wells fargo 2013 q2 construction quarterly

Wells Fargo Equipment Finance, Inc.

Construction Quarterly

© 2013 Wells Fargo Equipment Finance, Inc. All rights reserved. MC-6040

Q2 2013

The Construction Group at Wells Fargo Equipment Finance continues to invest actively in U.S. construction companies. Construction Group executives don’t expect a rapid boost or significant drop in the overall market opportunity but regional strength of activity and growth in energy and housing bode well for the industry this year and next. As long as the U.S. economy maintains its slow-and-steady recovery, new opportunities for growth will likely continue to present themselves.

Introductory message from John Crum, Senior Vice President

Economic Indicators and additional commentary

Construction Industry Stock Index

1 5 72Recent news highlights on general construction topics

Find your local construction equipment finance specialist

8

1 | Construction Quarterly Newsletter | Q2 2013 wellsfargo.com/construction

Our team at Wells Fargo Equipment Finance continues to expect growing opportunities in the construction industry through 2013 and beyond. With these conditions in place, now may be the time to convert that equipment rental into an owned asset.

The industry is moving forward and building great things. I invite you to dig through the numbers and reports presented in this new edition of the Construction Quarterly and let me know what you think is coming.

One of the hallmarks of this slow-but-steady recovery in the economy and in the construction industry has been the resurgence of the equipment rental market. For the last few years, equipment distributors and rental companies have expanded their fleets to meet the growing demand for short-term construction equipment rentals. Uncertainty in the future of the construction industry often dissuades would-be buyers from making the long-term commitment associated with buying heavy construction equipment.

However, we are now finding an interesting conjunction of trends and conditions that make a compelling case for contractors to think more seriously about buying the equipment they use. Because renters pay a premium for their flexibility, if you are renting a significant portion of the equipment that you use your carrying costs may be more than they should be.

Consider for a moment, the reasons why owning a piece of equipment in today’s environment might make sense over renting:

• Low cost of capital won’t last forever. For qualifying customers, interest rates on long-lived, heavy construction equipment continue to hover near record lows. These rates will not last forever. If you can lock in a great rate now, the payment will be predictable for the life of that loan. Given today’s low-rate environment it may be time to take advantage of the growing economy and invest in equipment that will help to meet your future project needs.

• Used equipment values are holding steady. The most recent Rouse Rental Report indicates that used construction equipment generally continues to hold its value. Many types of heavyconstruction equipment are still in demand and as an ownedasset would be a plus on your balance sheet.

• Replacement equipment costs are rising. New construction equipment costs are on their way up. Equipment demand remains relatively strong in North America and implementation of Tier 4 standards will only push prices higher. You may want to get into some newer equipment before prices rise much more.

• Bonus Depreciation is still available. Equipment buyers are still able to take up to 50% in “bonus” depreciation on equipment they put into service in 2013. This may be the last year the industry can count on this added incentive to buy.

John Crum, National Sales Manager Wells Fargo Equipment Finance, Inc.Construction Group412-454-4629 • [email protected]

Wells Fargo Equipment Finance (WFEF) provides competitive fixed- and floating-rate loans and leases covering a full range of commercial equipment for businesses nationwide in the United States and Canada. Canadian business is transacted by Wells Fargo Equipment Finance Company. WFEF also offers floor planning and inventory financing, and vendor programs in selected industries. Wells Fargo Equipment Finance, Inc. is the second largest bank affiliated equipment leasing and finance company in the United States by asset portfolio and annual originations, with more than 140,000 customers, 55 branch locations, and 1,200 team members.

This report is brought to you by Wells Fargo’s dedicated team of construction equipment finance specialists and is available at wellsfargo.com/construction.For questions regarding this and other industry-specific publications by Wells Fargo Equipment Finance, please contact Greg Giauque at 480-784-2363 or at [email protected]

From the Corner Office

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Contractor cornerConstruction spending report by the U.S. Dept. of Commerce(6/3) Overall construction spending in April 2013 at a seasonally adjusted annual rate (SAAR) was an estimated $860.8 billion, up 0.4% from the revised March 2013 estimate of $857.7 billion and up 4.3% from April 2012. Other highlights:• Highway and Street construction spending in April was $76.7

billion, 0.5% above the revised March estimate of $76.2 billion and 3.4% lower than the year previous.

• Private non-residential construction totaled $300.1 billion, 2.2% above the revised March estimate of $293.7 billion and 0.6% above the year-ago estimate.

• Private residential construction was up 18.8% year-over-year to a SAAR of $301.9 billion.

• Public Power construction was up 10.8% and public Transportation construction increased by 16.1% year-over-year.

Source: U.S. Department of Commerce and Wells Fargo Securities, LLC

Ritchie Bros. Net Earnings slip 22% in Q1(4/30) Industrial equipment auctioneer Ritchie Bros. (RBA) announced net earnings for the three months ended March 31, 2013, were $14.0 million compared to $18.0 million in the year-ago period and $22.1 million for the three months ending December 31, 2012.

Q1-2013 Q1-2012 Q4-2012

Net Earnings $14.0 million $18.0 million $22.1 million

Auction Revenues $102.1 million $101.3 million $117.1 million

Gross Auction Proceeds $ 845.4 million $864.5 million $1.00 billion

New construction starts report by McGraw-Hill Construction(5/20) Based on data it collected, McGraw Hill Construction reported that the value of new construction starts in April 2013 slipped 1% year-over-year to a seasonally adjusted annual rate (SAAR) of $473.0 billion. Other highlights:• Year-to-date starts for the first four months of 2013 were 5%

lower than in 2012.• Non-residential building in April grew 6% year-over-year to a

SAAR of $144.3 billion but was down compared to the average of January, February and March.

• Non-building construction* dropped 7% to a SAAR of $130.8 billion, tempering the strong 46% climb in March and the 33% plunge in February.

• Residential construction for April slipped 1.0% month-to-month to a SAAR $198.0 billion. Year-to-date, residential construction is up 20% compared to the average during 2012.

*The non-building construction category comprises public works projects such as highways/bridges, sewers, water supply systems, electric utilities, etc.

Construction employment report(5/3) The April 2013 employment report showed total non-farm employment gain of 165,000 jobs representing the 10th consecutive month with gains of 100,000 jobs or more. The national unemployment rate now sits at 7.5%. Employment in the construction industry remained flat compared to the March 2013 report. However, construction employment had averaged gains of 27,000 jobs over the previous six months. Unemployment in the construction industry is currently estimated at 13.2%, down from 14.5% in April 2012.

Source: U.S. Department of Labor and Wells Fargo Securities, LLC

News highlights



Manufacturer news & reportsCaterpillar reports lower Q1 profit(4/22) Weaker U.S. demand for construction equipment combined with lower overall global demand for construction and mining equipment, led Caterpillar to lower Q1 results.

Q1-2013 Q1-2012 Q4-2012

Sales and Revenues $13.21 billion $15.98 billion $16.08 billion

Net profit $880 million $1.59 billion $697 million

The slower global outlook for construction and mining led to a decrease in the overall sales and revenue forecast (particularly in mining) for 2013 to $57-61 billion, down from the previous forecast range of $60-68 billion.

Terex sales dip 5% in Q1-2013; profit remains flat(4/24) Income from continuing operations ticked up slightly for Terex even as Net Sales in Q1-2013 dipped 5.3%. The aerial work platform business performed best due to strong rental market demand in the Americas.

Q1-2013 Q1-2012 Q4-2012

Income (Loss) from cont. operations

$20.9 million $20.5 million ($30.7) million

Net Sales $1.72 billion $1.82 billion $697 million

Other highlights:• Net sales for the AWP segment for Q1-2013 increased $89.3

million, or 21.3%, to $509.1 million versus Q1-2012. • Net sales for the Construction segment for Q1-2013 decreased

$83.3 million, or 22.9% to $279.8 million compared to a year ago.

• Net sales for the Cranes segment increased $15.7 million, or 3.4%, to $470.9 million versus the previous year.

Q1-2013 CNH Construction revenue drops 26%(4/30) CNH announced Q1-2013 net sales rose to 4.70 billion, a 1% increase compared to Q1-2012. Net income for the full company increased 21% year-over-year to $326 million.

Q1-2013 Q1-2012 Q4-2012

Net Sales of Construction Equipment

$754 million $1,024 million $915 million

Operating Profit (Loss) Construction Equipment

($26) million $34 billion ($42) million

Other highlights:• CNH Construction sales for the quarter fell 26% on lower

global equipment demand.• For 2013, the company expects construction equipment unit

volume will be down 5-10%.

Rental reviewUsed rental equipment values holding steady (5/31) According to Rouse Asset Services, average used equipment values for the 14 major rental categories that it tracks, increased by 1.0% for the six months ending April 30, 2013. Other highlights: • There was a 0.5% month-to-month increase in the 14-category

average. • Only 6 of the 14 equipment-specific indices showed month-to-

month increases. • Ten of the 14 categories showed increases over the most recent

six months. • Excavators showed the largest 6-month drop at -2.6% while Aerial

Work Platforms with an articulating boom showed the largest 6-month increase at +7.8%.

United Rentals and RSC complete first year as a combined company(4/16) United Rentals and RSC completed a full year as a combined company and reported – on a pro-forma basis* – rental revenue for Q1-2013 increased 5.4% compared to Q1-2012. EBITDA was $451 million, an increase of $59 million from the year prior.

Q1-2013 Q4-2012 Q3-2012

Total Revenue $1.10 billion $1.25 billion $1.22 billion

Rental Revenue $916 million $1.04 billion $1.05 billion

Net Income $21 million $41 million $73 million

Time utilization increased 30 basis points year-over-year to 64.2%. The company has reaffirmed its outlook for full year time utilization of approximately 68.0%.

*Assumes a combination of United Rentals and RSC financial results for Q1-2012. United Rentals and RSC officially merged on March 31, 2012.

Hertz Equipment Rental increases revenues 16.2% in Q1-2013(4/29) Hertz Equipment Rental worldwide revenues were $351.0 million for Q1-2013, a 16.2% increase from the prior year, driven by a 15.7% increase in equipment rental volumes and a 3.6% increase in pricing.

Q1-2013 Q1-2012 Q4-2012

Revenues $351.0 million $302.1 million $385.3 million

Income before taxes $32.1 million $ 10.2 million $51.4 million

In May, Hertz announced it will relocate its worldwide headquarters to Estero, Florida, near Fort Myers.



Astec earnings improve 10% but sales dip 2% in Q1-2013(4/23) Astec Industries reported Q1-2013 earnings from continuing operations increased 10% even as net sales decreased 2% from the previous year. Domestic sales improved 4% and the company’s domestic backlog increased 5%.

Q1-2013 Q1-2012 Q4-2012

Net Sales $247.8 million $252.0 million $227.6 million

Net Income from cont. operations

$13.3 million $12.0 million $5.4 million

Oshkosh fiscal Q2-2013 report shows improved operating margins in all segments (4/30) Specialty truck and construction equipment maker Oshkosh reported consolidated net income of $85.4 million, up from $42.8 million in fiscal Q2-2012. Net sales for the three months ending March 31, 2013, were $1.98 billion, down 3% from a year ago. Other highlights:• Defense segment sales decreased 16.2% to $827.6 million

compared to the previous year.• Access Equipment segment sales increased 7.5% to $817.4

million for the quarter due to strong North American demand.

Manitowoc Crane sales rise 7.8% in Q1-2013(4/30) Manitowoc reported Q1-2013 net sales in its Crane segment were up 7.8% from Q1-2012 on continued growth in the Americas and emerging markets.

Q1-2013 Q1-2012 Q4-2012

Crane Segment Sales $547.4 million $507.9 million $767.2 million

Operating Earnings $31.3 million $21.4 billion $56.3 million

Other highlights: • Q1-2013 orders were $569 million, down 16% from the year

previous due to the timing of the Bauma show.• Crane segment backlog totaled $776 million as of March 31,

2013, a $20 million increase from December 31, 2012. • Forecast for the crane segment is to achieve high single digit

percentage revenue growth.

Deere reports record earnings for fiscal Q2 of $1.08 billion(5/15) Deere and Co. reported net sales of equipment operations of $10.27 billion – a 9.1% increase – for fiscal Q2-2013 (90 days ending April 30, 2013). Net income for the quarter increased 2.6% from the previous year.

Q2-2013 Q2-2012 Q1-2013

Net Sales of Equipmt Operations

$10.27 billion $9.41 billion $6.77 billion

Net Income $1.08 billion $1.06 billion $649.7 million

Other highlights:• Construction and forestry segment sales decreased 6% in the

quarter due to lower shipment volumes. • Operating profit decreased to $81 million for the quarter from

$119 million the year prior. • Worldwide sales for the construction and forestry division are

projected to decline 5% in fiscal 2013.

Volvo CE Q1-2012 Sales decrease 33%(4/25) Volvo Construction Equipment reported a 33% drop in net sales in Q1-2013 compared to the year prior as global equipment demand tumbled. Operating income was down 76%. Other highlights: • Asia remains an important market for Volvo excavators and

wheel loaders but demand is down 41% year-over-year.• Full-year 2013 forecast for North America is for growth to

remain flat compared to 2012.

Komatsu Construction reports worldwide sales decrease 3.7%(4/25) For the fiscal year ending March 31, 2013, Komatsu Ltd. announced net sales of $20.05 billion, down 4.9% from a year ago. Net income was $1.34 billion down 24.4% from the year prior. Other highlights:• The forecast for 2013 is for sales to improved 8.8% and for net

income to increase 45%• Construction, Mining and Utility reported a worldwide net

sales decrease of 3.7% to $17.87 billion. Profit in this segment fell 15.2% to $2.22 billion.

• Demand for construction equipment fell in China (down 40.4%) and in Europe (down 16.8%) in the fiscal year. Sales in North America (+16.3%) and Japan (+2.2%) compensated.


Economic Indicators


JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APRDOW JONES (Last day closing) 12,633 12,952 13,212 13,214 12,393 12,880 13,009 13,091 13,437 13,096 13,104 13,861 14,054 14,579 14,840 15,354Change from previous month 3.4% 2.5% 2.0% 0.0% -6.2% 3.9% 1.0% 0.6% 2.6% -2.5% 0.1% 5.8% 1.4% 3.7% 1.8% 3.5%Change from previous year 6.2% 5.9% 7.2% 3.1% -1.4% 3.8% 7.1% 12.7% 23.1% 9.5% 8.8% 13.4% 11.2% 12.6% 12.3% 16.2%NASDAQ (Last day closing) 2,814 2,967 3,092 3,046 2,827 2,935 2,940 3,041 3,116 2,977 3,020 3,142 3,160 3,268 3,329 3,499Change from previous month 8.0% 5.4% 4.2% -1.5% -7.2% 3.8% 0.2% 3.4% 2.5% -4.5% 1.4% 4.0% 0.6% 3.4% 1.9% 5.1%Change from previous year 4.2% 6.6% 11.2% 6.0% -0.3% 5.8% 6.7% 17.9% 29.0% 10.9% 15.3% 20.6% 12.3% 10.1% 7.7% 14.9%Cons. Price Index (CPI) 1982-84 = 100 227.5 228.4 229.1 229.2 228.5 228.6 228.7 230.1 231.2 231.6 231.1 231.1 231.2 232.8 232.3 231.5Change from previous year 3.3% 3.2% 2.5% 1.9% 1.1% 1.3% 1.2% 1.6% 1.9% 2.3% 2.2% 2.4% 1.6% 1.9% 1.4% 1.0%Prod. Price Index (PPI) 1982 = 100 200.6 201.6 204.3 203.9 202.3 200.4 200.2 202.6 204.5 203.5 201.8 201.5 202.4 204.3 204.1 203.6Change from previous year 4.1% 3.0% 2.6% 0.4% -0.9% -1.7% -2.2% -0.3% 0.4% 1.1% -0.1% 0.6% 0.9% 1.3% -0.1% -0.1%Oil Spot Price ($/Barrel average) 100.27 102.20 106.16 103.32 94.65 82.30 87.90 94.13 94.51 89.49 86.53 87.86 94.76 95.31 92.94 92.02Change from previous month 1.8% 1.9% 3.9% -2.7% -8.4% -13.0% 6.8% 7.1% 0.4% -5.3% -3.3% 1.5% 7.9% 0.6% -2.5% -1.0%Change from previous year 11.9% 13.9% 0.0% -5.7% -6.2% -14.5% -9.7% 9.0% 10.5% 3.7% -10.9% -10.8% -5.5% -6.7% -12.5% -10.9%US Housing Permits (thousands) 46.5 51.9 67.3 63.0 74.8 73.4 72.1 77.7 71.4 75.7 70.2 65.9 63.7 66.3 76.0 91.6Quarterly Total 165.7 211.2 221.2 211.8 206.0US Non-Residential Construction ($MM) 12,590 12,350 13,855 14,615 14,995 14,825 15,085 15,475 15,750 15,970 16,270 16,815 16,920 16,860 17,600 18,375Quarterly Total 38,795 44,435 46,310 49,055 51,380US Street & Highway Construction ($MM) 2,790 2,490 2,745 3,882 4,287 4,690 4,985 5,293 5,265 4,955 4,645 4,205 4,621 4,351 4,596 5,143Quarterly Total 8,025 12,859 15,543 13,805 13,568

Q4-2013 Q1-2013Q3-2012Q2-2012Q1-2012

This basket of indicators is presented here to serve as a quick reference to the sound bites of economic information reported by news media. This grid is not intended to serve as a comprehensive review, nor should it be considered a prediction by Wells Fargo about future economic activity.

Stock Markets. After taking a 1,000 point plunge between October 8 and November 16, 2012, the Dow steadily climbed to over 15,000 in May 2013.

Consumer Price Index. Retail pricing pressures eased somewhat during 2012 to about 2.1% compared to 3.1% in 2011. The Wells Fargo Economics Group forecast for overall inflation, which includes fuel and food, is expected to remain tame at 1.6% in 2013 and step up to 2.0% in 2014.

Producer Price Index. Wholesale prices moderated somewhat in 2012 to 1.9% following price increases of about 6.0% in 2011. The Wells Fargo Economics Group is expecting wholesale pricing pressures to settle in at around 1.3% in 2013 and 2.4% in 2014.

Housing. The residential housing market continues to be one of the shining stars of the U.S. economy at present. Although housing starts took a 16% dive in April 2013, the elevated numbers of housing permits seem to be a harbinger of continued growth in resi-dential construction. Mortgage rates are likely to remain near record lows for the foresee-able future and should contribute to housing starts that approach the 1 million unit mark in 2013 and 1.18 million in 2014.

Interest rates. In an effort to promote growth, the U.S. Federal Reserve has signaled an intention to keep interest rates low until economic data show more sustained economic stability. The European debt crisis has extended a flight to safety that may keep yields on 10-year U.S. notes below 2.0% through 2013.

Data Sources: Bloomberg LP, U.S. Department of Labor, U.S. Department of Commerce, Cyclcast-Intercast and Wells Fargo Securities, LLC



Economic Indicators

Data sources: U.S. Department of Commerce, U.S. Department of Labor, U.S. Department of Energy and Wells Fargo Securities, LLC.

Real Gross Domestic Product (GDP). The U.S. economy improved at a much better rate than initially reported as the U.S. Department of Commerce revised its Q4-2012 GDP number up from 0.1% contraction to 0.4% growth. The Q1-2013 GDP estimate became the 15th consecutive quarter of economic expansion when it registered 2.5% growth. The Wells Fargo Economics Group forecasts full year GDP growth will likely come in at around 1.8% for 2013 and 2.0% in 2014.

Unemployment. Employment in the U.S. rose by 165,000 jobs in April 2013 and the unemployment rate dipped again, this time to 7.5%, as reported by the U.S. Labor Department. The February and March estimates were also revised upward making a stronger case for continued improvement in the headline unemployment figure. The private sector continues to lead the job creation push as many state and local governments face budgetary constraints. The Wells Fargo Economics Group maintains its forecast of unemployment to remain at about 7.6% throughout 2013.

Fuel prices. The price of gasoline has declined slowly since late February and averages $3.65 across the U.S. as of the middle of May 2013. The price of diesel fuel continues to average just under $4.00 per gallon. It has remained in a relatively tight range around $4.00 per gallon since early in 2011. (Source: AAA)

U.S. Non-Residential Construction. Private non-residential construction spending for April 2013 is up 0.6% compared to April 2012 due to increased spending in the lodging, office, manufacturing and transportation sectors. In contrast, public non-residential construction is down 5.2% from a year ago. The bright spots in the public non-residential construction sector are in Transportation (up 16.1%) and Power (up 10.8%).



Wells Fargo Construction Industry Stock Index (CISI)

Company Name Symbol Mkt Cap 5/17/13 12/3/12 Trend 50-Day MA 52-wk low 52-wk high EPS P/E EBITDAAstec Industries, Inc. ASTE 785.95M 34.59 28.95 ↑ 34.64 26.09 36.99 1.78 19.39 72.75MCaterpillar, Inc. CAT 57.64B 87.67 84.49 ↔ 85.30 78.25 99.70 7.42 11.82 10.42BCummins Inc. CMI 21.92B 116.43 97.37 ↑ 112.04 82.20 122.54 7.78 14.97 2.10BCNH Global CNH 10.43B 42.92 47.41 ↓ 41.90 34.36 49.99 4.96 8.65 2.94BDeere & Company DE 33.88B 86.97 83.22 ↑ 87.31 69.51 95.60 8.00 10.87 5.99BEagle Materials Inc EXP 3.82B 77.30 53.17 ↑ 67.55 29.64 77.44 1.27 60.68 130.37MFluor Corporation FLR 10.52B 64.57 52.98 ↑ 59.57 44.99 66.83 2.81 22.99 1.02BGranite Construction GVA 1.20B 31.19 30.57 ↓ 29.02 21.38 37.74 0.89 35.04 103.72MH&E Equipment Services, Inc. HEES 781.38M 22.37 15.52 ↑ 19.75 11.52 22.42 0.85 26.35 104.35MMartin Marietta Materials, Inc. MLM 5.11B 110.91 90.45 ↑ 101.46 64.54 111.53 2.02 54.88 320.56MManitowoc Company, Inc. MTW 2.64B 19.75 14.90 ↑ 18.52 9.60 21.35 0.84 23.48 405.40MOshkosh Corporation OSK 3.43B 38.95 30.10 ↑ 38.89 18.49 42.66 3.15 12.35 544.50MPrimoris Services Corp. PRIM 1.10B 21.27 14.46 ↑ 21.60 11.00 23.18 1.09 19.53 138.99MQuanta Services, Inc. PWR 6.45B 30.20 25.81 ↑ 28.01 21.15 30.22 1.56 19.37 663.11MRitchie Bros. Auctioneers RBA 2.19B 20.52 22.54 ↓ 20.01 17.81 23.57 0.70 29.31 155.19MTerex Corporation TEX 3.66B 32.90 23.83 ↑ 30.32 14.05 36.78 0.93 35.26 563.60MTitan Machinery, Inc. TITN 472.35M 22.67 22.05 ↑ 26.28 19.07 34.15 2.00 11.34 115.27MTutor Perini Corporation TPC 869.67M 18.28 13.06 ↑ 17.52 9.21 19.38 -5.25 - 230.76MTrinity Industries, Inc. TRN 3.32B 41.88 31.68 ↑ 41.52 21.53 45.67 3.53 11.86 790.50MTexas Industries, Inc. TXI 2.12B 74.68 46.83 ↑ 63.08 30.10 74.92 1.45 51.61 54.26MUnited Rentals, Inc. URI 5.53B 58.68 41.67 ↑ 53.92 26.88 59.74 0.80 73.08 1.10BURS Corporation URS 3.64B 47.98 37.56 ↑ 45.17 32.13 48.11 4.06 11.82 848.50MVulcan Materials Company VMC 7.16B 55.06 52.31 ↓ 50.26 32.31 59.48 -0.43 - 383.06MVolvo AB VOLVY 29.55B 14.57 14.32 ↔ 14.54 10.38 15.82 0.50 29.43 2.86BData pulled after market close on Friday 5/17/2013*Trend the directional change in the current 50-Day MA and the stock price on Dec. 3, 2012

Components of the Wells Fargo Construction Stock Index (CISI)

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50.0

100.0

150.0

200.0

250.0

300.0

350.0

JAN-12 APR-12 JUL-12 OCT-12 JAN-13 APR-13

1/3/2000 Index baseline of 100.0

5/20/2013 Index value of 236.3





The recovery is now well into its fourth year and since December 2012, the Dow has taken off! As of the end of May 2013, the Dow was comfortably past 15,000. The value of the 30 stocks that make up the Dow has more than doubled since bottoming out in March 2009. Construction stocks rebounded well early in 2012 and reached a peak late in February 2012 at 235.4. The rise and fall of various global construction markets has taken its toll on the Wells Fargo Construction Industry Stock Index (CISI) and the Index is now back to where it peaked 15 months ago however the CISI is still much lower than in late 2011.

Construction Industry Stock Index (CISI) value since January 1, 2010

Q1-2013 earnings reports for the major construction equipment manufacturers and rental companies were mostly down. Many finan-cial reports cited decreased global construction activity, notably in China, and a corresponding decline in equipment sales and net income. Lighter equipment types such as aerial work platforms and other equipment often associated with residential construction saw stronger gains, particularly in North America as the U.S. experiences a resurgence in the housing market. Although Caterpillar had record Q3-2012 earnings and did not seem to be showing any real signs of slowing down, it reported significantly lower sales and earnings in Q1-2012. The theme is consistent: continued opportunities for equipment replacement in North American markets are off-setting the falling demand in Europe and China. Following the trend of the Stock Market for the last six months, most equities in our CISI Index are ahead of where they were at the end of 2012.


Wells Fargo Equipment Finance, Inc.Construction Group

Meet Wells Fargo’s dedicated team of construction equipment finance specialists. Visit with your local Wells Fargo banker to learn how we can support all of your company’s banking needs.

John CrumNational Sales Manager412 454 4629 Offi

Canada Cross-Border SalesRob Linghorne416-774-2025 Office416-843-6996 [email protected]

412-454-4629 Office724-544-0992 [email protected]

Northwestern Washington, AlaskaCJ Markey

U.S. West RegionKay Russell, Sales [email protected]

North Texas, Oklahoma, Kansas (except Kansas City)

U.S. Central RegionSteve Nenn, Sales [email protected]

Maine, New Hampshire, Vermont, Rhode Island, Massachusetts

U.S. East RegionTom Reilly, Sales [email protected]

y206-849-7937 | 866-359-0749 [email protected]

Western Oregon, Southwestern Washington, Northern CaliforniaRyan Murphy503-887-5986 | 866-359-0757 [email protected]

Southern and Central California, HawaiiRalph Potter619-540-2296 | 866-359-0761 [email protected]

( p y)Patrick Miller214-914-1378 | 866-347-5217 Fax [email protected]

Northern Illinois, IowaTom Zubik312-550-4789 [email protected]

Mike Kearney781-715-3893 | 877-302-8033 [email protected]

New York Metro, Upstate New York, ConnecticutAmy Majeskie201-446-6835 | 877-401-7239 Fax [email protected]

Central/Northern New Jersey, Northeastern PennsylvaniaTodd Yazujian732-319-4576 | 866-359-1035 [email protected]

Tennessee, Southern Illinois, Missouri (expect Kansas City), Mike Range618-606-1661 | 866-968-8713 Fax [email protected]

Idaho, Montana, Eastern Washington, Eastern Oregon, Northwestern WYKarle Armitage208-867-1623 | 866-359-0733 [email protected]

Utah, Southwestern Wyoming, NevadaSteve Pratt801-541-8699 | 866-359-0762 [email protected]

Arizona, New MexicoDana Pike602 432 7234 | 866 359 0760 Fax

o as ub @ e s a go co

Louisiana, MississippiTim Bowling985-807-3988 | 866-359-0735 [email protected]

Indiana, KentuckyFred Sugg317-435-0504 | 866-359-0776 [email protected]

Ohio Michigan

j @ g

Southern NJ, Southeastern PA, DE, Maryland (except panhandle)Tom Kassakatis215-779-2981 | 866-493-4485 [email protected]

Western Pennsylvania, Western New YorkGil Clements412-721-0427 | 866-361-7667 Fax [email protected]

West Virginia, Maryland Panhandle, Virginia (except Richmond)D S602-432-7234 | 866-359-0760 Fax

[email protected]

Dallas, Northeast Texas, Arkansas, Northwest LouisianaFrank Gullo972-342-3594 | 866-359-0745 Fax [email protected]

San Antonio, South and West TexasJim Shewmaker210-240-6774 | 866-359-0771 [email protected]

Houston, Gulf Coast Texas

Minnesota, North Dakota, South Dakota, North WisconsinMark Jangula

Ohio, MichiganKevin Watkins440-787-7600 | 877-402-2261 [email protected]

Doug Snee724-998-5941 | 866-359-0774 [email protected]

South Carolina, North Carolina, Greater RichmondJack Kirk803-463-9001 | 866-359-0750 [email protected]

Colorado, Nebraska, Eastern Wyoming, Greater Kansas CityChris Benitez719-591-7239 | 866-512-6974 Fax [email protected] Alabama, Georgia

Patricia Hollis470-208-9549 | 866-648-0703 Fax [email protected]

Large Ticket BDO – East CoastPeter [email protected]

© 2013 Wells Fargo Equipment Finance, Inc. All rights reserved. All applications are subject to credit approval. Canadian affiliate Wells Fargo Equipment Finance Company is associated with Wells Fargo & Company, a company that is not regulated as a financial institution, a bank holding company or an insurance holding company in Canada. MC-2346 Revised 04/15/2013

,Nick Webb713-882-7727 | 866-359-1033 [email protected]

612-803-3369 | 866-739-3180 [email protected]

FloridaChuck Saxton407-375-1054 | 877-806-6441 [email protected]

Large Ticket BDO – West CoastScott [email protected]

wells fargo 2013 q2 construction quarterly

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