"Our talented team of world-class railroaders executed our precision scheduled railroading plan with discipline, driving meaningful improvements in network fluidity, terminal performance and other key operating metrics, while delivering solid first-quarter results," said Keith Creel, CPKC President and Chief Executive Officer. "Despite ongoing market and macroeconomic headwinds, we delivered volume growth demonstrating the resiliency and competitive advantage of our unrivalled North American network."
First-quarter 2026 results
Volumes, as measured in Revenue Ton-Miles, increased two percent
Revenues decreased two percent to $3.7 billion
Reported operating ratio (OR) increased 70 basis points (bps) to 66.0 percent
Core adjusted OR1 increased 50 bps to 63.0 percent from 62.5 percent
Reported diluted EPS decreased three percent to $0.94
Core adjusted diluted EPS1 decreased two percent to $1.04 from $1.06
Reported and core adjusted1 results include year-over-year headwinds of approximately 4 cents from foreign-exchange and 3 cents from changes in fuel price
Federal Railroad Administration (FRA)-reportable personal injury frequency decreased to 0.91 from 0.97 in Q1 20252
FRA-reportable train accident frequency increased to 0.93 from 0.38 in Q1 2025
"As we celebrate our third anniversary as CPKC, I want to recognize the dedication of our railroaders and their strong execution of our operation plan, as we remain focused on controlling what we can control in a dynamic economic environment," said Creel. "CPKC's long-term value proposition is strong, and we are confident in our ability to deliver on our full-year guidance, while continuing to offer unique solutions to our customers, and connecting this continent in ways only CPKC can."
1
These measures have no standardized meanings prescribed by accounting principles generally accepted in the United States of America ("GAAP") and, therefore, may not be comparable to similar measures presented by other companies. For information regarding non-GAAP measures including reconciliations and forward-looking non-GAAP measures, see attached supplementary schedule of Non-GAAP Measures.
2
The first-quarter 2025 FRA-reportable personal injury frequency has been restated to reflect new information available within specified periods stipulated by the FRA but that exceed CPKC's financial reporting timeline.
Conference Call DetailsCPKC will discuss its results with the financial community in a conference call beginning at 4:30 p.m. ET (2:30 p.m. MT) on April 29, 2026.
Conference Call AccessCanada and U.S.: 800-579-2543International: 785-424-1789*Conference ID: CPKCQ126
Callers should dial in 10 minutes prior to the call.
Webcast We encourage you to access the webcast and presentation material in the Investors section of CPKC's website at investor.cpkcr.com.
A replay of the first-quarter conference call will be available through May 6, 2026, at 800-839-5679 (Canada/U.S.) or 402-220-2566 (International).
Forward-looking informationThis news release contains certain forward-looking information and forward-looking statements (collectively, "forward-looking statements") within the meaning of applicable securities laws in both the U.S. and Canada. Forward-looking statements include, but are not limited to, statements concerning expectations, beliefs, plans, goals, objectives, assumptions and statements about possible future events, conditions, and results of operations or performance. Forward-looking statements may contain statements with words or headings such as "financial expectations", "key assumptions", "anticipate", "believe", "expect", "plan", "will", "outlook", "guidance", "should" or similar words suggesting future outcomes. This news release contains forward-looking statements relating, but not limited, to statements concerning our ability to deliver on our financial guidance for 2026, strategic initiatives and investments, the success of our business, the realization of anticipated benefits and synergies of the CP-KCS combination, and the opportunities arising therefrom, our operations, priorities and plans, anticipated financial and operational performance, business prospects and demand for our services and growth opportunities.
The forward-looking statements contained in this news release are based on current expectations, estimates, projections and assumptions, having regard to the Company's experience and its perception of historical trends, and include, but are not limited to, expectations, estimates, projections and assumptions relating to: changes in business strategies, North American and global economic growth and conditions; commodity demand growth; sustainable industrial and agricultural production; commodity prices and interest rates; foreign exchange rates; core adjusted effective tax rates; performance of our assets and equipment; sufficiency of our budgeted capital expenditures in carrying out our business plan; geopolitical conditions, applicable laws, regulations and government policies, including, without limitation, those relating to regulation of rates, tariffs, import/export, trade, taxes, wages, labour and immigration; the availability and cost of labour, services and infrastructure; labour disruptions; the satisfaction by third parties of their obligations to the Company; and carbon markets, evolving sustainability strategies, and scientific or technological developments. Although the Company believes the expectations, estimates, projections and assumptions reflected in the forward-looking statements presented herein are reasonable as of the date hereof, there can be no assurance that they will prove to be correct. Current conditions, economic and otherwise, render assumptions, although reasonable when made, subject to greater uncertainty.
Undue reliance should not be placed on forward-looking statements as actual results may differ materially from those expressed or implied by forward-looking statements. By their nature, forward-looking statements involve numerous inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking statements, including, but not limited to, the following factors: changes in business strategies and strategic opportunities; general Canadian, U.S., Mexican and global social, economic, political, credit and business conditions; risks associated with agricultural production such as weather conditions and insect populations; the availability and price of energy commodities; the effects of competition and pricing pressures, including competition from other rail carriers, trucking companies and maritime shippers in Canada, the U.S. and Mexico; North American and global economic growth and conditions; industry capacity; shifts in market demand; changes in commodity prices and commodity demand; uncertainty surrounding timing and volumes of commodities being shipped by the Company; inflation; geopolitical instability; changes in laws, regulations and government policies, including, without limitation, those relating to regulation of rates, tariffs, import/export, trade, wages, labour and immigration; changes in taxes and tax rates; potential increases in maintenance and operating costs; changes in fuel prices; disruption in fuel supplies; uncertainties of investigations, proceedings or other types of claims and litigation; compliance with environmental regulations; labour disputes; changes in labour costs and labour difficulties; risks and liabilities arising from derailments; transportation of dangerous goods; timing of completion of capital and maintenance projects; sufficiency of budgeted capital expenditures in carrying out business plans; services and infrastructure; the satisfaction by third parties of their obligations; currency and interest rate fluctuations; exchange rates; effects of changes in market conditions and discount rates on the financial position of pension plans and investments; trade restrictions, including the imposition of any tariffs, or other changes to international trade arrangements; the effects of current and future multinational trade agreements on or other developments affecting the level of trade among Canada, the U.S. and Mexico; climate change and the market and regulatory responses to climate change; anticipated in-service dates; success of hedging activities; operational performance and reliability; customer, regulatory and other stakeholder approvals and support; regulatory and legislative decisions and actions; the adverse impact of any termination or revocation by the Mexican government of Kansas City Southern de México, S.A. de C.V.'s concession; public opinion; various events that could disrupt operations, including severe weather, such as droughts, floods, avalanches, volcanism and earthquakes, and cybersecurity attacks, as well as security threats and governmental response to them, and technological changes; acts of terrorism, war or other acts of violence or crime or risk of such activities; insurance coverage limitations; material adverse changes in economic and industry conditions; the outbreak of a pandemic or contagious disease and the resulting effects on economic conditions; the demand environment for logistics requirements and energy prices, restrictions imposed by public health authorities or governments; fiscal and monetary policy responses by governments and financial institutions; disruptions to global supply chains; the realization of anticipated benefits and synergies of the CP-KCS transaction and the timing thereof; the satisfaction of the conditions imposed by the U.S. Surface Transportation Board in its March 15, 2023 decision; the successful integration of KCS into the Company; the focus of management time and attention on the CP-KCS integration and other disruptions arising from the CP-KCS integration; estimated future dividends; financial strength and flexibility; debt and equity market conditions, including the ability to access capital markets on favourable terms or at all; cost of debt and equity capital; improvement in data collection and measuring systems; industry-driven changes to methodologies; and the ability of the management of the Company to execute key priorities, including those in connection with the CP-KCS transaction. The foregoing list of factors is not exhaustive. These and other factors that could cause actual results to differ materially from those described in the forward-looking statements contained in this news release are detailed from time to time in reports filed by the Company with securities regulators in Canada and the United States, which can be accessed on SEDAR+ (www.sedarplus.ca) and EDGAR (www.sec.gov). Reference should be made to "Part I - Item 1A, Risk Factors" and "Part II - Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, Forward-Looking Statements" in the Company's annual report on Form 10-K and "Part II, Item 1A, Risk Factors" and "Part I, Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations, Forward-Looking Statements" in the Company's interim reports on Form 10-Q.
The forward-looking statements contained in this news release are made as of the date hereof. Except as required by law, the Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, or the foregoing assumptions and risks affecting such forward-looking statements, whether as a result of new information, future events or otherwise.
About CPKCWith its global headquarters in Calgary, Alta., Canada, CPKC is the first and only single-line transnational railway linking Canada, the United States and México, with unrivaled access to major ports from Vancouver to Atlantic Canada to the Gulf Coast to Lázaro Cárdenas, México. Stretching approximately 20,000 route miles and employing approximately 20,000 railroaders, CPKC provides North American customers unparalleled rail service and network reach to key markets across the continent. CPKC is growing with its customers, offering a suite of freight transportation services, logistics solutions and supply chain expertise. Visit cpkcr.com to learn more about the rail advantages of CPKC. CP-IR
FINANCIAL STATEMENTS
INTERIM CONSOLIDATED STATEMENTS OF INCOME(unaudited)
For the three months
ended March 31
(in millions of Canadian dollars, except share and per share data)
2026
2025
Revenues (Note 3)
Freight
$ 3,628
$ 3,727
Non-freight
73
68
Total revenues
3,701
3,795
Operating expenses
Compensation and benefits
691
682
Fuel
458
481
Materials
127
124
Equipment rents
95
99
Depreciation and amortization
512
504
Purchased services and other
560
588
Total operating expenses
2,443
2,478
Operating income
1,258
1,317
Other expense
20
7
Other components of net periodic benefit recovery (Note 11)
(110)
(107)
Net interest expense
228
216
Income before income tax expense
1,120
1,201
Current income tax expense
260
266
Deferred income tax expense
15
26
Income tax expense (Note 4)
275
292
Net income
$ 845
$ 909
Net loss attributable to non-controlling interest
(1)
(1)
Net income attributable to controlling shareholders
$ 846
$ 910
Earnings per share (Note 5)
Basic earnings per share
$ 0.94
$ 0.98
Diluted earnings per share
$ 0.94
$ 0.97
Weighted-average number of shares (millions) (Note 5)
Basic
896.8
933.2
Diluted
897.3
934.3
Dividends declared per share
$ 0.228
$ 0.190
See Notes to Interim Consolidated Financial Statements.
INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(unaudited)
For the three monthsended March 31
(in millions of Canadian dollars)
2026
2025
Net income
$ 845
$ 909
Net gain (loss) in foreign currency translation adjustments, net of hedging activities
538
(29)
Change in derivatives designated as cash flow hedges
(1)
1
Change in pension and post-retirement defined benefit plans
1
3
Other comprehensive income from equity investees
1
—
Other comprehensive income (loss) before income taxes
539
(25)
Income tax recovery (expense)
14
(3)
Other comprehensive income (loss)
553
(28)
Comprehensive income
$ 1,398
$ 881
Comprehensive income (loss) attributable to non-controlling interest
15
(2)
Comprehensive income attributable to controlling shareholders
$ 1,383
$ 883
See Notes to Interim Consolidated Financial Statements.
INTERIM CONSOLIDATED BALANCE SHEETS AS AT(unaudited)
March 31
December 31
(in millions of Canadian dollars)
2026
2025
Assets
Current assets
Cash and cash equivalents
$ 409
$ 184
Accounts receivable, net (Note 7)
2,196
2,029
Materials and supplies
534
502
Other current assets
265
224
3,404
2,939
Investments
485
473
Properties
56,126
55,323
Goodwill
18,748
18,436
Intangible assets
2,939
2,911
Pension asset
5,229
5,129
Other assets
753
734
Total assets
$ 87,684
$ 85,945
Liabilities and equity
Current liabilities
Accounts payable and accrued liabilities
$ 2,632
$ 2,751
Long-term debt maturing within one year (Note 8, 9)
2,437
3,240
5,069
5,991
Pension and other benefit liabilities
537
537
Other long-term liabilities
811
815
Long-term debt (Note 8, 9)
21,883
19,948
Deferred income taxes
11,968
11,829
Total liabilities
40,268
39,120
Shareholders' equity
Share capital
24,623
24,751
Additional paid-in capital
118
105
Accumulated other comprehensive income (Note 6)
1,775
1,238
Retained earnings
19,937
19,783
46,453
45,877
Non-controlling interest
963
948
Total equity
47,416
46,825
Total liabilities and equity
$ 87,684
$ 85,945
See Contingencies (Note 13).
See Notes to Interim Consolidated Financial Statements.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS(unaudited)
For the three months
ended March 31
(in millions of Canadian dollars)
2026
2025
Operating activities
Net income
$ 845
$ 909
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization
512
504
Deferred income tax expense
15
26
Pension recovery and funding (Note 11)
(99)
(95)
Settlement of Mexican taxes
—
(11)
Other operating activities, net
(12)
(11)
Changes in non-cash working capital balances related to operations
(285)
(166)
Net cash provided by operating activities
976
1,156
Investing activities
Additions to properties
(664)
(711)
Additions to Meridian Speedway properties
(5)
(12)
Proceeds from sale of properties and other assets
8
11
Other investing activities, net
(11)
(3)
Net cash used in investing activities
(672)
(715)
Financing activities
Dividends paid
(204)
(177)
Issuance of Common Shares
25
8
Purchase of Common Shares (Note 10)
(680)
(347)
Repayment of long-term debt, excluding commercial paper (Note 8)
(345)
(935)
Issuance of long-term debt, excluding commercial paper (Note 8)
1,621
1,710
Net repayment of commercial paper (Note 8)
(494)
(453)
Net repayment of short-term borrowings
—
(285)
Other financing activities, net
(4)
(5)
Net cash used in financing activities
(81)
(484)
Effect of foreign currency fluctuations on foreign-denominated cash and cash equivalents
2
(1)
Cash position
Net increase (decrease) in cash and cash equivalents
225
(44)
Cash and cash equivalents at beginning of period
184
739
Cash and cash equivalents at end of period
$ 409
$ 695
Supplemental cash flow information
Income taxes paid
$ 291
$ 237
Interest paid
$ 203
$ 180
See Notes to Interim Consolidated Financial Statements.
INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY(unaudited)
For the three months ended March 31
(in millions of Canadian dollarsexcept per share data)
CommonShares
(inmillions)
Share
capital
Additional
paid-in
capital
Accumulated
other
comprehensive
income (loss)
Retained
earnings
Total
shareholders'
equity
Non-controlling
interest
Total
equity
Balance as at January 1, 2026
897.6
$ 24,751
$ 105
$ 1,238
$ 19,783
$ 45,877
$ 948
$ 46,825
Net Income (loss)
—
—
—
—
846
846
(1)
845
Other comprehensive income (Note 6)
—
—
—
537
—
537
16
553
Dividends declared ($0.228 per share)
—
—
—
—
(204)
(204)
—
(204)
Effect of stock-based compensation expense
—
—
19
—
—
19
—
19
Common Shares repurchased (Note 10)
(5.4)
(158)
—
—
(488)
(646)
—
(646)
Common Shares issued under stock option plan
0.4
6
(6)
—
—
—
—
—
Cash received upon options exercised
—
24
—
—
—
24
—
24
Balance as at March 31, 2026
892.6
$ 24,623
$ 118
$ 1,775
$ 19,937
$ 46,453
$ 963
$ 47,416
Balance as at January 1, 2025
933.5
$ 25,689
$ 94
$ 2,680
$ 19,429
$ 47,892
$ 998
$ 48,890
Net Income (loss)
—
—
—
—
910
910
(1)
909
Contribution from non-controlling interest
—
—
—
—
—
—
1
1
Other comprehensive loss (Note 6)
—
—
—
(27)
—
(27)
(1)
(28)
Dividends declared ($0.190 per share)
—
—
—
—
(177)
(177)
—
(177)
Effect of stock-based compensation expense
—
—
16
—
—
16
—
16
Common Shares repurchased (Note 10)
(3.3)
(96)
—
—
(279)
(375)
—
(375)
Common Shares issued under stock option plan
0.2
10
(3)
—
—
7
—
7
Balance as at March 31, 2025
930.4
$ 25,603
$ 107
$ 2,653
$ 19,883
$ 48,246
$ 997
$ 49,243
See Notes to Interim Consolidated Financial Statements.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTSMarch 31, 2026 (unaudited)
1 Description of business and basis of presentation
Canadian Pacific Kansas City Limited ("CPKC" or the "Company") owns and operates a transcontinental freight railway spanning Canada, the United States ("U.S."), and Mexico. CPKC provides rail and intermodal transportation services over a network of approximately 20,000 miles, serving principal business centres across Canada, the U.S., and Mexico. The Company transports bulk commodities, merchandise freight, and intermodal traffic. CPKC's Common Shares ("Common Shares") trade on the Toronto Stock Exchange ("TSX") and New York Stock Exchange under the symbol "CP".
These unaudited interim consolidated financial statements ("Interim Consolidated Financial Statements") have been prepared in accordance with accounting principles generally accepted in the U.S. ("GAAP"). They do not include all of the information required for a complete set of annual financial statements prepared in accordance with GAAP and should be read in conjunction with the Company's audited consolidated financial statements as at and for the year ended December 31, 2025 ("last annual consolidated financial statements"). Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Company's financial position and results of operations since the last annual consolidated financial statements. These Interim Consolidated Financial Statements have been prepared using the same significant accounting policies used in the last annual consolidated financial statements, except for the adoption of new accounting standards (see Note 2). Amounts are stated in Canadian dollars unless otherwise noted.
The Company's operations and income for interim periods can be affected by seasonal fluctuations such as changes in customer demand and weather conditions, and may not be indicative of annual results.
Operating segment
The Company only has one operating segment: rail transportation. The Company's measure of segment profit is reported on the Interim Consolidated Statements of Income as "Net income attributable to controlling shareholders". CPKC's significant segment expenses are consistent with the expenses presented on the Interim Consolidated Statements of Income.
2 Accounting changes
Accounting Standards Update ("ASU") 2025-05 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets
On January 1, 2026, the Company prospectively adopted ASU 2025-05, which simplifies estimating credit losses on current accounts receivable and current contract assets. Under the new guidance, CPKC elected to adopt a practical expedient allowing the Company to assume that conditions existing as of the balance sheet date will remain unchanged over the remaining life of the asset when developing reasonable and supportable forecasts for estimating expected credit losses. Adoption of ASU 2025-05 did not have a material impact on the Company's Interim Consolidated Financial Statements.
Other accounting standards that became effective during the three months ended March 31, 2026, did not have a material impact on the Company's Interim Consolidated Financial Statements. Recently issued accounting pronouncements are not expected to have a material impact on the Company's financial position or results of operations upon adoption.
3 Revenues
The following table presents disaggregated information about the Company's revenues from contracts with customers by major source:
For the three monthsended March 31
(in millions of Canadian dollars)
2026
2025
Grain
$ 871
$ 788
Coal
226
257
Potash
149
156
Fertilizers and sulphur
112
114
Forest products
181
217
Energy, chemicals and plastics
700
758
Metals, minerals and consumer products
438
448
Automotive
296
315
Intermodal
655
674
Total freight revenues
3,628
3,727
Non-freight excluding leasing revenues
45
41
Revenues from contracts with customers
3,673
3,768
Leasing revenues
28
27
Total revenues
$ 3,701
$ 3,795
4 Income taxes
The effective income tax rate including discrete items for the three months ended March 31, 2026 was 24.60%, compared to 24.32% for the same period in 2025.
For the three months ended March 31, 2026, the effective income tax rate was 24.75%, excluding the discrete items of amortization of the fair value adjustments associated with purchase accounting of $93 million and acquisition-related costs of $9 million, both related to the Kansas City Southern ("KCS") acquisition, and advisory costs related to the analysis and advocacy in connection with the U.S. Surface Transportation Board's review of the proposed merger between Union Pacific Corporation and Norfolk Southern Corporation of $13 million.
For the three months ended March 31, 2025, the effective income tax rate was 24.50%, excluding the discrete items of amortization of the fair value adjustments associated with purchase accounting of $94 million and acquisition-related costs of $20 million, both related to the KCS acquisition.
2014 Tax Assessment
Canadian Pacific Kansas City Mexico's ("CPKCM") 2014 Tax Assessment is currently in litigation (see Note 13).
5 Earnings per share
For the three monthsended March 31
(in millions, except per share data)
2026
2025
Net income attributable to controlling shareholders
$ 846
$ 910
Weighted-average basic shares outstanding
896.8
933.2
Dilutive effect of stock options
0.5
1.1
Weighted-average diluted shares outstanding
897.3
934.3
Basic earnings per share
$ 0.94
$ 0.98
Diluted earnings per share
$ 0.94
$ 0.97
For the three months ended March 31, 2026, there were 1.3 million stock options excluded from the computation of diluted earnings per share because their effects were not dilutive (three months ended March 31, 2025 - 1.5 million).
6 Changes in Accumulated other comprehensive income ("AOCI") by component
Changes in AOCI attributable to controlling shareholders, net of tax, by component are as follows:
