Canadian Pacific announces solid fourth-quarter operating performance

    Canadian Pacific announces solid fourth-quarter operating performance

PR Newswire

CALGARY, Jan. 29, 2013

CALGARY, Jan. 29, 2013 /PRNewswire/ - 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

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 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
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      For the year
                                   ended December 31        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          378      389    1,506    1,426
           benefits 
          Fuel                      256      267      999      968
          Materials                  60       58      238      243
          Equipment rents            48       51      206      209
          Depreciation and          140      123      539      490
           amortization
          Purchased services        242      217      940      874
           and other 
          Asset impairment          265        -      265        -
           (Note 2)
          Labour restructuring       53        -       53        -
           (Note 3)
Total operating expenses           1,442    1,105    4,746    4,210
                                                                 
Operating income                      60      303      949      967
Less:                                                              
          Other income and            3       10       37       18
           charges
          Net interest               69       61      276      252
           expense
                                                                
(Loss) income before income tax      (12)      232      636      697
expense
                                                                
Income tax (recovery) expense        (27)       11      152      127
Net income                      $      15  $    221  $    484  $    570
                                                                 
                                                                 
Earnings per share                                                 
          Basic earnings per   $    0.08  $   1.31  $   2.82  $   3.37
           share
          Diluted earnings per $    0.08  $   1.30  $   2.79  $   3.34
           share
                                                                
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.



CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions of Canadian dollars)
(unaudited)

                              For the three months      For the year
                                    ended December 31       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              (2)         (1)       9       (7)
  designated as cash flow hedges
 Change in defined benefit                                     
  pension and post-retirement
  plans                             (211)       (1,000)       (50)       (883)
 Other comprehensive loss         (214)       (993)     (30)     (890)
  before income taxes
 Income tax recovery on above       58         250       -       
  items                                                                   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.



CONSOLIDATED BALANCE SHEETS
(in millions of Canadian dollars)
(unaudited)

                                                  December 31  December 31
                                                     2012        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.



CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions of Canadian dollars)
(unaudited)

                             For the three months      For the year
                                   ended December 31       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               140     123      539      490
       amortization
    Deferred income taxes          (22)      68      140      187
    Pension funding in excess      (17)    (607)      (61)     (647)
       of expense 
    Asset impairment (Note 2)      265       -      265        -
    Labour restructuring, net       50       -       50        -
       (Note 3)
    Other operating                 (3)     (65)      (84)     (112)
       activities, net
       Change in non-cash working
       capital balances related
       to
    operations                     41      99       (5)       24
Cash provided by (used in)            469    (161)    1,328      512
operating activities
                                                              
Investing activities                                               
 Additions to properties            (336)    (400)   (1,148)   (1,104)
 Proceeds from the sale of             7      30      145       71
  properties and other assets 
 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            -      28      (27)       28
  short-term borrowing 
 Other                                 1      (3)        1       (3)
Cash (used in) provided by             (7)     490      (30)      217
financing activities
                                                              
Effect of foreign currency                                         
fluctuations on U.S. dollar-
denominated cash and cash               -      (5)       (1)        1
equivalents
Cash position                                                      
 Increase (decrease) in cash and     126     (50)      286     (314)
  cash equivalents
 Cash and cash equivalents at        207      97       47      361
  beginning of period
Cash and cash equivalents at end   $   333   $   47  $    333  $     47
of period
                                                              
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.



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        170.0  $   1,854 $        86 $       (2,736) $   5,445 $        4,649
January 1,
2012
Net income           -         -          -             -      484           484
Other                 -         -          -           (32)        -           (32)
comprehensive
loss
Dividends             -         -          -             -     (232)          (232)
declared
Effect of             -         -         25             -        -            25
stock-based
compensation
expense
Shares issued       3.9       273        (70)             -        -           203
under stock
option plans 
Balance at        173.9  $   2,127 $        41 $       (2,768) $   5,697 $        5,097
December 31,
2012
                                                                             
             Common                           Accumulated            
               shares                 Additional       other                      Total
                 (in         Share     paid-in     comprehensive   Retained   shareholders'
              millions)     capital    capital         loss       earnings      equity
Balance at        169.2  $   1,813 $        24 $       (2,086) $   5,073 $        4,824
January 1,
2011
Net income           -         -          -             -      570           570
Other                 -         -          -          (650)        -          (650)
comprehensive
loss
Dividends             -         -          -             -     (198)          (198)
declared
Effect of             -         -         16             -        -            16
stock-based
compensation
expense 
Changes to            -         -         57             -        -            57
stock-based
compensation
awards 
Shares issued       0.8        41        (11)             -        -            30
under stock
option plans
Balance at        170.0  $   1,854 $        86 $       (2,736) $   5,445 $        4,649
December 31,
2011
                                                                             
See notes to interim consolidated financial                                           
information.



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

                                                               For the three
                                                               months ended
(in millions of Canadian dollars)                            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":

                                                                      
                                                               For the three
                                                               months ended
(in millions of Canadian dollars)                            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 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.

                                         Summary of Rail Data                                           
                                                                                         
              Fourth Quarter                                                    Year
  2012    2011 Fav/(Unfav)   %  Financial            2012    2011 Fav/(Unfav)    %
                                              (millions, except
                                              per share data)
                                                                                         
                                   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      1,506   1,426      (80)       (6)
                                                and benefits
   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        539     490      (49)      (10)
                                                and
                                                amortization
   242     217      (25)        (12)   Purchased           940     874      (66)       (8)
                                                services and
                                                other
   265       -     (265)          -   Asset               265       -     (265)        -
                                                impairment
    53       -      (53)          -   Labour               53       -      (53)        -
                                                restructuring
 1,442   1,105     (337)        (30)  Total operating     4,746   4,210     (536)      (13)
                                              expenses (OE)
                                                                                 
                                                                                 
    60     303     (243)        (80)  Operating income      949     967      (18)       (2)
                                                                                 
                                   Less:                                           
                                                                                 
     3      10        7         70   Other income         37      18      (19)     (106)
                                                and charges
    69      61       (8)        (13)   Net interest        276     252      (24)      (10)
                                                expense
                                                                                 
                                                                                 
   (12)     232     (244)       (105)  (Loss) income         636     697      (61)       (9)
                                              before income tax
                                              expense
                                                                                 
   (27)      11       38        345   Income tax          152     127      (25)      (20)
                                                (recovery)
                                                expense
                                                                                 
                                                                                 
$    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   $  2.82  $  3.37   $ (0.55)      (16)
                                                per share
                                                                                 
                                                                                 
$  0.08  $  1.30   $ (1.22)        (94)   Diluted          $  2.79  $  3.34   $ (0.55)      (16)
                                                earnings per
                                                share
                                                                                 
                                                                                 
                                   Shares                                          
                                              Outstanding
                                                                                 
                                                Weighted
                                                average number
                                                of shares
                                                outstanding
 173.3   169.8      3.5          2   (millions)        171.8   169.5      2.3        1
                                                                                 
                                                Weighted
                                                average number
                                                of diluted
                                                shares
                                                outstanding
 174.7   170.8      3.9          2   (millions)        173.2   170.6      2.6        2
                                                                                 
                                                                                 
                                   Foreign Exchange                                
                                                                                 
                                                Average foreign
                                                exchange rate
  1.01    0.98    (0.03)         (3)   (US$/Canadian$)    1.00    1.01     0.01        1
                                                                                 
                                                Average foreign
                                                exchange rate
  0.99    1.02    (0.03)         (3)   (Canadian$/US$)    1.00    0.99     0.01        1

                                       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
                                           - Sulphur                                           
                                                 and
    133       133           -     -       fertilizers       520       549        (29)    (5)
                                           -                                                   
                                                 Industrial
                                                 and
                                                 consumer
    335       288          47    16       products        1,268     1,017        251    25
                                           -                                                   
     99        94           5     5       Automotive        425       338         87    26
                                           - Forest                                            
     46        47          (1)    (2)       products          193       189          4     2
                                           -                                                   
    340       332           8     2       Intermodal      1,370     1,303         67     5
                                                                                  
                                          Total Freight 
$  1,464   $  1,375   $       89     6     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
                                           - Sulphur                                           
                                                 and
  3,838     4,899      (1,061)   (22)       fertilizers    17,058    20,468     (3,410)   (17)
                                           -                                                   
                                                 Industrial
                                                 and
                                                 consumer
  8,347     6,478       1,869    29       products       30,469    24,122      6,347    26
                                           -                                                   
    561       535          26     5       Automotive      2,482     2,080        402    19
                                           - Forest                                            
  1,129     1,176         (47)    (4)       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
                                           - Sulphur                                           
                                                 and
   3.47      2.71        0.76    28       fertilizers      3.05      2.68       0.37    14
                                           -                                                   
                                                 Industrial
                                                 and
                                                 consumer
   4.01      4.45       (0.44)   (10)       products         4.16      4.22      (0.06)    (1)
                                           -                                                   
  17.65     17.57        0.08     -       Automotive      17.12     16.25       0.87     5
                                           - Forest                                            
   4.07      4.00        0.07     2       products         4.10      3.81       0.29     8
                                           -                                                   
   5.47      5.51       (0.04)    (1)       Intermodal       5.51      5.45       0.06     1
                                                                                  
                                          Total Freight 
                                               Revenue per
   4.12      4.03        0.09     2     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
                                           - Sulphur                                           
                                                 and
     43        48          (5)   (10)       fertilizers       177       199        (22)   (11)
                                           -                                                   
                                                 Industrial
                                                 and
                                                 consumer
    119       114           5     4       products          469       421         48    11
                                           -                                                   
     39        39           -     -       Automotive        162       145         17    12
                                           - Forest                                            
     16        17          (1)    (6)       products           67        72         (5)    (7)
                                           -                                                   
    253       250           3     1       Intermodal      1,024       997         27     3
                                                                                  
                                          Total         
    680       676           4     1     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
                                           - Sulphur                                           
                                                 and
  3,093     2,771         322    12       fertilizers     2,938     2,759        179     6
                                           -                                                   
                                                 Industrial
                                                 and
                                                 consumer
  2,815     2,526         289    11       products        2,704     2,416        288    12
                                           -                                                   
  2,538     2,410         128     5       Automotive      2,623     2,331        292    13
                                           - Forest                                            
  2,875     2,765         110     4       products        2,881     2,625        256    10
                                           -                                                   
  1,344     1,328          16     1       Intermodal      1,338     1,307         31     2
                                                                                  
                                          Total Freight 
                                               Revenue per
$  2,153   $  2,034   $      119     6     Carload         $   2,079  $   1,945  $      134    7

                                         Summary of Rail Data (Page 3)
                                                                                               
                Fourth Quarter                                                      Year
  ^2012  2011^(1)  ^Fav/(Unfav)   ^%                     ^2012  2011^(1)  ^Fav/(Unfav)   ^%
                                                                                               
                                             Operations                                          
                                             Performance                                                
                                                                                               
                                             Freight gross                                       
                                                 ton-miles
  66,204     65,472            732       1   (millions)        254,354    247,955          6,399       3
                                             Train miles                                         
  10,046     10,611           (565)      (5)   (thousands)        40,270     40,145            125       -
                                             Average train                                       
                                                 weight -
                                                 excluding
                                                 local traffic
   7,014      6,587            427       6   (tons)              6,709      6,593            116       2
                                             Average train                                       
                                                 length -
                                                 excluding
                                                 local traffic
   6,132      5,654            478       8   (feet)              5,838      5,665            173       3
                                             Average train                                       
                                                 speed - AAR
                                                 definition
    24.0       23.4            0.6       3   (mph)                24.4       21.3            3.1      15
                                             Average                                             
                                                 terminal
                                                 dwell- AAR
                                                 definition
    17.3       17.7            0.4       2   (hours)              17.6       19.9            2.3      12
                                             Car miles per                                       
   201.7      183.5           18.2      10   car day             202.3      160.1           42.2      26
                                                                                               
                                             Locomotive                                          
                                                 productivity
                                                 (daily average
                                                 GTMs/active
   197.1      175.1           22.0      13   HP)                 179.8      166.7           13.1       8
                                             Employee                                            
                                                 productivity
                                                 (million
                                                 GTMs/expense
     4.7        4.5            0.2       4   employee)            17.4       17.5           (0.1)      (1)
                                                                                               
                                             Fuel                                                
  ^1.14     ^1.17         ^0.03     ^3   efficiency^(2)     ^1.15     ^1.18         ^0.03     ^3
                                             U.S. gallons                                        
                                                 of locomotive
                                                 fuel consumed
  ^74.4     ^76.0          ^1.6     ^2   (millions)^(3)    ^289.2    ^290.8          ^1.6     ^1
                                             Average fuel                                        
                                                 price (U.S.
                                                 dollars per
    3.47       3.45          (0.02)      (1)   U.S. gallon)         3.45       3.38          (0.07)      (2)
                                                                                               
                                             OE per GTM                                          
  ^2.18     ^1.69        ^(0.49)   ^(29)   (cents)^(4)        ^1.87     ^1.70        ^(0.17)   ^(10)
                                             OE per GTM -                                        
                                                 Adjusted
  ^1.70     ^1.72         ^0.02     ^1   (cents)^(5)        ^1.72     ^1.71        ^(0.01)    ^(1)
                                                                                               
                                             Average number                                      
                                                 of active
                                                 employees -
^16,282   ^16,616          ^334     ^2   Total^(6)        ^16,657   ^16,097         ^(560)    ^(3)
                                             Average number                                      
                                                 of active
                                                 employees -
^14,108   ^14,459          ^351     ^2   Expense^(6)      ^14,594   ^14,169         ^(425)    ^(3)
                                             Number of                                           
                                                 employees at
                                                 end of period
^15,671   ^16,428          ^757     ^5   - Total^(6)      ^15,671   ^16,428          ^757     ^5
                                             Number of                                           
                                                 employees at
                                                 end of period
^13,945   ^14,764          ^819     ^6   - Expense^(6)    ^13,945   ^14,764          ^819     ^6
                                                                                               
                                             Average daily                                       
                                                 active cars
                                                 on-line
    42.2       46.7            4.5      10   (thousands)          40.9       51.4           10.5      20
                                             Average daily                                       
                                                 active road
                                                 locomotives
     952      1,085            133      12   on-line             1,007      1,085             78       7
                                                                                               
                                                                                               
                                         Safety                                                 
                                                                                               
                                             FRA personal                                        
                                                 injuries per
                                                 200,000
    1.89       1.70          (0.19)     (11)   employee-hours       1.46       1.85           0.39      21
                                             FRA train                                           
                                                 accidents per
                                                 million
    1.68       1.40          (0.28)     (20)   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.











SOURCE Canadian Pacific

Contact:

Contacts:

Media
Ed Greenberg
Canadian Pacific
Tel.: (612) 849-4717
24/7 Media Pager: 855-242-3674
e-mail:ed_greenberg@cpr.ca

Investment Community
Janet Weiss
Canadian Pacific
Tel.: (403) 319-3233
e-mail:investor@cpr.ca
 
Press spacebar to pause and continue. Press esc to stop.