TRANSPORTATION & LOGISTICS

Transcription

1 Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is authorised and regulated by the Financial Conduct Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business.

2 WHAT WE RE READING NPD: AGING VEHICLES, PREMIUM VALUE DROVE GROWTH FOR THE AFTERMARKET Aging vehicle maintenance and repairs, and consumer preferences for premium and innovative products, were factors that fueled the automotive aftermarket industry s 2.5 percent dollar growth in 2014 (52 weeks ending Jan. 3, 2015), according to global information company The NPD Group. In the U.S., there are more vehicles aged 15 years and older on the roads today than there were five years ago, which runs parallel with the fact that consumers are more willing to spend more on premium, high-quality products that will keep their cars healthy and running in the long term. AftermarketNews AUTOMAKERS TURNING TO AFTERMARKET FOR TRENDS, IDEAS The Detroit automakers and others are using the more than $30 billion industry as inspiration for styling as well as gauging interest in parts and accessories for production cars and trucks. They re paying a lot more attention, said Hanno Lorenzl, EY Global Automotive & Transportation Center senior manager. They re looking at, what are the trends in the aftermarket? What are people putting on their vehicle after they purchase it at a dealership and how can we profit off of it? Detroit News NEW NORMAL: MILES DRIVEN RECOVERS SLOWLY, BUT OPPORTUNITIES REMAIN Miles driven has not seen a drastic post-recession recovery, continuing to hover at about the same level it was in 2004 and still far short of its peak in November Automotive service providers must learn to accept this new normal, according to David Portalatin, executive director of industry analysis for NPD Group Inc. The reality today is that we are driving 60 billion fewer miles per year than we were before the recession, he said. Tire Business Q4, 14 & 15 AUTO SALES DATA & COMMENTARY: ERNST & YOUNG The North American market has, once again, shown its strength buoyed by improving economics across the region full year sales for the region are expected to come in around 19.4 million units, an increase of 5.7 percent over FY13. The improving economic situation and increased consumer spending in the region are responsible for the sales boost. For 2015, overall sales will still increase but at a slower pace versus previous years as pent-up demand begins to slow and fewer vehicles are coming off lease as witnessed in 2013 and AftermarketNews APPLE HIRING AUTO EXPERTS FOR SECRET RESEARCH PROJECT 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) EUROPE Jeffery Perkins Managing Director jperkins@harriswilliams.com +49 (0) Apple Inc. is hiring automotive technology and design experts to staff up a topsecret research lab, with the possible intention of building a car, the Financial Times reported on Friday, citing several people familiar with the iphone maker. Reuters GAS PRICES, LONGER-LIVED CARS LIFT AUTO PARTS STOCKS For years, auto parts retailers like AutoZone and O'Reilly Automotive have delivered steady financial gains, thanks to an aging fleet of cars on the road. As recession-weary consumers put off buying new vehicles, the average age of cars has continued to rise. So has demand for replacement parts and repair work. The upshot for the aftermarket parts industry has been a consistent flow of new business. NASDAQ PAGE 1

3 M&A TRANSACTIONS RECENT M&A TRANSACTIONS 1,2 Date Target Business Description Acquirer Pending Anixter Inc., Fasteners Segment Global distributor and manufacturer of highly-engineered fasteners. American Industrial Partners Pending Pending Uni-Select USA, Inc. and Beck/Arnley Worldparts, Inc. (excludes FinishMaster business) American Tire Distributors Holdings, Inc. Uni-Select USA: automotive parts distributor. Beck/Arnley Worldparts: premium OE parts distributor. Independent supplier of tires to the North American replacement tire market. Icahn Enterprises, L.P. Ares Management, L.P. Pending TI Automotive LTD Car-parts manufacturer. Bain Capital 2/12/2015 ATDynamics, Inc. Designer, manufacturer, and supplier of clean technology products engineered to reduce fuel consumption and carbon emissions in the transportation industry. 1/30/2015 ZF Lenksysteme GmbH Developer, producer, and seller of steering systems for passenger cars and commercial vehicles worldwide. Stemco LP Robert Bosch GmbH 1/29/2015 Veyance Technologies, Inc. Manufacturer of conveyor belts and other rubber-engineered products. ContiTech AG 1/20/2015 Bushwacker, Incorporated Manufacturer and marketer of branded automotive aftermarket accessories. Lund International, Inc. 1/5/2015 ACCEL Performance Group, LLC Prominent performance aftermarket parts manufacturer with brands MSD LLC including ACCEL, Mr. Gasket, Mallory Ignition, Lakewood, QuickTime and Hays. 1/2/2015 Grand Sport Auto Body Inc. Multi-location collision repair operator in Philadelphia. Service King Paint & Body, LLC 12/31/2014 Pohanka Collision Centers Inc Provider of automotive collision repair services in Virginia and Maryland. Caliber Collision Centers 12/31/2014 Dealer Tire, LLC Value-added distributor of replacement tires and parts for automotive OEMs and their dealers. Lindsay Goldberg 12/23/2014 US Farathane Corporation Designer, manufacturer, and supplier of engineered plastic injectionmolded components to the automotive industry. 12/10/2014 Commonwealth Laminating & Coating, Inc. Manufacturer of solar control window and specialty films for automotive, architectural, and safety and security applications. The Gores Group LLC; Evergreen Capital Partners LLC Eastman Chemical Co. 12/10/2014 National Pronto Association (Merger) Automotive program distribution group with a focus on marketing, technology, and buying. Federated Auto Parts 11/30/2014 BBB Industries, LLC Manufacturer and distributor of aftermarket vehicle parts. Pamplona Capital Management LLP 11/3/2014 Mavis Tire Supply Corporation Online dealer of discount tires and provider of various products and services to the automotive aftermarket. ONCAP 10/31/2014 Qualitor Inc. Global supplier of branded aftermarket safety and wear products for the automotive aftermarket. Wellspring Capital Management LLC PAGE 2

4 PUBLIC MARKETS OVERVIEW TEV / LTM EBITDA TEV / 2015P EBITDA Dealerships and Services 13.4x Dealerships and Services 11.8x 11.6x 10.7x 10.4x 10.1x 8.5x 6.6x AVERAGE REVENUE GROWTH ( E) AVERAGE REVENUE GROWTH (2014E 2016P) Dealerships and Services 14.9% Dealerships and Services 9.0% 7.7% 6.3% 3.9% 3.0% 3.3% 2.4% AVERAGE EBITDA GROWTH ( E) AVERAGE EBITDA GROWTH (2014E 2016P) Dealerships and Services 15.5% Dealerships and Services 11.1% 9.0% 11.0% 8.8% 9.1% 3.7% 6.1% PAGE 3

5 STOCK PRICE PERFORMANCE MEDIAN % CHANGE (1 MONTH) MEDIAN % CHANGE (12 MONTH) 9.9% Dealerships and Service 26.7% 9.2% Distributors and Retailers 17.4% Distributors and Retailers 6.4% 3.0% Dealerships and Service 6.3% 2.9% TRAILING TWELVE MONTHS (Indexed to February 18, 2014) 40% 30% 20% 10% 0% (10%) (20%) 2/18/14 5/18/14 8/18/14 11/18/14 2/18/15 Dealerships and Service S&P 500 Index (^SPX) - Index Value PAGE 4

6 OUR GROUP Harris Williams & Co. is a leading advisor to the transportation and logistics M&A market. Our Transportation & Logistics Group has experience across a broad range of sectors, including third-party logistics, rail and rail services, marine transportation, transportation equipment, niche transportation, automotive and heavy duty vehicle, and airport and aviation services. RECENTLY CLOSED T&L TRANSACTIONS RCL Services Group in partnership with and has sold and to DEEP EXPERIENCE ACROSS T&L SECTORS THIRD-PARTY LOGISTICS RAIL & RAIL SERVICES MARINE TRANSPORTATION TRANSPORTATION EQUIPMENT NICHE TRANSPORTATION AUTOMOTIVE & HEAVY DUTY VEHICLE AIRPORT & AVIATION SERVICES 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 at Aerospace, Defense & Government Services Building Products & Materials Business Services Consumer Energy & Power Healthcare & Life Sciences Industrials Specialty Distribution Technology, Media & Telecom Transportation & Logistics HARRIS WILLIAMS & CO. OFFICE LOCATIONS Boston Two International Place 24th Floor Boston, Massachusetts Phone: +1 (617) Fax: +1 (617) Cleveland 1900 East 9th Street 20th Floor Cleveland, Ohio Phone: +1 (216) Fax: +1 (216) Minneapolis 222 South 9th Street Suite 3350 Minneapolis, Minnesota Phone: +1 (612) Fax: +1 (612) UNITED STATES Philadelphia 1600 Market Street 21st Floor Philadelphia, Pennsylvania Phone: +1 (267) Fax: +1 (267) Richmond (U.S. Headquarters) 1001 Haxall Point 9th Floor Richmond, Virginia Phone: +1 (804) Fax: +1 (804) San Francisco 575 Market Street 31st Floor San Francisco, California 94105, USA Phone: +1 (415) Fax: +1 (415) EUROPE Frankfurt Bockenheimer Landstrasse Frankfurt Germany Phone: Fax: London 63 Brook Street London W1K 4HS, England Phone: +44 (0) Fax: +44 (0) Beijing Hong Kong Mumbai NETWORK OFFICES New Delhi Shanghai PAGE 6

8 PUBLIC COMPARABLES Automotive Aftermarket Stock Performance Stock Price Change from 52-Week TEV / LTM EBITDA as of TEV / EBITDA TEV Current Prior Month Prior Year High % of High Feb-14 Aug-14 Current 2014E 2015P BorgWarner Inc. $14,271 $ % 3.8% $ % 11.1x 11.1x 10.2x 10.1x 9.4x Cooper Tire & Rubber Co. 2, % 52.8% % 4.8x 5.5x 5.8x 5.6x 6.1x Dorman Products, Inc. 1, (2.1%) (12.4%) % 13.3x 10.1x 10.3x 9.9x 9.1x Federal-Mogul Holdings Corporation 4, % (10.4%) % 8.1x 7.5x 7.5x 7.1x 6.3x The Goodyear Tire & Rubber Company 12, % 2.9% % 5.3x 5.9x 5.5x 5.5x 5.1x Modine Manufacturing Company % (12.4%) % 6.6x 6.2x 6.0x 5.9x 5.9x Motorcar Parts of America, Inc (19.5%) (10.7%) % 12.7x 11.7x 11.6x 8.5x 6.6x Remy International, Inc % 4.0% % 7.1x 7.0x 14.4x 7.3x 7.0x Standard Motor Products Inc % 24.5% % 7.0x 8.3x 8.5x 8.9x 7.6x Tenneco Inc. 4, % (2.7%) % 6.5x 6.8x 5.9x 5.8x 5.4x Visteon Corporation 5, % 20.2% % 8.3x 8.0x 8.8x 8.2x 6.9x Median 9.9% 2.9% 83.8% 7.1x 7.5x 8.5x 7.3x 6.6x Advance Auto Parts Inc. $12,729 $ % 20.8% $ % 10.2x 10.8x 10.4x 10.4x 9.5x AutoZone, Inc. 24, % 14.0% % 10.9x 10.4x 11.3x 11.5x 10.9x Genuine Parts Company 15, (1.6%) 9.3% % 12.1x 11.7x 11.8x 11.9x 11.0x LKQ Corp. 9, % (5.8%) % 15.9x 13.9x 13.0x 12.2x 10.5x O'Reilly Automotive Inc. 22, % 33.0% % 13.6x 12.4x 15.1x 15.2x 13.5x Pep Boys - Manny, Moe & Jack % (28.0%) % 8.6x 9.3x 9.0x 6.4x 8.2x U.S. Auto Parts Network, Inc % 25.4% % 18.6x 14.8x 17.6x 13.3x 9.9x Uni-Select Inc. 1, % 26.6% % 11.9x 11.3x 11.1x 9.4x 11.3x Median 6.4% 17.4% 92.1% 12.0x 11.5x 11.6x 11.7x 10.7x Dealerships and Service Asbury Automotive Group, Inc. $3,491 $ % 60.1% $ % 10.7x 12.2x 11.9x 12.2x 11.0x AutoNation Inc. 12, % 22.5% % 13.1x 13.2x 13.4x 13.6x 12.4x Boyd Group Income Fund (1.2%) 26.7% % 16.7x 15.8x 14.3x 11.9x 10.6x CarMax Inc. 22, % 42.9% % 18.3x 19.1x NM NM NM Copart, Inc. 4, % 12.5% % 13.3x 11.4x 11.9x 13.0x 11.9x Group 1 Automotive Inc. 4, % 31.9% % 11.4x 13.0x 11.6x 13.2x 11.8x KAR Auction Services, Inc. 7, % 31.4% % 12.6x 13.6x 13.4x 13.1x 11.8x Lithia Motors Inc. 3, % 48.6% % 11.1x 14.4x 13.4x 13.0x 10.0x Monro Muffler Brake Inc. 2, % 11.9% % 16.0x 13.6x 16.0x 18.1x 15.9x Penske Automotive Group, Inc. 8, % 13.2% % 14.9x 14.8x 14.6x 14.9x 13.2x Sonic Automotive Inc. 3, % 15.7% % 10.2x 11.0x 10.7x 11.2x 10.4x Median 6.3% 26.7% 96.0% 13.1x 13.6x 13.4x 13.0x 11.8x PAGE 7

9 PUBLIC COMPARABLES CONT. Automotive Aftermarket TRANSPORTATION & LOGISTICS Stock Performance Stock Price Change from 52-Week TEV / LTM EBITDA as of TEV / EBITDA TEV Current Prior Month Prior Year High % of High Feb-14 Aug-14 Current 2014E 2015P Bayerische Motoren Werke Aktiengesellschaft $154,172 $ % 6.2% $ % 10.6x 10.3x 10.4x 9.8x 9.9x Daimler AG 184, % 3.7% % 11.6x 8.1x 10.6x 9.7x 9.6x Ford Motor Co. 161, % 5.3% % 12.2x 13.9x 14.4x 19.5x 15.0x General Motors Company 82, % 2.4% % 5.5x 7.9x 9.0x 6.2x 5.3x Harley-Davidson, Inc. 18, % (0.8%) % 13.8x 12.2x 12.4x 12.0x 11.4x Navistar International Corporation 6, (10.3%) (22.7%) % NM NM NM NM 10.3x Oshkosh Corporation 4, % (14.7%) % 7.6x 7.8x 7.5x 7.0x 6.9x PACCAR Inc. 29, (0.0%) 3.5% % 14.1x 12.8x 10.1x 14.3x 11.4x Toyota Motor Corporation 339, % 15.0% % 9.0x 8.7x 10.4x 10.7x 10.8x Volkswagen AG 205, % (11.2%) % 8.2x 7.4x 7.5x 6.8x 6.7x Median 9.2% 3.0% 94.0% 10.6x 8.7x 10.4x 9.8x 10.1x PAGE 8

10 PUBLIC COMPARABLES CONT. Automotive Aftermarket Revenue Revenue Growth EBITDA EBITDA Growth E 2015P 2016P '11-14E '14E-16P E 2015P 2016P '11-14E '14E-16P BorgWarner Inc. $7,115 $7,183 $7,437 $8,294 $8,710 $9, % 8.2% $1,073 $1,126 $1,224 $1,417 $1,511 $1, % 9.9% Cooper Tire & Rubber Co. 3,908 4,201 3,439 3,407 3,072 3,341 (4.5%) (1.0%) % 6.9% Dorman Products, Inc % 9.7% % 11.1% Federal-Mogul Holdings Corporation 6,719 6,444 6,786 7,410 8,020 9, % 10.5% % 15.1% The Goodyear Tire & Rubber Company 22,767 20,992 19,540 18,203 17,598 17,877 (7.2%) (0.9%) 1,893 1,819 2,105 2,280 2,460 2, % 8.0% Modine Manufacturing Company 1,448 1,577 1,376 1,448 1,520 1,518 (0.0%) 2.4% % 2.0% Motorcar Parts of America, Inc % 22.5% % 28.7% Remy International, Inc. 1,195 1,134 1,119 1,185 1,144 1,239 (0.3%) 2.3% (6.3%) 7.0% Standard Motor Products Inc ,015 1, % 3.4% NA 10.5% NA Tenneco Inc. 7,205 7,363 7,964 8,453 8,539 9, % 4.0% % 7.4% Visteon Corporation 7,532 6,857 7,439 7,606 8,578 8, % 8.0% % 14.0% Total $59,438 $57,449 $56,961 $58,002 $59,346 $63, % 6.3% $5,492 $5,554 $6,076 $6,840 $7,334 $8, % 11.0% Advance Auto Parts Inc. $6,170 $6,205 $6,494 $9,885 $9,978 $10, % 2.2% $841 $847 $901 $1,259 $1,358 $1, % 8.0% AutoZone, Inc. 8,073 8,604 9,148 9,498 10,104 10, % 5.3% 1,691 1,841 2,002 2,089 2,223 2, % 6.0% Genuine Parts Company 12,459 13,014 14,078 15,255 15,940 16, % 4.3% 998 1,122 1,159 1,282 1,368 1, % 5.9% LKQ Corp. 3,270 4,123 5,063 6,751 7,428 8, % 9.7% , % 19.3% O'Reilly Automotive Inc. 5,789 6,182 6,649 7,192 7,729 8, % 7.0% 1,030 1,155 1,287 1,448 1,634 1, % 10.2% Pep Boys - Manny, Moe & Jack 1,989 2,064 2,091 2,108 2,089 2, % 0.9% (7.1%) 5.3% U.S. Auto Parts Network, Inc (5.1%) 9.9% NM NM Uni-Select Inc. 1,781 1,798 1,788 1,780 1,426 1,144 (0.0%) (19.8%) % (12.0%) Total $39,857 $42,293 $45,565 $52,749 $55,001 $57, % 2.4% $5,250 $5,691 $6,178 $7,115 $7,737 $8, % 6.1% Dealerships and Service Asbury Automotive Group, Inc. $4,004 $4,475 $5,128 $5,846 $6,424 $6, % 7.7% $135 $208 $244 $289 $323 $ % 9.3% AutoNation Inc. 13,305 15,020 16,674 18,970 20,404 21, % 6.5% , % 7.9% Boyd Group Income Fund % 9.6% % 12.6% CarMax Inc. 8,976 10,004 10,963 12,679 14,263 15, % 11.6% ,069 1, % 9.0% Copart, Inc ,046 1,165 1,217 1, % 4.9% % 9.1% Group 1 Automotive Inc. 5,884 7,216 8,607 9,859 10,578 11, % 6.2% % 11.4% KAR Auction Services, Inc. 1,886 1,963 2,173 2,337 2,528 2, % 6.7% % 8.2% Lithia Motors Inc. 2,549 3,204 3,867 5,305 7,518 7, % 22.7% % 20.4% Monro Muffler Brake Inc % 9.3% % 15.8% Penske Automotive Group, Inc. 10,769 12,762 14,330 17,291 19,091 20, % 8.2% % 11.4% Sonic Automotive Inc. 7,312 8,115 8,571 9,305 9,707 10, % 5.4% % 6.9% Total $56,545 $64,806 $72,636 $84,307 $93,415 $99, % 9.0% $3,362 $3,824 $4,195 $4,742 $5,304 $5, % 11.1% PAGE 9

11 PUBLIC COMPARABLES CONT. Automotive Aftermarket Revenue Revenue Growth EBITDA EBITDA Growth E 2015P 2016P '11-14E '14E-16P E 2015P 2016P '11-14E '14E-16P Bayerische Motoren Werke Aktiengesellschaft $66,659 $75,546 $77,372 $96,176 $95,542 $100, % 2.1% $13,439 $13,956 $14,488 $15,620 $15,393 $16, % 2.2% Daimler AG 122, , , , , , % 3.1% 18,444 19,337 16,778 18,623 18,798 20, % 4.9% Ford Motor Co. 128, , , , , , % 4.9% 12,163 11,464 12,370 8,291 10,659 12,267 (12.0%) 21.6% General Motors Company 148, , , , , , % 2.4% 12,648 10,914 12,356 13,146 15,612 16, % 12.8% Harley-Davidson, Inc. 4,662 4,943 5,258 5,596 5,885 6, % 5.1% 1,078 1,198 1,319 1,489 1,577 1, % 7.4% Navistar International Corporation 13,441 12,527 10,617 10,782 11,951 12,680 (7.1%) 8.4% 958 (468) (375) NM NM Oshkosh Corporation 7,539 8,141 7,665 6,741 6,471 6,572 (3.7%) (1.3%) (1.9%) 2.8% PACCAR Inc. 15,326 15,952 15,949 17,808 19,425 20, % 6.2% 1,807 1,927 2,047 2,050 2,577 2, % 17.0% Toyota Motor Corporation 215, , , , , , % (2.5%) 19,838 17,273 26,711 30,695 30,436 35, % 7.0% Volkswagen AG 184, , , , , , % 1.4% 22,826 25,047 27,273 29,416 30,245 33, % 6.5% Total $907,026 $967,163 $1,033,830 $1,072,822 $1,060,688 $1,106, % 3.0% $103,868 $101,158 $113,604 $120,296 $126,577 $140, % 9.1% PAGE 10

12 TRANSPORTATION & LOGISTICS SOURCES 1. Capital IQ. 2. MergerMarket. 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. Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is authorised and regulated by the Financial Conduct Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business. 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 AT THE ABOVE ADDRESSES OR NUMBERS. 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 2015 Harris Williams & Co., all rights reserved. PAGE 11