Trans Mountain grew Q3 2025 revenue to $765.0 million from $666.0 million in Q3 2024, a 15% jump, on higher throughput and tolls, but cost inflation and a step-up in depreciation kept operating profitability from scaling with sales.
Total expenses increased to $452.0 million from $369.0 million, outpacing revenue growth at 22%. Within costs, the biggest YoY dollar driver was depreciation and amortization at $278.0 million, up from $215.0 million. Pipeline operating costs rose to $84.0 million from $79.0 million, salaries and benefits increased to $50.0 million from $43.0 million, taxes other than income taxes climbed to $19.0 million from $16.0 million, and administration increased to $21.0 million from $16.0 million.
Operating income improved modestly to $313.0 million from $297.0 million, with operating margin compressing to about 41% from 45% per expense growth. Below the line, the swing factor was net interest expense, which fell to $145.0 million from $389.0 million, lifting pre-tax income to $168.0 million from a $91.0 million pre-tax loss.
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Income tax expense was $41.0 million versus a $23.0 million tax recovery last year, resulting in net income of $127.0 million versus a $68.0 million net loss in Q3 2024.
On non-GAAP metrics, adjusted EBITDA increased to $591.0 million from $512.0 million, and adjusted funds from operations rose to $421.0 million from $94.0 million.
Operationally, Q3 mainline deliveries averaged a record 777,000 bpd versus 692,000 bpd a year ago, with 87% utilization versus 78%. Year-to-date throughput averaged 746,000 bpd versus 499,000 bpd last year and utilization ran 84% versus 79%.
Of Q3 volumes, 444,000 bpd went to the Westridge Marine Terminal, 101,000 bpd to BC delivery points, and 232,000 bpd to Washington State via Puget Sound Pipeline. Seventy-four vessels were loaded at Westridge in Q3, matching Q2, and since May 1, 2024 the terminal has loaded 380 vessels, with 57% destined for Asia.
TMC also reported $314.0 million paid to TMP Finance in Q3, comprising $151.0 million in interest and $163.0 million in dividends. Year-to-date payments totaled $1.04 billion, and management lifted the full-year total capital return outlook to $1.70 billion. On regulatory items, TMC continues under interim tolls approved November 30, 2023, and the CER process has been paused to allow shipper discussions, while the company is evaluating optimization projects that could increase capacity by up to 360,000 bpd.
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