Airfreight, , Logistics, & Maritime Industry

August 2016

Jack Atkins Managing Director Stephens Inc. (501) 377-2298 [email protected]

© 2016 Stephens Inc.

The analyst primarily responsible for the preparation of the content of this presentation certifies that (i) all views expressed in this presentation accurately reflect the analyst’s personal views about the subject company and securities, and (ii) no part of the analyst’s compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the analyst in this presentation. See important disclosures and analyst certification on page 27 of this presentation. This presentation constitutes a compendium report (covers six or more subject companies). As such, Stephens Inc. chooses to provide specific disclosures for the companies mentioned by reference. To access current disclosures for the companies in this presentation, clients should refer to https://stephens2.bluematrix.com/sellside/Disclosures.action or contact your Stephens Inc. representative for additional information.

111 Center Street Little Rock, AR 72201 / 501-377-2000 / 800-647-9691 / stephens.com / Member NYSE, SIPC Stephens Transportation Coverage List

Jack Atkins, Analyst Airfreight & Logistics [email protected] 501-377-2298

Company Name Ticker Page # Worldwide Holdings, Inc. AAWW 6 Air Transport Services Group, Inc. ATSG 7 Airfreight of Washington, Inc. EXPD 8 FedEx Corporation FDX 9 , Inc. Class B UPS 10

American Airlines Group, Inc. AAL 12 , Inc. DAL 13 Airlines Co. LUV 14 United Continental Holdings, Inc. UAL 15

C.H. Robinson Worldwide, Inc. CHRW 17 Echo Global Logistics, Inc ECHO 18 Forward Air Corporation FWRD 19 Logistics , Inc. LSTR 20 World Fuel Services Corporation INT 21 XPO Logistics, Inc. XPO 22

Kirby Corporation KEX 24 Maritime Matson, Inc. MATX 25

Brad Delco, Analyst Justin Long, Analyst Truckload & Less-Than-Truckload Railroads & Transportation Equipment [email protected] [email protected] 501-377-8057 501-377-2036

Company Name Ticker Company Name Ticker

ArcBest Corporation ARCB American Railcar Industries, Inc. ARII Celadon Group, Inc. CGI Canadian National Railway Company CNI Covenant Transportation Group, Inc. Class A CVTI Canadian Pacific Railway Limited CP Heartland Express, Inc. HTLD CSX Corporation CSX J.B. Hunt Transport Services, Inc. JBHT Dana Holding Corporation DAN Knight Transportation, Inc. KNX Fortress Transportation & Infrastructure FTAI Marten Transport, Ltd. MRTN FreightCar America, Inc. RAIL Old Dominion Freight Line, Inc. ODFL GATX Corporation GATX Rush Enterprises, Inc. Class A RUSHA Genesee & Wyoming, Inc. GWR , Inc. SAIA Greenbrier Companies, Inc. GBX Company Class A SWFT Hub Group, Inc. HUBG USA Truck, Inc. USAK Kansas City Southern KSU Corporation WNC NN, Inc. NNBR , Inc. WERN Norfolk Southern Corporation NSC System, Inc. R Stoneridge, Inc. SRI Trinity Industries, Inc. TRN Union Pacific Corporation UNP WABCO Holdings Inc. WBC Wabtec Corp. WAB 2 Valuation Table: Airfreight, Airlines, Logistics, Maritime (Dollars in Millions, Except per Share)

Price Price Equity Ent. Operating EPS P/E Multiple EV / NTM Rating Target 8/12/16 Value Value 2016E 2017E 2016E 2017E EBITDA Multiple Airfreight United Parcel Service, Inc. Class B UPS EW $110.00 $109.91 $98,275 $107,795 $5.80 $6.10 18.9x 18.0x $10,657 10.1x FedEx Corporation FDX OW 195.00 165.50 47,314 53,366 12.00 13.15 13.8 12.6 8,527 6.3 Expeditors International of Washington, Inc. EXPD EW 53.00 51.28 9,466 8,485 2.37 2.53 21.6 20.3 749 11.3 Atlas Air Worldwide Holdings, Inc. AAWW EW/V 41.00 34.68 864 2,611 4.56 --- 7.6 ------Air Transport Services Group, Inc. ATSG EW 16.00 14.25 928 1,268 0.69 1.01 20.8 14.1 249 5.1

Mean 16.5x 16.2x --- 8.2x Median 18.9x 16.1x --- 8.2x Airlines Delta Air Lines, Inc. DAL OW $56.00 $36.35 $28,258 $34,945 $5.88 $6.20 6.2x 5.9x $9,609 3.6x Group, Inc. AAL EW 41.00 34.92 20,711 45,014 5.52 5.29 6.3 6.6 8,448 5.3 Southwest Airlines Co. LUV OW 52.00 36.52 23,677 25,275 3.73 4.20 9.8 8.7 5,714 4.4 United Continental Holdings, Inc. UAL EW 54.00 47.10 16,939 28,653 8.00 7.00 5.9 6.7 7,025 4.1

Mean 7.0x 7.0x --- 4.4x Median 6.3x 6.7x --- 4.3x Logistics C.H. Robinson Worldwide, Inc. CHRW EW $68.00 $69.68 $10,008 $10,766 $3.62 $3.57 19.2x 19.5x $908 11.9x XPO Logistics, Inc. XPO UW 24.00 36.20 5,806 10,892 0.95 1.78 38.0 20.3 1,386 7.9 World Fuel Services Corporation INT EW 49.00 45.37 3,209 3,268 2.69 3.20 16.8 14.2 368 8.9 Landstar System, Inc. LSTR EW 69.00 68.22 2,897 2,801 3.07 3.47 22.2 19.7 265 10.6 Forward Air Corporation FWRD OW 54.00 45.83 1,412 1,447 2.31 2.65 19.8 17.3 162 8.9 Echo Global Logistics, Inc ECHO OW 31.00 25.86 773 933 1.23 1.45 21.0 17.9 88 10.6

Mean 22.9x 18.1x --- 9.8x Median 20.4x 18.7x --- 9.7x Maritime KEX OW $63.00 $53.93 $2,885 $3,606 $2.45 $2.30 22.0x 23.4x $421 8.6x Matson, Inc. MATX OW 45.00 36.55 1,591 2,034 2.02 2.40 18.1 15.2 308 6.6

Mean 20.1x 19.3x --- 7.6x Median 20.1x 19.3x --- 7.6x

Note: Equity value calculated from diluted shares outstanding using the treasury method. Note: Airlines (AAL, DAL, LUV, UAL) represent EV / NTM EBITDAR multiples. Note: Enterprise value includes capitalized rent @ 7x operating rent Source: Stephens estimates and FactSet Research Systems 3 Stock Performance & Valuations

2016 Stock Performance

-4%

Stock Performance Relative to the S&P

45%

35% 35% 26% 25% 20%

15% 11% 9% 7% 7% 5% 4% 5%

-5% 0% -4%

-15%

-21% -25% -22% -23%

-24% -25% YTD StockPerformanceYTD 500 S&P Relative to -35% -35%

-45%

INT

FDX LUV

UPS KEX AAL UAL DAL

XPO

LSTR

EXPD

ATSG

MATX

ECHO

FWRD

CHRW AAWW

NTM P/E Valuation Multiples

25x

20x

15x

10x

5x

0 x AAL AAWW ATSG CHRW DAL ECHO EXPD FDX FWRD INT KEX LSTR LUV MATX UAL UPS

Current NTM Multiple 5-Yr. Avg. NTM Multiple

Source: Stephens estimates and FactSet Research Systems 4 Global Airfreight Industry Overview

Key Themes International Air Transport Association

25% . Sluggish Demand. For much of the past five 20% years (excluding 2014), global airfreight 15% demand growth has been tepid, growing in the 10% low-single digit range. While core growth is 5% expected to remain challenging, we expect the 0% continued adoption of the e-commerce channel (5%) by consumers to provide a tailwind for the (10%) (15%) industry over the next several years. 2008 2009 2010 2011 2012 2013 2014 2015 YTD

• Overcapacity. Excluding 2014, global airfreight FTK ATK capacity growth has outpaced global demand Association of Asia Pacific Airlines growth, largely due to the delivery of new passenger aircraft. The current low fuel price 30% 75% environment has also contributed to additional 70% capacity growth through the activation of older, 20% less fuel efficient aircraft. 65% 10% 60% • Rates. The excess capacity in the market 0% coupled with low fuel prices is weighing on spot 55% market carrier rates. We expect this pressure to (10%) 50% continue without a material pick-up in global 2008 2009 2010 2011 2012 2013 2014 2015 YTD demand. FTK ATK Load Factor

Drewry Shanghai to Los Angeles Rate Hong Kong International Airport Cargo Data

450,000 25% $6.00 40% 400,000 20% 15% $5.00 350,000 0% 300,000 5% $4.00 -20% 250,000 -5% $3.00 200,000 -40% -15% 150,000 $2.00 -60% 100,000 -25%

Price/Kilo Y/Y Change Loaded Unloaded Total Y/Y % Change

Global Semiconductor Shipments

15%

10%

5%

0%

-5%

-10%

Jul-12 Jul-15 Jul-11 Jul-13 Jul-14

Jan-11 Jan-12 Jan-14 Jan-16 Jan-13 Jan-15

Sep-12 Sep-14 Sep-11 Sep-13 Sep-15

Nov-11 Nov-13 Nov-12 Nov-14 Nov-15

Mar-11 Mar-13 Mar-16 Mar-12 Mar-14 Mar-15

May-13 May-15 May-11 May-12 May-14

Global FTKs Global Semi Shipments Source: IATA, AAPA, Drewry, HKIA, Semiconductor Industry Association 5 Equal-Weight/Vol. Rated Atlas Air Worldwide Holdings (AAWW) $41 Price Target (Dollars in Millions, Except per Share)

Stock Profile Key Points Ticker AAWW . Highly Levered to Oversupplied Airfreight Price (as of 8/15/16) $ 34.68 Market. A significant portion of AAWW’s Fully Diluted Shares Out (mil.) 24.9 revenue (~50%) is generated from its Charter 52-Week High $ 57.77 business. This business is sensitive to global spot airfreight rates and can materially impact 52-Week Low $ 31.99 quarterly results. Market Cap (mil.) $ 864.1 . Significant Seasonality Reduces EPS Visibility. Net Debt 1,747.1 Historically, AAWW generates a majority of its Enterprise Value $ 2,611.2 annual EPS in the 2H of the year due to the timing of peak season, which decreases the Average Daily Volume 247,988 visibility of earnings. Short Interest (as % of Float) 4.3% . Growth Dependent on Large Capital Outlays. Debt/Cap 56.2% Given the asset-intensity of AAWW’s business Free Cash Flow per Share $ (6.81) model, it is difficult for the Company to drive Dividend Yield 0.0% organic growth without deploying large Book Value per Share $ 59.34 amounts of capital on new aircraft. One Year Price / Volume Chart 5-Year NTM P/E Chart

Annual Free Cash Flow Earnings Historically 2H Loaded

$300 $6.00 $200 65% Average 50% $100 $5.00 56% $- 65% 75% $4.00 $(100) 66% 74% 71% $(200) $3.00 63% $(300) 50% $2.00 $(400) 44% $(500) 35% $1.00 37% 34% 25% $(600) 26% 29% $(700) $- 2009 2010 2011 2012 2013 2014 2015 2009 2010 2011 2012 2013 2014 2015 2016E

Source: Company reports, Stephens estimates and FactSet Research Systems 6 Equal-Weight Rated Air Transport Services Group (ATSG) $16 Price Target (Dollars in Millions, Except per Share)

Stock Profile Key Points Ticker ATSG . Agreement With Amazon. ATSG announced an Price (as of 8/15/16) $ 14.25 agreement with Amazon in which it will provide Fully Diluted Shares Out (mil.) 65.2 20 767 freighter aircraft to Amazon on 5-7 year 52-Week High $ 15.53 leases. We estimate that each aircraft could add ~$0.04 to annual EPS. 52-Week Low $ 7.60 . Capital Spend Needed for Growth. Given the Market Cap (mil.) $ 928.4 nature of ATSG’s business and its finite number Net Debt 339.9 of aircraft, the Company must deploy a Enterprise Value $ 1,268.3 significant amount of capital in order to drive EBITDA growth. Average Daily Volume 251,124 . Unit Economics Don’t Support Positive Short Interest (as % of Float) 2.4% Economic Returns. Based on our analysis, Debt/Cap 49.8% ATSG’s assets currently do not earn a return Free Cash Flow per Share N/M that exceeds its cost of capital. We believe Dividend Yield 0.0% returning this cash to shareholders would Book Value per Share $ 5.63 generate a higher return on their investment. One Year Price / Volume Chart 5-Year NTM P/E Chart

Annual Free Cash Flow Avg. Annual Unit Economics (Dollars in millions) $40 Rent $ 3.8 Operating Expenses 0.5 $20 Adj. D&A 1.4 EBIT $ 2.1 $- Interest 0.1 Taxes 0.8 $(20) NOPAT $ 1.3

$(40) Assumptions: Aircraft Cost $ 24.5 $(60) Aircraft Life (Years) 20 Funding: $(80) Equity 65.0% 2009 2010 2011 2012 2013 2014 2015 Debt 35.0% WACC 9.0% ROIC 8.4% Source: Company reports, Stephens estimates and FactSet Research Systems 7 Equal-Weight Rated Expeditors International (EXPD) $53 Price Target (Dollars in Millions, Except per Share)

Stock Profile Key Points Ticker EXPD . High-Quality, Nimble Forwarder. EXPD is a Price (as of 8/15/16) $ 51.28 global freight forwarder with a diverse service Fully Diluted Shares Out (mil.) 184.6 offering and geographic footprint, with leverage 52-Week High $ 52.58 to the Transpacific lane. EXPD has $808 mil. of 52-Week Low $ 40.41 cash and no debt. . Strategic Initiatives. The Company is executing Market Cap (mil.) $ 9,465.7 on a multi-year strategic plan aimed at driving Net Debt (980.3) double-digit operating income and EPS growth Enterprise Value $ 8,485.4 over the next several years. . Challenging Volume and Margin Comps. EXPD Average Daily Volume 1,138,168 faces difficult y/y comparisons for all of 2016 Short Interest (as % of Float) 6.5% after a strong 2015. In 1H16, volume Debt/Cap 0.0% comparisons are difficult due to the West Coast Free Cash Flow per Share $ 2.90 port congestion in 1H15. In 2H15, spot market Dividend Yield 1.6% carrier rates declined significantly, creating Book Value per Share $ 9.54 difficult margin comps this year. One Year Price / Volume Chart 5-Year NTM P/E Chart

Industry Leading Returns Difficult Y/Y Comparisons Throughout FY16

60% 15% 35% 10% 30% 50% 5%

0% 25% 40% Airfreight (5%) 20% (10%) 30% (15%) 15% 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16

20% Volume Net Rev Margin

14% 35%

10% 12% 10% 30% 8% 0% 6% 25% 2009 2010 2011 2012 2013 2014 2015 4% 2%

0% 20% Ocean Freight Ocean ROIC ROE (2%) (4%) 15% 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16

Volume Net Rev Margin Source: Company reports, Stephens estimates and FactSet Research Systems 8 Overweight Rated FedEx Corporation (FDX) $195 Price Target (Dollars in Millions, Except per Share)

Stock Profile Key Points Ticker FDX . Multiple EPS Growth Drivers. FDX will Price (as of 8/15/16) $ 165.50 complete its $1.6 bil. profit improvement Fully Diluted Shares Out (mil.) 285.9 initiative at Express this year. In addition, the 52-Week High $ 169.30 Company is integrating GENCO and SmartPost 52-Week Low $ 119.71 into its Ground business. . Capital Allocation. With $2.8 bil. of cash, FDX is Market Cap (mil.) $ 47,314.1 well positioned to invest in its business and Net Debt 6,051.9 return cash to shareholders through its Enterprise Value $ 53,366.0 quarterly dividend and share repurchases. . Acquisition of TNT Express. The deal closed on Average Daily Volume 1,187,500 May 25th and the Company expects the Short Interest (as % of Float) 1.3% transaction to be immediately accretive to Debt/Cap 35.9% annual EPS. This transaction fills a geographical Free Cash Flow per Share $ (0.39) void in the Company’s service network and Dividend Yield 1.0% presents a new platform for future EPS growth. Book Value per Share $ 54.31 One Year Price / Volume Chart 5-Year NTM P/E Chart

Express Operating Profit Improvement Ground Margin Improvement Bridge

FY13 LTM 20% Total Package Volume 996,285 1,073,458 18% 1.0% 0.3% 1.1% 16% 0.9% Total Operating Expense (mil.) $ 26,000 $ 23,807 14.0% 14% Operating Expense per Package $ 26.10 $ 22.18 12% Fuel Expense (mil.) $ 4,130 $ 2,043 10% 8% Operating Expense ex. Fuel (mil.) $ 21,870 $ 21,764 6% Per Package Operating Expense ex. Fuel $ 21.95 $ 20.27 4% 2% Per Package Cost Savings $ 1.68 0% Operating Profit Improvement ex. Fuel (mil.) $ 1,800.5 LTM GENCO SmartPost Self-Insurance Network Integration Integration Accrual Expansion

Source: Company reports, Stephens estimates and FactSet Research Systems 9 Equal-Weight Rated United Parcel Service (UPS) $110 Price Target (Dollars in Millions, Except per Share)

Stock Profile Key Points Ticker UPS . High-Quality Industrial Company. UPS boasts Price (as of 8/15/16) $ 109.91 an integrated global delivery network that Fully Diluted Shares Out (mil.) 894.1 utilizes significant technology to improve 52-Week High $ 111.83 efficiency. The Company also produces industry 52-Week Low $ 87.30 leading returns with a 2015 ROIC of 19.3% and returns a significant amount of capital to Market Cap (mil.) $ 98,274.9 shareholders through dividends and share Net Debt 9,520.0 repurchases. Enterprise Value $ 107,794.9 . Slow Growth. Given the size, density and fixed cost nature of UPS’ business model, its earnings Average Daily Volume 2,361,559 growth rate has lagged its closest peer over the Short Interest (as % of Float) 1.9% past several years and we do not see a near- Debt/Cap 83.4% term catalyst to accelerate the growth rate. Free Cash Flow per Share $ 7.48 . Valuation Full. Despite a slow growth profile, Dividend Yield 2.8% UPS trades at a premium to both its 5-year Book Value per Share $ 3.44 average NTM P/E multiple and FDX. One Year Price / Volume Chart 5-Year NTM P/E Chart

Annual EPS Growth Lags Peer Growth Expectations From 2014 Analyst Day

$85 $81.6 45% $80 7% CAGR $75 UPS: 6.1% CAGR Revenue $74.3 40% $70

FDX: 18.3% CAGR $65 35% 5% CAGR $60 $58.2 $58.4 $55.4 30% $55 $53.1 $54.1 $50 $49.5 25% 2015: 0.2% $45 growth 20% $40 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

15% $10.00

10% $9.00 $9.12 13% CAGR $8.00 EPS 5% $7.62 $7.00 0% $6.00 9% CAGR 2011 2012 2013 2014 2015 2016E $5.43 $4.75 $5.00 $4.53 $4.57 $4.35 2015: 12.2% UPS FDX $4.00 $3.48 growth $3.00 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Source: Company reports, Stephens estimates and FactSet Research Systems 10 Passenger Airline Industry Overview

Key Themes Industry PRASM Under Pressure

. Investors Focused on PRASM Turning Positive. $12.50 8% 6% $12.00 This key metric remains top of mind for 4% investors, and the stocks have reacted to $11.50 2% 0% $11.00 Company commentary on expectations for -2% 2016 performance. $10.50 -4% -6% $10.00 -8% . Disciplined Capacity Growth. Despite the low $9.50 -10% fuel price environment, airlines have taken a disciplined approach to capacity growth, with a PRASM Y/Y % Change majority coming through up-gauging. YTD, industry ASM growth is 5.3% y/y. Growing Capacity on Fewer Flights

10% . Scenario Analysis. We believe that the 8% structural changes in the airline industry have 6% created an operating environment in which 4% legacy airlines would be profitable throughout 2% an economic cycle. 0% (2%) (4%) . Attractive Valuation. Airline stocks trade at a (6%) significant discount to other asset-heavy (8%) transportation companies, a gap we believe 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 closes over the next 18-24 months. Flights ASM Operating Margin in a Recession Scenario Operating Margin in a Oil Spike Scenario

18% 18% 16% 16% 14% 14% 12% 12% 10% 10% 8% 8% 6% 6% 4% 4% 2% 2% 0% 0%

Attractive NTM P/E Valuation Relative to Other Transportation Verticals

20x 18.4x 18.1x 17.5x 18x 16.7x 15.6x 16x 14x 12x 10x 9.1x 8x 6.5x 6.4x 6.0x 6x 4x 2x 0 x IMC Logistics TL Class 1 Rail LTL LUV AAL UAL DAL Source: DOT data, Stephens estimates and FactSet Research Systems 11 Equal-Weight Rated (AAL) $41 Price Target (Dollars in Millions, Except per Share)

Stock Profile Key Points Ticker AAL . On-going US Airways Integration. AAL is in the Price (as of 8/15/16) $ 34.92 middle-innings of its integration, having Fully Diluted Shares Out (mil.) 606.0 captured all of the expected cost synergies and 52-Week High $ 47.09 about half of the revenue synergies. . Network Operations Improving. Following the 52-Week Low $ 24.85 merger with US Airways, AAL has been Market Cap (mil.) $ 21,161.0 investing heavily in its network, both aircraft Net Debt 15,728.0 and non-aircraft, to improve reliability. While Enterprise Value $ 36,889.0 progress has been made, there is still work to be done over the next couple of years. Average Daily Volume 11,084,591 . Balance Sheet. AAL is taking advantage of low Short Interest (as % of Float) 9.5% interest rates and using debt to finance its Debt/Cap (314.1%) refleeting initiative, which is a different strategy Free Cash Flow per Share N/M than its peers. While leverage has declined due Dividend Yield 1.1% to better financial performance, the Company’s Book Value per Share $ 6.80 debt balance continues to increase. One Year Price / Volume Chart 2-Year NTM P/E Chart

Network Operating Metrics Improving Different Balance Sheet Strategy

$23,000 11x 99% DAL’s On-Time % was 86% 80% 85% Increase $21,000 10x 78% $19,000 9x 98% 76% $17,000 8x $15,000 7x 97% 74% $13,000 6x

72% $11,000 5x 96% $9,000 4x 70% $7,000 3x 95% 68% $5,000 2x 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015

Completion Factor On-Time % Total Debt Debt / LTM EBITDA

Source: Company reports, Stephens estimates and FactSet Research Systems 12 Overweight Rated Delta Air Lines (DAL) $56 Price Target (Dollars in Millions, Except per Share)

Stock Profile Key Points Ticker DAL . Multi-Year EPS Growth Drivers. DAL expects Price (as of 8/15/16) $ 36.35 $2.8 bil. of incremental, high-margin revenue Fully Diluted Shares Out (mil.) 774.6 over the next several years from its Other 52-Week High $ 52.77 Revenue initiatives. In addition, a growing 52-Week Low $ 32.60 International presence is expected to yield additional investment income. Market Cap (mil.) $ 28,157.5 . Variable Cost Model. In a fixed-cost industry, Net Debt 4,853.0 DAL boasts a highly variable cost model, with Enterprise Value $ 33,010.5 ~55% variable costs. A low union presence in its workforce and large number of unencumbered Average Daily Volume 11,189,829 aircraft provide flexibility in the cost structure. Short Interest (as % of Float) 3.0% . Attractive Valuation. DAL trades below Debt/Cap (363.0%) industry peers, its 5-year average NTM P/E Free Cash Flow per Share $ 4,415.00 multiple and other high-quality industrial Dividend Yield 2.2% companies despite expectations for 15%+ EPS Book Value per Share $ 15.12 growth and several internal growth initiatives. One Year Price / Volume Chart 5-Year NTM P/E Chart

EPS Power From Other Revenue Initiatives Variable Cost Business Model Incremental Revenue: Only 18% of workforce is unionized Labor Credit Card $ 1,600 - less work rules, better pay (industry leading wages) Branded Fares 1,200 Provides network efficiency and flexibility Total $ 2,800 - operates oldest fleet in the industry Incremental Margin 85% Unencumbered - lower maintenance expense than peers despite Aircraft older fleet Operating Income $ 2,380 - flexibility to meet customer demand without decreasing utilization Taxes @ 35% 833 ATL is considered a "lower-cost" hub Net Income $ 1,547 - lower landing fees than other major cities Low-Cost Hub - capacity constraint limits competition in key Diluted Shares 775 market - less weather delays allow for increased network Potential EPS Impact $ 2.00 reliability Source: Company reports, Stephens estimates and FactSet Research Systems 13 Overweight Rated Southwest Airlines (LUV) $52 Price Target (Dollars in Millions, Except per Share)

Stock Profile Key Points Ticker LUV . Differentiated Business Model. LUV operates a Price (as of 8/15/16) $ 36.52 point-to-point network with a low-fare model Fully Diluted Shares Out (mil.) 640.1 and only operates one type of aircraft, the 737. 52-Week High $ 51.34 This model reduces the fixed costs associated with a major hub and allows for a flexible flight 52-Week Low $ 32.94 schedule. Market Cap (mil.) $ 23,375.5 . Multi-Year Growth Drivers. LUV renegotiated Net Debt (61.0) its credit card agreement in 3Q15 and has Enterprise Value $ 23,314.5 realized a revenue tailwind of ~$125 mil. per quarter. In addition, the Company is in the Average Daily Volume 8,131,118 midst of modernizing its fleet and plans to Short Interest (as % of Float) 1.8% launch a new domestic reservation system in Debt/Cap 1052.8% 2017. Free Cash Flow per Share $ 1,948.00 . Investment Grade Balance Sheet. LUV is the Dividend Yield 1.1% only airline that boasts an investment grade Book Value per Share $ 12.02 rating from all three major credit agencies. One Year Price / Volume Chart 5-Year NTM P/E Chart

Y/Y RASM Growth More Challenging in 3Q16 Significant Operating Margin Expansion

10% 25% 1,270 bps 8% Improvement 6% 20% 18.5%

4% 15% 2%

0% 10%

(2%) 5.8% 5% (4%) (4%) (6%) 0% 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16E

Source: Company reports, Stephens estimates and FactSet Research Systems 14 Equal-Weight Rated United Continental Holdings (UAL) $54 Price Target (Dollars in Millions, Except per Share)

Stock Profile Key Points Ticker UAL . Network Operational Improvement. Following Price (as of 8/15/16) $ 47.10 its merger with Continental, UAL’s network Fully Diluted Shares Out (mil.) 359.5 performance metrics have lagged peers, which 52-Week High $ 62.21 has weighed on financial results. While network reliability is improving, there is still a large gap 52-Week Low $ 37.41 between UAL and industry leaders. Market Cap (mil.) $ 16,931.8 . Management Team in Transition. UAL’s CEO Net Debt 6,730.0 Oscar Munoz has been in the job since Sept. Enterprise Value $ 23,661.8 2015 but due to health issues, was forced to miss several months and only recently resumed Average Daily Volume 4,937,860 his role. In addition, there has been an interim Short Interest (as % of Float) 3.4% CFO since August 2015. Debt/Cap (115.3%) . Balance Sheet Improving. UAL has significantly Free Cash Flow per Share $ 3,071.00 improved its financial position over the past Dividend Yield 0.0% several years and we believe could be upgraded Book Value per Share $ 21.58 to investment grade in the medium term. One Year Price / Volume Chart 5-Year NTM P/E Chart

Soft 3Q PRASM Guidance $3.1 bil. of Value From Strategic Initiatives

Domestic International Consolidated $3,500 0% $500 $3,000 $800 $2,500 $2,000 $200 $300 $1,500 $1,000

Dollars Dollars mil. in $1,000 (5%) $500 $300 $-

(5.5%)-(7.5%) (5.5%)-(7.5%) (5.5%)-(7.5%)

(10%)

Source: Company reports, Stephens estimates and FactSet Research Systems 15 Logistics Industry Overview

Key Themes Dry Van Rates

2014 2015 2016 5 Year Average . Spot Market Demand. So far in 2016, the $2.60 operating environment remains challenging $2.40 with soft spot market demand. High inventory $2.20

levels, a strong dollar and sluggish industrial $2.00

economy are weighing on demand. $1.80 Dry Van Spot Rates $1.60 . Spot Rates Under Pressure. Loose capacity and

lower y/y fuel prices are weighing on carrier $1.40

1/5 3/9 6/1 8/3

3/30 4/20 5/11 6/22 8/24 9/14 10/5 12/7 1/26 2/16 7/13

10/26 11/16 spot rates. Y/Y rate comparisons get materially 12/28 easier starting in 2H16. After starting soft, Flatbed Rates flatbed spot rates have shown recent strength 2014 2015 2016 5 Year Average with improving PMI data. $2.60

$2.40 . Net Revenue Margin Expansion. Across the $2.20 board, brokers have taken advantage of the soft carrier rates to expand net revenue $2.00

margins. Brokers with more contractual $1.80 Flatbed Spot Rates business (CHRW) have been able to arbitrage $1.60 the declining rates to report outsized y/y

$1.40

3/9 6/1 8/3

margin expansion over the past four quarters. 1/5

2/16 3/30 4/20 6/22 7/13 9/14 10/5 1/26 5/11 8/24 12/7

10/26 11/16 12/28 3PL Market Share (bil.) Manufacturing ISM-PMI Data

$400 65

$350 9% CAGR 60

$300 55

$250 50

$200 45

$150 40

$100 35

30

Asset-Based Trucking Brokerage

Cass Freight Index Inventory Levels Remain Elevated

1.30 1.55 Current: 1.40 1.25 1.50 5-Year Avg:1.30 1.20 1.45 1.15 1.40 1.10 1.35 1.05 1.30 1.00 1.25 0.95 Inventory to Sales 0.90 1.20 0.85 1.15

0.80 1.10

2008 2009 2010 2011 2012 2013 2014 2015 2016

Jul-02 Jul-07 Jul-12

Jan-00 Jan-05 Jan-15 Jan-10

Sep-01 Sep-06 Sep-11

Nov-00 Nov-05 Nov-10 Nov-15

Mar-04 Mar-14 Mar-09

May-03 May-13 May-08 Source: Internet Truckstop, Armstrong and Associates, Cass Transportation Index, FRED data 16 Equal-Weight Rated C.H. Robinson Worldwide (CHRW) $68 Price Target (Dollars in Millions, Except per Share)

Stock Profile Key Points Ticker CHRW . Facing Challenging Margin Comparisons. Price (as of 8/15/16) $ 69.68 CHRW’s contractual business mix has led to y/y Fully Diluted Shares Out (mil.) 143.6 net revenue margin expansion in each of the 52-Week High $ 76.10 past eight quarters. Margins in 2H15 52-Week Low $ 59.71 approached historical levels, creating difficult y/y comparisons beginning in 2Q16. Market Cap (mil.) $ 10,007.9 . Excellent “Rainy Day” Stock. CHRW is a Net Debt 757.9 diversified global logistics company with a Enterprise Value $ 10,765.8 highly variable cost model, which allowed the Company to report y/y EPS growth even during Average Daily Volume 1,567,823 the 2008 recession. This model also generates a Short Interest (as % of Float) 7.8% significant amount of cash flow. Debt/Cap 43.3% . Valuation Historically Attractive. The stock Free Cash Flow per Share $ 4.48 trades below its 5-year average NTM P/E Dividend Yield 2.5% multiple . Book Value per Share $ 8.77 One Year Price / Volume Chart 5-Year NTM P/E Chart

Historically Long Y/Y Margin Expansion Cycle Industry Leading Capital Returns

600 30% 50% 7 Quarters 400 45% 200 25%

0 40%

ROE ROIC

-200 20% 35% 7 Quarters -400

-600 15% 30%

1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16

1Q05 3Q05 1Q06 3Q06 1Q07 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q14 3Q14 1Q15 3Q15 1Q16 3Q07 1Q08 1Q13 3Q13 ROIC ROE

Source: Company reports, Stephens estimates and FactSet Research Systems 17 Overweight Rated ECHO Global Logistics (ECHO) $31 Price Target (Dollars in Millions, Except per Share)

Stock Profile Key Points Ticker ECHO . Continued Market Share Gains. Despite a Price (as of 8/15/16) $ 25.86 sluggish spot market demand environment, Fully Diluted Shares Out (mil.) 29.9 ECHO has reported double-digit organic TL 52-Week High $ 28.49 volume growth in nine consecutive quarters. 52-Week Low $ 16.56 We expect this trend to continue as the ELD mandate begins to tighten capacity. Market Cap (mil.) $ 773.1 . Command Integration On-Going. ECHO is Net Debt 159.9 working through the IT integration and expects Enterprise Value $ 933.0 to “go live” with the new platform around 4Q16. Once implemented, the Company can Average Daily Volume 231,247 begin working to realize the $200 mil.-$300 mil. Short Interest (as % of Float) 10.5% of revenue synergies from the deal. Debt/Cap 35.2% . Investment in Talent. ECHO’s investment in its Free Cash Flow per Share $ 1.62 sales force has contributed to its market share Dividend Yield 0.0% gains. We expect productivity and efficiency of Book Value per Share $ 12.26 the sales force to improve with tenure. One Year Price / Volume Chart 5-Year NTM P/E Chart

Organic Truckload Volume Growth EBITDA Bridge to FY18 Target

40% $160 $16 $150 35% $140 $16 $49 30% $120 25% $100 20% $80 $69 15% $60 10% $40

5% $20 0% $- 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 FY15 Adj. Pro-forma EBITDA From Acquired FY18 Adj. EBITDA Organic Revenue EBITDA EBITDA Target CHRW ECHO EBITDA Synergies Growth Source: Company reports, Stephens estimates and FactSet Research Systems 18 Overweight Rated Forward Air Corporation (FWRD) $54 Price Target (Dollars in Millions, Except per Share)

Stock Profile Key Points Ticker FWRD . Dominant Market Position. Following its Price (as of 8/15/16) $ 45.83 acquisition of Towne (FWRD’s largest Fully Diluted Shares Out (mil.) 30.8 competitor), we estimate that FWRD has ~45% 52-Week High $ 50.47 market share of its core Airport-to-Airport market with superior geographic density to its 52-Week Low $ 36.00 competitors. Market Cap (mil.) $ 1,412.2 . Opportunity for Meaningful Pricing Power. We Net Debt 34.9 expect continued core linehaul yield Enterprise Value $ 1,447.2 improvement in FY16 as FWRD benefits from its repricing of Towne freight and the elimination Average Daily Volume 201,790 of a notorious low-cost provider from the Short Interest (as % of Float) 2.2% market. Debt/Cap 10.4% . Supplementing Organic Growth With M&A. Free Cash Flow per Share $ 2.71 FWRD has utilized its balance sheet to drive EPS Dividend Yield 1.0% growth in recent years, a trend we expect to Book Value per Share $ 15.84 continue in FY16. One Year Price / Volume Chart 5-Year NTM P/E Chart

Core Linehaul Pricing Trend Potential M&A to Expand Footprint

5% 4.4% 4.0% 4.2% 4% 3.5% 3% 2.7% 2.5%

2% 1.3% 1% 0.5% 0% (0.1%) (1%) (0.3%)

(2%) (1.6%) (3%)

(4%) (3.5%)

Source: Company reports, Stephens estimates and FactSet Research Systems 19 Equal-Weight Rated Landstar Systems, Inc. (LSTR) $69 Price Target (Dollars in Millions, Except per Share)

Stock Profile Key Points Ticker LSTR . Significant Leverage to Industrial End Markets. Price (as of 8/15/16) $ 68.22 LSTR’s flatbed business (~38% of revenue) Fully Diluted Shares Out (mil.) 42.5 exposes the Company to changes (and current 52-Week High $ 72.97 softness) in the domestic industrial economy. . Differentiated Business Model. LSTR operates 52-Week Low $ 53.03 an agent based network that utilizes both in- Market Cap (mil.) $ 2,896.8 house owner operators and 3rd party carriers. Net Debt (96.0) This model has leverage (both positive and Enterprise Value $ 2,800.9 negative) to fluctuations in spot market carrier rates. Average Daily Volume 358,968 . Balance Sheet/Cash Flow/ Capital Returns. The Short Interest (as % of Float) 7.6% Company has a solid balance sheet with net Debt/Cap 19.3% cash of $92.9 mil. LSTR’s business model Free Cash Flow per Share $ 5.33 generates a significant amount of free cash Dividend Yield 0.5% flow, which the Company uses to pay its Book Value per Share $ 11.60 quarterly dividend and repurchase shares. One Year Price / Volume Chart 5-Year NTM P/E Chart

End Market Mix Solid Return and Cash Flow Profile

As % of Revenue Y/Y Revenue $250 40% End Market 2Q16 2Q15 Growth 38% Consumer Products/Appliances/Furniture 18.6% 20.4% $200 36%

Machinery 14.8% 14.6% 34% $150 32% Automotive 11.8% 9.1% 30% Building Products 8.6% 9.6% $100 28% Metals 6.8% 7.0% 26%

AA&E, Hazmat 7.5% 8.0% $50 24% 22% Foodstuffs 5.2% 5.1% $- 20% Energy 4.0% 3.0% 2008 2009 2010 2011 2012 2013 2014 2015

Other 22.7% 23.2% Free Cash Flow ROIC Source: Company reports, Stephens estimates and FactSet Research Systems 20 Equal-Weight Rated World Fuel Services Corp. (INT) $49 Price Target (Dollars in Millions, Except per Share)

Stock Profile Key Points Ticker INT . Tepid Organic EPS Growth. From 2010-2015, Price (as of 8/15/16) $ 45.37 INT’s EPS CAGR was ~4%. That said, after Fully Diluted Shares Out (mil.) 70.7 adjusting for the acquisitions made during this 52-Week High $ 51.01 time, we believe the organic EPS CAGR was actually -2%. 52-Week Low $ 34.30 . Challenging Marine Market Conditions. The Market Cap (mil.) $ 3,209.0 lack of price volatility and low commodity prices Net Debt 59.3 are weighing on results in INT’s core Marine Enterprise Value $ 3,268.3 business. In addition, the Company has seen limited demand for its hedging services. Average Daily Volume 394,215 . M&A Pipeline. We expect INT to remain active Short Interest (as % of Float) 3.8% with its M&A growth strategy. In our opinion, Debt/Cap 29.0% we believe the Land business or Aviation Free Cash Flow per Share $ 6.03 business provide the most attractive Dividend Yield 0.5% opportunity given INT’s relatively small market Book Value per Share $ 28.13 position. One Year Price / Volume Chart 5-Year NTM P/E Chart

Recent M&A Transactions Volume Growth Not Equating to EPS Growth Date Target Purchase Price (mil.) 30% Dec-10 Nordic Camp Supply $69 25% Jan-11 Ascent Aviation Group $42 20% Jun-01 Yacht Fuel Services $3 15% Dec-12 Multi Service Corp $137 10% Jan-14 Watson Petroleum $192 5% Jul-14 Colt International $63 0% Oct-15 Pester Marketing $70 (5%) Oct-15 Aircraft Fueling Locations $10 (10%) Feb-16 Aircraft Fueling Locations $260 (15%) Jun-16 PAPCO 2011 2012 2013 2014 2015 Jun-16 APP Inc. Y/Y Volume Growth Y/Y EPS Growth

Source: Company reports, Stephens estimates and FactSet Research Systems 21 Underweight Rated XPO Logistics (XPO) $24 Price Target (Dollars in Millions, Except per Share)

Stock Profile Key Points Ticker XPO . Integration Risk. We believe there is significant Price (as of 8/15/16) $ 36.20 risk with XPO’s roll-up strategy and question Fully Diluted Shares Out (mil.) 160.4 the level of integration between the businesses. 52-Week High $ 41.28 In addition, the Company is attempting to integrate the two largest acquisitions in its 52-Week Low $ 18.04 history at the same time. Market Cap (mil.) $ 5,805.7 . Significant Industrial Exposure. XPO’s Net Debt 5,086.0 acquisition of Con-way and Norbert significantly Enterprise Value $ 10,891.7 increased the Company’s exposure to both the domestic and European industrial economies. Average Daily Volume 1,922,109 These two acquisitions also increased the Short Interest (as % of Float) 18.3% cyclicality and asset-intensity of XPO’s business. Debt/Cap 64.0% . Balance Sheet. XPO has used a mixture of debt Free Cash Flow per Share N/M and equity to fund its growth strategy. As a Dividend Yield 0.0% result, the Company has net debt of $5.1 bil., Book Value per Share $ (32.06) which is 4.0x levered on its FY16 EBITDA guide. One Year Price / Volume Chart Recent Events Timeline Date Event Purchase Price (mil.) Category Jul-14 New Breed Logistics $615 Acquisition Jul-14 Atlantic Central Logistics $37 Acquisition Aug-14 Senior Note Offering $500 Debt Raise Sep-14 Equity Private Placement $700 Equity Raise Feb-15 Senior Note Offering $400 Debt Raise Feb-15 UX Specialized Logistics $59 Acquisition Apr-15 Norbert Dentressangle SA $3,500 Acquisition May-15 Bridge Terminal Transport $100 Acquisition Jun-15 Equity Private Placement $1,260 Equity Raise Jun-15 Senior Note Offering $2,000 Debt Raise Sep-15 Con-way $3,020 Acquisition 2015 FCF as a % of EBITDA NTM EV/EBITDA Multiples

60% 12x 50% 9.7x 10x 40% 9.0x 8.4x 30% 8x 7.0x 20% 6.0x 10% 6x 5.6x

0% 3.9x 4x (10%) (20%) 2x (30%) (40%) 0 x XPO TL Rail LTL Airlines IMC Logistics Airlines LTL TL XPO IMC Logistics Rail

Source: Company reports, Stephens estimates and FactSet Research Systems 22 Maritime Industry Overview

Key Themes Transpacific Eastbound Container Rate

Rate per FEU Y/Y Change . Prefer Niche Providers With Competitive $3,000 100% 80% Advantages. Amid a challenging ocean freight $2,500 60% and domestic barging operating environment, 40% $2,000 we prefer high-quality, market leaders. 20% 0%

$1,500 Y/YChange -20% -40% . Overcapacity in Non Jones Act Lanes. The (FEUs) Rate Container $1,000 global ocean freight market, excluding Jones -60% Act lanes, is in a state of structural overcapacity $500 -80% with sluggish demand trends.

. Rates Under Significant Pressure. Overcapacity Asia-to-Europe Container Rate

is weighing on global ocean freight spot market Rate per TEU Y/Y Change carrier rates, especially in the important $4,000 250% $3,500 200% Transpacific Eastbound lane and the Asia-to- $3,000 150% Europe trade lane. $2,500 100% $2,000 50% $1,500 . Chemical Demand Remains Robust. Due to low Y/YChange 0% domestic natural gas prices, chemical demand (TEUs) Rate Container $1,000 and utilization remains high. In addition, we are $500 -50% in the early stages of a planned $100 bil. $- -100% domestic petrochemical plant buildout. West Coast Port Inbound Container Volume Hawaii Construction Data

$4,000 70% Total Inbound Container Volume Y/Y% change 900,000 50% 65% 800,000 40% $3,500 60% 700,000 30% 55% $3,000 600,000 20% 50% 500,000 10% 45% 400,000 0% $2,500

Y/Y Change % 40% 300,000 (10%) 35% Inbound Inbound Container Volume 200,000 (20%) $2,000 30% 100,000 (30%) 0 (40%) $1,500 25% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Private Building Permits % Residential Permits

Chemical Capacity Utilization Rail Chemical and Oil Volume

85 Petroleum & Petroleum Products Chemicals 40,000

80 35,000

30,000 75 25,000

70 20,000

15,000

65 Shipments Weekly

% of Total Prod. Capacity Utilized Capacity Prod. Total of% 10,000

60 5,000

0

Jul-07 Jul-12

Apr-06 Oct-08 Oct-13 Apr-16 Apr-11

Jan-05 Jun-10 Jan-15 Jun-05 Jan-10 Jun-15

Mar-09 Feb-12 Feb-07 Mar-14

Nov-05 Sep-06 Dec-07 Aug-09 Nov-10 Sep-11 Aug-14 Nov-15 Dec-12 May-13 May-08 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: Drewry, UHERO, Port of Long Beach, Port of Oakland, Port of Los Angeles, FactSet Research Systems, FRED data 23 Overweight Rated Kirby Corporation (KEX) $63 Price Target (Dollars in Millions, Except per Share)

Stock Profile Key Points Ticker KEX . Core Market Stabilization. We believe Price (as of 8/15/16) $ 53.93 fundamentals in the core Inland Marine market Fully Diluted Shares Out (mil.) 53.5 have stabilized. Utilization remains high and 52-Week High $ 73.25 contract pricing was flat sequentially. The number of crude barges being returned has 52-Week Low $ 44.63 flattened, potentially signaling a bottom in that Market Cap (mil.) $ 2,885.3 end market. Net Debt 720.8 . Capital Allocation. KEX has been aggressive Enterprise Value $ 3,606.0 repurchasing shares, which the Company views as the best use of its cash. That said, we expect Average Daily Volume 764,522 KEX to remain opportunistic should an M&A Short Interest (as % of Float) 9.2% option materialize. Debt/Cap 23.2% . Domestic Petrochem Build. Given its market Free Cash Flow per Share $ (0.19) position and customer base, KEX is positioned Dividend Yield 0.0% to capture its share of the expected petrochem Book Value per Share $ 43.32 market share growth in 2017-2019. One Year Price / Volume Chart 5-Year NTM P/E Chart

Inland Marine Fundamentals Efficient Capital Structure

$3,500 45% 96% 10% 94% $3,000 40% 5% 92% $2,500 35%

90% 0% $2,000 30% 88% $1,500 25% 86% (5%) $1,000 20% 84% (10%) 82% $500 15%

80% (15%) $- 10%

2007 2008 2009 2010 2011 2012 2013 2014 2015

1Q07 3Q07 1Q08 3Q08 1Q09 3Q10 1Q11 3Q11 1Q12 3Q12 3Q13 1Q14 3Q14 1Q15 3Q15 3Q09 1Q10 1Q13 1Q16 Total Capitalization Debt/Cap Utilization Y/Y Contract Pricing

Source: Company reports, Stephens estimates and FactSet Research Systems 24 Overweight Rated Matson, Inc. (MATX) $45 Price Target (Dollars in Millions, Except per Share)

Stock Profile Key Points Ticker MATX . Hawaii Market Share Gains. MATX’s Hawaii Price (as of 8/15/16) $ 36.55 container volume grew in 2015 due to a Fully Diluted Shares Out (mil.) 43.5 competitor’s network reconfiguration and 52-Week High $ 53.18 increased demand from poor service. We believe this shift could be permanent and lead 52-Week Low $ 30.54 to the permanent deployment of an 11th vessel. Market Cap (mil.) $ 1,590.7 . Platform for Growth in Alaska. MATX Net Debt 443.6 continues to expect its Alaska business to be a Enterprise Value $ 2,034.3 driver of EPS and cash flow growth over the next several years. The Company guided to Average Daily Volume 238,963 $0.45 of EPS accretion and ~$1.05 per share of Short Interest (as % of Float) 2.7% cash flow. Debt/Cap 51.6% . New Competition. Two competitors recently Free Cash Flow per Share $ 2.27 announced competing service in two of MATX’s Dividend Yield 2.1% trade lanes, one in Guam and the other in the Book Value per Share $ 9.90 expedited China Eastbound lane (CLX). One Year Price / Volume Chart 5-Year NTM P/E Chart

Hawaii Container Volume and Fleet Size EPS Scenario Analysis From New Competition % Revenue Decline 180 12 China 5.0% 7.5% 10.0% 12.5% 15.0% 170 11 80% $ 0.07 $ 0.11 $ 0.15 $ 0.18 $ 0.22 160 85% 10 $ 0.08 $ 0.12 $ 0.16 $ 0.19 $ 0.23 150 90% $ 0.08 $ 0.12 $ 0.16 $ 0.21 $ 0.25 140 9 95% $ 0.09 $ 0.13 $ 0.17 $ 0.22 $ 0.26 130

8 Margin Decremental 100% $ 0.09 $ 0.14 $ 0.18 $ 0.23 $ 0.27 120 7 % Revenue Decline 110 Guam 2.5% 5.0% 7.5% 10.0% 12.5% 100 6 80% $ 0.07 $ 0.14 $ 0.21 $ 0.28 $ 0.35 85% $ 0.07 $ 0.15 $ 0.22 $ 0.30 $ 0.37 90% $ 0.08 $ 0.16 $ 0.24 $ 0.32 $ 0.39 Container Volume (000) # Ships Deployed 95% $ 0.08 $ 0.17 $ 0.25 $ 0.33 $ 0.42

Decremental Margin Decremental 100% $ 0.09 $ 0.18 $ 0.26 $ 0.35 $ 0.44 Source: Company reports, Stephens estimates and FactSet Research Systems 25 Estimate Comparison: Stephens vs. the Street

3Q16 Estimate FY16 Estimate FY17 Estimate Stephens Street Diff. Stephens Street Diff. Stephens Street Diff. Airfreight AAWW $ 1.00 $ 1.10 $ (0.10) $ 4.56 $ 4.55 $ 0.01 --- $ 5.14 N/A ATSG $ 0.15 $ 0.15 $ 0.00 $ 0.69 $ 0.61 $ 0.08 $ 1.01 $ 0.94 $ 0.06 EXPD $ 0.62 $ 0.65 $ (0.02) $ 2.37 $ 2.43 $ (0.06) $ 2.53 $ 2.57 $ (0.04) FDX $ 2.73 $ 2.79 $ (0.06) $ 12.00 $ 11.97 $ 0.04 $ 13.15 $ 13.38 $ (0.23) UPS $ 1.40 $ 1.44 $ (0.03) $ 5.80 $ 5.80 $ 0.00 $ 6.10 $ 6.18 $ (0.08) Airlines AAL $ 1.55 $ 1.56 $ (0.01) $ 5.52 $ 5.43 $ 0.10 $ 5.29 $ 4.89 $ 0.40 DAL $ 1.74 $ 1.79 $ (0.04) $ 5.88 $ 5.87 $ 0.01 $ 6.20 $ 5.84 $ 0.36 LUV $ 0.85 $ 0.93 $ (0.08) $ 3.73 $ 3.86 $ (0.13) $ 4.20 $ 3.94 $ 0.25 UAL $ 2.81 $ 2.87 $ (0.06) $ 8.00 $ 7.98 $ 0.02 $ 7.00 $ 6.78 $ 0.22 Logistics CHRW $ 0.94 $ 0.96 $ (0.03) $ 3.62 $ 3.69 $ (0.07) $ 3.57 $ 3.87 $ (0.31) ECHO $ 0.33 $ 0.34 $ (0.00) $ 1.23 $ 1.18 $ 0.05 $ 1.45 $ 1.45 $ (0.00) FWRD $ 0.63 $ 0.63 $ (0.00) $ 2.31 $ 2.34 $ (0.02) $ 2.65 $ 2.65 $ 0.00 INT $ 0.70 $ 0.69 $ 0.01 $ 2.69 $ 2.61 $ 0.08 $ 3.20 $ 3.28 $ (0.08) LSTR $ 0.82 $ 0.81 $ 0.01 $ 3.07 $ 3.09 $ (0.02) $ 3.47 $ 3.43 $ 0.04 XPO $ 0.38 $ 0.37 $ 0.01 $ 0.95 $ 0.98 $ (0.03) $ 1.78 $ 1.75 $ 0.03 Maritime KEX $ 0.52 $ 0.60 $ (0.07) $ 2.45 $ 2.65 $ (0.19) $ 2.30 $ 2.84 $ (0.54) MATX $ 0.70 $ 0.67 $ 0.03 $ 2.02 $ 2.04 $ (0.02) $ 2.40 $ 2.46 $ (0.06)

Source: Stephens estimates and FactSet Research Systems Note: FDX fiscal year end is 5/31 Note: Estimates reflect operating EPS for AAWW, ATSG, AAL, DAL, LUV, UAL, ECHO, FWRD, INT and XPO.

Short Interest as a % Of Float

18.3% 10.5% 9.5% 9.2% 7.8% 7.6% 6.5% 4.3% 3.8% XPO ECHO AAL KEX CHRW LSTR EXPD AAWW INT

3.4% 3.0% 2.7% 2.4% 2.2% 1.9% 1.8% 1.3% UAL DAL MATX ATSG FWRD UPS LUV FDX

Source: Stephens estimates and FactSet Research Systems 26 Disclosures

Other Companies Mentioned: Amazon.com, Inc. AMZN $ 760.77

REQUIRED DISCLOSURES

The research analyst principally responsible for preparation of this presentation has received compensation that is based on the firm’s overall revenue which includes investment banking revenue. Rating Definitions: Company Stock Ratings: OVERWEIGHT (O) – The stock’s total return is expected to be greater than the total return of the company’s industry sector, on a risk-adjusted basis, over the next 12 months. EQUAL-WEIGHT (E) – The stock’s total return is expected to be equivalent to the total return of the company’s industry sector, on a risk-adjusted basis, over the next 12 months. UNDERWEIGHT (U) – The stock’s total return is expected to be less than the total return of the company’s industry sector, on a risk-adjusted basis, over the next 12 months. VOLATILE (V) – The stock’s price volatility is potentially higher than that of the company’s industry sector. The company stock ratings may reflect the analyst’s subjective assessment of risk factors that could impact the company’s business.

Distribution of Stephens Inc.'s Ratings (as of6/30/16) % Investment Banking Clients Rating % (Past 12 Months) BUY 55 19 HOLD 43 11 SELL 2 0

OTHER DISCLOSURES

This presentation has been prepared solely for informative purposes as of its stated date and is not a solicitation, or an offer, to buy or sell any security. It does not purport to be a complete description of the securities, markets or developments referred to in the material. Information included in the presentation was obtained from internal and external sources which we consider reliable, but we have not independently verified such information and do not guarantee that it is accurate or complete. Such information is believed to be accurate on the date of issuance of the presentation, and all expressions of opinion apply on the date of issuance of the presentation. No subsequent publication or distribution of this presentation shall mean or imply that any such information or opinion remains current at any time after the stated date of the presentation. We do not undertake to advise you of any changes in any such information or opinion. Prices, yields, and availability are subject to change with the market. Nothing in this presentation is intended, or should be construed, as legal, accounting, regulatory or tax advice. Any discussion of tax attributes is provided for informational purposes only, and each investor should consult his/her/its own tax advisors regarding any and all tax implications or tax consequences of any investment in securities discussed in this presentation. Please note that we provide supplemental news and analysis in Quick Takes blogs available to clients on our website. If applicable, when reading research on Business Development Companies, you should consider carefully the investment objectives, charges, risks, fees and expenses of the investment company before investing. The prospectus, and, if available, the summary prospectus, contain this and other information about the investment company. You can obtain a current prospectus, and, if available, a summary prospectus, by calling your financial consultant. Please read the prospectus, and, if available, the summary prospectus, carefully before investing as it contains information about the previous referenced factors and other important information. Also, please note other reports filed with the Securities and Exchange Commission by the relevant investment company at www.sec.gov. Additional information available upon request.

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