KCS's Kansas
City to St.
Louis/Springfield route
will be an important part of the CPKC growth story
CALGARY, Jan. 13, 2022 /PRNewswire/ - Canadian Pacific
Railway Limited (TSX: CP) (NYSE: CP) today issued the following
statement in response to CN's Notice of Intent to file a Responsive
Application asking the STB force a divestiture of KCS's lines east
of Kansas City as part of the
Surface Transportation Board's ("STB") regulatory review of CP's
proposed combination with Kansas City Southern ("KCS"):
CN's proposal is built on a series of factual errors or
misstatements.
KCS's Kansas City-Springfield line is not "parallel" to CP's
line between Kansas City and
Chicago. KCS's line does not reach
Chicago, and contrary to CN's
misleading statements, KCS's line is not part of a through route to
Chicago in conjunction with CN. In
fact, there is no direct connection between KCS and CN today at
Springfield, and historic
interchange volumes reflect the absence of any actual service here.
Only four cars were interchanged by KCS at Springfield with CN in 2020 and 133 cars
interchanged with CN in 2019.
As part of CPKC, these lines will grow along with CPKC. CP's
proposed pro-competitive combination with KCS is about growth. A
future CPKC will not downgrade any lines, these included. Instead,
CPKC will maintain existing levels of service on these lines and
will not re-route traffic away from these lines, contrary to CN's
assertions.
In fact, the route from Kansas
City to St. Louis and the
other assets CN wants the STB to force CP to divest are important
parts of the combined CPKC growth story providing new, competitive
single-line routes connecting CP's network with customers and port
facilities in St. Louis, and
connections to eastern carriers. CP anticipates an increase of
traffic on this corridor of 30 percent.
CP will be responding to any formal CN request for conditions in
the pending STB proceeding at the appropriate time.
For more information on the benefits of a CP-KCS combination,
visit FutureForFreight.com.
FORWARD LOOKING STATEMENTS AND INFORMATION
This news release contains certain forward looking statements and
forward looking information (collectively, "FLI"), including plans
relating CP's plans for the Springfield corridor located between
Kansas City and St. Louis. FLI is typically identified by
words such as "anticipate", "expect", "project", "estimate",
"forecast", "plan", "intend", "will", "target", "believe", "likely"
and similar words suggesting future outcomes or statements
regarding an outlook. All statements other than statements of
historical fact may be FLI.
Although we believe that the FLI is reasonable based on the
information available today and processes used to prepare it, such
statements are not guarantees of future performance and you are
cautioned against placing undue reliance on FLI. By its nature, FLI
involves a variety of assumptions, which are based upon factors
that may be difficult to predict and that may involve known and
unknown risks and uncertainties and other factors which may cause
actual results, levels of activity and achievements to differ
materially from those expressed or implied by these FLI, including,
but not limited to, the following: the realization of anticipated
benefits and synergies of the CP-KCS transaction and the timing
thereof; the success of integration plans; the focus of management
time and attention on the CP-KCS transaction and other disruptions
arising from the CP-KCS transaction; changes in business strategy
and strategic opportunities; estimated future dividends; financial
strength and flexibility; debt and equity market conditions,
including the ability to access capital markets on favourable terms
or at all; cost of debt and equity capital; the ability of
management of CP, KCS and their respective subsidiaries and
affiliates to execute key priorities, including those in connection
with the transaction; general Canadian, U.S., Mexican and global
social, economic, political, credit and business conditions; risks
associated with agricultural production such as weather conditions
and insect populations; the availability and price of energy
commodities; the effects of competition and pricing pressures,
including competition from other rail carriers, trucking companies
and maritime shippers in Canada,
the U.S. and Mexico; North
American and global economic growth; industry capacity; shifts in
market demand; changes in commodity prices and commodity demand;
uncertainty surrounding timing and volumes of commodities being
shipped; inflation; geopolitical instability; changes in laws,
regulations and government policies, including regulation of rates;
changes in taxes and tax rates; potential increases in maintenance
and operating costs; changes in fuel prices; disruption in fuel
supplies; uncertainties of investigations, proceedings or other
types of claims and litigation; compliance with environmental
regulations; labour disputes; changes in labour costs and labour
difficulties; risks and liabilities arising from derailments;
transportation of dangerous goods; timing of completion of capital
and maintenance projects; sufficiency of budgeted capital
expenditures in carrying out business plans; services and
infrastructure; the satisfaction by third parties of their
obligations; currency and interest rate fluctuations; exchange
rates; effects of changes in market conditions and discount rates
on the financial position of pension plans and investments; trade
restrictions or other changes to international trade arrangements;
the effects of current and future multinational trade agreements on
the level of trade among Canada,
the U.S. and Mexico; climate
change and the market and regulatory responses to climate change;
ability to achieve commitments and aspirations relating to reducing
greenhouse gas emissions and other climate-related objectives;
anticipated in-service dates; success of hedging activities;
operational performance and reliability; customer, regulatory and
other stakeholder approvals and support; regulatory and legislative
decisions and actions; the adverse impact of any termination or
revocation by the Mexican government of Kansas City Southern de
Mexico, S.A. de C.V.'s Concession;
public opinion; various events that could disrupt operations,
including severe weather events, such as droughts, floods,
avalanches and earthquakes, and cybersecurity attacks, as well as
security threats and governmental response to them, and
technological changes; acts of terrorism, war or other acts of
violence or crime or risk of such activities; insurance coverage
limitations; material adverse changes in economic and industry
conditions, including the availability of short and long-term
financing; and the pandemic created by the outbreak of COVID-19 and
its variants, and resulting effects on economic conditions, the
demand environment for logistics requirements and energy prices,
restrictions imposed by public health authorities or governments,
fiscal and monetary policy responses by governments and financial
institutions, and disruptions to global supply chains.
We caution that the foregoing list of factors is not exhaustive
and is made as of the date hereof. Additional information about
these and other assumptions, risks and uncertainties can be found
in reports and filings by CP and KCS with Canadian and U.S.
securities regulators, including any proxy statement, prospectus,
material change report, management information circular or
registration statement that have been or will be filed in
connection with the CP-KCS transaction. Reference should be made to
"Risk Factors" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations—Forward Looking
Statements" in CP's and KCS's annual and interim reports on Form
10-K and 10-Q. Due to the interdependencies and correlation of
these factors, as well as other factors, the impact of any one
assumption, risk or uncertainty on FLI cannot be determined with
certainty.
Except to the extent required by law, we assume no obligation to
publicly update or revise any FLI, whether as a result of new
information, future events or otherwise. All FLI in this news
release is expressly qualified in its entirety by these cautionary
statements.
ABOUT CANADIAN PACIFIC
Canadian Pacific (TSX: CP) (NYSE: CP) is a transcontinental
railway in Canada and the United States with direct links to major
ports on the west and east coasts. CP provides North American
customers a competitive rail service with access to key markets in
every corner of the globe. CP is growing with its customers,
offering a suite of freight transportation services, logistics
solutions and supply chain expertise. Visit www.cpr.ca to see the
rail advantages of CP. CP-IR
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content:https://www.prnewswire.com/news-releases/cp-responds-to-cns-plan-to-ask-the-stb-to-force-a-sale-to-cn-of-parts-of-the-future-cpkc-network-301460717.html
SOURCE Canadian Pacific