Canadian Pacific Kansas City Limited · TSX:CP
Canadian Pacific Kansas City — Q2 2024 Earnings Presentation
20 slides from Canadian Pacific Kansas City's earnings presentation, Jul 30, 2024
Slide 1: Q2 2024 Earnings Review
Q2 2024 EARNINGS REVIEW July 30, 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 in both the U.S. and Canada. Forward-looking information includes, but i
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 (“GAAP”), unless otherwise noted. Financi
Slide 4: Keith Creel
KEITH CREEL PRESIDENT & CHIEF OPERATING OFFICER
Slide 5: Highlights
HIGHLIGHTS Q2 2024 vs. Q2 2023 • Strong execution and results showcase the Revenues $3.6 billion | +14% Train Speed (miles per hour)(1) 19.3| +6% CPKC Advantage Combined Total Revenues(1) Terminal Dwell (hours)(1) $3.6 billion | +8% 9.5 | -9% • Continued impressive performance across Operating Ratio
Slide 6: John Brooks
JOHN BROOKS CHIEF MARKETING OFFICER
Slide 7: Revenue Highlights
REVENUE HIGHLIGHTS TOTAL REVENUE TOTAL REVENUE +14%VS Q2 2023 Reported +8% VS CPKC COMBINED Q2 2023 (1) RTMs: +10% RTMs: +6% $/RTM: +4% $/RTM: +2% Carloads: +1% Carloads: -4% $/Carload: +12% $/Carload: +13% (1) Represents combined operating information to illustrate the estimated effects of the acqu
Slide 8: Revenue Update – Q2
REVENUE UPDATE – Q2 (1) BULK MERCHANDISE INTERMODAL • Strong growth in U.S. and Canadian grain • Diversified growth in ECP from crude, along • Domestic intermodal growth, despite from shipments of corn to the Pacific with synergy gains across LPGs, plastics challenging demand environment Northwest,
Slide 9: Nadeem Velani
NADEEM VELANI CHIEF FINANCIAL OFFICER
Slide 10: Financial Performance
FINANCIAL PERFORMANCE Second Quarter (in millions, except percentages and per share data) 2024 2023 Change FX Adjusted Change(2) Total revenues, as reported $ 3,603 $ 3,174 14% Combined total revenues(1) 3,603 3,338 8% 6% Total operating expenses, as reported 2,336 2,230 5% Combined total operating
Slide 11: Operating Expenses – Q2 vs Reported Q2 2023
OPERATING EXPENSES – Q2 vs Reported Q2 2023 Second Quarter (in millions, except percentages) 2024 2023 Change Compensation and benefits $ 612 $ 659 (7%) Fuel 466 397 17% Materials 97 98 (1%) Equipment rents 82 80 3% Depreciation and amortization 473 410 15% Purchased services and other 606 586 3% To
Slide 12: Operating Expenses – Q2 vs CPKC Combined Q2 2023
OPERATING EXPENSES – Q2 vs CPKC Combined Q2 2023(1) Second Quarter $35 FX Adjusted $2,353 $26 (in millions, except percentages) 2024 2023 Change Change (1) $38 $2,336 $(6) $(4) $(18) $(88) Compensation and benefits(2) $ 612 $ 690 (11%) (13%) Fuel 466 418 11% 9% Materials(3) 97 102 (5%) (6%) Equipmen
Slide 13: Below the Line
BELOW THE LINE Second Quarter Year-to-Date (in millions) 2024 2023 2024 2023 Operating income, as reported $ 1,267 $ 944 $ 2,416 $ 1,773 Less: Equity earnings of Kansas City Southern — (26) — (230) Other (income) expense (40) 21 (42) 23 Other components of net periodic benefit recovery (88) (83) (17
Slide 14: Adjusted Combined Free Cash
ADJUSTED COMBINED FREE CASH Second Quarter Year-to-Date (in millions) 2024 2023 2024 2023 CPKC Cash provided by operating activities as reported $ 1,278 $ 892 $ 2,293 $ 1,774 CPKC Cash used in investing activities (782) (617) (1,324) (1,019) Effect of foreign currency fluctuations on foreign currenc
Slide 15: 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 16: 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 17: 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 18: 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 19: Operating Performance vs. CPKC Combined Q2 2023
OPERATING PERFORMANCE (1) VS. CPKC COMBINED Q2 2023 Average train speed Average train length Average train weight (miles per hour) (feet) (tons) 7,761 7,747 9,090 8,982 19.3 18.2 6% Improvement Flat 1% Improvement Q2'24 Q2'23 Q2'24 Q2'23 Q2'24 Q2'23 Fuel Efficiency FRA personal injuries (2) FRA trai
Slide 20: Operating Performance vs. CPKC Combined YTD 2023
OPERATING PERFORMANCE (1) VS. CPKC COMBINED YTD 2023 Average train speed Average train length Average train weight (miles per hour) (feet) (tons) 7,694 8,860 9,069 7,538 19.2 17.6 9% Improvement 2% Decline 2% Decline 2024 2023 2024 2023 2024 2023 Fuel Efficiency FRA personal injuries (2) FRA train a
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