Canadian Pacific Kansas City (CP) The Scotiabank Transportation & Industrials Conference summary

Business performance and growth

• Achieved industry-leading volume growth, with RTMs up 5% for the year and double-digit EPS growth expected to continue.

• Maintained leadership in safety, reducing train accident frequency and personal injury rates.

• Increased dividend by 20% and completed a 4% share repurchase, returning significant cash to shareholders.

• Confident in finishing the year strong, with November volumes up 7% and positive revenue mix trends.

• Operating ratio improvements are expected to continue sequentially and year over year.

Strategic initiatives and synergies

• Growth driven by self-help initiatives, market share gains, and synergies from the KCS acquisition.

• Revenue synergies for the year expected to reach $1.1 billion (USD), with $200–$250 million more in 2026.

• Cost synergies progressing, with further procurement and headcount efficiencies anticipated.

• New facilities, such as the Kansas City cold storage terminal, are enhancing network value and customer stickiness.

• Some synergy projects delayed due to trade policy uncertainty, but further opportunities expected through 2028.

Capital allocation and financial outlook

• 2023 CapEx at a record CAD 2.9 billion, with future spending shifting from network to rolling stock.

• Long-term CapEx guidance remains CAD 2.6–2.8 billion, with a reduction expected in 2026.

• Comfortable with leverage in the high 2s, prioritizing buybacks over dividends when share price is low.

• Flexibility in capital allocation allows for opportunistic investments or acquisitions if industry changes arise.

• Return on invested capital (ROIC) expected to return as a key metric as synergies are realized and returns improve.