Canadian Pacific Kansas City Ltd (CP) 2022 Q4 法說會逐字稿

Good afternoon. My name is Gretchen and I will be your conference operator today. At this time, I would like to welcome everyone to Canadian Pacific Fourth Quarter 2022 Conference Call. The slides accompanying today's call are available at investor.cpr.ca. (Operator Instructions) I would now like to introduce Maeghan Albiston, Vice President, Capital Markets, to begin the conference.

下午好。我叫 Gretchen，今天我將擔任你們的會議接線員。在這個時候，我想歡迎大家參加加拿大太平洋 2022 年第四季度電話會議。今天電話會議的幻燈片可在 investor.cpr.ca 上獲取。 （操作員說明）我現在想介紹資本市場副總裁 Maeghan Albiston 開始會議。

Thank you, Gretchen. Good afternoon, everyone, and thank you for joining us today. Before we begin, I want to remind you that this presentation contains forward-looking information, and actual results may differ materially. The risks uncertainties and other factors that could influence actual results are described on Slide 2 in the press release and in the MD&A filed with Canadian and U.S. regulators. This presentation also contains non-GAAP measures, which are outlined on Slide 3. With me here today is Keith Creel, President and CEO; John Brooks, Chief Marketing Officer; and we're welcoming back Nadeem Velani, our Chief Financial Officer and CP's newest conductor. The formal remarks will be followed by Q&A. (Operator Instructions)

謝謝你，格雷琴。大家下午好，感謝您今天加入我們。在我們開始之前，我想提醒您，本演示文稿包含前瞻性信息，實際結果可能存在重大差異。新聞稿和提交給加拿大和美國監管機構的 MD&A 中的幻燈片 2 描述了可能影響實際結果的風險不確定性和其他因素。本演示文稿還包含幻燈片 3 中概述的非 GAAP 措施。今天和我在一起的是總裁兼首席執行官 Keith Creel；約翰·布魯克斯，首席營銷官；我們歡迎我們的首席財務官兼 CP 的最新指揮 Nadeem Velani 回來。正式發言後將進行問答。 （操作員說明）

It's now my pleasure to introduce President and CEO, Mr. Keith Creel.

現在我很高興介紹總裁兼首席執行官 Keith Creel 先生。

Thanks, Maeghan. Let me start by thanking our 12,000 strong CP family for their efforts that have allowed us to produce these results in the fourth quarter and certainly over the course of 2022, and I can tell you what I'm most proud of, which is I know is only enabled by their individual and collective efforts is the safety performance that the team produced in 2022, producing our lowest ever FRA accident frequency ratio in the company's history and our 17th consecutive year of being best-in-class, best in the industry as it's related to reportable train derailments in the industry, so to be extremely proud of. And then to Maeghan's point, our bench is only getting better. I'm (inaudible) that we've got our CFO, Mr. Nadeem Velani, who adds another background into his title, Chief Financial Conductor Officer, CFC, CFO, whatever you want to call it, he's had a very rich experience. He's obviously his business acumen from his time in Harvard has increased, but most importantly, his railroad acumen and ability to apply this business talent has increased with the railroad now that he's obtained the last 5 years, it seems like probably 5 years and there is 25 below. The last 5 months specifically out on the railroad boots on the ground and the ballast, spending time not only getting conductor qualified, but also riding trains, coming the mechanical department time with the track department time in the locomotive department, all the functions that truly make this company run day in and day out by the great professional railroaders that we have the men and women that make CP what it is. So with that said, again, welcome back. Nadeem glad to get you back in the seat. And I also want to commend Chris and Maeghan and Ian for the great work they did when they were going in your absence. So they certainly made you proud.

謝謝，梅根。首先，我要感謝我們 12,000 名強大的 CP 大家庭的努力，讓我們能夠在第四季度，當然還有 2022 年取得這些成果，我可以告訴你我最引以為豪的是什麼，我知道團隊在 2022 年取得的安全績效只有通過他們個人和集體的努力才能實現，創造了公司歷史上最低的 FRA 事故頻率比，並且我們連續第 17 年成為同類最佳、行業最佳它與行業中可報告的火車脫軌有關，因此感到非常自豪。然後就 Maeghan 的觀點而言，我們的替補席只會越來越好。我（聽不清）我們有我們的首席財務官 Nadeem Velani 先生，他在他的頭銜中增加了另一個背景，首席財務官，CFC，CFO，無論你想怎麼稱呼它，他都有非常豐富的經驗。很明顯，他在哈佛期間的商業頭腦有所提高，但最重要的是，他在鐵路方面的敏銳度和應用這種商業才能的能力隨著鐵路的發展而提高，因為他已經獲得了過去 5 年的經驗，看起來可能有 5 年，並且有25 以下。最近 5 個月專門在地面和道砟上訓練鐵路靴，花時間不僅獲得列車員資格，還坐火車，機械部門時間和軌道部門時間在機車部門，所有功能真正讓這家公司日復一日地由偉大的專業鐵路工人運營，我們擁有使 CP 成為現實的男男女女。話雖如此，再次歡迎回來。 Nadeem 很高興讓您回到座位上。我還要讚揚 Chris、Maeghan 和 Ian 在您缺席期間所做的出色工作。所以他們當然讓你感到自豪。

Now moving on to the results. In the fourth quarter, we produced revenues of $2.5 billion and operating ratio of 59.1% and core EPS of $1.14. For the year, total revenues were up 10%. We delivered an operating ratio of 61.4%, core EPS of $3.77, which was flat versus last year. But we knew from the beginning '22 would be a year of 2 halves, and particularly, we had high expectations for the fourth quarter, which we are ready and resource to meet. Unfortunately, there were some factors that impeded our fourth quarter to some degree. But with that said, I'm very pleased with how we began the year. Strong revenue and operating performance in January which carries -- is going to carry great momentum into the first quarter of this year and as we play out in 2023. We're in a great place from a network and resource perspective, in spite of a historically tight labor market in '22. It was a record year of hiring at CP. We added more than 1,600 conductors over the course of last year, and we made some significant progress with our labor agreements with the recent tentative collective agreements, both with the Unifor as well as the BLET both of those agreements are out for ratification specific to the BLET and this has to do with the consolidated territories, which are obviously contingent upon the STB approving our merger application, this agreement with the BLET which are the locomotive engineers and the earlier agreement that we signed with Smart, the conductors for the KCS in Kansas and Missouri, they're both progressively hourly agreements, which will improve our operational flexibility as well as predictability in our employees' quality of life.

現在繼續討論結果。第四季度，我們實現了 25 億美元的收入，運營率為 59.1%，核心每股收益為 1.14 美元。今年，總收入增長了 10%。我們的營業率為 61.4%，核心每股收益為 3.77 美元，與去年持平。但我們從一開始就知道 22 年將是兩半的一年，特別是我們對第四季度寄予厚望，我們已準備好並有資源來滿足。不幸的是，有一些因素在某種程度上阻礙了我們的第四季度。但話雖如此，我對我們今年的開端感到非常滿意。 1 月份強勁的收入和運營業績將帶來 - 將在今年第一季度和 2023 年發揮強勁勢頭。從網絡和資源的角度來看，我們處於一個很好的位置，儘管22 年勞動力市場歷來緊張。這是 CP 創紀錄的一年。去年，我們增加了 1,600 多名指揮，我們在勞資協議方面取得了一些重大進展，包括最近與 Unifor 和 BLET 達成的臨時集體協議，這兩項協議都需要批准，具體針對BLET，這與合併領土有關，這顯然取決於 STB 批准我們的合併申請，與機車工程師 BLET 達成的協議以及我們與堪薩斯州 KCS 的指揮 Smart 簽署的早期協議和密蘇里州，它們都是按小時遞增的協議，這將提高我們的運營靈活性以及員工生活質量的可預測性。

Again, it's an agreement that gives us flexibility in turn, enables our employees to realize higher pay, scheduled jobs and a better quality of life compared to a traditional labor agreement as in the U.S. rail space. Parts of these agreements, of course, remain subject to the STB's approval of the merger, but we certainly see additional opportunities down the road pending and assuming depending upon an approval to create a framework for the benefit of all employees in a combined CPKC network and also obviously, the reliability benefits in service that this agreement will provide for a combined CPKC. We'll say a couple of words about the transaction. On the CPKC front, both of our teams at both CP and KCS are hard at work preparing to seamlessly integrate these 2 iconic companies. I can tell you there's been a ton of tremendous work that has been accomplished that teams at both railways to ensure the smooth transition. I'm extremely pleased last week also to note the release of the final environmental impact statement.

同樣，與美國鐵路領域的傳統勞動協議相比，這是一項反過來賦予我們靈活性的協議，使我們的員工能夠實現更高的薪酬、定期工作和更好的生活質量。當然，這些協議的部分內容仍然取決於 STB 對合併的批准，但我們肯定會看到更多的機會在等待和假設，這取決於批准創建一個框架，以造福合併的 CPKC 網絡中的所有員工和同樣明顯的是，該協議將為聯合 CPKC 提供的服務可靠性優勢。我們將就交易說幾句話。在 CPKC 方面，我們在 CP 和 KCS 的團隊都在努力工作，準備無縫整合這兩家標誌性公司。我可以告訴你，兩條鐵路的團隊已經完成了大量的工作，以確保順利過渡。上週我也非常高興地註意到最終環境影響聲明的發布。

Certainly, that's no small feat and huge quantum avoid by the STB to get that done in the meticulous type of way that they handled not only just the environmental impact statement, but in handling this entire file. So I commend the team for the work they did throughout the process, as I've said, the STB has been very thorough and they're meticulous and we continue to eagerly anticipate their decision on our merger applications, which we expect this quarter. On the environmental front, couple of words. CP continues to also to make strong progress in this space, specifically on sustainability. I'm pleased to see that the company's efforts continue to be recognized for the first time in our history, CP was named to the Dow Jones Sustainability World Index, which is a tremendous achievement for the entire CP family that we can be proud of. We were also named to the Dow Jones Sustainability North American Index for the third consecutive year and finally named to the CDP A list, which is an absolute reflection of our commitment to comprehensive comment disclosure at Canadian Pacific. We continue to demonstrate our leadership and commitment to a more sustainable future, also through our hydrogen locomotive project, which is unique in the industry. In late October, that project had a significant milestone when the locomotive performed its second mainline test and first revenue move and are seen to experience the second hydrogen locomotive, which is the GP38, 4-axle DC locomotives over the next month, which will be making its debut so to speak, as we get it out rolling and operating, so we can work the bugs out of it.

當然，STB 以一絲不苟的方式完成這項工作絕非易事，他們不僅處理環境影響聲明，還處理整個文件。因此，我讚揚團隊在整個過程中所做的工作，正如我所說，STB 非常徹底，他們一絲不苟，我們繼續熱切期待他們對我們合併申請的決定，我們預計本季度。在環境方面，幾句話。 CP 繼續在這一領域取得重大進展，特別是在可持續性方面。我很高興看到公司的努力繼續得到認可，這是我們歷史上第一次，CP 入選道瓊斯可持續發展世界指數，這對整個 CP 家族來說是一項巨大的成就，我們可以為此感到自豪。我們還連續第三年入選道瓊斯可持續發展北美指數，並最終入選 CDP A 名單，這絕對反映了我們在 Canadian Pacific 全面評論披露的承諾。我們繼續展示我們的領導力和對更可持續的未來的承諾，也通過我們在行業中獨一無二的氫機車項目。 10 月下旬，該項目具有重要的里程碑意義，該機車進行了第二次幹線測試和首次收入轉移，並有望在下個月體驗第二台氫氣機車，即 GP38、4 軸直流機車，這將是可以說是首次亮相，因為我們可以滾動和運行它，所以我們可以解決它的錯誤。

So let me close by saying '23, we're poised been ready to roll. It's going to be a very special year for 2-story company. We can't wait to get to work and buying these 2 great companies and creating value for our customers, our employees in the North American economy. We're focused on executing the plan and I'm very pleased with the start that we've had this year to what I expect will be a historic year. So with that said, I'm going to hand it over to John to bring some color on the markets and then Nadeem will wrap up elaborating on the numbers, and then we'll open it up to Q&A.

所以讓我結束時說'23，我們已經準備好開始了。對於 2 層公司來說，這將是非常特殊的一年。我們迫不及待地開始工作，收購這兩家偉大的公司，為我們的客戶、我們在北美經濟中的員工創造價值。我們專注於執行計劃，我對今年的開端感到非常高興，我預計這將是歷史性的一年。因此，話雖如此，我將把它交給約翰，為市場帶來一些色彩，然後納迪姆將結束對數字的詳細闡述，然後我們將開放它進行問答。

All right. Thank you, Keith, and good afternoon, everyone. So as Keith mentioned, the fourth quarter wasn't without its challenges as certainly customer supply chains and the winter weather we faced impacted our volumes. We ultimately fell a little short of our RTM growth we expected to deliver for the year. However, I'm pleased, as Keith said, to the start to 2023 and believe we are uniquely set up for the year. I'll take a look at our fourth quarter results now. Total revenues were up 21% on the quarter. Volumes were up 8% on the quarter, while FX and fuel combined to be a 15% tailwind. The pricing environment continues to be strong. Now taking a closer look at the fourth quarter and the 2022 revenue performance, I'll speak to the results on a currency-adjusted basis. Grain volumes were up 27% on the quarter, while revenues were up 42%. Working in concert with our grain supply chain partners, CP set new all-time monthly tonnage record for shipping grain and grain products in October, and we delivered our second largest quarter ever for grain volumes.

好的。謝謝你，基思，大家下午好。正如 Keith 提到的那樣，第四季度並非沒有挑戰，因為客戶供應鍊和我們面臨的冬季天氣肯定影響了我們的銷量。我們最終略低於我們預計今年實現的 RTM 增長。然而，正如 Keith 所說，我對 2023 年的開始感到高興，並且相信我們為這一年做好了獨特的準備。我現在來看看我們的第四季度業績。本季度總收入增長了 21%。本季度交易量增長了 8%，而外彙和燃料加在一起帶來了 15% 的增長。定價環境繼續強勁。現在仔細看看第四季度和 2022 年的收入表現，我將在貨幣調整的基礎上談談結果。本季度穀物產量增長了 27%，而收入增長了 42%。 CP 與我們的糧食供應鏈合作夥伴通力合作，在 10 月份創下了糧食和糧食產品運輸的月度噸位新紀錄，並且我們實現了有史以來第二大糧食運輸量季度。

Our newest 8,500-foot high-efficient elevator, a Richardson greenfield facility in Saskatchewan started receiving grain in December. And in 2023, we expect to be over 50 origin elevators that will be 8,500 foot capable, enabling us to continue to move record amount of grain more efficiently. On the U.S. front, we saw strong demand in Q4 for both our export and domestic markets. I fully expect our grain franchise to continue to be an area of strength as we move through 2023. On the potash front, volumes were down 2% on the quarter, but we ended up 9% on the year. While we saw volumes for export potash impacted by weather challenges, the long-term outlook for potash remains strong and unchanged. I expect to see similar growth in 2023 as we saw last year in potash.

我們最新的 8,500 英尺高效電梯是位於薩斯喀徹溫省的 Richardson 綠地設施，於 12 月開始接收糧食。到 2023 年，我們預計將有超過 50 台運力達 8,500 英尺的起運電梯，使我們能夠繼續更高效地運送創紀錄數量的穀物。在美國方面，我們看到第四季度對我們的出口和國內市場的強勁需求。我完全預計到 2023 年，我們的穀物特許經營權將繼續成為一個優勢領域。在鉀肥方面，本季度銷量下降 2%，但全年同比增長 9%。雖然我們看到鉀肥的出口量受到天氣挑戰的影響，但鉀肥的長期前景依然強勁且不變。我預計 2023 年會出現與去年鉀肥類似的增長。

And to close out the bulk business, coal volumes were down 25% in the quarter and declined 18% on the year. An outage at Teck Elkview mine in September impacted volumes through much of the fourth quarter and lasted longer than we anticipated. We lost over 100 trains in the fourth quarter due to these challenges. Looking ahead in coal, given the disruptions we faced in 2022, combined with a solid macro demand environment, we have a good setup from a compare standpoint as we move into 2023. So when I look at our bulk franchise, which makes up 40% of our book, it is an extremely well positioned in 2023, whether it's through strong demand fundamentals, favorable compares or both, we have a setup to deliver double-digit growth in this less macro sensitive portion of our book of business. Moving on to merchandise. The Energy, Chemicals & Plastics portfolio saw volumes grow 4%. We saw increased volumes in our DRUbit during the quarter as well as plastics from our new IPL petrochemical facility, single served by CP in the Alberta Heartland. Despite macro uncertainty, I expect ECP volumes to remain resilient as we start off 2023.

為了關閉散貨業務，本季度煤炭銷量下降了 25%，同比下降了 18%。 9 月份 Teck Elkview 礦的停電影響了第四季度大部分時間的產量，並且持續時間比我們預期的要長。由於這些挑戰，我們在第四季度失去了 100 多列火車。展望煤炭行業，考慮到我們在 2022 年面臨的中斷，再加上穩定的宏觀需求環境，從比較的角度來看，我們在進入 2023 年時擁有良好的準備。所以當我看我們的散裝特許經營權時，它佔 40%在我們的書中，它在 2023 年處於非常有利的位置，無論是通過強勁的需求基本面、有利的比較還是兩者兼而有之，我們都可以在我們的業務簿中這個宏觀敏感度較低的部分實現兩位數的增長。繼續商品。能源、化學品和塑料產品組合的銷量增長了 4%。我們在本季度看到我們的 DRUbit 以及我們新的 IPL 石化設施的塑料產量增加，該設施由 CP 在阿爾伯塔腹地提供服務。儘管存在宏觀不確定性，但我預計 ECP 交易量在 2023 年開始時將保持彈性。

Forest products were down 4%, while revenues were up 17%. Despite the Q4 decline in volume, this caps a record year for CP and forest products. While housing starts are expected to decline in 2023, CP's demand is softer compared to our record 2022. Our lumber, panel and pulp volumes have stabilized, and we are working with our customers to maximize new market opportunities. Automotive revenues were up 27%, while volumes were up 11% on the quarter. On our Q3 call, I talked about over 7,000 vehicles sitting at CP origins waiting for final components. I'm pleased to see that we are seeing definite improvement in parts supply and more vehicles are moving towards shippable status. We have also begun moving the new Ford business that started up January 1 and I'm pleased with the startup of our new auto compounds at both Edmonton and Bensenville. Looking ahead, demand for finished vehicles remains fairly strong, and we are working with our customers to replenish inventories at dealerships across our network. Those fundamentals, combined with the new business we brought on, has positioned our auto business well for 2023.

林產品下降了 4%，而收入增長了 17%。儘管第四季度銷量下降，但這為CP和林產品創造了創紀錄的一年。雖然預計 2023 年房屋開工率將下降，但與我們創紀錄的 2022 年相比，CP 的需求更為疲軟。我們的木材、面板和紙漿產量已經穩定，我們正在與客戶合作以最大限度地利用新的市場機會。汽車業務收入增長 27%，銷量環比增長 11%。在我們第三季度的電話會議上，我談到了 7,000 多輛汽車坐在 CP 原點等待最終組件。我很高興看到我們看到零部件供應明顯改善，更多車輛正朝著可發貨狀態發展。我們還開始搬遷 1 月 1 日開始的新福特業務，我很高興我們在埃德蒙頓和本森維爾的新汽車化合物的啟動。展望未來，對成品車的需求仍然相當強勁，我們正在與客戶合作，在我們網絡的經銷商處補充庫存。這些基本面，加上我們開展的新業務，使我們的汽車業務在 2023 年處於有利地位。

Now finally, on the intermodal side of the business, quarterly volumes were up 17%, where revenues were up 29%. Despite demand coming off record levels that we've seen in the past few years, our unique market wins have differentiated us in International Intermodal with volumes up more than 40% in the quarter. With favorable compares to the first half of 2023, driven by new business that started out the back half of 2022 and the continued port expansion of the Port of St. John, we are well positioned to continue to outpace the industry in this space. Port of St. John continues to see tremendous growth, eclipsing 150,000 TEUs in 2022, more than a 70% increase year-over-year. Our partners at DP World are in the midst of deploying super new post-Panamax cranes, and this, coupled with the new birth and track at the port will result in a doubling of the capacity by April 1. The Port of St. John remains on plan to grow its total capacity to 800,000 TEUs in 2024. On the domestic side, although demand with our core retail customers have come down from their recent highs, our temperature controlled products continue to be strong.

最後，在業務的多式聯運方面，季度銷量增長了 17%，收入增長了 29%。儘管需求低於我們在過去幾年中看到的創紀錄水平，但我們獨特的市場胜利使我們在國際多式聯運方面脫穎而出，本季度的銷量增長了 40% 以上。與 2023 年上半年相比，在 2022 年下半年開始的新業務和聖約翰港的持續港口擴張的推動下，我們有能力在這一領域繼續超越行業。聖約翰港繼續保持巨大增長，到 2022 年將超過 150,000 個標準箱，同比增長超過 70%。我們在 DP World 的合作夥伴正在部署超級新的後巴拿馬型起重機，再加上港口的新誕生和軌道，到 4 月 1 日，容量將翻一番。聖約翰港仍然計劃在 2024 年將其總產能增加到 800,000 標準箱。在國內方面，儘管我們核心零售客戶的需求已從近期高位回落，但我們的溫控產品繼續保持強勁勢頭。

CP is a leader in the temp controlled space across Canada and we look forward to paving the way into new markets across North America with CPKC should the STB approve our merger. We are continuously working hard with a variety of customers on test moves on an interline basis, which are going very well. We recently completed a southbound test shipment from the U.S. Midwest market to Laredo carrying temp controlled products in about 3 days. which is competitive with a single-driver truck. Further, we've also been testing the northbound lanes focused on those service sensitive products to markets across the upper Midwest, U.S. and into Canada.

CP 是加拿大溫控領域的領導者，如果 STB 批准我們的合併，我們期待與 CPKC 一起為進入北美的新市場鋪平道路。我們一直在與各種客戶一起努力，在聯運的基礎上進行測試，進展順利。我們最近在大約 3 天內完成了從美國中西部市場向拉雷多運送溫控產品的南行測試。這與單人駕駛卡車具有競爭力。此外，我們還一直在測試北行車道，重點關注那些服務敏感產品，這些產品通往美國中西部北部和加拿大的市場。

These markets are 100% served by trucks today and present a tremendous conversion opportunity for the combined CPKC to provide truck-competitive single-line service pending the STB merger of our -- approval of our merger. So let me close by saying, as I look out at 2023, with the broader macro environment certainly remaining uncertain, CP strong bulk franchise, our self-help business wins and anticipated opportunities as part of CPKC have us in an advantageous position. My team is focused on staying close to our customers and selling the value of our service. So with that, I'll finish up and pass it over to Nadeem.

今天，這些市場 100% 由卡車提供服務，並為合併後的 CPKC 提供巨大的轉換機會，以在我們的 STB 合併批准我們的合併之前提供具有卡車競爭力的單線服務。因此，讓我在結束時說，展望 2023 年，在更廣泛的宏觀環境肯定仍然不確定的情況下，CP 強大的散裝特許經營權、我們的自助業務獲勝以及作為 CPKC 的一部分的預期機會使我們處於有利地位。我的團隊專注於貼近客戶並推銷我們服務的價值。因此，我將完成並將其傳遞給 Nadeem。

Thanks, John, and good afternoon. Great to be back and speaking to the results of the CP team period this quarter. Some of you are aware of being out of the office in the field in the last 5 months. It's been a very energizing time on the railroad. And I'm thrilled to see the passion and pride from our people firsthand. I had a chance to spend a few months in our world-class training center, getting conductor qualified along with a strong pipeline of new railroaders that will enable us to deliver on our growth agenda safely and efficiently. Let me take a moment just to thank 4 specific trainers that help me, Jeff Mclean, Nate Blunt, Mark Mariam and Joe (inaudible) who shared their collective 140 years of rail experience with me, and I'm very grateful. I too also want to thank Maeghan Albiston and Ian Gray for their support and backfilling for me and doing a wonderful job. So thank you to 2 of you.

謝謝，約翰，下午好。很高興能回來談論本季度 CP 團隊期間的結果。你們中的一些人知道在過去 5 個月內不在現場的辦公室。在鐵路上，這是一段充滿活力的時光。我很高興親眼看到我們員工的熱情和自豪感。我有機會在我們世界一流的培訓中心度過了幾個月，獲得了列車員資格以及強大的新鐵路工人管道，這將使我們能夠安全有效地實現我們的增長議程。讓我花點時間感謝 4 位幫助過我的培訓師，Jeff Mclean、Nate Blunt、Mark Mariam 和 Joe（聽不清），他們與我分享了他們 140 年的鐵路經驗，我非常感激。我也想感謝 Maeghan Albiston 和 Ian Gray 對我的支持和支持，他們做得很好。所以謝謝你們中的兩個。

Now looking at the quarter, the adjusted operating ratio came in at 59.1%. Taking a closer look at a few items on the expense side, I'll speak to the variances on FX-adjusted basis as usual. Comp and benefits expense was up $1 million versus last year. Increased volume and wage inflation were largely offset by lower accruals for incentive and share-based compensation. Fuel expense increased $153 million or 62%, primarily as a result of higher fuel prices, which were up 43% on the quarter versus last year and roughly flat sequentially. Materials expense was up 33% or $17 million as a result of cost inflation, largely in non-locomotive fuel. Equipment rents were up 43% or $13 million as a result of higher car hire payments resulting from stronger volumes in intermodal and automotive. Depreciation expense was $219 million, an increase of $9 million as a result of a higher asset base. Purchased services came in at $310 million, an increase of $54 million or 21% when adjusted for acquisition costs.

現在來看本季度，調整後的營業率為 59.1%。仔細看看費用方面的一些項目，我將像往常一樣討論外匯調整後的差異。與去年相比，薪酬和福利支出增加了 100 萬美元。銷量增加和工資上漲在很大程度上被激勵和基於股份的薪酬的應計費用減少所抵消。燃料費用增加 1.53 億美元或 62%，這主要是由於燃料價格上漲，本季度與去年同期相比上漲 43%，環比基本持平。由於成本膨脹，材料費用增加了 33% 或 1700 萬美元，主要是非機車燃料。設備租金上漲 43% 或 1300 萬美元，原因是多式聯運和汽車業務量增加導致租車費用增加。折舊費用為 2.19 億美元，由於資產基礎增加而增加了 900 萬美元。購買的服務收入為 3.1 億美元，按購置成本調整後增加了 5400 萬美元或 21%。

The main driver of the increase was higher pickup in delivery costs and other third-party services. Moving below the line. The equity pickup from KCS in the fourth quarter was $287 million when adjusted for KCS' acquisition-related costs, purchase accounting and a gain KCS had from an interest rate hedge unwind. Other components of net periodic benefit recovery increased $6 million, reflecting higher discount rates compared to 2021. Net interest expense was up $32 million versus last year as a result of a higher debt balance related to the KCS acquisition in Q4 2021. Income tax expense decreased $49 million, excluding KCS related items and the reversal of a previous provision for an uncertain tax item, the effective tax rate was approximately 17.5% on the quarter. Looking ahead, I expect the CP stand-alone tax rate in 2023 to be approximately 24%. Rounding out the income statement, core adjusted EPS was $1.14 in the quarter. On the year, core EPS was $3.77, flat versus 2021.

增長的主要驅動因素是交付成本和其他第三方服務的增加。移動到線下。根據 KCS 的收購相關成本、採購會計和 KCS 從利率對沖平倉中獲得的收益進行調整後，第四季度從 KCS 獲得的股權收益為 2.87 億美元。淨定期收益回收的其他組成部分增加了 600 萬美元，反映了與 2021 年相比更高的貼現率。由於 2021 年第四季度與 KCS 收購相關的債務餘額增加，淨利息支出比去年增加了 3200 萬美元。所得稅費用減少4900 萬美元，不包括 KCS 相關項目和之前對不確定稅項的準備金的逆轉，本季度的有效稅率約為 17.5%。展望未來，我預計 2023 年的 CP 單獨稅率約為 24%。將損益表四捨五入後，本季度核心調整後每股收益為 1.14 美元。這一年，核心每股收益為 3.77 美元，與 2021 年持平。

We continue to generate strong cash flow with cash provided by operating activities of $4.1 billion in 2022. We continue to reinvest in the railroad and finished the year with a capital spend of just under $1.6 billion. I anticipate a similar level of investment for CP stand-alone in 2023. In the fourth quarter, we received dividends from KCS totaling USD 415 million, which were utilized to pay down short-term debt. Over the course of 2022, we received a total of USD 880 million or approximately CAD 1.2 billion in dividends from cash flow in excess of the capital KCS has invested in their railroad. Inclusive of the dividends, we generated CAD 2.7 billion in free cash flow. Over the course of 2022, we repaid more than $1.6 billion in debt. Pro forma leverage ended the year at 3.8x, and we remain committed to returning to our target leverage. Looking at the year ahead, despite uncertainties with the macro environment, inflation and interest rates, I couldn't be more excited. We have a transformational merger with Kansas City Southern and a strong pipeline of opportunities for the team to deliver.

我們繼續產生強勁的現金流，2022 年經營活動提供的現金為 41 億美元。我們繼續對鐵路進行再投資，並以略低於 16 億美元的資本支出結束了這一年。我預計 2023 年 CP 獨立投資水平將達到類似水平。第四季度，我們從 KCS 獲得了總計 4.15 億美元的股息，用於償還短期債務。在 2022 年期間，我們從超過 KCS 投資於其鐵路的資本的現金流中獲得了總計 8.8 億美元或約 12 億加元的股息。包括股息在內，我們產生了 27 億加元的自由現金流。在 2022 年期間，我們償還了超過 16 億美元的債務。年底的備考槓桿率為 3.8 倍，我們仍然致力於恢復到我們的目標槓桿率。展望未來一年，儘管宏觀環境、通脹和利率存在不確定性，但我感到無比興奮。我們與堪薩斯城南部進行了轉型合併，並為團隊提供了大量機會。

With that, let me turn it back to Keith to wrap things up.

有了這個，讓我把它轉回基思來總結一下。

Okay. Thank you for your comments to color both John and Nadeem. So operator, let me open up the line for questions.

好的。感謝您對 John 和 Nadeem 的評論。那麼接線員，讓我打開問題熱線。

(Operator Instructions) Your first question comes from Jon Chappell from Evercore ISI.

（操作員說明）您的第一個問題來自 Evercore ISI 的 Jon Chappell。

John, I know that you guys clearly didn't put out any guidance targets for all the obvious reasons. But when you hear you walk through all the different segments, bulk being 40%, double-digit volume growth, the tailwinds on auto, et cetera, et cetera. When you look to '23 on a CP stand-alone basis, understanding the macro headwinds, does it seem to you that you can have volume growth that's not just at or better than GDP, but substantially better, almost like a multiple of that, just given all your idiosyncratic tailwinds that you have on your own network?

約翰，我知道你們出於所有顯而易見的原因顯然沒有提出任何指導目標。但是當你聽到你走過所有不同的細分市場時，體積是 40%，兩位數的銷量增長，汽車的順風等等。當你在 CP 獨立的基礎上看 23 年時，了解宏觀逆風，在你看來你的數量增長是否不僅可以達到或優於 GDP，而且要好得多，幾乎是它的倍數，只是給了你自己網絡上所有特殊的順風？

Well, Jon, look, I definitely see a path to growth. You know what? We're unique in that 40% of our book is our bulk franchise, and I'm leaning heavy on that. As you said, certainly the macro environment is uncertain, and we're not going to get too far over our SKIs and trying to predict what that's going to look like. But the Canadian grain franchise is set up well. Canpotex gets through their contract negotiations with China and India, we believe there's a path to a double-digit growth opportunity there. And as I said, Teck, we had a tough year between the weather and some of the mine challenges they had. There's, I think, a significant upside in a good market demand environment in the metallurgical coal area. So if you sort of build that out, Jon, and you can make your own predictions on sort of where those more industrial and consumer markets to go, it definitely leads to a path to some growth.

好吧，喬恩，你看，我肯定看到了一條成長之路。你知道嗎？我們的獨特之處在於我們的書有 40% 是我們的批量特許經營權，我非常依賴這一點。正如你所說，宏觀環境當然是不確定的，我們不會在我們的 SKIs 上走得太遠，也不會試圖預測它會是什麼樣子。但加拿大穀物專營權建立得很好。 Canpotex 完成了與中國和印度的合同談判，我們相信那裡有通往兩位數增長機會的道路。正如我所說，泰克，我們度過了艱難的一年，因為天氣和他們遇到的一些地雷挑戰。我認為，冶金煤領域良好的市場需求環境有很大的好處。因此，如果你把它構建出來，喬恩，你可以對那些更多的工業和消費市場的發展方向做出自己的預測，這肯定會導致一些增長。

And our next question comes from Tom Wadewitz from UBS.

我們的下一個問題來自瑞銀的 Tom Wadewitz。

Wanted to see -- I think you've given us quite a bit of color over time about the opportunities for growth when you get the approval on with KCS. Is anything changing? Or is there anything that's kind of new and developing as we wait for that STB decision? Or is it pretty stable and it's kind of the same pipeline same opportunities that you've been talking about?

希望看到——我認為隨著時間的推移，當你獲得 KCS 的批准時，你已經給了我們很多關於增長機會的色彩。有什麼變化嗎？或者在我們等待 STB 決定的過程中有什麼新的和發展中的東西嗎？或者它是否非常穩定並且與您一直在談論的機會相同？

Tom, I'll just say this in short. Number one, I can't get ahead of the STB. The STB is the authority here and all explain we need there, the stamp of approval. Now I do think that our facts are very strong and it's a very compelling value creation for all stakeholders and enables growth and all the things that we have said all along remain to be true, but ultimately, they have to decide and when they do. Nothing has at all needed our optimism for the opportunities and all the discussions we've had continued upon that approval, we have an opportunity rich list that we're going to be able to execute that, we're looking forward to get to work on.

湯姆，我只是簡單地說一下。第一，我無法超越 STB。 STB 是這裡的權威，所有我們需要的解釋，批准印章。現在我確實認為我們的事實非常有力，這對所有利益相關者來說都是一個非常引人注目的價值創造，可以促進增長，我們一直以來所說的所有事情仍然是真實的，但最終，他們必須決定什麼時候做。沒有什麼需要我們對機會和我們在批准後繼續進行的所有討論持樂觀態度，我們有一個機會豐富的清單，我們將能夠執行它，我們期待著開始工作在。

Our next question comes from Chris Wetherbee from Citigroup.

我們的下一個問題來自花旗集團的 Chris Wetherbee。

I think as well out into 2023 and thinking about sort of the combination of this business, I would guess maybe curious your thoughts on the ability to improve the OR from what was obviously a bit of a transition year or a tale of 2 halves, as you mentioned, Keith, in 2022. So I don't know, team, if you be willing to sort of think about on a CP-specific basis above the line, your thoughts around either EBIT growth or OR improvement from where we finished 2022.

我認為以及到 2023 年並考慮這種業務的某種組合，我想您可能會好奇您對提高 OR 的能力的想法，這顯然是一個過渡年或一個兩半的故事，因為Keith，你提到了 2022 年。所以我不知道，團隊，如果你願意在特定於 CP 的基礎上考慮，你對 EBIT 增長或 2022 年結束時的改進的想法.

Let me size it up like this, Chris. Let me start by saying the 61.4% is not a CP standard. So that is an absolute fact or the belief. We look forward, there's a lot of moving parts. Obviously, we don't know what the economy is going to do, but we do know our story is unique. And we know we're going to control what we can control, and I do see a path to our improvement. So let me leave it at that.

讓我像這樣估算一下，克里斯。首先讓我說 61.4% 不是 CP 標準。所以這是一個絕對的事實或信念。我們期待著，有很多活動部件。顯然，我們不知道經濟將如何發展，但我們知道我們的故事是獨一無二的。我們知道我們將控制我們能控制的東西，我確實看到了我們改進的途徑。所以讓我就此打住。

The next question comes from Walter Spracklin, RBC Capital Markets.

下一個問題來自 RBC 資本市場的 Walter Spracklin。

Nadeem, great to have you back. My question, I guess, is on St. John. And you mentioned going to 150 this year, obviously up from a less than 90 run rate and now you're pretty much running at a 300 run rate, so probably double that again in '23. You're pointing to 824. Just curious, when you get to that level, how long do you think it will be that you could fill that 800 capacity in '24? And is L.A. Long Beach in the shorter queues and the less congestion over the West Coast. Does that hurt your ability to get up to 800,000 on a quick basis in '24 or beyond?

納迪姆，很高興你回來。我想我的問題是關於聖約翰的。你提到今年要達到 150，顯然從低於 90 的運行率上升，現在你幾乎以 300 的運行率運行，所以可能在 23 年再次翻倍。你指的是 824。只是好奇，當你達到那個水平時，你認為你可以在 24 年填滿 800 個容量需要多長時間？洛杉磯長灘的排隊時間更短，西海岸的擁堵也更少。這是否會影響您在 24 世紀或以後快速達到 800,000 的能力？

Well, Walter, you know what, I don't think so. And the thesis all along, if we think back to when we bought the CMQ. Number one, it was -- there was only one competitor in that marketplace. We identified a route that with our investment, with our partnership with (inaudible) and the NBSR, we're able to create a service package that ultimately, long term, we believe, is what is the enabler of the growth. We can get to Toronto, Montreal, Chicago on a 200-plus mile faster route. That's not undeniable. And I think that's given us opportunities to talk to these steamship lines, maybe a little differently than we have in the past. And I think the other point is I think about your timeline in '24, '25 and beyond is a CP network that reaches Coast to Coast across Canada. And with the STB, hopefully approving our transaction, being able to link in the Gulf and also potentially Lazaro down in Mexico, gives us a really nice menu to be able to work with our customers on. And as part of that, I see that enabling customers to not only look at the West Coast, but grow that East Coast protocol with us, but then also potentially further diversify themselves by potentially going down and utilizing the ton of capacity that we're going to have available coming in through Mexico.

好吧，沃爾特，你知道嗎，我不這麼認為。如果我們回想一下我們購買 CMQ 的時間，那麼論文一直都是如此。第一，它是——那個市場上只有一個競爭對手。我們確定了一條路線，通過我們的投資，通過我們與（聽不清）和 NBSR 的合作，我們能夠創建一個服務包，我們相信，從長遠來看，這是增長的推動力。我們可以通過 200 多英里更快的路線到達多倫多、蒙特利爾和芝加哥。這不是不可否認的。我認為這給了我們與這些輪船公司交談的機會，也許與過去有所不同。我認為另一點是我認為你在 24 年、25 年及以後的時間線是一個 CP 網絡，覆蓋加拿大海岸到海岸。與 STB 一起，希望批准我們的交易，能夠在海灣地區建立聯繫，並可能在墨西哥建立 Lazaro，這為我們提供了一個非常好的菜單，以便能夠與我們的客戶合作。作為其中的一部分，我看到讓客戶不僅可以關注西海岸，還可以與我們一起發展東海岸協議，然後還可以通過潛在地下降和利用我們正在提供的大量容量來進一步實現自身多樣化。將有可能通過墨西哥進入。

Next question comes from Ken Hoexter from Bank of America.

下一個問題來自美國銀行的 Ken Hoexter。

Nadeem, welcome back and good luck on the rest of this process as you go through here. It's an exciting time to follow it. Can you talk about the test runs? I think you talked some of the lanes you're testing with KCS on a commercial basis. Is there anything you can kind of talk about in the interim, you mentioned selling was 100% served by trucks. Maybe can you quantify that specific opportunity or the potential then?

Nadeem，歡迎回來，祝你在接下來的過程中一切順利。這是一個令人興奮的時刻。你能談談試運行嗎？我想你談到了一些你在商業基礎上使用 KCS 測試的車道。在此期間你有什麼可以談的嗎，你提到銷售是 100% 由卡車提供的。也許你能量化那個特定的機會或潛力嗎？

Well, Ken, I'll say this at this point. As I said, these are interline test moves that we've put together to, I guess, somewhat replicate or begin to sort of proof of concept with these customers. As I said, there's a moving 100% truck today. So part of the sale is helping the customer understand what that process and what that opportunity could look like. Obviously, in the future, if we're blessed with single-line service between Toronto and Chicago and Laredo and ultimately down into Mexico, we wanted to begin to prove that we can compete head-to-head with trucks and ultimately provide that the liability that those customers are going to require. I can tell you that the second part of the story that's kind of neat around some of these opportunities is in these couple of examples I spoke to, we've done some work with the customers to identify the greenhouse gas emission savings at about 60% to 75% clip versus their current mode on those specific moves. And it's really become a unique and exciting sales tool that maybe far more than ever in the past, some of these customers have stood up to say that. That's beyond the price and the savings and the reliability and the service, this is an important story for our companies. So I hope that helps, Ken.

好吧，肯，我現在就說這個。正如我所說，這些是我們放在一起的聯運測試舉措，我想，在某種程度上複製或開始與這些客戶進行概念驗證。正如我所說，今天有一輛 100% 移動的卡車。因此，銷售的一部分是幫助客戶了解該過程以及該機會可能是什麼樣子。顯然，在未來，如果我們有幸在多倫多和芝加哥以及拉雷多之間提供單線服務，並最終進入墨西哥，我們想開始證明我們可以與卡車正面競爭，並最終提供這些客戶將要求的責任。我可以告訴你，在我採訪過的這幾個例子中，故事的第二部分與其中一些機會很巧妙，我們已經與客戶做了一些工作，以確定溫室氣體排放量減少了大約 60%在這些特定動作上，與他們當前的模式相比，減少了 75%。它真的成為一種獨特而令人興奮的銷售工具，可能比以往任何時候都更重要，其中一些客戶已經站出來這麼說。這超出了價格、節省、可靠性和服務，這對我們公司來說是一個重要的故事。所以我希望這對你有所幫助，肯。

It sounded something I guess we'll hear about more in the future.

聽起來我想我們將來會聽到更多。

For sure.

一定。

Our next question comes from Scott Group from Wolfe Research.

我們的下一個問題來自 Wolfe Research 的 Scott Group。

So I understand 61 sort of not the CP standard. So do you think maybe is this a year where we can get back to that 57, 58 OR we had in '21. And then just in terms of like the consolidated results, and I know you can't give specific guidance yet. But last year, you gave us directional commentary, low single-digit kind of earnings growth. Anything you could say it was double-digit earnings, the Street's got high teens earnings growth? Any sort of directional color you can share?

所以我理解 61 有點不是 CP 標準。所以你認為也許這一年我們可以回到 57、58 或者我們在 21 年的水平。然後就綜合結果而言，我知道你還不能給出具體的指導。但去年，您給了我們定向評論，即低個位數的收益增長。你能說這是兩位數的收入嗎？華爾街的收入增長率很高嗎？您可以分享任何一種方向性顏色嗎？

Scott, I appreciate the question. I'd just say if we want to give guidance, we wouldn't have given it. It's difficult in this environment. We're awaiting a decision from the STB. So out of respect for that, I think we should hold off on guidance for a consolidated entity. And in terms of the OR, I think Keith said it perfectly. I mean 61.4% is not something that we write home about. There's opportunities, as John highlighted this year in terms of -- on the volume side, but there's also uncertainty on the macro front. So we think that -- we think and we expect to see improvements. But to give you a quantum, I don't think it's appropriate right now, Scott. We'll update you as the year unfolds. And as we progress on our potential transaction and you can expect an Investor Day from us later this year, and I think there will be time -- plenty of time to give you a more formal kind of guidance when the time is appropriate.

斯科特，我很欣賞這個問題。我只想說，如果我們想提供指導，我們就不會提供。在這種環境下很難。我們正在等待 STB 的決定。因此，出於對此的尊重，我認為我們應該推遲對合併實體的指導。就 OR 而言，我認為 Keith 說得很完美。我的意思是 61.4% 不是我們寫回家的東西。正如約翰今年在數量方面強調的那樣，存在機會，但宏觀方面也存在不確定性。所以我們認為 - 我們認為並且我們期望看到改進。但是給你一個量子，我認為現在不合適，斯科特。隨著時間的推移，我們會為您更新。隨著我們在潛在交易上取得進展，你可以期待今年晚些時候我們舉辦投資者日，我認為會有時間——有足夠的時間在適當的時候給你更正式的指導。

Our next question comes from Jason Seidl from Cowen.

我們的下一個問題來自 Cowen 的 Jason Seidl。

Nadeem, welcome back. I wanted to touch on pricing a bit. I think you guys noted it continued to be strong. I was wondering if you could sort of compare it to where we were at in 3Q? And then does it need to actually get better from here given cost pressures?

納迪姆，歡迎回來。我想談談定價。我想你們注意到它繼續保持強勁。我想知道您是否可以將它與我們在第三季度的情況進行比較？那麼考慮到成本壓力，它是否需要從這裡真正變得更好？

Jason, I would say we sustained and maybe even improved a little as we move through Q4. I'd go as far as saying that high single-digit type pricing on renewals, certainly inflation plus. And just looking out so far, Q1, Q2 expectations in 2023, I'd say pretty well lined up in that similar space. So I remain optimistic on our pricing. And as we've always done in the past, certainly, we're very conscious of this inflationary environment, but a big part of our philosophy is pricing to the value of our service and capacity and whatever the inflation were -- inflation environment is going to be, you can assure that we'll continue to -- the sales team will continue to price that way in the marketplace.

傑森，我想說我們在第四季度中保持了甚至可能有所改善。我什至會說續訂的高個位數類型定價，當然還有通貨膨脹。就目前而言，2023 年第一季度、第二季度的預期，我想說在類似的空間裡排列得很好。所以我對我們的定價保持樂觀。正如我們過去一直所做的那樣，當然，我們非常清楚這種通貨膨脹環境，但我們理念的很大一部分是根據我們的服務和容量的價值定價，無論通貨膨脹是什麼——通貨膨脹環境是將會是，你可以保證我們會繼續——銷售團隊將繼續在市場上以這種方式定價。

Appreciate the color understood and look forward to the next big announcement.

欣賞色懂，期待下一次重磅發布。

As do we. Thanks, Jason.

我們也是。謝謝，傑森。

Our next question comes from Brandon Oglenski from Barclays.

我們的下一個問題來自巴克萊銀行的 Brandon Oglenski。

As you talked about new progressive hourly agreements with the Smart and the BLET unions, how important is that towards working towards a quick integration and what advantages do these hourly contracts have versus maybe some of your competitors?

當你談到與 Smart 和 BLET 工會的新的漸進式小時協議時，這對快速整合有多重要，這些小時合同與你的一些競爭對手相比有什麼優勢？

Well, it's critically important. It's a success enabler. I can tell you that -- I don't know if we have a lot enough time to go through this on this call. But I think of one collective agreement, think of a conductor, think of an engineer, think of no complexities from yard rules and road rules, where we have 2 classes of employees. So you have one class of conductors and engineers, they make more money, they have scheduled time off. And as a result of that, we have more predictability. And when you offer a better quality of life, especially in today's world, you pay more money and you let people know when they have to come to work. In the rail industry, that's a very unique and compelling value proposition. So to be able to expand that, we benefited from that on the DM&E properties at CP. We've had a unique outcome even through last year and the year before. So that's been part of our recipe for success and to be able to leverage that and give something to our employees will be proud of, their families will be proud of. I think it's part of the risk being not only to succeed in realizing our revenue synergies and the growth that we've committed to as well as operational synergies. But most importantly, I think it's necessary in today's world to be the employer of choice. Employees in the rail industry have to work their tails off. It's not an easy job. They have a choice of work, all the railroads are hiring, CPKC, pending, of course, the STB's approval of our transaction, I believe has the potential, again, for the employee to create a unique experience in this industry, and that's what I'm most excited about.

好吧，這非常重要。它是成功的推動者。我可以告訴你——我不知道我們是否有足夠的時間在這次電話會議上討論這個問題。但我想到了一個集體協議，想到了一名指揮，想到了一名工程師，想到了院子規則和道路規則中沒有的複雜性，我們有兩類員工。所以你有一個班級的指揮和工程師，他們賺更多的錢，他們有固定的休息時間。因此，我們有更多的可預測性。當你提供更好的生活質量時，尤其是在當今世界，你會支付更多的錢，並且讓人們知道他們什麼時候必須來上班。在鐵路行業，這是一個非常獨特且引人注目的價值主張。因此，為了能夠擴展它，我們從 CP 的 DM&E 屬性中受益。即使在去年和前年，我們也取得了獨特的成果。因此，這是我們成功秘訣的一部分，能夠利用這一點並為我們的員工提供一些值得驕傲的東西，他們的家人也會為此感到自豪。我認為風險的一部分不僅在於成功實現我們的收入協同效應和我們承諾的增長以及運營協同效應。但最重要的是，我認為在當今世界有必要成為首選雇主。鐵路行業的員工必須努力工作。這不是一件容易的事。他們可以選擇工作，所有鐵路都在招聘，CPKC，當然，等待 STB 批准我們的交易，我相信有潛力再次為員工創造這個行業的獨特體驗，這就是我最興奮的是。

Our next question comes from Konark Gupta from Scotiabank.

我們的下一個問題來自豐業銀行的 Konark Gupta。

Just wanted to ask on one of the comments you made on the largest hiring and CapEx programs you undertook in preparation of the opportunities ahead. How much hiring and CapEx are you expecting to unleash once the transaction is fully approved?

只是想問一下您對您為準備未來的機會而進行的最大的招聘和資本支出計劃所做的評論之一。一旦交易獲得完全批准，您預計將釋放多少招聘人員和資本支出？

Well, from a -- I'll tell you from a CP stand-alone, our CapEx is $1.6 billion. So let me comment on Kansas City Southern's CapEx, but they've had a number of initiatives, call it, whether it's from a bridge point of view or from other land acquisition and so forth, they're hitting record CapEx levels as well. From a hiring point of view, we hired starting in the spring of 2022. We've had a strong pipeline in anticipation of the grain crop coming back. So we saw our employee counts, I think, get up to almost 13,000 people at the end of the year. And so we hired, I think, close to 2,500 new people were hired and trained. So that was certainly a significant expense in 2022, and it will be a significant expense this year as we prepare for growth. So those RTMs that we expect to come along the GTMs, assuming a positive response from the STB, the synergies that one day will realize will take some people. So we're hiring a few thousand at a time, and we're spending CapEx at record levels on our property and KCS on their properties. So just a bit of color, hopefully, that helps, Konark.

好吧，從一個——我會從一個獨立的 CP 告訴你，我們的資本支出是 16 億美元。因此，讓我對堪薩斯城南部的資本支出發表評論，但他們已經採取了許多舉措，無論是從橋樑的角度還是從其他土地收購等角度來看，他們也達到了創紀錄的資本支出水平。從招聘的角度來看，我們從 2022 年春季開始招聘。我們有一個強大的渠道來期待糧食作物的回歸。所以我們看到我們的員工人數，我認為，在年底達到近 13,000 人。因此，我認為我們僱用了近 2,500 名新員工並接受了培訓。因此，這在 2022 年肯定是一筆可觀的支出，而在我們為增長做準備的今年，這將是一筆可觀的支出。因此，我們希望與 GTM 一起出現的那些 RTM，假設 STB 的積極響應，有一天會實現的協同效應將需要一些人。所以我們一次僱傭幾千人，我們在我們的財產和 KCS 上花費創紀錄水平的資本支出。所以只是一點點顏色，希望能有所幫助，Konark。

Our next question comes from Steve Hansen from Raymond James.

我們的下一個問題來自 Raymond James 的 Steve Hansen。

You noted that KCS has faced some of its own OR headwinds in the past couple of quarters here, even stiffer than the CP core. Just to the degree that you can comment at this juncture. Just curious how addressable you think those headwinds are and how quickly they can be reined in upon a successful STB decision?

你注意到 KCS 在過去幾個季度在這裡面臨著一些 OR 逆風，甚至比 CP 核心更艱難。只是到了你可以在這個時候發表評論的程度。只是好奇您認為這些逆風有多大的可解決性，以及在成功的 STB 決策後可以多快地控制它們？

Yes. It's hard to put a number on that, Steve. The thing I think about, obviously, I can't stick my hands into their business. John and Pat and the team are very competent and capable and talented railroaders, and they're managing those situations now. Pending STB approval and we have an ability to get our hands into it. Then obviously, when you put the combined network together as we come together as a team. We create community, you take out handling, you do a lot of those things that whatever challenges they're dealing with is going to get better from a fluidity and operational standpoint. And the other thing is as we win this business that we're talking about and we create these new markets, you take out some of the complexity of cars being handled back and forth with a single-line move versus an interchange move. That's true for CP KCS, that's true for an Interline move perhaps they (inaudible) all the above. Single line is part of the value of this for the customer. It's part of the efficiency. As far as the asset turn, you control the move cradle to grave, you charge a fair price for it, you create capacity. And as a result, you have a more efficient railway, which produces a lower operating ratio. It's just the way you effectively run the business. So I can't put a number on it. I can tell you that you should expect improvement naturally because of all those reasons. And I can tell you this is going to be a team committed to driving that improvement.

是的。很難用數字來表示，史蒂夫。我想的事情，顯然，我不能插手他們的生意。約翰和帕特以及他們的團隊是非常有能力和才華橫溢的鐵路工人，他們現在正在處理這些情況。等待 STB 批准，我們有能力參與其中。然後很明顯，當你把組合網絡放在一起時，我們作為一個團隊走到一起。我們創建社區，你負責處理，你做了很多這樣的事情，從流動性和運營的角度來看，無論他們正在處理什麼挑戰，都會變得更好。另一件事是，當我們贏得我們正在談論的這項業務並創造這些新市場時，您可以通過單線移動與交換移動來回處理汽車的一些複雜性。對於 CP KCS 來說是這樣，對於 Interline 移動也是如此，也許他們（聽不清）以上所有內容。單線是這對客戶的價值的一部分。這是效率的一部分。至於資產周轉，你控制著從搖籃到墳墓的移動，你為它收取一個合理的價格，你創造能力。結果，您擁有一條效率更高的鐵路，從而產生更低的運營率。這只是您有效經營業務的方式。所以我不能給它一個數字。我可以告訴你，由於所有這些原因，你應該自然而然地期待進步。我可以告訴你，這將是一個致力於推動這一改進的團隊。

Our next call comes from Brian Ossenbeck from JPMorgan.

我們的下一個電話來自摩根大通的 Brian Ossenbeck。

You know there's a change in the paid sick time in Canada start at the end of last year. It was called out to the $100 million headwind as your peer. I just wanted to see how you're thinking about that at your own network here in the next year? And then maybe for John, if you can comment on just the price mix and I guess other there was a 200 basis point headwind this quarter. Putting it together, it looks like you might be facing similar trends in the first half of next year just based on the comps and the wins that are coming on the network. But I wanted to if you give some high-level color in terms of how to think about mix and how that impact you next year.

你知道從去年年底開始，加拿大的帶薪病假時間發生了變化。與您的同行一樣，它被稱為 1 億美元的逆風。我只是想看看明年您在您自己的網絡中是如何考慮這個問題的？然後也許對約翰來說，如果你只能評論價格組合，我想其他人本季度有 200 個基點的逆風。放在一起，看起來你可能會在明年上半年面臨類似的趨勢，只是基於網絡上即將到來的比賽和勝利。但我想，如果你在如何考慮混合以及明年對你的影響方面給出一些高層次的顏色。

I'll say a few short words about these new regulations in the paid sick days. I'm not thinking in tens of millions of dollars, I'm not thinking in hundreds. I'm thinking about the practical application of this. Number one, those sick days have to be earned through '22 or '23. So really, they don't come into play until '24 full year effect. Number two, our manpower models, and I don't care if it's a mechanical group, the running trades group, locomotive group, the (inaudible) Group, we model because employees obviously get sick days is already in our manpower models. So to suggest it's going to go from zero to whatever to 10, a multiple of 10 would be to me are responsible on my part. Our employees, if I look at running trades, for instance, we've got average sick days in a year, I think the rough number is 4 or 5. So that's already kind of baked into the manpower model. Now if I've got to pay in for those 4 or 5 days, there's some impact. But at the end of the day, it's not going to be material. I don't know exactly what it will be, but we won't have full effect in '23. I know that for a fact and when we do, I don't think it's going to be material.

我將在帶薪病假期間簡單介紹一下這些新規定。我沒有考慮數千萬美元，我沒有考慮數百美元。我正在考慮這個的實際應用。第一，那些病假必須在 22 歲或 23 歲之前獲得。所以說真的，它們要到 24 年全年才開始發揮作用。第二，我們的人力模型，我不在乎它是否是機械組、運行行業組、機車組、（聽不清）組，我們建模是因為員工明顯生病天數已經在我們的人力模型中。所以建議它從零到任何到 10，10 的倍數對我來說是我的責任。我們的員工，如果我看一下經營行業，例如，我們一年平均有病假，我認為粗略的數字是 4 或 5。所以這已經融入了人力模型。現在，如果我必須支付那 4 或 5 天的費用，就會產生一些影響。但歸根結底，它不會是物質的。我不知道具體會是什麼，但我們不會在 23 年全面發揮作用。我知道這是一個事實，當我們這樣做時，我認為這不會很重要。

Brian, you know what you're right. I kind of see similar trends evolving as we move in the first half of 2023. Typically, our bulk franchise just by nature, a little lower on an average cents per RTM basis relative to the rest of our book, that will kind of maintain or keep some of the pressures relative to the mix that you described.

布賴恩，你知道你是對的。隨著我們在 2023 年上半年的發展，我有點看到類似的趨勢在演變。通常情況下，我們的大宗特許經營權本質上是相對於我們賬簿的其餘部分，每 RTM 的平均美分略低，這將有點維持或保持一些與您描述的混合相關的壓力。

Our next call comes from Ariel Rosa from Crédit Suisse.

我們的下一個電話來自 Crédit Suisse 的 Ariel Rosa。

So I just wanted to see if Nadeem or Keith, maybe you could talk about the expectations for the progression of the debt pay down, kind of how are you seeing that play out over the course of 2023 and maybe into 2024? And what kind of impact might that have on your interest expense?

所以我只想看看 Nadeem 或 Keith，也許你可以談談對債務償還進展的預期，你如何看待這種情況在 2023 年乃至 2024 年的發展？這會對您的利息支出產生什麼樣的影響？

So yes, we're generating a significant amount of free cash as well as dividend payments from Kansas City Southern. So we're kind of on pace to continue to delever, get back to our 2.5x target leverage. So we've gone from kind of a little bit above 4, 4.1, 4.2 down to 3.7, 3.8 levels as we speak. I would expect that to get in the high 2s by the end of the year. And so over the course of 2024, we should be back in target leverage, keep it at that level. And as far as the interest payment, I just follow back -- follow up with Maeghan and Chris post call back in the office 3 days so far. So you caught me on that one, and so it's better to connect with them on the interest cost.

所以是的，我們正在從堪薩斯城南部產生大量的自由現金和股息支付。因此，我們正朝著繼續去槓桿化的步伐邁進，回到我們 2.5 倍的目標槓桿率。所以我們已經從略高於 4、4.1、4.2 的水平下降到 3.7、3.8 的水平。我希望到今年年底能達到 high 2s。因此，在 2024 年期間，我們應該回到目標槓桿率，並保持在該水平。至於利息支付，我只是跟進——到目前為止 3 天，Maeghan 和 Chris 在辦公室回電。所以你在那個問題上抓住了我，所以最好在利息成本上與他們聯繫。

Our next question comes from Amit Mehrotra from Deutsche Bank.

我們的下一個問題來自德意志銀行的 Amit Mehrotra。

I joined the call a little bit later, so apologies if these questions have been asked. But one, I was wondering if you could talk about nonfuel costs. Obviously, there's inflation, I assume you have some visibility, if you could help us kind of think about the OpEx this year I guess, follow-up separately, with Kansas City, there used to be a time where they provided US OR and Mexico OR. And I assume that based on where they are today, it may be safe to assume that they're kind of in the 70s now in terms of the U.S. business. I don't know if you want to comment or talk about that, but just trying to understand gap in terms of where they are in the U.S. business and where CP is?

我稍後加入了電話會議，如果有人問到這些問題，我深表歉意。但是，我想知道你是否可以談談非燃料成本。顯然，存在通貨膨脹，我假設你有一定的知名度，如果你能幫助我們考慮一下今年的運營支出，我想，分別跟進堪薩斯城，曾經有一段時間他們提供美國或墨西哥或者。而且我認為，根據他們今天所處的位置，就美國業務而言，可以安全地假設他們現在處於 70 年代。我不知道你是否想評論或談論這個，但只是想了解他們在美國業務和 CP 的位置方面的差距？

Sure. Yes, thanks for those questions. You cut out a little bit, so forgive me if I didn't get -- I don't get the full question and respond to you correctly. But I think you mentioned about inflation ex fuel. We were running close to high 6%, almost 7% in Q4. So significant inflation that we haven't seen in some time or certainly haven't seen in my career. The good news is John has been -- as he updated on the call, we've been pricing above inflation, and we fully expect that. In this uncertain macro environment, we'll see what happens with inflation. Certainly, we've seen it kind of slowdown in some areas, some of the latest economic indicators have seen hopefully peak inflation, and we'll see that come down through 2023. But irrespective, we're protected from an operating income point of view.

當然。是的，謝謝你提出這些問題。你打斷了一點，如果我沒聽懂，請原諒我——我沒有聽懂完整的問題並正確回答你。但我想你提到了除燃料之外的通貨膨脹。我們在第四季度接近 6%，接近 7%。如此顯著的通貨膨脹，我們已經有一段時間沒有見過，或者在我的職業生涯中肯定沒有見過。好消息是約翰 - 正如他在電話會議上更新的那樣，我們的定價一直高於通貨膨脹，我們完全預料到這一點。在這個不確定的宏觀環境中，我們將看看通貨膨脹會發生什麼。當然，我們已經看到它在某些領域有所放緩，一些最新的經濟指標有望看到通貨膨脹達到峰值，我們將看到通貨膨脹率在 2023 年下降。但無論如何，我們的營業收入點受到保護看法。

In terms of OR, KCS versus KCSM, yes, not appropriate for me to comment, and I couldn't even tell you the answer, if I wanted to. So if I knew it. So more to come on that and not something that I'm going to answer on this call.

在 OR 方面，KCS 與 KCSM，是的，我不適合發表評論，如果我想的話，我什至無法告訴你答案。所以如果我知道的話。所以還有更多的事情要做，而不是我要在這個電話會議上回答的事情。

Our next question comes from Justin Long from Stephens.

我們的下一個問題來自 Stephens 的 Justin Long。

I guess to follow up on some of the questions about pricing. Can you talk about what percentage of your business is getting repriced this year? And as you've started to pursue some of the new business opportunities as a result of the KCS merger, are you seeing any of the other rails respond to that with more competitive pricing? And if not, how are you thinking about that risk as you integrate the deal?

我想跟進一些關於定價的問題。您能談談您今年有多少業務進行了重新定價？由於 KCS 合併，您已經開始尋求一些新的商機，您是否看到其他任何鐵路公司以更具競爭力的價格對此做出回應？如果不是，您在整合交易時如何考慮該風險？

So Justin, we should see roughly 40% of our book roll over in 2023, and that I would characterize that as pretty typical for us. And the competitive response, I fully expect that they're going to do it. They need to do in areas where we're going to go head to head again, assuming the STB approves our transaction. That being said, I'll also say that a lot of the examples I've provided today, and I've spoken to in the past, are really non-rail moves today. It's about focusing on these opportunities that I think uniquely can be solved by CPKC and are really competing against truck. And as I think about even traffic that we're looking at potentially out of Mexico, up in some markets that's moving short sea or other alternatives that aren't head-to-head versus rail. So look, we're going to compete where we compete, and I fully expect the U.S. rail competitors to do what they need to do on that front, and we'll do the same. And again, we'll try to focus on those growth opportunities that are more maybe noncompetitive with those in moving by a truck or other modes.

所以賈斯汀，我們應該會看到大約 40% 的書在 2023 年翻新，我認為這對我們來說非常典型。以及競爭性的反應，我完全希望他們會這樣做。假設 STB 批准我們的交易，他們需要在我們將再次正面交鋒的領域開展工作。話雖這麼說，我還要說的是，我今天提供的很多例子，以及我過去談過的例子，今天實際上都是非鐵路移動。這是關於專注於我認為 CPKC 可以獨特解決的這些機會，並且真正與卡車競爭。當我考慮甚至我們正在尋找的可能來自墨西哥的交通時，在一些正在移動短途海運或其他與鐵路不是頭對頭的替代方案的市場中。所以看，我們將在我們競爭的地方競爭，我完全希望美國鐵路競爭對手在這方面做他們需要做的事情，我們也會這樣做。再一次，我們將嘗試關注那些與卡車或其他方式移動的人相比更具競爭力的增長機會。

That reached our allotted time for Q&A. I would now like to turn the call back over to Mr. Keith Creel.

這達到了我們分配的問答時間。我現在想把電話轉回基思克里爾先生。

Okay. Thank you, operator, and thank you for joining us again this afternoon. As you can sense, these are unique opportunities, its unique time in this company's history. Obviously, continue to find the STB approving our merger application. We are poised and ready for a historic year for a combined entity CPKC. Historic for our customers, for our employees, for the communities we serve for the North American economy in a very unique way. So with that said, we look forward to waiting on that decision and pending that decision as positive as we hope that it will be, and we believe the Teck support. We will be scheduling and let you know a date to (inaudible) in the future sometime in June, late June, we'll be in a position to be able to come together and share all these facts and answer a whole lot more questions and provide some color as to what the true opportunity lays ahead of us for 2023 and beyond. So thank you for that, stay safe, and we look forward to talking again on our next call.

好的。謝謝接線員，感謝您今天下午再次加入我們。正如您所感覺到的，這些都是獨一無二的機會，是公司歷史上獨一無二的時期。顯然，繼續找STB批准我們的合併申請。我們已經準備好迎接合併實體 CPKC 的歷史性一年。對於我們的客戶、我們的員工、我們以非常獨特的方式為北美經濟服務的社區而言，這具有歷史意義。因此，話雖如此，我們期待著等待該決定，並等待該決定像我們希望的那樣積極，我們相信 Teck 的支持。我們將安排並讓您知道（聽不清）未來的某個時間，即 6 月下旬，我們將能夠聚在一起分享所有這些事實，並回答更多的問題和為 2023 年及以後擺在我們面前的真正機遇提供一些色彩。所以謝謝你，注意安全，我們期待在下次通話中再次交談。

This does conclude today's conference call. You may now disconnect.

這確實結束了今天的電話會議。您現在可以斷開連接。