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

Good morning. Welcome to CPKC's 2023 and Inaugural Investor Day. Thank you for those of us joining us here today in historic beautiful Union Station in Kansas City, and thank you to those of you who are joining us online. My name is Chris de Bruyn, I'm the Assistant Vice President of Investor Relations at CPKC. Before we get started, I'm going to run us through a safety briefing as well as some regulatory disclosures. So we are located in the Grand Plaza of Union Station at 30 West Pershing Road in Kansas City, Missouri. Restrooms are located on the east wall to my left. In the event of emergency, should we need first responders, my colleague, Ashley Thorne will be a designated person to call 911 and we'll direct first responders as required. Should anyone require CPR, Mr. Chad Becker will administer CPR. In the event we need first aid equipment or AED, Kyle Mulligan will coordinate with Titan security and CPKC police located at the south entrance to the Plaza. In the event of a fire, there are fire extinguishers located at each of the exits along the east and west walls. And should we need to evacuate for any reason, we will exit through the south entrance to the Grand Plaza and into the south parking lot of Union Station at the muster point there. In addition, if -- I would ask if you need to get up at any point through the day, please ensure you're pushing your chairs in and keep the floor clear of any tripping hazards. So going through a few regulatory disclosures. This presentation is going to contain forward-looking statements. Actual results may differ. Please refer to disclosures filed with Canadian and U.S. regulators and in the press release. Additionally, this presentation contains non-GAAP measures. Please refer to the disclosures filed as well as the press release. We have an exciting day planned for you today, full of great content and speakers. I'd ask that you now direct your attention to the screen. [Presentation]

All right. It's now my pleasure to welcome to the stage CPKC's President and Chief Executive Officer, Mr. Keith Creel.

All right. I'm here. We're in Kansas City. Good morning. Gosh, we've got to loosen up a little bit. Everybody is so tight in the room, a much anticipated day. But listen, let me start with thanking each of you. I was thinking about it this morning, reflecting after last night for those -- I share this for those that are joining us virtually. For those of you that are here, the conversations that I had to think that we have literally brought much of the world together to Kansas City. We talked to a gentleman, investor, from Sweden. We've got London. We've got Paris. We've got Europe covered. And then we've, of course, got the U.S. covered as well as Mexico and Canada. So again, thank you for taking your time. Thank you for your trust, and I want to say this now. This has been a journey to get us to this point today, and I'll say this many times. This is day 75 of our journey forever. But I'll tell you this is not when we started. This has been a battle. It's been one worth fighting for and the ultimate outcome of bringing these 2 amazing companies together to create what is not just our advantage, but as I've shared with some of my colleagues in the industry, I think this industry is advantaged. To be able to connect markets, new markets, competition, growth for our 3 nations, especially in light of where we are in the world's history, has never been needed more. So for us to have a seat at the table, for us who have gotten here, many people in this room, you had a role in that. We went to the KCS investors and made our case that we were the right partner. We went to the CP shareholders and made our case that we were the right partner. You gave us the confidence, you gave us the trust and you gave us the support, you voted with your shares for this opportunity. So it's going to be our honor today. You're going to hear in detail what we're building. And what I would suggest this is a 5-year view, yes, but this is a foundation forever creating a network that, quite frankly, has never existed before and will never exist again. And forever is a long time, and never is a big word, I rarely use but you will not see in this nation's history, our 3 nation's history, a network that will connect to Canada, U.S. and Mexico again. It's a one and only. And when I say unique, and I say CPKC advantage, you'll leave today clearly understanding why I'm saying that. So let me say this. Anybody that's here, and I said this last night, the building brand. This has a purpose. This has significance, this building, this city has historic significance. The magnitude of this building, the cliche that said they don't build them like that anymore. They don't build them like this anymore. This building is over 100 years old. And this building existed and exists today because it connected and grew a nation. It grew the West for the United States as we know the United States today. So it's only befitting that we come back today. 75 days after we pounded that spike at our joint facility just miles away from here, [indiscernible] when we created this network because that's exactly what we've done in our history and what we're going to be doing in our future is building 3 nations with this network, being the backbone, being the spine that connects all rail networks to Mexico and Mexico to the Midwest, left of the Mississippi River up to and then across Canada. So we'll get into those details today, but that significance and relevance is important. Then as well as now. And I think it's an important -- it's a very important point to make. So with that said, throughout the day, again, you're going to be hearing from, and I said this last night, an industry-best team of railroaders that quite frankly, I'll put again steady in the industry. I've worked with some amazing people. I've learned and served with some amazing teams, but the talent set that we have, the skill set we have, that we brought together to be able to convert this journey that we're on, the second to none in this industry. I'm a man of faith. I've said that before and I'm not going to apologize for that. And I tell you, I've lived my life never knowing that I would stand on this stage. This is my 31st, almost my 32nd year of railroading and I never knew the steps, pursuing my passion that I would take to get here. But those steps and all those different moves and all those different people, interactions and learnings that form my knowledge base, my skill sets, my capacities. And every individual you're going to hear from today that I'm honored to serve with, they have that same journey. And we've crisscrossed and I'll get into some of that. And it kind of bring all the dots together to let you know how we got to where we're at and why it truly matters. So with that said, let's talk about the journey so far. I want to kind of set the stage for the team. To understand where we're going, I think it's important we reflect on what got us here. It seems like yesterday, I think about my 10-year anniversary, I just celebrated with Canadian Pacific back in February. And before that, I spent 17 years with our competitor, and I played and served with many people, some of which are on this team that drove significant change at that other railroad. I never would have imagined then competing against CP, I'd have an opportunity and my steps would lead me to this company, but they did. And the same thing that motivated me -- that other railroad motivated me here. It was the case for change. This company is a proud company that is -- it's above any of us. I stand on the shoulders of giants that created the CP network in Canada. They built a nation. It's a proud company. I always knew that. I just didn't understand the power of the people or the power of the network. But what I did know and what other investors recognized, it was a company that was in trouble, regardless of the history, financially, the company was not performing well. The company truly, if you really get into the detail, and there's a few people in this room that know the bad details. I don't know if they would have had any investors because they were in trouble. So sustainability is a key word. It was at risk and an investor recognized that, and there was a case for change and we came and we went to work. We went to work creating the right culture, went to work creating and using the right operating velocities and plan. We went to work developing the team, so that we could actually recognize the value of the network, recognize the strengths of the network, deal with the challenges, but create opportunities because that's what leaders do. That's what driving results is all about. And then we invested. And that's something that -- that's a key ingredient, if you're going to run a precision scheduled railroad. You've got to have the infrastructure to match your business ambitions. There's a balance to this thing. You can't have big train aspirations if you don't have a network built to handle big trains. There's a formula for this PSR that when applied right, creates success. So in the beginning, you fix the engine. You fix the financial problem you were in. You eliminate cost, you rightsize your assets, you invest in the infrastructure because you've created cash by controlling costs to allow you to invest. This company was not in a position. They were robbing Peter to pay Paul when we came in 2012. Some of the mistakes that I made and some of the lessons I learned when I started thinking about a PSR, run it the shortest route, run it the fastest way, turn the asset. Well, at CP, the infrastructure is in such bad shape and I'll use the potash example. The first train I ran West out of Saskatoon to go the shortest route to Vancouver. We derailed. We derailed it 2 times within 2 subdivisions. I'll never forget that. And as a railroader, as an operating guy, I'm like -- I could not compare in how you have a piece of track and you can't take a train over it safer. That's -- to me, that's [ inconstruable ] and I remember it like it was yesterday, I said I don't know if it was Justin that went or Brent Laing that was our Chief Engineer back then, but I said send me the pictures of the track because I was somewhere doing something else. I said I want to see pictures of the infrastructure. And the pictures that I saw scared me. I felt embarrassed because I directed a train to run that way. I didn't know, but I learned quickly that there was a cycle. Again, if you don't -- this is a capital-intensive business. If you don't create cash flow to invest in your infrastructure, so you can run a railway safely and efficiently, you do those kind of things, robbing Peter to pay Paul, that don't lead to the best outcomes. So by doing what we did, we've invested more than we've ever invested. People that are critical of the PSR operating models because they don't understand it. They suggest that it's cutting your way to success, no, it's eliminating unnecessary cost. It's creating asset turns. It's doing it safely. That allows you to invest and when you invest and you match those all together in a balanced way, that's the key to growth. So that's what the first 4, 5 years of this journey we're all about. And that's what we are focused on, myself and then another very legendary leader that I had an honor to serve with Mr. Hunter Harrison and the team that's in this room. So what does that do for us? That takes us to a place of great success. That takes us to, again, what we enabled through creating the success financially to reinvest in the infrastructure, to create the network, to build out our operating model. It has allowed us, again, to invest if you think about it, and I've done this. If you go back to pre-PSR at this railroad, it's CP before CPKC, and if you look at [ sense ], the last decade [ sense ], we've invested 50% more capital than the decade before. We've never invested more money in this infrastructure. And again, when you invest in technology, when you invest in people, when you invest in process, you can have a safer and you will have a safer outcome. And that's part of the formula. You've got to keep your trains on the rail to keep them fluid, a train derailed is not moving. That supply chain is broken. It's like an airplane that breaks down on the runway at O'Hare or JFK, nothing else is landing. It's not in your best interest to let it stop. So you've got to make sure you apply that virtuous cycle to realize the success that we've had and the discipline of operating in this model to create the kind of success in the platform for growth. So now let's get to 2017. We made a transition in our company, and I went from being in the right-hand seat to being in the CEO seat. And my Board at that point, we had a mandate to fix the engine. We had done that. We've created this capacity. We created this efficient running machine, our safety performance has continued to improve. We had spare locomotives, we had land assets, but we had a big challenge. We had an origin rich network. We didn't have a lot of destinations and we had a very capable competitor. So what does that happen? What does that drive? That drives entrepreneurial thinking. That got us to a point and I learned and I seized this and John Brooks and I, we talked about this. We got to have the right team to market this product. We got to know what we do well, and we got to play those markets that we can win in. We create value for our customer, we create stickiness for our network that's unique to our network. That's the key to success. And that's when we started the strategy of our self-help initiatives, that's when we took our land. Our lands that are contiguous to our property, and we started creating the supply chain solutions. And we can apply to the Transload facility we built in Vancouver. We can talk about the one we built in Montreal. We can talk about the 8,500-foot grain foot plant. There's been so many pieces to this that we've crafted as a result of necessity, entrepreneurial thinking being hungry, how do we grow this network. And that's exactly what we did. And we've created a tremendous amount of value. We told you in 2018 what we would do. For those of you that were here that remember the same, our last Investor Day. Now did I know that we would be here today? No. But I knew that if we didn't grow a railroad, we never have the opportunity to grow the network. And we knew in the back of our heads, and I've known this for quite some time because of that path I went through, what network made the most sense. So with the success we created financial success, the growth, we led the industry, our network in KCS. Financially, we're in a good position. We get to a place after 3 years. I guess it was 2018, 2019, the beginning of 2020. In my own mind, it's time. We need a bigger network. We had our customers coming to us, you have a phenomenal service. It's reliable. We're able to win in our marketplace. We're able to grow with you. We've created the stickiness. We've created a reputation of being a safe railway as well as a reliable service provider. In a world where those around us, we're not creating that same experience. But our Achilles heel is we only went so far. So we saw the opportunity with the CMQ to get back to the East Coast, to not be disadvantaged east of Montreal. We made that quick move. We integrated that network, and it's exceeded all of our expectations. You'll hear more about that and about the future of that and how this thing is accelerating from Jonathan. But that really was to me like a dress rehearsal. It reminded me that you know what, we have a responsibility to each of you to take this ability that we've created on this network and to create a legacy and to create a network that will drive forever value. And that's exactly the vision that Pat and I got aligned on when we agreed to try to put these 2 companies together. And it got complicated. It did. But in the end, where we started is where we ended. And we brought these 2 proud historic companies together, the 2 smallest, the 2 hungriest, the 2 most entrepreneurial-like cultures. We've been the guy that's been kicked around. We've been 6 and 7. We're still going to be last in size, but I don't care about size. I care about impact. And I care about value creation, not just for you as a shareholder, but for all stakeholders. Because to me the key to success in any business, it's -- you call it, Precision Scheduled Railroad. It's called Precision Scheduled business. You can apply to any manufacturer business, you can apply to any business in my mind. If you can -- do provide value to your customer, value to your employee, value to your nations, value to your environment in a very unique world where our environment needs help every day when it comes to our carbon footprint and our impact to our ever-changing environment and you can do it safely, value to the communities you operate in and through with the investment this unlocks and with the infrastructure you can harden. When you can do all those things, that's unique. That is absolutely unique, and that's what this network represents. So now let's talk about what we've been doing as we get ready for this, connecting a continent. We've got the track record on safety. This last year, we celebrated our best ever year at CP, and KCS wasn't very far behind when it comes to safety. Now did I know 5 years ago when we started this historic journey, given the environment that we're in, giving the pressure and perhaps some perceptions that some people have about the rail network, I think, are very unfair, but still, it's the reality of what we're dealing with, had no idea. But do you think for a moment that we would have had a regulator that would have trusted their mandate to provide a stronger U.S. rail network in their decision, had we not had the track record we have. No way. No way in the world that would have occurred. And that comes with responsibility. But through this network that we've created. And you're going to hear about it, the strengths, the advantage it gives those that choose to partner with us to create value across the entire stakeholder chain. There's not another opportunity set like this, period, in this industry because there's not another network that connects all these lanes the way this does. Industry leader in safety, we've got the right culture. I can tell you there's a lot of work, and you're going to hear about that from Mark about making sure that we bring these 2 cultures together. And I'm telling you, much like my journey, when I went to CP, I underestimated the pride that was in the company. The motivation to change, the motivation to succeed and I've learned over my life, and I know this is true in each of yours. The way we're wired as human beings, we all want to serve. We want to serve something bigger than us, than ourselves because serving yourself is not just selfish. That's not a path to achievement. That's not a path to true joy and satisfaction in life. It's not just about money. It's about leaving it better. It's about legacy. That's what true value is, at least in my version and the way I'm wired and what motivates me. And if you surround yourself with people that are wired the same way that have like values, like motivations, that's when you create something special. Because the reality of this network, you can have the best strategy in the world, you can have the best network in the world and we do. But if you don't have the right culture and the people to convert it, it's useless. It's absolutely useless. That is the secret sauce. That is the secret sauce to create the success that we've created. So you're going to see the advantages are not just this network. You're going to hear if you think about this, 2018, I think you've heard from 6 of our leaders in this company. Today, you're going to -- it's a double-digit number. I don't know if it's 14, 15, 16. You're going to see that this company is much more than just Keith Creel because Keith Creel does not do this alone, we do this as a team. And when you create and bring the right team of railroaders that it's not just these people in this room, they're reflective of and represent 20,000 of us that our like-minded railroads focus on creating this value with the right culture and the right operating philosophy, implementing and executing what PSR truly is. And in all honesty, I thought about this, this morning, where did that all come from? Because what I learned was precision execution. That's what we called it an IC, if I go back to my IC days. I think the term maybe was coined perhaps in CSX's history when Hunter went there. I'm not sure some of you probably know, but all of a sudden, that became the acronym. And now some people are apologizing for it. I'm not apologizing for it. That's a gift that keeps on giving. I said that in my entire career, because it is the right operating model matched with the right network and the right people, and it creates sustainable success for all stakeholders. So again, that's part of this recipe. That's part of the success. That's part of this advantage that you're going to get. That's part of the legacy. And again, legacy is about leaving it better that we're creating with this network. And I can tell you, as a leader, if this thing doesn't run better when I'm not a part of it, I haven't done my job. And I challenge each one of my leaders the same way. And this culture, everyone that we've picked to be on this team, it's their skill sets, it's their competence, it's their expertise. You put those things together. It's part of the recipe, but they all understand 1 thing. We have a culture of accountability in this company. We have a culture of safety in this company. I never apologize for it. I never will. I love every one of them, but if there's not 1 of them, if they don't do their job, they don't have a seat at the table. And that applies to me, too. There's no free rides in this company. It's the way we work, it's what's required. I call it throttle railroading, I call it constructive tension. I call it foot on the gas. We've got several acronyms that we've integrated into our leadership training and our culture training so these thoughts, these concepts, again, when I'm gone, they become ingrained into the culture of this company. So that this isn't a one-hit wonder. This comes with a huge responsibility. This is about legacy. This is about sustainability. This is about a forever story. It's not a 5-year story. We're just building the foundation to forever over the next 5 years. And that leads me to this. Mexico, key, key partner in the story. And if you get into the investment thesis, and I know you did. And if you looked at the success that KCS has created, a lot of growth, that's what excited me. Some of the people I worked with, they were a bit apprehensive about it. But I saw opportunity, I saw the world changing and the world has continued to change. I never knew though how much it would change and how critical it could become in this whole thesis when we started. I didn't know COVID would be what COVID was. I didn't know Russia would invade Ukraine. I don't know any of that. Somebody did, but I didn't. But nevertheless, it did and then it leads us to Mexico. When you think about all the thesis of when we started, near shoring, was it happening? Sure, it was happening some. Was labor cost and supply chain challenges not as attractive as they used to be in China with the changes that were occurring in China, and they were shifting to Vietnam and the needles are moving around, yes. And we knew that. What we didn't know though is the acceleration that would occur because of these crisis that we never could have predicted and how important the very reliable talented labor forces in Mexico and abilities for companies to make decisions to not only near shore, to ally shore, to derisk supply chains. Now is that going to move everything? No. But does it move the needle for these 3 countries to create trilateral trade, to take risk out of supply chains for companies, to create infrastructure that allows companies to create their business model. And that's what this network is, we're the physical bridge that will forever connect these 3 nations to enable that to be built upon. So 2 weeks after this, well, I'll go back to January. From my Canadian participation in the BCC, I was invited to go to the leadership summit that was held down in Mexico, where our presidents all came together. So Pat and I went down. We participated in the business forum, I started to learn more and more about the culture in Mexico and about the business opportunities. And then I knew stepping into this, once we got this deal approved, it was important to me, understanding the President of Mexico, President Obrador's vision, is political parties vision for growth in that country and connecting that to this opportunity. I know in my head that we were aligned. He wants job growth. He wants a middle class that gets developed. He want to bring economic prosperity to the population of Mexico. We're a success enabler. Our interests are aligned. But it's important that he understands that because he is definitely, if I've learned anything about him, and I think if the world will show, I don't think anybody would doubt, he's a man of action. He's not a man that's going to set complacent. So we went to Mexico. I can tell you, Oscar is in here. You'll meet him. Oscar is a key member of this team. Oscar was KCS' President of the KCS de Mexico. So we said we need to get in to see the president. So Pat and I and Oscar and John Orr 2 weeks after we consummated our deal, we were in Mexico City, and we had an amazing interaction with President, AMLO. We got to hear his vision and he said and listened to ours. And I can tell you they're going to do what's best for Mexico, no doubt about it. And I can't control that. But if our rail network, if it's best for Mexico, you align those interests. It's a success enabler. So I feel confident that as long as we represent what's good for Mexico, Mexico is going to be good for CPKC. And we can coexist and uniquely complement each other. And I'm sure from those discussions and as we grow together and learn more together, the relationships we've developed in Mexico, that administration, President, AMLO's administration as well as any subsequent when they have a leadership change next year, the formula is going to work the same. To me, what makes good sense, makes good sense, and this makes too much of it. So it's clearly, clearly part of our success story. Now the other thing I'm going to applaud and I've got to give credit where credits do. We were in trust. KCS was in trust. We had no control, it was a long process, but we had our teams working hard. And I can tell you, as a trustee and as running and being stewards of this asset, while we were in trust, Pat and the KCS team, they never stopped railroading. You think about the things they got accomplished. Oscar was a part of that. Warren Erdman is in here. He was a key part of that. Ashley is in here. She was a key part of that. John Orr is in here, he was a key part of that. The work that got done when they were in trusts to get this exclusivity extended to 2037, to get that agreement done, to break ground and start the second bridge that gives us again unique competitive advantage and capacity, to get over that river into Mexico, that bridge will be done sometime next year. So the infrastructure, the hard work, it's been laid. Now it's up to this team to continue to build upon it and to mine that opportunity. So the next chapter. You heard this morning, you saw, I think, the very unique value creation numbers that we share publicly. At the end of the day, you'll have to digest them. You're going to need the benefit of what we're going to go through today, but I can tell you the guidance itself, it's a compelling value creation story. And again, not just for you, that's the beauty of it, for all stakeholders in our supply chain. And it's unique. For those of you that choose to trust us, for those of you who choose to join along the journey, there's no doubt in my mind that this team and this network will exceed your expectations. That's our mandate. That's my commitment. I've never been more engaged. I've never been more honored. I've never been more humble. This is a unique point, an inflection in time in history, my history, my team's history, this network's history, the rail industry's history. I said this on April 14. This network, this industry needs a success story. This is the foundation to create it. And this team is the one that's going to make that true. So again, you have a lot of choices where you put your capital. I can tell you this, if you decide to give it to us, we're going to be stewards of your capital. We're going to maintain that balance, and we're going to maintain that tension, and we're going to work our tails off to optimize this network, not just for today but forever. That's what you're going to get from this team. That's what you're investing in. And I'm certain when you leave today when you see the depth of these discussions, when you think about the thoughts that have gone into this, when you think about the dots that we're going to connect, you'll be equally convinced. I thought I had a slide. Where's Chris? So this was a late addition add-on because quite frankly, although we've been planning this and thinking about this and trying to get to this very unique niche addition, it's been -- when you got 3 parties involved, you all understand. When you've got 3 railroads trying to create great service, that's a challenge. Then when you've got 3 railroads trying to come to an agreement, it brings its own unique set of challenges. And I'm talking about the announcement we made this morning. Hopefully, they'll get a map up in a minute. And it's -- some of you ask them why. And what I'm talking about is that bridge between Meridian, Mississippi and Atlanta, Georgia. I think we all understand that the population shift, the manufacturing shift, the economic value creation supply chain, growth is occurring in the Southeast. Growth is occurring in Mexico. And I don't care if it's your politics or if it's your quality of life, if you like the weather, but I'm telling you the south is what's growing, the southern part of the U.S. It is the future. And what we missed on this network and what KCS has missed on this network in the past, is a bridge to connect to the CSX. Now did it exist as the railroad always been there? Yes. So why not before? Well, why not before, it kind of gets into the details. If you don't own the asset or you can invest the money into the asset to create the infrastructure to optimize the capacity so that you can create a super highway to bridge west of the Mississippi with the CSX. Too many hands in the cookie jar, I guess, for the lack of a better term. But if you can create 2 like-minded companies that are willing to invest, match investments on their own network to create another alternative, to create a second alternative to an already best-in-class service east of Meridian, which exists today with CPKC and with NS. And listen, we're not doing this because we're not interested in growing with NS. We're interesting in helping everyone succeed. We want to be the bridge to prosperity, again, in a lane that's an add-on to this whole vision. So we've successfully concluded and we've announced today an agreement where we will acquire 50 miles east of Meridian, to a place called -- is it Myrtlewood, Alabama. I'm from Alabama and I've never been there. But nevertheless, it's 50 miles east as a crow fly straight across Mississippi, Eastern Meridian, into Myrtlewood, where ownership belongs to the Genesee & Wyoming, to the Meridian & Bigbee Railroad. Now beyond that, for the next 117 miles to Montgomery, Alabama, which is a crow fly, we're heading to Atlanta, has always been owned by the CSX, but for years, and I don't know how many years, the MBNR has operated the railroad. They've had it on a lease arrangement. Well, in short terms, what this says is we take possession of that 50 miles, we did a like-kind exchange, and we'll get into the details later with Genesee & Wyoming on an asset that we couldn't really ever optimize so that we could optimize an asset they could ever optimize. With our investment, we will make it Class III track. Today, it's -- you're talking about 10-mile an hour and 25-mile an hour railroad and they're doing it safely, but I would suggest that's not as efficiently as investment will allow you to generate out of that piece of track. CSX is going to do the same. They take back their 117 miles to Montgomery. They invest -- like investments, we have Class III track. Today's volume potentially 49 miles an hour. 10 years from now, maybe at CTC, maybe it's Class IV track. We'll see. We can grow into that. But we've created another lane to inject more capacity into this nation, to inject more competition and more optionality. We're opening the door through this bridge to the CSX customers that haven't been able to have equal access to compete for traffic going into the Dallas markets or the Mexican markets. That's the customers there today, but the beauty of this is you get into the details, if you think about this, if you start connecting the middle dots, CSX over the last year, 1.5 years on their network, they've announced 4 new auto plants. Well, with automobiles, if you understand the supply chains that are being established now because they come online in '24 to '26 at different time frames. Those decisions are being made today to establish the supply chains to run those manufacturing facilities. You've got parts coming out of Mexico that are going over the highway that are going into the Southeast. You've got parts made in the Southeast that are going over the highway. They go to the manufacturing to Mexico. Think about this opportunity to connect again with 2 committed partners in this marketing alliance to go out and sell this service with some of our other unique partners that can do some of that last mile, first mile, it's a beautiful thing that we have a strong strategic partnership with Schneider. The framework is there. Guess who Schneider is aligned with extreme [indiscernible] Mississippi and the Southeast markets. I'm sure they do business with both railroads, but they have a very strong commercial existing relationship with CSX. So at the end of the day, and I talked -- I told Alan this morning, I called out, out of respect for our partnership. We're going to honor. We literally, that railroad from Meridian to Shreveport, Louisiana, we co-own it. There's an LLC. NS has invested in it. We have responsibilities to give them phenomenal service, best-in-class service. Because it is the shortest route, the Dallas to the west, and we're going to honor every bit of that and we're going to grow with them. We're going to do the same thing with CSX. They both have unique networks. They both have unique origin points, their customers that choose to participate in this. We believe as long as we do our job providing reliable service, which we will, we have the capacity to handle it, which we will, we create success for their customers, which become our customers. So again, a very strategic niche value add that 3 years ago, I would have said I'm not thinking about that yet. I'm thinking about the big deal. But as soon as we started to understand the big deal, that's when that little piece of railroad became very strategic in my mind. And I said, if we can do it, figure this out, that's the next deal. So for us to get that done, and it took a lot of hard work, and I've got to commend James and his team. I'm going to commend Jack Hellmann, the CEO and leader of Genesee & Wyoming and Mike Miller that works with him. For them to trust us, to partner with us, for Joe and his team and Kevin to see the same thing, we see the same opportunity for their customers. Again, it's something we're extremely proud of, and I'm proud to be able to work with them because I said this, I think I shared this with Scott and a few other people. And I've said this back in our testimony. This railroad, we went through a firestorm to get this merger approved. History will show there's never been a more exhaustive effort, I don't think. There's never been so much drama about it before it even got started and even after. In every railroad, they make their own decisions. But at the end of the day, again, there's not 1 network except this one, that this is true about. They can say they can partner with and compete against any other Class 1 in this company, in this country, in these 3 countries. And that's true about our business mix, and it will always be true. We're going to be partners and we're going to be competitors. It just depends on the land. It depends on the customer. It depends on the options. And at the end of the day, the customer is the one that gets to decide. That's the truth that led us to getting this deal approved. This is pro growth, this is pro competition, this is pro stakeholder, it's pro investor, it's pro employee, it's pro community, and it's pro environment. And this last time we talked about, this really grew in my mind, the importance of this when I took an inspection true up 2 years ago across that MLCC with Pat and with Alan. As I'm riding down that railroad, when I got to Shreveport and going up in the South, and I'm literally watching I-20. I'm watching those Hunt trucks. I'm watching Schneider trucks. I'm watching Swift trucks. I'm watching those trucks that I used to have to draw between that bothered me when I was on I-20 growing up and living there, run down that highway and I'm thinking, wait a minute. There's the highway and there's the railway. We've got a field of dreams here. We just got to connect the markets. So if we can create this bridge, that's truly who is at most threat of competition. It's that highway and if we win in that battle, and we will with a reliable servicing capacity, the public wins. That's what public interest is. The environment wins. So those 64,000 trucks, we talked about taking off the highway with this network, that opportunity that we just unlocked with this announcement, not even in the math. So I don't care if it's value and revenue. I don't care if it's value and job growth. I don't care if it's value, it's sustainability and ESG in our carbon footprint. It's a powerful success enabler and multiplier for what we've already created. That's what the future holds, this network in totality. Somebody asked me last night, well, okay, what are you going to do next? What's your vision? My vision and my legacy will be marked by 2 things: developing the leaders in this company so they can sustain the success that we owe to each of you, that we owe to our employees and our families, and to optimize this network not for the next 5 years. This is the 75th day forever and forever is a long time. So with that said, I'm going to stop talking. I'm going to take the mic off and I'm going to hand it to the real talent, I'm going to turn it over to Maeghan and I look forward to once we go through today, till we get to that Q&A and addressing your questions. So again, thank you for joining us today. It's our honor to present our story, your story to each of you.

So good morning. It's great to see so many familiar faces. I haven't seen many of you since I switched roles from Investor Relations to Head of Human Resources. For those who aren't familiar with my background, I started with the legacy Canadian Pacific back in 2005. And I moved into Investor Relations on November 18, 2011. And it might seem strange to you that I remember the exact date, but it was one of those days that gets forever etched in your mind because you see it was only a few weeks earlier that a hedge fund had announced an active stake in our company and was seeking change. And it was on that day, I was working in financial planning and analysis and my manager at the time came and quite literally tapped me on the shoulder and said, do you remember when you said you'd like to work in Investor Relations one day and I said, yes. He said, "Well, you report there in 10 minutes." So that began quite the journey for me. I'll tell you that I became a quick believer in the power of PSR. And I had a front row seat to a tremendous turnaround, significant culture change and then a pivot to growth as Keith took the helm as CEO. And I had the privilege of articulating that story to many of you over the years. But what you might not appreciate is during that same time, I also had the opportunity to share that story, the vision, the strategy with many employees. And so fast forward to April 26, 2023. And this time, rather than a tap on the shoulder, it was a knock on the door, and it was Keith. He told me I looked alarmed. I was. We were only a couple of hours away from an earnings call, and I was fearing the worst, but he quickly alleviated my fears and said, that you wanted to ask me to take on the challenge of leading the HR function and communicating and guiding our most important asset, our people, through a time of tremendous change. I clearly didn't hesitate. And the change happened very fast because it could. You see the expectation of a leader at CPKC is first and foremost, that you leave it better than you found it. And second, that you develop a strong and capable bench, and I had that and Chris de Bruyn with his deep knowledge and respect at the legacy CP organization and with Ashley Thorne, given her strong knowledge and deep experience at KCS. They make a dynamic duo and I'm certain they haven't skipped a beat. So just as I've hit the ground running in my new role, so to has CPKC in these first 75 days. It's fitting that we're here in Kansas City, home to CPKC's U.S. headquarters. We are boots on the ground railroad. And so that meant day 1. A number of our key executives actually moved their offices here. Keith moved his U.S. office from Chicago to Kansas City. But likewise, Mark Redd, John Brooks, Justin Meyer as well as key players from our labor relations and our Investor Relations departments. I'll move to their offices here at Kansas City, and that was intentional because KCS or Kansas City, I should say, is not just the center of this new much larger network, but it's also the heart of where the culture change is going to take place over the next number of years. But it's not just about being in a head office location, it's also about being out on the network. And so last night and throughout the course of today, you're going to hear from a number of my colleagues and where they've been out on the network. For myself, even just last week, I was joined by a number of other members from the executive team, and we were down in Mexico. We were hosted by Oscar Del Cueto, our President and Executive Representative at CPKC de Mexico, and we hosted an Employee Town Hall. We joined employees and some local events and we had a chance to engage with our teams face to face, both in Monterrey and Mexico City. For me, I was able to meet with my HR team and to hear about their policies, their processes, and how they currently operate, the opportunities, the challenges. But it wasn't just meeting with my team, it was also taking the chance to meet with key leaders and high potential talent down in our Mexico operations. And we've taken a lot of other intentional steps in these first 75 days. Mark Redd is going to tell you shortly about post day 1, bringing up a number of key operating leaders from the KCS organization, both in the U.S. and Mexico and bringing them to Calgary. And a number of us have actually brought key players from our team to Calgary, not just once, but in some cases, several times because we want them to be able to see our world-class campus, our training facilities. We want them to stay in the employee lodge and to interact face-to-face with their new colleagues. We want them to see how we work and why. It's also important during times of significant change to take feedback. So we've implemented some employee pulse surveys. We just closed our first of what will be many. We had over 23 responses across Canada, the U.S. and Mexico. I personally read through every single response myself and have shared it with the rest of the executive team. We know that we aren't going to get everything right. But being open to feedback on the opportunities that exist and what's working well is going to be key to getting everyone aligned and pulling in the same direction. So speaking of getting aligned and pulling in the same direction, another key item we focused on is creating the rate incentives. Day 1, we opened up our employee share purchase plan to all KCS employees. We want them to share in the value creation opportunity that CPKC presents. And I was thrilled to see that in the first week alone, we had 30% uptake. We created a CPKC budget so that there was a common set of financial metrics, operating and safety metrics for everyone to rally behind. And we established long-term incentives as well. Historically, at the legacy KCS, there were fewer than 100 employees who are part of a long-term incentive program. We believe in a performance-based approach at CPKC. And so there are now over 1,000 CPKC employees who have long-term targets tied to free cash flow and total shareholder return. As many of you in this room also know shareholder feedback plays an important role in shaping our views, over the last number of years, CP has had an active shareholder engagement program with our Board, engaging directly with you, our shareholders. Isabelle Courville, our Board, Chair and myself have participated in every single meeting over the last 8 years. And so I can tell you firsthand that our compensation structure and targets, they reflect your direct feedback and they've evolved with our strategy over time. In 2023, safety will make up 30% of our annual targets. That's the highest of any railroad by a wide margin. And that doesn't just apply to executives, that applies to all 5,000 of our nonunionized employees. Similarly, on the long-term incentive side, as we entered into this merger, we recognized that our favorite metric, your favorite metric, ROIC, wasn't going to fit in the near term given some of the noise created by merger accounting. And so we sought your feedback. And on an interim basis, we move to free cash flow, something observable, measurable, well understood by employees, but also takes into consideration key elements like synergy realization. We like ROIC. We will return to it, but it just shows that evolution over time. And we have a culture of accountability. So this morning, we put out a press release and throughout the day, a number of my colleagues are going to talk to you about various targets and figures. We're going to be held accountable. Those will serve as the basis for our annual and our long-term incentives as well. We're expected to do what we say we're going to do. And then finally, in a world where demand for railroad talent is high, we've implemented critical retention tools and developed succession plans within our organization to ensure that the momentum and the success we have today are sustained well into the future. It is the expectation of every person who comes up on this stage today that they have a detailed plan, and they do regular talent reviews with their team, even in the midst of all of this change. Another positive outcome of our shareholder engagement work has been a heightened focus on sustainability and ESG. Throughout the day, you're going to hear how sustainability is woven into the core of our business. Many of you would have seen the announcement a few weeks ago where CPKC is one of its early acts, announced its ambition to set 1.5 degree aligned targets that will put us on a pathway to net zero by 2050. And I'll tell you that from a human resources perspective, being a leader in sustainability gives us the upper hand when it comes to attracting and retaining top talent. From the ability to work on innovative projects like the hydrogen locomotive, which you had the chance to see yesterday evening, to simply come in to work each day at our solar-powered head office in Calgary, there's a sense of purpose for employees. It's not just lip service, it's real action. It's a unique employee proposition. You can work for a top-performing railroad. There's the opportunity to be a part of a transformative North American growth story. And growth at CPKC is good for the environment. It takes trucks off the road. It lowers emissions. And there aren't a lot of other companies or industries that can make that claim. And so to wrap up, I'd say we're 75 days in. We've hit the ground running, and it's not lost on me or any one of my colleagues today, the culture change is hard. And while things like systems integration are critically important, what we know to be true is that the success of this merger is ultimately going to come down to harnessing the collective efforts of our 20,000 employees across 3 nations and getting them pulling in a common direction. I've never been more excited about the opportunities for CPKC. I've never been more proud to be a railroader. And I can't wait for the rest of my colleagues today to share in that journey. So without much further ado, I'm going to hand things over to John Brooks, our Executive Vice President and Chief Marketing Officer.

All right. Well, look, thank you, Maeghan. That was tremendous. So look, it's my honor to be up here this morning. I certainly know and have met many of you over this journey the last 5, 6, 7 years in this role. But for those that are new, of course, I'm John Brooks. I'm the Executive Vice President and Chief Marketing Officer. I've had the pleasure of being in this role since Keith appointed me back in 2017 and I'm entering my 29th year of railroading. So I could tell you, it has been a wild ride. I'm super excited to be up here to take you through what we call the transformational growth journey as part of CPKC. But to say that it's been a wild ride is an understatement. I can tell you the energy, the excitement, the unique advantage that this network brings to North America is unlike anything that we've experienced. Keith described it so well in terms of just the way this network will begin to unlock the connectivity between 3 countries across Canada, our network through the United States and ultimately down into Mexico. But we used the word transformational for a very intentional way. And as you think about the solutions that I'm going to talk about, Jonathan Wahba is going to talk about, Coby Bullard is going to talk about, David Eaton is going to talk about, they're transformational because they're unique. They're unique solutions in the supply chain that have never existed before across North America. That's what makes CPKC unique. And it gets me excited because when you begin to think about the competitive options out there in the marketplace, many of those folks, many of our competitors out there just completely cannot replicate what we're going to talk to you about today. And I'll tell you, you all pumped me last night. I was -- I think I got 2 bites of dinner in. I got one bite of my eggs in this morning. So a lot of this is -- you've already leaked some of this out of you at nap over the last 24 hours, but we're going to dig into why CPKC has this complete unique advantage in the marketing place. Let me tell you what the next couple of hours are going to look like. First of all, much like Keith did, I think it's important from a pure marketing and sales perspective that I reflect a little bit on the journey that we've gone through as a team. So I'm going to take you through that. I'm then going to fast forward to this unique network advantage. And we'll dig into the map a little bit. I'll tell you what excites me, where I think those advantages are and then ultimately, we'll get into how we're going to leverage them in the marketplace. Number three, I know you all came here for 1 reason because that's what you've been pumping me for the last 24 hours. You want to know the details, you want to know numbers, you want to know how big the opportunity was. It took fatty 2 seconds at dinner to say, well, really how big is it? How big is the opportunity? I'm going to bring you through the pipeline as we see it today. And ultimately, then how we stack on a lot of announcements that Jonathan, Coby and David are going to talk about to build up this multiyear plan. And that's what they're going to do. I'm telling you, I've never seen so many drone videos and schematics in different details. They're going to take you, although I'll be at kind of the 50,000-foot level, when I take you through the opportunity pipeline, they're going to take you straight down to the ground level and talk about the details of why CPKC has this advantage in the marketplace. And then I'll come back and I'll get the honor to close things at the end. We have Joan Hardy not with us today, is actually retiring in a couple of days from now. So I'm going to get the pleasure to talk to you all about our grain and fertilizer franchise. And then I'll wrap it all up, bring it together and give you really the numbers at the end that sort of build up to our high single digits growth over our multiyear plan. So let's get started. All right. So reflecting back, I'll rewind you, much like Keith did, to 2018. I started my journey in about 2010 at CP, and it was a marketing commercial-driven company. They competed on price. There was no service and there, frankly, wasn't a whole lot of strategy. As Keith described, the mandate of change came and it was really then flipped on its head, I would say, and became an overweight operationally driven company, but it had to by design. It had to so we could fix the engine to create a product that we could also then put into the marketplace and pivot to growth. And honestly, back in 2017, when I took this role and then we spoke to you at that Investor Day in early 2018, it was really about that journey of making that pivot to the next level of growth. And you know what we delivered. We did everything we told you, we said we were going to do. We led the industry from that time until we sit here today in terms of that growth profile. And the exciting thing about that is we did it as the smallest railroad. We did it with unique solutions. We knew in a lot of places. And frankly, in my career, it's been tough to go head-to-head against some of these networks that are out there that are, frankly, just more sizable, more scalable. But we did it with unique solutions, and that's going to be the common playbook as we get into the details of how we're going to grow and actually are already well on our way to growing CPKC. And I'll tell you, the combination of our leading growth, I'll remind you that KCS wasn't far behind. And that's kind of the unique piece of -- a very interesting piece of the story. You're bringing together the 2 fastest-growing railroads in the industry. I talked to you at that time about 4 critical elements that I thought from a sales and marketing perspective, that would be very key to our success back in 2018 as we thought about growth. And I've raised them, and I'm going to just run through them quickly today because as you think about how we grow CPKC into the future, those elements all remain paramount to how this story and journey plays out the next 5, 10, 15 years. Started with sales and marketing culture. We had to realize we are an operating company. We sell service and capacity, and that's what we do. But that's a mindset you've got to get set in place with your sales and marketing team because it -- frankly, it guides how you approach the marketplace and how you sell. We needed a high-performance culture of salespeople. Keith said it throttle it. They got to run hard. But we also and I talked about it at dinner last night at the table, we had to set up a compensation incentive plan that helped to motivate the sales team to get out there and ultimately outhustle our competitors in the marketplace. We talked about constructive tension. A key part of it and as I think about constructive tension, you're going to hear Ian Gray and Mike Foran talk about it a little later today. But as I think about it from a commercial standpoint, it's the key element that helps guide us in growing responsibly, not growth for growth's sake, making sure that we're growing the network in lockstep with Mark and team and an operations team, the asset team so we don't oversell the network. That's growing responsibly. Number three, I talked to you extensively in 2018 about what we call playbooks and back then, I kind of referenced it in the context of if you think about an offensive coordinator on the football field, and he's got his set of script in plays that he's going to use to march that team down the field. That's what our playbooks are. And we make every line of business go out every year and reestablish what those priorities are in terms of how we're going to grow. And I'm going to talk about those more in a little bit here. And finally, last and Keith spoke to it earlier, we had a very unique -- well, we were blessed with a very unique situation at CP. We had a lot of land. It wasn't something that we were able to develop, the forefathers of CP were smart. They bought up a lot of land. We had land around terminals. The trick became how we create those unique solutions to monetize that land with our customers to create that stickiness and those solutions, again, that much of our competition cannot replicate. And I'll tell you, that is going to be, as you listen to Jonathan and Coby and David Eaton today, that is going to be a paramount part of how you think about the growth strategy as we look to the future of CPKC. So I said in 2018, it was like CP was a 137-year start-up company. And honestly, it felt like that at that time. But I'll tell you, CPKC is different. This company is starting from a position of strength and as Keith said, relevance in the marketplace. It's just a bigger playing field, but we've got a heck of a lot more tools out there now to play with. All right. Let's talk about some of those tools and look at this network. So fast forward, this network is unmatched. It's unique. It ultimately touches 500 million consumers across Canada, the U.S. and down into Mexico. And I'll tell you with my background coming from the short-line railroad industry and then during CP during its weaker years, and honestly, much like the KCS folks that are in the room, I've spent my whole career looking up, just battling against networks that were just stronger that had more reach, that could combine origins and destinations where I was dependent on connecting carriers. I don't have that anymore. I have a network that can go toe to toe against any of our competitors in this north-south corridor and frankly, linking to the East. I have confidence day in, day out that my operating team, my service, my capacity can win in this marketplace, hands down. I'm at a point where I feel good when I look at this map and what we can bring together in terms of driving business as I look to the future. 20,000 miles of unmatched, three countries, starting in Vancouver, all the way over to Atlantic Canada with our acquisition of the CMQ and Jonathan is going to talk about some of the exciting things we still have going on out in Saint John. Down to the Chicago market, the twin cities in Kansas City, what I call sort of a unique triangle of opportunity. Southbound out of Kansas City, down into the Gulf of Texas rich with opportunity, rich with opportunity that KCS frankly has become, in the past, so dependent on handing off traffic to reach marketplaces to now where this network can connect it with direct moves, down into Mexico, the industrial corridor from Monterrey to San Luis Potosi down to Mexico City. And then ultimately, kind of what Jonathan calls his field the dreams down in Lazaro Cardenas, we're going to talk about some exciting things going on down there as an alternative in the marketplace. In Mexico, a couple of comments on Mexico, and David Eaton has joined us here today, and he's going to talk quite a bit about the opportunities down there and build upon what Keith talked about in terms of near shoring. And certainly, the buzz is near-shoring as more and more companies look to derisk their globalized supply chains and bring it closer to those 500 million consumers in North America and Mexico being so poised to accept that growth and make those supply chain links up into the U.S. and into Canada. But I'll tell you, I am shocked in my first 75 days around the domestic opportunity. There's 130 million people in Mexico, a very young workforce, eager for wealth, eager for education, eager to make a difference in that country. And the amount of industrial development that in itself is spurring to the existing industry down in Mexico is a compelling growth story just in itself. Finally, let's talk about room to grow 2.0. We are the KCS, much like the CP network has a tremendous amount of land assets across our network. Over 6,000 acres at ports, at industrial development locations, at our terminals that are ripe for growth. And actually, I told them to edit this slide, it should say 5,800 because we just sold about 200 acres in 3 exciting projects that we're going to talk to you about. Jonathan is going to talk about a really exciting announcement that pairs really well with the CSX opportunity that Keith introduced earlier. We've got an exciting project down in Port Arthur that I'm going to talk to you about. [indiscernible] and the team at the table were pumping me for information on last night. And then, of course, you saw our press release on the Kansas City and Americold announcement, which again is the development of taking trucks off the road and creating a cold storage ecosystem that, again, in our view, just cannot be replicated across this network. And don't get me wrong, it's not that KCS didn't recognize the power of their land and the capabilities, but they just stand-alone didn't have the reach. It's the power of bringing these networks together that ultimately creates the ability to now drive unique solutions at these underutilized assets. So in total, we're going to utilize about 200 acres as part of this. This is going to generate about a $250 million ongoing revenue stream at these 3 opportunities. All right. So let's dig into the opportunity pipeline. And I know the first thing that's going to jump out on the page is that $5B that's on there. The pipeline is big. And honestly, we took the time, as Keith said, as painful as the process we went through to get to April 14. The blessing was it gave us a lot of time to sit down with customers. It gave us a lot of time to talk to the KCS folks about the business. It gave us a lot of time to get in the marketplace and understand what the unique advantages of this marketplace could drive in terms of a pipeline. So we've been at it building this for, I would say, 2-plus years. Frankly, I've had my eye on this ball as many of us has for probably half of my career in terms of what this combination could look like. It also allowed us to begin working on our playbooks that I spoke to you earlier about. It began to let the CP team build out what could be the art of the possible with these 2 networks together, and then I'll tell you, over the first 60 days of CPKC, I spent about 75 hours in multiple meetings, every commodity, over 100 of our sales and marketing team going hour by hour, working on what the defined strategies are for every commodity we're going to haul. I can tell you the themes of those meetings were about how we make our own luck, how we take the chains off that KCS network. I'll remind you guys that 80% of the KCS business in the past was all interchanged. And I'm telling you, a lot of those movements were 100-mile less or less hauls, basically big switch charges. How do we change that mentality? How do we look for opportunities to use the power of this network, create value for our customers and ultimately back to you as our shareholders. I'll give you an example. And this is maybe sort of weird that I'm going to be talking about this up here, but 1 of the very first playbook I got into was with our Energy, Chemicals and Plastics team, with Coby and his team and they were telling me about lube oil. I know it's weird, I'm talking about lube oil up on stage at a railroad, but maybe it's not. Anyways, there's 5,500 cars of lube oil that KCS originates on its network to a whole variety of destinations. All of it, of which is handed off to connecting carriers. Most of the hauls, the KCS team had with its lube oil were honestly under 100 miles, a lot of them 20 miles. So basically, a big switch charge. So we began to sort of dig into why and are these the only markets? And who else uses lube oil? And what is it used for? And where could the destination consumption markets be? But lo and behold, we started to dig into 1 particular move that was a 20-mile haul in KCS, we handed it off to a Western carrier, and it went to Arizona. I'm like, well, those are private assets team, right? You are all private assets. So we got an interchange. We've got to go all the way out west, get the car back. I said, have we talked to this customer about markets that could be in North America or Canada located on our railroad, set the team to work. They came back a few days later and said, "Look, lo and behold, we found a user of the same product in North Dakota, okay? That's interesting. On CPKC, up in the Minot area, all right, have we played matchmaker yet? Have we got those 2 talking because right now in my mind, I'm seeing dollar sign saying, I'd much rather haul that thing 1,500 miles up to North Dakota, then I do 20 miles handing it off, go into the West. Well, lo and behold, we're running test cars now of lube oil out of this location up to North Dakota. We keep those assets on our railroad, the private assets. We spin them faster, creates value for the customer, value for us. We can utilize the power of the franchise. It's not that we cut off the other market opportunity, but it's an opportunity for our customer now to grow in their thinking of the markets they can reach with the power of this franchise. So the other point I want to make, and I'm going to take you through each 1 of these is we've got $5 billion in opportunities identified here. I don't want to win at all, right? Playbooks are designed to strategically go through and call out the best opportunities to create value for this network, value for us, value for our customer. Let's take a look at each 1 of these, and I'll give you a little description on how I'm thinking about them. Rail-to-rail opportunities, this is probably the simplest area to think about. I think about it in 2 ways: share shift and direct route conversion. Share shift, think about it this way. Back in 2018, when we fix C engine, I told you in that Investor Day that we saw a lot of traffic that just had gone heavyweight our competitor because we didn't have a product, a lot of customers were -- 100% of their business on our competitor. And that we saw an opportunity that maybe peel off 10%, 20%, have the customer experience our product, and then we'll see how that journey goes in terms of growth with those customers. That's how you should think about share shift. There's a lot of opportunity in the North-South corridor, which customers have just sort of been locked into 1 or 2 modes of transportation or other rail providers that, frankly, over the last couple of years haven't really given them a good ride, but there hasn't been another option. There's a unique opportunity now for these customers to diversify their transportation portfolio, put some of that business on CPKC. The second area, you should think about is route conversion. And here's how I want you to think about that area. How many people in this room had to make a connection flying here today? I know you all didn't fly private, yes. Well, that's exactly how you should think about this area. This is the opportunity to take and interchange, to take a connection out of the mix and go direct. So there's a lot of existing opportunities that are CP only or KCS only where we're handing off traffic, that now we can work together and make that direct connection. We can do it CPKC single-line haul. And honestly, I kind of view this area as low-hanging fruit. This is stuff we just got to grind in mind. We got to educate our customers on the power of what this conversion can look like and what it can do for their businesses. Let's talk about truck to rail. First of all, right out of the chute, I'll tell you, much bigger opportunity than we understood 2 years ago or even 6 months ago. Tony Hatch, I think, called it out right in his memo the other day. Said 64,000 trucks seems conservative. Well, you're right, Tony. The opportunity for truck conversion is almost limitless as long as we establish the products and routes that can compete in the marketplace. And I think that's where the industry, particularly in the U.S., has fallen short. I think we've had a lot of success in Canada, when you think about our 100 series trains from Calgary to Toronto, that once you put the discipline in place, you can convert truck to rail. We've done it. And I'm confident in that North-South corridor. And Jonathan is going to talk about it extensively that we'll continue to do it in that lane with our partners. We see it about a $1.8 million addressable truck market that's out there. I'd say addressable because it's been an effort to mine the data to say, all right, what are those lanes that we can best service that make the most sense that are in that length of haul that make them conducive to conversion. What are the products in those trucks that make sense to put in a 53-foot box or a reefer box that we can haul from origin to destination. And I'm super pleased that a big part of the early wins we've now announced with Knight-Swift and Schneider. And of course, 100% of the Americold opportunity and reefer opportunity is all truck to rail conversion. And I also want you to think about this area in terms of greenhouse gas emissions. Early returns, 60% to 75% reduction in greenhouse gas emissions for those opportunities that we've converted and put on our 180, 181 train pair. And I've been in endless meetings since I've been in my role where many of you asked me, well, but is that really a buying decision? Do your customers really -- is it just a nice to no piece and frankly, the truth is, in the past, it was, now it's a buying decision, right. These transportation managers and directors are getting more and more pressure to make greenhouse gas emissions part of their equation and how they select to move their goods from A to B. That's part of the reason why we dove into and Keith drove hard a carbon calculator and the best in the industry carbon calculator in terms of ease of use and accessibility to our customers, the ability to put in that I want to move a product from Mexico City up to Toronto and quickly spit back, what's the benefit of doing that? What if I do put it on CPKC? What does that benefit to me in terms of my Tier 3 scope emissions? It's also, I'll tell you, just another tool in the toolbox for my sales team, much like the hydrogen locomotive that we talked about yesterday. How do we use that as part of our discussions with our customers, again, that differentiate CPKC. All right. The third area of the pie, I want to touch on is industrial development and near shoring. David and Coby are going to get into this in far more detail. I'll tell you, again, I think this is an area of our pipeline that's unique to CPKC. It's larger than I ever anticipated. And this area really supports, as you think about it, the long game of this investment. A lot of these projects will require infrastructure and capital to develop. They're going to take time to build as you think about it. And frankly, some of the opportunities in here are self-help where we are pursuing this industrial development or this near-shoring activity to our network, but I'll also be honest with you, a lot of it is just the power of the franchise. Franchise is attracting that opportunity. It's the electric vehicles, it's the steel business. It's the grain announcements that it's no longer just 8,500-foot across Canada. It's 8,500-foot moving down through the U.S. and ultimately down into Mexico. And then finally, the last piece of the pie, and honestly, I didn't know what to call it. I called it other self-help, not really exciting or descriptive. But I did it because I know we talked to you a lot that we believe we're different in terms of how we market and sell because we make our own luck. We're willing to outhustle in some areas. We're willing to be a little more creative. And that's what I think about in terms of this category. Think about this in these terms. This is about taking ports and outlets and creating new markets for our customers, much like I described in those movements to North Dakota or much like I'm going to describe in terms of our fertilizer opportunity out through Port Arthur. But it's also about hustling with our transloads to extend our reach. And our short line partners -- I mean our short line partners have -- like it's Christmas morning for our short-line partners, they just gained completely new access to 3 countries that they never had before, that they were always potentially locked into a route with maybe the UP or the BN or whatever the carrier might be. But now they have the opportunity to unlock our route to compete into those marketplaces. And then the last area that I lumped into this, and again, I talked about it last night quite a bit with the group, it's just improved business discipline. And I'll tell you from day 1, we implemented with the KCS team and frankly, a good reminder to the CP team, some very strict disciplines in terms of expectations around what we expect on renewals of contracts, what we expect on all of our pricing, what we expect on our investment returns, what we expect on what incremental opportunities really make the best sense for this railroad. All those things create unique additional value to this franchise. So look, it's a big pipeline. I'm not going to even begin to suggest that we want at all or we're going to win it all, but I'm super pleased in terms of the quantum of opportunity that exists out there today. It's constantly being recharged and the team here now is going to really take you into the details of what it looks like. So the next hour or so, get ready. This is going to be quite exciting. And we're going to kick it off with David Eaton who's going to join me on stage to get into and let me introduce David. David is our Director of Business Development. He is based down in Mexico, and he's going to come up and dive into specifically the near-shoring an industrial development opportunities. David?

1994. Think about where you were in 1994. 1994 was a year of transition, and to a certain extent, turmoil in Mexico. The year started off January 1, 1994 with the implementation of NAFTA. And that's when our near-shoring journey begins. In 1994, there was a significant amount of turmoil in Mexico. And the year ended with the Mexican economy in free fall. NAFTA saved Mexico from a prolonged crisis. NAFTA created the incentives and the institutions for a rapid return to stability in Mexico. And that's when our near-shoring journey begins. We see that Mexico was poised for aggressive growth. John talks often about the field of dreams. NAFTA is laying the groundwork for our today USMCA, for North American integration. Since the implementation of NAFTA, bilateral trade between the United States and Mexico has grown 700%, over 700% growth. Since the USMCA went into effect in 2020, we've had about 25% growth between the United States, Mexico and Canada. I moved to Mexico in 1994. As a young law student, I had the opportunity to work with Dr. Boris Kozolchyk at the University of Arizona College of Law and he was an adviser to the U.S. NAFTA negotiating team. This opportunity opened my eyes to Mexico's potential. It led me to move to Mexico in 1994. And with a bunch of buddies from Toronto, Texas, Arizona and Mexico, started a small little law firm and consulting firm, Monterrey Business Consultants. And in 2000, had the opportunity to meet Warren Erdman, and a couple of folks from the KCS team. It started helping us that journey to obtain 100% ownership with the Mexican franchise took place and when we secured up the 100% ownership, I have the opportunity to come on Board as an employee. Since joining the Mexican franchise, I've had different roles. I started off in Corporate Affairs, industrial development, sales and marketing, Chief Transportation Officer, customer service and now a very exciting new role in business development for CPKC. I also have the opportunity to serve as President of the American Chamber of Commerce in Monterrey and Monterrey is the epicenter of near-shoring. Monterrey right now is at 98% absorption rate on their industrial parks, and there's just a lot of folks coming down looking for space in Monterrey, it is pretty exciting. The Council on Foreign Relations recently said the globalization is now regionalization. The world has been divided up economically into Asia, Europe and North America. North America with 27% of global GDP is positioned to be the advanced manufacturing platform for the world. Now we're not nearly as politically integrated, for example, as Europe and Asia is certainly much larger. But the level of supply chain integration in North America is truly part of the synergies that we'll be talking about here. CPKC is the logistics backbone of this near-shoring opportunity, the logistics backbone of North America. We are witnessing a pivot in global supply chains from Asia to Mexico. Mr. Creel mentioned this morning that, of course, this has been going on manufacturing in Mexico for quite a few years, but the COVID reality has supercharged the movement of companies to Mexico and the development of supply chain integration in North America. The pandemic forced us to derisk supply chains, to plan for contingencies, to build redundancies into our systems. The drivers of near-shoring are many, but a couple that we should keep in mind, global tensions. Of course, we have war in Europe. We have tensions with China. So geopolitics is certainly one of the main drivers. You see a lot of other factors such as emissions reductions targets. You transport your product shorter distance, of course, your emissions are less. We see that there are issues such as changes in U.S. industrial policy. The U.S. has realized that they can't go it alone. This is a big change in U.S. industrial policy. The Inflation Reduction Act, the CHIPS Act, there really is a recognition that North America needs to work together, and there are policies out there that are driving that. The USMCA creates incentives institutions for further North American integration. Think about the value-added or regional content rules of the USMCA. There are incentives out there to source your products in North America. We'd like to use a couple of examples. And probably one of the finest is Barbie, right? 1998, Mattel, to a certain extent, spurred on by NAFTA that went into effect in 1994, that created a Barbie manufacturing plant in Monterrey. Subsequently, offshoring to China became very common practice, right? Mattel, like many others, begins making plans to reduce operations in Mexico and start increasing manufacturing in China. Well, the world begins to change, as we all know, in 2020, the USMCA goes into effect in 2020, creating renewed certainty for investment in Mexico. We also see that 2020, as a result of the COVID-19 pandemic, forced us to work through congestion, work through changing consumer demand. Those 5 or 6 weeks that you can get when you're sourcing out of North America are critical for companies like Mattel. So Mattel makes a big pivot. They decide that they're going to not only are they not going to close down the Monterrey plant, they announced that it's going to be the largest plant in the world. Now keep in mind, please, that Mattel moved significant inbound bulk resin and outbound finished product via rail. Electric mobility is coming to Mexico. Jonathan will establish that Mexico has one of the world's most important automotive hubs. The automotive industry in Mexico is truly the best example of North American integration. Supply chain integration is exemplified by the auto industry in Mexico. And this industry in Mexico is making an aggressive transition to electric mobility. Now Tesla is going to supercharge an already energized EV environment in Mexico. Certainly, Tesla is sucking up all the air in places like Monterrey. But let me tell you first about BMW in San Luis Potosi right across the street, right across the track from a wonderful aluminum dynamics opportunity that Coby is going to talk about. But BMW in March 2023 announced that it's going to invest $866 million in an electric mobility manufacturing facility in San Luis Potosi served by CPKC and a lithium high battery manufacturing plant will also be in play. Think about those raw materials in Canada, the incentives under the Inflation Reduction Act, the opportunities to hopefully down the road move some of these rare earth elements and materials for battery manufacturing in Mexico. So BMW is an example of the transition of Mexico's very, very robust automotive industry to electric mobility. Tesla. Tesla, $10 billion is what they've announced that they will invest in their plant in Monterrey, the Gigafactory. Now this Gigafactory underscores the near-shoring thesis. It's widely reported that Tesla has announced that they're going to invest in this Gigafactory, $10 billion due to many near-shoring drivers. They're looking for quality workforce. They're looking for close proximity to suppliers and to end consumers. They're looking for quality labor, good universities, quality local government, logistics connectivity. Tesla could result in $15 billion in additional Mexican exports to the United States. So Tesla is a testament to the exciting things happening with respect to near-shoring in Mexico. Geography, demographics, incentives. Think about geography, think about demographics, think about the incentives under the USMCA incentives under the Inflation Reduction Act. Demographics are driving business decisions. Companies are making decisions based on the availability and the quality of their workforce. Companies seek low-cost production and quick access to markets. Mexico indeed has low-cost production and quick access to markets. But Mexico also has one of the world's most talented labor forces. Every year, 2.2 million eager young Mexicans come into the workforce. The median age in Mexico is 29 compared to 40 in Canada and the U.S. Customers are seeking the opportunity to work with Mexican labor. Many surveys of C-suites have determined that there are lots of incentives for large manufacturers to onshore back to the U.S., and that is certainly happening, and CPKC will benefit from that. But what they're finding is that they just can't find enough people for the available manufacturing jobs in the U.S. and working with Mexico offers a solution. The demographic story is compelling, and John Deere is a pointed example of the advantages or the combination of geographic proximity and favorable demographics. John Deere recently announced that it's going to close its cabin welding operation in Waterloo, Iowa and move it to Ramos Arizpe, Mexico. Great city for us, Ramos Arizpe, Mexico outside of Saltillo. John Deere announces that this opportunity is going to free up floor space in Waterloo for new product lines, for more value-added product lines, for less labor-intensive and then moving that labor-intensive welding operation down to Mexico. So truly an example of how demographics and geographic proximity are combining for companies to make decisions as far as where they're going to manufacture. Think about a virtuous cycle, if you would, please. North America is going to benefit from this virtuous cycle of near-shoring. As near-shoring grows, North America grows. We have a virtuous cycle of CapEx. Don't remember who it was, but one of you guys talked about the mother of all CapExes that there was going to be this investment. Morgan Stanley talked about a potential of $155 billion of additional Mexican exports to the U.S. over a 5-year period. Now what that does is it draws in a bunch of CapEx to increase manufacturing capacity in Mexico. And that's the virtuous cycle. One of the most cited reasons for near-shoring is the location or the proximity to suppliers. So as Mexican exports increase, CapEx flows in to build that manufacturing capacity. And that, in turn, strengthens the local supplier base, which encourages others to pivot to Mexico. And that's the enduring pivoting cycle of the virtuous near-shoring opportunity in Mexico. China and Europe were also moving aggressively to Mexico. North of Monterrey, there's an industrial park called Hofusan. Hofusan is an industrial park for 100% Chinese companies, located just around the corner from our CPKC Salinas Victoria Intermodal terminal. This industrial park for Chinese companies houses many companies from China, from sectors like auto parts, electronics, IT, hardware, furniture, and as China moves in aggressively, they are also feeding on the opportunity for flexibility in the supply chains, allowing companies to use our Lazaro Cardenas route if they want to continue feeding off of some of their suppliers in Asia, but also taking advantage of those North American suppliers and a lot that we're finding in Monterey. We see that the Europeans are also moving aggressively into Mexico. A couple of examples would be LEGO and Bosch. The Danish Powerhouse, LEGO, has a plant north of Monterrey, which is their largest in the world. And LEGO consumes a significant amount of bulk resin via rail. The German manufacturer, Bosch, is transferring refrigerator production for the U.S. market from China to Monterrey, yet another example of these exciting opportunities that are presenting themselves. Customers, companies seek cost-effective production and access to quick markets. Truly, CPKC is the backbone of North American integration. CPKC will benefit from and contribute to near-shoring in Mexico. The opportunity that presents itself as a single line North American railroad is unique. CPKC will contribute to growth and prosperity in Mexico and in all of North America for many years to come. Thank you very much.

Okay. Thank you very much, David. Certainly, some exciting things going on in Mexico and terrific opportunities for CPKC. We're now going to take about a 15-minute break. So we'll see everyone back at 9:45 a.m. Central Time. Thank you. [Break]

Okay. Good morning. Welcome back. It is now my pleasure to introduce our next guest to the stage, Mr. Jonathan Wahba, CPKC's Senior Vice President, Sales and Marketing, Intermodal, Automotive and Bulk.

In 2021, I was riding in the engine of this train that you see behind us. This is Train 421. It's a mixed manifest train that runs every day between Toronto and Vancouver. Our assignment that day was to take this train from Kamloops in the interior of British Columbia to Boston Bar, which is the last crew change location before Vancouver. About 2 hours into our ride, we passed through a small community that I hadn't found about in years. And what jogged my memory about this community was a meeting and conversation I had with Mike Foran and Mark Redd years earlier. And I remember that meeting and conversation well because Mike and Mark were quite upset with me coming out of that meeting. In that meeting, we had met with a customer who wanted to bring on new business in this small community in rural British Columbia. And I thought this was a good thing for CP. It was net new business. It was trucks off of the highway, and it was priced well. As we rolled through the small community and the engine of that locomotive in 2021, a light bulb went off up here for me. And I realized why Mike and Mark were concerned. You see this train behind us was 10,000 feet long. And the customer siding was only 4,000 feet long. So that meant we would have to stop our train, cut into pieces, shove the cars into the customer, pull them out and off we go. And this is the work of the men and women of CPKC do every single day, thousands of times. There's nothing unique about it. But what was unique about it was the location. You see this is the Ashcroft subdivision between Calgary and Vancouver. And it is the busiest section of mainline we have with CPKC running up to 40 trains a day over it. To put it in layman's terms, you would have made more sense for American Airlines to land a 777 on the busiest runway at O'Hare to pick up one passenger with all their planes circling overhead than it would have for us to stop to serve this customer. You might be thinking, Jonathan, what the heck does this story have to do with Investor Day or with CPKC. The reason I'm starting with this story today is because I think it's very important for all of you in this room to understand the profound impact Keith's investment in people is having on how we run this company. Keith took me out of my job for 7 months in 2021 and put me in a management -- in a training program where I became qualified as a locomotive conductor and a railcar mechanic -- railcar inspector. That training positioned me incredibly well for my next job that I came back to in the company later in 2021, which is to help author the commercial strategy for what our new company would be. In short, what business could we attract or unlock with the merger of CPKC? What I'm going to do over the next 30 minutes is take you through 4 areas of the business that I worked on over that 2-year period in domestic intermodal, a reefer business, our automotive business and our international remote business and give you an update in terms of what we've been up to, what we've discovered, but most importantly, provide that ground level coverage that John talked about relative to guidance for what we expect to deliver in the years ahead. So with that, let's get into our domestic intermodal business. Early on in the merger application process, as we were learning about CPKC or what will become CPKC, we learned about this place behind me. What you see here is a drone shot flying south over Texas towards the border with Mexico. This is the World Trade bridge at Laredo, Texas and Nuevo Laredo, Mexico. And as you can see, it is one of the busiest and most congested border crossings on the continent. In addition, there's other problems with this place. Every night, at midnight, the border closes until 8:00 a.m. and on the weekends, it closes at 4:00 p.m. until the following morning. The question that came to us at CP was could we take our decades of experience running an express transcontinental network in Canada and apply it to this problem. Obviously, our belief is that we could. And so just 2 short weeks into this new company, we did this. [Presentation]

So what you see behind me was the very first Mexico Midwest Express train connecting San Luis Potosi in Chicago, arriving in Chicago 12 hours early. We are ushering in the new era of truck to rail conversion opportunities. So why do I say that? Let's take a direct comparison look at our service versus moving over the road. As I mentioned earlier, this train is a new era for intermodal conversion. And I really don't see the competition with this service being either railroads, I see it being with over the highway. Recall the opening drone shot of the Laredo Bridge that has closed 8 or 16 hours a day and contrast that with our rail bridge that's open 24 hours a day. When you layer on the information that Keith shared in his opening slides about us building a twin bridge over the Laredo Gateway, our ability to cross the border will be seamless with the -- and almost unlimited, giving us the capability to run almost 80 trains a day later next year when that second bridge is built. Next, think about the driver shortage that affects the North American trucking industry and how frustrated those drivers would have been sitting in that line every single day waiting to cross the border. We don't have that on the intermodal side of our business. And finally, I would highlight the fact that Mexican citizens are not permitted to work in the United States, which means every time a Mexican truck driver crosses that bridge, he or she has to get out of his tractor and swap that tractor with an American driver to continue onwards. This adds complexity. It adds cost and most importantly, it adds time. Last night, at dinner, Keith said to everybody, words are important, but actions speak louder than words and actions are what are important. So why don't we take a look at what we've been up to from a results perspective, just 2 months into this new company. For those of you in the back of the room, who can't read the chart, let me explain what you see behind me. This is a bar chart that compares transit times between San Luis Potosi and Chicago. On the right-hand side, you see the next closest rail option. To the left, in the yellow, you see what we told the STB we would do. This is all measured in days. To the left of that, the gray box, you see what a single driver truck is capable of. And finally, to the left of that, you see how we have performed in our first 2 months. And what this slide shows is that our domestic intermodal service is competing on par or even slightly faster than a single-driver truck. When you add the economics of rail and the environmental benefits of our service versus over the road, we believe we have a true winner in this product. Lastly, before I move off the slide, just a quick comment on flattery. And if you, like I believe, the imitation is indeed the highest form of flattery. It is clear that our competitors to the North and our competitors to the West are very impressed with what we've been up to. And as you can see from the slide, while it's clear they will never compete with our single-line service, it is nice to see that the competition that they said would never amount from our merger is indeed alive and well. Some of you may be thinking to yourselves this sounds familiar from our last presentation in 2018. And if you're thinking that you're indeed correct. If you think back to Investor Day of 2018, I stood up on this stage and I said we were going to use our Express Transcontinental intermodal service to revolutionize east-to-west growth in Canada. And I shared with you that we were going to add a demand management system, a dynamic pricing model, unlike anybody else in the industry. The CAGR chart on the right-hand side shows that. We've grown at 7% CAGR since 2018 since I last met with you in our domestic intermodal business. And I share this with you as I hope our track record of growth helps underpin your confidence in this team's ability to do this again. And while my words and numbers on the screen hopefully are convincing, I think the most convincing thing that I can share with all of you is the words of our customers. I'm sure all of you would have seen just a few short weeks into our merger, the twin announcements or the back-to-back announcements of securing Schneider and Swift as anchor customers. Early in 2021 -- in the middle of 2021, one of the first customer meetings that Keith and I took was the Green Bay, Wisconsin. We're going to see Schneider National. And then after that on to Phoenix to meet with Swift. Many of you in this room cover Schneider, and it's a company that needs no introduction. But for those of you who don't, it's important to recognize Schneider is one of the oldest, largest and most well-respected service transportation companies in North America. They have a stated goal of doubling their intermodal business by 2030. And if you think about their business model and strategy, which is Schneider-owned containers, Schneider-owned chassis, Schneider-owned trucks and company drivers, they are the perfect arms and legs to complement our North-South MMX service. Likewise, with Swift, a company that needs no introduction in this room, the merger of Swift and Knight created the largest fellow trucking company in North America. They're one of the oldest and largest participants in the Mexican business. And like Schneider, see, our North-South access is an ability for their organization to grow faster than the rest of the market. In closing the slide, I would draw your attention to the quote in the middle of the screen, and I hope all of you can read it. And it's from Mark Rourke, who's the President and CEO of Schneider. 7 or 10 days into our new service, I called up Mark and I wanted to report into him how we were doing. And I said, Mark, through the first week or a little bit more than a week, every single train that Mark Redd and his team have delivered has either been on time or early. And Mark's response to me was, Jonathan, you shouldn't call this the Mexico Midwest Express, you should call this the CPKC bullet train. I don't think it's going to be possible to have higher price than that from one of our largest and most important customers. So what happens next on the service? And where do we go from here? Both John and Keith have talked so far about our initial commitment to the Service Transportation Board. And in our application, we told them we would take 64,000 trucks a year off the highway. I can tell you with certainty that my team has line of sight to deliver 2x or 3x that amount over this multiyear period. As David just so well explained to us, the demand for Mexican manufacturers to move goods to North America is only going to grow in the years ahead. And there is no railroad better suited to deliver that product and those needs than ours. When you consider our industry-leading transit times, our decades of experience doing business in Mexico, the greenhouse gas benefit of using our service, the latent capacity on our railroad and 2 major anchor customers all secured in the first 75 days of this company. I hope you can share and understand my excitement that we are just getting started in this line of business. So in an effort to help you with your models and your reports that you'll -- some of you will write tonight and tomorrow, Coby and I decided that we would give you a little additional color around how much revenue in each of these vignettes will generate now and in the future. So for Schneider and Swift, I characterize this as $100 million of a secured opportunity that is ramping on to our business as we speak. Overall, this domestic intermodal segment on the dry van side, I characterize as a $200 million opportunity. So how do we get there? Rough numbers, but a good safe placeholder. Every transcontinental domestic intermodal train payer that we run is worth $200 million in revenue on our legacy CP network. If you look at the OD pairs going from the middle of Mexico to Chicago, it's fairly similar. So a good safe placeholder is $200 million, but half this train is full right now, and I've got line of sight to filling the rest of it over the course of our multiyear period. While I'm very excited about our very quick start on the dry van side, I'm equally excited about the next segment of our business that will also ride on MMX service, which is refrigerated. If I look back at our playbooks from 2021 and 2022, as we are analyzing what other businesses could we bring to this network, the refrigerated segment is when that quickly comes to mind. Recall, in Canada, we are the largest refrigerated provider for Loblaw, Canada's largest grocery store. And we have the largest and most modern set of gen sets or gen packs, which we use in our international intermodal business. So like with those early meetings with Swift and Schneider, we traveled the continent to meet with a different tranche of shippers to explore whether or not our intermodal service will be applicable to moving refrigerated products. And what we found was quite different than what we found with the dry van exercise. Because what we found is that no one, and I mean no one had ever moved a refrigerated intermodal container via rail across the Mexican U.S. border. We had unbeknownst to ourselves stumbled across the true final frontier of intermodal conversion. So with a proposed network in place, we had to go understand a little bit better what could we move and for whom. This next very sophisticated slide helps illustrate that model. So for those of you who live in Chicago or New York or Toronto and have been to the grocery store in the wintertime, undoubtedly, you've picked up a piece of fruit or vegetable with a little sticker on it that says grown in Mexico. And that's because over the past 20 years, Mexico has surpassed California as the fruit and vegetable basket for the upper Midwest and the Northeast -- North America. California has experienced problems with land and with drought and with labor and with costs. And Mexico has emerged as the low-cost producer of fruits and vegetables -- fruits and vegetables. And again, back to those grocery stores, every single one of those items or fruit or vegetable, would have arrived there by truck. That's the only way they can get there. During the winter months, we learned that over 100 full truckloads a day across the border at Laredo heading north. So it give us pretty good confidence that there is indeed a market to be made. The question then will become, well, how would we get those containers back south. And somebody, at cocktail hour, last night asked me about this. So I'm happy to talk about that. If you draw a circle encompassing Omaha in the North and Kansas City in the South and go a couple of hundred kilometers out from that line, you've just drawn a circle around the largest protein producing region on the continents. More beef and pork is produced in that region than in any other part of North America and aligns perfectly with our Northern terminal in Kansas City right here. From an order of magnitude, again, we learned that during peak season, the United States sends over 100 full truckloads a day out of this region of frozen and fresh beef and pork into Mexico. So we've established, we've got the MMX service that's fast enough. We've established that we've got an addressable market. There's just one thing missing. And that's containers. So that's why 2 weeks ago, you saw an announcement for our organization where we announced the single largest purchase of refrigerated containers in railroad history. We purchased 1,000 brand-new, 53-foot containers equipped with state-of-the-art telematics. I'm happy to tell you that 250 of these units are already in service, with the remaining 750 said to be delivered by the end of the year. With the unmatched velocity of our MMX product, a large addressable market and the newest and most modern fleet of containers in the world, we are well positioned to attack this market, and I'm happy to tell you that in the past few days, we've begun to move our very first loads north from Laredo of produce and south out of Kansas City of protein. And if this is where the story stopped, that we've got 1,000 new boxes, we're going to make a new market, we're going to be trailblazers in an industry, I'd be pretty proud of the story and of the team behind me. But the reality is this is not where the story stops, it gets a whole lot better. And that's because of our announcement last week with our partnership with Americold. Some of you in this room may be familiar with them and some of you not. So I'm going to tell you a little bit about who they are and why we're so excited about this partnership. So first, a little bit about Americold for those of you who are not familiar. Americold is the largest publicly traded refrigerated warehousing REIT in the world. They have 245 buildings on 4 continents, encompassing 1.5 billion cubic feet of refrigerated capacity. In our assessment, they are the largest and most sophisticated player in the world in the food refrigeration space, and they're really an integral part of the global food supply chain. Like with Swift and Schneider, my team and I have been working with the Americold executive team for the better part of the past 2 years to see is there a model we could put together that leverages their expertise in warehousing and our expertise in transportation. So let me tell you a little bit about this deal that we've just announced and what we're building. So as our announcement would have described last week, we've entered into an arrangement with Americold where we will contribute land inside our intermodal terminals across our network. Americold is going to contribute state-of-the-art warehouses on that same land, and will co-locate with us. The benefit of colocation is something that should be familiar to all of us in this room because it was the main theme of our Investor Day in 2018 room to grow. The benefits of colocation for those protein producers I just talked about in the Upper Midwest is that they can preposition their fresh or frozen protein to this building we're going to build right here in Kansas City so that when it needs to depart, when the order comes in to go to Mexico, it's a matter of minutes or hours to get on our train, not a matter of days. And in the temperature-controlled space with perishable space, every minute matters. Additional benefits of colocation include cost benefits. So to get from this facility to the train is across terminal shunt that costs $30 or $40 as opposed to a crosstown dray, which costs $200 or $300. There's environmental benefits of taking trucks off the road as well for these shippers. And lastly, Americold is going to be able to load these containers to the maximum weight permitted, not the U.S. highway weight because once they get loaded and hit the rail, they don't touch U.S. soil again. So there's incredible efficiencies that are going to be derived from this. Keep in mind, a key part of our announcement with Americold is that we said we're going to announce a series of buildings. It is our intent that in the months and years ahead, we will announce additional locations in addition to Kansas City across our network, thereby creating what we'd believe to be the most sophisticated and advanced food ecosystem -- food transportation ecosystem anywhere in North America. One final comment I'll make before I move off the Americold file. And that's about an announcement they made earlier this year with DP World out of Dubai. DP World is one of the largest marine terminal operators in the world, and they announced a very similar partnership with Americold earlier this year, whereby Americold is going to build additional warehouses co-located with strategic deepwater port terminals around the world. Keep in mind, in North America, DP World operates marine terminals in Vancouver and in Saint John. So I think it is not a stretch to imagine the next time we're up here in a couple of years at Investor Day, I will be able to put a network of dots on the map of Americold buildings connected exclusively by CP's rail network. This is a partnership and an ecosystem that will be unrivaled by anybody in North America. So from a numbers perspective, again, to help you with your models, I would characterize it like this. For every 1,000 refrigerated containers we purchase as a railroad, that's worth about $100 million in revenue as a safe number. I characterize this as a $150 million-plus opportunity because by the time the Americold first facility opens here in Kansas City later next year, those 1,000 containers I put on the screen will be fully subscribed, and we're going to have to order additional containers. In closing, I'm extremely excited about our opportunity to grow in the refrigerated space. Another market that will transition to now that I'm equally excited about is the international intermodal business. The last time I was up on the stage in 2018, our international intermodal map was a heck of a lot different than it did today. Recall at that time, we only service the ports of Montreal and Vancouver. And our story at the time was about rebalancing the marketplace with our main Canadian competitor. As you can see again from the CAGR chart, we did exactly what we said we're going to do, and we led the industry in growth in this line of business with an 11% CAGR, driven by wins from Hapag Lloyd, from Yang Ming and from CMA CGM. The challenge, though, as Keith alluded to this morning, with our legacy business is that without any other deepwater access, our ability to grow beyond Montreal and Vancouver was going to be limited because it was a very mature market. Of course, all of that change, and you can see by the map behind me is dramatically different today where we now enjoy an unparalleled deepwater reach that is not even close to anything, any other Class 1 can offer. We access the Pacific in Vancouver, the Atlantic in Saint John, the Gulf through a number of ports in Mexico and the Pacific Mexican Coast at Lazaro Cardenas. I'm going to talk to you now about 2 of these new dots on the map at opposite ends of the continent and explain what we've been up to and the growth we've been enjoying there. So first, I'm going to start with Saint John New Brunswick and a quick history of -- it's a great video. Okay, a quick history lesson on Saint John. In the late 1880s, CP first connected to the port of Saint John. And for about 100 years after that, we service the deepwater port in the East Coast, and it was the largest port in Canada. In the late 1990s and the early 2000s as Canadian Pacific was going into a severe economic decline, management at the time decided that they would burn the proverbial furniture to heat the house. And one of the logs of furniture they chose to throw in the fire was the railroad that connected Saint John to Montreal and while that might have generated a little cash for the company at that time, what it did was create an Achilles heel for this company that really affected us in a negative way for the next 25 years as our main Canadian competitor had access to Halifax, and we had no commercial response. With our acquisition of the CMQ in 2019 and our partnership with J.D. Irving, our ability to get back to Tidewater has changed and a return to Saint John has been simply spectacular. A number of you in this room have been with me out doing investor tours in Saint John. And at the time of those tours, I talked to you about the expansion that was occurring at the port. The most important piece of that expansion was the commissioning of a second birth and the introduction of 2 new super post-Panamax cranes by DP World, which would allow them to serve 13,000 TEU ships moving forward. The video that we're going to show you right now is taken in the past 2 months and it shows the completion installation of those cranes. I think the visual is very important to give you a sense of what this port is capable of. So let's roll a 45-second video, it's going to show you what we've been up to at the port of Saint John. [Presentation]

So if I transition to say, so what do we have been up from a results perspective? Our early results on the port of Saint John have been very encouraging. Recall in the summer of 2021, we welcomed our first container ship from Hapag-Lloyd. In early '22, we celebrated the win of CMA CGM in their arrival at Saint John. And then later in 2022, we celebrated a second weekly call from Hapag-Lloyd. And as you can look at the CAGR results, they are very impressive. We've quintupled our business in the past 4 years, and we are just getting started. If you ask yourself how is this port able to go so quick -- to grow so quickly and why are we so convicted in it? There's a number of reasons. First, our route. We are 200 miles shorter from the port of Saint John into Montreal and Toronto than our competitors. And our line goes exactly as the crow flies between the East Coast and the Hinterland. Our main Canadian competitor has to go north and then west and back down, giving us a significant route mile advantage. Number two, there's no local congestion at the port. As you can see, DP World can load directly to rail and J.D. Irving can depart trains immediately upon vessel arrival. And three, there's an incredible export market in the port of Saint John, seafood, lumber, frozen potatoes, all want to leave Atlantic Canada headed for Global Markets. So we have all the ingredients in place for continued growth. We've got a great partner in DP World and in J.D. Irving. And I'd say I look forward to sharing future wins with you at the port of Saint John in the years to come. If we switch our focus to the exact opposite end of the continent and talk about Lazaro Cardenas, we're going to take a pit stop here first. And where we are here is San Pedro Bay off the coast of L.A. Long Beach. And what you see behind me was just a small number of the 100 container ships that were queued up last summer for up to a month at a time waiting to birth at L.A. Long Beach. And while the pandemic-related challenges at L.A. Long Beach around this photo have certainly subsided, it is worth noting that the challenges at L.A. Long Beach have become systemic, whether it's pandemic-related challenges, labor-related issues that we just saw, chassis-related issues, storage-related issues. The modern reality of North America is that L.A. Long Beach has systemic service issues that are not going to go away. Don't get me wrong. L.A. Long Beach will be the largest gateway entry points in North America in our lifetimes, but the lessons of the pandemic have caused shippers to look for alternative gateways. And while the alternative gateway buzz during the pandemic was significant, the reality with many of those gateways is that they're challenged around route availability or transit times. We believe the introduction of a service at Lazaro Cardenas is the right solution needed right now for the challenges at L.A. Long Beach. And lastly, I'll highlight an analogy that I'll draw in, and Keith has touched on it, that a number of the management team here at CPKC worked at the other Canadian railroad a long time ago, myself included. And 1 of the things that I worked on a long time ago, I got other Canadian railroad was the launch of a service at a place called Prince Rupert, in Northern British Columbia. And I think the analogy of Prince Rupert as a relief valve to Vancouver is very fitting for what we believe Lazaro Cardenas can become to Los Angeles. So let's talk about Lazaro Cardenas. So for those of you that may not be as familiar with it, let me tell you a little bit about this place. 20 years ago, the government of Mexico had a vision for a new deepwater port on the southwest coast of Mexico. At the time, the 1 existing port in Manzanillo was filling up, and it was aging and the government thought time to build a new port that could serve the Mexican population, but they could also act as a gateway to the United States, and that's key. The reality is, over the past 20 years, the vision of the Mexican government developed this gateway never materialized. And while it's been a great port to get into Mexico, the connection to the United States never happened. So you asked them, why is that and what we know differently about it. The reason it didn't happen is because the 2 Western railroads didn't want to play ball. Put yourselves in their shoes, and I can't blame the fracking how they did. If you could get a container at the Texas border from the legacy KCS to take it into Texas a few hundred miles or if you can give that container at L.A. Long Beach and move it a few thousand miles, which 1 would you pick? Well, you would take a few thousand miles. So the gateway service and vision at Lazaro never got off the ground. Our merger or acquisition of KCS unlocks that potential. So then the question becomes, well, what markets could we serve off Lazaro? And during the application process, we ran a number of test trains. And what we found is that shippers were happy to ship with us to the Upper Midwest, to Chicago, to Kansas City. But most importantly, they wanted to ship to Texas. So let me tell you a little bit about Texas and why customers are so interested in it. In 2022, John Brooks and I were having dinner with Hapag-Lloyd, who's our largest intermodal customer. And we brought out this map and we put in front of their executive team, our new railroad. And I said, what do you think what can we do together? And their Senior Vice President of Global Operations looked at us. He pointed at the map and he said, "We can create a Texas shortcut." We asked him to explain what he meant. So let me use an illustrative display here to show what we mean. Let's say 2 vessels leave Shanghai, the exact same time going to Texas. And the first vessel takes the traditional route, Southeast out of Asia, all the way past North America through the Panama Canal, turns north back through the Gulf of Mexico and gets to Houston. Now let's say a second container ship leaves Shanghai, follows the exact same route, but it stops at Lazaro Cardenas and it uses a land bridge to cut the corner into Texas. This model, this Texas shortcut will save shippers 10 to 14 days as opposed to the traditional all water route of going through the canal. The canal as many of you are aware, is having significant low water problems right now where some vessels are having to discharge 50% of their cargo in order to have the draft necessary to transit through. If you are a time-sensitive importer, trying to hit a Christmas holiday or an Easter holiday or Father's Day with time-sensitive cargo that needs to be in stores, 10 to 14 days matters and it's a big deal. Now let's think if you're the steamship line. In order to complete this string from Shanghai to Houston via the canal and back and you want to have a weekly service, you need 6 ships. If you cut the corner at Lazaro, you can make that 4. The container vessel costs a couple of hundred million dollars a piece. If you can take 2 container vessels out of a 6 deployment schedule and deploy them elsewhere in the world, there's hundreds of millions of dollars of savings or capital freed up to do other things. So this went from an idea at that dinner a couple of years ago to what today has become a reality. As today, I'm pleased to announce for the very first time that our long-term partners at Hapag-Lloyd have formally begun marketing the gateway of Lazaro Cardenas to the United States. What that means is Hapag is protecting capacity on their ships, and we are protecting capacity on our rail for Hapag. And while Hapag is my first customer who's up and running on this service, I can tell you that you should expect more positive news from us in the months and the quarters ahead about additional deployments to use Lazaro Cardenas. So back to the models, what's this worth? So Lazaro Cardenas, I characterize as a $200 million a year opportunity. And how do I get there? Why do I have confidence in that? Well, the stated goal for our organization, $200 million, that fills a train. So I would like to have a daily train service running in and out of Lazaro before the end of this multiyear period. From a terminal capacity perspective, which is the other ingredient, we have plenty of it. The 2 terminals at Lazaro today have a collective capability of 2 million TEUs a year. And last year, they put just under 1 million TEUs through their terminals. 1 million TEUs of capacity is 500,000 units, 40-foot units, and that's more than enough that would fill up a train here. That's why we've got pretty big conviction in our ability to hit that number. While I'm excited about Schneider and Swift and Americold and Hapag, the line of business that I am most excited about in terms of our ability to transform this business is what I say for last, and that's the automotive franchise. Let me start with a quick story. Earlier this year, I was at my local car dealership trying to buy a new car. And the dealership looked like this, sorry, Toyota dealership with no cars in the parking lot. And I was talking to the salesperson asking him, when can I get a car, and he said it's going to be 9 months to a year, probably a situation many of you have experienced. And I asked him why is it taking so long and he said the chip shortage and the pandemic and to much of my surprise and he said logistical challenges in Mexico. And I kind of chuckled to myself, and I thought that's interesting. And what that salesman didn't realize he was hitting on is how vehicles traditionally move from Mexico to North American market. So take that dealership in Toronto where I was. How a vehicle would get from the OEM plant in Mexico to be in Toronto is as follows. Step one, it's going to leave the assembly plant on either the FXE or the KCSM, railroad #1. It's going to go to Laredo, Texas, or Eagle Pass, and it's going to get interchanged to a second railroad, [indiscernible]. And they're going to take it north of Chicago and then it's going to get transferred a third time to either the CN or the CP for final delivery into Canada. And even more extreme examples, some OEMs are trucking vehicles from their plants in Mexico to Veracruz or Lazaro, they're short-sea shipping them up the coast of the continent and then trucking them to dealerships. These methods of transportation are inefficient. They add the risk of damage and they take weeks or months on it. If there was ever a line of business that needed the benefits of our new network, it's the automotive franchise. So let me tell you a little bit of how we intend on changing this business? To understand why I think we're so well positioned? First, you've got to understand our map. So if you draw your attention to the right-hand side of the screen, we'll start there. That's the legacy Canadian Pacific's automobile factory origination map. And what it shows is we have a very rich origination network in Southern Ontario. We serve a lot of plants. The problem with the legacy CP is that we couldn't take this cargo anywhere. We would take it 100 miles, 200 miles to Buffalo or Detroit and hand it off to American railroads who would enjoy a long length of haul across the continent. If you switch your attention to the left side of the map and the oval there, you see the legacy KCS origination map, which is the richest automotive origination franchise anywhere in the world, the legacy KCS originates freight at 16 automobile facilities, virtually every OEM in the world. The challenge for the legacy KCS is the exact same as legacy CP, just reversed. All those vehicles, a couple of hundred miles to the border, where an American railroad would enjoy a long length of haul in a profitable move. How does our new network change all this? Well, for the first time ever, we have the opportunity to offer shippers a closed-loop railcar management system that simply didn't exist before. So let's take the example of an OEM in Southern Ontario of your choice. And let's say we go to that OEM and say to them, instead of asking us to take traffic to Buffalo or Detroit, let us take this traffic all the way south into Texas. And when that train of automobiles gets to the Texas market, will empty the auto racks, will collect the empty rail cars and we will shuttle them to the OEM plant of your choice in Mexico guaranteeing your own railcar supply. When the train gets to the plant in Mexico, they load their railcars. And again, instead of shipping north of just to the border, we say to them, use our compounds in Minneapolis and Chicago, in Canada, and rail your product all the way north with us. And when those railcars get to those northern destination markets, we'll empty the cars, and we will shuttle them back to that same assembly plant in Ontario. We have the ability to create a bespoke closed-loop network for automotive shippers that has never existed before, in essence, allowing them to guarantee their own capacity. The missing link, auto compounds. 5 years ago at Investor Day, I stood on this stage and I showed you a video of a dirt field in British Columbia. What you see in the shot behind me was taken last week of that dirt fields, and it shows our auto compound full. Recall back to 2018, our strategy of using land and room to grow, to build auto compounds and other lines of business. Our auto compound in Vancouver was just 1 of many that we have opened since I last met with you. We opened this compound in Vancouver. We opened a compound in Edmonton. We opened a compound in Chicago, and we opened a compound in Saint John. We've created sticky customer relationships by using our land as leverage. So today, in keeping with tradition, for the first time, I've got another great announcement is that we are in the process of opening a brand-new auto compound in Dallas-Fort Worth, Texas. And this auto compound will be one of the major collection sites for southbound railcars from the north to be shuttled for OEMs into Mexico. And in traditional CPKC style, we do not build products or facilities with the hope that customers will come, we only build them when we have customer contracts signed that underpin that investment. I cannot share with you today the name of our first customer as they're busy unwinding themselves from a legacy agreement. But I can tell you that early next year, when this compound opens, you will see it full of vehicles. I said earlier, I believe this line of business offers the most potential because of how we can transform things. So I would characterize this as a $250 million-plus opportunity for us over the period of this multiyear phase that we're looking at through 2028. Where Swift and Schneider are early movers on the domestic intermodal side, automotive will take a little bit more time to develop. We've got to build compounds. We've got to let customers come out of their current agreements. But I have the conviction that 5 years from now or whenever we meet again at Investor Day, the automotive CAGR that I showed previously will continue to hold true. In closing, when Keith asked me to take this strategy a role 2 years ago, I had no idea about the quality and the quantity of the opportunities that we would uncover. I have -- sat through hundreds of meetings in North America, in Europe and in Asia. And I can tell you the meetings that we're having, the level of executives that we're meeting with and the questions we're getting from shippers is wildly different than anything we've ever experienced. Between Swift, Schneider, Americold, Hapag and our new Dallas compound, we are off to a tremendous start in the first 75 days of this new company. And I hope you can hear the excitement and conviction in my voice that the opportunity set that this company has to work on is dramatically different than anybody else in the industry. And that no matter what happens in the macro environment around us, the self-help initiatives that John talks about so often, are truly transformative for our business, and we will certainly lead the industry in growth. It has been a true pleasure of mine to be able to speak with you this morning. I sincerely appreciate your time and your attention. And with that, I'll invite my colleague, Coby Bullard, who leads our merchandise, ECP and transload business. Please come to the stage.

Okay. So as Jonathan said, my name is Coby Bullard. I'm Senior Vice President of Marketing and Sales with responsibility for merchandise, energy, chemicals and plastics and transloads. At our last Investor Day in 2018, I've had actually only been with the company for a few months, but I shared a personal story and talked about how railroading and the history of railroading dated back in my family to the 1880s, actually, 1884 to be exact. And that's when the railroad decided to make a stop at our family store in East Texas and Bullard Texas was founded. And at that point, our community took off and the railroad created prosperity for our community. And I'm here today to talk to you about how CPKC is going to create prosperity for all of the customers and all of the communities that we serve all across the U.S., Canada and Mexico. So before I get into the meat of my presentation and focus on my 2023 playbook and the opportunities that we have, I want to start by taking a look back to 2018. The reality is we've talked about the consistency of our playbook and the fact that -- and I think John said this well when he said it's the same playbook, bigger playing field, right? When you look back at 2018, I had 3 core themes. I was talking about maximizing our existing franchise. I talked about optimizing equipment or utilizing assets, and I talked about extending our reach. As we fast forward to 2023, this is the playbook and the story is still very, very similar. I'm going to talk about industrial development. These are new builds and initiatives where customers are putting new facilities on our franchise or they're expanding existing facilities that are existing on our franchise. I'm going to talk about leveraging the franchise. So John talked about getting down to the ground level on what it means to combine the CP and the KCS networks and how that flows through from an opportunity standpoint. And the merchandise or manifest business that were in the carload business is the perfect example of how bringing those 2 networks together creates power for CPKC and our shareholders, but also creates tremendous opportunities for our customers. And then finally, I'm going to talk about emerging markets. And when I talk about emerging markets, it's regulations that are driving opportunities and how we can participate in those opportunities in a disciplined and responsible way. So as I mentioned, the first area that I'm going to talk about is industrial development. So when you remember back to John's pie chart that you had up there, he had industrial development as one of the opportunities. So each one of these yellow circles that you see here on the map is a unique industrial development win that we already have in place in merchandise and energy, chemicals and plastics. Each one of these opportunities is announced, approved and in progress. Some of them are happening now and coming online now, and I'll walk through an example of that. And some of them are going to come in over the next 5 years. But they create an opportunity for growth for CPKC now and into the future. I'd like to draw your attention to 2 different aspects of this map. The first is if you look at the logos of the different companies and the commodities that they produce, we have a diversity. It's spread across our merchandise space. It's spread across our energy, chemicals and plastics space. We have investment coming on to our railroad in all kinds of different commodities. The other thing that I would point out is these yellow circles are spread all across our franchise, all across North America. So we have a diverse growth story from a commodity standpoint and from a locational standpoint. So the first opportunity that I want to talk to you about is a now opportunity. And that's with Exxon and their expansion at their refinery in Beaumont, Texas. This project was completed in Q2 of this year, and it's ramping up right now. It's a $2-plus billion investment. It's the largest refinery investment in North America in over a decade. It's going to generate 250,000 barrels a day of incremental production every single day. To put that into rail terms, 250,000 barrels is the equivalent of a unit train a day of incremental production coming out of this facility. As it's ramped up over the second quarter, we've already started to see benefits at CPKC. One of the biggest lines that we have with Beaumont and Exxon out of that facility is going out in Mexico. If you look at our historical business that we did with Exxon into Mexico, we did about 18 trains a month with about 90, 95 cars per train. In the month of May, we did those same 18 trains, but we did it with over 100 cars per train. So we're able to run the same number of crews, same number of locomotives and get more utility out of those people, assets and locomotive assets. In addition to fully utilized or better utilized 18 trains, we also picked up 2 additional unit trains of business that was moving between Beaumont and Mexico. So 25% growth just in that 1 lane associated with this expansion. But where the true value in this lies is us working with Exxon into the future and how we can grow and utilize our single line haul solutions to grow with them into other parts of North America as they continue to expand their supply chain and look for new markets to grow into. The second example within industrial development that I'm going to talk about is SDI or Steel Dynamics. Steel Dynamics announced a couple of years ago that they were going to get into the aluminum space, but they were not in the aluminum space in any way. So they had to build a brand-new end-to-end supply chain from the ground up. And when you think about this brand-new supply chain that they're building, I want you to think about the #3. And that's because CPKC has the opportunity to participate in touching the same piece of metal through this new supply chain 3 different times. So at a high level, their end-to-end supply chain, they're going to have inbound feedstock of scrap and aluminum ingots that's going to come into their facility at San Luis Potosi. They're then going to create slabs that are going to move from SLP to Columbus, Mississippi, and then they're going to have outbound roles that are going to go out to their customers in the marketplace. But what's truly unique about this opportunity is not that they're creating this brand-new supply chain and that CPKC exclusively services SLP in their facility in Columbus, Mississippi, what's truly powerful is how this integrates into our franchise. So when I talked about that first inbound feedstock move, they're going to bring in scrap and they're going to bring in aluminum ingots. 60% of the aluminum ingots that are produced in North America come out of Quebec. So we're going to work with SDI or Aluminum Dynamics to create a single line haul solution between Quebec and their facility in San Luis Potosi. So that's the first move. The second move is it's going to go into their smelter at San Luis Potosi, and they're going to produce 1,750 cars a year that's going to move out of SLP and go to their exclusively served CPKC facility in Columbus, Mississippi. A couple of facts about the facility that they're building in Columbus, Mississippi. First of all, it's the single largest industrial development investment in the history of the State of Mississippi. They're creating a world-class rolling facility in Columbus, Mississippi, and then they're going to co-locate key customers close to their facility. So that's going to create the opportunity after we move slabs in for us to work with customers that they co-locate to move their product out. But then also, it's going to allow us to work with SDI to move out to a couple of key markets that we believe they're going to need to take aluminum to. And those key markets, if I could actually pull back up Jonathan's slide, which I'm not going to do, it was one of his last slide, it's automotive space. As you think about emission standards in the automotive space, cars are getting lighter so that they can meet these new emission standards. David talked about it as part of the near-shoring presentation that he did earlier. Another key market is the beverage packaging industry. I laughed as I walked in here this morning because as we continue globally to phase out the use of single-use plastics, we've now moved to where we have aluminum bottles of water on our table. Right? So think about 2 years ago, you would have walked in and you would have seen plastic bottles everywhere. Now think about your companies. Think about when you go to industry events or hotels, how many companies have moved to aluminum packaging? And so as we think about our partnership with SDI and we think about their growth profile, we're excited about several different markets, but we're particularly excited about our opportunity to work with them on outbound product into the automotive kind of heartland or strength of our network in Canada and in Mexico as well as the beverage packaging industry. So to wrap up my comments on industrial development because I know you love to look at numbers. Our view of the market when we look at just merchandise and energy, chemicals and plastics and we look at the 19 opportunities that I talked about on the initial map, we see the size of the prize or our guidance would be $600 million in opportunity. John talked about constantly recharging our pipeline and the fact that we're constantly working to create more opportunities and grow our pipeline. A great example of that is I didn't even talk about it, but last week, Ternium announced a $3.5 billion investment at their facility in Pesqueria, which is basically Monterrey. And that's going to create a massive amount of incremental steel capacity where we're going to move the inbound product for them and in the outbound product for them. But we continue to have meetings with customers, where every meeting that I walk out of I hear more and more about opportunities. As a matter of fact, with Ternium, I met with them 1.5 months ago in Mexico, and they let me know, "Hey, we're going to make this announcement. It's not public yet, but it's coming, right? So you need to be prepared." I'm having lots of meetings like that with customers, and it's exciting to look at what our industrial development pipeline looks like now, but what it's going to look like as it continues to grow into the future. So the next area that I'm going to talk about is leveraging our franchise. John used the term getting down to ground level on what some of these opportunities look like. And given that I'm the merchandise and energy, chemicals and plastics guy, some of these examples are going to be very ground level. Because to really understand the power of this franchise and the value that it creates for customers and the value that it creates for CPKC, I think it's important to understand what it creates from an asset utilization perspective. So I think it's important to take a step back and understand how each of the franchise operated alone so that you can truly understand the value of bringing the 2 franchises together. So if you look back at the historical CPKC franchise, we were resource rich in natural resources, and we had a tremendous amount of construction and building products in our portfolio or in our franchise in Canada, but we didn't have the reach to get them down to key consumption markets in the Southern half of the U.S. On the other side, KCS had a tremendous destination footprint, but they didn't have the ability to reach all of these construction products so that they could bring them in. I think John talked about the fact that they were kind of leveraged out of the market or pushed out of the market by the UP and the BN because they weren't able to originate the lumber that needed to go in to feed the housing market. And the way that it plays out, I'll give you 1 specific example, is in the lumber space. So if you look at our legacy lumber franchise, we were collecting lumber all throughout Canada, as you can see by the yellow bubbles here at the top of the screen. And then we had a franchise that came down and ended in Chicago or Kansas City. And so if you take the example of a lumber car or a center beam that's loaded in Montreal, I would load that center beam of Montreal. It would move on my line, loaded with revenue days for about 4 or 5 days. I would hand it off as Chicago or Kansas City, and then it would be offline for 15 days before I got that piece of equipment back. Now at CPKC, I'm able to load that same center beam of lumber in Montreal, get 100% of the miles between Montreal and Dallas and go to my customers and say, "I can offer you the only single line haul solution with high-speed, high-efficiency service between Eastern Canada into the #1 housing market in North America, Dallas-Fort Worth." So it creates a great story for CPKC because now that asset that was underutilized and maybe getting 20%, 25% revenue days is getting fully loaded all the way down. But once I make that equipment empty in Dallas, I then have the ability to reload that equipment and find opportunities to sweat that asset by moving it back North loaded. The final piece to the overall puzzle for Dallas is to think about it this way. I gave you an example of how lumber comes down into Dallas and how creating a single line haul solution allows us to better utilize our assets in the lumber space and gives our customers an advantage into that market. That's 1 example of 1 commodity, but the same principles that hold true in lumber, hold true to all of our construction products that want to go down into the Dallas market. But the final piece of the puzzle that we need to put together is to build out a destination transload solution in the Dallas-Fort Worth market. And that's where Room to Grow 2.0 really comes back in. So if you look at our current Dallas land footprint that we have, we have 3 different sites in Dallas at Zacha Junction, at Wiley and at Greenville. Across those 3 sites, we have 500 acres of developable land. In 2018, when I got up at Investor Day, I talked about developable land that we had in Milton and I said, look for us to make an announcement soon on a new project that's going to come in Milton, and I kind of smiled and winked and moved on. I'm going to say the same thing relative to Dallas. Look for us to make an announcement on a project related to a new high-efficiency, multi-commodity indoor, outdoor transload in the Dallas-Fort Worth market. Once we have that transload in place, it's going to unlock the ability to move our customers more efficiently between their origin markets in Canada and bring those construction products down into key markets like Dallas and then look for us to replicate the same model across multiple markets that we see opportunity in. Another example, when we talk about optimizing our franchise as a power of the integrated franchise is in steel. If you look back at the legacy KCS franchise, they have tremendous steel production capabilities that come out of Mexico, but they had limited reach to get it to end markets. And so in many cases, they were short-hauled or held to only being able to take product to Laredo. And so one of the first things that we did when we came together is we looked at all of the business that they were moving that was going over multiple interchanges, where we could offer customers a single line haul solution where they didn't have it today. And one of the moves that jumped out to us immediately was a move from Veracruz up to Edmonton with Tamsa. And it was a move where KCS wasn't providing the equipment because it didn't make sense. And what they were doing is they were moving from Veracruz to Laredo, handing it off to another railroad, who then move it from Laredo to Canada to our competitor, who then delivered it into Edmonton. We went to Tamsa a month ago and said, we can offer you faster, more efficient, more consistent service. We can provide equipment because where this didn't make a sense for any of our equipment to move in before, now it's the highest and best use for our asset. And Tamsa started moving loads with us a month ago. After they move their first loads for a couple of weeks, they came back to us and we said, "What do you think of our service?" Their answer was you're 1 week faster than your competitor. I'm going to say that again, we're 1 week faster than their competitor. And it's because we're taking out multiple interchanges, back to John's comment earlier about airline layovers, right, and how we want to avoid those. So this is a win for Tamsa. It's a win for CPKC. It's a great use of asset. But the story doesn't end there. Now I have equipment that's made empty in Edmonton. And so we sent a team out and we said, "Hey, what are we moving in [ Miltons ] that are moving between Canada that we could move back down to Mexico. And we realized we were already moving a lane with Gerdau, where Gerdau was contributing some equipment and we were contributing some CPKC equipment. And we said, "Hey, Gerdau, instead of us contributing equipment and you using your equipment in that lane, why don't we take that and we will grow in some other lane. And let me take this equipment that I'm making empty in Edmonton. I'm going to move it over to Winnipeg, and you're going to run it back down to Mexico. I'm going to then run it back over to Veracruz and start that cycle all over again. So now we're in a situation where we go from KCS, KCSM standalone, participated in 1 leg from Veracruz to Laredo, to CPKC participating all the way to Edmonton, creating the opportunity to reload that same piece of equipment and run it all the way back down to Mexico and repeat that loop over and over again. When we talk about precision scheduled railroading and we talk about core principles, optimizing assets is 1 of the core principles of PSR. I think the easy thing to do when we look at the opportunities created by this new integrated franchises say, we're going to connect point A to point B, and we're going to have more business opportunities. And that's absolutely true. And as a salesperson, I love that. I personally love that story. But I also understand that as a commercial person operating in a PSR railroad, that optimizing assets is ultimately what's going to allow me to win in the marketplace and provide a better service for my customer and create more capacity. Keith talked earlier about the power -- a virtuous cycle was the term that he used when he talked about PSR, and the PSR creates a virtuous cycle. And I use the same example when I talk to customers or when I'm working with my team on strategy. And it's really this, is when you're able to connect markets directly and create single line haul solutions for customers, you're able to grow revenue. And then by growing revenue, you're able to optimize assets. So think about the lumber and steel examples that I walked you through and how we were able to optimize those assets. When you take out interchanges and you're able to offer single line haul service, you're able to move assets at higher speed, which creates more capacity and leads to more revenue growth. And it creates revenue growth in 2 different ways. One is it creates revenue growth by not having to reinvest in more assets because you're more efficiently utilizing the assets that you already have, but it's also allowing you to earn the right to grow and reinvest in growth capital in more of those assets. It's that continuous loop of sustainability that Keith talked about that's critical to PSR, is absolutely hypercritical within our carload and manifest business. Ian Gray is going to get up and he's going to talk later about our disciplined capital process. I would love for you to think back to this opportunity and this exact example when he's talking about the fact that disciplined capital processes and focusing on assets and focusing on returns is in the DNA in every single area of CPKC. Okay. So numbers time. So when we look at leveraging the franchise and all of the value associated with opportunities here, our view is our guidance would be $275 million in this space from a growth perspective. Okay. So last area that I'm going to cover. I'm watching everybody write notes feverishly. So last area that I'm going to cover is emerging markets. When we talk about emerging markets, a topic that comes up most frequently when I meet with customers and a topic that comes up most frequently when I talk to analysts, I even had a question about it last night, is around the Clean Fuels Act within Canada. I'm just going to call it the Clean Fuels Requirement or CFR, if that's okay just as we go through this presentation. So CFR means Clean Fuel Act in my mind. When we look at the Clean Fuel Act, it creates significant opportunity for CPKC and it creates significant opportunities in 2 different strategic areas. The first area that creates opportunity in is the ability to grow our renewable fuels base as it grows to meet the new requirements within Canada. The second area is the ability to put in infrastructure in destination markets that allow us to bring together all the different fuel types, blend them and get them to the final fueling stations for our customers. So when we talk about expanding our origin footprint, there are 3 pillars to the overall Clean Fuels growth strategy from a CPKC perspective. One is to grow our biodiesel or biodiesel production and crush capacity within Canada and across North America. So if you look at our current crush capacity, we have 7 different facilities that we service with the green dots that you see up here on the screen are existing crush facilities that have 10 million metric tonnes of crush capacity. Over the next 5 years, the stars that you see indicate new facilities or expansion of facilities that is going to increase it from 10 million metric tonnes a year to 17 million metric tonnes a year. In any other year outside of a year where we're bringing together 2 new railroads in transformational change, that would be a story unto itself, but we have growth across all of our different renewable fuels markets. The other area from a renewable fuel standpoint that we see significant growth in is ethanol. So each 1 of these yellow dots that you see up through the upper Midwest and into Canada represents an ethanol facility that CPKC serves. We have a powerful ethanol footprint. We service 2.1 billion gallons of ethanol production every single year. So when we look at our ethanol production footprint and we look at the regulations, we're excited about opportunities in the Eastern Canada, and we're excited because Ontario and Quebec have both moved their blend walls from 10% on ethanol and up to 15%. So we're going to see a 50% increase in the amount of ethanol that wants to go to Eastern Canada. So we're excited about flows out of the upper Midwest, going into Eastern Canada. And then the third pillar within our renewable fuel strategy, is renewable diesel. And what I can say about that is we're working on multiple opportunities in the Gulf to create a train a day of additional capacity to go between the U.S. Gulf Coast up into Canadian markets to meet the requirements of this clean fuel initiative. The reason it's important that we're going after fuel to move from the Gulf up into Canada is there's not enough production of renewable diesel in Canada to get anywhere near fulfilling the requirement associated with the CFR. The other area that I talked about related to our strategies with the CFR is around investment in infrastructure. And really, it's bringing together all the pieces of destination with liquids transloads so that we can bring in renewable fuels, and we can bring in conventional fuels, blend them for our customers and get them to their fueling station. If you talk to customers about what the biggest obstacle is to pulling together these clean fuel requirements, it's the ability to get from the farm all the way to the fueling stations with the right blend for whatever market they're operating in. So from a CPKC perspective, once again, Room to Grow 2.0, utilizing land assets comes in as a big part of our strategy. We're excited to announce that we're going to expand an existing facility that we have in the Greater Toronto area, and we're going to open a brand-new facility. So if you look at our current liquid transload capabilities in the GTA today, we have 1 facility on the West side of the GTA at Milton where we have a partnership with Candu, where we do about 3,000 cars a year through that facility, and that's the max capacity of that facility. We have an agreement with Candu for an expansion of up to 10,000 cars a day through that facility over the next 3 to 5 years as it ramps up with the new CFR requirements and as those get higher into the future. In addition to expanding our facility on the West side of the GTA, we're going to open a second facility in partnership with Candu again on the East side of the GTA at Agent Corp. This is an underutilized asset that we have the ability to put in a highly efficient, world-class liquids transload solution that's going to allow us to bring in ethanol, biodiesel, renewable diesel, conventional fuels, blend it to specification and send it to our customers. The obvious question that gets asked when I talk about our strategy related to the GTA is why are you doing 2 facilities? Could you do 26,000 cars through either 1 of the facilities? And the short answer is yes. We could do 26,000 cars at Milton or we could do 26,000 cars at Agent Corp, but we're not doing it by design and by strategy. And the reason we're not doing it is for 2 reasons. The first reason is if you -- a lot of you here are from Toronto, and so you know what I'm about to say. Traffic in Toronto is very difficult. Getting from 1 side of Toronto to the other side of Toronto and the 401 traffic is a monster. And there's limited truck capacity. So what our goal was when we set up our strategy for our infrastructure in the GTA was to create 2 solutions, 1 on either side of the metro area so that we could get our customers closer to their fueling stations from our liquid terminals, reduce the amount of truck capacity that they would need, reduce the amount of truck miles that they would have to use and reduce their overall final mile expense to get from our liquids terminal to their fueling stations. The second reason that we're splitting it and doing 2 facilities is it's the right thing to do. When you think about the overall principle behind the CFR, the entire goal behind this is to reduce emissions. And if we're able to put together a solution that makes more economic sense for our customers and requires less truck miles, it's going to produce less greenhouse gases to get those fuels to the fueling stations. So we're able to put together a win-win situation where we're able to put together a better economic model for our customers and we're able to put together a better solution for the environment. And so as we think about it, it's the right thing to do and it's the right way to go about putting together this strategy. So with that, I'll wrap up my comments here. So the emerging markets, when we look at our guidance on the size of the price from a, I guess, volume and revenue perspective or revenue perspective, is $250 million. So as I wrap up my comments, I want to say this. When we look at the volume and revenue growth available on the new CPKC from a merchandise and energy, chemicals and plastics perspective, we have significant industrial development initiatives that are announced wins that are in play that are coming. They're going to generate the revenue growth that we have here on the screen. We have the ability to leverage our franchise to connect customers and markets on a single line haul basis that we haven't been able to do in the past, and we're able to better utilize our equipment to create more capacity. And finally, we're going to be able to capitalize on these emerging market growth opportunities that are created through regulation and driven by strong strategy at CPKC. So with that, I'd like to thank you very much for your time and the opportunity to speak today. I'm going to hand it back over to John to talk about bulk and wrap us up from a numbers perspective. Thank you.

Okay. Thank you, Coby. And look, I hope you came away a little supercharged there. We haven't been just all completely focused on other areas and doing things in the last couple of years. Team has been, as I said, actively out in the marketplace uncovering these opportunities, developing solutions, teeing them up to get really to this point. We wanted to hit the ground running. I'm confident that hopefully, you were able to see today, we hit the ground running. Okay. So I'm going to take you through our fertilizer and grain strategy as you think about it. Ultimately, this is a portfolio that will report up into Jonathan with Jone's recent retirement. But I think as you saw, he's been quite busy in a number of other areas. And as many of you know, I love this grain and fertilizer area anyway, so I'm happy to talk about it. But I'm also -- what I'm going to do is I'm going to zero in on last couple of slides. I know you all peaked ahead in there because you all are already asking 1 million questions already during the break. But I'll try to summarize just clearly a line of sight in terms of where we sit 75 days in as you think about our synergies, but then also sort of how they layer into our multiyear guidance as high single digits. All right. So I'm going to focus on 3 areas if you think about our grain and fertilizer franchise. Number one, let's look at the network, and I'll try to help articulate why we get excited about the combination of CP and KCS and what it does for the agricultural industry across North America. Number two, we're going to have a little gut check on did we do what we said we were going to do as we reflect back to the story that actually Joan told you back in 2018, or maybe even I told you or previewed you back in 2015 when we did an Investor Day, but where we sit today in terms of our 8,500-foot journey and what's next. And then third, we'll dive into a very similar story, as Jonathan described, where customers are looking to actively find new outlets maybe diversifying away from an L.A., Long Beach into Lazaro, but I'm going to apply it to a different supply chain, and that's our potash supply chain and thinking about movements out through Western Canada versus down in the Gulf. All right. So let's keep going here. All right. So let's talk about this ag franchise. As you know, the grain business is near and dear to my heart. It's huge for our Canadian Pacific network. It's an area we take a ton of pride in, in terms of our operating model and delivering for the ag industry across Canada. I can tell you, it's equally a huge part of the CPKC book. It's going to be 30% of our revenues going forward. It's an area I talked about last night. In some areas, we might have to go a little backwards to go forward. But rest assured, we're going to take this franchise, use the power of it and created our 8,500-foot operating model down into the U.S. and ultimately down into Mexico. In the IR Day, I participated in back in 2015, and probably some of you were there, I said we're going to try to bring sexy back to grain. I know it's pathetic. And it's taken a long time to get anywhere near remote to that. But if you now picture this. Putting together these 2 franchises, there's no way independently we could do in grain what bringing these 2 together will be able to create. That's as good as I can get for sexy. So let's talk a little bit about that. The CP franchise, as you think about it, has 135 existing elevators across the prairies of Canada in the Upper Midwest. By comparison, and count on one hand the number of elevators KCS had on their network. So think about the connectivity of 135 producers producing different crops across the best growing region of North America. Our growing region outpaces the industry average in terms of production growth. We're seeing about a 3% production growth across our growing territory. But the power of those 135 additional origins to now be able to link to a destination network that goes beyond Kansas City is a powerful thing. It's the ability for grain marketers to now be able to send products directly down to the poultry feeders or the cattle feeders across Mississippi, Louisiana, Alabama. It's the ability for exporters to now pull grain out of North Dakota or Southern Saskatchewan down to Houston or the Galveston area to export grain, or it's the ability to go down into Mexico. Mexico imports 30 million metric tonnes of grain annually. It's the biggest trade grain partner with the U.S. just -- actually just moved in front, slightly in front of China. Corn in itself, in terms of those imports into Mexico, make up about 50% of the crop that goes into Mexico, and that's grown at about a 5% CAGR over the recent years. In our first 75 days as CPKC, what we begin to see develop is the trade -- the grain industry is beginning to trade and really display matchmaker. There, it's sort of like this game where they've now got all these different clinko pieces and how do you put together and make these grain flows happen. So we've seen -- as of a couple of weeks ago, we've seen 12 new origin and destination pairs just begin to merge with grain flows. I'll give you an example. Like I just saw yesterday, train of corn going from Elbow Lake, Minnesota down to Mexico City. I saw Weyburn, Saskatchewan train of wheat going down to St. Louis. And in this case, this is nothing my sales team is doing. Look, not that we're out not selling what the power of this franchise could be and planning these seeds across it. This is truly the thousands of other grain trader salespeople out there that are now taking this network and trying to put these puzzle pieces together to create more value in this ag supply chain. And as you think about this network, it's more than what I described in terms of whole grains. You got to think about also the grain products part of the business, exactly what Coby just spoke to supporting the renewable fuels initiatives across Canada. There's going to be 5 million to 7 million metric tonnes of new crush capacity built that's well underway across Canada, all of it in CP's backyard. And the power just thinking about grain, the power to be able to pull canola out of our competitors' territory into those crush facilities. And then the power to be able to take that oil out of those plants and ship it to the destination terminal that Coby talked about out are in the Toronto area. But also the meals that are produced out of that to feed the cattle feeding and markets down in the southern U.S., but also down into Mexico is a powerful opportunity. So when you combine the network with our 8,500-foot model, that's really the impetus to what's driving and wants to drive further investment in our ag and grain space. Let's talk about some of that investment. So in 2018, Joan really introduced our push to develop the 8,500-foot model. And as you think about back at that time we described it, and I continue to describe it to our customers of wanting to create this perfect conveyor belt where those -- the hopper car investment that we made, the 8,500-foot train, which can be as long as 147 cars, how do we create a system where that train lands in the country, it's loaded as fast as possible, has power on, departs that terminal, lands at a destination terminal, clears the main line, gets unloaded and shipped back. Part of that equation is we've had to create a lot of constructive tension with our customers to ensure that the discipline there, not only at the origin, but also the destination to make that sort of supply chain that pure conveyor belt between origin and destination. When you put it together, what we're seeing is these trains, these 8,500-foot trains are creating and carrying about 44% more capacity, more grain per train from origin to destination. But on top of that, if you begin to look at the cycle times of those trains versus our legacy trains that we use to haul, they're running at about a 30% faster cycle time. This model is unlocking resiliency for the grain industry, it's unlocking capacity, and it's unlocking more investments. We had 6 8,500-foot facilities when we introduced this model back in 2018. By this time next year, we're going to have 66 of those facilities across our network. And not only Canada, we'll have them across Canada, we'll have them across the United States, and we'll have them down into Mexico. That's the power of the model we created, but the industry recognized if now have spent roughly about $600 million building out to match our model, that's powerful. And think about it this way, too, as you think about those 66 elevators. If we had those elevators back in 2018 and moved the same amount of grain we moved in 2018 with those 66 elevators, we could have done it about 300 less train starts. Okay. Well, that's operating leverage. That's the ability to use that capacity that you free up to haul more grain, or maybe it's intermodal or maybe it's automotive. Coby and Jonathan are constantly fighting for that capacity. But it also frees up how we use our people. It frees up locomotives for other pieces of business. It's made a marked change in how we operate our grain business. But it's also what excites me as you think about what the future of the grain business is going to look like as part of CPKC. So with that excitement, we're pleased to be working on a number of these investment opportunities across this new franchise. I'm going to start. I know you saw the press release that we put out on Monday with Richardson International. So Richardson is one of our largest Canadian grain customers. And they just announced that they're going to be expanding 8 of their existing facilities up to our 8,500-foot model. This is on top of last year. They just built a new greenfield elevator in Canada on CPKC that also is 8,500. It's just the tip of the iceberg for Richardson, but it's a $70 million investment in their franchise again to leverage the power of the franchise. And you might be sitting there thinking, well, they're all up in Canada. Like what does that really have to do with the new network? Let me tell you. It's really Richardson's motivation to be able to take those products of Canada and expand their domestic footprint to service the Southern U.S. and also Mexico. And I'll also remind you that Richardson currently owns the largest Durham mill in North America, and it's located in St. Louis. And we can create a single line haul from these Richardson terminals with 8,500-foot trains out of Canada directly into St. Louis to service that opportunity. The second one I want you to think about is the partnership in an immediate link that we are creating with ADM. ADM currently has a crush facility where they crush soybeans in Deerfield, Missouri. And this facility has been there a number of years. It's right off the KCS mainline. KCS has never built into the facility. You say, well, why? Why does it work now? And why didn't it work previously? But again, it's simply the power of the franchise. It's what we've been talking about for the last hour. Now this creates the ability for ADM's buyers to buy soybeans out of Minnesota, North Dakota, Iowa, Wisconsin, Southern Manitoba, you name it, and bring those soybeans down into their facility to crush at that facility. It then allows them and do it in an 8,500-foot train. It then allows ADM to take that product and mill and ship it with us down to the feeders down in Mexico. It creates this complete ecosystem for that crush plant at Deerfield. And finally, there's been a lot of news out there recently with Viterra. I'm excited to tell you that the Viterra is our single largest 8,500-foot shipper across our network. They have 21 existing facilities. I think 4 more in the pipeline this year. They are experienced and actually completely have been the fastest to leverage our 8,500-foot train. It then allows ADM to take that product and meal and ship it with us down to the feeders down in Mexico. It creates a complete ecosystem for that crush plant at Deerfield. And finally, there's been a lot of news out there recently with Viterra. I'm excited to tell you that the Viterra is our single largest 8,500-foot shipper across our network. They have 21 existing facilities. I think 4 more in the pipeline this year. They are experienced and actually completely have been the fastest to leverage our 8,500-foot network across our grain companies. So we're working currently with Viterra to bring that model given their combination most recently with Gavilon, and now most recently, their announcement to merge with Bunge to take that model that they've created up in Canada and redeploy it and develop it across the Midwest and then also down into Mexico. So these are just 3 examples. Certainly, these are major ABCs of the grain companies, Viterra, Richardson, ADM that have recognized the power of this and want to now apply it to our CPKC network. Now let's shift off grain and talk a little bit about fertilizer. And again, this is almost the exact same story as Jonathan described. This is the recognition of supply chain challenges and bottlenecks in 1 area and wanting to create a new outlet solution in another area. So I'm pleased to say we're working closely with U.S. Development Corp. on the development of a new export terminal down in Port Arthur, Texas. Again, the premise of this is we move a lot of products across Western Canada through the mountains in the winter, through fires, you name it, the disruption that we've seen over the last few years. to get to Tidewater, whether it be in Vancouver and Portland to move these products to final end users. Again, it's not an area where we would ever displace the movement that goes west out of those locations, this is about building resiliency. This is about building a hardening of supply chain to create another option. And if you look at Campo Texas in particular, growth over the last few years. They've really begun to fill the void to maybe de-market themselves a little bit from a dependency in China in terms of taking their potash to growing their destination marketplace in Brazil. And this Port Arthur terminal provides a direct shot from out of Northern Saskatchewan down to the terminal and ultimately down to Brazil. Our expectation is to have this terminal up and running in 2025 with the capability of throughput to move about 2 million metric tons. But I think the opportunity extends for decades in terms of the growth opportunity. And the good news is, as we showed you, I showed you, Coby, showed you, Jonathan showed you, the land footprint we have at Port Arthur will allow us to scale this opportunity as that demand materializes. Okay. So let's just pause for a minute here and try to bring this all together. So look, you sat through probably 2-plus hours of this commercial discussion. And it really was a culmination of a whole lot of work that's gone in this last couple of years to get us to where we sit today, 75 days in. 75 days in, I see a line of sight to $1 billion in synergies right now. All the things that we've talked about, we've announced the press releases, when I add them up, the capabilities of those are right about $1 billion of new revenue for this franchise. Now look, the starting point of some of that stuff will vary. As Jonathan said, we're often running 180, 181 we're going to work our tails off to fill that train as fast as possible and move on to the next one. If you think about Lazaro, Hapag-Lloyds come into town, you think about the temp controlled solutions. You think about Coby and the industrial development opportunities with SDI. It gives me a comfort and really actually a lot of pride to stand up here today to sort of unveil to you where we are at in the synergy journey. But most importantly, how does that journey sort of fit into the multiyear guidance that we put out today in terms of high single-digit revenue growth. I'm not the finance guy, Nadeem will get into all the details there, but I think of this in a real simple way. Those first 2 areas are table stakes, the base growth, inflation plus pricing. You know what we've demonstrated at CP that we can lead the industry in growth, and that historically base growth at 3% to 4% to be right in our wheelhouse. And KCS has demonstrated the same. It's well in line with past performance. And I promise you and our CEO would promise you that we will continue that discipline in terms of our pricing at inflation plus. You guys can peg that where you want we've pegged that traditionally in the 3% to 4% range. And then that's the cherry on top. It's the synergies. It's how big we can take this. We've outlined it at 2% -- 3%. We're off to a really fast start. The pipeline is $5 billion and recharging. I think the sky is the limit in terms of what that opportunity is on that 2% to 3%. And honestly, the opportunity is more about how I work and the team works with Keith and Mark Redd and the operating team and Nadeem and the finance team to ensure we've got the network to bring on any upside in those synergies in a disciplined, responsible way as we look to the future. So you put together the 2 fastest-growing railroad stand-alone. You layer on synergies now we're together, and that gives me the confidence that high single digits growth well in our line of sight as our multiyear guidance. So with that, look, I'm going to -- I'll thank you for your attention. I hope you enjoyed the presentations from my team. There's been a ton of work that have gone into that. We'll be happy to take questions at the end. At this point, I'm going to turn it over to Ashley who's going to do a panel for integration in IT. Thank you.

All right. I'd like to welcome to the stage, James Clements and Pam Arpin for a fireside chat. All right, try this again. James is CPKC's Executive Vice President, Strategic Planning and Technology. He has over 20 years of experience with the company. He's responsible for strategy and improving data integration and continuous process improvement. He's had a number of leadership roles at the company, including car management, logistics, finance, sales and marketing in both the U.S. and Canada and M&A. At CPKC, James is known as the company's Swiss Army Knife because of his broad set of experience and deep understanding of the company and industry. I'm also happy to welcome Pam Arpin. She is CPKC's Vice President and Chief Information Officer. Pam has over 25 years of experience in a number of areas, including operations, finance, commercial customer service and, of course, technology. Pam is in charge of Information Systems and throughout her career, she received a number of recognitions for her industry leadership and expertise. She was named railway Women of the Year by League of Railway Women. She was also named one of Canada's top 100 most influential women by the women's executive network. And most recently, in 2023, she was an honoree for top 10 most influential people and North American railroads.

So with that, let's get started. James, on the first quarter earnings call, we heard you talk about the integration management office. Can you tell us more about what your team did to prepare for integration?

Yes. Thank you, Ashley. As we looked at the possibility of putting CP and KCS together a couple of years ago, we certainly realized it wasn't the CMQ acquisition and we had to be really thoughtful about how we went about putting the 2 companies together. So very early on, we decided we needed to engage some experts. We consulted with David Fubini, who I'd say writes the book on mergers and acquisitions. He teaches mergers and acquisitions at Harvard. And as an executive team, we met with him and a woman named [indiscernible] who we brought on board. She was fundamental in the integration of U.S. Air and American Airlines to create the largest airline in the world at the time. And she consulted with us, and we created what we call the integration management office. Keith Creel was the leader of that office, and we had a regular cadence of meetings and we really built a strong plan. We also had the principle, don't make day 1 bigger than it needs to be. So with that planning activity that everybody has done across the company, we launched day 1, and then we're into the plan to get everything else put together after that first step. And when we look at it, it's about another 2 years we see in a lot of the technology plan to put it together.

What has been the most challenging thing about the first 75 days?

I wouldn't say the most challenging first 75 days, I've been surprised as to how well it went. It was really thought out and successful and as I look at how it's -- the people have engaged, how the systems have rolled out, we're on a good track, and we're really moving forward.

Great to hear.

I'm going to say it maybe hasn't been without a little bit of turbulence if we stick with airline terminology. If we think about day 1 in terms of IT, we've had 600 changes that went through 27 cutovers and 6,000 cut over steps to manage all of the change for day 1. And we consumed probably about 1,800 cups of coffee as well. But with all of that great effort and work, we were able to deliver to Mr. Mark Redd, an integrated operating plan within hours of day 1. We're able to consolidate our financials and close our books in May, from a cross-organizational HR perspective, we are able to ensure expenses are getting approved and all of our purchase orders are flowing through to our vendors to name a few. And from a customer perspective, we have set up a hotline, and we have a customer service promise that was talked to earlier today. And we have had no customer calls into that line except for a call to compliment us from someone from Chicago to talk about what it meant for this merger to happen. So very happy about that.

That's excellent. So speaking of the merger, James, I'm interested in hearing more about the requirements that were placed on CPKC as part of the STB's merger approval. Can you tell us what you and your team are doing to ensure that the company meets those requirements?

Yes. So first thing I'd say, when you look at what the STB did, they saw thousands of pages of evidence. They had many witnesses come forward. And I think they put forward a very thoughtful merger with some conditions on it. I would describe those as not onerous. If we do what we said we're going to do. If we run the railway the way we need to, if we look after the communities the way we said and if we treat our customers properly and provide service, then the overall ability to comply with those conditions won't cause any negative impacts to our ability to achieve all the great growth that John and the team have talked about today. The other thing is with all the learning we've had around the planning for the integration, we're applying a lot of those same principles to the approach to compliance, whether it's the metrics production, environmental conditions that were imposed or going to market in the way that we're required to. So again, I'd just reiterate, we -- in the first 75 days, we've done everything we needed to do to be in compliance. We're building out the sidings and everything else. And as we go forward, I'm highly confident that we'll continue to be in compliance with all those conditions through the oversight period.

Thanks, James. So Pam, after lunch, we're going to hear Justin talk about some really exciting operational technologies that he and his team are working on. What does that mean to you as Chief Information Officer and how are you supporting that work?

So very excited, very proud, our combination of our business and IT group couldn't be stronger, particularly going through integration. And I think I want you just to imagine an iceberg. And so when you see some of what you're going to see this afternoon from Justin, that's the tip of the iceberg, but there's all of this work that happens underneath that to make it happen. And so some -- for example, all of the work we're doing with multi-cloud in our strategy there, GIS, how we think about IoT and our readers and pulling that data forward, all of that kind of culminates in being able to create the framework for these opportunities to happen. I'll give you maybe 1 example because I know Justin is not talking to it this afternoon. I looked ahead. So rail wear. So as an example, some of what we've done in the technology perspective around rail wear. So you take all of this disparate information, whether it be what's happening with the track evaluation cars, how we think about tonnage and change in tonnage and how that's impacting rail war, lubricators. So John talked about lube oil this morning, I'll talk about lubricators, so the application of lubricators. All of the data and information is available to us. And now we're surfacing that information and taking that disparate information pulling it together to create predictive models to better help our operating team with safety and how to think about what goes into replacing some of our fixed and movable assets at right times.

So can you tell me about other technologies that you're working on?

Absolutely. So maybe to build on that. So we've created this framework around data. So how do we get that into the right people can at the right time. So we have a mobility strategy. And with that mobility strategy, everything from our auto compounds to our shops to our car repair people that are out in the field and our conductors all have mobile tools in their hands, not only to see data real time to be able to work real time as well. And I'll kind of go back to our conductors as an example of that. the tools that they have, they have iPads in their hands. They can report inventory. Historically, they would have had a paper, F125. They would have been tying up going back into the office and putting their inventory into our systems. Now today, they could do that real-time. And what does that mean for our customers? That means our customers get that information timely as well and can make decisions about what they're doing at their facilities quickly as well. And so if we tie that to customer experience, we're really trying to create that Uber-like experience where we have conductors that they're going into a facility. While they're going into that facility, we're letting the next customer know that we're going to be coming to them next. And as they're leaving that current facility, they're telling that current customer what work we performed at their siding. So tying that all together, if you think about safety, fluidity and customer experience, it's really creating that opportunity to enable our business strategy with the right investments in technology and to think about both our bottom line efficiencies and our top line growth.

So Pam, tell me a little bit more about your just general IT philosophy.

Yes. And I think maybe to get into that, people need to know a little bit more about me. So again, as you said, I've been pretty much everywhere in CP. I've been with CP, I like to say, for 26 years and with CPKC for 2 months. But predominantly, the last half of my career has been focused on continuous improvement. So Keith talked today about people process and technology that something that I feel very, very passionately about. And as you think about our philosophy for IT, it's tying those things together. So how do we think about our processes and value streams and how do we think about that overall strategy. So one, we're an enabler. So how do we, through business-led strategy focus and invest in the right technology, and then what I'm going to say, though, is we're also a gatekeeper. So there's a lot of cyber activity that's underway. Our job is to ensure the security of our technical assets. And also our job is to ensure that as we're thinking about the technology that we're putting in for our business that we're thinking about total cost of ownership and how we're sweating those assets as well and doing the most that we can with them. So really for me, our philosophy is very, very simple. We're an enabler, and we're a gatekeeper for the business.

Yes. And I just want to jump in maybe at another level, we think about it is we don't want to be on the bleeding edge of technology but we certainly want to be on the leading edge. And when you bring it towards integration, what we -- the way we're approaching that is we have, I call it, the North Star. We know where we want to go in the longer term with technology and as we're making integration decisions, we're working towards that North Star at the same time as we're putting the systems together. So that's the other philosophy around technology.

Great. So speaking of leading-edge technology, can you tell us about what we're doing in the artificial intelligence space?

Yes, everybody wants to know about artificial intelligence over the last 3 months. So -- what I will say is we've been involved in artificial intelligence for quite some time, machine learning, artificial intelligence and generative AI, they're all artificial intelligence and they're just growing in terms of development. And so we've done everything, and you'll hear a bit this afternoon from Justin again on that, but in our inspection portals, through to broken rail, cyber security. We have AI involved in how we think about our cyber security and what we do in that domain as well as even in our financial area or expense management, we use artificial intelligence to really look at broad and opportunities for fraud in that space. So we are using it quite extensively already. What I'm excited about with our next steps. And as you think about the discussion today, Jonathan touched on Lazaro, and he touched on the Port of St. John, as we think about moving product to those corridors, we have regulation and customs as we move through the various countries. And so 1 of the things we're very focused on right now, and I'm going to say we're co-innovating with 1 of our bigger customers is what we're doing in that custom space. So very quick example of that is with our shipping lines, they ultimately have shippers that are moving goods with them. And so we're working with those shipping lines to reach back to those originating shippers and looking at packing slips, anything to do with invoicing, way billing and pulling all of that data that we get, EDI, all of that information so that we can help part of the solution to dealing with any regulatory or customer documentation that's required for customs and fluidity. So in this case, we're going to be using AI, not only to pull the information together but also to help us where there may be gaps in that information to look at historically what was shipped by who and how we can help fill in some of those gaps. And so the intent with that is to create the most fluid network for any of our ports of entry and as it moves through our different countries that we now operate through.

Thanks, Pam. So to wrap up, as we look to the future, James, just given your background and strategy and M&A and your deep understanding of CPKC's network in the industry, can you just give us your perspective of the announcement that we made this morning and our new connection into the southeastern part of the United States with CSX?

Yes, absolutely. And Keith described it a little bit, but I see it as really opening up another gateway, and we've seen a lot of exciting opportunities that Jonathan has described, Coby's described, and that southern connection to the U.S., which really I would have said was lacking or not in the U.S., the southern connection at CSX to get to the Southeast U.S. was lacking. And so that 52 miles is really, I'd call it a missing link in the network and gets us that ability to diversify even more, access more markets because today, we either had to go through a short line in New Orleans. We had to go through a short line in Northern Alabama or have a direct connection all the way up in St. Louis, which really with the CSX didn't allow us to offer a solution to shippers that want to go Mexico to the southeast using the CSX network. So I see it as unlocking just 1 more piece of the puzzle and allowing us to continue to convert growth opportunities. So I'm really excited about it.

So thank you, James. Thank you, Pam. It was great to hear about all of the exciting work that you're doing in the areas of strategy and integration and technology. For those of you here in Kansas City, we'll have lunch. For those of you joining by webcast, we will return at 12:20 p.m. Central. Thank you.

Hello. Hello. Sorry, well, that's loud. If I could -- given that we're in Kansas City, I was thinking it is not only not proper manners, but would be a missed opportunity given the gravity of this in Kansas City, the importance of Kansas City to not have invited our Mayor to come by. And as the Mayor of the city as the steward of this wonderful town, the center of our U.S. network and a wonderful host and leader in Kansas City. I wanted to give him an opportunity to welcome you to his city.

Thank you. Thank you so much for the opportunity to visit with you. It is exciting to spend time with CPKC. Its predecessor firm had been a part of Kansas City, almost since our city is founded. And we look for more great history from all of you. A few recommendations, while you're in Kansas City, of course, step 1 please spend as much money as possible. We always appreciate the tax revenue. But more than anything, you will get to learn not just about the great story of Canadian Pacific, Kansas City, which I'm sure you already know, but of course, this outstanding community. I have been Mayor now for 4 years. I have not accomplished much, but I take credit for every Chief's Super Bowl victory. And so that at least is something positive for me. For those who aren't American football fans, just know you should root for Kansas City's team. But more than that, we've had the good fortune of celebrating outstanding business success from CPKC and from being a community that is truly growing. The leadership team at CPKC has is not just a group that I call, we were looking for new economic development opportunities, but it's also a group that I worked with during the 2020 pandemic and protests any number of things. They have stepped up a lot to make sure that they have a strong and vital and diverse cultural and corporate impact in Kansas City and throughout North America. I thank them for their friendship and partnership in Kansas City, and I thank all of you for spending time with us. So I hope we have the chance over the years ahead to get to know each other even better. I thank you for spending time in Kansas City. If you didn't catch my name, I'm Quinton Lucas, the mayor of Kansas City. There are some other bald mayors that look like me around the country, but I always like to say that I'm the coolest one them all. So I thank you all so much for spending time with us. Thank you, and you all continue to have a wonderful lunch. [Break]

Okay. Good afternoon, everyone. Hopefully, everyone had a nice lunch. And for those of you joining us in Kansas City, you got a taste and sample a little bit of Kansas City's World Famous Barbecue. We're going to start the afternoon session now. It's my pleasure to introduce to the stage, CPKC's Executive Vice President and Chief Operating Officer, Mr. Mark Redd.

Thanks for the introduction, Chris. So I got to breathe deep because I tell you, I just -- I'm in an atmosphere where I've been in the past. Spent a lot of time in this building in the past with my good former boss, Mr. Harvey, he's on the front seat. And thank you for joining today. What I thought I would do today is talk a little bit about safety. I want to talk a little bit about culture. Give you just some facts of what we've been doing for the first 75 days. I think it's important that you hear that and kind of what we're going to do going forward. But for me, I wanted to take a step back and just give you a background of who I am. Why am I here today. And almost to the point where -- I've almost been interviewing for this job 32 years. So if I think about that, I'll let you know why. So if I think about some personal information about me, I've been married for 31 years. I've been in this industry for 32 years. I've got 2 kids, one's Ryan, that's my oldest son, I've got a daughter named Caitlin, going to -- she's going to college to be a nurse. She will hopefully finish next year, so which she can move up here and be with me and my wife. But I've put these pictures up here just so you understand, I am my lifelong railroader. That's what I've done my entire career. I've spent my time in the operating department. I've done a lot of things within the operating department that I'll go through. The important piece is to understand from the right side, that's me with the Train Master named Chuck Barne, that was instrumental in my life, whenever I started. I'll talk a little bit about the fellow on the left Andy Martin, and I'll talk about him just a bit as well. But first, I really wanted to say that I'm blessed to have a father-in-law that put me in this industry back in 1991. I started with a company called MidSouth Corporation. He introduced me to the business. We spent a lot of time together. And before I got married, I spent time with this fella, and I've lived with me for about 1.5 years before I got married. And what's important about him to tell you is, as I started day 1 in the business and don't laugh when I tell you this, it's really kind of the DNA of me even today, we would literally -- I was hired out as a brakeman. I worked in his yard. He was a train master. But at the end of the day, when I would go home, we would literally sit at the kitchen table, and we would go over every switch list I had for probably over a year. And we would talk about different moves that went on. We would talk about things that he saw that I should have done, some operating rules, some planning stuff into a terminal to understand what's next, what I should be figuring on and just teaching me about railroading from just technical skill sets. And that's what was important to me is to learn the business from a ground level. From 2 years of being a brakeman, when I quickly got into a conductor at 2 years. And if you think about being a brakeman, it seems odd to hire out, that was before crew change. That was before the elimination of brakeman the early '90s. So when I stepped in that role, I was conductor engineer. I qualified as an engineer. About that time, Mr. Harvey come on board. And we were purchased by Kansas City Southern in and around about the sixth year that I started -- 5.5 years. What was instrumental to me at that time, there was a VP of Operations, CEO, [indiscernible], that worked for Kansas City Southern at that time. And Andy brought me on board as my first train master position. And the reason it's important to mention Andy is the fact that he started teaching me about leadership. He started teaching me about being a manager, and that's about the time I met Keith Creel. He used the conduit between me and Keith. I've known Keith since about 1999, '98. He was assistant superintendent. I was a train master, Jackson, Mississippi. One of the biggest interchanges KCS had with Central at the time. I'm telling you we were -- we skated hard, and we wanted to look out for each other's railroad, and we make sure that we have plenty of constructed tension between us even in those days. And I think even for that, that taught me how to be a railroader and tell me how to lead in that space. and much appreciated with the development ahead with Andy. But after Andy left, I've become a superintendent. I've been a general superintendent, I worked in a dispatch center. Well at the dispatch center become a general manager of 2 different districts. And during those districts, I'm actually the General Manager that helped facilitate the capacity on MSLLC with Norford Southern. I'm also the General Manager that helped facilitate the sidings, the crew changes that we had for the Rosenberg line with Kansas City Southern. I worked for Kansas City Southern for about 22 years, migrated and left Kansas City Southern as a VP of Transportation, and I joined Keith's team. And I promise you, when I joined Keith's team, I actually thought I knew how to railroad, but when I was introduced to PSR, and I was introduced to Keith's team and Mr. Harrison, I knew then, there was a lot for me to learn from that standpoint. And our role must lease up and I got busy and I wanted to learn the business, and that's what I did. During that transition, General Manager, a couple of locations, VP of Operations. Now I serve as his Chief Operating Officer even today. So with that, I said a little bit about me. I just wanted to share that. So you understand my background, and I'm kind of back home, if you want to say that I lived in this place 3 years, 10 years ago. So what I thought I would do as an operating officer is to think about safety. Think about safety is foundational to me, safety is what safety is where you have to spend time to keep people from getting hurt to have less derailments. And if you think about where we compare based upon lowest train frequency, we're the leader for 17 years. We've done a very good job in the FRA space with personal injuries. 4% better than we were back in 2016 compared to where we are today. And how do you do that? So the question is, how do you get in front of people and have investment in people? Because that's what it's all about, except about the people. You look at those metrics, those metrics don't mean anything if you don't bring people home safe. That's what matters to me, that's what matters to the organization. And that's what matters to the towns and communities that we run in around engage with. We want to make sure we have a safe product through these terminals or these cities. The other piece is process. How can I set up processes to be successful and how can I have a Homesafe moment, which last night, we talked at the table, a Homesafe moment is really about engaging my partner when I see something they're doing wrong, I can engage that person and stop them to keep themselves from getting hurt or vice versa, they may interrupt me to say, "Hey, look out for this scenario, you may get hurt doing this." But that's part of the process that we do to help each other. Last piece, I won't touch on technologies. I know Jess is going to talk a little more about that, but the technology piece is very important to us. So if we think about safety, we think about culture. What makes us different than any other railroad to me is this is where the space of culture is different. We are a railroad of accountability. We -- people ask me, why do you like working for CP? To me, it's a railroader's railroad. And what I mean by that is the fact that we don't have handcuffs, the operating department leads to group, leads facilitates the execution and the growth within this organization. John talked about a lot of stuff on this stage this morning amongst his senior VPs. The key to remember is we need to execute that. We need to work with them to make sure that we can get this done and we'll do that. We'll do that through [indiscernible]. We'll spend time together, and we'll make sure that we can execute and deliver that to the customer. But part of that culture is communicating, communicating to all of our stakeholders. So I knew when I took this position first couple of weeks on the job, we had to get in front of the FRA to make sure they understood who we were, what we were going to do, it's not like we haven't been in front of them, we western in front of them as a CPKC, united front, talking to them about what safety looks like. So we did that within the first 2 weeks. Second thing was bringing the leadership team, the KCS leadership team that was going to be the CPKC of the future, bring them to Calgary, so I can spend time with them, so I could talk to them about consequence leadership. So I could talk to them about how we're going to railroad, why we're different. So they can see what good looks like. That campus in Calgary is unbelievable. It's very impressive. And people need to understand why we do what we do and why it's important we do what we say. And that's what we learned during about a 4-day excursion of having them on duty and teaching them that type of stuff. Union leaders, very important that we get in front of union leaders teach the union leaders how we're going to change transition, how we're going to do business, how we're going to change some operating rules up to better facilitate not just efficiency but safety as well. So we want them on point. I actually have a meeting with them in about 2 to 3 weeks. I'll be back in front of them on a 90-day checkup so we can trade ideas and talk about different things that's going on. And the last piece is, as we all know, is regulators, we've got to stay in front of the regulators so we can make sure that we deliver what we totally STB we would do. The last piece I thought I'd talk about is really just optimizing the operating model. What have we been doing these past 75 days. We've literally taken out about 130 locomotives. Mike can touch on that just a little bit. We've taken about 130 locomotives out and store them. We've taken about -- a show of 1,000 cars, it's multiple thousand cars that we've been able to take out of the network, pull -- put into storage or delivered back to the other carrier that we don't need. We just don't need those box cars at that point, so we can free up capacity into the terminals. And capacity means that the service improvements that we have across the serving yards that we have with dwell on-time departure. All of those metrics that's near and dear to the operating department. And that's what we've been driving for is just efficiency and delivering those results for the shareholder. The last piece I'll talk about is really just why this industry is important to me? Because the last piece, I said I'd talk about my son, he is -- as a family of tradition, he's a third-generation railroader. He joined our company about 3 years ago. And the reason I bring him up, he works in the technology department. He's an IT specialist. And the purpose of bringing him up is to understand the future. The future of this organization he's going to have a drive in this industry, a drive at CPKC because he can make a difference. And as he looks back, maybe 1 day, he can tell me how to run the business better because he's going to give me the technology to do my job better, and that's what I look forward to. It's just like passing the baton from my father-in-law that worked in this industry for 50 years, teaching me as I grew up, teaching my son as he grows up to make a better railroad for everybody, and at the end of the day, from technology, that's what Justin is going to talk about next is what's next for technology. So with that, I want to introduce Justin Meyer to come on up and talk.

Good afternoon. Again, my name is Justin Meyer. I'm our Senior Vice President of Engineering and mechanical. In my role, I'm accountable for a number of areas, including our engineering department, which would include the inspection and maintenance of our right-of-way, our rolling stock with our mechanical car the locomotive fleet and also our operations technology group. For those that don't know my history as well, I've been with CPKC for 25 years, hired on former CP, most of my career spent in engineering, fortunate enough and proud enough and humble enough to lead in this role for the last 1.5 years. And as I think back in my career and what we've gone through from a change perspective that I've been a part of and that I've been able to lead. I reflect on that and then I think about what 75 days ago means in bringing these franchises together like we hear and then being here today. And that leads me to what the challenges and opportunities are ahead of this franchise. And a perfect starting place for that is really about our ESG and our climate strategy. We know as an industry, we know at CPKC, the railroads must lead the transportation sector into a low-carbon economy. We will build on what we already have an advantage on in the trucking industry. And last but not least, CP is investing, and we'll continue to invest in its assets and its climate strategy. For those that were able to join us yesterday, you saw firsthand 2 of those assets right outside. You saw them operate, some of you even got to climb on them. For those that are joining us today by video or online, I'd like to take just a few moments and share a video. [Presentation]

I've watched that video a number of times, and I can tell you even right now, my heart rate is still racing. It makes it jump a little bit. And I think it does for a couple of reasons, and I'd like to start with sharing why with the story. If you understand a little bit going back in time, it was late 2019, I wasn't in my current role when my predecessor was, and we had a stakeholder challenge CPM, what was its transition plan to climate change. And as we look to 2050, what were we thinking about with our fuel. And as we through ideas out, the transition plan wasn't transformative enough. And with that CP was challenged at the time to come up with a strategy on what type of fuel is going to be our future fuel. What you see behind you is a result of that. When you think now and look at the time lines that we started with on that, as Kyle said in that video, it was a Mr. Creel discussion. And once approved, we took that concept designed, assembled and had its first movement test within 12 months. It takes a unique group of individuals to do something like that and you accomplish something like that. You saw a few of their faces in the video. There's PhDs, there's master's degrees. We have professional engineers, you've got system engineers, mechanical engineers, but what makes this a CPKC story is the other qualifications those individuals bring. It's the locomotive engineer qualification, the conductor qualification, the rules qualifications in our operating rules, even qualified welders. What that allows them to do is actively work on that technology, test it, go back and work on it, again, it cuts the time down, it's asset utilization, and it moves. And that's what made those time lines possible. Why hydrogen? I'll give you 2 reasons. First one, back to where I started, challenge for that transformative fuel. Hydrogen fit that bill, we feel. It may not be the only solution in the future, but we believe it's a solution we can build on and make part of the CPKCs strategy. The second reason is back to how we operate. As a PSR railroad now, but even looking back, we've used diesel fuel as a fuel type for over 60 years. So as you can imagine, process, infrastructure, scheduling of trains, how we operate in our yards. It's part of our DNA. It's part of how we operate today. So by choosing a fuel that could at least align with the similar strategies and processes that we do at diesel, it becomes and helps us understand that transition may be a little simpler from a change management perspective, and I'll give you a little bit more of an example. We have fixed fueling today for our diesel fuel. We also have the option of bringing diesel fuel to our locomotives via truck. With hydrogen, we'll have those same abilities as we go in the future. If we were have chosen just a battery electric path, the fixed facility would be there, but picture an operating yard that is heavy with volumes from customer demand or possibly impacted by winter weather event, and we're not able to get to that fixed fueling point. What options do we have? At the type of railroad, we run an extension cord wouldn't be able to be run across an operating yard. It's not there. So now you have an asset that you aren't able to charge. So for us, the flexibility of the fuel type is very important. As we started and you're able to see those 2 locomotives. Those are what we call our low horsepower locomotives. And if I describe our fleet, it's really just 2 types, low horsepower and high horsepower. Once we started down our project early on, we partnered with the government of Alberta and with their support is those 2 horsepower hydros and locomotives come online, we'll have fixed fueling facilities at Calgary and Edmonton. And our fixed facility at Calgary, the electrolyzer there will be a green source of hydrogen as well. The 2 locomotives that you saw outside will be operational by the end of Q3, which really means we're going to hand them over to Mark and his team and let the operations start hardening that infrastructure, our asset. How do we convert them? What did we think about as we went through the process. Again, I'll keep it simple. As you heard Kyle say, we removed the emission components of that B-cell engine, and we replaced them with a hydrogen fuel cell. So as you remove that from the space that's created the idea is to put as much of the hydrogen fuel cell technology as we can, including the batteries, the compressors, the cooling systems, the control systems. It's done in a way, the locomotives, if you noticed outside, there was a 4 axle and a 6 axle. Those are the 2 types of low horsepower locomotives we have in our fleet. So by completing the design for each of those, we now have a scalable solution for our low horsepower fleet. As battery technology or fuel cell technology advances in time, we will upgrade our technology using the same platform and the same process we do today. So with that, we have a scalable solution to converting our diesel engines to hydrogen as we go into the future. As you may have heard 8 days ago, we had an exciting announcement with a partnership with CSX. Partnering with the Class I railroad is a pivotal point in this project. It's going to allow us to do a few things. One is with a partner like CSX, we will gain their understanding and help on the conversion side with the facilities they have in West Virginia. We bring our technology to them. And working together, we will accelerate the number of assets that go into service. And I used that word earlier called hardening. What that really means is we need to get as many of these in service as we can so we can begin to work them through the seasons, through the operations, through the different areas and understand the long term, make them more reliable. And with the CSX partnership, we will accelerate that process, and we really do look forward to working with our new partners. I mentioned the 2 types of locomotives we have. High horsepower I'd like to talk a little bit more about now. And it is important. Our climate goals will not be realized without understanding what we do with our high-horsepower fleet. It is that critical because over 90% of our Scope 1 emissions come from this fleet. So today, we have a high horsepower unit back in Alberta that's being stripped down and being prepared and rebuilt, designed and will have a hydrogen fuel cell technology, similar to our low horsepower with 1 difference, our low horsepower fleet, our DC locomotives or traction motors, our high horsepower or AC traction motors. So the design will take that into account, and we expect by early Q1 of 2024 to have our movement test complete. Once complete and ready to go into operation, we will take our high horsepower locomotive to gold in BC. Why golden? A couple of interesting things really go on in our freight our route through Golden. One, a little about 4 or 5 months ago, we had talked about a Teck agreement. And as part of that agreement, we have a hydrogen strategy partnering with them. For those that don't know what Teck does, they move metallurgic coal from Southern British Columbia to the West Coast of Vancouver -- or excuse me, to Vancouver on our West Coast for export. Those coal trains are 152 cars long and they currently run today with 4 AC locomotives. Our strategy is once our locomotive is up and running and we're ready to test it in service, we'll pair it with a tender to give it the extra fuel it needs and we will begin operating that locomotive with those coal trains in that service. The Canadian Rockies also offers an ideal opportunity for not just testing it on its grades that we have through our mountain ranges, the curves but also the weather conditions that the Canadian Rockies can do. As I finish today, I'd like to talk about safety and build on what Mark has talked about. CP has been an industry leader in train accidents for over 17 years. This comes through hard work, investment in its people, investment in technology. When we take that technology, it's really what do you do with what results you generate. And as we've proven, we are generating those results, but we know we cannot rest on our laurels and safety is a journey. One example on my left is what we call our railcar inspection portal. This, again, Pam mentioned, is data we're collecting on trains that move through. We inspect those trains at a high rate at 60 miles an hour. One last example, excuse me, I lost my train of time, our cold wheel technology, using our wayside detector systems, we were able to use data as it flows into the back office, and we're able to check the brake effectiveness and exactly how our trains are performing from that standpoint. Finish with talking about 2 particular types of technology that are currently underway. Watchout detection with weather and climate change, we know the impact that can have on the railroad with water. Our goal is to use satellites and back-office technology and look at specific areas in the track. And as water levels change in those areas, the technology in the back office will alert us so we can send a track inspector to a site and identify that risk and mitigate it. This technology is very early stages as we speak, but we are seeing promising results. We expect to have about 2,000 miles of our railroad protected by the end of this year. I'd like to finish with another success story, similar to what you've seen with our hydrogen locomotive. Broken rails are a leading cause of derailment both in the North American freight as well as at CPKC. To help us mitigate what we know is a concern we have CTC in place today. And really what CTC is its centralized train control. So as trains move at a greater rate at high volume, excuse me, in quarters where that are busy, not only do we get the benefit of the train control to help move our trains, but we also have the benefit of broken rail protection. Unfortunately, that is a very expensive capital asset to put in as well as to maintain once we're done. With our territories that aren't protected by that. We knew we had an opportunity we need to take advantage of to continue to drive down our train accidents. Again, our solution, you can see on my left, it is that simple as an antenna, a solar panel a small electronic box, which is connected by wires to rail. You space that every mile on a subdivision, you turn the system on. And as it begins to run loops and talk to each other, we're able to run trains and using our back-office technology, we use and look for changes in the signal waves. And basically, as the technology identifies that change, we're able to deploy a track inspector again once trains are stopped. Identify the broken rail, correct it and then begin train movements again. As I conclude today, I hope you can see the type of technologies that we're developing in-house with our people. And it's through our people, process and even investments that we do that we know we will continue to generate results like you've seen today for our future, including our shareholders, people -- or excuse me, communities and -- thank you.

All right. Thanks very much, Justin. A lot of really exciting stuff going on in the operations technology front. And I agree. My heart picks up every time I see that hydrogen locomotive video. I'm very pleased to welcome the next 2 guests to the stage, Mike Foran and Ian Gray, to discuss planning excellence at CPKC. So Mike Foran is CPKC, Senior Vice President of Network and Capacity Management. But in truth, he's better known by his other title as Mr. Constructive tension. Mike has been railroading at CP for over 25 years. CPKC is operations led and traffic does not come on the network without his blessing. Mike has guided -- is tasked with guiding the strategic use of company assets to drive sustainable, profitable growth. Mike has also been qualified as a locomotive engineer. Ian Gray joined CP in 2016 and has been the Vice President of Financial Planning and Accounting since 2018. Ian worked hand in hand with Mike in planning capital projects and ensuring the right projects get executed at the right time to drive the highest rates of return. Ian is responsible for capital planning and budgeting, the multiyear planning process, CPKC's financial statements and accounting systems. In addition to being a CPA with a Masters in accounting and an Oxford MBA, Ian has qualified as a mechanical car inspector in Canada. So gentlemen, thank you for joining me.

Thanks.

So Ian, we just heard about some very exciting and potentially industry-changing technology in the hydrogen locomotive. How do you go about allocating capital to a project like that?

Yes. The hydrogen locomotive is very exciting. It's a very unique capital project that we've been investing in. And it shows our commitment to really challenging the status quo. So we came out with our net zero targets and Justin gave a bit of a history on how we approached it. But it fits well within how we approach capital in general. So Kyle mentioned in the video that he went to Mr. Creel was told that he could build just one. So proof of concept first before we start putting a lot of capital behind it. But we also then stretch the capital dollars. So they approach governments, they got funding from a mission reduction to make that initial funding stretch that much further. And then they're using retrofitting. So we have existing locomotives. They replaced the inside with the hydrogen power and then that brings new life into assets that might have otherwise been parked or mothballed. So again, stretching that capital dollar, trying to squeeze as much value as we can out of it because it gets back to our commitments. Again, we don't make commitments lightly. We're a very results-oriented management culture. So when we say we're going to get to net zero by 2050. We know we're going to have to invest, and we'll put capital behind it to make sure we do achieve that.

So how do you balance something that's more kind of research and development focused with the regular capital discipline process?

Yes. I think Mr. Creel did off very well this morning just talking about value and value amongst a lot of different things. And to get there, we need to balance it. We need to manage it like it's our portfolio. So when we look at things like the environmental side, we have commitments to achieve. We talked about the hydrogen locomotive. But we go beyond that. We look at things like the biodiesel or deploying technology like Smart HPT to make sure we're squeezing of the efficiencies. And when we're looking at capital cases internally, we're also having an internal price on carbon so that we can continue to consider that future impact that carbon pricing might have on our operations. So it's value from the environmental side, but kind of fundamental value is on safety. And Keith talked about that this morning that this management team has a history, understanding what happens and how inefficient you are if you're not investing in safety. We spend hundreds of millions of dollars each year on the network. We make sure our equipment's in good operating order, that the track, the balance, the roadway that everything is working. And then when it's not, we have detection technology so that if an issue does emerge, then we can take action before it becomes an issue. We have a corporate obligation. We have a moral obligation to make sure our workers get home safely and that we operate safely in the communities in which we operate. But we also have commitments to customers. We have lots of existing customers. We're not forgetting about those in the integration that we have the capacity and equipment in order to deliver the service that they've come to expect. And that same service excellence is what's given to new customers as they do come on to the network. And then that's balanced again with and underpinned with shareholder returns. I hope something that's come across in the discussions today is just the financial literacy of the sales and marketing team and others. So you have -- Coby is talking about asset utilization. Jonathan talking about return on invested capital and making bringing it up to it's very near and dear to our heart. So when we look at everything like that, it has to be balanced as we manage it as a portfolio. And if you understand that interplay, you can just stretch that capital that much further.

That makes a lot of sense. So Mike, shifting to you. Your infamous nickname is Mr. Constructive tension. Tell us what that means.

Actually, Chris, I named quite a bit or they call me a lot, but constructive tension I describe it as that the rule in the company that creates the friction that ensures that we are maximizing the value of our capacity. And I have a team of professionals that sit between the operating side and the commercial side, I report directly to Keith and my job is to protect the network. It's to grow smartly, not overcommit and ultimately make this fit. And so I've been in this similar type of rule since 2017 when Keith became CEO, and there was a recognition we heard about the transformation earlier that it was necessary to have a mediator or a policemen given to protect the PSR principles and grow smartly. The rule has evolved since then and different departments have come in and out but the fundamental stays the same. And I've been blessed in my career that I -- prior to Hunter and Keith coming on, I had a long background in commercial. Many different commodity groups. I was either an account manager or led the group and so I understand the business really well, but I also recognize the -- and lived with the consequences of overcommitting and not being able to deliver. So fast forward to when Keith and Hunter joined the company, Hunter took a chance on me and he is Vice President of Network Transportation, a commercial guy. But I got to learn the principles of PSR one car at a time, one phone call. It was a trying time, but it was fruitful as well. And so ultimately, I'm carrying those principles forward. I think another key attribute and another name I'm called is Dr. No and that's not no for the sake of growth. It's sometimes you have to say no to look at a problem or an opportunity holistically. I'm all about growth. I'm usually the first person to get the phone call when we're off targets. And so I'm very excited around what we heard today.

Yes. So just building on what we heard today, we heard about a lot of growth opportunities this morning. What does that mean to you from a network capacity and operations perspective?

So as I just mentioned, I'm excited we have a proven process. We've been very proactive in our planning so far. I believe that's going to avoid a massive capital bubble because we've been so proactive and then I also am very pleased with the team that's come over to me from the KCS because they're very knowledgeable and we've hit the ground running. To be specific about what I see and why I'm excited that number one, it is our operating model, the virtuous cycle that we heard about this morning. We're seeing it in action already. We know as an organization how to convert, and we'll see that very quickly, if not already. Second, we've really put the network or our CP legacy network in great shape through the hundreds of millions of dollars of network investment that we've made over the last several years. Our rail line from -- our transcontinental line from Montreal to Vancouver and our Chicago to Edmonton secondary mainline, I would call them green or free from bottlenecks. And we also are in the midst of several terminal expansions, multiyear different phases. Chicago and Toronto would be good examples of those where the business case for expansion there was already compelling. And now you layer on what we heard this morning, it's just ever more of a strong business case. So you take those 2 elements and then you layer on to that, what I would call a very well-thought through proactive plan as we shift our focus north, south around infrastructure. So we've made very public a $300 million investment in the corridor between St. Paul and Laredo, siding extensions, new sidings at CTC. And you -- I'm not going to steal John or Hunter, but when you combine that with a good thinking that's been done on KCSM side of the legacy KCS network, it's exciting and it creates such a good foundation. And then finally, we're also bringing on assets. You heard Jonathan talk about the 1,000 reefers that we just announced. You need assets to grow a compelling market story. Similarly, on the automotive side, over the next 12 months, we'll be taking on about 1,400 well-priced by levels through competitive leases and just to enable that growth. So all in, I truly believe that we are well positioned to stay ahead of growth.

That's terrific. So maybe talk to me about how your teams think about capacity and capital planning and the processes that you use to align those.

Sure. I'll kick that one off. We're very bottoms up. We're very detailed oriented. John mentioned that this morning that as an executive team, we're not afraid to get into the details. It's a process that we've built at CP and we've been fine-tuning as a management team over a number of years, and we started to roll it out at Kansas City. It's understanding the volume, it's understanding the sequencing and it's so much important now just the new product offerings, the new reach, the new customers that we need to bring online. We use that for the short term just to make sure we're resourced effectively in a cost-effective manner. But we also use that same detailed approach for the long term. And again, we're not order takers. As Mike mentioned, constructive tension. No group or person at CP is shy to have those candid debates and challenges the assumptions because that allows us to put for the best volume forecast, the risk revenue forecast so that when the team then hands it off to Mike to operationalize, he's very much ahead of the game and it has a good product in which to execute on.

Yes. And to layer on to what Ian said, my fundamental job and my team's fundamental job is to match that demand or that forecast to capacity tomorrow and 10 years out. And we rarely just rubber stamper ever a forecast. We pushed back. We set expectations. We smooth out demand and that dialogue is constant. And the other thing is, is that we are deep into the weeds as a leadership team between Mark and myself and the operating lead teams. We know all the elements of what's going on in our business day in, day out. Mark's the biggest driver of revenue on the property. And so that dynamic allows us to push back and to know what our capacity looks like in the moment. And I'd say core competency of this leadership team is our ability to operationalize the forecast to do -- to squeeze out as much capacity out of our network out of our railcars as possible in good markets and in bad. And I think Keith and point, it's been referenced a couple of times already, but just a few examples in the last 75 days, Jonathan spoke with great pride about the Mexico Midwest Express and its performance. We didn't add assets. We didn't do no more power, no more crews, no more locomotives. This is about setting the right schedule, the right accountabilities, adjusting and making sure everybody knows what they need to do to deliver. Similarly, Mark mentioned 130 locomotives that have been taken out so far that's pure productivity. That's a proven methodology. It's a proven playbook. It's challenging conscious makeup. It's longer hauls, it's put in the right locomotives in the right business. And the value proposition is there. When it's latent capacity for growth and it's cost savings when you don't need them. Mark also mentioned the cars and that 1,000 cars, I think that was up there where the cars were physically moved off the property, but there's several thousand more system cars that we park and it takes a little longer to actually get the savings on those cars, but the value proposition is the same. It's either savings for the customer for better cycle times or more room to grow.

And I think that utilization is so key, and you even heard it come across in Coby's remarks that in terms of executing for growth and starting to digest some of these growth opportunities from a capital planning perspective, it's fantastic, just that focus on asset utilization as one of our key core principles because we know what good looks like. We're not an organization that buys assets on nice to have. That's a good way to destroy your ROIC. So we need to exhaust the operational efficiencies before we start deploying capital. But as we exhaust those operational efficiencies, the expense savings get realized almost instantly when you're redesigning trains, you need less crews, you're more efficient on your fuel as you park locomotives and cars, you're saving on maintenance. So again, it gives good confidence and good line of sight on our ability to meet or exceed our expense synergy targets. But more importantly, from a capital planning perspective is that we're growing with no capital or very low incremental capital. So once we have to get to the decision to grow, be it on the reefers front or compounds that we have that dry power to then deploy to those high-return projects.

So maybe just building a lot when you get to that point where you need to spend some more incremental growth capital in test, what does that kind of planning process look like?

Sure. So I mean, the growth in front of us is a financial planners dream. We're having a lot of fun with all the opportunities that are coming up. And John has a pipeline, we like to manage it as a portfolio. We got to make sure that we're getting the returns that we have the capacity and appreciate the interplay amongst those. So it is a living document. It's a lot of analysis that needs to get done in advance. So as things progress more quickly or maybe take a little bit more time that we know exactly what type of thresholds we need to hit. The sales and marketing team understands the volumes and revenue and profitability that they need to deliver before we start greenlighting capital. And that line of sight that John has on the pipeline is fantastic for us to do a lot of proactive work.

And that pipeline for big as the specific opportunities were today, that $ 5 billion that continuously refreshes, there's got to be an effective process for managing that. And my team quarterbacks the prioritization of capital based on the business needs. And so we act as a clearing house. We look at, again, a holistic business, what the network fit looks like what the complexity of handling the business, the strategic fit profitability. And I think most importantly, the sequencing because you got to get that right. And a key in this is you can't do it in a vacuum, we as a leadership team, are meeting weekly reviewing opportunities, reviewing statuses, we take a project from inception right through to completion. And that allows us to be adaptable and to adjust where needed. And when I look at Jonathan's announcement earlier about moving forward with a Dallas auto compound. I think that's a great example of -- that's a project that we knew was somewhere on the horizon. But as we communicate and work through these details, it's clear and present. So we've adjusted the priority, the planning and are going to be able to meet the customer -- or the commitments that we're making in the marketplace just through that dialogue. And when I listened to David and the near-shoring and the Mexico opportunities that are there, the same nimble but thoughtful and adaptability principles need to apply. I think all of the lead team are pleasantly surprised just at how large the opportunity really is in front of us. It's not going to change our approach. We are implementing a disciplined operating model, and we're looking at the capabilities of the network and where to invest holistically so we can put as much throughput as possible over the long term on our network.

Yes. And I think it's extracting value for our capacity. So before I use like a portfolio approach. And again, we need to understand the balance, bringing customers on, having new terminals, new equipment and how all that interplay works. But ultimately, growth is somewhat discretionary, so we view it as discretionary capital. So again, when we -- say we're good stewards of capital, and we take that role very seriously, that a lot of the analysis that happens in advance has that high hurdle rate. So that, again, it's going to fit the network. It's got to extract value, but it also has to hit that high return on invested capital target that we have internally. So we do that. We prioritize. We continuously churn. We continuously discuss and collaborate and challenge each other as a management team because it's not easy. It's not easy when there's a lot of different projects coming, a lot of sequencing that needs to happen and if you have that with the interplay of macro headwinds, macro tailwinds, there's a lot of analysis that needs to go through it. But we've done it at CP. We've been successful there, and we're rolling it out at CPKC. I think that approach will be really impactful as a tailwind for return on invested capital. Again, we have assets that are parked. So when growth comes in, we grow at low incremental capital cost. And then when that discretionary projects start to need to take shape, that we have a process. It's worked. We can prioritize based on returns. So you get the low incremental growth on the capital side and then that high return on invested capital beyond that. And again, it's just magical from return on invested capital standpoint and something that I'm very excited about.

That's great. Well, it sounds like a very collaborative and constructive process that has us well positioned to execute on the growth. Thank you both for the time this afternoon and joining us on stage.

Thank you.

Okay. So it's my pleasure to welcome our next guest to stage CPKC's Executive Vice President and Chief Transformation Officer, Mr. John Orr.

Thank you, Chris. I can't tell you what a pleasure it is to be here today. As Chris said, I'm John Orr, and I am the newly minted Executive Vice President and Chief Transformation Officer of this wonderful company. And it has been a journey. I started my career in London, Ontario as a brakeman in Canada. I progressed through a series of promotions in transportation to a yard master, a locomotive engineer, and for about 15 years, I was also a union representative for the United Transportation Union. And in the early days of change, Mr. Creel often would turn the page on an article and ask me if I was a party to this atrocity. But I had to admit in some cases, I was and sometimes that was an innocent bystander, but it was a great experience. From there, I began life as a manager in the Canadian landscape, moving from the eastern part of Canada to the western part of Canada, addressing new opportunities, challenging the convention of the service in those areas or solving problems and creating new opportunities. And as a family man, you can imagine how disruptive that can be uprooting our family every couple of years. And we had a bit of a tradition. We had a hot tub. We had family meetings in there, and there was a day that we talked about uprooting. And the kids surprised me, my son, Ian and my daughter Margaret, they embrace the changes and at 1 point, my son told me, "Dad, this is not uprooting. This is embedding our roots across North America." We have had the privilege of living across Canada and the United States. And it was only through that kind of support that we generated from our family, creating roots, deepening engagement, committing to one another, the way I was able to do the wonderful things that I've been able to do. And when Keith Creel and I talked about the transformation of the CPKC network, he didn't get transformation out of his moth before I was signing up. What a privilege it is to be a part of this organization and be a part of the industry that I've committed my entire adult life, too. And so it's with humility and excitement that I'm sharing with you some of the areas that I've been focusing on, there are really long lead value creators that have been ongoing for some time that I'll give you an update on. And it will give you a little bit of insight to how I see transformation and bringing the power of the team together. We've by any slice of the imagination, we're already leading a lot of these areas. But in true form, we always have to get better and prove ourselves day in and day out and manage the infrastructure and the responsibilities to the utmost so that we can continue to service and be relevant to our customers. So we'll talk about how we're investing in our cross-border transformation. The infrastructure that we're building out in order to optimize solutions and working with labor to modernize our labor relationships as well as our labor agreements. And I believe these initiatives are central to unlocking the full value of the CPKC network. And they are also the catalyst for many of the initiatives that John and company have talked about all day long. I worked for some great leaders in this industry throughout my career. And I remember very fondly some of the leadership discussions I had with Hunter Harrison, particularly when I was in my early days in management leading change in our most important, largest hump facilities in Canada. One of the things that Hunter really impressed on me. In order to serve your customers, and deliver value for the people you're leading. You have to understand your differentiating assets, not only understand the differentiating asset but then create value around it, improve it, optimize it and then concentrically build out more value and in this case, the hump lead a 10,000-foot hump lead in the middle of a 20,000-mile network was that differentiating asset. And boiled down was the hump Crest, the Apex that fed the network in that 500-foot span was critical. It didn't take me very long coming to KC to understand that the border complex at Laredo was that differentiating asset. And the bridge at Laredo was the hump crest. So we set about to optimize. And no matter how you slice it, whether from the view of ESG, security, or service, we were already the leading transportation mode in that gateway, but to be competitive and to be relevant for growth, but to continue to improve that. So we set about optimizing. On that bridge, we were stopping trains to change crews. We worked across 2 nations in a multi-agency approach to create and pioneer international crews. Working with CBP, working with the FRA on the U.S. side, ARTF and the SAP on the Mexican side, we're able to qualify Mexico workers, Mexico train crews to operate trains from our Sanchez Yard to Laredo yard and create a trusted traveler scenario where they didn't have to stop at the bridge in order to change crews and move off the bridge instead of stopping in the middle of the bridge to change crews, we're able to move those 18 miles across through the complex and create more efficiencies on the bridge. Through those discussions and that reputational equity that we built, we're able to work with, again, cross agency engagement to create a unified inspection location for the border services and security services inspecting the trains coming across the border on U.S. soil. They share the same data inputs, the same equipment. And you can imagine how much that accelerates any kind of disputes, uncertainty or any situation that might impede the flow of a train across the border. You're right there, talking to each other. That whole process now is evolving, and we're building a facility for SAP and CBP to coexist, work together in the same office, same desk, same monitors and that's allowed us a lot more fluidity across that bridge. Those are kind of regulatory environments. And from a physical environment, we set about investing in our Laredo sub and our Rosenberg sub to decongest some of the high-volume flow through on those 2 core subdivisions that lead to and from the U.S. border. And we also invested over 9 miles of track in the Laredo yard itself. On top of that, we resolved the queuing staging of trains from Laredo to the bridge by building triple track from Laredo to Arkansas AVE and why Arkansas, that's the furthest point we could get from the yard to the bridge without interfering with public and public crossings. And we're continuing to work with the City of Laredo to resolve that even further. But I can't say all this, but a picture is worth a thousand words. So why don't we roll some video and I'll show you a train leaving Monterrey, Mexico coming into our Sanchez Yard and going through this critical infrastructure at the border. So our Sanchez Yard is a 1,500-acre facility. You can see on your right, the arrivals, then the departure tracks and off to the left, our ball facility. And one thing that I really recognize is the people before me investing $130 million in building this great facility, but one thing that struck me was the value of the same safety management systems and management oversight that we have in Kansas or Shreveport applying in the yard. And you can see the orderliness the cleanliness, the disciplined structure of engineering and mechanical coming together to provide this great facility to allow us to ingress and egress from the border. And you can see there's room to grow. Most recently, for those with a trained eye, you can see we separated the switching leads and the main lines as they go through Sanchez in order to give us more flexibility. Moving to the bridge, here's one of John's new trains coming across from Mexico into the United States. And I draw your attention to the white building. That's the -- that's where we work together with CBP and CSA. And here, we have the on ramp for the new bridge that we're building and it's well underway. As others have said, it comes online Q4 2024. And it's not just a bridge. It's a parallel opportunity to run 2 trains at the same time, anytime in any direction. And I'll take you up to Laredo yard now. Again, it's a 500 -- or sorry, 350-acre facility room to grow, room to expand. And what we've done, again, is separated switching leads and mainline, and we've also double tracked a lot of the mainline out of Sanchez, or sorry, Laredo yard, that helps us target and resolve issues, not only into the yard and the border complex, but adds a lot more accuracy in the use of capacity in places that are critical to the United States network like Houston, Shreveport and even as far north as Kansas. So these optimizations of our secure corridor have really lend themselves to an improvement across the entirety of that critical asset. It's one thing to have an incredible infrastructure and design. It's another thing entirely to have the resources dressed and ready when the trains present themselves. As David Eaton said, this is Mexico's time. This merger could not have happened at a better time. The USMCA has a backdrop for labor reform and labor consistency that unifies the approach to labor across all 3 countries. The administration is lining up to support workforce development, better wages, better conditions, and we are front and center to that. We are actively working with our labor unions to give them a once-in-a-generation transformation on how they work, how they provide service, creating functional flexibility that allow our customers to be able to rely on the service they need to increase their transportation with CPKC or to even come online adjacent to us and start to grow with us. In Mexico, labor is front and center to our transformation. We're also taking that approach in the United States. There's a long and successful history on the former CP network for the transformation from a conventional CBA in transportation in an hourly I've worked in both systems as an employee as well as a manager. And I can tell you, you get rewarded in an hourly environment for the investments you make to increase velocity and efficiencies. In a conventional hourly agreement, a train progresses from A to B and whether they do it in 6 hours or 10 hours, that's the ending event. In hourly, as you invest to resolve conflicts, bottlenecks, accelerate throughput of trains you're rewarded either at the front end or the back end by having that crew available to provide first mile or last mile service. And it's not arbitrary. You create the discipline then you can design that service. So we're taking that approach that was so successful at CP. We brought it into the consolidated area the legal definition of the affected area of the merger between Pittsburgh, Kansas, St. Louis and the Tama, Iowa and our unions actually had the choice of which system they wanted. They chose the hourly rate. They chose a system that was legacy CP. And we're in the midst of that continued transformation. I talked about ongoing long-term investments in creating capacity. At a worker level, we're creating a once-in-a-generation opportunity for workforce development and reliable service in Mexico that has never been a paralleled. On a sector level, we're bringing competition. We're bringing service standards and safety standards to Mexico and beyond. And at an economic level, we are aligned with the Mexican government and the public policy of near-shoring and reshoring and creating that private sector stability and the catalyst for investment across our territories. And as a Chief Transformation Officer, it's my job to create attention and to create the evolution of data so that we create action, and we create change, and we keep driving transformational ideas and thoughts in the middle of all the action. So I have the distinct pleasure now of introducing our Executive Vice President and Chief Financial Officer; Nadeem Velani to come up and wrap it up.

To break into you CFO doesn't get any videos. All the marketing guys got all the montages and videos, but they let me have the coolest walk-up song of the day. I think you can all agree. So I am going to close it out today with the formal presentations, and then we're going to have a chance to go through the Q&A, we'll have Keith and John and Mark joined me up stage and all the questions you guys have been saving for the end of the day, we'll get a chance to address, and then Keith will wrap it up. So Hopefully, today has been a great opportunity for you to understand just why we're so excited about the CPKC story and the CPKC future. It's something that we are all more than enthusiastic about we've been chomping on the bit through that trust period and through the back and forth on acquiring it. And we're going to mine the value that we see out of putting these 2 great organizations together. So let me take a moment though and just talk a little bit about -- it's been 5 years since we've had our Investor Day and just talk to you a bit about our accomplishments. I know Keith has touched on a lot of this, but let me give you my perspective as well. If you look at today, just the people that you've had a chance to meet why we believe we've got the strongest and best management team in the industry. The 13 people you saw present earlier, the passion the knowledge, the deep history they have and what they do, the financial literacy, Ian pointed out. All of that to us gives us great pride on how we're going to deliver and why we've been able to deliver. If you look at the bench, I got a chance, Keith and with the support of the Board to get out and spend time away from the railroad, get on the property, spend time, various parts of the network. And no matter where I was, whether I was in a tower of a hump or in the cabo locomotive or in the classroom, getting inductor training. It was very clear and very evident across our great group of railroaders that our culture is ingrained. It's very clear that everyone on the property knows we're an operating company, first and foremost. The people know the role that they play in making CPKC better, delivering our results. They understand our goals and our objectives on safety, on personal injury, on our train accident ratios, what it is that drives not only their compensation, but what it is to make us a better company, and it was clear across the board just how ingrained our culture is. And and it gives me great satisfaction to know that we've got this great bench. It's a great team of railroaders out on the property that make us who we are, that make us what I think is the best in the industry. And it gives me great satisfaction knowing the sustainability of what we're going to deliver. It's in the hands of these 20,000 future railroaders. When we look at our safety metrics, Mark talked about the culture of safety that's ingrained in us, the Homesafe program. And it's been a huge huge factor behind why we've been able to be the safest railroad in the industry. We are extremely proud of that, and it's something that we will never get the -- let the foot off the gas in terms of gaining that safety culture and mindset, how we invest in our capital into safety and what we do day in, day out to make us a safer railroad. We were able to achieve the strongest revenue growth in the industry. This has been on a consistent path despite even having the effects of a drought last year, over the 5-year period, a challenging macro didn't necessarily go as planned over that 5 years. We still delivered on our commitments and are the fastest-growing railroad in the industry. And I think if you had a chance to spend time with the team and see their presentations, I think you can understand just why the playbooks, the thoughtful planning the markets that they created, the self-help story. It's a big part of why we were so successful in growing the top line. And we didn't just do it for growth's sake. We continue to see margin improvement, bringing to the bottom line. Keith likes to say, we don't move traffic for practice. It's about profitability, bringing it to the bottom line. And that's something that we are very focused on sustainable, profitable growth. One thing I'm probably most proud of is our return on invested capital. You heard that probably many dozen times today, but it is a focal area. It's what we've traditionally had as our long-term incentives. And to us, it's what brings all -- what everything that else you do, it's what good looks like. So if you're taking on revenues, at the right margin, if you're being safe, if you're investing capital thoughtfully and efficiently, it all comes down into that return on invested capital. So we were highest in the industry prior to our transaction with KCS. From an EPS point of view, we delivered high single-digit EPS over that 5-year period. We had many years of double digits in there. Again, we had the grain drought that impacted us in the last years, but delivered consistently high single-digit high single-digit EPS growth. When we look at where we could improve, what we've been able to do the last 5 years in terms of our network reach. Keith talked about some of the opportunities that we had to expand our network, CMQ, what that did in terms of getting us reach into a East Coast takeaway an area that was -- we're underserving our customers and creating opportunity in lane that Jonathan and team have been able to leverage and we see further path for expansion on the intermodal side. Then, of course, as we took on and completed the transaction to get into deeper into the U.S., into the Gulf and of course, Mexico. So not only did these transactions extend our reach, we were able to do it in what's going to be a back and say very reasonable prices. The CMQ is clear we've been able to do the post audit on that one very clearly and a terrific return, and I'm optimistic that 5 years from now, when we look back on this transaction with KCS, it will be a very significant achievement to buy at the price we did. We also improved the diversity of our network. Think about what we were before at CP, let's call it, a smallish northern bulk railroad. And we've been able to transform ourselves create diversity, lower our exposure to Asia and put ourselves in a position to benefit from regional trade from North American trade and nearshoring and also diversify our book of business. Take on more merchandise traffic, again, profitable, sustainable revenues and expand our reach into faster-growing intermodal areas, which I think is a great improvement in the overall network. So we've put ourselves as the only true North American railway and we've put ourselves in a position to capitalize on the TPKC advantage. So let me talk a little bit about our 5-year guidance and 5-year outlook that we've laid out today. John and team made a very strong case for long-lasting and sustainable growth and diverse growth. I would characterize this as more for longer. If you add up his summary chart, kind of high single-digit revenue growth, is there an opportunity to do more than that? If you take that out ends, it could be double-digit growth. I think we've been a bit conservative on the base business. The synergies are certainly from our vantage point, stronger than we originally looked at when we first talked about the synergies of about $1.2 billion revenue. That was kind of over a 3-year time frame. So there's upside potential on the synergies, and pricing, same thing. We've always talked about 3% to 4% pricing. Could there be upside in the current environment? Absolutely. But longer term, our view is that high single-digit revenue growth. And it's -- combine that with the KCS franchise that has been extremely successful as being one of the fastest-growing railroad in the industry as well. We plan to bring it on in a measured manner and -- but we also plan to bring it on at a low incremental cost. Our headcount is elevated. We've always talked about this being a growth story. But in this macro environment, our headcount is probably higher than it should be. But we didn't want to get caught short. We wanted to ensure that we hired and trained, and we're ready for day 1 to be able to take on the volumes and meet our commitments to our customers and have service in a CPKC manner, which is a premium service and a premium product. So I expect us to fully grow with high incrementals generate significant margin improvement over this time frame as well as through the capital planning process. Ian and Mike talked about what we do there. We spend a lot of money on our network. KCS, while they were in trust, spent money on their network so we can hit the ground running and generate these revenues and bring them on and that's going to come on at a low incremental cost. So it's going to be very accretive to our margins. From a free cash conversion, I'll talk a little bit more about that on the next slide. But we see a very strong path over this time frame of significant value creation from a free cash point of view. We think we can achieve about 90% over that 5-year period. I think in the outer years, it will be 90% plus. But on average, about 90% free cash conversion. As far as our ROIC, we see a return to double digit when you factor in the free cash, the ability to pay back our debt, what we've been able to do already but also look at shareholder returns in the future. We expect our ROIC to return to double-digit levels. And finally, from an EPS point of view, we laid out guidance for double-digit EPS growth in the '24 -- 2024 to '28 years. Certainly, double digit is pretty vague. I would characterize it as this. Over that 2024 to 2028 level, we certainly see line of sight to be able to double our EPS meaningfully double our EPS over that time frame. So hopefully, that puts a little bit more transparency on what we think we can achieve, but it's a pretty significant opportunity. And I would characterize as there's absolutely no railroad in the industry that's going to have an opportunity over the next 5 years to deliver the earnings growth that we have in front of us. We talked about synergies when we initially laid our plan about $1 billion over the first 3 years. Certainly, we see a longer runway in a larger scope John talked to you about the, call it, $950 million that the team has clear line of sight over the first 75 days. But from a cost perspective, we also see a significant opportunity. This is about growth, but naturally, as we operate and bring these 2 companies together and operate and make it a true PSR railroad, we're going to see cost synergies. We talked about our culture a lot. Ian talked about how we interact with our team on the operating side. I can tell you we're bringing that same level of constructive tension and feedback and engagement with the business that we had at the legacy CP to the new CPKC. So what does that mean? It means our financial partners, as Keith said, aren't order takers, [ certs ] aren't reporting variances, but they engage with the business. They meet with their -- the GMs or the Vice President of the territories and give them a lot a task or a list of how they've achieved and where there's opportunities. It's a 2-way kind of feedback model that gives line of sight to the key metrics what we can achieve, how are you doing relative to your budget, but more importantly, where are the opportunities to improve? I think it's a very unique way of how we engage with the business. It's not one of just trying to pat each other on the back when we say constructed tension. It means getting the most out of each other. That means getting the most out of each other's business as well. So we're bringing that accountability and constructive tension to the operating side and how we look at our expenses. As we combine systems over the next few years, Pam and James have a great plan. but it's going to take a little bit of time to get more visibility into some of the key metrics we need. But that's going to give us another lever into how we manage the business. I'd say that on the KCS side, they haven't had as much visibility to the level of detail of expenses as we are used to on the CP side. And so that's going to be an area of opportunity as we give the business leaders greater visibility into how they manage their business and ultimately how they manage their costs. Just running the 2 networks, better the train speed, the dwell, the locomotive productivity. We see a huge opportunity for operating leverage and ultimately, cost synergies from that space. Fuel efficiency. That's going to be another key area for us. Admittedly, we have a gap between us and our Canadian competitor. That shouldn't be as big as it is. We have an opportunity on the legacy KCS network to improve fuel efficiency there. So as we look towards delivering on our 2030 [ GG ] emission reduction targets, we see fuel efficiency as a key opportunity to improve not only our missions, but our cost structure and lower our expenses. On the procurement side, we're a much larger organization. We have duplicate costs between the 2 procurement spending and contracts and third-party expense is an area that we see again more opportunities from an expense point of view. And lastly, I'd say that from a workforce point of view, well, it's going to take us a few years, but we'll see optimization on our general workforce. Some of that's going to be systems driven as well. Our employees are going to be not impacted by -- and we're not going to have a one-time charge or anything. We're going to let attrition do its work but that's going to be over the course of this planning period over this guided period of 5 years. We expect to see headcount come down from a G&A perspective. And then longer term, as John pointed out, could there be opportunities on the -- from a collective agreement to [indiscernible] agreement? Certainly, we're going to see it on the U.S. side near term, but there is potential down the road in other parts of the network. That's also going to drive our efficiencies on the labor side. When we talk a little bit about capital, we do pride ourselves in being good stewards of capital. First call on capital is always reinvestment in the business. We've grown capital our capital spending since 2012. Our network is in excellent shape. Certainly, it's been a big focus of ours to be able to support our PSR way of operating things. Our network speed the service that we expect. So we've been diligent in our kind of consistent capital investment. If you look at the graph over the course of the next 5 years, we expect 2024 to 2028 to be in line with our 2023 spend of about $2.7 billion. We expect capital synergies as we incorporate the 2 companies. Ian talked about our meticulous detail on how we look at capital, how we look at -- it's very much return-based and so forth. We see meaningful opportunities in terms of capital efficiency. That's why I think we can -- we're going to be in a position to be able to hold that relatively flat over those 5 years. We're going to see benefits even from KCS. They have a tied treatment plant that Justin and the team are going to be utilizing to -- on the former CP network to take advantage of their tie treatment plants Near term, we're going to see our capital profile more growth infrastructure focused. And over time, we'll see it shift in the other years more to IS investments and potentially some rolling stock. But rest assured, we're going to be very disciplined in how we invest our capital. You can expect return on invested capital to be a key measure of ours going forward. From incentive clients that we're going to hold ourselves accountable. A few of the major projects that we touched on, I'll just quickly highlight, but we have the Benzinga project that's give us an opportunity to leverage the Tollway deal and optimize one of our biggest terminals. So that's a USD 300 million investment that we should have completed over the next 3 years. The Laredo Bridge, we talked about a fair bit that's going to support the MMX train and train 180, 181, and we have about $275 million in capacity expansion. Mike Foran talked to you about that's going to support through extended siding that's going to help our train length. It's going to improve our train speed as well as CTC, it's going to help with our safety and train speed as well as we're committed with the STB. So the bottom line is we have the capital plan in place. We don't have major CapEx bubbles whatsoever. We expect kind of consistent $2.6 billion to $2.8 billion of capital. So last Investor Day, I talked to you about this money clip that Hunter gave me. Some of you might recall, and it said, for the good times. So this money clip is still empty. It's not a result of not having good times. We just spent it all. We spent a fair bit. We had the highest financing in rail history, $8.5 billion of offering issuance that we had a, I think, 2.29% all-in coupon and it impacted our leverage. But I'm proud that we've been able to reduce our leverage already. We're at the 3x level. By the end of this year, we expect -- we have -- we've been able to pay back USD 2 billion of leverage since we closed the transaction and another $500 million of credit facility. And I expect us a year from now to be back at that 2.5x level sometime around this time next year. The model and the CPKC company is going to generate a significant amount of free cash flow. This is, I think, a huge opportunity for us. We are going to continue to be balanced in how we invest, how we look at high-return projects. But ultimately, we're going to have a lot of cash to use for other sources. We don't have -- the pension is not a use of cash. Our main Canadian DB pension plan is at 133% solvency surplus, I should say. And we've had a contribution holiday for 2 years, and we'll have a contribution holiday this year. So it's certainly not a use of cash. We also have $426 million in prepayments available. So on the pension side, we're in a very, very solid position. I'm proud of how we've been able to deliver on our capital allocation in the last decade. If you look at what we've been able to do to reinvest for safety, reinvest for growth, reinvest for technology and even look at some of the innovation that Justin highlighted, we're going to focus on protecting our balance sheet. But rest assured, a year from now, we'll be in a position, like I said, to revisit our shareholder return strategy. And I'll tell you, we'll discussed with our board, but we've been historically big proponents of shareholder -- share buybacks. If you look back at what we've done since post turnaround. Starting in 2014, we had buybacks from 2014 all the way through to 2020. We were able to buy back 25% of the outstanding shares that we had since the turnaround, spent about CAD 10 billion in buybacks and bought back shares at half the price of what we're trading today. So shareholder returns will be a big part of our ability to generate value for this company. We're going to be balanced. We are committed to our BBB+ rating, rest assured. But more to come on that. But when you generate, it greater than -- around 90% of free cash conversion, it's going to be -- put us in a good problem to have with the yields. I think that could be industry-leading. So as I said, there's more good times ahead. We talked about our unique long-lasting growth. But that's not the only unique thing, I think, that we have. Relative to our industry, everyone cited maybe one have implemented PSR but they haven't generated the same level of results as we do. So why is that? I'd suggest that our culture is unique. We talked about it, we all have to earn our seat at the table. There's a culture of accountability. It's a high-performance culture. It's focused on investing in people. So one thing you've heard today, it's the people side. Mark, Megan and I lead our leadership in diversity steering committee with many of the people here presented today are a big part of it. We're meeting again tomorrow to kick start the CPKC leadership in development SteerCo. It's a big part of what we do. It's ingrained in us, and we're all accountable for it. So development people is a unique skill set, I think that's an accountability that we all are responsible for. Mike and Ian talked about our unique structure and how we collaborate and how we hold each other accountable. That constructive tension that we have. When you think about our alignment with shareholders, how we look at incenting, motivating, retaining employees, from a sustainability point of view, Justin talked about our hydrogen locomotive. Our view on our climate commitment that we announced recently. Mark talked about our safety, the core of our PSR foundations, sustainability is part of everything that we do. This isn't a new team anymore. Five years ago, many of us were in our roles, seeing a lot more gray hairs. More people have lost hair since then. It's a team that's been working together. John and I also worked together for many years with Keith as well. It's a team that's very experienced as being collaborative. That is going to be in through this for the long term. Keith talked about the leaving a lasting legacy. It's something that we're all accountable for and passionate about, and I think it brings a unique opportunity for us. It's I think part of the reason why we've had such a strong track record of success and why we've been able to deliver. And part of the reason why we've been able to generate such a strong multiple. No one else has the earnings outlook that we do over the next 5 years. I recently celebrated my 20th anniversary in the industry and 10th anniversary at CP. I've had the opportunity to have a front row seat through turnaround through PSR implementations. I've seen pivots to growth and seeing a lot of value created in this industry the years. But I can assure you, and I can tell you that there's never been a more exciting time for a railroad than this one right now, in my view. The opportunity that we laid out, the long-lasting opportunity -- the value creation potential is tremendous. Is everything perfect? No. It's a tough macro environment, absolutely. We've got some near-term challenges but at the same time, that's a good. Now is a pretty good time as you start an integration for -- to have a bit of a softer macro environment. You can take on business in -- bring on business a lot easier in this environment. You can hire, you can bring people on. And I think if you get that benefit of self-help. But again, we've got a team here that's in its prime, that's energized. Let's take advantage of benefits of nearshoring, diversification of a stronger network. We had a strong origin network and you saw what we delivered. You put it on arguably what we think is the best network in the industry. And I think what we can deliver can be even more. You see the first 2 chapters that have generated a significant amount of value. But when you factor in what we have in front of us, which is high single-digit EPS growth, the ability to bring on business with low incrementals, what we think we can achieve in terms of margin improvement and have the best margins in the industry. The ability to generate a significant amount of free cash that can reward shareholders and the length of the opportunity that's in front of us. I think it's an opportunity to deliver the most significant value this company -- this industry has ever seen. I think the CPKC advantage could be one for the books. Thank you.

So we're just going to take a quick 10-minute break and come back at 2:10, and we'll kick off Q&A at that point in time. All right. Thank you. [Break]

Got some energy here. I got to shake things out here. got a quiet, we got to finish strong. So I'll let Nadeem be the moderator here. [indiscernible] If we can, let's get one more mic so that we have the next person. Yes. Okay.

This is Fadi Chamoun from BMO. Maybe first question on the guidance, Nadeem. What is the cost synergies implied in the guidance? I see the revenue between 2% to 3% over the next 5 years. And then in the context of maybe continued maybe soft economic outlook over the next 12 to 18 months, is there a possibility that you can accelerate some of these opportunities going into 2024? And if you have any framework to kind of help us to think about what 2024 look like and maybe the pace of that energy over the next few years. And maybe my second question on this MBR opportunity. Obviously, it looks like a potential growth driver for you over time? Is there more opportunity than a pipeline like this that you can share with us?

Let me take that one first, and then I'll let Nadeem speak. We're going to assess the entire network from when I say network, the new network to me, the new network to us, the partnerships that we have with other short line partners. So that was the first one, not because it obviously creates a bridge in a connection to a market that doesn't exist today but essentially, the same approach we've taken at Canadian Pacific, we're going to analyze each of the short line partnerships, those lines that we might have leased out to see how the dynamics have changed and to see what this network does because the predecessors when they made the decisions for some of those lines, to lease them out to short line partners. They didn't have this whole network to feed those lines. So I think -- I'm not saying we're going to change it. I'm going to say we're going to validate it. And if it makes sense, we'll maintain it. If it doesn't make sense, we'll have constructive discussions with our partners on the short line side. And if we need to patriate another piece of the line that years ago, perhaps was in the due short line, that's exactly what we do. We're going to do what's right for this core network but we're going to give very transparently, and we're going to work with our partners on the short line side that might be operating those properties today. So it won't be, call it, flat footed. But at this point, our focus is going to be to optimize that piece of railroad. And again, we're going to work within that capital envelope that Nadeem has guided to. We're going to do this thing in sizable bites. We've got a lot of time and a lot of opportunity and a lot of networks. So that's the one that kind of complements what we're doing. It doesn't distract us. It actually, I think, is a force multiplier for us. And then once we get through this period, we'll go through this spirit, we'll be reevaluating. I've already got a couple of things I've asked to look at. The team will look at it and that will set the next set of opportunities. So there'll be more to come on it, but the immediate future is just this one at this time.

So Fadi, on the expense synergies? So originally, we had guided to $180 million of cost synergies over the -- like with the revenue side, we see a larger scope, larger scale in terms of the size of the expense synergies. So we expect about $300 million of synergies over the 5-year time frame. To your point, can you accelerate some of that? The one thing I'd caution to is just in a weaker demand environment as we're seeing today, a weaker volume environment. We've pre-hired, pre-trained, didn't want to get cut short. So we're long people right now. I think that will give us an opportunity to have strong incrementals as we grow into the workforce. But in terms of accelerating some of the cost synergies I'd say, a small opportunity to accelerate, but they're larger pies, so call it $320 million of synergy opportunity over that 5 year.

Walter Spracklin here at the RBC Capital Markets. Thanks very much for the questions. I'm over here. Yes. I made eye contact with Chris, so I was able to grab a mic, so it was good. Starting with your -- one question for John and the second one for Nadeem. John, I really like the kind of business you articulated where it was kind of handoff business that you were taking over taking from that interchange player where whether it was Coby talking about TAMs or if it was Jonathan talking about the Schneider business, that seems like very low-hanging fruit type of business where you're just taking over where another railroad was running that business. How much of the $5 billion would you say is characterized in that kind of low-hanging fruit, easy to take over business that perhaps another interchange player was doing that you can now easily do. And then my second question, just for Nadeem. You mentioned double-digit. You gave us a little bit more guidance at doubling by the end of the 5 year, which would suggest a 15% EPS CAGR out for those 5 years. Can you talk a bit about the cadence of that? Does that start kind of faster and then slows at the end? Is it something that ramps up just so we can get the cadence right when we put out our annual numbers out for the next 5 years.

Yes. So it's really that rail-to-rail category, if you think about, as I went through that pie chart, I think we pegged that at about $925 million, Walter. So that's really traffic that now that we've come together of the company, we've always been able to look at our traffic takes and identified business that currently, CP was running, handing it off at Chicago and maybe a different Western carrier was bringing it into Texas to service the market. So now it's like, well, how do we work with those partners to not hand that off and bring it into that same Texas market, CPKC Direct. Now since we have control, we've been able to sort of dissect and really go through the KCS book of business to identify those similar opportunities. So it's really that rail to rail conversion, those share opportunities, length of haul opportunities and to your point, I do believe that's low-hanging fruit. It doesn't mean it's super easy. It's grunt work. To me, that is -- and I'll just tell you, it's like the CMQ. We've segmented all that. We broke it down. We've got it in thread sheets. We handed off to our salespeople and then we drive accountability. Their job is to focus on what you just described, that $925 million and one at a time. And honestly, this gets me emotional. I don't care if it's 10 cars, 1,000 cars or 1 car. I want to convert them all. And we will systematically go through that list until I feel we've exhausted every one of those opportunities.

So Walter, on the EPS guide. So we've guided today to 2023 EPS growth of mid-single digits off of 2022's core adjusted EPS of $3.77. So what we're implying for 2023 is about $3.95 to $4 EPS. We see over this time, 5-year time frame over -- from '24 to '28 the ability to more than double that EPS number from 2023. In terms of the cadence, the synergies, we just got control in April, we're ramping up some of the synergies. I think we'll start hitting a sweet spot of synergies really starting to see the value of them kind of late next -- late this year, early next year, we'll start seeing kind of the synergies really come to fruition. So I'd say the ramp in terms of the cadence, you're going to have some years that are kind of in that closer to 20%, 22% type of EPS growth. We're not going to get the benefits of a buyback in the near term, right? So our leverage, we're still going to be focused on paying down debt. So I'd say you're not -- you shouldn't get the shareholder return benefit in the first year or 2. So that kind of implies a stronger EPS growth in years 2 to 3 rather than year 1.

It's Scott Group from Wolfe. Maybe one for John, one for Nadeem. So John, the $1 billion of revenue synergies you've got today, how much of that hits in '24 more broadly, would you say it's more linear? Is it front-end loaded? And then when you combine the synergies with what's going on in the freight market right now, just when do you think we should expect to start seeing some volume growth again and then for Nadeem, your slide said strong margin improvement. Any more color you want to give on -- if it's a 40% margin today? Are we going to mid-40s, high-40s or if you want to answer it incremental margin. How do you think about that?

Yes, let me take that one first. So I see -- like I said, on a headcount point of view, which is a large component of the cost, we're long people, so the incremental margin should be strong, 60%, 70% kind of level. We didn't guide to margins, but I think one of my slides said industry-leading margins. So I think if you do the math, if you factor in a high single-digit revenue growth with strong incrementals, you're going to get to a very favorable margin level, industry best. So let me leave it at that.

Scott, it's -- look at this a few ways, on that $950 million. Number one, I view that kind of tying to our STB provided revenues over the first 3 years. So that's kind of how I see that $950 million all phasing in. I do believe, though, it's more front-end loaded. Like we're off to a pretty strong start. We talked about the 180, 181 that's paying dividends immediately. You talk about the rail-to-rail conversions that Walter asked about in Coby's area, those are delivering immediately. I sit here today with, I think, a high level of confidence that Lazaro will start delivering sooner rather than later. We've got the Reefers 250 already on. We don't have to wait for the Americold building to go going. That's going to be the catalyst, which is probably a year out but we can get those reefers going now. So maybe not give you a direct answer, but I would say more front-end loaded in terms of that number than back end. And then your part 2 was? You know what, Scott, 3, 4 months ago, I would have thought our ability to bring the speed at which we're bringing on synergies without pace sort of what's falling off the back end. What I didn't have in the calculus is some of the stuff we talked about with Canpotex and the Portland terminal and some of this increased softness with grain. I don't know when that pivot, I would say, as we move towards Q4, we've got a pretty -- I think we're set up well. This grain crop looks good. Canpotex can get their act together out in Portland and get some of that tonnage back running. Combined with we're not going to sit idle like where this team will continue to pile on these synergies over the next quarter. To me, that sort of sets up a nice inflection point.

Tony has been patient back there. I've been watching him persistently raising his hand and then Tom, go ahead. Tony will get you a mic. Tom, go ahead.

Tom Wadewitz from UBS. I wanted to get your thoughts on how we should weave in some of the comments on Mexico operations and labor? Obviously, you've shown tremendous scale in the U.S. and getting this deal done and working with STB. I think you've given us some optimism on what can happen in Mexico. But how much sensitivity is there in your service plan and in your plan if things don't go the way that you're anticipating in terms of crew size and some of the changes. So I think that's the first question. And then the second is for John on contractual constraints. How do we think about that? Is that really just in automotive where maybe you have to wait a bit in order to get more of a kicker on that. So one for Keith, one for John.

Let me take the first one, Tom. I would say this, the Mexican modernization of that agreement, if we break through there, that's incremental. That's not in our plan. It was never anticipated its initiative that John started in discussion relative to the opportunity. And we're doing our work to educate the union, we're doing our work to educate the government. We're doing our work to educate next the employees. But we've got to be patient. I'm talking to myself, not just to you because it is a different labor environment. So we've got to make sure that we do our job to make sure they understand what's in it for them because it represents significant change, much like what we did in our previous lives. It took 9 years to do the first [indiscernible] deal in the U.S. property. Wasn't on our railroad, was on another railroad. It took 4 years to get it down on CP with 9 years of experience doing it before. So again, this won't happen overnight. It's a journey. I've learned this. You can't force anything on anyone that they don't want. I can educate them. There's value in it for them. And if they're prepared for that change today, then that's an incremental gain that we'll get. But if they're not prepared today if they understand the value creation, it doesn't mean that as things change, it won't make sense tomorrow. So if we need to back away from the table, and just run the roadway the way we ran it and the way [indiscernible] ran it successfully and if we do our job selling that value proposition, it's more likely to happen than not. But again, I'm not banking on it.

Yes, Tom. I would say you're spot on. It was really that auto sector space that we felt the tail or sort of the opportunities would be more back-end loaded in terms of opportunities because of contracts. The reality is what we've realized in the first 75 days is given the state of the, I would say, automotive network, the amount of vehicles that are North America-wide, held ready to be shipped, combined with less than optimal operations across the North American rail network to move in cycle by levels has created nothing short of maybe a little bit of a crisis in the auto industry. And that's presented an opportunity because I think what we found is the auto companies are very keen to listen to a new model that Jonathan described. And I don't mean in the context of doing something different on their existing agreements, maybe so if they have the ability to squeeze out some opportunities. But I do believe it's pulling forward the opportunity to CPKC. I think the second point I'll make on that, Tom, and I've spent -- I did a blitz and met with every automotive OEM company and really talked through opportunities with them over the last couple of months and the amount of truck in short sea business that doesn't touch another railroad today that could be converted sooner to CPKC was staggering. That's the opportunity in the near term itself. And then as those contracts come up and we prove our service over the next couple of years, I think we're going to be poised to win. I'm just drawn from memory a little bit. I think in our STB submission, if you go back to that, I think we had $75 million in the auto space, Jonathan, you can correct me if I'm right or wrong. I think you saw Jonathan had $250 million number on the screen. And frankly, there's upside down the road to that.

I want to add a bit of color to that, probably from some of the scars I've got as an operating officer over my career. I remember the days well when I worked in Battle Creek, Michigan and when I worked in Flint, Michigan and when I worked in Detroit. I remember the drives to the OEMs and the complaints about car supply. And we were the original road. We had to have the empties back so we could spot them. We were held accountable for the damages. We were here accountable -- we were the ones that got screened at for the lack of a better term, if they didn't have a rail car to spot. It was not a very pleasant experience, especially when you couldn't control it. You're only as good as your supply chain partner, your interchange partner, and I'm not casting shade or a shadow on any of our partners. It's the system. It's the way the networks in the U.S. were built, 2 East, 2 West, 2 on the top. Nobody went cradle-to-grave really. That's what's so unique about this. So from the very beginning, when you can connect the bookings, you can connect the assembly plants. You can create your own car supply. You can create this supply chain of ecosystem of a closed loop. I've dreamed about that for 20 years. So to be able to sell that, the value in that, the complexity it eliminates, the excuses it takes away and the value we'll create for the first mover that takes advantage of that, it will make a difference for them. And it won't be all the market, to John's point, it might be 10%, it might be 15%. But I guarantee it will be the first step with the first mover advantage that they'll create unique value in their supply chain, they'll get their vehicles in a reliable, ratable way to those empty parking lots, they'll take market share if they've got a good product to sell to the consumer. And we're going to be the enabler to make that happen. So it's -- it will come. But I'm telling you, it was never possible without this transaction. It is today. And this is the only network that can do that. The only one, this one. And that's just one piece of the uniqueness of this. So Tony?

I wanted to ask you in general about regulation in light of the East Palestine and STB coming forward pretty soon with the reciprocal switching notice. And of course, interswitching in Canada and specifically, John, you did not, I think, mention the number of the revenue gains from grain. You talked a lot about all the new facilities and whatnot. And I'm wondering if it's because of the interswitching threat either to your margins or to BNSF coming in your territory as well as Brazilian market share gains into Mexico with corn and the GMO fight, which I don't understand at all. But if you could put those pieces together, let's see how that impacted, then, Keith, what do you think about the changing regulatory world we're in now?

Well, I'll be short on my words or I'll talk to. We have a very active regulatory environment. We have a regulator in the STB that I believe and I've learned, especially through this process we've gone through. They mean what they say. And their mandate is to create and provide and ensure that we have a strong, robust rail network system. So if the system is not working the way the system needs to work, this is a regulator that I think is willing to make changes. But at the same time, I do think it's a regulator that understands balance and unintended consequences. And I think that they want history, my view, my words, to reflect well on them and their decision. So I think it will be thoughtful. I think that we're probably more likely than less likely to have some kind of interswitching that's created some mechanism in the U.S. And as long as it's fair, that's truly all that I'm worried about because we live in that world in Canada today. And what I've learned over the years is if you provide good service to your customer, you provide good rates and there's that value proposition that we talked about. You don't have to worry about somebody coming in your backyard and taking your business from. I think a lot of customers, especially over the last several years have learned, sometimes the lowest rate is not the best decision. If you're buying something that you really can't count on is that really a value proposition. And those are the kind of partners that we love to do business with. That's why we pick our partners wisely, and we will with this network. We're going to methodically build this out. We're going to create value for the people we partner with, that choose to partner with us and we choose to partner with them. And when we help them win in their end markets because they can count on our service and our capacity, which we will protect, then we don't have to apologize for charging a little bit more money because, guess what, the quality is there. The value proposition is there. That's what this operating model, that's what this network has done and will do as we grow forward. So if the regulator feels that they need to do something, I'm going to respect it. I'm going to understand what the rules are, and we're going to do our job to make sure that we're not disadvantaged by it.

Yes. Tony, I just might add that if you think about those grain projects that kind of fit into -- and actually, if you think about the pie, the industrial development piece of that. They're a little longer-term horizon as you think about those opportunities. I think we pegged it and I didn't put it on the slide at about $150 million to $250 million in our grain space. That's about where we pegged it when we did our STB submission in that original buildup. I think there's upside in that, absolutely. As I said, I'm super pleased with sort of the initial reaction in terms of the amount of 8,500 foot development that wants to push its southbound, it's just going to take some time to see how that develops. And specifically, what the time line is we're able to bring that sort of onto the network.

Chris Wetherbee from Citi. So maybe first a question for you John, on the pricing side. So when you think about the 3% to 4%, it seems like maybe we're running a little bit above that as it stands right now. And as you look at the KCS opportunity, I know there was some -- a schedule of fees that was released, I think that goes into effect later this summer. But as you think about the pricing opportunity on some of the existing business on KCS, is that going to be a source of potential upside near term and then maybe one, Keith, for you as a follow-up. As you sort of think about the big picture and what the opportunities and challenges are, maybe specifically on the challenges side, what might be the most difficult part of the integration ahead of you guys?

Yes. So on the pricing front, yes, we're definitely running above that right now. Look, inflation is still 6% plus out there. So our mandate on pricing is above that right now and it remains there. And honestly, unless you see something different, we are holding -- trying to hold as firm as we can in that space as I look forward. I do believe, and that's why we've guided to 3% to 4%. We do see that sort of maybe back half of this year, beginning of next year, begin to moderate into that. More into that, what I would call typical range. On the challenges front and tell me, Chris, if I'm going down the right path here. But I've spoken to some of you about there are a few business units that as we've got in and really understood similar to back when Keith and Hunter came to CP, some areas of business that we're going to have to go backwards to go forward. We're going to have to work with some customers. And I can tell you, we've already had some tough discussions in some areas where there's opportunities that -- where they're consuming service and capacity, we've got to work with them to improve sort of what their books look like in our total portfolio. And frankly, that's never easy. But this is sort of a principle that's got to be growth, good growth. It can't be growth for growth's sake. So I'm not surprised those opportunities have presented themselves. Yes, it's frustrating and it's challenging, but we'll work through them just like we did in the past. And then you asked about KCS pricing. It's part of the business discipline area I had up on here. Yes, I do believe there's upside in that we will instill or we already have instilled from day 1, April 14, a mandate on how the marketing and sales arm within the KCS that focus in that areas thinks about those business disciplines and that's contract renewals and expectations in that area in line with what we expect to achieve.

And I think, Chris, on the challenge, I think the challenge is more reflective of maybe the political environment we live in today. Obviously, this industry is an industry we've had a pretty tough couple of years. Again, I said this last night or maybe this morning, I think a bit unfair, the perception, I don't agree with. I think this is a very safe industry. I think particularly biased about my own railroad, about our railroad. Obviously, we try to be the golden standard, but we're not perfect. This is not perfect technology. This is not a perfect process. So navigating that to make sure not that it hasn't always been important, it's always been first in an order of business, but ensuring that we've got all the eyes and cross all the Ts and exhaust everything we need to exhaust to make sure we keep our trains on the rail, we prevent all that we can prevent and we create and maintain the right culture of accountability when it comes to our obligations to provide service and safety access. And if we do that, what I hope and what I believe can be true is even if the industry is looked at in a certain way, we want to be looked to and respected because we do, do it a different way, and it is a different outcome. So ensuring that the unique way we approach it and the new outcome that we produce is respected and maintained. Because I do think that story matters. It's never mattered more than it matters today given the political environment that we're in.

It's Ken Hoexter from BofA. The 15%, Nadeem, I want to revisit the -- maybe a waterfall on the guide, maybe talk about your upside downside from there that you start off with 8% -- or upper single-digit revenue growth. What scale of the $5 billion revenue potential is built into that, just so we can understand the upside, downside kind of as you move? And can you clarify the $1 billion of synergies is still within that 3-year target. Is that still built into that same time frame? Or is that extended? And then secondly, can you dig into the cost synergies, of $320 million. Is that bringing KCS' network to CP standard of service? And obviously, they've seen some operational issues over time. Is there maybe still overhaul work to go there.

Ken, that was a lot. So I'd say that the $5 billion, as John and team talked about, that's kind of the entire pipeline. When you look at kind of his summary slide, I think that puts it in puts it well because at some point, the synergies it becomes, is it base growth, is it synergies, right? So let me put it this way. I think from a revenue synergy point of view, we see a number closer to $1.5 billion plus. When you look at the opportunity beyond kind of that $5 billion. That wasn't just synergies. That's kind of the entire pipeline. So let me just qualify it that way. What was your -- the third question? Yes. So absolutely, there's [indiscernible]. KCS has done a tremendous job of improving their cost structure. I'd say that they are still relatively early in terms of the PSR implementation. So there's opportunities. And I think that if you look at what we've always talked about combining these 2 networks, getting that longer length of haul. A lot of the traffic that was interchanged kind of at the Texas border, you're going to be running longer haul into Chicago, into Southwestern Ontario, into Alberta. The benefits of combining the networks and getting train length, getting the density of the network and getting that origin and destination, I think you're going to get benefits overall. So it's not necessarily just bringing it to the CP standard, but it's mining the benefits of one network is a big part of it. And yes, there's aspects of where we had better measures operationally that we've always talked about improving fuel efficiency, for example, train length, train speed. A lot of those operating measures are going to be bringing it to the CP standard so $300 million is what we see as overall cost synergies. That's embedded into the long-term guide.

Yes. If I could just add 1 more thing. And as we go through whiteboarding. We've done some whiteboarding with KCS not to the degree we need to. We've done the first round to take some blocking out of some terminals and different things like that. So we -- there's still opportunity in that space for us to get KCS, CP, [indiscernible] type of traffic moved around, blocked in the right location so we can bypass some of the yards. So that's just some of the things that I'd be working on.

Thank you. Alison Poliniak, Wells Fargo. First on the hydrogen locomotive. Is there any thoughts, I know it's early stages on how we should be thinking about the operational maintenance cost differences of the locomotives versus the diesel that you're targeting? And then second with CapEx outlook, how much of that is -- are you allocating towards sort of those growth type projects that we should be thinking about?

Sorry, the second part?

CapEx outlet, how much are you allocating towards those growth projects versus, say, pure maintenance?

So from a hydrogen cost point of view, I'd say it's early days, right? So we just got a few locomotives. I think the Justin talked about initiative with tech that will be a good opportunity for us to really kind of understand and get a test case of what that could look like. So from an operating cost point of view, I'd say, certainly wouldn't model anything and that will be an opportunity for us to understand. From a growth point of view, growth CapEx, the $2.7 billion rough numbers, I'd say, around 8% to 12%, 10% maybe the midrange over that 5-year period. Like I said, near term, there's going to be a lot more growth focus. We talked about the Dallas Auto compound, the Reefers that Jonathan talked about. So it's going to be a combination of rolling stock and investment in our room to grow 2.0 strategy to call it kind of growth capital. The other aspect when you think longer term, when we deliver this high single digit and maybe then some type of volume growth and revenue growth we will look at further kind of growth CapEx and a lot of it will be around rolling stock and then potentially locomotives. We haven't bought a new locomotive in some time. This transaction gives us an opportunity from a capital synergy to get benefits of locomotive synergies in near term, but maybe down the road, 2028 as the hydrogen experiment kind of continues and gets good traction. We'll look to spend more on locomotives, maybe hydrogen side, but also on the Tier 4 side. We're getting the clock signal from Chris and Ashley.

Bascome Majors, Susquehanna. You've given us an easy-to-follow view of what you're managing the business to tops down over the next 5 years. In the interim, how are you internally measuring what's working and what's not, year 2, year 3, so you can kind of change what's working. Sorry, change what's not working and confirm what it is. And ultimately, how are you going to communicate that to investors, your progress, will there be a structural way to do that?

As far as measures, we're a measure intensive rail network. So we have already set up common operational measures as well as revenue measures. So the same disciplines that we've measured CP with, we have applied to a CPKC network today. So we measure it now. And I think the report card to the investors is going to be the earnings that we drive, and it's going to be the business that we bring to this network. I don't know any other better way to share with you our progress. I can tell you, though, from an accountability standpoint to our Board of Directors, we've had a lot of shareholders that gave me feedback, that have given Investor Relations feedback and given our Board feedback. We made a commitment to these synergies. Our Board is going to hold us accountable. We're accountable and we're incented to make sure that we deliver on those synergies. And to me, that's just the starting point. That's table stakes. That's what we're going to do over the next 3-year period, 4-year period. We've given you a 5-year vision. I'm going to be extremely disappointed if we're not 50% higher than what we committed when I say $1 billion after year 3, if we're not at $1.5 billion by year 5, I'm going to be extremely disappointing. Again, there's a lot of work to get there. It's -- to John's point, it's car by car. It's initiative by initiative. We have to build some of these things out. But at the end of the day, this platform, this momentum has started and we fully expect, and I expect this team to exceed anything we committed to.

I'll just give you an example on the revenue. No. Yes. Yes. I'll give you an example on the revenue side -- so it's not my team like we have built out the playbook. Car by car, the opportunities we spoke to in like the rail to rail conversion. So I hold myself, my team accountable systematically go through everyone of the -- make sure we've exhausted every one of these opportunities. But it's not my team that's actually been measuring the success. We've created like an independent audit group led by our finance team to actually then fact check what we say in terms of what's the synergy. How are we categorizing it versus baseline growth or is it touching both networks. There's a very sustained process we've put in place, we've shared with our Board that then will report back to us on a monthly basis to actually say, all right, Brooks, here's how you and your team are doing in these areas. Same on the cost side.

And we've actually set up within our governance within our Board. Many of you in this room probably know Mr. Ed Hamberger. He's one of our very valued Board members, the integration committee for the Board, we're accountable to the board. We're accountable to the synergies and its potential. And as the master accountant, is the gatekeeper. We have rules of engagement. We have rules to qualify what is a synergy, what isn't a synergy? That we're going to be accountable to our Board as well as to our shareholders, too. So that, again, is something that's already started. So these are all levers that we use to drive the discipline, I think, in a very unique way within this company.

John Chappell, Evercore ISI. Probably better for Mike and Ian. But since they're not up there, I'm going to ask all of you guys, just the last one. The opportunities, that's tremendous, the way you've laid it out, your speed, your efficiency. We've heard anecdotally both from you and from shippers that they want to do business with you, but you don't want to oversell this network. You want to manage this integration very well. What's the gating factor? Is it long-term customer relationship? Is it geographic breadth? Are you using price to make sure you're getting the right freight on the network? And how do you plan on managing that over the next 3 to 5 years?

I think it's all of the above. That's exactly part of the formula. I'm not going to -- because I know the damage it does, allow John's team's ambition in the opportunities to put us in a position where we oversubscribe our network. We owe our existing customers, the capacity we've committed to them. We owe KCS, former KCS existing customers, we're going to honor all of that. We're going to grow responsibly on top of that. So this is a very methodical approach and plan and operating plan, we laid it out for the STB. It's in our submission. It's contingent upon the sequence of the sidings, the capacity that gets built, the bridge it gets built, the yards that get reworked, and I'm going to make sure we have tension. And when we look at maybe shifting opportunities, we're going to be part of the conversation. I'm going to be part of the conversation. My [indiscernible] is going to be part of the conversation, and we're going to weigh it against what we've committed to, what we have obligations to handle today. And can we grow and handle this today? Or do we need to wait because the reality is the beauty of this. Some of this business as we build this infrastructure is locked up in contracts. And I shared this last night. This is part of our playbook we've done before, building out the CP network. It doesn't stop us from having discussions about 2 years from now or a year from now. What percentage of your business makes sense for our network customer A or customer B, what do we need to build to prepare for? There's a couple of very large contracts we've enjoyed at Canadian Pacific that were part of our self-help initiatives that were 12-, 15-month plans. And again, to me, that discipline is important so we don't put ourselves in a position where we promised the sun, the moon and the stars and we irritate everybody. We make nobody happy and we get people a case, customers indoor, the naysayers perhaps may not want us to see because they have to compete against this to go to the regulator and say, these guys and these girls are not men and woman of their word. They're not doing what they said they would do. This is not creating public interest. We take that responsibility seriously. We think we can do both. I know we can do both if we do it responsibly, and that's what we'll do. We've done it before. We're going to continue to apply that formula, and that's how we're going to create long-term sustainable value, picking the partners, building the network out. That's how we'll become the most relevant railway in North America. You get one shot at doing this. We're not going to get a lot of do-overs. We're going to do this right. If it means we go slower, I'm going to slow it down. If it means that we can put our foot on the gas in certain lanes, we're going to put our foot on the gas in certain lanes. Just like that decision that we made to negotiate the Meridian piece. There's no way in the world we would have done that. If I would have thought in my heart for a moment that, that would deter our focus or we couldn't digest that and still do everything else we're doing. And in fact, I think they're going to complement that. So that's the approach that we're going to take in this company. So listen, let me kind of say a couple of things. I thought about this. So I want to first I started the session, thanking each of you for trusting us. I want to thank my team. you've been exposed to individuals, leaders in this industry that I think you've seen the depth and the breadth of their experience. Again, what I said last night, I never would have imagined in the past, the steps in my life that I would be sitting on the stage. But each of those steps prepared me to do my job in each of their steps and their histories have prepared them to do their job. We have a very, very unique team. We have a very, very unique franchise, and we have a very unique culture. And I can tell you without that, I wouldn't have the confidence and the conviction that I have to create this value. I couldn't do it without this team. I'm dependent upon them just as they're dependent upon me. We do this together. That's part of this -- that's part of this formula. The second people that I want to thank, I want to thank the KCS -- Former KCS Board of Directors. They had a choice. They trusted us. They trusted CP with their franchise, with their employees, with their customers, and I don't take that lightly. So I want to thank them for their trust and then I want to thank my Board of Directors. My Board of Directors as well for us to go to them with this case and this opportunity and the battle that we had to go through for them, again, to trust us to deliver on that is not something I take for granted or this team takes for granted, it comes with responsibility. And I can tell you, again, in closing to each of you, we've laid out a very compelling story. You have to make your own decisions. I know you have choices. But for those of you that choose us, that trust us, we will not take that for granted. We're going to remain hungry. We're going to remain humble, and we're going to work to create value for all shareholders and all stakeholders that are involved in this. And that's the beauty of this opportunity. It is unique. It's extremely unique. It is a one and only. But again, we hope you join us with the ride. If you do, I think you'll be handsomely rewarded. I know that we are committed, and I know that we have the potential to get this thing done. And the last thing, because I want to be a man of my word, what I told you I would do. I'm going to share with you and share with our employees, the final vote winner for our livery, not yet just going to give you some -- I'm going to tell you, and I did this for a reason as well, how much our shareholders' interest are aligned with our employees. So the winner, when I reveal this at a 5,327 employee votes, 40% chose this winner. And out of this room out of every vote we took, from our investors and our shareholders, I guess what the count was for the same locomotive. 40%, we can't make it up. That's the fact. So again, another closing point of legacy and shareholder alignment. So with that said, let's reveal the winning locomotive, and this will be in the future the way our locomotives will be paid at both in Mexico as well as in U.S. and Canada. He's got the button. That's it. Option 8, 40%. The second option, option 5 was second by a long way. So I kind of call it Ricky Bobby time. You're not first, you're last. That's the locomotive. So let's shake and bake, you guys have a safe trip going home. Thank you.