Form 6-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 6-K

 

 

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 under

the Securities Exchange Act of 1934

For the month of January, 2013

 

 

CANADIAN PACIFIC RAILWAY LIMITED

(Commission File No. 1-01342)

 

 

CANADIAN PACIFIC RAILWAY COMPANY

(Commission File No. 1-15272)

(translation of each Registrant’s name into English)

 

 

Suite 500, Gulf Canada Square, 401 – 9th Avenue, S.W., Calgary, Alberta, Canada, T2P 4Z4

(address of principal executive offices)

 

 

Indicate by check mark whether the registrants file or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F  ¨               Form 40-F  x

Indicate by check mark if the registrants are submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ¨

Indicate by check mark if the registrants are submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ¨

This Report furnished on Form 6-K shall be incorporated by reference into the Registration Statements of Canadian Pacific Railway Limited on Form S-8 (File Nos. 333-127943, 333-13962, 333-140955, 333-183891, 333-183892 and 333-183893).

 

 

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

   

CANADIAN PACIFIC RAILWAY LIMITED

(Registrant)

Date: January 29, 2013     By:   Signed:   /s/ Paul Bachand
      Name:   Paul Bachand
      Title:   Associate Corporate Secretary

 

   

CANADIAN PACIFIC RAILWAY COMPANY

(Registrant)

Date: January 29, 2013     By:   Signed:   /s/ Paul Bachand
      Name:   Paul Bachand
      Title:   Associate Corporate Secretary


LOGO

Release:        Immediate        January 29, 2013

CANADIAN PACIFIC ANNOUNCES SOLID FOURTH-QUARTER OPERATING PERFORMANCE

CALGARY – Canadian Pacific Railway Limited (TSX: CP) (NYSE: CP) announced its fourth-quarter 2012 results today. CP’s diluted earnings per share, excluding significant items (*see Non-GAAP Measures below) comprised of labour restructuring and asset impairment charges was $1.28. This compares favourably with fourth quarter of 2011 diluted earnings per share, exclusive of significant items of $1.11, an improvement of 15 per cent. Reported diluted earnings per share for the fourth-quarter 2012, inclusive of significant items, was $0.08. Reported diluted earnings per share in fourth-quarter 2011, inclusive of significant items, was $1.30.

CP’s operating ratio, excluding significant items (*see Non-GAAP Measures below) was 74.8 per cent for fourth-quarter 2012, which compares favourably to 2011’s operating ratio of 78.5 per cent. Reported operating ratio for fourth-quarter 2012, inclusive of significant items was 96.0 per cent.

“Canadian Pacific is moving forward on our transformational journey to become the most efficient railroad in North America,” said E. Hunter Harrison, President and Chief Executive Officer. “This quarter, CP saw strong operating performance as we continued to implement significant changes to how we run the railroad.”

“Management made a number of hard decisions this quarter including booking several significant items. With these decisions now behind us, we anticipate record-setting financial and operational results starting in 2013,” added Harrison.

Fourth-Quarter Significant Items

Announced items that impacted reported fourth-quarter 2012 and 2011 earnings include:

2012:

 

 

$53 million labour restructuring charge ($39 million after tax), which unfavourably impacted diluted earnings per share (“EPS”) by 22 cents

 

 

$185 million impairment of Powder River Basin and other investment ($111 million after tax), which unfavourably impacted diluted EPS by 64 cents

 

 

$80 million asset impairment of certain locomotives ($59 million after tax), which unfavourably impacted diluted EPS by 34 cents

 

1


2011:

 

 

$6 million advisory fees related to shareholder matters, which unfavourably impacted diluted EPS by 3 cents

 

 

$37 million income tax benefit, which favourably impacted diluted EPS in 2011 by 22 cents

Financial Expectations for Full Year 2013

 

 

Revenue growth to be in the high single digits

 

 

Operating ratio to be in the low 70s

 

 

Diluted EPS to be up in excess of 40 per cent versus 2012’s diluted EPS, excluding significant items (*see Non-GAAP Measures below) of $4.34

Key Assumptions for Full Year 2013

 

 

Average fuel cost per gallon of US$3.45 per U.S. gallon

 

 

Tax rate in the range of 25 per cent to 27 per cent

 

 

Canadian to U.S. exchange rate at par

Defined Benefit Pension Expense Assumptions

 

 

Defined benefit pension expense in 2013 and 2014 in the range of $50 million to $60 million per year, increasing to be in the range of $90 million to $110 million in 2015 and 2016

Conference Call Information

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 January 29, 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 the “Invest In CP” tab.

A replay of the conference call will be available by phone through February 28, 2012 at 416-849-0833 or toll free 1-855-859-2056, password 85400106. A webcast of the presentation and an audio file will be available at www.cpr.ca under “Invest In CP” tab.

Non-GAAP Measures

We present non-GAAP measures and cash flow information to provide a basis for evaluating underlying earnings and liquidity trends in our business that can be compared with the results of our operations in prior periods. These non-GAAP measures exclude significant items that are not among our normal ongoing revenues and operating expenses. They have no standardized meaning and are not defined by GAAP and, therefore, are unlikely to be comparable to similar measures presented by other companies.

Diluted earnings per share, excluding significant items provides management with a measure of earnings on a per share basis that can help in a multi-period assessment of long-term profitability and also allows management and other external users of our consolidated financial statements to compare profitability on a long-term basis with that of

 

2


our peers. U.S. GAAP reported full year diluted earnings per share in 2012 was $2.79. Diluted earnings per share, excluding significant items was $4.34, which excludes the fourth quarter significant items discussed above as well as an additional $0.35 related to management transition costs, advisory fees related to shareholder matters and an Ontario statutory tax rate change. U.S. GAAP reported full year diluted earnings per share in 2011 was $3.34. Diluted earnings per share, excluding significant items was $3.15, which excludes advisory fees related to shareholder matters and a significant favourable tax item. Operating ratio, excluding significant items provides a measure of the profitability of the railway on an ongoing basis. It provides the percentage of revenues used to operate the railway on an ongoing basis as it excludes significant items.

For further information regarding non-GAAP measures see our Management’s Discussion and Analysis for the third quarter of 2012 or the document Non-GAAP Measures on our web site at www.cpr.ca.

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. To the extent that we have provided guidance that contains non-GAAP financial measures, we may not be able to provide a reconciliation to the GAAP measure due to unknown variables and uncertainty related to future results.

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

 

3


cpr.ca to see the rail advantages of Canadian Pacific.

 

Contacts:   
Media    Investment Community
Ed Greenberg    Janet Weiss
Canadian Pacific    Canadian Pacific
Tel.: (612) 849-4717    Tel.: (403) 319-3233
24/7 Media Pager: 855-242-3674   
e-mail: ed_greenberg@cpr.ca    e-mail: investor@cpr.ca

 

4


CANADIAN PACIFIC RAILWAY LIMITED

CONSOLIDATED STATEMENTS OF INCOME

(in millions of Canadian dollars, except per share data)

(unaudited)

 

     For the three months
ended December 31
     For the year
ended December 31
 
     2012     2011      2012      2011  

Revenues

          

Freight

   $ 1,464      $ 1,375       $ 5,550       $ 5,052   

Other

     38        33         145         125   
  

 

 

   

 

 

    

 

 

    

 

 

 

Total revenues

     1,502        1,408         5,695         5,177   
  

 

 

   

 

 

    

 

 

    

 

 

 

Operating expenses

          

Compensation and benefits

     378        389         1,506         1,426   

Fuel

     256        267         999         968   

Materials

     60        58         238         243   

Equipment rents

     48        51         206         209   

Depreciation and amortization

     140        123         539         490   

Purchased services and other

     242        217         940         874   

Asset impairment (Note 2)

     265        —           265         —     

Labour restructuring (Note 3)

     53        —           53         —     
  

 

 

   

 

 

    

 

 

    

 

 

 

Total operating expenses

     1,442        1,105         4,746         4,210   
  

 

 

   

 

 

    

 

 

    

 

 

 

Operating income

     60        303         949         967   

Less:

          

Other income and charges

     3        10         37         18   

Net interest expense

     69        61         276         252   
  

 

 

   

 

 

    

 

 

    

 

 

 

(Loss) income before income tax expense

     (12     232         636         697   

Income tax (recovery) expense

     (27     11         152         127   
  

 

 

   

 

 

    

 

 

    

 

 

 

Net income

   $ 15      $ 221       $ 484       $ 570   
  

 

 

   

 

 

    

 

 

    

 

 

 

Earnings per share

          

Basic earnings per share

   $ 0.08      $ 1.31       $ 2.82       $ 3.37   

Diluted earnings per share

   $ 0.08      $ 1.30       $ 2.79       $ 3.34   

Weighted-average number of shares (millions)

          

Basic

     173.3        169.8         171.8         169.5   

Diluted

     174.7        170.8         173.2         170.6   

Dividends declared per share

   $ 0.3500      $ 0.3000       $ 1.3500       $ 1.1700   

See notes to interim consolidated financial information.

 

5


CANADIAN PACIFIC RAILWAY LIMITED

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions of Canadian dollars)

(unaudited)

 

     For the three months
ended December 31
    For the year
ended December 31
 
     2012     2011     2012     2011  

Net income

   $ 15      $ 221      $ 484      $ 570   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) gain in foreign currency translation adjustments, net of hedging activities

     (1     8        11        —     

Change in derivatives designated as cash flow hedges

     (2     (1     9        (7

Change in defined benefit pension and post-retirement plans

     (211     (1,000     (50     (883
  

 

 

   

 

 

   

 

 

   

 

 

 

Other comprehensive loss before income taxes

     (214     (993     (30     (890

Income tax recovery on above items

     58        250        —          240   

Equity accounted investments

     (2     —          (2     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Other comprehensive loss

     (158     (743     (32     (650
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive (loss) income

   $ (143   $ (522   $ 452      $ (80
  

 

 

   

 

 

   

 

 

   

 

 

 

See notes to interim consolidated financial information.

 

6


CANADIAN PACIFIC RAILWAY LIMITED

CONSOLIDATED BALANCE SHEETS

(in millions of Canadian dollars)

(unaudited)

 

     December 31
2012
    December 31
2011
 

Assets

    

Current assets

    

Cash and cash equivalents

   $ 333      $ 47   

Accounts receivable, net

     546        518   

Materials and supplies

     136        138   

Deferred income taxes

     254        101   

Other current assets

     60        52   
  

 

 

   

 

 

 
     1,329        856   

Investments (Note 2)

     83        167   

Net properties (Note 2)

     13,013        12,752   

Goodwill and intangible assets (Note 2)

     161        192   

Other assets

     141        143   
  

 

 

   

 

 

 

Total assets

   $ 14,727      $ 14,110   
  

 

 

   

 

 

 

Liabilities and shareholders’ equity

    

Current liabilities

    

Short-term borrowing

   $ —        $ 27   

Accounts payable and accrued liabilities (Note 3)

     1,176        1,133   

Long-term debt maturing within one year

     54        50   
  

 

 

   

 

 

 
     1,230        1,210   

Pension and other benefit liabilities

     1,366        1,372   

Other long-term liabilities (Note 3)

     306        365   

Long-term debt

     4,636        4,695   

Deferred income taxes

     2,092        1,819   
  

 

 

   

 

 

 

Total liabilities

     9,630        9,461   
  

 

 

   

 

 

 

Shareholders’ equity

    

Share capital

     2,127        1,854   

Additional paid-in capital

     41        86   

Accumulated other comprehensive loss

     (2,768     (2,736

Retained earnings

     5,697        5,445   
  

 

 

   

 

 

 
     5,097        4,649   
  

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 14,727      $ 14,110   
  

 

 

   

 

 

 

See notes to interim consolidated financial information.

 

7


CANADIAN PACIFIC RAILWAY LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions of Canadian dollars)

(unaudited)

 

     For the three months
ended December 31
    For the year
ended December 31
 
     2012     2011     2012     2011  

Operating activities

        

Net income

   $ 15      $ 221      $ 484      $ 570   

Reconciliation of net income to cash provided by (used in) operating activities:

        

Depreciation and amortization

     140        123        539        490   

Deferred income taxes

     (22     68        140        187   

Pension funding in excess of expense

     (17     (607     (61     (647

Asset impairment (Note 2)

     265        —          265        —     

Labour restructuring, net (Note 3)

     50        —          50        —     

Other operating activities, net

     (3     (65     (84     (112

Change in non-cash working capital balances related to operations

     41        99        (5     24   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash provided by (used in) operating activities

     469        (161     1,328        512   
  

 

 

   

 

 

   

 

 

   

 

 

 

Investing activities

        

Additions to properties

     (336     (400     (1,148     (1,104

Proceeds from the sale of properties and other assets

     7        30        145        71   

Other

     (7     (4     (8     (11
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash used in investing activities

     (336     (374     (1,011     (1,044
  

 

 

   

 

 

   

 

 

   

 

 

 

Financing activities

        

Dividends paid

     (61     (51     (223     (193

Issuance of common shares

     62        16        198        29   

Issuance of long-term debt

     —          757        71        757   

Repayment of long-term debt

     (9     (257     (50     (401

Net increase (decrease) in short-term borrowing

     —          28        (27     28   

Other

     1        (3     1        (3
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash (used in) provided by financing activities

     (7     490        (30     217   
  

 

 

   

 

 

   

 

 

   

 

 

 

Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents

     —          (5     (1     1   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash position

        

Increase (decrease) in cash and cash equivalents

     126        (50     286        (314

Cash and cash equivalents at beginning of period

     207        97        47        361   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 333      $ 47      $ 333      $ 47   
  

 

 

   

 

 

   

 

 

   

 

 

 

Supplemental disclosures of cash flow information:

        

Income taxes paid (refunded)

   $ 5      $ 1      $ (3   $ 4   

Interest paid

   $ 84      $ 91      $ 278      $ 271   

See notes to interim consolidated financial information.

 

8


CANADIAN PACIFIC RAILWAY LIMITED

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, 2012

     170.0       $ 1,854       $ 86      $ (2,736   $ 5,445      $ 4,649   

Net income

     —           —           —          —          484        484   

Other comprehensive loss

     —           —           —          (32     —          (32

Dividends declared

     —           —           —          —          (232     (232

Effect of stock-based compensation expense

     —           —           25        —          —          25   

Shares issued under stock option plans

     3.9         273         (70     —          —          203   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Balance at December 31, 2012

     173.9       $ 2,127       $ 41      $ (2,768   $ 5,697      $ 5,097   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

 

     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       $ 1,813       $ 24      $ (2,086   $ 5,073      $ 4,824   

Net income

     —           —           —          —          570        570   

Other comprehensive loss

     —           —           —          (650     —          (650

Dividends declared

     —           —           —          —          (198     (198

Effect of stock-based compensation expense

     —           —           16        —          —          16   

Changes to stock-based compensation awards

     —           —           57        —          —          57   

Shares issued under stock option plans

     0.8         41         (11     —          —          30   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Balance at December 31, 2011

     170.0       $ 1,854       $ 86      $ (2,736   $ 5,445      $ 4,649   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

See notes to interim consolidated financial information.

 

9


CANADIAN PACIFIC RAILWAY LIMITED

NOTES TO INTERIM CONSOLIDATED FINANCIAL INFORMATION

December 31, 2012

(unaudited)

1 Basis of presentation

This unaudited interim consolidated financial information of Canadian Pacific Railway Limited (“CP”, or “the Company”) reflects management’s estimates and assumptions that are necessary for its fair presentation in conformity with accounting principles generally accepted in the United States of America (“GAAP”). This information does not include all disclosures required under GAAP for annual and interim financial statements and should be read in conjunction with the 2011 consolidated financial statements and 2012 consolidated interim financial statements. The accounting policies used are consistent with the accounting policies used in preparing the 2011 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 information includes all adjustments necessary to present fairly such information.

2 Asset impairment

 

(in millions of Canadian dollars)    For the three
months ended
December 31, 2012
 

Powder River Basin impairment and other investment(1)

     (a   $ 185   

Impairment loss on locomotives

     (b     80   
  

 

 

 

Asset impairment, before tax

     $ 265   
  

 

 

 

(1)Includes impairment of other investment of $5 million

(a) Powder River Basin impairment

As part of the acquisition of Dakota, Minnesota & Eastern Railroad Corporation (“DM&E”) in 2007, CP acquired the option to build a 260 mile extension of its network into coal mines in the Powder River Basin (“PRB”).

Due to continued deterioration in the market for domestic thermal coal, including a sharp deterioration in 2012, in the fourth quarter of 2012 CP deferred plans to extend its rail network into the PRB coal mines indefinitely. The amount of the impairment was $180 million ($107 million after tax). The impairment was comprised of the following and was charged against income as an “Asset impairment”:

 

(in millions of Canadian dollars)    For the three
months ended
December 31, 2012
 

Option impairment

   $ 26   

Construction plans, including capitalized interest

     134   

Land, land option appraisals, including capitalized interest

     20   
  

 

 

 

Total impairment

   $ 180   
  

 

 

 

(b) Impairment loss on locomotives

In the fourth quarter of 2012, CP reached a decision to dispose of a certain series of locomotives to improve operating efficiencies, and accordingly performed an impairment test on these assets. The impairment test determined that the net book value of these locomotives at the date of the impairment test was $80 million higher than their estimated fair value. The impairment charge of $80 million ($59 million after tax) was recorded as an “Asset impairment” to be consistent with CP’s policy to record a gain or loss for the sale or

 

10


CANADIAN PACIFIC RAILWAY LIMITED

NOTES TO INTERIM CONSOLIDATED FINANCIAL INFORMATION

December 31, 2012

(unaudited)

 

retirement of larger groups of depreciable assets that are unusual, and were not anticipated in depreciation studies.

3 Labour restructuring

In the fourth quarter of 2012, CP recorded a charge of $53 million ($39 million after tax) for a labour restructuring initiative which was included in “Labour restructuring” in the Consolidated Statements of Income, and “Accounts payable and accrued liabilities” and “Other long-term liabilities” in the Consolidated Balance Sheets. The resulting position reductions are expected to be completed by the end of 2014.

 

11


LOGO

Summary of Rail Data

 

Fourth Quarter           Year  
2012      2011      Fav/(Unfav)     %     

Financial (millions, except per share data)

   2012      2011      Fav/(Unfav)     %  
          

Revenues

          
$ 1,464       $ 1,375       $ 89        6      

Freight revenue

   $ 5,550       $ 5,052       $ 498        10   
  38         33         5        15      

Other revenue

     145         125         20        16   

 

 

    

 

 

    

 

 

         

 

 

    

 

 

    

 

 

   
  1,502         1,408         94        7      

Total revenues

     5,695         5,177         518        10   

 

 

    

 

 

    

 

 

         

 

 

    

 

 

    

 

 

   
          

Operating expenses

          
  378         389         11        3      

Compensation and benefits

     1,506         1,426         (80     (6
  256         267         11        4      

Fuel

     999         968         (31     (3
  60         58         (2     (3   

Materials

     238         243         5        2   
  48         51         3        6      

Equipment rents

     206         209         3        1   
  140         123         (17     (14   

Depreciation and amortization

     539         490         (49     (10
  242         217         (25     (12   

Purchased services and other

     940         874         (66     (8
  265         —           (265     —        

Asset impairment

     265         —           (265     —     
  53         —           (53     —        

Labour restructuring

     53         —           (53     —     

 

 

    

 

 

    

 

 

         

 

 

    

 

 

    

 

 

   
  1,442         1,105         (337     (30   

Total operating expenses (OE)

     4,746         4,210         (536     (13

 

 

    

 

 

    

 

 

         

 

 

    

 

 

    

 

 

   
  60         303         (243     (80   

Operating income

     949         967         (18     (2
          

Less:

          
  3         10         7        70      

Other income and charges

     37         18         (19     (106
  69         61         (8     (13   

Net interest expense

     276         252         (24     (10

 

 

    

 

 

    

 

 

         

 

 

    

 

 

    

 

 

   
  (12)         232         (244     (105   

(Loss) income before income tax expense

     636         697         (61     (9
  (27)         11         38        345      

Income tax (recovery) expense

     152         127         (25     (20

 

 

    

 

 

    

 

 

         

 

 

    

 

 

    

 

 

   
$ 15       $ 221       $ (206     (93   

Net income

   $ 484       $ 570       $ (86     (15

 

 

    

 

 

    

 

 

         

 

 

    

 

 

    

 

 

   
  96.0         78.5         (17.5     (1,750 ) bps    

Operating ratio (%)

     83.3         81.3         (2.0     (200 ) bps 
$ 0.08       $ 1.31       $ (1.23     (94   

Basic earnings per share

   $ 2.82       $ 3.37       $ (0.55     (16

 

 

    

 

 

    

 

 

         

 

 

    

 

 

    

 

 

   
$ 0.08       $ 1.30       $ (1.22     (94   

Diluted earnings per share

   $ 2.79       $ 3.34       $ (0.55     (16

 

 

    

 

 

    

 

 

         

 

 

    

 

 

    

 

 

   
          

Shares Outstanding

          
  173.3         169.8         3.5        2      

Weighted average number of shares outstanding (millions)

     171.8         169.5         2.3        1   
  174.7         170.8         3.9        2      

Weighted average number of diluted shares outstanding (millions)

     173.2         170.6         2.6        2   
          

Foreign Exchange

          
  1.01         0.98         (0.03     (3   

Average foreign exchange rate (US$/Canadian$)

     1.00         1.01         0.01        1   
  0.99         1.02         (0.03     (3   

Average foreign exchange rate (Canadian$/US$)

     1.00         0.99         0.01        1   

 

12


LOGO

Summary of Rail Data (Page 2)

 

Fourth Quarter             Year  
2012      2011      Fav/(Unfav)     %              2012      2011      Fav/(Unfav)     %  
            

Commodity Data

          
            

Freight Revenues (millions)

          
$ 355       $ 323       $ 32        10        

- Grain

   $ 1,172       $ 1,100       $ 72        7   
  156         158         (2     (1     

- Coal

     602         556         46        8   
  133         133         —          —          

- Sulphur and fertilizers

     520         549         (29     (5
  335         288         47        16        

- Industrial and consumer products

     1,268         1,017         251        25   
  99         94         5        5        

- Automotive

     425         338         87        26   
  46         47         (1     (2     

- Forest products

     193         189         4        2   
  340         332         8        2        

- Intermodal

     1,370         1,303         67        5   

 

 

    

 

 

    

 

 

           

 

 

    

 

 

    

 

 

   
$ 1,464       $ 1,375       $ 89        6        

Total Freight Revenues

   $ 5,550       $ 5,052       $ 498        10   

 

 

    

 

 

    

 

 

           

 

 

    

 

 

    

 

 

   
            

Millions of Revenue Ton-Miles (RTM)

          
  9,628         9,111         517        6        

- Grain

     33,082         32,481         601        2   
  5,809         5,860         (51     (1     

- Coal

     22,375         21,041         1,334        6   
  3,838         4,899         (1,061     (22     

- Sulphur and fertilizers

     17,058         20,468         (3,410     (17
  8,347         6,478         1,869        29        

- Industrial and consumer products

     30,469         24,122         6,347        26   
  561         535         26        5        

- Automotive

     2,482         2,080         402        19   
  1,129         1,176         (47     (4     

- Forest products

     4,713         4,960         (247     (5
  6,217         6,025         192        3        

- Intermodal

     24,853         23,907         946        4   

 

 

    

 

 

    

 

 

           

 

 

    

 

 

    

 

 

   
  35,529         34,084         1,445        4        

Total RTMs

     135,032         129,059         5,973        5   

 

 

    

 

 

    

 

 

           

 

 

    

 

 

    

 

 

   
            

Freight Revenue per RTM (cents)

          
  3.69         3.55         0.14        4        

- Grain

     3.54         3.39         0.15        4   
  2.69         2.70         (0.01     —          

- Coal

     2.69         2.64         0.05        2   
  3.47         2.71         0.76        28        

- Sulphur and fertilizers

     3.05         2.68         0.37        14   
  4.01         4.45         (0.44     (10     

- Industrial and consumer products

     4.16         4.22         (0.06     (1
  17.65         17.57         0.08        —          

- Automotive

     17.12         16.25         0.87        5   
  4.07         4.00         0.07        2        

- Forest products

     4.10         3.81         0.29        8   
  5.47         5.51         (0.04     (1     

- Intermodal

     5.51         5.45         0.06        1   
  4.12         4.03         0.09        2        

Total Freight Revenue per RTM

     4.11         3.91         0.20        5   
            

Carloads (thousands)

          
  122         121         1        1        

- Grain

     433         450         (17     (4
  88         87         1        1        

- Coal

     337         313         24        8   
  43         48         (5     (10     

- Sulphur and fertilizers

     177         199         (22     (11
  119         114         5        4        

- Industrial and consumer products

     469         421         48        11   
  39         39         —          —          

- Automotive

     162         145         17        12   
  16         17         (1     (6     

- Forest products

     67         72         (5     (7
  253         250         3        1        

- Intermodal

     1,024         997         27        3   

 

 

    

 

 

    

 

 

           

 

 

    

 

 

    

 

 

   
  680         676         4        1        

Total Carloads

     2,669         2,597         72        3   

 

 

    

 

 

    

 

 

           

 

 

    

 

 

    

 

 

   
            

Freight Revenue per Carload

          
$ 2,910       $ 2,669       $ 241        9        

- Grain

   $ 2,707       $ 2,444       $ 263        11   
  1,773         1,816         (43     (2     

- Coal

     1,786         1,776         10        1   
  3,093         2,771         322        12        

- Sulphur and fertilizers

     2,938         2,759         179        6   
  2,815         2,526         289        11        

- Industrial and consumer products

     2,704         2,416         288        12   
  2,538         2,410         128        5        

- Automotive

     2,623         2,331         292        13   
  2,875         2,765         110        4        

- Forest products

     2,881         2,625         256        10   
  1,344         1,328         16        1        

- Intermodal

     1,338         1,307         31        2   
$ 2,153       $ 2,034       $ 119        6        

Total Freight Revenue per Carload

   $ 2,079       $ 1,945       $ 134        7   

 

13


LOGO

Summary of Rail Data (Page 3)

 

Fourth Quarter             Year  
2012      2011(1)      Fav/(Unfav)     %              2012      2011(1)      Fav/(Unfav)     %  
            

Operations Performance

          
  66,204         65,472         732        1        

Freight gross ton-miles (millions)

     254,354         247,955         6,399        3   
  10,046         10,611         (565     (5     

Train miles (thousands)

     40,270         40,145         125        —     
  7,014         6,587         427        6        

Average train weight—excluding local traffic (tons)

     6,709         6,593         116        2   
  6,132         5,654         478        8        

Average train length—excluding local traffic (feet)

     5,838         5,665         173        3   
  24.0         23.4         0.6        3        

Average train speed—AAR definition (mph)

     24.4         21.3         3.1        15   
  17.3         17.7         0.4        2        

Average terminal dwell—AAR definition (hours)

     17.6         19.9         2.3        12   
  201.7         183.5         18.2        10        

Car miles per car day

     202.3         160.1         42.2        26   
  197.1         175.1         22.0        13        

Locomotive productivity (daily average GTMs/active HP)

     179.8         166.7         13.1        8   
  4.7         4.5         0.2        4        

Employee productivity (million GTMs/expense employee)

     17.4         17.5         (0.1     (1
  1.14         1.17         0.03        3        

Fuel efficiency(2)

     1.15         1.18         0.03        3   
  74.4         76.0         1.6        2        

U.S. gallons of locomotive fuel consumed (millions)(3)

     289.2         290.8         1.6        1   
  3.47         3.45         (0.02     (1     

Average fuel price (U.S. dollars per U.S. gallon)

     3.45         3.38         (0.07     (2
  2.18         1.69         (0.49     (29     

OE per GTM (cents)(4)

     1.87         1.70         (0.17     (10
  1.70         1.72         0.02        1        

OE per GTM—Adjusted (cents)(5)

     1.72         1.71         (0.01     (1
  16,282         16,616         334        2        

Average number of active employees—Total(6)

     16,657         16,097         (560     (3
  14,108         14,459         351        2        

Average number of active employees—Expense(6)

     14,594         14,169         (425     (3
  15,671         16,428         757        5        

Number of employees at end of period—Total(6)

     15,671         16,428         757        5   
  13,945         14,764         819        6        

Number of employees at end of period—Expense(6)

     13,945         14,764         819        6   
  42.2         46.7         4.5        10        

Average daily active cars on-line (thousands)

     40.9         51.4         10.5        20   
  952         1,085         133        12        

Average daily active road locomotives on-line

     1,007         1,085         78        7   
            

Safety

          
  1.89         1.70         (0.19     (11     

FRA personal injuries per 200,000 employee-hours

     1.46         1.85         0.39        21   
  1.68         1.40         (0.28     (20     

FRA train accidents per million train-miles

     1.67         1.88         0.21        11   

 

(1) 

Certain prior period figures have been revised to conform with current presentation or have been updated to reflect new information.

(2) 

Fuel efficiency is defined as U.S. gallons of locomotive fuel consumed per 1,000 GTMs – freight and yard.

(3) 

Includes gallons of fuel consumed from freight, yard and commuter service but excludes fuel used in capital projects and other non-freight activities.

(4) 

Gross Ton-Mile (GTM) is the movement of the combined tons (freight car tare, inactive locomotive tare, and contents) a distance of one mile.

(5) 

OE per GTM—Adjusted is calculated consistently with OE per GTM except for the exclusion of net gains on land sales, to eliminate the volatile nature of these sales, fuel price impact, to remove the volatility of fuel prices and to provide comparative fuel expenses at the 2011 fuel price, CEO transition, asset impairment and labour restructuring costs, to eliminate the impact of these significant items that are not among our normal ongoing operating expenses. Net gains on land sales were $1 million and $20 million for the three months ended December 31, 2012 and 2011, respectively, and $23 million and $25 million for the year ended December 31, 2012 and 2011, respectively. The impact in fuel price, net of hedging and B.C. carbon tax, was unfavourable $2 million for the three months ended December 31, 2012 and unfavourable $25 million for the year ended December 31, 2012. CEO transition costs were nil for the three months ended December 31, 2012 and $42 million for the year ended December 31, 2012. Asset impairment costs were $265 million for the three months and year ended December 31, 2012. Labour restructuring costs were $53 million for the three months and year ended December 31, 2012.

(6) 

An employee is defined as an individual who has worked more than 40 hours in a standard biweekly pay period. This excludes part time employees, contractors, consultants, and trainees.

 

14