Canadian Pacific Kansas City (CP) Investor presentation summary

Strategic transformation and network expansion

• The merger created the only rail network connecting Canada, the U.S., and Mexico, spanning 20,000 route miles and employing 20,000 people, enabling unmatched market reach and service integration.

• Precision railroading and disciplined execution have driven significant improvements in train speed, weight, and network capacity since 2011.

• Strategic land holdings and surplus acreage in key markets like Kansas City, Dallas, Chicago, Vancouver, and Toronto provide low-cost growth opportunities and optionality for future expansion.

• Investments in technology, such as predictive analytics and remote inspection portals, enhance safety, efficiency, and operational reliability.

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.

• 2024 guidance targets double-digit core adjusted combined diluted EPS growth, mid-single digit RTM growth, and $2.75 billion in capital expenditures.

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

• Strong balance sheet with a path to reduce leverage to 2.5x adjusted combined net debt to EBITDA, supported by significant liquidity and disciplined capital planning.

Diversified business mix and market leadership

• Freight revenue is balanced across bulk (34%), merchandise (47%), and intermodal (19%), with strong cross-border and international exposure.

• Leading positions in grain, potash, coal, energy, chemicals, automotive, and intermodal markets, leveraging network strengths to serve key industries and regions.

• Innovative service offerings, such as the Mexico Midwest Express and closed-loop automotive supply chains, drive competitive differentiation.

• Strategic partnerships and investments, including cold storage with Americold and export terminals, support growth and supply chain resilience.