2. Forward Looking Statements
The following investor presentation may contain forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 (United States) and relevant Canadian legislation relating but not limited to CP’s
operations, anticipated financial performance, business prospects and strategies. Forward-looking information typically
contains statements with words such as “anticipate”, “believe”, “expect”, “plan” or similar words suggesting future
outcomes.
Readers are cautioned not to place undue reliance on forward-looking information because it is possible that predictions,
forecasts, projections, and other forms of forward-looking information will not be achieved by CP. CP undertakes no
obligation to update publicly or otherwise revise any forward-looking information (other than as required by law),
whether as a result of new information, future events or otherwise.
By its nature, CP’s forward-looking information involves numerous assumptions, inherent risks and uncertainties,
including but not limited to the following factors: changes in business strategies; general global economic and business
conditions; risks in agricultural production such as weather conditions and insect populations; fluctuations in the value
of the Canadian dollar relative to the U.S. dollar; the availability and price of energy commodities; the effects of
competition and pricing pressures; industry capacity; shifts in market demands; changes in laws and regulations
including regulation of rates; changes in taxes and tax rates; potential increases in maintenance and operating costs;
uncertainties of litigation; labour disputes; risks and liabilities arising from derailments; timing of completion of capital
and maintenance projects; interest rate fluctuations; effects of changes in market conditions on the financial position of
pension plans and investments; and various events that could disrupt operations, including severe weather conditions,
security threats and governmental response to them, technological changes, and other risks detailed from time to time
in reports filed by CP with securities regulators in Canada and the United States. Reference is made more specifically to
the “Management’s Discussion and Analysis” in CP’s annual and quarterly reports filed with Canadian and United States
securities regulators.
Except where noted, all figures are in millions of Canadian dollars.
T denotes Target, E denotes Estimate.
Financial statements prepared in accordance with Canadian Generally Accepted Accounting Principles, unless otherwise
noted.
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3. Note on Non-GAAP Earnings Measures
CP presents non-GAAP earnings in this presentation to provide a basis for evaluating underlying earnings trends that
can be compared with the prior period's results.
These non-GAAP earnings exclude foreign currency translation effects on long-term debt, which can be volatile and
short term, and/or other specified items, which are not among CP's normal ongoing revenues and operating expenses.
The impact of volatile short-term rate fluctuations on foreign-denominated debt is only realized when long-term debt
matures or is settled.
A reconciliation of income, excluding foreign exchange (gains) losses on long-term debt and other specified items, to
net income as presented in the financial statements is detailed in the Summary of Rail Data issued with the quarterly
earnings news release.
During the first quarter 2009, there were foreign exchange losses on long-term debt.
It should be noted that CP’s earnings that exclude foreign exchange currency translation effects on long-term debt
and/or other specified items, as described in this presentation, have no standardized meanings and are not defined by
Canadian Generally Accepted Accounting Principles and, therefore, are unlikely to be comparable to similar measures
presented by other companies.
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7. Income statement Q1 2009
Strong cost control gains offset by negative mix
Variance
Favourable / (Unfavourable)
2008 (1)(2)
2009 $ % FX adj. %
Dollars in millions except where noted
Total revenues $ 1,070.7 $ 1,225.2 $ (154.5) (13%) (24%)
Operating expenses 931.3 1,009.3 78.0 8% 18%
Operating income $ 139.4 $ 215.9 $ (76.5) (35%) (50%)
Interest expense and other 79.9 66.0 (13.9) (21%) (2%)
Income tax expense 5.4 33.6 28.2 84% 96%
Adjusted income(3) $ 54.1 $ 116.3 $ (62.2) (53%) (66%)
Adjusted diluted EPS (dollars)(3) $ 0.34 $ 0.75 $ (0.41) (55%)
(1) Pro forma data including the DM&E as if it was consolidated for the full year in 2008.
(2) Certain 2008 figures have been restated for the adoption of CICA accounting standard 3064.
(3) Adjusted amounts exclude foreign exchange (gains) losses on long-term debt and other specified items.
See slide 2 for a note on Non-GAAP earnings measures.
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8. Compensation & benefits Q1 2009
Employee layoffs help offset inflation and foreign exchange
Monthly expense head count 2009 v. 2008 pro forma
(Average) ($ Millions)
Fav/(Unfav)
Volume & efficiency gains 24
16,000
Incentive compensation 10
15,000
Total Return Swap (TRS) (5)
14,000
9
Pension expense
Inflation & other (10)
13,000
Foreign exchange (21)
12,000
Jul
Jun
Aug
Dec
Jan
Mar
Feb
Sep
Apr
Oct
May
Nov
Total 7
2009
2008 (incl. DM&E) April estimate
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9. Fuel Q1 2009
Price per gallon impacted by winter planning and hedges
Average fuel price 2009 v. 2008 pro forma
(1)
(U.S.$ / U.S. gallon) ($ Millions)
Fav/(Unfav)
104
Price
$3.02
49
Consumption
$2.04
$2.02
Hedge (9)
$1.94
$1.86
Winter fuel program (11)
Other (7)
Foreign exchange (53)
Total 73
Q1 2006 Q1 2007 Q1 2008* Q1 2009
Hedge & Winter fuel program
(1) Pro forma data including the DM&E as if it was consolidated for the full year in 2008.
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10. Equipment rents Q1 2009
Quick removal of assets supporting fluidity
Active cars on-line 2009 v. 2008 pro forma
(1)
($ Millions)
Fav/(Unfav)
12
Fleet size adjustments
Car hire receipts (6)
Other 0
Foreign exchange (10)
Total (4)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Week
(1) CP only. Data does not include the DM&E
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11. Other operating expenses Q1 2009
Foreign exchange offsetting strong expense control
2009 v. 2008 pro forma
Fav/(Unfav)
($ Millions)
Materials Depreciation Purchased services
Usage / volumes 3 – 7
Casualty – – 7
Other (net) 5 4 0
Foreign exchange (7) (6) (11)
Total 1 3
(2)
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13. Balance sheet strength 2009
Cash from operations stable with strong cash position
Capital program (1)(2)(3)
Cash from operations flat with
($ Millions)
2008
Equity issue raised $489 million
1,001
893
884
794
Reduced capital program further
720 - 740
Monetized a portion of
our ownership interest in Detroit
River Tunnel Partnership
Will change from consolidated to
equity interest
2005 2006 2007 2008 2009T
Core CP Full year DM&E
(1) See slide 2 for a note on Non-GAAP earnings measures.
(2) Capital program refers to “Additions to properties”.
(3) 2009 capital program based on foreign exchange of C$1.25 / U.S.$.
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14. Dakota, Minnesota & Eastern
Integration plans on track
Business process integration on target
IT system conversions on target for Q4 completion
Safety improvement results exceed targets
FRA personal injury frequency improved by 43%
FRA train accident frequency improved by 7%
Business opportunities progressing
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15. Summary
CP is becoming a more efficient company
Successfully managing short-term variable costs
Focused on removing structural costs through sustained process
improvements
Strategies in place to drive sustainable improvements
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17. Volumes and revenue Q1 2009
Volumes down 19% with steady pricing improvement
Canadian coal carloads down 30%
Automotive carloads down 43%
Potash carloads down 70%
Volume reductions occurred unevenly
Revenue ton miles down 22%
Disciplined price delivers steady result
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18. Market review Grain
Excellent Canadian crops moved well in Q1
Canadian grain revenues up 17%
U.S. grain shipments down
RTMs
2%
Expect remaining volumes to move
well
Carloads
-3%
Fx adj.
-5%
revenues
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19. Market review Coal
Lower volumes impacting results
Lower steel demand slowing met
coal shipments
RTMs Full year volume expected to
-26%
be significantly lower than
2008
Carloads
-6%
U.S. thermal coal moving well
Variance between RTMs and
Fx adj. carloads driven by reductions in
-23%
revenues export shipments and growth in
U.S. shorthaul business
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20. Market review Sulphur & fertilizers
Potash volumes down significantly
Reduced sales lowering demand
RTMs Long-term industry fundamentals
-60%
remain strong
Carloads
-53%
Fx adj.
-55%
revenues
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21. Market review Merchandise
North American economy decline impacting volumes and revenues
Recession continuing to pressure
all Merchandise sectors
RTMs
-22%
U.S. auto sales now expected to be
below 10 million
Carloads
-25%
Positive trends in emerging
markets
Fx adj. Government stimulus packages
-32%
revenues could drive volumes
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22. Market review Intermodal
Weak import / export demand impacting volumes
High retail inventories and
declining consumer demand
RTMs lowering traffic volumes
-20%
Long-haul import / export down
Carloads
-18%
Retail outlook and recovery
unclear
Fx adj.
-19%
revenues
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23. Summary
Capturing new opportunities
Disciplined price
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25. Safety 2009
Committed to being the safest railway in North America
Train incident frequency Personal injury frequency
(1)(2)(3) (1)(2)(3)
28% 20%
2.37
Improvement Decline
1.71
1.65
1.38
Q1 2008 Q1 2009 Q1 2008 Q1 2009
(1) FRA reportable incidents only.
(2) Prior period figures have been updated to reflect new information.
(3) CP only. Does not include DM&E.
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27. Productivity Q1 2009
Variable cost management remains a top priority
Active road locomotives
Locomotives
~350
Stored
Freight cars
~16,000
Stored
10
11
12
13
14
15
1
2
3
4
5
6
7
8
9
Week
Employees
~2,400
Laid off
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28. Fixed cost review
Early action will add to $100 Million E3 expense savings
Evaluating opportunities to consolidate locomotive shops and
yards
Restructuring mechanical operations in Southern Ontario and
Vancouver
Have closed several satellite yard operations
Reducing cycle times in key pipelines
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