, 2012)
CALGARY, Alberta — Canadian Pacific Railway Limited announced its fourth-quarter and full year 2011 results today. Fourth-quarter CP reported net income of $221 million and diluted earnings per share of $1.30, inclusive of $0.22 per share income tax benefit. For the full year, the company reported net income of $570 million and diluted earnings per share of $3.34.
“We exited 2011 having made meaningful progress on the three pillars of our Multi-Year Plan: driving growth, expanding network capacity to safely and efficiently support higher volumes and controlling costs. During the fourth quarter we delivered record asset velocity, a direct link to better service, positioning us for a lower operating ratio,” said Fred Green, President and Chief Executive Officer. “We begin 2012 with operating momentum, excellent service levels and a stronger, more resilient rail network. We are aggressively executing on our Multi-Year Plan, which is instrumental in creating long-term value for shareholders.”
RECORD OPERATING PERFORMANCE
• Car miles per car day and terminal dwell both improved 20 per cent during the quarter
• Active cars online improved 14 per cent while handling five per cent more gross ton miles (GTMs) during the quarter
• Fuel efficiency of 1.17 gallons per 1,000 GTMs, matching best ever fourth-quarter performance
• Train weights set new full year record
FOURTH-QUARTER 2011 RESULTS COMPARED WITH FOURTH-QUARTER 2010
• Total revenues were $1.4 billion, an increase of $114 million
• Operating expenses were $1.1 billion, an increase of $109 million
• Average fuel price increased 29 per cent to $3.45 U.S. dollars per U.S. gallon
• Operating income was $303 million, an increase of $5 million
• Net income was $221 million, an increase of $35 million
• Diluted earnings per share were $1.30 per share, an increase of $0.21 per share
FULL YEAR 2011 RESULTS COMPARED WITH FULL YEAR 2010
• Total revenues were $5.2 billion, an increase of $196 million
• Operating expenses were $4.2 billion, an increase of $345 million
• Average fuel price increased 35 per cent to $3.38 U.S. dollars per U.S. gallon
• Operating income was $967 million, a decrease of $149 million
• Net income was $570 million, a decrease of $81 million
• Diluted earnings per share were $3.34 per share, a decrease of $0.51 per share
• Made a pension prepayment of $600 million in 2011 and $650 million in 2010
• Increased dividends to shareholders by 11 per cent to $1.1700 per share
MULTI-YEAR PLAN
“Our operational metrics are a leading indicator of both customer satisfaction and financial results. The operational improvements we have already achieved will now begin to drive enhanced financial results in the first quarter of 2012 and, as we continue to execute on our Multi-Year Plan, further operational improvements will deliver financial benefits,” added Fred Green. “Given our recent market successes and operating trends, we can now with confidence, narrow our target operating ratio range to 70 to 72 per cent in three years and we have no intention of stopping there.”
2012 ASSUMPTIONS
Defined benefit pension contributions are currently estimated to be between $100 million and $125 million in each of the next few years, a decrease from previous estimates of $125 million to $150 million. These contribution levels reflect the Company’s intentions with respect to application of voluntary prepayments. Defined benefit pension expense for 2012 is expected to be $41 million. For 2013, defined benefit pension expense is expected to be approximately $125 million, assuming normal equity market returns and modest increases in bond yields in 2012.
CP plans to spend in the range of $1.1 billion to $1.2 billion on capital programs in 2012, as announced on January 17, 2012.
CP expects its tax rate to be in the 25 per cent to 27 per cent range in 2012.
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 26, 2012.
Toronto/International 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 “Invest In CP” tab.
A replay of the conference call will be available by phone through February 29, 2012 at (416) 849-0833 or toll free 1-855-859-2056, passcode 36730106. A webcast of the presentation and an audio file will be available at www.cpr.ca under “Invest In CP” tab.