Canadian Pacific Kansas City Limited · TSX:CP
Canadian Pacific Kansas City — Canadian Pacific Railway — Q3 2015 Earnings Presentation
15 slides from Canadian Pacific Kansas City's earnings presentation, Oct 20, 2015
Slide 1: Keith Creel, President & Chief Operating Officer
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Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS The following investor presentation contains certain forward- By its nature, CP’s forward-looking information involves floating rate notes; and various events that could disrupt looking information within the meaning of applicable securities numerous assumptions, inherent
Slide 3: Note on Non GAAP Measures
NOTE ON NON GAAP MEASURES Except where noted, all figures are in millions of Canadian It should be noted that CP’s non-GAAP earnings as dollars. described in this presentation, have no standardized meanings and are not defined by U.S. GAAP and, Financial statements are prepared in accordance with th
Slide 4: E. Hunter Harrison, Chief Executive Officer
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Slide 5: Highlights
HIGHLIGHTS ADJUSTED OPERATING RATIO ADJUSTED EPS 59.9% $2.69 290 BP IMPROVEMENT 16% IMPROVEMENT Continued margin improvement and earnings growth in softer volume environment Sale of D&H South complete Upsized buyback Hourly agreement with Brotherhood of Locomotive Engineers and Trainmen (BLE
Slide 6: Keith Creel, President & Chief Operating Officer
Slide 7: Executing the Plan
EXECUTING THE PLAN Terminal Dwell Q3: 19% better Network Speed Q3: 19% better Train Length Q3: 2% better (Hours) YTD: 18% better (Miles per hour) YTD: 19% better (Feet) YTD: 4% better 22.2 6,946 6,904 21.0 6,828 8.9 6,636 8.1 18.6 17.6 7.3 6.6 Q3'14 Q3'15 YTD'14 YTD'15 Q3'14 Q3'15 YTD'14 YTD'15 Q3'1
Slide 8: Revenue Performance
REVENUE PERFORMANCE FX-adjusted revenue variance(1) FREIGHT REVENUE favorable/(unfavorable) +2% Canadian Grain flat U.S. Grain (5%) Coal 7% Potash 5% VS Q3 2014 Fertilizers & sulphur flat Forest products 10% ▲ RTMs -4% Chemicals & plastics (7%) ▲ Revenue per RTM +6% Crude (31%) • FX +11% Metals, min
Slide 9: Mark Erceg, Chief Financial Officer
Slide 10: Financial Performance
FINANCIAL PERFORMANCE Variance Third Quarter Fav/(Unfav) (In millions, except percentages and per share data) 2015 2014 Reported FX Adj(1) Total revenues $ 1,709 $ 1,670 2% (8%) Total expenses 956 1,049 9% 16% Compensation & benefits 352 347 (1%) 4% Fuel 162 249 35% 45% Materials 47 47 - 4% Equipmen
Slide 11: Free Cash
FREE CASH For nine months ended September 30th (In millions) 2015 2014 Cash from operations $ 1,836 $ 1,466 Capital expenditures (1,067) (936) Proceeds from the sale of the D&H South 281 - Proceeds from the sale of the DM&E West - 236 Asset sales 73 26 Dividends paid (172) (184) Effect of FX on USD
Slide 12: Appendix
Slide 13: Significant Items
SIGNIFICANT ITEMS Significant items Pre-tax After-tax EPS Operating favorable/(unfavorable) impact impact impact ratio (millions) (millions) impact FX translation on USD-denominated debt ($128) ($111) ($0.69) - Gain on sale of D&H South $68 $42 $0.26 400 bp Early redemption premium on restrictive no
Slide 14: Adjusted Results
ADJUSTED RESULTS Third Quarter Year to Date Reported Reported Variance Variance (In millions, except percentages and per share data) 2015 2014 Fav/(Unfav) 2015 2014 Fav/(Unfav) Total revenues $ 1,709 $1,670 2% $ 5,025 $4,860 3% Total adjusted operating expenses 1,024 1,049 2% 3,082 3,233 5% Adjusted
Slide 15: FX Adjusted Variances
FX ADJUSTED VARIANCES Third Quarter Year to Date Reported FX Adj(1) Reported FX Adj(1) Variance Variance Variance Variance 2015 2014 Fav/(Unfav) Fav/(Unfav) 2015 2014 Fav/(Unfav) Fav/(Unfav) Canadian Grain 261 248 5% - 772 721 7% 3% U.S. Grain 148 127 17% (5%) 391 348 12% (4%) Coal 163 150 9% 7% 490
Canadian Pacific Railway — Q3 2015 Earnings Presentation on 6ix