Canadian Pacific Kansas City (CP) Investor presentation summary

Strategic overview and network expansion

• The combination has created a unique North American rail network spanning 20,000 route miles across Canada, the U.S., and Mexico, offering unmatched reach and connectivity to key markets and ports.

• The network includes over 30 ports, 30+ auto facilities, 200+ transloads, and 90+ shortlines, supported by strategic land assets for future growth.

• Strategic land holdings in major hubs like Kansas City, Dallas, Vancouver, and Toronto provide significant room for expansion and new facilities.

• The company leverages a precision railroading model, focusing on operational efficiency, reliability, and disciplined growth.

• Integration of predictive analytics and advanced technology enhances safety, efficiency, and asset utilization across the network.

Financial performance and outlook

• 2024 total revenues reached $14.5B CAD, up 16% year-over-year, with operating income rising 18% to $5.2B CAD.

• Core adjusted combined diluted EPS grew 11% to $4.25, with a core adjusted operating ratio improvement of 70bps to 61.3%.

• 2025 guidance targets 10–14% core adjusted diluted EPS growth, mid-single digit RTM growth, and $2.9B in capital expenditures.

• Long-term (2024–2028) outlook projects high single-digit revenue growth, double-digit core adjusted EPS growth, and annual capital expenditures of $2.6–$2.8B.

• A new share repurchase program for ~37 million shares (~4% of outstanding) was announced, with a target leverage ratio of 2.75x adjusted net debt to EBITDA.

Operational excellence and market positioning

• Precision railroading has driven a 7% improvement in average train speed, 5% better terminal dwell, and 6% higher locomotive productivity.

• The diversified business mix includes bulk (35%), merchandise (47%), and intermodal (18%), with strong cross-border and domestic revenue streams.

• The network is uniquely positioned for growth in grain, potash, coal, steel, forest products, energy, chemicals, plastics, automotive, and intermodal markets.

• Strategic partnerships and innovations, such as the Americold cold storage ecosystem and the Gemini Alliance for international intermodal, enhance service offerings.

• The Mexico nearshoring trend and robust U.S.-Mexico trade growth provide significant opportunities for cross-border freight expansion.