31 October 2017 Railroads Canadian Rails ((U.S. + Can) since 2012 30,000 25,000 20,000 15,000 10,000 ne en n1 ta. nr tr. in '0 to N. N. A -.., ea ea ea ea Avg. Weekly Carloads Sam Danao• Saft.AM —YoY market has likely peaked, with North American light vehicle production expected to be down 2% in 2017 after 7 years of expansion, which is pressuring auto volumes (-9% YTD). Figure 64: Motor vehicles and parts carloads trends Figure 65: North American light vehicle production is expected to be down 2.1% in 2017 30% 40% 30% 20% 20% 10% 0% 10% 0% (10%) _ I - ci (10%) (20%) (20%) (30%) V in kp alp ra m 0 in erl kb la w N 8N 8N ••4 8N N8 8N N 8N N Rs R. .9 N ,9 (9, 8 8 I Son 0_ Sr* *as mos* Mita: If 00 LOAN/ • Non-metallic minerals & products - This category accounts for roughly 12% of total carloads traffic (ex-intermodal) in North America - 80/0 in Canada and 14% in the U.S. It is comprised of crushed stone & gravel, nonmetallic minerals, and stone, clay, and glass. Demand for these products is generally driven by construction and industrial activity. The oil and gas industry is a large customer for nonmetallic minerals as drilling activity drives demand for aggregates/gravel and frac sand which has been extremely volatile over the past several years. Figure 66: Non-metallic minerals & products carloads trends (US + Can) since 2012 50,000 45,000 40,000 35,000 30,000 25,000 20,000 IN N en rei CT O 1.11 O LO N N e e i0 (0 ,0 10 (0 10 Avg. Weekly Carloads —YoY Son Detirsay Bent W 25% 20% 100% 15% 50% 10% • 0% 5% >- (50%) 0% (5%) (100%) (10%) (15%) N el I Figure 67: U.S. frac sand carloads closely track the rig count 150% 96% Correlation N en. en o o O O O O O O O O O N N est N N N N N N N C a b i7 B' as a U.S. Rig Count —41— Frac Sand Carloads (U.S. Class I rails) Sane otsw eleke apHy STO • DB's Oil Services and Equipment team for