(Source: Canadian Pacific Railway press release, April 27, 2022)
CALGARY — Canadian Pacific Railway Limited (the “Company”) today announced first-quarter operating results.
In light of the financial complexity of acquiring Kansas City Southern (“KCS”) into voting trust on Dec. 14, 2021, CP is reporting additional financial metrics, including Core adjusted income1 and Core adjusted diluted earnings per share1 (“EPS”). These metrics have been added to provide more transparency by isolating for the impact of KCS purchase accounting. KCS purchase accounting represents the amortization of the difference in value between the consideration paid to acquire KCS and the underlying carrying value of the net assets of KCS immediately prior to the acquisition by the Company.
“I’m proud of the way CP’s team of professional railroaders managed the difficult operating environment they faced in the first quarter of 2022,” said Keith Creel, CP President and CEO. “The quarter reflected the impact of last year’s drought on Canadian grain volumes, harsh winter operating conditions and the effects of a work stoppage.”
First-quarter highlights
- Revenues decreased by 6 percent to $1.84 billion from $1.96 billion last year
- Reported Operating Ratio (“OR”) increased by 1,070 basis points to 70.9 percent from 60.2 percent
- Adjusted OR increased by 1,130 basis points to 69.8 percent
- Reported diluted EPS was $0.63, a 30 percent decrease from last year
- Core adjusted diluted EPS1, excluding significant items and KCS purchase accounting, was $0.67
“CP continues to see a strong, supportive macroeconomic environment and is focused on providing customers with creative service offerings,” added Creel. “With a difficult quarter behind us, we are building momentum, which I fully expect will continue to carry through the remainder of 2022.”
CP is continuing its work preparing to create the first single-line rail network linking the U.S., Mexico and Canada by combining KCS, subject to U.S. Surface Transportation Board approval.
“The demand for North American goods and commodities only continues to grow and highlight the need for new single-line routes and outlets to reach global markets,” Creel said. “Our excitement about the opportunities ahead with the combined companies continues to grow.”