Value Times Three

Grants Spring Conference

April 7, 2015

Disclaimer
The following information has been prepared solely for use by intended recipients
and shall be maintained in strict confidence. The information contained herein
reflect the opinions and projections of Mountain Lake Investment Management LLC
and its affiliates (collectively Mountain Lake) as of the date of this presentation.
All graphics, code, text and design are owned by Mountain Lake. This presentation,
in its entirety or in parts, may not be reproduced without prior written permission
from Mountain Lake.
The information set forth herein does not purport to be complete and no obligation to
update or otherwise revise such information is being assumed. Certain statements,
projections, or other estimates herein are based upon certain assumptions. Other
events that were not taken into account may occur and may significantly affect the
analysis. Any assumptions should not be construed to be indicative of the actual
events that will occur. No representation or warranty is made concerning the accuracy
of any data presented. All information provided in this presentation is for
informational purposes only and should not be deemed as investment advice or a
recommendation to purchase or sell any specific security.
These materials do not constitute an offer to sell, or a solicitation of an offer to buy,
interest in any Mountain Lake product.

Mountain Lake Partners

Cash Position

70%

3/31/2015: 62.8%

60%

9/30/2008: 54.5%

50%
40%
30%
20%
10%

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

0%

Mountain Lake Partners

2014

2013

2012

2011

2010

2009

2008

2007

2006

$35
$30
$25
$20
$15
$10
$5
$0
2005

billions

Weighted Median Market Cap

of Equity Investments

Owens-Illinois

3/31/2015 Market Capitalization = $3.8 billion

Owens-Illinois
Corporate History
1903

Michael Owens completes the automated bottle

blowing machine and forms Owens Bottle
Machine Company.

1929

Owens-Illinois was formed after the acquisition

of Illinois Glass.

1958

Owens-Illinois sells Kaylo, its asbestos

containing insulation unit, to Owens Corning.
During the 10 years of ownership, aggregate
sales are less than $40 million.

Owens-Illinois
Corporate History
1987

KKR leveraged buyout for $3.7 billion

1988

With the acquisition of Brockway Glass,

Owens-Illinois domestic market share is
greater than 40%

1991

Initial public offering

2014

Asbestos related payments total $4.4 billion

2015

Current market capitalization is $3.8 billion

Owens-Illinois
Recent Decade of Nothing
Stock Price
$80
$60
$40
$20
2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

$0

Source: Bloomberg

Owens-Illinois
Glass Bottle Industry Dynamics
- High fixed costs
- Consolidated market
- Barriers to entry
- Steady demand
- Limited growth
- Generates lots of cash

Owens-Illinois
European Operating Margin

20%
15%
10%
5%

2016E

2015E

2014

2013

2012

2011

2010

2009

0%

- In Europe, Owens-Illinois has 25% market share.

- The top three firms have 67% market share.
- Normal margins are 12.5%.
Source: Company reports and Mountain Lake estimates

Owens-Illinois
20%

North American Operating Margin

15%
10%
5%
2016E

2015E

2014

2013

2012

2011

2010

2009

0%

- In North America, Owens-Illinois has 40%

market share.
- The top three firms have 85% market share.
- Normal margins are 15%. Source: Company reports and Mountain Lake estimates

Owens-Illinois

South American Operating Margin

2016E

2015E

2014

2013

2012

2011

2010

2009

25%
20%
15%
10%
5%
0%

- In Brazil, Owens-Illinois has 65% market share.

- In Peru, Ecuador and Columbia, Owens-Illinois
has 100% market share.
- Normal margins are 20%. Source: Company reports and Mountain Lake estimates

Owens-Illinois

20%

Asia Pacific Operating Margin

15%
10%
5%
2016E

2015E

2014

2013

2012

2011

2010

2009

0%

- In China, Owens-Illinois has about a 2% market

share with a 0% margin.
- In Australia and New Zealand, Owens-Illinois has
70% market share. Normal margins are 15%.
Source: Company reports and Mountain Lake estimates

Owens-Illinois
All Regions Operating Margin
20%
15%
10%
5%

2016E

2015E

2014

2013

2012

2011

2010

2009

0%

Source: Company reports and Mountain Lake estimates

Owens-Illinois
Pretend Free Cash Flow*
$600
$500
millions

$400
$300
$200
$100

*excluding payments for asbestos and restructuring

2016E

2015E

2014

2013

2012

2011

2010

2009

$0

Source: Company reports and Mountain Lake estimates

Owens-Illinois
Net Debt

$6

billions

$5
$4
$3
$2
$1
$0
2000

2005

2010

2014

Cash used since 2000: $191 million per year

Current leverage ratio: 2.4

Source: Company reports

Owens-Illinois

Restructuring Charges

$250
millions

$200
$150
$100
$50
$0
2009

2010

2011

2012

2013

2014 2015E

Asian and European restructurings completed in 2009 and 2015

Cash use since 2009: $114 million per year
Source: Company reports and Mountain Lake estimates

Owens-Illinois
Asbestos Charges

millions

$200
$150
$100
$50
$0
2009 2010 2011 2012 2013 2014
Cash used since 2009: $158 million per year
Source: Company reports

Owens-Illinois
Mesothelioma Incidence

Source: National Cancer Institute

Owens-Illinois
Core Competency in Asbestos Litigation
Asbestos Claims Filed
80,000

70,000

70,000

60,000

60,000

50,000

50,000

40,000

40,000

30,000

30,000

20,000

20,000

10,000

10,000

0
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014

80,000

1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014

Asbestos Claims Pending

Source: Company reports

Owens-Illinois
Recent Claims Activity
12,000
10,000
8,000
6,000
4,000
2,000
0
2009

2010

2011

Disposed

2012

2013

2014

Filed
Source: Company reports

Owens-Illinois
Reported Free Cash Flow

millions

$400
$300
$200
$100
$0
2009 2010 2011 2012 2013 2014
The impact in 2014 from the strong USD was $40 million.
Source: Company reports

Owens-Illinois
Reported Free Cash Flow with Estimates

millions

$400
$300
$200
$100
$0
2009 2010 2011 2012 2013 2014 2015E 2016E
Source: Company reports and Mountain Lake estimates

Owens-Illinois
Reported Free Cash Flow with
Estimates and Adjusted Estimates*
$600
millions

$500
$400
$300
$200
$100
$0
2009 2010 2011 2012 2013 2014 2015E 2016E
*excluding payments for asbestos and restructuring

Source: Company reports and Mountain Lake estimates

Koppers Holdings

3/31/2015 Market Capitalization = $403 million

Koppers Holdings
Corporate History
1914

Heinrich Koppers sells patents for by-product

coke ovens to Andrew Mellon for $300,000.
Koppers Inc. reorganizes in Pittsburg.

1960

Fletcher Byrom focuses the company on end

products.

1988

Beazer plc led an LBO

1997

Hansen plc, who acquired Beazer in 1991, wanted

control. Management exercised right of first
refusal.

2007

Streamlined company producing carbon materials

and wood products has IPO.

Koppers Holdings
2013 Revenues $1.5 billion

Carbon
Materials
and
Chemicals
61%

Railroad
and Utility
39%

Source: Company reports

Koppers Holdings
COAL TAR

Carbon Pitch 50%

Chemical Oils 20%

Distillate 30%

Naphthalene

Creosote

Phthalic Anhydride

Primary End Products

Aluminum

Vinyl, Paint and

Concrete Additives

Railroad Crossties
Source: Company reports

Koppers Holdings
Carbon Materials and Chemicals
Operating Margins

15%
10%
5%
0%
-5%
2008 2009 2010 2011 2012 2013 2014 2015E
Source: Company reports and Mountain Lake estimates

Koppers Holdings
Carbon Materials and Chemicals
Return on Invested Capital

30%
25%
20%
15%
10%
5%
0%
-5%
2011

2012

2013

2014

2015E

Source: Company reports and Mountain Lake estimates

Koppers Holdings

millions

Net Debt
$1,000
$800
$600
$400
$200
$0
2011
Date

Acquisition

2012

2013

2014

Product or Service

Price

8/15/2014 Osmose

Wood preservation $491 M

1/20/2014 Ashcroft

Crosstie treating

$29.8 M
Source: Company reports

Koppers Holdings
11/7/2014

Walt Turner resigns, Leroy Ball appointed

CEO

1/14/2015

Company announces delay of low cost

naphthalene plant to preserve cash

1/22/2015

Attempt to refinance high cost debt fails

2/26/2015

Company misses earnings guidance for 8th

quarter in a row

2/26/2015

Company announces $200mn-$250mn debt

reduction target

2/26/2015

Board of Directors suspends dividend

Koppers Holdings
$60

Stock Price

$50
$40
$30
$20
$10
$0
2011 2011 2012 2012 2013 2013 2014 2014 2015
2014 Year End Shares = 20.5 million
Source: Bloomberg

Koppers Holdings
Debt Maturities
$800

millions

$600
$400
$200
$0
2015

2016-2017 2018-2019

2020+
Source: Company reports

Koppers Holdings
2015 Revenues $1.8 billion

Carbon
Materials
and
Chemicals
41%

Railroad
and Utility
38%

Performance
Chemicals
21%

Source: Company reports

Koppers Holdings
Railroad and Utility
Operating Margins
14%
12%
10%
8%
6%
4%
2%
0%
2012

2013

2014

2015E

Source: Company reports and Mountain Lake estimates

Koppers Holdings
Railroad and Utility is a Good Business
- Largest supplier of railroad ties to North American
railroads
- Two firm concentration is about 80%
- Steady replacement market demand 600 million
railroad ties wear out; over 20 million replaced
every year
- Long-term contracts with cost-plus pricing
- Minimal capital investment
- Margin opportunity from process improvements

Koppers Holdings
Railroad and Utility
Return on Invested Capital
50%
40%
30%
20%
10%
0%
2011

2012

2013

2014

2015E

Source: Company reports and Mountain Lake estimates

Koppers Holdings
Performance Chemicals
Revenues

$400
$300

15%

Operating Margins

10%

$200

5%

$100

0%

$0
2014

2015E 2016E

2014

2015E 2016E

Source: Company reports and Mountain Lake estimates

Koppers Holdings
Performance Chemicals is a Good Business
- Wood treatments for outdoors decks
- They are a dominant provider, still gaining
market share
- High IP content; patent protection
- Not capital intensive
- Sell to wood treaters who in turn sell to big box
stores, contractors and small stores
- Housing starts is a small percent of demand;
driven by remodels

Koppers Holdings
Performance Chemicals
Return on Invested Capital
30%
25%
20%
15%
10%
5%
0%
2011

2012

2013

2014

2015E

Source: Company reports and Mountain Lake estimates

Koppers Holdings

Operating Income by Segment

In millions

2011

Carbon Materials
and Chemicals

$89.1 $83.1 $43.9

Railroad and
Utility

$34.8 $45.1 $58.3 $53.6 $73.8 $72.6

Performance
Chemicals
Total Segment
Operating Income

$0.0

2012

$0.0

2013

$0.0

2014 2015E 2016E

-$5.3

-$9.1

$6.5

$1.6 $40.6 $37.2

$123.9 $128.2 $102.2 $49.9 $105.3 $116.3

Source: Company reports and Mountain Lake estimates

Koppers Holdings
Free Cash Flow
In millions

2011

2012

2013

Net Income

$37.6

$67.2

$40.1 -$39.4 $37.2 $46.4

Depreciation and
Amortization

$48.8

$27.6

$29.7 $44.0 $65.0 $61.0

Capital
Expenditures
Free Cash Flow

2014 2015E 2016E

-$33.2 -$28.9 -$72.9 -$83.8 -$45.0 -$44.0

$53.2

$65.9

-$3.1 -$79.2 $57.2 $63.4

Source: Company reports and Mountain Lake estimates

Koppers Holdings

In millions
Date

Stella
Jones

Koppers
Holdings

Koppers
without
CMC

3/31/2015 3/31/2015 3/31/2015

Market Capitalization

$2,161

$403

$403

Enterprise Value

$2,548

$1,217

$1,217

2015E Revenues

$1,138

$1,705

$1,005

2015E Operating Income

$142

$105

$114

2015E Operating Margin

12.5%

6.2%

11.4%

Source: Bloomberg and Mountain Lake estimates

Tidewater
Big Floating Trucks

Boat and/or truck pictures

3/313/2015 Market Capitalization = $898 million

Tidewater
Big Floating Trucks with a Bow for Extra Beauty
- Safe, efficient and compliant operations
- New vessels that service all water depths
- Geographic diversity
- Strong customer base, relationships and
contracting

Tidewater

Deepwater Vessels only

Vessel Population by Owner

Source: Company reports

Tidewater
Vessel Commitments
Jan. 2000 Dec. 2014

Vessel Count

Total Cost

Deepwater PSVs

102

$2,900m

Deepwater AHTSs

12

$387m

Towing Supply/Supply

111

$1,667m

Other

53

$227m

Totals

278

$5,181m

Source: Company reports

Tidewater

2014

2013

2012

2011

2010

2009

2007

2006

2005

$90
$80
$70
$60
$50
$40
$30
$20
$10
$0

2008

Stock Price

Source: Bloomberg

Tidewater
12/31/2014 Balance Sheet Items
(in Billions)

Vessel and Related Equipment

Net PP&E
Goodwill
Net Debt
Equity

$4.63
$3.67
$0.00
$1.41
$2.51

Shares
Book Value per Share

46.9 M
$53.50

Stock price as of 3/31/2015

Market cap as of 3/31/2015

$19.14
$897 M
Source: Company reports and Bloomberg

Tidewater

millions

Debt Maturities

Fiscal Year ending March 31

Source: Company reports

Tidewater
Vessel Cash Operating Margin
60%
50%
40%
30%
20%
10%
2018E

2017E

2016E

2015E

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

0%

Fiscal Year ending March 31

Source: Company reports and Mountain Lake estimates

Tidewater
Operating Margin
50%
40%
30%
20%
10%
0%
2018E

2017E

2016E

2015E

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

-10%

Fiscal Year ending March 31

Source: Company reports and Mountain Lake estimates

Tidewater

Free Cash Flow

$300
$100
$0
-$100
-$200
-$300

2016E

Fiscal Year ending March 31

2015E

2014

2013

2012

2011

2010

2009

2008

2007

2006

-$400
2005

millions

$200

Source: Company reports and Mountain Lake estimates

Tidewater
Capital Expenditures
We are here, 85 days until positive

$150

free cash flow

$100
$50
4Q2018

3Q2018

2Q2018

1Q2018

4Q2017

3Q2017

2Q2017

1Q2017

4Q2016

3Q2016

2Q2016

1Q2016

$0
4Q2015

millions

$200

Fiscal Year ending March 31

Source: Company reports and Mountain Lake estimates

Tidewater

$300

Free Cash Flow

$100
$0
-$100
-$200
-$300
-$400
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015E
2016E
2017E
2018E

millions

$200

Fiscal Year ending March 31

Source: Company reports and Mountain Lake estimates