Delivers best first quarter results in company's
history
CALGARY, April 24, 2013
/PRNewswire/ - Canadian Pacific Railway Limited (TSX: CP) (NYSE:
CP) today announced record Q1 2013 results.
Reported net income in the first quarter was $217 million, or $1.24 per diluted share, versus $142 million, or $0.82 per share, in the first quarter of
2012. This represents a 51 per cent year-over-year
improvement in earnings per share.
FIRST-QUARTER 2013 RESULTS COMPARED WITH FIRST-QUARTER 2012:
- Total revenues were $1,495
million, an increase of 9 per cent and a quarterly
record
- Operating expenses were $1,133
million, an increase of 3 per cent
- Operating income was $362
million, an increase of 32 per cent
- Operating ratio was 75.8 per cent, a 430 basis point
improvement and a quarterly record
"CP delivered the best first quarter results in its history
despite challenging winter conditions," said E. Hunter Harrison, Chief Executive
Officer. "This is a true testament to the determination and
perseverance of our outstanding team of railroaders. There
remains a lot of work to do as we continue to make significant
changes to our operating model. With a very strong start to
the year and momentum quickly building, I am now even more
confident that we are on pace toward the best year-end financial
and operating performance in CP's history."
"The transformational journey of the railway continues," added
Harrison. "Through ongoing culture change and focused,
disciplined execution of the plan, we will make this franchise even
stronger, adding significant value to customers and
shareholders."
Editor's Note
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
April 24, 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 "Invest In CP" tab.
A replay of the conference call will be available by phone
through May 24, 2013 at 416-849-0833
or toll free 1-855-859-2056, password 31843416. A webcast of the
presentation and an audio file will be available at www.cpr.ca
under "Invest In CP" tab.
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.
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 March
31 |
|
|
|
2013 |
|
2012 |
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
Freight |
$ |
1,459 |
$ |
1,340 |
|
Other |
|
36 |
|
36 |
Total revenues |
|
1,495 |
|
1,376 |
Operating expenses |
|
|
|
|
|
Compensation and benefits |
|
402 |
|
391 |
|
Fuel |
|
270 |
|
269 |
|
Materials |
|
72 |
|
64 |
|
Equipment rents |
|
46 |
|
50 |
|
Depreciation and amortization |
|
141 |
|
127 |
|
Purchased services and other |
|
202 |
|
201 |
Total operating expenses |
|
1,133 |
|
1,102 |
|
|
|
|
|
|
Operating income |
|
362 |
|
274 |
Less: |
|
|
|
|
|
Other income and charges |
|
3 |
|
13 |
|
Net interest expense |
|
70 |
|
69 |
Income before income tax expense |
|
289 |
|
192 |
|
|
|
|
|
|
Income tax expense (Note 4) |
|
72 |
|
50 |
Net income |
$ |
217 |
$ |
142 |
|
|
|
|
|
|
Earnings per share (Note 5) |
|
|
|
|
|
Basic earnings per share |
$ |
1.25 |
$ |
0.83 |
|
Diluted earnings per share |
$ |
1.24 |
$ |
0.82 |
|
|
|
|
|
|
Weighted-average number of shares
(millions) |
|
|
|
|
|
Basic |
|
174.3 |
|
170.5 |
|
Diluted |
|
175.8 |
|
172.0 |
|
|
|
|
|
|
Dividends declared per share |
$ |
0.3500 |
$ |
0.3000 |
|
|
|
|
|
|
See Notes to Interim Consolidated
Financial Statements. |
|
|
|
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME
(in millions of Canadian dollars)
(unaudited)
|
|
|
For
the three months |
|
|
|
ended March
31 |
|
|
|
|
2013 |
|
|
2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
217 |
|
$ |
142 |
|
|
|
|
|
|
|
|
|
Net (loss) gain on foreign currency
translation |
|
|
|
|
|
|
|
adjustments, net of hedging activities |
|
(2) |
|
|
5 |
|
|
|
|
|
|
|
|
|
Change in derivatives designated as cash flow
hedges |
|
1 |
|
|
10 |
|
|
|
|
|
|
|
|
|
Change in pension and post-retirement defined
benefit |
|
|
|
|
|
|
|
plans |
|
188 |
|
|
54 |
|
|
|
|
|
|
|
|
|
Other comprehensive income before
income tax expense |
|
187 |
|
|
69 |
|
|
|
|
|
|
|
|
|
Income tax expense |
|
(40) |
|
|
(24) |
|
|
|
|
|
|
|
|
Other comprehensive income (Note 3) |
|
147 |
|
|
45 |
|
|
|
|
|
|
|
|
Comprehensive income |
$ |
364 |
|
$ |
187 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Interim Consolidated Financial
Statements. |
|
|
|
|
|
CONSOLIDATED BALANCE SHEETS
(in millions of Canadian dollars)
(unaudited)
|
|
March 31 |
|
December 31 |
|
|
2013 |
|
2012 |
Assets |
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
347 |
|
$ |
333 |
|
Accounts receivable, net |
|
585 |
|
|
546 |
|
Materials and supplies |
|
190 |
|
|
136 |
|
Deferred income taxes |
|
292 |
|
|
254 |
|
Other current assets |
|
67 |
|
|
60 |
|
|
|
1,481 |
|
|
1,329 |
|
|
|
|
|
|
|
Investments |
|
85 |
|
|
83 |
Properties |
|
13,122 |
|
|
13,013 |
Goodwill and intangible assets |
|
164 |
|
|
161 |
Other assets (Note 9) |
|
175 |
|
|
141 |
Total assets |
$ |
15,027 |
|
$ |
14,727 |
|
|
|
|
|
|
|
Liabilities and shareholders'
equity |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Accounts payable and accrued liabilities |
$ |
1,089 |
|
$ |
1,176 |
|
Long-term debt maturing within one year |
|
154 |
|
|
54 |
|
|
|
1,243 |
|
|
1,230 |
|
|
|
|
|
|
|
Pension and other benefit liabilities (Note
8) |
|
1,172 |
|
|
1,366 |
Other long-term liabilities |
|
315 |
|
|
306 |
Long-term debt |
|
4,590 |
|
|
4,636 |
Deferred income taxes |
|
2,258 |
|
|
2,092 |
Total liabilities |
|
9,578 |
|
|
9,630 |
|
|
|
|
|
|
|
Shareholders' equity |
|
|
|
|
|
|
Share capital |
|
2,183 |
|
|
2,127 |
|
Additional paid-in capital |
|
35 |
|
|
41 |
|
Accumulated other comprehensive loss (Note 3) |
|
(2,621) |
|
|
(2,768) |
|
Retained earnings |
|
5,852 |
|
|
5,697 |
|
|
|
5,449 |
|
|
5,097 |
Total liabilities and shareholders'
equity |
$ |
15,027 |
|
$ |
14,727 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies (Note 9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Interim Consolidated
Financial Statements. |
|
|
|
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions of Canadian dollars)
(unaudited)
|
|
|
For
the three months |
|
|
|
ended March
31 |
|
|
|
2013 |
|
|
2012 |
Operating activities |
|
|
|
|
|
|
Net income |
$ |
217 |
|
$ |
142 |
|
Reconciliation of net income to
cash provided by operating activities: |
|
|
|
|
|
|
|
Depreciation and
amortization |
|
141 |
|
|
127 |
|
|
Deferred income
taxes |
|
63 |
|
|
46 |
|
Pension funding in excess of expense (Note
8) |
|
(9) |
|
|
(7) |
|
Other operating activities, net |
|
2 |
|
|
(29) |
|
Change in non-cash working capital balances related
to operations |
|
(147) |
|
|
(78) |
Cash provided by operating activities |
|
267 |
|
|
201 |
|
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
|
Additions to properties |
|
(203) |
|
|
(233) |
|
Proceeds from sale of properties and other
assets |
|
16 |
|
|
45 |
|
Other (Note 9) |
|
(25) |
|
|
(1) |
Cash used in investing activities |
|
(212) |
|
|
(189) |
|
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
|
Dividends paid |
|
(61) |
|
|
(51) |
|
Issuance of common shares |
|
40 |
|
|
38 |
|
Issuance of long-term debt |
|
- |
|
|
71 |
|
Repayment of long-term debt |
|
(19) |
|
|
(12) |
|
Net decrease in short term borrowings |
|
- |
|
|
(27) |
Cash (used in) provided by financing
activities |
|
(40) |
|
|
19 |
|
|
|
|
|
|
|
|
Effect of foreign currency fluctuations on U.S.
dollar-denominated |
|
|
|
|
|
cash and cash equivalents |
|
(1) |
|
|
(1) |
Cash position |
|
|
|
|
|
|
Increase in cash and cash equivalents |
|
14 |
|
|
30 |
|
Cash and cash equivalents at beginning of
period |
|
333 |
|
|
47 |
Cash and cash equivalents at end of
period |
$ |
347 |
|
$ |
77 |
|
|
|
|
|
|
|
|
Supplemental disclosures of cash flow
information: |
|
|
|
|
|
|
Income taxes paid |
$ |
4 |
|
$ |
4 |
|
Interest paid |
$ |
66 |
|
$ |
51 |
|
|
|
|
|
|
|
|
See Notes to Interim Consolidated Financial
Statements. |
|
|
|
|
|
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS'
EQUITY
(in millions of Canadian dollars, except common share
amounts)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common |
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
shares |
|
|
|
Additional |
other |
|
|
Total |
|
|
(in |
|
Share |
paid-in |
comprehensive |
Retained |
shareholders' |
|
|
millions) |
|
capital |
capital |
loss |
earnings |
equity |
Balance at January 1, 2013 |
173.9 |
|
$ |
2,127 |
$ |
41 |
$ |
(2,768) |
$ |
5,697 |
$ |
5,097 |
Net income |
- |
|
|
- |
|
- |
|
- |
|
217 |
|
217 |
Other comprehensive income (Note 3) |
- |
|
|
- |
|
- |
|
147 |
|
- |
|
147 |
Dividends declared |
- |
|
|
- |
|
- |
|
- |
|
(62) |
|
(62) |
Effect of stock-based compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
expense |
- |
|
|
- |
|
6 |
|
- |
|
- |
|
6 |
Shares issued under stock option |
|
|
|
|
|
|
|
|
|
|
|
|
|
plans |
0.8 |
|
|
56 |
|
(12) |
|
- |
|
- |
|
44 |
Balance at March 31, 2013 |
174.7 |
|
$ |
2,183 |
$ |
35 |
$ |
(2,621) |
$ |
5,852 |
$ |
5,449 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common |
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
shares |
|
|
|
Additional |
other |
|
|
Total |
|
|
(in |
|
Share |
paid-in |
comprehensive |
Retained |
shareholders' |
|
|
millions) |
|
capital |
capital |
loss |
earnings |
equity |
Balance at January 1, 2012 |
170.0 |
|
$ |
1,854 |
$ |
86 |
$ |
(2,736) |
$ |
5,445 |
$ |
4,649 |
Net income |
- |
|
|
- |
|
- |
|
- |
|
142 |
|
142 |
Other comprehensive income (Note 3) |
- |
|
|
- |
|
- |
|
45 |
|
- |
|
45 |
Dividends declared |
- |
|
|
- |
|
- |
|
- |
|
(51) |
|
(51) |
Effect of stock-based compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
expense |
- |
|
|
- |
|
1 |
|
- |
|
- |
|
1 |
Shares issued under stock option |
|
|
|
|
|
|
|
|
|
|
|
|
|
plans |
0.9 |
|
|
55 |
|
(15) |
|
- |
|
- |
|
40 |
Balance at March 31, 2012 |
170.9 |
|
$ |
1,909 |
$ |
72 |
$ |
(2,691) |
$ |
5,536 |
$ |
4,826 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Interim Consolidated Financial
Statements. |
|
|
|
|
|
|
|
|
CANADIAN PACIFIC RAILWAY LIMITED
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2013
(unaudited)
1 Basis of presentation
These unaudited interim consolidated financial statements of
Canadian Pacific Railway Limited ("CP", or "the Company") 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 2012 consolidated financial
statements. The accounting policies used are consistent with
the accounting policies used in preparing the 2012 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 statements include all adjustments necessary to present
fairly such information. Interim results are not necessarily
indicative of the results expected for the fiscal year.
2 Accounting changes
Accumulated other comprehensive income
In February 2013, the Financial
Accounting Standards Board ("FASB") issued Accounting Standards
Update ("ASU") 2013-02, Reporting of Amounts Reclassified Out of
Accumulated Other Comprehensive Income, an amendment to FASB ASC
Topic 220. The update requires disclosure of amounts reclassified
out of accumulated other comprehensive income by component. In
addition, an entity is required to present either on the face of
the statement of operations or in the notes, significant amounts
reclassified out of accumulated other comprehensive income by the
respective line items of net income but only if the amount
reclassified is required to be reclassified to net income in its
entirety in the same reporting period. For amounts not reclassified
in their entirety to net income, an entity is required to
cross-reference to other disclosures that provide additional detail
about those amounts. This ASU is effective prospectively for fiscal
years, and interim periods within those years, beginning after
December 15, 2012. The disclosure
requirements of this ASU for the three months ended March 31, 2013 are presented in Note 3.
3 Changes in accumulated other comprehensive loss
(AOCL) by component
|
|
|
|
|
|
|
|
(in millions of Canadian
dollars) |
Net gain on
foreign
currency
translation
adjustments,
net of hedging
activities(1) |
Change in
derivatives
designated as
cash flow
hedges and
other (1) |
Change in
pension and
post-
retirement
defined
benefit
plans(1)(a) |
Total(1) |
|
|
January 1, 2013 |
$ 74 |
$ (14) |
$ ( 2,828) |
$ (2,768) |
|
|
Other comprehensive income (loss)
before reclassifications |
8 |
(7) |
94 |
95 |
|
|
Amounts reclassified from
accumulated other comprehensive
loss |
- |
6 |
46 |
52 |
|
|
Net current-period other
comprehensive income (loss) |
8 |
(1) |
140 |
147 |
|
|
March 31, 2013 |
$ 82 |
$ (15) |
$ (2,688) |
$ (2,621) |
|
|
January 1, 2012 |
$ 72 |
$ (20) |
$ (2,788) |
$ (2,736) |
|
|
Other comprehensive income (loss)
before reclassifications |
(2) |
10 |
- |
8 |
|
|
Amounts reclassified from
accumulated other comprehensive
loss |
- |
(3) |
40 |
37 |
|
|
Net current-period other
comprehensive income (loss) |
(2) |
7 |
40 |
45 |
|
|
March 31, 2012 |
$ 70 |
$ (13) |
$ (2,748) |
$ (2,691) |
|
|
|
|
|
|
|
|
|
(a) Amounts
reclassified from accumulated other comprehensive loss |
|
|
|
|
|
|
|
|
|
|
Q1 2013 |
Q1 2012 |
|
|
|
|
Amortization of prior service costs
(2) |
(6) |
- |
|
|
|
|
Recognition
of net actuarial loss (2) |
67 |
53 |
|
|
|
|
Total before income tax |
$ 61 |
$ 53 |
|
|
|
|
Income tax
benefit |
(15) |
(13) |
|
|
|
|
Net of
income tax |
$ 46 |
$ 40 |
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts are presented net of income
tax.
(2) Impacts Compensation and benefits on the
Consolidated Statements of Income. |
|
4 Income taxes
|
|
For
the three months |
|
|
ended March
31 |
|
|
|
2013 |
|
2012 |
|
(in millions of Canadian dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current income tax expense |
|
$ |
9 |
|
$ |
4 |
|
Deferred income tax expense |
|
|
63 |
|
|
46 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
$ |
72 |
|
$ |
50 |
The effective income tax rate for the three months ended
March 31, 2013 was 24.8% (three
months ended March 31, 2012 - 26.0%)
as a result of a benefit recognized for the U.S. federal track
maintenance credit of $6 million for
2012 enacted in 2013.
5 Earnings per share
At March 31, 2013, the number of
shares outstanding was 174.7 million (March
31, 2012 - 170.9 million).
Basic earnings per share have been calculated using net income for
the period divided by the weighted-average number of shares
outstanding during the period.
The number of shares used in earnings per share calculations is
reconciled as follows:
|
|
|
For
the three months |
|
|
|
ended March
31 |
|
(in millions) |
|
2013 |
|
2012 |
|
|
|
|
|
|
|
|
|
|
Weighted-average shares |
|
|
|
|
|
|
|
outstanding |
|
174.3 |
|
170.5 |
|
|
Dilutive effect of stock
options |
|
1.5 |
|
1.5 |
|
|
|
|
|
|
|
|
|
|
Weighted-average diluted |
|
175.8 |
|
172.0 |
|
|
|
shares outstanding |
|
|
|
|
|
For the three months ended March 31,
2013, no options were excluded from the computation of
diluted earnings per share because their effects were not dilutive
(three months ended March 31, 2012 -
237,933 options).
6 Financial instruments
A. Fair values of financial instruments
The Company categorizes its financial assets and liabilities
measured at fair value in line with the fair value hierarchy
established by GAAP that prioritizes, with respect to reliability,
the inputs to valuation techniques used to measure fair
value. This hierarchy consists of three broad levels.
Level 1 inputs consist of quoted prices (unadjusted) in active
markets for identical assets and liabilities and have the highest
priority. Level 2 and 3 inputs are based on significant other
observable inputs and significant unobservable inputs,
respectively, and have lower priorities.
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.
The carrying values of financial instruments equal or
approximate their fair values with the exception of long-term debt
which has a fair value of approximately $5,771 million and a carrying value of
$4,744 million at March 31, 2013. At December 31, 2012, long-term debt had a fair
value of $5,688 million and a
carrying value of $4,690
million. The estimated fair value of current and
long-term borrowings has been determined based on market
information where available, or by discounting future payments of
interest and principal at estimated interest rates expected to be
available to the Company at period end. All derivatives and
long-term debt are classified as Level 2.
B. Financial risk management
Derivative financial instruments may be used 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 conducts business transactions and owns assets in both
Canada and the United States. As a result, the
Company is exposed to fluctuations in value of financial
commitments, assets, liabilities, income or cash flows due to
changes in FX rates. The Company may enter into foreign
exchange risk management transactions primarily to manage
fluctuations in the exchange rate between Canadian and U.S.
currencies. FX exposure is primarily mitigated through
natural offsets created by revenues, expenditures and balance sheet
positions incurred in the same currency. Where appropriate,
the Company may negotiate with customers and suppliers to reduce
the net exposure.
Occasionally the Company may 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 U.S. dollar denominated long-term debt and gains and
losses on its net investment. The effective portion
recognized in "Other comprehensive income" for the three months
ended March 31, 2013 was an
unrealized foreign exchange loss of $67
million compared to the unrealized foreign exchange gain of
$60 million for the three months
ended March 31, 2012. There was
no ineffectiveness during the three months ended March 31, 2013 and 2012.
Foreign exchange forward contracts
The Company may enter into FX forward contracts to lock-in the
amount of Canadian dollars it has to pay on its U.S. denominated
debt maturities.
At March 31, 2013, the Company had
FX forward contracts to fix the exchange rate on US$100 million of principal outstanding on a
capital lease due in January 2014,
US$175 million of its 6.50% Notes due
in May 2018, and US$100 million of its 7.25% Notes due in
May 2019, unchanged from December 31, 2012. At March 31, 2012, the Company had FX forward
contracts to fix the exchange rate on US$175
million of its 6.50% 2018 Notes, and US$100 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
obligations mature.
During the three months ended March 31,
2013, an unrealized foreign exchange gain of $5 million compared to the unrealized loss of
$4 million for the three months ended
March 31, 2012 was recorded in "Other
income and charges" in relation to these derivatives. These
gains recorded in "Other income and charges" were largely offset by
the unrealized losses on the underlying debt which the derivatives
were designated to hedge. Similarly, the losses in 2012 were
largely offset by the unrealized gains on the underlying debt.
At March 31, 2013, the unrealized
gain derived from these FX forwards was $13
million of which $2 million
was included in "Other current assets" and $11 million in "Other assets" with the offset
reflected as an unrealized gain of $6
million in "Accumulated other comprehensive loss" and as an
unrealized gain of $7 million in
"Retained earnings". At March 31,
2012, the unrealized gain derived from these FX forwards was
$6 million which was included in
"Other assets" with the offset reflected as an unrealized gain of
$3 million in "Accumulated other
comprehensive loss" and as an unrealized gain of $3 million in "Retained earnings".
At March 31, 2013, the Company
expected that, during the next twelve months, unrealized pre-tax
losses of $2 million would be
reclassified to "Other income and charges".
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.
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 local and 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 may not be completely
recovered from shippers due to timing and volatility in the
market. In the past, to address the residual portion of CP's
fuel costs not mitigated by its fuel recovery programs, CP had a
systematic hedge program. As a result of improving coverage
from its fuel cost recovery programs, CP exited its hedging program
during the first quarter of 2013.
Energy futures
During the three months ended March 31,
2013, the Company settled its remaining diesel futures
contracts, accounted for as cash flow hedges, to purchase 20
million U.S. gallons during the period January to December 2013 for a realized gain and proceeds of
$2 million. During the
period $1 million of this gain was
recorded as a reduction to "Fuel" expense and $1 million was reflected in "Accumulated other
comprehensive loss" to be amortized to "Fuel" expense in 2013 as
the related diesel is purchased. During the three months
ended March 31, 2012, the impact of
settled swaps decreased "Fuel" expense by $1
million, as a result of realized gains.
At March 31, 2013, the Company had
no remaining diesel futures contracts. At December 31, 2012, the unrealized loss on these
contracts was negligible.
7 Stock-based compensation
At March 31, 2013, the Company had
several stock-based compensation plans, including stock option
plans, various cash settled liability plans, which are remeasured
to fair value quarterly based on share price and vesting
conditions, and an employee stock savings plan. These plans
resulted in an expense for the three months ended March 31, 2013, of $33
million (three months ended March 31,
2012 - expense of $23
million).
Regular options
In the first three months of 2013, under CP's stock option
plans, the Company issued 482,500 regular options at the weighted
average price of $118.25 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 12 months and 48 months
after the grant date, and will expire after 10 years.
Under the fair value method, the total fair value of the regular
options granted during the period was $16
million at the grant date, with a weighted-average fair
value of $32.68 per regular
option. The weighted average fair value assumptions were
approximately:
|
|
|
|
|
|
|
|
|
|
For the three months |
|
|
|
|
ended March, 31 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant price |
$ |
118.25 |
|
|
|
Expected option life (years) (1) |
|
6.25 |
|
|
|
Risk-free interest rate (2) |
|
1.55 |
% |
|
|
Expected stock price volatility (3) |
|
30.18 |
% |
|
|
Expected annual dividends per share
(4) |
$ |
1.40 |
|
|
|
Expected forfeiture rate
(5) |
|
1.4 |
% |
|
|
|
|
|
|
|
|
(1) Represents the period of time that awards are
expected to be outstanding. Historical data on exercise behaviour
or when available, specific expectations regarding future exercise
behaviour, were 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 at the
time of grant. The Company does not employ different dividend
yields throughout the contractual term of the
option. |
(5) The Company estimated forfeitures based on past
experience. This rate is monitored on a periodic basis. |
Performance share unit ("PSU") plan
In the three months ended March 31,
2013, the Company issued 186,558 PSUs with a grant date fair
value of $21 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, or in CP common shares, at the
discretion of the Chief Executive Officer, approximately three
years after the grant date, contingent upon CP's performance
(performance factors). The fair value of PSUs
is 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 conditions
stipulated in the grant.
Deferred share unit ("DSU") plan
In the three months ended March 31,
2013, the Company granted 43,484 DSUs with a grant date fair
value of $5 million to certain key
employees and Directors. DSUs for employees vest over various
periods of up to 48 months and are only redeemable for a specified
period after employment is terminated. An expense to income for
DSUs is recognized over the vesting period for both the initial
subscription price and the change in value between reporting
periods.
Restricted share unit ("RSU") plan
During the three months ended March 31,
2013, $9 million in RSUs were
paid out.
8 Pensions and other benefits
In the three months ended March 31,
2013, the Company made contributions of $30 million (in the three months ended
March 31, 2012 - $17 million) to its defined benefit pension
plans. The elements of net periodic benefit cost for defined
benefit pension plans and other benefits recognized in the quarter
included the following components:
|
|
|
For the three
months |
|
|
|
|
|
ended March
31 |
|
|
|
|
|
Pensions |
|
|
Other benefits |
|
|
|
(in millions of Canadian dollars) |
|
2013 |
|
|
2012 |
|
|
2013 |
|
|
2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current service cost (benefits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
earned by employees in the |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
period) |
$ |
35 |
|
$ |
33 |
|
$ |
4 |
|
$ |
5 |
|
|
|
Interest cost on benefit obligation |
|
112 |
|
|
113 |
|
|
5 |
|
|
6 |
|
|
|
Expected return on fund assets |
|
(186) |
|
|
(188) |
|
|
- |
|
|
- |
|
|
|
Amortization of prior service costs |
|
(6) |
|
|
- |
|
|
- |
|
|
- |
|
|
|
Recognition of net actuarial loss |
|
66 |
|
|
52 |
|
|
1 |
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net periodic benefit cost |
$ |
21 |
|
$ |
10 |
|
$ |
10 |
|
$ |
12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CP has reached agreements with all of the unions which it had
been bargaining with in Canada in
2012. The new agreements introduced amendments to pension
plans. Among other changes, the amendments established a cap
on pension for each year of pensionable service. Under the
amendments, the plan participant will continue to earn additional
pensionable years of service as normal but with a limit of the cap
for each year earned. The plan amendment has been accounted for in
the period the new agreement was ratified. As a result of the plan
amendments, the projected benefit obligation decreased by
$127 million from December 31, 2012, with a corresponding increase
to other comprehensive income and resulting in a reduction of
accumulated other comprehensive loss as prior service credits. The
prior service credits are recognized in net periodic pension
expense over the remaining terms of the applicable union agreements
(averaging approximately two years).
At the date of the plan amendments, we have assessed the
significance of such amendments to the consolidated financial
statements and have determined that a remeasurement of plan assets
and obligations as of the date of the above plan amendments was not
warranted.
9 Commitments and contingencies
In the normal course of its operations, the Company becomes
involved in various legal actions, including claims relating to
injuries and damages 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 March 31, 2013, 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 March 31, 2013, the Company had
committed to total future capital expenditures amounting to
$357 million and operating
expenditures relating to supplier purchase obligations, such as
locomotive maintenance and overhaul agreements, as well as
agreements to purchase other goods and services amounting to
approximately $1.7 billion for the
years 2013-2031.
Minimum payments under operating leases were estimated at
$747 million in aggregate, with
annual payments in each of the five years following 2013 of (in
millions): 2014 - $114; 2015 -
$97; 2016 - $79; 2017 - $61 and
2018 - $50.
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 accruals for environmental remediation represent CP's best
estimate of its probable future obligation and include 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.
The expense included in "Purchased services and other" for the
three months ended March 31, 2013 was
$1 million (three months ended
March 31, 2012 - expense of
$1 million). 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 March 31, 2013 was
$90 million as compared with
$89 million as at December 31, 2012. Payments are expected to
be made over 10 years to 2023.
During the three months ended March 31,
2013, CP provided an interest free loan pursuant to a court
order in the amount of $20 million to
a corporation owned by a court appointed trustee to facilitate the
acquisition of a building. The building will be held in trust
until the resolution of legal proceedings with regard to CP's
entitlement to an exercised purchase option of the building. If CP
is successful in these proceedings, title to the building will
transfer to CP with an additional payment of $20 million; otherwise the loan will be
repaid.
Summary of Rail
Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter |
Financial (millions, except per
share data) |
|
2013 |
|
2012 |
|
Fav/(Unfav) |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freight revenue |
|
$ |
1,459 |
|
$ |
1,340 |
|
$ |
119 |
|
9 |
|
Other revenue |
|
|
36 |
|
|
36 |
|
|
- |
|
- |
Total revenues |
|
|
1,495 |
|
|
1,376 |
|
|
119 |
|
9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits |
|
|
402 |
|
|
391 |
|
|
(11) |
|
(3) |
|
Fuel |
|
|
270 |
|
|
269 |
|
|
(1) |
|
- |
|
Materials |
|
|
72 |
|
|
64 |
|
|
(8) |
|
(13) |
|
Equipment rents |
|
|
46 |
|
|
50 |
|
|
4 |
|
8 |
|
Depreciation and amortization |
|
|
141 |
|
|
127 |
|
|
(14) |
|
(11) |
|
Purchased services and other |
|
|
202 |
|
|
201 |
|
|
(1) |
|
- |
Total operating expenses |
|
|
1,133 |
|
|
1,102 |
|
|
(31) |
|
(3) |
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
362 |
|
|
274 |
|
|
88 |
|
32 |
|
|
|
|
|
|
|
|
|
|
|
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income and charges |
|
|
3 |
|
|
13 |
|
|
10 |
|
77 |
|
Net interest expense |
|
|
70 |
|
|
69 |
|
|
(1) |
|
(1) |
|
|
|
|
|
|
|
|
|
|
|
|
Income before income tax expense |
|
|
289 |
|
|
192 |
|
|
97 |
|
51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
72 |
|
|
50 |
|
|
(22) |
|
(44) |
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
217 |
|
$ |
142 |
|
$ |
75 |
|
53 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating ratio (%) |
|
|
75.8 |
|
|
80.1 |
|
|
4.3 |
|
430 |
bps |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
$ |
1.25 |
|
$ |
0.83 |
|
$ |
0.42 |
|
51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
|
$ |
1.24 |
|
$ |
0.82 |
|
$ |
0.42 |
|
51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares
outstanding (millions) |
|
|
174.3 |
|
|
170.5 |
|
|
3.8 |
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of diluted shares outstanding (millions) |
|
|
175.8 |
|
|
172.0 |
|
|
3.8 |
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign Exchange |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average foreign exchange rate
(US$/Canadian$) |
|
|
0.99 |
|
|
1.00 |
|
|
0.01 |
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average foreign exchange rate
(Canadian$/US$) |
|
|
1.01 |
|
|
1.00 |
|
|
0.01 |
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First
Quarter |
|
|
2013 |
|
2012 |
|
Fav/(Unfav) |
|
% |
Commodity Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freight Revenues
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
- Grain |
|
$ |
314 |
|
$ |
288 |
|
$ |
26 |
|
9 |
|
|
- Coal |
|
|
149 |
|
|
137 |
|
|
12 |
|
9 |
|
|
- Fertilizers and sulphur |
|
|
152 |
|
|
126 |
|
|
26 |
|
21 |
|
|
- Industrial and consumer products |
|
|
372 |
|
|
298 |
|
|
74 |
|
25 |
|
|
- Automotive |
|
|
97 |
|
|
105 |
|
|
(8) |
|
(8) |
|
|
- Forest products |
|
|
53 |
|
|
50 |
|
|
3 |
|
6 |
|
|
- Intermodal |
|
|
322 |
|
|
336 |
|
|
(14) |
|
(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Freight Revenues |
|
$ |
1,459 |
|
$ |
1,340 |
|
$ |
119 |
|
9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of Revenue Ton-Miles (RTM)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Grain |
|
|
8,430 |
|
|
8,600 |
|
|
(170) |
|
(2) |
|
|
- Coal |
|
|
5,640 |
|
|
5,205 |
|
|
435 |
|
8 |
|
|
- Fertilizers and sulphur |
|
|
4,952 |
|
|
4,042 |
|
|
910 |
|
23 |
|
|
- Industrial and consumer products |
|
|
9,536 |
|
|
7,036 |
|
|
2,500 |
|
36 |
|
|
- Automotive |
|
|
604 |
|
|
659 |
|
|
(55) |
|
(8) |
|
|
- Forest products |
|
|
1,223 |
|
|
1,215 |
|
|
8 |
|
1 |
|
|
- Intermodal |
|
|
5,778 |
|
|
6,054 |
|
|
(276) |
|
(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total RTMs |
|
|
36,163 |
|
|
32,811 |
|
|
3,352 |
|
10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freight Revenue per RTM (cents)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Grain |
|
|
3.73 |
|
|
3.35 |
|
|
0.38 |
|
11 |
|
|
- Coal |
|
|
2.64 |
|
|
2.63 |
|
|
0.01 |
|
- |
|
|
- Fertilizers and sulphur |
|
|
3.06 |
|
|
3.12 |
|
|
(0.06) |
|
(2) |
|
|
- Industrial and consumer products |
|
|
3.90 |
|
|
4.24 |
|
|
(0.34) |
|
(8) |
|
|
- Automotive |
|
|
16.09 |
|
|
15.93 |
|
|
0.16 |
|
1 |
|
|
- Forest products |
|
|
4.33 |
|
|
4.12 |
|
|
0.21 |
|
5 |
|
|
- Intermodal |
|
|
5.58 |
|
|
5.55 |
|
|
0.03 |
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Freight Revenue per RTM |
|
|
4.04 |
|
|
4.08 |
|
|
(0.04) |
|
(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carloads (thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
- Grain |
|
|
108 |
|
|
110 |
|
|
(2) |
|
(2) |
|
|
- Coal |
|
|
81 |
|
|
78 |
|
|
3 |
|
4 |
|
|
- Fertilizers and sulphur |
|
|
49 |
|
|
42 |
|
|
7 |
|
17 |
|
|
- Industrial and consumer products |
|
|
127 |
|
|
115 |
|
|
12 |
|
10 |
|
|
- Automotive |
|
|
35 |
|
|
42 |
|
|
(7) |
|
(17) |
|
|
- Forest products |
|
|
18 |
|
|
18 |
|
|
- |
|
- |
|
|
- Intermodal |
|
|
241 |
|
|
251 |
|
|
(10) |
|
(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Carloads |
|
|
659 |
|
|
656 |
|
|
3 |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freight Revenue per Carload
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Grain |
|
$ |
2,906 |
|
$ |
2,618 |
|
$ |
288 |
|
11 |
|
|
- Coal |
|
|
1,849 |
|
|
1,756 |
|
|
93 |
|
5 |
|
|
- Fertilizers and sulphur |
|
|
3,067 |
|
|
3,000 |
|
|
67 |
|
2 |
|
|
- Industrial and consumer products |
|
|
2,921 |
|
|
2,591 |
|
|
330 |
|
13 |
|
|
- Automotive |
|
|
2,742 |
|
|
2,500 |
|
|
242 |
|
10 |
|
|
- Forest products |
|
|
3,028 |
|
|
2,778 |
|
|
250 |
|
9 |
|
|
- Intermodal |
|
|
1,339 |
|
|
1,339 |
|
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Freight Revenue per Carload |
|
$ |
2,214 |
|
$ |
2,043 |
|
$ |
171 |
|
8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First
Quarter |
|
|
2013 |
|
2012(1) |
|
Fav/(Unfav) |
|
% |
Operations Performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freight gross ton-miles
(millions) |
|
|
67,679 |
|
|
62,688 |
|
|
4,991 |
|
8 |
Train miles (thousands) |
|
|
9,993 |
|
|
10,342 |
|
|
349 |
|
3 |
Average train weight - excluding local
traffic (tons) |
|
|
7,209 |
|
|
6,420 |
|
|
789 |
|
12 |
Average train length - excluding local
traffic (feet)(2) |
|
|
6,298 |
|
|
5,757 |
|
|
541 |
|
9 |
Average train speed - AAR definition
(mph) |
|
|
24.2 |
|
|
25.1 |
|
|
(0.9) |
|
(4) |
Average terminal dwell - AAR
definition (hours) |
|
|
15.7 |
|
|
17.3 |
|
|
1.6 |
|
9 |
Car miles per car day |
|
|
222.0 |
|
|
208.4 |
|
|
13.6 |
|
7 |
|
|
|
|
|
|
|
|
|
|
|
|
Locomotive productivity (daily average
GTMs/active HP) |
|
|
205.5 |
|
|
174.8 |
|
|
30.7 |
|
18 |
|
|
|
|
|
|
|
|
|
|
|
|
Fuel efficiency(3) |
|
|
1.13 |
|
|
1.23 |
|
|
0.10 |
|
8 |
U.S. gallons of locomotive fuel
consumed (millions)(4) |
|
|
75.7 |
|
|
76.6 |
|
|
0.9 |
|
1 |
Average fuel price (U.S. dollars per
U.S. gallon) |
|
|
3.55 |
|
|
3.50 |
|
|
(0.05) |
|
(1) |
|
|
|
|
|
|
|
|
|
|
|
|
Total employees
(average)(5) |
|
|
14,920 |
|
|
16,671 |
|
|
1,751 |
|
11 |
Total employees (end of
period)(5) |
|
|
15,112 |
|
|
16,862 |
|
|
1,750 |
|
10 |
Workforce (end of
period)(6) |
|
|
16,108 |
|
|
18,945 |
|
|
2,837 |
|
15 |
|
|
|
|
|
|
|
|
|
|
|
|
Safety |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FRA personal injuries per 200,000
employee-hours |
|
|
1.60 |
|
|
1.15 |
|
|
(0.45) |
|
(39) |
FRA train accidents per million
train-miles |
|
|
1.98 |
|
|
1.58 |
|
|
(0.40) |
|
(25) |
|
|
|
|
|
|
|
|
|
|
|
(1) |
Certain prior period figures have been revised to conform with
current presentation or have been updated to reflect new
information. |
(2) |
Incorporates a new reporting methodology where average train
length is the sum of each car and locomotive's equipment length
multiplied by the distance travelled, divided by train miles.
Local trains are excluded from this measure. |
(3) |
Fuel efficiency is defined as U.S. gallons of locomotive fuel
consumed per 1,000 GTMs - freight and yard. |
(4) |
Includes gallons of fuel consumed from freight, yard and
commuter service but excludes fuel used in capital projects and
other non-freight activities. |
(5) |
An employee is defined as an individual, including trainees,
who has worked more than 40 hours in a standard biweekly pay
period.
This excludes part time employees, contractors, and
consultants. |
(6) |
Workforce is defined as total employees plus part time
employees, contractors, and consultants. |
SOURCE Canadian Pacific