Canadian Pacific Kansas City Limited · TSX:CP
Canadian Pacific Kansas City — Canadian Pacific — Q3 2019 Earnings Presentation
16 slides from Canadian Pacific Kansas City's earnings presentation, Oct 23, 2019
Slide 1: Q3 2019 Earnings Review
Q3 2019 EARNINGS REVIEW OCTOBER 23, 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 not in market demand; inflation; changes in laws an
Slide 3: Note on Non-GAAP Measures; Note on Adoption of Lease Accounting
NOTE ON NON-GAAP MEASURES Except where noted, all figures are in millions of Canadian dollars. In this presentation, CP has provided a forward-looking Non-GAAP measure. It is not practicable to provide a reconciliation to a forward- Financial information is prepared in accordance with accounting loo
Slide 4: Keith Creel
Pr) || | | ‘a | Mt KEITH CREEL
Slide 5: Highlights: Q3 Performance
HIGHLIGHTS Q3 PERFORMANCE • Record third quarter financial Revenues results; all-time record-low ($ billions) $2.0 | +4% operating ratio Operating Income • Record operating metrics and ($ millions) $869 | +10% continued safety performance • Confident in our ability to generate Diluted EPS $4.46 | +3
Slide 6: Operating Performance
OPERATING PERFORMANCE Average terminal dwell Average train speed FRA train incident frequency (hours) (miles per hour) (per million train-miles) 7.1 22.7 21.6 22.1 1.57 6.9 6.7 21.2 5.8 1.26 1.19 1.10 16% Improvement 6% Improvement 5% Improvement 4% Improvement 30% Improvement 6% Improvement Q3'19 Q
Slide 7: John Brooks, Chief Marketing Officer
=e Ni Ss eet JOHN BROOKS CHIEF MARKETING OFFICER
Slide 8: Revenue Highlights
REVENUE HIGHLIGHTS TOTAL REVENUE FX-adjusted revenue variance(1) +4% VS Q3 2018 Grain Coal Potash -10% 6% 7% Fertilizers & sulphur 18% Forest products 3% • RTMs: -1% • FX: flat Energy, chemicals & plastics 12% • Fuel: -1% Metals, minerals & consumer -4% • Price / Mix / Other: 6% Automotive 1% Interm
Slide 9: Bulk
BULK Q3’19 VS. Q3’18 MARKET DRIVERS Freight Revenue (FX-adj.) (1) • Delayed start to the Canadian grain 4% harvest; 2019/20 crop expected to be RTMs -3% approximately 71-72 MMT Freight Revenue per RTM (FX-adj.) (1) 8% • Export potash volumes down due to delay in contract signing between potash produ
Slide 10: Merchandise
MERCHANDISE Q3’19 VS. Q3’18 MARKET DRIVERS Freight Revenue (FX-adj.) (1) • Forest products continue to benefit from 5% the growth of CP’s transload network RTMs —% • Continued growth in automotive driven by Freight Revenue per RTM (FX-adj.) (1) 5% new automotive compounds • Decline in metals and min
Slide 11: Intermodal
INTERMODAL Q3’19 VS. Q3’18 MARKET DRIVERS Freight Revenue (FX-adj.) (1) • Continued strength in international —% intermodal volumes through the Port of RTMs 3% Vancouver Freight Revenue per RTM (FX-adj.) (1) -2% • Domestic volumes mixed – retail growth offset by softness in wholesale • Expecting mod
Slide 12: Slide 12
Slide 13: Financial Performance – Q3
FINANCIAL PERFORMANCE – Q3 (In millions, except percentages and Third Quarter FX adjusted per share data) 2019 2018 Change % Change (1) % Total revenues $ 1,979 $ 1,898 4% 4% Compensation and benefits 355 365 (3%) (3%) Fuel 210 226 (7%) (8%) Materials 50 47 6% 6% Equipment rents 33 33 —% —% Deprecia
Slide 14: Free Cash
FREE CASH For the nine months ended September 30 (in millions) 2019 2018 Cash provided by operating activities $1,957 $1,781 Capital expenditures (1,147) (1,084) Other property and asset sales 18 16 Other (6) (1) Cash used in investing activities (1,135) (1,069) Effect of FX on USD-denominated cash
Slide 15: Full Year Guidance
FULL YEAR GUIDANCE (1) (1) For a full description and reconciliation of Non-GAAP Measures, see CP’s Q3 2019 Earnings Release on investor.cpr.ca
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