CPRail profits

November 17th, 2006

Brothers and Sisters,

Attached please see an article from the Globe and Mail yesterday.

There are a lot of factors involved in making this kind of exorbitant profit, but a lot of the credit should go to the employees who care enough to do an exceptional job. I hope that the CPRail upper management takes a moment to reflect on this, while they are stuffing their own pockets, and give some of that profit back where it should be... the paycheques of their employees.

Fraternally,

William Brehl
President

TCRC MWED
1 – 2775 Lancaster Road
Ottawa ON K1B 4V8
Toll Free (800) 567-0571
Telephone (613) 733-4456
Facsimile (613) 526-5149
wbrehl@tcrcmwed.ca

CP Rail sees profit, revenue rising in 2007

16/11/06

VANCOUVER, British Columbia (Reuters) - Canadian Pacific Railway is predicting earnings growth of between 9 percent and 13 percent next year, saying operating efficiencies should offset questions about coal traffic.

Canada's second largest railway said on Thursday it expects diluted earnings per share for fiscal 2007 to be in the range of C$4.30 to C$4.45. That is up from the high end of its 2006 forecast of C$3.95, but below what some analysts had been looking for.

Analysts surveyed by Reuters Estimates have predicted per share earnings of between C$3.88 and C$4.65 for next year, with an average estimate of C$4.43.

"When you consider the coal price reduction, and the fuel margin headwinds, this is a solid earnings projection for 2007," CP Rail Comptroller Brian Grassby said in the company's annual meeting with analysts.

CP's contract with its largest coal customer ties its hauling rates to world coal prices, which are expected to be lower next year. CP does not expect that will hit earnings projections unless there is a significant drop in volumes.

The railway sees total revenue growing by 4 percent to 6 percent in 2007, based on volume growth and higher prices for its services. Total operating costs are expected to increase by 3 percent to 5 percent.

CP's shares closed up C$1.17 at C$63.87 in Toronto on Thursday, nearing the 52-week high of C$65.17 set back in April. It's 52-week low is C$45.55, set in January.

CP has overhauled much of its operating system in the past 18 months, including increased use of scheduled trains, and predicted that will produce additional savings of between C$30 million and C$35 million next year.

The company said capital investment is expected to be in the range of C$885 million to C$895 million in 2007, an increase from anticipated capital spending of C$840 million to C$845 million in 2006.

Among the track projects planned by the railway are siding expansions on its Delaware & Hudson line from Montreal to Albany, New York, and in Saskatchewan where it expects to see increased potash traffic.

($1=$1.14 Canadian)

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