Canadian Pacific Kansas City Limited · TSX:CP
Canadian Pacific Kansas City — Canadian Pacific — Q1 2014 Earnings Presentation
16 slides from Canadian Pacific Kansas City's earnings presentation, Apr 22, 2014
Slide 1: Q1 2014 Earnings Review
Q1 2014 EARNINGS REVIEW APRIL 22, 2014
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS The following investor presentation contains By its nature, CP’s forward-looking information notes; and various events that could disrupt certain forward-looking information within the involves numerous assumptions, inherent risks operations, including severe weather, drou
Slide 3: Note on Non GAAP Measures
NOTE ON NON GAAP MEASURES Except where noted, all figures are in millions of For further information regarding non-GAAP Canadian dollars. measures see the Non-GAAP Measures supplement to the press release on our website Financial statements are prepared in accordance at www.cpr.ca. with accounting p
Slide 4: E. Hunter Harrison, CEO
E. HUNTER HARRISON CEO CANADIAN PACIFIC
Slide 5: Q1 Highlights
Q1 HIGHLIGHTS OPERATING RATIO DILUTED EPS 72.0% 380 BP IMPROVEMENT $1.4416% INCREASE Record Q1 in spite of challenging winter – Winter impact of $0.30-0.35 EPS versus typical conditions Disappointing regulatory changes Share buyback program announced – Repurchasing up to $1 billion 5
Slide 6: Keith Creel, President & COO
KEITH CREEL PRESIDENT & COO
Slide 7: Operations Update
OPERATIONS UPDATE Prolonged Chicago network disruption – Congestion starting to ease Legislated grain volumes – Meeting & exceeding minimum thresholds Continued investment in safety – Safety culture continues to evolve 7
Slide 8: Jane O'Hagan, EVP & CMO
JANE O’HAGAN EVP & CMO CANADIAN PACIFIC
Slide 9: Q1 Revenue Performance
Q1 REVENUE PERFORMANCE FREIGHT REVENUE FX-adjusted variance(1) favorable/(unfavorable) +1% Grain (1%) Coal (2%) VS Q1 2013 Fertilizer & sulphur (16%) Industrial products 3% ▲ RTMs down 5% ▲ Revenue per RTM up 6% Automotive (13%) ▲ Carloads down 6% Forest products (16%) ▲ Revenue per carload up 8% In
Slide 10: Bart Demosky, EVP & CFO
BART DEMOSKY EVP & CFO CANADIAN PACIFIC
Slide 11: Q1 Financial Highlights
Q1 FINANCIAL HIGHLIGHTS Variance In millions, except percentages and per share data Fav/ (Unfav) 2014 2013 Reported FX Adj(1) Total revenues $ 1,509 $ 1,495 1% (3%) Total operating expenses 1,086 1,133 4% 8% Operating income 423 362 17% 10% Other charges - 3 100% Net interest expense 70 70 - Income
Slide 12: Enhancing Shareholder Value
ENHANCING SHAREHOLDER VALUE Buyback Announced RETURN ON CAPITAL EMPLOYED (PRE-TAX, ADJUSTED) – Reflection of strong cash flow generation 12.4% – Private placement transaction and 7.5% 9.8% Automatic Share Purchase Plan 2011 2012 2013 2014E Ratings upgrade ADJUSTED DEBT / ADJUSTED EBITDA – S&P an
Slide 13: E. Hunter Harrison, CEO
~ -o t = E. HUNTER HARRISON CEO CANADIAN PACIFIC
Slide 14: 2014 Guidance
2014 GUIDANCE 65% 6% or lower to OPERATING RATIO 7% ≥ 30% REVENUE GROWTH EPS GROWTH(1) (1) Compared to 2013 diluted EPS, excluding significant items, of $6.42 which is a non-GAAP measure. For a full description see Non-GAAP Measures on www.cpr.ca 14
Slide 15: Contacts
AVP, Investor Relations CONTACTS [email protected] Director, Investor Relations [email protected] Phone: (403) 319-3591
Slide 16: Foreign Exchange Impact
FOREIGN EXCHANGE IMPACT Quarterly Variance Fav/(Unfav) Reported FX adjusted(1) Grain 4% (1%) Coal (1%) (2%) Fertilizers & sulphur (12%) (16%) Industrial & consumer products 11% 3% Automotive (9%) (13%) Forest products (9%) (16%) Intermodal (2%) (3%) Total freight revenues 1% (3%) Compensation & bene