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 employing 20,000 people.

• The network offers access to 30+ ports, 30+ auto facilities, 200+ transloads, and 90+ shortlines, with unique land assets for future growth.

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

• Investments in infrastructure, such as the Laredo Bridge expansion, are set to double cross-border capacity and support growth.

• The company leverages a precision railroading model for operational efficiency and disciplined growth.

Financial performance and outlook

• 2023 combined total revenues reached $13.9B, with core adjusted combined operating income of $5.3B and a core adjusted combined operating ratio of 62%.

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

• Double-digit core adjusted combined diluted EPS growth is projected for 2024, with capital expenditures of $2.75B.

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

• Strong balance sheet with a path to 2.5x adjusted net debt/EBITDA and significant liquidity maintained.

Diversified business mix and market reach

• Freight revenue is diversified across bulk (34%), merchandise (47%), and intermodal (19%) segments.

• Geographic distribution includes 41% cross-border, 37% domestic, and 22% global/Asia-related freight revenue.

• Grain is the largest market segment, with strategic positioning in both Canadian and U.S. grain regions.

• The network supports major markets in potash, fertilizers, coal, metals, forest products, energy, chemicals, plastics, automotive, and intermodal.

• Unique single-line service enables competitive cross-border and international intermodal offerings.