Stantec At A Glance

2012 STANTEC FINANCIAL REVIEW2OUR BUSINESS OBJECTIVETo be a top 10 global design firm. Being top 10 means › Being recognized for the quality of our work among the top 10 firms in our industry › Working on complex projects for top, long-term clients › Attracting and retaining highly talented, innovative employeesOUR PURPOSE AND PROMISEOur purpose is to create communities and our promise is to design with community in mind.STANTEC AT A GLANCESTRATEGY To achieve our business objective, we focus on• Positioning ourselves among the top-tier service providers in the sectors and geographic locations in which we operate• Driving a client-focused culture through cross-selling efforts and account management strategies• Focusing on quality management and providing expertise and value-added services to our clients • Expanding our capabilities and geographic reach through the acquisition and integration of firms that share our vision and cultureWE PUT PEOPLE FIRSTWE ARE BETTER TOGETHERWE DO WHAT IS RIGHTWE ARE DRIVEN TO ACHIEVEOur performance is driven by our ability to achieve excellence by putting people first, developing strong, long-lasting relationships with each other and our clients, doing what is right in every decision we make, and being driven to achieve at every level. Based on our successes in these areas, we believe that we are well positioned to realize our overall goal of being a top 10 global design firm.SUSTAINABILITY We are driven to create and foster a culture of sustainability, both within our Company and with the services we provide to our clients. We commit to doing what is right by demonstrating the values of social, economic, and environmental responsibility, and by fostering a culture of health and safety for all our employees and stakeholders.In 2013, we will focus on meeting established targets to reduce the impact of significant environmental aspects, including energy consumption, paper consumption, and disposal of waste. All of these collectively contribute to cost savings. For more information, please refer to our annual Sustainability Report at Stantec.com.STANTEC INC. 3BUSINESS MODELOur business model is based on providing services across diverse geographic locations, distinct practice area units, and all phases of the infrastructure and facilities project life cycle—planning, design, construction, maintenance, and decommissioning.This three-dimensional, sustainable approach ensures that we do not have to depend on any single geographic location, practice area unit, or life cycle phase for our work. Each time we strengthen any of the three dimensions, we increase and diversify our business.GEOGRAPHIC DIVERSIFICATIONWe operate in three main geographic regions: Canada, the United States, and International. Our aim is to offer the power and resources of a large global entity while maintaining the personality and service delivery attitude of a small, local business.COMMUNITY INVESTMENTStantec is committed to supporting growth through the enhancement of knowledge, prosperity, health, and quality of life in the communities where we live and work. To this end, we target donating one percent of our annual pretax profits, through direct cash contributions or services in kind, to charitable or not-for-profit endeavors in arts, education, environment, and health and wellness. TOP: Delaware County Community College – Science, Technology, Engineering, & Mathematics (STEM) Complex Media, Pennsylvania38% United States58% Canada4% International2012 GROSS REVENUE BY REGIONAL OPERATING UNITEnvironmentCanadaUnited StatesInternationalIndustrialUrban LandBuildingsTransportationLIFE CYCLE2012 STANTEC FINANCIAL REVIEW4STANTEC INC. 5PRACTICE AREA UNIT SPECIALIZATIONBUILDINGS Stantec’s Buildings team works with our clients to design high-performance, cost-effective, and sustainable buildings. Services include• Pre-design services, including project and program definition and planning• Architectural and interior design• Structural, mechanical, electrical, and acoustical engineering• Sustainability and performance engineering• Post-construction services, including commissioning and systems optimizationENVIRONMENT Stantec’s Environment team provides our clients with integrated, professional, and sustainable solutions to their environmental concerns. Services include• Water supply, treatment, storage, and distribution• Wastewater collection, pumping, treatment, and disposal• Watershed management• Environmental assessment, documentation, and permitting• Ecosystem restoration planning and design• Environmental site management and remediation• Subsurface investigation and characterization• Geotechnical engineeringINDUSTRIAL Stantec’s Industrial team provides integrated, practical solutions for complex industry projects that meet functional needs and are sensitive to the environment. Services include• Project planning and development• Functional programming• Engineering• Project management• Project services, including procurement and construction support• Strategic advisory servicesTRANSPORTATION Stantec’s Transportation team provides a full range of innovative services to facilitate the safe and efficient movement of people and goods through various modes of transportation. Services include• Project management• Transportation planning and investment studies• Engineering• Construction administration• Infrastructure managementURBAN LAND Stantec’s Urban Land team works to enhance the quality of life where people work, live, and play by providing client solutions that are environmentally responsible, aesthetically beautiful, functional, and technically sound. Services include• Planning• Landscape architecture• Geomatics• Engineering• Project management • Conceptual and master planning• Development approvals and entitlement• Infrastructure design• Construction review1. Glendale Diversion and Water Supply Improvement Project Reno, Nevada2. Kelowna General Hospital Ambulatory Care Centre Kelowna, British Columbia3. RiverWalk Urban Development Calgary, Alberta4. Enbridge Hardisty Merchant Tank Facility Hardisty, Alberta5. US 460 Connector Design-Build Buchanan County, VirginiaCurrently, we provide services in five specialized and distinct practice area unit groupings: Buildings, Environment, Industrial, Transportation, and Urban Land. Focusing on this combination of services helps differentiate us from our competitors and allows us to enhance our presence in new geographic locations and markets.14 5232012 GROSS REVENUE BY PRACTICE AREA UNIT22% Buildings34% Environment11% Urban Land12% Transportation21% Industrial2012 STANTEC FINANCIAL REVIEW62012 FINANCIAL SUMMARY AND HIGHLIGHTS(1) The figures for 2008, 2009, and 2011 are after a goodwill impairment charge. (2) This is unaudited information. (3) EBITDA is calculated as income before income taxes less net interest expense, amortization of intangible assets, depreciation of property and equipment, and goodwill and intangible impairment.(4) High and low prices for the common shares on the Toronto Stock Exchange (TSX) and New York Stock Exchange (NYSE) during the 52 weeks ended December 31, 2012, shown above, were the intraday prices.* These numbers are not restated for compliance with IFRS but are reported under Canadian GAAP (CGAAP) effective in the year concerned.(In thousands of Canadian dollars, except per share amounts and ratios) 12 11 10 09* 08* Gross revenue 1,882,900 1,683,403 1,513,062 1,519,865 1,351,951 Net revenue 1,556,394 1,378,547 1,226,040 1,242,942 1,130,124 Income before taxes (1) 164,493 49,676 134,779 91,666 64,499 Net income (1) 120,902 12,662 94,741 55,940 29,017 Current assets 589,185 529,153 500,944 409,253 480,725 Current liabilities 345,158 327,516 323,992 283,811 300,009 Property and equipment 115,086 107,853 113,689 108,256 107,768 Long-term debt 256,408 236,601 275,636 198,769 215,113 Shareholders’ equity 727,052 627,048 615,585 547,394 538,975 Gross revenue backlog (2) 1,272,000 1,120,000 1,043,000 948,000 1,005,000 EBITDA (3) 221,034 195,727 185,391 182,412 166,429 Cash and cash equivalents 41,753 36,111 62,731 14,690 103,979 Earnings per share – basic (1) 2.64 0.28 2.07 1.23 0.64 Earnings per share – diluted (1) 2.64 0.28 2.06 1.22 0.63 Current ratio 1.71 1.62 1.55 1.44 1.60 Net debt to equity ratio 0.35 0.41 0.42 0.40 0.26 Weighted average number of shares outstanding 45,751,828 45,638,311 45,690,555 45,544,688 45,584,612 Shares outstanding 45,983,894 45,523,585 45,768,320 45,716,820 45,448,123 Shares traded 42,202,861 42,741,114 36,927,790 40,881,633 57,354,858 TSX (In Canadian dollars) High (4) 41.32 30.33 30.40 30.85 40.10 Low (4) 25.91 21.50 22.79 18.56 16.35 Close 39.75 27.57 27.73 30.40 30.15 NYSE (In US dollars) High (4) 41.82 31.89 29.29 29.53 40.30 Low (4) 25.74 20.96 20.80 14.19 12.70 Close 40.10 27.25 27.97 28.84 24.70 IFRS IFRS IFRSSTANTEC INC. 7All charts represent millions of Canadian dollars, except for diluted EPS. 2012, 2011, and 2010 numbers are in compliance with IFRS. Prior years are not restated but are reported under CGAAP.GROSS REVENUE08091011120 500 2,0001,5001,000EBITDA08091011120 75 225150GROSS REVENUE BACKLOG08091011120 1,400350 700 1,050NET INCOME08091011120 35 70 140105Net Income Net Income before goodwill impairmentDILUTED EPS08091011120 2.0 3.01.0EPS - Diluted EPS - Diluted before goodwill impairment16.0%10 YEAR CAGR* REVENUE GROWTH OF16.9%10 YEAR CAGR* EBITDA GROWTH OF$0.60ANNUAL DIVIDEND PER SHARE OFWHY INVEST IN STANTEC?BECAUSE WE ARE FOCUSED ON DELIVERING LONG-TERM SHAREHOLDER VALUE.* Compound annual growth rate