Canadian Pacific Kansas City Ltd 8-K, filed Mar 17, 2022
Canadian Pacific Kansas City Ltd (CP)
About this 8-K
Canadian Pacific Kansas City Ltd filed this 8-K on March 17, 2022, reporting on events of March 16, 2022.
Items reported
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
March 17, 2022 (
Date of Report (Date of earliest event reported)
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
(
Registrant’s telephone number, including area code
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
| Common Shares, without par value, of Canadian Pacific Railway Limited | CP | Toronto Stock Exchange | ||
| Perpetual 4% Consolidated Debenture Stock of Canadian Pacific Railway Company | BC87 | London Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| ITEM 8.01. | Other Events. |
On March 16, 2022, Canadian Pacific Railway Limited (the “Corporation”) issued a press release committing to clarifying train traffic data submitted to the Surface Transportation Board as part of the regulatory review of the Canadian Pacific-Kansas City Southern transaction. A copy of this press release is attached as Exhibit 99.1.
On March 16, 2022, the Corporation issued a press release announcing that the Corporation provided 72-hour notice to lock-out Teamsters Canada Rail Conference-Train & Engine employees. A copy of this press release is attached as Exhibit 99.2.
| ITEM 9.01. | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit No. |
Exhibit Description | |
| Exhibit 99.1 | Press Release dated March 16, 2022. | |
| Exhibit 99.2 | Press Release dated March 16, 2022. | |
| Exhibit 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
FORWARD LOOKING STATEMENTS AND INFORMATION
This communication contains certain forward looking statements and forward looking information (collectively, “FLI”) relating to the Surface Transportation Board’s regulatory review of the Canadian Pacific-Kansas City Southern transaction, collective bargaining between Canadian Pacific and its labour unions, and potential work stoppages. FLI is typically identified by words such as “anticipate”, “expect”, “project”, “estimate”, “forecast”, “plan”, “intend”, “will”, “target”, “believe”, “likely” and similar words suggesting future outcomes or statements regarding an outlook. All statements other than statements of historical fact may be FLI.
Although we believe that the FLI is reasonable based on the information available today and processes used to prepare it, such statements are not guarantees of future performance and you are cautioned against placing undue reliance on FLI. By its nature, FLI involves a variety of assumptions, which are based upon factors that may be difficult to predict and that may involve known and unknown risks and uncertainties and other factors which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by these FLI, including, but not limited to, the following: the realization of anticipated benefits and synergies of the CP-KCS transaction and the timing thereof; the success of integration plans; the focus of management time and attention on the CP-KCS transaction and other disruptions arising from the CP-KCS transaction; changes in business strategy and strategic opportunities; estimated future dividends; financial strength and flexibility; debt and equity market conditions, including the ability to access capital markets on favourable terms or at all; cost of debt and equity capital; the ability of management of CP, its subsidiaries and affiliates to execute key priorities, including those in connection with the CP-KCS transaction; general Canadian, U.S., Mexican and global social, economic, political, 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, including competition from other rail carriers, trucking companies and maritime shippers in Canada, the U.S. and Mexico; North American and global economic growth; industry capacity; shifts in market demand; changes in commodity prices and commodity demand; uncertainty surrounding timing and volumes of commodities being shipped; 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; disruption in fuel supplies; uncertainties of investigations, proceedings or other types of claims and litigation; compliance with environmental regulations; labour disputes; changes in labour costs and labour difficulties; risks and liabilities arising from derailments; transportation of dangerous goods; timing of completion of capital and maintenance projects; sufficiency of budgeted capital expenditures in carrying out business plans; services and infrastructure; the satisfaction by third parties of their obligations; currency and interest rate fluctuations; exchange rates; 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; the effects of current and future multinational trade agreements on the level of trade among Canada, the U.S. and Mexico; climate change and the market and regulatory responses to climate change; ability to achieve commitments and aspirations relating to reducing greenhouse gas emissions and other climate-related objectives; anticipated in-service dates;
success of hedging activities; operational performance and reliability; customer, regulatory and other stakeholder approvals and support; regulatory and legislative decisions and actions; the adverse impact of any termination or revocation by the Mexican government of Kansas City Southern de Mexico, S.A. de C.V.’s Concession; public opinion; various events that could disrupt operations, including severe weather events, such as droughts, floods, avalanches and earthquakes, and cybersecurity attacks, as well as security threats and governmental response to them, and technological changes; acts of terrorism, war or other acts of violence or crime or risk of such activities; insurance coverage limitations; material adverse changes in economic and industry conditions, including the availability of short and long-term financing; and the pandemic created by the outbreak of COVID-19 and its variants, 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.
We caution that the foregoing list of factors is not exhaustive and is made as of the date hereof. 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. Due to the interdependencies and correlation of these factors, as well as other factors, the impact of any one assumption, risk or uncertainty on FLI cannot be determined with certainty.
Except to the extent required by law, we assume no obligation to publicly update or revise any FLI, whether as a result of new information, future events or otherwise. All FLI in this communication is expressly qualified in its entirety by these cautionary statements.
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
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: March 17, 2022 | ||||||
| CANADIAN PACIFIC RAILWAY LIMITED | ||||||
| By: |
/s/ Nizam Hasham | |||||
| Name: | Nizam Hasham | |||||
| Title: | Assistant Corporate Secretary | |||||
Exhibit 99.1
CP commits to clarifying train traffic data submitted as part of regulatory review of the CP-KCS combination
CALGARY – March 16, 2022 – Canadian Pacific Railway Limited (TSX: CP, NYSE: CP) (“CP”) today made the following statement in response to the Surface Transportation Board’s (the “STB”) decision on Wednesday asking Applicants to “address an apparent inconsistency in certain data submitted” to the STB.
CP welcomes and expects a comprehensive regulatory and environmental review of our application and shares the STB’s desire for accurate, consistent information across all aspects of that review. As called for by the decision, CP will submit to the STB by March 21 a full explanation of the data submitted with its Application and shared with the Board’s Office of Environmental Analysis in connection with its review of the Application. We look forward to the STB restarting the procedural schedule for its review of the proposed CP-KCS transaction following its review of the explanation Applicants will provide.
Forward-Looking Statements and Information
This news release includes certain forward looking statements and forward looking information (collectively, “FLI”) relating to the STB’s regulatory review of the CP-KCS combination. FLI is typically identified by words such as “anticipate”, “expect”, “project”, “estimate”, “forecast”, “plan”, “intend”, “target”, “believe”, “likely” and similar words suggesting future outcomes or statements regarding an outlook. All statements other than statements of historical fact may be FLI.
Although we believe that the FLI is reasonable based on the information available today and processes used to prepare it, such statements are not guarantees of future performance and you are cautioned against placing undue reliance on FLI. By its nature, FLI involves a variety of assumptions, which are based upon factors that may be difficult to predict and that may involve known and unknown risks and uncertainties and other factors which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by these FLI, including, but not limited to, the scope and timing of regulatory review.
We caution that the foregoing list of factors is not exhaustive and is made as of the date hereof. Additional information about these and other assumptions, risks and uncertainties can be found in reports and filings by CP with Canadian and U.S. securities regulators. 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. Due to the interdependencies and correlation of these factors, as well as other factors, the impact of any one assumption, risk or uncertainty on FLI cannot be determined with certainty.
Except to the extent required by law, we assume no obligation to publicly update or revise any FLI, whether as a result of new information, future events or otherwise. All FLI in this news release is expressly qualified in its entirety by these cautionary statements.
About Canadian Pacific
Canadian Pacific (TSX: CP) (NYSE: CP) 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 www.cpr.ca to see the rail advantages of CP. CP-IR
Contacts:
Media
Alert_MediaRelations@cpr.ca
Investment Community
Maeghan Albiston
Tel: 403-319-3591
investor@cpr.ca
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Exhibit 99.2
Release: March 16, 2022
CP issues 72-hour notice to lock-out TCRC-Train & Engine employees
Calgary – Canadian Pacific Railway Limited (TSX: CP) (NYSE: CP) has issued 72-hour notice to the Teamsters Canada Rail Conference (TCRC)-Train & Engine of its plan to lock-out employees at 00:01 ET on March 20, 2022 if the union leadership and the company are unable to come to a negotiated settlement or agree to binding arbitration.
“For the sake of our employees, our customers, the supply chain we serve and the Canadian economy that is trying to recover from multiple disruptions, we simply cannot prolong for weeks or months the uncertainty associated with a potential labor disruption,” said Keith Creel, CP President and CEO. “The world has never needed Canada’s resources and an efficient transportation system to deliver them more than it does today. Delaying resolution would only make things worse. We take this action with a view to bringing this uncertainty to an end.”
We have been negotiating in good faith since September and over the past week, Canadian Pacific (CP) and the TCRC leadership have been meeting daily with federal mediators to reach a new negotiated collective agreement in hopes of avoiding a labor disruption. Despite those talks, our positions remain far apart.
Yesterday, CP tabled an offer that addressed a total of 26 outstanding issues between the parties, including an offer to resolve the TCRC’s key issues of wages, benefits and pensions through final and binding arbitration.
Today, the TCRC leadership rejected CP’s offer and, contrary to public statements by TCRC spokesman Dave Fulton that wages, benefits and pensions were the key issues, the union continues to table additional work rule demands. In rejecting our offer, the TCRC’s proposal included an even more onerous pension demand. The TCRC’s latest position would, if accepted, be even more destabilizing to the pension plan for all of CP’s unionized employees, not just the 10 percent who are TCRC members.
For nearly a decade, CP has invited the TCRC to enroll its members in a sustainable pension-sharing program, which has benefited thousands of members of CP’s other Canadian unions. The TCRC has consistently rejected this opportunity, and has done so again today. In fact, the union leadership has taken the successful pension-sharing program off the table seeking to negotiate all pension changes through collective bargaining – an unfair demand that jeopardizes the long-term health of a pension plan that 30,000 other employees and pensioners rely on.
“We are deeply disappointed that we find ourselves in this position,” said Creel. “CP will continue to bargain in good faith with the TCRC leadership to achieve a negotiated settlement or enter binding arbitration. The Canadian economy could avoid all the pain and damage of a work stoppage if the TCRC would agree to binding arbitration, an outcome we continue to push for.”
CP has commenced its work stoppage contingency plan and will work closely with customers to achieve a smooth, efficient and safe wind-down of Canadian operations.
TCRC represents approximately 3,000 locomotive engineers, conductors, train and yard workers across Canada. In 2021, a CP TCRC locomotive engineer earned on average $135,442 and the top earner made $209,773. Meanwhile, in 2021, a TCRC conductor, trainperson or yardperson earned on average $107,872 and the top earner made $182,888. These annual earnings far exceed the 2021 Canadian average earnings of $65,138.1 Since 2007, the TCRC members have enjoyed a wage increase of 43 percent, which exceeds the compounded inflation rate by nearly 20 percent.
CP has launched a fact-based information hub with materials about negotiating history and the issues and consequences of a work stoppage. Visit cpr.ca/TCRC2022 to learn more.
Forward looking information
This news release contains certain forward-looking information within the meaning of applicable securities laws relating, but not limited to, collective bargaining between CP and its labour unions, potential work stoppage and CP’s business, operations and service. 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.
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 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 “Item 1A—Risk Factors” and “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Forward-Looking Information” in CP’s annual and interim reports on Form 10-K and 10-Q. 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.
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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
Contacts:
Media
Alert_MediaRelations@cpr.ca
Investment Community
Maeghan Albiston
403-319-3591
investor@cpr.ca
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