Canadian Pacific Kansas City Limited · TSX:CP
Canadian Pacific Kansas City — Canadian Pacific — Q3 2017 Earnings Presentation
15 slides from Canadian Pacific Kansas City's earnings presentation, Oct 17, 2017
Slide 1: Q3 2017 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: Keith Creel, President & Chief Executive Officer
= = pen = KEITH CREEL PRESIDENT & CHIEF EXECUTIVE OFFICER cP
Slide 5: Q3 Highlights
Q3 HIGHLIGHTS $1.60 $1.55 Revenues Solid financial, operating ($ billions) and safety performance +3% Q3'17 Q3'16 Continued progress on $690 $657 labour front Operating Income ($ millions) Extending our service +5% Q3'17 Q3'16 reach, building for the long-term 57.7 Operating Ratio (%) 56.7 F
Slide 6: John Brooks, Chief Marketing Officer
Slide 7: Revenue Performance
REVENUE PERFORMANCE TOTAL REVENUE FX-adjusted revenue variance(1) +3% Grain -4% Coal 4% Potash 29% VS Q3 2016 Fertilizers & sulphur -17% Forest products -3% RTMs: +4% Energy, chemicals & plastics 15% Freight Revenue per RTM: -1% -71% • FX: -2% Metals, minerals, consumer 39% • Fuel: +1% Automotiv
Slide 8: Nadeem Velani, Chief Financial Officer
iron, NADEEM VELANI CHIEF FINANCIAL OFFICER cP
Slide 9: Financial Performance
FINANCIAL PERFORMANCE Third Quarter FX-Adjusted (In millions, except percentages and per share data) 2017 2016 Change % Change % (2) Total revenues $ 1,595 $ 1,554 3 5 Operating expenses Compensation and benefits 256 294 (13) (11) Fuel 150 138 9 12 Materials 45 39 15 15 Equipment rents 35 43 (19) (1
Slide 10: Free Cash and Guidance
FREE CASH AND GUIDANCE For nine months ended September 30 (in millions) 2017 2016 Cash provided by operating activities $1,449 $1,321 Capital expenditures (895) (902) Proceeds from sale of properties & other assets 29 87 Other 5 (2) Cash used in investing activities (861) (817) Effect of FX on USD-d
Slide 11: Keith Creel, President & Chief Executive Officer
= = pen = KEITH CREEL PRESIDENT & CHIEF EXECUTIVE OFFICER cP
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Slide 13: Operating Performance
OPERATING PERFORMANCE Average terminal dwell Average network speed Car miles per car day Locomotive productivity (hours) (mph) (miles) (GTMs per available HP) 156 7.0 23.9 153 203 205 6.6 23.1 6% better 3% worse 2% better 1% better Q3'16 Q3'17 Q3'16 Q3'17 Q3'16 Q3'17 Q3'16 Q3'17 Average train weight
Slide 14: Key Modeling Sensitivities
KEY MODELING SENSITIVITIES Key sensitivities Foreign exchange rate* For every $0.01 decline in the Canadian dollar: • Revenues increase by approximately $25 million • Expenses increase by approximately $13 million • Interest expense increases by approximately $3 million *Sensitivities are quoted on
Slide 15: Investor Relations Contacts
4 M4 A 2 1% VY, ~ w, — MAEGHAN ALBISTON ASSISTANT VICE PRESIDENT INVESTOR RELATIONS / 7 vy, 7 ‘ ' af Fre ANDREW ELFORD Oe | \i% DIRECTOR aoa INVESTOR RELATIONS 403-319-3591 [email protected] investor.cpr.ca