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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
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