Canadian Pacific Kansas City Limited · TSX:CP
Canadian Pacific Kansas City — Canadian Pacific — Q4 2017 Earnings Presentation
19 slides from Canadian Pacific Kansas City's earnings presentation, Jan 18, 2018
Slide 1: Q4 2017 Earnings Review
Se “Qa 2017 EARNINGS REVIEW JANUARY 18, 2018 cP
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS The following investor presentation contains certain forward-looking market demand; inflation; changes in laws and regulations, including information within the meaning of applicable securities laws relating, but regulation of rates; changes in taxes and tax rates; potenti
Slide 3: Note on Non-GAAP Measures
NOTE ON NON-GAAP MEASURES Except where noted, all figures are in millions of Canadian dollars. It should be noted that CP’s non-GAAP earnings as described in this presentation, have no standardized meanings and are not defined by Financial information is prepared in accordance with accounting U.S. G
Slide 4: Keith Creel, President & Chief Executive Officer
KEITH CREEL PRESIDENT & CHIEF EXECUTIVE OFFICER
Slide 5: Highlights Q4 2017
HIGHLIGHTS Q4 2017 Revenues Revenues Record quarter and year by $1.71 billion $6.55 billion nearly every measure +5% +5% Operating Income Operating Ratio $753 million 57.4% Full year adjusted EPS +5% -120 bps growth of 11% Operating Ratio Adjusted operating ratio (1) 56.1% 58.2% Industry-leadi
Slide 6: 2018 Outlook
* Versus 2017 adjusted diluted EPS of $11.39. For a full description of 2018 Outlook and Non-GAAP measures, see CP’s Q4 2017 Earnings Release on www.cpr.ca
Slide 7: John Brooks, Chief Marketing Officer
JOHN BROOKS CHIEF MARKETING OFFICER cP
Slide 8: Revenue Performance
REVENUE PERFORMANCE TOTAL REVENUE FX-adjusted revenue variance(1) +5% VS Q4 2016 Grain Coal Potash -1% 1% 9% Fertilizers & sulphur -6% Forest products 3% • RTMs: +4% Energy, chemicals & plastics 20% • FX: -2% -71% Metals, minerals, consumer 30% • Fuel: +2% Automotive -9% • Price/mix: flat • Other +1
Slide 9: Revenue Outlook
REVENUE OUTLOOK Expecting mid-single digit revenue growth in 2018 • Strong global potash demand and ramp up of K+S traffic • Canadian grain crop (2017/18) now expected to be in-line with previous year BULK 44% • Steady coal volumes • Headwinds in US grain expected to persist through 1H • Continued s
Slide 10: Nadeem Velani
NADEEM VELANI
Slide 11: Financial Performance – Q4
FINANCIAL PERFORMANCE – Q4 (In millions, except percentages and Fourth Quarter FX-adjusted per share data) 2017 2016 Change % Change (2) % Total revenues $ 1,713 $ 1,637 5% 7% Compensation and benefits 269 282 (5%) (3%) Fuel 197 173 14 % 19 % Materials 48 47 2% 4% Equipment rents 34 41 (17%) (15%) D
Slide 12: Financial Performance – Full Year
FINANCIAL PERFORMANCE – FULL YEAR Full Year (In millions, except percentages and per share data) 2017 2016 % Change Total revenues $ 6,554 $ 6,232 5% Total operating expenses 3,761 3,654 3% Adjusted total operating expenses(1) 3,812 3,654 4% Operating income 2,793 2,578 8% Adjusted operating income(
Slide 13: 2018 Outlook: FX and Tax Rate Assumptions
FX rate in the range of $1.25 to $1.30 Tax rate in the range of 24.5% to 25% * Versus 2017 adjusted diluted EPS of $11.39. For a full description of 2018 Outlook and Non-GAAP measures, see CP’s Q4 2017 Earnings Release on www.cpr.ca
Slide 14: Keith Creel, President & Chief Executive Officer
KEITH CREEL PRESIDENT & CHIEF EXECUTIVE OFFICER
Slide 15: Appendix
APPENDIX
Slide 16: Operating Performance
OPERATING PERFORMANCE Average train weight FRA Train Accident Frequency Average terminal dwell (tons) (hours) (per million train miles) 6.9 6.7 6.6 1.19 6.4 8,588 8,897 8,614 8,806 1.12 0.94 0.99 8% worse 1% better 4% better 2% better 21% better 12% better Q4'16 Q4'17 FY'16 FY'17 Q4'16 Q4'17 FY'16 F
Slide 17: CP Traffic Mix
CP TRAFFIC MIX CROSS ASIA BORDER 32% 30% % of 2017 freight revenues EUROPE DOMESTIC 5% CANADA DOMESTIC 17% U.S. 16%
Slide 18: Key Modeling Sensitivities
KEY MODELING SENSITIVITIES Key sensitivities Foreign exchange rate* For every $0.01 decline in the Canadian dollar: • Revenues increase by approximately $27 million • Expenses increase by approximately $14 million • Interest expense increases by approximately $3 million *Sensitivities are quoted on
Slide 19: Investor Relations Contacts
MAEGHAN ALBISTON ASSISTANT VICE PRESIDENT INVESTOR RELATIONS ANDREW ELFORD DIRECTOR INVESTOR RELATIONS 403-319-3591 [email protected] investor.cpr.ca cp