Mr. Keith Creel reports

CPKC DELIVERS STRONG FOURTH-QUARTER RESULTS; CARRYING MOMENTUM INTO 2024

Canadian Pacific Kansas City Ltd. has released its fourth quarter results, including revenues of $3.8-billion, diluted earnings per share (EPS) of $1.10 and core adjusted combined diluted EPS of $1.18.

Fourth quarter 2023 results:

• Reported operating ratio (OR) increased by 200 basis points to 61.8 per cent from 59.8 per cent in Q4 2022.
• Core adjusted combined OR decreased 220 basis points to 58.7 per cent from 60.9 per cent in Q4 2022.
• Reported diluted EPS decreased to $1.10 from $1.36 in Q4 2022.
• Core adjusted combined diluted EPS increased to $1.18 from $1.14 in Q4 2022.
• FRA-reportable (Federal Railroad Administration) train accident frequency declined 23 per cent to 1.08 from 1.40 in Q4 2022 on a combined basis.
• FRA reportable personal injury frequency declined 15 per cent to 1.10 from 1.29 in Q4 2022 on a combined basis.

"I am proud of how our team of incredible railroaders finished this transformational year with a strong fourth quarter, allowing CPKC to deliver volume growth and best-in-class earnings growth in 2023," said Keith Creel, CP Kansas president and chief executive officer. "Since our historic combination in April, 2023, our united CPKC team has steadily built momentum, bringing new competition to supply chains and creating more value for our customers, while remaining focused on service and safety."

Full-year 2023 results:

• Reported OR increased by 280 basis points to 65 per cent from 62.2 per cent in 2022.
• Core adjusted combined OR increased 30 basis points to 62 per cent from 61.7 per cent in 2022.
• Reported diluted EPS increased to $4.21 from $3.77 in 2022.
• Core adjusted combined diluted EPS increased two per cent to $3.84 from $3.77 in 2022.
• FRA-reportable train accident frequency declined 32 per cent to 0.99 from 1.45 in 2022 on a combined basis.
• FRA-reportable personal injury frequency declined 12 per cent to 1.14 from 1.30 in 2022 on a combined basis.

In 2023, CP Kansas led the industry with the lowest FRA-reportable train accident frequency among Class 1 railways, building on Canadian Pacific's legacy of 17 consecutive years of industry leadership.

Full-year 2024 guidance:

• CP Kansas expects core adjusted combined diluted EPS to grow double digits versus 2023 core adjusted combined diluted EPS of $3.84;
• Capital expenditures of $2.75-billion;
• Other components of net periodic benefit recovery will increase by approximately $23-million from $327-million in 2023.

"Looking forward to 2024, we are confident that our unique synergy opportunities, along with improving macroeconomic conditions, can overcome a weak Canadian grain crop and position us for another strong performance this year, our first full year as a combined company," Mr. Creel added. "We stand ready to deliver on our commitments to our customers and our shareholders with long-term sustainable growth."

Conference call details

CP Kansas will discuss its results with the financial community in a conference call beginning at 4:30 p.m. ET (2:30 p.m. MT) on Jan. 30, 2024.

Conference call access

Canada and United States: 800-267-6316

International: 203-518-9783

*Conference ID: CPKCQ423

Callers should dial in 10 minutes prior to the call.

Webcast

The company encourages you to access the webcast and presentation material in the investors section of its website.

A replay of the fourth quarter conference call will be available through Feb. 6, 2024, at 800-839-6136 (Canada/U.S.) or 402-220-2572 (international).

About Canadian Pacific Kansas City Ltd.

With its global headquarters in Calgary, Alta., Canada, CP Kansas is the first and only single-line transnational railway linking Canada, the United States and Mexico, with unrivalled access to major ports from Vancouver to Atlantic Canada to the Gulf of Mexico to Lazaro Cardenas, Mexico. Stretching approximately 20,000 route miles and employing 20,000 railroaders, CP Kansas provides North American customers unparalleled rail service and network reach to key markets across the continent. CP Kanas is growing with its customers, offering a suite of freight transportation services, logistics solutions and supply chain expertise.

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