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TheStreet Open House

Canadian Pacific Outlines New Vision For The Future

Stocks in this article: CP

Financial expectations on CP's journey to 2016 include:

  • Compound annual revenue growth of 4% - 7% off the 2012 base
  • A full-year operating ratio in the mid-sixties for 2016
  • Cash flow before dividends (*see Non-GAAP Measures below) of $900 million - $1,400 million in 2016
  • Annual capital spending in the range of $1.0$1.1 billion over the period

Key Assumptions

  • Average fuel cost per gallon of $3.45 U.S. per U.S. gallon
  • Defined benefit pension expense of $140$150 million through 2016
  • Defined benefit pension contributions between $100 - $125 million through 2015 increasing to $200 - $300 million in 2016
  • A tax rate of 25 - 27%
  • CP becomes fully cash taxable during the four-year period
  • Canadian to U.S. exchange rate at par

Fourth Quarter 2012 As previously noted on December 3, 2012, CP anticipates taking a fourth quarter estimated pre-tax non-cash charge of approximately $180 million ( $107 million after tax) on its option to build into the Powder River Basin.  CP also anticipates taking a charge related to labour and other restructuring activities, the amount of which is under review.

Editor's Notes: 

*To access a HD video webcast of the presentations on December 4 and 5 go to: www.cpr.ca under "Invest In CP" tab.

**To access the conference by the phone on December 4 and 5, please call 888-821-9349 or 201-604-5056 password 637402.

***Investor Day full-disclosure PowerPoint presentations by Mr. Harrison and his Executive Team can be viewed at www.cpr.ca after 0830 December 5, 2012.

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 that is a non-GAAP financial measure, the Company may not be able to provide a reconciliation to a GAAP measure, due to unknown variables and uncertainty related to future results.

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