The shelf prospectus supplement, the corresponding base shelf prospectus and any amendment to the documents is accessible through SEDAR+CALGARY, AB, June 11, 2025 /PRNewswire/ - Canadian Pacific Kansas City Limited (TSX: CP) (NYSE: CP) ("CPKC") announces that its wholly- owned subsidiary, Canadian Pacific Railway Company ("CPRC"), is issuing C$500 million of 4.00% Notes due 2032, C$600 million of 4.40% Notes due 2036 and C$300 million of 4.80% Notes due 2055, which will be guaranteed by CPKC (the "Offering" ...

Key Takeaways CP reported Q1 2025 revenues of $3.8B, up 8%, with 4% volume growth and EPS rising 14% to $1.06. CP's operating ratio improved 150 bps to 62.5, highlighting efficiency gains after its KCS merger. Despite a 4.5% rise in expenses, CP raised its dividend by 20%, signaling confidence amid liquidity strain.Canadian Pacific Kansas City (CP) benefits from strong operational efficiencies and shareholder-friendly initiatives. Its customer-centric approach further strengthens its market position. Howe ...

Core Points - Canadian Pacific Kansas City (CPKC) has received an arbitrator's ruling establishing new collective bargaining agreements with the Teamsters Canada Rail Conference (TCRC) for Train and Engine (T&E) and Rail Canada Traffic Controllers (RCTC) divisions [1][2] - The arbitrator's ruling results in new four-year contracts effective from January 1, 2024, to December 31, 2027, which include annual wage increases of 3% [3][4] - The agreements aim to bring labor stability to CPKC operations in Canada, ensuring efficient and dependable rail service [5] Summary by Sections Collective Bargaining Agreements - The new contracts cover approximately 3,200 locomotive engineers, conductors, train, and yard workers, as well as about 80 rail traffic controllers in Canada [2] - The agreements do not require ratification, streamlining the implementation process [3] Labor Stability - These agreements follow the earlier ratification of three new collective agreements for thousands of mechanical, engineering, clerical, and intermodal employees in Canada [4] - The establishment of these multi-year agreements is expected to enhance operational efficiency and service reliability for CPKC [5] Company Overview - CPKC is the first and only single-line transnational railway linking Canada, the United States, and Mexico, with a network of approximately 20,000 route miles [10] - The company employs around 20,000 railroaders and provides extensive freight transportation services and logistics solutions across North America [10]

Core Viewpoint - Canadian Pacific Kansas City (CP) shares have increased by approximately 11.7% over the past month, outperforming the S&P 500, but estimates have trended downward recently, indicating potential challenges ahead [1][2][4]. Company Performance - The most recent earnings report for Canadian Pacific Kansas City showed a positive trend in share price, but the stock has received a downward revision in estimates over the past month [1][2]. - The stock currently holds an average Growth Score of C, a Momentum Score of F, and a Value Score of D, placing it in the bottom 40% for the value investment strategy, resulting in an aggregate VGM Score of F [3]. Outlook - The overall trend of downward estimate revisions suggests a potential decline in performance, with a Zacks Rank of 3 (Hold), indicating expectations for an in-line return in the coming months [4]. Industry Comparison - Canadian Pacific Kansas City is part of the Zacks Transportation - Rail industry, where competitor CSX has seen an 11.8% increase in share price over the same period [5]. - CSX reported revenues of $3.42 billion for the last quarter, reflecting a year-over-year decline of 7%, with EPS dropping from $0.46 to $0.34 [5]. - For the current quarter, CSX is projected to report earnings of $0.41 per share, a decrease of 16.3% compared to the previous year, and holds a Zacks Rank of 4 (Sell) [6].

Company Overview - Canadian Pacific Kansas City (CPKC) is the first and only single-line transnational railway linking Canada, the United States, and Mexico, providing access to major ports from Vancouver to Atlantic Canada to the Gulf Coast to Lázaro Cárdenas, Mexico [2] - CPKC operates approximately 20,000 route miles and employs 20,000 railroaders, offering unparalleled rail service and network reach to key markets across North America [2] - The company is focused on growth alongside its customers, providing a suite of freight transportation services, logistics solutions, and supply chain expertise [2] Upcoming Event - CPKC's Executive Vice-President and Chief Financial Officer Nadeem Velani, along with Executive Vice-President and Chief Operating Officer Mark Redd, will address the 2025 Wells Fargo Industrials & Materials Securities Conference on June 10, 2025, at 8:00 a.m. CT [1] - The event will be accessible via a live audio webcast, with a replay available after the conclusion of the event [1]

Group 1 - The article promotes iREIT on Alpha as a source for in-depth research on various income alternatives including REITs, mREITs, Preferreds, BDCs, MLPs, and ETFs, highlighting its positive testimonials [1] - It mentions a free 2-week trial for potential users, emphasizing the lack of risk in trying the service [1] Group 2 - The analyst has disclosed a beneficial long position in the shares of CP and EXR, indicating personal investment in these companies [2] - The article expresses the author's personal opinions and clarifies that no compensation is received from the companies mentioned, apart from Seeking Alpha [2] Group 3 - Seeking Alpha clarifies that past performance does not guarantee future results and that no specific investment recommendations are provided [3] - The platform emphasizes that the views expressed may not reflect those of Seeking Alpha as a whole, and its analysts include both professional and individual investors [3]

Core Viewpoint - Canadian Pacific Kansas City (CP) reported a slight increase in revenue and earnings per share (EPS) for the quarter ended March 2025, but fell short of revenue expectations according to the Zacks Consensus Estimate [1] Financial Performance - Revenue for the quarter was $2.64 billion, reflecting a 1.2% increase year-over-year [1] - EPS was reported at $0.74, an increase from $0.69 in the same quarter last year [1] - The revenue reported was a surprise of -0.70% compared to the Zacks Consensus Estimate of $2.66 billion [1] - The consensus EPS estimate was also $0.74, indicating no EPS surprise [1] Key Metrics - Adjusted Operating Ratio was 62.5%, slightly better than the average estimate of 62.7% from seven analysts [4] - Total carloads were reported at 1.1 million, compared to the average estimate of 1.11 million from five analysts [4] - Specific carload metrics included: - Energy, Chemicals and Plastics: 142.5 thousand vs. 142.18 thousand estimate [4] - Intermodal: 435.4 thousand vs. 433.98 thousand estimate [4] - Automotive: 57.8 thousand vs. 60.06 thousand estimate [4] - Forest Products: 34.8 thousand vs. 35.07 thousand estimate [4] - Grain: 133.7 thousand vs. 136.74 thousand estimate [4] - Coal: 118.4 thousand vs. 115.11 thousand estimate [4] - Potash: 39.8 thousand vs. 44.61 thousand estimate [4] - Fertilizers and Sulphur: 17.8 thousand vs. 17.2 thousand estimate [4] - Metals, Minerals and Consumer Products: 124.4 thousand vs. 123.9 thousand estimate [4] - Operating Ratio was reported at 65.3%, higher than the average estimate of 62.8% from four analysts [4] Stock Performance - Shares of Canadian Pacific Kansas City have returned +1.5% over the past month, outperforming the Zacks S&P 500 composite, which saw a -0.2% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Group 1: Earnings Performance - Canadian Pacific Kansas City (CP) reported quarterly earnings of $0.74 per share, matching the Zacks Consensus Estimate, and an increase from $0.69 per share a year ago [1] - The company had a surprise of 5.75% in the previous quarter, posting earnings of $0.92 per share against an expected $0.87 [1] - Over the last four quarters, CP has surpassed consensus EPS estimates two times [1] Group 2: Revenue Performance - CP posted revenues of $2.64 billion for the quarter ended March 2025, missing the Zacks Consensus Estimate by 0.70%, but showing an increase from $2.61 billion year-over-year [2] - The company has topped consensus revenue estimates two times over the last four quarters [2] Group 3: Stock Performance and Outlook - CP shares have declined about 0.4% since the beginning of the year, while the S&P 500 has declined by 5.5% [3] - The company's future stock performance will depend on management's commentary during the earnings call and the earnings outlook [4][6] - The current consensus EPS estimate for the coming quarter is $0.84 on revenues of $2.74 billion, and for the current fiscal year, it is $3.44 on revenues of $11.12 billion [7] Group 4: Industry Context - The Transportation - Rail industry, to which CP belongs, is currently in the top 12% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact CP's stock performance [5]

Financial Performance - Total revenues for Q1 2025 were $3,795 million, an increase of 8% from $3,520 million in 2024[77] - Diluted EPS was $0.97, a 17% increase compared to $0.83 in 2024[77] - Core adjusted diluted EPS rose to $1.06, up 14% from $0.93 in 2024[77] - Operating ratio improved to 65.3%, a 210 basis point improvement from 67.4% in 2024[77] - Net income for Q1 2025 was $397 million, compared to $1,496 million for the full year 2024[149] - Operating income for Q1 2025 was $621 million, with total operating expenses of $1,153 million[149] - The effective income tax rate for Q1 2025 was 24.32%, a slight decrease from 25.09% in the same period of 2024[112] Revenue Breakdown - Freight revenues increased by 9% to $3,727 million, driven by higher freight revenue per revenue ton-mile (RTM) and increased volumes[86] - Revenue ton-miles (RTMs) increased by 4% to 53,724 million, reflecting higher volumes of Coal, Grain, Intermodal, Potash, and Automotive[88] - Freight revenues in the Energy, Chemicals and Plastics segment increased to $758 million in Q1 2025, up 8% from $702 million in Q1 2024[97] - In the Metals, Minerals and Consumer Products segment, freight revenues rose to $448 million, a 2% increase from $440 million in the previous year[98] - Automotive segment freight revenues grew significantly by 19% to $315 million, compared to $265 million in Q1 2024[99] - Intermodal freight revenues increased by 6% to $674 million, up from $638 million in the same quarter last year[100] Expenses and Costs - Total operating expenses for Q1 2025 were $2,478 million, reflecting a 5% increase from $2,371 million in Q1 2024[101] - Compensation and benefits expenses decreased by 1% to $682 million, primarily due to a reduction in stock-based compensation[102] - Fuel expenses rose by 5% to $481 million, driven by increased workload and unfavorable FX impacts[103] - Materials expenses surged by 32% to $124 million, attributed to higher locomotive materials costs and increased track maintenance[104] - Net interest expense increased by 5% to $216 million, influenced by short-term borrowings and FX impacts[110] Cash Flow and Financing - As of March 31, 2025, the company had $695 million in cash and cash equivalents, down from $739 million at the end of 2024[126] - The company issued $600 million in 4.80% unsecured notes due March 30, 2030, and $600 million in 5.20% unsecured notes due March 30, 2035, generating net proceeds of approximately $1,189 million[128] - Net cash provided by operating activities increased by $141 million in Q1 2025 compared to Q1 2024, primarily due to higher cash generating income[136] - Net cash used in investing activities increased by $173 million in Q1 2025, attributed to higher capital additions[137] - The company repaid $642 million of its 2.90% 10-year Notes during Q1 2025[127] - As of March 31, 2025, the company had total commercial paper borrowings of $786 million, compared to $1,102 million at the end of 2024[130] Shareholder Actions - The company declared a quarterly dividend of $0.228 per share, a 20% increase from the previous quarter's $0.190[77] - The company announced a normal course issuer bid to purchase up to 37.3 million Common Shares for cancellation before March 2, 2026[77] Acquisitions and Related Costs - Acquisition-related costs for the KCS acquisition amounted to $20 million in Q1 2025, negatively impacting diluted EPS by 2 cents[159] - KCS purchase accounting for Q1 2025 was $92 million, which unfavorably impacted diluted EPS by 7 cents[160] - The company expects to incur acquisition-related costs beyond the year of acquisition due to the complexity of integrating KCS[156] Operational Efficiency - The Core adjusted operating ratio improved to 62.5% in Q1 2025 from 64.0% in Q1 2024, indicating enhanced operational efficiency[166] - The operating ratio as reported for Q1 2025 was 65.3%, down from 67.4% in Q1 2024, showing a positive trend in operational performance[166] Market and Economic Factors - Forward-looking statements indicate expectations for continued integration of KCS and potential impacts from currency fluctuations[170] - As of March 31, 2025, a hypothetical one percentage point decrease in interest rates would increase the fair value of the Company's fixed rate debt by approximately $1.8 billion[179] - The Company may enter into forward rate agreements and swap agreements to manage interest rate exposure, which could incur higher costs depending on the contracted rate[178] - The Company is exposed to increased interest costs on future fixed debt instruments and existing variable rate debt instruments if market rates increase[177] Management Insights - Management believes that excluding significant items from GAAP results provides a clearer view of the company's operational performance[157] - Significant items impacting net income attributable to controlling shareholders included $10 million in adjustments related to Mexican taxes, affecting diluted EPS by 1 cent[163] - The tax effect of adjustments for Q1 2025 was calculated at 26.76%, reflecting the applicable tax jurisdictions and nature of adjustments[164]

Financial Performance - CPKC reported Q1 2025 revenues of $3.8 billion, an increase of 8% from $3.5 billion in Q1 2024[7] - Diluted EPS rose 17% to $0.97 from $0.83 in Q1 2024, while core adjusted diluted EPS increased 14% to $1.06 from $0.93[7] - Operating income for Q1 2025 was $1,317 million, compared to $1,149 million in Q1 2024, reflecting a 9% increase[111] - Net income for the three months ended March 31, 2025, was CAD 909 million, an increase of 17.4% compared to CAD 774 million for the same period in 2024[20] - Total revenues for the three months ended March 31, 2025, were CAD 3,795 million, up 7.8% from CAD 3,520 million in the same period of 2024[28] - Basic earnings per share rose by 18% to $0.98, up from $0.83 in the same quarter last year[78] - Core adjusted diluted EPS for Q1 2025 is projected at $1.06, up from $0.93 in Q1 2024[105] - The company reported total freight revenues of CAD 3,727 million for the three months ended March 31, 2025, an increase of 8.8% from CAD 3,427 million in 2024[28] Operational Efficiency - Operating ratio improved, decreasing by 210 basis points to 65.3% from 67.4% in Q1 2024[7] - Total operating expenses increased by 5% to $2,478 million, compared to $2,371 million in Q1 2024[82] - Total RTMs (Revenue Ton-Miles) increased by 4% to 53,724 million in Q1 2025, up from 51,838 million in Q1 2024[82] - Average train weight increased by 5% to 9,034 tons, compared to 8,639 tons in Q1 2024[84] - Average fuel price decreased by 4% to $3.20 per gallon, down from $3.34 in the previous year[84] Safety and Compliance - The company experienced a decrease in FRA-reportable personal injury frequency to 0.98 from 1.14 in Q1 2024[7] - FRA-reportable train accident frequency decreased to 0.38 from 0.90 in Q1 2024[7] - FRA train accidents per million train-miles improved by 58% to 0.38, down from 0.90 in Q1 2024[84] Future Outlook - CPKC expects 2025 core adjusted diluted EPS to increase between 10% and 14% compared to 2024's core adjusted diluted EPS of $4.25[4] - The company anticipates mid-single digit RTM growth and a Core adjusted effective tax rate of 24.50% for 2025[98] Financial Position - Total assets increased to CAD 88,040 million as of March 31, 2025, compared to CAD 87,744 million as of December 31, 2024[18] - Cash and cash equivalents decreased to CAD 695 million at the end of March 2025, down from CAD 739 million at the end of December 2024[20] - Total liabilities decreased slightly to CAD 38,797 million as of March 31, 2025, from CAD 38,854 million as of December 31, 2024[18] - The carrying value of the company's long-term debt was CAD 21,523 million as of March 31, 2025, with a fair value of CAD 19,853 million[43] - As of March 31, 2025, the long-term debt, including long-term debt maturing within one year, is CAD 22,652 million, a slight decrease from CAD 22,728 million in 2024[115] Shareholder Actions - The company repurchased CAD 347 million worth of common shares during the three months ended March 31, 2025[21] - The company repurchased 3,480,658 common shares at a weighted-average price of CAD 107.68, totaling CAD 375 million during the three months ended March 31, 2025[50] Legal and Environmental Matters - The Company is involved in multiple legal proceedings related to the Lac-Mégantic rail accident, with claims totaling approximately $440 million for damages[61] - The Québec Minister of Sustainable Development has issued a Cleanup Order against the Company, with a Notice of Claim for $95 million pending[62] - Environmental remediation accruals as of March 31, 2025, total $258 million, with payments expected to be made over the next 10 years[75] Acquisition-Related Costs - In Q1 2025, acquisition-related costs of $20 million impacted diluted EPS by 2 cents, primarily due to restructuring and system migration expenses[91] - For 2024, acquisition-related costs totaled $112 million, negatively affecting diluted EPS by 9 cents, with significant costs in the fourth and third quarters[94] - The company continues to incur acquisition-related costs beyond the year of acquisition due to the complexity of integrating KCS[89]