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, offering 20,000 route miles and access to 30+ ports and 200+ transload facilities.

• 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, Vancouver, and Toronto provide low-cost growth opportunities.

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

• The network supports diversified growth across bulk, merchandise, automotive, and intermodal segments, leveraging cross-border trade and nearshoring trends.

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.

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

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

• Strong balance sheet management aims for a target leverage of 2.5x adjusted combined net debt to EBITDA, supported by significant liquidity.

Operational excellence and market leadership

• Industry-leading management and a high-performance culture have delivered 158% total shareholder return from 2018 to Q1 2024, outperforming major indices.

• The company maintains the lowest train accident frequency in North America, with 60% of capital investments allocated to safety and replacement initiatives.

• The precision railroading model enables best-in-class service at the lowest cost, driving strong margins and free cash generation.

• The network is uniquely positioned to serve major grain, potash, coal, steel, forest products, energy, automotive, and intermodal markets across North America.

• Innovative service offerings, such as the Mexico Midwest Express and exclusive access to the Port of Lázaro Cárdenas, support growth in cross-border and international intermodal traffic.