Canadian Pacific Kansas City Limited · TSX:CP
Canadian Pacific Kansas City — Q3 2020 Earnings Presentation
19 slides from Canadian Pacific Kansas City's earnings presentation, Oct 20, 2020
Slide 1: Q3 2020 Earnings Review
Q3 2020 EARNINGS REVIEW OCTOBER 20, 2020
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS The following investor presentation contains certain forward-looking information within the and operating costs; changes in fuel prices; uncertainties of investigations, proceedings or other meaning of applicable securities laws relating, but not limited to, statements con
Slide 3: Note on Non-GAAP Measures
NOTE ON NON-GAAP MEASURES 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. CP presents Non-GAAP measures in this pr
Slide 4: Keith Creel
KEITH CREEL PRESIDENT & CHIEF EXECUTIVE OFFICER
Slide 5: Highlights
HIGHLIGHTS CP’s First Intermodal train to Saint John in 25 Years • Continued strong operating metrics as volumes improved • Carrying momentum into Q4 and 2021 • New multi-year contract with Maersk • Volumes into Port of Vancouver and Port of Montreal • State of the art transload • Investing in techn
Slide 6: Operating Performance
OPERATING PERFORMANCE FRA train accident frequency Average train length Locomotive productivity (per million train-miles) (feet) (GTMs/operating horsepower) 8,082 207 208 7,446 1.31 1.13 14% Improvement 9% Longer Flat Q3'20 Q3'19 Q3'20 Q3'19 Q3'20 Q3'19 FRA personal injuries Average train weight Fue
Slide 7: John Brooks
JOHN BROOKS CHIEF MARKETING OFFICER
Slide 8: Revenue Highlights Q3
REVENUE HIGHLIGHTS Q3 TOTAL REVENUE FX-adjusted revenue variance(1) -6% Grain 11% Coal -29% Potash 13% VS Q3 2019 Fertilizers & sulphur -3% Forest products 8% • RTMs: -6% Energy, chemicals & plastics -16% Metals, minerals & consumer -25% • FX: flat Automotive 7% • Fuel: -3% Intermodal -6% • Price /
Slide 9: Revenue Outlook
REVENUE OUTLOOK BULK: 40% MERCHANDISE: 39% INTERMODAL: 21% • Four consecutive record quarters • Merchandise volumes excluding • Continued strong demand in for Canadian grain across all crude and frac are strengthening as Domestic driven by restocking and metrics; outlook remains strong demand return
Slide 10: Nadeem Velani
NADEEM VELANI CHIEF FINANCIAL OFFICER
Slide 11: Financial Performance Q3
FINANCIAL PERFORMANCE Q3 Third Quarter FX Adjusted (in millions, except percentages and per share data) 2020 2019 Change % Change%(1) Total revenues $ 1,863 $ 1,979 (6)% (6)% Compensation and benefits 382 355 8% 7% Fuel 140 210 (33)% (34)% Materials 53 50 6% 6% Equipment rents 39 33 18% 15% Deprecia
Slide 12: Disciplined Approach to Managing Capital
DISCIPLINED APPROACH TO MANAGING CAPITAL Adjusted ROIC(1) Dividend ($/share CAD) 16.9% 16.2% Selected Key Metrics 14.7% 3.140 14.0% 2.513 2.188 1.850 2016 2017 2018 2019 Strong Capital Returns Consistent Dividend Growth Return On Invested Capital ("ROIC")(1) 14.4% 20.5% 15.3% 17.9% 2016 2017 2018 20
Slide 13: 2020 Revised Outlook Assumptions
2020 REVISED OUTLOOK AT LEAST MID-SINGLE DIGIT ADJUSTED DILUTED EPS(1)(2) GROWTH LOW SINGLE DIGIT RTM DECLINE CAPITAL EXPENDITURES $1.6B ASSUMPTIONS • Expected effective tax rate of approximately 24.8% • Other components of net periodic benefit recovery to decrease by approximately $40 million vs. 2
Slide 14: Investor Relations Contacts
INVESTOR RELATIONS CONTACTS MAEGHAN ALBISTON Assistant Vice-President CHRIS DE BRUYN Director 403-319-3591 investor@cpr.ca investor.cpr.ca
Slide 15: Appendix
APPENDIX CP
Slide 16: Technology Spotlight – Enhancing Safety and Efficiency
TECHNOLOGY SPOTLIGHT – ENHANCING SAFETY AND EFFICIENCY Inspection Portal Cold Wheel Broken Rail Detection • Recently received exemption from • Leveraging hotbox detectors to • CP-developed technology that Transport Canada identify brakes that may be allows us to identify broken rail in improperly ap
Slide 17: Commitment to ESG & Sustainability Reporting
COMMITMENT TO ESG & SUSTAINABILITY REPORTING CP has a strong history of ESG disclosures and leading sustainability practices Began sustainability reporting in 2001 Annual CDP reporting since ~2006 Industry-leading practices: ‒ Safest railroad in North America for the last 14 consecutive years
Slide 18: Operating Responsibly: Ogden Yard Transformation
OPERATING RESPONSIBLY CASE STUDY: OGDEN YARD TRANSFORMATION • In 2011, CP’s Ogden yard located in Calgary, AB was an inefficient industrial yard powered by half century-old natural gas fired boilers and a three-quarter century old steam tunnel system that supplied heating throughout all the building
Slide 19: Leveraging Our Land Holdings: Vancouver Transload
LEVERAGING OUR LAND HOLDINGS: VANCOUVER TRANSLOAD Today Optimizing our Land Tomorrow • On September 15, CP announced a new transload facility that will be the first of its kind port to transload service via rail, removing trucks from the equation in Greater Vancouver • Achieves growth through sustai
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