THE ALTA INVITATIONAL The “New Normal”: The realities/forces that are driving the “New Normal” Presented by: John C. Deane Principal May 6, 2010

2  Is there a “New Normal” for our industry, or not?  How is “New Normal” defined? A paradigm shift? Something that forces major changes in our business models? Other?  Why is the search for the “New Normal” important? Post Mortem for what contributed to the recent financial crisis Guide for our future strategic and tactical decisions The “New Normal”: Equipment Leasing & Finance Industry

3 Additional Notes New Normal or Not: Major Changes & Lots of Fog, but undecided as to Paradigm Shift For Some: Threat of Being CDLA-Like Slower Growth Likely Tighter Credit Markets Probable Nimbleness Necessary Continuing Consolidation but Different (still over capacity) Must Remain Relevant to Customers Importance of New & Improved Products Important of the Use of Technology as a Competitive Advantage

4 More Notes Much More Planning Required Account Issues of Major Importance Regulatory issues of Major Importance Declining Talent Pool For Focus on Risk Profile Pace of Change/Business Change Greater than Ever Competitive Environment is Changing May 2010The Alta Group -

5  How would we describe the realities/forces that are driving our industry/businesses into a “New Normal”?  Materially slower growth  Ongoing tightness in the credit markets (government’s share of wallet)  Higher interest rates  Diminished U.S. position; replaced by “a surging Asia”  Much more regulation  De-leveraged balance sheets The “New Normal”: Realities/Forces Driving Our Industry & Businesses 1 Source: examples from Standard & Poor’s Ratings Services article, The New Normal: Fundamental Changes and The New Face of Finance; January 21, 2010

6  Are the previous realities/forces relevant to your business?  What realities/forces would you add for the “New Normal”?  Are these realities/forces different for: Bank Affiliates Captives Independents International lessors & lenders The “New Normal”: Realities/Forces Driving Our Industry & Businesses

7  Have elements of your business model changes in the context of the “New Normal”? Customer facing elements (e.g., value proposition) Pricing Capital markets Delivery systems/go to market strategy Cost management Investor (both debt and equity) elements Growth expectations Risk profile  Have these changes enhanced or diminished the soundness of your business model? The “New Normal”: Key Business Model Changes