Market Newsdesk

April 21, 2021 4:10 pm

Las Vegas Sands Reports First Quarter 2021 Results

For the quarter ended March 31, 2021

(Compared to the quarter ended March 31, 2020)

– Generating Positive Adjusted Property EBITDA in Macao and Singapore

– Pandemic-Related Travel Restrictions and Reduced Visitation Continue to Impact Financial Results

– Safety and Security of Team Members and Guests and Support for Local Communities in Macao, Singapore and Las Vegas Remain Central to our Efforts

– Investment and Capital Expenditure Programs that Expand and Enhance our Integrated Resort Offerings in Macao and Singapore Provide Ideal Platform for Growth

– Balance Sheet Strength Enables the Company to Pursue Promising Development Opportunities in New Markets

PR Newswire

LAS VEGAS, April 21, 2021 /PRNewswire/ — Las Vegas Sands Corp. (NYSE: LVS), the world’s leading developer and operator of convention-based Integrated Resorts, today reported financial results for the quarter ended March 31, 2021.

“We couldn’t be more enthusiastic about the opportunity to welcome more guests back to our properties as greater volumes of visitors are eventually able to travel to Macao, Singapore and Las Vegas,” said Robert G. Goldstein, chairman and chief executive officer. “We also remain deeply committed to supporting our team members and to helping those in need in each of our local communities as they recover from the impact of the COVID-19 pandemic.”

“We remain confident in the eventual recovery in travel and tourism spending across our markets. Demand for our offerings from our customers who have been able to visit remains robust, but pandemic-related travel restrictions, particularly in Macao and Singapore, continue to limit visitation and hinder our current financial performance.”

“Our industry-leading investments in our team members, our communities, and our market-leading Integrated Resort offerings position us exceedingly well to deliver growth as these travel restrictions eventually subside and the recovery comes to fruition. We are fortunate that our financial strength supports our investment and capital expenditure programs in both Macao and Singapore, as well as our pursuit of growth opportunities in new markets.”

Net revenue was $1.20 billion, a decrease of 15.6% from the prior year quarter. Operating loss was $96 million, compared to operating income of $6 million in the prior year quarter. Net loss from continuing operations in the first quarter of 2021 was $280 million, compared to $92 million in the first quarter of 2020. Consolidated adjusted property EBITDA was $244 million, compared to $349 million in the prior year quarter.

In March 2021, LVS entered into definitive agreements to sell its Las Vegas real property and operations for an aggregate purchase price of approximately $6.25 billion and anticipates the transaction to close in the fourth quarter of 2021. The financial position, results of operations and cash flows of the Las Vegas Operating Properties have been presented as a discontinued operation held for sale.

Sands China Ltd. Consolidated Financial Results
On a GAAP basis, total net revenues for SCL decreased 4.6%, compared to the first quarter of 2020, to $771 million. Net loss for SCL was $213 million, compared to $166 million in the first quarter of 2020.

Other Factors Affecting Earnings
Interest expense, net of amounts capitalized, was $154 million for the first quarter of 2021, compared to $128 million for the prior year quarter. Our weighted average borrowing cost in the first quarter of 2021 was 4.4%, compared to 4.2% during the first quarter of 2020, while our weighted average debt balance increased compared to the prior year quarter due to the issuance of $1.50 billion of senior notes by SCL in June 2020 and borrowings of $505 million under the SCL Credit Facility in the first quarter of 2021.

Our income tax expense for the first quarter of 2021 was $14 million, compared to $22 million in the prior year quarter. The income tax expense for the first quarter of 2021 was primarily driven by a 17% statutory rate on our Singapore operations and a non-cash expense of $20 million related to an increase of a valuation allowance related to our U.S. foreign tax credits.

Balance Sheet Items
Unrestricted cash balances as of March 31, 2021 were $2.07 billion.

The company has access to $3.94 billion available for borrowing under our U.S., SCL and Singapore revolving credit facilities, net of outstanding letters of credit.

As of March 31, 2021, total debt outstanding, excluding finance leases, was $14.42 billion.

Capital Expenditures
Capital expenditures during the first quarter totaled $291 million, including construction, development and maintenance activities of $268 million in Macao and $23 million at Marina Bay Sands.

Conference Call Information
The company will host a conference call to discuss the company’s results on Wednesday, April 21, 2021 at 1:30 p.m. Pacific Time. Interested parties may listen to the conference call through a webcast available on the company’s website at www.sands.com.

About Las Vegas Sands Corp. (NYSE: LVS)
Las Vegas Sands is the world’s preeminent developer and operator of world-class Integrated Resorts. We deliver unrivaled economic benefits to the communities in which we operate.

Sands created the meetings, incentives, convention and exhibition (MICE)-based Integrated Resort. Our industry-leading Integrated Resorts provide substantial contributions to our host communities including growth in leisure and business tourism, sustained job creation and ongoing financial opportunities for local small and medium-sized businesses.

Our properties include The Venetian Resort and Sands Expo in Las Vegas and the iconic Marina Bay Sands in Singapore. Through majority ownership in Sands China Ltd., we have developed the largest portfolio of properties on the Cotai Strip in Macao, including The Venetian Macao, The Plaza and Four Seasons Hotel Macao, The Londoner Macao and The Parisian Macao, as well as the Sands Macao on the Macao Peninsula.

Sands is dedicated to being a good corporate citizen, anchored by the core tenets of serving people, planet and communities. We deliver a great working environment for our team members worldwide, drive social impact through the Sands Cares community engagement and charitable giving program and lead in environmental performance through the award-winning Sands ECO360 global sustainability program. To learn more, please visit www.sands.com.

Forward-Looking Statements
This press release contains forward-looking statements made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve a number of risks, uncertainties or other factors beyond the company’s control, which may cause material differences in actual results, performance or other expectations. These factors include, but are not limited to: the uncertainty of the extent, duration and effects of the COVID-19 pandemic and the response of governments and other third parties, including government-mandated property closures, increased operational regulatory requirements or travel restrictions, on our business, results of operations, cash flows, liquidity and development prospects; general economic conditions; disruptions or reductions in travel and our operations due to natural or man-made disasters, pandemics, epidemics, or outbreaks of infectious or contagious diseases; our ability to invest in future growth opportunities; execute our previously announced capital expenditure programs in both Macao and Singapore, and produce future returns; new development, construction and ventures; government regulation; risks relating to our gaming licenses and subconcession; our subsidiaries’ ability to make distribution payments to us; substantial leverage and debt service; fluctuations in currency exchange rates and interest rates; gaming promoters; competition; tax law changes; transportation infrastructure in Macao; political instability, civil unrest, terrorist acts or war; legalization of gaming; insurance; the satisfaction of the conditions precedent to the consummation of the proposed sale of our Las Vegas real property and operations, including the Venetian Resort Las Vegas and the Sands Expo and Convention Center (the “Proposed Transaction”), including the receipt of regulatory approvals; unanticipated difficulties or expenditures relating to the Proposed Transaction; legal proceedings, judgments or settlements that may be instituted in connection with the Proposed Transaction, including those against us, our board of directors and executive officers and others; disruptions of current plans and operations caused by the announcement and pendency of the Proposed Transaction; potential difficulties in employee retention due to the announcement and pendency of the Proposed Transaction; the response of customers, suppliers, business partners and regulators to the announcement of the Proposed Transaction; and other factors detailed in the reports filed by Las Vegas Sands Corp. with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof. Las Vegas Sands Corp. assumes no obligation to update such information.

Contacts:

Investment Community:
Daniel Briggs
(702) 414-1221

Media:
Ron Reese
(702) 414-3607

Las Vegas Sands Corp.

First Quarter 2021 Results

Non-GAAP Measures

Within the company’s first quarter 2021 press release, the company makes reference to certain non-GAAP financial measures that supplement the company’s consolidated financial information prepared in accordance with GAAP including “adjusted net income/loss,” “adjusted earnings/loss per diluted share,” and “consolidated adjusted property EBITDA,” which have directly comparable GAAP financial measures along with “adjusted property EBITDA margin,” “hold-normalized adjusted property EBITDA,” “hold-normalized adjusted property EBITDA margin,” “hold-normalized adjusted net income/loss,” and “hold-normalized adjusted earnings/loss per diluted share.” The company believes these measures represent important internal measures of financial performance. Set forth in the financial schedules accompanying this release and presentations included on the company’s website are reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures. The non-GAAP financial measure disclosure by the company has limitations and should not be considered a substitute for, or superior to, the financial measures prepared in accordance with GAAP. The definitions of our non-GAAP financial measures and the specific reasons why the company’s management believes the presentation of the non-GAAP financial measures provides useful information to investors regarding the company’s financial condition, results of operations and cash flows are presented below.

The following non-GAAP financial measures are used by management, as well as industry analysts, to evaluate the company’s operations and operating performance. These non-GAAP financial measures are presented so investors have the same financial data management uses in evaluating financial performance with the belief it will assist the investment community in properly assessing the underlying financial performance of the company on a year-over-year and a quarter sequential basis.

Adjusted net income/loss, which is a non-GAAP financial measure, is net income (loss) attributable to Las Vegas Sands excluding certain nonrecurring corporate expenses, pre-opening expense, development expense, gain or loss on disposal or impairment of assets, loss on modification or early retirement of debt, other income or expense and income (loss) from discontinued operations, net of income tax. Adjusted net income/loss and adjusted earnings/loss per diluted share are presented as supplemental disclosures as management believes they are (1) each widely used measures of performance by industry analysts and investors and (2) a principal basis for valuation of Integrated Resort companies, as these non-GAAP measures are considered by many as alternative measures on which to base expectations for future results. These measures also form the basis of certain internal management performance expectations.

Consolidated adjusted property EBITDA, which is a non-GAAP financial measure, is net income/loss from continuing operations before stock-based compensation expense, corporate expense, pre-opening expense, development expense, depreciation and amortization, amortization of leasehold interests in land, gain or loss on disposal or impairment of assets, interest, other income or expense, gain or loss on modification or early retirement of debt and income taxes. Management utilizes consolidated adjusted property EBITDA to compare the operating profitability of its operations with those of its competitors, as well as a basis for determining certain incentive compensation. Integrated Resort companies have historically reported adjusted property EBITDA as a supplemental performance measure to GAAP financial measures. In order to view the operations of their casinos on a more stand-alone basis, Integrated Resort companies, including Las Vegas Sands, have historically excluded certain expenses that do not relate to the management of specific properties, such as pre-opening expense, development expense and corporate expense, from their adjusted property EBITDA calculations. Consolidated adjusted property EBITDA should not be interpreted as an alternative to income/loss from operations (as an indicator of operating performance) or to cash flows from operations (as a measure of liquidity), in each case, as determined in accordance with GAAP. The company has significant uses of cash flow, including capital expenditures, dividend payments, interest payments, debt principal payments and income tax payments, which are not reflected in consolidated adjusted property EBITDA. Not all companies calculate adjusted property EBITDA in the same manner. As a result, consolidated adjusted property EBITDA as presented by Las Vegas Sands may not be directly comparable to similarly titled measures presented by other companies.

Hold-normalized adjusted property EBITDA, a supplemental non-GAAP financial measure, that, in addition to the aforementioned reasons for the presentation of consolidated adjusted property EBITDA, is presented to adjust for the impact of certain variances in table games’ win percentages, which can vary from period to period. Hold-normalized adjusted property EBITDA is based on applying a Rolling Chip win percentage of 3.30% to the Rolling Chip volume for the quarter if the actual win percentage is outside the expected range of 3.15% to 3.45% for our Macao and Singapore properties and applying a win percentage of 22.0% for Baccarat and 20.0% for non-Baccarat games to the respective table games drops for the quarter if the actual win percentages are outside the expected ranges of 18.0% to 26.0% for Baccarat and 16.0% to 24.0% for non-Baccarat at our Las Vegas properties. We do not present adjustments for Non-Rolling Chip drop for our table games play at our Macao and Singapore properties, nor for slots at any of our properties. Hold-normalized adjusted property EBITDA is also adjusted for the estimated gaming taxes, commissions paid, bad debt expense, discounts and other incentives that would have been incurred when applying the win percentages noted above to the respective gaming volumes. The hold-normalized adjusted property EBITDA measure presents a consistent measure for evaluating the operating performance of our properties from period to period.

Hold-normalized adjusted net income/loss and hold-normalized adjusted earnings/loss per diluted share are additional supplemental non-GAAP financial measures that, in addition to the aforementioned reasons for the presentation of adjusted net income/loss and adjusted earnings/loss per diluted share, are presented to adjust for the impact of certain variances in table games’ win percentages, which can vary from period to period.

The company may also present the above items on a constant currency basis. This information is a non-GAAP financial measure that is calculated by translating current quarter local currency amounts to U.S. dollars based on prior period exchange rates. These amounts are compared to the prior period to derive non-GAAP constant-currency growth/decline. Management considers non-GAAP constant-currency growth/decline to be a useful metric to investors and management as it allows a more direct comparison of current performance to historical performance.

The company also makes reference to adjusted property EBITDA margin and hold-normalized adjusted property EBITDA margin, which are calculated using the aforementioned non-GAAP financial measures.

Exhibit 1
Las Vegas Sands Corp. and Subsidiaries Condensed Consolidated Statements of Operations (In millions, except per share data) (Unaudited)

	Three Months Ended
	March 31,
	2021		2020
Revenues:
Casino	$	865	$	1,075
Rooms	96		141
Food and beverage	56		64
Mall	156		103
Convention, retail and other	23		34
Net revenues	1,196		1,417
Operating expenses:
Resort operations	957		1,071
Corporate	49		59
Pre-opening	5		5
Development	9		6
Depreciation and amortization	255		253
Amortization of leasehold interests in land	14		14
Loss on disposal or impairment of assets	3		3
	1,292		1,411
Operating income (loss)	(96)		6
Other income (expense):
Interest income	1		13
Interest expense, net of amounts capitalized	(154)		(128)
Other income (expense)	(17)		39
Loss from continuing operations before income taxes	(266)		(70)
Income tax expense	(14)		(22)
Net loss from continuing operations	(280)		(92)
Income (loss) from discontinued operations, net of income taxes	(62)		41
Net loss	(342)		(51)
Net loss attributable to noncontrolling interests	64		50
Net loss attributable to Las Vegas Sands Corp.	$	(278)	$	(1)

Earnings (loss) per share — basic:
Net loss from continuing operations	$	(0.28)	$	(0.05)
Net income (loss) from discontinued operations, net of income taxes	(0.08)		0.05
Net loss per common share	$	(0.36)	$	—

Earnings (loss) per share — diluted:
Net loss from continuing operations	$	(0.28)	$	(0.05)
Net income (loss) from discontinued operations, net of income taxes	(0.08)		0.05
Net loss per common share	$	(0.36)	$	—

Weighted average shares outstanding:
Basic	764		764
Diluted	764		764

Dividends declared per common share	$	—	$	0.79

Exhibit 2
Las Vegas Sands Corp. and Subsidiaries Net Revenues and Adjusted Property EBITDA (In millions) (Unaudited)

	Three Months Ended
	March 31,
	2021			2020
Net Revenues
The Venetian Macao	$	340		$	315
The Londoner Macao	137			170
The Parisian Macao	87			141
The Plaza Macao and Four Seasons Macao	170			107
Sands Macao	35			69
Ferry Operations and Other	8			12
Macao Operations	777			814

Marina Bay Sands	426			612
Intercompany Royalties⁽¹⁾	25			35
Intersegment Eliminations ⁽²⁾	(32)			(44)
	$	1,196		$	1,417

Adjusted Property EBITDA
The Venetian Macao	$	82		$	49
The Londoner Macao	(23)			—
The Parisian Macao	(8)			(3)
The Plaza Macao and Four Seasons Macao	70			28
Sands Macao	(18)			(1)
Ferry Operations and Other	(3)			(6)
Macao Operations	100			67

Marina Bay Sands	144			282
	$	244		$	349

Adjusted Property EBITDA as a Percentage of Net Revenues
The Venetian Macao	24.1		%	15.6		%
The Londoner Macao
The Parisian Macao
The Plaza Macao and Four Seasons Macao	41.2		%	26.2		%
Sands Macao
Ferry Operations and Other
Macao Operations	12.9		%	8.2		%

Marina Bay Sands	33.8		%	46.1		%

Total	20.4		%	24.6		%

____________________

Note:	The information for the three months ended March 31, 2021 and 2020, excludes the results of the Las Vegas Operating Properties, as they are classified as a discontinued operation held for sale.
(1)	Royalties earned from foreign operations, which were previously included in the Las Vegas Operating Properties and will continue post-closing of the sale.
(2)	Intersegment eliminations include royalties and other intercompany services.

Exhibit 3
Las Vegas Sands Corp. and Subsidiaries Non-GAAP Measure Reconciliation (In millions) (Unaudited)

The following is a reconciliation of Net Loss from Continuing Operations to Consolidated Adjusted Property EBITDA and Hold-Normalized Adjusted Property EBITDA:

	Three Months Ended
	March 31,
	2021		2020
Net loss from continuing operations	$	(280)	$	(92)
Add (deduct):
Income tax expense	14		22
Other (income) expense	17		(39)
Interest expense, net of amounts capitalized	154		128
Interest income	(1)		(13)
Loss on disposal or impairment of assets	3		3
Amortization of leasehold interests in land	14		14
Depreciation and amortization	255		253
Development expense	9		6
Pre-opening expense	5		5
Stock-based compensation⁽¹⁾	5		3
Corporate expense	49		59
Consolidated Adjusted Property EBITDA	$	244	$	349

Hold-normalized casino revenue⁽²⁾	(80)		10
Hold-normalized casino expense ⁽²⁾	27		(5)
Consolidated Hold-Normalized Adjusted Property EBITDA	$	191	$	354

____________________

Note:	The information for the three months ended March 31, 2021 and 2020, excludes the results of the Las Vegas Operating Properties, as it is classified as a discontinued operation held for sale.
(1)	During the three months ended March 31, 2021 and 2020, the company recorded stock-based compensation expense of $7 million and $7 million, respectively, of which $2 million and $4 million, respectively, is included in corporate expense on the company’s condensed consolidated statements of operations.
(2)	See Exhibit 4.

Exhibit 4
Las Vegas Sands Corp. and Subsidiaries Non-GAAP Measure Reconciliation (In millions) (Unaudited)

The following are reconciliations of Adjusted Property EBITDA to Hold-Normalized Adjusted Property EBITDA:

	Three Months Ended March 31, 2021

							Hold-Normalized
	Adjusted		Hold-Normalized		Hold-Normalized		Adjusted
	Property		Casino		Casino		Property
	EBITDA		Revenue ⁽¹⁾		Expense⁽²⁾		EBITDA
Macao Operations	$	100	$	(46)	$	21	$	75
Marina Bay Sands	144		(34)		6		116
	$	244	$	(80)	$	27	$	191


	Three Months Ended March 31, 2020

							Hold-Normalized
	Adjusted		Hold-Normalized		Hold-Normalized		Adjusted
	Property		Casino		Casino		Property
	EBITDA		Revenue ⁽¹⁾		Expense⁽²⁾		EBITDA
Macao Operations	$	67	$	25	$	(8)	$	84
Marina Bay Sands	282		(15)		3		270
	$	349	$	10	$	(5)	$	354

____________________

Note:

The information for the three months ended March 31, 2021 and 2020, excludes the results of the Las Vegas Operating Properties, as they are classified as a discontinued operation held for sale.

(1)

For Macao Operations and Marina Bay Sands, this represents the estimated incremental casino revenue related to Rolling Chip volume play that would have been earned or lost had the company’s current period win percentage equaled 3.30%. This calculation will only be applied if the current period win percentage is outside the expected range of 3.15% to 3.45%.

These amounts have been offset by the estimated commissions paid and discounts and other incentives rebated directly or indirectly to customers.

(2)

Represents the estimated incremental expenses (gaming taxes and bad debt expense) that would have been incurred or avoided on the incremental casino revenue calculated in (1) above.

Exhibit 5
Las Vegas Sands Corp. and Subsidiaries Non-GAAP Measure Reconciliation (In millions, except per share data) (Unaudited)

The following is a reconciliation of Net Loss Attributable to LVS to Adjusted Net Loss and Hold-Normalized Adjusted Net Loss:
	Three Months Ended
	March 31,
	2021		2020
Net loss attributable to LVS	$	(278)	$	(1)

Pre-opening expense	5		5
Development expense	9		6
Loss on disposal or impairment of assets	3		3
Other (income) expense	17		(39)
(Income) loss from discontinued operations, net of income taxes	62		(41)
Income tax impact on net income adjustments⁽¹⁾	(2)		(1)
Noncontrolling interest impact on net income adjustments	(8)		3
Adjusted net loss from continuing operations attributable to LVS	$	(192)	$	(65)

Hold-normalized casino revenue⁽²⁾	(80)		10
Hold-normalized casino expense⁽²⁾	27		(5)
Income tax impact on hold adjustments⁽¹⁾	5		2
Noncontrolling interest impact on hold adjustments	8		(5)
Hold-normalized adjusted net loss from continuing operations attributable to LVS	$	(232)	$	(63)

The following is a reconciliation of Diluted Loss per Share to Adjusted Loss per Diluted Share and Hold-Normalized Adjusted Loss per Diluted Share:
	Three Months Ended
	March 31,
	2021		2020
Per diluted share of common stock:
Net loss attributable to LVS	$	(0.36)	$	—

Pre-opening expense	0.01		—
Development expense	0.01		0.01
Loss on disposal or impairment of assets	—		—
Other (income) expense	0.02		(0.05)
(Income) loss from discontinued operations, net of income taxes	0.08		(0.05)
Income tax impact on net income adjustments	—		—
Noncontrolling interest impact on net income adjustments	(0.01)		—
Adjusted loss per diluted share from continuing operations	$	(0.25)	$	(0.09)

Hold-normalized casino revenue	(0.10)		0.01
Hold-normalized casino expense	0.04		—
Income tax impact on hold adjustments	—		—
Noncontrolling interest impact on hold adjustments	0.01		—
Hold-normalized adjusted loss per diluted share from continuing operations	$	(0.30)	$	(0.08)

Weighted average diluted shares outstanding	764		764

____________________

(1)	The income tax impact for each adjustment is derived by applying the effective tax rate, including current and deferred income tax expense, based upon the jurisdiction and the nature of the adjustment.
(2)	See Exhibit 4.

Exhibit 6
Las Vegas Sands Corp. and Subsidiaries Supplemental Data (Unaudited)

	Three Months Ended
	March 31,
	2021		2020
Casino Statistics:
The Venetian Macao:
Table games win per unit per day⁽¹⁾	$	5,363	$	7,757
Slot machine win per unit per day⁽²⁾	$	194	$	190
Average number of table games	629		484
Average number of slot machines	1,046		1,333

The Londoner Macao:
Table games win per unit per day⁽¹⁾	$	2,522	$	6,201
Slot machine win per unit per day⁽²⁾	$	105	$	221
Average number of table games	476		304
Average number of slot machines	818		1,040

The Parisian Macao:
Table games win per unit per day⁽¹⁾	$	2,726	$	7,888
Slot machine win per unit per day⁽²⁾	$	95	$	183
Average number of table games	267		230
Average number of slot machines	881		1,066

The Plaza Macao and Four Seasons Macao:
Table games win per unit per day⁽¹⁾	$	11,466	$	11,682
Slot machine win per unit per day⁽²⁾	$	106	$	173
Average number of table games	142		121
Average number of slot machines	45		131

Sands Macao:
Table games win per unit per day⁽¹⁾	$	2,871	$	6,356
Slot machine win per unit per day⁽²⁾	$	113	$	152
Average number of table games	153		148
Average number of slot machines	530		722

Marina Bay Sands:
Table games win per unit per day⁽¹⁾	$	4,077	$	8,117
Slot machine win per unit per day⁽²⁾	$	942	$	572
Average number of table games	580		606
Average number of slot machines	1,853		2,368

Las Vegas Operating Properties⁽³⁾:
Table games win per unit per day⁽¹⁾	$	1,938	$	5,522
Slot machine win per unit per day⁽²⁾	$	380	$	321
Average number of table games	179		206
Average number of slot machines	1,491		1,978

____________________

Note:	These casino statistics exclude table games and slot machines shutdown due to social distancing measures or closure of the gaming facilities as a result of the COVID-19 pandemic. Gaming operations at The Venetian Macao, The Londoner Macao, The Parisian Macao, The Plaza Macao and Sands Macao were closed during a portion of February 2020 due to Macao government mandated closures of all casinos. The Las Vegas Operating Properties were closed from March 18, 2020 through June 4, 2020, due to the statewide closure of non-essential services by the State of Nevada. Marina Bay Sands remained in operation during this period.
(1)	Table games win per unit per day is shown before discounts, commissions, deferring revenue associated with the company’s loyalty programs and allocating casino revenues related to goods and services provided to patrons on a complimentary basis.
(2)	Slot machine win per unit per day is shown before deferring revenue associated with the company’s loyalty programs and allocating casino revenues related to goods and services provided to patrons on a complimentary basis.
(3)	The Las Vegas Operating Properties are classified as a discontinued operation held for sale.

Exhibit 7
Las Vegas Sands Corp. and Subsidiaries Supplemental Data (Unaudited)

	Three Months Ended
The Venetian Macao	March 31,
(Dollars in millions)	2021			2020			$ Change		Change
Revenues:
Casino	$	266		$	251		$	15	6.0	%
Rooms	19			21			(2)		(9.5)	%
Food and Beverage	6			5			1		20.0	%
Mall	46			29			17		58.6	%
Convention, Retail and Other	3			9			(6)		(66.7)	%
Net Revenues	$	340		$	315		$	25	7.9	%

Adjusted Property EBITDA	$	82		$	49		$	33	67.3	%
EBITDA Margin %	24.1		%	15.6		%			8.5	pts

Gaming Statistics
(Dollars in millions)

Rolling Chip Volume	$	1,231		$	2,270		$	(1,039)	(45.8)	%
Rolling Chip Win %⁽¹⁾	4.43		%	3.03		%			1.40	pts

Non-Rolling Chip Drop	$	908		$	817		$	91	11.1	%
Non-Rolling Chip Win %	27.4		%	27.0		%			0.4	pts

Slot Handle	$	462		$	438		$	24	5.5	%
Slot Hold %	4.0		%	4.5		%			(0.5)	pts

Hotel Statistics

Occupancy %	47.2		%	39.2		%			8.0	pts
Average Daily Rate (ADR)	$	157		$	238		$	(81)	(34.0)	%
Revenue per Available Room (RevPAR)	$	74		$	93		$	(19)	(20.4)	%

____________________

Note:

As a result of the COVID-19 pandemic, gaming operations were closed from February 5-19, 2020 and non-gaming operations were operating at a reduced capacity or were temporarily closed during the quarter ended March 31, 2020, due to social distancing measures and travel restrictions. The property was open during the quarter ended March 31, 2021; however, the property continued to operate at a reduced capacity, with some operations temporarily closed. Rooms utilized to house team members during the quarter ended March 31, 2020, due to travel restrictions, were excluded from the calculation of hotel statistics above.

(1)

This compares to our expected Rolling Chip win percentage of 3.15% to 3.45% (calculated before discounts, commissions, deferring revenue associated with the company’s loyalty programs and allocating casino revenues related to goods and services provided to patrons on a complimentary basis).

Las Vegas Sands Corp. and Subsidiaries Supplemental Data (Unaudited)

	Three Months Ended
The Londoner Macao	March 31,
(Dollars in millions)	2021			2020			$ Change		Change
Revenues:
Casino	$	91		$	123		$	(32)	(26.0)	%
Rooms	19			27			(8)		(29.6)	%
Food and Beverage	7			8			(1)		(12.5)	%
Mall	14			9			5		55.6	%
Convention, Retail and Other	6			3			3		100.0	%
Net Revenues	$	137		$	170		$	(33)	(19.4)	%

Adjusted Property EBITDA	$	(23)		$	—		$	(23)	N.M.
EBITDA Margin %

Gaming Statistics
(Dollars in millions)

Rolling Chip Volume	$	523		$	167		$	356	213.2	%
Rolling Chip Win %⁽¹⁾	3.71		%	5.85		%			(2.14)	pts

Non-Rolling Chip Drop	$	408		$	556		$	(148)	(26.6)	%
Non-Rolling Chip Win %	21.7		%	22.0		%			(0.3)	pts

Slot Handle	$	197		$	367		$	(170)	(46.3)	%
Slot Hold %	3.9		%	4.4		%			(0.5)	pts

Hotel Statistics

Occupancy %	35.5		%	38.1		%			(2.6)	pts
Average Daily Rate (ADR)	$	173		$	175		$	(2)	(1.1)	%
Revenue per Available Room (RevPAR)	$	61		$	67		$	(6)	(9.0)	%

____________________

N.M.	Not Meaningful
Note:	As a result of the COVID-19 pandemic, gaming operations were closed from February 5-26, 2020, while hotel operations were closed for a period in February and March of 2020 and non-gaming operations were operating at a reduced capacity or were temporarily closed during the quarter ended March 31, 2020, due to social distancing measures and travel restrictions. The property was open during the quarter ended March 31, 2021; however, the property continued to operate at a reduced capacity, with some operations temporarily closed. Rooms utilized for government quarantine purposes during the quarters ended March 31, 2021 and 2020, and to provide lodging for team members during the quarter ended March 31, 2020, due to travel restrictions, were excluded from the calculation of hotel statistics above.
(1)	This compares to our expected Rolling Chip win percentage of 3.15% to 3.45% (calculated before discounts, commissions, deferring revenue associated with the company’s loyalty programs and allocating casino revenues related to goods and services provided to patrons on a complimentary basis).

Las Vegas Sands Corp. and Subsidiaries Supplemental Data (Unaudited)

	Three Months Ended
The Parisian Macao	March 31,
(Dollars in millions)	2021			2020			$ Change		Change
Revenues:
Casino	$	59		$	115		$	(56)	(48.7)	%
Rooms	12			13			(1)		(7.7)	%
Food and Beverage	5			5			—		—	%
Mall	10			6			4		66.7	%
Convention, Retail and Other	1			2			(1)		(50.0)	%
Net Revenues	$	87		$	141		$	(54)	(38.3)	%

Adjusted Property EBITDA	$	(8)		$	(3)		$	(5)	166.7	%
EBITDA Margin %

Gaming Statistics
(Dollars in millions)

Rolling Chip Volume	$	114		$	1,890		$	(1,776)	(94.0)	%
Rolling Chip Win %⁽¹⁾	(3.01)		%	2.49		%			(5.50)	pts

Non-Rolling Chip Drop	$	300		$	390		$	(90)	(23.1)	%
Non-Rolling Chip Win %	23.0		%	23.8		%			(0.8)	pts

Slot Handle	$	223		$	432		$	(209)	(48.4)	%
Slot Hold %	3.4		%	3.5		%			(0.1)	pts

Hotel Statistics

Occupancy %	46.7		%	40.3		%			6.4	pts
Average Daily Rate (ADR)	$	118		$	169		$	(51)	(30.2)	%
Revenue per Available Room (RevPAR)	$	55		$	68		$	(13)	(19.1)	%

____________________

Note:

(1)

Las Vegas Sands Corp. and Subsidiaries Supplemental Data (Unaudited)

	Three Months Ended
The Plaza Macao and Four Seasons Macao	March 31,
(Dollars in millions)	2021			2020			$ Change		Change
Revenues:
Casino	$	115		$	83		$	32	38.6	%
Rooms	11			4			7		175.0	%
Food and Beverage	4			3			1		33.3	%
Mall	39			17			22		129.4	%
Convention, Retail and Other	1			—			1		N.M.
Net Revenues	$	170		$	107		$	63	58.9	%

Adjusted Property EBITDA	$	70		$	28		$	42	150.0	%
EBITDA Margin %	41.2		%	26.2		%			15.0	pts

Gaming Statistics
(Dollars in millions)

Rolling Chip Volume	$	1,436		$	1,626		$	(190)	(11.7)	%
Rolling Chip Win %⁽¹⁾	5.93		%	2.84		%			3.09	pts

Non-Rolling Chip Drop	$	256		$	210		$	46	21.9	%
Non-Rolling Chip Win %	24.1		%	29.9		%			(5.8)	pts

Slot Handle	$	4		$	37		$	(33)	(89.2)	%
Slot Hold %	10.8		%	4.7		%			6.1	pts

Hotel Statistics

Occupancy %	43.7		%	48.4		%			(4.7)	pts
Average Daily Rate (ADR)	$	432		$	329		$	103	31.3	%
Revenue per Available Room (RevPAR)	$	189		$	159		$	30	18.9	%

____________________

N.M.	Not Meaningful
Note:	As a result of the COVID-19 pandemic, gaming operations were closed from February 5-19, 2020 and non-gaming operations were operating at a reduced capacity or were temporarily closed during the quarter ended March 31, 2020, due to social distancing measures and travel restrictions. The property was open during the quarter ended March 31, 2021; however, the property continued to operate at a reduced capacity, with some operations temporarily closed. Rooms utilized to house team members during the quarter ended March 31, 2020, due to travel restrictions, were excluded from the calculation of hotel statistics above.
(1)	This compares to our expected Rolling Chip win percentage of 3.15% to 3.45% (calculated before discounts, commissions, deferring revenue associated with the company’s loyalty programs and allocating casino revenues related to goods and services provided to patrons on a complimentary basis).

Las Vegas Sands Corp. and Subsidiaries Supplemental Data (Unaudited)

	Three Months Ended
Sands Macao	March 31,
(Dollars in millions)	2021			2020			$ Change		Change
Revenues:
Casino	$	31		$	64		$	(33)	(51.6)	%
Rooms	3			2			1		50.0	%
Food and Beverage	1			2			(1)		(50.0)	%
Convention, Retail and Other	—			1			(1)		(100.0)	%
Net Revenues	$	35		$	69		$	(34)	(49.3)	%

Adjusted Property EBITDA	$	(18)		$	(1)		$	(17)	1,700.0	%
EBITDA Margin %

Gaming Statistics
(Dollars in millions)

Rolling Chip Volume	$	484		$	507		$	(23)	(4.5)	%
Rolling Chip Win %⁽¹⁾	4.34		%	4.37		%			(0.03)	pts

Non-Rolling Chip Drop	$	122		$	250		$	(128)	(51.2)	%
Non-Rolling Chip Win %	15.1		%	20.1		%			(5.0)	pts

Slot Handle	$	158		$	276		$	(118)	(42.8)	%
Slot Hold %	3.4		%	3.0		%			0.4	pts

Hotel Statistics

Occupancy %	71.5		%	59.8		%			11.7	pts
Average Daily Rate (ADR)	$	138		$	179		$	(41)	(22.9)	%
Revenue per Available Room (RevPAR)	$	99		$	107		$	(8)	(7.5)	%

____________________

Note:

(1)

Las Vegas Sands Corp. and Subsidiaries Supplemental Data (Unaudited)

	Three Months Ended
Marina Bay Sands	March 31,
(Dollars in millions)	2021			2020			$ Change		Change
Revenues:
Casino	$	303		$	439		$	(136)	(31.0)	%
Rooms	32			74			(42)		(56.8)	%
Food and Beverage	33			41			(8)		(19.5)	%
Mall	47			42			5		11.9	%
Convention, Retail and Other	11			16			(5)		(31.3)	%
Net Revenues	$	426		$	612		$	(186)	(30.4)	%

Adjusted Property EBITDA	$	144		$	282		$	(138)	(48.9)	%
EBITDA Margin %	33.8		%	46.1		%			(12.3)	pts

Gaming Statistics
(Dollars in millions)

Rolling Chip Volume	$	1,512		$	6,639		$	(5,127)	(77.2)	%
Rolling Chip Win %⁽¹⁾	5.59		%	3.53		%			2.06	pts

Non-Rolling Chip Drop	$	674		$	1,077		$	(403)	(37.4)	%
Non-Rolling Chip Win %	19.1		%	19.8		%			(0.7)	pts

Slot Handle	$	3,745		$	2,870		$	875	30.5	%
Slot Hold %	4.2		%	4.3		%			(0.1)	pts

Hotel Statistics

Occupancy %	63.0		%	81.0		%			(18.0)	pts
Average Daily Rate (ADR)	$	228		$	417		$	(189)	(45.3)	%
Revenue per Available Room (RevPAR)	$	143		$	338		$	(195)	(57.7)	%

____________________

Note:	Due to social distancing measures and travel restrictions as a result of the COVID-19 pandemic, the property operated at a reduced capacity during the quarter ended March 31, 2021, with some operations temporarily closed.
(1)	This compares to our expected Rolling Chip win percentage of 3.15% to 3.45% (calculated before discounts, commissions, deferring revenue associated with the company’s loyalty programs and allocating casino revenues related to goods and services provided to patrons on a complimentary basis).

Las Vegas Sands Corp. and Subsidiaries Supplemental Data – Discontinued Operation Held for Sale (Unaudited)

	Three Months Ended
Las Vegas Operating Properties⁽¹⁾	March 31,
(Dollars in millions)	2021			2020			$ Change		Change
Revenues:
Casino	$	53		$	102		$	(49)	(48.0)	%
Rooms	45			127			(82)		(64.6)	%
Food and Beverage	24			75			(51)		(68.0)	%
Convention, Retail and Other⁽²⁾	17			61			(44)		(72.1)	%
Net Revenues	$	139		$	365		$	(226)	(61.9)	%

Adjusted Property EBITDA	$	(47)		$	88		$	(135)	(153.4)	%
EBITDA Margin %				24.1		%

Gaming Statistics
(Dollars in millions)

Table Games Drop	$	335		$	446		$	(111)	(24.9)	%
Table Games Win %⁽³⁾	9.3		%	19.9		%			(10.6)	pts

Slot Handle	$	625		$	603		$	22	3.6	%
Slot Hold %	8.1		%	8.2		%			(0.1)	pts

Hotel Statistics

Occupancy %	42.6		%	87.2		%			(44.6)	pts
Average Daily Rate (ADR)	$	185		$	266		$	(81)	(30.5)	%
Revenue per Available Room (RevPAR)	$	79		$	232		$	(153)	(65.9)	%

____________________

Note:	Due to the statewide closure of non-essential services by the State of Nevada as a result of the COVID-19 pandemic, the property was closed beginning on March 18, 2020, and reopened on June 4, 2020. For the quarter ended March 31, 2021, due to social distancing measures and travel restrictions as a result of the COVID-19 pandemic, the property operated at a reduced capacity, with some operations temporarily closed due to social distancing measures. Rooms within the property’s Venezia tower that remained closed for a portion of the quarter ended March 31, 2021, were excluded from the calculation of hotel statistics above.
(1)	In March 2021, LVS entered into definitive agreements to sell its Las Vegas real property and operations and as a result have been classified as a discontinued operation held for sale.
(2)	Prior year amounts have been adjusted to conform to the current period presentation, which excludes intercompany royalties as these will continue post-closing of the sale. See Exhibit 2.
(3)	This compares to our expected Baccarat win percentage of 18.0% to 26.0% and our expected non-Baccarat win percentage of 16.0% to 24.0% (calculated before discounts).

Las Vegas Sands Corp. and Subsidiaries Supplemental Data – Asian Retail Mall Operations (Unaudited)

	For the Three Months Ended March 31, 2021									TTM March 31, 2021
(Dollars in millions except per square foot data)	Gross Revenue⁽¹⁾		Operating Profit		Operating Profit Margin		Gross Leasable Area (sq. ft.)	Occupancy % at End of Period		Tenant Sales Per Sq. Ft.⁽²⁾
Shoppes at Venetian	$	46	$	42	91.3	%	812,936	79.9	%	$	940

Shoppes at Four Seasons
Luxury Retail	21		20		95.2	%	125,466	100.0	%	5,150
Other Stores	18		17		94.4	%	118,638	87.7	%	1,632
Total	39		37		94.9	%	244,104	94.0	%	3,665

Shoppes at Londoner⁽³⁾	14		12		85.7	%	515,958	81.0	%	576

Shoppes at Parisian	10		9		90.0	%	296,145	79.8	%	422

Total Cotai Strip in Macao	109		100		91.7	%	1,869,143	82.0	%	1,182

The Shoppes at Marina Bay Sands	47		41		87.2	%	620,297	98.9	%	1,048

Total	$	156	$	141	90.4	%	2,489,440	86.2	%	$	1,138

____________________

Note:	This table excludes the results of our mall operations at Sands Macao. As a result of the COVID-19 pandemic, tenants were provided rent concessions of $13 million at our Macao properties and $6 million at Marina Bay Sands.
(1)	Gross revenue figures are net of intersegment revenue eliminations.
(2)	Tenant sales per square foot reflect sales from tenants only after the tenant has been open for a period of 12 months.
(3)	The Shoppes at Londoner will feature up to an estimated 600,000 square feet of gross leasable area upon completion of all phases of the renovation, rebranding and expansion to The Londoner Macao.

View original content to download multimedia:http://www.prnewswire.com/news-releases/las-vegas-sands-reports-first-quarter-2021-results-301274229.html

SOURCE Las Vegas Sands

April 21, 2021 4:09 pm

CP reports solid first-quarter 2021 results; positive momentum heading into the second quarter

PR Newswire

CALGARY, AB, April 21, 2021 /PRNewswire/ – Canadian Pacific Railway Limited (TSX: CP) (NYSE: CP) today announced first-quarter operating results, including revenues of $1.96 billion, an operating ratio (“OR”) of 60.2 percent, adjusted OR of 58.5 percent, diluted earnings per share (“EPS”) of $4.50 and adjusted diluted EPS of $4.48.

“The strong demand environment, particularly across bulk, merchandise and domestic intermodal, coupled with our commitment to the foundations of precision scheduled railroading enabled our success in the first quarter,” said Keith Creel, CP President and Chief Executive Officer. “The CP family demonstrated resiliency through winter and delivered a record March. Our 12,000-strong team continues to deliver, no matter the obstacles, and I am extremely proud of their efforts.”

First-quarter highlights

Revenues decreased by 4 percent to $1.96 billion from $2.04 billion last year
Reported diluted EPS was $4.50, a 51 percent increase from $2.98 last year
Adjusted diluted EPS was $4.48, a 1 percent increase from $4.42 last year
Reported OR increased by 100 basis points to 60.2 percent from 59.2 percent. The OR in the first quarter of 2021 includes a $33 million expense related to Kansas City Southern acquisition costs
Adjusted OR, which excludes the acquisition-related charges, improved 70 basis points to 58.5 percent
Multiple carload, revenue and tonnage records were broken in the first quarter:

Record tonnage, volumes and revenue in Canadian grain
Record revenue in automotive
Record revenue and volumes in domestic intermodal

March was an all-time record for GTMs and RTMs in any month leading to a volume record for Q1

“The momentum we ended the first quarter with has enabled a strong start to the second quarter and we remain committed to delivering for our customers, employees, shareholders and communities,” Creel said. “We are excited about the unique opportunities ahead in 2021 and the strong base demand environment.”

Full-year 2021 guidance¹

Double-digit adjusted diluted EPS growth relative to 2020’s adjusted diluted EPS of $17.67
High-single digit volume growth, as measured in RTMs
Capital expenditures of $1.55 billion

CP’s guidance is based on the following key assumptions:

Effective tax rate of 24.6 percent
Other components of net periodic benefit recovery will increase by approximately $40 million versus 2020

¹ CP’s 2021 guidance does not include any potential impacts from the proposed Kansas City Southern acquisition

Conference call details
CP will discuss its results with the financial community in a conference call beginning at 4:30 p.m. ET (2:30 p.m. MT) today.

Conference call access

Toronto participants dial in number: 1-647-427-7450
Operator assisted toll free dial in number: 1-888-231-8191
Callers should dial in 10 minutes prior to the call.

Webcast
We encourage you to access the webcast and presentation material in the Investors section of CP’s website at investor.cpr.ca.

A replay of the first-quarter conference call will be available by phone through to April 28, 2021 at 416-849-0833 or toll free 1-855-859-2056, password 3518217.

Access to the webcast and audio file of the presentation will be available at investor.cpr.ca.

Non-GAAP measures
Although CP has provided a forward-looking non-GAAP measure (adjusted diluted EPS), management is unable to reconcile, without unreasonable efforts, the forward-looking adjusted diluted EPS to the most comparable GAAP measure (diluted EPS), due to unknown variables and uncertainty related to future results. These unknown variables may include unpredictable transactions of significant value. In recent years, CP has recognized acquisition-related costs, changes in income tax rates and a change to an uncertain tax item. 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-Canadian dollar foreign exchange (FX) rate 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 from adjusted diluted EPS. Please see Note on forward-looking information below for further discussion.

For information regarding non-GAAP measures, including reconciliations to the nearest GAAP measures, see the attached supplementary schedule Non-GAAP Measures.

Note on forward-looking information
This news release may contain 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 2021 volume including as measured in RTMs, EPS growth and adjusted diluted EPS growth, capital program investments, the U.S.-to-Canadian dollar exchange rate, annualized effective tax rate, other components of net periodic benefit recovery, cost control efforts, the success of our business, our operations, priorities and plans, anticipated financial and operational performance, business prospects and demand for our services and growth opportunities.

The forward-looking information that may be 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 (as specified herein); effective tax rates (as specified herein); 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; and the anticipated impacts of COVID-19 on CP 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 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; 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; 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; 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; anticipated in-service dates; success of hedging activities; operational performance and reliability; customer, shareholder, 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 México, S.A. de C.V.’s Concession; public opinion; 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; 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; the pandemic created by the outbreak of 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 timing and completion of the pending KCS transaction, including receipt of regulatory and shareholder approvals and the satisfaction of other conditions precedent; interloper risk to the pending KCS transaction; the realization of anticipated benefits and synergies of the transaction and the timing thereof; the success of integration plans for KCS; the focus of management time and attention on the pending KCS transaction and other disruptions arising from the transaction; 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 previously announced proposed share split of the Company’s issued and outstanding common shares and whether it will receive the requisite regulatory approvals; potential changes in the Company’s share price which may negatively impact the value of consideration offered to KCS shareholders; and the ability of the management of the Company, its subsidiaries and affiliates to execute key priorities, including those in connection with the pending KCS transaction. 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.

Any 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

FINANCIAL STATEMENTS

INTERIM CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

	For the three months ended March 31
(in millions of Canadian dollars, except share and per share data)	2021		2020
Revenues (Note 3)
Freight	$	1,918	$	2,000
Non-freight	41		43
Total revenues	1,959		2,043
Operating expenses
Compensation and benefits	405		398
Fuel	206		212
Materials	59		59
Equipment rents	33		36
Depreciation and amortization	202		192
Purchased services and other (Note 9, 10)	274		312
Total operating expenses	1,179		1,209

Operating income	780		834
Less:
Other (income) expense (Note 4, 10)	(28)		211
Other components of net periodic benefit recovery (Note 14)	(95)		(85)
Net interest expense	110		114
Income before income tax expense	793		594
Income tax expense (Note 5)	191		185
Net income	$	602	$	409

Earnings per share (Note 6)
Basic earnings per share	$	4.52	$	2.99
Diluted earnings per share	$	4.50	$	2.98

Weighted-average number of shares (millions) (Note 6)
Basic	133.3		136.7
Diluted	133.9		137.2

Dividends declared per share	$	0.95	$	0.83

Earnings per share – Pro forma post-split basis (Note 17)
Basic earnings per share	$	0.90	$	0.60
Diluted earnings per share	$	0.90	$	0.60

See Notes to Interim Consolidated Financial Statements.

INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)

	For the three months ended March 31
(in millions of Canadian dollars)	2021		2020
Net income	$	602	$	409
Net gain (loss) in foreign currency translation adjustments, net of hedging activities	10		(65)
Change in derivatives designated as cash flow hedges	25		2
Change in pension and post-retirement defined benefit plans	53		45
Other comprehensive income (loss) before income taxes	88		(18)
Income tax (expense) recovery on above items	(30)		60
Other comprehensive income (Note 7)	58		42
Comprehensive income	$	660	$	451

See Notes to Interim Consolidated Financial Statements.

INTERIM CONSOLIDATED BALANCE SHEETS AS AT

(unaudited)

	March 31		December 31
(in millions of Canadian dollars)	2021		2020
Assets
Current assets
Cash and cash equivalents	$	360	$	147
Accounts receivable, net (Note 8)	840		825
Materials and supplies	213		208
Other current assets	211		141
	1,624		1,321
Investments	199		199
Properties	20,503		20,422
Goodwill and intangible assets	371		366
Pension asset	1,007		894
Other assets	417		438
Total assets	$	24,121	$	23,640
Liabilities and shareholders’ equity
Current liabilities
Accounts payable and accrued liabilities	$	1,418	$	1,467
Long-term debt maturing within one year (Note 11, 12)	1,782		1,186
	3,200		2,653
Pension and other benefit liabilities	829		832
Other long-term liabilities	537		585
Long-term debt (Note 11, 12)	7,958		8,585
Deferred income taxes	3,731		3,666
Total liabilities	16,255		16,321
Shareholders’ equity
Share capital	1,993		1,983
Additional paid-in capital	58		55
Accumulated other comprehensive loss (Note 7)	(2,756)		(2,814)
Retained earnings	8,571		8,095
	7,866		7,319
Total liabilities and shareholders’ equity	$	24,121	$	23,640

See Contingencies (Note 10, 16).

See Notes to Interim Consolidated Financial Statements.

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	For the three months ended March 31
(in millions of Canadian dollars)	2021		2020
Operating activities
Net income	$	602	$	409
Reconciliation of net income to cash provided by operating activities:
Depreciation and amortization	202		192
Deferred income tax expense (Note 5)	51		39
Pension recovery and funding (Note 14)	(61)		(65)
Foreign exchange (gain) loss on debt and lease liabilities (Note 4)	(33)		215
Other operating activities, net	(88)		(72)
Change in non-cash working capital balances related to operations	(91)		(229)
Cash provided by operating activities	582		489
Investing activities
Additions to properties	(323)		(355)
Proceeds from sale of properties and other assets	37		2
Other	—		(9)
Cash used in investing activities	(286)		(362)
Financing activities
Dividends paid	(127)		(114)
Issuance of CP Common Shares	8		24
Purchase of CP Common Shares (Note 13)	—		(501)
Issuance of long-term debt, excluding commercial paper	—		959
Repayment of long-term debt, excluding commercial paper	(21)		(15)
Net issuance (repayment) of commercial paper (Note 11)	93		(553)
Net increase in short-term borrowings	—		145
Acquisition-related financing fees (Note 10)	(33)		—
Other	—		11
Cash used in financing activities	(80)		(44)
Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents	(3)		31
Cash position
Increase in cash and cash equivalents	213		114
Cash and cash equivalents at beginning of period	147		133
Cash and cash equivalents at end of period	$	360	$	247

Supplemental disclosures of cash flow information:
Income taxes paid	$	133	$	139
Interest paid	$	155	$	157

See Notes to Interim Consolidated Financial Statements.

INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(unaudited)

	For the three months ended March 31
(in millions of Canadian dollars except per share data)		Common Shares (in millions)	Share capital		Additional paid-in capital		Accumulated other comprehensive loss		Retained earnings		Total shareholders’ equity
Balance at January 1, 2021		133.3	$	1,983	$	55	$	(2,814)	$	8,095	$	7,319
Net income		—	—		—		—		602		602
Other comprehensive income (Note 7)		—	—		—		58		—		58
Dividends declared ($0.95 per share)		—	—		—		—		(126)		(126)
Effect of stock-based compensation expense		—	—		5		—		—		5
Shares issued under stock option plan		—	10		(2)		—		—		8
Balance at March 31, 2021		133.3	$	1,993	$	58	$	(2,756)	$	8,571	$	7,866
Balance at January 1, 2020		137.0	$	1,993	$	48	$	(2,522)	$	7,549	$	7,068
Net income		—	—		—		—		409		409
Other comprehensive income (Note 7)		—	—		—		42		—		42
Dividends declared ($0.83 per share)		—	—		—		—		(112)		(112)
Effect of stock-based compensation expense		—	—		5		—		—		5
CP Common Shares repurchased (Note 13)		(1.6)	(21)		—		—		(447)		(468)
Shares issued under stock option plan		0.2	13		(2)		—		—		11
Balance at March 31, 2020		135.6	$	1,985	$	51	$	(2,480)	$	7,399	$	6,955

See Notes to Interim Consolidated Financial Statements.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(unaudited)

1 Basis of presentation

These unaudited Interim Consolidated Financial Statements (“Interim Consolidated Financial Statements”) of Canadian Pacific Railway Limited (“CP”, or “the Company”), expressed in Canadian dollars, reflect management’s estimates and assumptions that are necessary for their fair presentation in conformity with generally accepted accounting principles in the United States of America (“GAAP”). They do not include all disclosures required under GAAP for annual financial statements and should be read in conjunction with the 2020 annual Consolidated Financial Statements and notes included in CP’s 2020 Annual Report on Form 10-K. The accounting policies used are consistent with the accounting policies used in preparing the 2020 annual Consolidated Financial Statements.

CP’s operations can be affected by seasonal fluctuations such as changes in customer demand and weather-related issues. This seasonality could impact quarter-over-quarter comparisons.

In management’s opinion, the Interim Consolidated Financial Statements include all adjustments (consisting of normal and recurring adjustments) necessary to present fairly such information. Interim results are not necessarily indicative of the results expected for the fiscal year.

2 Accounting changes

Accounting pronouncements that became effective during the period covered by the Interim Consolidated Financial Statements did not have a material impact on the Company’s Interim Consolidated Balance Sheets, Interim Consolidated Statements of Income, or Interim Consolidated Statements of Cash Flows. Likewise, accounting pronouncements issued, but not effective until after March 31, 2021, are not expected to have a material impact on the Company’s Consolidated Balance Sheets, Consolidated Statements of Income, or Consolidated Statements of Cash Flows.

3 Revenues

The following table disaggregates the Company’s revenues from contracts with customers by major source:

	For the three months ended March 31
(in millions of Canadian dollars)	2021		2020
Freight
Grain	$	448	$	418
Coal	163		150
Potash	101		112
Fertilizers and sulphur	77		70
Forest products	80		78
Energy, chemicals and plastics	388		491
Metals, minerals and consumer products	159		189
Automotive	108		87
Intermodal	394		405
Total freight revenues	1,918		2,000
Non-freight excluding leasing revenues	24		29
Revenues from contracts with customers	1,942		2,029
Leasing revenues	17		14
Total revenues	$	1,959	$	2,043

Contract liabilities

Contract liabilities represent payments received for performance obligations not yet satisfied and relate to deferred revenue, and are presented as components of “Accounts payable and accrued liabilities” and “Other long-term liabilities” on the Company’s Interim Consolidated Balance Sheets.

The following table summarizes the changes in contract liabilities:

	For the three months ended March 31
(in millions of Canadian dollars)	2021		2020
Opening balance	$	61	$	146
Revenue recognized that was included in the contract liability balance at the beginning of the period	(11)		(37)
Increase due to consideration received, net of revenue recognized during the period	64		3
Closing balance	$	114	$	112

4 Other (income) expense

	For the three months ended March 31
(in millions of Canadian dollars)	2021		2020
Foreign exchange (gain) loss on debt and lease liabilities⁽¹⁾	$	(33)	$	215
Other foreign exchange losses (gains)	1		(5)
Acquisition-related costs (Note 10)	3		—
Other	1		1
Other (income) expense	$	(28)	$	211

⁽¹⁾	Includes unrealized net loss on foreign exchange (“FX”) forward contracts. Refer to Note 12 Financial instruments.

5 Income taxes

	For the three months ended March 31
(in millions of Canadian dollars)	2021		2020
Current income tax expense	$	140	$	146
Deferred income tax expense	51		39
Income tax expense	$	191	$	185

The effective tax rates including discrete items for the three months ended March 31, 2021 was 24.05%, compared to 31.10% for the same period of 2020.

For the three months ended March 31, 2021, the effective tax rate was 24.60%, excluding the discrete items of the acquisition-related costs of $36 million and the FX gain of $33 million on debt and lease liabilities.

For the three months ended March 31, 2020, the effective tax rate was 25.00%, excluding the discrete item of the FX loss of $215 million on debt and lease liabilities.

6 Earnings per share

Basic earnings per share has been calculated using Net income for the period divided by the weighted-average number of shares outstanding during the period. The number of shares used in the earnings per share calculations are reconciled as follows:

	For the three months ended March 31
(in millions)	2021	2020
Weighted-average basic shares outstanding	133.3	136.7
Dilutive effect of stock options	0.6	0.5
Weighted-average diluted shares outstanding	133.9	137.2

For the three months ended March 31, 2021, there were no options excluded from the computation of diluted earnings per share (three months ended March 31, 2020 – 0.1 million).

7 Changes in Accumulated other comprehensive loss (“AOCL”) by component

	For the three months ended March 31
(in millions of Canadian dollars)	Foreign currency net of hedging activities⁽¹⁾		Derivatives and other⁽¹⁾		Pension and post- retirement defined benefit plans⁽¹⁾		Total⁽¹⁾
Opening balance, January 1, 2021	$	112	$	(48)	$	(2,878)	$	(2,814)
Other comprehensive income before reclassifications	—		17		—		17
Amounts reclassified from accumulated other comprehensive loss	—		2		39		41
Net other comprehensive income	—		19		39		58
Closing balance, March 31, 2021	$	112	$	(29)	$	(2,839)	$	(2,756)
Opening balance, January 1, 2020	$	112	$	(54)	$	(2,580)	$	(2,522)
Other comprehensive income before reclassifications	7		—		—		7
Amounts reclassified from accumulated other comprehensive loss	—		2		33		35
Net other comprehensive income	7		2		33		42
Closing balance, March 31, 2020	$	119	$	(52)	$	(2,547)	$	(2,480)

⁽¹⁾	Amounts are presented net of tax.

Amounts in Pension and post-retirement defined benefit plans reclassified from AOCL are as follows:

	For the three months ended March 31
(in millions of Canadian dollars)	2021		2020
Recognition of net actuarial loss⁽¹⁾	$	53	$	45
Income tax recovery	(14)		(12)
Total net of income tax	$	39	$	33

⁽¹⁾	Impacts “Other components of net periodic benefit recovery” on the Interim Consolidated Statements of Income.

8 Accounts receivable, net

	As at March 31, 2021						As at March 31, 2020
(in millions of Canadian dollars)	Freight		Non- freight		Total		Freight		Non- freight		Total
Total accounts receivable	$	681	$	198	$	879	$	724	$	202	$	926
Allowance for credit losses	(24)		(15)		(39)		(27)		(14)		(41)
Total accounts receivable, net	$	657	$	183	$	840	$	697	$	188	$	885

	For the three months ended March 31, 2021						For the three months ended March 31, 2020
(in millions of Canadian dollars)	Freight		Non- freight		Total		Freight		Non- freight		Total
Allowance for credit losses, opening balance	$	(25)	$	(15)	$	(40)	$	(27)	$	(16)	$	(43)
Current period credit loss provision, net	1		—		1		—		2		2
Allowance for credit losses, closing balance	$	(24)	$	(15)	$	(39)	$	(27)	$	(14)	$	(41)

9 Property sale

Gain on exchange of property and easements in Chicago

During the first quarter of 2021, the Company exchanged property and property easements in Chicago with a government agency for proceeds of $103 million including cash of $61 million and property assets at a fair value of $42 million. Fair value was determined based on comparable market transactions. The Company recorded a gain in the first quarter within “Purchased services and other” of $50 million ($38 million after tax) from the transaction, and a deferred gain of $53 million which will be recognized in income over the period of use of certain easements.

10 Business acquisition

Pending Kansas City Southern Transaction

On March 21, 2021, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Kansas City Southern (“KCS”).

Upon the approval of the transaction by the shareholders of both the Company and KCS, and satisfaction or waiver of customary closing conditions, the shares of KCS will be deposited into a voting trust subject to a voting trust agreement, pending final approval of the transaction by the Surface Transportation Board (“STB”). This step is expected to be completed in the second half of 2021.

Under the Merger Agreement, common shareholders of KCS will receive 0.489 (exchange ratio) of a common share of the Company and U.S. $90 in cash for each KCS common share held. Preferred shareholders will receive U.S. $37.50 in cash for each KCS preferred share held. The share split (see Note 17) will change the exchange ratio as defined in the Merger Agreement to 2.445 CP shares for every KCS common share.

As of the signing of the Merger Agreement, the transaction represented an enterprise value of approximately U.S. $29 billion, which includes the assumption of U.S. $3.8 billion of outstanding KCS debt. The actual value of the transaction may fluctuate based upon changes in the price of the Company’s common shares and the number of shares of KCS common shares, preferred shares and equity awards units outstanding on the closing date. Subject to final approval of the transaction by the STB and other applicable regulatory authorities, the transaction is expected to be completed by the middle of 2022.

In the first quarter of 2021, the Company incurred $36 million in acquisition-related expenses, of which $33 million was recorded within “Purchased services and other” and $3 million was recorded within “Other (income) expense” including the amortization of financing fees associated with new credit facilities (see Note 11). Certain additional acquisition-related costs will become payable only upon closing of the transaction into the voting trust. Total financing fees paid during the first quarter of 2021 for the anticipated debt issuance were $33 million, presented under Cash flow from financing activities in the Company’s Interim Consolidated Statements of Cash Flows.

The Merger Agreement includes termination fees for both the Company and KCS. The Company or KCS will be required to pay a termination fee equal to U.S. $700 million if the Merger Agreement is terminated in certain circumstances, including if the Merger Agreement is terminated either because the Company’s or KCS’ boards of directors have changed their recommendation, respectively. The Company will be required to pay a termination fee equal to U.S. $1 billion if the Merger Agreement is terminated in certain circumstances, including (i) failure to obtain required approval from the STB to close into voting trust or (ii) a final non-appealable injunction or similar order that is issued under applicable railroad laws or Section 721 of the United States Defense Production Act of 1950 prohibiting the transaction.

11 Debt

Credit facility

Effective March 21, 2021, the Company obtained commitments for a new U.S. $8.5 billion 364-day senior unsecured facility to bridge financing requirements for the pending KCS transaction.

Effective April 9, 2021, the Company amended the financial covenant within its existing revolving credit facility to provide flexibility upon close of the pending KCS transaction.

Commercial paper program

The Company has a commercial paper program which enables it to issue commercial paper up to a maximum aggregate principal amount of U.S. $1.0 billion in the form of unsecured promissory notes. This commercial paper program is backed by the U.S. $1.3 billion revolving credit facility. As at March 31, 2021, the Company had total commercial paper borrowings of U.S. $715 million (December 31, 2020 – U.S. $644 million). The weighted-average interest rate on these borrowings was 0.21% (December 31, 2020 – 0.27%). The Company presents issuances and repayments of commercial paper, all of which have a maturity of less than 90 days, in the Company’s Interim Consolidated Statements of Cash Flows on a net basis.

12 Financial instruments

A. Fair values of financial instruments

The Company categorizes its financial assets and liabilities measured at fair value into a three-level hierarchy established by GAAP that prioritizes those inputs to valuation techniques used to measure fair value based on the degree to which they are observable. The three levels of the fair value hierarchy are as follows: Level 1 inputs are quoted prices in active markets for identical assets and liabilities; Level 2 inputs, other than quoted prices included within Level 1, are observable for the asset or liability either directly or indirectly; and Level 3 inputs are not observable in the market.

For non-exchange traded derivatives classified as Level 2, the Company uses standard valuation techniques to calculate fair value. Primary inputs to these techniques include observable market prices (interest, FX, and commodity) and volatility, depending on the type of derivative and nature of the underlying risk. The Company uses inputs and data used by willing market participants when valuing derivatives and considers its own credit default swap spread as well as those of its counterparties in its determination of fair value. All derivatives are classified as Level 2.

The Company’s short-term financial instruments include cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, and short-term borrowings including commercial paper. The carrying value of short-term financial instruments all approximate their fair values.

The carrying value of the Company’s debt and finance lease liabilities do not approximate their fair value. Their estimated fair value has been determined based on market information where available, or by discounting future payments of principal and interest at estimated interest rates expected to be available to the Company at period end. All measurements are classified as Level 2. The Company’s debt and finance lease liabilities, including current maturities, with a carrying value of $8,841 million at March 31, 2021 (December 31, 2020 – $8,951 million), had a fair value of $10,609 million (December 31, 2020 – $11,597 million).

B. Financial risk management

FX management

Net investment hedge

The effect of the Company’s net investment hedge for the three months ended March 31, 2021 was an unrealized FX gain of $76 million (three months ended March 31, 2020 – an unrealized FX loss of $555 million) recognized in “Other comprehensive income”.

FX forward contracts

During the first quarter of 2021, the Company entered into various FX forward contracts totalling a notional U.S. $800 million to fix the FX rate and lock-in a portion of the amount of Canadian dollars it may borrow to finance the U.S. dollar-denominated cash purchase consideration of the pending KCS transaction. The changes in fair value on the FX forward contracts were recorded in “Other (income) expense” on the Company’s Interim Consolidated Statements of Income, with the offsetting unrealized gains and losses included in “Other current assets” and “Accounts payable and accrued liabilities” on the Company’s Interim Consolidated Balance Sheets. For the three months ended March 31, 2021, the change in fair value on the FX forward contracts was negligible.

During April 2021, the Company entered into additional FX forward contracts totalling a notional U.S. $200 million to fix the FX rate and lock-in a portion of the amount of Canadian dollars it may use to finance the pending U.S. dollar-denominated KCS transaction.

Interest rate management

Forward starting swaps

During the first quarter of 2021, the Company entered into forward starting floating-to-fixed interest rate swap agreements (“forward starting swaps”) with terms of up to 30 years, totalling a notional U.S. $1.8 billion to fix the benchmark rate on cash flows associated with highly probable forecasted issuances of long-term notes. The changes in fair value on the forward starting swaps is recorded in “Accumulated other comprehensive loss”, net of tax, as cash flow hedges until the notes are issued. Subsequent to the notes issuance, amounts in “Accumulated other comprehensive loss” will be reclassified to “Net interest expense”. As at March 31, 2021, the unrealized fair value gain derived from the forward starting swaps of $20 million was included in “Other current assets” on the Company’s Interim Consolidated Balance Sheets, with the offset reflected in “Other comprehensive income” on the Company’s Interim Consolidated Statements of Comprehensive Income.

During April 2021, the Company entered into additional forward starting swaps with terms of up to 30 years, totalling a notional U.S. $600 million to fix the benchmark rate on cash flows associated with highly probable issuances of long-term notes.

Bond locks

During the first quarter of 2021, the Company entered into 7-year interest rate bond locks totalling a notional $600 million to fix the benchmark rate on cash flows associated with highly probable forecasted issuance of long-term notes. The changes in fair value on the bond locks is recorded in “Accumulated other comprehensive loss”, net of tax, as cash flow hedges until the notes are issued. Subsequent to the notes issuance, amounts in “Accumulated other comprehensive loss” will be reclassified to “Net interest expense”. As at March 31, 2021, the unrealized fair value gain derived from the bond locks of $2 million was included in “Other current assets” on the Company’s Interim Consolidated Balance Sheets, with the offset reflected in “Other comprehensive income” on the Company’s Interim Consolidated Statements of Comprehensive Income.

13 Shareholders’ equity

On January 27, 2021, the Company announced a normal course issuer bid (“NCIB”), commencing January 29, 2021, to purchase up to 3.33 million Common Shares in the open market for cancellation on or before January 28, 2022. As at March 31, 2021, the Company had not purchased any Common Shares under this NCIB. As a result of the pending KCS transaction, the Company does not plan to purchase any Common Shares under this program.

On December 17, 2019, the Company announced a NCIB, commencing December 20, 2019, to purchase up to 4.80 million Common Shares for cancellation on or before December 19, 2020. Upon expiry of this NCIB, the Company had purchased 4.27 million Common Shares for $1,577 million.

All purchases were made in accordance with the respective NCIB at prevailing market prices plus brokerage fees, or such other prices that were permitted by the Toronto Stock Exchange (“TSX”), with consideration allocated to “Share capital” up to the average carrying amount of the shares and any excess allocated to “Retained earnings”.

The following table provides activities under the share repurchase programs:

	For the three months ended March 31
	2021		2020
Number of Common Shares repurchased⁽¹⁾	—		1,455,854
Weighted-average price per share⁽²⁾	$	—	$	321.71
Amount of repurchase (in millions of Canadian dollars)⁽²⁾	$	—	$	468

⁽¹⁾	Includes shares repurchased but not yet cancelled at end of period.
⁽²⁾	Includes brokerage fees.

14 Pension and other benefits

In the three months ended March 31, 2021, the Company made contributions of $4 million (three months ended March 31, 2020 – $9 million) to its defined benefit pension plans.

Net periodic benefit costs for defined benefit pension plans and other benefits included the following components:

	For the three months ended March 31
	Pensions				Other benefits
(in millions of Canadian dollars)	2021		2020		2021		2020
Current service cost (benefits earned by employees)	$	43	$	35	$	3	$	3
Other components of net periodic benefit (recovery) cost:
Interest cost on benefit obligation	88		102		4		5
Expected return on fund assets	(240)		(237)		—		—
Recognized net actuarial loss	52		44		1		1
Total other components of net periodic benefit (recovery) cost	(100)		(91)		5		6
Net periodic benefit (recovery) cost	$	(57)	$	(56)	$	8	$	9

15 Stock-based compensation

At March 31, 2021, the Company had several stock-based compensation plans including stock option plans, various cash-settled liability plans, and an employee share purchase plan. These plans resulted in an expense for the three months ended March 31, 2021 of $24 million (three months ended March 31, 2020 – expense of $11 million).

Stock option plan

In the three months ended March 31, 2021, under CP’s stock option plans, the Company issued 266,698 options at the weighted-average price of $437.94 per share, based on the closing price on the grant date. Pursuant to the employee plan, these options may be exercised upon vesting, which is between 12 months and 48 months after the grant date, and will expire after seven years.

Under the fair value method, the fair value of the stock options at grant date was approximately $25 million. The weighted-average fair value assumptions were approximately:

	For the three months ended March 31, 2021
Expected option life (years)⁽¹⁾	4.75
Risk-free interest rate⁽²⁾	0.53%
Expected share price volatility⁽³⁾	27.14%
Expected annual dividends per share⁽⁴⁾	$3.80
Expected forfeiture rate⁽⁵⁾	2.60%
Weighted-average grant date fair value per option granted during the period	$95.16

⁽¹⁾	Represents the period of time that awards are expected to be outstanding. Historical data on exercise behaviour or, when available, specific expectations regarding future exercise behaviour were used to estimate the expected life of the option.
⁽²⁾	Based on the implied yield available on zero-coupon government issues with an equivalent term commensurate with the expected term of the option.
⁽³⁾	Based on the historical volatility of the Company’s share price over a period commensurate with the expected term of the option.
⁽⁴⁾	Determined by the current annual dividend at the time of grant. The Company does not employ different dividend yields throughout the contractual term of the option.
⁽⁵⁾	The Company estimates forfeitures based on past experience. This rate is monitored on a periodic basis.

Performance share unit plans

During the three months ended March 31, 2021, the Company issued 84,672 Performance Share Units (“PSUs”) with a grant date fair value of approximately $36 million and 2,539 Performance Deferred Share Units (“PDSUs”) with a grant date fair value, including the value of expected future matching units, of approximately $1 million. PSUs and PDSUs attract dividend equivalents in the form of additional units based on dividends paid on the Company’s Common Shares, and vest approximately three years after the grant date, contingent upon CP’s performance (“performance factor”). The fair value of these PSUs and PDSUs is measured periodically until settlement. Vested PSUs are settled in cash. Vested PDSUs are settled in cash pursuant to the Deferred Share Unit (“DSU”) Plan and are eligible for a 25% match if the holder has not exceeded their share ownership requirements, and are paid out only when the holder ceases their employment with CP.

The performance period for PSUs and PDSUs issued in the three months ended March 31, 2021 is January 1, 2021 to December 31, 2023 and the performance factors are Return on Invested Capital (“ROIC”), Total Shareholder Return (“TSR”) compared to the S&P/TSX 60 Index, and TSR compared to Class I railways.

The performance period for PSUs issued in 2018 was January 1, 2018 to December 31, 2020. The performance factors for 125,280 PSUs were ROIC, TSR compared to the S&P/TSX Capped Industrial Index, and TSR compared to the S&P 1500 Road and Rail Index. The resulting payout was 200% of the outstanding units multiplied by the Company’s average share price calculated using the last 30 trading days preceding December 31, 2020. In the first quarter of 2021, payouts occurred on 114,014 total outstanding awards, including dividends reinvested, totalling $98 million. The performance factors for the remaining 36,975 PSUs were annual revenue for the fiscal year 2020, diluted earnings per share for the fiscal year 2020, and share price appreciation.

Deferred share unit plan

During the three months ended March 31, 2021, the Company granted 9,170 DSUs with a grant date fair value of approximately $4 million. DSUs vest over various periods of up to 36 months and are only redeemable for a specified period after employment is terminated. The expense for DSUs is recognized over the vesting period for both the initial subscription price and the change in value between reporting periods.

16 Contingencies

In the normal course of its operations, the Company becomes involved in various legal actions, including claims relating to injuries and damage to property. The Company maintains provisions it considers to be adequate for such actions. While the final outcome with respect to actions outstanding or pending at March 31, 2021 cannot be predicted with certainty, it is the opinion of management that their resolution will not have a material adverse effect on the Company’s business, financial position or results of operations.

Legal proceedings related to Lac-Mégantic rail accident

On July 6, 2013, a train carrying petroleum crude oil operated by Montréal Maine and Atlantic Railway (“MMAR”) or a subsidiary, Montréal Maine & Atlantic Canada Co. (“MMAC” and collectively the “MMA Group”), derailed in Lac-Mégantic, Québec. The derailment occurred on a section of railway owned and operated by the MMA Group and while the MMA Group exclusively controlled the train.

Following the derailment, MMAC sought court protection in Canada under the Companies’ Creditors Arrangement Act and MMAR filed for bankruptcy in the U.S. Plans of arrangement were approved in both Canada and the U.S. (the “Plans”), providing for the distribution of approximately $440 million amongst those claiming derailment damages.

A number of legal proceedings, set out below, were commenced in Canada and the U.S. against CP and others:

(1) Québec’s Minister of Sustainable Development, Environment, Wildlife and Parks ordered various parties, including CP, to remediate the derailment site (the “Cleanup Order”) and served CP with a Notice of Claim for $95 million for those costs. CP appealed the Cleanup Order and contested the Notice of Claim with the Administrative Tribunal of Québec. These proceedings are stayed pending determination of the Attorney General of Québec (“AGQ”) action (paragraph 2 below).

(2) The AGQ sued CP in the Québec Superior Court claiming $409 million in damages, which was amended and reduced to $315 million (the “AGQ Action”). The AGQ Action alleges that: (i) CP was responsible for the petroleum crude oil from its point of origin until its delivery to Irving Oil Ltd.; and (ii) CP is vicariously liable for the acts and omissions of the MMA Group.

(3) A class action in the Québec Superior Court on behalf of persons and entities residing in, owning or leasing property in, operating a business in, or physically present in Lac-Mégantic at the time of the derailment was certified against CP on May 8, 2015 (the “Class Action”). Other defendants including MMAC and Mr. Thomas Harding (“Harding”) were added to the Class Action on January 25, 2017. The Class Action seeks unquantified damages, including for wrongful death, personal injury, property damage, and economic loss.

(4) Eight subrogated insurers sued CP in the Québec Superior Court claiming approximately $16 million in damages, which was amended and reduced to approximately $15 million (the “Promutuel Action”), and two additional subrogated insurers sued CP claiming approximately $3 million in damages (the “Royal Action”). Both actions contain similar allegations as the AGQ Action. The actions do not identify the subrogated parties. As such, the extent of any overlap between the damages claimed in these actions and under the Plans is unclear. The Royal Action is stayed pending determination of the consolidated proceedings described below.

On December 11, 2017, the AGQ Action, the Class Action and the Promutuel Action were consolidated. These consolidated claims are currently scheduled for a joint liability trial commencing on or around September 13, 2021, followed by a damages trial, if necessary.

(5) Forty-eight plaintiffs (all individual claims joined in one action) sued CP, MMAC, and Harding in the Québec Superior Court claiming approximately $5 million in damages for economic loss and pain and suffering, and asserting similar allegations as in the Class Action and the AGQ Action. The majority of the plaintiffs opted-out of the Class Action and all but two are also plaintiffs in litigation against CP, described in paragraph 7 below. This action is stayed pending determination of the consolidated claims described above.

(6) The MMAR U.S. bankruptcy estate representative commenced an action against CP in November 2014 in the Maine Bankruptcy Court claiming that CP failed to abide by certain regulations and seeking approximately U.S. $30 million in damages for MMAR’s loss in business value according to a recent report. This action asserts that CP knew or ought to have known that the shipper misclassified the petroleum crude oil and therefore should have refused to transport it.

(7) The class and mass tort action commenced against CP in June 2015 in Texas (on behalf of Lac-Mégantic residents and wrongful death representatives) and the wrongful death and personal injury actions commenced against CP in June 2015 in Illinois and Maine, were all transferred and consolidated in Federal District Court in Maine (the “Maine Actions”). The Maine Actions allege that CP negligently misclassified and improperly packaged the petroleum crude oil. On CP’s motion, the Maine Actions were dismissed. The plaintiffs are appealing the dismissal decision, which is pending.

(8) The trustee for the wrongful death trust commenced Carmack Amendment claims against CP in North Dakota Federal Court, seeking to recover approximately U.S. $6 million for damaged rail cars and lost crude and reimbursement for the settlement paid by the consignor and the consignee under the Plans (alleged to be U.S. $110 million and U.S. $60 million, respectively). The Court issued an Order on August 6, 2020 granting and denying in parts the parties’ summary judgment motions which has been reviewed and confirmed following motions by the parties for clarification and reconsideration. This action is scheduled for trial on September 21, 2021.

At this stage of the proceedings, any potential responsibility and the quantum of potential losses cannot be determined. Nevertheless, CP denies liability and is vigorously defending these proceedings.

Environmental liabilities

Environmental remediation accruals, recorded on an undiscounted basis unless a reliable, determinable estimate as to an amount and timing of costs can be established, cover site-specific remediation programs.

The accruals for environmental remediation represent CP’s best estimate of its probable future obligation and include both asserted and unasserted claims, without reduction for anticipated recoveries from third parties. Although the recorded accruals include CP’s best estimate of all probable costs, CP’s total environmental remediation costs cannot be predicted with certainty. Accruals for environmental remediation may change from time to time as new information about previously untested sites becomes known, and as environmental laws and regulations evolve and advances are made in environmental remediation technology. The accruals may also vary as the courts decide legal proceedings against outside parties responsible for contamination. These potential charges, which cannot be quantified at this time, may materially affect income in the particular period in which a charge is recognized. Costs related to existing, but as yet unknown, or future contamination will be accrued in the period in which they become probable and reasonably estimable.

The expense included in “Purchased services and other” for the three months ended March 31, 2021 was $2 million (three months ended March 31, 2020 – $1 million). Provisions for environmental remediation costs are recorded in “Other long-term liabilities”, except for the current portion which is recorded in “Accounts payable and accrued liabilities”. The total amount provided at March 31, 2021 was $81 million (December 31, 2020 – $80 million). Payments are expected to be made over 10 years through 2030.

17 Subsequent event

On April 21, 2021, the Company’s shareholders approved a five-for-one share split of the Company’s issued and outstanding Common Shares such that, as a result of the share split, each Common Share will become five Common Shares. The record date for the share split will be May 5, 2021 and the shareholders of record as of the record date will receive, on the payment date of May 13, 2021, four additional shares for every one Common Share held. Proportional adjustments will also be made to outstanding awards under the Company’s stock-based compensation plans in order to reflect the share split. Pro forma earnings per share amounts are disclosed in the Company’s Interim Consolidated Statements of Income to show the effect of the share split.

Summary of Rail Data

	First Quarter
Financial (millions, except per share data)	2021		2020		Total Change		% Change

Revenues
Freight	$	1,918	$	2,000	$	(82)	(4)
Non-freight	41		43		(2)		(5)
Total revenues	1,959		2,043		(84)		(4)

Operating expenses
Compensation and benefits	405		398		7		2
Fuel	206		212		(6)		(3)
Materials	59		59		—		—
Equipment rents	33		36		(3)		(8)
Depreciation and amortization	202		192		10		5
Purchased services and other	274		312		(38)		(12)
Total operating expenses	1,179		1,209		(30)		(2)

Operating income	780		834		(54)		(6)

Less:
Other (income) expense	(28)		211		(239)		(113)
Other components of net periodic benefit recovery	(95)		(85)		(10)		12
Net interest expense	110		114		(4)		(4)

Income before income tax expense	793		594		199		34

Income tax expense	191		185		6		3

Net income	$	602	$	409	$	193	47
Operating ratio (%)	60.2		59.2		1.0		100 bps

Basic earnings per share	$	4.52	$	2.99	$	1.53	51

Diluted earnings per share	$	4.50	$	2.98	$	1.52	51

Earnings per share – Pro forma post-split basis
Basic earnings per share	$	0.90	$	0.60	$	0.30	51

Diluted earnings per share	$	0.90	$	0.60	$	0.30	51

Shares Outstanding
Weighted average number of basic shares outstanding (millions)	133.3		136.7		(3.4)		(2)
Weighted average number of diluted shares outstanding (millions)	133.9		137.2		(3.3)		(2)

Foreign Exchange
Average foreign exchange rate (US$/Canadian$)	0.79		0.75		0.04		5
Average foreign exchange rate (Canadian$/US$)	1.27		1.34		(0.07)		(5)

Summary of Rail Data (Continued)

	First Quarter
Commodity Data	2021		2020		Total Change		% Change	FX Adjusted % Change⁽¹⁾

Freight Revenues (millions)
– Grain	$	448	$	418	$	30	7	10
– Coal	163		150		13		9	9
– Potash	101		112		(11)		(10)	(7)
– Fertilizers and sulphur	77		70		7		10	15
– Forest products	80		78		2		3	8
– Energy, chemicals and plastics	388		491		(103)		(21)	(19)
– Metals, minerals and consumer products	159		189		(30)		(16)	(12)
– Automotive	108		87		21		24	32
– Intermodal	394		405		(11)		(3)	(2)

Total Freight Revenues	$	1,918	$	2,000	$	(82)	(4)	(2)

Freight Revenue per Revenue Ton-Mile (“RTM”) (cents)
– Grain	4.16		4.64		(0.48)		(10)	(8)
– Coal	3.09		3.38		(0.29)		(9)	(8)
– Potash	2.67		2.71		(0.04)		(1)	2
– Fertilizers and sulphur	6.07		6.39		(0.32)		(5)	(1)
– Forest products	5.87		6.11		(0.24)		(4)	1
– Energy, chemicals and plastics	5.43		5.55		(0.12)		(2)	1
– Metals, minerals and consumer products	6.36		6.82		(0.46)		(7)	(3)
– Automotive	21.26		26.69		(5.43)		(20)	(15)
– Intermodal	5.92		5.54		0.38		7	8

Total Freight Revenue per RTM	4.88		5.10		(0.22)		(4)	(2)

Freight Revenue per Carload
– Grain	$	3,849	$	4,155	$	(306)	(7)	(5)
– Coal	2,264		2,351		(87)		(4)	(3)
– Potash	2,936		3,077		(141)		(5)	(2)
– Fertilizers and sulphur	4,724		4,636		88		2	6
– Forest products	4,571		4,309		262		6	12
– Energy, chemicals and plastics	4,450		4,823		(373)		(8)	(5)
– Metals, minerals and consumer products	2,855		3,247		(392)		(12)	(8)
– Automotive	3,234		3,085		149		5	11
– Intermodal	1,524		1,509		15		1	2

Total Freight Revenue per Carload	$	2,774	$	2,896	$	(122)	(4)	(2)

⁽¹⁾	This earnings measure has no standardized meaning prescribed by GAAP and, therefore, is unlikely to be comparable to similar measures presented by other companies. This measure is defined and reconciled in Non-GAAP Measures of this Earnings Release.

Summary of Rail Data (Continued)

	First Quarter
Commodity Data (Continued)	2021	2020	Total Change	% Change

Millions of RTM
– Grain	10,773	9,016	1,757	19
– Coal	5,280	4,435	845	19
– Potash	3,786	4,138	(352)	(9)
– Fertilizers and sulphur	1,269	1,095	174	16
– Forest products	1,363	1,277	86	7
– Energy, chemicals and plastics	7,142	8,849	(1,707)	(19)
– Metals, minerals and consumer products	2,499	2,771	(272)	(10)
– Automotive	508	326	182	56
– Intermodal	6,653	7,311	(658)	(9)

Total RTMs	39,273	39,218	55	—

Carloads (thousands)
– Grain	116.4	100.6	15.8	16
– Coal	72.0	63.8	8.2	13
– Potash	34.4	36.4	(2.0)	(5)
– Fertilizers and sulphur	16.3	15.1	1.2	8
– Forest products	17.5	18.1	(0.6)	(3)
– Energy, chemicals and plastics	87.2	101.8	(14.6)	(14)
– Metals, minerals and consumer products	55.7	58.2	(2.5)	(4)
– Automotive	33.4	28.2	5.2	18
– Intermodal	258.5	268.4	(9.9)	(4)

Total Carloads	691.4	690.6	0.8	—

	First Quarter
	2021		2020		Total Change		% Change	FX Adjusted % Change⁽¹⁾

Operating Expenses (millions)
Compensation and benefits	$	405	$	398	$	7	2	3
Fuel	206		212		(6)		(3)	1
Materials	59		59		—		—	2
Equipment rents	33		36		(3)		(8)	(3)
Depreciation and amortization	202		192		10		5	7
Purchased services and other	274		312		(38)		(12)	(10)

Total Operating Expenses	$	1,179	$	1,209	$	(30)	(2)	—

⁽¹⁾	This earnings measure has no standardized meaning prescribed by GAAP and, therefore, is unlikely to be comparable to similar measures presented by other companies. This measure is defined and reconciled in Non-GAAP Measures of this Earnings Release.

Summary of Rail Data (Continued)

	First Quarter
	2021	2020	Total Change	% Change

Operations Performance

Gross ton-miles (“GTMs”) (millions)	71,326	71,309	17	—
Train miles (thousands)	7,803	8,367	(564)	(7)
Average train weight – excluding local traffic (tons)	9,795	9,188	607	7
Average train length – excluding local traffic (feet)	7,972	7,409	563	8
Average terminal dwell (hours)	7.4	6.2	1.2	19
Average train speed (miles per hour, or “mph”)⁽¹⁾	20.9	21.6	(0.7)	(3)
Locomotive productivity (GTMs / operating horsepower)⁽²⁾	201	201	—	—
Fuel efficiency⁽³⁾	0.958	0.971	(0.013)	(1)
U.S. gallons of locomotive fuel consumed (millions)⁽⁴⁾	68.3	69.3	(1.0)	(1)
Average fuel price (U.S. dollars per U.S. gallon)	2.39	2.33	0.06	3

Total Employees and Workforce

Total employees (average)⁽⁵⁾	12,061	12,486	(425)	(3)
Total employees (end of period)⁽⁵⁾	12,398	12,330	68	1
Workforce (end of period)⁽⁶⁾	12,426	12,366	60	—

Safety Indicators ⁽⁷⁾

FRA personal injuries per 200,000 employee-hours	1.20	1.13	0.07	6
FRA train accidents per million train-miles	1.28	0.87	0.41	47

⁽¹⁾	Average train speed is defined as a measure of the line-haul movement from origin to destination including terminal dwell hours. It is calculated by dividing the total train miles travelled by the total train hours operated. This calculation does not include delay time related to customers or foreign railroads and excludes the time and distance travelled by: i) trains used in or around CP’s yards; ii) passenger trains; and iii) trains used for repairing track.
⁽²⁾	Locomotive productivity is defined as daily GTMs divided by daily average operating horsepower. Operating horsepower excludes units offline, tied up or in storage, or in use on other railways, and includes foreign units online.
⁽³⁾	Fuel efficiency is defined as U.S. gallons of locomotive fuel consumed per 1,000 GTMs.
⁽⁴⁾	Includes gallons of fuel consumed from freight, yard and commuter service but excludes fuel used in capital projects and other non-freight activities.
⁽⁵⁾	An employee is defined as an individual currently engaged in full-time, part-time, or seasonal employment with CP.
⁽⁶⁾	Workforce is defined as total employees plus contractors and consultants.
⁽⁷⁾	Federal Railroad Administration (“FRA”) personal injuries per 200,000 employee-hours for the three months ended March 31, 2020, previously reported as 1.20, was restated to 1.13 in this Earnings Release. FRA train accidents per million train-miles for the three months ended March 31, 2020, previously reported as 0.99, was restated to 0.87 in this Earnings Release. These restatements reflect new information available within specified periods stipulated by the FRA but that exceed the Company’s financial reporting timeline.

Non-GAAP Measures

The Company presents Non-GAAP measures to provide a basis for evaluating underlying earnings and liquidity trends in the Company’s business that can be compared with the results of operations in prior periods. In addition, these Non-GAAP measures facilitate a multi-period assessment of long-term profitability, allowing management and other external users of the Company’s consolidated financial information to compare profitability on a long-term basis, including assessing future profitability, with that of the Company’s peers.

These Non-GAAP measures have no standardized meaning and are not defined by accounting principles generally accepted in the United States of America (“GAAP”) and, therefore, may not be comparable to similar measures presented by other companies. The presentation of these Non-GAAP measures is not intended to be considered in isolation from, as a substitute for, or as superior to the financial information presented in accordance with GAAP.

Non-GAAP Performance Measures

The Company uses adjusted earnings results including Adjusted income, Adjusted diluted earnings per share, Adjusted operating income and Adjusted operating ratio to evaluate the Company’s operating performance and for planning and forecasting future business operations and future profitability. These Non-GAAP measures provide meaningful supplemental information regarding operating results because they exclude certain significant items that are not considered indicative of future financial trends either by nature or amount. As a result, these items are excluded for management assessment of operational performance, allocation of resources and preparation of annual budgets. These significant items may include, but are not limited to, restructuring and asset impairment charges, individually significant gains and losses from sales of assets, acquisition-related costs, the foreign exchange (“FX”) impact of translating the Company’s debt and lease liabilities (including borrowings under the credit facility and foreign exchange forward contracts), discrete tax items, changes in income tax rates, changes to an uncertain tax item, and certain items outside the control of management. These items may not be non-recurring. However, excluding these significant items from GAAP results allows for a consistent understanding of the Company’s consolidated financial performance when performing a multi-period assessment including assessing the likelihood of future results. Accordingly, these Non-GAAP financial measures may provide insight to investors and other external users of the Company’s consolidated financial information.

Significant items that impact reported earnings for the first three months of 2021, the twelve months of 2020, and the last nine months of 2019 include:

2021:

Acquisition-related costs of $36 million associated with the pending Kansas City Southern (“KCS”) transaction ($27 million after current and deferred taxes), including an expense of $33 million recognized in Purchased services and other and $3 million recognized in Other (income) expense, that unfavourably impacted Diluted EPS by 20 cents; and
a non-cash gain of $33 million ($29 million after deferred tax) due to FX translation of debt and lease liabilities that favourably impacted Diluted EPS by 22 cents.

2020:

in the fourth quarter, a deferred tax recovery of $29 million due to a change relating to a tax return filing election for the state of North Dakota that favourably impacted Diluted EPS by 22 cents; and
during the course of the year, a net non-cash gain of $14 million ($12 million after deferred tax) due to FX translation of debt and lease liabilities that favourably impacted Diluted EPS by 9 cents as follows:

in the fourth quarter, a $103 million gain ($90 million after deferred tax) that favourably impacted Diluted EPS by 67 cents;
in the third quarter, a $40 million gain ($38 million after deferred tax) that favourably impacted Diluted EPS by 29 cents;
in the second quarter, an $86 million gain ($82 million after deferred tax) that favourably impacted Diluted EPS by 59 cents; and
in the first quarter, a $215 million loss ($198 million after deferred tax) that unfavourably impacted Diluted EPS by $1.44.

2019:

in the fourth quarter, a deferred tax expense of $24 million as a result of a provision for an uncertain tax item of a prior period that unfavourably impacted Diluted EPS by 17 cents;
in the second quarter, a deferred tax recovery of $88 million due to the change in the Alberta provincial corporate income tax rate that favourably impacted Diluted EPS by 63 cents; and
a net non-cash gain of $49 million ($44 million after deferred tax) due to FX translation of debt and lease liabilities that favourably impacted Diluted EPS by 31 cents as follows:

in the fourth quarter, a $37 million gain ($32 million after deferred tax) that favourably impacted Diluted EPS by 22 cents;
in the third quarter, a $25 million loss ($22 million after deferred tax) that unfavourably impacted Diluted EPS by 15 cents; and
in the second quarter, a $37 million gain ($34 million after deferred tax) that favourably impacted Diluted EPS by 24 cents.

2021 Outlook

With a 2021 plan that encompasses profitable sustainable growth, CP expects high single-digit RTM growth and double-digit Adjusted diluted EPS growth. CP’s expectations for Adjusted diluted EPS growth in 2021 are based on Adjusted diluted EPS of $17.67 in 2020. For the purposes of this outlook, CP assumes an effective tax rate of 24.6 percent. CP estimates other components of net periodic benefit recovery to increase by approximately $40 million versus 2020. As CP continues to invest in service, productivity and safety, the Company plans to invest approximately $1.55 billion in capital programs in 2021. CP’s 2021 guidance does not include any potential impacts from the pending KCS transaction.

Although CP has provided a forward-looking Non-GAAP measure (Adjusted diluted EPS), management is unable to reconcile, without unreasonable efforts, the forward-looking Adjusted diluted EPS to the most comparable GAAP measure, due to unknown variables and uncertainty related to future results. These unknown variables may include unpredictable transactions of significant value. In recent years, CP has recognized acquisition-related costs, changes in income tax rates and a change to an uncertain tax item. 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 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 in this Earnings Release for further discussion.

Reconciliation of GAAP Performance Measures to Non-GAAP Performance Measures

The following tables reconcile the most directly comparable measures presented in accordance with GAAP to the Non-GAAP measures:

Adjusted income is calculated as Net income reported on a GAAP basis adjusted for significant items.

	For the three months ended March 31				For the twelve months ended December 31
(in millions of Canadian dollars)	2021		2020		2020
Net income as reported	$	602	$	409	$	2,444
Less significant items (pre-tax):
Acquisition-related costs	(36)		—		—
Impact of FX translation gain (loss) on debt and lease liabilities	33		(215)		14
Add:
Tax effect of adjustments⁽¹⁾	(5)		(17)		2
Income tax rate changes	—		—		(29)
Adjusted income	$	600	$	607	$	2,403

⁽¹⁾

The tax effect of adjustments was calculated as the pre-tax effect of the adjustments multiplied by the applicable tax rate for the above items of 223.54% for the three months ended March 31, 2021, 8.17% for the three months ended March 31, 2020, and 13.58% for the twelve months ended December 31, 2020, respectively. The applicable tax rates reflect the taxable jurisdictions and nature, being on account of capital or income, of the significant items.

Adjusted diluted earnings per share is calculated using Adjusted income, as defined above, divided by the weighted-average diluted number of Common Shares outstanding during the period as determined in accordance with GAAP.

	For the three months ended March 31				For the twelve months ended December 31
	2021		2020		2020
Diluted earnings per share as reported	$	4.50	$	2.98	$	17.97
Less significant items (pre-tax):
Acquisition-related costs	(0.27)		—		—
Impact of FX translation gain (loss) on debt and lease liabilities	0.25		(1.57)		0.10
Add:
Tax effect of adjustments⁽¹⁾	(0.04)		(0.13)		0.01
Income tax rate changes	—		—		(0.21)
Adjusted diluted earnings per share	$	4.48	$	4.42	$	17.67

⁽¹⁾

Adjusted operating income is calculated as Operating income reported on a GAAP basis less significant items.

	For the three months ended March 31
(in millions of Canadian dollars)	2021		2020
Operating income as reported	$	780	$	834
Less significant item:
Acquisition-related costs	(33)		—
Adjusted operating income	$	813	$	834

Adjusted operating ratio excludes those significant items that are reported within operating income.

	For the three months ended March 31
	2021	2020
Operating ratio as reported	60.2%	59.2%
Less significant item:
Acquisition-related costs	1.7%	—%
Adjusted operating ratio	58.5%	59.2%

Adjusted Return on Invested Capital (“Adjusted ROIC”)

Adjusted ROIC is calculated as Adjusted return divided by Adjusted average invested capital. Adjusted return is defined as Net income adjusted for interest expense, tax effected at the Company’s adjusted annualized effective tax rate, and significant items in the Company’s Consolidated Financial Statements, tax effected at the applicable tax rate. Adjusted average invested capital is defined as the sum of total Shareholders’ equity, Long-term debt, and Long-term debt maturing within one year, as presented in the Company’s Consolidated Financial Statements, each averaged between the beginning and ending balance over a rolling 12-month period, adjusted for the impact of significant items, tax effected at the applicable tax rate, on closing balances as part of this average. Adjusted ROIC excludes significant items reported in the Company’s Consolidated Financial Statements, as these significant items are not considered indicative of future financial trends either by nature or amount, and excludes interest expense, net of tax, to incorporate returns on the Company’s overall capitalization. Adjusted ROIC is a performance measure that measures how productively the Company uses its long-term capital investments, representing critical indicators of good operating and investment decisions made by management, and is an important performance criteria in determining certain elements of the Company’s long-term incentive plan. Adjusted ROIC is reconciled below from Return on average shareholders’ equity, the most comparable measure calculated in accordance with GAAP.

Calculation of Return on average shareholders’ equity

	For the twelve months ended March 31
(in millions of Canadian dollars, except for percentages)	2021		2020
Net income as reported	$	2,637	$	2,415
Average shareholders’ equity	$	7,411	$	6,884
Return on average shareholders’ equity	35.6%		35.1%

Reconciliation of Net income to Adjusted return

	For the twelve months ended March 31
(in millions of Canadian dollars)	2021		2020
Net income as reported	$	2,637	$	2,415
Add:
Net interest expense	454		448
Tax on interest⁽¹⁾	(112)		(112)
Significant items (pre-tax):
Acquisition-related costs	36		—
Impact of FX translation (gain) loss on debt and lease liabilities	(262)		166
Tax on significant items⁽²⁾	14		(12)
Income tax rate changes	(29)		(88)
Provision for uncertain tax item	—		24
Adjusted return	$	2,738	$	2,841

⁽¹⁾	Tax was calculated at the adjusted annualized effective tax rate of 24.55% and 24.85% for the twelve months ended March 31, 2021 and 2020, respectively.
⁽²⁾	Tax was calculated as the pre-tax effect of the adjustments multiplied by the applicable tax rate for the above items of 5.92% and 7.61% for the twelve months ended March 31, 2021 and 2020, respectively. The applicable tax rates reflect the taxable jurisdictions and nature, being on account of capital or income, of the significant items.

Reconciliation of Average shareholders’ equity to Adjusted average invested capital

	For the twelve months ended March 31
(in millions of Canadian dollars)	2021		2020
Average shareholders’ equity	$	7,411	$	6,884
Average Long-term debt, including long-term debt maturing within one year	9,905		9,497
	$	17,316	$	16,381
Less:
Significant item (pre-tax):
Acquisition-related costs	(18)		—
Tax on significant item⁽¹⁾	4		—
Income tax rate changes	15		44
Provision for uncertain tax item	—		(12)
Adjusted average invested capital	$	17,315	$	16,349

⁽¹⁾	Tax was calculated at the pre-tax effect of the adjustment multiplied by the applicable tax rate of 26.13% for the twelve months ended March 31, 2021. The applicable tax rate reflects the taxable jurisdiction and nature, being on account of capital or income, of the significant item.

Calculation of Adjusted ROIC

	For the twelve months ended March 31
(in millions of Canadian dollars, except for percentages)	2021		2020
Adjusted return	$	2,738	$	2,841
Adjusted average invested capital	$	17,315	$	16,349
Adjusted ROIC	15.8%		17.4%

Free Cash

Free cash is calculated as Cash provided by operating activities, less Cash used in investing activities, adjusted for changes in cash and cash equivalents balances resulting from FX fluctuations and the acquisition-related transaction costs paid in cash related to the pending KCS transaction. Free cash is a measure that management considers to be a valuable indicator of liquidity. Free cash is useful to investors and other external users of the Company’s Consolidated Financial Statements as it assists with the evaluation of the Company’s ability to generate cash to satisfy debt obligations and discretionary activities such as dividends, share repurchase programs, and other strategic opportunities. The acquisition-related transaction costs paid in cash related to the pending KCS transaction are not indicative of investment trends and have also been excluded from Free cash. Free cash should be considered in addition to, rather than as a substitute for, Cash provided by operating activities.

Reconciliation of Cash Provided by Operating Activities to Free Cash

	For the three months ended March 31
(in millions of Canadian dollars)	2021		2020
Cash provided by operating activities	$	582	$	489
Cash used in investing activities	(286)		(362)
Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents	(3)		31
Less:
Acquisition-related costs	(3)		—
Free cash	$	296	$	158

Foreign Exchange Adjusted % Change

FX adjusted % change allows certain financial results to be viewed without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons in the analysis of trends in business performance. Financial result variances at constant currency are obtained by translating the comparable period of the prior year results denominated in U.S. dollars at the foreign exchange rates of the current period.

FX adjusted % changes in revenues are further used in calculating FX adjusted % change in freight revenue per carload and RTM. FX adjusted % changes in revenues are as follows:

	For the three months ended March 31
(in millions of Canadian dollars)	Reported 2021		Reported 2020		Variance due to FX		FX Adjusted 2020		FX Adjusted % Change
Freight revenues by line of business
Grain	$	448	$	418	$	(10)	$	408	10
Coal	163		150		(1)		149		9
Potash	101		112		(3)		109		(7)
Fertilizers and sulphur	77		70		(3)		67		15
Forest products	80		78		(4)		74		8
Energy, chemicals and plastics	388		491		(13)		478		(19)
Metals, minerals and consumer products	159		189		(8)		181		(12)
Automotive	108		87		(5)		82		32
Intermodal	394		405		(5)		400		(2)
Freight revenues	1,918		2,000		(52)		1,948		(2)
Non-freight revenues	41		43		—		43		(5)
Total revenues	$	1,959	$	2,043	$	(52)	$	1,991	(2)

FX adjusted % changes in operating expenses are as follows:

	For the three months ended March 31
(in millions of Canadian dollars)	Reported 2021		Reported 2020		Variance due to FX		FX Adjusted 2020		FX Adjusted % Change
Compensation and benefits	$	405	$	398	$	(5)	$	393	3
Fuel	206		212		(8)		204		1
Materials	59		59		(1)		58		2
Equipment rents	33		36		(2)		34		(3)
Depreciation and amortization	202		192		(3)		189		7
Purchased services and other	274		312		(8)		304		(10)
Total operating expenses	$	1,179	$	1,209	$	(27)	$	1,182	—

FX adjusted % change in operating income is as follows:

	For the three months ended March 31
(in millions of Canadian dollars)	Reported 2021		Reported 2020		Variance due to FX		FX Adjusted 2020		FX Adjusted % Change
Operating income	$	780	$	834	$	(25)	$	809	(4)

Adjusted Net Debt to Adjusted EBITDA Ratio

Adjusted net debt to Adjusted earnings before interest, tax, depreciation and amortization (“EBITDA”) ratio is calculated as Adjusted net debt divided by Adjusted EBITDA. The Adjusted net debt to Adjusted EBITDA ratio is a key credit measure used to assess the Company’s financial capacity. The ratio provides information on the Company’s ability to service its debt and other long-term obligations. The Adjusted net debt to Adjusted EBITDA ratio is reconciled below from the Long-term debt to Net income ratio, the most comparable measure calculated in accordance with GAAP.

Calculation of Long-term Debt to Net Income Ratio

(in millions of Canadian dollars, except for ratios)	2021		2020
Long-term debt including long-term debt maturing within one year as at March 31	$	9,740	$	10,070
Net income for the twelve months ended March 31	2,637		2,415
Long-term debt to Net income ratio	3.7		4.2

Reconciliation of Long-term Debt to Adjusted Net Debt

Adjusted net debt is defined as Long-term debt, Long-term debt maturing within one year and Short-term borrowing as reported on the Company’s Consolidated Balance Sheets adjusted for pension plans deficit, operating lease liabilities recognized on the Company’s Consolidated Balance Sheets, and Cash and cash equivalents.

(in millions of Canadian dollars)	2021		2020
Long-term debt including long-term debt maturing within one year as at March 31	$	9,740	$	10,070
Add:
Pension plans deficit⁽¹⁾	327		300
Operating lease liabilities	284		365
Less:
Cash and cash equivalents	360		247
Adjusted net debt as at March 31	$	9,991	$	10,488

⁽¹⁾	Pension plans deficit is the total funded status of the Pension plans in deficit only.

Reconciliation of Net Income to EBIT, Adjusted EBIT and Adjusted EBITDA

Earnings before interest and tax (“EBIT”) is calculated as Net income before Net interest expense and Income tax expense. Adjusted EBIT excludes significant items reported in both Operating income and Other (income) expense. Adjusted EBITDA is calculated as Adjusted EBIT plus operating lease expense and Depreciation and amortization, less Other components of net periodic benefit recovery.

	For the twelve months ended March 31
(in millions of Canadian dollars)	2021		2020
Net income as reported	$	2,637	$	2,415
Add:
Net interest expense	454		448
Income tax expense	764		752
EBIT	3,855		3,615
Less significant items (pre-tax):
Acquisition-related costs	(36)		—
Impact of FX translation gain (loss) on debt and lease liabilities	262		(166)
Adjusted EBIT	3,629		3,781
Add:
Operating lease expense	76		83
Depreciation and amortization	789		738
Less:
Other components of net periodic benefit recovery	352		369
Adjusted EBITDA	$	4,142	$	4,233

Calculation of Adjusted Net Debt to Adjusted EBITDA Ratio

(in millions of Canadian dollars, except for ratios)	2021		2020
Adjusted net debt as at March 31	$	9,991	$	10,488
Adjusted EBITDA for the twelve months ended March 31	4,142		4,233
Adjusted net debt to Adjusted EBITDA ratio	2.4		2.5

View original content:http://www.prnewswire.com/news-releases/cp-reports-solid-first-quarter-2021-results-positive-momentum-heading-into-the-second-quarter-301274183.html

SOURCE Canadian Pacific

April 21, 2021 4:09 pm

Leading Edge Materials Announces Results of AGM

Vancouver,
April 21
,
2021
– Leading Edge Materials Corp. (“Leading Edge Materials” or the “Company”) (TSXV: LEM) (Nasdaq First North: LEMSE) (OTCQB: LEMIF) announces the voting results from the Company’s Annual General of Shareholders held on Wednesday, April 21, 2021 (the “Meeting“). A total of 44,678,571 common shares were voted, representing 30.40% of the Company’s issued and outstanding common shares. Shareholders voted in favour of setting the number of directors at three (3) and for the re-election of all director nominees.

The percentage of votes cast for each director is as follows:

Nominee	Votes For	% For	Votes Withheld	% Withheld
Lars-Eric Johansson	44,667,423	99.98	11,148	0.02
Daniel Major	44,655,935	99.95	22,636	0.05
Eric Krafft	44,653,935	99.94	24,636	0.06

In addition, shareholders also approved the ratification of the Company’s 10% rolling stock option plan and the appointment of D&H Group LLP, Chartered Professional Accountants, as the auditors of the Company for the ensuing year and the authorization for the directors of the Company to fix their remuneration. The Information Circular is available for download under the Company’s profile on SEDAR at www.sedar.com or on the Company’s website at https://leadingedgematerials.com/investors

Additional details of the results of the Meeting will be provided in a Report of Voting Results to be filed under the Company’s profile on SEDAR at www.sedar.com.

Subsequent to the Meeting, the directors appointed Lars-Eric Johansson as Non-Executive Chairman, Filip Kozlowski as Chief Executive Officer, Sanjay Sawrup as Chief Financial Officer, and Nick DeMare as Corporate Secretary. Messrs. Johansson, Major and Krafft were appointed as members of the Audit Committee.

On behalf of the Board of Directors,

Leading Edge Materials Corp.

Lars-Eric Johansson, Non-Executive Chairman

For further information, please contact the Company at:

[email protected]

www.leadingedgematerials.com

Follow us

Twitter: https://twitter.com/LeadingEdgeMtls
Linkedin: https://www.linkedin.com/company/leading-edge-materials-corp/

About Leading Edge Materials

Leading Edge Materials is a Canadian public company focused on developing a portfolio of critical raw material projects located in the European Union. Critical raw materials are determined as such by the European Union based on their economic importance and supply risk. They are directly linked to high growth technologies such as batteries for electromobility and energy storage and permanent magnets for electric motors and wind power that underpin the clean energy transition towards climate neutrality. The portfolio of projects includes the 100% owned Woxna Graphite mine (Sweden), Norra Kärr HREE project (Sweden) and the 51% owned Bihor Sud Nickel Cobalt exploration alliance (Romania).

Additional Information

The Company’s consolidated financial statements and related management’s discussion and analysis are available on the Company’s website at www.leadingedgematerials.com or under its profile on SEDAR at www.sedar.com

The information was submitted for publication through the agency of the contact person set out above, on April 21, 2021 at 1:05 pm Vancouver time.

Leading Edge Materials is listed on the TSXV under the symbol “LEM”, OTCQB under the symbol “LEMIF” and Nasdaq First North Stockholm under the symbol “LEMSE”. Mangold Fondkommission AB is the Company’s Certified Adviser on Nasdaq First North and may be contacted via email [email protected] or by phone +46 (0) 8 5030 1550.

Reader Advisory

This news release may contain statements which constitute “forward-looking information”, including statements regarding the plans, intentions, beliefs and current expectations of the Company, its directors, or its officers with respect to the future business activities of the Company. The words “may”, “would”, “could”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” and similar expressions, as they relate to the Company, or its management, are intended to identify such forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future business activities and involve risks and uncertainties, and that the Company’s future business activities may differ materially from those in the forward-looking statements as a result of various factors,
including,
but not limited to,
the potential impact of epidemics, pandemics or other public health crises, including the current coronavirus pandemic known as COVID-19 on the Company’s business, operations and financial condition
,
fluctuations in market prices, successes of the operations of the Company, continued availability of capital and financing and general economic, market or business
conditions
. There can be no assurances that such
information
will prove accurate and, therefore, readers are advised to rely on their own evaluation of such uncertainties. The Company does not assume
any obligation to update any forward-looking information except as required
under the applicable securities laws.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accept responsibility for the adequacy or accuracy of this news release.

Attachments

April 21, 2021 4:09 pm

BBSI Sets First Quarter 2021 Conference Call for Wednesday, May 5, 2021, at 5:00 p.m. ET

VANCOUVER, Wash., April 21, 2021 (GLOBE NEWSWIRE) — Barrett Business Services, Inc. (BBSI) (NASDAQ: BBSI), a leading provider of business management solutions, will conduct a conference call on Wednesday, May 5, 2021, at 5:00 p.m. Eastern time (2:00 p.m. Pacific time) to discuss its financial results for the first quarter ended March 31, 2021. The company will report its financial results in a press release prior to the conference call.

BBSI’s CEO Gary Kramer and CFO Anthony Harris will host the conference call, followed by a question and answer period.

Date: Wednesday, May 5, 2021
Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time)
Toll-free dial-in number: 1-877-407-4018
International dial-in number: 1-201-689-8471
Conference ID: 13718970

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at 1-949-574-3860.

The conference call will be broadcast live and available for replay here and via the Investors section of the BBSI website at www.bbsi.com.

A replay of the conference call will be available after 8:00 p.m. Eastern time on the same day through June 5, 2021.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 13718970

About BBSI

BBSI (NASDAQ: BBSI) is a leading provider of business management solutions, combining human resource outsourcing and professional management consulting to create a unique operational platform that differentiates it from competitors. The Company’s integrated platform is built upon expertise in payroll processing, employee benefits, workers’ compensation coverage, risk management and workplace safety programs, and human resource administration. BBSI’s partnerships help businesses of all sizes improve the efficiency of their operations. The Company works with more than 7,500 clients across all lines of business in 39 states. For more information, please visit www.bbsi.com.

Investor Relations:

Gateway Investor Relations
Cody Slach
Tel 1-949-574-3860
[email protected]

April 21, 2021 4:09 pm

Alpine Income Property Trust Increases Quarterly Dividend by 4.2% and Declares Dividend for the Second Quarter 2021

DAYTONA BEACH, Fla., April 21, 2021 (GLOBE NEWSWIRE) — Alpine Income Property Trust, Inc. (NYSE: PINE) (the “Company”) announced today that its Board of Directors has authorized, and the Company has declared, an increase in the Company’s quarterly cash dividend to $0.25 per share of common stock for the second quarter of 2021 from its previous quarterly cash dividend of $0.24 per share of common stock. The dividend is payable on June 30, 2021 to stockholders of record as of the close of business on June 21, 2021. The 2021 second quarter cash dividend represents a 4.2% increase over the Company’s previous quarterly dividend and an annualized yield of approximately 5.6% based on the closing price of the common stock on April 20, 2021.

About Alpine Income Property Trust, Inc.

Alpine Income Property Trust, Inc. (NYSE: PINE) is a publicly traded real estate investment trust that acquires, owns and operates a portfolio of high-quality single-tenant net leased commercial income properties.

We encourage you to review our most recent investor presentation which is available on our website at http://www.alpinereit.com.

Safe Harbor

This press release may contain “forward-looking statements.” Forward-looking statements include statements that may be identified by words such as “could,” “may,” “might,” “will,” “likely,” “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “continues,” “projects” and similar references to future periods, or by the inclusion of forecasts or projections. Forward-looking statements are based on the Company’s current expectations and assumptions regarding capital market conditions, the Company’s business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, the Company’s actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include general business and economic conditions, continued volatility and uncertainty in the credit markets and broader financial markets, risks inherent in the real estate business, including tenant defaults, potential liability relating to environmental matters, illiquidity of real estate investments and potential damages from natural disasters, the impact of the COVID-19 Pandemic on the Company’s business and the business of its tenants and the impact on the U.S. economy and market conditions generally, other factors affecting the Company’s business or the business of its tenants that are beyond the control of the Company or its tenants, and the factors set forth under “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Any forward-looking statement made in this press release speaks only as of the date on which it is made. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

Contact:

Matthew M. Partridge
Senior Vice President, Chief Financial Officer & Treasurer
(386) 944-5643
[email protected]

April 21, 2021 4:09 pm

Ascendis Pharma A/S Announces Presentations for TransCon™ hGH at Upcoming Medical Conferences

COPENHAGEN, Denmark, April 21, 2021 (GLOBE NEWSWIRE) — Ascendis Pharma A/S (Nasdaq: ASND), a biopharmaceutical company that utilizes its innovative TransCon technologies to address unmet medical needs, today announced presentations featuring TransCon hGH (lonapegsomatropin) at two upcoming medical conferences: Pediatric Endocrinology Nursing Society (PENS) national conference, taking place virtually April 21-23, and the Pediatric Endocrine Society (PES) annual meeting, taking place virtually April 30 – May 3, 2021.

“We look forward to presenting the latest data on lonapegsomatropin, our investigational once-weekly growth hormone, at PENS and PES, two of the leading medical conferences focused on pediatric endocrinology,” said Mark Bach, M.D., Ph.D., Senior Vice President of Endocrine Medical Sciences at Ascendis Pharma.

“We will present the two-year follow-up data for lonapegsomatropin which show durable results in children treated for pediatric growth hormone deficiency (GHD). In addition, we will present a model which can estimate the average weekly insulin-like growth factor 1 (IGF-1) level from a single IGF-1 sample in children with GHD treated with lonapegsomatropin. This tool may help physicians effectively manage patients on lonapegsomatropin therapy following regulatory approval,” continued Dr. Bach.

2021 PENS Virtual National Conference: Presentation Details

Poster Presentation
Title	Date/Time
Continued Efficacy and Safety with up to 2 Years of Treatment with Lonapegsomatropin (TransCon hGH) in Children with GHD.	Poster Number: 6 Poster Session April 23, 2021 1:30 – 2:00 p.m. Eastern Time

2021 PES Virtual Annual Meeting: Presentation Details

Poster Presentations
Title	Date/Time
Lonapegsomatropin (TransCon hGH) in Children with Growth Hormone Deficiency: Efficacy and Safety of up to 2 Years of Treatment.	Poster Number: 154 Poster 2 Viewing Session: Growth and GH/IGF Axis May 1, 2021 5:45- 6:45 p.m. Eastern Time
Estimating the weekly average IGF-1 from a single IGF-1 sample for children with GHD treated with lonapegsomatropin.	Poster Number: 156 Poster 2 Viewing Session: Growth and GH/IGF Axis May 1, 2021 5:45- 6:45 p.m. Eastern Time

The posters will be available on the Ascendis website under Selected Publications in the Pipeline section: https://ascendispharma.us/pipeline/publications/. If you are a healthcare provider who would like more information, please contact: [email protected].

About TransCon™ Technology

TransCon refers to “transient conjugation.” The proprietary TransCon platform is an innovative technology to create new therapies that are designed to optimize therapeutic effect, including efficacy, safety and dosing frequency. TransCon molecules have three components: an unmodified parent drug, an inert carrier that protects it, and a linker that temporarily binds the two. When bound, the carrier inactivates and shields the parent drug from clearance. When injected into the body, physiologic conditions (e.g., pH and temperature) initiate the release of the active, unmodified parent drug in a predictable manner. Because the parent drug is unmodified, its original mode of action is expected to be maintained. TransCon technology can be applied broadly to a protein, peptide or small molecule in multiple therapeutic areas, and can be used systemically or locally.

About Ascendis Pharma A/S

Ascendis Pharma is applying its innovative platform technology to build a leading, fully integrated biopharma company focused on making a meaningful difference in patients’ lives. Guided by its core values of patients, science and passion, the company utilizes its TransCon technologies to create new and potentially best-in-class therapies.

Ascendis Pharma currently has a pipeline of three independent endocrinology rare disease product candidates and one oncology product candidate in clinical development. The company continues to expand into additional therapeutic areas to address unmet patient needs.

Ascendis is headquartered in Copenhagen, Denmark, with additional offices in Heidelberg and Berlin, Germany, in Palo Alto and Redwood City, California, and in Princeton, New Jersey.

Please visit www.ascendispharma.com (for global information) or www.ascendispharma.us (for U.S. information).

Forward-Looking Statements

This press release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this press release regarding Ascendis’ future operations, plans and objectives of management are forward-looking statements. Examples of such statements include, but are not limited to, statements relating to (i) Ascendis’ plans to present follow-up data for lonapegsomatropin and a model to estimate the weekly average IGF-1 level from a single IGF-1 sample in children with GHD treated with lonapegsomatropin, (ii) Ascendis’ ability to apply its platform technology to build a leading, fully integrated biopharmaceutical company, (iii) Ascendis’ product pipeline and expansion into additional therapeutic areas and (iv) Ascendis’ expectations regarding its ability to utilize its TransCon technologies to create new and potentially best-in-class therapies. Ascendis may not actually achieve the plans, carry out the intentions or meet the expectations or projections disclosed in the forward-looking statements and you should not place undue reliance on these forward-looking statements. Actual results or events could differ materially from the plans, intentions, expectations and projections disclosed in the forward-looking statements. Various important factors could cause actual results or events to differ materially from the forward-looking statements that Ascendis makes, including the following: unforeseen safety or efficacy results in its oncology programs, TransCon hGH, TransCon PTH and TransCon CNP or other development programs; unforeseen expenses related to the development and potential commercialization of its oncology programs, TransCon hGH, TransCon PTH and TransCon CNP or other development programs, selling, general and administrative expenses, other research and development expenses and Ascendis’ business generally; delays in the development of its oncology programs, TransCon hGH, TransCon PTH and TransCon CNP or other development programs related to manufacturing, regulatory requirements, speed of patient recruitment or other unforeseen delays; dependence on third party manufacturers to supply study drug for planned clinical studies; Ascendis’ ability to obtain additional funding, if needed, to support its business activities and the effects on its business from the worldwide COVID-19 pandemic. For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to Ascendis’ business in general, see Ascendis’ Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission (SEC) on March 10, 2021 and Ascendis’ other future reports filed with, or submitted to, the SEC. Forward-looking statements do not reflect the potential impact of any future in-licensing, collaborations, acquisitions, mergers, dispositions, joint ventures, or investments that Ascendis may enter into or make. Ascendis does not assume any obligation to update any forward-looking statements, except as required by law.

Ascendis, Ascendis Pharma, the Ascendis Pharma logo, the company logo and TransCon are trademarks owned by the Ascendis Pharma Group. © April 2021 Ascendis Pharma A/S.

Investor contacts:	Media contact:
Tim Lee	Ami Knoefler
Ascendis Pharma	Ascendis Pharma
(650) 374-6343	(650) 739-9952
[email protected]	[email protected]

Patti Bank
Westwicke Partners
(415) 513-1284
[email protected]
[email protected]

April 21, 2021 4:09 pm

ALX Oncology to Present ALX148 Clinical Data at the ESMO 23rd World Congress on Gastrointestinal Cancer

Updated results will be presented from ASPEN-01, the ongoing Phase 1b Study of ALX148 in combination trastuzumab, ramucirumab and paclitaxel in patients with gastric or gastroesophageal junction cancer

BURLINGAME, Calif., April 21, 2021 (GLOBE NEWSWIRE) — ALX Oncology Holdings Inc., (“ALX Oncology”) (Nasdaq: ALXO), a clinical-stage immuno-oncology company developing therapies that block the CD47 checkpoint pathway, today announced that our Phase 1b study of ALX148 in patients with advanced gastric or gastroesophageal junction cancer has been selected for a short oral presentation at the ESMO 23^rd World Congress on Gastrointestinal Cancer to be held virtually from June 30 – July 3, 2021.

Oral Presentation Information

Title: ASPEN-01: A phase 1 study of ALX148, a CD47 blocker, in combination with trastuzumab, ramucirumab and paclitaxel in patients with 2nd line HER2-positive advanced gastric or gastroesophageal junction (G/GEJ) cancer

Abstract Number: SO-31

Session Name: Session X: Esophageal and Gastric Cancers

Date and Time: Saturday, July 3, 2021, 15:01 – 15:08 CEST

About ALX Oncology

ALX Oncology is a publicly traded, clinical-stage immuno-oncology company focused on helping patients fight cancer by developing therapies that block the CD47 checkpoint pathway and bridge the innate and adaptive immune system. ALX Oncology’s lead product candidate, ALX148, is a next generation CD47 blocking therapeutic that combines a high-affinity CD47 binding domain with an inactivated, proprietary Fc domain. ALX148 has demonstrated promising clinical responses across a range of hematologic and solid malignancies in combination with a number of leading anti-cancer agents. ALX Oncology intends to continue clinical development of ALX148 for the treatment of a range of solid tumor indications as well as MDS and AML. For more information, please visit ALX Oncology’s website at www.alxoncology.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements are based on ALX Oncology’s beliefs and assumptions and on information currently available to it on the date of this press release. Forward-looking statements may involve known and unknown risks, uncertainties and other factors that may cause ALX Oncology’s actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. These and other risks are described more fully in ALX Oncology’s filings with the Securities and Exchange Commission (“SEC”), including ALX Oncology’s Annual Report on Form 10-K, filed with the SEC on March 18, 2021, and other documents ALX Oncology subsequently files with the SEC from time to time. Except to the extent required by law, ALX Oncology undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made.

Investor Contact:

Peter Garcia
Chief Financial Officer, ALX Oncology
(650) 466-7125 Ext. 113
[email protected]

Argot Partners
(212)-600-1902
[email protected]

Media Contact:

Karen Sharma
MacDougall
(781) 235-3060
[email protected]

April 21, 2021 4:09 pm

OrthoPediatrics Corp. to Report First Quarter 2021 Financial Results on May 5, 2021

Conference Call to Discuss Results on May 6, 2021 at 8:00 a.m. ET

WARSAW, Ind., April 21, 2021 (GLOBE NEWSWIRE) — OrthoPediatrics Corp. (“OrthoPediatrics”) (NASDAQ: KIDS), a company focused exclusively on advancing the field of pediatric orthopedics, announced today that the Company is scheduled to release its first quarter 2021 financial results on Wednesday, May 5, 2021, after the market closes.

OrthoPediatrics will host a conference call on Thursday, May 6, 2021, at 8:00 a.m. ET to discuss the results. The dial-in numbers are (888) 771-4371 for domestic callers and (847) 585-4405 for international callers. The conference ID number is 50152332. A live webcast of the conference call will be available online from the investor relations page of the OrthoPediatrics’ corporate website at www.orthopediatrics.com.

A replay of the webcast will remain available on OrthoPediatrics’ website, www.orthopediatrics.com, until the Company releases its second quarter 2021 financial results. In addition, a telephonic replay of the call will be available until May 13, 2021. The replay dial-in numbers are (855) 859-2056 for domestic callers and (404) 537-3406 for international callers. Please use the replay conference ID number 50152332.

About OrthoPediatrics Corp.

Founded in 2006, OrthoPediatrics is an orthopedic company focused exclusively on advancing the field of pediatric orthopedics. As such it has developed the most comprehensive product offering to the pediatric orthopedic market to improve the lives of children with orthopedic conditions. OrthoPediatrics currently markets 35 surgical systems that serve three of the largest categories within the pediatric orthopedic market. This product offering spans trauma and deformity, scoliosis, and sports medicine/other procedures. OrthoPediatrics’ global sales organization is focused exclusively on pediatric orthopedics and distributes its products in the United States and 44 countries outside the United States. For more information, please visit www.orthopediatrics.com.

Investor Contact
The Ruth Group
Christine Petraglia / James Salierno
Tel: 917-633-8980 / 973-255-8361
[email protected] / [email protected]

April 21, 2021 4:09 pm

Century Aluminum Publishes its Inaugural Annual Sustainability Report

CHICAGO, April 21, 2021 (GLOBE NEWSWIRE) — Century Aluminum Company (NASDAQ: CENX) (“Century”) announced today the release and publication of its inaugural annual Sustainability Report. This report emphasizes Century’s commitment to the maintenance of healthy, safe and sustainable operations and incorporates information on Century’s environmental, social and governance (ESG) strategy.

The full 2020 inaugural Sustainability Report is available at https://centuryaluminum.com/responsibility-and-sustainability/default.aspx.

“We are pleased to publish Century’s first Sustainability Report and look forward to engaging on this most important of topics with our entire community of stakeholders,” said Michael A. Bless, President and Chief Executive Officer. “The maintenance of safe and sustainable operations has always taken precedence at Century. We believe this is a set of priorities in which continuous improvement, with a disposition for urgency, is required. We are committed to playing a leading role as our industry addresses these generational challenges.”

Some of Century’s ESG performance highlights noted in the Sustainability Report include:

100% of the power supplied to Nordural Grundartangi ehf., Century’s wholly-owned subsidiary, comes from hydroelectric and geothermal sources, while at Sebree and Hawesville, our power purchases have included an increasing amount of renewable energy for each of the past several years.
Technical redesign of our Vlissingen anode facility to optimize energy use and production capacity.
Continued development and innovation with “green aluminum” products to reduce both our and our customers’ carbon impact. An example of this is our Natur- Al™ product, launched in 2020.
Development of and implementation of new pot technology at Hawesville which we expect to deliver reduced power consumption and improved current efficiency.
Conducting a Safety and Health leadership engagement activity at Mt. Holly, Sebree, and Hawesville beginning in early 2021, aimed at providing leadership tools to help us accomplish Century’s safety vision.

About Century Aluminum Company

Century Aluminum Company owns primary aluminum capacity in the United States and Iceland. Century’s corporate offices are located in Chicago, IL. Visit www.centuryaluminum.com for more information.

Cautionary Statement

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are statements about future events and are based on our current expectations. These forward-looking statements may be identified by the words “believe,” “expect,” “hope,” “target,” “anticipate,” “intend,” “plan,” “seek,” “estimate,” “potential,” “project,” “scheduled,” “forecast” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” or “may.” Our forward-looking statements include, without limitation, statements with respect to: the goals, effects, consequences and expectations of the sustainability efforts of Century, ongoing transparency and performance reporting of Century’s environmental, social and governance operations, global and local financial and economic conditions; future aluminum pricing and the costs of our major raw materials.

Where we express an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, our forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from future results expressed, projected or implied by those forward-looking statements. Important factors that could cause actual results and events to differ from those described in such forward-looking statements can be found in the risk factors and forward-looking statements cautionary language contained in our Annual Report on Form 10-K, quarterly reports on Form 10-Q and in other filings made with the Securities and Exchange Commission. Although we have attempted to identify those material factors that could cause actual results or events to differ from those described in such forward-looking statements, there may be other factors that could cause actual results or events to differ from those anticipated, estimated or intended. Many of these factors are beyond our ability to control or predict. Given these uncertainties, investors are cautioned not to place undue reliance on our forward-looking statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

Contact

Peter Trpkovski
(Investors and media)
312-696-3132

Source: Century Aluminum Company

April 21, 2021 4:09 pm

Lam Research Corporation Reports Financial Results for the Quarter Ended March 28, 2021

FREMONT, Calif., April 21, 2021 (GLOBE NEWSWIRE) — Lam Research Corporation (the “Company,” “Lam,” “Lam Research”) today announced financial results for the quarter ended March 28, 2021 (the “March 2021 quarter”).

Highlights for the March 2021 quarter were as follows:

Revenue of $3.85 billion.
U.S. GAAP gross margin of 46.3%, U.S. GAAP operating income as a percentage of revenue of 31.1%, and U.S. GAAP diluted EPS of $7.41.
Non-GAAP gross margin of 46.3%, non-GAAP operating income as a percentage of revenue of 31.6%, and non-GAAP diluted EPS of $7.49.


Key Financial Data for the Quarters Ended March 28, 2021 and December 27, 2020 (in thousands, except per-share data, percentages, and basis points)

U.S. GAAP
	March 2021			December 2020			Change Q/Q
Revenue	$	3,847,654		$	3,456,237		+ 11	%
Gross margin as percentage of revenue	46.3		%	46.4		%	– 10 bps
Operating income as percentage of revenue	31.1		%	29.2		%	+ 190 bps
Diluted EPS	$	7.41		$	5.96		+ 24	%

Non-GAAP
	March 2021			December 2020			Change Q/Q
Revenue	$	3,847,654		$	3,456,237		+ 11	%
Gross margin as percentage of revenue	46.3		%	46.6		%	– 30 bps
Operating income as percentage of revenue	31.6		%	30.3		%	+ 130 bps
Diluted EPS	$	7.49		$	6.03		+ 24	%

U.S. GAAP Financial Results

For the March 2021 quarter, revenue was $3,848 million, gross margin was $1,780 million, or 46.3% of revenue, operating expenses were $585 million, operating income was 31.1% of revenue, and net income was $1,071 million, or $7.41 per diluted share on a U.S. GAAP basis. This compares to revenue of $3,456 million, gross margin of $1,604 million, or 46.4% of revenue, operating expenses of $594 million, operating income of 29.2% of revenue, and net income of $869 million, or $5.96 per diluted share, for the quarter ended December 27, 2020 (the “December 2020 quarter”).

Non-GAAP Financial Results

For the March 2021 quarter, non-GAAP gross margin was $1,783 million, or 46.3% of revenue, non-GAAP operating expenses were $567 million, non-GAAP operating income was 31.6% of revenue, and non-GAAP net income was $1,084 million, or $7.49 per diluted share. This compares to non-GAAP gross margin of $1,611 million, or 46.6% of revenue, non-GAAP operating expenses of $563 million, non-GAAP operating income of 30.3% of revenue, and non-GAAP net income of $880 million, or $6.03 per diluted share, for the December 2020 quarter.

“Lam’s growth trajectory continues with record revenue and earnings per share delivered in the March quarter,” said Tim Archer, Lam Research’s President and Chief Executive Officer. “Semiconductors are reaching new heights of strategic relevance, and Lam’s differentiated ability to meet our customers’ scaling challenges positions us well amid a strong wafer fabrication spending environment.”

Balance Sheet and Cash Flow Results

Cash and cash equivalents, short-term investments, and restricted cash and investments balances decreased to $6.0 billion at the end of the March 2021 quarter compared to $6.3 billion at the end of the December 2020 quarter. This decrease was primarily the result of $1.1 billion of share repurchases, including net share settlement of employee stock-based compensation; $186.6 million of dividends paid to stockholders; and $89.6 million of capital expenditures, partially offset by $1.2 billion of cash generated from operating activities.

Revenue

The geographic distribution of revenue during the March 2021 quarter is shown in the following table:

Region	Revenue
China	32%
Korea	31%
Taiwan	14%
Japan	7%
Southeast Asia	7%
United States	5%
Europe	4%

The following table presents revenue disaggregated between system and customer support-related revenue:

	Three Months Ended						Nine Months Ended
	March 28, 2021		December 27, 2020		March 29, 2020		March 28, 2021		March 29, 2020

	(In thousands)
System revenue	$	2,545,306	$	2,307,421	$	1,647,560	$	7,000,968	$	4,759,881
Customer support-related revenue and other	1,302,348		1,148,816		856,065		3,480,003		2,492,991
	$	3,847,654	$	3,456,237	$	2,503,625	$	10,480,971	$	7,252,872

System revenue includes sales of new leading-edge equipment in deposition, etch and clean markets.

Customer support-related revenue includes sales of customer service, spares, upgrades, and non-leading-edge equipment from our Reliant® product line.

Outlook

For the quarter ended June 27, 2021, Lam is providing the following guidance:

U.S. GAAP

Reconciling Items

Non-GAAP

Revenue

$4.0 Billion

+/-

$250 Million

—

$4.0 Billion

+/-

$250 Million

Gross margin as a percentage of revenue

46.5%

+/-

$1 Million

46.5%

+/-

Operating income as a percentage of revenue

31.7%

+/-

$13 Million

32.0%

+/-

Net income per diluted share

$7.42

+/-

$0.50

$12 Million

$7.50

+/-

$0.50

Diluted share count

144 Million

—

144 Million

The information provided above is only an estimate of what the Company believes is realizable as of the date of this release and does not incorporate the potential impact of any business combinations, asset acquisitions, divestitures, restructuring, balance sheet valuation adjustments, financing arrangements, gains or losses on equity investments, other investments, or other significant arrangements that may be completed or realized after the date of this release. U.S. GAAP to non-GAAP reconciling items provided include only those items that are known and can be estimated as of the date of this release. Actual results will vary from this model and the variations may be material. Reconciling items included above are as follows:

Gross margin as a percentage of revenue – amortization related to intangible assets acquired through business combinations, $1 million.
Operating income as a percentage of revenue – amortization related to intangible assets acquired through business combinations, $13 million.
Net income per diluted share – amortization related to intangible assets acquired though business combinations, $13 million; amortization of note discounts, $1 million; and associated tax benefit for non-GAAP items ($2 million); totaling $12 million.

Use of Non-GAAP Financial Results

In addition to U.S. GAAP results, this press release also contains non-GAAP financial results. The Company’s non-GAAP results for both the March 2021 and December 2020 quarters exclude amortization related to intangible assets acquired through business combinations, the effects of elective deferred compensation-related assets and liabilities, amortization of note discounts, and the income tax benefit of non-GAAP items.

Management uses non-GAAP gross margin, operating expense, operating income, operating income as a percentage of revenue, net income, and net income per diluted share to evaluate the Company’s operating and financial results. The Company believes the presentation of non-GAAP results is useful to investors for analyzing business trends and comparing performance to prior periods, along with enhancing investors’ ability to view the Company’s results from management’s perspective. Tables presenting reconciliations of non-GAAP results to U.S. GAAP results are included at the end of this press release and on the Company’s website at http://investor.lamresearch.com.

Caution Regarding Forward-Looking Statements

Statements made in this press release that are not of historical fact are forward-looking statements and are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to, but are not limited to: our outlook and guidance for future financial results, including revenue, gross margins, operating income and net income; our growth trajectory; the strategic relevance of semiconductors; our ability to meet our customers’ scaling challenges and the extent to which that ability is differentiated; and the wafer fabrication spending environment and our positioning within that environment. Some factors that may affect these forward-looking statements include: the severity, magnitude and duration of the COVID–19 pandemic (and the related governmental, public health, business and community responses to it), and their impacts on our business, results of operations and financial condition, are evolving and are highly uncertain and unpredictable; business, political and/or regulatory conditions in the consumer electronics industry, the semiconductor industry and the overall economy may deteriorate or change; supply chain disruptions or manufacturing capacity constraints may limit our ability to manufacture and sell our products; the actions of our customers and competitors may be inconsistent with our expectations; trade regulations, export controls, trade disputes, and other geopolitical tensions may inhibit our ability to sell our products; and widespread outbreaks of illness may impact our operations and revenue in affected areas; as well as the other risks and uncertainties that are described in the documents filed or furnished by us with the Securities and Exchange Commission, including specifically the Risk Factors described in our annual report on Form 10–K for the fiscal year ended June 28, 2020 and our quarterly reports on Form 10-Q for the fiscal quarters ended September 27, 2020 and December 27, 2020. These uncertainties and changes could materially affect the forward-looking statements and cause actual results to vary from expectations in a material way. The Company undertakes no obligation to update the information or statements made in this release.

Lam Research Corporation is a global supplier of innovative wafer fabrication equipment and services to the semiconductor industry. As a trusted, collaborative partner to the world’s leading semiconductor companies, we combine superior systems engineering capability, technology leadership, and unwavering commitment to customer success to accelerate innovation through enhanced device performance. In fact, today, nearly every advanced chip is built with Lam technology. Lam Research (Nasdaq: LRCX) is a FORTUNE 500® company headquartered in Fremont, Calif., with operations around the globe. Learn more at www.lamresearch.com. (LRCX-F)

Consolidated Financial Tables Follow.


LAM RESEARCH CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data and percentages) (unaudited)

	Three Months Ended									Nine Months Ended
	March 28, 2021			December 27, 2020			March 29, 2020			March 28, 2021			March 29, 2020
Revenue	$	3,847,654		$	3,456,237		$	2,503,625		$	10,480,971		$	7,252,872
Cost of goods sold	2,067,523			1,852,442			1,336,618			5,590,866			3,924,511
Gross margin	1,780,131			1,603,795			1,167,007			4,890,105			3,328,361
Gross margin as a percent of revenue	46.3		%	46.4		%	46.6		%	46.7		%	45.9		%
Research and development	381,120			375,172			307,914			1,111,659			913,602
Selling, general and administrative	203,703			218,899			164,979			612,350			496,679
Total operating expenses	584,823			594,071			472,893			1,724,009			1,410,281
Operating income	1,195,308			1,009,724			694,114			3,166,096			1,918,080
Operating income as a percent of revenue	31.1		%	29.2		%	27.7		%	30.2		%	26.4		%
Other expense, net	(35,320		)	(29,941		)	(64,619		)	(104,053		)	(91,271		)
Income before income taxes	1,159,988			979,783			629,495			3,062,043			1,826,809
Income tax expense	(88,867		)	(110,554		)	(54,714		)	(298,242		)	(271,729		)
Net income	$	1,071,121		$	869,229		$	574,781		$	2,763,801		$	1,555,080
Net income per share:
Basic	$	7.51		$	6.04		$	3.96		$	19.20		$	10.75
Diluted	$	7.41		$	5.96		$	3.88		$	18.94		$	10.39
Number of shares used in per share calculations:
Basic	142,676			143,830			145,301			143,925			144,654
Diluted	144,609			145,910			148,165			145,923			149,648
Cash dividend declared per common share	$	1.30		$	1.30		$	1.15		$	3.90		$	3.45


LAM RESEARCH CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)

	March 28, 2021		December 27, 2020		June 28, 2020
	(unaudited)		(unaudited)		(1)
ASSETS
Cash and cash equivalents	$	3,673,366	$	3,687,165	$	4,915,172
Investments	2,116,101		2,355,067		1,795,080
Accounts receivable, net	2,809,068		2,900,362		2,097,099
Inventories	2,552,032		2,348,955		1,900,024
Prepaid expenses and other current assets	171,703		176,403		146,160
Total current assets	11,322,270		11,467,952		10,853,535
Property and equipment, net	1,279,836		1,208,285		1,071,499
Restricted cash and investments	253,460		252,807		253,911
Goodwill and intangible assets	1,633,254		1,641,168		1,652,968
Other assets	796,093		800,162		727,134
Total assets	$	15,284,913	$	15,370,374	$	14,559,047
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current portion of long-term debt and finance lease obligations	$	825,434	$	832,847	$	839,877
Other current liabilities	2,786,899		2,758,206		2,322,565
Total current liabilities	3,612,333		3,591,053		3,162,442
Long-term debt and finance lease obligations	4,991,613		4,992,496		4,970,848
Income taxes payable	924,629		902,047		909,709
Other long-term liabilities	381,505		376,230		332,559
Total liabilities	9,910,080		9,861,826		9,375,558
Temporary equity, convertible notes	3,217		5,515		10,995
Stockholders’ equity (2)	5,371,616		5,503,033		5,172,494
Total liabilities and stockholders’ equity	$	15,284,913	$	15,370,374	$	14,559,047

(1)		Derived from audited financial statements.
(2)		Common shares issued and outstanding were 142,607 as of March 28, 2021, 143,205 as of December 27, 2020, and 145,331 as of June 28, 2020.


LAM RESEARCH CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands, unaudited)

	Three Months Ended									Nine Months Ended
	March 28, 2021			December 27, 2020			March 29, 2020			March 28, 2021			March 29, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	1,071,121		$	869,229		$	574,781		$	2,763,801		$	1,555,080
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	79,453			76,389			67,248			228,754			197,442
Deferred income taxes	(1,136		)	(2,462		)	—			(5,448		)	74,516
Equity-based compensation expense	55,746			52,109			47,414			163,843			136,044
Amortization of note discounts and issuance costs	1,412			1,417			1,361			4,251			4,611
Other, net	(2,047		)	5,273			7,811			6,143			11,510
Changes in operating assets and liabilities	(39,469		)	(657,318		)	(157,187		)	(1,009,116		)	(665,800		)
Net cash provided by operating activities	1,165,080			344,637			541,428			2,152,228			1,313,403
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures and intangible assets	(89,596		)	(92,072		)	(51,375		)	(244,474		)	(152,685		)
Net sale (purchase) of available-for-sale securities	233,529			168,102			211,159			(335,443		)	339,350
Other, net	(27,997		)	(6,090		)	9,988			(35,873		)	(540		)
Net cash provided by (used for) investing activities	115,936			69,940			169,772			(615,790		)	186,125
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on debt	(16,245		)	(4,596		)	(617,637		)	(40,014		)	(664,589		)
Proceeds from borrowings on revolving credit facility	—			—			1,250,000			—			1,250,000
Treasury stock purchases	(1,094,571		)	(723,297		)	(245,433		)	(2,266,449		)	(1,328,632		)
Dividends paid	(186,551		)	(187,927		)	(163,510		)	(541,607		)	(489,099		)
Reissuance of treasury stock related to employee stock purchase plan	—			41,434			—			41,434			38,447
Proceeds from issuance of common stock	9,626			8,108			1,714			23,272			6,215
Other, net	(665		)	961			328			(1,844		)	328
Net cash (used for) provided by financing activities	(1,288,406		)	(865,317		)	225,462			(2,785,208		)	(1,187,330		)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(5,756		)	8,187			(10,715		)	6,513			(9,853		)
Net (decrease) increase in cash, cash equivalents, and restricted cash	(13,146		)	(442,553		)	925,947			(1,242,257		)	302,345
Cash, cash equivalents, and restricted cash at beginning of period	3,939,972			4,382,525			3,289,794			5,169,083			3,913,396
Cash, cash equivalents, and restricted cash at end of period	$	3,926,826		$	3,939,972		$	4,215,741		$	3,926,826		$	4,215,741


Non-GAAP Financial Summary (in thousands, except percentages and per share data) (unaudited)

	Three Months Ended
	March 28, 2021			December 27, 2020
Revenue	$	3,847,654		$	3,456,237
Gross margin	$	1,783,209		$	1,611,154
Gross margin as percentage of revenue	46.3		%	46.6		%
Operating expenses	$	566,507		$	563,446
Operating income	$	1,216,702		$	1,047,708
Operating income as a percentage of revenue	31.6		%	30.3		%
Net income	$	1,083,532		$	880,211
Net income per diluted share	$	7.49		$	6.03
Shares used in per share calculation – diluted	144,609			145,910


Reconciliation of U.S. GAAP Net Income to Non-GAAP Net Income (in thousands, except per share data) (unaudited)

	Three Months Ended
	March 28, 2021			December 27, 2020
U.S. GAAP net income	$	1,071,121		$	869,229
Pre-tax non-GAAP items:
Amortization related to intangible assets acquired through certain business combinations – cost of goods sold	1,092			1,270
Elective deferred compensation (“EDC”) related liability valuation increase – cost of goods sold	1,986			6,089
EDC related liability valuation increase – research and development	3,575			10,961
Amortization related to intangible assets acquired through certain business combinations – selling, general and administrative	12,357			12,357
EDC related liability valuation increase – selling, general and administrative	2,384			7,307
Amortization of note discounts – other expense, net	998			1,001
Gain on EDC related asset – other expense, net	(7,520		)	(24,207		)
Net income tax benefit on non-GAAP items	(2,461		)	(3,796		)
Non-GAAP net income	$	1,083,532		$	880,211
Non-GAAP net income per diluted share	$	7.49		$	6.03
U.S. GAAP net income per diluted share	$	7.41		$	5.96
U.S. GAAP and non-GAAP number of shares used for per diluted share calculation	144,609			145,910


Reconciliation of U.S. GAAP Gross Margin, Operating Expenses and Operating Income to Non-GAAP Gross Margin, Operating Expenses and Operating Income (in thousands, except percentages) (unaudited)

	Three Months Ended
	March 28, 2021			December 27, 2020
U.S. GAAP gross margin	$	1,780,131		$	1,603,795
Pre-tax non-GAAP items:
Amortization related to intangible assets acquired through certain business combinations	1,092			1,270
EDC related liability valuation increase	1,986			6,089
Non-GAAP gross margin	$	1,783,209		$	1,611,154
U.S. GAAP gross margin as a percentage of revenue	46.3		%	46.4		%
Non-GAAP gross margin as a percentage of revenue	46.3		%	46.6		%
U.S. GAAP operating expenses	$	584,823		$	594,071
Pre-tax non-GAAP items:
Amortization related to intangible assets acquired through certain business combinations	(12,357		)	(12,357		)
EDC related liability valuation increase	(5,959		)	(18,268		)
Non-GAAP operating expenses	$	566,507		$	563,446
U.S. GAAP operating income	$	1,195,308		$	1,009,724
Non-GAAP operating income	$	1,216,702		$	1,047,708
U.S. GAAP operating income as percent of revenue	31.1		%	29.2		%
Non-GAAP operating income as a percent of revenue	31.6		%	30.3		%

Lam Research Corporation Contacts:

Tina Correia, Investor Relations, phone: 510-572-1615, e-mail: [email protected]