CPKC second quarter delivers strong growth, carries momentum into second half of 2025
Canadian Pacific Kansas City (NYSE: CP) reported strong Q2 2025 financial results, with revenues increasing 3% to $3.7 billion compared to Q2 2024. The company achieved diluted EPS of $1.33 and core adjusted diluted EPS of $1.12, up 7% from the previous year.
Key operational metrics showed improvement, with volumes increasing 7% in Revenue Ton-Miles and operating ratio decreasing 110 basis points to 63.7%. The company's FRA-reportable personal injury frequency improved to 0.77, though train accident frequency increased to 0.97.
CPKC's CEO Keith Creel highlighted the company's success in overcoming challenges in their southern U.S. network following system integration, expressing confidence in delivering on full-year guidance while pursuing sustainable growth opportunities across their three-nation network.
Canadian Pacific Kansas City (NYSE: CP) ha riportato solidi risultati finanziari nel secondo trimestre del 2025, con ricavi in aumento del 3% a 3,7 miliardi di dollari rispetto al secondo trimestre del 2024. L'azienda ha registrato un utile per azione diluito di 1,33 dollari e un utile per azione diluito core rettificato di 1,12 dollari, in crescita del 7% rispetto all'anno precedente.
I principali indicatori operativi hanno mostrato miglioramenti, con un aumento del 7% dei volumi in Revenue Ton-Miles e un rapporto operativo in calo di 110 punti base al 63,7%. La frequenza degli infortuni personali segnalabili alla FRA è migliorata a 0,77, mentre la frequenza degli incidenti ferroviari è aumentata a 0,97.
Il CEO di CPKC, Keith Creel, ha sottolineato il successo dell'azienda nel superare le sfide nella rete del sud degli Stati Uniti dopo l'integrazione del sistema, esprimendo fiducia nel raggiungimento delle previsioni per l'intero anno e nell'inseguire opportunità di crescita sostenibile attraverso la loro rete a tre nazioni.
Canadian Pacific Kansas City (NYSE: CP) reportó sólidos resultados financieros en el segundo trimestre de 2025, con ingresos que aumentaron un 3% hasta 3.7 mil millones de dólares en comparación con el segundo trimestre de 2024. La compañía logró un beneficio por acción diluido de 1.33 dólares y un beneficio por acción diluido ajustado core de 1.12 dólares, un incremento del 7% respecto al año anterior.
Los principales indicadores operativos mostraron mejoras, con un aumento del 7% en volúmenes medidos en Revenue Ton-Miles y una reducción de 110 puntos básicos en la ratio operativa, que quedó en 63.7%. La frecuencia de lesiones personales reportables a la FRA mejoró a 0.77, aunque la frecuencia de accidentes ferroviarios aumentó a 0.97.
El CEO de CPKC, Keith Creel, destacó el éxito de la compañía al superar los desafíos en su red del sur de EE.UU. tras la integración del sistema, expresando confianza en cumplir las previsiones anuales y en buscar oportunidades de crecimiento sostenible a lo largo de su red de tres países.
Canadian Pacific Kansas City (NYSE: CP)� 2025� 2분기 강력� 재무 실적� 보고했으�, 2024� 2분기 대� 수익� 3% 증가하여 37� 달러� 기록했습니다. 회사� 희석 주당순이�(EPS) 1.33달러와 핵심 조정 희석 EPS 1.12달러� 달성하여 전년 대� 7% 상승했습니다.
주요 운영 지표도 개선되어, 수익 톤마�(Revenue Ton-Miles) 볼륨� 7% 증가했고, 영업 비율은 110 베이시스 포인� 하락� 63.7%� 기록했습니다. FRA 보고 대� 개인 상해 빈도� 0.77� 개선되었으나, 열차 사고 빈도� 0.97� 증가했습니다.
CPKC� CEO Keith Creel은 시스� 통합 이후 남부 미국 네트워크에서� 도전 과제� 극복� 회사� 성공� 강조하며, 연간 가이던스를 달성하고 � 국가 네트워크 전반� 걸쳐 지� 가능한 성장 기회� 추구� 것이라는 자신감을 표명했습니다.
Canadian Pacific Kansas City (NYSE : CP) a annoncé de solides résultats financiers pour le deuxième trimestre 2025, avec des revenus en hausse de 3 % à 3,7 milliards de dollars par rapport au deuxième trimestre 2024. La société a réalisé un bénéfice dilué par action (EPS) de 1,33 $ et un EPS dilué ajusté de base de 1,12 $, en hausse de 7 % par rapport à l'année précédente.
Les principaux indicateurs opérationnels ont montré une amélioration, avec une augmentation de 7 % des volumes en Revenue Ton-Miles et un ratio d'exploitation en baisse de 110 points de base à 63,7 %. La fréquence des blessures personnelles déclarables à la FRA s'est améliorée à 0,77, bien que la fréquence des accidents de train ait augmenté à 0,97.
Le PDG de CPKC, Keith Creel, a souligné le succès de l'entreprise à surmonter les défis de son réseau du sud des États-Unis après l'intégration du système, exprimant sa confiance dans la réalisation des objectifs annuels tout en poursuivant des opportunités de croissance durable à travers leur réseau trilatéral.
Canadian Pacific Kansas City (NYSE: CP) meldete starke Finanzergebnisse für das zweite Quartal 2025, mit einem Umsatzanstieg von 3 % auf 3,7 Milliarden US-Dollar im Vergleich zum zweiten Quartal 2024. Das Unternehmen erzielte ein verwässertes Ergebnis je Aktie (EPS) von 1,33 USD und ein bereinigtes Kern-EPS von 1,12 USD, was einer Steigerung von 7 % gegenüber dem Vorjahr entspricht.
Wichtige operative Kennzahlen zeigten Verbesserungen, mit einem Volumenanstieg von 7 % bei den Revenue Ton-Miles und einer Senkung des Betriebsverhältnisses um 110 Basispunkte auf 63,7 %. Die von der FRA berichtete Häufigkeit von Personenschäden verbesserte sich auf 0,77, während die Häufigkeit von Zugunfällen auf 0,97 anstieg.
CPKC-CEO Keith Creel hob den Erfolg des Unternehmens hervor, die Herausforderungen im südlichen US-Netz nach der Systemintegration zu meistern, und zeigte sich zuversichtlich, die Jahresprognose zu erfüllen und nachhaltige Wachstumschancen im dreiländrigen Netzwerk zu verfolgen.
- Revenue increased 3% to $3.7 billion year-over-year
- Volumes (Revenue Ton-Miles) grew 7% compared to Q2 2024
- Operating ratio improved by 110 basis points to 63.7%
- Core adjusted diluted EPS increased 7% to $1.12
- Personal injury frequency rate improved to 0.77 from 0.84
- Train accident frequency increased to 0.97 from 0.70 year-over-year
- Faced operational challenges in southern U.S. network during system integration
Insights
CPKC delivered solid Q2 results with 7% volume growth, improved operating ratio, and EPS growth, showing merger synergies taking hold.
CPKC's Q2 results demonstrate the railroad is effectively capturing synergies from its Kansas City Southern merger while navigating integration challenges. Revenue increased
The company showed meaningful operational improvements with its operating ratio (OR) - a critical railroad efficiency metric where lower is better - decreasing
On the safety front, personal injury frequency improved to 0.77 from 0.84, though train accident frequency increased to 0.97 from 0.70. This accident metric bears watching as integration continues, as safety metrics typically correlate with operational discipline.
CEO Keith Creel's reference to "overcome challenges in portions of our southern U.S. network following our complex system integration" acknowledges integration difficulties but suggests they're being managed. His comments about "growing momentum" and confidence in meeting full-year guidance point to continued improvement in the second half of 2025.
CPKC's unique three-nation network (U.S., Canada, Mexico) provides competitive advantages through single-line service for shippers between these countries, particularly as nearshoring trends continue to benefit Mexico-U.S. freight flows. The railroad appears to be gradually unlocking the strategic value that justified this transformative merger.
"Our exceptional team of railroaders again delivered strong operating and financial results in the second quarter as we realize more of the value created by this unrivalled North American network," said Keith Creel, CPKC President and Chief Executive Officer. "Our dedicated team pulled together to overcome challenges in portions of our southern
Second-quarter 2025 results
- Volumes, as measured in Revenue Ton-Miles, increased seven percent
- Revenues increased three percent to
from$3.7 billion in Q2 2024$3.6 billion - Reported operating ratio (OR) decreased 110 basis points to 63.7 percent from 64.8 percent in Q2 2024
- Core adjusted OR1 decreased 110 basis points to 60.7 percent from 61.8 percent in Q2 2024
- Reported diluted EPS increased to
from$1.33 in Q2 2024$0.97 - Core adjusted diluted EPS1 increased seven percent to
from$1.12 in Q2 2024$1.05 - Federal Railroad Administration (FRA)-reportable personal injury frequency decreased to 0.77 from 0.84 in Q2 20242
- FRA-reportable train accident frequency increased to 0.97 from 0.70 in Q2 20242
"We are executing our strategy by capitalizing on a range of opportunities unique to our three-nation network, opportunities to grow our business by supporting our customers in reaching new markets," added Creel. "Looking ahead, we remain confident in our ability to deliver on our full-year guidance while realizing sustainable growth that provides value for our shareholders, customers and all stakeholders."
1 | These measures have no standardized meanings prescribed by accounting principles generally accepted in |
2 | The second-quarter 2024 FRA-reportable personal injury frequency and FRA-reportable train accident frequency have been restated to reflect new information available within specified periods stipulated by the FRA but that exceed CPKC's financial reporting timeline. |
Conference Call Details
CPKC will discuss its results with the financial community in a conference call beginning at 4:30 p.m. ET (2:30 p.m. MT) on July 30, 2025.
Conference Call Access
International: 203-518-9814
*Conference ID: CPKCQ225
Callers should dial in 10 minutes prior to the call.
Webcast
We encourage you to access the webcast and presentation material in the Investors section of CPKC's website at.
A replay of the second-quarter conference call will be available through August 6, 2025, at 800-723-0544 (
Forward-looking information
This news release contains certain forward-looking information and forward-looking statements (collectively, "forward-looking information") within the meaning of applicable securities laws in both the
The forward-looking information in this news release is based on current expectations, estimates, projections and assumptions, having regard to CPKC's experience and its perception of historical trends, and includes, but is not limited to, expectations, estimates, projections and assumptions relating to: changes in business strategies, North American and global economic growth and conditions; commodity demand growth; sustainable industrial and agricultural production; commodity prices and interest rates; performance of our assets and equipment; sufficiency of our budgeted capital expenditures in carrying out our business plan; geopolitical conditions, applicable laws, regulations and government policies, including, without limitation, those relating to regulation of rates, tariffs, import/export, trade, taxes, wages, labour and immigration; the availability and cost of labour, services and infrastructure; labour disruptions; the satisfaction by third parties of their obligations to CPKC; and carbon markets, evolving sustainability strategies, and scientific or technological developments. Although CPKC believes the expectations, estimates, projections and assumptions reflected in the forward-looking information presented herein are reasonable as of the date hereof, there can be no assurance that they will prove to be correct. Current conditions, economic and otherwise, render assumptions, although reasonable when made, subject to greater uncertainty.
Undue reliance should not be placed on forward-looking information as actual results may differ materially from those expressed or implied by forward-looking information. By its nature, CPKC's forward-looking information involves inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking information, including, but not limited to, the following factors: changes in business strategies and strategic opportunities; general Canadian,
Any forward-looking information contained in this news release is made as of the date hereof. Except as required by law, CPKC undertakes no obligation to update publicly or otherwise revise any forward-looking information, or the foregoing assumptions and risks affecting such forward-looking information, whether as a result of new information, future events or otherwise.
About CPKC
With its global headquarters in
FINANCIAL STATEMENTS
INTERIM CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
For the three months | For the six months | |||
(in millions of Canadian dollars, except share and per share data) | 2025 | 2024 | 2025 | 2024 |
Revenues (Note 3) | ||||
Freight | $ 3,629 | $ 3,534 | $ 7,356 | $ 6,961 |
Non-freight | 70 | 69 | 138 | 162 |
Total revenues | 3,699 | 3,603 | 7,494 | 7,123 |
Operating expenses | ||||
Compensation and benefits | 659 | 612 | 1,341 | 1,302 |
Fuel | 405 | 466 | 886 | 924 |
Materials | 124 | 97 | 248 | 191 |
Equipment rents | 103 | 82 | 202 | 164 |
Depreciation and amortization | 493 | 473 | 997 | 940 |
Purchased services and other | 572 | 606 | 1,160 | 1,186 |
Total operating expenses | 2,356 | 2,336 | 4,834 | 4,707 |
Operating income | 1,343 | 1,267 | 2,660 | 2,416 |
Other income | (16) | (40) | (9) | (42) |
Other components of net periodic benefit recovery (Note 12) | (107) | (88) | (214) | (176) |
Net interest expense | 208 | 200 | 424 | 406 |
Gain on sale of equity investment (Note 4) | (333) | � | (333) | � |
Income before income tax expense | 1,591 | 1,195 | 2,792 | 2,228 |
Current income tax expense | 348 | 274 | 614 | 516 |
Deferred income tax expense | 9 | 18 | 35 | 35 |
Income tax expense (Note 5) | 357 | 292 | 649 | 551 |
Net income | $ 1,234 | $ 903 | $ 2,143 | $ 1,677 |
Net loss attributable to non-controlling interest | � | (2) | (1) | (3) |
Net income attributable to controlling shareholders | $ 1,234 | $ 905 | $ 2,144 | $ 1,680 |
Earnings per share (Note 6) | ||||
Basic earnings per share | $ 1.34 | $ 0.97 | $ 2.31 | $ 1.80 |
Diluted earnings per share | $ 1.33 | $ 0.97 | $ 2.31 | $ 1.80 |
Weighted-average number of shares (millions) (Note 6) | ||||
Basic | 923.8 | 932.8 | 928.4 | 932.6 |
Diluted | 924.8 | 934.6 | 929.5 | 934.5 |
Dividends declared per share | $ 0.228 | $ 0.190 | $ 0.418 | $ 0.380 |
See Notes to Interim Consolidated Financial Statements. |
INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
For the three months | For the six months | |||||||
(in millions of Canadian dollars) | 2025 | 2024 | 2025 | 2024 | ||||
Net income | $ | 1,234 | $ | 903 | $ | 2,143 | $ | 1,677 |
Net (loss) gain in foreign currency translation adjustments, net of hedging activities | (1,729) | 301 | (1,758) | 1,000 | ||||
Change in derivatives designated as cash flow hedges | � | 3 | 1 | 4 | ||||
Change in pension and post-retirement defined benefit plans | 2 | 11 | 5 | 23 | ||||
Other comprehensive income (loss) from equity investees | 3 | (2) | 3 | (2) | ||||
Other comprehensive (loss) income before income taxes | (1,724) | 313 | (1,749) | 1,025 | ||||
Income tax (expense) recovery | (32) | � | (35) | 6 | ||||
Other comprehensive (loss) income (Note 7) | (1,756) | 313 | (1,784) | 1,031 | ||||
Comprehensive (loss) income | $ | (522) | $ | 1,216 | $ | 359 | $ | 2,708 |
Comprehensive (loss) income attributable to non-controlling interest | (54) | 9 | (56) | 31 | ||||
Comprehensive (loss) income attributable to controlling shareholders | $ | (468) | $ | 1,207 | $ | 415 | $ | 2,677 |
See Notes to Interim Consolidated Financial Statements. |
INTERIM CONSOLIDATED BALANCE SHEETS AS AT
(unaudited)
June 30 | December 31 | |
(in millions of Canadian dollars) | 2025 | 2024 |
Assets | ||
Current assets | ||
Cash and cash equivalents | $ 799 | $ 739 |
Accounts receivable, net (Note 8) | 2,005 | 1,968 |
Materials and supplies | 455 | 457 |
Other current assets | 266 | 220 |
3,525 | 3,384 | |
Investments (Note 4) | 454 | 586 |
Properties | 54,458 | 56,024 |
Goodwill | 18,352 | 19,350 |
Intangible assets | 2,940 | 3,146 |
Pension asset | 4,782 | 4,586 |
Other assets | 669 | 668 |
Total assets | $ 85,180 | $ 87,744 |
Liabilities and equity | ||
Current liabilities | ||
Accounts payable and accrued liabilities | $ 2,736 | $ 2,842 |
Long-term debt maturing within one year (Note 9, 10) | 1,042 | 2,819 |
3,778 | 5,661 | |
Pension and other benefit liabilities | 545 | 548 |
Other long-term liabilities | 875 | 867 |
Long-term debt (Note 9, 10) | 21,227 | 19,804 |
Deferred income taxes | 11,608 | 11,974 |
Total liabilities | 38,033 | 38,854 |
Shareholders' equity | ||
Share capital | 25,285 | 25,689 |
Additional paid-in capital | 105 | 94 |
Accumulated other comprehensive income (Note 7) | 951 | 2,680 |
Retained earnings | 19,863 | 19,429 |
46,204 | 47,892 | |
Non-controlling interest | 943 | 998 |
Total equity | 47,147 | 48,890 |
Total liabilities and equity | $ 85,180 | $ 87,744 |
See Contingencies (Note 14). |
See Notes to Interim Consolidated Financial Statements. |
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
For the three months | For the six months | |||
(in millions of Canadian dollars) | 2025 | 2024 | 2025 | 2024 |
Operating activities | ||||
Net income | $ 1,234 | $ 903 | $ 2,143 | $ 1,677 |
Reconciliation of net income to cash provided by operating activities: | ||||
Depreciation and amortization | 493 | 473 | 997 | 940 |
Deferred income tax expense | 9 | 18 | 35 | 35 |
Pension recovery and funding (Note 12) | (95) | (75) | (190) | (151) |
Gain on sale of equity investment (Note 4) | (333) | � | (333) | � |
Settlement of Mexican taxes (Note 5) | (1) | � | (12) | � |
Settlement of foreign currency forward contracts (Note 10) | � | � | � | (65) |
Other operating activities, net | 39 | (69) | 28 | (68) |
Changes in non-cash working capital balances related to operations | 9 | 28 | (157) | (75) |
Net cash provided by operating activities | 1,355 | 1,278 | 2,511 | 2,293 |
Investing activities | ||||
Additions to properties | (743) | (808) | (1,454) | (1,335) |
Additions to Meridian Speedway properties | (12) | (16) | (24) | (20) |
Proceeds from sale of properties and other assets | 4 | 9 | 15 | 10 |
Proceeds from sale of equity investment (Note 4) | 493 | � | 493 | � |
Other investing activities, net | (48) | 33 | (51) | 21 |
Net cash used in investing activities | (306) | (782) | (1,021) | (1,324) |
Financing activities | ||||
Dividends paid | (210) | (178) | (387) | (355) |
Issuance of Common Shares | 30 | 20 | 38 | 42 |
Purchase of Common Shares (Note 11) | (1,393) | � | (1,740) | � |
Repayment of long-term debt, excluding commercial paper (Note 9) | (5) | (149) | (940) | (220) |
Issuance of long-term debt, excluding commercial paper (Note 9) | 1,392 | � | 3,102 | � |
Net repayment of commercial paper (Note 9) | (722) | (157) | (1,175) | (362) |
Net issuance (repayment) of short term borrowings (Note 9) | 8 | � | (277) | � |
Other financing activities, net | (1) | � | (6) | � |
Net cash used in financing activities | (901) | (464) | (1,385) | (895) |
Effect of foreign currency fluctuations on foreign-denominated | (44) | 6 | (45) | 19 |
Cash position | ||||
Net increase in cash and cash equivalents | 104 | 38 | 60 | 93 |
Cash and cash equivalents at beginning of period | 695 | 519 | 739 | 464 |
Cash and cash equivalents at end of period | $ 799 | $ 557 | $ 799 | $ 557 |
Supplemental cash flow information | ||||
Income taxes paid | $ 409 | $ 309 | $ 646 | $ 551 |
Interest paid | $ 234 | $ 161 | $ 414 | $ 406 |
See Notes to Interim Consolidated Financial Statements. |
INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(unaudited)
For the three months ended June 30 | ||||||||||
(in millions of Canadian dollars | Common | Share capital | Additional paid-in capital | Accumulated other comprehensive income (loss) | Retained earnings | Total shareholders' equity | Non- | Total equity | ||
Balance as at April 1, 2025 | 930.4 | $ 107 | $ 2,653 | $ 19,883 | $ 48,246 | $ 997 | ||||
Net income | � | � | � | � | 1,234 | 1,234 | � | 1,234 | ||
Other comprehensive loss (Note 7) | � | � | � | (1,702) | � | (1,702) | (54) | (1,756) | ||
Dividends declared ( | � | � | � | � | (210) | (210) | � | (210) | ||
Effect of stock-based compensation expense | � | � | 4 | � | � | 4 | � | 4 | ||
Common Shares repurchased (Note 11) | (13.1) | (354) | � | � | (1,044) | (1,398) | � | (1,398) | ||
Shares issued under stock option plan | 0.6 | 36 | (6) | � | � | 30 | � | 30 | ||
Balance as at June 30, 2025 | 917.9 | $ 105 | $ 951 | $ 19,863 | $ 46,204 | $ 943 | ||||
Balance as at April 1, 2024 | 932.6 | $ 95 | $ 77 | $ 17,018 | $ 42,819 | $ 942 | ||||
Net income (loss) | � | � | � | � | 905 | 905 | (2) | 903 | ||
Other comprehensive income (Note 7) | � | � | � | 302 | � | 302 | 11 | 313 | ||
Dividends declared ( | � | � | � | � | (178) | (178) | � | (178) | ||
Effect of stock-based compensation expense | � | � | 3 | � | � | 3 | � | 3 | ||
Shares issued under stock option plan | 0.5 | 26 | (5) | � | � | 21 | � | 21 | ||
Balance as at June 30, 2024 | 933.1 | $ 93 | $ 379 | $ 17,745 | $ 43,872 | $ 951 |
For the six months ended June 30 | ||||||||||
(in millions of Canadian dollars | Common | Share capital | Additional paid-in capital | Accumulated other comprehensive Income (loss) | Retained earnings | Total shareholders' equity | Non- | Total equity | ||
Balance at January 1, 2025 | 933.5 | $ 94 | $ 2,680 | $ 19,429 | $ 47,892 | $ 998 | ||||
Net income (loss) | � | � | � | � | 2,144 | 2,144 | (1) | 2,143 | ||
Contribution from non-controlling interest | � | � | � | � | � | � | 1 | 1 | ||
Other comprehensive loss (Note 7) | � | � | � | (1,729) | � | (1,729) | (55) | (1,784) | ||
Dividends declared ( | � | � | � | � | (387) | (387) | � | (387) | ||
Effect of stock-based compensation expense | � | � | 20 | � | � | 20 | � | 20 | ||
Common Shares repurchased (Note 11) | (16.4) | (450) | � | � | (1,323) | (1,773) | � | (1,773) | ||
Shares issued under stock option plan | 0.8 | 46 | (9) | � | � | 37 | � | 37 | ||
Balance as at June 30, 2025 | 917.9 | $ 105 | $ 951 | $ 19,863 | $ 46,204 | $ 943 | ||||
Balance at January 1, 2024 | 932.1 | $ 88 | $ (618) | $ 16,420 | $ 41,492 | $ 919 | ||||
Net income (loss) | � | � | � | � | 1,680 | 1,680 | (3) | 1,677 | ||
Contribution from non-controlling interest | � | � | � | � | � | � | 1 | 1 | ||
Other comprehensive income (Note 7) | � | � | � | 997 | � | 997 | 34 | 1,031 | ||
Dividends declared ( | � | � | � | � | (355) | (355) | � | (355) | ||
Effect of stock-based compensation expense | � | � | 16 | � | � | 16 | � | 16 | ||
Shares issued under stock option plan | 1.0 | 53 | (11) | � | � | 42 | � | 42 | ||
Balance as at June 30, 2024 | 933.1 | $ 93 | $ 379 | $ 17,745 | $ 43,872 | $ 951 |
See Notes to Interim Consolidated Financial Statements. |
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2025
(unaudited)
1Description of business and basis of presentation
Canadian Pacific Kansas City Limited ("CPKC" or the "Company") owns and operates a transcontinental freight railway spanning
These unaudited interim consolidated financial statements ("Interim Consolidated Financial Statements") have been prepared in accordance with accounting principles generally accepted in the
The Company's operations and income for interim periods can be affected by seasonal fluctuations such as changes in customer demand and weather conditions, and may not be indicative of annual results.
Operating segment
The Company only has one operating segment: rail transportation. The Company's measure of segment profit is reported on the Interim Consolidated Statements of Income as "Net income attributable to controlling shareholders". CPKC's significant segment expenses are consistent with the expenses presented on the Interim Consolidated Statements of Income.
2Accounting changes
Recently adopted accounting standards
The accounting standards that have become effective during the three and six months ended June 30, 2025 did not have a material impact on the Interim Consolidated Financial Statements.
Accounting standards not yet adopted
Recently issued accounting pronouncements are not expected to have a material impact on the Company's financial position or results of operations when they are adopted.
3Revenues
The following table presents disaggregated information about the Company's revenues from contracts with customers by major source:
For the three months | For the six months | |||
(in millions of Canadian dollars) | 2025 | 2024 | 2025 | 2024 |
Grain | $ 743 | $ 665 | $ 1,531 | $ 1,395 |
Coal | 256 | 236 | 513 | 445 |
Potash | 167 | 180 | 323 | 317 |
Fertilizers and sulphur | 98 | 103 | 212 | 207 |
Forest products | 195 | 203 | 412 | 405 |
Energy, chemicals and plastics | 712 | 695 | 1,470 | 1,397 |
Metals, minerals and consumer products | 444 | 464 | 892 | 904 |
Automotive | 330 | 358 | 645 | 623 |
Intermodal | 684 | 630 | 1,358 | 1,268 |
Total freight revenues | 3,629 | 3,534 | 7,356 | 6,961 |
Non-freight excluding leasing revenues | 44 | 43 | 85 | 106 |
Revenues from contracts with customers | 3,673 | 3,577 | 7,441 | 7,067 |
Leasing revenues | 26 | 26 | 53 | 56 |
Total revenues | $ 3,699 | $ 3,603 | $ 7,494 | $ 7,123 |
4Gain on sale of equity investment
On April1, 2025, CPKC sold its
5Income taxes
The effective income tax rate including discrete items for the three and six months ended June 30, 2025 was
For the three months ended June 30, 2025, the effective income tax rate was
For the three months ended June 30, 2024, the effective income tax rate was
For the six months ended June 30, 2025, the effective tax rate was
For the six months ended June 30, 2024, the effective tax rate was
Mexican Tax Settlements
During the six months ended June 30, 2025, the Company received final audit letters for Kansas City Southern de México, S.A. de C.V. (also known as Canadian Pacific Kansas City Mexico) ("CPKCM") for 2021 and a payment of
2014 Tax Assessment
CPKCM's 2014 Tax Assessment is currently in litigation (see Note 14).
6Earnings per share
For the three months | For the six months | |||
(in millions, except per share data) | 2025 | 2024 | 2025 | 2024 |
Net income attributable to controlling shareholders | $ 1,234 | $ 905 | $ 2,144 | $ 1,680 |
Weighted-average basic shares outstanding | 923.8 | 932.8 | 928.4 | 932.6 |
Dilutive effect of stock options | 1.0 | 1.8 | 1.1 | 1.9 |
Weighted-average diluted shares outstanding | 924.8 | 934.6 | 929.5 | 934.5 |
Earnings per share - basic | $ 1.34 | $ 0.97 | $ 2.31 | $ 1.80 |
Earnings per share - diluted | $ 1.33 | $ 0.97 | $ 2.31 | $ 1.80 |
For the three and six months ended June 30, 2025, there were 1.8million and 1.6million options, respectively, excluded from the computation of diluted earnings per share because their effects were not dilutive (three and six months ended June 30, 2024 - 0.7million and 0.5million, respectively).
7Changes in Accumulated other comprehensive income ("AOCI") by component
Changes inAOCI attributable to controlling shareholders, net of tax, by component are as follows:
(in millions of Canadian dollars) | Foreigncurrency | Derivatives | Pensionandpost- retirementdefined benefit plans | Equity | Total |
Opening balance, April 1, 2025 | $ 3,385 | $ 10 | $ (737) | $ (5) | $ 2,653 |
Other comprehensive (loss) income before reclassifications | (1,707) | � | � | 3 | (1,704) |
Amounts reclassified from AOCI | � | 1 | 1 | � | 2 |
Net other comprehensive (loss) income | (1,707) | 1 | 1 | 3 | (1,702) |
Balance as at June 30, 2025 | $ 1,678 | $ 11 | $ (736) | $ (2) | $ 951 |
Opening balance, April 1, 2024 | $ 1,522 | $ 6 | $ (1,454) | $ 3 | $ 77 |
Other comprehensive income (loss) before reclassifications | 294 | � | � | (2) | 292 |
Amounts reclassified from AOCI | � | 2 | 8 | � | 10 |
Net other comprehensive income (loss) | 294 | 2 | 8 | (2) | 302 |
Balance as at June 30, 2024 | $ 1,816 | $ 8 | $ (1,446) | $ 1 | $ 379 |
Foreigncurrency | Derivatives | Pensionandpost- retirementdefined benefit plans | Equity | Total | |
Opening balance, January 1, 2025 | $ 3,413 | $ 10 | $ (738) | $ (5) | $ 2,680 |
Other comprehensive loss before reclassifications | (1,735) | � | � | 3 | (1,732) |
Amounts reclassified from AOCI | � | 1 | 2 | � | 3 |
Net other comprehensive (loss) income | (1,735) | 1 | 2 | 3 | (1,729) |
Balance as at June 30, 2025 | $ 1,678 | $ 11 | $ (736) | $ (2) | $ 951 |
Opening balance, January 1, 2024 | $ 837 | $ 5 | $ (1,463) | $ 3 | $ (618) |
Other comprehensive income (loss) before reclassifications | 979 | � | � | (2) | 977 |
Amounts reclassified from AOCI | � | 3 | 17 | � | 20 |
Net other comprehensive income (loss) | 979 | 3 | 17 | (2) | 997 |
Balance as at June 30, 2024 | $ 1,816 | $ 8 | $ (1,446) | $ 1 | $ 379 |
8 Accounts receivable, net
(in millions of Canadian dollars) | As at June 30, 2025 | As at December 31, 2024 |
Total accounts receivable | $ 2,130 | $ 2,066 |
Allowance for credit losses | (125) | (98) |
Total accounts receivable, net | $ 2,005 | $ 1,968 |
9Debt
During the six months ended June 30, 2025, the Company repaid, at maturity, the remaining balance of
Issuance of long-term debt
During the three months ended June 30, 2025, the Company issued
In addition to the second quarter issuances, during the six months ended June 30, 2025, the Company issued
The issued Notes pay interest semi-annually and carry a negative pledge.
Term credit facility
During the six months ended June 30, 2025, the Company entered into, and fully repaid, a
Credit facility
The Company's revolving credit facility agreement (the "facility") consists of a five-year
Commercial paper program
The Company has a commercial paper program, under which it may issue up to a maximum aggregate principal amount of
10Financial instruments
A. Fair values of financial instruments
The Company categorizes its financial assets and liabilities measured at fair value into a three-level hierarchy that prioritizes those inputs to valuation techniques used to measure fair value based on the degree to which they are observable. The three levels of the fair value hierarchy are as follows: Level 1 inputs are quoted prices in active markets for identical assets and liabilities; Level 2 inputs, other than quoted prices included within Level 1, are observable for the asset or liability either directly or indirectly; and Level 3 inputs are not observable in the market.
The Company's short-term financial instruments include cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, and short-term borrowings, including commercial paper and term loans. The carrying value of short-term financial instruments approximate their fair value.
The carrying value of the Company's debt does not approximate its fair value. The estimated fair value has been determined based on market information, where available, or by discounting future payments of principal and interest at estimated interest rates expected to be available to the Company at the balance sheet date. All measurements are classified as Level 2. The Company's long-term debt, including current maturities, with a carrying value of
B. Financial risk management
Foreign exchange ("FX") management
Net investment hedge
The majority of the Company's
Mexican Peso -
The Company's Mexican subsidiaries have net
The Company measured the foreign currency derivative contracts at fair value each period and recognized any change in "Other income". The cash flows associated with these instruments were classified as "Operating activities" in the Interim Consolidated Statements of Cash Flows. The Company's foreign currency forward contracts were executed with counterparties in the
On January 12, 2024, the Company settled all outstanding foreign currency forward contracts, resulting in a cash outflow of
11Share repurchases
On February 27, 2025, the Company announced a normal course issuer bid ("NCIB"), commencing March 3, 2025, to purchase up to 37.3million Common Shares in the open market for cancellation on or before March 2, 2026. All purchases were made in accordance with the respective NCIB at prevailing market prices plus brokerage fees, with consideration allocated to "Share capital" up to the average carrying amount of the shares and any excess allocated to "Retained earnings".
In accordance with Canadian tax legislation, the Company has accrued for a
The following table provides activities under the share repurchase program:
For the three months | For the six months | |
2025 | 2025 | |
Number of Common Shares repurchased | 12,882,454 | 16,363,112 |
Weighted-average price per share(1) | ||
Amount of repurchase (in millions of Canadian dollars)(1) |
(1)Includes brokerage fees and applicable tax on share repurchases. |
12Pension and other benefits
During the three and six months ended June 30, 2025, the Company made contributions to its defined benefit pension plans of
Net periodic benefit (recovery) cost for defined benefit pension plans and other benefits included the following components:
For the three months ended June 30 | ||||||
Pensions | Other benefits | Total | ||||
(in millions of Canadian dollars) | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 |
Current service cost | $ 21 | $ 21 | $ 4 | $ 3 | $ 25 | $ 24 |
Other components of net periodic benefit (recovery) cost: | ||||||
Interest cost on benefit obligation | 116 | 117 | 6 | 6 | 122 | 123 |
Expected return on plan assets | (231) | (222) | � | � | (231) | (222) |
Recognized net actuarial loss (gain) | 2 | 10 | (1) | � | 1 | 10 |
Amortization of prior service costs | 1 | 1 | � | � | 1 | 1 |
Total other components of net periodic benefit (recovery) cost | (112) | (94) | 5 | 6 | (107) | (88) |
Net periodic benefit (recovery) cost | $ (91) | $ (73) | $ 9 | $ 9 | $ (82) | $ (64) |
For the six months ended June 30 | ||||||
Pensions | Other benefits | Total | ||||
(in millions of Canadian dollars) | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 |
Current service cost | $ 42 | $ 42 | $ 7 | $ 6 | $ 49 | $ 48 |
Other components of net periodic benefit (recovery) cost: | ||||||
Interest cost on benefit obligation | 233 | 234 | 11 | 12 | 244 | 246 |
Expected return on plan assets | (463) | (445) | � | � | (463) | (445) |
Recognized net actuarial loss (gain) | 4 | 20 | (1) | � | 3 | 20 |
Amortization of prior service costs | 2 | 3 | � | � | 2 | 3 |
Total other components of net periodic benefit (recovery) cost | (224) | (188) | 10 | 12 | (214) | (176) |
Net periodic benefit (recovery) cost | $ (182) | $ (146) | $ 17 | $ 18 | $ (165) | $ (128) |
13Stock-based compensation
At June 30, 2025, the Company had several stock-based compensation plans including stock option plans, various cash-settled liability plans, and an employee share purchase plan. These plans resulted in an expense for the three and six months ended June 30, 2025 of
Stock options plan
In the six months ended June 30, 2025, under the Company's stock options plan, the Company issued 967,335 options at the weighted-average price of
Under the fair value method, the fair value of the stock options at the grant date was approximately
Performance share unit plans
During the six months ended June 30, 2025, the Company issued 611,516 Performance Share Units ("PSUs") with a grant date fair value of
The performance period for all PSUs and all PDSUs granted in the six months ended June 30, 2025 is January 1, 2025 to December 31, 2027 and the performance factors are Free Cash Flow ("FCF") and Total Shareholder Return ("TSR") compared to the S&P/TSX 60 Index, TSR compared to the S&P 500 Industrials Index, and TSR compared to Class I railways.
The performance period for all of the 415,660 PSUs and 13,506 PDSUs granted in 2022 was January 1, 2022 to December 31, 2024, and the performance factors were FCF, Adjusted net debt to Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization ("EBITDA"), TSR compared to the S&P/TSX 60 Index, and TSR compared to the S&P 500 Industrials Index. The resulting payout was
14Contingencies
Litigation
In the normal course of its operations, the Company becomes involved in various legal actions, including claims relating to injuries and damage to property. The Company maintains provisions it considers to be adequate for such actions. While the final outcome with respect to actions outstanding or pending at June 30, 2025 cannot be predicted with certainty, it is the opinion of management that their resolution will not have a material adverse effect on the Company's business, financial position, results of operations, or liquidity. However, an unexpected adverse resolution of one or more of these legal actions could have a material adverse effect on the Company's business, financial position, results of operations, or liquidity in a particular quarter or fiscal year.
Legal proceedings related to Lac-Mégantic rail accident
On July 6, 2013, a train carrying petroleum crude oil operated by Montréal
Following the derailment, MMAC sought court protection in
A number of legal proceedings, set out below, were commenced in
(1)
(2) TheAGQ sued the Company in the
(3) A class action in theϳé Superior Court on behalf of persons and entities residing in, owning or leasing property in, operating a business in, or physically present in Lac-Mégantic at the time of the derailment was certified against the Company on May 8, 2015 (the "Class Action"). Other defendants including MMAC and Mr. Thomas Harding ("Harding") were added to the Class Action on January 25, 2017. On November 28, 2019, the plaintiffs' motion to discontinue their action against Harding was granted. The Class Action seeks unquantified damages, including for wrongful death, personal injury, property damage, and economic loss.
(4) Eight subrogated insurers sued the Company in theϳé Superior Court claiming approximately
On December 11, 2017, the AGQ Action, the Class Action and the Promutuel Action were consolidated. The joint liability trial of these consolidated claims commenced on September 21, 2021 with oral arguments ending on June 15, 2022. The
(5) Forty-eight plaintiffs (all individual claims joined in one action) sued the Company,MMAC, and Harding in the
(6) TheMMAR
(7) The class and mass tort action commenced against the Company in June 2015 in
(8) The trustee for the wrongful death trust commencedCarmack Amendment claims against the Company in North Dakota Federal Court, seeking to recover approximately
At this stage of the proceedings, any potential responsibility and the quantum of potential losses cannot be determined. Nevertheless, the Company denies liability and is vigorously defending these proceedings.
Court decision related to Remington Development Corporation legal claim
On October 20, 2022, the Court of King's Bench of
2014 tax assessment
On April 13, 2022, the Servicio de Administracion Tributaria ("SAT") delivered an audit assessment of CPKCM's 2014 tax returns (the "2014 Assessment"). As at June 30, 2025, the 2014 Assessment, including inflation, interest, and penalties was Ps.6,372million (
On July 7, 2022, CPKCM filed an administrative appeal (the "Administrative Appeal") before the SAT, seeking to revoke the 2014 Assessment on the basis that the SAT's notification of the 2014 Assessment through the tax mailbox was not legal, because it was in violation of a tax mailbox injunction previously granted to CPKCM on March 19, 2015. On September 26, 2022, the SAT dismissed the Administrative Appeal, on the basis that it was not a timely submission (the "Administrative Appeal Resolution").
On October 10, 2022, CPKCM submitted an annulment lawsuit (the "Annulment Lawsuit") before the Federal Administrative Court, challenging the 2014 Assessment, its notification, and the Administrative Appeal Resolution. On April 24, 2024, the Supreme Chamber of the Federal Administrative Court resolved the annulment lawsuit, confirming the Administrative Appeal Resolution and the 2014 Assessment (the "Administrative Court Resolution").
On June 21, 2024, CPKCM challenged the Administrative Court Resolution by submitting an Amparo lawsuit (Demanda de Amparo) before the Collegiate Circuit Court (Tribunal Colegiado de Circuito). On June 4, 2025, the Collegiate Circuit Court unanimously granted CPKCM's Amparo petition, vacating the prior decision and sending the matter back to the Supreme Chamber of the Federal Administrative Court with an order to issue a new resolution addressing CPKCM's arguments that were presented in the Annulment Lawsuit. On June 25, 2025, the Supreme Chamber of the Federal Administrative Court voted against CPKCM in the Annulment Lawsuit. CPKCM has the right to appeal the decision by filing an amparo appeal (juicio de amparo) with the Collegiate Circuit Court. The deadline to file the amparo appeal is August 21, 2025. CPKCM expects to prevail based on the technical merits of its case.
On January 5, 2023, the Federal Administrative Court granted a definitive injunction against the enforcement and collection of the 2014 Assessment. On February 19, 2025, the Federal Administrative Court issued the new resolution granting the injunction as long as the 2014 Assessment is duly guaranteed.
Environmental liabilities
Environmental remediation accruals, recognized on an undiscounted basis unless a reliable, determinable estimate as to an amount and timing of costs can be established, cover site-specific remediation programs.
The accruals for environmental remediation represent the Company's best estimate of its probable future obligation and include both asserted and unasserted claims, without reduction for anticipated recoveries from third parties. Although the recognized accruals include the Company's best estimate of all probable costs, the Company's total environmental remediation costs cannot be predicted with certainty. Accruals for environmental remediation may change from time to time as new information about previously untested sites becomes known, and as environmental laws and regulations evolve and advances are made in environmental remediation technology. The accruals may also vary as the courts decide legal proceedings against outside parties responsible for contamination. These potential charges, which cannot be quantified at this time, may materially affect income in the particular period in which a charge is recognized. Costs related to existing, but as yet unknown, or future contamination will be accrued in the period in which they become probable and reasonably estimable.
The expense included in "Purchased services and other" in the Company's Interim Consolidated Statements of Income for the three and six months ended June 30, 2025 was
Summary of Rail Data
Second Quarter | Year-to-date | ||||||||
Financial (in millions, except per share data) | 2025 | 2024 | Total Change | % Change | 2025 | 2024 | Total Change | % Change | |
Revenues | |||||||||
Freight | $ 3,629 | $ 3,534 | $ 95 | 3 | $ 7,356 | $ 6,961 | $ 395 | 6 | |
Non-freight | 70 | 69 | 1 | 1 | 138 | 162 | (24) | (15) | |
Total revenues | 3,699 | 3,603 | 96 | 3 | 7,494 | 7,123 | 371 | 5 | |
Operating expenses | |||||||||
Compensation and benefits | 659 | 612 | 47 | 8 | 1,341 | 1,302 | 39 | 3 | |
Fuel | 405 | 466 | (61) | (13) | 886 | 924 | (38) | (4) | |
Materials | 124 | 97 | 27 | 28 | 248 | 191 | 57 | 30 | |
Equipment rents | 103 | 82 | 21 | 26 | 202 | 164 | 38 | 23 | |
Depreciation and amortization | 493 | 473 | 20 | 4 | 997 | 940 | 57 | 6 | |
Purchased services and other | 572 | 606 | (34) | (6) | 1,160 | 1,186 | (26) | (2) | |
Total operating expenses | 2,356 | 2,336 | 20 | 1 | 4,834 | 4,707 | 127 | 3 | |
Operating income | 1,343 | 1,267 | 76 | 6 | 2,660 | 2,416 | 244 | 10 | |
Other income | (16) | (40) | 24 | (60) | (9) | (42) | 33 | (79) | |
Other components of net periodic benefit recovery | (107) | (88) | (19) | 22 | (214) | (176) | (38) | 22 | |
Net interest expense | 208 | 200 | 8 | 4 | 424 | 406 | 18 | 4 | |
Gain on sale of equity investment | (333) | � | (333) | 100 | (333) | � | (333) | 100 | |
Income before income tax expense | 1,591 | 1,195 | 396 | 33 | 2,792 | 2,228 | 564 | 25 | |
Current income tax expense | 348 | 274 | 74 | 27 | 614 | 516 | 98 | 19 | |
Deferred income tax expense | 9 | 18 | (9) | (50) | 35 | 35 | � | � | |
Income tax expense | 357 | 292 | 65 | 22 | 649 | 551 | 98 | 18 | |
Net income | $ 1,234 | $ 903 | $ 331 | 37 | $ 2,143 | $ 1,677 | $ 466 | 28 | |
Net loss attributable to non-controlling interest | � | (2) | 2 | (100) | (1) | (3) | 2 | (67) | |
Net income attributable to controlling shareholders | $ 1,234 | $ 905 | $ 329 | 36 | $ 2,144 | $ 1,680 | $ 464 | 28 | |
Operating ratio (%) | 63.7 | 64.8 | (1.1) | (110) bps | 64.5 | 66.1 | (1.6) | (160) bps | |
Basic earnings per share | $ 1.34 | $ 0.97 | $ 0.37 | 38 | $ 2.31 | $ 1.80 | $ 0.51 | 28 | |
Diluted earnings per share | $ 1.33 | $ 0.97 | $ 0.36 | 37 | $ 2.31 | $ 1.80 | $ 0.51 | 28 | |
Shares Outstanding | |||||||||
Weighted average number of basic shares outstanding (millions) | 923.8 | 932.8 | (9.0) | (1) | 928.4 | 932.6 | (4.2) | � | |
Weighted average number of diluted shares outstanding (millions) | 924.8 | 934.6 | (9.8) | (1) | 929.5 | 934.5 | (5.0) | (1) | |
Foreign Exchange | |||||||||
Average foreign exchange rate (U.S.$/Canadian$) | 0.72 | 0.73 | (0.01) | (1) | 0.71 | 0.74 | (0.03) | (4) | |
Average foreign exchange rate (Canadian$/U.S.$) | 1.38 | 1.37 | 0.01 | 1 | 1.41 | 1.36 | 0.05 | 4 | |
Average foreign exchange rate (Mexican peso/Canadian$) | 14.09 | 12.61 | 1.48 | 12 | 14.16 | 12.61 | 1.55 | 12 | |
Average foreign exchange rate (Canadian$/Mexican peso) | 0.0710 | 0.0794 | (0.0084) | (11) | 0.0706 | 0.0794 | (0.0088) | (11) |
Summary of Rail Data (Continued)
Second Quarter | Year-to-date | ||||||||||
Commodity Data | 2025 | 2024 | Total Change | % Change | FX Adjusted % Change(1) | 2025 | 2024 | Total Change | % Change | FX Adjusted % Change(1) | |
Freight Revenues (millions) | |||||||||||
- Grain | $ 743 | $ 665 | $ 78 | 12 | 11 | $ 1,531 | $ 1,395 | $ 136 | 10 | 7 | |
- Coal | 256 | 236 | 20 | 8 | 8 | 513 | 445 | 68 | 15 | 14 | |
- Potash | 167 | 180 | (13) | (7) | (8) | 323 | 317 | 6 | 2 | � | |
- Fertilizers and sulphur | 98 | 103 | (5) | (5) | (6) | 212 | 207 | 5 | 2 | � | |
- Forest products | 195 | 203 | (8) | (4) | (5) | 412 | 405 | 7 | 2 | (1) | |
- Energy, chemicals and plastics | 712 | 695 | 17 | 2 | 2 | 1,470 | 1,397 | 73 | 5 | 3 | |
- Metals, minerals and consumer products | 444 | 464 | (20) | (4) | (3) | 892 | 904 | (12) | (1) | (2) | |
- Automotive | 330 | 358 | (28) | (8) | (5) | 645 | 623 | 22 | 4 | 5 | |
- Intermodal | 684 | 630 | 54 | 9 | 8 | 1,358 | 1,268 | 90 | 7 | 6 | |
Total Freight Revenues | $ 3,629 | $ 3,534 | $ 95 | 3 | 3 | $ 7,356 | $ 6,961 | $ 395 | 6 | 4 | |
Freight Revenue per Revenue Ton-Mile ("RTM") (cents) | |||||||||||
- Grain | 4.96 | 5.02 | (0.06) | (1) | (2) | 5.12 | 5.02 | 0.10 | 2 | (1) | |
- Coal | 4.22 | 4.07 | 0.15 | 4 | 3 | 4.33 | 4.03 | 0.30 | 7 | 6 | |
- Potash | 3.15 | 3.63 | (0.48) | (13) | (14) | 3.32 | 3.49 | (0.17) | (5) | (7) | |
- Fertilizers and sulphur | 8.03 | 7.89 | 0.14 | 2 | 1 | 8.01 | 7.75 | 0.26 | 3 | 1 | |
- Forest products | 8.72 | 9.05 | (0.33) | (4) | (5) | 9.00 | 9.02 | (0.02) | � | (3) | |
- Energy, chemicals and plastics | 7.78 | 7.21 | 0.57 | 8 | 8 | 7.80 | 7.21 | 0.59 | 8 | 6 | |
- Metals, minerals and consumer products | 9.05 | 9.33 | (0.28) | (3) | (2) | 9.31 | 9.34 | (0.03) | � | (1) | |
- Automotive | 23.31 | 27.41 | (4.10) | (15) | (12) | 24.35 | 27.05 | (2.70) | (10) | (9) | |
- Intermodal | 6.67 | 7.28 | (0.61) | (8) | (9) | 6.98 | 7.23 | (0.25) | (3) | (5) | |
Total Freight Revenue per RTM | 6.54 | 6.78 | (0.24) | (4) | (4) | 6.73 | 6.70 | 0.03 | � | (1) | |
Freight Revenue per Carload | |||||||||||
- Grain | $ 5,210 | $ 5,159 | $ 51 | 1 | � | $ 5,541 | $ 5,341 | $ 200 | 4 | 1 | |
- Coal | 2,159 | 2,167 | (8) | � | (1) | 2,165 | 2,050 | 115 | 6 | 4 | |
- Potash | 3,523 | 3,644 | (121) | (3) | (4) | 3,704 | 3,669 | 35 | 1 | (1) | |
- Fertilizers and sulphur | 6,282 | 6,059 | 223 | 4 | 3 | 6,347 | 6,053 | 294 | 5 | 2 | |
- Forest products | 5,945 | 5,867 | 78 | 1 | � | 6,095 | 5,745 | 350 | 6 | 3 | |
- Energy, chemicals and plastics | 4,989 | 4,881 | 108 | 2 | 2 | 5,154 | 4,869 | 285 | 6 | 3 | |
- Metals, minerals and consumer products | 3,541 | 3,447 | 94 | 3 | 4 | 3,571 | 3,420 | 151 | 4 | 4 | |
- Automotive | 5,288 | 5,416 | (128) | (2) | 1 | 5,366 | 5,115 | 251 | 5 | 6 | |
- Intermodal | 1,489 | 1,561 | (72) | (5) | (5) | 1,517 | 1,555 | (38) | (2) | (4) | |
Total Freight Revenue per Carload | $ 3,164 | $ 3,256 | $ (92) | (3) | (3) | $ 3,267 | $ 3,226 | $ 41 | 1 | � |
(1) | This earnings measure has no standardized meaning prescribed by GAAP and, therefore, is unlikely to be comparable to similar measures presented by other companies. This measure is defined and reconciled in Non-GAAP Measures of this Earnings Release. |
Summary of Rail Data (Continued)
Second Quarter | Year-to-date | ||||||||
Commodity Data | 2025 | 2024 | Total | % | 2025 | 2024 | Total | % | |
Millions of RTM | |||||||||
- Grain | 14,970 | 13,240 | 1,730 | 13 | 29,912 | 27,810 | 2,102 | 8 | |
- Coal | 6,073 | 5,794 | 279 | 5 | 11,856 | 11,046 | 810 | 7 | |
- Potash | 5,304 | 4,965 | 339 | 7 | 9,723 | 9,075 | 648 | 7 | |
- Fertilizers and sulphur | 1,220 | 1,305 | (85) | (7) | 2,647 | 2,671 | (24) | (1) | |
- Forest products | 2,236 | 2,244 | (8) | � | 4,579 | 4,488 | 91 | 2 | |
- Energy, chemicals and plastics | 9,148 | 9,644 | (496) | (5) | 18,849 | 19,363 | (514) | (3) | |
- Metals, minerals and consumer products | 4,905 | 4,974 | (69) | (1) | 9,586 | 9,675 | (89) | (1) | |
- Automotive | 1,416 | 1,306 | 110 | 8 | 2,649 | 2,303 | 346 | 15 | |
- Intermodal | 10,257 | 8,658 | 1,599 | 18 | 19,452 | 17,537 | 1,915 | 11 | |
Total RTMs | 55,529 | 52,130 | 3,399 | 7 | 109,253 | 103,968 | 5,285 | 5 | |
Carloads (thousands) | |||||||||
- Grain | 142.6 | 128.9 | 13.7 | 11 | 276.3 | 261.2 | 15.1 | 6 | |
- Coal | 118.6 | 108.9 | 9.7 | 9 | 237.0 | 217.1 | 19.9 | 9 | |
- Potash | 47.4 | 49.4 | (2.0) | (4) | 87.2 | 86.4 | 0.8 | 1 | |
- Fertilizers and sulphur | 15.6 | 17.0 | (1.4) | (8) | 33.4 | 34.2 | (0.8) | (2) | |
- Forest products | 32.8 | 34.6 | (1.8) | (5) | 67.6 | 70.5 | (2.9) | (4) | |
- Energy, chemicals and plastics | 142.7 | 142.4 | 0.3 | � | 285.2 | 286.9 | (1.7) | (1) | |
- Metals, minerals and consumer products | 125.4 | 134.6 | (9.2) | (7) | 249.8 | 264.3 | (14.5) | (5) | |
- Automotive | 62.4 | 66.1 | (3.7) | (6) | 120.2 | 121.8 | (1.6) | (1) | |
- Intermodal | 459.5 | 403.5 | 56.0 | 14 | 894.9 | 815.6 | 79.3 | 10 | |
Total Carloads | 1,147.0 | 1,085.4 | 61.6 | 6 | 2,251.6 | 2,158.0 | 93.6 | 4 |
Second Quarter | Year-to-date | ||||||||||
2025 | 2024 | Total | % | FX | 2025 | 2024 | Total | % | FX | ||
Operating Expenses (millions) | |||||||||||
Compensation and benefits | $ 659 | $ 612 | $ 47 | 8 | 9 | $ 1,341 | $ 1,302 | $ 39 | 3 | 3 | |
Fuel | 405 | 466 | (61) | (13) | (12) | 886 | 924 | (38) | (4) | (5) | |
Materials | 124 | 97 | 27 | 28 | 29 | 248 | 191 | 57 | 30 | 31 | |
Equipment rents | 103 | 82 | 21 | 26 | 23 | 202 | 164 | 38 | 23 | 18 | |
Depreciation and amortization | 493 | 473 | 20 | 4 | 4 | 997 | 940 | 57 | 6 | 4 | |
Purchased services and other | 572 | 606 | (34) | (6) | (5) | 1,160 | 1,186 | (26) | (2) | (3) | |
Total Operating Expenses | $ 2,356 | $ 2,336 | $ 20 | 1 | 1 | $ 4,834 | $ 4,707 | $ 127 | 3 | 2 |
(1) | This earnings measure has no standardized meaning prescribed by GAAP and, therefore, is unlikely to be comparable to similar measures presented by other companies. This measure is defined and reconciled in Non-GAAP Measures of this Earnings Release. |
Summary of Rail Data (Continued)
Second Quarter | Year-to-date | ||||||||
2025 | 2024 | Total Change | % Change | 2025 | 2024 | Total Change | % Change | ||
Operations Performance | |||||||||
Gross ton-miles ("GTMs") (millions) | 101,973 | 96,579 | 5,394 | 6 | 200,385 | 192,388 | 7,997 | 4 | |
Train miles (thousands) | 11,960 | 11,523 | 437 | 4 | 23,764 | 23,518 | 246 | 1 | |
Average train weight-excluding local traffic (tons) | 9,187 | 9,090 | 97 | 1 | 9,111 | 8,860 | 251 | 3 | |
Average train length-excluding local traffic (feet) | 7,844 | 7,761 | 83 | 1 | 7,737 | 7,538 | 199 | 3 | |
Average terminal dwell (hours) | 10.2 | 9.5 | 0.7 | 7 | 10.2 | 9.6 | 0.6 | 6 | |
Average train speed (miles per hour, or "mph")(1) | 19.3 | 19.3 | � | � | 19.2 | 19.2 | � | � | |
Locomotive productivity (GTMs / operating horsepower)(2) | 169 | 172 | (3) | (2) | 166 | 165 | 1 | 1 | |
Fuel efficiency(3) | 1.034 | 1.027 | 0.007 | 1 | 1.049 | 1.046 | 0.003 | � | |
105.5 | 99.2 | 6.3 | 6 | 210.2 | 201.3 | 8.9 | 4 | ||
Average fuel price ( | 2.77 | 3.44 | (0.67) | (19) | 2.99 | 3.39 | (0.40) | (12) | |
Total Employees and Workforce | |||||||||
Total employees (average)(5) | 20,138 | 20,441 | (303) | (1) | 19,943 | 20,219 | (276) | (1) | |
Total employees (end of period)(5) | 20,107 | 20,374 | (267) | (1) | 20,107 | 20,374 | (267) | (1) | |
Workforce (end of period)(6) | 20,189 | 20,482 | (293) | (1) | 20,189 | 20,482 | (293) | (1) | |
Safety Indicators(7) | |||||||||
FRA personal injuries per 200,000 employee-hours | 0.77 | 0.84 | (0.07) | (8) | 0.88 | 0.99 | (0.11) | (11) | |
FRA train accidents per million train-miles | 0.97 | 0.70 | 0.27 | 39 | 0.68 | 0.80 | (0.12) | (15) |
(1) | Average train speed is defined as a measure of the line-haul movement from origin to destination including terminal dwell hours. It is calculated by dividing the total train miles travelled by the total train hours operated. This calculation does not include delay time related to customers or foreign railroads and excludes the time and distance travelled by: i) trains used in or around CPKC's yards; ii) passenger trains; and iii) trains used for repairing track. An increase in average train speed indicates improved on-time performance resulting in improved asset utilization. |
(2) | Locomotive productivity is defined as the daily average GTMs divided by daily average operating horsepower. Operating horsepower excludes units offline, tied up or in storage, or in use on other railways, and includes foreign units. |
(3) | Fuel efficiency is defined as |
(4) | Fuel consumed includes gallons from freight, yard and commuter service but excludes fuel used in capital projects and other non-freight activities. |
(5) | An employee is defined as an individual currently engaged in full-time, part-time, or seasonal employment with CPKC. CPKC monitors employment levels in order to efficiently meet service and strategic requirements. The number of employees is a key driver to total compensation and benefits costs. |
(6) | Workforce is defined as employees plus contractors and consultants. |
(7) | Federal Railroad Administration ("FRA") personal injuries per 200,000 employee-hours and FRA train accidents per million train-miles for the three and six months ended June 30, 2024 have been restated to reflect new information available within specified periods stipulated by the FRA but that exceed the Company's financial reporting timeline. |
Non-GAAP Measures
The Company presents Non-GAAP measures to provide a basis for evaluating underlying earnings and liquidity trends in the Company's current period's financial results that can be compared with the results of operations in prior periods. Management believes these Non-GAAP measures facilitate a multi-period assessment of long-term profitability.
These Non-GAAP measures have no standardized meanings and are not defined by accounting principles generally accepted in
Non-GAAP Performance and Liquidity Measures
Beginning in the first quarter 2025, Core adjusted operating income, Core adjusted operating ratio, Core adjusted income, Core adjusted diluted earnings per share ("EPS"), Adjusted free cash, and Adjusted net debt to adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA") ratio have been used in continuity of the Non-GAAP measures previously known as Core adjusted combined operating income, Core adjusted combined operating ratio, Core adjusted combined income, Core adjusted combined diluted EPS, Adjusted combined free cash, and Adjusted combined net debt to adjusted combined EBITDA ratio respectively. No adjustments are required to the previously presented Non-GAAP measures as reported in 2024 to present them on a comparable basis, as Kansas City Southern ("KCS") was consolidated within the Company's results throughout the whole year and therefore, no combination adjustments exist.
The Company uses Core adjusted operating income, Core adjusted operating ratio, Core adjusted income, and Core adjusted diluted EPS to evaluate the Company's operating performance and for planning and forecasting future business operations and future profitability. In addition to the Core adjusted Non-GAAP performance measures noted above, other Non-GAAP liquidity measures include Adjusted free cash and Adjusted net debt to adjusted EBITDA ratio.
Management believes these Non-GAAP measures provide meaningful supplemental information about our financial results and improved comparability to past performance because they exclude certain significant items that are not considered indicative of future or past financial trends either by nature or amount. As a result, these items are excluded for management's assessment of operational performance, allocation of resources, and preparation of annual budgets. These significant items may include, but are not limited to, restructuring and asset impairment charges, individually significant gains and losses from sales of assets, acquisition-related costs, adjustments to provisions and settlements of Mexican taxes, a gain on sale of an equity investment, discrete tax items, changes in income tax rates, changes to an uncertain tax item, and certain items outside the control of management. Acquisition-related costs include legal, consulting, integration costs including third-party services and system migration, restructuring, and employee retention and synergy incentive costs. These items may not be non-recurring and may include items that are settled in cash. Specifically, due to the magnitude of the acquisition, its significant impact to the Company's business and complexity of integrating the acquired business and operations, the Company continues to expect to incur acquisition-related costs beyond the year of acquisition. Management believes excluding these significant items from GAAP results provides an additional viewpoint which may give users a consistent understanding of the Company's financial performance when performing a multi-period assessment including assessing the likelihood of future results. Accordingly, these Non-GAAP financial measures may provide additional insight to investors and other external users of the Company's financial information.
In addition, these Non-GAAP measures exclude KCS purchase accounting. KCS purchase accounting represents the amortization of basis differences being the incremental depreciation and amortization in relation to fair value adjustments to properties and intangible assets, incremental amortization in relation to fair value adjustments to KCS's investments, amortization of the change in fair value of debt of KCS assumed on April 14, 2023 (the "Control Date"), and depreciation and amortization of fair value adjustments that are attributable to the non-controlling interest, as recognized within "Depreciation and amortization", "Other income", "Net interest expense", and "Net loss attributable to non-controlling interest", respectively, in the Company's Interim Consolidated Statements of Income. All assets subject to KCS purchase accounting contribute to income generation and will continue to amortize over their estimated useful lives. Excluding KCS purchase accounting from GAAP results provides financial statement users with additional transparency by isolating the impact of KCS purchase accounting.
Significant items that impact "Net income attributable to controlling shareholders" as reported on a GAAP basis for the first six months of 2025, the twelve months of 2024 and the six months ended December 31, 2023 include:
2025:
- in the second quarter, a gain on sale of an equity investment of
($333 million after current income tax expense of$282 million net of deferred income tax recovery of$76 million ) recognized in "Gain on sale of equity investment", that favourably impacted Diluted EPS by$25 million 30 cents ; - during the first six months, acquisition-related costs of
in connection with the KCS acquisition ($39 million $29million after current income tax recovery of ), including an expense of$10 million $12million recognized in "Compensation and benefits" primarily related to retention and synergy related incentive compensation costs;$1million recognized in "Materials"; and$26million recognized in "Purchased services and other" primarily related to system migration, legal fees, and other third party purchased services, that unfavourably impacted Diluted EPS by3 cents as follows:- in the second quarter, acquisition-related costs of
in connection with theKCS acquisition ($19 million after current income tax recovery of$14 million ) including costs of$5 million recognized in "Compensation and benefits"; and$7 million recognized in "Purchased services and other", that unfavourably impacted Diluted EPS by$12 million 2 cents ; and - in the first quarter, acquisition-related costs of
in connection with theKCS acquisition ($20 million after current income tax recovery of$15 million ) including costs of$5 million recognized in "Compensation and benefits";$5 million recognized in "Materials"; and$1 million recognized in "Purchased services and other", that unfavourably impacted Diluted EPS by$14 million 2 cents .
- in the second quarter, acquisition-related costs of
2024:
- during the course of the year, a deferred income tax recovery of
on account of changes in tax rates, thatfavourably impacted Diluted EPS by$81 million 9 cents as follows:- in the fourth quarter, a deferred income tax recovery of
due to a decrease in the$78 million Louisiana state corporate income tax rate, thatfavourably impacted Diluted EPS by9 cents ; and - in the second quarter, a deferred income tax recovery of
due to a decrease in the$3 million Arkansas state corporate income tax rate, that had minimal impact on Diluted EPS;
- in the fourth quarter, a deferred income tax recovery of
- during the course of the year, adjustments to provisions and settlements of Mexican taxes of
recovery ($4 million after deferred income tax expense of$2 million ) recognized in "Compensation and benefits", that had minimal impact on Diluted EPS as follows:$2 million - in the fourth quarter, adjustments to provisions and settlements of Mexican taxes of
recovery ($7 million after deferred income tax expense of$6 million ) recognized in "Compensation and benefits", that had minimal impact on Diluted EPS;$1 million - in the third quarter, adjustments to provisions and settlements of Mexican taxes of
recovery ($7 million after deferred income tax expense of$6 million ) recognized in "Compensation and benefits", thatfavourably impacted Diluted EPS by$1 million 1 cent ; and - in the first quarter, adjustments to provisions and settlements of Mexican taxes of
expense ($10 million after deferred income tax recovery) recognized in "Compensation and benefits", thatunfavourably impacted Diluted EPS by$10 million 1 cent ;and
- in the fourth quarter, adjustments to provisions and settlements of Mexican taxes of
- during the course of the year, acquisition-related costs of
in connection with the KCS acquisition ($112 million $82million after current income tax recovery of ), including an expense of$30 million $18million recognized in "Compensation and benefits" primarily related to retention and synergy related incentive compensation costs;$6million recognized in "Materials"; and$88million recognized in "Purchased services and other" primarily related to system migration, relocation expenses, legal and consulting fees, that unfavourably impacted Diluted EPS by9 cents as follows:- in the fourth quarter, acquisition-related costs of
in connection with theKCS acquisition ($22 million $17million after current income tax recovery of$5million ) including costs of recognized in "Compensation and benefits",$1 million recognized in "Materials", and$1 million recognized in "Purchased services and other", that unfavourably impacted Diluted EPS by$20 million 2 cents ; - in the third quarter, acquisition-related costs of
in connection with theKCS acquisition ($36 million after current income tax recovery of$26 million ) including costs of$10 million recognized in "Compensation and benefits",$11 million recognized in "Materials", and$1 million recognized in "Purchased services and other", that unfavourably impacted Diluted EPS by$24 million 3 cents ; - in the second quarter, acquisition-related costs of
in connection with theKCS acquisition ($28 million after current income tax recovery of$19 million ) including costs of$9 million recognized in "Compensation and benefits",$2 million recognized in "Materials", and$2 million recognized in "Purchased services and other", that unfavourably impacted Diluted EPS by$24 million 2 cents ; and - in the first quarter, acquisition-related costs of
in connection with the KCS acquisition ($26 million $20million after current income tax recovery of ) including costs of$6 million $4million recognized in "Compensation and benefits",$2million recognized in "Materials", and$20million recognized in "Purchased services and other", that unfavourably impacted Diluted EPS by2 cents .
- in the fourth quarter, acquisition-related costs of
2023:
- during the six months ended December 31, 2023, a current tax expense of
related to a tax settlement with theServicio de Administracion Tributaria ("SAT") of$16 million and a reserve for the estimated impact of potential future audit settlements of$13 million , that unfavourably impacted Diluted EPS by$3 million 2 cents as follows:- in the fourth quarter, a current tax expense of
related to a tax settlement with the SAT that had minimal impact on Diluted EPS; and$1 million - in the third quarter, adjustments to provisions and settlements of Mexican taxes of
related to a tax settlement with theServicio de Administracion Tributaria ("SAT") of$15 million and reserves for the estimated impact of potential future audit settlements of$9 million of which$6 million was settled in the fourth quarter, that unfavourably impacted Diluted EPS by$3 million 2 cents ;
- in the fourth quarter, a current tax expense of
- during the six months ended December 31, 2023, a deferred income tax recovery of
on account of changes in tax rates and apportionment, thatfavourably impacted Diluted EPS by$21 million 3 cents as follows:- in the fourth quarter, a deferred income tax recovery of
due toCPKC unitary state apportionment changes, that favourably impacted Diluted EPS by$7 million 1 cent ; - in the third quarter, a deferred income tax recovery of
due to decreases in the$14 million Iowa andArkansas state corporate income tax rates, thatfavourably impacted Diluted EPS by2 cents ; and
- in the fourth quarter, a deferred income tax recovery of
- during the six months ended December 31, 2023, acquisition-related costs of
in connection with theKCS acquisition ($56 million after current income tax recovery of$42 million ), including an expense of$14 million recognized in "Compensation and benefits" primarily related to restructuring costs, retention and synergy related incentive compensation costs;$8 million recognized in "Materials";$2 million recognized in "Purchased services and other" primarily related to third party purchased services, that unfavourably impacted Diluted EPS by$46 million 4 cents as follows:- in the fourth quarter, acquisition-related costs of
($32 million after current income tax recovery of$24 million ), including costs of$8 million recognized in "Compensation and benefits",$7 million recognized in "Materials", and$1 million recognized in "Purchased services and other", thatunfavourably impacted Diluted EPS by$24 million 2 cents ; - in the third quarter, acquisition-related costs of
($24 million after current income tax recovery of$18 million ), including costs of$6 million recognized in "Compensation and benefits",$1 million recognized in "Materials", and$1 million recognized in "Purchased services and other", thatunfavourably impacted Diluted EPS by$22 million 2 cents .
- in the fourth quarter, acquisition-related costs of
KCS purchase accounting included in "Net income attributable to controlling shareholders" as reported on a GAAP basis for the first six months of 2025, the twelve months of 2024 and the last six months ended December 31, 2023 was as follows:
2025:
- during the first six months,KCS purchase accounting of
($187 million after deferred income tax recovery of$137 million ), including costs of$50 million recognized in "Depreciation and amortization",$178 million recognized in "Purchased services and other" related to the amortization of equity investments,$1 million recognized in "Net interest expense",$10 million recognized in "Other income", and a recovery of$1 million recognized in "Net loss attributable to non-controlling interest", that unfavourably impacted Diluted EPS by$3 million 14 cents as follows:- in the second quarter,KCS purchase accounting of
($95 million after deferred income tax recovery of$70 million ), including costs of$25 million recognized in "Depreciation and amortization",$91 million recognized in "Net interest expense", and a recovery of$5 million recognized in "Net loss attributable to non-controlling interest", that unfavourably impacted Diluted EPS by$1 million 7 cents ; and - in the first quarter,KCS purchase accounting of
($92 million after deferred income tax recovery of$67 million ), including costs of$25 million recognized in "Depreciation and amortization",$87 million recognized in "Purchased services and other",$1 million recognized in "Net interest expense",$5 million recognized in "Other income", and a recovery of$1 million recognized in "Net loss attributable to non-controlling interest", that unfavourably impacted Diluted EPS by$2 million 7 cents .
- in the second quarter,KCS purchase accounting of
2024:
- during the course of the year,KCS purchase accounting of
($352 million after deferred income tax recovery of$256 million ), including costs of$96 million recognized in "Depreciation and amortization",$333 million recognized in "Purchased services and other" related to the amortization of equity investments,$3 million recognized in "Net interest expense",$20 million recognized in "Other income", and a recovery of$3 million recognized in "Net loss attributable to non-controlling interest", that unfavourably impacted Diluted EPS by$7 million 27 cents as follows:- in the fourth quarter,KCS purchase accounting of
($93 million after deferred income tax recovery of$68 million ), including costs of$25 million recognized in "Depreciation and amortization",$87 million recognized in "Purchased services and other",$1 million recognized in "Net interest expense",$6 million recognized in "Other income", and a recovery of$1 million recognized in "Net loss attributable to non-controlling interest", that unfavourably impacted Diluted EPS by$2 million 8 cents ; - in the third quarter,KCS purchase accounting of
($89 million after deferred income tax recovery of$65 million ), including costs of$24 million recognized in "Depreciation and amortization",$85 million recognized in "Net interest expense",$4 million recognized in "Other income", and a recovery of$1 million recognized in "Net loss attributable to non-controlling interest", that unfavourably impacted Diluted EPS by$1 million 7 cents ; - in the second quarter,KCS purchase accounting of
($86 million after deferred income tax recovery of$62 million ), including costs of$24 million recognized in "Depreciation and amortization",$82 million recognized in "Purchased services and other",$1 million recognized in "Net interest expense", and a recovery of$5 million recognized in "Net loss attributable to non-controlling interest", that unfavourably impacted Diluted EPS by$2 million 6 cents ; and - in the first quarter,KCS purchase accounting of
($84 million after deferred income tax recovery of$61 million ), including costs of$23 million recognized in "Depreciation and amortization",$79 million recognized in "Purchased services and other",$1 million recognized in "Net interest expense",$5 million recognized in "Other income", and a recovery of$1 million recognized in "Net loss attributable to non-controlling interest", that unfavourably impacted Diluted EPS by$2 million 7 cents .
- in the fourth quarter,KCS purchase accounting of
2023:
- during the six months ended December 31, 2023,KCS purchase accounting of
($174 million after deferred income tax recovery of$125 million ), including costs of$49 million recognized in "Depreciation and amortization",$166 million recognized in "Purchased services and other" related to the amortization of equity investments,$1 million recognized in "Net interest expense",$11 million recognized in "Other income", and a recovery of$1 million recognized in "Net loss attributable to non-controlling interest", that unfavourably impacted Diluted EPS by$5 million 14 cents as follows:- in the fourth quarter,KCS purchase accounting of
($87 million after deferred income tax recovery of$62 million ), including costs of$25 million recognized in "Depreciation and amortization",$85 million recognized in "Purchased services and other",$1 million recognized in "Net interest expense", and a recovery of$6 million recognized in "Net loss attributable to non-controlling interest", that unfavourably impacted Diluted EPS by$5 million 7 cents ; - in the third quarter,KCS purchase accounting of
($87 million after deferred income tax recovery of$63 million ), including costs of$24 million recognized in "Depreciation and amortization",$81 million recognized in "Net interest expense", and$5 million recognized in "Other income", that unfavourably impacted Diluted EPS by$1 million 7 cents .
- in the fourth quarter,KCS purchase accounting of
Reconciliation of GAAP Performance Measures to Non-GAAP Performance Measures
The following tables reconcile the most directly comparable measures presented in accordance with GAAP to the Non-GAAP measures:
Core Adjusted Income and Core Adjusted Diluted Earnings per Share
Core adjusted income is calculated as Net income attributable to controlling shareholders reported on a GAAP basis adjusted for significant items less KCS purchase accounting.
For the three months ended | For the six months ended | |||
(in millions of Canadian dollars) | 2025 | 2024 | 2025 | 2024 |
Net income attributable to controlling shareholders as reported | $ 1,234 | $ 905 | $ 2,144 | $ 1,680 |
Less: | ||||
Significant items (pre-tax): | ||||
Gain on sale of equity investment | 333 | � | 333 | � |
Adjustments to provisions and settlements of Mexican taxes | � | � | � | (10) |
Acquisition-related costs | (19) | (28) | (39) | (54) |
KCS purchase accounting | (95) | (86) | (187) | (170) |
Add: | ||||
Tax effect of adjustments(1) | 21 | (33) | (9) | (62) |
Income tax rate changes | � | (3) | � | (3) |
Core adjusted income | $ 1,036 | $ 983 | $ 2,028 | $ 1,849 |
(1) | The tax effect of adjustments was calculated as the pre-tax effect of the significant items and KCS purchase accounting listed above multiplied by the applicable tax rate for the above items of |
Core adjusted diluted EPS is calculated using Diluted EPS reported on a GAAP basis adjusted for significant items less KCS purchase accounting.
For the three months | For the six months | For the year ended | |||
2025 | 2024 | 2025 | 2024 | 2024 | |
Diluted earnings per share as reported | $ 1.33 | $ 0.97 | $ 2.31 | $ 1.80 | $ 3.98 |
Less: | |||||
Significant items (pre-tax): | |||||
Gain on sale of equity investment | 0.36 | � | 0.36 | � | � |
Adjustments to provisions and settlements of Mexican taxes | � | � | � | (0.01) | � |
Acquisition-related costs | (0.02) | (0.03) | (0.04) | (0.06) | (0.12) |
KCS purchase accounting | (0.10) | (0.09) | (0.20) | (0.18) | (0.38) |
Add: | |||||
Tax effect of adjustments(1) | 0.03 | (0.04) | (0.01) | (0.07) | (0.14) |
Income tax rate changes | � | � | � | � | (0.09) |
Core adjusted diluted earnings per share | $ 1.12 | $ 1.05 | $ 2.18 | $ 1.98 | $ 4.25 |
(1) | The tax effect of adjustments was calculated as the pre-tax effect of the significant items and KCS purchase accounting listed above multiplied by the applicable tax rate for the above items of |
Core Adjusted Operating Income and Core Adjusted Operating Ratio
Core adjusted operating income and Core adjusted operating ratio are calculated from reported GAAP revenue and operating expenses adjusted for, where applicable, (1) significant items (acquisition-related costs and adjustments to provisions and settlement of Mexican taxes) that are reported within Operating income, and (2) KCS purchase accounting recognized in "Depreciation and amortization" and "Purchased services and other".
For the three months ended | For the six months ended | |||
(in millions of Canadian dollars) | 2025 | 2024 | 2025 | 2024 |
Operating income as reported | $ 1,343 | $ 1,267 | $ 2,660 | $ 2,416 |
Less: | ||||
Adjustments to provisions and settlements of Mexican taxes | � | � | � | (10) |
Acquisition-related costs | (19) | (28) | (39) | (54) |
KCS purchase accounting in Operating expenses | (91) | (83) | (179) | (163) |
Core adjusted operating income | $ 1,453 | $ 1,378 | $ 2,878 | $ 2,643 |
For the three months ended | For the six months ended | |||
2025 | 2024 | 2025 | 2024 | |
Operating ratio as reported | 63.7% | 64.8% | 64.5% | 66.1% |
Less: | ||||
Adjustments to provisions and settlements of Mexican taxes | —�% | —�% | —�% | 0.1% |
Acquisition-related costs | 0.5% | 0.7% | 0.5% | 0.8% |
KCS purchase accounting in Operating expenses | 2.5% | 2.3% | 2.4% | 2.3% |
Core adjusted operating ratio | 60.7% | 61.8% | 61.6% | 62.9% |
Adjusted Free Cash
Adjusted free cash is calculated as Net cash provided by operating activities, less Net cash used in investing activities, adjusted for changes in Cash and cash equivalents balances resulting from FX fluctuations, the cash flow impacts of acquisition-related costs associated with the KCS acquisition, settlements of Mexican taxes, settlement of foreign currency forward contracts, net of tax, and net proceeds from the sale of an equity investment, net of tax. The acquisition-related costs associated with the KCS acquisition, settlements of Mexican taxes, and settlement of foreign currency forward contracts, net of tax, are not indicative of operating trends and have been excluded from Adjusted free cash. Net proceeds from the sale of an equity investment, net of tax, isnot indicative of investment trends and has also been excluded from Adjusted free cash. Adjusted free cash is useful to investors and other external users of the Company's Interim Consolidated Financial Statements as it assists with the evaluation of the Company's ability to generate cash to satisfy debt obligations and other activities such as dividends, share repurchase programs, and other strategic opportunities, and is an important performance criterion in determining certain elements of the Company's long-term incentive plan. Adjusted free cash should be considered in addition to, rather than as a substitute for, Net cash provided by operating activities.
Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash
For the three months | For the six months ended | |||
(in millions of Canadian dollars) | 2025 | 2024 | 2025 | 2024 |
Net cash provided by operating activities as reported | $ 1,355 | $ 1,278 | $ 2,511 | $ 2,293 |
Net cash used in investing activities | (306) | (782) | (1,021) | (1,324) |
Effect of foreign currency fluctuations on foreign currency-denominated cash and cash equivalents | (44) | 6 | (45) | 19 |
Less: | ||||
Settlements of Mexican taxes | (1) | � | (12) | (1) |
Settlement of foreign currency forward contracts, net of tax | � | � | � | (46) |
Acquisition-related costs | (8) | (24) | (23) | (46) |
Net proceeds from sale of equity investment, net of tax | 409 | � | 409 | � |
Adjusted free cash | $ 605 | $ 526 | $ 1,071 | $ 1,081 |
Foreign Exchange Adjusted % Change
FX adjusted % change allows certain financial results to be viewed without the impact of fluctuations in FX rates, thereby facilitating period-to-period comparisons in the analysis of trends in business performance. Financial result variances at constant currency are obtained by translating the comparable period of the prior year's results denominated in
FX adjusted % changes in revenues are also used in calculating FX adjusted % change in Freight revenue per carload and per RTM. FX adjusted % changes in revenues are as follows:
For the three months ended June 30 | |||||
(in millions of Canadian dollars) | Reported | Reported | Variance duetoFX | FX Adjusted | FXAdjusted |
Freight revenues by line of business | |||||
Grain | $ 743 | $ 665 | $ 5 | $ 670 | 11 |
Coal | 256 | 236 | 2 | 238 | 8 |
Potash | 167 | 180 | 1 | 181 | (8) |
Fertilizers and sulphur | 98 | 103 | 1 | 104 | (6) |
Forest products | 195 | 203 | 2 | 205 | (5) |
Energy, chemicals and plastics | 712 | 695 | 1 | 696 | 2 |
Metals, minerals and consumer products | 444 | 464 | (6) | 458 | (3) |
Automotive | 330 | 358 | (11) | 347 | (5) |
Intermodal | 684 | 630 | 3 | 633 | 8 |
Freight revenues | 3,629 | 3,534 | (2) | 3,532 | 3 |
Non-freight revenues | 70 | 69 | � | 69 | 1 |
Total revenues | $ 3,699 | $ 3,603 | $ (2) | $ 3,601 | 3 |
For the six months ended June 30 | |||||
(in millions of Canadian dollars) | Reported | Reported | Variance duetoFX | FX Adjusted | FXAdjusted |
Freight revenues by line of business | |||||
Grain | $ 1,531 | $ 1,395 | $ 36 | $ 1,431 | 7 |
Coal | 513 | 445 | 5 | 450 | 14 |
Potash | 323 | 317 | 6 | 323 | � |
Fertilizers and sulphur | 212 | 207 | 6 | 213 | � |
Forest products | 412 | 405 | 12 | 417 | (1) |
Energy, chemicals and plastics | 1,470 | 1,397 | 34 | 1,431 | 3 |
Metals, minerals and consumer products | 892 | 904 | 5 | 909 | (2) |
Automotive | 645 | 623 | (8) | 615 | 5 |
Intermodal | 1,358 | 1,268 | 16 | 1,284 | 6 |
Freight revenues | 7,356 | 6,961 | 112 | 7,073 | 4 |
Non-freight revenues | 138 | 162 | 1 | 163 | (15) |
Total revenues | $ 7,494 | $ 7,123 | $ 113 | $ 7,236 | 4 |
FX adjusted % changes in Operating expenses are as follows:
For the three months ended June 30 | |||||
(in millions of Canadian dollars) | Reported | Reported | Variance duetoFX | FX Adjusted | FXAdjusted |
Compensation and benefits | $ 659 | $ 612 | $ (8) | $ 604 | 9 |
Fuel | 405 | 466 | (6) | 460 | (12) |
Materials | 124 | 97 | (1) | 96 | 29 |
Equipment rents | 103 | 82 | 2 | 84 | 23 |
Depreciation and amortization | 493 | 473 | 2 | 475 | 4 |
Purchased services and other | 572 | 606 | (3) | 603 | (5) |
Total operating expenses | $ 2,356 | $ 2,336 | $ (14) | $ 2,322 | 1 |
For the six months ended June 30 | |||||
(in millions of Canadian dollars) | Reported | Reported | Variance duetoFX | FX Adjusted | FXAdjusted |
Compensation and benefits | $ 1,341 | $ 1,302 | $ (1) | $ 1,301 | 3 |
Fuel | 886 | 924 | 5 | 929 | (5) |
Materials | 248 | 191 | (1) | 190 | 31 |
Equipment rents | 202 | 164 | 7 | 171 | 18 |
Depreciation and amortization | 997 | 940 | 21 | 961 | 4 |
Purchased services and other | 1,160 | 1,186 | 11 | 1,197 | (3) |
Total operating expenses | $ 4,834 | $ 4,707 | $ 42 | $ 4,749 | 2 |
FX adjusted % change in Operating income is as follows:
For the three months ended June 30 | |||||
(in millions of Canadian dollars) | Reported | Reported | Variance duetoFX | FX Adjusted | FXAdjusted |
Total revenues | $ 3,699 | $ 3,603 | $ (2) | $ 3,601 | 3 |
Total operating expenses | 2,356 | 2,336 | (14) | 2,322 | 1 |
Operating income | $ 1,343 | $ 1,267 | $ 12 | $ 1,279 | 5 |
For the six months ended June 30 | |||||
(in millions of Canadian dollars) | Reported | Reported | Variance duetoFX | FX Adjusted | FXAdjusted |
Total revenues | $ 7,494 | $ 7,123 | $ 113 | $ 7,236 | 4 |
Total operating expenses | 4,834 | 4,707 | 42 | 4,749 | 2 |
Operating income | $ 2,660 | $ 2,416 | $ 71 | $ 2,487 | 7 |
Adjusted Net Debt to Adjusted EBITDA Ratio
Adjusted net debt to adjusted EBITDA ratio is calculated as Adjusted net debt divided by Adjusted EBITDA. The Adjusted net debt to adjusted EBITDA ratio is a key credit measure used to assess the Company's financial capacity. The ratio provides information on the Company's ability to service its debt and other long-term obligations from operations, excluding significant items, and is an important performance criterion in determining certain elements of the Company's long-term incentive plan.The Adjusted net debt to adjusted EBITDA ratio which is reconciled below from the Long-term debt to Net income attributable to controlling shareholders ratio, the most comparable measure calculated in accordance with GAAP.
Calculation of Long-term Debt to Net Income Attributable to Controlling Shareholders Ratio
The Long-term debt to Net income attributable to controlling shareholders ratio is calculated as Long-term debt, including Long-term debt maturing within one year, divided by Net income attributable to controlling shareholders.
(in millions of Canadian dollars, except for ratios) | 2025 | 2024 |
Long-term debt including long-term debt maturing within one year as at June 30 | $ 22,269 | $ 22,624 |
Net income attributable to controlling shareholders for the twelve months ended June 30 | 4,182 | 3,483 |
Long-term debt to Net income attributable to controlling shareholders ratio | 5.3 | 6.5 |
Reconciliation of Long-term Debt to Adjusted Net Debt
Adjusted net debt is defined as Long-term debt and Long-term debt maturing within one year, as reported on the Company's Consolidated Balance Sheets adjusted for pension plans' deficit, operating lease liabilities, Cash and cash equivalents, and the fair value adjustment to KCS debt on the Control Date which is recognized under Long-term debt on the Company's Consolidated Balance Sheets. Adjusted net debt is used as a measure of debt and long-term obligations as part of the calculation of Adjusted net debt to Adjusted EBITDA.
(in millions of Canadian dollars) | 2025 | 2024 |
Long-term debt including long-term debt maturing within one year as at June 30 | $ 22,269 | $ 22,624 |
Add: | ||
Pension plans deficit(1) | 160 | 175 |
Operating lease liabilities | 390 | 337 |
Fair value adjustment to KCS debt upon Control(2) | 465 | 487 |
Less: | ||
Cash and cash equivalents | 799 | 557 |
Adjusted net debt | $ 22,485 | $ 23,066 |
(1) | Pension plans' deficit is the total funded status of the Pension plans in deficit only. |
(2) | The fair value adjustment to KCS debt upon control represents the fair value adjustment based on the purchase price allocation at fair value, net of amortization of fair value adjustments from April 14, 2023 and the foreign currency translation impact on the fair value adjustment. |
Reconciliation of Net Income Attributable to Controlling Shareholders to Adjusted EBITDA
Adjusted EBITDA is calculated as Net income attributable to controlling shareholders before Net interest expense, Income tax expense, Depreciation and amortization, and Operating lease expense recognized on the Company's Consolidated Statement of Income, excluding significant items reported in "Operating income" and "Other income", less "Other components of net periodic benefit recovery" recognized on the Company's Consolidated Statement of Income. Adjusted EBITDA is used as a performance measure derived from operating results, excluding significant items, as part of the calculation of Adjusted net debt to adjusted EBITDA. Detailed quarterly information on significant items that occurred within the 12 months ended June 30, 2025 and 2024 can be found under the earlier section Core Adjusted Income and Core Adjusted Diluted Earnings Per Share.
For the twelve months ended June 30 | ||
(in millions of Canadian dollars) | 2025 | 2024 |
Net income attributable to controlling shareholders as reported | $ 4,182 | $ 3,483 |
Add: | ||
Net interest expense | 819 | 819 |
Income tax expense | 1,157 | 1,084 |
Depreciation and amortization | 1,957 | 1,848 |
Operating lease expense | 111 | 101 |
Less: | ||
Significant items (pre-tax): | ||
Adjustments to provisions and settlements of Mexican taxes | 14 | (10) |
Acquisition-related costs | (97) | (110) |
Gain on sale of equity investment | 333 | � |
Other components of net periodic benefit recovery | 390 | 334 |
Adjusted EBITDA | $ 7,586 | $ 7,121 |
Calculation of Adjusted Net Debt to Adjusted EBITDA Ratio |
(in millions of Canadian dollars, except for ratios) | 2025 | 2024 |
Adjusted net debt as at June 30 | $ 22,485 | $ 23,066 |
Adjusted EBITDA for the twelve months ended June 30 | 7,586 | 7,121 |
Adjusted net debt to adjusted EBITDA ratio | 3.0 | 3.2 |
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SOURCE CPKC