Stock Presentation: Materials Sector Summer 2018 SIM Stock Presentation: Materials Sector July 25, 2018 Kyle McKee & Ken Morris

Agenda Sector Overview - Recap SIM Holdings & Allocation Overview Stock Analysis Conclusion/Final Recommendation Appendix

S&P 500 Sectors - Materials Materials Sector represents 2.66% of the S&P 500 by weight Second smallest sector beating only the Telecom sector at 1.8%

YTD Sector Performance vs S&P 500 - Represents cumulative appreciation return from 1/1/2008 through 7/23/2018 - Seemed to be on track with S&P 500 until around 2012 -

Sector Overview - Recap SIM Holdings & Allocation Overview Stock Analysis Conclusion/Final Recommendation Appendix

Containers & Packaging SIM Portfolio Holdings & Allocation as of June 30, 2018 Containers & Packaging Chemicals

Materials Sector Company Overviews Item Sub-Sector Containers & Packaging Chemicals Employees 24,000 3,700 26,500 14,600 HQ Philadelphia, PA Columbia, Maryland Perrysburg, Ohio Lake Forest, IL Primary Products Steel/Aluminum Food and Beverage Specialty chemicals Glass containers for food and beverage Containerboard and corrugated packaging Market Cap $5.83B $4.9B $2.7B $10.9B Current Price $43.40 $72.42 $16.84 $115.70

Sector Overview - Recap SIM Holdings & Allocation Overview Stock Analysis Conclusion/Final Recommendation Appendix

Crown Holdings (CCK) Overview Manufactures primarily steel and aluminum food and beverage containers Also manufactures caps & closures, aerosols and specialty packaging 78% of consolidated sales are made abroad, representing significant operations

Crown Holdings (CCK) Recent Performance and Events Recent stock performance has slipped due to higher leverage and uncertainty based on some potential anti-trust litigation in Europe Recent Events Total debt increased through Q1/Q2 from $5.2B at 12/31/2017 to $9.3B in order to fund the acquisition of Signode, a protective packaging manufacture for various industries Represents new line of business, not intended to provide significant synergies Potential litigation settlement German antitrust investigation charges have been turned to governing body in Europe, could result in significant penalty Revised Guidance as of Q2 Earnings Release EPS reduced from $5.30 to $5.15 for 2018 No change in estimates to adjusted free cash flow of $625M in 2018 and $775M in 2019 Signode: Manufactures protective packaging such as plastic and steel strapping systems,

Crown Holdings (CCK) Valuation DCF Valuation DCF performed with a very conservative 8.3% WACC discount rate, consensus (Morningstar) estimates a 7.8% Conservative long-term growth rate of 2.5% for terminal value Modeled in a $150M payment for the litigation summary in 2020 Results yield a $52.62 market value per share representing a 15% discount to the market (as of 6/29/2018), updated DCF as of 7/22 represents a $59.18 price per share with a 27% discount Ratios Currently trading at P/E close to 52 week low Materials index currently trading at 20.32x P/E Segment Net Sales 6/30/2018 6/30/2017 Income America’s Beverage $1,606 $1,403 $211 $213 European Beverage 776 705 114 121 European Food 942 838 141 122 Asia Pacific 669 565 91 84 Transit Packaging 620 94 Non-Reportable 630 551 -17 -19 Total $5,243 $4,062 634 521 Multiple High Low Med Current P/E 21.04 9.27 13.93 10.68 P/B 2,260 7.61 29.43 7.86 P/S .99 .31 .71 .67 P/EBITDA 7.37 2.53 5.67 4.57

Crown Holdings (CCK) Outlook Increased focus on reducing leverage coupled with wage and population growth abroad provide opportunity for continued growth Growth Drivers Consumer discretionary income Beverage preferences including beer and soda Population growth Continued favoritism towards flavored soda water Continued expansion of craft brewers utilizing aluminum cans Risks Company recently revised estimates for the year downward due to increased freight costs Highly leveraged Pending litigation could be substantial Uncertainty of operations abroad which make up 78% of consolidated net sales Signode: Manufactures protective packaging such as plastic and steel strapping systems, CCK has a focus to reduce leverage over the upcoming years CCK estimating over $3B in free cash flow over the next three years which will be used to pay down debt

Crown Holdings (CCK) Recommendation DCF Analysis Discount Rate 8.3% Terminal Growth Rate 2.5% Company and sector have underperformed overall market YTD (company YTD down 31%). Crown Holdings recently acquired a new line of business that is set to generate additional cash flow in the coming years Poised to enter emerging markets abroad and continue to expand Settlement may not be as bad as assumed and Company will continue to pay down debt Recommendation Stock Rating HOLD Current Price $43.40 Target Price $59.18 Implied Upside 27%

Stock: W.R. Grace & Co. Business Overview Founded in 1854, W.R. Grace produces and sells specialty chemicals and materials worldwide Operates through two reportable business segments: Grace Catalysts Technologies Includes catalysts and related products and technologies used in refining, petrochemical and other chemical manufacturing applications Grace Materials Technologies Includes specialty materials, including silica-based and silica-alumina-based materials Used in coatings, consumer, industrial, and pharmaceutical applications Headquartered in Columbia, Maryland. Company Overview: Supplier of specialty chemical Serves food beverages, consumer products, petroleum refinery worldwide. Segment: Grace Catalysis Technologies Refining Refining: Fluid catalytic cracking (help distill crude oil) Used to produce plastic pipes and automotive parts Advanced Refinery Hydro processing catalyst (Upgrade heavy oil into lighter products) Polyolefin Application, such as high pressure pipe, medical device and textiles Grace Material Technologies Coatings and sealants used to coat paper for magazines as well as produce food, personal care products, and pharmaceuticals

W.R. Grace & Co. – Financial Performance Market Data Market Cap (USD) 4,933.5M Shares Outstanding 67.3M Beta 1.17 52 Week H (11/1/17) 77.37 52 Week L (4/4/18) 58.48 Financial Data Net Sales (in millions) 2017 2016 2015 Catalysts Technologies 1,276.5 1,163.7 1,162.1 Materials Technologies 440.0 434.9 466.1 Total Revenue 1,716.5 1,598.6 1,628.2 Operating Income 272.80 269.60 279.30 Operating Margin (%) 15.89% 16.86% 17.15% Company Overview: Supplier of specialty chemical Serves food beverages, consumer products, petroleum refinery worldwide. Segment: Grace Catalysis Technologies Refining Refining: Fluid catalytic cracking (help distill crude oil) Used to produce plastic pipes and automotive parts Advanced Refinery Hydro processing catalyst (Upgrade heavy oil into lighter products) Polyolefin Application, such as high pressure pipe, medical device and textiles Grace Material Technologies Coatings and sealants used to coat paper for magazines as well as produce food, personal care products, and pharmaceuticals

W.R. Grace & Co. – Investment Outlook Opportunities Rising demand for refining catalysts and silica for coating (in particular in Asia market) Increase in prices for catalysts can result in increase in sales/EPS for 2018 Benefits of improved product mix for silica and catalyst products – substantial spend in R&D in 2017 Risks Foreign currency exchange rate fluctuation - 75% of 2017 sales outside of U.S. Volatility of energy and commodity prices – company uses petroleum-based materials, metals, natural gas to manufacture product Competitor Multiples Ticker P/E TTM P/S TTM P/B P/CF TTM EV/EBITDA TTM Industry Avg. 21.21 2.20 4.02 15.77 9.56 GRA 21.35 2.80 15.21 40.46 12.47 Peers LYB 8.03 1.19 5.17 6.54 6.49 CC 9.61 1.27 10.22 7.07 6.89 CC- THE CHEMOURS CO LYB – LYONDELLBASELL INDUSTRIES NV

Recommendation DCF Analysis Discount Rate 9.5% S&P 500 Discount Rate 10% Terminal Growth Rate 5.5% Recommendation Stock Rating HOLD Current Price $72.42 Target Price $73.67 Implied Upside 1.7% GRA PE vs. SPX = 21.3505 vs. 21.0737 GRA PS vs. SPX = 2.8443 vs. 2.2338 GRA EV/EBITDA vs. SPX = 16.1406 vs. 13.5483 GRA P/EBITDA vs. SPX = 12.6809 vs. 11.8135 Returns YTD GRA – 2.95% SP 500 – 5.81% MATERIALS SECTOR -2.86% GDP growth estimated at 3% - believe there will be growth opportunities for this company through M&A activity and in the catalysts refining space

Stock: Owens-Illinois Business Overview Largest manufacturer of glass containers with 78 manufacturing plants in 23 countries. Sells glass container products to food and beverage manufacturers primarily in Europe, North America, South America, and the Asia Pacific. Customers include Anheuser-Busch, Coca-Cola, Diageo, MillerCoors, Nestle and many others. Headquartered in Perrysburg, Ohio. Market Data Market Cap (USD) 2,682.7M Shares Outstanding 161.7M Beta 1.08 52 Week H (10/11/17) 25.90 52 Week L (6/28/18) 16.22 Financial Data (TTM) Revenue 6,869.0M Rev Growth (1 Yr.) 2.5% Profit Margin 4.0% Earnings Per Share 2.65 Price to Earnings 11.85 The Company produces glass containers for malt beverages, including beer and ready-to-drink low-alcohol refreshers, liquor, wine, food, tea, juice and pharmaceuticals. It also produces glass containers for soft drinks and other non-alcoholic beverages.

Revenue ($ in millions) OI Segment Information Historically, the company had four reportable segments based on geographic location: Europe, North America, Latin America and Asia Pacific. Starting in Q1 2018, North America and Latin America segments were merged – resulting in three segments: Americas, Europe, and Asia Pacific Revenue by Geographic Segment Segment Revenue ($ in millions) Europe 2,375 North America 2,160 Latin America 1,551 Asia Pacific 714 Segment Total Revenue 6,800 Other Revenue 69 Total Revenue 6,869 The Company merged segments to better leverage scale and presence across a larger geography and market and to reduce administrative costs. It is aligned with the Company’s internal approach to managing and reporting performance. Approx. 70% of the company’s revenue comes from non-US operations

Owens-Illinois – Investment Outlook Risks Changing consumer tastes – away from glass to alternative packaging solutions (in beer & soda) Decline in beer consumption in U.S. (beer is primary end market for OI glass bottles) Fluctuation in foreign currency exchange rates (70% of sales from non-U.S. operations) High debt levels – debt/capital ratio of 0.84 Geopolitical risks – trade war escalation with China, Europe, and Mexico. Opportunities Growth prospects in Asia Pacific and Latin American markets due to population growth and surge in flavored beverage industry (natural, organic, detox, flavored water, etc.) Asset improvement investments and cost reduction initiatives will create efficiencies and improve operating margins. Continued strong performance of joint venture with Constellation Brands and Vitro Food and Beverage acquisition. The Company produces glass containers for malt beverages, including beer and ready-to-drink low-alcohol refreshers, liquor, wine, food, tea, juice and pharmaceuticals. It also produces glass containers for soft drinks and other non-alcoholic beverages. Both the JV and Acquisition has helped OI improve its competitive advantage in the Mexican beer glass packaging market Constellation 50/50 Joint Venture - Uses plant in Mexico to produce glass containers exclusively for Constellation brewery, which brews beer for export to the U.S. (Corona, Modelo, and other Mexican beer brands) Vitro was acquired in 2015 and accounted for an addition $608 million in 2016.

Owens-Illinois – Key Ratios (10 YR) OI Valuation Absolute Basis High Low Median Current SPX Current P/E 18.7382 2.7906 10.1209 6.271 21.0737 P/B 18.7933 1.1865 5.3778 3.1255 3.3564 P/S 0.593 0.234 0.492 0.3865 2.2338 P/EBITDA 5.1045 1.0584 3.4677 2.5201 11.8135 Competitor Multiples Ticker P/E TTM P/S TTM P/B P/CF TTM EV/EBITDA TTM Industry Avg. 15.38 10.28 18.26 21.04 9.59 OI 11.85 0.39 3.28 3.66 6.23 Peers BLL 31.07 1.17 3.49 11.05 11.03 CCK 18.79 0.59 7.92 9.49 9.95 Valuations as a whole would indicate that the stock is currently undervalued. The ratios compared to historical valuation is lower than the median as well as the overall market. Additionally, the ratios compare favorably to the industry average, which points to the stock being undervalued.

Owens-Illinois – Recommendation DCF Analysis Discount Rate 11.5% S&P 500 Discount Rate 10% Terminal Growth Rate 2.5% Company and sector have underperformed overall market YTD (company YTD down 31%). Beta is elevated compared to overall market and key peers in the industry Q2 2018 Earnings released on 7/23/2018 – EPS beat management guidance/estimates at $0.77 vs. $0.75. However, revenue missed estimates $1.77B vs. $1.82B (global shipments down 1% YoY in Q2 and stronger U.S. dollar) Business operations should improve for Q3 2018, though uncertainty on currency fluctuation impact and rising energy costs. Recommendation Stock Rating HOLD Current Price (as of $16.84 Target Price $22.21 Implied Upside 31.9% The Company produces glass containers for malt beverages, including beer and ready-to-drink low-alcohol refreshers, liquor, wine, food, tea, juice and pharmaceuticals. It also produces glass containers for soft drinks and other non-alcoholic beverages.

Packaging Corporation of America (PKG) Overview Manufactures corrugated packaging and containers Approximately 80% of sales are coming from containerboard / packaging Significant sales to major plays including Amazon and Walmart Growth Factors Consumer wages due to increased purchases of discretionary products Earnings rise and fall with input prices to include cardboard and paper fibers High profit margins for materials industry Market Cap (USD) 11.0B Shares Outstanding 94.3M P/E 15.8x Materials 20.38x

Packaging Corporation of America (PKG) Recent Performance and Events Recent Events Exceeded estimates for Q1 EPS - $1.53 per share 2017 revenue represented a 12% increase from 2016 Metric PKG Gross Profit Margin 29% Operating Margin 15% Net Margin 10% Return on Equity 33% Other 2.7% Dividend yield

Packaging Corporation of America – Recommendation DCF Analysis Discount Rate 9.6% Terminal Growth Rate 2.5% Recommendation Packaging products are a crucial component to online retailer’s business models which continue to expand PKG has shown consistent increase in revenue growth over the periods with increased margins Low amount of debt of $2.0B represents opportunity for increased cash flows to equity holders Risks Profit margins do not continue to hold the same as historicals Economic downturn limits consumer spending Recommendation Stock Rating HOLD Current Price $115.70 Target Price $128.10 Implied Upside 10%

Sector Overview - Recap SIM Holdings & Allocation Overview Stock Analysis Conclusion/Final Recommendation Appendix

Final Recommendation Company Current Price Target Price Upside (Downside) SIM Weight Buy (+)/Sell (-) Recommendation Crown Holdings Inc. (CCK) $43.40 $59.18 27% 1.16% HOLD W.R. Grace & Co. (GRA) 72.42 73.67 1.7% 1.77% Owens-Illinois (OI) 16.84 22.21 31.9% Paper Packaging of America (PKG) 94.30 128.10 10%

Sector Overview - Recap SIM Holdings & Allocation Overview Stock Analysis Conclusion/Final Recommendation Appendix

Appendix – Crown Holdings Inc. DCF Enterprise Value FCF in last forecast period (t) 1,334 FCFt+1 1,367 Long term growth rate (g) 2.5% Terminal value 23,576 Present value of terminal value 10,254 Present value of stage 1 cash flows 7,310 Enterprise value 17,564 Value per Share Enterprise value 17,564 Less: Net debt 9,606 Equity value 7,958 Diluted shares 134.46 Equity value per share 59.18 Market premium / (discount) to fair value -27%

Appendix: W.R. Grace & Co. DCF

Appendix - Owens-Illinois DCF

Appendix – Packaging Corporation of America DCF Enterprise Value FCF in last forecast period (t) 1,377 FCFt+1 1,411 Long term growth rate (g) 2.5% Terminal value 19,880 Present value of terminal value 7,630 Present value of stage 1 cash flows 6,855 Enterprise value 14,484 Value per Share Enterprise value 14,484 Less: Net debt 2,399 Equity value 12,085 Diluted shares 94.35 Equity value per share 128.10 Market premium / (discount) to fair value -10%