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 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 optionality for low-cost capacity expansion.

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

• 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 were $13.9B, with core adjusted combined operating income of $5.3B and a core adjusted combined operating ratio of 62.0%.

• Core adjusted combined diluted EPS for 2023 was $3.84, with double-digit growth targeted for 2024 and high single-digit revenue growth expected through 2028.

• Annual capital expenditures are projected at $2.6–$2.8B, with a focus on safety, reliability, and growth.

• The balance sheet remains strong, with a target leverage ratio of 2.5x adjusted combined net debt to EBITDA and significant liquidity available.

• Strong free cash generation and a disciplined approach to capital planning support ongoing investments and shareholder returns.

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 positions in grain, coal, potash, energy, chemicals, and automotive.

• The company is the only Class 1 railway with significant grain franchises in both Canada and the U.S., and is expanding high-efficiency grain train capabilities.

• Innovative supply chain solutions, such as closed-loop automotive logistics and cold storage partnerships, enhance customer value and network utilization.

• Industry-leading safety performance is supported by technology investments and a culture of accountability, with management compensation tied to safety outcomes.