Canadian Pacific Kansas City Limited · TSX:CP
Canadian Pacific Kansas City — Q1 2024 Earnings Presentation
21 slides from Canadian Pacific Kansas City's earnings presentation, Apr 24, 2024
Slide 1: Q1 2024 Earnings Review
Q1 2024 EARNINGS REVIEW April 24, 2024
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This investor presentation may contain certain forward-looking information and forward-looking statements (collectively, "forward-looking information") within the meaning of applicable securities laws. Forward-looking information includes, but is not limited to, statements
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. Fi
Slide 4: Keith Creel, President & Chief Executive Officer
KEITH CREEL PRESIDENT & CHIEF EXECUTIVE OFFICER
Slide 5: Highlights
HIGHLIGHTS Q1 2024 vs. Q1 2023 • Celebrating one year of CPKC Revenues Train Speed (miles per hour)(1) • New customer solutions driving growth $3.5 billion | +55% 19.1| +13% Combined Total Revenues(1) Terminal Dwell (hours)(1) • Network performing well with year-over-year $3.5 billion | +2% 9.7 | -1
Slide 6: Mark Redd, Chief Operating Officer
MARK REDD CHIEF OPERATING OFFICER
Slide 7: Operating Performance
OPERATING PERFORMANCE (1) VS. CPKC COMBINED Q1 2023 Average Train Speed Average Terminal Dwell (miles per hour) (hours) • Strong operational performance, despite challenging weather in January 19.1 10.8 9.7 16.9 • Focus on building an aligned safety 13% Improvement 10% Improvement culture across the
Slide 8: John Brooks, Chief Marketing Officer
JOHN BROOKS CHIEF MARKETING OFFICER
Slide 9: Revenue Highlights
REVENUE HIGHLIGHTS TOTAL REVENUE TOTAL REVENUE +55% VS CP Q1 2023 +2% VS CPKC COMBINED Q1 2023 (1) RTMs: +38% RTMs: +1% $/RTM: +12% $/RTM: -% Carloads: +58% Carloads: -3% $/Carload: -2% $/Carload: +5% (1) Represents combined operating information to illustrate the estimated effects of the acquisitio
Slide 10: Revenue Update – Q1
REVENUE UPDATE – Q1 (1) BULK MERCHANDISE INTERMODAL • Strong U.S. grain partially offset by lower • Diversified growth in ECP from fuel oil, • Strong international intermodal through Canadian grain due to weaker harvest Diluent Recovery Unit (DRU) volumes, and the Ports of Vancouver and Lázaro for t
Slide 11: Nadeem Velani, Chief Financial Officer
NADEEM VELANI CHIEF FINANCIAL OFFICER
Slide 12: Financial Performance
FINANCIAL PERFORMANCE First Quarter (in millions, except percentages and per share data) 2024 2023 Change FX Adjusted Change(2) Total revenues, as reported $ 3,520 $ 2,266 55% Combined total revenues(1) 3,520 3,456 2% 1% Total operating expenses, as reported 2,371 1,437 65% Combined total operating
Slide 13: Operating Expenses – Q1 vs CP Reported Q1 2023
OPERATING EXPENSES – Q1 vs CP Reported Q1 2023 First Quarter (in millions, except percentages) 2024 2023 Change Compensation and benefits $ 690 $ 438 58% Fuel 458 326 40% Materials 94 72 31% Equipment rents 82 30 173% Depreciation and amortization 467 225 108% Purchased services and other 580 346 68
Slide 14: Operating Expenses – Q1 vs CPKC Combined Q1 2023
OPERATING EXPENSES – Q1 vs CPKC Combined Q1 2023(1) $27 $12 $2,371 First Quarter $34 FX Adjusted $12 $2,299 $15 (in millions, except percentages) 2024 2023 Change Change (1) $(23) $(5) Compensation and benefits(2) $ 690 $ 650 6% 5% Fuel 458 475 (4%) (5%) Materials(3) 94 98 (4%) (5%) Equipment rents
Slide 15: Below the Line
BELOW THE LINE First Quarter (in millions) 2024 2023 Operating income, as reported $ 1,149 $ 829 Less: Equity earnings of Kansas City Southern — (204) Other (income) expense (2) 2 Other components of net periodic benefit recovery (88) (86) Net interest expense 206 154 Income before income tax expens
Slide 16: Adjusted Combined Free Cash
ADJUSTED COMBINED FREE CASH For the three months ended March 31 (in millions) 2024 2023 CPKC Cash provided by operating activities as reported $ 1,015 $ 881 CPKC Cash used in investing activities (542) (401) Effect of foreign currency fluctuations on foreign currency-denominated cash and cash equiva
Slide 17: Investor Relations Contacts
INVESTOR RELATIONS CONTACTS CHRIS DE BRUYN Vice-President Capital Markets ASHLEY THORNE Assistant Vice-President Investor Relations 403-319-3591 investor@cpkcr.com investor.cpkcr.com
Slide 18: 2024 Outlook
2024 OUTLOOK DOUBLE-DIGIT CORE ADJUSTED COMBINED DILUTED EPS(1) GROWTH Vs. 2023 core adjusted combined diluted EPS of $3.84(1) CAPITAL EXPENDITURES $2.75B Assumptions ▪ Other components of net periodic benefit recovery will increase by approximately $23 million, from $327 million in 2023 (2) ▪ Core
Slide 19: Outlook for Long-Term Growth: 2024 - 2028
OUTLOOK FOR LONG-TERM GROWTH: 2024 - 2028 High single-digit revenue growth Double-digit core adjusted combined EPS(1) growth Key Assumptions Capital expenditures of $2.6 to $2.8 billion per year ▪ Exchange rate of $1.35 CAD/USD ▪ On-Highway Diesel price of Adjusted combined free cash(2) conversion o
Slide 20: CPKC's Sustainability Leadership
CPKC ’S SUSTAINABILITY LEADERSHIP Advancing our commitment to sustainable, long-term growth as a combined company • Published our Commitment to Climate Action • Consolidated target to reduce our well-to-wheel locomotive emissions by 36.9% by 2030 , which has been validated by the Science Based Targe
Slide 21: Operating Performance
OPERATING PERFORMANCE (1) VS. CPKC COMBINED Q1 2023 Average train speed Average train length Average train weight (miles per hour) (feet) (tons) 8,639 9,155 7,324 7,640 19.1 16.9 13% Improvement 4% Decline 6% Decline Q1'24 Q1'23 Q1'24 Q1'23 Q1'24 Q1'23 Fuel Efficiency FRA personal injuries(2) FRA tr
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