Canadian Pacific CEO Fred Green - Date unknown Matthew Sherwood.

5 April 2012

Pershing Square Proxy Circular Fails to Present a Credible Case for Change and Continues to Make Misleading and Inaccurate Statements About CP

Calgary Alberta - Canadian Pacific Railway Limited today issued the following statement in response to Pershing Square's proxy circular. John E. Cleghorn, Chairman of the Board, said:
 
"Pershing Square continues its pattern of making misleading and inaccurate statements about CP and fails to present any plan or even concrete suggestions to achieve its previously stated target of a 65 percent operating ratio by 2015. Even after over five months, Pershing Square is still unable to articulate any plan that would deliver results comparable to CP's Multi-Year Plan."
 
"The Board believes that Pershing Square's repeated proposal to replace CP's CEO, Fred Green, with Hunter Harrison would delay and damage CP's value-generating plan and would undermine CP's ongoing initiatives to increase volume and improve operations and profitability. A number of CP customers have expressed concerns about the risk and disruption that would occur should Hunter Harrison be installed as CEO of CP. We have received strong customer support for our progress, and we expect further growth as we continue to deliver strong service execution."
 
"The CP Board has extensive experience in railroading and other relevant fields to oversee the implementation of the Multi-Year Plan and is holding management accountable for the results. The Board has reviewed and verified the Company's Multi-Year Plan, which is producing record operating metrics, a leading indicator of financial results. CP's Board and management team are focused on maximizing shareholder value by driving volume growth, expanding network capacity to safely and efficiently support higher volumes, and controlling costs."
 
CP notes the following comments about CP made by the same independent financial analysts quoted by Pershing Square in its proxy circular (1):
 
·  "CP has a well developed plan for OR improvement based on detailed productivity drivers, growth with their key customers, and solid pricing gains." (Thomas Wadewitz of J.P. Morgan, 21 Feb 2012)
 
·  "Recent operating performance has been very strong (carloads are up 7.8 percent QTD, leading growth amongst the Class I rails, and velocity is up 27 percent), which is likely to drive solid financial performance in the near-term." (Christian Wetherbee of Citi, 23 Mar 2012)
 
·  "First quarter 2012 is posting significant gains above [BAML] targets, as volumes are up 7.5 percent quarter-to-date, 280 bps above [BAML's] target, and velocity has averaged 25 mph quarter-to-date, up 27 percent year-over-year." (Ken Hoexter of Bank of America Merrill Lynch, 22 Mar 2012)
 
Use only CP's WHITE universal proxy, which offers shareholders a clear and fair means of choosing the best board to serve CP shareholders, do NOT use Pershing Square's blue proxy. The CP Board recommends that shareholders vote for the CP nominees, including William Ackman of Pershing Square.
 
Shareholders with questions about how to use the WHITE universal proxy should contact MacKenzie Partners, Inc. at 1-800-322-2885 or Georgeson at 1-866-374-9187.
 
(1) Permission to use quotes neither sought nor obtained. The views expressed and numbers cited by independent financial analysts are their own and are not necessarily endorsed by CP.