EFTA01371106.pdf

31 October 2017 Railroads Canadian Rails market has likely peaked, with North American light vehicle production expected to be down 2% in 2017 after 7 years of expansion, which is pressuring auto volumes (-9% YTD). Figure 64: Motor vehicles and parts carloads trends Figure 65: North American light vehicle production is ((U.S. + Can) since 2012 expected to be down 2.1% in 2017 30% 30,000 40% 20% 30% 25,000 20,000 20% 10% 10% 0% (10%) _I - 0% ci 15,000 (10%) (20%) 10,000 (20%) (30%) ne en n1 ta. nr tr. in '0 to N. N. V in kp alp ra m 0 in kb la w N 8 N 8 N rel ••4 8 N N 8 N 8 N N 8 N Rs R. .9 N ,9 (9, N8 8 el A -.., ea ea ea ea Avg. Weekly Carloads —YoY Sam Danao• Saft.AM I Son 0_ Sr* *as mos* Mita: If00LOAN/ • Non-metallic minerals & products - This category accounts for roughly 12% of total carloads traffic (ex-intermodal) in North America - 80/0 in Canada and 14% in the U.S. It is comprised of crushed stone & gravel, nonmetallic minerals, and stone, clay, and glass. Demand for these products is generally driven by construction and industrial activity. The oil and gas industry is a large customer for nonmetallic minerals as drilling activity drives demand for aggregates/gravel and frac sand which has been extremely volatile over the past several years. Figure 66: Non-metallic minerals & products carloads trends (US + Can) since 2012 50,000 25% I Figure 67: U.S. frac sand carloads closely track the rig count 150% 20% 100% 45,000 15% 50% 40,000 10% • 0% 35,000 5% >- (50%) 0% 96% Correlation 30,000 (100%) (5%) N en. en 25,000 o o O O O O O O O O O (10%) N N est N N N N N N N 20,000 IN N en rei CT O 1.11 O LO N N (15%) C aa U.S. b i7 Rig Count B' as as e e —41— Frac Sand Carloads (U.S. Class I rails) i0 (0 ,0 10 (0 10 Avg. Weekly Carloads —YoY Son Detirsay Bent W Sane otsw eleke apHy STO • DB's Oil Services and Equipment team forecasts moderate rig count growth in 2018. Overall rig counts in North America are expected to grow 5.9% yoy in 2018. On a per country basis, growth is estimated at +5% Page 32 Deutsche Bank Securities Inc. CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0064302 CONFIDENTIAL SDNY_GM_00210486 EFTA01371106