Canadian Pacific Kansas City : Q1 2026 Earnings Review (CPKC Q1 2026 Presentation v7 Final pictures adj)

Published: 2026-04-30 20:06:06 ET CP.TO

Published on 04/30/2026 at 08:06 pm EDT

Q1 2026

EARNINGS REVIEW

April 29, 2026

BASIS OF PRESENTATION

Except where noted, all amounts are in millions of Canadian dollars.

Financial information is prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), unless otherwise noted.

NON-GAAP MEASURES

CPKC presents Non-GAAP measures, including Core adjusted operating ratio, Core adjusted diluted earnings per share ("EPS"), FX-adjusted revenue and operating expense percent change, Core adjusted operating income, Core adjusted income and Core adjusted effective tax rate, to provide a basis for evaluating underlying earnings trends in CPKC's current periods' financial results that can be compared with the results of operations in prior periods and facilitate a multi-period assessment of longterm profitability.

These Non-GAAP measures have no standardized meaning and are not defined by GAAP and, therefore, may not be comparable to similar measures presented by other companies. The presentation of these Non-GAAP measures is not intended to be considered in isolation from, as a substitute for, or as superior to the financial information presented in accordance with GAAP.

Although CPKC has provided forward-looking Non-GAAP measures (Core adjusted diluted EPS, Core adjusted effective tax rate, Adjusted free cash conversion and Core adjusted return on invested capital ("ROIC")) management is unable to reconcile,

without unreasonable efforts, the forward-looking Core adjusted diluted EPS, Core adjusted effective tax rate, Adjusted free cash conversion and Core adjusted ROIC to the most comparable GAAP measures (Diluted EPS, effective tax rate, net cash

provided by operating activities and Return on average shareholders' equity), due to unknown variables and uncertainty related to future results. These unknown variables and uncertainty may include unpredictable transactions of significant value. In recent years, the Company has recognized acquisition-related costs, KCS purchase accounting, certain adjustments to provisions and settlements of Mexican taxes, changes in income tax rates, a gain on sale of an equity investment, a change to an uncertain tax item and advisory costs related to rail consolidation matters. These or other similar, large unforeseen transactions affect diluted EPS, effective tax rate, net cash flow from operating activities, and return on average shareholders' equity but may be excluded from CPKC's Core adjusted diluted EPS, Core adjusted effective tax rate, Adjusted free cash conversion, and Core adjusted ROIC. Additionally, the Canadian-to-U.S. dollar and Mexican peso-to-U.S. dollar exchange rates are

unpredictable and can have a significant impact on CPKC's reported results but may be excluded from CPKC's Core adjusted diluted EPS, Core adjusted effective tax rate, Adjusted free cash conversion and Core adjusted ROIC.

For further information regarding Non-GAAP measures, including reconciliations to the most directly comparable GAAP measures, see the Non-GAAP Measures supplement to the Q1 2026 Earnings Release on our website at investor.cpkcr.com and on

SEDAR+ at https://www.sedarplus.ca under CPKC's SEDAR+ profile.

KEITH CREEL

PRESIDENT &

CHIEF EXECUTIVE OFFICER

VS. Q1 2025

Strong underlying performance in a dynamic macroenvironment

Sustained momentum with record operating performance, supported by differentiated growth drivers

Confidence in outlook driven by core performance, improving comparisons and continued disciplined execution

Revenue Ton-Miles

For a full description and reconciliation of Non-GAAP Measures, see CPKC's Q1 2026 Earnings Release on investor.cpkcr.com and CPKC's Q1 2026 MD&A available on SEDAR+ at https://www.sedarplus.ca under CPKC's SEDAR+ profile

MARK REDD

CHIEF OPERATING OFFICER

Average train weight

(tons)

Average train length

(feet)

9% Increase

7% Increase

Q1'24

Q1'25

Q1'26

Q1'24

Q1'25

Q1'26

Locomotive productivity

(GTMs(1) / operating horsepower)

Fuel efficiency

(U.S. gallons of locomotive fuel / 1,000 GTMs)

8% Improvement

2% Improvement

Q1'24

Q1'25

Q1'26

Q1'24

Q1'25

Q1'26

158

1.043

163

1.064

1.065

171

8,639

7,324

9,034

7,628

7,858

9,378

Record CPKC Q1 operating performance driven by sustained post-merger improvements

Network productivity and velocity gains translating into stronger service outcomes

New tentative long-term hourly labour agreements in the U.S. support reliable, efficient operations

Continued focus on safety fundamentals

Capital investments strengthening capacity, resilience and operating leverage

Gross Ton-Miles

JOHN BROOKS

CHIEF MARKETING OFFICER

VS. Q1 2025

-2%

$/Carload:

-1%

Grain

Coal Potash

RTMs:

$/RTM:

-4%

Carloads:

-2%

Fertilizers & sulphur Forest products

Energy, chemicals & plastics Metals, minerals & consumer

Automotive Intermodal

-11%

-14%

-2%

-5%

-1%

-6%

-1%

14%

For a full description and reconciliation of Non-GAAP Measures, see CPKC's Q1 2026 Earnings Release on investor.cpkcr.com

International Intermodal growth driven by

strong performance at Port of Vancouver

Continued solid performance in Intermodal

Forest products pressured by tariffs and housing

market softness

▪

ECP impacted by lower refined fuels to Mexico,

lower heavy fuel oil shipments and a plastics plant closure

▪

U.S. Grain growth from record corn crop, higher

exports and higher volumes to Mexico

VS. Q1 2025

BULK

FX-Adj Revenue(1) +6% | RTMs +5%

MERCHANDISE

FX-Adj Revenue(1) -5% | RTMs -3%

INTERMODAL

FX-Adj Revenue(1) -1% | RTMs +3%

Growth in Canadian Grain driven by a record

harvest

Lower Coal from customer mine production

impacts

▪

Automotive growth from new business wins

offset by mix impacts

Domestic Intermodal growth driven by strong

MMX 180/181 volumes, offset by non-core lanes

Robust opportunity pipeline with refrigerated shipments and SMX service connecting Mexico, Texas, Georgia and Florida

MMC growth from synergies and industrial

development, offset by tariff and mix impacts

▪

Expect ECP and Forest products to stabilize as

we move through the year

Expect Potash to be a solid contributor to base

business performance in 2026

Anticipate Grain strength deep into the

current crop year, benefitting from stronger harvests and destination diversity

(1) For a full description and reconciliation of Non-GAAP Measures, see CPKC's Q1 2026 Earnings Release on investor.cpkcr.com

NADEEM VELANI

CHIEF FINANCIAL OFFICER

First Quarter

(in millions, except percentages and per share data)

2026

2025

Change

FX Adjusted

Change(1)

Total revenues

$ 3,701

$ 3,795

(2%)

Total operating expenses

2,443

2,478

(1%)

Operating income as reported

$ 1,258

$ 1,317

(4%)

Core adjusted operating income(1)

1,368

1,425

(4%)

Net income attributable to controlling shareholders as reported

$ 846

$ 910

(7%)

Core adjusted income(1)

929

992

(6%)

Diluted earnings per share as reported

$ 0.94

$ 0.97

(3%)

Core adjusted diluted earnings per share(1)

1.04

1.06

(2%)

Weighted average number of diluted shares outstanding

897.3

934.3

(4%)

Operating ratio as reported

66.0%

65.3%

70 bps

Core adjusted operating ratio(1)

63.0%

62.5%

50 bps

First Quarter

(in millions, except percentages)

2026

2025

Change

FX Adjusted

Change(1)

$2,478

$13

$22

$2,443

$(35)

$(19)

$(20)

Compensation and benefits(2) $ 691 $ 682 1% 2%

Fuel 458 481 (5%) (4%)

Materials(3) 127 124 2% 3%

Equipment rents 95 99 (4%) -%

Depreciation and amortization(4) 512 504 2% 4%

Purchased services and other(5) 560 588 (5%) (3%)

Total operating expenses

2,443 $

2,478

(1%)

For a full description and reconciliation of Non-GAAP Measures, see CPKC's Q1 2026 Earnings Release on investor.cpkcr.com

Compensation and benefits includes acquisition-related costs of $4M in Q1 2026 and $5M in Q1 2025

Materials includes acquisition-related costs of $nil in Q1 2026 and $1M in Q1 2025

Depreciation and amortization includes purchase accounting of $87M in Q1 2026 and $87M in Q1 2025

Purchased services and other includes acquisition-related costs of $5M in Q1 2026 and $14M in Q1 2025, purchase accounting of $1M in Q1 2026 and $1M in Q1 2025 and advisory costs related to rail consolidation matters of $13M in Q1 2026 and $nil in Q1 2025

First Quarter

(in millions, except percentages) 2026 2025 Change

Other expense(1)

$ 20

$ 7

186%

Other components of net periodic benefit recovery

(110)

(107)

Net interest expense(2)

228

216

Income tax expense(3)

275

292

(6%)

Other expense includes purchase accounting of $nil in Q1 2026 and $1M in Q1 2025

Net interest expense includes purchase accounting of $5M in Q1 2026 and $5M in Q1 2025

Income tax expense includes tax recoveries from pre-tax significant items and purchase accounting of $30M in Q1 2026 and $30M in Q1 2025

Net cash used in investing activities

VS. Q1 2025

Additions to Properties

Shareholder returns

$884

$347

69% Increase

$177

$680

$204

6% Reduction

$715

$672

$664

7% Reduction

$711

$524

2025 2026

Effective capital deployment:

Q1 capital expenditures declined 7%, consistent with our 2026 capital outlook of $2.65B, (~15% reduction from 2025)

Balanced, opportunistic shareholder returns:

Executing on our new 5% share repurchase program and announced 17.5% dividend increase

69% YOY increase in shareholder returns

CHRIS DE BRUYN

Vice President Capital Markets, Tax and Treasurer

ASHLEY THORNE

Assistant Vice President Investor Relations

403-319-3591

[email protected] investor.cpkcr.com

vs. 2025 Core adjusted diluted EPS(1) of $4.61

Other components of net periodic benefit recovery will be

$441M in 2026

(1)

Core adjusted effective tax rate of approximately 24.75%

For a full description and reconciliation of Non-GAAP Measures see CPKC's Q1 2026 Earnings Release on investor.cpkcr.com and on SEDAR+ at https://www.sedarplus.ca under CPKC's SEDAR+ profile

High single-digit revenue growth

Double-digit Core adjusted EPS(2) growth

Capital expenditures of $2.6 to $2.8 billion per year

Adjusted free cash(2) conversion of

Core adjusted income(2) of ~90%

Return to double-digit Core adjusted ROIC(3)

Strong margin improvement through

cost control and operating leverage

Key Assumptions

Exchange rate of $1.35 CAD/USD

On-Highway Diesel price of

$4.15 USD/U.S. gallon

Other components of net periodic benefit recovery of

$330 million to $370 million

Annualized 2024 - 2028 Core adjusted effective tax rate of approximately 25.5%(2), excluding significant items

Outlook for Long-Term Growth as provided during CPKC's Investor Day on June 28, 2023. Certain assumptions have changed, including higher expected CAD/USD FX, lower on-highway diesel price, higher Other components of net periodic benefit recovery

and lower expected Core adjusted effective tax rate

For a full description and reconciliation of Non-GAAP Measures, see CPKC's Q4 2024 Unaudited Combined Summary of Supplemental Data on investor.cpkcr.com

Advancing our commitment to sustainable, long-term growth

Sustainability Disclosures and Publications

Published Climate Insights report in March 2026, providing an overview of CPKC's climate governance and strategic approach to climate change, including the processes implemented to identify, assess and manage climate-related risks and opportunities

Published second Climate Mileposts report in March 2026, providing an update on CPKC's progress toward lower

carbon freight rail and stronger network resilience

Low carbon innovation

Continuing biofuel trial in British Columbia; completed more than 1,100 fueling events consuming approximately 10.2 million liters of B20 locomotive fuel in 2025

Continue to make progress on hydrogen locomotive program

Eight units in CPKC fleet testing or revenue service, as of the end of 2025

Launched Hyion Technologies, a joint venture with CSX Transportation to develop low-horsepower locomotives powered by hydrogen and fuel cell battery systems

Investing in our communities - 2025

Raised >$2M and collected >175k pounds of food for foodbanks in 190 communities across our network through the annual Holiday Train Program

Raised >$690k and awareness for veterans facing homelessness in Canada and the U.S. through Spin for a Veteran

VS. Q1 2025

Average train speed

(miles per hour)

Average train length

(feet)

Average train weight

(tons)

4% Improvement

19.1

19.9

3% Improvement

7,628

7,858

4% Improvement

9,034

9,378

Q1'25 Q1'26

Fuel efficiency

(U.S. gallons of locomotive fuel / 1,000 GTMs)

FRA personal injuries(1)

(per 200,000 employee-hours)

FRA train accident frequency

(per million train-miles)

2% Improvement

1.043

1.064

6% Improvement

0.91

0.97

145% Deterioration

0.38

0.93

Q1'25 Q1'26

(1) FRA personal injuries per 200,000 employee-hours for the three months ended March 31, 2025 have been restated to reflect new information available within specified periods stipulated by the FRA but that exceed the Company's financial reporting timeline

Disclaimer

CPKC - Canadian Pacific Kansas City Limited published this content on April 30, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 30, 2026 at 23:44 UTC.