14 ANNUAL REPORT 2012 MANAGEMENTS DISCUSSION AND ANAL YSIS OF OPERA TING RESUL TS AND FINANCIAL CONDITION DECEMBER 31 2012 For the year ended December 31 2012 revenue in the Infrastructure segment of 1897 million decreased slightly by 8 million over the prior year Most of the decrease in 2012 revenues occurred in the Social Infrastructure sector particularly in buildings operations in Quebec and Ontario as Aecon refocuses its operations in this market and in mechanical operations in Western Canada where several large projects were completed during 2012 In the Transportation sector lower demand in construction and related materials operations resulted in decreased revenues in Alberta and Ontario primarily due to softer municipal markets in 2012 Offsetting these reductions to some extent was higher revenue in Mining operations due to an increased presence in the oil sands in Western Canada For the three months and year ended December 31 2012 the operating proft in the Infrastructure segment increased decreased over the same period last year as follows Three months ended Year ended millions 1 December 31 December 31 Transportation 04 128 Heavy Civil 121 165 Utilities 24 32 Mining Ongoing operations 98 361 Gain on sale of equipment 11 43 Social Infrastructure 134 47 Decrease in Infrastructure operating proft 148 54 1 Refer to the Introduction section of this MDA for a description of changes made to the Infrastructure subcategories and the realignment of Lockerbie Hole Contracting from the Industrial segment to the Infrastructure segment The decline in operating proft in the Infrastructure segment for the year ended December 31 2012 was primarily due to lower profts in the Heavy Civil sector A number of signifcant projects closed out in Heavy Civil during 2012 including construction of the New Quito Airport where a combination of lower revenue and lower margin on this project resulted in an approximate 24 million yearoveryear decline in Heavy Civil operating proft While this was largely offset by the release of certain project contingencies related to Quito in the Concessions segment and of income tax reserves related to the project it had a negative impact on Infrastructure proft and margin in 2012 Lower volume and margin in Transportation and Social Infrastructure also contributed to the reduction in operating proft The operating proft decline in these sectors was largely offset by increased profts in Mining operations in Western Canada as a result of higher volume and margin and improved equipment utilization Infrastructure backlog at December 31 2012 was 1677 million which is 161 million higher than the same time last year with most of the increase occurring in Utilities primarily as a result of obtaining a 50 share in 730 million of contracts to complete the expansion of the Cold Lake and Polaris pipelines in Alberta Offsetting the improvement in Utilities backlog was lower backlog in Heavy Civil due to signifcant project workoff in 2012 and in Social Infrastructure as that business continued to change the nature of its project portfolio New contract awards totalled 2058 million in 2012 compared to 1391 million in the prior year Utilities reported the largest increase in awards primarily as a result of the above noted pipeline awards It should be noted that Infrastructure reported backlog includes the revenue value of backlog that relates to projects that are accounted for using the equity method Consequently since this method of accounting results in earnings revenues less expenses from equity accounted projects being reported as a single amount on Aecons consolidated statement of income the revenue component of backlog for these projects is not included in Aecons reported revenues As discussed in the Consolidated Financial Highlights section Aecon is a party to signifcant contracts and arrangements based on time and material costplus unit price and supplier of choice and alliance agreements which do not show up as reported backlog when the number of units or volume of work cannot be estimated with reasonable certainty For example reported backlog in Utilities and Aecon Mining only includes the value of specifc work orders awarded todate and as a result excludes the value of work managed under multiyear master service contracts where the client requests services on an asneeded basis and where no specifc work order has yet been awarded Therefore the Infrastructure segments effective backlog at any given time is greater than what is reported