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 in major markets such as Kansas City, Dallas, Vancouver, and Toronto provide significant room for low-cost capacity expansion.

• The company leverages a precision railroading model, driving operational efficiency, longer and heavier trains, and reduced dwell times.

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

Financial performance and outlook

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

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

• The outlook for 2024 projects double-digit core adjusted combined diluted EPS growth and capital expenditures of $2.75 billion.

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

• Strong balance sheet with a path to reduce leverage to 2.5x adjusted combined net debt to EBITDA, supported by significant liquidity and fixed-rate debt.

Diversified business mix and market leadership

• The freight revenue mix is balanced across bulk (34%), merchandise (47%), and intermodal (19%), with grain, energy, chemicals, and automotive as key segments.

• The network directly connects major grain, potash, coal, steel, forest products, energy, and automotive markets across North America.

• Innovative service offerings, such as high-efficiency grain trains and closed-loop automotive supply chains, drive customer value and operational efficiency.

• The company is positioned to benefit from nearshoring trends, with strong foreign direct investment in Mexico and unique access to industrial corridors.

• Strategic partnerships, such as with Americold for cold storage and Maersk for transload facilities, enhance supply chain integration.