Form 20-F o | Form 40-F þ |
Yes o | No þ |
Date: January 26, 2011 | CANADIAN PACIFIC RAILWAY LIMITED (Registrant) |
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By: | Signed: Karen L. Fleming | |||
Name: | Karen L. Fleming | |||
Title: | Corporate Secretary | |||
Date: January 26, 2011 | CANADIAN PACIFIC RAILWAY COMPANY (Registrant) |
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By: | Signed: Karen L. Fleming | |||
Name: | Karen L. Fleming | |||
Title: | Corporate Secretary |
| Total revenues increased 13 per cent to $1.3 billion | ||
| Adjusted operating income increased 34 per cent to $298 million | ||
| Adjusted operating ratio improved 360 basis points to 77.0 per cent | ||
| Adjusted diluted earnings per share increased 51 per cent to $1.12 per share |
| Total revenues increased 13 per cent to $5.0 billion | ||
| Adjusted operating income increased 39 per cent to $1.1 billion | ||
| Adjusted operating ratio improved 410 basis points to 77.6 per cent | ||
| Adjusted diluted earnings per share increased 54 per cent to $3.87 per share | ||
| Made a pension prepayment of $650 million and reduced long-term debt by approximately $250 million | ||
| Increased the current dividend rate by 9% to $1.08 per share |
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Media
|
Investment Community | |
Mike LoVecchio
|
Janet Weiss | |
Canadian Pacific
|
Canadian Pacific | |
Tel.: (778) 772-9636
|
Tel.: (403) 319-3591 | |
24/7 Media Pager: (416) 814-0948
|
e-mail: investor@cpr.ca | |
e-mail: mike_lovecchio@cpr.ca |
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For the three months | For the year | |||||||||||||||
ended December 31 | ended December 31 | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Restated | Restated | |||||||||||||||
(see Note 2) | (see Note 2) | |||||||||||||||
Revenues |
||||||||||||||||
Freight |
$ | 1,262.1 | $ | 1,115.8 | $ | 4,853.3 | $ | 4,279.8 | ||||||||
Other |
32.2 | 27.4 | 128.2 | 122.4 | ||||||||||||
1,294.3 | 1,143.2 | 4,981.5 | 4,402.2 | |||||||||||||
Operating expenses |
||||||||||||||||
Compensation and benefits |
362.3 | 316.7 | 1,431.0 | 1,306.6 | ||||||||||||
Fuel |
202.4 | 157.6 | 728.1 | 580.3 | ||||||||||||
Materials |
56.0 | 42.1 | 214.2 | 217.6 | ||||||||||||
Equipment rents |
48.5 | 53.0 | 206.0 | 226.0 | ||||||||||||
Depreciation and amortization |
121.2 | 122.2 | 489.6 | 483.2 | ||||||||||||
Purchased services and other |
206.2 | 229.6 | 796.5 | 783.0 | ||||||||||||
Gain on sale of significant properties |
| | | (79.1 | ) | |||||||||||
Loss on termination of lease with shortline railway |
| 54.5 | | 54.5 | ||||||||||||
996.6 | 975.7 | 3,865.4 | 3,572.1 | |||||||||||||
Operating income |
297.7 | 167.5 | 1,116.1 | 830.1 | ||||||||||||
Gain on sale of partnership interest |
| | | 81.2 | ||||||||||||
Less: |
||||||||||||||||
Other (income) and charges |
(4.7 | ) | (7.0 | ) | (12.0 | ) | 12.4 | |||||||||
Interest expense |
65.2 | 68.4 | 257.3 | 267.6 | ||||||||||||
Income before income tax expense |
237.2 | 106.1 | 870.8 | 631.3 | ||||||||||||
Income tax expense (recovery) |
51.4 | (40.1 | ) | 220.1 | 81.3 | |||||||||||
Net income |
$ | 185.8 | $ | 146.2 | $ | 650.7 | $ | 550.0 | ||||||||
Earnings per share |
||||||||||||||||
Basic earnings per share |
$ | 1.10 | $ | 0.87 | $ | 3.86 | $ | 3.31 | ||||||||
Diluted earnings per share |
$ | 1.09 | $ | 0.87 | $ | 3.85 | $ | 3.30 | ||||||||
Weighted average number of shares (millions) |
||||||||||||||||
Basic |
169.1 | 168.3 | 168.8 | 166.3 | ||||||||||||
Diluted |
169.7 | 168.9 | 169.2 | 166.8 | ||||||||||||
Dividends declared per share |
$ | 0.2700 | $ | 0.2475 | $ | 1.0575 | $ | 0.9900 |
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December 31 | December 31 | |||||||
2010 | 2009 | |||||||
Restated | ||||||||
(see Note 2) | ||||||||
Assets |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ | 360.6 | $ | 679.1 | ||||
Accounts receivable, net |
459.0 | 655.1 | ||||||
Materials and supplies |
114.1 | 132.7 | ||||||
Deferred income taxes |
222.3 | 128.1 | ||||||
Other current assets |
47.8 | 46.5 | ||||||
1,203.8 | 1,641.5 | |||||||
Investments |
144.9 | 156.7 | ||||||
Net properties |
11,996.8 | 11,978.5 | ||||||
Goodwill and intangible assets |
189.8 | 202.3 | ||||||
Other assets |
140.6 | 175.8 | ||||||
Total assets |
$ | 13,675.9 | $ | 14,154.8 | ||||
Liabilities and shareholders equity |
||||||||
Current liabilities |
||||||||
Accounts payable and accrued liabilities |
$ | 1,007.8 | $ | 1,000.7 | ||||
Long-term debt maturing within one year |
281.7 | 605.3 | ||||||
1,289.5 | 1,606.0 | |||||||
Pension and other benefits liabilities (Note 3) |
1,115.7 | 1,453.9 | ||||||
Other long-term liabilities |
468.0 | 479.9 | ||||||
Long-term debt |
4,033.2 | 4,138.2 | ||||||
Deferred income taxes |
1,944.8 | 1,818.7 | ||||||
Total liabilities |
8,851.2 | 9,496.7 | ||||||
Shareholders equity |
||||||||
Share capital |
1,812.8 | 1,771.1 | ||||||
Additional paid-in capital |
24.7 | 30.8 | ||||||
Accumulated other comprehensive loss |
(2,085.8 | ) | (1,744.7 | ) | ||||
Retained earnings |
5,073.0 | 4,600.9 | ||||||
4,824.7 | 4,658.1 | |||||||
Total liabilities and shareholders equity |
$ | 13,675.9 | $ | 14,154.8 | ||||
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For the three months | For the year | |||||||||||||||
ended December 31 | ended December 31 | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Restated | Restated | |||||||||||||||
(see Note 2) | (see Note 2) | |||||||||||||||
Operating activities |
||||||||||||||||
Net income |
$ | 185.8 | $ | 146.2 | $ | 650.7 | $ | 550.0 | ||||||||
Reconciliation of net income to cash provided by operating
activities: |
||||||||||||||||
Depreciation and amortization |
121.2 | 122.2 | 489.6 | 483.2 | ||||||||||||
Deferred income taxes |
50.8 | (25.6 | ) | 211.2 | 133.0 | |||||||||||
Gain on sale of partnership interest |
| | | (81.2 | ) | |||||||||||
Gain on sale of significant properties |
| | | (79.1 | ) | |||||||||||
Pension funding less than / in (excess) of expense (Note 3) |
4.7 | (524.4 | ) | (800.9 | ) | (572.0 | ) | |||||||||
Other operating activities, net |
(37.9 | ) | (44.7 | ) | (32.2 | ) | (85.7 | ) | ||||||||
Change in non-cash working capital balances related to
operations |
56.2 | 106.2 | (16.3 | ) | 102.7 | |||||||||||
Cash provided by (used in) operating activities |
380.8 | (220.1 | ) | 502.1 | 450.9 | |||||||||||
Investing activities |
||||||||||||||||
Additions to properties |
(282.2 | ) | (139.4 | ) | (726.1 | ) | (703.5 | ) | ||||||||
Proceeds from the sale of properties and other assets |
42.7 | 49.9 | 88.9 | 337.4 | ||||||||||||
Other, net |
1.6 | 7.4 | 1.6 | 7.4 | ||||||||||||
Cash used in investing activities |
(237.9 | ) | (82.1 | ) | (635.6 | ) | (358.7 | ) | ||||||||
Financing activities |
||||||||||||||||
Dividends paid |
(45.6 | ) | (41.6 | ) | (174.5 | ) | (162.9 | ) | ||||||||
Issuance of CP Common Shares |
5.5 | 9.0 | 32.4 | 513.5 | ||||||||||||
Collection of receivable from financial institution |
| | 219.8 | | ||||||||||||
Issuance of long-term debt |
| 463.2 | 355.2 | 872.7 | ||||||||||||
Repayment of long-term debt |
(8.3 | ) | (4.6 | ) | (612.8 | ) | (617.9 | ) | ||||||||
Net increase (decrease) in short-term borrowing |
9.0 | (57.7 | ) | 9.0 | (150.1 | ) | ||||||||||
Other financing activities |
| | 3.1 | 34.1 | ||||||||||||
Cash (used in) provided by financing activities |
(39.4 | ) | 368.3 | (167.8 | ) | 489.4 | ||||||||||
Effect of foreign exchange fluctuations on U.S.
dollar-denominated cash and cash equivalents |
(10.7 | ) | (2.9 | ) | (17.2 | ) | (20.0 | ) | ||||||||
Cash position |
||||||||||||||||
Increase (decrease) in cash and cash equivalents |
92.8 | 63.2 | (318.5 | ) | 561.6 | |||||||||||
Cash and cash equivalents at beginning of period |
267.8 | 615.9 | 679.1 | 117.5 | ||||||||||||
Cash and cash equivalents at end of period |
$ | 360.6 | $ | 679.1 | $ | 360.6 | $ | 679.1 | ||||||||
Supplemental disclosures of cash flow information |
||||||||||||||||
Income taxes paid (refunded) |
$ | 1.8 | $ | (2.5 | ) | $ | 8.3 | $ | (38.9 | ) | ||||||
Interest paid |
$ | 94.5 | $ | 92.4 | $ | 346.8 | $ | 289.3 | ||||||||
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Common | Accumulated | |||||||||||||||||||||||
shares | Additional | other | Total | |||||||||||||||||||||
(in | Share | paid-in | comprehensive | Retained | shareholders | |||||||||||||||||||
millions) | capital | capital | loss | earnings | equity | |||||||||||||||||||
Balance at December 31,
2009, as previously
reported |
168.5 | $ | 1,771.1 | $ | 30.8 | $ | (1,746.3 | ) | $ | 4,665.2 | $ | 4,720.8 | ||||||||||||
Cumulative adjustment for
change in accounting policy
(Note 2) |
| | | 1.6 | (64.3 | ) | (62.7 | ) | ||||||||||||||||
Balance at December 31,
2009, as restated |
168.5 | 1,771.1 | 30.8 | (1,744.7 | ) | 4,600.9 | 4,658.1 | |||||||||||||||||
Net income |
| | | | 650.7 | 650.7 | ||||||||||||||||||
Other comprehensive income |
| | | (341.1 | ) | | (341.1 | ) | ||||||||||||||||
Comprehensive income |
| | | (341.1 | ) | 650.7 | 309.6 | |||||||||||||||||
Dividends declared |
| | | | (178.6 | ) | (178.6 | ) | ||||||||||||||||
Stock compensation expense |
| | 1.2 | | | 1.2 | ||||||||||||||||||
Shares issued under stock
option plans |
0.7 | 41.7 | (7.3 | ) | | | 34.4 | |||||||||||||||||
Balance at December 31, 2010 |
169.2 | $ | 1,812.8 | $ | 24.7 | $ | (2,085.8 | ) | $ | 5,073.0 | $ | 4,824.7 | ||||||||||||
Other | ||||||||||||
comprehensive | Comprehensive | |||||||||||
income | Net income | income | ||||||||||
Comprehensive income -
three months ended December
31, 2010 |
$ | (393.3 | ) | $ | 185.8 | $ | (207.5 | ) | ||||
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1 | Basis of presentation |
These unaudited consolidated financial statements of Canadian Pacific Railway Limited (CP, the Company or Canadian Pacific Railway) reflect managements estimates and assumptions that are necessary for their fair presentation in conformity with accounting principles generally accepted in the United States (GAAP). They do not include all disclosures required under GAAP for annual financial statements and should be read in conjunction with the 2009 U.S. GAAP consolidated financial statements. The policies used are consistent with the policies used in preparing the 2009 U.S. GAAP consolidated financial statements, except as discussed in Note 2. The Companys investments in which CP has significant influence, which are not consolidated, are accounted for using the equity method. | ||
CPs 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. The irregular pace of the recovery in 2010 from the global recession has affected financial results such that seasonal fluctuations may not be consistent with those in prior years. The timing of a return to seasonal trends consistent with years prior to 2009 will depend on the continued recovery of the economy and the related impact on the Companys customers. |
2 | Accounting changes |
Consolidations In June 2009, the Financial Accounting Standards Board (FASB) issued Amendments to Consolidation of Variable Interest Entities. The guidance retains the scope of the previous guidance and removes the exemption of entities previously considered qualifying special purpose entities. In addition, it replaces the previous quantitative approach with a qualitative analysis approach for determining whether the enterprises variable interest or interests give it a controlling financial interest in a variable interest entity. The guidance is further amended to require ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity and requires enhanced disclosures about an enterprises involvement in a variable interest entity. The guidance is applicable to all variable interest entities that existed at January 1, 2010, the date of adoption, or are created thereafter. The Company has variable interests in variable interest entities, however, the adoption of the new guidance did not change the previous assessment that the Company is not the primary beneficiary and as such does not consolidate the variable interest entities. |
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Accounting for transfers of financial assets The FASB has released additional guidance with respect to the accounting and disclosure of transfers of financial assets such as securitized accounts receivable. Although the Company currently does not have an accounts receivable securitization program, the guidance, which includes revisions to the derecognition criteria in a transfer and the treatment of qualifying special purpose entities, would be applicable to any future securitization. The new guidance is effective for the Company from January 1, 2010. The adoption of this guidance had no impact to the Companys financial statements. |
||
Fair value measurement and disclosure In January 2010, the FASB amended the disclosure requirements related to fair value measurements. The update provides for new disclosures regarding transfers in and out of Level 1 and Level 2 financial asset and liability categories and expanded disclosures in the Level 3 reconciliation. The update also provides clarification that the level of disaggregation should be at the class level and that disclosures about inputs and valuation techniques are required for both recurring and nonrecurring fair value measurements that fall in either Level 2 or Level 3. New disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the expanded disclosures in the Level 3 reconciliation, which are effective for fiscal years beginning after December 15, 2010. |
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2 | Accounting changes (continued) |
Rail grinding During the second quarter of 2010, the Company changed its accounting policy for the treatment of rail grinding costs. In prior periods, CP had capitalized such costs and depreciated them over the expected economic life of the rail grinding. The Company concluded that, although the accounting treatment was within acceptable accounting standards, it is preferable to expense the costs as incurred, given the subjectivity in determining the expected economic life and the associated depreciation methodology. The accounting policy change has been accounted for on a retrospective basis. The effects of the adjustment to January 1, 2010 resulted in an adjustment to decrease net properties by $89.0 million, deferred income taxes by $26.3 million, and shareholders equity by $62.7 million. As a result of the change the following increases (decreases) to financial statement line items occurred: |
(in millions of Canadian dollars, except per share data) | ||||||||||||||||||||||||
For the three months | For the year | |||||||||||||||||||||||
ended December 31 | ended December 31 | |||||||||||||||||||||||
2010 | 2009 | 2010 | 2009 | 2008 | ||||||||||||||||||||
Changes to Consolidated Statement of
Income and Comprehensive Income |
||||||||||||||||||||||||
Depreciation and amortization |
$ | (4.3 | ) | $ | (3.5 | ) | $ | (15.7 | ) | $ | (14.0 | ) | $ | (8.9 | ) | |||||||||
Compensation and benefits |
0.8 | 1.0 | 2.3 | 2.8 | 2.7 | |||||||||||||||||||
Fuel |
| 0.1 | | 0.1 | 0.1 | |||||||||||||||||||
Materials |
0.3 | 0.7 | 0.8 | 1.8 | 1.7 | |||||||||||||||||||
Purchased services and other |
4.5 | 5.2 | 13.8 | 15.9 | 15.4 | |||||||||||||||||||
Total operating expenses |
1.3 | 3.5 | 1.2 | 6.6 | 11.0 | |||||||||||||||||||
Income tax expense |
(0.5 | ) | (0.2 | ) | (0.7 | ) | (1.2 | ) | (3.2 | ) | ||||||||||||||
Net income |
$ | (0.8 | ) | $ | (3.3 | ) | $ | (0.5 | ) | $ | (5.4 | ) | $ | (7.8 | ) | |||||||||
Basic earnings per share |
$ | | $ | (0.02 | ) | $ | | $ | (0.03 | ) | $ | (0.05 | ) | |||||||||||
Diluted earnings per share |
$ | | $ | (0.02 | ) | $ | | $ | (0.03 | ) | $ | (0.05 | ) | |||||||||||
Other comprehensive income (loss) |
0.6 | 0.3 | 0.9 | 2.4 | (2.8 | ) | ||||||||||||||||||
Comprehensive income |
$ | (0.2 | ) | $ | (3.0 | ) | $ | 0.4 | $ | (3.0 | ) | $ | (10.6 | ) | ||||||||||
Changes to Consolidated Statement
of Cash Flows |
||||||||||||||||||||||||
Cash provided by operating activities
(decrease) |
$ | (5.6 | ) | $ | (7.0 | ) | $ | (16.9 | ) | $ | (20.6 | ) | $ | (19.9 | ) | |||||||||
Cash used in investing activities
(decrease) |
$ | (5.6 | ) | $ | (7.0 | ) | $ | (16.9 | ) | $ | (20.6 | ) | $ | (19.9 | ) |
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2 | Accounting changes (continued) |
Changes to Consolidated Balance Sheet |
As at | As at | As at | ||||||||||
December 31 | December 31 | December 31 | ||||||||||
2010 | 2009 | 2008 | ||||||||||
Net properties |
$ | (88.6 | ) | $ | (89.0 | ) | $ | (86.2 | ) | |||
Deferred income tax liability |
(26.3 | ) | (26.3 | ) | (26.5 | ) | ||||||
Accumulated other
comprehensive loss (income) |
2.5 | 1.6 | (0.8 | ) | ||||||||
Retained earnings |
(64.8 | ) | (64.3 | ) | (58.9 | ) |
Future accounting changes | ||
There have been no new accounting pronouncements issued that are expected to have a significant impact to the Companys financial statements. |
3 | Pensions and other benefits |
In the third quarter of 2010, at the Companys option, a $650 million prepayment to the Companys main Canadian defined benefit pension plan was made. | ||
During the fourth quarter of 2009, the Company chose to accelerate funding of future pension obligations through a voluntary prepayment of approximately $500 million to the Companys defined benefit pension plans. | ||
The Companys annual actuarial valuation of its pension and post-retirement benefit plan assets and obligations was completed at December 31, 2010. As a result of lower discount rates at December 31, 2010, pension and post-retirement benefit liabilities increased by $547.8 million, other comprehensive income was reduced by $407.6 million and the Companys deferred tax liability was reduced by $140.2 million. |
4 | Reclassification of comparative figures |
Certain comparative figures have been reclassified in order to be consistent with the 2010 presentation. |
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Fourth Quarter | Year | |||||||||||||||||||||||||||||||
2010 | 2009(1) | Fav/(Unfav) | % | 2010 | 2009(1) | Fav/(Unfav) | % | |||||||||||||||||||||||||
Financial (millions, except per share data) |
||||||||||||||||||||||||||||||||
Revenues |
||||||||||||||||||||||||||||||||
$ | 1,262.1 | $ | 1,115.8 | $ | 146.3 | 13.1 | Freight revenue |
$ | 4,853.3 | $ | 4,279.8 | $ | 573.5 | 13.4 | ||||||||||||||||||
32.2 | 27.4 | 4.8 | 17.5 | Other revenue |
128.2 | 122.4 | 5.8 | 4.7 | ||||||||||||||||||||||||
1,294.3 | 1,143.2 | 151.1 | 13.2 | 4,981.5 | 4,402.2 | 579.3 | 13.2 | |||||||||||||||||||||||||
Operating expenses |
||||||||||||||||||||||||||||||||
362.3 | 316.7 | (45.6 | ) | (14.4 | ) | Compensation and benefits |
1,431.0 | 1,306.6 | (124.4 | ) | (9.5 | ) | ||||||||||||||||||||
202.4 | 157.6 | (44.8 | ) | (28.4 | ) | Fuel |
728.1 | 580.3 | (147.8 | ) | (25.5 | ) | ||||||||||||||||||||
56.0 | 42.1 | (13.9 | ) | (33.0 | ) | Materials |
214.2 | 217.6 | 3.4 | 1.6 | ||||||||||||||||||||||
48.5 | 53.0 | 4.5 | 8.5 | Equipment rents |
206.0 | 226.0 | 20.0 | 8.8 | ||||||||||||||||||||||||
121.2 | 122.2 | 1.0 | 0.8 | Depreciation and amortization |
489.6 | 483.2 | (6.4 | ) | (1.3 | ) | ||||||||||||||||||||||
206.2 | 229.6 | 23.4 | 10.2 | Purchased services and other |
796.5 | 783.0 | (13.5 | ) | (1.7 | ) | ||||||||||||||||||||||
| | | | Gain on sale of significant properties |
| (79.1 | ) | (79.1 | ) | (100.0 | ) | |||||||||||||||||||||
| 54.5 | 54.5 | 100.0 | Loss on termination of lease with shortline railway |
| 54.5 | 54.5 | 100.0 | ||||||||||||||||||||||||
996.6 | 975.7 | (20.9 | ) | (2.1 | ) | 3,865.4 | 3,572.1 | (293.3 | ) | (8.2 | ) | |||||||||||||||||||||
297.7 | 167.5 | 130.2 | 77.7 | Operating income |
1,116.1 | 830.1 | 286.0 | 34.5 | ||||||||||||||||||||||||
| | | | Gain on sale of partnership interest |
| 81.2 | (81.2 | ) | (100.0 | ) | ||||||||||||||||||||||
Less: |
||||||||||||||||||||||||||||||||
(4.7 | ) | (7.0 | ) | (2.3 | ) | (32.9 | ) | Other (income) and charges |
(12.0 | ) | 12.4 | 24.4 | 196.8 | |||||||||||||||||||
65.2 | 68.4 | 3.2 | 4.7 | Interest expense |
257.3 | 267.6 | 10.3 | 3.8 | ||||||||||||||||||||||||
237.2 | 106.1 | 131.1 | 123.6 | Income before income tax expense |
870.8 | 631.3 | 239.5 | 37.9 | ||||||||||||||||||||||||
51.4 | (40.1 | ) | (91.5 | ) | (228.2 | ) | Income tax expense (recovery) |
220.1 | 81.3 | (138.8 | ) | (170.7 | ) | |||||||||||||||||||
$ | 185.8 | $ | 146.2 | $ | 39.6 | 27.1 | Net income |
$ | 650.7 | $ | 550.0 | $ | 100.7 | 18.3 | ||||||||||||||||||
$ | 1.10 | $ | 0.87 | $ | 0.23 | 26.4 | Basic earnings per share |
$ | 3.86 | $ | 3.31 | $ | 0.55 | 16.6 | ||||||||||||||||||
$ | 1.09 | $ | 0.87 | $ | 0.22 | 25.3 | Diluted earnings per share |
$ | 3.85 | $ | 3.30 | $ | 0.55 | 16.7 | ||||||||||||||||||
$ | 0.59 | |||||||||||||||||||||||||||||||
Shares Outstanding |
||||||||||||||||||||||||||||||||
169.1 | 168.3 | 0.8 | 0.5 | Weighted average (avg) number of shares outstanding (millions) |
168.8 | 166.3 | 2.5 | 1.5 | ||||||||||||||||||||||||
169.7 | 168.9 | 0.8 | 0.5 | Weighted avg number of diluted shares outstanding (millions) |
169.2 | 166.8 | 2.4 | 1.4 | ||||||||||||||||||||||||
Foreign Exchange |
||||||||||||||||||||||||||||||||
0.98 | 0.94 | (0.04 | ) | (4.3 | ) | Average foreign exchange rate (US$/Canadian$) |
0.97 | 0.87 | (0.10 | ) | (11.5 | ) | ||||||||||||||||||||
1.02 | 1.07 | (0.05 | ) | (4.7 | ) | Average foreign exchange rate (Canadian$/US$) |
1.03 | 1.15 | (0.12 | ) | (10.4 | ) |
(1) | Restated for the Companys change in accounting policy in relation to the accounting for rail grinding. |
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Fourth Quarter 2010 | Fourth Quarter 2009(1) | % | ||||||||||||||||||||||||||
Adjusted | ||||||||||||||||||||||||||||
In millions, except operating ratio | Reported | Adjustments | Adjusted | Reported | Adjustments | Adjusted | (Non-GAAP)(2) | |||||||||||||||||||||
and per share data | (GAAP) | Fav/(Unfav) | (Non-GAAP)(2) | (GAAP) | Fav/(Unfav) | (Non-GAAP)(2) | Fav/(Unfav) | |||||||||||||||||||||
Revenues |
$ | 1,294.3 | $ | | $ | 1,294.3 | $ | 1,143.2 | $ | | $ | 1,143.2 | 13.2 | |||||||||||||||
Expenses |
996.6 | | 996.6 | 975.7 | 54.5 | (6) | 921.2 | (8.2 | ) | |||||||||||||||||||
Operating income |
297.7 | | 297.7 | 167.5 | 54.5 | 222.0 | 34.1 | |||||||||||||||||||||
Less: |
||||||||||||||||||||||||||||
Other (income) and charges |
(4.7 | ) | 0.6 | (3) | (5.3 | ) | (7.0 | ) | (7.6 | )(7) | 0.6 | | ||||||||||||||||
Interest expense |
65.2 | | 65.2 | 68.4 | | 68.4 | 4.7 | |||||||||||||||||||||
Income before income tax expense |
237.2 | 0.6 | 237.8 | 106.1 | 46.9 | 153.0 | 55.4 | |||||||||||||||||||||
Income tax expense (recovery) |
51.4 | 3.7 | (4) | 47.7 | (40.1 | ) | (67.5 | )(8) | 27.4 | (74.1 | ) | |||||||||||||||||
Net income |
$ | 185.8 | $ | 4.3 | $ | 190.1 | (5) | $ | 146.2 | $ | (20.6 | ) | $ | 125.6 | (5) | 51.4 | ||||||||||||
Operating ratio (%) |
77.0 | | 77.0 | 85.3 | 4.7 | 80.6 | 360 bps | |||||||||||||||||||||
Basic earnings per share |
$ | 1.10 | $ | 0.02 | $ | 1.12 | $ | 0.87 | $ | (0.12 | ) | $ | 0.75 | 49.3 | ||||||||||||||
Diluted earnings per share |
$ | 1.09 | $ | 0.03 | $ | 1.12 | $ | 0.87 | $ | (0.13 | ) | $ | 0.74 | 51.4 |
(1) | Restated for the Companys change in accounting policy in relation to the accounting for rail grinding. | |
(2) | These earnings measures have no standardized meanings prescribed by GAAP and are unlikely to be comparable to similar measures of other companies. | |
(3) | To exclude the gain in fair value of long-term floating rate notes of $0.3 million due to short-term market changes and a loss in foreign exchange on long-term debt (FX on LTD) of $0.9 million in order to eliminate the impact of volatile short-term exchange rate fluctuations. | |
(4) | To exclude the tax expense associated with the gain in fair value of long-term floating rate notes of $0.1 million and the tax expense associated with the loss on FX on LTD of $3.6 million. | |
(5) | These adjusted figures are also referred to as Income, before FX on LTD and other specified items. | |
(6) | To exclude the loss of $54.5 million before tax which arose from the termination of lease with a shortline railway. | |
(7) | To exclude the gain in FX on LTD of $7.6 million in order to eliminate the impact of volatile short-term exchange rate fluctuations. | |
(8) | To exclude the tax recovery associated with the loss on termination of lease with a shortline railway of $16.9 million, the tax recovery due to a rate reduction and settlement related to a prior year of $55.7 million, and the tax expense associated with the gain on FX on LTD of $5.1 million. |
13
Year 2010 | Year 2009(1) | % | ||||||||||||||||||||||||||
Adjusted | ||||||||||||||||||||||||||||
In millions, except operating ratio | Reported | Adjustments | Adjusted | Reported | Adjustments | Adjusted | (Non-GAAP)(2) | |||||||||||||||||||||
and per share data | (GAAP) | Fav/(Unfav) | (Non-GAAP)(2) | (GAAP) | Fav/(Unfav) | (Non-GAAP)(2) | Fav/(Unfav) | |||||||||||||||||||||
Revenues |
$ | 4,981.5 | $ | | $ | 4,981.5 | $ | 4,402.2 | $ | | $ | 4,402.2 | 13.2 | |||||||||||||||
Expenses |
3,865.4 | | 3,865.4 | 3,572.1 | (24.6 | )(6) | 3,596.7 | (7.5 | ) | |||||||||||||||||||
Operating income |
1,116.1 | | 1,116.1 | 830.1 | (24.6 | ) | 805.5 | 38.6 | ||||||||||||||||||||
Gain on sale of partnership interest |
| | | 81.2 | (81.2 | )(7) | | | ||||||||||||||||||||
Less: |
||||||||||||||||||||||||||||
Other (income) and charges |
(12.0 | ) | (5.7 | )(3) | (6.3 | ) | 12.4 | (9.9 | )(8) | 22.3 | 128.3 | |||||||||||||||||
Interest expense |
257.3 | | 257.3 | 267.6 | | 267.6 | 3.8 | |||||||||||||||||||||
Income before income tax expense |
870.8 | (5.7 | ) | 865.1 | 631.3 | (115.7 | ) | 515.6 | 67.8 | |||||||||||||||||||
Income tax expense |
220.1 | 9.2 | (4) | 210.9 | 81.3 | (16.0 | )(9) | 97.3 | (116.8 | ) | ||||||||||||||||||
Net income |
$ | 650.7 | $ | 3.5 | $ | 654.2 | (5) | $ | 550.0 | $ | (131.7 | ) | $ | 418.3 | (5) | 56.4 | ||||||||||||
Operating ratio (%) |
77.6 | | 77.6 | 81.1 | (0.6 | ) | 81.7 | 410 bps | ||||||||||||||||||||
Basic earnings per share |
$ | 3.86 | $ | 0.02 | $ | 3.88 | $ | 3.31 | $ | (0.79 | ) | $ | 2.52 | 54.0 | ||||||||||||||
Diluted earnings per share |
$ | 3.85 | $ | 0.02 | $ | 3.87 | $ | 3.30 | $ | (0.79 | ) | $ | 2.51 | 54.2 |
(1) | Restated for the Companys change in accounting policy in relation to the accounting for rail grinding. | |
(2) | These earnings measures have no standardized meanings prescribed by GAAP and are unlikely to be comparable to similar measures of other companies. | |
(3) | To exclude the gain in fair value of long-term floating rate notes of $3.4 million due to short-term market changes and a gain in foreign exchange on long-term debt (FX on LTD) of $2.3 million in order to eliminate the impact of volatile short-term exchange rate fluctuations. | |
(4) | To exclude the tax expense associated with the gain in fair value of long-term floating rate notes of $1.0 million and the tax expense associated with the gain on FX on LTD of $8.2 million. | |
(5) | These adjusted figures are also referred to as Income, before FX on LTD and other specified items. | |
(6) | To exclude the gain of $79.1 million before tax which arose from the sale of significant properties and the loss of $54.5 million before tax which arose from the termination of lease with a shortline railway. | |
(7) | To exclude the gain of $81.2 million before tax which arose from the partial sale of the investment in the Detroit River Tunnel Partnership (DRTP). | |
(8) | To exclude the gain in fair value of long-term floating rate notes of $6.3 million due to short-term market changes and a gain in FX on LTD of $3.6 million in order to eliminate the impact of volatile short-term exchange rate fluctuations. | |
(9) | To exclude the tax expense associated with the partial sale of the investment in DRTP of $12.5 million, the tax expense associated with the sale of significant properties of $11.0 million, the tax expense associated with the gain in fair value of long- term floating rate notes of $1.8 million, the tax expense associated with the gain on FX on LTD of $31.3 million, the tax recovery associated with the loss on termination of lease with a shortline railway of $16.9 million, and the tax recovery due to a rate reduction and settlement related to a prior year of $55.7 million. |
14
Fourth Quarter | Year | |||||||||||||||||||||||||||||||
2010 | 2009 | Fav/(Unfav) | % | 2010 | 2009 | Fav/(Unfav) | % | |||||||||||||||||||||||||
Commodity Data |
||||||||||||||||||||||||||||||||
Freight Revenues (millions) |
||||||||||||||||||||||||||||||||
$ | 299.8 | $ | 293.6 | $ | 6.2 | 2.1 | - Grain |
$ | 1,135.7 | $ | 1,137.1 | $ | (1.4 | ) | (0.1 | ) | ||||||||||||||||
125.2 | 112.3 | 12.9 | 11.5 | - Coal |
490.8 | 443.8 | 47.0 | 10.6 | ||||||||||||||||||||||||
132.0 | 85.1 | 46.9 | 55.1 | - Sulphur and fertilizers |
474.8 | 309.3 | 165.5 | 53.5 | ||||||||||||||||||||||||
50.2 | 42.8 | 7.4 | 17.3 | - Forest products |
184.9 | 176.1 | 8.8 | 5.0 | ||||||||||||||||||||||||
240.0 | 205.2 | 34.8 | 17.0 | - Industrial and consumer products |
902.8 | 786.1 | 116.7 | 14.8 | ||||||||||||||||||||||||
75.3 | 67.9 | 7.4 | 10.9 | - Automotive |
316.4 | 229.3 | 87.1 | 38.0 | ||||||||||||||||||||||||
339.6 | 308.9 | 30.7 | 9.9 | - Intermodal |
1,347.9 | 1,198.1 | 149.8 | 12.5 | ||||||||||||||||||||||||
$ | 1,262.1 | $ | 1,115.8 | $ | 146.3 | 13.1 | Total Freight Revenues |
$ | 4,853.3 | $ | 4,279.8 | $ | 573.5 | 13.4 | ||||||||||||||||||
Millions of Revenue Ton-Miles (RTM) |
||||||||||||||||||||||||||||||||
8,775 | 9,156 | (381 | ) | (4.2 | ) | - Grain |
34,556 | 34,838 | (282 | ) | (0.8 | ) | ||||||||||||||||||||
4,814 | 4,493 | 321 | 7.1 | - Coal |
19,021 | 16,997 | 2,024 | 11.9 | ||||||||||||||||||||||||
4,963 | 2,716 | 2,247 | 82.7 | - Sulphur and fertilizers |
17,687 | 9,362 | 8,325 | 88.9 | ||||||||||||||||||||||||
1,344 | 1,098 | 246 | 22.4 | - Forest products |
5,238 | 4,470 | 768 | 17.2 | ||||||||||||||||||||||||
6,046 | 4,762 | 1,284 | 27.0 | - Industrial and consumer products |
21,996 | 17,653 | 4,343 | 24.6 | ||||||||||||||||||||||||
501 | 480 | 21 | 4.4 | - Automotive |
2,067 | 1,607 | 460 | 28.6 | ||||||||||||||||||||||||
6,440 | 6,169 | 271 | 4.4 | - Intermodal |
25,863 | 23,425 | 2,438 | 10.4 | ||||||||||||||||||||||||
32,883 | 28,874 | 4,009 | 13.9 | Total RTMs |
126,428 | 108,352 | 18,076 | 16.7 | ||||||||||||||||||||||||
Freight Revenue per RTM (cents) |
||||||||||||||||||||||||||||||||
3.42 | 3.21 | 0.21 | 6.5 | - Grain |
3.29 | 3.26 | 0.03 | 0.9 | ||||||||||||||||||||||||
2.60 | 2.50 | 0.10 | 4.0 | - Coal |
2.58 | 2.61 | (0.03 | ) | (1.1 | ) | ||||||||||||||||||||||
2.66 | 3.13 | (0.47 | ) | (15.0 | ) | - Sulphur and fertilizers |
2.68 | 3.30 | (0.62 | ) | (18.8 | ) | ||||||||||||||||||||
3.74 | 3.90 | (0.16 | ) | (4.1 | ) | - Forest products |
3.53 | 3.94 | (0.41 | ) | (10.4 | ) | ||||||||||||||||||||
3.97 | 4.31 | (0.34 | ) | (7.9 | ) | - Industrial and consumer products |
4.10 | 4.45 | (0.35 | ) | (7.9 | ) | ||||||||||||||||||||
15.03 | 14.15 | 0.88 | 6.2 | - Automotive |
15.31 | 14.27 | 1.04 | 7.3 | ||||||||||||||||||||||||
5.27 | 5.01 | 0.26 | 5.2 | - Intermodal |
5.21 | 5.11 | 0.10 | 2.0 | ||||||||||||||||||||||||
3.84 | 3.86 | (0.02 | ) | (0.5 | ) | Total Freight Revenue per RTM |
3.84 | 3.95 | (0.11 | ) | (2.8 | ) | ||||||||||||||||||||
Carloads (thousands) |
||||||||||||||||||||||||||||||||
117.4 | 121.1 | (3.7 | ) | (3.1 | ) | - Grain |
466.4 | 469.5 | (3.1 | ) | (0.7 | ) | ||||||||||||||||||||
87.3 | 83.9 | 3.4 | 4.1 | - Coal |
341.1 | 305.1 | 36.0 | 11.8 | ||||||||||||||||||||||||
47.9 | 31.9 | 16.0 | 50.2 | - Sulphur and fertilizers |
177.2 | 108.8 | 68.4 | 62.9 | ||||||||||||||||||||||||
18.6 | 16.4 | 2.2 | 13.4 | - Forest products |
71.6 | 66.8 | 4.8 | 7.2 | ||||||||||||||||||||||||
102.1 | 92.6 | 9.5 | 10.3 | - Industrial and consumer products |
396.9 | 345.9 | 51.0 | 14.7 | ||||||||||||||||||||||||
34.0 | 32.9 | 1.1 | 3.3 | - Automotive |
137.3 | 103.7 | 33.6 | 32.4 | ||||||||||||||||||||||||
266.2 | 241.0 | 25.2 | 10.5 | - Intermodal |
1,070.1 | 962.9 | 107.2 | 11.1 | ||||||||||||||||||||||||
673.5 | 619.8 | 53.7 | 8.7 | Total Carloads |
2,660.6 | 2,362.7 | 297.9 | 12.6 | ||||||||||||||||||||||||
Freight Revenue per Carload |
||||||||||||||||||||||||||||||||
$ | 2,554 | $ | 2,424 | $ | 130 | 5.4 | - Grain |
$ | 2,435 | $ | 2,422 | $ | 13 | 0.5 | ||||||||||||||||||
1,434 | 1,338 | 96 | 7.2 | - Coal |
1,439 | 1,455 | (16 | ) | (1.1 | ) | ||||||||||||||||||||||
2,756 | 2,668 | 88 | 3.3 | - Sulphur and fertilizers |
2,679 | 2,843 | (164 | ) | (5.8 | ) | ||||||||||||||||||||||
2,699 | 2,610 | 89 | 3.4 | - Forest products |
2,582 | 2,636 | (54 | ) | (2.0 | ) | ||||||||||||||||||||||
2,351 | 2,216 | 135 | 6.1 | - Industrial and consumer products |
2,275 | 2,273 | 2 | 0.1 | ||||||||||||||||||||||||
2,215 | 2,064 | 151 | 7.3 | - Automotive |
2,304 | 2,211 | 93 | 4.2 | ||||||||||||||||||||||||
1,276 | 1,282 | (6 | ) | (0.5 | ) | - Intermodal |
1,260 | 1,244 | 16 | 1.3 | ||||||||||||||||||||||
$ | 1,874 | $ | 1,800 | $ | 74 | 4.1 | Total Freight Revenue per Carload |
$ | 1,824 | $ | 1,811 | $ | 13 | 0.7 |
15
Fourth Quarter | Year | |||||||||||||||||||||||||||||||
2010 | 2009(1) | Fav/(Unfav) | % | 2010 | 2009(1) | Fav/(Unfav) | % | |||||||||||||||||||||||||
Operations Performance |
||||||||||||||||||||||||||||||||
1.59 | 1.77 | 0.18 | 10.2 | Total operating expenses per gross ton-miles (GTM) (cents)(2) |
1.59 | 1.71 | 0.12 | 7.0 | ||||||||||||||||||||||||
1.63 | 1.69 | 0.06 | 3.6 | Adjusted operating expenses exclusive of land sales per GTM (cents)(2)(3) |
1.60 | 1.74 | 0.14 | 8.0 | ||||||||||||||||||||||||
62,498 | 55,198 | 7,300 | 13.2 | Freight gross ton-miles (millions) |
242,757 | 209,475 | 33,282 | 15.9 | ||||||||||||||||||||||||
10,132 | 8,897 | 1,235 | 13.9 | Train miles (000) |
39,576 | 34,757 | 4,819 | 13.9 | ||||||||||||||||||||||||
15,637 | 15,073 | (564 | ) | (3.7 | ) | Average number of active employees Total |
15,460 | 15,175 | (285 | ) | (1.9 | ) | ||||||||||||||||||||
13,918 | 13,471 | (447 | ) | (3.3 | ) | Average number of active employees Expense |
13,879 | 13,619 | (260 | ) | (1.9 | ) | ||||||||||||||||||||
15,250 | 14,665 | (585 | ) | (4.0 | ) | Number of employees at end of period Total |
15,250 | 14,665 | (585 | ) | (4.0 | ) | ||||||||||||||||||||
14,048 | 13,614 | (434 | ) | (3.2 | ) | Number of employees at end of period Expense |
14,048 | 13,614 | (434 | ) | (3.2 | ) | ||||||||||||||||||||
1.20 | 1.18 | (0.02 | ) | (1.7 | ) | U.S. gallons of locomotive fuel per 1,000 GTMs freight & yard |
1.17 | 1.19 | 0.02 | 1.7 | ||||||||||||||||||||||
74.3 | 64.7 | (9.6 | ) | (14.8 | ) | U.S. gallons of locomotive fuel consumed total (millions)(4) |
282.0 | 246.7 | (35.3 | ) | (14.3 | ) | ||||||||||||||||||||
2.68 | 2.28 | (0.40 | ) | (17.5 | ) | Average fuel price (U.S. dollars per U.S. gallon) |
2.50 | 2.04 | (0.46 | ) | (22.5 | ) | ||||||||||||||||||||
Fluidity Data (including DM&E) |
||||||||||||||||||||||||||||||||
22.2 | n/a | | | Average terminal dwell AAR definition (hours) |
21.4 | n/a | | | ||||||||||||||||||||||||
21.7 | n/a | | | Average train speed AAR definition (mph) |
22.7 | n/a | | | ||||||||||||||||||||||||
135.0 | n/a | | | Car miles per car day |
139.9 | n/a | | | ||||||||||||||||||||||||
61.2 | n/a | | | Average daily active cars on-line (000) |
58.0 | n/a | | | ||||||||||||||||||||||||
1,048 | n/a | | | Average daily active road locomotives on-line |
1,015 | n/a | | | ||||||||||||||||||||||||
Fluidity Data (excluding DM&E) |
||||||||||||||||||||||||||||||||
22.2 | 23.1 | 0.9 | 3.9 | Average terminal dwell AAR definition (hours) |
21.4 | 21.9 | 0.5 | 2.3 | ||||||||||||||||||||||||
22.6 | 24.7 | (2.1 | ) | (8.5 | ) | Average train speed AAR definition (mph) |
23.8 | 25.5 | (1.7 | ) | (6.7 | ) | ||||||||||||||||||||
143.7 | 139.2 | 4.5 | 3.2 | Car miles per car day |
151.5 | 142.6 | 8.9 | 6.2 | ||||||||||||||||||||||||
54.7 | 50.3 | (4.4 | ) | (8.7 | ) | Average daily active cars on-line (000) |
50.9 | 46.6 | (4.3 | ) | (9.2 | ) | ||||||||||||||||||||
935 | 792 | (143 | ) | (18.1 | ) | Average daily active road locomotives on-line |
898 | 760 | (138 | ) | (18.2 | ) | ||||||||||||||||||||
Safety |
||||||||||||||||||||||||||||||||
1.86 | 2.15 | 0.29 | 13.5 | FRA personal injuries per 200,000 employee-hours |
1.61 | 1.92 | 0.31 | 16.1 | ||||||||||||||||||||||||
1.27 | 1.55 | 0.28 | 18.1 | FRA train accidents per million train-miles |
1.63 | 1.81 | 0.18 | 9.9 |
(1) | Certain prior period figures have been revised to conform with current presentation or have been updated to reflect new information. | |
(2) | Restated for the Companys change in accounting policy in relation to the accounting for rail grinding. | |
(3) | These earnings measures have no standardized meanings prescribed by GAAP and are unlikely to be comparable to similar measures of other companies. Adjusted operating expenses exclusive of land sales per GTM is calculated consistently with total operating expenses per GTM except for the exclusion of the loss on termination of lease with shortline railway for the three months, and year ended December 31, 2009 of $54.5 million, a gain on sale of significant properties for the year ended December 31, 2009 of $79.1 million and the exclusion of net gains on land sales of $21.9 million and $11.6 million for the three months ended December 31, 2010 and 2009, respectively, and $27.9 million and $39.4 million for the year ended December 31, 2010 and 2009, respectively. Please refer to pages 2 and 3, Adjusted Earnings Performance, Quarter and Year, Non-GAAP measures. | |
(4) | Includes gallons of fuel consumed from freight, yard and commuter service but excludes fuel used in capital projects and other non-freight activities. | |
n/a not available |
16