April 19, 2010

TODAY'S HIGHLIGHTS

U.S. Canadian / Int'l

Rating Downgrades Cenovus Energy

Estimates/Targets Raised Valassis

Mattel

Sector Revisions Oil & Gas Producers: Spring Cleaning: Marking to Market Our Commodity...

Rating Downgrades: Cenovus Energy North American E&P: Commodity Price Forecast Revision North American E&P: Spring Cleaning: Marking to Market Our Commodity... Airlines: Canadian Airlines Q1 Results Preview: Nothing to Write Home About

Featured Reports Basic Points - A Slow Boat to China Entertainment: Perspectives on the Filmed Entertainment Industry 2010

ENERGY & UTILITIES

Oil & Gas Producers Sector Comment Spring Cleaning: Marking to Market Our Commodity...

Oil & Gas Producers Sector Comment Q1/10 Preview: Less Help from Hedging

Integrated Oils Canada Cenovus Energy Downgrading to Market Perform on Share Price...

Integrated Oils Sector Comment Q1/10 Preview: Gradual Improvement

Refiners Sector Comment Q1/10 Preview: Another Weak Quarter on Poor...

North American E&P Sector Comment Commodity Price Forecast Revision

North American E&P Sector Comment Spring Cleaning: Marking to Market Our Commodity...

North American E&P Sector Comment Q1/10 Preview: Less Help from Hedging

Services & Equipment U.S. Sector Comment Op-Ed, Week of April 19, 2010

Electric Util. & Ind. Power U.S. Entergy Notes from the Road: Resolving Uncertainty

Electric Util. & Ind. Power U.S. Sector Comment Notes From the Road: Meeting With PJM

Pipelines U.S. El Paso NDR Update: Notes From a Texas Traveler

MATERIALS

Metals & Mining Canada Labrador Iron Ore Royalty Conversion to Corporation, Business as Usual

CAPITAL GOODS & SERVICES

Marketing U.S. Valassis Raising 2011 Cash EPS for Note Repurchase

Airlines Sector Comment Canadian Airlines Q1 Results Preview: Nothing to Write...

CONSUMER

Toys & Juvenile Prod. U.S. Mattel 1Q10 Results- Continued Solid Execution, Raising...

TECH/TELECOM/MEDIA

Entertainment Sector Comment Perspectives on the Filmed Entertainment Industry 2010

HEALTH CARE

Major Pharma U.S. Eli Lilly 1Q10 Preview

This report was prepared in part by an analyst(s) employed by a Canadian affiliate, BMO Nesbitt Burns Inc., and who is (are) not registered as a research analyst(s) under FINRA rules. For disclosure statements, including the Analyst's Certification, please refer to pages 44 to 45.

Energy - Oil & Gas Sector Rating:

Oil & Gas Services (U.S.) Outperform Oil & Gas Services (CDA) Market Perform Integrated Oils Market Perform Oil & Gas Producers Market Perform Refiners Underperform

April 19, 2010 Research Comment Randy Ollenberger (403) 515-1502 BMO Nesbitt Burns Inc. (Canada) Christopher Brown, P.Eng (403) 515-1574 BMO Nesbitt Burns Inc. (Canada)

Jim Byrne, P.Eng., CFA (403) 515-1557 BMO Nesbitt Burns Inc. (Canada)

Alan Laws (303) 436-1125 BMO Capital Markets Corp. (U.S.)

Mark Leggett, CFA (403) 515-1508 BMO Nesbitt Burns Inc. (Canada)

Michael Mazar, CFA (403) 515-1538 BMO Nesbitt Burns Inc. (Canada)

Dan McSpirit (303) 436-1117 BMO Capital Markets Corp. (U.S.)

Gordon Tait, CFA (403) 515-1501 BMO Nesbitt Burns Inc. (Canada)

Spring Cleaning: Marking to Market Our Commodity Assumptions

Summary

We are raising our West Texas Intermediate

(WTI) crude oil assumptions by US$5/bbl in

2010 and 2011 to US$80/bbl and US$85/bbl,

respectively. We are lowering our 2010 Henry

Hub assumption to US$4.50/Mcf from

US$4.75/Mcf and our 2011 estimate to

US$5.00/Mcf from US$5.50/Mcf. We believe

there is further downside risk to our gas price

assumptions.

We expect North American oil and gas equity

performance to be relatively flat over the next

quarter as oil price strength is offset by gas

price weakness. Increasing M&A activity may

offer some glimmer of hope.

Our top recommendations are Bankers

Petroleum, Baytex, Black Diamond,

Canadian Natural Resources, Computer

Modelling Group, Crew, Crescent Point,

Halliburton, Legacy, Newfield, Occidental,

PetroBakken, Petrominerales, Pioneer,

Quicksilver, Schlumberger, Suncor and

Talisman. We are lowering our rating for

Cenovus to Market Perform due to share price

appreciation.

We are marking to market our commodity price estimates to reflect actual first

quarter prices and our updated assessment of supply and demand

fundamentals for crude oil and natural gas. Crude oil and natural gas prices

were generally in line with our expectations in Q1/10 and as such we are

making relatively modest revisions to our principal commodity prices

assumptions; however, the Canadian dollar has continued to strengthen versus

the US dollar, which does result in somewhat larger revisions to our Canadian

dollar denominated commodity price estimates. We are raising our West

Texas Intermediate (WTI) crude oil price assumption by US$5/bbl for 2010

and 2011 to US$80/bbl and US$85/bbl, respectively. These are roughly

US$5/bbl below current forward market prices, which we believe are

somewhat ahead of underlying fundamentals. For natural gas, we are

lowering our 2010 Henry Hub assumption to US$4.50/Mcf from

US$4.75/Mcf to reflect actual first quarter prices and our 2011 estimate to

US$5.00/Mcf from US$5.50/Mcf to reflect the ‘spill over’ effect of 2010

drilling activity into 2011. We believe there is downside risk to our estimates

if current drilling levels continue unabated. Our long-term commodity price

assumptions are unchanged.

North American oil and gas indices were essentially flat in the first quarter,

consistent with the relatively flat commodity price environment. We think

that equity performance will remain relatively flat for the next quarter

assuming a modest increase in crude oil prices but further weakness in natural

gas prices, although an uptick in M&A activity could provide some

momentum. We believe crude oil prices will begin to strengthen further in

late-2010 and 2011. Accordingly, investors may want to consider increasing

exposure to large cap crude oil leveraged companies over the next two

quarters.

This report was prepared in part by an analyst(s) employed by a Canadian affiliate, BMO Nesbitt Burns Inc., and who is (are) not registered as a research analyst(s) under FINRA rules. For disclosure statements, including the Analyst's Certification, please refer to pages 6 to 7.

Energy - Oil & Gas: Senior Producers

Industry Rating: Market Perform

April 19, 2010 Research Comment Jim Byrne, P. Eng., CFA (403) 515-1557 BMO Nesbitt Burns Inc. (Canada)

Dan McSpirit (303) 436-1117 BMO Capital Markets Corp. (U.S.)

Randy Ollenberger (403) 515-1502 BMO Nesbitt Burns Inc. (Canada)

Assoc: Matthew Brink/Graham Cooke, CFA/ Jared Dziuba/Chris Sloan

Q1/10 Preview: Less Help from Hedging

First-quarter reporting for the Senior Producers begins on April 21 with

results from EnCana. We expect the North American Senior Producers group

to report higher quarterly cash flow relative to last year driven by stronger

prices, but slightly lower than the prior quarter levels as only modestly higher

commodity prices and production levels were offset for several companies by

lower realized gains from hedging. Production from the group is expected to

be higher relative to both periods despite comparatively lower spending for

many in the group in the last year. We think this is due to the fact that while

spending was generally lower it was also high-graded and directed to those

plays with better returns or production growth. Strong spending in the shale

plays also helped to offset declines in conventional assets for many of the

producers.

Summary

West Texas Intermediate (WTI) crude oil

averaged US$78.08/bbl in Q1/10, up 83%

from Q1/09 and 3% from Q4/09. Henry Hub

natural gas prices averaged US$5.02/Mcf in

Q1/10, up 12% from Q1/09 and up 2% from

Q4/09.

First-quarter cash flow for the North

American Senior Producers group is expected

to be slightly higher than Q1/09 largely

reflecting significantly higher commodity

prices. In comparison to Q4/09, cash flow is

expected to fall slightly for the group, with

several companies expected to report lower

gains from hedging this quarter.

We continue to recommend a market weight

exposure to the North American oil and gas

group. Our top large cap recommendations

include Canadian Natural Resources,

Occidental, Newfield, Petrohawk, Pioneer

and Talisman.

Crude oil prices continued to improve in the first quarter with West Texas

Intermediate (WTI) averaging US$78.80/bbl, 3% above Q4/09 and 83%

above the Q1/09. Canadian heavy prices also improved during the quarter,

trading at an average discount of only 11% to WTI, which is an improvement

from the prior quarter and remains well below the historical average of more

than 25%. Natural gas prices strengthened slightly over the course of the

quarter and year following a colder-than-normal winter. The NYMEX front-

month natural gas prices averaged US$5.02/Mcf in Q1/10 up 2% from Q4/09

and up 12% from last year.

We continue to recommend that investors maintain a cautious investment

posture toward the oil and gas producer group, based on our expectation for

range-bound crude oil prices and potentially weaker natural gas prices.

Current market valuations fully reflect forward market commodity price

expectations and, as such, offer limited prospect for a further upward re-

valuation. We continue to favour companies leveraged to crude oil over

natural gas. Our top recommendations among the large cap companies are

Canadian Natural Resources, Occidental, Newfield, Petrohawk, Pioneer

and Talisman.

Please see page 2 for analyst coverage.

This report was prepared by an analyst(s) employ d as a research analyst(s) under FINRA rules. For disclosure statements, including

Cenovus Energy (CVE-TSX; CVE-NYSE) Stock Rating: Market PerformIndustry Rating: Market Perform

April 19, 2010 Research Comment Calgary, Alberta

Randy Ollenberger BMO Nesbitt Burns Inc. (403) 515-1502 Randy.Ollenberger@bmo.com Assoc: Matthew Brink

Price (16-Apr) $29.16 52-Week High $32.00 Target Price $30.00 52-Week Low $24.26 Downgrading to Market Perform on Share Price

Appreciation

2.00

2.05

Cenovus Energy Inc. (CVE)Price: High,Low,Close Earnings/Share

24

26

28

30

32

34

Event We are downgrading Cenovus shares to Market Perform from Outperform to

reflect strong share price appreciation…

ed by BMO Nesbitt Burns Inc., and who is (are) not registerethe Analyst's Certification, please refer to pages 4 to 7.

Impact

Neutral.

Forecasts We are revising our financial estimates in conjunction with our commodity price

revision. We are increasing our 2010 earnings estimate to $1.55 from $1.43 but

lowering our 2011 estimate to $1.84 from $1.91.

Valuation We believe that Cenovus’ shares are fairly valued trading at a 2010 P/E multiple

of 18.8x and an 12% discount to our 2010 net asset value estimate, which is

ahead of its Canadian integrated peers. The shares have performed well recently

as the market has anticipated a positive impact from the company’s release of its

updated contingent resource assessment on April 21. Our $30 target price

incorporates a 10% discount to our 2010 net asset value estimate of $33.25.

Recommendation We are lowering our rating for Cenovus shares to Market Perform from

Outperform.

0

10

20Volume (mln)

0

10

20

Nov Dec Jan Feb Mar Apr2009 2010

50

100

150CVE Relative to S&P/TSX Comp

Last Data Point: April 16, 2010

50

100

150

(FY-Dec.) 2008A 2009A 2010E 2011E EPS $2.40 $2.02 $1.55 $1.84P/E 18.8x 15.8x CFPS $4.17 $3.79 $3.76 $4.06P/CFPS 7.8x 7.2x NAV $30.83 $37.28 $33.25 $36.26 EV/EBITDA na 7.2x 8.3x 7.0x ROCE (%) 17% 13% 10% 12% LT Liab. 26% 25% 25% 18% Quarterly EPS Q1 Q2 Q3 Q4 2008A na na na na 2009A $0.56 $0.69 $0.56 $0.21 2010E $0.39 $0.43 $0.42 $0.32 Dividend $0.80 Yield 2.7% Book Value $12.87 Price/Book 2.3x Shares O/S (mm) 751.3 Mkt. Cap ($mm) $21,908 Float O/S (mm) 751.3 Float Cap ($mm) $21,908 Wkly Vol (000s) 13,653 Wkly $ Vol (mm) $366.5 Net Debt ($mm) $3,207.0 Next Rep. Date Apr (E)

Notes: All values in C$; EPS are diluted based on continuing operations; CFPS is diluted discretionary Major Shareholders: Widely Held First Call Mean Estimates: CENOVUS ENERGY INC (US$) 2010E: $1.66; 2011E: $2.12

Changes Annual EPS Annual CFPS Quarterly EPS Rating 2010E $1.43 to $1.55 2010E $3.66 to $3.76 Q1/10E $0.36 to $0.39 OP to Mkt 2011E $1.91 to $1.84 2011E $4.22 to $4.06 Q2/10E $0.35 to $0.43 Q3/10E $0.41 to $0.42 Q4/10E $0.30 to $0.32

This report was prepared in part by an analyst(s) employed by a Canadian affiliate, BMO Nesbitt Burns Inc., and who is (are) not registered as a research analyst(s) under FINRA rules. For disclosure statements, including the Analyst's Certification, please refer to pages 6 to 7.

Energy - Oil & Gas: Integrated Oils

Industry Rating: Market Perform

April 19, 2010 Research Comment Calgary, Alberta Jim Byrne, P. Eng., CFA (403) 515-1557 BMO Nesbitt Burns Inc. (Canada)

Randy Ollenberger (403) 515-1502 BMO Nesbitt Burns Inc. (Canada)

Assoc: Matthew Brink/Graham Cooke, CFA/ Jared Dziuba

Q1/10 Preview: Gradual Improvement

The North American Integrated Oils begin reporting first quarter operating

and financial results on April 27, led by Husky Energy. On average, we

expect the group’s earnings to be slightly better than the fourth quarter,

reflecting a modest improvement in crude oil prices. Canadian heavy oil

producers in particular should benefit from the relative performance of heavy

oil prices; however, the earnings of Canadian companies will be negatively

impacted by a stronger Canadian dollar. We expect the group’s earnings to be

on average 8% higher than Q4/09 and 19% higher than in Q1/09.

Summary

First-quarter results for the North American

Integrateds should be slightly better than

Q4/09 and Q1/09 as a result of modestly

higher crude oil and natural gas prices. We

expect the group’s earnings will be on average

8% higher than Q4/09 and 19% higher than in

Q1/09.

Higher upstream results should be driven by a

slight improvement in crude oil prices during

the first quarter. West Texas Intermediate

crude oil averaged US$78.80/bbl, 3% above

Q4/09 and 83% above Q1/09. Henry Hub

prices averaged US$5.02/Mcf, up 2% from

Q4/09 and 12% from last year.

Overall downstream results should remain

weak in the first quarter, reflecting historically

low margins and utilization rates; however,

we could see slight improvement over Q4/09

in light of modestly higher North American

refining margins. U.S. refining margins rose

27% from Q4/09 while Canadian margins

were 4% higher.

We are maintaining our Market Perform

rating for the Integrated Oils. Our Outperform

recommendations in the group include Hess

and Suncor.

Crude oil prices continued to improve in the fourth quarter with West Texas

Intermediate (WTI) averaging US$78.80/bbl, 3% above Q3/09 and 83%

higher than Q1/09. Canadian heavy oil prices strengthened further against

light crude oil benchmarks, trading at an average discount of only 12% to

WTI on the quarter compared to a 16% discount in Q4/09 and a historical

average of nearly 30%. Natural gas prices also strengthened somewhat over

the quarter with cold weather, and were generally stronger than the year-ago

period. NYMEX front-month natural gas prices averaged US$5.02/Mcf in

Q1/10 up 2% from Q4/09 and 12% from last year.

North American refining margins remain relatively weak given the

combination of historically low petroleum product demand, high inventory

levels and, in our view, benchmark crude oil prices that continue to run ahead

of the fundamentals for petroleum products. U.S. refining margins averaged

US$7.59/bbl during the quarter, up 27% from Q4/09, but still down 33% from

last year. Canadian margins averaged $18.48, up 4% from Q4/09, but down

29% from last year.

We are maintaining our Market Perform rating for the Integrated Oils. Our

Outperform recommendations in the group include Hess and Suncor.

This report was prepared by an analyst(s) employed by BMO Nesbitt Burns Inc., and who is (are) not registered as a research analyst(s) under FINRA rules. For disclosure statements, including the Analyst's Certification, please refer to pages 5 to 6.

Energy - Oil & Gas: Refiners

Industry Rating: Underperform

April 19, 2010 Research Comment Calgary, Alberta Jim Byrne, P.Eng., CFA (403) 515-1557 Jim.Byrne@bmo.com Assoc: Graham Cooke, CFA

Q1/10 Preview: Another Weak Quarter on Poor Fundamentals

During Q1/10 gasoline demand was the lowest since 2004, down 1.5% year

over year, and distillate demand was at 2002 levels, an astonishing 7% decline

from Q1/09. With sluggish demand, inventories remain at or near record

highs. Distillate inventories declined throughout the first quarter but remain

significantly above the five-year average and only appear “normal” due to the

already inflated 2009 levels. Keeping these inventories under control appears

to have come at the expense of industry throughput as refinery utilization rates

were the lowest in over 10 years, averaging 80.2% during Q1/10 compared

with 82.8% in Q1/09.

Summary

During Q1/10, gasoline demand was the

lowest since 2004, down 1.5% year over year,

and distillate demand was at 2002 levels, an

astonishing 7% decline from Q1/09.

Refinery utilization rates were the lowest in

over 10 years, averaging 80.2% during Q1/10

compared with 82.8% in Q1/09.

During Q1/10, U.S. margins averaged

$7.59/bbl compared with the Q1/09 average of

$11.29/bbl, for the lowest average since 2003.

We are expecting a median decline of 144%

relative to Q1/09 and a 67% increase relative

to Q4/09.

We continue to rate the sector Underperform

as the combination of low utilization (excess

capacity), low levels of demand and high

inventory levels keep refining margins under

pressure.

These low utilization rates have limited the pricing power of the independent

refining industry, placing downward pressure on margins. During Q1/10, U.S.

margins averaged $7.59/bbl compared with the Q1/09 average of $11.29/bbl,

the lowest average since 2003. West Coast margins were highest on an

absolute basis, averaging $10.17/bbl, but significantly weaker than historical

premiums relative to other regions. In contrast, Northeast margins were

particularly strong averaging $8.83/bbl.

Given the weak fundamentals present during Q1/10 we are expecting a

median decline of 144% relative to Q1/09 with the largest decrease expected

from Tesoro. The smallest decline is expected to be reported by Sunoco due

to the resiliency of Northeast margins. However, relative to the large losses

reported in Q4/09, the current quarter represents a significant improvement

with a median increase of 67%. Similar to the year-over-year results, the

largest improvement quarter over quarter is expected from Sunoco and the

weakest improvement is expected from Tesoro.

This report was prepared by an analyst(s) employed by BMO Nesbitt Burns Inc., and who is (are) not registered as a research analyst(s) under FINRA rules. For disclosure statements, including the Analyst's Certification, please refer to pages 5 to 6.

Energy - Royalty Trusts

Industry Rating: Market Perform

April 19, 2010 Research Comment Calgary, Alberta Gordon Tait, CFA (403) 515-1501 Gordon.Tait@bmo.com Assoc: Chris Bolton, CFA/Peter Kranz, P. Eng.

Commodity Price Forecast Revision

BMO CM Oil & Gas Research revised its 2010 and 2011 estimates. WTI

crude oil forecasts were raised to US$80/bbl from US$75/bbl in 2010 and to

US$85/bbl from US$80/bbl in 2011. AECO natural gas estimates were

increased to C$4.29/Mcf from C$4.26/Mcf in 2010 and decreased to

C$4.57/Mcf from C$5.05/Mcf in 2011. For more details, please see the Oil &

Gas Research Comment dated April 19, 2010.

Summary

BMO CM Oil & Gas Research revised its

2010 and 2011 estimates.

WTI crude oil forecasts were raised to

US$80/bbl from US$75/bbl in 2010 and to

US$85/bbl from US$80/bbl in 2011.

AECO natural gas estimates were increased to

C$4.29/Mcf from C$4.26/Mcf in 2010 and

decreased to C$4.57/Mcf from C$5.05/Mcf in

2011.

On average, the commodity price and

exchange revisions resulted in a 3.1% increase

to our 2010 cash flow estimates and a 2.8%

decrease to our 2011 estimates.

With their impending transition to corporate

structures in 2011, we believe that most trusts

are inclined to redirect any excess cash toward

debt repayment or capital reinvestment.

We continue to think that long-term resource

projects offer significant upside potential.

We have Outperform ratings on ARC,

Baytex, Bonavista, Crescent Point, NAL Oil

& Gas, Pengrowth, and Vermilion.

We are currently restricted on Peyto.

On average, the revised assumptions resulted in a 3.1% increase to our 2010

cash flow estimates and a 2.8% decrease to our 2011 estimates. We note that

the cash flow impact was more pronounced for the gas-weighted names.

Table 1: Forecast Revisions

2010E Forecast 2011E Forecast

Previous Revised Previous Revised

WTI Oil Price - US$/bbl $75.00 $80.00 $80.00 $85.00

Exch. Rate - US$/C$ $0.950 $0.980 $0.950 $0.985

Edmonton Par - C$/bbl $78.95 $81.63 $84.21 $86.29

Edmonton Diff. - C$/bbl $2.63 $1.89 $2.11 $2.03

Edmonton Light - C$/bbl $76.32 $79.74 $82.11 $84.26

Heavy/Light Diff. - C$/bbl $9.21 $7.91 $12.63 $13.07

BowRiver Heavy - C$/bbl $67.11 $71.84 $69.47 $71.19

NYMEX - US$/MMbtu $4.75 $4.50 $5.50 $5.00

AECO - C$/Mcf $4.26 $4.29 $5.05 $4.57 Source: BMO Capital Markets

We believe that most royalty trusts are well positioned to convert to corporate

structures in 2011. As a result of the impending transitions, most trusts are

expected to redirect excess cash toward debt repayment or capital

reinvestment. Royalty trusts are also operating on more sustainable operating

and financial platforms. Due to the large accumulation of tax pools, income

taxes are not anticipated to have a material effect on cash flows for the first

few years post-conversion. That said, commodity prices will continue to be a

key determinant of performance and outlook going forward.

Our Outperform ratings emphasize trusts that have solid balance sheets,

balanced/oil-weighted production profile, and that provide investors with an

opportunity to own longer-term resources. We continue to recommend ARC,

Baytex, Bonavista, Crescent Point, NAL Oil & Gas, Pengrowth, and

Vermilion. We are currently restricted on Peyto.

This report was prepared in part by an analyst(s) employed by a Canadian affiliate, BMO Nesbitt Burns Inc., and who is (are) not registered as a research analyst(s) under FINRA rules. For disclosure statements, including the Analyst's Certification, please refer to pages 44 to 45.

Energy - Oil & Gas Sector Rating:

Oil & Gas Services (U.S.) Outperform Oil & Gas Services (CDA) Market Perform Integrated Oils Market Perform Oil & Gas Producers Market Perform Refiners Underperform

April 19, 2010 Research Comment Randy Ollenberger (403) 515-1502 BMO Nesbitt Burns Inc. (Canada) Christopher Brown, P.Eng (403) 515-1574 BMO Nesbitt Burns Inc. (Canada)

Jim Byrne, P.Eng., CFA (403) 515-1557 BMO Nesbitt Burns Inc. (Canada)

Alan Laws (303) 436-1125 BMO Capital Markets Corp. (U.S.)

Mark Leggett, CFA (403) 515-1508 BMO Nesbitt Burns Inc. (Canada)

Michael Mazar, CFA (403) 515-1538 BMO Nesbitt Burns Inc. (Canada)

Dan McSpirit (303) 436-1117 BMO Capital Markets Corp. (U.S.)

Gordon Tait, CFA (403) 515-1501 BMO Nesbitt Burns Inc. (Canada)

Spring Cleaning: Marking to Market Our Commodity Assumptions

Summary

We are raising our West Texas Intermediate

(WTI) crude oil assumptions by US$5/bbl in

2010 and 2011 to US$80/bbl and US$85/bbl,

respectively. We are lowering our 2010 Henry

Hub assumption to US$4.50/Mcf from

US$4.75/Mcf and our 2011 estimate to

US$5.00/Mcf from US$5.50/Mcf. We believe

there is further downside risk to our gas price

assumptions.

We expect North American oil and gas equity

performance to be relatively flat over the next

quarter as oil price strength is offset by gas

price weakness. Increasing M&A activity may

offer some glimmer of hope.

Our top recommendations are Bankers

Petroleum, Baytex, Black Diamond,

Canadian Natural Resources, Computer

Modelling Group, Crew, Crescent Point,

Halliburton, Legacy, Newfield, Occidental,

PetroBakken, Petrominerales, Pioneer,

Quicksilver, Schlumberger, Suncor and

Talisman. We are lowering our rating for

Cenovus to Market Perform due to share price

appreciation.

We are marking to market our commodity price estimates to reflect actual first

quarter prices and our updated assessment of supply and demand

fundamentals for crude oil and natural gas. Crude oil and natural gas prices

were generally in line with our expectations in Q1/10 and as such we are

making relatively modest revisions to our principal commodity prices

assumptions; however, the Canadian dollar has continued to strengthen versus

the US dollar, which does result in somewhat larger revisions to our Canadian

dollar denominated commodity price estimates. We are raising our West

Texas Intermediate (WTI) crude oil price assumption by US$5/bbl for 2010

and 2011 to US$80/bbl and US$85/bbl, respectively. These are roughly

US$5/bbl below current forward market prices, which we believe are

somewhat ahead of underlying fundamentals. For natural gas, we are

lowering our 2010 Henry Hub assumption to US$4.50/Mcf from

US$4.75/Mcf to reflect actual first quarter prices and our 2011 estimate to

US$5.00/Mcf from US$5.50/Mcf to reflect the ‘spill over’ effect of 2010

drilling activity into 2011. We believe there is downside risk to our estimates

if current drilling levels continue unabated. Our long-term commodity price

assumptions are unchanged.

North American oil and gas indices were essentially flat in the first quarter,

consistent with the relatively flat commodity price environment. We think

that equity performance will remain relatively flat for the next quarter

assuming a modest increase in crude oil prices but further weakness in natural

gas prices, although an uptick in M&A activity could provide some

momentum. We believe crude oil prices will begin to strengthen further in

late-2010 and 2011. Accordingly, investors may want to consider increasing

exposure to large cap crude oil leveraged companies over the next two

quarters.

This report was prepared in part by an analyst(s) employed by a Canadian affiliate, BMO Nesbitt Burns Inc., and who is (are) not registered as a research analyst(s) under FINRA rules. For disclosure statements, including the Analyst's Certification, please refer to pages 6 to 7.

Energy - Oil & Gas: Senior Producers

Industry Rating: Market Perform

April 19, 2010 Research Comment Jim Byrne, P. Eng., CFA (403) 515-1557 BMO Nesbitt Burns Inc. (Canada)

Dan McSpirit (303) 436-1117 BMO Capital Markets Corp. (U.S.)

Randy Ollenberger (403) 515-1502 BMO Nesbitt Burns Inc. (Canada)

Assoc: Matthew Brink/Graham Cooke, CFA/ Jared Dziuba/Chris Sloan

Q1/10 Preview: Less Help from Hedging

First-quarter reporting for the Senior Producers begins on April 21 with

results from EnCana. We expect the North American Senior Producers group

to report higher quarterly cash flow relative to last year driven by stronger

prices, but slightly lower than the prior quarter levels as only modestly higher

commodity prices and production levels were offset for several companies by

lower realized gains from hedging. Production from the group is expected to

be higher relative to both periods despite comparatively lower spending for

many in the group in the last year. We think this is due to the fact that while

spending was generally lower it was also high-graded and directed to those

plays with better returns or production growth. Strong spending in the shale

plays also helped to offset declines in conventional assets for many of the

producers.

Summary

West Texas Intermediate (WTI) crude oil

averaged US$78.08/bbl in Q1/10, up 83%

from Q1/09 and 3% from Q4/09. Henry Hub

natural gas prices averaged US$5.02/Mcf in

Q1/10, up 12% from Q1/09 and up 2% from

Q4/09.

First-quarter cash flow for the North

American Senior Producers group is expected

to be slightly higher than Q1/09 largely

reflecting significantly higher commodity

prices. In comparison to Q4/09, cash flow is

expected to fall slightly for the group, with

several companies expected to report lower

gains from hedging this quarter.

We continue to recommend a market weight

exposure to the North American oil and gas

group. Our top large cap recommendations

include Canadian Natural Resources,

Occidental, Newfield, Petrohawk, Pioneer

and Talisman.

Crude oil prices continued to improve in the first quarter with West Texas

Intermediate (WTI) averaging US$78.80/bbl, 3% above Q4/09 and 83%

above the Q1/09. Canadian heavy prices also improved during the quarter,

trading at an average discount of only 11% to WTI, which is an improvement

from the prior quarter and remains well below the historical average of more

than 25%. Natural gas prices strengthened slightly over the course of the

quarter and year following a colder-than-normal winter. The NYMEX front-

month natural gas prices averaged US$5.02/Mcf in Q1/10 up 2% from Q4/09

and up 12% from last year.

We continue to recommend that investors maintain a cautious investment

posture toward the oil and gas producer group, based on our expectation for

range-bound crude oil prices and potentially weaker natural gas prices.

Current market valuations fully reflect forward market commodity price

expectations and, as such, offer limited prospect for a further upward re-

valuation. We continue to favour companies leveraged to crude oil over

natural gas. Our top recommendations among the large cap companies are

Canadian Natural Resources, Occidental, Newfield, Petrohawk, Pioneer

and Talisman.

Please see page 2 for analyst coverage.

Page 1 April 18, 2010

US Oil Services

Industry Rating: Outperform

April 18, 2010

Alan Laws, CFABMO Capital Markets Corp.

303-436-1125alan.laws@bmo.com

Phillip Jungwirth, CFA303-436-1127

phillip.jungwirth@bmo.com

Op-Ed, Week of April 19, 2010 One drama to the next. The oil services group failed to finish the week in the black after a bout of fear took hold on Friday. The market remains prone to spooking given tentative optimism about a global recovery with the risk of “double dip” overhanging investor thinking. The OSX/OIH lost 1% (roughly in line with the commodities) and the broader market was flat. Friday’s decline in oil prices seemed to be the catalyst, although new financial sector drama also played a role. While the bailout of Greece may have settled certain aspects, the Goldman SEC charges ignited others, again chasing investors from “risk” investments. Solid 1Q results with rising 2H10 optimism should improve sector interest, but lessons from 1Q suggest the broader market has the reins. Even with a better backdrop, oil services stocks are largely trading below where they began 4Q earnings season. We see value with the rising tide of energy sector M&A supporting this (see below).

Weekly Performance

Indices/ETFs 4/16/2010 Week 2Q10 YTD 2009OIH $125.64 -1% 2% 6% 62%OSX $211.61 -1% 3% 9% 61%S&P 500 $1,192.13 0% 2% 7% 23%DJIA $11,018.66 0% 1% 6% 19%XOI $1,111.82 -1% 3% 4% 9%XNG $555.84 -1% 3% 3% 44%NYMEX front month HH, $/MMBTU $4.04 -1% 4% -28% -1%WTI/ $/bbl $83.24 -2% -1% 5% 78% Source: Bloomberg

Report Contents

1Q Earnings season arrives. Earnings begin this week with 1Q results from HAL, WFT, and SLB in OFS as well as NBR, ESV, DO, and NE. We are looking for positive surprises and constructive commentary from HAL and SLB to help the group. Messy quarters from WFT and NBR are largely anticipated with a mix from the offshore drillers that could see sentiment favoring jackup players (where the market appears to have bottomed), over deepwater (where future demand and rate concerns persist). Clearly, preferences favor more immediate signs of positive rate of change versus future negative rate of change, although who’s to say what 2012 brings.

W eekly Summary Page 2Offshore Rig Count / Net Construction 3Regional Jackup Utilization 3-4Regional Deepwater/Midwater Utilization 4-7North America Land Rig Count 8-10International Rig Count 11-12LNG Imports 12North America Gas Storage 13North America Gas Production 14U.S. Gas Consumption 15-16Crude Oil and Products 17Oil Services Comp Sheet 18BMO Estimates vs. Consensus 19-20Oil Services Historical Valuation 20

Change in Control & M&A. Apache has been active of late, with two material acquisitions that frame a broader consolidation trend in the energy sector. We always find it interesting when Street interest has little conviction and sector players see value and step up with the checkbook. Oil services has not been silent, and we expect more in the coming quarters. As noted in our sector preview, action in the offshore drillers, equipment and/or NA small caps are all possibilities. Often these things need a “stalking horse,” an agent that starts the ball rollin, and we like Seadrill in this role for the drillers. That said, M&A in the oil services sector is rarely hostile and “social issues” are often a barrier. We took a look at “change in control” provisions in recent proxies (p2) as the size of these payments can serve to mollify social issues in favor of value enhancing transactions. We’d note that different disclosure seems to make direct comparison more difficult, but they do all seem to cluster. On average, “change in control” payments/packages for the top three executives are fairly similar and fall in the $37mm range. This compares to $9mm for BJS and a $96mm for the RIG/GSF (more on p 2)

Refer to pages 21 and 22 for Important Disclosures, including Analyst's Certification.

Please r cluding the Analyst's Certification.

Entergy (ETR-NYSE) Stock Rating: OutperformI ndustry Rating: Market Perform

April 19, 2010

Electric Utilities and Independent Power

Michael S. WormsBMO Capital Markets Corp.

212-885-4031michael.worms@bmo.com

Barbara Coletti Harsh Acharya, CFA 203-746-9312 212-885-4012 barbara.coletti@bmo.com harsh.acharya@bmo.com

Notes from the Road: Resolving Uncertainty Securities Info Pr ice (16-Apr) $80.19 Target Price $9252-Wk High/Low $84/$64 Dividend $3.32Mkt Cap (mm) $15,172 Yield 4.1%Shs O/S (mm, BASIC) 189.2 Float O/S (mm) 188.8Options O/S (mm) 19.9 ADVol (30-day, 000s) 1,272

Selected Bond Iss

Event Our discussions with senior management at a BMO Capital Markets-

sponsored meeting in New Orleans centered on ETR’s strategy following the

failure of the spin-off of Entergy Nuclear (non-utility nuclear assets).

efer to pages 5 to 7 for Important Disclosures, in

Impact ETR is considering possible alternatives for Entergy Nuclear, including issuing debt (subsidiary or parent level) and/or a potential joint venture, while focusing on attaining re-licensing of its Indian Point (New York) and Vermont Yankee nuclear plants. It is working to improve its utility earnings profile through innovative filings (riders, etc.). Given current depressedvaluations, we believe an acquisition (assets or IPP company) is possible; absent investment opportunities, we look for incremental share repurchase.

Forecasts We are making no change to our EPS estimates at this time. However, current forward prices have declined over the past several months and we will update our model after the 1Q10 conference call.

Valuation We consider ETR shares an attractive investment opportunity. While near-term growth is likely constrained by current depressed commodity prices,Entergy is among only a few in the industry able to grow the dividend whilealso significantly reducing shares outstanding. Longer term, we continue tobelieve its non-utility portfolio grows in value.

Recommendation We reiterate our OUTPERFORM rating.

Ind Prc Rat’g Mdys/S&P YTW SpreadEntergy 4.35% '08 na WR / NR naBond data from Bloomberg.

Price Performance

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ENTERGY CORP NEW (ETR)Price: High,Lo w, Close( US$) Relative to S&P 500

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(FY-Dec.) 2008A 2009E 2010E 2011E EPS Pro Forma $6.51 $6.45 $6.96 $7.34 P/E 12.4x 11.5x 10.9x First Call Cons. $6.70 $7.05 EPS GAAP $6.23 na na na

FCF $3.75 $3.21 $3.48 $3.94 P/FCF 25.0x 23.0x 20.4x EBITDA ($mm) $3,394 $3,257 $3,402 $3,643 EV/EBITDA 6.8x 6.5x 6.0x Rev. ($mm) $13,093 $13,100 $13,634 $14,181 EV/Rev 1.7x 1.6x 1.6x FCF after Div. ($mm) $161 $68 $18 $20

Quarter ly EPS 1Q 2Q 3Q 4Q 2008A $1.56 $1.46 $2.50 $0.99 2009E $1.29A $1.23A na na

Balance Sheet Data (12/31/09) Net Debt ($mm) $6,836 TotalDebt/EBITDA 2.3x Total Debt ($mm) $7,643 EBITDA/IntExp 6.2x Net Debt/Cap. 33.1% Price/Book 1.8x Notes: All values in US$. Source: BMO Capital Markets estimates, Bloomberg, FactSet, Global

omson Financial. Insight, Reuters, and Th

Page 1 April 19, 2010

Electric Utilities and Independent Power

Industry Rating: Market Perform

April 19, 2010

Michael S. WormsBMO Capital Markets Corp.

212-885-4031michael.worms@bmo.com

Barbara Coletti Harsh Acharya, CFA 203-746-9312 212-885-4012barbara.coletti@bmo.com harsh.acharya@bmo.com

Summary

BMO-sponsored meetings with senior PJM

personnel provided insights into key

transmission and capacity market related issues

in the RTO.

Markets in Eastern PJM will likely remain

constrained for a prolonged period;

RPM auction clearing prices may remain volatile

in Western PJM.

DR would likely bid at staggered price levels

that reflect the aggregators' marginal costs.

Over 12,000 Mw of generation is considered at

risk of shutdown/mothballing owing to DR

participation.

PJM may modestly tweak capacity auction rules

to promote stable results over the longer term.

PJM seeks to increase transparency for the

capacity auction by providing incremental data

on DR.

A key transmission project in the EMAAC has

been delayed and needs to be resolved quickly

to thwart the possibility of blackouts in New

Jersey.

Notes From the Road: Meeting With PJM

BMO Capital Markets recently sponsored a meeting with senior personnel of

PJM Interconnection, including:

Andrew L. Ott, senior vice president – Markets, and

F. Stuart Breseler, III, vice president – Market Operations and

Demand Resources

Our discussions focused on capacity markets and related auctions, evolution

of capacity market rules, and transmission planning. Key takeaways from

our meeting include:

Eastern PJM markets will likely remain constrained for a prolonged

period;

Reliability Pricing Mechanism (RPM) auction clearing prices may

remain somewhat volatile in Western PJM;

Demand Response (DR) resources would bid in to the auctions in

tiers, reflecting their marginal costs of aggregating resources;

Over 12,000 Mw of generation is considered at risk of

shutdown/mothballing owing to DR participation as well as high

operating costs;

PJM is not in favor of making major changes in capacity auction

rules; however, it will continue to tweak them for the results to be

stable over the longer run;

PJM seeks to improve transparency for the capacity auctions by

providing incremental data;

A key transmission project (Susquehanna-Roseland) has been

significantly delayed; prompt resolution is needed to avoid potential

for blackouts in New Jersey (EMAAC).

Refer to pages 5 to 6 for Important Disclosures, including Analyst's Certification.

Please r cluding the Analyst's Certification.

El Paso (EP-NYSE) Stock Rating: OutperformI ndustry Rating: Market Perform

April 18, 2010

North American Pipelines

Carl Kirst, CFABMO Capital Markets Corp.

713-546-9756carl.kirst@bmo.com

Danilo Juvane, CFA713-546-9741

danilo.juvane@bmo.com

NDR Update: Notes From a Texas Traveler Securities Info Price (16-Apr) $11.10 Target Price $17 52-Wk High/Low $12/$6 Dividend $0.04Mkt Cap (mm) $7,785 Yield 0.4%Shs O/S (mm, BASIC) 701.3 Float O/S (mm) 697.3Options O/S (mm) na ADVol (30-day, 000s) 7,867

Selected Bond Iss

Event Spending two days with El Paso’s CFO, J.R. Sult, in meetings across Texas has

reconfirmed our high-conviction Outperform rating of EP. Since its December

analyst meeting, EP has achieved a number of major milestones, most notably

reducing its funding overhang this year from $2.5B to only $200mm, while putting

up tangible evidence of the E&P unit morphing from mediocrity to an increasingly

efficient unconventional player. While the stock has reacted well YTD

(outperforming gassy E&Ps by 800 bp), we still see significant upside over the next

12-18 months. Notwithstanding lackluster natural gas prices weighing on the stock

(and the group) this summer, we emphasize that our recommendation is focused

mainly on the increasing visibility around 10% CAGR in high-multiple pipeline

EBITDA through 2012. Key catalysts we see likely over the next 12 months: BLM

approval/Ruby project financing close (May), the next asset drop to its MLP

(3Q10), repeating strong 2009 F&D performance and accelerating Eagle Ford

acreage (1Q11), potential divestiture of Brazil (1Q11) and Ruby in-service (1Q11).

efer to pages 10 to 15 for Important Disclosures, in

Impact Positive.

Forecasts We are tweaking our EPS with changes in BMO’s oil and gas deck this morning(see our 1Q10 Preview), noting that higher oil, flatter regional basis, and an 80%/60% hedge position in 2010/2011 largely offset weaker gas. Our 2010 EPS estimate rises $0.02 to $0.85, 2011 is unchanged at $0.98, and 2012 declines $0.07to $1.13.

Valuation We reaffirm our 12-month $17 sum-of-the-parts derived price target (Exhibit 1).

Recommendation We reiterate OUTPERFORM as our highest conviction 12-month idea.

Changes Annual EPS Annual OCF Quarterly EPS

2010E $0.83 to $0.85 2010E $2.45 to $2.50 Q2/10E $0.20 to $0.22 2011E $2.76 to $2.79 Q3/10E $0.18 to $0.20 Q4/10E $0.21 to $0.18

Ind Prc Rat’g Mdys/S&P YTW SpreadEl Paso Corp 7.3% '18 96 Ba3 / BB- 7.93% 468bpEl Paso Nt Gas 6% '17 104 Baa3 / BB 5.20% 195bpBond data from Bloomberg.

Price Performance

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EL PASO CORP (EP)Price: High,Low,Cl ose(US$) Relative to S& P 500

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EPS Pro Forma $1.31 $1.38 $0.85 $0.98 P/E 13.1x 11.3x First Call Cons. $0.89 $1.07 EPS GAAP $1.31 -$0.83 $0.85 $0.98

OCF $4.02 $3.11 $2.50 $2.79 P/OCF 4.4x 4.0x EBITDA ($mm) $1,051 $3,203 $3,009 $3,217 EV/EBITDA 7.0x 6.5x Rev. ($mm) $5,363 $4,631 $4,500 $4,749 EV/Rev 4.7x 4.4x

Quarterly EPS 1Q 2Q 3Q 4Q

2009A $0.47 $0.25 $0.24 $0.34 2010E $0.25 $0.22 $0.20 $0.18

Balance Sheet Data (12/31/09) Net Debt ($mm) $13,231 TotalDebt/EBITDA 4.6x Total Debt ($mm) $13,868 EBITDA/IntExp 3.0x Net Debt/Cap. 81.1% Price/Book 3.5x Notes: All values in US$. Source: BMO Capital Markets estimates, Bloomberg, FactSet, Global Insight, Reuters, and Thomson Financial.

This report was prepared by an analyst(s) employ d as a research analyst(s) under FINRA rules. For disclosure statements, including

Labrador Iron Ore Royalty Income Fund (LIF.UN-TSX) Stock Rating: OutperformIndustry Rating: Market Perform

April 18, 2010 Research Comment Toronto, Ontario

Tony Robson BMO Nesbitt Burns Inc. (416) 359-4034 Tony.Robson@bmo.com Assoc: Jessica Fung

Price (16-Apr) $51.92 52-Week High $55.80 Target Price $60.00 52-Week Low $25.40 Conversion to Corporation, Business as Usual

ed by BMO Nesbitt Burns Inc., and who is (are) not registerethe Analyst's Certification, please refer to pages 5 to 7.

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Labrador Iron Ore Royalty Income Fund (LIF.UN)Price: High,Low,Close Earnings/Share

Event On April 15, 2010, LIF.UN released a proposed Plan of Arrangement to convert

the structure of the fund into a corporation within its Management Information

Circular. Each existing unit of the fund would essentially become one stapled

unit, which comprises one common share of “Newco” Labrador Iron Ore

Royalty Corporation (LIORC) and one Subordinated Debt Receipt with a

C$7.75 face value. The proposed plan will be voted on at the unitholders

meeting on May 19, 2010.

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Impact Slightly Positive. BMO Research has not yet adjusted its model based on the

proposed plan of arrangement; however, had assumed within forecasts that the

fund would convert to a corporation. The corporation can now expense

administrative costs. “Newco” intends to continue paying out cash flow to

shareholders. The announcement of the proposed conversion removes some

uncertainty for the Fund.

Forecasts BMO Research has not adjusted forecasts. Estimated EPS for 2010 and 2011

are unchanged at C$4.16 and C$5.13 respectively.

Valuation BMO Research estimates LIF.UN’s NPV at C$57.83/share using a 10%

nominal discount rate, long-term pellet prices of US$88/t and a C$/US$ rate of

0.90.

Recommendation LIF.UN is rated Outperform. The target price of C$60 represents 1.0x NPV and

is derives using a weighted blend of NPV and EBITDA multiples adjusted for

growth factors relative to its peers.

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Last Data Point: April 15, 2010

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(FY-Dec.) 2008A 2009A 2010E 2011E EPU $5.52 $2.35 $4.16 $5.13 P/E 12.5x 10.1x CFPU $5.67 $2.49 $4.32 $5.28 P/CFPU 12.0x 9.8x EV/EBITDA 4.5x 8.5x 8.4x 6.6x Iron Ore Pellets 87% -48% 55% 5% Iron Ore Fines 65% -33% 40% 5% C$/US$ 0.94 0.88 0.99 0.97 Quarterly EPU Q1 Q2 Q3 Q4 2008A $0.36 $2.33 $2.05 $0.82 2009A $0.54 $0.58 $0.43 $0.85 2010E $0.64 $1.08 $1.21 $1.22 Dividend $3.70 Yield 7.1% Book Value $12.91 Price/Book 4.0x Units O/S (mm) 32.0 Mkt. Cap ($mm) $1,661 Float O/S (mm) 32.0 Float Cap ($mm) $1,659 Wkly Vol (000s) 401 Wkly $ Vol (mm) $15.0 Net Debt ($mm) -$6.2 Next Rep. Date Jun (E)

Notes: All values in C$ Major Unitholders: CIBC Global Asset Mgt (15.2%) First Call Mean Estimates: LABRADOR IRON ORE ROYALTY TRUST (C$) 2010E: $4.27; 2011E: $5.38

Please r es, including the Analyst's Certification.

Valassis (VCI-NYSE) Stock Rating: OutperformI ndustry Rating: Market Perform

April 16, 2010

Marketing Services

Daniel SalmonBMO Capital Markets Corp.

212-885-4029dan.salmon@bmo.com

Securities Info Price (15-Apr) $28.18 Target Price $35 52-Wk High/Low $29/$2 Dividend --Mkt Cap (mm) $1,384 Yield --Shs O/S (mm, BASIC) 49.1 Float O/S (mm) 48.6Options O/S (mm) na ADVol (30-day, 000s) 466

Price Performance

Raising 2011 Cash EPS for Note Repurchase

Event Valassis announced that it has amended it senior secured credit agreement

and is now able to repurchase $325 million of its 8.25% senior notes due

2015. In return, Valassis agreed to reduce the revolving credit commitments

under the facility to $50 million from $100 million and increase the spread

for LIBOR-based borrowings from 175 to 225 basis points.

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VALASSIS COMMUNICATIONS INC (VCI)Price: High,Low,Close(US$) Relative to S&P 500

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Impact Positive. The timing for any note tender is still unknown; however, Valassis has a call on the bonds in March 2011 at 104.125 that can now be exercisedand makes 1Q11 the latest at which the tender would be executed. Our modelassumes the entire $325 million is done in 1Q11. With the balance sheetaddressed, expectations for a share repurchase come next. We expectValassis to announce a buyback in the next 3-6 months, perhaps as early as1Q10 earnings later this month. We expect the total buyback to be over 5%of the outstanding shares (i.e., 5mm or ~$140-150mm) and spread over 2010and 2011 as the credit agreement caps any buybacks in 2010 at $60mm.

efer to pages 7 to 9 for Important Disclosur

Forecasts We are raising our 2011E cash EPS to $3.40 from $3.14. We maintain above consensus 2010 estimates ($310 million of EBITDA, $2.79 of cash EPS) and 2011 EBITDA at $341 million.

Valuation Raising target to $35 from $32 after applying a higher multiple to our 2010 estimates. The higher multiple is based on greater clarity proceed uses, Moody’s upgrade today and more confidence in long-term growth drivers.

Recommendation We rate VCI share OUTPERFORM.

Changes Annual EPS Annual FCF Target

2011E $2.55 to $2.80 2011E $3.14 to $3.40 $32.00 to $35.00

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(FY-Dec.) 2008A 2009A 2010E 2011E EPS GAAP $0.51 $1.19 $1.95 $2.80 P/E 14.5x 10.1x First Call Cons. $1.80 $2.39

FCF $1.69 $2.31 $2.75 $3.40 P/FCF 10.2x 8.3x EBITDA ($mm) $217 $263 $310 $341 EV/EBITDA 5.7x 5.2x Rev. ($mm) $2,382 $2,244 $2,342 $2,439 EV/Rev 0.8x 0.7x FCF after Div. ($mm) na na na na

Quarterly EPS 1Q 2Q 3Q 4Q 2009A $0.18 $0.29 $0.26 $0.46 2010E $0.31 $0.42 $0.46 $0.76

Balance Sheet Data (12/31/09) Net Debt ($mm) $394 TotalDebt/EBITDA 3.3x Total Debt ($mm) $1,011 EBITDA/IntExp 3.8x Net Debt/Cap. 35.5% Price/Book 14.0x Notes: All values in US$. Source: BMO Capital Markets estimates, Bloomberg, FactSet, Global Insight, Reuters, and Thomson Financial.

Save the Date

For more info, please go to: http://www.bmocm.com/conferences/advertisingmarketingservices/

Or contact your BMO Capital Markets representative

June 10, 2010 BMO Capital Markets

Advertising & Marketing Services Conf, NYC

This report was prepared by an analyst(s) employed by BMO Nesbitt Burns Inc., and who is (are) not registered as a research analyst(s) under FINRA rules. For disclosure statements, including the Analyst's Certification, please refer to pages 19 to 20.

Industrials - Transportation: Airlines

Industry Rating: Market Perform

April 18, 2010 Research Comment Montreal, Quebec Claude Proulx, CFA (514) 286-3501 Claude.Proulx@bmo.com Assoc: Jason Vouriot

Canadian Airlines Q1 Results Preview: Nothing to Write Home About

We expect Canada’s publicly traded airlines to report earnings in the coming

weeks, our assumptions are outlined in tables on the following pages. Summary

We are increasing our Q1/10 forecasts for Air

Canada to EBITDAR of $66 million and EPS

of ($0.62) while boosting full-year EPS

estimates to ($1.04) and ($0.22) for 2010 and

2011, respectively; our target price increases

to $2.25 reflecting 7.2x CFY EV/EBITDAR.

Full year EPS estimates for WestJet remain

unchanged but we are adjusting our Q1/10

forecast to $0.19 from $0.15.

Jazz estimates remain unchanged; our target

price is under review.

We are increasing our target price on ACE to

$9.00 as a result of our AC target price

increase.

Our estimates for Transat are unchanged.

Air Canada (AC.B; Market Perform) should report a better Q1 than previously

expected on May 6. We expect EBITDAR of $66 million versus $57 million

last year, up from $39 million previously. We believe that AC benefited from

one of the most clement winters in history, which resulted in significant cost

savings, and received more benefit from the Olympics than previously

assumed. This EBITDAR forecast translates into EPS of ($0.62) vs. ($2.92) in

Q1/09.

Jazz (JAZ.UN; Market Perform) is expected to release Q1 results on May 13.

Air Canada’s regional feeder should offer no surprises as it is more of a

service provider than a true airline. We expect tax-adjusted EPU to fall to

$0.05 from $0.11 in Q1/09, and DCPU to fall year over year to $0.19 from

$0.30, owing primarily to the impact of amendments to the Capacity Purchase

agreement with Air Canada (AC).

WestJet (WJA; Market Perform) will report Q1 results on May 3. We expect

EPS of $0.19 (up from $0.15 previously) versus $0.25 in Q1/09. Our higher

forecast reflects the milder yield guidance given by management as well as

the more favourable weather; the consensus EPS estimate is $0.15.

Transat (TRZ.B, Market Perform), Canada’s largest leisure travel company,

will report Q2/10 on June 10. We still expect TRZ to post a loss of $0.04

versus EPS of $0.62 in Q2/09, reflecting a combination of soft demand,

excess capacity and strategic mistakes. We expect the market to look beyond

the weak Q2, focusing instead on the medium term as summer bookings are

ahead of last year, suggesting a return to healthy profitability in Q3/10.

ACE Aviation Holdings (ACE.B; Market Perform) is expected to report on

May 11. Though not accounted for on a fully consolidated basis since ACE

now owns less than 50%, results will be based almost entirely on the reported

results of Air Canada. We no longer provide EPS estimates for ACE and

instead base our recommendation strictly on a NAV valuation.

Please r cluding the Analyst's Certification.

Mattel (MAT-NASDAQ) Stock Rating: OutperformI ndustry Rating: Outperform

April 19, 2010

Toys & Juvenile Products

Gerrick L. JohnsonBMO Capital Markets Corp.

212-883-5192gerrick.johnson@bmo.com

1Q10 Results- Continued Solid Execution, Raising Numbers

Securities Info Price (15-Apr) $23.75 Target Price $29 52-Wk High/Low $24/$14 Dividend $0.75Mkt Cap (mm) $8,650 Yield 3.2%Shs O/S (mm, BASIC) 364.2 Float O/S (mm) 363.6Options O/S (mm) na ADVol (30-day, 000s) 4,294

Price Performance

Event Mattel posted very good 1Q10 earnings results on Friday, beating the Street on just about every line in the income statement.

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Impact We expect these results to inspire investors and analysts and anticipate 2010earnings estimates to be brought up by more than the company’s $0.10 beat.

Forecasts We are raising our 2010 EPS estimate to $1.75 from $1.55. We are also increasing our 2011 EPS estimate to $1.90 from $1.80.

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efer to pages 7 to 9 for Important Disclosures, in

Valuation We are raising our 12-month price target to $29 from $27. This target represents a 15x multiple on our revised 2011 EPS estimate of $1.90. Thiscomparable to the stock’s historical average, which we think is appropriategiven the company’s recent performance and future opportunities. Risks to this target include an inability to bring compelling products to market on atimely basis

Recommendation We continue to rate shares of MAT OUTPERFORM and consider it our toplarge-cap idea in the toy and juvenile products space.

Changes Annual EPS Annual FCF Quarterly EPS Target 2010E $1.55 to $1.75 2010E $1.45 to $1.44 Q2/10E $0.13 to $0.17 $27.00 to $29.00 2011E $1.80 to $1.90 2011E $1.70 to $1.95 Q3/10E $0.67 to $0.68 Q4/10E $0.76 to $0.84

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150

(FY-Dec.) 2008A 2009A 2010E 2011E

EPS Pro Forma $1.04 $1.37 $1.75 $1.90 P/E 13.6x 12.5x First Call Cons. $1.65 $1.82 EPS GAAP $1.55 $1.45 $1.75 $1.90

FCF $0.34 $2.45 $1.44 $1.95 P/FCF 16.5x 12.2x EBITDA ($mm) $714 $941 $1,093 $1,162 EV/EBITDA 8.2x 7.7x Rev. ($mm) $5,918 $5,431 $5,972 $6,300 EV/Rev 1.5x 1.4x

Quarterly EPS 1Q 2Q 3Q 4Q

2009A -$0.14 $0.06 $0.63 $0.81 2010E $0.07A $0.17 $0.68 $0.84

Balance Sheet Data (12/31/09) Net Debt ($mm) $274 TotalDebt/EBIT DA 0.6x Total Debt ($mm) $675 EBITDA/IntExp 60.1x Net Debt/Cap. 8.3% Price/Book 3.4x

Notes: All values in US$.

Source: BMO Capi tal Markets estimates, Bloomberg, FactSet, Global Insight, Reuters, and Thomson Financial .

Page 1

Entertainment

Industry Rating: Outperform

April 19, 2010

Jeffrey B. LogsdonBMO Capital Markets Corp.

213-228-2234jeffrey.logsdon@bmo.com

Jeffrey Hoskins, CFA Kara Stevenson213-228-2405 213-228-2407jeff.hoskins@bmo.com kara.stevenson@bmo.com

Summary

We are publishing our Perspectives on the

Filmed Entertainment Industry 2010 report

today. This note includes the Executive

Summary and Eight Focal Points for Investors

as a preview to our 300-page report, which

covers the filmed entertainment, home video,

exhibition, and TV production businesses as

well as more than 100 industry tables, exhibits,

and charts.

For a hard copy of the report or a CD of the

report and corresponding Excel tables, please

contact your BMO Capital Markets sales

representative.

We also invite you to participate in our 5th

Annual Movie Box Office Contest, where you’re

challenged to predict the top domestic grossing

films for the summer of 2010. Click here for

details:

http://www.bmocm.com/conferences/moviecont

est2010/.

Perspectives on the Filmed Entertainment Industry 2010 The filmed entertainment industry is experiencing the dynamics of new

technology and changing consumer preferences against the backdrop of

economic disruption throughout much of the world. The deep recessionary

forces affecting families and businesses the past two years have not curtailed

demand for film entertainment product despite shifts in platform utilization

(more theater going, less DVD buying) and preferences. Resilient is an

appropriate perspective for investors from our vantage point.

Consumer demand worldwide for filmed entertainment product has outpaced

most consumer discretionary activities. As new distribution portals emerge,

we think the digital distribution opportunity will give consumers more

choice and convenience, factors that have been favorable for the industry

historically.

Our favorite stocks in the group are The Walt Disney Company and News

Corporation among the large-cap entertainment names as a better advertising

environment, rebounding economy, healthy film prospects, and high

leverage to cable network segment of the business should drive well above

average fundamentals. We like the theatrical exhibitors (CGX, CNK and

RGC) as 3-D and a resurgence in movie going are playing well to the

fundamental picture of each of these company’s.

16-Apr EPS P/E Mkt Cap

ntertainment Rating Price Target 2009E 2010E 2011E 2009E 2010E 2011E Div Yld Book ($mm)lockbuster (BBI) Market Perform(S) $0.40 $0 -$0.44 -$0.76 -$0.76 nm nm nm $0.00 0.0% -$0.16 78

Carmike Cinemas (CKEC) Market Perform $17.36 $15 -$1.22 $0.76 $0.97 nm 22.8 17.9 $0.00 0.0% $0.88 219Cinemark Holdings (CNK) Outperform $18.90 $22 $0.87 $1.13 $1.25 21.7 16.7 15.1 $0.72 3.8% $8.28 2,099Cineplex Galaxy Income Fund (CGX.UN) Outperform $20.52 $26 $2.14 $2.55 $2.75 9.6 8.0 7.5 $1.26 6.1% $10.95 1,168DreamWorks Animation (DWA) Outperform $40.58 $51 $1.73 $2.70 $3.00 23.5 15.0 13.5 $0.00 0.0% $12.71 3,563Lions Gate Entertainment (LGF) Outperform $6.87 $11 -$1.40 -$0.38 -$0.19 nm nm nm $0.00 0.0% $0.61 808News Corp (NWSA) Outperform $15.75 $18 $0.65 $1.00 $1.09 24.2 15.8 14.4 $0.12 0.8% $9.18 41,297Regal Entertainment Group (RGC) Outperform $17.00 $20 $0.78 $0.88 $0.94 21.8 19.3 18.1 $0.72 4.2% -$1.60 2,620Time Warner (TWX) Outperform $33.00 $35 $1.83 $2.15 $2.40 18.0 15.3 13.8 $0.75 2.3% $30.86 38,445Viacom (VIA.B) Market Perform $34.98 $36 $2.23 $2.82 $3.07 15.7 12.4 11.4 $0.00 0.0% $14.33 21,317Walt Disney (DIS) Outperform $35.83 $38 $1.82 $2.05 $2.31 19.7 17.5 15.5 $0.35 1.0% $18.55 69,009

Source: BMO Capital Markets estimates and company reports.

EB

April 19, 2010

Refer to pages 18 to 19 for Important Disclosures, including Analyst's Certification.

Please r cluding the Analyst's Certification.

Eli Lilly (LLY-NYSE) Stock Rating: OutperformI ndustry Rating: Market Perform

April 16, 2010

Large-Cap Pharmaceuticals

Robert HazlettBMO Capital Markets Corp.

212-885-4091robert.hazlett@bmo.com

James Tumbrink212-885-4195

james.tumbrink@bmo.com

1Q10 Preview Securities Info Price (15-Apr) $36.72 Target Price $4352-Wk High/Low $38/$32 Dividend $1.96Mkt Cap (mm) $42,343 Yield 5.3%Shs O/S (mm, BASIC) 1,153 Float O/S (mm) 1,151Options O/S (mm) na ADVol (30-day, 000s) 6,597

Selected Bond Iss

Event Lilly’s 1Q10 results will be reported Monday, April 19. We are raising our

continuing operations EPS estimate to $1.08 (-10%) from $1.01, owing to

continued strong performance by Alimta, Cialis, and Zyprexa.

efer to pages 10 to 12 for Important Disclosures, in

Impact FX issues are likely to affect 1Q10 results, with headwind on gross marginversus the material benefit seen in 1Q09, though likely not to the degree of4Q09. This should largely outweigh some likely FX benefits on theinternational revenue top line. Increased SG&A and R&D spending as a percentage of sales may also pressure the quarter.

Forecasts 1Q10 estimated revenue of $5.67B (+12%), increased from our previous$5.40B estimate, is to be aided by solid performances of Alimta for lung cancers (+60% to $535mm), Cymbalta for depression/pain (+12% to $795mm), and Humalog for diabetes (+15% to $519mm). Gemzar (-18%, $300mm) is to remain pressured by international generics. Nominal US price increases ranging from 5% to 15% for Lilly’s major therapies could bolsterUS revenue, as should a weaker dollar yr/yr. Detail below.

Valuation We value LLY shares at roughly 9x our 2010 EPS estimate of $4.76, giving us a 12-month price target of approximately $43 per share.

Recommendation Lilly’s significant mid-to-late stage pipeline should provide materialopportunity for solid long-term growth, making LLY share’s relatively low 8x PE multiple and robust 5.3% dividend attractive. We also expect Lilly tocontinue to be aggressive with licensing, to build for mid-decade. Changes Quarterly EPS

Q1/10E $1.01 to $1.08 Q2/10E $1.18 to $1.19 Q4/10E $1.37 to $1.29

Ind Prc Rat’g Mdys/S&P YTW SpreadLLY 3.55% '12 104 A1 / AA 1.12% 12bpLLY 6.0% '12 109 A1 / AA 1.04% 4bpBond data from Bloomberg.

Price Performance

50

60

70

80

90

100

110

LILLY ELI & CO (LLY)Price: High,Low,Close(US$) Relat ive to S& P 500

25

30

35

40

45

50

55

60

65

0

100

200

300

2005 2006 2007 2008 2009

Volume (ml n)

Last Data Point : April 15, 2010

Valuation/Financial Data

0

100

200

300

(FY-Dec.) 2008A 2009A 2010E 2011E

EPS Pro Forma $4.02 $4.42 $4.76 $4.56 P/E 7.7x 8.1x First Call Cons. $4.73 $4.73 EPS GAAP -$1.89 $3.94 $4.76 $4.56

FCF -$1.72 $4.27 $5.15 $4.93 P/FCF 7.1x 7.4x EBITDA ($mm) $5,596 $6,370 $6,874 $6,471 EV/EBITDA 6.5x 6.9x Rev. ($mm) $20,342 $21,836 $23,706 $23,068 EV/Rev 1.9x 1.9x

Quarterly EPS 1Q 2Q 3Q 4Q 2009A $1.20 $1.12 $1.20 $0.91 2010E $1.08 $1.19 $1.21 $1.29

Balance Sheet Data (12/31/09) Net Debt ($mm) $2,165 TotalDebt/EBITDA 1.0x Total Debt ($mm) $6,662 EBITDA/IntExp na Net Debt/Cap. 13.4% Price/Book 4.2x

Notes: All values in US$. Source: BMO Capital Markets estimates, Bloomberg, FactSet, Global Insight, Reuters, and Thomson Financial.

Important Disclosures Analyst's Certification As to each company covered in this report, the analyst hereby certifies that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report. Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and their affiliates, which includes the overall profitability of investment banking services. Compensation for research is based on effectiveness in generating new ideas and in communication of ideas to clients, performance of recommendations, accuracy of earnings estimates, and service to clients. Analysts employed by BMO Nesbitt Burns Inc. and/or BMO Capital Markets Ltd. are not registered as research analysts with FINRA. These analysts may not be associated persons of BMO Capital Markets Corp. and therefore may not be subject to the NASD Rule 2711 and NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.

Company Specific Disclosures For Important Disclosures on the stocks discussed in this report, please go http://researchglobal.bmocapitalmarkets.com/Company_Disclosure_ Public.asp.

Distribution of Ratings (Dec. 31, 2009) Rating

Category

BMO Rating BMOCM US

Universe* BMOCM USIB Clients**

BMOCM USIB Clients***

BMOCM Universe****

BMOCM IB Clients*****

First Call Universe

Buy Outperform 32.2% 12.3% 38.3% 36.1% 47.9% 50% Hold Market Perform 62.6% 10.2% 61.7% 56.9% 48.9% 43% Sell Underperform 5.3% 0% 0% 6.9% 3.2% 7%

* Reflects rating distribution of all companies covered by BMO Capital Markets Corp. equity research analysts. ** Reflects rating distribution of all companies from which BMO Capital Markets Corp. has received compensation for Investment Banking services as

percentage within ratings category. *** Reflects rating distribution of all companies from which BMO Capital Markets Corp. has received compensation for Investment Banking

services as percentage of Investment Banking clients. **** Reflects rating distribution of all companies covered by BMO Capital Markets equity research analysts. ***** Reflects rating distribution of all companies from which BMO Capital Markets has received compensation for Investment Banking services as

percentage of Investment Banking clients.

Ratings and Sector Key We use the following ratings system definitions: OP = Outperform - Forecast to outperform the market; Mkt = Market Perform - Forecast to perform roughly in line with the market; Und = Underperform - Forecast to underperform the market; (S) = speculative investment; NR = No rating at this time; R = Restricted – Dissemination of research is currently restricted.

Market performance is measured by a benchmark index such as the S&P/TSX Composite Index, S&P 500, Nasdaq Composite, as appropriate for each company. BMO Capital Markets eight Top 15 lists guide investors to our best ideas according to different objectives (Canadian large, small, growth, value, income, quantitative; and US large, US small) have replaced the Top Pick rating.

Other Important Disclosures For Other Important Disclosures on the stocks discussed in this report, please go to http://researchglobal.bmocapitalmarkets.com/Company_Disclosure_ Public.asp or write to Editorial Department, BMO Capital Markets, 3 Times Square, New York, NY 10036 or Editorial Department, BMO Capital Markets, 1 First Canadian Place, Toronto, Ontario, M5X 1H3.

Prior BMO Capital Markets Ratings Systems http://researchglobal.bmocapitalmarkets.com/documents/2009/prior_rating_systems.pdf

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