EFTA01385437

3 January 2018 HY Corporate Credit HY Multi Sector,Medre Cable & Satellite Consumer confidence continues to build. Exponditures to follow? The combination of low unemployment, positive financial asset performance and a solid outlook for both U.S. and global growth has benefited consumer confidence expectations. However, real consumer expenditures remains relatively stagnant as real disposable income growth has been modest through 9/30/17. IFigure 8: Consumer confidence expectations high 140 120 100 so 60 40 20 wwwCallorgmce ear Cowumor Cchleence Eneclabent —0404 Con Selma Sane 13044o14 Dont Roombeeg flm IF / Retail still challenged from secular headwinds Figure 9: PCE and income growth less pronounced 80% 60% 40% 20% O 00% .20% .40% -6 0% —US Roil Onvosat4e Penal borne —US Reg Perscnol Osw5to", Excencleies Scam DessoW Ent Igbanhvg Alava LP Online growth remains the primary disruptor for traditional brick & mortar E-commerce is an increasing contributor to overall retail growth in the U.S., and we expect the trend to continue as consumers increasingly turn to mobile devices for shopping needs. Figure I0. E-COntrr ' on inGtonsinct of gro:v:ls anci geol /WW1 00100 awe 64140$ in 439b , E4orncrsco 310 /Ice, e.cnmr•erce 2 105 126% NW Inas* ISO) i 5130 1104 NO 1130 1103 1116.I ISO 183 30 31 30 38 42 51l 35 41 100 n 59 93 67 95i 54 41 Yfe !nevem(%) I en 35% an, 44% 35% 36%i are 35% 175E 154% Ian la 5% 14" 1419%, 102% 15614 41% 29% 22% 34% 24% 2316 2,6% 19% (Fromm me 4 % at total growth 230 30% 340 23% 360 44%1 IC% Serne ("Innen. 0wn& US Cencut &net Online sales excluding travel and auctions, measuring all worldwide buying on U.S. sites by computers and excluding mobile, tablet and shared devices, increased 17.5% in November, up from 15.5% in October. Similarly, apparel & accessories online sales growth accelerated to 23.4% in November from 20.0% in October. As strong as the figures are, we believe they potentially understate online growth. Mobile, including smartphones and tablets, represented 33.1% (24.1% smartphone; 9.0% tablets) of Cyber Monday revenue, according to Adobe. Smartphone revenue grew 39.2% YoY. Deutsche Bank Securities Inc. Please see DB Equity Research Analysts Paul Musson's 12,21 Retail Trends Chartbookand Mike Baker's 12/17Unwrannino the Key The/nester 201$ report for additional thoughts and data points on the state of the U.S. retail market Page 163 CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) CONFIDENTIAL DB-SDNY-0086722 SDNY_GM_00232906 EFTA01385437