Financing a Growing Economy 2008 Annual Report

EQUIPMENTLEASINGANDFINANCEASSOCIATION 2008 ANNUAL REPORT TABLEOFCONTENTS

Report of ELFA Chairman William H. Verhelle ...... 5

Report of ELFA President Kenneth E. Bentsen, Jr...... 9

The Equipment Finance Market ...... 11

Membership ...... 13

Advocacy...... 14

Communications ...... 17

Business Development ...... 19

Professional Development...... 21

Industry Research and Information ...... 22

ELFA Officers and Board of Directors ...... 25

ELFA Committees ...... 26

Financial Statement ...... 29

2008 ANNUAL REPORT 3 2008 ANNUAL REPORT FROMTHECHAIR

he U.S. mortgage crisis of 2008 rapidly altering our landscape. Indus- triggered a global credit crisis try participants are changing. Large Tthat continues to influence and small portfolios are being traded. events in the commercial equipment And new sources of capital are enter- finance industry. Many large and small ing the business, as many highly expe- equipment finance companies are rienced equipment finance companies challenged to raise capital. The struc- exit. Following months of unprece- tured finance market has been sub- dented government intervention in the stantially closed due to problems in banking and financial markets, the the mortgage markets; unprece- commercial equipment finance indus- dented write-downs and bank failures try is braced for a substantial eco- have reduced lending to the equip- nomic slowdown—an environment that ment finance industry. None of this may test the soundness of even the was anticipated just one year ago. most creditworthy portfolios. All of Unlike prior periods of temporary these changes are forcing consider- illiquidity, the current drought has able dislocation among equipment William Verhelle impacted many money-center, super- finance professionals. regional and regional banks, as well Trade associations of any type are as other large U.S. financial institu- most valuable to their members dur- tions. During previous periods of ing periods of transition. And the scarce liquidity, banks were the ELFA has never been more important arbiters of limited capital to non-bank to this industry than it is today. And industry participants. In most cases, just as these challenging financial the shortage of capital was the result times test our personal and profes- of an unwillingness to lend, as op- sional character as individuals, the posed to an inability to lend. This current financial crisis will serve as time, the scope and magnitude of the a test for the ELFA. capital shortage is different, prompt- ing global government intervention on Current ELFA Mission a scale never before seen in modern Nearly three years ago, I was hon- economic history. ored to serve on the ELFA Succes- As a whole, the U.S. equipment sion and Transition Committee, which finance industry experienced stable recruited former Congressman Ken- growth and reliable earnings during neth E. Bentsen, Jr. to serve as the the past two decades. This mature President of the ELFA. Shortly there- industry was characterized by consoli- after, I had the privilege to serve on dation, with large players seeking the Executive Committee, which earnings growth primarily through worked closely with Ken Bentsen and improved economies of scale. Firms his senior staff as they developed a carefully executing a prudent growth new, three-year business plan for the strategy operated in a relatively sta- ELFA. This past year saw continued ble, predictable environment. work to implement that plan. Many Despite the ongoing financial crisis, aspects of the plan have special the fundamentals of the U.S. commer- importance in the current business cial equipment finance industry have environment. changed little. The U.S. economy may be entering recession; but so far, in- I Industry communication. dustry loan losses and increased Government and non-government delinquencies appear to be confined regulators must understand our to relatively narrow segments such as industry — and the critical role our transportation, construction and vari- U.S. $650B per year equipment ous parts of the small ticket arena. finance industry plays in the forma- Nevertheless, external forces are tion of capital throughout the U.S.

2008 ANNUAL REPORT 5 economy. Under Ken Bentsen’s formation concerning a rapidly Building a Strong Future leadership, the ELFA initiated a changing marketplace. Currently, The initiatives described above program of systematic, disciplined the ELFA sponsors two annual represent several parts of the current messaging to key constituents in conferences designed to help mem- three-year strategic plan. But if the both government and the private ber companies raise capital: the ELFA wishes to remain relevant, it sector. This program also includes Funding Conference in Chicago must continue to look to the future. targeted communications to key and the Investor Conference in With that in mind, and considering the policy makers. New York City. Additional confer- exceptional changes thrust upon our ences addressing topics such as industry during this tumultuous year, I Industry data. Accurate, reliable, Credit and Collections and Equip- we sought new ways the ELFA might independently compiled information ment Management are conducted better serve its members in 2009 regarding the performance of indus- throughout the year. and beyond. try participants is especially impor- As we entered the third year of Ken tant today. The ELFA is the primary I Best practices. The ELFA pro- Bentsen’s initial plan, we felt it was source for such data, which helps vides member companies with a appropriate to reconvene the Execu- member companies educate new wide range of information concern- tive Committee to reconsider the investors and business partners re- ing industry best practices such as: ELFA’s future. During a three-day garding the performance of the U.S. proven legal strategies and provi- Executive Committee meeting in equipment finance industry. The sions, credit underwriting stan- August, we evaluated every aspect ELFA is also the only source for dards, human resource manage- of the ELFA’s current strategic plan. comprehensive benchmarking data ment, employee training methods We discussed what is working well, used by leading firms to measure and other topics. what isn’t working, and what needs and improve business performance to be improved or eliminated. We also relative to direct competitors. I Industry reputation and busi- contemplated potential new member ness practices. Honest, transpar- services. I Advocacy and legal. The ELFA ent business practices are essential The Executive Committee provided has expanded the resources de- components of a sustainable indus- the ELFA staff with a comprehensive voted to state and federal lobbying. try. The challenges confronting the report outlining its assessment of the With support from the ELFA Legal global financial system have also Association’s programs and services. Committee, the Association also made self-regulation and sound Recommendations for new or ex- monitors legal matters impacting a business practices more essential panded programming included the broad range of member companies. than ever before. As a large, diverse following: and critically important industry, we I Professional development. share a great responsibility. The I Establish new technologies This year, the ELFA began releasing ELFA understands that responsibil- for improved member interac- new online employee training pro- ity, and urges effective self-regulation and communication. grams designed to cost-effectively tion, prudent business practices Member interaction is at the core of and conveniently assist member and financial transparency. The es- the ELFA experience. Today, that in- companies with the education of tablishment and enforcement of a teraction is facilitated primarily new employees. Additional online new ELFA Code of Conduct, appli- through face-to-face conferences programs will provide in-depth train- cable to all ELFA member compa- and meetings, and through E-mail. ing regarding credit underwriting nies, is an important aspect of It was suggested that the ELFA and other key subject areas. These industry self-regulation and an ex- should investigate new technolo- new training programs are the result ample of the way the ELFA has gies for communicating with mem- of development initiated over two been determined to lead, rather bers, and for enabling members to years ago in connection with the than follow industry developments. establish connections with each ELFA’s current business plan. other through regional town hall meetings, social networking and vir- I Meetings and conferences. tual meeting technologies. Meetings and conferences provide opportunities for members to con- Additionally, it was suggested that nect with each other and share in- the ELFA Web site be revised to pro-

6 2008 ANNUAL REPORT vide more convenient member access Chairman, Jim Ambrose, have been distribution models; to devise better to additional industry and Association instrumental in implementing these ways to serve our valued customers. information, possibly allowing mem- improvements, and they have thought- As Chairman of the Equipment bers to customize their own ELFA ful plans to further advance the Busi- Leasing and Finance Association, Web site access. ness Council Steering Committees in I’m pleased to report to you that the The Board has since approved the coming year. ELFA is well prepared to lead this the formation of a sub-committee to $650B industry through this current This is a small sample of the work evaluate and recommend new tech- period of transition, and into the com- that is being done to ensure that the nologies to improve member commu- ing decade. ELFA remains relevant to all its mem- nication. bers in the years to come. As Chair- man of the ELFA during this difficult I Further expand state govern- Sincerely, period, I can assure you that the ment affairs resources. State ELFA’s leadership recognizes the im- government affairs support is a portance of the Association’s mission. highly valued service of the Associ- So far, 2008 has been a challeng- ation. As state tax issues and indus- ing year; and things may get worse try regulation become increasingly William (Bill) H. Verhelle before they get better. But change complex, members require addi- Chairman brings opportunity. And as some of us tional support. take pause to size-up the magnitude ______The Board has approved the cre- of the changes that have occurred William (Bill) Verhelle is the Chief Executive ation of a state government affairs during the past year, the business Officer of First American Equipment Finance council, in order to assist the Associa- itself continues. in Fairport, New York. Bill holds a Bachelor tion in identifying and targeting issues The product we provide—commer- of General Studies Degree (BGS) from the requiring Association involvement, cial equipment financing for growing University of Michigan at Ann Arbor, a Master and to help provide increased state businesses—is not a new, esoteric in Business Administration (MBA) from the tax and regulatory services to member product. It is not an overly complex Anderson School at UCLA and a Doctor of Laws (JD) from Cornell Law School. companies. financial instrument that didn’t exist just a decade ago. Equipment finance I Continue development of the is the fundamental building block of Business Council Steering all developed economies. And it is Committees. The Executive Com- unimaginable that it won’t continue mittee believes that improved ELFA to exist in the future. performance results from better The ELFA and the members of the member communication. The Busi- commercial equipment finance indus- ness Councils can execute much of try have shown great leadership dur- the day-to-day business of the As- ing the past decade. The behavior of sociation, and provide the ELFA this industry stands in stark contrast staff with needed information about to the dramatic problems experienced marketplace changes and member elsewhere in the lending industry. We needs. must continue these successful policies. We must self-regulate, promote Last year, we changed many as- transparency, and mandate ethical pects of the way these Business business practices. If we continue our Councils come together and operate. work in these areas, we will ensure This year, we conducted our first that we continue to play a critical role annual Business Council Steering in the growth of small and large busi- Committee member meeting in Wash- nesses throughout the U.S. and the ington, D.C. in February. On the eve world. of the ELFA’s 47th Annual Convention So, our challenge now will be to get in New Orleans, we conducted our back to work. To continue doing what first joint ELFA Business Council/ we’ve always done: to build better ELFA Board of Directors meeting. businesses; to invent more efficient Ken Bentsen and the incoming ELFA

2008 ANNUAL REPORT 7 8 2008 ANNUAL REPORT FROMTHEPRESIDENT

ore than a year ago, at the governmental response, with little as- August 2007 meeting of the surance of what the future will bring. MELFA Executive Committee, And yet, while no sector of financial officers and directors noted that eco- services has been immune from this nomic storm clouds were forming and year of turbulence, and ours has cer- advised that the Association take a tainly experienced the effects of the conservative approach with the com- broader market, the equipment fi- ing budget year. That was prescient nance sector has persevered in pro- counsel. In January, when the Equip- viding capital to American businesses ment Leasing & Finance Foundation at home and abroad. This is a testa- convened its annual Industry Future ment to the men and women that Council at the ELFA offices, a num- make up our industry. ber of the participants expressed ELFA has also not been immune deep concern regarding the state of from the downturn and we have ex- the financial markets and the possible perienced a decline in revenues and effect on the equipment finance sec- expect that to continue into the next Kenneth E. Bentsen, Jr. tor. Throughout the winter and spring year. That being said, the Association we experienced mixed demand for has performed well under the very ELFA conferences and products able leadership of our Chairman Bill while our indices indicated a slacken- Verhelle who has given more than his ing of new business volume. A fair share of time and talent to our efforts number of members reported contin- this year. With a strong Board of ued availability of credit and business Directors and officers, including our demand holding steady, if not in- incoming Chairman Jim Ambrose, creasing. We then witnessed the in- and our fine staff, we are in excellent duced sale of Bear Stearns with shape to confront the challenges amazement, and few if any believed it ahead. to be a predictor of things to come. The Association exceeded our his- After a first quarter decline, by mid- toric membership renewal rate of year the Monthly Leasing and Finance 86%, even in light of a dues increase Index (the “MLFI-25”) began to show and recruited 55 new members as of year over year growth in new busi- this writing. While conference atten- ness volume even as the credit dance varied, with some such as crunch widened and two large ELFA Legal and Operations and Technology members exited the business. exceeding budget expectations, we By fall, the federal government had have been successful in cutting costs. placed Fannie Mae and Freddie Mac We experienced a decline in registra- into receivership, Lehman failed, AIG tions for our staple Principles of became the recipient of government Equipment Leasing and Finance for financing, and the Congress ap- the first time in its history, but we also proved a $700 billion financial rescue grew our web-based seminar busi- package. Wall Street was radically re- ness and just launched our web- aligned and the credit markets came based Fundamentals of Equipment to almost a complete halt with the Leasing and Finance which will allow Federal Reserve becoming the lender our members to apply industry unique of last resort for the commercial training broadly across their workforce paper market. in a timely and cost efficient manner. As we come to the end of 2008, We saw no shortage of public pol- we look back in awe at the change icy issues affecting our sector at the that has been wrought on the global federal, state and international levels. financial system, the breathtaking up- ELFA staff, working with our mem- heaval in the financial services indus- bers, was instrumental in ensuring try and the unprecedented that our voice was heard in legislative

2008 ANNUAL REPORT 9 and regulatory arenas, often with suc- the very core reasons for our exis- principal source for industry infor- cess. As we continued to address tence in order to remain relevant to mation—is as important today, and long-standing policy issues in the tax our members. will be in the year to come, as ever and accounting areas, we added air- To that end, this Association will before. craft, energy, marine and rail issues to continue its efforts to build out our Thank you for your continued our portfolio. And, as the level of leg- public affairs, advocacy, industry data support of the Association. islative and regulatory activity at the and research. At this critical juncture state level continued to increase, our of transforming financial markets with Sincerely, added investment in resources dedi- an increasing public sector role and a cated to state policy paid off. changing of the guard in Washington ELFA research, and that of our with a new presidential administra- affiliated Equipment Leasing & Fi- tion, our sector simply has no choice. Kenneth E. Bentsen, Jr. nance Foundation, continues to set While the political watchword this President the pace for the industry. This year year has been “change,” we are al- we had the largest participation in ready in the midst of change and the annual Survey of Equipment Fi- should expect a great deal more af- nance Activity (formerly the Survey fecting our industry, our market, the of Industry Activity) and expanded economy and the legislative and reg- media and analyst coverage of the ulatory framework. Now more than MLFI-25. The Foundation continues ever our industry will need to be or- to put out top-drawer research at an ganized not only to respond to this increasing rate. Combined, ELFA is change, but to effect it as well. This far and away the principal source for means more, not less, advocacy and industry information. branding of the economic rationale of The Association has also been suc- our industry product. And we should cessful in continuing to establish the also expect that our industry’s in- equipment finance sector’s brand vestors will demand increased market identity with key audiences, including data and research, and we must be financial analysts and media. Increas- prepared to accomplish that task. ingly, key financial media seek the We must also respond to the eco- views of our members on broader nomic conditions and changing na- economic matters. And, we continue ture of our member companies and to expand the number of financial an- their workforce through our confer- alysts who cover our market. ence and product offerings. While we As we complete 2008, perhaps will continue to hold our historically with a sigh of relief, and look to 2009 successful meetings, we will proceed with anticipation, it is more important apace with our move into web-based than ever that we take stock of our delivery of information and products mission and role as it relates to the such as web-seminars and profes- industry we serve. Our members, sional development. And, we will small and large, will continue to face continue with the expansion of our pressure from the fall out in the finan- industry best practices roundtables cial markets. We will likely witness to take full advantage of the broad more consolidation and member swath of the industry our membership companies exiting the business. Inter- captures. nally, we have cut our forecast for at- In tough economic times managers tendance at meetings and must make critical choices and the conferences in anticipation of further Association must insure that the serv- cost reductions at member firms. ices and products that we provide In these challenging times, the meet our members’ critical needs. Association cannot just rely on re- Our mission—to be the forum for in- selling the same programs and prod- dustry development; the platform to ucts but rather we must emphasize advocate for the industry and the

10 2008 ANNUAL REPORT STATE OF THE EQUIPMENT FINANCE INDUSTRY 2008

ccording to U.S. government statistics, total invest- • Seismic change in the competitive environment. In past ment in equipment and software in 2008 will exceed economic downturns, smaller Independents suffered as A$1.1 trillion, a two percent increase over 2007. bank credit became more expensive and terms and End-users are estimated to finance approximately 57% covenants more onerous. In this cycle, the largest financial of this amount of equipment investment, or $650 billion. institutions have experienced major funding challenges Results from the Equipment Leasing and Finance themselves. Large Independents, once with access to the Association’s 2008 Survey of Equipment Finance Activity commercial paper and debt markets for relatively inexpen- (SEFA) report showed slight volume growth of two percent sive capital are now experiencing a significant increase in in 2007 while providing mixed indications for future indus- their cost of funds linked to a lack of market liquidity. try performance. For example, the SEFA found that in 2007 As a result, the overall competitive picture has changed Return on Equity (ROE) and portfolio quality declined significantly: previously aggressive players have become while Return on Assets (ROA) and operational efficiency more selective, some large players have exited the industry, increased. new types of competitors—particularly those backed by However, in 2008, the market disruptions that began private equity—are beginning to enter and are at the early in 2007 became more pointed and suggest a difficult stage of becoming a force within the market. and highly unpredictable operating environment for this year and beyond. According to the Equipment Leasing & Finance Foundation’s 2008

State of the Equipment Finance 0% 2% 4% 6% 8% 10% 12% Industry Report (SEFI), industry AGRICULTURAL analysts and market participants COMPUTERS-MAINFRAMES AND SERVERS reported that a confluence of COMPUTERS-PCs AND WORKSTATIONS macroeconomic issues likely will COMPUTERS-OTHER HARDWARE impact the sector. The sub-prime COMPUTERS-SOFTWARE mortgage meltdown, the col- COMPUTER-RELATED SERVICES lapse of the credit and default CONSTRUCTION swap markets, the continuing ENERGY ENVIRONMENTAL CONTROLS & ELECT decline in real estate values, and DEV the volatility of energy and com- ENERGY-OTHER modity prices, among other con- FF&E-OFFICE FURNITURE & EQUIPMENT FF&E-RESTAURANT EQUIPMENT cerns, have significantly changed 2007 NEW BUSINESS VOLUME (IN $000s) = $126,395,447 the dynamic for the equipment FF&E-RETAIL EQUIPMENT finance industry. FF&E-OTHER 2008 NEW BUSINESS VOLUME (IN $000s) = $123,601,975 INDUSTRIAL/MANUFACTURING- MACHINE TOOLS The SEFI report found: INDUSTRIAL/MANUFACTURING- PLASTIC EXTRUSIONS INDUSTRIAL/MANUFACTURING- • Continued market disruption PROD. &PROC. CONTROL EQUIP. Most INDUSTRIAL/MANUFACTURING- and declining confidence. SEMI-CONDUCTORS executives and analysts expect INDUSTRIAL/MANUFACTURING-OTHER current market instability to con- MATERIALS HANDLING tinue for a significant period of MEDICAL time, up to another four to six MINING, OIL & GAS EXTRACTION quarters, as customer perform- OFFICE MACHINES ance slides and lenders and PRINTING TELECOMMUNICATIONS- the markets are forced to work CENTRALIZED SWITCHING STATIONS TELECOMMUNICATIONS- through mounting losses in OFFICE PHONE SYSTEMS various areas. TRANSPORTATION-AIRCRAFT, COMMERCIAL TRANSPORTATION-AIRCRAFT, CORPORATE

• Funding as the critical area of TRANSPORTATION-AUTOS (Commercial/Fleet) focus. As a result of losses in TRANSPORTATION-BUSES/MOTOR COACHES mortgage-related investments TRANSPORTATION-CONTAINERS/INTERMODAL and the failure of key areas of the TRANSPORTATION-FRESH AND SALTWATER credit markets, liquidity for TRANSPORTATION-RAILROAD providers of equipment finance, TRANSPORTATION-TRUCKS & TRAILERS including some units owned by OTHER* banks, has significantly declined. (Source: 2008 Survey of Equipment Finance Activity—based on reponses from 146 ELFA member companies.)

2008 ANNUAL REPORT 11 • Increased regulation will likely have a significant impact. In terms of equipment being financed, energy and corpo- Most market participants believe that as a result of the cur- rate aircraft enjoyed strong growth, while office machinery rent financial crisis, increased regulatory oversight is in- and trucks/trailers decreased significantly, the latter feeling evitable. While few expressed significant concerns related the pinch of higher energy prices. to the implementation of BASEL II, most did say they be- In 2007, the top five end-user industries comprised lieve regulators will seek to expand their authority to include 49.2% of total new business volume versus 52.2% in all types of lenders, including those currently subject to 2006. Of the top five end-user industries, only the whole- little if any federal oversight. sale/retail sector experienced YOY new business volume growth, a modest 0.8% increase. The services sector • 2008 will show strong performance…for some. Based on (services not related to healthcare, arts and entertainment, both anecdotal evidence and statistics compiled by ELFA accommodation and food services, education and trans- and PayNet, new business volume has increased over portation) experienced the sharpest YOY decline in new 2007, spreads have improved, and losses, while increasing, business volume. are well below 2003 levels, the last significant problem year. Industry analysts attribute the apparent increase in volume to two factors: first, an increased demand for Monthly Leasing and Finance Index equipment financing as companies work to preserve cash The Association’s Monthly Leasing and Finance Index and second, fewer players in the market. (MLFI-25), which provides a reliable snapshot of current industry conditions, reported some volatility in the amount of 2008 Survey of Equipment Finance Activity new business financed by a consistent sample of 25 ELFA member companies. After showing contraction in 4Q 2007 Statistics reported in the 2008 SEFA showed a two and 1Q 2008, the MLFI reported strong new business percent growth rate in new business volume for 2007 as growth in 2Q 2008 (9.7% YOY growth). Through the 3Q compared to 2006. This compares to a 12% growth in 2008, originations were flat (.01% YOY growth). With a 2006 as compared to 2005. difficult economic environment currently, this uncertainty is Profitability was somewhat constrained, with average expected to continue into the fourth quarter of the year. ROA remaining strong at 1.9%, while average ROE However, when comparing MLFI cumulative year-to-date dropped to 12%. Pre-tax spreads also continued their (YTD) in September 2007 and 2008, the MLFI-25 com- five-year trend of year-over-year (YOY) compression. Key panies generated a 1.9% increase of new business operating performance metrics, such as full-year loss and volume. current receivables remained in line with prior levels, indi- cating stable portfolio health in 2007.

MLFI-25 New Business Volume (Year Over Year Comparison)

MLFI Cumulative YTD Companison 100.0% (2007/2008): $14.00 5 2007 $55.88 (SB) 55 2008 $56.96 (SB) 80.0% 5 5 $12.00 5 5 5 % chg: 1.9% 5 5 5 5 5 60.0% $10.1 5 $10.15 $10.00 5 5 5 5 5 5 $8.2 40.0% $8.00 $8.0 $7.4 $6.9 5 $6.7 $6.7 $6.6 $6.8 $6.6 $6.5 5 $6.5 $6.0 55 $6.0 $6.2 20.0% $6.00 5 $5.8 $6.0 5 $5.5 $5.5 $5.4 $5.4 5 $5.3 5 5 $5.0 $4.7 5 5 Percentage (Lines) 5 5 5 0.0% $4.00 5 5 5 5 5

New Business Volume ($B) (Bars) 5 5 $2.00 -20.0%

$0.00 -40.0% Jul 07 Jul 08 Jan 07 Jan 08 Jun 07 Jun 08 Oct 06 Oct 07 Apr 07 Apr 08 Feb 07 Feb 08 Sep 06 Sep 07 Sep 08 Mar 07 Mar 08 Dec 06 Dec 07 Nov 06 Nov 07 Aug 07 Aug 08 May 07 May 08

New Business Volume5 % of Companies That Showed Growth YOY For That Month5 % Change (YOY)

12 2008 ANNUAL REPORT MEMBERSHIP

he Equipment Leasing and Finance Association Members by Business Council (ELFA) has represented financial services compa- Tnies and manufacturers engaged in financing investment in capital goods since 1961. ELFA members are the Financial driving force behind the growth in the commercial equip- Institutions Service 14% ment finance market and contribute to capital formation in Provider the U.S. and abroad. Our members include independent 24% and captive leasing and finance companies, banks, finan- Middle cial services companies, broker/packagers, investment Market 29% banks and investors, as well as service providers. Captive & Vendor ELFA provides multiple services to our members in the Programs form of advocacy, business development, media relations, 15% professional development and industry and market re- Small Ticket 18% search. With a staff of 25 professionals located in Wash- ington, D.C., ELFA is the only organization providing the full range of association services to the commercial equipment finance sector. Additionally, ELFA serves as 158 the convening body for the industry, which includes vari- Members by Company Type ous governing, policy and business sector committees comprised of industry volunteers. 107 95 A Strong and Diverse Membership 109 Today, ELFA has over 700 member companies, including 92 of the top 100 equipment finance companies in the U.S. This includes some of the largest financial services companies in the world combined with the hundreds of 58 50 33 smaller independent firms and banks, and the captive 38 finance subsidiaries of major manufacturing companies. 3 8 8 ELFA members also include companies, consultants and 19 9 professional firms that provide a wide range of services 5 to the industry. Through the Membership Marketing Com- 6

mittee, ELFA is continually recruiting equipment finance Publisher Law Firm

companies and market players for membership. tant Bank

Captive

qi.Mgt. Equip. Independent

liLn Fin. Co. ulti-Line nuac Co. Insurance otaeProvider Software

ELFA offers several membership categories and Consultant

M Brkr/Pkgr netetBank Investment

accommodates entities involved in virtually any aspect Accoun xc Recruitment Exec.

of the equipment finance sector in the U.S. and interna- Agency Collection tionally. Historically, 86% of member companies renew and an average of 60 companies join annually. In 2008, 87% of member companies renewed and 55 joined Regular Member Company Size as new members. $500-$1.0 Over $1.0 billion billion $250-$500 6% 11.7% million 9.2%

$100-$250 $0-$20 million million 14.9% 33.5%

$50-$100 million $20-$50 10% million 12.7%

2008 ANNUAL REPORT 13 ADVOCACY

ADVOCACY ELFA maintains Federal and State Government Affairs operations to represent the industry before the U.S. Congress, federal agencies and departments, state legislatures and agencies. Additionally, ELFA represents the industry before national and U.S. Representative John M. international standard-setting bodies. Spratt (D-SC), Chairman of the The professional staff routinely en- House Budget Committee addresses ELFA members at the gage legislators and policymakers on annual Capitol Connections issues of importance to the industry, meeting in Washington. including providing testimony before Congressional and state legislative committees and formal comments educate policymakers at the federal committees in the House and the to federal and state rule making and state levels about the impact the Senate, which directly impact the abil- agencies. equipment leasing and finance indus- ity of the industry to compete. In the ELFA also operates a grassroots try has on today’s economy. Executive Branch, the focal points are political action program with its mem- Since 2007, ELFA has maintain- the Department of Treasury and other ber company employees to engage ed an interactive website, financial services regulators, as well elected officials on the federal and advocacy.elfaonline.org to promote as agencies that regulate various state level. And, ELFA operates a advocacy efforts and encourage stakeholders in the transportation federal political action committee, members’ political involvement at both fields of aircraft, rail and maritime. LeasePac, for the purpose of the federal and state levels. During supporting federal candidates. the annual Capitol Connections meet- Legislative Advocacy—In the tax Through targeted grassroots con- ing in May, ELFA members converged policy arena, ELFA advocates for tax tacts, members and staff of ELFA are on Capitol Hill for legislative meetings policies that encourage investment building on the existing framework to and meetings with numerous federal and capital formation by maintaining bring a heightened awareness and agencies around Washington. Partici- tax neutrality between the buy or pants in the grassroots program are lease/finance decision and supporting committed to developing and main- incentive based depreciation rules. taining relationships with legislators The Association’s Federal Tax Com- and their staff to promote an ongoing mittee helps identify issues and de- dialogue on the key policy issues that vise strategies to guide ELFA staff impact the industry. advocacy. Current ELFA federal tax initiatives include efforts to allow tax- FEDERAL GOVERNMENT exempt medical institutions access to ELFA’s federal advocacy efforts are cost effective lease financing sources intended to achieve and maintain a through a change in the tax treatment legislative and regulatory regime that of high technology medical equip- provides certainty and transparency ment, repeal of the mid-quarter depre- for equipment financing transactions ciation convention as well as the by preserving the tax, financial and extension of renewable energy invest- business principles that underlie the ment tax credits and production tax equipment finance industry. credits for financing parties. In 2008, The focal points for ELFA’s federal the ELFA was able to obtain favorable advocacy efforts are the Congress, equipment finance language for sale executive branch, independent regula- leasebacks, syndications and like-kind tory and standard-setting bodies, and exchanges in the bonus depreciation industry stakeholders. With the Con- component of the Economic Stimulus gress, the advocacy programs are ori- Act of 2008 (P.L. 110-185). The Federal Reserve Board Governor Kevin M. Warsh ented primarily toward the tax writing ELFA is also advocating initiatives in addresses ELFA Members in Washington. committees and the financial services the health care, energy and transportation arenas.

14 2008 ANNUAL REPORT ADVOCACY

Regulatory Advocacy—In the regula- STATE GOVERNMENT RELATIONS Public sector financing issues were tory arena, the ELFA works with the ELFA's State Government Relations also active in 2008. In Alaska, ELFA Department of Treasury and its Office advocates for the industry at the state participated in an industry-wide effort of Tax Policy and the Internal Revenue legislative and executive level. With to prevent a legislative ban on lease Service on federal taxation guidance the increasing importance of state financing by state and local entities. projects, including the July 2008 is- legislative and regulatory authority, ELFA coordinated with allied associa- suance of favorable guidance for the ELFA added resources to its State tions in proposing a New Mexico con- leasing of aircraft and vessels in for- Government Relations activities in stitutional amendment allowing state eign commerce. On financial regula- 2008, including the development of a and local government access to stan- tory matters affecting lease and new website. Set for launch in 2009, dard municipal lease financing en- finance transactions, the Association ELFA StateWatch (which can be ac- joyed by most other states. engages the Federal Deposit Insur- cessed through ELFA’s State advo- Eight states and the City of New ance Corporation, the Federal cacy website at www.elfaonline.org/ York passed electronic recycling leg- Reserve System, the Office of Comp- pub/advocacy/state/) will provide islation during 2008; all provided for troller of the Currency, the Securities a summary of all state legislature a form of producer responsibility that and Exchange Commission and other measures that could affect our sector. does not require equipment finance financial regulators. In addition, the ELFA StateWatch will allow staff and companies to collect advanced fees. ELFA works with the Department of members to monitor and comment on ELFA also addressed legislation in Commerce on its international pro- measures in a timely manner. several states that inadvertently in- grams and the Department of Trans- Equipment finance companies cluded our sector in product recall portation, which regulates the key faced a wide range of legislative and and liability issues principally related aircraft, rail and maritime sectors regulatory challenges in state capitals to consumer transactions. ELFA of the industry. In May of 2008, for in 2008. Efforts included amending worked with legislative sponsors to example, the ELFA submitted public the Michigan Business Tax Code to outline the unintended consequences, comments to the Federal Aviation provide the Investment Tax Credit and and gained amendments exempting Administration of the Department of Industrial Personal Property Tax Credit commercial transactions from the Transportation on its proposed rule- to all industry segments. In Wisconsin bills. making on aircraft registration and and Missouri, ELFA commented on In 2009 ELFA will expand coordina- re-registration due to its impact on bills that would impose new rules tion with allied associations to con- lenders and lessors which provide and restrictions on automatic renewal tinue to present a unified and effective aircraft financing. provisions. advocacy effort in the states. LEGAL ELFA’s General Counsel, Legal Committee and Legal Subcommittees engage in a broad range of substantive activities to support and promote the industry’s legal, legislative and regulatory activities, including advocacy, research and other core value areas. Legal, legislative and regulatory matters include providing analyses of federal and state judicial rulings, proposed legislative language and state and federal regulatory actions. Addi- tionally, the association’s General Counsel prepares and submits briefs and comment letters in support of industry positions. Since equipment financing in for- eign nations is an important growth U.S. Representative Richard E. Neal (D-MA), Chairman of the House Ways & Means Subcommittee on Select Revenue Measures describes tax provisions and their impact on equipment finance (also shown are Valerie Jester, area for many ELFA members, the Rick Remiker and Bob Rinaldi). Association and a Legal subcommittee continue the efforts begun some

2008 ANNUAL REPORT 15 ADVOCACY

years ago to work with UNIDROIT to FINANCIAL ACCOUNTING The project is expected to be a multi- develop a model leasing law for en- Through its Financial Accounting year undertaking, with a great many actment by other nations, particularly Committee and a working group sub- of the issues finalized in 2009. those with developing economies that set, ELFA aggressively and proac- In addition to its reliance on volun- would benefit from the capital forma- tively monitors financial accounting teer members of the Financial Ac- tion provided by lease financing. Their and reporting issues developed by counting Committee, the industry activities concerning the model leas- regulatory bodies and standard- was fortunate to have three members ing law have included numerous setters including the Financial Ac- of the Committee represented on a consultations with the U.S. State counting Standards Board (FASB), special Working Group appointed by Department, the International Finance International Accounting Standards FASB and IASB to provide advice Corporation of the World Bank, and Board (IASB) and the SEC. In 2008, on specific matters in connection other interested parties. the Association stepped up its activi- with the lease accounting project. A key element of ELFA’s legal pro- ties by increasing the level of techni- With increasing emphasis on en- gram is advocating for the preserva- cal expertise necessary to monitor, hanced reporting and accounting tion of the legal principles on which comment and, ultimately, influence standards, heightened disclosure re- the industry thrives. ELFA has an es- financial accounting and reporting quirements, and worldwide regulatory tablished program to consider mem- matters. ELFA met regularly with convergence efforts, the Association ber requests to file ELFA amicus standard-setting bodies, obtaining will continue its activities to collabo- briefs in other cases, and the Associa- frequent and timely updates on devel- rate with its established network of tion has filed such briefs when the opments relating to accounting and leasing and finance organizations cases have involved issues of national reporting matters—from fair value throughout the world, including the significance that are directly important accounting to FAS 13—which are U.K. Finance and Leasing Associa- to the industry. critical to the membership and overall tion, Leaseurope, the Canadian Working with the Legal Committee, industry. During these meetings and Finance and Leasing Association, the ELFA provides legal information and through comment letters and other Australian Equipment Leasing Associ- professional development that help formal and informal channels, the ation and others. sustain the functioning and growth of Association represents the views of While the lease accounting project the industry. The annual ELFA Legal its members to these regulatory and promises to be the primary focus of Forum is widely regarded as the pre- standard-setting bodies and their the Association’s accounting and fi- miere legal educational program on staffs. The goal is to ensure that the nancial reporting efforts, the ELFA equipment finance, and current and industry’s voice is heard on critical and its Financial Accounting Commit- former Legal Committee members accounting and reporting matters. tee continue to monitor and communi- participate in other ELFA educational The past year was extremely event- cate other matters of importance to programs. To provide legal resources ful as FASB and IASB continued their the industry. Through the use of web for attorneys who advise members, deliberation on the lease accounting seminars, the ELFA website, the ELFA maintains a legal page on its project that commenced in 2006 to E-news Daily e-newsletter and ELT website that contains an update of re- replace FAS 13. These bodies, acting Magazine, the association dissemi- cent court decisions affecting the in- jointly, have made preliminary deci- nates timely information on account- dustry, a compendium of relevant sions about fundamental matters ing issues to the membership. state laws, a legal listserv, and other affecting how leases are accounted. legal information. In addition, members of the Legal Committee prepare the Leasing Law articles on recent developments that are published in each edition of ELT Magazine, and they have also participated in the development and preparation of webinars for members. Legal Committee subcommittees focus on a range of topics including international, insurance, motor vehicle, the Capetown Agreement, legislative and regulatory issues, banks, air, rail and marine, accounting and a UCC working group.

16 2008 ANNUAL REPORT COMMUNICATIONS

COMMUNICATIONS Communications is a stand-alone division responsible for coordinating ELFA’s media outreach, brand development and industry corporate relations. Communications works with every component of the Association to enhance our industry’s visibility and our ability to advocate to all of the external audiences that could impact our markets. We link the industry’s brand to the ELFA website and communication vehicles including ELT Magazine, policy updates such as ELFA Washington Report and ELFA State Government Report and our new membership-wide newsletter, ELFA Quarterly Report, found as a PDF on ELFA Chairman-elect Jim Ambrose and ELFA president Ken Bentsen partnered with the National Association of our site at www.elfaonline.org/pub/about Manufacturers and The Manufacturing Institute to co-host a press roundtable to discuss the impact of the export In 2008, Communications worked and export financing of U.S. manufactured goods on the U.S. economy. aggressively to continue to channel our messages to help increase the depth and breadth of the equipment annual Investors Conference in ELFA Brand Advances finance sector brand. Key audiences March. In October we organized a ELFA actively promotes the Associ- included financial, end user (verticals) successful Media/Analyst briefing on ation, our federal and state govern- and policy media, financial analysts the Equipment Leasing & Finance ment relations initiatives and research and market opinion leaders, trade Foundation’s 2008 State of the to the financial, leasing and vertical associations, economists at selected Equipment Finance Industry. trade media and our brand increas- government agencies, and internal To expand business opportunities ingly advances in recognition. In audiences including public relations for our members, we are working to 2008, ELFA has been quoted or professionals at ELFA member com- enhance the Association’s relation- featured in TV/broadcast media and panies and, importantly, ELFA mem- ship with the U.S. Small Business bership and potential members. Administration’s SCORE program. Several initiatives are underway and We also launched a new web portal, have been yielding positive results. www.EquipmentFinance101.org as an To expand media opportunities with informational resource for equipment member companies Communications finance end-users. Included are mate- remains in regular contact with our rials for industry verticals such as PR Roundtable (for member company medical equipment, transportation, PR professionals) by providing data, computers/IT, telecom, oil/gas/energy information and media interview op- and construction industries. portunities to this group. In June, ELFA partnered with the To impact capital market partici- National Association of Manufacturers pants, ELFA has developed an on- and its research, education and work- going relationship with numerous force affiliate, The Manufacturing Insti- financial market publications to en- tute, to co-host a media roundtable. courage the use of the MLFI-25 in ELFA Chairman-elect Jim Ambrose client briefings and in subscription- and ELFA president Ken Bentsen only areas of their website. We have discussed the impact of exports and also significantly increased our out- export financing of U.S. manufactured goods on the economy. Fifteen finan- reach to industry analysts and staged Federal Deposit Insurance Corporation Chair Sheila C. our first analyst briefing in New York cial and trade reporters covered the Bair addresses Executives at ELFA's Industry Leader- in conjunction with the Association’s event and filed stories. ship Forum in Washington.

2008 ANNUAL REPORT 17 COMMUNICATIONS

ELFA’s Industry Leadership Forum in April. Media coverage included the Wall Street Journal (“Bush Seeks Time For Stimulus”), Ameri- can Banker (“Bair Endorses Some Ideas in Treasury’s Proposal”) and Dow Jones (“US FDIC’s Bair: More Activist Government; Housing Aid Needed”).

ELFA works to generate media of the industry utilizing member company executives and experts as spokespersons:

• In April, ELFA arranged for the Wall Street Journal to interview several ELFA member company executives among other business leaders com- menting on the President’s economic stimulus package for an above-the-fold front-page article quoting ELFA and a member (“U.S. Suffers Biggest Jobs Drop in 5 Years as Downturn Spreads”) Bloomberg TV interviews ELFA President Ken Bentsen at the White House after President Bush signs Economic Stimulus Act of 2008. • In October, ELFA organized interviews with Wall Street Journal re- publications including The Hill, Dow release and important industry porters with several ELFA member Jones, American Banker, Wall Street trades ran stories, including Materi- company executives regarding tech- Journal, Financial Times, Barron’s, als Handling Wholesaler, Progres- nology financing and its availability Thomson Financial, BusinessWeek, sive Railroad, Trailer Body Builders, for businesses seeking to acquire WSJ- MarketWatch, Financial and others including The Monitor, equipment. The story was carried Week, CFO.com, Bloomberg News, Lessors Network and World Leas- above the fold: “Tech Finance Bloomberg TV, FOX Business TV, ing News Defaults Rise; More Makers Offer Los Angeles Times, Nation’s Restau- Loans” rant News, Transport Topics, Progres- • To ensure Tier One media outlets sive Railroading, Materials Handling continue to show interest in ELFA Since 2008, ELFA instituted an Wholesaler, American City & County research, including Reuters, Wash- emphasis on national TV/broadcast and others. The full list is always ington Post, Dow Jones, Barron’s, media to position the Association as available on our website at American Banker and Financial thought-leader and industry expert www.elfaonline.org/pub/news/press Times regarding the economy, equipment fi- /MediaCoverage.cfm nance and the role of export financing ELFA works to ensure all media • To publicize conferences and meet- of U.S. manufactured goods on the relations programs, whether trade or ings with Tier One publications. economy. During the year, ELFA was financial, remain robust so that our Journalists from the Wall Street featured in six TV/broadcast inter- industry is known and understood Journal, Financial Times, American views with major national networks. broadly. In addition, we have worked Banker, Barrons, Newsweek, • To ensure our MLFI-25 data has Dow Jones, Bloomberg and been reported in Tier One media, Reuters covered speeches by including Dow Jones, Bloomberg, Federal Reserve Board Governor ThomsonFinancial and Fox Busi- Kevin M. Warsh and FDIC Chair ness News. Web portals continued Sheila C. Bair in Washington as to run the MLFI-25 press they addressed executives at

18 2008 ANNUAL REPORT BUSINESSDEVELOPMENT

BUSINESS DEVELOPMENT 2008 Business Development Conferences ELFA’s business development meetings and conferences provide • Equipment Management Conference & Exhibition up-to-the-minute information on spe- • Industry Leadership Forum cific market segments, pending legal, • Annual ELFA/IMN Investors Conference regulatory or accounting changes, • Financial Institutions Conference capital markets and funding and operational efficiencies. Participants are • National Funding Exhibition exposed to the most innovative • Legal Forum thinkers within industry, government • Operations and Technology Conference & Exhibition and academia. These business devel- Tax Professional Roundtable opment meetings enable senior exec- • utives, attorneys, accountants, • Credit & Collections Management Conference & Exhibition equipment managers, credit analysts • ELFA/AGL&F Public Sector Finance Forum and operations specialists to gain • Lease Accountants Conference valuable intelligence during ample opportunities to network and build • 47th Annual Convention relationships. In 2008, several thou- sand professionals from ELFA member companies attended at least one of 12 ELFA business development ELFA Members Volunteer Time and Provide conferences. 2008 has been a mixed year for Resources to Help Hurricane Recovery Efforts business development activities. While some conferences experienced moderate growth, others remained flat or declined in attendance. This trend reflects a greater tightening of discretionary spending on the part of member companies as they face their own internal challenges. Careful management of expenditures by ELFA staff has helped ease the budgetary impact. In terms of quality, ELFA presented superior programming in 2008. For example, ELFA’s National Funding Ex- hibition brought together more than 500 industry professionals linking funding sources for equipment fi- As part of the 47th Annual Convention, ELFA organized a project to sup- nance companies and assets. In its port the ongoing relief efforts related to Hurricane Katrina in New Orleans. 20th year and held this past April in Sixty-seven ELFA volunteer members and staff assisted the St. Bernard Chicago, this event remains an effi- Parish Department of Recreation with their efforts to rebuild the old Hannan cient, cost-effective way for firms to High School. Located just below New Orleans' lower 9th Ward, St. Bernard access investors for the funding that Parish was severely hit by Katrina. This project helped restore needed park is the lifeblood of equipment finance. and performing arts facilities devastated by the hurricane. ELFA’s Equipment Management The project was sponsored by Key Equipment Finance, First American Conference & Exhibition brought Equipment Finance, Susquehanna Commercial Finance, Nutter McClennen together 350 asset managers, remar- & Fish, and CHP ALFA. Also, on behalf of those companies, ELFA Chairman keters and providers of asset man- Bill Verhelle presented a check for $7,500 to Rep. Charlie Melancon of agement services and focused on Louisiana's 3rd Congressional District, which encompasses St. Bernard evaluating the current market condi- Parish. The money will be used by the St. Bernard Project, which was tions, portfolio quality and residual established to speed the recovery of that hard-hit area. values for a variety of equipment seg-

2008 ANNUAL REPORT 19 BUSINESSDEVELOPMENT

ments. Conference highlights included topical breakout sessions, off-site equipment tours and an on-site inspection session. ELFA’s 47th Annual Convention, the industry’s largest meeting, at- tracted 800 equipment finance professionals and offered three full days of educational sessions and networking opportunities. Themed “Financing New Frontiers,” the Convention program emphasized winning strategies for future success—targeting emerg- ing opportunities, optimizing the capital markets and raising capital and finding liquidity in turbulent markets. Sessions such as “Raising Capital and Finding Liquidity in Today’s Tur- bulent Markets” provided perspective In 2008, ELFA held its 20th Annual National Funding Exhibition, which included 40 Funding Sources and more than on current market conditions facing 500 member participants. the equipment finance sector and ex- amined keys to success in raising finance markets, transportation, alter- independent and objective “Cook debt, mezzanine capital and equity, native and renewable energy and Political Report,” who offered keen and seeking liquidity. The session, international markets. political insight and analyses on the “Capital Markets Update—How You General sessions featured speak- 2008 elections and political trends. Can Optimize Your Reliance on the ers including the Hon. Charles Capital Markets,” discussed how to Wilson, the inspiration for the highly Industry News and Analysis use debt and equity capital markets to acclaimed book and movie “Charlie ELFA also offers members equip- position a company during times of Wilson’s War;” Gordon Bethune, ment finance-focused news and constrained liquidity. the former CEO and Chairman of analysis. Each day some 9,000 mem- Other sessions included discus- Continental Airlines; noted business bers and their employees receive sions on sectors such as the emerg- economist Lawrence Chrimerine; E-News Daily, which contains a ing aircraft and healthcare equipment and Charlie Cook, publisher of the roundup of economic and financial news from the equipment finance industry. ELT Magazine is the Associa- tion’s monthly magazine and a leading magazine in the market. Along with regular columns and departments on financial accounting, legal and government affairs issues, ELT offers in- depth feature articles on trends and issues that impact lessors as well as options for member companies to address them. ELFA’s website, www.elfaonline.org provides members and external audiences a full range of regularly updated information and data regarding the equipment finance sector and the Association, including Association statements, regulatory filings, press releases and member company ELFA members may participate in any of 12 business development conferences each year on market segments, news releases. legal/regulatory or capital market matters and operations.

20 2008 ANNUAL REPORT PROFESSIONALDEVELOPMENT

In 2009 members will continue to related online career centers and job see more substantive programming as “aggregators,” as one of the major ob- well as greater use of web-based jectives of this project is to widen the seminars. net of potential job seekers looking for The ELFA Academy continues to work beyond those already employed PROFESSIONALDEVELOPMENT expand its roster of web seminars. by equipment leasing and finance The ELFA Professional Develop- These 90-minute, content rich ses- companies. ment programs are designed to sions are delivered simultaneously The ELFA Career Center is linked to address the growing human capital via the web to hundreds of people statistics and information about the in- issues facing member companies. across the country. Among the web dustry and to ELFA training opportuni- ELFA provides the industry with seminars delivered in 2008 were: ties and will provide advertising unique professional training courses, • Renewable Energy opportunities for both leasing and finance companies and executive topical and professional web semi- • Building Lines of Credit in the search firms. As the Career Center nars and best practices roundtable Middle Market forums. becomes established, ELFA staff will • The BRIC Promise Professional Development activities investigate conducting regional job provide the greatest opportunity for • Credit Scoring in a Changing fairs in conjunction with local universi- growth among the Association’s of- Economy ties and colleges as a way to promote ferings, as these programs incorpo- • Refurbishing Medical Imaging the industry to qualified graduates. rate web-based learning as a strategy Equipment for reaching target audiences. The • Helping the Equipment Finance ELFA Academy’s web seminar series Industry Invest Internationally is becoming a popular alternative to • Avoiding Leasing and Finance Fraud face-to-face events for gathering • Changes in Lease Accounting needed information. For the first time • Basic Principles of Lease and since its inception, attendance at the regional ELFA Principles of Leasing Finance Negotiations and Finance workshop, for years the • Effectively Risk Rating a Portfolio most popular method of introducing • State of the Equipment Finance ELFA’s Human Capital Roundtable addresses connections new hires to our industry, fell below Industry between human capital initiatives and profitability. budgeted levels. However, early indi- • Principles of Sales and Use Tax cations from the initial roll out of the • Aircraft Market ELFA convened its Human Capital industry’s first online course, The • Truck and Trailer Financing Trends Roundtable, which gathered human Fundamentals of Equipment Leasing resources professionals from around • Rail and Locomotive Financing and Finance, suggest that members the industry to discuss the challenges Trends will support education and training member companies face and to focus provided it is affordable and easily • Workouts on four key issues: developing the skills accessible. We see this trend contin- • Collection Tools Available to motivate teams during tough times, maximizing compensation plans to uing and are offering fewer in-person a Ch rt You r C workshops going forward, and the o manage the business, developing the u r s Association is positioned to continue e next generation of leadership and en- providing industry unique training hancing the productivity of new hires. through its new online courses. www.elfaonline.org/careers/ The Human Capital Committee Traditional face-to-face learning is To assist members with their grow- oversees the Roundtable’s agenda. not always an option in today’s work ing human capital needs, the Associa- This committee was created for the environment. ELFA Academy provides tion launched the ELFA Career purpose of better understanding the high-quality interactive training and Center in the third quarter of 2008. human capital needs of ELFA mem- resources using the latest distance The ELFA Career Center is a fully au- bers and the role that ELFA can play learning techniques. ELFA Academy tomated online job board designed to in addressing these needs. This group offers affordable, convenient training help member companies fill job open- is the driving force behind developing in the essentials of the leasing and ings and potential employees find a human capital agenda for the fi- finance business. One new course placement in an ELFA member com- nance industry, making the connec- was launched in 2008: Fundamentals pany. The ELFA Career Center will tion between human capital initiatives of Equipment Leasing and Finance. be linked to other financial services- and company growth and profitability.

2008 ANNUAL REPORT 21 INDUSTRYRESEARCHANDINFORMATION

INDUSTRY RESEARCH AND INFORMATION

Through ELFA’s Industry Services and Research division, the Research Committee and the affiliated Equip- ment Leasing & Finance Foundation, ELFA is the principal authoritative source for research, statistics and market data on the equipment finance industry, its member companies and the markets they serve. ELFA publishes the annual Survey of Equipment Finance Activity compiling and analyzing industry product and sector data. In addition, the Association publishes the Monthly Leasing and Finance Index (MLFI-25). The MLFI-25 is a monthly index of key business metrics of 25 member companies that represents a cross- section of industry participants. The MLFI-25 provides a consistent snapshot of industry and economic performance. The Association also Captive finance company executives gathered for ELFA’s first Best Practices Roundtable in June 2008. publishes various compensation and other industry and sector-related portant captive finance companies for benchmarking reports. an unfettered discussion of their oper- ELFA continues to enhance and ations and shared issues. Participants improve its online legal and asset received a report summarizing the management resources, including a valuable discussions. This is a format searchable database of case law, in- ELFA has been successfully using surance and vicarious liability surveys with its annual CFO Roundtable. and other related reference material. Also, ELFA research staff serve as In June of 2008, ELFA convened its a virtual “help desk” in responding to first Captive Finance Best Practices members’ queries regarding various Roundtable, which gathered execu- industry issues and other technical tives from a diverse selection of im- matters.

Research published in 2008 includes: • The Survey of Equipment Finance Activity • The Industry Compensation Survey Prepared by: Global Insight, October 2007 • The Industry Compensation Survey for SMEs • The Business Technology Performance Index • The Collections Effectiveness Benchmarking Report • What’s Hot/What’s Not Equipment Asset Market Outlook • Executive’s Guide to Remedies • Tax Management Benchmarking • Customer Service End User Benchmarking

22 2008 ANNUAL REPORT INDUSTRYRESEARCHANDINFORMATION

non-donors. The Foundation website is updated weekly. Published three times per year and Equipment Leasing & Finance distributed electronically, the Founda- Foundation tion’s Journal of Equipment Lease State of the Equipment Finance Industry The Equipment Leasing & Finance Financing (The Journal) is the only Foundation, established in 1989 by peer-reviewed publication in the ELFA, is dedicated to providing fu- equipment finance industry. Since its ture-oriented, in-depth, independent debut in 1980, the Journal has fea- research about and for the equipment tured detailed technical articles au- finance industry. The Foundation is thored by academics and industry the only non-profit organization dedi- experts and included Foundation- cated solely to providing future-ori- commissioned research and articles. ented research and studies about the Articles are available for download $650 billion equipment finance indus- through the Foundation website. try. Constituents of the Foundation include industry executives, funding Donor Support and Awards Program sources, rating agency and industry The Foundation is funded entirely analysts, researchers, academics and through corporate and individual do- the media. Research developed by nations. Corporate and individual do- EQUIPMENT LEASING & FINANCE OUNDATION the Foundation helps constituents un- nations provide the funds necessary Your Eye On The Future derstand current industry trends and to develop key resources and trend their implications for the future. analyses necessary to meet daily The Foundation partners with cor- business challenges. Corporate and 2009-2011 individual donors are acknowledged Transportation Outlook Series: porate and individual sponsors, aca- Marine Equipment Finance Market demic institutions and industry publicly and in print. Major giving lev- experts to develop comprehensive els participate in a distinguished empirical research, case studies and awards presentation. Giving levels analyses that bring the future into range from $100 to $50,000+ per focus. Foundation resources are avail- year. For information on subscriptions able electronically and without cost to and donor opportunities please visit Foundation donors and for a fee to www.leasefoundation.org

The most recent studies published by the Foundation include: • 2008 State of the Equipment Finance Industry • Propensity to Finance Equipment—Characteristics of the Finance Decision • Industry Future Council Report • US Equipment Finance Market Study

EQUIPMENT LEASING & FINANCE • Renewable Energy Trends and the Impact on the Equipment Finance Market OUNDATION • Transportation Series: Financing Trends Your Eye On The Future o Truck and Trailers o Rail Car and Locomotives o Corporate Aircraft o Marine Equipment o Intermodal Shipping • International Series: Identifying Factors For Success In o China o Brazil o Mexico o India MexicoMexico: FactorsThe For Carnival Success in the of Mexican Equipment Equipment Financing Finance Market o Latin America • Evolution of the Paperless Transaction and its Impact on the Equipment Lease Finance Industry • Long-Term Trends in Health Care and Implications for the Leasing Industry

2008 ANNUAL REPORT 23 24 2008 ANNUAL REPORT ELFA 2008 OFFICERS

CHAIR VICE CHAIRMAN William H. Verhelle John M. Butler Chief Executive Officer Chairman, President, CEO FIRST AMERICAN EQUIPMENT FINANCE JOHN HANCOCK LEASING CORPORATION,

CHAIR-ELECT PRESIDENT James J. Ambrose Kenneth E. Bentsen, Jr. President, Equipment Finance EQUIPMENT LEASING AND FINANCE ASSOCIATION GE HEALTHCARE FINANCIAL SERVICES

SECRETARY IMMEDIATE PAST CHAIR Edward A. Groobert Valerie H. Jester Partner President DYKEMA GOSSETT BRANDYWINE CAPITAL ASSOCIATES, INC.,

VICE CHAIRMAN TREASURER Kenneth R. Collins, Jr. David A. Merrill Chairman, President, CEO President SUSQUEHANNA COMMERCIAL FINANCE, INC. FIFTH THIRD LEASING COMPANY

VICE CHAIRMAN* John M. McQueen President, CEO WELLS FARGO EQUIPMENT FINANCE, INC.

*Resigned May, 2008

2008 ANNUAL REPORT 25 2008 BOARD OF DIRECTORS

Kent M. Adams Thomas M. Jaschik CATERPILLAR FINANCIAL SERVICES CORPORATION BB&T EQUIPMENT FINANCE

Laurie A. Bakke Cameron W. Krueger HUNTINGTON BANK EQUIPMENT FINANCE CAPGEMINI FINANCIAL SERVICES, LLC

George K. Booth James McGrane BLACK ROCK CAPITAL, LLC US EXPRESS LEASING, INC.

Aylin N. Cankardes Richard Remiker ROCKWELL FINANCIAL GROUP RBS ASSET FINANCE

Edward Castagna Robert J. Rinaldi NASSAU ASSET MANAGEMENT NATIONAL CITY COMMERCIAL CAPITAL COMPANY, LLC

Glenn P. Davis Philip R. Rosenblatt NORLEASE, INC NUTTER, MCCLELLEN & FISH, LLP

Crit DeMent Joel C. Rutledge* LEAF FINANCIAL CORPORATION BB&T EQUIPMENT FINANCE

Curt F. Glenn Frederick S. Summers GATX CORPORATION VISION FINANCIAL GROUP, INC.

Eric Hanson Adam D. Warner LAZARD KEY EQUIPMENT FINANCE Christa Hemans COURT SQUARE LEASING CORPORATION

*Resigned July, 2008

26 2008 ANNUAL REPORT COMMITTEESANDCOMMITTEECHAIRS

ELFA Committees and Chairs PAC COMMITTEE Robert J. Rinaldi National City Commercial Capital, LLC CREDIT AND COLLECTIONS PLANNING COMMITTEE Salvatore DiStefano PUBLIC SECTOR FINANCE COMMITTEE De Lage Landen Financial Services Denise K. Beauchamp Key Equipment Finance EQUIPMENT MANAGEMENT COMMITTEE Christopher J. Condon RESEARCH COMMITTEE Dover Management Group, Inc. Jerry L. Jordan US Bank Equipment Finance EXECUTIVE COMMITTEE William H. Verhelle STATE GOVERNMENT RELATIONS COMMITTEE First American Equipment Finance Valerie L. Pfeiffer

FAIR BUSINESS PRACTICE COMMITTEE TAX PROFESSIONAL PLANNING COMMITTEE Aylin N. Cankardes James M. Fergus Rockwell Financial Group Chase Equipment Leasing FEDERAL TAX COMMITTEE John Amato Ralph Rapetski GE Commercial Finance Key Equipment Finance

FINANCE AND AUDIT COMMITTEE David Merrill Business Council Steering Committees and Chairs Fifth Third Leasing Company CAPTIVE AND VENDOR FINANCE BUSINESS COUNCIL FINANCIAL ACCOUNTING COMMITTEE STEERING COMMITTEE Rodney W. Hurd Paul J. Frisch Bridgeway Capital Advisors US Bank Equipment Finance

FUNDING EXHIBITION PLANNING COMMITTEE FINANCIAL INSTITUTIONS BUSINESS COUNCIL Dennis T. Roesslein STEERING COMMITTEE MB Financial Bank Glenn P. Davis Norlease, Inc. GOVERNMENT AFFAIRS COUNCIL Harry J. Kaplun Glenn P. Davis Frost Leasing Norlease, Inc. MIDDLE MARKET INDEPENDENT BUSINESS COUNCIL HUMAN CAPITAL COMMITTEE STEERING COMMITTEE Lori Frasier John W. Heist, Jr. Key Equipment Finance CCA Financial, Inc.

INTERNATIONAL COMMITTEE SERVICE PROVIDER BUSINESS COUNCIL STEERING COMMITTEE James D. Sabroske Justin Cooper John Deere Credit CHP Consulting

LEGAL COMMITTEE SMALL TICKET BUSINESS COUNCIL STEERING COMMITTEE Stewart G. Abramson William J. Clark Wells Fargo Equipment Finance, Inc. Univest Capital, Inc.

MEMBERSHIP MARKETING COMMITTEE Douglas Shavel CJR Management LLC

NOMINATING COMMITTEE Valerie Hayes Jester Brandywine Capital Associates, Inc.

OPERATIONS AND TECHNOLOGY COMMITTEE William A. Weeks Key Equipment Finance

2008 ANNUAL REPORT 27 28 2008 ANNUAL REPORT CONSOLIDATEDSTATEMENTS

As a not-for-profit corporation, ELFA’s goal each year is to show a minimal profit while continuing to grow its reserves. The American Society of Association Executives recommends that trade associations maintain reserves equal to one year of operating expenses. Reserves generate interest income and insulate the Association from unanticipated and cata- strophic expenses. In order to comply with the Financial Accounting Standards Board (FASB) Statements of Financial Accounting Stan- dards (SFAS) No. 94, ELFA now reports their finances in a Consolidated Statement of Financial Position. The consolidated statement includes ELFA’s sister organizations, The Equipment Leasing and Finance Foundation (ELFF) and LeasePAC. Both ELFF and the PAC are separate and distinct organizations. There is no co-mingling of assets or liabilities between ELFA, ELFF and the PAC.

December 31, 2007 2007 2007 2007 2007 2007 2006 ELFA PAC ELFF Eliminations Total Assets Cash and cash equivalents $ 1,337,545$ 1,337,545 $ 162,870 $ 162,870 $ 200,895 $ 200,895 $ $ - $- 1,701,310 $ 1,701,310 $ 1,953,365 $ 1,953,365 I Investments 7,961,4807,961,480 -- 1,733,139 1,733,139 -- 9,694,619 9,694,619 10,092,959 10,092,959 A Accounts receivables233,099 233,099------233,099 233,099 159,827 159,827 D Due from Equipment Leasing and Finance Foundation, Inc.73,630 73,630 - - - - (73,630) (73,630) - - - - P Prepaid expenses158,111 158,111------158,111 158,111 151,662 151,662 F Fixed assets, net607,176 607,176 - - - 607,176 7,048

Total assets $ 10,371,041$ $ 162,870 $ 1,934,034 $ (73,630) $ 12,394,315 $ 12,364,861 Liabilities, net assets and shareholder's equity Liabilities: Accounts payable and accrued expenses$ 636,612 $ 636,612 $ $- $ - $ 83,264 83,264 $ $- $ - 719,876 $ 719,876 $ 466,846 $ 466,846 G Grants payable - - -- 77,200 77,200 -- 77,200 77,200 74,590 74,590 D Due to Equipment Leasing and Finance Association- -- - 73,630 73,630 (73,630) (73,630)- -- - D Deferred revenue2,593,922 2,593,922------2,593,922 2,593,922 2,062,644 2,062,644 D Deferred rent35,540 35,540------35,540 35,540 66,818 66,818 I Income taxes payable------2,300 2,300 E Employee benefit plan obligations649,170 649,170------649,170 649,170 794,487 794,487 D Deferred compensation------195,300 195,300 O Other 436,358 436,358 - - - 436,358 - Total liabilities 4,351,6024,351,602 -- 234,094 234,094 (73,630) (73,630) 4,512,066 4,512,066 3,662,985 3,662,985 N Net assets and shareholder's equity: Unrestricted net assets: Undesignated 5,703,6975,703,697 162,870 162,870 1,699,940 1,699,940 (1,862,810) (1,862,810) 5,703,697 5,703,697 8,291,746 8,291,746 D Designated by Board of Directors 315,742 315,742 - - - 315,742 315,742 6,019,439 162,870 1,699,940 (1,862,810) 6,019,439 8,607,488 N Net assets restricted to Foundation and PAC ------1,862,810 1,862,810 1,862,810 1,862,810 - - S Shareholders equity ------94,388 Total net assets and shareholder's equity 6,019,439 6,019,439 162,870 1,699,940 - 7,882,249 8,701,876 Total liabilities, net assets, and shareholder's equity $ 10,371,041$ 10,371,041$ 162,870 $ 1,934,034 $ (73,630) $ 12,394,315 $ 12,364,861

2008 ANNUAL REPORT 29 30 2008 ANNUAL REPORT REGULAR&INTERNATIONALMEMBERS

1ST FARM CREDIT SERVICES BANK FINANCIAL, FSB CENTER CAPITAL CORPORATION 1ST SOURCE BANK BANK LEUMI LEASING CORPO- CENTRAL LEASING CORPORA- ACC CAPITAL CORPORATION RATION TION ACCESS FINANCIAL SOLUTIONS, BANK MIDWEST, N.A. CENTRAL PACIFIC BANK LEASING INC., A JLG COMPANY BANK OF AMERICA CFI FINANCIAL SERVICES ACCESS LEASING CORPORA- BANK OF CHINA AVIATION LEAS- CG COMMERCIAL FINANCE TION ING PTE. LIMITED CHASE EQUIPMENT LEASING ACRECENT FINANCIAL BANK OF HAWAII LEASING, INC. CHICAGO FREIGHT CAR LEAS- ADP CREDIT CORP. BANK OF THE WEST ING CO. ADVANCE ACCEPTANCE CORPO- BANKERS LEASING COMPANY CIMC VEHICLE LEASING CO., LTD. RATION (A DIVISION OF FIRST BAYCAP, INC. CISCO SYSTEMS CAPITAL COR- WESTERN BANK & TRUST) BAYTREE LEASING COMPANY, PORATION AEL FINANCIAL, LLC LLC CIT AFFILIATED FINANCIAL SERVICES BB COMMUNITY LEASING SERV- CITICAPITAL AGCOUNTRY FARM CREDIT ICES, INC. CITY NATIONAL BANK SERVICES BB&T EQUIPMENT FINANCE CLERTECH FINANCIAL, INC AGFA FINANCE GROUP BIGR HOLDINGS, LLC CLUNE & COMPANY LC AGSTAR FINANCIAL SERVICES, BLACK ROCK CAPITAL, LLC CMB FINANCIAL LEASING COR- ACA BLAKE, CASSELS & GRAYDON PORATION LIMITED AIG COMMERCIAL EQUIPMENT LLP COACH CAPITAL, LLC FINANCE, INC. BNY CAPITAL FUNDING LLC COACTIV CAPITAL PARTNERS AIR, LAND AND SEA CORPORA- BOKF EQUIPMENT FINANCE, INC. COMERICA LEASING CORPORA- TION BOSTON FINANCIAL & EQUITY TION ALEXANDER CAPITAL CORPORA- CORPORATION COMMERCE BANK, N.A. - CBI TION BRANDYWINE CAPITAL ASSOCI- LEASING, INC. ALL POINTS CAPITAL CORP. ATES, INC. COMMERCIAL CAPITAL COM- ALLEASING BRENTWOOD CREDIT CORPO- PANY, L.L.C. ALLEGIANCE LEASING COMPANY, RATION COMMERZBANK AG LLC BRIDGEWAY CAPITAL ADVISORS COMMODORE FUNDING COR- ALLEGIANT PARTNERS INCORPO- BTMU CAPITAL CORPORATION PORATION RATED BTMU LEASING & FINANCE, INC. COMMONWEALTH CAPITAL ALLEGRETTO FUNDING GROUP, BURDICK & ASSOCIATES INC CORP. INC. BUSH TRUCK LEASING, INC COMPANY ALLIANCE LAUNDRY SYSTEMS BUTLER CAPITAL CORPORATION COMPASS CAPITAL CORPORA- ALLIANCE LEASING, INC. CADENCE LEASING TION ALLIED CAPITAL CORPORATION CALIFORNIA FIRST LEASING CONNELL FINANCE COMPANY, ALTEC CAPITAL SERVICES CORPORATION INC. ALTER MONETA CORPORATION CANON FINANCIAL SERVICES, CONTAINER LEASING A/S AMERICAN BANK LEASING CORP. INC. CONTINENTAL BANK AMERICAN INDUSTRIAL LEASING CAPITAL ADVANCE LEASING, INC. CONTINENTAL EQUIPMENT CAPI- COMPANY CAPNET FINANCIAL SERVICES TAL CORPORATION AMERICORP FINANCIAL, INC. CARLTON FINANCIAL CORPORA- CORPORATE LEASING ASSOCI- APPLECROSS PARTNERS INC. TION ATES, INC. ARVEST EQUIPMENT LEASING CARREDEN GROUP INCORPO- COURT SQUARE LEASING COR- ASSOCIATED BANK LEASING RATED PORATION AT&T CAPITAL SERVICES, INC. CASSELS BROCK & BLACKWELL CREDENTIAL LEASING CORPO- ATEL CAPITAL GROUP LLP RATION ATLAS COPCO CUSTOMER FI- CATERPILLAR FINANCIAL CREDIT SUISSE SECURITIES NANCE USA INC SERVICES CORPORATION (USA) LLC AUTREY CAPITAL GROUP CBC GROUP, INC. CREEKRIDGE CAPITAL LLC AXIS CAPITAL, INC. CCA FINANCIAL, LLC. CSI LEASING, INC. BALBOA CAPITAL CORPORATION CCB FINANCIAL LEASING COR- CYENCE INTERNATIONAL INC. BANCORPSOUTH EQUIPMENT PORATION, LIMITED CYPRESS FINANCIAL CORPORA- FINANCE CELTIC LEASING CORP. TION

31 REGULAR&INTERNATIONALMEMBERS

DAIMLER CAPITAL SERVICES FIRST CITIZENS BANK AND GROUP FINANCIAL SERVICES DAIMLER FINANCIAL SERVICES TRUST-COMMERCIAL LEASING GSF ADVISORS DARBY BANK & TRUST CO. FIRST DATA GLOBAL LEASING GTSI FINANCIAL SERVICES INC. DCD CAPITAL, LLC FIRST EAGLE BANK GULF POINTE CAPITAL, LLC DE LAGE LANDEN FINANCIAL FIRST FINANCIAL CORPORATE HALLMARK CAPITAL COMPANY SERVICES SERVICES, INC. HARBORSIDE CAPITAL GROUP DELL FINANCIAL SERVICES FIRST HAWAIIAN LEASING, INC. LLC DEUTSCHE BANK SECURITIES FIRST LITCHFIELD LEASING COR- HARBOUR CAPITAL CORPORA- INC. PORATION TION DEUTSCHE LEASING USA, INC FIRST NATIONAL BANK OF HARRIS N.A. DEXTER FINANCIAL SERVICES HUTCHINSON HARRISON CAPITAL CORPORA- DIAMOND LEASE (U.S.A.), INC. FIRST NATIONAL CAPITAL COR- TION DIEBOLD GLOBAL FINANCE COR- PORATION HEALTHCAPITAL, INC. PORATION FIRST NIAGARA LEASING, INC. HELM FINANCIAL CORPORATION DIRECT CAPITAL CORPORATION FIRST SOUTH LEASING LLC HIGHLINE CAPITAL CORP. DIVERSIFIED FINANCIAL SERV- FIRSTLEASE, INC. HITACHI CAPITAL AMERICA CORP. ICES, LLC FIRSTMERIT EQUIPMENT HITACHI DATA SYSTEMS CREDIT DIVERSITY CAPITAL LLC FINANCE, INC. CORPORATION DOOSAN INFRACORE FINANCIAL FIVE POINT CAPITAL, INC HONEYWELL GLOBAL FINANCE SOLUTIONS FLAGSHIP CREDIT SERVICES, LLC DOUGHERTY EQUIPMENT LLC HOSPITALITY LEASING CORPO- FINANCE LLC FORD FINANCIAL SERVICES, INC. RATION DZ BANK FORSYTHE MCARTHUR ASSOCI- HP FINANCIAL SERVICES EDSON FINANCIAL INC ATES, INC. HSH NORDBANK AG EL CAMINO RESOURCES, LTD. FORTRESS INVESTMENT GROUP HSW FINANCIAL RECOVERY, LLC EMIGRANT BUSINESS CREDIT FROST LEASING HUNTINGTON BANK EQUIPMENT CORPORATION FUYO GENERAL LEASE (USA) INC. FINANCE ENCORE LEASING GROUP, LLC GATX CORPORATION IBM GLOBAL FINANCING EPLUS GROUP, INC. GE CAPITAL MARKETS GROUP ICON CAPITAL CORP. EQUILEASE FINANCIAL SERV- GE CAPITAL SOLUTIONS IDB LEASING, INC. ICES, INC. GE COMMERCIAL FINANCE IFC CREDIT CORPORATION EQUIPMENT FINANCE CORP GE EQUIPMENT SERVICES IKON OFFICE SOLUTIONS ERVIN LEASING COMPANY GE HEALTHCARE FINANCIAL INGERSOLL-RAND COMPANY FARM CREDIT LEASING SERV- SERVICES (HFS) INSIGHT INVESTMENTS, CORP. ICES CORPORATION GENESIS CAPITAL CORPORA- INTERNATIONAL FINANCIAL FARM CREDIT SERVICES OF TION SERVICES CORP. MID AMERICA GENEVA CAPITAL, LLC IRWIN COMMERCIAL FINANCE FCM RAIL, LTD. GFC LEASING-A DIVISION OF THE JOHN DEERE CREDIT FEDERAL DEPOSIT INSURANCE GORDON FLESCH JOHN HANCOCK LEASING COR- CORPORATION COMPANY,INC. PORATION FEDERATED CAPITAL CORPORA- GLOBAL CAPITAL, LTD. JOHNSON & JOHNSON FINANCE TION GLOBAL IMAGING SYSTEMS, INC. CORPORATION FIDELITY NATIONAL CAPITAL, LLC GLOBAL VANTAGE LTD. JOHNSON BANK, EQUIPMENT FIFTH THIRD LEASING COMPANY GOLDLEAF LEASING, LLC LEASING SERVICES DIV. FINANCIAL FEDERAL CORPORA- GOVERNMENT LEASING COM- JULES & ASSOCIATES, INC. TION PANY KALAKANE CAPITAL, LLC FINANCIAL PACIFIC LEASING, LLC GOWLING LAFLEUR HENDER- KBC LEASE HOLDING NV FINANCIALOGIC, INC. SON LLP KEY EQUIPMENT FINANCE FIRST AMERICAN EQUIPMENT GRANT CAPITAL MANAGEMENT KINGSBRIDGE HOLDINGS, LLC FINANCE GREATAMERICA LEASING KLC FINANCIAL, INC. FIRST BANK OF HIGHLAND PARK CORPORATION KRAUS-ANDERSON CAPITAL, INC. FIRST BUSINESS EQUIPMENT FI- GREYSTONE EQUIPMENT KRONOS INCORPORATED NANCE FINANCE CORPORATION LADCO LEASING

32 2008 ANNUAL REPORT REGULAR&INTERNATIONALMEMBERS

LAKELAND BANK LEASING MEI FINANCIAL SERVICES LLC OLYMPUS AMERICA INC. LASALLE SYSTEM LEASING, INC. MERCADO CAPITAL CORPORA- OMNI CAPITAL, A DIVISION OF LAVERY, DE BILLY LLP TION OMNI NATIONAL BANK LAZARD MERCANTIL COMMERCEBANK ONESOURCE FINANCIAL CORP. LEAF FINANCIAL CORPORATION MERCHANTS CAPITAL RE- ORACLE CREDIT CORPORATION LEASE ADMINISTRATION CORP. SOURCES, INC. ORION FIRST FINANCIAL, LLC LEASE CORPORATION OF AMER- MERICAP CREDIT CORPORATION ORIX USA CORPORATION - COM- ICA MERIDIAN LEASING CORPORA- MERCIAL FINANCE LEASE FINANCE GROUP, INC. TION OVERLAND CAPITAL GROUP, INC. LEASEPLAN USA, INC. MERRILL LYNCH CAPITAL -EF PACIFIC RIM CAPITAL, INC. LEASING ASSOCIATES OF BAR- MERRIMAK CAPITAL COMPANY PANTHEON CAPITAL LLC RINGTON, INC. LLC PARK NATIONAL BANK LEASING GROUP, INC. MICROSOFT FINANCING PARKBANK LEASING, INC. LEASING SOLUTIONS LLC MIDLAND CAPITAL PARTNERS, PDS GAMING CORPORATION LEASING TECHNOLOGIES INTER- LLC PENTECH FINANCIAL SERVICES, NATIONAL, INC. MISHAWAKA LEASING CO., INC. INC. LEHMAN BROTHERS MITSUBISHI UFJ LEASE & FI- PEOPLE'S CAPITAL AND LEASING LFC CAPITAL, INC. NANCE (U.S.A.) INC. CORP. LFC, INC. MITSUI LEASING CAPITAL COR- PHH ARVAL LIBERTY BANK PORATION PHH FINANCIAL SERVICES, INC. LION LEASING A/S MIZUHO CORPORATE BANK USA PHILIP MORRIS CAPITAL CORPO- LLOYDS TSB BANK PLC MODSPACE RATION LPI SOFTWARE FUNDING MRC COMPUTER CORP. PINNACLE BUSINESS FINANCE, GROUP, INC. MRK LEASING, LTD. INC. M&I EQUIPMENT FINANCE MTC EQUIPMENT FINANCE, LTD. PIPER JAFFRAY & CO. M&T BANK CORPORATION N-1 TECHNOLOGIES PITNEY BOWES GLOBAL FINAN- MACHINERY SYSTEMS INC. NATIONAL CITY COMMERCIAL CIAL SERVICES MACQUARIE EQUIPMENT FI- CAPITAL, LLC PMC FINANCIAL SERVICES NANCE, LLC NATIONAL EQUIPMENT LEASING, GROUP, LLC MACROLEASE CORPORATION INC DBA AMERICAN LEASING, PNC EQUIPMENT FINANCE, LLC MADISON CAPITAL LLC INC. POPULAR EQUIPMENT FINANCE MAGNET BANK EQUIPMENT FI- NATIONAL LEASING GROUP, INC. PREMIER FINANCIAL CORPORA- NANCE NATIONAL PENN LEASING COM- TION MAILROOM SERVICES INC. PANY PRESIDIO TECHNOLOGY CAPITAL MAIN STREET BANK NATIXIS CAPITAL MARKETS, INC LLC MAINLINE FINANCIAL SERVICES, NAVISTAR FINANCIAL CORPORA- PRUDENTIAL CAPITAL GROUP LLC TION COMMERCIAL ASSET FINANCE MANUFACTURERS' LEASE PLANS, NCMIC FINANCE CORPORATION PUGET SOUND LEASING INC. NCR CORPORATION RAPID SOLUTION LEASING, INC. MARCAP CORPORATION NEC FINANCIAL SERVICES, INC. RAYMOND LEASING CORPORATION MARLIN LEASING CORP. NEW ALLIANCE BANK RBS ASSET FINANCE, INC. MARQUETTE EQUIPMENT FI- NEW WORLD EQUIPMENT FUND- RECOMBO, INC NANCE, LLC ING, LLC REGIONS EQUIPMENT FINANCE MASSMUTUAL ASSET FINANCE, NIBARGER ASSOCIATES CORPORATION LLC NORLEASE, INC. RELATIONAL, LLC MATRIX FITNESS SYSTEMS INC. NORTHERN LEASING SYSTEMS, RENT-WISE MAX LEASING USA INC. REPUBLIC BANK MAXUS CAPITAL GROUP, LLC NORTHLAND CAPITAL FINANCIAL REPUBLIC FINANCIAL CORPORA- MAZUMA CAPITAL CORP SERVICES, LLC TION MB FINANCIAL BANK NOVOSIBIRSK LEASING COM- RESIDCO MCAP LEASING PANY RESOURCE LEASING COMPANY MCKESSON CAPITAL CORP. OCE FINANCIAL SERVICES INC. RICHMOND CONSULTING MED ONE CAPITAL, INC. OFC CAPITAL GROUP

2008 ANNUAL REPORT 33 REGULAR&INTERNATIONALMEMBERS

RICOH AMERICAS CORPORA- SUSQUEHANNA COMMERCIAL US EXPRESS LEASING, INC. TION FINANCE, INC. US FINANCIAL, LLC RITCHIE BROS. AUCTIONEERS SYNOVUS CAPITAL FINANCE VALLEY COMMERCIAL CAPITAL, ROCKWELL FINANCIAL GROUP SYSIX FINANCIAL, LLC LLC RZB FINANCE LLC TAMCO VANTYX SYSTEMS SABEAK LEASING & INVESTMENT TBF FINANCIAL, LLC VARIAN MEDICAL FINANCE CO. TCF EQUIPMENT FINANCE, INC. VARIANT LEASING CORPORA- SAIC TCP LEASING, INC. TION SALEM FIVE BANK TD EQUIPMENT FINANCE, INC VARILEASE TECHNOLOGY SC CAPITAL CORP. TECHNOLOGY LEASING CON- GROUP, INC. SCG CAPITAL CORPORATION CEPTS, INC. VELOCITY FINANCIAL GROUP SCI LEASING GROUP TELERENT LEASING CORPORA- VEND LEASE COMPANY, INC. SCOTIA LEASING COSTA RICA TION VERIZON CREDIT INC. SECURCOR INC. TEQLEASE, INC. VISION FINANCIAL GROUP, INC. SENTRY FINANCIAL CORPORATION TEREX FINANCIAL SERVICES VOLVO FINANCIAL SERVICES SG EQUIPMENT FINANCE TETRA CORPORATE SERVICES, NORTH AMERICA SIEMENS FINANCIAL SERVICES, LLC WACHOVIA EQUIPMENT FINANCE INC. TEXAS CAPITAL BANK WAFRA INVESTMENT ADVISORY SIEMENS MEDICAL FINANCIAL TEXTRON FINANCIAL CORPORA- GROUP, INC. SERVICES TION WALLWORK LEASE SILICON GRAPHICS, INC. THE TORO COMPANY WELCH STATE BANK SILVERMARK CAPITAL, A DIVISION TIGER LEASING, LLC WELLS FARGO BANK NORTH- OF STERLING BANK TIMEPAYMENT CORPORATION WEST-CORPORATE TRUST SINTER CAPITAL TIP CAPITAL SERVICES SL FINANCIAL SERVICES CORP. TOKYO LEASING U.S.A., INC. WELLS FARGO EQUIPMENT FI- SMARTFUNDIT.COM TORKIN, MANES, COHEN, ARBUS NANCE, INC. SMBC LEASING AND FINANCE, LLP WELLS FARGO FINANCIAL LEAS- INC. TOWN AND COUNTRY LEASING ING, INC. SOMERSET CAPITAL GROUP, LTD. LLC WELLS FARGO FINANCIAL RE- SOUTHBRIDGE FINANCIAL CORP. TOYOTA FINANCIAL SERVICES SOURCES, INC. SOVEREIGN BANK, CEVF DIVI- TRANS ADVANTAGE INC. WELLS FARGO FOOTHILL - SION TRANS LEASE, INC. LENDER FINANCE STAR FINANCIAL BANK, STAR TRIMARC FINANCIAL, INC. WEST LB EQUIPMENT FINANCE DIVISION TRINITY INDUSTRIES LEASING WESTERN ALLIANCE LEASING STATE STREET CORPORATION CO. WHITE CLARKE NORTH AMERICA STEARNS BANK NA-EQUIPMENT TRINITY VENDOR FINANCE WILLOW AVIATION SERVICES, LLC FINANCE DIVISION TURNFORD SYSTEMS INC. WILMINGTON TRUST COMPANY STEELCASE FINANCIAL SERVICES TYGRIS ASSET FINANCE WINMARK CAPITAL INC. TYGRIS COMMERCIAL FINANCE WINTHROP RESOURCES COR- STERLING BANK LEASING GROUP PORATION STRYKER CORPORATION UNION BANK OF CALIFORNIA- XEROX FINANCING SOLUTIONS STUDEBAKER WORTHINGTON EQUIPMENT LEASING DEPART- YANDELL AND COMPANY LEASING CORP. MENT ZOOMLION FINANCE & LEASING SULEASING INTERNATIONAL USA, UNION EQUIPMENT FINANCE, COMPANY INC. LLC SUMMIT FUNDING GROUP, INC. UNITED LEASING ASSOCIATES SUMNER GROUP INC. OF AMERICA, LTD. SUN LIFE ASSURANCE COMPANY UNITED LEASING, INC. OF CANADA UNIVEST CAPITAL, INC SUN MICROSYSTEMS, INC. UPS CAPITAL CORPORATION SUNBRIDGE CAPITAL US BANCORP BUSINESS EQUIP- SUNTRUST EQUIPMENT FINANCE MENT FINANCE & LEASING CORP. US BANK EQUIPMENT FINANCE

34 2008 ANNUAL REPORT ASSOCIATEMEMBERS

ACCENTURE CHRISTOPHER M. HILL AND ECS FINANCIAL SERVICES, INC. ACCRUIT, LLC ASSOCIATES, P.S.C. EDWARDS ANGELL PALMER & ACCUVAL ASSOCIATES, INCOR- CJR MANAGEMENT LLC DODGE, LLP PORATED CLARK HILL PLC EORIGINAL INC. ADP TAXWARE COHN & DUSSI, LLC EQUIFAX, INC ADVANCED RECOVERY SYS- COLDIRON COMPANIES EQUIPMENT DATA ASSOCIATES, TEMS, INC. COLLATERAL GUARANTY LLC LLC AKERMAN SENTERFITT COLLATERAL SPECIALISTS INC. EQUIPMENT EXCHANGE COM- ALLEGIANT GLOBAL SERVICE COLONNADE SECURITIES LLC PANY OF AMERICA AMERICAN LEASE INSURANCE CONSTELLATION FINANCING EQUIPMENT INSURANCE SERV- ANDERSON YOUNG ASSOCI- SYSTEMS CORP ICES ATES, INC. COOLEY GODWARD KRONISH EQUIPMENT PLACEMENT SERV- APTO SOLUTIONS LLP ICES, INC. ARENT FOX, PLLC COOPER, WHITE & COOPER LLP ERIC B. ZWIEBEL, P.A. ARONSOHN, WEINER & COPERNICUS-USA, LLC ERNST & YOUNG LLP NATIONAL SALERNO COPIER REMARKETING, LLC TAX DEPARTMENT ASKOUNIS & DARCY, P.C. CORNERSTONE FINANCIAL ADVI- EXECUTIVE SOLUTIONS FOR ASR SEARCH GROUP, ACTION SORS L.P. LEASING AND FINANCE, INC. STAFFING RESOURCES, INC. CORNERSTONE SOFTWARE, EXPERIAN BUSINESS INFORMA- ASSET APPRAISAL SERVICES INC. TION SOLUTIONS ASSURANT SPECIALTY PROP- CORPORATION SERVICE COM- FAIRVIEW ADVISORS, LLC ERTY PANY FARLEIGH WADA WITT ASSURED GUARANTY COSTON & RADEMACHER FERNS, ADAMS & ASSOCIATES, A ATLAS INTERNATIONAL LIFT CRAIG & ASSOCIATES PROFESSIONAL CORPORA- TRUCKS CREDITMAX TION AVITAS, INC. CREEK VIEW CONSULTING FLAMM, BOROFF & BACINE, PC BEARINGPOINT GROUP, LLC FLEISCHER & FLEISCHER BEE-LINE CORP. CROWE & DUNLEVY FLEXXPERTS LIMITED PARTNER- BERGER SINGERMAN CT LIEN SOLUTIONS SHIP BERNSTEIN LAW FIRM D&B FOSTER & WOLKIND, P.C. BICKERSTAFF, HEATH, DELGADO, DAUGHERTY, FOWLER, PERE- FRANDZEL ROBINS BLOOM & ACOSTA, LLP GRIN, HAUGHT AND JENSON CSATO, L.C. BINGHAM MCCUTCHEN LLP DAVID STEED CO. FULBRIGHT & JAWORSKI LLP BLANK ROME LLP DAVIS WRIGHT TREMAINE LLP GARDERE WYNNE SEWELL LLP BLOCK MARKUS WILLIAMS, LLC DAY PITNEY LLP GARWACKI & ASSOCIATES BORST & COLLINS, LLC DEAN MACHINERY INTERNA- GENPACT BUCHALTER NEMER TIONAL, INC. GLASS & GOLDBERG-A LAW BUCKLEY KING, LPA DELOITTE CORPORATION C&C ASSET MANAGEMENT, INC. DEWEY & LEBOEUF GLOBAL LINK TECHNOLOGY CAINE & WEINER COMPANY, INC. DIVDAT GRAYDON HEAD & RITCHEY LLP CANVAS SYSTEMS DOMINION LEASING SOFTWARE GREAT AMERICAN GROUP CAPGEMINI FINANCIAL SERV- LLC HAHN LOESER & PARKS LLP ICES. LLC DOUGLAS M. STEVENS, ATTOR- HALEY, SINAGRA, PAUL & CAPITAL ASSET SERVICES, INC. NEY AT LAW TOLAND, P.A. CASSIOPAE INC DOVER MANAGEMENT GROUP, HCL TECHNOLOGIES CHAPMAN AND CUTLER LLP INC. HELIVALUE$, INC CHATHAM FINANCIAL CORPORA- DOYLE & BACHMAN LLP HELMS MULLISS & WICKER PLLC TION DRESSLER & PETERS, LLC HEMAR & ASSOCIATES- CHP CONSULTING DUFF AND PHELPS ATTORNEYS AT LAW

2008 ANNUAL REPORT 35 ASSOCIATEMEMBERS

HEMAR, ROUSSO & HEALD, LLP LEXICON TECHNOLOGIES PORTER, WRIGHT, MORRIS & HENNIG & COMPANY LIQUIDITY SERVICES, INC. ARTHUR HODGSON RUSS LLP MACHINERY MANAGEMENT LLC PORTFOLIO FINANCIAL SERVIC- HOLLAND & KNIGHT, LLP MACQUARIE ELECTRONICS USA ING COMPANY HORGAN, ROSEN, BECKHAM & INC. POYNER & SPRUILL, LLP COREN, LLP MARKS & WEINBERG, P.C. PREDICTIVEMETRICS, INC. HUTCHINSON BLACK AND MARUBENI AMERICAN CORPO- PREMIER LEASE & LOAN COOK, LLC RATION SERVICES IC SYSTEM MCCARTER & ENGLISH, LLP PRICEWATERHOUSECOOPERS IMPULSE TECHNOLOGY MCCARTHY BURGESS & WOLFF LLP INDEPENDENT EQUIPMENT MCGLINCHEY STAFFORD, PLLC PROXIX SOLUTIONS, INC. COMPANY MESIROW FINANCIAL QUARLES & BRADY LLP INTEGRATED FINANCIAL SOLU- MESSERLI & KRAMER P.A. QUIKTRAK, INC. TIONS, INC. MOLLOY ASSOCIATES, INC. RAILROAD TECHNOLOGY COR- INTERCOM EXPORTING INC MONITOR, INC. PORATION INTERET CORPORATION MOORE & VAN ALLEN, PLLC RAY QUINNEY & NEBEKER INTERNATIONAL DECISION SYS- MORGEN INDUSTRIES, INC. REUBEN CONSULTING, LLC TEMS MORITT, HOCK, HAMROFF & ROBINSON, MCFADDEN & IRONPLANET HOROWITZ, LLP MOORE, PC IVORY CONSULTING CORPORA- MORRIS, JAMES, HITCHENS & ROSS INTERNATIONAL TION WILLIAMS LLP ROTHSTEIN ROSENFELDT ADLER JAFFE RAITT HEUER & WEISS, MORRISON & FOERSTER LLP RTR SERVICES INC. P.C. MURRAY, DEVINE & COMPANY RUSSELL EQUIPMENT COMPANY JENKINS & KLING, P.C. NASSAU ASSET MANAGEMENT RVI GROUP JENNINGS, HAUG & CUNNING- NATIONWIDE EQUIPMENT CO, SALES CONSULTANTS OF HAM, LLP LLC NORTHWEST ARKANSAS, INC. JONES LANG LASALLE INCORPO- NATIONWIDE EXCHANGE SERV- SAP AMERICA, INC. RATED ICES SCHULTE ROTH & ZABEL LLP JSD MANAGEMENT, INC. NETSOL TECHNOLOGIES SFBI RECRUITERS PROFES- KASS SHULER SOLOMON SPEC- NETWORK DYNAMICS SIONAL RECRUITING TOR FOYLE & SINGER, P.A. NIXON PEABODY LLP SHEPPARD MULLIN RICHTER & KEATING, MUETHING & KLEKAMP, NORTHBAY NETWORKS HAMPTON LLP P.L.L. NUTTER, MCCLENNEN & FISH, SMITH, DEBNAM, NARRON, KINGSBURY WAX BOVA, LLC LLP WYCHE, SAINTSING & MYERS, KPMG, LLP OBER, KALER, GRIMES & LLP KROPSCHOT FINANCIAL SERV- SHRIVER SOLOMON, GRINDLE, SILVER- ICES ODESSA TECHNOLOGIES, INC. MAN & SPINELLA KUTAK ROCK LLP ORACLE USA SONNENSCHEIN NATH & LAMM RUBENSTONE LLC OSG BILLING SERVICES ROSENTHAL LANE POWELL PADFIELD & STOUT, LLP SOUTHWESTERN BUSINESS RE- LAW OFFICE OF EDWIN E. HUD- PARKER, MILLIKEN, CLARK, SOURCES DLESON O'HARA, SAMUELIAN STARK & STARK, P.C. LAW OFFICES OF THOMAS G. PATTON BOGGS LLP STEVENS & LEE BERNDSEN, PC PAYNET, INC. STRATEGIC ASSET MANAGE- LEASEDIMENSIONS PEPLER MASTROMONACO LLP MENT LEASETEAM, INC. PLATZER, SWERGOLD, KARLIN, SULLIVAN & WORCESTER LLP LEASING 101 LEVINE, GOLDBERG & JASLOW, SUNGARD LEITESS LEITESS FRIEDBERG + LLP SUSAN CAROL ASSOCIATES FEDDERPC

36 2008 ANNUAL REPORT ASSOCIATEMEMBERS

TAMARACK CONSULTING, INC TAX LEASE CONSULTANTS, LLC TAYLOR & MARTIN AUCTIONEERS TECHTURN THACHER PROFFITT & WOOD THE ALTA GROUP THE MADISON-DAVIS GROUP INC. THELEN REID BROWN RAYSMAN & STEINER LLP THIRD PILLAR SYSTEMS THOMPSON COBURN LLP THOMSON TAX & ACCOUNTING - CS&S THOUGHTWORKS, INC. TIME VALUE PROPERTY EX- CHANGE TRANSAMERICAN EQUIPMENT CORP. TRENWITH FIXED ASSET/ LEASING VALUATION GROUP TROUTMAN SANDERS LLP TROY & GOULD TURN KEY BUSINESS CONSULTANTS VEDDER PRICE P.C. VERTEX INC. VISION COMMERCE, INC. VISTA CONSULTING GROUP, INC. WARREN & SELBERT INCORPO- RATED WATSON, FARLEY & WILLIAMS WEINSTOCK, FRIEDMAN & FRIED- MAN P.A. WELTMAN, WEINBERG & REIS WHITE & CASE LLP WINSTON & STRAWN LLP WORLD LEASING NEWS WULFF ENTERPRISES, INC. ZRG

2008 ANNUAL REPORT 37 38 2008 ANNUAL REPORT ELFASTAFF

Kenneth E. Bentsen, Jr., President

Dennis Brown, VP-State Government Relations

Shirley Bryant, Webmaster

Bill Choi, Director, Information & Research Services

Racquel Codling, Director-Business Development

Alexa Domeck, E-Learning Manager

Don Ethier, VP-Membership & Marketing

David Fenig, VP-Federal Government Relations

Janet Fianko, Manager-Professional Development

Royann Holland, Manager-Exhibits & Meetings

Wayne Hunt, Director-Online Services

Lisa Levine, Executive Director, Foundation

Ashley Lowe, Foundation Coordinator

Sally Maloney, VP-Meetings & Conventions

Maureen Martello, Executive Assistant to the President

Kelli Nienaber, Director-Government Relations

Ralph Petta, VP-Industry Services

Kesha Robinson, Membership Manager

Raynette Scoggins, Administrative Assistant/Reception

Morinia Scott, Meetings Coordinator & Registrar

Justin Short, State Government Relations Coordinator

Lesley Sterling, VP-Business & Professional Development

Paul Stilp, VP-Finance and Administration

Sandra Winkler, Manager-Graphics & Production

Diane Helyne Zyats, VP-Communications

2008 ANNUAL REPORT 39