CPKC becomes the first and only single-line
railway connecting Canada, the
U.S. and Mexico
CALGARY,
AB, April 14, 2023 /PRNewswire/ - Canadian
Pacific ("CP") and Kansas City Southern ("KCS") today combined
to create Canadian Pacific Kansas City (TSX: CP) (NYSE: CP)
("CPKC"), as authorized by the U.S. Surface Transportation Board's
("STB") March 15, 2023 final
decision, creating the first single-line railway connecting
Canada, the U.S., and Mexico.
"Today, we celebrate this historic combination creating a truly
unique single-line rail network that begins a new chapter of
railroad history in North
America," said CPKC President and Chief Executive Officer
Keith Creel. "As we mark this
once-in-a-lifetime occasion by driving the Final Spike in
Kansas City, Missouri, where CP
and KCS come together, we stand ready to bring new competition into
the North American rail industry at a time when our supply chains
have never needed it more.
"This unmatched CPKC network will give our customers new options
and expanded reach to more markets as we provide reliable rail
service, take trucks off public roads and raise the bar on rail
safety by expanding CP's industry-leading safety practices," Creel
added. "The public, environmental, competitive and safety benefits
of this historic combination are extraordinary for our railroaders,
communities, rail customers and the North American economy."
CP completed its US$31 billion
acquisition of KCS on Dec. 14, 2021.
Immediately upon the closing of that acquisition, shares of KCS
were placed into a voting trust, which ensured that KCS operated
independently of CP during the regulatory review process. Today,
pursuant to the STB's March 15, 2023
final decision approving the transaction, the voting trustee
transferred the KCS shares to an affiliate of CP, formally bringing
KCS into the CPKC family.
In Kansas City today, the
company will mark the creation of CPKC by hosting a celebration
featuring the driving of the ceremonial Final Spike at the only
place where the CP and KCS railroads meet. CPKC will also break
ground today on a new yard office, the future location of its
state-of-the-art U.S. operations center.
"We stand ready to move the commerce of today and ready to
compete hard to grow tomorrow," Creel continued. "With the most
relevant railroad network on the continent, we'll create value for
all stakeholders, bringing new jobs, economic growth and
environmental benefits to workers, customers and
communities."
With its global headquarters in Calgary, Alta., Canada, CPKC is the only railway connecting
North America and has unrivaled
port access on coasts around the continent, from Vancouver to Atlantic Canada to the Gulf of Mexico to Lázaro Cárdenas
on Mexico's Pacific coast.
While remaining the smallest of six U.S. Class 1 railroads by
revenue, the new combined company has a much larger and more
competitive network, operating approximately 20,000 miles of rail,
and employing close to 20,000 people. Full integration of CP and
KCS is expected to take place over the next three years, unlocking
the benefits of the combination.
CPKC will bring a new safety standard to the North American rail
landscape. CP has been the safest railroad in North America for 17 straight years, as
measured by the Federal Railroad Administration-reportable train
accident frequency ratio. In 2022, CP had an all-time best
frequency of 0.93, a rate nearly half what the company produced a
decade ago and 69 percent lower than the Class 1 average.
CP's culture of safety, supported by its history of sustained
investments in core infrastructure and technology, aligns with
KCS's like-minded culture, allowing the combined system to operate
at the apex of rail safety. CPKC will place safety at the forefront
of everything it does.
CPKC plans capital investments in new infrastructure of more
than US$275 million over the
next three years to improve rail safety and the capacity of the
core north-south CPKC main line between the U.S. Upper Midwest and
Louisiana.
Anticipated environmental benefits of CPKC include the avoidance
of more than 1.6 million tons of greenhouse gas (GHG) emissions due
to the anticipated improved operational efficiency of CPKC versus
current operations and another 300,000 tons of GHG emissions with
the diversion of 64,000 trucks to rail for a total reduction of 1.9
million tons of GHG emissions over the next five
years. Diverting 64,000 long-haul truck shipments to rail
annually with new CPKC intermodal services will reduce total truck
vehicle miles traveled by almost 2 billion miles over the next two
decades, saving US$750 million in
highway maintenance costs.
CPKC will also support the expansion of Amtrak and other
passenger services on the CPKC network.
CPKC filed articles of amendment changing the company's name to
"Canadian Pacific Kansas City Limited", which became effective
today. CPKC's common shares will remain listed on the Toronto Stock
Exchange (TSX) and New York Stock Exchange (NYSE) under the ticker
symbol "CP" and are expected to begin trading under the new name
and new CUSIP (13646K108) on April
18. Each existing share certificate reflecting the former
name of the company will continue to represent a valid certificate
until such certificate is transferred, re-registered or otherwise
exchanged.
Forward looking information
This news release contains certain forward looking statements and
forward looking information (collectively, "FLI") to provide CPKC
shareholders and potential investors with information about CPKC
and its subsidiaries and affiliates, which FLI may not be
appropriate for other purposes. FLI is typically identified by
words such as "anticipate", "expect", "project", "estimate",
"forecast", "plan", "intend", "will", "target", "believe", "likely"
and similar words suggesting future outcomes or statements
regarding an outlook. All statements other than statements of
historical fact may be FLI.
Although we believe that the FLI is reasonable based on the
information available today and processes used to prepare it, such
statements are not guarantees of future performance and you are
cautioned against placing undue reliance on FLI. By its nature, FLI
involves a variety of assumptions, which are based upon factors
that may be difficult to predict and that may involve known and
unknown risks and uncertainties and other factors which may cause
actual results, levels of activity and achievements to differ
materially from those expressed or implied by these FLI, including,
but not limited to, the following: the realization of anticipated
benefits and synergies of the CP-KCS transaction and the timing
thereof; the satisfaction of the conditions imposed by the U.S.
Surface Transportation Board in its March
15, 2023 decision; the success of integration plans; the
focus of management time and attention on the CP-KCS transaction
and other disruptions arising from the CP-KCS integration; changes
in business strategy and strategic opportunities; estimated future
dividends; financial strength and flexibility; debt and equity
market conditions, including the ability to access capital markets
on favourable terms or at all; cost of debt and equity capital; the
ability of management of CPKC, its subsidiaries and affiliates to
execute key priorities, including those in connection with the
CP-KCS transaction; general Canadian, U.S., Mexican and global
social, economic, political, credit and business conditions; risks
associated with agricultural production such as weather conditions
and insect populations; the availability and price of energy
commodities; the effects of competition and pricing pressures,
including competition from other rail carriers, trucking companies
and maritime shippers in Canada,
the U.S. and Mexico; North
American and global economic growth; industry capacity; shifts in
market demand; changes in commodity prices and commodity demand;
uncertainty surrounding timing and volumes of commodities being
shipped; inflation; geopolitical instability; changes in laws,
regulations and government policies, including regulation of rates;
changes in taxes and tax rates; potential increases in maintenance
and operating costs; changes in fuel prices; disruption in fuel
supplies; uncertainties of investigations, proceedings or other
types of claims and litigation; compliance with environmental
regulations; labour disputes; changes in labour costs and labour
difficulties; risks and liabilities arising from derailments;
transportation of dangerous goods; timing of completion of capital
and maintenance projects; sufficiency of budgeted capital
expenditures in carrying out business plans; services and
infrastructure; the satisfaction by third parties of their
obligations; currency and interest rate fluctuations; exchange
rates; effects of changes in market conditions and discount rates
on the financial position of pension plans and investments; trade
restrictions or other changes to international trade arrangements;
the effects of current and future multinational trade agreements on
the level of trade among Canada,
the U.S. and Mexico; climate
change and the market and regulatory responses to climate change;
ability to achieve commitments and aspirations relating to reducing
greenhouse gas emissions and other climate-related objectives;
anticipated in-service dates; success of hedging activities;
operational performance and reliability; customer and other
stakeholder approvals and support; regulatory and legislative
decisions and actions; the adverse impact of any termination or
revocation by the Mexican government of Kansas City Southern de
Mexico, S.A. de C.V.'s Concession;
public opinion; various events that could disrupt operations,
including severe weather events, such as droughts, floods,
avalanches and earthquakes, and cybersecurity attacks, as well as
security threats and governmental response to them, and
technological changes; acts of terrorism, war or other acts of
violence or crime or risk of such activities; insurance coverage
limitations; material adverse changes in economic and industry
conditions, including the availability of short and long-term
financing; and the pandemic created by the outbreak of COVID-19 and
its variants, and resulting effects on economic conditions, the
demand environment for logistics requirements and energy prices,
restrictions imposed by public health authorities or governments,
fiscal and monetary policy responses by governments and financial
institutions, and disruptions to global supply chains.
We caution that the foregoing list of factors is not exhaustive
and is made as of the date hereof. Additional information about
these and other assumptions, risks and uncertainties can be found
in reports and filings by CPKC with Canadian and U.S. securities
regulators, including any prospectus, material change report,
management information circular or registration statement that have
been or will be filed in connection with the transaction. Reference
should be made to "Risk Factors" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations—Forward
Looking Statements" in CPKC's annual and interim reports on Form
10-K and 10-Q. Due to the interdependencies and correlation of
these factors, as well as other factors, the impact of any one
assumption, risk or uncertainty on FLI cannot be determined with
certainty.
Except to the extent required by law, we assume no obligation to
publicly update or revise any FLI, whether as a result of new
information, future events or otherwise. All FLI in this news
release is expressly qualified in its entirety by these cautionary
statements.
About CPKC
With its global headquarters in
Calgary, Alta., Canada, CPKC is the first and only single-line
transnational railway linking Canada, the United
States and Mexico, with
unrivaled access to major ports from Vancouver to Atlantic Canada to the Gulf of Mexico to Lázaro
Cárdenas, Mexico.
Stretching approximately 20,000 route miles and employing 20,000
railroaders, CPKC provides North American customers unparalleled
rail service and network reach to key markets across the continent.
CPKC is growing with its customers, offering a suite of freight
transportation services, logistics solutions and supply chain
expertise. Visit cpkcr.com to learn more about the rail advantages
of CPKC. CP-IR
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SOURCE CPKC