1 January 2005
Canadian Pacific Year
End Message
As we close out 2004, I would
like to thank all employees of CPR for their contribution in addressing a challenging and fascinating
year for CPR.
The massive increases in customer demand, January cold snaps and the February avalanche together set
up a very difficult Q1. The disappointment and frustration we all felt brought out our best qualities
as resiliance, innovation, and determination soon took over.
During the course of the next three quarters CPR employees took their company to new heights, setting
new records for volumes of goods transported and, perhaps of greatest importance, delivering a very
fluid railway. This was very evident during November and December 2004, when all other Class 1
railways in North America ran at a slower average train speed than the same period in 2003, CPR
employees led the industry by running over 7% faster while moving increased volumes. This is truly a
remarkable accomplishment and much of this effort is a result of the commitment by all operating teams
to our Integrated Operating Plan (IOP).
Our success goes much deeper.
Over the course of 2004 we undertook some significant change efforts:
- TYES, our new yards system was rolled out across most of our Canadian network through the
combined efforts of Operations and IS teams. We learned as we went, overcoming obstacles and
delivering a new tool to operate our railway better. Quebec, the USNE and SOO territories will be
rolled out in Q1 2005;
- The "bill of lading to cash team" undertook a monster of a task to simplify this
stream of work across many disciplines and departments;
- The Intermodal team centralized dispatch into Toronto (COG) in anticipation of next years roll
out of TRIEX, a new system for all aspects of Intermodal;
- A solution to a long struggling D&H line was found after considerable effort. We are on
track to providing solid economic improvement for CPR, a more stable working environment for our
D&H employee team and strategically, the shortest and fastest route between Detroit and
Chicago;
- After many years of rate declines the M&S team successfully delivered on major rate
increases reflecting a very focused effort and their leveraging the value that shippers are now
placing on CPR's services. We will continue on this path going forward;
- The senior leadership team undertook a very significant government advocacy campaign at all
levels of government to position CPR as the engine of economic growth for in the territory we operate
and to seek a stable regulatory climate which will encourage CPR to invest in network expansion. While
our work is not complete, policy makers and politicians are listening seriously to us for the first
time in decades;
- You delivered a substantial improvement in personal injury ratio. Sadly, this accomplishment is
overshadowed by the loss of three of our fellow employees in work related incidents. Our thoughts and
sympathies go out to all those affected by the loss of our team mates: David Rutherford,
Edmonton, AB; Christopher Lewis, Toronto, ON; Gary Kinakin, Revelstoke, BC.
The list of accomplishments is long and the list of those who helped deliver this success includes
more than 16,000 people. Each of you assisted in your own way. Thank you.
Our goal of becoming North America's most fluid railway is becoming very reachable through the
combined efforts of all of us. 2005 arrives with your railway running very well following the move of
our IT servers and mainframe and a great start up after Christmas Day; more than 600 new railroaders
trained, ready and very much welcomed into our company; 75 new AC locomotives on the property; the
commodity and transportation markets strong, and CPR's leadership working diligently to position our
company to expand for the first time in 25 years.
For those of you who own CPR shares the markets seem to appreciate both your accomplishments and CPR's
prospects with share price over $41(Cdn) and $34(US).
On behalf of my associates on the Executive Committee, please accept my thanks for a job well done in
2004. We wish you a safe and happy new year and with continued focus in 2005 we look forward to
celebrating our success together as we become North America's most fluid railway - and all the rewards
that it will bring with it!
Fred Green - Executive Vice-President and Chief Operating Officer
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