Canadian Pacific Kansas City Limited · TSX:CP
Canadian Pacific Kansas City — Canadian Pacific — Q2 2019 Earnings Presentation
15 slides from Canadian Pacific Kansas City's earnings presentation, Jul 16, 2019
Slide 1: Q2 2019 Earnings Review
——- ——ae Q2 2019 EARNINGS REVIEW JULY 16, 2019
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 and Lease Accounting Adoption
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: Q2 Highlights
Q2 HIGHLIGHTS Q2 PERFORMANCE • Solid revenue growth in a Revenues challenging environment; industry ($ billions) $2.0 | +13% leading volume growth Operating Income • Continuing to grow at a low ($ millions) $822 | +31% incremental cost • Record operating and safety Diluted Earnings performance Per S
Slide 6: Operating Performance
OPERATING PERFORMANCE Average terminal dwell Average train weight FRA train accident frequency (hours) (tons) (per million train-miles) 9,295 9,056 6.7 1.02 6.4 0.77 4% improvement 3% improvement 25% improvement Q2'19 Q2'18 Q2'19 Q2'18 Q2'19 Q2'18 Average train speed Average train length FRA persona
Slide 7: John Brooks
z tes am iw JOHN BROOKS
Slide 8: Revenue Highlights
REVENUE HIGHLIGHTS TOTAL REVENUE FX-adjusted revenue variance(1) +13% VS Q2 2018 Grain Coal Potash 5% 11% 15% Fertilizers & sulphur 11% Forest products 8% • RTMs: 6% Energy, chemicals & plastics 22% • FX: 2% Metals, minerals & consumer -2% • Fuel: Flat Automotive 12% • Price/mix: 5% Intermodal 11% (
Slide 9: Bulk
BULK Q2’19 VS. Q2’18 MARKET DRIVERS Freight Revenue • Strong performance in Canadian grain with (FX-adj.) (1) 10% record volume months in April and May RTMs 6% • Record potash volume as strength in Freight Revenue export potash outweighed near-term 4% per RTM (FX-adj.) (1) weakness in domestic potas
Slide 10: Merchandise
MERCHANDISE Q2’19 VS. Q2’18 MARKET DRIVERS Freight Revenue • Double digit volume growth in automotive (FX-adj.) (1) 11% despite cyclical weakness; positive trend RTMs 3% expected to continue Freight Revenue 8% • Strong quarter for LPG, plastics and refined per RTM (FX-adj.) (1) products • Continuing
Slide 11: Intermodal
INTERMODAL Q2’19 VS. Q2’18 MARKET DRIVERS Freight Revenue • Double-digit volume growth in both (FX-adj.) (1) 11% domestic and international intermodal RTMs 11% • Announced new contract with Yang Ming Freight Revenue 0% starting in January 2020 per RTM (FX-adj.) (1) (1) For a full description and rec
Slide 12: Nadeem Velani
NADEEM VELANI
Slide 13: Financial Performance – Q2
FINANCIAL PERFORMANCE – Q2 (In millions, except percentages and Second Quarter FX adjusted per share data) 2019 2018 Change % Change (1) % Total revenues $ 1,977 $ 1,750 13% 11% Compensation and benefits 383 351 9% 8% Fuel 236 230 3% —% Materials 54 53 2% —% Equipment rents 34 33 3% —% Depreciation
Slide 14: Free Cash
FREE CASH For the six months ended June 30 (in millions) 2019 2018 Cash provided by operating activities $1,134 $1,108 Capital expenditures (683) (654) Other property and asset sales 14 9 Other (5) (1) Cash used in investing activities (674) (646) Effect of FX on USD-denominated cash & cash equivale
Slide 15: Investor Relations Contacts
INVESTOR RELATIONS CONTACTS MAEGHAN ALBISTON Assistant Vice President CHRIS DE BRUYN Director 403-319-3591 [email protected] investor.cpr.ca ae 8910 8910 | (a Visp. cP