Canadian Pacific Kansas City — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenues increased 15% year-over-year to $4.2 billion for the quarter, compared to $3.7 billion in Q3 2025.
• Diluted earnings per share (EPS) increased 3% to $1.04, up from $1.01 in Q3 2025.
• Core adjusted diluted EPS increased 16% to $1.28, up from $1.10 in Q3 2025.
• Reported operating ratio (OR) increased 130 basis points to 64.8% from 63.5% in Q3 2025.
• Core adjusted operating ratio increased 120 basis points to 61.9% from 60.7% in Q3 2025.
• Higher fuel prices unfavorably impacted reported and core adjusted OR by 170 and 190 basis points, respectively.
• Volumes, measured in revenue ton-miles, increased 6% from Q3 2025.
• Net income for the quarter was $916 million, compared to $917 million in Q3 2025.
• Net cash provided by operating activities was $1.55 billion for the quarter, compared to $1.27 billion in Q3 2025.
• Cash and cash equivalents at period end were $399 million, up from $184 million at December 31, 2025.

Guidance and Future Outlook:

• Management remains on track to deliver strong results for the full year 2026.
• The company expressed confidence in its ability to safely drive growth, create value for customers, and generate long-term returns for shareholders.
• Management cited a robust commercial pipeline and disciplined execution as supporting factors for meeting annual commitments.

Business Segments and Product Lines:

• Grain revenues increased 29% to $904 million for the quarter.
• Intermodal revenues increased 22% to $815 million for the quarter.
• Automotive revenues increased 9% to $373 million for the quarter.
• Energy, chemicals and plastics revenues increased 9% to $763 million for the quarter.
• Metals, minerals and consumer products revenues increased 16% to $532 million for the quarter.
• Coal revenues decreased slightly by 1% to $254 million for the quarter.
• Forest products revenues increased 9% to $211 million for the quarter.
• Potash revenues increased 9% to $182 million for the quarter.
• Fertilizers and sulphur revenues increased 3% to $105 million for the quarter.

Market and Competitive Landscape:

• CPKC operates the first and only single-line transnational railway linking Canada, the United States, and Mexico.
• The network spans approximately 20,000 route miles with access to major ports from Vancouver to Atlantic Canada, the Gulf Coast, and Lázaro Cárdenas, Mexico.
• The company reported momentum across its unrivalled North American network, countering macroeconomic headwinds.
• Growth was delivered across key markets including grain, intermodal, and merchandise.

Risks and Challenges:

• Higher fuel prices significantly impacted operating ratios, increasing costs by 170 basis points on a reported basis.
• Forward-looking statements note risks including changes in economic conditions, commodity demand, fuel prices, and interest rates.
• Operational risks include labor disruptions, derailments, transportation of dangerous goods, and severe weather events.
• Regulatory and legislative risks include changes in laws regarding rates, tariffs, trade, wages, and immigration.
• The company faces potential liabilities related to the Lac-Mégantic rail accident litigation and the 2014 Mexican tax assessment.
• Integration risks associated with the CP-KCS transaction remain a factor, including the focus of management time and attention on integration.

Management Commentary and Tone:

• Keith Creel, President and CEO, described the results as "solid" and noted the railroad is "running very well" with strong service.
• Management emphasized the "undeniable" long-term opportunity and the unique advantages of the North American network.
• The tone was confident, citing a dedicated team of railroaders and a robust commercial pipeline.
• Management highlighted the early stages of the CPKC story and commitment to generating long-term returns.

Other Key Points:

• The company repurchased 11.5 million common shares in the quarter for $1.49 billion, with a weighted-average price of $128.80 per share.
• Dividends declared were $0.268 per share for the quarter.
• CPKC sold its 50% equity investment in the Panama Canal Railway Company to APM Terminals in April 2025, recognizing a pre-tax gain of $333 million in the nine months ended September 30, 2025.
• In the nine months ended September 30, 2026, the company issued $1.2 billion in long-term notes (U.S. $600 million 3-year notes and U.S. $600 million 30-year notes).
• The company amended its revolving credit facility in July 2026, extending maturities to 2028 and 2031; the facility was undrawn as of September 30, 2026.
• The commercial paper program limit was increased to U.S. $2.2 billion (combined Canadian and U.S. dollar) effective March and September 2026.
• A new NCIB was announced in January 2026 to purchase up to 44.9 million common shares.
• The company accrued a liability of $29 million for the 2% tax on net share repurchases in the quarter.
• Subsequent to the quarter, on October 6, 2026, the company issued $1.8 billion in unsecured notes with maturities ranging from 3.5 to 30 years.