TD Engineering & Construction Conference March 26, 2014 - PowerPoint PPT Presentation

TD Engineering & Construction Conference March 26, 2014

FORWARD-LOOKING STATEMENTS Statements and information herein that are not historical facts are "forward-looking information". Words such as “plans”, “intends”, “outlook”, “expects”, “anticipates”, “estimates”, “believes”, "likely", “should”, "could", "will", "may" and similar expressions often identify forward-looking information and statements. Forward looking statements and information may include, without limitation, statements regarding the operations, business, financial condition, liquidity, expected financial results, performance, obligations, market conditions, prospects, opportunities, priorities, targets, goals, ongoing objectives, strategies and outlook of Toromont and its business units. Forward-looking information and statements contained herein are based on, among other things, Toromont management's current assumptions, expectations, estimates, objectives, plans and intentions regarding projected revenues and expenses, the economic, industry and regulatory environments in which Toromont operates or which could affect its activities, Toromont's ability to attract and retain customers as well as Toromont's operating costs and raw materials supply. By their nature, forward-looking information and statements, and the factors upon which they are based, are subject to risks and uncertainties which may be beyond Toromont's ability to control or predict. Actual results or events could differ materially from those expressed or implied by forward- looking information and statements. Factors that could cause actual results or events to differ from current expectations include, among others: business cycle risk, including general economic conditions in the countries in which Toromont operates; risk of commodity price changes including precious and base metals; risk of changes in foreign exchange rates, including the Cdn$/US$ exchange ate; risk of the termination of distribution or original equipment manufacturer agreements; risk of equipment product acceptance and availability of supply; risk of increased competition; credit risk related to financial instruments; risk of additional costs associated with warranties and maintenance contracts; interest rate risk on financing arrangements; risk of availability of financing; risk of environmental regulation. Additional information on these factors and other risks and uncertainties that could cause actual results or events to differ from current expectations can be found in the “Risks and Risk Management” and “Outlook” section of Toromont’s annual MD&A for 2013 contained in the 2013 Toromont Annual Report. Other factors, risks and uncertainties not presently known to Toromont or that Toromont currently believes are not material could also cause actual results or events to differ materially from those expressed or implied by forward-looking information and statements. Forward-looking information and statements contained herein about prospective results of operations, financial position or cash flows are presented for the purpose of assisting Toromont's shareholders in understanding managements' current view regarding those future outcomes and may not be appropriate for other purposes. Readers are cautioned not to place undue reliance on the forward-looking information and statements contained herein, which are given as of the date of this document, and not to use such information and statements for anything other than their intended purpose. Toromont disclaims any obligation or intention to update or revise any forward-looking information or statement, whether the result of new information, future events or otherwise, except as required by applicable law.

INVESTMENT HIGHLIGHTS Market Leading Brands And Position Product Support Provides Stability Superior Financial Track Record Focus on Operational Excellence Strong Balance Sheet Growth Opportunities In Diversified Segments 45 Year Dividend Record, 25 Of Consecutive Growth

DEALER NETWORK Equipment Group 7 7 +2,400 Members Mary River Toromont CAT Meadowbank Mine Site Branches Nunavut DEDICATED TEAM 1 1. Agnico Eagle 2. Goldcorp DELIVERS 3. DeBeers 4. Detour Gold 6 6 SPECIALIZED 5. Goldcorp Voisey’s 6. Vale Bay Newfoundland EQUIPMENT Manitoba 7. Baffinland & Labrador AND MUCH MORE Toromont CAT Branches 3 3 Musselwhite Victor 2 2 72 Locations Detour 4 4 Lake Porcupine 5 5 Ontario IN NEWFOUNDLAND & Remote mine sites contributed $750MM LABRADOR, ONTARIO, over past decade MANITOBA AND NUNAVUT >250 Brands >28,000 Items 35 Toromont CAT Branches 37 Stores Serving History of Successful Consolidation 13,600 Customers

GROWTH IN REVENUE GROWTH FUELED BY: � Diverse Markets Served by Extensive Branch Network � Mining, Battlefield, Power Systems, Sitech Mid Canada � Broadened Product Offerings (e.g., MaK, MwM, Metso, Trimble/Sitech) � Increased Population and Larger Equipment Fuels Product Support 1,400 25000 1,200 20000 1,000 Estimated Installed Base (Units) Revenue ($'000,000) 15000 800 600 10000 400 5000 200 0 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Product Support Sales Equipment Sales Rental Estimated Installed Base Revenue presented is based on trailing 12 months. Installed units based on management estimates for Toromont CAT.

REVENUES BY MARKET SEGMENT 1 * Based on total sales for three years ended Dec. 31/13 GOOD DIVERSITY WITH EMPHASIS ON INFRASTRUCTURE

How Will The Equipment Group Continue to Grow? Mining Power Systems Construction Parts & Service Market Share Product Range ORGANIC GROWTH

GROWING INFRASTRUCTURE DEFICIT 79 % infrastructure ffailing 79% Of infrastructure $130 B 9 million people f a i l i n g The Greater Toronto and Hamilton National infrastructure deficit, Canadian physical infrastructure Area is one of the fastest-growing growing at $2B annually has outlived its life expectancy regions in North America. by 2031 8

INFRASTRUCTURE MAJOR PROJECTS Windsor Essex Parkway - $1.6B Hwy 407 Public transit (Toronto, Ottawa, Kitchener) Pan-Am Games investment Renewable Energy Development Ontario Lower Churchill - $7.4B ExxonMobil Hebron Project - $14B Husky Graving Dock Construction Newfoundland & Labrador Keeyask Generating Station - $6.2B Conawapa Hydro Power (longer term) - $10.2B Bipole III - $3.2B East Side Hwy Initiative - $3.0B Bakken Oil Field Development Manitoba Iqaluit Airport Potential significant infrastructure requirements to support mining and other initiatives Nunavut

RENTAL MARKET Equipment Group 200 175 150 125 R12 Revenue ($millions) 100 75 50 HEAVY RENT LIGHT EQUIPMENT POWER GENERATION 25 0 2007 2008 2009 2010 2011 2012 2013 Light Equipment Heavy Equipment Power Generation Rent with a Purchase Option Rental - Used

RENTAL MARKET OPPORTUNITY Total market - $1.2B F’13 revenue - $161 Strategies: Rental Revenues $ Millions • Continued investment • Process refinement • One new Battlefield location per year R’12 Revenues to Dec. 31/13 * Market Size based on internal management estimates SUBSTANTIAL ROOM FOR CONTINUED GROWTH 11

Resource Industries MINING OPPORTUNITIES CAT 6060FS Diesel Shovel Loads 795F AC Truck Good diversity of commodities in Toromont territories � Gold has been a significant contributor � Opportunities in chromite & iron ore projects � Significant increase in installed base increases product support opportunity � Broadest product offering in segment �

GROWTH IN MINING Resource Industries INSTALLED BASE Replacement value based on current pricing. Installed units based on management estimates. SUBSTANTIAL INCREASE IN MINING EQUIPMENT INSTALLED BASE CREATES INCREASED PRODUCT SUPPORT OPPORTUNITY

PRODUCT SUPPORT $450 1200 $400 1000 $350 Trailing 12 month Product Support Revenues ($MM) Number of Technicians $300 800 $250 600 $200 $150 400 $100 200 $50 $- 0 Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec '03 '04 '04 '05 '05 '06 '06 '07 '07 '08 '08 '09 '09 '10 '10 '11 '11 '12 '12 '13 '13 Product Support Revenues Number of Technicians � Technician recruitment continues

EXPANDED PRODUCT SUPPORT OFFERING 2 nd largest and expanding Larger customers who do not Largest opportunity want to own facilities or hire opportunity • Potential to capture $100M technicians increase in Parts sales • Targeting through specialized • MARC agreements can take services more efficiently • Older machine population many forms tailored to done by dealer looks for alternate parts customer requirements options • Trained technicians more • Customers want to focus on difficult to find in certain • Toromont has many solutions core business rather than areas to provide good value options machinery • Dealer skill sets compliment • Focused marketing • Risk adverse customers looking customer technicians skills for fixed cost predictability approaches being developed 15

EQUIPMENT MANAGEMENT SOLUTIONS ADVANCING � Increasing focus on EM and CM (condition monitoring) solutions � Provides further opportunity for differentiation and customer service � Toromont CAT currently has 2,800 contracted service agreements in place (PMs and MARCs) 16