Exchange Income : Q3 2024 Quarterly Results

Third Quarter Report

For the nine months ended

September 30, 2024

CEO's Message

Since our inception in 2004, our commitment to our strategy has been steadfast, and the results of that commitment have been consistently rewarding for the Company, our employees and our shareholders. Our purpose-built strategy has been based on three fundamentals: i) to provide our shareholders with dependable and growing cash distributions ii) maximize the share value associated with our diversified portfolio of subsidiaries, including through continued investment in those subsidiaries post-acquisition, and iii) employ a disciplined acquisition strategy. The strategy is rooted in taking the long-term view of our investments and our portfolio of subsidiaries. We have not strayed from that purpose in the past 20 years, and the record setting results for the third quarter highlight all aspects of our strategy.

Highlights from EIC's 2024 Third Quarter Financial Performance

• Record quarter revenues of $710 million, an increase of $22 million.
• Record quarterly Adjusted EBITDA of $193 million, representing growth of $25 million over the prior period or an increase of 15%.
• Record quarterly Free Cash Flow of $136 million compared to the prior period of $117 million, an increase of $19 million along with record Free Cash Flow per share of $2.86 compared to the prior period of $2.51.
• Record Net Earnings of $56 million compared to the prior period of $50 million and Net Earnings per share of $1.18 compared to the prior period of $1.06.
• Adjusted Net Earnings record of $61 million compared to the prior period of $55 million and Adjusted Net Earnings per share of $1.29 compared to the prior period of $1.19.
• Free Cash flow less Maintenance Capital Expenditures quarterly record of $81 million compared to the prior period of $74 million and record Free Cash flow less Maintenance Capital Expenditures per share of $1.71.
• Trailing Twelve Month Free Cash Flow less Maintenance Capital Expenditures Payout Ratio was 60% compared to the prior period of 58%.
• Announced that the Corporation was the successful bidder to provide integrated fixed-wing and rotary air ambulance services for the Province of Newfoundland and Labrador.
• Announced a new contract to provide airborne intelligence, surveillance and reconnaissance support for a domestic security agency in an allied European nation utilizing an existing aircraft along with an additional aircraft to be deployed during the contract.
• Announced, subsequent to quarter end, the acquisition of Spartan Mat, LLC and its subsidiary Spartan Composites, LLC which is a strategic acquisition expanding our Environmental Access Solutions business line into the US and adding additional products for our Canadian operations.

Revenue generated by the Aerospace & Aviation segment increased by $19 million or 5% to $433 million and Adjusted EBITDA increased by $31 million or 25% to $155 million over the comparative period. The significant drivers of the revenue and profitability increases relate to previous Growth Capital Expenditures related to additional routes, improved load factors, increased flying under the BC medevac contract with existing aircraft, increases in medevac activity under the new Manitoba contract, increased tempo of flying on owned ISR aircraft and continued step-based improvements in our Aircraft Sales & Leasing business line as aircraft and engine leasing continues to strengthen.

Manufacturing segment revenue increased by $3 million to $276 million for the quarter and Adjusted EBITDA decreased by $3 million to $51 million. The decrease was primarily driven by reductions in revenue and Adjusted EBITDA in the Multi-Storey Windows Solutions business and reductions in Adjusted EBITDA in the Precision Metal & Engineering business line offset by improvements in revenue and Adjusted EBITDA in the Environmental Access Solutions business line. Our Multi-Storey Windows Solutions business line was negatively impacted by customer driven project delays due to the macroeconomic environment along with additional costs associated with integrating the businesses. Our Precision Manufacturing & Engineering business line experienced a small improvement in revenue, however Adjusted EBITDA declined due to changes in sales mix among various businesses due to the temporary deferral of capital spending by certain customers during the period. We are continuing to see near record levels of quoting activity during the quarter and are seeing those inquiries being converted into firm fixed bookings throughout our various subsidiaries.

Third Quarter 2024 Report

-2-

Exchange Income Corporation

The diversification of our businesses was evident as our Aerospace & Aviation businesses drove our consolidated results. Our Manufacturing segment continued to see positive underlying trends which are encouraging as we move into 2025 and 2026. The discipline that we employ in our Growth Capital Expenditures and in our acquisition strategy was also apparent in our third quarter results. We made significant Growth Capital Expenditures in our Aerospace & Aviation segment over the past year and those investments are starting to yield their intended benefits as evidenced by our absolute and per share metrics. The positive trend of contract wins continued post quarter end with the announcement of the fixed-wing and rotary air ambulance services for the Province of Newfoundland and Labrador along with an expanded contract to provide airborne intelligence, surveillance and reconnaissance support for an allied European nation. We also announced the acquisition of Spartan Composites, LLC along with our quarterly results announcement. I previously spoke about our strategic desire to expand into the US market and we had looked at numerous businesses that could have accomplished that objective. Due to our disciplined acquisition strategy, none of our previous attempts met our strict criteria until we connected with the owners of Spartan. This acquisition has all of the hallmarks of what we look for in acquisitions. They are a niche business, as they are one of three composite mat manufacturers in North America. They have a strong management team that will lead the business into the future and their financial results will be accretive to our business on a stand-alone basis. Spartan provides a strategic entry for our Environmental Access Solutions business line into the US market along with product diversification for our Canadian operations through the rental and sale of composite matting solutions to our customers.

We are excited about our bright future and the growth prospects on the horizon. We are starting to see the economic uncertainty in North America abating. Canadian and US interest rates are on the decline and with the US election now in the rear-view mirror we are becoming more and more confident in the operating prospects of our business. We previously reported that we were seeing near record levels of inquiries at our Manufacturing segment businesses and that continued throughout the quarter. With the economic uncertainty risks reducing we are seeing those inquiries being converted into firm bookings as evidenced by over $200 million being added to our Multi-Storey Window Solutions business line backlog over the past quarter. This positive momentum is expected to continue for the fourth quarter and into 2025 for all our businesses. These tailwinds are expected to provide positive momentum as we move through 2025 and will be a major contributor to our longer-term results.

We continue to be very pleased with our financial performance. The strategies and tactics that our management teams are implementing today will set the foundation for fiscal 2025 and beyond. We are continuing the integration of our Multi-Storey Window Solutions business under the leadership of Darwin Sparrow. Our Aerospace team remains busy in responding to requests for proposals for services around the globe. Our Essential Air Services team continues to meet with interested governments regarding our world class medevac services and we are continuing to see significant interest in cargo and charter operations as Canada develops its critical mineral and other resources. These are just a few of the examples which lead me to conclude that the future of EIC is very bright. Our business model and the diversification of our businesses has proven itself over the past 20 years and it will be the guiding light to lead us into the future. Based on our contract wins and organic growth initiatives, along with the Spartan acquisition, I am confident that our Adjusted EBITDA will be between $690 and $730 million for 2025.

During the third quarter we gather our senior management team members from each subsidiary and we meet at a common location to discuss strategy, connect with one another and celebrate our successes. I come away from those meetings energized by each company and the opportunities before them. I can't help to reminisce about how much we have achieved over 20 years. In 2004 we made our first acquisition, Perimeter. Today we will have more than $2.5 billion in revenues per year with over 8,000 employees around the globe. This was all accomplished while staying true to our initial purpose. To that end, by year end we will have paid out $1.0 billion in dividends to our shareholders with a total shareholder annual return nearing twenty percent since inception of the Company. The $1.0 billion dividend mark is an incredible statistic that wasn't even fathomable 20 years ago when Duncan Jessiman and I were discussing our proposed business model. I am as excited as ever about the various prospects of each of our businesses. We have strong management teams and cultures within each business, and they stand ready to execute on their strategies. There are numerous opportunities before us and we will be ready to execute on those opportunities to drive the results over the short, medium and long term and continue the positive momentum that we have achieved.

Thank you to our shareholders, our employees, our management teams, our customers and the communities we serve.

Mike Pyle

Chief Executive Officer

Third Quarter 2024 Report

-3-

Exchange Income Corporation

November 7, 2024

TABLE OF CONTENTS

1. FINANCIAL HIGHLIGHTS AND SIGNIFICANT EVENTS ___________________________________________________ 9
2. RESULTS OF OPERATIONS _______________________________________________________________________ 11
3. INVESTING ACTIVITIES ___________________________________________________________________________ 19
4. DIVIDENDS AND PAYOUT RATIOS__________________________________________________________________ 23
5. OUTLOOK ______________________________________________________________________________________ 24
6. LIQUIDITY AND CAPITAL RESOURCES______________________________________________________________ 27
7. RELATED PARTY TRANSACTIONS _________________________________________________________________ 29
8. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS _______________________________________________ 29
9. ACCOUNTING POLICIES __________________________________________________________________________ 29
10. CONTROLS AND PROCEDURES __________________________________________________________________ 29
11. RISK FACTORS_________________________________________________________________________________ 30
12. NON-IFRSFINANCIAL MEASURES AND GLOSSARY__________________________________________________ 30
13. QUARTERLY INFORMATION ______________________________________________________________________ 32
14. FINANCIAL STATEMENTS AND NOTES_____________________________________________________________ 34

Third Quarter 2024 Report

-4-

Exchange Income Corporation

Management Discussion & Analysis

of Operating Results and Financial Position for the three and nine months ended September 30, 2024

PREFACE

This Management's Discussion and Analysis ("MD&A") supplements the unaudited interim condensed consolidated financial statements and related notes for the three and nine months ended September 30, 2024 ("Consolidated Financial Statements") of Exchange Income Corporation ("EIC" or "the Corporation"). All amounts are stated in thousands of Canadian dollars, except per share information and share data, unless otherwise stated.

This MD&A should be read in conjunction with the unaudited interim condensed consolidated financial statements of the Corporation for the three and nine months ended September 30, 2024, its annual financial statements for the year ended December 31, 2023, and its annual MD&A for the year ended December 31, 2023. The unaudited interim condensed consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") applicable to the preparation of the interim financial statements.

FORWARD-LOOKING STATEMENTS

This report and the documents incorporated by reference herein contain forward-looking statements. All statements other than statements of historical fact contained in this report and the documents incorporated by reference herein are forward-looking statements, including, without limitation, statements regarding the future financial position, business strategy, completed and potential acquisitions and the potential impact of such completed and/or potential acquisitions on the operations, financial condition, capital resources and business of the Corporation and/or its subsidiaries, the Corporation's policy with respect to the amount and/or frequency of dividends, budgets, litigation, projected costs and plans and objectives of or involving the Corporation or its subsidiaries or any businesses to potentially be acquired by the Corporation. Prospective investors can identify many of these statements by looking for words such as "believes", "expects", "will", "may", "intends", "projects", "anticipates", "plans", "estimates", "continues" and similar words or the negative thereof. Although management believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct.

Forward-looking statements are necessarily based upon a number of expectations or assumptions that, while considered reasonable by management at the time the statements are made, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Readers are cautioned to not place undue reliance on forward-looking statements which only speak as to the date they are made. Although management believes that the expectations and assumptions underlying such forward-looking statements are reasonable, there can be no assurance that such expectations or assumptions will prove to be correct. A number of factors could cause actual future results, performance, achievements, and developments of the Corporation and/or its subsidiaries to differ materially from anticipated results, performance, achievements, and developments expressed or implied by such forward-looking statements. Such factors include, but are not limited to: economic and geopolitical conditions; competition; government funding for Indigenous health care; access to capital; market trends and innovation; general uninsured loss; climate; acts of terrorism, armed conflict, labour or social unrest; pandemic; level and timing of defence spending; government funded defence and security programs; environmental, social and governance; significant contracts and customers; operational performance and growth; laws, regulations and standards; acquisition risk; concentration and diversification risk; maintenance costs; access to parts and relationships with key suppliers; casualty losses; environmental liability risks; dependence on information systems and technology; international operations risks; fluctuations in sales prices of aviation related assets; fluctuations in purchase prices of aviation related assets; warranty risk; performance guarantees; global offset risk; intellectual property risk; availability of future financing; income tax matters; commodity risk; foreign exchange; interest rates; credit facility and the trust indentures; dividends; unpredictability and volatility of prices of securities; dilution risk; credit risk; reliance on key personnel; employees and labour relations; and conflicts of interest. A further discussion of these risks is included in Section 11 - Risk Factors.

The information contained or incorporated by reference in this report identifies additional factors that could affect the operating results and performance of the Corporation and its subsidiaries. Assumptions about the performance of the businesses of the Corporation and its subsidiaries are considered in setting the business plan for the Corporation and its subsidiaries and in setting financial targets. Should one or more of the risks materialize or the assumptions prove incorrect, actual results, performance, or achievements of the Corporation and its subsidiaries may vary materially from those described in forward-looking statements.

The forward-looking statements contained herein or contained in a document incorporated by reference herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included or incorporated by reference in this report are made as of the date of this report or such other date specified in such statement. Except as required by law, the Corporation disclaims any obligation to update any forward-looking information, estimates or opinions, future events or results, or otherwise.

Third Quarter 2024 Report

-5-

Exchange Income Corporation

Management Discussion & Analysis

of Operating Results and Financial Position for the three and nine months ended September 30, 2024

EXCHANGE INCOME CORPORATION

The Corporation is a diversified, acquisition-oriented corporation focused on opportunities in Aerospace & Aviation, and Manufacturing segments. The business plan of the Corporation is to invest in profitable, well-established companies with strong cash flows operating in niche markets. The objectives of the Corporation are:

1. to provide shareholders with stable and growing dividends;
2. to maximize shareholder value through ongoing active monitoring of and investment in its operating subsidiaries; and
3. to continue to acquire additional businesses or interests therein to expand and diversify the Corporation's investments.

Segment Summary

The Corporation's operating segments are strategic business units that offer different products and services. The Corporation has two operating segments: Aerospace & Aviation and Manufacturing.

All consolidated revenue percentages noted below have been calculated by adjusting revenues for acquisitions that were completed in fiscal 2023 to reflect a full year contribution. Acquisitions completed in the current year are not included.

Aerospace & Aviation Segment

The Aerospace & Aviation segment is comprised of three lines of business: Essential Air Services, Aerospace, and Aircraft Sales & Leasing.

Essential Air Services includes both fixed wing and rotary wing operations. Under various brand names across Canada, our subsidiaries provide essential services to Canada's northern and remote communities, including medevac, passenger, charter, freight services, and auxiliary services. The majority of the communities we serve are not accessible year-round by ground transportation, meaning our airlines provide a vital link into these communities. Our operations span across Canada, and more specifically include operations in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Nunavut, Ontario, and Quebec. The Corporation also operates two flight schools, training pilots both for our own airlines and for airlines around the world.

Essential Air Services accounted for approximately 32% of the Corporation's consolidated revenues in fiscal 2023. Items impacting margins within this business are fuel prices, load factors, weather, and, in the current operating environment, the ability to source a full complement of pilots and aircraft mechanics. Labour costs in these areas have increased well above the rate of inflation and in certain circumstances cannot be immediately flowed through to the customer.

Essential Air Services includes the operations of Calm Air International LP, CANLink Aviation Inc. (MFC Training), Carson Air Ltd, Custom Helicopters Ltd., Keewatin Air LP, PAL Airlines Ltd., and Perimeter Aviation LP (including its operating division, Bearskin Airlines).

Aerospace includes our vertically integrated aerospace offerings that provide customized and integrated special mission aircraft solutions primarily to governments across the globe. These services encompass mission systems design and integration, aircraft modifications, intelligence, surveillance, reconnaissance operations ("ISR"), software development, logistics and in-service support. Most of these services are provided pursuant to long term government contracts. In addition, our subsidiaries deliver training solutions across an array of aviation platforms and have in-depth experience in training pilots and sensor operators on both manned and unmanned aircraft for government agencies.

Aerospace accounted for approximately 14% of the Corporation's consolidated revenues in fiscal 2023. Training solutions typically generate lower margins as there are low capital requirements outside of working capital, whereas ISR flying operations typically have higher margins as the upfront investment in the owned assets to perform the ISR flying operations is reflected as an expense through depreciation.

Aerospace includes the operations of Crew Training International, Inc. and PAL Aerospace Ltd.

Aircraft Sales & Leasing includes aftermarket aircraft, engine and parts sales and aircraft and engine leasing along with aircraft management services. Our subsidiaries specialize in regional and commuter aircraft, and seek to monetize their portfolio over the full life cycle of the asset. Our subsidiaries are not typical finance lessors; rather, assets are leased for shorter durations to consume the available green time on those assets. Once the green time has been consumed, the assets can then either be overhauled and leased out again, or torn down into piece parts and sold to airlines around the world to generate further cash flows. Revenue streams include

Third Quarter 2024 Report

-6-

Exchange Income Corporation

Management Discussion & Analysis

of Operating Results and Financial Position for the three and nine months ended September 30, 2024

selling whole aircraft, engines and components of those assets, leasing of aircraft and engines and fee income earned through the provision of services for third parties such as asset management or consignment sales. Our expertise in understanding the value of each component of an aircraft and the anticipated demand for those components, including the next major shop visits and next major overhaul event for each platform we specialize in, provides a competitive advantage on what to buy and what to pay.

Aircraft Sales & Leasing accounted for approximately 12% of the Corporation's consolidated revenues in fiscal 2023. The most significant item impacting margins in this line of business is sales mix. Leasing contributes very high margins and therefore variability in leasing revenue has the largest impact on margin. Within this business line, parts revenue is the most predictable and stable from both sales and margin perspectives; whereas the sale of aircraft and engines varies on a period to period basis, both in volume and in price, but are generally higher dollar and lower margin transactions.

Aircraft Sales & Leasing includes the operations of EIC Aircraft Leasing Limited and Regional One, Inc.

Manufacturing Segment

The Manufacturing segment is comprised of three lines of business: Environmental Access Solutions, Multi-Storey Window Solutions and Precision Manufacturing & Engineering.

Environmental Access Solutions is the largest provider of temporary access solutions in Canada, providing a turnkey service which includes planning, consultation, delivery and installation, logistical support, and removal and washing solutions. Our access solutions and related services provide temporary ground protection that allow customers to access job sites or use heavy machinery and equipment on wet, loose, or otherwise unstable or environmentally sensitive ground. Access mats and bridges provide access to remote areas in a much more environmentally friendly manner than the construction of temporary gravel roads and installation of culverts and water-diversion devices, which are difficult to remove and remediate and can cause cross-contamination of soil. As the largest operator in this industry, we provide a one-stop solution for our clients with a vertically integrated platform including in-house mat manufacturing capabilities, a sizable fleet of trucks and equipment, and a portable, patented closed-loop mat washing system.

Environmental Access Solutions accounted for approximately 8% of the Corporation's consolidated revenues in fiscal 2023. Rentals generate higher margins than other lines of business within Environmental Access Solutions. Rental activity is influenced by several factors, such as the supply of mats in the marketplace, the availability and pricing of timber used in mat production, and weather conditions, including the amount of precipitation and temperature. In addition to rentals, the sale of mats and the overall sales mix in a given period can also have a significant impact on margins. These mat sale transactions are generally higher dollar value and lower margin transactions when compared to rental revenue.

Environmental Access Solutions includes the operations of Northern Mat & Bridge LP and Armand Duhamel & Fils Inc.

Multi-StoreyWindow Solutions includes the design, manufacture and installation of the exteriors of residential and mixed-use high rise buildings which integrate residential, retail, and office spaces. Our subsidiaries manufacture an advanced unitized window wall system, curtain wall, and railing solutions. This business line provides solutions for the entire façade, including the windows, operable elements and opaque areas that surround the exterior envelope of a building. Our vertically integrated offering within the Multi-Storey Window Solutions includes installation services in both Canada and in the United States. In the United States, we have the capability to install both our internally manufactured window solutions and those manufactured by others.

Multi-Storey Window Solutions accounted for approximately 19% of the Corporation's consolidated revenues in fiscal 2023. The most significant items impacting margins within this line of business are the cost of raw materials and product mix. Since our subsidiaries both manufacture and install exteriors of high-rise buildings, the margins realized in a particular period can vary based on the type of work performed. Installation, particularly on jobs completed with non-Quest/BVGlazing product, generate lower margins than for supply and install projects.

Multi-Storey Window Solutions includes the operations of BVGlazing Systems Ltd., and Quest Window Systems Inc.

Precision Manufacturing & Engineering provides engineering and precision manufacturing services throughout North America in a wide variety of industries. These services include: wireless and wireline construction and maintenance services; the manufacture of precision parts and components for a variety of industries; the manufacture of portable hydronic climate control equipment; the manufacture of specialized stainless steel tanks, vessels, and processing equipment; electrical and control systems integration focused on the agricultural material handling segment; and the manufacture of specialized heavy-duty pressure washing and steam systems, commercial water recycling systems, and custom tanks.

Third Quarter 2024 Report

-7-

Exchange Income Corporation

Management Discussion & Analysis

of Operating Results and Financial Position for the three and nine months ended September 30, 2024

Precision Manufacturing & Engineering accounted for approximately 15% of the Corporation's consolidated revenues in fiscal 2023. Margins in this line of business are typically stable. While there may be margin pressure in times of rapid escalation of prices of raw materials, generally our subsidiaries have the ability to pass on these costs to customers over time due to the specialty nature of the products that are being provided.

Precision Manufacturing & Engineering includes the operations of Ben Machine Products Company Incorporated, DryAir Manufacturing Corp., Hansen Industries Ltd., LV Control Mfg. Ltd., Overlanders Manufacturing LP, Stainless Fabrication, Inc., Water Blast Manufacturing LP, and WesTower Communications Ltd.

Management of the Corporation continuously monitors and provides support to the operating subsidiaries. The operating subsidiaries of the Corporation, however, operate autonomously and maintain their individual business identities.

Third Quarter 2024 Report

-8-

Exchange Income Corporation

Management Discussion & Analysis

of Operating Results and Financial Position for the three and nine months ended September 30, 2024

1. FINANCIAL HIGHLIGHTS AND SIGNIFICANT EVENTS

The financial highlights for the Corporation for the periods indicated are as follows:

	FINANCIAL PERFORMANCE			2024			per share		per share		2023		per share		per share
								basic		diluted			basic		diluted
	For the three months ended September 30	$
	Revenue		709,856							$	687,673
	Adjusted EBITDA(1)			192,914								167,751
	Net Earnings			55,885		$		1.18	$	1.08		49,523	$	1.06	$	0.99
	Adjusted Net Earnings(1)			61,372				1.29		1.18		55,263		1.19		1.09
	Free Cash Flow(1)			136,116				2.86		2.50		117,143		2.51		2.20
	Free Cash Flow less Maintenance Capital Expenditures(1)			81,201				1.71		1.53		74,341		1.60		1.43
	Dividends declared			31,403				0.66				29,369		0.63
	For the nine months ended September 30
	Revenue	$		1,972,200							$	1,841,739
	Adjusted EBITDA(1)			461,010								411,904
	Net Earnings			93,061		$		1.96	$	1.92		93,280	$	2.11	$	2.04
	Adjusted Net Earnings(1)			108,608				2.29		2.22		110,283		2.49		2.38
	Free Cash Flow(1)			298,549				6.30		5.57		274,853		6.21		5.46
	Free Cash Flow less Maintenance Capital Expenditures(1)			156,116				3.30		3.05		151,856		3.43		3.15
	Dividends declared			93,849				1.98				83,983		1.89
	Trailing Twelve months as at September 30
	Adjusted Net Earnings payout ratio(1)							87%						78%
	Free Cash Flow less Maintenance Capital Expenditures payout ratio(1)							60%						58%
	FINANCIAL POSITION	September 30, 2024				December 31, 2023
	Working capital	$		539,293							$	540,720
	Capital assets			1,714,652								1,571,067
	Total assets			4,314,451								4,079,807
	Long-term debt			1,629,941								1,422,642
	Equity				1,273,105								1,245,473
	SHARE INFORMATION	September 30, 2024				December 31, 2023
	Common shares outstanding			47,625,641								47,136,625
			September 30, 2024				September 30, 2023
	Weighted average shares outstanding during the period - basic			47,371,859								44,270,149
Note 1)	As defined in Section 12 - Non-IFRS Financial Measures and Glossary.

SIGNIFICANT EVENTS

Normal Course Issuer Bid ("NCIB")

On March 14, 2024, the Corporation renewed its NCIB for common shares and certain series of convertible debentures. Under the renewed NCIB for common shares, purchases can be made during the period commencing on March 19, 2024, and ending on March 18, 2025. The Corporation can purchase a maximum of 4,414,853 shares and daily purchases will be limited to 22,369 shares, other than block purchase exemptions. The Corporation renewed its NCIB because it believes that from time to time, the market price of the common shares may not fully reflect the value of the common shares. The Corporation believes that in such circumstances, the purchase of common shares represents an accretive use of capital.

Under the NCIB for certain series of convertible debentures, purchases can be made during the period commencing on March 19, 2024, and ending on March 18, 2025. The Corporation can purchase a maximum of $7,970 principal amount of 7 year 5.35% convertible unsecured subordinated debentures of EIC (June 2018), $8,607 principal amount of 7 year 5.75% convertible unsecured subordinated debentures of EIC (March 2019), $14,373 principal amount of 7 year 5.25% convertible unsecured subordinated debentures of EIC (July 2021), and $11,500 principal amount of 7 year 5.25% convertible unsecured subordinated debentures of EIC (December 2021), with daily purchases of principal

Third Quarter 2024 Report

-9-

Exchange Income Corporation

Management Discussion & Analysis

of Operating Results and Financial Position for the three and nine months ended September 30, 2024

amount, other than block purchase exceptions, limited to $646, $711, $1,212, and $1,628, respectively. The Corporation sought the NCIB for debentures to permit repurchase and cancellation of these securities during times of market instability where management believes the market price does not reflect the value of the debentures.

Credit Facility Upsize and Extension

On May 6, 2024, the Corporation amended its credit facility. The enhanced credit facility increased to approximately $2.2 billion from approximately $2.0 billion, extended its term to May 6, 2028, and was completed with no change in pricing. This includes $1.846 billion allocated to the Corporation's Canadian head office and US $260 million allocated to EIIF Management USA, Inc. The amount allocated to the Corporation's Canadian head office includes a new $200 million social loan tranche, which will be used to fund the purchase of new King Air aircraft at Carson Air for the long-term medevac contract with the Province of British Columbia. The $200 million Social Loan permits the Corporation to draw on that portion of the facility as the new aircraft are delivered and modified for medical purposes. As part of the transaction, ISS Corporate provided an independent Second Party Opinion that concluded the loan is in alignment with the Social Loan Principles as issued by the Loan Market Association. The increased size of the facility provides the Corporation capacity to continue to execute on its core strategy of pursuing accretive growth through investment in its operating subsidiaries and through acquisition.

On October 30, 2024, subsequent to the end of the quarter, the Corporation, at its option, reallocated US $100 million from the Corporation's Canadian head office to EIIF Management USA Inc. There was no change to the overall commitment to the consolidated group under the credit facility. This reallocation was completed in preparation for the closing of the purchase of Spartan.

Acquisition of Armand Duhamel & Fils Inc.

On June 21, 2024, the Corporation acquired Armand Duhamel & Fils Inc. ("Duhamel") for a purchase price of $19.5 million, which can increase up to $22.5 million if certain post-closing targets are achieved. The initial purchase price includes EIC share consideration of $3 million and $16.5 million cash paid on closing, and is subject to customary post closing adjustments. Duhamel, located in St-Ignace-de- Stanbridge, Quebec, operates a sawmill operation primarily focused on the manufacture and sale of eastern hemlock products. Duhamel will play an important role in partnership with Northern Mat & Bridge to further grow the Corporation's Environmental Access Solutions business line in the Quebec and Eastern Canada markets.

SUBSEQUENT EVENTS

Province of Newfoundland and Labrador Integrated Ambulance Services Contract Award

On October 3, 2024, the Corporation announced it was the successful bidder to provide integrated fixed-wing and rotary air ambulance services for the Province of Newfoundland and Labrador. The tendered 10-year contract with a 5-year renewal requires a fleet of up to 6 aircraft. The aircraft are expected to be phased into service with the first aircraft going into service during the first half of 2025.

Airborne Intelligence, Surveillance and Reconnaissance Support Contract Award

On October 30, 2024, the Corporation announced PAL Aerospace was awarded a new 15-month contract to provide airborne intelligence, surveillance and reconnaissance support to a domestic security agency in an allied European nation. The new contract follows an initial contract that saw the deployment of ISR aircraft and expands PAL Aerospace's contribution to the agency's enhancement of border security, combat transnational crime and protect vulnerable individuals from exploitation by migrant smugglers. Expanded in scope, this contract will see PAL Aerospace deploy a second aircraft during 2025 and additional technical capabilities to augment their existing operation.

Third Quarter 2024 Report

-10-

Exchange Income Corporation