Good stuff!
I follow those quarterly reports from the railroads also, and Schlimm is absolutely right, there is "Schlimm pickins" (All in good fun!) over at NS compared to CP, plus lower than several other roads in addition to CP.
CSX just reported on 01/12/16 that their full year 2015 Operating Margin was 30.3% and their Profit Margin was 16.66% ($1.968 billion Net Income on $11.811 billion revenue). CSX has been lagging in those categories also along with NS. It will be interesting to see what the full 2015 data shows for NS and CP.
Of course, CN has been the "rock star" over the past several years, regularly converting 25% or more of revenue into Net Income.
Interestingly, CP has not been the only one gaining on CN in terms of percent of revenue turned in to Net Income.
UP is also gaining on CN, having a Profit Margin of 19.98% in 2013 and 21.59% in 2014.
We'll know the 2015 numbers for all other Class 1 railroads in the next two weeks.
CP and UP announce 2015 numbers on 01/21/16.
KCS announces 2015 numbers on 01/22/16.
CN announces 2015 numbers on 01/26/16.
BNSF being privately held does not do the same type of release as the others, but usually in late January or early February puts out a financial summary along with the 10-Q filing (they had an Operating Margin of 37.3% in 2015 Quarter 3 and 34.7% for 2015 Year To Date).
And Norfolk Southern just posted yesterday that they will release Fourth Quarter and Full Year 2015 numbers on 01/27/16.
By way of full disclosure, I have no financial interest in any railroad, other than in an S&P 500 fund. I also have disliked EHH since his IC days, and more recently here, when he was admired by many posters.
30 years ago, in 1985, the NSC had an operating margin of 18.9%
C&NW, CA&E, MILW, CGW and IC fan
schlimm oltmannd schlimm oltmannd oltmannd wrote the following post 1 hours ago: schlimm #1 The CP did not call Mr. Fritz a hypocrite. It simply showed how previous statements made by Mr. Fritz were at variance with what he says about CP-NS. Sounds like a PC way of saying "hypocrite" to me! So if someone makes a factually accurate statement (with quotations) that you don't like, it is dismissed as PC? Irresponsible nonsense, Don! If someone says, "That guy often says things that just aren't very true." wouldn't it be fair to paraphase as "That guy is a liar."? Your roots are showing! Not analogous to the CP comment on Fritz at all. Here are some of the sort of comparative metrics business people and investors look at in an evaluation of any enterprise. The differences tell the story. for CP (through Sep 30): Profitability Profit Margin (ttm): 21.87% Operating Margin (ttm): 38.64% Management Effectiveness Return on Assets (ttm): 9.19% Return on Equity (ttm): 26.78% for NS(through Sep 30): Profitability Profit Margin (ttm): 15.71% Operating Margin (ttm): 29.24% Management Effectiveness Return on Assets (ttm): 5.95% Return on Equity (ttm): 13.89%
oltmannd schlimm oltmannd oltmannd wrote the following post 1 hours ago: schlimm #1 The CP did not call Mr. Fritz a hypocrite. It simply showed how previous statements made by Mr. Fritz were at variance with what he says about CP-NS. Sounds like a PC way of saying "hypocrite" to me! So if someone makes a factually accurate statement (with quotations) that you don't like, it is dismissed as PC? Irresponsible nonsense, Don! If someone says, "That guy often says things that just aren't very true." wouldn't it be fair to paraphase as "That guy is a liar."?
schlimm oltmannd oltmannd wrote the following post 1 hours ago: schlimm #1 The CP did not call Mr. Fritz a hypocrite. It simply showed how previous statements made by Mr. Fritz were at variance with what he says about CP-NS. Sounds like a PC way of saying "hypocrite" to me! So if someone makes a factually accurate statement (with quotations) that you don't like, it is dismissed as PC? Irresponsible nonsense, Don!
oltmannd oltmannd wrote the following post 1 hours ago: schlimm #1 The CP did not call Mr. Fritz a hypocrite. It simply showed how previous statements made by Mr. Fritz were at variance with what he says about CP-NS. Sounds like a PC way of saying "hypocrite" to me!
So if someone makes a factually accurate statement (with quotations) that you don't like, it is dismissed as PC? Irresponsible nonsense, Don!
If someone says, "That guy often says things that just aren't very true." wouldn't it be fair to paraphase as "That guy is a liar."?
Your roots are showing! Not analogous to the CP comment on Fritz at all.
Here are some of the sort of comparative metrics business people and investors look at in an evaluation of any enterprise. The differences tell the story.
for CP (through Sep 30):
for NS(through Sep 30):
Yes. 2015 was tough year for NS.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
Canadian Pacific (TSX: CP) (NYSE: CP) said today that it has submitted a letter to the U.S. Department of Justice, asking it to review recent actions by a number of major U.S. railroads who have stated publicly that they are organizing a collective campaign to block significant mergers in the railroad industry, including CP's proposed offer for Norfolk Southern Corp. (NS).
http://www.cpr.ca/en/investors/cp-asks-doj-to-review-recent-meetings
So CP is happy to complain to the DOJ but they refuse to seek a declatory letter from the STB. I think they just confirmed they have no political resources to pull from and must resort to making outlandish criminal accusations. This will have zero effect on the process and the proposal will still fail if it ever reaches the STB.
Victrola1 ...it has submitted a letter to the U.S. Department of Justice,
MOM! They aren't playing fair! I'm supposed to win!
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
H'mm wasn't U.P. and B.N.S.F the last two big mergers?Maybe EHH can get them to grant him open access to thier cash cows,one should be careful for what they wish for,never know when you may open some skeletons in your own family tree.Example make BNSF clean up thier soil contaminations in Montana that were supposed to be addressed at the 1970 merger also the rip off of the farmers of Montana with thier gouging freight rates for moving grain west.Its getting interesting,love it to see the big boys say "they can't do that",but its ok if i do.UP + WP,SP,CNW,RioGrande,and BN and Santa fe.Please tell me how those mergers made any sense as far as competition than the CP + NSC does not.I have no idea,i am just asking and looking for the facts like Sgt Joe Friday.
tree68 Victrola1 ...it has submitted a letter to the U.S. Department of Justice, MOM! They aren't playing fair! I'm supposed to win!
I really don't get what CP is doing. You'd think before they set sail on this venture, that they's have lined up their alllies. Some shippers who would like their version of reciprocal switching. Some politicians who's folk might be "winners" in the transaction. Some considered positive opinions about STB outcomes. And, at least a feel for what their peers might and might not do.
It's turning out they have exactly zero except for their sales pitch - and it's wonderfully devoid of actionable detail.
Are they serious?
billiebuffalo I have no idea,
I have no idea,
You said it all!
Never too old to have a happy childhood!
I think they are trying to intimidate the others by saying they are conspiring to suppress competition which if true would be illeagal. I think it's a bullies response to opposition.
oltmannd tree68 Victrola1 ...it has submitted a letter to the U.S. Department of Justice, MOM! They aren't playing fair! I'm supposed to win! I really don't get what CP is doing. You'd think before they set sail on this venture, that they's have lined up their alllies. Some shippers who would like their version of reciprocal switching. Some politicians who's folk might be "winners" in the transaction. Some considered positive opinions about STB outcomes. And, at least a feel for what their peers might and might not do. It's turning out they have exactly zero except for their sales pitch - and it's wonderfully devoid of actionable detail. Are they serious?
Good points Oltmannd, perhaps before they set sail on this venture they weren't expecting such strong headwinds. But I tend to agree, they should have lined up their allies in this and made some friends in the backrooms of Washington who would come out in support of such a merger. Maybe they purposely didn't, hoping that allies would materialize on their own with the public announcement.
Electroliner 1935 I think they are trying to intimidate the others by saying they are conspiring to suppress competition which if true would be illeagal. I think it's a bullies response to opposition.
Its starting to sound like the political primary season.
I apologise in advance if this has already been brought up or discussed, but reading through 12 pages of posts to check is not something I have the time to do!
My curiosity is that if NS and CP do end up merging before 2020, how will this affect the 5 year loan of the N&W Y6a #2156? No. 2156 is loaned to NS; and if the merger goes through and NS ceases to exist in a legal sense, where will this leave the locomotive, being loaned to a no-longer existing corporation?
Could such a situation prevent the locomotive from returning to St. Louis, the situation being a legal knot? We all saw what happened to the DL&W #952, victim of a legal technicality that made the court system side with keeping her in St. Louis.
Victrola1 January 19, 2016 Calgary, AB Canadian Pacific (TSX: CP) (NYSE: CP) said today that it has submitted a letter to the U.S. Department of Justice, asking it to review recent actions by a number of major U.S. railroads who have stated publicly that they are organizing a collective campaign to block significant mergers in the railroad industry, including CP's proposed offer for Norfolk Southern Corp. (NS). http://www.cpr.ca/en/investors/cp-asks-doj-to-review-recent-meetings
This kind of activity is very common in our political system. The reason it is not illegal is because it is "petitioning" activity protected by the 1st amendment. Ironically, one of the Supreme Court cases that definitively established this principle was a railroad case (Eastern Railroad Presidents vs Noerr Motors, 364 US 122 (1965), involving various forms of joint action taken by major railroads to secure government action adverse to motor carrier interests. It's available online at: https://supreme.justia.com/cases/federal/us/365/127/case.html
The only significant exception to this principle is where competitors are using joint government petitioning action as a sham. An example would be where a group of competitors keeps bringing baseless legal actions against a competitor in the hopes that the legal costs will cause the competitor to back down or go away. That's clearly not what's happening here. Whatever one may think of CP's merger proposal, it certainly raises legitimate public policy issues.
Or is that exactly what's happening? Is CP hoping to raise the "legal costs" for the other railroads?
If you can't beatem, SUE EM!
Modeling the Cleveland and Pittsburgh during the PennCentral era starting on the Cleveland lakefront and ending in Mingo junction
ruderunner Or is that exactly what's happening? Is CP hoping to raise the "legal costs" for the other railroads? If you can't beatem, SUE EM!
I doubt that N$'s legal re$ource$ can be exhausted by CP.
And now an analyst that thinks the CP-NS deal is not likely is suggesting that JB Hunt may soon be purchased by BNSF or NS:
http://seekingalpha.com/article/3819256-jb-hunt-deal-bnsf-norfolk-southern-play
S. Connor I apologise in advance if this has already been brought up or discussed, but reading through 12 pages of posts to check is not something I have the time to do! My curiosity is that if NS and CP do end up merging before 2020, how will this affect the 5 year loan of the N&W Y6a #2156? No. 2156 is loaned to NS; and if the merger goes through and NS ceases to exist in a legal sense, where will this leave the locomotive, being loaned to a no-longer existing corporation? Could such a situation prevent the locomotive from returning to St. Louis, the situation being a legal knot? We all saw what happened to the DL&W #952, victim of a legal technicality that made the court system side with keeping her in St. Louis.
I'm also not familiar with the DK&W 952 incident you mention. I suspect, however, that it didn't involve the issue of whether a merged company is responsible for the obligations of the prior companies.
Falcon48 S. Connor I apologise in advance if this has already been brought up or discussed, but reading through 12 pages of posts to check is not something I have the time to do! My curiosity is that if NS and CP do end up merging before 2020, how will this affect the 5 year loan of the N&W Y6a #2156? No. 2156 is loaned to NS; and if the merger goes through and NS ceases to exist in a legal sense, where will this leave the locomotive, being loaned to a no-longer existing corporation? Could such a situation prevent the locomotive from returning to St. Louis, the situation being a legal knot? We all saw what happened to the DL&W #952, victim of a legal technicality that made the court system side with keeping her in St. Louis. I'm not familiar with the agreement covering the 2156. However, as a general matter, when two corporations merge, the merged company assumes the responsibilities of the prior companies. In other words, a merged CP-NS would succeed to the rights and obligations of the NS agreement. Of course, the underlying agreement covering the 2156 may provide something different, but there's no apparent reason why it would. I'm also not familiar with the DK&W 952 incident you mention. I suspect, however, that it didn't involve the issue of whether a merged company is responsible for the obligations of the prior companies.
I'm not familiar with the agreement covering the 2156. However, as a general matter, when two corporations merge, the merged company assumes the responsibilities of the prior companies. In other words, a merged CP-NS would succeed to the rights and obligations of the NS agreement. Of course, the underlying agreement covering the 2156 may provide something different, but there's no apparent reason why it would.
A 'new' company does not feel any incumbent responsibility to honor agreements made by a predecessor company, if it does not meet what the new company wants to do. No lawyer worth his salt will admit that they can't break any agreement any time they want it broken without repercussions - thats shyster 101.
What CP would WANT TO DO, is the big question.
BaltACD Falcon48 A 'new' company does not feel any incumbent responsibility to honor agreements made by a predecessor company, if it does not meet what the new company wants to do. No lawyer worth his salt will admit that they can't break any agreement any time they want it broken without repercussions - thats shyster 101. What CP would WANT TO DO, is the big question.
Falcon48
With respect to the NS agreement, the agreement probably specifically provides what happens when it terminates, including provisions on return of the locomotive. It also probably allows NS to cancel the agreement on fairly short notice. If so, a merged company would, of course, have the same rights and obligations.
EHH would almost certainly return 2156 to it's owner if the contract allows; if not he would just let it sit in the engine house as he has the CP2816. Hunter has not use for steam.
2156 will go back and 611 will go cold with no place to run if CP takes over.
Count on it.
The only way they move 2156 back on its own wheels is if they are legally obligated to do so.
Otherwise, it may be Schnabel car time - CSX would not move 1309 on its own wheels over its system. CP with its aversion to steam would probably require someting similar to return the 2156 to St. Louis.
One important thing to remember is that both UP and BNSF are more hospitable to steam, and if the balloon goes up on the final merger consolidation round, those two entities will end up owning most, but not all, of the track east of the Mississippi.
We all know that if a sale of a company is on, there is nothing preventing a competing offer. We all know if the offer is more lucrative, the board of the selling company will take the bigger offer. We all know who has the most cash and financing firepower to bring to the battle.
If the CP proxy battle is won and CP is successful in installing a board majority at NS that is willing to sell the company, BNSF has already indicated that they will step in at that point. BNSF has indicated that they are not afraid of mergers and that (paraphrasing) merger is a great opportunity, but they don't think the time is right. But they will step in if their hand is forced, per their own words.
When BNSF steps in, UP will be forced to step in from an economic competitiveness standpoint.
Berkshire Hathway has $66 billion cash on hand. A move by BNSF will likely be "self-financed" within the Berkshire Hathway umbrella.
That is massive financial firepower that can be brought to the battle.
And UP, while not having as large of a trove of cash behind them clearly can support much more financing for a purchase than CP.
CP will not outbid BNSF or UP if either one decides they have to step in and buy NS.
CP will end up being the "increased competition" provider in the end game, much as BNSF was given trackage rights Denver-Stockton and Bieber-Stockton to provide competition to the UP on those routes as part of the UP-SP combination.
CP will end up getting access to the Gulf of Mexico for their export grain trains, access to Atlanta for their container trains coming from Vancouver, the right to run their CBR trains from North Dakota to the Philly/NJ/NY northeast, container trains to the Northeast, etc. They might even end up owning some track. But the lion's share of NS will end up annexed to one of the two big western roads if the proxy battle does go forward.
Canadian Pacific's latest white paper outlines how CP's proposed combination with Norfolk Southern Corp. (NS) will alleviate congestion in the key rail hub of Chicago.
By diverting hand-offs between railways to underutilized hubs outside the city and reducing processing in yards within the city, there is a real opportunity to make a meaningful contribution to address the congestion in Chicago while significantly improving service for diverted traffic. The result is a stronger and more resilient rail network better able to avoid and recover from future service disruptions.
http://www.cpr.ca/en/investors-site/Documents/chicago-white-paper.pdf
Today's news from the front in the white paper war.
Ulrich oltmannd tree68 Victrola1 ...it has submitted a letter to the U.S. Department of Justice, MOM! They aren't playing fair! I'm supposed to win! I really don't get what CP is doing. You'd think before they set sail on this venture, that they's have lined up their alllies. Some shippers who would like their version of reciprocal switching. Some politicians who's folk might be "winners" in the transaction. Some considered positive opinions about STB outcomes. And, at least a feel for what their peers might and might not do. It's turning out they have exactly zero except for their sales pitch - and it's wonderfully devoid of actionable detail. Are they serious? Good points Oltmannd, perhaps before they set sail on this venture they weren't expecting such strong headwinds. But I tend to agree, they should have lined up their allies in this and made some friends in the backrooms of Washington who would come out in support of such a merger. Maybe they purposely didn't, hoping that allies would materialize on their own with the public announcement.
...and what have they been busy doing? Writing white papers! Yet another one...
http://www.cpr.ca/en/investors/cp-ns-combination-will-ease-congestion-in-key-chicago-rail-hub
with only a tiny bit more meat on it. (I like the part where they say they can't figure out the interline merger benefits because they don't have access to NS's data. That made me laugh!)
oltmannd Ulrich oltmannd tree68 Victrola1 MOM! They aren't playing fair! I'm supposed to win! I really don't get what CP is doing. You'd think before they set sail on this venture, that they's have lined up their alllies. Some shippers who would like their version of reciprocal switching. Some politicians who's folk might be "winners" in the transaction. Some considered positive opinions about STB outcomes. And, at least a feel for what their peers might and might not do. It's turning out they have exactly zero except for their sales pitch - and it's wonderfully devoid of actionable detail. Are they serious? Good points Oltmannd, perhaps before they set sail on this venture they weren't expecting such strong headwinds. But I tend to agree, they should have lined up their allies in this and made some friends in the backrooms of Washington who would come out in support of such a merger. Maybe they purposely didn't, hoping that allies would materialize on their own with the public announcement. ...and what have they been busy doing? Writing white papers! Yet another one... http://www.cpr.ca/en/investors/cp-ns-combination-will-ease-congestion-in-key-chicago-rail-hub with only a tiny bit more meat on it. (I like the part where they say they can't figure out the interline merger benefits because they don't have access to NS's data. That made me laugh!)
Ulrich oltmannd tree68 Victrola1 MOM! They aren't playing fair! I'm supposed to win! I really don't get what CP is doing. You'd think before they set sail on this venture, that they's have lined up their alllies. Some shippers who would like their version of reciprocal switching. Some politicians who's folk might be "winners" in the transaction. Some considered positive opinions about STB outcomes. And, at least a feel for what their peers might and might not do. It's turning out they have exactly zero except for their sales pitch - and it's wonderfully devoid of actionable detail. Are they serious? Good points Oltmannd, perhaps before they set sail on this venture they weren't expecting such strong headwinds. But I tend to agree, they should have lined up their allies in this and made some friends in the backrooms of Washington who would come out in support of such a merger. Maybe they purposely didn't, hoping that allies would materialize on their own with the public announcement.
oltmannd tree68 Victrola1 MOM! They aren't playing fair! I'm supposed to win! I really don't get what CP is doing. You'd think before they set sail on this venture, that they's have lined up their alllies. Some shippers who would like their version of reciprocal switching. Some politicians who's folk might be "winners" in the transaction. Some considered positive opinions about STB outcomes. And, at least a feel for what their peers might and might not do. It's turning out they have exactly zero except for their sales pitch - and it's wonderfully devoid of actionable detail. Are they serious?
tree68 Victrola1 MOM! They aren't playing fair! I'm supposed to win!
Victrola1
If you can't impress them with your 'brilliance'; baffle them with you bovine excrement and pile it on.
BaltACD oltmannd Ulrich oltmannd tree68 Victrola1 MOM! They aren't playing fair! I'm supposed to win! I really don't get what CP is doing. You'd think before they set sail on this venture, that they's have lined up their alllies. Some shippers who would like their version of reciprocal switching. Some politicians who's folk might be "winners" in the transaction. Some considered positive opinions about STB outcomes. And, at least a feel for what their peers might and might not do. It's turning out they have exactly zero except for their sales pitch - and it's wonderfully devoid of actionable detail. Are they serious? Good points Oltmannd, perhaps before they set sail on this venture they weren't expecting such strong headwinds. But I tend to agree, they should have lined up their allies in this and made some friends in the backrooms of Washington who would come out in support of such a merger. Maybe they purposely didn't, hoping that allies would materialize on their own with the public announcement. ...and what have they been busy doing? Writing white papers! Yet another one... http://www.cpr.ca/en/investors/cp-ns-combination-will-ease-congestion-in-key-chicago-rail-hub with only a tiny bit more meat on it. (I like the part where they say they can't figure out the interline merger benefits because they don't have access to NS's data. That made me laugh!) If you can't impress them with your 'brilliance'; baffle them with you bovine excrement and pile it on.
And if you cannot make a rational argument, pile on the nonsense or whatever your favorite childish euphemism is.
schlimm BaltACD oltmannd Ulrich oltmannd tree68 Victrola1 MOM! They aren't playing fair! I'm supposed to win! I really don't get what CP is doing. You'd think before they set sail on this venture, that they's have lined up their alllies. Some shippers who would like their version of reciprocal switching. Some politicians who's folk might be "winners" in the transaction. Some considered positive opinions about STB outcomes. And, at least a feel for what their peers might and might not do. It's turning out they have exactly zero except for their sales pitch - and it's wonderfully devoid of actionable detail. Are they serious? Good points Oltmannd, perhaps before they set sail on this venture they weren't expecting such strong headwinds. But I tend to agree, they should have lined up their allies in this and made some friends in the backrooms of Washington who would come out in support of such a merger. Maybe they purposely didn't, hoping that allies would materialize on their own with the public announcement. ...and what have they been busy doing? Writing white papers! Yet another one... http://www.cpr.ca/en/investors/cp-ns-combination-will-ease-congestion-in-key-chicago-rail-hub with only a tiny bit more meat on it. (I like the part where they say they can't figure out the interline merger benefits because they don't have access to NS's data. That made me laugh!) If you can't impress them with your 'brilliance'; baffle them with you bovine excrement and pile it on. And if you cannot make a rational argument, pile on the nonsense or whatever your favorite childish euphemism is.
CP's assertions have all the force and effect of a political campaign speech and the nebulous promises they deliver. BS is BS no matter the form or fourm it is presented in.
As I have said for years, I don't like EHH's ways. But the CP, by the commonly used financial (and rail) metrics. is a more efficiently run business operation than NSC or CSX.
schlimm As I have said for years, I don't like EHH's ways. But the CP, by the commonly used financial (and rail) metrics. is a more efficiently run business operation than NSC or CSX.
Also smaller, and, by inference, easier to micro-manage as EHH is wont to do.
Norm
Is it truly more efficiently run or is it run to maximize profits pulled out this quarter by creating an unsustainable future?
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