Element Fleet Management : Q4 2021 - Supplementary Information

Q4 2021 Supplementary Information

as at December 31, 2021

This supplementary information should be read in conjunction with the

Company's Management Discussion & Analysis dated December 31, 2021.

In this document, the Company presents measures that do not have a standardized meaning under IFRS and may not be comparable to similarly-named or any other non-GAAP measures presented by other organizations. Descriptions of the non-GAAP measures presented in this document can be found in Element's Management Discussion & Analysis that accompanies the financial statements for the most recent quarter or year, which have been filed on SEDAR (www.sedar.com).

Element Fleet Management Corp.

www.elementfleet.com/investors

FORWARD-LOOKING STATEMENTS DISCLAIMER

The following pages provide information management believes is relevant to an assessment and understanding of the financial condition, results and operations of Element Fleet Management Corp. (the "Company" or "Element") as at and for the three- and twelve-month periods ended December 31, 2021, and should be read in conjunction with the Company's Management Discussion & Analysis and consolidated financial statements and accompanying notes for the three- and twelve-month periods ended December 31, 2021. All monetary figures are in millions of Canadian dollars unless otherwise noted or for per share amounts. Additional information regarding the Company is available on SEDAR at www.sedar.com and on the Company's website at www.elementfleet.com.

CAUTIONARY STATEMENT

THIS ANALYSIS HAS BEEN PREPARED TAKING INTO CONSIDERATION INFORMATION AVAILABLE TO MARCH 1, 2022. CERTAIN STATEMENTS CONTAINED IN THIS REPORT CONSTITUTE "FORWARD- LOOKING STATEMENTS". IN SOME CASES THE FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY WORDS OR PHRASES SUCH AS "MAY", "CAN", "WILL", "EXPECT", "GUIDANCE", "PLAN", "ANTICIPATE", "TARGET",

"INTEND", "POTENTIAL", "ESTIMATE", "BELIEVE" OR THE NEGATIVE OF THESE TERMS, OR OTHER SIMILAR EXPRESSIONS INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS, INCLUDING, AMONG OTHERS, STATEMENTS REGARDING ELEMENT'S TRANSFORMATION PLAN, GROWTH PROSPECTS AND OBJECTIVES, EXPECTATIONS REGARDING SYNDICATION, ABILITY TO DRIVE OPERATIONAL EFFICIENCIES, ASSETS, BUSINESS STRATEGY, COMPETITIVE POSITIONING, ABILITY TO CREATE VALUE FOR SHAREHOLDERS, THE EVOLUTION OF ELEMENT'S BUSINESS, THE AVAILABILITY OF FUNDS FROM OPERATIONS, CASH FLOW GENERATION, BUSINESS INTEGRATION, STRATEGIC ASSESSMENT, BUSINESS OUTLOOK, ELEMENT'S DIVIDEND POLICY AND THE PAYMENT OF FUTURE DIVIDENDS, ELEMENT'S PROPOSED SHARE PURCHASES, INCLUDING THE NUMBER OF COMMON SHARES TO BE REPURCHASED, THE TIMING THEREOF AND TSX ACCEPTANCE OF THE NORMAL COURSE ISSUER BID AND ANY RENEWAL THEREOF AND OTHER EXPECTATIONS REGARDING FINANCIAL OR OPERATING PERFORMANCE AND METRICS. SUCH STATEMENTS REFLECT THE COMPANY'S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO INHERENT RISKS, UNCERTAINTIES AND NUMEROUS ASSUMPTIONS, INCLUDING, WITHOUT LIMITATION, THE IMPACT OF THE COVID-19 PANDEMIC, GENERAL ECONOMIC CONDITIONS, OPERATIONAL CAPABILITIES, TECHNOLOGICAL DEVELOPMENT, RELIANCE ON DEBT FINANCING, DEPENDENCE ON BORROWERS, INABILITY TO SUSTAIN RECEIVABLES, COMPETITION, INTEREST RATES, REGULATION, INSURANCE, FAILURE OF KEY SYSTEMS, DEBT SERVICE, FUTURE CAPITAL NEEDS AND SUCH OTHER RISKS OR FACTORS DESCRIBED FROM TIME TO TIME IN REPORTS OF ELEMENT, INCLUDING HEREIN AND IN ELEMENT'S MD&A AND ANNUAL INFORMATION FORM, WHICH HAVE BEEN FILED ON SEDAR AND MAY BE ACCESSED AT WWW.SEDAR.COM. THE COVID-19 PANDEMIC HAS CAST ADDITIONAL UNCERTAINTY ON ELEMENT'S INTERNAL EXPECATIONS, ESTIMATES, PROJECTIONS, ASSUMPTIONS AND BELIEFS. THE DURATION, EXTENT AND SEVERITY OF THE IMPACT THE COVID-19 PANDEMIC, INCLUDING MESAURES TO PREVENT ITS SPREAD, WILL HAVE ON ELEMENT'S BUSINESS REMAINS UNCERTAIN AND DIFFICULT TO PREDICT AT THIS TIME.

BY THEIR NATURE, FORWARD-LOOKING STATEMENTS INVOLVE NUMEROUS ASSUMPTIONS, KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES, BOTH GENERAL AND SPECIFIC, WHICH CONTRIBUTE TO THE POSSIBILITY THAT PREDICTIONS, FORECASTS, PROJECTIONS AND OTHER FORMS OF FORWARD-LOOKING INFORMATION MAY NOT OCCUR OR BE ACHIEVED. MANY FACTORS COULD CAUSE ELEMENT'S ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS THAT MAY BE EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS AND READERS ARE CAUTIONED THAT THE LIST OF FACTORS IN THE FOREGOING PARAGRAPH IS NOT EXHAUSTIVE. SHOULD ONE OR MORE OF THESE RISKS OR UNCERTAINTIES MATERIALIZE, OR SHOULD ASSUMPTIONS UNDERLYING THE FORWARD-LOOKING STATEMENTS PROVE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE DESCRIBED HEREIN AS INTENDED, PLANNED, ANTICIPATED, BELIEVED, ESTIMATED OR EXPECTED. ACCORDINGLY, READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON FORWARD-LOOKING STATEMENTS OR INTERPRET OR REGARD FORWARD-LOOKING STATEMENTS AS GUARANTEES OF FUTURE OUTCOMES, AS NO FORWARD-LOOKING STATEMENT MAY BE GUARANTEED. EXCEPT AS MAY BE REQUIRED BY APPLICABLE CANADIAN SECURITIES LAWS, THE COMPANY DOES NOT INTEND, AND DISCLAIM ANY OBLIGATION TO UPDATE OR REWRITE ANY FORWARD-LOOKING STATEMENTS WHETHER ORAL OR WRITTEN AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.

Q4 2021 | Element Fleet Management Corp.

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TABLE OF CONTENTS

Section Content

FEATURED DISCLOSURES

1. Global Order backlog
2. Free cash flow per share and adjusted operating income per share
3. 2022/2023 outlook

STRATEGIC PRIORITIES

Aggressively pursue organic growth and demonstrate the scalability of our operating platform by magnifying 4- 6% (in normal market conditions) annual net revenue growth into high single- to low double-digit operating income growth

1. Net revenue growth in the U.S. and Canada, Australia and New Zealand and Mexico - in local currencies
2. Global net revenue growth
3. Global operating income growth and operating margin expansion

Advance a capital-lighter business model by growing services revenue and strategically syndicating fleet assets, which enhance return on equity

1. Net revenue streams by geography, and services revenue by geography, nature and product
2. 2020 -> 2021 services revenue walk
3. Syndication volume and pre-tax return on common equity
4. Syndication investor growth and new client names syndicated

Achieve high single- to low double-digit annual free cash flow per share growth and predictably return excess equity to shareholders by way of growing common dividends and share buybacks

1. Return of capital
2. NCIB activity
3. Common dividends

COMMERCIAL PROCESSES AND RESULTS

1. Revenue units contracted in the period
2. Illustrative U.S./Canadian sales timelines
3. Illustrative U.S./Canadian implementation and origination timelines

ELECTRIC VEHICLES

1. EV penetration of Element clients' fleets
2. Current estimates as to the timing of battery electric vehicles achieving total cost of ownership/operation (TCO) and purchase price (PP) parity with internal combustion engine vehicles

ASSETS UNDER MANAGEMENT AND NET EARNING ASSETS

7.1 Global assets under management on a constant currency basis

1. 3Q21 -> 4Q21 Assets under management
2. 2020 -> 2021 Assets under management

1. 3Q21 -> 4Q21 End-of-period net earning assets
2. 2020 -> 2021 End-of-period net earning assets

EARNING ASSET DIVERSITY

8.1 Earning asset diversity across industries

VALUE OF TAX ASSETS

9.1 Value of tax assets

Q4 2021 | Element Fleet Management Corp.

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Featured Disclosures this Period

Q4 2021 | Element Fleet Management Corp.

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FEATURED DISCLOSURES

1.1 Global Order backlog (excluding Armada, in constant currency (CC))

Robust client demand for new vehicles in all our operating geographies, coupled with unprecedented OEM production delays, has driven our global Order backlog to a record $2.9 billion, which is ~3.0x our average global Order backlog at year-end.

Orders are OEM commitments to produce vehicles for Element and client commitments to lease or purchase those vehicles from Element, meaning Orders represent guaranteed future revenue, operating income and cash flow. Upon vehicle production, Element compensates the OEM, thereby Originating that vehicle Ordered by that client.

	~200%
Australia and New Zealand
Mexico
$2,900
U.S. and Canada

2,800

2,400

Average global Order backlog at Q4, 2018-2020: $984

2,000

C$M

1,600

1,200

800

400

0

1Q18

2Q18

3Q18

4Q18

1Q19

2Q19

3Q19

4Q19

1Q20

2Q20

3Q20

4Q20

1Q21

2Q21

3Q21

4Q21

Q4 2021 | Element Fleet Management Corp.

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