Mr. Keith Creel reports

CP REPORTS RECORD FOURTH-QUARTER AND FULL-YEAR RESULTS; CARRIES MOMENTUM INTO 2020

Canadian Pacific Railway Ltd. has released its fourth quarter results, including record revenues of $2.07-billion, an operating ratio (OR) of 57.0 per cent, improved diluted earnings per share (EPS) of $4.82 and record adjusted diluted EPS of $4.77.

Fourth quarter 2019 highlights:

• Revenues increased 3 per cent to $2.07-billion, from $2.01-billion in Q4 2018.
• OR increased by 50 basis points to 57.0 per cent.
• Diluted EPS improved 26 per cent to $4.82, from $3.83 in Q4 2018. Adjusted diluted EPS rose 5 per cent to $4.77, from $4.55 in Q4 2018.

"CP's strong operational performance and commitment to controlling costs enabled the railway to be successful despite headwinds to our bulk franchise," said Keith Creel, Canadian Pacific Railway president and chief executive officer. "We continue to take a disciplined approach to sustainable, profitable growth -- a plan rooted in the foundations of precision scheduled railroading. This approach in 2019 enabled CP to once again deliver its highest-ever revenues and the lowest-ever yearly operating ratio."

Full-year 2019 highlights:

• Revenues increased 7 per cent to a record $7.79-billion.
• Diluted EPS increased 29 per cent to a record $17.52 from $13.61, while adjusted diluted EPS rose 13 per cent to $16.44, from $14.51.
• OR improved to 59.9 per cent, a 140-basis-point improvement year over year.

"Global economic uncertainty caused by geopolitical and macroeconomic challenges slowed rail volumes across North America," said Mr. Creel. "By leveraging our unique growth opportunities and applying our precision scheduled railroading operating model, CP led the industry in volume growth for the second year in a row and, once again, delivered on its guidance."

Full-year 2020 guidance:

• High-single-digit-to-low-double-digit adjusted diluted EPS growth relative to 2019's adjusted diluted EPS of $16.44;
• Mid-single-digit volume growth, as measured in revenue ton miles (RTMs);
• Capital expenditures of $1.6-billion.

Canadian Pacific Railway's guidance is based on the following key assumptions:

• Effective tax rate of 25 per cent;
• Other components of net periodic benefit recovery will decrease by approximately $40-million versus 2019.

"Our industry-leading CP family remains focused on safely harnessing our network capacity to provide unique solutions that leverage our network strengths and our superior service," said Mr. Creel. "As we head into 2020 and beyond, I'm confident we'll continue to see wins in the marketplace enabling us to continue to outpace the economy and our peers."

Canadian Pacific Railway will discuss its results with the financial community in a conference call beginning at 10 a.m. Eastern Time (8 a.m. Mountain Time) on Jan. 29, 2020.

Conference call access:

Toronto participants dial-in number:  1-647-427-7450

Operator assisted toll-free dial-in number:  1-888-231-8191

Callers should dial in 10 minutes prior to the call.

Webcast

The company encourages you to access the webcast and presentation material in the investors section of Canadian Pacific Railway's website.

A replay of the fourth quarter conference call will be available by phone through to Feb. 12, 2020, at 416-849-0833 or toll-free 1-855-859-2056, password 9683103.

Access to the webcast and audio file of the presentation will be made available at the company's website.

About Canadian Pacific Railway Ltd.

Canadian Pacific is a transcontinental railway in Canada and the United States with direct links to major ports on the West and East Coast. Canadian Pacific Railway provides North American customers a competitive rail service with access to key markets in every corner of the globe. Canadian Pacific Railway is growing with its customers, offering a suite of freight transportation services, logistics solutions and supply chain expertise.

                              INTERIM CONSOLIDATED STATEMENTS OF INCOME
                           (in millions of dollars, except per-share data)

                                                         For the three months              For the year
                                                                ended Dec. 31             ended Dec. 31
                                                            2019         2018         2019         2018
Revenues
Freight                                                   $2,024       $1,964       $7,613       $7,152
Non-freight                                                   45           42          179          164
Total revenues                                             2,069        2,006        7,792        7,316
Operating expenses
Compensation and benefits                                    396          378        1,540        1,468
Fuel                                                         227          247          882          918
Materials                                                     49           46          210          201
Equipment rents                                               35           31          137          130
Depreciation and amortization                                178          180          706          696
Purchased services and other                                 294          250        1,193        1,072
Total operating expenses                                   1,179        1,132        4,668        4,485
Operating income                                             890          874        3,124        2,831
Less
Other (income) expense                                       (31)         118          (89)         174
Other components of net 
periodic benefit recovery (loss)                             (87)         (97)        (381)        (384)
Net interest expense                                         112          114          448          453
Income before income tax expense                             896          739        3,146        2,588
Income tax expense                                           232          194          706          637
Net income                                                   664          545        2,440        1,951
Earnings per share
Basic earnings per share                                    4.84         3.84        17.58        13.65
Diluted earnings per share                                  4.82         3.83        17.52        13.61
Dividends declared per share                              0.8300       0.6500       3.1400       2.5125

We seek Safe Harbor.