Investment Banking I Industry Spotlight Coverage Bill Tyson Co-Head Capital Markets [email protected] Materials Jeff Thieman Managing Director [email protected] Diversified Industrials

1

Diversified Industrials - Metals & Materials I Q4 2017

Investment Banking I Industry Spotlight

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Diversified Industrials - Metals & Materials I Industry Spotlight

Q4 2017

Key Industrial Sector Contacts

Investment Banking

Debt Capital Markets Equity Capital Markets

Mike Brothers Managing Director

[email protected]

Mike Ryan Managing Director

[email protected]

Corporate Banking

Industry Expertise Capital Mkts. Capabilities

Full-service platform with over 200 professionals, offering the following:

Investment Banking

M&A Advisory

Capital Raising

Debt Capital Markets

Loan Capital Markets:

– Pro Rata

– Institutional

Bond Capital Markets:

– Investment Grade

– High Yield

– Acquisition & Bridge Finance

Private Placements

Equity Capital Markets

Initial Public Offerings

Follow-On Offerings

Convertible Debt

Sponsor Coverage

Bill Tyson Co-Head Capital Markets

[email protected]

Jeff Thieman Managing Director [email protected]

Diversified Industrials Group Overview

Jeremy Eberlein Managing Director

[email protected]

Select Diversified Industrials Investment Banking Advisory Transactions

Joe Carson Managing Director

[email protected]

Marc Hirschfield

Vice President [email protected]

Melina Audinelle Director

[email protected]

Chemicals, Plastics & Packaging

Coatings Diversified Chemicals

Packaging Plastics Manufacturing

Industrial Technology

Flow Control Process/Motion Control

Test & Measurement

Metals & Materials

Metal Forming & Machining

Mills & Specialty Metal

Natural Resources & Mining

Processors/Distributors Scrap/Recycling

Specialty Distribution

Automotive Aftermarket

Building & Construction Products

Electrical & Communication

Industrial, MRO & Safety

Transportation & Logistics

Automotive & Heavy Duty Vehicles

Marine

Rail & Rail Services Third Party Logistics

Christopher Mosley Metals West

[email protected]

Rachel Hermanson Metals East

[email protected]

Gregory Eck Asset Based Lending [email protected]

acquired by

portfolio company of

acquired by

portfolio company of

a business unit of

acquired by

Advanced Energy Technologies LLC

a subsidiary of

acquired by

acquired by

acquired assets of

a subsidiary of

GT Acquisition, LLC

recapitalized with

Exclusive Financial Advisor Exclusive Financial Advisor Exclusive Financial Advisor Exclusive Financial Advisor Exclusive Financial Advisor Exclusive Financial Advisor Exclusive Financial Advisor Exclusive Financial Advisor

recapitalized by

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Q4 2017

Senior Diversified Industrials Investment Banking Team

21+ years of investment banking experience, inclusive of: merger & acquisition advisory, restructuring advisory, equity offerings, debt placements, and principal investing

Career primarily focused on middle market industrial companies

Prior to joining Fifth Third in 2014, served as a Director in the Industrials Group of Harris Williams & Co, where Jeremy led the Metals Industry Practice

Previously, Jeremy worked as a Director at National City Capital Markets Investment Banking Group, and was involved in the founding of Resilience Capital Partners executing transactions both as an advisor and as principal investor

BSBA − Ohio University

11+ years of investment banking experience and 16+ years financial industry experience

Prior to joining Fifth Third in 2015, Marc served as Vice President at Corporate Fuel, a New York City-based financial advisory and private equity firm focused on middle market private and public companies

Previously, Marc was with Sterne Agee, a regional investment banking and brokerage firm based in Birmingham, Alabama

BS − University of Florida; MBA − New York University

Jeremy Eberlein (Managing Director)

Marc Hirschfield (Vice President)

Joe Carson (Managing Director)

24+ years of investment banking and financial advisory services experience covering public and private companies in the middle market sector. Joe has significant experience in providing advisory services for mergers and acquisitions, acquisition financings, defense advisory/hostile takeovers, and leveraged buyouts

Prior to joining Fifth Third in 2017, Joe served as Senior Vice President at Caldwell Tanks, in Louisville, KY, a manufacturer of tanks and storage structures that are used for a number of industrial purposes. Joe headed Caldwell Tanks’ Energy Division

Previously, Joe served as a managing director for Western Reserve Partners in Cleveland, where he was co-head of the Industrial Group and executed transactions across the industrials vertical

BSBA − Miami University; MBA − Case Western University

Melina Audinelle (Director)

17+ years of investment banking experience covering public and private companies in both the large corporate and middle market sectors. Melina has significant experience in providing advisory services for mergers and acquisitions, acquisition financings, defense advisory/hostile takeovers, and leveraged buyouts

Prior to joining Fifth Third in 2014, Melina spent five years at Challenger Capital Group, a boutique investment bank providing M&A advisory and structured capital raising

Previously, Melina served as an investment banking associate for JPMorgan Securities, Inc. in Chicago, where she was a member of the Mid-Corporate Investment Banking M&A group

BS – Northwestern University

Office: 216-274-5008 Email: [email protected] Location: Cleveland, OH

Office: 216-274-5152 Email: [email protected] Location: Cleveland, OH

Office: 312-704-4092 Email: [email protected] Location: Chicago, IL

Office: 678-237-4376 Email: [email protected] Location: Atlanta, GA

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Q4 2017

Highlighted FTS Advisory Transaction

January 2018: Fifth Third Securities, Inc. Advises Auto-Vehicle Parts Company on its Recapitalization by Tenex Capital Management

Fifth Third Securities, Inc. acted as the exclusive financial advisor to Auto-Vehicle Parts Company (or “Auveco”) on its January 2018 recapitalization by Tenex Capital Management (“Tenex”). Advising Auveco on the transaction from Fifth Third were Mike Burr, Senior Managing Director; Jeremy Eberlein, Managing Director; Melina Audinelle, Director; C.J. Andriole, Senior Associate; and Colin Schulz, Senior Analyst.

About Auveco

Founded in 1916, Auveco has become one of the predominant providers of automotive fasteners to the body hardware aftermarket as well as general industrial fasteners used in maintenance, repair, and operations applications within North America. Auveco sells to thousands of wholesale distribution customers who subsequently service hundreds of thousands of collision centers, repair shops, dealerships, and general manufacturers located throughout North America.

About Tenex

Tenex is a private equity firm that invests in middle-market companies. Tenex uses an in-house team of hybrid investment professionals skilled in operational leadership, investing and capital markets structuring to maximize long-term value creation. Tenex’s deep operating experience allows the firm to collaborate with management teams to capitalize on business and market opportunities. Tenex has successfully invested in a diverse range of industries, including industrials, manufacturing, and health and business services.

January 2018

has been recapitalized by

The undersigned served as Exclusive Financial Advisor to Auveco in connection with this transaction

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Q4 2017

Highlighted FTS Advisory Transaction

January 2018: Fifth Third Securities, Inc. Advises Diamond Metals Distribution, LLC on its Recapitalization with Kian Capital

January 2018

has been recapitalized with

The undersigned served as Exclusive Financial Advisor to Diamond in connection with this transaction

Fifth Third Securities, Inc. acted as the exclusive financial advisor to Diamond Metals Distribution, LLC (“Diamond”) on its January 2018 recapitalization with Kian Capital (“Kian”). Advising Diamond on the transaction from Fifth Third were Jeremy Eberlein, Managing Director; C.J. Andriole, Senior Associate; and Colin Schulz, Senior Analyst.

About Diamond

Diamond is a Cleveland, Ohio based steel service center with customers that include tool and die shops, mold shops, machine shops, and general metalworking manufacturers. Diamond provides value-added services, such as production saw cutting, flame cutting, pre-squared finishing, and grinding and milling services to tool steels, hot and cold rolled steels, powdered metals, and alloy plates and rounds.

About Kian

With offices in Atlanta, GA and Charlotte, NC, Kian is a private investment firm that makes mezzanine debt and equity investments in leading lower middle-market companies across a broad range of industries, typically providing between $5 million and $20 million of capital per transaction. Kian partners with management teams and independent sponsors to build and grow successful, high-quality businesses. Kian’s team has deep expertise across the capital structure, including control private equity, mezzanine debt and leveraged senior debt, which enables Kian to be flexible, value-added partners to help support the long-term objectives of business owners.

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Q4 2017

+34%

(2)%

+25%

+21%

[1] Company Websites [2] Bloomberg [3] American Iron and Steel Institute [4] Association of Oil Pipelines

Selected Price Performance Benchmarks (% monthly change) [6]

+23%

Latest Twelve Months (“LTM”) Share Price Performance [7,8]

Market Insights Metals & Materials

RECENT HEADLINES December 11, 2017: Tenaris, a Luxembourg-based manufacturer and distributor of

steel pipe products, unveiled its $1.8 billion pipe mill in Bay City, TX[1]

− 1.2 million square foot mill incorporates high level of automation and technology, designed to compete with various Asian imports in the shale fracking market

− Strategically located near key shale plays and reaffirms Tenaris commitment to U.S. market and domestic manufacturing

November 21, 2017: Nucor Corp. announced plans to build a $250 million rebar micro mill in Sedalia, MO, about 90 miles east of Kansas City (expected to begin operations in 2019)[1]

− Strategically located near customers that use Nucor’s product offerings in buildings, bridge piers, and highways

November 15, 2017: Competitive dynamics in the aerospace market have heated up, after Boeing announced a $27bn order to sell 225 737 MAX aircrafts to FlyDubai (largest ever single-aisle jet order)[2]

− The order followed the November 14, 2017 announcement of Airbus’ $50bn order to sell 430 airplanes to Indigo Partners (owner of Frontier Airlines)

MARKET UPDATES AND TRENDS Adjusted YTD U.S. raw steel production through December 9, 2017 was 85.1 million

net tons, at a capacity utilization rate of 74.5%[3]

− Up 4.3% from the 81.6 million net tons produced during the same period last year, when capacity utilization was at 70.5%

Raw steel production (total of 1.7 million net tons) by U.S. region in thousands of net tons for the week ended December 9, 2017 was as follows: Northeast – 202; Great Lakes – 607; Midwest – 169; Southern – 621; Western – 73[3]

On November 15-16, the majority of U.S. carbon hot-rolled, cold-rolled, and coated steel producers announced a $30/NT price increase, effective immediately

− Hot-rolled pricing, which descended to a low of $560/NT in October, returned to $600/NT in November, with mills currently quoting as high as $640/NT

− Cold-rolled approached $800/NT, albeit at a wide pricing variance at $760 to $820/NT

After a boom in pipeline construction (22% increase)[4] from 2010 to 2014 when U.S. oil prices were at ~$100/bbl, followed by a sharp decline in pipeline construction project output in 2015 and 2016, oilfield investments in line pipe have since rebounded

− The Simdex Future Pipeline Projects database reports 155 pipeline construction projects for a total of 24,000 miles planned over the next three years

− The American Petroleum Institute’s (“API”) 2017 infrastructure report projects oil, gas and natural gas pipeline development annual average capital expenditures of $12.3bn to $19.0bn from 2017 through 2035

− One major project that recently received approval from the Trump administration in March 2017 is the Keystone XL pipeline

TransCanada’s 36” diameter crude oil pipeline, aiming to transport 830,000 barrels per day from the Alberta oil sands to Steel City, NE, is planned to require 821,000 NT of pipe in Canada and another 660,000 NT in the U.S.

Global Crude Steel Production (million tons) [5]

+18%

Source Websites: [1] https://www.washingtonpost.com/news/wonk/wp/2017/08/09/trump-edges-closer-to-a-trade-war-with-china-thanks-to-aluminum-foil/?utm_term=.74261d9f4418 [2] Potential: http://www.reuters.com/article/us-usa-trump-steel-idUSKBN17M237

Ch

ina

an

d R

est

of

Wo

rld

No

rth A

merica

[5] World Steel Association [6] Steelbenchmarker, S&P Capital IQ as of December 29, 2017 [7] S&P Capital IQ as of December 29, 2017 [8] Detail related to indices can be found on pgs. 7 – 10

RECENT INFRASTRUCTURE AND TRADE HEADLINES

The Trump Administration’s $1 trillion infrastructure plan is gaining visibility, after more than 500 infrastructure projects were recently submitted for proposal from every U.S. state and several U.S. territories, totaling over $500 billion [1]

− President Trump granted permit for construction of the Keystone XL pipeline March 24, 2017

− Notables currently in plan: $45 billion Alaska Pipeline and LNG Project; $25 billion Gateway Rail Tunnel Project connecting New York and New Jersey; $15 billion California WaterFix (Bay Delta Tunnels) Project [1]

Current prioritization and future result of the U.S. Section 232 case, which allows the President to adjust imports if excessive foreign imports are found to be a threat to national security, serves as a potential catalyst to the broader Metals & Materials industry

− Potential macroeconomic result: less foreign steel imports in the U.S., leading to an increase in domestic metals production

MARKET UPDATES AND REVIEWS

Although China still disproportionately utilizes blast furnaces to produce the majority of its steel, the U.S. continues to transition to more energy and operationally efficient arc furnaces for raw steel production [2]

− U.S. electric arc furnace output increased 6.6% while U.S. blast furnace output was down 3.0% in 1Q 2017 when compared to 1Q 2016 [2]

Adjusted YTD Jun-2017 U.S. steel production was 41.6 million net tons, up 2.5% from the same period last year [2]

− YTD Jun-2017 U.S. steel production capability utilization rate of 74.4%, increasing 1.8% from the same period last year [2]

GLOBAL CRUDE STEEL PRODUCTION TRENDS

YTD May-2017 global crude steel production increased 4.9% when compared to the same period last year [3]

− Chinese steel production out-paced North American production in the first five months of the year, growing at 4.3% Y-o-Y versus 3.6% Y-o-Y [3]

However, North America recently experienced a favorable steel production uptick, growing 4.2% in May 2017 M-o-M from April 2017, while Chinese steel production declined 0.7% over the same period [3]

MAJOR INDUSTRY PLAYERS: LAST TWELVE MONTHS STOCK PERFORMANCE

Since June 2016, all public market Metals & Materials indices have outperformed the S&P 500, excluding the Processors/Distributors index

− Metal Forming & Machining index trending upwards YTD 2017

− Scrap/Recycling public companies marginally performed most favorably over the last twelve months from a pricing perspective, gaining 31% since June 2016

5

10

15

20

20

40

60

80

No

v-1

0

Mar

-11

Jul-

11

No

v-1

1

Mar

-12

Jul-

12

No

v-1

2

Mar

-13

Jul-

13

No

v-1

3

Mar

-14

Jul-

14

No

v-1

4

Mar

-15

Jul-

15

No

v-1

5

Mar

-16

Jul-

16

No

v-1

6

Mar

-17

Jul-

17

No

v-1

7

ROW China North America

(15%)

(10%)

(5%)

0%

5%

10%

15%

Dec

-16

Jan

-17

Feb

-17

Mar

-17

Ap

r-17

May

-17

Jun

-17

Jul-

17

Au

g-1

7

Sep

-17

Oct

-17

No

v-1

7

Dec

-17

Hot-Rolled Steel Coil ($/ton) Cold-Rolled Steel Coil ($/ton)

Copper ($/lbs.) Zinc ($/ton)

(25%)

0%

25%

50%

Dec-16 Mar-17 Jun-17 Sep-17 Dec-17

Metal Forming & Machining Mills & Specialty MetalNatural Resources & Mining Processors/DistributorsScrap/Recycling S&P 500

https://www.washingtonpost.com/news/wonk/wp/2017/08/09/trump-edges-closer-to-a-trade-war-with-china-thanks-to-aluminum-foil/?utm_term=.74261d9f4418


























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Q4 2017

+87%

+74% +85%

Sub Sector Indices’ Stock Price Performance and Valuation Summary

Metals & Materials 5-Year Share Price Performance Metals & Materials 5-Yr. Median EV/1-Yr. Forward EBITDA Valuation

Public Market Valuation Trends Metals & Materials

Source: S&P Capital IQ as of December 29, 2017

+22% +18%

(33%)

Sub SectorNumber of

Companies

Median

Enterprise Value

Mean

% Change in Stock Price

Median TEV /

LTM Multiples

Median TEV /

Forward Multiples

$ in millions 6 Months 12 Months Revenue EBITDA Revenue EBITDA

Metal Forming & Machining 18 $1,963 11% 23% 1.4x 11.4x 1.5x 10.1x

Mills & Specialty Metal 19 $4,264 21% 25% 0.9x 8.6x 0.9x 8.0x

Natural Resources & Mining 6 $43,835 47% 34% 1.4x 6.6x 1.4x 5.6x

Processors/Distributors 6 $1,797 9% (2%) 0.6x 9.9x 0.6x 9.1x

Scrap/Recycling 4 $2,928 17% 21% 0.6x 11.2x 0.6x 8.7x

S&P 500 500 10% 18% 2.5x 12.8x 2.3x 10.8x

(100%)

(75%)

(50%)

(25%)

0%

25%

50%

75%

100%

Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17

Metal Forming & Machining Mills & Specialty MetalNatural Resources & Mining Processors/DistributorsScrap/Recycling S&P 500

3.0x

5.0x

7.0x

9.0x

11.0x

13.0x

Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17

Metal Forming & Machining Mills & Specialty Metal

Natural Resources & Mining Processors/Distributors

Scrap/Recycling S&P 500

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Q4 2017 Comparable Public Companies Metals & Materials – Metal Forming & Machining

Operating & Trading Statistics ($ in millions, except per-share data)

NA – Not available NM – Not meaningful E – Estimate Enterprise value equals market capitalization plus minority equity plus debt minus cash Source: S&P Capital IQ as of December 29, 2017

Stock % of 52- Enterprise Value /

Price at Week Market Enterprise Revenue Growth LTM Margins Debt / Price / Revenue EBITDA

12/29/17 High Cap Value '15A - '16A '16A - '17E Gross EBITDA EBITDA Earnings LTM 2017E LTM 2017E

Metal Forming

Arconic Inc. $27.25 89% $13,116 $18,229 (0%) (2%) 21.0% 13.5% 4.0x NM 1.4x 1.5x 10.7x 10.1x

Voestalpine AG 59.85 98% 10,553 14,675 (4%) 4% 22.3% 14.3% 2.7x 19.7x 1.0x 1.2x 7.1x 8.4x

Kaiser Aluminum Corporation 106.85 98% 1,806 1,910 (4%) 2% 22.9% 15.6% 1.7x 18.8x 1.4x 1.4x 8.9x 10.2x

Shiloh Industries Inc. 8.20 49% 190 357 (1%) NA 10.6% 6.8% 2.5x 21.6x 0.3x NA 5.0x NA

SIFCO Industries Inc. 6.65 68% 37 67 2% NA 11.6% 3.2% 8.0x NM 0.6x NA 17.2x NA

Median: Metal Forming (1%) 2% 21.0% 13.5% 2.7x 19.7x 1.0x 1.4x 8.9x 10.1x

Industrial Machining

Regal Beloit Corporation $76.60 88% $3,394 $4,455 (8%) 1% 27.0% 14.8% 2.5x 16.6x 1.4x 1.4x 9.1x 9.1x

The Timken Company 49.15 93% 3,815 4,716 (7%) (0%) 26.2% 14.2% 2.5x 31.2x 1.6x 1.8x 11.6x 12.2x

Rexnord Corporation 26.02 98% 2,704 3,789 (0%) 1% 35.3% 17.3% 4.8x 40.7x 1.9x 2.0x 11.2x 9.8x

RBC Bearings Inc. 126.40 90% 2,986 3,163 3% 4% 37.9% 24.2% 1.4x 42.6x 5.0x 4.9x 20.6x 20.5x

Actuant Corporation 25.30 87% 1,517 1,906 (5%) 1% 34.6% 11.3% 4.4x 30.1x 1.7x 1.7x 15.1x 12.6x

Altra Industrial Motion Corp. 50.40 99% 1,475 1,740 (5%) 19% 31.7% 14.6% 2.6x NM 2.1x 2.1x 14.4x 14.1x

CIRCOR International, Inc. 48.68 67% 803 997 (10%) 12% 31.9% 9.9% 4.4x NM 1.6x 1.5x 16.4x 12.2x

Median: Industrial Machining (5%) 1% 31.9% 14.6% 2.6x 31.2x 1.7x 1.8x 14.4x 12.2x

Aerospace Machining

Spirit AeroSystems Holdings, Inc. $87.25 99% $10,088 $10,451 2% 1% 14.2% 10.8% 1.5x 24.6x 1.5x 1.5x 14.2x 9.6x

Triumph Group, Inc. 27.20 78% 1,350 2,749 (9%) (2%) 23.9% 11.0% 3.9x NM 0.8x 0.8x 7.6x 5.9x

Kaman Corporation 58.84 97% 1,637 2,015 2% 3% 29.9% 9.2% 2.6x 30.0x 1.1x 1.1x 12.4x 11.8x

Magellan Aerospace Corp. 16.75 96% 975 1,053 9% 3% 17.6% 15.6% 0.7x 12.4x 1.3x 1.4x 8.6x 7.7x

Ducommun Inc. 28.45 80% 322 541 (17%) 2% 19.1% 9.0% 4.4x 23.5x 1.0x 1.0x 10.7x 9.5x

Heroux-Devtek Inc. 12.14 97% 439 501 (3%) (2%) 16.7% 13.6% 2.4x 18.4x 1.6x 1.7x 11.6x 10.7x

Median: Aerospace Machining (0%) 1% 18.4% 10.9% 2.5x 23.5x 1.2x 1.2x 11.2x 9.6x

All Indices Median (3%) 2% 23.4% 13.6% 2.6x 23.5x 1.4x 1.5x 11.4x 10.1x

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Q4 2017 Comparable Public Companies Metals & Materials – Mills & Specialty Metal

Operating & Trading Statistics ($ in millions, except per-share data)





Mills & Specialty Metal

NIPPON STEEL & SUMITOMO METAL CORPORATION $25.67 99% $22,645 $44,016 (5%) 11% 12.2% 10.1% 4.1x 19.3x 1.0x 1.0x 9.4x 9.0x

ArcelorMittal 32.56 98% 33,210 47,348 (11%) 13% 11.8% 11.5% 2.0x 10.8x 0.7x 0.7x 6.3x 6.1x

POSCO 311.25 95% 24,900 40,373 (11%) 17% 13.3% 11.8% 3.2x 15.3x 0.8x 0.8x 6.5x 6.5x

Nucor Corporation 63.58 96% 20,213 23,319 (1%) 18% 14.3% 13.4% 1.7x 19.2x 1.2x 1.2x 9.1x 8.0x

Voestalpine AG 59.85 98% 10,553 14,675 (4%) 4% 22.3% 14.3% 2.7x 19.7x 1.0x 1.2x 7.1x 8.4x

Steel Dynamics Inc. 43.13 98% 10,220 11,608 2% 15% 18.7% 14.9% 1.9x 20.4x 1.3x 1.3x 8.6x 7.9x

Alcoa Inc. 53.87 99% 9,967 12,505 (17%) 24% 18.0% 16.7% 0.8x NM 1.1x 1.1x 6.8x 6.2x

United States Steel Corp. 35.19 84% 6,158 7,364 (11%) 18% 8.4% 7.8% 3.2x NM 0.6x 0.6x 8.1x 5.6x

Outokumpu Oyj 9.29 74% 3,835 5,100 (13%) 17% 10.5% 10.5% 2.1x 9.9x 0.7x 0.7x 6.4x 6.0x

Acerinox, S.A. 14.31 84% 3,950 4,773 (9%) 21% 35.4% 10.2% 2.7x 19.8x 0.9x 0.9x 8.6x 8.8x

AK Steel Holding Corporation 5.66 50% 1,782 4,164 (12%) 3% 15.0% 10.6% 3.3x 21.9x 0.7x 0.7x 6.5x 7.0x

Allegheny Technologies Inc. 24.14 91% 2,628 4,517 (16%) 10% 9.9% 9.4% 6.0x NM 1.3x 1.3x 14.1x 11.1x

Commercial Metals Company 21.32 92% 2,487 3,059 9% 12% 13.1% 5.4% 3.4x 32.3x 0.7x 0.6x 12.5x 8.2x

Ferroglobe PLC 16.20 92% 2,786 3,296 21% 6% 34.4% 6.5% 6.5x NM 2.0x 2.0x 30.7x 23.6x

Carpenter Technology Corp. 50.99 95% 2,387 2,970 (1%) 7% 15.2% 13.4% 2.4x NM 1.6x 1.5x 11.7x 11.1x

Schmolz + Bickenbach AG 0.86 85% 815 1,361 (16%) 10% 37.3% 8.0% 2.5x NM 0.4x 0.5x 5.6x 6.4x

Global Brass and Copper Holdings, Inc. 33.10 83% 725 952 (11%) 6% 12.8% 7.3% 2.9x 19.5x 0.6x 0.7x 8.8x 7.6x

TimkenSteel Corporation 15.19 66% 675 814 (21%) 41% NM NM NM NM 0.7x 0.7x NM 9.1x

Universal Stainless & Alloy Products Inc. 21.42 93% 155 232 (15%) 11% 10.0% 10.2% 4.1x NM 1.2x 1.4x 12.2x 9.4x

Median: Mills & Specialty Metal (11%) 12% 13.8% 10.4% 2.8x 19.5x 0.9x 0.9x 8.6x 8.0x

10


Q4 2017 Comparable Public Companies Metals & Materials – Natural Resources & Mining, Processors/Distributors, and Scrap/Recycling

Natural Resources & Mining Operating & Trading Statistics ($ in millions, except per-share data)

Processors/Distributors Operating & Trading Statistics ($ in millions, except per-share data)

Scrap/Recycling Operating & Trading Statistics ($ in millions, except per-share data)





Natural Resources & Mining

BHP Billiton plc $20.58 100% $109,552 $132,655 23% 12% 85.6% 50.2% 1.7x 44.2x 3.5x 3.1x 6.9x 5.5x

Rio Tinto plc 53.28 93% 93,465 107,255 (3%) 17% 20.7% 40.5% 1.0x 20.9x 2.9x 2.7x 7.0x 6.0x

Glencore Plc 5.27 100% 75,174 101,873 4% 19% 2.1% 5.7% 2.9x NM 0.6x 0.6x 9.7x 7.2x

Vedanta Resources plc 10.87 72% 3,035 18,892 7% 17% 23.7% 27.0% 4.2x NM 1.4x 1.4x 5.2x 5.1x

Cliffs Natural Resources Inc. 7.21 58% 2,138 3,613 5% 19% 20.0% 23.0% 3.0x 26.8x 1.5x 1.4x 6.3x 5.1x

ERAMET S.A. 118.91 99% 3,142 4,014 (7%) 14% 19.5% 17.0% 3.4x NM 1.1x 1.1x 6.2x 5.8x

Median: Natural Resources & Mining 4% 17% 20.4% 25.0% 3.0x 26.8x 1.4x 1.4x 6.6x 5.6x




Processors/Distributors

Reliance Steel & Aluminum Co. $85.79 97% $6,255 $8,092 (8%) 10% 29.6% 9.1% 2.3x 19.3x 0.9x 0.9x 9.5x 9.0x

Worthington Industries, Inc. 44.06 83% 2,677 3,459 7% 1% 16.7% 9.1% 2.6x 15.6x 1.1x 1.1x 11.6x 11.6x

Klöckner & Co SE 12.36 79% 1,233 1,748 (14%) 8% 21.5% 3.1% 3.2x 14.2x 0.2x 0.3x 7.7x 7.7x

Russel Metals Inc. 23.26 98% 1,437 1,706 (14%) 19% 19.4% 6.6% 2.3x 18.7x 0.7x 0.7x 10.3x 12.5x

Ryerson Holding Corporation 10.40 70% 387 1,357 (10%) 12% 18.1% 4.5% 7.1x 25.8x 0.4x 0.4x 9.2x 6.1x

Olympic Steel, Inc. 21.49 77% 236 453 (10%) 15% 21.3% 3.2% 5.4x 28.2x 0.4x 0.4x 11.0x 9.2x

Median: Processors/Distributors (10%) 11% 20.3% 5.6% 2.9x 19.0x 0.6x 0.6x 9.9x 9.1x




Scrap/Recycling

Steel Dynamics, Inc. $43.13 98% $10,220 $11,608 2% 15% 18.7% 14.9% 1.9x 20.4x 1.3x 1.3x 8.6x 7.9x

Commercial Metals Company 21.32 92% 2,487 3,059 9% 12% 13.1% 5.4% 3.4x 32.3x 0.7x 0.6x 12.5x 8.2x

Sims Metal Management Limited 12.32 96% 2,484 2,190 12% 3% 14.2% 4.6% 0.0x 30.0x 0.6x 0.5x 12.3x 9.3x

Schnitzer Steel Industries, Inc. 33.50 95% 883 1,025 25% (10%) 13.3% 6.0% 1.4x 21.6x 0.6x 0.7x 10.1x 10.1x

Median: Scrap/Recycling 11% 7% 13.8% 5.7% 1.6x 25.8x 0.6x 0.6x 11.2x 8.7x

11


Q4 2017

$587

$700 $704$664

$612 $641 $618

$688 $715 $733 $739

'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16

Cu

mu

lati

ve

Dry

Po

wd

er

($ i

n b

illi

on

s)

2017

2016

2015

2014

2013

2012

2011

2010

2009

Overhang by Vintage

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17

U.S. corporate cash balances remain at record levels and are driving activity in strategic buyer M&A

Historically, M&A cycles have not extended past seven years; 2017 was year eight of the current cycle

2017 demonstrated signs that the buyout cycle is slowing, however, numerous positive drivers remain

− The public equity bull market continues to support M&A activity and elevated valuation multiples

Note: This data represents the entire U.S. market (all industries) Source: PitchBook, S&P Capital IQ, and S&P Capital IQ LCD

0

4,000

8,000

12,000

16,000

20,000

24,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Under $25mm $25 to $500mm Above $500mm Undisclosed

Transaction Volume

Recession Recession

▼ 9% ▲30%

S&P 500 – Aggregate Corporate Cash & Equivalents

Over $1.7 trillion

Global Private Equity Capital Overhang by Year

Private equity firms continue to sit on a built up level of dry powder, driving a need to deploy it for acquisitions

Over $735 billion

U.S. M&A Volume and Valuation Trends M&A activity remains elevated, driven by the public equity market’s thirst for growth and excess capital

($ in billions) ($ in billions)

12


Q4 2017

U.S. Metals & Materials M&A Announced Deal Volume

U.S. Industrials middle market deal multiples are at a seven-year high, while larger U.S. Industrials deal multiples are above the seven-year average

Recent activity in U.S. Metals & Materials M&A has been driven by middle market transactions

− Highlighted middle market transactions include:

Tailwind Capital’s acquisition of Smith Cooper International, Inc., announced November 18, 2017

Ichor Holdings’ acquisition of Talon Innovations Corporation, announced November 9, 2017

− U.S. deal volume increased slightly in 4Q 2017 from the prior quarter, and was similar on a Q-o-Q basis when compared to 4Q 2016

U.S. Metals & Materials middle market deal multiples have strengthened in 2017 from 2016 and remain in line with the seven-year average

U.S. M&A outlook for Metals & Materials remains strong

− With the expectation of incremental rate hikes in 2018, sellers are expected to capitalize on the current low interest rate environment before the remaining window of opportunity closes

− The public equity bull market continues to support overall M&A activity and elevated valuation multiples

− U.S. corporate cash balances remain at record levels, and are driving activity in strategic buyer M&A

U.S. Metals & Materials M&A Disclosed Deal Value ($ in billions)

U.S. Diversified Industrials M&A Announced Deal Average EV/EBITDA Multiple

Note: Middle Market defined as transactions with disclosed deal values less than $1 billion EV – Enterprise Value ND – No Transaction Values Disclosed NM – Not Meaningful Source: Fifth Third Securities, Bloomberg, PitchBook and S&P Capital IQ

M&A Trends Diversified Industrials and Metals & Materials Specific Activity

0

50

100

150

1Q20

10

2Q

201

0

3Q

201

0

4Q

201

0

1Q

201

1

2Q

201

1

3Q

201

1

4Q

201

1

1Q

201

2

2Q

201

2

3Q

201

2

4Q

201

2

1Q

201

3

2Q

201

3

3Q

201

3

4Q

201

3

1Q

201

4

2Q

201

4

3Q

201

4

4Q

201

4

1Q

201

5

2Q

201

5

3Q

201

5

4Q

201

5

1Q20

16

2Q

201

6

3Q

201

6

4Q

201

6

1Q

201

7

2Q

201

7

3Q

201

7

4Q

201

7

Total U.S. Metals & Materials Deal Volume

$0

$2

$4

$6

$8

$10

1Q

201

0

2Q

201

0

3Q

201

0

4Q

201

0

1Q

201

1

2Q

201

1

3Q

201

1

4Q

201

1

1Q

201

2

2Q

201

2

3Q

201

2

4Q

201

2

1Q

201

3

2Q20

13

3Q

201

3

4Q

201

3

1Q

201

4

2Q

201

4

3Q

201

4

4Q

201

4

1Q

201

5

2Q

201

5

3Q

201

5

4Q

201

5

1Q

201

6

2Q

201

6

3Q

201

6

4Q

201

6

1Q

201

7

2Q

201

7

3Q20

17

4Q

201

7

Middle Market >$1 Billion

8.3x 8.9x 8.7x 8.7x 8.9x 8.8x 8.3x9.5x

11.3x9.6x 10.1x 11.2x 12.0x 13.0x 13.2x 12.2x

0.0x

5.0x

10.0x

15.0x

20.0x

2010 2011 2012 2013 2014 2015 2016 2017

Middle Market >$1 Billion

13


Q4 2017

Metals & Materials ($ in millions)

M&A Trends Metals & Materials – Select Transaction Detail

Source: Company Filings, S&P Capital IQ, PitchBook

Transaction's

Date Enterprise Metals & Materials

Announced Acquirer Target Value Sub-Sector

Jan-18 Kian Capital Diamond Metals Distribution, Inc. - Processors/Distributors

Dec-17 Almacenadora Afirme, S.A. de C.V. Northwest Pipe Company; Manufacturing facility located Atchison, Kansas $37 Metal Forming & Machining

Dec-17 AC&A, LLC EnCore Composite Structures, Inc. - Metal Forming & Machining

Dec-17 Waybill USA Inc. North American Tubes Operations of Luvata Oy - Metal Forming & Machining

Dec-17 Wait Industries, LLC Voyager, Inc. - Mills & Specialty Metal

Dec-17 Norgren Inc Bimba Manufacturing Company, Inc. $198 Metal Forming & Machining

Dec-17 Hexcel Corporation (NYSE:HXL) Aerospace & Defense (A&D) Business Of Oxford Performance Materials Inc. - Metal Forming & Machining

Dec-17 Tronair, Inc. Malabar International Inc. - Metal Forming & Machining

Nov-17 Tailwind Capital Group, LLC Smith Cooper International, Inc. - Metal Forming & Machining

Nov-17 Indigenous Roots Corp. American Paramount Gold Corp. (OTCPK:APGA) - Natural Resources & Mining

Nov-17 Schuff Steel Company, Inc. Mountain States Steel, Inc. - Mills & Specialty Metal

Nov-17 Progress Rail Services Corporation Applied Ultrasonics LLC - Metal Forming & Machining

Nov-17 Samuel, Son & Co., Limited Main Steel, LLC - Mills & Specialty Metal

Nov-17 Arlington Capital Partners LP Cadence Aerospace, LLC - Metal Forming & Machining

Nov-17 Cleveland-Cliffs Inc. (NYSE:CLF) Empire Iron Mining Partnership $633 Natural Resources & Mining

Nov-17 Ichor Holdings, LLC Talon Innovations Corporation $130 Metal Forming & Machining

Nov-17 SA Recycling LLC Tennessee Valley Recycling, LLC - Scrap/Recycling

Nov-17 Management Buyout Gautier Steel Ltd. - Mills & Specialty Metal

Nov-17 Right Lane Industries LLC Pacific Press Technologies, Inc. - Metal Forming & Machining

Nov-17 Insteel Industries, Inc. (NasdaqGS:IIIN) Ortiz Engineered Products, Inc., Certain Assets - Mills & Specialty Metal

Nov-17 AC&A, LLC Applied Composites Engineering Inc. - Metal Forming & Machining

Nov-17 A.J. Oster, LLC Unimet Metal Supply Inc. $42 Processors/Distributors

Oct-17 Integrated Global Services, Inc. Cetek Limited - Metal Forming & Machining

Oct-17 Mearthane Products Corporation Elmco Tool Company - Mills & Specialty Metal

Oct-17 Heartland Equity Partners Ajax Metal Forming Solutions - Metal Forming & Machining

Oct-17 MavenHill Capital Connecticut Coining, Inc. - Metal Forming & Machining

Oct-17 Motion Industries, Inc. Apache Inc. - Metal Forming & Machining

Oct-17 Power Products, LLC Bergen Industries Inc. - Metal Forming & Machining

Oct-17 Van Sant Enterprises, Inc. C. Cook Enterprises, Inc., ProLine Metal Shaping Tools - Metal Forming & Machining

Oct-17 Diamond Manufacturing Company, Inc. Ferguson Perforating Company - Metal Forming & Machining

Oct-17 Treasure Investments Corp Bend Bronze, Inc. - Metal Forming & Machining

Oct-17 Cleveland-Cliffs Inc. (NYSE:CLF) Tilden Mining Company L.C. $700 Natural Resources & Mining

Oct-17 American Securities LLC MW Industries, Inc. - Metal Forming & Machining

Sep-17 Quadrant Management General Flange & Forge $3 Metal Forming & Machining

Sep-17 Santa Fe Gold Corporation (OTCPK:SFEG) Bullard's Peak Corporation and Black Hawk Consolidated Mines Company, Inc. $3 Natural Resources & Mining

Sep-17 Kencoa Aerospace LLC Heart of Georgia Metal Crafters, LLC - Metal Forming & Machining

Sep-17 Wolfden Resources Corporation (TSXV:WLF) Base-Metal Project In Penobscot County, Maine, USA $9 Natural Resources & Mining

Sep-17 Auxo Investment Partners Atlas Die LLC - Metal Forming & Machining

Aug-17 PHI Group Inc. (OTCPK:PHIL) Twenty-One Mining Claims in Granite Mining District, Grant County, Oregon $49 Natural Resources & Mining

Aug-17 Kadant Inc. (NYSE:KAI) UNAFLEX, LLC $31 Metal Forming & Machining

Aug-17 TCTM Financial FS LLC Wellman Dynamics Corporation $21 Metal Forming & Machining

Aug-17 New Hampshire Ball Bearings, Inc.; Development Bank of Japan Inc., Investment Arm C&A Tool Engineering, Inc. - Mills & Specialty Metal

Aug-17 Nucor Corporation (NYSE:NUE) St. Louis Cold Drawn, Inc. - Mills & Specialty Metal

Aug-17 Lippo China Resources Limited (SEHK:156); CCI U.S. Asset Holdings LLC CS Mining, LLC $35 Natural Resources & Mining

Aug-17 ConforMIS, Inc. (NasdaqGS:CFMS) Broad Peak Manufacturing LLC, Machining and Polishing Assets $7 Metal Forming & Machining

Aug-17 GenNx360 Capital Partners; Yukon Partners Management, LLC Tooling Technology Group, LLC - Metal Forming & Machining

Aug-17 Speyside Equity LLC Craftsman Custom Metals, LLC - Metal Forming & Machining

14


Q4 2017

U.S. Private Equity deal flow was down during the fourth quarter of 2017 on both a volume and deal value basis

Several factors may be fueling the reluctance to complete deals, with two of the biggest centering on price and quality

− Pricing pressures persist with median deal multiples remaining above 10.0x, and the number of viable targets is likely lower than normal following the record levels in 2015 and 2016 on both the strategic and PE sides

− Low yields and low returns on cash holdings may increase the pressure firms feel who want committed capital put to work

2017 was another strong year of fundraising for private equity firms, with dry powder for U.S. private equity firms climbing to $566 billion

The number of active private equity investors has decreased by 3.3% in 2017 when compared to 2016 Y-o-Y

− The number of firms “at risk” of being inactive has increased from 265 in 2017 from 184 in 2016

Metals & Materials private equity disclosed capital invested increased, while number of deals closed decreased in 2017 when compared to 2016 Y-o-Y

− 73 deals closed for a total disclosed value of $2.7 billion during fiscal year ended 2017

The number of private equity exits within Metals & Materials decreased in 2017 when compared to 2016 Y-o-Y, exhibiting a disclosed median deal size of $358 million

Overall U.S. Private Equity Deal Flow ($ in billions)

U.S. Metals & Materials Private Equity Deal Flow ($ in billions)

U.S. Metals & Materials Private Equity Exits ($ in millions)

*4Q17 preliminary PitchBook data ND – No Transaction Values Disclosed Source: Fifth Third Securities, PitchBook

Private Equity Activity Metals & Materials

7363

7871

89 9379

73$3.8

$2.8

$1.2

$1.0

$4.8

$3.8

$1.3 $2.7

2010 2011 2012 2013 2014 2015 2016 2017

# of Deals Closed Disclosed Capital Invested ($)

1013

17

1115

15

2320

$156

$980

$78 $18

$800

$275 $54

$358

2010 2011 2012 2013 2014 2015 2016 2017

# of Exits Disclosed Median Deal Size ($)

0

500

1,000

1,500

$0

$50

$100

$150

$200

$250

1Q

11

2Q11

3Q11

4Q

11

1Q

12

2Q

12

3Q

12

4Q

12

1Q

13

2Q

13

3Q

13

4Q

13

1Q

14

2Q

14

3Q

14

4Q

14

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q17

3Q17

4Q

17*

Deal Value ($) # of Deals Closed

15


Q4 2017

Note: This data represents the entire U.S. middle market (all industries) Note: The middle market is defined as deal size < $100 million and borrower sales < $500 million [1] Includes both non-sponsored and sponsored transactions; sufficient data not available for MM NR loans in 1Q15 and 1Q17 Source: Bloomberg, S&P Capital IQ LCD, and Thomson Reuters LPC

U.S. Middle Market Loan Market Trends

Loan Volume: Low Level of Supply Continues Yields Decline for Middle Market B-rated & Non-rated Issuers [1]

Middle Market Covenant-Lite Volume Declines in 3Q 2017 Leverage Multiples Remain Aggressive on Middle Market LBOs

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

Non-Sponsored Sponsored($ in billions)

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

MM B-rated MM NR

5.97%

5.90%

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

$7.0

MM Covenant-Lite Volume($ in billions)

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

1st Lien Debt to EBITDA Junior Debt to EBITDA

16


Q4 2017 Pro Rata Market Update: 3Q 2017 Bank Terms Remain Relatively Unchanged Over Prior Quarter

Structure

Banks reported that standards for C&I loans were essentially unchanged

over the past three months for loans to both large and middle market firms.

However, terms on C&I loans became less restrictive, on balance, with all

specific loan terms either easing or remaining materially similar.

Specifically, a significant net percentage of banks reportedly narrowed

spreads of loan rates over the cost of funds, while a moderate net share of

banks reportedly increased the maximum size of credit lines and decreased

the use of interest rate floors for large and middle market firms

Observations from Fifth Third’s syndicated pro rata loan database:

− Financial Covenants – single covenant deals became slightly more

prevalent through LTM Q3 2017 representing just over 20% of

transactions, with two covenant deals remaining most common,

typically consisting of a maximum leverage and minimum interest or

fixed charge coverage ratio

− Tenors – static at 5 years, co-terminus revolver and term loans.

− Amortization – no discernable market-driven movement, with a

standard 5yr tenor term loan amortizing anywhere between 25-75%,

with ~30-35% amortization being most common

Pricing

While pricing in the pro rata market is highly subjective depending upon

banking relationships and ancillary business, respondents to the Fed Survey

have now reported net pricing reductions for 30 consecutive quarters

In-line with Fed Survey responses, Fifth Third’s pro rata loan database

displayed a 28 bps drop of YoY spread for the 3Q17 vs. 3Q16 period,

bringing the average drawn spread down to L+186

With many pricing grids reaching levels below L+200, pricing levels are

approaching similar levels to investment grade and asset based loans,

suggesting little runway left for further pricing concessions in the pro rata

market

Source: Fifth Third Securities, Federal Reserve Board

Note: based on forward-looking nature of questionnaire, results displayed are from the first month of each respective calendar quarter (e.g. Jul-17 survey shown as proxy for 3Q17)

Average Pro Rata Pricing at Close by Market Segment (as of 3Q17)

LTM 3Q17 Synthetic Leverage Grid for Pro Rata Executions

126 149 162

193 221

240 256

298 322 334

355

L+0

L+50

L+100

L+150

L+200

L+250

L+300

L+350

L+400

Observation: Closing leverage determines ~97% (R2) of the variations in pricing; every 0.5x turn of leverage costs ~25bps (slope)

392420 410

429

275247

269293

186214

192211

L + 0

L + 50

L + 100

L + 150

L + 200

L + 250

L + 300

L + 350

L + 400

L + 450

L + 500

Current Prior Yr. Current Prior Yr.

Trailing 3M Trailing 12M

Middle Market Sponsored Middle Market Non-Sponsored Pro Rata/Bank-Only

17


Q4 2017

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Gen. Corp. Purp. Amend & Extends DIP/Exit Fin. M&A Other

Asset Based Lending Market Update

ABL Volume and Deal Count ($ billions)

ABL Average Pro Rata Pricing

Source: Thomson Reuters LPC

3Q 2017: ABL Market Commentary

ABL issuance volumes totaled $23.9 billion in 3Q17, a 14% increase from 3Q16 and a 9% decrease from prior quarter volumes, respectively. YTD volumes totaled $69.7 billion, representing a 15% increase over the prior year period

While total volumes for the year may fall short of record setting levels in 2011 ($101.0 billion), full year 2017 ABL volumes are on track to exceed $85.0 - $90.0 billion

YTD new money deal flow totaled $17.7 billion, or 25% of YTD volumes. Issuance continued to consist primarily of refinancing activity with general corporate purposes being the primary use of proceeds. M&A lending was limited to 10% of YTD volumes

Deal size continued to skew towards the smaller end of the market (sub $250.0 million) as refinancings and add-ons dominated. Larger sized credits north of $500.0 million were heavily weighted towards repricings and opportunistic refinancings, with a handful of acquisition financings also completed

Clubby deals under $150.0 million made up 49% of YTD volumes, while deals ≥ $500.0 million represented 15%

ABL spreads continue to remain low with average drawn pricing at 167 bps and average undrawn pricing at 32 bps

90% of deals ≥ $75 million in size were priced (drawn pricing) below 250 bps, of which 49% were priced between 150-199 bps and 21% were priced below 150 bps

ABL Deal Purpose Dispersion

L+0

L+100

L+200

L+300

Drawn Undrawn

0

20

40

60

80

100

120

$0

$5

$10

$15

$20

$25

$30

$35

Volume Deal Count

18


Q4 2017

Economic Dashboard

Industrial Production Index Capital Goods Orders Housing Starts

Source: Board of Governors of the Federal Reserve System

($ in billions)

Source: United States Census Bureau

National Unemployment Rate Real GDP Growth Additions to Non-Farm Payrolls

Housing Starts

Source: Bureau of Economic Analysis Source: Bureau of Labor Statistics Source: Bureau of Labor Statistics

Source: United States Census Bureau

(in thousands of employees)

(in thousands of units)

$200

$225

$250

$275

96

102

108

114

2.3%2.0%

2.6%

2.0%

0.9% 0.8%1.4%

3.5%

2.1%

1.4%

2.6%3.0%

4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q

'15 '16 '170

100

200

300

400

750

850

950

1,050

1,150

1,250

1,350

4.0%

5.0%

6.0%

19


Q4 2017 Notes & Definitions

S&P 500 Index- A broad index that includes American Companies. EBITDA- A company's earnings before interest, taxes, depreciation, and amortization, is an accounting measure calculated using a company's net earnings, before interest expenses, taxes, depreciation and amortization are subtracted, as a proxy for a company's current operating profitability. Dry Powder- Refers to cash reserves kept on hand to cover future obligations or to purchase assets. GDP- Gross domestic product is the market value of the goods and services produced by labor and property located in the United States Consumer Sentiment Index- The University of Michigan Consumer Sentiment Index is a consumer confidence index published monthly by the University of Michigan. The index is normalized to have a value of 100 in December 1964 National Unemployment Rate- the percentage of the total labor force that is unemployed but actively seeking employment and willing to work. Non-Farm Payroll- Nonfarm payroll employment is a compiled name for goods, construction and manufacturing companies in the US. It does not include farm workers, private household employees, non-profit organization employees, or government employees . It is an economic indicator released monthly by the United States Department of Labor as part of a comprehensive report on the state of the labor market. Housing Starts- are the number of new residential construction projects that have begun during any particular month. The Economist- offers authoritative insight and opinion on international news, politics, business, finance, science, technology and the connections between them LBO -- leveraged buyout (LBO) is the acquisition of another company using a significant amount of borrowed money to meet the cost of acquisition. The assets of the company being acquired are often used as collateral for the loans, along with the assets of the acquiring company. Industrial Production Index (IPI)- is an economic indicator published by the Federal Reserve Board of the United States that measures the real production output of manufacturing, mining, and utilities Capital Goods Orders. Covenant-lite loans- means that debt is being issued, both personally and commercially, to borrowers with less restrictions on collateral, payment terms, and level of income. IRR-Internal Rate of Return.

About Fifth Third Capital Markets

Fifth Third Capital Markets is the marketing name under which Fifth Third Bank and its subsidiary, Fifth Third Securities, Inc., provide certain securities and investment banking products and services. Banking products and services are offered by Fifth Third Bank. Securities products and services are offered by licensed securities representatives of Fifth Third Securities, Inc., who may be employees of Fifth Third Bank. Important notice This document has been prepared by Fifth Third Bank (“Fifth Third”) or one of its subsidiaries for the sole purpose of providing a proposal to the parties to whom it is addressed in order that they may evaluate the capabilities of Fifth Third to supply the proposed services. It is not intended to provide specific investment advice or investment recommendations and does not constitute either a commitment to enter into a specific transaction or an offer or solicitation, with respect to the purchase or sale of any security. The information contained in this document has been compiled by Fifth Third and includes material which may have been obtained from information provided by various sources and discussions with management but has not been verified or audited. This document also contains confidential material proprietary to Fifth Third. Except in the general context of evaluating our capabilities, no reliance may be placed for any purposes whatsoever on the contents of this document or on its completeness. No representation or warranty, express or implied, is given and no responsibility or liability is or will be accepted by or on behalf of Fifth Third or by any of its subsidiaries, members, employees, agents or any other person as to the accuracy, completeness or correctness of the information contained in this document or any other oral information made available and any such liability is expressly disclaimed. This document and its contents are confidential and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person in whole or in part without our prior written consent. Past performance is No Guarantee of Future Results. Fifth Third Capital Markets is a wholly owned subsidiary of Fifth Third Bank offering investment banking++, debt capital markets+, bond capital markets++, equity capital markets++, financial risk management+, and fixed income sales and trading++. Fifth Third Bank provides access to investments and investment services through various subsidiaries, including Fifth Third Securities. Fifth Third Securities is the trade name used by Fifth Third Securities, Inc., member FINRA/SIPC, a registered broker-dealer and registered investment advisor registered with the U.S. Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training. Securities and investments offered through Fifth Third Securities, Inc. and insurance products: + Services and activities offered through Fifth Third Bank ++ Services and activities offered through Fifth Third Securities, Inc © Fifth Third Bank 2018

20

Are Not FDIC Insured Offer No Bank Guarantee May Lose Value

Are Not Insured By Any Federal Government Agency Are Not A Deposit

Documents

Investment Banking I Industry Spotlight Coverage Bill Tyson Co-Head Capital Markets [email protected] Materials Jeff Thieman Managing Director [email protected] Diversified Industrials