Bank of America Investment Banking Pitch Book
Introduction
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Since the March 27 Special Committee meeting, several notable Pioneer developments have occurred:
Pioneer share price has declined 10.6 % from $11.16 on our March 27th meeting¹ to $9.98, com pared to flat performance for the S&P 500
Pioneer closed the quarter ending March 31st on April 24 th, with mixed performance versus street expectations:
Q3 2014 EBITDA of $17.1mm, (4.6%) below street estimates of $17.9mm
EBITDA delta driven primarily by lower PELLC unit distribution jobs and continued weakness at Klondyke and Pine Valley, partially offset by
stronger than expected storm results
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Management updated the management forecasts on April 9, 2014 following a detailed performance discussion with divisional leadership given
continued weakness in Q3 and better visibility into Q4
Bank of America
Merrill Lynch
2014 includes flow-through impact of changes in Duke and PPL contracts, de lays in material procurement and wet weather impact on
overhead distribution
2015E-2018E growth profile unchanged, yet starting off a lower 2014E base
Moderated escalation of G&A cost from 5% to 3% given historical trends
With respect to Project Pioneer, several notable steps have been undertaken:
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Pioneer management conducted executive presentations with Court Square and Party A on April 14 in New York and with Party B on April 17th
telephonically
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Pioneer facilitated a due diligence session for Court Square on April 28 in Mt. Airy with focus on fleet/asset base, operations (including HR),
and miscellaneous balance sheet items
Management provided supplemental diligence materials, including an update on Q3 actual performance, to Court Square, Party A and Party B
and addressed their respective diligence questions and requests to facilitate submission of a preliminary non-binding indication of interest
On April 29, Court Square submitted a non-binding indications of interest for $12.75 per share in cash
Party B and Party A decided not to submit an indication of interest
Potential next steps for the Special Committee:
Consider the Court Square preliminary indication of interest and other market feedback received
Weigh that preliminary indication versus the perceived risks and opportunities inherent in the standalone plan
Based on stock price as of March 24, 2014 ond April 25, 2014 rospectively.
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