Seaport Global Securities LLC October 8, 2018

Equity Sales & Trading Toll-Free: (855) 447-3100 Seaport Global Equity Research
Research: (949) 274-8052
www.seaportglobal.com Justin Cable
Director of Equity Research
jcable@seaportglobal.com
(949) 274-8055

Seaport Global Morning Notes

Research Highlights:
**Energy** Seaport Global Calendar
● Topical Seaport Global Non-Deal Roadshows
10/08 FSS in New York
○ Reports: Seaport Global Energy Daily
○ Comments: EPIC NGL pipeline follow-up – Permian debottlenecking taking shape earlier Industry Events
10/10 Remodeling Show/Deck Expo
than expected with EPIC conversion in Baltimore
● Oilfield Services & Equipment
Seaport Global Presentations
○ Reports: Seaport Global OFS Comp Sheets; Seaport Global Energy Daily 10/16-10/18 Kevin Sterling Presenting at
○ Comments: BHGE US rig count declines by two as land rigs decline by three the 3Pl Value Creation North
● Exploration & Production America Summit 2018 in
Chicago.
○ Reports: Seaport Global E&P Comp Sheets; Seaport Global Energy Daily
Seaport Global Marketing
○ Comments: ESTE (Tacks on 2.7K net Midland acres at <$6K/acre; latest completions 10/09-10/10 Matt McCall on the West
impress) Coast
● Energy Infrastructure/MLPs 10/10 Kevin Sterling in Boston
10/15-10/16 Matt McCall in Montreal and
○ Reports: Pipes, Tanks, Ships & Rails - a weekly Energy Infrastructure review Toronto
● Coal 10/16-10/17 Josh Sullivan in New York
○ Reports: BTU (Updated thoughts post our call with management) 10/19 Walter Liptak in Detroit

Click here to see our full Seaport Global

**Industrials** Calendar
● Diversified Industrials
○ Reports: Transportation & Industrial Statistical Weekly; T&I Insights (FSS)
● Aerospace & Defense
○ Reports: Weekend wrap-up A&D reading: Progress payment changes halted, KC-390
challenges C-130 dominance, AUSA next week
○ Comments: AIR, ARNC, ATI, BA, BWXT, CACI, CRS, CSTM, FLIR, HII, HRS, KALU,
KEYW, KTOS, SAIC
● Building Products & Furnishings
○ Reports: AYI (FQ4 Update: Inflation and tariffs added to margin pressures)
● Metals & Mining
○ Reports: CLF (Expecting in-line to modest beat for Q3; raising price target to $14)
**Transportation**
● Maritime
○ Reports: Weekly Shipping Chartbook (NAT, GOGL)

Energy
• Seaport Global Energy Daily (10-08-18) – EPIC NGL Pipeline, ESTE, BHGE Rig Count, E&P
and OFS Comps, Energy Infrastructure Weekly
• Peabody Energy Corporation (NYSE: BTU; $35.35; Neutral; NA PT) Updated thoughts
post our call with management

Industrials
• Transports & Industrials Insights (10-08-18) - AYI, CLF, FSS, GOGL, NAT and more
• Weekend wrap-up A&D reading: Progress payment changes halted, KC-390 challenges
C-130 dominance, AUSA next week

Transportation
• Weekly Shipping Chartbook
*Prices above reflect prices on published reports; otherwise current.

SEE ANALYST CERTIFICATION AND OTHER IMPORTANT DISCLOSURES ON PAGES 9 - 11 OF THIS REPORT.
Seaport Global Morning Notes October 8, 2018

Energy

Energy Report Energy

Seaport Global Energy Daily

Seaport Global Energy Daily (10-08-18) – EPIC NGL Pipeline, ESTE, BHGE Rig Count, E&P and OFS Comps,
Energy Infrastructure Weekly
Highlights
Seaport Global Energy Daily (10-08-18) – EPIC NGL pipeline follow-up; ESTE comments; BHGE rig count; E&P and OFS Comps; Energy
Infrastructure Weekly
TOPICAL
● EPIC NGL pipeline follow-up – Permian debottlenecking taking shape earlier than expected with EPIC conversion: As we called for
in our 10/01 Energy Daily, last Friday saw the official announcement that EPIC’s 400 Mbpd Y-Grade NGL line has been green-lighted to be
temporarily converted to a crude line upon commissioning by Q3:19, adding much-needed breathing room ahead of major capacity additions
slated for late 2019/early 2020. Additionally, the Permian leg of EPIC’s crude oil line – currently under construction toward a January 2020 in-
service date – has also been upsized to 900 Mbpd from its original capacity of 600 Mbpd. Taken in tandem with PAA’s Sunrise expansion – a
500 Mbpd proposition that was recently fast-tracked to Q4:18 (vs. January 2019 initially) – we think debottlenecking is happening at a faster
pace than many had anticipated, paving the way for differentials to improve sooner than previously expected, and strengthening the case for
the end of the anti-Permian trade, which has left the group underperforming the XOP by 13% YTD. With this backdrop, we fully expect Friday’s
outperformance to continue (Permian E&P basket up 1.2% vs. Bakken/Eagle Ford peers), and we remain advocates of a rotation back into the
group ahead of these meaningful takeaway additions materializing.
○ SGS Permian E&P favorites: WPX, FANG, CDEV, LLEX, PE, AXAS, HK, JAG, ESTE, ROSE.
○ SGS Permian OFS favorites: HAL, CJ, PTEN, WTTR.
OFS
● BHGE US rig count declines by two as land rigs decline by three: The US rig count decreased by two to 1,052 as land rigs decreased
by three to 1,026, offshore rigs increased three to 23, and inland waters rigs decreased by two. Directional and horizontal rigs each declined
by three, with vertical increasing four. Increases were seen in the Marcellus (+1) and Mississippian (+3), while the Cana Woodford (-1), DJ-
Niobrara (-1), Eagle Ford (-1), Permian (-1), and Williston (-1) saw declines. Despite continuing Permian takeaway issues, the rig count in the
basin has remained relatively stable, ranging between 475 and 490 rigs during Q3:18. We expect the rig count to remain relatively range-bound
as operators weigh Permian takeaway constraints and 2018 budget exhaustion against the compelling economics of highly efficient drilling
programs and building DUCs into what should be a greatly improved backdrop in 2019.

Horizontal Rig Count Oil and Gas Rig Counts

1,000 1000
900 900
800 800
700
700 600
600 500
500 400
400 300
200
300
100
200 0
100
0

Oil Rigs Gas Rigs

Permian Rig Count Other Major Basin Rig Counts

600 100
90
500 80
70
400 60
50
300 40
30
200 20
10
100 0

Cana Woodford Eagle Ford Haynesville Marcellus Williston

Source: Baker Hughes, a GE Company, Seaport Global Securities

● OFS comp sheets – Five techniques to analyze our 34 OFS stocks under coverage: We provide our updated trading comps on the 34
oilfield services stocks under coverage for the week ending October 5, 2018. We include five pages of charts showing (1) valuation multiples,
(2) financial ratios, (3) estimate revisions, (4) stock performance, and (5) contrarian indicators. Full Report.
E&P
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Seaport Global Securities LLC Equity Research Page 2

Seaport Global Morning Notes October 8, 2018

● ESTE comments – Tacks on 2.7K net Midland acres at <$6K/acre; latest completions impress ($9.03; Buy; $15 PT): This morning, ESTE
announced a Midland Basin acreage swap, exchanging 1,222 net non-op central Glasscock County acres (avg WI 39%) plus $27.8MM cash
in exchange for 3,899 net operated Reagan County acres (avg WI ~100%) and 350 boepd of associated production. Assuming $35K-$40K/
flowing boe on acquired production, we estimate ESTE paid ~$5.2K-$5.8K/acre for the incremental 2,667 net acres. In total, ESTE now holds
~30K net Midland Basin acres, 23.3K of which are operated by the company. Also in the release, ESTE provided an update on its drilling
and completion schedule which remains on track with its prior plans. Additionally, the company provided rates on: (1) an Upton County Lower
Wolfcamp B 7,453 ft. lat. which most recently produced 1,875 boepd (87% oil) after 10 days of production with production still increasing to
peak; and (2) an extended 75 day rate of ~1,480 boepd (90% oil) on the company’s “WTG Unit 4-232 A 2BL” Lower Wolfcamp B completion.
As for our stock thoughts, we continue to see ESTE as one of the more attractive valuation stories in the E&P space with an implied valuation
of <$13K/net Midland Basin acre.
● E&P comp sheets – 14 pages of trading comps on 77 E&P stocks covering 110 financial metrics for the week ending October 5,
2018. Full Report.
Energy Infrastructure/MLPs
● Pipes, Tanks, Ships & Rails – a weekly Energy Infrastructure review: In the current issue of the Energy Infrastructure weekly, we review: (1)
Shell Canada’s positive FID on the 14 MTPA Canada LNG project, which supports TRP’s Coastal GasLink pipeline project and also compare it
with the US LNG liquefaction projects; and (2) EPIC’s decision to convert the phase 3 of its NGL pipeline to crude service to provide additional
and quicker debottlenecking of the Permian crude oil transportation restrictions. Our weekly also includes comprehensive comp tables for the
~55 MLP/infrastructure names that we follow along with a review of commodity prices and sector equity and debt performance. Full Report.

Seaport Global Calendar

Seaport Global Events
● 11/12 | Seaport Global San Francisco Energy Day
● 03/20-03/21 | Seaport Global Annual Transports & Industrials Conference in Miami, FL
Seaport Global Non-Deal Roadshows
● 11/06-11/07 | NE in Boston and New York City
● 11/13 | NOG in Los Angeles
● 12/10-12/11 | ATO in the Midwest
Seaport Global Marketing
● 10/22-10/23 | Sunil Sibal (Energy Infrastructure) in Dallas
● 11/13 | Mark Levin (Coal) in Boston
● 12/04 | Mark Levin (Coal) in Toronto

Seaport Global Energy Research (713) 658-6302 energyresearch@seaportglobal.com

Mike Kelly, CFA (713) 658-6302 mkelly@seaportglobal.com
Stephane Aka (713) 658-6329 saka@seaportglobal.com
John Aschenbeck (713) 658-6343 jaschenbeck@seaportglobal.com
Mike Urban (713) 658-6341 murban@seaportglobal.com
Patrick Sun, CFA (713) 658-6340 psun@seaportglobal.com
Mark A. Levin (804) 939-5262 malevin@seaportglobal.com
Nathan P. Martin (804) 939-5265 nmartin@seaportglobal.com
Sunil Sibal (646) 832-3226 ssibal@seaportglobal.com
Michael J. Harrison, CFA (312) 706-2717 mharrison@seaportglobal.com
Derek Hernandez (212) 616-7759 dhernandez@seaportglobal.com
• To access the complete report with disclosures, click here: 2018-10-08 Seaport Global Energy Daily

Peabody Energy Corporation (NYSE: BTU; $35.35; Neutral; NA PT) Energy

Company Update
50.00 7.00 Market Cap: $4,454MM Estimates 2017 2018 2019
6.00 Average Daily Volume: 1,317k Operating $10.64A $3.63E $0.04E
40.00
5.00 Float: 120.2MM EPS (Adjusted)
30.00 Diluted Shares: 126.0MM EBITDA (Adjusted) $1,503A $1,394E $836.0E
4.00

20.00 3.00 Short Interest: 2.9MM Prices are as of the published report date; otherwise current.
2.00 52 Week Range: $47.84 - $28.08
10.00
1.00 Cash and Investments: $1,452MM
0.00 0.00 Debt: $1,403MM
11-2017

12-2017

01-2018

02-2018

03-2018

04-2018

05-2018

06-2018

07-2018

08-2018

09-2018

10-2018

Pr Vol Enterprise Value: $4,405MM

Updated thoughts post our call with management

Summary: Yesterday, we spoke at length with Peabody Energy (BTU) to discuss numerous issues, including the recent fire at the North Goonyella
Mine, the pending Shoal Creek met coal acquisition, and widening quality spreads in the Australian thermal coal market. While the conversation
helped us refine our thoughts on what 2019 might look like under several different scenarios, we have yet to update our estimates, awaiting
further clarity on several of these issues. Among the coal names we cover, no name has more question marks than BTU at this point. We discuss
what we mean below.

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Seaport Global Securities LLC Equity Research Page 3

Seaport Global Morning Notes October 8, 2018

Highlights
Real clarity on North Goonyella could take days, weeks or months. According to the company, it could be days, weeks or even months
before they know if the fire underground has been extinguished. It may take even longer before they are able to assess what caused the fire.
Right now, the company and various other constituencies are doing everything they can to evaluate the situation. With that said, they are in no
position to provide any meaningful guidance to the Street about what the impact could be, at least not yet. It is this uncertainty that caused us to
downgrade the stock last week. Since the company’s first 8-K mentioning elevated gas levels at the mine, the stock has shed roughly $900MM of
market cap. Bulls on the stock believe the market has already wiped out the full value of North Goonyella. While there is mathematical credibility
to that argument (particularly because the Shoal Creek acquisition almost fully offsets the EBITDA loss), we still think there needs to be further
clarity on the issue (and several others) before the stock can outperform others in the space.
EBITDA impact isn’t as bad as originally postulated. In a note published earlier this week, we mentioned that the North Goonyella Mine
could contribute as much as $250MM of annual EBITDA at a $200/mt met price (today's price is $216/mt). After speaking to the company, we
are revising that estimate. According to the company, North Goonyella’s 2.9MM tons of annual production in 2017 was more of an anomaly.
Production at the mine is more like 2.5MM tons/year on a normalized basis (although it's recently been as low as 1.6MM tons in 2016). From a
cost perspective, we had assumed $90/st, or the midpoint of the company’s met coal cost guidance. However, the mine’s cash costs are likely
between $105-$110/st. Once we make these changes, the annual EBITDA impact is closer to $220MM at the current benchmark met price of
$216/mt, $170MM at the SGX forward curve price of $194/mt, and $127MM at a $175/mt met price. Given North Goonyella won’t produce in
Q4 and an average YTD quarterly benchmark met price of $207/mt, we think the asset likely has contributed somewhere around $135MM of
EBITDA 2018 YTD.
What might met coal realizations look like when North Goonyella isn’t producing? We think the company’s met coal price capture rate (i.e.,
BTU's met price realization/benchmark met price) declines from 63% when North Goonyella is producing to 54% when the mine isn’t producing.
The big delta reflects the fact that North Goonyella's product gets benchmark or near benchmark prices. How do we arrive at these figures? Using
the midpoint of current capture rate guidance for hard coking coal and PCI (the company guides to 85%-90% capture rates for both products)
and applying a 35% discount to the benchmark met price to arrive at our PCI price, the overall realization, including North Goonyella, would be
~63% of the benchmark. Of the ~5MM tons of hard coking coal we currently model for 2019, if we back out 3MM tons that capture 100% of
the benchmark price, it implies the remaining 2MM tons would be capturing only 69%. Adjusting the realization to that value and reducing hard
coking coal tons to 2MM tons, we arrive at an all-in realization of 54%. As for the cost impact on the met coal platform, it’s a little less clear. On
one hand, the company would have 25% less met tons over which to spread its fixed costs. On the other, North Goonyella’s cash costs are well
above the company average. Where do we come down on the issue of higher versus lower costs ex North Goonyella? We think BTU's overall
Australian met coal cash costs would likely be lower without North Goonyella production than with it.
Shoal Creek should offset most of the damage to EBITDA. Several weeks ago, BTU announced the acquisition of the Shoal Creek mid-
vol met coal asset in Alabama for $400MM. Based on annual production of 2.1MM tons, the current HV-A spot price of $205/mt, and cash
costs (including barge transport) of ~$90/st, we think the asset generates annual EBITDA of $202MM and FCF of $181MM (assuming $10/st for
capex). By this math, the EBITDA from this asset almost fully offsets the potential impact from the loss of North Goonyella (should it not produce
at all in 2019, which we don’t know yet). At the three-year average HV-A price of $158/mt, Shoal Creek’s EBITDA and FCF are still solid at
$112MM and $91MM, respectively. All of this is to say buying Shoal Creek should go a long way toward plugging the 2019 EBITDA hole if North
Goonyella is sidelined for the entirety of the year. Based on the math above and assuming met prices don't crater, the asset also has a relatively
quick payback period. The deal, pending union and regulatory approvals, is expected to close by year end.
BTU likes scale (which is why one US met asset likely isn’t the end game). Shoal Creek is unionized and in the middle of Alabama where
BTU owns no other assets. This begs an interesting question: is this simply a one-off deal or the beginning of a potential quest for more US met
coal assets? We suspect it's the latter, although we don’t expect any other major transactions any time soon. While Shoal Creek has the potential
to generate significant FCF, we think it's unlikely a company of BTU's size and stature would be content owning only one small met coal mine in
the US. From a long-term strategic perspective, we think building out a US met coal platform provides the board with some optionality down the
road. What do we mean by that? If BTU ever decides to split the company into two (i.e., one focused on the US, the other on Australia), we think
owning US met coal assets is paramount. A 100% US thermal coal platform, which BTU had prior to this transaction, wouldn't garner much of
a multiple or investor interest, in our view. Adding met coal might. It's not to say BTU has any plans to separate. It just gives them more options
down the road if management decides that's the best value-creating path. Do we see any more acquisitions any time soon? Probably not given
uncertainty around the fire and a lower equity value from which to transact. With that said, there are several other large assets in Alabama that
could be of interest in the future, including Mission Coal's Oak Grove Mine and Warrior Met Coal's (HCC) two large longwall mines.
Widening Newcastle spreads: a structural phenomenon or not? The CY2019 price for Newcastle 6,300 kcal coal is $111/mt. The price for
the lower-quality 5,500 kcal product is $68/mt. The $43/mt price spread between the two products is worth noting because the spread historically
had been closer to $15/mt. Why does this matter to BTU? Roughly 50% of its Australian thermal production is lower-quality Newcastle coal. This
spread, if it does not close materially, could impact EBITDA next year. What's driving the quality spreads? A higher availability of lower quality
product from countries like Indonesia and significant Asian utility demand for higher quality Newcastle coal seems to be at the heart of it. Are
these spreads temporary or permanent? It’s hard to say at this point (we are doing more work on the topic), but if the spread doesn’t close, it will
hurt BTU’s realization percentages. If we assume 50% of the company’s volumes are priced at the current forward Newcastle 6,300 kcal price
of $111/mt and 50% of its volumes are priced at the forward Newcastle 5,500 kcal price of $68/mt, the overall Newcastle realization would be
81% of the benchmark price. That compares to current guidance of 85%-95%. Clearly, BTU will do everything it can to mitigate the impact of
the wide spread through washing and re-routing coals. We would expect the company to provide more detail on its Q3 earnings call. The good
news, though, is that we suspect few analysts, including us, ever predicted Newcastle would be above $110/mt for this long.
Mark A. Levin (804) 939-5262 malevin@seaportglobal.com
Nathan P. Martin (804) 939-5265 nmartin@seaportglobal.com
• To access the complete report with disclosures, click here: 2018-10-05 BTU Company Update

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Seaport Global Morning Notes October 8, 2018

Industrials

Industrials Report Industrials

Transports & Industrials Insights

Transports & Industrials Insights (10-08-18) - AYI, CLF, FSS, GOGL, NAT and more
Summary:
In this release of our Transports & Industrials Insights, we provide new data points for AYI (FQ4:18 Update: Inflation and tariffs added to margin
pressures), CLF (Expecting in-line to modest beat for Q3; raising price target to $14), Weekly Shipping Chartbook (GOGL, NAT), and our
Transportation & Industrial Statistical Weekly. We present our calendar for the upcoming week, which includes Matt McCall and Kevin Sterling
marketing; and a non-deal roadshow with FSS. We have also provided links to our recently published research reports.
Highlights

New Data Points

● AYI: FQ4:18 Update: Inflation and tariffs added to margin pressures. Acuity reported a solid top- and bottom-line beat versus our and
consensus expectations for the company's FQ4:18. However, shares of AYI fell >13% on the news as certain items (e.g., inflation, tariffs, and
price/mix) pressured gross margin beyond expectations. Furthermore, large C&I project activity remain subdued. While indicators point to the
potential for a pick-up in larger project activity as we move forward, without tangible evidence that trends will inflect in the near term, and with
new margin pressures, we are maintaining our Neutral stance. Our estimates for FY19 and FY20 move to $9.65 and $10.40 from $10.00 and
$10.70, respectively, mostly on the aforementioned margin pressures. Click here for the full report.
● CLF: Expecting in-line to modest beat for Q3; raising price target to $14. We reiterate our Buy rating, raise our price target from $13 to
$14, and increase our Q3, 2018 and 2019 EBITDA estimates. Based on these revisions, we now expect a very modest $4MM Q3 EBITDA
beat. On our updated estimates and price target, CLF is valued at 7.4x 2019 EBITDA, which is near the midpoint of its typical 6.5x-8.5x range.
In short, US HRC prices have remained higher for longer than we had previously expected, and the forward curve has remained elevated as
well. Our Atlantic Basin pellet premium estimates are also raised on Pacific basin premium strength and supply issues in the Atlantic basin.
CLF reports Q3:18 earnings on Friday, Oct. 19. Click here for the full report.
● Weekly Shipping Chartbook (GOGL, NAT). While drybulk and LNG equities were basically unchanged last week, crude and product tanker
equities were up 6.7% and 3.9%, respectively, as VLCC rates were up more than 100% on lack of tonnage in the Middle East and congestion
at discharge ports in the Southern Hemisphere due to bad weather. NAT was the best-performing stock, up 15.3%, while GOGL lagged the
group, down 6.3%. While we believe rates will normalize over the next week, the recent volatility in tanker spot rates shows that the market
may be getting more balanced ahead of the seasonally stronger winter market. As a result, we remain constructive on the crude tanker market
and believe increasing Middle East and US crude oil exports, the return of Iranian floating due to sanctions, and increasing scrapping ahead
of the IMO 2020 regulations should help balance the market.. Click here for the full report.
● Transportation & Industrial (T&I) Statistical Weekly (Priced 10-5-18). In this week's T&I Statistical Weekly, we highlight the SGS T&I
Universe, which outperformed the S&P 500 for the week by 182 bps. The SGS T&I Universe was up 0.8% compared to the S&P 500, which was
down 0.97%. The top performing industrial sectors for the week were Maritime Shipping (Tankers) and Rail Equipment, which were up 3.6% and
3.1%, respectively. We highlight that our T&I Universe outperformed the S&P by 182 bps, the highest outperformance this quarter. However,
we call out the negative momentum switch and stock performance by our Building Products & Furnishings and Surface Transportation sectors,
both down 5.5% this week. In our view, we believe this week's concerns about rising interest rates and political events were the contributing
factors to the market volatility. Click here for the full report.

What We're Watching in Transportation & Industrials - This Week

Monday 10/8
● We will be hosting a non-deal roadshow with FSS in New York.
Tuesday 10/9
● Matt McCall will be marketing on the West Coast.
Wednesday 10/10
● Matt McCall will be marketing on the West Coast.
● Kevin Sterling will be marketing in Boston.

Recently Published Reports

● Aerospace & Defense; Aerospace Materials
○ Global passenger traffic growth re-accelerated in August, capacity load factors highest in 28-year history of IATA | BA, SPR, AIR, ESL, HEI,
ARNC, ATI, CRS, CSTM, KALU | 10.01.2018 | Link
○ Weekend wrap-up A&D reading: Defense bill moves forward, Rolls blade issues, Blue Origin | 09.28.2018 | Link
○ BA: BA wins T-X Trainer program as BDS continues to set the stage for a recovery | 09.28.2018 | Link
○ AIR: FQ1 Update: Raising PT to $54, INL/A risk retired, PBH momentum | 09.26.2018 | Link
○ ATI: Marine scrubber market, an emerging driver for FRP | 09.25.2018 | Link
● Airfreight and Logistics
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Seaport Global Securities LLC Equity Research Page 5

Seaport Global Morning Notes October 8, 2018

○ RLGT: The US and Canada really are friends – New USMCA is a positive for Radiant Logistics | 10.01.2018 | Link
○ FWRD: Examining the intermodal and drayage opportunity at Forward Air | 09.27.2018 | Link
● Building Products and Furnishings
○ BECN: Adjusting for weather; attempting to move the future focus away from weather | 10.01.2018 | Link
○ SCS: FQ2 Update: Gaining momentum; tariffs not expected to be an issue | 09.23.2018 | Link
○ Nonresidential Macro and Coverage Overview: Turning the corner | BDC, NCS, TILE | 09.19.2018 | Link
● Diversified Industrials
○ RBC: Management change: Mark Gliebe (CEO) retiring | 09.24.2018 | Link
○ ITW/MIDD/WBT: We visited the McDonald’s HQ Global Menu Restaurant in Chicago, IL (Industrial Insights) | 09.18.2018 | Link
● Flow Control
○ GTLS: Strategic realignment details unveiled; New operational excellence program should drive higher profits | 10.03.2018 | Link
○ GTLS: Chart acquires VRV Group; should be EPS accretive in 2019 | 09.27.2018 | Link
● Maritime
○ INSW: INSW plans to install scrubbers on up to 10 VLCCs | 09.25.2018 | Link
○ Weekly Shipping Chartbook | FLNG, GLNG | 09.24.2018 | Link
● Railroads
○ UNP: Skepticism palpable, but potential is there; can this management team do it? | 09.20.2018 | Link
○ NSC: A detailed look into the highly profitable export coal business | 09.13.2018 | Link
○ Rail Monthly: An updated look into CSX's export coal business; recapping some interesting comments from KSU and CNI at our conference
| 08.30.2018 | Link
○ NSC: Q2 Update: Strong volume, price environment more than offset service issues; maintain Neutral | 07.26.2018 | Link
● Rail Suppliers
○ WAB: Much like Wabtec's management, we're still fans of the GE Transportation deal | 09.17.2018 | Link
○ AAR reports lower levels of railcars in storage | ARII, GATX, GBX, TRN, RAIL, WAB | 09.07.2018 | Link
○ AAR reports lower levels of railcars in storage | ARII, GATX, GBX, RAIL, TRN, WAB | 08.06.2018 | Link
○ RAIL: Q2 Update: Updating model; Q2 margin lift to pull back some in 2H:18 | 08.02.2018 | Link (First Look: Link)
● Surface Transportation; Truckload and LTL Trucking
○ Updating estimates for the LTLs following mid-quarter updates and talks with management | ARCB, ODFL, SAIA, YRCW | 09.19.2018 | Link
○ DSKE: Q2 update: Quarterly beat, good guide, reiterate Buy | 08.09.2018 | Link
○ DSKE: Daseke building business with Builders | 08.02.2018 | Link
○ YRCW: Q2 Update: YRCW making the right moves; expectations remains for a better 2H:18 | 08.02.2018 | Link
○ SAIA: Solid top- and bottom-line beat; SAIA still in growth mode; Reiterate Buy | 08.01.2018 | Link
● SGS Equity Research Team
○ Key Themes & Positioning – Top-down investment themes & top ideas by sector | 08.16.2018 | Link
○ Catalyst Watch | 05.22.2018 | Link

Seaport Global Equity Research (949) 274-8052 equityresearch@seaportglobal.com

Walt Liptak (312) 706-2704 wliptak@seaportglobal.com
Mark A. Levin (804) 939-5262 malevin@seaportglobal.com
Josh Sullivan (646) 832-3237 jsullivan@seaportglobal.com
Matt McCall, CFA (804) 939-5277 mmccall@seaportglobal.com
Reuben Garner, CFA (804) 939-5266 rgarner@seaportglobal.com
Kevin Sterling, CFA (804) 939-5269 ksterling@seaportglobal.com
Nathan P. Martin (804) 939-5265 nmartin@seaportglobal.com
Willard Milby, CFA (804) 939-5275 wmilby@seaportglobal.com
Magnus Fyhr (713) 658-6315 mfyhr@seaportglobal.com
Steven Friedberg (312) 706-2710 safriedberg@seaportglobal.com
Adam Friedman (212) 949-1375 afriedman@seaportglobal.com
• To access the complete report with disclosures, click here: 2018-10-08 Transports & Industrials Insights (10-08-18) - AYI, CLF, FSS, GOGL, NAT and more

Aerospace & Defense Report Industrials

Industry Update

Weekend wrap-up A&D reading: Progress payment changes halted, KC-390 challenges C-130 dominance,
AUSA next week
Summary:
This weekend's Aerospace & Defense wrap-up highlights recent headlines with potential to impact the A&D landscape. First off, the DoD retreated
from proposed changes to progress payments which had hit the defense group hard in late September. Norsk Hydro closed the world's largest
alumina refinery which has put upward pressure on aluminum prices although still below the peaks of Q2. Reports emerged that BA potentially
plans to bring KC-390 production to the U.S., which would challenge LMT's C-130 dominance. GE hit a leadership shuffle after missing targets
again which may put additional pressure on a breakup. Lastly, the largest defense trade show of the year, the annual Association of the U.S.
Army (AUSA), conference begins next week.
Highlights

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Seaport Global Morning Notes October 8, 2018

DoD progress payment proposal halted. Earlier this week, the DoD pulled back a proposal that would have cut back progress-based payments
from 80% to 50%. Defense industry trade groups came out against the proposal, which Deputy Secretary of Defense Patrick Shanahan
acknowledged was "premature" and "absent of full coordination". The DoD had previously scheduled a meeting for October 10 to discuss the
proposed rule change, and has now canceled the meeting. The DoD is expected to continue to work on a revised rule to implement Section
831 of the FY17 NDAA, which calls for a preference for performance-based contract payments. Performance-based payments are made on the
basis of a defense contractor's achievement of objective, quantifiable measurable events, results or accomplishments that are valued prior to
performance compared to progress-based payments, which are made on the basis of costs incurred as work progresses (similar to percentage
of completion). (LMT, NOC, RTN, GD, LLL, BA, BWXT, CACI, HII, FLIR, HRS, KEYW, KTOS, SAIC)
GE CEO change. Earlier this week, GE announced the replacement of CEO John Flannery with Larry Culp, former CEO of Danaher (DHR).
The board moved to replace Flannery as continued weakness in the power business will cause the company to miss its FY18 guidance for FCF
and EPS. GE indicated that the other businesses in the portfolio are performing as expected, which includes the engine business and the next-
generation LEAP engine. (ARNC, ATI, CRS, DHR)
KC-390 to be built in US. Reports emerged that BA and Embraer are in talks to set up an assembly line in the US to build the KC-390 aircraft,
which is a growing military transport aircraft platform. In July, BA and Embraer previously announced the signing of an MOU to form a JV including
Embraer's commercial and services businesses with plans to create an additional JV to promote and develop new markets and applications for
defense products and services, especially the KC-390 multi-mission aircraft. Given the struggles of the A400M program and the sunsetting of
the C-17 production line, the KC-390 is expected to be a strong competitor to LMT's C-130 in the military transport aircraft market. (BA, LMT)
BWXT NSG contract. Earlier this week, the DOE awarded the Fluor-BWXT Portsmouth, LLC JV within the NSG segment a 30-month ~$850MM
contract extension. The JV is responsible for decontamination and decommissioning of the Portsmouth Gaseous Diffusion Plant, which operated
from 1955 to 2001. The extension includes deactivation and preparation for demolition and disposal of all Gaseous Diffusion Plant facilities,
process equipment, and related process buildings in addition to environmental remediation and uranium stewardship. Last quarter, BWXT
reiterated guidance for ~$20MM of EBIT in NSG despite generating only $4.7MM in 1H:18.
Alunorte plant temporarily shut down. On Wednesday, Norsk Hydro (NHY-OSL) announced that it will halt production at the Alunorte facility,
which includes the largest alumina refinery in the world. Aluminum prices have increased to just above $2,200/MT this week, which is still
significantly below the elevated price level in Q2. The Alunorte facility had been operating at 50% capacity since March, and the Brazilian
government was surprised by the decision to halt production because the company previously said it could operate at 50% capacity until May
2019. Higher aluminum/contained metal prices have contributed to margin pressure for KALU and ARNC. (ARNC, KALU, CSTM)
Upcoming event: AUSA annual meeting. Largest domestic defense trade show of the year kicks off Monday (BA, LMT, RTN, GD, LLL, MRCY,
HRS, ATI, FLIR, AIR, KTOS, CACI, SAIC)
Note: Tickers bolded above are covered by Seaport Global Equity Research.
Josh Sullivan (646) 832-3237 jsullivan@seaportglobal.com
Adam Friedman (212) 949-1375 afriedman@seaportglobal.com
• To access the complete report with disclosures, click here: 2018-10-05 Weekend wrap-up A&D reading: Progress payment changes halted, KC-390 challenges
C-130 dominance, AUSA next week

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Seaport Global Morning Notes October 8, 2018

Transportation

Maritime Report Transportation

Industry Update

Weekly Shipping Chartbook

Summary:
While drybulk and LNG equities were basically unchanged last week, crude and product tanker equities were up 6.7% and 3.9%, respectively, as
VLCC rates were up more than 100% on lack of tonnage in the Middle East and congestion at discharge ports in the Southern Hemisphere due
to bad weather. NAT was the best-performing stock, up 15.3%, while GOGL lagged the group, down 6.3%. While we believe rates will normalize
over the next week, the recent volatility in tanker spot rates shows that the market may be getting more balanced ahead of the seasonally stronger
winter market. As a result, we remain constructive on the crude tanker market and believe increasing Middle East and US crude oil exports, the
return of Iranian floating due to sanctions, and increasing scrapping ahead of the IMO 2020 regulations should help balance the market.
Highlights
Sale & Purchase and Time Charter Transactions: In the drybulk S&P market, a 2015 Chinese-built Ultramax vessel was sold for $23MM, which is
6% above our valuation. In the tanker market, sales activity remains limited with most of the modern tonnage done in the form of sale lease-back deals.
Two 2011 Chinese-built VLCCs were reportedly sold in the high $40MM area each, which is in line with our valuation based on a 10% discount for
Chinese-built vessels. However, the vessels have been fixed on 7-10 year time charters to COSCO at an undisclosed rate, which makes it difficult to
assess the true value of the transaction. In the product tanker sector, despite depressed market conditions, a 2013 Korean built MR clean tanker was
sold for a firm $27.5MM which is 6% above our valuation and only 24% below current newbuilding prices and resale values. While product tanker spot
rates have remained weak, we continue to see time charters done above spot earnings and closer to our charter rate assumptions. Last week, Royal
Dutch Shell fixed two 2018-built MR product tankers at $13,100/day with an option for six months at $14,500/day. Trafigura fixed a 2016-built Aframax
tanker for one year at $15,400/day compared to our 2019 charter rate assumption of $16,000/day.
Weekly Shipping Statistics
Tankers: VLCC spot rates increased sharply last week, with average 5-Oct 28-Sep %Chg MTD QTD YTD
VLCC spot earnings up 137% to $31,811/day on lack of tonnage in Baltic Dry Index 1,536 1,540 0% 0% 0% 12%
S&P 500 2,886 2,914 -1% -1% -1% 8%
the Middle East and firmer demand from Asia as Chinese refineries WTI Crude ($/bbl) 74.37 73.25 2% 2% 2% 23%
scramble for Iranian crude before the sanctions take effect on Nov. Brent Crude ($/bbl) 84.13 82.73 2% 2% 2% 26%
4th. Chinese imports from West Africa are set to rise to a record 1.94 Henry Hub Gas ($/m) 3.15 3.01 5% 5% 5% 7%
Avg. Spot Rates ($/d) 5-Oct 28-Sep %Chg MTD QTD YTD
million bpd, or 60 cargoes, in October from 1.5 million bpd, or 45 Crude Tankers:
cargoes, in September. West African grades tend to produce a large VLCC 31,811 13,395 137% 31,811 31,811 7,916
proportion of high-value distillates, much like Iranian crude oil, Suezmax
Aframax
18,106
12,586
16,171
14,478
12%
-13%
18,106
12,586
18,106
12,586
9,696
11,057
making it an attractive replacement. The Suezmax market also Product Tankers:
firmed, with average Suezmax spot earnings up 12% to $18,106/day LR2 (AG-Japan) 6,908 8,291 -17% 6,908 6,908 8,733
with further delays in the Bosphorus Straits as new regulations that LR1 (AG-Japan)
MR Clean (avg)
6,686
5,137
6,589
4,104
1%
25%
6,686
5,137
6,686
5,137
6,735
7,973
came into effect Sept. 1st only allow tankers over 250m in length to Drybulk Carriers:
traverse the Turkish Straits during daylight hours. This could further Capesize 18,026 18,350 -2% 18,026 18,026 16,755

exacerbate winter weather-related delays in the Black Sea-Med Panamax Supramax

13,849
13,327
13,594
13,272
2%
0%
13,849
13,327
13,849
13,327
11,489
11,440
market in coming months. LNG Carriers:
Atlantic Tri-fuel (165,000 m3) 95,000 95,000 0% 95,000 95,000 69,125
Drybulk: Given the Asian holidays, there was another slow week Pacific Tri-fuel (165,000 m3) 100,000 100,000 0% 100,000 100,000 59,163
Steam (145,000 m3) 64,000 62,000 3% 64,000 64,000 42,200
with the BDI finishing the week down 4 points to 1,536. Despite the Asset Values (5yo, $m) Oct Sep %Chg YTD 2017 YE 2016 YE 2015 YE
recent weakness in the Capesize market, the Panamax and Crude Tankers:
Supramax markets remain firm at $13,849/day and $13,327/day, VLCC 64.0 64.0 8% 59.0 60.0 80.0
Suezmax 44.0 43.5 10% 40.0 45.0 60.0
respectively, as demand for minor bulk continues to strengthen. With Aframax 31.0 31.0 3% 30.0 30.0 44.0
the Brazilian corn harvest ramping up and the US grain season in full Product Tankers:
swing, we expect the market to firm through the seasonally stronger LR2 32.0 32.0 -6% 34.0 31.5 48.5
LR1 27.5 27.5 10% 25.0 31.0 35.0
fourth quarter. In addition, despite the recent tariffs on US soybean MR 26.0 26.5 8% 24.0 20.5 29.0
exports to China, changing trading patterns in the global soybean Handy 22.3 23.0 1% 22.0 19.0 25.0
Drybulk Carriers:
trades have resulted in increasing ton-mile demand. Capesize 37.0 38.0 10% 33.5 23.0 29.0
Panamax 21.0 21.0 5% 20.0 13.3 15.5
LNG: Atlantic and Pacific rates remained firm last week at Supramax 18.0 18.0 6% 17.0 13.3 14.0
$95,000/day and $100,000/day, respectively. A major development Handysize 15.0 15.0 15% 13.0 10.0 12.0
in the LNG market came last Tuesday, as Shell announced FID of its Unlevered ROA 5-yo ($m) 1y TC Spot 1y ROA Spot ROA
VLCC 64.0 23,500 31,811 8% 13%
LNG Canada project in Kitimat, British Columbia. The facility will MR 26.0 12,375 5,137 9% -1%
consist of two trains with total liquefaction capacity of 14 MMtpa, with Capesize 37.0 19,750 18,026 13% 11%
Suezmax 44.0 17,000 18,106 7% 8%
potential to expand to four trains boasting an estimated 28 MMtpa of Aframax 31.0 14,250 12,586 7% 5%
capacity. We believe that we are likely to see other projects reach LR2 32.0 14,500 6,908 7% -2%
FID over the next 12-18 months as additional supply is needed by LR1 27.5 12,625 6,686 6% -2%
Panamax 21.0 13,550 13,849 13% 14%
2022 to cover strong demand growth, primarily from Asia. Supramax 18.0 13,250 13,327 17% 17%

Chart of the week: Global LNG trade update. Source: FactSet, Arrow Research, Clarksons, Baltic Exchange, S&P Global,
Platts, Seaport Global Securities estimates

Magnus Fyhr (713) 658-6315 mfyhr@seaportglobal.com

• To access the complete report with disclosures, click here: 2018-10-08 Weekly Shipping Chartbook

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Seaport Global Morning Notes October 8, 2018

Disclosures
We, Stephane Aka, John Aschenbeck, Steven Friedberg, Adam Friedman, Magnus Fyhr, Reuben Garner, CFA, Derek Hernandez, Mike Kelly, CFA, Mark A. Levin,
Walt Liptak, Nathan P. Martin, Matt McCall, CFA, Willard Milby, CFA, Sunil Sibal, Kevin Sterling, CFA, Josh Sullivan, Patrick Sun, CFA and Mike Urban, hereby
certify: (1) that all of the views expressed in this report accurately reflect our personal views about any and all of the subject securities or issuers; and (2) that no part
of our compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Seaport Global Securities received compensation for investment banking services from Belden Inc., Beacon Roofing Supply Inc., Daseke, Inc., Earthstone Energy
Inc., Genco Shipping & Trading Ltd., Golden Ocean Group Limited, Halcón Resources Corp., Kratos Defense & Security Solutions, Inc., Lilis Energy, Inc., Nordic
American Tankers Limited, Northern Oil and Gas, Inc., Ship Finance International Limited, Scorpio Tankers Inc. and Tellurian Inc. and they have been a client of
the firm in the past 12 months.
Seaport Global Securities expects to receive or intends to seek compensation for investment banking services from Northern Oil and Gas, Inc. and Rosehill Resources
Inc., which are clients of the firm, in the next 3 months.
Seaport Global Securities acted as Co-Manager for an offering of securities for Belden Inc., Daseke, Inc., Earthstone Energy Inc., Genco Shipping & Trading Ltd.,
Golden Ocean Group Limited, Halcón Resources Corp., Nordic American Tankers Limited, Northern Oil and Gas, Inc., Rosehill Resources Inc., Ship Finance
International Limited, Scorpio Tankers Inc. and Tellurian Inc. in the past 12 months.
Seaport Global Securities provided investment banking services for Belden Inc., Daseke, Inc., Earthstone Energy Inc., Genco Shipping & Trading Ltd., Golden Ocean
Group Limited, Halcón Resources Corp., Lilis Energy, Inc., Nordic American Tankers Limited, Northern Oil and Gas, Inc., Rosehill Resources Inc., Ship Finance
International Limited, Scorpio Tankers Inc. and Tellurian Inc. and they have been a client of the firm in the past 12 months.
Seaport Global Securities makes a market in shares of Arconic Inc., C&J Energy Services, Inc., DHT Holdings, Inc., Earthstone Energy Inc., Frontline Ltd., Federal
Signal Corp., Golar LNG Ltd., GasLog Ltd., Chart Industries Inc., Halcón Resources Corp., Nordic American Tankers Limited, Parsley Energy Inc., Patterson-UTI
Energy Inc., Scorpio Tankers Inc. and Welbilt, Inc..
Seaport Global Securities has received compensation for non-investment banking services from DryShips, Inc. and Lilis Energy, Inc. and they have been a client
of the firm in the past 12 months.
Mike Kelly, CFA, and/or a member of his/her household currently has a financial interest in Rosehill Resources Inc. in the form of a long position in warrants.
As with all employees of Seaport Global Securities LLC, a portion of our analysts’ compensation is paid from the total collection of revenues from all areas of the
firm including but not limited to Investment Banking and Sales and Trading departments. In no instance are research analysts’ compensation directly derived from
Investment Banking revenues.

Other Companies Mentioned in This Report

• AAR Corp. (AIR: $46.26, Buy)
• American Railcar Industries, Inc. (ARII: $46.99, Neutral)
• Ardmore Shipping (ASC: $6.84, Buy)
• Atmos Energy Corp. (ATO: $94.64, Buy)
• Abraxas Petroleum Corp. (AXAS: $2.38, Buy)
• The Boeing Company (BA: $386.47, Buy)
• Belden Inc. (BDC: $67.08, Buy)
• Baker Hughes, a GE company (BHGE: $31.90, Neutral)
• BWX Technologies Inc. (BWXT: $62.67, Buy)
• Centennial Resource Development Inc. (CDEV: $22.20, Buy)
• Cleveland-Cliffs Inc. (CLF: $12.36, Buy)
• Canadian National Railway (CNI: $90.63, Neutral)
• Carpenter Technology Corporation (CRS: $58.41, Buy)
• CSX Corporation (CSX: $74.55, Neutral)
• Diana Containerships Inc. (DCIX: $1.22)
• DHT Holdings, Inc. (DHT: $5.02, Buy)
• Dampskibsselskabet NORDEN A/S (DNORD: DKK97.35)
• Daseke, Inc. (DSKE: $7.73, Buy)
• Eagle Bulk Shipping Inc. (EGLE: $5.66, Buy)
• Earthstone Energy Inc. (ESTE: $9.03, Buy)
• Diamondback Energy, Inc. (FANG: $136.35, Buy)
• Flex LNG Ltd. (FLNG: NOK14.85, Buy)
• Federal Signal Corp. (FSS: $25.88, Buy)
• StealthGas Inc. (GASS: $3.44)
• The Greenbrier Companies (GBX: $61.83, Buy)
• General Electric Company (GE: $13.18)
• GasLog Ltd. (GLOG: $20.00, Buy)
• Golar LNG Partners LP (GMLP: $14.61)
• Golden Ocean Group Limited (GOGL: $9.24, Buy)
• Chart Industries Inc. (GTLS: $72.91, Buy)
• Hafnia Tankers Ltd. (HAFNIA-NO: NOK0.00, Buy)
• Warrior Met Coal, Inc. (HCC: $27.27, Neutral)
• Huntington Ingalls Industries, Inc. (HII: $261.28, Neutral)
• Hoegh LNG Holdings Ltd. (HLNG: NOK44.40)
• Harris Corporation (HRS: $167.56, Buy)
• ArcBest Corporation (ARCB: $42.18, Neutral)
• Arconic Inc. (ARNC: $21.84, Buy)
• Allegheny Technologies Inc. (ATI: $28.30, Buy)
• Avance Gas (AVANCE: NOK120.50)
• Acuity Brands, Inc. (AYI: $130.96, Neutral)
• Boise Cascade Company (BCC: $34.48, Neutral)
• Beacon Roofing Supply Inc. (BECN: $33.34, Buy)
• Peabody Energy Corporation (BTU: $36.30, Neutral)
• CACI International Inc. (CACI: $185.02, Buy)
• C&J Energy Services, Inc. (CJ: $21.52, Buy)
• Costamare Inc (CMRE: $6.02)
• Capital Product Partners L.P. (CPLP: $2.87)
• Constellium N.V. (CSTM: $11.55, Buy)
• Danaos Corporation (DAC: $1.15, NA)
• Danaher Corporation (DHR: $106.98)
• Dynagas LNG Partners LP (DLNG: $8.73)
• DryShips, Inc. (DRYS: $5.68)
• Diana Shipping Inc. (DSX: $4.16, Neutral)
• Esterline Technologies Corp. (ESL: $89.39, Neutral)
• Euronav NV (EURN: $9.18, Buy)
• FLIR Systems, Inc. (FLIR: $59.96, Buy)
• Frontline Ltd. (FRO: $6.49, Buy)
• Forward Air Corp. (FWRD: $68.01, Neutral)
• GATX Corporation (GATX: $88.74, Neutral)
• General Dynamics Corp. (GD: $206.32)
• Golar LNG Ltd. (GLNG: $27.54, Buy)
• GasLog Partners LP (GLOP: $23.15)
• Genco Shipping & Trading Ltd. (GNK: $14.43, Buy)
• Global Ship Lease, Inc. (GSL: $1.04, NA)
• Hafnia Tankers Ltd. (HAFNIA: NOK0.00, Buy)
• Halliburton Company (HAL: $42.00, Buy)
• HEICO Corp. (HEI: $89.72, Neutral)
• Halcón Resources Corp. (HK: $4.51, Buy)
• Hoegh LNG Partners LP (HMLP: $18.25)
• International Seaways Inc. (INSW: $21.43, Buy)
• Jagged Peak Energy Inc. (JAG: $14.00, Buy)
• The KEYW Holding Corporation (KEYW: $9.17, Neutral)
• Kratos Defense & Security Solutions, Inc. (KTOS: $13.93, Buy)
• L-3 Communications Holdings Inc. (LLL: $210.28)
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Seaport Global Morning Notes October 8, 2018

• Illinois Tool Works Inc. (ITW: $141.01, Buy)
• Kaiser Aluminum Corporation (KALU: $106.56, Buy)
• Kansas City Southern (KSU: $112.10, Neutral)
• Lilis Energy, Inc. (LLEX: $4.57, Buy)
• Lockheed Martin Corporation (LMT: $347.21)
• Dorian LPG (LPG: $7.98)
• Mercury Systems Inc. (MRCY: $54.63)
• Nordic American Tankers Limited (NAT: $2.41, Neutral)
• Noble Corp. (NE: $7.12, Neutral)
• Navios Maritime Partners L.P. (NMM: $1.71)
• Northrop Grumman Corporation (NOC: $320.34)
• Norfolk Southern Corp. (NSC: $183.02, Neutral)
• Old Dominion Freight Line (ODFL: $151.87, Buy)
• Parsley Energy Inc. (PE: $30.26, Buy)
• FreightCar America Inc. (RAIL: $16.95, Neutral)
• Rio Tinto plc (RIO: $49.80)
• Rosehill Resources Inc. (ROSE: $6.19, Buy)
• Saia Inc. (SAIA: $68.35, Buy)
• Scorpio Bulkers Inc. (SALT: $7.31, Buy)
• Star Bulk Carriers Corp. (SBLK: $14.45, Buy)
• Ship Finance International Limited (SFL: $13.83, Buy)
• Spirit AeroSystems Holdings Inc. (SPR: $90.76, Buy)
• Scorpio Tankers Inc. (STNG: $2.12, Buy)
• Teekay LNG Partners LP (TGP: $16.35)
• Teekay Tankers Ltd. (TNK: $1.10, Buy)
• Trinity Industries Inc. (TRN: $39.00, Neutral)
• Union Pacific Corporation (UNP: $163.77, Neutral)
• Welbilt, Inc. (WBT: $19.46, Buy)
• Select Energy Services Inc. (WTTR: $12.75, Buy)
Please contact Seaport Global Securities LLC, for important disclosure information for covered companies. Contact the Director of Equity Research at (949)
274-8052 or write to Seaport Global Securities LLC, 600 Anton Boulevard, Suite 1700, Costa Mesa, CA 92626.
Clients should also refer to https://sgsecurities.bluematrix.com/sellside/Disclosures.action for price charts, as well as specific disclosures for covered companies.
• Cheniere Energy, Inc. (LNG: $66.58)
• The Middleby Corporation (MIDD: $123.24, Neutral)
• Navios Maritime Midstream Partners L.P. (NAP: $2.95)
• NCI Building Systems Inc. (NCS: $15.24, Buy)
• Navios Maritime Holdings Inc. (NM: $0.63)
• Navios Maritime Acquisition Corporation (NNA: $0.51)
• Northern Oil and Gas, Inc. (NOG: $4.06, Buy)
• Navigator Holdings Ltd. (NVGS: $12.14)
• Plains All American Pipeline, L.P. (PAA: $25.45, Buy)
• Patterson-UTI Energy Inc. (PTEN: $17.82, Buy)
• Regal Beloit Corporation (RBC: $83.53, Buy)
• Radiant Logistics, Inc. (RLGT: $5.67, Buy)
• Raytheon Co. (RTN: $206.75)
• Science Applications International Corporation (SAIC: $76.26, Buy)
• Safe Bulkers, Inc. (SB: $2.92, Buy)
• Steelcase Inc. (SCS: $17.70, Neutral)
• Seanergy Maritime Holdings (SHIP: $0.89)
• Seaspan Corporation (SSW: $8.14, Buy)
• Tellurian Inc. (TELL: $8.90, Buy)
• Interface, Inc. (TILE: $22.15, Buy)
• Tsakos Energy Navigation Ltd. (TNP: $3.37, Buy)
• Transcananda Corporation (TRP: C$53.77)
• Wabtec Corporation (WAB: $104.30, Buy)
• WPX Energy, Inc. (WPX: $20.32, Buy)
• YRC Worldwide (YRCW: $9.23, Neutral)

Explanation of Ratings
Seaport Global Securities analyst ratings include (effective Feb. 1, 2017):
Buy - The investment outlook and risk/reward over the following 12 months are favorable on an absolute basis and relative to the peer group.
Neutral - The investment outlook and risk/reward over the following 12 months are neutral on an absolute basis and relative to the peer group.
Sell - The investment outlook and risk/reward over the following 12 months are unfavorable on an absolute basis and relative to the peer group.
NA - A rating is not assigned.
Prior to Feb 1., 2017, Seaport Global Securities analyst ratings included:
Buy - The investment outlook and risk/reward over the following 12 months are very favorable on an absolute basis and relative to the peer group.
Speculative Buy - The investment outlook over the following 12 months is very favorable on an absolute basis and relative to the peer group, however, there
is higher than average risk associated with the investment that could result in material loss.
Accumulate - The investment outlook and risk/reward over the following 12 months are favorable on an absolute basis and relative to the peer group.
Neutral - The investment outlook and risk/reward over the following 12 months are neutral on an absolute basis and relative to the peer group.
Reduce - The investment outlook and risk/reward over the following 12 months are unfavorable on an absolute basis and relative to the peer group.
Sell - The investment outlook and risk/reward over the following 12 months are very unfavorable on an absolute basis and relative to the peer group.
NA - A rating is not assigned.
Ratings Distribution
Research Coverage Investment Banking Clients*
Rating Count % of Total Count % of Total % of Rating
Category
Buy 264 65.2% 27 81.8% 10.2%
Hold/Neutral/NA 120 29.6% 6 18.2% 5.0%
Sell(Sell or Reduce) 21 5.2% 0 0.0% 5.7%
Total 405 100.0% 33 100.0% 8.1%

*Investment banking clients are companies for whom Seaport Global Securities has provided investment banking services in the
previous 12 months.
Note: Ratings Distribution as of June 30, 2018

This material has been prepared by Seaport Global Securities LLC, a U.S. registered broker-dealer, member FINRA and SiPC, employing appropriate expertise,
and in the belief that it is fair and not misleading. Seaport Global is the global brand name for Seaport Global Securities LLC (“SPGS”) and its affiliates worldwide.
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Seaport Global Morning Notes October 8, 2018

Information, opinions or recommendations contained in the reports and updates are submitted solely for advisory and information purposes. The information upon
which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, we cannot guarantee its accuracy.
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