Canadian Pacific Q3 net income down 5.3% year-over-year to C$186.8M, total revenues up 4.6% to C$1.3B; company notes that cost of fuel increased 47% to US$3.44/gallon from year-ago period

CALGARY, Alberta , October 28, 2011 (press release) – Canadian Pacific Railway Limited announced its third-quarter 2011 results today with reported net income of $186.8 million and diluted earnings per share of $1.10, inclusive of $0.04 per share of expenses related to the early redemption of its 2013 Notes.

THIRD-QUARTER 2011 RESULTS COMPARED WITH THIRD-QUARTER 2010

Total revenues were $1.3 billion, an increase of $55.4 million

Operating expenses were $1.0 billion, an increase of $68.5 million

Average fuel price increased 47 per cent to $3.44 U.S. dollars per U.S. gallon

Operating income was $324.6 million, a decrease of $13.1 million

Net income was $186.8 million, a decrease of $10.5 million

Diluted earnings per share were $1.10 per share, a decline of $0.07 per share or a decline of $0.03 per share exclusive of the early redemption of the 2013 Notes

"We currently see strength in our bulk franchise, but remain vigilant in monitoring economic signals from Asia," stated Fred Green President and CEO. "We are focused on sustaining and improving service and productivity through investments in locomotives, infrastructure, people and technology."

CANADIAN PACIFIC RAILWAY LIMITED

CONSOLIDATED STATEMENTS OF INCOME (in millions of Canadian dollars, except per share data) (unaudited)

                                                                   For the three months         For the nine months
                                                                   ended September 30           ended September 30
                                                                   2011          2010           2011         2010
        Revenues
                               Freight                             $     1,308.4 $     1,250.8  $    3,676.8 $    3,591.2
                               Other                                     33.2          35.4          92.7         96.0
                                                                         1,341.6       1,286.2       3,769.5      3,687.2
        Operating expenses
                               Compensation and benefits                 336.4         365.2         1,037.0      1,068.7
                               Fuel                                      237.8         166.1         700.9        525.7
                               Materials                                 56.2          43.2          185.2        158.2
                               Equipment rents                           53.1          53.6          158.1        157.5
                               Depreciation and amortization             122.6         123.9         367.1        368.4
                               Purchased services and other              210.9         196.5         656.9        590.3
                                                                         1,017.0       948.5         3,105.2      2,868.8
        Operating income                                                 324.6         337.7         664.3        818.4
        Less:
                               Other (income) and charges (Note 5)       14.1          1.0           8.6          (7.3)
                               Net interest expense                      64.3          60.6          191.0        192.1
        Income before income tax expense                                 246.2         276.1         464.7        633.6
                               Income tax expense (Note 3)               59.4          78.8          116.2        168.7
        Net income                                                 $     186.8   $     197.3    $    348.5   $    464.9
        Earnings per share (Note 4)
                               Basic                               $     1.10    $     1.17     $    2.06    $    2.76
                               Diluted                             $     1.10    $     1.17     $    2.04    $    2.75
        Weighted average number of shares (millions)
                               Basic                                     169.4         168.8         169.4        168.6
                               Diluted                                   170.5         169.3         170.6        169.0
        Dividends declared per share                               $     0.3000  $     0.2700   $    0.8700  $    0.7875
        


About Canadian Pacific Canadian Pacific (cp:TSX) /quotes/zigman/23955/quotes/nls/cp CP +1.75% 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 cpr.ca and see how Canadian Pacific is Driving the Digital Railway.

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