CALGARY, AB, July 21, 2020 /PRNewswire/ - The Board of
Directors of Canadian Pacific Railway Limited (TSX: CP) (NYSE: CP)
today declared a quarterly dividend of $0.95 per share on the outstanding Common Shares,
an increase of approximately 15 percent to the previous dividend of
$0.83 per share.
"This dividend increase illustrates the resiliency of our
operating model and our continued dedication to creating value for
our shareholders," said CP President and Chief Executive Officer
Keith Creel. "As part of our
long-term commitment to sustainable, profitable growth, CP has
increased its quarterly dividend in five consecutive years. Over
that period, we've led the industry in dividend growth with a 171
percent increase."
Today's announcement continues the path toward meeting CP's
stated goal of achieving a 25 percent adjusted dividend payout
ratio. Since 2014, CP has paid $2.0
billion in dividends and returned $11.2 billion to shareholders.
"This announcement is reflective of the sustained success of our
CP family and of our operating model," Creel said. "Despite the
current challenges with COVID-19, we remain committed to delivering
for each other, our customers and our shareholders."
The dividend is payable on October 26,
2020 to holders of record at the close of business on
September 25, 2020, and is an
"eligible" dividend for purposes of the Income Tax Act
(Canada) and any similar
provincial/territorial legislation.
Non-GAAP measures
Over the long term, CP targets an
adjusted dividend payout ratio of 25.0 percent to 30.0 percent.
Adjusted dividend payout ratio is calculated as dividends declared
per share divided by adjusted diluted EPS. This ratio is a measure
of shareholder return and provides information on the Company's
ability to declare dividends on an ongoing basis.
Although CP has provided a target Non-GAAP measure (adjusted
dividend payout ratio), management is unable to reconcile, without
unreasonable efforts, the target adjusted dividend payout ratio to
the most comparable GAAP measure (dividend payout ratio), due to
unknown variables and uncertainty related to future results. These
unknown variables may include unpredictable transactions of
significant value. In past years, CP has recognized significant
asset impairment charges, management transition costs related to
senior executives and discrete tax items. These or other similar,
large unforeseen transactions affect diluted EPS but may be
excluded from CP's adjusted diluted EPS. Additionally, the
U.S.-to-Canada dollar exchange
rate (FX) is unpredictable and can have a significant impact on
CP's reported results but may be excluded from CP's adjusted
diluted EPS. In particular, CP excludes the FX impact of
translating the Company's debt and lease liabilities, the impact
from changes in income tax rates and a provision for uncertain tax
item from adjusted diluted EPS. Please see Note on forward-looking
information below for further discussion.
Note on forward-looking information
This news release
contains certain forward-looking information and forward-looking
statements (collectively, "forward-looking information") within the
meaning of applicable securities laws. Forward-looking information
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. This news release contains forward-looking information
relating, but not limited to, statements concerning CP's long-term
target adjusted dividend payout ratio.
The forward-looking information contained in this news release
is based on current expectations, estimates, projections and
assumptions, having regard to CP's experience and its perception of
historical trends, and includes, but is not limited to,
expectations, estimates, projections and assumptions relating to:
North American and global economic growth; commodity demand growth;
sustainable industrial and agricultural production; commodity
prices and interest rates; foreign exchange rates; effective tax
rates; performance of our assets and equipment; sufficiency of our
budgeted capital expenditures in carrying out our business plan;
geopolitical conditions, applicable laws, regulations and
government policies; the availability and cost of labour, services
and infrastructure; the satisfaction by third parties of their
obligations to CP; our ability to realize upon business plans; and
the continued impact of COVID-19 on CP's businesses, operating
results, cash flows and/or financial condition. Although CP
believes the expectations, estimates, projections and assumptions
reflected in the forward-looking information presented herein are
reasonable as of the date hereof, there can be no assurance that
they will prove to be correct. Current conditions, economic and
otherwise, render assumptions, although reasonable when made,
subject to greater uncertainty.
Undue reliance should not be placed on forward-looking
information as actual results may differ materially from those
expressed or implied by forward-looking information. By its nature,
CP's forward-looking information involves inherent risks and
uncertainties that could cause actual results to differ materially
from the forward looking information, including, but not limited
to, the following factors: changes in business strategies; general
North American and global economic, credit and business conditions;
risks associated with 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; geopolitical
instability; changes in laws, regulations and government policies,
including regulation of rates; changes in taxes and tax rates;
potential increases in maintenance and operating costs; changes in
fuel prices; 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; trade restrictions or other changes
to international trade arrangements; climate change; various events
that could disrupt operations, including severe weather, such as
droughts, floods, avalanches and earthquakes, and cybersecurity
attacks, as well as security threats and governmental response to
them, and technological changes; and the pandemic created by the
outbreak of the novel strain of coronavirus (and the disease known
as COVID-19) and resulting effects on economic conditions, the
demand environment for logistics requirements and energy prices,
restrictions imposed by public health authorities or governments,
fiscal and monetary policy responses by governments and financial
institutions, and disruptions to global supply chains. 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 "Risk Factors" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations -
Forward-Looking Statements" in CP's annual and interim reports on
Form 10-K and 10-Q.
The forward-looking information contained in this news release
is made as of the date hereof. Except as required by law, CP
undertakes no obligation to update publicly or otherwise revise any
forward-looking information, or the foregoing assumptions and risks
affecting such forward-looking information, whether as a result of
new information, future events or otherwise.
About Canadian Pacific
Canadian Pacific is a
transcontinental railway in Canada
and the United States with direct
links to major ports on the west and east coasts. CP provides 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 cpr.ca to see
the rail advantages of CP. CP-IR
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SOURCE Canadian Pacific