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

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

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

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

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


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

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

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

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

For Morningstar's commentary about Harrison, go to: http://www.morningstar.com/goto/ceo2013. For the complete list of past winners, go to: http://corporate.morningstar.com/CEOhalloffame.

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

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

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Media Contact:
Carling Spelhaug, +1 312-696-6150 or carling.spelhaug@morningstar.com

SOURCE Morningstar, Inc.