TRANSPORTATION & LOGISTICS

Transcription

1 Harris Williams & Co. Ltd is a private limited company authorised and regulated by the Financial Conduct Authority, incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales under company number Directors: Mr. Ned Valentine, Mr. Paul Poggi, Mr. Thierry Monjauze and Mr. Aadil Khan. Harris Williams & Co. Ltd Niederlassung Frankfurt (German branch) is registered in the Commercial Register (Handelsregister) of the Local Court (Amtsgericht) of Frankfurt am Main, Germany, under registration number HRB 96687, having its business address at Bockenheimer Landstrasse 33-35, Frankfurt am Main, Germany. Permanent Representative (Ständiger Vertreter) of the Branch Niederlassung: Mr. Jeffery H. Perkins.

2 WHAT WE RE READING AUTO AFTERMARKET GROWING, BUT FACING NEW CHALLENGES The U.S. automotive aftermarket continues to experience growth and is expected to generate $318 billion in revenue this year, according to industry officials. Auto Care Association President and CEO Bill Hanvey and Automotive Aftermarket Association President and COO Bill Long offered an overview of the aftermarket in relation to the growth in telematics and autonomous vehicle development. The two association executives touted that the aftermarket is the third largest employer behind the health care and construction industries. By 2020, the industry is expected to reach $421 billion in sales. But the industry faces challenges from new companies and developing technologies, including autonomous vehicles. Tire Business SUPPLIERS EXPECT SIGNIFICANT ELECTRIC VEHICLE IMPACT IN NEAR FUTURE The Automotive Aftermarket Association (AASA) has released results of a recent survey that shows many AASA supplier members believe that the electrification of vehicles will impact their businesses within the next 10 years. Of those expecting an impact, the majority reported that they expect the impact to be negative. This is according to the results of the AASA s Q Supplier Barometer survey. Although the majority of AASA Barometer survey respondents are concerned about the impact from electrified vehicles, the majority also report preparations are underway to respond to new market demands, said Bill Long, AASA president and chief operating officer. Aftermarket News HEAVY-DUTY AFTERMARKET CHAIN BUILDS ON AUTOMOTIVE PARTS MODEL When it comes to delivering the right part, as soon as it s needed, aftermarket suppliers serving the heavy-duty equipment industry have lagged behind those serving the automotive and light-duty sectors but the gap is narrowing thanks to better distribution networks and inventory management technology. In the truck parts business, the supply chains are just not as efficient as they are in the auto space. The auto retailers and the auto chains are much further along in their ability to deliver a broad range of products more rapidly, says FleetPride Chief Merchandising Officer Robert Sammons. Trailer-Body Builders SELF-DRIVING TRUCKS MAY BE CLOSER THAN THEY APPEAR Trucks will someday drive themselves out of warehouses and cruise down freeways without the aid of humans or even a driver s cab about that there seems little disagreement. The question is how soon that day gets here. And while the answers vary technologists, not surprisingly, are more bullish than truckers billions of dollars and a growing parade of companies, from tiny start-ups to the country s biggest trucking operations, are betting it will be here sooner than most people think. This year, companies and investors are on pace to put just over $1 billion into self-driving and other trucking technologies, 10 times the level of three years ago, according to CB Insights, which tracks the venture capital industry. New York Times CONTENTS M&A TRANSACTIONS PUBLIC MARKETS OVERVIEW STOCK PRICE PERFORMANCE OUR GROUP CONTACTS UNITED STATES Frank Mountcastle Managing Director fmountcastle@harriswilliams.com +1 (804) Jason Bass Managing Director jbass@harriswilliams.com +1 (804) Joe Conner Managing Director jconner@harriswilliams.com +1 (804) Jershon Jones Director jjones@harriswilliams.com +1 (804) Jeff Burkett Director jburkett@harriswilliams.com +1 (804) Jeff Kidd Vice President jkidd@harriswilliams.com +1 (804) James O Malley Vice President jomalley@harriswilliams.com +1 (804) EUROPE Jeffery Perkins Managing Director jperkins@harriswilliams.com +49 (0) PAGE 1

3 M&A TRANSACTIONS (1,2,3) RECENT M&A TRANSACTIONS Date Target Business Description Acquirer 11/17/2017 Good Roads Auto Systems Distributes wheels and tires across the east coast TSW Alloy Wheels 11/13/2017 MotoStar Tire & Auto Products Wholesale distribution of motor vehicle supplies, accessories, tools, and equipment K&M Tire 11/6/2017 FullSpeed Automotive Franchisor of automotive oil change centers CenterOak Partners 11/2/2017 Argus Cyber Security Provides comprehensive automotive cyber security solutions Elektrobit Automotive 11/2/2017 Speedco National network of service locations that provides quick lube and inspection services to the trucking industry 11/1/2017 Warn Industries Designs, manufactures, and markets vehicle equipment and accessories Love's Travel Stops & Country Stores LKQ Corp. 10/17/2017* Omix-ADA World's largest independent developer and supplier of Jeep and offroad parts, accessories, and floor liners Truck Hero, Inc. 10/11/2017 Dallas Service Center, Inc. Provides truck repair services in the Dallas-Fort Worth area Ryder System, Inc. 10/9/2017 DRB Holdings Provides technology products to the car wash industry New Mountain Capital 10/3/2017 Hy-Per Lube Corporation Manufactures high-performance additives Bar's Products 10/2/2017 American Driveline Systems, Inc. Offers automotive aftermarket franchising services through its subsidiaries Icahn Enterprises LP 9/25/2017 Alliance Automotive Group Leading European distributor of vehicle parts, tools, and workshop equipment Genuine Parts Co. 9/13/2017 Newpark Auto Service Provides auto service and repairs Icahn Associates Holding LLC 9/11/2017 DuraFit Brand of OEM replacement diesel particulate filters (DPFs) and diesel oxidation catalysts (DOCs) APC Automotive Technologies 9/7/2017* Bosch Mahle Turbo Systems GmbH & Co. KG Manufactures and distributes exhaust gas turbochargers for passenger cars and commercial vehicles Fountainvest Partners (Asia) Ltd. 9/5/2017 Rack Attack Retails automotive racks and hitches Connor, Clark & Lunn Financial Group Ltd. 9/5/2017 Rolling Big Power (RBP) Premium truck accessories lifestyle brand Pilot Inc. 9/4/2017 Klapper Autoteile GmbH & Co. KG Full-line automotive parts wholesaler and distributor Alliance Automotive Group SAS *Denotes pending transactions PAGE 2

4 PUBLIC MARKETS OVERVIEW (1) TEV / LTM EBITDA TEV / 2017P EBITDA Dealerships and Services Providers 12.1x Dealerships and Services Providers 12.0x 11.2x 10.4x 10.1x 10.2x 8.2x 8.0x AVERAGE REVENUE GROWTH ( ) AVERAGE REVENUE GROWTH ( P) Dealerships and Services Providers 11.2% 6.9% 6.2% 6.3% 0.1% Dealerships and Services Providers 6.3% (1.1%) 2.0% AVERAGE EBITDA GROWTH ( ) AVERAGE EBITDA GROWTH ( P) Dealerships and Services Providers 12.0% 10.2% 11.1% Dealerships and Services Providers 9.2% 4.6% 9.1% 2.6% 1.2% PAGE 3

5 STOCK PRICE PERFORMANCE (1) MEDIAN % CHANGE (1 MONTH) MEDIAN % CHANGE (12 MONTH) S&P % S&P % Distributors and Retailers (0.3%) Vehicle Manufacturers 17.4% Vehicle Manufacturers (0.9%) Dealerships and Service Providers 14.1% Dealerships and Service Providers (1.0%) 0.2% (6.1%) Distributors and Retailers (12.4%) TRAILING TWELVE MONTHS (Indexed to November 11 th, 2016) 30% 20% 10% 0% (10%) (20%) (30%) (40%) Nov-16 Feb-17 May-17 Aug-17 Nov-17 Dealerships and Service Providers S&P 500 Index PAGE 4

6 OUR GROUP Harris Williams & Co. is a leading advisor to the transportation and logistics M&A market. Our Transportation & Logistics Group serves companies in a broad range of attractive niches, including third-party logistics (3PL), truck, rail, marine and air transportation, transportation equipment, and the automotive and heavy duty vehicle market. RECENTLY CLOSED T&L TRANSACTIONS has been recapitalized by is merging with has merged with an operating company of has acquired has merged with in a recapitalization by and DEEP EXPERIENCE ACROSS T&L SECTORS THIRD-PARTY LOGISTICS RAIL & RAIL SERVICES MARINE TRANSPORTATION TRANSPORTATION EQUIPMENT NICHE TRANSPORTATION AUTOMOTIVE & HEAVY DUTY VEHICLE AIR TRANSPORTATION PAGE 5

7 OUR FIRM Harris Williams & Co. has a broad range of industry expertise, which creates powerful opportunities. Our clients benefit from our deep-sector experience, integrated industry intelligence and collaboration across the firm, and our commitment to learning what makes them unique. For more information, visit our website. Aerospace, Defense & Government Services Building Products & Materials Business Services Consumer Energy, Power & Infrastructure Healthcare & Life Sciences Industrials Specialty Distribution Technology, Media & Telecom Transportation & Logistics HARRIS WILLIAMS & CO. OFFICE LOCATIONS Boston One International Place Suite 2620 Boston, Massachusetts Phone: +1 (617) Cleveland 1900 East 9th Street 20th Floor Cleveland, Ohio Phone: +1 (216) Minneapolis 222 South 9th Street Suite 3350 Minneapolis, Minnesota Phone: +1 (612) UNITED STATES Richmond (Headquarters) 1001 Haxall Point 9th Floor Richmond, Virginia Phone: +1 (804) San Francisco 575 Market Street 31st Floor San Francisco, California Phone: +1 (415) Washington, D.C th St. NW 2nd Floor Washington, D.C Phone: Beijing Hong Kong Mumbai EUROPE Frankfurt Bockenheimer Landstrasse Frankfurt Germany Phone: London 63 Brook Street London W1K 4HS, England Phone: +44 (0) NETWORK OFFICES New Delhi Shanghai PAGE 6

8 PUBLIC COMPARABLES (1) Stock Performance Stock Price Change from 52-Week TEV / LTM EBITDA as of TEV / EBITDA ($ in millions except per share data) TEV Current Prior Month Prior Year High % of High Nov-16 May-17 Current 2017P 2018P Automotive Aftermarket BorgWarner Inc. $13,023 $ % 51.7% $ % 6.6x 7.1x 8.3x 8.0x 7.5x Cooper Tire & Rubber Company 1, (6.1%) (7.7%) % 3.0x 3.6x 3.8x 4.7x 4.4x Dorman Products, Inc. 2, (4.1%) 0.2% % 13.1x 14.0x 10.7x 10.7x 9.5x Goodyear Tire & Rubber Company 13, (11.5%) (3.2%) % 5.6x 5.5x 6.0x 6.1x 5.4x Modine Manufacturing Company 1, % 91.0% % 4.5x 8.9x 9.2x 8.4x 7.4x Motorcar Parts of America, Inc (16.5%) (7.3%) % 8.8x 9.5x 7.7x 5.9x 5.1x Standard Motor Products, Inc. 1, (12.3%) (17.9%) % 10.4x 9.6x 8.2x 9.2x 7.6x Tenneco Inc. 4, (9.8%) 1.6% % 5.2x 5.6x 7.1x 5.1x 4.7x Visteon Corporation 3, % 66.5% % 7.6x 9.5x 10.5x 10.4x 9.5x Median (6.1%) 0.2% 78.2% 6.6x 8.9x 8.2x 8.0x 7.4x Advance Auto Parts, Inc. $8,055 $ % (31.4%) $ % 8.4x 12.2x 9.0x 8.9x 7.9x AutoZone, Inc. 22, % (15.0%) % 11.5x 10.3x 9.5x 9.5x 9.3x Genuine Parts Company 13, (9.3%) (9.5%) % 12.0x 11.9x 11.6x 11.1x 9.5x LKQ Corporation 14, (0.3%) 14.3% % 13.5x 11.7x 13.2x 13.0x 11.6x O'Reilly Automotive, Inc. 21, % (17.2%) % 14.2x 13.7x 11.2x 11.2x 10.6x U.S. Auto Parts Network, Inc (13.1%) (7.2%) % 8.5x 14.8x 11.6x 7.2x 6.7x Uni-Select Inc. 1, (15.2%) (12.4%) % 10.2x 10.6x 10.9x 10.2x 8.4x Median (0.3%) (12.4%) 75.7% 11.5x 11.9x 11.2x 10.2x 9.3x Dealerships and Service Providers Asbury Automotive Group, Inc. $2,966 $ % 6.6% $ % 9.2x 8.8x 9.0x 9.3x 9.1x AutoNation, Inc. 8, % 16.2% % 7.5x 6.9x 8.9x 9.1x 8.7x Boyd Group Income Fund 1, (1.9%) 14.0% % 14.3x 14.4x 16.5x 15.2x 12.3x CarMax, Inc. 25, (5.5%) 25.3% % NM NM NM 18.5x 17.9x Copart, Inc. 8, (1.3%) 29.9% % 15.0x 14.6x 16.5x 16.5x 14.9x Group 1 Automotive, Inc. 4, % 14.1% % 9.8x 9.7x 10.3x 11.4x 10.7x KAR Auction Services, Inc. 10, % 21.1% % 12.4x 12.2x 12.5x 12.0x 11.1x Lithia Motors, Inc. Class A 5, (1.0%) 30.6% % 10.5x 11.0x 12.4x 12.5x 11.2x Monro Inc 1, (8.8%) (17.0%) % 14.6x 13.0x 11.7x 11.4x 10.2x Penske Automotive Group, Inc. 9, % (7.6%) % 14.0x 13.6x 14.2x 13.0x 12.5x Sonic Automotive, Inc. Class A 3, (3.7%) (5.8%) % 10.4x 10.2x 10.6x 10.6x 10.8x Median (1.0%) 14.1% 91.9% 11.5x 11.6x 12.1x 12.0x 11.1x PAGE 7

9 PUBLIC COMPARABLES (1) Stock Performance Stock Price Change from 52-Week TEV / LTM EBITDA as of TEV / EBITDA ($ in millions except per share data) TEV Current Prior Month Prior Year High % of High Nov-16 May-17 Current 2017P 2018P Automotive Aftermarket Bayerische Motoren Werke AG $167,829 $ (2.0%) 16.7% $ % 8.2x 8.9x 10.3x 9.7x 9.5x Daimler AG 205, % 18.2% % 6.8x 7.4x 9.8x 8.9x 8.8x Ford Motor Company 159, (0.3%) (0.4%) % 11.6x 12.2x 12.9x 13.9x 13.1x General Motors Company 133, (6.6%) 28.7% % 5.5x 5.4x 6.0x 7.5x 8.3x Harley-Davidson, Inc. 14, % (20.3%) % 11.5x 13.6x 16.1x 12.6x 12.0x Navistar International Corporation 8, (8.9%) 41.4% % 13.2x 15.7x 16.1x 15.2x 10.2x Oshkosh Corp 6, (1.4%) 30.4% % 10.5x 10.2x 11.4x 11.0x 10.2x PACCAR Inc 29, (5.2%) 15.7% % 8.7x 9.6x 9.4x 9.7x 8.8x Toyota Motor Corp. 319, % 12.9% % 8.3x 8.5x 9.6x 11.3x 10.9x Volkswagen AG Pref 211, % 45.7% % 5.9x 5.6x 5.5x 5.5x 5.1x Median (0.9%) 17.4% 91.4% 8.5x 9.3x 10.1x 10.4x 9.9x PAGE 8

10 PUBLIC COMPARABLES (1) Revenue Revenue Growth EBITDA EBITDA Growth ($ in millions) P 2018P '13-16 '16-18P P 2018P '13-16 '16-18P Automotive Aftermarket BorgWarner Inc. $7,435 $8,304 $8,025 $9,071 $9,694 $10, % 7.1% $1,224 $1,385 $1,330 $1,507 $1,624 $1, % 7.3% Cooper Tire & Rubber Company 3,439 3,421 2,959 2,925 2,841 2,956 (5.3%) 0.5% % (13.3%) Dorman Products, Inc , % 8.0% % 9.6% Goodyear Tire & Rubber Company 19,540 18,138 16,443 15,158 15,232 15,504 (8.1%) 1.1% 2,107 2,251 2,349 2,520 2,142 2, % (1.7%) Modine Manufacturing Company 1,478 1,496 1,353 1,503 1,998 2, % 18.4% % 32.2% Motorcar Parts of America, Inc % 9.6% % 26.2% Standard Motor Products, Inc ,058 1,102 1, % 4.0% % (0.1%) Tenneco Inc. 7,964 8,420 8,209 8,599 9,188 9, % 5.8% % 10.7% Visteon Corporation 7,439 7,509 3,245 3,161 3,157 3,290 (24.8%) 2.0% (18.2%) 11.4% Total $49,202 $49,322 $42,377 $42,756 $44,590 $46, % 6.3% $5,433 $5,902 $5,684 $6,206 $6,007 $6, % 9.1% Advance Auto Parts, Inc. $6,494 $9,844 $9,737 $9,568 $9,405 $9, % 0.4% $901 $1,244 $1,147 $1,068 $909 $1, % (1.2%) AutoZone, Inc. 9,148 9,475 10,187 10,636 10,889 10, % 1.2% 2,048 2,089 2,223 2,358 2,403 2, % 1.0% Genuine Parts Company 14,078 15,342 15,280 15,340 15,991 18, % 9.4% 1,117 1,273 1,266 1,217 1,237 1, % 10.4% LKQ Corporation 5,063 6,740 7,193 8,584 9,611 10, % 10.3% ,007 1,112 1, % 11.2% O'Reilly Automotive, Inc. 6,649 7,216 7,967 8,593 8,969 9, % 4.7% 1,287 1,465 1,743 1,917 1,960 2, % 3.9% U.S. Auto Parts Network, Inc % 2.0% % 25.3% Uni-Select Inc. 1,788 1,784 1,355 1,197 1,401 1,728 (12.5%) 20.1% % 20.7% Total $43,474 $50,685 $52,010 $54,221 $56,572 $60, % 6.9% $6,077 $6,968 $7,331 $7,684 $7,760 $8, % 10.2% Dealerships and Service Providers Asbury Automotive Group, Inc. $5,335 $5,868 $6,588 $6,528 $6,454 $6, % 0.2% $270 $313 $331 $334 $320 $ % (1.0%) AutoNation, Inc. 17,518 19,109 20,862 21,609 21,413 21, % 0.6% % (2.4%) Boyd Group Income Fund ,047 1,240 1, % 16.7% % 21.3% CarMax, Inc. 12,574 14,269 15,150 15,875 17,153 18, % 7.0% ,377 1, % 41.6% Copart, Inc. 1,046 1,163 1,146 1,268 1,448 1, % 6.8% % 8.9% Group 1 Automotive, Inc. 8,919 9,938 10,633 10,888 11,031 11, % 1.7% % (3.3%) KAR Auction Services, Inc. 2,173 2,365 2,640 3,150 3,455 3, % 8.1% % 11.2% Lithia Motors, Inc. Class A 4,006 5,390 7,864 8,678 10,102 11, % 13.8% % 9.6% Monro Inc ,022 1,135 1, % 8.7% % 10.0% Penske Automotive Group, Inc. 14,705 17,177 19,285 20,119 21,211 21, % 3.8% % 8.6% Sonic Automotive, Inc. Class A 8,843 9,197 9,624 9,732 9,839 10, % 1.4% % (3.0%) Total $76,512 $86,134 $95,653 $99,915 $104,480 $108, % 6.3% $4,019 $4,617 $5,143 $5,276 $6,114 $6, % 9.2% PAGE 9

11 PUBLIC COMPARABLES (1) Revenue Revenue Growth EBITDA EBITDA Growth ($ in millions) P 2018P '13-16 '16-18P P 2018P '13-16 '16-18P Automotive Aftermarket Bayerische Motoren Werke AG $100,976 $106,648 $102,215 $104,163 $113,569 $117, % 6.2% $19,443 $21,734 $19,303 $19,370 $17,208 $17,622 (0.1%) (4.6%) Daimler AG 156, , , , , , % 7.5% 21,575 25,517 25,668 26,177 23,339 23, % (4.3%) Ford Motor Company 146, , , , , , % (2.6%) 13,183 11,324 15,079 12,296 11,400 12,499 (2.3%) 0.8% General Motors Company 155, , , , , , % (6.7%) 13,284 10,160 15,518 20,671 17,024 15, % (14.7%) Harley-Davidson, Inc. 5,900 6,229 5,995 5,996 4,891 4, % (8.8%) 1,324 1,452 1,330 1,240 1,133 1,176 (2.2%) (2.7%) Navistar International Corporation 10,775 10,806 10,140 8,111 8,229 9,177 (9.0%) 6.4% (192) NM 28.5% Oshkosh Corp 7,665 6,808 6,098 6,279 6,830 6,830 (6.4%) 4.3% (7.0%) 7.1% PACCAR Inc 17,124 18,997 19,115 17,005 17,867 19,294 (0.2%) 6.5% 2,436 2,899 3,198 2,939 3,076 3, % 7.4% Toyota Motor Corp. 256, , , , , ,096 (0.2%) (0.2%) 35,160 38,164 36,457 34,060 26,737 27,999 (1.1%) (9.3%) Volkswagen AG Pref 261, , , , , ,860 (2.8%) 7.1% 30,822 36,343 26,777 37,788 37,527 40, % 3.7% Total $1,119,448 $1,138,291 $1,084,281 $1,124,689 $1,146,528 $1,172,528 (1.1%) 2.0% $137,679 $148,510 $144,420 $155,533 $138,561 $143, % 1.2% PAGE 10

12 SOURCES 1. FactSet. 2. MergerMarket. 3. Pitchbook. DISCLOSURES Harris Williams & Co. ( is a preeminent middle market investment bank focused on the advisory needs of clients worldwide. The firm has deep industry knowledge, global transaction expertise, and an unwavering commitment to excellence. Harris Williams & Co. provides sell-side and acquisition advisory, restructuring advisory, board advisory, private placements, and capital markets advisory services. Harris Williams & Co. Ltd is a private limited company authorised and regulated by the Financial Conduct Authority, incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales under company number Directors: Mr. Ned Valentine, Mr. Paul Poggi, Mr. Thierry Monjauze and Mr. Aadil Khan. Harris Williams & Co. Ltd Niederlassung Frankfurt (German branch) is registered in the Commercial Register (Handelsregister) of the Local Court (Amtsgericht) of Frankfurt am Main, Germany, under registration number HRB 96687, having its business address at Bockenheimer Landstrasse 33-35, Frankfurt am Main, Germany. Permanent Representative (Ständiger Vertreter) of the Branch Niederlassung: Mr. Jeffery H. Perkins. THIS REPORT MAY CONTAIN REFERENCES TO REGISTERED TRADEMARKS, SERVICE MARKS AND COPYRIGHTS OWNED BY THIRD-PARTY INFORMATION PROVIDERS. NONE OF THE THIRD-PARTY INFORMATION PROVIDERS IS ENDORSING THE OFFERING OF, AND SHALL NOT IN ANY WAY BE DEEMED AN ISSUER OR UNDERWRITER OF, THE SECURITIES, FINANCIAL INSTRUMENTS OR OTHER INVESTMENTS DISCUSSED IN THIS REPORT, AND SHALL NOT HAVE ANY LIABILITY OR RESPONSIBILITY FOR ANY STATEMENTS MADE IN THE REPORT OR FOR ANY FINANCIAL STATEMENTS, FINANCIAL PROJECTIONS OR OTHER FINANCIAL INFORMATION CONTAINED OR ATTACHED AS AN EXHIBIT TO THE REPORT. FOR MORE INFORMATION ABOUT THE MATERIALS PROVIDED BY SUCH THIRD PARTIES, PLEASE CONTACT US. The information and views contained in this report were prepared by Harris Williams & Co. ( Harris Williams ). It is not a research report, as such term is defined by applicable law and regulations, and is provided for informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy. The information contained herein is believed by Harris Williams to be reliable, but Harris Williams makes no representation as to the accuracy or completeness of such information. Harris Williams and/or its affiliates may be market makers or specialists in, act as advisers or lenders to, have positions in and effect transactions in securities of companies mentioned herein and also may provide, may have provided, or may seek to provide investment banking services for those companies. In addition, Harris Williams and/or its affiliates or their respective officers, directors and employees may hold long or short positions in the securities, options thereon or other related financial products of companies discussed herein. Opinions, estimates and projections in this report constitute Harris Williams judgment and are subject to change without notice. The financial instruments discussed in this report may not be suitable for all investors, and investors must make their own investment decisions using their own independent advisors as they believe necessary and based upon their specific financial situations and investment objectives. Also, past performance is not necessarily indicative of future results. No part of this material may be copied or duplicated in any form or by any means, or redistributed, without Harris Williams prior written consent. Copyright 2017 Harris Williams & Co., all rights reserved. PAGE 11