Canadian Pacific responds to grain hopper car maintenance adjustment
20 Febbraio 2008 - 1:30PM
PR Newswire (US)
CALGARY, Feb. 20 /PRNewswire-FirstCall/ -- Canadian Pacific
(TSX/NYSE: CP) responded today to the recent announcement by the
Canadian Transportation Agency (CTA) regarding the adjustment to
the revenue entitlement under the Canada Transportation Act. The
CTA announced a volume-related adjustment that translates to a
$2.59 per tonne impact on the railway revenue entitlement. The
decision is retroactive to August 1, 2007. "We disagree, among
other things, with the retroactive component of the CTA's
adjustment, and we will vigorously challenge it," said Fred Green,
President and Chief Executive Officer. "We believe the decision to
make the adjustment retroactive is not supportable, based on the
legal advice we have received. We are confident we can successfully
appeal the CTA's decision in the Federal Court." "Although we
expected this announcement, the amount of the adjustment is higher
than the assumptions we made for our 2008 outlook, confirmed on
January 29, 2008," said Mike Lambert, Chief Financial Officer. "The
prospective application of the CTA's adjustment will affect our EPS
guidance by reducing it approximately $0.05 per share, and
therefore we are adjusting the range of our EPS outlook for 2008
downward to $4.65 to $4.80. The retroactive component of the CTA's
adjustment could affect our guidance by as much as an additional
$0.08 per share, however we feel confident that we will succeed in
challenging the decision and therefore are not adjusting our
guidance for the full amount of the potential impact." 2008 OUTLOOK
The outlook for 2008 for diluted earnings per share before foreign
exchange gains and losses on long-term debt and other specified
items is expected to be in the range of $4.65 to $4.80. The 2008
estimate assumes an average currency exchange rate of the U.S.
dollar at par with the Canadian dollar, and crude oil prices
averaging US $87 per barrel. Despite an uncertain economic
environment and the impact of the CTA's adjustment, the Company is
not changing its revenue and expense outlook any further at this
time. CP expects to grow total revenue by four to six per cent
while total operating expenses are expected to increase by three to
five per cent. Capital investment is expected to be in the range of
$885 to $895 million in 2008, essentially flat when compared with
2007. CP expects free cash to be in excess of $250 million in 2008.
The 2008 outlook includes the projected earnings of the Dakota
Minnesota & Eastern Railroad (DM&E) on an equity accounting
basis for the full year. 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 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; timing of
completion of capital and maintenance projects; currency and
interest rate fluctuations; effects of changes in market conditions
on the financial position of pension plans and investments; and
various events that could disrupt operations, including severe
weather conditions, security threats and governmental response to
them, and technological changes. There are factors that could cause
actual results to differ from those described in the
forward-looking statements contained in this news release. These
more specific factors are identified and discussed in the Outlook
section and elsewhere in this news release with the particular
forward-looking statement in question. 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 except as required by law. About Canadian Pacific
Canadian Pacific, through the ingenuity of its employees located
across Canada and in the United States, remains committed to being
the safest, most fluid railway in North America. Our people are the
key to delivering innovative transportation solutions to our
customers and to ensuring the safe operation of our trains through
the more than 900 communities where we operate. Our combined
ingenuity makes CPR a better place to work, rail a better way to
ship, and North America a better place to live. Come and visit us
at http://www.cpr.ca/ to see how we can put our ingenuity to work
for you. Canadian Pacific is proud to be the official rail freight
services provider for the Vancouver 2010 Olympic and Paralympic
Winter Games. DATASOURCE: Canadian Pacific Railway CONTACT: Media,
Breanne Feigel, Tel.: (403) 319-3932, e-mail: ; Investment
Community, Janet Weiss, Assistant Vice-President, Investor
Relations, Tel.: (403) 319-3591, e-mail:
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