TERVITA CORPORATION TSX:TEV. INVESTOR PRESENTATION September 2018

Transcription

1 TERVITA CORPORATION TSX:TEV INVESTOR PRESENTATION September 2018

2 DISCLAIMER This Management Presentation contains certain statements that may be forward-looking statements or forward-looking information within the meaning of applicable securities laws. Forward looking statements are statements that are not historical facts and are often, but not always, identified using words or phrases such as expects, plans, anticipates, intends, estimates, estimated, projects, potential and similar expressions, or stating that certain actions, events or conditions will, would, may, might, could or should occur or be achieved or other similar terminology. In particular, but without limiting the foregoing, this Management Presentation contains forward-looking statements or information pertaining to, the anticipated benefits of the arrangement (the Arrangement ) involving Tervita and Newalta Corporation ( Newalta ), certain combined and pro forma financial information relating to Tervita and Newalta, our plans and objectives for future operations, anticipated operational and financial performance (including anticipated benefits from synergies and cost reductions), the nature of our operations following the completion of the Arrangement, our growth strategy and our ability to take advantage of future growth opportunities, our cash flow, liquidity and financial position, our ability to reduce our leverage and manage our capital expenditures, our expectations regarding oil and gas market recovery, our expectations regarding higher waste volumes, our expectations that oil and gas producers will continue to outsource waste by-product treatment and disposal and that it is difficult for third parties to replicate the expensive footprint of our facilities and our dividend policy. By their nature, forward-looking statements and information involve known and unknown opportunities, costs, risks and uncertainties that may cause actual results; to differ materially from those anticipated. Risks and uncertainties that may affect actual results include, without limitation, decreases in exploration, drilling and production activity levels in the markets where we offer our services, customers may decide to no longer outsource their waste management and other environmental service activities, risks related to non-compliance with environmental laws or delays resulting from such non-compliance, legislative and regulatory initiatives that impact our business, competition, fluctuations in commodity prices and exchange rates and volatility in global financial conditions. With respect to the forward-looking statements and information contained in this Management Presentation, Tervita has made assumptions regarding, among other things: our ability to integrate our business with that of Newalta, the realization of the anticipated benefits and other synergies and cost savings of the Arrangement, our ability to achieve our growth strategy and reduce our leverage, the stability of the industries in which we operate, the creditworthiness of our customers, commodity prices, no material changes in the legislative and operating framework our business, our ability to access capital, our ability to successfully market our business in the areas in which we operate, conditions of the oil and gas industry in our current and proposed market, general economic, business and market conditions, our future debt levels and the impact of increasing competition. Although Tervita believes the expectations expressed in such forward-looking statements and information are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Forward-looking statements and information are based on the beliefs, estimates and opinions of Tervita s management on the date the statements are made. Except as required by law, Tervita undertakes no obligation to update these forward-looking statements in the event that management s beliefs, estimates or opinions, or other factors, should change. The forward-looking statements and information included in this Management Presentation are expressly qualified in their entirety by this cautionary statement. Tervita cautions that the foregoing list of assumptions, risks and uncertainties is not exhaustive. The forward-looking statements and information contained in this Management Presentation are made as of the date hereof, and Tervita does not undertake any obligation to update publicly or to revise any of the included forward-looking statements or information, whether as a result of new information, change in management s estimates or opinions, future circumstances or events or otherwise, except as expressly required by applicable securities law. Any financial outlook or future oriented financial information in this document, as defined by applicable securities legislation has been approved by management of Tervita. Such financial outlook or future oriented financial information is provided by the purpose of providing information about management s current expectation and management s plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes. Certain financial measures in this Management Presentation are not prescribed by IFRS. All non-ifrs measures presented herein do not have any standardized meaning and therefore are unlikely to be comparable to similar measures presented by other companies. Therefore, these non-ifrs measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. All non-ifrs measures are included because management uses the information to analyze operating performance and results, and therefore may be considered useful information by investors. Non-IFRS Measures Adjusted EBITDA and Pro Forma Adjusted EBITDA, Discretionary free cash flow, Net debt to Adjusted EBITDA, Divisional gross margin, Gross margin, maintenance and growth and expansion capital expenditures, related and other financial ratios and credit statistics presented in this presentation are not measurements of financial performance under IFRS and should not be considered as an alternative to income or other performance measures derived in accordance with IFRS, or as an alternative to cash provided by (used in) operating activities as a measure of liquidity. In addition, non-ifrs measures do not have a standardized meaning prescribed by IFRS and, as such, our method of calculating Adjusted EBITDA and Pro Forma Adjusted EBITDA, Discretionary free cash flow, Net debt to Adjusted EBITDA, Divisional gross margin, Gross margin, maintenance and growth and expansion capital expenditures, related and other financial ratios and credit statistics may vary from the methods used by other companies and, as a result, may not be comparable to similarly titled measures, ratios or credit statistics disclosed by other companies. Definitions of each non-ifrs measure used herein and reconciliations to GAAP measures can found in the Non-GAAP Measures section of the Q MD&A available at Sept

3 39 YEARS SERVICING THE CANADIAN ENERGY INDUSTRY Founded in 1979, became publicly traded in 1993, taken private in 2007, recapitalized in 2016 Primarily focused on collecting, processing, recovering and disposing of solid and liquid oilfield waste Extensive installed infrastructure across Western Canada Complementary waste management / processing business servicing many industries Track record of generating stable production-underpinned cash flow through industry cycles Acquired Newalta Corporation in a reverse takeover transaction and became publicly traded on July 24, 2018 Poised for ongoing optimization, expansion and growth Sept

4 TERVITA RECENT ACCOMPLISHMENTS AND SNAPSHOT Overview as at July 31, 2018 Well Capitalized 2016 recapitalization Further strengthening of balance sheet through 2017 free cash flow Ample liquidity to implement business plan & growth Ticker Shares Outstanding TSX: TEV 118 million (~50 million shares broadly held) Strengthened Board & Management New Board of Directors with Grant Billing as Chair Appointed John Cooper as President & CEO Core operational leadership maintained Market Capitalization (2) Net Debt (1)(3) $1,076 million $745 million Strengthened Core Business Focused on low cost efficient customer service Lower corporate cost structure Acquisition of Newalta Improved Adjusted EBITDA, Discretionary Free Cash Flow and cash flow per share Enterprise Value (1)(2) LTM Adjusted EBITDA (1)(4) LTM Discretionary FCF (1)(5) $1,813 million $243 million; 7.5x Trailing EV/LTM Adj. EBITDA $148 million; 13.8% discretionary FCF Yield 1 Pro forma balances as at June 30, Market capitalization is based on Tervita s share price as at July 31, 2018 of C$ Net debt is a non-ifrs measure. Reconciliations to GAAP measures can be found in the Non-GAAP Measures section of the Q MD&A available at 4 Adjusted EBITDA is a non-ifrs measure. Includes estimated run-rate synergies of $43 MM. Total annual expected synergies of $40 - $45 MM by August Adjusted EBITDA includes add backs for one-time items such as severance. Reconciliations to GAAP measures can be found in the Non-GAAP Measures section of the Q MD&A available at 5 Discretionary free cash flow is a non-ifrs measure. Includes estimated run-rate synergies of $43 MM. Total annual expected synergies of $40 - $45 MM by August Reconciliations to GAAP measures can be found in the Non-GAAP Measures section of the Q MD&A available at Tervita paid $41 MM in interest expense in Pro forma LTM interest expense of $60 MM. Sept

5 STRONG LEADERSHIP TEAM AND BOARD OF DIRECTORS LEADERSHIP TEAM John Cooper President, CEO & Director Over 30 years of leadership experience in the energy, industrial and logistic industries Previously CEO of ClearStream Energy Services, COO of Savanna Energy Services, President & CEO of Enermax Services and President of Superior Propane Rob Dawson CFO Over 20 years of experience leading finance and accounting teams across a broad range of industries, including 13 years in the Alberta oil sands Previously CFO of Canadian Oil Sands, held senior positions at Suncor Energy and Global Crossing Brad Dlouhy COO Over 20 years in industrial and oil & gas contracting services related to pipelines, turnarounds, waste management and spill cleanup Held various positions in Tervita since 2000, including President of Midstream Services, Vice President, Director & District Manager BOARD OF DIRECTORS Grant Billing Chairman Chairman of Cortex Business Solutions Inc. Director of Badger Daylighting Previously Chairman and CEO of Superior Plus Michael Colodner Managing Director of Solus Alternative Asset Management LP Allen Hagerman Chairman of TransAlta Renewables Inc. Director of Precision Drilling Corporation Previously Executive VP of Canadian Oil Sands and prior thereto CFO of Canadian Oil Sands Cameron Kramer Previously COO and Senior VP of ARC Resources and prior thereto an executive at CNRL Gordon Pridham Chairman of Orvana Minerals Corp. Director of CHC Student Housing REIT and of America's Silver Corporation Serves as Principal of Edgewater Capital Previously Chairman of Newalta Doug Ramsay Susan Riddell Rose Jay Thornton Kevin Walbridge Co-founder, Vice-Chairman and director of Calfrac Well Services (previously CEO) Co-Chairman of STARS Air Ambulance President and CEO and director of Perpetual Energy Inc. Director of Paramount Resources Ltd. Previously director of Newalta Chairman of Obsidian Energy Director of North American Energy Partners Previously an executive of Shell and Suncor Chairman of Wild River Environmental, LLC Previously Executive VP and COO of Progressive Waste Solutions Sept

6 A LEADING ENERGY SERVICES COMPANY IN CANADA LARGE PUBLIC CANADIAN OILFIELD SERVICES COMPANIES BY Q LTM ADJUSTED EBITDA ($ MM) (1)(2) $350.0 $324 Q LTM Adjusted EBITDA Q LTM Adjusted EBITDA Margin (excl. synergies) Q LTM Adjusted EBITDA Margin (incl. synergies) (3) 70% $300.0 $250.0 $285 $243 $213 $199 $198 60% 50% Largest oilfield-focused waste management company in Canada $ % $177 $174 $150.0 $100.0 $ % 14% 32% 26% 20% 13% 18% 15% 26% $163 14% $136 25% 30% 20% 10% Highest Adjusted EBITDA margin among the largest public oilfield service companies in Canada % 1. Source: Company filings. Includes public Canadian oilfield services companies with enterprise values greater than $1.0 billion. 2. Adjusted EBITDA is a non-ifrs measure. Adjusted EBITDA margins calculated using net energy marketing revenues. Reconciliations to GAAP measures can be found in the Non-GAAP Measures section of the Q MD&A available at 3. Includes estimated full-year synergies of $43 MM. Sept

7 Operating Segments Snapshot (1) Energy Services Landfills TRD (4) Facility Collect, process, recover and dispose solid oilfield waste and fluids Largest TRD and landfill infrastructure in WCSB Leading position in current, high impact plays, plus exposure to key catalysts Heavy Oil and Oil Sands Onsite US and Canadian drill site services Energy marketing Water treatment and management Q LTM Divisional EBITDA (2) : $240 million Q LTM Divisional EBITDA margin (3) : 44% Caverns Sludge Facility Industrial Services Waste management Metals recycling Environmental services Q LTM Divisional EBITDA (2) : $25 million Q LTM Divisional EBITDA Margin (3) : 11% TRD Footprint Heavy Oil Onsite Note: All amounts in C$ unless otherwise stated. 1 All balances on slide are pro forma as at June 30, 2018 on a last twelve months ( LTM ) basis 2 Adjusted EBITDA and Divisional EBITDA are non-ifrs measures. Reconciliations to GAAP measures can be found in the Non-GAAP Measures section of the Q MD&A available at 3 Net revenue excludes energy marketing activities. 4 Treating, recovery and disposal facility ( TRD ). Sept

8 COMPELLING INVESTMENT PROPOSITION Infrastructure Based Exposure to All Major WCSB Operating Areas Top tier infrastructure spans across the Western Canadian Sedimentary Basin Strategically located in key operating areas Well maintained asset base that was built over decades Resilient cash flow generation from stable production-based revenues Stable, Resilient Cash Flow Generation Attractive margins, low sustaining capital Operating exposure to key industry catalysts and commodity price recovery without need for additional capital Strong Balance Sheet and Self-Funded Leverage Reduction Well capitalized balance sheet and strong liquidity position Conservatively capitalized Significant expected future discretionary free cash flows to further de-lever the balance sheet $135 million approved for growth and expansion capital projects in 2018/2019 Pipeline of Growth Opportunities Compelling pipeline of organic expansion and growth opportunities Supports annual low double-digit EBITDA growth Focused on ROIC and cash flow per share growth Sept

9 EXTENSIVE INFRASTRUCTURE: LEADING POSITION IN KEY PLAYS Tervita WCSB Footprint (Energy Services) Highlights Leading market position in key regions, well positioned in every major play in the WCSB MONTNEY / DUVERNAY Strong demand & long-term growth prospects Major presence, market share & proximity to production High impact organic capital growth and customer opportunities Already positioned to benefit from emerging catalysts (LNG) US Insert US Drill Site business active in Marcellus, Permian & Bakken plays DEEP BASIN / CARDIUM Improving utilization through consolidation HEAVY OIL & OIL SANDS Dominant presence in conventional light and heavy oil plays and oil sands region Significant long-term and ongoing demand with growth potential Well positioned for upside from transportation capacity and pricing catalysts Sept

10 STABLE, RESILIENT CASH FLOW GENERATION: CONFIDENT IN SYNERGIES FROM NEWALTA ACQUISITION Reduce costs and improve efficiencies $40 - $45 million of annualized synergies expected to be achieved by August 2020 Anticipated one-time cost of $15 to $20 million Actions taken in July 2018 expected to generate approximately $7 million of synergies in 2018 ($12 million annualized). Detailed plan on track Significant Synergies Synergy G&A Costs Operating Costs Description Corporate headcount, office and IT cost savings Field office cost savings and facility consolidation savings Estimated Annual Savings ($MM) $20 $23 $14 $16 Energy Marketing Internalize energy marketing $6 $7 Identified Synergies $40 $45 Sept

11 STABLE, RESILIENT CASH FLOW GENERATION: ATTRACTIVE INDUSTRY FUNDAMENTALS Trend in WCSB toward longer, more capital intensive and complex wells is driving an increase in oilfield waste volumes Increased activity by customers in the Montney and Duvernay regions Leading waste management services provider in the region Stable annual maintenance spending in the heavy oil and oil sands regions Poised to capture significant upside when heavy oil production recovers TOTAL FLUID PUMPED IN WESTERN CANADA IS INCREASING (1) AVERAGE FLUID PUMPED PER WELL IS INCREASING IN KEY PLAYS (1) STABLE HEAVY OIL / OIL SANDS MAINTENANCE SPENDING (2) Wells completed (000s) 15 Total Fluid Pumped (MM m 3 ) 40 Average Fluid Pumped per Well (000s m 3 ) 50 Capital Spending ($ Billions) $ $ $ $24 ~$33 billion in 2017 spending $ Wells completed Total fluid pumped Deep Basin Duvernay Montney Total WCSB Operating Maintenance Capital/Construction 1 Source: Peters & Co. Limited. 2 Source: Forecast based on Peters & Co. Limited estimates and historic based on CAPP data. Includes spending on upgraders. Sept

12 DEMONSTRATED CASH FLOW RESILIENCY AND UPSIDE TRACK RECORD OF SUBSTANTIAL ENERGY SERVICES FACILITY RESULTS TERVITA - ENERGY SERVICES SEGMENT GROSS MARGIN ($MM) (1) $305 ~US$145/bbl $234 $275 $254 $252 ~$130 MM gross margin during the lowest oil price in past decade $184 $173 $198 ~US$110/bbl $219 $133 $174 Underpinned by substantial exposure to ongoing production Significant upside potential from higher prices and activity levels WTI Price (2) ~US$60/bbl Modest ongoing maintenance capital requirements ~US$35/bbl ~US$26/bbl 2017/18 reductions to corporate overheads bolster resiliency Gross Margin WTI Price (US$/bbl) (2) Addition of Newalta facilities, Heavy Oil Onsite business coupled with synergies adds significant further base of cash flow 1. Source: Tervita Corporation filings, excludes Newalta Corporation. 2. Source: Bloomberg. Sept

13 STABLE, RESILIENT CASH FLOW GENERATION: RESILIENT CASH FLOW GENERATION FROM STABLE PRODUCTION-RELATED REVENUES Q LTM ENERGY SERVICES REVENUE BY OIL & GAS ACTIVITY (1) Production 65% Drilling, Completions & Other (2) 35% Production activities provide stability through economic cycles Long life of oil and gas wells and significant base of producing wells in the WCSB Drilling and completions activity is driven by customer capital spending to sustain and grow production 65% of trailing energy services revenue underpinned by production (1) HISTORICAL TOTAL WCSB PRODUCTION & OPERATED WELL COUNT (3) ~220,000 wells ~6.6 million BOE per day ~3.0 million BOE per day ~35,000 wells Excludes energy marketing. 2 Includes Cleanups, Daily Cover, MSW and Service. 3 Source: Canadian Association of Petroleum Producers (CAPP). Includes data from British Columbia, Alberta, Saskatchewan and Manitoba. Sept

14 STABLE, RESILIENT CASH FLOW GENERATION: RESILIANT ADJUSTED EBITDA AND DISCRETIONARY FREE CASH FLOW Positive unlevered discretionary free cash flow through the cycle, even during the cyclical trough in 2016 PRO FORMA ADJUSTED EBITDA ($MM) (1)(2) $ % $243 $43 $200 Strong discretionary free cash flow provides significant flexibility to repay debt, deploy growth capital or make strategic tuck-in acquisitions 2016 LTM Q Synergies PRO FORMA DISCRETIONARY FREE CASH FLOW ($MM) (1)(3)(4) Reduced overhead costs and operating cost structure 400% $148 $43 $30 $ LTM Q Synergies 1 Adjusted EBITDA and Discretionary free cash flow are non-ifrs measures. Reconciliations to GAAP measures can be found in the Non-GAAP Measures section of the Q MD&A available at 2 Pro forma 2017 Adjusted EBITDA for Tervita is $201 MM. Excludes synergies of $43 MM. 3 Excludes one-time integration costs of $15 to $20 MM. 4 Tervita recapitalized its debt in Interest expense used for comparative calculation in 2016 is full year 2017 interest expense for illustrative purposes. Sept

15 WELL CAPITALIZED FOR STABILITY AND GROWTH PRO FORMA BALANCE SHEET (C$MM) (1) Pro forma (6/30/2018) KEY HIGHLIGHTS Tervita has a strong liquidity position 2 nd Lien notes (2) $799 mm Capital Leases Total Debt (Secured) $4 mm $803 mm 3.1x leverage, based on LTM pro forma Adjusted EBITDA (2) Cash and Cash equivalents ($58) mm Net Debt $745 mm Total Debt/LTM Adj. EBITDA (3) 3.3x Net Debt/LTM Adj. EBITDA (3) 3.1x NET DEBT/ADJ. EBITDA FLOW (X) Pro Forma Following Acquisition of Newalta Company expected to generate strong discretionary free cash flow Flexibility to fund organic growth and de-lever in the near term 2.0x 2.5x expected range by 2020 (3) 1 Pro forma as at June 30, $610 MM USD notes and related financial derivatives. 3 Includes estimated synergies of $43 MM. Total expected synergies of $40 - $45 MM by August Sept

16 PIPELINE OF GROWTH OPPORTUNITIES: Tervita is emerging from period of constrained growth capital Significant backlog of high potential organic projects To date $135 million approved for growth and expansion capital projects in 2018/2019 Highly focused on return on invested capital and growth in cash flow per share Sept

17 INVESTMENT HIGHLIGHTS Infrastructure Based Exposure to All Major WCSB Operating Areas Stable, Resilient Cash Flow Generation Strong Balance Sheet and Self-Funded Leverage Reduction Leading exposure to high activity plays Capacity in place to capitalize on key industry catalysts Highest pro forma Adjusted EBITDA margin amongst largest Canadian service companies 2/3 of energy services revenue from productionbased volumes Strengthened by synergies from Newalta acquisition Significant discretionary free cash flow (13.8% yield) to fund growth and de-lever balance sheet Pipeline of Growth Opportunities Substantial pipeline of organic growth projects Opportunities for tuck-under acquisitions Low double digit annualized EBITDA Growth Sept

18 APPENDIX: OTHER FINANCIAL INFORMATION

19 Q FINANCIAL RESULTS (all Values in C$MM) % Change Revenue Q1 Q2 Q3 Q4 Q1 Q2 Q2 YoY Tervita (1) $125 $114 $135 $132 $116 $124 9% Newalta % Total % Adj. EBITDA (2) Tervita (3) $41 $33 $42 $40 $37 $33 0% Newalta % Total % Capital Expenditures (4) Tervita $9 $10 $17 $39 $15 $15 50% Newalta % Total % Tervita s Adjusted Q EBITDA was in line with prior year reflecting reduced volumes at TRDs, Caverns and Landfills We expect higher waste volumes in 2H 2018 for the Energy Services segment Corporate overhead decreased to 9% of revenue (excluding energy marketing), reflecting continued efforts to recalibrate our overhead cost structure 1 Net revenue excludes energy marketing activities. 2 See Appendix for reconciliation of non-ifrs measures. 3 Adjusted EBITDA for Tervita includes add backs for one-time items such as severance. 4 Includes maintenance and growth and expansion capital expenditures. Sept

20 STRONG BALANCE SHEET & SELF-FUNDED LEVERAGE REDUCTION: CASH FLOWS PROVIDES FLEXIBILITY Debt Reduction Target mid-cycle leverage of times within the next two years, driven by Adjusted EBITDA growth, margin expansion and capital structure adjustments Focused on generating Adjusted EBITDA growth and robust cash flow Long-term objective to reduce leverage and grow the business To achieve these goals, management will focus on: Maintenance capital in the $40 MM to $45 MM per year range Capital Expenditures Growth capex is discretionary and management will evaluate projects based on economic returns using benchmark metrics and ability to fund within available cash flow Focus on return on invested capital and growth of cash flow per share 2H 2018 focus on integration and realizing synergies M&A Opportunities Newly public company with access to capital markets to finance future acquisitions Evaluate acquisition opportunities based on financial metrics, strategic fit and ability to expand service offerings to our customers Dividend Policy Future consideration based on availability of cash flow, leverage and growth opportunities Sept

21 TERVITA S RECENT ACCOMPLISHMENTS Improved Profitability (2016 to 2017) (1) Improved Core Business Completed strategy review Reduced corporate overhead costs Improved operating efficiency Increased focus on customer service 42% 11% Net Revenues (2) in Gross Margins Increase in Increase Revitalized Spending for Growth Evaluated and planned pipeline of organic capital growth opportunities in current operating footprint Executed $52 million in expansion and growth capital spending in 2017 Reduced Costs (1) 28% Decrease in G&A / Revenue 7% Decrease in Operating Costs / Revenue Growth via Accretive Acquisitions Energy Services acquisitions: 3K Oil Services (2017) Newalta Corporation (2018) Industrial Services acquisitions: Columbia Recycle (Kimberley & Trail) (2017) Southwest Salvage(2018) Improved Adj. EBITDA and Cash Flow from Operations (1) 58% 175% Increase Increase in Adj. EBITDA (3) in Cash Flow from Operating Activities Tervita has achieved several important milestones, focusing on growth in cash flow per share and return on invested capital 1 Based on Tervita s standalone operations and financial performance. 2 Net revenue excludes energy marketing activities. 3 Adjusted EBITDA is a non-ifrs measure. Adjusted EBITDA includes add backs for one-time items such as severance. Reconciliations to GAAP measures can be found in the Non- GAAP Measures section of the Q MD&A available at Sept

22 APPENDIX: ADDITIONAL INFORMATION

23 TREATMENT, RECOVERY AND DISPOSAL FACILITIES ( TRDs ) TRDs separate waste water and waste solids, while recovering oil from petroleum wastes Separation maximizes recovery of oil and the residual waste water and how solids byproducts are disposed Reclaimed Oil Crude Oil Pipeline Liquids and solids with recoverable oil Centrifuge Fluid Deep Well Injection Gravity Compression System To Cavern Residual Solids To Landfill Sept

24 CAVERN DISPOSAL FACILITIES Tervita pioneered salt caverns for secure disposal of fluids and certain solids Wastes are unloaded into mixing tanks and blended with brine water to make a slurry Salt The slurry is pumped into a cavern for disposal (Depth: 3,000 4,000 ft) Crude oil is separated from the waste through gravity and heat, and eventually extracted and sold Tervita s cavern disposal technology is highly effective High capacity receiving system Safe and reliable solids disposal Geothermal heat assists in oil recovery Capacity expandable by washing new caverns Recoverable Oil Caverns can take wastes that traditional TRDs cannot process High ph fluids Chemicals Naturally occurring radioactive materials ( NORMs ) Processed sludges and other contaminants Brine Sept

25 ENGINEERED LANDFILLS Largest owner and operator of Class II landfills in western Canada Provides services for the processing, recovering and disposing of solid materials 21 owned sites, three sites operated under contract and three sites under contract for other landfill operators Provides disposal options for non-hazardous oilfield waste and industrial waste The non-hazardous oilfield waste is received from: 1. Tervita s TRD facilities 2. External oil and gas operations 3. Environmental remediation sites Solid waste streams include drill cuttings, contaminated soil, produced sand and treated solids Source: Company filings. Sept

26 ENERGY SERVICES DIVISION: US Insert Sept

27 ENERGY SERVICES - PICTORIAL West Edson TRD Lindbergh Cavern Spirit River Landfill & TRD SAGD Plant interior Sept

28 ENERGY MARKETING OVERVIEW KEY HIGHLIGHTS Includes the purchase, blending, storage and selling of processed / recovered crude oil and condensate Maximizes the return on oil recovered at Tervita waste processing facilities Leverages 15 strategically located pipeline connected and 6 non-pipeline connected TRD facilities (1) Provides valuable netback optimization opportunities to over ~75 producers and other counterparties TRD network provides customers with access to the pipeline grid Low risk, high volume business with low overhead (~10 staff), minimal capital, and low operating expenditures Requires no working capital 1 Source: Company filings and Company website. Some TRD facilities don t maintain terminal operations. Sept

29 INDUSTRIAL SERVICES DIVISION MANAGES WASTE FOR MANY SECTORS Diverse customer base includes oil and gas, mining, transportation, forestry and property development companies, and various governmental organizations Diversifies revenue away from oil and gas commodity fluctuations METALS RECYCLING WASTE MANAGEMENT ENVIRONMENTAL SERVICES Purchases and resells metals collected from demolition sites, operating oil production mines and industrial facilities Rail connected facilities served by a fleet of specialized mobile heavy equipment Collects, processes and disposes of hazardous and non-hazardous waste Specialized trucks and transfer stations serving customers in western Canada Remediation and environmental construction, demolition and decommissioning, mill services, bioremediation facilities, water management and sulphur services Targets and captures waste material for disposal in Tervita facilities Sept

30 METALS RECYCLING SUMMARY Operates recycling facilities that purchase and process ferrous and non-ferrous metals recovered from demolition sites and other locations Fleet of 12 modern mobile stationary shears in western Canada All four of Tervita s metals recycling scrap yards (two in AB, two in B.C.) are rail connected, providing market access within Canada and the U.S. and allows Tervita to offer competitive pricing to its customers KEY HIGHLIGHTS Full-service scrap metals recycler with over 60 years in the business Largest fleet of heavy recycling equipment and specialist recycling equipment in Western Canada Leading supplier for railroad emergency response in Western Canada SERVICE LINES TERVITA OPERATIONAL FOOTPRINT Scrap Metals Recycling: recycle all types of metal including steel, aluminum, copper, brass, stainless steel, and lead Bin Services: temporary, short-term, or long-term bin service Oilfield & Industrial Demolition Services: oilfield demolition & yard clean-up throughout Alberta and Saskatchewan On-site Scrap Metals Recycling: on-site scrap metal yards & scrap metal collection points for key customers, including Suncor, Shell, Conoco Philips, Husky, and Cenovus Rail Services: single point of contact for all derailment response, clean-up, asset recovery, & remediation activities Source: Company filings. Sept

31 METALS RECYCLING PROCESS Sept

32 WASTE SERVICES SUMMARY Collects and processes waste bins that contain hazardous and non-hazardous materials and disposes of the collected waste products Also provides cost-effective services for management and disposal of NORMs Extensive network of facilities including a fleet of specialized trucks and containment bins KEY HIGHLIGHTS Full-cycle waste management, delivering unique solutions for specific customer needs: Network of facilities spanning western Canada Specializing in waste management through all business sectors: Oil & Gas, Industrial, Commercial, Maintenance and Manufacturing By-product recycling & disposal Waste characterization and identification Packaging, transportation, recycling & disposal of hazardous and nonhazardous waste streams Bulk liquid and specialty waste management Solid & sludge waste processing and management Specialized waste container services, fleer of 10,000 containers Waste transfer stations: waste processing, consolidation and disposal Field services: on-site management of waste, project management and site supervision, site clean ups, transportation and disposal of various waste streams, emergency response, spill containment and mitigation, and major maintenance waste management support Canada s leading NORM (1) management services TERVITA OPERATIONAL FOOTPRINT SERVICE LINES Transfer Stations Roll Off Services NORM Services Field Services Waste Tracking Source: Company filings. 1. Naturally occurring radioactive materials Sept

33 WASTE MANAGEMENT CYCLE Sept

34 ENVIRONMENTAL SERVICES SUMMARY Provides comprehensive environmental solutions, including site remediation, demolition, decommissioning, environmental construction and related services Remediation and Environmental Construction: Remediation services include the segregation, handling and treatment of contaminated soils, water and hazardous substances Engineers and constructs environmentally compliant waste storage facilities, bioremediation cells, ponds, barrier walls, bentonite slurry trenches, funnel and gate technologies, cut-off and recovery trenches and engineered landfills Demolition and Decommissioning: Demolition services include turnkey demolition and decommissioning services that enable regulatory compliance, materials recycling waste disposal and site rehabilitation for both above ground and underground storage tanks Initial removal, disposal and/or recycling of residual waste in tanks and explosive vapor monitoring, if necessary Mill Services: Provide auto fluff management, slag management and contractor support to various steel mills Source: Company filings. Bioremediation Facilities: Network of bioremediation pads used to convert hydrocarbon contaminated soil into clean fill Water Management: Full suite of water treatment and management services for major infrastructure upgrade projects, including liquefied natural gas early works, facility expansions, dam construction and upgrades, and large tunneling projects Sulphur Services: TERVITA OPERATIONAL FOOTPRINT Provides sulphur by-product solutions to its clients, including sulphur forming/blocking, re-melting, logistics services and disposal Sept

35 INDUSTRIAL SERVICES DIVISION TERVITA OPERATIONAL FOOTPRINT Source: Company filings. Sept

36 Energy Services PREDICTABLE REVENUE PROFILE WITH SIGNIFICANT UPSIDE POTENTIAL IN A PRICE RECOVERY Energy Price Exposure Waste Products Tervita Solutions Drilling / Completions CAPEX (can be cyclical) Drill cuttings and mud Water / oil flowback Fracturing sand TRD Facilities Caverns / Landfills Ongoing Production OPEX (Stable and predictable) Produced / wastewater Emulsions Dry oil / condensate Produced sand TRD Facilities Caverns / Landfills Energy Marketing Onsite Services Energy Marketing Some energy price exposure Produced / wastewater Emulsions Produced sand N/A Fee for Service Facility Operations / Centrifuge Blending / transportation Basic arbitrage Ongoing production provides significant revenue stability Drilling / completions / other provides significant Torque to commodity prices in a recovery scenario Industrial Services has little exposure to energy commodity price fluctuations While relatively small (based on EBITDA contribution), Industrial Services represents a potential future area of organic and inorganic growth Sept

37 TERVITA CORPORATION TSX:TEV Investor Relations Toll-free: tervita.com