CANADIAN PACIFIC KANSAS CITY LTD/CN
For the period ended Jun 30, 2025. Filed Jul 31, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Jul 31, 2025
CP$92.17-1.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-01.
0000016875-25-000018
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-07-31.
0000016875-25-000032
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 184 previous paragraphs and 242 current paragraphs.
91 unchanged; 81 reworded; 54 added; 10 removed; 2 previous and 16 current paragraphs rearranged.
Tables are not compared: 20 previous and 31 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (54)
Current report
Second Quarter of 2025 Results
Current report
•Core adjusted diluted EPS was $1.12, an increase of 7% compared to $1.05 in 2024.
Current report
•On May 30, 2025, the Company entered into new four-year collective agreements with the Teamsters Canada Rail Conference ("TCRC") – Train and Engine division and the TCRC - Rail Canada Traffic Controllers division, following binding arbitration. The new collective agreements include annual wage increases of 3%, effective from January 1, 2024 to December 31, 2027.
Current report
•On April 1, 2025, CPKC sold its 50% equity method investment in the Panama Canal Railway Company ("PCRC") to APM Terminals Panama Rail LP (“APM Terminals”), a subsidiary of A.P. Moller-Maersk A/S, for gross proceeds of U.S. $350 million. The Company received cash consideration of U.S. $344 million ($493 million) and recorded a pre-tax gain of U.S. $232 million ($333 million) (U.S. $196 million after tax ($282 million)).
Current report
The increase in GTMs in the first six months of 2025 was primarily due to higher volumes of Grain, Intermodal, Coal, Energy, chemicals and plastics, excluding crude, Potash, and Automotive, partially offset by lower volumes of crude.
Current report
The increase in Freight revenues in the second quarter of 2025 was primarily due to higher volumes as measured by RTMs, partially offset by a decrease in freight revenue per RTM.
Current report
Total Revenues
Current report
RTMs
Current report
The increase in RTMs in the first six months of 2025 was primarily due to higher volumes of Grain, Intermodal, Coal, Energy, chemicals and plastics, excluding crude, Potash, and Automotive, partially offset by lower volumes of crude.
Current report
Freight Revenue per RTM
Current report
Freight revenue per RTM in the first six months of 2025 remained flat primarily due to higher freight rates and the favourable impact of the change in foreign exchange "FX" of $112 million, offset by the unfavourable impact of lower fuel prices on fuel surcharge revenue of $133 million, which includes lower carbon levy surcharge revenue due to the elimination of the Canadian federal carbon tax program effective April 1, 2025.
Current report
In the first six months of 2025, fuel surcharge revenues were$752 million, a decrease of $102 million, or 12%, from $854 million in the same period of 2024. This decrease was primarily due to lower fuel prices, which includes lower carbon levy surcharge revenue due to the elimination of the federal carbon tax program effective April 1, 2025, and the unfavourable impact from the timing of recoveries under the Company's fuel cost adjustment program, partially offset by higher volumes and the favourable impact of the change in FX.
Current report
The increase in Coal revenue in the second quarter of 2025 was primarily due to higher volumes of U.S. coal, higher volumes of Canadian coal to Kamloops, B.C., and an increase in freight revenue per RTM. This increase was partially offset by lower fuel surcharge revenue. Freight revenue per RTM increased due to higher freight rates. Carloads increased more than RTMs due to moving higher volumes of U.S. coal, which has a shorter average length of haul versus Canadian coal.
Current report
The decrease in Potash revenue in the second quarter of 2025 was primarily due to lower volumes of export potash to the U.S. Pacific Northwest, lower volumes of domestic potash, and a decrease in freight revenue per RTM. This decrease was partially offset by higher volumes of export potash to Vancouver and higher freight rates. Freight revenue per RTM decreased due to lower fuel surcharge revenue. RTMs increased while carloads decreased due to moving higher volumes of export potash to Vancouver, which has a longer length of haul, and lower volumes of export potash to the U.S. Pacific Northwest, which has a shorter length of haul.
Current report
The decrease in Fertilizers and sulphur revenue in the second quarter of 2025 was primarily due to lower volumes of dry fertilizers and lower fuel surcharge revenue, partially offset by an increase in freight revenue per RTM due to higher freight rates.
Current report
The decrease in Forest products revenue in the second quarter of 2025 was primarily due to a decrease in freight revenue per RTM and lower volumes of lumber and paperboard. This decrease was partially offset by higher freight rates and higher volumes of wood pulp and panel products. Freight revenue per RTM decreased due to lower fuel surcharge revenue. Carloads decreased while RTMs remained flat due to moving lower volumes of paperboard from Louisiana to Mississippi and Texas, which have shorter lengths of haul, and extending the length of haul of wood pulp from Alberta to Mexico.
Current report
The increase in Energy, chemicals and plastics revenue in the second quarter of 2025 was primarily due to an increase in freight revenue per RTM, higher volumes of liquefied petroleum gas ("L.P.G.") primarily from western Canada to Mexico and Texas, and higher volumes of plastics and gasoline. This increase was partially offset by lower volumes of crude, ethylene glycol, diluents, and biofuels and lower fuel surcharge revenue. Freight revenue per RTM increased due to higher freight rates. RTMs decreased while carloads remained flat due to moving lower volumes of crude, which has a longer length of haul.
Current report
The decrease in Metals, minerals and consumer products revenue in the first six months of 2025 was primarily due to lower volumes of steel and lower fuel surcharge revenue. This decrease was partially offset by higher freight rates, higher volumes of frac sand, and the favourable impact of the change in FX. Carloads decreased more than RTMs due to moving lower volumes of steel within Mexico, which has a shorter length of haul, and moving higher volumes of frac sand to the Bakken shale formation, which has a longer length of haul.
Current report
The increase in Compensation and benefits expense in the first six months of 2025 was primarily due to:
Current report
•increased stock-based compensation expense of $24 million, largely driven by changes in the Common Share price; and
Current report
•increased volume variable expenses as a result of increased workload as measured by GTMs.
Current report
This increase was partially offset by efficiencies gained by a reduction in headcount and lower incentive compensation.
Current report
•increased safety material costs; and
Current report
•higher freight car maintenance.
Current report
•slower cycle times;
Current report
•greater usage of other railways' freight cars.
Current report
•slower cycle times;
Current report
•greater usage of other railways' freight cars;
Current report
•the impact of cost of inflation.
Current report
•lower acquisition-related costs; and
Current report
The decrease in Purchased services and other expense in the first six months of 2025 was primarily due to:
Current report
•lower acquisition-related costs.
Current report
•the impact of the change in FX of $10 million; and
Current report
•higher environmental management expenses.
Current report
Other Income
Current report
Other Income was $9 million in the first six months of 2025, a decrease of $33 million, or 79%, from $42 million in the same period of 2024. The decrease was primarily due to lower equity income of $26 million, driven by the settlement of a property disposition by an equity investee in 2024 and a $16 million gain on debt extinguishment in 2024. This decrease was partially offset by an FX loss of $4 million on forward contracts to sell Mexican pesos and buy U.S. dollars in 2024 (see Item 1. Financial Statements, Note 10 Financial Instruments for details) and a $10 million FX gain from the re-measurement of cash and working capital denominated in Mexican pesos and U.S. dollars compared to a net FX loss in the same period in 2024.
Current report
Net interest expense was $424 million in the first six months of 2025, an increase of $18 million, or 4%, from $406 million in the same period of 2024. The increase was primarily due to interest of $39 million incurred on short-term borrowings and long-term notes issued during the period along with the unfavourable impact of the change in FX of $15 million. This increase was partially offset by lower interest costs of $30 million following the repayment of maturing long-term debt.
Current report
Gain on Sale of Equity Investment
Current report
On April 1, 2025, CPKC sold its 50% equity method investment in the PCRC to APM Terminals. The Company recognized a pre-tax gain of U.S. $232 million ($333 million). See item 1, Financial Statements Note 4 Gain on sale of equity investment for further details.
Current report
Income tax expense was $357 million and $649 million in the second quarter and first six months of 2025, an increase of $65 million or 22%, and $98 million or 18%, from $292 million and $551 million in the same periods of 2024, respectively. The increases were primarily due to income tax expense on a gain on sale of an equity investment of $51 million and higher taxable earnings.
Showing the first 40 of 54 passages. Open the source sections for the rest.
Removed paragraphs (10)
Previous report
First Quarter of 2025 Results
Previous report
•Core adjusted diluted EPS was $1.06, an increase of 14% compared to $0.93 in 2024.
Previous report
•On April 29, 2025, the Company declared a quarterly dividend of $0.228 per share on the outstanding Common Shares, an increase of 20% from $0.190 per share from the prior quarter. The dividend is payable on July 28, 2025 to holders of record at the close of business on June 27, 2025.
Previous report
•On April 2, 2025, the Company announced that CPKC and the Lanco Group/Mi-Jack sold the Panama Canal Railway Company to APM Terminals Panama Rail LP, a subsidiary of A.P. Moller - Maersk A/S. The sale closed on April 1, 2025. See Item 1. Financial Statements, Note 14. Subsequent events for further details.
Previous report
•On February 27, 2025, the Company announced a normal course issuer bid, commencing March 3, 2025, to purchase up to 37.3 million Common Shares in the open market for cancellation before March 2, 2026. See Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds for further details of share repurchases.
Previous report
•greater usage of pooled freight cars by the Company;
Previous report
•slower cycle times; and
Previous report
Other expense (income)
Previous report
Income tax expense was $292 million in the first quarter of 2025, an increase of $33 million, or 13%, from $259 million in the same period of 2024. The increase was primarily due to higher taxable earnings.
Previous report
During the first quarter of 2025, the Company repaid, at maturity, the remaining balance of U.S. $642 million ($930 million) on its 2.90% 10-year Notes.
Reworded paragraphs (81)
Previous wording
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to enhance a reader’s understanding of the Company’s results of operations and financial condition. The MD&A is provided as a supplement to, and should be read in conjunction with, the Company's Interim Consolidated Financial Statements and the related notes as at and for the three months ended March 31, 2025 in Item 1. Financial Statements, other information in this report, and Item 8. Financial Statements and Supplementary Data of the Company's 2024 Annual Report on Form 10-K. Except where otherwise indicated, all financial information reflected herein is expressed in Canadian dollars.
Current wording
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to enhance a reader’s understanding of the Company’s results of operations and financial condition. The MD&A is provided as a supplement to, and should be read in conjunction with, the Company's Interim Consolidated Financial Statements and the related notes as at and for the three and six months ended June 30, 2025 in Item 1. Financial Statements, other information in this report, and Item 8. Financial Statements and Supplementary Data of the Company's 2024 Annual Report on Form 10-K. Except where otherwise indicated, all financial information reflected herein is expressed in Canadian dollars.
Previous wording
In this Quarterly Report on Form 10-Q, unless the context indicates otherwise, references to "CPKC", "the Company", "our", or "us" are to Canadian Pacific Kansas City Limited ("CPKC") and its subsidiaries, which includes Kansas City Southern ("KCS") as a consolidated subsidiary.
Current wording
In this Quarterly Report on Form 10-Q, unless the context indicates otherwise, references to "CPKC", "the Company", "our", or "us" are to Canadian Pacific Kansas City Limited ("CPKC") and its subsidiaries.
Previous wording
The Company has included the Chief Executive Officer's (“CEO”) and Chief Financial Officer's certifications regarding the Company's public disclosure required by Section 302 of the Sarbanes-Oxley Act of 2002 as Exhibits to this report.
Current wording
The Company has included the Chief Executive Officer's (“CEO”) and Chief Financial Officer's ("CFO") certifications regarding the Company's public disclosure required by Section 302 of the Sarbanes-Oxley Act of 2002 as Exhibits to this report.
Previous wording
•Total revenues were $3,795 million, an increase of 8% compared to $3,520 million in 2024. The increase was primarily due to higher freight revenue per revenue ton-mile ("RTM") and higher volumes as measured by RTMs.
Current wording
•Total revenues were $3,699 million, an increase of 3% compared to $3,603 million in 2024. The increase was primarily due to higher volumes as measured by revenue per ton-miles ("RTMs"), partially offset by a decrease in freight revenue per RTM.
Previous wording
•Diluted earnings per share ("EPS") was $0.97, an increase of 17% compared $0.83 in 2024.
Current wording
•Diluted earnings per share ("EPS") was $1.33, an increase of 37% compared to $0.97 in 2024.
Previous wording
•Operating ratio was 65.3%, a 210 basis point improvement from 67.4% in 2024.
Current wording
•Operating ratio was 63.7%, a 110 basis point improvement from 64.8% in 2024.
Previous wording
•Core adjusted operating ratio was 62.5%, a 150 basis point improvement from 64.0% in 2024.
Current wording
•Core adjusted operating ratio was 60.7%, a 110 basis point improvement from 61.8% in 2024.
Previous wording
AGTM is defined as the movement of one ton of train weight over one mile. GTMs are calculated by multiplying total train weight by the distance the train moved. Total train weight comprises the weight of the freight cars, their contents, and any inactive locomotives. An increase in GTMs indicates additional workload. The increase in GTMs in the first quarter of 2025 was primarily due to higher volumes of Coal, Grain, Intermodal, Potash and Automotive.
Current wording
AGTM is defined as the movement of one ton of train weight over one mile. GTMs are calculated by multiplying total train weight by the distance the train moved. Total train weight comprises the weight of the freight cars, their contents, and any inactive locomotives. An increase in GTMs indicates additional workload. The increase in GTMs in the second quarter of 2025 was primarily due to higher volumes of Grain, Intermodal, Potash, and Coal, partially offset by lower volumes of crude.
Previous wording
Train miles are defined as the sum of the distance moved by all trains operated on the network. Train miles provide a measure of the productive utilization of our network. A smaller increase in train miles relative to increases in volumes, as measured by RTMs, and/or workload, as measured by GTMs, indicates improved train productivity. The decrease in train miles in the first quarter of 2025 reflects the impact of a 5% increase in average train weights primarily due to improvement in operating plan efficiency and moving longer and heavier Grain trains, partially offset by a 3% increase in workload (GTMs).
Current wording
Train miles are defined as the sum of the distance moved by all trains operated on the network. Train miles provide a measure of the productive utilization of our network. A smaller increase in train miles relative to increases in volumes, as measured by RTMs, and/or workload, as measured by GTMs, indicates improved train productivity. The increase in train miles in the second quarter of 2025 reflected the impact of a 6% increase in workload (GTMs), partially offset by a 1% increase in average train weights, which was primarily due to an improvement in operating plan efficiency and moving longer and heavier Grain trains.
Previous wording
Fuel efficiency is defined as U.S. gallons of locomotive fuel consumed per 1,000 GTMs. Fuel consumed includes gallons from freight, yard and commuter service but excludes fuel used in capital projects and other non-freight activities. An improvement in fuel efficiency indicates operational cost savings. Fuel efficiency in the first quarter of 2025 remained flat compared to the first quarter of 2024.
Current wording
Fuel efficiency is defined as U.S. gallons of locomotive fuel consumed per 1,000 GTMs. Fuel consumed includes gallons from freight, yard and commuter service but excludes fuel used in capital projects and other non-freight activities. An improvement in fuel efficiency indicates operational cost savings. The decrease in fuel efficiency in the second quarter of 2025 was due to a decrease in locomotive productivity as measured by GTMs / operating horsepower. Fuel efficiency in the first six months of 2025 remained flat compared to the first six months of 2024.
Previous wording
Anemployee is defined as an individual currently engaged in full-time, part-time, or seasonal employment with the Company. The Company monitors employment and workforce levels in order to efficiently meet service and strategic requirements. The number of employees is a key driver of total compensation and benefits costs. The decrease of 1% in the average number of total employees in the first quarter of 2025 was due to efficient resource planning.
Current wording
Anemployee is defined as an individual currently engaged in full-time, part-time, or seasonal employment with the Company. The Company monitors employment and workforce levels in order to efficiently meet service and strategic requirements. The number of employees is a key driver of total compensation and benefits costs. The decrease in the average number of total employees in the second quarter and in the first six months of 2025 was primarily due to efficient resource planning.
Previous wording
The following table presents selected financial data related to the Company’s financial results for the three months ended March 31, 2025 and the comparative period in 2024.
Current wording
The following table presents selected financial data related to the Company’s financial results for the three and six months ended June 30, 2025 and the comparative periods in 2024.
Previous wording
(2)Operating ratio is defined as operating expenses divided by revenues.
Current wording
(2)Operating ratio is defined as total operating expenses divided by total revenues.
Previous wording
RTMs are defined as the movement of one revenue-producing ton of freight over a distance of one mile. RTMs measure the relative weight and distance of rail freight moved by the Company. The increase in RTMs in the first quarter of 2025 was primarily due to higher volumes of Coal, Grain, Intermodal, Potash, and Automotive.
Current wording
RTMs are defined as the movement of one revenue-producing ton of freight over a distance of one mile. RTMs measure the relative weight and distance of rail freight moved by the Company. The increase in RTMs in the second quarter of 2025 was primarily due to higher volumes of Grain, Intermodal, Potash, and Coal, partially offset by lower volumes of crude.
Previous wording
Freight revenue per RTM is defined as freight revenue per revenue-producing ton of freight over a distance of one mile. This is an indicator of yield. The increase in freight revenue per RTM in the first quarter of 2025 was primarily due to the favourable impact of the change in foreign exchange ("FX") of $114 million and higher freight rates, partially offset by the unfavourable impact of lower fuel prices on fuel surcharge revenue of $33 million.
Current wording
Freight revenue per RTM is defined as freight revenue per revenue-producing ton of freight over a distance of one mile. This is an indicator of yield. The decrease in freight revenue per RTM in the second quarter of 2025 was primarily due to the unfavourable impact of lower fuel prices on fuel surcharge revenue of $100 million, which includes lower carbon levy surcharge revenue due to the elimination of the Canadian federal carbon tax program effective April 1, 2025, partially offset by higher freight rates.
Previous wording
The increase in Freight revenues in the first quarter of 2025 was primarily due to higher freight revenue per RTM and higher volumes as measured by RTMs. The decrease in Non-freight revenues was primarily due to lower revenue related to a subsurface fibre optic agreement.
Current wording
The increase in Freight revenues in the first six months of 2025 was primarily due to higher volumes as measured by RTMs. The decrease in Non-freight revenues was primarily due to lower revenue related to a subsurface fibre optic agreement.
Previous wording
Freight revenues include fuel surcharge revenues associated with the Company's fuel cost adjustment program, which is designed to respond to fluctuations in fuel prices and help reduce exposure to changing fuel prices. The surcharge is applied to shippers through tariffs and by contract, within agreed-upon guidelines. This program includes recoveries of carbon taxes, levies, and obligations under cap-and-trade programs. Freight revenues included fuel surcharge revenues of $402 million in the first quarter of 2025, a decrease of $10 million, or 2%, from $412 million in the same period of 2024. This decrease was primarily due to lower fuel prices, partially offset by increased carbon levy surcharge revenue, higher volumes, and the favourable impact of the change in FX.
Current wording
Freight revenues include fuel surcharge revenues associated with the Company's fuel cost adjustment program, which is designed to respond to fluctuations in fuel prices and reduce exposure to changes in fuel prices. The surcharge is applied to shippers through tariffs and by contract, within agreed-upon guidelines. This program includes recoveries of carbon taxes, levies, and obligations under cap-and-trade programs. Freight revenues included fuel surcharge revenues of $350 million in the second quarter of 2025, a decrease of $92 million, or 21%, from $442 million in the same period of 2024. This decrease was primarily due to lower fuel prices, which includes lower carbon levy surcharge revenue due to the elimination of the Canadian federal carbon tax program effective April 1, 2025, and the unfavourable impact from the timing of recoveries under the Company's fuel cost adjustment program, partially offset by higher volumes.
Previous wording
The increase in Grain revenue in the first quarter of 2025 was primarily due to higher volumes of Canadian grain to Vancouver, British Columbia ("B.C.") and Mexico due to a larger crop size for the 2024-2025 crop year, higher volumes of U.S. corn to the U.S. Pacific Northwest and U.S. soybean meal products to Mexico, and an increase in freight revenue per RTM. This increase was partially offset by lower volumes of U.S. corn to Mexico and Alberta, U.S. soybeans to the U.S. Pacific Northwest, and the unfavourable impact of lower fuel prices on fuel surcharge revenue. Freight revenue per RTM increased due to the favourable impact of the change in FX and higher freight rates.
Current wording
The increase in Grain revenue in the first six months of 2025 was primarily due to higher volumes of Canadian grain to Vancouver and Thunder Bay due to a larger crop size for the 2024-2025 crop year, higher volumes of U.S. grain to Mexico, and an increase in freight revenue per RTM. This increase was partially offset by lower fuel surcharge revenue. Freight revenue per RTM increased due to higher freight rates and the favourable impact of the change in FX.
Previous wording
The increase in Coal revenue in the first quarter of 2025 was primarily due to an increase in freight revenue per RTM, higher volumes of Canadian coal to Kamloops, B.C., Vancouver, and Thunder Bay, Ontario and higher volumes of U.S. coal. This increase was partially offset by the unfavourable impact of lower fuel prices on fuel surcharge revenue. Freight revenue per RTM increased due to higher freight rates and the favourable impact of the change in FX.
Current wording
The increase in Coal revenue in the first six months of 2025 was primarily due to an increase in freight revenue per RTM, higher volumes of Canadian coal to Kamloops and Vancouver, and higher volumes of U.S. coal. This increase was partially offset by lower fuel surcharge revenue. Freight revenue per RTM increased due to higher freight rates and the favourable impact of the change in FX.
Previous wording
The increase in Potash revenue in the first quarter of 2025 was primarily due to higher volumes of export potash to Vancouver and the U.S. Pacific Northwest and an increase in freight revenue per RTM. This increase was partially offset by lower volumes of export potash to Texas and Kamloops and the unfavourable impact of lower fuel prices on fuel surcharge revenue. Freight revenue per RTM increased due to higher freight rates and the favourable impact of the change in FX.
Current wording
The increase in Potash revenue in the first six months of 2025 was primarily due to higher volumes of export potash to Vancouver, higher freight rates, and the favourable impact of the change in FX. This increase was partially offset by lower volumes of export potash to the U.S. Pacific Northwest, lower volumes of domestic potash, and a decrease in freight revenue per RTM. Freight revenue per RTM decreased due to lower fuel surcharge revenue. RTMs increased more than carloads due to moving higher volumes of export potash to Vancouver, which has a longer length of haul, and lower volumes of export potash to the U.S. Pacific Northwest, which has a shorter length of haul.
Previous wording
The increase in Fertilizers and sulphur revenue in the first quarter of 2025 was primarily due to an increase in freight revenue per RTM and higher volumes of sulphur and wet fertilizers, partially offset by the unfavourable impact of lower fuel prices on fuel surcharge revenue. Freight revenue per RTM increased due to the favourable impact of the change in FX and higher freight rates.
Current wording
The increase in Fertilizers and sulphur revenue in the first six months of 2025 was primarily due to higher volumes of sulphur and wet fertilizers and an increase in freight revenue per RTM, partially offset by lower volumes of dry fertilizers and lower fuel surcharge revenue. Freight revenue per RTM increased due to the favourable impact of the change in FX and higher freight rates.
Previous wording
The increase in Forest products revenue in the first quarter of 2025 was primarily due to higher volumes of wood pulp and paperboard and an increase in freight revenue per RTM, partially offset by the unfavourable impact of lower fuel prices on fuel surcharge revenue and lower volumes of newsprint. Freight revenue per RTM increased due to the favourable impact of the change in FX and higher freight rates. RTMs increased while carloads decreased due to extending the length of haul of wood pulp from B.C. to Texas, Ontario, and New York and moving lower volumes of wood pulp within B.C., which has a shorter length of haul.
Current wording
The increase in Forest products revenue in the first six months of 2025 was primarily due to higher freight rates, higher volumes of wood pulp, panel products, and paperboard, and the favourable impact of the change in FX. This increase was partially offset by lower fuel surcharge revenue and lower volumes of newsprint and lumber. Carloads decreased while RTMs increased due to moving lower volumes of paperboard from Louisiana to Mississippi and Texas, which have shorter lengths of haul, and extending the length of haul of wood pulp from Alberta to Mexico and from B.C. to Ontario and Texas.
Previous wording
The increase in Energy, chemicals and plastics revenue in the first quarter of 2025 was primarily due to higher volumes of liquefied petroleum gas, styrene, gasoline, and ethylene glycol and an increase in freight revenue per RTM. This increase was partially offset by lower volumes of crude and the unfavourable impact of lower fuel prices on fuel surcharge revenue. Freight revenue per RTM increased due to the favourable impact of the change in FX and higher freight rates.
Current wording
The increase in Energy, chemicals and plastics revenue in the first six months of 2025 was primarily due to an increase in freight revenue per RTM, higher volumes of L.P.G. primarily from western Canada to Mexico and Texas, and higher volumes of gasoline. This increase was partially offset by lower volumes of crude and lower fuel surcharge revenue. Freight revenue per RTM increased due to higher freight rates and the favourable impact of the change in FX.
Previous wording
The increase in Metals, minerals and consumer products revenue in the first quarter of 2025 was primarily due to an increase in freight revenue per RTM and higher volumes of frac sand and cement, partially offset by lower volumes of steel and the unfavourable impact of lower fuel prices on fuel surcharge revenue. Freight revenue per RTM increased due to higher freight rates and the favourable impact of the change in FX. Carloads decreased while RTMs remained flat due to moving lower volumes of steel within Mexico, which has a shorter length of haul.
Current wording
The decrease in Metals, minerals and consumer products revenue in the second quarter of 2025 was primarily due to lower volumes of steel and clay bentonite and a decrease in freight revenue per RTM. This decrease was partially offset by higher freight rates and higher volumes of frac sand. Freight revenue per RTM decreased due to lower fuel surcharge revenue and the unfavourable impact of the change in FX. Carloads decreased more than RTMs due to moving lower volumes of steel within Mexico, which has a shorter length of haul, and moving higher volumes of frac sand to the Bakken shale formation, which has a longer length of haul.
Previous wording
The increase in Automotive revenue in the first quarter of 2025 was primarily due to higher volumes from Mexico to the U.S. Midwest and Texas, from Chicago, Illinois and Kansas City, Missouri to Canada, and from Vancouver to eastern Canada, higher freight rates, and the favourable impact of the change in FX. This increase was partially offset by a decrease in freight revenue per RTM due to the unfavourable impact of lower fuel prices on fuel surcharge revenue. RTMs increased more than carloads due to extending the length of haul from Mexico to the U.S. Midwest and moving higher volumes from Vancouver to eastern Canada, which has a longer length of haul.
Current wording
The increase in Automotive revenue in the first six months of 2025 was primarily due to higher volumes from Mexico to the U.S. Midwest and Texas and from Vancouver to eastern Canada and higher freight rates. This increase was partially offset by a decrease in freight revenue per RTM due to lower fuel surcharge revenue and the unfavourable impact of the change in FX. RTMs increased while carloads decreased due to extending the length of haul from Mexico to the U.S. Midwest and moving lower volumes from Mexico to Laredo, which has a shorter length of haul.
Previous wording
The increase in Intermodal revenue in the first quarter of 2025 was primarily due to higher domestic intermodal wholesale and retail volumes, higher international intermodal volumes to and from the Port of Saint John and the Port of Lazaro, and an increase in freight revenue per RTM. This increase was partially offset by lower international intermodal volumes to and from the Port of Vancouver and the Port of Montréal and the unfavourable impact of lower fuel prices on fuel surcharge revenue. Freight revenue per RTM increased due to the favourable impact of the change in FX and higher freight rates.
Current wording
The increase in Intermodal revenue in the first six months of 2025 was primarily due to higher international intermodal volumes to and from the Port of Vancouver and the Port of Saint John, including with the new Gemini Cooperation shipping alliance, higher domestic intermodal wholesale and retail volumes, higher freight rates, and the favourable impact of the change in FX. This increase was partially offset by a decrease in freight revenue per RTM due to lower fuel surcharge revenue.
Previous wording
Compensation and benefits expense includes employee wages, salaries, fringe benefits, and stock-based compensation. The decrease in Compensation and benefits expense in the first quarter of 2025 was primarily due to a decrease in stock-based compensation of $26 million primarily driven by the change in share price, and adjustments to provisions for Mexican taxes of $10 million recognized in 2024. The decrease was partially offset by the impact of wage and benefit inflation.
Current wording
Compensation and benefits expense includes employee wages, salaries, fringe benefits, and stock-based compensation. The increase in Compensation and benefits expense in the second quarter of 2025 was primarily due to an increase in stock-based compensation of $50 million largely driven by changes in the Common Share price, and the impact of wage and benefit inflation. This increase was partially offset by lower incentive compensation.
Previous wording
Fuel expense consists mainly of fuel used by locomotives and includes provincial, state, and federal fuel taxes. The increase in Fuel expense in the first quarter of 2025 was primarily due to an increase in workload, as measured by GTMs and the unfavourable impact of change in FX of $11 million. The increase was partially offset by the impact of lower fuel prices of $11 million.
Current wording
Fuel expense consists primarily of fuel used by locomotives and includes provincial, state, and federal fuel taxes. The decreases in Fuel expense in the second quarter of 2025 and first six months of 2025 were primarily due to the impact of lower fuel prices of $75 million and $86 million, respectively, which includes lower carbon tax expense due to the elimination of the Canadian federal carbon tax program effective April 1, 2025. The decreases were partially offset by an increase in workload, as measured by GTMs.
Previous wording
Materials expense includes the cost of materials used for the maintenance of track, locomotives, freight cars, and buildings, as well as software sustainment. The increase in Materials expense in the first quarter of 2025 was primarily due to higher locomotive materials costs due to a new parts agreement insourcing a subset of maintenance work with a favourable offset in "Purchased services and other" effective in the fourth quarter of 2024, and increased track maintenance.
Current wording
Materials expense includes the cost of materials used for the maintenance of track, locomotives, freight cars, and buildings, as well as software sustainment. The increases in Materials expense in the second quarter and in the first six months of 2025 were primarily due to:
Previous wording
Equipment rents expense includes the cost associated with using other railways' freight cars, intermodal equipment, and locomotives, net of recoveries received from other railways for the use of the Company’s equipment. The increase in Equipment rents expense was primarily due to:
Current wording
Equipment rents expense includes the cost associated with using other railways' freight cars, intermodal equipment, and locomotives, net of recoveries received from other railways for the use of the Company’s equipment. The increase in Equipment rents expense in the second quarter of 2025 was primarily due to:
Previous wording
•the unfavourable impact of change in FX of $5 million.
Current wording
•the impact of change in FX of $7 million; and
Previous wording
Depreciation and amortization expense is the charge associated with the use of track and roadway, rolling stock, buildings, and other depreciable assets, including assets related to a concession granted by the Mexican government, as well as amortization of finite life intangible assets. The increase in Depreciation and amortization expense in the first quarter of 2025 was primarily due to a higher depreciable asset base increasing depreciation by $16 million and the unfavourable impact of the change in FX of $19 million.
Current wording
Depreciation and amortization expense is the charge associated with the use of track and roadway, rolling stock, buildings, and other depreciable assets, including assets related to the Company's concession granted by the Mexican government, as well as amortization of finite life intangible assets. The increase in Depreciation and amortization expense in the second quarter of 2025, compared to the same period in 2024, was primarily due to a larger depreciable asset base increasing depreciation by $18 million.
Previous wording
Purchased services and other expense encompasses a wide range of third-party costs, including expenses for joint facilities, personal injury and damage claims, provisions for environmental remediation, property taxes, contractor and consulting fees, and insurance premiums. The increase in Purchased services and other expense in the first quarter of 2025 was primarily due to:
Current wording
Purchased services and other expense encompasses a wide range of third-party costs, including expenses for joint facilities, personal injury and damage claims, environmental remediation, property taxes, contractor and consulting fees, and insurance premiums. The decrease in Purchased services and other expense in the second quarter of 2025 was primarily due to:
Previous wording
•lower casualty incident costs; and
Current wording
•a decrease in casualty incident costs; and
Previous wording
Other expense (income) consists of gains and losses from the change in FX on cash and working capital, financing costs, shareholder costs, equity earnings, and other non-operating expenditures. Other expense was $7 million in the first quarter of 2025, a change of $9 million, or 450%, compared to income of $2 million in the same period of 2024. This change was primarily due to the unfavourable impact of net FX losses on U.S. denominated cash and working capital compared to net FX gains in the same period of 2024.
Current wording
Other income consists of gains and losses from the change in FX on cash and working capital, the impact of foreign currency forwards, financing costs, shareholder costs, equity earnings, and other non-operating expenditures. Other Income was $16 million in the second quarter of 2025, a decrease of $24 million, or 60%, from $40 million in the same period of 2024. The decrease was primarily due to lower equity income of $24 million, driven by the settlement of a property disposition by an equity investee in 2024, and a $16 million gain on debt extinguishment in 2024. This decrease was offset by a $16 million net FX gain from the re-measurement of cash and working capital denominated in Mexican pesos and U.S. dollars compared to a net FX loss on the re-measurement in the same period of 2024.
Previous wording
Other components of net periodic benefit recovery are related to the Company's pension and other post-retirement and post-employment benefit plans. It includes interest cost on benefit obligation, expected return on plan assets, recognized net actuarial loss, and amortization of prior service costs. Other components of net periodic benefit recovery was $107 million in the first quarter of 2025, an increase of $19 million, or 22%, compared to the same period of 2024. The increase was primarily due to an increase in expected return on plan assets of $9 million and a decrease in recognized net actuarial loss of $8 million.
Current wording
Other components of net periodic benefit recovery are related to the Company's defined benefit pension and other post-retirement and post-employment benefit plans. It includes interest cost on benefit obligation, expected return on plan assets, recognized net actuarial loss, and amortization of prior service costs. Other components of net periodic benefit recovery were $107 million and $214 million for the three and six months ended June 30, 2025, an increase of $19 million or 22%, and $38 million or 22%, respectively, compared to the same periods of 2024. These increases were primarily due to an increase in the expected return on plan assets for the three and six months ended June 30, 2025 of $9 million and $18 million, respectively, and a decrease in the recognized net actuarial loss of $9 million and $17 million, respectively.
Previous wording
Net interest expense includes interest on long-term debt, short-term debt, and finance leases. Net interest expense was $216 million in the first quarter of 2025, an increase of $10 million, or 5%, from $206 million in the same period of 2024. The increase was primarily due to interest of $16 million incurred on short-term borrowings and the issuance of long-term notes, along with the unfavourable impact of the change in FX of $12 million. The increase was partially offset by lower interest costs of $14 million following the repayment of maturing long-term debt.
Current wording
Net interest expense includes interest on long-term debt, short-term debt, and finance leases. Net interest expense was $208 million in the second quarter of 2025, an increase of $8 million, or 4%, from $200 million in the same period of 2024. The increase was primarily due to interest of $24 million incurred on long-term notes issue during the quarter. This increase was partially offset by lower interest costs of $15 million following the repayment of maturing long-term debt.
Previous wording
The effective income tax rate in the first quarter of 2025 was 24.32% compared to 25.09% in the same period of 2024. The Core adjusted effective tax rate in the first quarter of 2025 was 24.50%, compared to 25.00% in the same period of 2024. The Company's 2025 Core adjusted effective tax rate is expected to be approximately 24.50%. 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 or past financial trends either by nature or amount. 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. Significant items and KCS purchase accounting are discussed further in Non-GAAP Measures of this Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The outlook for the Company’s 2025 Core adjusted effective tax rate is based on certain assumptions about events and developments that may or may not materialize, or that may be offset entirely or partially by new events and developments. This is discussed further in Item 1A. Risk Factors of the Company's 2024 Annual Report on Form 10-K. Refer also to "Forward-Looking Statements" below for further details.
Current wording
The effective tax rates for the second quarter and first six months of 2025 were 22.45% and 23.26%, respectively, compared to 24.40% and 24.72% for the same periods in 2024. The Core adjusted effective income tax rate for the second quarter and first six months of 2025 was 24.50%, compared to 25.00% for the same periods in 2024. The Company's 2025 Core adjusted effective tax rate is expected to be approximately 24.50%. 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 or past financial trends either by nature or amount. 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. Significant items and KCS purchase accounting are discussed further in Non-GAAP Measures of this Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The outlook for the Company’s 2025 Core adjusted effective tax rate is based on certain assumptions about events and developments that may or may not materialize, or that may be offset entirely or partially by new events and developments. This is discussed further in Item 1A. Risk Factors of the Company's 2024 Annual Report on Form 10-K. Refer also to "Forward-Looking Statements" below for further details.
Previous wording
Impact of Foreign Exchange on Earnings and Foreign Exchange Risk
Current wording
Impact of FX on Earnings and Foreign Exchange Risk
Previous wording
Although the Company is headquartered in Canada and reports in Canadian dollars, a significant portion of its revenues, expenses, assets and liabilities, including debt, are denominated in U.S. dollars and Mexican pesos ("Ps."). The value of the Canadian dollar is affected by a number of domestic and international factors, including, without limitation, economic performance, commodity prices, and Canadian, U.S., and international monetary policies. Fluctuations in FX affect the Company’s financial results because revenues and expenses denominated in U.S. dollars and Mexican pesos are translated into Canadian dollars. U.S. dollar-denominated revenues and expenses increase (decrease) when the Canadian dollar weakens (strengthens) in relation to the U.S. dollar. Mexican peso-denominated revenues and expenses increase (decrease) when the U.S. dollar weakens (strengthens) in relation to the Mexican peso.
Current wording
Although the Company is headquartered in Canada and reports in Canadian dollars, a significant portion of its revenues, expenses, assets and liabilities including debt are denominated in U.S. dollars and Mexican pesos. The value of the Canadian dollar is affected by a number of domestic and international factors, including, without limitation, economic performance, commodity prices, and Canadian, U.S., and international monetary policies. Fluctuations in FX affect the Company’s results because revenues and expenses denominated in U.S. dollars and Mexican pesos are translated into Canadian dollars. U.S. dollar-denominated revenues and expenses increase (decrease) when the Canadian dollar weakens (strengthens) in relation to the U.S. dollar. Mexican peso-denominated revenues and expenses increase (decrease) when the U.S. dollar weakens (strengthens) in relation to the Mexican peso.
Showing the first 40 of 81 pairs. Open the source sections for the rest.
Rearranged current paragraphs (16)
Current report — wording carried from elsewhere
The increase in train miles in the first six months of 2025 reflected the impact of a 4% increase in workload (GTMs) partially offset by a 3% increase in average train weights, which was primarily due to an improvement in operating plan efficiency and moving longer and heavier Grain trains.
Current report — wording carried from elsewhere
The increase in Grain revenue in the second quarter of 2025 was primarily due to higher volumes of Canadian grain to Vancouver, British Columbia ("B.C.") and Thunder Bay, Ontario due to a larger crop size for the 2024-2025 crop year, higher volumes of U.S. grain to Mexico and the U.S. Pacific Northwest, and higher freight rates. This increase was partially offset by a decrease in freight revenue per RTM due to lower fuel surcharge revenue.
Current report — wording carried from elsewhere
The decrease in Automotive revenue in the second quarter of 2025 was primarily due to a decrease in freight revenue per RTM, partially offset by higher volumes from Mexico to the U.S. Midwest and Texas and from Vancouver to eastern Canada and higher freight rates. Freight revenue per RTM decreased due to lower fuel surcharge revenue and the unfavourable impact of the change in FX. RTMs increased while carloads decreased due to extending the length of haul from Mexico to the U.S. Midwest and moving lower volumes from Mexico to Laredo, Texas, which has a shorter length of haul.
Current report — wording carried from elsewhere
The increase in Intermodal revenue in the second quarter of 2025 was primarily due to higher international intermodal volumes to and from the Port of Vancouver and the Port of Saint John, including with the new Gemini Cooperation shipping alliance, higher domestic intermodal wholesale and retail volumes, and higher freight rates. This increase was partially offset by a decrease in freight revenue per RTM due to lower fuel surcharge revenue. RTMs increased more than carloads due to moving higher volumes of international intermodal to and from the Port of Vancouver, which has a longer length of haul.
Current report — wording carried from elsewhere
•the impact of wage and benefit inflation;
Current report — wording carried from elsewhere
•higher locomotive material costs due to a new parts agreement insourcing a subset of maintenance work with a favourable offset in "Purchased services and other" effective in the fourth quarter of 2024;
Current report — wording carried from elsewhere
•the impact of cost inflation; and
Current report — wording carried from elsewhere
The increase in Equipment rents expense in the first six months of 2025 was primarily due to:
Current report — wording carried from elsewhere
The increase in Depreciation and amortization expense in the first six months of 2025, compared to the same period in 2024, was primarily due to a larger depreciable asset base increasing depreciation by $38 million and the unfavourable impact of the change in FX of $21 million.
Current report — wording carried from elsewhere
•lower third-party locomotive costs due to insourcing and a new parts agreement embedded in "Materials" effective in the fourth quarter of 2024;
Current report — wording carried from elsewhere
This decrease was partially offset by:
Current report — wording carried from elsewhere
In the second quarter of 2025, the U.S. dollar strengthened to an average rate of $1.38 Canadian/U.S. dollar and the Mexican Peso weakened to an average rate of Ps. 14.09 Mexican Peso/Canadian dollar, compared to $1.37 Canadian/U.S. dollar and Ps. 12.61 Mexican Peso/Canadian dollar in the second quarter of 2024, resulting in a decrease in "Total revenues" of $2 million, a decrease in "Total operating expenses" of $14 million, and an increase in "Net interest expense" of $3 million from the same period of 2024.
Current report — wording carried from elsewhere
If the Company’s credit ratings were to decline to below investment-grade levels, the Company could experience a significant increase in its interest cost for new debt along with a negative effect on its ability to readily issue new debt.
Current report — wording carried from elsewhere
Non-GAAP financial measures may provide additional insight to investors and other external users of the Company's financial information.
Current report — wording carried from elsewhere
–in the first quarter, acquisition-related costs of $20 million in connection with the KCS acquisition ($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.
Current report — wording carried from elsewhere
–in the first quarter, acquisition-related costs of $26 million in connection with the KCS acquisition ($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.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
•the unfavorable impact of the change in FX of $14 million; and
Previous report — wording carried elsewhere
The increase was partially offset by: