EFTA01371107

31 October 2017 Railroads Canadian Rails yoy in Canada and +6.3% in the U.S. We note that any moderation in rig count growth would pose a risk to industrial activity in the U.S. given their 88% correlation and likely puts pressure on energy related carload demand. We note that these rig count forecasts are largely dependent on oil prices staying relatively stable and lower prices would present additional risks to the current environment. Figure 68! De's Oil Services team forecasts 6% growth in rig count in 2018 UMW 988% C.1 0 recto,: ler 427 313 3M 469 313 699 746 1361 391 688 744 693 r rectne re. 108 as 441 174 141 170 1 98 168 167 Total 313. iond rip 097 4* Mb 121 878 ICS CO es 5630.4•44/8/6 12061 06%) 23% 27% 21% 4% WIN 75% 6% Gu0.9 Mean 26 23 72 20 21 21 21 1 22 21 21 839344 166 43 121 as 117 306 366 IM 120 s. 78 6116 '6% iiS 34 5% r Sans Puna. an At Sensids reset* Ms* 0221 Miren22 • Metallic Ores & Metals - Metallic ores & metals account for about 11% of total carload traffic (ex-intermodal) in North America - 17% in Canada and 9% in the U.S. The business is made up of metallic ores, coke, metals/metal products, and iron/steel and is generally driven by overall industrial activity with specific exposure to the oil and gas, construction and auto industries. The business has fluctuated with the swings in oil and gas production in recent years though has rebounded lately with volumes up roughly 12% ytd after declining 14% and 5% in 2015 and 2016, respectively. Additionally, the USD can impact global metals demand and recent weakness is likely supporting growth for the business due to increased demand for exports. Figure 69: Metallic outs & Metals carload Vends (U.S. + Can) since 2012 50,000 30% 45,000 -o 40' 000 3 T.>: 35,000 30,000 25,000 20,000 IN IV IV IV ell I, O 99 ' am 883 to ID 1.1) N N 6. c A A ri t A c i >. 6. 39 6. eli ue AZe „i 2 f t ? 2 ; 2 yyj i 2 Avg. Weekly Carloads —YoY A Sent dunds• Bark AAR 20% 1 0 % (30%) (4016) • Forest products - Forest products account for roughly 5% of total carload traffic (ex-intermodal) in North America - 11% in Canada and 4% in the U.S. The business is largely comprised of lumber, paper, Deutsche Bank Securities Inc Page 33 CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0064303 CONFIDENTIAL SDNY_GM_00210487 EFTA01371107