Delivers strongest financial results in
company's history
CALGARY, Oct. 21, 2014 /PRNewswire/ - Canadian Pacific
Railway Limited (TSX: CP) (NYSE: CP) today announced record Q3 2014
financial results.
Net income in the third quarter rose to a record $400 million, or $2.31 per diluted share, from $324 million, or $1.84 per share, in the third quarter of 2013.
This represents an increase of 26 percent in earnings per share
year-over-year.
THIRD-QUARTER 2014 RESULTS COMPARED WITH THIRD-QUARTER
2013:
- Revenue rose 9 percent to a record $1.670 billion
- Operating expenses rose 4 percent to $1.049 billion
- Operating Ratio fell to a record low 62.8 percent, an
improvement of 310 basis points
- Operating income rose 19 percent to $621
million, the highest ever
"The CP team delivered another quarter of impressive results,"
said E. Hunter Harrison, CP's Chief
Executive Officer. "Going forward, we will continue to
execute on our plan of delivering safe, superior service to our
customers, focusing on further efficiency and capacity initiatives
and building on our solid foundation for growth."
"Despite recent volatility in commodity prices, we are confident
in the strength of the franchise and are on track to finish the
year with CP's strongest quarter to date," Harrison said.
Note on forward-looking information
This news release contains certain forward-looking information
within the meaning of applicable securities laws relating, but not
limited, to our operations, priorities and plans, anticipated
financial performance, business prospects, planned capital
expenditures, programs and strategies. This forward-looking
information also includes, but is not limited to, statements
concerning expectations, beliefs, plans, goals, objectives,
assumptions and statements about possible future events,
conditions, and results of operations or performance.
Forward-looking information may contain statements with words or
headings such as "financial expectations", "key assumptions",
"anticipate", "believe", "expect", "plan", "will", "outlook",
"should" or similar words suggesting future outcomes. To the extent
that CP has provided guidance using non-GAAP financial measures,
the Company may not be able to provide a reconciliation to a GAAP
measure, due to unknown variables and uncertainty related to future
results.
Undue reliance should not be placed on forward-looking
information as actual results may differ materially from the
forward-looking information. Forward-looking information is not a
guarantee of future performance. By its nature, CP's
forward-looking information involves numerous assumptions, inherent
risks and uncertainties that could cause actual results to differ
materially from the forward-looking information, 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; changes in
commodity prices; uncertainty surrounding timing and volumes of
commodities being shipped via CP; 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. The foregoing list of
factors is not exhaustive.
These and other factors 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.
Readers are cautioned not to place undue reliance on
forward-looking information. Forward-looking information is based
on current expectations, estimates and projections and it is
possible that predictions, forecasts, projections, and other forms
of forward-looking information will not be achieved by CP. 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 growing with its customers,
offering a suite of freight transportation services, logistics
solutions and supply chain expertise. Visit www.cpr.ca to see the
rail advantages of CP.
INTERIM
CONSOLIDATED STATEMENTS OF INCOME
(in millions of Canadian dollars, except per share
data) (unaudited)
|
|
|
|
|
For the three
months
|
|
|
For the nine
months
|
|
|
|
|
ended September
30
|
|
|
ended September
30
|
|
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freight
|
$
|
1,629
|
|
$
|
1,495
|
|
$
|
4,745
|
|
$
|
4,412
|
|
|
Other
|
|
41
|
|
|
39
|
|
|
115
|
|
|
114
|
|
Total
revenues
|
|
1,670
|
|
|
1,534
|
|
|
4,860
|
|
|
4,526
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
347
|
|
|
324
|
|
|
1,034
|
|
|
1,050
|
|
|
Fuel
|
|
249
|
|
|
226
|
|
|
793
|
|
|
742
|
|
|
Materials
|
|
47
|
|
|
36
|
|
|
146
|
|
|
115
|
|
|
Equipment
rents
|
|
36
|
|
|
44
|
|
|
117
|
|
|
134
|
|
|
Depreciation and
amortization
|
|
135
|
|
|
139
|
|
|
413
|
|
|
421
|
|
|
Purchased services
and other
|
|
235
|
|
|
241
|
|
|
726
|
|
|
758
|
|
Total operating
expenses
|
|
1,049
|
|
|
1,010
|
|
|
3,229
|
|
|
3,220
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
621
|
|
|
524
|
|
|
1,631
|
|
|
1,306
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income and
charges
|
|
1
|
|
|
-
|
|
|
4
|
|
|
11
|
|
|
Net interest
expense
|
|
70
|
|
|
70
|
|
|
209
|
|
|
208
|
|
Income before
income tax expense
|
|
550
|
|
|
454
|
|
|
1,418
|
|
|
1,087
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(Note 4)
|
|
150
|
|
|
130
|
|
|
393
|
|
|
294
|
|
Net
income
|
$
|
400
|
|
$
|
324
|
|
$
|
1,025
|
|
$
|
793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share (Note 5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
$
|
2.33
|
|
$
|
1.85
|
|
$
|
5.90
|
|
$
|
4.54
|
|
|
Diluted earnings per
share
|
$
|
2.31
|
|
$
|
1.84
|
|
$
|
5.84
|
|
$
|
4.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of shares (in millions) (Note 5)
|
|
|
|
|
|
|
|
|
Basic
|
|
171.9
|
|
|
175.1
|
|
|
173.9
|
|
|
174.8
|
|
|
Diluted
|
|
173.5
|
|
|
176.5
|
|
|
175.5
|
|
|
176.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per share
|
$
|
0.3500
|
|
$
|
0.3500
|
|
$
|
1.0500
|
|
$
|
1.0500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certain of the
comparative figures have been reclassified in order to be
consistent with the 2014 presentation. (Note 13)
|
|
See Notes to Interim
Consolidated Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTERIM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions of Canadian
dollars) (unaudited)
|
|
|
|
|
|
|
|
|
|
For the three
months
|
|
For the nine
months
|
|
|
|
ended September
30
|
|
ended September
30
|
|
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
400
|
|
$
|
324
|
|
$
|
1,025
|
|
$
|
793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) gain in
foreign currency translation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
adjustments, net of
hedging activities
|
|
(26)
|
|
|
2
|
|
|
(19)
|
|
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in derivatives
designated as cash flow hedges
|
|
-
|
|
|
-
|
|
|
(2)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in defined
benefit pension and post-retirement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
plans
|
|
31
|
|
|
50
|
|
|
93
|
|
|
299
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income before income taxes
|
|
5
|
|
52
|
|
|
72
|
|
298
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit
recovery (expense)
|
|
15
|
|
(22)
|
|
|
(1)
|
|
(63)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income (Note 3)
|
|
20
|
|
30
|
|
|
71
|
|
235
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income
|
$
|
420
|
|
$
|
354
|
|
$
|
1,096
|
|
$
|
1,028
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Interim
Consolidated Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTERIM
CONSOLIDATED BALANCE SHEETS AS AT,
(in millions of Canadian
dollars) (unaudited)
|
|
|
September
30
|
|
December
31
|
|
|
2014
|
|
2013
|
Assets
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
315
|
|
$
|
476
|
|
Restricted cash and
cash equivalents
|
|
84
|
|
|
411
|
|
Accounts receivable,
net
|
|
739
|
|
|
580
|
|
Materials and
supplies
|
|
168
|
|
|
165
|
|
Deferred income
taxes
|
|
164
|
|
|
344
|
|
Other current
assets
|
|
68
|
|
|
53
|
|
|
|
1,538
|
|
|
2,029
|
|
|
|
|
|
|
|
Investments
|
|
107
|
|
|
92
|
Properties
|
|
14,040
|
|
|
13,327
|
Assets held for sale
(Note 6)
|
|
-
|
|
|
222
|
Goodwill and
intangible assets
|
|
170
|
|
|
162
|
Pension
asset
|
|
1,210
|
|
|
1,028
|
Other
assets
|
|
160
|
|
|
200
|
Total
assets
|
$
|
17,225
|
|
$
|
17,060
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
1,213
|
|
$
|
1,189
|
|
Long-term debt
maturing within one year
|
|
132
|
|
|
189
|
|
|
|
1,345
|
|
|
1,378
|
|
|
|
|
|
|
|
Pension and other
benefit liabilities
|
|
657
|
|
|
657
|
Other long-term
liabilities
|
|
399
|
|
|
338
|
Long-term
debt
|
|
4,752
|
|
|
4,687
|
Deferred income
taxes
|
|
2,980
|
|
|
2,903
|
Total
liabilities
|
|
10,133
|
|
|
9,963
|
|
|
|
|
|
|
|
Shareholders'
equity (Note 7)
|
|
|
|
|
|
|
Share
capital
|
|
2,240
|
|
|
2,240
|
|
Additional paid-in
capital
|
|
35
|
|
|
34
|
|
Accumulated other
comprehensive loss (Note 3)
|
|
(1,432)
|
|
|
(1,503)
|
|
Retained
earnings
|
|
6,249
|
|
|
6,326
|
|
|
|
7,092
|
|
|
7,097
|
Total
liabilities and shareholders' equity
|
$
|
17,225
|
|
$
|
17,060
|
|
|
|
|
|
|
|
Contingencies
(Note 12)
|
|
|
|
|
|
See Notes to Interim
Consolidated Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTERIM
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions of Canadian
dollars) (unaudited)
|
|
|
|
|
|
|
|
For the three
months
|
|
For the nine
months
|
|
|
|
|
ended September
30
|
|
ended September
30
|
|
|
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
Operating
activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
400
|
|
$
|
324
|
|
$
|
1,025
|
|
$
|
793
|
|
Reconciliation of net
income to cash provided by
|
|
|
|
|
|
|
|
|
|
|
|
|
operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
135
|
|
|
139
|
|
|
413
|
|
|
421
|
|
|
|
Deferred income taxes
(Note 4)
|
|
120
|
|
|
110
|
|
|
194
|
|
|
260
|
|
|
|
Pension funding in
excess of expense (Note 11)
|
|
(38)
|
|
|
(17)
|
|
|
(103)
|
|
|
(40)
|
|
Other operating
activities, net
|
|
(1)
|
|
|
(21)
|
|
|
39
|
|
|
(40)
|
|
Change in non-cash
working capital balances related to
|
|
|
|
|
|
|
|
|
|
|
|
|
operations
|
|
(82)
|
|
|
(31)
|
|
|
(102)
|
|
|
(103)
|
Cash provided by
operating activities
|
|
534
|
|
|
504
|
|
|
1,466
|
|
|
1,291
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
properties
|
|
(414)
|
|
|
(298)
|
|
|
(936)
|
|
|
(802)
|
|
Proceeds from the
sale of west end of Dakota, Minnesota
|
|
|
|
|
|
|
|
|
|
|
|
|
and Eastern Railroad
(Note 6)
|
|
-
|
|
|
-
|
|
|
236
|
|
|
-
|
|
Proceeds from the
sale of properties and other assets
|
|
10
|
|
|
11
|
|
|
26
|
|
|
38
|
|
Change in restricted
cash and cash equivalents used to
|
|
|
|
|
|
|
|
|
|
|
|
|
collateralize letters
of credit
|
|
318
|
|
|
(247)
|
|
|
327
|
|
|
(346)
|
|
Other
|
|
1
|
|
|
(1)
|
|
|
-
|
|
|
(27)
|
Cash used in
investing activities
|
|
(85)
|
|
|
(535)
|
|
|
(347)
|
|
|
(1,137)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
paid
|
|
(61)
|
|
|
(62)
|
|
|
(184)
|
|
|
(183)
|
|
Issuance of CP common
shares
|
|
14
|
|
|
6
|
|
|
50
|
|
|
69
|
|
Purchase of CP common
shares (Note 7)
|
|
(455)
|
|
|
-
|
|
|
(987)
|
|
|
-
|
|
Repayment of
long-term debt
|
|
(21)
|
|
|
(19)
|
|
|
(175)
|
|
|
(45)
|
|
Settlement of foreign
exchange forward on long-term debt (Note 9)
|
|
17
|
|
|
-
|
|
|
17
|
|
|
-
|
|
Other
|
|
|
|
(3)
|
|
|
-
|
|
|
(3)
|
|
|
-
|
Cash used in
financing activities
|
|
(509)
|
|
|
(75)
|
|
|
(1,282)
|
|
|
(159)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of foreign
currency fluctuations on U.S. dollar-
|
|
|
|
|
|
|
|
|
|
|
|
denominated cash
and cash equivalents
|
|
6
|
|
|
(7)
|
|
|
2
|
|
|
1
|
Cash
position
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease in cash and
cash equivalents
|
|
(54)
|
|
|
(113)
|
|
|
(161)
|
|
|
(4)
|
|
Cash and cash
equivalents at beginning of period
|
|
369
|
|
|
442
|
|
|
476
|
|
|
333
|
Cash and cash
equivalents at end of period
|
$
|
315
|
|
$
|
329
|
|
$
|
315
|
|
$
|
329
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
paid
|
$
|
103
|
|
$
|
16
|
|
$
|
142
|
|
$
|
27
|
|
Interest
paid
|
$
|
60
|
|
$
|
58
|
|
$
|
220
|
|
$
|
209
|
See Notes to Interim
Consolidated Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTERIM
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 January
1, 2014
|
175.4
|
|
$
|
2,240
|
$
|
34
|
$
|
(1,503)
|
$
|
6,326
|
$
|
7,097
|
Net
income
|
-
|
|
|
-
|
|
-
|
|
-
|
|
1,025
|
|
1,025
|
Other comprehensive
income (Note 3)
|
-
|
|
|
-
|
|
-
|
|
71
|
|
-
|
|
71
|
Dividends
declared
|
-
|
|
|
-
|
|
-
|
|
-
|
|
(183)
|
|
(183)
|
Effect of stock-based
compensation expense
|
-
|
|
|
-
|
|
16
|
|
-
|
|
-
|
|
16
|
CP common shares
repurchased (Note 7)
|
(5.3)
|
|
|
(68)
|
|
-
|
|
-
|
|
(919)
|
|
(987)
|
Shares issued under
stock option plans (Note 10)
|
0.9
|
|
|
68
|
|
(15)
|
|
-
|
|
-
|
|
53
|
Balance at
September 30, 2014
|
171.0
|
|
$
|
2,240
|
$
|
35
|
$
|
(1,432)
|
$
|
6,249
|
$
|
7,092
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
shares
|
|
|
|
Additional
|
other
|
|
|
Total
|
|
(in
|
|
Share
|
paid-in
|
comprehensive
|
Retained
|
shareholders'
|
|
millions)
|
|
capital
|
capital
|
loss
|
earnings
|
equity
|
Balance at January
1, 2013
|
173.9
|
|
$
|
2,127
|
$
|
41
|
$
|
(2,768)
|
$
|
5,697
|
$
|
5,097
|
Net
income
|
-
|
|
|
-
|
|
-
|
|
-
|
|
793
|
|
793
|
Other comprehensive
income (Note 3)
|
-
|
|
|
-
|
|
-
|
|
235
|
|
-
|
|
235
|
Dividends
declared
|
-
|
|
|
-
|
|
-
|
|
-
|
|
(185)
|
|
(185)
|
Effect of stock-based
compensation expense
|
-
|
|
|
-
|
|
14
|
|
-
|
|
-
|
|
14
|
Shares issued under
stock option plans (Note 10)
|
1.3
|
|
|
94
|
|
(20)
|
|
-
|
|
-
|
|
74
|
Balance at
September 30, 2013
|
175.2
|
|
$
|
2,221
|
$
|
35
|
$
|
(2,533)
|
$
|
6,305
|
$
|
6,028
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Interim
Consolidated Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTES TO
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2014
(unaudited)
|
|
|
1
|
Basis of
presentation
|
|
|
|
These unaudited
interim consolidated financial statements of Canadian Pacific
Railway Limited ("CP", or the "Company"), expressed in Canadian
dollars, reflect management's estimates and assumptions that are
necessary for their fair presentation in conformity with accounting
principles generally accepted in the United States of America
("GAAP"). They do not include all disclosures required under GAAP
for annual financial statements and should be read in conjunction
with the 2013 annual consolidated financial statements. The
accounting policies used are consistent with the accounting
policies used in preparing the 2013 annual 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 statements
include all adjustments (consisting of normal and recurring
adjustments) necessary to present fairly such information. Interim
results are not necessarily indicative of the results expected for
the fiscal year.
|
|
|
2
|
Future accounting
changes
|
|
|
|
Reporting
discontinued operations and disclosures of disposals of
components
|
|
In April 2014, the
Financial Accounting Standards Board ("FASB") issued Accounting
Standards Update ("ASU") No. 2014-08, Reporting Discontinued
Operations and Disclosures of Disposals of Components of an Entity,
an amendment to FASB Accounting Standards Codification ("ASC")
Topic 205 and Topic 360. The update amends the definition of
a discontinued operation in Topic 205, expands disclosure
requirements for transactions that meet the definition of a
discontinued operation and requires entities to disclose
information about individually significant components that are
disposed of or held for sale and do not qualify as discontinued
operations. In addition, an entity is required to separately
present assets and liabilities of a discontinued operation for all
comparative periods and separately present assets and liabilities
of assets held for sale in the initial period in which the disposal
group is classified as held for sale on the face of the
consolidated balance sheets. For each period in which assets and
liabilities are separately presented on the consolidated balance
sheets, those amounts should not be offset and presented as a
single amount. This ASU will be effective for public entities for
fiscal years, and interim periods within those years, beginning
after December 15, 2014, and will be applied prospectively. The
adoption of this ASU is not expected to have a material impact to
the Company's financial statements.
|
|
|
|
Revenue from
contracts with customers
|
|
In May 2014, FASB
issued ASU No. 2014-09, Revenue from Contracts with Customers, a
new FASB ASC, Topic 606, which supersedes the revenue recognition
requirements in Topic 605 and most industry-specific guidance
throughout the Industry Topics of the Codification.
This new standard requires an entity to recognize revenue to depict
the transfer of promised goods or services to customers in an
amount that reflects the consideration to which the entity expects
to be entitled in exchange for those goods or services. In
addition, the new standard requires enhanced disclosures about
revenue to help users of financial statements to understand the
nature, amount, timing and uncertainty of revenue and cash flows
arising from contracts with customers. This ASU will be effective
for public entities for fiscal years, and interim periods within
those years, beginning after December 15, 2016. Entities have the
option of using either a full retrospective or a modified
retrospective approach to adopt the ASU. The Company has not, at
this time, ascertained the full impact on the consolidated
financial statements from the adoption of this new standard but
does not expect the impact to be material.
|
|
|
3
|
Changes in
accumulated other comprehensive loss ("AOCL") by
component
|
|
|
|
For the three
months ended September 30
|
For the nine
months ended September 30
|
(in millions
of
Canadian
dollars)
|
Foreign currency
net of hedging activities(1)
|
Derivatives and
other(1)
|
Pension and
post-retirement defined benefit
plans(1)(2)
|
Total(1)
|
Foreign currency
net of hedging activities(1)
|
Derivatives and
other(1)
|
Pension and
post-retirement defined benefit
plans(1)(2)
|
Total(1)
|
|
|
|
|
|
|
|
|
|
Opening balance,
2014
|
$ 114
|
$ (18)
|
$ (1,548)
|
$ (1,452)
|
$ 105
|
$ (15)
|
$ (1,593)
|
$ (1,503)
|
|
|
|
|
|
|
|
|
|
Other comprehensive
(loss)
|
|
|
|
|
|
|
|
|
income before
reclassifications
|
(4)
|
-
|
-
|
(4)
|
5
|
-
|
-
|
5
|
|
|
|
|
|
|
|
|
|
Amounts reclassified
from
|
|
|
|
|
|
|
|
|
accumulated
other
|
|
|
|
|
|
|
|
|
comprehensive loss
(income)
|
-
|
-
|
24
|
24
|
-
|
(3)
|
69
|
66
|
|
|
|
|
|
|
|
|
|
Net current-period
other
|
|
|
|
|
|
|
|
|
comprehensive (loss)
income
|
(4)
|
-
|
24
|
20
|
5
|
(3)
|
69
|
71
|
|
|
|
|
|
|
|
|
|
Closing balance,
2014
|
$ 110
|
$ (18)
|
$ (1,524)
|
$ (1,432)
|
$ 110
|
$ (18)
|
$ (1,524)
|
$ (1,432)
|
|
|
|
|
|
|
|
|
|
Opening balance,
2013
|
$ 94
|
$ (14)
|
$ (2,643)
|
$ (2,563)
|
$ 74
|
$ (14)
|
$ (2,828)
|
$ (2,768)
|
|
|
|
|
|
|
|
|
|
Other comprehensive
(loss)
|
|
|
|
|
|
|
|
|
income before
reclassifications
|
(7)
|
(7)
|
-
|
(14)
|
13
|
8
|
102
|
123
|
|
|
|
|
|
|
|
|
|
Amounts reclassified
from
|
|
|
|
|
|
|
|
|
accumulated
other
|
|
|
|
|
|
|
|
|
comprehensive loss
(income)
|
-
|
7
|
37
|
44
|
-
|
(8)
|
120
|
112
|
|
|
|
|
|
|
|
|
|
Net current-period
other
|
|
|
|
|
|
|
|
|
comprehensive (loss)
income
|
(7)
|
-
|
37
|
30
|
13
|
-
|
222
|
235
|
|
|
|
|
|
|
|
|
|
Closing balance,
2013
|
$ 87
|
$ (14)
|
$ (2,606)
|
$ (2,533)
|
$ 87
|
$ (14)
|
$ (2,606)
|
$ (2,533)
|
|
|
|
|
|
|
|
|
|
(1)
Amounts are presented net of tax.
|
(2)
Reclassified from Accumulated other comprehensive loss.
|
|
|
|
Amounts in
Pension and post-retirement defined benefit plans reclassified from
Accumulated
|
|
other
comprehensive loss
|
|
|
For the three
months
|
|
For the nine
months
|
|
|
ended September
30
|
|
ended September
30
|
|
(in millions of
Canadian dollars)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of prior
service costs (1)
|
$
|
(17)
|
|
$
|
(18)
|
|
$
|
(51)
|
|
$
|
(41)
|
|
Recognition of net
actuarial loss (1)
|
|
48
|
|
|
68
|
|
|
144
|
|
|
205
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total before income
tax
|
|
31
|
|
|
50
|
|
|
93
|
|
|
164
|
|
Income tax
recovery
|
|
(7)
|
|
|
(13)
|
|
|
(24)
|
|
|
(44)
|
|
Net of income
tax
|
$
|
24
|
|
$
|
37
|
|
$
|
69
|
|
$
|
120
|
(1)
Impacts Compensation and benefits on the Interim Consolidated
Statements of Income.
|
|
|
|
For the three
months
|
|
For the nine
months
|
|
|
ended September
30
|
|
ended September
30
|
|
(in millions of
Canadian dollars)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Current income tax
expense
|
$
|
30
|
|
$
|
20
|
|
$
|
199
|
|
$
|
34
|
|
Deferred income tax
expense
|
|
120
|
|
|
110
|
|
|
194
|
|
|
260
|
|
Income tax
expense
|
$
|
150
|
|
$
|
130
|
|
$
|
393
|
|
$
|
294
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The effective income
tax rate for the three and nine months ended September 30, 2014
were 27.2% and 27.7%, respectively (three and nine months ended
September 30, 2013 – 28.6% and 27.1%, respectively). The changes in
tax rates were primarily due to the impact of a change in the
province of British Columbia's corporate income tax rate in the
third quarter of 2013, which was partially offset by the benefit
recognized for the 2012 U.S. federal track maintenance credit of $6
million enacted in the first quarter of 2013.
|
|
|
5
|
Earnings per
share
|
|
|
|
At September 30,
2014, the number of shares outstanding was 171.0 million (September
30, 2013 – 175.2 million).
|
|
|
|
Basic earnings per
share have been calculated using net income for the period divided
by the weighted-average number of shares outstanding during the
period.
|
|
|
|
The number of shares
used in earnings per share calculations is reconciled as
follows:
|
|
|
|
|
|
For the three
months
|
|
|
For the nine
months
|
|
|
|
|
ended September
30
|
|
|
ended September
30
|
|
|
(in
millions)
|
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
basic shares outstanding
|
|
171.9
|
|
175.1
|
|
|
173.9
|
|
174.8
|
|
|
Dilutive effect of
stock options
|
|
1.6
|
|
1.4
|
|
|
1.6
|
|
1.5
|
|
|
Weighted-average
diluted shares outstanding
|
|
173.5
|
|
176.5
|
|
|
175.5
|
|
176.3
|
|
|
For the three and
nine months ended September 30, 2014, there were 15,980 options and
82,146 options, respectively, excluded from the computation of
diluted earnings per share because their effects were not dilutive
(three and nine months ended September 30, 2013 – 8,800 and 38,872,
respectively).
|
|
|
6
|
Assets held for
sale
|
|
|
|
On May 30, 2014, the
Company completed the sale of the west end of Dakota, Minnesota and
Eastern ("DM&E West") to Genesee & Wyoming Inc. ("G&W")
for net proceeds of U.S. $218 million (CDN $236 million). The
Company and G&W are currently in the process of finalizing
closing adjustments.
|
|
|
7
|
Shareholders'
equity
|
|
|
|
On February 20, 2014,
the Board of Directors of the Company approved a share repurchase
program, and in March 2014, the Company filed a new normal course
issuer bid ("bid") to purchase, for cancellation, up to 5.3 million
of its outstanding Common Shares. On September 29, 2014, the
Company announced the amendment of the bid to increase the maximum
number of its Common Shares that may be purchased from 5.3 million
to 12.7 million of its outstanding Commons Shares, effective
October 2, 2014. Under the filing, share purchases may be made
during the twelve months period that began March 17, 2014, and ends
March 16, 2015. The purchases are made at the market price on the
day of purchase, with consideration allocated to share capital up
to the average carrying amount of the shares, and any excess
allocated to retained earnings.
|
|
|
|
The following table
provides the activities under the share repurchase
program:
|
|
|
For the three
months
|
|
For the nine
months
|
|
|
ended September
30
|
|
ended September
30
|
|
|
|
2014
|
|
|
2014
|
|
|
|
|
|
|
|
|
Number of common
shares repurchased
|
|
2,000,392
|
|
|
5,270,374
|
|
Weighted-average
price per share(1)
|
$
|
210.91
|
|
$
|
187.33
|
|
Amount of repurchase
(in millions)(1)
|
$
|
422
|
|
$
|
987
|
|
(1)
Includes brokerage fees.
|
|
|
8
|
Revolving
credit facility
|
|
|
|
At September 26,
2014, the Company terminated its existing revolving credit facility
agreement dated as of November 29, 2013. On the same day, CP
entered into a new revolving credit facility (the "facility")
agreement with 15 highly rated financial institutions for a
commitment amount of U.S. $2 billion. The facility includes a U.S.
$1 billion five years portion and a U.S. $1 billion one year plus
one year term out portion. The facility can accommodate draws of
cash and/or letters of credit at market competitive pricing. At
September 30, 2014, the facility is undrawn. The facility agreement
requires the Company not to exceed a maximum debt to total
capitalization ratio. At September 30, 2014, the Company satisfied
this threshold stipulated in the financial covenant.
|
|
|
9
|
Financial
instruments
|
|
|
|
A.
|
Fair values of
financial instruments
|
|
|
|
|
|
The Company
categorizes its financial assets and liabilities measured at fair
value in line with the fair value hierarchy established by GAAP
that prioritizes, with respect to reliability, the inputs to
valuation techniques used to measure fair value. This hierarchy
consists of three broad levels. Level 1 inputs consist of quoted
prices (unadjusted) in active markets for identical assets and
liabilities and give the highest priority to these inputs. Level 2
and 3 inputs are based on significant other observable inputs and
significant unobservable inputs, respectively, and give lower
priority to these inputs.
|
|
|
|
|
|
When possible, the
estimated fair value is based on quoted market prices and, if not
available, estimates from third party brokers. For non-exchange
traded derivatives classified in Level 2, the Company uses standard
valuation techniques to calculate fair value. Primary inputs to
these techniques include observable market prices (interest,
foreign exchange and commodity) and volatility, depending on the
type of derivative and nature of the underlying risk. The Company
uses inputs and data used by willing market participants when
valuing derivatives and considers its own credit default swap
spread as well as those of its counterparties in its determination
of fair value.
|
|
|
|
|
|
The carrying values
of financial instruments equal or approximate their fair values
with the exception of long-term debt which has a fair value of
approximately $5,952 million at September 30, 2014 (December 31,
2013 - $5,572 million) and a carrying value of $4,884 million at
September 30, 2014 (December 31, 2013 – $4,876 million). The
estimated fair value of current and long-term borrowings has been
determined based on market information where available, or by
discounting future payments of interest and principal at estimated
interest rates expected to be available to the Company at period
end. All derivatives and long-term debt are classified as Level
2.
|
|
|
|
|
B.
|
Financial risk
management
|
|
|
|
|
|
|
|
|
Derivative
financial instruments
|
|
|
Derivative financial
instruments may be used to selectively reduce volatility associated
with fluctuations in interest rates, foreign exchange ("FX") rates,
the price of fuel and stock-based compensation expense. Where
derivatives are designated as hedging instruments, the relationship
between the hedging instruments and their associated hedged items
is documented, as well as the risk management objective and
strategy for the use of the hedging instruments. This documentation
includes linking the derivatives that are designated as fair value
or cash flow hedges to specific assets or liabilities on the
Consolidated Balance Sheet, commitments or forecasted transactions.
At the time a derivative contract is entered into and at least
quarterly thereafter, an assessment is made whether the derivative
item is effective in offsetting the changes in fair value or cash
flows of the hedged items. The derivative qualifies for hedge
accounting treatment if it is effective in substantially mitigating
the risk it was designed to address.
|
|
|
It is not the
Company's intent to use financial derivatives or commodity
instruments for trading or speculative purposes.
|
|
|
|
|
|
|
|
|
Foreign exchange
management
|
|
|
The Company conducts
business transactions and owns assets in both Canada and the United
States. As a result, the Company is exposed to fluctuations in
value of financial commitments, assets, liabilities, income or cash
flows due to changes in FX rates. The Company may enter into
foreign exchange risk management transactions primarily to manage
fluctuations in the exchange rate between Canadian and U.S.
currencies. FX exposure is primarily mitigated through natural
offsets created by revenues, expenditures and balance sheet
positions incurred in the same currency. Where appropriate, the
Company may negotiate with customers and suppliers to reduce the
net exposure.
|
|
|
|
|
|
Occasionally the
Company may enter into short-term FX forward contracts as part of
its cash management strategy.
|
|
|
|
|
|
Net investment
hedge
|
|
|
The FX gains and
losses on long-term debt are mainly unrealized and can only be
realized when U.S. dollar denominated long-term debt matures or is
settled. The Company also has long-term FX exposure on its
investment in U.S. affiliates. The majority of the Company's U.S.
dollar denominated long-term debt has been designated as a hedge of
the net investment in foreign subsidiaries. This designation has
the effect of mitigating volatility on net income by offsetting
long-term FX gains and losses on U.S. dollar denominated long-term
debt and gains and losses on its net investment. The effective
portion recognized in "Other comprehensive income" for the three
and nine months ended September 30, 2014 was an unrealized foreign
exchange loss of $175 million and $186 million, respectively (three
and nine months ended September 30, 2013 – unrealized foreign
exchange gain of $65 million and a loss of $112 million,
respectively). There was no ineffectiveness during the three and
nine months ended September 30, 2014 and comparative
periods.
|
|
|
|
|
|
Foreign exchange
forward contracts
|
|
|
The Company may enter
into FX forward contracts to lock in the amount of Canadian dollars
it has to pay on its U.S. denominated debt maturities.
|
|
|
|
|
|
At September 30,
2014, the Company had no remaining FX forward contracts to fix the
exchange rate on US denominated debt maturities. At December 31,
2013, the Company had FX forward contracts to fix the exchange rate
on U.S. $100 million of principal outstanding on a capital lease
due in January 2014, U.S. $175 million of its 6.50% Notes due in
May 2018, and U.S. $100 million of its 7.25% Notes due in May 2019.
These derivatives, which were accounted for as cash flow hedges,
guaranteed the amount of Canadian dollars that the Company would
repay when these obligations mature.
|
|
|
|
|
|
During the three
months ended March 31, 2014, the Company settled the FX forward
contract related to the repayment of a capital lease due in January
2014 for proceeds of $8 million.
|
|
|
|
|
|
During the three
months ended June 30, 2014, the Company de-designated and settled
prior to maturity the FX forward contracts related to the repayment
of its 6.50% Notes due in May 2018 and its 7.25% Notes due in May
2019 for proceeds of $17 million settled in the third quarter of
2014 with the offset recorded as realized gains of $3 million in
"Accumulated other comprehensive loss" and $14 million in "Retained
earnings". Amounts remaining in "Accumulated other comprehensive
loss" are being amortized to "Other income and charges" until the
underlying debts, which were hedged, are repaid.
|
|
|
|
|
|
During the three
months ended September 30, 2014, the amount being amortized to
"Other income and charges" is not significant.
|
|
|
|
|
|
During the three and
nine months ended September 30, 2014, the combined realized and
unrealized foreign exchange gain was $nil and $3 million,
respectively (three and nine months ended September 30, 2013 –
unrealized loss of $6 million and unrealized gain of $9 million,
respectively), were recorded in "Other income and charges" in
relation to these settled derivatives. Gains recorded in "Other
income and charges" were largely offset by losses on the underlying
debt which the settled derivatives were designated to hedge.
Similarly, losses were largely offset by gains on the underlying
debt.
|
|
|
|
|
|
At December 31, 2013,
the unrealized gains derived from these FX forwards was $25 million
of which $6 million was included in "Other current assets" and $19
million in "Other assets" with the offsets reflected as unrealized
gains of $5 million in "Accumulated other comprehensive loss" and
$20 million in "Retained earnings".
|
|
|
|
|
|
At September 30,
2014, the Company expected that, during the next twelve months, a
pre-tax gain of $1 million would be reclassified to "Other income
and charges".
|
10
|
Stock-based
compensation
|
|
|
|
At September 30,
2014, the Company had several stock-based compensation plans,
including stock option plans, various cash settled liability plans
and an employee stock savings plan. These plans resulted in an
expense of $42 million and $102 million for the three and nine
months ended September 30, 2014, respectively (three and nine
months ended September 30, 2013 - an expense of $9 million and $52
million, respectively).
|
|
|
|
Regular options
In the nine months ended September 30, 2014, under CP's stock
option plans, the Company issued 424,440 regular options at the
weighted-average price of $173.81 per share, based on the closing
price on the grant date.
|
|
|
|
Pursuant to the
employee plans, these regular options may be exercised upon
vesting, which is between 12 and 48 months after the grant date,
and will expire after 10 years.
|
|
|
|
Under the fair value
method, the fair value of the regular options at the grant date was
$21 million. The weighted-average fair value assumptions were
approximately:
|
|
|
|
|
For the nine
months
|
|
|
|
ended September,
30 2014
|
|
|
|
|
|
|
|
|
Grant
price
|
$
|
173.81
|
|
|
|
Expected option life
(years)(1)
|
|
5.96
|
|
|
|
Risk-free interest
rate(2)
|
|
1.66
|
%
|
|
|
Expected stock price
volatility(3)
|
|
28.70
|
%
|
|
|
Expected annual
dividends per share (4)
|
$
|
1.40
|
|
|
|
Expected forfeiture
rate(5)
|
|
1.20
|
%
|
|
|
Weighted-average
grant date fair value per regular options
|
|
|
|
|
|
granted during the
period
|
|
$48.68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Represents the period of time that awards are expected to be
outstanding. Historical data on exercise behaviour, or when
available, specific expectations regarding future exercise
behaviour, were used to estimate the expected life of the
option.
|
(2) Based
on the implied yield available on zero-coupon government issues
with an equivalent remaining term at the time of the
grant.
|
(3) Based
on the historical stock price volatility of the Company's stock
over a period commensurate with the expected term of the
option.
|
(4)
Determined by the current annual dividend at the time of grant. The
Company does not employ different dividend yields throughout the
contractual term of the option.
|
(5) The
Company estimated forfeitures based on past experience. This rate
is monitored on a periodic basis.
|
|
|
|
Performance share
unit ("PSU") plan In the nine months ended September 30,
2014, the Company issued 165,500 PSUs with a grant
date fair value of approximately $25 million. These units attract
dividend equivalents in the form of additional units based on the
dividends paid on the Company's Common Shares. PSUs vest and are
settled in cash, or in CP common shares approximately three years
after the grant date, contingent upon CP's performance
("performance factor"). The fair value of PSUs is measured, both on
the grant date and each subsequent quarter until settlement,
utilizing a Monte Carlo simulation model. The model utilizes
multiple input variables that determine the probability of
satisfying the performance factor and market conditions stipulated
in the grant.
|
|
|
|
|
|
Deferred share
unit ("DSU") plan In the nine months ended September 30,
2014, the Company granted 52,169 DSUs with a grant
date fair value of approximately $9 million. DSUs vest over various
periods of up to 48 months and are only redeemable for a specified
period after employment is terminated. An expense to income for
DSUs is recognized over the vesting period for both the initial
subscription price and the change in value between reporting
periods.
|
|
|
|
|
|
Restricted share
unit ("RSU") plan In the nine months ended September 30,
2014, the Company granted 15,918 RSUs with a grant
date fair value of approximately $3 million. RSUs are subject to
time vesting over 36 months. An expense to income for RSUs is
recognized over the vesting period for both the initial
subscription price and the change in value between reporting
periods.
|
|
|
|
11
|
Pensions and
other benefits
|
|
|
|
In the three and nine
months ended September 30, 2014, the Company made contributions of
$25 million and $64 million, respectively (three and nine months
ended September 30, 2013 - $24 million and $76 million,
respectively), to its defined benefit pension plans. The net
periodic benefit cost for defined benefit pension plans and other
benefits recognized in the three and nine months ended September
30, 2014 included the following components:
|
|
|
|
|
|
For the three
months
|
|
|
|
|
ended September
30
|
|
|
|
|
Pensions
|
|
|
Other
benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars)
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current service cost
(benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
earned
by employees in the
|
|
|
|
|
|
|
|
|
|
|
|
|
|
period)
|
$
|
27
|
|
$
|
34
|
|
$
|
4
|
|
$
|
4
|
|
|
Interest cost on
benefit obligation
|
|
120
|
|
|
111
|
|
|
5
|
|
|
5
|
|
|
Expected return on
fund assets
|
|
(190)
|
|
|
(186)
|
|
|
-
|
|
|
-
|
|
|
Recognized net
actuarial loss (gain)
|
|
47
|
|
|
66
|
|
|
1
|
|
|
(2)
|
|
|
Amortization of prior
service costs
|
|
(17)
|
|
|
(18)
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net periodic
(recovery) benefit cost
|
$
|
(13)
|
|
$
|
7
|
|
$
|
10
|
|
$
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the nine
months
|
|
|
|
ended September
30
|
|
|
|
Pensions
|
|
|
Other
benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars)
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current service cost
(benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
earned
by employees in the
|
|
|
|
|
|
|
|
|
|
|
|
|
period)
|
$
|
80
|
|
$
|
102
|
|
$
|
11
|
|
$
|
12
|
|
Interest cost on
benefit obligation
|
|
358
|
|
|
334
|
|
|
17
|
|
|
16
|
|
Expected return on
fund assets
|
|
(568)
|
|
|
(559)
|
|
|
-
|
|
|
-
|
|
Recognized net
actuarial loss
|
|
142
|
|
|
200
|
|
|
2
|
|
|
1
|
|
Amortization of prior
service costs
|
|
(51)
|
|
|
(41)
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net periodic
(recovery) benefit cost
|
$
|
(39)
|
|
$
|
36
|
|
$
|
30
|
|
$
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12
|
Contingencies
|
|
|
|
|
|
In the normal course
of its operations, the Company becomes involved in various legal
actions, including claims relating to injuries and damages to
property. The Company maintains provisions it considers to be
adequate for such actions. While the final outcome with respect to
actions outstanding or pending at September 30, 2014 cannot be
predicted with certainty, it is the opinion of management that
their resolution will not have a material adverse effect on the
Company's financial position or results of operations individually
and in aggregate.
|
|
|
|
|
|
Legal proceedings
related to Lac-Mégantic rail accident
|
|
|
On July 6, 2013, a
train carrying crude oil operated by Montreal Maine and Atlantic
Railway ("MM&A") derailed and exploded in Lac-Mégantic, Quebec
on a section of railway line owned by MM&A. The previous day CP
had interchanged the train to MM&A, and after that interchange
MM&A exercised exclusive control over the train.
|
|
|
|
|
|
Following this
incident, the Minister of Sustainable Development, Environment,
Wildlife and Parks of Quebec issued an order directing certain
named parties to recover the contaminants and to clean up and
decontaminate the derailment site. CP was added as a named party on
August 14, 2013. CP is a party to an administrative appeal with
respect to this order.
|
|
|
|
|
|
A class action
lawsuit has also been filed in the Superior Court of Quebec on
behalf of a class of persons and entities residing in, owning or
leasing property in, operating a business in or physically present
in Lac-Mégantic. The lawsuit seeks damages caused by the derailment
including for wrongful deaths, personal injuries, and property
damages. CP was added as a defendant on August 16, 2013. In the
wake of the derailment and ensuing litigation, MM&A filed for
bankruptcy in Canada and the United States.
|
|
|
|
|
|
At this early stage
in the legal proceedings, any potential liability and the quantum
of potential loss cannot be determined. Nevertheless, CP denies
liability for MM&A's derailment and will vigorously defend
itself in both proceedings and any proceeding that may be commenced
in the future.
|
|
|
|
|
|
Environmental
liabilities
|
|
|
Environmental
remediation accruals cover site-specific remediation programs.
Environmental remediation accruals are measured on an undiscounted
basis unless a reliably determinable estimate as to amount and
timing of costs can be established. The accruals are recorded when
the costs to remediate are probable and reasonably estimable.
Certain future costs to monitor sites are discounted at a risk free
rate.
|
|
|
|
|
|
The accruals for
environmental remediation represent CP's best estimate of its
probable future obligation and include both asserted and unasserted
claims, without reduction for anticipated recoveries from third
parties. Although the recorded accruals include CP's best estimate
of all probable costs, CP's total environmental remediation costs
cannot be predicted with certainty. Accruals for environmental
remediation may change from time to time as new information about
previously untested sites becomes known, environmental laws and
regulations evolve and advances are made in environmental
remediation technology. The accruals may also vary as the courts
decide legal proceedings against outside parties responsible for
contamination. These potential charges, which cannot be quantified
at this time, are not expected to be material to CP's financial
position, but may materially affect income in the particular period
in which a charge is recognized. Costs related to existing, but as
yet unknown, or future contamination will be accrued in the period
in which they become probable and reasonably
estimable.
|
|
|
The expense included
in "Purchased services and other" for the three and nine
months ended September 30, 2014 was $1
million and $2 million, respectively (three and nine
months ended September 30, 2013 – $4 million and $5
million, respectively). Provisions for environmental
remediation costs are recorded in "Other long-term liabilities",
except for the current portion which is recorded in "Accounts
payable and accrued liabilities". The total amount provided
at September 30, 2014 was $91 million (December 31, 2013 – $90
million). Payments are expected to be made over 10 years to
2024.
|
|
|
|
|
13
|
Reclassification of comparative
figures
|
|
|
|
|
|
Billings to third
parties for the recovery of costs incurred for freight car repairs
and servicing have been reclassified from "Purchased services and
other" to "Compensation and benefits" and "Materials" within
"Operating expenses", in order to match the billings with the costs
incurred on behalf of third parties. As a result, the changes to
these components of "Operating expenses" for the three and nine
months ended September 30, 2013 are noted below. "Operating
expenses" in total were unchanged as a result of this
reclassification.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchased
|
|
|
|
Compensation
|
|
|
|
|
|
services
and
|
|
(in millions of
Canadian dollars)
|
|
and
benefits
|
|
|
Materials
|
|
|
other
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended September 30, 2013
|
|
|
|
|
|
|
|
As previously
reported
|
$
|
331
|
|
$
|
54
|
|
$
|
216
|
|
(Decrease)
increase
|
|
(7)
|
|
|
(18)
|
|
|
25
|
|
As
reclassified
|
$
|
324
|
|
$
|
36
|
|
$
|
241
|
|
|
|
|
|
|
|
|
|
|
|
For the nine months
ended September 30, 2013
|
|
|
|
|
|
|
|
|
|
As previously
reported
|
$
|
1,075
|
|
$
|
184
|
|
$
|
664
|
|
(Decrease)
increase
|
|
(25)
|
|
|
(69)
|
|
|
94
|
|
As
reclassified
|
$
|
1,050
|
|
$
|
115
|
|
$
|
758
|
|
|
|
|
|
|
|
|
|
|
Summary of Rail
Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter
|
|
|
|
|
|
Year-to-date
|
|
|
2014
|
|
|
2013
|
Change
|
%
|
|
Financial
(millions, except per share data)
|
|
|
2014
|
|
|
2013
|
Change
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,629
|
|
$
|
1,495
|
|
$
|
134
|
9
|
|
|
Freight
revenue
|
|
$
|
4,745
|
|
$
|
4,412
|
|
$
|
333
|
8
|
|
41
|
|
|
39
|
|
|
2
|
5
|
|
|
Other
revenue
|
|
|
115
|
|
|
114
|
|
|
1
|
1
|
|
1,670
|
|
|
1,534
|
|
|
136
|
9
|
|
Total
revenues
|
|
|
4,860
|
|
|
4,526
|
|
|
334
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
347
|
|
|
324
|
|
|
23
|
7
|
|
|
Compensation and
benefits(1)
|
|
|
1,034
|
|
|
1,050
|
|
|
(16)
|
(2)
|
|
249
|
|
|
226
|
|
|
23
|
10
|
|
|
Fuel
|
|
|
793
|
|
|
742
|
|
|
51
|
7
|
|
47
|
|
|
36
|
|
|
11
|
31
|
|
|
Materials(1)
|
|
|
146
|
|
|
115
|
|
|
31
|
27
|
|
36
|
|
|
44
|
|
|
(8)
|
(18)
|
|
|
Equipment
rents
|
|
|
117
|
|
|
134
|
|
|
(17)
|
(13)
|
|
135
|
|
|
139
|
|
|
(4)
|
(3)
|
|
|
Depreciation and
amortization
|
|
|
413
|
|
|
421
|
|
|
(8)
|
(2)
|
|
235
|
|
|
241
|
|
|
(6)
|
(2)
|
|
|
Purchased services
and other (1)
|
|
|
726
|
|
|
758
|
|
|
(32)
|
(4)
|
|
1,049
|
|
|
1,010
|
|
|
39
|
4
|
|
Total operating
expenses
|
|
|
3,229
|
|
|
3,220
|
|
|
9
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
621
|
|
|
524
|
|
|
97
|
19
|
|
Operating
income
|
|
|
1,631
|
|
|
1,306
|
|
|
325
|
25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
-
|
|
|
1
|
-
|
|
|
Other income and
charges
|
|
|
4
|
|
|
11
|
|
|
(7)
|
(64)
|
|
70
|
|
|
70
|
|
|
-
|
-
|
|
|
Net interest expense
|
|
|
209
|
|
|
208
|
|
|
1
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
550
|
|
|
454
|
|
|
96
|
21
|
|
Income before income
tax expense
|
|
|
1,418
|
|
|
1,087
|
|
|
331
|
30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150
|
|
|
130
|
|
|
20
|
15
|
|
|
Income tax
expense
|
|
|
393
|
|
|
294
|
|
|
99
|
34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
400
|
|
$
|
324
|
|
$
|
76
|
23
|
|
Net
income
|
|
$
|
1,025
|
|
$
|
793
|
|
$
|
232
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
62.8
|
|
|
65.9
|
|
|
(3.1)
|
(310)
|
bps
|
|
Operating ratio
(%)
|
|
|
66.4
|
|
|
71.1
|
|
|
(4.7)
|
(470)
|
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2.33
|
|
$
|
1.85
|
|
$
|
0.48
|
26
|
|
|
Basic earnings per
share
|
|
$
|
5.90
|
|
$
|
4.54
|
|
$
|
1.36
|
30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2.31
|
|
$
|
1.84
|
|
$
|
0.47
|
26
|
|
|
Diluted earnings per
share
|
|
$
|
5.84
|
|
$
|
4.50
|
|
$
|
1.34
|
30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
Outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares
|
|
|
|
|
|
|
|
|
|
|
|
|
171.9
|
|
|
175.1
|
|
|
(3.2)
|
(2)
|
|
|
outstanding
(millions)
|
|
|
173.9
|
|
|
174.8
|
|
|
(0.9)
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of diluted shares
|
|
|
|
|
|
|
|
|
|
|
|
|
173.5
|
|
|
176.5
|
|
|
(3.0)
|
(2)
|
|
|
outstanding
(millions)
|
|
|
175.5
|
|
|
176.3
|
|
|
(0.8)
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
Exchange
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average foreign
exchange rate
|
|
|
|
|
|
|
|
|
|
|
|
|
0.93
|
|
|
0.96
|
|
|
(0.03)
|
(3)
|
|
|
(US$/Canadian$)
|
|
|
0.92
|
|
|
0.98
|
|
|
(0.06)
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average foreign
exchange rate
|
|
|
|
|
|
|
|
|
|
|
|
|
1.08
|
|
|
1.04
|
|
|
0.04
|
4
|
|
|
(Canadian$/US$)
|
|
|
1.09
|
|
|
1.02
|
|
|
0.07
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Billings to third
parties for the recovery of costs incurred for freight car repairs
and servicing have been reclassified from Purchased services and
other to Compensation and benefits and Materials within Operating
expenses.
|
|
|
Summary of Rail
Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter
|
|
|
|
|
|
|
Year-to-date
|
2014
|
|
2013
|
|
Change
|
|
%
|
|
|
|
|
|
2014
|
|
2013
|
|
Change
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity
Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freight Revenues
(millions)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
248
|
|
$
|
212
|
|
$
|
36
|
|
17
|
|
|
|
- Canadian
Grain
|
|
$
|
721
|
|
$
|
606
|
|
$
|
115
|
|
19
|
|
127
|
|
|
107
|
|
|
20
|
|
19
|
|
|
|
- U.S.
Grain
|
|
|
348
|
|
|
309
|
|
|
39
|
|
13
|
|
150
|
|
|
177
|
|
|
(27)
|
|
(15)
|
|
|
|
-
Coal
|
|
|
463
|
|
|
470
|
|
|
(7)
|
|
(1)
|
|
70
|
|
|
66
|
|
|
4
|
|
6
|
|
|
|
-
Potash
|
|
|
251
|
|
|
243
|
|
|
8
|
|
3
|
|
55
|
|
|
63
|
|
|
(8)
|
|
(13)
|
|
|
|
- Fertilizers and
sulphur
|
|
|
173
|
|
|
201
|
|
|
(28)
|
|
(14)
|
|
52
|
|
|
51
|
|
|
1
|
|
2
|
|
|
|
- Forest
products
|
|
|
152
|
|
|
157
|
|
|
(5)
|
|
(3)
|
|
160
|
|
|
142
|
|
|
18
|
|
13
|
|
|
|
- Chemicals and
plastics
|
|
|
462
|
|
|
419
|
|
|
43
|
|
10
|
|
136
|
|
|
78
|
|
|
58
|
|
74
|
|
|
|
-
Crude
|
|
|
354
|
|
|
267
|
|
|
87
|
|
33
|
|
190
|
|
|
164
|
|
|
26
|
|
16
|
|
|
|
- Metals, minerals,
and consumer products
|
|
|
521
|
|
|
449
|
|
|
72
|
|
16
|
|
83
|
|
|
95
|
|
|
(12)
|
|
(13)
|
|
|
|
-
Automotive
|
|
|
275
|
|
|
298
|
|
|
(23)
|
|
(8)
|
|
202
|
|
|
170
|
|
|
32
|
|
19
|
|
|
|
- Domestic
intermodal
|
|
|
579
|
|
|
511
|
|
|
68
|
|
13
|
|
156
|
|
|
170
|
|
|
(14)
|
|
(8)
|
|
|
|
- International
intermodal
|
|
|
446
|
|
|
482
|
|
|
(36)
|
|
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,629
|
|
$
|
1,495
|
|
$
|
134
|
|
9
|
|
|
Total Freight
Revenues
|
|
$
|
4,745
|
|
$
|
4,412
|
|
$
|
333
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of
Revenue Ton-Miles (RTM)
|
|
|
|
|
|
|
|
|
|
|
|
|
6,790
|
|
|
5,363
|
|
|
1,427
|
|
27
|
|
|
|
- Canadian
Grain
|
|
|
19,710
|
|
|
16,010
|
|
|
3,700
|
|
23
|
|
3,011
|
|
|
2,501
|
|
|
510
|
|
20
|
|
|
|
- U.S.
Grain
|
|
|
8,229
|
|
|
7,967
|
|
|
262
|
|
3
|
|
5,422
|
|
|
6,440
|
|
|
(1,018)
|
|
(16)
|
|
|
|
-
Coal
|
|
|
16,804
|
|
|
17,396
|
|
|
(592)
|
|
(3)
|
|
2,812
|
|
|
2,583
|
|
|
229
|
|
9
|
|
|
|
-
Potash
|
|
|
10,219
|
|
|
10,473
|
|
|
(254)
|
|
(2)
|
|
915
|
|
|
1,179
|
|
|
(264)
|
|
(22)
|
|
|
|
- Fertilizers and
sulphur
|
|
|
3,119
|
|
|
3,847
|
|
|
(728)
|
|
(19)
|
|
1,036
|
|
|
1,093
|
|
|
(57)
|
|
(5)
|
|
|
|
- Forest
products
|
|
|
2,959
|
|
|
3,583
|
|
|
(624)
|
|
(17)
|
|
3,409
|
|
|
3,218
|
|
|
191
|
|
6
|
|
|
|
- Chemicals and
plastics
|
|
|
9,941
|
|
|
10,187
|
|
|
(246)
|
|
(2)
|
|
4,625
|
|
|
2,894
|
|
|
1,731
|
|
60
|
|
|
|
-
Crude
|
|
|
11,799
|
|
|
10,025
|
|
|
1,774
|
|
18
|
|
2,993
|
|
|
2,825
|
|
|
168
|
|
6
|
|
|
|
- Metals, minerals,
and consumer products
|
|
|
8,404
|
|
|
7,675
|
|
|
729
|
|
9
|
|
420
|
|
|
533
|
|
|
(113)
|
|
(21)
|
|
|
|
-
Automotive
|
|
|
1,531
|
|
|
1,766
|
|
|
(235)
|
|
(13)
|
|
3,076
|
|
|
2,565
|
|
|
511
|
|
20
|
|
|
|
- Domestic
intermodal
|
|
|
8,713
|
|
|
7,628
|
|
|
1,085
|
|
14
|
|
3,040
|
|
|
3,490
|
|
|
(450)
|
|
(13)
|
|
|
|
- International
intermodal
|
|
|
8,925
|
|
|
10,281
|
|
|
(1,356)
|
|
(13)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37,549
|
|
|
34,684
|
|
|
2,865
|
|
8
|
|
|
Total
RTMs
|
|
|
110,353
|
|
|
106,838
|
|
|
3,515
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freight Revenue
per RTM (cents)
|
|
|
|
|
|
|
|
|
|
|
|
|
3.65
|
|
|
3.96
|
|
|
(0.31)
|
|
(8)
|
|
|
|
- Canadian
Grain
|
|
|
3.66
|
|
|
3.78
|
|
|
(0.12)
|
|
(3)
|
|
4.22
|
|
|
4.26
|
|
|
(0.04)
|
|
(1)
|
|
|
|
- U.S.
Grain
|
|
|
4.23
|
|
|
3.88
|
|
|
0.35
|
|
9
|
|
2.76
|
|
|
2.76
|
|
|
-
|
|
-
|
|
|
|
-
Coal
|
|
|
2.76
|
|
|
2.70
|
|
|
0.06
|
|
2
|
|
2.51
|
|
|
2.64
|
|
|
(0.13)
|
|
(5)
|
|
|
|
-
Potash
|
|
|
2.46
|
|
|
2.32
|
|
|
0.14
|
|
6
|
|
6.06
|
|
|
5.32
|
|
|
0.74
|
|
14
|
|
|
|
- Fertilizers and
sulphur
|
|
|
5.56
|
|
|
5.23
|
|
|
0.33
|
|
6
|
|
5.01
|
|
|
4.66
|
|
|
0.35
|
|
8
|
|
|
|
- Forest
products
|
|
|
5.13
|
|
|
4.38
|
|
|
0.75
|
|
17
|
|
4.68
|
|
|
4.40
|
|
|
0.28
|
|
6
|
|
|
|
- Chemicals and
plastics
|
|
|
4.65
|
|
|
4.10
|
|
|
0.55
|
|
13
|
|
2.93
|
|
|
2.69
|
|
|
0.24
|
|
9
|
|
|
|
-
Crude
|
|
|
3.00
|
|
|
2.66
|
|
|
0.34
|
|
13
|
|
6.36
|
|
|
5.83
|
|
|
0.53
|
|
9
|
|
|
|
- Metals, minerals,
and consumer products
|
|
|
6.20
|
|
|
5.86
|
|
|
0.34
|
|
6
|
|
19.74
|
|
|
17.70
|
|
|
2.04
|
|
12
|
|
|
|
-
Automotive
|
|
|
17.99
|
|
|
16.86
|
|
|
1.13
|
|
7
|
|
6.57
|
|
|
6.63
|
|
|
(0.06)
|
|
(1)
|
|
|
|
- Domestic
intermodal
|
|
|
6.65
|
|
|
6.69
|
|
|
(0.04)
|
|
(1)
|
|
5.11
|
|
|
4.86
|
|
|
0.25
|
|
5
|
|
|
|
- International
intermodal
|
|
|
4.99
|
|
|
4.68
|
|
|
0.31
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.34
|
|
|
4.31
|
|
|
0.03
|
|
1
|
|
|
Total Freight Revenue
per RTM
|
|
|
4.30
|
|
|
4.13
|
|
|
0.17
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of Rail
Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter
|
|
|
|
|
|
|
Year-to-date
|
2014
|
|
2013
|
|
Change
|
|
%
|
|
|
|
|
|
2014
|
|
2013
|
|
|
Change
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carloads
(thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
76
|
|
|
61
|
|
|
15
|
|
25
|
|
|
|
- Canadian
Grain
|
|
|
216
|
|
|
181
|
|
35
|
|
19
|
|
|
44
|
|
|
45
|
|
|
(1)
|
|
(2)
|
|
|
|
- U.S.
Grain
|
|
|
127
|
|
|
136
|
|
(9)
|
|
(7)
|
|
|
73
|
|
|
90
|
|
|
(17)
|
|
(19)
|
|
|
|
-
Coal
|
|
|
233
|
|
|
246
|
|
(13)
|
|
(5)
|
|
|
24
|
|
|
24
|
|
|
-
|
|
-
|
|
|
|
-
Potash
|
|
|
85
|
|
|
89
|
|
(4)
|
|
(4)
|
|
|
15
|
|
|
17
|
|
|
(2)
|
|
(12)
|
|
|
|
- Fertilizers and
sulphur
|
|
|
46
|
|
|
55
|
|
(9)
|
|
(16)
|
|
|
15
|
|
|
15
|
|
|
-
|
|
-
|
|
|
|
- Forest
products
|
|
|
44
|
|
|
51
|
|
(7)
|
|
(14)
|
|
|
52
|
|
|
49
|
|
|
3
|
|
6
|
|
|
|
- Chemicals and
plastics
|
|
|
146
|
|
|
148
|
|
(2)
|
|
(1)
|
|
|
31
|
|
|
19
|
|
|
12
|
|
63
|
|
|
|
-
Crude
|
|
|
80
|
|
|
65
|
|
15
|
|
23
|
|
|
71
|
|
|
61
|
|
|
10
|
|
16
|
|
|
|
- Metals, minerals,
and consumer products
|
|
|
187
|
|
|
173
|
|
14
|
|
8
|
|
|
33
|
|
|
35
|
|
|
(2)
|
|
(6)
|
|
|
|
-
Automotive
|
|
|
100
|
|
|
108
|
|
(8)
|
|
(7)
|
|
|
111
|
|
|
93
|
|
|
18
|
|
19
|
|
|
|
- Domestic
intermodal
|
|
|
318
|
|
|
275
|
|
43
|
|
16
|
|
|
142
|
|
|
166
|
|
|
(24)
|
|
(14)
|
|
|
|
- International
intermodal
|
|
|
412
|
|
|
475
|
|
(63)
|
|
(13)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
687
|
|
|
675
|
|
|
12
|
|
2
|
|
|
Total
Carloads
|
|
|
1,994
|
|
|
2,002
|
|
(8)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freight Revenue
per Carload
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,264
|
|
$
|
3,512
|
|
$
|
(248)
|
|
(7)
|
|
|
|
- Canadian
Grain
|
|
$
|
3,336
|
|
$
|
3,350
|
|
(14)
|
|
-
|
|
|
2,878
|
|
|
2,360
|
|
|
518
|
|
22
|
|
|
|
- U.S.
Grain
|
|
|
2,746
|
|
|
2,270
|
|
476
|
|
21
|
|
|
2,040
|
|
|
1,952
|
|
|
88
|
|
5
|
|
|
|
-
Coal
|
|
|
1,987
|
|
|
1,912
|
|
75
|
|
4
|
|
|
2,917
|
|
|
2,842
|
|
|
75
|
|
3
|
|
|
|
-
Potash
|
|
|
2,951
|
|
|
2,728
|
|
223
|
|
8
|
|
|
3,835
|
|
|
3,834
|
|
|
1
|
|
-
|
|
|
|
- Fertilizers and
sulphur
|
|
|
3,790
|
|
|
3,670
|
|
120
|
|
3
|
|
|
3,426
|
|
|
3,145
|
|
|
281
|
|
9
|
|
|
|
- Forest
products
|
|
|
3,443
|
|
|
3,096
|
|
347
|
|
11
|
|
|
3,097
|
|
|
2,899
|
|
|
198
|
|
7
|
|
|
|
- Chemicals and
plastics
|
|
|
3,176
|
|
|
2,825
|
|
351
|
|
12
|
|
|
4,436
|
|
|
4,072
|
|
|
364
|
|
9
|
|
|
|
-
Crude
|
|
|
4,446
|
|
|
4,107
|
|
339
|
|
8
|
|
|
2,697
|
|
|
2,700
|
|
|
(3)
|
|
-
|
|
|
|
- Metals, minerals,
and consumer products
|
|
|
2,785
|
|
|
2,599
|
|
186
|
|
7
|
|
|
2,519
|
|
|
2,747
|
|
|
(228)
|
|
(8)
|
|
|
|
-
Automotive
|
|
|
2,741
|
|
|
2,747
|
|
(6)
|
|
-
|
|
|
1,819
|
|
|
1,820
|
|
|
(1)
|
|
-
|
|
|
|
- Domestic
intermodal
|
|
|
1,823
|
|
|
1,857
|
|
(34)
|
|
(2)
|
|
|
1,090
|
|
|
1,024
|
|
|
66
|
|
6
|
|
|
|
- International
intermodal
|
|
|
1,079
|
|
|
1,014
|
|
65
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,372
|
|
$
|
2,214
|
|
$
|
158
|
|
7
|
|
|
Total Freight Revenue
per Carload
|
|
$
|
2,380
|
|
$
|
2,204
|
|
176
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of Rail
Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter
|
|
|
|
Year-to-date
|
2014
|
|
2013(1)
|
|
Change
|
|
%
|
|
|
|
2014
|
|
2013(1)
|
|
Change
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
69,430
|
|
64,188
|
|
5,242
|
|
8
|
|
Freight gross
ton-miles (millions)
|
|
203,112
|
|
199,098
|
|
4,014
|
|
2
|
37,549
|
|
34,684
|
|
2,865
|
|
8
|
|
Revenue ton-miles
(millions)
|
|
110,353
|
|
106,838
|
|
3,515
|
|
3
|
8,990
|
|
8,837
|
|
153
|
|
2
|
|
Train miles
(thousands)
|
|
27,052
|
|
28,476
|
|
(1,424)
|
|
(5)
|
8,264
|
|
7,817
|
|
447
|
|
6
|
|
Average train weight
- excluding local traffic (tons)
|
|
8,037
|
|
7,485
|
|
552
|
|
7
|
6,912
|
|
6,746
|
|
166
|
|
2
|
|
Average train length
- excluding local traffic (feet)
|
|
6,726
|
|
6,485
|
|
241
|
|
4
|
8.1
|
|
7.2
|
|
0.9
|
|
13
|
|
Average terminal
dwell - (hours)
|
|
8.9
|
|
6.9
|
|
2.0
|
|
29
|
18.8
|
|
19.1
|
|
(0.3)
|
|
(2)
|
|
Average train speed -
(mph)(2)
|
|
17.6
|
|
18.6
|
|
(1.0)
|
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
225.9
|
|
217.7
|
|
8.2
|
|
4
|
|
Locomotive
productivity (daily average GTMs/active HP)
|
|
219.6
|
|
213.6
|
|
6.0
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.99
|
|
1.02
|
|
(0.03)
|
|
(3)
|
|
Fuel
efficiency(3)
|
|
1.03
|
|
1.07
|
|
(0.04)
|
|
(4)
|
68.0
|
|
64.7
|
|
3.3
|
|
5
|
|
U.S. gallons of
locomotive fuel consumed (millions)(4)
|
|
206.7
|
|
210.3
|
|
(3.6)
|
|
(2)
|
3.39
|
|
3.34
|
|
0.05
|
|
1
|
|
Average fuel price
(U.S. dollars per U.S. gallon)
|
|
3.52
|
|
3.45
|
|
0.07
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,699
|
|
14,974
|
|
(275)
|
|
(2)
|
|
Total employees
(average)(5)
|
|
14,577
|
|
15,122
|
|
(545)
|
|
(4)
|
14,659
|
|
14,766
|
|
(107)
|
|
(1)
|
|
Total employees (end
of period)(5)
|
|
14,659
|
|
14,766
|
|
(107)
|
|
(1)
|
14,944
|
|
15,318
|
|
(374)
|
|
(2)
|
|
Workforce (end of
period)(6)
|
|
14,944
|
|
15,318
|
|
(374)
|
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Safety
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.65
|
|
1.82
|
|
(0.17)
|
|
(9)
|
|
FRA personal injuries
per 200,000 employee-hours
|
|
1.66
|
|
1.70
|
|
(0.04)
|
|
(2)
|
1.62
|
|
1.83
|
|
(0.21)
|
|
(11)
|
|
FRA train accidents
per million train-miles
|
|
1.29
|
|
1.92
|
|
(0.63)
|
|
(33)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Certain prior period
figures have been revised to conform with current presentation or
have been updated to reflect new information.
|
(2)
|
Incorporates a new
reporting definition where average train speed measures the
line-haul movement from origin to destination including terminal
dwell hours, and excluding foreign railroad and customer
delays.
|
(3)
|
Fuel efficiency is
defined as U.S. gallons of locomotive fuel consumed per 1,000 GTMs
– freight and yard.
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(4)
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Includes gallons of
fuel consumed from freight, yard and commuter service but excludes
fuel used in capital projects and other non-freight
activities.
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(5)
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An employee is
defined as an individual, including trainees, who has worked more
than 40 hours in a standard biweekly pay period. This
excludes part time employees, contractors, and
consultants.
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(6)
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Workforce is defined
as total employees plus part time employees, contractors, and
consultants.
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SOURCE Canadian Pacific