Canadian Pacific Railway Company, a 100%-owned subsidiary of Canadian Pacific Railway Limited (“CPRL”), is the issuer of certain debt securities, which are fully and unconditionally guaranteed by CPRL. The following tables present condensed consolidating financial information (“CCFI”) in accordance with Rule 3-10(c) of Regulation S-X.

Investments in subsidiaries are accounted for under the equity method when presenting the CCFI.

The tables include all adjustments necessary to reconcile the CCFI on a consolidated basis to CPRL’s consolidated financial statements for the periods presented.

Interim Condensed Consolidating Statements of Income

For the three months ended September 30, 2016



(in millions of Canadian dollars)	CPRL (Parent Guarantor)			CPRC (Subsidiary Issuer)		Non-Guarantor Subsidiaries			Consolidating Adjustments and Eliminations			CPRL Consolidated
Revenues
Freight	$	—		$	1,078	$	432		$	—		$	1,510
Non-freight	—			35		95			(86		)	44
Total revenues	—			1,113		527			(86		)	1,554
Operating expenses
Compensation and benefits	—			181		111			2			294
Fuel	—			111		27			—			138
Materials	—			30		6			3			39
Equipment rents	—			48		(5		)	—			43
Depreciation and amortization	—			102		53			—			155
Purchased services and other	—			170		149			(91		)	228
Total operating expenses	—			642		341			(86		)	897
Operating income	—			471		186			—			657
Less:
Other income and charges	12			61		(2		)	—			71
Net interest (income) expense	(9		)	131		(6		)	—			116
(Loss) income before income tax expense and equity in net earnings of subsidiaries	(3		)	279		194			—			470
Less: Income tax expense	9			73		41			—			123
Add: Equity in net earnings of subsidiaries	359			153		—			(512		)	—
Net income	$	347		$	359	$	153		$	(512	)	$	347

Interim Condensed Consolidating Statements of Income

For the three months ended September 30, 2015



(in millions of Canadian dollars)	CPRL (Parent Guarantor)			CPRC (Subsidiary Issuer)		Non-Guarantor Subsidiaries			Consolidating Adjustments and Eliminations			CPRL Consolidated
Revenues
Freight	$	—		$	1,127	$	540		$	—		$	1,667
Non-freight	—			33		91			(82		)	42
Total revenues	—			1,160		631			(82		)	1,709
Operating expenses
Compensation and benefits	—			251		101			—			352
Fuel	—			122		40			—			162
Materials	—			38		9			—			47
Equipment rents	—			44		(2		)	—			42
Depreciation and amortization	—			102		47			—			149
Purchased services and other	—			179		175			(82		)	272
Gain on sale of Delaware & Hudson South	—			—		(68		)	—			(68		)
Total operating expenses	—			736		302			(82		)	956
Operating income	—			424		329			—			753
Less:
Other income and charges	29			162		(23		)	—			168
Net interest (income) expense	(3		)	119		(13		)	—			103
(Loss) income before income tax expense and equity in net earnings of subsidiaries	(26		)	143		365			—			482
Less: Income tax (recovery) expense	(4		)	50		113			—			159
Add: Equity in net earnings of subsidiaries	345			252		—			(597		)	—
Net income	$	323		$	345	$	252		$	(597	)	$	323

Interim Condensed Consolidating Statements of Income

For the nine months ended September 30, 2016



(in millions of Canadian dollars)	CPRL (Parent Guarantor)			CPRC (Subsidiary Issuer)			Non-Guarantor Subsidiaries			Consolidating Adjustments and Eliminations			CPRL Consolidated
Revenues
Freight	$	—		$	3,182		$	1,282		$	—		$	4,464
Non-freight	—			101			289			(259		)	131
Total revenues	—			3,283			1,571			(259		)	4,595
Operating expenses
Compensation and benefits	—			563			339			5			907
Fuel	—			317			77			—			394
Materials	—			95			24			14			133
Equipment rents	—			155			(23		)	—			132
Depreciation and amortization	—			316			162			—			478
Purchased services and other	—			499			469			(278		)	690
Total operating expenses	—			1,945			1,048			(259		)	2,734
Operating income	—			1,338			523			—			1,861
Less:
Other income and charges	(61		)	(89		)	31			—			(119		)
Net interest expense (income)	—			373			(18		)	—			355
Income before income tax expense and equity in net earnings of subsidiaries	61			1,054			510			—			1,625
Less: Income tax expense	12			254			144			—			410
Add: Equity in net earnings of subsidiaries	1,166			366			—			(1,532		)	—
Net income	$	1,215		$	1,166		$	366		$	(1,532	)	$	1,215

Interim Condensed Consolidating Statements of Income

For the nine months ended September 30, 2015



(in millions of Canadian dollars)	CPRL (Parent Guarantor)			CPRC (Subsidiary Issuer)		Non-Guarantor Subsidiaries			Consolidating Adjustments and Eliminations			CPRL Consolidated
Revenues
Freight	$	—		$	3,377	$	1,530		$	—		$	4,907
Non-freight	—			96		270			(248		)	118
Total revenues	—			3,473		1,800			(248		)	5,025
Operating expenses
Compensation and benefits	—			711		327			—			1,038
Fuel	—			417		125			—			542
Materials	—			116		28			—			144
Equipment rents	—			132		(2		)	—			130
Depreciation and amortization	—			306		134			—			440
Purchased services and other	—			513		523			(248		)	788
Gain on sale of Delaware & Hudson South	—			—		(68		)	—			(68		)
Total operating expenses	—			2,195		1,067			(248		)	3,014
Operating income	—			1,278		733			—			2,011
Less:
Other income and charges	44			240		(48		)	—			236
Net interest (income) expense	(3		)	313		(38		)	—			272
(Loss) income before income tax expense and equity in net earnings of subsidiaries	(41		)	725		819			—			1,503
Less: Income tax (recovery) expense	(6		)	210		266			—			470
Add: Equity in net earnings of subsidiaries	1,068			553		—			(1,621		)	—
Net income	$	1,033		$	1,068	$	553		$	(1,621	)	$	1,033

Interim Condensed Consolidating Statements of Comprehensive Income

For the three months ended September 30, 2016



(in millions of Canadian dollars)	CPRL (Parent Guarantor)		CPRC (Subsidiary Issuer)			Non-Guarantor Subsidiaries		Consolidating Adjustments and Eliminations			CPRL Consolidated
Net income	$	347	$	359		$	153	$	(512	)	$	347
Net (loss) gain in foreign currency translation adjustments, net of hedging activities	—		(70		)	63		—			(7		)
Change in derivatives designated as cash flow hedges	—		1			—		—			1
Change in pension and post-retirement defined benefit plans	—		45			2		—			47
Other comprehensive (loss) income before income taxes	—		(24		)	65		—			41
Income tax expense on above items	—		(3		)	—		—			(3		)
Equity accounted investments	38		65			—		(103		)	—
Other comprehensive income	38		38			65		(103		)	38
Comprehensive income	$	385	$	397		$	218	$	(615	)	$	385

Interim Condensed Consolidating Statements of Comprehensive Income

For the three months ended September 30, 2015



(in millions of Canadian dollars)	CPRL (Parent Guarantor)		CPRC (Subsidiary Issuer)			Non-Guarantor Subsidiaries		Consolidating Adjustments and Eliminations			CPRL Consolidated
Net income	$	323	$	345		$	252	$	(597	)	$	323
Net (loss) gain in foreign currency translation adjustments, net of hedging activities	—		(291		)	258		—			(33		)
Change in derivatives designated as cash flow hedges	—		(45		)	—		—			(45		)
Change in pension and post-retirement defined benefit plans	—		64			1		—			65
Other comprehensive (loss) income before income taxes	—		(272		)	259		—			(13		)
Income tax recovery on above items	—		33			—		—			33
Equity accounted investments	20		259			—		(279		)	—
Other comprehensive income	20		20			259		(279		)	20
Comprehensive income	$	343	$	365		$	511	$	(876	)	$	343

Interim Condensed Consolidating Statements of Comprehensive Income

For the nine months ended September 30, 2016



(in millions of Canadian dollars)	CPRL (Parent Guarantor)		CPRC (Subsidiary Issuer)			Non-Guarantor Subsidiaries			Consolidating Adjustments and Eliminations			CPRL Consolidated
Net income	$	1,215	$	1,166		$	366		$	(1,532	)	$	1,215
Net gain (loss) in foreign currency translation adjustments, net of hedging activities	—		260			(227		)	—			33
Change in derivatives designated as cash flow hedges	—		(75		)	—			—			(75		)
Change in pension and post-retirement defined benefit plans	—		131			6			—			137
Other comprehensive income (loss) before income taxes	—		316			(221		)	—			95
Income tax expense on above items	—		(49		)	(2		)	—			(51		)
Equity accounted investments	44		(223		)	—			179			—
Other comprehensive income (loss)	44		44			(223		)	179			44
Comprehensive income	$	1,259	$	1,210		$	143		$	(1,353	)	$	1,259

Interim Condensed Consolidating Statements of Comprehensive Income

For the nine months ended September 30, 2015



(in millions of Canadian dollars)	CPRL (Parent Guarantor)		CPRC (Subsidiary Issuer)			Non-Guarantor Subsidiaries			Consolidating Adjustments and Eliminations			CPRL Consolidated
Net income	$	1,033	$	1,068		$	553		$	(1,621	)	$	1,033
Net (loss) gain in foreign currency translation adjustments, net of hedging activities	—		(589		)	526			—			(63		)
Change in derivatives designated as cash flow hedges	—		(78		)	—			—			(78		)
Change in pension and post-retirement defined benefit plans	—		198			5			—			203
Other comprehensive (loss) income before income taxes	—		(469		)	531			—			62
Income tax recovery (expense) on above items	—		46			(2		)	—			44
Equity accounted investments	106		529			—			(635		)	—
Other comprehensive income	106		106			529			(635		)	106
Comprehensive income	$	1,139	$	1,174		$	1,082		$	(2,256	)	$	1,139

Interim Condensed Consolidating Balance Sheets

As at September 30, 2016



(in millions of Canadian dollars)	CPRL (Parent Guarantor)			CPRC (Subsidiary Issuer)			Non-Guarantor Subsidiaries		Consolidating Adjustments and Eliminations			CPRL Consolidated
Assets
Current assets
Cash and cash equivalents	$	—		$	24		$	79	$	—		$	103
Accounts receivable, net	—			435			170		—			605
Accounts receivable, inter-company	88			106			163		(357		)	—
Short-term advances to affiliates	500			798			3,892		(5,190		)	—
Materials and supplies	—			160			32		—			192
Other current assets	—			42			22		—			64
	588			1,565			4,358		(5,547		)	964
Long-term advances to affiliates	—			—			91		(91		)	—
Investments	—			28			141		—			169
Investments in subsidiaries	8,547			9,973			—		(18,520		)	—
Properties	—			8,695			7,687		—			16,382
Goodwill and intangible assets	—			—			198		—			198
Pension asset	—			1,638			—		—			1,638
Other assets	1			51			18		—			70
Deferred income taxes	5			—			—		(5		)	—
Total assets	$	9,141		$	21,950		$	12,493	$	(24,163	)	$	19,421
Liabilities and shareholders’ equity
Current liabilities
Accounts payable and accrued liabilities	$	84		$	880		$	282	$	—		$	1,246
Accounts payable, inter-company	14			247			96		(357		)	—
Short-term advances from affiliates	4,373			808			9		(5,190		)	—
Long-term debt maturing within one year	—			391			—		—			391
	4,471			2,326			387		(5,547		)	1,637
Pension and other benefit liabilities	—			680			76		—			756
Long-term advances from affiliates	—			91			—		(91		)	—
Other long-term liabilities	—			149			131		—			280
Long-term debt	—			8,434			54		—			8,488
Deferred income taxes	1			1,723			1,872		(5		)	3,591
Total liabilities	4,472			13,403			2,520		(5,643		)	14,752
Shareholders’ equity
Share capital	2,000			1,037			5,854		(6,891		)	2,000
Additional paid-in capital	43			1,634			419		(2,053		)	43
Accumulated other comprehensive (loss) income	(1,433		)	(1,433		)	612		821			(1,433		)
Retained earnings	4,059			7,309			3,088		(10,397		)	4,059
	4,669			8,547			9,973		(18,520		)	4,669
Total liabilities and shareholders’ equity	$	9,141		$	21,950		$	12,493	$	(24,163	)	$	19,421

Condensed Consolidating Balance Sheets

As at December 31, 2015



(in millions of Canadian dollars)	CPRL (Parent Guarantor)			CPRC (Subsidiary Issuer)			Non-Guarantor Subsidiaries		Consolidating Adjustments and Eliminations			CPRL Consolidated
Assets
Current assets
Cash and cash equivalents	$	—		$	502		$	148	$	—		$	650
Accounts receivable, net	—			452			193		—			645
Accounts receivable, inter-company	59			105			265		(429		)	—
Short-term advances to affiliates	—			75			3,483		(3,558		)	—
Materials and supplies	—			154			34		—			188
Other current assets	—			37			17		—			54
	59			1,325			4,140		(3,987		)	1,537
Long-term advances to affiliates	501			207			376		(1,084		)	—
Investments	—			22			130		—			152
Investments in subsidiaries	7,518			9,832			—		(17,350		)	—
Properties	—			8,481			7,792		—			16,273
Goodwill and intangible assets	—			3			208		—			211
Pension asset	—			1,401			—		—			1,401
Other assets	—			55			8		—			63
Deferred income taxes	25			—			—		(25		)	—
Total assets	$	8,103		$	21,326		$	12,654	$	(22,446	)	$	19,637
Liabilities and shareholders’ equity
Current liabilities
Accounts payable and accrued liabilities	$	54		$	1,122		$	241	$	—		$	1,417
Accounts payable, inter-company	—			325			104		(429		)	—
Short-term advances from affiliates	3,253			230			75		(3,558		)	—
Long-term debt maturing within one year	—			24			6		—			30
	3,307			1,701			426		(3,987		)	1,447
Pension and other benefit liabilities	—			676			82		—			758
Long-term advances from affiliates	—			877			207		(1,084		)	—
Other long-term liabilities	—			186			132		—			318
Long-term debt	—			8,863			64		—			8,927
Deferred income taxes	—			1,505			1,911		(25		)	3,391
Total liabilities	3,307			13,808			2,822		(5,096		)	14,841
Shareholders’ equity
Share capital	2,058			1,037			5,465		(6,502		)	2,058
Additional paid-in capital	43			1,568			613		(2,181		)	43
Accumulated other comprehensive (loss) income	(1,477		)	(1,477		)	840		637			(1,477		)
Retained earnings	4,172			6,390			2,914		(9,304		)	4,172
	4,796			7,518			9,832		(17,350		)	4,796
Total liabilities and shareholders’ equity	$	8,103		$	21,326		$	12,654	$	(22,446	)	$	19,637

Interim Condensed Consolidating Statements of Cash Flows

For the three months ended September 30, 2016



(in millions of Canadian dollars)	CPRL (Parent Guarantor)			CPRC (Subsidiary Issuer)			Non-Guarantor Subsidiaries			Consolidating Adjustments and Eliminations			CPRL Consolidated
Cash provided by operating activities	$	84		$	406		$	229		$	(128	)	$	591
Investing activities
Additions to properties	—			(238		)	(56		)	—			(294		)
Proceeds from sale of properties and other assets	—			6			10			—			16
Advances to affiliates	—			(275		)	(123		)	398			—
Repayment of advances to affiliates	—			14			—			(14		)	—
Capital contributions to affiliates	—			(46		)	—			46			—
Cash used in investing activities	—			(539		)	(169		)	430			(278		)
Financing activities
Dividends paid	(75		)	(75		)	(53		)	128			(75		)
Issuance of share capital	—			—			46			(46		)	—
Issuance of CP Common Shares	5			—			—			—			5
Purchase of CP Common Shares	(412		)	—			—			—			(412		)
Repayment of long-term debt, excluding commercial paper	—			(5		)	(7		)	—			(12		)
Net issuance of commercial paper	—			190			—			—			190
Advances from affiliates	398			—			—			(398		)	—
Repayment of advances from affiliates	—			—			(14		)	14			—
Cash (used in) provided by financing activities	(84		)	110			(28		)	(302		)	(304		)
Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents	—			—			2			—			2
Cash position
(Decrease) increase in cash and cash equivalents	—			(23		)	34			—			11
Cash and cash equivalents at beginning of period	—			47			45			—			92
Cash and cash equivalents at end of period	$	—		$	24		$	79		$	—		$	103

Interim Condensed Consolidating Statements of Cash Flows

For the three months ended September 30, 2015



(in millions of Canadian dollars)	CPRL (Parent Guarantor)			CPRC (Subsidiary Issuer)			Non-Guarantor Subsidiaries			Consolidating Adjustments and Eliminations			CPRL Consolidated
Cash provided by operating activities	$	60		$	482		$	257		$	(103	)	$	696
Investing activities
Additions to properties	—			(268		)	(181		)	—			(449		)
Proceeds from the sale of Delaware & Hudson South	—			—			281			—			281
Proceeds from sale of properties and other assets	—			12			1			—			13
Advances to affiliates	—			(1,174		)	(646		)	1,820			—
Repayment of advances to affiliates	—			33			—			(33		)	—
Capital contributions to affiliates	—			(329		)	—			329			—
Other	—			(7		)	(1		)	—			(8		)
Cash used in investing activities	—			(1,733		)	(546		)	2,116			(163		)
Financing activities
Dividends paid	(57		)	(57		)	(46		)	103			(57		)
Issuance of share capital	—			—			329			(329		)	—
Issuance of CP Common Shares	5			—			—			—			5
Purchase of CP Common Shares	(1,523		)	—			—			—			(1,523		)
Issuance of long-term debt, excluding commercial paper	—			2,601			—			—			2,601
Repayment of long-term debt, excluding commercial paper	—			(423		)	(9		)	—			(432		)
Net repayment of commercial paper	—			(669		)	—			—			(669		)
Advances from affiliates	1,515			—			305			(1,820		)	—
Repayment of advances from affiliates	—			—			(33		)	33			—
Cash (used in) provided by financing activities	(60		)	1,452			546			(2,013		)	(75		)
Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents	—			14			4			—			18
Cash position
Increase in cash and cash equivalents	—			215			261			—			476
Cash and cash equivalents at beginning of period	—			139			46			—			185
Cash and cash equivalents at end of period	$	—		$	354		$	307		$	—		$	661

Interim Condensed Consolidating Statements of Cash Flows

For the nine months ended September 30, 2016



(in millions of Canadian dollars)	CPRL (Parent Guarantor)			CPRC (Subsidiary Issuer)			Non-Guarantor Subsidiaries			Consolidating Adjustments and Eliminations			CPRL Consolidated
Cash provided by operating activities	$	182		$	831		$	646		$	(338	)	$	1,321
Investing activities
Additions to properties	—			(576		)	(326		)	—			(902		)
Proceeds from sale of properties and other assets	—			74			13			—			87
Advances to affiliates	—			(792		)	(408		)	1,200			—
Repayment of advances to affiliates	—			222			—			(222		)	—
Capital contributions to affiliates	—			(403		)	—			403			—
Repurchase of share capital from affiliates	—			6			—			(6		)	—
Other	—			—			(2		)	—			(2		)
Cash used in investing activities	—			(1,469		)	(723		)	1,375			(817		)
Financing activities
Dividends paid	(182		)	(182		)	(156		)	338			(182		)
Return of share capital to affiliates	—			—			(6		)	6			—
Issuance of share capital	—			—			403			(403		)	—
Issuance of CP Common Shares	14			—			—			—			14
Purchase of CP Common Shares	(1,200		)	—			—			—			(1,200		)
Repayment of long-term debt, excluding commercial paper	—			(16		)	(14		)	—			(30		)
Net issuance of commercial paper	—			366			—			—			366
Advances from affiliates	1,186			—			14			(1,200		)	—
Repayment of advances from affiliates	—			—			(222		)	222			—
Other financing activities	—			(3		)	—			—			(3		)
Cash (used in) provided by financing activities	(182		)	165			19			(1,037		)	(1,035		)
Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents	—			(5		)	(11		)	—			(16		)
Cash position
Decrease in cash and cash equivalents	—			(478		)	(69		)	—			(547		)
Cash and cash equivalents at beginning of period	—			502			148			—			650
Cash and cash equivalents at end of period	$	—		$	24		$	79		$	—		$	103

Interim Condensed Consolidating Statements of Cash Flows

For the nine months ended September 30, 2015



(in millions of Canadian dollars)	CPRL (Parent Guarantor)			CPRC (Subsidiary Issuer)			Non-Guarantor Subsidiaries			Consolidating Adjustments and Eliminations			CPRL Consolidated
Cash provided by operating activities	$	175		$	1,306		$	673		$	(318	)	$	1,836
Investing activities
Additions to properties	—			(571		)	(496		)	—			(1,067		)
Proceeds from the sale of Delaware & Hudson South	—			—			281			—			281
Proceeds from sale of properties and other assets	—			71			2			—			73
Advances to affiliates	(500		)	(2,110		)	(1,375		)	3,985			—
Repayment of advances to affiliates	—			33			—			(33		)	—
Capital contributions to affiliates	—			(946		)	—			946			—
Other	—			7			(2		)	—			5
Cash used in investing activities	(500		)	(3,516		)	(1,590		)	4,898			(708		)
Financing activities
Dividends paid	(172		)	(172		)	(146		)	318			(172		)
Issuance of share capital	—			—			946			(946		)	—
Issuance of CP Common Shares	32			—			—			—			32
Purchase of CP Common Shares	(2,595		)	—			—			—			(2,595		)
Issuance of long-term debt, excluding commercial paper	—			3,411			—			—			3,411
Repayment of long-term debt, excluding commercial paper	—			(447		)	(52		)	—			(499		)
Net repayment of commercial paper	—			(893		)	—			—			(893		)
Advances from affiliates	3,060			500			425			(3,985		)	—
Repayment of advances from affiliates	—			—			(33		)	33			—
Cash provided by (used in) financing activities	325			2,399			1,140			(4,580		)	(716		)
Effect of foreign currency fluctuations on U.S. dollar-denominated cash and cash equivalents	—			13			10			—			23
Cash position
Increase in cash and cash equivalents	—			202			233			—			435
Cash and cash equivalents at beginning of period	—			152			74			—			226
Cash and cash equivalents at end of period	$	—		$	354		$	307		$	—		$	661