26 April 2012

Canadian Pacific Comments on Brendan Wood Incomplete Shareholder Survey

Calgary Alberta - Canadian Pacific Railway Limited today issued the following statement in response to an incomplete and misleading shareholder survey published by Brendan Wood:
 
"CP questions the validity of the findings of the incomplete shareholder survey released today by Brendan Wood.
 
We believe that this survey, and its potentially skewed results, does not portray a fair representation of the views of CP's shareholder base.
 
Importantly, by Brendan Wood's own admission, "These data do not yet include the response to your 1st Quarter earnings announcement." 1
 
For the first quarter of 2012, CP delivered earnings per share of $0.82, an increase of $0.62, or 310 percent, from the same period in 2011. In spite of seasonality which makes Q1 the most difficult operating quarter, the Company broke records, saw an increase in revenues of $213 million, and improved operating ratio by 1,050 bps during the quarter.
 
CP notes that the only vote that counts is at the 17 May 2012 annual meeting of shareholders."
 
CP also noted that the Company's strong earnings, which were disclosed after the completion of the Brendan Wood shareholder survey, were well-received by financial analysts 2
 
"As the company has highlighted previously, the Q1 operating metrics showed impressive improvements over both last year and over the more normalized 2010. Indeed, car miles per day and terminal dwell were both Q1 records." (Cameron Doerksen of National Bank, 20 Apr 2012)
 
"By almost all measures, CP reported an impressive quarter as network, business development, and cost management efforts produced strong top and bottom line results." (Peter Nesvold of Jefferies, 23 Apr 2012)
 
"We believe CP will produce materially improved results in 2012 and beyond, assuming success of the company's OR improvement efforts and normal operating conditions. We believe the potential for material upside surprises is large through the operating improvement period. Accordingly, we recommend BUYing CP for very strong EPS growth in the next 3-5 years and the potential for upside surprises along the way." (David Tyerman of Canaccord Genuity, 23 Apr 2012)
 
"Our analysis of CP Rail's operating metrics shows a degree of improvement that cannot be explained by a mild winter alone. Fluidity has been fully restored and to the extent that execution remains on track, ongoing investments in network infrastructure should enable growth at low incremental costs in coming quarters." (Fadi Chamoun of BMO Capital Markets, 23 Apr 2012)
 
1 Email from Brendan Wood to Canadian Pacific, dated 20 Apr 2012.
 
2 Permission to use quotes neither sought nor obtained. (The views expressed and numbers cited by independent financial analysts are their own and are not necessarily endorsed by CP. The inclusion of such information in this release should not be viewed as indicating that CP has agreed with the contents and conclusions of any such analysts.)