North America’s Source for Equipment Finance · Investor Presentation - May 2014 Key Performance Indicators 26 Financial Revenue Financial Expense Operating Expense Pipeline Aviation

Investor Presentation - May 2014

North America’s Source for Equipment Finance

Investor Presentation - May 2014 2

Certain information in this presentation is forward-looking and related to anticipated financial performance, events and strategies. When used in this context, words such as “will”, “anticipate”, “believe”, “plan”, “intend”, “target” and “expect” or similar words suggest future outcomes. Forward-looking statements relate to, among other things, Element Financial Corporation’s (“Element”) objectives and strategy; future cash flows, financial condition, operating performance, financial ratios, projected asset base and capital expenditures; Element’s anticipated dividend policy; anticipated cash needs, capital requirements and need for and cost of additional financing; future assets; demand for services; Element’s competitive position; and anticipated trends and challenges in Element’s business and the markets in which it operates. The forward-looking information and statements contained in this presentation reflect several material factors and expectations and assumptions of Element including, without limitation: that Element will conduct its operations in a manner consistent with its expectations and, where applicable, consistent with past practice; the general continuance of current or, where applicable, assumed industry conditions; the continuance of existing (and in certain circumstances, the implementation of proposed) tax and regulatory regimes; certain cost assumptions; the continued availability of adequate debt and/or equity financing and cash flow to fund its capital and operating requirements as needed; and the extent of its liabilities. Element believes the material factors, expectations and assumptions reflected in the forward-looking information and statements are reasonable but no assurance can be given that these factors, expectations and assumptions will prove to be correct. By their nature, such forward-looking information and statements are subject to significant risks and uncertainties, which could cause the actual results and experience to be materially different than the anticipated results. Such risks and uncertainties include, but are not limited to, operating performance, regulatory and government decisions, competitive pressures and the ability to retain major customers, rapid technological changes, availability and cost of financing, availability of labour and management resources and the performance of partners, contractors and suppliers.

Readers are cautioned not to place undue reliance on forward-looking statements as actual results could differ materially from the plans, expectations, estimates or intentions expressed in the forward-looking statements. Except as required by law, Element disclaims any intention and assumes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.


North American Equipment Finance Experts

• $4.2 billion in assets

• $1.4 billion in available liquidity

• $2.5 billion market cap

• TSX composite index member

• FTSE Global Equity Index member

• 420 + employees

• 84,000 + customers

• Head Office – Toronto, Ontario

• U.S. Head Office – Philadelphia, PA

• Fleet Management Office – Mississauga, Ontario

• Aviation Office – Montreal, Quebec

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Leadership with a Proven Track Record

4

Steven Hudson FCA, B.B.A.

Chairman & CEO

Bradley Nullmeyer B. Comm., CA.

President

Bruce Smith B. Comm., CA.

President Element (Canada) & Chief Operating Officer

Michel Beland BBA, CA.

Chief Financial Officer

May 2007 founded as a

private leasing

company

Element Financial Corporation is becoming a North American leader in providing equipment financing and management services in selected

asset categories

http://element.jdu.ca/wp-content/uploads/2012/05/beland1.jpg


Positioned in a Growth Industry

5

2012 Results 2013A 2014E

2.8%

(Real)

2015E 2016E 20127E

US GDP

US Equipment

Investment

Equipment Finance

Volume

8.0%

Growth

16.4%

Growth

1.9% 2.8% 3.1% 3.1% 2.4%

• Average equipment replacement cycle of 8 years

• Growth led by various transportation segments including Air, Rail & Autos

• Propensity to finance increasing with competing calls on capital

US Commercial Finance is one of the fastest growing financial services sectors

Source: US Federal Reserve Bank of Philadelphia


Transactions: $10,000 to $5 M Originations: Direct relationships Referrals Regions: Canada US Expertise: Transportation Construction Commercial Hospitality Healthcare Technology Industrial Energy Golf

Transactions: $5 M to $150 M Originations: Direct relationships Manufacturer

referrals Regions: Canada US Expertise: Civil Aviation

Medium & Heavy Lift Helicopters

Business Jets Turbo-prop

Aircraft Flight Simulators

Transactions: $10,000 to $5 M Originations: Manufacturers Dealers Distributors Sponsor Referrals Regions: Canada US Expertise: Sales aid finance

programs for: Dealers Distributors Manufacturers VARs Sponsors

Programs sourced from Direct

Commercial Finance relationships

Transactions: $500,000 to $40 M Originations: Direct from

manufacturers Regions: Canada USA (through GE Fleet) Expertise: Corporate Fleets Municipal Fleets Industrial Fleets Fleet Services Strategic Consulting

Transactions: $150,000 to $200 M

Originations: Manufacturer

program Regions: North America Expertise: Covered Gondolas Hopper Cars Industrial Tank Cars Petroleum Tank Cars

Corporate Services

Fleet Management Commercial Finance & Vendor Finance Canada & U.S.

Aviation Finance

Railcar Finance

Vendor finance leads

Focused on Selected Business Verticals


Origination Volume

Transaction Yield

Funding Costs

Operating Expense

Financial Leverage ROE

Credit Expense

• Strong organic growth

• Vendor-based originations

• Economic recovery

• Replacing aged equipment

• Acquisition of core platforms

• Build the base

• Fee-based income

• Vendor-based originations

• Pricing based on structure and service

• Enhance senior line & capital markets funding vehicles

• Diversify capital structure/sources with new commitments

• Maintain matched funding discipline

• Increase operating efficiency

• Acquire stand-alone portfolios

• Transformational acquisitions

• Deliver integration savings

• Third party oversight

• Total lifecycle provisioning

• Vendor support

• Low industry credit losses

• Accretive use of equity

• Fund organic growth & tuck-in acquisitions from existing capital

• Activate balance sheet for transformational acquisitions

Key ROE Drivers

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2014 YTD Milestones


2014 YTD Milestones

JANUARY

• Targets $3.8 billion in originations for 2014

• Completed purchase of US$396 million of leased railcars from Trinity

FEBRUARY

• Announced $997 million of originations for Q4-2013

• Issued $125 million of cumulative 5-year rate rest preferred shares

MARCH

• EFN added to the FTSE Global Equity Index

• Completed purchase of US$118 million of leased railcars from Trinity

April

• Entered multi-year equipment financing agreement with US-based Celadon

• Accessed rated ABS market for US$340 million to fund rail assets

May

• Signed US$220 million transportation equipment financing facility with Dallas-based Bridger

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Financial Highlights


Quarterly origination growth continues to build …

… with very strong growth from US-based Commercial & Vendor Finance

Portfolio Growth


Portfolio Diversification


Portfolio Quality


Balance Sheet Capacity


Business Units


Commercial & Vendor Finance

Commercial & Vendor Finance

• 120 employees

• 5 Canadian & US offices

• Transaction size from $10,000 to $5 million

• Key Customer Segments

Transportation

Construction

Industrial & Commercial

Office & IT Equipment

Healthcare

Franchise Capital Campaigns

16

2014 Growth Drivers • Continued US commercial & industrial recovery • Deferred equipment replacement cycle • Favourable C$/US$ exchange for Canadian equipment manufacturers


Fleet Management

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Fleet Management

• 204 employees

• 5 Canadian offices

• Largest fleet management company in Canada

• US alliance with GE Fleet

• Transaction size from $500,000 to $40 million

• 40% of revenue comes from fleet management services

• 1,300 plus fleets

• More than 54,000 vehicles

2014 Growth Drivers • Deferred vehicle replacement cycle • Strong growth in 2009/2010 fleet registrations drive 2014 replacements • Expansion of fleet management services offering • Continued commercial & industrial recovery in Canada


Aviation Finance

• 11 employees

• 4 offices in Canada and US

• Transaction size $5 million to $150 million

• Medium and heavy lift helicopters, business jets, flight simulators & training aircraft

• Element Equipment Fund & Irish subsidiary in place

• Key vendor/program relationships with leading manufacturers:

• Eurocopter, Bell, Agusta Westland, Robinson

• Bombardier, CAE, Textron, Piper, Gulfstream, Falcon

Aerospace Finance

18

2014 Growth Drivers • Continued US commercial & industrial recovery • Demand for energy to fuel US economic growth • Retrenchment of key competitors • Engagement of US-based helicopter team • Deep relationships with key manufacturers


• 2 employees

• Based in Toronto Head Office

• Strategic relationship with Trinity Industries

• US$2 billion over two years

• US$100 TO us$200 million per quarter

• Trinity contracted as portfolio servicer

• Transaction size from US$75,000 to US$175,000

• Debt advance rate of 75% to 80%

Railcar Finance

19

2014 Growth Drivers • Continued US commercial & industrial recovery • Demand for energy to fuel US economic growth • Deep relationships with leading NA railcar manufacturer • Opportunities to acquire third party portfolios


Growth Strategy


Strategic Vision

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• Become a North American Leader in Commercial Finance with increasing focus on North American transportation markets

• Grow our diversified portfolio within our verticals by $10 to $12 billion by 2016

• Enjoy market leading positions (Top 3) in Transportation Verticals by 2015:

• Fleet Services & Road transportation

• Civil Aviation

• Railcar

• Element is now well positioned to execute on key elements of our vision:

• In Canada, we enjoy market leading positions in Commercial Finance and Fleet Management Services

• In the U.S., we have the platforms in place to realize substantial strategic growth

• Internationally, we continue to execute only on customer specific needs within our Aviation Finance group


Acquisition Strategy

• Strict acquisition screening including business purpose and fit into strategy

• Must fit into existing business verticals

• Credit standards must be within existing limits

• Rigorous due diligence

• Element Management area of expertise

• Valuation:

Must be accretive to both consensus earnings and consensus ROE

Analysis based on normalizing target’s financial information with an appropriate advance rate and

Element’s cost of funds

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2014 Outlook


2014 Originations

24


North American Portfolio Distribution

25

Canada USA

Portfolio Mix

2012 Actual 81% 19%

2013 Actual 74% 26%

2014 Outlook 58% 42%

Originations

2012 Actual 98% 2%

2013 Actual 69% 31%

2014 Outlook 50% 50%


Key Performance Indicators

26

Financial Revenue

Financial Expense

Operating Expense

Pipeline Aviation & Rail

Total Originations

Average Net Financial Margin

879 bps

238 bps

265 bps

$1.8 billion

Q2-2013

$397.9 million

640 bps

857 bps

269 bps

249 bps

$2.0 billion

Q3-2013

$410.4 million

588 bps

Q4-2013

830 bps

272 bps

558 bps

226 bps

$997.2 million

$2.0+ billion

Q1-2014

790 bps

255 bps

535 bps

222 bps

$1.1 billion

$2.4 billion

Documents

North America’s Source for Equipment Finance · Investor Presentation - May 2014 Key Performance Indicators 26 Financial Revenue Financial Expense Operating Expense Pipeline Aviation