CIBC - 9th Annual Easter Insitutional Investor Conference

Find CIBC research on Bloomberg, Reuters, firstcall.com and ResearchCentral.cibcwm.com CIBC World Markets Inc., P.O. Box 500, 161 Bay Street, Brookfield Place, Toronto, Canada M5J 2S8 (416) 594-7000

Institutional Equity Research

Industry Update

September 17, 2010 Off The Press

9th Annual Eastern Institutional Investor Conference

All figures in Canadian dollars, unless otherwise stated. 10-104698 © 2010

CIBC World Markets does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

See "Important Disclosures" section at the end of this report for important required disclosures, including potential conflicts of interest. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report, or at the end of each section hereof, where applicable.

Sector Weighting: None

CIBC World Markets Inc. 1 (416) 594-7000

9th Annual Eastern Institutional Investor Conference - September 17, 2010

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3

Companies Presenting Aerospace & Defense Diversified Financial Bombardier, Inc. Home Capital Group Inc. CAE, Inc. Power Financial Corporation TMX Group, Inc. Airlines Western Financial Group Air Canada Jazz Air Income Fund Enterprise Software Transat A.T. Inc. Constellation Software Inc. WestJet Airlines Ltd. Descartes Systems Group Inc. Asset Managers Insurance AGF Management Limited Industrial Alliance Insurance And Financial Services Inc. CI Financial Corp. Manulife Financial Corporation Sun Life Financial Inc. Automotive Linamar Corporation Media Magna International Inc. Cineplex Galaxy Income Fund Corus Entertainment Inc. Banks Quebecor, Inc. Bank Of Montreal Torstar Corporation Bank Of Nova Scotia Transcontinental Inc. Canadian Imperial Bank Of Commerce Yellow Pages Income Fund Canadian Western Bank Laurentian Bank Of Canada Merchandising National Bank Of Canada RONA Inc. Royal Bank Of Canada Toronto-Dominion Bank Multi-Industry Brookfield Asset Management Inc. Business & Professional Services Aecon Group Inc. Property & Casualty Companies Bird Construction Income Fund Genworth MI Canada Inc. CGI Group Inc. Intact Financial Corporation FirstService Corporation GENIVAR Income Fund Road & Rail IBI Income Fund Canadian National Railway Company SNC-Lavalin Group Inc. Canadian Pacific Railway Limited Capital Equipment Steel IESI - BFC Ltd. Russel Metals Inc. New Flyer Industries Inc. Telecommunications & Cable Services Consumer Products BCE Inc. Dorel Industries, Inc. Bell Aliant Regional Communications Income Fund Manitoba Telecom Services Inc. Rogers Communications Inc.

(Company snapshots appear in alphabetical order.)


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Director’s Overview As has been the case in most years, much has transpired in the marketplace during the past 12 months since our last institutional conference held in Montreal. From an investor perspective, the past year would appear to have been a reasonable one on a point-to-point basis as the current TSX level of 12,173 is up about 9% from last year at this time. On a North American basis, our market has outperformed and on a global basis only Mexico, Brazil and Stockholm have had a better run during the past 365 days. Of course, point-to-point references fail to highlight the trading opportunities that have existed as the TSX has experienced four declining periods greater than 5% and four upswings averaging 8.2%. This volatility, while still meaningful, has been a break from some of the extreme experience we have faced in the past couple of years. In fact, as a tidbit, the first Montreal Investor Conference commentary I provided as the DOR was in 2006, and unfortunately from an index value perspective, not much has changed – point to point.

While in past years there has been a real penchant for the resource-based stocks driving the Canadian market, this year a more diversified group have contributed to the market’s rise in the last 12 months. While the materials group has delivered 21% appreciation, so have the telecoms, while consumer-focused stocks are up 10%-15% as a group as have the industrials. It is just this diversification that we seek out in putting together our agenda for the Montreal conference. Executive management teams from a total of 54 companies spanning a variety of sectors including Financial Services, Communications and Media, Transportation, Technology, Consumer Products and Industrial Manufacturing, are presenting at our conference.

This special report contains a one-page synopsis of each company that will be presenting. We have provided a brief update and our current forecasts for each company currently under research coverage. We have also provided a general description and historical data for those companies not under coverage.

We hope this report provides additional insight and perspective into some of North America’s most interesting and attractive industries as well as the companies that compete in them. On behalf of all of us at CIBC Wholesale Banking, we hope the forthcoming presentations at the Westin in Montreal prove to be interesting, insightful and continue to be a valuable tool in your investment decision-making processes.

Quentin Broad Managing Director, Canadian Equity Research

Find CIBC research on Bloomberg, Reuters, firstcall.com CIBC World Markets Inc., P.O. Box 500, 161 Bay Street, Brookfield Place, Toronto, Canada M5J 2S8 (416) 594-7000 and ResearchCentral.cibcwm.com


Company Update

September 17, 2010 Business & Professional Services

Aecon Group Inc. Company Profile

Aecon is one of Canada's largest construction companies, providing infrastructure (road building, heavy civil), buildings (institutional and commercial) and industrial (mechanical) services to markets primarily in Ontario and Alberta.

The industrial division (oil sand/power generation) drove over two-thirds of Aecon's earnings in 2008. When these contracts ended, margins in the division fell. However, we believe that the division is now at an inflection point, with backlog up 58% year over year in Q2 and revenues up 22%.

The company's buildings and infrastructure divisions are seeing growth, benefiting from government stimulus funded infrastructure projects. However, the margins on these projects are well below those of industrial division.

Overall, we expect improving margins in the industrial division to drive earnings momentum. Further upside is dependent on Aecon's ability to reduce losses in its buildings division and its ability to obtain synergies from the recent Cow Harbour acquisition. We rate Aecon SO with a $16 PT.

Stock Price Performance

Source: Reuters All figures in Canadian dollars, unless otherwise stated.


See "Important Disclosures" section at the end of this report for important required disclosures, including potential conflicts of interest. See "Price Target Calculation" and "Key Risks to Price Target" sections at the end of this report, where applicable.

Paul Lechem 1 (416) 956-6429 [email protected]

Stephanie Price, CFA 1 (416) 594-7047 [email protected]

Stock Rating:

Sector Outperformer

Sector Weighting:

Market Weight 12-18 mo. Price Target $16.00 ARE-TSX (9/13/10) $12.25 Key Indices: None

3-5-Yr. EPS Gr. Rate (E) 2.0% 52-week Range $10.06-$15.29 Shares Outstanding 54.5M Float 53.4M Shrs Avg. Daily Trading Vol. 120,000 Market Capitalization $668.2M Dividend/Div Yield $0.20 / 1.6% Fiscal Year Ends December Book Value $8.25 per Shr 2010 ROE (E) 10.0% Net Debt ($150.0M) Preferred Nil Common Equity $449.9M Convertible Available No Earnings Per Share Current 2009 $0.80A 2010 $0.76E 2011 $1.12E P/E 2009 15.3x 2010 16.1x 2011 10.9x EBITDA ($ mlns.) 2009 $128.2A 2010 $135.6E 2011 $199.5E EV/EBITDA 2009 6.1x 2010 5.8x 2011 3.9x Company Description Aecon Group Inc. is a leading Canadian construction firm operating in the infrastructure, buildings and industrial sectors, and also owns investments in infrastructure concessions. www.aecon.com

Company Profile - September 17, 2010

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Aecon Group Inc. (ARE-TSX)Current Price:

12-18 Month Target:

All Figures in $ millions, except per share data Key Statistics Investment ThesisShare Price 12.25 Net Cash (Debt) (149.5) Shares Outstanding 54.5 Enterprise Value 817.7Market Capitalization 668.2

Key Multiples F2009A F2010E F2011EP/E 15.2x 16.1x 10.9xEV/EBITDA 6.4x 6.0x 4.1xPeers (Average)P/E 9.7x 9.3x 10.1xEV/EBITDA 5.3x 5.7x 4.2x

Key Metrics F2009A F2010E F2011EGross Margin 10.8% 9.8% 11.0%EBITDA Margin 5.7% 5.0% 6.6%Net margin 2.0% 1.8% 2.5%Cash Per Share 5.82 NA NANet Debt/EBITDA NA -1.25 -0.38

Income Statement F2009A F2010E F2011ESales 2261.0 2690.0 3002.0 Growth (y/y) 20.5% 19.0% 11.6%Gross Profit 243.7 264.4 331.2Operating Expenses 115.5 128.8 131.7EBITDA 128.2 135.6 199.5Amortization (48.4) (41.0) (50.0)Interest (17.8) (33.8) (40.3)EBT 70.1 73.0 113.6Tax Expense (Recovery) (22.3) (21.4) (36.3)Adj. Net Income (Loss) 44.4 48.7 75.2Adj. FD EPS $0.80 $0.76 $1.12

Free Cash Flow F2009A F2010E F2011ECash Flow From Operations (6.1) (0.0) 143.2Capital Expenditures (30.1) (34.1) (40.0)Free Cash Flow (36.2) (34.2) 103.2Free Cash Flow Per Share NA NA $1.44

Balance Sheet F2009A F2010E F2011ECash & ST Investments 340.9 191.1 245.4PP&E 200.9 391.1 391.1Total Assets 1689.3 1956.4 2058.1Recourse debt 238.1 360.5 321.9Non-recourse debt 287.4 319.6 319.6Total Liabilities 1227.0 1457.2 1492.1Shareholder's Equity 457.4 492.5 557.3

Sector OutperformerPaul Lechem (416) 956-6429 [email protected]

Stephanie Price, CFA (416) 594-7047 [email protected]$12.25$16.00

Backlog By Division

0

500

1,000

1,500

2,000

2,500

3,000

Q1-F200

4

Q3-F200

4

Q1-F20

05

Q3-F20

05

Q1-F20

06

Q3-F20

06

Q1-F200

7

Q3-F20

07

Q1-F20

08

Q3-F20

08

Q1-F2009

Q3-F20

09

Q1-F20

10

$mln

s.

Infrastructure Buildings Industrial

EBITDA Margin By Division

-6%-4%-2%0%2%4%6%8%

10%12%14%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

E

Infrastructure Buildings Industrial

Aecon Group Inc. is a leading Canadian construction firm operating in the infrastructure, buildings and industrial sectors, and also owns investments in infrastructure concessions.

The company is positioned well to benefit from government stimulus-driven infrastructure spending on transportation and transit (through its infrastructrue division) and public facilities in healthcare, education, justice, etc. (through its buildings division). Aecon's most profitable division - industrial - has been in a lull given a slowdown in the Alberta oil sands and Ontario power generation construction, and has presented a headwind to earnings growth. Recent activity in the oil sands suggests that this division may have turned a corner.

Source: Company reports and CIBC World Markets Inc.



Company Update

September 17, 2010 Canadian Asset Managers

AGF Management Limited Compelling Valuations; Need Fund Sales To Improve

AGF manages $21.4 billion in retail AUM (11th largest in Canada) and $21.2 billion in institutional and high-net-worth AUM. The company also operates a lending business with $3.4 billion of loans outstanding and that contributed ~23% of pre-tax earnings over the last 12 months.

The company experienced net fund redemptions of $1,055MM 2010 YTD, weaker than $315MM in net outflows during the same period in 2009. To improve sales, AGF has launched several new mutual funds, stepped up its marketing efforts and targeted inclusion on third-party platforms.

Reversing the sales trend could act as a significant positive catalyst for AGF. While retail AUM is down 3% Y/Y as of Aug. 31, institutional and high-net-worth AUM is up 12%. The lending business has a tier 1 capital ratio of 14.4% and we estimate that it produced an ROE of 13% over the past year.

AGF is trading at 9.2x 2011E EPS, a steep discount to Canadian comps at an average of 13.7x. In our view, valuations are not adequately capturing growth in institutional AUM and the well capitalized trust business with mid-teen ROEs. We rate AGF Sector Outperformer with a $20.50 price target.





Paul Holden, CFA 1 (416) 594-8417 [email protected]

Kevin Cheng, CFA 1 (416) 956-6676 [email protected]

Stock Rating:

Sector Outperformer

Sector Weighting:

Market Weight 12-18 mo. Price Target $20.50 AGF.B-TSX (9/13/10) $15.61 Key Indices: Toronto

3-5-Yr. EPS Gr. Rate (E) NM 52-week Range $13.36-$19.25 Shares Outstanding 90.4M Float 71.8M Shrs Avg. Daily Trading Vol. 208,000 Market Capitalization $1,411.0M Dividend/Div Yield $1.04 / 6.7% Fiscal Year Ends November Book Value $12.59 per Shr 2011 ROE (E) 12.9% LT Debt $162.2M Preferred Nil Common Equity $1,138.3M Convertible Available No Earnings Per Share Current 2009 $0.98A 2010 $1.43E 2011 $1.70E P/E 2009 15.9x 2010 10.9x 2011 9.2x EBITDA ($ mlns.) 2009 $219.5A 2010 $275.0E 2011 $305.4E EV/EBITDA 2009 6.6x 2010 5.3x 2011 4.8x Company Description AGF Management Limited manages mutual funds in Canada. It also operates a trust and international money management subsidiary.

www.agf.com

Compelling Valuations; Need Fund Sales To Improve - September 17, 2010

9

AGF Management (AGF.B-TSX) Sector OutperformerC$15.61 Paul Holden, CFA (416-594-8417) [email protected]$20.50 Kevin Cheng, CFA (416-956-6676) [email protected]

All figures in millions except per share data

P/E Multiples 2009A 2010E 2011E Investment Thesis

AGF Management Ltd 15.9x 10.9x 9.2xCanadian Asset Managers (ex AGF) 17.9x 16.1x 13.7xU.S. Asset Managers 20.2x 15.5x 12.9x

Key Financial Metrics ($ mns) 2008A 2009A 2010E 2011E

EBITDA 313.7 219.5 275.0 305.4 ROE 11.8% 7.9% 11.3% 12.9%Dividends per Share 0.95 1.00 1.03 1.09 Average Mutual Fund AUM 26,346 20,663 21,748 21,931 Total AUM 35,558 44,618 45,306 49,587 Gross Sales 3,579 2,607 2,788 3,312 Gross Redemptions 5,159 3,380 4,117 3,760 Chart 1: EBITDA Composition ($ mns)Net Sales (1,580) (774) (1,329) (448) Loan loss prov isions 30.4 37.6 15.8 13.0

Income Statement ($ mns)* 2008A 2009A 2010E 2011E

Revenue 725.6 586.1 632.1 665.9 Oper. Expenses 411.9 366.6 357.1 360.5 EBITDA 313.7 219.5 275.0 305.4 Amortization of deferred sales commissions 98.1 84.7 78.3 75.5 Other amortization 15.9 12.0 8.6 8.4 EBIT 199.7 122.8 188.1 221.5 Interest Expense 9.3 6.0 7.7 7.7 EBT 141.8 116.9 180.4 213.8 Tax Expense (Recovery) 12.7 28.4 50.5 59.9

Chart 2: Forward P/E*Net Income 128.6 87.9 129.2 153.5 Operating EPS 1.41 0.98 1.43 1.70

Free Cash Flow ($ mns) 2008A 2009A 2010E 2011E

CFO before changes in NWC 278.7 206.1 243.3 250.4 Less: Commissions Paid 86.8 54.5 61.1 76.2 Free Cash Flow 191.9 151.6 182.2 174.2

Free Cash Flow Per Share 2.10 1.69 2.01 1.93 * Forward fiscal year

*Nov Year end

Institutional AUM continues to perform well rising 35.1% Y/Y vs mutual fund growth of 2.1% Y/Y. Institutional AUM growth should continue with 3 new mandates to be launched in 2010 and the addition of new offices in Boston and Hong Kong.

We believe that AGF trust may not be fully valued by the market given: 1) its tier 1 capital ratio (14.4% ) remains robust, 2) loss ratios have stabilized and 3) mid-teen ROEs. Using a conservative valuation of 1.0x book value, AGF trust is worth approx imately $2.43/share.

AGF Management is the least expensive Canadian asset manager in our coverage universe at 9.2x our 2011E EPS, versus an average of 13.7x for the sector and a historical average of 14.0x. AGF is also the asset manager that prov ides the highest div idend y ield at 6.7% and free cash flow y ield of 12.8% .

Current Price : 12- To 18- Mth Price Target:

$275$220

$314$357

0

100

200

300

400

2007 2008 2009 2010E

Investment Management Trust Company Other

4

8

12

16

20

24

2003 2004 2005 2006 2007 2008 2009 2010

+1 std dev

-1 std dev

Av erage




Company Update

September 17, 2010 Transportation

Air Canada Leveraged To A Recovery

Air Canada is Canada's largest airline and the largest provider of scheduled passenger services in the Canadian market, the trans-border market and the international market to and from Canada. In 2009, Air Canada carried ~31 million passengers, servicing ~167 destinations worldwide.

Air Canada remains focused on containing costs through its Cost Transformation Program and is targeting savings of $300 million (up from $270 million previously) in 2010, eventually reaching an annual run rate of $530 million by the end of 2011 (up from $500 million previously).

The growth opportunities for Air Canada stem from long-haul business as it looks to increase flights into Asia and leverage its status as the number one foreign carrier in the U.S., to drive throughput at its Toronto hub and to attract more U.S. air passenger demand for international travel.

Air Canada is a leveraged play to a recovery in the airline cycle but our SO-S rating reflects its higher debt levels, higher pension obligations and older fleet. Air Canada's recent debt refinancing has provided additional flexibility and will reduce cash flow obligations by $406 million from H2/10 to 2014.





Jacob Bout, CFA 1 (416) 956-6766 [email protected]

Kevin Chiang 1 (416) 594-7198 [email protected]

Stock Rating:

Sector Outperformer – Speculative

Sector Weighting:

Market Weight 12-18 mo. Price Target $5.00 AC.B-TSX (9/13/10) $2.51 Key Indices: Toronto

3-5-Yr. EPS Gr. Rate (E) NM 52-week Range $1.03-$2.67 Shares Outstanding 274.0M Float 185.3M Shrs Avg. Daily Trading Vol. 279,198 Market Capitalization $687.7M Dividend/Div Yield Nil / Nil Fiscal Year Ends December Book Value $4.63 per Shr 2010 ROE (E) NM LT Debt $3,972.0M Preferred Nil Common Equity $1,269.0M Convertible Available No EBITDA ($ mlns.) Current 2009 $344.0A 2010 $973.0E 2011 $1217.0E EV/EBITDA 2009 9.6x 2010 3.4x 2011 2.7x Earnings Per Share 2009 ($0.26A) 2010 ($0.18E) 2011 $0.73E P/E 2009 NM 2010 NM 2011 3.4x Company Description Air Canada is the largest scheduled air transportation provider in Canada, serving domestic, trans-border and international destinations.

www.aircanada.ca

Leveraged To A Recovery - September 17, 2010

11

Air Canada (AC/B - TSX) Current Price: C$2.51 12- To 18-Month Price Target: C$5.00All figures in C$ million, except per share data December 31 year end

Share Price $2.5152 Week High $2.6752 Week Low $1.03Shares Outstanding (mln) 278Market Cap. (mln) $698Key Multiples 2009 2010E 2011EAir Canada P/E NM NM 3.4xPeer P/E 46.2x 19.7x 9.5xAir Canada EV/EBITDA 9.8x 3.5x 2.8xPeer EV/EBITDA 10.4x 4.7x 3.9xAir Canada P/CF 6.0x 1.3x 1.1xPeer P/CF 21.4x 9.3x 7.1xOperating Ratios 2009 2010E 2011EOperating Margin -3.2% 2.6% 4.7%Return On Equity -1.7% -9.3% 38.2%Current Ratio 0.88 0.84 0.84Quick Ratio 0.70 0.73 0.72LT Debt To Total Capitalization 73.7% 89.2% 87.2%Dividend Yield 0.0% 0.0% 100.0%Income Statement 2009 2010E 2011ESales 9,739 10,621 11,259EBITDA From Operations 344 973 1,217Earnings From Operations (24) (48) 206FD EPS From Operations (0.26) (0.18) 0.73Cash Flow 2009 2010E 2011ECFPS 0.42 1.92 2.32FCFPS (1.31) 1.45 1.83Balance Sheet Q2/10Cash + ST Investments 1,815Current Assets 3,053PP&E 6,054Total Assets 10,440Current Liabilities 3,339LT Debt 3,972Total Liabilities 8,994Shareholders' Equity 1,446Operating Statistics Q2/10Fuel Price Per Litre (Cents) 71.1Fuel Consumption (Mln L) 924Total Aircraft 328# Of Employees ('000) 23.1Fleet Utilization (Hours/Day) 9.7Fleet Length (Miles) 853

Company DescriptionAir Canada is Canada’s largest full-service airline and the largest provider of scheduled passenger services in the Canadian market, the Canada-U.S. transborder market and the international market to and from Canada.

In 2009, Air Canada carried ~31 million passengers, providing passenger service to ~167 destinations worldwide. The carrier also generates revenue from cargo services provided by Air Canada, and from tour operator services provided by Air Canada Vacations.

Investment Thesis1. Focus on reigning in costs - Cost Transformation Program (CTP) targeting $530 million in annual savings by end of 2011.

2. Labour relations - all is clear for now - Air Canada and its labour unions agreed to a 21 month contract extension effective July 2009.

3. Pension reprieve - Canadian government adopted the Air Canada 2009 Pension Regulation which fixed Air Canada's pension payments from 2010-2013.

4. Focusing on higher yield customers by expanding premium services - Premium seats are ~6x more profitable than economy seats.

5. Overseas competition - Biggest challenge from Emirates, Etihad and Qatar Airw

6. Expanding international network / leveraging the Star Alliance

ManagementMr. Calin Rovinescu - President & CEOMr. Duncan Dee - EVP & COOMr. Michael Rousseau - EVP & CFOMr. Benjamin Smith - EVP & CCOMs. Lise Fournel - SVP & CIOMr. Kevin C. Howlett - SVP Employee RelationsMr. David Legge - SVP OperationsMs. Susan Welscheid - SVP Customer Service

Share Price

$0$5

$10$15$20$25

Nov-0

6

Feb-

07

May-0

7

Aug-

07

Nov-0

7

Feb-

08

May-0

8

Aug-

08

Nov-0

8

Feb-

09

May-0

9

Aug-

09

Nov-0

9

Feb-

10

May-1

0

Passenger Revenue (2009)

Canada43%

US Transborder19%

Atlantic20%

Pacific10%

Other8%

FTE Employee/Aircraft

108

110

112

114

116

118

120

2006 2007 2008 2009

RASM & CASM (cents)

10

12

14

16

18

Q12006

Q3 Q12007

Q3 Q12008

Q3 Q12009

Q3 Q12010E

Q3E Q1E2011E

Q3E

RASM (cents) CASM ex-fuel (cents)

Total ASM

4000

4500

5000

5500

6000

6500

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

(mlns

)

2008 2009

Source: Bloomberg, company reports and CIBC World Markets Inc.



Company Update

September 17, 2010 Banks

Bank Of Montreal Improving Credit & Retail Banking Are Key Drivers In F2011

BMO is the fourth-largest Canadian bank by market cap, with assets of $402 billion as at Q3/F10. In the L4Q, it derived 58% of core earnings from P&C Banking, 28% from Capital Markets and 14% from Private Client. This excludes Corporate, which reported a loss of $404 million over that time.

Although very weak trading revenue weighed on BMO's Q3/F10 results, earnings have been showing solid momentum over the past several quarters, aided by falling loan losses. Capital ratios have also improved with Tier 1 now at 13.5% and tangible common equity at 10.4%.

Our view on this name has been that the combination of above-average leverage to improving credit and strong performance in retail banking positions it well relative to its peers. Notwithstanding a disappointing FQ3, we believe this thesis is intact.

BMO valuation multiples have continued to steadily improve over the past few months. The company's forward P/E multiple is slightly below its peer group, and trading 3% pts. below its 10-year average premium of 4%. We rate BMO Sector Outperformer.





Robert Sedran, CFA 1 (416) 594-7874 [email protected]

Meny Grauman, CFA 1 (416) 956-3723 [email protected]

Mehmed Rizvanovic, CFA (416) 594-7283 [email protected]

Stock Rating:

Sector Outperformer

Sector Weighting:

Overweight 12-18 mo. Price Target $66.00 BMO-TSX (9/13/10) $61.78 Key Indices: TSXFinSv

3-5-Yr. EPS Gr. Rate (E) 8.0% 52-week Range $49.56-$65.71 Shares Outstanding 562.9M Float 562.9M Shrs Avg. Daily Trading Vol. 1,852,000 Market Capitalization $34,773.4M Dividend/Div Yield $2.80 / 4.5% Fiscal Year Ends October Book Value $33.13 per Shr 2010 ROE (E) 15.6% LT Debt $3,747.0M Preferred $2,571.00M Common Equity $18,646.0M Convertible Available No Earnings Per Share Current 2009 $4.20A 2010 $4.80E 2011 $5.42E P/E 2009 14.7x 2010 12.9x 2011 11.4x Company Description Bank of Montreal is one of Canada's leading financial institutions. It competes in P&C Banking, Wealth Management and Investment Banking, predominantly in Canada and the U.S. www.bmo.com

Improving Credit & Retail Banking Are Key Drivers In F2011 - September 17, 2010

13

BANK OF MONTREALAll Figures in $ millions, except per share data (excl. one-time items)KEY MULTI PLES F2009A F2010E F2011E OUR THESISP/E Multiple 14.7x 12.9x 11.4xPeer average 12.7x 11.5x

Q3-10P/BVPS 1.9xPeer average 2.1x

OPERATING PERFORMANCE F2009A F2010E F2011E SEGMENTED EARNINGS CONTRIBUTIONCore cash EPS $4.20 $4.80 $5.42Annual EPS growth (9.7% ) 14.2% 12.9%Core cash ROE 13.2% 14.8% 15.6%Efficiency ratio 61.0% 60.6% 60.3%Operating leverage (YoY) (0.4% ) 1.3% 2.1%

CREDIT METRICS F2009A F2010E F2011ELoan loss rate (1) 0.86% 0.59% 0.41%

F2009A Q3-10Gross impaired loans 3,297 3,128Specific ACLs 596 577Total ACLs 1,902 1,879Classical Coverage ratio (2) 58% 60%Specific ACLs to GILs 18% 18%General ACLs as % of Gross Loans & BAs 0.77% 0.74%

KEY EARNI NGS DRIVERS F2009A F2010E F2011E FORWARD P/E MULTIPLE RELATIVE TO PEER GROUP (based on consensus estimates)Core net interest income 5,397 5,967 6,340 % change 4.5% 10.6% 6.2%Total capital markets related revenue (3) 2,863 2,468 2,471 % change 20.2% (13.8%) 0.1%Provision for credit losses 1,543 1,006 725 % change 44% (35%) (28%)Non-interest expenses 7,263 7,463 7,641 % change 5.8% 2.8% 2.4%

CAPI TAL MEASURES F2009A F2010E F2011ETier 1 capital ratio 12.2% 13.7% 14.3%Tangible common equity to RWA 9.2% 10.5% 11.1%Tangible common equity to tangible assets 4.0% 4.1% 4.3%Risk Weighted Assets 167,201 157,753 162,539

LOAN BOOK F2009A F2010E F2011E P/BVPS MULTIPLE RELATIVE TO PEER GROUPResidential mortgages 45,524 47,450 48,890Non-residential mortgages 6,727 7,843 8,081Consumer instalment & other personal 45,824 50,114 51,634Credit cards 2,574 3,329 3,430Business and government 61,442 61,077 62,930Gross Loans 162,091 169,813 174,965Acceptances 7,640 6,954 7,236Total Gross Loans & Acceptances 169,731 176,767 182,201

N otes :(1) PC Ls as a % of av erage net loans and acceptances (ex cl. repos ).(2) Total ACLs as a % of GILs.(3) Ex cludes gains /(losses ) on inv estment sec urities.

We believe that BMO continues to have above-average exposure to falling loan loss provisions; a powerful catalyst that will be an important growth driver through our forecast period. While trading results in the most recent quarter were well below our forecast, we still expect this revenue line to settle above pre credit crunch levels. We currently have a Sector Outperformer rating on the stock with a $67 price target.

45% 56% 65% 70%18%

20% 15% 16%35%41%

63%19%

-17%-44%

-5%

2%

-50%

0%

50%

100%

150%

F2007A F2008A F2009A Q3-10

Personal & Commercial Banking Private Client Group BMO Capital Markets Corporate Support

60%

70%

80%

90%

100%

110%

120%

130%

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10-y ear Av erage Relative P/B = 89% Current Relativ e P/B = 87%

70%

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130%

Sep-

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10-y ear Av erage Relativ e Fwd P/E: 104% Current Relative Fw d P/E: 101%




Company Update


Bank Of Nova Scotia Solid Strategic Positioning Supports Premium Valuation

BNS is the third-largest Canadian bank by market cap, with assets of $523 billion as at Q3/F10. Over the past year, BNS derived 46% of earnings from Canadian Banking, 24% from International, 29% from Scotia Capital. This excludes Corporate, which showed a loss of $759 million over that time.

The Q3/F10 earnings miss was driven by weaker trading revenue and higher-than-forecast fixed expenses. Our estimate for this bank calls for below-average earnings growth in F2011, which reflects the fact that its better performance through the downturn leaves less of a recovery profile.

In our opinion, BNS merits a premium based on its strong performance through the downturn and more shareholder-friendly deployment options afforded by its well-developed International platform. Our enthusiasm is tempered in the near term by the fact that this premium is in place.

BNS trades at a premium to its peer group. On forward P/E, the current premium is 10% versus a 10-year avg. of 4%. On P/B, the existing premium of 22% is above the 10-year avg. of 9%. We expect the premiums to hold given the firm's strategic advantages and above-average ROE.








Stock Rating:

Sector Performer

Sector Weighting:

Overweight 12-18 mo. Price Target $55.00 BNS-TSX (9/13/10) $53.69 Key Indices: TSXFinSv

3-5-Yr. EPS Gr. Rate (E) 9.0% 52-week Range $43.49-$53.78 Shares Outstanding 1,038.0M Float 1,038.0M Shrs Avg. Daily Trading Vol. 2,329,000 Market Capitalization $55,730.2M Dividend/Div Yield $1.96 / 3.7% Fiscal Year Ends October Book Value $21.68 per Shr 2010 ROE (E) 18.5% LT Debt $6,424.0M Preferred $3,975.00M Common Equity $22,500.0M Convertible Available No Earnings Per Share Current 2009 $3.65A 2010 $3.98E 2011 $4.31E P/E 2009 14.7x 2010 13.5x 2011 12.5x Cash EPS excluding one-time items. Company Description One of Canada's most international financial institutions, Bank of Nova Scotia delivers retail and commercial banking capabilities in approximately 50 countries.

www.scotiabank.com

Solid Strategic Positioning Supports Premium Valuation - September 17, 2010

15

ScotiabankAll Figures in $ millions, except per share data (excl. one-time items)KEY MULTI PLES F2009A F2010E F2011E OUR THESISP/E Multiple 14.7x 13.5x 12.4xPeer average 12.7x 11.5x


OPERATING PERFORMANCE F2009A F2010E F2011E SEGMENTED EARNINGS CONTRIBUTIONCore cash EPS $3.65 $3.98 $4.31Annual EPS growth (6.7% ) 9.0% 8.4%Core cash ROE 18.9% 18.7% 18.5%Efficiency ratio 52.6% 51.1% 51.1%Operating leverage (YoY) 6.0% 0.8% 0.3%


F2009A Q3-10Gross impaired loans 3,939 5,398Specific ACLs 1,376 2,800Total ACLs 2,875 4,259Classical Coverage ratio (2) 73% 79%Specific ACLs to GILs 35% 52%General ACLs as % of Gross Loans & BAs 0.54% 0.50%

KEY EARNI NGS DRIVERS F2009A F2010E F2011E FORWARD P/E MULTIPLE RELATIVE TO PEER GROUP (based on consensus estimates)Core net interest income 8,193 8,459 9,003 % change 5.9% 3.2% 6.4%Total capital markets related revenue (3) 2,607 2,493 2,284 % change 44.8% (4.4%) (8.4%)Provision for credit losses 1,602 1,314 995 % change 154% (18%) (24%)Non-interest expenses 7,919 8,023 8,176 % change 8.5% 1.3% 1.9%


LOAN BOOK F2009A F2010E F2011E P/BVPS MULTIPLE RELATIVE TO PEER GROUPResidential mortgages 101,604 119,200 124,040Personal and credit cards 61,048 62,082 64,602Business and government 106,520 104,842 109,099Gross Loans 269,172 286,124 297,742Acceptances 9,583 7,495 7,800Total Gross Loans & Acceptances 278,755 293,619 305,541

N otes :(1) PC Ls as a % of av erage net loans and acceptances (ex cl. repos ).(2) Total ACLs as a % of GILs.

(3) Ex cludes gains /(losses ) on inv estment sec urities.

We are comfortable with the premium at which the shares trade considering the bank's longer-term strategic advantages, better organic growth rate, above-average ROE and more stable earnings. However, expanding it from here will prove more challenging and so we maintain our Sector Performer rating at this time.

37% 44% 49% 57%

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Curre nt Relativ e P/E 6-month Mov ing Av eragePlus 1 Standard Dev iation Minus 1 standard De v iation

10-y ear Av e rage Relativ e Fw d P/ E: 104% Curren t Relativ e Fw d P/E: 11 0%

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10-year Average Relativ e P/B = 109% Current Relativ e P/B = 122%




Company Update

September 17, 2010 Telecommunications & Cable Services

BCE Inc. Solid Defensive Play With Yield Support And LT Operational Gain Potential

BCE is one of Canada's largest communications companies. It owns 100% of Bell Canada, Canada's largest telco, and 100% of Bell TV (formerly ExpressVu), Canada's largest satellite TV operator. BCE also holds a 44% stake in Bell Aliant, which has wireline operations in Atlantic Canada.

BCE recently announced it would acquire the remaining 85% interest in CTV that it does not own. The company believes the deal was necessitated by the growing importance of convergence. While the deal did not cost much, we believe it gives BCE a call option should content be required for wireless.

Overall, BCE continues a series of solid quarters, focused on cost-cutting, which continues to drive improving results. Wireless has also been seeing solid gains, with strong ARPU gains, improved data growth, and a trend towards obtaining a fair share of net additions.

With significant FCF generation, BCE is, in our view, a solid defensive play with yield support and longer-term operational gain potential. That said, we believe current valuations adequately reflect BCE's asset mix and its near-term prospects from fundamentals. As such, we retain our SP rating.





Robert Bek, CFA 1 (416) 594-7454 [email protected]

Tony Rizzi 1 (416) 594-7299 [email protected]

Michael Lee, CFA 1 (416) 594-7907 [email protected]

Stock Rating:

Sector Performer

Sector Weighting:

Market Weight 12-18 mo. Price Target $33.00 BCE-TSX (9/13/10) $32.75 Key Indices: Toronto, S&P/TSX 60

3-5-Yr. EPS Gr. Rate (E) 8.2% 52-week Range $25.07-$33.75 Shares Outstanding 760.1M Float 756.1M Shrs Avg. Daily Trading Vol. 5,386,141 Market Capitalization $24,893.3M Dividend/Div Yield $1.83 / 5.6% Fiscal Year Ends December Book Value $18.98 per Shr 2010 ROE (E) 15.5% LT Debt $13,893.0M Preferred $2,770.00M Common Equity $14,429.0M Convertible Available No Earnings Per Share Current 2009 $2.50A 2010 $2.81E 2011 $2.85E P/E 2009 13.1x 2010 11.7x 2011 11.5x EBITDA ($MM excl. Aliant) 2009A $5,719.0 2010E $5,903.0 2011E $6,081.2 EV/EBITDA (excl. Aliant) 2009A 5.8x 2010E 5.6x 2011E 5.5x Company Description BCE is one of Canada's largest communications companies.It owns 100% of Bell Canada, Canada's largest telecom company, and 100% of Bell TV (formerly ExpressVu), Canada's largest satellite TV operator. www.bce.ca

Solid Defensive Play With Yield Support And LT Operational Gain Potential - September 17, 2010

17

BCE Inc. (BCE - TSX) Sector Performer Current Price : C$32.75 Robert Bek, CFA (416-594-7454) [email protected] 12- To 18- Month Price Target: C$33.00 Michael Lee, CFA (416-594-7907) [email protected]

Tony Rizzi (416-594-7299) Tony [email protected] figures in millions except per share data

EV / EBITDA Multiples F2008A F2009A F2010E F2011E Company Profile

BCE Inc. (excl. Aliant) - 5.8x 5.6x 5.5xTELUS Corp. - 6.0x 5.7x 5.5xNorth American ILECs - 5.5x 5.5x 5.5xU.S. RLECs - 7.7x 6.4x 6.3x

P / E Multiples F2008A F2009A F2010E F2011E Investment Thesis

BCE Inc. (excl. Aliant) - 13.1x 11.7x 11.5xTELUS Corp. - 13.7x 13.0x 12.4xNorth American ILECs - 13.5x 14.1x 14.3xU.S. RLECs - 13.3x 12.2x 12.3x

Key Financial Metrics F2008A F2009A F2010E F2011E

Free Cash Flow Yield 6.9% 7.3% 8.9% 8.8%Payout Ratio 64.1% 93.4% 83.7% 88.1%Capital Intensity 16.9% 16.1% 15.9% 16.4%Net Debt / EBITDA 1.9x 2.0x 2.0x 1.9xEffective Tax Rate 25.8% 15.0% 19.8% 25.0%

Income Statement F2008A F2009A F2010E F2011E Chart 1: Revenues & EBITDA By Segment (F2010E)

Revenue 17,698.0 17,735.0 18,019.4 18,245.7OpEx 10,444.0 10,291.0 10,597.7 10,632.3EBITDA 7,004.0 7,089.0 7,227.7 7,393.4Depreciation & Amortization 3,269.0 3,371.0 3,298.0 3,338.0EBIT 2,864.0 3,191.0 3,862.7 3,955.4Interest Expense 791.0 723.0 660.7 640.0EBT 1,820.0 2,450.0 3,342.0 3,315.4Tax Expense (Recovery) 469.0 368.0 660.0 828.9

Net Income 819.0 1,631.0 2,247.0 2,046.6Adj. FD EPS 2.25 2.50 2.81 2.85

Free Cash Flow F2008A F2009A F2010E F2011E Key Operating Statistics (Last Reported Qtr.)

EBITDA 7,004.0 7,089.0 7,227.7 7,393.4Plus: Other (1,052.0) (1,509.0) (902.0) (1,000.0)Less:

Capex 2,988.0 2,854.0 2,872.7 2,990.1Common Dividends 953.0 1,570.0 1,713.0 1,798.7Preferred Dividends 129.0 107.0 110.0 110.0Cash Taxes 340.0 168.0 610.0 528.1Cash Interest 791.0 723.0 660.7 640.0

Operating Free Cash Flow (FCF) 1,689.0 1,796.3 2,178.7 2,166.4Operating FCF Per Share 2.09 2.32 2.82 2.80

Under the direction of George Cope, BCE has opportunities to steadily improve operations and profitability, with focus returning to more aggressive wireless intitiatives and cost cutting efforts. While material improvements in the business will take time, near-term expectations are modest and achievable.

BCE is flush with cash, supporting an aggressive buyback, a sizable dividend, and prudent debt refinancing plans. As such, with significant free cash flow generation, BCE is, in our view, a solid defensive play with strong yield support and potential for longer-term operational gains.

We believe current valuations adequately reflect BCE's asset mix, its near-term prospects from fundamentals, and its yield profile. While BCE's wireline segment remains under pressure, wireless opportunites are substantial, but material gains may take many quarters and likely years to accomplish.

BCE is Canada's largest communications company, providing wireline and wireless voice and data services, broadband internet, and video services to residential, business, and wholesale customers. BCE also owns a 44.2% voting interest in Bell Aliant, a regional incumbent carrier in Canada.

68.8% 69.2%

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Revenues EBITDA

Wireline (includes Bell TV) Wireless

Q2/09 Q2/10 y/y GrowthWireless ('000):

Total Subs 6,572 6,987 6.3%Postpaid Net Adds 64 103 60.6%Total Net Adds 45 98 118.8%Postpaid ARPU $62.58 $63.66 1.7%Prepaid ARPU $16.41 $18.35 11.8%

Wireline ('000):Residential Lines 4,042 3,714 -8.1%Business Lines 3,031 2,918 -3.7%High-Speed Internet Subs 2,062 2,064 0.1%

Bell TV ('000)Total Subs 1,884 1,979 5.0%




Company Update


Bell Aliant Regional Comm. Income Fund Solid Yield Story With Little Down-side Risk

Bell Aliant is one of North America's largest regional telcos, providing voice, data, Internet, video, and business solutions to customers in six Canadian provinces (Ontario, Quebec, and the Atlantic provinces).

As a wireline player, Bell Aliant's core business is under pressure from cable competition and wireless substitution over the long run. However, it remains better insulated than other telcos due to its "rural geography," which, along with its cost-cutting efforts, should help mitigate ongoing pressures.

While some investors are focused on the potential for a buy-in from 44%-owner BCE, we do not believe that such a move will come anytime soon. BCE has other strategic priorities and already has material say over the strategic direction at Bell Aliant to satisfy its near-term requirements.

With the distribution cut now behind Bell Aliant and a reasonable post-conversion dividend payout policy in place, there is little downside risk with owning the shares. That said, we believe Bell Aliant's shares are fairly valued at present levels. Hence, we retain our SP rating.








Stock Rating:

Sector Performer

Sector Weighting:

Market Weight 12-18 mo. Price Target $27.00 BA.UN-TSX (9/13/10) $25.85 Key Indices: None

3-5-Yr. EPS Gr. Rate (E) NM 52-week Range $24.74-$28.40 Shares Outstanding 228.4M Float 125.6M Shrs Avg. Daily Trading Vol. 213,104 Market Capitalization $5,903.7M Dividend/Div Yield $2.90 / 11.2% Fiscal Year Ends December Book Value NM 2010 ROE (E) NM Net Debt $2,751.7M Preferred Nil Common Equity NM Convertible Available No Distributable CF Generated Current 2009 $3.39A 2010 $3.05E 2011 $2.87E Payout Ratio 2009 85.5% 2010 95.1% 2011 66.2% EBITDA ($ mlns.) 2009A $1,466.4 2010E $1,426.7 2011E $1,412.2 EV/EBITDA 2009A 5.9x 2010E 6.1x 2011E 6.1x Company Description Bell Aliant is one of North America's largest regional communication providers. Bell Aliant provides voice, data, Internet, video, and business solutions to customers in six Canadian provinces. www.bell.aliant.ca

Solid Yield Story With Little Down-side Risk - September 17, 2010

19

Bell Aliant Income Fund (BA.UN - TSX) Sector Performer Current Price : C$25.85 Robert Bek, CFA (416-594-7454) [email protected] 12- To 18- Month Price Target: C$27.00 Michael Lee, CFA (416-594-7907) [email protected]


EV / EBITDA Multiples 2008A 2009A 2010E 2011E Company Profile

Bell Aliant Income Fund - 5.9x 6.1x 6.1xCdn. ILECs - 5.5x 5.5x 5.5xU.S. ILECs - 5.5x 5.5x 5.5xU.S. RLECs - 7.7x 6.4x 6.3x

P / E Multiples 2008A 2009A 2010E 2011E Investment Thesis

Bell Aliant Income Fund - 15.8x 18.9x 20.0xCdn. ILECs - 13.3x 14.4x 14.9xU.S. ILECs - 13.9x 13.8x 13.3xU.S. RLECs - 13.3x 12.2x 12.3x

Key Financial Metrics 2008A 2009A 2010E 2011E

Distributable Cash Flow Yield 12.1% 13.0% 11.7% 11.1%Payout Ratio 91.9% 85.4% 94.8% 66.2%Capital Intensity 16.1% 14.6% 16.5% 17.9%Net Debt / EBITDA 1.9x 1.9x 1.9x 1.9x

Income Statement 2008A 2009A 2010E 2011E Chart 1: Revenues By Segment (2010E)

Revenue 3,282.0 3,174.2 3,056.7 3,017.5OpEx 1,831.1 1,707.8 1,630.0 1,605.3EBITDA 1,450.9 1,466.4 1,426.7 1,412.2Depreciation & Amortization 716.1 715.0 710.0 710.0EBIT 595.8 621.6 591.6 592.2Interest Expense 156.9 158.4 159.0 160.0EBT 441.2 451.8 430.7 430.3Tax Expense (Recovery) (21.8) (56.1) (14.8) 0.0

Net Income 331.9 373.0 313.5 295.3Adj. FD EPU 1.46 1.63 1.37 1.29

Distributable Cash Flow 2008A 2009A 2010E 2011E Key Operating Statistics (Last Reported Qtr.)

Adj. EBITDA 1,386.7 1,399.1 1,358.1 1,348.1Less:

Capex 528.8 464.8 503.7 540.1Cash Taxes 0.0 0.0 0.0 0.0Cash Interest 149.5 151.7 152.0 146.5Other Income (7.2) 9.2 5.8 5.8

Distributable Cash 715.6 773.4 696.5 655.6Per Unit 3.14 3.39 3.05 2.87

Distributions Paid 657.9 660.2 660.4 433.9Per Unit 2.89 2.90 2.90 1.90

Bell Aliant is one of North America's largest regional telecom carriers, providing customers across the provinces of Atlantic Canada, Quebec, and Ontario with wireline voice services, data and broadband internet, wireless, and video entertainment. Bell Aliant also provides IT professional services and advanced technology solutions.

As a wireline player, Bell Aliant's core business will remain under pressure from cable competition. However, Bell Aliant is a little better insulated than other telcos due to its more "rural" geography, which should help mitigate ongoing operational pressures.

Post conversion at the end of 2010, Bell Aliant has announced it will cut distributions to more sustainable levels (from $2.90 to $1.90) in order to accelerate the deployment of its FTTN/FTTH network in Atlantic Canada as well as pay down debt.

Bell Aliant remains a strong income vehicle with little operational risks to distributions over the near-term. Additionally, we expect tight cost control to continue to lead to robust distributable cash flow generation.

Internet & Data29%

Local & Access45%

Information Tech9%

Wireless3%

Long Distance14%

Q2/09 Q2/10 y/y GrowthWireline ('000):

Residential Lines 1,993.0 1,867.0 -6.3%Business Lines 1,021 997 -2.3%High-Speed Internet Subs 782.7 829.8 6.0%

Wireless ('000):Total Subs 116.9 125.6 7.4%Total Net Adds 3.0 4.2 41.2%Blended ARPU $60.09 $58.39 -2.8%




Company Update


Bird Construction Income Fund Company Profile

Bird is a buildings general contractor with operations throughout the country and a focus on Western Canada. The fund operates in three major markets: industrial (33% of revenues), institutional (55%) and retail/commercial (12%).

Given weak industrial and commercial markets, Bird's revenues have been in decline since peaking in mid-2008 (down 11% Y/Y in Q2). However, backlog appears to be improving, up 6% Y/Y in Q2. Recent P3 project wins (RCMP E Division, OPP Modernization, Alberta Schools II) should also help.

Despite weak end-markets, Bird has maintained a focus on delivering best-in-class profitability. Q2 EBITDA margins were up 100 bps Y/Y given a focus on more complex work and lower construction costs. Cash is strong at ~$12/unit, the payout ratio is <50% and acquisitions are infrequent.

We expect that Bird will benefit as oil sands projects restart and the P3 market gains traction. However, we expect that the majority of the benefit will be in H2/11 and beyond. We rate Bird Sector Performer with a $38 price target.







Stock Rating:

Sector Performer

Sector Weighting:

Market Weight 12-18 mo. Price Target $38.00 BDT.UN-TSX (9/13/10) $36.04 Key Indices: None

3-5-Yr. AFFO Gr. Rate NA 52-week Range $28.01-$36.15 Units Outstanding 14.1M Distr. Frequency Monthly Avg. Daily Trading Vol. NM Market Capitalization $506.4M DCF Value/Distr. Yield NA / NA Fiscal Year Ends December Book Value $10.21 per Unit 2010 D/CF NM Net Cash $165.40M Net Asset Value NM Common Equity $152.6M Convertible Available No EBITDA ($ mlns.) Current 2009 $75.0A 2010 $76.7E 2011 $81.9E EV/EBITDA 2009 4.3x 2010 4.2x 2011 3.9x Distributable Cash Flow Generated 2009 $4.10A 2010 $4.15E 2011 $3.85E Payout Ratio 2009 35.4% 2010 43.4% 2011 46.8% Company Description Bird Construction Income Fund provides general contracting, construction management and design-build services to the institutional, retail, and industrial sectors.

www.bird.ca


21

Bird Construction (BDT.UN-TSX)Current Price:

12 to 18 month Price Target: All Figures in $ millions, except per share data Key StatisticsShare Price $36.04 Net Cash (Debt) 165.4 Shares Outstanding 14.1 Enterprise Value 341.0Market Capitalization 506.4


Key Metrics F2009A F2010E F2011EEBITDA Margin 8.5% 9.5% 9.0%Net margin 6.4% 7.3% 6.0%Cash Per Unit $14.50 $14.20 $17.06Net Debt/EBITDA

Income Statement F2009A F2010E F2011ESales 882.9 809.1 910.1 Growth (y/y) -15.1% -8.4% 12.5%Operating Expenses 808.0 732.5 828.2EBITDA 75.0 76.7 81.9Amortization 3.4 2.8 3.8EBT 71.6 73.8 78.1Income Tax 14.7 14.7 23.4Net Income (Loss) 56.9 59.1 54.7EPU $4.05 $4.21 $3.89Distributable cash 57.6 58.4 54.1DCPU $4.10 $4.15 $3.85Cash distributions 23.2 25.3 25.3Distributions per unit $1.65 $1.80 $1.80Payout ratio 40.3% 43.3% 46.8%

Free Cash Flow F2009A F2010E F2011ECash Flow From Operations 100.2 42.1 67.5Capital Expenditures (2.1) (1.6) (2.0)Free Cash Flow 98.1 40.4 65.5Free Cash Flow Per Unit $6.98 $2.88 $4.66

Balance Sheet F2009A F2010E F2011ECash & ST Investments 203.8 199.5 239.8Goodwill & Intangibles 11.6 11.6 11.6Total Assets 438.6 415.6 474.0Debt 0.0 0.0 0.0Total Liabilities 303.3 246.4 275.4Unitholder's Equity 135.3 169.2 198.6

Investment Thesis

Bird Construction Income Fund provides general contracting, construction management and design-build services to the institutional, retail, and industrial sectors. Revenues in 2008 were split between work in the industrial (39% of revenues), commercial/retail (29%) and institutional (32%) sectors. Work in the industrial (largely Alberta oil sands) and commercial/retail sectors has softened, with the company's backlog down over 20% from the peak.Nevertheless, Bird continues to generate very high profitability, and with a payout ratio of under 50% contines to maintain a strong cash balance.

Sector Performer$36.04$38.00

Quarterly Results

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Paul Lechem (416-956-6429) [email protected] Price, CFA (416-594-7047) [email protected]




Company Update

September 17, 2010 Aerospace & Defense

Bombardier Inc. Company Profile

Bombardier designs, manufactures and services aerospace and rail transportation markets to customers worldwide with a leading market share in the majority of segments. The company's aerospace division produces turboprop, business, commercial, specialty and regional jet aircrafts.

The long-term opportunities for Bombardier are too large to ignore: 1) the bias for business jet demand should be positive over the next few years; 2) trends in the transportation segment appear favourable; and 3) the CSeries should provide Bombardier with significant upside after F2013.

Bombardier Transportation (BT) manufactures and services a variety of railway rolling stock, systems and signaling equipment. Our revenue forecast for BT is based on stable growth as the company converts a significant backlog ($30.3 billion as of the end of Q2/F11) into revenue.

We believe the major growth driver for regional jets beyond F2013 will be reflected by demand from the CSeries. We expect business jet demand will begin to recover in C2011, albeit at a moderate rate. Growth for business jets beyond F2013 will likely benefit from the introduction of the Learjet 85.


Source: Reuters All figures in US dollars, unless otherwise stated.(C$1.028:US$1)



Michael Willemse, CFA 1 (416) 594-7285 [email protected]

David Galison 1 (416) 956-3548 [email protected]

Stock Rating:

Sector Outperformer

Sector Weighting:

Market Weight 12-18 mo. Price Target C$7.00 BBD.B-TSX (9/13/10) C$5.03 Key Indices: Toronto

3-5-Yr. EPS Gr. Rate (E) 12.1% 52-week Range C$4.16-C$6.24 Shares Outstanding 1,728.0M Float 1,459.0M Shrs Avg. Daily Trading Vol. 5,393,866 Market Capitalization $8,455.1M Dividend/Div Yield C$0.10 / 2.0% Fiscal Year Ends January Book Value $2.23 per Shr 2010 ROE (E) 15.0% Net Debt $1,273.0M Preferred $392.10M Common Equity $3,884.0M Convertible Available No Earnings Per Share Current 2010 $0.39A 2011 $0.34E 2012 $0.41E P/E 2010 12.5x 2011 14.4x 2012 11.9x EV/EBITDA F2010A 5.8x F2011E 7.1x F2012E 5.9x Company Description Bombardier Inc. is an internationally diversified manufacturer supplying aerospace and rail transportation equipment and services.

www.bombardier.com


23

Bombardier (BBD.B-TSX) Sector Outperformer Current Price: C$5.03 12- To 18-Month Price Target: C$7All Figures in USD$ millions, except per share data unless otherwise stated USD:CAD 1.0270 13-Sep-10

Key Multiples F2011E P/EF2011E EBITDA

F2012E P/E

F2012E EBITDA

Bombardier 15.0x 8.5x 12.2x 7.0xAerospace Companies 16.5x 8.5x 14.9x 6.5xDiversified Manufacturers 11.8x 9.1x 10.5x 8.4xTransportation Companies 11.1x 6.1x 10.8x 5.9x

Historical P/ 1yr EPS 12.8xHistorical EV/TTM EBITDA 6.4xOperating Performance F2010 A F2011 E F2012 E F2013 EReturn on Equity 18.5% 15.0% 15.1% 16.5%Return on Capital Employed 24.2% 19.4% 21.0% 22.2%EBITDA Margin 8.1% 7.9% 8.6% 9.3%EBIT Margin 5.7% 5.7% 6.4% 7.2%EBT Margin 4.7% 4.6% 5.0% 5.9%Net Margin 3.6% 3.4% 3.5% 4.1%

Quality of Earnings F2010 A F2011 E F2012 E F2013 ECash Realization Ratio1 0.8x 2.3x 1.8x 1.4xP/FCF 18.9x 183.3x 43.5x 10.5xFCF Yield 5.3% 0.5% 2.3% 9.6%Effective Tax Rate 22.7% 27.0% 27.5% 30.0%Interest Coverage 3.9x 3.7x 3.8x 4.6x Deliveries (units) F2010 A F2011 E F2012 E F2013 EIncome Statement F2010 A F2011 E F2012 E F2013 E Business Aircraft 176 149 164 180Revenue - Consolidated $19,366.0 $18,193.1 $20,221.1 $22,217.8 Commercial Aircraft 121 97 104 114Gross Profit $3,164.0 $3,047.5 $3,441.9 $3,930.0 Amphibious Aircraft 5 5 5 5EBITDA $1,570.0 $1,436.5 $1,745.8 $2,060.7 * Current Backlog - Aerospace $17.1 Q2/F11 AEBIT $1,098.0 $1,044.5 $1,295.8 $1,610.7 *Current Backlog - Transportation $30.3 Q2/F11 AEBT $915.0 $839.7 $1,011.0 $1,321.9 *US$ blnMinority Interest $9.0 $13.0 $16.0 $16.0 Valuation & OutlookNet Income - Cont. Oper. $698.0 $621.2 $717.0 $909.3 Current Price: C$5.03 Rating: SOFD EPS, (Ex. Unusuals) $0.39 $0.34 $0.41 $0.52 Price Target: C$7.00FD S/O 1,755 1,743 1,743 1,743 12-18 Mo Return: 39.2%

Price Target Represents: F2011 E F2012 E F2013 ECash Flow F2010 A F2011 E F2012 E F2013 E P/E: 20.3x 16.6x 13.1xOperating cash flow (ex WC) $1,223.0 $1,158.3 $1,385.8 $1,649.3 Enterprise Value: C$12,985 C$13,589 C$13,350Capex ($767.0) ($1,111.7) ($1,189.5) ($833.2) EV/EBITDA: 8.8x 7.6x 6.3xWorking Capital Investments ($671.0) $242.0 ($125.3) ($402.8) EV/Sales: 0.7x 0.7x 0.6xFree Cash Flow2 $456.0 $46.6 $196.3 $816.1 P/BV: 2.9x 2.5x 2.2xFCF per Share $0.26 $0.03 $0.11 $0.47 FCF Yield: 0.4% 1.7% 6.9%Balance Sheet F2010 A F2011 E F2012 E F2013 E Consolidated ChartCash And Equivalents $4,054.0 $4,349.6 $4,240.6 $4,473.9Total debt $4,162.0 $4,633.0 $5,113.0 $5,113.0Equity $3,769.0 $4,145.9 $4,734.9 $5,516.2Minority Interest $68.0 $66.0 $66.0 $66.0Preferred Value $347.0 $346.0 $346.0 $346.0Net debt (Cash) $176.0 $349.4 $938.4 $705.1Net debt per share $0.10 $0.20 $0.54 $0.40Net debt/EBITDA 0.1x 0.2x 0.5x 0.3xBook Value Per Unit (FD) $2.15 $2.38 $2.72 $3.16

1 Calculated as CFO divided by Net Income.2 Calculated as CFO less CapexSource: Bloomberg, Company reports and CIBC World Markets Inc.

*Bombardier Fiscal Years Ending January 31. Fiscal 2011 = Calendar 2010 for comparative purposes.

Investment Thesis

Bombardier has two reportable manufacturing segments, Aerospace (Business Aircraft, Commercial Aircraft, Specialized and Amphibious Aircraft, Customer Services and Flexjet/Skyjet) and Transportation (Rolling Stock, Services, Systems and Signaling). Management intends to maintain a diversified product strategy with a continued focus on the rail and aerospace markets.

Aerospace: the major growth driver for regional jets beyond F2013 will be reflected by demand from the CSeries. We expect that business jet demand will begin to recover in calendar 2011, albeit at a moderate rate. Growth for business jets beyond F2013 will likely benefit from the introduction of the Learjet 85.

Transportation has been somewhat sheltered from the economic downturn, given that large-scale transit infrastructure is typically funded by the public sector. BA has been negatively impacted by cyclical swings in the aerospace sector. However, Bombardier's diversification strategy has allowed the company to offset weakness in one area with other segments that have a more stable growth and demand profile. Bombardier is actively seeking to grow by providing new products in the company’s traditional markets (North America and Europe) as well as through an increased focus on emerging markets such as Asia.

Michael Willemse, CFA 416-594-7285 [email protected] Galison, MBA 416-956-3548 [email protected]

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Company Update

September 17, 2010 Multi-Industry

Brookfield Asset Management Exceptional Managers Of Long-life, Cash-flow-producing Assets

Brookfield Asset Management (BAM) owns and manages roughly $107 billion of primarily commercial property, renewable power, infrastructure, and other similar assets. BAM's invested capital totals $22 billion, with the remainder managed on behalf of institutional and public market investors.

The company has developed robust operating platforms, a deep senior management team and a very strong board of directors, and has strong alignment through considerable insider and management ownership. We believe these characteristics are core to the company's future success.

We expect rising, demographically driven demand for stable, cash-flow-producing, real-return assets to support strong demand for the types of assets BAM specializes in, and that the company's very strong management platform could support rapid AUM growth over the next several years.

BAM is a well-established, yet rapidly growing global asset manager of property, power and infrastructure. We expect its net asset value to grow as a result of rising values for its publicly traded and private real estate, power and infrastructure assets over the next 12-18 months.


Source: Reuters All figures in US dollars, unless otherwise stated.



Alex Avery, CFA 1 (416) 594-8179 [email protected]

Troy MacLean, CFA 1 (416) 956-3643 [email protected]

Brad Sturges, CFA 1 (416) 594-7399 [email protected]

Stock Rating:

Sector Outperformer

Sector Weighting:

Market Weight 12-18 mo. Price Target $33.00 BAM-NYSE (9/13/10) $27.40 Key Indices: None

3-5-Yr. EPS Gr. Rate (E) NM 52-week Range $20.01-$27.80 Shares Outstanding 574.9M Float 470.9M Shrs Avg. Daily Trading Vol. NM Market Capitalization $15,752.3M Dividend/Div Yield $0.52 / 1.9% Fiscal Year Ends December Net Asset Value $30.00 per Shr 2010 ROE (E) NM LT Debt $2,625.0M Preferred $1,413.00M Common Equity $14,484.0M Convertible Available No Earnings Per Share* Current 2009 $0.71A 2010 $0.95E 2011 $1.18E P/E 2009 38.6x 2010 28.8x 2011 23.2x * 2010E & 2011E restated to IFRS presentation. Cash Flow Per Share* 2009 $2.43A 2010 $2.35E 2011 $2.45E P/CF 2009 11.3x 2010 11.7x 2011 11.2x Company Description BAM is an international diversified property, power & infrastructure, investment and asset management company with controlling interests in a number of publicly traded subsidiaries. www.brookfield.com/

Exceptional Managers Of Long-life, Cash-flow-producing Assets - September 17, 2010

25

Brookfield Asset Management (BAM-NYSE) Alex Avery, CFA Stock Rating: Sector Outperformer 12 - 18 month Price Target: $33.00 Per Unit Brad Sturges, CFASector Weighting: Market Weight Unit Price - (9/13/2010): $27.40 Per Unit Troy MacLean, CFAMarket Capitalizat ion ($ mlns): $15,727.6 Current Yield: 1.9%

PRICE TARGET CALCULATION & NAV COMPANY DESCRIPTIONCIBC 2010E CFPS: $2.35Target Multiple (2010E CFPS): ~14.0xCIBC Price Target: $33.00Implied 12-18 Month Total Return: 22%

CIBC NAV(E): $30.00 COMPANY STRATEGYPremium/(Discount) To NAV: (9%)

TOTAL RETURN2008 2009 2010 YTD

Price Return (56.0%) 45.3% 23.5%Yield 1.5% 3.4% n/a INVESTMENT THESIS: SECTOR OUTPERFORMERTotal (54.5%) 48.7% 23.5%

COMPANY MANAGEMENTBruce Flatt - Senior Managing Partner (SMP) and CEOBrian Lawson - Senior Managing Partner and CFORic Clark - SMP, Property Operations; CEO of BPO-NYSERichard Legault - SMP; CEO-Brookfield Renewable PowerSam Pollock - SMP; Head of Infrastructure ActivitiesHarry Goldgut - SMP; Chairman-Brookfield Renewable PowerGeorge Myhal - SMP, Asset Management & Public Securitieswww.brookfield.com

EARNINGS SUMMARY EARNINGS MULTIPLESFinancial Metric 2009A 2010E 2011E EPS MULTIPLES 2009A 2010E 2011EEarnings Per Share $0.71 $0.95 $1.18 Brookfield Asset Management 38.6x 28.8x 23.2xYoY Change (30.4%) 33.8% 24.2%

CFPS MULTIPLES 2009A 2010E 2011ECash Flow Per Share $2.43 $2.35 $2.45 Brookfield Asset Management 11.3x 11.7x 11.2xYoY Change 4.3% (3.3%) 4.3%

LIQUIDITY PROFILE (at Q2/10) OPERATING CASH FLOW BREAKDOWNCore Liquid ity - cash, financia l assets and undrawn credit facilities.Corporate Level $2.7Principal operating units $1.5Total Core Liquidity $4.2

NAV BREAKDOWN (Q2/10)($ mlns.) $ Per Share

Renewable Power 8,345 14.17Commercial Properties 5,126 8.70Infrastructure 1,785 3.03Development Activities 3,346 5.68Special Situations 2,516 4.27Cash and Financial Assets 1,708 2.90Other Assets 1,987 3.37Corporate (7,329) (12.45)Total 17,484 29.69

HISTORICAL PREMIUM/(DISCOUNT) TO ESTIMATED NAV BROOKFIELD'S INVESTED CAPITAL - $22 BILLION

BAM is a diversif ied asset manager with interests in property, power, infrastructure, and other assets across the globe, with controlling interests in several publically traded companies, including Brookfield Properties andBrookfield Homes. BAM trades on both the TSX and the NYSE.

BAM's principal strategy is to invest, for its own account and on behalf of co-investors, in real assets and businesses that enjoy competitive advantages, barriers to entry or restricted regulatory environments. These competitive advantages typically allow BAM to generate stable cash flows, attractive operating margins and long-term value appreciat ion.

VERY STRONG MANAGEMENT TEAM AND LEADERSHIP: A very deep management team, board and group of "partners" provides superior information collection and deal sourcing capabilities, which are crucial for the scale and type of assets the company pursues.

BAM IS VERY WELL CAPITALIZED : At Q2/10, BAM had ~$4.2 billion of liquidity including $2.7 billion at the BAM level. In addition, BAM has $7.4 billion in un-invested capital allocation from its investment partners and could raise more to fund a specific new transaction.

BROAD EXPERTISE ALLOWS FOR INVESTMENT ACROSS SEVERAL ASSET CLASSES: With robust management capabilities across many industries, the company can pursue investments in the most appealingsectors, efficiently allocating capital for the greatest returns.

Q2/10 Tota l of $455 million

Cash & other assets8%

Specia l Situations6%

Commercial Properties

20%

Development8%

Renewable Power34% Infrastructure

7%

Asset Mgmt/Services

17%

(40%)(30%)(20%)(10%)

0%10%20%30%40%

Q3/99 Q1/01 Q3/02 Q1/04 Q4/05 Q2/07 Q4/08 Q2/10

Cash, Financial Assets, Other

14%

Infrastructure9%

Renewable Power36%

Development9%

Commercial Properties

23%

Special Situations9%

Note: June 2010, Prior to corporate liabilities

Source: Company reports, Thomson One Reuters and CIBC World Markets Inc.



Company Update

September 17, 2010 Aerospace & Defense

CAE Inc. Company Profile

CAE is a global leader in full flight simulators and flight training services. The company holds a dominant market share for civil aircraft simulators, civil aviation training and continues to build its leading position in the military market.

The main drivers for CAE going forward include an eventual rebound in the civil simulator and training markets, continued growth at the military operations and the successful penetration of the helicopter and healthcare markets. These growth drivers are somewhat offset by currency headwinds.

Although the economic downturn in C2009 created some headwinds for CAE over the past year, overall growth for the company has been impressive over the past few years. For the year ending F2010, the eight-year revenue and EBITDA CAGR for CAE was 5.3% and 3.8%, respectively.

CAE’s dominant market share, strong geographic coverage, and ability to easily adapt to regulations and customs in new countries have allowed the company to penetrate new business opportunities in emerging markets quickly and cost effectively.







Stock Rating:

Sector Outperformer

Sector Weighting:

Market Weight 12-18 mo. Price Target $12.00 CAE-TSX (9/13/10) $10.44 Key Indices: DJ Ind, Toronto

3-5-Yr. EPS Gr. Rate (E) 11.8% 52-week Range $8.34-$10.62 Shares Outstanding 256.5M Float 209.6M Shrs Avg. Daily Trading Vol. 515,127 Market Capitalization $2,677.9M Dividend/Div Yield $0.16 / 1.5% Fiscal Year Ends March Book Value $4.64 per Shr 2010 ROE (E) 13.4% Net Debt $296.7M Preferred Nil Common Equity $1,191.2M Convertible Available No Operating Earnings Per Share Current 2010 $0.65A 2011 $0.64E 2012 $0.71E P/E 2010 16.1x 2011 16.3x 2012 14.7x EV/EBITDA F2010A 8.4x F2011E 8.4x F2012E 7.4x Company Description CAE Inc. provides modeling, simulation and training products and services for commercial and government customers worldwide.

www.cae.ca


27

CAE (CAE-TSX) Sector Outperformer Current Price: $10.44 12- To 18-Month Price Target: $12All Figures in $ mlns, except per share data unless otherwise stated USD:CAD 1.0273 13-Sep-10

Key Multiples F2010E P/EF2010E EBITDA F2011E P/E

F2011E EBITDA

CAE 16.3x 8.4x 14.8x 7.4xFlight Training Companies 13.4x 6.9x 10.8x 6.0xTransporation Equipment 22.0x 8.5x 14.4x 6.6xMilitary & Government Capital Equipment 10.9x 6.3x 10.1x 5.9x

Historical P/ 1yr EPS 15.5xHistorical EV/TTM EBITDA 10.6xOperating Performance F2009 F2010 F2011 E F2012 EReturn on Equity 16.5% 12.5% 12.8% 12.7%Return on Capital Employed 13.6% 9.6% 10.9% 11.3%EBITDA Margin 23.7% 23.1% 21.8% 22.8%EBIT Margin 18.3% 15.1% 16.1% 17.0%EBT Margin 17.0% 13.4% 14.3% 14.8%Net Margin 12.0% 9.5% 10.1% 10.3%Quality of Earnings F2009 F2010 F2011 E F2012 ECash Realization Ratio1 0.5x 1.8x 0.8x 1.6xP/FCF -291.3x 19.1x 39.3x 21.2xFCF Yield -0.3% 5.2% 2.5% 4.7% Segmented Data F2009 F2010 F2011 E F2012 EEffective Tax Rate 29.0% 30.0% 30.0% 30.0% Global FFS Orders 50 29 36 43Interest Coverage 15.0x 8.8x 9.1x 7.7x CAE FFS Orders 35 20 25 30Income Statement F2009 F2010 F2011 E F2012 E Civil EBITDA $247.4 $192.2 $188.2 $218.3Revenue - Consolidated $1,662.2 $1,526.3 $1,630.0 $1,773.0 Military EBITDA $146.5 $161.1 $167.7 $185.6Gross Profit $393.9 $353.3 $356.0 $403.9 Backlog $3,042.8EBITDA $393.9 $353.3 $356.0 $403.9 Valuation & OutlookEBIT $303.6 $230.0 $261.9 $300.8 Current Price: C$10.44 Rating: SOEBT $283.4 $204.0 $233.2 $261.6 Price Target: C$12.00 Dividend: $0.16Net Income - Cont. Oper. $199.4 $144.5 $163.9 $183.1 12-18 Mo Return: 13.4%FD EPS, (Ex. Unusuals) $0.79 $0.65 $0.64 $0.71 Price Target Represents: F2010 F2011 E F2012 EFD S/O 255.1 255.9 256.5 259.4 P/E: 18.5x 18.8x 17.0xCash Flow F2009 F2010 F2011 E F2012 E Enterprise Value: $3,255.6 $3,277.9 $3,426.6Operating cash flow (ex WC) $194.8 $267.0 $194.3 $284.5 EV/EBITDA: 9.2x 9.2x 8.5xCapex ($203.7) ($130.9) ($128.1) ($160.0) EV/Sales: 2.1x 2.0x 1.9xWorking Capital Investments ($94.6) ($3.6) ($68.5) $0.1 P/BV: 2.6x 2.3x 2.1xFree Cash Flow2 ($8.9) $136.1 $66.2 $124.5 FCF Yield: 7.1% 6.9% 7.5%FCF per Share ($0.03) $0.53 $0.26 $0.48 Consolidated ChartBalance Sheet F2009 F2010 F2011 E F2012 ECash And Equivalents $195.2 $312.9 $302.6 $391.9Total debt $480.3 $492.7 $497.2 $697.2Equity $1,205.1 $1,155.8 $1,277.6 $1,437.5Net debt (Cash) $285.1 $179.8 $194.6 $305.3Net debt per share $1.12 $0.70 $0.76 $1.18Net debt/EBITDA 0.7x 0.5x 0.5x 0.8xBook Value Per Unit (FD) $4.72 $4.52 $4.98 $5.541 Calculated as CFO divided by Net Income.2 Calculated as CFO less CapexSource: Bloomberg, Company reports and CIBC World Markets Inc.*CAE Fiscal Years Ending March 31. Fiscal 2011 = Calendar 2010 for comparative purposes.

Investment Thesis

CAE is a global leader in Full-Flight Simulators (FFS) and flight training services. The company holds a dominant market share for Civil aircraft simulators and is working on building its leading position in the Military market. The civil aerospace simulation market has been impacted by the global economic recession, however, recent positive data from the IATA suggests the market for simulators should improve in the near term. Annual shipments of Civil FFS should eventually increase back to normalized levels of approximately 60 to 70 per year, an increase from orders of 30 FFS in 2009. The Military operations should benefit from continued growth as government interests continue to focus on the increase use of simulation for flight and combat training. We value the main Civil and Military businesses of CAE at $10.50.

Investors also receive a call option on the eventual entrance into the helicopter, healthcare and professional services markets. Although the realization of earnings from these markets are still a few years away, on a DCF basis the total value could be worth $2.00-$5.00/share. We have assumed a $1.00 valuation for the potential opportunities in these sectors.


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Company Update


Canadian Imperial Bank of Commerce Falling Loan Losses Should Support Earnings Growth In F2011

CM is the fifth-largest Canadian bank by market cap, with assets of $350 billion as at Q3/F10. Over the past four quarters, the company derived 79% of its consolidated earnings from Retail Markets and 21% from Wholesale, not including a $105 million loss in its Corporate segment.

Despite the difficult capital markets environment, CM posted q/q trading revenue growth off 21% in Q3/F10, the only bank to show an increase. This more stable performance was one of the reasons our estimates moved higher during earnings season and now call for 8.5% growth in F2011.

Q3/F10 marked the third consecutive decline in loan losses provisions, which highlights the positive contribution that improving credit is having on earnings. While we see this trend continuing, we expect it to be more gradual as the pace of the economic recovery slows.

On a forward P/E basis, CM currently trades at a 9% discount relative to its peers versus a historical average of 5%. On a P/B basis, CM trades at a 17% premium relative to its Canadian peers versus an 8% average premium over the last 10 years.








Stock Rating:

Not Rated

Sector Weighting:

Overweight 12-18 mo. Price Target $79.00 CM-TSX (9/13/10) $75.09 Key Indices: None

3-5-Yr. EPS Gr. Rate (E) 8.0% 52-week Range $61.05-$77.38 Shares Outstanding 390.8M Float 390.8M Shrs Avg. Daily Trading Vol. 1,509,000 Market Capitalization $29,343.7M Dividend/Div Yield $3.48 / 4.6% Fiscal Year Ends October Book Value $31.36 per Shr 2010 ROE (E) 20.9% LT Debt $6,067.0M Preferred $3,156.00M Common Equity $12,256.0M Convertible Available No Cash EPS Ex. One-time Items Current 2009 $5.88A 2010 $6.53E 2011 $7.08E P/E 2009 12.8x 2010 11.5x 2011 10.6x Company Description CIBC is one of North America's leading financial institutions with almost seven million personal banking and business customers.

www.cibc.com

Falling Loan Losses Should Support Earnings Growth In F2011 - September 17, 2010

29

CIBCAll Figures in $ millions, except per share data (excl. one-time items)KEY MULTI PLES F2009A F2010E F2011E SEGMENTED EARNINGS CONTRIBUTIONP/E Multiple 12.8x 11.5x 10.6xPeer average 12.7x 11.5x


OPERATING PERFORMANCE F2009A F2010E F2011ECore cash EPS $5.88 $6.53 $7.08Annual EPS growth (14.3% ) 11.0% 8.5%Core cash ROE 20.6% 21.4% 20.9%Efficiency ratio 57.7% 57.5% 57.7%Operating leverage (YoY) 4.6% 0.9% 1.3%


F2009A Q3-10Gross impaired loans 1,911 2,042Specific ACLs 736 817 FORWARD P/E MULTIPLE RELATIVE TO PEER GROUP (based on consensus estimates)Total ACLs 2,043 2,037Classical Coverage ratio (2) 107% 100%Specific ACLs to GILs 39% 40%General ACLs as % of Gross Loans & BAs 0.74% 0.65%

KEY EARNI NGS DRIVERS F2009A F2010E F2011ECore net interest income 5,134 5,905 6,202 % change (8.6%) 15.0% 5.0%Total capital markets related revenue (3) 1,616 1,608 1,561 % change 22.6% (0.5%) (2.9%)Provision for credit losses 1,459 1,262 1,025 % change 89% (14%) (19%)Non-interest expenses 6,588 6,816 7,012 % change (2.3%) 3.5% 2.9%

CAPI TAL MEASURES F2009A F2010E F2011E P/BVPS MULTIPLE RELATIVE TO PEER GROUPTier 1 capital ratio 12.1% 14.4% 15.2%Tangible common equity to RWA 7.2% 9.3% 10.3%Tangible common equity to tangible assets 2.5% 2.9% 3.1%Risk Weighted Assets 117,300 108,004 111,281

LOAN BOOK F2009A F2010E F2011EResidential Mortgages 86,152 96,769 99,705Personal and credit cards 45,677 45,943 47,337Business and government 37,343 38,286 39,448Gross Loans 169,172 180,998 186,490Acceptances 8,397 7,382 7,682Total Gross Loans & Acceptances 177,569 188,380 194,172

N otes :(1) PC Ls as a % of av erage net loans and acceptances (ex cl. repos ).

(2) Total ACLs as a % of GILs.(3) Ex cludes gains /(losses ) on inv estment sec urities.

73%87% 79% 88%

23%11% 26% 18%2%3%

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CIBC Retail Markets Wholesale Banking Corporate & Other

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C urrent R elativ e P/E 6-m onth M ov ing Av eragePlus 1 Standard Dev iation M inus 1 s tandard Dev iation

10-y ear Av erage R elativ e F w d P/E: 95% C urrent R elativ e F w d P/E: 91%

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Company Update


Canadian National Railway Company Class-leading Operating Efficiency

CN is Canada's largest railway and one of seven North American Class 1 rail companies. CN's network consists of approximately 21,100 route miles with a network spanning three coasts: the Atlantic, the Pacific and the Gulf of Mexico.

In order to grow and deepen its market share, one of CN’s key focus is on the “First Mile, Last Mile” operations initiative. CN looks to work with its customers to redefine the order schedule, transitioning CN from a traditional rail carrier into supply chain management.

While there is a growing concern over the impact of a slowing economy on freight volumes, there has not been a slowdown in CN's traffic volumes. CN is the top performing North American Class 1 year to date, with originating carload volumes up 20.8% year-over-year.

CN continues to improve efficiency along its network as it expands the use of distributed power on its locomotives, which results in improved train velocity, lowers dwell time and improves fuel efficiency. CN is in a position to lower its already industry-leading operating ratio.







Stock Rating:

Sector Performer

Sector Weighting:

Market Weight 12-18 mo. Price Target $68.00 CNR-TSX (9/13/10) $65.57 Key Indices: Toronto

3-5-Yr. EPS Gr. Rate (E) 11.0% 52-week Range $50.75-$67.88 Shares Outstanding 468.3M Float 466.9M Shrs Avg. Daily Trading Vol. 1,044,454 Market Capitalization $30,707.7M Dividend/Div Yield $1.08 / 1.6% Fiscal Year Ends December Book Value $24.98 per Shr 2010 ROE (E) 17.5% LT Debt $6.3B Preferred Nil Common Equity $11.7B Convertible Available No Earnings Per Share Current 2009 $3.24A 2010 $4.06E 2011 $4.52E P/E 2009 20.2x 2010 16.2x 2011 14.5x Company Description Canada's largest, and one of six Class 1 North American rails. CN's 19,200 miles of rail spans across Canada and south through the U.S., connecting to all three coasts. www.cn.ca

Class-leading Operating Efficiency - September 17, 2010

31

Canadian National Rail (CNR-TSX; CNI-NYSE) Current Price: C$65.57 12- To 18-Month Price Target: C$68.00All Figures in $ millions, except per share data Share Price $65.5752 Week High $67.8852 Week Low $50.75Shares Outstanding (Mln) 468Market Capitalization ($ Bln) $30.7

Key Multiples 2009A 2010E 2011ECNR P/E 20.2x 16.2x 14.5xPeer P/E 26.1x 16.9x 13.9x

CNR P/CF 12.1x 10.7x 9.8xPeer P/CF 13.0x 8.4x 7.5x

CNR EV/EBITDA 12.0x 9.7x 8.7xPeer EV/EBITDA 9.9x 8.5x 7.5x

Operating Ratios 2009A 2010E 2011EOperating Ratio 67% 63% 62%Return On Equity 13% 18% 18%Current Ratio 1.20 1.05 1.23Quick Ratio 1.07 0.96 1.14LT Debt/Total Capitalization 25% 22% 22%Dividend Yield 1.5% 1.6% 1.6%

Income Statement 2009A 2010E 2011ESales 7,367 8,167 8,724EBITDA From Operations 3,196 3,799 4,108Earnings From Operations 1,536 1,909 2,101FD EPS From Operations $3.24 $4.06 $4.52

Cash Flow 2009A 2010E 2011ECFPS $5.40 $6.13 $6.70FCFPS $1.59 $1.72 $2.20

Balance Sheet Q2/10ACash + ST Investments 896Current Assets 2,105PP&E 22,801Total Assets 26,127Current Liabilities 1,551LT Debt 6,345Total Liabilities 14,450Shareholders' Equity 11,677

Note: Peer is North American Class 1s

Company ProfileCanadian National Railway (CN) is Canada’s largest railway, and one of seven Class 1 North American rail companies. CN’s network consists of approximately 21,000 route miles of track spanning Canada and mid-America, connecting the three coasts, the Atlantic, the Pacific, and the Gulf of Mexico.

CN operates in three main regions – Western Canada Region, Eastern Canada Region, and the Southern Region. Out of Western Canada, CN transports grains and fertilizers, coal, forest products, petroleum and chemicals, and metals and minerals. Out of the U.S., CN transports grains and fertilizers, coal, forest products, automotive vehicles and parts, and metals and minerals. Lastly,from Eastern Canada, CN hauls forest products, automotive vehicles and parts, petroleum and chemicals, and metals and minerals. Intermodal services are provided in all three regions.

Investment ThesisMore Levered To An Economic Recovery: CN is levered to an economic recovery given its exposure US economy and a rebound in housing (forestry is CN’s largest bulk volume).

EJ&E Acquisition / Update At Harrison Yard: The inclusion of EJ&E plus the changes made at Harrison Yard should continue to drive an improvement in CN's operating leverage. CN expects EJ&E to yield $40 mln in synergies.

Bench strength: The Mongeau-Creel team may be the new version of the Tellier-Harrison team of old.

Pricing: Does it hold?

Econmic Outlook: Forest products (17% of revenue) is tied to C$ and housing.

Pipeline of opportunities: Growth opportunities at Prince Rupert, potash, metallurgical coal.

"First Mile, Last Mile": The next phase of precision railroading with CN further integrating itself into its cusotmers' supply chain.

2009 Sales Breakdown

Coal7%

Forest17%

Petroleum & Chemicals

19%

Intermodal20%

Metals & Minerals11%

Grain & Fertilizers21%

Automotiv e5%

Operating Ratio

55%

60%

65%

70%

75%

80%

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

E

2011

E

Return On Invested Capital (ROIC)

4%

8%

12%

16%

2002 2003 2004 2005 2006 2007 2008




Company Update


Canadian Pacific Railway Limited Continued Focus On Operating Efficiency

CP is one of seven North American Class 1 rail companies providing freight services across Canada from Montreal to Vancouver and into key centres in the U.S. Midwest and Northeast with over a 15,400 mile network.

As CP continues to improve its network fluidity and reign in costs, the gap between its operating ratio versus its Class 1 peers should diminish. CP is targeting an operating ratio in the low-70% range (Q2/10 was 77.8%).

CP remained committed to its core pricing target of 3%-4% annual growth. For 2011, ~50% of its contracts have been locked in, of which half benefit from contractual price increases (this should average 3%-4%), while the remainder of contracts are tied to an index.

CP faces less visibility for certain bulk commodities such as potash. In combination with tougher year-over-year comparables, these two factors could be a headwind to volume growth in the second half of the year.







Stock Rating:

Sector Performer

Sector Weighting:

Market Weight 12-18 mo. Price Target $63.00 CP-TSX (9/13/10) $63.56 Key Indices: Toronto

3-5-Yr. EPS Gr. Rate (E) 12.5% 52-week Range $45.41-$65.82 Shares Outstanding 169.0M Float 168.3M Shrs Avg. Daily Trading Vol. 661,115 Market Capitalization $10,741.6M Dividend/Div Yield $1.08 / 1.7% Fiscal Year Ends December Book Value $28.89 per Shr 2010 ROE (E) 12.1% LT Debt $4,160.4M Preferred Nil Common Equity $4,882.0M Convertible Available No Earnings Per Share Current 2009 $2.54A 2010 $3.68E 2011 $4.25E P/E 2009 25.0x 2010 17.3x 2011 15.0x Company Description CP is one of two Canadian Class 1 railways and has a bulk freight orientation. It provides freight services across Canada from Montreal to Vancouver and into key centers in the US Midwest & Northeast. www.cpr.ca

Continued Focus On Operating Efficiency - September 17, 2010

33

Canadian Pacific (CP-TSX, CP-NYSE) Current Price: C$63.56 12- To 18-Month Price Target: C$63.00All figures in $ millions, except per share data

Share Price $63.5652 Week High $65.8252 Week Low $45.41Shares Outstanding (Mln) 169Market Capitalization ($ Bln) $10.7

Key Multiples 2009 2010E 2011ECP P/E 25.0x 17.3x 15.0xPeer P/E 26.1x 16.9x 13.9x

CP P/CF 28.7x 9.6x 8.0xPeer P/CF 13.0x 8.4x 7.5x

CP EV/EBITDA 10.7x 9.3x 8.0xPeer EV/EBITDA 9.9x 8.5x 7.5x

Operating Ratios 2009 2010E 2011EOperating Ratio 81.6% 77.4% 75.1%Return On Equity 9% 12% 12%Current Ratio 1.02 1.25 1.73Quick Ratio 0.94 1.07 1.54LT Debt/Total Capitalization 47% 46% 42%Dividend Yield 1.4% 1.4% 1.4%

Income Statement 2009 2010E 2011ESales 4,403 4,895 5,185EBITDA From Operations 1,309 1,601 1,786Earnings From Operations 424 623 719FD EPS From Operations $2.54 $3.68 $4.25

Cash Flow 2009 2010E 2011ECFPS $2.21 $6.60 $7.99FCFPS -$2.13 $2.10 $3.26

Balance Sheet Q2/10Cash + ST Investments 374Current Assets 1,151PP&E 12,045Total Assets 13,739Current Liabilities 1,020LT Debt 4,160Total Liabilities 8,857Shareholders' Equity 4,882

Company ProfileCanadian Pacific Railway Company (CP) is one of seven Class 1 North American railroads and the second largest in Canada. The company owns approximately 10,800 miles of track. An additional 4,700 miles of track are owned jointly, leased or operated under trackage rights. Of the total mileage operated, approximately 6,300 miles are located in western Canada, 2,200 miles in eastern Canada, 5,800 miles in the US Midwest and 1,200 miles in the US Northeast.

CP’s railway feeds directly into the US from the East and West Coasts. Agreements with other carriers extend its market reach east of Montreal in Canada, through the US and into Mexico. CP transports bulk commodities, merchandise freight and intermodal traffic.

Investment ThesisFocus On Cost Cutting And Improving Operating Efficiency: CP is considered the Class 1 with the most opportunity for improvement in operating ratio (it has the highest operating ratio amongst the major Class 1s). We estimate for every 1-point improvement in CP's operating ratio adds ~$0.25 in EPS. CP targeting an operating ratio in the low-70% range.

Grain: CTA ruling for volume-related adjustment ($2.59/t) on the railway revenue entitlement – Will fight retroactive portion (Aug/07-Feb/08 = $0.08/share).

DM&E: Expect EBITDA to double from $100 million to $200 million in five years. Acquisition approved.

Deregulation Of Canadian Grain: Ability to increase “turn” – grain handlers on side.

Potash / Coal: Risk of Canpotex diversifying potash contract post-2012 (CP currently the exclusive shipper for Canpotex) and Teck moving more coal tonnage through other rail carriers.

Pension: Pension expense will be headwind over the next 3-4 years.

2009A Sales Breakdown

Sulphur & Fertilizer7%

Coal10%

Forestry4%

Intermodal29%

Automotive5%

Grain27%

Industrial Products18%

Operating Ratio

70%

72%

74%

76%

78%

80%

82%

84%

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

E

2011

E

Return On Invested Capital (ROIC)

4%

8%

12%

16%

2002 2003 2004 2005 2006 2007 2008




Company Update


Canadian Western Bank Strong Performance And Positive Outlook Support Premium Valuation

CWB is the seventh-largest Canadian bank by market capitalization, with assets of $12 billion as at Q3/F10. Over the last 12 months, CWB derived 91% of its net income from the Banking & Trust segment and 9% from the Insurance segment.

Although we expect only modest growth in net interest income for the banks, we look for CWB to be a notable positive outlier. While material margin expansion from current levels will be more difficult to attain, we forecast that asset growth will easily be the best in the group in F2011.

Our positive long-term bias is based on a favorable geographic footprint, proven business model and strong management. We look for either a better relative valuation or evidence that earnings growth is set to accelerate in order to become more positive in the near term.

On a P/E basis, CWB trades at a 14% premium to its peers, slightly above its 12% historical average. On a P/B basis, it trades at a 5% discount compared to a 10-year avg. of 8%. This firm should benefit from a better outlook for Western Canada, making a premium valuation appropriate.








Stock Rating:

Sector Underperformer

Sector Weighting:

Overweight 12-18 mo. Price Target $26.00 CWB-TSX (9/13/10) $25.50 Key Indices: TSXFinSv

3-5-Yr. EPS Gr. Rate (E) 10.0% 52-week Range $18.55-$26.59 Shares Outstanding 66.5M Float 66.5M Shrs Avg. Daily Trading Vol. 122,000 Market Capitalization $1,696.9M Dividend/Div Yield $0.44 / 1.7% Fiscal Year Ends October Book Value $13.65 per Shr 2010 ROE (E) 14.6% LT Debt $315.0M Preferred $209.75M Common Equity $908.4M Convertible Available No Earnings Per Share Current 2009 $1.51A 2010 $1.95E 2011 $2.00E P/E 2009 16.9x 2010 13.1x 2011 12.8x Company Description CWB is focused on Western Canada. It specializes in commercial loans, energy loans, construction and real estate project financing, and industrial equipment financing. It also offers retail banking. www.cwbankgroup.com

Strong Performance And Positive Outlook Support Premium Valuation - September 17, 2010

35

Canadian Western BankAll Figures in $ millions, except per share data (excl. one-time items)KEY MULTI PLES F2009A F2010E F2011E OUR THESISP/E Multiple 16.9x 13.1x 12.8xPeer average 12.4x 11.4x


OPERATING PERFORMANCE F2009A F2010E F2011E SEGMENTED EARNINGS CONTRIBUTIONCore EPS $1.51 $1.95 $2.00Annual EPS growth (4.9% ) 28.9% 2.4%Core ROE 13.6% 16.4% 14.6%Efficiency ratio 47.7% 44.1% 45.3%Operating leverage (YoY) (13.1% ) 17.0% (0.3% )


F2009A Q3-10Gross impaired loans 137.9 150.0Specific ACLs 14.3 16.7Total ACLs 75.5 75.7Classical Coverage ratio (2) 55% 51%Specific ACLs to GILs 10% 11%General ACLs as % of Gross Loans 0.66% 0.57%

KEY EARNI NGS DRIVERS F2009A F2010E F2011E FORWARD P/E MULTIPLE RELATIVE TO PEER GROUP (based on consensus estimates)Core net interest income 236.4 325.7 355.7 % change 3.4% 37.8% 9.2%Provision for credit losses 13.5 20.9 23.2 % change 13% 54% 11%Non-interest expenses 156.5 189.5 206.6 % change 15.8% 21.1% 9.0%


LOAN BOOK F2009A F2010E F2011E P/BVPS MULTIPLE RELATIVE TO PEER GROUPResidential mortgages 2,282 2,348 2,467Other 7,029 7,960 8,366Total Gross Loans 9,312 10,308 10,833

N otes :(1) PC Ls as a % of av erage net loans (ex c l. repos).(2) Total ACLs as a % of GILs.

We believe this bank has the best organic growth profile in Canadian banking. However, our estimates still imply a better near-term outlook for the larger banks in our coverage universe, which when combined with the bank-group high multiples at which the shares trade, tempers our enthusiasm. In order to become more positive, we look for either a better relative valuation or evidence that the earnings growth rate is set to accelerate. We currently rate the stock Sector Underperformer.

91.9% 91.8% 91. 6% 90.7%

8.1% 8.2% 8. 4% 9.3%

0%

25%

50%

75%

100%

F2007A F2008A F2009A Q3-10

Banking & Trust Insurance

60%

80%

100%

120%

140%

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180%

Sep-00 Sep-01 Sep-02 Sep-03 Sep-04 Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10

Current Relativ e Fwd P/E 10-y r Av g R elativ e

10-y r Av g Relativ e Fw d P/ E: 112% C urrent R elativ e F w d P/E: 114%

60%

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C urrent Relativ e P/ B 10-y r Av g Relativ e

10-y r Av g Relativ e P/ B: 92% Current R elativ e P/B: 95%




Company Update


CGI Group Inc. Company Profile

CGI is Canada's largest independent IT service outsourcing and integration company. CGI's profitability is strong, with EBIT margins of 12% in F2009 now approaching 14%. These earnings translate mainly into free cash (~$100 million/quarter) with little internal capex requirement.

While earnings are strong, organic revenue growth has been impacted by the economy (0.7% Y/Y in Q3 in constant currency). However, bookings appear solid, with an LTM book-to-bill of 1.13x. U.S. operations appear to be driving new order activity (1.75x book-to-bill in F2009).

The company completed its US$1.07 billion acquisition of Stanley on August 17. The acquisition triples the size of CGI's U.S. government business and allows it to re-enter the defense market. We expect that the acquisition will be immediately accretive (~$0.10 EPS/year) plus synergies.

Going forward, we expect renewed growth in F2011 given the Stanley acquisition, share buybacks (share count down 9% Y/Y in Q3) and new signings. We rate CGI Sector Outperformer with an $18 price target.







Stock Rating:

Sector Outperformer

Sector Weighting:

Market Weight 12-18 mo. Price Target $18.00 GIB.A-TSX (9/13/10) $14.66 Key Indices: Toronto, NYSE

3-5-Yr. EPS Gr. Rate (E) 8.0% 52-week Range $11.34-$16.80 Shares Outstanding 290.2M Float 251.7M Shrs Avg. Daily Trading Vol. NM Market Capitalization $4,254.3M Dividend/Div Yield Nil / Nil Fiscal Year Ends September Book Value $7.61 per Shr 2010 ROE (E) 14.9% Net Cash $35.00M Preferred Nil Common Equity $2,207.0M Convertible Available No Earnings Per Share Current 2009 $1.02A 2010 $1.12E 2011 $1.30E P/E 2009 14.4x 2010 13.1x 2011 11.3x 2010E EPS exclude FQ1 tax adjustment. Company Description CGI Group Inc. is Canada's largest independent IT service outsourcing and integration company.

www.cgi.ca


37

CGI Group (GIB.A-TSX)Current Price:

12 to 18 month Price Target: All Figures in $ millions, except per share data Key StatisticsShare Price $14.66 Net Cash (Debt) (1,075.4) Shares Outstanding 277.0 Enterprise Value 5,136.2 Market Capitalization 4,060.8


Profitability F2009A F2010E F2011EEBITDA Margin 17.3% 18.2% 17.4%Net Margin 8.3% 9.6% 8.1%Cash Per Share 1.06 0.30 1.05Net Debt/EBITDA NA 1.59 0.83

Income Statement F2009A F2010E F2011ESales 3825.2 3723.6 4562.5 Growth (y/y) 3.2% -2.7% 22.5%Operating Expenses 3161.8 3045.4 3769.9EBITDA 663.4 678.1 792.6Amortization 204.4 187.3 222.0EBIT 459.0 490.8 570.6Interest, FX & Other (17.9) (15.3) (30.4)EBT 441.1 475.5 540.2Tax Expense (Recovery) 125.2 116.7 172.9Adj. Net Income (Loss) 316.5 328.1 367.4Adj. FD EPS $1.02 $1.12 $1.30

Free Cash Flow Performance F2009A F2010E F2011ECash Flow From Operations 630.2 585.0 557.5Capital Expenditures (69.2) (41.4) (37.0)Free Cash Flow 561.0 543.6 520.5

Balance Sheet F2009A F2010E F2011ECash & ST & LT Investments 343.4 92.5 308.8Goodwill and Intangible Assets 1674.8 2517.4 2517.4Total Assets 3899.9 4639.5 4921.1Debt 283.1 1167.9 967.9Total Liabilities 1624.7 2433.2 2371.6Shareholder's Equity 2275.3 2206.3 2549.4

Investment Thesis

CGI Group Inc. is Canada's largest independent IT services company. The company's revenues are derived from Canada (55-60% of revenues), US (30-35%) and rest of world (5-10%), and split roughly equally between outsourcing and systems integration / consulting. The company generates strong profitability and cash flow, used to date on debt repayment and share buybacks, and continues to evaluate acquisition opportunities.

Sector Outperformer$14.66 Paul Lechem (416-956-6429) [email protected]$18.00 Stephanie Price, CFA (416-594-7047) [email protected]

Revenue Growth vs. Book-to-Bill

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Free Cash Flow4 per. Mov. Avg. (Free Cash Flow)




Company Update

September 17, 2010 Canadian Asset Managers

CI Financial Corp. Returning Lots Of Cash To Shareholders As Growth Slows

CI is the third-largest mutual fund manager in Canada with $63.2 billion in retail AUM. Due to its scale and a management team that is very focused on the bottom line, the company is generating a pre-tax profit margin in excess of 30% and annual free cash flow of more than $300MM.

Growth has become more challenging (AUM is up 0.6% YTD) and management is aggressively returning cash to shareholders. The dividend has been increased by 30% over the past year and roughly $100MM of stock has been repurchased. Further buybacks should be expected.

It was recently announced that Stephen MacPhail will assume the CEO role while Bill Holland will focus on strategic initiatives as Executive Chairman. Sun Life has been a very important partner for CI since 2002, but announced that it is starting its own Canadian mutual fund company in 2010.

CI trades at 16.7x forward 2011 earnings, a premium to other Canadian asset managers at 12.1x and U.S. asset managers at 12.9x. We believe the premium valuation that CI commands is too high given slowing growth. We rate CI Sector Underperformer with an $18.75 price target.







Stock Rating:


Sector Weighting:

Market Weight 12-18 mo. Price Target $18.75 CIX-TSX (9/13/10) $20.34 Key Indices: Toronto

3-5-Yr. EPS Gr. Rate (E) NM 52-week Range $17.69-$22.67 Shares Outstanding 288.1M Float 185.6M Shrs Avg. Daily Trading Vol. 310,000 Market Capitalization $5,860.0M Dividend/Div Yield $0.78 / 3.8% Fiscal Year Ends December Book Value $5.51 per Shr 2011 ROE (E) 20.9% LT Debt $667.7M Preferred Nil Common Equity $1,587.1M Convertible Available No Earnings Per Share Current 2009 $0.95A 2010 $1.09E 2011 $1.22E P/E 2009 21.4x 2010 18.7x 2011 16.7x EBITDA ($ mlns.) 2009 $576.1A 2010 $646.2E 2011 $694.3E EV/EBITDA 2009 10.7x 2010 9.5x 2011 8.9x Company Description CI Financial Corp. is a diversified wealth management firm and one of Canada’s largest independent Canadian-owned investment fund companies.

www.ci.com

Returning Lots Of Cash To Shareholders As Growth Slows - September 17, 2010

39

CI Financial Corp. (CIX-TSX) Sector UnderperformerC$20.34 Paul Holden, CFA (416-594-8417) [email protected]$18.75 Kevin Cheng, CFA (416-956-6676) [email protected]


P/E Multiples 2009A 2010E 2011E Investment Thesis

CI Financial 21.4x 18.7x 16.7xCanadian Asset Managers (ex-CI) 16.5x 14.6x 12.1xU.S. Asset Managers 20.2x 15.5x 12.9x


EBITDA1 656 576 646 694 ROE 19.6% 17.3% 19.4% 20.9%Div idends per Share 1.88 0.62 0.76 0.90 Average Retail AUM 60,218 55,389 62,838 66,735 Total Assets Under Administration 25,675 22,230 21,323 22,097 Gross Sales 11,604 8,575 10,165 11,358 Gross Redemptions 9,851 7,124 8,569 9,541 Chart 1: CI Long term fund net sales ($ MM)Net Sales 1,752 1,451 1,596 1,817

Income Statement ($ mns) 2008A 2009A 2010E 2011E

Revenue 1,512 1,218 1,345 1,430 Oper. Expenses 856 642 699 735 EBITDA 656 576 646 694 Amortization of deferred sales commissions 147 164 173 178 Other amortization 14 7 8 7 EBIT 495 405 465 509 Interest Expense 42 24 16 19 EBT 402 308 408 440 Tax Expense (Recovery) (17) 41 121 124

Net Income 466 245 318 350 Chart 2: Forward P/E*Operating EPS 1.74 0.95 1.09 1.22

Free Cash Flow ($ mns) 2008A 2009A 2010E 2011E

CFO before changes in NWC 565 547 488 536 Less: Commissions Paid (191) (153) (178) (207) Free Cash Flow 374 394 310 329

Free Cash Flow Per Share 1.33 1.35 1.07 1.14 * Forward fiscal year

Current Price : 12- To 18- Mth Price Target:

1 adjusted for equity-based compensation

CI Financial's premium valuation relative to its Canadian mutual fund peers should narrow as net seg fund sales for the industry are expected to be less robust than in the prev ious three years. In addition, given the uncertainty surrounding CI's distribution agreement with Sun Life Financial, CI's AUM growth outlook is less clear.Management believes that the Bank of Nova Scotia (BNS-SP) will remain a passive shareholder in the near-term, which removes some upside potential. BNS owns 36% of CI and is unlikely to complete the CI acquisition during our forecast period.However, we believe a multiple of 15.5x 2011E EPS is appropriate for CI in the absence of any transaction with BNS. A premium versus the other Canadian fund managers is still justified based on CI's scale, profit margins, net sales and management's intention to return a high proportion of free cash flow to shareholders. Our valuation multiple equates to a price of approx imately $18.75.

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Company Update

September 17, 2010 Canadian Media

Cineplex Galaxy Income Fund Tough Box Office Comparables Ahead; Concessions And Media Continue to Grow

Cineplex is the premier film exhibitor in Canada, with a commanding 67% market share of national box office revenues. Cineplex's size and scope constitutes a material barrier to entry, while providing strategic importance with film distributors, concession suppliers, and advertisers.

Canadian box office receipts are up 6.5% year to date, which has translated into strong box office and concession gains for Cineplex this year. While tough comparables will likely temper box office growth in H2, the forward film slate looks promising and positive momentum is expected to continue.

Given the success of 3D, Cineplex continues to ramp its digital rollout plans, with 280 digital projectors installed, of which 236 have 3D technology. Cineplex is targeting ~30% of its screens to be 3D (currently 17%), which strongly positions Cineplex to capitalize on remaining premium 3D releases this year.

With a very conservative payout below 60%, minimal refinancing risk, a healthy balance sheet, and a safe 6% yield, we believe Cineplex remains a solid buy-and-hold income vehicle even as the company moves towards C-corp status in 2011. We rate Cineplex Sector Outperformer.








Stock Rating:

Sector Outperformer

Sector Weighting:

Market Weight 12-18 mo. Price Target $23.00 CGX.UN-TSX (9/13/10) $21.15 Key Indices: S&P/TSX Income Trust Composite

3-5-Yr. EPS Gr. Rate (E) NM 52-week Range $15.50-$21.59 Shares Outstanding 57.0M Float 19.5M Shrs Avg. Daily Trading Vol. 86,419 Market Capitalization $1,205.0M Dividend/Div Yield $1.26 / 6.0% Fiscal Year Ends December Book Value NM 2010 ROE (E) NM LT Debt NA Preferred Nil Common Equity $604.6M Convertible Available Yes Distr. Cash Flow Generated Current 2009 $2.17A 2010 $2.35E 2011 $2.38E Payout Ratio 2009 58.1% 2010 53.6% 2011 52.9% EBITDA ($ mlns.) 2009A $159.9 2010E $172.1 2011E $187.5 EV/EBITDA 2009A 9.2x 2010E 8.5x 2011E 7.8x Company Description Cineplex Entertainment LP is the leading exhibitor of motion pictures in the Canadian entertainment industry. It currently includes 129 theatres and 1,328 screens across Canada. www.cineplexodeon.com

Tough Box Office Comparables Ahead; Concessions And Media Continue to Grow - September 17, 2010

41

Cineplex Galaxy Income Fund (CGX.UN - TSX) Sector Outperformer Current Price : C$21.15 Robert Bek, CFA (416-594-7454) [email protected] 12- To 18- Month Price Target: C$23.00 Tony Rizzi (416-594-7299) Tony [email protected]

Michael Lee, CFA (416-594-7907) [email protected] figures in millions except per share data


Cineplex Galaxy - 9.2x 8.5x 7.8xRegal Entertainment - 7.4x 7.0x 6.3xCinemark Holdings - 7.2x 7.2x 7.2xCarmike Cinemas - 7.7x 6.0x 5.3x


Cineplex Galaxy - 22.3x 17.3x 17.3xRegal Entertainment - 19.8x 19.8x 19.8xCinemark Holdings - 18.4x 13.4x 12.1xCarmike Cinemas - NM NM 11.0x


Distributable Cash Flow Yield 9.6% 11.1% 12.1% 12.2%Payout Ratio 66.9% 58.8% 53.8% 53.2%Long-term Debt / EBITDA 2.3x 2.1x 1.9x 1.8x

Income Statement 2008A 2009A 2010E 2011E Chart 1: Revenues & EBITDA By Segment (2010E)

Revenue 849.7 964.3 1,045.6 1,119.4OpEx 704.7 804.4 873.5 931.9EBITDA 144.9 159.9 172.1 187.5Amortization 67.4 80.4 79.7 82.0EBIT 73.7 77.0 92.0 105.5Net Interest Expense 25.4 23.0 22.7 22.6EBT 34.2 53.9 69.3 82.9Tax Expense (Recovery) (0.3) 1.1 (0.4) 13.3


Distributable Cash Flow 2008A 2009A 2010E 2011E Key Operating Statistics (Last Reported Qtr.)

EBITDA 144.9 159.9 172.1 187.5Less:

Maintenance Capex 11.6 12.5 12.5 12.6Net Interest Expense 25.0 22.2 22.3 22.6Cash Taxes 0.0 0.0 0.0 13.3Other 2.4 2.8 3.6 3.6



We believe that CGX will gain stronger earnings potential as the premium for 3D becomes more apparent over the next few years. CGX is targeting ~30% of its screens to be 3D equipped (currently at 17%), and will become a more visible contributor to top-line growth.

Cineplex is the largest exhbitor in Canada, with a commanding 67% share of national box office revenues, and its size and scope consitutes a material barrier to entry, while providing strategic importance with film distributors, concession suppliers, and advertisers. Cineplex also operates a national in-theater advertising network with 94% market share.

CGX has announced plans for conversion to a corporation on January 1, 2011 maintaining its $1.26 cash distribution and high-yield structure. CGX has a tax pool in excess of $600 million (and can be utilized at a rate of ~9.0% per year) which can be used to shelter its earnings power by offsetting its cash tax liability in the coming years.

We continue to recommend CGX to income-oriented investors, given its material tax pool and strong yield. 3D premiums should also be a catalyst for sustained earnings growth over the longer term.

60.3%45.2%

10.3% 17.0%

37.8%29.4%

0%

25%

50%

75%

100%

Revenues EBITDA

Box Office Concessions Media

Q2/09 Q2/10 y/y GrowthAttendance ('000)Attendance 18,156.0 16,667.0 -8.2%Attendance per Screen 13.7 12.4 -9.2%Box Office Revenue per Patron $8.34 $8.67 4.0%Film Cost % of Revenues 53.8% 54.2%Concessions Revenue per Patron $4.09 $4.36 6.6%Concession Cost % of Revenues 20.4% 20.7%Theatre ScreensAt Period End 1,328 1,342 1.1%




Company Update

September 17, 2010 Canadian Enterprise Software

Constellation Software Inc. Company Profile

Constellation provides software solutions for a number of vertical markets. The company is an active consolidator, making 27 acquisitions since early 2009. Constellation typically acquires small vendors (<$5 million in revenues), and drives operational efficiencies and synergies with existing operations.

In 2009, Constellation made several larger acquisitions (PT Solutions, a division of Medisolution and Integrated Dealer Systems). These companies have sizeable revenues but a history of poor profitability, which Constellation is attempting to reverse.

Despite an active acquisition program, Constellation's balance sheet remains strong ($29 million in net debt/0.3x net debt:EBITDA ratio) and cash flow can support ongoing activity, the pace of which is determined by the availability of suitable targets rather than internal constraints.

Constellation's business model has proven resilient, with 55% of revenues from recurring maintenance fees and a diversified mix of vertical market solutions buffering the business through the downturn. We rate Constellation Sector Outperformer with a C$52 price target.







Stock Rating:

Sector Outperformer

Sector Weighting:

Market Weight 12-18 mo. Price Target C$52.00 CSU-TSX (9/13/10) C$43.50 Key Indices: None

3-5-Yr. EPS Gr. Rate (E) NM 52-week Range C$29.00-C$45.00 Shares Outstanding 21.2M Float 10.0M Shrs Avg. Daily Trading Vol. NM Market Capitalization $897.1M Dividend/Div Yield C$0.26 / 0.6% Fiscal Year Ends December Book Value $5.35 per Shr 2010 ROE (E) 64.0% Net Debt $29.1M Preferred Nil Common Equity $113.4M Convertible Available No Earnings Per Share Current 2009 $2.95A 2010 $3.70E 2011 $4.14E P/E 2009 14.4x 2010 11.5x 2011 10.2x EBITDA ($ mlns.) 2009 $88.1A 2010 $104.5E 2011 $115.6E EV/EBITDA 2009 10.2x 2010 8.6x 2011 7.7x Company Description Constellation Software acquires, manages and builds vertical market software businesses.

www.csisoftware.com


43

Constellation (CSU-TSX)Current Price:

12 to 18 month Price Target: All Figures in US$ mlns, except per share data Key StatisticsShare Price $42.35 Net Cash (Debt) (29.1) Shares Outstanding 21.2 Enterprise Value 926.1 Market Capitalization 897.0


Profitability F2009A F2010E F2011EGross Margin 62.0% 59.1% 60.8%EBITDA 20.1% 17.6% 18.8%Adjusted Net Margin 14.3% 13.2% 14.3%Cash Per Share 1.57 0.69 2.76Net Debt/EBITDA 0.11 0.43 0.01

Income Statement F2009A F2010E F2011ESales 437.9 594.6 614.5 Growth (y/y) 32.5% 35.8% 3.4%Gross Profit 271.3 351.4 373.7Operating Expenses 183.2 246.9 258.1EBITDA 88.1 104.5 115.6Amortization (64.4) (71.3) (72.7)EBIT 20.1 32.5 42.9Interest, FX & Other (6.3) (3.3) (1.8)EBT 17.5 29.9 41.1Tax Expense (Recovery) 7.2 11.8 16.0Adjusted Net Income (Loss) 62.4 78.4 87.8Adj. FD EPS $2.95 $3.70 $4.14

Free Cash Flow F2009A F2010E F2011ECash Flow From Operations 82.6 80.2 94.7Capital Expenditures (3.5) (6.5) (5.0)Free Cash Flow 79.1 73.7 89.7Free Cash Flow Per Share $3.74 $3.48 $4.23

Balance Sheet F2009A F2010E F2011ECash & ST Investments 33.2 14.7 58.4Goodwill and Intangible Assets 228.8 277.9 249.2Total Assets 480.5 529.5 557.4Debt 43.1 59.5 59.5Total Liabilities 372.4 407.8 416.5Shareholder's Equity 108.1 121.8 140.9

Constellation Software acquires, manages and builds vertical market software businesses. The company has built up several business across the public (transit, schools, justice, local governments) and private (home builders, golf clubs) markets. About 60% of the company's revenues are generated from annual maintenance contracts.

We view Constellation's strengths as follows:(1) Operational discipline - balancing profitability and investment for growth(2) Acquisition discipline - with Constellation seeking to find synergistic acquisitions at a reasonable price(3) Capital allocation - with the company repatriating excess capital from the operating units to headquarters where the company can (re-)distribute to the highest return opportunities (be they internal investments or acquisitions)

C$43.50C$52.00

Sector Outperformer

Investment Thesis

Net Revenue Growth62%

51%47%

35%33%28%24%22%

10%16%14%

24%31%29%

35%

47%

34%28%28%

34%42%

50%

-20%-10%

0%10%20%30%40%50%60%70%

Q1-F2005

Q3-F2005

Q1-F2006

Q3-F2006

Q1-F2007

Q3-F2007

Q1-F2008

Q3-F2008

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Q3-F2009

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Organic Growth Acquired GrowthNet revenue growth

Profitability

0%

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Q1-F2005

Q3-F2005

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Q3-F2006

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EBITDA Margin Adjusted Net Margin

Paul Lechem (416) 956-6429 [email protected] Stephanie Price, CFA (416) 594-7047 [email protected]




Company Update


Corus Entertainment Inc. Return Of Ad Spend In Radio And TV Continue To Drive EBITDA Growth

Corus is an integrated Canadian media and entertainment company with strong established brands in television, radio, and content. Corus' primary assets include a variety of specialty TV networks, 50 radio stations, and an international content group specializing in children's programming.

The Television segment, responsible for nearly 70% of revenues, continues to post solid gains, driven by both strong subscriber numbers and advertising growth. This is led largely by the Corus Kids segment, which has seen strengthening ratings and posted double-digit ad gains.

Corus' recent decision to divest its 11 underperforming Quebec radio assets for $80MM is a small positive, as the assets represented an anchor for overall margins, and not a strong strategic fit. With little success improving the economics, selling the stations represents a better use of capital.

Overall, we remain positively inclined towards Corus. With consumer confidence returning and ad tone improving, the outlook appears optimistic. As advertisers return to historical spending levels, the cost-cutting implemented by the company should continue to drive growth in EBITDA.








Stock Rating:

Sector Performer

Sector Weighting:

Market Weight 12-18 mo. Price Target $21.50 CJR.B-TSX (9/13/10) $21.19 Key Indices: Toronto

3-5-Yr. EPS Gr. Rate (E) 8.5% 52-week Range $15.68-$21.43 Shares Outstanding 81.9M Float 79.4M Shrs Avg. Daily Trading Vol. NM Market Capitalization $1,735.1M Dividend/Div Yield $0.60 / 2.8% Fiscal Year Ends August Book Value $11.70 per Shr 2010 ROE (E) NM LT Debt $444.8M Preferred Nil Common Equity $958.2M Convertible Available No Earnings Per Share Current 2009 $1.45A 2010 $1.55E 2011 $1.64E P/E 2009 14.6x 2010 13.7x 2011 12.9x EBITDA ($ mlns.) 2009A $251.2 2010E $266.8 2011E $287.9 EV/EBITDA 2009A 9.4x 2010E 8.9x 2011E 8.2x Company Description Corus Entertainment Inc. is one of Canada's largest radio broadcasters, and among the leaders in specialty TV and children's programming. The Shaw family controls Corus. www.corusent.com

Return Of Ad Spend In Radio And TV Continue To Drive EBITDA Growth - September 17, 2010

45

Corus Entertainment Inc. (CJR.B - TSX) Sector Performer Current Price: C$21.19 Robert Bek, CFA (416-594-7454) [email protected] 12- To 18- Month Price Target: C$21.50 Tony Rizzi (416-594-7299) Tony [email protected]



Corus Entertainment - 9.4x 8.9x 8.2xAstral Media - 9.6x 9.0x 8.5xU.S. Specialty TV Peers - 13.9x 11.0x 9.7xU.S. Media Conglomerate Peers - 8.9x 7.6x 7.0x


Corus Entertainment - 14.6x 13.7x 12.9xAstral Media - 13.7x 13.1x 12.0xU.S. Specialty TV Peers - 27.8x 21.5x 18.4xU.S. Media Conglomerate Peers - 20.5x 14.1x 12.3x


Free Cash Flow Yield 8.0% 6.4% 2.6% 5.8%Payout Ratio 38.0% 50.4% 135.1% 59.7%Net Debt / EBITDA 2.7x 2.6x 2.5x 1.9xEffective Tax Rate 20.9% 1288.3% 23.4% 32.0%


Revenue 787.2 788.7 839.2 891.0OpEx 535.0 537.6 572.4 603.1EBITDA 252.1 251.2 266.8 287.9Depreciation 22.1 20.7 23.6 28.0EBIT 230.1 230.5 243.2 259.9Interest Expense 41.3 37.4 46.8 54.2EBT 170.0 4.4 185.3 205.7Tax Expense 35.5 56.4 43.4 65.8

Net Income 129.8 (56.6) 135.6 133.6Adj. FD EPS 1.40 1.45 1.55 1.64

Free Cash Flow 2008A 2009A 2010E 2011E Key Operating Statistics (Last Reported Qtr.)

EBITDA 252.1 251.2 266.8 287.9Plus: Program & Film Rights Amortization 174.1 185.1 195.3 175.0Less:

Program & Film Rights Payment 198.2 232.5 225.8 215.0Capex 17.6 22.5 87.9 30.0Cash Taxes 42.8 42.7 61.6 73.0Cash Interest 41.3 37.4 46.8 54.2

Operating Free Cash Flow (FCF) 126.3 101.1 40.0 90.7Operating FCF Per Share 1.50 1.27 0.49 1.11

Corus offers investors a diversified revenue stream, generating a large portion of sales (~33%) from subscriber-related affiliate fees which are more stable than ad revenues, giving good downside protection.As Canada's 2nd largest radio operator, Corus' dominant position helps reduce volatility associated with the cyclical nature of the business.

The Television segment continues to post solid gains, driven by strong conditions at Corus Kids, the development of new specialty channels, and increased penetration of digital boxes. Radio is showing solid signs of recovering, and we expect the positive pace to continue as ad markets improve.

Overall, we continue to see many positives to the story for Corus in F2010. While ad visibility is a concern, consumer confidence has increased and ad tone has improved, and the outlook for F2010 appears more optimistic.

Corus is a Canadian based media and entertainment company with interests in radio broadcasting, television broadcasting, and the production and distribution of children's media content. The principle assets include 50 radio stations; a variety of pay and specialty TV networks; and Nelvana, an international kids content producer/distributor.

68.8% 78.0%

31.2% 22.0%

0%

25%

50%

75%

100%

Revenues EBITDA

Television Radio

Q3/09 Q3/10 y/y GrowthTelevision Revenues Kids 50.3 57.4 14.1%Specialty and Pay 79.5 89.6 12.7%Radio Revenues West 25.1 25.1 0.3%Ontario 20.5 24.5 19.1%Quebec and Other 19.9 21.8 9.6%Movie Central ('000)Subscribers 951.0 970.0 2.0%Net Additions 30.0 (3.0) NM




Company Update

September 17, 2010 Canadian Enterprise Software

Descartes Systems Group Inc. Company Profile

Descartes provides IT solutions to the logistics industry (freight booking, shipment tracking, etc.). In recent years, Descartes expanded into the trade and compliance market (automating customs filings) and is increasing its focus on mobile resource management (truck routing and scheduling).

The economic downturn reduced shipping volumes significantly, impacting Descartes' transaction-based revenues. However the company continued to grow its business, given acquisitions and new product sales. Descartes now sees shipping volumes stabilizing.

The company recently deployed ~$40 million to acquire Porthus, positioning itself for the upcoming pan-European customs filing standard. This is a sizable purchase, but Descartes is likely to continue with further acquisitions through the year, as its cash position remains strong.

Going forward, we expect Descartes to become more aggressive in building out its compliance and routing & scheduling businesses. We foresee further upside as the company pursues its growth strategy. We rate Descartes Sector Outperformer with a $7.50 price target.







Stock Rating:

Sector Outperformer

Sector Weighting:

Market Weight 12-18 mo. Price Target $7.50 DSGX-OTC (9/13/10) $6.11 Key Indices: NASDAQ

3-5-Yr. EPS Gr. Rate (E) 10.0% 52-week Range $4.49-$6.76 Shares Outstanding 61.5M Float 60.0M Shrs Avg. Daily Trading Vol. 20,000 Market Capitalization $375.6M Dividend/Div Yield Nil / Nil Fiscal Year Ends January Book Value $3.10 per Shr 2010 ROE (E) 13.1% Net Cash $58.50M Preferred Nil Common Equity $190.5M Convertible Available No EBITDA ($ mlns.) Current 2010 $19.3A 2011 $25.1E 2012 $31.7E EV/EBITDA 2010 16.6x 2011 12.7x 2012 10.1x Earnings Per Share 2010 $0.36A 2011 $0.40E 2012 $0.51E P/E 2010 17.0x 2011 15.3x 2012 12.0x Company Description A provider of messaging and value-added IT solutions to the logistics and transportation markets.

www.descartes.com


47

All Figures in US$ mlns., except per share data Key StatisticsShare Price $6.11 Net Cash (Debt) 58.5 Shares Outstanding 61.5 Enterprise Value 317.13 Market Capitalization 375.65


Profitability F2010A F2011E F2012EGross Margin 68.6% 66.8% 68.5%EBITDA Margin 27.5% 25.8% 26.7%Net Margin 19.5% 4.7% 9.4%Cash Per Share $0.28 $0.20 $0.16Net Debt/EBITDA NA NA NA

Income Statement F2010A F2011E F2012ESales 73.8 97.5 119.0 Growth (y/y) 11.7% 32.2% 22.0%Gross Profit 50.6 65.2 81.5Operating Expenses 35.6 43.2 52.7Adjusted EBITDA 20.3 25.1 31.7Amortization (8.8) (13.5) (12.5)Interest 0.3 0.2 0.2EBT 6.7 8.0 18.5Tax Expense (Recovery) (7.6) 3.4 7.2Net Income (Loss) 14.4 4.6 11.2Adj. FD EPS $0.36 $0.40 $0.51


Balance Sheet F2010A F2011E F2012ECash & ST Investments 94.6 46.8 42.7Goodwill & Amortization 55.5 109.7 129.2Total Assets 208.2 223.6 240.3Debt 0.0 0.0 0.0Total Liabilities 20.3 30.0 34.1Shareholder's Equity 187.9 193.6 206.2


Investment ThesisDescartes is a provider of value-added IT solutions to the logistics and transportation markets. The company primarily offers its solutions through a pay-for-use arrangement rather than up-front license fees. We see growth opportunities in several areas:1) introducing new services, including customs import/export filiings;2) consolidating a highly fragmented market;3) increasing customer share of wallet, converting in-house processing to a (Descartes) outsourced offering.

Cash / Free Cash Flow

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(20)

(15)

(10)

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Net cash Free cash flow

Quarterly Revenues

05

1015202530

Q1-F200

0

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even

ues

($m

lns.

)-40%-20%0%20%40%60%80%

Y/Y

Gro

wth

(%)

Total Revenues y/y growth

Descartes (DSGX-OTC)Current Price: 12 to 18 month Price Target:




Company Update

September 17, 2010 Consumer Products

Dorel Industries, Inc. Company Profile

Dorel operates in three distinct segments: juvenile, recreational/leisure and home furnishings. The company has a diversified sales mix, with a strong presence in North America and Europe, as well a growing presence in a number of other markets, including Asia, Australia and South America.

Dorel is the world’s largest manufacturer of car seats and produces a wide array of other juvenile products. Its mid- to high-end product assortment in Europe has struggled, but North America has performed well in a tough environment. Dorel Brazil is a new division that is growing quickly.

The recreational/leisure segment boasts some of the world’s most popular bike brands (e.g., Cannondale, Schwinn) and is performing well, growing mainly in the independent dealer channel. The home furnishings segment has stabilized and remains a top two producer of RTA furniture.

Despite a tough environment, particularly in Europe, the company has been able to leverage its strong brand names and new product launches to help drive organic growth so far in 2010.






Stock Rating:

Not Rated

Sector Weighting:

Market Weight 12-18 mo. Price Target None DII.B-TSX (9/13/10) $34.15 Key Indices:

3-5-Yr. EPS Gr. Rate (E) NM 52-week Range $28.00-$39.35 Shares Outstanding 33.0M Float 33.0M Shrs Avg. Daily Trading Vol. 63,422 Market Capitalization $1,125.3M Dividend/Div Yield 0.62/ 1.8% Fiscal Year Ends December Book Value $34.42 per Shr 2010 ROE (E) LT Debt Preferred Common Equity Convertible Available Earnings Per Share Current 2009 US$3.21A 2010 - 2011 - P/E 2009 10.8x 2010 NM 2011 NM Company Description Dorel Industries, Inc. is a vertically integrated consumer products manufacturer focusing on three market segments: juvenile products, recreational/leisure and home furnishings. www.dorel.com

Company Profile – September 17, 2010

49

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Company Update


FirstService Corporation Company Profile

FirstService provides property-related services through three divisions: commercial real estate brokerage (Colliers), residential property management, and property services, including franchise operations and Field Asset Services (FAS), a manager of foreclosed properties.

Transaction volumes at Colliers fell during the credit crisis. FirstService responded by cutting $52 million in costs in the division and reducing broker commissions. Today, the division is seeing operating leverage as markets improve, with margins up +400 bps year over year in Q2.

FAS saw strong growth during the U.S. housing downturn, growing from $8 million LTM EBITDA on acquisition in October 2007 to ~$50 million. However, growth has slowed in the division (-2% year over year in Q2) as government loan modification programs lengthen the foreclosure process.

While short-term results could be lumpy (given U.S. economic uncertainty, slower FAS growth), longer term, we expect FirstService to benefit from recent cost cuts, plus the Colliers rebranding (and expanded product offering). We rate FirstService Sector Outperformer with a C$31.50 PT.







Stock Rating:

Sector Outperformer

Sector Weighting:

Market Weight 12-18 mo. Price Target C$31.50 FSV-TSX (9/13/10) C$23.19 Key Indices: NASDAQ, Toronto

3-5-Yr. EPS Gr. Rate (E) 10.0% 52-week Range C$17.50-C$24.96 Shares Outstanding 29.9M Float 23.0M Shrs Avg. Daily Trading Vol. NM Market Capitalization $675.2M Dividend/Div Yield Nil / Nil Fiscal Year Ends December Book Value $6.07 per Shr 2010 ROE (E) NM Net Debt $236.0M Preferred $144.31M Common Equity $181.5M Convertible Available No Earnings Per Share (FD) Current 2009 $1.42A 2010 $1.79E 2011 $2.18E P/E (FD) 2009 15.9x 2010 12.6x 2011 10.4x EBITDA ($ mlns.) 2009 $133.1A 2010 $161.1E 2011 $184.8E EV/EBITDA 2009 8.9x 2010 7.4x 2011 6.4x Company Description FirstService Corporation is a leading provider of property, business and commercial real estate services to consumers and corporations in North America.

www.firstservice.com


51

FirstService Corp. (FSV-TSX)Current Price (C$):

12 to 18 month Price Target: All Figures in $US millions, except per share data Key Statistics Investment ThesisShare Price (USD) $22.85 Net Cash (Debt) (236.2) Shares Outstanding 29.8 Preferred Shares (144.3) Market Capitalization $680.9 Minority Interest (165.7)

Key Multiples C2009A C2010E C2011EP/E 16.1x 12.8x 10.5xEV/EBITDA 9.2x 7.6x 6.6xPeers (Average)P/E 31.7x 26.2x 16.2xEV/EBITDA 11.7x 10.4x 8.6x

Profitability C2009A C2010E C2011EGross Margin 37.6% 38.1% 39.3%Adjusted EBITDA 7.8% 8.3% 9.0%Adjusted Net Margin 2.5% 2.8% 3.2%Cash Per Share $1.08 $0.87 $0.53Net Debt/EBITDA 1.60 1.26 0.64

Income Statement C2009A C2010E C2011ESales 1703.2 1935.8 2045.1 Growth (y/y) 0.1% 13.7% 5.6%Gross Profit 640.8 737.8 803.0Operating Expenses 526.7 579.8 621.1Adjusted EBITDA 133.1 161.1 184.8Amortization (76.4) (44.3) (50.8)Interest, FX & Other 6.4 15.7 12.8Earnings Before Tax/Minority Interest 520.3 564.1 608.3Tax Expense (Recovery) 39.1 32.1 37.8Adj. Net Income 41.9 53.6 66.3Adj. FD EPS $1.42 $1.79 $2.18

Free Cash Flow C2009A C2010E C2011ECash Flow From Operations 81.0 69.3 114.6Capital Expenditures (24.2) (32.8) (20.0)Free Cash Flow 56.8 36.5 94.6Free Cash Flow Per Share $1.93 $1.22 $3.12

Balance Sheet C2009A C2010E C2011ECash & ST Investments 99.8 123.0 207.4Goodwill & Intangibles 504.8 519.3 498.4Total Assets 1009.5 1058.1 1129.9Debt 313.0 326.4 326.4Total Liabilities 843.5 836.9 838.4Shareholder's Equity 166.0 221.3 291.6

FirstService is a leading provider of property, business and commercial real estate services to consumers and corporations.

The company was impacted by the global slowdown in real estate, with the impact seen mostly in its commercial real estate division. Its residential property management division has proven resilient, and a slowdown in franchise operations in its property services division was offset by superb results from its home foreclosure services business, Field Asset Services.While commercial real estate markets are unlikely to recover materially until well into 2010, FirstService has now shifted focus from cost cutting and retrenchment to a more growth-oriented stance.

Sector Outperformer$23.19 Stephanie Price, CFA (416-594-7047) [email protected]$31.50 Paul Lechem (416-956-6429) [email protected]

Quarterly Revenues by Division

050

100150200250300

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03

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03

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09$m

lns.

Commercial Real EstateResidential Property ManagementProperty Services

Quarterly EBITDA Margin by Division

(15%)(10%)

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Q2-F20

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Commercial Real EstateResidential Property ManagementProperty Services




Company Update


GENIVAR Income Fund Company Profile

GENIVAR provides engineering and design services to the Canadian market. On IPO in 2006, roughly 90% of revenues were derived from Quebec; by 2009, this percentage had decreased to 54%, with the remainder mainly split between Ontario and Western Canada.

The company continues to build out its presence, completing six acquisitions year to date, adding over 400 people. Typical acquisitions are completed at relatively low multiples (3x-5x EBITDA) and the company's partnership (owns ~33% of the fund) is a compelling retention mechanism.

GENIVAR has delivered best-in-class revenue growth and profitability throughout the downturn. Internal growth of 5% in Q2 compares favourably with comparables (e.g., IBI -14%, Stantec -2%, ex-FX). EBITDA margins of 19% are also strong versus comparables (e.g., IBI 14%, Stantec 15%).

Given the significant acquisition activity already completed in H1/10, a healthy pipeline of further acquisitions and "active" proposal activity in all regions, we expect GENIVAR to continue to see solid growth through H2. We rate GENIVAR Sector Outperformer with a $33 price target.







Stock Rating:

Sector Outperformer

Sector Weighting:

Market Weight 12-18 mo. Price Target $33.00 GNV.UN-TSX (9/13/10) $27.72 Key Indices: None

3-5-Yr. AFFO Gr. Rate NA 52-week Range $24.56-$29.26 Units Outstanding 27.2M Distr. Frequency Monthly Avg. Daily Trading Vol. 160,000 Market Capitalization $753.0M DCF Value/Distr. Yield NA / NA Fiscal Year Ends December Book Value $10.33 per Unit 2010 D/CF NM Net Debt $9.7M Net Asset Value NM Common Equity $280.6M Convertible Available No Distr. Cash Flow Generated Current 2009 $2.56A 2010 $2.73E 2011 $2.69E Payout Ratio 2009 68.4% 2010 64.1% 2011 55.8% EBITDA ($ mlns.) 2009 $78.6A 2010 $89.0E 2011 $100.9E EV/EBITDA 2009 9.3x 2010 8.2x 2011 7.3x Company Description GENIVAR provides engineering, project management and environmental consulting services to a variety of end markets across Canada.

www.genivar.com


53

Current Price:

12 to 18 month Price Target:

All Figures in $ millions, except per share data

Key StatisticsShare Pr ice $27.72 Net Cash (Debt) (9.7) Shares Outstanding 26.2 Enterprise Va lue 735.0Market Capita liza tion 725.3

Key Multiples F2009A F2010E F2011EP/E 13.4x 13.3x 13.6xEV/EBITDA 9.4x 8.3x 7.3xPeers (Average)P/E 14.0x 18.4x 11.5x

EV/EBITDA 8.0x 6.8x 5.6x

Profitability F2009A F2010E F2011EGross Margin 50.3% 49.4% 50.0%EBITDA Margin 19.9% 18.9% 20.0%Net Margin 7.9% 8.0% 10.6%Cash Per Share $2.15 $0.13 $0.00Net Debt/EBITDA NA $0.00 $0.00

Income Statement F2009A F2010E F2011ENet revenues 395.3 470.0 504.7 Growth (y/y) 23.5% 18.9% 7.4%Gross Profit 198.7 231.9 252.4Operating Expenses 120.1 142.9 151.4Amortization (23.3) (26.2) (27.0)EBITDA 78.6 89.0 100.9Interest, FX & Other (1.9) (1.4) (2.6)EBT 53.3 61.5 71.3Tax Expense (Recovery) (3.3) (3.9) (17.8)Net Income (Loss) 50.1 57.5 53.5

Adj. FD EPS $2.07 $2.09 $2.04Adjusted Distributable Cash 61.7 74.2 70.5Adjsuted DCPU $2.56 $2.73 $2.69Cash distributions declared 48.7 47.5 39.2Payout Ratio 78.9% 64.1% 55.7%


Balance Sheet F2009A F2010E F2011ECash & ST Investments 51.9 3.6 0.0Goodwill & Amortiza tion 248.9 288.6 320.6Total Assets 533.1 564.2 612.5Debt 6.0 32.8 61.1Total Liabilities 255.7 280.7 314.7Shareholder's Equity 277.4 283.5 297.8

$27.72$33.00

Sector Outperformer

Investment ThesisGENIVAR provides engineering, project managment and environmental consulting services to a variety o f end markets across Canada.

The company has been expanding westward from its Quebec base, diversifying its business from 90%+ Quebec focused on IPO in 2006 to current 55% Quebec, with the remainder split between Ontario and western Canada.

The company remains highly acquisitive, completing 14 acquisitions in 2008 and 13 YTD in 2009.

End market focus is public sector (60% municipa l infrastructure / transportation). GENIVAR has limited residential or commodity exposure.

Gross Revenue Growth

020406080

100120140160

Q3-F200

6

Q4-F20

06

Q1-F20

07

Q2-F20

07

Q3-F200

7

Q4-F20

07

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08

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08

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8

Q4-F20

08

Q1-F20

09

Q2-F20

09

Q3-F20

09

Q4-F2009

Q1-F20

10

Q2-F20

10Gro

ss R

even

ues

($m

lns.

)0%10%20%30%40%50%60%70%

Gro

ss R

ev G

row

th (%

)

Gross RevenuesTotal Revenue GrowthAcquired Revenue Growth

Backlog vs. NTM Gross Revenues

0100200300400500600700

Q3-F20

06

Q4-F200

6

Q1-F20

07

Q2-F2007

Q3-F20

07

Q4-F200

7

Q1-F20

08

Q2-F20

08

Q3-F20

08

Q4-F20

08

Q1-F20

09

Q2-F20

09

Q3-F200

9

Q4-F20

09

Q1-F2010

Q2-F20

10

($ m

lns.

)

0246810

Mon

ths

of W

ork

BacklogNTM gross revenuesBacklog vs. NTM months of work

Paul Lechem (416) 956-6429 [email protected] Stephanie Price, CFA (416) 594-7047 [email protected]

GENIVAR (GNV.UN-TSX)




Company Update

September 17, 2010 Canadian Property & Casualty Companies

Genworth MI Canada Inc. Plenty Of Capital And Expanding Earnings

Genworth is the largest private mortgage insurance company in Canada, with a market share of ~25% and over $230 billion of insurance in-force. The company generated an average annual ROE of 15% with an average claims loss ratio of 25% from 1997-2009.

Operating EPS and ROE have improved in each of the last four quarters due to a lower claims loss ratio. A decline in the unemployment rate from a peak of 8.7% in August 2009 to 8.1% in August has resulted in fewer mortgage delinquencies. We expect the loss ratio to improve further through 2011.

Genworth is very well capitalized, providing it with the flexibility to return cash to shareholders. The company recently completed a $325MM Dutch auction at a clearing price of $26.40. In addition, we anticipate that Genworth will increase its dividend within the next two quarters.

A mild home price correction of 5%-10% should have limited impact on Genworth's financial results. Genworth currently trades at 1.0x our 2011 BVPS estimate. Our analysis suggests that a P/BV multiple of 1.25x is more appropriate leading to our $33 price target and SO rating.







Stock Rating:

Sector Outperformer

Sector Weighting:

Market Weight 12-18 mo. Price Target $33.00 MIC-TSX (9/13/10) $26.20 Key Indices: Toronto

3-5-Yr. EPS Gr. Rate (E) NM 52-week Range $22.16-$30.50 Shares Outstanding 112.1M Float 49.7M Shrs Avg. Daily Trading Vol. 150,000 Market Capitalization $2,937.0M Dividend/Div Yield $0.88 / 3.4% Fiscal Year Ends December Book Value $24.85 per Shr 2011 ROE (E) 15.6% LT Debt $275.0M Preferred Nil Common Equity $2,785.4M Convertible Available No Earnings Per Share Current 2009 $2.55A 2010 $2.88E 2011 $3.12E P/E 2009 10.3x 2010 9.1x 2011 8.4x Book Value Per Share 2009 $22.40A 2010 $24.27E 2011 $26.47E P/BVPS 2009 1.2x 2010 1.1x 2011 1.0x Company Description Genworth MI Canada Inc. is the largest private mortgage insurance company in Canada, with over $230 billion of insurance in-force.

www.genworth.ca

Plenty Of Capital And Expanding Earnings - September 17, 2010

55

Genworth Canada Inc. (MIC - TSX) Sector OutperformerC$26.20 Paul Holden, CFA (416-594-8417) [email protected]

12- To 18- Mth Price Target: C$33.00 Kevin Cheng, CFA (416-956-6676) [email protected] figures in millions except per share dataP / BV Multiples Last 2010E 2011E Investment ThesisGenworth Canada 1.1x 1.1x 1.0xCanadian P&C 1.1x 1.1x 1.1xU.S. Total P&C 1.0x 0.9x 0.9x


DWP Growth (Y/Y) -27.6% -48.2% 13.9% -6.0%Claims Loss Ratio 30.9% 36.0% 33.0% 26.9%Expense Ratio 14.3% 13.1% 15.6% 17.1%Combined Ratio 45.3% 49.1% 48.6% 44.0%Delinquency Rate 0.25% 0.28% 0.21% 0.16% Chart 1: Direct Written Premiums ($ mlns.) Severity Ratio 26% 27% 26% 26%ROE - Operating 16.9% 12.3% 12.3% 12.3%BVPS $18.48 $22.40 $24.27 $26.47BVPS (ex. AOCI) $18.60 $21.58 $23.13 $25.32

Income Statement 2008A 2009A 2010E 2011E

Net Premiums Earned 517.6 709.9 595.7 541.9Losses On Claims 160.0 255.8 196.8 146.0Other Underwriting Costs 74.3 93.2 92.7 92.6Underwriting Income 283.6 361.1 306.3 303.2Interest Income 185.7 177.1 168.6 180.4 Chart 2: Industry Mortgage Delinquency Vs. UnemploymentOther Income 14.4 12.0 6.0 9.1Amortization and Interest Expense 7.9 5.9 12.9 20.3EBT 475.8 544.3 468.0 472.4Tax Expense (Recovery) 140.3 165.6 139.4 141.7

Net Income 335.5 378.7 328.6 330.7Operating EPS 2.73 2.55 2.88 3.12GAAP EPS 2.84 3.21 2.89 3.12

Investment Performance 2008A 2009A 2010E 2011EEnding Assets 4,152.7 4,409.8 4,185.0 4,197.0Div idend and Interest Income 185.7 177.1 168.6 180.4Average Income Yield 4.5% 4.1% 3.9% 4.3%Capital Gains/(Losses) 18.7 11.6 2.9 0.0Average Investment Yield 4.9% 4.4% 4.0% 4.3%

We believe that the structural elements of the Canadian mortgage industry will support long term ROEs of 15% -20% . Genworth's average ROE from 1997-2009 was approx imately 15% .We expect the company to post solid earnings over our forecast horizon based on premiums that have already been written and an improving loss ratio attributable to lower unemployment.In this context, Genworth is undervalued in our opinion. Genworth is trading at 1.1x P/BV and 8.4x 2011E EPS. We believe a more appropriate valuation is 1.25x BV, equal to a P/E of 10.6x.

Current Price :

0

200

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1,200

2004 2005 2006 2007 2008 2009 2010E 2011E

0.2%

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0.6%

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00

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Delinquency Rate Canada Unemploy ment Rate




Company Update

September 17, 2010 Diversified Financials

Home Capital Group Inc. Company Profile

Home Capital operates through its principal subsidiary, Home Trust Company, which offers mortgage lending, consumer lending, deposit services and various other financial services. Operating EPS in H1/10 were $2.45, up 26.3% from $1.90 reported during H1/09.

Credit losses improved in H1/10 as impaired loans (as a % of gross loans) totaled 0.7% at the end of Q2/10 compared to 1.3% a year ago. Robust asset growth continued with total assets under administration expanding to $13.3 billion, up 15.6% over $11.5 billion at December 2009.

Home Capital’s ROE through H1/10 was an impressive 27.4%. The company’s capital position remains strong as its tier 1 capital ratio was 16.7% at the end of Q2/10. On August 30, the company announced an NCIB for up to 10% of its public float.

Currently, Home Capital trades at 2.4x price-to-book, a notable discount compared to the 3.4x average since 1999. Consensus estimates for book value are $20.81 and $24.59 in 2010 and 2011, implying growth of 22.4% and 18.2%, respectively.






Stock Rating:

Not Rated

Sector Weighting:

Market Weight 12-18 mo. Price Target None HCG-TSX (9/13/10) $44.50 Key Indices: Toronto

3-5-Yr. EPS Gr. Rate (E) NM 52-week Range $35.10-$48.54 Shares Outstanding 34.7M Float 31.3M Shrs Avg. Daily Trading Vol. 64,000 Market Capitalization $1,542.8 Dividend/Div Yield $0.64 / 1.4% Fiscal Year Ends December Book Value $18.78 per Shr 2011 ROE (E) NA LT Debt NA Preferred Nil Common Equity $651.2M Convertible Available No Earnings Per Share Current 2007 $2.59A 2008 $3.13A 2009 $4.15A P/E 2007 17.2x 2008 14.2x 2009 10.7x Book Value Per Share 2007 $10.08A 2008 $12.57A 2009 $17.00A P/B 2007 4.4x 2008 3.5x 2009 2.6x Company Description Home Capital Group Inc. is a holding company which operates through its main subsidiary, Home Trust Company. Home Trust offers deposit services, mortgage lending, and credit card issuing services. www.homecapital.com


57




Company Update


IBI Income Fund Company Profile

IBI is an architecture, engineering and design company with operations in Canada, the U.S. and internationally. Its specialty is urban development - planning, design, and engineering for land planning, buildings, transportation and other urban systems.

IBI grew rapidly from its 2004 IPO, more than tripling its size by the end of 2008. However, it entered the downturn with a focus on the private sector, high debt levels and excess workforce. IBI has since extended /increased its credit lines, right-sized staff and refocused on public sector work.

IBI has recently seen weak organic growth (-14% Y/Y in Q2). However, management is seeing improving public and private markets, especially P3 health and education markets. IBI recently made a key move to expand its healthcare practice with the acquisition of U.K.-based Nightingale.

While organic growth has been slow, we expect improvements as recent project wins (including MUHC) begin to ramp up. IBI has yet to announce its dividend policy post conversion - we expect a distribution cut to ~$1.12/sh. We rate IBI Sector Outperformer with a $16 price target.







Stock Rating:

Sector Outperformer

Sector Weighting:

Market Weight 12-18 mo. Price Target $16.00 IBG.UN-TSX (9/13/10) $13.16 Key Indices: None

3-5-Yr. AFFO Gr. Rate NA 52-week Range $12.16-$17.98 Units Outstanding 17.9M Distr. Frequency Monthly Avg. Daily Trading Vol. NM Market Capitalization $235.1M DCF Value/Distr. Yield $17.74 / NA Fiscal Year Ends December Book Value $8.00 per Unit 2010 D/CF NM Net Debt $63.0M Net Asset Value NM Common Equity $143.1M Convertible Available No Distr. Cash Flow Generated Current 2009 $1.77A 2010 $1.76E 2011 $1.66E Payout Ratio 2009 90.4% 2010 90.9% 2011 67.5% EBITDA ($ mlns.) 2009 $44.5A 2010 $43.5E 2011 $52.7E EV/EBITDA 2009 6.8x 2010 7.0x 2011 5.8x Company Description IBI Income Fund is a design firm focused on urban development, providing services in planning, design, implementation, analysis and other services across North America and internationally. www.ibigroup.com


59

Current Price: 12 to 18 month Price Target:

All Figures in $ millions, except per share data Key StatisticsShare Price Net Cash (Debt) (63.0) Basic Shares Outstanding 17.9 Enterprise Value $298.17Market Capitalization $235.14


Profitability F2009A F2010E F2011EEBITDA Margin 16.3% 15.0% 16.2%Net Margin 3.4% 4.3% 4.5%Cash Per Share $0.41 $0.58 $0.00Net Debt/EBITDA 1.70 1.50 1.71

Income Statement F2009A F2010E F2011ESales 273.7 290.9 325.0 Growth (y/y) 15.1% 6.3% 11.7%Operating Expenses 229.2 247.4 272.3Amortization (12.7) (11.5) (12.5)EBITDA 44.5 43.5 52.7Interest, FX & Other (11.9) (11.0) (12.4)Earnings Before Tax 19.9 21.0 27.8Provisions For Tax & Discontinued Ops 7.3 8.5 13.1Net Income (Loss) 12.5 12.5 14.7EPU $0.76 $0.98 $1.13Distributable cash 30.3 31.5 30.3DCPU $1.77 $1.76 $1.66Cash distributions 27.6 28.6 20.4Cash distributions per unit $1.61 $1.60 $1.12Payout ratio 91.1% 90.8% 67.3%

Free Cash Flow F2009A F2010E F2011ECash Flow From Operations (6.6) 17.6 18.5Capital Expenditures (1.8) (2.5) (3.0)Free Cash Flow (8.4) 15.0 15.5Free Cash Flow Per Share NA $0.71 $0.71

Balance Sheet F2009A F2010E F2011ECash & ST Investments 6.9 12.2 0.0Goodwill & Intangibles 183.3 198.0 209.4Total Assets 417.0 451.7 467.9Debt 82.3 77.2 90.0Total Liabilities 272.5 310.7 327.2Shareholder's Equity 144.5 141.0 140.7

IBI Income Fund is a design firm focused on urban development, providing services in planning, design, implementation, analysis and other services across North America and internationally.

The company has repositioned itself to weather the downturn by focusing on public sector work (65% of revenues), reducing excess staff, and bolstering its financial situation by increasing/extending its lines of credit and issuing equity.

$13.16

Sector Outperformer$13.16 $16.00

Investment Thesis

Revenue Growth

-20%-10%

0%10%20%30%40%50%60%70%

Q1-F200

5

Q3-F2005

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6

Q3-F20

06

Q1-F20

07

Q3-F20

07

Q1-F20

08

Q3-F20

08

Q1-F2009

Q3-F200

9

Q1-F2010

Rev

enue

Gro

wth

Organic growth Acquired growth

Net Debt(90)(80)(70)(60)(50)(40)(30)(20)(10)

0

Q3-F20

04

Q1-F20

05

Q3-F20

05

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06

Q3-F20

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10

Net

cas

h (d

ebt)

($m

lns.

)

0.00.51.01.52.02.53.03.5

Net

deb

t : E

BITD

A

Net cash (debt) Net debt:EBITDA

IBI Income Fund (IBG.UN-TSX)Paul Lechem (416) 956-6429 [email protected]

Stephanie Price, CFA (416) 594-7047 [email protected]




Company Update

September 17, 2010 Industrials/Capital Equipment

IESI - BFC Ltd. Company Profile

IESI-BFC Ltd. is the third-largest vertically integrated provider of non-hazardous solid waste collection, recycling and landfill disposal services in North America for commercial, industrial and residential customers operating in the U.S. South, U.S. Northeast and Canada.

The solid waste management business is considered relatively recession-resistant; however, the recession has impacted each segment in various ways. Management has been able to offset the negative impact of the recent downturn through organic revenue growth and strategic acquisitions.

BIN implements a bottom up management style, focusing on developing strong collection operations and gaining a significant market share in dense, urban markets. This strategy has resulted in BIN generating 10% compounded annual organic revenue growth since 2005.

After the July 2 closing of the WSI acquisition, 2010E pro-forma revenues are estimated to be $1.4 billion. Management estimates the WSI acquisition should provide $25 million-$30 million in pre-tax synergies. We believe management's estimate of potential synergies is conservative.







Stock Rating:

Sector Performer

Sector Weighting:

Market Weight 12-18 mo. Price Target $26.00 BIN-NYSE (9/13/10) $23.79 Key Indices: None

3-5-Yr. EPS Gr. Rate (E) 11.5% 52-week Range $12.47-$24.27 Shares Outstanding 121.6M Float 112.1M Shrs Avg. Daily Trading Vol. 284,810 Market Capitalization $2,892.9M Dividend/Div Yield $0.48 / 2.0% Fiscal Year Ends December Book Value $11.19 per Shr 2010 ROE (E) NM Net Debt $1,034.3M Preferred Nil Common Equity $1,361.0M Convertible Available No Earnings per Share Current 2009 $0.71A 2010 $0.97E 2011 $1.09E P/E 2009 33.5x 2010 24.5x 2011 21.8x EV/EBITDA Current 2009A 13.6x 2010E 9.6x 2011E 7.4x Company Description IESI-BFC Ltd. is a full-service waste management company providing non-hazardous solid waste collection, transfer, recycling and landfill disposal services in Canada and the U.S. www.bficanada.com/


61

IESI-BFC Ltd. (BIN-NYSE) Sector Performer Current Price: $23.79 12- To 18-Month Price Target: $26All Figures in USD$ millions, except per share data unless otherwise stated USD:CAD 1.0279 13-Sep-10

Key Multiples 2010E P/E2010E

EBITDA 2011E P/E2011E

EBITDA

IESI-BFC Ltd. 24.8x 9.6x 22.1x 7.4xLarge Waste & Disposal Companies 17.1x 7.5x 14.8x 7.0xMedium Waste & Disposal Companies 20.9x 9.3x 19.8x 8.4xEnvironmental Services Comps 20.8x 8.4x 18.2x 8.0x

Historical P/ 1yr EPS 31.1xHistorical EV/TTM EBITDA 7.5xOperating Performance 2009 A 2010 E 2011 E 2012 EROE 5.9% 7.0% 9.1% 9.4%ROCE 7.7% 9.8% 11.3% 12.2%ROA 2.8% 4.0% 4.6% 5.1%EBITDA Margin 28.1% 27.4% 29.7% 30.2%EBIT Margin 12.6% 12.6% 15.0% 15.4%EBT Margin 9.3% 9.5% 11.6% 12.6%Net Margin 6.0% 6.8% 7.3% 7.8%

Quality of Earnings 2009 A 2010 E 2011 E 2012 E Valuation & OutlookCash Realization Ratio1 3.6x 3.2x 3.3x 3.1x Current Price: $23.79 Rating: SPP/FCF 18.4x 14.3x 10.9x 10.8x Price Target: $26.00 Dividend: $0.49FCF Yield 5.4% 7.0% 9.2% 9.3% 12-18 Mo Return: 11.3%Effective Tax Rate 38.0% 38.0% 38.0% 38.0% Price Target Represents: 2010 E 2011 E 2012 EInterest Coverage 3.7x 3.8x 4.5x 5.4x P/E: 26.9x 23.9x 22.1xIncome Statement 2009 A 2010 E 2011 E 2012 E Enterprise Value: $4,164 $4,097 $3,907Revenue - Consolidated $1,008.5 $1,419.5 $1,795.7 $1,831.6 EV/EBITDA: 10.2x 7.6x 7.1xGross Profit $420.4 $583.0 $748.6 $768.0 EV/Sales: 2.9x 2.2x 2.1xadj EBITDA $290.4 $409.7 $536.0 $552.8 P/BV: 2.0x 2.1x 2.0xEBIT $127.0 $179.4 $269.4 $282.9 FCF Yield: 6.0% 8.0% 8.1%EBT $93.6 $134.2 $209.1 $230.8 Organic Revenue GrowthMinority Interest $230.0 $0.0 $0.0 $0.0adj Net Income $60.1 $95.9 $130.9 $143.1FD EPS, (Ex. Unusuals) $0.71 $0.97 $1.09 $1.18FD S/O 85.0 107.4 121.6 121.6

Cash Flow 2009 A 2010 E 2011 E 2012 EOperating cash flow (ex WC) $229.0 $306.0 $425.8 $435.4Capex ($122.3) ($132.1) ($168.0) ($174.5)Working Capital Investments ($14.6) $4.7 $9.6 $13.1Free Cash Flow2 $106.7 $173.9 $257.8 $260.9FCF per Share $1.25 $1.62 $2.12 $2.15Balance Sheet 2009 A 2010 E 2011 E 2012 E Consolidated ChartCash And Equivalents $5.0 $38.9 $21.0 $31.0Total debt $655.0 $1,041.2 $956.2 $776.7Equity $1,015.5 $1,370.3 $1,441.5 $1,525.4Minority Interest $230.0 $0.0 $0.0 $0.0Net debt (Cash) $650.0 $1,002.3 $935.1 $745.6Net debt per share $7.65 $9.33 $7.69 $6.13Net debt/EBITDA 2.2x 2.4x 1.7x 1.3xBook Value Per Unit (FD) $11.94 $12.75 $11.85 $12.54

1 Calculated as CFO divided by Net Income.2 Calculated as CFO less CapexSource: Bloomberg, Company reports and CIBC World Markets Inc.

Investment Thesis

Over the past several years, Management has been able to create significant additional value for shareholders through above industry average organic growth on top of the several strategic acquisitions made over the same period. By creating a business model which builds focused collection services in and around regions with higher population densities, Management has been able to achieve higher organic growth in the US and Canada through a strategic approach to price and volume in the company’s local markets. However, we are concerned that this market selection approach could provide elevated customer attrition risk to BFI due to a higher level of competition in these markets. With the closing of the merger with WSI on July 2, 2010, BIN has become the third largest solid waste management company (on a revenue basis) in North America (up from eighth place). The WSI acquisition significantly enhances BIN’s asset base and provides the company with a strong footprint in both Canada and the U.S. Operating synergies will focus on optimizing routes, improving disposal internalization, eliminating duplicate facilities, and enhanced purchasing power.


$0.000

$0.500

$1.000

$1.500

$2.000

2008

A

2009

A

2010

E

2011

E

2012

E

2013

E

$US

Millio

n

26.0%

27.0%

28.0%

29.0%

30.0%

31.0%

Revenue adj EBITDA adj EBITDA Margin

-10%

-5%

0%

5%

10%

15%

20%

2005

2006

2007

2008

2009

Q1/10

Q2/10

BIN (CAD) BIN (USA



Company Update

September 17, 2010 Canadian Insurance

Industrial Alliance Conservatism Pays Dividends

IAG is the fourth-largest life insurance company in Canada by market capitalization and asset size. The insurer is organized across four main business lines: Individual Insurance, Individual Wealth Management, Group Insurance and Group Pensions.

IAG's Q2/10 results were notionally in line with our expectations despite a difficult market environment. The stock has outperformed its peers, although that has not been driven by its own multiple expansion, but rather the poor performance of its larger rivals.

IAG's pro forma MCCSR ratio sits at 215% at the end of Q2/10. Especially when viewed in the context of a more conservative business mix, strong asset quality, below-average regulatory risk and a reasonable payout ratio, the balance sheet is solid, which improves the risk-reward profile.

IAG's investment portfolio is of high quality, which is a plus considering the current volatile market environment. IAG trades at a 1.3x P/B, essentially in-line with its peers, versus a nine-year average discount of 20%. We currently rate IAG Sector Outperformer.








Stock Rating:

Sector Outperformer

Sector Weighting:

Market Weight 12-18 mo. Price Target $40.00 IAG-TSX (9/13/10) $32.64 Key Indices: Toronto

3-5-Yr. EPS Gr. Rate (E) 9.0% 52-week Range $27.18-$37.40 Shares Outstanding 83.7M Float 83.7M Shrs Avg. Daily Trading Vol. 162,000 Market Capitalization $2,732.0M Dividend/Div Yield $0.98 / 3.0% Fiscal Year Ends December Book Value $24.20 per Shr 2010 ROE (E) 12.4% LT Debt $525.9M Preferred $425.00M Common Equity $2,025.8M Convertible Available No Earnings Per Share Current 2009 $2.62A 2010 $2.89E 2011 $3.23E P/E 2009 12.5x 2010 11.3x 2011 10.1x Company Description Industrial Alliance is the fourth-largest Canadian life insurance company and manufactures and distributes life insurance and wealth management products nationwide. www.inalco.com

Conservatism Pays Dividends - September 17, 2010

63

Industrial Alliance (IAG)All Figures in C$ millions, except per share data

Key Multiples Our ThesisQ4-08 Q4-09 Q4-10E Q4-11E

P/E Multiple 38.7x 12.5x 11.3x 10.1xPeer Average (GWO, MFC, SLF) 20.7x 12.1x 9.6x

Q2-10Book Value Per Share $24.20P/B Multiple 1.3xPeer Average (GWO, MFC, SLF) 1.3x

Operating Performance Segmented Earnings - For Years EndingQ4-08 Q4-09 Q4-10E Q4-11E

Core EPS - Fully Diluted ($) 0.84 2.62 2.89 3.23 Annual EPS growth 210.0% 10.5% 11.6%Core ROE 4.0% 12.2% 12.1% 12.4%Payout Ratio 97.9% 38.2% 33.4% 30.0%Book Value Per Share (BVPS) ($) 20.35 22.77 25.31 27.56 Embedded Value Per Share ($) 31.26 36.89 n/a n/a

CapitalQ4-08 Q4-09 Q2-10

Available Capital 1,921 2,305 2,601 Required Capital 967 1,107 1,160 MCCSR Ratio 199% 208% 224%

Source of Earnings Forward P/E Multiple* Relative To The Peer GroupQ4-08 Q4-09 Q4-10E Q4-11E

Expected Profit - In-Force Business 391.4 320.5 364.3 387.1 Impact of New Business (88.0) (95.6) (103.6) (101.2) Exper ience Gains (Losses) (80.5) 3.9 1.3 13.0 Changes in Assumptions (195.2) (1.1) - - Earnings on Surplus 65.5 79.7 98.1 101.9

Income before Taxes 93.2 307.4 360.1 400.8 Income Taxes (18.4) (82.4) (94.2) (103.8) Other 7.6 (5.4) 0.4 -

Net Income 82.4 219.6 266.3 297.0 Less: Preferred Share Dividends (5.8) (13.8) (23.0) (24.0)

Net I ncome to Common Shareholders 76.6 205.8 243.3 273.0

Assets * Bas ed on c onsensus es timates

Q4-08 Q4-09 P/B Multiple Relative To The Peer GroupBonds 7,942 9,410 Mortgage Loans 3,508 3,405 Stocks 1,340 1,896 Real Estate 630 649 Policy Loans 320 381 Cash & Equivalents 258 382 Short- term Investments - - Other Invested Assets 397 367

Total Invested Assets 14,396 16,490 Goodwill 115 115 Intangible Assets 332 375 Total Other Assets 572 646 Total Assets 15,415 17,627

Common Equity 1,634.2 1,832.6

Year Ending

Year Ending

With a below-average risk profile, exposure to an improving environment ( though the near-term market outlook is still uncertain), a solid balance sheet (regardless of the fact that ratios are below average) , more stable earnings and strong management, we believe the risk-reward profile relative to its larger peers remains favorable. We rate the stock Sector Outper former.

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(7)(18)

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672343

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Q4-08 Q4-09 Q4-10E Q4-11EIndiv idual Insuranc e Indiv idual Wealth ManagementGroup Insuranc e Group Pensions

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Company Update

September 17, 2010 Canadian Property & Casualty Companies

Intact Financial Corp. Underwriting Margins Improving; Returning Capital To Shareholders

Intact is the largest P&C underwriter in Canada, with an approximate market share of 11%. The company derives roughly 75% of its net premiums from personal insurance lines and roughly 25% from commercial insurance lines. Intact's long-term average ROE is a healthy 15%.

Intact is benefiting from price increases in personal insurance lines, but pricing in commercial lines remains soft. Intact's combined ratio in H1/10 was 93.5%, a 4.0-ppt improvement from H1/09. Ontario auto insurance reforms, effective September 1, should lower the combined ratio further.

Intact aggressively bought back about $241MM worth of shares in H1/10, and recently increased its NCIB from 5% of its public float to 10%, implying further repurchases. The company increased its dividend by 6% at the beginning of 2010 and we expect another increase at the beginning of 2011.

Intact currently trades at 1.8x book value, making it one of the most expensive names in the North American P&C space. We continue to expect solid EPS and ROE expansion through 2011, however, we believe that the stock is fully valued at this time. We rate Intact SP with a $53.50 PT.







Stock Rating:

Sector Performer

Sector Weighting:

Market Weight 12-18 mo. Price Target $53.50 IFC-TSX (9/13/10) $44.59 Key Indices: Toronto

3-5-Yr. EPS Gr. Rate (E) NM 52-week Range $31.34-$48.05 Shares Outstanding 114.4M Float 114.3M Shrs Avg. Daily Trading Vol. 300,000 Market Capitalization $5,099.1M Dividend/Div Yield $1.36 / 3.1% Fiscal Year Ends December Book Value $25.31 per Shr 2011 ROE (E) 15.6% LT Debt $500.0M Preferred Nil Common Equity $2,894.9M Convertible Available No Earnings Per Share Current 2009 $2.35A 2010 $3.41E 2011 $4.30E P/E 2009 19.0x 2010 13.1x 2011 10.4x Book Value Per Share 2009 $24.88A 2010 $26.07E 2011 $28.96E P/BVPS 2009 1.8x 2010 1.7x 2011 1.5x Company Description Intact is the largest P&C underwriter in Canada, with the majority of revenue coming from personal insurance lines.

www.intactfc.com

Underwriting Margins Improving; Returning Capital To Shareholders - September 17, 2010

65

Intact Financial (IFC - TSX) Sector PerformerC$44.59 Paul Holden, CFA (416-594-8417) [email protected]

12- To 18- Mth Price Target: C$53.50 Kevin Cheng, CFA (416-956-6676) [email protected] figures in millions except per share dataP / BV Multiples 2008A 2009A 2010E 2011E Investment ThesisIntact Financial 1.8x 1.7x 1.5xCanadian P&C 1.1x 1.1x 1.1xU.S. Auto / Personal Lines 1.2x 1.1x 1.1xU.S. Commercial Lines 0.9x 0.8x 0.8xU.S. Total P&C 1.0x 0.9x 0.9x


DPW Growth (Y/Y) 0.9% 3.1% 4.1% 2.0%Loss Ratio (ex. MYA) 68.2% 69.9% 64.2% 61.5%Operating Expense Ratio 9.6% 9.6% 11.8% 11.8%Comm'n and Premium Tax Ratio 19.2% 19.1% 19.1% 19.2% Chart 1: Combined Ratio By Insurance Line Combined Ratio (ex. MYA) 97.1% 98.7% 95.2% 92.6%ROE - Operating 12.1% 10.0% 13.4% 15.6%Reserve Redundancy/(Deficiency) $148.9 $123.7 $103.5 $113.0Div idends Per Share $1.24 $1.28 $1.36 $1.41BVPS $21.96 $24.88 $26.07 $28.96BVPS (ex. AOCI) $25.68 $25.41 $26.73 $29.62

Income Statement ($ mns) 2008A 2009A 2010E 2011E

Net Premiums Earned 4,039.4 4,055.4 4,241.9 4,398.0Total Underwriting Costs (ex. MYA) 3,922.5 4,001.2 4,038.4 4,070.6Underwriting Income 116.9 54.2 203.5 327.4Other Income 15.9 12.9 23.1 23.1Investment Income 328.8 292.7 301.2 335.2Interest Expense 0.0 5.6 28.3 29.5EBT 123.7 139.9 510.9 656.2Tax Expense (Recovery) (4.6) 13.1 106.8 164.0 Chart 2: IFC P/BV Premium (Discount) To US Personal Lines

Net Operating Income 360.7 281.6 394.5 492.1Operating EPS 2.96 2.35 3.41 4.30GAAP EPS 1.05 1.06 3.48 4.30

Investment Performance 2008A 2009A 2010E 2011EEnding Assets 6,108.9 7,996.4 8,104.5 8,434.9Div idend and Interest Income 328.8 292.7 301.2 335.2Average Income Yield 4.9% 4.2% 3.8% 4.1%Capital Gains/(Losses) (288.0) (172.5) 38.6 0.0Average Investment Yield 0.7% 1.7% 4.2% 4.1%

Current Price :

We believe that ROEs for the industry and Intact likely troughed in 2009. In past cycles it has taken an average of only 2 years for ROEs to go from trough to peak.Points that support a ROE recovery include: 1) premium growth in personal lines has accelerated in each of the past 6 quarters; 2) Ontario auto reforms are expected to result in lower claims expenses; and 3) the company 's personal property action plan has contributed to a 12 point improvement in the combined ratio.

We expect Intact's ROE to recover to 15.6% in 2011, supporting a P/BV multiple of 1.8x. Given that the company is currently trading at 1.8x BV we believe that the shares are appropriately valued.

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2005 2006 2007 2008 2009 2010E 2011EPersonal Auto Personal PropertyCommercial Auto Commercial Non-auto

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Company Update


Jazz Air Income Fund Canada's Largest Regional Airline

Jazz is the largest regional airline and the second-largest airline in Canada, based on fleet size and number of routes operated. Jazz is economically linked to Air Canada through its Capacity Purchase Agreement (CPA), with the latter purchasing substantially all of Jazz's fleet capacity.

The CPA reduces the cyclicality of Jazz's earnings and accords it a lower risk profile than other Canadian airlines. The offsets are the almost sole dependence of Jazz's operations on Air Canada's financial and operational strength and a limitation on Jazz's potential upside from rising fares.

Jazz's growth strategy focuses on diversifying from Air Canada, and incorporates expanding charter services, increasing service offerings to tour operators, and equity investments. We expect contributions from Jazz's recent flight agreement with Thomas Cook in H2/10.

Jazz has indicated that it intends to convert to a corporation post-2010. Jazz will be holding a special shareholder meeting, likely in September, to convert to a corporation and we expect the company to set its 2011 dividend policy at that time.







Stock Rating:

Sector Performer

Sector Weighting:

Market Weight 12-18 mo. Price Target $5.00 JAZ.UN-TSX (9/13/10) $4.37 Key Indices: None

3-5-Yr. EPS Gr. Rate (E) NM 52-week Range $3.40-$5.24 Shares Outstanding 122.9M Float 110.6M Shrs Avg. Daily Trading Vol. 407,674 Market Capitalization $536.9M Dividend/Div Yield $0.60 / 13.7% Fiscal Year Ends December Book Value $6.44 per Shr 2010 ROE (E) 5.9% LT Debt $92.6M Preferred Nil Common Equity $791.7M Convertible Available No EBITDA ($ mlns.) Current 2009 $159.1A 2010 $118.0E 2011 $131.5E EV/EBITDA 2009 3.5x 2010 4.7x 2011 4.2x Earnings Per Share 2009 $0.75A 2010 $0.36E 2011 $0.41E P/E 2009 5.8x 2010 12.1x 2011 10.7x Company Description Jazz Air Income Fund operates regional scheduled air passenger and charter services to destinations in Canada and the U.S. primarily on behalf of Air Canada.

www.flyjazz.ca

Canada's Largest Regional Airline - September 17, 2010

67

Jazz Air Income Fund (JAZ.UN - TSX) Current Price: C$4.37 12- To 18-Month Price Target: C$5.00All figures in C$ '000, except per share data December 31 year end

Share Price $4.3752 Week High $5.2452 Week Low $3.40Shares Outstanding (mln) 123Market Cap. (mln) $537Key Multiples 2009 2010E 2011EJazz P/E 5.8x 12.1x 10.6xJazz EV/EBITDA 3.5x 4.7x 4.2xJazz P/CF 3.6x 4.8x 4.6xOperating Ratios 2009 2010E 2011EOperating Margin 6.0% 3.9% 4.7%Return On Equity 11.5% 5.6% 6.3%Current Ratio 1.13 1.04 1.14Quick Ratio 0.93 0.76 0.84LT Debt To Total Capitalization 10.4% 10.5% 10.1%Dividend Yield 19.9% 13.7% 13.7%Income Statement 2009 2010E 2011ESales 1,473,900 1,469,575 1,559,670EBITDA From Operations 159,086 118,048 131,547Earnings From Operations 92,638 44,339 50,509FD EPS From Operations 0.75 0.36 0.41Cash Flow 2009 2010E 2011ECFPS 1.20 0.92 0.96FCFPS 1.09 0.76 0.86Balance Sheet Q2/F10Cash + ST Investments 76,547Current Assets 195,139PP&E 212,865Total Assets 1,134,272Current Liabilities 185,660LT Debt 92,606Total Liabilities 342,532Shareholders' Equity 791,740Operating Metrics Q2/F10Block Hours 93,585Departures 69,249ASM 1,345,703

Company DescriptionJazz Air LP is indirectly wholly owned by the Jazz Air Income Fund, and has a strong history in Canadian aviation with its roots going back to the 1930s. Jazz became publicly traded in February 2006. Under a capacity purchase agreement with Air Canada, Jazz Air provides service to and from lower-density markets as well as higher-density markets at off-peak times throughout Canada and to and from certain destinations in the United States. Jazz Air currently operates scheduled passenger service on behalf of Air Canada with approximately 800 departures per weekday to over 80 destinations in Canada and in the United States with a fleet of Canadian-made Bombardier aircraft.

Investment Thesis1. Air Canada CPA provides earnings stability but also limits upside potential

2. Conversion to a corporation - Jazz anticipates conversion will occur after special shareholder meeting scheduled for Sept./10.

3. Distribution cut? - May look to cut distribution to fund growth opportunity.

4. Diversifying away from Air Canada, focusing on 1) charter; 2) servicing tour operator market; 3) equity investments.

5. All is clear on labour front - Only outstanding labour contract is with the 33 crew schedulers.

ManagementMr. Joseph (Joe) D. Randell - President & CEOMr. Allan Rowe - CFOMr. Colin Copp - Chief Administrative OfficerMs. Jolene Mahody - COO

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CPA57.4%

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Incentiv es10.6%

Other2.1%

CPA87.3%




Company Update


Laurentian Bank Solid Results With Below-average Risk

LB is the eighth-largest Canadian bank by market capitalization with assets of $24 billion as at Q3/F10. Over the last 12 months, LB derived 32% of its net income from Retail & SME, 33% from Real Estate & Commercial, 29% from B2B Trust, and 6% from LB Securities.

LB posted impressive growth in net interest income in Q3/F10 driven by a 12-basis-point improvement in the net interest margin. While management cautioned that this increase may come under pressure in subsequent quarters, we assume some of the captured margin is sustainable.

With a below-average risk profile and a payout ratio that is well below its target range, we believe LB is well positioned to increase its dividend. We assume this increase will be announced coincident with Q1/F11 reporting, but do not rule out a move in Q4/F10.

LB's forward P/E multiple is at a 18% discount relative to peers compared to its 10-year average discount of 7%. On a P/B basis, LB trades at a 46% discount relative to peers compared to a 50% discount historically. We believe the discount reflects the bank's group-low ROE.








Stock Rating:

Sector Performer

Sector Weighting:

Overweight 12-18 mo. Price Target $50.00 LB-TSX (9/13/10) $46.80 Key Indices: None

3-5-Yr. EPS Gr. Rate (E) 5.0% 52-week Range $37.03-$47.67 Shares Outstanding 23.9M Float 23.9M Shrs Avg. Daily Trading Vol. NM Market Capitalization $1,119.5M Dividend/Div Yield $1.44 / 3.1% Fiscal Year Ends October Book Value $42.08 per Shr 2010 ROE (E) 10.8% LT Debt $150.0M Preferred $210.00M Common Equity $1,006.6M Convertible Available No Earnings Per Share Current 2009 $3.91A 2010 $4.64E 2011 $4.90E P/E 2009 12.0x 2010 10.1x 2011 9.6x Company Description Laurentian Bank of Canada is a banking institution operating across Canada and offering diversified financial services to its clients.

www.laurentianbank.com

Solid Results With Below-average Risk - September 17, 2010

69

Laurentian BankAll Figures in $ millions, except per share data (excl. one-time items)KEY MULTI PLES F2009A F2010E F2011E OUR THESISP/E Multiple 12.0x 10.1x 9.5xPeer average 12.4x 11.4x


OPERATING PERFORMANCE F2009A F2010E F2011E SEGMENTED EARNINGS CONTRIBUTIONCore cash EPS $3.91 $4.64 $4.90Annual EPS growth 8.3% 18.5% 5.7%Core cash ROE 10.2% 11.1% 10.8%Efficiency ratio 70.1% 67.9% 68.7%Operating leverage (YoY) 1.3% 8.4% (0.7% )


F2009A Q3-10Gross impaired loans 137.5 182.5Specific ACLs 41.3 56.7Total ACLs 114.5 130.0Classical Coverage ratio (2) 83% 71%Specific ACLs to GILs 30% 31%General ACLs as % of Gross Loans 0.46% 0.42%

KEY EARNI NGS DRIVERS F2009A F2010E F2011E FORWARD P/E MULTIPLE RELATIVE TO PEER GROUP (based on consensus estimates)Core net interest income 423.8 499.2 534.6 % change 4.6% 17.8% 7.1%Total capital markets related revenue 62.3 65.9 60.0 % change 14% 6% (9%)Provision for credit losses 56.0 67.7 61.1 % change 15% 21% (10%)Non-interest expenses 467.0 499.2 523.6 % change 4.7% 6.9% 4.9%


LOAN BOOK F2009A F2010E F2011E P/BVPS MULTIPLE RELATIVE TO PEER GROUPPersonal 5,655 5,702 5,875Residential mortgage 7,220 8,470 8,727Commercial mortgage 1,285 1,524 1,570Commercial and other 1,556 1,727 1,779Gross Loans 15,716 17,423 17,952Acceptances 217 191 202Total Gross Loans & Acceptances 15,933 17,614 18,155

N otes :

(1) PC Ls as a % of av erage net loans and acceptances (ex cl. repos ).(2) Total ACLs as a % of GILs.

Laurentian continues to trade at a steep discount to its peers on both P/E and P/BVPS multiples. We believe a discount is warranted given the company's relatively low ROE. Given LB's relatively high fixed cost structure and smaller scale, we do not find the current valuation compelling enough to warrant a buy recommendation. As such, we currently have a Sector Performer rating on the stock.

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Company Update

September 17, 2010 Automotive

Linamar Corporation Company Profile

Linamar designs and manufactures precision-machined components, modules and assemblies for engine, transmission, braking and suspension applications in light vehicle and heavy truck markets. The company has 37 manufacturing operations globally and over 11,100 employees.

Linamar is in the process of ramping up approximately $1.8 billion in launch activity over the next few years. New program launches are expected to contribute approximately $250 million-$450 million in additional revenue in both 2010 and 2011.

Management anticipates the medium/heavy-duty and off-road truck markets should improve significantly in 2011 versus 2010. Industry forecasts suggest growth of up to 40% year over year, above our prior forecast of approximately 20% growth in 2011.

Linamar's industrials segment remains challenging, although losses have declined over the past few quarters. Activity levels at Skyjack appear to have started picking up (mildly). Overall we do not expect Linamar’s Skyjack or agricultural operations to turn around significantly until 2012.







Stock Rating:

Sector Performer

Sector Weighting:

Market Weight 12-18 mo. Price Target $23.00 LNR-TSX (9/13/10) $19.31 Key Indices: Toronto

3-5-Yr. EPS Gr. Rate (E) NM 52-week Range $12.00-$23.50 Shares Outstanding 64.7M Float 45.6M Shrs Avg. Daily Trading Vol. 119,655 Market Capitalization $1,249.4M Dividend/Div Yield $0.24 / 1.2% Fiscal Year Ends December Book Value $12.15 per Shr 2010 ROE (E) 10.9% Net Debt $339.7M Preferred Nil Common Equity $825.3M Convertible Available No FD EPS Current 2009 $0.02A 2010 $1.44E 2011 $1.75E P/E 2009 NM 2010 13.4x 2011 11.0x EV/EBITDA 2009A 8.6x 2010E 5.4x 2011E 4.7x Company Description Linamar Corporation designs and manufactures precision-machined components and modules for engine, transmission and chassis applications for sale to OEMs and Tier 1 suppliers. www.linamar.ca


71

Linamar (LNR-TSX) Sector Performer Current Price: $19.31 12- To 18-Month Price Target: $23All Figures in CAD$ millions, except per share data



EBITDA

Linamar 13.4x 5.3x 10.5x 4.3xCanadian Peers 12.8x 5.3x 9.8x 4.4xUS Peers 13.2x 5.8x 9.8x 4.8xNA Peers 13.4x 5.7x 9.9x 4.7xHistorical Price To Forward Earnings 13.0xHistorical EV/TTM EBITDA 5.0xOperating Performance 2008A 2009A 2010E 2011EReturn on Equity 8.1% -4.2% 11.2% 12.6%Return on Capital Employed 6.3% -1.9% 8.6% 9.8%EBITDA Margin 13.1% 11.3% 13.8% 13.5%EBIT Margin 5.3% 0.6% 6.7% 7.0%EBT Margin 4.5% -3.9% 6.1% 6.4%Net Margin 3.2% -2.8% 4.3% 4.6%LNR NA Vehicle Prod 12.93 8.65 11.38 11.95NA Content Per Vehicle $101.28 $130.32 $140.62 $149.06LNR European Vehicle Prod 21.29 17.19 18.41 18.96European Content Per Vehicle $7.58 $6.81 $7.54 $7.91Production in millionsQuality of Earnings 2008A 2009A 2010E 2011E Auto Industry Statistics Seq y/yCash Realization Ratio1 3.6x -6.4x 2.4x 2.3x US Ligth Vehicle Sales (SAAR): 11.44 August -1.2% -18.6%P/FCF 16.8x 7.5x -64.5x 32.9x US Domestic Inventory (Days) 53 August 3.1% 76.7%FCF Yield 6.0% 13.3% -1.5% 3.0% NA Production Schedule: 3.044 Q3/10E -1.3% 27.2%Implied Tax Rate 27.8% 46.7% 29.0% 29.0% Big 3 NA Prod Schedule: 1.711 Q3/10E -3.3% 34.2%Interest Coverage 159.8x 1870.7x 91.0x 74.7x Production and Sales in millionsIncome Statement 2008A 2009A 2010E 2011E Valuation & OutlookSales $2,257.0 $1,675.9 $2,177.8 $2,534.9 $19.31 Rating: SPGross Profit $422.3 $284.2 $400.6 $453.0 $23.00EBITDA $296.3 $188.7 $300.0 $343.0 19.1%EBIT $119.4 $10.4 $144.9 $178.0 Price Target Represents: 2009A 2010E 2011EEBT $102.1 ($64.8) $132.2 $162.8 P/E: nmf 16.0x 13.1xMinority Interest ($1.8) ($0.7) ($0.5) $0.0 Enterprise Value: $1,735 $1,772 $1,771Net Income $71.9 ($46.9) $93.5 $115.6 EV/EBITDA: 9.2x 5.9x 5.2xFD EPS, (Ex. Unusuals) $1.05 $0.02 $1.44 $1.75 EV/Sales: 1.0x 0.8x 0.7xFD S/O 66.8 65.0 65.0 66.0 P/BV: 1.9x 1.7x 1.6x

FCF Yield: 11.2% -1.3% 2.6%Cash Flow 2008A 2009A 2010E 2011E Chart: Sales, EBITDA & EBITDA marginOperating cash flow $258.8 $298.2 $222.1 $268.8Capex ($181.8) ($130.7) ($241.6) ($230.0)Changes in working capital ($9.5) $127.6 ($47.5) ($21.8)Free Cash Flow2 $77.0 $167.5 ($19.5) $38.8FCF per Share $1.15 $2.57 ($0.30) $0.59Balance Sheet 2008A 2009A 2010E 2011ECash $83.5 $98.0 $0.0 $0.0Total debt $473.5 $337.0 $275.5 $252.2Equity $878.3 $807.6 $865.8 $965.9Net debt (Cash) $390.0 $239.0 $275.5 $252.2Net debt per share $5.84 $3.67 $4.24 $3.82Net debt/EBITDA 3.8x -3.7x 2.1x 1.5xBook Value Per Unit (FD) $13.15 $12.42 $13.31 $14.621 Calculated as CFO divided by Net Income. 2 Calculated as CFO less Capex

Source: WardsAuto, Bloomberg, Company reports and ClBC World Markets Inc.

Current Price:Price Target:12-18 Mo Return:

Investment Thesis

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Linamar designs and manufactures precision-machined components, modules and assemblies for engine, transmission, braking and suspension applications in light vehicle and heavy truck markets.

Linamar is ramping up several large transmission and engine platforms in 2010. Including both new program launches and takeover business, Linamar is ramping up approximately $250-$450 million in new business. Approximately 50% of this business was launched in Q1/10. We expect 40% will launch in Q2/10, with the remaining 10% over 2H/10. Peak annualized volumes revenue from these new programs should be as follows: i) $750 million in transmission programs (these programs will be at 70-80% of peak volumes in 2010); ii) $625 million in engine programs (programs will be at 40-50% of peak volumes in 2010); iii) $425 million in driveline programs (programs will be at 10-16% of peak volumes in 2010); and iv) $150 in energy/heavy industry programs (will be at 5-10% of peak volumes in 2010). Approximately $150-$200 million in programs will roll off in 2010.

Linamar successfully reduced the company's cost structure during the recent downturn and should benefit from favorable operating leverage as volumes continue to ramp-up. However, Linamar is somewhat at risk of a continued downturn in non-residential construction markets through the company’s Skyjack operations.




Company Update

September 17, 2010 Automotive

Magna International Inc. Company Profile

Magna designs, develops and manufactures automotive systems, modules and components, and engineers and assembles complete vehicles. Magna operates 247 manufacturing operations and 86 product development, engineering and sales centres in 25 countries.

The North American light vehicle market remains stable, with upside potential, and the European premium car makers are reporting double-digit sales growth in 2010. European premium car makers make up the majority of Magna's European sales (70%-75%).

On August 31, Magna completed the collapse of its dual-class share structure through which Magna's founder, Frank Stronach, and his family, have controlled Magna since the late 1970s. The closing of the transaction coincided with the formation of the E-Car vehicle electrification JV.

We expect Magna's now independent management team to focus on the following: 1) acquisitions and growth initiatives in China and South America; 2) a more efficient capital structure and greater attention to valuation; and 3) reduced focus on non-core investments or acquisitions of OEMs.







Stock Rating:

Sector Outperformer

Sector Weighting:

Market Weight 12-18 mo. Price Target $108.00 MGA-NYSE (9/13/10) $78.80 Key Indices: S&P 500, Toronto

3-5-Yr. EPS Gr. Rate (E) 9.4% 52-week Range $39.01-$86.22 Shares Outstanding 112.2M Float 106.5M Shrs Avg. Daily Trading Vol. 742,447 Market Capitalization $8,841.4M Dividend/Div Yield $1.20 / 1.5% Fiscal Year Ends December Book Value $67.87 per Shr 2010 ROE (E) 11.2% Net Cash $1,224.00M Preferred Nil Common Equity $7,615.0M Convertible Available Yes FD EPS Current 2009 ($1.87A) 2010 $8.32E 2011 $9.02E P/E 2009 NM 2010 9.5x 2011 8.7x FD EPS excludes unusuals. EV/EBITDA 2009A 15.3x 2010E 4.4x 2011E 3.9x Company Description Magna International Inc. is a leading global supplier of interior, exterior, vehicle body, powertrain and fuel systems. The company also performs vehicle engineering, assembly and testing. www.magnaint.com


73

Magna International (MGA-NYSE) Sector Outperformer Current Price: $78.8 12- To 18-Month Price Target: $108All Figures in USD$ millions, except per share data



EBITDA

Magna 10.3x 4.9x 9.5x 4.3xCanadian Auto Suppliers 13.0x 5.5x 10.0x 4.5xU.S. Auto Suppliers 12.4x 5.9x 10.0x 4.8xCombined North American Peers 12.9x 5.8x 10.0x 4.8x

MagnaHistorical Price To Forward Earnings 11.2xHistorical EV/TTM EBITDA 4.1x

Operating Performance 2008A 2009A 2010E 2011EReturn on Equity 4.6% -5.0% 11.2% 12.5%Return on Capital Employed 3.8% -4.7% 11.9% 12.5%EBITDA Margin 5.9% 3.1% 8.3% 8.8%Operating Margin 2.2% -1.1% 5.3% 5.9%Pre-tax Margin 1.4% -2.2% 5.3% 6.1%Net Margin 1.6% -2.2% 4.1% 4.5%

Quality of Earnings 2008A 2009A 2010E 2011E Auto Industry StatisticsCash Realization Ratio1 2.7x -1.4x 1.7x 1.5x Seq y/yP/FCF 27.9x -86.4x 11.6x 10.8x US Ligth Vehicle Sales (SAAR): 11.44 August -1.2% -18.6%FCF Yield 3.6% -1.2% 8.6% 9.3% US Domestic Inventory (Days) 53 August 5.0% 48.3%Implied Tax Rate 43.4% 9.0% 22.4% 27.0% NA Production Schedule (mlns) 3.044 Q3/10E -1.3% 27.2%Interest Coverage -8.5x -27.5x -99.8x -53.8x Big 3 NA Prod Schedule (mlns) 1.711 Q3/10E -3.3% 34.2%

Income Statement 2008A 2009A 2010E 2011E Valuation & OutlookConsolidated Revenue $23,704.0 $17,366.6 $22,670.9 $24,329.9 $78.80 Rating: SOCost Of Goods Sold $20,982.0 $15,697.0 $19,499.2 $20,886.2 $108.00Gross Profit $2,722.0 $1,669.6 $3,171.7 $3,443.8 37.1%SG&A $1,319.0 $1,261.0 $1,283.0 $1,300.0 Price Target Represents: 2009A 2010E 2011EEBITDA $1,403.0 $544.6 $1,888.7 $2,143.8 P/E: nmf 13.0x 12.0xInterest Expense (Income) ($62.0) $7.0 ($12.2) ($26.9) P/E (less cash): nmf 11.7x 10.8xDepreciation & Amortization $873.0 $737.0 $676.0 $700.0 Enterprise Value: $11,179 $11,578 $10,835EBIT $530.0 ($192.5) $1,212.7 $1,443.8 EV/EBITDA: 20.5x 6.1x 5.1xNet Income $384.0 ($384.5) $939.0 $1,095.6 EV/Sales: 0.6x 0.5x 0.4xEPS, Diluted (Ex. Unusuals) $5.72 ($1.87) $8.32 $9.02 P/BV: 1.6x 1.6x 1.5xFD S/O 111.6 111.8 117.4 121.5 FCF Yield: -0.8% 6.3% 6.8%

Cash Flow 2008A 2009A 2010E 2011E Chart: Sales, EBITDA & EBITDA marginOperating cash flow $1,054.0 $527.0 $1,570.5 $1,661.7Capex ($739.0) ($629.0) ($772.0) ($775.0)Changes in working capital ($265.0) ($94.0) ($114.4) ($151.5)Free Cash Flow2 $315.0 ($102.0) $798.5 $886.7FCF per Share $2.82 ($0.91) $6.80 $7.30

Balance Sheet 2008A 2009A 2010E 2011ECash $2,757.0 $1,334.0 $1,670.8 $2,414.1Total debt $1,209.0 $179.0 $84.0 $84.0Equity $7,363.0 $7,360.0 $7,997.0 $8,949.1Net debt (Cash) ($1,548.0) ($1,155.0) ($1,586.8) ($2,330.1)Net debt per share ($13.87) ($10.33) ($13.52) ($19.18)Net debt/EBITDA -1.1x -2.1x -0.8x -1.1xBook Value Per Unit (FD) $65.98 $65.83 $68.12 $73.66

1 Calculated as CFO divided by Net Income.2 Calculated as CFO less Capex

Source: WardsAuto, Bloomberg, Company reports and CIBC World Markets Inc.

12-18 Mo Return:

Investment Thesis

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$0

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Magna designs, develops and manufactures automotive systems, modules and components, and engineers and assembles complete vehicles. Magna operates 247 manufacturing operations and 86 product development, engineering and sales centres in 25 countries. The significant decline in production volumes in 2009 has resulted in Magna becoming a leaner operator, particularly through an increased focus on efficiencies. As a result, Magna should benefit from significant operating leverage to the rebound in light vehicle production in 2010.

Magna Guidance - 2010 sales are expected to be $22-$23 bln- 2010 North American light vehicle production is expected to be 11.5 mln- European light vehicle production guidance increased to 12.0 mln- North American CPV of $955-$985- EU CPV of $520-$545 - Complete vehicle sales of $1.8-2.1 bln- Capex at $750-$800 mln.




Company Update


Manitoba Telecom Services Inc. MTS Looks To Move Forward After Dividend Cut

MTS is the incumbent telecommunications provider in Manitoba and offers wireless, high-speed Internet and data, digital TV, and wireline voice services. MTS also owns MTS Allstream, a national communications provider for medium to large business customers.

To date, MTS continues to be one of the most resilient wireline players in North America. Its residential wireline losses remain at a very reasonable ~5.5% y/y, compared to Bell at ~7.0%-8.0% y/y and its U.S. ILEC peers at ~11%-12% y/y.

Despite this, MTS faces material LT secular challenges including ongoing cable competition and wireless substitution. The company has recently cut its dividend with funds to be used to accelerate fibre-to-the-home deployment with plans to invest $125 million over the next five years.

MTS is cheap by any measure, but lacks a NT catalyst and continues to face concerns with Allstream. A recent 25% dividend cut by the company as a function of a poorly performing Allstream unit points to the lack of confidence in this asset. As such, we retain our Sector Performer rating.








Stock Rating:

Sector Performer

Sector Weighting:

Market Weight 12-18 mo. Price Target $26.00 MBT-TSX (9/13/10) $27.65 Key Indices: S&P/TSX Midcap

3-5-Yr. EPS Gr. Rate (E) NM 52-week Range $24.71-$35.39 Shares Outstanding 64.7M Float 64.4M Shrs Avg. Daily Trading Vol. 302,395 Market Capitalization $1,789.0M Dividend/Div Yield $1.70 / 6.1% Fiscal Year Ends December Book Value $19.82 per Shr 2010 ROE (E) 7.2% Net Debt $968.9M Preferred Nil Common Equity $1,282.3M Convertible Available No Earnings Per Share Current 2009 $2.64A 2010 $1.96E 2011 $1.74E P/E 2009 10.5x 2010 14.1x 2011 15.9x EBITDA ($ mlns.) EBITDA 2009A $627.3 2010E $591.3 2011E $584.4 EV/EBITDA 2009A 4.4x 2010E 4.7x 2011E 4.7x Company Description MTS Inc. is the incumbent telecommunications provider in Manitoba and offers voice, data, video and wireless services. MTS also owns MTS Allstream, Canada's largest alternative telecom carrier. www.mtsallstream.com

MTS Looks To Move Forward After Dividend Cut - September 17, 2010

75

Manitoba Telecom Services Inc. (MBT - TSX) Sector Performer Current Price: C$27.65 Robert Bek, CFA (416-594-7454) [email protected] 12- To 18- Month Price Target: C$26.00 Michael Lee, CFA (416-594-7454) [email protected]



Manitoba Telecom - 4.4x 4.7x 4.7xBCE Inc. (excl. Aliant) - 5.8x 5.6x 5.5xTELUS Corp. - 6.0x 5.7x 5.5xU.S. ILECs - 5.5x 5.5x 5.5x


Manitoba Telecom - 10.5x 14.1x 15.9xBCE Inc. (excl. Aliant) - 13.1x 11.7x 11.5xTELUS Corp. - 13.7x 13.0x 12.4xU.S. ILEC Peers - 13.9x 13.8x 13.3x


Free Cash Flow Yield - 16.9% 11.4% 12.2%Payout Ratio - 61.7% 83.0% 64.1%Capital Intensity - 16.1% 18.9% 16.2%Net Debt / EBITDA - 1.5x 1.7x 1.6xEffective Tax Rate - 41.5% 33.1% 32.5%

Income Statement 2008A 2009A 2010E 2011E Chart 1: Revenues By Segment (2010E)

Revenue - 1,828.7 1,777.1 1,760.5OpEx - 1,201.4 1,185.8 1,176.1EBITDA - 627.3 591.3 584.4Amortization - 322.7 333.8 345.0EBIT - 252.9 216.7 199.4Interest Expense - 59.5 71.2 72.5EBT - 204.3 148.8 127.0Tax Expense (Recovery) - 84.7 49.2 41.3

Net Income - 119.60 99.62 85.69Adj. FD EPS - 2.64 1.96 1.74


EBITDA - 627.3 591.3 584.4Less:

Capex - 295.2 335.0 285.0Cash Interest - 59.5 71.2 72.5

Operating Free Cash Flow (FCF)1 - 272.6 183.7 197.0Operating FCF Per Share - 4.21 2.84 3.04

MTS is one of the best performing wireline players in North America. Its residential wireline losses remain at a very reasonable ~5.0%-6.0% y/y, compared with Bell at ~7.0%-8.0% y/y and its U.S. ILEC peers at ~11%-12% y/y.

Offsetting some of consumers' strength, however, is MTS' above average exposure to the Enterprise segment (Allstream) which is under pressure. Should economic conditions worsen, Allstream may see further contraction going forward.

MTS faces material LT secular challenges (ongoing cable competition and wireless substitution). The company has recently cut their dividend with funds to be used to accelerate fibre-to-the-home deployment in Manitoba (investing $125 million over the next 5 years).

MTS is a leading national communications provider in Canada, offering wireline voice, broadband internet and data, video, and wireless services to consumer markets. The company also owns an Enterprise Solutions division, operating under the Allstream brand, targeting the national business and wholesale markets.

Other2%

Allstream48%

Manitoba Wireless

18%

Manitoba Wireline

32%

Q2/09 Q2/10 y/y GrowthWireline ('000):

Residential Lines 367.6 347.5 -5.5%Business Lines 234.5 229.3 -2.2%Hish-Speed Internet Subs 179.0 184.5 3.1%MTS TV Subs 83.7 89.5 7.0%

Wireless ('000):Total Subs 446.3 469.7 5.3%Total Net Adds 8.0 10.2 NMBlended ARPU $55.61 $56.06 0.8%

Note: 1. Operating FCF = EBITDA – PPE – Interest. Source: Company reports and CIBC World Markets Inc.



Company Update


Manulife Financial Corporation Financial Markets Dominate Near-term Valuation Discussion

MFC is the second-largest life insurance company in Canada by market capitalization, but the largest in terms of asset size. The company is split into five main operating lines: Canada Division, U.S. Division (Wealth and Insurance), Asia and Japan Division, Reinsurance and Corporate (Other).

MFC's Q2/10 loss exceeded even the most pessimistic estimate. The loss was driven by the decline in equity markets and the material decline in interest rates during the period. In the upcoming quarter, we expect results to be materially negatively affected by reserve building charges.

As at Q2/10, MFC had an MCCSR ratio of 221%, significantly lower than the 250% reported at the end of Q1. While that is still well above the 150% regulatory minimum, we believe 200% is closer to what the market sees as the de facto lower bound.

Currently MFC trades at 0.9x P/B, a 38% discount to its peers, compared with its nine-year average premium of 2%. In the near term, we believe macro factors - rather than the insurance business - are likely to be the primary drivers of valuation, which means risks remain elevated.








Stock Rating:

Sector Performer

Sector Weighting:

Market Weight 12-18 mo. Price Target $15.00 MFC-TSX (9/13/10) $13.64 Key Indices: Toronto

3-5-Yr. EPS Gr. Rate (E) 10.0% 52-week Range $11.27-$23.26 Shares Outstanding 1,766.0M Float 1,766.0M Shrs Avg. Daily Trading Vol. 7,958,000 Market Capitalization $24,088.2M Dividend/Div Yield $0.52 / 3.8% Fiscal Year Ends December Book Value $14.89 per Shr 2010 ROE (E) 11.0% LT Debt $3,307.0M Preferred $1,422.00M Common Equity $26,291.0M Convertible Available No Earnings Per Share Current 2009 $0.81A 2010 $0.08E 2011 $1.75E P/E 2009 16.8x 2010 NM 2011 7.8x Company Description Manulife Financial Corporation is a leading Canadian-based financial services group and one of the largest life insurance companies in the world.

www.manulife.ca

Financial Markets Dominate Near-term Valuation Discussion - September 17, 2010

77

Manulife Financial (MFC)All Figures in C$ millions, except per share data


P/E Multiple 41.0x 16.9x nmf 7.8xPeer Average (SLF, GWO, IAG) 11.9x 10.3x

Q2-10Book Value Per Share $14.89P/B Multiple 0.9xPeer Average (SLF, GWO, IAG) 1.5x

Operating Performance Segmented Earnings (Before Preferred Dividends) - For Years EndingQ4-08 Q4-09 Q4-10E Q4-11E

Core EPS - Fully Diluted ($) 0.33 0.81 0.08 1.75 Annual EPS growth 143% (90%) nmfCore ROE 2.0% 5.0% 0.6% 11.0%Payout Ratio 300.6% 96.6% 618.5% 29.7%Book Value Per Share (BVPS) ($) 16.48 15.59 15.44 16.67 Embedded Value Per Share ($) 28.68 23.20 n/a n/a


Available Capital 19,437 26,784 $25,500Required Capital 8,293 11,167 $11,526MCCSR Ratio 234% 240% 221%


Expected Profit - In-Force Business 3,220 3,731 3,286 3,494 Impact of New Business (326) (424) (562) (520) Exper ience Gains (Losses) (3,351) (1,977) (3,246) 775 Changes in Assumptions 500 (1,593) 74 - Earnings on Surplus 562 4 405 476 Other (8) 89 1 -

Income before Taxes 597 (170) (42) 4,225 Income Taxes (80) 1,572 274 (1,056)

Net Income 517 1,402 232 3,169 Less: Preferred Share Dividends (30) (64) (80) (80)

Net I ncome to Common Shareholders 487 1,338 152 3,089


Q4-08 Q4-09 P/B Multiple Relative To The Peer GroupCash & Short-Term Investments 17,269 18,780 Bonds 83,148 85,107 Stocks 8,240 9,688 Mortgages 30,963 30,699 Pr ivate Placements 25,705 22,912 Policy Loans 7,533 6,609 Bank Loans 2,384 2,457 Real Estate 6,345 5,897 Other Investments/Bank Loans 5,914 5,321

Total Invested Assets 187,501 187,470 Goodwill 7,929 7,122 Intangible Assets 2,115 2,005 Total Other Assets 13,480 8,543 Total Assets 211,025 205,140

Common Equity 26,526 27,405

Years Ending

Years Ending

M FC is the most sensitive lifeco to fluctuations in equity markets and interest rates in our coverage universe. This higher relative risk profile was illustrated by the company's large reported loss in Q2 2010. Despite the cheaper relative valuation, volatility remains high and the near-term outlook is littered with charges that will reduce earnings and book value. We rate the stock Sector Performer.

Years Ending

Years Ending

Quarter Ending

Years Ending Quarter Ending

656 745 386 924

7793792,186 175

686178 1,738

344

1,319

(328)(2,087) (419)

(388)(1,441) (423)(922)

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Q4-08 Q4-09 Q4-10E Q4-11ECanada U .S. Insuranc e U. S. Wealth Asia & Japan Reinsuranc e Corporate

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9-y ear Average Relativ e P/B = 102% Current Relative P/B = 62%




Company Update


National Bank Of Canada Below-average Risk Profile Confirmed Through The Downturn

NA is the sixth-largest Canadian bank by market capitalization, with assets of $146 billion as at Q3/F10. Over the last year, NA derived 47% of its adjusted earnings from P&C Banking, 44% from Financial Markets and 9% from Wealth Management, excluding a $121 million loss in the corp. segment.

The fact that NA was able to earn through a tough trading quarter in Q3/F10 was a clear positive, and the main reason our estimates were little changed. Looking forward, its strong results through the downturn leave less room for earnings outperformance in F2011, in our view.

Based on our estimates, NA is the only bank of the Big Six whose forecast payout ratio is below its target range (39% in F2011, versus a 40% to 50% target). With visibility on capital improving, this bank should be the first to increase its dividend (possibly as soon as Q4/F10 reporting).

NA's valuation multiples have remained flat on a relative basis over the past several months. NA's forward P/E multiple is at a 13% discount relative to peers, but roughly in line with its 10-year average. On a P/B basis, NA trades at a 14% discount relative to peers vs. an 18% discount historically.








Stock Rating:

Sector Performer

Sector Weighting:

Overweight 12-18 mo. Price Target $68.00 NA-TSX (9/13/10) $66.71 Key Indices: TSXFinSv

3-5-Yr. EPS Gr. Rate (E) 7.0% 52-week Range $54.40-$66.77 Shares Outstanding 162.3M Float 162.3M Shrs Avg. Daily Trading Vol. 712,000 Market Capitalization $10,829.7M Dividend/Div Yield $2.48 / 3.7% Fiscal Year Ends October Book Value $36.01 per Shr 2010 ROE (E) 16.5% LT Debt $2,019.0M Preferred $1,089.00M Common Equity $5,846.0M Convertible Available No Earnings Per Share Current 2009 $6.32A 2010 $6.09E 2011 $6.38E P/E 2009 10.6x 2010 11.0x 2011 10.5x Cash EPS excluding one-time items. Company Description National Bank of Canada provides comprehensive financial services to its individual and corporate customers.

www.nbc.ca

Below-average Risk Profile Confirmed Through The Downturn - September 17, 2010

79

National BankAll Figures in $ millions, except per share data (excl. one-time items)KEY MULTI PLES F2009A F2010E F2011E OUR THESISP/E Multiple 10.6x 11.0x 10.5xPeer average 12.7x 11.5x


OPERATING PERFORMANCE F2009A F2010E F2011E SEGMENTED EARNINGS CONTRIBUTIONCore cash EPS $6.32 $6.09 $6.38Annual EPS growth 15.6% (3.6%) 4.7%Core cash ROE 20.1% 17.5% 16.5%Efficiency ratio 59.3% 60.7% 60.5%Operating leverage (YoY) (1.4% ) (1.2%) 2.6%


F2009A Q3-10Gross impaired loans 407 379Specific ACLs 58 203Total ACLs 514 655Classical Coverage ratio (2) 126% 173%Specific ACLs to GILs 14% 54%General ACLs as % of Gross Loans & BAs 0.78% 0.72%

KEY EARNI NGS DRIVERS F2009A F2010E F2011E FORWARD P/E MULTIPLE RELATIVE TO PEER GROUP (based on consensus estimates)Core net interest income 1,410 1,511 1,583 % change (12.1%) 7.1% 4.8%Total capital markets related revenue (3) 1,259 1,064 1,091 % change 31.3% (15.5%) 2.5%Provision for credit losses 179 138 111 % change 53% (23%) (20%)Non-interest expenses 2,652 2,697 2,732 % change 3.7% 1.7% 1.3%


LOAN BOOK F2009A F2010E F2011E P/BVPS MULTIPLE RELATIVE TO PEER GROUPResidential mortgages 14,958 15,900 16,383Personal and credit cards 18,290 20,164 20,776Business and government 19,389 20,649 20,653Net Loans 52,637 56,713 57,812Acceptances 5,733 6,044 6,289Total Net Loans & Acceptances 58,370 62,757 64,101



Falling PCL's will be a major driver of earnings recovery for the Canadian banks over the next couple of years; a catalyst to which NA is proportionately less exposed. In addition, we believe the bank's growth profile is more limited relative to some of its peers. The shares currently trade at a discount, which we v iew as justified at this time. NA is rated Sector Performer.

51% 54% 47%59%

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Current Relativ e P/ E 6-month Mov ing Av eragePlus 1 S tandard De v iation Minus 1 standard De v iation

10-y ear Av erage Relativ e F w d P/E: 8 8% Cu rrent Relati v e Fw d P/E : 87%

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Company Update

September 17, 2010 Capital Equipment

New Flyer Industries Inc. Company Profile

New Flyer is a leading manufacturer of heavy-duty transit buses for transit authorities (TAs) throughout the U.S. and Canada, holding the largest market share at approximately 37% in 2009, down slightly from 41% in 2008. The company also provides aftermarket parts and service support.

NFI is North America's market leader in the heavy-duty transit industry with leading technology and a broad product offering. Longer term, NFI's cash flow generation should be positively impacted by improved operating efficiencies, new products and further growth of the aftermarket operations.

We are concerned near-term funding from U.S. and Canadian municipal TAs may be negatively impacted by fiscal spending cuts. Ultimately, a decline in public spending would likely be temporary as the market eventually rebounds and replacement demand drives spending for new fleets.

An upcoming replacement cycle, environmental concerns and increased urbanization suggest public transit ridership should eventually rebound. A 12-year replacement cycle suggests annual replacement demand of approximately 7,000-8,000 units per year sometime during 2011-2014.







Stock Rating:

Sector Outperformer

Sector Weighting:

Market Weight 12-18 mo. Price Target C$12.50 NFI.UN-TSX (9/13/10) C$11.91 Key Indices: Toronto

3-5-Yr. EPS Gr. Rate (E) NM 52-week Range C$7.99-C$11.94 Shares Outstanding 49.5M Float 47.1M Shrs Avg. Daily Trading Vol. 118,532 Market Capitalization $573.3M Dividend/Div Yield C$1.17 / 9.8% Fiscal Year Ends December Book Value $2.59 per Shr 2010 ROE (E) NM Net Debt $379.7M Preferred Nil Common Equity $123.5M Convertible Available No EBITDA ($ mlns.) Current 2009 $102.7A 2010 $103.4E 2011 $95.9E EV/EBITDA 2009 6.2x 2010 6.2x 2011 6.7x Distributable Income Per Unit 2009 $1.52A 2010 $1.47E 2011 $1.38E P/DI 2009 7.6x 2010 7.9x 2011 8.4x Company Description New Flyer Industries Inc. is the largest North American manufacturer of heavy-duty transit buses supplying transit authorities in Canada and the U.S.

www.newflyer.com


81

New Flyer Industries (NFI.UN-TSX) Sector Outperformer Current Price: $11.91 12- To 18-Month Price Target: $12.5All Figures in USD$ (000), except per share data



EBITDA

New Flyer nmf 5.8x nmf 6.2xIndustrial Trusts 14.7x 8.2x 11.3x 6.9xCorporates 14.5x 7.9x 12.9x 6.6x

Historical Price To Forward Earnings 11.3xHistorical EV/TTM EBITDA 6.1xOperating Performance 2008A 2009A 2010E 2011EReturn on Equity 59.4% -30.2% 25.6% 11.7%Return on Capital Employed 9.4% 10.3% 10.9% 10.1%EBITDA Margin 9.8% 8.6% 2.2% 9.1%EBIT Margin 15.0% 2.3% 0.5% 6.8%EBT Margin 9.9% -1.3% 3.9% 2.0%Net Margin 9.1% -2.8% 3.0% 1.3%Quality of Earnings 2008A 2009A 2010E 2011E Ridership StatsCash Realization Ratio1 0.9x -2.6x 2.5x 5.3x Q1/10 Q1/09 y/y∆P/FCF 6.6x 6.8x 6.8x 7.3x 1,297 1,351 -4.0%FCF Yield (inc. W/C chgs) 15.3% 14.7% 14.6% 13.8% 453 593 -23.6%Effective Tax Rate 8.3% 116.4% 23.9% 34.0% 860 1,068 -19.5%Interest Coverage 3.6x 0.8x 2.0x 1.5x 2010E 2011E

5,500 5,500 0.0%2,068 2,052 -0.8%

Income Statement 2008A 2009A 2010E 2011E Valuation & OutlookSales $961.3 $1,099.9 $1,065.9 $1,050.7 $11.91 Rating: SOGross Profit $140.5 $146.8 $150.8 $143.2 $12.50EBITDA $94.6 $102.7 $103.4 $95.9 14.8%EBIT $144.4 $35.8 $94.5 $71.9 Price Target Represents: 2009A 2010E 2011EEBT $95.6 ($14.0) $41.4 $21.2 P/E: nmf nmf nmfMinority Interest P/CF 8.0x 8.0x 8.4xNet Income $87.6 ($30.4) $31.5 $14.0 Enterprise Value: $592 $619 $619FD EPS, (Ex. Unusuals) $0.29 $0.42 $0.36 $0.28 EV/EBITDA: 6.0x 6.3x 6.7xUnits Outstanding 47.3 47.3 49.5 49.5 EV/Sales: 0.5x 0.6x 0.6x

P/BV: 5.9x 5.0x 5.2xFCF Yield: 12.0% 11.9% 11.3%

Cash Flow 2008A 2009A 2010E 2011E Chart: Sales, EBITDA & EBITDA marginOperating cash flow $79.2 $77.5 $79.5 $74.6Capex ($6.8) ($5.5) ($6.7) ($6.4)Changes in working capital $6.5 $15.1 ($23.1) $0.7Free Cash Flow2 $86.0 $83.0 $86.2 $81.0FCF per Share $1.82 $1.75 $1.74 $1.64Balance Sheet 2008A 2009A 2010E 2011ECash $30.7 $30.7 $25.8 $43.0Total debt $345.6 $384.5 $391.7 $3,925.2Equity $147.6 $100.7 $123.2 $119.5Net debt (Cash) $314.9 $353.8 $365.9 $349.5Net debt per share $0.01 $0.01 $0.01 $0.01Net debt/EBITDA 3.3x 3.4x 3.5x 3.6xBook Value Per Unit (FD) $3.12 $2.13 $2.49 $2.421 Calculated as CFO divided by Net Income2 Calculated as CFO less Capex

Source: WardsAuto, Bloomberg, Company reports and CIBC World Markets Inc.

12-18 Mo Return:

Investment Thesis

US Bus Transit Passengers (mlns)New Flyer Shipments - Orders (1H/10 vs. 1H/09)

Industry Shipment EstsNew Flyer Shipment Ests

Current Price:Price Target:

New Flyer was founded in 1930 in Winnipeg, Manitoba, with its primary focus being motor coaches and school buses. In 1971, the company began to focus on manufacturing transit buses exclusively. In 1986, the company was acquired by a Dutch bus manufacturer Den Oudsten BV, which introduced low floor buses in 1988. New Flyer has facilities located in Winnipeg, Manitoba, St. Cloud, Minnesota, Crookston, Minnesota, Earlanger. The U.S. facilities allow New Flyer to comply with “Buy America” legislation and funding rules.

New Flyer is a leading manufacturer of heavy-duty transit buses to transit authorities throughout the U.S. and Canada with a market share of 35%-40%. The company also provides aftermarket parts and service support. New Flyer primarily manufactures heavy-duty buses of between 30 feet and 60 feet with seating capacity for up to 65 passengers. New Flyer’s product offerings are among the broadest and most advanced in the industry.

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Company Update

September 17, 2010 Diversified Financial

Power Financial Corporation Strong Franchises, But Limited Growth At Present

Power Financial (PWF) is a holding company that focuses on the financial services industry. Its main investments are Great-West Lifeco (68.4%), IGM Financial (56.5%) and Pargesa Holding S.A. (27.1%). Power Corporation owns 66.3% of PWF.

Great-West is the primary driver of NAV for PWF, accounting for about 74% of NAV and about 78% of operating earnings (2010 YTD). IGM is the secondary driver of NAV, representing approximately 27% of NAV and approximately 26% of operating earnings (2010 YTD).

PWF currently offers an attractive dividend yield of 4.7%. However, we expect no dividend growth through 2011 due to elevated payout ratios at Great-West and IGM. In our view, PWF is fully priced given a discount to NAV of 6.9% versus a five-year trailing average discount of 8.6%.

We expect limited NAV growth ahead based on CIBC price targets for GWO ($27.00) and IGM ($40.75). Our 2011 NAV estimate is $33.85 implying a 10.6% increase from the current estimated NAV of $30.60. We rate PWF Sector Performer with a $31.00 price target.







Stock Rating:

Sector Performer

Sector Weighting:

Market Weight 12-18 mo. Price Target $31.00 PWF-TSX (9/13/10) $29.76 Key Indices: Toronto

3-5-Yr. EPS Gr. Rate (E) NM 52-week Range $26.75-$34.23 Shares Outstanding 708.0M Float 228.1M Shrs Avg. Daily Trading Vol. 625,740 Market Capitalization $21,070.4M Dividend/Div Yield $1.40 / 4.7% Fiscal Year Ends December Book Value NM 2011 ROE (E) 14.3% LT Debt $250.0M Preferred $2,305.00M Common Equity $11,069.0M Convertible Available No Earnings Per Share Current 2009 $2.05A 2010 $2.27E 2011 $2.65E P/E 2009 14.5x 2010 13.1x 2011 11.2x Dividends Per Share 2009 $1.40 2010 $1.40 2011 $1.40 Payout Ratio 2009 68% 2010 62% 2011 53% Company Description Power Financial is a holding company with major interests in Great-West Life, IGM Financial and Pargesa. PWF is 66.3% owned by Power Corp. (POW).

www.powerfinancial.com/

Strong Franchises, But Limited Growth At Present - September 17, 2010

83

Power Financial Corp. (PWF - TSX) Sector PerformerC$29.76 Paul Holden, CFA (416-594-8417) [email protected]

12- To 18- Month Price Target: C$31.00 Kevin Cheng, CFA (416-956-6676) [email protected] figures in millions except per share dataValuations (Averages) 10-yr 5-yr 1-yr Current Company Profile

Discount To NAV -9.3% -8.6% -8.3% -6.2%Forward P/E 13.1x 13.5x 13.7x 13.1xDiv idend Yield 3.2% 3.8% 4.8% 4.8%

Power Financial 2008 2009 2010E 2011E Investment ThesisFinancialsOperating EPS 2.69 2.05 2.27 2.65BVPS 16.80 16.27 17.26 19.76Div idends Per Share 1.33 1.40 1.40 1.40MetricsOperating EPS Growth -5% -24% 11% 17%BVPS Growth 3% -3% 6% 15% Summary NAV Div idend Growth 15% 5% 0% 0%Operating ROE 15% 12% 14% 14%Div idend Payout Ratio 50% 68% 62% 53%

Great-West Lifeco 2008 2009 2010E 2011EFinancialsOperating EPS 2.30 1.72 1.94 2.23

BVPS 12.61 12.17 12.70 13.54Div idends Per Share 1.20 1.23 1.23 1.23MetricsOperating EPS Growth -5% -25% 13% 15%BVPS Growth 15% -3% 4% 7%Operating ROE 20% 14% 17% 18%

IGM Financial 2008 2009 2010E 2011EFinancialsTotal AUM ($ mlns) 101,742 120,545 119,263 131,155Operating EPS 2.89 2.35 2.65 2.85BVPS 15.67 16.74 16.57 17.38Div idends Per Share 2.00 2.05 2.05 2.05MetricsAUM Growth -17% 18% -1% 10%Operating EPS Growth -10% -19% 13% 8%BVPS Growth 1% 7% -1% 5%Operating ROE 19% 15% 16% 17%

Chart 2: Historical Discount To NAV

Power Financial is a holding company that focuses on the financial serv ices industry . Through majority ownership positions and strong board representation the company has a very significant role in the management of its subsidiaries. Its main investments are Great-west Lifeco (68.4% ), IGM Financial (56.5% ) and Pargesa Holding S.A. (27.1% ). Power Corporation owns 66.3% of Power Financial.

Chart 1: Forward P/E

Current Price :

The performance of GWO is key to NAV growth for PWF. However, our outlook on GWO remains muted, thus limiting upside potential for NAV growth.In our v iew, Power Financial is fully priced given a discount to NAV of 6.2% compared to a 5-year trailing average of 8.6% and a 10-year trailing average of 9.3% . Power Financial's investments in IGM Financial and Pargesa are not expected to be material contributors to NAV growth in the near-term.

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Estimated Net Asset Value ($mlns) Per Share % of Total

Great-West Lifeco 16,526 23.37 73.7%IGM Financial 6,079 8.60 27.1%Pargesa Holding S.A. 1,599 2.26 7.1%Total Subsidiaries 24,204 34.23 107.9%

Other AssetsCash & Cash Equivalents 1,085 1.53 4.8%Other Assets 89 0.13 0.4%Total Other Assets 1,174 1.66 5.2%

Total Gross Asset Value 25,378 35.89 113.1%

LiabilitiesOther Liabilities (393) (0.56) -1.8%Debentures and Other Borrowings (250) (0.35) -1.1%Preferred Shares of the Corporation (300) (0.42) -1.3%Perpetual Preferred Shares (2,005) (2.84) -8.9%

Estimated NAV 22,430 31.72 100.0%

PWF Share Price 29.76 Discount to NAV -6.2%

5-Yr Average Discount -8.6%10-Yr Average Discount -9.3%

Net Asset Value




Company Update


Quebecor Inc. Launches Wireless For Next Leg Of Growth

Quebecor is one of Canada's leading diversified media companies, with interests in cable and telecommunication operations (Videotron), newspaper publishing (Sun Media) and French-language private broadcasting (TVA).

Quebecor continues to be driven by strength at Videotron, as net adds track solidly across the board (digital, Internet and telephony). Sun Media results are starting to improve as a result of aggressive cost-cutting, which is expected to continue. The big focus in the story remains Videotron.

As growth in the core cable business starts to slow, Videotron will rely on its recently launched wireless service. We believe that wireless has a high potential for success, due largely to aggressive plans, a powerful cable bundling platform and French content, offered exclusively to customers.

Quebecor continues to have reasonably solid results despite slowing growth across the industry. From a growth perspective, Videotron remains among the best-performing cable operators in North America. With that, coupled with a strong wireless offering, we rate Quebecor SO.








Stock Rating:

Sector Outperformer

Sector Weighting:

Market Weight 12-18 mo. Price Target $41.00 QBR.B-TSX (9/13/10) $35.79 Key Indices: Toronto

3-5-Yr. EPS Gr. Rate (E) NM 52-week Range $21.61-$37.90 Shares Outstanding 64.9M Float 46.7M Shrs Avg. Daily Trading Vol. 98,059 Market Capitalization $2,322.8M Dividend/Div Yield $0.20 / 0.6% Fiscal Year Ends December Book Value $20.28 per Shr 2010 ROE (E) 25.8% Net Debt $3,940.4M Preferred Nil Common Equity $1,316.3M Convertible Available No Earnings Per Share Current 2009 $3.68A 2010 $3.70E 2011 $3.58E P/E 2009 9.7x 2010 9.7x 2011 10.0x EBITDA ($ mlns.) 2009A $1,276.6 2010E $1,306.9 2011E $1,288.5 EV/EBITDA 2009A 5.9x 2010E 5.8x 2011E 5.9x Company Description Quebecor Inc. is majority owner of Quebecor Media, which operates cable TV (Videotron), newspaper publishing (Sun Media), Internet (Netgraphe, nurun), and broadcasting (TVA) operations in Canada. www.quebecor.com

Launches Wireless For Next Leg Of Growth - September 17, 2010

85

Quebecor Inc. (QBR.B - TSX) Sector Outperformer Current Price : C$35.79 Robert Bek, CFA (416-594-7454) [email protected] 12- To 18- Month Price Target: C$41.00 Michael Lee, CFA (416-594-7907) [email protected]



Quebecor Inc. - 5.9x 5.8x 5.9xCdn Cable Peers - 7.2x 6.6x 6.3xU.S. Cable Peers - 6.6x 6.4x 6.1x

P/E Multiples 2008A 2009A 2010E 2011E Investment Thesis

Quebecor Inc. - 9.7x 9.7x 10.0xCdn Cable Peers - 16.8x 15.2x 13.7xU.S. Cable Peers - 19.8x 17.7x 11.9x


Free Cash Flow Yield 12.6% 17.9% 8.9% 9.0%Payout Ratio 16.9% 12.9% 25.9% 25.6%Consolidated Capex Intensity 14.5% 16.0% 17.6% 16.0%Net Debt / EBITDA 3.8x 3.1x 3.0x 2.9xTax Rate NM 22.2% 27.1% 27.0%


Revenue 3,730.1 3,781.0 4,001.4 4,247.0OpEx 2,609.1 2,504.4 2,694.5 2,958.5EBITDA 1,121.0 1,276.6 1,306.9 1,288.5Depreciation & Amortization 320.0 344.7 367.5 380.0EBIT 801.0 932.0 939.4 908.5Interest Expense 299.1 259.0 281.3 277.4EBT (206.1) 689.5 633.1 631.2Tax Expense (Recovery) 139.9 153.2 171.5 170.4

Net Income 187.3 276.1 228.0 232.6Adj. FD EPS 3.18 3.68 3.70 3.58

Free Cash Flow 2008A 2009A 2010E 2011E Key Operating Statistics (Last Reported Qtr., in '000 )

EBITDA 1,121.0 1,276.6 1,306.9 1,288.5Less:

Capex 541.3 606.2 704.4 681.5Cash Taxes 12.7 29.7 130.6 137.1Cash Interest 299.1 259.0 281.3 277.4


Since introducing cable telephony in 2005, Videotron has been among the top performing cablecos in North America, exhibiting solid financial and operational gains. Due to its strong bundling platform, we believe Videotron is poised for further growth.

We have a positive bias towards Quebecor's wireless recent wireless launch in Q3/2010. The company offers both low end wireless and family share offerings, both a natural extension to its highly sucessful bundling strategy.

With Quebecor World out of the picture, we believe the strength of the remaining assets should come to the forefront. Even after the recent recovery, valuation remains cheap and we are bullish on the LT prospects for Videotron, which is key to the story.

Quebecor Inc. is a holding company with a 54.7% interest in Quebecor Media Inc., a diverse media company which primary assets include Videotron (cable company), Sun Media (newspaper publisher), and TVA Group (TV broadcaster).

53.8%76.0%

10.8%9.7%

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Revenues EBITDA

Cable Newspapers Broadcasting Other

Q2/09 Q2/10 y/y GrowthBasic Cable

Total Subscribers 1,733.0 1,781.5 2.8%Net Additions 4.0 -4.5 -212.5%

InternetTotal Subscribers 1,110.0 1,201.7 8.3%Net Additions 21.0 9.7 -53.8%

Cable TelephonyTotal Subscribers 935.0 1,065.3 13.9%Net Additions 44.0 22.3 -49.3%

WirelessTotal Subscribers 73.0 87.0 19.2%Net Additions 5.0 2.0 -60.0%




Company Update


Rogers Communications Inc. Rogers Continues To Be Well Positioned With Strong Exposure To Wireless

Rogers is one of Canada's largest telecommunications and media companies. Its cable TV operations (2.3 million subscribers) and wireless operations (8.6 million subscribers) are the largest in Canada, while its media business continues to grow in size and scope.

Over the past year, investors have faced a myriad of issues, mostly on the wireless side of the business, including the continuing voice ARPU pressures, the sustainability of data growth and concerns over new wireless entrants. Despite these concerns, Rogers' shares have rallied.

Rogers' financial results have been solid in recent quarters, and we continue to believe in the LT value of wireless. The adoption of smartphones and take-up of associated applications add to the value proposition of wireless. This strategic value is not fully reflected in the share price today.

With current concerns over the economy and wireless risks overblown, Rogers' shares are trading at a material discount to our NAV, providing an attractive entry point for investors looking to benefit from Rogers' strong growth potential for both wireless and cable assets.








Stock Rating:

Sector Outperformer

Sector Weighting:

Market Weight 12-18 mo. Price Target $41.00 RCI.B-TSX (9/13/10) $37.56 Key Indices: S&P/TSX 60

3-5-Yr. EPS Gr. Rate (E) 17.2% 52-week Range $27.40-$38.20 Shares Outstanding 581.0M Float 484.5M Shrs Avg. Daily Trading Vol. 1,101,546 Market Capitalization $21,822.4M Dividend/Div Yield $1.28 / 3.4% Fiscal Year Ends December Book Value $7.31 per Shr 2010 ROE (E) 39.2% Net Debt $9,381.0M Preferred Nil Common Equity $4,246.0M Convertible Available Yes Earnings Per Share Current 2009 $2.48A 2010 $2.95E 2011 $3.19E P/E 2009 15.1x 2010 12.7x 2011 11.8x EBITDA ($ mlns.) 2009A $4,415.0 2010E $4,707.0 2011E $4,988.6 EV/EBITDA 2009A 7.1x 2010E 6.6x 2011E 6.3x Company Description Rogers Communications Inc. owns the largest wireless operator and cable operator in Canada. The company also has an extensive portfolio of media assets, and owns the Toronto Blue Jays of MLB. www.rogers.ca

Rogers Continues To Be Well Positioned With Strong Exposure To Wireless - September 17, 2010

87

Rogers Communications Inc. (RCI.B - TSX) Sector Outperformer Current Price : C$37.56 Robert Bek, CFA (416-594-7454) [email protected] 12- To 18- Month Price Target: C$41.00 Michael Lee, CFA (416-594-7907) [email protected]



Rogers Communications - 7.1x 6.6x 6.3xShaw Communications - 8.9x 7.8x 7.4xComcast - 5.8x 5.4x 5.3xTime Warner Cable - 6.3x 5.9x 5.7x


Rogers Communications - 15.1x 12.7x 11.8xShaw Communications - 18.1x 17.6x 15.4xComcast - 14.6x 14.7x 12.8xTime Warner Cable - 16.6x 16.3x 13.4x


Free Cash Flow Yield 6.8% 8.5% 9.1% 10.5%Payout Ratio 38.3% 38.9% 38.1% 35.6%Consolidated Capex Intensity 17.8% 15.8% 14.7% 13.8%Net Debt / EBITDA 2.1x 2.1x 2.0x 1.7xTax Rate 29.7% 25.4% 28.2% 30.0%


Revenue 11,335.0 11,731.0 12,325.7 12,874.0OpEx 9,035.0 9,046.0 9,292.8 9,635.4EBITDA 4,060.0 4,415.0 4,707.0 4,988.6Depreciation & Amortization 1,760.0 1,730.0 1,674.0 1,750.0EBIT 2,300.0 2,685.0 3,033.0 3,238.6Interest Expense 575.0 647.0 676.3 670.7EBT 1,426.0 1,980.0 2,331.7 2,567.9Tax Expense (Recovery) 424.0 502.0 656.7 770.4

Net Income 1,002.0 1,478.0 1,674.9 1,797.5Adj. FD EPS 1.98 2.48 2.95 3.19


EBITDA 4,060.0 4,415.0 4,707.0 4,988.6Less:

Capex 2,021.0 1,855.0 1,807.0 1,775.6Cash Taxes 3.0 104.0 282.9 311.2Cash Interest 575.0 647.0 676.3 670.7

Operating Free Cash Flow (FCF) 1,461.0 1,809.0 1,940.8 2,231.1Operating FCF Per Share 2.29 2.91 3.36 3.86

While there remains concern over the effects of industry pricing pressure on wireless ARPU, we believe the prospects of attracting higher value subs will continue to drive strong data adoption capable of moderating the effect of voice erosion, leading to improving ARPU trends in future quarters.

Given the heightened focus on cost efficiencies and margin expansion, we expect both free cash flow and dividends to grow at a healthy clip, and with the implementation of a sizeable share buyback program, we believe Rogers will continue to deliver strong value to its shareholders.

With current concerns over competition and AWS entrant risks overblown, RCI shares are trading at a material discount to our NAV, providing an attractive entry point for investors looking to benefit from RCI's strong growth potential for both wireless and cable assets.

Rogers is a diversified Canadian communications company, engaged in wireless voice and data services, as well as a provider of cable television services, internet broadband and telephony products. Rogers also has a broad portfolio of media assets (radio, TV and publishing) and owns the Toronto Blue Jays MLB franchise.

55.8%67.6%

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Revenues EBITDA

Wireless Cable Media

Q2/09 Q2/10 y/y GrowthWireless ('000):

Total Subs 8,156.0 8,626.0 5.8%Postpaid Net Adds 148.0 98.0 -33.8%Postpaid ARPU $73.24 $73.54 0.4%Postpaid Churn 1.00% 1.06%Data % of Network Revenues 20.5% 26.7%

Cable ('000):Basic Subs 2,292.0 2,296.0 0.2%Digital Subs 1,593.0 1,701.0 6.8%Internet Subs 1,578.0 1,634.0 3.5%Telephony Subs 878.0 975.0 11.0%Total RGUs 6,506.0 6,703.0 3.0%




Company Update

September 17, 2010 Merchandising

RONA Inc. Soft Housing Market Limits Upside

RONA is Canada's largest home improvement warehouse, with a network of almost 700 stores in a variety of formats, sizes and markets. It has generated over $6.0 billion in retail sales over the last year, though continues to be challenged by a cautious consumer and slow housing sector.

We remain cautious on the outlook for the home improvement sector, and in turn, RONA. With construction activity slowing, housing prices showing weakness, and consumer confidence declining, the trends for big-ticket spending are clearly negative for the near term.

The HIW segment remains highly competitive despite the slowing housing market. Lowe's plans to nearly double its store base this year, while Home Depot has become more promotional on big-ticket items. RONA is well situated as the destination for independents looking for increased stability.

Within the context of a weak macro environment, and in the midst of a three-year run of challenged sales results, we believe that RONA needs to deliver a period of steady and sustained SSS growth in order to improve its multiple. Until that time, we believe upside in the valuation is limited.





Mark Petrie, CFA 1 (416) 956-3278 [email protected]

Perry Caicco 1 (416) 594-7279 [email protected]

Stock Rating:

Sector Performer

Sector Weighting:

Market Weight 12-18 mo. Price Target $15.00 RON-TSX (9/13/10) $12.78 Key Indices: S&P/TSX 60

3-5-Yr. EPS Gr. Rate (E) NM 52-week Range $12.65-$17.73 Shares Outstanding 131.8M Float 131.8M Shrs Avg. Daily Trading Vol. 375,900 Market Capitalization $1,684.4M Dividend/Div Yield Nil / Nil Fiscal Year Ends December Book Value $14.28 per Shr 2010 ROE (E) 8.9% Net Debt $320.6M Preferred Nil Common Equity $1,882.4M Convertible Available No Earnings Per Share Current 2009 $1.18A 2010 $1.27E 2011 $1.39E P/E 2009 10.8x 2010 10.1x 2011 9.2x FD EPS excluding unusual items. Company Description RONA Inc. is a leading retailer and distributor of home improvement and gardening products in Canada, generating more than $6 billion of retail sales over the last 12 months. www.rona.ca

Soft Housing Market Limits Upside - September 17, 2010

89

RONA Inc. (RON-TSX) Sector PerformerCurrent Price: C$12.78 Mark Petrie, CFA (416-956-3278) [email protected] To 18-Month Price Ta C$15.00 Perry Caicco (416-594-7279) [email protected]


Comparable Analysis Key Ratios Investment ThesisRONA is Canada’s largest HIW, operating a variety of formats

LY TY NY 2009 2010e 2011e and banners nationally.P/E ratio ROE 9.0% 8.9% 9.0% It spent 08/09 repairing its infrastructure and systems to improve asset

RONA 10.8x 10.1x 9.2x ROA 5.3% 5.7% 5.9% productivity. As a result, EBITDA margins held in even as sales suffered.Home Depot 16.5x 15.7x 13.6x After-Tax ROIC 7.9% 8.4% 8.7% After a strong rebound in sales trends in Q1, growth in Q2 was well belowLowe's 16.6x 15.4x 13.1x Current Ratio 2.8x 3.1x 3.3x expectations. Consumers pulled back ahead of the slowdown in the

EV/EBITDA Net Debt/EBITDA 0.6x 0.3x 0.0x housing market, and we expect the trend to remain weak.RONA 5.8x 5.4x 5.0x Net Debt/Capital 10.4% 5.2% 0.7% Store renovations & expansions as well as small acquisitions will continue.Home Depot 8.7x 7.9x 7.3x BV/Share $13.73 $15.01 $16.42 We remain cautious in our outlook as the prospect of more moderate Lowe's 7.0x 6.5x 6.0x FCF $165.6 $100.2 $90.4 increases (or declines) in house prices temper renovation activity.

New Store Development Market Information Management2009 2010e 2011e Shares Outstanding 131.8 Robert Dutton President and CEO

Total Corporate Stores 685 690 696 Float 131.8 Claude Guevin EVP and CFOTotal Delear Stores 422 436 452 Market Capitalization 1,685.7$ Claude Bernier EVP, MarketingCorp. Square ft. (mlns) 16.3 16.8 17.3 Net Debt 301.3$ Pierre Dandoy EVP, Store Operations

Y/Y Sq ft. Growth 3.2% 3.1% 3.0% Enterprise Value 1,987.0$ Normand Dumont EVP, Merchandising

Performance Summary Valuation

Annual Review Q2/2010 Review 2009 2010e 2011e2009 2010e 2011e Actual Estimate Q2/2009 EPS 1.18$ 1.27$ 1.39$

Same-Store Sales Growth -18.1% 7.1% 10.0%Reported -4.2% 2.7% 1.2% 0.4% 6.0% -4.7% Target P/E Multiple 11.0x 11.0x 11.0xNormalized -4.7% 3.2% 1.2% 0.9% 6.5% -6.2% Equity Value Per Share 12.99$ 13.92$ 15.31$

Total Segment Sales 5,860.4 6,136.6 6,323.9 1,778.5 1,869.1 1,733.8 SSS Growth

Corp & Fran Stores 3,540.2 3,704.7 3,821.7 1,067.6 1,113.7 1,040.1Distribution 1,139.1 1,183.4 1,218.2 330.6 365.2 329.8

Net Sales 4,679.3 4,888.1 5,039.9 1,398.2 1,478.9 1,369.9

Gross Profit 1,391.6 1,464.1 1,515.6 423.1 441.6 408.4% of Sales 29.74% 29.95% 30.07% 30.26% 29.86% 29.81%

SG&A 906.7 944.2 963.9 252.0 253.7 241.7% of Sales 19.38% 19.32% 19.12% 18.02% 17.15% 17.64%

Rent 139.4 144.1 147.0 36.6 37.4 35.6

EBITDA 345.5 375.8 404.6 134.5 150.5 131.1 Change in EBITDA% (Y/Y)% of Sales 7.38% 7.69% 8.03% 9.62% 10.18% 9.57%

D&A 103.2 107.9 110.9 29.2 26.7 26.6Interest Expense 23.5 22.4 23.3 5.4 5.8 5.7Tax Expense 66.6 72.9 81.1 29.3 35.4 30.0Minority Interest 5.3 6.7 6.7 2.8 2.2 2.2

Net Earnings 146.9 165.9 182.5 67.8 80.4 66.5

EPS, Diluted $1.18 $1.27 $1.39 $0.53 $0.61 $0.55# of Shares O/S, Diluted 124.4 131.1 131.2 131.2 131.0 120.4

-10%

-5%

0%

5%

10%

15%

Q1/200

7

Q2/200

7

Q3/200

7

Q4/200

7

Q1/200

8

Q2/200

8

Q3/200

8

Q4/200

8

Q1/200

9

Q2/200

9

Q3/200

9

Q4/200

9

Q1/201

0

Q2/201

0

-2.00%-1.50%-1.00%-0.50%0.00%0.50%1.00%1.50%

Q1/200

7

Q2/200

7

Q3/200

7

Q4/200

7

Q1/200

8

Q2/200

8

Q3/200

8

Q4/200

8

Q1/200

9

Q2/200

9

Q3/200

9

Q4/200

9

Q1/201

0

Q2/201

0

Source: Company reports, Bloomberg and CIBC World Markets Inc.



Company Update


Royal Bank Of Canada Volatile Trading Revenue Has Been A Dominant Theme

RY is the largest Cdn. bank by market cap, with total assets of $704 billion as at Q3/F10. Over the past four quarters, RY derived 52% of its earnings from Cdn. Banking, 32% from Capital Markets, 8% from Insurance, 12% from Wealth Management, and negative 4% from International Banking.

As the firm with the largest European trading desk, disruption in that market was felt most acutely by this bank, with revenues plunging 80% q/q in Q3/F10. Though we expect significant q/q improvement from that depressed level, we materially lowered our assumed run rate for that line.

Until volatility in the trading line settles down, it will remain a valuation issue, regardless of the performance of the rest of the bank (where performance has been fine). The forecast rebound in trading revenue leads to the highest EPS growth rate of the Big Six banks in F2011.

RY currently trades at a premium valuation to its peers. The current premium on the forward P/E multiple is 9%, slightly above the 10-year average premium of 8%. The current P/B premium of 11% is below the 10-year average of 19%. We rate RY Sector Performer.








Stock Rating:

Sector Performer

Sector Weighting:

Overweight 12-18 mo. Price Target $56.00 RY-TSX (9/13/10) $54.60 Key Indices: TSXFinSv

3-5-Yr. EPS Gr. Rate (E) 7.0% 52-week Range $48.85-$62.89 Shares Outstanding 1,423.7M Float 1,423.7M Shrs Avg. Daily Trading Vol. 3,535,000 Market Capitalization $77,736.4M Dividend/Div Yield $2.00 / 3.7% Fiscal Year Ends October Book Value $23.67 per Shr 2010 ROE (E) 17.6% LT Debt $6,661.0M Preferred $4,811.00M Common Equity $33,702.0M Convertible Available No Cash EPS Current 2009 $4.40A 2010 $3.81E 2011 $4.40E P/E 2009 12.4x 2010 14.3x 2011 12.4x Cash EPS excluding one-time items. Company Description Royal Bank of Canada, Canada's largest financial institution, provides diversified financial services in North America.

www.royalbank.com

Volatile Trading Revenue Has Been A Dominant Theme - September 17, 2010

91

Royal BankAll Figures in $ millions, except per share data (excl. one-time items)KEY MULTI PLES F2009A F2010E F2011E OUR THESISP/E Multiple 12.4x 14.3x 12.4xPeer average 12.7x 11.5x


OPERATING PERFORMANCE F2009A F2010E F2011E SEGMENTED EARNINGS CONTRIBUTIONCore cash EPS $4.40 $3.81 $4.40Annual EPS growth 2.1% (13.3%) 15.3%Core cash ROE 20.6% 16.5% 17.6%Efficiency ratio 47.4% 48.6% 46.4%Operating leverage (YoY) 7.1% (6.6%) 3.5%


F2009A Q3-10Gross impaired loans 5,457 5,020Specific ACLs 1,279 1,194Total ACLs 3,302 3,179Classical Coverage ratio (2) 61% 63%Specific ACLs to GILs 23% 24%General ACLs as % of Gross Loans & BAs 0.69% 0.66%

KEY EARNI NGS DRIVERS F2009A F2010E F2011E FORWARD P/E MULTIPLE RELATIVE TO PEER GROUP (based on consensus estimates)Core net interest income 9,253 9,501 9,843 % change 10.6% 2.7% 3.6%Total capital markets related revenue (3) 8,794 5,374 5,391 % change 56.8% (38.9%) 0.3%Provision for credit losses 2,785 1,827 1,405 % change 92% (34%) (23%)Non-interest expenses 14,906 13,983 14,060 % change 11.0% (6.2%) 0.6%


LOAN BOOK F2009A F2010E F2011E P/BVPS MULTIPLE RELATIVE TO PEER GROUPResidential mortgages 122,130 129,358 134,610Personal 74,393 81,985 85,314Credit cards 8,701 9,134 9,505Wholesale 78,927 74,430 77,452Gross Loans 284,151 294,907 306,881Acceptances 9,024 7,778 8,094Total Gross Loans & Acceptances 293,175 302,685 314,975

N otes :(1) PC Ls as a % of av erage net loans and acceptances (ex cl. repos ).(2) Total ACLs as a % of GILs.(3) Ex cludes gains /(losses ) on inv estment sec urities.

While RY is well positioned to benefit from a recover ing environment that would generate falling loan losses and better revenue growth, the uncertain outlook combined with very high volatility in the trading line tempers our enthusiasm in the near term. We believe that a more positive investment stance requires greater confidence in the bank's earnings potential than is possible in what remains an unsettled capital markets environment. We rate RY as a Sector Performer at this time.

43% 48% 42%60%

7% 8%12%14% 12%

9%

14%27% 28% 38%16%

8%1%5%

-6%-5%

7%3%4% 4%

-25%

0%

25%

50%

75%

100%

125%

F2007A F2008A F2009A Q3-10

Canadian Banking Insurance International BankingWealth Management Capital Markets Corporate Support

90%

100%

110%

120%

130%

140%

150%

160%

Sep-

00

Sep-

01

Sep-

02

Sep-

03

Sep-

04

Sep-

05

Sep-

06

Sep-

07

Sep-

08

Sep-

09

Sep-

10

1 0-y ear A v er age Rela tiv e P/B = 11 9% Cu rren t Relativ e P/B = 1 11%

90%

100%

110%

120%

130%

Sep-

00

Sep-0

1

Sep-

02

Sep-

03

Sep-

04

Sep-

05

Sep-0

6

Sep-

07

Sep-

08

Sep-

09

Sep-

10

Current Relativ e P/E 6-month Mov ing Av eragePlus 1 Standard Dev iation Minus 1 standard Dev iation

10-y ear Av erage Relativ e Fw d P/E: 108% Current Relativ e Fw d P/E: 109%




Company Update

September 17, 2010 Steel

Russel Metals Inc. Company Profile

Russel Metals is one of the largest metals distribution and processing companies in North America with sales of $1.97 billion in 2009. The company operates in three main business lines: Metals Service Centres, Energy Tubular Products and Steel Distributors.

We expect earnings to decline in H2/10 due to lower steel prices and a seasonal decline in demand at the metals service centres, offset by seasonal strength at the energy tubular products segment. Steel prices may have reached a bottom along with recent pricing in China.

We continue to believe that overall pricing power for the steel producers (and the service centres) may be limited until 2011 at the earliest. U.S. capacity utilization has declined since mid-June to 70.6% as of the beginning of September.

Accretive acquisition activity could positively impact our 2011 outlook as management suggested the possibility of acquiring certain privately owned service centres that may be looking to close a transaction before U.S. capital gains tax rates are increased in 2011.







Stock Rating:


Sector Weighting:

Market Weight 12-18 mo. Price Target $18.00 RUS-TSX (9/13/10) $20.51 Key Indices: Toronto

3-5-Yr. EPS Gr. Rate (E) NM 52-week Range $15.30-$22.25 Shares Outstanding 59.7M Float 59.7M Shrs Avg. Daily Trading Vol. 197,586 Market Capitalization $1,224.4M Dividend/Div Yield $1.00 / 4.9% Fiscal Year Ends December Book Value $13.39 per Shr 2010 ROE (E) 7.8% Net Debt $64.8M Preferred Nil Common Equity $800.8M Convertible Available No FD EPS Current 2009 ($0.94A) 2010 $1.10E 2011 $1.26E P/E 2009 NM 2010 18.6x 2011 16.3x EV/EBITDA 2009A NMF 2010E 8.9x 2011E 8.0x Company Description Russel Metals is one of the largest metals distribution and processing companies in North America, conducting business in three segments: service centers, energy sector pipe and import/export. www.russelmetals.com


93

Russel Metals (RUS-TSX) Sector Underperformer Current Price: $20.51 12- To 18-Month Price Target: $18All Figures in CAD$ millions, except per share data



EBITDA

Russel Metals 18.6x 8.9x 16.3x 8.0xNA Service Centre Peers 17.8x 8.9x 12.7x 6.6xHistorical Price To Forward Earnings 10.2xHistorical EV/TTM EBITDA 6.2xOperating Performance 2008A 2009A 2010E 2011E

Return on Equity 24.6% nmf 7.8% 9.3%Gross Margin 23.4% 16.4% 19.5% 19.5%EBITDA Margin 11.4% -3.5% 7.1% 7.1%EBIT Margin 10.7% -4.8% 5.8% 6.0%Net Margin 6.8% -4.7% 3.3% 3.3% Steel Industry StasticsQuality of Earnings 2008A 2009A 2010E 2011E 70.6%

P/FCF 37.8x 4.5x 28.9x 17.6xFCF Yield 2.6% 22.0% 3.5% 5.7% HRC $581 USA m/mImplied Tax Rate 33.7% 38.8% 29.6% 32.6% HRC $473 China 0.5%Interest Coverage 0.0x nmf 5.8x 5.8x HRC $548 World Export 1.2%Income Statement 2008A 2009A 2010E 2011E Scrap $311 #1 Hvy USA 2.7%

Sales $3,366.2 $1,971.8 $2,045.4 $2,262.2 All figures are per short tonGross Profit $787.1 $322.9 $399.4 $441.6 August m/m y/y

EBITDA $383.3 ($69.4) $144.8 $161.3 *US Finished Steel Inventory 7.47 3.5% 30.5%EBIT $359.9 ($95.1) $119.4 $135.1 2.61x 16.2% 14.0%

EBT $344.9 ($150.4) $95.7 $111.8 136.5 -6.7% 20.0%

Net Income $228.8 ($92.0) $67.3 $75.4 2.87 -10.9% 14.5%

FD EPS, (Ex. Unusuals) $3.69 ($0.94) $1.10 $1.26 *Million Tons ** TonsFD S/O 62.7 59.9 59.8 59.9 Valuation & OutlookCash Flow 2008A 2009A 2010E 2011E $20.51 Rating: SU

Operating cash flow $56.1 $291.1 $53.1 $90.0 $18.00 Dividend: $1.00Capex ($22.1) ($20.9) ($10.7) ($20.0) -12.2% Div Yield: 4.9%Changes in working capital ($201.5) $335.5 ($43.8) ($11.7) Price Target Represents: 2009A 2010E 2011EFree Cash Flow2

$34.0 $270.2 # $42.4 $70.0 P/E: nmf 16.3x 14.3xFCF per Share $0.54 $4.51 $0.71 $1.17 Enterprise Value: $1,072 $1,124 $1,116Balance Sheet 2008A 2009A 2010E 2011E EV/EBITDA: nmf 7.8x 6.9x

Cash $44.9 $359.6 $301.3 $311.6 EV/Sales: 0.5x 0.5x 0.5xTotal debt $283.8 $353.7 $348.6 $348.6 P/BV: 1.4x 1.3x 1.3xEquity $980.1 $793.2 $803.1 $818.8 FCF Yield: 25.1% 3.9% 6.5%Net debt (Cash) $238.9 ($5.9) $47.3 $37.0 Chart: Sales, EBITDA & EBITDA margin

Net debt/TCE 19.6% -0.7% 5.6% 4.3%Net debt/EBITDA 0.6x 0.1x 0.3x 0.2xBook Value Per Unit (FD) $15.63 $13.24 $13.43 $13.66Revenue per Segment (2010E)

Source: Bloomberg, MSCI, Steelbenchmarker, AMM, Company reports and CIBC World Markets Inc.

12-18 Mo Return:Price Target:

Investment Thesis

*U.S. Service Centre Shipments

Metals Service Centre Data

Current Price:

**Avg Daily Shipment Rate

US Capacity Utilization:

23-Aug-10

Months' Shipments on hand

Metals Service Centers

Tubular Products

33%Steel

Distributors11%

Russel Metals is one of the largest metals distribution and processing companies in North America. The company primarily distributes steel products in three principal business segments: metals service centers; energy tubular products and steel distributors.

We expect sales and earnings to decline in 2H/10 due to seasonal weakness and a declining steel price environment. However, steel prices have likely bottomed at current levels as prices in China have recently rebounded and North American scrap prices have rebounded to approximately $304/ton from $279/ton in July. Accretive acquisitions in 2H/10 could positively impact our outlook.


($300)

$700

$1,700

$2,700

2003

A

2004

A

2005

A

2006

A

2007

A

2008

A

2009

A

2010

E

2011

E

C$Ml

ns

-5%

0%

5%

10%

15%

20%

EBIT

DA M

GN %




Company Update


SNC-Lavalin Group Inc. Company Profile

SNC is a world-class engineering company, with a little over half of its revenues from Canada and the remainder from around the world. SNC is also diversified by discipline, with expertise in mining & metallurgy, power, chemicals and petroleum, infrastructure and maintenance & operations.

The company competes based on engineering expertise, local relationships, and its ability to participate in projects both as an investor as well as the engineer. SNC's asset holdings (concessions) comprise a significant component (~30%) of its overall valuation.

Commodity-related earnings have weakened from 2008, but they appear to be turning a corner. Overall backlog has grown rapidly (up 15% Y/Y in Q2) given (infrastructure) project wins: Stoney Trail SE, Calgary West LRT, etc. The MUHC contract, finalized post Q2, adds a further $1.6 bln. to backlog.

We believe that H1/10 represented the inflection point for SNC, with existing projects ramping down and new projects starting up. From here, we expect momentum to improve, although we expect earnings growth to lag backlog growth. We rate SNC Sector Outperformer with a $62 price target.







Stock Rating:

Sector Outperformer

Sector Weighting:

Market Weight 12-18 mo. Price Target $62.00 SNC-TSX (9/13/10) $50.29 Key Indices: None

3-5-Yr. EPS Gr. Rate (E) 8.0% 52-week Range $41.59-$54.89 Shares Outstanding 150.9M Float 151.0M Shrs Avg. Daily Trading Vol. 446,000 Market Capitalization $7,590.4M Dividend/Div Yield $0.68 / 1.4% Fiscal Year Ends December Book Value $9.91 per Shr 2010 ROE (E) 23.8% Net Cash $677.00M Preferred Nil Common Equity $1,495.0M Convertible Available No Earnings Per Share Current 2009 $2.36A 2010 $2.48E 2011 $2.70E P/E 2009 21.3x 2010 20.3x 2011 18.6x 2010 EPS exclude gain on sale of ECS. Company Description SNC-Lavalin Group Inc. is Canada's largest engineering and construction services company, and invests actively in infrastructure concessions.

www.snc-lavalin.com


95

SNC-Lavalin (SNC-TSX)Current Price:

12 to 18 month Price Target:

All Figures in $ millions, except per share data Key Statistics Investment ThesisShare Price $50.29 Net Cash (Debt) 677.2 Shares Outstanding 150.9 Enterprise Value 6913.2Market Capitalization 7590.4


Profitability F2009A F2010E F2011EGross Margin 18.9% 19.8% 18.0%EBITDA Margin 12.1% 12.6% 11.6%Net Margin 5.9% 6.4% 5.8%Cash Per Share $8.02 $9.36 $14.23Net Debt/EBITDA NA NA NA

Income Statement F2009A F2010E F2011ESales 6101.7 6247.2 7134.7 Growth (y/y) -14.1% 2.4% 14.2%Gross Profit 1151.1 1239.2 1284.3Operating Expenses 545.6 578.6 599.0EBITDA 735.6 790.0 825.2Amortization 130.1 129.4 140.0Interest, FX & Other (128.2) (152.8) (133.7)EBT 477.3 507.8 551.5Tax Expense (Recovery) 108.1 115.3 126.8Net Income (Loss), Continuing Operations 359.4 377.1 411.9Adj. FD EPS, Continuing Operations $2.36 $2.48 $2.70


Balance Sheet F2009A F2010E F2011ECash 1218.2 1424.2 2169.1Fixed Assets 2331.0 2453.5 2363.5Goodwill 520.9 534.7 574.7Total Assets 7206.3 7810.7 8626.2Recourse debt 452.9 453.1 453.1Non-recourse debt 2144.7 2511.7 2511.7Shareholder's Equity 1434.7 1667.8 1961.6

SNC-Lavalin Group Inc. is Canada's largest engineering and construction services company, and invests actively in infrastructure concessions.The company is focused in Canada (~50% of revenues), but has significant internatioanl operations, including North Africa & the Middle East (~25%).SNC operates in a number of end markets, including: infrastructure (~30% of revenues), power (~15%), chemicals & petroleum (~15%), mining & metallurgy (~12%) and operations and maintenance (~20%).Commodity businesses are weakening from peak levels, but infrastructure opportunities are growing in Canada and internationally.


Backlog

02468

101214

Q1-F200

6

Q3-F20

06

Q1-F20

07

Q3-F20

07

Q1-F20

08

Q3-F200

8

Q1-F200

9

Q3-F200

9

Q1-F20

10

Bac

klog

($bl

ns)

Services PackagesOperations and Maintenance Concession Investments

Revenues

012345678

F199

7F1

998F1

999F2

000F2

001F2

002F2

003F2

004F2

005F2

006F2

007F2

008F20

09$b

lns

-30%-20%-10%0%10%20%30%40%50%60%

Y/Y

Gro

wth

(%)

Services PackagesOperations and Maintenance Concession Investments




Company Update


Sun Life Financial Inc. Macroeconomic & Market Environment Remain Challenging

SLF is the third-largest life insurance company in Canada by market capitalization. The company is divided into five main business segments, including MFS, a global asset manager. Its primary operations are in North America, but it has a sizeable presence in the U.K. and Asia.

While the Q2/10 results came in roughly in line with consensus, the challenging market environment still weighed on earnings. That said, the firm's net credit experience turned positive, which, considering the firm's track record this cycle, is an encouraging development.

At the end of Q2/10, SLF's MCCSR ratio dropped down to 210% from the previous quarter's 216%. Absent a significant deterioration in the operating environment, that ratio looks to be fine. That said, given the unsettled markets, we would prefer a higher ratio at this time.

Currently SLF is trading at a 1.0x P/B multiple, a 33% discount relative to its peers, versus a historical discount of 31%. With poor earnings visibility and a structural decline in profitability compared with pre-crisis levels, we believe a discount to historical levels is appropriate.








Stock Rating:

Sector Performer

Sector Weighting:

Market Weight 12-18 mo. Price Target $32.00 SLF-TSX (9/13/10) $27.92 Key Indices: Toronto, NYSE

3-5-Yr. EPS Gr. Rate (E) 8.0% 52-week Range $23.58-$33.75 Shares Outstanding 569.2M Float 569.2M Shrs Avg. Daily Trading Vol. 1,832,000 Market Capitalization $15,892.1M Dividend/Div Yield $1.44 / 5.2% Fiscal Year Ends December Book Value $27.99 per Shr 2010 ROE (E) 11.0% LT Debt $3,051.0M Preferred $2,015.00M Common Equity $15,931.0M Convertible Available No Earnings Per Share Current 2009 $1.00A 2010 $2.51E 2011 $2.95E P/E 2009 27.9x 2010 11.1x 2011 9.5x Company Description Sun Life Financial Inc. is a major Canadian-based financial services company that manufactures and distributes insurance and wealth management products in Canada, the U.S. and Asia. www.sunlife.com

Macroeconomic & Market Environment Remain Challenging - September 17, 2010

97

Sun Life Financial (SLF)All Figures in C$ millions, except per share data


P/E Multiple 28.0x 11.1x 9.5xPeer Average (MFC, GWO, IAG) 15.5x 8.1x 9.8x

Q2-10Book Value Per Share $27.99P/B Multiple 1.0xPeer Average (MFC, GWO, IAG) 1.4x

Operating Performance Segmented Earnings - For Years EndingQ4-08 Q4-09 Q4-10E Q4-11E

Core EPS - Fully Diluted ($) (0.09) 1.00 2.51 2.95 Annual EPS growth n/a 151.3% 17.6%Core ROE -0.3% 3.6% 9.0% 11.0%Payout Ratio 103.9% 151.8% 57.5% 48.9%Book Value Per Share (BVPS) ($) 28.24 27.58 28.68 27.21 Embedded Value Per Share ($) 31.16 31.31 n/a n/a


Available Capital 10,613 10,663 $10,696Required Capital 4,582 4,831 $5,092MCCSR Ratio 232% 221% 210%


Expected Profit - In-Force Business 1,828 2,009 1,897 2,031 Impact of New Business (321) (380) (341) (339) Exper ience Gains (Losses) (2,271) (630) (278) 80 Changes in Assumptions (288) (1,164) 77 70 Earnings on Surplus 402 260 391 406 Other - - - -

Income before Taxes (650) 95 1,746 2,249 Income Taxes 588 542 (217) (459)

Net Income (62) 637 1,529 1,790 Less: Preferred Share Dividends (95) (103) (103) (108) Income From CI Financial 942 - - -

Net I ncome to Common Shareholders 785 534 1,426 1,682


Q4-08 Q4-09 P/B Multiple Relative To The Peer GroupBonds 59,074 61,307 Mortgages 22,302 19,449 Stocks 4,458 4,966 Real Estate 4,908 4,877 Cash & Short-Term Investments 8,879 11,868 Policy Loans & Other Invested Assets 7,257 5,762

Total Invested Assets 106,878 108,229

Goodwill 6,598 6,419 Intangible Assets 878 926 Total Other Assets 5,479 4,508 Total Assets 119,833 120,082

Common Equity 15,808 15,566

Years Ending

Years Ending

Adjusted earnings have been at the low end of management's guidance range over the past several quarters even as the composition of those earnings has been deteriorating. Moreover, capital remains a nagging concern for SLF given the company's below average MCCSR ratio and the fact that it carr ies above average sensitivity to equtiy markets and interest rates. While there are company specific catalysts that improve the medium-term outlook (such as the improved performance and outlook in the U.S. business and at MFS). We maintain our neutral rating at this time.

Years Ending

Years Ending

Quarter Ending

Years Ending Quarter Ending

645

866

(1,016)

153929

(95)

(465)

194

-40%

-20%

0%

20%

40%

60%

80%

Q4-08 Q4-09

Canada U .S. MFS Asia Corporate

50%

60%

70%

80%

90%

100%

110%

120%

130%

Sep-

01

Sep-

02

Sep-

03

Sep-

04

Sep-

05

Sep-

06

Sep-

07

Sep-

08

Sep-

09

Sep-

10

9-y ear Av erage Relativ e P/E = 95% Current Relativ e P/E = 53%

50%

60%

70%

80%

90%

Sep-

01

Sep-

02

Sep-

03

Sep-

04

Sep-

05

Sep-

06

Sep-

07

Sep-

08

Sep-

09

Sep-

10

9-y ear Av erage R elativ e P/B = 69% Current Relativ e P/B = 67%




Company Update


TMX Group Inc. Company Profile

TMX is an integrated exchange group that operates markets for multiple asset classes including equities, fixed income, derivatives and energy. During H1/10, TMX generated $282.4MM in revenue, up 3.1% Y/Y, while H1/10 operating EPS were $1.30, up 7.3% Y/Y.

One of the company's key strategic objectives is the diversification of its operations, including expansion in the derivatives and energy markets, which now account for nearly 20% of net income. TMX set a record for new international issuers on its equity exchanges with 25 in H1/10.

The emergence of Alpha, with an approximate 20% market share, has become a notable threat for TMX. TMX is investing in technology to improve its capabilities. It is increasing throughput, with the first expansion completed in H1/10 and opened a new co-location facility in June.

Consensus EPS estimates for 2010 and 2011 are $2.78 and $2.93, implying earnings growth of 13.5% and 5.4%, respectively. Currently, TMX trades at 10.2x consensus 2011E EPS, a discount compared to global exchanges at 15.1x and U.S. exchanges at 13.1x.






Stock Rating:

Not Rated

Sector Weighting:

Market Weight 12-18 mo. Price Target None X-TSX (9/13/10) $29.83 Key Indices: Toronto

3-5-Yr. EPS Gr. Rate (E) NM 52-week Range $26.78-$36.14 Shares Outstanding 74.3M Float 72.9M Shrs Avg. Daily Trading Vol. 339,046 Market Capitalization $2,217.5M Dividend/Div Yield $1.52 / 5.1% Fiscal Year Ends December Book Value $10.93 per Shr 2011 ROE (E) NA LT Debt $437.9M Preferred Nil Common Equity $812.7M Convertible Available No Earnings Per Share Current 2007 $2.17A 2008 $2.47A 2009 $2.45A P/E 2007 13.6x 2008 10.2x 2009 12.1x Cash Flow Per Share 2007 $0.80A 2008 $1.20A 2009 $3.72A P/CF 2007 81.0x 2008 54.0x 2009 17.4x Company Description TMX Group Inc. provides trading markets and clearing facilities across multiple asset classes: equities, fixed income, derivatives, and energy.

www.tsx.com


99




Company Update


Toronto-Dominion Bank Strong Retail Franchises Well Positioned For Slower Growing Environment

TD is the second-largest Canadian bank by market cap. with assets of $603 billion as at Q3/F10. Over the last 12 months, TD derived 52% of its adjusted earnings from Canadian P&C, 11% from Wealth Mgmt., 17% from U.S. P&C, and 20% from Wholesale (not including a $428 million loss from corporate).

Stronger credit quality was a noteworthy positive for TD in Q3/F10 as all three segments saw improvements. We expect the pace of these improvements to slow, but nevertheless anticipate that falling loan losses will be a positive in both Canada and the U.S. in F2011.

With both Canadian and U.S. P&C banking posting double-digit q/q earnings growth in Q3/F10, TD's retail franchise is performing well on both sides of the border, which positions it well relative to its peers in what is likely to continue to be a slow growth environment.

On a forward P/E basis, TD trades at a 3% premium relative to peers compared with a 1% historical premium. On a P/B basis, TD currently trades at a 20% discount to its peers, compared with its 10-year average discount of only 4%. We rate TD Sector Outperformer.








Stock Rating:

Sector Outperformer

Sector Weighting:

Overweight 12-18 mo. Price Target $81.00 TD-TSX (9/13/10) $75.95 Key Indices: TSXFinSv

3-5-Yr. EPS Gr. Rate (E) 10.0% 52-week Range $61.17-$77.37 Shares Outstanding 874.1M Float 874.1M Shrs Avg. Daily Trading Vol. 2,121,000 Market Capitalization $66,387.9M Dividend/Div Yield $2.44 / 3.2% Fiscal Year Ends October Book Value $43.41 per Shr 2010 ROE (E) 14.1% LT Debt $12,384.0M Preferred $3,395.00M Common Equity $37,941.0M Convertible Available No Earnings Per Share Current 2009 $5.50A 2010 $5.87E 2011 $6.41E P/E 2009 13.8x 2010 12.9x 2011 11.8x Cash EPS excluding one-time items. Company Description TD Bank is one of Canada's leading financial institutions, and offers a full array of financial products and services to over 18 million customers worldwide.

www.tdbank.ca

Strong Retail Franchises Well Positioned For Slower Growing Environment - September 17, 2010

101

TD BankAll Figures in $ millions, except per share data (excl. one-time items)KEY MULTI PLES F2009A F2010E F2011E OUR THESISP/E Multiple 13.3x 12.9x 11.9xPeer average 12.7x 11.5x


OPERATING PERFORMANCE F2009A F2010E F2011E SEGMENTED EARNINGS CONTRIBUTIONCore cash EPS $5.50 $5.87 $6.41Annual EPS growth 1.5% 6.6% 9.2%Core cash ROE 13.7% 14.0% 14.1%Efficiency ratio 61.1% 59.8% 59.7%Operating leverage (YoY) 9.3% (0.6%) 0.6%


F2009A Q3-10Gross impaired loans 2,311 3,337Specific ACLs 558 624Total ACLs 2,639 2,579Classical Coverage ratio (2) 114% 77%Specific ACLs to GILs 24% 19%General ACLs as % of Gross Loans & BAs 0.78% 0.72%

KEY EARNI NGS DRIVERS F2009A F2010E F2011E FORWARD P/E MULTIPLE RELATIVE TO PEER GROUP (based on consensus estimates)Core net interest income 10,254 10,729 11,412 % change 23.6% 4.6% 6.4%Total capital markets related revenue (3) 3,833 3,189 2,934 % change 88.2% (16.8%) (8.0%)Provision for credit losses 2,016 1,611 1,220 % change 93% (20%) (24%)Non-interest expenses 11,669 11,791 11,999 % change 18.3% 1.0% 1.8%


LOAN BOOK F2009A F2010E F2011E P/BVPS MULTIPLE RELATIVE TO PEER GROUPResidential mortgages 65,665 68,276 71,048Personal and credit cards 102,509 108,837 113,256Business and government 87,322 86,397 89,906Gross Loans 255,496 263,510 274,210Acceptances 9,946 7,813 8,293Total Gross Loans & Acceptances 265,442 271,323 282,503



Our positive bias on this name has been based on our belief that the combination of its strong personal and commercial banking businesses – on both sides of the border – should position it well relative to its peers in a slower growing environment. Results in the most recent quarter supports our thesis with both Canadian and U.S. P&C banking posting double-digit q/q earnings growth. We rate TD Bank Sector Outperformer.

54% 57% 51%64%

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F2007A F2008A F2009A Q3-10Canadian P&C Banking Wealth Management Wholesale Banking U.S. P&C Banking Corporate

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C urrent R elativ e P/E 6-month Mov ing Av eragePlus 1 Standard Dev iation M inus 1 s tandard Dev iation

10-y ear Av erage R elativ e F w d P/E: 101% Current Relativ e F w d P/E: 103%

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Company Update


Torstar Corporation Outlook Mixed, But Cost-cutting Continues To Drive Profitability

Torstar is a Canadian-based media company that owns four daily and 100 community newspapers, is a leading global book publisher of the Harlequin franchise and owns a diverse platform of digital properties. The company recently divested its 20% interest in CTVglobemedia.

Given persistent cyclical and structural pressures for print newspapers, we remain cautious on Torstar's publishing assets. While we have seen a modest ad recovery in the recent quarter, forward tone remains cautiously optimistic, and cost efforts remain the primary driver of profitability.

Harlequin continues to remain on strong footing, providing a solid source of revenue to balance the print group's more cyclical reliance on advertising markets. Despite a possible negative impact from foreign exchange, the outlook for Harlequin continues to look stable for H2/10.

While we have likely seen the bottom in ad trends, the recovery is mixed across the board. That said, management's focus on cost-cutting efforts and a continued effort to reduce leverage should continue to show gains for the second half of the year. We rate Torstar Sector Performer.








Stock Rating:

Sector Performer

Sector Weighting:

Market Weight 12-18 mo. Price Target $14.00 TS.B-TSX (9/13/10) $12.61 Key Indices: Toronto

3-5-Yr. EPS Gr. Rate (E) NM 52-week Range $5.92-$12.77 Shares Outstanding 79.0M Float 53.5M Shrs Avg. Daily Trading Vol. NM Market Capitalization $996.1M Dividend/Div Yield $0.37 / 2.9% Fiscal Year Ends December Book Value $8.80 per Shr 2010 ROE (E) 15.6% Net Debt $480.1M Preferred Nil Common Equity $694.9M Convertible Available No Earnings Per Share Current 2009 $1.10A 2010 $1.19E 2011 $1.44E P/E 2009 11.5x 2010 10.6x 2011 8.8x EBITDA ($ mlns.) Current 2009A $191.8 2010E $236.8 2011E $241.8 EV/EBITDA 2009A 7.7x 2010E 6.3x 2011E 6.1x Company Description Torstar Corp. is a broadly based Canadian media company that owns Canada's largest daily newspaper, as well as other daily and community papers. It also owns Harlequin Enterprises, a book publisher. www.torstar.com

Outlook Mixed, But Cost-cutting Continues To Drive Profitability - September 17, 2010

103

Torstar Corporation (TS.B - TSX) Sector Performer Current Price : C$12.61 Robert Bek, CFA (416-594-7454) [email protected] 12- To 18- Month Price Target: C$14.00 Tony Rizzi (416-594-7299) Tony [email protected]


EV / EBITDA Multiples 2008A 2009E 2010E 2011E Company Profile

Torstar Corp. - 7.7x 6.3x 6.1xGannett Inc. - 5.3x 4.6x 4.6xMcClatchy Co. - 5.5x 5.2x 5.2x

P / E Multiples 2008A 2009E 2010E 2011E Investment Thesis

Torstar Corp. - 11.5x 10.6x 8.8xGannett Inc. - 7.3x 5.8x 5.8xMcClatchy Co. - 4.7x 5.8x 4.9x

Key Financial Metrics 2008A 2009E 2010E 2011E

Free Cash Flow Yield 17.0% 16.2% 17.3% 19.9%Payout Ratio 42.8% 22.6% 21.0% 18.3%Net Debt / EBITDA 3.0x 2.7x 1.8x 1.2xTax Rate NM 33.6% 35.6% 35.0%

Income Statement 2008A 2009E 2010E 2011E Chart 1: Revenues & EBITDA By Segment (2010E)

Revenue 1,536.0 1,451.3 1,460.8 1,484.5OpEx 1,326.0 1,259.5 1,224.1 1,242.7EBITDA 210.1 191.8 236.8 241.8Depreciation & Amortization 55.5 52.8 49.0 50.0EBIT 67.1 70.7 150.6 168.7Interest Expense 28.2 21.0 24.0 23.1EBT (158.3) 53.6 147.7 176.2Tax Expense 22.2 18.0 52.6 61.7

Net Income (180.5) 35.6 95.1 114.5Adj. FD EPS 1.21 1.10 1.19 1.44

Free Cash Flow 2008A 2009E 2010E 2011E Key Segment Operating Results (Last Reported Qtr.)

EBITDA 210.1 191.8 236.8 241.8Less:

Capex 26.1 20.7 25.4 25.0Cash Taxes 20.6 21.2 49.5 35.5Cash Interest 28.2 21.0 24.0 23.1


That said, we believe downside risks have eased as newspaper valuations have bounced off the bottom. While challenges still remain, cost savings and stronger ad fundamentals in 2010 offer potential for further upside, in our opinion.

Torstar continues to face difficult revenue trends, despite the modest improvement in the ad markets. Given persistent cyclical and structural pressures for print newspapers, our outlook for Torstar's publishing assets remains somewhat cautious this year.

While Harlequin remains on solid footing, it will not be enough to offset continuing pressures on newspaper revenues, even with aggressive cost savings.

Torstar is a broad based Media company primarily involved in publishing of daily and community newspapers. Its assets include the Toronto Star (Canada's largest daily) and over 100 community newspapers, recently divesting its stake in CTVglobemedia.

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Revenues EBITDA

Metroland Star Group Book Publishing

Q2/09 Q2/10 y/y GrowthMetroland Media Group

Revenues 137.4 141.0 2.6%EBITDA 28.8 30.9 7.5%% Margin 20.9% 21.9%

Star Media GroupRevenues 112.2 117.7 4.9%EBITDA 8.3 17.8 114.7%% Margin 7.4% 15.2%

Toronto StarPrint advertisng (y/y Change) -13.2% 0.2%

Digital% of Newspaper Revenue 6.2% 8.4%




Company Update


Transat A.T. Inc. Canada's Leading Tour Operator

Transat is one of the largest integrated tourism companies in the world and a prominent player in Canada's holiday travel industry. Transat has 17 business units with services in Canada, France, the U.K., the Netherlands, Greece, the U.S., Mexico and the Dominican Republic.

Transat's vision is to be a tour operator leader in the Americas while maintaining a solid competitive position in Europe. While Transat is the largest tour operator in Canada, it faces a new competitive environment, and has been forced to revisit its near-term strategy.

Transat recently launched an outgoing tour operator division in Mexico and will operate under the Eleva Travel brand. Eleva Travel is focused on summer travel demand from Mexico and complements Transat's winter product offering into the region.

For Q4/F10, Transat is seeing higher bookings and higher revenue per booking in the transatlantic markets but continues to see selling pressure in the sun destination markets. Overall, Transat is guiding towards a y-o-y improvement in revenue and EBITDA margin in its fiscal fourth quarter.







Stock Rating:

Sector Performer

Sector Weighting:

Market Weight 12-18 mo. Price Target $16.50 TRZ.B-TSX (9/13/10) $14.26 Key Indices: Toronto

3-5-Yr. EPS Gr. Rate (E) NM 52-week Range $9.75-$24.90 Shares Outstanding 36.8M Float 31.0M Shrs Avg. Daily Trading Vol. 113,214 Market Capitalization $524.9M Dividend/Div Yield Nil / Nil Fiscal Year Ends October Book Value $10.43 per Shr 2010 ROE (E) NM LT Debt $6.9M Preferred Nil Common Equity $383.9M Convertible Available No EBITDA ($ mlns.) Current 2009 $93.4A 2010 $99.8E 2011 $137.7E EV/EBITDA 2009 4.2x 2010 3.9x 2011 2.8x Earnings Per Share 2009 $0.99A 2010 $0.79E 2011 $1.38E P/E 2009 14.4x 2010 18.1x 2011 10.3x Company Description Transat A.T. Inc. is one of N.A.'s leading integrated leisure travel companies. It operates through a system of tour operators and retail travel agencies as well as its wholly owned airlines. www.transat.com

Canada's Leading Tour Operator - September 17, 2010

105

Transat AT Inc (TRZ/B - TSX) Current Price: C$14.26 12- To 18-Month Price Target: C$16.50All figures in C$ '000, except per share data October 31 year end

Share Price $14.2652 Week High $24.9052 Week Low $9.75Shares Outstanding (mln) 36.8Market Cap. (mln) $525

Key Multiples 2009 2010E 2011ETransat P/E 14.4x 17.9x 10.4xPeer P/E 16.4x 15.8x 12.4x

Transat EV/EBITDA 4.2x 3.9x 2.8xPeer EV/EBITDA 7.0x 5.2x 4.5x

Transat P/CF 4.2x 3.9x 2.8xPeer P/CF 14.8x 7.4x 5.7x

Operating Ratios 2009 2010E 2011EOperating Margin 2.6% 2.9% 3.8%Return On Equity 9.2% 7.3% 10.7%Current Ratio 1.06 1.05 1.15Quick Ratio 1.04 1.03 1.13LT Debt To Total Capitalization 22.6% 1.5% 1.3%Dividend Yield 0.0% 0.0% 0.0%

Income Statement 2009 2010E 2011ESales 3,545,341 3,497,061 3,646,148EBITDA From Operations 93,395 99,841 137,660Earnings From Operations 33,723 30,636 52,557FD EPS From Operations 0.99 0.79 1.38

Cash Flow 2009 2010E 2011ECFPS 3.23 2.38 3.60FCFPS 2.19 1.62 2.03

Balance Sheet Q3/F10Cash + ST Investments 217,278Current Assets 797,717PP&E 96,754Total Assets 1,250,807Current Liabilities 792,483LT Debt 6,899Total Liabilities 866,906Shareholders' Equity 383,901

Company DescriptionTransat A.T. Inc. is one of the largest integrated tourism companies in the world and a prominent player in Canada’s holiday travel industry. Transat, which is headquartered in Montreal, has more than 6,500 employees and approximately 17 business units, all operating in the travel and air transportation industries, in Canada, France, the United Kingdom, the Netherlands, Greece, the United States, Mexico and the Dominican Republic.

Investment Thesis1. Excess capacity in Canadian market - Airline carriers expanding into packaged tour market is resulting in excess capacity in the Canadian market and adding negative pressure on pricing.

2. Cost cutting strategy - Transat is reducing its cost structure through 1) migrating to a single model fleet; 2) new carrier agreement with CanJet will yield ~$30 million in saving; 3) lowering input costs by leveraging its scale.

3. Growing its network - Expansion opportunities in Mexico, Spain, Italy and South America.

4. Will US travel demand for sun destinations return to normalized levels?

5. Strengthing C$ - Positive for Canadian outbound travel.

Revenue Breakdown (F2009)

Canada70%

France22%

United Kingdom6%

Other2%

Revenue Growth ($ Million)

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Company Update


Transcontinental Inc. Post-recession Cost Structure Bodes Well For Improving Tone

Transcontinental is the largest printer in Canada and Mexico and the fourth- largest in North America. The company is also a leading publisher of consumer magazines, the largest publisher of community newspapers in Quebec and operates a digital platform of more than 120 websites.

TCL has made significant rationalization efforts during the downturn, and has continued to prune businesses that are not part of its core focus. As such, positive top-line growth will flow through nicely to the all-important EBITDA line as TCL's leaner cost base will support a material boost.

TCL's balance sheet continues to improve, with debt to EBITDA hovering at 1.85x, below the company's 2.0x-2.5x target, allowing sufficient capacity to make acquisitions. We expect strategic investments in coming quarters in digital businesses, which continue to offer longer-term growth opportunities.

Transcontinental has shown solid performance in recent quarters. We believe it will continue to benefit from new contracts, a lower cost base, and improved operating leverage as core print revenues recover. As such, the thesis remains a continued execution story. We rate TCL Sector Performer.








Stock Rating:

Sector Performer

Sector Weighting:

Market Weight 12-18 mo. Price Target $16.00 TCL.A-TSX (9/13/10) $13.75 Key Indices: Toronto

3-5-Yr. EPS Gr. Rate (E) NM 52-week Range $10.77-$15.25 Shares Outstanding 80.8M Float 68.1M Shrs Avg. Daily Trading Vol. NM Market Capitalization $1,111.0M Dividend/Div Yield $0.36 / 2.6% Fiscal Year Ends October Book Value $14.96 per Shr 2010 ROE (E) 12.9% LT Debt $478.5M Preferred Nil Common Equity $1,209.0M Convertible Available No Earnings Per Share Current 2009 $1.61A 2010 $1.80E 2011 $1.93E P/E 2009 8.5x 2010 7.6x 2011 7.1x EBITDA ($ mlns.) 2009A $338.9 2010E $384.4 2011E $405.3 EV/EBITDA 2009A 5.4x 2010E 4.7x 2011E 4.5x Company Description Transcontinental is Canada's leading printer of flyers, direct marketing products, newspapers, books and magazines. The company is also a leading publisher of consumer magazines and weekly newspapers. www.transcontinental.com

Post-recession Cost Structure Bodes Well For Improving Tone - September 17, 2010

107

Transcontinental Inc. (TCL.A - TSX) Sector Performer Current Price : C$13.75 Robert Bek, CFA (416-594-7454) [email protected] 12- To 18- Month Price Target: C$16.00 Tony Rizzi (416-59472-7299) [email protected]



Transcontinental Inc. -- 5.4x 4.7x 4.5xR.R. Donnelley & Sons Co. -- 4.8x 5.0x 4.6xNA Printer Peers -- 6.3x 5.2x 4.8x. . . . .


Transcontinental Inc. -- 8.5x 7.6x 7.1xR.R. Donnelley & Sons Co. -- 10.5x 10.1x 8.9xNA Printer Peers -- 12.7x 10.8x 11.4x. . . . .


Free Cash Flow Yield 1.7% 0.0% 15.6% 16.7%Payout Ratio 140.6% NM 17.2% 16.5%Net Debt / EBITDA 2.0x 2.3x 1.7x 1.3xTax Rate 131.9% NM 23.7% 26.0%


Revenue 2,429.3 2,169.8 2,154.0 2,203.2OpEx 2,067.8 1,830.9 1,769.6 1,797.8EBITDA 361.5 338.9 384.4 405.3Depreciation & Amortization 128.7 121.8 138.5 146.9Adjusted EBIT 232.8 217.1 245.9 258.4Interest Expense 30.5 41.0 40.8 38.3EBT (23.5) (57.3) 198.0 220.1Tax Expense (Recovery) (31.0) (2.7) 46.8 57.2

Net Income 7.5 (54.6) 144.1 156.1Adj. FD EPS 1.72 1.61 1.80 1.93

Free Cash Flow 2008A 2009A 2010E 2011E Key Contracts

EBITDA (w/ Corp. Exp.) 361.5 338.9 384.4 405.3 Outsourcing ContractLess: - 15-yr contract with Hearst Corp. to print San Francisco Chronicle

Capex 273.1 241.9 135.5 145.0 - Deal is worth US$1 billion (excl. newsprint costs)Cash Taxes 35.2 41.0 42.5 44.6 - Total investment of US$230MM, and is fully protected by Hearst Corp.Cash Interest 35.2 41.0 40.8 38.3 - Capacity utilization is ~40% with the base contract alone

Globe & Mail ContractOperating Free Cash Flow (FCF) 18.0 (0.4) 165.5 177.4 - 18-yr contract to print the Globe & Mail until 2028 in a deal worth ~$1.7 billionOperating FCF Per Share 0.22 (0.00) 2.05 2.20 - Production will begin in 2010 with the results impacting 2011 revenue

- Expected to generate $95MM per year of which $25MM will be new revenue- Investment of $175MM with synergies from combining retail and newspaper platfrom Other Contracts- Rogers 6-yr contract worth $210MM to print magazines starting in 2009- Rogers 6-yr contract worth $150MM to print marketing products starting in 2009

We continue to expect stabilizing printing fundamentals and improving ad markets to lead to improvment in revenues. The segments most likely to benefit from the recovery are Magazine Publishing and Commercial Printing.

The accelerated rationalization efforts and ramp-up of new contract contributions should contribute significantly to improve profitability in the remainder of F2010 and into F2011.

Given TCL's diversified revenue base, aggressive cost management capabilities, and experienced management team, TCL is well positioned to benefit materially from a sustainable turnaround in the economy.

Transcontinental (TCL) is a provider of printing, publishing, and marketing services. TCL is the largest printer in Canada and Mexico, and is the 4th largest in North America. It is also Canada's leadnig publisher of magazines, second-largest community newspaper publisher, and operates a digital platform with over 120 websites.

67.3% 69.4%

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Printing Media Marketing Comm.




Company Update


Western Financial Group Inc. Company Profile

Western Financial is the largest property & casualty broker in Western Canada, and also offers banking, life insurance and investment services. The company derives the majority of its operating income from the insurance brokerage segment, which it refers to as “The Network”.

Operating EPS in H1/10 were $0.09, an improvement over the $0.07 reported during H1/09. Total revenues were $110.6MM, up 53% from H1/09, with same-store revenue +4.7% Y/Y. H1/10 net income was $8.0MM and the company is targeting $18.5MM-$20.0MM for all of 2010.

The company is expanding via acquisition, with two completed in 2010 for $5.7MM. This follows four acquisitions in 2009 for $63.6MM. In June 2010, Western Financial issued a total of 10.4 million shares at a price of $2.65 per share, for net proceeds of $26.5 million.

Consensus estimates for operating EPS are $0.21 and $0.24 in 2010 and 2011, implying growth of -4.5% and 14.3%, respectively. Currently, Western Financial trades at 9.6x P/E consensus 2011E, a discount compared to the 12.0x average since 2007.






Stock Rating:

Not Rated

Sector Weighting:

Market Weight 12-18 mo. Price Target None WES-TSX (9/13/10) $2.30 Key Indices: Toronto

3-5-Yr. EPS Gr. Rate (E) NM 52-week Range $1.90-$3.50 Shares Outstanding 59.8M Float 56.6M Shrs Avg. Daily Trading Vol. 87,078 Market Capitalization $137.0 Dividend/Div Yield $0.04 / 1.7% Fiscal Year Ends December Book Value $3.12 per Shr 2011 ROE (E) NA LT Debt $79.8M Preferred Nil Common Equity $246.6M Convertible Available No Earnings Per Share Current 2007 $0.22A 2008 $0.12A 2009 $0.22A P/E 2007 23.9x 2008 15.1x 2009 11.8x Book Value Per Share 2007 $2.97A 2008 $4.13A 2009 $4.99A P/BVPS 2007 0.8x 2008 0.6x 2009 0.5x Company Description Western Financial Group Inc. is the largest property & casualty brokerage in Western Canada. The company also provides banking, life insurance and travel services.

www.westernfinancialgroup.ca


109




Company Update


WestJet Airlines Ltd. Aggressive Growth Campaign

Since its inception in 1996, WestJet has grown from a western Canadian regional carrier with 3 aircraft flying to 5 cities into one of Canada’s primary low-fare airlines, offering scheduled service to 68 destinations in Canada, the U.S., Mexico and the Caribbean with its fleet of 90 Boeing 737s.

WestJet is aiming to become one of the world's five most successful international airlines by 2016, with its growth strategy focused on its trans-border and international operations. WestJet's fleet expansion plans and potential airline partnerships are a key component of its growth strategy.

By 2016, WestJet is targeting 45%-50% domestic market share (36% currently), 20%-25% trans-border market share (13% currently) and 30%-35% market share into Mexico/Caribbean destinations (22% currently). WestJet is also focused on increasing its share of premium traffic.

WestJet recently adjusted its aircraft delivery schedule, deferring three 700-series aircraft to 2017. While WestJet is scheduled to increase its fleet to between 112 and 135 planes, in a slow growth environment, we believe it is prudent for WestJet to not add capacity too aggressively.







Stock Rating:

Sector Performer

Sector Weighting:

Market Weight 12-18 mo. Price Target $16.00 WJA-TSX (9/13/10) $11.95 Key Indices: Toronto

3-5-Yr. EPS Gr. Rate (E) NM 52-week Range $10.75-$14.49 Shares Outstanding 138.8M Float 122.3M Shrs Avg. Daily Trading Vol. 622,482 Market Capitalization $1,658.9M Dividend/Div Yield Nil / Nil Fiscal Year Ends December Book Value $10.37 per Shr 2010 ROE (E) 9.3% LT Debt $954.9M Preferred Nil Common Equity $1,439.2M Convertible Available No EBITDA ($ mlns.) Current 2009 $351.9A 2010 $359.1E 2011 $431.8E EV/EBITDA 2009 4.5x 2010 4.4x 2011 3.7x Earnings Per Share 2009 $0.71A 2010 $0.84E 2011 $1.12E P/E 2009 16.8x 2010 14.2x 2011 10.7x Company Description WestJet Airlines Ltd. is the leading Canadian low-cost air carrier. Based in Calgary, WestJet services cities throughout Canada, the U.S. and Mexican and Caribbean destinations. www.westjet.com

Aggressive Growth Campaign - September 17, 2010

111

WestJet Airlines Ltd. (WJA - TSX) Current Price: C$11.95 12- To 18-Month Price Target: C$16.00All figures in C$ '000, except per share data December 31 year end

Share Price $11.9552 Week High $14.4952 Week Low $10.75Shares Outstanding (mln) 145Market Cap. (mln) $1,735Key Multiples 2009 2010E 2011EWestJet P/E 16.8x 14.3x 10.7xPeer P/E 24.1x 12.7x 9.6xWestJet EV/EBITDA 4.5x 4.4x 3.7xPeer EV/EBITDA 8.7x 7.6x 6.2xWestJet P/CF 5.3x 6.3x 5.7xPeer P/CF 7.7x 9.2x 7.8xOperating Ratios 2009 2010E 2011EOperating Margin 9.2% 8.7% 10.2%Return On Equity 7.1% 8.2% 10.6%Current Ratio 1.48 1.55 1.32Quick Ratio 1.37 1.45 1.21LT Debt To Total Capitalization 43.1% 39.8% 36.3%Dividend Yield 0.0% 0.0% 0.0%Income Statement 2009 2010E 2011ESales 2,281 2,575 2,831EBITDA From Operations 352 359 432Earnings From Operations 98 118 162FD EPS From Operations 0.71 0.84 1.12Cash Flow 2009 2010E 2011ECFPS 2.26 1.91 2.09FCFPS 1.15 1.33 0.47Balance Sheet Q2/10Cash + ST Investments 1,077Current Assets 1,162PP&E 2,285Total Assets 3,518Current Liabilities 796LT Debt 1,008Total Liabilities 2,109Shareholders' Equity 1,409

Company DescriptionWestJet, a discount carrier airline, was founded in 1996 and has grown from a western Canadian regional carrier with three aircrafts flying to five cities to one of Canada’s main low-fare airlines, offering scheduled service to 68 destinations in Canada, the United States, Mexico and the Caribbean, with its fleet of 88 Boeing Next-Generation 737-series aircraft.

Investment Thesis1. Expanding its network - WestJet is focused on expanding its network through code sharing and interline agreements.

2. Cost containment - WestJet has a more favourable cost structure compared to many legacy airlines (i.e. non-unionized work force, no large underfunded pension, single model fleet). Key for WestJet is to continue to maintain its cost advantage.

3. Going after higher yielding customers - WestJet is focused on capturing increase share of the business travel market having recently introduced its own loyalty program.

4. Culture / profit sharing - Does "culture" work in a flat share price environment?

ManagementGregg Saretsky - President & CEOVito Culmone - VP Finance & CFOBob Cummings - EVP, Marketing & SalesHugh Dunleavy - EVP StrategyFerio Pugliese - EVP People & Culture

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3

Oct-0

4

Sep-

05

Aug-

06

Jun-

07

May-0

8

Mar-0

9

Feb-

10RASM & CASM (cents)

5

10

15

Q12005

Q4 Q3 Q2 Q12008

Q4 Q3 Q2 Q12011E

Q4012345

Operating Profit/ASM (cents) RASM (cents - LHS)CASM (cents - LHS)

ASM & Yield

15

18

20

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2005 2006 2007 2008 2009 2010E 2011E

cents

23456

bln

Yield (LHS) ASM (RHS)




Company Update


Yellow Pages Income Fund Directories Find Bottom And Verticals Stabilizing

YPG is Canada's leading publisher of telephone directories, both in print and online. YPG also operates a national platform of vertical media with approximately 160 publications and 20 websites covering four main product verticals: real estate, automotive, employment and generalist.

Although traditional print revenues are declining, we remain confident that strong online growth can offset these pressures in the near to medium term with online now representing ~19% of total directory revenues. Coming out of the recession, the Directories unit looks to have bottomed.

The Trader segment has significant exposure to both the auto and real estate segments, which we expect will rebound slowly. Organic growth in this unit continues to be weak. That said, while Trader is clearly struggling, it remains only a small portion of YPG's total asset mix.

Though signs of accelerating structural decline remain modest, and the near term yield is well supported, Yellow Pages has clearly turned into a show-me story with slower-than-expected recovery in the business. We will continue to look for material improvement in the quarterly results.








Stock Rating:

Sector Performer

Sector Weighting:

Market Weight 12-18 mo. Price Target $6.00 YLO.UN-TSX (9/13/10) $5.31 Key Indices: Toronto

3-5-Yr. EPS Gr. Rate (E) NM 52-week Range $4.83-$6.98 Shares Outstanding 503.5M Float 449.1M Shrs Avg. Daily Trading Vol. NM Market Capitalization $2,673.4M Dividend/Div Yield $0.80 / 15.1% Fiscal Year Ends December Book Value $10.36 per Shr 2010 ROE (E) NM LT Debt $2,301.9M Preferred $466.14M Common Equity $5,218.1M Convertible Available Yes Distributable CF Generated Current 2009 $1.40A 2010 $1.40E 2011 $1.24E Payout Ratio 2009 65.7% 2010 57.1% 2011 52.4% Cash Distribution Per Share 2009 $0.92A 2010 $0.80E 2011 $0.65E Cash-on-Cash Yield 2009 17.3% 2010 15.1% 2011 12.2% Company Description Yellow Pages Income Fund is Canada's largest telephone directories publisher, and a leading classified publisher through Trader Media.

www.ypg.com

Directories Find Bottom And Verticals Stabilizing - September 17, 2010

113

Yellow Pages Income Fund (YLO.UN - TSX) Sector Performer Current Price: C$5.31 Robert Bek, CFA (416-594-7454) [email protected] 12- To 18- Month Price Target: C$6.00 Tony Rizzi (416-594-7299) Tony [email protected]


EV / EBITDA Multiples 2008A 2009E 2010E 2011E Company Profie

Yellow Pages Income Fund - 6.1x 6.2x 6.1xPagesJaunes - 8.6x 8.6x 8.4xOther International Directory Peers - 6.4x 6.7x 7.0x

P / E Multiples 2008A 2009E 2010E 2011E Investment Thesis

Yellow Pages Income Fund - 13.3x 6.6x 7.3xPagesJaunes - 8.7x 9.4x 9.1xOther International Directory Peers - 2.3x 4.4x 4.5x

Key Financial Metrics 2008A 2009E 2010E 2011E

Distributable Cash Flow Yield 26.6% 25.3% 25.0% 22.1%Payout Ratio 79.9% 66.1% 57.2% 52.5%Net Debt (w/ Prefs) / EBITDA 3.4x 3.1x 3.3x 3.0x

Income Statement 2008A 2009E 2010E 2011E Chart 1: Revenues & EBITDA By Segment (2010E)

Revenue 1,696.7 1,639.9 1,654.8 1,673.5OpExEBITDA 932.7 893.4 882.9 900.1Depreciation & Amortization 186.1 142.4 205.0 210.0EBIT 746.6 751.0 677.9 690.1Interest Expense 142.3 114.6 125.3 131.1EBT 563.4 281.1 524.8 559.0Tax Expense (Recovery) 30.7 42.7 65.6 156.5


Distributable Cash Flow 2008A 2009E 2010E 2011E Key Operating Statistics

EBITDA 932.7 893.4 882.9 900.1Less:

Maintenance Capex 21.1 14.3 17.2 51.3Interest Expense 134.2 141.9 125.0 131.1Cash Taxes 0.0 0.0 0.0 60.0Other 26.5 23.0 35.7 34.0



Directories continue to post solid, yet modest growth, reflecting market dominance and online gains. While material NT pressures remain (given large urban market pressures), modest growth should be sustainable in the longer term.

Traders has shown improvement, but continues to struggle. Given the segments exposure to auto (~70%) and real estate (~17%), we expect the segment to slowly rebound. Consolidated online revenues remains a key long-term component for YLO, and growth remains robust.While many global peers are facing pressures, our YPG thesis is intact, and we remain confident in the future stability and modest growth of the franchise.

Yellow Pages is the incumbent publisher of print (with over 340 books) and online phone directories in Canada, capturing more than 90% market share. Yellow Pages also operates 137 independent print directories in the United States.

81.1% 89.6%

10.4%18.9%

0%

25%

50%

75%

100%

Revenues EBITDA

Directories Trader

Q2/09 Q2/10 y/y GrowthTraditional Print Revenue

Directory 293.2 276.2 -5.8%Vertical Media 41.1 36.5 -11.1%

Online RevenueDirectory 49.9 63.2 26.8%Vertical Media 25.4 44.5 75.0%

Total Online Revenue 75.3 107.7 43.1%% of Consolidated Revenue 18.0% 25.6%



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IMPORTANT DISCLOSURES:

Analyst Certification: Each CIBC World Markets research analyst named on the front page of this research report, or at the beginning of any subsection hereof, hereby certifies that (i) the recommendations and opinions expressed herein accurately reflect such research analyst's personal views about the company and securities that are the subject of this report and all other companies and securities mentioned in this report that are covered by such research analyst and (ii) no part of the research analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report.

Potential Conflicts of Interest: Equity research analysts employed by CIBC World Markets are compensated from revenues generated by various CIBC World Markets businesses, including the CIBC World Markets Investment Banking Department. Research analysts do not receive compensation based upon revenues from specific investment banking transactions. CIBC World Markets generally prohibits any research analyst and any member of his or her household from executing trades in the securities of a company that such research analyst covers. Additionally, CIBC World Markets generally prohibits any research analyst from serving as an officer, director or advisory board member of a company that such analyst covers.

In addition to 1% ownership positions in covered companies that are required to be specifically disclosed in this report, CIBC World Markets may have a long position of less than 1% or a short position or deal as principal in the securities discussed herein, related securities or in options, futures or other derivative instruments based thereon.

Recipients of this report are advised that any or all of the foregoing arrangements, as well as more specific disclosures set forth below, may at times give rise to potential conflicts of interest.


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Important Disclosure Footnotes for Companies Mentioned in this Report that Are Covered by CIBC World Markets Inc.: Stock Prices as of 09/22/2010: Aecon Group Inc. (2a, 2c, 2e, 2g) (ARE-TSX, C$11.95, Restricted) AGF Management Limited (2g, 3a, 3c, 13) (AGF.B-TSX, C$15.79, Sector Outperformer) Air Canada (2g, C38) (AC.B-TSX, C$2.78, Sector Outperformer - Speculative) Astral Media Inc. (2g, 3a, 3c, 7, 12, 13) (ACM.A-TSX, C$38.92, Sector Performer) Bank of Montreal (2a, 2c, 2d, 2e, 2f, 2g, 3a, 3c, 7) (BMO-TSX, C$59.42, Sector Outperformer) Bank of Nova Scotia (2a, 2c, 2e, 2g, 3a, 3c, 7) (BNS-TSX, C$53.05, Sector Performer) BCE Inc. (2g, 7, CD2) (BCE-TSX, C$33.81, Sector Performer) Bell Aliant Regional Comm. Income Fund (2g, 3a, 3c, 7) (BA.UN-TSX, C$25.93, Sector Performer) Bird Construction Income Fund (2g) (BDT.UN-TSX, C$37.58, Sector Performer) Bombardier Inc. (2a, 2d, 2e, 2f, 2g, 7, 12) (BBD.B-TSX, C$4.89, Sector Outperformer) Brookfield Asset Management (2a, 2c, 2e, 2g, 3a, 3c, 7, 14) (BAM-NYSE, US$27.31, Sector Outperformer) Brookfield Office Properties Corporation (2a, 2c, 2e, 2g, 3a, 3c) (BPO-NYSE, US$15.30, Sector Performer) Brookfield Renewable Power Fund (2a, 2c, 2e, 2g, 3a, 7) (BRC.UN-TSX, C$20.74, Sector Performer) CAE Inc. (2g, 4a, 4b, 9) (CAE-TSX, C$10.67, Sector Outperformer) Canadian Imperial Bank of Commerce (2a, 2c, 2d, 2e, 2f, 2g, 3a, 3c, 6a, 7, 8, 9) (CM-TSX, C$73.67, Not Rated) Canadian National Railway Co. (2g, 7, 9) (CNR-TSX, C$66.44, Sector Performer) Canadian Pacific Railway Ltd. (2a, 2c, 2e, 2g, 7, 9) (CP-TSX, C$63.55, Sector Performer) Canadian Western Bank (2g, 7) (CWB-TSX, C$24.01, Sector Underperformer) CGI Group Inc. (2g, 9, 12) (GIB.A-TSX, C$14.73, Sector Outperformer) CI Financial Corp. (2a, 2c, 2e, 2g) (CIX-TSX, C$20.24, Sector Underperformer) Cineplex Galaxy Income Fund (2g, 7, 9) (CGX.UN-TSX, C$21.01, Sector Outperformer) Constellation Software Inc. (2g) (CSU-TSX, C$43.98, Sector Outperformer) Corus Entertainment Inc. (2a, 2c, 2e, 2g, 7, 13) (CJR.B-TSX, C$21.39, Sector Performer) Descartes Systems Group Inc. (2a, 2c, 2e, 2g, 3a, 7) (DSGX-OTC, US$5.87, Sector Outperformer) FirstService Corporation (2a, 2c, 2e, 2g, 12) (FSV-TSX, C$24.03, Sector Outperformer) GENIVAR Income Fund (2a, 2c, 2e, 2g, 7) (GNV.UN-TSX, C$27.79, Sector Outperformer) Genworth MI Canada Inc. (2a, 2c, 2g, 7) (MIC-TSX, C$25.50, Sector Outperformer) Great-West Lifeco Inc. (2a, 2c, 2e) (GWO-TSX, C$24.81, Sector Underperformer) IBI Income Fund (2a, 2c, 2e, 2g) (IBG.UN-TSX, C$13.44, Sector Outperformer) IESI - BFC Ltd. (2g, 4a, 4b, 7) (BIN-NYSE, US$22.94, Sector Performer) IGM Financial Inc. (2a, 2c, 2e) (IGM-TSX, C$41.47, Sector Underperformer) Industrial Alliance Insurance And Financial Services Inc. (2a, 2c, 2e, 2g, 7) (IAG-TSX, C$32.40, Sector Outperformer) Intact Financial Corp. (2a, 2c, 2e, 2g, 3a, 3c, 7, 14) (IFC-TSX, C$44.41, Sector Performer) Jazz Air Income Fund (2a, 2c, 2e, 2g, 7) (JAZ.UN-TSX, C$4.38, Sector Performer) Laurentian Bank (2g) (LB-TSX, C$42.80, Sector Performer) Linamar Corporation (2g, 9) (LNR-TSX, C$19.18, Sector Performer) Magna International Inc. (2a, 2e, 2g, 4a, 4b, 7, 12) (MGA-NYSE, US$79.09, Sector Outperformer) Manitoba Telecom Services Inc. (2a, 2c, 2e, 2g, 7) (MBT-TSX, C$27.57, Sector Performer) Manulife Financial Corporation (2a, 2c, 2e, 3a, 3c, 7) (MFC-TSX, C$13.00, Sector Performer) National Bank Of Canada (2a, 2e, 2g, 3a, 3c, 7, 8) (NA-TSX, C$64.14, Sector Performer) New Flyer Industries Inc. (2g, 7) (NFI.UN-TSX, C$11.77, Sector Outperformer) Power Corporation of Canada (2g, 7, 12) (POW-TSX, C$26.94, Sector Performer) Power Financial Corporation (2a, 2c, 2e, 2g) (PWF-TSX, C$29.17, Sector Performer) Quebecor Inc. (2g, 12) (QBR.B-TSX, C$33.95, Sector Outperformer) Rogers Communications Inc. (2a, 2c, 2e, 2g, 3a, 3c, 7, 13) (RCI.B-TSX, C$38.98, Sector Outperformer) RONA Inc. (2g, 7) (RON-TSX, C$12.82, Sector Performer) Royal Bank of Canada (2a, 2c, 2d, 2e, 2f, 2g, 3a, 3c, 7) (RY-TSX, C$53.02, Sector Performer)


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Important Disclosure Footnotes for Companies Mentioned in this Report that Are Covered by CIBC World Markets Inc.: (Continued) Stock Prices as of 09/22/2010: Russel Metals Inc. (2g) (RUS-TSX, C$20.06, Sector Underperformer) Shaw Communications Inc. (2a, 2c, 2e, 2g, 3a, 3c, 13) (SJR.B-TSX, C$22.13, Sector Outperformer) SNC-Lavalin Group Inc. (2g, 7) (SNC-TSX, C$49.88, Sector Outperformer) Stantec Inc. (2g, 3a, 3c) (STN-TSX, C$27.49, Sector Performer) Sun Life Financial Inc. (2a, 2c, 2e, 2g, 7) (SLF-TSX, C$26.90, Sector Performer) TD Bank (2a, 2c, 2e, 2f, 2g, 3a, 3c, 7) (TD-TSX, C$74.36, Sector Outperformer) Teck Resources Limited (2a, 2b, 2c, 2e, 2f, 2g, 7, 9, 12) (TCK.B-TSX, C$39.99, Sector Outperformer) TELUS Corporation (2a, 2c, 2e, 2g, 7, 13) (T-TSX, C$43.89, Sector Outperformer) Torstar Corporation (2g, 13, CD2) (TS.B-TSX, C$12.57, Sector Performer) Transat A.T. Inc. (2a, 2c, 2e, 2g) (TRZ.B-TSX, C$14.99, Sector Performer) Transcontinental Inc. (2a, 2c, 2e, 2g, 12) (TCL.A-TSX, C$13.55, Sector Performer) TVA Group Inc. (2g, 13) (TVA.B-TSX, C$12.50, Sector Performer) WestJet Airlines Ltd. (2a, 2c, 2e, 2g) (WJA-TSX, C$11.82, Sector Performer) Yellow Pages Income Fund (2a, 2c, 2e, 2g, 3a, 3c, 7) (YLO.UN-TSX, C$5.50, Sector Performer)

Companies Mentioned in this Report that Are Not Covered by CIBC World Markets Inc.: Stock Prices as of 09/22/2010: Brookfield Homes (BHS-NYSE, US$8.28, Not Rated) Carmike Cinemas Inc. (CKEC-NASDAQ, US$7.54, Not Rated) Cinemark Holdings Inc. (CNK-NYSE, US$15.50, Not Rated) Comcast (CMCSA-NASDAQ, US$18.07, Not Rated) Dorel Industries Inc. (DII.B-TSX, C$33.58, Not Rated) Gannett Co. Inc. (GCI-NYSE, US$12.27, Not Rated) Home Capital Group (HCG-TSX, C$43.43, Not Rated) Home Depot (HD-NYSE, US$30.81, Not Rated) Lowe's Companies (LOW-NYSE, US$21.66, Not Rated) McClatchy Co. (MNI-NYSE, US$3.77, Not Rated) PagesJaunes Group (PAJ-PA, €8.49, Not Rated) Pargesa Holding SA (PARG-S, [CHF]71.30, Not Rated) R.R. Donnelley (RRD-NASDAQ, US$16.60, Not Rated) Regal Entertainment Group (RGC-NYSE, US$12.62, Not Rated) Time Warner Cable (TWC-NYSE, US$51.50, Not Rated) TMX Group Inc. (X-TSX, C$30.00, Not Rated) Western Financial Group (WES-TSX, C$2.34, Not Rated) Important disclosure footnotes that correspond to the footnotes in this table may be found in the "Key to Important Disclosure Footnotes" section of this report.


117

Key to Important Disclosure Footnotes: 1 CIBC World Markets Corp. makes a market in the securities of this company. 2a This company is a client for which a CIBC World Markets company has performed investment banking services

in the past 12 months. 2b CIBC World Markets Corp. has managed or co-managed a public offering of securities for this company in the

past 12 months. 2c CIBC World Markets Inc. has managed or co-managed a public offering of securities for this company in the

past 12 months. 2d CIBC World Markets Corp. has received compensation for investment banking services from this company in

the past 12 months. 2e CIBC World Markets Inc. has received compensation for investment banking services from this company in the

past 12 months. 2f CIBC World Markets Corp. expects to receive or intends to seek compensation for investment banking services

from this company in the next 3 months. 2g CIBC World Markets Inc. expects to receive or intends to seek compensation for investment banking services

from this company in the next 3 months. 3a This company is a client for which a CIBC World Markets company has performed non-investment banking,

securities-related services in the past 12 months. 3b CIBC World Markets Corp. has received compensation for non-investment banking, securities-related services

from this company in the past 12 months. 3c CIBC World Markets Inc. has received compensation for non-investment banking, securities-related services

from this company in the past 12 months. 4a This company is a client for which a CIBC World Markets company has performed non-investment banking,

non-securities-related services in the past 12 months. 4b CIBC World Markets Corp. has received compensation for non-investment banking, non-securities-related

services from this company in the past 12 months. 4c CIBC World Markets Inc. has received compensation for non-investment banking, non-securities-related

services from this company in the past 12 months. 5a The CIBC World Markets Corp. analyst(s) who covers this company also has a long position in its common

equity securities. 5b A member of the household of a CIBC World Markets Corp. research analyst who covers this company has a

long position in the common equity securities of this company. 6a The CIBC World Markets Inc. fundamental analyst(s) who covers this company also has a long position in its

common equity securities. 6b A member of the household of a CIBC World Markets Inc. fundamental research analyst who covers this

company has a long position in the common equity securities of this company. 7 CIBC World Markets Corp., CIBC World Markets Inc., and their affiliates, in the aggregate, beneficially own 1%

or more of a class of equity securities issued by this company. 8 An executive of CIBC World Markets Inc. or any analyst involved in the preparation of this research report has

provided services to this company for remuneration in the past 12 months. 9 A senior executive member or director of Canadian Imperial Bank of Commerce ("CIBC"), the parent company

to CIBC World Markets Inc. and CIBC World Markets Corp., or a member of his/her household is an officer, director or advisory board member of this company or one of its subsidiaries.

10 Canadian Imperial Bank of Commerce ("CIBC"), the parent company to CIBC World Markets Inc. and CIBC World Markets Corp., has a significant credit relationship with this company.

11 The equity securities of this company are restricted voting shares. 12 The equity securities of this company are subordinate voting shares. 13 The equity securities of this company are non-voting shares. 14 The equity securities of this company are limited voting shares. CD2 CIBC World Markets Inc. is acting as financial advisor to Ontario Teachers Pension Plan in the proposed sale of

CTVglobemedia Inc. to BCE Inc. C38 The Class A shares of Air Canada are variable voting shares. The Class B shares of Air Canada are converted

to Class A shares if they become held by a person who is not a Canadian.


118

CIBC World Markets Inc. Price Chart

For price and performance information charts required under NYSE and NASD rules, please visit CIBC on the web at http://apps.cibcwm.com/sec2711 or write to CIBC World Markets Inc., Brookfield Place, 161 Bay Street, 4th Floor, Toronto, Ontario M5J 2S8, Attn: Research Disclosure Chart Request.

CIBC World Markets Inc. Stock Rating System

Abbreviation Rating Description

Stock Ratings

SO Sector Outperformer Stock is expected to outperform the sector during the next 12-18 months.

SP Sector Performer Stock is expected to perform in line with the sector during the next 12-18 months.

SU Sector Underperformer Stock is expected to underperform the sector during the next 12-18 months.

NR Not Rated CIBC World Markets does not maintain an investment recommendation on the stock.

R Restricted CIBC World Markets is restricted*** from rating the stock.

Sector Weightings**

O Overweight Sector is expected to outperform the broader market averages.

M Market Weight Sector is expected to equal the performance of the broader market averages.

U Underweight Sector is expected to underperform the broader market averages.

NA None Sector rating is not applicable.

**Broader market averages refer to the S&P 500 in the U.S. and the S&P/TSX Composite in Canada. "Speculative" indicates that an investment in this security involves a high amount of risk due to volatility and/or liquidity issues. ***Restricted due to a potential conflict of interest.

Ratings Distribution*: CIBC World Markets Inc. Coverage Universe

(as of 17 Sep 2010) Count Percent Inv. Banking Relationships Count Percent

Sector Outperformer (Buy) 135 43.1% Sector Outperformer (Buy) 132 97.8%

Sector Performer (Hold/Neutral) 144 46.0% Sector Performer (Hold/Neutral) 135 93.8%

Sector Underperformer (Sell) 23 7.3% Sector Underperformer (Sell) 19 82.6%

Restricted 10 3.2% Restricted 10 100.0%

*Although the investment recommendations within the three-tiered, relative stock rating system utilized by CIBC World Markets Inc. do not correlate to buy, hold and sell recommendations, for the purposes of complying with NYSE and NASD rules, CIBC World Markets Inc. has assigned buy ratings to securities rated Sector Outperformer, hold ratings to securities rated Sector Performer, and sell ratings to securities rated Sector Underperformer without taking into consideration the analyst's sector weighting.

Important disclosures required by IIROC Rule 3400, including potential conflicts of interest information, our system for rating investment opportunities and our dissemination policy can be obtained by visiting CIBC World Markets on the web at http://researchcentral.cibcwm.com under 'Quick Links' or by writing to CIBC World Markets Inc., Brookfield Place, 161 Bay Street, 4th Floor, Toronto, Ontario M5J 2S8, Attention: Research Disclosures Request.


119

Legal Disclaimer

This report is issued and approved for distribution by (a) in Canada, CIBC World Markets Inc., a member of the Investment Industry Regulatory Organization of Canada (“IIROC”), the Toronto Stock Exchange, the TSX Venture Exchange and CIPF, (b) in the United Kingdom, CIBC World Markets plc, which is regulated by the Financial Services Authority ("FSA"), and (c) in Australia, CIBC Australia Limited, a member of the Australian Stock Exchange and regulated by the ASIC (collectively, "CIBC World Markets") and (d) in the United States either by (i) CIBC World Markets Inc. for distribution only to U.S. Major Institutional Investors (“MII”) (as such term is defined in SEC Rule 15a-6) or (ii) CIBC World Markets Corp., a member of the Financial Industry Regulatory Authority (“FINRA”). U.S. MIIs receiving this report from CIBC World Markets Inc. (the Canadian broker-dealer) are required to effect transactions (other than negotiating their terms) in securities discussed in the report through CIBC World Markets Corp. (the U.S. broker-dealer). This report is provided, for informational purposes only, to institutional investor and retail clients of CIBC World Markets in Canada, and does not constitute an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction where such offer or solicitation would be prohibited. This document and any of the products and information contained herein are not intended for the use of private investors in the United Kingdom. Such investors will not be able to enter into agreements or purchase products mentioned herein from CIBC World Markets plc. The comments and views expressed in this document are meant for the general interests of wholesale clients of CIBC Australia Limited. The securities mentioned in this report may not be suitable for all types of investors. This report does not take into account the investment objectives, financial situation or specific needs of any particular client of CIBC World Markets. Recipients should consider this report as only a single factor in making an investment decision and should not rely solely on investment recommendations contained herein, if any, as a substitution for the exercise of independent judgment of the merits and risks of investments. The analyst writing the report is not a person or company with actual, implied or apparent authority to act on behalf of any issuer mentioned in the report. Before making an investment decision with respect to any security recommended in this report, the recipient should consider whether such recommendation is appropriate given the recipient's particular investment needs, objectives and financial circumstances. CIBC World Markets suggests that, prior to acting on any of the recommendations herein, Canadian retail clients of CIBC World Markets contact one of our client advisers in your jurisdiction to discuss your particular circumstances. Non-client recipients of this report who are not institutional investor clients of CIBC World Markets should consult with an independent financial advisor prior to making any investment decision based on this report or for any necessary explanation of its contents. CIBC World Markets will not treat non-client recipients as its clients by virtue of their receiving this report. Past performance is not a guarantee of future results, and no representation or warranty, express or implied, is made regarding future performance of any security mentioned in this report. The price of the securities mentioned in this report and the income they produce may fluctuate and/or be adversely affected by exchange rates, and investors may realize losses on investments in such securities, including the loss of investment principal. CIBC World Markets accepts no liability for any loss arising from the use of information contained in this report, except to the extent that liability may arise under specific statutes or regulations applicable to CIBC World Markets. Information, opinions and statistical data contained in this report were obtained or derived from sources believed to be reliable, but CIBC World Markets does not represent that any such information, opinion or statistical data is accurate or complete (with the exception of information contained in the Important Disclosures section of this report provided by CIBC World Markets or individual research analysts), and they should not be relied upon as such. 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Recipients who choose to access such third-party web sites or follow such hyperlinks do so at their own risk. Although each company issuing this report is a wholly owned subsidiary of Canadian Imperial Bank of Commerce ("CIBC"), each is solely responsible for its contractual obligations and commitments, and any securities products offered or recommended to or purchased or sold in any client accounts (i) will not be insured by the Federal Deposit Insurance Corporation ("FDIC"), the Canada Deposit Insurance Corporation or other similar deposit insurance, (ii) will not be deposits or other obligations of CIBC, (iii) will not be endorsed or guaranteed by CIBC, and (iv) will be subject to investment risks, including possible loss of the principal invested. The CIBC trademark is used under license. © 2010 CIBC World Markets Inc. All rights reserved. Unauthorized use, distribution, duplication or disclosure


120

Legal Disclaimer (Continued)

without the prior written permission of CIBC World Markets is prohibited by law and may result in prosecution. CIBC World Markets Inc. is a wholly-owned subsidiary of Canadian Imperial Bank of Commerce. Canadian Imperial Bank of Commerce is a related issuer of CIBC World Markets Inc.

CIBC - 9th Annual Easter Insitutional Investor Conference

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