CP Responds to Inaccurate and Misleading Statements Made by Pershing Square

CALGARY, April 23, 2012 /PRNewswire/ - Canadian Pacific Railway Limited (TSX: CP) (NYSE: CP) today issued the following statement:

Pershing Square continues to make misleading statements that are not based on the facts.

It is untrue and irresponsible for Pershing Square to accuse CP of manipulating its first quarter earnings.

In particular, Pershing Square is wrong in its comments about incentive compensation accruals.  Accruals increased by $7 million, due in part to a higher share price.  Incentive compensation accruals were higher by $4 million when compared to first quarter 2011.  All accruals have been properly made and recorded in full compliance with US GAAP and have been disclosed in CP's first quarter earnings release and conference call and in the MD&A in CP's quarterly report.  This is consistent with CP's practice of transparent communications with its shareholders.

In addition, on its earnings call on April 20, 2012, CP disclosed land sales in line with historical annual divestitures.  This year CP recovered a $12 million insurance claim related to the significant mainline outage we experienced in 2010 due to flooding.

Pershing Square is wrong in its analysis and criticism of the DM&E transaction.  The accretive acquisition of the DM&E has resulted in the addition of a great strategic asset enabling CP to expand its reach in North America.  The DM&E transaction occurred when the DM&E put itself up for sale, not at a time of CP's choosing.

Dick Kelly, Chairman, Canadian Pacific Board of Directors Audit Committee, said:
"It is outrageous for Mr. Ackman to make the accusations he did today on the Business News Network.  To put the Company's performance in a negative light, Mr. Ackman suggested that management deliberately distorted CP's financial results.  He attacks the competence of our audit committee, which approved our first quarter results."

Shareholders are encouraged to visit www.CPonTrack.com to access the Company's Management Proxy Circular and for more information about CP, the CP management team and its value-generating Multi-Year Plan.

If you have any questions about the information contained in this document or require assistance in completing your WHITE universal proxy, please contact our proxy solicitation agents:

Note on Forward-Looking Information

This news release contains certain forward-looking information within the meaning of applicable securities laws relating, but not limited, to our operations, priorities and plans, anticipated financial performance, business prospects, planned capital expenditures, programs and strategies.  This forward-looking information also includes, but is not limited to, statements concerning expectations, beliefs, plans, goals, objectives, assumptions and statements about possible future events, conditions, and results of operations or performance.  Forward-looking information may contain statements with words such as "anticipate", "believe", "expect", "plan" or similar words suggesting future outcomes.

Undue reliance should not be placed on forward-looking information as actual results may differ materially from the forward-looking information.  Forward-looking information is not a guarantee of future performance.  By its nature, CP's forward-looking information involves numerous assumptions, inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking information, including but not limited to the following factors: changes in business strategies; general North American and global economic, credit and business conditions; risks in agricultural production such as weather conditions and insect populations; the availability and price of energy commodities; the effects of competition and pricing pressures; industry capacity; shifts in market demand; inflation; changes in laws and regulations, including regulation of rates; changes in taxes and tax rates; potential increases in maintenance and operating costs; uncertainties of investigations, proceedings or other types of claims and litigation; labour disputes; risks and liabilities arising from derailments; transportation of dangerous goods; timing of completion of capital and maintenance projects; currency and interest rate fluctuations; effects of changes in market conditions and discount rates on the financial position of pension plans and investments, including long-term floating rate notes; and various events that could disrupt operations, including severe weather, droughts, floods, avalanches and earthquakes as well as security threats and governmental response to them, and technological changes.  The foregoing list of factors is not exhaustive.

These and other factors are detailed from time to time in reports filed by CP with securities regulators in Canada and the United States.  Reference should be made to "Management's Discussion and Analysis" in CP's annual and interim reports, Annual Information Form and Form 40-F.  Readers are cautioned not to place undue reliance on forward-looking information.  Forward-looking information is based on current expectations, estimates and projections and it is possible that predictions, forecasts, projections, and other forms of forward-looking information will not be achieved by CP.  Except as required by law, CP undertakes no obligation to update publicly or otherwise revise any forward-looking information, whether as a result of new information, future events or otherwise.

About Canadian Pacific

Canadian Pacific (TSX:CP)(NYSE:CP) operates a North American transcontinental railway providing freight transportation services, logistics solutions and supply chain expertise. Incorporating best-in-class technology and environmental practices, CP is re-defining itself as a modern 21st century transportation company built on safety, service reliability and operational efficiency. Visit www.CPonTrack.com and see how Canadian Pacific is further driving shareholder value.

SOURCE Canadian Pacific

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