Canadian Pacific Kansas City Limited · TSX:CP
Canadian Pacific Kansas City — Q3 2023 Earnings Presentation
21 slides from Canadian Pacific Kansas City's earnings presentation, Oct 25, 2023
Slide 1: Q3 2023 Earnings Review
Q3 2023 EARNINGS REVIEW October 25, 2023
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. NO
Slide 4: Keith Creel, President & Chief Executive Officer
KEITH CREEL PRESIDENT & CHIEF EXECUTIVE OFFICER
Slide 5: CPKC Highlights
CPKC HIGHLIGHTS • Updated Guidance: CPKC de Mexico Operating Metrics • Expect full-year 2023 core Network speed (Miles per hour) Average terminal dwell (hours) adjusted combined diluted 10.6 EPS(1) to be flat to slightly 8.1 18.1 positive versus 2022 15.6 31% Improvement 14% Improvement • Since ince
Slide 6: Mark Redd, Chief Operating Officer
MARK REDD CHIEF OPERATING OFFICER
Slide 7: Q3 Operating Performance
Q3 OPERATING PERFORMANCE VS. CPKC COMBINED(1) Q3 2022 • Continued strong safety FRA personal injuries (2) (per 200,000 employee-hours) FRA train accident frequency (per million train-miles) performance 1.50 1.43 1.30 0.97 • Focus on aligning operating 35% Improvement 9% Improvement practices across
Slide 8: John Brooks, Chief Marketing Officer
JOHN BROOKS CHIEF MARKETING OFFICER
Slide 9: Revenue Highlights – Q3
REVENUE HIGHLIGHTS – Q3 TOTAL REVENUE TOTAL REVENUE +44% VS CP Q3 2022 -4% VS CPKC COMBINED(1) Q3 2022 RTMs: +31% RTMs: -3% $/RTM: +10% $/RTM: -1% Carloads: +55% Carloads: -5% $/Carload: -7% $/Carload: +1% (1) Represents combined financial and operating information to illustrate the estimated effect
Slide 10: Revenue Update
REVENUE UPDATE (1) BULK MERCHANDISE INTERMODAL • Growth in grain due to improved 2022 • Lower ECP volumes due to headwinds in • Higher inventory levels and market Canadian grain harvest and solid market crude from customer facility maintenance softening led to a decline in domestic demand for U.S. g
Slide 11: Nadeem Velani, Chief Financial Officer
NADEEM VELANI CHIEF FINANCIAL OFFICER
Slide 12: Financial Performance
FINANCIAL PERFORMANCE Third Quarter (in millions, except percentages and per share data) 2023 2022 Change % FX Adjusted Change %(1) Total revenues, as reported $ 3,339 $ 2,312 44% Combined total revenues(1) 3,339 3,394 (4)% (7)% Total operating expenses, as reported 2,166 1,375 58% Combined total op
Slide 13: Reported Operating Expenses
REPORTED OPERATING EXPENSES vs CP Q3 2022 Third Quarter (in millions, except percentages) 2023 2022 Change % Compensation and benefits $ 598 $ 393 52% Fuel 430 358 20% Materials 90 66 36% Equipment rents 91 33 176% Depreciation and amortization 451 213 112% Purchased services and other 506 312 62% T
Slide 14: Operating Expenses vs CPKC Combined Q3 2022
OPERATING EXPENSES vs CPKC Combined Q3 2022 (1) $71 Third Quarter $2,184 $27 $2,166 FX Adjusted $(22) $23 $- (in millions, except percentages) 2023 2022 Change % Change %(1) $(113) $(4) Compensation and benefits(2) $ 598 $ 601 —% (4)% Fuel 430 516 (17)% (21)% Materials(3) 90 91 (1)% (4)% Equipment r
Slide 15: Below the Line
BELOW THE LINE Third Quarter Year-to-Date (in millions of Canadian dollars) 2023 2022 2023 2022 Operating Income $ 1,173 $ 937 $ 2,946 $ 2,340 Less: Equity earnings of Kansas City Southern — (221) (230) (627) Other expense 13 7 36 13 Other components of net periodic benefit recovery (85) (102) (254)
Slide 16: Adjusted Combined Free Cash
ADJUSTED COMBINED FREE CASH Third Quarter Year-to-Date (in millions of Canadian dollars) 2023 2022 2023 2022 CPKC Cash provided by operating activities as reported $ 1,027 $ 1,102 $ 2,801 $ 2,422 CPKC Cash used in investing activities (742) (410) (1,761) (978) Effect of foreign currency fluctuations
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: Appendix
APPENDIX
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 2023 Core adjusted combined diluted EPS(1) to be flat to slightly positive versus 2022 core adjusted co
Slide 20: Q3 Operating Performance
Q3 OPERATING PERFORMANCE VS. CPKC COMBINED (1) 2022 Average train speed Average train length Average train weight (miles per hour) (feet) (tons) 17.7 18.0 8,974 9,203 7,737 7,798 2% Decline 1% Decline 2% Decline Q3'23 Q3'22 Q3'23 Q3'22 Q3'23 Q3'22 Fuel Efficiency FRA personal injuries (2) FRA train
Slide 21: YTD Combined Operating Performance
YTD COMBINED OPERATING PERFORMANCE VS. CPKC COMBINED (1) 2022 Average train speed Average train length Average train weight (miles per hour) (feet) (tons) 18.2 9,037 9,108 17.6 7,708 7,667 3% Decline 1% Improvement 1% Decline 2023 2022 2023 2022 2023 2022 Fuel Efficiency FRA personal injuries (2) FR
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