Canadian Pacific Railway Limited (TSX: CP) (NYSE: CP) today announced its Board of Directors will seek shareholder and regulatory approval for the implementation of a five-for-one share split of CP's issued and outstanding common shares. The share split is subject to the approval of shareholders at the Annual and Special Meeting of Shareholders scheduled to be held on April 21, 2021 and to the requirements of the Toronto Stock Exchange ("TSX") and New York Stock Exchange ("NYSE").

"CP's share price has increased in value by 150 percent in the past five years," said Keith Creel, CP President and Chief Executive Officer. "We believe that the share split will encourage greater liquidity for CP's common shares and provide opportunities for ownership by a wider group of investors than is currently available."

If approved by shareholders and stock exchanges and implemented by the Board of Directors, shareholders will be entitled to four additional common shares for each common share held at a date to be approved by the Board of Directors following shareholder approval.

The April 26, 2021 dividend payment announced on January 26, 2021 will not be affected by the proposed five-for-one share split. If the share split receives shareholder and regulatory approval and is implemented by the Board of Directors, all subsequent dividends approved by CP's Board of Directors are expected to reflect the five-for-one share split.

CP also today announced that the TSX has accepted its notice to implement a normal course issuer bid ("NCIB") to purchase, for cancellation, up to 3,331,921 common shares or approximately 2.5 percent of CP's common shares issued and outstanding as at January 15, 2021. The NCIB is scheduled to commence on January 29, 2021 and is due to terminate on January 28, 2022.

"CP's ability to generate strong free cash flow and the pipeline of opportunities in front of us give us the confidence to launch this new share buyback program," said Creel. "We remain committed to returning cash to shareholders in a disciplined, opportunistic manner."

Purchases of CP common shares under the NCIB may be made through the facilities of the TSX, the NYSE and alternative trading systems by means of open market transactions or by such other means as may be permitted by the TSX and under applicable securities laws, including private agreements or share repurchase programs pursuant to issuer bid exemption orders issued by applicable securities regulatory authorities. The price CP will pay for any common shares will be the market price at the time of purchase or such other price as may be permitted by the TSX. Any purchase made under an exemption order issued by a securities regulatory authority will generally be at a discount to the prevailing market price.

In connection with the NCIB, CP will enter into an automatic purchase plan ("Plan") with its designated broker to allow for purchases of its common shares during internal quarterly blackout periods. Such purchases would be at the discretion of the broker based on parameters established by CP prior to any blackout period. Outside of these periods, common shares will be purchased in accordance with management's discretion, subject to applicable law. The Plan has been reviewed by the TSX and may be terminated by CP or its broker in accordance with its terms, or will terminate on the expiry of the NCIB.

As of January 15, 2021, CP had 133,276,879 common shares issued and outstanding. CP will not acquire through the facilities of the TSX more than 73,788 common shares during a trading day, being 25 percent of the average daily trading volume of CP common shares on the TSX for the six calendar months prior to the date of approval of the bid by the TSX and, in addition, will not acquire per day on the NYSE more than 25 percent of the average daily trading volume for the four calendar weeks preceding the date of purchase, subject to, in both cases, certain exceptions for block purchases.

The actual number of common shares that will be repurchased under the NCIB, and the timing of any such purchases, will be determined by CP, subject to the limits imposed by the TSX. There cannot be any assurances as to how many common shares, if any, will ultimately be acquired by CP. If the share split receives shareholder and regulatory approval and is implemented by the Board of Directors, adjustments will be made to the number of shares that CP may purchase under the NCIB to reflect the five-for-one share split.

CP believes that the purchase of its shares from time to time is an appropriate and advantageous use of its funds.

Under CP's previous NCIB that commenced on December 20, 2019 and expired on December 19, 2020, CP obtained approval from the TSX to purchase up to 4,800,862 of its common shares for cancellation. CP purchased 4,271,485 of its common shares through open market transactions on the TSX, the NYSE, and alternative trading systems at a weighted average price of $369.06.

In total, CP has repurchased approximately 45.3 million of its common shares since 2014.