CANADIAN PACIFIC KANSAS CITY LTD/CN
For the period ended Sep 30, 2025. Filed Oct 30, 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.
Sep 30, 2025 · Filed Oct 30, 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 2025-06-30; filed 2025-07-31.
0000016875-25-000032
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-10-30.
0000016875-25-000039
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 242 previous paragraphs and 247 current paragraphs.
112 unchanged; 107 reworded; 24 added; 15 removed; 8 previous and 4 current paragraphs rearranged.
Tables are not compared: 31 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 (24)
Current report
Third Quarter of 2025 Results
Current report
•Core adjusted diluted EPS was $1.10, an increase of 11% compared to $0.99 in 2024.
Current report
•lower incentive compensation;
Current report
•decreased stock-based compensation expense of $24 million, including changes in the Common Share price.
Current report
The increase in Materials expense in the first nine months of 2025 was primarily due to:
Current report
•higher freight car maintenance; and
Current report
•increased safety material costs.
Current report
•increased cycle times increasing the Company's rental duration of other railways' freight cars;
Current report
•lower usage of the Company's freight cars by other railways; and
Current report
•increased cycle times increasing the Company's rental duration of other railways' freight cars;
Current report
•greater usage of pooled freight cars by the Company;
Current report
•lower track repair costs.
Current report
•the impact of cost inflation;
Current report
Other Expense (Income)
Current report
Income tax expense was $296 million in the third quarter of 2025, an increase of $34 million or 13%, from $262 million in the same period of 2024. The increase was primarily due to higher taxable earnings.
Current report
Net cash provided by operating activities remained relatively unchanged in the third quarter of 2025, compared to the same period in 2024.
Current report
Net cash used in investing activities increased $122 million in the third quarter of 2025, compared to the same period in 2024. The increase was primarily due to higher capital additions.
Current report
–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; and
Current report
•during the first nine months, adjustments to provisions and settlements of Mexican taxes of $3 million expense ($4 million after deferred income tax expense of $1 million) recognized in "Compensation and benefits", that had minimal impact on Diluted EPS as follows:
Current report
–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
Current report
•during the first nine months, acquisition-related costs of $90 million in connection with the KCS acquisition ($65 million after current income tax recovery of $25 million), including costs of $17 million recognized in "Compensation and benefits", $5 million recognized in "Materials", and $68 million recognized in "Purchased services and other", that unfavourably impacted Diluted EPS by 7 cents as follows:
Current report
–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;
Current report
–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;
Current report
–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 expense (income)", and a recovery of $1 million recognized in "Net loss attributable to non-controlling interest", that unfavourably impacted Diluted EPS by 7 cents;
Removed paragraphs (15)
Previous report
Second Quarter of 2025 Results
Previous report
•Core adjusted diluted EPS was $1.12, an increase of 7% compared to $1.05 in 2024.
Previous report
Recent Developments
Previous 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.
Previous 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)).
Previous report
•increased stock-based compensation expense of $24 million, largely driven by changes in the Common Share price; and
Previous report
•increased safety material costs; and
Previous report
•higher freight car maintenance.
Previous report
•slower cycle times;
Previous report
•greater usage of other railways' freight cars.
Previous report
•slower cycle times;
Previous report
•greater usage of other railways' freight cars;
Previous report
•lower terminal service costs.
Previous report
•the impact of the change in FX of $10 million; and
Reworded paragraphs (107)
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 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.
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 nine months ended September 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.
Current wording
In this Quarterly Report on Form 10-Q, unless the context indicates otherwise, references to "CPKC", "the Company" or "our" are to Canadian Pacific Kansas City Limited ("CPKC") and its subsidiaries.
Previous 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.
Current wording
•Total revenues were $3,661 million, an increase of 3% compared to $3,549 million in 2024. The increase was primarily due to higher volumes as measured by revenue ton-miles ("RTMs"), partially offset by a decrease in freight revenue per RTM.
Previous wording
•Diluted earnings per share ("EPS") was $1.33, an increase of 37% compared to $0.97 in 2024.
Current wording
•Diluted earnings per share ("EPS") was $1.01, an increase of 12% compared to $0.90 in 2024.
Previous wording
•Operating ratio was 63.7%, a 110 basis point improvement from 64.8% in 2024.
Current wording
•Operating ratio was 63.5%, a 260 basis point improvement from 66.1% in 2024.
Previous wording
•Core adjusted operating ratio was 60.7%, a 110 basis point improvement from 61.8% in 2024.
Current wording
•Core adjusted operating ratio was 60.7%, a 220 basis point improvement from 62.9% 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 second quarter of 2025 was primarily due to higher volumes of Grain, Intermodal, Potash, and Coal, partially offset by lower volumes of crude.
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 third quarter of 2025 was primarily due to higher volumes of Intermodal, Grain, Potash, Coal, and Automotive.
Previous wording
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 wording
The increase in GTMs in the first nine months of 2025 was primarily due to higher volumes of Intermodal, Grain, Potash, Coal, Energy, chemicals and plastics, excluding crude, and Automotive, 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 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.
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 third quarter of 2025 reflected the impact of a 6% increase in workload (GTMs), partially offset by a 2% increase in average train weights, which was primarily due to moving longer and heavier Grain trains as well as moving proportionally higher volumes of Grain and Potash, which are heavier commodities.
Previous wording
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 wording
The increase in train miles in the first nine months of 2025 reflected the impact of a 5% increase in workload (GTMs) partially offset by a 2% increase in average train weights, which was primarily due to an improvement in operating plan efficiency and moving longer and heavier Grain and Potash 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. 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.
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. Fuel efficiency in the third quarter of 2025 and in the first nine months of 2025 remained flat compared to the third quarter of 2024 and the first nine 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 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.
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 third quarter and in the first nine 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 and six months ended June 30, 2025 and the comparative periods in 2024.
Current wording
The following table presents selected financial data related to the Company’s financial results for the three and nine months ended September 30, 2025 and the comparative periods in 2024.
Previous wording
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 wording
The increase in Freight revenues in the third quarter of 2025 was primarily due to higher volumes as measured by RTMs, partially offset by a decrease in freight revenue per RTM. The decrease in Non-freight revenues was primarily due to lower leasing 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 second quarter of 2025 was primarily due to higher volumes of Grain, Intermodal, Potash, and Coal, partially offset by lower volumes of crude.
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 third quarter of 2025 was primarily due to higher volumes of Intermodal, Grain, Potash, Coal, and Automotive.
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 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.
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 third quarter of 2025 was primarily due to the unfavourable impact of lower fuel prices on fuel surcharge revenue of $54 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 and the favourable impact of the change in foreign exchange ("FX") of $23 million.
Previous 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.
Current wording
The increase in Freight revenues in the first nine months of 2025 was primarily due to higher volumes as measured by RTMs. The decrease in Non-freight revenues was primarily due to lower leasing revenues and lower revenue related to a subsurface fibre optic agreement.
Previous wording
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 wording
The increase in RTMs in the first nine months of 2025 was primarily due to higher volumes of Intermodal, Grain, Potash, Coal, Energy, chemicals and plastics, excluding crude, and Automotive, partially offset by lower volumes of crude.
Previous wording
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 wording
Freight revenue per RTM in the first nine months of 2025 remained flat primarily due to higher freight rates and the favourable impact of the change in FX of $135 million, offset by the unfavourable impact of lower fuel prices on fuel surcharge revenue of $187 million, which includes lower carbon levy surcharge revenue due to the elimination of the Canadian federal carbon tax program effective April 1, 2025.
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 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.
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 $358 million in the third quarter of 2025, a decrease of $42 million, or 11%, from $400 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 and the favourable impact of the change in FX.
Previous wording
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 wording
In the first nine months of 2025, fuel surcharge revenues were$1,110 million, a decrease of $144 million, or 11%, from $1,254 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.
Previous wording
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 wording
The increase in Grain revenue in the third quarter of 2025 was primarily due to higher volumes of U.S. grain to Mexico and the U.S. Pacific Northwest, higher volumes of Canadian grain to Thunder Bay, Ontario, higher freight rates, and the favourable impact of the change in FX. This increase was partially offset by lower volumes of Canadian grain to Vancouver, British Columbia ("B.C.") and a decrease in freight revenue per RTM due to lower fuel surcharge revenue.
Previous 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.
Current wording
The increase in Grain revenue in the first nine months of 2025 was primarily due to higher volumes of Canadian grain to Vancouver, higher volumes of U.S. grain to Mexico and the U.S. Pacific Northwest, and an increase in freight revenue per RTM, 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 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 wording
The increase in Coal revenue in the third quarter of 2025 was primarily due to higher volumes of Canadian coal to Kamloops, B.C. and Vancouver and higher freight rates. This increase was partially offset by lower volumes of U.S. coal and lower volumes of Canadian coal to Thunder Bay.
Previous 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.
Current wording
The increase in Coal revenue in the first nine months of 2025 was primarily due to higher volumes of Canadian coal to Kamloops and Vancouver and an increase in freight revenue per RTM, 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 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 wording
The increase in Potash revenue in the third quarter of 2025 was primarily due to higher volumes of export potash to Vancouver and the U.S. Pacific Northwest, higher volumes of domestic potash, and an increase in freight revenue per RTM, partially offset by lower volumes of export potash to Kamloops and Thunder Bay 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 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.
Current wording
The increase in Potash revenue in the first nine 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 Thunder Bay and Kamloops, lower volumes of domestic potash, and a decrease in freight revenue per RTM 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.
Previous wording
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 wording
The increase in Fertilizers and sulphur revenue in the third quarter of 2025 was primarily due to higher volumes of wet and dry fertilizers and sulphur and an increase in freight revenue per RTM, 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 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.
Current wording
The increase in Fertilizers and sulphur revenue in the first nine months of 2025 was primarily due to moving higher volumes of wet fertilizers and sulphur and an increase in freight revenue per RTM, partially offset by lower fuel surcharge revenue and lower volumes of dry fertilizers. Freight revenue per RTM increased due to higher freight rates and the favourable impact of the change in FX.
Previous 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.
Current wording
The decrease in Forest products revenue in the third quarter of 2025 was primarily due to lower volumes of wood pulp and a decrease in freight revenue per RTM, partially offset by higher freight rates and higher volumes of panel products. Freight revenue per RTM decreased due to lower fuel surcharge revenue. Carloads decreased more than RTMs due to moving lower volumes of paperboard from Louisiana to other destinations within the southern U.S., which have shorter lengths of haul.
Previous wording
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 wording
Forest products revenue was flat in the first nine months of 2025 primarily due to higher freight rates, higher volumesof panel products, wood pulp, and paperboard, and the favourable impact of the change in FX, offset by a decrease in freight revenue per RTM and lower volumes of newsprint. Freight revenue per RTM decreased due to lower fuel surcharge revenue. Carloads decreased while RTMs increased due to moving lower volumes of paperboard from Louisiana to Mississippi, which has a shorter length of haul, and moving higher volumes of wood pulp from Alberta to Mexico, which has a longer length of haul.
Previous wording
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 wording
The decrease in Energy, chemicals and plastics revenue in the third quarter of 2025 was primarily due to lower volumes of plastics, fuel oil and diluents primarily from Texas to Mexico, lower volumes of crude, and lower fuel surcharge revenue. This decrease was partially offset by higher volumes of liquefied petroleum gas ("L.P.G.") from western Canada to Mexico and Texas, higher freight rates, and the favourable impact of the change in FX. Carloads decreased more than RTMs due to moving lower volumes of crude within Mississippi and from Alberta to Chicago, Illinois, and lower volumes of fuel oil and diluents from Texas to Mexico, which have shorter lengths of haul.
Previous 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.
Current wording
The increase in Energy, chemicals and plastics revenue in the first nine 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, plastics, and diluents 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 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.
Current wording
The increase in Metals, minerals and consumer products revenue in the third quarter of 2025 was primarily due to higher volumes of frac sand and sand and stone and an increase in freight revenue per RTM. This increase was partially offset by lower volumes of steel and lower fuel surcharge revenue. Freight revenue per RTM increased due to higher freight rates and the favourable impact of the change in FX. RTMs increased while carloads decreased due to moving higher volumes of frac sand to the Bakken shale formation, which has a longer length of haul, and moving lower volumes of steel within Mexico, which has a shorter length of haul.
Previous wording
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 wording
Metals, minerals and consumer products revenue was flat in the first nine months of 2025 primarily due to higher volumes of frac sand and sand and stone, higher freight rates, and the favourable impact of the change in FX, offset by lower volumes of steel and lower fuel surcharge revenue. Carloads decreased while RTMs remained flat due to moving lower volumes of steel within Mexico, which has a shorter length of haul.
Previous wording
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 wording
The increase in Automotive revenue in the third quarter of 2025 was primarily due to higher volumes from Mexico to 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 lower fuel surcharge revenue. RTMs increased while carloads decreased due to moving higher volumes from Mexico to Canada, which has a longer length of haul, and moving lower volumes from Mexico to Laredo, Texas, which has a shorter length of haul.
Previous 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.
Current wording
The increase in Automotive revenue in the first nine months of 2025 was primarily due to higher volumes from Mexico to Canada, the U.S. Midwest, and Texas, from Vancouver to eastern Canada, and higher freight rates, partially offset by a decrease in freight revenue per RTM due to lower fuel surcharge revenue. RTMs increased while carloads decreased due to moving higher volumes from Mexico to Canada and the U.S. Midwest, which have longer lengths of haul, and moving lower volumes from Mexico to Laredo, which has a shorter length of haul.
Previous wording
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 wording
The increase in Intermodal revenue in the third 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, retail, and food 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 and lower international intermodal volumes to and from the Port of Montréal. Freight revenue per RTM decreased 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.
Previous 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.
Current wording
The increase in Intermodal revenue in the first nine 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 and lower international intermodal volumes to and from the Port of Montréal. Freight revenue per RTM decreased due to lower fuel surcharge revenue.
Previous 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.
Current wording
Compensation and benefits expense includes employee wages, salaries, fringe benefits, and stock-based compensation. The decrease in Compensation and benefits expense in the third quarter of 2025 was primarily due to a decrease in stock-based compensation of $48 million, including changes in the Common Share price, and lower incentive compensation. This decrease was partially offset by the impact of wage and benefit inflation and higher volume variable expense as a result of increased workload as measured by GTMs.
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This increase was partially offset by:
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•a decrease in casualty incident costs;
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•the impact of the change in FX of $15 million; and
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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, 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
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•the impact of wage and benefit inflation;
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•increased volume variable expenses as a result of increased workload as measured by GTMs.
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•the impact of cost inflation; and
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During the three months ended June 30, 2025, the Company issued $500 million 4.00% 7-year unsecured notes due June 13, 2032 for net proceeds of approximately $498 million, $600 million 4.40% 10.5-year unsecured notes due January 13, 2036 for net proceeds of approximately $598 million, and $300 million 4.80% 30-year unsecured notes due June 13, 2055 for net proceeds of approximately $296 million.
Previous report — wording carried elsewhere
Net cash used in investing activities decreased $476 million and in the second quarter of 2025, compared to the same period in 2024. The decrease was primarily due to proceeds received from a sale of an equity investment of $493 million, and a decrease in capital additions. This decrease was partially offset by transaction costs paid on the sale of an equity investment.
Previous report — wording carried elsewhere
Non-GAAP financial measures may provide additional insight to investors and other external users of the Company's financial information.
Previous report — wording carried elsewhere
•during the first six months, acquisition-related costs of $54 million in connection with the KCS acquisition ($39 million after current income tax recovery of $15 million), including an expense of $6 million recognized in "Compensation and benefits" primarily related to retention and synergy related incentive compensation costs; $4 million recognized in "Materials"; and $44 million recognized in "Purchased services and other" primarily related to system migration, relocation expenses, legal and consulting fees, that unfavourably impacted Diluted EPS by 4 cents as follows:
Previous report — wording carried elsewhere
There are more specific factors that could cause actual results to differ materially from those described in the forward-looking statements contained in this Management's Discussion and Analysis of Financial Condition and Results of Operations and Quarterly Report on Form 10-Q. These more specific factors are identified and discussed in Item 1A. Risk Factors of the Company's 2024 Annual Report on Form 10-K. Other risks are detailed from time to time in reports filed by the Company with securities regulators in Canada and the U.S., and filed on SEDAR+ (www.sedarplus.ca) and EDGAR (www.sec.gov).