RBC

Mid-Market M&A

Transportation Sector Update

June 2020
Table of Contents

1 Introduction
Table of Contents

2 Current Market Events And Economic Statistics

3 Valuation Trends & Precedent Transactions

4 Appendix A – Overview of RBC’s M&A Capabilities

RBC MID-MARKET M&A | 1

Introduction
Section 1
Introduction
Situation Overview

 The economic landscape and financial markets have gone through a significant change with COVID-19 having a
material impact on our lives and businesses in the near term
 Many business owners are looking for answers as to what are the interim impacts of the virus on business values,
Situational Overview
lending, the overall M&A market and their own unique situation
 The heightened anxiety around the virus is affecting Canada and many of the clients we serve in unprecedented
ways - RBC Mid-Market M&A (“RBC M&A”) remains focused on helping you navigate this extraordinary situation

 This presentation is meant to provide an overview of the current market situation and the impacts we are seeing in
the Transportation and Logistics industry. The document includes relevant macro and transportation and logistics
Update Overview market information, valuation statistics, and commentary for various subsectors, including:
‒ Trucking, Logistics, Airfreight, Railroads, and OceanFreight

 RBC M&A provides capital market advisory services to mid-sized companies in Canada
 RBC M&A has 6 offices across Canada and 30 professionals serving the needs of our clients
 RBC is a global financial institution with capabilities, platforms and professionals in Canada, the United States, the
United Kingdom, Europe and Asia
 RBC is the #1 ranked M&A advisor in Canada and the #2 middle market advisor in North America

RBC MID-MARKET M&A | 3

Current Market Events and Economic Statistics
Section 2
Macro Economic Environment
Commentary % Change Quarter-over-Quarter in Real GDP(1)

 The global macro economic environment has been significantly impacted by

the COVID-19 pandemic, resulting in lockdowns across the world 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21
45%
35.0%
 The pressure on the economy has been widespread with services sector 35%
being impacted by a demand shock as physical distancing keeps consumers
and employees at home 25%
15% 9.0%
 The physical distancing measures are resulting in an economic decline, which 5.0% 4.0% 4.0% 4.0%
has translated into discounted prices for a variety of products 5% 1.0% 3.4% 1.1% 0.3%

 The impact on labour markets is expected to be significant as companies -5%

implement measures to save on costs, including furloughing employees -15% (10.0%)
 Unemployment rate is forecasted to reach 12% in 2Q2020 -25%
 It is expected that as the virus is brought under control and physical -35%
distancing measures ease, so will the economic drag
-45% (40.0%)
 The Bank of Canada and governments have been quick to respond to the
crisis by unveiling a wide range of policies to support companies and their
Canadian Unemployment Rate(1)
employees manage through this crisis. It is expected that as long as
businesses can weather the near-term economic impact, there would be a
potential for a return to work for laid-off employees relatively quickly in certain
sectors
12.0%
Canadian Prime Rate (%)(2)

4.5 9.5%
8.5%
8.1%
7.7% 7.4%
4.0 7.0%
6.3%
3.5

3.0

2.5
1Q2020 2Q2020 3Q2020 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021

2.0 Actual Forecast

Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20

COVID-19 has resulted in a challenging economic environment and an uncertain outlook

(1) RBC Economics (2) Capital IQ
RBC MID-MARKET M&A | 5
COVID-19 Impact on the Transportation & Logistics Sector

Implications(1,2,3) Value / EBITDA Multiples(4)

 Transportation & Logistics is an essential part of the

16x S&P 500 S&P 500 Transportation (Industry Group)
economy, connecting businesses and consumers to all
types of products
Overview  Companies that take steps to achieve extra financial 14x
flexibility, reduce cost via operational improvements and
have the resources to react quickly when the economy
ramps up will be best positioned to meet demand 12x

10x
 EBITDA multiples since the beginning of 2020 have
contracted 6.0% as at the close of May 26th, compared
to 4.2% for the S&P 500 Index 8x

 Maintaining operations has presented challenges to

industry operators including protecting driver safety, 6x
changing supply chains dynamics and protecting liquidity Jan-20 Feb-20 Mar-20 Apr-20 May-20
 The age of most truck drivers put them in an age
group that is at a greater risk of experiencing
Market complications from COVID-19. Anecdotal reports North American Transportation & Logistics Transaction Volumes(4)
Observations indicate that drivers are leaving jobs due to the risk
of the virus, which could tighten labour supply in a 14
2019 2020
market facing significant driver shortage in the future
12
 E-commerce continues to grow rapidly during the
pandemic putting pressure on shippers to provide 10
faster service in order to reduce delivery wait times
8
 Industry players are carefully evaluating long-term
capital investment programs in light of decreased 6
revenues and profitability in order to protect liquidity
4

2
 North American weekly M&A activity in 2020 was
consistently ahead of 2019 levels until the final week of 0
March, when activity rapidly decelerated
M&A Activity
 Since the end of March there have been 14 announced
or closed transactions in North America, however activity
appears to have picked up in the most recent week

(1) McKinsey: Resilience in transport and logistics (Feb-20) (4) Capital IQ

(2) Deloitte: Understanding the sector impact of COVID-19 – Transportation Organizations RBC MID-MARKET M&A | 6
(3) Truck News: How will COVID-19 affect truck driver demand?
Valuation Trends & Precedent Transactions
Section 3
Public Market Valuations
Only the Airfreight subsector within the Transportation Market has Fared Positively Amidst the COVID-19 Pandemic

 The current market has undergone a shock as indices declined at an unprecedented rate. This, combined with consumption declines, supply chain disruptions and
physical distancing protocols have created a ripple affect across industries and impacted market valuations of transportation and logistics companies
 Share prices have declined across almost all subsectors of the Transportation industry, with significant variation to the extent of the decline:
‒ Specialized ocean freight shippers were the most affected, with index values declining by more than 43% followed by major players in the Canadian
Transportation and Logistics sectors and parcel and courier carriers
‒ Airfreight providers have seen an uptick in demand for services, which has translated to an increase in the index value by over 16% as customers require
timely shipping, especially for medical supply products in the current environment
Public Company Share Price Performance by Subsector(1)

16.1% Airfreight

-1.0% TL

-1.5% Ocean Freight - Diversified

-3.5% LTL

-4.8% Railroads

-10.2% Logistics

-18.2% Parcel & Courier

-18.9% Canadian Transportation & Logistics

-43.2% Ocean Freight - Specialized

-50.0% -40.0% -30.0% -20.0% -10.0% 0.0% 10.0% 20.0%

Sources: Capital IQ

(1) Share price change between January 1st, 2020 and May 26th, 2020 RBC MID-MARKET M&A | 8
Canadian Transportation & Logistics
Valuation and Recent Market Statistics
Share % Change Market Latest 12 Months Net Debt/ Multiple of Latest 12 Months of
(1) (2) EBITDA
Company Name Price 52 Week Cap. Value Revenue EBITDA EBITDA Revenue EBITDA EBIT
%
TFI International Inc. (TSX:TFII) $ 37.63 -22% 3,279 5,142 5,189 749 14% 2.5x 1.0x 6.9x 11.2x
Mullen Group Ltd. (TSX:MTL) $ 5.59 -47% 580 1,140 1,277 190 15% 2.9x 0.9x 6.0x 12.7x
Titanium Transportation Group Inc. (TSXV:TTR) $ 1.16 -33% 42 112 172 14 8% 5.0x 0.6x 8.0x 22.3x
Adjusted Mean 12% 3.5x 0.8x 7.0x 12.0x

Value as a Multiple of Latest 12 Months EBITDA* Latest Operating Margin (%) Performance

20x S&P 500 Canadian Transportation & Logistics 8.8%

7.9%
15x Mean: 6.6%

10x
2.9%
5x

0x
Jan-2020 Feb-2020 Mar-2020 Apr-2020 May-2020 TFII MTL TTR

*Calculated using weighted average of market capitalization

Notable Developments(3,4,5)
 Trucking HR Canada and the Conference Board of Canada project the Canadian Transportation and Logistics sector could be short 25,000 drivers by 2023,
representing a 25% increase from the unfiled job vacancy rate in 2019
 COVID-19 is suspected to be contributing to the driver shortage, as retirements increase amid health concerns and driver ages making them more vulnerable
 Major Canadian Transportation and Logistics players are bracing for a challenging Q2, with reports from:
 TFI stating that it would be cutting non-committed capex and pausing its buyback and M&A plans temporarily in order to preserve liquidity
 MTL withdrew its 2020 full year guidance citing increased uncertainty and emphasized focus on protecting workforce and reducing labour to match
demand
Source: Capital IQ, Figures presented $MM CAD
(1) May 12th, 2020 (4) RBC Equity Research – Mullen Group Ltd. (Apr-20)
(2) Value: Total enterprise value (Equity plus net debt) (5) RBC Equity Research – TFI International Inc. (Apr-20) RBC MID-MARKET M&A | 9
(3) Truck News: How will COVID-19 affect truck driver demand?
Less-than-Truckload (“LTL”)
Valuation and Recent Market Statistics
Share % Change Market Latest 12 Months Net Debt/ Multiple of Latest 12 Months of
(1) (2) EBITDA
Company Name Price 52 Week Cap. Value Revenue EBITDA EBITDA Revenue EBITDA EBIT
%
Old Dominion Freight Line, Inc. (NasdaqGS:ODFL) $ 155.75 -1% 18,370 18,059 4,106 1,080 26% 0.0x 4.4x 16.7x 21.9x
Saia, Inc. (NasdaqGS:SAIA) $ 99.50 -7% 2,567 2,880 1,823 289 16% 1.1x 1.6x 10.1x 17.9x
YRC Worldwide Inc. (NasdaqGS:YRCW) $ 1.48 -74% 57 1,179 4,839 168 3% 6.4x 0.2x 7.0x 58.7x
ArcBest Corporation (NasdaqGS:ARCB) $ 21.01 -35% 531 611 2,978 190 6% 0.4x 0.2x 3.2x 8.1x
Adjusted Mean 9% 0.5x 0.7x 6.8x 16.0x

Value as a Multiple of Latest 12 Months EBITDA* Latest Operating Margin (%) Performance

20x S&P 500 LTL

20.3%
15x

10x
8.8%
Mean: 8.0%
5x
2.7%
0.2%
0x
Jan-2020 Feb-2020 Mar-2020 Apr-2020 May-2020 ODFL SAIA YRCW ARCB

*Calculated using weighted average of market capitalization

Notable Developments(3,4,5)
 In general, LTL service providers were negatively impacted by COVID-19 as volumes declined due to mandatory business closures
 Despite immediate volumes declines, LTL providers are optimistic that changing consumer trends could create opportunity for there services, specifically the
growth in e-commerce and need of major players to make more frequent, smaller shipments to distribution centers that are closer to the end customer
 The industry’s largest player, Old Dominion Freight Line (“ODFL”), announced the approval by its board of directors of a new two-year stock repurchase
program authorizing the repurchase of up to $700 million of its outstanding common stock
 YRC Worldwide (“YRCW”) communicated that the severity of the impact to the economy from COVID-19 required management to take immediate liquidity
preservation actions including negotiating a covenant amendment with its term loan lenders, furloughing staff and eliminating bonuses and pay increases

Source: Capital IQ, Figures presented $MM CAD

(1) May 11th, 2020 (4) Old Dominion Freight Line Announces New $700 Million Stock Repurchase
(2) Value: Total enterprise value (Equity plus net debt) Program (May-20) R B C M I D - M A R K E T M & A | 10
(3) SCD: Old Dominion Knows its Business is About More Than Freight Delivery (May-20) (5) YRC Worldwide Reports First Quarter 2020 Results (May-20)
Truckload (“TL”)
Valuation and Recent Market Statistics
Share % Change Market Latest 12 Months Net Debt/ Multiple of Latest 12 Months of
(1) (2) EBITDA
Company Name Price 52 Week Cap. Value Revenue EBITDA EBITDA Revenue EBITDA EBIT
%
XPO Logistics, Inc. (NYSE:XPO) $ 91.32 -35% 8,322 18,510 23,077 2,195 10% 4.5x 0.8x 8.4x 16.0x
J.B. Hunt Transport Services, Inc. (NasdaqGS:JBHT) $ 140.53 -18% 14,820 16,769 13,172 1,782 14% 1.1x 1.3x 9.4x 15.7x
Knight-Swift Transportation Holdings Inc. (NYSE:KNX) $ 53.3 -6% 9,051 10,395 6,707 1,270 19% 1.1x 1.5x 8.2x 17.2x
Schneider National, Inc. (NYSE:SNDR) $ 30.41 -11% 5,389 4,948 6,577 897 14% 0.0x 0.8x 5.5x 10.1x
Werner Enterprises, Inc. (NasdaqGS:WERN) $ 59.01 -7% 4,077 4,344 3,464 631 18% 0.4x 1.3x 6.9x 16.2x
Heartland Express, Inc. (NasdaqGS:HTLD) $ 27.72 -13% 2,255 2,165 878 238 27% 0.0x 2.5x 9.1x 24.0x
Marten Transport, Ltd. (NasdaqGS:MRTN) $ 34.32 -5% 1,883 1,834 1,215 234 19% 0.0x 1.5x 7.8x 19.1x
Daseke, Inc. (NasdaqCM:DSKE) $ 2.25 -71% 146 1,215 2,386 204 9% 4.8x 0.5x 6.0x 107.5x
Covenant Transportation Group, Inc. (NasdaqGS:CVTI) $ 11.77 -55% 201 630 1,259 136 11% 3.2x 0.5x 4.6x 27.9x
USA Truck, Inc. (NasdaqGS:USAK) $ 5.98 -70% 50 326 726 50 7% 5.6x 0.4x 6.6x NM
Adjusted Mean 13% 1.7x 1.0x 7.3x 18.3x

Value as a Multiple of Latest 12 Months EBITDA* Latest Operating Margin (%) Performance

20x 10.3%
S&P 500 TL
8.7% 9.1%
15x 7.9% 7.9%
6.6%
Mean: 5.8%
10x 4.9%

3.0%
5x
0.5%
0x
Jan-2020 Feb-2020 Mar-2020 Apr-2020 May-2020
-0.6%
*Calculated using weighted average of market capitalization XPO JBHT KNX SNDR WERN HTLD MRTN DSKE CVTI USAK

Notable Developments(3,4,5)
 XPO Logistics (“XPO”) announced the issuance of $300 million in 6.25% Senior Notes due in 2025, which will be used by XPO for general corporate purposes
and to repay amounts outstanding under its existing revolving credit facility
 J.B. Hunt Transport Services (“JBHT”) launched a new electronic bill of lading (eBOL) feature that allows businesses and carriers to digitally sign BOLs,
reducing contact during the delivery process and protecting the safety of its truck drivers and onsite personal at customer locations
 Covenant Transportation Group (“CVTI”) withdrew its previous 2020 guidance and does not expect to provide earnings or similar expectations for the
foreseeable future due to a challenging volume and pricing environment created by COVID-19
Source: Capital IQ, Figures presented $MM CAD
(1) May 12th, 2020 (4) Business Wire: J.B. Hunt Launches New Electronic Bill of Lading Feature to
(2) Value: Total enterprise value (Equity plus net debt) Support Social Distancing During Deliveries (May-2020) R B C M I D - M A R K E T M & A | 11
(3) XPO Logistics Announces Pricing of Private Offering of $300 Million of Senior Notes (May-2020) (5) Covenant Transportation Group Announces First Quarter Financial and
Operating Results (May-2020)
Significant M&A Transactions
Diversified Ground Transportation Providers
Value Drivers  A number of factors impact the transaction multiples below, including: (1) Size (2) Business model and diversification (3) Growth outlook (4)
Competitive sale process dynamics (5) Additional strategic interests/synergies.
Selected Transactions

Value TEV/ TEV/

Date Target Buyer Description
(MM) Revenue EBITDA

Coast Transport, Inc.

May-20 PS Logistics, LLC - - - Comprises truck transportation services
Certain Assets

Stagecoach Cartage and Offers TL, LTL, local cartage, warehousing, and transloading
Apr-20 J.H. Rose Logistics, LLC - - -
Distribution, LLC services

Mar-20 Volunteer Express, Inc. Central Freight Lines, Inc. - - - Offers expedited LTL and TL freight services

Feb-20 Penner International Inc. C.A.T. Inc. - - - Provides TL and transborder shipping services

Nolan Transportation Offers TL, LTL, intermodal, drayage, and transportation

Jan-20 Eagle Transportation LLC - - -
Group, LLC management services

Dec-19 G&P Trucking Company, Inc. NFI Industries, Inc. - - - Provides TL freight and logistics services

TFI International Inc.

Oct-19 Craler Inc. - - - Provides TL, LTL, dedicated transport and logistics services
(TSX:TFII)

Heartland Express, Inc. -

Aug-19 Millis Transfer, Inc. $207 1.0x Provides dry-van TL carrier services
(NasdaqGS:HTLD)

TFI International Inc. Provides transportation services of over-sized and over-

Mar-19 Double-D Transport Inc. - - -
(TSX:TFII) dimensional freight

Source: Capital IQ

R B C M I D - M A R K E T M & A | 12
Parcel & Courier
Valuation and Recent Market Statistics
Share % Change Market Latest 12 Months
Net Debt/ Multiple of Latest 12 Months of
(1) (2) EBITDA
Company Name Price 52 Week Cap. Value Revenue EBITDA EBITDA Revenue EBITDA EBIT
%
United Parcel Service, Inc. (NYSE:UPS) $ 135.18 -23% 116,551 147,521 104,782 10,779 10% 2.9x 1.4x 13.7x 20.0x
FedEx Corporation (NYSE:FDX) $ 163.53 -34% 42,722 86,994 97,370 5,617 6% 7.9x 0.9x 15.5x 133.9x
Adjusted Mean 8% 2.9x 1.2x 14.6x 19.0x

Value as a Multiple of Latest 12 Months EBITDA* Significant M&A Transactions

20x S&P 500 Parcel & Courier Value

Date Target Buyer
(C$MM)
15x R. R. Donnelley &
TFI International Inc.
Mar-20 Sons Company -
(TSX:TFII)
Courier Services Business
10x
Mar-20 NAL Group, Inc. CRST International, Inc. -
5x
Jan-20 RDI Last Mile Co. J.B. Hunt Transport, Inc. -
0x
Jan-20 Feb-20 Mar-20 Apr-20 May-20

*Calculated using weighted average of market capitalization

Notable Developments(3,4)
 United Parcel Service (“UPS”) reported a 13% decline in first-quarter profit as higher costs and declines in business deliveries outweighed increased deliveries
to consumers homes resulting from stay-at-home orders. UPS noted that 70% of its volumes in the U.S. have been directed towards the business’ less
profitable residential deliveries, which are more costly to operate due to greater distances between stops
 FedEx (“FDX”) announced a partnership with Microsoft in order to provide commercial customers with early warnings of delays from weather and traffic as it
continues to implement initiatives aimed at positioning the business as a logistics alternative to Amazon for small and large retailers.
 With supply chain disruptions and uncertainty created by COVID-19, these tools developed to provide visibility into supply chain efficiency are
increasingly valuable to customers concentrated on remaining open and being competitive

Source: Capital IQ, Figures presented $MM CAD

(1) May 25th, 2020 (4) Bloomberg: FedEx, Microsoft Join Forces Against Amazon for Package
(2) Value: Total enterprise value (Equity plus net debt) Shipping (May-2020) R B C M I D - M A R K E T M & A | 13
(3) BNN: UPS profit misses as stay-at-home orders fail to offset business deliveries drop (Apr-2020)
Logistics
Valuation and Recent Market Statistics
Share % Change Market Latest 12 Months Net Debt/ Multiple of Latest 12 Months of
(1) (2) EBITDA
Company Name Price 52 Week Cap. Value Revenue EBITDA EBITDA Revenue EBITDA EBIT
%
Expeditors International of Washington, Inc. (NasdaqGS:EXPD) $ 103.19 -10% 17,174 16,143 11,343 1,110 10% 0.0x 1.4x 14.5x 15.5x
C.H. Robinson Worldwide, Inc. (NasdaqGS:CHRW) $ 101.07 -21% 13,604 15,682 21,628 1,067 5% 1.9x 0.7x 14.7x 16.5x
Landstar System, Inc. (NasdaqGS:LSTR) $ 145.90 -14% 5,598 5,499 5,609 444 8% 0.0x 1.0x 12.4x 14.4x
Hub Group, Inc. (NasdaqGS:HUBG) $ 57.02 -33% 1,949 2,148 5,031 360 7% 0.6x 0.4x 6.0x 11.2x
Forward Air Corporation (NasdaqGS:FWRD) $ 60.37 -41% 1,689 2,017 2,015 206 10% 1.6x 1.0x 9.8x 13.5x
Universal Logistics Holdings, Inc. (NasdaqGS:ULH) $ 17.23 -55% 468 1,122 2,135 231 11% 2.8x 0.5x 4.9x 9.1x
Echo Global Logistics, Inc. (NasdaqGS:ECHO) $ 21.62 -37% 576 808 3,094 67 2% 3.5x 0.3x 12.1x 21.5x
Adjusted Mean 9% 1.5x 0.8x 11.6x 15.4x

Value as a Multiple of Latest 12 Months EBITDA* Significant M&A Transactions

20x S&P 500 Logistics Value

Date Target Buyer
(C$MM)
15x
Mar-20 Rotra LLC Delmar International Inc. -

10x C.H. Robinson

Prime Distribution
Jan-20 Worldwide, Inc. 294
Services, Inc.
(NasdaqGS:CHRW)
5x
Dec-19 SunteckTTS MODE Transportation, LLC -
0x
Jan-20 Feb-20 Mar-20 Apr-20 May-20

*Calculated using weighted average of market capitalization

Notable Developments(3,4,5)
 The asset-light, adaptable cost structures of logistics service providers puts the sector in a strong position to continue to weather the evolving situation
 Prior to COVID-19, the worldwide e-commerce logistics market was projected to expand by more than $550 billion by 2025, representing a CAGR of 21.3%
 This growth has the potential to accelerate faster in the post-pandemic world as millions of consumers have become more accustom to online shopping. The
continuation of the shift towards e-commerce is expected to create even higher demand for e-fulfillment, reverse logistics and last mile logistics services
 Despite some positive tailwinds, the sectors largest players reported declines in first-quarter financial performance including, Expeditors, C.H. Robinson,
Landstar, and Hub Group, as customer factories shutdown, ocean freight movements slowed and shipments to hard-hit sectors experienced significant declines
 Forward Air (“FWRD”) achieved 6.5% revenue growth in Q1, which management attributed to recent final mile and intermodal acquisitions
Source: Capital IQ, Figures presented $MM CAD
(1) May 13th, 2020 (4) Research and Markets: E-Commerce Logistics – Market Analysis, Trends, and
(2) Value: Total enterprise value (Equity plus net debt) Forecasts (Feb-20) R B C M I D - M A R K E T M & A | 14
(3) Cushman & Wakefield: COVID-19 Effect on Transportation Modes (Apr-2020) (5) Transport Topics: Forward Air Reports $342.5 Million Revenue for Q1 (May-2020)
Airfreight
Valuation and Recent Market Statistics
Share % Change Market Latest 12 Months Net Debt/ Multiple of Latest 12 Months of
(1) (2) EBITDA
Company Name Price 52 Week Cap. Value Revenue EBITDA EBITDA Revenue EBITDA EBIT
%
Atlas Air Worldwide Holdings, Inc. (NasdaqGS:AAWW) $ 54.9 -22% 1,434 5,217 3,778 670 18% 5.6x 1.4x 7.8x 19.4x
Air Transport Services Group, Inc. (NasdaqGS:ATSG) $ 29.02 -18% 1,714 3,863 2,087 631 30% 3.4x 1.9x 6.1x 15.7x
Cargojet Inc. (TSX:CJT) $ 133.55 -7% 2,055 2,718 499 133 27% 5.0x 5.4x 20.4x 41.1x
Adjusted Mean 25% 4.7x 1.6x 7.0x 17.5x

Value as a Multiple of Latest 12 Months EBITDA* Significant M&A Transactions

20x S&P 500 Airfreight Value

Date Target Buyer
(C$MM)

15x
Apr-20 Great Lakes Aviation, Ltd. Alpine Air Express Inc. -

10x AE Industrial
May-19 Alpine Air Express Inc. -
Partners, LP

5x

0x
Jan-20 Feb-20 Mar-20 Apr-20 May-20
*Calculated using weighted average of market capitalization

Notable Developments(3,4,5,6)
 Global air cargo capacity is 26% lower compared to last year, with trade lanes to and from Asia fairing better than the global average and little sign of recovery
yet between transatlantic airfreight capacity
 Canadian-based, Cargojet Inc. (“CJT”) experienced strong revenue and EBITDA growth of 11.4% and 24.5% in Q1 2020, respectively, driven by strong e-
commerce related volumes and allocating aircrafts to emergency medical supply runs to China on behalf of the Canadian and provincial governments
 Airlines with excess capacity from grounded fleets have started placing their passenger aircraft back into service temporarily as quasi airfreight providers,
carrying cargo at first on the seats but more recently removing the seats entirely
 This has led to global air cargo volumes beginning to rebound, suggesting that much of the initial decline was caused by limited available capacity in the
overall market, which is being relieved as passenger aircraft have pressed into service carrying cargo
Source: Capital IQ, Figures presented $MM CAD
(1) May 25th, 2020 (4) Cargojet Announces Strong First Quarter Results (May-2020)
(2) Value: Total enterprise value (Equity plus net debt) (5) The Loadstar: Airlines must see cargo as a ‘core business’ from now on (May- R B C M I D - M A R K E T M & A | 15
(3) Accenture: COVID-19 Impact on air cargo capacity (May-2020) 2020
Railroads
Valuation and Recent Market Statistics
Share % Change Market Latest 12 Months
Net Debt/ Multiple of Latest 12 Months of
(1) (2) EBITDA
Company Name Price 52 Week Cap. Value Revenue EBITDA EBITDA Revenue EBITDA EBIT
%
Union Pacific Corporation (NYSE:UNP) $ 215.03 -19% 145,910 185,822 30,342 15,503 51% 2.6x 6.1x 12.0x 15.0x
Canadian National Railway Company (TSX:CNR) $ 111.73 -13% 79,306 94,598 14,918 7,592 51% 2.0x 6.3x 12.5x 15.6x
CSX Corporation (NasdaqGS:CSX) $ 87.75 -23% 67,168 87,941 16,582 8,813 53% 2.4x 5.3x 10.0x 12.8x
Norfolk Southern Corporation (NYSE:NSC) $ 231.64 -25% 59,341 76,064 15,600 7,309 47% 2.3x 4.9x 10.4x 13.4x
Canadian Pacific Railway Limited (TSX:CP) $ 320.65 -12% 43,490 53,313 8,068 4,478 56% 2.2x 6.6x 11.9x 14.1x
Kansas City Southern (NYSE:KSU) $ 189.98 -24% 18,052 23,027 4,115 2,075 50% 2.2x 5.6x 11.1x 14.6x
Mean 51% 2.3x 5.8x 11.3x 14.2x

Value as a Multiple of Latest 12 Months EBITDA* Significant M&A Transactions

20x Value
S&P 500 Railroads Date Target Buyer
(C$MM)
15x First State Investments LLC;
Aug-19 Patriot Rail Company LLC -
MidRail LLC
10x Brookfield Asset
Management Inc.
Jul-19 Genesee & Wyoming Inc. 12,539
(TSX:BAM.A); GIC Special
5x Investments Pte. Ltd.
Brookhaven Rail Partners;
0x May-19 Pioneer Railcorp, Inc. Related Infrastructure; 97
Jan-2020 Feb-2020 Mar-2020 Apr-2020 May-2020 Stephens Capital Partners

*Calculated using weighted average of market capitalization

Notable Developments(3,4,5,6)
 Global rail freight is expected to decline in 2020 by 2.5% to $94.9 billion due to the COVID-19 outbreak and the measures taken to contain it
 In Canada, the largest railroad operator, Canadian National Railway (“CN”) reported flat revenues in Q1 2020 and profits ahead of analysts expectations
supported by oil producers utilizing the rail as an alternative to congested pipelines. CN maintained its previously announced dividend increase of 7% for 2020,
but withdrew its full year 2020 forecast citing the COVID-19 pandemic and a challenged energy sector
 Canadian Pacific Railway (“CP”) revised its outlook for 2020 to reduce volumes by mid-single digits and adjusted EPS to be relatively flat year-over-year
 In the U.S., Union Pacific (“UP”) reported net income in Q1 2020 ahead of Q1 2019 on slightly lower revenues driven by a record low operating ratio of 59%.
Management communicated that they expect volumes to drop by 25% in Q2 and UP has sufficient liquidity to sustain a prolonged period of lower volumes

Source: Capital IQ, Figures presented $MM CAD

(1) May 13th, 2020 (4) Reuters: CN Rail profit beats, pulls 2020 forecast on coronavirus hit (Apr-2020)
(2) Value: Total enterprise value (Equity plus net debt) (5) Union Pacific Reports Strong First Quarter 2020 Results (Apr-2020) R B C M I D - M A R K E T M & A | 16
(3) Rail Freight Global Market Report 2020-30: COVID-19 Impact and Recovery (Apr-2020) (6) CP reports record first-quarter revenues and record-low Q1 operating ratio (Apr-2020)
Ocean Freight
Valuation and Recent Market Statistics
Share % Change Market Latest 12 Months Net Debt/ Multiple of Latest 12 Months of
(1) (2) EBITDA
Company Name Price 52 Week Cap. Value Revenue EBITDA EBITDA Revenue EBITDA EBIT
%
Diversified
Hapag-Lloyd Aktiengesellschaft (XTRA:HLAG) $ 226.49 -21% 39,809 48,971 19,697 2,206 11% 4.1x 2.5x 22.2x 45.4x
A.P. Møller - Mærsk A/S (CPSE:MAERSK B) $1,414.09 -35% 26,886 44,756 54,605 6,632 12% 2.6x 0.8x 6.7x 16.7x
HMM Co.,Ltd (KOSE:A011200) $ 4.51 -7% 1,428 6,647 6,225 227 4% 23.0x 1.1x 29.3x NM
Matson, Inc. (NYSE:MATX) $ 37.22 -37% 1,602 3,240 3,065 32 10% 5.4x 1.1x 10.7x 20.8x
Adjusted Mean 11% 4.0x 1.4x 17.3x 18.8x
Specialized
Kirby Corporation (NYSE:KEX) $ 69.21 -47% 4,155 6,327 3,841 629 16% 3.5x 1.6x 10.1x 20.0x
Eagle Bulk Shipping Inc. (NasdaqGS:EGLE) $ 2.62 -67% 201 816 406 52 13% 11.9x 2.0x 15.8x 4,079.5x
Genco Shipping & Trading Limited (NYSE:GNK) $ 6.72 -59% 281 777 553 95 17% 5.2x 1.4x 8.2x 971.0x
Algoma Central Corporation (TSX:ALC) $ 9.00 -36% 340 692 581 131 22% 2.7x 1.2x 5.3x 12.2x
Pangaea Logistics Solutions, Ltd. (NasdaqCM:PANL) $ 2.86 -53% 129 408 601 62 10% 2.8x 0.7x 6.6x 11.2x
Adjusted Mean 16% 3.6x 1.4x 9.2x 14.5x
Value as a Multiple of Latest 12 Months EBITDA* Significant M&A Transactions
20x S&P 500 Diversified Specialized Value
Date Target Buyer
(C$MM)
15x
American Steamship
Feb-20 Rand Logistics, Inc. 346
Company
10x
Southern Towing
May-19 CC Industries, Inc. -
Company, Inc.
5x
Auxo Investment
Feb-19 Andrie, Inc. -
0x Partners
Jan-2020 Feb-2020 Mar-2020 Apr-2020 May-2020
*Calculated using weighted average of market capitalization

Notable Developments(3,4,5)
 A lingering effect of the impact of COVID-19 on China’s economy are “blank sailings”, where scheduled voyages have been cancelled or suspended
 This is evident in activity levels at ports on the Pacific coast across North America, with declines in import containers received of 20% in Long Beach and L.A.
and 12% in Vancouver, compared to the same period in the prior year
 Ports on the Atlantic coast have remained operating at normal hours throughout the on-set of the crisis, however economic indicators are pointing to lower
global manufacturing, negatively impacting employees and consumer buying patterns, which are expected to put further downward pressure on freight volumes
 Diversified shippers have proved more resilient than Specialized, with EBITDA multiples contracting since the start of 2020 by 13% and 24%, respectively

Source: Capital IQ, Figures presented $MM CAD

(1) May 22nd, 2020 (4) Hellenic Shipping News: COVID-19 And Supply Chain Implications For Ocean Shipping (Mar-
(2) Value: Total enterprise value (Equity plus net debt 2020) R B C M I D - M A R K E T M & A | 17
(3) Cushman & Wakefield: COVID-19 Effect on Transportation Modes (Apr-2020)
Appendix A – Overview of RBC’S M&A Capabilities
RBC Mid-Market Mergers & Acquisitions

Overview Transaction Focus

Company Profile: The team works with companies operating in a

 RBC’s Mid-Market M&A team provides capital markets advisory services
to Canadian Mid-Market companies
 We advise business owners, management teams and shareholder groups
and are focused on private company transactions
 The team is part of RBC’s Corporate Client Group, leveraging a broad
depth of knowledge from offices in all major financial centres across
Canada
 Our strong relationship with RBC’s Capital Markets platform allows us to
bring to bear significant industry research and global market reach to our
engagements
variety of industries
Business Divestitures: Working with business owners to
1 develop and execute a divestiture process designed to
maximize the value of the business being sold.
Acquisitions: We have extensive experience assisting
2 companies manage the acquisition process and can provide
a useful resource when dealing with the seller of a business.
Buyouts: We provide advice to companies or individuals
3
seeking to complete a management or shareholder buyout.

Clients choose to work with RBC Mid-Market M&A for the following reasons:

The senior professionals on the team each have over 15 years experience successfully closing mid-market
Experience
transactions

Capabilities We have access to RBC’s strong relationships with domestic and international strategic and financial acquirers

Focus The team is dedicated to focusing exclusively on the mid-market

Ability to leverage the full resources of RBC including financing, wealth management, and succession planning
RBC’s Vast Resources
services

RBC’s Mid-Market M&A team leverages the experience of its professionals

and the extensive capabilities of RBC to provide customized capital markets advisory services

R B C M I D - M A R K E T M & A | 19
RBC Mid-Market Mergers & Acquisitions
National Coverage of the Canadian Mid-Market

Toronto

Robert Hickey Paul Morgan Jeff Ng Jeff Tone Graeme Blair Brandon Beadow
Managing Director & Head Managing Director Director Director Vice President Vice President
(416) 955-3635 (416) 974-3624 (416) 348-3170 (416) 842-1131 (416) 842-2126 (416) 805-8177
robert.hickey@rbc.com paul.morgan@rbc.com jeffrey.ng@rbc.com jeff.tone@rbc.com graeme.blair@rbc.com brandon.beadow@rbc.com

Matt Mantin Matthew Roberts Nisarg Shah Connor Campbell Jeff Miller Tarek Chami
Vice President Vice President Vice President Associate Associate Associate
(416) 842-9062 (416) 842-5567 (416) 955-0364 (416) 842-2860 (416) 842-7955 (416) 974-7875
mathew.mantin@rbc.com matthew.a.roberts@rbc.com nisarg.shah@rbc.com connor.campbell@rbc.com jeff.miller@rbc.com tarek.chami@rbc.com

Alena Huberts Zafer Qureshi

Associate Associate
(416) 974-5509
alena.huberts@rbc.com
6 Serving the (416) 347-4192
zafer.qureshi@rbc.com

Canadian
Offices Across Canada
Tuhin Nair
Analyst
Montreal
(416) 842-1151
tuhin.nair@rbc.com
Mid-Market Mark Anthony Serri
Managing Director
Shelby Canvin (514) 874-5209
Analyst mark-anthony.serri@rbc.com
(416) 955-7075
shelby.canvin@rbc.com Shu Wei Zhang

30
Associate
(514) 874-5227
shuwei.zhang@rbc.com

Dedicated Professionals Raphael Morin

Associate
(514) 874-7291
raphael.morin@rbc.com

Western Canada (Vancouver, Calgary & Edmonton) Halifax

Greg Wright Hussein Poonjani Jackie Fimrite Quaz Jiwan Paul Wourms Mark Marshall
Managing Director & W. Head Director Vice President Vice President Vice President Director
(604) 257-3249 (780) 707-0789 (403) 292-2137 (604) 257-3230 (587) 215-3844 (902) 421-7530
gregory.wright@rbc.com hussein.poonjani@rbc.com jaclynn.fimrite@rbc.com quaz.jiwan@rbc.com paul.wourms@rbc.com mark.marshall@rbc.com

Ben McKay Jacob Dickau Abhishek Makkar Peter Wooding Jared Bischof
Associate Associate Associate Associate Associate
(604) 257-3330 (604) 257-2511 (403) 292-2539 (780) 691-7221 (902) 421-4183
ben.mckay@rbc.com jacob.dickau@rbc.com abhishek.makkar@rbc.com peter.wooding@rbc.com jared.bischof@rbc.com

R B C M I D - M A R K E T M & A | 20
RBC Equity Research
Transportation & Logistics

 RBC Equity Research has extensive coverage of various segments of the Transportation & Logistics sector

 RBC Mid-Market M&A is able to leverage the expertise and knowledge of our partners in Capital Markets to effectively communicate the value proposition of the
Company, and to best position the opportunity to buyers

RBC has global coverage of various segments in the Transportation & Logistics space

R B C M I D - M A R K E T M & A | 21
RBC Has Significant Transportation & Logistics Experience – Selected Transactions
Diversified
Transportation Project Sweetwater
& Logistics
Advisor on sale of Avista
Provider Patriot Rail and Ports Genesee & Wyoming WestJet Airlines Capital’s 49% stake to CC Industries Livingston International
has agreed to be has agreed to be has agreed to be has acquired has agreed to be
acquired by First State acquired by Brookfield acquired by Onex
In-Market Southern Towing acquired by
Investments Infrastructure and GIC Advisor on
Company Platinum Equity
Not Disclosed ~C$5,000,000,000 Sale of Company
~$8,400,000,000 ~$175,000,000 Not Disclosed Not Disclosed
Buy-side Advisor Financial Advisor
Sole Sell-side Advisor Lead Left Arranger Joint Bookrunner Joint Bookrunner Sole Sell-side Advisor Sole Sell-side Advisor Sole Sell-side Advisor Lead Sell-side Advisor
Pending October 2019 Pending December 2019 August 2019 May 2019 Pending May 2019

Wind Point Partners Variant Equity Finning International American Securities Odyssey Logistics United Road Services
Apollo $200,000,000
has acquired has acquired has acquired has acquired has acquired has acquired
has acquired
A&R Logistics Coach USA 4Refuel FleetPride AFF Global Logistics FleetCar Carriers Senior Credit
DCLI
Not Disclosed Facility
C$260,000,000 Not Disclosed
Not Disclosed Not Disclosed $271,400,000 $465,000,000 Lead Left Arranger
Sole Sell-side Advisor Joint Bookrunner Sole Sell-side Advisor Sell-side Advisor Joint Bookrunner Sell-side Advisor Buy-side Advisor Lead Left Bookrunner
May 2019 April 2019 April 2019 February 2019 December 2018 December 2018 December 2018 May 2018

Inaugural
Senior Term Loan $300,000,000
Unsecured Brooklyn NY Holdings TPG Capital Charlesbank has sold Tidewater
Kirby Corporation Refinancing has acquired
Notes has sold M/G Transport United Road Services to has acquired the Senior Notes
has acquired Transplace
Services to Auxo The Carlyle Group ITB Marine Group
Higman Marine
Investment Partners $225,000,000
$419,000,000 $900,000,000 Not Disclosed Not Disclosed Not Disclosed 2.50% Notes due 2022
Not Disclosed Joint Lead Arranger
Sole Sell-side Advisor Joint Bookrunner Sole Sell-side Advisor Joint Bookrunner Joint Bookrunner Lead Sell-side Advisor Sole Sell-side Advisor Active Joint Bookrunner
February 2018 February 2018 November 2017 October 2017 October 2017 September 2017 August 2017 August 2017

Carlyle Infrastructure
Thomas H. Lee Partners Thomas H. Lee Partners Settoon Towing has sold Quality Distribution
Partners has sold North EQT Infrastructure Matson Transport America
has acquired MHS has acquired MHS its Liquid Bulk Division to has been acquired by
America Central School has sold RTI to has acquired has been acquired by
Savage Inland Marine Apax Partners
$265,000,000 Not Disclosed Bus to GHJ&M Aurora Capital Horizon Lines TransForce
Senior Credit Facilities Not Disclosed Not Disclosed $800,000,000 Not Disclosed $310,000,000
$456,100,000
Sole Arranger and
Sole Bookrunner Buy-side Advisor Lead Sell-side Advisor Sole Sell-side Advisor Sole Sell-side Advisor Sole Sell-side Advisor Buy-side Advisor Sole Sell-side Advisor
May 2017 May 2017 April 2017 December 2016 August 2015 April 2015 March 2015 July 2014
RBC Mid-Market M&A acted as exclusive financial advisor to the seller

R B C M I D - M A R K E T M & A | 22
Disclaimer

This presentation is incomplete without reference to, and should be viewed and understood solely in conjunction with, any other written materials that supplement
the presentation and the oral briefing provided by the Royal Bank of Canada (“RBC”).

This presentation was prepared exclusively for the benefit and internal use of the recipient for the purpose of considering the transaction or transactions
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The information in this presentation, and any analyses contained herein, are taken from, or based upon, publicly available information, third-party providers, or
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To the extent projections and financial analyses are set forth herein, they may be based on estimated financial performance prepared by or in consultation with the
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Any calculations or value ranges indicated herein (i) are preliminary and should not be construed as opinions of RBC or their individual members as to value, fair
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Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it
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While the information presented and views expressed in this presentation and the oral briefing have been prepared in good faith, RBC accepts no responsibility or
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Employees of RBC are expressly prohibited from offering directly or indirectly a specific price target, or offering or threatening to change research, a rating or a price
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R B C M I D - M A R K E T M & A | 23