CALGARY, AB, Jan. 28, 2026 /PRNewswire/ - Canadian Pacific Kansas City (TSX: CP) $(CP)$ (CPKC) today announced its fourth-quarter results, including revenues of $3.9 billion, diluted earnings per share (EPS) of $1.20 and core adjusted diluted EPS(1) of $1.33.
Fourth-quarter 2025 results
-- Revenues increased one percent to $3.9 billion -- Reported operating ratio $(OR)$ decreased 80 basis points (bps) to 58.9 percent, a CPKC record -- Record CPKC core adjusted OR1 of 55.9 percent, a 120 bps improvement -- Reported diluted EPS decreased to $1.20 from $1.28 in Q4 2024 -- Core adjusted diluted EPS1 increased three percent to $1.33 from $1.29 in Q4 2024 -- Record CPKC Q4 operating metrics in train weights, network speed, locomotive productivity and car miles per car day
"Our fourth quarter and full year results demonstrate exceptional execution in a challenging market by controlling what we could control," said Keith Creel, CPKC President and Chief Executive Officer. "Despite macroeconomic and trade policy headwinds in 2025, our Precision Scheduled Railroading model again enabled us to control costs and deliver a record core adjusted operating ratio while capitalizing on our unique growth opportunities."
Full-year 2025 results
-- Revenues increased four percent to $15.1 billion from $14.5 billion in
2024
-- Reported OR decreased 160 bps to 62.8 percent
-- Core adjusted OR1 improved to a CPKC record-low 59.9 percent, a 140 bps
improvement year over year
-- Reported diluted EPS increased to $4.51 from $3.98 in 2024
-- Core adjusted diluted EPS1 increased eight percent to $4.61 from $4.25 in
2024
-- Federal Railroad Administration $(FRA)$-reportable personal injury
frequency decreased to 0.92 from 0.95 in 2024
-- FRA-reportable train accident frequency decreased to 0.85 from 1.01 in
2024
In 2025, for the third consecutive year, CPKC led the industry with the lowest FRA-reportable train accident frequency among Class 1 railroads, building on Canadian Pacific's legacy of 17 consecutive years of industry leadership.
"Safety is at the core of everything that we do, and our performance reflects the dedication of our railroaders and their unwavering focus on operational excellence," Creel added. "Looking ahead to 2026, record grain harvests and a pipeline of unique growth opportunities position this company to continue producing differentiated results."
Full-year 2026 Guidance
-- Low double-digit core adjusted diluted EPS1 growth versus 2025 core
adjusted diluted EPS1 of $4.61
-- Mid-single digit volume growth, as measured in Revenue Ton Miles
-- Capital expenditures of $2.65 billion, a reduction of approximately 15%
from 2025
CPKC's guidance is based on the following key assumptions:
-- Core adjusted effective tax rate1 of 24.75 percent
-- Other components of net periodic benefit recovery will be $441 million in
2026
(1) These measures have no standardized meanings prescribed by accounting
principles generally accepted in the United States of America ("GAAP")
and, therefore, may not be comparable to similar measures presented by
other companies. For information regarding non-GAAP measures including
reconciliations and forward-looking non-GAAP measures, see attached
supplementary schedule of Non-GAAP Measures.
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 January 28, 2026.
Conference Call Access
Canada and U.S.: 800-245-3047
International: 203-518-9765
*Conference ID: CPKCQ425
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 investor.cpkcr.com.
A replay of the fourth-quarter conference call will be available through Feb. 4, 2026, at 800-839-5125 (Canada/U.S.) or 402-220-1502 (International).
Forward-looking statements
This news release contains forward-looking information and forward-looking statements within the meaning of applicable securities laws in both the U.S. and Canada (collectively, "forward-looking statements"). Forward-looking statements include, but are not limited to, statements concerning expectations, beliefs, plans, goals, objectives, assumptions and statements about possible future events, conditions, and results of operations or performance. Forward-looking statements may contain statements with the words or headings such as "financial expectations", "key assumptions", "anticipate", "believe", "expect", "project", "estimate", "forecast", "plan", "intend", "target", "will", "outlook", "guidance", "should" or similar words suggesting future outcomes. All statements other than statements of historical fact may be forward-looking statements. This news release contains forward-looking statements concerning, but not limited to, our ability to deliver on our financial guidance for 2026, our ability to deliver on our long-term value proposition, strategic initiatives and investments, the success of our business and our customers, the realization of anticipated benefits and synergies of the CP-KCS combination, and the opportunities arising therefrom, our operations, priorities and plans, anticipated financial and operational performance, business prospects and demand for our services and growth opportunities.
The forward-looking statements contained in this news release are based on current expectations, estimates, projections and assumptions, having regard to CPKC's experience and its perception of historical trends, and include, but are 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; foreign exchange rates; core adjusted effective tax 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 statements 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 statements as actual results may differ materially from those expressed or implied by forward-looking statements. By their nature, CPKC's forward-looking statements involve numerous inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking statements, including, but not limited to, the following factors: changes in business strategies and strategic opportunities; 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 and conditions; industry capacity; shifts in market demand; changes in commodity prices and commodity demand; uncertainty surrounding timing and volumes of commodities being shipped by CPKC; inflation; geopolitical instability; changes in laws, regulations and government policies, including, without limitation, those relating to regulation of rates, tariffs, import/export, trade, wages, labour and immigration; changes in taxes and tax rates; potential increases in maintenance and operating costs; changes in fuel prices; disruption of 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, including the imposition of any tariffs, or other changes to international trade arrangements; the effects of current and future multinational trade agreements on or other developments affecting the level of trade among Canada, the U.S. and Mexico; climate change and the market and regulatory responses to climate change; 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 México, S.A. de C.V.'s concession; public opinion; various events that could disrupt operations, including severe weather, such as droughts, floods,
avalanches, volcanism 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; the outbreak of a pandemic or contagious disease and the 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; disruptions to global supply chains; the realization of anticipated benefits and synergies of the CP-KCS transaction and the timing thereof; the satisfaction of the conditions imposed by the U.S. Surface Transportation Board in its March 15, 2023 decision; the successful integration of KCS into the Company; the focus of management time and attention on the CP-KCS integration and other disruptions arising from the CP-KCS integration; 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; improvement in data collection and measuring systems; industry-driven changes to methodologies; and the ability of the management of CPKC to execute key priorities, including those in connection with the CP-KCS transaction. The foregoing list of factors is not exhaustive. These and other factors that could cause actual results to differ materially from those described in the forward-looking statements contained in this news release are detailed from time to time in reports filed by CPKC with securities regulators in Canada and the United States, which can be accessed on SEDAR+ (www.sedarplus.ca) and EDGAR (www.sec.gov). Reference should be made to "Part I -- Item 1A -- Risk Factors" and "Part II --Item 7 -- Management's Discussion and Analysis of Financial Condition and Results of Operations -- Forward-Looking Statements" in CPKC's annual report on Form 10-K and "Part II -- Item 1A -- Risk Factors" and "Part I -- Item 2 -- Management's Discussion and Analysis of Financial Condition and Results of Operations -- Forward-Looking Statements" in the Company's interim reports on Form 10-Q.
The forward-looking statements contained in this news release are made as of the date hereof. Except as required by law, CPKC undertakes no obligation to update publicly or otherwise revise any forward-looking statements, or the foregoing assumptions and risks affecting such forward-looking statements, whether as a result of new information, future events or otherwise.
About CPKC
With its global headquarters in Calgary, Alta., Canada, CPKC is the first and only single-line transnational railway linking Canada, the United States and México, with unrivaled access to major ports from Vancouver to Atlantic Canada to the Gulf Coast to Lázaro Cárdenas, México. Stretching approximately 20,000 route miles and employing 20,000 railroaders, CPKC provides North American customers unparalleled rail service and network reach to key markets across the continent. CPKC is growing with its customers, offering a suite of freight transportation services, logistics solutions and supply chain expertise. Visit cpkcr.com to learn more about the rail advantages of CPKC. CP-IR
FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
For the three months For the year ended
ended December 31 December 31
-------------------------------- --------------------------------
(in millions of
Canadian dollars,
except share and
per share data) 2025 2024 2025 2024
================= =============== =============== =============== ===============
Revenues
Freight $ 3,831 $ 3,801 $ 14,776 $ 14,223
Non-freight 92 73 302 323
----------------- --------------- --------------- --------------- ---------------
Total revenues 3,923 3,874 15,078 14,546
----------------- --------------- --------------- --------------- ---------------
Operating
expenses
Compensation and
benefits 621 619 2,581 2,565
Fuel 430 459 1,731 1,802
Materials 112 116 474 406
Equipment rents 97 94 408 347
Depreciation and
amortization 519 488 2,019 1,900
Purchased
services and
other 531 538 2,256 2,347
----------------- --------------- --------------- --------------- ---------------
Total operating
expenses 2,310 2,314 9,469 9,367
----------------- --------------- --------------- --------------- ---------------
Operating income 1,613 1,560 5,609 5,179
Other income -- (1) (1) (42)
Other components
of net periodic
benefit
recovery (94) (87) (415) (352)
Net interest
expense 230 203 876 801
Gain on sale of
equity
investment -- -- (333) --
Income before
income tax
expense 1,477 1,445 5,482 4,772
Current income
tax expense 253 258 1,174 1,031
Deferred income
tax expense
(recovery) 147 (12) 171 28
----------------- --------------- --------------- --------------- ---------------
Income tax
expense 400 246 1,345 1,059
----------------- --------------- --------------- --------------- ---------------
Net income $ 1,077 $ 1,199 $ 4,137 $ 3,713
----------------- --------------- --------------- --------------- ---------------
Net loss
attributable to
non-controlling
interest -- (2) (4) (5)
----------------- --------------- --------------- --------------- ---------------
Net income
attributable to
controlling
shareholders $ 1,077 $ 1,201 $ 4,141 $ 3,718
================= =============== =============== =============== ===============
Earnings per
share
Basic earnings
per share $ 1.20 $ 1.29 $ 4.52 $ 3.98
Diluted earnings
per share $ 1.20 $ 1.28 $ 4.51 $ 3.98
Weighted-average
number of shares
(millions)
Basic 897.8 933.4 916.2 933.0
Diluted 898.4 934.8 917.1 934.6
Dividends
declared per
share $ 0.228 $ 0.190 $ 0.874 $ 0.760
See Notes to Consolidated Financial Information.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
For the three months For the year ended
ended December 31 December 31
-------------------------------- ------------------------------
(in millions of
Canadian
dollars) 2025 2024 2025 2024
================= ================ ============== ============== ==============
Net income $ 1,077 $ 1,199 $ 4,137 $ 3,713
Net (loss) gain
in foreign
currency
translation
adjustments,
net of hedging
activities (497) 2,045 (1,601) 2,622
Change in
derivatives
designated as
cash flow
hedges (2) 1 (1) 6
Change in
pension and
post-retirement
defined benefit
plans 177 944 185 979
Other
comprehensive
income (loss)
from equity
investees 1 (1) 7 (8)
----------------- ---------------- -------------- -------------- --------------
Other
comprehensive
(loss) income
before income
taxes (321) 2,989 (1,410) 3,599
Income tax
expense (57) (218) (80) (219)
----------------- ---------------- -------------- -------------- --------------
Other
comprehensive
(loss) income (378) 2,771 (1,490) 3,380
----------------- ---------------- -------------- -------------- --------------
Comprehensive
income $ 699 $ 3,970 $ 2,647 $ 7,093
----------------- ---------------- -------------- -------------- --------------
Comprehensive
(loss) income
attributable to
non-controlling
interest (14) 61 (52) 77
----------------- ---------------- -------------- -------------- --------------
Comprehensive
income
attributable to
controlling
shareholders $ 713 $ 3,909 $ 2,699 $ 7,016
================= ================ ============== ============== ============== See Notes to Consolidated Financial Information.
CONSOLIDATED BALANCE SHEETS AS AT
(unaudited)
December 31 December 31
(in millions of Canadian
dollars) 2025 2024
============================== ====================== ======================
Assets
Current assets
Cash and cash equivalents $ 184 $ 739
Accounts receivable, net 2,029 1,968
Materials and supplies 502 457
Other current assets 224 220
------------------------------ ---------------------- ----------------------
2,939 3,384
Investments 473 586
Properties 55,323 56,024
Goodwill 18,436 19,350
Intangible assets 2,911 3,146
Pension asset 5,129 4,586
Other assets 734 668
------------------------------ ---------------------- ----------------------
Total assets $ 85,945 $ 87,744
============================== ====================== ======================
Liabilities and equity
Current liabilities
Accounts payable and accrued
liabilities $ 2,751 $ 2,842
Long-term debt maturing
within one year 3,240 2,819
------------------------------ ---------------------- ----------------------
5,991 5,661
Pension and other benefit
liabilities 537 548
Other long-term liabilities 815 867
Long-term debt 19,948 19,804
Deferred income taxes 11,829 11,974
------------------------------ ---------------------- ----------------------
Total liabilities 39,120 38,854
============================== ====================== ======================
Shareholders' equity
Share capital 24,751 25,689
Additional paid-in capital 105 94
Accumulated other
comprehensive income 1,238 2,680
Retained earnings 19,783 19,429
------------------------------ ---------------------- ----------------------
45,877 47,892
Non-controlling interest 948 998
------------------------------ ---------------------- ----------------------
Total equity 46,825 48,890
------------------------------ ---------------------- ----------------------
Total liabilities and equity $ 85,945 $ 87,744
============================== ====================== ======================
See Notes to Consolidated Financial Information.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
For the three months For the year ended
ended December 31 December 31
--------------------------------- ---------------------------------
(in millions of
Canadian dollars) 2025 2024 2025 2024
==================== ================ =============== ================ ===============
Operating activities
Net income $ 1,077 $ 1,199 $ 4,137 $ 3,713
Reconciliation of
net income to cash
provided by
operating
activities:
Depreciation and
amortization 519 488 2,019 1,900
Deferred income tax
expense
(recovery) 147 (12) 171 28
Pension recovery
and funding (84) (75) (367) (305)
Gain on sale of
equity investment -- -- (333) --
Settlement of
Mexican taxes -- (10) (12) (12)
Settlement of
foreign currency
forward contracts -- -- -- (65)
Other operating
activities, net (83) (5) (110) (14)
Changes in non-cash
working capital
balances related to
operations (52) 119 (196) 24
-------------------- ---------------- --------------- ---------------- ---------------
Net cash provided by
operating
activities 1,524 1,704 5,309 5,269
-------------------- ---------------- --------------- ---------------- ---------------
Investing activities
Additions to
properties (788) (742) (3,102) (2,825)
Additions to
Meridian Speedway
properties (7) (9) (38) (38)
Proceeds from sale
of properties and
other assets 42 45 58 64
Proceeds from sale
of equity
investment -- -- 493 --
Other investing
activities, net (9) (6) (76) 3
-------------------- ---------------- --------------- ---------------- ---------------
Net cash used in
investing
activities (762) (712) (2,665) (2,796)
-------------------- ---------------- --------------- ---------------- ---------------
Financing activities
Dividends paid (204) (177) (796) (709)
Issuance of Common
Shares 21 14 73 69
Purchase of Common
Shares (Note 2) (397) -- (3,942) --
Repayment of
long-term debt,
excluding
commercial paper (6) (2,018) (951) (2,327)
Issuance of
long-term debt,
excluding commercial
paper -- -- 3,102 --
Net (repayment)
issuance of
commercial paper (392) 1,144 (346) 439
Net (repayment)
issuance of short
term borrowings (1) 274 (278) 274
Other financing
activities, net -- 2 (8) 2
Net cash used in
financing
activities (979) (761) (3,146) (2,252)
-------------------- ---------------- --------------- ---------------- ---------------
Effect of foreign
currency
fluctuations on
foreign-denominated
cash and cash
equivalents (10) 45 (53) 54
-------------------- ---------------- --------------- ---------------- ---------------
Cash position
Net (decrease)
increase in cash
and cash
equivalents (227) 276 (555) 275
Cash and cash
equivalents at
beginning of
period 411 463 739 464
-------------------- ---------------- --------------- ---------------- ---------------
Cash and cash
equivalents at end
of period $ 184 $ 739 $ 184 $ 739
==================== ================ =============== ================ ===============
Supplemental cash
flow information
Income taxes paid $ 305 $ 234 $ 1,155 $ 958
Interest paid $ 257 $ 251 $ 863 $ 814
See Notes to Consolidated Financial Information.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(unaudited)
For the three months ended December 31
(in millions of Common Accumulated
Canadian dollars Shares Additional other Total Non-
except per share (in Share paid-in comprehensive Retained shareholders' controlling Total
data) millions) capital capital income (loss) earnings equity interest equity
==================== ========= ======== ============= ======================= ========= ================ ============= ========
Balance as at October
1, 2025 901.1 $ 24,815 $ 106 $ 1,602 $ 19,175 $ 45,698 $ 961 $ 46,659
Net income -- -- -- -- 1,077 1,077 -- 1,077
Contribution from
non-controlling
interest -- -- -- -- -- -- 1 1
Other comprehensive
loss -- -- -- (364) -- (364) (14) (378)
Dividends declared
($0.228 per share) -- -- -- -- (204) (204) -- (204)
Effect of
stock-based
compensation
expense -- -- 3 -- -- 3 -- 3
Common Shares
repurchased (Note
2) (3.9) (89) -- -- (265) (354) -- (354)
Shares issued under
stock option plan 0.4 25 (4) -- -- 21 -- 21
--------------------- --------- -------- ------------- ----------------------- --------- ---------------- ------------- --------
Balance as at
December 31, 2025 897.6 $ 24,751 $ 105 $ 1,238 $ 19,783 $ 45,877 $ 948 $ 46,825
===================== ========= ======== ============= ======================= ========= ================ ============= ========
Balance as at October
1, 2024 933.3 $ 25,672 $ 94 $ (28) $ 18,405 $ 44,143 $ 937 $ 45,080
Net income (loss) -- -- -- -- 1,201 1,201 (2) 1,199
Other comprehensive
income -- -- -- 2,708 -- 2,708 63 2,771
Dividends declared
($0.190 per share) -- -- -- -- (177) (177) -- (177)
Effect of
stock-based
compensation
expense -- -- 4 -- -- 4 -- 4
Shares issued under
stock option plan 0.2 17 (4) -- -- 13 -- 13
Balance as at
December 31, 2024 933.5 $ 25,689 $ 94 $ 2,680 $ 19,429 $ 47,892 $ 998 $ 48,890
--------------------- --------- -------- ------------- ----------------------- --------- ---------------- ------------- --------
For the year ended December 31
(in millions of Common Accumulated
Canadian dollars Shares Additional other Total Non-
except per share (in Share paid-in comprehensive Retained shareholders' controlling Total
data) millions) capital capital Income (loss) earnings equity interest equity
==================== ========= ======== ============= ====================== ======== ================ ============= ========
Balance as at
January 1, 2025 933.5 $ 25,689 $ 94 $ 2,680 $ 19,429 $ 47,892 $ 998 $ 48,890
Net income (loss) -- -- -- -- 4,141 4,141 (4) 4,137
Contribution from
non-controlling
interest -- -- -- -- -- -- 2 2
Other comprehensive
loss -- -- -- (1,442) -- (1,442) (48) (1,490)
Dividends declared
($0.874 per share) -- -- -- -- (796) (796) -- (796)
Effect of
stock-based
compensation
expense -- -- 28 -- -- 28 -- 28
Common Shares
repurchased (Note
2) (37.3) (1,028) -- -- (2,991) (4,019) -- (4,019)
Shares issued under
stock option plan 1.4 90 (17) -- -- 73 -- 73
--------------------- --------- -------- ------------- ---------------------- -------- ---------------- ------------- --------
Balance as at
December 31, 2025 897.6 $ 24,751 $ 105 $ 1,238 $ 19,783 $ 45,877 $ 948 $ 46,825
===================== ========= ======== ============= ====================== ======== ================ ============= ========
Balance as at January
1, 2024 932.1 $ 25,602 $ 88 $ (618) $ 16,420 $ 41,492 $ 919 $ 42,411
Net income (loss) -- -- -- -- 3,718 3,718 (5) 3,713
Contribution from
non-controlling
interest -- -- -- -- -- -- 2 2
Other comprehensive
income -- -- -- 3,298 -- 3,298 82 3,380
Dividends declared
($0.760 per share) -- -- -- -- (709) (709) -- (709)
Effect of
stock-based
compensation
expense -- -- 24 -- -- 24 -- 24
Shares issued under
stock option plan 1.4 87 (18) -- -- 69 -- 69
Balance as at
December 31, 2024 933.5 $ 25,689 $ 94 $ 2,680 $ 19,429 $ 47,892 $ 998 $ 48,890
--------------------- --------- -------- ------------- ---------------------- -------- ---------------- ------------- --------
See Notes to Consolidated Financial Information.
NOTES TO CONSOLIDATED FINANCIAL INFORMATION
December 31, 2025
(unaudited)
1 Description of business and basis of presentation
Canadian Pacific Kansas City Limited ("CPKC" or the "Company") owns and operates a transcontinental freight railway spanning Canada, the United States ("U.S."), and Mexico. CPKC provides rail and intermodal transportation services over a network of approximately 20,000 miles, serving principal business centres across Canada, the U.S., and Mexico. The Company transports bulk commodities, merchandise, and intermodal freight. CPKC's Common Shares ("Common Shares") trade on the Toronto Stock Exchange and New York Stock Exchange under the symbol "CP".
This unaudited consolidated financial information, expressed in Canadian dollars, reflects management's estimates and assumptions that are necessary for its fair presentation in conformity with accounting principles generally accepted in the U.S. ("GAAP"). It does not include all disclosures required under GAAP for annual or interim financial statements. In management's opinion, all adjustments (consisting of normal and recurring adjustments) considered necessary for fair presentation have been included.
The accounting policies used in preparing this unaudited consolidated financial information are consistent with the accounting policies used in preparing the Company's audited consolidated financial statements and related notes in Item 8. Financial Statements and Supplementary Data of the Company's 2024 Annual Report on Form 10-K, and should be read in conjunction with such financial statements and related notes.
2 Share repurchases
On February 27, 2025, the Company announced a normal course issuer bid ("NCIB"), commencing March 3, 2025, to purchase up to 37.3 million Common Shares in the open market for cancellation on or before March 2, 2026. By October 29, 2025, the Company had purchased and cancelled all 37.3 million Common Shares authorized to be purchased under the NCIB. 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 2% tax on the fair market value of shares repurchased (net of qualifying issuances of equity) as a direct cost of Common Share repurchases recognized in Shareholders' equity. During the three and twelve months ended December 31, 2025, the Company has accrued a liability of $7 million and $77 million, respectively, for the tax due on the net share repurchases made, payable within the first quarter of the following year.
The following table provides activities under the share repurchase program:
For the three months For the year ended
ended December 31 December 31
-------------------- ------------------
2025 2025
==================================== ==================== ==================
Number of Common Shares
repurchased(1) 3,259,131 37,348,539
Weighted-average price per share(2) $108.53 $107.61
Amount of repurchase (in millions of
Canadian dollars)(2) $354 $4,019
==================================== ==================== ==================
(1) Excludes shares repurchased in the third quarter but cancelled during the
three months ended December 31, 2025.
(2) Includes brokerage fees and applicable tax on share repurchases.
Summary of Rail Data
Fourth Quarter Year
Financial (in millions, Total % Total %
except per share data) 2025 2024 Change Change 2025 2024 Change Change
-------------------------- -------- --------- ---------- ------- -------- --------- --------- ------
Revenues
--------------------------
Freight $ 3,831 $ 3,801 $ 30 1 $ 14,776 $ 14,223 $ 553 4
Non-freight 92 73 19 26 302 323 (21) (7)
-------- --------- ---------- -------- --------- ---------
Total revenues 3,923 3,874 49 1 15,078 14,546 532 4
-------- --------- ---------- -------- --------- ---------
Operating expenses
--------------------------
Compensation and benefits 621 619 2 -- 2,581 2,565 16 1
Fuel 430 459 (29) (6) 1,731 1,802 (71) (4)
Materials 112 116 (4) (3) 474 406 68 17
Equipment rents 97 94 3 3 408 347 61 18
Depreciation and
amortization 519 488 31 6 2,019 1,900 119 6
Purchased services and
other 531 538 (7) (1) 2,256 2,347 (91) (4)
-------- --------- ---------- -------- --------- ---------
Total operating expenses 2,310 2,314 (4) -- 9,469 9,367 102 1
-------- --------- ---------- -------- --------- ---------
Operating income 1,613 1,560 53 3 5,609 5,179 430 8
Other income -- (1) 1 (100) (1) (42) 41 (98)
Other components of net
periodic benefit
recovery (94) (87) (7) 8 (415) (352) (63) 18
Net interest expense 230 203 27 13 876 801 75 9
Gain on sale of equity
investment -- -- -- -- (333) -- (333) 100
-------- --------- ---------- -------- --------- ---------
Income before income tax
expense 1,477 1,445 32 2 5,482 4,772 710 15
Current income tax
expense 253 258 (5) (2) 1,174 1,031 143 14
Deferred income tax
(recovery) expense 147 (12) 159 (1,325) 171 28 143 511
-------- --------- ---------- -------- --------- ---------
Income tax expense 400 246 154 63 1,345 1,059 286 27
-------- --------- ---------- -------- --------- ---------
Net income $ 1,077 $ 1,199 $ (122) (10) $ 4,137 $ 3,713 $ 424 11
-------- --------- ---------- -------- --------- ---------
Net loss attributable to
non-controlling interest -- (2) 2 (100) (4) (5) 1 (20)
-------- --------- ---------- -------- --------- ---------
Net income attributable to
controlling shareholders $ 1,077 $ 1,201 $ (124) (10) $ 4,141 $ 3,718 $ 423 11
-------- --------- ---------- -------- --------- ---------
(80) (160)
Operating ratio (%) 58.9 59.7 (0.8) bps 62.8 64.4 (1.6) bps
Basic earnings per share $ 1.20 $ 1.29 $ (0.09) (7) $ 4.52 $ 3.98 $ 0.54 14
-------- --------- ---------- -------- --------- ---------
Diluted earnings per
share $ 1.20 $ 1.28 $ (0.08) (6) $ 4.51 $ 3.98 $ 0.53 13
-------- --------- ---------- -------- --------- ---------
Shares Outstanding
--------------------------
Weighted average number
of basic shares
outstanding (millions) 897.8 933.4 (35.6) (4) 916.2 933.0 (16.8) (2)
Weighted average number
of diluted shares
outstanding (millions) 898.4 934.8 (36.4) (4) 917.1 934.6 (17.5) (2)
Foreign Exchange
--------------------------
Average foreign exchange
rate (U.S.$/Canadian$) 0.72 0.71 0.01 1 0.71 0.73 (0.02) (3)
Average foreign exchange
rate (Canadian$/U.S.$) 1.39 1.40 (0.01) (1) 1.40 1.37 0.03 2
Average foreign exchange
rate (Mexican
peso/Canadian$) 13.13 14.37 (1.24) (9) 13.73 13.32 0.41 3
Average foreign exchange
rate (Canadian$/Mexican
peso) 0.0762 0.0696 0.0066 9 0.0728 0.0751 (0.0023) (3)
Summary of Rail Data (Continued)
Fourth Quarter Year
----------------------------------------------- ------------------------------------------------
FX FX
Adjusted Adjusted
Commodity Total % % Total % %
Data 2025 2024 Change Change Change(1) 2025 2024 Change Change Change(1)
------------ ------- ------- ---------- ------ --------- -------- -------- --------- ------ ---------
Freight
Revenues
(millions)
- Grain $ 984 $ 949 $ 35 4 4 $ 3,217 $ 3,012 $ 205 7 5
- Coal 257 250 7 3 2 1,025 943 82 9 8
- Potash 150 153 (3) (2) (2) 640 614 26 4 3
-
Fertilizers
and
sulphur 109 108 1 1 1 423 406 17 4 2
- Forest
products 187 213 (26) (12) (13) 792 816 (24) (3) (5)
- Energy,
chemicals
and
plastics 727 742 (15) (2) (3) 2,898 2,851 47 2 --
- Metals,
minerals
and
consumer
products 442 430 12 3 1 1,792 1,777 15 1 --
- Automotive 322 324 (2) (1) (3) 1,310 1,280 30 2 2
- Intermodal 653 632 21 3 3 2,679 2,524 155 6 5
Total
Freight
Revenues $ 3,831 $ 3,801 $ 30 1 -- $ 14,776 $ 14,223 $ 553 4 3
------- ------- ---------- -------- -------- ---------
Freight
Revenue per
Revenue
Ton-Mile
("RTM")
(cents)
- Grain 5.63 5.55 0.08 1 1 5.24 5.18 0.06 1 --
- Coal 4.39 4.24 0.15 4 3 4.31 4.12 0.19 5 4
- Potash 3.40 3.53 (0.13) (4) (4) 3.32 3.43 (0.11) (3) (4)
-
Fertilizers
and
sulphur 7.81 7.62 0.19 2 2 7.96 7.72 0.24 3 1
- Forest
products 9.03 9.01 0.02 -- -- 8.96 8.99 (0.03) -- (2)
- Energy,
chemicals
and
plastics 7.73 7.48 0.25 3 3 7.70 7.34 0.36 5 3
- Metals,
minerals
and
consumer
products 9.46 9.27 0.19 2 1 9.33 9.27 0.06 1 --
- Automotive 24.21 24.55 (0.34) (1) (4) 23.85 25.53 (1.68) (7) (7)
- Intermodal 6.99 7.03 (0.04) (1) -- 6.96 7.17 (0.21) (3) (4)
Total
Freight
Revenue per
RTM 6.85 6.79 0.06 1 -- 6.73 6.73 -- -- (1)
------- ------- ---------- -------- -------- ---------
Freight
Revenue per
Carload
- Grain $ 6,067 $ 5,880 $ 187 3 3 $ 5,636 $ 5,480 $ 156 3 1
- Coal 2,014 2,165 (151) (7) (7) 2,087 2,076 11 1 --
- Potash 3,538 3,617 (79) (2) (2) 3,618 3,627 (9) -- (1)
-
Fertilizers
and
sulphur 6,264 6,136 128 2 2 6,276 6,042 234 4 2
- Forest
products 6,131 6,068 63 1 1 6,092 5,849 243 4 2
- Energy,
chemicals
and
plastics 5,226 4,970 256 5 5 5,145 4,900 245 5 3
- Metals,
minerals
and
consumer
products 3,686 3,429 257 7 6 3,620 3,433 187 5 5
- Automotive 5,699 5,201 498 10 7 5,483 5,165 318 6 6
- Intermodal 1,503 1,538 (35) (2) (2) 1,505 1,536 (31) (2) (3)
Total
Freight
Revenue per
Carload $ 3,390 $ 3,394 $ (4) -- (1) $ 3,273 $ 3,255 $ 18 1 (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)
Fourth Quarter Year
--------------------------------- ---------------------------------
Commodity Total % Total %
Data 2025 2024 Change Change 2025 2024 Change Change
------------- ------- ------- ------ ------- ------- ------- ------- ------
Millions of
RTM
- Grain 17,484 17,098 386 2 61,346 58,101 3,245 6
- Coal 5,851 5,890 (39) (1) 23,788 22,887 901 4
- Potash 4,410 4,334 76 2 19,291 17,893 1,398 8
-
Fertilizers
and
sulphur 1,396 1,418 (22) (2) 5,316 5,256 60 1
- Forest
products 2,070 2,363 (293) (12) 8,843 9,075 (232) (3)
- Energy,
chemicals
and
plastics 9,410 9,926 (516) (5) 37,659 38,837 (1,178) (3)
- Metals,
minerals
and
consumer
products 4,674 4,637 37 1 19,211 19,177 34 --
- Automotive 1,330 1,320 10 1 5,493 5,014 479 10
- Intermodal 9,342 8,984 358 4 38,473 35,218 3,255 9
Total RTMs 55,967 55,970 (3) -- 219,420 211,458 7,962 4
------- ------- ------ ------- ------- -------
Carloads
(thousands)
- Grain 162.2 161.4 0.8 -- 570.8 549.6 21.2 4
- Coal 127.6 115.5 12.1 10 491.1 454.3 36.8 8
- Potash 42.4 42.3 0.1 -- 176.9 169.3 7.6 4
-
Fertilizers
and
sulphur 17.4 17.6 (0.2) (1) 67.4 67.2 0.2 --
- Forest
products 30.5 35.1 (4.6) (13) 130.0 139.5 (9.5) (7)
- Energy,
chemicals
and
plastics 139.1 149.3 (10.2) (7) 563.3 581.8 (18.5) (3)
- Metals,
minerals
and
consumer
products 119.9 125.4 (5.5) (4) 495.0 517.6 (22.6) (4)
- Automotive 56.5 62.3 (5.8) (9) 238.9 247.8 (8.9) (4)
- Intermodal 434.6 411.0 23.6 6 1,780.6 1,642.9 137.7 8
Total
Carloads 1,130.2 1,119.9 10.3 1 4,514.0 4,370.0 144.0 3
------- ------- ------ ------- ------- -------
Fourth Quarter Year
------------------------------------------------- ----------------------------------------------
FX FX
Adjusted Adjusted
Total % % Total % %
2025 2024 Change Change Change(1) 2025 2024 Change Change Change(1)
-------- -------- ---------- ------ --------- ------- ------- --------- ------ ---------
Operating
Expenses
(millions)
Compensation
and
benefits $ 621 $ 619 $ 2 -- -- $ 2,581 $ 2,565 $ 16 1 --
Fuel 430 459 (29) (6) (8) 1,731 1,802 (71) (4) (5)
Materials 112 116 (4) (3) (4) 474 406 68 17 17
Equipment
rents 97 94 3 3 4 408 347 61 18 15
Depreciation
and
amortization 519 488 31 6 7 2,019 1,900 119 6 5
Purchased
services and
other 531 538 (7) (1) (2) 2,256 2,347 (91) (4) (5)
Total
Operating
Expenses $ 2,310 $ 2,314 $ (4) -- (1) $ 9,469 $ 9,367 $ 102 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)
Fourth Quarter Year
Total % Total %
2025 2024 Change Change 2025 2024 Change Change
------- ------- ------- ------- ------- ------- ------ ------
Operations
Performance
-------------------
Gross ton-miles
("GTMs")
(millions) 103,196 101,692 1,504 1 403,891 388,958 14,933 4
Train miles
(thousands) 11,817 12,115 (298) (2) 47,170 46,892 278 1
Average train
weight - excluding
local traffic
(tons) 9,395 9,083 312 3 9,228 8,988 240 3
Average train
length - excluding
local traffic
(feet) 7,896 7,606 290 4 7,827 7,623 204 3
Average terminal
dwell (hours) 9.0 10.2 (1.2) (12) 9.8 9.9 (0.1) (1)
Average train speed
(miles per hour,
or "mph")(1) 19.5 18.7 0.8 4 19.2 19.0 0.2 1
Locomotive
productivity (GTMs
/ operating
horsepower)(2) 168 165 3 2 166 165 1 1
Fuel efficiency(3) 1.016 1.025 (0.009) (1) 1.034 1.033 0.001 --
U.S. gallons of
locomotive fuel
consumed
(millions)(4) 104.8 104.2 0.6 1 417.5 401.9 15.6 4
Average fuel price
(U.S. dollars per
U.S. gallon) 2.94 3.15 (0.21) (7) 2.97 3.28 (0.31) (9)
Total Employees and
Workforce
-------------------
Total employees
(average)(5) 19,915 19,973 (58) -- 19,967 20,144 (177) (1)
Total employees
(end of
period)(5) 19,479 19,797 (318) (2) 19,479 19,797 (318) (2)
Workforce (end of
period)(6) 19,502 19,924 (422) (2) 19,502 19,924 (422) (2)
Safety
Indicators(7)
-------------------
FRA personal
injuries per
200,000
employee-hours 1.05 0.86 0.19 22 0.92 0.95 (0.03) (3)
FRA train accidents
per million
train-miles 0.91 1.03 (0.12) (12) 0.85 1.01 (0.16) (16)
(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 U.S. gallons of locomotive fuel consumed
per 1,000 GTMs.
(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 for the three months ended December 31, 2024 has 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 the United States of America ("GAAP") and, therefore, may not be comparable to similar measures presented by other companies. The presentation of these Non-GAAP measures is not intended to be considered in isolation from, as a substitute for, or as superior to the financial information presented in accordance with GAAP.
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 CPKC's operating performance and for planning and forecasting future business operations and future profitability. In addition to the Non-GAAP performance measures noted above, other Non-GAAP performance and liquidity measures include Core adjusted return on invested capital ("Core adjusted ROIC"), Core adjusted dividend payout ratio, Adjusted free cash and Adjusted net debt to adjusted EBITDA ratio. These performance measures were previously presented as Core adjusted combined return on invested capital and Core adjusted combined dividend payout 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 uncertain tax items, 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 special termination benefit costs, 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 KCS 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 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.
2026 Outlook
With a 2026 plan that encompasses profitable, sustainable growth, CPKC expects mid single-digit RTM growth and low double-digit Core adjusted diluted EPS growth. CPKC's expectation for Core adjusted diluted EPS growth in 2026 is based on Core adjusted diluted EPS of $4.61 in 2025. For the purposes of this outlook, CPKC assumes a Core adjusted effective tax rate of 24.75%. CPKC estimates other components of net periodic benefit recovery to be $441 million in 2026. As CPKC continues to invest in service, productivity and safety, the Company plans to invest approximately $2.65 billion in capital programs in 2026, a reduction of approximately 15% from 2025.
The Core adjusted effective tax rate is a Non-GAAP measure, calculated as the effective tax rate adjusted for significant items as they are not considered indicative of future financial trends either by nature or amount nor provide comparability to past performance. In conjunction with other Non-GAAP measures, the Company uses the Core adjusted effective tax rate to evaluate CPKC's operating performance and for planning and forecasting future profitability. Core adjusted effective tax rate also excludes KCS purchase accounting to provide financial statement users with additional transparency by isolating the impact of KCS purchase accounting. This Non-GAAP measure does not have a standardized meaning and is not defined by GAAP and, therefore, may not be comparable to similar measures presented by other companies.
Although CPKC has provided forward-looking Non-GAAP measures (Core adjusted diluted EPS and Core adjusted effective tax rate), management is unable to reconcile, without unreasonable efforts, the forward-looking Core adjusted diluted EPS and Core adjusted effective tax rate to the most comparable GAAP measures, due to unknown variables and uncertainty related to future results. These unknown variables may include unpredictable transactions of significant value. In recent years, CPKC has recognized acquisition-related costs, KCS purchase accounting, adjustments to provisions and settlements of Mexican taxes, changes in income tax rates and a change to an uncertain tax item. These or other similar, large unforeseen transactions affect diluted EPS and effective tax rate but may be excluded from CPKC's Core adjusted diluted EPS and Core adjusted effective tax rate, respectively. Additionally, the U.S.-to-Canadian dollar exchange rate is unpredictable and can have a significant impact on CPKC's reported results but may be excluded from CPKC's Core adjusted diluted EPS and Core adjusted effective tax rate.
Reconciliation of GAAP Performance Measures to Non-GAAP Performance Measures
Significant items that impact "Net income attributable to controlling shareholders" as reported on a GAAP basis for 2025 and 2024 include:
2025:
-- during the course of the year, a gain on sale of an equity investment of
$333 million ($256 million after current income tax expense of $102
million net of deferred income tax recovery of $25 million) recognized in
"Gain on sale of equity investment", that favourably impacted Diluted EPS
by 27 cents as follows:
-- in the fourth quarter, a current tax expense of $26 million
recognized in "Current income tax expense" due to the finalization
of the related tax provision, that unfavourably impacted diluted
EPS by 3 cents;
-- in the second quarter, a gain on sale of an equity investment of
$333 million ($282 million after current income tax expense of $76
million net of deferred income tax recovery of $25 million)
recognized in "Gain on sale of equity investment", that favourably
impacted Diluted EPS by 30 cents; and
-- during the course of the year, acquisition-related costs of $72 million
in connection with the KCS acquisition ($56 million after current income
tax recovery of $16 million), including an expense of $11 million
recognized in "Compensation and benefits" primarily related to synergy
related incentive compensation and restructuring costs, $1 million
recognized in "Materials", $51 million recognized in "Purchased services
and other" primarily related to system migration, legal fees, and other
third party purchased services, and $9 million recognized in "Other
components of net period benefit recovery" related to special termination
benefit costs, that unfavourably impacted Diluted EPS by 6 cents as
follows:
-- in the fourth quarter, acquisition-related costs of $20 million
($17 million after current income tax recovery of $3 million)
including a recovery of $5 million recognized in "Compensation and
benefits", $16 million recognized in "Purchased services and
other", and $9 million recognized in "Other components of net
period benefit recovery", that unfavourably impacted Diluted EPS
by 2 cents;
-- in the third quarter, acquisition-related costs of $13 million
($10 million after current income tax recovery of $3 million)
including costs of $4 million recognized in "Compensation and
benefits", and $9 million recognized in "Purchased services and
other", that unfavourably impacted Diluted EPS by 1 cent;
-- in the second quarter, acquisition-related costs of $19 million
($14 million after current income tax recovery of $5 million)
including costs of $7 million recognized in "Compensation and
benefits", and $12 million recognized in "Purchased services and
other", that unfavourably impacted Diluted EPS by 2 cents; and
-- in the first quarter, acquisition-related costs of $20 million
($15 million after current income tax recovery of $5 million)
including costs of $5 million recognized in "Compensation and
benefits", $1 million recognized in "Materials", and $14 million
recognized in "Purchased services and other", that unfavourably
impacted Diluted EPS by 2 cents.
2024:
-- during the course of the year, a deferred income tax recovery of $81
million on account of changes in tax rates, that favourably impacted
Diluted EPS by 9 cents as follows:
-- in the fourth quarter, a deferred income tax recovery of $78
million due to a decrease in the Louisiana state corporate income
tax rate, that favourably impacted Diluted EPS by 9 cents; and
-- in the second quarter, a deferred income tax recovery of $3
million due to a decrease in the Arkansas state corporate income
tax rate, that had minimal impact on Diluted EPS;
-- during the course of the year, adjustments to provisions and settlements
of Mexican taxes of $4 million recovery ($2 million after deferred income
tax expense of $2 million) recognized in "Compensation and benefits",
that had minimal impact on Diluted EPS as follows:
-- in the fourth quarter, adjustments to provisions and settlements
of Mexican taxes of $7 million recovery ($6 million after deferred
income tax expense of $1 million) recognized in "Compensation and
benefits", that had minimal impact on Diluted EPS;
-- in the third quarter, adjustments to provisions and settlements of
Mexican taxes of $7 million recovery ($6 million after deferred
income tax expense of $1 million) recognized in "Compensation and
benefits", that favourably impacted Diluted EPS by 1 cent; and
-- in the first quarter, adjustments to provisions and settlements of
Mexican taxes of $10 million expense ($10 million after deferred
income tax recovery) recognized in "Compensation and benefits",
that unfavourably impacted Diluted EPS by 1 cent; and
-- during the course of the year, acquisition-related costs of $112 million
in connection with the KCS acquisition ($82 million after current income
tax recovery of $30 million), including an expense of $18 million
recognized in "Compensation and benefits" primarily related to retention
and synergy related incentive compensation costs, $6 million recognized
in "Materials", and $88 million recognized in "Purchased services and
other" primarily related to system migration, relocation expenses, legal
and consulting fees, that unfavourably impacted Diluted EPS by 9 cents as
follows:
-- in the fourth quarter, acquisition-related costs of $22 million
($17 million after current income tax recovery of $5 million)
including costs of $1 million recognized in "Compensation and
benefits", $1 million recognized in "Materials", and $20 million
recognized in "Purchased services and other", that unfavourably
impacted Diluted EPS by 2 cents;
-- in the third quarter, acquisition-related costs of $36 million
($26 million after current income tax recovery of $10 million)
including costs of $11 million recognized in "Compensation and
benefits", $1 million recognized in "Materials", and $24 million
recognized in "Purchased services and other", that unfavourably
impacted Diluted EPS by 3 cents;
-- in the second quarter, acquisition-related costs of $28 million
($19 million after current income tax recovery of $9 million)
including costs of $2 million recognized in "Compensation and
benefits", $2 million recognized in "Materials", and $24 million
recognized in "Purchased services and other", that unfavourably
impacted Diluted EPS by 2 cents; and
-- in the first quarter, acquisition-related costs of $26 million
($20 million after current income tax recovery of $6 million)
including costs of $4 million recognized in "Compensation and
benefits", $2 million recognized in "Materials", and $20 million
recognized in "Purchased services and other", that unfavourably
impacted Diluted EPS by 2 cents.
KCS purchase accounting recognized in "Net income attributable to controlling shareholders" as reported on a GAAP basis for 2025 and 2024 was as follows:
2025:
-- during the course of the year, KCS purchase accounting of $391 million
($285 million after deferred income tax recovery of $106 million),
including costs of $373 million recognized in "Depreciation and
amortization", $3 million recognized in "Purchased services and other"
related to the amortization of equity investments, $21 million recognized
in "Net interest expense", $1 million recognized in "Other income", and a
recovery of $7 million recognized in "Net loss attributable to
non-controlling interest", that unfavourably impacted Diluted EPS by 31
cents as follows:
-- in the fourth quarter, KCS purchase accounting of $109 million
($79 million after deferred income tax recovery of $30 million),
including costs of $105 million recognized in "Depreciation and
amortization", $1 million recognized in "Purchased services and
other", $5 million recognized in "Net interest expense", and a
recovery of $2 million recognized in "Net loss attributable to
non-controlling interest", that unfavourably impacted Diluted EPS
by 8 cents;
-- in the third quarter, KCS purchase accounting of $95 million ($69
million after deferred income tax recovery of $26 million),
including costs of $90 million recognized in "Depreciation and
amortization", $1 million recognized in "Purchased services and
other", $6 million recognized in "Net interest expense", and a
recovery of $2 million recognized in "Net loss attributable to
non-controlling interest", that unfavourably impacted Diluted EPS
by 8 cents;
-- in the second quarter, KCS purchase accounting of $95 million ($70
million after deferred income tax recovery of $25 million),
including costs of $91 million recognized in "Depreciation and
amortization", $5 million recognized in "Net interest expense",
and a recovery of $1 million recognized in "Net loss attributable
to non-controlling interest", that unfavourably impacted Diluted
EPS by 7 cents; and
-- in the first quarter, KCS purchase accounting of $92 million ($67
million after deferred income tax recovery of $25 million),
including costs of $87 million recognized in "Depreciation and
amortization", $1 million recognized in "Purchased services and
other", $5 million recognized in "Net interest expense", $1
million recognized in "Other income", and a recovery of $2 million
recognized in "Net loss attributable to non-controlling interest",
that unfavourably impacted Diluted EPS by 7 cents.
2024:
-- during the course of the year, KCS purchase accounting of $352 million
($256 million after deferred income tax recovery of $96 million),
including costs of $333 million recognized in "Depreciation and
amortization", $3 million recognized in "Purchased services and other"
related to the amortization of equity investments, $20 million recognized
in "Net interest expense", $3 million recognized in "Other income", and a
recovery of $7 million recognized in "Net loss attributable to
non-controlling interest", that unfavourably impacted Diluted EPS by 27
cents as follows:
-- in the fourth quarter, KCS purchase accounting of $93 million ($68
million after deferred income tax recovery of $25 million),
including costs of $87 million recognized in "Depreciation and
amortization", $1 million recognized in "Purchased services and
other" related to the amortization of equity investments, $6
million recognized in "Net interest expense", $1 million
recognized in "Other income", and a recovery of $2 million
recognized in "Net loss attributable to non-controlling interest",
that unfavourably impacted Diluted EPS by 8 cents;
-- in the third quarter, KCS purchase accounting of $89 million ($65
million after deferred income tax recovery of $24 million),
including costs of $85 million recognized in "Depreciation and
amortization", $4 million recognized in "Net interest expense", $1
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 7 cents;
-- in the second quarter, KCS purchase accounting of $86 million ($62
million after deferred income tax recovery of $24 million),
including costs of $82 million recognized in "Depreciation and
amortization", $1 million recognized in "Purchased services and
other" related to the amortization of equity investments, $5
million recognized in "Net interest expense", and a recovery of $2
million recognized in "Net loss attributable to non-controlling
interest", that unfavourably impacted Diluted EPS by 6 cents; and
-- in the first quarter, KCS purchase accounting of $84 million ($61
million after deferred income tax recovery of $23 million),
including costs of $79 million recognized in "Depreciation and
amortization", $1 million recognized in "Purchased services and
other", $5 million recognized in "Net interest expense", $1
million recognized in "Other income", and a recovery of $2 million
recognized in "Net loss attributable to non-controlling interest",
that unfavourably impacted Diluted EPS by 7 cents.
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 EPS
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 For the year ended
ended December 31 December 31
-------------------------------- --------------------------------
(in millions of
Canadian dollars) 2025 2024 2025 2024
======================= =============== =============== =============== ===============
Net income attributable
to controlling
shareholders as
reported $ 1,077 $ 1,201 $ 4,141 $ 3,718
Less:
Significant items
(pre-tax):
Gain on sale of
equity investment -- -- 333 --
Adjustments to
provisions and
settlements of
Mexican taxes -- 7 -- 4
Acquisition-related
costs (20) (22) (72) (112)
KCS purchase
accounting (109) (93) (391) (352)
Add:
Tax effect of
adjustments(1) (7) (29) (45) (124)
Income tax rate
changes -- (78) -- (81)
----------------------- --------------- --------------- --------------- ---------------
Core adjusted income $ 1,199 $ 1,202 $ 4,226 $ 3,973
======================= =============== =============== =============== ===============
(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 5.49% and 34.76% for the
three months and year ended December 31, 2025, and 27.32% and 27.13% for
the three months and year ended December 31, 2024, respectively. The
applicable tax rates reflect the taxable jurisdictions and nature, being
on account of capital or income, of the adjustments.
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 year ended
ended December 31 December 31
---------------------------------- ----------------------------------
2025 2024 2025 2024
===================== ================ ================ ================ ================
Diluted EPS as
reported $ 1.20 $ 1.28 $ 4.51 $ 3.98
Less:
Significant items
(pre-tax):
Gain on sale of
equity investment -- -- 0.36 --
Acquisition-related
costs (0.02) (0.02) (0.08) (0.12)
KCS purchase
accounting (0.12) (0.10) (0.43) (0.38)
Add:
Tax effect of
adjustments(1) (0.01) (0.02) (0.05) (0.14)
Income tax rate
changes -- (0.09) -- (0.09)
--------------------- ---------------- ---------------- ---------------- ----------------
Core adjusted diluted
EPS $ 1.33 $ 1.29 $ 4.61 $ 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 5.49% and 34.76% for the
three months and year ended December 31, 2025, and 27.32% and 27.13% for
the three months and year ended December 31, 2024, respectively. The
applicable tax rates reflect the taxable jurisdictions and nature, being
on account of capital or income, of the adjustments.
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 For the year ended
ended December 31 December 31
-------------------------------- --------------------------------
(in millions of
Canadian dollars) 2025 2024 2025 2024
===================== =============== =============== =============== ===============
Operating income as
reported $ 1,613 $ 1,560 $ 5,609 $ 5,179
Less:
Adjustments to
provisions and
settlements of
Mexican taxes -- 7 -- 4
Acquisition-related
costs (11) (22) (63) (112)
KCS purchase
accounting in
Operating expenses (106) (88) (376) (336)
--------------------- --------------- --------------- --------------- ---------------
Core adjusted
operating income $ 1,730 $ 1,663 $ 6,048 $ 5,623
===================== =============== =============== =============== ===============
For the three months For the year ended
ended December 31 December 31
--------------------
2025 2024 2025 2024
================================ ========== ========== ========= =========
Operating ratio as reported 58.9 % 59.7 % 62.8 % 64.4 %
Less:
Adjustments to provisions and
settlements of Mexican taxes -- % (0.2) % -- % -- %
Acquisition-related costs 0.3 % 0.5 % 0.4 % 0.8 %
KCS purchase accounting in
Operating expenses 2.7 % 2.3 % 2.5 % 2.3 %
-------------------------------- ---------- ---------- --------- ---------
Core adjusted operating ratio 55.9 % 57.1 % 59.9 % 61.3 %
================================ ========== ========== ========= =========
Core Adjusted ROIC
Core adjusted ROIC is calculated as Core adjusted return divided by Core adjusted average invested capital. Core adjusted ROIC excludes significant items reported in the Company's Consolidated Financial Information, as these significant items are not considered indicative of future financial trends either by nature or amount, the impact of KCS purchase accounting excluding amortization of the change in fair value of KCS's debt recognized in "Net interest expense", interest expense, net of tax, and the unamortized discount from the fair value adjustment of KCS debt in the ending debt balance for the periods presented to incorporate returns on the Company's overall capitalization. CPKC uses Core adjusted ROIC to measure how productively the Company uses its long-term capital investments, representing indicators of good operating and investment decisions made by management. Core adjusted ROIC is reconciled below from Return on average shareholders' equity, the most comparable measure calculated in accordance with GAAP.
Calculation of Return on Average Shareholders' Equity
Return on average shareholders' equity is calculated as Net income attributable to controlling shareholders divided by average shareholders' equity, averaged between the beginning and ending balance over a trailing twelve-month period.
For the year ended December 31
--------------------------------------------
(in millions of Canadian
dollars, except for
percentages) 2025 2024
================================ ===================== =====================
Net income attributable to
controlling shareholders as
reported $ 4,141 $ 3,718
Average shareholders' equity 46,885 44,692
-------------------------------- --------------------- ---------------------
Return on average shareholders'
equity 8.8 % 8.3 %
================================ ===================== =====================
Reconciliation of Net Income Attributable to Controlling Shareholders to Core Adjusted Return
Core adjusted return is defined as Net income attributable to controlling shareholders adjusted for interest expense, tax effected at the Company's core adjusted annualized effective tax rate, and significant items and KCS purchase accounting excluding amortization of the change in fair value of KCS's debt recognized in "Net interest expense", tax effected at the applicable tax rate. Detailed quarterly information on significant items and KCS purchase accounting and their tax impacts comprised within the year ended December 31, 2025 and 2024 can be found in the "Reconciliation of GAAP Performance Measures to Non-GAAP Performance Measures" section.
For the year ended December 31
----------------------------------------------------
(in millions of Canadian
dollars) 2025 2024
======================== ========================= =========================
Net income attributable
to controlling
shareholders as
reported $ 4,141 $ 3,718
Add:
Net interest expense 876 801
Less:
Significant items
(pre-tax):
Adjustments to
provisions and
settlements of Mexican
taxes -- 4
Acquisition-related
costs (72) (112)
Gain on sale of equity
investment 333 --
KCS purchase accounting (370) (332)
Tax effect of
adjustments(1) 43 121
Tax on interest(2) 217 194
Income tax rate changes -- 81
------------------------ ------------------------- -------------------------
Core adjusted return $ 4,866 $ 4,563
======================== ========================= =========================
(1) Tax was calculated as the effect of the significant items and KCS
purchase accounting listed above multiplied by the applicable tax rate of
38.77% and 27.74% for the year ended December 31, 2025 and 2024
respectively. The applicable tax rates reflect the taxable jurisdictions
and nature, being on account of capital or income, of the adjustments.
(2) CPKC tax was calculated at the core adjusted annualized effective tax
rate of 24.76% and 24.14% for the year ended December 31, 2025 and 2024,
respectively.
Reconciliation of Average Shareholders' Equity to Core Adjusted Average Invested Capital
Core adjusted average invested capital is defined as the sum of total Shareholders' equity, Long-term debt and Long-term debt maturing within one year, as presented in the Company's Consolidated Financial Information, each averaged between the beginning and ending balance over a trailing twelve-month period, adjusted for the impact of the unamortized fair value adjustment made to debt upon the acquisition of KCS, the impact of significant items and KCS purchase accounting, and tax effected at the applicable tax rate on closing balances as part of this average.
For the year ended December 31
(in millions of Canadian
dollars) 2025 2024
========================== ======================== ========================
Average shareholders'
equity $ 46,885 $ 44,692
Add:
Average long-term debt
including long-term debt
maturing within one
year 22,906 22,559
Less:
Significant items
(pre-tax):
Impact of unamortized
fair value adjustment
to KCS debt(1) (480) (493)
Adjustments to
provisions and
settlements of Mexican
taxes -- 2
Acquisition-related
costs (36) (56)
Gain on sale of equity
investment 167 --
KCS purchase accounting (185) (166)
Tax effect of
adjustments(2) 21 61
Income tax rate changes -- 41
-------------------------- ------------------------ ------------------------
Core adjusted average
invested capital $ 70,304 $ 67,862
========================== ======================== ========================
(1) Relates to the unamortized discount from fair value adjustment of KCS
debt based on the purchase price allocation.
(2) Tax was calculated as the effect of the significant items and KCS
purchase accounting listed above multiplied by the applicable tax rate of
38.77% and 27.74% for the year ended December 31, 2025 and 2024,
respectively. The applicable tax rates reflect the taxable jurisdictions
and nature, being on account of capital or income, of the adjustments.
Calculation of Core Adjusted ROIC
Core adjusted ROIC is defined as Core adjusted return divided by Core adjusted average invested capital.
For the year ended December 31
(in millions of Canadian
dollars, except for
percentages) 2025 2024
================================ ===================== =====================
Core adjusted return $ 4,866 $ 4,563
Core adjusted average invested
capital 70,304 67,862
-------------------------------- --------------------- ---------------------
Core adjusted ROIC 6.9 % 6.7 %
================================ ===================== =====================
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, is not 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 Consolidated Financial Information 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 year ended
ended December 31 December 31
--------------------------------- --------------------------------
(in millions of
Canadian dollars) 2025 2024 2025 2024
===================== ================ =============== =============== ===============
Net cash provided by
operating activities
as reported $ 1,524 $ 1,704 $ 5,309 $ 5,269
Net cash used in
investing
activities (762) (712) (2,665) (2,796)
Effect of foreign
currency
fluctuations on
foreign
currency-denominated
cash and cash
equivalents (10) 45 (53) 54
Less:
Settlements of
Mexican taxes -- (10) (12) (12)
Settlement of
foreign currency
forward contracts,
net of tax -- -- -- (46)
Acquisition-related
costs (7) (37) (42) (103)
Net proceeds from
sale of equity
investment, net of
tax (38) -- 362 --
--------------------- ---------------- --------------- --------------- ---------------
Adjusted free cash $ 797 $ 1,084 $ 2,283 $ 2,688
===================== ================ =============== =============== ===============
FX 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 U.S. dollars and Mexican pesos at the FX rates of the current period.
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 December 31
(in millions of
Canadian Reported Reported Variance FX Adjusted FX Adjusted
dollars) 2025 2024 due to FX 2024 % Change
================ ============ ============ ============== =============== ===========
Freight revenues
by line of
business
Grain $ 984 $ 949 $ -- $ 949 4
Coal 257 250 1 251 2
Potash 150 153 -- 153 (2)
Fertilizers and
sulphur 109 108 -- 108 1
Forest products 187 213 1 214 (13)
Energy,
chemicals and
plastics 727 742 4 746 (3)
Metals,
minerals and
consumer
products 442 430 6 436 1
Automotive 322 324 8 332 (3)
Intermodal 653 632 (1) 631 3
---------------- ------------ ------------ -------------- --------------- -----------
Freight revenues 3,831 3,801 19 3,820 --
Non-freight
revenues 92 73 1 74 24
---------------- ------------ ------------ -------------- --------------- -----------
Total revenues $ 3,923 $ 3,874 $ 20 $ 3,894 1
================ ============ ============ ============== =============== ===========
For the year ended December 31
(in millions of
Canadian Reported Reported Variance FX Adjusted FX Adjusted
dollars) 2025 2024 due to FX 2024 % Change
================ =========== =========== ============= ============== ===========
Freight revenues
by line of
business
Grain $ 3,217 $ 3,012 $ 40 $ 3,052 5
Coal 1,025 943 6 949 8
Potash 640 614 7 621 3
Fertilizers and
sulphur 423 406 7 413 2
Forest products 792 816 14 830 (5)
Energy,
chemicals and
plastics 2,898 2,851 44 2,895 --
Metals,
minerals and
consumer
products 1,792 1,777 15 1,792 --
Automotive 1,310 1,280 4 1,284 2
Intermodal 2,679 2,524 17 2,541 5
---------------- ----------- ----------- ------------- -------------- -----------
Freight revenues 14,776 14,223 154 14,377 3
Non-freight
revenues 302 323 3 326 (7)
---------------- ----------- ----------- ------------- -------------- -----------
Total revenues $ 15,078 $ 14,546 $ 157 $ 14,703 3
================ =========== =========== ============= ============== ===========
FX adjusted % changes in Operating expenses are as follows:
For the three months ended December 31
FX
(in millions of Adjusted
Canadian Reported Reported Variance FX Adjusted %
dollars) 2025 2024 due to FX 2024 Change
================ ============ ============ =============== =============== ========
Compensation and
benefits $ 621 $ 619 $ 5 $ 624 --
Fuel 430 459 6 465 (8)
Materials 112 116 1 117 (4)
Equipment rents 97 94 (1) 93 4
Depreciation and
amortization 519 488 (1) 487 7
Purchased
services and
other 531 538 5 543 (2)
---------------- ------------ ------------ --------------- --------------- --------
Total operating
expenses $ 2,310 $ 2,314 $ 15 $ 2,329 (1)
================ ============ ============ =============== =============== ========
For the year ended December 31
(in millions of
Canadian Reported Reported Variance FX Adjusted FX Adjusted
dollars) 2025 2024 due to FX 2024 % Change
================ =========== =========== =============== ============== ===========
Compensation and
benefits $ 2,581 $ 2,565 $ 9 $ 2,574 --
Fuel 1,731 1,802 16 1,818 (5)
Materials 474 406 -- 406 17
Equipment rents 408 347 7 354 15
Depreciation and
amortization 2,019 1,900 22 1,922 5
Purchased
services and
other 2,256 2,347 21 2,368 (5)
---------------- ----------- ----------- --------------- -------------- -----------
Total operating
expenses $ 9,469 $ 9,367 $ 75 $ 9,442 -- ================ =========== =========== =============== ============== ===========
FX adjusted % change in Operating income is as follows:
For the three months ended December 31
(in millions of
Canadian Reported Reported Variance FX Adjusted FX Adjusted
dollars) 2025 2024 due to FX 2024 % Change
================ =========== =========== =============== ============== ===========
Total revenues $ 3,923 $ 3,874 $ 20 $ 3,894 1
Total operating
expenses 2,310 2,314 15 2,329 (1)
---------------- ----------- ----------- --------------- -------------- -----------
Operating income $ 1,613 $ 1,560 $ 5 $ 1,565 3
================ =========== =========== =============== ============== ===========
For the year ended December 31
(in millions of
Canadian Reported Reported Variance FX Adjusted FX Adjusted
dollars) 2025 2024 due to FX 2024 % Change
================ =========== =========== ============= ============== ===========
Total revenues $ 15,078 $ 14,546 $ 157 $ 14,703 3
Total operating
expenses 9,469 9,367 75 9,442 --
---------------- ----------- ----------- ------------- -------------- -----------
Operating income $ 5,609 $ 5,179 $ 82 $ 5,261 7
================ =========== =========== ============= ============== ===========
Dividend Payout Ratio and Core Adjusted Dividend Payout Ratio
Dividend payout ratio is calculated as dividends declared per share divided by diluted EPS.
Core adjusted dividend payout ratio is calculated as dividends declared per share divided by Core adjusted diluted EPS, as defined above. This ratio is a measure of shareholder return and provides information on the Company's ability to declare dividends on an ongoing basis, excluding significant items and the impact of KCS purchase accounting.
Calculation of Dividend Payout Ratio
For the year ended December 31
(in Canadian dollars, except for
percentages) 2025 2024
================================ ===================== =====================
Dividends declared per share $ 0.874 $ 0.760
Diluted EPS 4.51 3.98
-------------------------------- --------------------- ---------------------
Dividend payout ratio 19.4 % 19.1 %
================================ ===================== =====================
Calculation of Core Adjusted Dividend Payout Ratio
For the year ended December 31
(in Canadian dollars, except for
percentages) 2025 2024
================================ ===================== =====================
Dividends declared per share $ 0.874 $ 0.760
Core adjusted diluted EPS 4.61 4.25
-------------------------------- --------------------- ---------------------
Core adjusted dividend payout
ratio 19.0 % 17.9 %
================================ ===================== =====================
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 December 31 $ 23,188 $ 22,623 Net income attributable to controlling shareholders for the year ended December 31 4,141 3,718 -------------------------- ------------------------ ------------------------ Long-term debt to Net income attributable to controlling shareholders ratio 5.6 6.1 ========================== ======================== ========================
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 ratio.
(in millions of Canadian
dollars) 2025 2024
========================== ======================== ========================
Long-term debt including
long-term debt maturing
within one year as at
December 31 $ 23,188 $ 22,623
Add:
Pension plans deficit(1) 153 161
Operating lease
liabilities 409 366
Fair value adjustment to
KCS debt upon
Control(2) 457 503
Less:
Cash and cash
equivalents 184 739
-------------------------- ------------------------ ------------------------
Adjusted net debt $ 24,023 $ 22,914
========================== ======================== ========================
(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 Statements of Income, excluding significant items reported in "Net income", less "Other components of net periodic benefit recovery" recognized on the Company's Consolidated Statements 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 ratio. Detailed quarterly information on significant items that occurred within the 12 months ended December 31, 2025 and 2024 can be found under the earlier section Core Adjusted Income and Core Adjusted Diluted EPS.
For the year ended December 31
----------------------------------------------------
(in millions of Canadian
dollars) 2025 2024
======================== ========================= =========================
Net income attributable
to controlling
shareholders as
reported $ 4,141 $ 3,718
Add:
Net interest expense 876 801
Income tax expense 1,345 1,059
Depreciation and
amortization 2,019 1,900
Operating lease expense 115 109
Less:
Significant items
(pre-tax):
Adjustments to
provisions and
settlements of Mexican
taxes -- 4
Acquisition-related
costs (63) (112)
Gain on sale of equity
investment 333 --
Other components of net
periodic benefit
recovery 415 352
------------------------ ------------------------- -------------------------
Adjusted EBITDA $ 7,811 $ 7,343 ======================== ========================= =========================
Calculation of Adjusted Net Debt to Adjusted EBITDA Ratio
(in millions of Canadian dollars, except for ratios) 2025 2024 ========================== ======================== ======================== Adjusted net debt as at December 31 $ 24,023 $ 22,914 Adjusted EBITDA for the year ended December 31 7,811 7,343 -------------------------- ------------------------ ------------------------ Adjusted net debt to adjusted EBITDA ratio 3.1 3.1 ========================== ======================== ========================
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SOURCE CPKC
(END) Dow Jones Newswires
January 28, 2026 16:05 ET (21:05 GMT)
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