AECON GROUP INC 29 OUTLOOK Aecons signifcantly improved fnancial and operating performance in 2012 provides a foundation to continued progress on all fronts We enter 2013 with a strategic focus on our three core target markets infrastructure energy and mining and a solid 24 billion backlog with signifcant bidding activity underway Through the course of 2012 we made progress toward achieving our target of 9 percent EBITDA in 2015 including Signifcant growth in proftability and margins in our Industrial segment Successfully scaled our Mining business in the oil sands Expanded our Utilities business in western Canada through a strategic joint venture related to mainline pipeline expansions for the oil sands Redefned and refocused our buildings operations Successfully completed the construction of the New Quito International Airport Awarded major new projects and increased the duration and visibility of our backlog with 42 percent representing work beyond the next 12 months versus 38 percent at year end 2011 and Strengthened our management team and augmented our risk management practices The business environment in which we set our target of 9 percent EBITDA for 2015 has not fundamentally changed and the key trends that have shaped our outlook remain intact Our positive outlook going into 2013 is based on our business strategy which has four key elements 1 Invest in our people and their safety 2 Proftability through focus on margin expansion 3 Building partnerships and alliances and 4 Focus on execution performance operational discipline and risk management Looking forward we still see opportunities to leverage our scope and scale to grow our business organically based on our national capabilities With projections for Canada being the ffth largest construction market by aggregate volume in the world trailing only China India the United States and Japan by 2020 according to a study published by PricewaterhouseCoopers and Oxford Economics Canada offers a host of opportunities The ongoing need and demand for investment in infrastructure remains as well as the trend toward larger more complex projects which provides an advantage to larger companies such as Aecon with the scope scale and capabilities to selfperform the work either by ourselves or in concert with consortia in larger public private partnerships Specifcally we envision signifcant opportunities in multiyear transportation projects heavy civil power projects including hydroelectric infrastructure transmission opportunities in Western Canada to be sought in a strategic joint venture cogeneration plants and facilities renewable energy oil sands related contract mining work as well as mining facility and plant installations and fabrication and module assembly work for the private sector in our facilities across Canada Today the projects in our backlog have better margins embedded than a year ago and we are focused on delivering this margin to the bottom line for our shareholders Aecon is at work every day to make continuous improvement in the way we operate for ourselves our clients and our joint venture partners As usual we expect the second half of 2013 to be stronger than the frst half refecting the typical seasonality of our work Our Companys balance sheet fnancial liquidity and substantial bonding capacity each of which are among the strongest in the Canadian construction industry continue to provide the fnancial resources required to capitalize on the opportunities that are on the horizon Capital expenditures are expected to remain relatively consistent with 2012 levels We believe that this position of strength combined with Aecons business strategy will lead to ongoing strengthening of our fnancial performance in 2013 and beyond