Morningstar Names E. Hunter Harrison of Canadian Pacific Railway as its 2013 CEO of the Year

 Morningstar Names E. Hunter Harrison of Canadian Pacific Railway as its 2013
                               CEO of the Year

PR Newswire

CHICAGO, Jan. 15, 2014

CHICAGO, Jan. 15, 2014 /PRNewswire/ -- Morningstar, Inc. (NASDAQ: MORN), a
leading provider of independent investment research, today announced its 2013
CEO of the Year, E. Hunter Harrison of Canadian Pacific. Morningstar annually
recognizes a chief executive who exhibits exemplary corporate stewardship,
demonstrates independent thinking, creates lasting value for shareholders, and
has put his or her stamp on an industry. Tune into CNBC's "Nightly Business
Report" this eveningto watch aninterview with Harrison.

The two other nominees for Morningstar's 2013 CEO of the Year award were
Darren Gee of Peyto Exploration & Development Corp. and John Martin of Gilead
Science Inc.

"This year's nominees have demonstrated sound stewardship practices on behalf
of their firms' shareholders," Heather Brilliant, head of global equity and
corporate credit research for Morningstar, said. "We selected Mr. Harrison as
this year's winner because Canadian Pacific has produced outstanding results
since his appointment as CEO in June 2012. Harrison has now transformed three
railroads in his career, and along the way forged a new standard of
profitability in a two-centuries-old industry.

"It would be difficult to identify another company leader who has
revolutionized operations within a mature, asset-intensive industry several
times over. Earlier in his career, Harrison steered both the Canadian National
and Illinois Central railways to industry-leading margins. His actions in 2013
improved operations for the benefit of Canadian Pacific employees, customers,
and shareholders, and positioned the firm for future success."

Harrison has been a powerful catalyst for change at Canadian Pacific:

  oFollowing his appointment, Harrison streamlined leadership, operating
    practices, and assets, both human and steel. He replaced nearly all senior
    leadership, decreased the work force by 27 percent, and reduced
    company-controlled railcars and locomotives by 35 percent and 43 percent,
  oHe relocated the firm's headquarters from downtown Calgary, Alberta to the
    firm's Ogden Yard, a move that cut costs but also keeps Canadian Pacific's
    focus on freight operations front and center for corporate employees.
  oThe firm is on track to produce a nearly 30 percent operating margin in
    2013 and targets a 35 percent margin in 2014, a figure nearly double
    2011's level. Shares have soared to CAD 160.65 as of Dec. 31, 2013, far
    above the CAD 70 price in January 2012 when public correspondence between
    the firm's board and activist investor Pershing Square mentioned
    Harrison's name as a potential new CEO. In 2013, Canadian Pacific's 61
    percent total return dwarfed the returns of the S&P 500 (32 percent) and
    the Dow Jones Transportation Index (41 percent).

"Remarkably, Harrison has made these changes to Canadian Pacific's business
without harming customer service," Brilliant added. "The firm's higher margins
and greater return on invested capital will generate additional free cash
flow, which can be invested in a virtuous cycle to enhance safety, operations,
and customer service, thereby driving down costs even further. We believe this
trend will enhance Canadian Pacific's cost advantage—a key source of its Wide
'Economic Moat' rating. The firm's wide economic moat is also based on
efficient scale; Canadian Pacific has a difficult-to-replicate network of
track and assets and operates in an industry effectively served by existing

Morningstar's Economic Moat™ rating is a proprietary measure of a company's
sustainable competitive advantages, and Morningstar assigns each company a
rating of Wide, Narrow, or None. A company can obtain an economic moat through
five primary sources: Efficient Scale (a limited market where there is little
incentive for new entrants), Network Effect (a situation where incremental
customers add value for existing customers), Cost Advantage (allowing a
company a greater profit margin and/or the ability to steal market share),
Intangible Assets (e.g. patents or strong brands), and Switching Costs (making
it costly in time and/or money for customers to switch providers).

Morningstar introduced its CEO of the Year award in January 2000. Winners are
chosen by senior members of Morningstar's equity analyst team based on their
in-depth independent research.

For Morningstar's commentary about Harrison, go to: For the complete list of past
winners, go to:

About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment research in
North America, Europe, Australia, and Asia. The company offers an extensive
line of products and services for individual investors, financial advisors,
asset managers, and retirement plan providers and sponsors. Morningstar
provides data on approximately 437,000 investment offerings, including stocks,
mutual funds, and similar vehicles, along with real-time global market data on
more than 10 million equities, indexes, futures, options, commodities, and
precious metals, in addition to foreign exchange and Treasury markets.
Morningstar also offers investment management services through its registered
investment advisor subsidiaries and has approximately $176 billion in assets
under advisement or management as of Sept. 30, 2013. The company has
operations in 27 countries.

The references to Canadian Pacific in this press release should not be
considered a solicitation by Morningstar to buy shares of that company.

©2014 Morningstar, Inc. All Rights Reserved.


Media Contact:
Carling Spelhaug, +1 312-696-6150 or

SOURCE Morningstar, Inc.

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