Canadian Pacific Kansas City Limited (CP) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. My name is Jeff Ellis. I am the Chief Legal Officer and Corporate Secretary of Canadian Pacific. I want to welcome you to the Canadian Pacific Railway Limited special meeting of shareholders. The purpose of this special meeting is to discuss matters of business set forth in the notice of special meeting of shareholders dated November 1, 2021. CP is committed to diversity and inclusion. In keeping with indigenous protocol and building respectful relationships between indigenous and nonindigenous peoples in Canada, it is customary to acknowledge the traditional territories or ancestral lands of indigenous peoples. We are meeting virtually today, so I would like to acknowledge that indigenous peoples are the traditional stewards of the lands and waters where each of us attends this meeting. I would like to note that during this meeting, we may be making forward-looking statements about our future expectations and prospects. Actual results may differ materially from these statements due to a number of risks and uncertainties.. Please see the forward-looking statements section in our notice of special meeting and management proxy circular dated November 1, 2021, and other Canadian Pacific filings for more information. I will now turn over the mic to the Chair of our Board, Isabelle Courville.

Good morning, ladies and gentlemen. My name is Isabelle Courville. I am Chair of the Board of Directors of Canadian Pacific. Welcome to the special meeting of shareholders of Canadian Pacific Railway Limited. In keeping with the advice of health authorities, as it relates to COVID-19, CP is hosting the special shareholders' meeting virtually. Doing so, reduces the risk of spread of infection to our employees, shareholders, directors and stakeholders. While a virtual meeting does not give us a chance to meet with you in person in the current climate, a virtual meeting fosters shareholder participation regardless of where our shareholders are located. With that, I welcome all of our shareholders, joining us virtually from around the globe. Joining me at the meeting today are Keith Creel, our President and Chief Executive Officer; and Jeff Ellis, our Chief Legal Officer and Corporate Secretary. Our shareholders and proxy holders are participating in today's meeting via webcast. Today's meeting is considered a special meeting of shareholders. The special business of this meeting relates to 2 resolutions: the first, which we refer to as the share issuance resolution is an ordinary resolution approving the issuance of the number of Canadian Pacific common shares necessary to issue the share consideration under terms of the merger agreement with Kansas City Southern. The second resolution, which we refer to as the name change amendment resolution is a special resolution approving an amendment to Canadian Pacific's restated articles of incorporation to change Canadian Pacific's name to Canadian Pacific Kansas City Limited, which amendment is conditional upon Canadian Pacific being lawfully permitted to assume control over Kansas City Southern's railroad operation, pursuant to the approval of the United States Surface Transportation Board and the committee on foreign investment in the United States. The transaction contemplated by the merger agreement with KCS cannot close without Canadian Pacific shareholders approving the share issuance resolution. Completion of the transaction is not conditional on Canadian Pacific shareholders approving the name change amendment resolution. We expect that the vast majority of votes have been cast in advance of the meeting by proxy through the various available channels. That said, the right to vote and participate in the meeting is very important, and we are fully supportive of that participation. Registered shareholders and duly appointed proxy holders who have not voted or wish to change their vote may vote online by clicking on the voting icon. Polls are now open for voting on the items of business to be voted on. Once discussion on all business items as concluded, I will provide you further time to enter your votes, and then I will declare voting closed on all resolutions. I now call the meeting to order. I will act as Chair of the meeting, and Jeff Ellis will act as Secretary. I hereby appoint Colleen Nielsen from Computershare Investor Services Inc. to act as Scrutineer for the meeting. The Secretary has deposited with me a statutory declaration establishing the sending of notice of the time and format of this meeting to each shareholder entitled to vote, to each director and to the auditors of Canadian Pacific as required by law. The Scrutineer has confirmed that a quorum is present. The Scrutineer's final report will be kept with the records of this meeting. I declare that the meeting has been regularly called and properly constituted for the transaction of business. To expedite matters today, the Secretary and I will either move our second on motions with respect to the business of this meeting. If you have any questions, these should be submitted by clicking on the question icon on your phone, computer or tablet. There are 2 matters set out in the notice of this meeting to be voted on by shareholders. We are conducting voting on all items at once online. If you are a registered shareholder or proxy holder, and if you have not already done so, prior to today, you can now vote by clicking on the voting icon on your phone, computer or tablet, a voting user guide was distributed to shareholders with the meeting materials and is available online at CP's investor website at investor.cpr.ca. I kindly request that the secretary read out the items that are being voted upon.

Thank you, Madam Chair. Again, if you have submitted your vote on the 2 resolutions prior to this meeting, there is nothing for you to do unless you wish to change your vote on either or both of the 2 resolutions. Each shareholder or proxy holder may vote on the 2 items of business being considered at this meeting. First, the issuance of the number of CP common shares necessary to issue the share consideration under the terms of the merger agreement with Kansas City Southern. And second, amending Kansas -- sorry, amending Canadian Pacific's restated articles to change the name of CP from Canadian Pacific Railway Limited or [Foreign Language] to Canadian Pacific Kansas City Limited or [Foreign Language], which amendment is conditional on Canadian Pacific being lawfully permitted to assume control over Kansas City Southern's railroad operations, pursuant to the approval of the United States Surface Transportation Board and the committee on foreign investments in the United States. As set out in the company's proxy circular delivered prior to this special meeting of shareholders, the CP Board unanimously recommends that you vote for these items of business. Preliminary results will be announced later in the meeting.

The first item of business is the issuance of the number of CP common shares necessary to issue the share consideration under the terms of the merger agreement with Kansas City Southern. I move that the share issuance resolution, the full text of which is set out on Page A1 of Appendix A of the company's management proxy circular delivered in respect of this special meeting, be approved as an ordinary resolution of the shareholders of Canadian Pacific Railway Limited.

Madam Chair, I second the motion.

The second item of business is amending Canadian Pacific's restated articles to change the name of CP from Canadian Pacific Railway Limited or [Foreign Language] to Canadian Pacific Kansas City Limited or [Foreign Language], which amendment is conditional upon Canadian Pacific being lawfully permitted to assume control of Kansas City Southern's railroad operations, pursuant to the approval of the United States Surface Transportation Board and the Committee on Foreign Investment in the United States. I move that the name change amendment resolution, the full text of which is set out on Page A1 and A2 of Appendix A of the company's management proxy circular delivered in respect of this special meeting be approved as a special resolution of the shareholders of Canadian Pacific Railway Limited.

Madam Chair, I second the motion. Thank you, Madam Chair. We will now take any questions on the proposals. If you have any questions, you may submit them by clicking on the question icon on your screen. Madam Chair, Mr. Creel, there are no further questions.

Thank you. For those of you who have not voted on the resolutions, please do so now as I will shortly close the polls. It is now 10 after the hour, I will close the poll 12 minutes after the hour to allow any remaining shareholders to vote online by clicking on the voting icon. We will now pause here for 2 minutes. The Scrutineer has provided a preliminary report based on proxy received prior to the meeting. I call on the Secretary to report on the preliminary results of the votes. I note that the company will report the detailed final voting results, including those votes submitted online at the meeting once the tabulation is complete after the meeting.

The share issuance resolution has been approved with 99.91% of votes in favor of the resolution. The name change amendment resolution has been approved with 99.83% of votes in favor of the resolution.

Thank you. As there is no other business that may be properly brought before the meeting, this concludes the formal business of the meeting. I wish to thank you all for your support and for participating, and I now declare this meeting terminated. Mr. Keith Creel will now provide his address to shareholders. Over to you, Keith.

Thank you, Isabelle, and thank you, fellow shareholders for participating in today's meeting. Today's vote completes a key step on our path to this once in a lifetime partnership. This is a transformative opportunity for our company for Kansas City Southern and for North America. Tremendous work has been done by so many to get us to this point as we work to create the first single line rail network linking the U.S., Mexico and Canada. The overwhelming support you, our shareholders, who have given today for the transaction is critical to making this combination a reality. In the coming days, we'll be working to complete the steps required to close this transaction into voting trust. And in the months ahead, we look forward to participating in the STB's robust regulatory review. Together, Canadian Pacific, Kansas City will add new capacity to the U.S. rail network, create new competitive transportation options, support North American economic growth and deliver other important benefits to customers, employees in the environment. Thank you all again for participating in today's meeting. Your support means so much to us. We're excited to continue this incredible journey together.

Thank you, Keith. On behalf of CP, I would like to thank each of you for attending this virtual special shareholder meeting, and thank you for your support.