MORNING NEWS CALL REUTERS Canada Edition Tuesday, May 2, 2017

TOP NEWS BREAKINGVIEWS • Pfizer beats first-quarter profit estimates Pfizer Inc, the largest U.S. drugmaker, reported a bigger-than-expected quar- Canada pipeline bid takes M&A terly profit, helped by higher sales of breast cancer drug Ibrance and pain re- momentum too far lief drug Lyrica. • Encana's operating profit beats as oil prices climb Pembina Pipeline's C$5.7 billion bid Encana Corp, Canada's No. 2 oil and natural gas producer, reported a better- for takes the industry’s than-expected operating profit for the first quarter, helped by the rise in oil and merger momentum too far. The gas prices. -based infrastructure • Canada goods exports to jump by 6 pct this year -agency company wants to buy its rival after Strong commodity prices mean the value of Canadian goods exports will jump rising oil prices and hopes of 6 percent in 2017 after a drop last year, Canada's export credit agency said, favorable policies from the Trump playing down possible disruption to the North American Free Trade Agree- administration lifted valuations. But ment. the 4 percent drop in the buyer’s • Canada's WestJet posts 45 pct fall in 1st-qtr profit stock suggests investors still require Canada's WestJet Airlines Ltd reported a 45 percent fall in quarterly profit, as the basics: cost cuts that cover the higher fuel costs squeezed margins. deal premium and down-to-earth • Sherritt gives partners bigger stake in nickel mine for debt relief expansion plans. Sumitomo Corp said it and Korea Resources Corp will get a larger stake in the The U.S. shale boom has prompted Ambatovy nickel project in Madagascar, as part of a debt restructuring deal the need for new pipelines to with partner Sherritt International Corp. connect North American drillers, processors and export tunnels. That takes heft – and capital, which is BEFORE THE BELL why there has been a spate of Stock futures pointed to a flat opening for Canada's main stock index as oil mergers recently. Late last year prices surged on hopes that major OPEC exporters would extend output cuts TransCanada closed its $10 billion into the second half of the year. U.S. stock index futures were little changed deal for Columbia Pipeline, a ahead of the Federal Open Market Committee’s two-day meeting on interest company with assets in the U.S. rate policy. European markets rose, supported by strong corporate earnings Northeast. In February and manufacturing data. Asian shares closed mostly higher. The U.S. dollar closed its deal to buy Houston-based hit a one-month high against the yen. Gold was little changed. Spectra Energy for $28 billion. Part of Pembina’s interest in Veresen follows a similar rationale: a STOCKS TO WATCH tie-up would give it access to the , which connects Results Chicago to western Canada. Trouble • Agrium Inc (AGU). The farm retailer reported a smaller-than-expected loss is, Pembina has ditched the on Monday, helped by higher selling prices for potash. The Canadian compa- somewhat safer-looking playbook ny sold 636,000 tonnes of wholesale potash in the first quarter at an average the other two deals used. of $208 per tonne, compared with 456,000 tonnes at $199 per tonne a year Enbridge made sure it could cut earlier. Agrium's retail sales fell 2.2 percent to $2.24 billion. On an adjusted enough costs to cover the premium it basis, it lost 7 cents per share, while analysts on average had expected a loss was paying, though TransCanada of 8 cents. fell a bit short. And both kept their • Encana Corp (ECA). The oil and natural gas producer reported a better-than exuberance about future growth -expected operating profit for the first quarter, helped by the rise in oil and gas under control. That was smart, prices. Encana said it realized $43.45 per barrel of oil and natural gas liquids especially after previous deals ran production in the quarter ended March 31, compared with $33.09 a year ago. into trouble on outsized expectations The company posted a net profit of $431 million for the first quarter, compared and the plunging oil price – not least with a loss of $379 million a year ago. On a per share basis, Encana reported the September 2015 Williams- an operating profit of 11 cents, beating analysts' average estimate of 3 cents. Energy Transfer Equity merger, • Inc (SHOP). The e-commerce software maker reported a 75 per- which fell apart last year. cent jump in quarterly revenue, as more merchants used its platform to set up Pembina can only find some C$87 and manage online stores. Net loss widened to $13.6 million, or 15 cents per million of savings from taxes and share in the first quarter, from $8.9 million, or 11 cents per share, a year earli- other expenses; those are currently er. Revenue rose to $127.4 million from $72.7 million. worth around C$650 million to • WestJet Airlines Ltd (WJA). The company reported a 45 percent fall in shareholders, once taxed at 25 MORNING NEWS CALL - CANADIAN EDITION May 2, 2017 quarterly profit, as higher fuel costs squeezed margins. Net earnings fell to percent and capitalized on a multiple C$48.3 million, or 41 Canadian cents per share in the first quarter, from of 10. That falls short of the roughly C$87.6 million, or 71 Canadian cents per share, a year earlier. Revenue rose C$930 million premium the company 8 percent to C$1.11 billion. is offering Veresen shareholders, assuming they elect to take the full Deals of the day allotment of cash. • Sherritt International Corp (S). Sumitomo Corp said it and Korea Re- Pembina Chief Executive Michael sources Corp will get a larger stake in the Ambatovy nickel project in Mada- Dilger reckons there’s more than gascar, as part of a debt restructuring deal with the partner company. Sherritt's enough new business the two can stake in the project will be reduced to 12 percent from 40 percent in exchange only do as one company to easily for the elimination of C$1.4 billion of debt owed to Sumitomo and Kores, ac- cover the shortfall. He plans on cording to the revised joint venture agreement. Sumitomo's stake will increase investing C$20 billion in new to 47.7 percent from 32.5 percent and Kores' share will climb to 40.3 percent projects, more than triple the C$6 from 27.5 percent, Sumitomo said. billion the two had already earmarked as standalone companies. ANALYSTS' RECOMMENDATION That seems ambitious, especially for • Veresen Inc (VSN). BMO raises target price to C$18.65 from C$14 to reflect a newly enlarged firm that will Pembina Pipeline Corp’s proposed offer rice for the shares. already have some C$10 billion of debt on its books. Shareholders rewarded Dilger’s enthusiasm by ECONOMIC EVENTS nixing almost $600 million in value at No economic indicators are scheduled for release. one point on Monday. Oil prices and Donald Trump may have enlivened industry spirits. But overly exuberant COMPANIES REPORTING RESULTS ambitions should remain a pipe dream.

May 2: CONTEXT NEWS Cineplex Inc (CGX). Expected Q1 earnings of 35 Canadian cents per share Pembina Pipeline said on May 1 that Colliers International Group Inc (CIG). Expected Q1 earnings of 22 cents it has offered to buy Canadian-based per share pipeline company Veresen for C$5.7 Encana Corp (ECA). Expected Q1 earnings of 3 cents per share billion ($4.2 billion), a 21.8 percent Fortis Inc (FTS). Expected Q1 earnings of 71 Canadian cents per share premium to Veresen's 20-day Genworth MI Canada Inc (MIC). Expected Q1 earnings of C$1.00 per share weighted average price. goeasy Ltd (GSY). Expected Q1 earnings of 63 Canadian cents per share Shareholders can elect to exchange Corp (K). Expected Q1 earnings of break even per share one Veresen share for a 0.4287 Lucara Diamond Corp (LUC). Expected Q1 earnings of 3 cents per share share of Pembina or C$18.65 in MacDonald Dettwiler and Associates Ltd (MDA). Expected Q1 earnings of cash. The maximum amount of cash C$1.37 per share Pembina is willing to devote to the Norbord Inc (OSB). Expected Q1 earnings of 62 cents per share deal is around C$1.5 billion. Parkland Fuel Corp (PKI). Expected Q1 loss of 3 Canadian cents per share Pembina expects the deal to save Pengrowth Energy Corp (PGF). Expected Q1 loss of 4 Canadian cents per between C$75 million and C$100 share million a year from cutting both costs Shopify Inc (SHOP). Expected Q1 loss of 10 cents per share and the tax bill. It also proposes to Tembec Inc (TMB). Expected Q2 earnings of 15 Canadian cents per share invest C$20 billion in new projects WestJet Airlines Ltd (WJA). Expected Q1 earnings of 50 Canadian cents per on top of the combined C$6 billion in share new projects the companies had

separately planned through 2018. May 3: In September, Enbridge said it would Acadian Timber Corp (ADN). Expected Q1 earnings of 29 Canadian cents buy Spectra Energy for $28 billion. per share TransCanada said it would buy ARC Resources Ltd (ARX). Expected Q1 earnings of 15 Canadian cents per Columbia Pipeline in March last year share for $10 billion. Blackpearl Resources Inc (PXX). Expected Q1 earnings of 1 Canadian cent Last June Energy Transfer Equity per share abandoned its $20 billion deal to buy CGI Group Inc (GIBa). Expected Q2 earnings of 93 Canadian cents per share Williams Cos after a Delaware judge Echelon Financial Holdings Inc (EFH). Expected Q1 earnings of 17 Canadi- ruled its lawyers were unable to say an cents per share confidently that part of the deal EcoSynthetix Inc (ECO). Expected Q1 loss of 3 cents per share would be tax-free. Activewear Inc (GIL). Expected Q1 earnings of 35 cents per share

Great Panther Silver Ltd (GPR). Expected Q1 earnings of 1 Canadian cent

2 MORNING NEWS CALL - CANADIAN EDITION May 2, 2017 per share -- By Lauren Silva Laughlin Home Capital Group Inc (HCG). Expected Q1 earnings of 98 Canadian cents -- The author is a Reuters per share Breakingviews columnist. The Intact Financial Corp (IFC). Expected Q1 earnings of C$1.08 per share opinions expressed are her own. Ltd (L). Expected Q1 earnings of 87 Canadian cents per share Financial Corp (MFC). Expected Q1 earnings of 52 Canadian cents per share Novadaq Technologies Inc (NDQ). Expected Q1 loss of 21 cents per share Points International Ltd (PTS). Expected Q1 earnings of 4 cents per share Rogers Sugar Inc (RSI). Expected Q2 earnings of 8 Canadian cents per share Torstar Corp (TSb). Expected Q1 loss of 13 Canadian cents per share Trican Well Service Ltd (TCW). Expected Q1 loss of 3 Canadian cents per share Veresen Inc (VSN). Expected Q1 earnings of 12 Canadian cents per share Wesdome Gold Mines Ltd (WDO). Expected Q1 earnings of 3 Canadian cents per share Yamana Gold Inc (YRI). Expected Q1 earnings of break even per share

CORPORATE EVENTS 08:30 Centerra Gold Inc (CG). Q1 earnings conference call 08:30 Fortis Inc (FTS). Q1 earnings conference call 08:30 Shopify Inc (SHOP). Q1 earnings conference call 09:00 Encana Corp (ECA). Q1 earnings conference call 09:00 Valeant Pharmaceuticals International Inc (VRX). Annual Shareholders Meeting 10:00 Agrium Inc (AGU). Q1 earnings conference call 10:00 Cineplex Inc (CGX). Q1 earnings conference call 10:00 Guyana Goldfields Inc (GUY). Q1 earnings conference call 10:00 Norbord Inc (OSB). Annual Shareholders Meeting 10:00 WestJet Airlines Ltd (WJA). Q1 earnings conference call 11:00 Centerra Gold Inc (CG). Annual Shareholders Meeting 11:00 Colliers International Group Inc (CIGI). Q1 earnings conference call 12:00 Encana Corp (ECA). Annual Shareholders Meeting 12:00 WestJet Airlines Ltd (WJA). Annual Shareholders Meeting 13:00 Agrium Inc (AGU). Annual Shareholders Meeting 14:00 Norbord Inc (OSB). Q1 earnings conference call 14:00 Superior Plus Corp (SPB). Annual Shareholders Meeting 17:30 MacDonald Dettwiler and Associates Ltd (MDA). Q1 earnings confer- ence call

EXDIVIDENDS United Corporations Limited (UNC). Amount C$0.30

(All analysts' estimates are according to I/B/E/S)

3 MORNING NEWS CALL - CANADIAN EDITION May 2, 2017

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