Railroad expects earnings per share to more than double over next four
years
WHITE PLAINS, NY, Oct. 1, 2014 /CNW/ - Canadian Pacific (TSX/NYSE: CP)
CEO E. Hunter Harrison today unveiled new growth targets out to 2018
and CP's multi-year strategy to drive superior service and financial
profitability, including more than doubling the company's earnings per
share.
"Our transformation over the last two years has been nothing short of
remarkable, but the journey is far from over," Harrison said. "We've
dramatically improved the operating performance of the company; our
operating ratio is approaching industry best and we've generated
significant value for shareholders. Our achievements of the past two
years have set the platform for future growth."
Financial expectations on CP's journey to 2018 include:
-
More than doubling diluted earnings per share (EPS) over the next four
years compared to 2014
-
Growing annual revenue to $10 billion in 2018
-
Generating cumulative cash flow before dividends of $6 billion through
2018
Harrison said CP's new targets and growth strategy are built on the
foundation of performance and discipline that will see the company
achieve its objectives for 2016 a full two years early, including an
operating ratio in the mid-60s and cash flow before dividends of $1
billion.
Moving forward, Harrison outlined how CP will accelerate growth over the
next four years even as it maintains a tight focus on cost containment.
Highlights include investments in key corridors to leverage franchise
strengths, including siding extension and terminal enhancements, and
premium service driven by velocity. Harrison said the company will
continue to drive its operating ratio to industry-leading levels.
"It continues to be an exciting time to be a part of this great
franchise," added Harrison. "It's our talented and dedicated people who
are challenging the status quo each day and are ultimately enabling us
to grow with our customers at a low incremental cost to the franchise."
Key Assumptions
-
Annual capital spending in the range of $1.4 - $1.6 billion over the
period
-
Defined benefit pension expense of $10 million in 2015, assuming a
discount rate of 4.55% on December 31, 2014
-
Defined benefit pension contributions between $50 - $100 million through
2018
-
A tax rate of 27.5%
-
Exchange rate at 1.10 CAD/USD
-
Fuel price of $3.50 USD/US Gallon
Editor's Notes: *to access a video webcast of the presentations on October 1 and 2 go
to: www.cpr.ca/investor-day
**Investor Day full-disclosure PowerPoint presentations by Mr. Harrison
and his Executive Team can be viewed online after 0800 on October 2,
2014.
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 information under the
heading "Key Assumptions" above as well as 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.
SOURCE Canadian Pacific
