John Sadler - Senior Vice President, Corporate Affairs & Investor Relations Steven Hudson - Chief Executive Officer Bradley Nullmeyer - President David McKerroll - President, Rail and Aviation business units Michel Beland - Chief Financial Officer and Chief Administrative Officer

Michael Overvelde - Raymond James Vincent Caintic - Macquarie Securities Group Tom MacKinnon - BMO Capital Markets Shubha Khan - National Bank Financial Geoffrey Kwan - RBC Capital Markets Paul Holden - CIBC World Markets Mario Mendonca - TD Securities

Thank you, Eric. Good evening, ladies and gentlemen, and thank you for participating in our conference call to discuss Element’s first quarter results.

Joining us today to discuss these results are Steven Hudson, Element’s CEO; Brad Nullmeyer, Element’s President; and Dave McKerroll who heads up Element’s Rail & Aviation verticals; and Michel Beland, Chief Financial Officer. A news release summarizing these financial results was issued earlier today and the financial statements and MD&A for the three-month period ending March 31, 2015 have been filed with CEDAR.

This information is also available on our website at www.elementfinancial.ca. As well a presentation for the company’s management’s comments has been posted to our website in PDF format.

This is located on the Presentations section of our website, and we invite you to open it now. Before we begin, I want to remind our listeners that some of the information we are sharing with you today includes forward-looking statements.

These statements are based on assumptions that are subject to significant risks and uncertainties. I’ll refer you to the cautionary statements section of our 2015 first quarter MD&A for a description of such risks, uncertainties, and assumptions.

Although management believes that the expectations reflected in these statements are reasonable, we can obviously give no assurance that the expectations of any forward-looking statements will prove to be correct. You should also note that company’s earnings release, financial statements, MD&A and today’s call include references to a number of non-IFRS measures which we believe help to present the company and its operations in ways useful to company and investors alike.

A reconciliation of these non-IFRS measures to IFRS measures can be found in our MD&A. I’ll just also point out that there was a typo in the news release in the second paragraph, references made to exiting 2015 with earning assets of $15.1 million in the original release, of course, that’s $15.1 billion.

With that, I’ll now turn the call over to Steve Hudson, CEO.

Thanks, John. And evening to everyone and thank you for taking the time to join us for this call.

As promised Q1 was another uneventful quarter with Element forming in line with our plan. Slide 4 of the deck in front of you speaks to our Q1 highlights.

First and foremost, basic after-tax adjusted operating income per share increased from $0.19 in Q4 to $0.21 in Q1, in line with consensus and more importantly on our way to our $1.05 forecast. Free operating cash flow per share increased $0.27 per share from $0.25.

Our leverage notched up from 3.9 to just under 4 times at the end of the quarter. Before tax ROA remained in the range of 3.3 versus 3.36 in the fourth quarter when fee income typically shows seasonal strength.

Increased leverage helped push pretax ROE through 11% threshold in Q1 versus 10.93% in Q4. Turning to Slide 5, the continuation of the trend towards increased contribution from fee-based income versus traditional spread income which started to manifest in 2014 following our acquisition of PHH’s fleet business continues.

The increased contribution that fleet management fees are making to total fee revenue is illustrated in the bottom chart, where fleet management fees accounted for $0.75 of every dollar we earned in the quarter. Looking at Slide 6, you’ll see another trend that continues in Q1, which was the influence of the U.S.

market on driving our originations and net financing income. A year ago our origination volumes were split 60-40 between Canada and U.S.

That ratio today is now approaching 25-75 as we continue to scale back our direct finance business in Canada and continue to benefit from strong demand for capital equipment spending in the U.S. The chart in the left illustrates this best, which shows the performance of our U.S.

vendor finance platform that we acquired from Marubeni approximately 2.5 years ago. This business just posted its 9th consecutive quarter of strong organic growth.

I’ll come back before we turn the call for questions and update you on our 2015 outlook and provide some perspective on consolidation opportunities that we’re seeing in the industry. I’ll now ask Brad Nullmeyer and Dave McKerroll to speak to the highlights from each of their four verticals.

Brad, over to you.

Great. Thank you, Steve.

We continue to be please with the performance of our integrated fleet management business and specifically its first quarter results. And see on Slide 8, our return on average earnings assets continue to improve in the quarter, despite seasonally higher fleet management fees in the first - fourth quarter compared to the first quarter.

The fourth quarter seasonality in the fleet business is mainly result of variations in maintenance and repair patterns by way of example, scheduling of preventive winter maintenance and installation of snow tires. The impact of this seasonality will result in an increase in our fourth quarter fee income when snow tires are installed and then again in Q2, when they are replaced to summer tires.

In addition, in the fourth quarter, we’ll see increases in repair spend as many of our customers will complete year-end vehicle repairs. The first quarter of this year saw - also saw decline in the Canadian BA rate, which resulted in approximately 10 basis points lower top line yield, which was offset by a corresponding reduction in our cost of funds and had no impact on our net interest margin for the period.

The 30 basis points reduction of seasonal variation in net interest margin for the period was more than offset by further reductions in the adjusted OpEx ratio for our fleet business from 3.5% in Q4 to 3.1% in Q1. Our objective is to exit 2015 with this OpEx ratio at or below 3% in the fleet vertical.

As a result, our return on average earning assets for the period improved slightly from 3.2% in Q4 to 3.3% in Q1. Finally, while Q1 2015 is not directly comparable to Q1 2014, as the first quarter of last year, our fleet business was only operational in Canada.

Having said that, you will note with our new combined North American fleet business platform and funding structures, both our net interest margin and our return on average assets are now significantly higher, demonstrating the benefits of scale in our fleet business on a North America wide basis. On Slide 9, our Commercial & Vendor vertical.

We see the impact that shift away from direct originations in Canada to the - to a Vendor model combined with the continued increase in origination volumes generated from our US-based Vendor business. With these changes made in Q4, our Canadian portfolio is now right-sized for organic growth.

Our revenue and net interest margins in the vertical in Q1 are in line with our expectations. The variance from Q4 of last year is mainly attributable to the seasonally higher syndication and other fee income that occurs at the end of the year.

The variance with the same period last year is due to comparable level of absolute fee income, but is earned on the smaller portfolio of average earning assets resulting in a higher yield reported in the first quarter of last year. In the first quarter of this year, we pushed our OpEx ratio in this business vertical below the 2% threshold for the first time.

This resulted in ROA due to the upper end of the range of our quarterly ROAs earned last year, which range from 2.2% to 2.7%, and is tracking slightly ahead of our full-year target for the business. Overall, we are extremely pleased with the performance of our Commercial & Vendor business in the first quarter of this year.

I’ll now hand the call over to David McKerroll to talk about our Aviation and Rail verticals.

Thanks, Brad. Turning to Slide 11, I’ll briefly touch on our aviation finance vertical before spending a bit more time on our rail finance vertical.

Aviation originations for the quarter were €265 million, yields were strong again this quarter due to fee income syndication being with a stable OpEx ratio running at 80 basis points. This translated to improve ROA of 5.9% from 5.6% in both the previous quarter and the same three-month period last year.

The backlog of transaction opportunity in this business remain strong and we are on track to meet our targets for the rest of the year. On Slide 12, ROAs that we put up in our rail finance vertical were in line with our expectations and put us on track to meet our published 2015 outlook.

Originations in this period were $161 million, up from $137 million in the previous quarter. This is in line with our plan for the year-end, as we expect increased volumes from our Trinity program in the remaining quarters of 2015.

Yields and OpEx in this vertical comparable to previous quarter bringing the ROA in at 3.2%. The attributes of our rail portfolio remain very attractive.

We continue to have the youngest fleet in North America and as well diversified by car type, lessee, industry, commodity and lease term. Turning to Slide 13.

Earlier this month, Transport Canada and the Department of Transportation United States published new regulations governing the specifications for tank cars used in transporting flammable commodities. As expected, these new regulations will have a minimum impact on the returns of our Rail business.

The average age of our tank car fleet inflammable service is only 2.2 years. And we have a small fleet of the older DOT-111 cars, which are the cars most affected by the regulations.

We only have 50 of the jacketed DOT-111s in crude service, where modification costs are estimated to be about 43,000 per car, and we only have 473 of the unjacket DOT-111 and virtually all of these cars are in ethanol service. Tank cars and ethanol service have an eight-year window to comply with new regulations, and we’ll be working with our partner Trinity to develop the optimal plan for either modifying or repurposing these cards over that eight-year period.

It should be noted that in all of our lease agreements, we’re allowed to increase lease payments in the event of regulatory required modification. The majority of tank cars in our flammable service are the newer good faith CPC-1232 tank cars.

Jacketed CPC-1232 cars only require minimum modifications and any unjacketed CPC-1232 cars we have in our portfolio are under leases that have a special class, where a 100% of the cost of the modification is the responsibility of a high-quality resi. In terms of the opportunity that these new regulations create, we see - we expect to see incremental origination opportunities arising from customers, looking to modernize or pace their tank car fleets to bring them into compliance with the new regulations.

I’ll now hand the call over to Michel Beland, Element’s Chief Financial Officer.

Thank you, Dave. Slide 15 look at the key metrics from the income statement.

Financial revenues for the three-month period ended March 31, 2015 increased to $187 million from $176 million in the previous quarter, generating net financial income of $134 million for the quarter versus $126 million in the preceding quarter. Adjusting - adjusted operating expenses were $57 million for the quarter versus $54 million in the immediate previous quarter.

Adjusted operating income before income tax increased by 9% to $78 million for the quarter versus $72 million for the previous quarter. After-tax adjusted operating income or adjusted operating income after income tax was $60 million versus $55 million in the preceding.

Slide 16, provides a balance sheet snapshot. Total assets were $12.5 billion at the end of the quarter, an increase of 11% from the third $11.3 billion at the end of the preceding quarter.

Also you can see that leverage has continued to increase in keeping with our guidance to improve the efficiencies of our capital structure. The company’s tangible leverage ratio computed on the basis of the most restrictive borrowing covenant was 3.91 as of March 31, 2015 compared to $3.71 as of December 31, 2014 and $1.81 as of March 31, 2014.

The company expects this leverage ratio to continue to increase through 2016, as the capital structure is optimized in terms of the mix of investment grade debt and equity. Slide 17 provides a number of operational yields expressed as a percent of average earning assets, financial revenue expressed as a percent of average earning assets with 7.9% in Q1 versus 8.23% the previous quarter.

As was discussed previously, the decline over the previous period is mainly attributable to the lower level of syndication activities during the quarter as a percent of average earning assets. Interest expense expressed as a percent of average earning asset was 2.27% in Q1 versus 2.35% in the previous quarter.

As a result, average net financial margin yield for the three-month period decreased from 5.88% in Q4 to 5.63% in Q1. Offsetting this lower margin yield, adjusted operating expenses declined to 2.33% of average earning assets for the quarter versus 2.52% in the immediate previous quarter.

Adjusted operating income before income taxes was 3.30% of average earning assets for the quarter versus 3.36% in the immediate previous quarter. On slide 18, provides both before tax and after-tax adjusted operating income as a return on average common share equity, which increased by8 basis points to 11.01% and 8.28% respectively from 10.93% and 8.20% in the previous quarter.

Slide 19, provides a number of per share amounts. Book value per share was $10.20 versus $9.34 reported at the end of the previous preceding quarter.

Free operating cash flow per share or adjusted operating income before income tax increased to $0.27 per share in Q1 versus $0.28 per share for the previous quarter. After-tax adjusted operating income per share was $0.21, in line with consensus versus $0.19 in the previous quarter.

In addition to this headline basic EPS number, we have also calculated a fully diluted after-tax adjusted operating income per share on a pro forma basis at $0.20 per share and the assumptions that all outstanding dilutive securities are fully exercised on the last day of the quarter based on a closing share price on that day. Slide 20, we’re showing non-current and impaired asset as a percent of finance receivable, as well as our allowance for credit loss.

Although these measures are in plan and indicative of high-quality of the financials receivable that we’re putting on a balance sheet. In terms of our balance sheet capacity, the graph on Slide 21 shows that we have committed funding facility amounting to $12.1 billion, of which $3 billion was unutilized as of March 31, 2015.

But this graph does not illustrate is the incremental funding capacity that is available to the company through the rate of the asset-backed securities market, which we utilize on a regular basis to permanently fund accumulated portfolio of rail and fleet assets. A number of investors and analysts have asked for additional color on the various factors that contribute to the beginning and ending balance of our earning assets during the period.

While this information is always been including in the notes to our financial statement, I’ve highlighted these in the next two slides. Slide 21, we’re showing an opening balance of $8.467 billion of finance receivable for the period together with $1.3 billion of new origination during the period and $946 million of principle repayments.

Syndication activities reduced the finance receivable book by $43 million and $56 million of finance leases were moved over to the operating lease book. Our foreign exchange translation added a further $520 million to close the period with a total of $9.2 billion in finance receivable.

On Slide 23, we’re showing an opening book balance of $1.3 billion of operating lease for the period with $174 million of new origination during the period less $9 million of amortization and disposals. We then add the $56 million of operating lease that we remove over from the finance lease book and again $123 million of foreign exchange translation to closer period with $1.6 billion of operating income.

On Slide 24, we’re reaffirming our balance sheet as look for the end of 2015, when we expect our total earning asset of more than $15 billion and total debt of $13.4 billion. We have assumed in the total earning asset tuck-in portfolio acquisition that we funded with depth, and if need to be the issuance of additional preferred share, that would put our tangible leverage at the end of the year at just over 4.5 to 1.

I’ll now turn over the call back to Steve for his closing comments.

Thanks, Michel. There is a lot of talk about acquisition opportunities in light of the announcement made by GE last month, concerning the plan to trim the size of GE Capital.

I want to comment on that in the context of the evolution of the North American commercial finance industry over the last seven years. If you can turn to Page 26, I think we can put this evolution and perspective from our viewpoint.

The commercial finance industry that we are seeing today had its beginnings back in the global financial crisis. This was an industry that’s our new business declined by 30% between 2008, 2009.

There was an immediate retrenchment of some of the number of participants shrink by attrition and self-selection, as some companies stopped writing new business and put their portfolios into run-off. In the renaissance cycle that followed.

The new business volumes that evaporated in 2009 began to come back in 2011, 2012, when volumes increased by more than 16% in each of those years. Old equipment was getting too expensive to maintain, and it was now being replaced.

The surviving players in the industry took the opportunity to repair the balance sheets, and saw the entry of some new players that were able to capitalize on access to private equity in public markets. However, a little bank funding - little bank funding was still generally not available.

In the current consolidation cycle, banks and pension plans are now becoming active in both the acquisition side and the funding side of the industry. New business volumes are being driven by GDP growth, and not just playing catch-up for the deferral equipment from 2000 but more importantly funding the growth in the manufacturing renaissance in the U.S.

In this stage, we have strong players buying other strong players, where consolidation is being driven by economies of scale and funding. This is the table that was already been set, when GE decided to take the step of scaling back the focus of GE Capital.

In terms of how this impacts Element, without a double, the decision will fundamentally change the landscape the commercial finance industry. This transformation may create opportunities, both near and long-term for all industry players.

Meanwhile, notwithstanding the industry - this industry news, Slide 27 makes it clear, Element is executing on its 2015 business plan that is based on organic growth across each of our four core business verticals, supplemented by couple of tuck-in portfolio acquisitions that we can fund with additional debt. If acquisition opportunities present themselves, they will need to be within our current verticals and offer significant economies of scale, and compelling accretion for our shareholders.

However, our focus remains on executing our 2015 organic business plan. Operator, that concludes our prepared remarks.

We’re now pleased to respond the questions from our analyst.

All right, thank you, operator. Hello, everyone.

The trend that most caught my attention in these results is a sharp reduction in OpEx, that you were able to achieve in both fleet in the C&V verticals, particularly in fleet, where you’re getting closer to that 3% target faster than unexpected. So the question is, was there any seasonality or play here, as there was in the fee income line, or we simply been able to take out costs at a more sustainable basis, such that we can see the earnings margin in these businesses rise to a new level, once the fee levels bounce back, and in particular in fleet, have you just been finding more synergies on the integration than you’d initially thought?

Yes, it’s Brad. So very little seasonality in the OpEx, there is a little bit of variability in there, but not that much.

It is primarily putting together of the North American platform. If you go back, we had our Canadian platform, we were running the old TLSI platform, the GE platform that’s all put together into one North America customer facing focus platform and that really, really drive synergies.

We’ve also been able to get the mobile applications in PH&H into the marketplace. And that’s simple things like car ordering, vehicle ordering which used to be done by someone having to phone a live operator at our facility and ordering a car, which would take upwards of 15 to 20 minutes sometimes, almost 90% of those now are being done through mobile applications and that really drives those synergies.

So we had originally stated we’ll be driving towards that 3% and will exit 2015 with that. The speed of that your comment, your question is really just the mobile applications and putting together our platform onto the North American all PH&H platform, so the new North American Element fleet platform.

Right. If I could just maybe follow-up on the structured finance initiative.

On the rail side, now that we’ve got a little bit clarity on the new tank car regulations and you can better, I guess assess the all-in cost of acquiring retrofitting cars, are you still seeing an opportunity to structure a sizable fund there? So I guess potentially how big and what sort of timeframe?

Yes, I think on the structured finance side of the thing, the railcar sort of modifications that sort of held back I think certain orders from shippers and lessees to see how the regulations were finalized. We are looking at bringing some fund structures later this year that why don’t think will be just focused entirely on modifications, but origination opportunities that the modifications going to bring in and fleets acquiring or shippers looking to acquire new cars should help with their opportunities of - to put in a funding structure or just put it on balance sheet.

All right, thanks all.

Hi, good evening, guys. Thank you.

So first on, I guess, the GE Capital sale, I know that the consolidation opportunities is an obvious question, but also wanted to understand to your point how that’s affecting the competitive environment and if there are any more immediate near-term organic opportunities to you from the GE sale.

All right, Vincent, it’s Steve. I think we’ve talked in the past about - the fleet business to me are the fleet industry looks a lot like the credit business in the mid-80s when you have the top 10 players providing 30% of the market share.

Today that top 10 is almost 90% and I - we don’t have a 10, we have a top three or four. And I think that consolidation phase is continuing.

The GE announcement is obviously interesting, but notwithstanding that announcement I think that consolidation phase continues. We obviously are focusing on portfolio tuck-ins as we’ve stated through the piece.

So we kind of stayed the course, organic growth and look for opportunities. Obviously, we don’t comment on corporate development activities.

Got it, thanks. And then on your balance sheet you highlighted that you have about $3 billion in commitments available to you.

Are there - could you disclose what other capital is available to you, so for example how much you think is available to you from your fleet ABS, your preferred equities, if you could update us on how you think how much is available there?

If you look at the - like I say, we have $3 billion on the balance sheet available now to fund the ongoing business. As we said, we tap the ABS market both for the rail and the fleet business.

We close on the $405 million ABS transactions for rail, just about a month ago, month-and-a-half ago, and we did $850 million closing of our fleet business. So these are tested market and this is our preferred route to fund these transactions.

On the fleet side, for example, we went out with a $500 million offering and it was substantially oversubscribed. So we believe there is sufficient market there to fund the - all these origination for those two vertical this year.

I think as a rule of thumb, Vincent, you can use a little under $2 billion of ABS availability for both rail and fleet.

Got it. And then any thoughts on your preferred equity availability and how you think about your - I guess, your equity use to grow the business?

Yes, as you know, as we mentioned in the past, our perpetual preferred shares, which is a Canadian only vehicle, is we’ve accessed that market three times. We can access it fourth time.

We are waiting to get investment-grade ratings from a Canadian rating agency, which will allow us put a P3 rating on those prefs. That P3 rating will allow us to issue but a lower coupon, so that’s Q2, Q3 initiative and prefs are obviously accretive to our common shareholders, there is a limit of 20% of the shareholder’s equity but when capital was needed that will be our go-to position.

Got it. Thanks so much, guys.

I appreciate it.

Yes, thanks very much, couple of questions here. Steve, just to go back on the GE thing, maybe you can talk about how much actually you are running into them and they’re essentially exiting three of the four verticals that you were participating in.

And maybe can elaborate a little bit on this to how much you are running into them in terms of RFPs and whatnots? Just trying to get a feel for how the markets can be even further dislocated I guess with them gone.

Tom, we’re not seeing any change of business from our competitors including GE, it’s sort of business as usual. So nothing has really changed in our interest.

Obviously, in the rail sector we are in a strategic relationship with Trinity. So we don’t compete directly against GE Rail at the starting point.

But in vendor and fleet it’s business as usual, whether it’s GE, whether it’s LeasePlan, whether it’s ARI. So we haven’t seen it changed on no dislocation.

Okay. And then, maybe a comment or a question for Brad, if the - in the commercial and vendor space with the banks kind of getting in maybe perhaps little bit more involved in that and they presumably have a lower funding cost.

What kind of advantages do you bring to the table here in the commercial and vendors space to be able to compete with them?

Yes, so Tom, as you know that business has never been rate driven, it’s never been about that, because from day one if a client is looking for the lowest rate they don’t come to the - they don’t come to us. We’re not in that marketplace.

So the banks are getting the win on their cost of funds by acquiring some of our competitors, which we see if you look at the Huntington Bank transaction recently. They’ll take that transaction.

There won’t be any difference in the gross yields at that operations being able to get together because they’re in a vendor operation like us. Yet, they’ll have the cost of funds, which they’ll then benefit from.

So what we’re seeing is, if you’re looking at how we do a Bobcat Doosan transaction, because that’s all manufacturer-driven. It’s already on the street at 0% interest rate and from that 0% interest rate to our yield that you see here is all driven by the North American program underneath that with the manufacturer which has everything as you know from remarketing right through to front-end support.

So again, we’re not in that marketplace, we don’t have branch networks, we don’t have billboards to the lowest cost of funds because we originate through the manufacturers. The rate is not the number one concern.

It’s all about service. It’s all about me being able to service Bobcat dealer in Wisconsin this morning, together with the manufacturer.

And then ultimate control of that portfolio by the manufacturer, so that the client, the end user never goes and buys another piece of equipment, that’s the power we give to our manufacturers.

The net interest margins in the commercial and vendor were a little bit lower quarter-over-quarter. Was there some sort of seasonality associated with that or how should we be looking at that?

Yes, it’s again seasonality, because it doesn’t take a lot in the quarter to drive that number because of the net earning asset. So it’s seasonality and also the syndication income differences that has some - that’s quarterly driven syndication income, so those two things together.

So we talked about last time, when your questions last time about the sustainability of that, what we’re seeing is the overall sustainability of the ROA in that business through a combination of net interest margin, the cost of funds and then these programs which are providing us with more yield income than the banks or otherwise getting. So it’s a combination of those things.

Okay, thanks. And then a question for Michel on Slide 17, the financial revenue margin at 7.9%.

With respect to the finance business I assume that uses the principal balance, right, and not the receivable, is that correct, the average principal balance instead of the average finance receivable?

Your top-end of the basis of calculating in the average…?

Yes, that’s right, yes.

Yes, it includes only the leases - either finance lease or operating lease, so we don’t include in that the receivable, I guess, in the average calculation number.

So it just uses the principal balance of finance receivables and not the net finance receivable that shows up on the balance sheet, correct?

That’s correct.

And what about all the other ratios on the sheet and do they use the same denominator?

They’re all based on the same basis, yes.

Okay. Thank you.

Thanks. Thanks again.

Good evening. So perhaps a follow-up on the OpEx ratio, if I have interpreted Brad’s comments correctly, I think, looks like all the cost synergies that you were targeting in fleet of pretty much - pretty well been realized by now.

So would it be fair to say that any further improvement in the consolidated OpEx will be mix-driven or how should I think about that?

So for commercial and vendor and fleet, you’ll see a combination of mix. You’ll see a combination of scaling obviously as a denominator growth.

Most importantly your first comment is correct. Those synergies are now in place and being recognized every month.

We continue to see increasing improvements in our OpEx through things like mobile applications as we take the base platform, there’s a conversion that took the base platform so that we can run our business and then as we start to drive efficiencies out of that my order - my example of ordering cars online. So we see lots of mobile applications coming through in that business.

Our commercial and vendor business is primarily about the scale of that business and just being more efficient on the way we do things. So mix will affect it, the size of the business, and then we are driving substantial efficiencies through there as we move to mobile applications primarily in our fleet business.

The other impact will be the tuck-in portfolios that Brad, Michelle and myself referred to earlier, those happen to fall, because fleet and rail will come with less people and will drive lower OpEx.

Okay, got it. And then, maybe a question for Dave, I guess in the Rail segment, I know the - isn’t the Trinity agreement is good through the balance of this year, but has there been any progress towards renewing or expanding that agreement?

And I believe you’re also looking to augment those - the purchases from Trinity with your own origination. So how far away is Element from doing so?

Yes, first with the Trinity and Trinity and ourselves are committed to completing the 2 billion program by the end of this year. But that doesn’t mean our - that ends with Trinity.

I mean, we’re both - want to continue to do deals together and build that relationship. We haven’t talked about a lot about 2016 yet, we’re focused on getting 2015 completed.

In terms of building our own transactions outside of Trinity, we’re working on that. We’ve hired staff in the last - or, sorry, the very end of last year and the first quarter of this year and we are calling on clients in our own network and they are building relationship with others.

Okay.

I would get back just as a way of Trinity - kind of - I think we have rephrased that $2 billion over two years being the initial program, I think would have been phrased better, because it’s the - the program works for both parties and clearly we’re planning on quarterly draws past 2015. So I think you can assume it will continue.

Yes. In the service - servicing agreement that we have in Trinity continues for years many years past..The - sort of two-year, $2 billion is more of our initial intention as opposed than a finite program.

Okay, got it. Final question on funding, if I’m mistaken, I think you are looking to come to the market for an offering of MTNs in the U.S.

at some point, this bring up maybe even this month. Is that timeline still correct, or is in the offering pretty much contingent on getting another investment-grade rating beyond the one you already have from grill.

[ph]

That’s a good question. We are coming back to market MTNs, and it will be a Canadian and U.S.

offering cross-border. It will require a second rating, a Canadian rating, which we’re working on.

So once again it’s coming to - coming to a theatre close you. The - but I would say the timing of that is May/June, related to Q2 activity, so…

Okay. That’s all my questions.

Thank you.

Hi. Good afternoon or good evening.

Just going back to the Slide 24, when you were talking about the potential for two tuck-in acquisitions, I think from the presentation you had back in December, you were talking about finance asset, but $12.5 now to kind of going to 2015. And then you’ve also increased the guidance from $0.99 to about $1.5.

I’m just wondering with this the tuck-ins and anything whether or not FX related, is that $1.5 still the guidance that you have or is it these types of transactions would be incremental to that?

Yes, the $1.5 is the guidance. The tuck-ins are, I would not say, acquisitions, but tuck-in portfolios.

What we haven’t put enough $1.5 would be the accretive nature of those, expense savings and other things. So we’ve just put in about five, what would be the spread income on those two portfolio or three portfolio deals.

So there is probably some upside upon completing those tuck-in portfolios, as we took cost out.

Okay, perfect. And then just the other question I had for brad going back to the revenue yields for the fleet and the commercial and vendor finance, kind of being down, I think it was on the fleet explanation was a little bit on the maintenance side and there was I guess a couple of times a year that it kind of goes up.

So is that the way to think about it at kind of maybe every second quarter we get movements either up and down depending on the quarter and then on the commercial and vendor finance 7.9% in Q4, is that kind of maybe more indicative or is it somewhere in-between the two on a normalized basis for syndications?

So for fleet there is a normal cadence of the seasonality there. It has two effects of it.

One is the ordering of new cars and that is two effects, you will see our originations throughout the year have a different cadence as model years come in. And the opposite side of that is as the cars get towards their last year of their useful life, the repairs also goes - go up in that.

So you see those kind of offsetting each other. Then we see another cadence in the repair facilities which are driven by winter, for example, so my snow tire example, there are more accidents in the winter time.

This was a funny winter where it was very cold. So it - what we saw is people actually driving, some of our major clients weren’t able to have cars on the road and some of the states during certain days and a day or two without trucks in the road is a substantial difference in that.

So you will see a normal underneath there is just two normal cadence of the seasonality part of that. And in our commercial and vendor be somewhere in-between the two of those.

What you see is in Q4 heavier seasonality and syndication is other fee income that we see in Q4, which is driven off of syndications and also manufacturers as they get towards their own internal targets for a lack of better term, there us more details that would come out in that last quarter. So we see more of the portfolio looking over.

So a supplier will work on his portfolio in Q4 to get his sales number. What that means is, we take out an old lease, put a new one in and as a result of that we get fees, termination fees, every marketing fees, and what no.

So the seasonality here is different under those two portfolios.

Okay. And I’m sorry, maybe if I can ask one last question, just on the rail car side.

Is there a provision similar to what I think you have on your aviation business wherewithal these regulatory changes coming down the pipe if you have customers that want to, instead of retrofit they want to replace it, so they can do so, but you guys kind of get a make whole fee and then lease on the new railcar?

It depends on the trend. We have certainly since we’re - we knew modifications were coming, so lessee has a few options, but the cost is fully on him.

In other operating leases, there is generally just a standard cause for modifications that if modification is made, then you will have the right to raise the lease rate by a predetermined increment.

I think in all circumstances, our principal was protected with a make whole interest if you’re rolling into a new car you might give a bit on the make whole in exchange for a longer-term lease of the higher yield.

Okay, great. Thank you.

Thank you. First question is with respect to the aviation originations, they were quite strong in the quarter.

So wondering what in particular was driving that given you’ve talked more price competition at - in that area in the past.

Yes, I think with aviation, is a lumpy business. So we have large transactions that are going to fall into any particular quarter so we’re…

I think Paul what’s picked up is, you are right about the med-to-heavy lift helicopter that market is flat, not growing. The corporate aircraft market has recovered in North America substantial recovery, so we’re seeing - we finance corporations acquiring corporate aircraft, so that business was very strong in the first quarter.

Okay. That’s kind of what I was looking for, which type of aircraft you’re financing there, perfect.

Want to go back to the fleet management fees, one of the reasons, you were so excited about the PHH transaction was the service capabilities and potential growth in fleet fees. But we haven’t really seen that comes through in results, yes, you are saying some of that seasonality in Q1, so I guess, my question is when will we start to see that growth come through and results as you build your way up to that 50% target you originally set?

Yes, Paul, so you’re right, in that the - underneath this, we do see the growth when you factor out seasonality when we compare our Q1 this year to comparable Q1 last year for the PH&H provided numbers. We didn’t obviously own it.

We have those internal numbers. So we do see the growth there.

Q2, you’ll start to see that both the seasonality difference come-in in reverse or improve and then you’ll see the growth. So we expect to see that.

We are already seeing it in Q2. So it’s just - on the surface it looks like it’s not growing, but underneath it is and you’ll see that when the seasonality gets pushed through.

Okay. Fair enough.

And then, I want to go back to that foot note you have on Slide 24 with respect to the two tuck-in portfolio transactions. In terms of the sequence of events for completing those acquisitions would you need to able to issue the investment-grade debt first, or could you potentially do it concurrently?

Yes, we don’t need the investment-grade debt to complete them, Paul. If they’re in the fleet side you have your advance with senior line and your ABS through Chesapeake or Fluor to take it out.

And on the rail side, you have an ABS. You advance it and do an ABS, so it’s not - neither is dependent on a midterm note program.

And again, I don’t characterize these as acquisitions, because you’re really buying a block of business and customers, and you will be picking up some employees, but you’re likely to reduce, substantially reduce that headcount. So we’re not acquiring a business per se, we’re acquiring a portfolio of business with customers in an attractive price.

Okay. And because of it say the portfolio of assets rather than an operating company you’re kind of technically not paying for equity and therefore don’t need the...

Yes, you need to finance your equity in the rail business, so it’s about 82% to 85% net of advance rate by the time you get to ABS, and in the fleet business it’s 92% to 96% advance rate. We’re confident that we can accomplish both in our current balance sheet.

Okay. Okay.

Good. Final question, I’ve heard a lot of chatter over the last few months that you would potentially contemplate selling particular verticals in order to expand in other verticals, so wondering if you could address that type of speculation and how you think about your business mix going forward.

Sorry, sorry, Tom. Yes, Paul, we don’t…

Hello.

Yes, we’re here.

You can hear me?

Yes, I heard - basically, I think your question is what’s our position on vendor finance?

Well, no, not necessarily vendor finance. There’s has been some talk that maybe you think about selling whether it’s vendor finance or aviation, selling those verticals to may be expand in another verticals namely fleet.

So wondering…

Yes, I wouldn’t comment on corporate development activities of company, but I would comment on is that we - as you know on that chart we show the four wall contribution, our businesses were very focused on the ROA contribution of all our businesses. And our view, they have to get to that 3% number to hit our ROE target.

So we continue to asses that. And as managers of capital, we’re going to direct capital where it’s best put and that being the highest ROA, risk-adjusted ROAs.

Okay. That’s all I had.

Thank you.

Good evening, I have more of a technical question, perhaps for Michel. On Page 21 of the MD&A, you indicated that the average finance receivables, so I’m not referring to the - I’m not including the average equipment under operating lease, so just the average finance receivable, about $8.1 billion.

And I’m trying to sync that up with what you disclosed on Page 22 and elsewhere in the MD&A, and I’m referring to Page 22 now of the presentation, where you referred to the finance receivables about $8.5 billion at the beginning, $9.2 billion at the end. And from what I can tell, those numbers pretty much relate - they relate to the same thing.

So I’m just not sure how the average could be about $8.1 billion, when the opening and ending are both higher than $8.1 billion, unless there was some sort of timing issue here.

I’m just trying here, I’m just on Page 22 of the - I’m just looking the reference on the MD&A.

So Page 21 of the MD&A, finance receivables $8.1 billion.

Yes.

Average finance receivables, so Page 22 of the presentation.

Yes, which you on the Page 22 of the book, you get a - obviously, the large impact here of the foreign exchange, which is kind of about 10 basis point from December to the end of March. So this is just a snapshot in time and you also have the schedule of the payment and originations, which you see here is the timing of some of the issues and also the conversion rate and the average assets are converted that the average foreign exchange rate during the period or during the specific months that we do the calculation.

So if you take the balance and you take - and you also have to factor in the payments that are coming into this which is going to reduce the number below that, and if you apply a weighted averaged FX rate as opposed to a FX at the end of the quarter, they’ll give you the - that will give you the difference, so it will explain the difference.

Just for clarity here, like we’re talking about a $900 million difference from what you would just calculate by taking the straight average.

Yes.

And you’re saying that currency would be like currency would happen evenly throughout a quarter. So perhaps it’s better if we take this offline, I just - that is a - that probably warrants like a little bit - a little clear explanation, but I’ll follow-up on this offline.

Okay. Like I said, the only difference is the release to the FX and the way that the average is calculated on the FX side and which based into account, the opening balance, but so you have $950 million with the repayment there that takes the balance and the timing of the origination.

There’s lots of these origination that happen, for example in the aviation that happen on last date of quarter. So they’re weighted for that.

So once you factor this - and our average is not computed, the opening - it’s a daily average computed, so certainly timing and FX will have a major impact on that.

Okay, thank you.

Just following with Mario’s question and that was the reason I asked how the 7.9% numbers were calculated, Michel, on your sheet and you said they were based on the principal balances and not on the - right? Maybe that’s the explanation then why the average - because the average is based on principal balances and not on finance receivables, is that correct then?

The average finance receivable is calculated as the daily average of the principal balance of the…

Yes, that’s the key thing. Principal balance, that’s the key operative here.

But then net book…

Right, right, the key operative is based on the principal balance and not on the net finance receivable but it’s based on the average principal balances, correct?

That’s correct.

Yes, okay. The - oh, maybe - a question with respect to the fact that the fleet really defers the key help - or from the rail, pardon me, it just defers the tax - the time that you have to pay tax.

So I was wondering just based on the rail business currently on the books, how many - if you didn’t write any more rail at all, how long would you not have to pay any cash taxes? I’m just trying to get the impact of another year’s worth of originations on your ability to continue defer paying taxes?

I think the deferral of the actual book today without putting anymore business in?

Yes.

Oh, yes, you’re probably in a differed tax liability for probably 8 to 10 years. Just factoring this, there are obviously other assets or assets on the balance sheet that give raise to deferred tax liability in the U.S.

and namely goodwill for example an intangible asset. But just looking at the rail book in isolation, I guess, you’ll have a - you’ll be creating a deferred tax liability probably for 10 years to come.

Okay. Thanks for that.

Thank you. I wanted to ask you a question on the repayments of principal, so again on Slide 22 of the deck.

So it’s sort of the second quarter on a row we’ve seen an amount around the $940 million, $945 million mark, which implies around 12% of the beginning balance. I mean, that would 12% quarterly suggest an average life of a lease of just over two years, which doesn’t seem to quite line up.

So wondering how we should be thinking about that.

But, Paul, you got to do it on a portfolio. If you take a $100,000 lease today and you run over four years, then you add another $100,000 second year, and a $100,000 in three years, and $100,000 in four years, that’s a mature portfolio.

You can’t take a single $100,000. So we can send you a schedule that we sent to other analysts that show what a mature portfolio runs off.

Sure.

You have run-off for each individual lease. Just…

Yes, the problem, what you see - I think what you’re missing here is the beginning balance of $8.4 billion is really an amortized number. It’s not the initial principal of the book, but it’s an amortized number.

So on a matured book, I guess, the book value, which is $8.4 billion, is probably half of what it would be as a new portfolio.

I understand, okay. Got it.

Paul, we can send a schedule we sent up to other analysts and unfortunately we must have missed you, but we can walk through what a mature CMB portfolio looks like, but your number is right. It’s going to be $900 million of - now it’s the exact opposite by the way in the rail and fleet, because of long duration - sorry, rail and the aerospace because of long duration assets.

Okay. Thank you.

And by the way, we want to pay off, because that brings the credit profile down. These are all put on to be self-amortizing liquidating credits.

The good news is that these are all service pieces of equipment. So as we’re amortizing off, there is a new piece of equipment back on to replace it.

Hi, Michel, your exchange was - was inconsistent with my understanding of Page 21 of the MD&A and Page 22. Are these two numbers, the $8.1 billion average is calculated on the same basis as the presentation on Page 22?

The $9.2 billion you have on Page 22 is the finance receivable that is shown on our balance sheet. The average receivable is based on the earning assets on the balance sheet, so therefore you would already exclude a number of other items, credit loss for example, fleet receivable, accruals and that sort of thing.

So that’s why you have a higher number on Page 22, because it’s all inclusive of all the average assets. It only looks at the average leases and operating leases to calculate the average, because that’s the basis on which the interest is earned.

So the reconciliation between the - call it the $8.2 billion on Page 21, which is of course an average, I understand, and the $9.2 billion. What amounts would you subtract off to make those two numbers actually like analogous?

Let me just look, I guess, we have that information on the financial statement in one of the notes, let me just pull the note out for you here. So if you look on Page 3 of the financial statement, under note 3, you’ll have a roll forward here of the assets to the $9.27 billion, that’s on the Page 22 of the debt.

So the average will be based on the - calculated on the $8.4 billion, which is a gross investment less the –on our number.

Yes, I understand it now. Thank you.

Okay.

Hi, Eric, thank you so much for your help. Ladies and gentlemen, thank you for participating on our call this evening.

We will look forward to reporting back to you when we file our second quarter financial results and have a conference call in mid-August. Until then, thanks very much and we’ll talk to you soon.

Bye-bye.