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<br /> 2015<br /> Annual Report<br /> —<br /> Proven Steady Growth<br /> B<br /> 10 Letter to Shareholders<br /> 14 Sustainability Report<br /> 18 Corporate Governance<br /> 19 Board of Directors<br /> 20 Executive Operating Team<br /> 21 Management’s Discussion and Analysis<br /> 48 Management’s and Independent Auditors’ Reports<br /> 50 Financial Statements<br /> 84 Corporate Information<br /> C Toromont 2015 Annual Report<br /> This is who<br /> we are.<br /> Toromont Industries Ltd. and our dedicated<br /> team of more than 3,500 deliver specialized<br /> equipment and much more from over 100<br /> locations in Canada and the United States.<br /> Shareholders know us as TIH on the Toronto Stock Exchange.<br /> Our customers know us by our brands.<br /> Equipment Group<br /> We are a market leader in the supply of specialized mobile<br /> equipment and industrial engines. We provide sales and renta<a title="Annual Report 2015 page 1" href="http://viewer.zmags.com/publication/755118a6?page=1"> 2015 Annual Report — Proven Steady Growth </a> <a title="Annual Report 2015 page 2" href="http://viewer.zmags.com/publication/755118a6?page=2"> 10 Letter to Shareholders 14 Sustaina</a> <a title="Annual Report 2015 page 3" href="http://viewer.zmags.com/publication/755118a6?page=3"> This is who we are. Toromont Industries Ltd. and </a> <a title="Annual Report 2015 page 4" href="http://viewer.zmags.com/publication/755118a6?page=4"> This is why we exist. We exist to create value fo</a> <a title="Annual Report 2015 page 5" href="http://viewer.zmags.com/publication/755118a6?page=5"> This is what we do. Our organizing principle is t</a> <a title="Annual Report 2015 page 6" href="http://viewer.zmags.com/publication/755118a6?page=6"> This is how we do it. Our business model is not u</a> <a title="Annual Report 2015 page 7" href="http://viewer.zmags.com/publication/755118a6?page=7"> This is where we work. Toromont competes with hig</a> <a title="Annual Report 2015 page 8" href="http://viewer.zmags.com/publication/755118a6?page=8"> Some of the customers we served in 2015: Covering</a> <a title="Annual Report 2015 page 9" href="http://viewer.zmags.com/publication/755118a6?page=9"> Idling No More </a> <a title="Annual Report 2015 page 10" href="http://viewer.zmags.com/publication/755118a6?page=10"> Deepening a Relationship Challen</a> <a title="Annual Report 2015 page 11" href="http://viewer.zmags.com/publication/755118a6?page=11"> Refrigerating a Leader Equi</a> <a title="Annual Report 2015 page 12" href="http://viewer.zmags.com/publication/755118a6?page=12"> Fellow Shareholders, Toromont’s record 2015 resul</a> <a title="Annual Report 2015 page 13" href="http://viewer.zmags.com/publication/755118a6?page=13"> </a> <a title="Annual Report 2015 page 14" href="http://viewer.zmags.com/publication/755118a6?page=14"> CIMCO: • grew package sales by serving, amon</a> <a title="Annual Report 2015 page 15" href="http://viewer.zmags.com/publication/755118a6?page=15"> Looking Ahead The road to growth is never smooth.</a> <a title="Annual Report 2015 page 16" href="http://viewer.zmags.com/publication/755118a6?page=16"> Sustainability Report Safety Our first priority i</a> <a title="Annual Report 2015 page 17" href="http://viewer.zmags.com/publication/755118a6?page=17"> Workforce Development Beyond employee safety, To</a> <a title="Annual Report 2015 page 18" href="http://viewer.zmags.com/publication/755118a6?page=18"> that students use in the classroom. In turn, stud</a> <a title="Annual Report 2015 page 19" href="http://viewer.zmags.com/publication/755118a6?page=19"> Environment Toromont believes that what is good </a> <a title="Annual Report 2015 page 20" href="http://viewer.zmags.com/publication/755118a6?page=20"> Corporate Governance A strong and effective corpo</a> <a title="Annual Report 2015 page 21" href="http://viewer.zmags.com/publication/755118a6?page=21"> Board of Directors Com</a> <a title="Annual Report 2015 page 22" href="http://viewer.zmags.com/publication/755118a6?page=22"> Executive Operating Team Randall B. Casson Pr</a> <a title="Annual Report 2015 page 23" href="http://viewer.zmags.com/publication/755118a6?page=23"> Management’s Discussion & Analysis 21</a> <a title="Annual Report 2015 page 24" href="http://viewer.zmags.com/publication/755118a6?page=24"> Management’s Discussion and Analysis This Manag</a> <a title="Annual Report 2015 page 25" href="http://viewer.zmags.com/publication/755118a6?page=25"> Corporate Profile and Business Segmentation As at</a> <a title="Annual Report 2015 page 26" href="http://viewer.zmags.com/publication/755118a6?page=26"> Primary Objective and Major Strategies The prima</a> <a title="Annual Report 2015 page 27" href="http://viewer.zmags.com/publication/755118a6?page=27"> Consolidated Annual Operating Results ($ thousa</a> <a title="Annual Report 2015 page 28" href="http://viewer.zmags.com/publication/755118a6?page=28"> Business Segment Annual Operating Results The ac</a> <a title="Annual Report 2015 page 29" href="http://viewer.zmags.com/publication/755118a6?page=29"> Power generation revenues from Toromont-ow</a> <a title="Annual Report 2015 page 30" href="http://viewer.zmags.com/publication/755118a6?page=30"> CIMCO ($ thousands) Package sales Product suppo</a> <a title="Annual Report 2015 page 31" href="http://viewer.zmags.com/publication/755118a6?page=31"> Consolidated Financial Condition The Company has</a> <a title="Annual Report 2015 page 32" href="http://viewer.zmags.com/publication/755118a6?page=32"> Goodwill and Intangibles The Company performs imp</a> <a title="Annual Report 2015 page 33" href="http://viewer.zmags.com/publication/755118a6?page=33"> Normal Course Issuer Bid Toromont believes that, </a> <a title="Annual Report 2015 page 34" href="http://viewer.zmags.com/publication/755118a6?page=34"> Principal Components of Cash Flow Cash from opera</a> <a title="Annual Report 2015 page 35" href="http://viewer.zmags.com/publication/755118a6?page=35"> Outlook In the Equipment Group, the parts and se</a> <a title="Annual Report 2015 page 36" href="http://viewer.zmags.com/publication/755118a6?page=36"> Key Performance Measures Management reviews and </a> <a title="Annual Report 2015 page 37" href="http://viewer.zmags.com/publication/755118a6?page=37"> Consolidated Fourth Quarter Operating Results Th</a> <a title="Annual Report 2015 page 38" href="http://viewer.zmags.com/publication/755118a6?page=38"> Business Segment Fourth Quarter Operating Results</a> <a title="Annual Report 2015 page 39" href="http://viewer.zmags.com/publication/755118a6?page=39"> CIMCO Three months ended December 31 ($ thousand</a> <a title="Annual Report 2015 page 40" href="http://viewer.zmags.com/publication/755118a6?page=40"> Quarterly Results The following table summarizes</a> <a title="Annual Report 2015 page 41" href="http://viewer.zmags.com/publication/755118a6?page=41"> Selected Annual Information ($ thousands, excep</a> <a title="Annual Report 2015 page 42" href="http://viewer.zmags.com/publication/755118a6?page=42"> such as expanding the Company’s customer base, br</a> <a title="Annual Report 2015 page 43" href="http://viewer.zmags.com/publication/755118a6?page=43"> These contracts are closely monitored for early w</a> <a title="Annual Report 2015 page 44" href="http://viewer.zmags.com/publication/755118a6?page=44"> Critical Accounting Policies and Estimates The C</a> <a title="Annual Report 2015 page 45" href="http://viewer.zmags.com/publication/755118a6?page=45"> employees. Actuarial valuations of these </a> <a title="Annual Report 2015 page 46" href="http://viewer.zmags.com/publication/755118a6?page=46"> Disclosure Controls and Procedures and Internal C</a> <a title="Annual Report 2015 page 47" href="http://viewer.zmags.com/publication/755118a6?page=47"> Net Debt to Total Capitalization Net debt to tota</a> <a title="Annual Report 2015 page 48" href="http://viewer.zmags.com/publication/755118a6?page=48"> Non-Cash Working Capital Non-cash working capital</a> <a title="Annual Report 2015 page 49" href="http://viewer.zmags.com/publication/755118a6?page=49"> Return on Capital Employed (“ROCE”) ROCE is utili</a> <a title="Annual Report 2015 page 50" href="http://viewer.zmags.com/publication/755118a6?page=50"> Management’s Report The preparation and present</a> <a title="Annual Report 2015 page 51" href="http://viewer.zmags.com/publication/755118a6?page=51"> Independent Auditors’ Report To the Shareholder</a> <a title="Annual Report 2015 page 52" href="http://viewer.zmags.com/publication/755118a6?page=52"> Consolidated Statements of Financial Position A</a> <a title="Annual Report 2015 page 53" href="http://viewer.zmags.com/publication/755118a6?page=53"> Consolidated Income Statements Years ended Dece</a> <a title="Annual Report 2015 page 54" href="http://viewer.zmags.com/publication/755118a6?page=54"> Consolidated Statements of Comprehensive Income </a> <a title="Annual Report 2015 page 55" href="http://viewer.zmags.com/publication/755118a6?page=55"> Consolidated Statements of Cash Flows Years end</a> <a title="Annual Report 2015 page 56" href="http://viewer.zmags.com/publication/755118a6?page=56"> Consolidated Statements of Changes in Equity S</a> <a title="Annual Report 2015 page 57" href="http://viewer.zmags.com/publication/755118a6?page=57"> Notes to the Consolidated Financial Statements </a> <a title="Annual Report 2015 page 58" href="http://viewer.zmags.com/publication/755118a6?page=58"> assets or liabilities of the acquiree are assigne</a> <a title="Annual Report 2015 page 59" href="http://viewer.zmags.com/publication/755118a6?page=59"> The Company assesses at each statement of financia</a> <a title="Annual Report 2015 page 60" href="http://viewer.zmags.com/publication/755118a6?page=60"> money and the risks specific to the asset. </a> <a title="Annual Report 2015 page 61" href="http://viewer.zmags.com/publication/755118a6?page=61"> For awards with graded vesting, each tranche is c</a> <a title="Annual Report 2015 page 62" href="http://viewer.zmags.com/publication/755118a6?page=62"> Standards Issued But Not Yet Effective A number o</a> <a title="Annual Report 2015 page 63" href="http://viewer.zmags.com/publication/755118a6?page=63"> disposing of the asset. The value in use calculat</a> <a title="Annual Report 2015 page 64" href="http://viewer.zmags.com/publication/755118a6?page=64"> 3. Accounts Receivable Trade receivables Less:</a> <a title="Annual Report 2015 page 65" href="http://viewer.zmags.com/publication/755118a6?page=65"> 5. Property, Plant and Equipment and Rental Equip</a> <a title="Annual Report 2015 page 66" href="http://viewer.zmags.com/publication/755118a6?page=66"> 6. Other Assets Equipment sold with guaranteed</a> <a title="Annual Report 2015 page 67" href="http://viewer.zmags.com/publication/755118a6?page=67"> The Company performed the annual impairment test </a> <a title="Annual Report 2015 page 68" href="http://viewer.zmags.com/publication/755118a6?page=68"> 9. Long-Term Debt All debt is unsecured. 3.71</a> <a title="Annual Report 2015 page 69" href="http://viewer.zmags.com/publication/755118a6?page=69"> 10. Share Capital Authorized The Company is auth</a> <a title="Annual Report 2015 page 70" href="http://viewer.zmags.com/publication/755118a6?page=70"> The fair value was determined using the discounte</a> <a title="Annual Report 2015 page 71" href="http://viewer.zmags.com/publication/755118a6?page=71"> affected by economic factors that may impact acco</a> <a title="Annual Report 2015 page 72" href="http://viewer.zmags.com/publication/755118a6?page=72"> 14. Income Taxes Significant components of the pr</a> <a title="Annual Report 2015 page 73" href="http://viewer.zmags.com/publication/755118a6?page=73"> 15. Earnings Per Share Net earnings Weighted </a> <a title="Annual Report 2015 page 74" href="http://viewer.zmags.com/publication/755118a6?page=74"> A reconciliation of the outstanding options for t</a> <a title="Annual Report 2015 page 75" href="http://viewer.zmags.com/publication/755118a6?page=75"> The liability for DSUs is recorded in accounts pa</a> <a title="Annual Report 2015 page 76" href="http://viewer.zmags.com/publication/755118a6?page=76"> b) Executive Plan – The plan is a supplement</a> <a title="Annual Report 2015 page 77" href="http://viewer.zmags.com/publication/755118a6?page=77"> The changes in the fair value of assets and the p</a> <a title="Annual Report 2015 page 78" href="http://viewer.zmags.com/publication/755118a6?page=78"> The fair values of the above plan assets are dete</a> <a title="Annual Report 2015 page 79" href="http://viewer.zmags.com/publication/755118a6?page=79"> 20. Supplemental Cash Flow Information Net cha</a> <a title="Annual Report 2015 page 80" href="http://viewer.zmags.com/publication/755118a6?page=80"> performance and allocating resources between segm</a> <a title="Annual Report 2015 page 81" href="http://viewer.zmags.com/publication/755118a6?page=81"> Selected Statement of Financial Position Informat</a> <a title="Annual Report 2015 page 82" href="http://viewer.zmags.com/publication/755118a6?page=82"> 23. Related Party Disclosures Key management per</a> <a title="Annual Report 2015 page 83" href="http://viewer.zmags.com/publication/755118a6?page=83"> Canpro Gator Centre On December 19, 2014, Ag West</a> <a title="Annual Report 2015 page 84" href="http://viewer.zmags.com/publication/755118a6?page=84"> Ten Year Financial Review (1) For the years </a> <a title="Annual Report 2015 page 85" href="http://viewer.zmags.com/publication/755118a6?page=85"> 2011 2010 </a> <a title="Annual Report 2015 page 86" href="http://viewer.zmags.com/publication/755118a6?page=86"> Corporate Information Toromont Cat 3131 Highwa</a> <a title="Annual Report 2015 page 87" href="http://viewer.zmags.com/publication/755118a6?page=87"> How to Get in Touch With Us Tel: 416.667.5511 Fa</a> <a title="Annual Report 2015 page 88" href="http://viewer.zmags.com/publication/755118a6?page=88"> Toromont Industries Ltd. Corporate Office 3131 Hi</a>