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 U.S. AUTOMOTIVE AFTERMARKET WILL GROW 3.7% THROUGH 2019 The U.S. automotive aftermarket is expected to grow at a compound annual growth rate of 3.7% through 2019, according to the 2016 Joint Channel Forecast Model produced jointly by the Automotive Aftermarket Association and the Auto Care Association. The 2016 Joint Channel Forecast Model also predicts that the total aftermarket sales will grow from $257.4 billion in 2015 to $296.3 billion in 2019, an increase of nearly $39 billion over the four year period. Modern Tire Dealer E-COMMERCE AND ITS IMPACT ON THE AUTOMOTIVE AFTERMARKET The transformative effects of e-commerce and the opportunities it presents across various industries and markets have been well documented. For most companies, developing an e-commerce strategy is no longer merely a consideration or an experiment, but integral to their business. Compared to many other industries, however, the automotive aftermarket s e-commerce activity is less prominent. This is largely due to the complex nature of the industry s products, supply chains, and channel relationships. Innovative players who can overcome these challenges have the potential to capitalize on a growing but underdeveloped service that could disrupt the way this industry conducts business. China Briefing RISE IN CAR MAINTENANCE INVESTMENTS IN UK AFTERMARKET Frost & Sullivan s new analysis, The Importance of the UK Aftermarket to the UK Economy, highlights how technology is changing the automotive parts and service industry. Although the research focuses on the UK, the findings have implications for other markets. Vehicle spend will rise as the more electrical components and fewer mechanical parts are replaced. While costs for parts are increasing, the price of service is declining. About 64% of consumer spend went to independent parts sellers and workshops, where prices are much lower. Auto parts dealerships and authorized repairers captured the remaining 36% of industry revenue, but this share is in decline as vehicles age (currently at an average of 7.8 years in the UK) and consumers migrate to lower-priced parts and independent service providers. Forbes WOMEN VEHICLE OWNERS DETERMINING AFTERMARKET STRATEGY Demographic shifts in the North American vehicle market are necessitating change in how the automotive industry operates, especially in the downstream activities of vehicle repair and maintenance, a recent study by research firm Frost & Sullivan found. The automotive industry has traditionally been a maledominated sector and, historically, this did not pose a challenge for the industry in appealing to its customers, who were also predominantly male, the firm said in its study. By empowering female customers with knowledge about the products they are buying and having installed in their cars, suppliers and retailers can more readily ensure long-term brand loyalty and presence. Tire Business 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) LUKEWARM SUPPLIER TIES HAMPER AUTO MAKERS Top U.S. and Japanese auto makers are losing out on hundreds of millions of dollars in potential cost savings because of lackluster relationships with their parts suppliers, a new report claims. Four out of the six auto makers operating manufacturing plants in North America experienced erosion in their supplier rapport over the past year, according to an annual survey of the parts makers. Nissan Motor Co., which is fighting to lift its market share, posted the biggest drop as it intensified the pressure on its parts makers to reduce their prices. Wall Street Journal PAGE 1

3 M&A TRANSACTIONS RECENT M&A TRANSACTIONS 1,2 Date Target Business Description Acquirer 6/2/2016* FTE Automotive GmbH Manufactures brake and clutch actuation systems. Valeo SA 6/2/2016* OEConnection LLC Provides original equipment replacement parts solutions. Providence Equity Partners, Inc. 5/23/2016* Bridgestone Firestone Venezolana CA Offers tires and rubber products in Venezuela. Corimon CA 5/17/2016 4Knines Manufactures and supplies dog seat covers for cars. Hall Capital Partners 5/16/2016* Rear View Safety, Inc. Provides back up camera systems and video-based road safety solutions for passenger vehicles. Safe Fleet Acquisition Corp. 5/11/2016* Grand Rapids Auto Auction, Inc. Provides dealer-to-dealer auto auction services within the used car remarketing industry. XLerate Group / Huron Capital Partners 5/9/2016* Johann Hay GmbH und Co. KG Automobiltechnik Manufactures and supplies machined and forged components for automotive, commercial vehicles, and bearing industries in Germany and internationally. 4/19/2016 Laydon Composites Ltd. Designs and manufactures aerodynamic devices for heavy-duty trucks and trailers in North America and internationally. Musashi Seimitsu Industry Co., Ltd. WABCO Holdings Inc. 4/18/2016 Sperry & Rice Manufacturing Company, LLC Manufactures and markets rubber and sponge extrusions for appliance, automotive, construction, and truck and bus industries. Salt Creek Capital II, LLC 4/15/2016 Zitco, Inc. Distributes automotive paints and coatings. Finishmaster Inc. 4/11/2016* Kovatch Mobile Equipment Corporation Designs, manufactures, and distributes customized specialty trucks, chassis, and vehicles. REV Group, Inc. 4/1/2016 DYK Automotive, LLC & AAHC, Inc. Distributes products to the automotive aftermarket throughout the United States. The Sterling Group 3/30/2016 Take 5 Oil Change LLC Provides oil change services for vehicles in the United States. Driven Brands, Inc. 3/24/2016* ASIMCO NVH Technologies Co., Ltd. Manufactures automotive components such as bushings, body mounts, and engine mounts. Zhengzhou Coal Mining Machinery Group Co., Ltd. 3/11/2016* Cruise Automation, Inc. Develops and manufactures autonomous vehicle technologies. General Motors Company 3/1/2016 Jiffy-tite Company Inc. Manufactures fluid hose couplers for the automotive industry. Oetiker Limited 2/29/2016 Pittsburgh Glass Works LLC Manufactures and distributes automotive glass in the United States and internationally. LKQ Corp. 2/17/2016 Texas Hydraulics, Inc. Operates as a custom manufacturer of fluid power components for original equipment manufacturers. Wynnchurch Capital, LLC *Denotes pending transactions PAGE 2

4 PUBLIC MARKETS OVERVIEW TEV / LTM EBITDA TEV / 2016P EBITDA 12.1x 11.8x Dealerships and Services Providers 11.4x Dealerships and Services Providers 11.5x 7.9x 9.0x 7.0x 6.1x AVERAGE REVENUE GROWTH ( ) AVERAGE REVENUE GROWTH ( P) Dealerships and Services Providers 13.9% Dealerships and Services Providers 6.7% 6.6% 5.3% (0.7%) 4.3% (1.8%) (0.4%) AVERAGE EBITDA GROWTH ( ) AVERAGE EBITDA GROWTH ( P) Dealerships and Services Providers 16.1% 16.8% 7.0% Dealerships and Services Providers 9.2% 5.9% 7.0% 4.8% (0.3%) PAGE 3

5 STOCK PRICE PERFORMANCE MEDIAN % CHANGE (1 MONTH) MEDIAN % CHANGE (12 MONTH) S&P % Distributors and Retailers 10.1% Distributors and Retailers 0.6% S&P 500 (0.7%) Dealerships and Service Providers (0.9%) (14.0%) Vehicle Manufacturers (3.2%) (1.7%) Vehicle Manufacturers Dealerships and Service Providers (31.9%) (22.3%) TRAILING TWELVE MONTHS (Indexed to June 10, 2015) 40% 30% 20% 10% 0% (10%) (20%) (30%) (40%) Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Dealerships and Service Providers S&P 500 Index PAGE 4

6 INDUSTRY UPDATE JUNE 2016 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 merged with an operating company of has acquired in a recapitalization by and 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 Jun-15 Dec-15 Current 2016P 2017P Automotive Aftermarket BorgWarner Inc. $9,418 $32.75 (0.7%) (45.9%) $ % 10.7x 7.4x 6.9x 6.4x 6.0x Cooper Tire & Rubber Company 1, (4.4%) (18.3%) % 5.1x 5.0x 2.8x 3.2x 3.5x Dorman Products, Inc. 1, (0.5%) 6.7% % 11.4x 9.7x 10.5x 9.9x 9.2x Federal-Mogul Holdings Corp 4, (9.1%) (35.6%) % 8.6x 7.8x 7.1x 5.8x 5.4x Goodyear Tire & Rubber Company 12, (2.3%) (14.2%) % 6.1x 6.4x 5.9x 4.8x 4.7x Modine Manufacturing Company (6.5%) (13.8%) % 5.6x 8.4x 2.5x 4.7x 4.1x Motorcar Parts of America, Inc (9.0%) (7.0%) % 14.4x 19.6x 12.0x 6.3x 5.6x Standard Motor Products, Inc % 0.6% % 8.5x 9.0x 9.1x 8.0x 7.2x Tenneco Inc. 4, % (10.6%) % 6.3x 5.4x 5.3x 5.0x 4.7x Visteon Corporation 2, (1.0%) (33.4%) % 8.8x 6.7x 14.8x 7.7x 6.9x Median (1.7%) (14.0%) 73.5% 8.6x 7.6x 7.0x 6.1x 5.5x Advance Auto Parts, Inc. $12,392 $ % (5.4%) $ % 10.7x 9.7x 10.7x 10.0x 9.3x AutoZone, Inc. 27, (2.4%) 10.1% % 9.7x 12.5x 12.1x 11.8x 11.1x Genuine Parts Company 14, (1.0%) 4.7% % 11.5x 10.5x 11.8x 11.4x 10.4x LKQ Corporation 12, (0.5%) 9.3% % 13.1x 12.0x 14.5x 11.8x 10.3x O'Reilly Automotive, Inc. 26, % 15.3% % 15.8x 15.6x 14.8x 13.9x 12.7x U.S. Auto Parts Network, Inc % 77.0% % NA NA NM 13.3x 11.3x Uni-Select Inc. 1, % 43.4% % 10.6x 9.8x 12.1x 11.5x 10.3x Median 0.6% 10.1% 93.5% 11.1x 11.2x 12.1x 11.8x 10.4x Dealerships and Service Providers Asbury Automotive Group, Inc. $3,076 $54.10 (0.9%) (38.3%) $ % 11.9x 10.0x 9.5x 9.3x 9.0x AutoNation, Inc. 11, % (25.0%) % 13.0x 12.2x 11.8x 11.5x 10.6x Boyd Group Income Fund 1, % 31.1% % 9.1x 10.0x 15.2x 12.0x 10.4x CarMax, Inc. 20, (3.0%) (32.6%) % NM NM NM 16.4x 15.5x Copart, Inc. 6, % 36.7% % 12.2x 12.5x 14.4x 13.8x 12.9x Group 1 Automotive, Inc. 4, (6.1%) (36.9%) % 11.8x 10.7x 9.9x 9.6x 10.1x KAR Auction Services, Inc. 7, % 5.5% % 11.8x 11.2x 11.0x 9.8x 8.9x Lithia Motors, Inc. Class A 3, (4.6%) (33.3%) % 16.4x 13.6x 10.1x 9.6x 9.0x Monro Muffler Brake, Inc. 2, (13.7%) (3.7%) % 15.9x 16.6x 14.2x 13.3x 11.8x Penske Automotive Group, Inc. 7, (0.6%) (31.9%) % 14.9x 13.1x 12.2x 11.6x 10.8x Sonic Automotive, Inc. Class A 3, (1.4%) (32.2%) % 11.1x 10.8x 10.1x 10.0x 9.5x Median (0.9%) (31.9%) 67.1% 12.1x 11.7x 11.4x 11.5x 10.4x 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 Jun-15 Dec-15 Current 2016P 2017P Automotive Aftermarket Bayerische Motoren Werke AG $146,391 $78.36 (6.0%) (30.4%) $ % 7.7x 7.9x 7.5x 8.9x 8.6x Daimler AG 164, (4.2%) (32.8%) % 7.0x 5.8x 7.1x 8.0x 7.2x Ford Motor Company 153, (1.8%) (14.8%) % 13.2x 10.8x 8.6x 11.5x 11.2x General Motors Company 94, (4.7%) (18.6%) % 7.7x 6.2x 5.7x 5.7x 5.6x Harley-Davidson, Inc. 14, (3.7%) (19.6%) % 11.2x 11.1x 10.8x 10.8x 10.3x Navistar International Corporation 5, % (47.8%) % 12.5x 8.7x 9.6x 9.7x 8.8x Oshkosh Corp 4, (0.1%) (13.0%) % 8.5x 7.6x 9.2x 9.5x 7.8x PACCAR Inc 24, (2.6%) (16.1%) % 9.5x 6.7x 7.5x 9.0x 9.4x Toyota Motor Corp. 286, % (25.0%) % 8.8x 8.8x 7.7x 8.7x 8.3x Volkswagen AG Pref 202, (5.7%) (42.8%) % 6.9x 6.3x 8.1x 6.7x 6.1x Median (3.2%) (22.3%) 73.4% 8.7x 7.7x 7.9x 9.0x 8.5x PAGE 8

10 PUBLIC COMPARABLES Revenue Revenue Growth EBITDA EBITDA Growth ($ in millions) P 2017P '12-15 '15-17P P 2017P '12-15 '15-17P Automotive Aftermarket BorgWarner Inc. $7,178 $7,435 $8,304 $8,025 $8,025 $9, % 9.3% $1,106 $1,224 $1,385 $1,330 $1,330 $1, % 8.1% Cooper Tire & Rubber Company 4,201 3,439 3,421 2,959 2,959 3,032 (11.0%) 1.2% % (6.8%) Dorman Products, Inc % 8.5% % 8.8% Federal-Mogul Holdings Corp 6,664 6,786 7,317 7,419 7,419 7, % 2.7% % 18.1% Goodyear Tire & Rubber Company 20,992 19,540 18,138 16,443 16,443 16,024 (7.8%) (1.3%) 1,824 2,107 2,251 2,085 2,085 2, % 13.0% Modine Manufacturing Company 1,376 1,478 1,496 1,463 1,463 1, % (2.6%) % (22.2%) Motorcar Parts of America, Inc (3.2%) 13.6% NM 10.2% Standard Motor Products, Inc , % 4.1% % 15.7% Tenneco Inc. 7,363 7,964 8,420 8,209 8,209 9, % 5.4% % 7.6% Visteon Corporation 6,857 7,439 7,509 3,245 3,245 3,405 (22.1%) 2.4% (18.7%) 17.9% Total $56,556 $55,988 $56,639 $49,906 $49,906 $52,845 (1.8%) 4.3% $5,348 $6,002 $6,475 $6,134 $6,140 $7, % 7.0% Advance Auto Parts, Inc. $6,205 $6,494 $9,844 $9,737 $9,737 $9, % (1.0%) $847 $901 $1,244 $1,147 $1,147 $1, % 7.5% AutoZone, Inc. 8,604 9,148 9,475 10,187 10,187 11, % 4.8% 1,841 2,002 2,081 2,223 2,223 2, % 6.6% Genuine Parts Company 13,014 14,078 15,342 15,280 15,280 16, % 2.3% 1,122 1,117 1,273 1,266 1,266 1, % 5.2% LKQ Corporation 4,123 5,063 6,740 7,193 7,193 10, % 19.6% , % 19.5% O'Reilly Automotive, Inc. 6,182 6,649 7,216 7,967 7,967 9, % 7.5% 1,154 1,287 1,465 1,743 1,743 2, % 10.0% U.S. Auto Parts Network, Inc (1.4%) 4.8% (8.5%) 57.2% Uni-Select Inc. 1,821 1,788 1,784 1,355 1,355 1,330 (9.4%) (0.9%) % 11.9% Total $40,253 $43,474 $50,685 $52,010 $52,010 $57, % 5.3% $5,554 $6,029 $6,964 $7,331 $7,331 $8, % 16.8% Dealerships and Service Providers Asbury Automotive Group, Inc. $4,640 $5,335 $5,868 $6,588 $6,588 $6, % 2.1% $209 $270 $313 $331 $331 $ % 1.9% AutoNation, Inc. 15,669 17,518 19,109 20,862 20,862 22, % 4.6% , % 5.2% Boyd Group Income Fund , % 13.7% % 17.7% CarMax, Inc. 10,963 12,574 14,269 15,150 15,150 17, % 7.1% , % 27.5% Copart, Inc ,046 1,163 1,146 1,146 1, % 8.0% % 11.6% Group 1 Automotive, Inc. 7,476 8,919 9,938 10,633 10,633 11, % 4.7% % (0.2%) KAR Auction Services, Inc. 1,963 2,173 2,365 2,640 2,640 3, % 10.9% % 13.3% Lithia Motors, Inc. Class A 3,316 4,006 5,390 7,864 7,864 8, % 6.9% % 7.0% Monro Muffler Brake, Inc , % 7.9% % 9.3% Penske Automotive Group, Inc. 13,164 14,705 17,177 19,285 19,285 21, % 4.9% % 6.5% Sonic Automotive, Inc. Class A 8,365 8,843 9,197 9,624 9,624 10, % 3.1% % 1.4% Total $67,648 $76,512 $86,134 $95,653 $95,653 $106, % 6.7% $3,553 $4,019 $4,617 $5,142 $5,142 $6, % 9.2% PAGE 9

11 PUBLIC COMPARABLES Revenue Revenue Growth EBITDA EBITDA Growth ($ in millions) P 2017P '12-15 '15-17P P 2017P '12-15 '15-17P Automotive Aftermarket Bayerische Motoren Werke AG $98,709 $100,976 $106,648 $102,215 $102,215 $109, % 3.3% $20,286 $19,443 $21,734 $19,303 $19,303 $16,734 (1.6%) (6.9%) Daimler AG 146, , , , , , % 3.3% 19,691 21,079 24,558 25,604 25,604 22, % (6.2%) Ford Motor Company 134, , , , , , % (0.6%) 12,958 13,183 11,324 15,557 15,557 13, % (6.6%) General Motors Company 152, , , , , , % (1.3%) 10,670 12,708 8,853 15,518 15,518 16, % 4.3% Harley-Davidson, Inc. 5,581 5,900 6,229 5,995 5,995 5, % (4.1%) 1,183 1,324 1,452 1,330 1,330 1, % 2.7% Navistar International Corporation 12,948 10,775 10,806 10,140 10,140 8,359 (7.8%) (9.2%) (374) (192) NM 3.8% Oshkosh Corp 8,181 7,665 6,808 6,098 6,098 6,432 (9.3%) 2.7% % 3.1% PACCAR Inc 17,051 17,124 18,997 19,115 19,115 16, % (5.7%) 2,458 2,648 2,899 3,198 3,198 2, % (8.1%) Toyota Motor Corp. 266, , , , , ,357 (3.9%) 6.1% 30,332 35,160 38,164 37,306 37,306 34, % (4.1%) Volkswagen AG Pref 247, , , , , ,319 (1.5%) 1.4% 29,739 30,822 33,686 24,722 24,722 32,757 (6.0%) 15.1% Total $1,089,420 $1,119,448 $1,138,291 $1,084,275 $1,084,275 $1,129,121 (0.7%) (0.4%) $127,443 $136,819 $143,587 $143,628 $143,628 $142, % (0.3%) PAGE 10

12 TRANSPORTATION & LOGISTICS SOURCES 1. FactSet. 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