Element Fleet Management : Q3 2020 - Financial Statements

Interim Condensed Consolidated Financial Statements

Element Fleet Management Corp.

September 30, 2020

Element Fleet Management Corp.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(unaudited, in thousands of Canadian dollars)

	As at		As at
	September 30,		December 31,
	2020	2019
	$	$
ASSETS
Cash	75,633	24,224
Restricted funds (note 6)	488,250	434,128
Finance receivables (note 3 and 16)	10,145,518	11,986,974
Equipment under operating leases (note 4)	2,022,871	2,101,367
Accounts receivable and other assets	208,161	219,676
Derivative financial instruments (note 16)	63,665	41,396
Property, equipment and leasehold improvements, net	121,978	141,626
Intangible assets, net	825,089	793,279
Deferred tax assets	485,269	440,952
Goodwill	1,275,435		1,245,981
	15,711,869	17,429,603
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Accounts payable and accrued liabilities	911,719	924,936
Derivative financial instruments (note 16)	88,962	39,145
Borrowings (note 6)	10,735,285	11,892,861
Convertible debentures (note 7 and 16)	153,113	711,791
Deferred tax liabilities	88,233		48,225
	11,977,312	13,616,958
Shareholders' equity (note 8)	3,734,557		3,812,645
	15,711,869		17,429,603

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
	September 30,		September 30,
		2020			2019
		$			$
NET REVENUE
Interest income, net (note 10)		122,100			157,633
Rental revenue and other (note 10)		159,381			183,270
Depreciation of equipment under operating leases (note 4)		(104,908)			(118,767)
		176,573			222,136
Interest expense		73,301			121,605
Net financing revenue		103,272			100,531
Fleet service revenue (note 10)		135,488			133,034
Direct costs of fixed rate service contracts (note 10)		(10,754)			(10,853)
Servicing income, net		124,734			122,181
Syndication revenue, net (note 10)		15,246			23,084
Net revenue		243,252			245,796
OPERATING EXPENSES
Salaries, wages and benefits		74,910			79,904
General and administrative expenses		28,789			27,765
Depreciation and amortization (note 15)		10,568			10,477
Amortization of convertible debenture discount (note 7)		843			2,504
Share-based compensation (note 9)		5,591			4,360
		120,701			125,010
OTHER EXPENSES
Amortization of intangible assets from acquisitions		9,338			8,948
Restructuring and transformation costs (note 17)		24,213			34,055
Loss on investments		710			240
Income before income taxes from operations		88,290			77,543
Provision for income taxes		17,512			7,398
Net income for the period		70,778			70,145
Basic earnings per share (note 12)	$	0.14		$	0.14
Diluted earnings per share (note 12)	$	0.14		$	0.13

See accompanying notes

Element Fleet Management Corp.

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

		Nine-month			Nine-month
		period ended			period ended
	September 30,		September 30,
		2020			2019
		$			$
NET REVENUE
Interest income, net (note 10)		403,490			491,916
Rental revenue and other (note 10)		481,833			559,411
Depreciation of equipment under operating leases (notes 4)		(319,099)			(360,893)
		566,224			690,434
Interest expense		266,992			379,471
Net financing revenue		299,232			310,963
Fleet service revenue (note 10)		396,227			398,384
Direct costs of fixed rate service contracts (note 10)		(31,131)			(33,793)
Servicing income, net		365,096			364,591
Syndication revenue, net (note 10)		51,666			62,039
Net revenue		715,994			737,593
OPERATING EXPENSES
Salaries, wages and benefits		225,239			244,551
General and administrative expenses		89,170			86,155
Depreciation and amortization (notes 15)		32,134			31,307
Amortization of convertible debenture discount (note 7)		5,401			10,651
Share-based compensation (note 9)		15,455			14,940
		367,399			387,604
DISPOSITION OF 19TH CAPITAL
Gain on settlement of debt (note 5)		38,580			-
Loss on sale of assets (note 5)		(52,442)			-
Net loss on disposition		(13,862)			-
OTHER EXPENSES
Amortization of intangible assets from acquisitions		29,221			27,236
Restructuring and transformation costs (note 17)		57,871			62,742
Loss on investments		764			1,332
Income before income taxes from operations		246,877			258,679
Provision for income taxes		38,147			44,000
Net income for the period		208,730			214,679
Basic earnings per share (note 12)	$	0.40		$	0.42
Diluted earnings per share (note 12)	$	0.40		$	0.41

See accompanying notes