Management s Discussion and Analysis and Financial Statements. First Quarter Ended March 31, 2012

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1 Management s Discussion and Analysis and Financial Statements First Quarter Ended March 31, 2012

2 ONEX AND ITS OPERATING COMPANIES Onex is a public company whose shares trade on the Toronto Stock Exchange under the symbol OCX. Onex businesses have assets of $42 billion, generate annual revenues of $36 billion and employ approximately 246,000 people worldwide. ONEX PARTNERS I ONEX PARTNERS II ONEX PARTNERS III ONCAP II ONCAP III ONEX REAL ESTATE PARTNERS ONEX CREDIT PARTNERS DIRECT The investment in The Warranty Group is split almost equally between Onex Partners I and II. The investment in ResCare is split almost equally between Onex Partners I and III. The investment in Casino ABS is split approximately 80%/20% between ONCAP II and III, respectively. Throughout this report, all amounts are in U.S. dollars unless otherwise indicated. Table of Contents 4 Management s Discussion and Analysis 38 Interim Consolidated Financial Statements 56 Shareholder Information

3 ONEX CORPORATION Over 28 Years of Successful Investing Founded in 1984, Onex is one of North America s oldest and most successful private equity firms committed to acquiring and building high-quality businesses. As an active owner, the Company has built more than 70 businesses, completing approximately 350 acquisitions with a total value of approximately $44 billion. Onex long-term project returns have generated a multiple of invested capital of 3.3 times from its core private equity activities since inception, resulting in a 29 percent compound IRR on realized, substantially realized and publicly traded investments. The Company is guided by an ownership culture focused on achieving strong absolute growth, with an emphasis on capital preservation. With an experienced management team, significant financial resources and no debt at the parent company, Onex is well-positioned to continue to acquire and build businesses. Onex manages its proprietary capital as well as capital entrusted to it by third-party investors from around the world, including public and private pension funds, sovereign wealth funds, banks, insurance companies, and fund of funds managed by other asset managers. Onex Capital Onex manages its $4.8 billion of proprietary capital largely through its two private equity platforms: Onex Partners (for larger transactions) and ONCAP (for mid-market transactions). The Company also invests through Onex Real Estate Partners and Onex Credit Partners. Onex long-term goal is to grow its proprietary capital by at least 15 percent per annum, and to have that growth reflected in its share price. For the three months ended March 31, 2012, Onex proprietary capital per share grew by 7 percent to $39.28 from $36.85 at December 31, So we are off to a good start. Third-party Capital In addition to the management of Onex proprietary capital, Onex is entrusted with third-party capital from institutional investors around the world. The Company currently manages $9.9 billion of invested and committed capital on behalf of its investors and partners, of which 86 percent relates to its private equity platform and the balance to Onex Credit Partners. The management of third-party capital provides two significant benefits to Onex. First, Onex receives a committed stream of annual management fees on $8.5 billion of third-party assets under management, substantially offsetting ongoing operating expenses. Second, Onex has the opportunity to share in the profits of its third-party investors through the carried interest participation. Carried interest, if realized, can significantly enhance Onex investment returns. How Onex $4.8 billion of Capital is Deployed at March 31, 2012 Large-Cap Private Equity 56% Private 34% Public 22% Cash and Near-Cash Items 30% Mid-Market Private Equity 7% Onex Credit Partners 3% Onex Real Estate Partners 4% Investments are valued at fair value as at March 31, 2012 with the exception of an investment that is valued based on the last third-party investment. The Components of Onex $9.9 billion of Third-Party Assets under Management at March 31, 2012 Onex Partners III 41% Onex Partners II 23% Onex Partners I 11% Onex Credit Partners 14% ONCAP 10% Other 1% Assets under management include capital managed on behalf of co-investors and the management of Onex and ONCAP. Onex Corporation First Quarter Report

4 HOW WE ARE INVESTED All dollar amounts, unless otherwise noted, are in millions of U.S. dollars. This How We Are Invested schedule, which is prepared quarterly and is included in the Company s earnings releases, details Onex $4.8 billion of proprietary capital and provides private company performance and public company ownership information. This schedule includes values for Onex private companies based upon estimated fair values and as such are non-gaap measures. While it provides a snapshot of Onex net assets, this schedule does not fully reflect the value of Onex asset management business as it includes only an estimate of the unrealized carried interest due to Onex based upon the current values of the investments and allocates no value to the management company income. Proprietary Capital As at March 31, 2012 December 31, 2011 Private Equity Onex Partners Private Companies (1)(2) $ 1,333 $ 1,847 Public Companies (2)(3) Unrealized Carried Interest on Onex Partners Investments (4) ONCAP (5) Direct Investments Private Companies (6) Public Companies (3) ,983 2,831 Alternative Assets Onex Real Estate Partners (7) Onex Credit Partners (8) Other Investments Cash and Near-Cash (9) 1,384 1,302 Onex Corporation Debt $ 4,792 $ 4,494 Proprietary Capital per Share (March 31, 2012 C$39.18; December 31, 2011 C$37.47) (10) $ $ Public Companies As at March 31, 2012 Shares Subject to Carried Interest (millions) Shares Held by Onex (millions) Closing Price per Share(11) Market Value of Onex Investment Onex Partners Skilled Healthcare Group (12) $ 7.66 $ 27 Spirit AeroSystems (12) $ TMS International (12) $ Allison Transmission (2)(12) $ Estimated Management Investment Plan Liability (35) Direct Investments Celestica 17.8 (13) $ $ 992 Significant Private Companies As at March 31, 2012 Onex and its Limited Partners Ownership LTM EBITDA(14) Net Debt Cumulative Distributions Onex Economic Ownership Original Cost of Onex Investment Onex Partners Center for Diagnostic Imaging 81% $ 38 $ 100 $ 67 19% $ 17 The Warranty Group 92% 98 (15) n/a % 154 Hawker Beechcraft 49% n/a(16) n/a(16) 11 (17) 19% 212 (18) Carestream Health 95% 399 1, % 186 RSI Home Products 50% n/a n/a n/a 20% 126 Tropicana Las Vegas 76% n/a (19) 52 17% 60 Tomkins 56% 732 (20) 2,307 14% 315 ResCare 98% % 41 JELD-WEN 59% (21) 157 (22) 527 (22) 15% (21) 203 (23) Direct Investments Sitel Worldwide 68% $ 127 $ 669 $ 68% 251 1,314 $ 1,565 2 Onex Corporation First Quarter Report 2012

5 H OW WE ARE INVESTED Notes to Tables (1) Based on the US$ fair value of the investments in Onex Partners financial statements net of the estimated Management Investment Plan ( MIP ) liability on these investments of $24 million (2011 $33 million). (2) In March 2012, Allison Transmission completed an initial public offering of approximately 30.0 million shares of common stock (NYSE: ALSN), including the over-allotment option, priced at $23.00 per share. At December 31, 2011, Allison Transmission was included in private companies of Onex Partners. (3) Based on the closing market values and net of the estimated MIP. (4) Represents Onex share of the unrealized carried interest on public and private companies in the Onex Partners Funds. (5) Based on the C$ fair value of the investments in ONCAP s financial statements net of the estimated MIP liability on these investments of $14 million (2011 $13 million) and a US$/C$ exchange rate of ( ). (6) Based on the value of the last third-party investment. (7) Based on the carrying value of Onex Real Estate Partners investments at March 31, 2012 and December 31, (8) Based on the market values of investments in Onex Credit Partners funds and Onex Credit Partners Collateralized Loan Obligation. Onex Credit Partners Collateralized Loan Obligation was established in March Excludes approximately $316 million (2011 $312 million) invested in a segregated Onex Credit Partners unleveraged senior secured loan strategy fund, which is included with cash and near-cash items. (9) Includes approximately $316 million (2011 $312 million) invested in a segregated Onex Credit Partners unleveraged senior secured loan strategy fund. (10) Calculated on a diluted basis. (11) Closing prices on March 31, (12) Excludes Onex potential participation in the carried interest and includes shares related to the MIP. (13) Excludes shares held in connection with the MIP. (14) EBITDA is a non-gaap measure and is based on the local GAAP of the individual operating companies. These adjustments may include non-cash costs of stock-based compensation and retention plans, transition and restructuring expenses including severance payments, the impact of derivative instruments that no longer qualify for hedge accounting, the impacts of purchase accounting and other similar amounts. (15) Amount presented for The Warranty Group is adjusted net earnings rather than EBITDA. Net earnings on a U.S. GAAP basis, including the impacts of purchase accounting, were $94 million. (16) In May 2012, the company filed for bankruptcy protection. (17) Represents interest received on the portion of the Senior Notes held by Onex, Onex Partners II and Onex management. (18) Includes investment in Senior Notes. (19) A comprehensive redevelopment at Tropicana Las Vegas caused a disruption to its operations, resulting in negative LTM EBITDA that is not reflective of a fully operational hotel and casino. (20) LTM EBITDA excludes EBITDA from businesses divested as of March 31, (21) On an as-converted basis. (22) LTM EBITDA and net debt are presented for JELD-WEN Holding, inc. Net debt excludes $120 million of convertible notes held by Onex, Onex Partners III, Onex management and certain other limited partners. (23) Net of $83 million of the amount originally invested in JELD-WEN that was sold by Onex to certain limited partners and others as a co-investment in February 2012 and $12 million return of capital on the convertible promissory notes to date. Onex Corporation First Quarter Report

6 MANAGEMENT S DISCUSSION AND ANALYSIS Throughout this MD&A, all amounts are in U.S. dollars unless otherwise indicated. The interim Management s Discussion and Analysis ( MD&A ) provides a review of how Onex Corporation ( Onex ) performed in the three months ended March 31, 2012 and assesses future prospects. The financial condition and results of operations are analyzed noting the significant factors that impacted the consolidated statements of earnings, consolidated statements of comprehensive earnings, consolidated balance sheets and consolidated statements of cash flows of Onex. As such, this interim MD&A should be read in conjunction with the unaudited interim consolidated financial statements and notes thereto included in this report. The interim MD&A and the Onex unaudited interim consolidated financial statements have been prepared to provide information about Onex on a consolidated basis and should not be considered as providing sufficient information to make an investment or lending decision in regard to any particular Onex operating business. The following interim MD&A is the responsibility of management and is as of May 9, Preparation of the interim MD&A includes the review of the disclosures on each business by senior managers of that business and the review of the entire document by each officer of Onex and by the Onex Disclosure Committee. The Board of Directors carries out its responsibility for the review of this disclosure through its Audit and Corporate Governance Committee, comprised exclusively of independent directors. The Audit and Corporate Governance Committee has reviewed and approved this disclosure. The interim MD&A is presented in the following sections: 5 Our Business, Our Objective and Our Strategies 9 Industry Segments 12 Financial Review 37 Outlook Onex Corporation s interim financial filings, including the 2012 First Quarter MD&A and Financial Statements, and Annual Reports, Annual Information Form and Management Information Circular, are available on Onex website, or on the Canadian System for Electronic Document Analysis and Retrieval ( SEDAR ) at 4 Onex Corporation First Quarter Report 2012 References Throughout this interim MD&A, references to the Onex Partners Groups represent Onex, the limited partners of the relevant Onex Partners Fund, Onex management and, where applicable, certain other limited partners and ONCAP management. References to the ONCAP Groups represent Onex, the limited partners of the relevant ONCAP Fund and the management of Onex and ONCAP. For example, references to the Onex Partners II Group represent Onex, the limited partners of Onex Partners II, Onex management and, where applicable, certain other limited partners and ONCAP management. Forward-Looking/Safe Harbour Statements This interim MD&A may contain, without limitation, statements concerning possible or assumed future operations, performance or results preceded by, followed by or that include words such as believes, expects, potential, anticipates, estimates, intends, plans and words of similar connotation, which would constitute forward-looking statements. Forward-looking statements are not guarantees. The reader should not place undue reliance on forward-looking statements and information because they involve significant and diverse risks and uncertainties that may cause actual operations, performance or results to be materially different from those indicated in these forward-looking statements. Onex is under no obligation to update any forward-looking statements contained herein should material facts change due to new information, future events or other factors. These cautionary statements expressly qualify all forward-looking statements in this interim MD&A.

7 OUR BUSINESS, OUR OBJECTIVE AND OUR STRATEGIES OUR BUSINESS: For over 28 years, Onex has employed an active ownership approach in acquiring and building industry-leading businesses. Onex manages its own capital and that of third-party investors from around the world, including public and private pension funds, sovereign wealth funds, banks, insurance companies, and fund of funds managed by other asset managers. The Company has generated 3.3 times capital on realized, substantially realized and publicly traded investments. Active ownership approach Throughout our history, we have developed a distinctive approach to acquiring, transforming and building high-quality businesses. We are disciplined and focus on: (i) carve-outs of subsidiaries and mission-critical supply divisions from multinational corporations; (ii) operational restructurings; and (iii) build-ups in a wide variety of industries. We acquire high-quality businesses while employing prudent financial leverage and maintaining purchase price discipline. We focus on businesses with considerable cost-saving opportunities to generate EBITDA growth as well as strong free-cash-flow characteristics to pay down debt. Our goal is to build market leaders and ultimately create value for us and our investors. Typically, Onex acquires a control position in its businesses, which enables it to exercise the rights of ownership, particularly the ability to make strategic decisions. Onex does not get involved in the daily operating decisions of the businesses. Experienced team with significant depth Onex team of professionals is led by eight Managing Directors with an average of 17 years of working at the Company. Onex stability results from its ownership culture, rigorous recruiting standards and highly collegial environment. The team is supported by professionals who are dedicated to the taxation, financial control, audit, legal and reporting matters of Onex, its Funds and their operating businesses. Substantial financial resources available for future growth Onex is in excellent financial condition with no debt and approximately $1.4 billion of cash and near-cash items at March 31, In addition, we have $2.5 billion of uncalled committed third-party capital in Onex Partners III and ONCAP III available for investment in Onex-sponsored acquisitions. Strong alignment of interests We continue to believe that our success in building companies and our record of capital preservation and superior returns are direct results of the strong alignment of interests between Onex shareholders, our limited partners and the Onex management team. In addition to Onex being the largest limited partner in every fund, Onex distinctive ownership culture requires each member of the management team to have a significant ownership in Onex stock and to invest meaningfully in each operating company acquired. Onex management team: is the largest shareholder in Onex, with a combined holding of approximately 25 million shares or 22 percent; has a total cash investment in Onex current operating businesses of approximately $245 million; and is required to reinvest 25 percent of all gross carried interest and Management Investment Plans ( MIP ) distributions in Onex shares until they individually own at least one million shares and hold these shares until retirement. Onex Corporation First Quarter Report

8 OUR OBJECTIVE: Onex business objective is to create long-term value for shareholders and to have that value reflected in our share price. Our strategies to deliver value to shareholders are concentrated on acquiring, building and growing high-quality businesses and on third-party asset management. We believe that Onex has the operating philosophy, human resources, financial resources, track record and structure to continue to deliver on its objective. OUR STRATEGIES: Acquire, Build and Grow High-Quality Businesses Our investing strategy focuses on our value-oriented and active ownership approach of acquiring and building industry-leading businesses in partnership with talented management teams. We also maintain Onex as a financially strong parent company to support our businesses. A detailed discussion of Onex strategies is included in Onex Corporation s December 31, 2011 annual MD&A. The summary that follows presents performance highlights for the first three months of 2012 against those strategies. In March 2012, Onex and our investment partner, The Carlyle Group, worked with management of Allison Transmission Holdings, Inc. ( Allison Transmission ) to complete an initial public offering ( IPO ) of approximately 30.0 million shares of common stock (NYSE: ALSN), including the over-allotment option. The offering was priced at $23.00 per share compared to Onex cash cost per share of $8.44. The Onex Partners II Group sold approximately 15.0 million shares in the offering for net proceeds of $326 million, of which Onex share was $102 million. A number of Onex operating businesses raised or refinanced a total of $1.1 billion of debt in the first three months of Several of our operating businesses paid down approximately $340 million of debt during the three months ended March 31, Including realizations and distributions, Onex Partners and ONCAP s private companies, including Allison Transmission, provided Onex with returns of 11 percent and 5 percent, respectively, during the first quarter of Including the public companies, the value of all of our operating businesses in the Onex Partners and ONCAP Funds, including distributions received, increased by 11 percent in the first three months of Onex has substantial financial resources available to support its investing strategy. At March 31, 2012, Onex had: i. Approximately $1.4 billion of cash and near-cash items and no debt. ii. $2.0 billion of third-party uncalled capital available for future Onex Partners III investments. iii. $317 million of third-party uncalled capital in Onex Partners I and II, which is largely reserved for possible future funding of acquisitions by any of Onex Partners I or II s existing businesses and for management fees. iv. C$462 million of third-party uncalled capital available for future ONCAP III investments. 6 Onex Corporation First Quarter Report 2012

9 Asset Management: Manage and Grow Third-Party Capital Onex management of third-party capital has grown significantly since Onex first began acquiring businesses in In its early years, Onex would primarily use its own capital to complete acquisitions and would include third-party investors in the acquired businesses to diversify risk, cultivate strategic relationships and facilitate larger acquisitions. The 1996 purchase of Celestica was the first acquisition structured with the third-party investors providing a carried interest to Onex. Onex thus began to share in the profits of its third-party investors. Onex formalized its asset management business in 1999 when it raised its first fund, ONCAP L.P., for mid-market transactions. In 2003, the first Onex Partners fund was raised for larger transactions. While Onex expects to be the largest investor in each acquisition in order to deploy its own capital, the establishment of Onex Partners and ONCAP enabled Onex to efficiently pursue a larger acquisition program. Since 1999, Onex has raised $8.0 billion of third-party capital through the Onex Partners and ONCAP Funds. Onex currently manages $9.9 billion of third-party capital, in addition to the $4.8 billion of Onex proprietary capital. The management of third-party capital provides two significant benefits to Onex. First, Onex earns management fees on $8.5 billion of its third-party assets under management, the fee income of which substantially offsets Onex ongoing operating expenses. Second, Onex has the opportunity to share in the profits of its third-party investors through the carried interest participation. This enables Onex to enhance the return on its investment. Third-Party Capital Under Management (a) (Unaudited) ($ millions) Total Fee Generating Uncalled Commitments March 31, December 31, Change March 31, 2012 (b) 2011 (b) in Total 2012 December 31, 2011 March 31, 2012 (b) December 31, 2011 (b) Funds Onex Partners $ 7,458 $ 7,075 5% $ 6,306 $ 6,093 $ 2,333 $ 2,334 ONCAP C$ 963 C$ 956 1% C$ 830 C$ 823 C$ 476 C$ 485 Onex Credit Partners (c) $ 1,367 $ 1,055 30% $ 1,367 $ 1,055 n/a n/a (a) All data is presented at fair value. (b) Includes committed amounts from the management of Onex and ONCAP and directors based on the assumption that all of the remaining limited partners commitments are invested. (c) Onex Credit Partners is jointly controlled by Onex and management of Onex Credit Partners. Capital under management of Onex Credit Partners represents 100 percent of the third-party capital managed by Onex Credit Partners. The increase in third-party capital under management during the first quarter of 2012 was due primarily to: The March 2012 IPO value for Allison Transmission relative to the December 31, 2011 value. The creation of a CLO by Onex Credit Partners, Onex credit investing platform in March A CLO is a leveraged structured vehicle that holds a widely diversified collateral asset portfolio that is funded through the issuance of long-term debt in a series of rated tranches of secured notes and equity. Onex initially invested $32 million for equity in the Onex Credit Partners CLO and $6 million in long-term debt. The creation of Onex Credit Partners CLO increased third-party capital under management by $283 million. Onex Corporation First Quarter Report

10 At March 31, 2012, there was approximately $140 million of unrealized carried interest on Onex Partners public companies, of which Onex share was $56 million. There is a further $181 million of unrealized carried interest on Onex Partners and ONCAP s private operating companies based on the March 31, 2012 fair values, of which Onex share was $63 million. The unrealized carried interest on Onex Partners private companies at March 31, 2012 takes into consideration the significantly reduced value of the investment in Hawker Beechcraft Corporation ( Hawker Beechcraft ). The actual amount of carried interest realized by Onex will depend on the ultimate performance of each Fund. Private Equity Fund Performance The table below summarizes the performance for the Onex Partners and ONCAP Funds from inception through March 31, The gross internal rate of return ( Gross IRR ) shows the project returns achieved on the investments in the Funds including unrealized investments. The net internal rate of return ( Net IRR ) shows the returns earned by the third-party limited partners in the Funds after the payment of performance fees, management fees and expenses. Funds Performance Returns (1) Gross IRR (excluding unrealized) (2) Gross IRR (3) Net IRR Onex Partners LP 78% 57% 40% Onex Partners II LP 25% 16% 12% Onex Partners III LP (4) 7% 0% ONCAP LP (5) 43% 43% 33% ONCAP II LP (5) 57% 21% 11% ONCAP III LP (5) (4) 9% (6) (1) Performance returns are a non-gaap measure. (2) Gross IRR (excluding unrealized) includes the returns on realized, substantially realized and publicly traded investments. (3) Gross IRR includes the returns on unrealized, realized, substantially realized and publicly traded investments. (4) Onex Partners III LP and ONCAP III LP do not have realized, substantially realized or publicly traded investments. (5) Returns are calculated in Canadian dollars, the functional currency of the Fund. (6) The net IRR through March 31, 2012 is not presented because, based on net cash flows to date and net assets at March 31, 2012, the net IRR is not meaningful. Have Value Creation Reflected in Onex Share Price We seek to have the value of our investing and asset management activities reflected in our share price. These efforts are supported by a long-standing quarterly dividend and an active stock buyback program. During the first quarter, $3 million was returned to shareholders through dividends. Year-to-date through April 30, 2012, Onex repurchased 147,900 Subordinate Voting Shares under its Normal Course Issuer Bids at a total cost of $5 million, or an average purchase price of C$35.81 per share. At March 31, 2012, Onex Subordinate Voting Shares closed at C$36.71, an 11 percent increase from December 31, This compares to a 12 percent increase in the Standard & Poor s 500 Index and a 4 percent increase in the S&P/TSX Composite Index. 8 Onex Corporation First Quarter Report 2012

11 INDUSTRY SEGMENTS At March 31, 2012, Onex had eight reportable industry segments. A description of our operating businesses by industry segment, and the economic and voting ownerships of Onex, the parent company, and its Limited Partners in those businesses, is presented below. We manage our businesses and measure performance based on each operating company s individual results. Industry Segments Companies Onex & Limited Partners Economic Ownership Onex Economic/ Voting Ownership Electronics Manufacturing Services Aerostructures Healthcare Celestica Inc. (TSX/NYSE: CLS), a global provider of electronics manufacturing services (website: Onex shares held: 17.8 million (a) Spirit AeroSystems, Inc. (NYSE: SPR), the world s largest independent designer and manufacturer of aerostructures (website: Onex shares held: 6.0 million (a) Onex Partners I shares subject to a carried interest: 11.9 million Center for Diagnostic Imaging, Inc., a U.S. provider of diagnostic and therapeutic radiology services (website: Total Onex, Onex Partners I and Onex management investment at cost: $73 million, before a $42 million return of capital Onex portion at cost: $17 million, before a return of capital of $10 million Onex Partners I portion subject to a carried interest: $53 million Skilled Healthcare Group, Inc. (NYSE: SKH), an organization of skilled nursing and assisted living facilities operators in the United States (website: caregroup.com). Onex shares held: 3.5 million Onex Partners I shares subject to a carried interest: 10.7 million Carestream Health, Inc., a global provider of medical and dental imaging and healthcare information technology solutions (website: Total Onex, Onex Partners II and Onex management investment at cost: $471 million, before a $243 million return of capital Onex portion at cost: $186 million, before a return of capital of $96 million Onex Partners II portion subject to a carried interest: $266 million Res-Care, Inc., a leading U.S. provider of residential, training, educational and support services for people with disabilities and special needs (website: Total Onex, Onex Partners I, Onex Partners III and Onex management investment at cost: $204 million Onex portion: $41 million Onex Partners I portion subject to a carried interest: $61 million Onex Partners III portion subject to a carried interest: $94 million 8% (a) 8% (a) /71% 16% 4% (a) /64% 81% 19%/100% 39% 9%/89% 95% 37%/100% 98% 20%/100% (a) Onex ownership excludes shares held in connection with the Management Investment Plans. Onex Corporation First Quarter Report

12 Industry Segments Companies Onex & Limited Partners Economic Ownership Onex Economic/ Voting Ownership Financial Services Customer Care Services Metal Services Building Products Other Businesses Aircraft & Aftermarket Commercial Vehicles Industrial Products The Warranty Group, Inc., the world s largest provider of extended warranty contracts (web site: Total Onex, Onex Partners I, Onex Partners II and Onex management investment at cost: $488 million Onex portion: $154 million Onex Partners I portion subject to a carried interest: $178 million Onex Partners II portion subject to a carried interest: $137 million SITEL Worldwide Corporation, a global provider of outsourced customer care services (website: Onex investment at cost: $251 million TMS International Corp. (NYSE: TMS), a leading provider of outsourced industrial services to steel mills globally (website: Onex shares held: 9.3 million Onex Partners II shares subject to a carried interest: 13.2 million JELD-WEN Holding, inc., one of the world s largest manufacturers of interior and exterior doors, windows and related products for use primarily in the residential and light commercial new construction and remodelling markets (website: Total Onex, Onex Partners III, certain limited partners, Onex management and others investment at cost: $871 million, before a $51 million return of capital on the convertible promissory notes Onex portion at cost: $215 million, before a return of capital of $12 million on the convertible promissory notes Onex Partners III portion subject to a carried interest: $538 million Hawker Beechcraft Corporation (b), the largest privately owned designer and manufacturer of business jet, turboprop and piston aircraft (website: Total Onex, Onex Partners II and Onex management investment at cost: $537 million Onex portion: $212 million Onex Partners II portion subject to a carried interest: $303 million Allison Transmission Holdings, Inc. (b) (NYSE: ALSN), the world leader in the design and manufacture of fully-automatic transmissions for on-highway trucks and buses, off-highway equipment and military vehicles (website: Onex shares held: 23.4 million Onex Partners II shares subject to a carried interest: 33.5 million Tomkins Limited (b), an engineering and manufacturing company that produces a variety of products for the industrial, automotive and building products markets worldwide (website: Total Onex, Onex Partners III, certain limited partners, Onex management and others investment at cost: $1,219 million Onex portion: $315 million Onex Partners III and others portion subject to a carried interest: $688 million 92% 29%/100% 68% 68%/88% 60% 24%/85% 59% (a) 15% (a) /59% (a) 49% 19%/ (b) 41% 13%/ (b) 56% 14%/50% (b) (a) On an as-converted basis. (b) Onex has certain contractual rights and protections, including the right to appoint members to the Board of Directors, in respect of these entities, which are accounted for at fair value in Onex unaudited interim consolidated financial statements. 10 Onex Corporation First Quarter Report 2012

13 Industry Segments Companies Onex & Limited Partners Economic Ownership Onex Economic/ Voting Ownership Other Businesses (cont d) Gaming Cabinetry Products Tropicana Las Vegas, Inc., located directly on the Las Vegas Strip, is one of the most storied casinos in Las Vegas (website: Total Onex, Onex Partners III and Onex management investment at cost: $279 million Onex portion: $60 million Onex Partners III portion subject to a carried interest: $196 million RSI Home Products, Inc. (a), a leading manufacturer of kitchen, bathroom and home organization cabinetry sold through home centre retailers and distributors (website: Total Onex, Onex Partners II and Onex management investment at original cost: $318 million Onex portion: $126 million Onex Partners II portion subject to a carried interest: $179 million 76% 17%/76% 50% 20%/50% (a) Mid-Market Opportunities ONCAP, private equity funds focused on acquiring and building the value of mid-market companies based in North America (website: Real Estate Credit Strategies ONCAP II ONCAP II actively manages investments in EnGlobe Corp., Mister Car Wash, CiCi s Pizza, Caliber Collision Centers, BSN SPORTS, Pinnacle Renewable Energy Group and Casino ABS. Total ONCAP II, Onex, Onex management and ONCAP management investment at cost: $411 million (C$438 million) Onex portion: $190 million (C$201 million) ONCAP II portion: $186 million (C$200 million) ONCAP III ONCAP III actively manages investments in Hopkins, Casino ABS and Davis-Standard. Total ONCAP III, Onex, Onex management and ONCAP management investment at cost: $173 million (C$174 million) Onex portion : $50 million (C$51 million) ONCAP III portion : $106 million (C$106 million) Onex Real Estate Partners, a platform dedicated to acquiring and improving real estate assets in North America. Onex investment in Onex Real Estate transactions at cost: $295 million (b) Onex Credit Partners specializes in managing credit-related investments, including event-driven, long/short and market dislocation strategies. Onex investment in Onex Credit Partners at market: $458 million, of which $316 million is invested in a segregated Onex Credit Partners unleveraged senior secured loan portfolio that purchases assets with greater liquidity and $38 million is invested in a Collateralized Loan Obligation. 100% 46%/100% 100% 29%/100% 88% 88%/100% 60% (c) /50% (c) (a) Onex has certain contractual rights and protections, including the right to appoint members to the Board of Directors, in respect of this entity, which is accounted for at fair value in Onex unaudited interim consolidated financial statements. (b) Investment at cost in Onex Real Estate excludes Onex investment in Town and Country properties as Town and Country has been substantially realized and has returned all of Onex invested capital. (c) This represents Onex share of the Onex Credit Partners asset management platform. Onex Corporation First Quarter Report

14 FINANCIAL REVIEW This section discusses the significant changes in Onex unaudited interim consolidated statements of earnings and unaudited interim consolidated statements of cash flows for the three months ended March 31, 2012 compared to those for the period ended March 31, 2011 and compares Onex financial condition at March 31, 2012 to that at December 31, C O N S O L I D A T E D O P E R A T I N G R E S U L T S This section should be read in conjunction with the unaudited interim consolidated statements of earnings for the three months ended March 31, 2012 and 2011, the corresponding notes thereto and the December 31, 2011 audited annual consolidated financial statements. Critical accounting policies and estimates Significant accounting estimates The preparation of these financial statements in conformity with International Financial Reporting Standards ( IFRS ) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities and the reported amounts of revenues and expenses for the periods of the unaudited interim consolidated financial statements. Onex and its operating companies evaluate their estimates and assumptions on an ongoing basis and any revisions are recognized in the affected periods. Included in Onex unaudited interim consolidated financial statements are estimates used in determining the allowance for doubtful accounts, inventory valuation, deferred tax assets and liabilities, intangible assets and goodwill, useful lives of property, plant and equipment and intangible assets, recoverability of development costs associated with new product programs, revenue recognition under contract accounting, income taxes, investments in associates, Limited Partners Interests, stock-based compensation, pension and post-employment benefits, losses and loss adjustment expenses reserves, warranty provisions, restructuring provisions, legal contingencies and other matters. Actual results could differ materially from those estimates and assumptions. Change in accounting policy On January 1, 2012, the Company retroactively adopted a new policy on the accounting for costs associated with acquiring or renewing insurance contracts consistent with guidance issued by the Financial Accounting Standards Board ( FASB ). In accordance with IFRS 4, Insurance Contracts, an entity is permitted to change its accounting policies for insurance contracts if the change provides more relevant information to the users that is no less reliable or is more reliable and no less relevant to the users. The new guidance, which impacts the results of The Warranty Group, Inc. ( The Warranty Group ), included in Onex consolidated financial statements, amends the definition of the types of costs incurred that can be capitalized in the process of acquiring new and renewal insurance contracts and restricts the capitalization of acquisition costs to those that are related directly to the successful process of acquiring new or renewal insurance contracts. As a result of this change in accounting policy, the Company defers fewer costs related to the successful process of acquiring new or renewal insurance contracts and records lower amortization over the term of the insurance contracts. The adoption of this new accounting policy resulted in a decrease in equity of $52 million at January 1, 2011 and $53 million at December 31, The impact of the adoption of this new policy was not significant to the current or prior period unaudited interim consolidated statements of earnings or unaudited interim consolidated statements of cash flows. Note 1 to the unaudited interim consolidated financial statements provides line-by-line detail of the impact of the adoption on the unaudited interim consolidated balance sheets. 12 Onex Corporation First Quarter Report 2012

15 Recent Accounting Pronouncements Reporting Entity Standards In May 2011, the International Accounting Standards Board ( IASB ) issued a set of new standards that addresses the scope and accounting for the reporting entity. The standards are effective in Onex is currently evaluating the impact of adopting these standards on its consolidated financial statements. The following is a summary of the new requirements. IFRS 10, Consolidated Financial Statements, establishes the principles for the preparation and presentation of consolidated financial statements and replaces the current guidance in IAS 27, Consolidated and Separate Finan cial Statements, and Standing Interpretations Committee ( SIC ) 12, Consolidation Special Purpose Entities. IFRS 10 introduces a single consolidation model for all entities based on control, irrespective of the nature of the entity. IFRS 11, Joint Arrangements, sets out the principles to identify the type of joint arrangements and the accounting for those arrangements and replaces IAS 31, Interests in Joint Ventures. The standard reduces the types of joint arrangements and eliminates the use of proportionate consolidation for joint ventures. IFRS 12, Disclosure of Interests in Other Entities, provides the disclosure requirements for entities reported under IFRS 10 and IFRS 11 and replaces the disclosure requirements currently in IAS 28, Investments in Associates. IFRS 12 requires disclosure of the nature, risks and financial effects associated with the entity s interests in subsidiaries, associates, joint arrangements and unconsolidated structured entities. IAS 28, Investments in Associates and Joint Ventures, prescribes the use of the equity method of accounting for investments in associates and joint ventures and applies to all entities that are investors with joint control of, or significant influence over, an investee. IAS 28 continues to allow entities that meet certain requirements to designate their investments in associates at fair value upon initial recognition. Fair Value Measurement In May 2011, the IASB issued IFRS 13, Fair Value Measurement, that provides a single framework for measuring fair value and requires enhanced disclosures when fair value is used for measurement. The standard is effective in Onex is currently evaluating the impact of adopting this standard on its consolidated financial statements. Employee Future Benefits In June 2011, the IASB amended IAS 19, Employee Future Benefits, to change the recognition, measurement and presentation of defined benefit pension expense and to provide for additional disclosures for all employee benefits. The amendment is effective in Onex is currently evaluating the impact of the amendment on its consolidated financial statements. Presentation of Financial Statements In June 2011, the IASB amended IAS 1, Presentation of Finan cial Statements, that will require entities to separately present items in other comprehensive earnings based on whether they may be recycled to the statement of earnings in future periods. The amendment is effective for Onex beginning in The adoption of this amendment is not expected to have a significant effect on Onex consolidated financial statements. Financial Instruments In November 2009, the IASB issued IFRS 9, Financial Instruments, the first phase of a replacement for existing standard IAS 39, Financial Instruments: Recognition and Measurement. This standard introduces new requirements for the classification and measurement of financial assets and removes the need to separately account for certain embedded derivatives. This standard is effective in Onex is currently evaluating the impact of adopting this standard on its consolidated financial statements. Onex Corporation First Quarter Report

16 Variability of results Onex unaudited interim consolidated operating results may vary substantially from quarter to quarter and year to year for a number of reasons, including some of the following: the current economic environment; acquisitions or dispositions of businesses by Onex, the parent company; the change in value of stock-based compensation for both the parent company and its operating companies; changes in the market value of Onex publicly traded operating companies; changes in the fair value of Onex privately held operating companies; changes in tax legislation or in the application of tax legislation; and activities at Onex operating companies. These activities may include the purchase or sale of businesses; fluctuations in customer demand, materials and employee-related costs; changes in the mix of products and services produced or delivered; changes in the financing of the business; changes in contract accounting estimates; impairments of goodwill, intangible assets or long-lived assets; litigation; and charges to restructure operations. Given the diversity of Onex operating businesses, the associated exposures, risks and contingencies may be many and varied. of this transaction related to the MIP. Onex and management of Onex elected not to receive the carried interest to which they were otherwise entitled on the sale of shares of Allison Transmission. This decision was in consideration of the concern regarding the value of the investment in Hawker Beechcraft and the desire to not distribute carried interest that may be subject to a future claw-back. JELD-WEN In February 2012, $83 million of the amount originally invested in JELD-WEN Holding, inc. ( JELD-WEN ) by Onex was sold, at Onex original cost, to certain limited partners and others as a co-investment. Onex received proceeds of $79 million, reflecting the reduction in the cost of Onex investment as a result of JELD-WEN s repayment of a portion of its convertible notes in October In March 2012, JELD-WEN repaid $9 million of its convertible notes and less than $1 million of ac crued interest. Onex share of the repayment was approximately $2 million. After giving effect to the co-investment sale and the March 2012 convertible notes repayment, Onex investment in JELD-WEN is $203 million. Significant transactions Sale of shares of Allison Transmission In March 2012, Allison Transmission completed an initial public offering of approximately 30.0 million shares of common stock (NYSE: ALSN), including the over-allotment option, at a price of $23.00 per share. The cash cost of the shares was $8.44. Allison Transmission did not issue any new shares as part of this offering. The Onex Partners II Group sold approximately 15.0 million shares in the offering for net proceeds of $326 million, of which Onex share was $102 million. The realized pre-tax gain on the sale of shares of Allison Transmission was $200 million, of which Onex share was $62 million. Onex recorded a non-cash tax provision of $8 million on the sale, which is included in the provision for income taxes in the unaudited interim consolidated statement of earnings. No amounts were distributed on account R E V I E W O F M A R C H 3 1, U N A U D I T E D I N T E R I M C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S The discussions that follow identify those material factors that affected Onex operating segments and Onex unaudited interim consolidated results for the three months ended March 31, We will review the major line items to the unaudited interim consolidated financial statements by segment. Consolidated revenues and cost of sales Consolidated revenues were up 21 percent, or $1.2 billion, to $6.8 billion in the first quarter of 2012 compared to the same quarter of Consolidated cost of sales was up 19 percent, or $879 million, to $5.4 billion for the three months ended March 31, 2012 compared to the same period of Onex Corporation First Quarter Report 2012

17 Table 1 below reports revenues and cost of sales by industry segment for the three months ended March 31, 2012 and The percentage change in revenues and cost of sales is also shown. Revenues and Cost of Sales by Industry Segment for the Three-Month Period Ended March 31 TABLE 1 (Unaudited) ($ millions) Revenues Cost of Sales Three months ended March Change (%) Change (%) Electronics Manufacturing Services $ 1,691 $ 1,800 (6)% $ 1,559 $ 1,664 (6)% Aerostructures 1,266 1, % 1, % Healthcare 1,209 1,200 1 % % Financial Services (2)% % Customer Care Services % % Metal Services % % Building Products (a) 731 n/a 608 n/a Other (b) % % Total $ 6,817 $ 5, % $ 5,407 $ 4, % Results are reported in accordance with IFRS. These results may differ from those reported by the individual operating companies. (a) There are no reported results for JELD-WEN for the three months ended March 31, 2011 since the business began to be consolidated in October 2011 when the Onex Partners III Group acquired the business. (b) 2012 other includes Flushing Town Center, Tropicana Las Vegas, the operating companies of ONCAP II and ONCAP III and the parent company other includes Flushing Town Center, Tropicana Las Vegas, the operating companies of ONCAP II and the parent company. Electronics Manufacturing Services Celestica Inc. ( Celestica ) delivers innovative supply chain solutions globally to customers in the communications (comprised of enterprise communications and telecommunications), consumer, computing (comprised of servers and storage), and diversified (comprised of industrial, aerospace and defence, healthcare, green technology, semiconductor equipment and other) end markets. These solutions include design, supply chain management, manufacturing, engineering, complex mechanical and systems integration, order fulfillment, logistics and aftermarket services. Celestica reported a 6 percent, or $109 million, decrease in revenues in the first quarter of 2012 compared to the same quarter of Celestica s revenue decline in the quarter was in the following end markets: storage; communications; consumer; and servers. The decreases were primarily due to the slower economic environment, which drove demand weakness in most end markets. The consumer end market was also negatively impacted by program transitions with its largest customer. Partially offsetting these decreases was an increase in revenues in Celestica s diversified end market, driven primarily by new program wins and acquisitions, which contributed approximately one-half of the revenue increase in this end market. Cost of sales had a similar decrease of 6 percent, or $105 million, for the first quarter of Gross profit for the three months ended March 31, 2012 decreased 3 percent, or $4 million, from the same quarter of Aerostructures Spirit AeroSystems, Inc. ( Spirit AeroSystems ) is an aircraft parts designer and manufacturer of commercial aerostructures. Aerostructures are structural components, such as fuselages, propulsion systems and wing systems, for commercial, military and business jet aircraft. The company s revenues are substantially derived from longterm volume-based pricing contracts, primarily with The Boeing Company ( Boeing ) and Airbus, a division of the European Aeronautic Defense and Space NV ( Airbus ). The long-term financial health of the commercial airline industry has a direct and significant effect on Spirit AeroSystems commercial aircraft programs. Spirit AeroSystems reported revenues of $1.3 billion for the first three months of 2012, up 21 percent, or $216 million, from the three months ended March 31, The increase in revenues was due primarily to higher production volume as ship set deliveries to Boeing and Airbus increased during the first quarter of 2012 to meet customer Onex Corporation First Quarter Report

18 delivery schedules. Higher aftermarket volume at Spirit AeroSystems also contributed to the increase in revenues during the first quarter of 2012 compared to the same period in Cost of sales was up 14 percent, or $121 million, for the first quarter of 2012 compared to the same period last year. Cost of sales as a percentage of revenues was 80 percent in the first quarter of 2012 compared to 85 percent during the same quarter of The increase in cost of sales was due primarily to higher ship set deliveries. Offsetting the increase in cost of sales were lower unfavourable cumulative catch-up adjustments compared to the same period last year, as well as higher margins on certain programs. In addition, 2011 cost of sales included a $28 million forward-loss charge on a particular contract. Healthcare The healthcare segment revenues and cost of sales consist of the operations of Center for Diagnostic Imaging, Inc. ( CDI ), Skilled Healthcare Group, Inc. ( Skilled Healthcare Group ), Carestream Health, Inc. ( Carestream Health ) and Res-Care, Inc. ( ResCare ). During the first quarter of 2012, the healthcare segment reported a 1 percent, or $9 million, increase in consolidated revenues over the same period last year. Cost of sales increased 1 percent, or $7 million, for the three months ended March 31, 2012 compared to the same quarter last year. Table 2 provides revenues and cost of sales by operating company in the healthcare segment for the three months ended March 31, 2012 and The percentage change in revenues and cost of sales is also shown. Healthcare Revenues and Cost of Sales for the Three-Month Period Ended March 31 TABLE 2 (Unaudited) ($ millions) Revenues Cost of Sales Three months ended March Change (%) Change (%) Center for Diagnostic Imaging $ 37 $ 36 3 % $ 11 $ 11 Skilled Healthcare Group (1)% % Carestream Health % (1)% ResCare % % Total $ 1,209 $ 1,200 1 % $ 841 $ % Results are reported in accordance with IFRS. These results may differ from those reported by the individual operating companies. Skilled Healthcare Group Skilled Healthcare Group has three reportable revenue segments: long-term care services, therapy services and hospice and home health services. Long-term care services include the operation of skilled nursing and assisted living facilities. Therapy services include the company s rehabilitation services. Hospice and home health services include hospice and home health businesses. Skilled Healthcare Group s first-quarter revenues decreased 1 percent, or $3 million, to $220 million compared to the same quarter of Revenues in the long-term care services segment decreased $15 million compared to the same period in 2011 due to a reduction in Medicare recovery rates which took effect on October 1, 2011 and a lower weighted average patient per day rate. Partially offsetting the decline in revenues in the long-term care services segment was an increase in the hospice and home health services segment of $8 million due primarily to acquisitions completed during 2011 and an increase in the hospice average daily census. In addition, revenue in the therapy services segment increased by $4 million during the first quarter of 2012 as a result of an increase in volume and new thirdparty contracts, partially offset by a rate decrease which took effect January 1, Cost of sales increased 4 percent, or $8 million, in the first quarter of 2012 from the same period in Cost of sales increased during the first quarter of 2012 in the therapy services segment due to higher labour costs ($6 million) 16 Onex Corporation First Quarter Report 2012

19 and in the hospice and home health services segment due to the impact of acquisitions completed during 2011 ($7 million). Partially offsetting the increase in cost of sales was a decrease of $5 million in the long-term care services segment due to the effect of leasing five northern California facilities to a third-party operator in April Carestream Health Carestream Health provides products and services for the capture, processing, viewing, sharing, printing and storing of images and information for medical and dental applications. The company also has a non-destructive testing business, which sells x-ray film and digital radiology products to the non-destructive testing market. Carestream Health sells digital products, including computed radiography and digital radiography equipment, picture archiving and communication systems, information management solutions, dental practice management software and services, as well as traditional medical products, including x-ray film, printers and media, equipment, chemistry and services. Carestream Health has three reportable segments: Medical Film, Medical Digital and Dental. Carestream Health reported revenues of $555 million during the first quarter of 2012, up slightly from $552 million during the same period last year. The revenue increase was due primarily to increases in the Dental segment and Carestream Health s non-destructive testing business. During the quarter, cost of sales at $345 million decreased 1 percent, or $3 million, compared to the same quarter in Gross profit for the first quarter of 2012 was $210 million compared to $204 million for the same quarter in The increase in gross profit was driven by favourable price increases on film. ResCare ResCare has four reportable segments: residential services, ResCare HomeCare, youth services and workforce services. Residential services include the provision of services to individuals with developmental or other disabilities in community home settings. ResCare HomeCare provides periodic in-home care services to the elderly, as well as persons with disabilities. Youth Services consists of a variety of youth programs for youth with special needs. Workforce services is comprised of domestic job training and placement programs that assist adults who are experiencing barriers to employment. ResCare offers services to some 57,000 persons daily. ResCare reported revenues of $397 million, an $8 million, or 2 percent, increase during the three months ended March 31, 2012 compared to the same period last year. Revenues in the residential services and ResCare HomeCare segments increased by $18 million due primarily to the impact of acquisitions completed by ResCare during Partially offsetting the increase was a $10 million decline in revenues in the workforce services segment resulting from the loss of international contracts, lower referrals in certain contracts and funding cuts. Cost of sales at $297 million had an increase of $2 million, or 1 percent, in the first quarter of 2012 from the same period of 2011, driven primarily by the higher revenues reported during the quarter. Financial Services The Warranty Group revenues consist of warranty revenues, insurance premiums and administrative and marketing fees earned on warranties and service contracts for manufacturers, retailers and distributors of consumer electronics, appliances, homes and autos, as well as credit card enhancements and travel and leisure programs through a global organization. The Warranty Group s cost of sales consists primarily of the change in reserves for future warranty and insurance claims, current claims payments and underwriting profit-sharing payments. The Warranty Group reported revenues of $293 million, a 2 percent, or $6 million, decrease compared to the first quarter of Revenues decreased due primarily to lower earned premiums on the consumer products and third-party administrator business in North America and the creditor business in Europe. Partially offsetting the decrease was an increase in earned premiums on the consumer products business in Asia and Latin America. Cost of sales at $148 million was up 5 percent, or $7 million, for the first quarter of 2012 compared to the same quarter last year. The 2011 results included favourable developments on two large clients, which benefited the first-quarter results of Excluding the impact of those favourable developments, cost of sales decreased by approximately 2 percent, consistent with the decrease in revenues. Onex Corporation First Quarter Report

20 Customer Care Services SITEL Worldwide Corporation ( Sitel Worldwide ) is one of the world s largest and most diversified providers of customer care outsourcing services. The company offers its clients a wide array of services, including customer service, technical support, back office support, and customer acquisition, retention and revenue generation services. The majority of Sitel Worldwide s customer care services are inbound telephonic services; however, the company is an industry leader in providing services through other communication channels including social media, online chat, and interactive voice response. Sitel Worldwide serves a broad range of industry end markets, including technology, financial services, wireless, retail and consumer products, telecommunications, media and entertainment, energy and utilities, internet service providers, travel and transportation, insurance, healthcare and government. Sitel Worldwide s operating results are affected by the demand for the products of its customers. Sitel Worldwide reported revenues of $364 million, a 6 percent, or $21 million, increase for the first quarter of 2012 compared to the same period of Revenue from new customers and net growth with existing customers contributed $36 million to the revenue increase. Partially offsetting the revenue growth was a decrease of $9 million related to attrition of existing programs as well as a decrease of $6 million due to currency translation of foreign-based revenue. Cost of sales at $233 million increased 4 percent, or $9 million, in the first quarter of 2012 compared to the same period of 2011 due to higher revenues. Metal Services TMS International Corp. ( TMS International ) has two revenue categories: service revenue and revenue from the sale of materials. Service revenue is generated from scrap management, scrap preparation, raw materials optimization, metal recovery and sales, materials handling or product handling, slag or co-product processing, and metal recovery services and surface conditioning. Revenue from the sale of materials is mainly generated by the company s raw materials procurement business, but also includes revenue from two locations of TMS International s materials handling business. First-quarter revenues at TMS International of $747 million were up 13 percent, or $83 million, from the first quarter of An increase in North American steel production capacity utilization during the first quarter of 2012 compared to the same period of 2011 drove an increase in demand for raw materials, which contributed approximately $61 million of revenue growth from the sale of raw materials. The higher levels of steel production also directly affected TMS International s service revenues, which are typically charged to customers based on tonnes of steel produced. The company reported a $22 million increase in service revenues during the quarter due primarily to $13 million of revenue from new sites and contracts, as well as an increase in revenue from its existing customers and contracts. Cost of sales for the three months ended March 31, 2012, at $693 million, was up 13 percent, or $81 million, from the first quarter of Cost of sales for the raw materials business increased due to the same factors that contributed to the increase in revenues as TMS International procured higher volumes of raw materials. In the services business, site-level cost of sales increased approximately $17 million during the first quarter due primarily to new sites and an increased level of services. Building Products JELD-WEN is one of the world s largest manufacturers of interior and exterior doors, windows and related products for use primarily in the residential and light commercial new construction and remodelling markets. JELD-WEN manages its business through three geographic segments: North America, Europe and Australasia. During the three months ended March 31, 2012, JELD-WEN contributed $731 million in revenues and $608 million in cost of sales. There are no comparative results for the first quarter of 2011 since Onex began consolidating this business in early October 2011, the date when the Onex Partners III Group acquired the business. Other Businesses The other businesses segment primarily consists of the revenues and cost of sales of the ONCAP companies EnGlobe Corp. ( EnGlobe ), Mister Car Wash, CiCi s Pizza, Caliber Collision Centers ( Caliber Collision ), BSN SPORTS, Inc. ( BSN SPORTS ), Pinnacle Pellet, Inc. ( Pinnacle Renewable Energy Group ), Crown Amusements Ltd. ( Casino ABS ), Hopkins Manufacturing Corporation ( Hopkins ) and Davis-Standard Holdings, Inc. ( Davis-Standard ) Tropicana Las Vegas, Inc. ( Tropicana Las Vegas ), Flushing Town Center and the parent company. 18 Onex Corporation First Quarter Report 2012

21 Table 3 provides revenues and cost of sales by operating company in the other businesses segment for the three months ended March 31, 2012 and The percentage change in revenues and cost of sales is also shown. Other Businesses Revenues and Cost of Sales for the Three-Month Period Ended March 31 TABLE 3 (Unaudited) ($ millions) Revenues Cost of Sales Three months ended March Change (%) Change (%) ONCAP companies (a) $ 465 $ % $ 298 $ % Tropicana Las Vegas % % Other (b) % % Total $ 516 $ % $ 314 $ % Results are reported in accordance with IFRS. These results may differ from those reported by the individual operating companies. (a) 2012 ONCAP companies include EnGlobe, Mister Car Wash, CiCi s Pizza, Caliber Collision, BSN SPORTS, Pinnacle Renewable Energy Group, Casino ABS, Hopkins and Davis-Standard ONCAP companies include EnGlobe, Mister Car Wash, CiCi s Pizza, Caliber Collision and BSN SPORTS. (b) 2012 and 2011 other includes Flushing Town Center and the parent company. Revenues in the other businesses segment were up 77 percent, or $225 million, to $516 million for the first quarter of Cost of sales for the other businesses segment was up 93 percent, or $151 million, to $314 million for the three months ended March 31, The ONCAP companies reported a 77 percent, or $202 million, increase in revenues for the first quarter of 2012 compared to the same period of Cost of sales contributed by the ONCAP companies was up 89 percent, or $140 million, for the first quarter of The growth in revenues and cost of sales was due primarily to the inclusion of the results of Pinnacle Renewable Energy Group and Casino ABS, acquired in May 2011; Hopkins, acquired in June 2011; and Davis-Standard, acquired in December Revenues in other totalled $28 million during the first quarter of 2012 compared to $11 million in the same quarter of Included in 2012 revenues is an $8 million termination fee received by Onex, the parent company, from Allison Transmission. The fee was received upon completion of the company s IPO as consideration for the cancellation of the services agreement between Allison Transmission and Onex, the parent company. Interest expense of operating companies New investments are structured with the acquired company having sufficient equity to enable it to self-finance a significant portion of its acquisition cost with a prudent amount of debt. The level of debt is commensurate with the operating company s available cash flow, including consideration of funds required to pursue growth opportunities. It is the responsibility of the acquired operating company to service its own debt obligations. Consolidated interest expense was up $10 million, or 8 percent, to $137 million in the first quarter of 2012 from $127 million in the same quarter of First-quarter interest expense increased by $8 million due to the debt associated with the new businesses acquired by ONCAP, including Pinnacle Re newable Energy Group and Casino ABS in May 2011, Hopkins in June 2011 and Davis-Standard in December The inclusion of a full quarter of interest expense associated with the debt of the acquisition of JELD-WEN in October 2011 contributed $12 million of interest expense in the first quarter of 2012, which excludes interest on the company s promissory notes held by Onex. TMS International recorded a $12 million increase in interest expense due primarily to debt prepayment charges recorded in interest expense related to its March 2012 debt refinancing. Onex Corporation First Quarter Report

22 Partially offsetting these increases was a decline in interest expense at Carestream Health during the first quarter of During the first quarter of 2011, there was a charge of $25 million recorded by Carestream Health associated with the write-off of financing charges at the time of the company s refinancing. Increase in value of investments in associates at fair value, net Investments in associates are defined under IFRS as those investments in operating companies over which Onex has significant influence, but not control. These investments are designated, upon initial recognition, at fair value in the unaudited interim consolidated balance sheets. Both realized and unrealized gains and losses are recognized in the unaudited interim consolidated statements of earnings as a result of increases or decreases in value of investments in asso ciates at fair value. The investments that Onex determined to be investments in associates and thus recorded at fair value are Allison Transmission, Hawker Beechcraft, RSI Home Products, Inc. ( RSI ), Tomkins Limited ( Tomkins ), certain Onex Real Estate Partners investments and Cypress Insurance Group. During the first quarter of 2012, Onex recorded an increase in fair value of investments in associates of $608 million (2011 $170 million). The increase in fair value of investments in associates is due primarily to the IPO of Allison Transmission, with the offering value being above the value of the investment at December 31, Of the total fair value increase recorded during the first quarter of 2012, approximately $406 million is attributable to the limited partners in the Onex Partners Funds, which contributes to the Limited Partners Interests charge discussed on page 22 of this interim MD&A. stock options and MIP equity interests is determined using an option valuation model with the stock options impacted by the change in the market value of Onex shares and the MIP equity interests affected by the change in the fair value of Onex investments. The expense recorded by Onex, the parent company, on its stock options during the first quarter of 2012 was due primarily to the 11 percent increase in market value of Onex shares in that period compared to a 12 percent increase in the same period of Table 4 details the change in stock-based compensation by Onex operating companies and Onex, the parent company, for the three months ended March 31, 2012 and Stock-Based Compensation Expense (Unaudited) ($ millions) Three months TABLE 4 ended March Onex, the parent company, Change ($) stock options $ 49 $ 54 $ (5) Onex, the parent company, MIP equity interests Onex operating companies (1) Total $ 88 $ 88 $ Other items Onex recorded a $47 million charge for other items in the first quarter of 2012 compared to a $60 million charge for the same period of Table 5 provides a breakdown of and the change in other items for the three months ended March 31, 2012 and Other Items Stock-based compensation expense Onex recorded a consolidated stock-based compensation expense of $88 million during the first quarter of 2012 (2011 $88 million). Onex, the parent company, recorded a stock-based compensation expense of approximately $67 million in the first quarter of 2012 (2011 $66 million) related to its stock options and MIP equity interests. In accordance with IFRS, the expense recorded on these plans is determined based on the fair value of the liability at the end of each reporting period. The fair value of the Onex (Unaudited) ($ millions) Three months TABLE 5 ended March Change ($) Restructuring $ 30 $ 15 $ 15 Transition, integration and other 3 5 (2) Unrealized carried interest due to Onex and ONCAP management (16) Foreign exchange gains (4) (9) 5 Other (19) (4) (15) Total $ 47 $ 60 $ (13) 20 Onex Corporation First Quarter Report 2012

23 Restructuring Restructuring expenses are considered to be costs incurred by the operating companies to realign organizational structures or restructure manufacturing capacity to obtain operating synergies critical to building the long-term value of those businesses. Table 6 provides a breakdown of and the change in restructuring expenses (recovery) by oper ating company for the three months ended March 31, 2012 and Restructuring Expenses (Recovery) (Unaudited) ($ millions) Three months TABLE 6 ended March Change ($) Celestica $ (1) $ 6 $ (7) JELD-WEN Sitel Worldwide 1 7 (6) Other 1 2 (1) Total $ 30 $ 15 $ 15 Unrealized carried interest due to Onex and ONCAP management The General Partner of the Onex Partners and ONCAP Funds is entitled to a carried interest (20 percent) on the realized gains of third-party limited partners in each Fund. Onex is allocated 40 percent of the carried interest realized in the Onex Partners and ONCAP Funds. The Onex management team is allocated 60 percent of the carried interest realized in the Onex Partners Funds and the ONCAP management team is entitled to 60 percent of the carried interest realized in the ONCAP Funds. Onex share of the unrealized carried interest is recorded as an offset in the Limited Partners Interests amount in the consolidated statements of earnings. The unrealized carried interest due to Onex and ONCAP management represents the share of the overall unrealized gains in each of the Onex Partners and ONCAP Funds attributable to the management of Onex and ONCAP. The unrealized carried interest is calculated based on the current fair values of the underlying investments in the Funds and the overall net unrealized gains in each respective Fund determined in accordance with the limited partnership agreements. During the first quarter of 2012, a charge of $37 million (2011 $53 million) was recorded in the unaudited interim consolidated statements of earnings for an increase in management s share of carried interest due to an overall increase in the fair value of investments in the Onex Partners and ONCAP Funds. Other Onex reported consolidated other income of $19 million during the first quarter of 2012 compared to consolidated other income of $4 million in the same quarter of Other includes realized and unrealized gains on investments in securities held by the operating companies and gains on the sale of tax losses. During the first quarter of 2012, Onex sold entities, the sole assets of which were certain tax losses, to a company controlled by Mr. Gerald W. Schwartz, who is also Onex controlling shareholder. Onex received approximately C$2 million in cash for Canadian tax losses of C$20 million. The C$2 million was recorded as a gain in other items during the first quarter. Onex completed a similar transaction in May 2012, receiving C$5 million in cash for Canadian tax losses of C$53 million. The C$5 million received will be recorded as a gain in the second quarter of Onex has significant Canadian non-capital and capital losses available; however, Onex does not expect to generate sufficient taxable income to fully utilize these losses in the foreseeable future. As such, no benefit was previously recognized in the unaudited interim consolidated financial statements for the tax losses. In connection with these transactions, Deloitte & Touche LLP, an independent accounting firm retained by Onex Audit and Corporate Governance Committee, provided opinions that the values received by Onex for the tax losses were fair. The transactions were unanimously approved by Onex Audit and Corporate Governance Committee, all the members of which are independent directors. Onex Corporation First Quarter Report

24 Limited Partners Interests charge The Limited Partners Interests charge in Onex unaudited interim consolidated statements of earnings primarily represents the change in the fair value of the underlying investments in the Onex Partners and ONCAP Funds that is allocated to the limited partners and recorded as Limited Partners Interests liability on Onex consolidated balance sheets. The value of the third-party capital in the Funds is affected by the change in the fair value of the underlying investments. The Limited Partners Interests charge includes the fair value changes of both consolidated operating companies and investments in associates that are held in the Onex Partners and ONCAP Funds. During the three months ended March 31, 2012, Onex recorded a $486 million charge for Limited Partners Interests compared to a charge of $395 million in the first quarter of The majority of the charge in the first quarter of 2012 was due to an increase in value in Allison Transmission. The Limited Partners Interests charge is net of a $60 million increase (2011 $85 million) in carried interest for the first quarter of Onex share of the carried interest increase was $23 million (2011 $32 million). The ultimate amount of carried interest realized will be dependent upon the actual realizations for each Fund in accordance with the partnership agreements. Income taxes Onex reported a consolidated income tax provision of $46 million during the first quarter of 2012 compared to a $47 million income tax provision during the same period last year. During the first quarter of 2012, Onex, the parent company, reduced its future income tax liability by $24 million and recorded a corresponding amount as a recovery in income tax. This reduction was the result of lower income tax rates being applied to future income tax liabilities to bring the liability in line with current income tax rates. Partially offsetting the recovery was a non-cash tax provision of $8 million recorded by Onex, the parent company, on the sale of a portion of the shares of Allison Transmission. Earnings (loss) from continuing operations Onex reported consolidated earnings from continuing operations of $179 million in the first quarter of 2012 compared to a consolidated loss of $270 million in the same period of Table 7 shows the earnings (loss) from continuing operations by industry segment for the three months ended March 31, 2012 and Earnings (Loss) from Continuing Operations by Industry Segment (Unaudited) ($ millions) TABLE 7 Three months ended March Earnings (loss) from continuing operations: Electronics Manufacturing Services $ 43 $ 30 Aerostructures Healthcare 15 (24 ) Financial Services Customer Care Services (2) (7 ) Metal Services 8 Building Products (a) (58) Other (b) 50 (359 ) Earnings (Loss) from Continuing Operations $ 179 $ (270) (a) There are no reported results for JELD-WEN for the three months ended March 31, 2011 since the business began to be consolidated in October 2011 when the Onex Partners III Group acquired the business. (b) 2012 other includes the consolidated earnings of Tropicana Las Vegas, the operating companies of ONCAP II and ONCAP III, Flushing Town Center, Onex Credit Partners CLO and the parent company. In addition, consolidated earnings include the changes in fair value of Allison Transmission, Hawker Beechcraft, Tomkins, RSI and certain Onex Real Estate Partners investments other includes the consolidated earnings of Tropicana Las Vegas, the operating companies of ONCAP II, Flushing Town Center and the parent company. In addition, consolidated earnings include the changes in fair value of Allison Transmission, Hawker Beechcraft, Tomkins, RSI and certain Onex Real Estate Partners investments. 22 Onex Corporation First Quarter Report 2012

25 Earnings from continuing operations in the other segment totalled $50 million during the first quarter of 2012 (2011 loss of $359 million). Table 8 shows the major components of the earnings (loss) recorded in the other segment for the quarter ended March 31, 2012 and Earnings from discontinued operations Onex did not record any earnings from discontinued operations during the first quarter of 2012 compared to earnings from discontinued operations of $65 million ($0.34 per share) during the same quarter of (Unaudited) ($ millions) TABLE 8 Three months ended March Earnings (loss) from continuing operations other: Limited Partners Interests charge $ (486) $ (395) Stock-based compensation expense (70) (67 ) Unrealized carried interest due to Onex and ONCAP management (37) (53 ) Increase in fair value of investments in associates Other 35 (14) Earnings (Loss) from Continuing Operations Other $ 50 $ (359) Table 9 presents the earnings (loss) from continuing operations attributable to equity holders of Onex Corporation and non-controlling interests for the three months ended March 31, 2012 and Earnings (Loss) from Continuing Operations (Unaudited) ($ millions) TABLE 9 Three months ended March Earnings (loss) from continuing operations attributable to: Equity holders of Onex Corporation $ 60 $ (340) Non-controlling interests Table 10 presents the earnings from discontinued operations for the three months ended March 31, 2012 and Earnings from Discontinued Operations (Unaudited) ($ millions) TABLE 10 Three months ended March Earnings from discontinued operations: EMSC $ $ 36 Husky International 29 Total $ $ 65 In May 2011, the Onex Partners I Group completed the sale of its remaining 13.7 million shares of Emergency Medical Services Corporation ( EMSC ). The sale was part of an offer made for all outstanding shares of EMSC. As a result of the sale, the first quarter 2011 operations of EMSC are presented as discontinued in the unaudited interim consolidated statements of earnings and cash flows. In June 2011, the Onex Partners I Group and Onex Partners II Group completed the sale of Husky Inter national Ltd. ( Husky International ). The operations of Husky International have been restated in the unaudited interim consolidated statements of earnings and cash flows and reported as discontinued for the quarter ended March 31, 2011 as a result of the sale. Earnings (Loss) from Continuing Operations $ 179 $ (270) The non-controlling interests share of the earnings (loss) from continuing operations represents the share of earnings of shareholders, other than Onex and its thirdparty limited partners in its Funds. For example, Spirit AeroSystems public shareholders share of the net earnings in that business would be reported in the non-controlling interests line. Onex Corporation First Quarter Report

26 Consolidated net earnings (loss) Onex recorded consolidated net earnings of $179 million in the first quarter of 2012 compared to a consolidated net loss of $205 million in the same quarter of Table 11 shows the net earnings (loss) by industry segment for the three months ended March 31, 2012 and Consolidated Net Earnings (Loss) by Industry Segment (Unaudited) ($ millions) TABLE 11 Three months ended March Net earnings (loss) from continuing operations: Electronics Manufacturing Services $ 43 $ 30 Aerostructures Healthcare 15 (24) Financial Services Customer Care Services (2) (7) Metal Services 8 Building Products (a) (58) Other (b) 50 (359) Earnings from discontinued operations 65 Consolidated Net Earnings (Loss) $ 179 $ (205) (a) There are no reported results for JELD-WEN for the three months ended March 31, 2011 since the business began to be consolidated in October 2011 when the Onex Partners III Group acquired the business. (b) 2012 other includes the consolidated earnings of Tropicana Las Vegas, the operating companies of ONCAP II and ONCAP III, Flushing Town Center, Onex Credit Partners CLO and the parent company. In addition, consolidated earnings include the changes in fair value of Allison Transmission, Hawker Beechcraft, Tomkins, RSI and certain Onex Real Estate Partners investments other includes the consolidated earnings of Tropicana Las Vegas, the operating companies of ONCAP II, Flushing Town Center and the parent company. In addition, consolidated earnings include the changes in fair value of Allison Transmission, Hawker Beechcraft, Tomkins, RSI and certain Onex Real Estate Partners investments. Table 12 presents the net earnings (loss) attributable to equity holders of Onex Corporation and non-controlling interests. Net Earnings (Loss) (Unaudited) ($ millions) TABLE 12 Three months ended March Net earnings (loss) attributable to: Equity holders of Onex Corporation $ 60 $ (300) Non-controlling interests Net Earnings (Loss) $ 179 $ (205) Table 13 presents the net earnings (loss) per subordinate voting share of Onex Corporation. Earnings (Loss) per Subordinate Voting Share (Unaudited) ($ per share) TABLE 13 Three months ended March Basic and Diluted: Continuing operations $ 0.52 $ (2.87) Discontinued operations 0.34 Net Earnings (Loss) $ 0.52 $ (2.53) Other comprehensive earnings Other comprehensive earnings (loss) represents the accumulated unrealized gains or losses, all net of income taxes, related to certain available-for-sale securities, cash flow hedges and foreign exchange gains or losses on foreign self-sustaining operations. During the three months ended March 31, 2012, Onex reported other comprehensive earnings of $80 million (2011 $52 million), primarily due to favourable currency translation adjustments on foreign operations. Other comprehensive earnings for the three months ended March 31, 2011 included recognition of $16 million of accumulated other comprehensive income from discontinued operations. 24 Onex Corporation First Quarter Report 2012

27 S U M M A R Y Q U A R T E R L Y I N F O R M A T I O N Table 14 summarizes Onex key consolidated financial information for the last eight quarters. TABLE 14 (Unaudited) ($ millions except per share amounts) (1) March Dec. Sept. June March Dec. (1) Sept. (1) June (1) Revenues $ 6,817 $ 6,758 $ 6,008 $ 6,229 $ 5,647 $ 5,402 $ 4,788 $ 4,894 Earnings (loss) from continuing operations $ 179 $ (113) $ 190 $ 105 $ (270) $ (98) $ (21) $ 143 Net earnings (loss) $ 179 $ (113) $ 184 $ 1,761 $ (205) $ (4) $ 35 $ 174 Net earnings (loss) attributable to Equity holders of Onex Corporation $ 60 $ (186) $ 146 $ 1,666 $ (300) $ (120) $ (40) $ 100 Non-controlling Interests Net earnings (loss) $ 179 $ (113) $ 184 $ 1,761 $ (205) $ (4) $ 35 $ 174 Earnings (loss) per Subordinate Voting Share of Onex Corporation Earnings (loss) from continuing operations $ 0.52 $ (1.61) $ 1.29 $ 0.15 $ (2.87) $ (1.56) $ (0.60) $ 0.71 Earnings (loss) from discontinued operations (0.04) Net earnings (loss) $ 0.52 $ (1.61) $ 1.25 $ $ (2.53) $ (1.01) $ (0.34) $ 0.83 (1) 2010 results have not been restated for the change in accounting policy adopted on January 1, 2012, as described in note 1 to the unaudited interim consolidated financial statements. Onex quarterly consolidated financial results do not follow any specific trends due to the acquisitions or dispositions of businesses by Onex, the parent company, and varying business activities and cycles at Onex operating companies. Onex Corporation First Quarter Report

28 C O N S O L I D A T E D F I N A N C I A L P O S I T I O N Consolidated assets Consolidated assets totalled $30.4 billion at March 31, 2012 compared to $29.4 billion at December 31, Onex consolidated assets at March 31, 2012 increased from December 31, 2011 due primarily to: the inclusion of the investments held in the asset portfolio of Onex Credit Partners CLO established in March 2012; and the increase in fair value of investments in associates held in the Onex Partners funds during the first quarter of Asset Diversification by Industry Segment CHART 1 (Unaudited) ($ millions) E L E C T R O N I C S M A N U FA C T U R I N G S E R V I C E S A E R O - S T R U C T U R E S H E A LT H C A R E (a) 6,162 F I N A N C I A L S E R V I C E S C U S T O M E R C A R E S E R V I C E S M E TA L S E R V I C E S B U I L D I N G P R O D U C T S (b) O T H E R (c) 8,873 8,170 T O TA L 30,407 29,377 28,053 5,228 4,978 4,975 4,904 4,864 4,808 7,501 4,175 4,194 2,955 2,970 3,014 1,029 1,045 2,605 2, Mar Dec 11 1 Jan Mar Dec 11 1 Jan Mar Dec 11 1 Jan Mar Dec 11 1 Jan Mar Dec 11 1 Jan Mar Dec 11 1 Jan Mar 31 Dec Mar Dec 11 1 Jan Mar Dec 11 1 Jan 11 (a) January 1, 2011 includes the consolidated operations of EMSC, which was sold in May (b) JELD-WEN acquired in early October (c) 2012 other includes the consolidated operations of Flushing Town Center, the operating companies of ONCAP II and ONCAP III, Tropicana Las Vegas, Onex Credit Partners CLO and the parent company. In addition, the consolidated assets include the investments in Allison Transmission, Hawker Beechcraft, RSI, certain Onex Real Estate Partners investments and Tomkins at fair value. December 2011 other includes the consolidated operations of Flushing Town Center, the operating companies of ONCAP II and ONCAP III, Tropicana Las Vegas and the parent company. In addition, the consolidated assets include the investments in Allison Transmission, Hawker Beechcraft, RSI, certain Onex Real Estate Partners investments and Tomkins at fair value. January 2011 other includes the consolidated operations of Flushing Town Center, Husky International (sold in June 2011), the operating companies of ONCAP II, Tropicana Las Vegas and the parent company. In addition, the consolidated assets include the investments in Allison Transmission, Hawker Beechcraft, RSI, certain Onex Real Estate Partners investments and Tomkins at fair value. 26 Onex Corporation First Quarter Report 2012

29 Consolidated long-term debt, without recourse to Onex Corporation It has been Onex policy to preserve a financially strong parent company that has funds available for new acquisitions and to support the growth of its operating companies. This policy means that all debt financing is within the operating companies and each company is required to support its own debt without recourse to Onex Corporation or other Onex operating companies. The financing arrangements of each operating company typically contain certain restrictive covenants, which may include limitations or prohibitions on additional indebtedness, payment of cash dividends, redemption of capital, capital spending, making of investments, and acquisitions and sales of assets. In addition, the operating companies that have outstanding debt must meet certain financial covenants. Changes in business conditions relevant to an operating company, including those resulting from changes in financial markets and economic conditions generally, may result in non-compliance with certain covenants by that operating company. Total consolidated long-term debt (consisting of the current and long-term portions of long-term debt, net of financing charges) was $7.2 billion at March 31, 2012 compared to $7.0 billion at December 31, In March 2012, TMS International entered into a new senior secured term loan for an aggregate principal amount of $300 million. The offering price was 99 percent of par to yield 6.15 percent to maturity. The new senior secured term loan bears interest at LIBOR (subject to a floor of 1.25 percent) plus a margin of 4.5 percent and matures in March The senior secured term loan agreement also permits TMS International to incur incremental borrowings in an aggregate principal amount equal to the greater of i) $75 million; and ii) an amount such that, after giving effect to such incremental borrowings, TMS International will be in pro forma compliance with a total net first lien senior secured leverage ratio of 2.75 to 1.0. Incremental borrowings are uncommitted and the availability thereof will depend on market conditions at the time TMS International seeks to incur such borrowings. Substantially all of TMS International s assets are pledged as collateral under the new senior secured term loan. The proceeds of the new senior secured term loan, along with cash and a draw on TMS International s existing asset-based revolving credit facility, were used primarily to repay the existing term loan, which was scheduled to mature in January 2014, and to discharge and redeem TMS International s unsecured senior subordinated notes, which were scheduled to mature in February At March 31, 2012, the new senior secured term loan with $300 million outstanding was recorded net of the unamortized discount of $3 million. In March 2012, Onex Credit Partners established its first CLO. Onex Credit Partners CLO issued class A-1 and A-2 senior secured notes and class B, C and D secured deferrable notes, all of which mature in March 2023, for an aggregate principal amount of $295 million. The class A-1 and A-2 notes were offered at an aggregate principal amount of $234 million and bear interest at a rate of LIBOR plus a margin of 1.5 percent to 2.9 percent. The class B, C and D notes were offered at an aggregate principal amount of $61 million. The weighted average offering price to purchasers of the notes was 88.9 percent of par to yield a weighted average spread above LIBOR of 6.27 percent to maturity. The notes bear interest at a rate of LIBOR plus a margin of 3.5 percent to 5.5 percent. Interest on all classes of notes is payable quarterly beginning in September Onex initially invested $38 million in Onex Credit Partners CLO, consisting of $6 million of class D secured deferrable notes and $32 million of equity. The proceeds from the issuance of the notes were used primarily to purchase the asset portfolio held by Onex Credit Partners CLO. The asset portfolio serves as the collateral for the notes and consists of cash and cash equivalents and corporate loans. At March 31, 2012, $295 million of principal plus accrued interest was outstanding under the notes, of which $7 million was held by Onex. The notes are recorded net of the unamortized discount of $7 million, of which Onex share was $1 million. In April 2012, ResCare entered into a new $375 million senior secured credit facility. The senior secured credit facility consists of a $200 million revolving credit facility and a $175 million term loan. Both the revolving credit facility and term loan bear interest at LIBOR plus a margin of 2.75 percent and mature in April The proceeds from the new facility were used to repay ResCare s former senior secured term loan, retire the former senior secured revolving facility and pay fees and expenses associated with the transaction. At March 31, 2012, nil was outstanding under the existing senior secured revolving credit facility, and $168 million of the senior secured term loan was outstanding. In April 2012, Skilled Healthcare Group amended its credit facility agreement to increase the size of its term Onex Corporation First Quarter Report

30 loan to $460 million from $360 million. As part of the refinancing, the interest rate on the existing portion of the term loan was increased to LIBOR (subject to a floor of 1.5 percent) plus a margin of 5.25 percent, which corresponds to the interest rate on the additional $100 million of borrowings available to the company as a result of the refinancing. The interest rate on the company s existing revolving credit facility was also amended to LIBOR plus a margin of up to 4.5 percent or a base rate plus a margin of up to 3.5 percent. There is no longer a LIBOR floor on the revolving credit facility. The term loan and revolving credit facility continue to have maturity dates in 2016 and 2015, respectively. In May 2012, the proceeds from the increase in the term loan will be used to redeem the existing unsecured senior subordinated notes, which are scheduled to mature in At March 31, 2012, nil was outstanding under the existing revolving credit facility, $341 million of the term loan was outstanding and $130 million of the unsecured senior subordinated notes were outstanding. In April 2012, Sitel Worldwide completed an offering of $200 million aggregate principal amount of 11 percent senior secured notes due in The offering price to purchasers of the notes was 96 percent of par to yield 12 percent to maturity. The net proceeds of the notes offering were used to repay the indebtedness outstanding under the portion of the non-extended term loan which was scheduled to mature in 2014 and to repay the majority of the outstanding balance under the company s revolving credit facility. As part of the transaction, Sitel Worldwide extended the maturity on $20 million, or 24 percent, of commitments for its revolving credit facility from January 2013 to January In addition, the credit facility was amended to lessen restrictions on certain covenant levels. At March 31, 2012, $30 million was outstanding under the revolving credit facility and $355 million of the term loan was outstanding. In April 2012, Spirit AeroSystems entered into a new credit agreement consisting of a $550 million term loan and a $650 million revolving credit facility. The term loan bears interest at LIBOR (subject to a floor of 0.75 percent) plus a margin of 3 percent. The margin over LIBOR may be decreased to 2.75 percent in 2013 if certain performance targets are met. The term loan is due in 2019 and replaces the existing term loan, which was scheduled to mature in two tranches in 2013 and The revolving credit facility bears interest at LIBOR plus a margin of up to 2.5 percent depending on the company s leverage ratio. The revolving credit facility is due in 2017 and replaces the existing revolving credit facility, which was scheduled to mature in Substantially all of Spirit AeroSystems assets are pledged as collateral under the new credit agreement. The proceeds from the term loan, along with approximately $10 million of cash, were used primarily to repay Spirit Aero Sys tems existing term loan. At March 31, 2012, nil and $560 million were outstanding under the existing revolving credit facility and term loan, respectively. Table 15 details the aggregate debt maturities as at March 31, 2012 for Onex consolidated operating companies and investments in associates for each of the years up to 2018 and in total thereafter. As investments in associates are included in the table, the total amount is in excess of the reported consolidated debt. As the following table illustrates, most of the maturities occur in 2014 and thereafter excluding the debt of Hawker Beechcraft, as discussed on the following page. Debt Maturity Amounts by Year TABLE 15 (Unaudited) ($ millions) Thereafter Total Consolidated operating companies (a) $ 458 $ 438 $ 1,040 $ 162 $ 1,389 $ 2,704 $ 348 $ 1,314 $ 7,853 Investments in associates 2, , , , ,661 Total $ 2,982 $ 507 $ 2,909 $ 644 $ 2,840 $ 3,463 $ 1,383 $ 1,786 $ 16,514 (a) Includes debt amounts of subsidiaries held by Onex, the parent company, and are gross of financing fees. Excludes preferred shares of Carestream Health and The Warranty Group recorded as long-term debt under IFRS. In March 2012, Allison Transmission (included in the table above in investments in associates) amended the credit facility that governs its term loan. The amendment extends 28 Onex Corporation First Quarter Report 2012 the maturity date on $801 million of its term loan from August 2014 to August Borrowings under the extended term loan bear interest at a rate of LIBOR plus a margin of 3.5 percent.

31 At March 31, 2012, all of Hawker Beechcraft s outstanding debt, totalling approximately $2.5 billion, has been classified as current due to violations of the company s debt covenants and in consideration of a forbearance agreement period which expires on June 29, Hawker Beechcraft s debt is included in the investments in associates line in table 15. The Hawker Beechcraft debt is without recourse to Onex. Limited Partners Interests Limited Partners Interests liability represents the fair value of third-party invested capital in the Onex Partners and ONCAP Funds. The Limited Partners Interests liability is affected by the change in the fair value of the underlying investments in the Onex Partners and ONCAP Funds, the impact of the unrealized carried interest, as well as any contributions by and distributions to thirdparty limited partners in those Funds. At March 31, 2012, Limited Partners Interests liability (consisting of the current and long-term portions of Limited Partners Interests) totalled $5.3 billion compared to $5.0 billion at December 31, Table 16 shows the change in Limited Partners Interests from January 1, 2011 to March 31, Limited Partners Interests TABLE 16 (Unaudited) ($ millions) Balance January 1, 2011 $ 5,650 Limited Partners Interests charge 627 Contributions by Limited Partners 932 Distributions to Limited Partners (2,229) Balance December 31, ,980 Limited Partners Interests charge 486 Contributions by Limited Partners 92 Distributions to Limited Partners (229) The current portion of the Limited Partners Interests is $6 million at March 31, 2012 and relates to the redemption by JELD-WEN of a portion of the convertible notes and payment of accrued interest, net of an expense contribution of $1 million from the limited partners. The net amount was distributed to the limited partners of Onex Partners III in early April The Limited Partners Interests liability increased by $92 million for contributions made in the three months ending March 31, 2012, which consisted primarily of amounts received from (i) certain limited partners of Onex Partners III and others for their investment in the JELD-WEN co-investment; and (ii) the limited partners of ONCAP funds for management fees and partnership expenses. Included in the contributions for the year ended December 31, 2011 was $932 million primarily from the limited partners of (i) Onex Partners III for their investment in JELD-WEN; (ii) ONCAP II for their investments in Pinnacle Renewable Energy Group and Casino ABS; and (iii) ONCAP III for their investments in Hopkins, Casino ABS and Davis-Standard. During the first three months of 2012, the Limited Partners Interests liability was reduced by $229 million primarily for the distribution to the limited partners of Onex Partners II for their share of the proceeds on the sale of a portion of the shares of Allison Transmission. The $2.2 billion of distributions that reduced the Limited Partners Interests liability for the year ended December 31, 2011 were comprised primarily of the proceeds from the sales of EMSC and Husky International. At March 31, 2012, the total unrealized carried interest netted against the Limited Partners Interests on Onex consolidated balance sheet was $321 million, of which Onex share was $119 million. The Limited Partners Interests charge recorded for the quarter ended March 31, 2012 is discussed in detail on page 22 of this interim MD&A. Balance March 31, ,329 Current portion of Limited Partners Interests (1) (6) Long-term portion of Limited Partners Interests $ 5,323 (1) Included in accounts payable and accrued liabilities. Onex Corporation First Quarter Report

32 Equity Total equity was $5.9 billion at March 31, 2012 compared to $5.6 billion at December 31, 2011 after giving effect to the impact of the adoption of a new accounting policy, as discussed on page 12 of this interim MD&A. Table 17 provides a reconciliation of the change in equity from December 31, 2011 to March 31, Shares outstanding At April 30, 2012, Onex had 114,972,038 Subordinate Voting Shares issued and outstanding. Table 18 shows the change in the number of Subordinate Voting Shares outstanding from December 31, 2011 to April 30, Change in Subordinate Voting Shares Outstanding Change in Equity TABLE 18 (Unaudited) TABLE 17 (Unaudited) ($ millions) Balance December 31, 2011 $ 5,682 Change in accounting policy (1) (53) Regular dividends declared (3) Shares repurchased and cancelled (1) Investments by shareholders other than Onex 29 Distributions to non-controlling interests (2) Repurchase of shares of operating companies (60) Net earnings for the period 179 Other comprehensive income for the period 80 Equity as at March 31, 2012 $ 5,851 (1) Impact of the adoption of a new accounting policy related to insurance contracts, as discussed on page 12 of this interim MD&A. Onex unaudited interim consolidated statements of equity and unaudited interim consolidated statements of comprehensive earnings also show the changes to the components of equity for the three months ended March 31, 2012 and Subordinate Voting Shares outstanding at December 31, ,117,316 Shares repurchased under Onex Normal Course Issuer Bids (147,900) Issue of shares Dividend Reinvestment Plan 2,622 Subordinate Voting Shares outstanding at April 30, ,972,038 Onex also has 100,000 Multiple Voting Shares outstanding, which have a nominal paid-in value reflected in Onex unaudited interim consolidated financial statements. Note 7 to the unaudited interim consolidated financial statements provides additional information on Onex share capital. There was no change in the Multiple Voting Shares outstanding during the first three months of Dividend Reinvestment Plan Onex Dividend Reinvestment Plan enables Canadian shareholders to reinvest cash dividends to acquire new Subordinate Voting Shares of Onex at a market-related price at the time of reinvestment. During the period from January 1, 2012 to April 30, 2012, Onex issued 2,622 Subordinate Voting Shares at an average cost of C$36.22 per Subordinate Voting Share, creating a cash savings of less than C$1 million. 30 Onex Corporation First Quarter Report 2012

33 Stock Option Plan At March 31, 2012, Onex had 13,325,105 options outstanding to acquire Subordinate Voting Shares, of which 11,182,798 options were vested and 10,659,715 of those vested options were exercisable. During the first quarter of 2012, 709,400 options were surrendered at a weighted average exercise price of C$17.87 for aggregate cash consideration of C$14 million, and 1,993 options expired. Normal Course Issuer Bids Onex had Normal Course Issuer Bids (the Bids ) in place during the first quarter of 2012 that enable it to repurchase up to 10 percent of its public float of Subordinate Voting Shares during the period of the relevant Bid. Onex believes that it is advantageous to Onex and its shareholders to continue to repurchase Onex Subordinate Voting Shares from time to time when the Subordinate Voting Shares are trading at prices that reflect a significant discount to their value as perceived by Onex. On April 16, 2012, Onex renewed its Normal Course Issuer Bid ( NCIB ) following the expiry of its previous NCIB on April 13, Under the new NCIB, Onex is permitted to purchase up to 10 percent of its public float in its Subordinate Voting Shares, or 8,861,260 Sub or dinate Voting Shares. Onex may purchase up to 34,051 Subordinate Voting Shares during any trading day, being 25 percent of its average daily trading volume for the six-month period ended March 31, Onex may also purchase Subordinate Voting Shares from time to time under the Toronto Stock Exchange s block purchase exemption, if available, under the new NCIB. The new NCIB commenced on April 16, 2012 and will conclude on the earlier of the date on which purchases under the NCIB have been completed and April 15, A copy of the Notice of Intention to make the Normal Course Issuer Bid filed with the Toronto Stock Exchange is available at no charge to shareholders by contacting Onex. Under the previous NCIB that expired on April 13, 2012, Onex repurchased 3,210,892 Subordinate Voting Shares at a total cost of C$107 million, or an average purchase price of C$33.27 per share. For the four months ended April 30, 2012, Onex repurchased 147,900 Subordinate Voting Shares under its Normal Course Issuer Bids for a total cost of $5 million (C$5 million), or an average cost per share of C$ Deferred Share Unit Plans In early 2012, Onex issued 65,832 Management Deferred Share Units ( MDSUs ) to management having an aggregate value, at the date of grant, of $2 million in lieu of that amount of cash compensation for Onex 2011 fiscal year. At March 31, 2012, there were 509,322 MDSUs outstanding. Forward agreements were entered into to hedge Onex exposure to changes in the value of the MDSUs. Management of capital Onex considers the capital it manages to be the amounts it has in cash and cash equivalents and near-cash investments, and the investments made by it in the operating businesses, Onex Real Estate Partners and Onex Credit Partners. Onex also manages the third-party capital invested in the Onex Partners and ONCAP Funds. Onex objectives in managing capital are to: preserve a financially strong parent company with appropriate liquidity and no, or a limited amount of, debt so that it has funds available to pursue new acquisitions and growth opportunities, as well as support the building of its existing businesses. Onex does not generally have the ability to draw cash from its operating businesses. Accordingly, maintaining adequate liquidity at the parent company is important; achieve an appropriate return on capital invested commensurate with the level of risk taken on; build the long-term value of its operating businesses; control the risk associated with capital invested in any particular business or activity. All debt financing is within the operating businesses and each company is required to support its own debt. Onex Corporation does not guarantee the debt of the operating businesses and there are no cross-guarantees of debt between the operating businesses; and have appropriate levels of committed third-party capital available to invest along with Onex capital. This enables Onex to respond quickly to opportunities and pursue acquisitions of businesses of a size it could not achieve using only its own capital. The management of thirdparty capital also provides management fees to Onex and the ability to enhance Onex returns by earning a carried interest on the profits of third-party participants. Onex Corporation First Quarter Report

34 At March 31, 2012, Onex, the parent company, had approximately $1.1 billion of cash on hand and $316 million of near-cash items at market value. Onex, the parent company, has a conservative cash management policy that limits its cash investments to short-term high-rated money market instruments. This policy is driven toward maintaining liquidity and preserving principal in all money market investments. At March 31, 2012, Onex had access to $2.8 billion of uncalled committed third-party capital for acquisitions primarily through Onex Partners III ($2.0 billion) and ONCAP III (C$462 million). The strategy for risk management of capital did not change in the first three months of Non-controlling interests Non-controlling interests in equity in Onex unaudited interim consolidated balance sheet as at March 31, 2012 primarily represent the ownership interests of shareholders, other than Onex and its third-party limited partners in its Funds, in Onex controlled operating companies. The non-controlling interests balance at March 31, 2012 was $4.0 billion, largely unchanged from December 31, L I Q U I D I T Y A N D C A P I T A L R E S O U R C E S This section should be read in conjunction with the unaudited interim consolidated statements of cash flows and the corresponding notes thereto. Table 19 summarizes the major consolidated cash flow components for the first three months of 2012 and Major Cash Flow Components (Unaudited) ($ millions) TABLE 19 Three months ended March Cash from operating activities $ 263 $ 41 Cash used in financing activities $ (119) $ (75) Cash used in investing activities $ (212) $ (232) Consolidated cash and cash equivalents held by continuing operations $ 2,384 $ 1,808 Cash from operating activities Table 20 provides a breakdown of cash from operating activities by cash generated from operations and changes in non-cash working capital items, other operating activities, warranty reserves and premiums and cash flows from operating activities of discontinued operations for the three months ended March 31, 2012 and Components of Cash from (used in) Operating Activities (Unaudited) ($ millions) TABLE 20 Three months ended March Cash generated from operations $ 559 $ 492 Changes in non-cash working capital items: Accounts receivable (163) (75) Inventories (254) (352) Other current assets Accounts payable, accrued liabilities and other current liabilities 49 (143) Decrease in cash due to changes in non-cash working capital items (316) (552) Increase in other operating activities and warranty reserves and premiums Cash flows from operating activities of discontinued operations 86 Cash from Operating Activities $ 263 $ Onex Corporation First Quarter Report 2012

35 Cash generated from operations includes net earnings (loss) before interest and income taxes, adjusted for cash taxes and items not affecting cash and cash equivalents. The significant changes in non-cash working capital items in the first quarter of 2012 were: a $163 million increase in accounts receivable, primarily from Spirit AeroSystems due to higher revenues; and a $254 million increase in inventories primarily due to an increase in production at Spirit AeroSystems. Cash used in financing activities Cash used in financing activities was $119 million for the first three months of 2012 compared to cash used in financing activities of $75 million for the same period of Cash used in financing activities for the three months ended March 31, 2012 included (i) $231 million of distributions primarily to the limited partners of Onex Partners II on the proceeds from the portion of Allison Transmission sold in the IPO; (ii) $97 million of cash interest paid; and (iii) $60 million of cash used primarily by Celestica for purchases of its shares in the open market. Partially offsetting these were: $201 million of net new long-term debt primarily from the note issuance of Onex Credit Partners CLO; and $92 million of cash received primarily from certain limited partners of Onex Partners III and others for their co-investment in JELD-WEN. For the three months ended March 31, 2011, cash used in financing activities was $75 million. Included in cash used in financing activities for the first quarter of 2011 was (i) $417 million of distributions principally to the limited partners of Onex Partners II and III and ONCAP II; (ii) $75 million of cash interest paid; and (iii) $28 million of cash used in part by Celestica and EnGlobe for purchases of their shares in the open market. Cash used in investing activities Cash used in investing activities totalled $212 million for the three months ended March 31, 2012 compared to cash used in investing activities of $232 million for the same period of Cash used in investing activities was primarily due to net purchases of investments and securities of $357 million mainly by Onex Credit Partners CLO and The Warranty Group and $166 million for the purchase of property, plant and equipment. This was partially offset by cash proceeds of $326 million received on the sale of shares of Allison Transmission. Cash used in investing activities totalled $232 million for the three months ended March 31, 2011 and consisted primarily of cash expenditures of $121 million for property, plant and equipment by Onex operating companies, as well as $47 million of net purchases of investments and securities by The Warranty Group. Consolidated cash resources At March 31, 2012, consolidated cash held by continuing operations was $2.4 billion, unchanged from December 31, The major components of consolidated cash at March 31, 2012 were: approximately $1.1 billion of cash on hand at Onex, the parent company; and approximately $650 million of cash at Celestica. Onex believes that maintaining a strong financial position at the parent company with appropriate liquidity enables the Company to pursue new opportunities to create longterm value and support Onex existing operating companies. In addition to the approximate $1.1 billion of cash at the parent company at March 31, 2012, there was $316 million of near-cash items that are invested in a segregated unleveraged fund managed by Onex Credit Partners. Partially offsetting these were: a change of $272 million in restricted cash that was distributed to the limited partners in early 2011; and net new debt of $205 million primarily with Carestream Health. Onex Corporation First Quarter Report

36 Table 21 provides a reconciliation of the change in cash at Onex, the parent company, from December 31, 2011 to March 31, Change in Cash at Onex, the Parent Company TABLE 21 (Unaudited) ($ millions) Cash on hand at December 31, 2011 $ 990 Sale of shares of Allison Transmission 102 JELD-WEN, sale to co-investment and partial note repayment 81 Investment in Onex Credit Partners CLO (38) Onex share repurchases (1) Other, net, including dividends, management fees and operating costs (66) Cash on hand at March 31, 2012 $ 1,068 Recent events Certain operating companies completed refinancing of debt subsequent to March 31, 2012, as described in note 5 to the unaudited interim consolidated financial statements. Spirit AeroSystems On April 14, 2012, Spirit AeroSystems Wichita, Kansas facility was hit with a tornado, which caused significant structural damage to several buildings and disruption of utilities. The company immediately implemented its emergency management and disaster recovery plans, and initially suspended operations to ensure the safety of its employees, undertake a comprehensive damage evaluation, and develop a plan for systematically resuming production. Spirit AeroSystems production equipment, work-in-process and capabilities generally remained intact, and the company resumed production on April 23, Spirit AeroSystems main supply agreement with Boeing, which covers production of the Boeing 737, 747, 767 and 777, includes an Excusable Delay clause, which covers delays resulting from acts of God and unusually severe weather, and provides for schedule relief for up to three months. Spirit AeroSystems is assessing the likely impact of the tornado damage on future period results and expects to recover a substantial portion of its losses through insurance proceeds. Onex is unable to determine at this time whether the losses Spirit AeroSystems may record as a result of the storm will have a material impact on Onex future reported consolidated results of operations. Hawker Beechcraft The decline in the general aviation industry over the past three years resulted in Hawker Beechcraft being unable to meet certain of its financial obligations. During the second quarter of 2012, Hawker Beechcraft filed for bankruptcy protection in the United States. It is contemplated that Onex will have a minimal ownership interest in Hawker Beechcraft following the restructuring. Hawker Beechcraft is included in the Investments in Associates at fair value in the unaudited interim consolidated financial statements. The net carrying value of the investment in Hawker Beechcraft recorded in the unaudited interim consolidated financial statements at March 31, 2012 was $11 million. This amount represents the market value at March 31, 2012 of the public long-term debt held by Onex Partners II, Onex and management, of which Onex share was $4 million. Private equity funds Onex private equity funds are an additional source of cash. They provide capital for Onex-sponsored acquisitions that are not related to Onex operating companies that existed prior to the formation of the Funds. The Funds provide a substantial pool of committed capital, which enables Onex to be flexible and timely in responding to investment opportunities. Table 22 provides a summary of the remaining commitments available from third-party limited partners for future Onex-sponsored acquisitions in the Onex Partners and ONCAP Funds as of March 31, Private Equity Funds Uncalled Third-Party Committed Capital TABLE 22 (Unaudited) ($ millions) Available Uncalled Committed Capital (excluding Onex) (a) Onex Partners I $ 73 Onex Partners II $ 244 Onex Partners III $ 2,016 ONCAP II C$ 14 ONCAP III C$ 462 (a) Includes committed amounts from the management of Onex and ONCAP and directors, calculated based on the assumption that all of the remaining limited partners commitments are invested. 34 Onex Corporation First Quarter Report 2012

37 The committed amounts by the third-party limited partners are not included in Onex consolidated cash and will be funded as acquisitions are made. Onex commitment to the Funds Onex, the parent company, is the largest limited partner in the Onex Partners and ONCAP Funds. Table 23 presents the commitment and uncalled committed capital of Onex, the parent company, in these Funds at March 31, 2012: (Unaudited) TABLE 23 ($ millions) Fund Size Onex Commitment Uncalled Committed Capital Onex Partners I $ 1,655 $ 400 $ 22 Onex Partners II $ 3,450 $ 1,407 $ 161 Onex Partners III (a) $ 4,700 $ 1,200 $ 642 ONCAP II C$ 574 C$ 252 C$ 12 ONCAP III (b) C$ 800 C$ 252 C$ 194 (a) Onex commitment reflects the increased commitment announced in November 2011, which takes effect in May (b) Onex commitment has been reduced for a portion of the annual commitment for Onex management s participation. Carried interest The General Partners of the Onex Partners Funds, which are controlled by Onex, are entitled to a carried interest (20 percent) on the realized gains of third-party limited partners in each Fund, subject to an 8 percent compound annual preferred return to those limited partners on all amounts contributed in each particular Fund. Onex, as sponsor of the Onex Partners Funds, is entitled to 40 percent of the carried interest and the Onex management team is entitled to 60 percent. Under the terms of the partnership agreements, Onex may receive carried interest as realizations occur. The ultimate amount of carried interest earned will be based on the overall performance of each of Onex Partners I, II and III, independently, and includes typical catch-up and claw-back provisions within each Fund, but not between Funds. Table 24 shows the amount of carried interest received by Onex, the parent company, by year. Carried Interest TABLE 24 (Unaudited) ($ millions) Carried Interest Received Carried interest 2003 $ 1 Carried interest Carried interest Carried interest Carried interest Carried interest 2008 Carried interest Carried interest 2010 Carried interest Carried interest 2012 Total $ 237 During the first quarter of 2012, Onex and management of Onex elected not to receive the carried interest to which they were otherwise entitled on the sale of shares of Allison Transmission. This decision was in consideration of the concern regarding the value of the investment in Hawker Beechcraft and the desire to not distribute carried interest that may be subject to a future claw-back. During 2011, Onex, the parent company, realized carried interest of $65 million. The carried interest to which Onex was otherwise entitled on the sale of Onex Partners II s investment in Husky International in the second quarter of 2011 was net of a voluntary reduction of $35 million. The reduction was made at the request of Onex due to the concern regarding the investment in Hawker Beechcraft, discussed above. At March 31, 2012, there was $56 million of unrealized carried interest allocable to Onex on the public companies held at market value in the Onex Partners Funds. In addition, Onex has the potential to earn a further $63 million of carried interest on its private businesses in the Onex Partners and ONCAP Funds based on their fair values determined at March 31, Onex Corporation First Quarter Report

38 D I S C L O S U R E C O N T R O L S A N D P R O C E D U R E S A N D I N T E R N A L C O N T R O L S O V E R F I N A N C I A L R E P O R T I N G The Chief Executive Officer and the Chief Financial Officer have designed, or caused to be designed under their supervision, internal controls over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. The Chief Executive Officer and the Chief Financial Officer have also designed, or caused to be designed under their supervision, disclosure controls and procedures to provide reasonable assurance that information required to be disclosed by the Company in its corporate filings has been recorded, processed, summarized and reported within the time periods specified in securities legislation. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that its objectives are met. Due to inherent limitations in all such systems, no evaluations of controls can provide absolute assurance that all control issues, if any, within a company have been detected. Accordingly, our disclosure controls and procedures and our internal controls over financial reporting are effective in providing reasonable, not absolute, assurance that the objectives of our control systems have been met. Limitation on scope of design Management has limited the scope of the design of internal controls over financial reporting and disclosure controls and procedures to exclude the controls, policies and procedures of JELD-WEN, the results of which are included in the March 31, 2012 unaudited interim consolidated financial statements of Onex. The scope limitation is in accordance with Section 3.3 of National Instrument , Certification of Disclosure in Issuer s Annual and Interim Filings, which allows an issuer to limit its design of internal controls over financial reporting and disclosure controls and procedures to exclude the controls, policies and procedures of a company acquired not more than 365 days before the end of the financial period to which the certificate relates. Table 25 shows a summary of the financial information for JELD-WEN, which is included in the March 31, 2012 unaudited interim consolidated financial statements of Onex. Financial Information for JELD-WEN (Unaudited) ($ millions) TABLE 25 Three months ended March Revenue $ 731 Net loss $ (58) Current assets $ 799 Non-current assets $ 1,806 Current liabilities $ 748 Non-current liabilities $ Onex Corporation First Quarter Report 2012

39 OUTLOOK The first quarter of the year was an active one for Onex. Allison Transmission completed a $690 million initial public offering ( IPO ), the largest for an industrial company since Onex Credit Partners created its first Collateralized Loan Obligation ( CLO ), raising approximately $320 million, and our operating companies collectively refinanced a total of $1.1 billion of debt. Unfortunately, we did not acquire any new operating companies during the quarter. That s not for lack of cash or committed capital, both of which we have in abundance. Relative to our primary goal of increasing the value of our proprietary capital by 15 percent per year, we re off to a good start. In the first three months alone, proprietary capital per share grew by 7 percent. Our operating companies performed reasonably well in the first quarter. While revenues for our healthcare companies were largely flat, earnings were up from yearend. Our industrial businesses enjoyed substantial increases in both revenues and profits. Following several years of depressed conditions in the general aviation market, Hawker Beechcraft s financial condition and commercial prospects declined precipitously throughout the first quarter. In May, the company filed for bankruptcy protection. We d be remiss not to thank Larry Dewey, Allison Transmission s Chief Executive Officer, for the work he and his team did not just to make the aforementioned IPO a success but, more importantly, to make Allison Transmission a success. Allison Transmission s success gave us, and our partners at The Carlyle Group, the luxury of being able to wait out difficult markets in 2011 and launch the IPO at a time of our choosing rather than at a time dictated by needed liquidity or debt restructuring. Since our investment in 2007, we have also thoroughly enjoyed working with Larry Dewey and his team. We and The Carlyle Group have retained a controlling ownership interest following the IPO and look forward to Allison Transmission s continued success as a publicly listed company. Launching its first CLO was important for Onex Credit Partners as it represents another channel of distribution for its credit products. A CLO platform with staff and systems in place can be operationally leveraged quite extensively. If market conditions permit, we will issue subsequent CLOs off the same basic platform. As such, CLOs can be a profitable future source of recurring management fee income to Onex. Our refinancing activities are a direct reflection of the continued strength of the credit markets. We opportunistically pursue refinancings when the result can be lower interest expenses, extended maturities and loosened terms. In recent years, credit markets have been very volatile, making it imperative that we act quickly when we see opportunities. Originating new acquisition and investment opportunities continues to be our greatest challenge. Merger and acquisition activity continues to be sporadic. While it s true to say that our investment pipeline is stronger than it s been at any time since the financial crisis, we ve said that before with no result. In spite of our frustration, we have to be ever mindful that when we aren t finding opportunities that fit our acquisition criteria, the only smart thing to do is wait for better opportunities. We have approximately $1.4 billion in cash and near-cash items, which is more than sufficient to meet Onex current fund commitments. In that regard, we increased our commitment to Onex Partners III late last year from approximately 18 percent to 25 percent of the Fund s capital, for new investments completed after May 14 of this year. Onex also expects to periodically use its cash to repurchase shares under the Normal Course Issuer Bids. Over the 12 months ending April 30, 2012, we repurchased approximately 3.3 million shares through our Normal Course Issuer Bids, using C$111 million of cash. In addition to our own cash resources noted above, we have $2.8 billion of undrawn, committed capital from our limited partners. Together, we are well positioned to take advantage of just about any opportunity that presents itself. We continue to believe that our success in building companies and our record of capital preservation and growth a 3.3 multiple on invested capital and a 29 percent compound IRR are direct results of our distinctive ownership culture and the strong alignment of interests between Onex shareholders, its limited partners and the Onex management team. In addition to Onex being the largest limited partner in every fund, each member of the management team is required to have a significant ownership in Onex stock and to invest meaningfully in each operating company acquired. At March 31, 2012, the value of the team s investment in Onex shares and its businesses was approximately $1.5 billion. This printed report is by its nature current only at the point in time when it is issued. We encourage you to visit our website: for updates on Onex activities. Onex Corporation First Quarter Report

40 CONSOLIDATED BALANCE SHEETS (Unaudited) (in millions of U.S. dollars) As at March 31, 2012 As at December 31, 2011 As at January 1, 2011 Assets Current assets Cash and cash equivalents $ 2,384 $ 2,448 $ 2,532 Short-term investments Accounts receivable 3,448 3,272 3,430 Inventories 4,694 4,428 4,004 Other current assets 1,141 1,154 1,463 12,505 12,051 12,144 Property, plant and equipment 5,118 5,102 4,056 Long-term investments (note 4) 6,006 5,415 4,864 Other non-current assets 1,787 1,776 1,850 Intangible assets 2,539 2,599 2,505 Goodwill 2,452 2,434 2,634 Liabilities and Equity Current liabilities $ 30,407 $ 29,377 $ 28,053 Accounts payable and accrued liabilities $ 3,863 $ 3,893 $ 3,964 Current portion of provisions Other current liabilities ,225 Current portion of long-term debt of operating companies, without recourse to Onex Corporation (note 5) Current portion of warranty reserves and unearned premiums 1,436 1,400 1,314 7,028 6,947 7,003 Non-current portion of provisions Long-term debt of operating companies, without recourse to Onex Corporation (note 5) 6,672 6,479 6,346 Non-current portion of warranty reserves and unearned premiums 1,738 1,727 1,780 Other non-current liabilities 2,556 2,376 1,964 Deferred income taxes 1,039 1, Limited Partners Interests (note 6) 5,323 4,980 5,650 Equity 24,556 23,748 23,963 Share capital (note 7) Non-controlling interests 3,981 3,857 3,633 Retained earnings and accumulated other comprehensive earnings 1,510 1, ,851 5,629 4,090 $ 30,407 $ 29,377 $ 28,053 See accompanying notes to unaudited interim consolidated financial statements, including the change in accounting policy retroactively adopted on January 1, 2012, as described in note 1. These unaudited interim consolidated financial statements should be read in conjunction with the 2011 audited annual consolidated financial statements. 38 Onex Corporation First Quarter Report 2012

41 CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) (in millions of U.S. dollars except per share data) Three months ended March Revenues $ 6,817 $ 5,647 Cost of sales (excluding amortization of property, plant and equipment, intangible assets and deferred charges) (5,407) (4,528) Operating expenses (822) (675) Interest income Amortization of property, plant and equipment (140) (106) Amortization of intangible assets and deferred charges (83) (72) Interest expense of operating companies (137) (127) Increase in value of investments in associates at fair value, net (note 4) Stock-based compensation expense (88) (88) Other items (note 8) (47) (60) Limited Partners Interests charge (note 6) (486) (395) Earnings (loss) before income taxes and discontinued operations 225 (223) Provision for income taxes (46) (47) Earnings (loss) from continuing operations 179 (270) Earnings from discontinued operations (note 3) 65 Net Earnings (Loss) for the Period $ 179 $ (205) Earnings (Loss) from Continuing Operations attributable to: Equity holders of Onex Corporation $ 60 $ (340) Non-controlling Interests Earnings (Loss) from Continuing Operations for the Period $ 179 $ (270) Net Earnings (Loss) attributable to: Equity holders of Onex Corporation $ 60 $ (300) Non-controlling Interests Net Earnings (Loss) for the Period $ 179 $ (205) Net Earnings (Loss) per Subordinate Voting Share of Onex Corporation (note 9) Basic and Diluted: Continuing operations $ 0.52 $ (2.87) Discontinued operations 0.34 Net Earnings (Loss) for the Period $ 0.52 $ (2.53) See accompanying notes to unaudited interim consolidated financial statements, including the change in accounting policy retroactively adopted on January 1, 2012, as described in note 1. These unaudited interim consolidated financial statements should be read in conjunction with the 2011 audited annual consolidated financial statements. Onex Corporation First Quarter Report

42 CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (Unaudited) (in millions of U.S. dollars) Three months ended March Net earnings (loss) for the period $ 179 $ (205) Other comprehensive earnings (loss), net of tax Currency translation adjustments Change in fair value of derivatives designated as hedges 13 8 Unrealized gains (loss) on available-for-sale financial assets 9 (6) Other 6 2 Other comprehensive earnings from discontinued operations, net of tax (note 3) 16 Total Comprehensive Earnings (Loss) for the Period $ 259 $ (153) Total Comprehensive Earnings (Loss) attributable to: Equity holders of Onex Corporation $ 109 $ (265) Non-controlling Interests Total Comprehensive Earnings (Loss) for the Period $ 259 $ (153) See accompanying notes to unaudited interim consolidated financial statements, including the change in accounting policy retroactively adopted on January 1, 2012, as described in note 1. These unaudited interim consolidated financial statements should be read in conjunction with the 2011 audited annual consolidated financial statements. 40 Onex Corporation First Quarter Report 2012

43 CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) (in millions of U.S. dollars except per share data) Share Capital (note 7) Retained Earnings (Deficit) Accumulated Other Comprehensive Earnings (Loss) Total Equity Attributable to Equity Holders of Onex Corporation Noncontrolling Interests Total Equity Balance January 1, 2011 $ 373 $ 106 $ 25 (b) $ 504 $ 3,638 $ 4,142 Change in accounting policy (note 1) (47) (47) (5) (52) Dividends declared (a) (3) (3) (3) Investments by shareholders other than Onex Distributions to non-controlling interests (2) (2) Repurchase of shares of operating companies (7) (7) (21) (28) Comprehensive Earnings (Loss) Net earnings (loss) for the period (300) (300) 95 (205) Other comprehensive earnings (loss) for the period, net of tax: Currency translation adjustments Change in fair value of derivatives designated as hedges Unrealized gains (loss) on availablefor-sale financial assets (7) (7) 2 (5) Other 1 1 Balance March 31, 2011 $ 373 $ (251) $ 60 (c) $ 182 $ 3,759 $ 3,941 Balance December 31, 2011 $ 360 $ 1,481 $ (21) (d) $ 1,820 $ 3,862 $ 5,682 Change in accounting policy (note 1) (48) (48) (5) (53) Dividends declared (a) (3) (3) (3) Purchase and cancellation of shares (note 7) (1) (1) (1) Investments by shareholders other than Onex Distributions to non-controlling interests (2) (2) Repurchase of shares of operating companies (7) (7) (53) (60) Comprehensive Earnings Net earnings for the period Other comprehensive earnings for the period, net of tax: Currency translation adjustments Change in fair value of derivatives designated as hedges Unrealized gains on available-for-sale financial assets Other Balance March 31, 2012 $ 360 $ 1,485 $ 25 (e) $ 1,870 $ 3,981 $ 5,851 (a) Dividends declared per Subordinate Voting Share were C$ for the three months ended March 31, 2012 and In 2012, shares issued under the dividend reinvestment plan amounted to less than $1 (2011 less than $1). There are no tax effects for Onex on the declaration or payment of dividends. (b) Accumulated Other Comprehensive Earnings (Loss) as at January 1, 2011 consisted of currency translation adjustments of negative $23, unrealized gains on the effective portion of cash flow hedges of $7 and unrealized gains on available-for-sale financial assets of $41. Accumulated Other Comprehensive Earnings (Loss) as at January 1, 2011 included $13 of net earnings related to discontinued operations. Income taxes did not have a significant effect on these items. (c) Accumulated Other Comprehensive Earnings (Loss) as at March 31, 2011 consisted of currency translation adjustments of positive $8, unrealized gains on the effective portion of cash flow hedges of $18 and unrealized gains on available-for-sale financial assets of $34. Accumulated Other Comprehensive Earnings (Loss) as at March 31, 2011 included $27 of net earnings related to discontinued operations. Income taxes did not have a significant effect on these items. (d) Accumulated Other Comprehensive Earnings (Loss) as at December 31, 2011 consisted of currency translation adjustments of negative $63, unrealized losses on the effective portion of cash flow hedges of $2, unrealized gains on available-for-sale financial assets of $45 and other of negative $1. Income taxes did not have a significant effect on these items. (e) Accumulated Other Comprehensive Earnings (Loss) as at March 31, 2012 consisted of currency translation adjustments of negative $27, unrealized gains on available-for-sale financial assets of $53 and other of negative $1. Income taxes did not have a significant effect on these items. See accompanying notes to unaudited interim consolidated financial statements, including the change in accounting policy retroactively adopted on January 1, 2012, as described in note 1. These unaudited interim consolidated financial statements should be read in conjunction with the 2011 audited annual consolidated financial statements. Onex Corporation First Quarter Report

44 CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in millions of U.S. dollars) 42 Onex Corporation First Quarter Report 2012 Three months ended March Operating Activities Earnings (loss) for the period from continuing operations $ 179 $ (270) Adjustments to earnings (loss) from continuing operations: Provision for income taxes Interest income (10) (11) Interest expense of operating companies Net earnings (loss) before interest and provision for (recovery of) income taxes 352 (107) Cash taxes received (paid) (48) 14 Items not affecting cash and cash equivalents: Amortization of property, plant and equipment Amortization of intangible assets and deferred charges Amortization of deferred warranty costs Increase in value of investments in associates at fair value, net (note 4) (608) (170) Stock-based compensation expense Limited Partners Interests charge (note 6) Change in provisions Other Changes in non-cash working capital items: Accounts receivable (163) (75) Inventories (254) (352) Other current assets Accounts payable, accrued liabilities and other current liabilities 49 (143) Decrease in cash and cash equivalents due to changes in working capital items (316) (552) Increase (decrease) in other operating activities (12) 8 Increase in warranty reserves and premiums 32 7 Cash flows from operating activities of discontinued operations (note 3) Financing Activities Issuance of long-term debt Repayment of long-term debt (458) (84) Cash interest paid (97) (75) Cash dividends paid (3) (3) Repurchase of share capital of Onex Corporation (1) Repurchase of share capital of operating companies (60) (28) Financing provided by Limited Partners (note 6) Distributions paid to non-controlling interests and Limited Partners (note 6) (231) (417) Change in restricted cash for distribution to Limited Partners (6) 272 Decrease due to other financing activities (14) (6) Cash flows used for financing activities of discontinued operations (note 3) (56) (119) (75) Investing Activities Acquisition of operating companies, net of cash and cash equivalents in acquired companies of nil (2011 nil) (note 2) (20) (8) Purchase of property, plant and equipment (166) (121) Proceeds from sale of investments in associates at fair value (note 4) 326 Cash interest and dividends received 1 1 Net purchases of investments and securities (note 4) (357) (47) Increase (decrease) due to other investing activities 4 (15) Cash flows used for investing activities of discontinued operations (note 3) (42) (212) (232) Decrease in Cash and Cash Equivalents for the Period (68) (266) Increase in cash due to changes in foreign exchange rates 4 10 Cash and cash equivalents, beginning of the period continuing operations 2,448 2,053 Cash and cash equivalents, beginning of the period discontinued operations (note 3) 479 Cash and Cash Equivalents 2,384 2,276 Cash and cash equivalents held by discontinued operations (note 3) (468) Cash and Cash Equivalents Held by Continuing Operations $ 2,384 $ 1,808 See accompanying notes to unaudited interim consolidated financial statements, including the change in accounting policy retroactively adopted on January 1, 2012, as described in note 1. These unaudited interim consolidated financial statements should be read in conjunction with the 2011 audited annual consolidated financial statements.

45 NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (in millions of U.S. dollars except per share data) Onex Corporation and its subsidiaries (collectively, the Company ) is a diversified company with operations in a range of industries including electronics manufacturing services, aerostructures, healthcare, financial services, customer care services, metal services, building products, gaming, cabinetry products, industrial products, commercial vehicles and aircraft and aftermarket. Additionally, the Company has investments in real estate, credit strategies and mid-market private equity opportunities. Throughout these statements, the term Onex refers to Onex Corporation, the ultimate parent company. Onex Corporation is a Canadian corporation domiciled in Canada and is listed on the Toronto Stock Exchange under the symbol OCX. Onex Corporation s shares are traded in Canadian dollars. The registered address for Onex Corporation is 161 Bay Street, Toronto, Ontario. Gerald W. Schwartz controls Onex Corporation by indirectly holding all of the outstanding Multiple Voting Shares of the corporation. All amounts are in millions of U.S. dollars unless otherwise noted. The unaudited interim consolidated financial statements were authorized for issue by the Audit and Corporate Governance Committee on May 9, B A S I S O F P R E PA R AT I O N A N D S I G N I F I CANT ACCOUNTING POLICIES S TAT E M E N T O F C O M P L I A N C E The unaudited interim consolidated financial statements have been prepared in accordance with International Accounting Standard ( IAS ) 34, Interim Financial Reporting, using accounting policies consistent with International Financial Reporting Standards ( IFRS ) and its interpretations adopted by the International Accounting Standards Board ( IASB ). Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with IFRS have been omitted or condensed. These unaudited interim consolidated financial statements were prepared on a going concern basis, under the historical cost convention, as modified by the revaluation of available-for-sale financial assets, and financial assets and financial liabilities (including derivative instruments) at fair value through total comprehensive earnings. The U.S. dollar is the Company s functional currency. As such, the financial statements have been reported on a U.S. dollar basis. C O N S O L I DAT I O N The unaudited interim consolidated financial statements represent the accounts of Onex and its subsidiaries, including its controlled operating companies. Onex also controls and consolidates the operations of Onex Partners LP ( Onex Partners I ), Onex Partners II LP ( Onex Partners II ) and Onex Partners III LP ( Onex Partners III ), referred to collectively as Onex Partners, and ONCAP II L.P. and ONCAP III LP, referred to collectively as ONCAP (as described in note 31 to the 2011 audited annual consolidated financial statements). The results of operations of subsidiaries are included in the unaudited interim consolidated financial statements from the date that control commences until the date that control ceases. All significant intercompany balances and transactions have been eliminated. Investments in operating companies over which the Company has significant influence, but not control, are designated, upon initial recognition, at fair value through earnings. As a result, the investments are recorded at fair value in the unaudited interim consolidated balance sheets, with changes in fair value recognized in the unaudited interim consolidated statements of earnings. Onex Corporation First Quarter Report

46 N OT E S TO I N T E R I M C O N S O L I DAT E D F I N A N C I A L S TAT E M E N T S The principal operating companies and Onex economic ownership, Onex and the Limited Partners economic ownership and voting interests in these entities are as follows: March 31, 2012 December 31, 2011 Onex Ownership Onex and Limited Partners Ownership Voting Onex Ownership Onex and Limited Partners Ownership Voting Investments made through Onex Celestica Inc. ( Celestica ) 9% 9% 71% 9% 9% 71% SITEL Worldwide Corporation ( Sitel Worldwide ) 68% 68% 88% 68% 68% 88% Investments made through Onex and Onex Partners I Center for Diagnostic Imaging, Inc. ( CDI ) 19% 81% 100% 19% 81% 100% Skilled Healthcare Group, Inc. ( Skilled Healthcare Group ) 9% 39% 89% 9% 40% 89% Spirit AeroSystems, Inc. ( Spirit AeroSystems ) 5% 16% 64% 5% 16% 64% Investments made through Onex and Onex Partners II Allison Transmission Holdings, Inc. ( Allison Transmission ) 13% 41% (a) 15% 49% (a) Carestream Health, Inc. ( Carestream Health ) 37% 95% 100% 37% 95% 100% Hawker Beechcraft Corporation ( Hawker Beechcraft ) 19% 49% (a) 19% 49% (a) RSI Home Products, Inc. ( RSI ) 20% 50% 50% (a) 20% 50% 50% (a) TMS International Corp. ( TMS International ) 24% 60% 85% 24% 60% 85% Investments made through Onex, Onex Partners I and Onex Partners II The Warranty Group, Inc. ( The Warranty Group ) 29% 92% 100% 29% 92% 100% Investments made through Onex and Onex Partners III JELD-WEN Holding, inc. ( JELD-WEN ) (b) 15% 59% 59% 20% 59% 59% Tomkins Limited ( Tomkins ) 14% 56% 50% (a) 14% 56% 50% (a) Tropicana Las Vegas, Inc. ( Tropicana Las Vegas ) 17% 76% 76% 17% 76% 76% Investments made through Onex, Onex Partners I and Onex Partners III Res-Care, Inc. ( ResCare ) 20% 98% 100% 20% 98% 100% Other investments ONCAP II Fund ( ONCAP II ) 46% 100% 100% 46% 100% 100% ONCAP III Fund ( ONCAP III ) 29% 100% 100% 29% 100% 100% Onex Real Estate Partners ( Onex Real Estate ) 88% 88% 100% 88% 88% 100% (a) Onex exerts significant influence over these investments, which are designated at fair value through earnings, through its right to appoint members of the boards of directors of these entities. (b) Economic ownership and voting interests are presented on an as-converted basis. The allocation of net earnings and comprehensive earnings attributable to equity holders of Onex Corporation and non-controlling interests is calculated using an as-converted economic ownership of 68% (December 31, %) to reflect certain JELD-WEN shares that are recorded as liabilities at fair value. The ownership percentages are before the effect of any potential dilution relating to the Management Investment Plans (the MIP ), as described in note 31(i) to the 2011 audited annual financial statements. The allocation of net earnings and comprehensive earnings attributable to equity holders of Onex Corporation and non-controlling interests is calculated using the economic ownership of Onex and the Limited Partners. The voting interests include shares that Onex has the right to vote through contractual arrangements or through multiple voting rights attached to particular shares. In certain circumstances, the voting arrangements give Onex the right to elect the majority of the boards of directors of the companies. 44 Onex Corporation First Quarter Report 2012

47 N OT E S TO I N T E R I M C O N S O L I DAT E D F I N A N C I A L S TAT E M E N T S S I G N I F I CANT ACCOUNTING POLICIES The disclosures contained in these unaudited interim consolidated financial statements do not include all the requirements of IFRS for annual financial statements. The unaudited interim consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements for the year ended December 31, The unaudited interim consolidated financial statements are based on accounting policies, as described in note 1 of the audited annual financial statements, except as described below. C H A N G E I N ACCOUNTING POLICY On January 1, 2012, the Company retroactively adopted a new policy on the accounting for costs associated with acquiring or renewing insurance contracts consistent with guidance issued by the Financial Accounting Standards Board ( FASB ). In accordance with IFRS 4, Insurance Contracts, an entity is permitted to change its accounting policies for insurance contracts if, and only if, the change makes the financial statements more relevant to the economic decision-making needs of users and no less reliable, or more reliable and no less relevant to those needs. The new guidance, impacting The Warranty Group s results, included in Onex consolidated financial statements, modifies the definition of the types of costs incurred that can be capitalized in the process of acquiring new and renewal insurance contracts and restricts the capitalization of acquisition costs to those that are related directly to the successful process of acquiring new or renewal insurance contracts. As a result of this change in accounting policy, the Com pany defers fewer costs related to the successful process of acquiring new or renewal insurance contracts and records lower amortization over the term of the insurance contracts. The adoption of this new accounting policy resulted in a decrease in equity of $52 at January 1, 2011 and $53 at December 31, The effects on the unaudited interim consolidated balance sheets were as follows: Balance as at January 1, 2011 As Reported Adjustment As Adjusted Other current assets $ 1,495 $ (32) $ 1,463 Other non-current assets 1,872 (22) 1,850 Deferred income tax liability (938) 2 (936) Non-controlling interests (3,638) 5 (3,633) Retained earnings and accumulated other comprehensive earnings (131) 47 (84) Balance as at December 31, 2011 As Reported Adjustment As Adjusted Other current assets $ 1,186 $ (32) $ 1,154 Other non-current assets 1,813 (37) 1,776 Deferred income tax liability (1,075) 16 (1,059) Non-controlling interests (3,862) 5 (3,857) Retained earnings and accumulated other comprehensive earnings (1,460) 48 (1,412) The effects on the unaudited interim consolidated statement of earnings and unaudited interim consolidated statement of cash flows for the current and prior periods were not significant. Onex Corporation First Quarter Report

48 N OT E S TO I N T E R I M C O N S O L I DAT E D F I N A N C I A L S TAT E M E N T S R E C E N T LY I SSUED ACCOUNTING PRONOUNCEMENTS Standards, amendments and interpretations not yet adopted or effective Reporting Entity Standards In May 2011, the IASB issued a group of five new standards that addresses the scope and accounting for the reporting entity. The new standards consist of amendments to IAS 27, which was renamed Separate Financial Statements, amendments to IAS 28, which was renamed Investments in Associates and Joint Ventures, IFRS 10, Consolidated Financial Statements, IFRS 11, Joint Arrangements and IFRS 12, Disclosure of Interests in Other Entities. These five new standards are effective for annual periods beginning on or after January 1, The Company is currently evaluating the impact of adopting these standards on its consolidated financial statements. A description of the significant changes and new requirements follows: IFRS 10 establishes the principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities. IFRS 10 introduces a single consolidation model for all entities based on control, irrespective of the nature of the entity. IFRS 10 supersedes all of the guidance in IAS 27, Consolidated and Separate Financial Statements, and Standing Interpretations Committee 12, Con solidation, Special Purpose Entities. IFRS 11 establishes the principles for determining the type of joint arrangements and the accounting for those arrangements in accordance with that type of joint arrangement. IFRS 11 reduces the types of joint arrangements and eliminates use of the proportionate consolidation method for joint ventures. IFRS 11 supersedes all of the guidance in IAS 31, Interests in Joint Ventures. IFRS 12 provides the disclosure requirements for entities reported under IFRS 10 and IFRS 11 and replaces the disclosure requirements currently in IAS 28, Investments in Associates. IFRS 12 requires the disclosure of the nature, risks and financial effects associated with the entity s interests in subsidiaries, associates, joint arrangements and unconsolidated structured entities. IAS 28 prescribes the use of the equity method for investments in associates and joint ventures. IAS 28 applies to all entities that are investors with joint control of, or significant influence over, an investee. However, IAS 28 retains the ability of the Company to designate its investments in associates, upon initial recognition, at fair value through earnings. IFRS 13 Fair Value Measurement In May 2011, the IASB issued IFRS 13, Fair Value Measurement, which provides a single framework for measuring fair value and requires enhanced disclosures when fair value is used for measurement. IFRS 13 is effective for annual periods beginning on or after January 1, The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements. IAS 19 Employee Future Benefits In June 2011, the IASB issued an amendment to IAS 19, Employee Future Benefits, which changes the recognition, measurement and presentation of defined benefit pension expense and provides for additional disclosures of all employee benefits. The amendments to IAS 19 are effective for annual periods beginning on or after January 1, The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements. IAS 1 Presentation of Financial Statements In June 2011, the IASB issued an amendment to IAS 1, Presentation of Financial Statements, which requires entities to separately present items in other comprehensive earnings based on whether they may be recycled to earnings or loss in future periods. The amendment to IAS 1 is effective for annual periods beginning on or after July 1, The impact of adopting this standard is not expected to have a significant effect on the consolidated financial statements. IFRS 9 Financial Instruments In November 2009, the IASB issued IFRS 9, Financial Instruments, which represents the first phase of its replacement of IAS 39, Financial Instruments: Recognition and Measurement, and introduces new requirements for the classification and measurement of financial assets and removes the need to separately account for certain embedded derivatives. IFRS 9 is effective for annual periods beginning on or after January 1, The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements. 2. ACQUISITIONS During the first three months of 2012, six acquisitions were completed through subsidiaries of Onex. The acquisitions were made by JELD-WEN, ResCare, Caliber Collision Centers and Mister Car Wash. Details of the purchase price and allocation for the acquisitions are as follows: 2012 Other current assets $ 2 Intangible assets with limited life 3 Goodwill 11 Property, plant and equipment and other non-current assets 8 24 Current liabilities (1) Non-current liabilities (3) Interest in net assets acquired $ 20 Net earnings since the date of acquisition for these acquisitions were not significant to the Company s results for the three months ended March 31, Onex Corporation First Quarter Report 2012

49 N OT E S TO I N T E R I M C O N S O L I DAT E D F I N A N C I A L S TAT E M E N T S 3. D I S C O N T I N U E D O P E R AT I O N S The following table shows revenue, expenses and net after-tax results from discontinued operations. Three months ended March 31, 2011 Revenue Expenses Pre-tax Earnings Tax Provision Gain, Net of Tax Earnings for the Period EMSC (a) $ 761 $ 702 $ 59 $ 23 $ $ 36 Husky (b) $ 1,068 $ 971 $ 97 $ 32 $ $ 65 a) In May 2011, Onex, Onex Partners I, Onex management and certain limited partners sold their remaining 13.7 million shares of Emergency Medical Services Corporation ( EMSC ), of which Onex portion was approximately 4.8 million shares. The sale was part of an offer made for all outstanding shares of EMSC. As a result, the operations of EMSC for the first quarter of 2011 are presented as discontinued in the unaudited interim consolidated statements of earnings and cash flows. b) In June 2011, Onex, Onex Partners I, Onex Partners II and Onex management completed the sale of their entire investment in Husky International Ltd. ( Husky ). As a result, the prior period unaudited interim consolidated statements of earnings and cash flows have been restated to report the results of Husky as discontinued. The following table shows the summarized aggregate assets and liabilities of discontinued operations: January 1, 2011 Cash and cash equivalents $ 479 Other current assets 946 Intangible assets 460 Goodwill 514 Property, plant and equipment and other non-current assets 733 3,132 Current liabilities (716) Non-current liabilities (992) Net assets of discontinued operations $ 1,424 The following table presents the summarized aggregate cash flows from discontinued operations: Three months ended March 31, 2011 EMSC Husky Total Operating activities $ 74 $ 12 $ 86 Financing activities (6) (50) (56) Investing activities (32) (10) (42) Increase (decrease) in cash and cash equivalents for the period 36 (48) (12) Increase in cash and cash equivalents due to changes in foreign exchange rates 1 1 Cash and cash equivalents, beginning of period Cash and cash equivalents, end of period $ 323 $ 145 $ 468 Onex Corporation First Quarter Report

50 N OT E S TO I N T E R I M C O N S O L I DAT E D F I N A N C I A L S TAT E M E N T S 4. LO N G - T E R M I N V E S T M E N T S Long-term investments comprised the following: March 31, 2012 December 31, 2011 January 1, 2011 Investments in associates at fair value through earnings: Onex Partners (a) $ 3,479 $ 3,234 $ 2,771 Other associate investments (a) EMSC insurance collateral (1) 139 Long-term investments held by The Warranty Group 1,514 1,501 1,475 Onex Credit Partners CLO investments in corporate loans (b) 287 Investment in Onex Credit Partners funds Other $ 6,006 $ 5,415 $ 4,864 (1) The company sold its remaining interests in EMSC during the second quarter of 2011 and no longer consolidates EMSC. a) Investments in associates, over which the Company has significant influence, but not control, are designated, upon initial recognition, at fair value. The fair value of investments in associates is assessed at each reporting date with changes to the values being recorded through earnings. Details of those investments designated at fair value included in long-term investments are as follows: Onex Partners Other Associate Investments Total Balance January 1, 2011 $ 2,771 $ 106 $ 2,877 Purchase of investments 2 2 Distributions received (4) (4) Increase in fair value of investments, net Interest income 2 2 Balance March 31, 2011 $ 2,943 $ 104 $ 3,047 Purchase of investments Distributions received (38) (10) (48) Increase in fair value of investments, net Interest income 5 5 Balance December 31, 2011 $ 3,234 $ 128 $ 3,362 Purchase of investments 6 6 Sale of investments (326) (326) Distributions received (16) (16) Increase in fair value of investments, net Balance March 31, 2012 $ 3,479 $ 155 $ 3, Onex Corporation First Quarter Report 2012

51 N OT E S TO I N T E R I M C O N S O L I DAT E D F I N A N C I A L S TAT E M E N T S Onex Partners includes investments in Allison Transmission, Hawker Beechcraft, RSI and Tomkins. Other associates accounted for at fair value through earnings include investments in Cypress Insurance Group ( Cypress ) and certain real estate investments. Investments in associates designated at fair value are measured with significant unobservable inputs (level 3 of the fair value hierarchy), with the exception of Hawker Beechcraft debt and Allison Transmission (beginning March 2012), which are measured with significant other observable inputs (level 2 of the fair value hierarchy). The associates also have financing arrangements that typically restrict their ability to transfer cash and other assets to the Company. In March 2012, Allison Transmission completed an initial public offering of approximately 30.0 million shares of common stock (NYSE: ALSN), including the exercise of the over-allotment option. As part of the offering, Onex, Onex Partners II, Onex management and certain limited partners sold approximately 15.0 million shares, of which Onex portion was approximately 4.7 million shares. The sale was completed at a price of $23.00 cash per share. The cash cost for these shares was $8.44 per share. Net proceeds of $326 were received by Onex, Onex Partners II, Onex management and certain limited partners. Onex share of the net proceeds was $102. Onex investment in Allison Transmis sion is recorded at fair value in the unaudited interim consolidated balance sheets, with changes in fair value recognized in the unaudited interim consolidated statements of earnings. The realized pre-tax gain on the portion of Allison Transmission sold was $200. The Limited Partners share of the realized gain was $138, while Onex share of the realized gain on the sale was $62. In addition, Onex recorded a non-cash tax provision of $8 on the realized gain. The tax provision is included in provision for income taxes in the unaudited interim consolidated statement of earnings. Carried interest was not received for the portion sold since Onex voluntarily reduced the amount of carried interest received. The carried interest that was voluntarily reduced may be received on a future realization in Onex Partners II. No amounts were paid on account of this transaction related to the MIP as the required performance targets have not been met at this time. In conjunction with Allison Transmission s initial public offering in March 2012, a termination fee of $8 was received from Allison Transmission as consideration for the cancellation of the services agreement between Allison Transmission and Onex. The fee is included in revenue in the unaudited interim consolidated statement of earnings. b) In March 2012, Onex Credit Partners established its first Collateralized Loan Obligation ( CLO ). A CLO is a leveraged structured vehicle that holds a widely diversified collateral asset portfolio and is funded through the issuance of collateralized loan instruments in a series of rated tranches of secured notes and equity. Onex Credit Partners CLO was funded through the issuance of secured notes for an aggregate principal amount of $295, as described in note 5(b). Onex initial investment was a cash cost of $38, consisting of $6 for class D secured deferrable notes and $32 for the equity of Onex Credit Partners CLO. The asset portfolio held by Onex Credit Partners CLO consists of cash and cash equivalents and corporate loans and has been designated to be recorded at fair value. Onex Credit Partners CLO portfolio is pledged as collateral for the notes. The reinvestment period of Onex Credit Partners CLO, during which reinvestment can be made in collateral, ends in March 2015, or earlier, subject to certain provisions. At March 31, 2012, the fair value of the portfolio was $ LO N G - T E R M D E B T O F O P E R AT I N G C O M PA N I E S, W I T H O U T R E C O U R S E TO O N E X C O R P O R AT I O N The following describes the significant changes to Onex Corporation s consolidated long-term debt from the information provided in the 2011 audited annual consolidated financial statements. a) TMS International In March 2012, TMS International entered into a new senior secured term loan for an aggregate principal amount of $300. The offering price was 99.0% of par to yield 6.15% to maturity. The senior secured term loan bears interest at LIBOR (subject to a floor of 1.25%) plus a margin of 4.50%. Commencing in June 2012, the senior secured term loan will amortize in equal quarterly instalments in an aggregate amount equal to 1% of the original principal amount with any remaining balance payable on the final maturity date, in March TMS International may prepay amounts outstanding under the term loan at any time, subject to certain restrictions if the prepayment is as a result of a refinancing or repricing transaction within one year following the closing date. Subject to certain exceptions, TMS International is required to prepay certain amounts outstanding with (a) the net cash proceeds of certain asset sales and certain issuances of debt, and (b) a percentage of excess cash flow, which percentage is based upon TMS International s total net first lien senior secured leverage ratio. The senior secured term loan agreement also permits TMS International to incur incremental borrowings thereunder in an aggregate principal amount equal to the greater of i) $75 and ii) an amount such that, after giving effect to such incremental borrowings, TMS International will be in pro forma compliance with a total net first lien senior secured leverage ratio of 2.75 to Onex Corporation First Quarter Report

52 N OT E S TO I N T E R I M C O N S O L I DAT E D F I N A N C I A L S TAT E M E N T S Incremental borrowings are uncommitted and the availability thereof will depend on market conditions at the time TMS International seeks to incur such borrowings. Substantially all of TMS International s assets are pledged as collateral under the senior secured term loan. The proceeds from the new senior secured term loan, along with cash and a draw on TMS International s existing assetbased revolving credit facility, were used primarily to repay the existing term loan, which was scheduled to mature in January 2014, and to discharge and redeem TMS International s unsecured senior subordinated notes, which were scheduled to mature in February At March 31, 2012, the new senior secured term loan with $300 outstanding was recorded net of the unamortized discount of $3. As a result of the refinancing, TMS International recognized a charge of $12, which was included in interest expense in the unaudited interim consolidated statement of earnings. c) ResCare In April 2012, ResCare entered into a new $375 senior secured credit facility, which is available through to April The senior secured credit facility consists of a $200 revolving credit facility and a $175 term loan. The revolving credit facility and term loan bear interest at LIBOR plus a margin of 2.75%. The term loan requires quarterly principal repayments of $2. The required quarterly principal payments increase throughout the term until they reach $7 in Substantially all of ResCare s assets are pledged as collateral under the senior secured credit facility. The proceeds from the new facility were used to repay ResCare s former senior secured term loan, retire the former senior secured revolving facility and pay fees and expenses associated with the transaction. At March 31, 2012, nil and $168 were outstanding under the existing senior secured revolving credit facility and senior secured term loan, respectively. b) Onex Credit Partners CLO In March 2012, Onex Credit Partners established its first CLO, as described in note 4. Onex Credit Partners CLO issued class A-1 and A-2 senior secured notes and class B, C and D secured deferrable notes for an aggregate principal amount of $295. The priority ranking of the note classes, from highest to lowest, is class A-1, class A-2, class B, class C, then class D. The class A-1 and A-2 notes were offered at an aggregate principal amount of $234. The notes are due in March 2023 and bear interest at a rate of LIBOR plus a margin of 1.50% to 2.90%, payable quarterly beginning in September At March 31, 2012, $234 of principal plus accrued interest was outstanding under the class A-1 and A-2 notes. The class B, C and D notes were offered at an aggregate principal amount of $61. The weighted average offering price was 88.9% of par to yield a weighted average spread above LIBOR of 6.27% to maturity. The notes are due in March 2023 and bear interest at a rate of LIBOR plus a margin of 3.50% to 5.50%, payable quarterly beginning in September At March 31, 2012, $61 of principal plus accrued interest was outstanding under the class B, C and D notes. The notes are recorded net of the unamortized discount of $7. Onex purchased $7 of principal of the class D notes. At March 31, 2012, the Company held $7 of principal plus accrued interest of the class D notes, recorded net of the unamortized discount of $1. The notes of Onex Credit Partners CLO are secured by, and only have recourse to, the assets of Onex Credit Partners CLO. The notes are subject to redemption provisions, including mandatory redemption if certain coverage tests are not met by Onex Credit Partners CLO. Optional redemption of the notes is available beginning in March Optional repricing of the notes is available subject to certain customary terms and conditions being met by Onex Credit Partners CLO. 50 Onex Corporation First Quarter Report 2012 d) Skilled Healthcare Group In April 2012, Skilled Healthcare Group amended its credit facility agreement to increase the size of its term loan to $460 from $360 through to The incremental term loan bears interest at LIBOR (subject to a floor of 1.50%) plus a margin of 5.25%. As part of the refinancing, the interest rate on the existing term loan was amended to match the interest rate of the incremental term loan. The amended term loan requires quarterly principal repayments of $2 until maturity in The interest rate on the existing revolving credit facility was also amended to LIBOR plus a margin of up to 4.50% or a base rate plus a margin of up to 3.50%, depending on the company s leverage ratio. There is no longer a LIBOR floor on the revolving credit facility. The revolving credit facility is repayable at maturity in Substantially all of Skilled Healthcare Group s assets are pledged as collateral under the term loan and credit facility. The proceeds from the incremental term loan will be used to redeem the existing unsecured senior subordinated notes in May 2012, which are due in At March 31, 2012, nil, $341 and $130 were outstanding under the existing revolving credit facility, term loan and senior subordinated notes, respectively. e) Sitel Worldwide In April 2012, Sitel Worldwide completed an offering of $200 in aggregate principal amount of 11.00% senior secured notes due in The offering price was 96.00% of par to yield 12.00% to maturity. The net proceeds were used to repay all of the indebtedness outstanding under the non-extended term loan due in 2014 and the majority of the outstanding balance under its revolving credit facility. As part of the transaction, Sitel Worldwide extended the maturity date on $20, or 24%, of commitments for its revolving credit facility from January 2013 to January In addition, the debt covenants of the credit facility were amended to lessen restrictions with respect to certain covenant levels. At March 31, 2012, $30 and $355 were outstanding under the revolving credit facility and term loan, respectively.

53 N OT E S TO I N T E R I M C O N S O L I DAT E D F I N A N C I A L S TAT E M E N T S f) Spirit AeroSystems In April 2012, Spirit AeroSystems entered into a new credit agreement that consists of a $550 term loan and a $650 revolving credit facility. The term loan bears interest at LIBOR (subject to a floor of 0.75%) plus a margin of 3.00%. The margin over LIBOR may be decreased to 2.75% in 2013 if certain performance targets are met. The term loan is due in 2019 and replaces the existing term loan, which was scheduled to mature in two tranches in 2013 and The revolving credit facility bears interest at LIBOR plus a margin of up to 2.50% depending on the company s leverage ratio. The revolving credit facility is due in 2017 and replaces the existing revolving credit facility, which was scheduled to mature in Substantially all of Spirit AeroSystems assets are pledged as collateral under the new credit agreement. The proceeds from the term loan, along with approximately $10 of cash, were used to repay Spirit AeroSystems existing term loan and to pay accrued interest, fees, closing costs and other third-party expenses. At March 31, 2012, nil and $560 were outstanding under the existing revolving credit facility and term loan, respectively. 6. L I M I T E D PA R T N E R S I N T E R E S T S The investments in the Onex Partners and ONCAP Funds by those other than Onex are presented within the Limited Partners Interests. Details of those interests are as follows: Limited Partners Interests Balance January 1, 2011 $ 5,650 Limited Partners Interests charge (a) 395 Contributions by Limited Partners (b) 33 Distributions paid to Limited Partners (c) (415) Balance March 31, 2011 $ 5,663 Limited Partners Interests charge (a) 232 Contributions by Limited Partners (b) 899 Distributions paid to Limited Partners (c) (1,814) Balance December 31, 2011 $ 4,980 Limited Partners Interests charge (a) 486 Contributions by Limited Partners (b) 92 Distributions paid to Limited Partners (c) (229) Balance March 31, ,329 Current portion of Limited Partners Interests (d) (6) $ 5,323 a) The Limited Partners Interests charge was reduced for the change in the carried interest for the three months ended March 31, 2012 of $60 (2011 $85) and $91 for the year ended December 31, Onex share of the change in the carried interest for the three months ended March 31, 2012 was $23 (2011 $32) and $29 for the year ended December 31, b) Management fees received from the Limited Partners for the three months ended March 31, 2012 were $6 (2011 $30), and during the remainder of fiscal 2011, management fees received were $76. c) Distributions paid to Limited Partners during the first quarter of 2012 consisted primarily of the proceeds on the realized sale of Allison Transmission (note 4). Distributions paid to Limited Partners during 2011 primarily consisted of the proceeds on the sales of EMSC and Husky (note 3) and the partial dispositions of Spirit AeroSystems and TMS International. d) At March 31, 2012, the current portion of the Limited Partners Interests was $6 and was included in accounts payable and accrued liabilities in the unaudited interim consolidated balance sheet. The current portion represents $7 for the Limited Partners share of the repayment by JELD-WEN of a portion of its convertible promissory notes as well as the payment of accrued interest, net of an expense contribution of $1 from the Limited Partners. The net proceeds were distributed to the Limited Partners in April The restricted cash for the distribution was included in other current assets in the unaudited interim consolidated balance sheet at March 31, S H A R E CAPITA L a) The authorized share capital of the Company consists of: i) 100,000 Multiple Voting Shares, which entitle their holders to elect 60% of the Company s Directors and carry such number of votes in the aggregate as represents 60% of the aggregate votes attached to all shares of the Company carrying voting rights. The Multiple Voting Shares have no entitlement to a distribution on winding up or dissolution other than the payment of their nominal paid-in value. ii) An unlimited number of Subordinate Voting Shares, which carry one vote per share and as a class are entitled to 40% of the aggregate votes attached to all shares of the Company carrying voting rights; to elect 40% of the Directors; and to appoint the auditors. These shares are entitled, subject to the prior rights of other classes, to distributions of the residual assets on winding up and to any declared but unpaid cash dividends. The shares are entitled to receive cash dividends, dividends in kind and stock dividends as and when declared by the Board of Directors. The Multiple Voting Shares and Subordinate Voting Shares are subject to provisions whereby, if an event of change occurs (such as Mr. Schwartz, Chairman and CEO, ceasing to hold, directly or indirectly, more than 5,000,000 Subordinate Voting Shares or related events), the Multiple Voting Shares will thereupon be entitled to elect only 20% of the Directors and otherwise will cease to have any general voting rights. The Subordinate Voting Shares would then carry 100% of the general voting rights and be entitled to elect 80% of the Directors. Onex Corporation First Quarter Report

54 N OT E S TO I N T E R I M C O N S O L I DAT E D F I N A N C I A L S TAT E M E N T S iii) An unlimited number of Senior and Junior Preferred Shares issuable in series. The Directors are empowered to fix the rights to be attached to each series. b) At March 31, 2012, the issued and outstanding share capital consisted of 100,000 Multiple Voting Shares (December 31, ,000) and 115,072,846 Subordinate Voting Shares (December 31, ,117,316). The Multiple Voting Shares have a nominal paidin value in these unaudited interim consolidated financial statements. There were no issued and outstanding Senior and Junior Preferred shares at March 31, 2012 or December 31, c) During the first three months of 2012, under the Dividend Re investment Plan, the Company issued 1,126 Subordinate Voting Shares ( ) at an average cost of C$34.91 per share (2011 C$32.34). In the first three months of 2012 and 2011, no Subordinate Voting Shares were issued upon the exercise of stock options. Onex renewed its Normal Course Issuer Bid in April 2012 for one year, permitting the Company to purchase on the Toronto Stock Exchange up to 10% of the public float of its Subordinate Voting Shares. The 10% limit represents approximately 8.9 million shares. During the first three months of 2012, the Company repurchased and cancelled under its Normal Course Issuer Bid 45,596 of its Subordinate Voting Shares at a cash cost of $1 (C$1). The excess of the purchase cost of these shares over the average paid-in amount was $1 (C$1), which was charged to retained earnings. The Company did not repurchase any shares under its Normal Course Issuer Bid during the first three months of d) During the first three months of 2012 and 2011, the total cash consideration paid on 709,400 options ( ,750) surrendered was $14 (C$14) and less than $1 (less than C$1), respectively. This amount represents the difference between the market value of the Subordinate Voting Shares at the time of surrender and the exercise price, both as determined under Onex Stock Option Plan, as described in note 18(e) to the 2011 audited annual consolidated financial statements. In addition, 1,993 options (2011 nil) expired during the first three months of At March 31, 2012, the Company had 13,325,105 options (December 31, ,036,498) outstanding to acquire Subordinate Voting Shares, of which 11,182,798 options were vested and of those, 10,659,715 options were exercisable. The exercisable options have a weighted average exercise price of C$ e) The directors have chosen to receive their Directors fees in Deferred Share Units ( DSUs ) in lieu of cash. During the first three months of 2012 and 2011, no DSUs were redeemed. At March 31, 2012, 450,284 Director DSUs were outstanding (December 31, ,388). Certain members of Onex management have chosen to apply a portion of their annual compensation earned to acquire DSUs based on the market value of Onex shares at the time. In January 2012, 65,832 DSUs ( ,477) were issued to certain members of Onex management in lieu of a portion of cash compensation for the 2011 fiscal year. At March 31, 2012, 509,322 Management DSUs were outstanding (December 31, ,139). The Company has entered into forward agreements with a counterparty financial institution to hedge the Company s exposure to changes in the market value of Onex Subordinate Voting Shares associ ated with the Management DSUs, as described in note 1 to the 2011 audited annual consolidated financial statements. 8. OT H E R I T E M S Three months ended March Restructuring (a) $ 30 $ 15 Transition, integration and other (b) 3 5 Unrealized carried interest due to Onex and ONCAP management (c) Foreign exchange gains (4) (9) Other (d) (19) (4) $ 47 $ 60 a) Restructuring expenses are typically to provide for the costs of facility consolidations and workforce reductions incurred at the operating companies. The operating companies record restructuring charges relating to employee terminations, contractual lease obligations and other exit costs when the liability is incurred. The recognition of these charges requires management to make certain judgements regarding the nature, timing and amounts associated with the planned restructuring activities, including estimating sublease income and the net recovery from equipment to be disposed of. At the end of each reporting period, the operating companies evaluate the appropriateness of the remaining accrued balances. The operating companies with restructuring activities at December 31, 2011 continue to implement their restructuring activities and no significant amendments or additional plans have been established during the first quarter of The closing balance of restructuring provisions consisted of the following at: March 31, 2012 December 31, 2011 Employee termination costs $ 17 $ 23 Lease and other contractual obligations Facility exit costs and other 1 2 $ 47 $ Onex Corporation First Quarter Report 2012

55 N OT E S TO I N T E R I M C O N S O L I DAT E D F I N A N C I A L S TAT E M E N T S b) Transition, integration and other expenses are typically to provide for the costs of transitioning activities of an operating company from a prior parent company upon acquisition and to integrate new acquisitions at the operating companies. c) Unrealized carried interest reflects the change in the amount of carried interest due to Onex and ONCAP management through the Onex Partners and ONCAP Funds. The unrealized carried interest is calculated based on current fair values of the Funds investments and the overall unrealized gains in each respective Fund in accordance with the limited partnership agreements. The unrealized carried interest liability is recorded in other non-current liabilities and reduces the amount due to the Limited Partners, as described in note 6. The liability will be recovered upon the realization of the Limited Partners share of the underlying Onex Partners and ONCAP Fund investments. d) Other includes realized and unrealized gains on investments in securities held by the operating companies and gains on the sale of tax losses, as described in note NET EARNINGS PER SUBORDINATE VOTING SHARE The weighted average number of Subordinate Voting Shares for the purpose of the earnings per share calculations was as follows: Three months ended March Weighted average number of shares outstanding (in millions): Basic Diluted R E L AT E D PA R T Y T R A N S ACT I O N S In January and May 2012, Onex completed the sale of entities, whose sole assets were certain tax losses, to companies controlled by Mr. Gerald W. Schwartz, who is Onex controlling shareholder. In the January 2012 transaction, Onex received $2 (C$2) in cash for Canadian tax losses of C$20. The entire $2 (C$2) was recorded as a gain in the first quarter of In the May 2012 transaction, Onex received $5 (C$5) in cash for Canadian tax losses of C$53. The entire $5 (C$5) will be recorded as a gain in the second quarter of Onex has significant Canadian non-capital and capital losses available; however, Onex does not expect to generate sufficient taxable income to fully utilize these losses in the foreseeable future. As such, no benefit was previously recognized in the unaudited interim consolidated financial statements. In connection with these transactions, Deloitte & Touche LLP, an independent accounting firm retained by Onex Audit and Corporate Governance Committee, provided opinions that the values received by Onex for the tax losses were fair. Onex Audit and Corporate Governance Commit tee, all the members of which are independent directors, unanimously approved these transactions. 11. S U B S E Q U E N T E V E N T S Onex and certain operating companies may enter into agreements to acquire or make investments in other businesses. These transactions are typically subject to a number of conditions, many of which are beyond the control of Onex or the operating companies. The effect of these planned transactions, if completed, may be significant to the consolidated financial position of Onex. Certain operating companies completed refinancing of debt subsequent to March 31, 2012, which is described in note 5. a) Spirit AeroSystems On April 14, 2012, Spirit AeroSystems Wichita, Kansas facility was hit with a tornado, which caused significant structural damage to several buildings and disruption of utilities. The company immediately implemented its emergency management and disaster recovery plans, and initially suspended operations to ensure the safety of its employees, undertake a comprehensive damage evaluation, and develop a plan for systematically resuming production. Spirit AeroSystems production equipment, work-in-process and capabilities generally remained intact, and the company resumed production on April 23, Spirit AeroSystems main supply agreement with The Boeing Company ( Boeing ), which covers production of the Boeing 737, 747, 767 and 777, includes an Excusable Delay clause, which covers delays resulting from acts of God and unusually severe weather, and provides for schedule relief for up to three months. Spirit AeroSystems is assessing the likely impact of the tornado damage on future period results and expects to recover a substantial portion of its losses through insurance proceeds. Onex is unable to determine at this time whether the losses Spirit AeroSystems may record as a result of the storm will have a material impact on Onex future reported consolidated results of operations. b) Hawker Beechcraft The decline in the general aviation industry over the past three years resulted in Hawker Beechcraft being unable to meet certain of its financial obligations. During the second quarter of 2012, Hawker Beechcraft filed for bankruptcy protection in the United States. It is contemplated that Onex will have a minimal ownership interest in Hawker Beechcraft following the restructuring. Hawker Beechcraft is included in the Investments in Associates at fair value in the unaudited interim consolidated financial statements. The net carrying value of the investment in Hawker Beechcraft recorded in the unaudited interim consolidated financial statements at March 31, 2012 was $11. This amount represents the market value at March 31, 2012 of the public long-term debt held by Onex Partners II, Onex and management, of which Onex share was $4. Onex Corporation First Quarter Report

56 N OT E S TO I N T E R I M C O N S O L I DAT E D F I N A N C I A L S TAT E M E N T S 12. I N FO R M AT I O N B Y I N D U S T R Y S E G M E N T 2012 Industry Segments (Unaudited) (in millions of U.S. dollars) Three months ended March 31, 2012 Electronics Manufacturing Services Aerostructures Healthcare Financial Services Customer Care Services Metal Services Building Products Other (a) Consolidated Total Revenues $ 1,691 $ 1,266 $ 1,209 $ 293 $ 364 $ 747 $ 731 $ 516 $ 6,817 Cost of sales (excluding amortization of property, plant and equipment, intangible assets and deferred charges) (1,559) (1,011) (841) (148) (233) (693) (608) (314) (5,407) Operating expenses (55) (47) (235) (103) (93) (17) (114) (158) (822) Interest income Amortization of property, plant and equipment (17) (28) (32) (1) (6) (13) (26) (17) (140) Amortization of intangible assets and deferred charges (3) (7) (42) (4) (7) (3) (4) (13) (83) Interest expense of operating companies (1) (18) (48) (1) (22) (21) (15) (11) (137) Increase in value of investments in associates at fair value, net Stock-based compensation expense (10) (5) (3) (70) (88) Other items 1 3 (3) 6 (2) (25) (27) (47) Limited Partners Interests charge (486) (486) Earnings (loss) before income taxes $ 47 $ 153 $ 6 $ 42 $ 1 $ $ (60) $ 36 $ 225 Recovery of (provision for) income taxes (4) (48) 9 (16) (3) 2 14 (46) Net earnings (loss) for the period $ 43 $ 105 $ 15 $ 26 $ (2) $ $ (58) $ 50 $ 179 Net earnings (loss) attributable to: Equity holders of Onex Corporation $ 4 $ 17 $ 9 $ 24 $ (1) $ $ (40) $ 47 $ 60 Non-controlling interests $ 39 $ 88 $ 6 $ 2 $ (1) $ $ (18) $ 3 $ 119 Net earnings (loss) for the period $ 43 $ 105 $ 15 $ 26 $ (2) $ $ (58) $ 50 $ 179 Total assets $ 2,955 $ 5,228 $ 4,175 $ 4,904 $ 638 $ 1,029 $ 2,605 $ 8,873 $ 30,407 Long-term debt (b) $ $ 1,151 $ 2,661 $ 203 $ 633 $ 320 $ 525 $ 1,682 $ 7,175 (a) Includes Allison Transmission, Hawker Beechcraft, RSI, Tropicana Las Vegas, Tomkins, ONCAP II, ONCAP III, Onex Real Estate, Flushing Town Center, Onex Credit Partners CLO and the parent company. (b) Long-term debt includes current portion, excludes finance leases and is net of financing charges. 54 Onex Corporation First Quarter Report 2012

57 N OT E S TO I N T E R I M C O N S O L I DAT E D F I N A N C I A L S TAT E M E N T S 2011 Industry Segments (Unaudited) (in millions of U.S. dollars) Three months ended March 31, 2011 Electronics Manufacturing Services Aerostructures Healthcare Financial Services Customer Care Services Metal Services Other (a) Consolidated Total Revenues $ 1,800 $ 1,050 $ 1,200 $ 299 $ 343 $ 664 $ 291 $ 5,647 Cost of sales (excluding amortization of property, plant and equipment, intangible assets and deferred charges) (1,664) (890) (834) (141) (224) (612) (163) (4,528) Operating expenses (59) (42) (231) (106) (92) (16) (129) (675) Interest income Amortization of property, plant and equipment (15) (26) (32) (1) (8) (12) (12) (106) Amortization of intangible assets and deferred charges (4) (7) (42) (4) (6) (3) (6) (72) Interest expense of operating companies (2) (21) (69) (1) (19) (9) (6) (127) Increase in value of investments in associates at fair value, net Stock-based compensation expense (17) (3) (1) (67) (88) Other items (6) 1 (7) 2 (4) (46) (60) Limited Partners Interests charge (395) (395) Earnings (loss) before income taxes and discontinued operations (15) 48 (10) 12 (353) (223) Recovery of (provision for) income taxes (3) (16) (9) (12) 3 (4) (6) (47) Earnings (loss) from continuing operations (24) 36 (7) 8 (359) (270) Earnings from discontinued operations (note 3) Net earnings (loss) for the period $ 30 $ 46 $ 12 $ 36 $ (7) $ 8 $ (330) $ (205) Net earnings (loss) attributable to: Equity holders of Onex Corporation $ 3 $ 11 $ (19) $ 32 $ (5) $ 8 $ (330) $ (300) Non-controlling interests (2) 95 Net earnings (loss) for the period $ 30 $ 46 $ 12 $ 36 $ (7) $ 8 $ (330) $ (205) (Unaudited) (in millions of U.S. dollars) As at December 31, 2011 Electronics Manufacturing Services Aerostructures Healthcare Financial Services Customer Care Services Metal Services Building Products Other (a) Consolidated Total Total assets $ 2,970 $ 4,978 $ 4,194 $ 4,808 $ 631 $ 1,045 $ 2,581 $ 8,170 $ 29,377 Long-term debt (b) $ $ 1,157 $ 2,670 $ 203 $ 652 $ 377 $ 481 $ 1,421 $ 6,961 (a) Includes Allison Transmission, Hawker Beechcraft, RSI, Tropicana Las Vegas, Tomkins, ONCAP II, Onex Real Estate, Flushing Town Center and the parent company. (b) Long-term debt includes current portion, excludes finance leases and is net of financing charges. Onex Corporation First Quarter Report

58 SHAREHOLDER INFORMATION First Quarter Dividend A dividend of C$ per Subordinate Voting Share was paid on April 30, 2012 to shareholders of record as of April 13, Shares The Subordinate Voting Shares of the Company are listed and traded on the Toronto Stock Exchange. Share Symbol OCX Shareholder Dividend Reinvestment Plan The Dividend Reinvestment Plan provides shareholders of record who are resident in Canada a means to reinvest cash dividends in new Subordinate Voting Shares of Onex Corporation at a market-related price and without payment of brokerage commissions. To participate, registered shareholders should contact Onex share registrar, CIBC Mellon Trust Company. (1) Non-registered shareholders who wish to participate should contact their investment dealer or broker. Corporate Governance Policies A presentation of Onex corporate governance policies is included in the Management Information Circular that is mailed to all shareholders and is available on Onex website. Registrar and Transfer Agent CIBC Mellon Trust Company (1) P.O. Box 700 Postal Station B Montreal, Quebec H3B 3K3 (416) or call toll-free throughout Canada and the United States or inquiries@canstockta.com All questions about accounts, stock certificates or dividend cheques should be directed to the Registrar and Transfer Agent. Electronic Communication with Shareholders We encourage individuals to receive Onex shareholder communications electronically. You can submit your request online by visiting CIBC Mellon Trust Company s (1) website at or contacting them at (1) Canadian Stock Transfer Company Inc. acts as the Administrative Agent for CIBC Mellon Trust Company. Investor Relations Contact Requests for copies of this report, other quarterly reports, annual reports and other corporate communications should be directed to: Investor Relations Onex Corporation 161 Bay Street P.O. Box 700 Toronto, Ontario M5J 2S1 (416) investor@onex.com Website: Duplicate Communication Registered holders of Onex Corporation shares may receive more than one copy of shareholder mailings. Every effort is made to avoid duplication, but when shares are registered under different names and/or addresses, multiple mailings result. Shareholders who receive but do not require more than one mailing for the same ownership are requested to write to the Registrar and Transfer Agent and arrangements will be made to combine the accounts for mailing purposes. Shares Held in Nominee Name To ensure that shareholders whose shares are not held in their name receive all Company reports and releases on a timely basis, a list for direct electronic distributions is maintained by the Company. If you would like your name added to this list, please forward your request to Investor Relations at Onex. Typesetting by Moveable Inc. Printed in Canada 56 Onex Corporation First Quarter Report 2012

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