Canadian Pacific Railway and Elk Valley Coal reach five-year agreement
05 Aprile 2005 - 2:30PM
PR Newswire (US)
Canadian Pacific Railway and Elk Valley Coal reach five-year
agreement CALGARY, April 5 /PRNewswire-FirstCall/ -- Canadian
Pacific Railway (TSX/NYSE: CP) and Fording Canadian Coal Trust
(TSX:FDG.UN, NYSE:FDG) today announced CPR and Elk Valley Coal
Corporation have reached a five-year agreement for the
transportation of metallurgical coal from all of Elk Valley Coal's
mines in southeast British Columbia to Vancouver area ports for
export. The key elements of the confidential contract are: - a
five-year deal covering Elk Valley Coal's five mines in southeast
B.C. that is retroactive to April 1, 2004, and extends to March 31,
2009; - a commitment to increase the base volumes of coal to be
moved in line with Elk Valley Coal's planned capacity increases; -
a framework for the movement of additional tonnes above the base
volume during the 2006-2008 coal years, with a rate premium on the
additional tonnes; - fixed coal year rates for the first three
years of the contract, with the 2004 rate being approximately 20%
higher than the 2003 rate and the 2005 and 2006 rates being in the
order of 60% higher than the 2003 rate; - rates for the 2007 and
2008 coal years that will be linked to Elk Valley Coal's price for
coal with a floor and ceiling rate, both of which will be higher
than the 2004 rate; - a fuel cost adjustment mechanism for the last
two years of the contract. In addition, the parties resolved a
number of other operations and commercial issues. CPR and Elk
Valley Coal have agreed to discontinue all legal and regulatory
proceedings relating to their previous contract dispute over the
transportation of coal from Elk Valley Coal's five coal mines in
southeast British Columbia to Vancouver area ports for export. "We
are very pleased to have finalized this new contract with Elk
Valley Coal," said Rob Ritchie, CPR President and CEO. "This
contract provides clarity and stability in our operational and
financial relationship. Both parties can now work together to take
full advantage of the increasing global demand for metallurgical
coal." As a result of this contract signing, CPR projects an
increase of $0.55 to $0.60 in 2005 earnings per share(1) (EPS) and,
therefore, is increasing its 2005 EPS(1) guidance to a range of
$3.15 to $3.25. This would represent an increase in the range of
38% to 43%, compared with 2004 results. CPR will discuss the impact
of this agreement with analysts and the media in a short conference
call beginning at 10:00 a.m. EDT (8:00 a.m. MDT) on April 5th.
CONFERENCE CALL ACCESS ---------------------- Dial-in numbers:
1-800-814-4857 or 416-640-4127. Callers should dial in 10 minutes
prior to the call to register. A replay of the conference call will
be available by phone through April 12, 2005, at 1-877-289-8525 or
416-640-1917, pass code 21120239 followed by the number sign. About
Canadian Pacific Railway Canadian Pacific Railway is a
transcontinental carrier operating in Canada and the U.S. Its
14,000-mile rail network serves the principal centres of Canada,
from Montreal to Vancouver, and the U.S. Northeast and Midwest
regions. CPR feeds directly into America's heartland from the East
and West coasts. Alliances with other carriers extend its market
reach throughout the U.S. and into Mexico. Canadian Pacific
Logistics Solutions provides logistics and supply chain expertise
worldwide. For more information, visit CPR's website at
http://www.cpr.ca/. NOTE ON FORWARD-LOOKING STATEMENTS
---------------------------------- This news release contains
forward-looking information. Actual future results may differ
materially. The risks, uncertainties and other factors that could
influence actual results are described in CPR's annual report and
annual information form, and may be updated in CPR's consolidated
interim financial statements and interim Management's Discussion
and Analysis, which are filed with securities regulators from time
to time. However, CPR undertakes no obligation to update publicly
or otherwise revise any forward-looking information, whether as a
result of new information, future events, or otherwise. Financial
results in this news release are reported in Canadian dollars.
(1)NON-GAAP EARNINGS MEASURE ---------------------------- The EPS
guidance discussed in this news release is based on a non-GAAP
earnings measure. CPR presents non-GAAP earnings measures to
provide a basis for evaluating underlying earnings trends that can
be compared with prior financial results. EPS excludes foreign
currency translation effects on long-term debt, which can be
volatile and short term, as well as other specified items, which
are not among CPR's normal ongoing revenues and operating expenses.
The impact of volatile short-term rate fluctuations on
foreign-denominated debt is only realized when long-term debt
matures or is settled. It should be noted that EPS has no
standardized meaning and is not defined by Canadian generally
accepted accounting principles and, therefore, is unlikely to be
comparable to similar measures presented by other companies.
DATASOURCE: Canadian Pacific Railway CONTACT: Paul Bell,
Vice-President, Investor Relations, Tel.: (403) 319-3591, ; Len
Cocolicchio (media relations), Tel.: (403) 319-7591, Cell: (403)
650-2748,
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