Canadian Pacific 4th-Qtr Net Income Rose
39%
01/27/2004
How Canadian Pacific has done for us: +31% in 14 months. This
railroad company keeps rolling along with their latest report
of a 39% increase in net income. The company's press release
follows:
Canadian Pacific Railway (TSX/NYSE: CP)
reported net income of $175 million in the fourth quarter
of 2003, an increase of 39 percent over net income of $126
million in the same period of 2002. Diluted earnings per share
were $1.10 in the three-month period ending Dec. 31, 2003,
compared with $0.79 in the fourth quarter of 2002.
On a non-GAAP basis reflecting ongoing operations,
income excluding foreign exchange gains on long-term debt
and other specified items was $115 million in the last quarter
of 2003, compared with $120 million in the same period a year
earlier. Other specified items included a loss of $18 million
($29 million before tax) on assets transferred to IBM Canada
Ltd. under an outsourcing agreement, as well as net favourable
tax adjustments of $6 million. Diluted earnings per share
on this basis were $0.72, compared with $0.75.
Excluding the loss on assets transferred
to IBM, CPR's operating income in the fourth quarter of 2003
was $226 million, compared with $238 million in the same period
of 2002, and its operating ratio was 76.6 per cent, compared
with 75 per cent. CPR's operating income in fourth-quarter
2003 would have increased $12 million over the same period
of 2002 had the value of the Canadian dollar remain unchanged.
The transfer of assets to IBM was part of a seven-year, $200-million
agreement reached with IBM to operate and enhance the railway's
computing infrastructure. The arrangement will reduce CPR's
costs over time and allow remaining information technology
staff to focus on applications that improve efficiency and
service.
CPR presents non-GAAP operating earnings
to provide a basis for evaluating underlying earnings trends
that can be compared with the prior period's results. Non-GAAP
earnings exclude foreign currency translation effects on long-term
debt, which can be volatile and short term, as well as other
specified items, which are not among CPR's normal ongoing
revenues and operating expenses. The impact of volatile, short-term
rate fluctuations is only realized when long-term debt matures
or is settled. A reconciliation of income, excluding foreign
exchange gains and losses on long-term debt and other specified
items, to net income as presented in the financial statements
is detailed in the attached Summary of Rail Data.
Rob Ritchie, President and Chief Executive
Officer, said: "We prepared for a very strong fourth
quarter by increasing capacity. Track maintenance work was
accelerated, new locomotives and freight cars were acquired
and more train crews were hired. Across the CPR network, freight
volumes hit a record high and our bulk commodity exports off
the West Coast reached unprecedented growth rates. CPR set
a record for train lengths and moved significantly more tonnage
per train, generating higher productivity. While we grew our
business by $94 million, or 10 per cent, in the fourth quarter,
most of this growth was reduced by the significant year-over-year
appreciation in the Canadian dollar."
Canadian Pacific Railway, recognized internationally
for its scheduled railway operations, is a transcontinental
carrier operating in Canada and the U.S. Its 14,000-mile rail
network serves the principal centers of Canada, from Montreal
to Vancouver, and the U.S. Northeast and Midwest regions.
CPR feeds directly into America's heartland from the East
and West coasts. Alliances with other carriers extend its
market reach throughout the U.S. and into Mexico.
Note on Forward-Looking Statements
This news release contains forward-looking
information. Actual future results may differ materially.
The risks, uncertainties and other factors that could influence
actual results are described in CPR's annual report and annual
information form, and may be updated in CPR's consolidated
interim financial statements and interim Management's Discussion
and Analysis, which are filed with securities regulators from
time to time. However, CPR undertakes no obligation to update
publicly or otherwise revise any forward-looking information,
whether as a result of new information, future events, or
otherwise. Financial results in this news release are reported
in Canadian dollars.
Canadian Pacific Contacts:
Media:
Len Cocolicchio
Tel: (403) 319-7591
Cell: (403) 650-2748
len cocolicchio@cpr.ca
Investment:
Paul Bell
Vice President, Investor Relations
Tel: (403) 319-3591
investor@cpr.ca
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