TRANSPORTATION & LOGISTICS

Transcription

1 Harris Williams & Co. Ltd is a private limited company incorporated under English law having 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, authorised and regulated by the Financial Conduct Authority. 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 ICAHN WINS PEP BOYS BIDDING WAR Billionaire Carl Icahn won the bidding war for Pep Boys, striking a deal to buy the auto parts and repair chain for about $1 billion. The deal with Icahn Enterprises L.P., the activist investor s publicly traded company, comes a day after the other party in the fight, Japanese tire maker Bridgestone Corp., said it wouldn t counter Mr. Icahn s latest bid. On Wednesday, Pep Boys - Manny Moe & Jack said it had pulled the plug on its pending merger deal with Bridgestone and that Mr. Icahn s firm paid Bridgestone a $39.5 million deal-termination fee on Pep Boys behalf. The deal, for $18.50 a share, is expected to close in the first quarter of Wall Street Journal NEW VEHICLE REGISTRATIONS TOP 17 MILLION FOR FIRST TIME SINCE 2006 Experian Automotive announced that new vehicle registration volumes for lightduty vehicles has reached the highest point in the past nine years. During the rolling year from Nov. 1, 2014, through Oct. 31, 2015, there were more than 17 million new vehicles registered within the United States a metric that hasn t been achieved since Further insight from the data showed that, while there is now a near-identical volume of vehicles registered, consumer buying habits have changed over the past nine years. For example, crossover utility vehicles account for nearly 24 percent of the market in 2015, up more than 100 percent from Aftermarket News SHAPE-SHIFTING: TRENDS THAT WILL DRIVE AFTERMARKET GROWTH New vehicle sales are on the rebound, old cars are getting older and CUVS are growing in popularity all trends that likely will impact the automotive aftermarket and auto repairers in the coming years, according to IHS Automotive. It gives us the opportunity to do what we do best in the aftermarket, and that's adapt and innovate and be able to come up with new ways to serve these new-generation vehicles. We've done it before, all we have to do is do it again, said Mark Seng, global aftermarket practice leader for IHS. Tire Business CAR TECHNOLOGY ONCE AGAIN STOLE THE SHOW AT CES 2016 Autonomous driving repeated its front and center position at CES, but trends such as personalization of the driver experience via cloud connectivity and a further expansion into smart mobility by some of the biggest players in the automotive tech space also stood out. This year Mercedes Benz debuted the 2017 E-Class, the first standard-production vehicle to receive an autonomous license from Nevada. Mobileye announced that it struck deals with GM and VW to supply mapping data for the automakers self-driving car efforts. QNX, the BlackBerry division that supplies infotainment software for millions of vehicles, introduced its platform that is designed to provide a 360-degree surround view of the vehicle. Forbes 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) NECESSITY WILL DRIVE AUTO INDUSTRY TIE-UPS After a near-record year for supplier consolidation, insiders and executives expect automotive industry tie-ups to continue in coming years. PricewaterhouseCoopers reports that the global automotive industry last year engaged in nearly 500 deals, including mergers and consolidations, totaling $63 billion. That includes 69 deals involving automakers that represented $6 billion; and the auto components and supplier industry with 190 deals that equaled $33 billion -- $2 billion less than the record set in 2007 for suppliers. The Detroit News PAGE 1

3 M&A TRANSACTIONS RECENT M&A TRANSACTIONS 1,2 Date Target Business Description Acquirer 1/12/2016 Drake Automotive Group Manufactures and markets auto parts for classic and current model Ford Mustangs, and also caters to vehicles such as Broncos, Jeeps, Camaros and others. 1/5/2016* TowerSec Inc. Operates as an automotive cyber security vendor which develops and provides on-board cyber security software to OEMs, suppliers, and aftermarket telematics manufacturers. Huron Capital Partners Harman International Industries, Incorporated 12/21/2015 Big Tex Trailer Manufacturing, Inc. Manufactures professional grade open trailers in North America. Bain Capital Private Equity 12/16/2015 Colwood-Langford Auto Supply and B.H. McFarlane Automotive Wholesaler of automotive parts and paint products. Uni-Select Inc. 12/7/2015* Pep Boys - Manny, Moe & Jack Engages in the automotive aftermarket service and retail business, offering a range of automotive maintenance and repair services. Icahn Enterprises, L.P. 12/8/2015 Aquia Auto Parts, Inc. Distributes paints, coatings, and other finishes to the automotive market. Finishmaster Inc. 11/24/2015 Dynojet Research, Inc. Develops and manufactures fuel management and diagnostic products. Irving Place Capital; New Value Capital 11/19/2015 Colorado Components, Inc. Manufactures wheel alloys, tires, and accessories for all-terrain Wheel Pros, LLC vehicles, utility-terrain vehicles, low speed vehicles, recreational vehicles, side by sides, and golf carts. 11/2/2015 Reading Truck Body, LLC Manufactures truck bodies and accessories. J.B. Poindexter & Co., Inc. 11/2/2015 Compass Automotive Group, LLC Manufactures safety-critical aluminum automotive components for cars, motorcycles, and light trucks. Shipston Group Limited 10/28/2015 Filter Sensing Technologies, Inc. Develops advanced measurement and control technologies. CTS Corporation 10/28/2015 Interstate Tire Distributor, Inc. Markets and distributes tires and wheels in California, Arizona, Utah, and Nevada. Omni United (S) Pte. Ltd. 10/26/2015 AL-KO Vehicle Technology Designs and manufactures trailer axles, trailer and caravan components, chassis, and motorized chassis. Dexter Axle Company, Inc. 10/22/2015 Carstar, Inc. Provides auto repair services in the United States and Canada through its network of auto repair shops. Driven Brands, Inc. 10/21/2015 Who-Rae Pty Ltd Supplies automotive aftermarket accessories for retailers worldwide. Kraco Enterprises LLC 9/29/2015 Know How Systems Global LLC Provides automotive hail damage repair and paintless dent removal services. Dent Wizard International Corporation 9/29/2015 Eastern Manufacturing Inc. Designs, manufactures, and supplies exhaust and emissions products for automotive, light truck, heavy-duty, off-road vehicles, and industrial applications. 9/25/2015* Truck-Lite Co., LLC Manufactures and distributes safety lighting products and accessories to heavy-duty truck, trailer, and commercial vehicle industries. AP Exhaust Products, Inc. BDT Capital Partners, LLC; Koch Equity Development, LLC *Denotes pending transactions PAGE 2

4 PUBLIC MARKETS OVERVIEW TEV / LTM EBITDA TEV / 2016P EBITDA 12.1x 10.6x Dealerships and Services Providers 11.8x Dealerships and Services Providers 10.2x 9.0x 8.3x 6.0x 5.9x AVERAGE REVENUE GROWTH ( E) AVERAGE REVENUE GROWTH (2015E 2017P) Dealerships and Services Providers 14.4% Dealerships and Services Providers 6.6% 6.0% 5.8% 2.8% 2.7% 0.4% 0.9% AVERAGE EBITDA GROWTH ( E) AVERAGE EBITDA GROWTH (2015E 2017P) Dealerships and Services Providers 14.6% 13.1% 7.0% Dealerships and Services Providers 9.3% 6.2% 8.3% 2.2% 7.4% PAGE 3

5 STOCK PRICE PERFORMANCE MEDIAN % CHANGE (1 MONTH) MEDIAN % CHANGE (12 MONTH) S&P 500 (4.4%) S&P 500 (5.9%) Distributors and Retailers Vehicle Manufacturers (9.6%) (2.8%) Distributors and Retailers (4.3%) 18.3% Dealerships and Service Providers (18.3%) (10.5%) Dealerships and Service Providers Vehicle Manufacturers (17.7%) (17.8%) TRAILING TWELVE MONTHS (Indexed to January 12, 2015) 40% 30% 20% 10% 0% (10%) (20%) Jan Apr Jul Oct Jan 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 acquired 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 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 Two International Place 24th Floor 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) EUROPE Frankfurt Bockenheimer Landstrasse Frankfurt Germany Phone: London 63 Brook Street London W1K 4HS, England Phone: +44 (0) Beijing Hong Kong Mumbai NETWORK OFFICES New Delhi Shanghai PAGE 6

8 PUBLIC COMPARABLES 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 Jan-15 Jul-15 Current 2016P 2017P Automotive Aftermarket BorgWarner Inc. $9,115 $36.89 (7.4%) (31.1%) $ % 9.1x 9.7x 6.8x 5.9x 5.5x Cooper Tire & Rubber Co. 1, (8.9%) 1.5% % 4.6x 3.4x 3.7x 4.1x 4.2x Dorman Products, Inc. 1, (4.9%) (8.0%) % 10.8x 10.8x 9.5x 8.6x 7.9x Federal-Mogul Holdings Corporation 3, (17.4%) (60.5%) % 7.3x 7.8x 6.7x 5.8x 5.5x The Goodyear Tire & Rubber Company 12, (11.1%) 1.2% % 6.1x 5.6x 5.4x 4.8x 4.7x Modine Manufacturing Company (19.4%) (43.5%) % 6.1x 5.9x 4.4x 3.7x 3.2x Motorcar Parts of America, Inc (14.3%) 6.7% % 14.6x 14.4x 18.7x 7.1x 6.3x Standard Motor Products Inc (8.9%) (0.5%) % 6.9x 7.6x 7.1x 7.0x 6.5x Tenneco Inc. 3, (12.5%) (22.1%) % 5.9x 5.9x 4.9x 4.2x 4.0x Visteon Corporation 1, (9.9%) 0.2% % 8.8x 7.7x 2.6x 6.3x 5.7x Median (10.5%) (4.3%) 78.2% 7.1x 7.7x 6.0x 5.9x 5.5x Advance Auto Parts Inc. $11,958 $ (1.2%) (8.3%) $ % 10.7x 10.7x 9.2x 8.5x 7.9x AutoZone, Inc. 26, (4.9%) 18.6% % 11.2x 11.7x 11.6x 11.1x 10.4x Genuine Parts Company 12, (7.2%) (22.0%) % 12.7x 11.2x 9.7x 9.4x 9.1x LKQ Corp. 9, (5.0%) (2.4%) % 12.6x 13.0x 11.4x 10.1x 8.8x O'Reilly Automotive Inc. 24, (4.4%) 26.7% % 13.7x 15.4x 14.6x 13.0x 12.0x Pep Boys - Manny, Moe & Jack 1, % 94.8% % 9.9x 12.1x 15.5x 14.5x 11.9x U.S. Auto Parts Network, Inc % 18.1% % 17.3x NM 19.5x 9.3x NA Uni-Select Inc. 1, % 81.2% % 10.2x 13.8x 12.6x 11.1x 10.6x Median (2.8%) 18.3% 84.2% 11.9x 12.1x 12.1x 10.6x 10.4x Dealerships and Service Providers Asbury Automotive Group, Inc. $3,018 $55.71 (20.8%) (25.2%) $ % 11.4x 12.4x 9.2x 8.6x 8.0x AutoNation, Inc. 10, (20.8%) (17.7%) % 12.4x 12.3x 10.6x 9.5x 8.8x Boyd Group Income Fund (14.3%) 4.9% % 12.7x 11.7x 12.2x 10.3x 9.1x CarMax Inc. 19, (18.2%) (27.8%) % NM NM 16.8x 16.6x 15.4x Copart, Inc. 4, (8.2%) (2.7%) % 12.3x 11.5x 11.2x 10.2x 9.3x Group 1 Automotive Inc. 4, (22.0%) (27.2%) % 11.1x 11.2x 10.0x 9.5x 8.7x KAR Auction Services, Inc. 7, (8.9%) (0.5%) % 12.8x 12.5x 12.0x 10.6x 9.8x Lithia Motors Inc. 4, (24.8%) 1.5% % 12.2x 14.5x 11.8x 10.0x 9.0x Monro Muffler Brake Inc. 2, (9.0%) 11.1% % 14.7x 14.9x 14.8x 14.1x 12.3x Penske Automotive Group, Inc. 7, (19.4%) (27.9%) % 14.0x 13.9x 11.8x 10.9x 10.0x Sonic Automotive Inc. 3, (18.3%) (27.0%) % 10.7x 11.0x 10.2x 9.8x 9.2x Median (18.3%) (17.7%) 71.6% 12.3x 12.4x 11.8x 10.2x 9.2x PAGE 7

9 PUBLIC COMPARABLES 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 Jan-15 Jul-15 Current 2016P 2017P Automotive Aftermarket Bayerische Motoren Werke Aktiengesellschaft $148,992 $90.73 (12.0%) (13.4%) $ % 9.9x 11.4x 10.3x 9.2x 8.9x Daimler AG 175, (9.5%) (9.6%) % 11.1x 11.6x 9.9x 7.9x 7.6x Ford Motor Co. 155, (6.4%) (16.0%) % 13.9x 13.7x 11.7x 12.1x 11.2x General Motors Company 83, (12.4%) (15.0%) % 8.4x 5.9x 6.2x 5.1x 4.9x Harley-Davidson, Inc. 14, (6.0%) (33.8%) % 12.8x 12.1x 10.3x 9.8x 9.7x Navistar International Corporation 4, (15.3%) (76.2%) % NM 16.7x 11.5x 8.0x 7.2x Oshkosh Corporation 3, (11.2%) (19.6%) % 6.7x 7.3x 6.6x 6.6x 6.1x PACCAR Inc. 21, (4.3%) (30.7%) % 11.7x 10.1x 7.4x 9.4x 9.5x Toyota Motor Corporation 303, (7.9%) (8.9%) % 9.8x 9.5x 8.0x 8.7x 8.2x Volkswagen AG 156, (9.7%) (40.4%) % 7.8x 7.9x 8.0x 5.6x 5.0x Median (9.6%) (17.8%) 66.7% 9.9x 10.7x 9.0x 8.3x 7.9x PAGE 8

10 PUBLIC COMPARABLES Revenue Revenue Growth EBITDA EBITDA Growth ($ in millions) E 2016P 2017P '12-15E '15E-17P E 2016P 2017P '12-15E '15E-17P Automotive Aftermarket BorgWarner Inc. $7,183 $7,437 $8,305 $7,835 $9,308 $9, % 12.8% $1,126 $1,224 $1,398 $1,339 $1,513 $1, % 10.8% Cooper Tire & Rubber Co. 4,201 3,439 3,425 2,964 3,018 3,106 (11.0%) 2.4% (10.7%) (0.4%) Dorman Products, Inc % 7.1% % 6.7% Federal-Mogul Holdings Corporation 6,444 6,786 7,317 7,390 7,584 7, % 2.7% % 8.3% The Goodyear Tire & Rubber Company 20,992 19,540 18,138 16,429 16,593 16,876 (7.8%) 1.4% 1,819 2,105 2,251 2,526 2,704 2, % 4.9% Modine Manufacturing Company 1,577 1,376 1,478 1,496 1,393 1,449 (1.7%) (1.6%) (5.3%) 10.6% Motorcar Parts of America, Inc % 19.6% % 61.6% Standard Motor Products Inc ,031 1, % 3.2% % 10.7% Tenneco Inc. 7,363 7,964 8,420 8,195 8,601 9, % 5.1% % 6.9% Visteon Corporation 5,715 6,371 7,509 3,087 3,232 3,396 (18.6%) 4.9% (17.0%) 10.6% Total $55,173 $54,774 $56,582 $49,479 $51,986 $54, % 5.8% $5,503 $6,023 $6,590 $6,392 $6,987 $7, % 13.1% Advance Auto Parts Inc. $6,205 $6,494 $9,844 $9,765 $9,912 $10, % 2.3% $847 $901 $1,243 $1,262 $1,400 $1, % 9.0% AutoZone, Inc. 8,604 9,148 9,475 10,187 10,738 11, % 5.6% 1,841 2,000 2,081 2,223 2,382 2, % 7.0% Genuine Parts Company 13,014 14,078 15,342 15,373 15,752 16, % 2.9% 1,114 1,209 1,273 1,270 1,310 1, % 4.1% LKQ Corp. 4,123 5,063 6,740 7,249 7,864 8, % 8.2% , % 13.8% O'Reilly Automotive Inc. 6,182 6,649 7,216 7,926 8,499 9, % 6.8% 1,159 1,291 1,468 1,717 1,882 2, % 9.2% Pep Boys - Manny, Moe & Jack 2,064 2,091 2,067 2,085 2,075 2, % 0.7% (19.2%) 12.6% U.S. Auto Parts Network, Inc NA (1.1%) NA NA 1.9% NA Uni-Select Inc. 1,798 1,788 1,784 1,364 1,137 1,169 (8.8%) (7.4%) % 2.5% Total $42,293 $45,565 $52,751 $54,242 $56,281 $58, % 2.7% $5,687 $6,230 $7,062 $7,507 $8,130 $8, % 8.3% Dealerships and Service Providers Asbury Automotive Group, Inc. $4,475 $5,128 $5,639 $6,596 $7,009 $7, % 5.8% $210 $259 $297 $333 $350 $ % 6.9% AutoNation, Inc. 15,020 16,674 18,180 21,002 23,108 24, % 7.9% ,027 1,121 1, % 8.9% Boyd Group Income Fund , % 10.3% % 12.5% CarMax Inc. 10,004 10,963 12,574 14,269 15,147 16, % 7.2% ,091 1,188 1, % 8.4% Copart, Inc ,046 1,163 1,146 1,186 1, % 4.2% % 8.7% Group 1 Automotive Inc. 7,216 8,607 9,571 10,657 11,223 11, % 5.2% % 11.6% KAR Auction Services, Inc. 1,963 2,173 2,365 2,608 2,782 3, % 8.3% % 8.5% Lithia Motors Inc. 3,204 3,867 5,200 7,866 8,489 9, % 7.4% % 10.0% Monro Muffler Brake Inc , % 8.2% % 13.8% Penske Automotive Group, Inc. 12,584 14,074 16,741 19,123 20,348 21, % 4.8% % 8.0% Sonic Automotive Inc. 8,115 8,571 8,897 9,624 10,035 10, % 3.2% % 4.6% Total $64,628 $72,380 $81,891 $94,620 $101,200 $106, % 6.6% $3,824 $4,224 $4,792 $5,404 $5,880 $6, % 9.3% PAGE 9

11 PUBLIC COMPARABLES Revenue Revenue Growth EBITDA EBITDA Growth ($ in millions) E 2016P 2017P '12-15E '15E-17P E 2016P 2017P '12-15E '15E-17P Automotive Aftermarket Bayerische Motoren Werke Aktiengesellschaft $66,659 $75,546 $77,374 $96,471 $99,398 $102, % 3.0% $13,956 $14,458 $14,636 $15,368 $16,046 $16, % 3.9% Daimler AG 122, , , , , , % 10.0% 14,309 14,947 15,784 20,429 21,299 22, % 4.8% Ford Motor Co. 128, , , , , , % 3.5% 11,464 12,370 11,211 10,916 12,855 13,560 (1.6%) 11.5% General Motors Company 148, , , , , , % (0.8%) 10,914 12,356 9,084 14,848 15,643 17, % 7.9% Harley-Davidson, Inc. 4,662 4,943 5,258 5,568 5,330 5, % (0.8%) 1,198 1,317 1,460 1,356 1,427 1, % 2.6% Navistar International Corporation 13,441 12,527 10,617 10,653 10,213 9,512 (7.5%) (5.5%) (468) (423) NM 27.2% Oshkosh Corporation 7,539 8,141 7,665 6,808 6,076 6,322 (3.3%) (3.6%) % 3.8% PACCAR Inc. 15,326 15,952 15,949 17,793 18,136 17, % (1.6%) 1,927 2,047 2,446 2,479 2,124 2, % (2.7%) Toyota Motor Corporation 215, , , , , , % 1.0% 17,273 26,711 34,414 34,667 34,062 36, % 2.6% Volkswagen AG 184, , , , , , % 3.6% 25,594 26,303 24,820 24,093 28,154 30,420 (2.0%) 12.4% Total $907,026 $967,163 $1,013,833 $1,013,070 $1,040,414 $1,073, % 0.9% $96,678 $110,722 $114,630 $125,098 $132,748 $141, % 7.4% PAGE 10

12 TRANSPORTATION & LOGISTICS SOURCES 1. Capital IQ. 2. MergerMarket. DISCLOSURES Harris Williams & Co. ( and 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 incorporated under English law having 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, authorised and regulated by the Financial Conduct Authority. 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. 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 2016 Harris Williams & Co., all rights reserved. PAGE 11