News Releases

CALGARY, ALBERTA - May 5, 2015 /CNW/ - Newalta Corporation ("Newalta") (TSX:NAL) today reported results for the three months ended March 31, 2015 and introduced its five year-strategic plan to enhance growth, performance and corporate velocity as a pure play environmental energy services company.

FINANCIAL HIGHLIGHTS(1)

		Three months ended March 31,
($000s except per share data)  (unaudited)		2015		2014		% Change
Continuing Operations(2)
Revenue		97,579		110,437		(12)
Divisional EBITDA(3)		26,824		40,728		(34)
	% of Revenue	27%		37%		(25)
Net (loss) earnings from Continuing Operations(4)		(23,264)		8,724		n/m
	- per share ($) basic	(0.41)		0.16		n/m
	- per share ($) diluted	(0.41)		0.15		n/m
Adjusted net (loss) earnings(4)		(4,882)		7,545		(165)
	- per share ($) basic adjusted(4)	(0.09)		0.14		(164)
Adjusted EBITDA(4)		12,894		25,008		(48)
	- per share(4)	0.23		0.45		(49)
Cash from Continuing Operations		(15,232)		27,380		(156)
	- per share ($)	(0.27)		0.49		(155)
Funds from operations(4)		3,486		21,509		(84)
	- per share ($)(4)	0.06		0.39		(84)
Maintenance capital expenditures(4)		2,332		2,933		(20)
Growth capital expenditures(4)		32,394		20,909		55
Dividends declared		7,025		6,128		15
	- per share ($)(4)	0.125		0.11		13
Dividends paid		5,724		4,459		28
Weighted average Shares outstanding		56,179		55,518		1
Shares outstanding, March 31,(5)		56,210		55,710		1
Combined Operations(2)
Revenue		139,687		187,780		(26)
Net (loss) earnings		(27,741)		6,503		n/m
	- per share ($) basic	(0.49)		0.12		n/m
	- per share ($) diluted	(0.49)		0.12		n/m
Cash (used in)from Operating Activities		(36,501)		11,637		n/m
	- per share ($) basic	(0.65)		0.21		n/m

(1)	Newalta's unaudited Condensed Consolidated Financial Statements are attached. References to Generally Accepted Accounting Principles (GAAP) are synonymous with IFRS and references to unaudited Condensed Consolidated Financial Statements are synonymous with Financial Statements.
(2)	On February 27, 2015, we completed the sale of our Industrial Division to Revolution. As a result, we have defined our Industrial Division as "Discontinued Operations", the remaining operations as "Continuing Operations" and the total Discontinued Operations and Continuing Operations as "Combined Operations". In accordance with the requirements of IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, income and expenses and cash flow provided and used associated with the business to be sold have been classified as Discontinued Operations in our Financial Statements for the periods presented.
(3)	As a result of the change in our financial statement presentation from functional to nature based, we have reclassified the sales expense directly attributable to the divisions from Corporate and Other to the respective division. Prior period comparative figures have been amended to conform to current period's presentation. Please refer to "Reporting Structure" below for the restated the historical segmented information and key metrics.
(4)	These financial measures do not have any standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other issuers. Non-GAAP financial measures are identified and defined throughout this document.
(5)	Newalta has 56,236,548 Shares outstanding as at May 5, 2015.

MANAGEMENT COMMENTARY

First Quarter Results

"Performance in Q1 2015, while down significantly, was in line with our expectations and tracked our previously disclosed sensitivities to oil price and drilling activity," said John Barkhouse, President and CEO. "Q1 revenue and Adjusted EBITDA decreased 12% and 48%, respectively, compared to prior year, driven primarily by the $40 drop in oil prices and 40% decline in drilling activity. Cost savings measures taken early in the quarter, and 6% growth in onsite contract revenue somewhat mitigated the impact of reduced market activity."

Newalta responded to the steep decline in crude oil prices and drilling activity by cutting expenses and streamlining overhead in the first quarter and taking follow-on actions early in the second quarter, which in aggregate save approximately $30 million on an annualized basis. While the magnitude of the current downturn is expected to continue to impact results for the remainder of 2015, we will see significant improvements in the second half of the year driven by contributions from our oil sands mining contracts, commissioned growth capital and run rate savings from implemented cost rationalizations. Of particular importance, Newalta's performance in the second half of 2015 and the resulting run rate improvements are not predicated on any anticipated recovery in oil pricing or drilling activity over the Q1 baseline, reaffirming the strength of our business model.

"We continue to remain focused on protecting the balance sheet in this uncertain time; however, we are pleased with the impact we have had on the elements of the business we control, and our overall resilience. Managing our costs, continuing to gain efficiencies throughout the organization, protecting our balance sheet, and working with our customers and suppliers to develop solutions and reduce total value chain costs are key imperatives. We have a strong core foundation to build upon as we turn our attention to the longer term strategic horizon."

Vision and Strategy

Today, Newalta introduced its new five-year vision, along with specified growth strategies and financial objectives (outlined below). Our plan considers the current volatility in the energy sector and assumes recovery in activity and crude oil prices over the next two to three years.

"Our Vision 2020 plan is detailed, realistic and immediately actionable," said Mr. Barkhouse. "For our customers, it means Newalta will simplify the sustainability equation and enhance the recovery of value from waste at each stage of drilling, completions, production and reclamation through a business approach that we call Sustainability Simplified™. For fellow shareholders, it means enhanced performance with emphasis on improving our scale and operating footprint geographically, growing our onsite business and contracts and leveraging our core capabilities to add differentiated services. The time is right for us to employ this framework to make Newalta the North American leader in environmental energy services and to drive accelerated progress and shareholder value."

Specific financial targets over the five-year period include:

• growing revenue in excess of $2 billion by 2020 through a combination of organic and inorganic initiatives;
• increasing revenue and Adjusted EBITDA at a compound annual growth rate in excess of 20% from 2014 to 2020;
• moving general and administrative expenses (G&A) to between 7% and 9% of revenue; and,
• targeting long-term debt leverage of between 2.0 and 2.5.

Change in Divisional Reporting Structure

In Q1 2015, we reorganized into two divisions - Heavy Oil and Oilfield. This structure more closely aligns operations with customer activities, facilitates a seamless service package to customers, optimizes our resource allocations, and aids in the execution of our growth strategies.

Heavy Oil

• Heavy Oil Facilities business unit
• Onsite business unit

Oilfield

• Oilfield Facilities business unit (includes facilities in both Canada and the U.S.)
• Drilling Services business unit (includes drill site services in both Canada and the U.S.)

Please refer to "Reporting Structure" below for restated historical segmented information and key metrics.

CORPORATE OVERVIEW

In Q1, we completed the sale of the Industrial Division to Revolution Acquisition LP and transitioned to a pure play environmental energy services company. Net loss from Combined Operations for the quarter was $27.7 million compared to net earnings of $6.5 million in the prior year. The decrease in earnings was driven by lower contributions from both Continuing and Discontinued Operations, and restructuring and other related costs.

Continuing Operations

Q1 revenue and Adjusted EBITDA decreased 12% and 48%, respectively, to $97.6 million and $12.9 million compared to prior year. Performance in the first quarter of 2015 was significantly impacted by the challenging environment, in line with previous guidance. The year-over-year decline of $12.1 million in Adjusted EBITDA was driven equally by crude oil prices and drilling activity declines (approximately $7 million each). Crude oil prices decreased by over $40/bbl while drilling activity in the areas we serve decreased more than 40% over prior year.

The severity of the drop in oil prices and activity levels resulted in reduced waste volumes at our facilities, changes in waste mix and pricing pressure across our business units. This was partially offset by improved performance across our business, specifically our contract revenue and returns from growth capital. Our contract revenue increased 6% year-over-year, and continued to demonstrate resiliency at the margin line. The combination of these factors, which we refer to as step change, had a net negative impact on the quarter of approximately $1 million.

To date, our contract model has performed well during this downturn, continuing to provide steady, predictable cash flow. These contracts are not tied directly to commodity price changes or drilling activity and provide a solid foundation for our business, particularly in depressed markets. During the quarter, growth in contract revenue was driven primarily by mature fine tailings (MFT) contracts. On a trailing-twelve month basis, contracts represented 26% of revenue.

Efficiencies of approximately $3 million realized from our cost rationalization initiatives implemented in February 2015 had a positive impact in the quarter.

In February, we announced a number of cost reduction and rationalization initiatives to maximize business efficiencies and drive improved margins. Actions taken included eliminating 180 positions, office space consolidation and general reductions in all expense categories including discretionary items. In addition to the overhead reductions, we announced the suspension of company-matching payments to the employee savings plans and implemented hiring and salary freezes. During the quarter, we incurred $18.4 million in restructuring and other related costs, including $8.5 million in cash charges primarily for severance and related costs, and $9.9 million in non-cash onerous lease charges for corporate office consolidation.

Heavy Oil revenue and Divisional EBITDA in the quarter decreased by 4% and 29%, respectively, to $38.4 million and $11.6 million compared to prior year. The decrease was driven by lower contributions from Heavy Oil Facilities, partially offset by increased contributions from Onsite.

Oilfield revenue and Divisional EBITDA in the quarter decreased 16% and 38%, respectively, to $59.2 million and $15.2 million, driven by lower contributions from Oilfield Facilities due to weaker crude oil prices, drilling activity and reduced production-driven waste volumes at our Canadian Facilities.

Capital expenditures from Continuing Operations for the three months ended March 31, 2015 were $34.7 million, focused primarily on the completion of modular processing facilities, the Fort McMurray facility and an additional drill cuttings treatment unit.

At March 31, 2015, Total Debt was $282.9 million, reduced by $189.3 million from December 31, 2014. In addition to normal course funds from operations flows, the change in debt reflects cash proceeds from the Industrial sale offset by payments for Q4 capital expenditures, divestiture transaction costs, one-time restructuring charges and dividend payments.

Discontinued Operations

Q1 2015 revenue and net loss before loss on sale were $42.1 million and $10.1 million, respectively, compared to $77.3 million and $2.9 million in prior year. The decrease in performance was driven by the timing of the sale in February, weaker performance across all business lines, and restructuring and other related charges. During the quarter, we recorded a net loss on sale of $3.2 million.

Recent Developments

On April 30th, we entered into an amended and restated credit agreement. We elected to decrease the borrowing amount under our Credit Facility from $280 million to $175 million. Other key changes to the Credit Facility include improved covenant thresholds, specifically the maximum Total Debt to Consolidated EBITDA ratio has been increased from 4:1 to 4.5:1, and the maximum Senior Secured Debt to Consolidated EBITDA ratio has been increased from 2.75:1 to 3:1. The revised terms of the Credit Facility provide increased financial flexibility in the current environment and facilitate the execution of our growth strategy.

In April 2015, we completed the second phase of the two-phase program initiated in February to maximize business efficiencies and drive improved margins. Actions taken in April 2015 included the elimination of an incremental 20 positions and further reductions across associated expense lines.

In aggregate, we expect to realize approximately $30 million in annualized ongoing savings from these actions with approximately $25 million in savings in 2015. Approximately 70% of the savings will be realized in corporate overhead, with the balance in operations. We expect to incur approximately $2 million in one-time restructuring and other related costs associated with our April 2015 actions, excluding any incremental non-cash charges associated with ongoing office space consolidation initiatives.

While we have completed the bulk of our cost rationalization initiatives, we continue to review opportunities for cost reduction and margin efficiencies across the organization.

We recently entered into a Memorandum of Understanding with a midstream provider to develop, on a joint venture basis, up to two full service oilfield waste processing facilities in the Western Canadian Sedimentary Basin (WCSB) over the next 18 months. A joint venture agreement was entered into for one commissioned modular processing facilities (MPF), which under this agreement will be expanded to include a full service offering to customers. Under this agreement, both parties contributed equal capital assets to the joint venture. We are excited about the opportunity of leveraging our respective expertise in serving our oil and gas customers by combining our safety and operational excellence with a counterparty having strong midstream expertise.

Dividends

In determining the dividend to be paid to our shareholders, the Board of Directors considers a number of factors, including: the forecasts for operating and financial results, maintenance and growth capital requirements, as well as market activity and conditions. After reviewing all factors, Newalta's Board of Directors declared a first quarter dividend of $0.125 per share ($0.50 per share annualized), paid April 15, 2015, to shareholders on record as at March 31, 2015.

The Board reviews dividends on a quarterly basis. In light of the current market environment and outlook, we will provide an update in the quarters ahead regarding any dividend changes as visibility of our market environment improves.

The following section contains forward-looking information as it outlines our Outlook for 2015. Our Outlook is based on several key assumptions including growth capital contributions, commodity prices and activity levels of the industries we serve. Changes to these assumptions could cause our actual results to differ materially.

OUTLOOK

In Q1, we experienced oil prices nearing 2009 lows and declines in drilling activity in excess of 40%. The magnitude of this downturn is expected to continue to impact our results for the balance of 2015. To date, results are in line with management expectations and previous guidance on sensitivities provided to the market in the last quarter. While we expect Q2 performance to remain relatively muted given existing oil price and activity assumptions, combined with seasonality of spring break-up in Canada's WCSB and in North Dakota, Adjusted EBITDA in the second half of 2015 is expected to increase significantly over the first half. The improvement in the second half of the year will be driven primarily by contributions from our growth capital investments and contracts, and the benefit from our cost rationalization. In Heavy Oil, contributions will improve from our mature fine tailings (MFT) contracts, the Silver Lake MPF and the full-service facility in Fort McMurray, which is expected to be commissioned in Q2. In Oilfield, growth will be driven by two new MPFs, Fox Creek and Gold Creek, anticipated to contribute in Q3. In addition, in the second half of 2015, we expect to realize approximately $15 million of year-over-year EBITDA impact from our cost rationalization actions taken in the first half of the year.

The following table outlines the factors we expect to impact performance in the second quarter and for the remainder of the year.

Factor			Assumption	Expected impact on Adjusted EBITDA compared to prior year period
	Q1 2015		Q2 and Full year	Q2 2015		2015
West Texas Intermediate(US$/bbl)	$48.55		$50 - $60
Canadian Light Sweet (CDN$/bbl)(1)	$52.48		$55 - $65	$3M - $5M decrease		$12M - $16M decrease
Western Canadian Select(CDN$/bbl)(1)	$42.11		$45-$55	$3M - $5M decrease		$12M - $16M decrease
Drilling activity(1) decline	~ 40%		45% - 55%	$6M - $7M decrease		$23M - $28M decrease
Step Change(2)	($1M)(3)			$6M - $9M decrease		$9M -$18M decrease
Savings from cost rationalization	$3 M		$30 million annualized	$6M -$8M increase		$25M increase

(1)	Impact derived from annual sensitivities based on 2014 performance and volumes outlined in the "Sensitivities" section on page 41 of the 2014 Annual Report. The actual impact from crude oil prices may vary with fluctuations in volumes.
(2)	This factor is expected to have an impact on our performance through the year, and cannot be quantified on any linear sensitivity.
(3)	M refers to millions.

Crude oil prices

• Lower crude oil prices directly impact the value of the products we recover from waste. We anticipate oil prices to remain depressed for the balance of 2015. The actual impact from crude oil prices may vary with fluctuations in recovered crude oil volumes.

Drilling Activity

• Since December 2014, drilling activity in the WCSB and the U.S. basins where we operate (Bakken, Eagleford, Marcellus) has declined more than 40%. We anticipate drilling activity to remain depressed for the balance of 2015, with a staged recovery in 2016 and 2017.

Step Change (Production waste volumes, shifts in waste mix, customer pricing reductions, offset by returns from growth capital and operational efficiencies)

• In Q1, the impact was predominately characterized by a change in the amount and nature of production-driven waste volumes received at our facilities and to a lesser extent pricing pressure. We expect this trend to continue for the remainder of the year. We are working with our customers to bundle opportunities, partner through contractual relationships, collaborate with our suppliers and reducing our operating cost structure to mitigate such impacts.
• In 2014, growth capital of $130 million was directed to our Heavy Oil and Oilfield Divisions. The severe decline in crude oil prices and activity is anticipated to reduce contributions from these investments in 2015.
• The impact of step change is expected to be more pronounced in Q2 than in the second half of 2015, reflecting the timing of both returns from our growth capital investments and contracts. We expect contributions from three new MPFs, the full-service Fort McMurray facility and a new Oilfield landfill in the second half of 2015.

Savings from Cost Rationalization

• We anticipate cost reduction and rationalization initiatives will drive approximately $30 million in annualized ongoing savings and $25 million in 2015. In addition to the actions announced in February 2015, we have undertaken further office consolidation and identified additional savings in overhead that will result in incremental ongoing savings. We have implemented the bulk of these savings initiatives.

Net Debt and Leverage

We have a resilient business model and a strong balance sheet to weather the volatile market. Management of our debt leverage and optimal use of our cash and capital are of the highest priority. We will remain well within our debt covenants throughout 2015. Given our assumptions for reduced oil prices and drilling activity for the remainder of the year, we anticipate our Net Debt leverage to increase beyond 3.00, ending 2015 below 3.50.

Capital Forecast

We have reviewed our capital spend in light of market conditions and plan to spend approximately $80 million for the year, below our budget of $105 million. Our primary focus will be to complete our carry-over projects and we will continue to fund contract opportunities as they arise. We have the financial flexibility to increase our capital spending as market conditions improve.

Outlook beyond 2015

Performance in the second half of 2015, and resulting run rate improvements to Adjusted EBITDA are not predicated on any recovery in oil pricing or drilling activity over our Q1 performance baseline, underscoring the strength of our business model. Extending the second half run rate improvements into 2016 with oil remaining at US$50 WTI and drilling activity down approximately 50% from 2014 levels, Adjusted EBITDA in 2016 would approximate $120 million. Assuming oil pricing improves somewhat to US$60 WTI, and we see some modest recovery in activity, Adjusted EBITDA would be expected to approximate closer to $140 million, further demonstrating torque in our business model. And for additional context, this is set against the expectation of Adjusted EBITDA in excess of $170 million in a normalized US$70 to $75 WTI oil price environment with improved activity levels.

NEWALTA'S STRATEGY - VISION 2020

Under new leadership from John Barkhouse, President and CEO, we have refreshed our five-year growth strategy. This strategy leverages our core competencies with emphasis on increasing the pace of business activity, driving improved returns from our investments and growing profitable revenue streams both organically and through accretive acquisitions. Over the next five years, we will focus on growing our onsite capabilities, leveraging our satellite MPF model, expanding our presence in the U.S. and Canada, and on commercializing innovative solutions. Our five-year plan considers the current volatility in the energy sector and assumes recovery in activity and crude oil prices over the next two to three years.

WHO WE ARE

Newalta is a leading provider of innovative engineered environmental solutions that enable customers to reduce disposal, enhance recycling and recover valuable resources from oil and gas exploration and production waste streams. We simplify the critical challenges of sustainable environmental practices through the use of advanced processing capabilities deployed through a differentiated business model. We serve customers onsite directly at their operations and through a network of locations throughout North America. Our proven processes and excellent record of safety make us the first-choice provider of sustainability-enhancing services for oil and gas customers. With a highly skilled team of people, a two-decade track record of innovation and a commitment to commercializing new solutions, Newalta is positioned for sustained future growth and improvement. We are Sustainability Simplified™.

Differentiated Value Creation

Newalta applies a processing and recovery focus to the complex waste streams generated from exploration, drilling, completions and production phases of the oil and gas industry. We utilize processing to extract recoverable value from the waste generated, and seek to reduce, and where possible, eliminate the reintroduction of those wastes into disposal wells and landfills.

Customer value is created through the recovery of oil from generated waste, which otherwise would be stabilized and shipped to landfills. In addition to enhancing the production of oil, we reduce the volume of solids deposited in landfills, minimize the volume of water being injected into disposal wells, lower transportation costs and provide reliability in the management and tracking of these elements of the waste stream. Everything we do simplifies the sustainability equation for our customers, our communities and our families. We are not a paragraph in a producer's sustainability report; we are a solutions provider delivering value and protecting our environment. To put this in context, we recover in excess of two million barrels of oil a year through processing, reducing the volume sent to landfill and disposal wells.

We differentiate ourselves from our peers with our core competencies of designing, building and operating advanced processing equipment to recover value from complex waste streams. We have salt water disposal wells, and some landfills where it creates value to our customers in providing a cradle to grave solution to their waste streams; however, first and foremost we seek to reduce, reuse and recycle through processing. This sets us apart from our industry sector peers, many of whom focus on disposal as their core competency.

It is difficult to replicate our model, because it is technology, innovation, engineering and operations driven, underscored by an established safety excellence record. These demonstrated core competencies have been pioneered and developed over the last two decades and provide a foundation for Newalta to be a solutions source for our customers, and, along with the capital intensive nature of the market, provide a significant barrier to entry in the market.

Newalta's Top Five Differentiators

1. Onsite Processing: Through the deployment of onsite solutions we have demonstrated to our customers the economic and environmental merits of moving our people and equipment inside the customer's fence lines. We have proven ourselves to be first mover with onsite steam assisted gravity drainage (SAGD) capabilities and onsite mature fine tailings (MFT) processing. Being recognized as a trusted service provider by our customers enables us to work with them to provide optimization solutions for their existing and new operations.
2. Contract Model: Today, one quarter of our revenue comes through a contract model, where we earn our revenue on a fee for service basis, typically with terms in excess of one year. These contracts are not tied directly to commodity price changes or drilling activity, bringing continuity to business activities and revenue and earnings stability.
3. Modular Processing Facilities: Where we are not contracted or onsite, we have built standardized, modular processing assets known as Modular Processing Facilities (MPF) which affords Newalta industry leading agility in capital deployment. With a developed inventory of land and permits in the major North American plays, Newalta can install and commission a new facility in four months or less, at a lower cost than a traditional fixed facility. This means Newalta can be extremely agile and effective in the deployment of capital assets, and generate returns within the fiscal year which is not possible with the fixed facility model. This model also allows us to leverage recent advances in drilling techniques, including concentrated multi-well corridor pad drilling.
4. Enhanced Value Recovery: Newalta has consistently demonstrated the capability to engineer and develop solutions to enhance value recovery from complex waste streams. We measure success for our customer in barrels of oil recovered and lower total value chain costs, not disposal volumes. In fact, we constantly and relentlessly apply the efforts of our research and development team and engineers to find and develop new ways to extract value from additional waste streams, lower associated environmental impacts, and reduce total value chain costs.
5. Commitment to Innovation: Newalta continues to innovate. Over the last two decades we pioneered the use of centrifugation to process E&P waste, adapted this technology to demonstrate a sustainable means to address the oil sands mature fines tailing issues, and are advancing the processing opportunity through micro filtration, thermal desorption and other new technologies in the pipeline. We invest in these pursuits and have a disciplined process for innovation built around our ability to understand the voice of our customers, because we work with them, in their facilities, day in and day out.

Our Markets

Newalta sees growth opportunities in both the U.S. and Canadian markets driven predominantly by the macro-economic considerations outlined above, however these markets are quite different. The Canadian market is well established and highly regulated. Newalta has demonstrated the ability to create new markets in this space, establishing a processing presence with SAGD producers seven years ago and more recently developing the mature fines tailings remediation market with mining producers. These highly engineered solutions have enabled the creation of contractual relationship structures with major E&P players in Canada and continue to represent a focus area of growth for Newalta. In addition, we see the MPF strategy allowing us to economically increase our presence in the developing Montney and Duvernay plays with a focus on cradle to grave waste optimization. This will help form the core of the Canadian organic growth focus, which will be supplemented with acquisitions to bring new technologies and services to market through our comprehensive footprint.

Alternatively, the U.S. market, which is approximately five-six times the size of the Canadian market shares very few similarities. Without federal regulations driving the treatment of E&P waste, the decisions are left at the state level and therefore show wide variability between states. There are very few companies with presence and footprint across multiple plays and the economics vary greatly across those plays. Shale depletion rates are driving the need for continuous "factory" style drilling techniques and a significant shift from vertical to pad based horizontal drilling. Each play is made up of an assortment of E&P customers and a very fragmented service industry predicated on the disposal of waste with limited treatment which is where we see opportunity. Growth for Newalta will occur through the disciplined acquisition of assets which enable access to waste streams, where Newalta will deploy its processing expertise and assets. Newalta will focus on targeted plays, develop a processing and disposal footprint based on market knowledge and execute a targeted program to deploy growth capital focusing on generating the greatest returns.

Emerging Core Market Opportunities

Newalta will continue to grow during the plan period, intelligently and with purpose leveraging our deep technical development and engineering capabilities. We see a number of emerging market opportunities that we will exploit to further expand our footprint and enhance our scope of services. We continue our work to transform an industry which has been served by traditional approaches, where wastes are transported to processing and disposal facilities, including landfills and disposal wells. The transformation is good for the industry, it's good for the environment and is leading to a deep roster of opportunities for us in the key sectors of our business.

Drilling

• New and more stringent environmental regulations require the development of new service solutions by companies who will invest in innovation and technologies, both for processing and information.
• Developments in horizontal and multi-well pad drilling are increasing the waste volumes generated per well and per pad. This is driving the need for a more mobile waste management industry that can move and adapt to market needs.
• The longer horizontal sections in the drilling process require higher quality synthetic oil in the drilling muds. The increased value of this oil is pushing demand for enhanced recovery techniques from oil-based cuttings, which typically have gone to landfills.

Completions

• Multi-stage fracking is increasing the volumes required for both sourcing/make up and flow back water by 10 times, which drives the need for more innovative water management solutions.
• New regulations and public concerns around fracking and the disposal of associated fluids are leading to new business practices for the management of these volumes.
• The growing volumes required for these types of completions are driving the need for a full cycle simplified sustainable solution.

Production

• The trend for producers to outsource their non-core functions continues to increase.
• The new drilling and completion techniques develop wells that produce much higher volumes than previous, taxing local infrastructure and requiring quick to market adaptable solutions.
• Oil sands producers are spending in excess of $20 billion per year and producers consider processing of waste streams to be non-core.
• The revised tailings framework for the oil sands and new regulations in U.S. shale plays are driving opportunities, including the development of solutions imbedded into customer operations, leading to expansion opportunities for our onsite service model.

Sustainability Simplified™

Sustainability is a popular term with broad and inconsistent definitions across the industry. For Newalta, sustainability is the integration and alignment of three key elements we call the 3E's. Environmental, Economical and Ethical. Only through the balance of environmental stewardship, economical viability and alignment to regulatory and ethical practices will we achieve a sustainable position in the oil and gas industry. Newalta incorporates the 3E's into everything we do and measures success along those lines. By providing solutions to our customers in the management and remediation of the wastes generated from the exploration and production processes, Newalta simplifies the sustainability equation enabling our customers to focus on their core competencies while we focus on ours. This is Sustainability Simplified™and this is what sets us apart.

Our vision is to:

• Simplify sustainability and environmental stewardship for our customers, by enabling them to focus on their core competencies.
• Be the differentiated leader in environmental energy services, delivering highly engineered, sustainable, value-adding solutions to the oil and gas industry.
• Leverage our customer-centric engineering, technology and processing capabilities to deliver solutions and extract value through the treatment of complex waste streams.

Achievement of this vision will position Newalta as the North American industry leader in sustainable solutions to the oil and gas industry.

OUR STRATEGIES

1. Geographic Expansion - Establish operating footprint and scale

Proximity to oil and gas waste stream sources is critical to success in North America. New drilling techniques, expanding plays, increased water usage and the sheer volume of waste being generated that requires processing are driving new customer requirements. This provides opportunity to Newalta. Our business model of modular processing facilities (MPF) designed to expand capacity or services with reduced sunk costs suit this mobile market. In the U.S., the market has limited processing capability and is highly fragmented resulting in opportunities to expand our service program and for consolidation in targeted plays. We will establish scale in the U.S. and in Canada by leveraging our MPF model and through select acquisitions. We will continue to develop our inventory of locations and permits for expansion in the U.S. and in Western Canada to improve our speed of execution and agility. We will partner with customers to add services to the network when and where markets dictate the need. In addition to the core plays we serve today, target markets include the Bakken, Permian and Eagle Ford in the U.S. and the Montney and Duvernay plays in Western Canada.

2. Growth in Heavy Oil - Expansion of long-term contracts as well as processing and recovery capabilities

The Heavy Oil market consists of a limited number of very sophisticated customers looking for highly engineered solutions for their production waste streams. Newalta has become a trusted service provider with our innovative approach and professional operations. The region continues to hold significant opportunity for growth as the producers ramp up their production using Steam Assisted Gravity Drainage (SAGD) and mining techniques. The majority of slop oil is still processed by producers or transported long distances to fixed third-party waste processing facilities. Wastewater being generated from the SAGD operations requires treatment prior to disposal. The mining sector faces significant environmental challenges, from managing legacy tailings ponds to finding economical solutions to ongoing process residues. Currently, there are approximately 80 square kilometres of wet legacy tailings ponds requiring remediation. By processing onsite, Newalta enhances the customer's sustainability performance and reduces transportation costs. We will focus on providing technically differentiated solutions to these customers, expanding long-term contacts and extracting additional product value from our processes. We will leverage our first-mover expertise, in-depth waste processing knowledge and solid track record with safety to drive growth.

3. Enhanced Customer Value Creation - Sustainability Simplified™

E&P customers interact with numerous service providers through a well life-cycle, with few end-to-end solution options and little information available for environmental stewardship. Our strategy is to make sustainability simple for customers by providing a full-service offering at each stage of drilling, completions, production and reclamation with a focus on value creation through product recovery. Newalta's core competencies of technical development and engineering are key enablers in developing solutions to provide end-to-end management of the physical waste stream (Oil/Water & Solids) in addition to providing the end-to-end data necessary to support the sustainability/environmental requirements in the jurisdictions in which customers operate. This will drive the transfer, management and treatment of waste closer to the source, enabled by modular processing and value stream management. A full-service solution will leverage our long-standing centrifugation operating expertise as well as the introduction of commercialized innovative processing solutions. These processing capabilities will position us to build strong partnerships with key customers to simplify their sustainability initiatives. Our onsite track record proves the trusted nature of the relationships we have developed with many of the largest and most sophisticated oil and gas producers. By adding processing assets, disposal wells and landfills, and by moving processing closer to source, enhanced value optimization is possible. We will continue to move information gathering and processing closer to source to optimize traceability and logistics, resulting in Sustainability Simplified™.

4. Adjacent Market Growth - Leverage our capabilities to develop a presence in the Midstream and Downstream industries

We believe our core competencies in centrifugation, onsite processing, project management, and finding innovative solutions for the upstream oil and gas industry can be leveraged to provide value in adjacent markets. The midstream and downstream industries are highly regulated and dominated by sophisticated customers requiring innovative process solutions. Although we do not service these industries today, the characteristics are similar to the oil and gas industry that we have been operating in during the past 20 years. We will develop a presence in these markets by focusing on value creation through product recovery.

OUR GROWTH PHILOSOPHY

Organic Versus Inorganic Growth Philosophy

Newalta will continue to seek opportunities that advance our strategies that are aligned with core competencies to grow the company both organically and through acquisitions.

Our current MPF and onsite business models generate strong returns with a well understood risk profile. We have developed a robust, standardized process design that we believe uniquely positions us to rapidly deploy our MPF business model. We are currently investing significant time and effort in developing an inventory of land and permits with a priority on basins we are currently operating as well as basins with high drilling and completion activity. With the ability to deploy an MPF within four months of receipt of the necessary permits, our expectation is that waste streams requiring processing by centrifugation will be executed through our organic program. On the other hand, where speed to market is critical, land or permits are difficult to obtain, or where a particular market may already be fully serviced, an acquisition strategy will be pursued.

We will pursue acquisitions where a particular opportunity has a developed business that is complementary to our core business thereby providing a platform from which we can deploy our proven business models through add on organic growth investments. In this context, the businesses that we are looking to acquire will provide access to new waste streams or incremental access to existing waste streams.

We will also seek out businesses that have high barriers to entry which typically exhibit a high degree of process or technology orientation, or are capital intensive. Once acquired, we have the ability to add significant value to the business either through deployment of our current service offering within the acquired network, through exporting the acquired service offering into our pre-existing network or through consolidation from additional acquisitions.

In an isolated view, businesses that exhibit low barriers to entry, such as transportation and pure rental equipment, will not be pursued. However, when coupled with our ability to secure access to a waste stream for processing within our network, these types of businesses may be attractive and therefore considered in the broader context.

KEY FINANCIAL TENETS

Within our refreshed Vision 2020, we have set out a number of key tenets and priorities for our business model, in addition to setting out certain key financial metrics that will define our success over the business plan (2015 - 2020) period.

Capital Allocation Priorities

We will take a balanced and disciplined approach to effective deployment of our capital so as to maximize shareholder value. 
Our priorities for capital allocation are as follows - We will invest in:

• High return organic growth opportunities;
  • We have a proven ability to reinvest in our business at high rates of return. Given our track record of success with organic growth within energy services, returns from this use of capital come at lower levels of risk than others;
• Accretive acquisitions, aligned with our core business competencies, to accelerate footprint and support incremental organic growth opportunities;
  • By their very nature, acquisitions carry a higher hurdle rate of return, than organic growth capex, in order to compensate for added integration and execution risks; we will balance this higher hurdle rate with our ability to improve overall returns from a broader platform that will support incremental, high return organic investments;
• Dividends to grow in line with future cash flows;
  • Our long-term payout ratio target for dividends will fall between 15% and 20%, roughly in the bottom quartile of dividend paying companies on the TSX;
• Share repurchase programs, where we see our shares undervalued and in the absence of better or high return investments.

We will drive incremental and ongoing improvement to Return on capital employed (ROCE) each year after 2015, and more than double our Energy Services ROCE in 2014.

Free Cash Flow Generation

Excluding acquisitions, we will, within the plan period, move towards a model of free cash flow generation, after funding of all capital investments, tax, financing, and dividend payments.

Long Term Debt and Leverage Targets

We will grow our business while maintaining our financial flexibility and solid balance sheet.

• Our long term debt leverage target will fall between 2.0 and 2.5;
• Our long term debt as a percent of total debt target will fall between 65% and 80%, ensuring optimal flexibility and alignment with long lived assets;
• Our target leverage range will represent sufficient room to weather business downturns, stay well within our covenant levels, and allow us to capitalize on business opportunities as they arise.

Funding for investments will be aligned with our long-term debt leverage target range, allowing for fluctuations due to timing of both organic growth and inorganic growth capital spending; sources of funding will include funds from operations, debt and equity.

Total Shareholder Return

We will drive Total Shareholder Return through the execution of our strategy and achievement of our targets. We will eliminate our share valuation discount to peers, and move in line with or ahead of our peer group average. Valuation torque will be driven by a recovery, in time, to a normalized market oil pricing and activity environment, returns from investments aligned with our core competencies and key differentiators, and multiple expansion driven by our pure play focus in the energy services sector.

Financial Metrics - Through our Business Plan Period (2015 - 2020)

Through our Business Plan period, and by 2020:

• Revenue will grow to in excess of $2 billion annually, through a combination of both organic and inorganic growth investments;
• We will drive consistent, profitable organic growth;
• Our strong track record of organic performance will be enhanced by disciplined acquisitions;
  • We see acquisitions as an accelerant in our target markets to grow our platform, and to leverage our strong and proven organic growth model;
  • Acquisitions will be accretive on an FFO per share basis.
• We will remain lean as an organization. G&A will improve to between 7% and 9% of revenue; and,
• Revenue and Adjusted EBITDA will grow in excess of 20% on a CAGR basis (2014 to 2020).

Quarterly Conference Call

Management will hold a conference call on Wednesday, May 6, 2015 at 11:00 a.m. (ET) to discuss Newalta's performance for the quarter ended March 31, 2015. To participate in the teleconference, please call 416-340-2218 or 866-223-7781. To access the simultaneous webcast, please visit www.newalta.com. For those unable to listen to the live call, a taped broadcast will be available at www.newalta.com and, until midnight on Wednesday, May 13, 2015 by dialing 800-408-3053 and entering passcode 2768993 followed by the pound sign.

Annual Meeting

Newalta will hold its annual meeting of shareholders on Thursday, May 7, 2015 at 11:00 a.m. Mountain Time.

Location: Newalta's corporate office, Building 'C'

220 - 12th Avenue, S.W.

Calgary, Alberta

For those unable to attend the annual meeting, the presentation will be webcast live at www.newalta.com and subsequently archived on Newalta's website.

About Newalta

Newalta is a leading provider of innovative engineered environmental solutions that enable customers to reduce disposal, enhance recycling and recover valuable resources from oil and gas exploration and production waste streams. We simplify the critical challenges of sustainable environmental practices through the use of advanced processing capabilities deployed through a differentiated business model. We serve customers onsite directly at their operations and through a network of locations throughout North America. Our proven processes and excellent record of safety make us the first-choice provider of sustainability-enhancing services for oil and gas customers. With a highly skilled team of people, a two-decade track record of innovation and a commitment to commercializing new solutions, Newalta is positioned for sustained future growth and improvement. We are Sustainability Simplified™. Newalta trades on the TSX as NAL. For more information, visitwww.newalta.com.

The press release contains certain statements that constitute forward-looking information. Please refer to the section below "Forward-Looking Information", for further discussion of assumptions and risks relating to this forward looking information.

The unaudited interim Condensed Consolidated Financial Statements and MD&A, which contain additional notes and disclosures, are available on SEDAR at www.sedar.com or our website at www.newalta.com under Investor Relations/Financial Reports.

CHANGE IN FINANCIAL STATEMENT PRESENTATION

As a result of the Industrial sale and shift in strategic focus, we changed our income statement presentation from functional to nature based, to provide financial statement users with more relevant information. Prior period comparative figures have been amended to conform to the new presentation. As part of this change, we have reclassified sales expense directly attributable to our operating divisions from Corporate and Other to the respective division. Please refer to "Reporting Structure" below for restated historical segmented information and key metrics.

REPORTING STRUCTURE

The tables below restate the historical segmented information and key metrics from the New Markets and Oilfield divisions to Heavy Oil and Oilfield divisions.

HEAVY OIL RESTATED INFORMATION BY QUARTER

				2014				2013				2012
($ millions)	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1
Revenue	56.7	56.2	50.4	40.0	48.3	53.5	41.7	24.4	36.5	45.6	25.4	22.9
Operating expenses	33.3	28.4	27.2	23.7	26.4	25.2	21.4	13.8	19.0	24.9	12.8	11.5
Divisional EBITDA	23.4	27.8	23.2	16.3	21.9	28.3	20.3	10.6	17.5	20.7	12.6	11.4
Divisional EBITDA % of revenue	41%	49%	46%	41%	45%	53%	49%	43%	48%	45%	50%	50%
Depreciation and amortization	5.6	5.5	4.2	2.7	4.5	5.1	3.2	1.4	3.4	2.3	1.4	1.2
Operating Profit	17.8	22.3	19.0	13.6	17.4	23.2	17.1	9.2	14.1	18.4	11.2	10.2
Operating Profit % of revenue	31%	40%	38%	34%	36%	43%	41%	38%	39%	40%	44%	45%
Maintenance capital	2.6	1.6	3.0	1.0	7.4	1.5	0.6	0.2	2.0	2.1	2.1	0.3
Growth capital	29.8	18.6	8.4	5.8	18.0	12.4	13.4	3.8	12.3	2.9	26.7	17.0
Assets employed	261	237	223	217	210	189	178	168	165	158	155	129
Business Unit Revenue Contribution %
Facilities	28%	35%	35%	43%	32%	31%	33%	51%	35%	30%	51%	57%
Onsite	72%	65%	65%	57%	68%	69%	67%	49%	65%	70%	49%	43%
Metrics
Contracts % of Onsite revenue	80%	77%	74%	77%	75%	86%	71%	67%	74%	71%	61%	65%

HEAVY OIL RESTATED INFORMATION BY YEAR

				2014				2013				2012
($ millions)	Q4 YTD	Q3 YTD	Q2 YTD	Q1	Q4 YTD	Q3 YTD	Q2 YTD	Q1	Q4 YTD	Q3 YTD	Q2 YTD	Q1
Revenue	203.3	146.6	90.4	40.0	167.9	119.6	66.1	24.4	130.4	93.9	48.3	22.9
Operating expenses	112.6	79.3	50.9	23.7	86.8	60.4	35.2	13.8	68.2	49.2	24.3	11.5
Divisional EBITDA	90.7	67.3	39.5	16.3	81.1	59.2	30.9	10.6	62.2	44.7	24.0	11.4
Divisional EBITDA % of revenue	45%	46%	44%	41%	48%	49%	47%	43%	48%	48%	50%	50%
Depreciation and amortization	18.0	12.4	6.9	2.7	14.2	9.7	4.6	1.4	8.3	4.9	2.6	1.2
Operating Profit	72.7	54.9	32.6	13.6	66.9	49.5	26.3	9.2	53.9	39.8	21.4	10.2
Operating Profit % of revenue	36%	37%	36%	34%	40%	41%	40%	38%	41%	42%	44%	45%
Maintenance capital	8.2	5.6	4.0	1.0	9.6	2.3	0.7	0.2	6.5	4.5	2.5	0.3
Growth capital	62.6	32.8	14.2	5.8	47.6	29.6	17.2	3.8	58.9	46.6	43.7	17.0
Business Unit Revenue Contribution %
Facilities	35%	37%	38%	43%	35%	36%	40%	51%	40%	42%	54%	57%
Onsite	65%	63%	62%	57%	65%	64%	60%	49%	60%	58%	46%	43%
Metrics
Contracts % of Onsite revenue	77%	76%	75%	77%	77%	77%	69%	67%	69%	68%	63%	65%

OILFIELD RESTATED INFORMATION BY QUARTER

					2014				2013				2012
($ millions)		Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1
Revenue		76.4	79.1	66.0	70.5	61.7	63.6	53.9	65.1	60.5	63.2	52.2	63.7
Operating expenses		51.0	47.1	43.0	46.0	41.7	39.4	35.4	39.2	39.8	39.3	36.6	37.1
Divisional EBITDA		25.4	32.0	23.0	24.5	20.0	24.2	18.5	25.9	20.7	23.9	15.6	26.6
Divisional EBITDA % of revenue		33%	40%	35%	35%	32%	38%	34%	40%	34%	38%	30%	42%
Depreciation and amortization		8.0	5.7	4.6	4.4	4.4	3.9	4.0	4.1	4.0	4.1	3.6	4.1
Operating Profit		17.4	26.3	18.4	20.1	15.6	20.3	14.5	21.8	16.7	19.8	12.0	22.5
Operating Profit % of revenue		23%	33%	28%	29%	25%	32%	27%	33%	28%	31%	23%	35%
Maintenance capital		6.0	3.7	2.1	1.3	2.8	2.8	1.9	1.5	1.8	3.2	2.3	1.4
Growth capital		27.8	14.1	8.8	12.7	38.5	12.6	8.9	7.2	15.6	8.8	4.5	5.7
Assets employed		513	491	475	472	451	427	421	413	407	391	385	380
Business Unit Revenue Contribution %
Facilities		67%	69%	73%	76%	73%	75%	74%	71%	70%	68%	67%	67%
	Canada % of Facilities revenue	86%	89%	85%	88%	92%	93%	90%	91%	89%	91%	93%	95%
	U.S. % of Facilities revenue	14%	11%	15%	12%	8%	7%	10%	9%	11%	9%	7%	5%
Drilling Services		33%	31%	27%	24%	27%	25%	26%	29%	30%	32%	33%	33%
	Canada % of Drillsite revenue	17%	18%	12%	33%	17%	13%	13%	28%	23%	22%	19%	43%
	U.S. % of Drillsite revenue	83%	82%	88%	67%	83%	87%	87%	72%	77%	78%	81%	57%
Metrics
U.S. Recovered Crude Oil ('000 bbl)		8.1	4.4	8.6	7.5	-	-	-	-	-	-	-	-
U.S. Netback (CDN$/bbl)		58.38	78.88	83.80	81.32	-	-	-	-	-	-	-	-
U.S. Recovered Crude Oil sales ($ millions)		0.5	0.3	0.7	0.6	-	-	-	-	-	-	-	-

OILFIELD RESTATED INFORMATION BY YEAR

					2014				2013				2012
($ millions)		Q4 YTD	Q3 YTD	Q2 YTD	Q1	Q4 YTD	Q3 YTD	Q2 YTD	Q1	Q4 YTD	Q3 YTD	Q2 YTD	Q1
Revenue		292.0	215.6	136.5	70.5	244.3	182.6	119.0	65.1	239.6	179.1	115.9	63.7
Operating expenses		187.1	136.1	89.0	46.0	155.7	114.0	74.6	39.2	152.8	113.0	73.7	37.1
Divisional EBITDA		104.9	79.5	47.5	24.5	88.6	68.6	44.4	25.9	86.8	66.1	42.2	26.6
Divisional EBITDA % of revenue		36%	37%	35%	35%	36%	38%	37%	40%	36%	37%	36%	42%
Depreciation and amortization		22.7	14.7	9.0	4.4	16.4	12.0	8.1	4.1	15.8	11.8	7.7	4.1
Operating Profit		82.2	64.8	38.5	20.1	72.2	56.6	36.3	21.8	71.0	54.3	34.5	22.5
Operating Profit % of revenue		28%	30%	28%	29%	30%	31%	31%	33%	30%	30%	30%	35%
Maintenance capital		13.1	7.1	3.4	1.3	9.0	6.2	3.4	1.5	8.7	6.8	3.7	1.4
Growth capital		68.4	35.6	21.5	12.7	59.2	28.7	16.1	7.2	34.5	19.0	10.2	5.7
Business Unit Revenue Contribution %
Facilities		71%	73%	75%	76%	73%	73%	72%	71%	68%	67%	67%	67%
	Canada % of Facilities revenue	87%	87%	87%	88%	91%	91%	91%	91%	92%	93%	94%	95%
	U.S. % of Facilities revenue	13%	13%	13%	12%	9%	9%	9%	9%	8%	7%	6%	5%
Drilling Services		29%	27%	25%	24%	27%	27%	28%	29%	32%	33%	33%	33%
	Canada % of Drillsite revenue	19%	20%	22%	33%	19%	19%	22%	28%	28%	29%	33%	43%
	U.S. % of Drillsite revenue	81%	80%	78%	67%	81%	81%	78%	72%	72%	71%	67%	57%
Metrics
U.S. Recovered Crude Oil ('000 bbl)		28.6	20.5	16.1	7.1	-	-	-	-	-	-	-	-
U.S. Netback (CDN$/bbl)		75.60	81.33	82.56	81.32	-	-	-	-	-	-	-	-
U.S. Recovered Crude Oil sales ($ millions)		2.1	1.6	1.3	0.6	-	-	-	-	-	-	-	-

G&A RESTATED INFORMATION

				2014				2013				2012
($ millions)	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1
G&A - by quarter	18.6	16.6	15.8	15.7	20.8	17.0	15.7	16.1	15.1	13.8	14.5	13.1
G&A - YTD	66.7	48.1	31.5	15.7	69.6	48.8	31.8	16.1	56.4	41.4	27.6	13.1

SELECTED FINANCIAL INFORMATION

		Three months ended March 31,
($000s except per share data)  (unaudited)		2015		2014		% Change
Heavy Oil
Revenue		38,403		39,972		(4)
Divisional EBITDA(1)		11,626		16,300		(29)
- % of revenue		30%		40%		(25)
Revenue by Business Unit
	Facilities	24%		43%		(44)
	Onsite	76%		57%		33
Assets Employed(2)		275,809		216,853		27
Oilfield
Revenue		59,176		70,465		(16)
Divisional EBITDA(1)		15,198		24,428		(38)
- % of revenue		26%		35%		(26)
Revenue by Business Unit
	Facilities	71%		76%		(7)
	Drilling Services	29%		24%		21
Assets Employed(2)		534,278		471,860		13
Capital Expenditures
Maintenance capital expenditures		2,332		2,933		(20)
	Heavy Oil	1,554		983		58
	Oilfield	316		1,324		(76)
Growth capital expenditures		32,394		20,909		55
	Heavy Oil	14,260		5,788		146
	Oilfield	15,539		12,714		22

(1)	Divisional EBITDA does not have any standardized meaning prescribed by GAAP.
(2)	Assets employed is provided to assist management and investors in determining the effectiveness of the use of the assets at a divisional level. Assets employed is the sum of capital assets, intangible assets and goodwill allocated to each division. Assets employed as defined does not include capital assets held by corporate. Corporate assets include information technology, leasehold improvements, and technical development.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited - Expressed in thousands of Canadian Dollars)

		March 31, 2015	December 31, 2014
Assets
Current assets
	Cash	9,532	4,129
	Accounts and other receivables	85,770	104,945
	Inventories	6,222	7,681
	Prepaid expenses and other assets	4,884	9,150
	Assets held for sale	-	365,262
		106,408	491,167
Non-current assets
	Property, plant and equipment	833,040	804,522
	Other long-term assets	10,979	8,953
	Goodwill	60,443	60,443
TOTAL ASSETS		1,010,870	1,365,085
Liabilities
Current liabilities
	Accounts payable and accrued liabilities	121,332	170,541
	Dividends payable	7,026	7,003
	Liabilities held for sale	-	97,131
		128,358	274,675
Non-current liabilities
	Senior secured debt	-	183,104
	Senior unsecured debentures	271,053	270,837
	Other liabilities	1,087	1,973
	Deferred tax liability	26,913	43,180
	Provisions	83,155	68,410
TOTAL LIABILITIES		510,566	842,179
Shareholders' Equity
Shareholders' capital		425,633	422,991
Contributed surplus		10,697	10,916
Retained earnings		41,295	76,061
Accumulated other comprehensive income		22,679	12,938
TOTAL SHAREHOLDERS' EQUITY		500,304	522,906
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		1,010,870	1,365,085

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited - Expressed in thousands of Canadian Dollars)

(Except per share data)

		For the three months ended March 31,
		2015		2014
Revenue		97,579		110,437
	Operating expenses	70,755		69,709
	General and administrative	13,930		15,720
	Depreciation and amortization	14,421		10,077
	Stock-based compensation	(1,962)		4,851
	Impairment	4,876		-
	Restructuring and other related costs	18,380		526
	Finance charges	10,280		6,253
	Embedded derivative gain	(2,912)		(6,556)
Total expenses		127,768		100,580
(Loss) earnings before income taxes		(30,189)		9,857
Income tax (recovery) expense		(6,925)		1,133
Net (loss) earnings from continuing operations		(23,264)		8,724
Net loss from discontinued operations		(4,477)		(2,221)
Net (loss) earnings		(27,741)		6,503
Other comprehensive income:
	Exchange difference on translating foreign operations	9,741		4,187
Other comprehensive income		9,741		4,187
Total comprehensive (loss) income		(18,000)		10,690
(Loss) Earnings per share:
	Basic from continuing operations	(0.41)		0.16
	Basic from discontinued operations	(0.08)		(0.04)
Basic (loss) earnings per share		(0.49)		0.12
	Diluted from continuing operations	(0.41)		0.16
	Diluted from discontinued operations	(0.08)		(0.04)
Diluted (loss) earnings per share		(0.49)		0.12

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited - Expressed in thousands of Canadian Dollars)

	Shareholders' capital	Contributed surplus		Retained earnings		Accumulated other comprehensive income	Total
Balance, December 31, 2013	409,894	15,251		245,834		4,183	675,162
Changes in equity for the three months ended March 31, 2014
Expense related to vesting of options	-	640		-		-	640
Exercise of options	5,222	(5,222)		-		-	-
Issuance of shares	1,628	-		-		-	1,628
Dividends declared	-	-		(6,128)		-	(6,128)
Other comprehensive income	-	-		-		4,187	4,187
Net earnings for the period	-	-		6,503		-	6,503
Balance, March 31, 2014	416,744	10,669		246,209		8,370	681,992
Changes in equity for the nine months ended December 31, 2014
Expense related to vesting of options	-	2,003		-		-	2,003
Exercise of options	2,227	(1,756)		-		-	471
Issuance of shares	4,020	-		-		-	4,020
Dividends declared	-	-		(20,972)		-	(20,972)
Other comprehensive income	-	-		-		4,568	4,568
Net loss for the period	-	-		(149,176)		-	(149,176)
Balance, December 31, 2014	422,991	10,916		76,061		12,938	522,906
Changes in equity for the three months ended March 31, 2015
Expense related to vesting of options	-	912		-		-	912
Exercise of options	1,363	(1,131)		-		-	232
Issuance of shares	1,279	-		-		-	1,279
Dividends declared	-	-		(7,025)		-	(7,025)
Other comprehensive income	-	-		-		9,741	9,741
Net loss for the period	-	-		(27,741)		-	(27,741)
Balance, March 31, 2015	425,633	10,697		41,295		22,679	500,304

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited - Expressed in thousands of Canadian Dollars)

		For the three months ended March 31,
		2015		2014
Cash provided by (used for):
Operating Activities
Net (loss) earnings from continuing operations		(23,264)		8,724
Adjustments for:
	Depreciation and amortization	14,421		10,077
	Impairment	4,876		-
	Onerous lease	9,859		-
	Income tax provision	(6,925)		1,133
	Income tax paid	(56)		(32)
	Non-cash stock-based compensation (recovery) expense	(2,926)		2,620
	Finance charges	10,280		6,253
	Embedded derivative gain	(2,912)		(6,556)
	Finance charges paid	(815)		(858)
	Other	948		148
Funds from Operations		3,486		21,509
Change in non-cash working capital		(18,319)		6,663
Decommissioning costs incurred		(399)		(792)
Cash (used in) from continuing operations		(15,232)		27,380
Cash used in discontinued operations		(21,269)		(15,743)
Cash (used in) from Operating Activities		(36,501)		11,637
Investing Activities
	Additions to property, plant and equipment	(57,881)		(56,668)
	Proceeds on sale of discontinued operations	295,347		-
	Proceeds on sale of property, plant and equipment	269		29
	Other	(715)		(426)
Cash from (used in) continuing operations		237,020		(57,065)
Cash used in discontinued operations		(4,041)		(4,119)
Cash from (used in) Investing Activities		232,979		(61,184)
Financing Activities
	Issuance of shares	232		-
	(Decrease) increase in senior secured debt	(183,104)		54,759
	Decrease in bank indebtedness	-		(582)
	Dividends paid	(5,724)		(4,459)
Cash (used in) from Financing Activities		(188,596)		49,718
Effect of foreign exchange on cash		(2,479)		(171)
Change in cash		5,403		-
Cash, beginning of period		4,129		-
Cash, end of period		9,532		-

FORWARD-LOOKING STATEMENTS

Certain statements contained in this document constitute "forward-looking information" as defined under applicable securities laws. When used in this document, the words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect", "potential", "strategy", "target", and similar expressions, as they relate to Newalta Corporation and the subsidiaries of Newalta Corporation, or their management, are intended to identify forward-looking information. In particular, forward-looking information included or incorporated by reference in this document includes statements with respect to:

• future operating and financial results;
• business prospects and strategy including related timelines;
• capital expenditure programs and other expenditures;
• realization of anticipated benefits from the sale of the Industrial Division, including the ability to reinvest net proceeds of disposition in a timely and efficient manner;
• realization of anticipated benefits of growth capital investments, acquisitions, divestitures and our innovation and process development initiatives;
• realization of anticipated benefits from the implementation of cost rationalization initiatives including the anticipated value and sustainability of the cash savings from such initiatives;
• anticipated industry activity levels;
• anticipated commodity prices;
• expected demand for our services;
• expected expansion opportunities for our business;
• the amount of dividends declared or payable in the future;
• our projected cost structure; and
• expectations and implications of changes in legislation.

Expected future financial and operating performance and related assumptions are set out under "Outlook".

Such information reflects our current views with respect to future events and is subject to certain risks, uncertainties and assumptions, including, without limitation:

• strength of the oil and gas industry, including drilling activity;
• general market conditions;
• fluctuations in commodity prices for oil and the price we received for our recovered oil;
• fluctuations in interest rates and exchange rates;
• our ability to secure future capital to support and develop our business, including the issuance of additional common shares;
• the highly regulated nature of the environmental services and waste management business in which we operate;
• dependence on our senior management team and other operations management personnel with waste industry experience;
• the competitive environment of our industry in Canada and the U.S.;
• success of our growth, acquisition and innovation and process development strategies, including integration of businesses and processes into our operations, and potential liabilities from acquisitions;
• potential operational and safety risks and hazards, obtaining insurance for such risks and hazards on reasonable financial terms, and potential failure of meeting customer safety standards;
• the seasonal nature of our operations;
• risk of pending and future legal proceedings;
• risk to our reputation;
• our ability to attract, retain, and integrate skilled employees;
• open access for new industry entrants and the general unprotected nature of technology used in the waste industry;
• possible volatility of the price of, and the market for, our shares, and potential dilution for shareholders in the event of a sale of additional shares;
• financial covenants in our debt agreements that may restrict our ability to engage in transactions or to obtain additional financing;
• costs associated with operating our landfills; and
• such other risks or factors described from time to time in reports we file with securities regulatory authorities.

By its nature, forward-looking information involves numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking information will not occur. Many other factors could also cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking information and readers are cautioned that the foregoing list of factors is not exhaustive. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Furthermore, the forward-looking information contained in this document is made as of the date of this document and, in each case, is expressly qualified by this cautionary statement. Unless otherwise required by law, we do not intend, or assume any obligation, to update any such forward-looking information.

RECONCILIATION OF NON-GAAP MEASURES

This Press Release contains references to certain financial measures, including some that do not have any standardized meaning prescribed by International Financial Reporting Standards (IFRS or GAAP) and may not be comparable to similar measures presented by other corporations or entities. These financial measures are identified and defined below.

"EBITDA", "EBITDA per share", "Adjusted EBITDA", and "Adjusted EBITDA per share" are measures of our operating profitability. EBITDA provides an indication of the results generated by our principal business activities prior to how these activities are financed, assets are amortized or impaired, or how the results are taxed in various jurisdictions. In addition, Adjusted EBITDA provides an indication of the results generated by our principal business activities prior to recognizing stock-based compensation and restructuring and other related costs. Adjusted EBITDA provides improved continuity with respect to the comparison of our operating results over a period of time. Stock-based compensation, a component of employee remuneration, can vary significantly with changes in the price of our common shares (Shares), while restructuring and other related costs are outside of our normal course of business. Restructuring and other related costs are charges primarily attributable to cost rationalization initiatives. EBITDA and Adjusted EBITDA are derived from the condensed consolidated statements of operations and comprehensive income. EBITDA per share and Adjusted EBITDA per share are derived by dividing EBITDA and Adjusted EBITDA by the basic weighted average number of Shares.

EBITDA and Adjusted EBITDA from Continuing Operations are calculated as follows:

		Three months ended March 31,
($000s except per share data)		2015		2014
Net (loss) earnings from Continuing Operations		(23,264)		8,724
Add back:
	Income tax (recovery) expense	(6,925)		1,133
	Embedded derivative gain	(2,912)		(6,556)
	Finance charges	10,280		6,253
	Impairment	4,876		-
	Depreciation and amortization(1)	14,421		10,077
EBITDA		(3,524)		19,631
Add back:
	Stock-based compensation(2)	(1,962)		4,851
	Restructuring and other related costs	18,380		526
Adjusted EBITDA		12,894		25,008
Weighted average number of Shares		56,179		55,518
EBITDA per share		(0.06)		0.35
Adjusted EBITDA per share		0.23		0.45

(1)	Includes non-cash gains or losses on asset disposal and other non-cash charges.
(2)	Stock-based compensation includes ($2,926) for Q1 2015 and $2,620 for Q1 2014 in non-cash stock-based compensation.

"Divisional EBITDA" provides an indication of the results generated by the division's principal business activities prior to how activities are financed, the assets are amortized or impaired and before allocation of General and administrative costs (G&A), restructuring and other related costs or stock-based compensation. Divisional EBITDA is derived from Net (loss) earnings before income tax from Continuing Operations as follows:

		Three months ended  March 31,
($000s except per share data)		2015		2014
Net (loss) earnings before Income tax from Continuing Operations		(30,189)		9,857
Add back:
	Embedded derivative gain	(2,912)		(6,556)
	Finance charges	10,280		6,253
	Restructuring and other related costs	18,380		526
	Impairment	4,876		-
	Stock-based compensation	(1,962)		4,851
	Depreciation and amortization	14,421		10,077
	G&A	13,930		15,720
Divisional EBITDA		26,824		40,728
	Heavy Oil	11,626		16,300
	Oilfield	15,198		24,428
Deduct:
	G&A(1)	13,930		15,720
Adjusted EBITDA		12,894		25,008
	Stock-based compensation	(1,962)		4,851
	Restructuring and other related costs	18,380		526
EBITDA		(3,524)		19,631

(1)

As a result of the change in our financial statement presentation from functional to nature based, we have reclassified the sales expense directly attributable to the divisions from Corporate and Other to the respective division. Prior period comparative figures have been amended to conform to current period's presentation. Please refer to "Reporting Structure" for the restated the historical segmented information and key metrics.

"Adjusted net earnings" and "Adjusted net earnings per share" are measures of our profitability from Continuing Operations. Adjusted net earnings from Continuing Operations (Adjusted net earnings) provides an indication of the results generated by our principal business activities prior to recognizing stock-based compensation recovery or expense, the gain or loss on embedded derivatives, impairment and restructuring and other related charges. Stock-based compensation, a component of employee remuneration, can vary significantly with changes in the price of our Shares. The (gain) loss on the embedded derivative is a result of the change in the trading price of the debentures and the volatility of the applicable bond market. Impairment and restructuring and other related costs are related to initiatives outside of our normal course of business. As such, Adjusted net earnings provides improved continuity with respect to the comparison of our results over a period of time. Adjusted net earnings per share is derived by dividing Adjusted net earnings by the basic weighted average number of Shares.

		Three months ended  March 31,
($000s except per share data)		2015		2014
Net (loss) earnings from Continuing Operations		(23,264)		8,724
Add back:
	Embedded derivative gain	(2,912)		(6,556)
	Restructuring and other related costs	18,380		526
	Impairment	4,876		-
	Stock-based compensation	(1,962)		4,851
Adjusted net (loss) earnings		(4,882)		7,545
Weighted average number of Shares		56,179		55,518
Adjusted net (loss) earnings per share		(0.09)		0.14

"Tangible book value per share" is used to assist management and investors in evaluating the book value compared to the market value.

($000s except per share data)		March 31, 2015	December 31, 2014
Total Assets		1,010,870	1,365,085
Less:
	Goodwill	60,443	60,443
	Other long-term assets	10,979	8,953
	Assets held for sale	-	365,262
Total Tangible Assets		939,448	930,427
Weighted average number of Shares		56,179	55,518
Tangible book value per share		16.72	16.76

"Return on Capital Employed" (ROCE) is used to assist management and investors in measuring the returns realized at the consolidated level from capital employed. ROCE is derived from Net earnings plus tax-adjusted interest divided by the average of the beginning and ending balances of our total assets less current liabilities for the period (Net Assets).

"Cash Basis Return on Capital" (ROC - Cash) is also used to assist management and investors in measuring the returns realized at the consolidated level from capital employed. ROC - Cash is derived from Adjusted EBITDA less cash stock-based compensation, cash taxes and maintenance capital divided by Net Assets.

"Net Debt" is defined as sum of amount drawn on the Credit Facility, Letters of Credit and Senior Unsecured Debentures less Cash on hand.

"Funds from operations" is used to assist management and investors in analyzing cash flow and leverage from Continuing Operations. Funds from operations as presented is not intended to represent operating funds from operations or operating profits for the period, nor should it be viewed as an alternative to cash flow from operating activities, net earnings or other measures of financial performance calculated in accordance with IFRS. Funds from operations is derived from the condensed consolidated statements of cash flows and is calculated as follows:

		Three months ended March 31,
($000s except per share data)		2015		2014
Cash (used in) from Continuing Operations		(15,232)		27,380
Add back (deduct):
	Change in non-cash working capital	18,319		(6,663)
	Decommissioning costs incurred	399		792
Funds (used in) from Operations		3,486		21,509
Weighted average number of Shares		56,179		55,518
Funds from operations per share		0.06		0.39

References to EBITDA, EBITDA per share, Adjusted EBITDA, Adjusted EBITDA per share, Divisional EBITDA, Adjusted net earnings, Adjusted net earnings per share, ROC - Cash, Net Debt, Funds from operations and Funds from operations per share throughout this document have the meanings set out above.