Canadian Pacific Kansas City Limited · TSX:CP
Canadian Pacific Kansas City — Q3 2022 Earnings Presentation
18 slides from Canadian Pacific Kansas City's earnings presentation, Oct 26, 2022
Slide 1: Q3 2022 Earnings Review
Q3 2022 EARNINGS REVIEW OCTOBER 26, 2022
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS The following investor presentation certain forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of other relevant securities legislation, including applicable
Slide 3: Basis of Presentation & Non-GAAP Measures
BASIS OF PRESENTATION & NON-GAAP MEASURES BASIS OF PRESENTATION Except where noted, all figures are in millions of Canadian dollars. Financial information is prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), unless otherwise noted. NO
Slide 4: Keith Creel, President & Chief Executive Officer
KEITH CREEL PRESIDENT & CHIEF EXECUTIVE OFFICER
Slide 5: Highlights
HIGHLIGHTS Gross ton-miles FRA train accident frequency (rolling 7-day average) (per million train-miles) • Solid quarterly results; carrying momentum 1.54 into the end of the year • Well-resourced for a strong finish to the year 0.37 76% Improvement ‒ YTD have hired more than 1,300 Q3'22 Q3'21 cond
Slide 6: John Brooks, Chief Marketing Officer
JOHN BROOKS CHIEF MARKETING OFFICER
Slide 7: Revenue Highlights Q3
REVENUE HIGHLIGHTS Q3 FX-adjusted revenue variance(1) TOTAL REVENUE Grain 9% +19% Coal Potash -2% 48% VS Q3 2021 Fertilizers & sulphur 11% Forest products 18% • RTMs: +6% Energy, chemicals & plastics -10% • $/RTM: +13% Metals, minerals & consumer 22% Automotive 31% • Carloads: +10% • $/Carload: +9%
Slide 8: Revenue Update
REVENUE UPDATE BULK: 40% MERCHANDISE: 38% INTERMODAL: 22% • Robust Canadian grain crop • Increased drilling activity continues • Another record volume and revenue estimated at ~75MMT to drive frac sand volume growth performance in intermodal • Well positioned for strong • Q4 Energy, Chemicals and Pl
Slide 9: Maeghan Albiston, Vice-President Capital Markets
MAEGHAN ALBISTON VICE-PRESIDENT CAPITAL MARKETS
Slide 10: Financial Performance – Q3
FINANCIAL PERFORMANCE – Q3 Third Quarter FX Adjusted (in millions, except percentages and per share data) 2022 2021 Change % Change%(1) Total revenues $ 2,312 $ 1,942 19% 17% Total operating expenses 1,375 1,168 18% 16% Operating income 937 774 21% 19% Adjusted operating income(1) 955 789 21% Net in
Slide 11: Operating Expenses – Q3
OPERATING EXPENSES – Q3 $8 $5 $1,375 $15 $1 $153 Third Quarter FX Adjusted (in millions, except percentages) 2022 2021 Change % Change%(1) Compensation and benefits 393 381 3% 2% $17 $8 $1,168 Fuel 358 199 80% 75% Materials 66 51 29% 29% Equipment rents 33 31 6% 3% Depreciation and amortization 213
Slide 12: Below the Line – Q3
BELOW THE LINE – Q3 Third Quarter (in millions, except percentages) 2022 2021 Change % Equity earnings of Kansas City Southern(1) $ (221) $ — N/A Other expense 7 124 (94)% Other components of net periodic benefit recovery (102) (95) 7% Net interest expense 166 104 60% Income tax expense 196 169 16%
Slide 13: Investor Relations Contacts
INVESTOR RELATIONS CONTACTS MAEGHAN ALBISTON Vice-President CHRIS DE BRUYN Managing Director 403-319-3591 [email protected] https://investor.cpr.ca/
Slide 14: Appendix
4g sa? APPENDIX
Slide 15: KCS Third Quarter Results
KCS THIRD QUARTER RESULTS(1) Q3 2022 Q3 2021 Improvement/ (Deterioration) Carloads/Units 613.9 560.4 10% (in thousands) Revenues $882.2 $744.0 19% (in millions, $ USD) Reported Operating Ratio 63.2% 66.1% 290 bps (percent) Adjusted Operating Ratio(2) 61.9% 61.2% (70) bps (percent) (1) KCS will conti
Slide 16: Sustainability Leadership
SUSTAINABILITY LEADERSHIP • Strong history of ESG disclosures and leading sustainability practices • Published our first TCFD Index in 2021 • Published our first Climate Strategy, including emissions reduction targets covering 100% of scope 1 & 2 emissions: ‒ Set locomotive GHG emissions intensity r
Slide 17: Ready for the Harvest
READY FOR THE HARVEST • Over the last five years, there have been significant investments in the grain supply CP’s 8,500-foot Capable chain Origin Elevators ‒ CP has invested over $500 million in new high capacity grain hoppers 55 47 ‒ Customers have invested in facility upgrades and greenfield elev
Slide 18: Q3 Operating Performance
Q3 OPERATING PERFORMANCE Average train length Average train weight FRA train accident frequency (feet) (tons) (per million train-miles) 8,578 8,285 10,247 9,973 1.54 0.37 4% Improvement 3% improvement 76% improvement Q3'22 Q3'21 Q3'22 Q3'21 Q3'22 Q3'21 Fuel Efficiency Average Train Speed FRA persona
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