From: GIO Group JP Morgan

From: GIO Group JP Morgan To: Undisclosed recipients:; Subject: GIO Trade Alert: Shipping Containers Date: Fri, 18 Feb 2011 20:38:20 +0000 Attachments: imagc003.emz; image004.emz; GIO_Tradc_Alert_2011.02.18_(Shipping_Containers).pdf Milne-Images: image007.png; image008.png; image009.png Global Investment Opportunities Group (GIO) Opportunistic Investments February 18, 2011 !Morgan Jeanne Sun (212) 622-2646 panne h suniftrnixgan corn SHIPPING CONTAINERS We believe the shipping container space offers an attractive opportunity given the industry's strong demand and supply dynamics. While Baltic Dry has been weak due to oversupply of ships, global trade remains strong with robust demand for end goods: US retail sales have recovered nicely and are growing at a 5-7% pace since mid-2010 and there are similar trends in capital goods orders. This has led to a sharp recovery in demand for shipping containers as evidenced by the 97% utilization rates for the industry. Furthermore, container supply remains tight as orders for and production of new containers came to a halt through the downturn and production has been slow to ramp up. This year, container sup* is only expected to increase 6% versus a replacement rate of typically 8% and companies still have to make up for the dearth of new container production in 2010. Not helping sup* is an increase in slow steaming. a reduction in travel speeds to save on fuel, which is keeping containers at sea for longer. These market dynamics are gamering more attention in the news as GE recently announced they are looking to sell their GE SeaCo container leasing business, taking advantage of increased interest in the space from both financial and strategic buyers. These leasing companies have healthy asset bases which are benefiting from high commodity prices and tend to pay healthy dividends of 3.5%. As fundamentals are not expected to change soon, we believe valuations will remain supported in the container space over the near and medium term. Please call your Morgan representative to discuss investment strategies. Mb project for demand growth to outweigh supply chg Vol 15% -15% 2007 2008 2009 2010 2011 2012 — Container shipping demand growth — Container shipping supply growth ..., .... It. .... . % Source: ■ Morgan IMPORTANT INFORMATION This presentation and the material contained herein is not a product of the a Morgan Research Department and is not a research report although a may refer to a research report or research analyst. This presentation should be reviewed m conjunction with U.S. research published by I. Morgan Securities. Inc. to the extent that such research exists. The op ts and ideas expressed herein do not take into account indondual Client circumstances. objectives and needs. Transactions in any securities that may be referenced herein may not be suitable for all investors. This presentation NIS been prepared for information purposes only. Nothing n this material is mended to be a solicaatcn for any petduct or service offered by Morgan's Private Sank or any of its affiliates. Information contained herein has been obtained from sources believed to be reliable but we do not guarantee its accuracy or completeness and accept no responsibility for any direct or consequential losses arising from its use. The views and strategies described herein may not be suitable for all investors. This information is not intended as an offer or solicitation for the purchase or sale of any financial nstrument and is being provided merely to illustrate a particular investment strategy. Container utfization is reaching maximum capacity 100% 95% 90% i 4dIP 85% 80% 75% 2006 2007 2008 —BOX —TAL —CAP 2010 —TGH Past performance Is no guarantee of future results. Source: Company reports Investment Products: Not FDIC Insured - No Bank Guarantee - May Lose Value EFTA01157306 This email is confidential and subject to important disclaimers and conditions including on offers for the purchase or sale of securities, accurac and corn .leteness of information, viruses, confidentiality, legal privilege, and legal entity disclaimers, available at EFTA01157307