Canadian Pacific Kansas City (CP) Investor presentation summary

Strategic transformation and network expansion

• The merger created the only single-line rail network connecting Canada, the U.S., and Mexico, spanning 20,000 route miles and serving 30+ ports and 200+ transload facilities.

• The network offers unique cross-border advantages, including 24-hour rail crossing at Laredo and direct access to key industrial and agricultural regions.

• Strategic land holdings and surplus acreage in major markets like Kansas City, Dallas, Vancouver, and Toronto provide significant room for low-cost capacity expansion.

• Investments in infrastructure, such as the Laredo Bridge expansion and new export terminals, support future growth and enhance network resilience.

• The company leverages predictive analytics and patented technology to improve safety, efficiency, and asset utilization across its network.

Financial performance and outlook

• Combined total revenues for 2023 reached $13.9 billion, with core adjusted combined operating income of $5.3 billion and a core adjusted combined operating ratio of 62.0%.

• Net income attributable to controlling shareholders was $3.9 billion, with core adjusted combined diluted EPS at $3.84.

• The outlook for 2024 projects double-digit core adjusted combined diluted EPS growth and capital expenditures of $2.75 billion.

• Long-term guidance (2024–2028) targets high single-digit revenue growth, double-digit EPS growth, and annual capital expenditures of $2.6–$2.8 billion.

• The company maintains a strong balance sheet, targeting a leverage ratio of 2.5x adjusted combined net debt to EBITDA, with significant liquidity and fixed-rate debt.

Operational excellence and market leadership

• Precision railroading and disciplined execution have driven a 41% improvement in average train speed and a 53% increase in average train weight since 2011.

• The diversified business mix includes bulk (34%), merchandise (47%), and intermodal (19%) segments, with strong cross-border and international growth.

• The company leads in grain, potash, coal, automotive, energy, and intermodal markets, leveraging its network to connect major production and consumption centers.

• Industry-leading safety performance, with the lowest FRA train accident frequency and a 12% improvement in personal injury frequency since 2020.

• Total shareholder return from 2018 to Q1 2024 outperformed the S&P 500 and industry peers.