EX-99.3 4 noaex99312-31x2013.htm EXHIBIT
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NORTH AMERICAN ENERGY PARTNERS INC. Exhibit 99.3
Management's Discussion and Analysis
For the year ended December 31, 2013

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Table of Contents

A. Explanatory Notes | 1
B. Significant Business Event | 2
C. Our Business | 6
D. Financial Results | 8
E. Outlook | 23
F. Legal And Labour Matters | 23
G. Resources And Systems | 24
H. Forward-Looking Information, Assumptions And Risk Factors | 31
I. General Matters | 34

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Management's Discussion and Analysis
For the year ended December 31, 2013
A. EXPLANATORY NOTES
February 19, 2014
The following Management's Discussion and Analysis (MD&A) is as of December 31, 2013 and should be read in conjunction with the attached audited consolidated financial statements for the year ended December 31, 2013 and notes that follow. These statements have been prepared in accordance with United States (US) generally accepted accounting principles (GAAP). Except where otherwise specifically indicated, all dollar amounts are expressed in Canadian dollars. The audited consolidated financial statements and additional information relating to our business, including our most recent Annual Information Form (AIF), are available on the Canadian Securities Administrators' SEDAR System at www.sedar.com, the Securities and Exchange Commission's website at www.sec.gov and our company website at www.nacg.ca.
Change of Financial Reporting Year-End
As announced on June 10, 2013, we have changed our reporting year-end to align with the calendar year-end of December 31st. In our audited consolidated financial statements and notes that follow for the year ending December 31, 2013, our transition year, we have presented results from January 1, 2013 to December 31, 2013 with comparative results recast from January 1 to December 31, 2012. As part of the change in our year-end, our auditors (KPMG) performed an audit on our consolidated financial statements for the year ended December 31, 2012 and the opening balance sheet of that year.
Analysis of annual results presented in this MD&A reflects a discussion on activity from January 1 to December 31 of the relevant year. To aid in the transition to a calendar year-end we have provided a summary of consolidated results for the nine months ended December 31, 2013 and 2012, respectively, in "Financial Results - Summary of Consolidated Nine Month Results" in this MD&A.
Caution Regarding Forward-Looking Information
Our MD&A is intended to enable readers to gain an understanding of our current results and financial position. To do so, we provide material information and analysis about our company and our business at a point in time, in the context of our historical and possible future development. Accordingly, certain sections of this report contain forward-looking information that is based on current plans and expectations. This forward-looking information is affected by risks, assumptions and uncertainties that could have a material impact on future prospects. Please refer to "Forward-Looking Information, Assumptions and Risk Factors" for a discussion of the risks, assumptions and uncertainties related to such information. Readers are cautioned that actual events and results may vary.
Non-GAAP Financial Measures
A non-GAAP financial measure is generally defined by the Securities and Exchange Commission (SEC) and by the Canadian securities regulatory authorities as one that purports to measure historical or future financial performance, financial position or cash flows, but excludes or includes amounts that would not be so adjusted in the most comparable GAAP measures. In our MD&A, we use non-GAAP financial measures such as EBITDA which is "net income before interest expense, income taxes, depreciation and amortization", "Consolidated EBITDA" (as defined in our fifth amended and restated credit agreement, our "credit agreement"), "Piling Business EBITDA" and "backlog". Where relevant, particularly for earnings-based measures, we provide tables in this document that reconcile non-GAAP measures used to amounts reported in the consolidated financial statements.
EBITDA and Consolidated EBITDA
Consolidated EBITDA is defined as EBITDA, excluding the effects of unrealized foreign exchange gain or loss, realized and unrealized gain or loss on derivative financial instruments, non-cash stock-based compensation expense, gain or loss on disposal of plant and equipment, the impairment of goodwill, the amendment related to the 2011 $42.5 million revenue write-down on the Canadian Natural 1 overburden removal contract and certain other non-cash items included in the calculation of net income.

1 Canadian Natural Resources Limited (Canadian Natural), owner and operator of the Horizon Oil Sands mine site.
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Management reviews EBITDA to determine whether plant and equipment are being allocated efficiently. In addition, our credit facility requires us to maintain both a minimum interest coverage ratio and a maximum senior leverage ratio and also identifies limits to our annual capital spend, all of which are calculated using Consolidated EBITDA. Non-compliance with these financial covenants could result in a requirement to immediately repay all amounts outstanding under our credit facility.
As EBITDA and Consolidated EBITDA are non-GAAP financial measures, our computations of EBITDA and Consolidated EBITDA may vary from others in our industry. EBITDA and Consolidated EBITDA should not be considered as alternatives to operating income or net income as measures of operating performance or cash flows as measures of liquidity. EBITDA and Consolidated EBITDA have important limitations as analytical tools and should not be considered in isolation or as substitutes for analysis of our results as reported under US GAAP. For example, EBITDA and Consolidated EBITDA do not:

• | reflect our cash expenditures or requirements for capital expenditures or capital commitments or proceeds from capital disposals;

• | reflect changes in our cash requirements for our working capital needs;

• | reflect the interest expense or the cash requirements necessary to service interest or principal payments on our debt;

• | include tax payments or recoveries that represent a reduction or increase in cash available to us; or

• | reflect any cash requirements for assets being depreciated and amortized that may have to be replaced in the future.

Consolidated EBITDA excludes unrealized foreign exchange gains and losses and realized and unrealized gains and losses on derivative financial instruments, which, in the case of unrealized losses may ultimately result in a liability that may need to be paid and in the case of realized losses, represents an actual use of cash during the period.
Piling Business EBITDA
As part of the sale of our Piling related assets and liabilities, as discussed in "Significant Business Events - Divestiture of Piling Related Assets and Liabilities", we may receive contingent proceeds based on certain profitability thresholds being achieved from the use of the assets and liabilities sold. The calculation of the actual profitability performance, for the purpose of determining the contingent proceeds that we should receive, is defined in the purchase and sale agreement using substantially our definition of Consolidated EBITDA, as described above, as it applies to the Piling business with a limit placed on incremental corporate General & Administrative ("G&A") costs that can be included in the determination of such EBITDA (the "Piling Business EBITDA").
B. SIGNIFICANT BUSINESS EVENTS
Accomplishments against our 2013 Strategic Priorities
At the start of 2013, we established a set of strategic priorities which would lead us to becoming an integrated service provider of choice for the developers and operators of resource-based industries in a broad and often challenging range of environments while also restoring shareholder confidence and value. These priorities included:
•Enhance safety culture;
•Increase customer satisfaction;
•Improve productivity and profitability;
•Improve cash flow;
•Strengthen the balance sheet; and
•Increase our presence outside the oil sands.
Our focus on these priorities resulted in the following significant 2013 accomplishments:

• | Reduction of our Total Recordable Injury Rate ("TRIR") to an industry leading 0.77;

• | Simplification of our customer offering to a strategic focus on our core Heavy Construction and Mining business, with the sale of our piling related assets and liabilities;

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• | Improvement to shareholder value with the buy-back of nearly 5% of our outstanding common shares (1.8 million common shares);

• | Reduction of our net balance sheet debt to $104.6 million from $335.7 million which should lead to an anticipated $18.0 million interest cost savings in 2014;

• | Annual 45% improvement in shareholder's equity, on the balance sheet, to $191.8 million;

• | Significant improvement to our cost structure such that we exited the year with Consolidated EBITDA margin from continuing operations of near to 10% despite a 21% drop in revenue;

• | Generation of $34.7 million of free cash flow 2 from better profitability and capital discipline; and

• | Change to our financial reporting period to a calendar year-end.

With these major accomplishments behind us we are focusing our significant experience and knowledge on growing our core Heavy Construction and Mining business while continuing to improve our profitability through a focus on project management efficiencies and equipment cost improvements.
A complete discussion on these strategic priorities and tactics can be found in our most recent Annual Information Form ("AIF").
Divestiture of Piling Related Assets and Liabilities
On July 12, 2013 we sold our Canadian based Piling related assets and liabilities and our US based Cyntech US Inc. legal entity (the "Piling sale") to the Keller Group plc (the "Keller Group" or the "Purchaser") for consideration of $227.5 million, plus $5.9 million of working capital adjustment. Net proceeds of $219.4 million were realized after the assignment to the Purchaser of $5.9 million of capital leases and selling and disposal costs of $8.1 million. A pre-tax gain on disposal of $98.1 million was recorded. In addition, we may receive up to $92.5 million in additional proceeds over the next three years, contingent on the Purchaser achieving prescribed profitability thresholds from the assets and liabilities sold. These contingent proceeds will be recognized as the Piling Business EBITDA targets are achieved. For a discussion on the contingent proceeds related to the Piling sale see "Financial Results - Contingent Proceeds" in this MD&A.t
In conjunction with the Piling sale, we have exited the piling, foundation, pipeline anchor and tank services businesses.
A portion of the net proceeds was used to repay the Term A Facility, drawn against the fourth amended and restated credit agreement ("the previous credit agreement") and the outstanding balance of the associated Revolver Facility in July 2013, while a significant portion of the remaining proceeds was used in the partial redemption of our Series 1 Debentures. For a discussion of the partial redemption of our Series 1 Debentures see "Debt Restructuring", below.
For all periods presented, Piling results are now reported within "Income from discontinued operations, net of tax" in our Consolidated Statements of Operations and Comprehensive Income (Loss) and "Cash provided by (used in) discontinued operations" in our Consolidated Statements of Cash Flows. Prior to the Piling sale, activity in the Piling business was reported as part of the Commercial and Industrial Construction segment.
For details of our results from discontinued operations related to piling activity see "Financial Results - Net Income (Loss) from Discontinued Operations" in this MD&A. For a discussion on the contingent proceeds from the Piling sale see "Financial Results - Contingent Proceeds" in this MD&A.
Debt and Equity Restructuring
Credit Facility Repayment
During the twelve months ended December 31, 2013, we repaid the outstanding balance of both our Term A Facility and Term B Facility, drawn against the previous credit agreement and subsequently eliminated both Term Facilities.

• | During the three months ended September 30, 2013, we used a portion of the Piling sale net proceeds to pay the $16.3 million outstanding on the Term A Facility.

• | During the three months ended June 30, 2013, we repaid the $5.6 million outstanding balance of our Term B Facility.

2 Free cash flow is calculated as cash from operating activities net cash from sustaining investing activities.
t This paragraph contains forward-looking information. Please refer to "Forward-Looking Information, Assumptions and Risk Factors" for a discussion of the risks and uncertainties related to such information.
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Fifth Amended and Restated Credit Agreement
On October 9, 2013 we signed a three year fifth amended and restated credit agreement ("the credit agreement") with our existing banking syndicate. The credit agreement provides for a 1.5% lower interest rate and increased borrowing flexibility by securing the facility through a combination of working capital and equipment. Highlights of the facility include:

• | Borrowing of up to $85.0 million under a revolving facility ("the Revolving Facility")

• | The use of a borrowing base is determined by the value of receivables and equipment which reduces our financial covenants to:

◦ | A Senior Leverage Ratio, which is to be maintained at less than 2.00 to 1.00.

◦ | A Fixed Charge Cover Ratio, which by December 31, 2013 must be maintained at greater than 1.20 to 1.00.

For a discussion of our credit agreement and the related covenants, see "Resources and Systems - Credit Facility" in this MD&A.
Partial Purchase / Redemption of 9.125% Series 1 Senior Unsecured Debentures Due 2017
To satisfy the requirement in the indenture governing our 9.125% Series 1 Senior Unsecured Debentures Due 2017(the "Series 1 Debentures"), on July 22, 2013 we made an offer to purchase $170.0 million of our Series 1 Debentures at par plus accrued and unpaid interest (the "Net Proceeds Offer") which amount represented the excess proceeds from the Piling sale that were not used for the purposes permitted in the indenture. The $170.0 million offer expired on August 21, 2013, pursuant to which $8.1 million of aggregate principal amount of notes were tendered to the offer and $0.3 million in accrued and unpaid interest was paid.
In addition, on July 22, 2013 we announced that we had elected to redeem $150.0 million of our Series 1 Debentures, less the amount of any Series 1 Debentures tendered under the Net Proceeds Offer. Holders of record at the close of business on August 23, 2013 had their Series 1 Debentures redeemed on a pro rata basis for 104.563% of the principal amount, plus accrued and unpaid interest. On August 27, 2013, we redeemed $141.9 million of aggregate principal amount of notes, paid $5.0 million of accrued and unpaid interest and recorded a loss on debt extinguishment of $6.5 million.
The partial Series 1 Debentures retirement is expected to reduce annual interest cost by approximately $13.7 million for the Series 1 Debentures to $6.8 million.t
Amendment to the Trust Indenture Related to the Series 1 Debentures
We sought and obtained the required consents of holders of the Series 1 Debentures to amend, and on October 10, 2013, we amended the Trust Indenture related to the Series 1 Debentures ("the amendment"). The amendment allows us to make Restricted Payments (as defined in the Indenture) in an aggregate amount of up to $30.0 million, subject to certain limitations. In consideration for the required consent we paid a $1.5 million pro-rated fee to the Series 1 Debenture holders that provided consent for the amendment.
Heavy Equipment Lease Refinancing
During the year ended December 31, 2013, we negotiated the refinancing of $13.6 million in heavy equipment related leases. This is in addition to the $40.1 million in heavy equipment related leases refinanced during the year ended December 31, 2012, including $7.2 million of expired lease renewals. The lease refinancing included changes to lease terms and to the timing of principal repayments and resulted in an associated addition to property, plant and equipment (net of capitalized over-hour liabilities). These leases were previously classified as operating leases, however with the refinancing terms they are now classified as capital leases. As a result of the Piling sale, we reduced our capital leases by $5.9 million with the assignment of piling related equipment leases to the Purchaser.

t This paragraph contains forward-looking information. Please refer to "Forward-Looking Information, Assumptions and Risk Factors" for a discussion of the risks and uncertainties related to such information.
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Summary of Debt Restructuring
Debt declined by $185.1 million in the year ended December 31, 2013. Our debt reduction activities have rendered a total reduction of $256.1 million in debt (excluding the Revolving Facility) since December 31, 2011, as follows:

| Balance for the period ended
| Dec 31, 2013 |  | Mar 31, 2013 |  | Dec 31, 2012 |  | Dec 31, 2011 |
Debentures and term loans |  |  |  |
Series 1 Debentures | 75,000 |  | 225,000 |  | 225,000 |  | 225,000 |
Term A Facility | — |  | 17,202 |  | 18,139 |  | 21,887 |
Term B Facility | — |  | 5,644 |  | 9,107 |  | 39,059 |
Total debentures and term loans | $ | 75,000 |  | $ | 247,846 |  | $ | 252,246 |  | $ | 285,946 |
Equipment / building financing |  |  |  |
Operating lease commitments | 58,143 |  | 61,589 |  | 63,884 |  | 145,731 |
Capital leases (including interest) | 47,401 |  | 46,975 |  | 49,547 |  | 5,013 |
Total equipment / building financing | $ | 105,544 |  | $ | 108,564 |  | $ | 113,431 |  | $ | 150,744 |

We did not have a Revolving Facility balance at December 31, 2013, compared to balances of $22.4 million, $35.0 million and $38.0 million at March 31, 2013, December 31, 2012 and December 31, 2011, respectively.
Share Purchase Program
On December 19, 2013 we completed the purchase and subsequent cancellation of 1.8 million voting common shares, in the normal course, in the United States primarily through the facilities of the New York Stock Exchange, using monetized claims arising from our recent business divestments (the "Purchase Program"). The common voting shares purchased under the Purchase Program represented approximately 5% of our issued and outstanding voting common shares, leaving a balance of 34,715,236 shares outstanding as of December 19, 2013.
All purchases of shares in the United States were made in compliance with Rule 10b-18, under the US Securities Exchange Act of 1934, whereby the safe harbour conditions limited the number of shares that could be purchased per day to a maximum of 25% of the average daily trading volume for the four calendar weeks preceding the date of purchase, with certain exceptions permitted for block trading. The price per share, for all but the block trades, was based on the market price of such shares at the time of purchase, in accordance with regulatory requirements.
Restructuring our General and Administrative and Operations Support Organizations
As a result of the July 2013 Piling sale, our business support requirements were simplified. As a single focused Heavy Construction and Mining business, at the time of the Piling sale announcement we implemented a business restructuring initiative to simplify our business support needs. Subsequently, in November 2013 we implemented a further restructuring initiative to align our operational support staffing levels to our operational volumes. A total of $0.8 million in restructuring charges were recorded against our results from ongoing operations as a result of these reorganizations.
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C. OUR BUSINESS
Five Year Business Performance
The table below represents select financial data related to our business performance for the past five years:

| Year ended December 31,
(dollars in thousands except ratios and per share amounts) | 2013 |  |  | 2012 |  |  | 2011(1) |  |  | 2010 |  |  | 2009 |
Operating Data |  |  |  |  |  |  |  |  |
Revenue | $ | 470,484 |  |  | $ | 595,422 |  |  | $ | 636,101 |  |  | $ | 716,562 |  |  | $ | 621,427 |
Gross profit | 45,739 |  |  | 24,030 |  |  | 16,293 |  |  | 97,166 |  |  | 129,612 |
Gross profit margin | 9.7 | % |  | 4.0 | % |  | 2.6 | % |  | 13.6 | % |  | 20.9 | %
Operating (loss) income(2) | (2,683 | ) |  | (23,136 | ) |  | (31,574 | ) |  | 36,431 |  |  | (66,734 | )
Net loss from continuing operations(2) | (18,047 | ) |  | (32,496 | ) |  | (35,508 | ) |  | (2,230 | ) |  | (99,937 | )
Net income (loss)(2) | 69,184 |  |  | (13,673 | ) |  | (34,737 | ) |  | (5,142 | ) |  | (108,415 | )
Consolidated EBITDA for continuing operations(3) | 43,466 |  |  | 28,071 |  |  | 55,518 |  |  | 81,538 |  |  | 116,679 |
Consolidated EBITDA(3) | 53,043 |  |  | 67,817 |  |  | 73,330 |  |  | 86,549 |  |  | 119,498 |
Per share information for continuing operations |  |  |  |  |  |  |  |  |
Net loss - basic | $ | (0.50 | ) |  | $ | (0.90 | ) |  | $ | (0.98 | ) |  | $ | (0.06 | ) |  | $ | (2.77 | )
Net loss - diluted | (0.50 | ) |  | (0.90 | ) |  | (0.98 | ) |  | (0.06 | ) |  | (2.77 | )
Per share information |  |  |  |  |  |  |  |  |
Net income (loss) - basic | $ | 1.91 |  |  | $ | (0.38 | ) |  | $ | (0.96 | ) |  | $ | (0.06 | ) |  | $ | (2.77 | )
Net income (loss) - diluted | 1.89 |  |  | (0.38 | ) |  | (0.96 | ) |  | (0.08 | ) |  | (0.24 | )
Balance Sheet Data |  |  |  |  |  |  |  |  |
Total assets(4) | $ | 445,641 |  |  | $ | 474,749 |  |  | $ | 478,671 |  |  | $ | 568,458 |  |  | $ | 570,979 |
Total shareholders' equity | 191,835 |  |  | 132,557 |  |  | 143,573 |  |  | 176,902 |  |  | 181,849 |
Net debt to shareholders' equity(4)(5) | 0.5:1 |  |  | 2.5:1 |  |  | 2.3:1 |  |  | 1.7:1 |  |  | 1.3:1 |

1 |  | Financial results for the year ended December 31, 2011 include a $42.5 million revenue write-down related to the Canadian Natural contract.
2 |  | Financial results for the year ended December 31, 2009 include a goodwill impairment charge of $143.4 million.
3 |  | For a definition of Consolidated EBITDA and reconciliation to net income see "Non-GAAP Financial Measures" and "Consolidated EBITDA" in this MD&A.
4 |  | Total assets and net debt to shareholder's equity have been adjusted to only include assets and net debt associated with continuing operations for all periods presented.
5 |  | Net debt is calculated as the net of Series 1 Debentures, 8 3/4% senior notes, current and non-recurring portion of swap liability, capital lease obligations and credit facilities, less cash.

Business Overview
We provide a wide range of mining and heavy construction services to customers in the resource development and industrial construction sectors, primarily within Western Canada.
Our core market is the Canadian oil sands, where we provide construction and operations support services through all stages of an oil sands project's lifecycle. We have extensive construction experience in both mining and in situ oil sands projects and we have been providing operations support services to the five producers currently mining bitumen in the oil sands since inception of their respective projects: Syncrude 3, Suncor 4, Shell 5, Imperial Oil 6 and Canadian Natural. We focus on building long-term relationships with our customers and in the case of Syncrude and Suncor, these relationships span over 30 years.
We believe that we operate one of the largest equipment fleets of any Heavy Construction and Mining contract services provider in Canada. Our total fleet (owned, leased and rented) includes approximately 459 pieces of diversified heavy construction equipment supported by over 1,301 pieces of ancillary equipment. We have a specific capability operating in the harsh climate and difficult terrain of northern Canada, particularly in the Canadian oil sands. While our services are primarily focused on the oil sands, we believe that we have demonstrated our ability to successfully apply our oil sands knowledge and technology and put it to work in other resource

3 Syncrude Canada Ltd. (Syncrude) - operator of the oil sands mining and extraction operations for the Syncrude Project, a joint venture amongst Canadian Oil Sands Limited (37%), Imperial Oil Resources (25%), Suncor Energy Oil and Gas Partnership (12%), Sinopec Oil Sands Partnership (9%), Nexen Oil Sands Partnership (7%), Murphy Oil Company Ltd. (5%) and Mocal Energy Limited (5%).
4 Suncor Energy Inc. (Suncor).
5 Shell Canada Energy (Shell), a division of Shell Canada Limited, which is the operator of the oil sands mining and extraction operations on behalf of Athabasca Oil Sands Project (AOSP), a joint venture amongst Shell Canada Limited (60%), Chevron Canada Limited (20%) and Marathon Oil Corporation (20%).
6 Imperial Oil Resources Limited. (Imperial Oil).
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development projects. We believe we are positioned to respond to the needs of a wide range of other resource developers and we remain committed to continue expanding our operations outside of the Canadian oil sands.
We believe that our excellent safety record, coupled with our significant oil sands knowledge, experience, long-term customer relationships, equipment capacity and scale of operations, differentiate us from our competition and provide significant value to our customers.
Operations Overview
Our services are primarily focused on supporting the construction and operation of surface mines, particularly in the oil sands, with a focus on:

• | site clearing and access road construction;

• | site development and underground utility installation;

• | construction and relocation of mine site infrastructure;

• | stripping, muskeg removal and overburden removal;

• | heavy equipment and labour supply;

• | material hauling; and

• | mine reclamation and tailings pond construction.

In addition, we provide site development services for plants and refineries, including in situ oil sands facilities.
We maintain our large diversified fleet of heavy equipment and ancillary equipment from our three significant maintenance and repair centers, two based in Fort McMurray, Alberta on our customer's mine sites and one based near Edmonton, Alberta. In addition, we operate running maintenance and repair facilities at each of our customer's oil sands mine sites.
We believe our competitive strengths are as follows:

• | leading market position in contract mining services;

• | large, well-maintained equipment fleet;

• | broad mining service offering across a project's lifecycle;

• | long-term customer relationships; and

• | operational flexibility.

For a complete discussion of our competitive strengths, see the "Business Overview - Competitive Strengths" section of our Annual Information Form ("AIF"), which section is expressly incorporated by reference into this MD&A.
Revenue by Source and End Market
Our revenue is generated from two main sources:

• | operations support services; and

• | construction services.

Our revenue is generated from two main end markets:

• | Canadian oil sands; and

• | industrial construction.

For a discussion on our revenue by source and end market see the "Our Business - Revenue by Source and End Market" section of our most recent AIF, which section is expressly incorporated by reference into this MD&A.
Our Strategy
Our strategy is to be an integrated service provider of choice for the developers and operators of resource-based industries in a broad and often challenging range of environments. For a discussion on how we will implement our strategy see the "Our Strategy" section of our most recent AIF, which section is expressly incorporated by reference into this MD&A.
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D. FINANCIAL RESULTS
Summary of Consolidated Annual Results

| Year Ended December 31,
(dollars in thousands, except per share amounts) | 2013 |  |  | 2012 |  |  | 2011 |  |  | 2013 vs 2012 Change |  |  | 2013 vs 2011 Change |
Revenue | $ | 470,484 |  |  | $ | 595,422 |  |  | $ | 636,101 |  |  | $ | (124,938 | ) |  | $ | (165,617 | )
Project costs | 180,348 |  |  | 278,266 |  |  | 295,724 |  |  | (97,918 | ) |  | (115,376 | )
Equipment costs | 184,931 |  |  | 204,475 |  |  | 223,860 |  |  | (19,544 | ) |  | (38,929 | )
Equipment operating lease expense | 22,975 |  |  | 43,286 |  |  | 63,705 |  |  | (20,311 | ) |  | (40,730 | )
Depreciation | 36,491 |  |  | 45,365 |  |  | 36,519 |  |  | (8,874 | ) |  | (28 | )
Gross profit | 45,739 |  |  | 24,030 |  |  | 16,293 |  |  | 21,709 |  |  | 29,446 |
Gross profit margin | 9.7 | % |  | 4.0 | % |  | 2.6 | % |  | 5.7 | % |  | 7.2 | %
Select financial information: |  |  |  |  |  |  |  |  |  |  |  |  |  |
General and administrative expenses (excluding stock-based compensation) | 33,708 |  |  | 42,049 |  |  | 42,294 |  |  | (8,341 | ) |  | (8,586 | )
Stock-based compensation expense (benefit) | 6,193 |  |  | 530 |  |  | (806 | ) |  | 5,663 |  |  | 6,999 |
Operating loss | (2,683 | ) |  | (23,136 | ) |  | (31,574 | ) |  | 20,453 |  |  | 28,891 |
Interest expense | 21,697 |  |  | 23,540 |  |  | 21,537 |  |  | (1,843 | ) |  | 160 |
Net loss from continuing operations | (18,047 | ) |  | (32,496 | ) |  | (35,508 | ) |  | 14,449 |  |  | 17,461 |
Net loss margin from continuing operations | (3.8 | )% |  | (5.5 | )% |  | (5.6 | )% |  | 1.6 | % |  | 1.7 | %
Net Income from discontinued operations | 87,231 |  |  | 18,823 |  |  | 771 |  |  | 68,408 |  |  | 86,460 |
Net income (loss) | 69,184 |  |  | (13,673 | ) |  | (34,737 | ) |  | 82,857 |  |  | 103,921 |
EBITDA from continuing operations (1) | $ | 37,315 |  |  | $ | 29,813 |  |  | $ | 11,398 |  |  | $ | 7,502 |  |  | $ | 25,917 |
Consolidated EBITDA from continuing operations | $ | 43,466 |  |  | $ | 28,071 |  |  | $ | 55,518 |  |  | $ | 15,395 |  |  | $ | (12,052 | )
Consolidated EBITDA margin from continuing operations | 9.2 | % |  | 4.7 | % |  | 8.7 | % |  | 4.5 | % |  | 0.5 | %
Consolidated EBITDA from discontinued operations | $ | 9,577 |  |  | $ | 39,746 |  |  | $ | 17,812 |  |  | $ | (30,169 | ) |  | $ | (8,235 | )
Consolidated EBITDA(1) (as defined within the credit agreement) | $ | 53,043 |  |  | $ | 67,817 |  |  | $ | 73,330 |  |  | $ | (14,774 | ) |  | $ | (20,287 | )
Per share information |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income (loss) - Basic | $ | 1.91 |  |  | $ | (0.38 | ) |  | $ | (0.96 | ) |  | $ | 2.29 |  |  | $ | 2.87 |
Net income (loss) - Diluted | $ | 1.89 |  |  | $ | (0.38 | ) |  | $ | (0.96 | ) |  | $ | 2.27 |  |  | $ | 2.85 |

(1) | A reconciliation of continuing operations net loss to EBITDA and Consolidated EBITDA is as follows:

| Year Ended December 31,
(dollars in thousands) | 2013 |  |  | 2012 |  |  | 2011 |
Net loss from continuing operations | $ | (18,047 | ) |  | $ | (32,496 | ) |  | $ | (35,508 | )
Adjustments: |  |  |  |  |
Interest expense, net | 21,697 |  |  | 23,540 |  |  | 21,537 |
Income tax benefit | (6,102 | ) |  | (10,282 | ) |  | (14,779 | )
Depreciation | 36,491 |  |  | 45,365 |  |  | 36,519 |
Amortization of intangible assets | 3,276 |  |  | 3,686 |  |  | 3,629 |
EBITDA from continuing operations | $ | 37,315 |  |  | $ | 29,813 |  |  | $ | 11,398 |
Adjustments: |  |  |  |  |
Unrealized gain on derivative financial instruments | (6,551 | ) |  | (4,017 | ) |  | (2,925 | )
Loss on disposal of property, plant and equipment | 3,033 |  |  | 1,837 |  |  | 1,221 |
Loss (gain) on disposal of assets held for sale | 2,212 |  |  | (90 | ) |  | (479 | )
Stock-based compensation expense | 981 |  |  | 1,374 |  |  | 1,770 |
Equity in (earnings) loss of unconsolidated joint venture | — |  |  | (846 | ) |  | 2,008 |
Loss on debt extinguishment | 6,476 |  |  | — |  |  | — |
Revenue write-down on Canadian Natural project | — |  |  | — |  |  | 42,525 |
Consolidated EBITDA from continuing operations | $ | 43,466 |  |  | $ | 28,071 |  |  | $ | 55,518 |
Consolidated EBITDA from discontinued operations | $ | 9,577 |  |  | $ | 39,746 |  |  | $ | 17,812 |
Consolidated EBITDA | $ | 53,043 |  |  | $ | 67,817 |  |  | $ | 73,330 |

2013 Management's Discussion and Analysis 8

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Analysis of Annual Results from Continuing Operations
On July 12, 2013 we sold our Canadian based Piling assets and liabilities and our US based Cyntech US legal entity (as discussed in “Significant Business Events - Divestiture of Piling Related Assets and Liabilities” in this MD&A). On November 22, 2012 we sold our Pipeline related assets and exited the pipeline construction, integrity and maintenance business. Under US GAAP we have classified the current and prior period results from our piling and pipeline related operations as “Results from discontinued operations” and excluded these results from our presentation and discussion of results from continuing operations.
Revenue
For the year ended December 31, 2013, revenue was $470.5 million, down from $595.4 million for the year ended December 31, 2012. The decrease from 2012 reflects lower reclamation and heavy civil construction volumes, with the reduction in reclamation work at Base Plant, Jackpine and Muskeg River mines and the 2012 completion of heavy civil construction at the Jackpine and Muskeg River mines. Heavy civil construction work performed at the Mildred Lake Mine Relocation ("MLMR") project partially offset these lower volumes. Work performed in constructing a mechanically stabilized earth ("MSE") wall on the same MLMR project wrapped up in the first part of 2013.
The start-up of mine services work at the Kearl mine, under a new master services agreement ("MSA") lessened the effect of a reduction in tailings and environmental construction related projects at the Millennium mine, the completion of earthworks activity at the Canadian Co-Op Refinery ("CCRL") in Saskatchewan earlier this year and the 2012 completion of earthworks activity on the Dover steam assisted gravity drainage ("SAGD") project. The construction work at the Mt. Milligan Copper / Gold project in British Columbia was also completed in 2012. Overburden removal volumes at the Horizon mine remained consistent, year-over-year, while the small drop in site development work at the Joslyn mine was partially offset by the early stages of site preparation work at the Fort Hills mine.
For the year ended December 31, 2013, revenue was down from $636.1 million for the year ended December 31, 2011. The decrease in revenue primarily reflects the increased focus on cost containment by oil sands producers in response to the widening of the price differential between Alberta crude oil and both the West Texas Intermediate (WTI) crude oil and Brent crude oil. Cost control initiatives included activities such as the re-engineering of mine plans, to either reduce or eliminate operational costs, the reduction in the amount of outsourced mine support activities and the re-assessment of capital project spending. The actions of the Alberta oil producers led to a significant reduction of mine services, reclamation and heavy civil construction work from 2011 levels. Overburden removal volumes were also lower at the Base Plant and Millennium mines due to the reduced demand. Adding to the decline in revenue was the completion of 2011 earthworks projects at CCRL in Saskatchewan, the Blackgold mine, in Conklin Alberta, the Kearl mine and the Kirby SAGD project. Partially offsetting the reduced volumes was the heavy civil construction work performed on the MLMR project, the start-up of site development work at the Joslyn mine and mine support services at the Kearl mine.
In 2011, overburden removal revenue at the Horizon mine was negatively affected by a $42.5 million write-down to our long-term overburden removal contract with Canadian Natural (the "Canadian Natural write-down") in the first quarter of that year and the suspension of our overburden removal activities on May 18, 2011 for the balance of the year as repairs were required on the mine's primary upgrading facility, damaged by a January 2011 fire.
Gross profit
For the year ended December 31, 2013, gross profit was $45.7 million or 9.7% of revenue, up from $24.0 million or 4.0% of revenue in the previous year. The increase in gross profit and margin from 2012 primarily reflects the $20.3 million reduction in operating lease costs as a result of the refinancing of a portion of these leases to capital leases. Project margin improvements on the MLMR heavy civil construction project and the Joslyn mine site development work, as a result of the execution of previously unsigned change-orders, the benefits realized from equipment cost savings initiatives and a reduction in the use of rental equipment helped to offset the effect of lower equipment utilization on gross profit.
For the year ended December 31, 2013, gross profit was up from $16.3 million (2.6% of revenue) in the year ended December 31, 2011. Gross profit in 2011 was negatively affected by the $42.5 million Canadian Natural write-down. Excluding the Canadian Natural write-down, 2011 adjusted gross profit would have been $58.8 million (8.7% of adjusted revenue). Operating lease costs in 2013 were $40.7 million lower than 2011 as a result of the refinancing of a portion of these leases as capital leases, the sale of under-utilized leased assets and the early purchase of leased contract assets by Canadian Natural. The reduction from the adjusted 2011 gross profit was driven by the significant reduction in volumes across the oil sands in 2012. This negative effect on profits was partially offset by a
2013 Management's Discussion and Analysis 9

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return to profitability at the Horizon mine, as a result of contract amendments executed in 2012, the execution of unsigned change orders on the MLMR project, the completion of a 2011 low margin earthworks project, the benefits realized from our equipment cost savings initiative and a reduction in the use of rental equipment.
Depreciation for the year ended December 31, 2013 was $36.5 million (7.8% of revenue) down from $45.4 million (7.6% of revenue) for the year ended December 31, 2012 and equivalent to $36.5 million (5.7% of revenue) for the year ended December 31, 2011. We recorded a $3.4 million asset impairment charge to depreciation in the current year, specific to the impairment of certain older pieces of equipment in our fleet that were under-performing compared to our targeted reliability levels. This compares to the recording of a $10.1 million impairment charge to depreciation in the year ended December 31, 2012, specific to an older fleet of under-performing trucks and a $1.0 million impairment charge recorded in the year ended December 31, 2011.
Operating loss
For the year ended December 31, 2013, operating loss was $2.7 million, compared to an operating loss of $23.1 million during the year ended December 31, 2012. G&A expense (excluding stock based compensation expense) was $33.7 million for the year ended December 31, 2013, down from $42.0 million in the year ended December 31, 2012. The reduced spending was primarily driven by lower employee costs, under our simplified business structure, partially offset by a $3.8 million increase in short-term incentive plan costs. We recorded a $0.8 million severance charge in the current year related to two separate business reorganizations. In contrast, we recorded a $2.9 million severance charge in 2012 related to a business reorganization executed that year. Stock based compensation expense increased $5.7 million over 2012, as a result of the revaluation of stock based compensation liabilities due to increases in our share price.
For the year ended December 31, 2013 we recorded $5.2 million of losses on the disposal of property, plant and equipment ("PP&E") and assets held for sale as we disposed of certain pieces of our heavy equipment fleet that had passed its useful life. In addition we recorded $3.3 million of amortization of intangible assets. For the year ended December 31, 2012, we recorded $1.7 million of net losses on the disposal of PP&E and assets held for sale as we disposed of certain pieces of our heavy equipment fleet that had passed their useful life. In addition we recorded $3.7 million of amortization of intangible assets.
The operating loss for 2013 was an improvement over the $31.6 million operating loss for the year ended December 31, 2011. Current year G&A expense (excluding stock based compensation) was down from $42.3 million for the year ended December 31, 2011, driven by lower employee costs, partially offset by a $3.3 million increase in short-term incentive plan costs. There were no severance charges related to business reorganizations in 2011. The current year stock based compensation expense was $7.0 million higher than the 2011 expense reflecting the impacts of a higher share price.
For the year ended December 31, 2011, we recorded $0.7 million of net losses on the disposal of PP&E and assets held for sale as we disposed of certain pieces of our heavy equipment fleet that had passed their useful life. In addition we recorded $3.6 million of amortization of intangible assets.
Net loss from continuing operations

| Year Ended December 31,
| 2013 |  |  | 2012 |  |  | 2011 |
Per share information - continuing operations |  |  |  |  |
Net loss - Basic | $ | (0.50 | ) |  | $ | (0.90 | ) |  | $ | (0.98 | )
Net loss - Diluted | $ | (0.50 | ) |  | $ | (0.90 | ) |  | $ | (0.98 | )

For the year ended December 31, 2013, we recorded a loss of $18.0 million (basic and diluted loss per share of $0.50), compared to a net loss of $32.5 million (basic and diluted loss per share of $0.90) and a net loss of $35.5 million (basic and diluted loss per share of $0.98) for the years ended December 31, 2012 and 2011, respectively. Non-cash items, non-recurring items affecting net income in the years ended December 31, 2013 and December 31, 2012 includes non-cash gains on embedded derivatives. The non-cash, non-recurring item benefitting the results for the year ended December 31, 2011 included the reversal of the embedded derivative in the Canadian Natural contract, resulting from changes to the pricing structure of the contract. This impact was partially offset by unrealized losses on embedded derivatives in certain long-term supplier contracts. Included in the loss for the year ended December 31, 2011 was the $42.5 million revenue write-down ($31.8 million after tax loss) related to the Canadian Natural contract. Excluding non-cash items in the current and prior-year periods, net loss would have been $22.9 million (basic and diluted loss per share of $0.64) for the year ended December 31, 2013 compared to a net loss of $35.5 million (basic and diluted loss per share of $0.98) and net loss of $5.2 million (basic and diluted loss per share of $0.14) for the respective prior year periods.
2013 Management's Discussion and Analysis 10

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Summary of Consolidated Three Month Results

| Three Months Ended December 31,
(dollars in thousands, except per share amounts) | 2013 |  |  | 2012 |  |  | Change |
Revenue | $ | 108,914 |  |  | $ | 116,815 |  |  | $ | (7,901 | )
Project costs | 40,476 |  |  | 51,248 |  |  | (10,772 | )
Equipment costs | 39,703 |  |  | 39,301 |  |  | 402 |
Equipment operating lease expense | 4,296 |  |  | 7,495 |  |  | (3,199 | )
Depreciation | 7,638 |  |  | 9,014 |  |  | (1,376 | )
Gross profit | 16,801 |  |  | 9,757 |  |  | 7,044 |
Gross profit margin | 15.4 | % |  | 8.4 | % |  | 7.1 | %
Select financial information: |  |  |  |  |
General and administrative expenses (excluding stock-based compensation) | 7,973 |  |  | 8,863 |  |  | (890 | )
Stock-based compensation expense | 1,644 |  |  | 1,325 |  |  | 319 |
Operating income (loss) | 5,559 |  |  | (1,731 | ) |  | 7,290 |
Interest expense | 3,220 |  |  | 5,861 |  |  | (2,641 | )
Net income (loss) from continuing operations | 5,498 |  |  | (4,869 | ) |  | 10,367 |
Net income (loss) margin from continuing operations | 5.0 | % |  | (4.2 | )% |  | 9.2 | %
Net Income from discontinued operations | 36 |  |  | 9,489 |  |  | (9,453 | )
Net Income | 5,534 |  |  | 4,620 |  |  | 914 |
EBITDA from continuing operations(1) | $ | 18,515 |  |  | $ | 8,819 |  |  | $ | 9,696 |
Consolidated EBITDA from continuing operations | $ | 15,063 |  |  | $ | 8,964 |  |  | $ | 6,099 |
Consolidated EBITDA margin from continuing operations | 13.8 | % |  | 7.7 | % |  | 6.2 | %
Consolidated EBITDA from discontinued operations | $ | (323 | ) |  | $ | 16,340 |  |  | $ | (16,663 | )
Consolidated EBITDA(1)(as defined within the credit agreement) | $ | 14,740 |  |  | $ | 25,304 |  |  | $ | (10,564 | )
Per share information |  |  |  |  |
Net income - Basic | $ | 0.15 |  |  | $ | 0.13 |  |  | $ | 0.02 |
Net income - Diluted | $ | 0.15 |  |  | $ | 0.13 |  |  | $ | 0.02 |

(1) | A reconciliation of continuing operations net income (loss) to EBITDA and Consolidated EBITDA is as follows:

| Three Months Ended December 31,
(dollars in thousands) | 2013 |  |  | 2012 |
Net income (loss) from continuing operations | $ | 5,498 |  |  | $ | (4,869 | )
Adjustments: |  |  |
Interest expense | 3,220 |  |  | 5,861 |
Income tax (benefit) | 1,403 |  |  | (2,067 | )
Depreciation | 7,638 |  |  | 9,014 |
Amortization of intangible assets | 756 |  |  | 880 |
EBITDA from continuing operations | $ | 18,515 |  |  | $ | 8,819 |
Adjustments: |  |  |
Unrealized gain on derivative financial instruments | (4,528 | ) |  | (677 | )
Loss (gain) on disposal of property, plant and equipment | 784 |  |  | 430 |
Loss (gain) on disposal of assets held for sale | 85 |  |  | (10 | )
Stock-based compensation expense | 207 |  |  | 402 |
Consolidated EBITDA from continuing operations | $ | 15,063 |  |  | $ | 8,964 |
Consolidated EBITDA from discontinued operations | $ | (323 | ) |  | $ | 16,340 |
Consolidated EBITDA | $ | 14,740 |  |  | $ | 25,304 |

Analysis of Three Month Results from Continuing Operations
As discussed in “Financial Results - Analysis of Annual Results from Continuing Operations” in this MD&A, under US GAAP we have classified the current and prior period results from our piling and pipeline related operations as “Results from discontinued operations” and excluded these results from our presentation and discussion of results from continuing operations.
Revenue
For the three months ended December 31, 2013, consolidated revenue was $108.9 million, down from $116.8 million in the same period last year. The change reflects lower volumes of reclamation work and haul road construction at the Millennium mine, partially offset by an increase in site development activity at the Joslyn mine and heavy civil construction activity for the MLMR project at the Base Plant mine. The start-up of mine support services activity earlier this year at the Kearl mine and early site development activities at the Fort Hills mine
2013 Management's Discussion and Analysis 11

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replaced 2012 projects completed earlier this year, including the MSE wall for the MLMR project, the construction project at the Mt. Milligan Copper/Gold mine in British Columbia and underground construction projects at the Quest carbon capture facility in Fort Saskatchewan, Alberta and the CCRL refinery in Saskatchewan.
Gross profit
For the three months ended December 31, 2013, gross profit was $16.8 million or 15.4% of revenue, up from a gross profit of $9.8 million or 8.4% of revenue during the same period last year. Margin improvements on two longer-term projects, as a result of the execution of change orders in the quarter, strong performance on a haul road project and the benefit of equipment cost efficiencies led to improved gross profit in the quarter and more than offset the effect of lower volumes. Contributing to the gross profit improvement for the quarter was a reduction in equipment operating lease expense to $4.3 million from $7.5 million in the same period last year, as a result of the refinancing of operating leases earlier in the year.
Operating income (loss)
For the three months ended December 31, 2013, operating income was $5.6 million, compared to an operating loss of $1.7 million during the same period last year. G&A expense (excluding stock based compensation expense) was $8.0 million for the three months ended December 31, 2013, down from $8.9 million in the same period last year, reflecting benefits from our business restructuring activities partially offset by an $0.8 million business restructuring charge recorded in the quarter. Stock based compensation expense increased by $0.3 million compared to 2012, reflecting the revaluation of our liability related to fluctuations in our share price.
For the three months ended December 31, 2013, we recorded $0.9 million of losses on the disposal of PP&E and assets held for sale compared to $0.4 million in the previous period. Amortization of intangible assets was similar for the two periods.
Net income (loss) from continuing operations

| Three Months Ended December 31,
| 2013 |  |  | 2012 |
Per share information - continuing operations |  |  |
Net income (loss) - Basic | $ | 0.15 |  |  | $ | (0.13 | )
Net income (loss) - Diluted | $ | 0.15 |  |  | $ | (0.13 | )

For the three months ended December 31, 2013, net income from continuing operations was $5.5 million (basic and diluted income per share of $0.15), compared to a net loss of $4.9 million (basic and diluted loss per share of $0.13) during the same period last year. Non-cash, non-recurring items affecting net income in both the current and prior periods included non-cash gains on embedded derivatives. Excluding these non-cash items in the current and prior-year periods, net income would have been $2.1 million (basic and diluted income per share of $0.06) compared to a net loss of $5.4 million (basic and diluted loss per share of $0.15) during the comparable prior year period.
2013 Management's Discussion and Analysis 12

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Non-Operating Income and Expense for Continuing Operations

|  | Three Months Ended December 31, |  | Year Ended December 31,
(dollars in thousands) |  | 2013 |  |  | 2012 |  |  | 2013 |  |  | 2012 |  |  | 2011 |
Interest expense |  |  |  |  |  |  |  |  |  |
Long term debt |  |  |  |  |  |  |  |  |  |
Interest on Series 1 Debentures |  | $ | 1,711 |  |  | $ | 3,631 |  |  | $ | 12,507 |  |  | $ | 15,208 |  |  | $ | 15,054 |
Interest on credit facilities |  | 260 |  |  | 932 |  |  | 2,424 |  |  | 4,759 |  |  | 4,203 |
Interest on capital lease obligations |  | 686 |  |  | 888 |  |  | 2,716 |  |  | 1,326 |  |  | 462 |
Amortization of deferred financing costs |  | 588 |  |  | 422 |  |  | 4,326 |  |  | 1,623 |  |  | 1,564 |
Interest on long term debt |  | $ | 3,245 |  |  | $ | 5,873 |  |  | $ | 21,973 |  |  | $ | 22,916 |  |  | $ | 21,283 |
Other interest |  | (25 | ) |  | (12 | ) |  | (276 | ) |  | 624 |  |  | 254 |
Total Interest expense |  | $ | 3,220 |  |  | $ | 5,861 |  |  | $ | 21,697 |  |  | $ | 23,540 |  |  | $ | 21,537 |
Foreign exchange (gain) loss |  | (34 | ) |  | 21 |  |  | (156 | ) |  | 119 |  |  | 101 |
Unrealized (gain) loss on derivative financial instruments |  |  |  |  |  |  |  |  |  |  |  |
Unrealized gain on embedded price escalation features in a long term customer construction contract |  | — |  |  | — |  |  | — |  |  | — |  |  | (6,156 | )
Unrealized (gain) loss on embedded price escalation features in certain long term supplier contracts |  | (4,528 | ) |  | (677 | ) |  | (6,551 | ) |  | (4,017 | ) |  | 3,231 |
Total unrealized gain on derivative financial instruments |  | $ | (4,528 | ) |  | $ | (677 | ) |  | $ | (6,551 | ) |  | $ | (4,017 | ) |  | $ | (2,925 | )
Loss on debt extinguishment |  | — |  |  | — |  |  | 6,476 |  |  | — |  |  | — |
Income tax expense (benefit) |  | 1,403 |  |  | (2,067 | ) |  | (6,102 | ) |  | (10,282 | ) |  | (14,779 | )

Interest expense
In the three months ended December 31, 2013, total interest expense was $3.2 million, down from $5.9 million in the previous year. This reduction reflects the benefits from the debt restructuring in 2013 which included the partial redemption of our Series 1 Debentures and the repayment of our term facilities drawn under our previous credit agreement, earlier this year. During the quarter, we wrote off $0.3 million in deferred financing costs related to the expiration of the previous credit facility.
In the year ended December 31, 2013, total interest expense was $21.7 million, down from the $23.5 million and up from $21.5 million in interest expense for the years ended December 31, 2012 and December 31, 2011, respectively. The current year interest expense includes the write-off of $3.1 in deferred financing costs for both the partial retirement of our Series 1 Debentures and the expiration of the previous credit facility. Excluding the write-off, the reduction in interest expense from that of the previous two years reflects the benefits from the debt restructuring in 2013 which included the partial redemption of our Series 1 Debentures and the repayment of our term facilities drawn under our previous credit agreement. The interest savings from the debt restructuring was partially offset by an increase in interest on capital lease obligations, a result of the refinancing of operating leases to capital leases during both 2013 and 2012.
A more detailed discussion on our Series 1 Debentures, our credit facilities and our debt restructuring can be found under "Significant Business Events - Debt and Equity Restructuring" and "Securities, Rights Plans and Agreements".
Foreign exchange (gain) loss
The foreign exchange gains and losses recognized in the current and prior year periods relate primarily to the effect of changes in the exchange rate of the Canadian dollar against the US dollar on purchases of equipment parts. A more detailed discussion about our foreign currency risk can be found under “Risk Factors - Quantitative and Qualitative Disclosures about Market Risk”.
Unrealized (gain) loss on derivative financial instruments
The unrealized gains on derivative financial instruments for the three months and year ended December 31, 2013 reflect the elimination of the embedded derivatives in long-term supplier contracts which resulted in a final reversal of the embedded derivative liability. Prior year period gains and losses largely reflect the change in fair value of the embedded derivative and the draw-down of remaining commitments in the contracts. Included in the embedded derivative valuation was the impact of fluctuations in provisions that require a price adjustment to reflect changes in the Canadian/US dollar exchange rate and the United States government published Producers' Price Index (US-PPI) for Mining Machinery and Equipment from the original contract amount.
2013 Management's Discussion and Analysis 13

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During the year ended December 31, 2011, we signed an amendment with Canadian Natural on the long-term overburden removal contract which eliminated a provision in the original contract that required adjustments to customer billings to reflect changes in exchange rates and price indices. This effectively eliminated an embedded derivative from the contract, leading to the reversal of the associated embedded derivate liability.
The measurement of embedded derivatives, as required by GAAP, caused our reported net income to fluctuate as Canadian/US dollar exchange rates, interest rates and the US-PPI for Mining Machinery and Equipment change. The accounting for these derivatives had no impact on operations, Consolidated EBITDA (as defined within our credit agreement) or how we evaluated operating performance.
Loss on debt extinguishment
On August 22, 2013, we redeemed $141.9 million of aggregate principal amount of notes as part of our debt restructuring and recorded a loss of $6.5 million related to the transaction.
A more detailed discussion on the partial retirement of our Series 1 Debentures can be found under "Significant Business Events - Debt and Equity Restructuring".
Income tax expense (benefit)
For the three months ended December 31, 2013, we recorded a current income tax benefit of $0.2 million and a deferred income tax expense of $1.6 million, for a total income tax expense of $1.4 million. This compares to a combined income tax benefit of $2.1 million for the same period last year. For the year ended December 31, 2013, we recorded a current income tax benefit of $2.4 million and a deferred income tax benefit of $3.7 million for a total income tax benefit of $6.1 million. This compares to a combined income tax expense of $1.0 million for the same period last year and a combined income tax benefit of $10.3 million for the year ended December 31, 2011.
For the three months and year ended December 31, 2013, income tax expense as a percentage of income before income taxes differed from the statutory rate of 25.26%. This difference is primarily due to permanent differences resulting from stock based compensation expens e. For the three months and year ended December 31, 2012, income tax expense as a percentage of income before income taxes differed from the statutory rate of 25.12% primarily due to the effect of permanent tax differences and prior year tax adjustments. For the year ended December 31, 2011, income tax expense as a percentage of income before income taxes differed from the statutory rate of 26.25%, largely due to the same factors affecting the year ended December 31, 2012.
NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS

| Three months ended |  | Year ended
| December 31, |  | December 31,
(dollars in thousands, except per share amounts) | 2013 |  |  | 2012 |  |  | 2013 |  |  | 2012 |  |  | 2011 |
Net income from discontinued operations |  |  |  |  |  |  |  |  |
Piling net income | $ | 36 |  |  | $ | 8,154 |  |  | $ | 88,371 |  |  | $ | 26,457 |  |  | $ | 6,963 |
Pipeline net income (loss) | — |  |  | 1,335 |  |  | (1,140 | ) |  | (7,634 | ) |  | (6,192 | )
| $ | 36 |  |  | $ | 9,489 |  |  | $ | 87,231 |  |  | $ | 18,823 |  |  | $ | 771 |
Per share information |  |  |  |  |  |  |  |  |
Net income - Basic | $ | — |  |  | $ | 0.26 |  |  | $ | 2.41 |  |  | $ | 0.52 |  |  | $ | 0.02 |
Net income - Diluted | $ | — |  |  | $ | 0.26 |  |  | $ | 2.39 |  |  | $ | 0.52 |  |  | $ | 0.02 |

2013 Management's Discussion and Analysis 14

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Summary of Piling Discontinued Operations Results
The statement of operations for discontinued piling operations is detailed in the table below:

| Three months ended, |  | Year ended,
| December 31, |  | December 31,
(dollars in thousands, except per share amounts) | 2013 |  |  | 2012 |  |  | 2013 |  |  | 2012 |  |  | 2011 |
Revenue | $ | 1,447 |  |  | $ | 72,283 |  |  | $ | 98,735 |  |  | $ | 242,106 |  |  | $ | 154,680 |
Project costs | 1,644 |  |  | 54,098 |  |  | 79,472 |  |  | 178,970 |  |  | 117,158 |
Equipment costs | — |  |  | — |  |  | — |  |  | — |  |  | — |
Equipment operating lease expense | — |  |  | 578 |  |  | 1,242 |  |  | 2,315 |  |  | 2,004 |
Depreciation | — |  |  | 974 |  |  | 706 |  |  | 3,706 |  |  | 3,323 |
Gross profit | $ | (197 | ) |  | $ | 16,633 |  |  | $ | 17,315 |  |  | $ | 57,115 |  |  | $ | 32,195 |
General and administrative expenses | 126 |  |  | 3,142 |  |  | 6,857 |  |  | 12,518 |  |  | 11,177 |
Amortization of intangible assets | — |  |  | 352 |  |  | 351 |  |  | 1,410 |  |  | 2,121 |
Gain on disposal of piling assets and liabilities | (719 | ) |  | — |  |  | (98,065 | ) |  | — |  |  | — |
Operating income | $ | 396 |  |  | $ | 13,139 |  |  | $ | 108,172 |  |  | $ | 43,187 |  |  | $ | 18,897 |
Interest expense | — |  |  | 2,198 |  |  | 4,758 |  |  | 7,557 |  |  | 7,222 |
Income before income taxes | $ | 396 |  |  | $ | 10,941 |  |  | $ | 103,414 |  |  | $ | 35,630 |  |  | $ | 11,675 |
Current income tax expense | 164 |  |  | — |  |  | 164 |  |  | — |  |  | — |
Deferred income tax expense | 196 |  |  | 2,787 |  |  | 14,879 |  |  | 9,173 |  |  | 4,712 |
Net income from discontinued operations | $ | 36 |  |  | $ | 8,154 |  |  | $ | 88,371 |  |  | $ | 26,457 |  |  | $ | 6,963 |
Basic net income per share | $ | — |  |  | $ | 0.22 |  |  | $ | 2.44 |  |  | $ | 0.73 |  |  | $ | 0.19 |
Diluted net income per share | $ | — |  |  | $ | 0.22 |  |  | $ | 2.41 |  |  | $ | 0.73 |  |  | $ | 0.19 |

Interest expense recorded for discontinued piling operations for all three years represents the interest on the Term A Facility balance that was repaid from the net proceeds of the piling asset sales. Other interest expense that is not directly attributable to or related to piling operations has been allocated based on a ratio of net assets to be sold to total consolidated net assets.
Summary of Pipeline Discontinued Operations Results
The statement of operations for discontinued pipeline operations is detailed in the table below:

| Three months ended |  | Year ended
| December 31, |  | December 31,
(dollars in thousands, except per share amounts) | 2013 |  |  | 2012 |  |  | 2013 |  |  | 2012 |  |  | 2011 |
Revenue | $ | — |  |  | $ | 13,488 |  |  | $ | — |  |  | $ | 84,399 |  |  | $ | 107,785 |
Project costs | — |  |  | 13,291 |  |  | 1,321 |  |  | 93,442 |  |  | 112,845 |
Depreciation | — |  |  | 10 |  |  | — |  |  | 556 |  |  | 780 |
Gross loss | $ | — |  |  | $ | 187 |  |  | $ | (1,321 | ) |  | $ | (9,599 | ) |  | $ | (5,840 | )
General and administrative expenses | — |  |  | 85 |  |  | 312 |  |  | 1,277 |  |  | 1,469 |
(Gain) loss on disposal of property, plant and equipment | — |  |  | (438 | ) |  | 63 |  |  | (438 | ) |  | — |
Recovery of previously expensed tools, supplies and equipment parts | — |  |  | (1,095 | ) |  | — |  |  | (1,095 | ) |  | — |
Gain on sale of inventory | — |  |  | (668 | ) |  | (46 | ) |  | (668 | ) |  | — |
Operating gain (loss) | $ | — |  |  | $ | 2,303 |  |  | $ | (1,650 | ) |  | $ | (8,675 | ) |  | $ | (7,309 | )
Interest expense | — |  |  | 233 |  |  | — |  |  | 962 |  |  | 1,050 |
Loss before income taxes | $ | — |  |  | $ | 2,070 |  |  | $ | (1,650 | ) |  | $ | (9,637 | ) |  | $ | (8,359 | )
Deferred income tax expense (benefit) | — |  |  | 735 |  |  | (510 | ) |  | (2,003 | ) |  | (2,167 | )
Net gain (loss) from discontinued operations | $ | — |  |  | $ | 1,335 |  |  | $ | (1,140 | ) |  | $ | (7,634 | ) |  | $ | (6,192 | )
Net gain (loss) per share from discontinued operations (basic and diluted) | $ | — |  |  | $ | 0.04 |  |  | $ | (0.03 | ) |  | $ | (0.21 | ) |  | $ | (0.17 | )

Interest expense recorded for discontinued pipeline operations for the previous period represents the interest on the Term B Facility balance that was repaid from the net proceeds of the pipeline asset sales.
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Consolidated EBITDA from discontinued operations
A reconciliation from net income from discontinued operations to EBITDA and Consolidated EBITDA from discontinued operations is as follows:

| Three months ended |  | Year ended
| December 31, |  | December 31,
(dollars in thousands) | 2013 |  |  | 2012 |  |  | 2013 |  |  | 2012 |  |  | 2011 |
Net income | $ | 36 |  |  | $ | 9,489 |  |  | $ | 87,231 |  |  | $ | 18,823 |  |  | $ | 771 |
Adjustments: |  |  |  |  |  |  |  |  |
Interest expense | — |  |  | 2,431 |  |  | 4,758 |  |  | 8,519 |  |  | 8,272 |
Income tax expense | 360 |  |  | 3,522 |  |  | 14,533 |  |  | 7,170 |  |  | 2,545 |
Depreciation | — |  |  | 984 |  |  | 706 |  |  | 4,262 |  |  | 4,103 |
Amortization of intangible assets | — |  |  | 352 |  |  | 351 |  |  | 1,410 |  |  | 2,121 |
EBITDA from discontinued operations | $ | 396 |  |  | $ | 16,778 |  |  | $ | 107,579 |  |  | $ | 40,184 |  |  | $ | 17,812 |
Adjustments: |  |  |  |  |  |  |  |  |
(Gain) loss on disposal of property, plant and equipment | — |  |  | (438 | ) |  | 63 |  |  | (438 | ) |  | — |
Gain on disposal of assets and liabilities held for sale | (719 | ) |  | — |  |  | (98,065 | ) |  | — |  |  | — |
Consolidated EBITDA from discontinued operations | $ | (323 | ) |  | $ | 16,340 |  |  | $ | 9,577 |  |  | $ | 39,746 |  |  | $ | 17,812 |

Summary of Consolidated Cash Flows from Continuing Operations
Consolidated cash flows from continuing operations are summarized in the table below:

| Three months ended December 31, |  | Year ended December 31,
(dollars in thousands) | 2013 |  |  | 2012 |  |  | 2013 |  |  | 2012 |  |  | 2011 |
Cash provided by operating activities | $ | 28,202 |  |  | $ | 2,334 |  |  | $ | 57,488 |  |  | $ | 87,175 |  |  | $ | 18,369 |
Cash used in investing activities | (4,789 | ) |  | (8,169 | ) |  | (27,093 | ) |  | (45,479 | ) |  | (33,594 | )
Cash (used in) provided by financing activities | (16,759 | ) |  | (17,124 | ) |  | (246,148 | ) |  | (45,610 | ) |  | 23,301 |
Net (decrease) increase in cash from continuing operations | $ | 6,654 |  |  | $ | (22,959 | ) |  | $ | (215,753 | ) |  | $ | (3,914 | ) |  | $ | 8,076 |

Operating activities
For the three months ended December 31, 2013, cash provided by operating activities was $28.2 million, up from $2.3 million in cash provided for the three months ended December 31, 2012, primary as a result of increased net income and increased cash from non-cash net working capital.
For the year ended December 31, 2013, cash provided by operating activities was $57.5 million, down from $87.2 million in cash provided during the year ended December 31, 2012 and up from $18.4 million in cash provided during the year ended December 31, 2011. Current year cash provided by operating activities benefited from a lower net loss, combined with a $25.5 million contribution from non-cash net working capital. Activity in the year ended December 31, 2012 benefitted from the $38.4 million decrease in non-cash net working capital, from the Canadian Natural settlement of past work price escalators and change-orders, offsetting the low gross profit in the period. The growth in non-cash working capital on this same contract along with low gross profit negatively affected cash provided by operating activities in the year ended December 31, 2011.
Investing activities
For the three months ended December 31, 2013, cash used in investing activities was $4.8 million, down from $8.2 million in cash used for the same period a year ago. Current period investing activities included $6.3 million for the purchase of PP&E and intangible assets, partially offset by cash inflows of $1.5 million in proceeds on the disposal of PP&E and assets held for sale. Prior year investing activities of $8.2 million included $10.1 million for the purchase of PP&E and intangible assets partially offset by $1.9 million in proceeds on the disposal of property, plant and equipment and assets held for sale.
For the year ended December 31, 2013, cash used in investing activities was $27.1 million, down from $45.5 million in cash used in the year ended December 31, 2012 and $33.6 million in cash used during the year ended December 31, 2011. Current period investing activities included $34.2 million for the purchase of PP&E and intangible assets, partially offset by cash inflows of $7.1 million in proceeds on the disposal of PP&E and assets held for sale. Prior year investing activities of $45.5 million included the $58.4 million purchase of PP&E and intangible assets partially offset by $10.7 million in proceeds on the disposal of PP&E and assets held for sale and $2.2 million in proceeds on the wind-up of unconsolidated joint ventures. Cash used in investing activities during the year ended December 31, 2011 included $34.8 million for the purchase of PP&E and intangible assets partially offset by $1.2 million in proceeds on the disposal of PP&E and assets held for sale.
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Financing activities
For the three months ended December 31, 2013, cash used in financing activities was $16.8 million, down from $17.1 million in cash used for the three months ended December 31, 2012. Current three month financing activity included $2.2 million in financing costs, $11.7 million for the Share Purchase Program and a $3.6 million repayment of capital lease obligations. Cash used in financing activities for the three-month period ended December 31, 2012 was $17.1 million resulting from a net decrease in the credit facilities of $12.5 million and $4.7 million repayment of capital lease obligations.
For the year ended December 31, 2013, cash used in financing activities was $246.1 million, compared to the $45.6 million of cash used in financing activities during the year ended December 31, 2012 and the $23.3 million of cash provided by financing activities for the year ended December 31, 2011. The current year outflow was primarily a result of the redemption of $156.5 million in Series 1 Debentures and a net repayment towards our credit facilities of $62.3 million, funded with net proceeds of the Piling sale. Also contributing towards the cash movement in the current year was $11.7 million for the Share Purchase Program and a $14.0 million repayment of capital lease obligation. Cash provided by financing activities of $45.6 million and $23.3 million for the years ended December 31, 2012 and December 31, 2011, reflects scheduled and unscheduled repayments on our Term Facilities and repayment of capital lease obligations, partially offset by cash drawn from our Revolving Facility.
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Summary of Consolidated Nine Month Results

| Nine months ended,
| December 31,
(dollars in thousands, except per share amounts) | 2013 |  |  | 2012 |  |  | Change |
Revenue | $ | 340,203 |  |  | $ | 414,328 |  |  | $ | (74,125 | )
Project costs | 128,564 |  |  | 192,660 |  |  | (64,096 | )
Equipment costs | 133,932 |  |  | 142,844 |  |  | (8,912 | )
Equipment operating lease expense | 16,561 |  |  | 28,309 |  |  | (11,748 | )
Depreciation | 24,353 |  |  | 25,584 |  |  | (1,231 | )
Gross profit | 36,793 |  |  | 24,931 |  |  | 11,862 |
Gross profit margin | 10.8 | % |  | 6.0 | % |  | 4.8 | %
Select financial information: |  |  |  |  |
General and administrative expenses (excluding stock based compensation) | 23,581 |  |  | 30,338 |  |  | (6,757 | )
Stock based compensation expense | 3,783 |  |  | 1,209 |  |  | 2,574 |
Operating income (loss) | 3,811 |  |  | (9,537 | ) |  | 13,348 |
Interest expense | 15,808 |  |  | 17,850 |  |  | (2,042 | )
Net loss from continuing operations | (8,819 | ) |  | (19,085 | ) |  | 10,266 |
Net loss margin from continuing operations | (2.6 | )% |  | (4.6 | )% |  | 2.0 | %
Net Income from discontinued operations | 82,670 |  |  | 22,289 |  |  | 60,381 |
Net income | 73,851 |  |  | 3,204 |  |  | 70,647 |
EBITDA from continuing operations (1) | $ | 30,614 |  |  | $ | 21,305 |  |  | $ | 9,309 |
Consolidated EBITDA from continuing operations | $ | 34,518 |  |  | $ | 19,830 |  |  | $ | 14,688 |
Consolidated EBITDA margin from continuing operations | 10.1 | % |  | 4.8 | % |  | 5.4 | %
Consolidated EBITDA from discontinued operations | $ | 529 |  |  | $ | 40,427 |  |  | $ | (39,898 | )
Consolidated EBITDA(1) (as defined within the credit agreement) | $ | 35,047 |  |  | $ | 60,257 |  |  | $ | (25,210 | )
Per share information |  |  |  |  |
Net income - Basic | $ | 2.04 |  |  | $ | 0.09 |  |  | $ | 1.95 |
Net income - Diluted | $ | 2.01 |  |  | $ | 0.09 |  |  | $ | 1.92 |

(1) A reconciliation of continuing operations net loss to EBITDA and Consolidated EBITDA is as follows:

| Nine months ended December 31,
(dollars in thousands) | 2013 |  |  | 2012 |
Net loss from continuing operations | $ | (8,819 | ) |  | $ | (19,085 | )
Adjustments: | — |  |  |
Interest expense | 15,808 |  |  | 17,850 |
Income tax benefit | (3,110 | ) |  | (5,844 | )
Depreciation | 24,353 |  |  | 25,584 |
Amortization of intangible assets | 2,382 |  |  | 2,800 |
EBITDA from continuing operations | $ | 30,614 |  |  | $ | 21,305 |
Adjustments: | — |  |  |
Unrealized gain on derivative financial instruments | (6,441 | ) |  | (2,595 | )
Loss on disposal of property, plant and equipment | 1,205 |  |  | 797 |
Loss (gain) on disposal of assets held for sale | 2,031 |  |  | (80 | )
Stock-based compensation expense | 633 |  |  | 999 |
Equity in earnings of unconsolidated joint venture | — |  |  | (596 | )
Loss on debt extinguishment | 6,476 |  |  | — |
Consolidated EBITDA from continuing operations | $ | 34,518 |  |  | $ | 19,830 |
Consolidated EBITDA from discontinued operations | $ | 529 |  |  | $ | 40,427 |
Consolidated EBITDA | $ | 35,047 |  |  | $ | 60,257 |

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Nine Month Non-operating Income and Expenses for Continuing Operations

|  | Nine Months Ended December 31,
(dollars in thousands) |  | 2013 |  |  | 2012 |
Interest expense |  |  |  |
Long term debt |  |  |  |
Interest on Series 1 Debentures |  | $ | 8,674 |  |  | $ | 11,397 |
Interest on credit facilities |  | 1,416 |  |  | 3,406 |
Interest on capital lease obligations |  | 2,020 |  |  | 1,229 |
Amortization of deferred financing costs |  | 3,949 |  |  | 1,230 |
Interest on long term debt |  | $ | 16,059 |  |  | $ | 17,262 |
Other interest |  | (251 | ) |  | 588 |
Total Interest expense |  | $ | 15,808 |  |  | $ | 17,850 |
Foreign exchange (gain) loss |  | (103 | ) |  | 137 |
Unrealized gain on derivative financial instruments |  | (6,441 | ) |  | (2,595 | )
Income tax benefit |  | (3,110 | ) |  | (5,844 | )

Nine Month Net Income from Discontinued Operations

| Nine months ended
| December 31,
| Piling |  | Pipeline
(dollars in thousands, except per share amounts) | 2013 |  |  | 2012 |  |  | 2013 |  |  | 2012 |
Revenue | $ | 51,444 |  |  | $ | 189,191 |  |  | $ | — |  |  | $ | 39,180 |
Project costs | 46,615 |  |  | 139,757 |  |  | — |  |  | 38,048 |
Equipment operating lease expense | 663 |  |  | 1,736 |  |  | — |  |  | — |
Depreciation | — |  |  | 2,886 |  |  | — |  |  | 196 |
Gross profit | $ | 4,166 |  |  | $ | 44,812 |  |  | $ | — |  |  | $ | 936 |
General and administrative expenses | 3,637 |  |  | 9,232 |  |  | — |  |  | 934 |
Amortization of intangible assets | — |  |  | 1,057 |  |  | — |  |  | — |
Gain on disposal of piling assets and liabilities | (98,062 | ) |  | — |  |  | — |  |  | — |
Loss (gain) on disposal of property, plant and equipment | — |  |  | — |  |  | — |  |  | (438 | )
Recovery of previously expensed tools, supplies and equipment parts | — |  |  | — |  |  | — |  |  | (1,095 | )
Gain on sale of inventory | — |  |  | — |  |  | — |  |  | (668 | )
Operating income | $ | 98,591 |  |  | $ | 34,523 |  |  | $ | — |  |  | $ | 2,203 |
Interest expense | 2,828 |  |  | 5,709 |  |  | — |  |  | 700 |
Income before income taxes | $ | 95,763 |  |  | $ | 28,814 |  |  | $ | — |  |  | $ | 1,503 |
Current income tax expense | 164 |  |  | — |  |  | — |  |  | — |
Deferred income tax expense | 12,929 |  |  | 7,345 |  |  | — |  |  | 683 |
Net income from discontinued operations | $ | 82,670 |  |  | $ | 21,469 |  |  | $ | — |  |  | $ | 820 |
Basic net income per share | $ | 2.28 |  |  | $ | 0.59 |  |  | $ | — |  |  | $ | 0.02 |
Diluted net income per share | $ | 2.25 |  |  | $ | 0.59 |  |  | $ | — |  |  | $ | 0.02 |

Summary of Consolidated Quarterly Results
A number of factors have the potential to contribute to variations in our quarterly financial results between periods, including:

• | the timing and size of capital projects undertaken by our customers on large oil sands projects;

• | seasonal weather and ground conditions;

• | certain types of work that can only be performed during cold, winter conditions when the ground is frozen;

• | the timing of equipment maintenance and repairs;

• | claims and change-orders;

• | the accounting for unrealized non-cash gains and losses related to foreign exchange and derivative financial instruments; and

• | the level of borrowing under our Series 1 Debentures and credit facilities and the corresponding interest expense recorded against the outstanding balance of each.

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The table, below, summarizes our consolidated results for the preceding eight quarters:

| Three Months Ended
(dollars in millions, except per share amounts) | Dec 31, 2013 |  |  | Sep 30, 2013 |  |  | Jun 30, 2013 |  |  | Mar 31, 2013 |  |  | Dec 31, 2012 |  |  | Sep 30, 2012 |  |  | Jun 30, 2012 |  |  | Mar 31, 2012 |
Revenue | $ | 108.9 |  |  | $ | 116.2 |  |  | $ | 115.0 |  |  | $ | 130.3 |  |  | $ | 116.8 |  |  | $ | 123.5 |  |  | $ | 174.0 |  |  | $ | 181.1 |
Gross profit (loss) | 16.8 |  |  | 11.6 |  |  | 8.4 |  |  | 8.9 |  |  | 9.8 |  |  | 8.3 |  |  | 6.9 |  |  | (0.9 | )
Operating income (loss) | 5.6 |  |  | 0.6 |  |  | (2.3 | ) |  | (6.5 | ) |  | (1.7 | ) |  | (0.7 | ) |  | (7.1 | ) |  | (13.5 | )
Net loss from continuing operations | 5.5 |  |  | (8.7 | ) |  | (5.6 | ) |  | (9.2 | ) |  | (4.9 | ) |  | (5.0 | ) |  | (9.2 | ) |  | (13.4 | )
Net income (loss) from discontinued operations | — |  |  | 82.7 |  |  | (0.1 | ) |  | 4.6 |  |  | 9.5 |  |  | 8.8 |  |  | 4.0 |  |  | (3.5 | )
Net income (loss) | 5.5 |  |  | 74.1 |  |  | (5.7 | ) |  | (4.7 | ) |  | 4.6 |  |  | 3.7 |  |  | (5.1 | ) |  | (16.9 | )
Basic net income (loss) per share‡ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
From continuing operations | $ | 0.15 |  |  | $ | (0.24 | ) |  | $ | (0.16 | ) |  | $ | (0.26 | ) |  | $ | (0.13 | ) |  | $ | (0.14 | ) |  | $ | (0.25 | ) |  | $ | (0.37 | )
From discontinued operations | $ | — |  |  | $ | 2.28 |  |  | $ | — |  |  | $ | 0.13 |  |  | $ | 0.26 |  |  | $ | 0.24 |  |  | $ | 0.11 |  |  | $ | (0.10 | )
Total | $ | 0.15 |  |  | $ | 2.04 |  |  | $ | (0.16 | ) |  | $ | (0.13 | ) |  | $ | 0.13 |  |  | $ | 0.10 |  |  | $ | (0.14 | ) |  | $ | (0.47 | )
Diluted net income (loss) per share‡ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
From continuing operations | $ | 0.15 |  |  | $ | (0.24 | ) |  | $ | (0.16 | ) |  | $ | (0.26 | ) |  | $ | (0.13 | ) |  | $ | (0.14 | ) |  | $ | (0.25 | ) |  | $ | (0.37 | )
From discontinued operations | $ | — |  |  | $ | 2.26 |  |  | $ | — |  |  | $ | 0.13 |  |  | $ | 0.26 |  |  | $ | 0.24 |  |  | $ | 0.11 |  |  | $ | (0.10 | )
Total | $ | 0.15 |  |  | $ | 2.02 |  |  | $ | (0.16 | ) |  | $ | (0.13 | ) |  | $ | 0.13 |  |  | $ | 0.10 |  |  | $ | (0.14 | ) |  | $ | (0.47 | )

‡ | Net income (loss) per share for each quarter has been computed based on the weighted average number of shares issued and outstanding during the respective quarter; therefore, quarterly amounts may not add to the annual total. Per-share calculations are based on full dollar and share amounts.

We generally experience a decline in our mine site support revenue such as reclamation and muskeg removal services during the three months ended June 30 of each year due to seasonality, as weather conditions make performance of this heavy equipment intensive work in the oil sands difficult during this period. The mine support activity levels in the oil sands decline when frost leaves the ground and many secondary roads are rendered temporarily incapable of supporting the weight of heavy equipment. The duration of this period, which can vary considerably from year to year, is referred to as "spring breakup" and has a direct impact on our mine support activity levels. All other events being equal, mine support revenue during the December to March time period of each year is traditionally highest as ground conditions are most favourable in the oil sands.
Delays in the winter freeze, required to perform this type work or an abnormal thaw period during the winter months will reduce overall revenues in the winter period. It should be noted that extreme weather conditions during this period, where temperatures dip below minus 30 degrees Celsius, can have an adverse effect on revenue due to lower equipment performance and reliability. In each of the past two years we have experienced either a late winter freeze of an abnormal winter thaw causing results to deviate from the typical winter pattern. In addition, construction project delays have reduced demand for services typically provided during the three months ended March 31 in each of the past two years.
Overall, full-year results are not likely to be a direct multiple or combination of any one quarter or quarters. In addition to revenue variability, gross margins can be negatively impacted in less active periods because we are likely to incur higher maintenance and repair costs due to our equipment being available for servicing.
Profitability also varies from quarter-to-quarter as a result of claims and change-orders. While claims and change-orders are a normal aspect of the contracting business, they can cause variability in profit margin due to delayed recognition of revenues. For further explanation, see "Claims and Change Orders".
Variations in quarterly results can also be caused by changes in our operating leverage. During periods of higher activity, we have experienced improvements in operating margin. This reflects the impact of relatively fixed costs, such as G&A, being spread over higher revenue levels. If activity decreases, these same fixed costs are spread over lower revenue levels. Both net income and income per share are also subject to financial leverage as provided by fixed interest expense. Events during 2013, which include the reduction of our overhead support costs and the overall reduction of our debt, have changed the impact of these fixed costs as compared to previous years.
Expectation of Future Workload
We have estimated our remaining backlog (a non-GAAP measurement) on our Canadian Natural contract at the Horizon mine at $145.8 million at December 31, 2013, compared to $158.7 million at September 30, 2013, $251.6 million at December 31, 2012 and $484.7 million at December 31, 2011. The reduction in the value of the backlog on this contract from September 30, 2013 reflects work performed under the contract partially offset by additional work awarded under the contract. The customer executed change orders which reduced the scope of equipment related activity required under the amended contract which reduced the backlog on this contract from previous
2013 Management's Discussion and Analysis 20

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levels. Additionally, we have approximately $110.8 million of backlog remaining on contracts with other clients. We anticipate performing $202.1 million of our combined backlog within the next twelve months ending December 31, 2014.t
In addition to work with defined scope that forms part of our backlog, many of our contracts are performed under master services agreements with a range of services to be provided under cost-plus and time-and-material contracts where scope is not clearly defined. We work with our customers using cost-plus, time-and-materials, unit-price and lump-sum contracts. Some of our contracts have defined scope which may allow us to estimate future workload based on that defined scope. However the same estimated backlog is subject to future adjustments due to client delays, cancellations or reductions in outsourcing activities.
Given that work under Master Services Agreements ("MSAs") are not usually included in backlog, we believe that the backlog number should be looked at together with current MSAs in place to fully understand the potential for future work. The following are active MSAs and long-term contracts with oil sands clients at their mines in Fort McMurray:

• | Base Plant mine:

◦ | 4-year master services agreement covering mining services and construction

• | Millennium and Steep Bank mines:

◦ | 5-year master services agreement covering mining services and construction

• | Joslyn mine:

◦ | 2-year initial site development contract with significant earthworks still be awarded by client

• | Kearl mine:

◦ | 5-year master services agreement covering civil mine support services

• | Horizon mine:

◦ | 10-year overburden removal contract and master services agreement covering mining services and construction

The mix of work performed under these MSAs varies year-by-year.
For the three months and year ended December 31, 2013, the percentage of total revenue earned from time-and-material contracts performed under our MSAs, which would not have been included as backlog, was approximately 9.9% and 13.0% of total revenue earned, respectively, compared to 20.0% and 21.3% of total revenue earned for the respective three months and year ended December 31, 2012.
In general, we base our expectation of future workload on a combination of factors:

• | signed customer contracts with defined scope;

• | an estimation of work to be secured under master services agreements based on annual mine plans provided by our customers; and

• | an estimation of work to be secured through our bidding process based on annual mine plans and construction plans provided by our customers.

Our expectation of workload in the near-term future is consistent with total activity levels reported for the year ended December 31, 2013. We are actively bidding for work, both in the oil sands and outside the oil sands and we are working closely with our customers to identify how we can meet their heavy construction and mining needs as they develop their mine plans for the coming year.
Claims and Change Orders
Due to the complexity of the projects we undertake, changes often occur after work has commenced. These changes include but are not limited to:

• | changes in client requirements, specifications and design;

• | changes in materials and work schedules; and

• | changes in ground and weather conditions.

Contract change management processes require that we prepare and submit change orders to the client requesting approval of scope and/or price adjustments to the contract. Accounting guidelines require that we consider changes in cost estimates that have occurred up to the release of the financial statements and reflect the impact of these

t This paragraph contains forward-looking information. Please refer to "Forward-Looking Information, Assumptions and Risk Factors" for a discussion of the risks and uncertainties related to such information.
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changes in the financial statements.
Conversely, potential revenue associated with increases in cost estimates is not included in financial statements until an agreement is reached with a client or specific criteria for the recognition of revenue from claims and unapproved or un-priced change orders are met. This can, and often does, lead to costs being recognized in one period and revenue being recognized in subsequent periods.
Occasionally, disagreements arise regarding changes, their nature, measurement, timing and other characteristics that impact costs and revenue under the contract. If a change becomes a point of dispute between our customer and us, we then consider it to be a claim. Historical claim recoveries should not be considered indicative of future claim recoveries.
For the three months and year ended December 31, 2013, we had approximately $1.0 million and $17.1 million, respectively, in claims revenue recognized to the extent of costs incurred. As at December 31, 2013, we had $13.1 million of unresolved claims and change orders recorded on our balance sheet. This compares to $22.8 million of unresolved claims and change-orders recorded on our balance sheet for the year ended December 31, 2012. We are working with our customers in accordance with the terms of our contracts to come to a resolution on additional amounts, if any, to be paid to us with respect to these additional costs.
Contingent Proceeds
On July 12, 2013 we sold our Canadian based Piling related assets and liabilities and our US based Cyntech US Inc. legal entity to the Keller Group. As part of the sale we may receive up to $92.5 million in additional proceeds, contingent on the Purchaser achieving prescribed profitability thresholds from the assets and liabilities sold.t
The first part of the contingent proceeds of up to $57.5 million may be earned over the next two years based upon the Purchaser achieving annual results ranging between $30.0 million and $45.0 million in Piling Business EBITDA as follows:

• | A maximum of $30.0 million cash paid no later than September 30, 2014, with the full amount being paid in the event that the business earns annualized Piling Business EBITDA (“First Year Piling Business EBITDA”) of $45.0 million or more in the period from closing to June 30, 2014. The amount payable will be $2 for every $1 that First Year Piling Business EBITDA is greater than $30.0 million (with the maximum payment of $30.0 million where First Year Piling Business EBITDA is $45.0 million or greater).

• | A maximum of $27.5 million cash paid no later than September 30, 2015, with the full amount being paid in the event that the business earns Piling Business EBITDA (“Second Year Piling Business EBITDA”) of $45.0 million or more in the period from July 1, 2014 to June 30, 2015. The amount payable will be $1.833 for every $1 that Second Year Piling Business EBITDA is greater than $30.0 million (with the maximum payment of $27.5 million where Second Year Piling Business EBITDA is $45.0 million or greater).

The remaining contingent proceeds of up to $35.0 million, equal to $0.5 for every $1 by which cumulative Piling Business EBITDA in the period from closing to June 30, 2016 exceeds $135.0 million (with the maximum payment of $35.0 million where Piling Business EBITDA is $205.0 million or greater), will be calculated and paid as follows:

a. | no later than September 30, 2014, the Purchaser will pay an amount equal to $0.375 for every $1 by which First Year Piling Business EBITDA exceeds $45.0 million;

b. | no later than September 30, 2015, the Purchaser will pay an amount equal to $0.375 for every $1 by which the aggregate of First Year Piling Business EBITDA and Second Year Piling Business EBITDA exceeds $90.0 million, less any monies paid to the vendor under (a) above; and

c. | no later than September 30, 2016, the Purchaser will pay an amount equal to $0.5 for every $1 by which the aggregate of First Year Piling Business EBITDA, Second Year Piling Business EBITDA and Piling Business EBITDA for the period from July 1, 2015 to June 30, 2016 exceeds $135.0 million, less any monies paid to the vendor under (a) and (b) above.

The $45.0 million annual Piling Business EBITDA target is comparable to our Consolidated EBITDA level for the year ended March 31, 2013 for the Piling business. The cumulative two year $90.0 million Piling Business EBITDA target and the cumulative three year $135.0 million Piling Business EBITDA target are multiples of such annual Piling Business EBITDA target. We anticipate that the Purchaser will continue to grow the Piling business, resulting in the payment of some or all of these contingent proceeds.t

t This paragraph contains forward-looking information. Please refer to "Forward-Looking Information, Assumptions and Risk Factors" for a discussion of the risks and uncertainties related to such information.
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These contingent proceeds will be recognized as the Piling Business EBITDA targets are achieved. We have retained the right to verify the Piling Business EBITDA reported by the Purchaser during the period for which the contingent proceeds are being calculated.
E. OUTLOOK
We continue to see delays in oil sands project related spending as our clients evaluate their investment strategies and continue with their cost control efforts. Near horizon demand for our services in the oil sands markets remains challenging and overall activity levels may reflect this environment, however due to our recent balance sheet restructuring efforts and continuing efforts to improve our cost structure, we believe we are well positioned to respond to changing market conditions.t
With the completion of the sale of our Piling business on July 12, 2013 and our use of over $175.0 million of the net proceeds to repay the balance of our Term Facility and approximately two thirds of our Series 1 Debentures, we have significantly reduced our overall debt and the associated consumption of cash for interest payments. With the fleet rationalization, performance improvement and restructuring initiatives we have implemented, we are realizing improvements to both profitability and cash flow.
Operations support services revenue are expected to continue to benefit from the ramp up of activity at the Kearl mine under our new five year master services agreement, although slower than first expected and we anticipate comparable activity levels supporting production efforts at the Horizon, Base Plant, Millennium, and Steepbank mines and site development efforts at the Joslyn mine. We welcomed the positive site development decision for the Fort Hills mine and we will strive to enhance our strong working relationship with that client. Construction services activity levels are more difficult to predict; however, we are continuing to pursue heavy civil construction contracts in the oil sands, to support both mining and SAGD projects. In addition, we are pursuing contracts with other major resource companies in Canada and major provincial infrastructure projects.t
While our near term outlook remains cautious we have been encouraged by an uptick in bidding activity since the start of the new year, both on existing mines and the new Fort Hills mine. We have already replaced most of our non-recurring revenue from 2013 and hope to build upon that momentum over the coming months. Of note we recently won an Alberta Transportation road building project for approximately $16.0 million and this marks our first success at revenue diversification. As always we will continue to manage our resources and costs with a focus towards maintaining profitability and improving shareholder value.
F. LEGAL AND LABOUR MATTERS
Laws and Regulations and Environmental Matters
Many aspects of our operations are subject to various federal, provincial and local laws and regulations, including, among others:
• permit and licensing requirements applicable to contractors in their respective trades;
• building and similar codes and zoning ordinances; and
• laws and regulations relating to worker safety and protection of human health.
We believe that we have all material required permits and licenses to conduct our operations and are in substantial compliance with applicable regulatory requirements relating to our operations. Our failure to comply with the applicable regulations could result in substantial fines or revocation of our operating permits.
For a complete discussion of our laws and regulations and environmental matters, see the "Legal and Labour Matters - Laws and Regulations and Environmental Matters" section of our Annual Information Form ("AIF"), which section is expressly incorporated by reference into this MD&A.
Legal Proceedings and Regulatory Actions
From time to time, we are a party to litigation and legal proceedings that we consider to be a part of the ordinary course of business. While no assurance can be given, we believe that, taking into account reserves and insurance coverage, none of the litigation or legal proceedings in which we are currently involved or know to be contemplated could reasonably be or could likely be considered important to a reasonable investor in making an investment decision, expected to have a material adverse effect on our business, financial condition or results of operations.

t This paragraph contains forward-looking information. Please refer to "Forward-Looking Information, Assumptions and Risk Factors" for a discussion of the risks and uncertainties related to such information.
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We may, however, become involved in material legal proceedings in the future that could have such a material adverse effect.
Employees and Labour Relations
As at December 31, 2013, we had approximately 250 salaried employees and approximately 975 hourly employees in our operations. Our hourly workforce fluctuates according to the seasonality of our business and the staging and timing of projects by our customers. The hourly workforce for our ongoing operations typically ranges in size from 1,000 employees to approximately 1,400 employees depending on the time of year and duration of awarded projects. We also utilize the services of subcontractors in our business. Subcontractors perform an estimated 7% to 10% of the work we undertake. As at December 31, 2013, approximately 800 employees are members of various unions and work under collective bargaining agreements.
The majority of our work in our ongoing operations is carried out by employees governed by our mining overburden collective bargaining agreement with the International Union of Operating Engineers (IUOE) Local 955, the primary term of which expires on March 31, 2015. Other collective agreements in effect include the provincial collective agreement between the Operating Engineers in Alberta and the Alberta Roadbuilders and Heavy Construction Association (ARBHCA) which expires February 28, 2015.
We believe that our relationships with all our employees, both union and non-union, are strong. We have not experienced a strike or lockout.
G. RESOURCES AND SYSTEMS
Liquidity
Liquidity requirements
Our primary uses of cash are for plant, equipment and intangible asset purchases, to fulfill debt repayment and interest payment obligations, to fund operating and capital lease obligations and to finance working capital requirements.
Sources of liquidity
Our principal sources of cash are funds from operations and borrowings under our credit facility. As at December 31, 2013, our cash balance of $13.7 million was $12.6 million higher than our cash balance at December 31, 2012. We supplemented our cash requirements and letters of credit requirements during the year ended December 31, 2013 through drawings from the Revolving Facility drawn against our previous credit agreement and the $85.0 million Revolving Facility against our 5th amended and restated credit agreement. A more detailed discussion on the Revolving Facility can be found in "Credit facilities", below.
We anticipate that we will likely have enough cash from operations to fund our annual expenses and capital additions. In the event that we require additional funding, we believe that any such funding requirements could be satisfied by the funds available from our Revolving Facility.t
Summary of Consolidated Financial Position

(dollars in thousands) | Dec 31, 2013 |  |  | Mar 31, 2013 |  |  | Dec 31, 2012 |  |  | Dec 31, 2011 |
Cash | $ | 13,742 |  |  | $ | 598 |  |  | $ | 1,164 |  |  | $ | 1,797 |
Current assets (excluding cash) | 114,134 |  |  | 356,059 |  |  | 252,716 |  |  | 320,359 |
Current liabilities | (93,482 | ) |  | (191,202 | ) |  | (184,183 | ) |  | (233,831 | )
Net working capital | $ | 34,394 |  |  | $ | 165,455 |  |  | $ | 69,697 |  |  | $ | 88,325 |
Intangible assets | 7,043 |  |  | 8,625 |  |  | 12,063 |  |  | 13,984 |
Property, plant and equipment | 277,975 |  |  | 274,246 |  |  | 332,252 |  |  | 326,741 |
Total assets | 445,641 |  |  | 659,938 |  |  | 693,357 |  |  | 759,761 |
Capital lease obligations (including current portion) | (43,295 | ) |  | (41,822 | ) |  | (49,547 | ) |  | (5,013 | )
Total long term financial liabilities ‡ | (109,635 | ) |  | (299,786 | ) |  | (317,746 | ) |  | (335,354 | )

‡ | Total long-term financial liabilities exclude the current portions of capital lease obligations, current portions of derivative financial instruments, long-term lease inducements, asset retirement obligations and both current and non-current deferred income tax balances.

t This paragraph contains forward-looking information. Please refer to "Forward-Looking Information, Assumptions and Risk Factors" for a discussion of the risks and uncertainties related to such information.
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Included in the numbers above are the following amounts related to discontinued piling and pipeline operations:

(dollars in thousands) | Dec 31, 2013 |  |  | Mar 31, 2013 |  |  | Dec 31, 2012 |  |  | Dec 31, 2011 |
Current assets (excluding cash) | $ | — |  |  | $ | 154,740 |  |  | $ | 76,458 |  |  | $ | 113,336 |
Current liabilities | — |  |  | (38,846 | ) |  | (36,029 | ) |  | (79,098 | )
Net working capital | $ | — |  |  | $ | 115,894 |  |  | $ | 40,429 |  |  | $ | 34,238 |
Intangible assets | — |  |  | — |  |  | 4,730 |  |  | 6,129 |
Property, plant and equipment | — |  |  | — |  |  | 54,040 |  |  | 52,496 |
Total assets | — |  |  | 154,740 |  |  | 167,553 |  |  | 204,286 |
Capital lease obligations (including current portion) | — |  |  | — |  |  | (5,928 | ) |  | (362 | )
Total long term financial liabilities ‡ | — |  |  | — |  |  | (4,636 | ) |  | (205 | )

Working capital fluctuations effect on liquidity
As at December 31, 2013, we had $5.1 million in trade receivables that were more than 30 days past due, down from $31.6 million as at December 31, 2012 and $20.2 million as at December 31, 2011. We have currently provided an allowance for doubtful accounts related to our trade receivables of $nil ($0.2 million at December 31, 2012 and $0.2 million at December 31, 2011). We continue to monitor the credit worthiness of our customers. To date our exposure to potential write downs in trade receivables had been limited to the financial condition of developers of condominiums and high-rise developments in our discontinued piling business.
As of December 31, 2013, an amount of $14.4 million ($16.7 million at December 31, 2012 and $73.5 million at December 31, 2011) is recognized within unbilled revenue relating to the Canadian Natural contract, whereby the normal operating cycle for this project is greater than one year. The unbilled balance will be invoiced to Canadian Natural over the life of the amended contract. The customer maintains the right to accelerate the purchase of contract-related assets and if such right is exercised, the unbilled amount related to the equipment purchased becomes due in full at such time.
Contract change management processes often lead to a timing difference between project disbursements and our ability to invoice our customers for executed change orders. Until the time of invoice, revenue for unexecuted change orders is recorded only to the extent of costs incurred within unbilled revenue. As of December 31, 2013, we had $13.1 million of unresolved claims and change orders recorded on our balance sheet. This compares to $22.8 million and $21.5 million for the years ended December 31, 2012 and 2011, respectively. For a more detailed discussion on claims revenue refer to "Claims and Change Orders".
The variability of our business through the year due to the timing of construction project awards or the execution of work that can only be performed during winter months can result in an increase in our working capital requirements from higher accounts receivable and unbilled revenue balances at the start of such projects.
Our working capital is also significantly affected by the timing of the completion of projects and the contractual terms of the project. In some cases, our customers are permitted to withhold payment of a percentage of the amount owing to us for a stipulated period of time (such percentage and time period is usually defined by the contract and in some cases provincial legislation). This amount acts as a form of security for our customers and is referred to as a "holdback". Typically, we are only entitled to collect payment on holdbacks if substantial completion of the contract has been performed, there are no outstanding claims by subcontractors or others related to work performed by us and we have met the period specified by the contract (usually 45 days after completion of the work). However, in some cases, we are able to negotiate the progressive release of holdbacks as the job reaches various stages of completion.
As at December 31, 2013, holdbacks totaled $9.1 million, down from $33.4 million as at December 31, 2012 and down from $27.9 million as at December 31, 2011, respectively. Holdbacks represent 13% of our total accounts receivable as at December 31, 2013 (22% and 19% as at December 31, 2012 and 2011, respectively). The current year decrease in holdbacks represents a decrease in construction services projects and the timing of substantial completion.
Plant, Equipment and Intangible Asset Purchases
We maintain a significant equipment and vehicle fleet comprised of units with remaining useful lives covering a variety of time spans. It is important for us to have an effective maintenance program to support our large revenue producing fleet in order to avoid equipment downtime, which can affect our revenue stream and inhibit our project profits.
As part of our maintenance program for our larger sized equipment, it is often cost effective to replace major components of the equipment, such as engines, drive trains and under carriages to extend the useful life of the
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equipment. The cost of these major equipment overhauls are recorded as capital expenditures and depreciated over the life of the replacement component. We refer to this type of equipment as "multi-life component" equipment. Once it is no longer cost effective to replace a major component to extend the useful life of a multi-life component piece of equipment, the equipment is replaced.
For the balance of our heavy and light equipment fleet, it is not cost effective to replace individual components, thus once these units reach the end of their useful lives, they are replaced. We refer to this type of equipment as "single-life component" equipment.
In addition, we may acquire new equipment to support our growth as we take on new projects. This includes the addition of revenue producing fleet and site infrastructure assets to support the maintenance activities of the fleet.
We require between $15.0 million to $25.0 million, annually, for capitalized maintenance that extends the useful life of our existing equipment fleet and an additional $10.0 million to $15.0 million (net of proceeds from disposals) to replace equipment that has reached the end of its useful life.
We believe that our current fleet size and mix is in alignment with the current and near-term growth expectations of equipment demands from the commitment to Canadian oil sands development by the oil sands producers. We have continued to assess and adjust the size and mix of our fleet and we have assessed our growth capital needs for the coming year as we monitor the progress of start-up delays on oil sands development projects. Our estimate of our capital needs (net of proceeds from disposal) for the next year is approximately $30.0 million to $40.0 million, primarily related to capital maintenance and equipment replacement capital requirements. We believe our cash flow from operations and net proceeds from the sale of under-utilized equipment will be sufficient to meet these requirements.t
A summary of cash changes to plant, equipment and intangible assets by nature and by period is shown in the table below:

| Three months ended December 31, |  | Year ended December 31,
(dollars in thousands) | 2013 |  |  | 2012 |  |  | 2013 |  |  | 2012 |  |  | 2011 |
New PP&E - capital expenditures |  |  |  |  |  |  |  |  |
Sustaining | $ | 11,058 |  |  | $ | 8,154 |  |  | $ | 32,576 |  |  | $ | 26,648 |  |  | $ | 13,777 |
Growth | 186 |  |  | 705 |  |  | 3,249 |  |  | 11,588 |  |  | 13,922 |
Subtotal | $ | 11,244 |  |  | $ | 8,859 |  |  | $ | 35,825 |  |  | $ | 38,236 |  |  | $ | 27,699 |
New intangible assets - capital expenditures |  |  |  |  |  |  |  |  |
Sustaining | $ | 455 |  |  | $ | 563 |  |  | $ | 1,770 |  |  | $ | 1,715 |  |  | $ | 1,083 |
Growth | 68 |  |  | 567 |  |  | 1,056 |  |  | 2,590 |  |  | 3,196 |
Subtotal | $ | 523 |  |  | $ | 1,130 |  |  | $ | 2,826 |  |  | $ | 4,305 |  |  | $ | 4,279 |
Total new additions to capital assets | 11,767 |  |  | 9,989 |  |  | 38,651 |  |  | 42,541 |  |  | 31,978 |
Items affecting cash additions to capital assets: |  |  |  |  |  |  |  |  |
Equipment buyouts | $ | — |  |  | $ | 406 |  |  | $ | — |  |  | $ | 13,653 |  |  | $ | — |
Change in non-cash working capital | (5,491 | ) |  | (312 | ) |  | (4,474 | ) |  | 2,198 |  |  | 2,814 |
Cash outflow on additions to PP&E and intangible assets | $ | 6,276 |  |  | $ | 10,083 |  |  | $ | 34,177 |  |  | $ | 58,392 |  |  | $ | 34,792 |
Capital asset disposal |  |  |  |  |  |  |  |  |
Proceeds on disposal of PP&E and assets held for sale | $ | 1,487 |  |  | $ | 1,914 |  |  | $ | 7,084 |  |  | $ | 10,743 |  |  | $ | 1,198 |
Net decrease in cash related to capital assets | $ | 4,789 |  |  | $ | 8,169 |  |  | $ | 27,093 |  |  | $ | 47,649 |  |  | $ | 33,594 |

Our growth PP&E capital expenditures in 2013 were primarily related to the establishment of a maintenance facility at the Kearl mine site to support our new civil mine support MSA work at that site.
Equipment lease buyout activity in the current periods only includes the buyout of equipment leases that we have capitalized in PP&E. We consider the lease buyout activity to be a change in financing, not an addition to our equipment fleet, as we would have previously reported the addition to our equipment fleet under non-cash additions.
Proceeds on the disposal of PP&E for the periods presented only includes proceeds specific to the assets we owned.
In order to maintain a balance of owned and leased equipment, we have financed a portion of our heavy construction fleet through capital and operating leases and we continue to lease our motor vehicle fleet through our capital lease facilities. In addition, we develop or acquire our intangible assets through capital expenditures.

t This paragraph contains forward-looking information. Please refer to "Forward-Looking Information, Assumptions and Risk Factors" for a discussion of the risks and uncertainties related to such information.
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Our equipment fleet value is currently split among owned (73%), leased (25%) and rented equipment (2%). Approximately 83% of our leased fleet value is specific to the Canadian Natural contract. Our equipment ownership strategy allows us to meet our customers' variable service requirements while balancing the need to maximize equipment utilization with the need to achieve the lowest ownership costs.
Credit Facility
On October 9, 2013 we signed a three year Fifth Amended and Restated Credit Agreement ("the credit facility") with our existing banking syndicate, replacing the Fourth Amended and Restated Credit Agreement ("the previous credit facility") and its five amending agreements. The credit facility provides for a 1.5% lower interest rate and increased borrowing flexibility than the previous facility by securing the credit facility through a combination of working capital and equipment. Highlights of the facility include:

• | Borrowing of up to $85.0 million under a Revolving Facility, broken into two tranches:

• | Tranche A that will support up to $60.0 million of borrowing in both cash and letters of credit.

• | Tranche B that will allow up to $25.0 million of borrowing in letters of credit.

• | The use of a borrowing base determined by the value of receivables and equipment which reduces our financial covenants to:

◦ | A Senior Leverage Ratio, which is to be maintained at less than 2.00 to 1.00.

▪ | The Senior Leverage Ratio is a ratio of Senior Debt (not including the 9.125% Series 1 Unsecured Debentures) to a trailing 12-months Consolidated EBITDA.

◦ | A Fixed Charge Cover Ratio, which by December 31, 2013 must be maintained at greater than 1.20 to 1.00

▪ | The Fixed Charge Cover Ratio is the ratio of Consolidated EBITDA (less current income taxes actually paid) to Consolidated Fixed Charges.

▪ | The Consolidated Fixed Charges is defined as cash interest (not including interest on the $150.0 million of debentures repurchased and redeemed or any interest on our previously outstanding Term Facilities), scheduled repayment of debt (not including the principal component of our previously outstanding Term Facilities), net capital expenditures (except to the extent financed by available cash, capital leases, loans under our credit facility of up to $15.0 million per year, or new share issuances) and any dividend payments or stock repurchases (except to the extent financed by available cash or a new share issuance).

▪ | The Fixed Charge Cover Ratio replaces the Current Ratio and Interest Coverage Ratio.

Borrowing activity under the Revolving Facility
As of December 31, 2013 there were no outstanding borrowings under the $60.0 million Tranche A of the Revolving Facility and there were $3.1 million of issued and undrawn letters of credit under the $25.0 million Tranche B of the Revolving Facility. There were outstanding borrowings of $35.0 million and $38.0 million, as of December 31, 2012 and 2011, respectively, under the Revolving Facility drawn against the 4th amended and restated credit agreement along with $3.1 million and $22.0 million issued and undrawn letters of credit recorded against the same previous Revolving Facility.
As at December 31, 2013, our unused borrowing availability under the Revolving Facility was $60.0 million ($46.9 million at December 31, 2012).

i. | Cash drawn under Tranche A of the revolving facility: At December 31, 2013, we did not have any borrowings outstanding on Tranche A of our Revolving Facility. We had $35.0 million in borrowings outstanding at December 31, 2012 under the Revolving Facility drawn against our previous credit facility. We did not use the Revolving Facility during the three months ended December 31, 2013. The average amount of our borrowing on the Revolving Facility drawn on our previous credit facility for the three months ended December 31, 2012 was $47.2 million at an average interest rate of 8%.

During the year ended December 31, 2013, we used our Revolving Facility drawn against the previous credit facility to finance our working capital requirements. The average amount of our borrowing on the Revolving Facility was $22.7 million with a weighted average interest rate of 7.9% ($44.3 million and $32.7 million, respectively, for the years ended December 31, 2012 and 2011, at an average rate of 7.7% and
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6.32%, respectively). The maximum end of month balance for any single month during the year ended December 31, 2013 was $65.0 million.
The average amount of our borrowing on the Revolving Facility is calculated based on the weighted average of the outstanding balances in the three months and year periods, respectively.

ii. | Letters of credit drawn under the revolving facility: As of December 31, 2013, we had issued $3.1 million ($3.1 million at December 31, 2012 and $22.0 million at December 31, 2011) in letters of credit under the Revolving Facility to support performance guarantees associated with customer contracts. One of our major long-term contracts allows the customer to require that we provide up to $15.0 million in letters of credit. As at December 31, 2013, we had no letters of credit outstanding in connection with this contract. This customer must provide a 60-day prior written notice to request any change in their letter of credit requirements.

Contractual Obligations and Other Commitments
Our principal contractual obligations relate to our long-term debt, capital and operating leases and supplier contracts. The following table summarizes our future contractual obligations, excluding interest payments, unless otherwise noted, as of December 31, 2013 for our ongoing operations.

| Payments due by fiscal year |
(dollars in thousands) | Total |  |  | 2014 |  |  | 2015 |  |  | 2016 |  |  | 2017 |  |  | 2018 and thereafter |
Series 1 Debentures | $ | 75,000 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 75,000 |  |  | $ | — |
Capital leases (including interest) | 47,401 |  |  | 17,249 |  |  | 16,176 |  |  | 11,735 |  |  | 2,241 |  |  | — |
Equipment and building operating leases | 58,143 |  |  | 19,468 |  |  | 8,161 |  |  | 4,643 |  |  | 4,465 |  |  | 21,406 |
Supplier contracts | 3,709 |  |  | 3,709 |  |  | — |  |  | — |  |  | — |  |  | — |
Total contractual obligations | $ | 184,253 |  |  | $ | 40,426 |  |  | $ | 24,337 |  |  | $ | 16,378 |  |  | $ | 81,706 |  |  | $ | 21,406 |

The buyout of the operating leases related to the sale of contract-related assets to Canadian Natural, discussed under the "Significant Business Event - Debt and Equity Restructuring" section of this MD&A did not reduce the future contractual obligations reported under "Equipment and building operating leases" in this table as the contract-related operating leases are scheduled to be bought out at the expiry of their lease terms.
For a discussion on term facilities and revolving facility see "Liquidity - Credit facilities", above and for a discussion on Series 1 Debentures see "Securities, Rights Plans and Agreements - 9.125% Series 1 Debentures", below.
Off-balance sheet arrangements
We have no off-balance sheet arrangements at this time.
Securities and Agreements
Capital structure
We are authorized to issue an unlimited number of voting common shares and an unlimited number of non-voting common shares.
On December 19, 2013 we completed the purchase and subsequent cancellation of 1.8 million voting common shares, in the normal course, in the United States primarily through the facilities of the New York Stock Exchange, using monetized claims from our recent business divestments (the "Purchase Program"). The common voting shares purchased under the Purchase Program represented approximately 5% of our issued and outstanding voting common shares, leaving a balance of 34,715,236 shares outstanding as of December 19, 2013.
All purchases of shares in the United States were made in compliance with Rule 10b-18, under the US Securities Exchange Act of 1934, whereby the safe harbor conditions limited the number of shares that could be purchased per day to a maximum of 25% of the average daily trading volume for the four calendar weeks preceding the date of purchase, with certain exceptions permitted for block trading. The price per share, for all but the block trades, was based on the market price of such shares at the time of purchase, in accordance with regulatory requirements.
As at February 14, 2014, there were 34,792,036 voting common shares outstanding (34,746,236 at December 31, 2013). We had no non-voting common shares outstanding on any of the foregoing dates.
For a more detailed discussion of our share data, see "Description of Securities and Agreements - Capital Structure" in our most recent AIF, which section is expressly incorporated by reference into this MD&A.
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9.125% Series 1 Debentures
On April 7, 2010, we closed a private placement of 9.125% Series 1 Senior Unsecured Debentures Due 2017(the "Series 1 Debentures") for gross proceeds of $225.0 million.
As discussed in "Significant Business Events - Partial Purchase / Redemption of 9.125% Series 1 Senior Unsecured Debentures Due 2017", in August 2013, we purchased $8.1 million of the aggregate principal under the Net Proceeds Offer and redeemed $141.9 million of aggregate principal from the partial proceeds of the Piling sale. These two transactions left a $75.0 million balance outstanding on our Series 1 Debentures.
The Series 1 Debentures are rated B- by Standard & Poor's (see "Debt Ratings").
For a more detailed discussion of our 9.125% Series 1 Debentures, the Net Proceeds Offer and the redemption, see "Description of Securities and Agreements - 9.125% Series 1 Debentures" in our most recent AIF, which section is expressly incorporated by reference into this MD&A.
Debt Ratings
On May 31, 2013, Standard and Poor's Ratings Services ("S&P")7 reaffirmed its previous ratings of our long-term corporate credit at 'B-' and the senior unsecured debt rating at 'B-'. S&P upgraded its outlook on the corporate rating to 'stable' and reaffirmed the recovery rating on our Series 1 Debentures at '4'.
For a discussion of our debt ratings, see the “Debt Ratings” section of our annual AIF, which section is expressly incorporated by reference in this MD&A.
Related Parties
Advisory Agreements
From the time of our initial public offering in November of 2006 to June 26, 2013, Perry Partners, L.P. and Perry Partners International, Inc. (together, “Perry”) was our Sponsor. As a Sponsor, Perry had an Advisory Services Agreement with us under which Perry was entitled to receive reports, financial data and other information and we were entitled to receive consulting services relating to our operations, affairs and finances. No fee was charged by Perry for such consulting and advisory services. On June 26, 2013, we entered into an agreement with Perry terminating Perry's Advisory Services Agreement.
We may terminate a significant shareholder's letter agreement in certain circumstances. All the foregoing rights are subject to customary confidentiality requirements and subject to security clearance requirements imposed by applicable government authorities.
Internal Systems and Processes
Evaluation of disclosure controls and procedures
Our disclosure controls and procedures are designed to provide reasonable assurance that information we are required to disclose is recorded, processed, summarized and reported within the time periods specified under Canadian and US securities laws. They include controls and procedures designed to ensure that information is accumulated and communicated to management, including the President and Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding required disclosures.
An evaluation was carried out under the supervision of and with the participation of management, including the President and Chief Executive Officer and the Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) under the US Securities Exchange Act of 1934, as amended, and in National Instrument 52-109 under the Canadian Securities Administrators Rules and Policies. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of December 31, 2013 such disclosure controls and procedures were effective.
Management's report on internal control over financial reporting
Internal control over financial reporting is a process designed to provide reasonable, but not absolute, assurance regarding the reliability of financial reporting and of the preparation of financial statements for external purposes in accordance with US GAAP. Management, including the President and Chief Executive Officer and Chief Financial Officer, are responsible for establishing and maintaining adequate internal control over financial reporting (ICFR), as such term is defined in Rule 13a -15(f) under the US Securities Exchange Act of 1934, as amended; and in National

7 Standard and Poor's Ratings Services (S&P), a division of The McGraw-Hill Companies, Inc.
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Instrument 52-109 under the Canadian Securities Administrators Rules and Policies. A material weakness in ICFR exists if the deficiency is such that there is reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis.
Because of its inherent limitations, ICFR may not prevent or detect misstatements. Also, projections or any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
As of December 31, 2013, we applied the criteria set forth in the 1992 Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) to assess the effectiveness of our ICFR. Based on this assessment, management has concluded that, as of December 31, 2013, our internal control over financial reporting is effective. Our independent auditor, KPMG LLP, has issued an audit report stating that we, as at December 31, 2013, maintained, in all material respects, effective internal control over financial reporting based on the criteria established in the 1992 Internal Control-Integrated Framework issued by the COSO.
Material changes to internal controls over financial reporting
There have been no material changes to internal controls over financial reporting during the year ended December 31, 2013.
Critical Accounting Estimates
The preparation of financial statements in conformity with US GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting period.
Significant estimates made by us include:

• | Assessment of the percentage of completion on time-and-materials, unit-price and lump-sum contracts (including estimated total costs and provisions for estimated losses) and the recognition of claims and change orders on revenue contracts;

• | Assumptions used to value free standing and embedded derivatives and other financial instruments;

• | Assumptions used in periodic impairment testing; and

• | Estimates and assumptions used in the determination of the allowance for doubtful accounts, the recoverability of deferred tax assets and the useful lives of property, plant and equipment and intangible assets.

Actual results could differ materially from those estimates.
The accuracy of our revenue and profit recognition in a given period is dependent, in part, on the accuracy of our estimates of the cost to complete each time-and-materials, unit-price, and lump-sum project. Major changes in cost estimates can have a significant effect on profitability.
The complex judgments and estimates most critical to an investor's understanding of our financial results and condition are contained within our significant accounting policies, including ours. Below is a listing of our significant accounting policies in which we define how we apply these critical accounting estimates:

• | Revenue recognition policy

• | Property, plant and equipment policy

• | Allowance for doubtful accounts receivable policy

• | Goodwill impairment policy

• | Financial instruments policy

• | Foreign currency translation policy

• | Discontinued operations

For a complete discussion of how we apply these critical accounting estimates in our significant accounting policies adopted, see the "Significant accounting policies" section of our Consolidated Financial Statements for year ended December 31, 2013 and notes that follow, which sections are expressly incorporated by reference into this MD&A.
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Accounting Pronouncements
Recently adopted

• | Offsetting Assets and Liabilities

◦ | We adopted this Accounting Standards Update (“ASU”) effective commencing January 1, 2013. The adoption of this standard did not have a material impact on the Company's consolidated financial statements.

• | Intangibles - Goodwill and other

◦ | We adopted this ASU effective April 1, 2012. The adoption of this standard did not have a material effect on our consolidated financial statements.

• | Comprehensive income

◦ | We adopted this ASU effective April 1, 2012. The adoption of this standard did not have a material effect on our consolidated financial statements.t

Not Yet Adopted

• | Income taxes

◦ | This ASU will be effective commencing January 1, 2014. The adoption of this standard is not expected to have a material impact on our consolidated financial statements.

For a complete discussion of accounting pronouncements recently adopted and accounting pronouncements not yet adopted, see the "Accounting pronouncements recently adopted" and "Recent accounting pronouncements not yet adopted" sections of our Consolidated Financial Statements for the year ended December 31, 2013 and notes that follow, which sections are expressly incorporated by reference into this MD&A.
H. FORWARD-LOOKING INFORMATION, ASSUMPTIONS AND RISK FACTORS
Forward-Looking Information
This document contains forward-looking information that is based on expectations and estimates as of the date of this document. Our forward-looking information is information that is subject to known and unknown risks and other factors that may cause future actions, conditions or events to differ materially from the anticipated actions, conditions or events expressed or implied by such forward-looking information. Forward-looking information is information that does not relate strictly to historical or current facts and can be identified by the use of the future tense or other forward-looking words such as 'believe", "expect", "anticipate", "intend", "plan", "estimate", "should", "may", "could", "would", "target", "objective", "projection", "forecast", "continue", "strategy", "intend", "position" or the negative of those terms or other variations of them or comparable terminology.
Examples of such forward-looking information in this document include, but are not limited to, statements with respect to the following, each of which is subject to significant risks, uncertainties and assumptions is based on a number of assumptions that may prove to be incorrect:

1. | The expectation that we may receive up to $92.5 million in additional proceeds over the next three years in connection with the Piling sale, contingent on the Purchaser achieving prescribed profitability thresholds from the assets and liabilities sold.

2. | The anticipation that the Purchaser will continue to grow the piling business, resulting in the payment of some or all of the contingent proceeds.

3. | The expectation that the partial Series 1 Debentures retirement will reduce annual interest cost by approximately $13.7 million for the Series 1 Debentures to $6.8 million.

4. | We have estimated our remaining backlog on our Canadian Natural contract at the Horizon mine at $145.8 million at December 31, 2013.

5. | The expectation of performing $202.1 million of our combined backlog within the next twelve months ending December 31, 2014.

t This paragraph contains forward-looking information. Please refer to "Forward-Looking Information, Assumptions and Risk Factors" for a discussion of the risks and uncertainties related to such information.
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6. | The expectation that operations support services revenue will continue to benefit from the ramp up of activity at the Kearl mine under our new five year master services agreement and the expectation of comparable activity levels supporting production efforts at the Horizon, Base Plant , Millennium, and Steepbank mines and site development efforts at the Joslyn mine.

7. | Our belief that we are well positioned to respond to changing market conditions, while maintaining profitability levels.

8. | Our belief that we will likely have enough cash from operations to fund our annual expenses and capital additions. In the event that we require additional funding, we believe that any such funding requirements could be satisfied by the funds available from our Revolving Facility.

9. | Our belief that cash flow from operations and net proceeds from the sale of under-utilized equipment will be sufficient to meet our requirements for capital expenditure.

10. | Our belief that accounting pronouncements recently adopted or yet to be adopted, as discussed herein, will not have a material impact on our consolidated financial statements.

While we anticipate that subsequent events and developments may cause our views to change, we do not have an intention to update this forward-looking information, except as required by applicable securities laws. This forward-looking information represents our views as of the date of this document and such information should not be relied upon as representing our views as of any date subsequent to the date of this document. We have attempted to identify important factors that could cause actual results, performance or achievements to vary from those current expectations or estimates expressed or implied by the forward-looking information. However, there may be other factors that cause results, performance or achievements not to be as expected or estimated and that could cause actual results, performance or achievements to differ materially from current expectations. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those expected or estimated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. These factors are not intended to represent a complete list of the factors that could affect us. See "Assumptions", "Risk Factors" and "Quantitative and Qualitative Disclosure about Market Risk", below and risk factors highlighted in materials filed with the securities regulatory authorities filed in the United States and Canada from time to time, including, but not limited to, risk factors that appear in the "Forward-Looking Information, Assumptions and Risk Factors" section of our most recent AIF, which section is expressly incorporated by reference in this MD&A.
Assumptions
The material factors or assumptions used to develop the above forward-looking statements include, but are not limited to:

1. | That the Purchaser will meet the prescribed Consolidated EBITDA thresholds over the next three years, thus allowing us to realize the contingent proceeds of the Piling Sale.

2. | That work will continue to be required under the contract with Canadian Natural.

3. | That work will continue to be required under our master services agreements with various customers;

4. | The demand for construction services remaining strong;

5. | The continuing development of new mines and the expansion of existing mines;

6. | That we will realize all of our backlog;

7. | Our customers' ability to pay in timely fashion;

8. | Our ability to successfully resolve all claims and unsigned change orders with our customers;

9. | The oil sands continuing to be an economically viable source of energy;

10. | Our customers and potential customers continuing to invest in the oil sands and other resource developments and to outsource activities for which we are capable of providing services;

11. | The continuing construction of the southern and western pipelines;

12. | Our ability to benefit from increased construction services revenue and to maintain operations support services revenue tied to the operational activities of the oil sands;

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13. | Our ability to maintain the right size and mix of equipment in our fleet and to secure specific types of rental equipment to support project development activity enables us to meet our customers' variable service requirements while balancing the need to maximize utilization of our own equipment;

14. | Our ability to access sufficient funds to meet our funding requirements will not be significantly impaired;

15. | Our success in executing our business strategy, identifying and capitalizing on opportunities, managing our business, maintaining and growing our relationships with customers, retaining new customers, integrating our acquisitions, competing in the bidding process to secure new projects and identifying and implementing improvements in our maintenance and fleet management practices; and

16. | Our success in improving profitability and continuing to strengthen our balance sheet through a focus on performance, efficiency and risk management.

Risk Factors
The risks and uncertainties that could cause actual results to differ materially from the information presented in the above forward-looking statements and assumptions include, but are not limited to the risks detailed below.
Quantitative and Qualitative Disclosures about Market Risk
Market risk is the risk that future revenue or operating expense related cash flows, the value of financial instruments or cash flows associated with the instrument will fluctuate because of changes in market prices such as foreign currency exchange rates and interest rates. The level of market risk to which we are exposed at any point in time varies depending on market conditions, expectations of future price or market rate movements and composition of our financial assets and liabilities held, non-trading physical assets and contract portfolios.
To manage the exposure related to changes in market risk, we use various risk management techniques including the use of derivative instruments. Such instruments may be used to establish a fixed price for a commodity, an interest-bearing obligation or a cash flow denominated in a foreign currency.
Business Risk Factors

• | There can be no certainty that any or all of the contingent consideration from the sale of the Piling business will be received. Failure to receive the contingent consideration could negatively impact the market price of the Common Shares.

• | Anticipated new major capital projects in the oil sands may not materialize.

• | Short-notice customer communication of reduction in their mine development or support service requirements, in which we are participating, could lead to our inability to secure replacement work for our dormant equipment and could subject us to non-recoverable costs.

• | Unanticipated short-term shutdowns of our customers' operating facilities may result in temporary cessation or cancellation of projects in which we are participating.

• | An unfavourable resolution to our significant project claims could result in a revenue write down in future periods.

• | Our operations are subject to weather-related and environmental factors that may cause delays in our project work.

• | Our ability to maintain planned project margins on projects with longer-term contracts with fixed or indexed price escalators may be hampered by the price escalators not accurately reflecting increases in our costs over the life of the contract.

• | Our customer base is concentrated, and the loss of or a significant reduction in business from a major customer could adversely affect our financial condition

• | A significant amount of our revenue is generated by providing construction services.

• | A change in strategy by our customers to reduce outsourcing could adversely affect our results.

• | Our ability to grow our operations in the future may be hampered by our inability to obtain long lead time equipment and tires, which can be in limited supply during strong economic times.

• | Reduced availability or increased cost of leasing our equipment fleet could adversely affect our results.

• | We may not be able to access sufficient funds to finance a growth in our working capital or equipment requirements.

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• | Cost overruns by our customers on their projects may cause our customers to terminate future projects or expansions that could adversely affect the amount of work we receive from those customers.

• | Because most of our customers are Canadian energy companies, a downturn in the Canadian energy industry or a global reduction in the demand for oil and related commodities could result in a decrease in the demand for our services.

• | Lump-sum and unit-price contracts expose us to losses when our estimates of project costs are lower than actual costs.

• | Significant labour disputes could adversely affect our business.

For further information on risks, including "Quantitative and Qualitative Disclosure about Market Risk", "Business Risk Factors", "Risk Factors Related to Our Common Shares", and "Risk Factors Related to our Debt Securities" please refer to the "Forward-Looking Information, Assumptions and Risk Factors - Risk Factors" section of our most recent AIF, which section is expressly incorporated by reference into this MD&A.
I. GENERAL MATTERS
Experts
KPMG LLP are our auditors and have confirmed that they are independent with respect to the Company within the meaning of the Rules of Professional Conduct of Institute of Chartered Accountants of Alberta and within the meaning of the U.S. Securities Act of 1933 and the applicable rules and regulations thereunder adopted by the Securities and Exchange Commission and the Public Company Accounting Oversight Board (United States).
Additional Information
Our corporate office has b een re-located Suite 300, 18817 Stony Plain Road, Edmonton, Alberta T5S 0C2. Our corporate head office telephone and facsimile numbers are 780-960-7171 and 780-969-5599, respectively.
For the definition of terms commonly used in our industry but not otherwise defined in this MD&A, please see "Glossary of Terms" in our most recent AIF.
Additional information relating to us, including our AIF dated February 19, 2014, can be found on the Canadian Securities Administrators System for Electronic Document Analysis and Retrieval (SEDAR) database at www.sedar.com, the Securities and Exchange Commission's website at www.sec.gov and our company website at www.nacg.ca.
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