Canadian Pacific Kansas City Limited · TSX:CP
Canadian Pacific Kansas City — Canadian Pacific — Q4 2018 Earnings Presentation
16 slides from Canadian Pacific Kansas City's earnings presentation, Jan 23, 2019
Slide 1: Q4 2018 Earnings Review
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Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS The following investor presentation contains certain forward-looking the effects of competition and pricing pressures; industry capacity; shifts information within the meaning of applicable securities laws relating, but in market demand; inflation; changes in laws and regu
Slide 3: Note on Non-GAAP Measures; Note on Restated Financials
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
KEITH CREEL
Slide 5: Highlights Q4 2018
HIGHLIGHTS Q4 2018 • Record quarter and year by Revenues Revenues $2.0 billion $7.3 billion nearly every financial +17% +12% measure Operating Income Operating Ratio >$7B in revenues $874 million 61.3% record operating ratio +28% -30 bps Adjusted operating ratio (1) Adjusted operating ratio (1)
Slide 6: 2019 outlook assumptions
(1) • FX rate approximately USD/CAD $1.30 • Tax rate in the range of 25.5% to 26.0% • Other components of net periodic benefit recovery to increase by $11 million vs. 2018 • No material land sales (1) For a full description and reconciliation of Non-GAAP Measures, see CP’s Q4 2018 Earnings Release o
Slide 7: John Brooks, Chief Marketing Officer
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Slide 8: Revenue Highlights
REVENUE HIGHLIGHTS FREIGHT REVENUE FX-adjusted revenue variance(1) +18% Grain 5% Coal 21% Potash 24% VS Q4 2017 Fertilizers & sulphur 18% Forest products 12% • RTMs: +9% Energy, chemicals & plastics 46% -71% • FX: +2% Metals, minerals, consumer 5% • Fuel: +3% Automotive 4% • Price/mix: +4% Intermoda
Slide 9: Bulk
BULK Q4’18 VS. Q4’17 MARKET DRIVERS & OUTLOOK Freight Revenue (FX-adj.) (1) 12% • Record fourth quarter and full year for RTMs 7% Canadian grain and potash Freight Revenue per RTM (FX-adj.) (1) 5% • Continued strength in Canadian grain; regulated grain VRCPI revised to 5.7% for 2018 REVENUE BREAKDOW
Slide 10: Merchandise
MERCHANDISE Q4’18 VS. Q4’17 MARKET DRIVERS & OUTLOOK Freight Revenue (FX-adj.) (1) 24% • Record fourth quarter and full year for energy, RTMs chemicals and plastics; continued strength in 16% ECP as we onboard new customers Freight Revenue per RTM (FX-adj.) (1) 6% • Sustained growth in forest produc
Slide 11: Intermodal
INTERMODAL Q4’18 VS. Q4’17 MARKET DRIVERS & OUTLOOK Freight Revenue (FX-adj.) (1) 11% • Record year in domestic intermodal; further RTMs 7% upside in 2019 as we onboard new business Freight Revenue and leverage demand management tools 3% per RTM (FX-adj.) (1) 2018 REVENUE BREAKDOWN • Well positioned
Slide 12: Nadeem Velani, Chief Financial Officer
NADEEM VELANI CHIEF FINANCIAL OFFICER
Slide 13: Financial Performance – Q4
FINANCIAL PERFORMANCE – Q4 (In millions, except percentages and Fourth Quarter FX adjusted per share data) 2018 2017 Change % Change % (1) Total revenues $ 2,006 $ 1,713 17 % 15 % Compensation and benefits 378 340 11 % 10 % Fuel 247 197 25 % 22 % Materials 46 48 (4%) (6%) Equipment rents 31 34 (9%)
Slide 14: Financial Performance – Full Year
FINANCIAL PERFORMANCE – FULL YEAR Full Year (In millions, except percentages and per share data) 2018 2017 % Change Total revenues $ 7,316 $ 6,554 12 % Total operating expenses 4,485 4,035 11 % Adjusted total operating expenses(1) 4,485 4,086 10 % Operating income 2,831 2,519 12 % Adjusted operating
Slide 15: Free Cash Flow
FREE CASH Full Year (in millions) 2018 2017 Cash provided by operating activities $2,712 $2,182 Capital expenditures (1,551) (1,340) Other property and asset sales 78 42 Other 15 3 Cash used in investing activities (1,458) (1,295) Effect of FX on USD-denominated cash & cash equivalents 11 (13) Settl
Slide 16: Investor Relations Contacts
INVESTOR RELATIONS CONTACTS MAEGHAN ALBISTON Assistant Vice President CHRIS DE BRUYN Director 403-319-3591 [email protected] investor.cpr.ca cp