CP Filings — Canadian Pacific Kansas City Ltd/cn - FilingSpy
CP
Canadian Pacific Kansas City Ltd/cn
A freight railway that moves grain, energy, chemicals, and container cargo across one continuous network spanning Canada, the United States, and Mexico. It was born in 2023 when Canadian Pacific merged with Kansas City Southern, creating the only single-line railway connecting the three countries. The original Canadian Pacific Railway was founded in 1881 to build a transcontinental line uniting Canada, and its beaver logo—adopted in 1886—was chosen to symbolize the railway's Canadian identity.
Q2 2026 revenue rose 13% to $4,164M but diluted EPS fell 14% to $1.15 on a prior-year gain.
rose 13% this quarter, the first double-digit increase in a year. Total revenues reached $4,164M on higher fuel surcharges and freight rates, while fell 14% to $1.15 because Q2 2025 included a $333M gain on the sale, and rose 13% to $1.27. The underlying business grew, but the year-ago one-off still defines the reported earnings comparison.
Key takeaways
rose 13% to $4,164M, driven by a $258M increase in , higher freight rates, and a 4% rise in .
fell 14% to $1.15, largely because Q2 2025 included a $333M pre-tax gain on the sale of the investment; rose 13% to $1.27 excluding that gain and other items.
grew 10% to $1,472M, but the worsened 90 to 64.6% as operating expenses rose 14%, led by a 53% increase in fuel costs.
Section summaries
Management's Discussion and Analysis
Q2 2026 revenue rose 13% to $4,164M on higher fuel surcharges and freight rates, but diluted EPS fell 14% to $1.15 due to prior-year gain on sale.
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Total revenues increased 13% to $4,164M, driven by a $258M rise in , higher freight rates, and a 4% increase in revenue ton-miles.
Grain rose 24% on strong Canadian and U.S. grain volumes to Vancouver, Mexico, and the U.S. Midwest, while Coal revenue fell 18% on lower shipments.
Liquidity included $366M cash, an undrawn $2.2B , and $1.46B outstanding; the company issued $1.64B in new notes and repaid $684M of maturing debt.
EPA and DOJ Clean Air Act discussions continued with no final demand issued and any potential civil penalty not expected to be material.
What changed
Q2 2026 ton-mile growth was 4%, continuing the organic volume trend flagged after Q1 2026's lower yield and FX drag; revenue rose 13% versus Q2 2025's 3% and Q1 2026's 2% decline, an inflection from the prior quarter's drop.
Core adjusted was 61.6%, versus 63.0% in Q1 2026 and 60.7% in Q2 2025; the 90 worsening from a year ago reverses the prior-year improvement as fuel costs rose 53%.
Combined adjusted to combined adjusted ratio was again not reported, still absent since FY2022 against the 2.0 to 2.5 target.
EPA and DOJ Clean Air Act discussions remained open with no final demand, consistent with every filing since Q2 2024; penalty still not expected to be material.
Q1 2026 flagged advisory and acquisition costs pressuring the core adjusted ; Q2 shows those persisted as the ratio weakened 90 despite higher .
What to watch
Q3 2026 ton-mile trend to confirm the 4% Q2 growth holds as fuel surcharge and FX effects shift.
Core adjusted trajectory after the 61.6% Q2 figure as fuel costs stay elevated.
Next reported combined adjusted to combined adjusted ratio against the 2.0 to 2.5 target.
Outcome of EPA and DOJ Clean Air Act discussions and any civil penalty assessed for locomotive non-compliance.
grew 10% to $1,472M, but the worsened 90 to 64.6% as operating expenses rose 14%, led by a 53% jump in fuel costs.
declined 14% to $1.15, largely because Q2 2025 included a $333M pre-tax gain on the sale of the investment.
, which excludes that gain and other items, increased 13% to $1.27, while the rose 90 to 61.6%.
Grain surged 24% on strong Canadian and U.S. grain volumes to Vancouver, Mexico, and the U.S. Midwest, while Coal revenue fell 18% on lower Canadian and U.S. coal shipments.
Liquidity remained robust with $366M in cash, an undrawn $2.2B , and $1.46B in outstanding; the company issued $1.64B in new notes and repaid $684M of maturing debt.
Quantitative and Qualitative Disclosures About Market Risk
Interest rate risk is the primary market risk disclosed, with a 1% rate decrease increasing fixed-rate debt fair value by ~$1.9B.
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A hypothetical one percentage point decrease in interest rates would increase the fair value of fixed-rate debt by approximately $1.9 billion as of June 30, 2026.
The impact of a one percentage point change in interest rates on floating-rate debt obligations is not material.
The company may use (e.g., treasury rate locks, bond locks) and to manage interest rate exposure.
Fair values of fixed-rate debt are estimated using quoted market prices and current borrowing rates, excluding other factors.
The Company is in ongoing discussions with the EPA and DOJ over alleged Clean Air Act violations related to locomotives, with no final demand issued and any potential civil penalty not expected to be material.
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The EPA has issued Notices of Violations preliminarily identifying alleged non-compliance with civil CAA provisions for locomotives and locomotive engines.
In December 2022, the DOJ requested a meeting and provided an initial draft ; discussions have been ongoing since January 2023.
Neither the EPA nor the DOJ has issued a final compendium of alleged violations or a final demand for corrective or mitigating actions.
The Company states it is too early to fully evaluate the likely outcome, but any potential civil penalty is not anticipated to be material.
The Company uses a $1 million threshold for disclosing environmental proceedings involving a government authority.
There have been no material changes to the risk factors from the information provided in Item 1A. Risk Factors of the Company's 2025 Annual Report on Form 10-K.
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There have been no material changes to the risk factors from the information provided in Item 1A. Risk Factors of the Company's 2025 Annual Report on Form 10-K.