Livingston International Income Fund

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Livingston InternationalIncome Fund

• Transportation Logistics Conference
• National Bank Financial
• March 24, 2009

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Agenda

• Key investment considerations
• Business segments
• Financial structure
• 2008 operating highlights
• 2008 financial results
• Recent measures
• Strategic focus
• Conclusion

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Disclaimer

• This presentation will contain forward-looking
  statements and non-GAAP financial measures, e.g.
  EBITDA
• Investors are directed to pages 14 and 15 of the
  Funds Annual Report 2008, available at
  www.sedar.com and from Livingstons Web site at
  www.livingstonintl.com, for a full description.
• We do not intend to discuss any undisclosed
  material information in this presentation.

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Key Investment Considerations
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Main Business Segments
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Canadian Customs Brokerage
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Canadian Brokerage Market Dynamics
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U.S. Customs Brokerage Market Segment
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U.S. Customs Brokerage Market Dynamics

• Cross-border trade between Canada and the U.S.
  continues to represent the largest bilateral
  trading relationship in the world
• NAFTA provides a free-trade platform for NA but
  created numerous detailed regulations for
  importers
• 9/11 significantly increased the level of
  security enforced on goods entering the U.S. and
  Canada
• Significant growth in imports from Far East,
  India and Europe

Trade
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U.S. Market Opportunity

• Leveraged leadership position in Canada to serve
  customers requirements in the U.S.
• Market dynamics and strategy similar to Canadian
  brokerage
• Offer unique value proposition focused on trade
  compliance
• Offer expedited processing service to clients
  using Insight FAST on the northern border
• Provide unique service offerings for large,
  complex import requirements

Northern border

• Not a focus for Livingston
• Completely different dynamics for building
  relationships
• Currently serves customer needs in Mexico through
  referral arrangements

Mexicanborder
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Transportation and Logistics
Revenue analysis by customer vertical
Services offered

• Supply-chain and distribution management
• Logistics network design
• Order fulfillment and distribution
• Consolidation and deconsolidation
• Transportation outsourcing
• Reverse logistics

Integrated logistics
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Transportation and Logistics Rationale/Strategic
Fit
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Border Services
Services offered
Opportunities
Managed services

• Enables private and public entities to manage a
  variety of business services
• imported vehicle registration
• information management
• program management
• contact centre services

• Leverage cross-border transaction processing
  expertise
• Generate revenue from services previously given
  away
• Apply core capabilities to large annuity-like
  business process outsourcing opportunities
• Provide natural hedge to US/Cdn

• Provides customs brokerage software to other
  customs brokers in the U.S.
• SmartBorder application and technology
• e-manifest services to carriers entering the U.S.

Technology services
Background

• Primarily organically developed businesses
• Stable, mature businesses that generate
  significant free cash flow

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Border Services Rationale/Strategic Fit
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Financial Structure Highlights

• Revenues are disclosed on a net basis
• Customs brokerage excludes duty and GST
• Freight and logistics net of third-party charges

Income statement

• Non-asset based service provider
• A/R, government remittances and A/P include
  amounts payable to government and third parties
• Operating facility for government remittances
  used to advance GST on behalf of clients
• Long-term debt non-amortizing debt as a result
  of being an income trust

Balance sheet
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2004-2008 Five-Year Revenue
323.8
323.0
322.9
175.7
147.8
CAD millions
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2004-2008 Five-Year EBITDA
69.7
68.2
67.7
40.4
29.0
CAD millions
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2008 Q1 to Q3 Operating Highlights
Financial

• Payout ratio 82.2
• Catching up on maintenance capital expenditures
  (capex)
• Focus now, as combined company, on real growth
  capex

• create

People

• Employees have settled in, post-integration
• Canadian brokerage productivity is high, margins
  very good
• Right-sizing U.S. brokerage operation through
  attrition

Clients

• Less likely to switch brokerage provider in
  difficult economic times, but more aggressive in
  shopping for transportation/freight
• Renewed focus, particularly on small businesses

Processes and technology

• Reducing number of technology platforms in
  transportation and logistics operations
• Converted U.S. air/sea operations to more robust
  platform
• Enhancing U.S. brokerage offering with imaging
  technology

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2008 Q1 to Q3 Operating Highlights
Currency

• Continued volatility in Cdn/US exchange, but
  Cdn falling
• Positive on some business lines, negative on
  others
• Translation effect

• create

Border services

• Very significant volume increases in Managed
  Services, year-over-year, including imported
  vehicle registration

Canadian and U.S. brokerage

• Canadian volumes flat good given economic
  conditions
• U.S. volumes still depressed
• Consulting continues to perform well

Transportation and logistics

• Declining business in integrated logistics,
  transportation management and vehicle
  transportation
• Increased volume in international freight
  forwarding
• Fixing problems in some TL operations

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Q1-Q3 2008 Financial Results
Revenue
EBITDA
88.1
82.2
80.3
80.6
80.5
77.0
21.3
18.2
17.2
16.7
16.2
12.7
CAD millions
CAD millions
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2008 Q4 Operating Highlights Challenges
Financial

• Payout ratio 128.1
• Catching up on maintenance capital expenditures
  (capex)
• Restructuring charge 1.9 million

People

• Laid people off in operations facing most severe
  volume declines, primarily in Managed Services
• U.S. brokerage staff adapting to new imaging
  technology

Clients

• Facing challenges given continuing economic
  uncertainty
• Looking for ways to simplify their lives more
  aggressive in shopping for transportation/freight
• Renewed focus, particularly on small businesses

Processes and technology

• Reducing number of technology platforms in
  transportation and logistics operations
• Began implementing imaging technology in U.S.
  brokerage operations

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2008 Q4 Operating Highlights Challenges
Currency

• Cdn dropped 21 in just over four weeks in
  relation to US
• Exchange rate volatility disruptive for
  businesses engaged in international trade
• Translation effect on U.S. revenues

• create

Border services

• 62 drop in imported vehicle registration volumes
  compared with Q4 2007

Canadian and U.S. brokerage

• Canadian volumes down 9.7 versus Q4 2007
  consulting and event logistics revenues were
  higher
• 14.7 decline in trade volumes into the U.S.

Transportation and logistics

• Lower volumes in North American transportation,
  vehicle transportation and integrated logistics
  businesses
• Addressing problems in North American
  transportation and integrated logistics
  operations.

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Q4 2008 Financial Results
Revenue
EBITDA
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Recent MeasuresDistribution Reduction

• Reduced distributions by 70 to 0.042 per unit
  per month, or 0.50 per unit per annum, starting
  with January 2009 distribution, in order to
• Strengthen balance sheet
• Maximize liquidity
• Conserve cash to continue to invest in people and
  technology
• Reduce regular use of credit facilities to
  finance payments to governments on behalf of
  clients
• Take full advantage of potential strategic
  opportunities

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Adapting to Ongoing Uncertainty

• Continuing to focus on own fundamentals
• Cut operating costs through staff attrition,
  non-renewal of contract positions
• Reduced work hours and corresponding salaries by
  10 across operations (temporarily)
• Frozen compensation levels (temporarily)
• Offered voluntary resignation incentive to longer
  term staff
• Expected annualized reduction 15 million (as
  long as measures remain in place)

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Strategic Focus for Growth Organically/by
Acquisition

• Maintain cost structure leadership
• Maintain service leadership
• Extend technology leadership position with
  clients
• Leverage client base to cross-sell other services

Maintain preeminent brokerage position

• Leverage Canadian relationships with
  multinationals to serve their U.S. operations
• Leverage best-in-class cost structure and
  brokerage capabilities in the U.S. market
• Capitalize on U.S./China, U.S./India and
  U.S./Europe trade lanes

Grow air/sea customs brokerage offering

• Integrate service offerings from recently
  acquired businesses
• Cross-sell services to core brokerage customers
  to become one-stop shop
• Capitalize on favourable industry dynamics

Enhance and grow transportation and logistics
offering
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Conclusion
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