Canadian Pacific Kansas City (CP) Investor presentation summary

Strategic transformation and network expansion

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

• Precision railroading and disciplined execution have driven industry-leading service, operational efficiency, and margin improvement.

• The network features 30+ ports, 30+ auto facilities, 200+ transloads, and 90+ shortlines, with strategic land assets supporting future growth.

• Surplus acreage in key hubs like Kansas City, Dallas, Vancouver, and Toronto provides optionality for low-cost capacity expansion and new facilities.

• Strategic investments, such as the Laredo International Bridge expansion, enhance cross-border capacity and support growth between Mexico, the U.S., and Canada.

Financial performance and outlook

• 2024 total revenues reached $14.5B CAD, up 16% year-over-year, with core adjusted combined operating income up 6% and core adjusted combined diluted EPS up 11%.

• Operating ratio improved to 64.4% as reported and 61.3% on a core adjusted basis.

• 2025 outlook targets 12–18% core adjusted diluted EPS growth, mid-single digit RTM growth, and $2.9B in capital expenditures.

• Long-term guidance (2024–2028) calls for 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 net debt to EBITDA.

Diversified business mix and market leadership

• Freight revenue is well-diversified: 35% bulk (grain, coal, potash), 47% merchandise (metals, minerals, consumer products, energy, chemicals, plastics, forest products, automotive), and 18% intermodal.

• Grain is the largest segment, with high-efficiency trains and new hopper cars enabling >40% more grain per train and fewer cycles.

• Leading carrier of export potash and coal, with new export terminal development and hydrogen locomotive pilot programs enhancing sustainability.

• Automotive and intermodal segments benefit from single-line service, closed-loop supply chains, and truck-competitive cross-border offerings.

• Merchandise business leverages network reach to connect steel, forest products, energy, and chemicals across North America.