CPKC(CP) - 2025 Q3 - Quarterly Results

Financial Performance - CPKC reported third-quarter revenues of $3.7 billion, a 3% increase from $3.5 billion in Q3 2024[7] - Diluted earnings per share (EPS) rose to $1.01, up from $0.90 in Q3 2024, while core adjusted diluted EPS increased 11% to $1.10 from $0.99[7] - Net income for the quarter was $917 million, compared to $837 million in Q3 2024[15] - Comprehensive income attributable to controlling shareholders rose to CAD 1,571 million in Q3 2025, compared to CAD 430 million in Q3 2024[16] - For the three months ended September 30, 2025, net income attributable to controlling shareholders was CAD 920 million, compared to CAD 837 million for the same period in 2024, representing a 9.9% increase[36] - Total revenues for the three months ended September 30, 2025, were CAD 3,661 million, an increase from CAD 3,549 million in the same period of 2024, reflecting a growth of 3.2%[27] - For the nine months ended September 30, 2025, net income attributable to controlling shareholders was CAD 3,064 million, compared to CAD 2,517 million for the same period in 2024, indicating a 21.7% increase[36] - Total revenues for the nine months ended September 30, 2025, were CAD 11,155 million, up from CAD 10,672 million in 2024, reflecting a growth of 4.5%[27] Operational Efficiency - The operating ratio (OR) improved by 260 basis points to 63.5% from 66.1% in Q3 2024, while core adjusted OR decreased by 220 basis points to 60.7%[7] - Operating income for Q3 2025 was $1,336 million, reflecting an 11% increase from $1,203 million in Q3 2024[82] - Total operating expenses for Q3 2025 were $2,325 million, a slight decrease of 1% from $2,346 million in Q3 2024[82] - The operating ratio improved to 63.5% in Q3 2025 from 66.1% in Q3 2024, and 64.2% for the nine months ended September 30, 2025, compared to 66.1% in the same period last year[108] Revenue Breakdown - Freight revenues for the three months ended September 30, 2025, reached CAD 3,589 million, up from CAD 3,461 million in 2024, marking a 3.7% increase[27] - Total Freight Revenues for Q3 2025 reached $3,589 million, an increase of $128 million or 4% compared to Q3 2024[84] - Grain Freight Revenues rose to $702 million in Q3 2025, a 5% increase from $668 million in Q3 2024[84] - Intermodal Freight Revenues increased by $44 million or 7% to $668 million in Q3 2025[84] - Freight revenues increased by CAD 523 million, or 5%, from CAD 10,422 million in 2024 to CAD 10,945 million in 2025[114] Cash Flow and Debt - Net cash provided by operating activities for the nine months ended September 30, 2025, was CAD 3,785 million, an increase from CAD 3,565 million in the same period of 2024[19] - The company reported a net cash used in investing activities of CAD 1,903 million for the nine months ended September 30, 2025, compared to CAD 2,084 million in the same period of 2024[19] - Adjusted net debt as of September 30, 2025, was CAD 24,568 million, compared to CAD 22,423 million in 2024[120] - Long-term debt rose to CAD 21,590 million as of September 30, 2025, up from CAD 19,804 million at the end of 2024[17] - The company issued $500 million 4.00% 7-year unsecured notes and $600 million 4.40% 10.5-year unsecured notes, among others, totaling $2.1 billion in new debt issuance during the nine months ended September 30, 2025[41] Safety and Compliance - Federal Railroad Administration (FRA)-reportable personal injury frequency decreased to 0.92 from 0.95 in Q3 2024[7] - FRA-reportable train accident frequency improved to 1.15 from 1.43 in Q3 2024[7] - FRA train accidents per million train-miles decreased by 20% to 1.15 in Q3 2025, indicating improved safety performance[88] Strategic Initiatives - CPKC continues to explore strategic initiatives and investments to enhance operational performance and growth opportunities[10] - The company expects to deliver on its full-year 2025 guidance, focusing on leveraging its North American footprint[3] Shareholder Returns - Dividends paid in Q3 2025 amounted to CAD 205 million, compared to CAD 177 million in Q3 2024[19] - The company declared dividends of CAD 0.228 per share for the three months ended September 30, 2025, totaling CAD 205 million[36] Legal and Regulatory Matters - The company faced a legal claim for $409 million from Québec's Attorney General, which was later amended to $231 million[69] - The total damages related to the Remington Development Corporation legal claim were estimated to be approximately $232 million as of June 30, 2025[71] - The 2014 tax assessment from the Servicio de Administracion Tributaria amounted to Ps.6,471 million ($490 million) as of September 30, 2025[73]