Transportation & Logistics Industry Update February 2013

Transcription

1 Member FINRA/SIPC

2 Greetings from the HW&Co. Transportation & Logistics Team Welcome to the Harris Williams & Co. Transportation & Logistics (T&L) newsletter. We use this forum to keep you (investors, senior managers, entrepreneurs, and others focused on the T&L sector) up to speed on what we are seeing in our sector, apprised of industry news and events, and connected to the T&L companies that we are fortunate to work with everyday. We continue to bring you transcripts of relevant discussions we have with senior industry professionals, like this month s discussion with Pete Westermann, President and CEO of Kane is Able. We also want to keep you apprised of the transactions we are executing in our various sub-sectors, including non-asset and asset-based logistics, air, rail, marine products and services, and infrastructure. We hope you enjoy reviewing this, and please continue to and call us with your thoughts and opinions. We want to ensure that this newsletter is informative and helpful as you focus on the transportation and logistics space. Regards, Contacts Frank F. Mountcastle, III Managing Director fmountcastle@harriswilliams.com +1 (804) Jason D. Bass Managing Director jbass@harriswilliams.com +1 (804) Joseph H. Conner, III Director jconner@harriswilliams.com +1 (804) Richmond P: +1 (804) F: +1 (804) Boston P: +1 (617) F: +1 (617) Cleveland P: +1 (216) F: +1 (216) London P: F: Minneapolis P: +1 (612) F: +1 (612) Philadelphia P: +1 (267) F: +1 (267) San Francisco P: +1 (415) F: +1 (415) of 9

3 Trade Lanes with Pete Westermann, President and CEO of Kane is Able Kane Is Able, Inc. is a third party logistics provider that helps consumer packaged goods (CPG) companies warehouse and distribute goods throughout the U.S. It offers transportation (TL and LTL), distribution, packaging, cross-docking, load consolidation, and inventory management. Kane Is Able was founded in 1930 and is headquartered in Scranton, PA. Bio: Mr. Peter Westermann has been President and CEO of Kane Is Able, Inc. since May Mr. Westermann joined Kane from third-party logistics (3PL) provider Total Logistic Control, (TLC), where he served as President from 2008 to 2011 and COO from 2006 to He served as Senior Vice President of Business Development and Client Solutions of UPS for two years, where he was involved in many of the 20-plus acquisitions UPS made during that period. Mr. Westermann has also held senior leadership roles with 3PL providers during most of his career, serving as President and Chief Executive Officer at Universal Solutions, Senior Vice President of Sales and Solutions with UPS Supply Chain Solutions, and President and Chief Executive Officer of Livingston Healthcare. Mr. Westermann holds a bachelor's degree from the University of Wisconsin-Milwaukee. _ HW&Co.: Kane is an industry-leading contract logistics ( CL ) player with deep roots in the consumer package goods segment. How important has scale been in winning clients in your vertical? Are you finding scale to be increasingly important across verticals clients desire for a single CL provider who can partner across numerous regions/geographies? Pete Westermann (PW): Over the past few years, the clients have increased their focus on diminishing their provider roster in favor of providers who have a broader national footprint of solutions. There continues to be a delicate balance between value created and scale. Our main focus is adding value through inventive solutions. Scale is becoming more a price of admission in order to have a chance to demonstrate a stronger value proposition. HW&Co.: Coming out of the recession in 2010 and 2011, we saw shippers hold fewer inventories and spend more on shipping as they shifted from ocean and ground to air. CL businesses often bore the brunt of much of the reduced inventory levels. In 2012, we saw a reversal of much of that shift, with airfreight volumes declining substantially. How has modal shift (and re-shift) affected your business? PW: We continue to see significant focus on LTL to TL conversion opportunities through multi stop TL and vendor consolidations. Additional volumes to the northeast are moving intermodal from the Midwest as the asset infrastructure becomes more stable. CPG product coming through the port systems continues at about the same rates as we saw in Few network re-designs took place in 2012, and thus customer focus was on buying lane based transportation with keen price awareness. HW&Co.: Though many leading public CL businesses revealed softness in the back half of 2012, most expect a strong rebound in How was the back half of 2012 for Kane? What is your outlook for 2013? 2 of 9

4 Trade Lanes (continued) PW: We experienced solid demand for services in the Northeastern U.S. despite the impact of Hurricane Sandy is setting up well with base customer volumes at or above 2012 levels. Many new projects are being considered as CPG customers deal with new SKU demands and the continuing increase in display packaging. HW&Co.: The rise of ecommerce and fulfillment continues to create significant opportunities for 3PLs, specifically CL businesses that have helped manufacturers and shippers manage inventory and initiate distribution closer to their end markets. What changes are you seeing in the marketplace as a result of ecommerce, and how are you preparing your business to maintain its competitive advantage? PW: The client community in CPG is experimenting with multiple models in order to offer businessto-consumer ( B2C ) solutions. We continue to see the space as very fragmented. There are multiple technology solutions out there, and we have yet to see conformance to any best-of-breed platform. Clearly the cost equation to support B2C remains extreme and for that reason basically erodes most margins. We do believe these normal variables of an immature market will be attractive to inventive providers in the next few years. We are investing both internal development time and monitoring the acquisition market to consider strategic options to offer our clients better solutions over time. HW&Co.: There are a number of strong, privately held CL businesses in the U.S. Do you feel that there is an opportunity for some consolidation within the industry? What would drive a CL business to expand through acquisition - interest in a new geography or vertical, specific client relationships, economies of scale, etc.? PW: We definitely see additional consolidation within our space. Whether for geographic scale leverage, industry vertical expansion and/or service line extension there remain multiple businesses which are at some type of inflection point which can and will be brought together to gain a greater market position over time. HW&Co.: CL businesses have been valued very differently at specific points over the recent past, anywhere from low to mid single digit EBITDA multiples to approaching double-digit multiples. From your advantaged perspective, outside of growth and margins, what makes one CL business relatively more or less valuable than another? PW: We see value differently for the type of opportunity it provides our long term strategy. Businesses which are highly transactional and lack customer stickiness tend to be valued less than those which are higher value plays and have stronger commercial customer contracts. There continues to be a willingness to consider a higher multiple for technology-based businesses which offer a toolset that will help accelerate our information interface with clients. 3 of 9

5 What We re Reading UPS-TNT deal falls apart at the hand of European regulators The Wall Street Journal reports that UPS has abandoned a $7 billion takeover bid of Dutch parcel delivery company TNT Express after encountering significant opposition by EU antitrust regulators. Regulators cited post-merger concentration issues that would have caused a duopoly between the combined UPS entity and DHL. ecommerce hits $1 trillion in sales in 2012 emarketer reports that business-to-consumer ( B2C ) ecommerce sales increased 21% and is expected to grow another 18% to $1.3 trillion. As ecommerce sales continue to grow, providers are continuing to look for ways to integrate B2C distribution. This will result in increased M&A activity, report analysts at Transportation Intelligence. Reports show congestion costing the trucking industry billions Heavy Duty Trucking reports that the financial cost of congestion continues to increase, with the latest data from 2011 showing that traffic congestion cost the trucking industry $27 billion in wasted time and diesel fuel costs. Rail and Rail Services enter 2013 poised for growth Railway Age reports that rail traffic in North America remains robust despite the significant drop in coal, once the industry s primary source of revenue. Intermodal, oil/non-coal energy, and auto volumes rose significantly in 2012, and executives and investors alike expect similarly strong performance in Transportation & Logistics Q1 M&A Date Announced Acquirer Target Sector Target Description Pending Legacy Supply Chain Vitran Corporation, Supply Logistics Provides supply chain management solutions. Chain Operation Division 2/12/2013 XPO Logistics East Coast Charter Logistics Provides air charter brokerage services. 1/29/2013 Oskie Capital Roadlink Transportation Solutions Trucking Provides intermodal transportation and logistics services. 1/18/2013 Ontario Teachers Pension Plan SeaCube Marine Provides container leasing and management services. 1/17/2013 TransForce Velocity Express Logistics Provides logistics services including small parcel, dedicated, and home delivery. 1/8/2013 Port Logistics Group Pacific Distribution Services Logistics Provides warehousing and distribution services for firms in the U.S. and internationally. 1/7/2013 bpost international Landmark Global Logistics Provides transportation and process management services for firms shipping in the U.S. and Canada. 1/3/2013 Celadon Trucking Services Rock Leasing and Kelly Trucking Provides trucking and logistics services. Logistics 1/3/2013 RLJ Equity Partners R. Thompson Trucking Trucking Provides waste hauling and bulk material handling trucking services. 1/2/2013 Freeman Spogli & Co.; Pohlad Companies MicroStar Keg Management Logistics Provides keg management services to brewery clients and distributors. 12/31/2012 Georgia Oak Partners TeamOne Contract Services Logistics Provides logistics outsourcing solutions to organizations and small companies in the United 12/27/2012 Watco Railroad Company Ann Arbor Railroad Rail and Rail Services Owns and operates rail lines in the midwest U.S. and provides rail construction services. 12/20/2012 The Jordan Company American Fast Freight Logistics Provides logistics services including ocean freight consolidating and forwarding. 12/18/2012 Mason Wells A&R Logistics Trucking Provides specialty bulk transportation services. 12/14/2012 Charlesbank Capital Partners United Road Services Trucking Provides vehicle transportation logistics solutions for global vehicle manufacturers and dealers. 12/4/2012 Transplace Torus Freight Systems Trucking Provides LTL, TL, dry van, and temperature controlled trucking services. 11/29/2012 Transportation Insight CPA International Logistics Provides logistics services and supply chain management. 11/27/2012 Kirby Corporation Penn Maritime Marine Provides maritime transportation services. 4 of 9

6 Stock Performance Overview 120.0% 80.0% Trailing Five Year Stock Price Performance 40.0% 0.0% (40.0%) (80.0%) (120.0%) Logistics Providers Marine Rail and Rail Services Transportation Equipment Trucking S&P 500 Index Source: Capital IQ Source: Capital IQ Key Trading Statistics Stock Price % Change TEV / LTM EBITDA as of TEV / EBITDA P/E 1 Month 12 Month Feb-12 Aug-12 Current 2013E 2013E Category Logistics Providers 3.6% 4.6% 9.8x 9.4x 10.8x 7.4x 14.0x Marine (0.1%) (8.3%) 10.1x 9.5x 9.0x 7.5x 13.4x Rail and Rail Services 9.2% 24.6% 10.0x 7.6x 8.6x 7.1x 13.5x Trucking Providers 5.0% (7.7%) 6.4x 5.5x 6.2x 5.2x 12.9x Transportation Equipment 2.6% (31.5%) 10.1x 9.5x 7.4x 5.3x 10.9x Source: Capital IQ 160% Current Valuations Versus Historical Five-Year Average (Current TEV/LTM EBITDA multiple as a % of Five-Year Average) 140% 135% 120% 100% 113% 108% 95% 80% 72% 60% 40% 20% 0% Logistics Providers Marine Rail and Rail Services Trucking Providers Transportation Equipment Source: Capital IQ 5 of 9

7 Trading Statistics Detail Price at 52 Week As a % of 52 Week As a % of Market Cash & Net Enterprise EV/ EV/ Price/ LTM EBITDA Total Debt/ Net Debt/ ($ in millions, except per share data) Ticker 2/13/13 High 52-wk High Low 52-wk Low Cap Debt Equiv. Debt Value (EV) LTM EBITDA 2013E EBITDA 2013E EPS Margin LTM EBITDA LTM EBITDA Logistics Providers Agility Public Warehousing Company KSC KWSE:AGLTY $1.95 $ % $ % $1,931 $296 $482 ($186) $1, x 5.7x 7.1x 4.5% 1.3x 0.0x Air Transport Services Group, Inc. Nasdaq:ATSG % % x 4.1x 7.7x 27.2% 2.1x 2.0x Atlas Air Worldwide Holdings Inc. Nasdaq:AAWW % % 1,233 1, , x 5.6x 8.2x 18.0% 4.4x 3.0x CH Robinson Worldwide Inc. Nasdaq:CHRW % % 9, , x 10.1x 16.8x 6.4% 0.4x 0.1x Deutsche Post AG XTRA:DPW % % 27,636 4,715 3,195 1,519 29, x 3.7x 12.5x 5.6% 1.2x 0.4x DSV A/S CPSE:DSV % % 4,570 1, ,116 5, x 8.0x 14.0x 6.9% 2.3x 2.1x Echo Global Logistics, Inc. Nasdaq:ECHO % % (42) x 7.1x 16.5x 3.9% 0.0x 0.0x Expeditors International of Washington Inc. Nasdaq:EXPD % % 8, ,368 (1,368) 7, x 11.2x 22.9x 10.0% 0.0x 0.0x FedEx Corporation NYSE:FDX % % 33,383 2,242 2,517 (275) 33, x 5.1x 13.7x 12.5% 0.4x 0.0x Forward Air Corp. Nasdaq:FWRD % % 1, (112) x 7.4x 16.6x 17.9% 0.0x 0.0x Hub Group Inc. Nasdaq:HUBG % % 1, (48) 1, x 9.0x 16.0x 4.3% 0.2x 0.0x JB Hunt Transport Services Inc. Nasdaq:JBHT % % 7, , x 8.9x 19.0x 15.0% 0.9x 0.9x Kuehne + Nagel International AG SWX:KNIN % % 13, (870) 13, x 7.9x 18.4x 5.5% 0.1x 0.0x Landstar System Inc. Nasdaq:LSTR % % 2, , x 9.4x 16.4x 8.3% 0.6x 0.2x Pacer International Inc. Nasdaq:PACR % % (20) x 5.2x 12.3x 1.2% 0.0x 0.0x Panalpina World Transport Holding Ltd. SWX:PWTN % % 2, (482) 1, x 4.7x 17.0x 1.1% 0.0x 0.0x Roadrunner Transportation Systems, Inc. NYSE:RRTS % % x 7.7x 13.0x 7.3% 2.1x 1.9x Ryder System, Inc. NYSE:R % % 2,969 3, ,754 6, x 4.2x 10.6x 22.8% 2.7x 2.6x TransForce Inc. TSX:TFI % % 2, , x 7.1x 13.2x 12.3% 2.3x 2.3x United Parcel Service, Inc. NYSE:UPS % % 78,706 15,068 9,026 6,042 84, x 8.2x 14.5x 13.1% 2.1x 0.9x Universal Truckload Services Inc. Nasdaq:UACL % % (11) x 5.7x 12.8x 5.4% 0.0x 0.0x UTi Worldwide Inc. Nasdaq:UTIW % % 1, , x 8.8x 19.6x 4.0% 2.4x 1.2x World Fuel Services Corp. NYSE:INT % % 3, , x 9.2x 13.6x 0.8% 1.0x 0.5x Mean 10.4x 7.1x 14.5x 9.3% 1.1x 0.8x Median 10.8x 7.4x 14.0x 6.9% 0.9x 0.2x Trucking Arkansas Best Corporation NasdaqGS:ABFS $11.12 $ % $ % $285 $170 $120 $50 $ x 2.6x 12.1x 3.5% 2.3x 0.7x Celadon Group Inc. NYSE:CGI % % x 6.2x 13.0x 18.2% 2.1x 2.1x Con-way Inc. NYSE:CNW % % 1, , x 4.7x 11.6x 7.9% 1.7x 1.7x Covenant Transportation Group, Inc. NasdaqGS:CVTI % % x 3.2x 11.5x 10.6% 2.4x 2.3x Heartland Express, Inc. NasdaqGS:HTLD % % 1, (120) 1, x 6.2x 16.5x 25.0% 0.0x 0.0x Knight Transportation Inc. NYSE:KNX % % 1, , x 5.8x 15.0x 20.6% 0.4x 0.4x Marten Transport Ltd. NasdaqGS:MRTN % % (1) x 3.7x 13.6x 15.8% 0.0x 0.0x Old Dominion Freight Line Inc. NasdaqGS:ODFL % % 3, , x 6.6x 14.1x 18.6% 0.6x 0.6x P.A.M. Transportation Services, Inc. NasdaqGM:PTSI % % x NM NM 10.6% 2.1x 1.7x Quality Distribution Inc. NasdaqGM:QLTY % % x 6.5x 10.1x 9.2% 5.5x 5.5x Saia, Inc. NasdaqGS:SAIA % % x 3.7x 10.1x 9.7% 0.6x 0.6x Swift Transportation Company NYSE:SWFT % % 1,901 1, ,534 3, x 5.6x 11.0x 15.1% 3.0x 2.9x Universal Truckload Services Inc. NasdaqGS:UACL % % (11) x 5.7x 12.8x 5.4% 0.0x 0.0x USA Truck Inc. NasdaqGS:USAK % % x 3.7x NM 3.8% 7.2x 7.2x Vitran Corp Inc. TSX:VTN % % NM 7.8x 29.7x NM NM 0.0x Werner Enterprises Inc. NasdaqGS:WERN % % 1, , x 4.6x 13.4x 16.5% 0.3x 0.2x YRC Worldwide Inc. NasdaqGS:YRCW % % 58 1, ,167 1, x 3.7x NM 4.1% 6.9x 5.9x Mean 6.6x 5.0x 13.9x 12.2% 2.2x 1.9x Median 6.2x 5.2x 12.9x 10.6% 1.9x 0.7x Rail and Rail Services American Railcar Industries, Inc. NasdaqGS:ARII $42.18 $ % $ % $901 $175 $99 $76 $ x 6.1x 12.5x 16.7% 1.5x 0.6x Canadian National Railway Company TSX:CNR % % 42,491 6, ,767 49, x 9.2x 14.5x 46.5% 1.5x 1.5x Canadian Pacific Railway Limited TSX:CP % % 20,530 4, ,371 24, x 9.5x 15.8x 31.7% 2.6x 2.4x CSX Corp. NYSE:CSX % % 23,588 9,832 1,371 8,461 32, x 6.4x 11.2x 38.4% 2.2x 1.9x FreightCar America Inc. NasdaqGS:RAIL % % (129) x 5.4x 19.2x 6.5% 0.0x 0.0x Genesee & Wyoming Inc. NYSE:GWR % % 4,111 1, ,793 5, x 9.2x 17.1x 30.1% 7.0x 6.8x The Greenbrier Companies, Inc. NYSE:GBX % % , x 5.4x 8.9x 8.3% 3.4x 3.1x Kansas City Southern NYSE:KSU % % 10,725 1, ,536 12, x 10.5x 19.5x 38.9% 1.8x 1.8x Norfolk Southern Corp. NYSE:NSC % % 22,573 8, ,014 30, x 6.8x 11.4x 36.6% 2.1x 2.0x Trinity Industries Inc. NYSE:TRN % % 3,314 3, ,713 6, x 7.1x 11.4x 18.0% 4.4x 3.9x Union Pacific Corporation NYSE:UNP % % 63,491 8,997 1,063 7,934 71, x 7.0x 12.6x 40.6% 1.1x 0.9x Wabtec Corporation NYSE:WAB % % 4, , x 9.8x 16.6x 17.8% 1.1x 0.4x Mean 10.2x 7.7x 14.2x 27.5% 2.4x 2.1x Median 8.6x 7.1x 13.5x 30.9% 2.0x 1.8x Marine A.P. Møller - Mærsk A/S CPSE:MAERSK B $7, $8, % $6, % $34,154 $18,631 $2,760 $15,871 $50, x 3.5x 8.9x 21.3% 1.5x 1.3x Aegean Marine Petroleum Network Inc. NYSE:ANW % % x 7.7x 6.7x 1.2% 7.5x 6.6x Costamare Inc. NYSE:CMRE % % 1,148 1, ,475 2, x 7.4x 7.6x 61.6% 7.3x 6.2x Diana Shipping Inc. NYSE:DSX % % (39) x 11.9x 14.1x 56.4% 3.2x 0.0x Kirby Corporation NYSE:KEX % % 4, , x 7.7x 15.5x 24.0% 1.5x 1.5x Matson, Inc. NYSE:MATX % % 1, , x 2.2x 15.5x 11.6% 1.8x 1.7x Neptune Orient Lines Ltd. SGX:N % % 2,649 3, ,838 5,487 NM 8.4x 15.5x NM NM 0.0x Nordic American Tankers Limited NYSE:NAT % % NM 13.4x NM 14.5% 18.7x 14.5x Rand Logistics, Inc. NasdaqCM:RLOG % % x 6.7x 12.7x 17.9% 5.5x 5.3x Seacor Holdings Inc. NYSE:CKH % % 1,492 1, , x 7.5x 14.3x 12.7% 3.8x 2.9x Wilh. Wilhelmsen ASA OB:WWASA % % 2,237 1, , x 5.4x 4.3x 58.1% 7.0x 4.3x Mean 8.8x 7.4x 11.5x 27.9% 5.8x 4.0x Median 9.0x 7.5x 13.4x 19.6% 4.7x 2.9x Transportation Equipment Accuride Corp. NYSE:ACW $4.20 $ % $ % $199 $324 $20 $304 $ x 6.7x NM 6.9% 0.0x 4.4x Dana Holding Corporation NYSE:DAN % % 2, ,004 (68) 2, x 3.0x 8.7x 10.4% 10.5x 0.0x Gentherm Incorporated NasdaqGS:THRM % % x 5.5x 14.3x 12.4% 0.3x 0.1x Spartan Motors Inc. NasdaqGS:SPAR % % (16) x 4.7x 12.4x 3.3% 0.0x 0.0x Wabash National Corp. NYSE:WNC % % , x 5.3x 9.4x 7.6% 3.3x 3.1x Mean 7.4x 5.1x 11.2x 8.1% 2.8x 1.5x Median 7.4x 5.3x 10.9x 7.6% 0.3x 0.1x 6 of 9

8 Profile of Recently Closed HW&Co. Transactions Harris Williams & Co. advised Microstar Logistics in its sale to financial buyers Freeman Spogli & Co. and the Pohlad Companies. MicroStar is the market-leading provider of comprehensive keg management and logistics services to the U.S. craft beer market. Founded in 1996 and headquartered in Denver, CO, MicroStar owns the largest independent keg fleet in the U.S. and manages the logistics needs of numerous craft brewery customers. YOU KNOW BEER, WE KNOW KEGS. Relax in the knowledge that your keg management and recovery is taken care of. Effective keg management is our core business, letting you focus on yours. and Harris Williams & Co. advised A&R Logistics in its sale to private equity buyer Mason Wells. A&R is a leading provider of dry bulk transportation, packaging, distribution, and logistics solutions serving the chemical and plastic industries in North America. A&R provides a comprehensive suite of services including over-the-road transportation, transloading, packaging, and warehousing through a nationwide network of 25 facilities. 7 of 9

9 Recent HW&Co. T&L Transactions portfolio companies of have completed a merger with Third-Party Logistics Our professionals have deep expertise across the spectrum of Transportation & Logistics sectors. Surface Transportation Rail Aviation Marine Transportation Equipment Automotive Companies above represent select experience of Harris Williams & Co. professionals. 8 of 9

10 Contact Us Frank Mountcastle Managing Director Harris Williams & Co. s Transportation & Logistics Group has industry-leading experience in a broad range of attractive niches, including third party logistics, surface transportation, airport and aviation services, marine transportation, automotive and heavy duty vehicles, transportation equipment, and transportation infrastructure. Our middle market leadership and sell-side execution excellence deliver unmatched results for our clients. For more information, contact one of our professionals. Jason Bass Managing Director jbass@harriswilliams.com Joseph Conner Director jconner@harriswilliams.com Jershon Jones Vice President jjones@harriswilliams.com Jeff Burkett Vice President jburkett@harriswilliams.com Sources: Capital IQ Thomson Financial S&P Reuters 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 Services Authority (FRN #540892). 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 NUMBER. 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 2013 Harris Williams & Co., all rights reserved. 9 of 9