From Earlier: CP Responds to Statements Made by Pershing Square

Canadian Pacific Railway Limited

yesterday 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."