TheChatter - Spring 2017

A Looking Ahead With A Safe Focus By John Batzel [President] After closing the books on first quarter results in 2016, we had great reason to be concerned. Our coal miners were still very much in the same slump they had been experiencing for several years, our machine rental business was struggling to generate profitability matching the large investment we had made in our fleet and, while our construction sales were continuing to grow, the pace was slower than we would have liked. Power Systems helped our results, but not enough at that time to prevent us from having to implement vital corrective action.

As I’m sure you will recall, last April we implemented our first significant reduction in Carter’s workforce in several years and initiated a number of other cost containment actions. In addition, we informed Caterpillar that wewould be focused onmachine rental profitability, at the short-term expense of machine rental PINS. Specifically, we implemented a two-fold fleet management strategy, where we began to age our fleet longer and, when additional units were needed, we focused on used rather than new product. Later in the year, as our markets continued to struggle, particularly in the coal fields, we were forced to take further action, including a second reduction in Carter’s workforce and salary reductions in the coal fields.

While we are nowhere near historic highs in our financial performance, our executive team is confident in our forecast for a strong 2017.

Now, I am pleased to share, having closed the books on first quarter of 2017, our results are significantly greater than what we experienced twelve months earlier. While we are nowhere near historic highs in our financial performance, our executive team is confident in our forecast for a strong 2017. The actions we implemented last year, combined with continued growth in our Construction, Rental and Power Systems businesses, as well as an unexpected spike in demand for metallurgical coal, has us on a very positive path.

While the situation described above gives us reason to be truly excited for the first time in several years, there is one element of our performance that is more than a little disappointing. Our safety record through the first three months of this year has been abysmal. Our safety results are headed in the wrong direction at a rapid pace. There are two things which are very clear at this stage:

• We, as a team, have taken our focus off safety • We, as a team, must fix the issue

We have our safety advisory team energized to study and understand what is driving this lack of discipline and to ultimately provide us recommendations to turn this situation around. It is critically important that every Carter employee understand working safely is a mandatory part of everyone’s job. More to come on safety but, in the meantime, think before you act…every potential injury can be avoided through disciplined self-management of our own work environment.

IN THIS ISSUE 3

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FIELD REPORT Factory Trips Anchors Away Not Your Everyday Machines Rental Team Awards Power Feed TOP NOTCH TEAM Team Dredge Home Away From Home

CARTER CARES Setting A New Environmental Standard Helping Veterans Transition BENEFIT SPOTLIGHT Health Track Empower Mobile GLOVES ON FOR SAFETY 2017 Safety Performance Review

THE BRAND BUILDERS Idea Builder A Legacy Of Service Recognizing Commitment BUILDING A LEGACY 2017 Graduates Building For The Future The Start Of A Legacy Rewarding Referrals In Memory

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2 THE CHATTER SPRING | 2017

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