CALGARY,
July 27, 2011 /PRNewswire/ - Canadian
Pacific Railway Limited (TSX: CP) (NYSE: CP) announced its
second-quarter 2011 results today with reported net income of
$128.0 million and diluted earnings
per share of $0.75. Revenue and
expense results were unfavourably impacted by extensive
flooding.
"Throughout the second quarter we experienced difficult
operating conditions as a result of widespread and prolonged
flooding along our right of way. We had almost 90 separate
outages during the quarter and our engineering team worked as
swiftly as possible to bring the track back," stated Fred Green, CP President and Chief Executive
Officer. "We rerouted and detoured traffic over other
railways and incurred significantly higher operating costs to
ensure delivery of our customers' shipments. Repairs are now
complete and service levels are returning to normal."
SECOND-QUARTER 2011 RESULTS COMPARED WITH SECOND-QUARTER
2010
- Total revenues were $1.3 billion,
an increase of $30.3 million
- Operating expenses were $1.0
billion, an increase of $73.9
million
- Average fuel price increased 37 per cent to $3.50 U.S. dollars per U.S. gallon
- Operating income was $230.5
million, a decrease of $43.6
million
- Net income was $128.0 million, a
decrease of $38.6 million
- Diluted earnings per share were $0.75 per share, a decline of $0.23 per share
Note on forward-looking information
This news release contains certain forward-looking statements
relating but not limited to our operations, anticipated financial
performance and business prospects. Undue reliance should not be
placed on forward-looking information as actual results may differ
materially.
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; changes in
laws and regulations, including regulation of rates; changes in
taxes and tax rates; potential increases in maintenance and
operating costs; uncertainties of 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, including long-term
floating rate notes; and various events that could disrupt
operations, including severe weather conditions, security threats
and governmental response to them, and technological changes.
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) operates a North American
transcontinental railway providing freight transportation services,
logistics solutions and supply chain expertise. Incorporating
best-in-class technology and environmental practices, CP is
re-defining itself as a modern 21st century transportation company
built on safety, service reliability and operational efficiency.
Visit cpr.ca and see how Canadian Pacific is Driving the Digital
Railway.
CANADIAN PACIFIC RAILWAY LIMITED
CONSOLIDATED STATEMENTS OF INCOME
(in millions of Canadian dollars, except per share data)
(unaudited)
|
|
|
|
|
|
For the
three months
ended June 30 |
|
|
|
|
For the six
months
ended June 30 |
|
|
|
|
|
|
|
2011 |
|
|
|
2010 |
|
|
|
|
2011 |
|
|
|
2010 |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freight
Other |
|
|
|
$
|
|
1,233.2
31.3 |
|
$
|
|
1,202.2
32.0 |
|
|
$
|
|
2,368.4
59.5 |
|
$
|
|
2,340.4
60.6 |
|
|
|
|
|
|
|
1,264.5 |
|
|
|
1,234.2 |
|
|
|
|
2,427.9 |
|
|
|
2,401.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits
Fuel
Materials
Equipment rents
Depreciation and amortization
Purchased services and other |
|
|
|
|
|
336.1
237.4
57.4
53.6
122.2
227.3 |
|
|
|
349.7
177.9
51.0
54.9
123.3
203.3 |
|
|
|
|
700.6
463.1
129.0
105.0
244.5
446.0 |
|
|
|
703.5
359.6
115.0
103.9
244.5
393.8 |
|
|
|
|
|
|
|
1,034.0 |
|
|
|
960.1 |
|
|
|
|
2,088.2 |
|
|
|
1,920.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
|
|
|
230.5 |
|
|
|
274.1 |
|
|
|
|
339.7 |
|
|
|
480.7 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income and charges
Net interest expense |
|
|
|
|
|
(5.0)
62.5 |
|
|
|
(3.4)
64.8 |
|
|
|
|
(5.5)
126.7 |
|
|
|
(8.3)
131.5 |
|
Income before
income tax expense |
|
|
|
|
|
173.0 |
|
|
|
212.7 |
|
|
|
|
218.5 |
|
|
|
357.5 |
|
|
Income tax expense (Note 3) |
|
|
|
|
|
45.0 |
|
|
|
46.1 |
|
|
|
|
56.8 |
|
|
|
89.9 |
|
Net income |
|
|
|
$ |
|
128.0 |
|
$ |
|
166.6 |
|
|
$ |
|
161.7 |
|
$ |
|
267.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
(Note 4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
$ |
|
0.76 |
|
$ |
|
0.99 |
|
|
$ |
|
0.96 |
|
$ |
|
1.59 |
|
|
Diluted |
|
|
|
$ |
|
0.75 |
|
$ |
|
0.98 |
|
|
$ |
|
0.95 |
|
$ |
|
1.58 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares (millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
169.4 |
|
|
|
168.6 |
|
|
|
|
169.3 |
|
|
|
168.6 |
|
|
Diluted |
|
|
|
|
|
170.7 |
|
|
|
169.2 |
|
|
|
|
170.6 |
|
|
|
169.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per
share |
|
|
|
$ |
|
0.3000 |
|
$ |
|
0.2700 |
|
|
$ |
|
0.5700 |
|
$ |
|
0.5175 |
See notes to Consolidated Financial Statements.
CONSOLIDATED BALANCE SHEETS
(in millions of Canadian dollars)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
June 30
2011 |
|
|
|
|
December
31
2010 |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
Accounts receivable, net
Materials and supplies
Deferred income taxes
Other current assets |
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
267.8
508.9
137.3
124.3
69.3 |
|
|
|
$
|
360.6
459.0
114.1
222.3
47.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,107.6 |
|
|
|
|
1,203.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments
Net properties
Goodwill and intangible assets
Other assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
148.5
11,981.2
183.3
135.2 |
|
|
|
|
144.9
11,996.8
189.8
140.6 |
|
Total assets |
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
13,555.8 |
|
|
|
$ |
13,675.9 |
|
Liabilities and
shareholders' equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
Long-term debt maturing within one year |
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
991.3
278.8 |
|
|
|
$
|
1,007.8
281.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,270.1 |
|
|
|
|
1,289.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension and other benefit
liabilities
Other long-term liabilities
Long-term debt
Deferred income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,019.9
418.0
3,918.8
1,924.4 |
|
|
|
|
1,115.7
468.0
4,033.2
1,944.8 |
|
Total liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,551.2 |
|
|
|
|
8,851.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital
Additional paid-in capital
Accumulated other comprehensive loss
Retained earnings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,825.9
85.1
(2,044.6)
5,138.2 |
|
|
|
|
1,812.8
24.7
(2,085.8)
5,073.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,004.6 |
|
|
|
|
4,824.7 |
|
Total
liabilities and shareholders'
equity |
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
13,555.8 |
|
|
|
$ |
13,675.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies (Note 8)
See notes to Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions of Canadian dollars)
(unaudited)
|
|
|
|
|
For the three
months
ended June 30 |
|
|
|
For the six
months
ended June 30 |
|
|
|
|
|
|
|
2011 |
|
|
|
2010 |
|
|
|
|
2011 |
|
|
|
2010 |
|
Operating
activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
Reconciliation of net income to cash provided by
operating activities: |
|
|
|
$
|
|
128.0
|
|
$
|
|
166.6
|
|
|
$
|
|
161.7
|
|
$
|
|
267.6
|
|
|
|
Depreciation and amortization
Deferred income taxes
Pension funding in excess of expense (Note 7)
Other operating activities, net
Change in non-cash working capital balances related
to operations |
|
|
|
|
|
122.2
51.9
(13.2)
(15.6)
(61.0) |
|
|
|
123.3
43.5
(150.7)
(5.6)
10.0 |
|
|
|
|
244.5
59.8
(24.7)
(13.2)
(80.8) |
|
|
|
244.5
85.1
(160.0)
6.2
(72.0) |
|
|
Cash provided by operating
activities |
|
|
|
|
|
212.3 |
|
|
|
187.1 |
|
|
|
|
347.3 |
|
|
|
371.4 |
|
Investing
activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to properties
Proceeds from the sale of properties and other assets
Other |
|
|
|
|
|
(218.4)
14.5
(0.3) |
|
|
|
(168.0)
17.4
- |
|
|
|
|
(351.6)
20.1
(0.3) |
|
|
|
(258.8)
26.4
- |
|
|
Cash used in investing
activities |
|
|
|
|
|
(204.2) |
|
|
|
(150.6) |
|
|
|
|
(331.8) |
|
|
|
(232.4) |
|
Financing
activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid
Issuance of CP common shares
Collection of receivable from financial institution
Repayment of long-term debt
Other |
|
|
|
|
|
(45.7)
1.7
-
(5.6)
- |
|
|
|
(41.7)
3.9
219.8
(581.2)
0.2 |
|
|
|
|
(91.4)
10.8
-
(18.0)
- |
|
|
|
(83.4)
6.9
219.8
(590.3)
0.2 |
|
|
Cash used in financing
activities |
|
|
|
|
|
(49.6) |
|
|
|
(399.0) |
|
|
|
|
(98.6) |
|
|
|
(446.8) |
|
Effect of foreign
currency fluctuations on U.S. dollar-
denominated cash and cash equivalents |
|
|
|
|
|
(1.2) |
|
|
|
12.3 |
|
|
|
|
(9.7) |
|
|
|
2.3 |
|
Cash position |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease in cash and cash
equivalents
Cash and cash equivalents at beginning of period |
|
|
|
|
|
(42.7)
310.5 |
|
|
|
(350.2)
723.8 |
|
|
|
|
(92.8)
360.6 |
|
|
|
(305.5)
679.1 |
|
Cash and cash equivalents
at end of period |
|
|
|
$ |
|
267.8 |
|
$ |
|
373.6 |
|
|
$ |
|
267.8 |
|
$ |
|
373.6 |
|
Supplemental
disclosures of cash flow information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes paid |
|
|
|
$ |
|
3.6 |
|
$ |
|
3.2 |
|
|
$ |
|
3.5 |
|
$ |
|
5.0 |
|
|
Interest paid |
|
|
|
$ |
|
90.6 |
|
$ |
|
174.0 |
|
|
$ |
|
139.7 |
|
$ |
|
219.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See notes to Consolidated Financial Statements.
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, 2011 |
|
|
169.2 |
|
|
$1,812.8 |
|
$ 24.7 |
$(2,085.8) |
$5,073.0 |
$4,824.7 |
Net income |
|
|
- |
|
|
- |
|
- |
- |
161.7 |
161.7 |
Other comprehensive income |
|
|
- |
|
|
- |
|
- |
41.2 |
- |
41.2 |
Dividends declared |
|
|
- |
|
|
- |
|
- |
- |
(96.5) |
(96.5) |
Effect of stock-based compensation
expense |
|
|
- |
|
|
- |
|
10.3 |
- |
- |
10.3 |
Change to stock-based
compensation
awards (Note 6) |
|
|
- |
|
|
- |
|
51.9 |
- |
- |
51.9 |
Shares issued under stock option plans |
|
|
0.2 |
|
|
13.1 |
|
(1.8) |
- |
- |
11.3 |
Balance at June 30, 2011 |
|
|
169.4 |
|
|
$1,825.9 |
|
$ 85.1 |
$(2,044.6) |
$5,138.2 |
$5,004.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive
income |
Net income |
Comprehensive
income |
Comprehensive
income -
three months ended June 30, 2011 |
|
|
|
|
|
|
|
|
$ 19.9 |
$ 128.0 |
$ 147.9 |
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income -
six months ended June 30, 2011 |
|
|
|
|
|
|
|
|
$ 41.2 |
$ 161.7 |
$ 202.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
shares
(in millions) |
|
|
Share
capital |
|
Additional
paid-in
capital |
Accumulated
other
comprehensive
loss |
Retained
earnings |
Total
shareholders'
equity |
Balance at January 1, 2010 |
|
|
168.5 |
|
|
$1,771.1 |
|
$ 30.8 |
$(1,744.7) |
$4,600.9 |
$4,658.1 |
Net income |
|
|
- |
|
|
- |
|
- |
- |
267.6 |
267.6 |
Other comprehensive income |
|
|
- |
|
|
- |
|
- |
35.2 |
- |
35.2 |
Dividends declared |
|
|
- |
|
|
- |
|
- |
- |
(87.2) |
(87.2) |
Effect of stock-based compensation
expense |
|
|
- |
|
|
- |
|
0.8 |
- |
- |
0.8 |
Shares issued under stock option
plans |
|
|
0.2
|
|
|
9.7 |
|
(2.2) |
- |
- |
7.5 |
Balance at June 30, 2010 |
|
|
168.7
|
|
|
$1,780.8 |
|
$ 29.4 |
$(1,709.5) |
$4,781.3 |
$4,882.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive
income |
Net income |
Comprehensive
income |
Comprehensive
income -
three months ended June 30, 2010 |
|
|
|
|
|
|
|
|
$ 24.6 |
$ 166.6 |
$ 191.2 |
Comprehensive
income -
six months ended June 30, 2010 |
|
|
|
|
|
|
|
|
$ 35.2 |
$ 267.6 |
$ 302.8
|
See notes to Consolidated Financial Statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2011
(unaudited)
1 |
Basis of presentation |
|
|
|
These unaudited interim consolidated financial statements of
Canadian Pacific Railway Limited ("CP", "the Company" or "Canadian
Pacific Railway") reflect management's estimates and assumptions
that are necessary for their fair presentation in conformity with
accounting principles generally accepted in the United States of
America ("GAAP"). They do not include all disclosures
required under GAAP for annual financial statements and should be
read in conjunction with the 2010 consolidated financial
statements. The policies used are consistent with the
policies used in preparing the 2010 consolidated financial
statements. The Company's investments in which CP has
significant influence, which are not consolidated, are accounted
for using the equity method. |
|
|
|
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 statements include all adjustments (consisting solely of
normal recurring adjustments) necessary to present fairly such
information. Interim results are not necessarily indicative of the
results expected for the fiscal year. |
|
|
2 |
Accounting changes |
|
|
|
Fair value measurement and disclosure
In January 2010, the Financial Accounting Standards Board ("FASB")
amended the disclosure requirements related to fair value
measurements. Most of the new disclosures and clarifications
of existing disclosures were effective for interim and annual
reporting periods beginning after December 15, 2009, except for the
expanded disclosures in the Level 3 reconciliation, which are
effective for fiscal years beginning after December 15, 2010.
The Company has adopted the remaining guidance which did not impact
the consolidated financial statements. |
|
|
|
Future accounting changes |
|
|
|
Fair value measurement
In May 2011, the FASB issued amended guidance on fair value
measurement which updates some of the measurement guidance and
includes enhanced disclosure requirements. The amended
guidance is effective for interim and annual periods beginning
after December 15, 2011. Adoption is not expected to have a
material impact on the results of operations or financial position
but increased quantitative and qualitative disclosure regarding
Level 3 measurements is expected. |
|
|
|
Other comprehensive income
In June 2011, the FASB issued an accounting standard update on the
Presentation of Comprehensive Income, which eliminates the
current option to report other comprehensive income and its
components in the Consolidated Statement of Changes in
Shareholders' Equity. The Company can elect to present items
of net income and other comprehensive income in one continuous
statement or in two separate, but consecutive, statements. As
the new guidance does not change those components that are
recognized in net income or those components that are recognized in
other comprehensive income, adoption is expected to impact only the
presentation of the financial statements. The guidance must
be applied retrospectively for all periods presented in the
financial statements. The Company has not yet determined
which election will be made when the standard becomes effective for
interim and annual periods beginning after December 15, 2011, or
earlier if the Company elects to early adopt as is permitted. |
|
|
3 |
Income taxes |
|
|
For the three months
ended June 30 |
|
For the six months
ended June 30 |
|
(in millions of Canadian dollars) |
2011 |
2010 |
|
2011 |
2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current income tax expense |
$ |
(6.9) |
$ |
2.6 |
|
$ |
(3.0) |
$ |
4.8 |
|
|
Deferred income tax expense |
|
51.9 |
|
43.5 |
|
|
59.8 |
|
85.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
$ |
45.0 |
$ |
46.1 |
|
$ |
56.8 |
$ |
89.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The lower effective income tax rate for the three months and
six months ended June 30, 2010, compared to the same periods in
2011, is a result of non-taxable foreign exchange gains and losses
related to long-term debt. |
|
|
4 |
Earnings per share |
|
|
|
At June 30, 2011, the number of shares outstanding was 169.4
million (June 30, 2010 - 168.7 million). |
|
|
|
Basic earnings per share have been calculated using net income
for the period divided by the weighted average number of common
shares outstanding during the period. |
|
|
|
The number of shares used in earnings per share calculations is
reconciled as follows:
|
|
|
For the three months
ended June 30 |
|
For the six months
ended June 30 |
|
(in millions) |
2011 |
2010 |
|
2011 |
2010 |
|
Weighted average shares outstanding |
|
169.4 |
|
168.6 |
|
|
169.3 |
|
168.6 |
|
Dilutive effect of stock options |
|
1.3 |
|
0.6 |
|
|
1.3 |
|
0.4 |
|
Weighted average diluted
shares outstanding |
|
170.7 |
|
169.2 |
|
|
170.6 |
|
169.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three and six months ended June 30, 2011,
2,023,500 and 1,456,021 options, respectively, were excluded from
the computation of diluted earnings per share because their effects
were not dilutive (three and six months ended June 30, 2010 -
1,711,200 and 2,120,421, respectively). |
|
|
5 |
Financial instruments |
|
|
|
A. Fair
values of financial instruments |
|
|
|
The Company categorizes its financial assets and
liabilities measured at fair value into one of three different
levels depending on the observability of the inputs employed
in the measurement.
- Level 1: Unadjusted quoted prices for identical assets
and liabilities in active markets that are accessible at the
measurement date.
- Level 2: Directly or indirectly observable inputs other
than quoted prices included within Level 1 or quoted prices for
similar assets and liabilities. Derivative instruments in
this category are valued using models or other industry standard
valuation techniques derived from observable market data.
- Level 3: Valuations based on inputs which are less
observable, unavailable or where the observable data does not
support a significant portion of the instruments' fair value.
Generally, Level 3 valuations are longer dated transactions, occur
in less active markets, occur at locations where pricing
information is not available, or have no binding broker quote to
support Level 2 classifications.
|
|
|
|
|
When possible, the estimated fair value is based on
quoted market prices and, if not available, estimates from third
party brokers. For non-exchange traded derivatives classified
in Level 2, the Company uses standard valuation techniques to
calculate fair value. Primary inputs to these techniques
include observable market prices (interest, foreign exchange and
commodity) and volatility, depending on the type of derivative and
nature of the underlying risk. The Company uses inputs and
data used by willing market participants when valuing derivatives
and considers its own credit default swap spread as well as those
of its counterparties in its determination of fair value.
Wherever possible the Company uses observable inputs. All
derivatives are classified as Level 2. The carrying values of
financial instruments equal or approximate their fair values with
the exception of long-term debt which has a carrying value of
$4,197.6 million at June 30, 2011 (December 31, 2010 - $4,314.9
million) and a fair value of approximately $4,741.4 million at June
30, 2011 (December 31, 2010 - $4,773.0 million). The fair
value of publicly traded long-term debt is determined based on
market prices at June 30, 2011 and December 31, 2010,
respectively. |
|
|
|
A detailed analysis of the techniques used to value
long-term floating rate notes, which are classified as Level 3, are
discussed below: |
|
|
|
Gain/loss in fair value of long-term floating
rate notes |
|
|
|
At June 30, 2011 and December 31, 2010, the Company
held long-term floating rate notes with a total settlement value of
$105.0 million and $117.0 million, respectively, and carrying
values of $73.6 million and $69.5 million, respectively. At
June 30, 2011, the long-term floating rate notes consisted of
Master Asset Vehicle ("MAV") 2 notes with eligible assets.
The carrying values, being the estimated fair values, are reported
in "Investments". |
|
|
|
The valuation technique used by the Company to
estimate the fair value of its investment in long-term floating
rate notes at June 30, 2011 and December 31, 2010, incorporates
probability weighted discounted cash flows considering the best
available public information regarding market conditions and other
factors that a market participant would consider for such
investments. During the second quarter of 2011 the Company
sold all of its MAV 2 Class B and Class C and MAV 3 Class 9 notes
for proceeds of $6.4 million and recorded a gain of $6.3
million. This gain together with accretion and other minor
changes in assumptions have resulted in gains of $8.7 million and
$10.5 million in the three and six months ended June 30, 2011,
respectively (three and six months ended June 30, 2010 - gains of
$3.1 million and $5.6 million, respectively) which were reported in
"Other income and charges." The interest rates and maturities
of the various long-term floating rate notes, discount rates and
credit losses modelled at June 30, 2011 and December 31, 2010,
respectively, are: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2011 |
|
|
|
December 31, 2010 |
|
Probability weighted average
coupon interest rate |
|
|
|
0.8% |
|
|
|
0.8% |
|
Weighted average discount
rate |
|
|
|
6.9% |
|
|
|
7.1% |
|
Expected repayments of
long-term floating rate notes |
|
|
|
Approximately 5 ½ years |
|
|
|
Approximately 6 years |
|
Credit losses |
|
|
|
MAV 2 eligible asset notes:
nil |
|
|
|
MAV 2 eligible asset notes: 1% to 100% |
|
|
|
|
|
|
|
|
|
MAV 3 Class 9 Traditional Asset Tracking notes: 1% |
|
|
|
The probability weighted discounted cash flows resulted in an
estimated fair value of the Company's long-term floating rate notes
of $73.6 million at June 30, 2011 (December 31, 2010 - $69.5
million). The change in the original cost and estimated fair
value of the Company's long-term floating rate notes is as follows
(representing a roll-forward of assets measured at fair value using
Level 3 inputs): |
|
|
2011 |
2010 |
(in millions of Canadian
dollars) |
|
Original
cost |
Estimated
fair value |
Original
cost |
Estimated
fair value |
As at January 1 |
|
$ |
|
117.0 |
|
$ |
|
69.5 |
|
$ |
|
129.1 |
|
$ |
|
69.3 |
Redemption of notes |
|
|
|
(12.0) |
|
|
|
(0.1) |
|
|
|
(0.1) |
|
|
|
- |
Accretion |
|
|
|
- |
|
|
|
2.7 |
|
|
|
- |
|
|
|
2.9 |
Change in market assumptions |
|
|
|
- |
|
|
|
1.5 |
|
|
|
- |
|
|
|
2.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at June 30 |
|
$ |
|
105.0 |
|
$ |
|
73.6 |
|
$ |
|
129.0 |
|
$ |
|
74.9 |
|
B. Financial risk management |
|
|
|
The Company's policy with respect to using derivative financial
instruments is to selectively reduce volatility associated with
fluctuations in interest rates, foreign exchange ("FX") rates, the
price of fuel and stock-based compensation expense. Where
derivatives are designated as hedging instruments, the relationship
between the hedging instruments and their associated hedged items
is documented, as well as the risk management objective and
strategy for the use of the hedging instruments. This
documentation includes linking the derivatives that are designated
as fair value or cash flow hedges to specific assets or liabilities
on the Consolidated Balance Sheet, commitments or forecasted
transactions. At the time a derivative contract is entered
into, and at least quarterly thereafter, an assessment is made
whether the derivative item is effective in offsetting the changes
in fair value or cash flows of the hedged items. The
derivative qualifies for hedge accounting treatment if it is
effective in substantially mitigating the risk it was designed to
address. |
|
|
|
It is not the Company's intent to use financial derivatives or
commodity instruments for trading or speculative purposes. |
|
|
|
Foreign exchange management |
|
The Company is exposed to fluctuations of financial
commitments, assets, liabilities, income or cash flows due to
changes in FX rates. The Company conducts business
transactions and owns assets in Canada and the United States; as a
result, revenues and expenses are incurred in both Canadian and
U.S. dollars. The Company enters into foreign exchange risk
management transactions primarily to manage fluctuations in the
exchange rate between Canadian and U.S. currencies. In terms
of net income, excluding FX on long-term debt, mitigation of U.S.
dollar FX exposure is provided primarily through offsets created by
revenues and expenses incurred in the same currency. Where
appropriate, the Company negotiates with customers and suppliers to
reduce the net exposure. |
|
|
|
Occasionally the Company will enter into short-term FX forward
contracts as part of its cash management strategy. |
|
|
|
Net investment hedge |
|
The FX gains and losses on long-term debt are mainly unrealized
and can only be realized when U.S. dollar denominated long-term
debt matures or is settled. The Company also has long-term FX
exposure on its investment in U.S. affiliates. The majority of the
Company's U.S. dollar denominated long-term debt has been
designated as a hedge of the net investment in foreign
subsidiaries. This designation has the effect of mitigating
volatility on net income by offsetting long-term FX gains and
losses on long-term debt against gains and losses on its net
investment. In addition, the Company may enter into FX
forward contracts to lock-in the amount of Canadian dollars it has
to pay on its U.S. dollar denominated debt maturities. |
|
|
|
Foreign exchange forward contracts |
|
At June 30, 2011, the Company had FX forward contracts to fix
the exchange rate on US$101.4 million of its 5.75% Notes due in May
2013 and US$175.0 million of its 6.50% Notes due in May 2018, and
US$100.0 million of its 7.25% Notes due in May 2019. These
derivatives, which are accounted for as cash flow hedges, guarantee
the amount of Canadian dollars that the Company will repay when
these Notes mature. During the three months ended June 30,
2011, the Company recorded an unrealized foreign exchange loss on
long-term debt of $0.8 million in "Other income and charges" and
$1.3 million in "Other comprehensive income" in relation to these
derivatives. For the six months ended June 30, 2011, an
unrealized foreign exchange loss of $4.8 million in "Other income
and charges" and $1.6 million in "Other comprehensive income" were
recorded. During these periods the underlying debt which
these derivatives are designated to hedge benefited largely from an
equal and offsetting unrealized FX gain on long-term debt also
recorded in "Other income and charges". At June 30, 2011, the
unrealized loss derived from these FX forwards was $8.0 million
(December 31, 2010 - $1.6 million) which was included in "Other
long-term liabilities" with the offset reflected in "Accumulated
other comprehensive loss" of $2.7 million (December 31, 2010 - $1.1
million), and "Retained earnings" of $5.3 million (December 31,
2010 - $0.5 million), on the Consolidated Balance Sheets.
Amounts recorded in "Accumulated other comprehensive loss" will be
reclassified to earnings during the terms of the Notes. |
|
|
|
Interest rate management |
|
The Company is exposed to interest rate risk, which is the risk
that the fair value or future cash flows of a financial instrument
will vary as a result of changes in market interest rates. In
order to manage funding needs or capital structure goals, the
Company enters into debt or capital lease agreements that are
subject to either fixed market interest rates set at the time of
issue or floating rates determined by on-going market
conditions. Debt subject to variable interest rates exposes
the Company to variability in interest expense, while debt subject
to fixed interest rates exposes the Company to variability in the
fair value of debt. |
|
|
|
To manage interest rate exposure, the Company accesses diverse
sources of financing and manages borrowings in line with a targeted
range of capital structure, debt ratings, liquidity needs, maturity
schedule, and currency and interest rate profiles. In
anticipation of future debt issuances, the Company may enter into
forward rate agreements such as treasury rate locks, bond forwards
or forward starting swaps, designated as cash flow hedges, to
substantially lock in all or a portion of the effective future
interest expense. The Company may also enter into swap
agreements, designated as fair value hedges, to manage the mix of
fixed and floating rate debt. The Company does not currently
hold any derivative financial instruments to manage its interest
rate risk. |
|
|
|
Interest rate swaps |
|
During the three and six months ended June 30, 2011, the
Company amortized $1.7 million and $3.3 million, respectively,
(three and six months ended June 30, 2010 - $1.2 million and $2.2
million, respectively) of deferred gains to "Net interest expense"
relating to interest rate swaps previously unwound in the three
months ended September 30, 2010 and three months ended June 30,
2009. The gains were deferred as a fair value adjustment to
the underlying debts that were hedged and are amortized to "Net
interest expense" until such time the debts are repaid through May
2013. |
|
|
|
At June 30, 2011 and December 31, 2010, the Company had no
outstanding interest rate swaps. |
|
|
|
Treasury rate locks |
|
At June 30, 2011, the Company had net unamortized losses
related to interest rate locks, which are accounted for as cash
flow hedges, settled in previous years totalling $22.0 million
(December 31, 2010 - $22.1 million). This amount is composed
of various unamortized gains and losses related to specific debts
which are reflected in "Accumulated other comprehensive loss", net
of tax, and are amortized to "Net interest expense" in the period
that interest on the related debt is charged. The
amortization of these gains and losses resulted in an increase in
"Net interest expense" and "Other comprehensive income" of $0.2
million and $0.1 million for the three and six months ended June
30, 2011, respectively (three and six months ended June 30, 2010 -
$1.8 million and $1.7 million, respectively). |
|
|
|
Stock-based compensation expense management |
|
The Company is exposed to stock-based compensation risk, which
is the probability of increased compensation expense due to the
increase in the Company's share price. |
|
|
|
The Company entered into a Total Return Swap ("TRS") to reduce
the volatility to the Company over time on three types of
stock-based compensation programs: tandem share appreciation rights
("TSARs"), deferred share units ("DSUs"), and restricted share
units ("RSUs"). As the Company's share price appreciates,
these instruments create increased compensation expense. The TRS is
a derivative that provides price appreciation and dividends, in
return for a charge by the counterparty. The swaps are
intended to minimize volatility to "Compensation and benefits"
expense by providing a gain to offset increased compensation
expense as the share price increases and a loss to offset reduced
compensation expense when the share price falls. If
stock-based compensation share units fall out of the money after
entering the program, the loss associated with the swap would no
longer be fully offset by compensation expense reductions, which
would reduce the effectiveness of the swap. This derivative
was not designated as a hedge and changes in fair value were
recognized in net income in the period in which the change
occurs. During the first quarter of 2011, the Company reduced
the size of the TRS program to reflect the cancellation of SARs in
Canada (see Note 6). |
|
|
|
"Compensation and benefits" expense on the Company's
Consolidated Statements of Income included a net loss on these
swaps of $1.4 million and $2.1 million for the three and six months
ended June 30, 2011, respectively, which was inclusive of
unrealized losses in the second quarter and both realized gains and
unrealized losses in the first half of 2011. For the same
periods in 2010, the Company recorded an unrealized loss on these
swaps of $0.4 million and an unrealized gain of $0.4 million.
During the first quarter of 2011, CP unwound a portion of the
program for total proceeds of $0.3 million. At June 30, 2011,
the unrealized loss on the remaining TRS of $8.4 million (December
31, 2010 - $6.0 million) was included in "Accounts payable and
accrued liabilities" on the Consolidated Balance Sheets. |
|
|
|
Fuel price management |
|
The Company is exposed to commodity risk related to purchases
of diesel fuel and the potential reduction in net income due to
increases in the price of diesel. Fuel expense constitutes a
large portion of the Company's operating costs and volatility in
diesel fuel prices can have a significant impact on the Company's
income. Items affecting volatility in diesel prices include, but
are not limited to, fluctuations in world markets for crude oil and
distillate fuels, which can be affected by supply disruptions and
geopolitical events. |
|
|
|
The impact of variable fuel expense is mitigated substantially
through fuel cost recovery programs which apportion incremental
changes in fuel prices to shippers through price indices, tariffs,
and by contract, within agreed upon guidelines. While these
programs provide effective and meaningful coverage, residual
exposure remains as the fuel expense risk cannot be completely
recovered from shippers due to timing and volatility in the market.
The Company continually monitors residual exposure, and where
appropriate, may enter into derivative instruments. |
|
|
|
Derivative instruments used by the Company to manage fuel
expense risk may include, but are not limited to, swaps and options
for crude oil, diesel and crack spreads. |
|
|
|
At June 30, 2011, the Company had diesel futures contracts,
which are accounted for as cash flow hedges, to purchase
approximately 18.4 million US gallons during the period July 2011
to June 2012 at an average price of US$2.91 per US gallon.
This represents approximately 6% of estimated fuel purchases for
this period. At June 30, 2011, the unrealized gain on these
futures contracts was $1.8 million (December 31, 2010
- $4.1 million) and was reflected in "Other current
assets" with the offset, net of tax, reflected in "Accumulated
other comprehensive loss" on the Consolidated Balance Sheets.
Amounts recorded in "Accumulated other comprehensive loss" will be
reclassified to earnings when the derivative instruments are
realized. |
|
|
|
During the three and six months ended June 30, 2011, the impact
of settled commodity swaps decreased "Fuel" expense by $3.4 million
and $6.8 million, respectively, as a result of realized gains on
diesel swaps (three and six months ended June 30, 2010 - $0.7
million and $1.6 million, respectively). |
|
|
|
There was no significant ineffectiveness related to derivatives
designated as hedges. The following table summarizes
information on the location and amounts of gains and losses, before
tax, related to derivatives on the Consolidated Statements of
Income and in comprehensive income for the three months and six
months ended June 30, 2011 and 2010: |
|
|
(in millions of Canadian dollars) |
Location of gain (loss) recognized in income on
derivatives |
Amount of gain (loss) recognized in income
on derivatives |
Amount of gain (loss) recognized in other
comprehensive income on derivatives |
|
|
|
For the
three months
ended June 30 |
For the three
months
ended June 30 |
|
|
|
2011 |
2010 |
2011 |
2010 |
|
Derivatives designated
as hedging instruments |
|
|
|
|
|
|
|
Effective
portion |
|
|
|
|
|
|
|
Diesel future contracts |
Fuel expense |
$ |
3.4 |
$ |
0.7 |
$ |
(6.1) |
$ |
(3.7) |
|
|
Interest rate swaps |
Net interest expense |
1.7 |
1.2 |
- |
- |
|
|
Treasury rate locks |
Net interest expense |
(0.2) |
(1.8) |
0.2 |
1.8 |
|
|
FX forward contracts |
Other income and charges |
(0.8) |
- |
(1.3) |
- |
|
|
|
|
|
|
|
|
Derivatives not
designated as hedging instruments |
|
|
|
|
|
|
|
Total return swap |
Compensation and benefits |
(1.4) |
(0.4) |
- |
- |
|
|
FX forward contracts |
Other income and charges |
- |
1.9 |
- |
- |
|
|
|
$ |
2.7 |
$ |
1.6 |
$ |
(7.2) |
$ |
(1.9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars) |
Location of gain (loss)
recognized in income on
derivatives |
Amount of gain (loss)
recognized in income on
derivatives |
Amount of gain (loss)
recognized in other
comprehensive
income on derivatives |
|
|
|
For the
six months
ended June 30 |
For the six
months
ended June 30 |
|
|
|
2011 |
2010 |
2011 |
2010 |
|
Derivatives
designated as
hedging instruments |
|
|
|
|
|
|
|
Effective
portion |
|
|
|
|
|
|
|
Diesel future contracts |
Fuel expense |
$ |
6.8 |
$ |
1.6 |
$ |
(2.3) |
$ |
(3.4) |
|
|
Interest rate swaps |
Net interest
expense |
3.3 |
2.2 |
- |
- |
|
|
Treasury rate locks |
Net interest
expense |
(0.1) |
(1.7) |
0.1 |
1.7 |
|
|
FX forward contracts |
Other income and
charges |
(4.8) |
- |
(1.6) |
- |
|
|
|
|
|
|
|
|
Derivatives not designated as
hedging instruments |
|
|
|
|
|
|
|
Total return swap |
Compensation and
benefits |
(2.1) |
0.4 |
- |
- |
|
|
|
$ |
3.1 |
$ |
2.5 |
$ |
(3.8) |
$ |
(1.7) |
|
|
|
|
|
|
|
|
At June 30, 2011, the Company expected that, during the next 12
months, $1.8 million of unrealized holding gains on diesel future
contracts will be realized and recognized in the Consolidated
Statement of Income, reported in "Fuel" expense as a result of
these derivatives being settled. |
|
|
|
The following table summarizes information on the effective and
ineffective portions, before tax, of the Company's net investment
hedge on the Consolidated Statement of Income and in comprehensive
income for the three and six months ended June 30, 2011 and
2010: |
|
|
(in millions of Canadian
dollars) |
Location of ineffective
portion recognized in
income |
Ineffective portion
recognized in income |
Effective portion
recognized in other
comprehensive income |
|
|
|
For the three
months
ended June 30 |
For the three
months
ended June 30 |
|
|
|
2011 |
2010 |
2011 |
2010 |
|
FX on LTD within net
investment hedge |
Other income and charges |
$ |
- |
$ |
0.6 |
$ |
15.6 |
$ |
(75.4) |
|
|
|
|
|
|
|
|
For the
six months
ended June 30 |
For the six
months
ended June 30 |
|
|
|
2011 |
2010 |
2011 |
2010 |
|
FX on LTD within net
investment hedge |
Other income and charges |
$ |
- |
$ |
2.6 |
$ |
89.9 |
$ |
(25.2) |
|
|
|
|
|
|
|
6 |
Stock-based compensation |
|
|
|
At June 30, 2011, the Company had several stock-based
compensation plans, including stock option plans, various cash
settled liability plans and an employee stock savings
plan. These plans resulted in an expense for the three and six
months ended June 30, 2011 of $3.3 million and $15.2 million,
respectively (three and six months ended June 30, 2010 - $12.9
million and $30.8 million, respectively). |
|
|
|
Tandem share appreciation rights ("TSARs") |
|
|
|
As a result of changes to Canadian tax legislation, which
eliminated the favourable tax treatment on cash settled
compensation awards, the Company offered employees the option of
cancelling the outstanding SAR and keeping in place the outstanding
option. Effective January 31, 2011, the Company cancelled 3.1
million SARs and reclassified the fair value of the previously
recognized liability ($69.8 million) and the recognized deferred
tax asset ($17.9 million) to "Additional paid-in capital".
The terms of the awards were not changed and as a result no
incremental cost was recognized. The weighted average fair
value of the units cancelled at January 31, 2011 was $25.36 per
unit. Compensation cost will continue to be recognized over
the remaining vesting period for those options not yet
vested. |
|
|
|
Regular options |
|
|
|
In the first six months of 2011, under CP's stock option plans,
the Company issued 632,400 regular options at the weighted average
exercise price of $65.03 per share, based on the closing price on
the grant date. |
|
|
|
Pursuant to the employee plan, these regular options may be
exercised upon vesting, which is between 24 months and 36 months
after the grant date, and will expire after 10 years. |
|
|
|
Under the fair value method, the fair value of the regular
options at the grant date was $12.3 million. The weighted
average fair value assumptions were approximately: |
|
|
|
For the six months
ended June 30 |
|
|
2011 |
|
Grant price |
$65.03 |
|
|
Expected life (years) (1) |
6.30 |
|
|
Risk-free interest rate
(2) |
2.79% |
|
|
Expected stock price volatility
(3) |
31.48% |
|
|
Expected annual dividends per share
(4) |
$1.20 |
|
|
Expected forfeiture rate
(5) |
0.8% |
|
|
Weighted average fair value of regular options
granted during the period |
$19.44 |
|
|
|
|
(1) |
Represents the period of time that awards are
expected to be outstanding. Historical data on exercise behaviour
was used to estimate the expected life of the option. |
|
(2) |
Based on the implied yield available on zero-coupon
government issues with an equivalent remaining term at the time of
the grant. |
|
(3) |
Based on the historical stock price volatility of
the Company's stock over a period commensurate with the expected
term of the option. |
|
(4) |
Determined by the current annual dividend.
The Company does not employ different dividend yields throughout
the year. |
|
(5) |
The Company estimated forfeitures based on past
experience. This rate is monitored on a periodic basis. |
|
|
Performance share unit ("PSU") plan |
|
|
|
In the first six months of 2011, the Company issued 268,230
PSUs with a grant date fair value of $15.7 million. These
units attract dividend equivalents in the form of additional units
based on the dividends paid on the Company's common shares.
PSUs vest and are settled in cash approximately three years after
the grant date contingent upon CP's performance (performance
factor). The fair value of PSUs are measured, both on the
grant date and each subsequent quarter until settlement, using a
Monte Carlo simulation model. The model utilizes multiple input
variables that determine the probability of satisfying the
performance and market condition stipulated in the
grant. |
|
|
7 |
Pensions and other benefits |
|
|
|
In the three months and six months ended June 30, 2011, the
Company made contributions of $24.5 million and $47.5 million,
respectively (2010 - $159.7 million and $178.4 million,
respectively) to its defined benefit pension plans. The
elements of net periodic benefit cost for defined benefit pension
plans and other benefits recognized in the three and six months
ended June 30, 2011, included the following components: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three
months
ended June 30 |
|
|
|
|
|
|
|
|
|
Pensions |
|
Other benefits |
|
(in millions of Canadian dollars) |
|
|
|
|
|
|
|
2011 |
|
2010 |
|
2011 |
|
2010 |
|
Current service cost (benefits earned by employees in the
period) |
|
|
|
$ |
|
|
|
26.1 |
|
|
|
$ |
|
|
|
21.6 |
|
|
|
$ |
|
|
|
4.1 |
|
|
|
$ |
|
|
|
3.9 |
|
Interest cost on benefit obligation |
|
|
|
|
|
|
|
114.9 |
|
|
|
|
|
|
|
116.1 |
|
|
|
|
|
|
|
6.4 |
|
|
|
|
|
|
|
7.0 |
|
Expected return on fund assets |
|
|
|
|
|
|
|
(168.4) |
|
|
|
|
|
|
|
(149.6) |
|
|
|
|
|
|
|
(0.1) |
|
|
|
|
|
|
|
(0.2) |
|
Recognized net actuarial loss |
|
|
|
|
|
|
|
35.5 |
|
|
|
|
|
|
|
17.8 |
|
|
|
|
|
|
|
1.2 |
|
|
|
|
|
|
|
1.3 |
|
Amortization of prior service costs |
|
|
|
|
|
|
|
3.2 |
|
|
|
|
|
|
|
3.3 |
|
|
|
|
|
|
|
(0.3) |
|
|
|
|
|
|
|
(0.4) |
|
Net periodic benefit cost |
|
|
|
$ |
|
|
|
11.3 |
|
|
|
$ |
|
|
|
9.2 |
|
|
|
$ |
|
|
|
11.3 |
|
|
|
$ |
|
|
|
11.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six
months
ended June 30 |
|
|
|
|
|
|
|
|
|
Pensions |
|
Other
benefits |
|
(in millions of Canadian dollars) |
|
|
|
|
|
|
|
2011 |
|
2010 |
|
2011 |
|
2010 |
|
Current service cost (benefits earned by employees in the
period) |
|
|
|
$ |
|
|
|
52.2 |
|
|
|
$ |
|
|
|
43.2 |
|
|
|
$ |
|
|
|
8.2 |
|
|
|
$ |
|
|
|
7.8 |
|
Interest cost on benefit obligation |
|
|
|
|
|
|
|
229.8 |
|
|
|
|
|
|
|
232.2 |
|
|
|
|
|
|
|
12.8 |
|
|
|
|
|
|
|
14.0 |
|
Expected return on fund assets |
|
|
|
|
|
|
|
(336.7) |
|
|
|
|
|
|
|
(299.2) |
|
|
|
|
|
|
|
(0.3) |
|
|
|
|
|
|
|
(0.4) |
|
Recognized net actuarial loss |
|
|
|
|
|
|
|
71.1 |
|
|
|
|
|
|
|
35.6 |
|
|
|
|
|
|
|
2.4 |
|
|
|
|
|
|
|
2.6 |
|
Amortization of prior service costs |
|
|
|
|
|
|
|
6.4 |
|
|
|
|
|
|
|
6.6 |
|
|
|
|
|
|
|
(0.6) |
|
|
|
|
|
|
|
(0.8) |
|
Net periodic benefit cost |
|
|
|
$ |
|
|
|
22.8 |
|
|
|
$ |
|
|
|
18.4 |
|
|
|
$ |
|
|
|
22.5 |
|
|
|
$ |
|
|
|
23.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8 |
Commitments and contingencies |
|
|
|
In the normal course of its operations, the Company becomes
involved in various legal actions, including claims relating to
injuries and damage to property. The Company maintains
provisions it considers to be adequate for such actions.
While the final outcome with respect to actions outstanding or
pending at June 30, 2011, cannot be predicted with certainty, it is
the opinion of management that their resolution will not have a
material adverse effect on the Company's financial position or
results of operations. |
|
|
|
At June 30, 2011, the Company had committed to total future
capital expenditures amounting to $587.1 million and operating
expenditures amounting to $1,721.4 million for the years
2011-2028. |
|
|
|
Environmental remediation accruals cover site-specific
remediation programs. Environmental remediation accruals are
measured on an undiscounted basis and are recorded when the costs
to remediate are probable and reasonably estimable. The
estimate of the probable costs to be incurred in the remediation of
properties contaminated by past railway use reflects the nature of
contamination at individual sites according to typical activities
and scale of operations conducted. CP has developed
remediation strategies for each property based on the nature and
extent of the contamination, as well as the location of the
property and surrounding areas that may be adversely affected by
the presence of contaminants, considering available technologies,
treatment and disposal facilities and the acceptability of
site-specific plans based on the local regulatory
environment. Site-specific plans range from containment and
risk management of the contaminants through to the removal and
treatment of the contaminants and affected soils and ground
water. The details of the estimates reflect the environmental
liability at each property. Provisions for environmental
remediation costs are recorded in "Other long-term liabilities",
except for the current portion which is recorded in "Accounts
payable and accrued liabilities". The total amount provided at June
30, 2011 was $103.2 million (December 31, 2010 - $107.4 million).
Payments are expected to be made over 10 years to 2021. |
|
|
|
The accruals for environmental remediation represent CP's best
estimate of its probable future obligation and includes both
asserted and unasserted claims, without reduction for anticipated
recoveries from third parties. Although the recorded accruals
include CP's best estimate of all probable costs, CP's total
environmental remediation costs cannot be predicted with
certainty. Accruals for environmental remediation may change
from time to time as new information about previously untested
sites becomes known, environmental laws and regulations evolve and
advances are made in environmental remediation technology.
The accruals may also vary as the courts decide legal proceedings
against outside parties responsible for contamination. These
potential charges, which cannot be quantified at this time, are not
expected to be material to CP's financial position, but may
materially affect income in the particular period in which a charge
is recognized. Costs related to existing, but as yet unknown,
or future contamination will be accrued in the period in which they
become probable and reasonably estimable. Changes to costs are
reflected as changes to "Other long-term liabilities" or "Accounts
payable and accrued liabilities" and to "Purchased services and
other" within operating expenses. The amount charged to
income in the three and six months ended June 30, 2011 was $1.2
million and $1.9 million, respectively. The amount credited
to income in the three months ended June 30, 2010 was $0.1 million
and charged to income in the six months ended June 30, 2010 was
$1.5 million. |
|
|
|
The Dakota, Minnesota & Eastern Railroad Corporation
("DM&E") was purchased in 2007 for $1.5 billion resulting in
goodwill of $142.2 million (US$147.4 million) as at June 30,
2011. Future contingent payments of up to approximately
US$1.1 billion consisting of US$390 million which would become due
if construction of the Powder River Basin expansion project starts
prior to December 31, 2025 and up to approximately US$740 million
would become due upon the movement of specified volumes over the
Powder River Basin extension prior to December 31, 2025.
Certain interest and inflationary adjustments would also become
payable up to December 31, 2025 upon achievement of certain
milestones. The contingent payments would be accounted for as
an increase in the purchase price. |
|
|
9 |
Significant customers |
|
|
|
During the second quarter of 2011, one customer comprised 10.2%
of total revenue (second quarter of 2010 - 9.3%). No one
customer comprised more than 10% of total revenue for the six
months ended June 30, 2011 or 2010. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of Rail Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
Quarter |
|
|
|
|
Year-to-date |
|
|
|
|
2011 |
|
|
|
2010 |
|
|
Fav/(Unfav) |
|
|
% |
|
|
|
|
|
|
2011 |
|
|
|
2010 |
|
|
Fav/(Unfav) |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
(millions, except per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ 1,233.2 |
|
|
|
$ 1,202.2 |
|
|
$ 31.0 |
|
|
2.6 |
|
|
|
Freight revenue |
|
|
|
$ 2,368.4 |
|
|
|
$ 2,340.4 |
|
|
$ 28.0 |
|
|
1.2 |
|
|
|
|
31.3 |
|
|
|
32.0 |
|
|
(0.7) |
|
|
(2.2) |
|
|
|
Other revenue |
|
|
|
59.5 |
|
|
|
60.6 |
|
|
(1.1) |
|
|
(1.8) |
|
|
|
|
1,264.5 |
|
|
|
1,234.2 |
|
|
30.3 |
|
|
2.5 |
|
|
|
|
|
|
2,427.9 |
|
|
|
2,401.0 |
|
|
26.9 |
|
|
1.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
336.1 |
|
|
|
349.7 |
|
|
13.6 |
|
|
3.9 |
|
|
|
Compensation and benefits |
|
|
|
700.6 |
|
|
|
703.5 |
|
|
2.9 |
|
|
0.4 |
|
|
|
|
237.4 |
|
|
|
177.9 |
|
|
(59.5) |
|
|
(33.4) |
|
|
|
Fuel |
|
|
|
463.1 |
|
|
|
359.6 |
|
|
(103.5) |
|
|
(28.8) |
|
|
|
|
57.4 |
|
|
|
51.0 |
|
|
(6.4) |
|
|
(12.5) |
|
|
|
Materials |
|
|
|
129.0 |
|
|
|
115.0 |
|
|
(14.0) |
|
|
(12.2) |
|
|
|
|
53.6 |
|
|
|
54.9 |
|
|
1.3 |
|
|
2.4 |
|
|
|
Equipment rents |
|
|
|
105.0 |
|
|
|
103.9 |
|
|
(1.1) |
|
|
(1.1) |
|
|
|
|
122.2 |
|
|
|
123.3 |
|
|
1.1 |
|
|
0.9 |
|
|
|
Depreciation and amortization |
|
|
|
244.5 |
|
|
|
244.5 |
|
|
- |
|
|
- |
|
|
|
|
227.3 |
|
|
|
203.3 |
|
|
(24.0) |
|
|
(11.8) |
|
|
|
Purchased services and other |
|
|
|
446.0 |
|
|
|
393.8 |
|
|
(52.2) |
|
|
(13.3) |
|
|
|
|
1,034.0 |
|
|
|
960.1 |
|
|
(73.9) |
|
|
(7.7) |
|
|
|
|
|
|
2,088.2 |
|
|
|
1,920.3 |
|
|
(167.9) |
|
|
(8.7) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
230.5 |
|
|
|
274.1 |
|
|
(43.6) |
|
|
(15.9) |
|
|
Operating income |
|
|
|
339.7 |
|
|
|
480.7 |
|
|
(141.0) |
|
|
(29.3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5.0) |
|
|
|
(3.4) |
|
|
1.6 |
|
|
47.1 |
|
|
|
Other income and charges |
|
|
|
(5.5) |
|
|
|
(8.3) |
|
|
(2.8) |
|
|
(33.7) |
|
|
|
|
62.5 |
|
|
|
64.8 |
|
|
2.3 |
|
|
3.5 |
|
|
|
Net interest expense |
|
|
|
126.7 |
|
|
|
131.5 |
|
|
4.8 |
|
|
3.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
173.0 |
|
|
|
212.7 |
|
|
(39.7) |
|
|
(18.7) |
|
|
Income before income tax
expense |
|
|
|
218.5 |
|
|
|
357.5 |
|
|
(139.0) |
|
|
(38.9) |
|
|
|
|
45.0 |
|
|
|
46.1 |
|
|
1.1 |
|
|
2.4 |
|
|
|
Income tax expense |
|
|
|
56.8 |
|
|
|
89.9 |
|
|
33.1 |
|
|
36.8 |
|
|
|
|
$ 128.0 |
|
|
|
$ 166.6 |
|
|
$
(38.6) |
|
|
(23.2) |
|
|
Net income |
|
|
|
$
161.7 |
|
|
|
$ 267.6 |
|
|
$
(105.9) |
|
|
(39.6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
81.8 |
|
|
|
77.8 |
|
|
(4.0) |
|
|
(400) bps |
|
|
Operating ratio (%) |
|
|
|
86.0 |
|
|
|
80.0 |
|
|
(6.0) |
|
|
(600) bps |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
0.76 |
|
|
|
$
0.99 |
|
|
$
(0.23) |
|
|
(23.2) |
|
|
Basic earnings per share |
|
|
|
$
0.96 |
|
|
|
$ 1.59 |
|
|
$
(0.63) |
|
|
(39.6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
0.75 |
|
|
|
$
0.98 |
|
|
$
(0.23) |
|
|
(23.5) |
|
|
Diluted earnings per share |
|
|
|
$
0.95 |
|
|
|
$ 1.58 |
|
|
$ (0.63) |
|
|
(39.9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
Outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
169.4 |
|
|
|
168.6 |
|
|
0.8 |
|
|
0.5 |
|
|
Weighted average (avg) number of
shares
outstanding (millions) |
|
|
|
169.3 |
|
|
|
168.6 |
|
|
0.7 |
|
|
0.4 |
|
|
|
|
170.7 |
|
|
|
169.2 |
|
|
1.5 |
|
|
0.9 |
|
|
Weighted avg number of diluted
shares
outstanding (millions) |
|
|
|
170.6 |
|
|
|
169.0 |
|
|
1.6 |
|
|
0.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign Exchange |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.03 |
|
|
|
0.98 |
|
|
(0.05) |
|
|
(5.1) |
|
|
Average foreign exchange rate
(US$/Canadian$) |
|
|
|
1.02 |
|
|
|
0.97 |
|
|
(0.05) |
|
|
(5.2) |
|
|
|
|
0.97 |
|
|
|
1.02 |
|
|
(0.05) |
|
|
(4.9) |
|
|
Average foreign exchange rate
(Canadian$/US$) |
|
|
|
0.98 |
|
|
|
1.03 |
|
|
(0.05) |
|
|
(4.9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of Rail Data (Page 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
Quarter |
|
|
|
|
|
|
Year-to-date |
|
|
2011 |
|
|
2010 |
|
Fav/(Unfav) |
|
|
|
|
% |
|
|
|
|
|
|
2011 |
|
|
2010 |
|
Fav/(Unfav) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freight Revenues (millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ 254.6 |
|
|
$ 264.4 |
|
$ (9.8) |
|
|
|
|
(3.7) |
|
|
|
- Grain |
|
|
$ 486.6 |
|
|
$ 535.7 |
|
$ (49.1) |
|
|
|
|
(9.2) |
|
|
145.3 |
|
|
136.7 |
|
8.6 |
|
|
|
|
6.3 |
|
|
|
- Coal |
|
|
251.2 |
|
|
247.2 |
|
4.0 |
|
|
|
|
1.6 |
|
|
150.5 |
|
|
114.9 |
|
35.6 |
|
|
|
|
31.0 |
|
|
|
- Sulphur and fertilizers |
|
|
279.5 |
|
|
232.7 |
|
46.8 |
|
|
|
|
20.1 |
|
|
46.0 |
|
|
44.4 |
|
1.6 |
|
|
|
|
3.6 |
|
|
|
- Forest products |
|
|
91.5 |
|
|
87.6 |
|
3.9 |
|
|
|
|
4.5 |
|
|
231.8 |
|
|
217.0 |
|
14.8 |
|
|
|
|
6.8 |
|
|
|
- Industrial and consumer products |
|
|
462.8 |
|
|
422.5 |
|
40.3 |
|
|
|
|
9.5 |
|
|
84.2 |
|
|
89.0 |
|
(4.8) |
|
|
|
|
(5.4) |
|
|
|
- Automotive |
|
|
164.2 |
|
|
166.6 |
|
(2.4) |
|
|
|
|
(1.4) |
|
|
320.8 |
|
|
335.8 |
|
(15.0) |
|
|
|
|
(4.5) |
|
|
|
- Intermodal |
|
|
632.6 |
|
|
648.1 |
|
(15.5) |
|
|
|
|
(2.4) |
|
|
$ 1,233.2 |
|
|
$ 1,202.2 |
|
$ 31.0 |
|
|
|
|
2.6 |
|
|
|
Total Freight Revenues |
|
|
$ 2,368.4 |
|
|
$ 2,340.4 |
|
$ 28.0 |
|
|
|
|
1.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of Revenue
Ton-Miles (RTM) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,816 |
|
|
8,303 |
|
(487) |
|
|
|
|
(5.9) |
|
|
|
- Grain |
|
|
15,076 |
|
|
16,939 |
|
(1,863) |
|
|
|
|
(11.0) |
|
|
5,564 |
|
|
5,268 |
|
296 |
|
|
|
|
5.6 |
|
|
|
- Coal |
|
|
9,534 |
|
|
9,576 |
|
(42) |
|
|
|
|
(0.4) |
|
|
5,643 |
|
|
4,335 |
|
1,308 |
|
|
|
|
30.2 |
|
|
|
- Sulphur and fertilizers |
|
|
10,512 |
|
|
8,727 |
|
1,785 |
|
|
|
|
20.5 |
|
|
1,179 |
|
|
1,275 |
|
(96) |
|
|
|
|
(7.5) |
|
|
|
- Forest products (1) |
|
|
2,471 |
|
|
2,506 |
|
(35) |
|
|
|
|
(1.4) |
|
|
5,515 |
|
|
5,166 |
|
349 |
|
|
|
|
6.8 |
|
|
|
- Industrial and consumer products (1) |
|
|
11,477 |
|
|
10,200 |
|
1,277 |
|
|
|
|
12.5 |
|
|
545 |
|
|
560 |
|
(15) |
|
|
|
|
(2.7) |
|
|
|
- Automotive |
|
|
1,068 |
|
|
1,105 |
|
(37) |
|
|
|
|
(3.3) |
|
|
5,961 |
|
|
6,518 |
|
(557) |
|
|
|
|
(8.5) |
|
|
|
- Intermodal |
|
|
11,769 |
|
|
12,575 |
|
(806) |
|
|
|
|
(6.4) |
|
|
32,223 |
|
|
31,425 |
|
798 |
|
|
|
|
2.5 |
|
|
|
Total RTMs |
|
|
61,907 |
|
|
61,628 |
|
279 |
|
|
|
|
0.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freight Revenue per RTM (cents) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.26 |
|
|
3.18 |
|
0.08 |
|
|
|
|
2.5 |
|
|
|
- Grain |
|
|
3.23 |
|
|
3.16 |
|
0.07 |
|
|
|
|
2.2 |
|
|
2.61 |
|
|
2.59 |
|
0.02 |
|
|
|
|
0.8 |
|
|
|
- Coal |
|
|
2.63 |
|
|
2.58 |
|
0.05 |
|
|
|
|
1.9 |
|
|
2.67 |
|
|
2.65 |
|
0.02 |
|
|
|
|
0.8 |
|
|
|
- Sulphur and fertilizers |
|
|
2.66 |
|
|
2.67 |
|
(0.01) |
|
|
|
|
(0.4) |
|
|
3.90 |
|
|
3.48 |
|
0.42 |
|
|
|
|
12.1 |
|
|
|
- Forest products (1) |
|
|
3.70 |
|
|
3.50 |
|
0.20 |
|
|
|
|
5.7 |
|
|
4.20 |
|
|
4.20 |
|
- |
|
|
|
|
- |
|
|
|
- Industrial and consumer products (1) |
|
|
4.03 |
|
|
4.14 |
|
(0.11) |
|
|
|
|
(2.7) |
|
|
15.45 |
|
|
15.89 |
|
(0.44) |
|
|
|
|
(2.8) |
|
|
|
- Automotive |
|
|
15.37 |
|
|
15.08 |
|
0.29 |
|
|
|
|
1.9 |
|
|
5.38 |
|
|
5.15 |
|
0.23 |
|
|
|
|
4.5 |
|
|
|
- Intermodal |
|
|
5.38 |
|
|
5.15 |
|
0.23 |
|
|
|
|
4.5 |
|
|
3.83 |
|
|
3.83 |
|
- |
|
|
|
|
- |
|
|
|
Total Freight Revenue per RTM |
|
|
3.83 |
|
|
3.80 |
|
0.03 |
|
|
|
|
0.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carloads (thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
112.8 |
|
|
115.9 |
|
(3.1) |
|
|
|
|
(2.7) |
|
|
|
- Grain |
|
|
212.2 |
|
|
229.1 |
|
(16.9) |
|
|
|
|
(7.4) |
|
|
81.0 |
|
|
94.6 |
|
(13.6) |
|
|
|
|
(14.4) |
|
|
|
- Coal |
|
|
141.3 |
|
|
170.6 |
|
(29.3) |
|
|
|
|
(17.2) |
|
|
54.3 |
|
|
43.2 |
|
11.1 |
|
|
|
|
25.7 |
|
|
|
- Sulphur and fertilizers |
|
|
102.8 |
|
|
87.5 |
|
15.3 |
|
|
|
|
17.5 |
|
|
17.5 |
|
|
17.2 |
|
0.3 |
|
|
|
|
1.7 |
|
|
|
- Forest products |
|
|
35.8 |
|
|
34.8 |
|
1.0 |
|
|
|
|
2.9 |
|
|
96.0 |
|
|
96.6 |
|
(0.6) |
|
|
|
|
(0.6) |
|
|
|
- Industrial and consumer products |
|
|
196.1 |
|
|
188.4 |
|
7.7 |
|
|
|
|
4.1 |
|
|
37.0 |
|
|
37.5 |
|
(0.5) |
|
|
|
|
(1.3) |
|
|
|
- Automotive |
|
|
73.3 |
|
|
71.0 |
|
2.3 |
|
|
|
|
3.2 |
|
|
248.5 |
|
|
271.4 |
|
(22.9) |
|
|
|
|
(8.4) |
|
|
|
- Intermodal |
|
|
491.5 |
|
|
520.0 |
|
(28.5) |
|
|
|
|
(5.5) |
|
|
647.1 |
|
|
676.4 |
|
(29.3) |
|
|
|
|
(4.3) |
|
|
|
Total Carloads |
|
|
1,253.0 |
|
|
1,301.4 |
|
(48.4) |
|
|
|
|
(3.7) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freight Revenue per Carload |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ 2,257 |
|
|
$ 2,281 |
|
$ (24) |
|
|
|
|
(1.1) |
|
|
|
- Grain |
|
|
$ 2,293 |
|
|
$ 2,338 |
|
$ (45) |
|
|
|
|
(1.9) |
|
|
1,794 |
|
|
1,445 |
|
349 |
|
|
|
|
24.2 |
|
|
|
- Coal |
|
|
1,778 |
|
|
1,449 |
|
329 |
|
|
|
|
22.7 |
|
|
2,772 |
|
|
2,660 |
|
112 |
|
|
|
|
4.2 |
|
|
|
- Sulphur and fertilizers |
|
|
2,719 |
|
|
2,659 |
|
60 |
|
|
|
|
2.3 |
|
|
2,629 |
|
|
2,581 |
|
48 |
|
|
|
|
1.9 |
|
|
|
- Forest products |
|
|
2,556 |
|
|
2,517 |
|
39 |
|
|
|
|
1.5 |
|
|
2,415 |
|
|
2,246 |
|
169 |
|
|
|
|
7.5 |
|
|
|
- Industrial and consumer products |
|
|
2,360 |
|
|
2,243 |
|
117 |
|
|
|
|
5.2 |
|
|
2,276 |
|
|
2,373 |
|
(97) |
|
|
|
|
(4.1) |
|
|
|
- Automotive |
|
|
2,240 |
|
|
2,346 |
|
(106) |
|
|
|
|
(4.5) |
|
|
1,291 |
|
|
1,237 |
|
54 |
|
|
|
|
4.4 |
|
|
|
- Intermodal |
|
|
1,287 |
|
|
1,246 |
|
41 |
|
|
|
|
3.3 |
|
|
$ 1,906 |
|
|
$ 1,777 |
|
$ 129 |
|
|
|
|
7.3 |
|
|
|
Total Freight Revenue per Carload |
|
|
$ 1,890 |
|
|
$ 1,798 |
|
$ 92 |
|
|
|
|
5.1 |
(1) Certain prior period figures
have been updated to reflect new information.
|
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Summary of Rail Data (Page 3)
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Second
Quarter |
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Year-to-date |
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2011 |
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2010
(1) |
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Fav/(Unfav) |
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% |
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2011 |
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2010
(1) |
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Fav/(Unfav) |
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% |
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Operations Performance |
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1.65 |
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1.58 |
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(0.07) |
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(4.4) |
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Total operating expenses per gross ton-miles
(GTM) (cents) |
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1.75 |
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1.61 |
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(0.14) |
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(8.7) |
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1.65 |
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1.58 |
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(0.07) |
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(4.4) |
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Operating expenses, exclusive of land sales,
per GTM (cents) (2) |
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1.76 |
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1.61 |
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(0.15) |
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(9.3) |
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62,763 |
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60,766 |
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1,997 |
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3.3 |
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Freight gross ton-miles (millions) |
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118,998 |
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119,290 |
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(292) |
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(0.2) |
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10,059 |
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9,920 |
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139 |
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1.4 |
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Train miles (000) |
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19,304 |
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19,477 |
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(173) |
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(0.9) |
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16,219 |
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15,726 |
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(493) |
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(3.1) |
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Average number of active employees - Total |
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15,567 |
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15,079 |
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(488) |
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(3.2) |
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13,947 |
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13,813 |
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(134) |
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(1.0) |
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Average number of active employees -
Expense |
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13,978 |
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13,818 |
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(160) |
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(1.2) |
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16,439 |
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15,975 |
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(464) |
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(2.9) |
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Number of employees at end of period -
Total |
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16,439 |
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15,975 |
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(464) |
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(2.9) |
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14,067 |
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13,887 |
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(180) |
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(1.3) |
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Number of employees at end of period -
Expense |
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14,067 |
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13,887 |
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(180) |
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(1.3) |
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1.14 |
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1.13 |
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(0.01) |
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(0.9) |
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U.S. gallons of locomotive fuel per 1,000 GTMs
- freight & yard |
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1.22 |
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1.18 |
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(0.04) |
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(3.4) |
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70.2 |
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68.3 |
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(1.9) |
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(2.8) |
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U.S. gallons of locomotive fuel consumed -
total (millions) (3) |
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143.3 |
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139.8 |
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(3.5) |
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(2.5) |
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3.50 |
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2.55 |
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(0.95) |
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(37.3) |
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Average fuel price (U.S. dollars per U.S.
gallon) |
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3.31 |
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2.49 |
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(0.82) |
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(32.9) |
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Fluidity Data |
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20.1 |
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19.9 |
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(0.2) |
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(1.0) |
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Average terminal dwell - AAR definition
(hours) |
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21.8 |
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21.9 |
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0.1 |
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0.5 |
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20.0 |
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23.3 |
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(3.3) |
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(14.2) |
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Average train speed - AAR definition (mph) |
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19.9 |
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23.1 |
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(3.2) |
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(13.9) |
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154.3 |
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169.2 |
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(14.9) |
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(8.8) |
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Car miles per car day (4) |
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146.1 |
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158.4 |
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(12.3) |
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(7.8) |
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54.2 |
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48.0 |
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(6.2) |
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(12.9) |
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Average daily active cars on-line (000)
(4) |
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54.7 |
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50.8 |
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(3.9) |
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(7.7) |
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1,114 |
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1,034 |
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(80) |
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(7.7) |
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Average daily active road locomotives
on-line |
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1,088 |
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1,006 |
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(82) |
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(8.2) |
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Safety |
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1.75 |
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1.26 |
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(0.49) |
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(38.9) |
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FRA personal injuries per 200,000
employee-hours |
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1.74 |
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1.59 |
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(0.15) |
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(9.4) |
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1.56 |
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2.00 |
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0.44 |
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22.0 |
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FRA train accidents per million
train-miles |
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2.01 |
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1.72 |
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(0.29) |
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(16.9)
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(1) |
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Certain prior period figures have been revised to conform with
current presentation or have been updated to reflect new
information.
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(2) |
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Operating expenses exclusive of land sales, per GTM is
calculated consistently with total operating expenses per GTM
except for the exclusion of net gains on land sales of $2.0 million
and $0.8 million for the three months ended June 30, 2011 and 2010,
respectively, and $1.8 million and $3.2 million for the six months
ended June 30, 2011 and 2010, respectively.
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(3) |
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Includes gallons of fuel consumed from freight, yard and
commuter service but excludes fuel used in capital projects and
other non-freight activities.
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(4) |
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Incorporates a new reporting methodology which excludes cars
already placed at a customer location waiting for loading or
unloading or cars that cannot be placed at a customers location due
to shipper or receiver issues. |
SOURCE Canadian Pacific