26 January 2011

Canadian Pacific Announces 2010 Results

Calgary Alberta - Canadian Pacific Railway Limited announced its fourth-quarter and full-year 2010 results today. Revenue in the fourth-quarter increased 13 percent with gains across all lines of business. Reported net income in the fourth-quarter was $186 million, an increase of 27 percent and diluted earnings per share was $1.09 for the quarter and $3.85 for the full year. Adjusted diluted earnings per share was $1.12 for the quarter and $3.87 for the full year.
 
"Fourth quarter saw double digit revenue growth, a continuation of our year-to-date trend," said Fred Green, President and Chief Executive Officer. " We delivered an improvement in our operating ratio by staying focused on three priorities:  safety, asset velocity, and productivity. During the year we once again improved our industry leading train safety performance, a great accomplishment while moving a significant increase in volumes."
 
Q4 2010 Earnings Release and Financial Reports
 
FOURTH-QUARTER 2010 RESULTS
 
·  Total revenues increased 13 percent to $1.3 billion;
·  Adjusted operating income increased 34 percent to $298 million;
·  Adjusted operating ratio improved 360 basis points to 77.0 percent;
·  Adjusted diluted earnings per share increased 51 percent to $1.12 per share.
 
FULL YEAR 2010 RESULTS
 
·  Total revenues increased 13 percent to $5.0 billion;
·  Adjusted operating income increased 39 percent to $1.1 billion;
·  Adjusted operating ratio improved 410 basis points to 77.6 percent;
·  Adjusted diluted earnings per share increased 54 percent to $3.87 per share;
·  Made a pension prepayment of $650 million and reduced long-term debt by about $250 million;
·  Increased the current dividend rate by 9% to $1.08 per share.
 
"We continue to see strong demand for rail service across all lines of business," added Fred Green. "We are ramping up our resources and making long-term investments in our company to meet growing demand, further improve customer service, and achieve our three to five year target of a low 70's operating ratio."
 
2011 Assumptions
 
The 2011 defined benefit pension contributions are currently estimated to be between $100 million to $125 million, lower than our previous estimates of $150 million to $200 million. Defined benefit pension contributions for 2012 to 2015 are estimated to be between $125 million to $175 million. The contribution levels reflect the Company's intention with respect to application of voluntary prepayments. Defined benefit pension expenses in 2011 are expected to be $46 million up from $36 million in 2010.
 
CP plans to spend in the range of $950 million to $1.05 billion on capital programs in 2011, as announced on 12 Jan 2011.
 
CP expects its tax rate to be in the 24 percent to 26 percent range in 2011.