VISION
ANNUAL REPORT 2022
CONTENTS
Letter to Shareholders
2022 Financial Highlights
Strategy in Action
Year in Review
Management’s Discussion & Analysis
Consolidated Financial Statements
Company Information
6
9
10
23
45
81
134
2
ANNUAL REPORT 2022 BIRD CONSTRUCTION INC. We bring life to vision
Creating great things with you
3
BIRD CONSTRUCTION INC. ANNUAL REPORT 2022 VALUES
4
ANNUAL REPORT 2022 BIRD CONSTRUCTION INC. Our Values define who we are as One Bird
when we operate at our best. They are the
core of what is most important in what we do
and how we do it.
WE PUT SAFETY FIRST
A healthy and safe work environment is non-
negotiable. We build a culture of operational and
psychological safety through engagement, learning
and leadership.
WE LEAD WITH HONESTY
We speak and act with integrity, clarity and care
so people can trust our word and our work. Being
honest means we can deliver the best outcomes and
consistent results.
WE ARE STRONGER TOGETHER
Success is a team effort. Our inclusive workplace
enables our combined expertise, humility and creativity
to unlock our greater potential.
WE ARE DRIVEN TO DO GREAT WORK
We built our name on quality. We have a passion for
excellence in our work and relationships that honours
our businesses and our industry.
WE CREATE OPPORTUNITY
Rooted in a solid foundation, we adapt and grow to face
the future. We are committed to elevating each other to
chart the best path forward in an evolving world.
5
BIRD CONSTRUCTION INC. ANNUAL REPORT 2022 LETTER TO SHAREHOLDERS
Bird’s transformative evolution from humble beginnings
in Moose Jaw, Saskatchewan in 1920, to a dynamic and
diversified organization that spans from coast to coast has
been a rewarding journey. The last year has seen further
growth on a variety of fronts, and we are proud of all that
our teams have accomplished.
We create opportunity
revenue
revenue growth
Bird achieved continued
in 2022,
delivering solid gross profit and Adjusted EBITDA
margins. Our 2022 performance was driven by active work
programs in a diverse range of high-demand sectors,
increased self-perform scopes, and the expansion of
recurring
streams. Recent announcements
showcase these factors, including the environmental
remediation work for Canadian Nuclear Laboratories
where there is a substantial pipeline of work, the award
of two five-year master service agreement contracts and
two industrial facilities turnaround contracts for existing
clients, as well as continued expansion into the renewable
energy market with the announcement of three wind
projects. The strides made in the continued growth and
diversification of our service offerings is facilitated through
an emphasis on collaborative project delivery and strategic
investments
leading to
in construction technologies,
optimized safety, productivity, and collaboration that
enables the continued delivery of innovative solutions
for clients.
Our solid performance in 2022 was further enabled by
contributions from Dagmar, the high-performance civil
infrastructure contractor acquired in 2021. This acquisition,
with the substantial cross-selling opportunities it created,
has supported the continued growth of our infrastructure
portfolio, a key element of our 2022-2024 strategic
plan. Our efforts over the past few years to differentiate
ourselves through a focus on collaborative contracts and
to build a risk-balanced portfolio of projects has enabled
our steady growth. This business model has allowed us to
better manage inflationary impacts on our costs of
construction, resulting in steadily improving margins.
Today, the projects we have underway, and our record
combined backlog and pending backlog are made up
of a diverse mix of collaborative, lower risk contracts
and awards.
Bird’s liquidity, and notably low leverage and net debt,
continue to provide the flexibility to invest in and grow
our business. The strength of our Balance Sheet allows
us to capitalize on acquisition opportunities, focusing on
tuck-in acquisitions that provide specialized, self-perform
capabilities with sound organic growth potential post
acquisition. Our recent acquisitions have been cash flow
positive and accretive to our margin profile and earnings
per share. The impact of such acquisitions has been
demonstrated through Bird’s enhanced ability to secure
and execute projects of increased scale and complexity
The strides made in the continued growth and diversification of our service offerings
is facilitated through an emphasis on collaborative project delivery and strategic
investments in construction technologies, leading to optimized productivity, safety,
and collaboration that enables the continued delivery of innovative solutions for clients.
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ANNUAL REPORT 2022 BIRD CONSTRUCTION INC.
LETTER TO SHAREHOLDERS
due in part to the strategic acquisitions of Stuart Olson
in 2020 and Dagmar in 2021, which bolstered the skills
base and capacity of our teams in key services and
sectors. Subsequent
to year end, Bird acquired
Trinity Communication Services Ltd, a diversified
telecommunication and utility infrastructure contractor
based
in underground,
aerial, commercial inside plant, and multi-dwelling unit
installations. These valuable self-perform capabilities
enable cross-selling opportunities to Bird’s sizeable
national client base across multiple sectors, and serve as a
growth catalyst for the Company’s utilities portfolio.
in Ontario that specializes
We put safety first
Our collective dedication to safety remains a top priority.
We are committed to maintaining and exceeding our
exemplary safety standards through collaboration with
all employees, trade partners, clients, and suppliers to
achieve the healthy and safe work environment that every
worker deserves so that everyone goes home safe each
day. This commitment to safety encompasses the mental
wellbeing of team members by cultivating a culture
of openness and understanding. Safety is therefore
addressed on a multitude of fronts, and achieved through
means including ongoing training, honest and respectful
conversation, and the thoughtful use of technology that
enables our teams to work safer and smarter.
We are driven to do great work
Our combined suite of services, an emphasis on long-term
relationship-building, and an established reputation for
exceptional execution provides the necessary support to
help our clients realize their vision. We are also invested
in assisting clients in meeting their sustainability goals.
Bird’s deep bench of talent includes leading mass timber
construction expertise, deep energy retrofits and net zero
construction experience, and self-perform capabilities
in future energy solutions such as wind, solar, and
nuclear energy.
(ESG)
Bird’s Environmental, Social, and Governance
program continues to mature in response to business,
client, and industry demands. The Company’s existing
culture and robust governance structures, combined
with dedicated work over the past few years to build our
long-term ESG strategy, ensures internal readiness for
forthcoming disclosure requirements. We look forward
to sharing more about our sustainability journey in the
forthcoming 2022 Sustainability Overview.
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BIRD CONSTRUCTION INC. ANNUAL REPORT 2022
LETTER TO SHAREHOLDERS
We are stronger together
Our focus on working collaboratively has further enhanced
the execution of our strategic priorities. Together, our
exceptional One Bird team has leveraged our deep roots
and shared values to build stronger partnerships, both
internally and externally, enabling consistent successful
execution and empowering the pursuit of a robust pipeline
of opportunities. In 2022, the Company reflected on our
organizational culture and drew from the strengths of our
legacy organizations to reaffirm these core values to clearly
articulate who we are today. Our purpose statement -
“We bring life to vision; Creating great things with you” –
encapsulates the collaborative drive to make our clients’
visions a reality, as well as speaking to the realization of
personal development objectives as we continuously strive
to learn and innovate. Collectively, the achievement of
these goals contributes to broader societal development
and change, which we endeavour to effect in a responsible,
sustainable, and forward-thinking manner by bringing our
whole selves to our work every day.
We lead with honesty
Bird endeavors to be at the forefront of industry efforts
to be responsible, responsive, and innovative corporate
citizens. Our strong governance framework supports a
culture of accountability that emphasizes honesty, integrity,
and transparency. This is realized through a robust system
of policies and programs that clearly outline the standard
of conduct expected from all team members, contractors,
and partners in all our work and interactions, and is
supported through best-in-class training and continuous
learning and development.
Bird’s focus on collaborative and self-perform opportunities
across a diversified range of sectors and geographic markets
has resulted in a record combined backlog and pending
backlog. With market conditions beginning to return to
the Company’s strong balance
pre-pandemic
sheet, focus on diversification, margin improvement, and
established track record of accretive acquisitions position
Bird to deliver strong results in the future.
levels,
Thank you for your support as we continue to bring life
to vision,
Paul R. Raboud
Chairman
of the Board
Terrance L. McKibbon
President and Chief
Executive Officer
FINANCIAL CALENDAR
2023
May 9 - Sustainability Overview 2022
May 9 - Annual General Meeting
May 9 - Q1 2023 Financial Results
August 9 - Q2 2023 Financial Results
November 7 - Q3 2023 Financial Results
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ANNUAL REPORT 2022 BIRD CONSTRUCTION INC.
2022 FINANCIAL HIGHLIGHTS
TSX:
BDT
Revenue
$2.4B
Backlog(1)
$2.6B
Adjusted EBITDA(1,2)
EPS
$101M
$0.93
Net Income
Pending Backlog(1)
Adjusted Earnings(1,2)
Adjusted EPS(1)
$50M
$2.5B
$46M
$0.86
2022 Revenue
A Diverse
Range of Clients
43%
15%
42%
Industrial
Institutional
Commercial
*Based on Client Type
Growing Backlog and Pending Backlog
625
Over 70% of combined
Backlog(1) and Pending Backlog(1)
is considered collaborative(3).
Collaborative contracts
incentivize all partners to
achieve project goals and
provide full transparency
regarding project costs.
+70%
Balanced Capital
Allocation Priorities:
% Dividends
Capex
Merger and
Acquisition
Opportunities
Long Term
Debt Repayment
(1) Refer to the Terminology and Non-GAAP & Other Financial Measures section of Management’s Discussion and Analysis
(2) Adjusted Earnings and Adjusted EBITDA are Non-GAAP Financial Measures
(3) Collaborative contracts include: MSA, IPD, Alliance, PDB and certain CM which are defined in the Nature of Business section of the MD&A
9
1,4271,6452,5902,6822,6272,7092,8283,0033,0342,8782,9412,6375751,3001,6361,6851,6481,7881,6251,7171,8072,1372,4900100020003000400050006000Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4in millions of Canadian dollarsBacklogPending Backlog202020212022 STRATEGY IN ACTION
2022 – 2024 STRATEGIC PLAN
Bird’s 2022-2024 Strategic Plan focuses on further development of Bird’s team, strong project
execution and performance, and the diversification of service offerings across Canada.
TEAM
Strategy: Develop a highly engaged, high performance team with industry leading people programs,
and a world-class safety program united under the One Bird approach.
• World class safety program
• Highly engaged, high-performance team with industry leading people programs that
promote a culture of hungry, humble, and smart
• Strategic internal and external partnerships and collaborative contracting methods
Putting Safety First
Bird is recognized for best-in-class Health, Safety, and
Environment Management systems and
industry-leading
safety performance. Our health and safety culture is rooted in
our commitment to work in a spirit of collaboration with all
employees, trade partners, clients, and suppliers to foster a
culture of operational and psychological safety.
For more details on our safety program, refer to page 23 to 25.
ENGAGEMENT
- Integration and standardization
- Human and organizational
performance
one
HSE CULTURE
MODEL
- Safety culture framework
- Leading and
lagging metrics
SAFEGUARDS
- Hazard recognition
- HSE technology
- Environmental
management
Safety Leadership
Bird’s CEO and various members of
the leadership team participated in 14
HSE-focused tours to sites across the
country that encourage engagement and
promote accountability in safety at all
levels of the company.
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ANNUAL REPORT 2022 BIRD CONSTRUCTION INC.
STRATEGY IN ACTION
STRATEGY IN ACTION
TEAM
Where Greatness Grows
In 2022, Bird introduced a new Purpose, Values, and
Employee Value Proposition. These were developed
by our employees – they told us what it means to
work at Bird, why they work at Bird, and what drives us
to achieve our best. Together we are united on
what really matters and what is most important in what
we do and how we do it.
Learn more about our purpose and values here.
EMPLOYEE VALUE
PROPOSITION
Be a part of our team, where we pride ourselves
on the quality of our work and the way we treat
each other and our partners. You will build a career
and long-lasting relationships based on respect,
collaboration, and a solution-focused mindset.
Bird is a place where you will unlock your potential
and achieve your goals.
Unlocking Our Potential
Bird’s employee programs originate
from the belief
that learning is an essential driver of engagement and
performance, but more
learning creates
than
opportunities to unlock and develop potential.
that,
Bird’s learning culture is a growth culture – a culture that is
looking for collaboration on new ideas, new methods, and
opportunities to engage and innovate together.
THE POWER OF
CONVERSATI NS
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BIRD CONSTRUCTION INC. ANNUAL REPORT 2022
STRATEGY IN ACTION
TEAM
Partnering for Success
Bird has a passion for excellence in our work and
relationships that honour our business and our industry.
Our internal partnerships and One Bird approach allow
us to offer integrated services to clients nationally as well
as opportunities to share talent and exchange lessons
learned and best practices.
Operationally, with our collaborative approach, we
continue to recognize and pursue our strengths and
the unique contributions of our different teams, which
allows us to capitalize on cross-selling opportunities
and collaborate to grow and diversify our work program.
We can secure project wins together by leveraging our
combined capabilities.
Across the country, we work closely with trade partners,
designers, clients, Indigenous business partners, industry
organizations, and communities to deliver operational
excellence in all we do.
COLLABORATIVE
CONTRACTING
The past year has underscored the tremendous
impact and potential that collaborative contract
models have on the creation of innovative
solutions and the enhanced execution of large,
complex, and cutting-edge projects.
Collaborative contracting is based on open
communication and transparency on costs - this
helps to balance risk transfer among parties,
reduces overruns, and leaves only profit at risk
in many cases.
+70%
Over 70% of Bird’s combined
backlog is made up of projects
with collaborative delivery models.
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ANNUAL REPORT 2022 BIRD CONSTRUCTION INC. TEAM
STRATEGY IN ACTION
PERFORM
PERFORM
Strategy: Operate under the key driver of accountability, with our success rooted in exceptional project
delivery and client services, supported by a strong financial framework, robust risk management, and
a continue focus on steady, consistent, responsible growth.
• Culture of operational excellence
• Provide innovative client solutions
• Common and scalable technology platform that builds efficiencies
• Robust financial and risk management
• Generate consistent profitability and balanced backlog
Delivering Excellence
Our team of over 5,000 employees delivers exceptional operational performance and collaborative execution across
all project sizes and delivery models.
Disciplined revenue growth
2022 Revenue +7.1% Y/Y
- 2022 Revenue $2.4B vs. 2018 $1.4B, combined growth
through strategic acquisitions and organic diversification
- Resilient revenue streams due to diversity in client,
sector and geography
WHAT SETS US APART
Margin growth & EPS improvement
2022 Adj. EBITDA Margin(1) 4.3%
- Exited high-risk lump sum turn-key projects in 2018
- Increased specialized, self-perform capabilities, higher-
margin potential sectors and collaborative contracts
Sustained robust combined backlog
Record combined backlog
- 2022 year-end Backlog $2.6B, Pending Backlog $2.5B
- Diverse, risk-balanced contracts
- >$900M recurring revenue contracts at year-end 2022
Strong balance sheet & financial flexibility
2022 Working Capital +22% Y/Y
- Well-positioned to pursue growth and continue to invest
in the business, pay dividends and repay long-term debt
- Notably low leverage and low net debt
Successful accretive M&A
+ Self perform capabilities
- Successful integrations, large volume of cross-selling
- 2023 – Trinity Communications acquisition; 2021 –
Dagmar acquisition, niche specialty contractor
- 2020 – Transformational Stuart Olson Acquisition
Elevated sustainability profile
+ Growing national portfolio
- Expanded sustainable energy portfolio and suite of
sustainable building construction and retrofit services
- Implemented ESG strategy, positioned for future ratings
(1) Refer to the Terminology and Non-GAAP & Other Financial Measures section of Management’s Discussion and Analysis.
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BIRD CONSTRUCTION INC. ANNUAL REPORT 2022
STRATEGY IN ACTION
Integrated Client Solutions
Bird’s expanding self-perform abilities, comprehensive
service offerings, and nationwide presence create a solid
foundation for maximizing cross-selling potential through
our integrated and innovative client solutions.
Commercial
Systems
Group
The Centre
for Building
Performance
Innovative
Trenching
Solutions
Modular
Construction &
Prefabrication
Deep Energy
Retrofits
Net Zero &
Sustainable
Construction
Centres
of Excellence
Collaborative
Contracting
Complete
Lifecycle
Solutions
Special
Projects
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ANNUAL REPORT 2022 BIRD CONSTRUCTION INC. STRATEGY IN ACTION
STRATEGY IN ACTION
PERFORM
Innovation with Purpose
integrate
Bird’s mission to embrace innovative tools and processes,
and
is centred on
technology solutions,
delivering increased value and efficiency to our clients
while streamlining work
for on-site and business
support teams.
Our focus on, “Think Digital, Leverage Data,” supports
enhancing data and analytics capabilities to drive business
insights and establish a secure, unified, and adaptable
technology platform that enables us to effectively navigate
a rapidly changing business environment.
Our digital construction technology, such as Building
Information Modeling/Virtual Design and Construction
(BIM/VDC), sensors,
laser scanning and drones, help
us build safely and sustainably, with higher quality
and efficiency.
Maximize energy
efficiency
Reduce material
waste
Improve
collaboration
BIM/VDC
SENSORS
Enhance
safety
Reduce
risk
Leverage
analytics
Increase schedule
certainty
Monitor realization
of design intent
LASER SCANNING
DRONES
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BIRD CONSTRUCTION INC. ANNUAL REPORT 2022
STRATEGY IN ACTION
DIVERSIFY
Strategy: Leverage and expand our diverse capabilities and services across the country, supported by
collaboration, internal partnerships, and building expertise to grow service offerings and expand self-
perform capabilities, while maintaining a well-balanced portfolio of low- to medium-risk projects, and
continuing to drive an improving margin profile.
• Diverse balance of service offering, market reach and geography with new and current clients
• Leverage our integrated services nationally
• Increased self-perform capabilities
• Promote positive relationships with Indigenous partners and communities
• Renowned brand with balanced ESG strategy
How we are delivering
Bird has offices across Canada and serves
every major centre. We also perform work in
select US states.
We deliver our diverse services to a wide range
of sectors.
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ANNUAL REPORT 2022 BIRD CONSTRUCTION INC.
STRATEGY IN ACTION
STRATEGY IN ACTION
DIVERSIFY
As leaders in Canadian construction, we continue to invest, develop, and challenge the
status quo. Our mission is to go beyond the norm to bring value to our clients, partners,
and communities.
DIVERSE SERVICES AND SELF-PERFORM SCOPES
Future Energy Services
Buildings
Construction Services
Horizontal Civil Works
Structural Civil Works
Heavy Civil Services
Powerline & Telecoms
Electrical and Instrumentation
One Pass Trenching /
Utilities Installations
Mechanical
Renewables Self-Perform
Modular Construction
Fabrication
Deep Energy Retrofits
High Voltage Testing
& Commissioning
Insulation and Cladding
General Contracting
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BIRD CONSTRUCTION INC. ANNUAL REPORT 2022 STRATEGY IN ACTION
Indigenous Relations
ESG Strategy
to
Indigenous
We demonstrate our commitment
Relations by building respectful relationships founded
on open communication and seeking collaborative
Indigenous partners.
business opportunities with
We invest in skills development initiatives and scholarships
Indigenous Peoples
that support the aspirations of
pursuing careers
industry. Our
national Indigenous Engagement Policy aims to ensure a
consistent and culturally appropriate approach that
respects the diversity of the Indigenous landscape in
Canada, while supporting the Truth and Reconciliation
Commission Call to Action #92.
the construction
in
Examples of our partnerships in action can be found
throughout the Year in Review section starting on page 23.
18
Our 2021 Sustainability Overview can be viewed here.
Stay tuned for our 2022 overview in May 2023.
Bird’s ESG journey goes beyond the provision of market
solutions. We reflect on our own processes and consider
how we are living our values as a responsible and
responsive company, exploring how we can build smarter
and greener as we contribute to the sustainability goals and
aspirations of clients, employees, and communities with
whom we interact.
In 2022, we continued to strengthen our internal ESG
governance structures. Significant progress has been
made
for
forthcoming disclosure requirements, particularly related
to emissions.
in advancing Bird’s
readiness
internal
ANNUAL REPORT 2022 BIRD CONSTRUCTION INC. STRATEGY IN ACTION
STRATEGY IN ACTION
DIVERSIFY
DIVERSE PROJECT WINS
ANNOUNCED IN 2022:
March - Environmental: The City of
Barrie Wastewater Treatment Facility
Upgrade Program Delivered Through
an IPD Contract ($125M)
April – MRO: Two Five Year MSA
Contracts and Two Industrial Facilities
Turnaround Contracts ($90M)
April – Mining: Mining Services
Contract with Client in Northeastern
Ontario ($70M)
May – Transportation: Dagmar
Construction, a Wholly-Owned
Subsidiary of Bird Construction Inc.,
Awarded Railworks Contract by
Metrolinx ($62M)
May – Agri-foods: Progressive Design-
Build Contract For Net-Zero Plant
Protein Processing Facility In Alberta
($125M)
September – Renewables: Bird
Announces Contracts for Two Wind
Farm Developments by Capstone
Infrastructure
September – Healthcare: Awarded
Contract for Covenant Community
Health Centre in Edmonton ($95M)
November – Nuclear: Notice to
Proceed on Multi-year Task Order
for Environmental Remediation by
Canadian Nuclear Laboratories
New Board Members
In 2022, Bird welcomed four new members to the Board
of Directors, all of whom bring diverse perspectives,
backgrounds, and expertise.
– Steven L. Edwards spent 44 years at Black &
Veatch, including just under ten years as Chairman
and CEO. He brings a remarkable combination of
inspiring leadership, strategic insight, and broad
experience from his successful career. His expertise
will contribute immense value, including his insights
on sustainability-driven global megatrends such as
electrification, decarbonization, and digitization.
– J. Kim Fennell is a veteran Silicon Valley executive,
with over 35 years of experience in the technology
industry. He has exceptional leadership experience,
including at industry-leading organizations like
Uber. His expertise will support our innovation
journey.
– Jennifer Koury has extensive experience with
global firms, most recently with BHP, and is an
established leader in people and culture. Her
expertise will support our evolving culture, which is
a key driver to our success.
– Gary Merasty brings a wealth of experience from
the construction industry, and as a federal MP.
Gary is currently the CEO of the Peter Ballantyne
Group of Companies, (the investment arm of the
Peter Ballantyne Cree Nation), and will be a
tremendous resource
in our overall strategic
direction as One Bird.
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BIRD CONSTRUCTION INC. ANNUAL REPORT 2022
STRATEGY IN ACTION
EXPANDING OUR
POWER AND SUSTAINABLE
ENERGY PORTFOLIO
Renewable and low carbon energy solutions contribute to global efforts to meet climate targets, support
the energy transition, and achieve sustainable change. Bird has been supporting the construction
execution on some of our country’s largest infrastructure projects — from hydroelectric infrastructure,
nuclear, and renewable power, to organic waste processing and waste-energy recovery projects — for over
half a century.
Recent awards in the nuclear and alternative energy sectors enable us to leverage our electrical,
civil, structural, and mechanical experience to develop and execute these important and complex
major projects.
Drawing from experts across the country and collaborating with local offices, Bird’s diverse self-perform
capabilities create ready access to needed labour resources and the experience and insights necessary
for effective planning and schedule optimization. Our ability to self-perform critical-path trade scopes
provides operational excellence. By executing a higher percentage of self-perform services, we are able
to exceed client expectations throughout the project lifecycle by way of risk reduction, cost savings, a
shortened procurement cycle, and more.
We are collaborators, integrating our technical teams with technology providers and engineers to provide
intelligent solutions for our clients.
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ANNUAL REPORT 2022 BIRD CONSTRUCTION INC. STRATEGY IN ACTION
DIVERSIFY
RENEWABLE
POWER
- Wind
- Solar
- Hydro and
pumped storage
CARBON
INNOVATION
- Carbon capture
- Carbon utilization
- Carbon storage
LOW CARBON
ENERGY
- Hydrogen (Green and Blue)
- Nuclear/Small Modular Reactors
- Biomass conversion
- Anaerobic digestion
- Renewable Natural Gas
ENERGY
EFFICIENCY
- District heating and cooling
- Cogeneration
- Water reuse
- Biomass and waste to energy
- Real estate energy efficiency
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BIRD CONSTRUCTION INC. ANNUAL REPORT 2022
SAFETY
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ANNUAL REPORT 2022 BIRD CONSTRUCTION INC. YEAR IN REVIEW
VALUES
WE PUT SAFETY FIRST
A healthy and safe work environment
is non-negotiable. We build a culture
of operational and psychological
safety through engagement, learning,
and leadership.
Safety is embedded in everything we do and is one of our
core values. Bird is recognized for best-in-class Health,
Safety, and Environment Management (HSE) systems and
industry-leading safety performance. Our health and safety
culture is rooted in our commitment to work in a spirit of
collaboration with all employees, trade partners, clients,
and suppliers to foster a healthy and safe work environment.
Executive Site Safety Tours
Bird completed 14 executive site safety tours in 2022.
These tours were critical in fostering a culture of safety
excellence and continuous
improvement within our
teams. While our executive and operations leadership
teams are consistently present and engaged in important
conversations to improve safety culture on-site, this monthly
initiative bolsters Bird’s goal of creating a healthy work
environment where we put safety first. Regular site tours
encourage engagement and promote accountability at all
levels of the company as we put safety first.
Members of the executive team visited a complex project
leveraging multiple Bird teams.
14
14 safety
tours were
completed
8-10
Averaged
8-10
executives
per tour
11
11 cities
visited
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BIRD CONSTRUCTION INC. ANNUAL REPORT 2022 YEAR IN REVIEW
WE PUT SAFETY FIRST
Launching new hard hats
The launch of Bird’s redesigned hard hats for all employees
marked a major milestone in the integration of a One Bird
team. The new CSA Type I and II hard hats were given to
all employees from coast to coast and play a vital role in
keeping employees safe while increasing recognition with
existing and potential clients, employees, and partners.
Our Maintenance, Repair and Operations team
achieved some impressive health and safety milestones
this year, including:
Over 86,000 incident and injury free exposure
hours for the day and night shift teams
Completed over 1,700 field level hazard
assessments (FLHA)
Over 980 of the FLHA’s were reviewed and
signed off by leadership during their regular
site tours
Over 1,000 observation cards were submitted
by the team, which included craft, supervision,
and HSE
24
ANNUAL REPORT 2022 BIRD CONSTRUCTION INC. YEAR IN REVIEW
WE PUT SAFETY FIRST
Safety
Awards
Left to right:
Bryan Gravelle,
Jake Baker
Bryan Gravelle and Jake Baker were both awarded the Incident and Injury-Free
(IIF) Exceptional Leadership Award from one of Bird’s industrial clients. The culture-
based site-wide safety program recognizes commitment and leadership towards the
safest high-performance team on the work site.
Curtis Bowie, Senior Project Coordinator,
received the Site Excellence Award for
exemplary execution by one of Bird’s industrial
clients. Curtis’ team complimented his diligence
and thorough management to ensure safe
execution plans, noting that he sets a high
standard for all other vendors to follow.
fourth consecutive year, Bird’s
the
For
Industrial MRO
team was recognized at
the 6th Annual 2022 Canadian Safety
Achievement Awards (CS2A) in Edmonton,
AB. The CS2As are a national awards program
showcasing exceptional health and safety
performance
industry.
Our team received four awards at this year’s
event, including the Zero Injury Turnaround Award, 365 Daily Maintenance Award,
Sustained Superior Performance Award, and the Craftsperson of the Year Award for
Kumar Munusamy.
in the maintenance
25
BIRD CONSTRUCTION INC. ANNUAL REPORT 2022 HONESTY
26
ANNUAL REPORT 2022 BIRD CONSTRUCTION INC. YEAR IN REVIEW
VALUES
WE LEAD WITH HONESTY
We speak and act with integrity,
clarity, and care so people can trust
our word and our work. Being
honest means we can deliver the
best outcomes and consistent results.
Bird strives to consistently be responsible, responsive,
and innovative corporate citizens so people can trust our
word and our work. Our strong governance framework
supports a culture of accountability that emphasizes
honesty, integrity, and transparency. In our interactions with
one another, our clients, and other partners, we focus on
understanding and solutions to overcome challenges rather
than blame.
Respectful communication and honesty are
essential to creating genuine relationships
and partnerships; it is a foundation to be
stronger together, to do great work, and to
create opportunity.
27
BIRD CONSTRUCTION INC. ANNUAL REPORT 2022
YEAR IN REVIEW
WE LEAD WITH HONESTY
Indigenous Engagement
2Nations Bird Construction Partnership
The
2Nations Bird Construction
Partnership between Beardy’s and
Okemasis Cree Nation, Fishing Lake
First Nation, and Bird Construction is
rooted in culture, respect, collaboration
and providing sustainable, positive
social impacts for the First Nations. In February 2022, key
representatives from Beardy’s & Okemasis Cree Nation,
Fishing Lake First Nation, and Bird Construction Industrial
Services gathered to finalize our joint venture partnership.
An exciting result of these discussions was the launch of
the partnership’s logo and official name – 2Nations Bird
Construction Ltd. This partnership strengthens both
First Nation’s capacity to contribute to major industrial
construction projects and supports Bird in procuring goods
and services from local Indigenous businesses.
28
Front row left to right: Robin Bonk (Bird), Chief Sunshine (FLFN),
Chief Ananas (BOCN), Dennis Esperance (WCDC), Rebecca
Kragnes (Bird); Back row left to right: Jeremy Seeseequasis
(BOCN), Tyler Caron (WCDC), Elder Peter Gardypie (BOCN), Jim
Rawlings (Bird), Kevin Reeves (Bird), Johnny Walker (FLV), Brent
Sunshine (FLFN), Garnet Eyahpaise (WCDC)
Alliance Agreement
with Alex & Sons Enterprises
Bird signed an Alliance Agreement with Alex & Sons
Enterprises (A&S) in early 2022. A&S is an Indigenous
business led by Alex Archibald of Taykwa Tagamou First
Nation and the signing of this agreement continues Bird
Heavy Civil’s long history of engaging with Indigenous
businesses to build capacity within affected communities.
ANNUAL REPORT 2022 BIRD CONSTRUCTION INC. YEAR IN REVIEW
WE LEAD WITH HONESTY
Bird Renews Alliance Agreement
with Paul First Nation
Representatives from Bird and Paul First Nation met in 2022
to renew Bird’s Alliance Agreement with Paul First Nation of
Alberta and to discuss our shared vision for our future.
Bird Construction/Paul and
Gerri Charette Scholarship
Bird is pleased to announce the four
inaugural bursaries for 2022
The Bird Construction/Paul and Gerri Charette Fund
was established to advance reconciliation and empower
Indigenous individuals and communities by removing
barriers to education for learners, while promoting a
culture of respect and inclusion.
Bird is pleased to announce that four inaugural bursaries
were awarded for 2022 to students at Bow Valley College,
Portage College, Red River College Polytechnic, and
Selkirk College.
29
BIRD CONSTRUCTION INC. ANNUAL REPORT 2022 YEAR IN REVIEW
WE LEAD WITH HONESTY
Community Relations
Bird employees continue to find meaningful opportunities to contribute to local initiatives, donate to charities,
and participate in events to support our communities. We are proud to see teams coast to coast give back and
take action.
HIGHLIGHTS
• Bird has strong ties to the Canterbury Foundation and
has been a huge supporter of their auction for the past
three years supporting the “Promise of Home”. 100% of
auction proceeds are re-invested towards infrastructure,
age-in-place care, and the Heart of Canterbury, a
mental health and spiritual care program. Bird matched
the winning bids of $10,000 with all proceeds donated
to the Canterbury Foundation.
100% of auction proceeds are re-invested
towards infrastructure
• The Lloydminster IPD team, consisting of Bird and its
joint venture partner Chandos Construction, as well as
ISL Engineering and Land Services, conducted a food
and toy drive for The Olive Tree, a local food bank in
Lloydminster, AB. Teams volunteered to help clean,
organize and build over 120 Christmas food hampers. They
also had amazing support from the craft team bringing
in non-perishable items, completing a couple draws on-
site, along with donations from trade partners, suppliers,
and staff within the IPD team. There efforts resulted in:
5,036 lbs.
of food collected on site
>$2,500
in new/unwrapped toys
30
$1,200
worth of Walmart
gift cards for the
older children
$8,500
in cash donations
ANNUAL REPORT 2022 BIRD CONSTRUCTION INC.
YEAR IN REVIEW
WE LEAD WITH HONESTY
• Our Industrial East team members participated in a Turkey
Drive in Northern Ontario in time for the holidays. Bird
and our Indigenous Partner, Alex and Sons Enterprises,
sponsored the Turkey Drive and distributed 150 turkeys
to members of Taykwa Tagamou Nation. All turkeys were
purchased from a registered Taykwa Tagamou Nation
owned business.
$10,000
Along with this act of solidarity and
recognition, Bird donated $10,000
to Reconciliation Canada
• Bird held its inaugural companywide Bird Walk for
Reconciliation to build awareness around and recognize
the National Day for Truth and Reconciliation. Offices from
coast to coast participated in the walk commemorating
the tragic history and ongoing impacts of residential
schools. Along with this act of solidarity and recognition,
Bird donated $10,000 to Reconciliation Canada, an
Indigenous-led organization that is leading the way in
engaging Canadians in dialogue and transformative
experiences that revitalize the relationships among
Indigenous peoples and all Canadians.
31
$6,140 raised for The Adopt-A-Family initiative
• Bird was proud to support the 7th annual Adopt-A-
Family at the local Children’s Centre in Fort McMurray,
AB. This initiative pairs donors with families in need to
make their holidays brighter. This year, we exceeded
our goal and were able to adopt three families and
four seniors. The Adopt-A-Family initiative raised an
astounding $6,140!
BIRD CONSTRUCTION INC. ANNUAL REPORT 2022 STRONGER TOGETHER
OKIB Water Systems
Improvement Project
32
ANNUAL REPORT 2022 BIRD CONSTRUCTION INC. YEAR IN REVIEW
VALUES
WE ARE STRONGER TOGETHER
Success is a team effort. Our inclusive
workplace enables our combined
expertise, humility, and creativity to
unlock our greater potential.
By drawing on the strengths of our legacy organizations
and shared values, our One Bird mentality is built upon a
strong foundation of excellence and expertise.
OKIB Water Systems Improvement Project
The Okanagan Indian Band (OKIB) broke ground on their
community water system improvement project in 2022,
utilizing an Integrated Project Delivery (IPD) model that
includes OKIB as the owners, Urban Systems (designer), and
Bird Dawson Joint Venture (constructors). To fully realize
the collaborative and innovative benefits of IPD, additional
partners participated in the project including more than
13 trade partners, CML Project Services (consultant), and
Indigenous Services Canada (funder). The new 1.2-mile
water main will upsize and modernize the Irish Creek/
Head of the Lake and Six Mile/Bradley community water
systems. By tying the two systems together, there will be an
improvement in the quality of water for around 700 homes,
the quantity of water, and fire protection for the community.
This project is the first time a First Nation has used an
Integrated Project Delivery (IPD) model to work on an
Indigenous Services Canada (ISC) funded infrastructure
project for their community.
OKIB water is now safe to drink on the
Head-of-the-Lake/Irish Creek water system
as the Manganese water quality advisory
has been lifted.
33
BIRD CONSTRUCTION INC. ANNUAL REPORT 2022 YEAR IN REVIEW
WE ARE STRONGER TOGETHER
Kenora Jail
Kenora and Thunder Bay
Correctional Facilities
The Thunder Bay Correctional Centre and Kenora Jail
expansion projects reached substantial completion in
Fall 2022. This milestone marked the completion of all
major construction and provided the Ministry of the
Solicitor General with access to the new spaces to prepare
for occupancy. This accelerated build was completed
by the Bird and Stack Modular partnership, bringing
together Bird’s integrated conventional site construction
and Stack’s innovative modular construction solutions.
Our commitment to building meaningful partnerships
with
through
engagement with local Indigenous communities, including
a formal Indigenous Benefits Plan that incorporated
employment, procurement, and design input.
regional communities was
reaffirmed
Thunder Bay Correctional Centre
34
ANNUAL REPORT 2022 BIRD CONSTRUCTION INC. YEAR IN REVIEW
WE ARE STRONGER TOGETHER
Toronto Western Hospital/
Noventa Energy Partners
transfer
for wastewater energy
Bird has entered into an Alliance Agreement with renewable
energy company Noventa Energy Partners to pursue
(WET)
opportunities
projects across Canada. The WET projects will deploy the
Huber ThermWin® System, for which Noventa Energy is
the exclusive distributor in Canada and the United States.
Wastewater is a relatively untapped renewable energy
source that is underutilized in North America, and currently
developing opportunities represent over $500 million and
150MW of energy. Our first project with Noventa is the
Toronto Western Hospital WET project. This is the world’s
largest raw wastewater energy transfer project and, once
complete, it will provide over 19MW of low-carbon thermal
energy to the hospital facility, which is approximately
90% of the hospital’s heating and cooling requirements.
In early June 2022, we broke ground on the Wastewater
Energy Transfer project alongside project partners,
including Noventa Energy. Bird is proud to work closely
with our partners and all stakeholders to bring this valuable,
sustainable solution to the community.
Canadian Nuclear Laboratories’ (CNL)
Advanced Nuclear Materials Research
Centre (ANMRC)
The Advanced Nuclear Materials Research Centre
(ANMRC) is considered Canada’s largest IPD project.
This Joint-Venture with Bird, Chandos Construction, and
M. Sullivan & Son Limited (“CBS JV”) will advance the
construction of what will be one of the largest nuclear
in Canada. The
research facilities ever constructed
approximate project value is over $500 million, with Bird’s
share of the joint venture at 44% or over $220 million.
The impressive facility will enable world-class research in
nuclear energy, health, environmental stewardship and
global security. Overall, services provided at the ANMRC
will be critical to the life extension and long-term reliability
of existing reactors, including Canada’s fleet of CANDU
nuclear power reactors and other designs deployed
around the world.
35
BIRD CONSTRUCTION INC. ANNUAL REPORT 2022 GREAT WORK
36
ANNUAL REPORT 2022 BIRD CONSTRUCTION INC. YEAR IN REVIEW
VALUES
WE ARE DRIVEN
TO DO GREAT WORK
We built our name on quality. We have
a passion for excellence in our work and
relationships that honours our businesses
and our industry.
As a leader in Canadian construction, we are committed to
delivering our best work. Our combined suite of services,
an emphasis on long-term relationship-building, and an
established reputation for exceptional execution provides
the necessary support to help our clients realize their vision.
Award-Winning P3 Project
Our Public-Private-Partnership (P3) project with Concert
Properties for five new Alberta high schools received two
prestigious awards in 2022. This $300M Design-Build-
Finance-Maintain project was awarded the P3 Awards’
“Best Education and Higher Education Project”
for
2022 – beating six other US-based projects to take top
honours. It was also recognized as one of seven winners
of the Canadian Council for Public-Private Partnerships
National Awards for ”Innovation and Excellence in P3”.
The project is the first ever P3 schools bundle in Alberta
comprised exclusively of high schools which will offer
more capacity for students in Leduc, Langdon, Blackfalds,
and Edmonton.
Concert-Bird Partners will deliver five new high schools in
Alberta in Blackfalds, Leduc, Langdon, and two in Edmonton.
37
BIRD CONSTRUCTION INC. ANNUAL REPORT 2022 YEAR IN REVIEW
WE ARE DRIVEN TO DO GREAT WORK
Investing In Our Team
Bird is driven to continuously do great work and
that includes focused professional development
for our leaders. Established in 2015, the Bird Site
Management Program (BSMP) provides a high-level
leadership experience and learning opportunity for
project site leads. In 2022, 25 leaders from across
the country each participated in over 125 hours of
learning through the BSMP program. They attended
three, three-day sessions that took place in April,
May, and June at the Schulich School of Business
in Toronto. Bird is proud to invest in our team and
in the success of our company to grow and create
opportunities within a respectful, diverse, and
collaborative workplace.
In 2022, 25 leaders from across the country each
participated in over 125 hours of learning through
the BSMP program.
Contractor of the Month
The Non-Process Buildings Team at an industrial site
in British Columbia were awarded Quality Contractor
of the Month in March 2022. This award represents
our client’s satisfaction with Bird’s culture of
accountability, and our team’s ability to continuously
produce top quality results. The same team achieved
a substantial milestone later in the year, reaching one
million people hours with no recordable incidents.
38
ANNUAL REPORT 2022 BIRD CONSTRUCTION INC. Bird Site Management Program (BSMP)
25
125
Construction
Management Leaders
Learning Hours
3 Three-Day Sessions
Bird is proud to invest in our team and in the success of our company to grow and create
opportunities within a respectful, diverse, and collaborative workplace.
39
BIRD CONSTRUCTION INC. ANNUAL REPORT 2022 OPPORTUNITY
Dagmar Project at Appleby
GO Station Burlington, ON
40
ANNUAL REPORT 2022 BIRD CONSTRUCTION INC. YEAR IN REVIEW
VALUES
WE CREATE OPPORTUNITY
Rooted in a solid foundation, we
adapt and grow to face the future.
We are committed to elevating each
other to chart the best path forward
in an evolving world.
Bird is committed to continued growth and diversification.
By elevating each other to chart the best path forward, we
can create opportunity for innovation and collaboration.
Success With Diversification
its
Leveraging and expanding our diverse capabilities and
services across the country will support Bird in maintaining
its well-balanced portfolio of low- to medium-risk projects
and continue to drive forward
improving margin
profile. Diversification opportunities will continue to arise
organically as we leverage our competitive strengths, and
through mergers and acquisitions where we see a strategic
fit that will allow us to accelerate our growth and become
larger, stronger, and more competitive in the construction
arena. Our operations teams are executing on our priority
to diversify the business.
41
BIRD CONSTRUCTION INC. ANNUAL REPORT 2022 YEAR IN REVIEW
WE CREATE OPPORTUNITY
- Bird secured two five-year Master Service Agreement
(MSA) contracts for industrial maintenance services
and two industrial facilities turnaround contracts worth
an estimated $90 million. These projects showcase the
success that Bird is seeing across key focus areas in 2022.
The increased opportunities found in natural resources
represent diversity, collaboration, best-in-class client
service, and work with repeat clients.
- Bird was selected to lead the design and construction
of a state-of-the-art, net-zero plant protein processing
in Strathmore, Alberta. The value of the
facility
progressive design-build contract
is approximately
$125 million. Bird will lead the design and construction
of the facility and the 3D connectivity to the processing
equipment. The 100,000-square-foot facility will be the
first net-zero plant protein processing facility in North
America, employing
technology
solutions to recycle and reuse water, leverage low
emission energy sources, and reduce overall energy
consumption. Over the past ten years, Bird has built
an impressive resume of over 100 agri-food projects,
establishing ourselves as a leader in Canada’s dynamic
and evolving food processing sector.
industry-leading
- Dagmar secured its largest project to date, the $62
million Kitchener GO Corridor expansion project for
Metrolinx. This project commenced in March 2022
and involves railways track, signal, and station works
construction. Track twinning and station improvements
support the future growth of this transit line.
42
ANNUAL REPORT 2022 BIRD CONSTRUCTION INC. YEAR IN REVIEW
WE CREATE OPPORTUNITY
In September 2022,
Bird was awarded
Engineering, Procurement
and Construction (EPC)
contracts for two wind
projects in development
by Capstone Infrastructure
Corporation.
- In September 2022, Bird was awarded Engineering,
Procurement and Construction (EPC) contracts for two
wind projects in development by Capstone Infrastructure
Corporation. The Wild Rose 2 Wind Project will be
constructed in Cypress County, AB, approximately 20 km
southeast of Medicine Hat. It will have a rated capacity
of 192 MW of renewable energy. The Buffalo Atlee
Wind Project contract has a rated capacity of 61.7 MW,
and will be located approximately 100 km northwest
of Medicine Hat, AB. This followed the award of a wind
project for TransAlta Renewables in Kent Hills that aims
to rehabilitate the 150 MW facility in New Brunswick.
TransAlta Renewables chose Bird as general contractor
for a construction project at Kent Hills Wind Projects to
replace the foundations on all 50 turbines.
PHAI is considered one of
Canada’s largest environmental
remediation projects
- Bird is a successful proponent for the Port Hope Area
Initiative Master Construction Contract by CNL. In
April 2022, Bird was selected as one of three teams to
deliver environmental remediation services for the
Port Hope Area Initiative (“PHAI”) Master Construction
Contract (“MCC”). PHAI is considered one of Canada’s
largest environmental remediation projects and there
is close to one billion dollars in remediation work to be
completed under the MCC, where Bird, as one of the
three proponents, will have the opportunity to bid on
work packages. In November, Bird was given notice to
proceed on its first multi-year task order under the MCC
for the remediation of approximately 400 sites in the
municipality of Port Hope.
43
BIRD CONSTRUCTION INC. ANNUAL REPORT 2022 Powerhouse Roof Replacement Project,
Abitibi Canyon Generating Station
44
ANNUAL REPORT 2022 BIRD CONSTRUCTION INC. 2022
MANAGEMENT’S
DISCUSSION & ANALYSIS
for the years ended
for the years ended
December 31, 2022 and 2021
December 31, 2022 and 2021
45
BIRD CONSTRUCTION INC. ANNUAL REPORT 2022 MANAGEMENT'S DISCUSSION AND ANALYSIS
TABLE OF CONTENTS
EXECUTIVE SUMMARY .................................................................................................................................................... 47
NATURE OF THE BUSINESS ........................................................................................................................................... 48
2022 HIGHLIGHTS ............................................................................................................................................................. 51
ANNUAL RESULTS OF OPERATIONS ........................................................................................................................... 53
QUARTERLY RESULTS OF OPERATIONS ..................................................................................................................... 56
KEY PERFORMANCE INDICATORS ............................................................................................................................... 58
OUTLOOK .......................................................................................................................................................................... 60
CAPABILITY TO DELIVER RESULTS ............................................................................................................................... 61
FINANCIAL CONDITION, CAPITAL RESOURCES AND LIQUIDITY ......................................................................... 61
CONTRACTUAL OBLIGATIONS ..................................................................................................................................... 66
FINANCIAL INSTRUMENTS ............................................................................................................................................ 66
DIVIDENDS ......................................................................................................................................................................... 68
OUTSTANDING COMMON SHARE DATA AND STOCK EXCHANGE LISTING .................................................... 68
OFF BALANCE SHEET ARRANGEMENTS .................................................................................................................... 68
RELATED PARTY TRANSACTIONS ................................................................................................................................ 68
SUMMARY OF QUARTERLY RESULTS ........................................................................................................................... 69
ACCOUNTING POLICIES ................................................................................................................................................ 70
CRITICAL ACCOUNTING ESTIMATES & JUDGEMENTS ........................................................................................... 70
CONTROLS AND PROCEDURES ................................................................................................................................... 72
RISKS RELATING TO THE BUSINESS ............................................................................................................................. 72
TERMINOLOGY AND NON-GAAP & OTHER FINANCIAL MEASURES ................................................................... 77
FORWARD-LOOKING INFORMATION ......................................................................................................................... 79
The following Management’s Discussion and Analysis (“MD&A”) of Bird Construction Inc.’s (“the Company” or
“Bird”) financial condition and results of operations for the three and twelve months ended December 31, 2022,
should be read in conjunction with the December 31, 2022 consolidated annual financial statements. This MD&A
has been prepared as of March 7, 2023. Unless otherwise specified, all amounts are expressed in Canadian
dollars. The information presented in this MD&A is presented in accordance with International Financial
Reporting Standards (“IFRS”), unless otherwise noted.
This discussion contains forward-looking statements and information, which are subject to a variety of factors that
could cause actual results to differ materially from those contemplated by this information. See “Forward-Looking
Information”. Some of the factors that could cause results or events to differ from current expectations include,
but are not limited to, the factors described under “Risks Relating to the Business” included in the Company’s
most recent Annual Information Form dated March 7, 2023. Additional information about the Company is
available through the System for Electronic Document Analysis and Retrieval (“SEDAR”) at www.sedar.com and
on the Company’s website at www.bird.ca.
Throughout this MD&A certain measures are used that, while common in the construction industry, do not have a
standardized meaning prescribed by IFRS and are considered specified financial measures. These include non-
GAAP financial measures, non-GAAP financial ratios and supplementary financial measures. These measures may
not be comparable with similar measures presented by other companies. Further information regarding these
measures can be found in the “Terminology and Non-GAAP & Other Financial Measures” section of this MD&A.
BIRD CONSTRUCTION INC.
MANAGEMENT'S DISCUSSION & ANALYSIS 2022
46
EXECUTIVE SUMMARY
(in thousands of Canadian dollars, except per share
amounts)
Income Statement Data
2022
2021
2020
Revenue
Net income
Basic and diluted earnings per share ("EPS")
Adjusted Earnings (1)
Adjusted Earnings Per Share (1)
Adjusted EBITDA (1)
Adjusted EBITDA Margin (1)
Cash Flow Data
$
2,377,549
$
2,220,026
$
1,504,432
49,863
0.93
46,024
0.86
101,185
42,783
0.80
50,954
0.96
108,136
36,103
0.80
41,579
0.92
81,937
4.3 %
4.9 %
5.5 %
Net (decrease) increase in cash and cash equivalents
$
(15,691) $
(21,725) $
31,765
Cash flows from operations before changes in non-cash
working capital
Capital expenditures(2)
Cash dividends paid
Cash dividends declared per share
Balance Sheet Data
Total assets
Working capital
Loans and borrowings
ROU Liabilities
Shareholders' equity
Key Performance Indicators
Pending Backlog (1)
Backlog (3)
114,370
(27,766)
(20,941)
0.39
102,623
(11,756)
(20,749)
0.39
71,696
(14,227)
(17,607)
0.39
December 31,
2022
December 31,
2021
December 31,
2020
$
1,229,279
$
1,137,148
$
1,067,550
184,632
75,091
73,259
272,988
151,810
78,681
79,358
243,488
$
2,489,900
$
1,624,700
$
2,636,543
3,002,509
130,255
72,913
78,075
212,610
1,635,900
2,682,498
(1) Adjusted Earnings and Adjusted EBITDA are non-GAAP financial measures. These measures, along with Adjusted Earnings Per Share,
Adjusted EBITDA Margin and Pending Backlog do not have standardized meanings under IFRS and may not be comparable with similar
measures presented by other companies. See "Terminology and Non-GAAP & Other Financial Measures."
(2) Represented by "Additions to property and equipment and intangible assets" in the consolidated statement of cash flows.
(3) Backlog is a measure that may not be comparable with a similar measure presented by other companies. See "Terminology and Non-
GAAP & Other Financial Measures."
BIRD CONSTRUCTION INC.
MANAGEMENT'S DISCUSSION & ANALYSIS 2022
47
Net Income ($millions) $36.1$42.8$49.9202020212022Basic and Diluted EPS$0.80$0.80$0.93202020212022
NATURE OF THE BUSINESS
OVERVIEW
OUR LOCATIONS
The Company operates from coast-to-coast and
services all of Canada’s major geographic
markets.
Bird is a Canadian construction and maintenance
company providing a comprehensive scope
offering and a diversified portfolio of services to
industrial, institutional, and commercial markets
retrofits;
including: new
industrial maintenance, repair and operations
("MRO") services, shutdowns and turnarounds;
infrastructure construction; mine support
civil
fabrication; steel
services; utility contracting;
modular construction; and specialty trades.
construction and
The Company has been in operation for over 100
years, and draws upon the extensive experience of
over 5,000 employees to deliver exceptional
operational performance
collaborative
execution across all project sizes and delivery
models.
and
PROJECT DELIVERY MODELS
Bird executes projects and work programs with its clients using a variety of delivery models and
contract types, including: Construction Management ("CM"), Integrated Project Delivery (“IPD”),
Alliance, Cost-Plus, Stipulated Sum, Unit Price, Standard Specification Design-Build, Progressive
Design-Build, Complex Design-Build, Alternative Finance Projects, and Public Private Partnerships
(“PPP”).
Of the delivery models and contract types, CM, IPD, Alliance, Cost-Plus, Stipulated Sum, Unit Price,
Standard Specification Design-Build and Progressive Design-Build contracting types are considered
low to medium risk by the Company, with the remaining contracting types representing higher levels
of risk.
MANAGING RISK
Bird’s primary constraints on growth are the availability and retention of qualified and capable
personnel who are available for projects, and the ability to secure new work at appropriate margins.
Bird self-performs large projects, particularly in the industrial market and MRO space, while in other
areas, the majority of construction may be performed by Bird’s subcontractors.
Bird is successful in winning work through qualifications-based selection criteria and contractual
approaches to project delivery that align and incentivize all parties to achieve project goals involving
shared identification and management of risk, resulting in a risk-balanced work program for the
Company. Collaborative delivery models include Progressive Design-Build, MSA's, IPD, Alliance and
some CM. While all CM is considered low risk, the contractual agreement determines whether it is
considered a collaborative delivery project.
In the institutional and commercial markets where some risks are transferred through subcontracting,
the scope of work of each subcontractor is generally defined by the same contract documents that
form the basis of the Company’s agreements with its clients. The terms of the agreements between the
Company and its clients are generally replicated in the agreements between the Company and its
subcontractors. These “flow-down” provisions substantially mitigate the risk borne by the Company.
Depending on the value of the work, the Company may require bonds or other forms of contract
security, including enrolling our subcontractors in Bird’s subcontractor default insurance program,
which helps mitigate exposure to possible additional costs should a subcontractor not be able to meet
its contractual obligations.
BIRD CONSTRUCTION INC.
MANAGEMENT'S DISCUSSION & ANALYSIS 2022
48
INDUSTRY SECTORS
INDUSTRIAL
Bird executes large and complex projects for clients primarily operating in the oil and gas, liquefied
natural gas (“LNG”), mining, renewables, water and wastewater, and nuclear sectors. Additionally, Bird
delivers large, complex industrial buildings including manufacturing, processing, distribution, and
warehouse facilities.
Bird self-performs a range of scopes including electrical and instrumentation, high voltage testing and
commissioning, as well as power line construction, structural, mechanical, and piping, including off-site
metal and modular fabrication. These industrial service capabilities and capacity were significantly
enhanced with the acquisition of Stuart Olson Inc. (“Stuart Olson”) in September 2020. Bird's
expanded industrial general contracting business is augmented with the industrial maintenance
contracting and the additional civil and facilities maintenance services which has expanded
opportunities for additional maintenance clients in a broader geographical footprint.
INFRASTRUCTURE
Bird has a well-developed offering of civil construction capabilities including site preparation and
earthworks, underground piping, utilities, and foundations and other concrete services. Bird provides
support services to the mining sector and performs a full suite of scopes on greenfield and brownfield
hydroelectric facilities.
The Company’s acquisition of Dagmar Construction Inc. (“Dagmar”) on September 1, 2021 provided a
platform to expand Bird’s national civil capabilities, including enhancing self-perform capacity across
key civil infrastructure sub-sectors including road, bridge, rail, and underground utilities installation.
Dagmar’s capabilities and service offerings, integrated with Bird’s existing civil business, improves
Bird’s competitive position nationally and provides greater access to the attractive Ontario market.
Opportunities to capitalize on a higher portion of self-perform work in larger, complex projects further
reinforces the future potential of the integrated business.
INSTITUTIONAL, COMMERCIAL, AND RESIDENTIAL
Bird constructs and retrofits institutional facilities, including healthcare facilities, post-secondary
education facilities, K-12 schools, recreation facilities, public transportation facilities, prisons,
courthouses, government buildings, long term care facilities, and senior housing. Commercial and
residential sector capabilities include new construction and retrofit of data centres, office buildings,
retail facilities, film studio infrastructure, hotels and select mixed-use mid- to high-rise residential
buildings. The Company has also developed significant expertise in the construction of vertical
elements of transit-related projects.
COMMERCIAL SYSTEMS
Bird provides electrical and related system services such as complex electrical and mechanical
infrastructure design and installation, data communications, security, and lifecycle services, including
national roll-out services that provide private and public sector clients with a range of ongoing
electrical maintenance service functions across Canada. The Company’s commercial systems business
is one of Canada’s largest electrical and data system contractors.
BIRD CONSTRUCTION INC.
MANAGEMENT'S DISCUSSION & ANALYSIS 2022
49
INNOVATIVE SOLUTIONS
Bird provides many innovative solutions to all of the sectors it services, including:
MASS TIMBER
CENTRE FOR BUILDING PERFORMANCE
including
Bird is a North American leader in mass
timber construction, with an extensive
resume
post-secondary
education, recreation and seniors’ living
facilities. Bird
expertise,
has
experience, and supply chain to present
an opportunity for greener buildings by
using a renewable resource as a primary
construction material.
the
In addition to its carbon capture benefits,
studies have shown that visible wood in
buildings has various psychological and
physical impacts that can lead to higher
occupant satisfaction, lower stress levels
and blood pressure, better concentration,
and increased optimism.
The growing popularity of mass timber as
a primary building material for structures
frame housing
from high-rise wood
developments to large-scale institutional
to
buildings
buildings
the
environment and good for people.
indicative of a shift
are good
is
that
for
INNOVATIVE TRENCHING SOLUTIONS
Innovative Trenching Solutions provides
single-pass trenching with the use of
custom-built, proprietary equipment that
expedites
installation of underground
utilities for oil and gas, renewables, water,
telecommunications
and
infrastructure.
system minimizes environmental
The
impact by reducing ground disturbance
and
while
maintaining better stability across a variety
of terrain.
construction
footprint
The Centre for Building Performance facilitates
seamless construction delivery that minimizes
environmental impacts throughout every step of
the construction process and supports the
lifecycle of a building asset. The effective
deployment of technology, including the use of
sensors and BIM/VDC, reduces waste generated
during the construction process and optimizes
the use of fuel resources, for example, during
heating and curing cycles.
Integrating all building systems data provides
visibility into a building’s performance, ensuring
it performs as designed or better. These insights
can generate analytics, reports, and trends
through a single customized dashboard for asset
owners to ensure efficiency is maintained.
Building performance solutions can
reduce
overall capital budgets by optimizing building
systems and infrastructure while ensuring a high-
performance building and
faster occupancy
handover. Post occupancy, in-house designed
solutions provide valuable insights that help
simplify building management and maintenance
decisions,
costs and
reducing operating
improving efficiency, and ultimately impacting
the overall carbon intensity of the building.
CENTRES OF EXCELLENCE
Drawing on our subject matter experts, the
Centres of Excellence provide
thought
leadership and direction in key areas, leading
in exploring and adopting new
the way
technology,
techniques,
and/or best practices that reduce risk and
improve Bird’s profitability, effectiveness, and
reputation in a particular focus area, such as Net
Zero, deep carbon
retrofits and energy
transition.
relationships,
tools,
STACK MODULAR
Bird’s partnership with Stack Modular, a global design-build structural steel modular manufacturer, is
an innovative solution in the multi-family, hospitality, resource, and student and senior housing sectors.
The partnership is focused on helping clients leverage the advantages of combining conventional and
modular methods of construction, enabling time and cost savings, and ensuring delivery of high-
quality, local code compliant modules with stakeholder assurance that projects will be executed
successfully and safely.
BIRD CONSTRUCTION INC.
MANAGEMENT'S DISCUSSION & ANALYSIS 2022
50
2022 HIGHLIGHTS
Bird finished the 2022 fiscal year on a high note, delivering a strong fourth quarter of revenue growth, profitability,
and cash flow generation. The Company's fourth quarter and full-year performance reflect the Company's
strategy to reposition itself over the past several years, resulting in a diversified and risk-balanced business model
with larger scopes of self-perform work, greater depth of cross-selling opportunities, and the vast majority of
revenues generated from lower risk contract types. Bird's focus on a more collaborative business model has also
allowed Bird to better manage and share inflationary impacts on costs of construction which, along with increased
self-perform activity, strategic organic growth, acquisitions, and diligent cost management, has resulted in
growing margins which remain a strategic priority to further improve over the coming years.
The Company's results continue to benefit from cross-selling opportunities across our diversified service
offerings, and robust, accretive performance from recent acquisitions. The Company maintained a strong financial
position in 2022, ending the year with significant financial flexibility and liquidity to support the Company's
disciplined capital allocation approach, including the potential for future accretive tuck-in acquisitions similar to
Dagmar and Trinity Communication Services Ltd. ("Trinity") which was acquired subsequent to year-end.
FULL-YEAR 2022 COMPARED TO FULL-YEAR 2021
• Construction revenue of $2,377.5 million was recorded in 2022, compared to $2,220.0 million in 2021,
representing a 7.1% increase year-over-year.
• Net income and earnings per share for the year were $49.9 million and $0.93, respectively, compared to
$42.8 million and $0.80 in 2021.
• Adjusted Earnings1 and Adjusted Earnings Per Share were $46.0 million and $0.86 in 2022, respectively,
compared to $51.0 million and $0.96 in the prior year.
• 2022 adjusted EBITDA1 of $101.2 million, or 4.3% of revenues, compared to $108.1 million, or 4.9% of
revenues in 2021.
• No recoveries were recorded under the CEWS program in 2022, compared to $21.9 million of recoveries
recorded in 2021.
FOURTH QUARTER 2022 COMPARED TO FOURTH QUARTER 2021
• Construction revenue of $657.2 million compared to $597.8 million, representing a 9.9% increase year-
over-year.
• Net income and earnings per share were $14.9 million and $0.28, respectively, compared to $9.9 million
and $0.18 in Q4 2021.
• Adjusted Earnings1 and Adjusted Earnings Per Share were $15.5 million and $0.29, respectively,
compared to $13.0 million and $0.24 in Q4 2021.
• Adjusted EBITDA1 of $30.6 million, or 4.7% of revenues, compared to $28.4 million, or 4.8% of revenues in
Q4 2021.
• Bird reported record revenues for both the fourth quarter, and for the full year ended December 31, 2022. The
combined strength of the Company and its recent acquisitions continue to yield opportunities for cross selling
and higher self-perform activity across the Company's work program, driving revenue growth and stronger
margins.
• The Company generated cash flow of $105.8 million from operating activities in the fourth quarter, finishing
the year with $174.6 million of cash and cash equivalents. The strong ending cash position was achieved while
the Company continued to fund investments in non-cash working capital related to operating activities of
almost $60 million throughout the year to support the Company's growing work program, and while returning
to more normalized levels of capital expenditures during the year.
1 Adjusted Earnings and Adjusted EBITDA are non-GAAP financial measures. See “Terminology and Non-GAAP & Other Financial
Measures.”
BIRD CONSTRUCTION INC.
MANAGEMENT'S DISCUSSION & ANALYSIS 2022
51
• Bird continued to set new records for its combined Backlog and Pending Backlog of future work at
December 31, 2022, totalling $2.6 billion and $2.5 billion, respectively. The Company added $353.1 million in
securements to Backlog in the quarter, while adding over $350 million of new awards to Pending Backlog.
Subsequent to year-end, the Company announced several significant additional new awards and contracts,
some of which represent the conversion of Pending Backlog into Backlog, and others further adding to Bird's
combined backlog.
• The Company continued to expand its MSA and recurring revenue base, with several new multi-year awards
driving the amount of this work in Pending Backlog to over $900 million, representing recurring work to be
performed over the next five years.
• In December, the Company successfully amended its Syndicated Credit Facility, extending the maturity of the
entire facility by over a year to December 15, 2025, and increasing amounts available under the committed
revolving facility by $35.0 million to $220.0 million. Within the amended revolving facility, the Company also
increased its availability for letters of credit by $15.0 million to $115.0 million.
• During the fourth quarter of 2022, the Company announced that it was awarded the following projects and
contracts:
◦
◦
The Company entered
into strategic delivery partnership agreements with Canadian Nuclear
Laboratories (CNL) to support the delivery of CNL’s long-term corporate strategy. This includes existing
work under CNL’s $1.2 billion 10-year capital program, construction of at least six major facilities
representing over $2 billion, and a newly commenced multi-billion-dollar work program which includes
infrastructure upgrades and ongoing environmental remediation and restoration activities as part of the
Port Hope Area Initiative, as well as other longer-term opportunities.
A limited notice to proceed with early work (pre-mobilization) for a strategically important multi-year task
order under the previously announced Port Hope Area Initiative Master Construction Contract by
Canadian Nuclear Laboratories.
• Subsequent to the year end, on January 31, 2023, Bird announced the acquisition of Trinity, an Ontario-based
diversified telecommunication and utility infrastructure contractor. Specializing in underground, aerial,
commercial inside plant, and multi-dwelling unit installations, Trinity's self-perform capabilities enable further
cross-selling opportunities with Bird’s sizeable national client base, and exemplify the Company's tuck-in M&A
strategy to further diversify the Company's operations and expand its self-perform capabilities.
• Subsequent to the year end, the Company announced that it was awarded the following projects and
contracts:
◦
Bird was awarded a progressive design-build contract for a processing facility in Ontario, with a total
project value over $200 million. The project delivery is divided into phases, with the owner, consultants
and contractors working collaboratively in initial phases to ensure the cost estimate, schedule forecast,
and project planning are sufficiently advanced before commencing the construction phase.
• The Board has declared eligible dividends of $0.0358 per common share for each of March 2023 and April
2023, representing a 10% increase to the monthly dividends declared in 2022 and for January and February of
2023.
BIRD CONSTRUCTION INC.
MANAGEMENT'S DISCUSSION & ANALYSIS 2022
52
ANNUAL RESULTS OF OPERATIONS
Consolidated Statement of Income and Additional Financial Indicators
(in thousands of Canadian dollars, except per share amounts and percentages)
Construction revenue
Costs of construction
Gross profit
Income (loss) from equity accounted investments
General and administrative expenses
Income from operations
Finance and other income
Finance and other costs
Income before income taxes
Income tax expense
Net income for the period
Total comprehensive income for the period
Basic and diluted earnings per share
Adjusted Earnings(1)
Adjusted Earnings Per Share
Adjusted EBITDA(1)
Adjusted EBITDA Margin
2022
$
2,377,549 $
2021 % change
7.1 %
2,220,026
2,033,341
186,685
7.0 %
8.1 %
4,187
-164.8 %
2,175,787
201,762
(2,714)
(132,386)
66,662
10,341
(9,818)
67,185
17,322
49,863 $
50,441 $
0.93 $
46,024 $
0.86 $
$
$
$
$
$
$
(127,014)
63,858
1,322
(7,550)
57,630
14,847
42,783
45,128
0.80
50,954
0.96
4.2 %
4.4 %
682.2 %
30.0 %
16.6 %
16.7 %
16.5 %
11.8 %
16.3 %
-9.7 %
-10.4 %
-6.4 %
-0.6 %
101,185 $
108,136
4.3 %
4.9 %
(1) Adjusted Earnings and Adjusted EBITDA are non-GAAP financial measures. See "Terminology and Non-GAAP & Other Financial
Measures."
For the year ended December 31, 2022, the Company recorded construction revenue of $2,377.5 million, a $157.5
million, or 7.1%, increase compared with $2,220.0 million of construction revenue recorded in 2021. The growth
was balanced across the Company's work programs, with over 5% representing organic growth, including
Dagmar growth in the last four months of the year. In 2021, Dagmar was included for four months after its
acquisition, compared to a full year in 2022. Revenues were negatively impacted by the pandemic in the first half
of 2022, as well as by trade labour disruptions in the second quarter. Supply chain delays and permitting delays
eased throughout the year, and had limited impact in the fourth quarter of 2022.
The Company’s gross profit of $201.8 million for 2022, representing an 8.5% Gross Profit Percentage, compares to
$186.7 million gross profit (8.4% Gross Profit Percentage) recorded in 2021. The Company's disciplined project
selection, contracting and execution, including diligent management of construction costs, drove improving
gross profit margins on higher construction volume. These improvements were achieved despite pandemic-
related impacts, primarily in the first half of the year, which eased throughout the year and had limited impact in
the fourth quarter of 2022. No CEWS recoveries were recorded in costs of construction in the current year to help
offset these pandemic-related impacts, compared to $18.8 million of CEWS recoveries recorded in 2021.
Net income for the year ended December 31, 2022 was $49.9 million, an increase of $7.1 million over the $42.8
million of net income reported in the prior year. The increase was primarily driven by the Company's higher gross
profit, discussed above, and higher finance and other income, partly offset by lower income from equity
accounted investments, increases in general and administrative expenses, higher finance and other costs, and
increased income tax expense, all further discussed below.
BIRD CONSTRUCTION INC.
MANAGEMENT'S DISCUSSION & ANALYSIS 2022
53
Losses from equity accounted investments for 2022 totalled $2.7 million, compared with income of $4.2 million in
2021. The lower income in 2022 was primarily due to $4.8 million lower earnings related to Stack Modular, driven
by lower project activity in the current year, and lower activity relating to an equity accounted project in Western
Canada compared to 2021, as well as the overall project mix of equity investments in varying stages of project
lifecycles. In addition, income from equity accounted investments in 2021 included equity income from PPP
concession entities that were subsequently classified as held for sale or sold.
General and administrative expenses were $132.4 million (5.6% of revenue) for the year ended December 31,
2022, compared to $127.0 million (5.7% of revenue) in 2021. The primary drivers for the $5.4 million year-over-year
increase were $7.4 million higher compensation and employee-related costs, which include the impact of $3.1
million CEWS recovery of compensation costs received in 2021, a full year of Dagmar salaries, annual salary
increases, and changes to personnel levels; $0.6 million higher share-based payment costs, including the impact
of related derivatives; $1.1 million higher amortization and depreciation, and $3.9 million aggregate growth-
related increases to travel, business development and pursuit costs as activity levels returned to more normal
levels in the second half of the year. Current year results include Dagmar general and administrative costs for the
full twelve months of 2022 compared to four months post-acquisition in 2021. General and administrative
expenses in 2022 include acquisition and integration costs totalling $2.5 million, compared to $10.8 million of
acquisition and integration costs in 2021.
Finance and other income of $10.3 million in 2022 was $9.0 million higher than 2021 primarily due to a $7.6 million
gain and $1.7 million of interest income recorded in the current year related to a settlement of historical
construction billings and related interest charges with a customer in the second quarter, partially offset by a
cumulative $0.9 million fair value loss on warrants received as part of the settlement. Higher interest on cash
deposits was earned in 2022 due to rising interest rates.
Finance and other costs of $9.8 million recorded in 2022 was $2.3 million higher than amounts recorded in the
same period of 2021 primarily due to increases to the Canadian prime rate applied to the Company's variable
rate debt and the Company carrying a higher average debt balance outstanding on variable rate credit facilities in
the current year. The higher average debt balance includes the impact of a $15.9 million term loan and $7.7
million revolving credit financing drawn in September 2021 to finance the acquisition of Dagmar.
For the year ended December 31, 2022, income tax expense of $17.3 million exceeded the $14.8 million expense
recorded in 2021, in line with increased year-over-year income before taxes and similar effective tax rates.
Total comprehensive income was $50.4 million for 2022, compared to $45.1 million in 2021. The Company's $7.1
million higher net income, discussed above, was partially offset by $1.7 million lower gain, net of tax, on defined
benefit pension plans. The lower pension gain was driven by investment earnings being lower than projected,
partially offset by an increase in the discount rate impacting the pension obligation, and the impact of the asset
ceiling, including the effects of a partial settlement during the third quarter of 2022.
Adjusted Earnings2 for the year ended December 31, 2022 was $46.0 million, compared with Adjusted Earnings of
$51.0 million in 2021. Adjusted Earnings reflects increased year to date revenues and gross profit, and higher
interest income related to the settlement of outstanding construction receivables and accrued interest from a
2 Adjusted Earnings is a non-GAAP financial measure. See “Terminology and Non-GAAP & Other Financial Measures.”
BIRD CONSTRUCTION INC.
MANAGEMENT'S DISCUSSION & ANALYSIS 2022
54
Net Income and Adjusted Earnings (in millions)$42.8$49.9$51.0$46.0Net incomeAdjusted earnings20212022Basic and Diluted EPS and Adjusted EPS$0.80$0.93$0.96$0.86Basic and diluted EPSAdjusted EPS20212022
customer, partially offset by decreases in income from equity accounted investments, higher finance and other
costs, and higher income taxes, as described above. General and administrative expenses, excluding the impact
of acquisition and integration expenses which are excluded from Adjusted Earnings, exceeded amounts
recognized in 2021 by $13.7 million, primarily driven by higher compensation costs, higher net share-based costs,
amortization and depreciation costs, and higher growth-related amortization and depreciation, travel, business
development and pursuit costs. The year-over-year change in Adjusted Earnings also includes the impacts of a
full twelve months of accretive contributions from Dagmar in 2022, compared to four months of post-acquisition
results in 2021, and CEWS recoveries totalling $21.9 million in 2021 that helped offset the impacts of pandemic-
related project delays and additional costs, with no similar recoveries recorded in the current year resulting in
pandemic-related impacts being absorbed in current year results.
Basic and diluted earnings per share were $0.93 for 2022, compared to $0.80 for 2021. Adjusted Earnings Per
Share was $0.86 and $0.96 for 2022 and 2021, respectively. In addition to the impacts of changes in Net Income
and Adjusted Earnings discussed above, the basic weighted average shares outstanding for 2022 was higher by
436,977 due to common shares issued in connection with the Dagmar acquisition in September 2021.
Adjusted EBITDA3 for the year ended December 31, 2022 was $101.2 million compared to $108.1 million recorded
in 2021. The $7.0 million year-over year decrease was primarily driven by reductions in income from equity
accounted investments, higher compensation costs (including the impact of CEWS recoveries in 2021), higher net
share-based compensation costs, and other growth-related increases in general and administrative expenses, as
discussed above, which more than offset the increase in the Company's year-to-date revenues and gross profit.
Adjusted EBITDA also includes a full year of contributions from Dagmar, compared to four months included
subsequent to acquisition in 2021. Adjusted EBITDA margin was 4.3% and 4.9% for 2022 and 2021, respectively. In
2021, Adjusted EBITDA and Adjusted EBITDA margin include the impact of CEWS recoveries that helped offset
the impacts of pandemic-related project delays and additional costs totalling $21.9 million recorded in costs of
construction and general and administrative expenses. No similar recoveries were recorded in 2022, resulting in
pandemic-related impacts being absorbed in current year results.
3 Adjusted EBITDA is a non-GAAP financial measure. See “Terminology and Non-GAAP & Other Financial Measures.”
BIRD CONSTRUCTION INC.
MANAGEMENT'S DISCUSSION & ANALYSIS 2022
55
Net Income and Adjusted EBITDA (in millions)$42.8$49.9$108.1$101.2Net incomeAdjusted EBITDA20212022
QUARTERLY RESULTS OF OPERATIONS
Consolidated Statement of Income and Additional Financial Indicators
(in thousands of Canadian dollars, except per share amounts and percentages)
Three months ended December 31,
Construction revenue
Costs of construction
Gross profit
Income (loss) from equity accounted investments
General and administrative expenses
Income from operations
Finance and other income
Finance and other costs
Income before income taxes
Income tax expense
Net income for the period
Total comprehensive income for the period
Basic and diluted earnings per share
Adjusted Earnings(1)
Adjusted Earnings Per Share
Adjusted EBITDA(1)
Adjusted EBITDA Margin
$
$
$
$
$
$
$
2022
657,184 $
599,106
58,078
(1,124)
(34,534)
22,420
904
(2,933)
20,391
5,459
14,932 $
2021 % change
9.9 %
597,803
546,489
51,314
9.6 %
13.2 %
901
-224.8 %
(37,135)
15,080
426
(1,890)
13,616
3,699
9,917
-7.0 %
48.7 %
112.2 %
55.2 %
49.8 %
47.6 %
50.6 %
52.0 %
55.6 %
18.7 %
20.8 %
7.9 %
-0.1 %
15,257 $
10,039
0.28 $
0.18
15,485 $
0.29 $
30,639 $
4.7 %
13,046
0.24
28,399
4.8 %
(1) Adjusted Earnings and Adjusted EBITDA are non-GAAP financial measures. See "Terminology and Non-GAAP & Other Financial
Measures."
The Company recorded construction revenue of $657.2 million in the fourth quarter of 2022, representing a $59.4
million, or 9.9%, increase over amounts reported in 2021. The revenue increase was driven by organic growth
balanced across all divisions.
Gross profit of $58.1 million for the fourth quarter of 2022, representing a Gross Profit Percentage4 of 8.8%, was
$6.8 million higher than the $51.3 million gross profit (8.6% Gross Profit Percentage) recorded a year ago. Higher
gross profit margins realized on construction revenue were driven by increased self-perform work, strong
execution, supported by disciplined project selection, resulting in a greater proportion of collaborative contract
types and a low contractual risk profile.
The year-over-year increase in fourth quarter net income was driven primarily by the Company's higher gross
profit and lower general and administrative costs, partially offset by losses from equity accounted investments,
increased finance and other costs, and higher income taxes, further discussed below.
Losses from equity accounted investments in the fourth quarter of 2022 were $1.1 million, compared with income
of $0.9 million in same period of 2021. The lower income in the fourth quarter of 2022 was primarily related to
Stack Modular, which had lower project activity in the current year quarter, and lower income relating to an equity
4 “Gross Profit Percentage” does not have a standardized meaning under IFRS and may not be comparable with similar measures
presented by other companies. See “Terminology and Non-GAAP & Other Financial Measures.”
BIRD CONSTRUCTION INC.
MANAGEMENT'S DISCUSSION & ANALYSIS 2022
56
accounted project in Western Canada compared to the prior year. In addition, the fourth quarter of 2021 included
equity income from a PPP concession entity that was subsequently classified as held for sale.
In the fourth quarter of 2022, general and administrative expenses were $34.5 million (5.3% of revenue5) versus
$37.1 million (6.2% of revenue) in the corresponding period a year ago. The $2.6 million decrease was primarily
driven by $3.4 million lower acquisition and integration costs recorded in the quarter, and $0.4m lower
amortization and depreciation, partially offset by $1.1 million aggregate growth-related increases to travel,
business development and pursuit costs as activity levels increased in the quarter to more normal levels
compared to 2021. Compensation costs were comparable for the fourth quarter of 2022 and 2021.
Finance and other costs of $2.9 million in the fourth quarter of 2022 exceeded amounts recorded in the same
period of 2021 by $1.0 million due to increases to the Canadian prime rate applied to the Company's variable rate
debt and the Company carrying a higher average debt balance in the current year quarter. The higher average
debt balance resulted primarily from short-term advances used to fund investments in non-cash working capital
earlier in the year which were repaid during the fourth quarter.
In the fourth quarter of 2022, income tax expense was $5.5 million, compared to $3.7 million recorded in the
fourth quarter of 2021. The increase in income tax expense was primarily due to higher income before income
taxes.
In the fourth quarter of 2022, total comprehensive income was $15.3 million, compared to $10.0 million in the
fourth quarter of 2021. The increase of $5.2 million was primarily due to the increase in net income of $5.0 million
described above.
Adjusted Earnings6 for the fourth quarter of 2022 was $15.5 million, compared with Adjusted Earnings in the
fourth quarter of 2021 of $13.0 million, an increase of $2.4 million. Adjusted Earnings reflects higher revenues and
gross profit for the current year quarter, partially offset by decreases in income from equity accounted
investments, higher finance and other costs, and higher income taxes, as described above. General and
administrative expenses, excluding the impact of acquisition and integration expenses which are excluded from
Adjusted Earnings, exceeded amounts recognized in 2021 by $0.8 million, primarily driven by higher travel,
business development and pursuit costs as the Company's activity levels returned to more normal levels
compared to 2021, partially offset by slightly lower amortization and depreciation expenses.
Basic and diluted earnings per share were $0.28 in the fourth quarter of 2022, compared to $0.18 in 2021.
Adjusted Earnings Per Share was $0.29 and $0.24 in the fourth quarter of 2022 and 2021, respectively.
5 “General and Administrative expenses as a percentage of revenue” does not have a standardized meaning under IFRS and may not
be comparable with similar measures presented by other companies. See “Terminology and Non-GAAP & Other Financial
Measures.”
6 Adjusted Earnings is a non-GAAP financial measure. See “Terminology and Non-GAAP & Other Financial Measures.”
BIRD CONSTRUCTION INC.
MANAGEMENT'S DISCUSSION & ANALYSIS 2022
57
Net Income and Adjusted Earnings (in millions)$9.9$14.9$13.0$15.5Net incomeAdjusted earningsQ4 2021Q4 2022Basic and Diluted EPS and Adjusted EPS$0.18$0.28$0.24$0.29Basic and diluted EPSAdjusted EPSQ4 2021Q4 2022
Adjusted EBITDA7 in the fourth quarter of 2022 was $30.6 million compared to $28.4 million recorded in the fourth
quarter of 2021. The $2.2 million year-over-year increase was consistent with higher gross profit and the decrease
in income from equity accounted investments discussed above, as well as growth-related increases in general and
administrative expenses. Adjusted EBITDA Margin was 4.7% and 4.8% in the fourth quarter of 2022 and 2021,
respectively.
KEY PERFORMANCE INDICATORS
Securements, Pending Backlog and Backlog
Securing profitable construction contracts and then controlling the costs during the execution of that work are the
key drivers of success for the Company. To achieve this, new work must be available, which is a function of the
general state of the economy. In periods of strong economic growth, client capital spending will generally
increase and there will be more opportunities available in the construction industry. In economic downturns,
fewer opportunities typically exist and competition for those opportunities becomes more intense, generally
resulting in lower Gross Profit Percentages. The Company must be successful in securing profitable work in
various economic conditions. The construction industry is highly fragmented and, accordingly, the Company
competes with several international, national, regional, and local construction firms. The Company’s competitive
advantages include its long-standing reputation for successfully delivering high quality projects that fully meet the
needs of the customer and in delivering projects collaboratively which enables the Company to secure repeat
business from existing clients and win work with new clients.
The Company’s success in securing work is reflected in the values of its Pending Backlog and Backlog. The
following table shows the Company’s balances at the end of the following reporting periods:
(in thousands of Canadian dollars)
Pending Backlog
Backlog
December 31,
2022
December 31,
2021
$
$
2,489,900
2,636,543
$
$
1,624,700
3,002,509
Pending Backlog at December 31, 2022 was $2,489.9 million compared to $1,624.7 million at December 31, 2021,
an increase of $865.2 million or 53.3%. The Company’s Backlog of $2,636.5 million at December 31, 2022 was
lower than the balance at December 31, 2021, as executed work exceeded new contracts secured by $366.0 on a
year-to-date basis. For the fourth quarter of 2022, the Company secured $353.1 million of new contracts,
compared to $657.2 million of work executed.
Bird has a strong reputation for delivering sophisticated projects in a collaborative framework. As the Company
pursues and participates in more of these projects, there may be client-driven requirements for early contractor
involvement and pre-construction services. Bird’s participation at earlier stages of the project development cycle
can result in significant amounts of awarded project value being booked to and remaining in Pending Backlog for
7 Adjusted EBITDA is a non-GAAP financial measure. See “Terminology and Non-GAAP & Other Financial Measures.”
BIRD CONSTRUCTION INC.
MANAGEMENT'S DISCUSSION & ANALYSIS 2022
58
Net Income and Adjusted EBITDA (in millions)$9.9$14.9$28.4$30.6Net incomeAdjusted EBITDAQ4 2021Q4 2022
longer periods of time before transitioning to contracted Backlog. Due to the nature of the early involvement,
smaller portions of work are typically contracted during initial phases of the project while working collaboratively
to ensure the cost estimate, schedule forecast, and project planning are sufficiently advanced before contracts
are executed for construction phases.
Pending Backlog includes over $900 million of recurring revenue contracts, primarily consisting of multi-year
Master Service Agreement (“MSA”), maintenance, task order, and similar contractual arrangements. These
contracts are typically with industrial clients, span multiple years, and represent a recurring revenue stream over
the next one to five years, with the Company converting these contracts to Backlog on a regular basis as purchase
orders or other formal documents to proceed are received. The remaining projects included in Pending Backlog
are geographically diverse and span multiple sectors, and are generally lower risk contract types and
collaborative in nature.
The following table outlines the changes in the amount of the Company’s Backlog throughout the current and
prior reporting periods:
(in millions of Canadian dollars)
Opening balance
Securements, change orders & other adjustments
Realized in construction revenues
Closing balance
Year ended
December 31,
2022
Year ended
December 31,
2021
$
$
3,002.5
$
2,011.5
(2,377.5)
2,636.5
$
2,682.5
2,540.0
(2,220.0)
3,002.5
Gross Profit Percentage
Once the Company has secured a contract, the profitability of that contract, measured by the Gross Profit
Percentage, is primarily a function of management’s ability to control costs, achieve productivity objectives
associated with the contract and resolve commercial issues if they arise.
For 2022, the Company realized a Gross Profit Percentage of 8.5% compared with 8.4% in 2021. During the fourth
quarter of 2022, the Company realized a Gross Profit Percentage of 8.8% compared with 8.6% in fourth quarter of
2021. The year-over-year changes in Gross Profit Percentage for the quarter and year-to-date are discussed in the
sections above titled “Annual Results of Operations” and “Quarterly Results of Operations”.
Financial Condition
The Company must have adequate working capital and equity retained in the business to support its ongoing
operations, including surety and contract security requirements. The Company continually monitors the adequacy
of its working capital and equity to satisfy contract security needs. Working capital is calculated as total current
assets less total current liabilities.
The following table shows the working capital and shareholders’ equity balances of the Company at the end of
the following current and prior reporting periods:
(in thousands of Canadian dollars)
Working capital
Shareholders' equity
December 31,
2022
December 31,
2021
$
$
184,632
272,988
$
$
151,810
243,488
Further discussion of the change in the Company’s working capital and shareholders’ equity balances is provided
in the section entitled “Financial Condition, Capital Resources & Liquidity”.
Health, Safety & Environment
Bird’s number one Corporate Value is ‘We Put Safety First’. This means ensuring that all work on the Company’s
sites is executed to rigorous operational safety standards and enabled through a psychologically safe workspace.
Collectively these cornerstones form a culture that send our people home every day healthy and uninjured.
BIRD CONSTRUCTION INC.
MANAGEMENT'S DISCUSSION & ANALYSIS 2022
59
Bird’s approach to developing a healthy safety culture begins with senior leadership demonstrating our health,
safety and environment ("HS&E") values and executing an integrated long-term strategic focus on risk reduction.
This strategic focus extends to project risk mitigation beginning with pre-project safety planning and strong
safety execution practices ranging from competent project leadership, thorough frontline onboarding routines,
identification and control of hazards through to regular HS&E program oversight and evaluation. All the
foregoing is underpinned by the Company's workforce and trade partners being highly engaged in day-to-day
safety expectations.
Ensuring that all employees leave the jobsite every day just as healthy and safe as when they arrived is a shared
commitment and, by working collaboratively with employees and trade partners to achieve this, the Company
minimizes risk and creates the appropriate conditions for the safe execution of construction activity, on-time, on-
budget, and to the client’s satisfaction. The Company believes this shared commitment is critical to its overall
success and is proud to be a leader and founding member of the Canadian Construction Safety Council which
aims to raise safety standards and performance across the industry with like-minded general contractors.
The Bird HS&E strategy is foundational to achieving the foregoing. At Bird we are focused on three strategic
HS&E pillars – engagement, culture, and effective safeguards. Each of these pillars aims and anchors the
Company’s efforts towards establishing sustainable HS&E systems and results, a leadership team that cares, an
engaged workforce, and robust controls that prevent loss.
The following table shows the Company’s safety key performance indicators for the following current and prior
reporting periods:
Person-hours of work
Lost time incidents ("LTI")
Lost time incidents frequency ("LTIF")
OUTLOOK
Year ended
December 31,
2022
Year ended
December 31,
2021
10,002,845
10,131,291
1
0.02
1
0.02
Bird’s focus on diversification and collaborative contracting, record combined Backlog and
Pending Backlog, and healthy balance sheet, continue to differentiate the Company from
others in the construction industry. The benefits of the Company’s disciplined project
selection and strong execution, with minimal exposure to lump sum turn-key projects, is
evident in Bird’s 2022 results and our confidence in the 2023 outlook for revenue and
earnings growth.
Bird expects to maintain mid to high single digit revenue growth in 2023, capitalizing on the positive momentum
achieved in the second half of 2022 as well as the visibility provided by the Company's record combined $2.6
billion Backlog and $2.5 billion Pending Backlog at the end of the year, which includes over $900 million in
recurring revenue. In December 2022, the Company announced a 10% dividend increase, raising the monthly
dividend to $0.0358 per share commencing with the March 2023 dividend to be paid in April. The Company
anticipates significant growth in earnings per share and adjusted EBITDA in 2023, sufficient to achieve an
expected dividend payout ratio below 40% of net income for the year.
A key strategic focus for the Company is on margin improvement, which it expects to deliver through increasing
levels of self-perform work, accretive acquisitions with cross-selling opportunities, and a robust bidding
environment where the Company can be selective when pursuing new work. This is supported by the risk-
balanced and highly collaborative nature of Bird’s current work program. Bird remains disciplined in its cost
management, and expects to further leverage its cost structure to improve margins as the Company grows.
BIRD CONSTRUCTION INC.
MANAGEMENT'S DISCUSSION & ANALYSIS 2022
60
For 2023, Bird expects the seasonality of revenues and earnings to return to more normalized patterns due to the
completion of a large year-round work program that was fully operational in the first quarter of 2022. While the
work volume of this program has been fully replaced for 2023, the new work is expected to follow more seasonal
trends, with the Company anticipating modest revenue growth in the first quarter and second quarter,
notwithstanding expectations for mid to high single digit overall revenue growth for the year. Driven by
improving margins, earnings per share and adjusted EBITDA growth are expected to outpace revenue growth.
Bird enters 2023 with a healthy cash position, low leverage and additional credit capacity. The Company
continues to follow a disciplined approach to capital allocation, with smart investments in technology and
productivity measures to enhance competitiveness that support growth and opportunistic pursuit of additional
accretive tuck-in acquisitions that expand the Company's self-perform capabilities, similar to Dagmar and the
recently announced acquisition of Trinity. Trinity’s highly-scalable, specialized operations and strong customer
relationships are expected to provide opportunities for cross-selling and self-perform work across Bird's existing
divisions and exemplify Bird’s tuck-in M&A strategy to seek out high growth potential businesses with strong
margin and cash flow profiles.
Well-positioned for the future to achieve profitable growth and enhance shareholder value, Bird is excited to
deliver on its purpose - "We bring life to vision; Creating great things with you".
CAPABILITY TO DELIVER RESULTS
Productive capacity relates to the financial and non-financial resources available to the Company to execute its
strategy and achieve planned results. From a financial perspective, the Company believes it has sufficient working
capital and access to operating lines of credit to execute its near term operational and growth forecast, further
outlined in the Financial Condition, Capital Resources and Liquidity section.
The achievement of the Company's goals is not only based on financial stability, but also on the engagement and
leadership proficiency of our employees. Our 2022-2024 strategic plan prioritizes the development of a highly
engaged, high-performing team through innovative people programs. Annually, we identify and support the
growth of our top-performing employees through opportunities for career advancement and training. Our
performance management system places a strong emphasis on enhancing leadership skills, and we reinforce this
through various internal and external training programs, including the Bird Site Management program, Finance
for Non-Finance Managers, Frontline Leadership, and the Taking Flight management training program. These
programs serve as a platform for high-potential individuals to sharpen their leadership abilities and contribute to
the success of the Company.
FINANCIAL CONDITION, CAPITAL RESOURCES AND LIQUIDITY
The following table presents a summary of the Company’s financial condition at the end of the following
reporting periods:
(in thousands of Canadian dollars)
Cash and cash equivalents
Non-cash working capital
Working capital
Non-current loans and borrowings
Non-current right-of-use liabilities
Shareholders' equity
December 31,
2022
December 31,
2021
$
$
$
$
$
174,607
$
10,025
184,632
68,007
55,469
272,988
$
$
$
$
190,191
(38,381)
151,810
71,211
59,576
243,488
As a result of the strength of the Company’s balance sheet and its Syndicated Credit Facility, the Company
believes it has sufficient amounts of both working capital and liquidity to execute its Backlog and to
BIRD CONSTRUCTION INC.
MANAGEMENT'S DISCUSSION & ANALYSIS 2022
61
accommodate expected growth in its diversified work program. The Company believes it has sufficient working
capital to support its current and projected contractual requirements.
As a component of working capital, the Company maintains a balance of cash and cash equivalents. At
December 31, 2022, this balance totalled $174.6 million. Accessible cash at December 31, 2022 was $96.0 million
($103.0 million at December 31, 2021) with the remaining cash and cash equivalents balance held in trust or in
joint operations’ accounts. Accessible cash at December 31, 2022 decreased due to cash investments in working
capital to support the seasonal growth of the Company’s work programs, and due to shifts in geographical
project mix and stage of completion on certain major projects in regions where trust cash requirements are
enacted.
Non-cash working capital was $10.0 million at December 31, 2022, compared to a net liability position of $38.4
million at December 31, 2021. The investment in non-cash working capital utilized $48.4 million of cash year-to-
date in 2022. The overall use of cash is consistent with the Company’s seasonal expectations and is mainly due to
the shifts in project mix and the stage of completion on certain major projects.
The Company’s non-cash working capital position fluctuates significantly in the normal course of business from
period to period, primarily due to the timing of differences between the settlement of payables due to
subcontractors and suppliers, billings and collection of receivables from clients, and the timing in the settlement
of income taxes payable. The Company’s cash balances, and available credit facilities when needed, absorb these
fluctuations with no net impact to the Company’s net working capital position or ability to access contract surety
support.
At December 31, 2022, the Company had working capital of $184.6 million compared with $151.8 million at
December 31, 2021, an increase of $32.8 million. The primary driver of the increase was the Company’s net
income of $49.9 million exceeding the $20.9 million of dividends declared by $28.9 million. The Company’s
current ratio8 at December 31, 2022 further improved to 1.23 compared to 1.21 at December 31, 2021.
The $29.5 million increase in shareholders’ equity since December 31, 2021 was the result of the Company’s net
income of $49.9 million and other comprehensive income of $0.6 million, partially offset by $20.9 million of
dividends declared.
Credit Facilities
The Company has a number of credit facilities in place, including a Syndicated Credit Facility, Equipment
Financing facilities, and Letters of Credit facilities, available to access in order to support the issuance of letters of
credit, finance future capital expenditures and finance the day-to-day operations of the business. The
composition and terms of these facilities are more fully described in Note 18 to the December 31, 2022 annual
consolidated financial statements.
The following table outlines the amount of the credit facilities, the amount of issued letters of credit and the
amount of collateral pledged in support of the outstanding letters of credit at the end of the current and prior
reporting periods:
8 “Current ratio” is the percentage derived by dividing total current assets by total current liabilities. See “Terminology and Non-
GAAP & Other Financial Measures.”
BIRD CONSTRUCTION INC.
MANAGEMENT'S DISCUSSION & ANALYSIS 2022
62
(in thousands of Canadian dollars)
Committed revolving credit facility
Letters of credit issued from committed revolving credit facility
Drawn from committed revolving credit facility
Available committed revolving credit facility
Committed non-revolving term loan facility
Cumulative repayments of committed non-revolving term loan facility
Drawn committed non-revolving term loan facility
Non-committed Available Accordion
Letters of credit facilities
Letters of credit issued from letters of credit facilities
Available letters of credit facilities
Collateral pledged to support letters of credit
Guarantees provided by EDC
December 31,
2022
December 31,
2021
$
220,000
$
25,312
22,725
171,963
47,500
$
—
47,500
50,000
150,000
51,627
98,373
90
51,537
$
$
$
$
$
$
$
$
$
185,000
21,989
22,725
140,286
50,000
(625)
49,375
50,000
150,000
67,426
82,574
139
67,289
Annual Cash Flow Data
The following table provides an overview of cash flows for the years ended December 31, 2022 and 2021:
(in thousands of Canadian dollars)
2022
2021
$ change
Cash flows from operations before changes in non-cash working
capital
Changes in contract assets - alternative finance projects
Changes in non-cash working capital and other
Cash flows from (used in) operating activities
Investments net of capital distributions from equity accounted
entities
Proceeds on sale of investment in equity accounted entities
Additions to property, equipment and intangible assets
Proceeds on sale of property and equipment
Acquisitions, net of cash acquired
Other long-term assets
Cash flows from (used in) investing activities
Dividend paid on shares
Proceeds from loans and borrowings
Repayment of loans and borrowings
Repayment of right-of-use liabilities
Cash flows from (used in) financing activities
$
114,370 $
102,623 $
11,747
—
(70,971)
43,399
922
1,501
(27,766)
6,444
—
4,087
(14,812)
(20,941)
52,776
(56,366)
(19,747)
(44,278)
113
(66,910)
35,826
(113)
(4,061)
7,573
1,425
—
(503)
1,501
(11,756)
(16,010)
3,614
(20,563)
3,975
(23,305)
(20,749)
58,600
(52,832)
(19,265)
2,830
20,563
112
8,493
(192)
(5,824)
(3,534)
(482)
(34,246)
(10,032)
Increase (decrease) in cash and cash equivalents
$
(15,691) $
(21,725) $
6,034
Operating Activities
For the year ended December 31, 2022, cash flows from operating activities generated cash of $43.4 million, $7.6
million higher than the $35.8 million cash generated in the comparable period in 2021.
BIRD CONSTRUCTION INC.
MANAGEMENT'S DISCUSSION & ANALYSIS 2022
63
Cash flows from operations before changes in non-cash working capital of $114.4 million was $11.7 million higher
than the $102.6 million cash generated in 2021 due to $7.1 million higher net income, in addition to $4.6 million
higher net addbacks of non-cash items, including: higher losses from equity accounted investments ($6.9 million),
higher non-cash income tax expense ($2.5 million), higher finance and other costs ($2.3 million), and increased
amortization and depreciation ($1.9 million), partially offset by lower deferred compensation ($4.1 million), lower
gains on sale of property and equipment ($2.8 million), and lower non-cash finance and other income ($2.3
million).
Cash used to fund changes in non-cash working capital and other increased $4.1 million compared to 2021 driven
mainly by reduced net inflows related to accounts receivable and contract assets ($55.6 million), decreases in
provisions ($8.5 million), deferred compensation ($9.5 million), and higher interest payments ($2.0 million),
partially offset by reduced net cash outflows from accounts payable and contract liabilities ($45.8 million), lower
income tax payments ($22.4 million), and higher interest income received ($3.2 million). Prior year net inflows
related to accounts receivable and contract assets included collections of approximately $38.5 million of CEWS
recoveries. The Company's non-cash working capital position fluctuates significantly from period to period,
during the normal course of business, primarily due to timing differences between billings and collection of
receivables, settlement of payables due to subcontractors and suppliers, and the timing of income taxes payable.
Investing Activities
For the year ended December 31, 2022, the Company used $14.8 million of cash in investing activities compared
to $23.3 million used in 2021. The reduction in cash used of $8.5 million was primarily due to $20.6 million net cash
used to acquire Dagmar in 2021, $2.8 million higher proceeds on sale of property and equipment, and $1.5
million proceeds on sale of investment in equity accounted entities, partly offset by increased investment in
property and equipment, and intangible assets of $16.0 million and $0.5 million lower net capital distributions
received from equity accounted entities.
Financing Activities
For the year ended December 31, 2022, the Company used $44.3 million of cash to fund financing activities
compared to $34.2 used in 2021. The Company made $20.9 million of dividend payments and $26.5 million of
scheduled repayments of loans and borrowings and ROU liabilities, offset by proceeds from equipment financing
of $2.8 million. In addition, the Company borrowed and repaid $50.0 million on its revolving credit facility to fund
working capital needs throughout the year due to growth in its work program. In 2021, the Company made
dividend payments of $20.7 million and scheduled repayments of other loans and borrowings and ROU liabilities
of $27.1 million, offset by advances on the Company's non-revolving term loan of $15.9 million and revolving
credit facility of $7.7 million in connection with the acquisition of Dagmar, net of repayments on the Company's
revolving credit facility of $10.0 million.
BIRD CONSTRUCTION INC.
MANAGEMENT'S DISCUSSION & ANALYSIS 2022
64
Quarterly Cash Flow Data
The following table provides an overview of cash flows during the three months ended December 31, 2022 and
2021:
(in thousands of Canadian dollars)
Cash flows from operations before changes in non-cash working
capital
Changes in contract assets - alternative finance projects
Changes in non-cash working capital and other
Cash flows from (used in) operating activities
Investments net of capital distributions from equity accounted
entities
Proceeds on sale of investment in equity accounted entities
Additions to property, equipment and intangible assets
Proceeds on sale of property and equipment
Acquisitions, net of cash acquired
Other long-term assets
Cash flows from (used in) investing activities
Dividend paid on shares
Proceeds from loans and borrowings
Repayment of loans and borrowings
Repayment of right-of-use liabilities
Cash flows from (used in) financing activities
Three months ended December 31,
2021
2022
$ change
$
33,465 $
25,791 $
7,674
—
72,337
105,802
264
—
(6,614)
3,055
—
(113)
(3,408)
(5,235)
—
(21,567)
(4,889)
(31,691)
—
31,398
57,189
—
40,939
48,613
205
—
(5,539)
1,117
—
(944)
59
—
(1,075)
1,938
—
831
(5,161)
1,753
(5,235)
—
(6,984)
(4,953)
—
—
(14,583)
64
(17,172)
(14,519)
Increase (decrease) in cash and cash equivalents
$
70,703 $
34,856 $
35,847
Operating Activities
During the fourth quarter of 2022, cash flows from operating activities generated cash of $105.8 million, a
improvement of $48.6 million compared to $57.2 million cash generated in the fourth quarter of 2021.
Cash flows from operations before changes in non-cash working capital of $33.5 million was $7.7 million higher
than the $25.8 million cash generated in 2021. The improvement resulted from higher net income of $5.0 in the
current quarter in addition to higher addbacks for non-cash items consisting primarily of increased losses from
equity accounted investments ($2.0 million), higher finance and other costs ($1.0 million), and non-cash taxes ($1.8
million), partially offset by lower addbacks of depreciation and amortization ($0.9 million), higher deductions of
gains on sale of property and equipment ($0.7 million), and higher finance and other income ($0.5 million).
Cash generated to fund changes in non-cash working capital and other improved $40.9 million compared to the
fourth quarter of 2021 driven mainly by increased net inflows related to changes in accounts receivable and
contract assets ($5.3 million), decreased net cash outflows related to changes in accounts payable and contract
liabilities ($28.4 million), changes in provisions ($2.3 million), and lower income tax payments ($7.2 million),
partially offset by reduced net inflows related to other assets ($0.7 million), and changes in deferred
compensation ($1.1m). Net inflows related to accounts receivable and contract assets in the fourth quarter of 2021
included the collection of approximately $2.8 million of CEWS recoveries. The non-cash working capital position
fluctuates significantly in the normal course of business from period to period, primarily due to the timing of
differences between the settlement of payables due to subcontractors and suppliers, billings and collection of
receivables from clients, and the timing of the settlement of income taxes payable.
Investing Activities
During the fourth quarter of 2022, the Company used $3.4 million of cash in investing activities compared to $5.2
million used in 2021. The improvement of $1.8 million primarily relates to higher proceeds on sale of property and
equipment of $1.9 million and changes in other long-term assets of $0.8 million, partially offset by higher
BIRD CONSTRUCTION INC.
MANAGEMENT'S DISCUSSION & ANALYSIS 2022
65
additions to property and equipment of $1.1 million driven by project requirements and greater availability of
equipment in the current year quarter.
Financing Activities
During the fourth quarter of 2022, the Company used $31.7 million of cash related to financing activities,
comprised of $5.2 million of dividend payments, $1.6 million of scheduled repayments of loans and borrowings,
and $4.9 of scheduled payments of ROU liabilities. During the quarter, the Company also repaid $20.0 million on
its revolving credit facility that was used to fund temporary working capital needs earlier in the year. In the same
period of 2021, the Company's made dividend payments of $5.2 million, scheduled repayments of loans and
borrowings of $2.0 million, scheduled repayments of ROU liabilities of $5.0 million, and $5.0 million of repayments
on its revolving facility.
CONTRACTUAL OBLIGATIONS
At December 31, 2022, the Company has future contractual cash flow obligations of $760.6 million. Interest
payments on the committed revolving credit facility and committed non-revolving term loan facility are not
included in the table below since they are subject to variability based upon outstanding balances at various
points throughout the period.
(in thousands of Canadian dollars)
Trade payables
Not later
than 1 year
2 – 3 years
4 – 5 years
Later than 5
years
Contractual
cash flows
Carrying
amount
$ 538,577 $
33,343 $
1,304 $
— $ 573,224 $ 573,224
Dividends payable
ROU liabilities
1,745
—
—
— $
1,745
20,026
31,377
16,890
14,600 $
82,893
Committed revolving credit facility
—
22,725
Committed non-revolving term loan
Equipment financing
Acquisition holdback
Lease commitments
Other purchase commitments
5,000
2,229
1,000
3,434
4,760
42,500
2,193
—
—
—
—
760
—
—
— $
— $
— $
— $
— $
22,725
47,500
5,182
1,000
3,434
10,680
5,697
1,725 $
22,862
1,745
73,259
22,725
47,500
4,866
1,000
n/a
n/a
$ 576,771 $ 142,818 $
24,651 $
16,325 $ 760,565 $ 724,319
FINANCIAL INSTRUMENTS
Financial instruments consist of recorded amounts of derivative contracts, accounts receivable and other like
amounts that will result in future cash receipts, as well as accounts payable, dividends payable, loans and
borrowings, and any other amounts that will result in future cash outlays. The fair value of the Company’s loans
and borrowings approximate their carrying values on a discounted cash flow basis as the majority of these
obligations bear interest at market rates. The fair values of the remaining financial instruments approximate their
carrying value due to their relatively short periods to maturity.
The Company uses certain derivative financial instruments which are measured at fair value through profit and
loss (“FVTPL”). These may include interest rate swaps to manage its interest rate risk, forward contracts to
manage its foreign exchange risk on foreign currency payments and TRS derivative contracts for the purpose of
managing its exposure to changes in the fair value of its share-based compensation programs due to changes in
the Company’s share price. The Company does not designate any of its current derivative contracts as hedges.
The Company does not hold or use any derivative instruments for trading or speculative purposes.
The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk
management framework and reviews corporate policies on an ongoing basis. The financial instruments that Bird
uses expose the Company to credit, liquidity, market and currency risks. Refer to Note 32 to the December 31,
2022 annual consolidated financial statements for further details.
BIRD CONSTRUCTION INC.
MANAGEMENT'S DISCUSSION & ANALYSIS 2022
66
Credit Risk
The Company is primarily exposed to credit risk through accounts receivable. Before entering into any
construction contract and during the course of the construction project, the Company satisfies itself that the
customer has adequate resources to fulfil its contractual payment obligations as construction work is completed.
If a customer is unable or unwilling to pay an amount owing, the Company generally has a right to register a lien
against the project that will normally provide some security that the amount owed would be realized.
At December 31, 2022, accounts receivable outstanding for greater than 90 days and considered past due by the
Company’s management represent 16.6% (December 31, 2021 – 14.8%) of the balance of progress billings on
construction contracts receivable. Management continually monitors risks relating to the credit quality and
collectability of these accounts. The Company’s customers are predominantly large in scale and of high
creditworthiness, and the concentration of credit risk is limited due to the Company’s sizeable and unrelated
customer base. Management has recorded an allowance of $1.6 million (December 31, 2021 - $1.5 million) against
these past due receivables, net of amounts recoverable from others.
For the year ended December 31, 2022, no single customer accounted for 10% or more of contract revenue (2021
- one customer representing revenue of $323.6 million). Although large projects may occasionally result in
individual customers being significant, credit risk is mitigated through regular progress billings and other contract
security
Liquidity Risk
Liquidity risk relates to the risk that the Company will not be able to meet its financial obligations as they become
due. The Company manages this risk through management of its capital structure, monitoring and reviewing
actual and forecasted cash flows and the effect on bank covenants, and maintaining unused credit facilities where
possible to ensure there are available cash resources to meet the Company’s liquidity needs. In managing
liquidity risk, the Company has access to committed short and long-term debt facilities as well as equity markets,
the availability of which is dependent on market conditions. See the section titled "Financial Condition, Capital
Resources and Liquidity" for further information on the Company's financial condition, capital resources and
liquidity.
Market Risk
Market risk is the risk that changes in market prices, such as interest rates, equity prices and corporate bond
yields, will affect the Company’s income or the value of its holdings in liquid securities.
The Company is exposed to interest rate risk to the extent that its credit facilities are based on variable rates of
interest. At December 31, 2022, a one percent change in the interest rate applied to the Company's variable rate
long-term debt would change annual income before income taxes by approximately $0.7 million (2021 – $0.7
million).
The Company has certain share-based compensation plans where the values are based on the common share
price of the Company. The Company has fixed a portion of the settlement costs of these plans by entering into
various TRS derivative contracts maturing in 2023. At December 31, 2022, a 10 percent change in the share price
applied to the Company's TRS derivatives would change income before income taxes by approximately $1.6
million (2021 – $1.5 million).
The Company holds warrants for common shares of a publicly traded entity. At December 31, 2022, a 10 percent
increase or decrease in the share price of the underlying entity would result in an increase in income before
income taxes of approximately $0.1 million or a loss of $nil, respectively.
Currency Risk
Currency risk is the risk that fluctuations in currency exchange rates will affect the Company’s net income.
The Company uses foreign currency to settle payments to certain vendors and subcontractors. At December 31,
2022, a 10% movement in the Canadian and U.S. dollar exchange rate would have changed income by
approximately $0.2 million (2021 – $0.2 million).
BIRD CONSTRUCTION INC.
MANAGEMENT'S DISCUSSION & ANALYSIS 2022
67
DIVIDENDS
The Company declared monthly eligible dividends on common shares payable on or about the 20th of the month
following the month in which the dividend was declared. The following table outlines Bird’s dividend history:
Dividend Period
January 1 to March 31
April 1 to June 30
July 1 to September 30
October 1 to December 31
$
$
$
$
2022
0.0975 $
0.0975 $
0.0975 $
0.0975 $
2021
0.0975
0.0975
0.0975
0.0975
As of March 7, 2023, the Board of Directors has declared eligible dividends with a record date subsequent to
December 31, 2022, for the following months:
Eligible dividends declared
January dividend
Record date
January 31, 2023
Payment date
February 17, 2023
Dividend per share
0.0325
$
February dividend
March dividend
April dividend
February 28, 2023
March 20, 2023
March 31, 2023
April 28, 2023
April 20, 2023
May 19, 2023
$
$
$
0.0325
0.0358
0.0358
OUTSTANDING COMMON SHARE DATA AND STOCK EXCHANGE LISTING
The Company is authorized to issue an unlimited number of common shares. The Company had a total of
53,774,639 common shares outstanding at March 7, 2023 (December 31, 2021 - 53,695,293). The Company’s
common shares are listed on the Toronto Stock Exchange (“TSX”) under the trading symbol BDT.
OFF BALANCE SHEET ARRANGEMENTS
The Company has surety lien bonds issued on behalf of the Company valued at $87.8 million at December 31,
2022 (December 31, 2021 - $93.1 million).
The Company has recognized assets and liabilities for all leases with a term of more than twelve months,
excluding low-value assets, in accordance with IFRS 16 Leases.
Further details of commitments and contingencies are included in Note 34 to the December 31, 2022 annual
consolidated financial statements.
RELATED PARTY TRANSACTIONS
The Company’s related parties, as defined by IFRS, are its joint arrangements and key management personnel. A
description of any material transactions with these related parties is included in Note 35 to the December 31,
2022 annual consolidated financial statements.
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SUMMARY OF QUARTERLY RESULTS
(in thousands of Canadian dollars, except per share amounts)
2021
2022
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Revenue
Net income
$ 444,637 $ 556,362 $ 621,224 $ 597,803 $ 475,521 $ 576,688 $ 668,156 $ 657,184
7,119
13,630
12,117
9,917
6,361
14,104
14,466 14,932
Earnings per share
0.13
0.26
0.23
0.18
0.12
0.26
0.27
0.28
Adjusted Earnings(1)
9,137
14,950
13,821
13,046
6,546
8,491
15,502 15,485
Adjusted Earnings Per Share
0.17
0.28
0.26
0.24
0.12
0.16
0.29
0.29
Adjusted EBITDA(1)
21,040
30,112
28,585
28,399
17,835
21,508
31,203 30,639
(1) Adjusted Earnings and Adjusted EBITDA are non-GAAP financial measures. See "Terminology and Non-GAAP & Other Financial
Measures."
The Company experiences more seasonality in its business in the first quarter and early second quarter as a result
of the nature of its mining work program and the timing of new project starts in its industrial work program.
Contracts typically extend over several quarters and often over several years. In addition, seasonal activity often
increases in both the spring and fall for the Company’s MRO services, related to plant turnarounds that are
typically completed in this timeframe.
For purposes of quarterly financial reporting, the Company must estimate the cost required to complete each
contract to assess the overall profitability of the contract and the amount of gross profit to recognize for the
quarter. Such estimating includes contingencies to allow for certain known and unknown risks. The magnitude of
the contingencies will depend on the nature and complexity of the work to be performed. As the contract
progresses and remaining costs to be incurred and risk exposures become more certain, contingencies will
typically decline or have been utilized, although certain risks will remain until the contract has been completed,
and even beyond.
In some cases, variations in earnings may occur where costs incurred to date may be recoverable from insurance
policies or claims to customers at a future date but cannot be recorded in the current quarter. In the case of
insurance claims, financial recovery is not recorded until certainty of the recovery is attained. In the case of claims
against customers that are considered constrained variable consideration, revenue is not recorded until it is highly
probable that there will not be a significant reversal of cumulative revenue to date. As a result, earnings may
fluctuate significantly from quarter-to-quarter, depending on whether contracts with these types of claims are
completed or nearing completion during the quarter, or have been completed in a prior quarter, and may
fluctuate based on timing of resolution of claims.
There are also several other factors that can affect the Company’s revenues and profit from quarter-to-quarter.
These include the timing of contract awards, the value of subcontractor billings and project scheduling.
Management does not believe that any individual factor is responsible for changes in revenue from quarter-to-
quarter, except for seasonality in the first quarter of each year, significant acquisitions, and the impact of the
COVID-19 pandemic.
The COVID-19 pandemic impact put downward pressure on the Company’s revenue with significant impacts that
commenced in the second quarter of 2020. Commencing in the third quarter of 2020 and continuing until the
second quarter of 2021, the Company was able to partially offset costs incurred as a result of the pandemic
through recoveries under the CEWS program. With nominal CEWS recoveries reflected in the third quarter of
2021 and none thereafter, the Company’s results reflect the full financial impact of the pandemic.
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ACCOUNTING POLICIES
The Company’s significant accounting policies are outlined in the notes to the annual consolidated financial
statements for the year ended December 31, 2022.
New Accounting Standards, Amendments and Interpretations Adopted
The Company has adopted new amendments effective January 1, 2022 related to IAS 37 Onerous Contracts and
annual improvements to IFRS standards 2018-2020 for IFRS 9 Financial Instruments and IFRS 16 Leases that did
not have a material impact on the Company’s financial statements.
Future Accounting Changes
There are new accounting standards and amendments to accounting standards and interpretations that are
effective for annual periods beginning on or after January 1, 2023 that have not been applied in preparing the
financial statements for the period ended December 31, 2022. These standards and interpretations are not
expected to have a material impact on the Company’s financial statements.
CRITICAL ACCOUNTING ESTIMATES & JUDGEMENTS
The preparation of the financial statements requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and the reported amounts of revenues, expenses,
assets, liabilities and the disclosure of contingent assets and liabilities at the reporting date.
Uncertainty about these assumptions and estimates could result in a material adjustment to the carrying amount
of an asset or liability and/or the reported amount of revenue and expense in future periods. Estimates and
underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in
the period in which the estimates are revised and in any future periods affected.
Assets and liabilities acquired in a business combination
The Company assesses whether an acquisition transaction should be accounted for as an asset acquisition or a
business combination under IFRS 3 Business Combinations. The purchase price related to a business combination
is allocated to the underlying acquired assets and liabilities based on estimates of their fair value at the time of
acquisition. The determination of fair value requires the Company to make assumptions, estimates and
judgements regarding future cash flows, valuation techniques, economic risk, weighted average cost of capital
and future events. The measurement of purchase consideration and allocation process are therefore inherently
subjective and impact the amounts assigned to identifiable assets and liabilities. As a result, the purchase price
allocation impacts the Company’s reported assets and liabilities (including the amounts allocated to intangible
assets and goodwill), and future earnings due to the associated depreciation and amortization expense along
with the required impairment testing.
Revenue and gross profit recognition
Construction revenue, construction costs, contract liabilities, and contract assets are based on estimates and
judgements used in determining contract revenue and the determination of estimated costs to complete in order
to calculate the stage of completion for a particular construction project, depending upon the nature of the
construction contract, as more fully described in the revenue recognition policy. To determine the estimated
costs to complete construction contracts, assumptions and estimates are required to evaluate matters related to
schedule, material and labour costs, labour productivity, changes in contract scope and subcontractor costs. Due
to the nature of construction activities, estimates can change significantly from one accounting period to the next.
The value of many construction contracts increases over the duration of the construction period. Change orders
may be issued by customers to modify the original contract scope of work or conditions. In addition, there may be
disputes or claims regarding additional amounts owing as a result of changes in contract scope, delays, additional
work or changed conditions. Construction work related to a change order or claim may proceed, and costs may
be incurred, in advance of final determination of the value of the change order. Change orders and claims may
not be settled until the construction project is complete or subsequent to completion, and the nature of the
relationship with the other party to the claim and the history of success of these claims may impact the associated
revenue or cost recovery. Claims against customers for variable consideration due to factors described above are
BIRD CONSTRUCTION INC.
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assessed under the Company’s revenue policy, which requires significant judgement. The amount of variable
consideration that is constrained is the difference between the total claim value and the best estimate of
recovery. This constrained value is reviewed each reporting period.
Provisions
Legal, warranty and other provisions involve the use of estimates. Estimates and assumptions are required to
determine when to record, and how to measure, a provision in the financial statements. The outcomes may differ
significantly from the estimates used in preparing the financial statements resulting in adjustments to previously
reported financial results.
Impairment of non-financial assets
Management evaluates property and equipment, intangible assets with definite lives, and right-of-use (“ROU”)
assets at the end of each reporting period to determine if there are events or circumstances which indicate that
the carrying value may not be recoverable. Goodwill and intangible assets with indefinite lives are tested for
impairment annually, or more frequently if events or changes in circumstances indicate that the asset may be
impaired. Impairment testing is performed by comparing the recoverable amount of the cash-generating unit
("CGU") or groups of CGUs to its carrying amount. There is a significant amount of uncertainty with respect to the
estimate of the recoverable amount given the necessity of making economic projections which employ the
following key assumptions: future cash flows, growth opportunities, including economic risk assumptions, and
estimates of achieving key operating metrics and drivers, and the discount rate. Refer to note 17 to the
December 31, 2022 annual consolidated financial statements for further details regarding the assumptions and
estimates regarding the Company’s goodwill impairment assessment.
Measurement of pension obligations
The Company’s obligations and expenses related to defined benefit (“DB”) pension plans are determined using
actuarial valuations and are dependent on a number of significant assumptions. The DB obligations and benefit
cost levels will change as a result of future changes in actuarial methods and assumptions, membership data, plan
provisions, legislative rules, and future experience gains or losses. Actual experience that differs from
assumptions may result in gains or losses that will be disclosed in future accounting valuations. Refer to note 23 to
the December 31, 2022 annual consolidated financial statements for further details regarding the Company’s DB
pension plans.
Share-based payments
Compensation expense accrued for performance share units (“PSU”) is dependent upon the final number of PSU
awards that will eventually vest, adjusted for a performance multiplier, that is estimated by management and
approved by the Board of Directors. Large fluctuations in compensation expense may occur due to changes in
the underlying share price or revised management estimates of relevant performance factors.
Leases
The Company applies judgement in reviewing each of its contractual arrangements to determine whether the
arrangement contains a lease within the scope of IFRS 16 Leases. Leases that are recognized are subject to
further management judgement and estimation in various areas specific to the arrangement, including the term
of the lease. In determining the lease term to be recognized, management considers all facts and circumstances
that create an economic incentive to exercise an extension option, or not to exercise a termination option.
Where a lease does not specify an interest rate, lease liabilities are estimated using a discount rate equal to the
Company-specific incremental borrowing rate. This rate represents the rate that the Company would incur to
obtain the funds necessary to purchase an asset of a similar value, with similar payment terms and security in a
similar economic environment.
Income taxes
Tax regulations and legislation are subject to change and there are differing interpretations requiring
management judgement. Deferred tax assets are recognized when it is considered probable that deductible
temporary differences will be recovered in future periods, which requires management judgement. Deferred tax
liabilities are recognized when it is considered probable that temporary differences will be payable to tax
authorities in future periods, which requires management judgement. Income tax filings are subject to audits and
BIRD CONSTRUCTION INC.
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re-assessments and changes in facts, circumstances and interpretations of tax laws may result in a material
increase or decrease in the Company’s provision for income taxes.
CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Disclosure controls and procedures are designed to provide reasonable assurance that all material information is
gathered and reported to senior management, including the President and Chief Executive Officer (“CEO”) and
Chief Financial Officer (“CFO”), particularly during the period in which the annual filings are being prepared, and
information required to be disclosed in the Company's annual filings, interim filings or other reports filed or
submitted by it under securities legislation has been recorded, processed, summarized and reported within the
time periods specified in the securities legislation.
An evaluation of the effectiveness of the design of the Company’s disclosure controls and procedures was carried
out under the supervision of management, including the CEO and CFO, with oversight by the Board of Directors
and Audit Committee, as at December 31, 2022. Based on this evaluation, the Company’s CEO and CFO have
concluded that the design and operation of the Company’s disclosure controls and procedures, as defined in NI
52-109, was effective as at December 31, 2022.
Internal Controls over Financial Reporting
Internal controls over financial reporting are designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with IFRS.
Absolute assurance cannot be provided that all misstatements have been detected because of inherent
limitations in all control systems. The Company’s management is responsible for designing and maintaining
adequate internal control over financial reporting for the Company.
An evaluation of the effectiveness of the design of the Company’s internal controls over financial reporting was
carried out under the supervision of management, including the CEO and CFO, with oversight by the Board of
Directors and Audit Committee, as at December 31, 2022, using the control framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission on Internal Control - Integrated Framework (2013).
Based on this evaluation, the Company’s CEO and CFO have concluded that the design and operation of the
Company’s internal controls over financial reporting, as defined in NI 52-109, was effective as at December 31,
2022.
There have been no material changes in the Company’s internal controls over financial reporting during the
period beginning on October 1, 2022 and ending on December 31, 2022, that materially affected, or are
reasonably likely to materially affect, the Company’s internal controls over financial reporting.
RISKS RELATING TO THE BUSINESS
The following are the more significant risk factors relating to the business. For a detailed discussion of all risk
factors relating to the business, refer to the Company’s most recently filed Annual Information Form dated
March 7, 2023 which is available through SEDAR at www.sedar.com and on the Company’s website at
www.bird.ca. Readers are also encouraged to review the “Forward-Looking Information” section of this MD&A.
Ability to Hire and Retain Qualified and Capable Personnel
The success of Bird is highly influenced by the efforts of key management, technical, project and business
development personnel. The loss of the services of any of Bird’s key management personnel could negatively
impact Bird. The future success of Bird also depends heavily on its ability to attract, retain and develop high-
performing personnel in all areas of its operations.
Most firms throughout the construction industry face this challenge and, accordingly, competition for professional
staff is intense. If Bird ceases to be seen by current and prospective employees as an attractive place to work, it
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could experience difficulty in hiring and retaining an adequate level of qualified staff. This could have an adverse
effect on current operations of Bird and would limit its prospects and impair its future success.
Maintaining Safe Work Sites
Despite the Company’s efforts to minimize the risk of safety incidents, they can occur from time to time and, if
and when they do, the impact on Bird can be significant. Bird’s success as a general contractor is highly
dependent on its ability to keep its construction work sites and offices safe and any failure to do so can have
serious impact on the personal safety of its employees and others. In addition, it can expose Bird to contract
termination, fines, regulatory sanctions or even criminal prosecution.
Bird’s safety record and worksite safety practices also have a direct bearing on its ability to secure work,
particularly in the industrial sector. Certain clients will not engage particular contractors to perform work if their
safety practices do not conform to predetermined standards or if the general contractor has an unacceptably high
incidence of safety infractions or incidents.
Bird adheres to very rigorous safety policies and procedures which are continually reinforced on its work sites and
offices. Management is not aware of any pending health and safety legislation or prior incidents which would be
likely to have a material impact on any of Bird’s operations, capital expenditure requirements, or competitive
position. Nevertheless, there can be no guarantee with respect to the impact of future legislation or incidents.
Economy and Cyclicality
Activity within the construction industry is generally tied to the state of the economy. Thus, in periods of strong
economic growth, capital spending will generally increase and there will be more and higher quality opportunities
available within the construction industry. Investment decisions by our clients are based on long-term views of the
economic viability of their current and future projects, sometimes based upon the clients’ view of the long-term
prices of commodities which are influenced by many factors. If our clients’ outlook for their current and future
projects is not favourable, this may lead them to delay, reduce or cancel capital project spending and may make
them more sensitive to construction costs. A prolonged downturn in the economy could impact Bird’s ability to
generate new business or maintain a backlog of contracts with acceptable margins to sustain Bird through such
downturns.
As noted above, Bird attempts to insulate itself in various ways from the effects of negative economic conditions
through diversification of the sources of the Company’s earnings; however, there is no assurance that these
methods will be effective in insulating Bird from a downturn in the economy. Furthermore, as a result of increased
demand in certain regions or industry sectors, the Company has, in the past, earned favourable margins on
particular projects. There is also no assurance that above-average margins that may have been generated on
historical contracts can be generated in the future.
Ability to Secure Work
Bird generally secures new contracts either through a competitive bid process or through negotiation. Awards in
both the public and private sectors are generally based upon price, but are also influenced and sometimes
formally based on other factors, such as the level of services offered, safety record, construction schedule, design
(if applicable), project personnel, the consortium, joint venture and subcontractor team, prior experience with the
prospective client and/or the type of project, and financial strength including the ability to provide bonds and
other contract security.
In order to be afforded an opportunity to bid for large projects, a strong balance sheet measured in terms of an
adequate level of working capital and equity is typically required.
A decline in demand for Bird’s services from the private sector could have an adverse impact on the Company if
that business could not be replaced within the public sector. A portion of Bird’s construction activity relates to
government-funded institutional projects. Any reduction in demand for Bird’s services by the public sector,
whether as a result of funding constraints, changing political priorities or delays in projects caused by elections or
other factors, could have an adverse impact on the Company if that business could not be replaced within the
private sector.
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Global Pandemics
Global pandemics, such as the recent COVID-19 pandemic, can result in widespread illnesses and deaths, can
impact the health of the Company’s workforce and can prevent the Company from being able to carry on its
operations whether due to direct impacts, or indirect impacts through its customers and suppliers. These impacts
can severely limit the Company’s ability to operate and to generate revenues or cash flows, while its ability to
eliminate or reduce costs during such times may be limited. Accordingly, with any threat of a pandemic or similar
public health emergency, the Company could suffer significant financial losses and a deterioration in its
creditworthiness and therefore have a material adverse effect on the Company.
Performance of Subcontractors
Successful completion of a contract by Bird depends, in large part, on the satisfactory performance and
availability of its subcontractors who are engaged to complete the various components of the work.
Subcontractor defaults tend to increase during downturns in overall market conditions. If subcontractors fail to
satisfactorily perform their portion of the work, Bird may be required to engage alternate subcontractors to
complete the work and may incur additional costs. This can result in reduced profits or, in some cases, significant
losses on the contract and possible damage to Bird’s reputation.
In addition, the ability of Bird to bid for and successfully complete projects is, in part, dependent on the
availability of qualified subcontractors and trades people. Depending on the value of a subcontractor’s work, Bird
may require some form of performance security and achieves this through the use of surety bonds, subcontractor
default insurance or other forms of security from the subcontractor to mitigate Bird’s exposure to the risks
associated with the subcontractor’s performance and completion. A significant shortage of qualified
subcontractors and trades people or the bankruptcy of a subcontractor could have a material impact on Bird’s
financial condition and results of operations.
Accuracy of Cost to Complete Estimates
As Bird performs each construction contract, costs are continuously monitored against the original cost estimates.
On at least a quarterly basis, a detailed estimate of the costs to complete a contract is compiled by the Company.
These estimates are an integral part of Bird’s process for determining construction revenues and profits, and
depend on cost data collected over the duration of the project as well as estimates and judgements of Bird’s field
and office personnel. Bird has adopted numerous internal control activities aimed at mitigating exposure to this
risk, however to the extent that the costs to complete estimates are based on inaccurate or incomplete
information, or on faulty judgements, the accuracy of reported construction revenues and profits can be
impacted.
Estimating Costs and Schedules/Assessing Contract Risks
The price for most contracts performed by Bird is based, in part, on cost and schedule estimates that are subject
to a number of assumptions, including assumptions as to inflationary impacts. Erroneous assumptions can result
in an incorrect assessment of risks associated with a contract or estimates of project costs and schedules that are
in error, potentially resulting in lower than anticipated profit or significant loss. All significant cost and schedule
estimates are reviewed by senior management prior to tender submission to help mitigate these risks.
Adjustments and Cancellations of Backlog
The future performance of the Company in a period depends significantly on the contribution from projects in its
backlog. There can be no assurance that the revenues or profits included in backlog at any point in time will be
realized. Contract suspensions, reductions and cancellations, which are beyond the control of Bird, do occur from
time-to-time in the construction industry. Customers may have the right to suspend, cancel or reduce the scope
of their contracts with Bird and, though Bird generally has a contractual right to be reimbursed for certain costs, it
typically has no contractual rights to the total revenue or profit that was expected to be derived from such
projects. These reductions could have a material adverse impact on future revenues and profitability.
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Work Stoppages, Strikes and Lockouts
Bird is signatory to a number of collective bargaining agreements. Future negotiation of these collective
bargaining agreements could increase Bird’s operating expenses and reduce profits as a result of increased
wages and benefits. Failure to come to an agreement in these collective bargaining negotiations or those of its
subcontractors and suppliers or government agencies could result in strikes, work stoppages, lockouts or other
work action, and increased costs resulting from delays on construction projects. A strike or other work stoppage
may be disruptive to Bird’s operations and could adversely affect portions of its business, financial position,
results of operations and cash flows.
Acquisition and Integration Risk
The Company has made acquisitions, and may continue to pursue acquisition opportunities to advance its
strategic plan. The successful integration of an acquired business typically requires the management of the pre-
transaction business strategy, including the retention and addition of customers, realization of identified cost,
revenue and strategic synergies, retention of key staff and the development of a common corporate culture.
Failure to adequately address differences in technology, culture, customers, projects, or other issues could
negatively affect financial performance. There is no assurance that the Company will be able to successfully
integrate an acquired business in order to maximize or realize the benefits associated with an acquisition.
Litigation/Potential Litigation
In the normal course of the construction business, disputes sometimes arise between parties to construction
contracts. While Bird attempts to resolve any disagreements or disputes before they escalate to litigation, in
some situations this is not possible. At any given time, Bird may be involved in a number of disputes that could
lead to litigation and there may be a number of disputes in various stages of litigation.
The Company makes provisions in its consolidated financial statements for any potential settlements relating to
such matters and management does not believe that any existing litigation or pending litigation will ultimately
result in a final judgment against Bird that would have a materially adverse impact on the operations of Bird.
Litigation is, however, inherently uncertain and, accordingly, adverse outcomes not currently provided for in any
current litigation or pending litigation are possible. These potentially adverse outcomes could include financial
loss, damage to Bird’s reputation or a reduction in prospects for future contract awards.
Design Risks
While many contracts entered into by Bird are for construction or construction services only, certain contracts are
undertaken on a design-build basis, under which Bird is responsible for both design and construction of the
project, which adds design risk assumed by Bird. While Bird subcontracts all of the design scope in such design-
build contracts to reputable designers, there is generally not a full transfer of design-related risks. These risks
include design development and potential resulting scope extensions not anticipated at the outset of the project,
delays in the design process that may adversely affect the overall project schedule, and design errors and
omissions.
To manage these risks, Bird manages and oversees the design process, coordinates the design deliverables with
the construction process and, for significant design-build projects, purchases errors and omissions insurance.
Information Systems and Cyber-security Risk
The Company relies on information technology to manage, process, store and transmit electronic information.
Complete, accurate, available and secure information is vital to the Company’s operations and any compromise in
such information could result in improper decision making, inaccurate or delayed operational and/or financial
reporting, delayed resolution to problems, breach of privacy and/or unintended disclosure of confidential
information. Failure in the completeness, accuracy, availability or security of the Company’s information systems,
the risk of system interruption or failure during system upgrades or implementation, or a breach of data security
could adversely affect the Company’s operations and financial results. In addition, cyber-security incidents
relating to the Company’s information technology systems may disrupt operations and impact operating results.
Cyber-security incidents may occur from a range of techniques, from phishing or hacking attacks to sophisticated
malware, hardware or network attacks. While the Company has implemented systems, policies, procedures,
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practices, hardware and backups designed to prevent and limit the effect of cyber-security attacks, there can be
no assurance that these measures will be sufficient to prevent, detect or address the attacks in a timely matter, or
at all. A successful cyber-attack may allow unauthorized interception, destruction, use or dissemination of the
Company’s confidential information, which could have a material adverse effect on the business.
The Company maintains a dedicated team of technology and cybersecurity professionals who manage a
comprehensive program to help protect the organization against breaches and other incidents with appropriate
security and operational controls in place, including the monitoring of threats. The Company also has a continual
training and compliance program that all employees must adhere to. The Company’s risk management activities
also include ensuring sufficient information security insurance coverage is in place, and the regular engagement
of third-party expertise to assess our information security systems.
Climate Change Risk
Risks in Transitioning to a Lower Carbon Economy
The transition to a lower-carbon economy has the potential to be disruptive to traditional business models and
investment strategies. The Company’s private and/or public-sector clients may shift their infrastructure priorities
due to changes in project funding or public perception of sustainable projects. This risk can be mitigated to an
extent by identifying changing market demands to offset lower demand in some sectors with opportunities in
others, forming strategic partnerships and pursuing sustainable innovations.
Government action to address climate change may involve economic instruments such as carbon and energy
consumption taxes as well as restrictions on economic sectors, such as cap-and-trade and more stringent
regulation of greenhouse gas emissions that could also impact the Company’s current or potential clients
operating in industries that extract, distribute and transport fossil fuels, or clients in other carbon intensive
industries.
Financial Risks
As new climate change measures are introduced or strengthened, the Company’s cost of business, including
insurance premiums, may increase, and the Company may incur expenses related to complying with
environmental regulations and policies where it does business. Such costs may include purchasing new
equipment to reduce emissions to comply with new regulatory standards or to mitigate the financial impact of
different forms of carbon pricing. In addition, the Company may incur costs related to engaging with
governments, regulators and industry organizations for new mandates on infrastructure projects, proactively and
regularly monitoring regulatory trends and implementing adequate compliance processes. Although the
Company actively monitors applicable climate change laws and regulations and compliance with them, and is
proactive in promoting and supporting climate change mitigation actions, inadvertent compliance shortfalls could
result in penalties and reputational damage that may impair the Company's future prospects.
Market and Reputational Risk
Investors and other stakeholders in Canada and worldwide are becoming more attuned to climate change action
and sustainability matters, including the efforts made by issuers to reduce their carbon footprint. The Company’s
reputation may be harmed if it is not perceived by its stakeholders to be sincere in its sustainability commitment
and its long-term results may be impacted as a result. In addition, the Company’s approach to climate change
issues may increasingly influence stakeholders’ views of the Company in relation to its peers and their investment
decisions.
Weather Related Risks
Many of the Company’s construction activities are performed outdoors. The probability and unpredictability of
extreme weather events and other associated incidents may continue to increase due to climate change and
there may continue to be longer-term shifts in climate patterns. Although weather risk may be mitigated through
contractual terms or insurance, construction projects are susceptible to delays as a result of extended periods of
poor weather, which can have an adverse effect on profitability. These negative effects can arise from late
completion penalties imposed by the contract, the incremental costs arising from loss of productivity,
compressed schedules, overtime work utilized to offset the time lost due to adverse weather or additional costs
to modify methods to perform work in unanticipated weather.
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TERMINOLOGY AND NON-GAAP & OTHER FINANCIAL MEASURES
Terminology
Throughout this report, management uses the following terms that may not be comparable with similar terms
presented by other companies and require definition.
•
“Backlog” is the total value of all contracts awarded to the Company, less the total value of work completed
on these contracts as of the date of the most recently completed quarter. This includes all contracts that have
been awarded to the Company whether the work has commenced or will commence in the normal course. It
includes all the Company’s remaining performance obligations in its contracts with its clients, including work
orders and other formal documents to proceed issued in connection with multi-year recurring revenue
contracts such as MSAs, maintenance, task order, and similar contractual arrangements. It does not include
amounts for variable consideration that are constrained, agency relationship construction management
projects, and estimated future work orders or other formal documents to proceed to be performed as part of
recurring revenue agreements. The Company’s Backlog equates to the Company’s remaining performance
obligations as at December 31, 2022, and December 31, 2021; refer to Note 10 of the December 31, 2022
annual consolidated financial statements.
•
“Lost Time Incident Frequency” or “LTI Frequency” is the number of lost time incidents recorded per
200,000 person-hours of work by Bird employees.
Non-GAAP and Other Financial Measures
Throughout this MD&A certain measures are used that do not have a standardized meaning prescribed by IFRS
and are considered specified financial measures. These include non-GAAP financial measures, non-GAAP
financial ratios and supplementary financial measures. The Company’s specified financial measures are detailed
below. These measures may not be comparable with similar measures presented by other companies.
Non-GAAP Financial Measures
•
“Adjusted Earnings” is defined as IFRS net income excluding asset impairments, acquisition, integration and
restructuring (as defined in accordance with IFRS) costs and the income tax effect of these costs. Acquisition,
integration and restructuring (as defined in accordance with IFRS) costs are a component of Costs of
construction and General and administrative expenses presented in the statement of income. Management
uses Adjusted Earnings to assess the operating performance of the business. These adjustments are made to
exclude items of an unusual nature that are not reflective of ongoing operations. Management believes that
investors and analysts use these measures, as they may provide predictive value to assess the ongoing
operations of the business and are a more consistent comparison between financial reporting periods.
ADJUSTED EARNINGS
(in thousands of Canadian dollars, except per share amounts)
Three months ended
December 31,
2021
2022
Year ended December 31,
2021
2022
Net income
$
14,932 $
Add: Acquisition and integration costs
Add: IFRS restructuring costs (1)
Deduct: Gain on settlement of trade receivable
Income tax effect of the above items
728
—
—
(175)
9,917 $
4,111
—
—
(982)
49,863 $
2,487
—
(7,596)
1,270
42,783
10,780
—
—
(2,609)
Adjusted Earnings
Adjusted Earnings Per Share (2)
$
$
15,485 $
13,046 $
46,024 $
50,954
0.29 $
0.24 $
0.86 $
0.96
(1) Restructuring costs as defined in accordance with IFRS.
(2) Calculated as Adjusted Earnings divided by basic weighted average shares.
•
“Adjusted EBITDA” represents earnings before taxes, interest, depreciation and amortization, finance and
other costs, finance and other income, asset impairment charges, gain or loss on sale of property and
equipment, restructuring and severance costs outside of normal course, and acquisition, integration and
BIRD CONSTRUCTION INC.
MANAGEMENT'S DISCUSSION & ANALYSIS 2022
77
restructuring (as defined in accordance with IFRS) costs. Acquisition costs, integration costs, restructuring (as
defined in accordance with IFRS) costs, and other restructuring and severance costs are a component of
Costs of construction and General and administrative expenses presented in the statement of income.
Adjusted EBITDA is a common financial measure used by investors, analysts, and lenders as an indicator of
cash operating performance, as well as a valuation metric, and as a measure of a company’s ability to incur
and service debt. The calculation of Adjusted EBITDA excludes items that do not reflect ongoing cash flows
of the business or continuing operations, including impairment charges, restructuring charges, and
acquisition and integration charges, as management believes that these items should not be reflected in a
metric used for valuation and debt servicing evaluation purposes.
ADJUSTED EBITDA
(in thousands of Canadian dollars, except percentage amounts)
Three months ended
December 31,
2021
2022
Year ended December 31,
2021
2022
Net income
Add: Income tax expense
Add: Depreciation and amortization
Add: Finance and other costs
Less: Finance and other income
Add: Loss (gain) on sale of property and equipment
Add: IFRS restructuring costs (1)
Add: Other restructuring and severance costs (2)
Add: Acquisition and integration costs
$
14,932
$
9,917
$
49,863
$
5,459
8,798
2,933
(904)
(1,307)
—
—
728
3,699
9,714
1,890
(426)
(608)
—
102
17,322
36,439
9,818
(10,341)
(4,403)
—
—
42,783
14,847
34,537
7,550
(1,322)
(1,576)
—
537
4,111
2,487
10,780
Adjusted EBITDA
$
30,639
$
28,399
$
101,185
$
108,136
Adjusted EBITDA Margin (3)
4.7 %
4.8 %
4.3 %
4.9 %
(1) Restructuring costs as defined in accordance with IFRS.
(2) Restructuring and severance costs that did not meet the criteria to be classified as restructuring costs in accordance with IFRS.
(3) Calculated as Adjusted EBITDA divided by Revenue.
Non-GAAP Financial Ratios
•
•
“Adjusted Earnings Per Share” is calculated by dividing Adjusted Earnings by the basic weighted average
number of shares.
“Adjusted EBITDA Margin” is the percentage derived by dividing Adjusted EBITDA by construction
revenue.
Supplementary Financial Measures
•
•
•
•
“Pending Backlog” is the total potential revenue of awarded but not contracted projects including where
the Company has been named preferred proponent, where a contract has not been executed and where the
letter of intent or agreement received is non-binding. It may also include estimated amounts for agency
relationship construction management projects, pre-construction activities, collaborative contracting
arrangements and future work orders to be performed as part of multi-year MSA, maintenance, task order,
and similar contractual arrangements. Management does not provide any assurance that a contract will be
finalized, or revenue recognized in the future.
“Gross Profit Percentage” is the percentage derived by dividing gross profit by construction revenue.
Gross profit is calculated by subtracting construction costs from construction revenue.
“Current ratio” is the percentage derived by dividing total current assets by total current liabilities.
“General and Administrative expenses as a percentage of revenue” is the percentage derived by
dividing general and administrative expenses by construction revenue.
BIRD CONSTRUCTION INC.
MANAGEMENT'S DISCUSSION & ANALYSIS 2022
78
FORWARD-LOOKING INFORMATION
This MD&A contains forward-looking statements and information (“forward-looking statements”) within the
meaning of applicable Canadian securities laws. The forward-looking statements contained in this MD&A are
based on the expectations, estimates and projections of management of Bird as of the date of this MD&A unless
otherwise stated. The use of any of the words “believe”, “expect”, “anticipate”, “contemplate”, “target”, “plan”,
“outlook”, "potential", "estimated", “intends”, “continue”, “may”, “will”, “should” and similar expressions are
intended to identify forward-looking statements. More particularly and without limitation, this MD&A contains
forward-looking statements concerning: anticipated financial performance; the outlook for 2023; expectations
with respect to anticipated revenue growth, growth in earnings per share and adjusted EBITDA in 2023 and
margin improvements; the Company’s ability to grow profitably; sufficiency of working capital; and with respect to
Bird’s ability to convert Pending Backlog to Backlog.
Since forward-looking statements address future events and conditions, by their very nature they involve inherent
risks and uncertainties. Investors are cautioned that forward-looking statements are based on the opinions,
assumptions and estimates of management considered reasonable at the date the statements are made, and
actual results could differ materially from those currently anticipated due to a number of factors and risks. These
include, but are not limited to the risks associated with the industries in which Bird operates in general, such as:
• Ability to access sufficient capital from
•
internal and external sources
• Ability to secure work
• Accuracy of cost to complete estimates
• Adjustments and cancellations of Backlog
• Changes in legislation, including but not
laws and environmental
limited to tax
regulations
• Client concentration
• Climate change
• Collection of recognized revenue
• Commodity price,
interest
rate and
exchange rate fluctuations
• Competition, ethics, and reputational risks
• Completion and performance guarantees
• Compliance with environmental laws risks
• Corporate guarantees and letters of credit
• Cyber-security risks
• Default under
the Company’s credit
facilities could result in the suspension of
dividends
• Delays or changes in plans with respect to
growth projects or capital expenditures,
costs and expenses
• Dependence on the public sector
• Design and design/build risks
•
•
•
Economy and cyclicality
Estimating costs and schedules/assessing
contract risks
Failure of clients to obtain required permits
and licenses
Failure to realize the anticipated benefits of
business acquisitions including the Stuart
Olson and Dagmar transactions
• Global pandemics
• Health, safety and environmental risks
•
•
•
•
•
•
•
Industry and inherent project delivery risks
Insurance risk
Internal and disclosure controls
Joint venture risk
Labour matters
Litigation risk
Loss of key management; ability to hire and
retain qualified and capable personnel
• Maintaining safe worksites
• Operational risks
•
•
•
•
•
Payment of dividends
Performance bonds and contract security
Potential for non-payment and credit risk
and ongoing financing availability
PPP equity investments
PPP project risk
• Quality assurance and quality control
•
•
•
•
Regional concentration
Regulations
Repayment of credit facility
Subcontractor performance
• Unanticipated shutdowns, work stoppages,
strikes and lockouts
•
Volatility of market trading
BIRD CONSTRUCTION INC.
MANAGEMENT'S DISCUSSION & ANALYSIS 2022
79
Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on other factors
that could affect the operations or financial results of the parties, and the combined company are included in
reports on file with applicable securities regulatory authorities, including but not limited to: Annual Information
Form for the year ended December 31, 2022, which may be accessed on Bird's SEDAR profile at www.sedar.com.
The forward-looking statements contained in this MD&A are made as of the date hereof and the Company
undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as, and to the extent required by applicable securities laws.
BIRD CONSTRUCTION INC.
MANAGEMENT'S DISCUSSION & ANALYSIS 2022
80
2022
CONSOLIDATED
FINANCIAL STATEMENTS
for the years ended
December 31, 2022 and 2021
Management’s Responsibility for Financial Reporting
The management of Bird Construction Inc. (the “Company”) is responsible for the preparation and integrity
of the accompanying consolidated financial statements. These consolidated financial statements have been
prepared in accordance with International Financial Reporting Standards (“IFRS”) and includes certain
estimates that reflect management’s best judgement.
Management maintains appropriate systems of internal control. Policies and procedures are designed to
provide reasonable assurance that transactions are properly authorized, assets are safeguarded and
financial records are properly maintained to provide reliable information for the preparation of financial
statements.
The Board of Directors has reviewed and approved the consolidated financial statements. The Board fulfills
its responsibility in this regard through its Audit Committee. The Audit Committee is composed entirely of
independent Directors and the members are financially literate. The Audit Committee meets regularly with
management and the external auditors to discuss reporting and control issues and ensures each party is
properly discharging its responsibilities.
The consolidated financial statements have been audited by KPMG LLP, Chartered Professional
Accountants, in accordance with Canadian generally accepted auditing standards on behalf of the
shareholders.
Terrance L. McKibbon
President & Chief Executive Officer
Wayne R. Gingrich
Chief Financial Officer
March 7, 2023
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
82
KPMG LLP
1900 - 360 Main Street
Winnipeg
R3C 3Z3
Telephone (204) 957-1770
Fax (204) 957-0808
www.kpmg.ca
INDEPENDENT AUDITOR’S REPORT
To the Shareholders of Bird Construction Inc.
Opinion
We have audited the consolidated financial statements of Bird Construction Inc. (the Entity), which comprise the
consolidated statements of financial position as at December 31, 2022 and December 31, 2021, the
consolidated statements of income, comprehensive income, changes in equity and cash flows for the years then
ended, and notes to the financial statements, including a summary of significant accounting policies (hereinafter
referred to as the “financial statements”).
In our opinion, the accompanying financial statements present fairly, in all material respects, the consolidated
financial position of the Entity as at December 31, 2022 and December 31, 2021, and its consolidated financial
performance and its consolidated cash flows for the years then ended in accordance with International Financial
Reporting Standards (IFRS).
Basis for Opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our
responsibilities under those standards are further described in the “Auditor’s Responsibilities for the Audit of
the Financial Statements” section of our auditor’s report.
We are independent of the Entity in accordance with the ethical requirements that are relevant to our audit of
the financial statements in Canada and we have fulfilled our other ethical responsibilities in accordance with
these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements for the year ended December 31, 2022. These matters were addressed in the context
of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
We have determined the matter described below to be the key audit matter to be communicated in our auditor’s
report.
Estimate of costs to complete and variable consideration to be received for fixed price construction
contracts
Description of the matter
The Entity recognizes revenue from contracts with customers in accordance with the pattern of satisfying the
Entity’s performance obligations under a contract. In fiscal 2022, Entity recognized $2,377,549 thousand in
construction revenue. Revenue from fixed price contracts, which is a significant portion of construction revenue,
is recognized using the input method with reference to costs incurred. To determine the estimated costs to
complete for fixed price construction contracts, assumptions and estimates are required to evaluate matters
related to schedule, material and labour costs, labour productivity, and changes to contract scope and
subcontractor costs. Change orders may be issued by customers to modify the original contract scope of work
or conditions, and there may be disputes or claims regarding additional amounts owing. Claims against
customers for variable consideration due to delays, scope changes, or other matters are assessed under the
Entity’s revenue recognition policy, which requires significant judgment.
KPMG LLP, an Ontario limited liability partnership and member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private
English company limited by guarantee. KPMG Canada provides services to KPMG LLP.
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
83
Why the matter is a key audit matter
We identified the evaluation of the estimate of costs to complete and variable consideration to be received for
fixed price construction contracts as a key audit matter. The evaluation of the estimated costs to complete and
variable consideration to be received for fixed price construction contracts involved significant auditor judgment
to evaluate the results of audit procedures, given the significant judgment applied by management in the
determination of these estimates.
How the matter was addressed in our audit
The primary procedures we performed to address this key audit matter included the following:
We evaluated the design and implementation, and tested the operating effectiveness, of certain internal controls
within the Entity’s revenue recognition process. This included a control related to the review of estimated costs
to complete for construction contracts at year-end.
We evaluated the Entity’s ability to estimate costs to complete and variable consideration by comparing to the
final costs to complete and variable consideration received for contracts completed in fiscal 2022 and estimated
in the prior period.
For a selection of fixed price construction contracts at December 31, 2022, we evaluated the appropriateness of
the Entity’s determination of costs to complete and variable consideration to be received by performing the
following:
•
•
•
•
Agreed estimated costs to complete to appropriate supporting documentation and key contractual terms
back to signed contracts.
Performed procedures to compare the estimated total costs to actual costs incurred to date.
Inquired with relevant operational Entity personnel to gain an understanding of the status of project
activities and factors impacting the estimate of costs to complete and variable consideration to be
received, and corroborated by agreeing to appropriate supporting documentation.
Determined the reasonableness of any variable consideration recognized as revenue on unbilled
change orders or claims by inspecting change orders, directives, or other correspondence with
customers, where applicable; considering the historical outcomes of previously settled claims, and
corresponding with internal and external legal counsel, where applicable.
Other Information
Management is responsible for the other information. Other information comprises:
• Management’s Discussion and Analysis filed with the relevant Canadian Securities Commissions.
•
Information, other than the financial statements and the auditor’s report thereon, included in a
document likely to be entitled “2022 Annual Report”.
Our opinion on the financial statements does not cover the other information and we do not and will not express
any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit and remain alert for indications that the other
information appears to be materially misstated.
We obtained the Management’s Discussion and Analysis filed with the relevant Canadian Securities
Commissions as at the date of this auditor's report. If, based on the work we have performed on this other
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
84
information, we conclude that there is a material misstatement of this other information, we are required to
report that fact in the auditor’s report.
We have nothing to report in this regard.
The information, other than the financial statements and the auditor’s report thereon, included in a document
likely to be entitled “2022 Annual Report” is expected to be made available to us after the date of this auditor’s
report. If, based on the work we will perform on this other information, we conclude that there is a material
misstatement of this other information, we are required to report that fact to those charged with governance.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance
with IFRS, and for such internal control as management determines is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Entity’s ability to continue
as a going concern, disclosing as applicable, matters related to going concern and using the going concern
basis of accounting unless management either intends to liquidate the Entity or to cease operations, or has no
realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Entity‘s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Canadian generally accepted auditing standards will always detect a material misstatement
when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of the financial
statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise
professional judgment and maintain professional skepticism throughout the audit.
We also:
•
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Entity's internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
85
•
•
•
•
Conclude on the appropriateness of management's use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Entity's ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Entity to cease to continue as a going
concern.
Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
Communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
Provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and communicate with them all relationships and other matters
that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group Entity to express an opinion on the financial statements. We are
responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
•
Determine, from the matters communicated with those charged with governance, those matters that
were of most significance in the audit of the financial statements of the current period and are therefore
the key audit matters. We describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine
that a matter should not be communicated in our auditor’s report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Chartered Professional Accountants
The engagement partner on the audit resulting in this auditor’s report is Austin Abas.
Winnipeg, Canada
March 7, 2023
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
86
Bird Construction Inc.
Consolidated Statement of Financial Position
As at December 31, 2022 and 2021
(in thousands of Canadian dollars)
Note
2022
2021
ASSETS
Current assets
Cash and cash equivalents
Accounts receivable
Contract assets
Inventory and prepaid expenses
Income taxes recoverable
Other assets
Assets held for sale
Total current assets
Non-current assets
Other assets
Investments in equity accounted entities
Property and equipment
Right-of-use assets
Deferred income tax asset
Intangible assets
Goodwill
Total non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Accounts payable
Contract liabilities
Dividends payable to shareholders
Income taxes payable
Current portion of loans and borrowings
Current portion of right-of-use liabilities
Provisions
Other liabilities
Total current liabilities
Non-current liabilities
Loans and borrowings
Right-of-use liabilities
Deferred income tax liability
Other liabilities
Pension liabilities
Total non-current liabilities
TOTAL LIABILITIES
SHAREHOLDERS' EQUITY
Shareholders' capital
Contributed surplus
Retained earnings
Accumulated other comprehensive income (loss)
Total shareholders' equity
$
$
$
8
9
10
11
12
11
13
14
15
20
16
17
10
18
19
21
22
18
19
20
22
23
25
174,607 $
708,161
56,938
10,385
13,633
4,236
2,341
970,301
5,539
9,786
55,471
66,136
31,564
34,742
55,740
258,978
190,191
597,814
55,949
9,406
9,175
6,119
4,416
873,070
9,104
13,471
55,004
67,497
32,784
30,478
55,740
264,078
1,229,279 $
1,137,148
573,224 $
146,986
1,745
10,848
7,084
17,790
18,543
9,449
785,669
68,007
55,469
35,756
11,390
—
170,622
956,291
114,584
1,956
156,537
(89)
272,988
514,330
130,315
1,745
7,991
7,470
19,782
27,316
12,311
721,260
71,211
59,576
24,798
16,583
232
172,400
893,660
114,584
1,956
126,935
13
243,488
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
1,229,279 $
1,137,148
The accompanying notes are an integral part of these consolidated financial statements.
Approved on behalf of the Board of Directors
Paul R. Raboud
Chairman of the Board
Karyn A. Brooks
Audit Committee Chair
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
87
Bird Construction Inc.
Consolidated Statement of Income
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
Construction revenue
Costs of construction
Gross profit
Income (loss) from equity accounted investments
General and administrative expenses
Income from operations
Finance and other income
Finance and other costs
Income before income taxes
Income tax expense
Net income for the period
Basic and diluted earnings per share
Note
2022
2021
10
29
13
29
27
28
20
26
$
2,377,549 $
2,175,787
201,762
(2,714)
(132,386)
66,662
10,341
(9,818)
67,185
17,322
49,863 $
0.93 $
$
$
2,220,026
2,033,341
186,685
4,187
(127,014)
63,858
1,322
(7,550)
57,630
14,847
42,783
0.80
The accompanying notes are an integral part of these consolidated financial statements.
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
88
Bird Construction Inc.
Consolidated Statement of Comprehensive Income
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars)
Note
2022
2021
$
49,863 $
42,783
Net income for the period
Other comprehensive income (loss) for the period:
Items that will not be reclassified to net income in subsequent periods:
Defined benefit plan actuarial gain (loss)
Deferred tax recovery (expense)
Items that may be reclassified to net income in subsequent periods:
Foreign currency translation on equity accounted investments
Other foreign currency translation
Deferred tax recovery (expense)
23
13
Total comprehensive income for the period
$
The accompanying notes are an integral part of these consolidated financial statements.
908
(228)
680
(187)
53
32
(102)
50,441 $
3,197
(795)
2,402
(21)
(18)
(18)
(57)
45,128
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
89
Bird Construction Inc.
Consolidated Statement of Changes in Equity
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
Note
Shareholders'
capital
Contributed
surplus
Retained
earnings
Accumulated
other
comprehensive
income (loss)
Total
equity
Balance at December 31, 2021
$
114,584 $
1,956 $
126,935 $
13 $
243,488
Net income for the period
Other comprehensive income (loss) for the period 13,23
Total comprehensive income (loss) for the period
Contributions by and dividends to owners
Dividends declared to shareholders
—
—
—
—
—
—
—
—
—
—
49,863
680
50,543
—
(102)
(102)
49,863
578
50,441
(20,941)
(20,941)
—
—
(20,941)
(20,941)
Balance at December 31, 2022
$
114,584 $
1,956 $
156,537 $
(89) $
272,988
Dividends declared per share
$
0.39
Balance at December 31, 2020
$
108,064 $
1,956 $
102,520 $
70 $
212,610
Net income for the period
Other comprehensive income (loss) for the period
Total comprehensive income (loss) for the period
Contributions by and dividends to owners
Common shares issued on acquisition of Dagmar
7
Dividends declared to shareholders
—
—
—
6,520
—
6,520
—
—
—
—
—
—
42,783
2,402
45,185
—
(20,770)
(20,770)
—
(57)
(57)
—
—
—
42,783
2,345
45,128
6,520
(20,770)
(14,250)
Balance at December 31, 2021
$
114,584 $
1,956 $
126,935 $
13 $
243,488
Dividends declared per share
$
0.39
The accompanying notes are an integral part of these consolidated financial statements.
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
90
Bird Construction Inc.
Consolidated Statement of Cash Flows
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars)
Cash flows from (used in) operating activities
Net income for the period
Items not involving cash:
Amortization
Depreciation
Gain on sale of property and equipment
(Income) loss from equity accounted investments
Finance and other income
Finance and other costs
Deferred compensation plan expense and other
Defined benefit pension plan expense, net of contributions
Unrealized (gain) loss on investments and other
Income tax expense (recovery)
Cash flows from operations before changes in non-cash working capital
Changes in non-cash working capital relating to operating activities
Interest received
Interest paid
Income taxes recovered (paid)
Net cash from (used in) operating activities
Cash flows from (used in) investing activities
Investments in equity accounted entities
Capital distributions from equity accounted entities
Proceeds on sale of investment in equity accounted entities
Additions to property and equipment and intangible assets
Proceeds on sale of property and equipment
Acquisitions, net of cash acquired
Other long-term assets
Net cash from (used in) investing activities
Cash flows from (used in) financing activities
Dividends paid on shares
Proceeds from loans and borrowings
Repayment of loans and borrowings
Repayment of right-of-use liabilities
Net cash from (used in) financing activities
Net increase (decrease) in cash and cash equivalents during the period
Effects of foreign exchange on cash balances
Cash and cash equivalents, beginning of the period
Note
2022
$
49,863 $
16
14, 15
13
27
28
23
20
31
13
13
13
14, 16
14
7
18
18
19
6,665
29,774
(4,403)
2,714
(3,652)
9,818
5,985
308
(24)
17,322
114,370
(59,317)
4,559
(9,272)
(6,941)
43,399
—
922
1,501
(27,766)
6,444
—
4,087
(14,812)
(20,941)
52,776
(56,366)
(19,747)
(44,278)
(15,691)
107
190,191
2021
42,783
6,258
28,279
(1,576)
(4,187)
(1,322)
7,550
10,056
(171)
106
14,847
102,623
(31,535)
1,321
(7,243)
(29,340)
35,826
(768)
2,193
—
(11,756)
3,614
(20,563)
3,975
(23,305)
(20,749)
58,600
(52,832)
(19,265)
(34,246)
(21,725)
(152)
212,068
Cash and cash equivalents, end of the period
8
$
174,607 $
190,191
The accompanying notes are an integral part of these consolidated financial statements.
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
91
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
Table of Contents – Notes to the Consolidated Financial Statements
1.
2.
3.
4.
Structure of the company .................................................................................................................................. 93
Basis of preparation ............................................................................................................................................ 93
Use of estimates and judgements .................................................................................................................... 93
Significant accounting policies .......................................................................................................................... 95
5. New accounting standards, amendments and interpretations adopted ................................................... 106
6.
7.
8.
9.
Future accounting changes ............................................................................................................................... 106
Business combinations ....................................................................................................................................... 106
Cash and cash equivalents ................................................................................................................................. 108
Accounts receivable ............................................................................................................................................ 108
10. Revenue, contract assets and contract liabilities ........................................................................................... 108
11. Other assets ......................................................................................................................................................... 110
12. Assets held for sale ............................................................................................................................................. 111
13. Projects and entities accounted for using the equity method .................................................................... 110
14. Property and equipment .................................................................................................................................... 113
15. Right-of-use assets .............................................................................................................................................. 114
16.
Intangible assets .................................................................................................................................................. 115
17. Goodwill ................................................................................................................................................................ 116
18. Loans and borrowings ........................................................................................................................................ 117
19. Leases and right-of-use liabilities ..................................................................................................................... 119
20.
Income taxes ........................................................................................................................................................ 119
21. Provisions .............................................................................................................................................................. 121
22. Other liabilities ..................................................................................................................................................... 122
23. Pension obligations ............................................................................................................................................. 122
24. Share-based compensation plans ..................................................................................................................... 124
25. Shareholders’ capital .......................................................................................................................................... 125
26. Earnings per share ............................................................................................................................................... 126
27. Finance and other income ................................................................................................................................. 126
28. Finance and other costs ..................................................................................................................................... 126
29. Personnel costs .................................................................................................................................................... 127
30. Government assistance ...................................................................................................................................... 127
31. Other cash flow information .............................................................................................................................. 127
32. Financial instruments .......................................................................................................................................... 128
33. Capital management .......................................................................................................................................... 131
34. Commitments and contingencies ..................................................................................................................... 131
35. Related party transactions ................................................................................................................................. 132
36. Subsequent events .............................................................................................................................................. 133
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
92
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
1. Structure of the company
Bird Construction Inc. (the “Company”) is a corporation incorporated in the province of Ontario, Canada.
The address of the Company’s registered office is 5700 Explorer Drive, Suite 400, Mississauga, Ontario,
Canada. The Company’s common shares are traded on the Toronto Stock Exchange (“TSX”) under the
symbol BDT.
The Company operates from coast-to-coast and services all of Canada’s major geographic markets. The
Company provides a comprehensive range of construction services from new construction for industrial,
commercial, institutional and civil infrastructure markets; to industrial maintenance, repair and operations
(“MRO”) services, heavy civil construction and mine support services; as well as vertical infrastructure
including, electrical, mechanical, and specialty trades. The Company uses a variety of contract delivery
methods including construction management, cost plus, integrated project delivery ("IPD"), progressive
design build, stipulated sum, unit price, standard specification design-build, alternative finance projects,
complex design-build, and public private partnership ("PPP") contract delivery methods.
2. Basis of preparation
Statement of compliance
These consolidated financial statements (the “financial statements”) have been prepared in accordance
with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting
Standards Board (“IASB”). These financial statements were authorized for issue on March 7, 2023 by the
Company’s Board of Directors.
Functional and presentation currency
These financial statements are presented in Canadian dollars, which is the Company’s functional currency.
Unless otherwise indicated, all financial information presented has been rounded to the nearest thousand.
Basis of measurement
These financial statements have been prepared on a going concern and historical cost basis, except for
certain financial assets, derivative financial instruments and liabilities for cash-settled share-based payment
arrangements which are measured at fair value as detailed in the accounting policies disclosed in Note 4.
Segmented results
Segment results are reviewed by the Company’s chief operating decision maker to assess performance and
allocate resources within the Company. Management applies judgement in the aggregation of the
Company’s operating segments and has determined that the Company operates in one reportable
segment being the general contracting sector of the construction industry. The Company’s operating
segments have similar economic characteristics in that each of the Company’s operating business units
provides comparable construction services, use similar contracting methods, have similar customer types,
have similar long-term economic prospects, share similar cost structures, and operate in similar regulatory
environments.
3. Use of estimates and judgements
The preparation of the financial statements requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and the reported amounts of revenues,
expenses, assets, liabilities and the disclosure of contingent assets and liabilities at the reporting date.
Uncertainty about these assumptions and estimates could result in a material adjustment to the carrying
amount of an asset or liability and/or the reported amount of revenue and expense in future periods.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognized in the period in which the estimates are revised and in any future periods affected.
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
93
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
Assets and liabilities acquired in a business combination
The Company assesses whether an acquisition transaction should be accounted for as an asset acquisition
or a business combination under IFRS 3 Business Combinations. The purchase price related to a business
combination is allocated to the underlying acquired assets and liabilities based on estimates of their fair
value at the time of acquisition. The determination of fair value requires the Company to make
assumptions, estimates and judgements regarding future cash flows, valuation techniques, economic risk,
weighted average cost of capital and future events. The measurement of purchase consideration and
allocation process are therefore inherently subjective and impact the amounts assigned to identifiable
assets and liabilities. As a result, the purchase price allocation impacts the Company’s reported assets and
liabilities (including the amounts allocated to intangible assets and goodwill), and future earnings due to
the associated depreciation and amortization expense along with the required impairment testing.
Revenue and gross profit recognition
Construction revenue, construction costs, contract liabilities, and contract assets are based on estimates
and judgements used in determining contract revenue and the determination of estimated costs to
complete in order to calculate the stage of completion for a particular construction project, depending
upon the nature of the construction contract, as more fully described in the revenue recognition policy. To
determine the estimated costs to complete construction contracts, assumptions and estimates are required
to evaluate matters related to schedule, material and labour costs, labour productivity, changes in contract
scope and subcontractor costs. Due to the nature of construction activities, estimates can change
significantly from one accounting period to the next.
The value of many construction contracts increases over the duration of the construction period. Change
orders may be issued by customers to modify the original contract scope of work or conditions. In addition,
there may be disputes or claims regarding additional amounts owing as a result of changes in contract
scope, delays, additional work or changed conditions. Construction work related to a change order or claim
may proceed, and costs may be incurred, in advance of final determination of the value of the change
order. Change orders and claims may not be settled until the construction project is complete or
subsequent to completion, and the nature of the relationship with the other party to the claim and the
history of success of these claims may impact the associated revenue or cost recovery. Claims against
customers for variable consideration due to factors described above are assessed under the Company’s
revenue policy, which requires significant judgement. The amount of variable consideration that is
constrained is the difference between the total claim value and the best estimate of recovery. This
constrained value is reviewed each reporting period.
Provisions
Legal, warranty and other provisions involve the use of estimates. Estimates and assumptions are required
to determine when to record, and how to measure, a provision in the financial statements. The outcomes
may differ significantly from the estimates used in preparing the financial statements resulting in
adjustments to previously reported financial results.
Impairment of non-financial assets
Management evaluates property and equipment, intangible assets with definite lives, and right-of-use
(“ROU”) assets at the end of each reporting period to determine if there are events or circumstances which
indicate that the carrying value may not be recoverable. Goodwill and intangible assets with indefinite lives
are tested for impairment annually, or more frequently if events or changes in circumstances indicate that
the asset may be impaired. Impairment testing is performed by comparing the recoverable amount of the
cash-generating unit ("CGU") or groups of CGUs to its carrying amount. There is a significant amount of
uncertainty with respect to the estimate of the recoverable amount given the necessity of making economic
projections which employ the following key assumptions: future cash flows, growth opportunities, including
economic risk assumptions, and estimates of achieving key operating metrics and drivers, and the discount
rate. Refer to note 17 for further details regarding the assumptions and estimates regarding the Company’s
goodwill impairment assessment.
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
94
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
Measurement of pension obligations
The Company’s obligations and expenses related to defined benefit (“DB”) pension plans are determined
using actuarial valuations and are dependent on a number of significant assumptions. The DB obligations
and benefit cost levels will change as a result of future changes in actuarial methods and assumptions,
membership data, plan provisions, legislative rules, and future experience gains or losses. Actual
experience that differs from assumptions may result in gains or losses that will be disclosed in future
accounting valuations. Refer to note 23 for further details regarding the Company’s DB pension plans.
Share-based payments
Compensation expense accrued for performance share units (“PSU”) is dependent upon the final number
of PSU awards that will eventually vest, adjusted for a performance multiplier, that is estimated by
management and approved by the Board of Directors. Large fluctuations in compensation expense may
occur due to changes in the underlying share price or revised management estimates of relevant
performance factors.
Leases
The Company applies judgement in reviewing each of its contractual arrangements to determine whether
the arrangement contains a lease within the scope of IFRS 16 Leases. Leases that are recognized are subject
to further management judgement and estimation in various areas specific to the arrangement, including
the term of the lease. In determining the lease term to be recognized, management considers all facts and
circumstances that create an economic incentive to exercise an extension option, or not to exercise a
termination option.
Where a lease does not specify an interest rate, lease liabilities are estimated using a discount rate equal to
the Company-specific incremental borrowing rate. This rate represents the rate that the Company would
incur to obtain the funds necessary to purchase an asset of a similar value, with similar payment terms and
security in a similar economic environment.
Income taxes
Tax regulations and legislation are subject to change and there are differing interpretations requiring
management judgement. Deferred tax assets are recognized when it is considered probable that
deductible temporary differences will be recovered in future periods, which requires management
judgement. Deferred tax liabilities are recognized when it is considered probable that temporary
differences will be payable to tax authorities in future periods, which requires management judgement.
Income tax filings are subject to audits and re-assessments and changes in facts, circumstances and
interpretations of tax laws may result in a material increase or decrease in the Company’s provision for
income taxes.
4. Significant accounting policies
Consolidation
The financial statements include the accounts of the Company, its subsidiaries and partnerships, as well as
its pro-rata share of assets, liabilities, revenues, expenses and cash flows from joint operations. Subsidiaries
are entities controlled by the Company. The financial statements of subsidiaries are included in the financial
statements from the date that control commences until the date that control ceases. All inter-company
balances, transactions, revenues and expenses have been eliminated on consolidation.
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
95
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
The financial statements include the accounts of the following significant subsidiaries:
Company
Ownership / Voting Interest
Fully consolidated subsidiaries
Bird Construction Inc.
Bird Construction Company Limited
Bird Construction Company (Limited Partnership)
Bird Management Ltd.
Bird Design-Build Construction Inc.
Bird Construction Group (Limited Partnership)
Bird Construction Group Ltd.
Bird Construction Industrial Services Ltd.
Bird General Contractors Ltd.
Stuart Olson Inc.
Stuart Olson Buildings Ltd.
Stuart Olson Construction Ltd.
Stuart Olson Industrial Inc.
Stuart Olson Industrial Services Ltd.
Stuart Olson Industrial Projects Inc.
Stuart Olson Industrial Constructors Inc.
Canem Systems Ltd.
The Churchill Corporation
Dagmar Construction Inc.
Proportionately consolidated joint arrangements
Bird Kiewit Joint Venture
Pomerleau/O’Connell JV
Bird – Maple Reinders JV
Maple Reinders – Bird JV
Bird – ATCO Joint Venture
CBS Joint Venture
Chandos Bird Joint Venture
BCIFSL – TCMLP JV
Acciona Stuart Olson Joint Venture
Stuart Olson/Nunavut Ltd.
Canem/Plan Group Joint Venture
Stuart Olson Industrial Contractors/Andritz Hydro Canada Inc.
FCG Construction/Stuart Olson, a Joint Venture
Maple –Bird IPD Joint Venture
Bird Dawson Joint Venture
1 Acquired on September 1, 2021 (note 7)
2022
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
60%
50%
50%
50%
60%
2021
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%1
60%
50%
50%
50%
60%
42.5%
42.5%
50%
49%
50%
40%
50%
50%
50%
50%
60%
50%
49%
50%
40%
50%
50%
50%
n/a
n/a
The Company has invested in a number of Public Private Partnership (“PPP”) concession ventures, usually
holding a minority interest position in the venture. The Company has also invested in the Stack Modular
group of companies. In these instances, the Company can either exercise significant influence or joint
control over the financial and operational policies of the venture (or investee). The Company uses the
equity method of accounting to account for these investments. The investment is recorded as the amount
of the initial investment adjusted for the pro-rata share of the investee’s earnings less any distributions
received from the investment.
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
96
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
Company
Equity accounted investment in associates/joint ventures
Chinook Resources Management General Partnership
Hartland Resource Management General Partnership
Plenary Infrastructure ERMF GP
Stack Modular Structures Ltd.
Stack Modular Structures Hong Kong Limited
Niagara Falls Entertainment Partners
Timmiak Construction Limited Partnership
Bird Capital P3SB2 Holdings Inc.
Ownership / Voting Interest
2022
2021
50%
20%
10%
50%
50%
50%
20%
10%
50%
50%
20% / 16.2%
20% / 16.2%
69.99% / 33.33%
69.99% / 33.33%
20%
20%
All of the above subsidiaries, joint arrangements, joint ventures and associates are incorporated or
registered in Canada except Stack Modular Structure Hong Kong Limited which is incorporated and
registered in Hong Kong and Innovative Trenching USA Inc which is incorporated and registered in
Delaware.
Revenue recognition
Contract revenue is recognized in the consolidated statement of income (the “statement of income”) in
accordance with the pattern of satisfying the Company’s performance obligations under a contract. This
satisfaction occurs when control of a good or service transfers to the customer. In the majority of the
Company’s contracts, the customer controls the work in process as evidenced by the right to payment for
work performed to date plus a reasonable profit to deliver products or services that do not have an
alternative use to the Company, and the work is performed on the customer’s property. Based on the
nature of these contractual arrangements, control is transferred over time and revenue is recognized over
time.
For each performance obligation satisfied over time, the Company recognizes revenue by measuring
progress toward complete satisfaction of that performance obligation. Using output or input methods
based on the type of contract, the Company recognizes revenue in a pattern that reflects the transfer of
control of the promised goods or services to the customer. Revenue from fixed price (including PPP,
alternative finance, design-build, and stipulated sum) and cost reimbursable (including cost plus and IPD)
contracts is recognized using the input method with reference to costs incurred. Revenue from unit price
contracts in the heavy construction, civil construction and contract surface mining construction sectors is
recognized based on the amount of billable work completed, established by surveys of work performed, an
output method. For agency relationships, such as construction management contracts, where the Company
acts as an agent for its customers, fee revenue only is recognized, generally in accordance with the contract
terms. Some contracts, particularly master service agreements and maintenance service contracts, do not
specify the amount of fixed consideration at contract inception, but will have a transaction price assigned to
it once a work order is issued. For the purpose of revenue recognition and disclosure, only the transaction
price of secured work, as evidenced by work orders, would be included in revenue. If the outcome of a
construction contract cannot be estimated reliably for management to estimate the ultimate profitability of
the contract with a reasonable degree of certainty, no profit is recognized. As the contract progresses
further, the constrained margin and associated revenue are reassessed.
Revenue from contract modifications, commonly referred to as change orders and claims, is recognized to
the extent that the contract modifications have been approved by the customer and the amount can be
measured reliably. In cases where the contract modification is approved, but the price has not been
finalized, the Company accounts for the contract modification using variable consideration guidance
described below. A claim against or dispute with a customer is considered variable consideration as it is in
addition to the agreed upon performance obligations outlined in the original contract because of
additional costs incurred due to delays and/or scope changes, for example. The subsequent settlement of a
claim or dispute through negotiation results in uncertainty as to the likelihood and amount that will be
ultimately collected.
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
97
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
The amount of variable consideration included in the transaction price may be constrained due to the
uncertain nature of the recovery of the associated revenue. The Company will make an estimate of the
amount to be constrained by using either the most likely amount or the expected value method, by
contract, depending which method is considered to best predict the amount of consideration to which the
Company will be entitled. The amount of variable consideration to be included in the transaction price is
only that to which it is highly probable that a significant reversal of cumulative revenue recognized to date
will not occur. Management considers the following factors in their assessment of the probability of
reversal:
i. Susceptibility of consideration to factors outside the Company’s influence.
ii. Length of time, that is commercially unusual, before resolution of the uncertainty associated with the
amount of consideration is expected.
iii. The Company’s experience with similar types of contracts is limited or the experience is not relevant
or has limited predictive value.
iv. If, historically the Company has a practice of offering a broad range of pricing concessions or
changing the payment terms and conditions of similar contracts in similar situations.
v. The contract has a larger number and broad range of possible consideration amounts.
Where the above factors indicate uncertainty associated with the outcome of the transaction price, the
Company reviews the historical performance under similar contracts in order to determine the appropriate
proportion of the variable consideration to be included in the transaction price.
For most arrangements, the customer contracts with the Company to provide a significant service of
integrating a complex set of tasks and components into a single project or capability (even if that single
project results in the delivery of multiple units). The Company therefore considers that the entire contract
results in the delivery of a single performance obligation. Less commonly, the Company may promise to
provide distinct goods or services within a contract, in which case the contract is separated into the
associated performance obligations as assessed from the customer’s perspective. If a contract contains
multiple performance obligations, the Company allocates the total transaction price to each performance
obligation in an amount based on the estimated relative standalone selling prices of the promised goods or
services underlying each performance obligation. When the Company is contracted to construct projects, the
budgets and overall transaction prices are built up using the Company’s best estimate of costs associated to
complete the project using the appropriate overhead and subcontractor rates for a given project and
location. This approach to estimate the overall costs and associated revenues is considered the most
appropriate assessment of the standalone selling price for the associated performance obligations.
Where costs are determined to be greater than total revenues, losses from any construction contracts are
recognized in full in the period the loss becomes known. Losses are recorded within provisions on the
statement of financial position.
Costs of construction
Construction costs are expensed as incurred unless they result in an asset related to future contract activity
and meet the criteria to be capitalized as contract assets. Construction costs include all expenses that relate
directly to execution of the specific contract, including site labour and site supervision, direct materials,
subcontractor costs, equipment rentals and depreciation, design and technical assistance, and warranty
claims. Construction costs also include overheads that can be attributed to the project in a systematic and
consistent manner and include general insurance and bonding costs, and staff costs relating to project
management.
Contract assets and liabilities
Any excess of costs and estimated earnings over progress billings on construction contracts is carried as a
contract asset in the financial statements. Contract assets also arise when the Company capitalizes
incremental costs of obtaining contracts with customers and the costs incurred in fulfilling those contracts,
such as mobilization costs. Costs to fulfill a contract are required to be capitalized where they are determined
to relate directly to a contract or an anticipated contract that the entity can specifically identify, they generate
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
98
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
or enhance resources of the Company that will be used in satisfying performance obligations in the future,
and they are expected to be recovered under that specific contract.
In all cases, the specific contract asset is amortized with reference to the same pattern of recognition as the
revenue recognized on the associated project.
Any excess of progress billings over earned revenue on construction contracts is carried as a contract liability
in the financial statements.
Contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each
reporting period. All contract assets and liabilities are classified as current in the financial statements as they
are expected to be settled within the Company’s normal operating cycle. The operating cycle of many of the
Company’s contracts exceed 12 months, depending on the type of project or the nature of the service being
provided.
Business combinations
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a
business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair
values of the assets transferred to the Company, liabilities assumed by the Company and the equity interests
issued or cash paid by the Company in exchange for control of the acquiree. Acquisition-related costs are
expensed as incurred, unless related to the issuance of debt or equity.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognized at their fair
value, except that:
i. Deferred tax assets or liabilities and assets or liabilities related to employee benefit arrangements are
recognized and measured in accordance with IAS 12 Income taxes, and IAS 19 Employee benefits,
respectively;
ii. For any ROU (i.e. lease) assets and ROU liabilities identified in which the acquiree is the lessee, IFRS 3
Business combinations requires the lease liability to be measured at the present value of the
remaining lease payments as if the acquired lease were a new lease at the acquisition date. The ROU
asset is measured at an amount equal to the lease liability, adjusted to reflect the favourable or
unfavourable terms of the lease when compared with market terms.
The Company measures goodwill as the excess of the fair value of the consideration transferred, if any, over
the net recognized amount (generally fair value) of the identifiable assets acquired and liabilities assumed, all
measured as of the acquisition date.
Government assistance
Government grants are recognized when there is reasonable assurance that the Company will comply with
the conditions attached to them and the grant will be received. When the conditions of a grant relate to
income or expense, to the extent possible, it is recognized in the statement of income in the period in which
eligible expenses were incurred or when the services have been performed. There may be circumstances in
which the determination of applicability of the government grant may cross over reporting periods and
cannot be recorded in the period in which eligible expenses were incurred or when the services have been
performed. For grants related to expense, the Company deducts the grant in reporting the related expense.
Property and equipment
Property and equipment is measured at cost less accumulated depreciation and accumulated impairment
losses, if any. The cost of property and equipment includes the purchase price and the directly attributable
costs required to bring the asset to the condition necessary for the asset to be capable of operating in the
manner intended by management. The cost of replacing or repairing a component of an item of property and
equipment is recognized in the carrying amount of the item if it is probable that future economic benefits will
occur and the cost can be measured reliably. The costs of routine maintenance of property and equipment
are recognized in the statement of income as incurred.
Depreciation is calculated based on the cost of an asset (or deemed cost) less its residual value. Depreciation
commences when the asset is available for use and ceases on the earliest of when the asset is derecognized
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
99
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
or classified as held-for-sale. When parts of an item of property and equipment have different useful lives,
they are accounted for as separate components of property and equipment and depreciated accordingly.
The carrying amount of a replaced component is derecognized. The Company reviews the residual value,
useful lives and depreciation methods used on an annual basis and, where revisions are required, the
Company applies such changes in estimates on a prospective basis.
Depreciation of property and equipment over the estimated useful lives of the assets is as follows:
Diminishing balance method
Buildings
Equipment, trucks and automotive
Heavy equipment
Furniture, fixtures and office equipment
Straight line method
Leasehold improvements
4%
20% - 40%
Hours of use
20% - 55%
Over the lease term
Gains and losses on disposals of property and equipment are determined by comparing the proceeds with
the carrying amount of the asset and are included as part of general and administrative expenses in the
statement of income.
Leases
Lessee arrangements
A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a
period of time in exchange for consideration. On the date that the leased asset becomes available for use,
the Company recognizes a ROU asset and a corresponding ROU liability. Finance costs associated with the
lease obligation are charged to the statement of income over the lease period with a corresponding increase
to the ROU liability. The ROU liability is reduced as payments are made against the principal portion of the
lease. The ROU asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-
line basis. Depreciation of the ROU asset is recognized as part of costs of construction or general and
administrative expenses, depending on the nature of the leased asset.
ROU assets and liabilities are initially measured on a present value basis. Lease obligations are measured as
the net present value of the lease payments which may include: fixed lease payments, variable lease
payments that are based on an index or a rate, amounts expected to be payable under residual value
guarantees, and payments to exercise an extension or termination option, if the Company is reasonably
certain to exercise either of those options. ROU assets are measured at cost, which is composed of the
amount of the initial measurement of the ROU liability, less any incentives received, plus any lease payments
made at, or before, the commencement date and initial direct costs and asset restoration costs, if any. The
rate implicit in the lease is used to determine the present value of the liability and asset arising from a lease,
unless this rate is not readily determinable, in which case the Company's incremental borrowing rate is used.
The Company has applied a number of practical expedients identified in the standard as follows:
i. Short-term leases and leases of low-value assets are not recognized in the statement of financial
position and lease payments are instead recognized in the financial statements as incurred.
ii. For certain classes of leases, the Company has elected not to separate lease and non-lease
components (which transfer a separate good or service under the same contract) and instead the
Company accounts for these leases as a single lease component.
iii. Certain leases having similar characteristics are accounted for as a portfolio.
Lessor arrangements
When the Company acts as a lessor, it determines at lease inception whether each lease is a finance lease or
an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
100
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the
case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the
Company considers certain indicators, such as whether the lease is for the major part of the economic life of
the asset.
When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sublease
separately. It assesses the lease classification of a sublease with reference to the ROU asset arising from the
head lease, not with reference to the underlying asset.
Goodwill
Goodwill is the residual amount that results when the purchase price of an acquired business exceeds the
sum of the amounts allocated to the identifiable assets acquired less liabilities assumed, based on their fair
values. Goodwill is not amortized but is tested for impairment on an annual basis or more frequently if there
are indicators that goodwill may be impaired. Goodwill is carried at cost less any accumulated impairment.
Intangible assets
Intangible assets with finite lives are comprised of computer software, and assets related to the acquisition of
a business, including backlog and agency contracts and customer relationships. These intangible assets are
measured at cost less accumulated amortization and accumulated impairment losses, if any. Amortization is
calculated using the cost of the asset, and commences once the asset is available for use and is recognized in
the statement of income based on the expected pattern of consumption of the economic benefits of the
asset. Amortization methods, useful lives and residual values are reviewed on an annual basis and adjusted
where appropriate. Intangible assets with indefinite lives comprising of trade names are not amortized.
The estimated useful lives of each class of intangible assets are as follows:
Asset
Computer software
Basis
Straight line
Backlog and agency contracts
As related revenue is earned
Customer relationships
Trade names
Straight line
Straight line
Useful Life
1 to 10 years
1 to 3 years
3 to 7 years
Indefinite or 5 years
Impairment of non-financial assets
The carrying amounts of the Company’s non-financial assets, other than inventories and deferred tax assets
for which separate processes apply, are reviewed at each reporting date to determine whether there is any
indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For
intangible assets that have an indefinite useful life or intangible assets that are not yet available for use, the
recoverable amount is estimated annually.
The recoverable amount of a CGU is the greater of its value-in-use and its fair value less costs of disposal. In
assessing value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together
into the smallest group of assets that generates cash inflows from continuing use that are largely
independent of the cash inflows of other assets or groups of assets (i.e. a CGU). For the purpose of goodwill
impairment testing, goodwill acquired in a business combination is allocated to the CGU, or the group of
CGUs, that is expected to benefit from the synergies of the combination. This allocation is subject to an
operating segment ceiling and reflects the lowest level at which the goodwill is monitored for internal
reporting purposes.
An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated
recoverable amount. Impairment losses are recognized in the statement of income. Impairment losses
recognized in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to
the CGUs, and then to reduce the carrying amounts of the other assets in the CGUs on a pro rata basis.
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
101
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses
recognized in prior periods are assessed at each reporting date for any indications that the loss has
decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates
used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s
carrying amount does not exceed the carrying amount that would have been determined, net of depreciation
or amortization, if no impairment loss had been recognized.
Provisions and contingent assets
Provisions
Provisions are recognized when, at the financial statement date, the Company has a present obligation as a
result of a past event, it is more likely than not that the Company will be required to settle that obligation,
and the cash outflow can be estimated reliably. The amount recognized for provisions is the best estimate of
the expenditure to be incurred. Where the Company expects some or all of the provision to be reimbursed,
for example through insurance, the reimbursement is recognized as an asset only when it is virtually certain of
realization. The recoverable amount will not exceed the amount of the provision. Provisions include:
i. Provisions for potential legal claims relating to the Company’s performance and completion of
construction contracts. The Company attempts to settle claims within the construction period of the
contracts, but a legal claim may take years to settle.
ii. Provisions for potential warranty claims relating to construction projects. These claims are usually
settled during the project’s warranty period.
iii. Provisions for loss contracts are recorded when costs are estimated to be greater than total revenues
for the contract. Losses from construction contracts are recognized in full in the period the loss
becomes known. The loss provision will be net of management’s estimate of probable expected
recoveries, which differs from the criterion used for revenue recognition.
Contingent assets
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only
by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of
the entity. Cost recovery claims associated with claims against subcontractors and parties other than
customers are considered contingent assets until it is virtually certain that the claims will be settled.
Contingent assets are not recorded or disclosed in the financial statements.
Subcontractor/ supplier performance default insurance
The Company maintains an insurance policy which provides the Company with comprehensive coverage in
respect of subcontractor or supplier default on certain projects where the subcontractor or supplier is
enrolled in the program. The total insurance premium paid by the Company to the insurer is comprised of a
non-refundable premium and a deposit premium. The deposit premium paid by the Company is included in
other non-current assets on the consolidated statement of financial position (the “statement of financial
position”). The liabilities included in provisions on the statement of financial position relate to management’s
best estimate of exposures and costs associated with prior or existing subcontractor or supplier performance
defaults. Management conducts a thorough review of the liability every reporting period and takes into
consideration the Company’s experience to date with those subcontractors or suppliers that are enrolled in
the program.
Foreign currency translation
Foreign currency transactions
Foreign currency transactions and balances are recorded in the accounts as follows:
i. Monetary assets and liabilities at the exchange rate in effect at the financial statement date;
ii. Non-monetary assets and liabilities at exchange rates prevailing at the time of the transaction;
iii. Depreciation expense at the exchange rate in effect at the time the related assets are acquired; and
iv. Revenue and expenses at the average exchange rate prevailing on the date of the transaction.
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
102
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
Translation of equity accounted foreign entities
Assets and liabilities of equity accounted foreign entities are translated from the functional currency to the
Company’s presentation currency at the closing rate at the end of the reporting period. The statements of
income are translated at exchange rates at the dates of the transactions or at the average rate if it
approximates the actual rates. All resulting exchange differences are recognized in other comprehensive
income.
Income taxes
Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in the
statement of income except to the extent that it relates to a business combination, or items recognized
directly in equity or in other comprehensive income.
Current income taxes are recognized for the estimated income taxes payable based on applying enacted
income tax rates to the taxable income realized in the current year. Current tax includes adjustments to taxes
payable or recoverable in respect of previous years.
Deferred income tax assets and liabilities are recognized for temporary differences between the tax basis of
assets and liabilities and their carrying amounts for financial reporting purposes, as well as for the benefit of
tax losses available to be carried forward to future years provided they are likely to be realized. Deferred
taxes are recognized using enacted or substantively enacted rates expected to apply in the periods in which
the asset is realized or the liability is settled. Deferred taxes are measured on an undiscounted basis.
Deferred taxes are presented as non-current. Current and deferred tax assets and liabilities are offset only
when a legally enforceable right exists to offset current tax assets against current tax liabilities relating to the
same taxable entity and the same tax authority.
Post-employment benefits
DB pension costs are actuarially determined using the projected unit credit method and management’s best
estimate of salary escalation and retirement age of employees. The Company’s net obligation in respect of
DB pension plans is calculated separately for each plan by estimating the amount of future benefits that
employees have earned in return for their service in the current and prior periods; that benefit is discounted
to determine its present value. Any recognized past service costs and the fair value of plan assets are
deducted. The discount rate used to establish the pension obligation was determined by reference to market
interest rates on AA-rated corporate bonds with cash flows that approximate the timing and amount of
expected benefit payments. When the calculation results in a benefit to the Company, the recognized asset is
limited to the total of any unrecognized past service costs and the present value of economic benefits
available in the form of any future refunds from the plan or reductions in future contributions to the plan. In
order to calculate the present value of economic benefits, consideration is given to any minimum funding
requirements that apply to any plan within the Company. An economic benefit is available to the Company if
it is realizable during the life of the plan, or on settlement of the plan liabilities.
The pension deficit or surplus is adjusted for any material changes in underlying assumptions. The Company
recognizes all actuarial gains and losses arising from the DB plans in other comprehensive earnings in the
period in which they occur. When the benefits of a plan are improved, the portion of the increased benefit
related to past service by employees is recognized in the statement of income on a straight-line basis over
the average service period until the benefits become vested. To the extent that the benefits vest
immediately, the expense is recognized immediately in the statement of income.
Medium term incentive plan
The Company’s Medium Term Incentive Plan (“MTIP”) is a cash-settled share-based payment plan which
provides for the granting of phantom shares. The phantom shares provide the holder with the opportunity to
earn a cash benefit in relation to the value of a specified number of underlying notional shares. When new
MTIP awards are issued, the value of the initial award is determined, which is then used to determine the
number of shares allocated to the employee. The total liabilities for this plan are computed based on the
estimated number of phantom shares expected to vest at the end of the vesting period. The liability is
measured at each reporting date at fair value with changes in fair value recognized in income. The fair value
of the phantom shares outstanding at the end of a reporting period is measured based on the quoted market
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
103
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
price of the Company’s shares. The phantom shares earn notional dividends, equivalent to actual dividends
declared on the Company’s shares. Compensation expense relating to the initial award, notional dividends
and changes in the market price of the phantom shares is recognized on a straight-line basis in general and
administrative expenses in the statement of income over the vesting period.
Equity incentive plan
The Company has an Equity Incentive Plan (“EIP”) as part of the Company’s executive compensation plan.
The purpose of the EIP is to provide certain officers and employees of the Company with the opportunity to
be granted performance share units (“PSU”) or time-based restricted share units (“RSU”), and together with
PSUs, the (“Units”). The EIP is a full-value share unit plan using the value of the Company’s shares as the basis
for the Units. In the case of the PSUs, the amount of award payable at the end of the vesting period will be
determined by a performance multiplier. Under the EIP, the Company is entitled, in its sole discretion, to
settle the Units in either cash or the Company’s Shares purchased on the TSX or issued from treasury, or a
combination thereof. The Company intends to settle the EIP in cash.
As a cash-settled compensation arrangement, the fair value of the amount payable is recognized as an
expense with a corresponding increase in liabilities over the vesting period. The Units will vest and be settled
on their issue date, which will be no later than December 31 in the third year following the date of grant, or in
accordance with the EIP, participant’s award agreement, or the Company’s discretion. The liabilities for this
plan are calculated based on the estimated number of Units expected to vest at the end of the vesting
period. The Units earn notional dividends, equivalent to actual dividends declared on the Company’s shares.
The liability is remeasured at each reporting date at fair value with changes in fair value recognized in income.
The fair value of the Units outstanding at the end of a reporting period is measured based on the quoted
market price of the Company’s shares, with PSUs also adjusted by a performance multiplier. Compensation
expense relating to the initial award, notional dividends and changes in the market price of the Units is
recognized on a straight-line basis in general and administrative expenses in the statement of income over
the vesting period.
Deferred share unit plan
The Company has a Deferred Share Unit Plan ("DSU Plan"), which is a cash-settled share-based payment
plan. The fair value of the amount payable to eligible Directors in respect of Deferred Share Units ("DSU") is
equivalent to the cash value of the common shares at the reporting date. The DSUs earn notional dividends,
equivalent to actual dividends declared on the Company's shares. DSUs are eligible to be cash-settled no
later than December 31 of the following year in which the Director ceases to hold any position within the
Company. The liability associated with the DSU Plan is recalculated at each reporting date and at settlement.
Any change in the fair value of the liability is recognized in general and administrative expenses in the
statement of income.
Cash and cash equivalents
The Company considers cash, bank indebtedness, if any, bankers’ acceptances and short-term deposits with
original maturities of three months or less, as cash and cash equivalents.
Restricted cash
Restricted cash represent amounts that management has determined are not available for general operating
purposes. Restricted cash consists of cash held in trust, relating to trust obligations on certain projects for
which we have segregated accounts, and cash held to support letters of credit.
Financial instruments
Classification and measurement of financial instruments
Financial assets and liabilities are recognized on the statement of financial position when the Company
becomes a party to the contractual provisions of the financial instrument or derivative contract. The Company
derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it
transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which
substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in
transferred financial assets that is created or retained by the Company is recognized as a separate asset or
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
104
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
liability. Financial liabilities are derecognized when their contractual obligations are discharged, cancelled or
have expired. Financial instruments are initially measured at fair value and are subsequently accounted for
based on their classification as described below. The classification of financial assets is determined by their
context in the Company’s business model and by the characteristics of the financial asset’s contractual cash
flows.
• Amortized cost: The contractual cash flows received from the financial assets are solely payments of
principal and interest and are held within a business model whose objective is to collect the
contractual cash flows. The financial assets and financial liabilities are subsequently measured at
amortized cost using the effective interest method.
• Fair value through profit or loss (“FVTPL”): A financial asset is measured at FVTPL if it does not meet
the criteria for assets measured at amortized cost or FVTOCI. Financial assets at FVTPL include held
for trading assets and derivative instruments. Financial assets at FVTPL are measured at fair value with
changes recognized in the statement of income. Transaction costs associated with assets classified as
FVTPL are expensed as incurred.
• Fair value through other comprehensive income (“FVTOCI”): The Company does not have any
financial assets held at FVTOCI at December 31, 2022 or 2021.
The Company has the following financial assets and liabilities:
Classification & basis of measurement
Financial assets:
Cash and cash equivalents
Accounts receivable
Subcontractor / Supplier insurance deposits
Derivative contracts
Lease receivables
Financial liabilities:
Accounts payable
Dividends payable to shareholders
Loans and borrowings
Right-of-use liabilities
Acquisition holdback liability
Derivative contracts
Amortized cost
Amortized cost
Amortized cost
FVTPL
Amortized cost
Amortized cost
Amortized cost
Amortized cost
Amortized cost
Amortized cost
FVTPL
Derivative financial instruments
The Company uses interest rate swaps to manage its interest rate risk on non-recourse project financing
and its variable rate loans and borrowings. The Company also uses Total Return Swap (“TRS”) derivative
contracts for the purpose of managing its exposure to changes in the fair value of its MTIP, EIP and DSU
share-based compensation plans due to changes in the fair value of the Company’s common shares. The
changes in the fair market value are recorded as compensation expense in general and administrative
expenses in the statement of income. The Company uses foreign currency forward contracts to buy US
dollars for the purpose of managing its foreign currency risk. Unrealized gains and losses in the fair value of
the foreign currency forward contracts are recognized in general and administrative expenses in the
statement of income. The Company does not designate any of its derivative contracts as hedges.
Impairment of financial assets
Financial assets measured at amortized cost are assessed at each reporting date to determine whether
there is objective evidence of impairment. An expected credit loss (“ECL”) impairment model is applied,
where the ECL is the present value of all cash shortfalls over the expected life of the financial asset.
Impairment is measured at either the 12-month ECL or lifetime ECL. The Company recognizes the 12-
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
105
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
month ECL in the statement of income; however, for trade receivables and contract assets that do not
contain a significant financing component, a lifetime ECL is measured at the date of initial recognition.
A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial
recognition of the asset, and that the loss event will have a negative effect on the estimated future cash
flows of the asset that can be estimated reliably.
An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference
between its carrying amount and the present value of the estimated future cash flows discounted at the
asset’s original effective interest rate. The carrying amounts of financial assets are reduced by the amount
of the ECL through an allowance account and losses are recognized in general and administrative expenses
in the statement of income.
Joint arrangements
A joint arrangement is an arrangement in which the Company has joint control, established by contractual
agreements requiring unanimous consent for decisions about activities that significantly affect the
arrangement's returns. Joint arrangements are classified as either a joint operation or a joint venture. A
joint operation is an arrangement where the joint controlling parties have direct rights to the assets and
direct obligations for the liabilities of the arrangement in the normal course of business. Interests in a joint
operation are accounted for by recognizing the Company's share of assets, liabilities, revenues and
expenses. A joint venture is an arrangement where the joint controlling parties have rights to the net assets
of the arrangement. Interests in a joint venture are recognized as an investment and accounted for using
the equity method. The determination as to whether a joint arrangement is a joint venture or a joint
operation requires significant judgement based on the structure of the arrangement, the legal form of any
separate vehicle, the contractual terms of the arrangement and other facts and circumstances. The joint
arrangements in which Bird participates are typically formed to undertake a specific construction project,
are jointly controlled by the parties, and are dissolved upon completion of the project.
Finance and other income and finance and other costs
Finance and other income is comprised of interest earned on cash and cash equivalents, interest earned on
lease receivables, gains/losses on disposal of investments and changes in the fair value of financial assets
classified as FVTPL. Interest income is recognized as it accrues in the income statement.
Finance and other costs are comprised of interest on loans and borrowings including non-recourse project
financing using the effective interest rate method, interest expense related to ROU liabilities, interest
expense related to the net gain or loss on interest rate swaps, interest associated with TRS contracts, fees
associated with credit facilities, bank charges and other interest expenses.
5. New accounting standards, amendments and interpretations adopted
The Company has adopted new amendments effective January 1, 2022 related to IAS 37 Onerous Contracts
and annual improvements to IFRS standards 2018-2020 for IFRS 9 Financial Instruments and IFRS 16 Leases
that did not have a material impact on the Company’s financial statements.
6. Future accounting changes
There are new accounting standards and amendments to accounting standards and interpretations that are
effective for annual periods beginning on or after January 1, 2023 that have not been applied in preparing
the financial statements for the period ended December 31, 2022. These standards and interpretations are
not expected to have a material impact on the Company’s financial statements.
7. Business combinations
Acquisition of Dagmar Construction Inc.
In the prior year, on September 1, 2021, the Company acquired all of the issued and outstanding shares of
Dagmar Construction Inc. (“Dagmar”). Dagmar is an Ontario-based construction company with extensive
experience across key civil infrastructure sub-sectors including road, bridge, rail, sewer and water, and
commercial-institutional sites. One of the key rationales for the business combination was to combine and
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
106
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
integrate Dagmar’s capabilities and service offerings for both private and public owners across Ontario,
acting as a catalyst in this attractive end market. In selected national markets where Bird has civil activity,
Dagmar will add specialized capabilities to broaden client service offerings and increase diversification.
The purchase price of the transaction totalled $32,502 and included cash of $23,600, equity of $6,538, and a
holdback and other liability of $2,364. The $2,364 holdback and other liability consisted of $1,364 related to
a final working capital reconciliation and $1,000 relating to any indemnities provisions to be reconciled as at
the second anniversary of the closing date. The Company has paid $1,364 towards the final working capital
reconciliation in the year ended December 31, 2022.
In connection with this acquisition, the Company incurred acquisition costs of approximately $787,
comprised mainly of consulting and other professional fees, which were presented in general and
administrative expenses in the statement of income. Transaction costs of $18 directly attributable to the
issue of common shares related to the transaction were recognized as a reduction from shareholders'
capital.
The value of the assets and liabilities associated with the Dagmar acquisition were finalized on September
1, 2022. During the year ended December 31, 2022, no measurement period adjustments were made to the
purchase price allocation to reflect new information obtained by the Company with respect to the facts and
circumstances that existed as of September 1, 2021.
Total common shares issued as consideration
Common share price at close on September 1, 2021
Equity consideration
Acquisition holdback and other liability
Cash consideration
Total Consideration
Fair value of assets and liabilities of Dagmar acquired:
Assets acquired
Cash and cash equivalents
Accounts receivable
Contract assets
Income taxes recoverable
Prepaid expenses
Property and equipment
ROU assets
Intangible assets
Liabilities assumed
Accounts payable
Contract liabilities
ROU liabilities
Net deferred income tax liabilities
Net identifiable assets acquired
Goodwill
Net assets acquired
$
$
$
$
$
$
656,364
9.96
6,538
2,364
23,600
32,502
3,055
6,887
50
332
74
3,211
5,489
6,004
(2,058)
(1,043)
(5,489)
(2,790)
13,722
18,780
32,502
The fair value and gross amount of the trade receivables acquired amounted to $6,887.
Goodwill and intangible assets
Goodwill of $18,780 recognized as part of the acquisition is attributed to expected revenue growth and
future market development specifically in the civil infrastructure sector. These benefits are not recognized
separately from goodwill, as the future economic benefits arising from them cannot be reliably measured.
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
107
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
The goodwill recognized is not deductible for tax purposes. Identifiable intangible assets acquired of
$6,004 include computer software, backlog and agency contracts, customer relationships and trade names.
8. Cash and cash equivalents
Accessible cash
Cash held for joint operations
Restricted cash and cash equivalents
9. Accounts receivable
Progress billings on construction contracts
Holdbacks receivable (due within one operating cycle)
Other
2022
96,011 $
15,622
62,974
174,607 $
2021
102,972
22,708
64,511
190,191
2022
457,069 $
244,791
6,301
708,161 $
2021
412,674
178,898
6,242
597,814
$
$
$
$
Accounts receivable are reported net of an allowance for doubtful accounts of $1,632 as at December 31,
2022 (December 31, 2021 – $1,527). Holdbacks receivable represent amounts billed on construction
contracts which are not due until the contract work is substantially complete and the applicable lien period
has expired.
10. Revenue, contract assets and contract liabilities
Disaggregation of revenue
The Company disaggregates revenue from contracts with customers by contract type, as this best depicts
how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic
factors.
Public Private Partnerships (“PPP”)
Alternative finance projects and complex design-build
Stipulated sum, unit price and standard specification design-build
Construction management, cost plus and IPD
2022
55,129 $
120,636
1,342,106
859,678
2,377,549 $
$
$
2021
14,920
58,883
1,235,828
910,395
2,220,026
Remaining performance obligations
The total value of all contracts awarded to the Company, less the total value of work completed on these
contracts as of the reporting date is referred to as remaining performance obligations. This includes all
contracts that have been awarded to the Company whether the work has commenced or will commence in
the normal course.
As at December 31, 2022, the aggregate amount of remaining performance obligations from construction
contracts was $2,636,543. The value of remaining performance obligations does not include amounts for
variable consideration that are constrained, agency relationship construction management projects, and
estimated future work orders to be performed as part of master services agreements.
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
108
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
The Company expects to recognize approximately 64% of the remaining performance obligations over the
next 12 months with the remaining balance being recognized beyond 12 months. This expectation is based
on management’s best estimate but contains uncertainty as it is subject to factors outside of the
Company's control.
The Company’s measure of remaining performance obligations is also referred to as “Backlog” and
additions to remaining performance obligations are also referred to by the Company as “Securements.”
These measures may not be comparable with the calculation of similar measures by other entities as
Backlog and Securements are not terms defined under IFRS.
Summary of contract balances
The following table provides information about receivables, contract assets and contract liabilities from
contracts with customers:
Progress billings and holdbacks receivable (note 9)
Contract assets
Contract liabilities
2022
701,860 $
56,938
(146,986)
611,812 $
$
$
2021
591,572
55,949
(130,315)
517,206
Progress billings and holdbacks receivable
The Company issues invoices in accordance with the billing schedule or contract terms. These invoices
trigger recognition of accounts receivable.
Contract assets
The Company receives payments from customers based on a billing schedule, as established in the
contracts. A contract asset relates to the conditional right to consideration for completed performance
under the contract. Accounts receivable are recognized when the right to consideration becomes
unconditional. Contract assets related to construction contracts are typically invoiced within a year.
Balance, December 31, 2021
Acquisition (note 7)
2022
Construction
Contracts
55,949
$
2021
Alternative
finance
projects
Construction
contracts
$
60,031 $
113 $
—
50
—
Total
60,144
50
Reduction of contract assets due to progress billings
(886,941)
(1,139,620)
(113)
(1,139,733)
Additions to contract assets
Balance, December 31, 2022
Contract liabilities
887,930
1,135,488
—
1,135,488
$
56,938
$
55,949 $
— $
55,949
Contract liabilities relate to payments received in advance of performance under the contract. Contract
liabilities are recognized as revenue as (or when) the Company performs under the contract. Typically,
contract liabilities are recognized within a year as performance is achieved per contractual terms.
For the year ended December 31, 2022, $130,315 of revenue (2021 – $121,504) was recognized that was
included in the contract liability balance at the beginning of the year.
For the year ended December 31, 2022, $6,937 of revenue (2021 - $3,964) was recognized from the
satisfaction of performance obligations related to previous periods. Amounts represent changes in the
transaction price due to contract modifications and various other cumulative catch up adjustments.
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
109
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
11. Other assets
Subcontractor / Supplier insurance deposits
Lease receivables
Total Return Swap (“TRS”) derivatives (note 24)
Other
Other assets
Less: current portion
TRS derivatives
Lease receivables
Other
Current portion
Non-current portion
$
$
$
2022
1,751 $
4,702
2,950
372
9,775 $
2,950
1,286
—
4,236
5,539 $
2021
4,403
5,895
4,896
29
15,223
4,896
1,194
29
6,119
9,104
Subcontractor/Supplier insurance deposits relate to the Company's insurance policies which provide Bird
with comprehensive coverage, subject to a deductible, in respect of subcontractor or supplier default on
certain projects where the subcontractor or supplier is enrolled in the program.
The Company subleases certain facilities. The following is a detailed maturity analysis of the undiscounted
finance lease payments receivable as at December 31, 2022:
Carrying
amount
Contractual
cash flows
Not later
than 1 year
Later than 1
year and
less than 3
years
Later than 3
years and
less than 5
years
Later than 5
years
Lease receivables
$
4,702 $
4,984 $
1,402 $
3,166 $
416 $
—
12. Assets held for sale
Investments in equity accounted entities classified as held for sale
Property classified as held for sale
2022
2021
$
$
2,341 $
—
2,341 $
3,980
436
4,416
Investments in equity accounted entities classified as held for sale
During the year ended December 31, 2022, the Company sold one of its investments in equity accounted
entities.
Property classified as held for sale
During the year ended December 31, 2022, property located in Northern Alberta that was previously
classified as held for sale on the statement of financial position in 2021 is no longer classified as held for
sale and is included in property and equipment (note 14).
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
110
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
13. Projects and entities accounted for using the equity method
The Company performs certain construction and concession related projects through joint ventures and
associates which are accounted for using the equity method. The Company’s joint ventures and associates
are private entities and there is no quoted market value available for their shares.
Total current assets
Total non-current assets
Total assets
Total current liabilities
Total non-current liabilities
Total liabilities
Net assets – 100%
Attributable to the Company
Revenue – 100%
Total comprehensive income – 100%
Attributable to the Company
Total current assets
Total non-current assets
Total assets
Total current liabilities
Total non-current liabilities
Total liabilities
Net assets – 100%
Attributable to the Company
Revenue – 100%
Total comprehensive income – 100%
Attributable to the Company
2022
Joint ventures
Associates
$
73,809 $
26,372 $
105,372
179,181
28,376
130,677
159,053
172,802
199,174
8,151
163,923
172,074
20,128 $
7,076 $
27,100 $
2,710 $
Total
100,181
278,174
378,355
36,527
294,600
331,127
47,228
9,786
74,894 $
8,154 $
83,048
(7,411) $
(3,050) $
2,318 $
232 $
(5,093)
(2,818)
2021
Joint ventures
Associates
29,070 $
26,717 $
243,749
272,819
19,246
213,177
232,423
176,342
203,059
8,694
167,867
176,561
40,396 $
14,742 $
26,498 $
2,650 $
Total
55,787
420,091
475,878
27,940
381,044
408,984
66,894
17,392
115,822 $
7,373 $
123,195
11,679 $
3,982 $
2,108 $
205 $
13,787
4,187
$
$
$
$
$
$
$
$
$
$
$
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
111
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
The movement in the investment in projects and entities accounted for using the equity method is as
follows:
Investments in equity accounted entities
Balance, beginning of period
Share of net income (loss) for the period
Share of other comprehensive income (loss) for the period
Investments in equity accounted entities
Capital distributions received
Investments in equity accounted entities reclassified as held for sale (note 12)
2022
$
13,471 $
(2,818)
(187)
—
10,466
(680)
—
Balance, end of period
$
9,786 $
2021
14,710
4,187
(21)
768
19,644
(2,193)
(3,980)
13,471
The carrying amount of investments in equity accounted entities may not always equal the Company’s share
of the net assets or net liabilities of these joint ventures and associates due to fair value adjustments
including goodwill and the timing of capital contributions or distributions in accordance with contract
terms.
Share of net income (loss) for the period
Gain on sale of investments in equity accounted entities
Income (loss) from equity accounted investments
2022
(2,818) $
104
(2,714) $
$
$
2021
4,187
—
4,187
The Company recognizes the income and losses related to its investments in associates and joint ventures,
as the Company has an obligation to fund its proportionate share of the net liabilities of these entities.
Transactions with these related parties are described in note 35. Amounts committed for future capital
injections to concession entities are described in note 34.
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
112
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
14. Property and equipment
2022
Land
Buildings
Leasehold
improvements
Equipment,
trucks and
automotive
Furniture
and office
equipment
Total
Cost
Balance, December 31, 2021
$
2,352 $ 12,685 $
17,282 $
98,695 $
3,184 $ 134,198
Reclassified from held for sale
Additions
Disposals
436
—
—
—
210
—
—
—
2,864
13,555
—
188
436
16,817
(25)
(8,788)
(235)
(9,048)
Balance, December 31, 2022
2,788
12,895
20,121
103,462
3,137
142,403
Accumulated depreciation
Balance, December 31, 2021
Disposals
Depreciation expense
Balance, December 31, 2022
—
—
—
—
7,210
—
470
7,680
8,452
61,342
2,190
79,194
(9)
(6,425)
(229)
(6,663)
2,326
10,769
11,371
66,288
234
2,195
14,401
86,932
Net book value
$
2,788 $
5,215 $
9,352 $
37,174 $
942 $ 55,471
2021
Land
Buildings
Leasehold
improvements
Equipment,
trucks and
automotive
Furniture
and office
equipment
Total
Cost
Balance, December 31, 2020
Acquisition
Reclassified as held for sale
Additions
Disposals
$
2,557 $
12,181 $
16,730 $
98,808 $
3,156 $ 133,432
—
(436)
231
—
—
—
504
—
26
—
619
3,069
—
7,089
116
—
107
3,211
(436)
8,550
(93)
(10,271) $
(195)
(10,559)
Balance, December 31, 2021
2,352
12,685
17,282
98,695
3,184
134,198
Accumulated depreciation
Balance, December 31, 2020
Disposals
Depreciation expense
Balance, December 31, 2021
—
—
—
—
6,719
—
491
7,210
5,836
59,315
2,127
(53)
(8,436)
2,669
8,452
10,463
61,342
(173)
236
2,190
73,997
(8,662)
13,859
79,194
Net book value
$
2,352 $
5,475 $
8,830 $
37,353 $
994 $
55,004
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
113
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
15. Right-of-use assets
2022
Buildings
Equipment,
trucks and
automotive
Furniture and
office
equipment
Cost
Balance, December 31, 2021
$
43,393 $
51,441 $
1,848 $
Additions
Disposals
Balance, December 31, 2022
Accumulated depreciation
Balance, December 31, 2021
Disposals
Depreciation expense
Balance, December 31, 2022
Total
96,682
15,045
(4,261)
8,453
(778)
51,068
6,584
(3,483)
54,542
8
—
1,856
107,466
11,963
—
6,557
18,520
16,257
(3,228)
8,190
21,219
965
—
626
1,591
29,185
(3,228)
15,373
41,330
Net book value
$
32,548 $
33,323 $
265 $
66,136
Cost
Balance, December 31, 2020
$
Acquisition
Additions
Disposals
Balance, December 31, 2021
Accumulated depreciation
Balance, December 31, 2020
Disposals
Depreciation expense
Balance, December 31, 2021
2021
Buildings
Equipment,
trucks and
automotive
Furniture and
office
equipment
35,085
4,904
4,222
(818)
43,393
6,057
(96)
6,002
11,963
41,053
585
11,775
(1,972)
51,441
10,243
(1,637)
7,651
16,257
1,900
—
—
(52)
1,848
227
(29)
767
965
Total
78,038
5,489
15,997
(2,842)
96,682
16,527
(1,762)
14,420
29,185
Net book value
$
31,430 $
35,184 $
883 $
67,497
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
114
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
16. Intangible assets
Cost
Balance, December 31, 2021
Additions
Disposals
Balance, December 31, 2022
Accumulated amortization
Balance, December 31, 2021
Amortization expense
Disposals
Balance, December 31, 2022
2022
Trade
names
Backlog and
agency
contracts
Customer
relationships
Computer
software
$
8,000 $
—
—
8,000
4,500 $
—
—
15,500 $
—
—
17,164 $
10,949
(548)
4,500
15,500
27,565
67
200
—
267
1,790
1,709
—
3,499
2,189
2,242
—
4,431
10,640
2,514
(528)
12,626
Total
45,164
10,949
(548)
55,565
14,686
6,665
(528)
20,823
Net book value
$
7,733 $
1,001 $
11,069 $
14,939 $
34,742
Cost
Balance, December 31, 2020
Acquisition
Additions
Balance, December 31, 2021
Accumulated amortization
Balance, December 31, 2020
Amortization expense
Balance, December 31, 2021
2021
Trade
names
Backlog and
agency
contracts
Customer
relationships
Computer
software
Total
$
7,000 $
4,000 $
11,000 $
13,954 $
35,954
1,000
—
8,000
—
67
67
500
—
4,500
333
1,457
1,790
4,500
—
15,500
393
1,796
2,189
4
3,206
17,164
7,702
2,938
10,640
6,004
3,206
45,164
8,428
6,258
14,686
Net book value
$
7,933 $
2,710 $
13,311 $
6,524 $
30,478
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
115
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
17. Goodwill
Cost
Balance, December 31, 2021
Balance, Acquisition (note 7)
Balance, December 31, 2022
Accumulated impairment
2022
2021
$
69,891 $
—
69,891
51,111
18,780
69,891
14,151
14,151
Net book value
$
55,740 $
55,740
At December 31, 2022 and 2021, the Company conducted an impairment test of its goodwill and indefinite
life intangible assets. The carrying value of goodwill and the Company’s indefinite life intangible assets at
December 31, 2022 and 2021 was determined to not be impaired as the recoverable amount of the
Company’s CGUs exceeded their carrying values.
For the purposes of impairment testing, the Company allocated the carrying value of goodwill to the
following groups of CGUs:
Industrial
Buildings
Commercial Systems Group
2022
2021
$
$
41,375 $
12,794
1,571
55,740 $
41,375
12,794
1,571
55,740
Key assumptions and sensitivity analysis
The recoverable amount of the CGUs was determined based on a value-in-use calculation using cash flow
projections from financial forecasts derived from the Company’s 2023 Business Plan and the 2022-2024
Strategic Plan, which was reviewed by management with the Board of Directors.
The Company selected a four year forecast period for the discounted cash flow analysis with the belief that
further periods are adequately represented by a terminal value. Cash flows from growth opportunities are
probability-weighted and relate to initiatives management expects to progress on in the medium to long-
term time frame. These cash flows require assumptions to be made regarding the likelihood of projects
progressing and the future economics of those projects. Cash flows for the remaining periods were
extrapolated using a growth rate of 2.0%. An after-tax discount rate of 16.0%, which is based on a market-
based cost of capital, was applied in determining the recoverable amounts. The same discount rate has
been used in each of the CGUs, given the similarity in the business and the fact that business-specific risks
were adjusted for in the forecasted cash flows. In addition, entity-specific risks were separately factored into
each CGU forecast.
Sensitivity analyses of significant estimates and assumptions was conducted as part of the Company’s
impairment testing. The sensitivity ranges were selected based on management’s expectations for
inflationary growth and knowledge of weighted average cost of capital within the construction industry. A
1% change in the discount rate and a 0.5% change in the growth rate would not result in the carrying values
of the CGUs exceeding their recoverable amounts.
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
116
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
18. Loans and borrowings
Loans and borrowings
Committed revolving credit facility
December 15, 2025 Variable
$
22,725 $
22,725
Maturity
Interest rate
2022
2021
Committed non-revolving term loan
facility
December 15, 2025 Variable
Equipment financing
2023 – 2027 Fixed 2.04%-4.70%
Current portion
Non-current portion
47,500
4,866
75,091
7,084
49,375
6,581
78,681
7,470
$
68,007 $
71,211
The following table provides details of the changes in the Company’s Loans and Borrowings for the year
ended December 31, 2022:
Balance, December 31, 2021
Proceeds
Repayments
Balance, December 31, 2022
Syndicated
revolving credit
facility
Syndicated
committed
non-revolving
term loan facility
$
$
22,725 $
49,375 $
50,000
(50,000)
22,725 $
—
(1,875)
47,500 $
Equipment
financing
6,581 $
2,776
(4,491)
4,866 $
Total
78,681
52,776
(56,366)
75,091
Syndicated credit facility
During the fourth quarter of 2022, the Company amended its syndicated credit facility (the “Syndicated
Facility”), adding additional capacity under the revolving credit facility and extending the maturity date to
December 15, 2025. The Syndicated Facility is secured by a general interest in the assets of the Company,
and consists of the following:
Committed revolving credit facility
The Company has a committed revolving credit facility of up to $220,000 (December 31, 2021 – $185,000)
that includes up to $30,000 swingline which allows the Company to enter into an overdraft position, and
$115,000 letters of credit availability. Borrowings under the facility bear interest at a rate per annum equal
to the Canadian prime rate plus a spread. A standby fee is payable quarterly on the unutilized portion of
the facility.
At December 31, 2022, the Company has $25,312 letters of credit outstanding on the facility (December 31,
2021 – $21,989) and has drawn $22,725 on the facility (December 31, 2021 – $22,725). The $22,725 drawn on
the facility is presented as non-current loans and borrowings on the Company's statement of financial
position as the amounts are not expected to be settled in the Company's normal operating cycle, and are
not due to be repaid until the maturity of the facility in 2025.
Committed non-revolving term loan facility
The Company has a committed non-revolving term loan facility totalling $47,500 which was fully drawn
under the prior amendment to the credit facility to finance the acquisitions of Stuart Olson and Dagmar in
2020 and 2021 respectively (note 7). The term loan has scheduled repayments due quarterly until the
maturity date of December 15, 2025. Any repayment of the facility cannot be reborrowed. Borrowings
under the facility bear interest at a rate per annum equal to the Canadian prime rate plus a spread. As at
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
117
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
December 31, 2022, the Company has an outstanding balance of $47,500 on the facility (December 31, 2021
– $49,375 outstanding under prior amendment to the credit facility).
Accordion
The Syndicated Facility includes a non-committed accordion feature allowing the Company to increase the
limit of the revolving credit facility and the non-revolving term debt facility up to an additional $50,000 in
aggregate. Any increases under the accordion require creditor approval before becoming available to the
Company.
The Company was in compliance with its covenants under each facility as at December 31, 2022 and
December 31, 2021.
Equipment financing
The Company has committed term credit facilities of up to $40,000 to be used to finance equipment
purchases of which as at December 31, 2022, $2,057 is outstanding (December 31, 2021 – $5,242).
Borrowings under the facilities are secured by a first charge against the equipment financed using the
facilities. Interest on the facilities is charged at a fixed rate based on the Bank of Canada bond rate plus a
spread. Interest is paid monthly in arrears.
The Company also has multiple, fixed interest rate, term loans which were used to finance equipment
purchases. At December 31, 2022, the balance outstanding on these term loans amounted to $2,809
(December 31, 2021 – $1,339). Principal and interest are payable monthly, and these term loans are secured
by a first charge against the specific equipment financed using these facilities.
Letters of credit facilities
The Company has authorized operating letters of credit facilities totalling $150,000. At December 31, 2022,
the facilities were drawn for outstanding letters of credit of $51,627 (December 31, 2021 – $67,426). All
letters of credit issued under these facilities are supported by the pledge of Company-owned financial
instruments, including cash, or through a guarantee from Export Development Canada (“EDC”).
The Company has an agreement with EDC to provide performance security guarantees of up to $100,000
for letters of credit issued by financial institutions on behalf of the Company. The Company uses this facility
when letters of credit have been issued as contract security for projects that qualify for EDC coverage. At
December 31, 2022, EDC has issued performance security guarantees totalling $51,537 (December 31, 2021
– $67,289).
The letters of credit represent performance guarantees issued to support the Company’s performance
obligations on major construction projects. These letters of credit are supported through the hypothecation
of certain financial instruments having a market value at December 31, 2022 of $90 (December 31, 2021 –
$139).
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
118
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
19. Leases and right-of-use liabilities
The Company’s lease contracts are effective for periods of one to twelve years but may have extension
options.
The following table provides details of the changes in the Company’s right-of-use ("ROU") liabilities during
the period ended December 31, 2022:
Balance, December 31, 2021
Acquisition (note 7)
Additions
Interest
Lease terminations and modifications
Repayment
Balance, December 31, 2022
Current portion
Non-current
2022
$
79,358 $
—
15,045
2,805
(1,397)
(22,552)
73,259
17,790
$
55,469 $
2021
78,075
5,489
15,997
2,937
(938)
(22,202)
79,358
19,782
59,576
Potential undiscounted cash outflows of $51,903 (December 31, 2021 - $55,328) have not been included in
the measurement of the Company’s ROU liabilities as at December 31, 2022 because it is not reasonably
certain that particular leases will be extended. Included in the statement of income were expenses related
to short-term leases and leases of low-value assets amounting to $7,774 for the year ended December 31,
2022 (2021 - $2,423). Total cash outflows for leases for the year ended December 31, 2022 were $30,326
(2021 - $24,625).
The Company has established operating lease lines of credit of $25,000 with the financing arms of major
heavy equipment suppliers to finance equipment leases. Draws under these facilities are generally
recognized as ROU liabilities, with the lease obligations being secured by the specific leased equipment. At
December 31, 2022, the Company had used $6,460 (December 31, 2021 – $6,864) under these facilities.
20. Income taxes
Provision for income taxes
Income tax expense (recovery) comprised of:
Current income taxes
Deferred income taxes
2022
2021
$
$
5,340 $
11,982
17,322 $
15,786
(939)
14,847
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
119
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
Income tax rate reconciliation
Combined federal and provincial income tax rate
Increase (reductions) applicable to:
Effect of different tax rate on equity investments
Non-taxable items
Other
Effective rate
2022
25.6%
—%
0.5%
(0.3%)
25.8%
2021
25.9%
—%
0.3%
(0.4%)
25.8%
The Company's statutory tax rate is the combined federal and provincial tax rates in the jurisdictions in
which the Company operates.
Composition of deferred income tax assets and liabilities
Provisions and accruals
Pension and other compensation
Timing of recognition of construction profits
Property and equipment
Right of use assets and liabilities and lease receivables
Intangible assets
Investment in equity accounted entities
Other
Tax loss carry forward
Presentation in the statement of financial position
Deferred income tax asset
Deferred income tax liability
$
2022
4,675 $
4,620
(29,714)
(5,836)
2,372
(4,798)
(805)
(3,365)
28,659
$
(4,192) $
31,564
(35,756)
$
(4,192) $
2021
5,255
7,658
(22,007)
(7,254)
3,342
(6,258)
(1,653)
(3,270)
32,173
7,986
32,784
(24,798)
7,986
The deferred tax asset balances recognized by the Company are supported by the reversal of existing
taxable temporary differences and expected future taxable income in excess of deductible temporary
differences.
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
120
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
2022
Balance,
December 31,
2021
5,255 $
Recognized in
profit or loss
Recovery in
other
comprehensive
income
Balance,
December 31,
2022
4,675
— $
Provisions and accruals
$
Pension and other compensation
Timing of recognition of construction
profits
Property and equipment
ROU assets and liabilities
Intangible assets
Investments in equity accounted entities
Other
Tax loss carry forward
7,658
(22,007)
(7,254)
3,342
(6,258)
(1,653)
(3,270)
32,173
(580) $
(2,810)
(7,707)
1,418
(970)
1,460
816
(95)
(3,514)
(228)
—
—
—
—
32
—
—
$
7,986 $
(11,982) $
(196) $
2021
Balance,
December 31,
2020
4,325 $
Recognized
in profit or
loss
930 $
$
Recovery in
other
comprehensive
income
Acquisition
(note 7)
Balance,
December 31,
2021
5,255
— $
Provisions and accruals
Pension and other compensation
Timing of recognition of construction
profits
Property and equipment
ROU assets and liabilities
Intangible assets
Investments in equity accounted
entities
Other
Tax loss carry forward
21. Provisions
Balance, December 31, 2021
Provisions made during the period
Provisions used during the period
Provisions reversed during the period
Balance, December 31, 2022
4,544
(16,533)
(4,305)
3,464
(5,792)
(911)
(2,191)
28,049
3,909
(5,063)
(2,270)
(122)
1,234
(724)
(1,079)
4,124
— $
(795)
—
—
—
—
(18)
—
—
—
(411)
(679)
—
(1,700)
—
—
—
$
10,650 $
939 $
(813) $
(2,790) $
Warranty claims
and other
Legal
$
16,426 $
10,890 $
13,566
(9,470)
(10,268)
2,205
(1,091)
(3,715)
$
10,254 $
8,289 $
4,620
(29,714)
(5,836)
2,372
(4,798)
(805)
(3,365)
28,659
(4,192)
7,658
(22,007)
(7,254)
3,342
(6,258)
(1,653)
(3,270)
32,173
7,986
Total
27,316
15,771
(10,561)
(13,983)
18,543
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
121
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
Balance, December 31, 2020
Provisions made during the period
Provisions used during the period
Provisions reversed during the period
Balance, December 31, 2021
Warranty claims
and other
$
16,311 $
24,254
(15,578)
(8,561)
Legal
11,258 $
5,775
(834)
(5,309)
$
16,426 $
10,890 $
Total
27,569
30,029
(16,412)
(13,870)
27,316
Various claims and litigation arise in the normal course of the construction business. It is the Company's
opinion that an adequate provision has been made for any potential settlements relating to such matters
and that they will not materially affect the financial position or future operations of the Company.
22. Other liabilities
Liabilities for cash-settled share-based compensation plans (note 24)
$
18,511 $
2022
Leasehold inducements
Acquisition holdback and other liability (note 7)
Less: current portion
Cash-settled share-based compensation plans (note 24)
Leasehold inducements
Acquisition holdback and other liability (note 7)
Current portion
Non-current portion
23. Pension obligations
2021
24,918
1,612
2,364
28,894
10,630
317
1,364
12,311
1,328
1,000
20,839
8,181
268
1,000
9,449
$
11,390 $
16,583
The Company maintains two registered pension plans covering salaried employees for two of its
subsidiaries. Each plan includes a defined contribution (“DC”) provision and a non-contributory defined
benefit ("DB") provision. During the first quarter ended 2022, the Company commenced the process of
winding up one of the pension plans, which remains in process at December 31, 2022.
DC pension plans
The total expense recognized in the statement of income during the year ended December 31, 2022 of
$583 (2021 - $274) represents contributions to these plans by the Company at rates specified in the rules of
the plans.
DB pension plans
Annual employer contributions to the DB provisions, determined by an independent actuary, meet
minimum amounts required by provincial pension supervisory authorities. The benefits provided by the DB
provisions of the pension plans are based on years of service and final average earnings of the employees
who are members of the plans.
During the third quarter ended 2022, a partial settlement of one of the the plans occurred resulting in the
derecognition of obligations totalling $13,732, a settlement loss of $558 recorded in general and
administrative expenses, and $844 of other comprehensive income related to changes in the asset ceiling.
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
122
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
Fair market value of plan assets
Equity securities
Fixed income allocation
Debt securities
Other return seeking investments
Cash and cash equivalents
Reconciliation of amounts in the financial statements
Accrued benefit obligation
Balance, beginning of period
Employer current service cost
Interest cost on the defined benefit obligation
Benefit payments
Actuarial loss due to experience adjustments
Actuarial gain due to changes in financial assumptions
Settlements
Balance, end of period
Fair value of plan assets
Balance, beginning of period
Employer contributions
Interest income on plan assets
Actuarial gain (loss) on plan assets, excluding interest income
Benefit payments
Administration costs
Settlements
Balance, end of period
Funded status – surplus (deficit)
Unrecognized amount due to asset ceiling
Recognized asset (liability) for defined benefit obligations
Asset ceiling
Balance, beginning of period
Interest on asset ceiling
Change in asset ceiling
Balance, end of period
2022
$
5,092 $
7,744
—
2,711
720
$
16,267 $
2021
8,255
24,907
—
4,649
117
37,928
2022
2021
$
37,339 $
39,912
230
906
(1,649)
93
(7,288)
(13,732)
$
15,899 $
275
980
(1,937)
60
(1,951)
—
37,339
2022
2021
$
37,928 $
36,312
981
909
(7,131)
(1,650)
(480)
(14,290)
16,267 $
2022
368 $
—
368 $
2022
821 $
23
(844)
— $
$
$
$
$
$
867
892
2,127
(1,937)
(333)
—
37,928
2021
589
(821)
(232)
2021
—
—
821
821
During the period ended December 31, 2022, $1,289 (2021 – $696) was recorded in general and
administrative expenses in the statement of income, and a gain of $908 (2021 – $3,197) before tax, was
recorded in other comprehensive income, relating to the DB plans. The gain relates to investment earnings
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
123
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
being greater than the expected interest income on the plans' assets and changes in financial assumptions,
which is partially offset by the impact of an asset ceiling.
Actuarial assumptions
Discount rate on net benefit obligations
Rate of compensation increase
Inflation rate
2022
5.1 %
3.0 %
2.0 %
2021
2.9 %
3.0%
2.0%
The discount rate used to establish the pension obligation is based on AA-rated Canadian corporate bond
yields at the measurement date. A change of 100 basis points in the discount rate at the reporting date
would have increased or decreased the accrued benefit obligation by $1,873 (December 31, 2021 – $4,983).
24. Share-based compensation plans
Medium term incentive plan (“MTIP”), Equity incentive plan (“EIP”) and Deferred share unit (“DSU”)
plan
The terms of the Company’s MTIP, EIP and DSU plan are described in note 4.
MTIP liability
EIP liability
DSU liability
Liabilities for cash-settled share-based compensation plans
Less: current portion
MTIP liability
EIP liability
DSU liability
Current portion
Non-current portion
$
2022
1,168 $
8,975
8,368
18,511
1,168
4,707
2,306
8,181
2021
6,347
10,585
7,986
24,918
5,540
5,090
—
10,630
$
10,330 $
14,288
MTIP
2022
EIP1
DSUs
MTIP
2021
EIP1
Units, beginning of period
Granted 2
Forfeited
Change in estimate
Vested and paid
809,213
1,398,029
813,258
1,082,701
1,130,053
47,980
735,192
217,294
36,741
561,016
(18,687)
—
—
—
(649,600)
(420,247)
—
—
—
(152,522)
(83,580)
(61,597)
—
(96,110)
(209,460)
DSUs
680,718
132,540
—
—
—
Units, end of period
188,906
1,712,974
1,030,552
809,213
1,398,029
813,258
1 Based on underlying units before the impact of a performance multiplier, but after the effects of the dividend
adjustment ratio and the estimated forfeiture rate.
2 MTIP and DSU grants include dividend reinvestments.
The Company’s EIP provides certain officers and employees of the Company with the opportunity to be
granted PSUs or time-based RSUs. As at December 31, 2022, the Company had 856,487 outstanding RSUs
and 856,487 outstanding PSUs, before the impact of the performance multiplier (December 31, 2021 –
715,155 and 682,874 units, respectively). The outstanding PSU balance as at December 31, 2022, adjusted
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
124
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
for the performance conditions that modify the vested value, is 956,192 units (December 31, 2021 – 999,422
units).
Compensation expense accrued for PSUs issued under the Company’s EIP is dependent on an adjustment
to the final number of PSUs that will vest based on a performance multiplier that is estimated by
management and approved by the Board of Directors. The performance multiplier applicable to the PSUs is
determined based on relative total shareholder return (“TSR”) and based on the achievement of earnings
before income tax compared to the Company’s business plan. The performance multiplier for achievement
of TSR is based on a comparison against TSR achieved in the performance period by comparative
companies. The range of the performance multiplier for the TSR and the achievement of earnings before
income tax is between zero to a maximum of 2, if the Company performs within the highest range of its
performance targets. RSU awards are set at a specific number of shares which are time-vested with no
performance multiplier.
During the first, second, third and fourth quarter of 2022, the Company granted 31,796, 39,320, 57,466 and
45,709 units under the DSU plan at a fair market value of $9.23, $7.83, $6.07 and $7.95 respectively,
excluding dividend reinvestments.
In the second quarter of 2022 the Company granted 661,563 units under the EIP plan at a fair market value
of $9.03, excluding dividend reinvestments.
As at December 31, 2022, a total of 1,901,880 unvested phantom units of the MTIP and EIP (December 31,
2021 – 2,207,242) are outstanding and valued at $16,253 (December 31, 2021 - $24,686) of which $10,143 has
been recognized to date in the statement of income (2021 - $16,932).
Pursuant to the Company’s MTIP granted in 2020, payments are due by November 2023, or upon
retirement, if earlier. Payments pursuant to the Company's EIP granted in 2020, 2021 and 2022 vest on
December 2023, December 2024 and December 2025, respectively. Payments pursuant to the Company's
DSU Plan are cash settled no later than December 31 of the following year in which the Director ceases to
hold any position within the Company.
Expenses (recoveries) arising from share-based payment transactions1
MTIP
EIP
DSU
$
$
2022
399 $
3,543
382
4,324 $
2021
4,420
6,583
2,540
13,543
1 Expenses are before the effect of the TRS derivative contracts.
The Company enters into TRS derivative contracts for the purpose of managing its exposure to changes in
the fair value of its MTIP, EIP and DSU share-based compensation plans, due to changes in the fair value of
the Company’s common shares. The Company recognized a loss of $1,946 on these derivatives in the
statement of income in general and administrative expenses for the year ended December 31, 2022 (2021 –
$3,292 gain).
25. Shareholders’ capital
The Company is authorized to issue an unlimited number of common shares. The Company is authorized to
issue preference shares in series with rights set by the Board of Directors, up to a balance not to exceed
35% of the outstanding common shares. As at December 31, 2022 and December 31, 2021, no preferred
shares have been issued. In 2021, transaction costs of $18 directly attributable to the issuance of common
shares for the acquisition of Dagmar were recognized as a deduction from shareholders' capital (note 7).
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
125
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
Balance, beginning of period
Common shares issued (note 7)
Balance, end of period
26. Earnings per share
Net income
2022
Number of
shares
53,695,293 $
—
53,695,293 $
2021
Amount
114,584
—
114,584
Number of shares
53,038,929 $
656,364
53,695,293 $
Amount
108,064
6,520
114,584
2022
$
49,863 $
2021
42,783
Weighted average number of common shares
(basic and diluted)
53,695,293
53,258,316
Basic and diluted earnings per share
$
0.93 $
0.80
27. Finance and other income
Interest income on lease receivables
Gain on settlement of trade accounts receivable
Other interest income
Gain (loss) on warrants
$
$
2022
151 $
7,596
3,497
(903)
10,341 $
2021
183
—
1,139
—
1,322
During the quarter ended June 30, 2022, in connection with the settlement of historical construction billings
and interest charges with a customer, the Company recorded a gain of $7,596 and interest income of
$1,722. The construction billings were recorded and carried at fair value upon the acquisition of Stuart
Olson in 2020, and interest income includes the reversal of expected credit losses recorded against interest
accrued subsequent to the acquisition. In connection with the settlement, the Company received warrants
which were classified as a derivative financial instrument measured at fair value, with subsequent changes in
fair value recognized through profit and loss in finance and other income.
28. Finance and other costs
Interest on loans and borrowings
Interest on ROU liabilities
Other
$
$
2022
6,189 $
2,805
824
9,818 $
2021
3,785
2,937
828
7,550
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
126
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
29. Personnel costs
Short-term employee benefits
Defined benefit and defined contribution plan expense (note 23)
Deferred compensation (note 24)
$
$
2022
667,032 $
1,872
4,324
673,228 $
2021
644,463
970
13,543
658,976
For the year ended December 31, 2022, personnel costs of $594,518 were included in costs of construction
(2021 – $577,845) and $78,710 in general and administrative expenses (2021 – $81,131). Short-term
employee benefits consist primarily of salaries and bonuses, as well as employee share purchase plan
(“ESPP”) expense and employee registered retirement savings plan (“RRSP”) matching contributions.
Deferred compensation consists of share-based compensation expenses.
30. Government assistance
On April 11, 2020, the Government of Canada passed the Canadian Emergency Wage Subsidy to support a
company’s ability to continue employing its workforce in the face of revenue declines because of the
COVID-19 pandemic. During the year ended December 31, 2022, the Company recognized a recovery of
compensation expense in costs of construction of $nil (2021 – $18,798) and general and administrative
expenses of $nil (2021 – $3,141).
31. Other cash flow information
Changes in non-cash working capital relating to operating activities
Accounts receivable
Contract assets
Contract assets – alternative finance projects
Inventory and prepaid expenses
Other assets
Accounts payable
Contract liabilities
Provisions
Deferred compensation plan expense and other
2022
$
(111,409) $
(989)
—
(979)
(92)
58,349
16,671
(8,773)
(12,095)
$
(59,317) $
2021
(60,944)
4,132
113
(1,294)
53
21,444
7,768
(253)
(2,554)
(31,535)
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
127
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
Change in liabilities arising from financing activities
Balance, December 31, 2021
$
1,745
$
78,681
$
79,358
$
2022
Dividend
payable
Loans and
borrowings
ROU
liabilities
Cash flows
Proceeds
Repayments
Dividends paid on shares
Non-cash changes
Net additions to ROU liabilities
Interest accretion
Dividends declared
—
—
(20,941)
—
—
20,941
52,776
(56,366)
—
—
—
—
—
(22,552)
—
13,648
2,805
—
Total
159,784
52,776
(78,918)
(20,941)
13,648
2,805
20,941
Balance, December 31, 2022
$
1,745
$
75,091
$
73,259
$
150,095
Balance, December 31, 2020
$
1,724
$
72,913
$
78,075
$
2021
Dividend
payable
Loans and
borrowings
ROU
liabilities
Acquisition (note 7)
Cash flows
Proceeds
Repayments
Dividends paid on shares
Non-cash changes
Net additions to ROU liabilities
Interest accretion
Dividends declared
—
—
—
(20,749)
—
—
20,770
—
5,489
58,600
(52,832)
—
—
—
—
—
(22,202)
—
15,059
2,937
—
Total
152,712
5,489
58,600
(75,034)
(20,749)
15,059
2,937
20,770
Balance, December 31, 2021
$
1,745
$
78,681
$
79,358
$
159,784
32. Financial instruments
Carrying values and fair values
Determination of fair value and the resulting hierarchy requires the use of observable market data whenever
available. The classification of a financial instrument in the hierarchy is based upon the lowest level of input
that is significant to the measurement of fair value.
The hierarchy of inputs is summarized below:
i. Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;
ii. Level 2 - inputs other than quoted prices included in level 1 that are observable for the asset or
liability, either directly or indirectly; and
iii. Level 3 - inputs used in a valuation technique are not based on observable market data in
determining fair values of the instruments.
The Company’s foreign currency forward contract, interest rate swaps, TRS derivative contracts (note 11)
and warrants are classified as Level 2 measurements in the fair value hierarchy. The Company does not
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
128
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
have any financial instruments classified as Level 3 that are carried at fair value. There were no transfers
between levels in the fair value hierarchy during the years ended ended December 31, 2022 and 2021.
The fair value of the Company’s loans and borrowings approximate their carrying values on a discounted
cash flow basis as the majority of these obligations bear interest at market rates. The fair values of the
remaining financial instruments approximate their carrying value due to their relatively short periods to
maturity.
Financial risk management
In the normal course of business, the Company is exposed to several risks related to financial instruments
that can affect its operating performance. These risks and the actions taken to manage them are as follows:
i. Credit risk
Credit risk relates to the risk of financial loss to the Company if a customer or counterparty to a
financial instrument fails to meet their contractual obligation.
With respect to accounts receivable, concentration of credit risk is limited due to the geographic
dispersion of revenues and a diversified customer base. Before entering into any construction
contract and during the course of the construction project, the Company satisfies itself that the
customer has adequate resources to fulfil its contractual payment obligations as construction work is
completed. If a customer was unable or unwilling to pay the amount owing, the Company will
generally have a right to register a lien against the project that will normally provide some security
that the amount owed would be realized.
For the year ended December 31, 2022, no customer accounted for 10% or more of contract revenue
(2021 - one customer representing revenue of $323,648). Although large projects may occasionally
result in individual customers being significant, credit risk is mitigated through regular progress
billings and other contract security.
Short-term deposits and short-term investments are subject to minimal credit risk as they are placed
with only major Canadian financial institutions. As is reasonably practical, these investments are
placed with several different Canadian financial institutions, thereby reducing the Company’s
exposure to a default by any one financial institution.
At December 31, 2022, accounts receivable outstanding for greater than 90 days and considered past
due by the Company represent 16.6% (December 31, 2021 – 14.8%) of the balance of progress billings
on construction contracts receivable. The Company has recorded an allowance of $1,632
(December 31, 2021 – $1,527) against these past due receivables, net of amounts recoverable from
others.
Trade receivables
Impairment
Total Trade receivables
ii. Liquidity risk
Amounts past due
Up to 12
months
Over 12
months
25,625
$
50,673
$
(62)
(1,570)
2022
76,298
(1,632)
$
2021
61,207
(1,527)
25,563
$
49,103
$
74,666
$
59,680
$
$
Liquidity risk relates to the risk that the Company will not be able to meet its financial obligations as
they become due. The Company manages this risk through management of its capital structure,
monitoring and reviewing actual and forecasted cash flows and the effect on bank covenants, and
maintaining unused credit facilities where possible to ensure there are available cash resources to
meet the Company’s liquidity needs. In managing liquidity risk, the Company has access to
committed short and long-term debt facilities as well as equity markets, the availability of which is
dependent on market conditions.
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
129
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
The Company has working capital of $184,632 (December 31, 2021 – $151,810) which is available to
support surety requirements related to construction projects. Working capital is calculated as total
current assets less total current liabilities. As a component of working capital, the Company maintains
significant balances of cash and cash equivalents. These balances, less $90 hypothecated to support
outstanding letters of credit and $62,884 held in restricted trust accounts, are available to meet the
general financial obligations of the Company as they become due. Restricted cash in trust is held in
segregated accounts for payment obligations on certain projects. Refer to note 18 in respect of the
Syndicated facility and the Company’s other debt instruments, which further improves the Company’s
access to liquidity. At December 31, 2022, the Company had a total undrawn balance on its
committed revolving credit facility and committed non-revolving term loan facility of $171,963
(December 31, 2021 – $140,286). Also, the Company has a non-committed accordion of up to an
additional $50,000 to increase the limit of the committed revolving credit facility and the committed
non-revolving term debt facility. The Company also has committed term credit facilities of up to
$40,000 to be used to finance equipment purchases of which $37,943 is undrawn as at December 31,
2022 (December 31, 2021 – $34,758). The Company believes that it has access to sufficient funding
through the use of these facilities and its cash and cash equivalents to meet its foreseeable operating
requirements.
The following are the contractual obligations, including estimated interest payments, as at
December 31, 2022, in respect of the financial obligations of the Company. Interest payments on the
committed revolving credit facility and committed non-revolving term loan facility are not included in
the table below since they are subject to variability based upon outstanding balances at various
points throughout the period.
Carrying
amount
Contractual
cash flows
Not later
than 1
year
2 – 3
years
4 – 5
years
Later
than 5
years
Trade payables
Dividends payable
ROU liabilities
Committed revolving credit
facility
Committed non-revolving
term loan
Equipment financing
Acquisition holdback and
other liability (note 7)
iii. Market risk
$ 573,224 $ 573,224 $ 538,577 $ 33,343 $ 1,304 $
1,745
73,259
22,725
1,745
82,893
22,725
1,745
—
—
20,026
31,377
16,890
14,600
—
22,725
—
—
47,500
47,500
5,000
42,500
4,866
1,000
5,182
1,000
2,229
1,000
2,193
—
—
—
760
—
—
—
—
—
$ 724,319 $ 734,269 $ 568,577 $ 132,138 $ 18,954 $ 14,600
Market risk is the risk that changes in market prices, such as interest rates, equity prices and corporate
bond yields, will affect the Company’s income or the value of its holdings in liquid securities. The
discount rate used to establish the pension obligation was determined by reference to market interest
rates on AA-rated corporate bonds with cash flows that approximate the timing and amount of
expected benefit payments.
The interest rate profile of the Company's loans and borrowings was as follows:
Fixed-rate facilities
Variable-rate facilities
Total loans and borrowings
$
$
2022
4,866 $
70,225
75,091 $
2021
6,581
72,100
78,681
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
130
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The Company is exposed to interest rate risk to the
extent that its credit facilities and TRS derivatives are based on variable rates of interest.
At December 31, 2022, a one percent change in the interest rate applied to the Company's variable
rate long-term debt would change annual income before income taxes by approximately $702 (2021 –
$721).
The Company has certain share-based compensation plans, where the values are based on the
common share price of the Company. The Company has fixed a portion of the settlement costs of
these plans by entering into various TRS derivative contracts maturing in 2023. The TRS derivatives are
not designated as a hedge. The change in the value of the TRS derivatives is recorded each quarter
based on the difference between the fixed price and the market price of the Company’s common
shares at the end of each quarter. The TRS derivatives are classified as derivative financial instruments.
At December 31, 2022, a 10 percent change in the share price applied to the Company's TRS
derivatives would change income before income taxes by approximately $1,640 (2021 – $1,502).
iv. Currency risk
Currency risk is the risk that fluctuations in currency exchange rates will affect the Company’s net
income. The Company uses foreign currency to settle payments to vendors and subcontractors in the
foreign currency. Foreign currency risk is managed by the Company through the use of foreign
currency derivatives. At December 31, 2022, a 10 percent movement in the Canadian and U.S. dollar
exchange rate would have changed income before income taxes by approximately $233 (2021 – $246).
33. Capital management
The Company’s capital management objectives are to:
i. ensure that the Company has the financial capacity and liquidity to achieve its strategic objectives and
support its current and anticipated volume and mix of business consistent with the risk tolerance of
the Company;
ii. have the financial flexibility to absorb the seasonality and cyclicality of the Company's operations and
the construction industry, as well as unforeseen events with an appropriate level of investment in
working capital and available committed credit capacity;
iii. pursue a balanced capital allocation strategy that will deliver superior shareholder value;
iv. generate sufficient cash flow to maintain and grow the dividend in a consistent and sustainable way as
determined by the Board of Directors; and
v. provide investors with maximum risk-adjusted long-term returns on equity.
In the management of capital, the Company defines capital as the aggregate of its shareholders’ equity and
non-current loans and borrowings.
The Company manages its capital within the capital management policy approved by the Board of
Directors. The Company adjusts its capital structure in light of changes in economic conditions. In order to
maintain or adjust its capital structure, the Company may issue new debt or repay existing debt, issue share
capital, issue convertible debt, adjust capital expenditures, or may adjust the amount of dividends paid to
shareholders. Financing decisions are generally made on a specific transaction basis and depend on such
things as the Company’s needs, capital markets and economic conditions at the time of the transaction.
The Company monitors its capital on a number of bases; the amounts of working capital, non-current loans
and borrowings and shareholders’ equity are as follows:
Working capital
Loans and borrowings – non current
Shareholders’ equity
2022
184,632 $
68,007 $
272,988 $
$
$
$
2021
151,810
71,211
243,488
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
131
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
34. Commitments and contingencies
Commitments
Outstanding surety lien bonds issued on behalf of the Company in connection with liens by subcontractors
and suppliers at December 31, 2022 totalled $87,787 (December 31, 2021 – $93,135). The Company has
acquired minority equity interests in a number of PPP concession entities (note 13), which require the
Company to make $1,816 in future capital injections. These commitments have been secured by letters of
credit totalling $1,816 (December 31, 2021 – $1,816).
During the year ended December 31, 2022, the Company signed orders with a fleet management provider
for leases totalling $3,434 that have not been recognized in the statement of financial position. The leases
are expected to commence and be recognized in the statement of financial position within the next 12
months.
At December 31, 2022, the Company has minimum payments under contracts for other purchase
obligations that are not recognized as liabilities in the statement of financial position of $4,760 due within
the next 12 months, $10,680 from 1 to 3 years, $5,697 from 3 to 5 years, and $1,725 thereafter.
Contingencies
The Company is contingently liable for the usual contractor’s obligations relating to performance and
completion of construction contracts. These include the Company’s contingent liability for the performance
obligations of its subcontractors. Where possible and appropriate, the Company obtains performance
bonds, subcontract/supplier insurance or alternative security from subcontractors. However, where this is
not possible, the Company is exposed to the risk that subcontractors will fail to meet their performance
obligations. In that eventuality, the Company would be obliged to complete the subcontractor’s contract,
generally by engaging another subcontractor, and the cost of completing the work could exceed the
original subcontract price. The Company makes appropriate provision in the financial statements for all
known liabilities relating to subcontractor defaults.
35. Related party transactions
Balances and transactions between the Company and its subsidiaries, which are related parties, have been
eliminated on consolidation. Each of the related party transactions described below was made on terms
equivalent to those that prevail in arm’s length transactions unless otherwise noted.
Compensation of key management personnel represents the aggregate amounts paid and accrued to the
Company’s key management personnel and the Company’s Board of Directors.
Short-term benefits
Share-based compensation
$
$
2022
5,889 $
2,319
8,208 $
2021
6,615
7,059
13,674
A Director or related parties hold positions in other entities that result in them having control over the
financial reporting or operating policies of those entities. The aggregate value of transactions during the
year with entities over which Directors have control was $1,037 (2021 - $1,030) and the outstanding balance
receivable at December 31, 2022 was $571 (December 31, 2021 - $2).
Transactions with proportionally consolidated joint arrangements
The Company provides services of its employees, management services, cost reimbursements, parental
guarantees and letters of credit to the joint arrangements. These services were transferred at the exchange
amount, agreed to between the parties. The amounts recognized for services provided by the Company for
the year ended December 31, 2021 totalled $34,979 (2021 - $45,632).
The Company has accounts receivable from the joint arrangements at December 31, 2022 totalling $5,017
(December 31, 2021 - $706).
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
132
Bird Construction Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2022 and 2021
(in thousands of Canadian dollars, except per share amounts)
Transactions with equity accounted joint arrangements
The Company and its proportionately consolidated joint arrangements (note 4), provide development and
construction services to its concession investments in associates and joint ventures which are in the normal
course of business and on commercial terms. The Company’s proportionate share of the amounts billed for
construction services provided by these joint arrangements for the year ended December 31, 2022 totalled
$57,607 (2021 – $26,696), of which $53,093 has been recognized in revenue in 2022 (2021 - $15,077). The
Company’s proportionate share of payments made to the joint arrangements for the year ended
December 31, 2022 totalled $580 (2021 - $17,548). These amounts are not eliminated as they are deemed to
be realized by the Company.
The Company and its proportionately consolidated joint arrangements have accounts receivable from these
investment entities. The Company’s proportionate share of accounts receivable at
concession
December 31, 2022 totalled $24,378 (December 31, 2021 - $12,423).
36. Subsequent events
Eligible dividends declared with a record date subsequent to the financial statement date:
As of the date of the approval of these financial statements, the Board of Directors has declared eligible
dividends with a record date subsequent to the date of the financial statements, for the following months:
Eligible dividends declared
January dividend
February dividend
March dividend
April dividend
Record date
January 31, 2023
February 28, 2023
March 31, 2023
April 28, 2023
Payment date
February 17, 2023
March 20, 2023
April 20, 2023
May 19, 2023
Dividend per share
$0.0325
$0.0325
$0.0358
$0.0358
Subsequent acquisition:
Subsequent to the year ended December 31, 2022, the Company acquired a telecommunication and
infrastructure utility contractor based in Ontario on February 1, 2023. The total consideration for the
transaction was $6,800, subject to customary closing adjustments, which was funded through a combination
of cash, the Company's common shares and a holdback liability.
BIRD CONSTRUCTION INC.
ANNUAL 2022 CONSOLIDATED FINANCIAL STATEMENTS
133
2022 ANNUAL REPORT for the year ended December 31, 2021
CORPORATE OFFICES
Mississauga
5700 Explorer Drive,
Suite 400
Mississauga, ON L4W 0C6
Calgary
4820 Richard Road SW
Suite 600
Calgary, AB T3E 6L1
DIRECTORS
SENIOR LEADERSHIP
J. Richard Bird, Ph.D., MBA
Calgary, AB
Karyn A. Brooks, FCPA, FCA (1)
Calgary, AB
Oakville, ON
Paul A. Charette
Bonnie D. DuPont, AOE., M.Ed., F.ICD.D (2)
Calgary, AB
Kansas City, MO
Steven L. Edwards
Los Gatos, CA
J. Kim Fennell
Calgary, AB
Jennifer Koury, ICD.D
Canmore, AB
Teri L. McKibbon
Saskatoon, SK
Gary Merasty
Luc J. Messier, P.Eng.(3)
Houston, TX
Paul R. Raboud, P.Eng., MSc, MBA (Chair), ICD.D Toronto, ON
Arni C. Thorsteinson, C.F.A., D.M., LLD
Winnipeg, MB
(1) Audit Committee Chair
(2) Human Resources & Governance Committee Chair
(3) Health, Safety & Environment Committee Chair
Teri L. McKibbon
Wayne R. Gingrich, CPA, CMA, ICD.D
Gilles G. Royer, P.Eng.
Charles J. Caza, BA. Sc. Eng., LL.B.
Brian C. Henry
Rick Begg
Peter Lineen
J. Paul Bergman, CET
Rob Otway, P.Eng., GSC, ICD.D
Tannis Proulx, P.Eng.
David Keep
Denis Bigioni
Frank DeLuca, P.Eng.
Arthur Krehut
Paul Pastirik, CPA, MBA
President & Chief Executive Officer
Chief Financial Officer & Treasurer
Chief Operating Officer
Executive Vice President & Chief Legal Officer
Chief People Officer
Chief Information Officer
Executive Vice President, Health,
Safety & Environment
Executive Vice President, Buildings East
Executive Vice President, Buildings West
Executive Vice President, Industrial Construction
Executive Vice President, MRO and
Commercial Systems
President, Dagmar Construction Inc.
Senior Vice President, Client Solutions
Senior Vice President, Operational Services
Senior Vice President, Strategic Development
AUDITORS
KPMG LLP
LEAD BANK
Bank of
Montreal
SURETY
Travelers
Guarantee
Company of
Canada
STOCK
EXCHANGE
LISTING
Toronto Stock
Exchange
(Symbol “BDT”)
TRANSFER
AGENT
AND REGISTRAR
Computershare
Investor Services
WEBSITE
www.bird.ca
134
ANNUAL REPORT 2022 BIRD CONSTRUCTION INC. LOCATIONS FROM COAST TO COAST
CORPORATE OFFICES
Mississauga
5700 Explorer Drive,
Suite 400
Mississauga, ON L4W 0C6
T: 905.602.4122
Calgary
4820 Richard Road SW
Suite 600
Calgary, AB T3E 6L1
T: 403.685.7777
BRITISH COLUMBIA
Kelowna
Suite 200, 1626 Richter Street
Kelowna, BC V1Y 2M3
T: 236.361.0477
Vancouver
#300 – 13777 Commerce
Parkway Richmond, BC V6V 2X3
T: 604.271.4600
F: 604.271.1850
ALBERTA
Edmonton
17007 - 107 Avenue NW
Edmonton, AB T5S 1G3
T: 780.452.8770
F: 780.455.2807
Edmonton
201 2627 Ellwood Drive
SW Edmonton, AB T6X 0P7
Industrial T: 780.481.9600
Buildings T: 780.452.4260
Calgary
Suite 350, 1200 - 59th
Avenue SE,
Calgary, AB T2H 2M4
T: 403.319.0470
F: 403.319.0476
SASKATCHEWAN
Regina
#1, 134 Husum Road
Regina, SK, S4K 0A4
PO Box 26088
T: 306.565.3120
MANITOBA
Winnipeg
1055 Erin Street,
Winnipeg, MB R3G 2X1
T: 204.775.7141
F: 204.783.8119
ONTARIO
Toronto
5700 Explorer Drive,
Suite 400
Mississauga, ON L4W 0C6
T: 905.602.4122
F: 905.602.6319
Ottawa
900 Morrison Drive,
Suite 206,
Ottawa, ON, K2H 8K7
T: 613-912-7738
Sudbury
670 Falconbridge Road, Unit 1
Sudbury, ON P3A 4S4
T: 705.222.4848
Thunder Bay
946 Cobalt Crescent, Unit 1
Thunder Bay, ON P7B 5W3
T: 807.768.9753
QUEBEC
Montreal
1868 Boul. Des Sources,
Suite 200
Pointe-Claire, QC H9R 5R2
T: 514.426.1333
F: 514.426.1339
NEW BRUNSWICK
Saint John
120 Millenium Drive,
Quispamsis, NB E2E 0C6
T: 506.849.2473
F: 506.847.0270
NOVA SCOTIA
Halifax
20 Duke Street, Suite 201
Bedford, NS B4A 2Z5
T: 902.835.8205
F: 902.835.8245
NEWFOUNDLAND
AND LABRADOR
St. John’s
90 O’Leary Ave, Suite 101
St. John’s, NL A1B 2C7
T: 709.726.9095
F: 709.726.9106
Wabush
2 Old Airport Road,
Wabush, NL A0R 1B0
T: 709.282.5633
F: 709.282.3500
135
BIRD CONSTRUCTION INC. ANNUAL REPORT 2022 ANNUAL REPORT 2022
Bird Construction Inc.
5700 Explorer Drive, Suite 400
Mississauga, ON L4W 0C6
Tel: (905) 602-4122
www.bird.ca