Canadian Pacific Kansas City Limited

Good afternoon. My name is Travis, and I will be your conference operator today. At this time, I would like to welcome everyone to CPKC's third quarter 2023 conference call. The slides accompanying today's call are available at investor.cpkcr.com. 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 would like to ask a question, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, please press star two. I would now like to introduce Chris DeBruin, Vice President, Capital Markets, to begin the conference. Please go ahead, sir.

Chris DeBruin Thank you, Travis. 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 2 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 3. Please note, in addition to our regular quarterly financials, there is supplemental Q3 combined revenue and operating performance data available at investor.cpkcr.com, which some of today's discussion will focus on. With me here today is Keith Creel, President and Chief Executive Officer, Nadeem Villani, our Executive Vice President and Chief Financial Officer, John Brooks, our Executive Vice President and Chief Marketing Officer, and Mark Redd, our Executive Vice President and Chief Operating Officer. The formal remarks will be followed by Q&A. In the interest of time, we'd appreciate if you limit your questions to one. It is now my pleasure to introduce our President and CEO, Mr. Keith Creel.

Thanks, Chris. Let me start by thanking the CPKC family of 20,000 railroaders across our three great nations who have been hard at work providing service for our customers. The effort and passion they demonstrated each day as we integrate and execute is truly commendable. So let's take a look at the results of the quarter. The second quarter reduced revenues to $3.3 billion on volumes that were down 3% versus last year with an operating ratio of 61.7 and EPS of $0.92. So no doubt a challenging quarter as we dealt with the softer demand environment and supply chain impacts from the strike at the Port of Vancouver, but we'll let John talk more about that in a few minutes. Thank you. As you've seen in the press release, given a more challenging environment, further stressed by the labor strike, we're adjusting our 23 guidance accordingly. Certainly not the outcome we had planned, but it's the prudent thing to do at this point. That said, it's not the challenges that define us, but rather how we respond, and I'm very proud of how this team, our collective KC families, are responding to the challenges. We'll say a few things about the Mexico Task Force. That's an excellent case in point to how we respond in the Task Force. You'll recall back in our second quarter call, we talked about an enhanced focus on operations in Mexico. Shortly after that, we deployed a task force to Mexico that was led by John Orr. John, who many of you are familiar with, has a lot of experience in Mexico from his previous role as EVP officer for KCS and KCSM. And I can tell you this effort was monumental. It brought together railroaders from every part of the organization, nearly 100 employees across information services, network services, marketing, engineering, mechanical, and many others came together to support John and the task force. objectives, and we're seeing the results from that effort. You can see noticeable progress across all the operating metrics, train speed improvements, terminal dwell reduction, car miles per car day improving, locomotive productivity improving, and ultimately the most important part, the service experience for the customer. And this transformation is ongoing, and the investment in people, process, infrastructure, and technology in our Mexican operations as well as our U.S. and Canadian operations is a continual journey. On the safety front, we've continued to rise to the challenge from a safety perspective. Mark will speak to some of this in more detail in a moment. But I can tell on a combined basis we've seen year-to-date improvement in FRA personal injuries of 12%, FRA train accident frequency of 37%, which is a tremendous result that I want to commend the entire team on as we continue to lead the industry in this space. Safety is a never-ending journey, and it continues and will always be our number one priority. A few comments on the integration. On the integration front, integrating these two companies obviously is a challenge in and of itself, particularly so in today's world with an industry with a history of merger-related service challenges. We certainly have not been perfect. There are opportunities to improve that that we're mining every day 24-7. But the teams from the Legacy CP and Legacy KCS have embraced the challenge. They've united, working together to produce a unique outcome that will benefit our customers, our communities, in each other. A couple points on the MNBR. While we continue to make progress integrating these two railroads, we also continue to progress the MNBR transaction that we announced in June. Pleased to announce that we filed our application for the deal with the SDB on October the 6th. So in closing, we're a little over six months into this combination, into our forever story. There's no doubt there's a few near-term challenges from a softer demand environment. Regardless, the differentiated growth opportunities we've laid out and guided to remain unchanged. We're successfully integrating this network. We've maintained our commitments to our customers, to the regulators, and we're seeing momentum in our operating performance. So with that said, I'm going to hand it over to Mark to speak to the operations before John brings some colors in the markets and Nadine elaborates on the numbers.