THIRD QUARTER REPORT TO UNITHOLDERS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010

THIRD QUARTER REPORT TO UNITHOLDERS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010 W A J A X I N C O M E F U N D 2010

WAJAX INCOME FUND News Release TSX Symbol: WJX.UN WAJAX REPORTS SIGNIFICANTLY IMPROVED THIRD QUARTER 2010 RESULTS AND DECLARES A SPECIAL DISTRIBUTION FOR NOVEMBER (Dollars in millions, except per unit data) Three Months Ended Nine Months Ended 2010 2009 2010 2009 CONSOLIDATED RESULTS Revenue $294.6 $234.6 $795.2 $748.1 Net earnings $19.4 $6.8 $40.0 $25.9 Basic earnings per unit $1.17 $0.41 $2.41 $1.56 Distributable cash (1) $19.4 $9.6 $41.6 $32.3 Basic distributable cash per unit (1) $1.17 $0.58 $2.51 $1.95 SEGMENTS Revenue - Mobile Equipment $144.9 $112.9 $396.1 $369.5 - Industrial Components $76.1 $66.6 $225.1 $213.5 - Power Systems $74.6 $56.0 $177.1 $167.6 Earnings - Mobile Equipment $9.8 $5.9 $27.5 $22.2 % margin 6.8% 5.2% 6.9% 6.0% - Industrial Components $4.2 $2.0 $9.4 $3.7 % margin 5.5% 2.9% 4.2% 1.7% - Power Systems $8.1 $1.5 $12.5 $7.4 % margin 10.8% 2.7% 7.1% 4.4% (1) Denotes non-gaap measure. See Non-GAAP Measures section in the attached Management s Discussion and Analysis (MD&A). Toronto, Ontario November 4, 2010 Wajax Income Fund today announced significantly improved third quarter 2010 results and declared a special distribution for November. Third Quarter Highlights Consolidated revenue increased 26% compared to last year. Mobile Equipment revenues increased 28% on higher equipment and aftermarket volumes in all product categories. Power Systems sales were 33% higher mainly as a result of improved equipment and parts and service sales to energy sector customers in western Canada. Industrial Components segment revenue increased 14% yearover-year on improved market demand in a number of industry sectors, primarily oil and gas and metal processing. Consolidated net earnings in the quarter of $19.4 million, or $1.17 per unit represented a near threefold increase from $6.8 million, or $0.41 per unit recorded last year. The increase in earnings is attributable to the higher revenues in all three businesses, as well as improved gross margins in Power Systems and Industrial Components.

Basic distributable cash (see Non-GAAP Measures section in the MD&A) of $1.17 per unit substantially increased from the $0.58 per unit recorded the previous year as a result of the improved earnings. Funded debt, net of cash, declined $16.2 million in the quarter to $53.6 million at, 2010 primarily as a result of earnings exceeding distributions and a $7.0 million reduction in noncash working capital. On February 26, 2010 the Fund announced as part of its plan to convert to a corporation effective January 1, 2011 that its objective was to maintain monthly distributions at $0.15 per unit throughout 2010 and into 2011 after conversion. In order to achieve this objective, it was anticipated that increases in earnings would be utilized to absorb, to the extent possible, the impact of the corporate tax burden Wajax will be subject to in 2011. Consistent with this objective, the Fund announced its regular monthly distributions for November and December will be maintained at $0.15 per unit ($1.80 annualized). In addition, unlike previous years when the Fund declared a special distribution at year-end equal to the excess of the Fund s taxable income over aggregate monthly distributions, the Fund began to declare monthly special distributions in August of this year for the excess taxable income it expects to generate in 2010. As a result, the Fund declared special monthly cash distributions of $0.20 per unit for each of August, September and October. In keeping with this policy, today the Fund announced a special cash distribution of $0.40 per unit for November. Any special distribution for December will be considered at the Fund s December 15 board meeting. The $0.15 per unit regular monthly cash distribution for November and December will be paid on December 20, 2010 and January 20, 2011 to unitholders of record on November 30 and December 31 respectively. The $0.40 per unit special cash distribution for November will be paid on December 20 to unitholders of record on November 30. There can be no assurance, however, that the Fund s objective to maintain monthly distributions by way of dividends into 2011 will be achieved, or that dividends will be paid in such amounts or at all. The board of Wajax Corporation after conversion will have the discretion to modify its dividend policy at any time. The ability to pay dividends and the actual amount of such dividends will be dependent upon, among other things, the financial performance of Wajax, fluctuations in working capital, the sustainability of margins, capital expenditures, any contractual restrictions on distributions or dividends, including any agreements with lenders to Wajax, and the satisfaction of solvency tests imposed by the CBCA for the declaration of dividends. The Fund also announced that Mr. Brian Dyck has been appointed Senior Vice President, Mobile Equipment to succeed Mr. Mark Whitman who has elected to retire effective March 1, 2011. Brian has been with Wajax for the past 17 years and over that time has assumed increased responsibilities and most recently was General Manager, Mobile Equipment, Western Region. Commenting on the third quarter results and the outlook for the rest of the year, Neil Manning, President and CEO, stated Third quarter consolidated earnings continued to be better than expected as market demand for our products and services continued to be stronger than the previous year. In the Mobile Equipment business, demand for equipment and parts and service in all product categories was improved from last year. Daily sales in Industrial Components stabilized at levels ahead of 2009 across a number of industry sectors and Power Systems experienced significantly higher sales of engine and power generation packages to western Canada energy sector customers. For the remainder of 2010 we expect sales for most of our products and services will continue to exceed the levels experienced last year in spite of the fact that we are experiencing equipment inventory shipment delays from certain suppliers. As well, even though backlogs are down largely as a result of significant order deliveries in the quarter, quoting activity for new equipment remains strong, particularly in the mining and resource sectors. Overall, we expect to continue to achieve positive revenue and earnings growth in the fourth quarter of this year compared to the fourth quarter of 2009.

Wajax is a diversified income fund that has three core distribution businesses engaged in the sale and after-sales parts and service support of mobile equipment, industrial components and power systems, through a network of over 110 branches across Canada. Its customer base spans natural resources, construction, transportation, manufacturing, industrial processing and utilities. This news release contains forward-looking information. Please refer to the Forward-Looking Statements section in the accompanying Management Discussion and Analysis.

Management s Discussion and Analysis Q3 2010 The following management s discussion and analysis ( MD&A ) discusses the consolidated financial condition and results of operations of Wajax Income Fund (the Fund or Wajax ) for the quarter ended, 2010. This MD&A should be read in conjunction with the information contained in the interim Unaudited Consolidated Financial Statements and accompanying notes for the quarter ended, 2010, the annual Audited Consolidated Financial Statements and accompanying notes of the Fund for the year ended December 31, 2009 and the associated MD&A. Information contained in this MD&A is based on information available to management as of November 4, 2010. Unless otherwise indicated, all financial information within this MD&A is in millions of dollars, except per unit data. Additional information, including the Fund s Annual Report and Annual Information Form, are available at www.sedar.com. Responsibility of Management and the Board of Trustees Management is responsible for the information disclosed in this MD&A and the Consolidated Financial Statements and accompanying notes, and has in place appropriate information systems, procedures and controls to ensure that information used internally by management and disclosed externally is materially complete and reliable. The Fund s Board of Trustees has approved this MD&A and the interim Unaudited Consolidated Financial Statements and accompanying notes. In addition, the Fund s Audit Committee, on behalf of the Board of Trustees, provides an oversight role with respect to all public financial disclosures made by the Fund, and has reviewed this MD&A and the interim Unaudited Consolidated Financial Statements and accompanying notes. Disclosure Controls and Procedures and Internal Control over Financial Reporting The Fund has designed disclosure controls and procedures ( DC&P ) to provide reasonable assurance that material information relating to the Fund is made known to the Chief Executive Officer and the Chief Financial Officer, particularly during the period in which the interim filings are being prepared. The Fund has designed internal controls over financial reporting ( ICFR ) to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with Canadian Generally Accepted Accounting Principles. Wajax Income Fund Overview The Fund is an unincorporated open-ended limited purpose trust established under the laws of the Province of Ontario pursuant to a declaration of trust dated April 27, 2005. The Fund was created to indirectly invest, on June 15, 2005, in substantially all of the assets and business formerly conducted by Wajax Limited. The Fund intends to make monthly cash distributions, generally payable to unitholders of record on the last business day of each calendar month and to be paid on or about the 20 th day of the following month. The Fund may make special cash and/or special non-cash distributions during or at the end of the year to ensure, as provided in the Fund s Declaration of Trust, that the Fund s total distributions for the year are equal to its taxable income for the year. Cash distributions are dependent on, among other things, the cash flow of the Fund. See also the Conversion to corporate structure section. The Fund s core distribution businesses are engaged in the sale and after-sales parts and service support of mobile equipment, industrial components and power systems, through a network of over 110 branches across Canada. The Fund is a multi-line distributor and represents a number of leading worldwide manufacturers in its core businesses. Its customer base is diversified, spanning natural resources, construction, transportation, manufacturing, industrial processing and utilities.

The Fund s strategy is to grow earnings in all segments through continuous improvement of operating margins and revenue growth while maintaining the Fund s strong balance sheet. Revenue growth will be achieved through market share gains, expansion into new geographic territories and the addition of new complementary product lines either organically or through acquisitions. Forward-Looking Information This MD&A contains forward-looking statements. These statements relate to future events or future performance and reflect management s current expectations and assumptions. The words anticipate, expect, believe, may, should, estimate, project, outlook, forecast or similar words are used to identify such forward-looking information. In particular, but without limitation, this MD&A contains forwardlooking statements relating to: the conversion of the Fund to a corporation, the timing of the effective date of the conversion, the potential for the continued payment of distributions by the Fund until the effective date of the conversion, and the potential for payment of dividends by Wajax Corporation following completion of the conversion. Such forward-looking statements reflect management s current beliefs and are based on information currently available to management of the Fund. In particular, forward-looking statements relating to the potential for the continued payment of distributions by the Fund until the effective date of the conversion and the potential payment of dividends by Wajax Corporation following completion of the conversion are based on: the financial and operating attributes of the Fund as at the date hereof, the anticipated operating and financial results of the Fund from the date hereof to the effective date, the anticipated operating and financial results of Wajax Corporation after the effective date, the views of management and the board of trustees of the Fund respecting the benefits associated with the conversion, and the views of management and the board of trustees of the Fund regarding current and anticipated market conditions. Although we believe that the expectations represented in such forward-looking statements are reasonable, there is no assurance that such expectations will prove to be correct. By their very nature, forward-looking statements involve inherent risks and uncertainties (both general and specific) and the risk that the expectations represented in such forward-looking statements will not be achieved. Undue reliance should not be placed on forward-looking statements, as a number of important factors could cause the actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. These factors include, among other things: changes in laws and regulations affecting the Fund and its business operations, changes in taxation of the Fund, general business conditions and economic conditions in the markets in which the Fund and its customers compete, fluctuations in commodity prices, the Fund s relationship with its suppliers and manufacturers and its access to quality products, the ability of the Fund to maintain and expand its customer base, failure of the parties to the proposed conversion of the Fund to a corporation by way of plan of arrangement to satisfy the conditions thereof, inability to obtain required consents, permits or approvals, actual future market conditions being different than anticipated by management and the board of trustees of the Fund, and actual future operating and financial results of the Fund and/or Wajax Corporation being different than anticipated by management and the board of trustees of the Fund. You are cautioned that the foregoing list is not exhaustive. You are further cautioned that the preparation of financial statements in accordance with GAAP requires management to make certain judgments and estimates that affect the reported amounts of assets, liabilities, revenues and expenses. These estimates may change, having either a negative or positive effect on net earnings as further information becomes available, and as the economic environment changes. Additional information on these and other factors is included in this MD&A under the heading Risk and Uncertainties and in other reports filed by the Fund with Canadian securities regulators and available at www.sedar.com. See also the full details of the conversion included in the Management Proxy Circular for the Fund s unitholder meeting held on May 7, 2010 and which is available at www.sedar.com. The forward-looking statements contained in this MD&A are expressly qualified in their entirety by this cautionary statement. The forward-looking statements contained herein are made as of the date of this MD&A and neither the Fund nor Wajax Corporation undertakes any obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise unless so required by applicable securities laws.

Consolidated Results Three months ended Nine months ended 2010 2009 (3) 2010 2009 (3) Revenue $294.6 $234.6 $795.2 $748.1 Gross profit Selling and administrative expenses $62.0 $42.5 $46.4 $39.0 $173.0 $131.6 $152.7 $124.9 Earnings before interest and income taxes $19.6 $7.5 $41.3 $27.8 Interest expense $1.1 $1.1 $3.1 $3.5 Income tax recovery (0.9) ($0.4) ($1.8) ($1.6) Net earnings $19.4 $6.8 $40.0 $25.9 Distributable cash (1) $19.4 $9.6 $41.6 $32.3 Cash distributions declared $14.1 $8.3 $29.1 $33.5 Distributions paid - Monthly $10.8 $9.1 $25.7 $37.0 Earnings per unit - Basic - Diluted $1.17 $1.15 $0.41 $0.40 $2.41 $2.37 $1.56 $1.54 Distributable cash per unit (1) - Basic (2) - Diluted $1.17 $1.15 $0.58 $0.57 $2.51 $2.47 $1.95 $1.92 Cash distributions declared per unit (2) $0.85 $0.50 $1.75 $2.02 Distributions paid per unit (2) - Monthly $0.65 $0.55 $1.55 $2.23 (1) Non-GAAP measure, see the Non-GAAP Measures and Distributable Cash sections. (2) Based on actual number of units outstanding on the relevant record date. (3) Certain 2009 comparative amounts have been reclassified to conform with the current period presentation. In particular, amounts recovered from customers or manufacturers in an amount of $7.8 million for the quarter and $25.9 million year to date have been reclassified out of selling and administrative expenses into revenue. In addition, service department overhead amounts of $15.3 million for the quarter and $49.9 million year to date have been reclassified out of selling and administrative expenses into cost of sales. The above reclassifications do not affect net earnings or cashflows. Revenue Revenue in the third quarter of 2010 increased 26% or $60.0 million to $294.6 million, from $234.6 million in 2009. Segment revenue increased 28% in Mobile Equipment, 14% in Industrial Components and 33% in Power Systems compared to last year. For the nine months ended, 2010, revenue increased 6% or $47.1 million. Gross profit Gross profit in the third quarter of 2010 increased $15.6 million due to the positive impact of higher revenue and gross profit margins compared to last year. The gross profit margin percentage for the quarter increased to 21.1% in 2010 from 19.8% in 2009 due primarily to improved margins in Power Systems and Industrial Components compared to last year. For the nine months ended, 2010, gross profit increased $20.3 million due to the positive impact of higher revenue and gross profit margins compared to last year. The gross profit margin

percentage increased to 21.8% in 2010 from 20.4% in 2009 on improved margins in all segments compared to last year. Selling and administrative expenses Selling and administrative expenses increased $3.5 million in the quarter compared to last year due mainly to higher personnel costs, including annual and long-term incentive accruals and other sales related expenses. Selling and administrative expenses as a percentage of revenue decreased to 14.4% in 2010 from 16.6% in 2009. For the nine months ended, 2010, selling and administrative expenses increased $6.7 million compared to last year. Increases in annual and long-term incentive accruals of $7.5 million and higher bad debt costs in Mobile Equipment were offset partially by reductions in personnel costs and other sales related expenses compared to last year. Selling and administrative expenses as a percentage of revenue decreased slightly to 16.6% in 2010 from 16.7% in 2009. Interest expense Quarterly interest expense of $1.1 million remained the same compared to last year. For the nine months ended, 2010, interest expense decreased $0.4 million compared to 2009 due mainly to lower funded debt net of cash ( funded net debt ) outstanding in 2010. Income tax expense The effective income tax rate of negative 4.8% for the quarter decreased from negative 6.5% the previous year. Included in the quarter was a $0.9 million future tax recovery adjustment (2009 - $0.1 million). This reflects an adjustment to the amount of the Fund s taxable temporary differences that are estimated to reverse after 2010, tax effected at rates that will apply in the year the differences are expected to reverse. Last year, a $0.3 million recovery of current income tax expense resulted from a tax loss in the Fund s subsidiary, Wajax Limited. For the nine months ended, 2010, the effective income tax rate of negative 4.7% decreased from negative 6.5% the previous year and included a $1.8 million future tax recovery adjustment (2009 - $0.3 million). Last year, a $1.3 million recovery of current tax expense resulted from a tax loss in the Fund s subsidiary Wajax Limited. The Fund s effective income tax rate was lower than the Fund s statutory income tax rate of 29.4% as the majority of the Fund s income is not currently subject to tax in the Fund. The Fund is a mutual fund trust as defined under the Income Tax Act (Canada) and is not currently taxable on its income to the extent that it is distributed to its unitholders. Pursuant to the terms of the Declaration of Trust, all taxable income earned by the Fund is distributed to its unitholders. Accordingly, no provision for income taxes is required on income earned by the Fund that is distributed to its unitholders. The Fund s corporate subsidiaries are subject to tax on their taxable income. Under legislation enacted on June 22, 2007, the Fund as a publicly traded income trust will pay tax on its income distributed commencing in 2011 at a rate that is substantially equivalent to the general corporate income tax rate. The Fund may become taxable on its distributions prior to 2011 if its equity capital grows beyond certain dollar limits measured by reference to the Fund s market capitalization on October 31, 2006. The Fund has not exceeded its growth limits at, 2010. On March 12, 2009 legislation was enacted to permit income funds to convert into public corporations without triggering adverse tax consequences to the income fund and its unitholders. See the Conversion to corporate structure section. Net earnings Quarterly net earnings of $19.4 million, or $1.17 per unit, increased $12.6 million from $6.8 million, or $0.41 per unit, in 2009. The positive impact of higher volumes and gross profit margins and increased income tax recoveries more than offset higher selling and administrative expenses compared to last year. For the nine months ended, 2010, net earnings increased $14.1 million to $40.0 million, or $2.41 per unit, from $25.9 million, or $1.56 per unit, in 2009. Higher volumes and gross profit margins,

lower interest expense and increased income tax recoveries more than offset higher selling and administrative expenses compared to last year. Comprehensive income Comprehensive income for the quarter of $18.6 million increased from $6.7 million the previous year due to the $12.6 million increase in net earnings, offset partially by a $0.8 million increase in other comprehensive loss compared to last year. The increase in other comprehensive loss resulted from gains on derivative contracts designated as cash flow hedges in prior periods transferred to cost of inventory and an increase in losses on derivative contracts designated as cash flow hedges outstanding at the end of the quarter. For the nine months ended, 2010, comprehensive income of $40.1 million increased $14.5 million from $25.6 million the previous year due to the $14.1 million increase in net earnings and a $0.4 million increase in other comprehensive income compared to last year. The increase in other comprehensive income resulted from losses on derivative contracts designated as cash flow hedges in prior periods transferred to cost of inventory, partially offset by losses on derivative contracts designated as cash flow hedges outstanding at the end of the period. Funded net debt Funded net debt of $53.6 million decreased $16.2 million compared to June 30, 2010. Third quarter cash flows from operating activities before changes in non-cash working capital of $21.8 million and a decrease in non-cash working capital of $6.9 million were partially offset by cash distributions of $10.8 million and capital spending of $1.6 million. Compared to, 2009 funded net debt decreased $47.2 million. The Fund s quarter-end debt-to-equity ratio of 0.25:1 at, 2010 decreased from last quarter s ratio of 0.34:1 and last year s ratio of 0.51:1. Distributable cash (see Non-GAAP Measures section) and distributions For the quarter ended, 2010 distributable cash was $19.4 million, or $1.17 per unit, compared to $9.6 million, or $0.58 per unit, the previous year. The increase was due to higher cash flows from operations before changes in non-cash working capital, offset partially by higher maintenance capital expenditures and a higher accrual for mid-term incentive compensation compared to last year. For the nine months ended, 2010 distributable cash of $41.6 million, or $2.51 per unit, compared to $32.3 million, or $1.95 per unit, the previous year. Higher cash flows from operations before changes in non-cash working capital were offset in part by a higher accrual for mid-term incentive compensation and higher maintenance capital expenditures compared to last year. For the quarter ended, 2010 monthly cash distributions declared totaled $0.85 per unit (2009 - $0.50 per unit) and included monthly distributions of $0.15 per unit for the months of July, August and September, and special distributions of $0.20 per unit for the months of August and September. For the nine months ended, 2010 monthly cash distributions declared totaled $1.75 per unit (2009 - $2.02 per unit). Distributable cash in excess of cash distributions declared for the nine months ended, 2010 of $12.5 million, or $0.76 per unit, provides the Fund an amount for future capital requirements or distributions. On November 4, 2010 the Fund announced a monthly distribution of $0.15 per unit ($1.80 annualized) and a special distribution of $0.40 per unit, for a total distribution of $0.55 per unit for the month of November payable on December 20, 2010 to unitholders of record on November 30, 2010. In addition, the Fund announced a monthly distribution of $0.15 per unit ($1.80 annualized) for the month of December payable on January 20, 2011 to unitholders of record on December 31, 2010. Any special distribution for December will be considered at the Fund s December 15, 2010 board meeting. See Conversion to corporate structure section. Unitholder tax information relating to distributions is available on the Fund s website at www.wajax.com. Backlog Consolidated backlog at, 2010 of $165.2 million decreased $20.8 million from $186.0 million at June 30, 2010 due mainly to significant deliveries in Mobile Equipment and Power Systems in the quarter out of backlog.

Conversion to corporate structure On May 7, 2010, unitholders approved the conversion of the Fund to a corporation pursuant to a plan of arrangement under the CBCA effective on or about January 1, 2011. The arrangement will result in the reorganization of the Fund into a corporate structure and Unitholders will receive one common share of a new corporation to be called Wajax Corporation for each Unit of the Fund held. Wajax Corporation will continue to be managed by the existing management team. Subsequent to the conversion, it is anticipated that Wajax Corporation will declare and pay a high proportion of net earnings in the form of monthly dividends. In particular, the Fund s objective is to maintain monthly distributions at $0.15 per unit into 2011 after conversion. In order to achieve this objective, it is anticipated that increases in earnings will be utilized to absorb, to the extent possible, the impact of the corporate tax burden Wajax will be subject to in 2011. Consistent with this objective, the Fund announced on November 4, 2010 its regular monthly distributions for November and December will be maintained at $0.15 per unit ($1.80 annualized). In addition, unlike previous years when the Fund declared a special distribution at year-end equal to the excess of the Fund s taxable income over aggregate monthly distributions, in August 2010 the Fund began to declare monthly special distributions for the excess taxable income it expects to generate in 2010. As a result, on November 4, 2010 the Fund also announced the declaration of a special monthly cash distribution of $0.40 per unit for the month November. Any special distribution for December will be considered at the Fund s December 15, 2010 board meeting. See Distributions section. There can be no assurance, however, that the Fund s objective to maintain monthly distributions by way of dividends of $0.15 per unit in 2011 will be achieved or that dividends will be paid in such amounts or at all. The board of Wajax Corporation after conversion will have the discretion to modify its dividend policy at any time. The ability to pay dividends and the actual amount of such dividends will be dependent upon, among other things, the financial performance of Wajax, fluctuations in working capital, the sustainability of margins, capital expenditures, any contractual restrictions on dividends, including any agreements with lenders to Wajax, and the satisfaction of solvency tests imposed by the CBCA for the declaration of dividends. See the Forward-Looking Information and Risks and Uncertainties sections. Quarterly Results of Operations Mobile Equipment Three months ended Nine months ended 2010 2009 2010 2009 Equipment $91.0 $61.3 $230.7 $208.0 Parts and service $53.9 $51.6 $165.4 $161.5 Segment revenue $144.9 $112.9 $396.1 $369.5 Segment earnings $9.8 $5.9 $27.5 $22.2 Segment earnings margin 6.8% 5.2% 6.9% 6.0% Revenue in the third quarter of 2010 increased $32.0 million, or 28%, to $144.9 million from $112.9 million in the third quarter of 2009. Segment earnings for the quarter increased $3.9 million to $9.8 million compared to the third quarter of 2009. The following factors contributed to the Mobile Equipment segment s third quarter results: Equipment revenue increased $29.7 million compared to last year. Specific quarter-over-quarter variances included the following: - Forestry equipment sales increased $9.5 million attributable to higher market demand for all product lines across Canada, including Tigercat and forestry related Hitachi and Peterson Pacific products. - Construction equipment revenue increased $9.3 million on increased market demand for new Hitachi excavators and JCB equipment.

- Crane and utility equipment revenue increased $8.2 million due primarily to higher deliveries to a major hydro utility customer. - Mining equipment sales increased $2.0 million on higher deliveries in western Canada. - Material handling equipment revenue increased $0.7 million. Parts and service volumes increased $2.3 million compared to last year due primarily to higher construction sector sales in western and eastern Canada. Segment earnings increased $3.9 million to $9.8 million compared to last year as the positive impact of higher volumes outweighed a small increase in selling and administrative expenses. Backlog of $72.4 million at, 2010 decreased $11.6 million compared to June 30, 2010 due mainly to a large delivery to a major hydro utility customer in the quarter out of backlog. Mr. Brian Dyck has been appointed Senior Vice President, Mobile Equipment to succeed Mr. Mark Whitman who has elected to retire effective March 1, 2011. Brian has been with Wajax for the past 17 years and over that time has assumed increased responsibilities and most recently was General Manager, Mobile Equipment, Western Region. Industrial Components Three months ended Nine months ended 2010 2009 2010 2009 Segment revenue $76.1 $66.6 $225.1 $213.5 Segment earnings $4.2 $2.0 $9.4 $3.7 Segment earnings margin 5.5% 2.9% 4.2% 1.7% Revenue of $76.1 million increased $9.5 million, or 14%, from $66.6 million in the third quarter of 2009. Segment earnings increased $2.2 million to $4.2 million in the quarter compared to the previous year. The following factors contributed to the segment s third quarter results: Bearings and power transmission parts sales increased $4.9 million compared to last year due mainly to increased sales to metal processing, industrial and forestry customers in eastern Canada and Ontario. Higher mining sector sales in eastern Canada and oil and gas sector sales in western Canada also contributed to the increase. Fluid power and process equipment products and service revenue increased $4.6 million. Higher sales as a result of improved mining and oil and gas drilling activities in western Canada and increased sales to metal processing and construction customers in all regions accounted for most of the increase. Segment earnings increased $2.2 million compared to last year. The positive impact of higher volumes and gross margins outweighed a $1.5 million increase in selling and administrative expenses. Margins were higher on both bearings and power transmission parts, and fluid power and process equipment products compared to last year. Selling and administrative expenses increased due primarily to higher annual and long-term incentive accruals and sales related expenses. Backlog of $29.3 million as of, 2010 decreased $1.2 million compared June 30, 2010.

Power Systems Three months ended Nine months ended 2010 2009 2010 2009 Equipment $40.1 $24.8 $72.1 $66.2 Parts and service $34.5 $31.2 $105.0 $101.4 Segment revenue $74.6 $56.0 $177.1 $167.6 Segment earnings $8.1 $1.5 $12.5 $7.4 Segment earnings margin 10.8% 2.7% 7.1% 4.4% Revenue in the third quarter increased $18.6 million, or 33%, to $74.6 million compared to $56.0 million in 2009. Segment earnings increased $6.6 million to $8.1 million in the quarter compared to the previous year. The following factors impacted quarterly revenue and earnings: Revenue at Waterous Power Systems ( Waterous ) in western Canada increased $20.1 million compared to last year. Equipment sales increased $16.6 million due mainly to an increase in oil and gas related equipment sales. Parts and service revenue increased $3.5 million due primarily to higher sales to off-highway customers, including those in the mining and oil and gas sectors. Revenue at the eastern Canada operation, DDACE Power Systems ( DDACE ) decreased by $1.5 million compared to 2009. Equipment sales decreased $1.3 million on lower new engine sales and parts and service revenue decreased $0.2 million. Segment earnings increased $6.6 million as the positive impact of higher volumes and gross margins at Waterous more than offset a $1.1 million increase in selling and administrative expenses. - Gross margins increased six percentage points compared to last year as a result of increases in equipment margins, due in part to cost overruns last year on generator set packages at Waterous, and higher parts and service margins. - Selling and administrative expenses increased due to higher annual and long-term incentive accruals, and other sales related expenses, offset partially by lower foreign exchange expenses compared to last year. Backlog of $63.5 million as of, 2010 decreased $8.0 million compared to June 30, 2010 due mainly to equipment deliveries in western Canada during the quarter out of backlog.

Selected Quarterly Information 2010 2009 2008 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Revenue $294.6 $272.3 $227.7 $259.1 $234.6 $248.7 $264.9 $317.3 Net earnings $19.4 $12.2 $8.4 $8.3 $6.8 $9.8 $9.3 $19.4 Net earnings per unit - Basic $1.17 $0.74 $0.50 $0.50 $0.41 $0.59 $0.56 $1.17 - Diluted $1.15 $0.72 $0.50 $0.50 $0.40 $0.59 $0.55 $1.15 Distributable cash (1) $19.4 $13.3 $9.0 $10.0 $9.6 $11.3 $11.4 $20.4 Distributable cash per unit (1) - Basic $1.17 $0.80 $0.54 $0.60 $0.58 $0.68 $0.69 $1.23 (1) Non-GAAP measure, see the Non-GAAP Measures section. A discussion of the Fund s previous quarterly results can be found in the Fund s quarterly MD&A reports available on SEDAR at www.sedar.com. Cash Flow, Liquidity and Capital Resources Cash Flows from Operating Activities Cash flows from operating activities amounted to $28.7 million in the third quarter of 2010, compared to $18.0 million the previous year. The increase was due to higher cash flows from operations before changes in non-cash working capital of $12.2 million, offset partially by lower non-cash working capital reductions of $1.5 million. For the nine months ended, 2010, cash flows from operating activities amounted to $46.6 million, compared to $61.3 million the previous year. The decline was due to a small increase in noncash working capital of $0.4 million in 2010 compared to a significant decrease of $27.4 million in 2009, offset partially by an increase in cash flows from operations before changes in non-cash working capital of $13.1 million. Changes in non-cash working capital include the following components: Three months ended Nine months ended Increase (decrease) in non-cash working 2010 2009 2010 2009 capital Accounts receivable $0.2 ($1.7) $23.7 ($33.9) Inventories $11.9 ($12.2) $12.9 ($24.1) Prepaid expenses and other recoverable amounts ($6.7) ($0.3) ($2.0) ($0.4) Accounts payable and accrued liabilities ($10.7) $5.8 ($32.5) $28.5 Income taxes payable ($1.7) $0.1 (1.7) $2.5 Total ($6.9) ($8.4) $0.4 ($27.4) Significant components of the changes in non-cash working capital for the quarter ended, 2010 are as follows: Inventory increased $11.9 million due primarily to increases in the Mobile Equipment and Power Systems segments. Accounts payable and accrued liabilities increased $10.7 million reflecting higher inventory trade payables and incentive accruals in all segments, offset partially by decreases in deferred income in Power Systems.

Prepaid expenses decreased $6.7 million due mainly to lower deposits with suppliers in Power Systems. Income taxes payable increased $1.7 million as a result of the receipt of a prior year tax refund owing. Significant components of non-cash working capital at, 2010 and the changes from December 31, 2009 are as follows: Accounts payable and accrued liabilities increased $32.5 million reflecting higher trade payables in all segments resulting from increased sales activity. Accounts receivable increased $23.7 million due to higher sales activity in all segments. Inventory increased $12.9 million due primarily to increases in the Mobile Equipment and Power Systems segments. Prepaid expenses decreased $2.0 million due mainly to lower deposits with suppliers in Power Systems. Income taxes payable increased $1.7 million due to receipt of a prior year tax refund owing. At, 2010 the Fund had invested $150.4 million in working capital, exclusive of cash and bank indebtedness, compared to $150.9 million at December 31, 2009. The $0.5 million decrease was due to a $3.3 million increase in distributions payable related to the $0.20 per unit special distribution declared for September 2010 partially offset by a $1.7 million increase in future income tax assets, $0.7 million of rental equipment transferred to inventory and the cash flow factors listed above. Investing Activities The Fund invested a net amount of $1.6 million in the third quarter of 2010 compared to $0.9 million the previous year. During the quarter, investing activities included $0.5 million of lift truck rental fleet additions net of disposals and $1.1 million of other various capital asset additions net of disposals. For the nine months ended, 2010, the Fund invested a net amount of $4.0 million compared to $4.3 million the previous year. Investing activities included $1.6 million of lift truck rental fleet additions net of disposals and $2.4 million of other various capital asset additions net of disposals. Financing Activities The Fund used $10.8 million of cash in financing activities in the third quarter of 2010 compared to $14.0 million in the third quarter of 2009. Monthly cash distribution paid to unitholders totaled $10.8 million, or $0.65 per unit for the quarter ended, 2010. For the nine months ended, 2010 the Fund used $25.8 million of cash in financing activities compared to $53.0 million in 2009. Monthly cash distribution paid to unitholders totaled $25.8 million, or $1.55 per unit for the nine months ended, 2010. Funded net debt of $53.6 million at, 2010 decreased $16.2 million compared to June 30, 2010. Third quarter cash flows from operating activities before changes in non-cash working capital of $21.8 million and a decrease in non-cash working capital of $6.9 million were partially offset by cash distributions of $10.8 million and capital spending of $1.6 million. The Fund s quarter-end debt-to-equity ratio of 0.25:1 at, 2010 decreased from last quarter s ratio of 0.34:1. Funded net debt of $53.6 million at, 2010 decreased $16.6 million compared to December 31, 2009. Cash flows from operating activities before changes in non-cash working capital of $47.0 million were offset by an increase in non-cash working capital of $0.4 million, cash distributions of $25.7 million and capital spending of $4.0 million. Compared to, 2009 funded net debt decreased $47.2 million. The Fund s period-end debt-to-equity ratio of 0.25:1 at, 2010 decreased from the ratio of 0.35:1 at December 31, 2009 and 0.51:1 at, 2009. Liquidity and Capital Resources At, 2010 the Fund had borrowed $80.0 million and issued $5.1 million of letters of credit for a total utilization of $85.1 million of its $175 million bank credit facility and had no utilization of its $15 million equipment financing facility. Borrowing capacity under the bank credit facility is dependent on the

level of the Fund s inventories on-hand and outstanding trade accounts receivables. At, 2010 borrowing capacity under the bank credit facility was equal to $175 million. The Fund s $175 million bank credit facility along with $15 million of capacity permitted in addition to the credit facility, should be sufficient to meet the Fund s short-term normal course working capital, maintenance capital and growth capital requirements. In the long-term the Fund may be required to access the equity or debt markets in order to fund significant acquisitions and growth related working capital and capital expenditures. On May 7, 2010, unitholders approved the conversion of the Fund to a corporation pursuant to a plan of arrangement under the Canada Business Corporations Act effective January 1, 2011. The arrangement will result in the reorganization of the Fund into a corporate structure and unitholders will receive one common share of a new corporation to be called Wajax Corporation for each Unit of the Fund held. Lenders providing the Fund s $175 million bank credit facility have agreed to the conversion of Wajax to a corporation provided the Fund is otherwise in compliance with the terms of its credit facility. In February 2008, The Canadian Accounting Standards Board confirmed that the use of International Financial Reporting Standards (IFRS) will be required in Canada for publicly accountable profit oriented enterprises for fiscal years beginning on or after January 1, 2011. The Fund will be required to report using IFRS beginning January 1, 2011. The Fund is currently in the process of evaluating the impact of the change to IFRS. As a result of adopting IFRS, the Fund anticipates that the reported values of its net assets, equity and earnings will change. These changes could impact the calculation of covenants under the current bank credit facility, potentially resulting in an event of default. The Fund s management has discussed these possibilities with its bankers who have amended the definitive agreement allowing for modification of debt covenants to reflect changes in financial statement balances as a result of adopting IFRS. See the Accounting Changes section. Financial Instruments The Fund uses derivative financial instruments in the management of its foreign currency and interest rate exposures. The Fund s policy is not to utilize derivative financial instruments for trading or speculative purposes. Significant derivative financial instrument transactions and those outstanding at the end of the quarter were as follows: The Fund has entered into the following interest rate swaps that have effectively fixed the interest rate on $80 million of the Fund s debt at the combined rate of 2.925%, plus applicable margins, until December 31, 2011: - On June 7, 2008 the delayed interest rate swap the Fund entered into on May 9, 2007 with two of its lenders became effective. As a result, the interest rate on the $30 million non-revolving term portion of the bank credit facility was effectively fixed at 4.60% plus applicable margins until expiry of the facility on December 31, 2011. - On January 23, 2009 the delayed interest rate swap the Fund entered into on December 18, 2008 with two of its lenders became effective. As a result, the interest rate on the $50 million revolving term portion of the bank credit facility was effectively fixed at 1.92% plus applicable margins until expiry of the facility on December 31, 2011. - Margins on the debt associated with the interest rate swaps depend on the Fund s Leverage Ratio and range between 0.75% and 2.5%. The Fund enters into short-term currency forward contracts to fix the exchange rate on the cost of certain inbound inventory and to hedge certain foreign currency-denominated sales to (receivables from) customers as part of its normal course of business. As at, 2010, the Fund had contracts outstanding to buy U.S.$37.7 million and 0.1 million and to sell U.S.$4.1 million (, 2009 to buy U.S.$20.6 million, December 31, 2009 to buy U.S.$20.5 million and to sell U.S.$0.03 million). The U.S. dollar contracts expire between October 2010 and December 2012, with a weighted average U.S. dollar rate of 1.0521 and a weighted average Euro dollar rate of 1.4062. The Fund measures financial instruments held for trading and not accounted for as hedging items, at fair value with subsequent changes in fair value being charged to earnings. Derivatives designated as effective hedges are measured at fair value with subsequent changes in fair value being charged to other

comprehensive income. The fair value of derivative instruments is estimated based upon market conditions using appropriate valuation models. The carrying values reported in the balance sheet for financial instruments are not significantly different from their fair values. Currency Risk There have been no material changes to currency risk since December 31, 2009. Contractual Obligations There have been no material changes to contractual obligations since December 31, 2009. Off Balance Sheet Financing The Mobile Equipment segment had $20.6 million of consigned inventory on-hand from a major manufacturer as at, 2010. In the normal course of business, Wajax receives inventory on consignment from this manufacturer which is generally sold to customers or purchased by Wajax. This consigned inventory is not included in the Fund s inventory as the manufacturer retains title to the goods. The Fund s off balance sheet financing arrangements, with non-bank lenders, include operating lease contracts in relation to the Fund s long-term lift truck rental fleet in the Mobile Equipment segment. At, 2010, the non-discounted operating lease commitment for the rental fleet was $7.1 million (December 31, 2009 - $11.5 million). In the event the inventory consignment program was terminated, the Fund would utilize interest free financing, if any, made available by the manufacturer and/or utilize capacity under its bank credit facility. Although management currently believes the Fund has adequate debt capacity, the Fund would have to access the equity or debt markets, or temporarily reduce distributions to accommodate any shortfalls in the Fund s credit facility. See the Liquidity and Capital Resources section. Non-GAAP Measures To supplement the consolidated financial statements, the Fund uses non-gaap financial measures that do not have standardized meanings prescribed by Canadian GAAP and are therefore unlikely to be comparable to similar measures used by other entities. Distributable cash and Distributable cash per unit are not recognized measures under GAAP, and the method of calculation adopted by the Fund may differ from methods used by other entities. Accordingly, Distributable cash and Distributable cash per unit as presented may not be comparable to similar measures presented by other entities. The Fund believes that Distributable cash and Distributable cash per unit are useful financial metrics as they represent the key determination of cash flow available for distribution to unitholders. Distributable cash and Distributable cash per unit should not be construed as an alternative to net earnings as determined by GAAP. Distributable cash is calculated as cash flows from operating activities adjusted for changes in non-cash working capital, less maintenance capital expenditures and amortization of deferred financing costs. Changes in non-cash working capital are excluded from distributable cash as the Fund currently has a $175 million bank credit facility which is available for use to fund general corporate requirements including working capital requirements, subject to borrowing capacity restrictions dependent on the level of the Fund s inventories on-hand and outstanding trade accounts receivable, and a $15 million demand inventory equipment financing facility with a non-bank lender. In addition, the Fund will periodically finance equipment inventory on a noninterest bearing basis through an equipment finance company. See the Distributable Cash section below for the method of calculating the Fund s Distributable cash. Maintenance capital expenditures is not a recognized measure under GAAP, and the method of calculation adopted by the Fund may differ from methods used by other entities. The Fund believes that Maintenance capital expenditures represents cash expenditures required to maintain normal operations. Maintenance capital expenditures exclude business acquisitions and land and building additions as they are not considered to be expenditures to maintain normal operations. See the Distributable Cash and Estimated Distributable Cash sections below for the method of calculating Maintenance capital