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 30+ auto facilities.

• The network offers unique cross-border advantages, including the fastest intermodal service between Mexico and the U.S. Midwest and exclusive access to key ports like Lázaro Cárdenas.

• Strategic land holdings and surplus acreage in major markets provide significant optionality for low-cost capacity expansion and new facilities.

• Investments in infrastructure, such as the Laredo Bridge expansion, are set to double capacity at critical gateways.

• The company leverages predictive analytics and patented technology to enhance safety, efficiency, and operational reliability.

Financial performance and outlook

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

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

• 2024 guidance targets double-digit core adjusted combined diluted EPS growth and mid-single digit RTM growth, with $2.75B 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–$2.8B.

• Strong balance sheet management with a target leverage ratio of 2.5x adjusted combined net debt to EBITDA and significant liquidity maintained.

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 domestic reach.

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

• The company has outperformed peers in total shareholder return, achieving 158% growth from 2018 to Q1 2024.

• Ongoing innovation in supply chain solutions, such as cold storage ecosystems and closed-loop automotive logistics, enhances customer value.