Canadian Pacific Kansas City

Good afternoon. My name is Gretchen, and I will be your conference operator today. At this time, I would like to welcome everyone to Canadian Pacific's third quarter 2022 conference call. The slides accompanying today's call are available at investor.cpr.ca. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question, simply press star, then the number one on your telephone keypad. If you'd like to withdraw your question, press the pound key. I would now like to introduce Chris DeBrun, Managing Director, Investor Relations and Treasury, to begin the conference.

Thank you, Gretchen. Good afternoon, everyone, and thank you for joining us today. Before we begin, I want to remind you this presentation contains forward-looking information. Actual results may differ materially. The risks, uncertainties, and other factors that could influence actual results are described on slide two in the press release and in the MD&A filed with Canadian and U.S. regulators. This presentation also contains non-GAAP measures outlined on slide three. With me here today is Keith Creel, our President and Chief Executive Officer, John Brooks, our Executive Vice President and Chief Marketing Officer, and Megan Albiston, our Vice President of Capital Markets, who is standing in for Nadine. The formal remarks will be followed by Q&A. In the interest of time, we would appreciate if you limit your questions to one. It is now my pleasure to introduce our president and CEO, Mr. Keith Creel.

Thanks, Chris. Listen, before I get into the results, as Chris mentioned, and I'm sure you'll notice, Nadine's not with us here today, but he sends his best from Boston where he's attending a program at Harvard, which obviously is a part of our commitment at CP to invest in our most precious assets, which are our people. And I'll tell you, I've always felt that the measure of the impact of a leader is felt best when he's not around or she's not around for a prescribed period of time. I'm sure that he's proud to see the great job that Megan, Ian, and Chris are doing in his absence. It certainly reflects well for him. Some might suggest how in the world could Nadine be at Harvard in these times that we're facing. I would suggest there's never been a better time in this lull before what we hope is an expected ramp-up as we get into what we expect to be and hope to be a favorable ruling from the SDB. He'll be back, finish the course, I think, end of this month. After that, though, don't tell him. He may not know this yet, but he's going to be out on trains in the coldest of winters learning a bit more about the operation. I know that he's going to step into that and be a better railroader as a result of that. So we'll get him back in the saddle, I would suggest, end of January, just in time for funner times ahead. Now to our results. I want to start with a special thank you to Mark Redd, the operating team, and our 13,000 railroaders that continue to evolve our safety culture, allowing our more folks every day to go home safe. Their efforts in the quarter produced a remarkable 76% reduction in our train accident ratio to an all-time record low of a .37 FSU and equally impressive performance on the personal injury side with a reduction of 12% year-over-year to a .86 personal injury ratio. On the financial side, Second quarter revenues of $2.3 billion in OR, operating ratio of 58.7, and core EPS of $1.01. Speaking to the metrics, on the operating side, with 6.2% of RTM growth, the network remained fluid, no degradation to train speed, weights increased, which spells productivity. Lengths increased, respectively, 3% and 4%. Crew starts in spite of 6.2% additional business. a modest 1.5% increase, and even crew recruits improved as well year over year. So the railway is running well, it's running safe, and that's the key to our success is you run a truly successful precision scheduled operating model. On the resourcing side, we said all along this is going to be a tell the two halves. We've ramped up our hiring to make sure that we're resourced properly for this great grain harvest that we're about to be taking to Tidewater. We certainly, you'll see it in the numbers in the third quarter. The largest demand, though, obviously coming into the fourth quarter. We've hired about 1,500 conductors year-to-date, all in about 2,000 craft employees. We're investing in our physical plant. We're accelerating some capital into this year, again, to make sure our physical plant is ready for future opportunities in 2023. So suffice it to say, overall, we're in excellent shape from a resource standpoint. The network is ready and willing and able to handle this crisis. this very encouraging grain crop as well as the strong demand in potash and intermodal that John and his team are winning and bringing to the operating team to convert day in and day out. Let's say a couple words on the CPKC transaction. Obviously, it's been pretty exciting the last couple of weeks, last month. You know, I'm extremely pleased that I had the opportunity to personally sit in through the public hearings in Washington, D.C. John and I were there, obviously Pat, as well as John Orr and our regulatory team, James Clements. It was a pleasure to be able to lay out in detail our facts and our very compelling truth-based case on this very transformational merger that we're pursuing. You know, some have suggested in some of the readings and maybe some of the talks that I've had that the hearings stretch out certainly longer than they expected. And I'll tell you, I've said this to the SDB, and I'll say this publicly now, I applaud the seriousness and the thoroughness in which the SDB handled these hearings. I know for certain they take their job seriously. They want to make sure that the facts are heard and make sure they get this right. And I can tell you that was a fair process that allowed all parties a fair chance to share their facts, to share their perceptions of what they believe to be true, as well as anything they had to say positive or against the transaction. And I'll tell you, having listened to all the testimony, I'm never more convinced that about the benefits this merger will create for all stakeholders, for the public interest, for our employees, for our economies of these three nations, for our customers, for the environment. Check all the boxes. You know, perfect is a high stand, but I tell you, this is an ideal merger and a very uniquely unlike any in the rail industry's history in the past or in the future. So in terms of next steps, as we all know, we filed our final brief. All parties did this past Friday. We continue to anticipate a decision sometime in the first quarter of 2023. So with that said, let me turn it over to John. I'll let him provide a bit of color on the business and then Megan to cover the numbers, and then we'll transition to taking your questions. All right.