RBC Dominion Securities Inc. Canadian Focus List

March 1, 2019 | Quarterly Report Portfolio Advisory Group – Equities

What’s inside 2 New Year rally offsets Staying the course with two hands December swoon on the wheel 3 Content with the Portfolio as currently constructed Markets have rebounded, but vigilance on key risks remains of paramount importance 4 Portfolio positions

5 Methodology Investors had their commitment to accommodative shift in central risk assets tested in a volatile winter policy and nascent optimism that quarter. The negative momentum in global trade skirmishes will not devolve global equities built to a crescendo into a worst-case scenario. The resulting in late December as investors would rally has seen North American equity undoubtedly have preferred to be free valuations return to levels consistent to focus on holiday merrymaking. While with their long-term averages. our preferred recession indicators remained largely benign, markets were We balance our expectation for positive struggling to digest a deceleration in (but slowing) economic and corporate earnings growth, shrinking monetary earnings growth against the risks that stimulus, and a persistent group of could upset this late-cycle stage of the geopolitical concerns. economic expansion in maintaining our Market Weight recommendation for The turn of the calendar brought a equities as an asset class. better tone to markets, spurred by an Sector weightings: Canadian Focus List vs. the S&P/TSX Composite Canadian Focus List S&P/TSX Composite

Financials, 30.0% Financials, 32.5% Industrials, 20.0% Energy, 18.4% Energy, 17.5% Materials, 11.2% Consumer Discr., 7.5% Industrials, 10.7% Materials, 7.5% Comm. Svcs., 5.7% For an overview of the Portfolio, please click here. Consumer Staples, 5.0% Consumer Discr., 4.2% Click here for authors’ contact Comm. Svcs., 5.0% Information Tech., 4.2% information. Real Estate, 2.5% Utilities, 4.0% All values in Canadian dollars and Consumer Staples, 3.8% priced as of February 27, 2019, market Information Tech., 2.5% close, unless otherwise noted. Utilities, 2.5% Real Estate, 3.2% Disseminated: Mar 1, 2019 06:45ET Health Care, 0.0% Health Care, 2.0% Produced: Feb 28, 2019 13:37ET

For required disclosures, see Source - RBC Dominion Securities, Bloomberg; data as of 13:58ET 2/26/19 page 6. NOT FOR DISTRIBUTION IN THE U.S. 2 | Canadian Focus List

The domestic-specific challenges facing have been well documented and contribute to cautious sentiment towards the Canadian equity market. Elevated levels of household indebtedness, strained affordability in key housing markets, energy transportation deficiencies, and a general sense of eroding economic competitiveness have weighed on the domestic market for quite some time.

We believe these concerns have been adequately reflected in a Canadian equity market valuation that is considerably discounted relative to that of the U.S. market. We continue to believe that a starting point of weak sentiment and a discounted valuation should reward long-term investors in a “less bad” outcome for the risks cited above. This notion underpins our Market Weight recommendation on Canadian equities.

We have constructed the We have constructed the Canadian Focus List with a mind to mitigate the Canadian Focus List with Portfolio’s exposure to the aforementioned domestic risks. We have maintained a a mind to mitigate the modest Underweight position in the Canadian as we believe that consumer Portfolio’s exposure to leverage will contribute to slower earnings growth in our base-case outlook, with the potential for above-forecast credit losses in a more turbulent economic domestic risks. environment. In Energy, we have maintained a more conservative stance including core positions in well-capitalized producers with below-peer exposure to heavy oil discounts. Finally, the Portfolio is positioned in a number of companies whose U.S. platforms offer exposure to higher short-term economic growth potential while adding diversification.

New Year rally offsets December swoon Canadian Focus List enjoyed strong quarter amid rising tide for global equities The Canadian Focus List enjoyed strong absolute returns in the winter quarter but gave back some ground relative to the benchmark. The Canadian Focus List posted a total return of 5.6% compared to the 6.1% advance recorded by the S&P/TSX Composite. Some additional context is warranted when analyzing the Focus List’s relative performance. While the Focus List lagged the benchmark’s sharp rally in the winter quarter, it had previously outperformed (and by a wider margin) during the difficult fall quarter. All told, the Canadian Focus List traversed the valley created by the broader market’s plunge and subsequent resurgence over the September-to- February period with modest relative outperformance.

The benchmark’s performance was largely driven by gains in the Financials and Energy sectors. The Canadian Focus List’s gains in these sectors essentially mimicked those recorded by the benchmark. In terms of the drivers of relative performance in the quarter, the Focus List enjoyed strong gains in Toromont Industries Ltd. (TIH), Inc. (CSU), and Restaurant Brands International Inc. (QSR) in the wake of better-than-expected earnings reports. The largest detractor from relative performance was the Focus List’s Underweight position in the precious metals complex as equity prices followed bullion higher.

Total return for the winter quarter (12/1/18 – 2/28/19) Canadian Focus List 5.60% S&P/TSX Composite Index 6.10% Relative -0.50%

Note: Past performance is no guarantee of future results and should not be viewed as an indicator of future results Source - FactSet

March 1, 2019 | RBC Wealth Management 3 | Canadian Focus List

Content with the Portfolio as currently constructed We believe the Portfolio strikes the right balance in the present environment We embark on the spring quarter with no changes to the Portfolio. While a handful of ideas were subject to healthy debate amongst the Investment Committee, we collectively agreed that the Portfolio strikes the right balance considering the backdrop of reasonable growth, fair valuations, and ever-present macro risks. A few names warrant special examination in light of recent performance and headlines.

Finning International Inc. (FTT) endured a challenging quarter as earnings fell below consensus expectations and management’s outlook dimmed. We saw fit to retain our belief that sentiment has become overly negative. Now trading at less than 12x RBC Capital Markets’ 2020 earnings estimate, we believe Finning’s trough- level valuation multiple reflects an expectation that the company’s earnings are poised for a near-term negative inflection. We opine that this is somewhat akin to The Portfolio strikes the valuing the company on a downside case scenario, while the potential for a brighter right balance, in our view, outlook for commodities and infrastructure tailwinds could sustain healthy profit growth. considering the backdrop of reasonable growth, fair Corp. (T) was subject to a fair number of alarmist headlines relating to valuations, and ever-present the potential banning of Huawei equipment in 5G telecommunications network macro risks. buildouts. This risk has been overstated, in our view. While we are wary of the political element when assessing this risk, we believe that Huawei’s exclusion from the core of 5G wireless networks would present manageable cost inflation to TELUS’s capital investments that would be absorbed over the course of a multiyear buildout. Moreover, the threat of having to remove existing equipment that has already been deployed seems remote.

Once widely lauded as transformative and cost-conscious value creators, certain companies and management teams affiliated with Brazilian-American investment firm 3G Capital have come under recent scrutiny amid growth concerns and dividend cuts. We would caution against extrapolating the challenges facing other 3G Capital investments onto the outlook for Restaurant Brands. Management at Restaurant Brands has proven adept at not only acquisition-derived growth via associated synergies but also at growing the business organically. We expect new restaurant growth to drive sustainable long-term earnings growth, with considerable scope for international expansion via the master franchisee joint venture playbook deployed successfully for years at the company’s Burger King brand.

March 1, 2019 | RBC Wealth Management 4 | Canadian Focus List

Price 52-wk EPS (calendar) P/E Div. Market Symbol Company name Weight 2/27/19 range 2018A 2019E 2020E 2019E 2020E yield cap. (B) Communication Services T TELUS Corporation 5.00% $47.93 49 - 44 $2.86 $2.97 $3.18 16.1x 15.1x 4.5% $28.69

Consumer Discretionary

DOL Inc. 2.50% $36.32 55 - 31 $1.68 $1.89 $2.16 19.2x 16.8x 0.4% $11.43

QSR Restaurant Brands International Inc 5.00% $82.28 87 - 68 $3.50 $3.67 $4.00 22.4x 20.6x 3.2% $20.70

Consumer Staples

ATD.B Alimentation Couche-Tard Inc. Class B 5.00% $75.08 76 - 52 $4.17 $4.56 $4.96 16.5x 15.1x 0.5% $32.84 Energy

CNQ Canadian Natural Resources Limited 5.00% $37.59 49 - 30 $2.97 $2.02 $2.47 18.6x 15.2x 3.6% $45.33

PPL Corporation 2.50% $48.26 49 - 38 $2.28 $2.53 $2.75 19.1x 17.6x 4.7% $24.42 SU Inc. 5.00% $45.50 55 - 36 $2.65 $2.53 $3.14 18.0x 14.5x 3.7% $71.89

TRP TransCanada Corporation 5.00% $58.96 60 - 48 $3.86 $3.85 $3.86 15.3x 15.3x 5.1% $54.36

Financials

BMO Bank of 5.00% $102.94 109 - 86 $9.09 $9.70 $10.31 10.6x 10.0x 3.9% $65.72 BNS Bank of Nova Scotia 2.50% $72.72 83 - 66 $7.13 $7.31 $7.89 9.9x 9.2x 4.8% $89.13

BAM.A Brookfield Asset Mgmt. Inc. Class A 5.00% $59.11 59 - 49 $4.53 NA NA NA NA 1.4% $56.66

IFC Intact Financial Corporation 2.50% $109.62 113 - 92 $5.74 $7.43 $8.01 14.8x 13.7x 2.8% $15.26

NA of Canada 2.50% $62.13 66 - 54 $6.04 $6.35 $6.82 9.8x 9.1x 4.2% $20.86

ONEX Onex Corporation 2.50% $78.35 100 - 71 $0.38 NA NA NA NA 0.4% $7.87

RY Royal 5.00% $103.30 105 - 90 $8.47 NA NA NA NA NA $148.30 TD -Dominion Bank 5.00% $77.30 80 - 66 $6.55 $7.01 $7.58 11.0x 10.2x 3.5% $141.49

Industrials

CNR Canadian National Railway Company 2.50% $114.02 119 - 91 $5.50 $6.28 $6.94 18.2x 16.4x 1.9% $82.54

CP Limited 5.00% $274.44 292 - 220 $14.51 $16.62 $18.58 16.5x 14.8x 0.9% $38.43

FTT Finning International Inc. 2.50% $24.44 35 - 22 $1.65 $1.79 $2.09 13.7x 11.7x 3.3% $4.02

TIH Toromont Industries Ltd. 5.00% $69.06 70 - 51 $3.10 $3.61 $4.04 19.1x 17.1x 1.6% $5.61

WCN Waste Connections, Inc. 5.00% $110.25 113 - 90 $3.36 $3.65 $4.07 30.2x 27.1x 0.8% $29.03 Information Technology

CSU Constellation Software Inc. 2.50% $1,114.80 1179 - 814 $37.52 $43.58 $50.81 25.6x 21.9x 0.5% $23.62

Materials

CCL.B CCL Industries Inc. Class B 2.50% $54.85 68 - 47 $2.73 $2.92 $3.18 18.8x 17.2x 1.2% $9.10

FNV Franco-Nevada Corporation 2.50% $98.93 103 - 77 $1.55 $1.73 $1.99 57.1x 49.8x 1.3% $18.44

NTR Ltd. 2.50% $73.06 76 - 57 $3.57 $4.02 $4.50 18.2x 16.2x 3.1% $44.03

Real Estate

BPY.U Brookfield Property Partners LP 2.50% $25.58 28 - 20 $3.18 $2.79 $3.02 9.2x 8.5x 6.9% $10.92

Utilities

FTS Fortis Inc. 2.50% $47.14 48 - 40 $2.51 $2.65 $2.80 17.8x 16.8x 3.8% $20.20

Source - FactSet In all jurisdictions where RBC Capital Markets conducts business, we do not offer investment advice on . Certain regulations prohibit member firms from soliciting orders and offering investment advice or opinions on their own stock. References to Royal Bank are for informational purposes only and not intended as a direct or implied recommendation for investing in Royal Bank and all related securities.

March 1, 2019 | RBC Wealth Management 5 | Canadian Focus List Methodology The Canadian Focus List is produced by RBC Capital Markets and RBC Wealth Management’s Portfolio Advisory Group. The List was launched in the mid-1980s and has a long-term track record of strong performance versus the S&P/TSX. The Canadian Focus List serves as a core Canadian equity portfolio and may be suitable for investors with a moderate risk tolerance in relation to an equity market investment.

Investment Process:

• The Portfolio is diversified across a minimum of 20 stocks with representation from each of the major sectors of the Canadian market. • On a quarterly basis, a top-down analysis incorporating RBC Capital Markets’ outlook for the economy, the markets, and various economic sectors is brought to bear on the sector composition of a diversified portfolio of securities. • A “three-discipline” (3D) approach combining fundamental analysis of the firm’s equity analysts with RBC Capital Markets’ proprietary technical and quantitative disciplines screens stocks for inclusion on the List. • On a quarterly basis, all stocks that prescreen well under the 3D process are considered for inclusion. Furthermore, the Committee considers each stock in relation to: strength of management, the robustness of its business model, and its potential to pay and grow dividends.

The foundation of our process is to try to find good businesses trading at reasonable valuations. Within the context of this, we focus on businesses with high returns on invested capital (in other words, every dollar the company puts into the business generates a significant return for the business), strong balance sheets, high cash generation, non-nebulous accounting, credible management teams that have demonstrated track records of success, and the willingness to return some capital to shareholders through share buybacks and dividends. Further, when possible, we try to find businesses that are at a positive inflection point in their evolution, which would be marked by things such as a gradual expansion of margins, a transition to positive free cash flow, or the roll-off of a significant capex cycle.

Against this, we overlay the 3D process, which helps us to filter out much of the noise generated by the day-to-day fluctuations of the market. We believe that an approach such as this will be rewarded over time. However, from time to time, the market will choose to focus its attention and goodwill on those businesses that lack many of the attributes that we look for and thus we expect to experience quarters in which we significantly underperform. Rather than view this as an opportunity to chase what is working, we view this as an opportunity to look for the types of businesses outlined above and, perhaps, capitalize on opportunities that the market has chosen to ignore in favour of short-term performance.

March 1, 2019 | RBC Wealth Management 6 | Canadian Focus List Disclosures and disclaimers

Canadian Focus List Investment Committee Distribution of Ratings - RBC Capital Markets, LLC Equity Research Jim Allworth, Investment Strategist As of December 31, 2018 Services [email protected]; RBC Dominion Securities Inc. jim Provided During Past 12 Months Patrick McAllister, CFA, Portfolio Advisor Rating Count Percent Count Percent Buy [Top Pick & Outperform] 876 54.92 234 26.71 [email protected]; RBC Dominion Securities Inc. Hold [Sector Perform] 642 40.25 111 17.29 Dominick Hardy, CA, CFA, CPA, Portfolio Advisor Sell [Underperform] 77 4.83 7 9.09 [email protected]; RBC Dominion Securities Inc. Explanation of RBC Capital Markets, LLC Tim Corney, CFA, Portfolio Advisor Equity Rating System [email protected]; RBC Dominion Securities Inc. An analyst’s “sector” is the universe of companies for Analyst Certification which the analyst provides research coverage. Accordingly, All of the views expressed in this report accurately reflect the rating assigned to a particular stock represents solely the personal views of the responsible analyst(s) about any the analyst’s view of how that stock will perform over the and all of the subject securities or issuers. No part of the next 12 months relative to the analyst’s sector average. compensation of the responsible analyst(s) named herein Ratings: is, or will be, directly or indirectly, related to the specific Top Pick (TP): Represents analyst’s best idea in the sector; recommendations or views expressed by the responsible expected to provide significant absolute total return over 12 analyst(s) in this report. months with a favorable risk-reward ratio. Outperform (O): This report is issued by the Portfolio Advisory Group Expected to materially outperform sector average over 12 (“PAG”) which is part of the retail division of RBC Dominion months. Sector Perform (SP): Returns expected to be in line Securities Inc. (“RBC DS”). The PAG provides portfolio with sector average over 12 months. Underperform (U): Re- advisory services to RBC DS Investment Advisors. Reports turns expected to be materially below sector average over published by the PAG may be made available to clients 12 months. Restricted (R): RBC policy precludes certain of RBC DS through its Investment Advisors. The PAG types of communications, including an investment recom- relies on a number of different sources when preparing mendation, when RBC is acting as an advisor in certain its reports including, without limitation, research reports merger or other strategic transactions and in certain other published by RBC Capital Markets (“RBC CM”). RBC CM circumstances. Not Rated (NR): The rating, price targets and is not independent of RBC DS or the PAG. RBC CM is a estimates have been removed due to applicable legal, reg- business name used by Royal Bank of Canada and certain ulatory or policy constraints which may include when RBC of its affiliates, including RBC DS, in connection with its Capital Markets is acting in an advisory capacity involving corporate and investment banking activities. As a result the company. of the relationship between RBC DS, the PAG and RBC CM, Risk Rating: there may be conflicts of interest relating to the RBC CM The Speculative risk rating reflects a security’s lower level analyst that is responsible for publishing research on a of financial or operating predictability, illiquid share trading company referred to in a report issued by the PAG. volumes, high balance sheet leverage, or limited operating Required Disclosures history that result in a higher expectation of financial and/ or stock price volatility. RBC Capital Markets Distribution of Ratings RBC Capital Markets has fundamental research of the fol- For purposes of ratings distributions, regulatory rules lowing companies: require member firms to assign ratings to one of three Alimentation Couche-Tard Inc. (ATD.B; Outperform; $75.08) rating categories −Buy, Hold/Neutral, or Sell− regardless of a firm’s own rating categories. Although RBC Capital (BMO; Outperform; $102.94) Markets’ ratings of Top Pick/Outperform, Sector Perform The Bank of Nova Scotia (BNS; Sector Perform; $72.72) and Underperform most closely correspond to Buy, Hold/ Brookfield Asset Management Inc. (BAM.A; Outperform; Neutral and Sell, respectively, the meanings are not the $59.11) same because our ratings are determined on a relative Brookfield Property Partners L.P. (BPY.UN; Top Pick; $25.58) basis. Canadian National Railway Co. (CNR; Outperform; $114.02) Canadian Natural Resources Ltd. (CNQ; Outperform; $37.59)

March 1, 2019 | RBC Wealth Management 7 | Canadian Focus List

Canadian Pacific Railway Ltd. (CP; Outperform; $274.44) RBC Capital Markets Conflicts Policy CCL Industries Inc. (CCL.B; Outperform; $54.85) RBC Capital Markets Policy for Managing Conflicts of Inter- Constellation Software Inc. (CSU; Outperform; $1,114.80) est in Relation to Investment Research is available from us on request. To access our current policy, clients should refer Dollarama Inc. (DOL; Outperform; $36.32) to https://www.rbccm.com/global/file-414164.pdf or send Finning International Inc. (FTT; Outperform; $24.44) a request to RBC Capital Markets Research Publishing, P.O. Fortis Inc. (FTS; Outperform; $47.14) Box 50, 200 Bay Street, Royal Bank Plaza, 29th Floor, South Franco-Nevada Corporation (FNV; Outperform, $98.93) Tower, Toronto, M5J 2W7. We reserve the right to Intact Financial Corporation (IFC; Outperform; $109.62) amend or supplement this policy at any time. (NA; Outperform; $62.13) Dissemination of Research & Short Term Ideas Nutrien Ltd. (NTR; Outperform; $73.06) RBC Capital Markets endeavours to make all reasonable efforts to provide research simultaneously to all eligible cli- Onex Corporation (ONEX; Top Pick; $78.35) ents, having regard to local time zones in overseas jurisdic- Pembina Pipeline Corporation (PPL; Outperform; $48.26) tions. Subject to any applicable regulatory considerations, Suncor Energy Inc. (SU; Outperform; $45.50) “eligible clients” may include RBC Capital Markets institu- TELUS Corporation (T; Outperform; $47.93) tional clients globally, the retail divisions of RBC Dominion Toromont Industries Ltd. (TIH; Sector Perform; $69.06) Securities Inc. and RBC Capital Markets LLC, and affiliates. RBC Capital Markets’ equity research is posted to our pro- The Toronto-Dominion Bank (TD; Sector Perform; $77.30) prietary websites to ensure eligible clients receive coverage TransCanada Corporation (TRP; Outperform; $58.96) initiations and changes in rating, targets and opinions in a Waste Connections, Inc. (WCN; Outperform; $110.25) timely manner. Additional distribution may be done by the Our third-party research providers have fundamental re- sales personnel via email, fax or regular mail. Clients may search of: also receive our research via third party vendors. Please Restaurant Brands International Inc. (QSR; Hold; $82.28) contact your investment advisor or institutional salesper- son for more information regarding RBC Capital Markets RBC Capital Markets analysts have received (or will receive) research. RBC Capital Markets also provides eligible clients compensation based in part upon the investment banking with access to SPARC on its proprietary INSIGHT website. revenues of RBC Capital Markets. SPARC contains market color and commentary, and may Portfolio Advisory Group personnel, including the also contain Short-Term Trade Ideas regarding the securities portfolio advisor or any individuals directly involved of subject companies discussed in this or other research in the preparation of the report hold(s) or exercise(s) reports. A Short-Term Trade Idea reflects the research investment discretion over a long position in the common analyst’s directional view regarding the price of the security shares of Alimentation Couche-Tard Inc., Brookfield Asset of a subject company in the coming days or weeks, based Management Inc., Canadian National Railway Company, on market and trading events. A Short-Term Trade Idea may Canadian Natural Resources Limited, Canadian Pacific differ from the price targets and/or recommendations in our Railway Limited, Dollarama Inc., Nutrien Ltd., Onex published research reports reflecting the research ana- Corporation, Restaurant Brands International Inc., Royal lyst’s views of the longer-term (one year) prospects of the Bank of Canada, Suncor Energy Inc., TELUS Corporation, The subject company, as a result of the differing time horizons, Bank of Nova Scotia, The Toronto-Dominion Bank, Toromont methodologies and/or other factors. Thus, it is possible Industries Ltd., TransCanada Corporation, and Waste that the security of a subject company that is considered a Connections Inc. long-term ‘Sector Perform’ or even an ‘Underperform’ might A household member or members of the Portfolio Advisory be a short-term buying opportunity as a result of temporary Group hold(s) or exercise(s) investment discretion over selling pressure in the market; conversely, the security of a long position in the common shares of Alimentation a subject company that is rated a long-term ‘Outperform’ Couche-Tard Inc., Canadian National Railway Company, could be considered susceptible to a short-term downward Nutrien Ltd., and Restaurant Brands International Inc. price correction. Short-Term Trade Ideas are not ratings, The portfolio advisor responsible for this report or a nor are they part of any ratings system, and RBC Capital member of his/her team hold(s) or exercise(s) investment Markets generally does not intend, nor undertakes any discretion or control over a long position in the non- obligation, to maintain or update Short-Term Trade Ideas. convertible fixed income securities of Brookfield Property Short-Term Trade Ideas discussed in SPARC may not be Partners L.P., and Royal Bank of Canada. suitable for all investors and have not been tailored to indi- A household member or members of the portfolio advisor vidual investor circumstances and objectives, and investors responsible for this report or a member of his/her team should make their own independent decisions regarding hold(s) a long position in the non-convertible fixed income any Short-Term Trade Ideas discussed therein. securities of Brookfield Property Partners L.P.

March 1, 2019 | RBC Wealth Management 8 | Canadian Focus List

Conflict Disclosures Disclaimer In the event that this is a compendium report (covers six or The information contained in this report has been compiled by RBC Domin- more subject companies), RBC DS may choose to provide ion Securities Inc. (“RBC DS”) from sources believed by it to be reliable, but no representations or warranty, express or implied, are made by RBC specific disclosures for the subject companies by reference. DS or any other person as to its accuracy, completeness or correctness. To access RBC CM’s current disclosures of these compa- All opinions and estimates contained in this report constitute RBC DS’ nies, please go to https://www.rbccm.com/GLDisclosure/ judgment as of the date of this report, are subject to change without notice PublicWeb/DisclosureLookup.aspx?entityId=1. and are provided in good faith but without legal responsibility. This report is not an offer to sell or a solicitation of an offer to buy any securities. Such information is also available upon request to RBC Additionally, this report is not, and under no circumstances should be con- Dominion Securities, Attention: Manager, Portfolio Advisory strued as, a solicitation to act as securities broker or dealer in any jurisdic- Group, 155 Wellington Street West, 17th Floor, Toronto, ON tion by any person or company that is not legally permitted to carry on the M5V 3K7. business of a securities broker or dealer in that jurisdiction. This material is prepared for general circulation to Investment Advisors and does not The authors are employed by RBC Dominion Securities Inc., have regard to the particular circumstances or needs of any specific a securities broker-dealer with principal offices located in person who may read it. RBC DS and its affiliates may have an investment Toronto, Canada. banking or other relationship with some or all of the issuers mentioned herein and may trade in any of the securities mentioned herein either for The Global Industry Classification Standard (“GICS”) was developed by their own account or the accounts of their customers. RBC DS and its affili- and is the exclusive property and a service mark of MSCI Inc. (“MSCI”) and ates may also issue options on securities mentioned herein and may trade Standard & Poor’s Financial Services LLC (“S&P”) and is licensed for use in options issued by others. Accordingly, RBC DS or its affiliates may at any by RBC. Neither MSCI, S&P, nor any other party involved in making or com- time have a long or short position in any such security or option thereon. piling the GICS or any GICS classifications makes any express or implied Neither RBC DS nor any of its affiliates, nor any other person, accepts any warranties or representations with respect to such standard or classifica- liability whatsoever for any direct or consequential loss arising from any tion (or the results to be obtained by the use thereof), and all such parties use of this report or the information contained herein. This report may not hereby expressly disclaim all warranties of originality, accuracy, complete- be reproduced, distributed or published by any recipient hereof for any ness, merchantability and fitness for a particular purpose with respect to purpose. any of such standard or classification. Without limiting any of the forego- In all jurisdictions where RBC Capital Markets conducts business, we do ing, in no event shall MSCI, S&P, any of their affiliates or any third party not offer investment advice on Royal Bank of Canada. Certain regulations involved in making or compiling the GICS or any GICS classifications have prohibit member firms from soliciting orders and offering investment any liability for any direct, indirect, special, punitive, consequential or any advice or opinions on their own stock. References to Royal Bank are for other damages (including lost profits) even if notified of the possibility of informational purposes only and not intended as a direct or implied rec- such damages. ommendation for investing in Royal Bank and all related securities. References herein to “LIBOR”, “LIBO Rate”, “L” or other LIBOR abbrevi- RBC Dominion Securities Inc.* and Royal Bank of Canada are separate cor- ations means the London interbank offered rate as administered by ICE porate entities which are affiliated. *Member-Canadian Investor Protection Benchmark Administration (or any other person that takes over the admin- Fund. RBC Dominion Securities Inc. is a member company of RBC Wealth istration of such rate). Management, a business segment of Royal Bank of Canada. ®Registered trademarks of Royal Bank of Canada. Used under licence. ©2019 Royal Bank of Canada. All rights reserved.

March 1, 2019 | RBC Wealth Management