Element Fleet Management : Q1 2021 - Financial Statements

Interim Condensed Consolidated Financial Statements

Element Fleet Management Corp.

March 31, 2021

Element Fleet Management Corp.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(unaudited, in thousands of Canadian dollars)

	As at		As at
	March 31,		December 31,
	2021	2020
	$	$
ASSETS
Cash	40,537	8,789
Restricted funds (note 6)	475,982	388,978
Finance receivables (note 3 and 16)	8,560,958	9,561,622
Equipment under operating leases (note 4)	2,129,823	2,157,227
Accounts receivable and other assets	220,874	226,952
Derivative financial instruments (note 16)	41,951	53,629
Property, equipment and leasehold improvements, net	105,985	112,352
Intangible assets, net	812,392	814,378
Deferred tax assets	433,633	444,120
Goodwill	1,211,572		1,223,341
	14,033,707	14,991,388
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Accounts payable and accrued liabilities	972,148	1,062,610
Derivative financial instruments (note 16)	50,376	68,282
Borrowings (note 6)	9,104,052	9,864,336
Convertible debentures (note 7 and 16)	155,440	154,267
Deferred tax liabilities	61,706		57,776
	10,343,722	11,207,271
Shareholders' equity (note 8)	3,689,985		3,784,117
	14,033,707		14,991,388

See accompanying notes

On behalf of the Board:

DirectorDirector

Element Fleet Management Corp.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in thousands of Canadian dollars, except for per share amounts)

		Three-month			Three-month
		period ended			period ended
	March 31, 2021		March 31, 2020
		$			$
NET REVENUE
Interest income, net (note 10)		104,111			140,682
Rental revenue and other (note 10)		172,995			174,455
Depreciation of equipment under operating leases (note 4)		(111,892)			(114,820)
		165,214			200,317
Interest expense		54,194			105,012
Net financing revenue		111,020			95,305
Fleet service revenue (note 10)		125,814			136,321
Direct costs of fixed rate service contracts (note 10)		(11,325)			(10,474)
Servicing income, net		114,489			125,847
Syndication revenue, net (note 10)		23,089			26,087
Net revenue		248,598			247,239
OPERATING EXPENSES
Salaries, wages and benefits		73,625			75,470
General and administrative expenses		27,146			31,791
Depreciation and amortization (note 15)		10,526			10,656
Amortization of convertible debenture discount (note 7)		872			2,555
Share-based compensation (note 9)		5,240			5,437
		117,409			125,909
OTHER EXPENSES
Amortization of intangible assets from acquisitions		8,906			10,223
Restructuring and transformation costs (note 17)		-			14,995
(Gain) loss on investments		(2,801)			57
Income before income taxes from operations		125,084			96,055
Provision for income taxes		29,555			16,697
Net income for the period		95,529			79,358
Basic earnings per share (note 12)	$	0.20		$	0.16
Diluted earnings per share (note 12)	$	0.20		$	0.16

See accompanying notes

Element Fleet Management Corp.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited, in thousands of Canadian dollars)

	Three-month		Three-month
	period ended		period ended
	March 31, 2021		March 31, 2020
	$		$
Net income for the period	95,529	79,358
OTHER COMPREHENSIVE LOSS
Items that may be reclassified subsequently to profit or loss:
Cash flow and foreign exchange hedges gain (loss)	9,498	(42,467)
Net unrealized foreign exchange (loss) gain	(76,595)		107,512
	(67,097)	65,045
Provision for (recovery of) income taxes	2,510		(11,265)
Total other comprehensive (loss) income	(69,607)		76,310
Comprehensive income for the period	25,922		155,668

See accompanying notes

Element Fleet Management Corp.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(unaudited, in thousands of Canadian dollars)

Balance, December 31, 2020 Comprehensive income (loss) for the period Dividends - Preferred shares (note 8) Dividends - Common shares (note 8) Options exercised (notes 8 and 9)

Shares repurchased for cancellation (note 8) Employee stock option expense (note 9) Balance, March 31, 2021

Balance, December 31, 2019 Comprehensive income for the period Dividends - Preferred shares (note 8) Dividends - Common shares (note 8) Options exercised (notes 8 and 9)

Issuance of shares, net of share issue costs (note 8) Employee stock option expense (note 9)

Balance, March 31, 2020

Common share	Preferred share	Equity component	Contributed	Retained earnings	Accumulated other	Total shareholders'
of convertible	comprehensive
capital	capital	debentures	surplus (deficit)	(deficit)	income (loss)	equity
$	$	$	$	$	$	$
3,180,379	511,869	59,603	51,788	(64,057)	44,535	3,784,117
-	-	-	-	95,529	(69,607)	25,922
-	-	-	-	(8,103)	-	(8,103)
-	-	-	-	(28,259)	-	(28,259)
29,300	-	-	(8,681)	-	-	20,619
(56,814)	-	-	(47,668)	-	-	(104,482)
-	-	-	171	-	-	171
3,152,865	511,869	59,603	(4,390)	(4,890)	(25,072)	3,689,985
3,127,714	680,412	59,603	68,754	(217,900)	94,062	3,812,645
-	-	-	-	79,358	76,310	155,668
-	-	-	-	(10,906)	-	(10,906)
-	-	-	-	(19,834)	-	(19,834)
9,539	-	-	(4,055)	-	-	5,484
4,884	-	-	-	-	-	4,884
-	-	-	337	-	-	337
3,142,137	680,412	59,603	65,036	(169,282)	170,372	3,948,278

See accompanying notes