John Sadler - SVP, Corporate Affairs and IR Steve Hudson - CEO Brad Nullmeyer - CEO, Element Fleet David McKerroll - President, Rail and Aviation Michel Beland - CFO Dan Jauernig - COO Jim Nikopoulos - SVP, General Counsel

Vincent Caintic - Macquarie Peter Rutledge - National Bank Financial Geoff Kwan - RBC Capital Markets Mario Mendonca - TD Securities Nick Stogdill - Credit Suisse Tom MacKinnon - BMO Capital

Thank you, operator. Good afternoon everyone.

Thank you for participating in our conference call to discuss Element’s second quarter results for the three-month and six-month period ending June 30, 2016. Joining us today to discuss these results are Steven Hudson, CEO of Element Financial Corporation; Bradley Nullmeyer, CEO of Element Fleet; David McKerroll, President of Element’s Rail and Aviation vertical; Michel Beland, Chief Financial Officer of Element Financial; Dan Jauernig, Element’s Chief Operating Officer; and Jim Nikopoulos.

Element’s Senior Vice President and General Counsel. A news release summarizing the second quarter financial results was issued earlier this afternoon, and the financial statements and MD&A for the three-month and six months period ending June 30, 2016 have been filed with SEDAR.

This information is also available on our Web site at www.elementcorp.com. As well, a presentation that accompanies management’s comments has been posted to our Web site in PDF format.

This is located in the presentation section of our Web site 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 statement section of our 2015 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 the 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 that are useful to investors.

A reconciliation of these non-IFRS measures to IFRS measures can be found in our MD&A. With these introductory comments complete, I’ll now turn the call over to Michel Beland, Chief Financial Officer.

Thank you, John. I'd like to take a few minutes and take you to Slide 5 to review a few of our key operating results for the quarter.

The appreciation in Canadian dollar during the quarter over the other reporting currency resulted in the negative impact of 6.3% to the company's earnings during the quarter and as a result, we’re reporting a currency neutral after tax adjusted operating income of $0.34 a share compared to the $0.32 as reported a loss of $0.02 per share from FX rates. Total earnings assets were $19.3 billion as of June 30, 2016 in line with $19.4 billion at March 31, 2016.

Originations were $2.2 billion during the quarter a slight increase over the $2.1 billion in Q1 2016 with over 78% of these coming from our Fleet Management. I'll now turn over the meeting to Brad for a review of our Fleet operations.

Okay. Thank you, Michel.

On separation event, that scheduled for October 3rd of this year, Element Fleet Management will be the largest publicly traded FMC in the world; we are a leading business service company. I along with our entire senior management at Fleet are excited about leading the Element Fleet Management into the future.

We have the size and scale and exceptional consulting and database analytics service offerings, we coupled those with ancillary financial services that we offer in a consolidated one element basis to our clients. We are well positioned in the center of the Internet of Things space which includes everything from your connected fridge at home to the connected vehicle and this is what we are at the center of.

The connected vehicle is one of the biggest IoT opportunities. On Slides 9 and 10, which are excerpts from Macquarie Research report on August of this year, reporting on the $2.4 billion acquisition of FleetMatics by Verizon, you can see the size of this opportunity.

Over the next few years the global connected car space is expected to grow from $40 billion to $150 billion. The breadth of connectivity applications and opportunities for vehicles is plentiful and growing.

It's estimated at 75% of vehicles shipped by 2020 will be connected up from approximately 15% currently. Telematics itself is projected to be a $50 billion global opportunity and growing.

And this is just one of our data sources that comes together with us. Now, we sit in the middle of this opportunity.

Together with the shared economy and the autonomous vehicle possibilities with our Fleet Management franchise. We have vast amounts of data, a large installed base, in-house consulting and data scientists to make sense of all this data for our customers.

We will capitalize on this opportunity by providing these services to our current clients and our prospective clients on a consolidated basis. Our combination of data, our analytics of this data, our new Element 1 platform and our financial service offerings, a dual offering of Fleet financing and Fleet service offerings puts us in an enviable position to participate in this explosive market opportunity.

We've seen a proof of this both in the size of the opportunity and its immediateness in the recently announced acquisitions by Verizon of Telogis and FleetMatics that I mentioned earlier. We remain actionable in the M&A area, but only where the target is highly strategic to our plan of consolidated service offerings especially in the connected vehicle space that I have spoken about and when the products can be integrated into our offerings for our clients.

On the larger FMC consolidation opportunities remain actionable, we can and will execute on them but we remain highly disciplined on price and certainty of our synergy realization. On Slide 11, we outlined some of our key business drivers.

Principally those are growing our assets, our earning assets from between 5% to 7% annually, growing our service offering revenue by 8% to 10%, maintaining our OpEx ratio promoting continuing efficiencies in our company, growing our operating income on an annualized basis of between 8% and 10% and continuing to grow our ROAA to exit 2016 at 4%, while returning a tangible ROE in excess of 22%. We will do this through gaining market share, offering more services with compelling value propositions to our clients, expanding our SaaS based offerings through technology and optimizing our balance sheet and cost of capital.

Now I'd like to turn the call over to Dan Jauernig, Element Fleet Management's Chief Operating Officer to comment on our performance and our integration.

Thanks Brad. On Page 12, we provide some of the key performance indicators for Element Fleet on a pro forma basis going forward.

Overall, Element Fleet is operating on plan and seen improved normalized margins in the quarter from higher service and fee revenue and the impact of our integration savings. Before tax adjusted operating income was $0.33 for the quarter compared $0.32 in Q1 on a currency neutral basis.

After tax adjusted operating income was a very solid $0.26 in the quarter compared to $0.25 in Q1 on a currency neutral basis. Tangible leverage for Element Fleet on a pro forma basis was 7.5x, which is well inline with expectations for the Fleet business.

Before tax return on average earning assets was at an all time high of 3.92% for Element Fleet and positions us well to exit 2016 with a 4% return on average earning assets. I'll go into greater details on our operating results for the quarter shortly.

Finally, Element Fleet's tangible after tax return on equity is a key measure of our ability to produce excess internally generated capital over and above what is needed to support our growth in earning assets. Our tangible return on equity was 22% for the quarter on a pro forma basis which was well above our growth in earning assets.

Turning to Page 13, we provide an overview of total earning assets for Element Fleet. Total earning assets grew significantly year-over-year which was driven by the acquisition of GE Fleet in Q3 2015, but also due to very solid organic growth of 7.9% on a same-store currency neutral basis.

We're very pleased with our combined growth of 7.9% which exceeds the high-end of our mid to longer term range target of 5% to 7% growth in earning assets which Brad just spoke about earlier. It is this growth in our asset base that helps to drive our increased growth in service and fee revenue opportunities going forward.

On Page 14, we provide a geographic breakdown of Element Fleet's portfolio. As you know, Element Fleet operates in five countries around the world and in 47 countries when you include our alliance with BNP Arval.

Element Fleet has a leading market position in each of the five countries we operate in. Having said that over 3/4 of our total earning assets are in the United States making Element Fleet a dominant U.S.

centered business services company. On Slide 15, you'll see our key financial metrics for Element Fleet.

Our revenue yield, OpEx ratio and return on average assets in the quarter were all very consistent with the first quarter results. Element Fleet's return on average assets was 3.9% in Q2, but it has been noted last quarter our return on assets was positively impacted by some one time asset management income and this quarter by a positive adjustment to our credit loss provision.

So on a more normalized basis, our return on average assets was approximately 3.7% in Q1, 3.8% in Q2 and trending on plan to exit 2016 at 4%. Finally, as part of the plan separation, we are confident of receiving higher credit ratings for Element Fleet and a third rating, which will help to improve our cost of funds post separation and improve our net interest margins going forward.

Page 16 summarizes the revenue mix for Element Fleet. Total service and fee revenue grew to 57% of our total Fleet revenue in the quarter up from 52% a year ago.

We continue to expect service and fee revenue to grow as a percentage of our total revenue as Element Fleet continues to drive into the connected vehicle space as outlined by Brad previously. Also we'll be able to accelerate the pace of our service and fee revenue growth on both an absolute and percentage basis after we complete the data migration of the GE Fleet portfolio on Element's new and enhanced Fleet Management System in the fourth quarter of this year.

Turning to Page 17, is our integration update. We can now say that the integration process is substantially complete and we will achieve annualized integration savings of U.S.

$100 million by the end of this year. As mentioned previously, data migration is the last remaining item of significance which we expect to have completed in the fourth quarter of this year.

Once completed we will have one consolidated database for all of our customers and one forward facing integrated customer reporting platform. Element Fleet's new state-of-the-art Fleet Management System will allow us to accelerate innovation on strategically focused service offerings and to accelerate the pace of penetration of our current product offerings, all while providing leading industry data analytics for the immediate benefit of our customers.

And with that update, I'm going to turn it back to Brad.

Thank you, Dan. On Slide 18, I've summarized Element Fleet's management outlook.

For 2016, we will grow our total service and fee revenue for the 57% of our total revenue higher as Dan mentioned. We will exit the year at a 4% ROAA, return a tangible ROE of 22% with EPS in the range of $1.05 to $1.15, where EPS falls within this range is depending upon us participating in industry consolidation at metrics that meet our hurdles, our acquiring and integrating tuck-in acquisitions that provide service offerings and currency fluctuations.

As I said before and will reiterate now, we can and will execute on acquisitions with a high focus on value and strategic fit. For 2017, we return ROA in excess of 4%, a tangible ROE of 22% to 24% and [indiscernible] reported 2016 EPS between 10% and 12%.

In summary, Element Fleet Management is very well positioned to grow in an exciting new growing space, the connected vehicle space coupled with our traditional Fleet Management products and financing. We're a leading business service company driven by technology enhancements and acceptance by our clients.

We have a unique ability to monetize our product offerings on a consolidated basis one that ties it all together for our clients with what matters to them cost of ownership, compliance, safety and ease of use. We have proven our performance through economic cycles and downturns.

We have the ability to offer solutions on a global basis through 47 countries. And lastly, we have the size and scale to invest in the connected car and shared economy space with our clients.

We at Element Fleet Management are excited about the future and the base on which we are going to build and grow from. And with that, I'll turn the call over to Steven Hudson.

Thanks Brad and thanks Dan. Let me turn you to Slide 21 on your deck.

We are accelerating the pivoting of ECN's business to satisfy the immediate and growing needs of institutional investors seeking high-quality fixed income secured investments. I would refer you to the teach in slides that are on our Web site that give more background and detail on the requirement for fixed income investments for institutional investors.

I'd like to give you four highlights or key pivot highlights with respect to our strategic positioning as an asset manager and co-owner. We have a very significant growth profile.

It's been our history over the past 30 years. This certainly will continue we have an investment grade rating which is important to our cost of funds it's also very important to the balance sheets we look at on the M&A side because that cost of funds improves the economics of those operations.

We've begun the preparation to transition for an asset manager in mid-2015, when we announced the wind down of our general aviation business. This has been significantly accelerated in the first half of 2016 particularly in Q2 as we reduce originations and increase runoff, all of which return capital for our balance sheet, get us M&A ready but reduce income in the short-term.

Our focus on fee income is important. It can be lumpy due to the highly structured nature of our funds.

Now I'll turn you to Page 22 just a little comment which again this is a slide that's in that teach in deck on our Web site. It gives the yield landscape that our institutional investors are facing today.

Traditionally, these investors would have relied upon the government and corporate bond market as a validating asset to their term data liabilities. You see the impact of these markets have had on the upper right hand box which is the return on their fixed income portfolios, 4% to 5%.

Our products produce depending upon the quality and duration anywhere from 6.5% to 9%. So I think we are in the right strategic spot for our institution investors.

On Page 23, I think, in fact, the best place to turn to you is Page 24. It really is -- I think a good overview of how we're meeting the requirements, our strategic opportunity with institutional investors.

You'll note on the far left side our commercial aviation fund we have launched ECAF-1. We are waiting for other funds.

They are lumpy in nature. Dave will speak in a second.

Now that the split is settled, we are almost -- take us a little over 30 days away from our vote on the split, but the commercial rail assets are staying with us $2.2 billion. That's good news for us.

It will allow to us move a chunk of those assets into a fund. David will speak to that in a moment.

So that's the two on the equipment lease side. On the private debt side, we have our vendor finance business ready to move a piece of that in the fund and we've been talking I think a lot about our senior loan ambitions which is the fourth box.

We've done a lot of M&A work in the spring and summer including looking at a $2.5 billion fixed income business. That work is being done with our institutional investors.

We decided not to pursue that opportunity based upon our due diligence results, but I would say all of that effort, all the structuring, all the work laid the basis for us to be very active here in the fourth quarter. Turning to Page 25, Slide 25, you'll see that the wind down of the aviation fund is proceeding as planned.

It's approximately $1.1 billion today, $500 million by year-end, really four ways of exiting that portfolio. We're happy -- very happy with David and his team and Jim as we wind down this book and as we mentioned earlier this is M&A preparedness getting our balance sheet ready to do a deal.

It's increasing our capital position but in the short-term decreasing our earnings. Turning to Page 26, you see the fund vehicles that we plan to add.

I wouldn't speak any more than the fact you'll see rail funds now popping up in 2017. We have seen significant institutional interests.

People would comment that there's been some pressure on lease, railcar lease rates depending up on the type of car that's true. The one thing that hasn't changed in fact has got better is that institutional investors are now coming in size into the rail market and we've seen as late as the last couple of weeks institutional investors bidding 5% for railcar term leases.

That's a very attractive business for us. We think we are well positioned with our portfolio.

On Page 27 a little bit of background, we have three immediate acquisition targets which we are working on today. I think we’ve mentioned they expect those to be actionable in the fourth quarter.

It's important on all these targets that we are consistent with our asset management strategy, which we are. These are all proven U.S.

management teams and businesses. It's a U.S.

focused business and these are transactions that are structured in conjunction with the requirement of institutional investors. Comment raised is how do you tend to finance this?

We have several sources of financing. A transaction of size, it's with our IEC transaction which we've announced and I'll speak to in a second.

We have no preferred shares on ECN's balance sheets, so that's a security that's open to us, we have a general aviation book that will return about $350 million of embedded equity in the short-term and with a rail book that can be moved in portions into a fund you have about 22% to 23% of underlying equity of every dollar you move off into a fund, so four sources of capital. If I could comment briefly on the IAC transaction which is the marketplace which we are very supportive of on Slide 28, some key take-aways on this is it will produce approximately $200 million in cash for the fourth quarter growth ambitions.

This cash I think was raised on a very effective basis. There was a significant reduction in the promote by the backed shareholders, reduction reflects the commission of reason that equity to other forms 5% to 6%.

We think that's a smart transaction. More importantly, it puts a base under Element stock.

This stock would be issued at book value to long-term Canadian investors; I think those are two strong benefits. And finally it brings the addition to our board of Bill Holland, significant very successful Canadian financial services entrepreneur and Neil Self, who has helped driving our strategic development of the business.

I think a win-win on both fronts. And finally there's been a rigorous process undertaken by Element's special committee to address any potential conflict that there was in transaction.

I would reference you to the detailed information circular that's now online. I know Jim Nikopoulos has been answering questions on process.

I think when you spend the time to go through it; you'll see that process is unquestionable. So we're happy with the transaction, supportive.

We have multiple sources of capital. This is an important one to us, but we have ways of financing our growth.

On Page 29, we've reported before tax operating income of $0.11 which compares with $0.13 in Q1 or $0.12 on a currency neutral basis. The leverage was consistent with the last quarter; you'll see that the ROAA has declined a bit.

That's consistent with the runoff in the book that we've been selling a significant number of assets in the aviation side some of those are higher yielding assets have gone first. I would say this is temporary in nature.

You can't expect that ECN when it comes through in 2017 will be a 12% to 14% ROE business. On Page 30 not a lot to add on Page 30, other than you'll see that the revenue and NIM under the third bullet reflect the runoff of the portfolios and that again is consistent with our strategy of repositioning our company into an asset manager.

On Page 31 are the four components of the book, the rail business which Dave will speak to, ECAF, the CMV business I'll speak to in a second and the civil aviation book as you know is in runoff. On Page 32 there's no question that ECN capital is a leader, a U.S.

Canadian but more importantly a U.S. business leader in the commercial finance sector.

I think it's safe to assume that you'll see that piece of the U.S. business on the pie chart in front of you will grow in 2017.

That said we love our Canadian business. It's a dominant business and we think it provides value to our U.S.

business. David?

I'll start on Slide 34. The aviation vertical is well-positioned for ECN capital's transition to an asset manager.

Life insurance companies, pension funds and other institutional investors are looking to deploy capital and higher yielding assets and are increasingly investing in commercial aircraft leasing vehicles. A portfolio of these long live assets provide investors with predictable cash flows over the medium to long-term durations.

With superior yields to traditional fixed income investments. ECN capital is well-positioned to develop structure and manage funds to take advantage of the institutional investors' appetite for commercial aircraft.

ECN capital is extensive industry relationships with airlines, lessors and OEMs. We also have long-term relationships with life insurance companies, pension funds and other institutional investors.

We have an award winning team with a proven track record of arranging structuring aircraft financing transactions across the capital structure. Our first fund ECAF-1 which closed last year demonstrated our ability to develop funds in the aviation sector.

We are targeting two additional funds or core investment; we will be able to close later this year. However, these are highly structured transactions involving multiple jurisdictions and many parties and do require a lot of time to develop structures and close.

On Slide 35, we're summarizing the core results for the aviation vertical. These results were inline with our expectations.

Aviation originations during the second quarter were $54.6 million compared to $119.5 million during the first quarter of 2016. These originations were from our routine vendor program.

We continue to wind down the general aviation assets which we started in the first quarter and we are targeting to be down to $500 million by the end of 2017. ECN capital did have seven helicopters on lease with CHC helicopters when in May it filed for bankruptcy.

CHC has reaffirmed two of these leases and ECN capital has repossessed the other five helicopters and we expect to recover our investment. I will now turn to the rail vertical beginning on Slide 37.

Railcar leased assets are also very well suited to meet institutional investors investment criteria. These assets generate stable predictable asset-based casual flows over a 40 to 50 year useful life.

And ECN capital is well-positioned to make a transition over time to include asset management business as part of the rail vertical. We have built a very attractive portfolio with solid attributes.

We have the youngest Fleet. Our cars are broadly diversified by industry type.

We have very little co-exposure. We have very little near term lease renewals or proposed for by strong lessees and by long and evenly distributed lease terms.

We also have multiple origination channels to improve assets. We have our relationship and we have our direct origination capabilities.

And finally, we have a proven track record in financing and ranging funds. It should be noted that when ECN capital’s management started a rail leasing business back in our previous lives at Newcourt, we started with the railcar fund where we were a minority equity investor in a fund that we managed on behalf of a group of institutional investors.

We are targeting ECN capital's first rail fund to close in 2017. Financial results for our rail vertical are summarized on Slide 37.

ECN capital was cautiously selective in the second quarter with originations of only $16.6 million compared to $51.3 million in the previous quarter as Element reduced or deferred originations from the Trinity program and our direct business to be well positioned to take advantage of market opportunities. Revenue yield in the quarter declined from the previous quarter primarily due to increased maintenance costs.

Our rail portfolio continues to perform well in spite of the current market headwinds and our utilization rate at the end of the quarter was 99%. Also it should be noted a number of Class I railways noted on their second quarter conference calls that Q2 volumes likely represent the trough and railcar loading activity and we see rail market turning more positive in the second half of 2016.

And my last comment, we are quite active in looking at the secondary market and we have seen very strong demand and strong prices for assets, railcar assets with leases demonstrating the continued institutional demand for these assets. I will now turn it back to Steve.

Thanks David. Turning to Page 39 vendor finance business, happy to report we've seen strong growth in both the U.S.

and Canadian originations in pipelines. The chart shows the originations Q1 over Q2, although the U.S.

growth is marked at 4%, the pipeline is significant in Q3 and you'll see double-digit growth in that business in Q3. An example of that pipeline is that we did in our U.S.

business complete a tuck-in U.S. portfolio transaction approximately $200 million; we purchased that at 90% book.

That discount produced a 10.4% yield very attractive senior credits. I think you can expect more of that.

Why? These are banks and the U.S.

are under continued pressure by the U.S. regulators to either limit or leave certain business lending markets, it’s an opportunity for us in the past, the BDCs would have filled that hole, that requirement, BDCs trading substantial discount to book unable to raise capital.

So it's created a significant opportunity in our U.S. business, hence the growth will be strong.

Turning to Page 40, also driving this growth has been changes to competitive landscape. We've seen some change with respect to our competitors in this space.

We've been able to capitalize that. Two examples, I would reference you to would be the Bobcat Doosan program where we've gone from $130 million in 2015 to $230 million in 2016.

We're also quite proud with our team in the U.S. and Canada that we've landed Wabash trailers number one manufacturer in the space.

And that’s a brand new program. We expect -- the slide says $50 million but the run rate will be $100 million in the first annualized year, so great success more to come.

We've also launched and targeted floor planning. This is tied to us securing term financings.

We will do inventory financing for a very select handful of manufacturers in exchange for receiving First Call on term financing. All those developments are going to lead to a strong second half for our commercial and vendor business.

You knowing on Page 41 for highlights, you'll see a small dip in our financial yields in Q2. I ensure you that by the latter part of this year that will reverse as we address longer duration product and grow our vendor platform.

Before I turn to Michel, let me just make a few comments on ECN valuation. As you'll note from the circular that's in the marketplace right now that you'll see the book value of the company at approximately $3.95.

We are on a strategic path here in the very short-term to take what is an 8% ROE business into 12% to 14% I assure you that we are going to deliver on that like we have over the past six years. The comps within our business are trading at 1.1x times, I think that their growth rate is anywhere near our growth rate of this business.

So I'm comfortable that we will have a business that is positioned quite attractively with respect to our comps. With those summary comments, I will pass the mic over to Michel Beland.

Thank you, Steve. I'll take you to Slide 43, which presents the key balance sheet account as of June 30, 2016, March 31, 2016 and June 30, 2015.

As we stated previously, the amounts recorded at June 30, 2016 were negatively impacted by the changes in foreign operating currencies over to Canadian dollar during the quarter. On average foreign operating currencies retracted by approximately 1% against the Canadian dollar between June 30, 2016, and March 31, 2016.

Total assets were $24 billion as of June 30, 2016 compared to $23.9 billion as of March 31, 2016 and $15.3 billion as of June 30, 2015 with the increase over the amount reported at June 30, 2015 resulting from the GE acquisition which we closed in Q3 of 2015. Total earning assets were $13.3 billion in June 30, 2016 compared to $19.4 billion as of March, 2016 and $10.6 billion June 30, 2016 again reflecting the GE acquisition in Q3 of 2015.

Book equity increased slightly to $5.44 billion as of June 30, 2016 compared to $5.4 billion of March, 2016, but increased $2.2 billion over the amount reported at June 30, 2015, again from the GE acquisition mentioned previously. Both financial leverage and tangible financial leverage ratio, the latter compute invasive that company's most restrictive covenant remains relatively constant over the ratios of 3.31-1 and 4.58-1 report of March 31, 2016.

But increase over the same ratio reported as of June 30, 2015, again resulting from the GE acquisition. Slide 44 provides a summary of the consolidated statement of adjusted operating income for the quarters ended June 30, 2016, March 31, 2016 and June 30, 2015.

All metrics for the two most current quarters were obviously positively impacted by the GE acquisition again which closed in Q3 2015. Interest income inclusive of net rental revenue was $272.3 million for the current quarter compared to $297 million for the preceding quarter or $281 million on a currency neutral basis and $146.5 million during Q2 2015.

Net interest margin was $149.7 million decreased by 13% from this $172.6 million or 18% decrease in the currency neutral basis but increase by 69% to ever the amount reported for Q2 2015. REIT management and other revenues were $133.5 million for the quarter compared to $140.3 million for the preceding quarter or $132.8 million on a currency neutral basis and $64.5 million in Q2 2015.

Net financial income was $281.7 million compared to $309.8 million in the preceding quarter or $293 million on a currency neutral basis and $149.6 million in Q2 2015. Adjusted operating expenses were $114.9 million and the improvement of 9% or 4% of the currency neutral basis over the amount reported during Q2 2015 compared to $60.9 million during Q2 2015.

Adjusted operating income before taxes was $166.8 million during the third quarter compared to $182.9 million or $173.1 million on a currency neutral basis in Q1 2016 and $88.8 million in Q2 of 2015. Slide 45 presents a summary of the financial consolidated yield as a percent to average earning assets for the three months ended June 30, 2016 and for the comparative period.

Average earning assets were $19.1 billion during the current quarter compared to $20.2 billion during the previous quarter and $10 billion during the comparative second quarter of 2015. Net interest margin was 3.14% during the current quarter compared to 3.42% during the previous quarter and 3.54% during the comparable quarter of 2015.

REIT management and other revenues were 2.79% compared to 2.77% during the preceding quarter and 2.58% reported in Q2 2015. Net financial income was 5.9% compared to 6.13% in Q2 2016 and 5.99% in Q2 of 2015.

Adjusted operating expenses were 2.41% during Q2 2016, a slight improvement over the 2.51% reported in Q1 2016 and a 2.44% reported during the comparable second quarter of 2015. Adjusted operating income before income taxes was 3.49% during the current quarter, a slight decrease over the 3.62% reported during the previous quarter and the 3.55 reported in the comparable second quarter of 2015.

Adjusted operating income after income taxes was 2.74% during the current quarter compared to 2.84% during Q1 2016 and 2.72% during Q2 of 2016. Slide 46 presents the annualized average return on shareholders equity for the current quarter and the preceding quarter ended March 31, 2016, and the comparable quarter ended June 30, 2015.

Before tax adjusted operating income on average shareholders equity was 13.29% for the current quarter compared to 13.9% reported in the previous quarter when an increase over to 13.12% reportable on a currency neutral basis. After tax adjusted operating income on average shareholders equity was 10.25% during the quarter, a slight reduction from the 10.74% reported during the quarter ended March 31, 2016 and a slight increase over the currency neutral reportable return of 10.12%.

Slide 47 presents some per share amounts for the reported period. Pre-tax adjusted operating income per share was $0.41 during the current quarter a decrease of $0.04 from the amount reported during the previous quarter where the decrease of only $0.02 from the currency neutral pre-tax adjusted operating income.

After tax adjusted operating income per share was $0.33 for the current quarter compared to $0.35 reported during the preceding quarter or $0.33 on a currency neutral basis and $0.23 in a comparable quarter of 2015. Book value per share was $12.69 at June 30, 2016 compared to $12.61 at March 31, 2016 and $10.29 as of June 30, 2016.

On the next slide and the portfolio as a whole reflects continued quality of the assets and a high-level of rated customers. Non-current assets covering loans greater than 31-day past due increased marginally from those reported as of March 31, 2016, but are trending relatively constant over the average quarterly amount of fiscal 2015.

Defaulted account which are reported at their net realizable value have increased over the amounts reported at the end of the comparable period mainly from the bankruptcy of CHE helicopters. The company's consolidated allowance for credit losses as reduced marginally compared to the amount reported as of March 31, 2015 from further right sizing of our Fleet and management provision.

I will now turn the call over to Jim.

Thank you, Michel. I'd like to spend a few minutes providing updates on the Element separation process that we initially announced in February of 2016.

If you look at Slide 50, a few items to highlight on that page, Bill Lovatt who currently serves as the Element Chairman will serve as chairman of ECN post split in which Richard Venn who currently serves as our Vice Chair will serve as Chairman of Element Fleet. I will discuss the overall corporate governance structure shortly.

Execution of a separation plan is being overseen by senior management under the direct leadership of our CFO, Michel Beland. Over 2500 action items have been identified, the vast majority of which have now been completed.

We achieved operational separation of our business at the end of June and are on track to complete the legal separation close effective October 3. If I turn you to now Slide 51, I wanted to highlight a couple of things on this page.

As we've previously mentioned our transaction is structured as a court approved butterfly plan of arrangement. This is done for tax reasons.

After implementation each Element shareholder will hold one common share of Element Fleet and one common share of ECN capital. Our management information circular is now publicly available for review both on SEDAR and our Web site and our shareholder meeting is scheduled to be held on September 20.

The current outstanding pref shares and convertible debentures will remain with the existing company Element Fleet Management. For terms of the indentures, the conversion prices of the debentures will be adjusted after the arrangement closing in a manner that is equitable in the circumstances so as to reflect the effects of the separation.

In accordance with the indentures, the Board expects that the adjusted conversion prices will be determined with reference to the relative trading prices of Element Fleet common shares and ECN common shares over a 10-day view up period immediately following the separation close. Such adjustment mechanism is subject to TSX approval.

If I now turn the Slides 52 to 54, those slides provide a summary of our high level timetable for a separation as well as key steps in approvals that we've completed to-date. I would like to highlight a few recent key accomplishments.

Number one, our Board has formally approved the separation and the subsequent enforced back acquisition. Number two, we have received underwriting commitments for one a U.S.

$4 billion three-year senior credit facility for Element Fleet and two, a U.S. $2.5 billion three-year credit facility for ECN capital.

Number three, we have established go forward with CEO and senior compensation plans for both companies post split that I would discuss shortly. Number four, we have received TSX conditional approval for a separation and lastly we have been granted our interim court order from the interior court of justice for the arrangement.

In sum, we are pleased with our work-to-date and are again on track to complete the separation by October 3 followed by the INFOR [indiscernible] acquisition later in October. If I turn to Slide 55, I wanted to highlight the corporate governance framework that will apply to both companies going forward.

As a matter of good corporate governance a special committee of the Board was established in April consisting of Bill Lovatt, Richard Venn and Pierre Lortie. This committee has met with Element management and its advisors on several locations to receive updates on various aspects of the separation transaction all as detailed and outlined in our circular.

At the separation close, Element Fleet and ECN Capital will have independent Boards and separate management teams with limited overlap between the company Boards. The governance structure of Element today will be retained by Element Fleet going forward and will be replicated at ECN Capital.

Lastly on Slide 56, I wanted to provide summary of the go-forward Board approved 2017 compensation plans for the CEOs of each of Element Fleet and ECN Capital. These plans were developed based on feedback received from stakeholders and build upon the illustrative framework that we initially laid out at our June AGM and subsequently in our arrangement circular.

This compensation framework is intended to be right-sized to the businesses moving forward and provides a traditional compensation structure with short-term cash and medium-term PSU equity awards being scorecard based and target and maximum awards based on achievement of operational performance measures. This eliminates the need for special transactional bonuses.

As said out in the Slide, the 2017 based salary for each CEO will be reduced to $875,000 with a total annual target opportunity for each CEO in the range of $4.375 million which is target to approximately $6.5 million on the maximum end and this is dependent again on company performance with approximately half of that award being an equity component. The PSU structure as we've mentioned in the past will have operational objectives and have a component tied to total TSR.

Overall, this compensation program reflects a balanced approach to short-term, median-term and long-term incentives. I will now turn the call back to Michel who will provide a review of supplemental disclosures.

Thank you, Jim. This section really updates the information that was provided in the first quarter and present the actual financial position and financial result of the two separate segments mainly Fleet Management and Commercial Finance and for the quarter 2016 and the pro forma result as if the separation are taking place at the beginning of the reporting period with the anticipated allocation of assets, pref shares and convertible debenture allocated to the appropriate entities.

On the Fleet Management balance sheet on Slide 55, pro forma finance assets I think increased by $1 billion relating to certain Fleet assets consisting of over the road trucks and trailers to be consolidated into and managed by Fleet Management as part of the separation and previously originated and reported on their commercial and vendor vertical. Liabilities have increased by $900 million from the increase in finance assets and we have presented a convertible debenture separately as these will be retained by this segment past this separation.

Equity has increased by $100 million from the increase in assets and increased net of the increasing liability and we have again presented separately the pref share which will also be maintained by Fleet Management going forward. Post separation a tangible leverage of 7.521 remains constant over the actual tangible leverage as of June 30, 2016.

Fleet Management pro forma statement of adjusted operating income as presented on the following Slide reflects the allocation of the income and expense reported for the current quarter again adjusted to reflect the additional income derived from the pro forma balance sheet of the Fleet segment. As a result, net income on a pro forma basis would have been $107.8 million for the quarter compared to $97.3 million reported for the previous quarter resulting in a net income to share holders after deduction of dividends and pref shares of $98.9 million or $0.26 a share.

Our pro forma commercial finance balance sheet on the following page reflects the same adjustment as mentioned above for the Fleet Management resulting in an expected pro forma tangible leverage ratio of 3.0-1 at June 30, 2016 compared to an actual tangible leverage ratio of 3.1-1 as reported and therefore essentially unchanged. Commercial Finance pro forma statement of adjusted operating income as presented on the following page reflects the same adjustment as we mentioned for the Fleet Management resulting in pro forma net income to shareholders of $22.4 million for the quarter compared to the $33.4 million reported in the company's financial statement which are presented in a consistent basis over the comparative period.

Pro forma earnings per share would therefore be $0.06 a share. I'll now turn the meeting over back to Steve.

Thank you, Michel. It's John Sadler, and at this stage, operator, we would like to open the call for questions.

Hey, good afternoon guys. Brad.

Two questions for you. One first near-term and then another longer term question.

When I think about your guidance for 2016 and 2017 for the $1.05 to $1.15 and then 10% to 12% if you can help me think about that how you think about that low end of the range versus the high-end of the range being achievable and when I think about that if I were to pick say the midpoint of the 2016 EPS of $1.10, when I think about the math that assumes that you're making better than $0.30 per quarter over the second half of the year, which would imply that your annualized EPS is better than $1.20 going into 2017 so just wanted to think about that if you could give us some color.

Sure, Vince. This is Brad.

So there are a few things going on there. One is we do have some seasonality towards the back end of the year; we have a heavy buying season coming in September.

We also I mentioned during my comments where we fall in that range is heavily dependent upon significant acquisitions in the FCA space which we are staying extremely price disciplined on with respect to certainty of synergies and the timing of those. It is based upon our ability to put tuck-in acquisitions in which we are on and will be having some coming into our fold very shortly, but as you know those take a period of time to gather into the underlying EPS.

And then lastly, we do have some currency and timing issues there just meaning as we get later in the year obviously we don't have the cadence of the deal to be able to get a full benefit during this year, but we will then have the full 10% to 12% growth on that in the following year.

Okay. Got it.

It seems like even with your organic performance this year that you should maybe be able to do with $1.20, but I'll leave it at that. I guess for the longer term view as you point out the connected car opportunity, we here think that it's going to multiply more than threefold by 2020.

So just kind of wanted to get your take of I mean blue sky how you see Element Financial over the next four years and sort of how you plan to monetize that connected car opportunity.

Yes. So as I mentioned, there's an explosive opportunity there that's coming and it's upward of four to six times over the next number of years and the connected car part of that is one of the fastest growing areas, but it's much more than just a connected car part of it.

There is the whole shared economy space with our clients and how that ties in. Again, our clients are interested in three things, those things that I've talked about, total cost of ownership, safety for their drivers both behind the windshield on work time and at home and then the ease of service and compliance.

So as we drive into that space, we have something others don't have in that we have a consolidated database in the center of that with our own data sciences. So we pull that together for our clients.

So we are really, really excited about where we sit in the middle of that space. I think the growth rate in that space will be much more than what we have said here, but there is time to get those applications in to get them consolidated.

Dan talked about our integration. We absolutely need to have our one Element platform in place.

When we get that, Telemactics we're talking about the connected car is just one of many data sources that come together. What we do is pull that together on a consolidated basis and make real sense of it with our data consultant.

So, over the next number of years that will grow a lot and also we'll see our revenue grow the fee based part of our revenue management service income will grow a lot more than the 50% to 60%. We're already close to 60% now, but it will grow in a much bigger proportion of that.

And again, we have the ability to combine that with what you would call traditional Fleet Management offerings, the financing part of it. So it's a very, very compelling value proposition.

Thanks very much, Brad. And Steve, just one for you.

Appreciate the color on the ROE upside for ECN and I was just wondering assuming everything goes through, the approval goes through, acquisitions go through how do you view ECN in 2017 and if you can give us maybe a bit of financial metrics over, originations, ROE kind of at the end of 2017 just kind of framework to think about it. Thanks.

I think Vince, I want to hold on most of that till we announce what we want to do in the M&A front and I think you'd expect an announcement sooner than later. So I don't want to guide a lot on 2017 originations.

I would say that the 12% to 14% feels comfortable that we do have -- when we walk into these discussions we have a better balance sheet than our targets were able to improve their cost to funds, their cost to capital because we're a Canadian taxpayer, we also avail ourself the lower rate which helps with cash flow. We also have significant tax depreciation coming up David's rail business, which helps with our pre-tax cash flows.

I just feel more comfortable guiding you Vincent, once we get something announced, but I am comfortable with that 12% to 14% ROE. I thought we had a $2.5 million deal in the late spring or summer that would have got us there, but it will come.

Great, great. Thanks so much, Steve.

Appreciate it.

Hi, thanks. Wonder if you could give us or elaborate on ECAF II.

Is this the only deal you'll do in 2016 or are there others and then how many might you do in 2017?

Yes. It's Dave McKerroll.

We're working on ECAF II. We're working on a couple of other vehicles, too.

So what we're saying is, we're trying to get two of them close this year. Steve said they're lumpy and there's a lot of parties and a lot of things are moving forward.

So we have been talking to a lot of institutional investors about the types of asset sale like and so we have -- number of things in the works, but it takes some time to bring this thing together and get them closed.

But the goal is still two by 2016?

The goal is two for this year, yes.

Yes. And then, 2017, if you could write the script for 2017 and I know you can't, what would be an acceptable goal for the number of transactions you could do next year?

Hi, it’s Steve. I think on the funds side we are very committed to delivering a rail fund whether that's $250 million or $500 million expect that come in the early part of 2017.

But the demand for railcars under lease I mentioned earlier that David had bid on a series of railcar leases three or four weeks ago here and our bid was 7% which we consider to be aggressive and the winning bid from Asian FI was at 5%. So that has a very positive impact on our portfolio.

So rail fund comes in the better part -- early part of 2017, call it $200 million to $500 million could be largely depending upon market and receptivity to that.

All right. And then, I noticed on Page 27, which is helpful, you've got as a source of capital reoptimizing balance sheet assets, i.e.

portion of the rail portfolio institutional fund. Would that be a third-party institutional fund?

David has $2.2 billion of rail assets when we separate here on October 3.

Yes.

There is significant demand from, if you look at that if you look to all state announced their recent rail fund. Other fixed income players when they look at a rail asset they see a 50-year life asset with a lease attached to it.

So that’s according to 50-year bond so you can think of the institutional investors that are investing with David at an interest. They also get the benefit depending up on the structure to participate in some of the tax depreciation.

Okay. But you don't need to successfully complete one of your own funds to free up capital on your balance sheet.

There's enough demand for the rail portfolio you could do it with a third party?

Correct.

Okay, thanks. That's everything.

Hi. Good afternoon.

Just the first question I had was on [indiscernible]. You mentioned there being a little bit of rental rate declines in the aviation and rail with certain of the leases, just wanted a little bit more color on that.

Is there potential for some other ones to have that same dynamics? And then from the funding side you talked about slightly higher funding costs.

Are these things you can pass on to your customers in those various verticals?

Geoff, I will speak to aviation runoff and then David could speak to rail. The aviation book is running off and we're aggressively running it off.

You can't time every deal precisely but a significant chunk of some of higher yielding assets have gone and less impact of the yield on aviation. And it will be a lumpy yield coming off that book till -- the vast majority of it’s gone by 2017.

Maybe Dave want to talk to rail lease rates.

Yes. Rail or lease rates, there is pressure on lease rates, but we haven't had a lot of renewals.

Our yields came down due to higher maintenance costs this quarter and maintenance costs like the last two quarters, maintenance has been higher than what we expected. But maintenance, we look at -- quarter last year where maintenance was lower.

Maintenance is very hard to predict quarter to quarter because you don't know when railways are going to do their repairs but if we look back want 2.5 years that we've had the portfolio on average being where we expect it to be, but it is difficult to predict quarter to quarter.

Okay. I'm sorry on the funding costs up tick quarter over quarter is that something you can pass on to your clients in those verticals or?

On the aviation side, it will be gone, so it will be a fund manager going forward. So I think it's a function of the institution's books.

It won't be a risk for our balance sheet, Geoff. And on the railcar side rental rate for railcars is about 70% driven by current interest rates and 30% by demand at the cars.

So it's a mix. So we feel pretty good about it.

I would leave you with -- I know I'm at the sake of repeating myself which I will, this recent railcar portfolio that got sold in the U.S. that we bid 7% on -- went on 5% on 50 year life assets and I think that's a very good statement for our rail book.

Okay. And just the other question I had was for Brad.

If I look at the Fleet Management fees, it was down 5% quarter-over-quarter. FX looks like it was the vast majority of that but it seems like even if you adjust for the FX it might have been roughly flat maybe marginally up quarter-over-quarter.

I wanted to get some sense as to -- if that's the way, I think what happened in the quarter and how you are trying to drive more fleet management fees from your clients.

Yes, Geoff, it's Dan. As I mentioned previously we talked about this in the first quarter as well.

There was a little bit of one time management fees that we had in the first quarter relating to a portfolio that we acquired from GE Capital in New Zealand when we acquired their Fleet operations there. We're winding down that portfolio which produced some incremental management fees in Q1 which wasn't replicated in Q2.

So you factor that in that's why we're referencing the normalized ROA growth of 3.7% in Q1 to 3.8% in Q2 and still very confident that it's trending towards 4% by the end of 2016.

And sorry, can you maybe, I guess x-ing out that one item from the Australian, New Zealand portfolio like how much on currency neutral basis, how much the Fleet Management fees would have been up quarter-over-quarter?

The adjustment in Q1 was about $5 million to $6 million. So if you back that up from Q1 you get kind of a growth rate there.

Okay. Thank you very much.

Good afternoon. Fleet, I also saw a bit of a reduction in the asset yield as well, the numbers weren't big, but can you talk about what's going on there?

This is Brad. I didn't catch that question.

Which page are you referring to?

Actually yields in Fleet. It wasn’t -- the deterioration in yields that we saw in commercial, it wasn't unique to commercial and I can give you a page reference.

Actually you don't have a page reference, it really is in you can sort of pluck it out from your MD&A or maybe I'll ask you this way, did you see any deterioration in yields of the fleet business?

No. I mean, if you -- I reference you to Page 15, if you look at the highlights for Fleet.

As I mentioned in my comments earlier they were very consistent with Q1 overall right across the board.

Okay. So maybe let me reference you then to Page 30 of your MD&A.

Okay.

You can see it there selecting operating ratios 509 from 521 last quarter and that's interest income and rental has something to do with the fee side.

Yes. I guess when we look at the overall yield for Fleet, we look at it on a combined basis which is the 9.2% that we have on Page 15.

Right. But, I’m talking about the 509 and the 521, so what I'm trying to determine is if there was any change in mix or anything else competition in the business that would have driven the interest yield down.

Not off the top of my head.

We do have a combined pricing model. So we've got to mix all that together, we have an ROA and an ROE depending on how much financing they take from time to time.

So, we will adjust a little bit depending mix, when we look out them together. So we don't see any degradation of that.

I've mentioned before that our spread income because of our type of clients is pristine. I mean our credit losses are pristine and we're dealing with very large companies that have their own treasury.

So this is not a business where you can take much more than a market kind of rate on the spread, so we don't see very much pressure on that from time to time people take it out to bid. We will move the spread down on the financial part of it in exchange for taking up more of the services which take longer to come on.

So we haven't seen any degradation and again we look at the two of those combined together.

While, I've got you guys there, if you could look at the credit, the credit recovery in the quarter, it was a meaningful number. There was a recovery last quarter as well.

What I'm struggling with there is understanding the extent to which that recovery relates to provisions that were established as part of the purchase equation either under for PHH and/or GE. Are these essentially just reversals of previously established provisions as a result of the deals?

These are provisions. We book after we did the transaction and acquisition.

Sorry, Mario, this is Michel. We book the transaction subsequent to the acquisition and again on a PHH and both GE and PHH acquisition.

But this is part of the deal, right?

Which was based on our expectation of the new portfolio we have on the books, but certainly our experience for running these books for two years now is that we were overprovided and we're on line with what we have expected initially, I guess, or we anticipated to run three basis points last life cycle. Even though today I think the provision overall is above that.

I think it's about 5 basis points of the book we adjusted so compared to the three basis points we expected based on historical. So I think we still have a -- I think we still believe that we're overprovided for that business at this point in time.

But --

I think what I said is that we established provisions at time to book, but we certainly overprovided since we repurchased these two books of business and a large part of that is the reversal of the overprovision we've done over the last two years.

Sure, I understand.

Luckily we were conservative because we didn't know the book of business. And rather we have been running with these books for two years that we are -- we are confident that it’s running in line with the expected life cycle for this type of business, so we reserved them.

It's ultimately the sustainability of this that I'm getting at. If we can just move on to commercial for a moment.

Steve, the challenge for me at least is understanding the deterioration we are seeing, or the decline in earnings that we saw this quarter from last it's difficult to disaggregate the extent to which this is intentional process undertaken by management and whether this is just a deterioration of the business. Now, I think I get can there from an originations perspective.

I understand what's going on with demand for rail. I understand why the numbers would be lower.

What I'm really struggling with is, the deterioration in the yield. I know David McKerroll suggested that this is maintenance, but these numbers are pretty significant and this has been going on now for a little while.

Do you feel pretty confident that in rail, yields will bounce back in the near term and that there's no structural issue why yields will continue to deteriorate?

Let me jump in there. So the maintenance charges are not predictable.

They come based upon cycle times and usage of the cars, so I am comfortable that rail will come back next quarter.

How about in vendor because that was also pretty significant?

Yes. Vendor has been -- we've been -- positioned the credit book a bit.

I've been letting off certain areas and driving certain areas back on. I think you'll see a nice pick-up.

We didn't do as much syndication this year-to-date as we’ve done in the past. We have a little more excess capital, so you'll see syndication coming back up which will back those yields positively.

And I think you'll see that with the growth coming back to the business it's in the yield perspective that I like, Mario.

Okay. And then --

And I think the other comment earlier about the aviation on the overall ECN business, the runoff of that book as you are managing running off a $1.3 billion book fairly aggressive but the transactions I told earlier to the ones with the higher yields. I'm very happy with the credit book by the way, but you tend to see the higher yield and stuff come of first and a write-down.

Sure. And then, just finally, just listening to your comments, Steve, you talk about essentially shrinking so that you can grow later.

So if you are shrinking the balance sheet to build up the capital, so that you can grow later. So, actually what you are saying is, you're comfortable swapping out of the assets that are on commercial balance sheet today and replacing them with the assets you want to buy.

That's got to be the implication because otherwise why would you shrink out the lease. So, why are the businesses and the assets you want to buy whether this is leverage lending in the U.S.

or what have you, why is that better than what you have?

It's better because it's consistent with the assets that our institutional investors want. If you look to civil aviation book, it's a nice book, but with a 35%, 65% advance rate on debt and 30% equity underpinning, you're never going to get the expected ROE, buying credit, but below ROE.

If you look around look to -- let's use leverage lending in the U.S. look at CPPIBs purchase of Ontario as you looked at other large [LIFOs] [ph] and pension funds in that space.

That's the asset they want. We understand it.

We've been in that business in the past. We think that's a handsome platform.

And as a manager even though the yields in the assets are in the 6%, 6.5%, 7% range, as a manager it’s a very attractive business and it will lead to higher ROEs. Now, we spent a lot of time over the last 12 months Mario with our institutional investors.

Think of us as the fixed income private placement manager on behalf of those investors. We happen to operate in specific silos and I think that the leveraged lending market is the spot that's very attractive to us.

I think the pressure by the U.S. bank regulators to have U.S.

banks exit that market and BDCs inability to fill that market create a massive opportunity and I'd like to do it with our institutional investors. I thought I had one for $2.5 billion in the summer and I was sure it was going to be our first deal to proof of concept, but we ended up based up on credit not proceeding.

Okay. Thanks very much.

Hi, good afternoon. Two quick questions from me for Brad or Dan.

You mentioned the integration process is largely complete, can you refresh us on the timing of when the cost -- the transaction integration costs should fall away from the income statement? And then, I know you continue to look at acquisition opportunities.

So should we think of that number is going down to a new material amount or directly to zero over time or just any color there?

So, Nick, its Dan. I will talk about the integration savings and where we are in the process.

As you recalled there were three primary work streams with respect to our integration savings, cost of funds, procurement and revenue synergies and finally, the combination of our Fleet management system or the data migration to GE portfolio on the Element Fleet Management system. The cost of funds was completed in the fourth quarter of last year with the launch of Chesapeake 2.

So those cost of funds savings are being booked equally throughout the course of each quarter in 2016. The second component was procurement in revenue synergies and that required us to renegotiate all of our supplier contracts.

That was completed at the end of the first quarter of this year. Those savings will ramp up throughout the course of 2016 because even though we renegotiated our supplier network contracts it takes time for us to shift volumes from our high cost suppliers to our new lower cost supplier networks that we negotiated and signed throughout the course of the end of Q1.

So that will ramp up throughout the course of 2016 and the third component is the combination of our two portfolios which will be completed in the fourth quarter and the vast majority of those savings will be realized immediately thereafter and will begin in the first quarter of 2017. So that will be on a full run rate of $100 million of integration savings starting in the first quarter of 2017.

Okay. Thank you.

And then, just on the actual one-time integration costs of $21 million this quarter, do you expect that to trend towards zero by the end of 2017, or how do we think about the trajectory if that number was $32 million last quarter, $31 million end of 2021, should we expect another step down next quarter?

I don't expect a significant step down because we're still in the process of integrating our Fleet Management systems. It will trend down, but by the end of 2016, it will be fully completed.

It will be zero in Q1 of 2017.

Okay. Thank you.

That's helpful. And then, just like a quick one for Steve on the pickup and originations in Canada this quarter, is that more of a one-time opportunity or something sustainable you see?

You talked about the competitive landscape a little bit but maybe you could just provide a little more color on that competitive landscape given we saw a few businesses change hands and your new competitors do have a cost of funding advantage, but I know Element tends to perform on the services side, so maybe just an update on the competitive landscape there.

We're number three in the vendor finance space. Number one is GE vendor now sold to Wells; number two is DLL owned by Rabo.

There has been some changes, uncertainty on both of those platforms without getting into the detail, I would tell you in Canada that we hired the entire vendor finance team of one of those two companies. And it's now paying back and I think you'll see a similar -- I've indicated to you that we've had some very large program wins in the U.S.

I think that that competitive uncertainty in the marketplace, we are the recipient of that uncertainty. Manufacturers like predictable and dedicated sales finance that doesn't have a second mission to offer other credit products to their clients and we deliver that.

So that's why I'm very confident in predicting very strong growth in commercial vendor in the latter part of this year. I'm also confident that yields will improve in that business given some of the competitive location.

Okay. Thank you.

Thanks very much. Good afternoon.

Question for Steve on ECN. In the first quarter call you talked about full year 2016 guidance of $0.46 to $0.49.

Now, granted that was prior to transition to an asset manager and it sounds like you're kind of starting to undertake that certainly on the aviation and the rail side. I think the numbers in the quarter you mentioned in the MD&A were $0.02 lower as a result of lower income generated in aviation and rail and I take that to suggest that's as a result of kind of transforming into this new model.

So I guess the one question is, are you in a position to sort of update this $0.46 to $0.49 number for 2016, just given your -- I think it's $0.15 in the first half for ECN and then are you -- when do we start to see that drop, tend to pick up as we transition into this asset manager?

Yes. Thanks, Tom.

The transition has been pretty rapid. I don't think that anyone says what happened the start of 2016 is where we are at today.

If you look to the -- took to the general aviation book it’s gone from $1.5 billion to $.13 billion to $1.1 billion. That's capital coming back on my balance sheet.

That's income that's not there and you have to assume you have to bet that I can take that capital as I have over the past 30 years and I'm going to use that capital for a significant accretive deal. So when you are returning capital to do an M&A deal, the earnings aren't there, Tom, and the same thing in rail.

When you go from zero in rail and focusing on the fund, that's all that messaging which I attempted to do at the teach in -- was that we are getting ready to do a very significant transaction. So the earnings won't be there in that business.

As we get through to the announcement in October of what we're up to, Tom, then I'll provide guidance on the latter part of 2016 and 2017 for that business, but think about the book value of this business at $3.95 or $3.90, whatever the exact number is. We've never not grown our company.

We've never not done an accretive deal. So it's on its way, Tom.

Do you think the accretion would be more than this guidance that you would set-up or is there other moving parts as a result of moving to this asset manager model?

Well, you're going to get David moving rail assets off the balance sheets. That means there will be some capital available for that, which will free up capital.

You are going to have a significant transaction of a very accretive basis. So, I had to kind of -- I can’t take you much down that path Tom.

Okay. Thanks Steve.

Thanks.

Sorry, just one more comment.

Think I will, everyone still on the phone, I just on the Fleet earning per share, I'd love Vincent and his positioning. We've attempted to put a range out there.

We have positioned this company to beat on earnings. So I think the 1.05 to 1.15 is a good number for what would be pro forma for 2016 and, Brad, I'm speaking as a Director in Brad's Board now and so I clearly overstepped my role.

But I think it's a very, very handsome business with good growth profile. But, I would say that Brad is more modest by nature, but the big growth opportunities have not gone away and I think Dan's integration work on the system side will put Brad in the position where he'll be in the captain's seat for some larger transactions.

The other thing that we have been hemmed in by -- in this period is that the split has stopped any M&A transaction because we do an M&A deal during a split period you can't continue with a split because you've got to put 3 years of statements into your circular and you have to put a business acquisition report and other things. So it's really slowed that process down, but we are ready to act on the first quarter.

. Sorry, John.

Great. Thank you, Steve.

Thank you, operator. And thank you, ladies and gentlemen, for joining us on this call.

We will look forward to speaking to you again when we report third quarter results, so we remind you when we do that we'll be reporting two separately publicly traded companies. That will be around mid-November and we will look forward to speaking to all of you then.

Take care.