CPKC Reports Second-Quarter Results

Canadian Pacific Kansas City (TSX: CP) (NYSE: CP) (CPKC) today announced its second-quarter results, including revenues of $3.2 billion, diluted earnings per share (“EPS”) of $1.42 and core adjusted combined diluted EPS¹ of $0.83.

“This quarter we made history by completing our transformational combination to create the first single-line transnational railroad linking Canada, the United States and Mexico,” said Keith Creel, CPKC President and Chief Executive Officer. “By uniting the outstanding railroaders at Canadian Pacific and Kansas City Southern to form our new CPKC family, we already are changing the freight rail industry, redrawing the map and delivering on the many benefits of our combined network.”

Second quarter 2023 results²

• Reported operating ratio (OR) increased by 970 basis points to 70.3 percent from 60.6 percent in Q2 2022
• Core adjusted combined OR¹ increased 430 basis points to 64.6 percent from 60.3 percent in Q2 2022
• Reported diluted EPS increased to $1.42 from $0.82 in Q2 2022 due to the net impact of the derecognition of the investment in Kansas City Southern (KCS) upon consolidation
• Core adjusted combined diluted EPS¹ decreased to $0.83 from $0.95 in Q2 2022
• Federal Railroad Administration-reportable train accident frequency declined 32 percent to 0.76 from 1.11 in Q2 2022

“Despite the challenging results, we still expect to deliver mid-single-digit Core adjusted combined diluted EPS¹ growth in 2023,” Creel added. “The long-term growth opportunities for this franchise are unique and undeniable. With our CPKC advantage, we are extending our reach for our customers, introducing new service offerings to the marketplace and creating new competition in North American supply chains.”

2023 Guidance
CPKC expects core adjusted combined diluted EPS¹ to grow mid-single-digits versus 2022 core adjusted combined diluted EPS¹ of $3.77. CPKC’s reported diluted EPS was also $3.77 in 2022.

1

These measures have no standardized meanings prescribed by accounting principles generally accepted in the United States of America (“GAAP”) and, therefore, may not be comparable to similar measures presented by other companies. For information regarding non-GAAP measures including reconciliations, see attached supplementary schedule of Non-GAAP Measures and Forward-Looking Non-GAAP Measures below.

2

The results of KCS are included on a consolidated basis from April 14, 2023, the date we acquired control. From December 14, 2021 to April 13, 2023, we recorded our interest in KCS under the equity method of accounting.

For the complete press release, click here.

About CPKC

With its global headquarters in Calgary, Alta., Canada, CPKC is the first and only single-line transnational railway linking Canada, the United States and México, with unrivaled access to major ports from Vancouver to Atlantic Canada to the Gulf of México to Lázaro Cárdenas, México. Stretching approximately 20,000 route miles and employing 20,000 railroaders, CPKC provides North American customers unparalleled rail service and network reach to key markets across the continent. CPKC is growing with its customers, offering a suite of freight transportation services, logistics solutions and supply chain expertise. Visit cpkcr.com to learn more about the rail advantages of CPKC. CP-IR

Source: Canadian Pacific Kansas City Limited