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Press release from PR Newswire

Canadian Pacific announces solid fourth-quarter operating performance

Tuesday, January 29, 2013

Canadian Pacific announces solid fourth-quarter operating performance07:30 EST Tuesday, January 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 ended December 31     For the year 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 benefits   378      389      1,506      1,426    Fuel   256      267      999      968    Materials   60      58      238      243    Equipment rents   48      51      206      209    Depreciation and amortization   140      123      539      490    Purchased services and other   242      217      940      874    Asset impairment (Note 2)   265      -      265      -    Labour restructuring (Note 3)   53      -      53      -  Total operating expenses   1,442      1,105      4,746      4,210                            Operating income   60      303      949      967  Less:                         Other income and charges   3      10      37      18    Net interest expense    69      61      276      252                              (Loss) income before income tax expense   (12)     232      636      697                              Income tax (recovery) expense   (27)     11      152      127  Net income $ 15    $ 221    $ 484    $ 570                                                      Earnings per share                         Basic earnings per share $ 0.08    $ 1.31    $ 2.82    $ 3.37    Diluted earnings per share $ 0.08    $ 1.30    $ 2.79    $ 3.34                              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 ended December 31     For the year 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 designated as cash flow hedges   (2)     (1)     9      (7)   Change in defined benefit pension and post-retirement  plans   (211)     (1,000)     (50)     (883)   Other comprehensive loss before income taxes   (214)     (993)     (30)     (890)   Income tax recovery on above items   58    250      -         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 2012      December 31 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 ended December 31   For the year 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 amortization   140      123      539      490        Deferred income taxes   (22)     68      140      187        Pension funding in excess of expense   (17)     (607)     (61)     (647)       Asset impairment (Note 2)   265      -      265      -        Labour restructuring, net (Note 3)   50      -      50      -        Other operating activities, net     (3)     (65)     (84)     (112)       Change in non-cash working capital balances related to  operations    41      99      (5)     24  Cash provided by (used in) operating activities   469      (161)     1,328      512                                  Investing activities                         Additions to properties   (336)     (400)     (1,148)     (1,104)   Proceeds from the sale of properties and other assets   7      30      145      71    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 short-term borrowing   -      28      (27)     28    Other   1      (3)     1      (3) Cash (used in) provided by financing activities   (7)     490      (30)     217                                  Effect of foreign currency fluctuations on U.S. dollar-                       denominated cash and cash equivalents   -      (5)     (1)     1  Cash position                         Increase (decrease) in cash and cash equivalents   126      (50)     286      (314)   Cash and cash equivalents at beginning of period    207      97      47      361  Cash and cash equivalents at end of period $ 333    $ 47    $ 333    $ 47                                  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 shares (in millions)     Share capital   Additional paid-in capital   Accumulated other comprehensive loss   Retained earnings   Total shareholders' equity Balance at January 1, 2012 170.0   $ 1,854 $ 86  $ (2,736) $ 5,445  $ 4,649  Net income  -     -   -    -    484    484  Other comprehensive loss -     -   -    (32)   -    (32) Dividends declared -     -   -    -    (232)   (232) Effect of stock-based compensation expense -     -   25    -    -    25  Shares issued under stock option plans 3.9     273   (70)   -    -    203  Balance at December 31, 2012 173.9   $ 2,127 $ 41  $ (2,768) $ 5,697  $ 5,097                                  Common shares (in millions)     Share capital   Additional paid-in capital   Accumulated other comprehensive loss    Retained earnings   Total shareholders' equity Balance at January 1, 2011 169.2   $ 1,813 $ 24  $ (2,086) $ 5,073  $ 4,824  Net income  -     -   -    -    570    570  Other comprehensive loss -     -   -    (650)   -    (650) Dividends declared -     -   -    -    (198)   (198) Effect of stock-based compensation expense -     -   16    -    -    16  Changes to stock-based compensation awards -     -   57    -    -    57  Shares issued under stock option plans 0.8     41   (11)   -    -    30  Balance at December 31, 2011 170.0   $ 1,854 $ 86  $ (2,736) $ 5,445  $ 4,649                              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 (in millions of Canadian dollars) For the three months ended 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":               (in millions of Canadian dollars) For the three months ended 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 (millions, except per share data)     2012      2011  Fav/(Unfav)      %                                                        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 and benefits     1,506      1,426      (80) (6)   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 and amortization     539      490      (49) (10)   242      217      (25) (12)     Purchased services and other     940      874      (66) (8)   265      -      (265) -      Asset impairment     265      -      (265) -    53      -      (53) -      Labour restructuring     53      -      (53) -    1,442      1,105      (337) (30)   Total operating expenses (OE)     4,746      4,210      (536) (13)                                                                                                   60      303      (243) (80)   Operating income     949      967      (18) (2)                                                                       Less:                                                                         3      10      7  70      Other income and charges     37      18      (19) (106)   69      61      (8) (13)     Net interest expense     276      252      (24) (10)                                                                                                   (12)     232      (244) (105)   (Loss) income before income tax expense     636      697      (61) (9)                                                   (27)     11      38  345      Income tax (recovery) expense     152      127      (25) (20)                                                                                                 $ 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 per share   $ 2.82    $ 3.37    $ (0.55) (16)                                                                                                 $ 0.08    $ 1.30    $ (1.22) (94)     Diluted earnings per share   $ 2.79    $ 3.34    $ (0.55) (16)                                                                                                                       Shares Outstanding                                                                         173.3      169.8      3.5  2      Weighted average number of shares outstanding (millions)     171.8      169.5      2.3  1                                                    174.7      170.8      3.9  2      Weighted average number of diluted shares outstanding (millions)     173.2      170.6      2.6  2                                                                                                                        Foreign Exchange                                                                         1.01      0.98      (0.03) (3)     Average foreign exchange rate (US$/Canadian$)     1.00      1.01      0.01  1                                                    0.99      1.02      (0.03) (3)     Average foreign exchange rate (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    133      133      -    -        - Sulphur and fertilizers     520      549      (29)   (5)   335      288      47    16        - Industrial and consumer products     1,268      1,017      251    25    99      94      5    5        - Automotive     425      338      87    26    46      47      (1)   (2)       - Forest products     193      189      4    2    340      332      8    2        - Intermodal     1,370      1,303      67    5                                                    $ 1,464    $ 1,375    $ 89    6      Total Freight 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    3,838      4,899      (1,061)   (22)       - Sulphur and fertilizers     17,058      20,468      (3,410)   (17)   8,347      6,478      1,869    29        - Industrial and consumer products     30,469      24,122      6,347    26    561      535      26    5        - Automotive     2,482      2,080      402    19    1,129      1,176      (47)   (4)       - Forest 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    3.47      2.71      0.76    28        - Sulphur and fertilizers     3.05      2.68      0.37    14    4.01      4.45      (0.44)   (10)       - Industrial and consumer products     4.16      4.22      (0.06)   (1)   17.65      17.57      0.08    -        - Automotive     17.12      16.25      0.87    5    4.07      4.00      0.07    2        - Forest products     4.10      3.81      0.29    8    5.47      5.51      (0.04)   (1)       - Intermodal     5.51      5.45      0.06    1                                                      4.12      4.03      0.09    2      Total Freight Revenue per 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    43      48      (5)   (10)       - Sulphur and fertilizers     177      199      (22)   (11)   119      114      5    4        - Industrial and consumer products     469      421      48    11    39      39      -    -        - Automotive     162      145      17    12    16      17      (1)   (6)       - Forest products     67      72      (5)   (7)   253      250      3    1        - Intermodal     1,024      997      27    3                                                      680      676      4    1      Total 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    3,093      2,771      322    12        - Sulphur and fertilizers     2,938      2,759      179    6    2,815      2,526      289    11        - Industrial and consumer products     2,704      2,416      288    12    2,538      2,410      128    5        - Automotive     2,623      2,331      292    13    2,875      2,765      110    4        - Forest products     2,881      2,625      256    10    1,344      1,328      16    1        - Intermodal     1,338      1,307      31    2                                                    $ 2,153    $ 2,034    $ 119    6      Total Freight Revenue per 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                                                   66,204    65,472    732    1    Freight gross ton-miles (millions)   254,354    247,955    6,399    3  10,046    10,611    (565)   (5)   Train miles (thousands)   40,270    40,145    125    -  7,014    6,587    427    6    Average train weight - excluding local traffic (tons)   6,709    6,593    116    2  6,132    5,654    478    8    Average train length - excluding local traffic (feet)   5,838    5,665    173    3  24.0    23.4    0.6    3    Average train speed - AAR definition (mph)   24.4    21.3    3.1    15  17.3    17.7    0.4    2    Average terminal dwell - AAR definition (hours)   17.6    19.9    2.3    12  201.7    183.5    18.2    10    Car miles per car day   202.3    160.1    42.2    26                                    197.1    175.1    22.0    13    Locomotive productivity (daily average GTMs/active HP)   179.8    166.7    13.1    8  4.7    4.5    0.2    4    Employee productivity (million GTMs/expense employee)   17.4    17.5    (0.1)   (1)                                    1.14     1.17     0.03     3    Fuel efficiency(2)    1.15     1.18     0.03     3   74.4     76.0     1.6     2    U.S. gallons of locomotive fuel consumed (millions)(3)    289.2     290.8     1.6     1  3.47    3.45    (0.02)   (1)   Average fuel price (U.S. dollars per U.S. gallon)   3.45    3.38    (0.07)   (2)                                    2.18     1.69     (0.49)    (29)   OE per GTM (cents)(4)    1.87     1.70     (0.17)    (10)  1.70     1.72     0.02     1    OE per GTM - Adjusted (cents)(5)    1.72     1.71     (0.01)    (1)                                    16,282     16,616     334     2    Average number of active employees - Total(6)    16,657     16,097     (560)    (3)  14,108     14,459     351     2    Average number of active employees - Expense(6)    14,594     14,169     (425)    (3)  15,671     16,428     757     5    Number of employees at end of period - Total(6)    15,671     16,428     757     5   13,945     14,764     819     6    Number of employees at end of period - Expense(6)    13,945     14,764     819     6                                    42.2    46.7    4.5    10    Average daily active cars on-line (thousands)   40.9    51.4    10.5    20  952    1,085    133    12    Average daily active road locomotives on-line   1,007    1,085    78    7                                                                                      Safety                                                   1.89    1.70    (0.19)   (11)   FRA personal injuries per 200,000 employee-hours   1.46    1.85    0.39    21  1.68    1.40    (0.28)   (20)   FRA train accidents per million 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 PacificFor further information: <p> </p> <p> <b>Contacts:</b> </p> <p> <i>Media </i><br/> Ed Greenberg <br/> Canadian Pacific <br/> Tel.: (612) 849-4717 <br/> 24/7 Media Pager: 855-242-3674<br/> e-mail: <a href="mailto:ed_greenberg@cpr.ca">ed_greenberg@cpr.ca</a>  </p> <p> <i>Investment Community</i><br/> Janet Weiss<br/> Canadian Pacific<br/> Tel.: (403) 319-3233<br/> e-mail:  <a href="mailto:investor@cpr.ca">investor@cpr.ca</a> </p>