Canadian Pacific Kansas City Limited · TSX:CP
Canadian Pacific Kansas City — Canadian Pacific — Q2 2016 Earnings Presentation
15 slides from Canadian Pacific Kansas City's earnings presentation, Jul 20, 2016
Slide 1: Q2 2016 Earnings Review
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: i| FZ
CP Yy i| FZ LZ H YP", SIWGYLY Wh oe \) D). ti BS: fv” a 4 a ‘ Yj te | 2 — - | 5 3 3 BS : ’ \
Slide 5: Q2 Highlights
Q2 HIGHLIGHTS OPERATING RATIO ADJUSTED DILUTED EPS(1) 62.0% $2.05 110 BP INCREASE DOWN 16% Challenging quarter; the worst is behind us Solid bulk fundamentals in second half No one said it would be easy (1) For a full description and reconciliation of Non-GAAP Measures see CP’s Q2 2016 Earning
Slide 6: XC_T Ml
ZZ = XC_T Ml ZZ, X@UOMA™"MMmhywe!“”". a 7 Yy WUYVY.4 nH Ya,
Slide 7: Operating Performance
OPERATING PERFORMANCE Average network Average terminal dwell Average train length Average train weight speed (mph) (hours) (feet) (tons) 24.1 7,275 8,540 6.7 6,989 8,253 21.7 6.5 11% better 3% better 4% better 3% better Q2'15 Q2'16 Q2'15 Q2'16 Q2'15 Q2'16 Q2'15 Q2'16 Car miles per car day Locomotive
Slide 8: Revenue Performance
REVENUE PERFORMANCE TOTAL REVENUE FX-adjusted revenue variance(2) favourable/(unfavourable) -12% Canadian grain -22% U.S. grain -9% Coal -12% Potash -27% VS Q2 2015 Fertilizers & sulphur 6% Forest products 11% RTMs -12% Chemicals & plastics -9% Freight Revenue per RTM • FX +2% Crude -72% • Fuel
Slide 9: CMY,
CMY, Wl Uy
Slide 10: Financial Performance
FINANCIAL PERFORMANCE Second Quarter (In millions, except percentages and per share data) 2016 2015 Total revenues $ 1,450 $ 1,651 Total operating expenses 899 1,005 Compensation and benefits 284 308 Fuel 131 185 Materials 38 45 Equipment rents 44 46 Depreciation and amortization 161 145 Purchased s
Slide 11: Slide 11
Slide 12: v. ey, tj
v. ey, tj
Slide 13: FX-Adjusted Revenues & Expenses
FX-ADJUSTED REVENUES & EXPENSES Second Quarter Reported Variance FX Adj(1) Variance 2016 2015 Fav/(Unfav) FX Impact Fav/(Unfav) Canadian Grain $ 201 $ 255 (21%) $ 3 (22%) U.S. Grain 101 106 (5%) 5 (9%) Coal 149 167 (11%) 2 (12%) Potash 79 106 (25%) 2 (27%) Fertilizers and sulphur 73 67 9% 2 6% Fores
Slide 14: Adjusted Results
ADJUSTED RESULTS Second Quarter Variance (In millions, except percentages and per share data) 2016 2015 Fav/(Unfav) Operating income 551 646 (15%) Other (income) & charges (9) (5) 80% includes: Impact of FX translation on USD-denominated debt(1) 18 10 Net interest expense 115 84 (37%) Income tax exp
Slide 15: Key Modeling Sensitivities
KEY MODELING SENSITIVITIES Key sensitivities Exchange rate* For every $0.01 decline in the Canadian dollar: • Revenues increase by approximately $26 million • Expenses increase by approximately $13 million • Interest expense increases by approximately $3 million *Sensitivities are quoted on a full y