Good morning, everyone. Welcome to Element Fleet Management's Investor Day. We're very excited to have you here this morning, both in person and online. My name is Michael Barrett, and for those of you who don't know me, I'm the Head of Investor Relations here at Element. I joined Element in the fall of 2018, so I do know many of you, and it's great to see so many familiar faces in the room. In a moment, I'll invite our President and CEO, Jay Forbes, to take the stage and offer some opening remarks. Before I do that, I have to remind you of the risks related to forward-looking statements. In the course of today's event, representatives of Element Fleet Management may make certain statements that are forward-looking or prospective in nature. These statements are based on assumptions that are subject to significant risks and uncertainties. We refer you to the cautionary statements and risk factors in Element's year-end and most recent MD&A, as well as our most recent AIF, for a description of these risks, uncertainties, and assumptions. Although we believe that the expectations reflected in forward-looking statements are reasonable, Element can give no assurance that the expectations reflected in any forward-looking statements will prove to be correct. Today's event also includes references to non-GAAP measures that we believe are helpful to present Element and its operations in ways that are useful to you, our investors. Reference can be made to our MD&A for a reconciliation of certain non-GAAP measures to IFRS measures. With that having been said, please join me in welcoming to the stage, Element's President and CEO, Jay Forbes. Good morning, welcome to Element's Investor Day. For those of you I've yet to meet, my name is Jay Forbes, and I'm delighted to serve as President and CEO of Element Fleet Management. I joined Element in June of 2018 after pitching the board of directors on a client-centric transformation plan that would surface the company's considerable unrealized potential and reshape the organization into the vibrant market leader it was built to be. We successfully completed that transformation plan in December 2020, delivering over $200 million of annual pre-tax run rate profitability improvements, and a materially strengthened and delevered investment-grade balance sheet, along with an organization that is devoid of the demands and distractions of non-core assets. Our transformation journey also yielded valuable insights into both unfulfilled market opportunities and how our strengthened operating platform would allow us to take advantage of same. These insights form the basis of a comprehensive three-pronged growth strategy that we launched in 2021. We couldn't be more pleased with the early successes arising from this growth strategy, especially in light of the dramatic macroeconomic challenges that we've encountered and have overcome. Element has never been better positioned than we are right now to sustain our momentum and to build on our success. We'd like to use our time with you today to help you better understand the reasons that fuel our confidence in the resilience of this business and the proven strength of our strategy, even amid the many uncertainties facing our global and local economies today. To that end, we have structured today's agenda to provide insights into how we do what we do for our clients and why we're so confident in the sustainability of our success. We will do this through the lens of two or three strategic growth priorities. The first is organic revenue growth atop a scalable operating platform, which magnifies that revenue growth into superior rates of operating income growth. The second is the advancement of our capital-lighter business model through service revenue growth and syndication, which both enhance our return on equity. Given the expected double-digit growth in free cash flow per share that will be generated from these first two growth strategies, our third strategic priority will see us predictably return excess equity to investors by way of growing common dividends and share buybacks. Earlier this month, we announced a 29% increase in our common dividend and renewed our Normal Course Issuer Bid to continue buying back our common shares on the Toronto Stock Exchange. We've been repurchasing Element shares for the last 24 months, reducing our common share count by over 20, or excuse me, by over 12% and redeeming two series of high-cost preferred shares. Returning to this morning's agenda, we're also going to talk about ESG, and in particular, our leadership position in fleet electrification. While EVs are far from being a meaningful revenue generator today, they offer significant growth prospects for our industry over the next decade. Accordingly, we've invested early to be best positioned to lead our industry through the gradual electrification of vehicle fleets in North America and ANZ. After our discussion of EVs, we'll open the floor to your questions. We expect to have ample time for Q&A before I wrap up with a few closing remarks. We also wanted to use today's forum to introduce you to 12 Element leaders from across our organization. They are representative of the high caliber individuals that lead our people, serve our clients, and drive our business. They are the reason we are so good at what we do, and I'm both proud and fortunate to have them as colleagues. What you'll hear from these leaders is that Element has a vibrant, growing business in a well-established, resilient industry with distinct advantages over our competitors. Our first competitive advantage is our people and their delivery of a consistent, superior client experience. That experience manifests itself in every interaction we have with every client, everywhere we operate. Every single client meeting I've had sees our people and their knowledge and the care that they provide, singled out by our clients with both thanks and admiration. Ours is an industry with relative price transparency, thus, while you need to be competitive on price, the single greatest point of competitive differentiation is the quality of the client experience. The investments that we made during and post-transformation have given our people the tools they need to consistently deliver a far superior experience to our clients. Our second competitive advantage is our scale, which affords us unrivaled purchasing power, service supplier networks, and the data that comes from managing 1.5 million vehicles across five countries. Scale also means a global presence. Many of our clients have operations that span North America, for those clients, being able to turn to a single FMC in Canada, the U.S., and Mexico, is of critical importance. Element is the only FMC with an integrated offering that spans North America. For clients with international presence, we have our Custom Fleet business in Australia and New Zealand, and our strategic alliance with Arval in Europe and South America, which allows us to go to markets in over 50 countries globally. Our third competitive advantage is our differentiated offerings. For instance, our strategic consulting services are by far the best in the industry, that's a function of a combination of our people as well as our scale. With roughly 1.5 million vehicles under management in over 700 industries, we have a rich automotive data set that is unparalleled inside or outside of fleet management. Our strategic consulting group aggregates and analyzes this data to help our clients reduce their total cost of fleet operations. In the last three years alone, we've proactively identified over $4 billion of productivity savings for our clients. Another example of our differentiated offerings is Arc by Element, our industry-leading wing-to-wing electric vehicle solution. Our expertise and leadership in EVs has clients and prospects alike seeking out Element to discuss fleet electrification strategies. While these engagements are beneficial on their own, they often lead to conversations about what else Element can do to make the complex simple for our clients and client prospects. When the infrastructure is in place and sufficient volumes of EVs are available, we will be here, along at the ready to help our clients with the transition ahead. Now, I could say much more, but I don't wanna steal the thunder of my colleagues presenting this morning. Let me turn the floor over to our Chief Commercial Officer, David Madrigal, who, with a handful of senior leaders from across the organization, will take you through Element's organic revenue growth strategy. David? Morning, everyone. For those of you who don't know me, David Madrigal. I'm the Chief Commercial Officer for Element. Over the next hour, my colleagues and I will show you how we have structured our commercial organizations for success and how we're driving organic revenue growth across the business. First, some background on me. I'm an industrial engineer by trade, and I obtained my MBA in Mexico. My career began in GE Capital, where I worked in a wide range of functions that span from operations, sales, marketing, credit, continuous improvement, and business development. I joined Element when we acquired GE Capital Fleet business back in October of 2015, and my first role at Element was leading our Mexican business. There, I oversaw the introduction of changes to our operations that have proven to be very successful. Our Mexican business has generated strong, double-digit annual growth, for the last three years and will continue to do so. This performance was largely against the backdrop of a stagnant and volatile Mexican economy. Element competes against the same FMCs in Mexico as we do in the U.S. and Canada, as well with a couple of captive OEMs that are unique to the Mexican market. Mexico has a high-grade quality portfolio, where we apply the same degree of scrutiny to our underwriting as we do everywhere else Element operates. Our Mexico portfolio performs as well or better than in any other region. Why am I telling you all of this? Well, because our success in Mexico is a very relevant proof point. During the first quarter of 2020, I was appointed Chief Commercial Officer for Element globally. My goal is to replicate and enhance the proven Mexican model of winning new clients here in the U.S. and Canada. We're gonna be very successful at that. I don't know about 25% compound annual growth over the next six years in the U.S. and Canada, 6%-8% annual revenue growth is well within our means. When I started at GE in Mexico, every sales rep was expected to maintain their client base, grow share of wallet, and develop new business. Not everybody is well-equipped to simultaneously do all of these things. When I took charge of our Mexico business, one of the first things I did early in 2016 was to reorganize our commercial function. I established functional teams that reflected the strengths of our people. This is the hunter-farmer sales model, where some people are good at seeking out and cultivating new relationships or hunting, and others are better at nurturing and growing already well-established relationships. These are the farmers. Our current success in the U.S. and Canada started with a similar overhaul of the commercial function. Today, all Element geographies have adopted the hunter-farmer model. As part of that overhaul in the U.S. and Canada, I also introduced more accountability supported by five key actions. The first one was, I scrutinized the commercial pipeline. I removed approximately 80% of the so-called opportunities, and that took us about six months. Since then, we have regrown the pipeline, and it's healthier now than it was when I arrived. It has higher conversion rates, improved cycle time, and reduced concentration. Every addition that we do to our pipeline is a quality opportunity. We either make tangible progress on the opportunity in short order or we pull it out from the pipeline. We established new sales incentive compensation plans where we reward profitable deals that are good for our clients as well as for our business and our investors. This requires a certain mindset. We have repopulated almost 80% of our hunters since the 1st quarter of 2020. We need to invest in support for our sales team. We did that in 2020 with a new technology stack and a more robust marketing effort that centered in account-based marketing. That enables us to gain real-time buyer intelligence that identifies growth and risk opportunities. That enables us to tailor our marketing content and touchpoints based on that marketing. The fourth thing we did was to enhance our commercial training to emphasize value-based selling. This means focusing on Element's value proposition, which is materially lowering the total cost of fleet operations, or TCO, and reducing the administrative burden of managing fleet vehicles for our clients. Fifth and finally, we moved our strategic consulting group from the operations side of our organization to our commercial group. Our strategic consulting, or SCS, now supports our pursuit of new clients in addition to what they've already done, which is proactive identification of cost savings for our clients. I would like to go through our five revenue growth drivers at a very high level. I'm gonna turn things over to five senior leaders from across the organization to speak to each of these growth drivers individually. First of all, client retention. It's much harder to grow if you're shrinking at the same time. That's why client retention is our first growth driver. Our second driver is share of wallet, which has three components: penetration, utilization, and pricing. Raja Eswar and Steve Jastrow will speak to you about these two. The third, fourth, and fifth revenue growth drivers are the responsibility of our hunter team and their leaders. Nick Verceles, who is our head of sales in the U.S. and Canada, will tell you about stealing market share. We have done a lot of this lately, and we expect that to continue, and Nick will explain to you why. The long-term success of our organic revenue growth strategy really depends on our fourth growth driver, which is converting self-managed fleets into Element clients. The self-managed fleet market is a huge opportunity in every geography we serve. Companies are still managing their own vehicles instead of outsourcing work to Element. Manuel Tamayo was my head of sales when I ran Element in Mexico, and he succeeded me as a country head when I took this current role. Manuel will tell you about the global self-managed stealing share strategy. Last but not least, Chris Tulloch will speak to our strategies for winning government and mega fleet clients in our footprint. Chris is the head of our business in ANZ, where we go to market as Custom Fleet. We have a dedicated teams focused on government fleet opportunities in the U.S., in Canada, and in ANZ, recognizing that public sector clients have different needs, and it's a different sales process. We also differentiate our approach when it comes to mega fleets. Chris will also get into that. Before I turn things over to my colleagues, let me show you what we have already accomplished since January of 2020 when we started our commercial transformation in the U.S. and Canada. These are our U.S. and Canadian growth results. Keep in mind that this is against the backdrop of a global pandemic, a global microchip shortage, and other supply chain issues that have caused OEM production delays. As you can see, we're doing very well. We have been focused on service revenue as the measure of our success in the U.S. and Canada because it's been hard to obtain new vehicles and originations contribute most to our net financing revenue. This is our global picture, which is also very strong. I have a tremendous amount of confidence in the sustainability of our success. For me, that confidence is grounded in four things. First, our people, processes, and systems that we brought together here in the U.S. and Canada. I also know firsthand the caliber of people, process, and systems in Mexico, and they are awesome. I'm also very familiar with the system and the same attributes that we have at Custom Fleet in ANZ, which are on par to our North American teams. We're also continuing to invest in all these areas, as you've heard from Jay and Frank earlier this month. This gives me a lot of confidence in the sustainability of our success. The second thing that gives me confidence is our client feedback. Our Net Promoter Scores are rising, which is directly linked to growing our business. That's especially important when consolidation is disrupting the market and distracting our competitors. There's two more sources of confidence for me. My leadership experience in Mexico, where we proved out the strategy that we are now successfully using globally. Again, that strategy has delivered strong double-digit annual growth in Mexico for six consecutive years and will again this year. Finally, my confidence is grounded in our global best practice sharing, which is a virtual cycle. The Mexican strategy to convert self-managed fleets into Element clients is now being successfully applied in ANZ, U.S., and Canada. Custom Fleet's vehicle resale strategy to maximize gain on sales for our business is now also being used in Mexico successfully. The commercial operating discipline that we've developed in the U.S. and Canada is now being adopted by Mexico and ANZ. We also share learnings and benefits from our global strategic alliance with Arval in Europe and South America. Element and Arval go to market together in over 50 countries when pursuing global clients. Our 27-year-old relationship is much more than just a sales strategy. We share global market intelligence, aggregated client insights, commercial learnings, and product trends. Europe is a long way on fleet electrification, so we learn a lot from Arval about EV and charging infrastructure deployment as an example. We also have shared with them our approach to strategic consulting. This is the way a first-class organization operates, by sharing success stories, learnings, and ideas, both internally and with our trusted partners. Everyone's performance is elevated. We have that culture here at Element. Our success begets further success. Now, let me introduce you to Raja Eswar, our Vice President of Client Experience, who will talk to you about our two organic revenue growth drivers. Thank you, David. Good morning. It's great to be here with you to talk about our approach to client retention and how that loyalty is translating into share of wallet growth and accelerating that. First, a bit about me. I joined Element as the Head of Client Experience in 2021. Prior to Element, I was the head of Client Experience and Delivery Transformation at T. Rowe Price, where we were reimagining the end-to-end client experience to drive growth and operational excellence. In prior roles, I've held various business unit, commercial, and operations leadership roles in Capgemini, specializing in the outsourcing space, working with leading brands like Procter & Gamble, BMW, Chick-fil-A, and the likes. Having lived on both sides, I have a good understanding of the dynamics of how client business planning and priorities evolve and their rising expectations of partners. At Element, I'm responsible for ensuring a consistent, superior experience, which is a critical pillar for client retention and for powering our loyalty strategy. To do this, we have an extensive voice of the customer program incorporating signals from over a dozen touch points, which allows us to see one holistic view of the client and the driver. We use Net Promoter Score or NPS as our beacon metric of client sentiment. Our focus is on executing the fundamentals, the score is merely a reflection of how well we're executing. David noted our rising NPS scores, I couldn't agree more with him. Happy clients are more likely to remain clients. Happy clients are likely to subscribe and utilize existing and more services. They're likely to tell others about that experience. A high NPS is vital to our growth strategy. Just to level set, NPS is established by asking our clients, "How likely is it that you would recommend Element to a friend or colleague on a scale of 1 to 10?" We follow industry best practices in the way the program is managed and administered. The higher the score, the better. Negative scores are relatively uncommon, and a score in the range of 50 and above is considered world-class. I can tell you that today our NPS is among the elite for business like ours, and we intend to continue moving that further up. Collecting NPS and blending it with other signals also gives us more insight. For example, we look very closely at our detractors and look at what their feedback says. We adopt a disciplined approach called service recovery, which then allows us to understand and action that feedback. We're building service recovery as a key competency, learning from other industries like hospitality, retail, and healthcare to incorporate those best practices. I can tell you that 75% of the people who were detractors about a year ago are either passives or promoters today. Let's dig into a few more examples of how our rising NPS is enabling our strategy. We know that our success at selling incremental services is about 20% greater with promoters than with the other groups. There's a direct connection between a rising NPS and growing share of wallet. We place a strong emphasis on client segmentation and making sure we execute segment-wise priorities and actions. An obvious lens for client segmentation is their contribution to our net revenue. NPS tells us that our highest revenue clients are among the happiest and at best-in-class levels. This makes sense as we continue to align with them at a very high level, elevating our relationships, working closely with them on their business priorities, business plans, and bringing new ways to add value to them. Lastly, we know that from our client and prospect interviews, that reputation is a top three decision driver. NPS is a proxy for reputation. NPS is very closely linked to our growth. Let's talk about retention. The way I look at it, every dollar of revenue that we lose with a client departure masks a dollar of growth that's coming from either share wallet growth or from new clients. I want you, our investors, to see every single dollar of revenue that we're generating from growth. We're very focused on retention and maximizing the lifetime value of clients. We're fast approaching 99% retention in the U.S. and Canada to build off already on 99% retention in ANZ and Mexico. How do we do it? We diligently measure specific KPIs throughout the client journey. Doing so identifies specific issues and opportunities for improvement, which are directly addressed by our execution teams, tracked and monitored through automated dashboards, and incorporated into a broader corrective and preventive action plans. This is part of the service recovery process I was mentioning earlier. Let's talk about share of wallet growth. We look at share of wallet growth as three-pronged: penetration, utilization, and pricing. We're gonna address these in reverse order. Not gonna spend much time at all on pricing. You've heard and read through our disclosures that our business model benefits from inflation. We've also quantified the impact of this on positive impact on it, on our services revenues throughout the supplementary information documents throughout the year. Wanna spend more time on utilization. When clients have paid to provide their drivers access to Element services, it's a missed opportunity if the drivers use a service outside the network to get the same services done. A simple example is a driver taking their vehicle outside of Element's network to their brother-in-law's shop for service and maintenance. The driver likely pays more for the services, for the parts and labor. There's 60,000 plus shops in Element's network, so clearly, the driver pays more through the going to the local shops. The client loses the benefit of Element being able to log the transaction, track it as part of our broader set of data points. Should there be warranty or other concerns, it's much more beneficial for clients to stay within network than go outside. Of course, there is quality and safety concerns. We've launched intelligent digital tools which allow our clients to track such behavior and to be able to manage it. We've applied gamified approaches where appropriate, and most notably through our digital platform called Xcelerate. Mobile and desktop apps make it really easy for our clients and drivers to use the Element services as well as monitor and track the right kind of behaviors. Automated preventive maintenance notifications can be set up through the app. Drivers can schedule the services that they need through the app. Fleet managers can curate specific app options, like for example, nudging their drivers to use more minority and women-owned suppliers provided it's within certain parameters. Strategic consulting services are a major contributor to improving utilization. The SCS teams show our clients data-driven evidence that staying within Element's network is a win-win for their drivers and for themselves. We're increasingly leveraging behavioral science and management in order to influence the driver behavior and correspondingly improving the client outcomes. By monitoring driver behaviors and applying the agreed interventions at the right times, we can maximize the likelihood of influencing the driver behavior in favor of utilizing Element services. Thank you for having me this morning. I will now turn it over to my friend, Steve Jastrow, who leads our strategic consulting team, to show you how our teams work very closely together in the third pillar of our share of wallet expansion strategy, which is penetration. Steve. Thank you, Raj. Good morning, everybody. First I wanna thank you all for coming here in this beautiful room, and those of you online, thank you for your time. We appreciate it. I'm Steve Jastrow, and I lead our strategic consulting services group, otherwise known as SCS. I've had a 23-year career at Fleet, starting my career back in 1999 at GE Capital's Fleet business. For the past 1five years, I've been focused on the consulting and analytics side of the business. For the past three years, I've had the pleasure of leading the team. What SCS does is provide actionable insights for both our clients and our business. When you look at the screen, you see how we communicate to our clients the impact of the recommendations, both actioned and identified. I want you to remember this slide 'cause I'm gonna refer to it again in just a couple minutes. We capture an incredible amount of data off the 1.5 million vehicles under management, plus the millions of vehicles we've managed over the past decade that are now off road. I believe we have the deepest data set in the industry. We know the total cost to operate a vehicle outside an OEM dealers network, the total cost, not just some of the maintenance, the total cost. We know how vehicles perform with various degrees of aftermarket customization or upfit, which is very common, and we know how vehicles perform in different geographies, climates, and use cases. We know this for hundreds of models across dozens of OEMs. The team I lead is 70 professionals globally. With diverse backgrounds, diverse business backgrounds, and half of whom have advanced degrees and/or certifications, we have a world-class team. Size matters. We can crowdsource ideas and bring those observations to our clients. It's also an example of Element's scale benefits. We have the resources to staff, train, and equip my team. As I mentioned, we are constantly collecting data off of vehicles. We have invested in and built the tools necessary for my team to interact with that data to create value for our clients. That's the analytics side of my team. The consultants generate actionable insights that our clients can use to lower their total cost of operation or TCO. We've identified over a billion and a half dollars of savings in each of the last two years, a billion and a half. So far this year, we're at a billion and a quarter. That's a lot of savings. Importantly, we have the expertise to help our clients take the necessary steps to realize on that value. I'm gonna talk about penetration now, which is the most important of the three components of share wallet growth. Penetration is something my team specializes in. I'm gonna show you how we use data to create value by selling incremental services to our clients. Our scale advantages make our services a big part of how our clients can achieve the cost savings that we identify. Let me be clear. My team is not simply in the business of recommending more services to our clients. Rather, we provide our clients the right advice every time. We are their trusted advisor. Lots of our advice has nothing to do with selling additional services. It's just better fleet management practice. All of our recommendations either lower a client's TCO or reduce the administrative burden to operate their fleet. As you know, we have a cost plus business model. You've heard about it and read about it in our disclosures. When we lower a client's TCO, we actually lower our revenue. Our view is that a long-term relationship is better than a transactional one, and I know firsthand that the value we provide creates long-term relationships. Our clients tell me. Raj just shared our retention numbers. In the process of identifying, in the process of serving our clients' best interest, we earn the right to help them realize some of the cost savings that we've identified. Our products and services are designed to do just that. They're designed to lower TCO and reduce administrative burden, which by the way, is also a cost savings. The best part, the more services we sell, the more data we collect, and the more we can identify for savings for our clients. That's win-win stuff. We track our opportunities and our successes. It underpins our confidence in sustaining our recent share wallet penetration. We also enable our clients to see the approximate value of the savings they could realize by subscribing to the services. Recall that slide I showed you earlier. On our side of the same system, we show our sales team the revenue generation potential of those services if a client were to subscribe. That's what you're looking at now. It starts at the highest level and can be drilled down to a rep and a client view. This helps our account managers or our farmers, as David calls them, focus conversations on clients that have the best win-win profiles. We save them money, they generate revenue for us. We add up all that share wallet opportunity, it's a lot of annual net revenue white space, about $245 million worth of opportunity. That doesn't include the utilization that Raja just talked about, it doesn't include price improvements with inflation over time, it doesn't include the white space we gain when we convert a self-managed fleet or steal an under-penetrated client from a competitor. The last thing I'll say, which is also on the slide, is that EVs are proving a massive catalyst for client conversations about incremental change. This is gonna help share wallet penetration a lot. I'll give you an example. Telematics. Connected vehicles allow us to harvest more data about vehicle performance and driver behavior. Clients need us to analyze that data to determine if electrifying their fleet makes sense, and if so, which vehicles to start with. We are doing a ton of this work these days, there's no end in sight. We're selling a lot of incremental telematics units for gas-powered vehicles because clients understand and realize that they need that data to make an informed decision about transitioning to EVs. That's it for me. I'm gonna turn it over to my friend, Nick Verceles, who's a great sales leader, and he's gonna talk about stealing share from our competitors. Nick. Thanks, Steve, and good morning to all of you in the room and online. My name is Nick Verceles, and as Vice President and Head of North American Sales here at Element, my primary responsibility is new client engagement in the U.S. and Canada. I joined Element a little earlier this year, and prior to Element, I held a very similar role at one of the world's largest logistics companies. I have extensive go-to-market experience in transportation, supply chain, and technology, with a focus on meeting the complex needs of mid to large enterprise clients. Stealing share from our competitors is a critical growth driver for Element, and I'd like to share more detail and perspective about how we see the marketplace, our unique approach, and our confidence in continued success. Element has earned our position as the market leader everywhere we operate by doing three things. First, delivering a consistent, superior client experience. Second, delivering a global and scalable operating platform to our clients and our prospects, effectively the global marketplace. Third, being thoughtful and disciplined about our capital and resource allocation. As the industry leader, we are better positioned than ever to win a disproportionate percentage of the existing FMC market by fully utilizing our unique competitive advantages and capitalizing on unprecedented disruption. Our marketplace has evolved drastically in recent years and is now very different than the fleet management space that you might imagine. The theme on every front in all three of our geographies is that disruption that I just referenced. We've seen disruption for both our clients and prospects as they navigate macroeconomic challenges with supply chains, parts, and vehicle shortages. We hear every day about the disruption with our core competitive set as changes in ownership, acquisitions, and integration, and the challenges that we know come with those changes have become a reality for many of our prospects. When you combine all of those factors with economic uncertainty and an historic inflationary environment, we see a very active marketplace that affords us the unique opportunity to accelerate our win rates and steal share away from our competitors. What the sales teams do every day directly translates into our future results, and it is paramount that we maximize the team's efforts through a disciplined and data-driven approach. We leverage that data-first methodology to empower our people to hunt smarter, to hunt more efficiently, and to hunt more strategically. Our sales teams are enabled by focused investments in technology, as David referenced, just a few moments ago, to identify the right prospects and understand their behaviors, their needs, and to best position Element in front of those prospects at the right place and at the right time via the right channels, regardless of where they might be in their own buying journey. This approach yields opportunities both out of cycle as well as through traditional RFPs. We know the high-priority prospects and those that best fit our successful client profiles. They demonstrate strong credit quality. They are operators of mid to large enterprise scale fleets, and their fleets are comprised of service units that are mission-critical to their core business. When we do engage in RFPs, those ones are the ones that we intentionally invest Element's considerable resources into. All of the hard work that anchors our disciplined and data-driven approach ensures we are well-positioned and engaged with those important prospects well ahead of any formal bid event. In addition, we expand our research and understanding of prospects, our aperture, if you will, to include folks that understand the value of our differentiated offerings, such as Steve's SCS team and our electric vehicle expertise, which we'll hear a little more about later today. Finally, we leverage our market insights to prioritize prospects who are likely to be experiencing their own disruption with their current FMC, whether it's service levels, partnership, or just on overall performance. In those situations, specifically, our people and the industry-leading consistent and superior client experience that we deliver are particularly effective competitive advantages. This type of strategic focus increases the efficiency of the sales force and directly correlates to consistent increases in our conversion rates across the global commercial team. Before I leave this slide, I want to emphasize one more important point that speaks to the culture here at Element. Everything that I've covered is so much more than just a sales effort. It truly is an everybody effort. Marketing, sales analytics, strategic consulting, our partners in operations and credit, legal, finance, and so many more of our colleagues across the business work together to put winning new clients, and specifically stealing share, as one of Element's highest priorities. From my perspective, is one of the things that makes the company so effective at what we do and a key part of our winning formula. The combination of a disrupted marketplace, our consistent and superior client experience, and a disciplined and data-driven sales methodology has yielded very strong results. Year-to-date across our global footprint, we have stolen 77 clients from competitors, representing a 19% improvement year-over-year as measured in both vehicles under management and annualized revenue. Here in the U.S. and Canada, 71% of total sales pipeline added over the last 12 months are opportunities to steal yet more market share. We forecast that to be worth an estimated $190 million of annualized net revenue for Element. We've stolen share from all of our primary competitors in the U.S. and Canada in 2022, as well as from several others their clients had outgrown their former FMCs. I'd like to underscore that these gains are very meaningful. As you can see, as I just described, our new clients come from all of our core competitors, and they operate in a wide array of industries, from construction to fabricated goods, to transportation, to healthcare, even to government. We are truly winning across the board. Nowhere, I think it's important to underline that nowhere is this more notable than in our success winning back our former clients. Some of our largest stealing share wins in 2022 are former clients lost in 2016, 2017, 2018 that are now proactively returning to Element for all the reasons I've shared with you today. Our deep industry experience means that we know the value that we bring, where we excel, and the prospects that benefit most from our offerings. Those clients are looking for lower total cost of operating their mission-critical fleets. They're looking for stability, they're looking for expertise, and most importantly, they're looking for a partner who can help them achieve their most important business objectives. With Element's people, scale, and insights, we couldn't be better positioned to sustain our success. As I'm sure you read or heard as part of our Q3 disclosures earlier this month, we are making continued investments in commercial and competitive advantages to further distance Element from the pack. I think Jay's letter to our shareholders accurately captures what we're seeing in the data, and more importantly, what we're feeling across the global commercial teams. It really is, to quote Jay, abundantly clear that Element's pivot to growth has fully taken hold. Thank you all for your time today. My colleague, Manuel, will now shift the conversation from stealing share to another critical growth driver for us, which is converting self-managed fleets into Element clients. Manuel? Thank you, Nick. Good morning, everyone. Hi, my name is Manuel Tamayo, and I'm the Country Head for Element in Mexico. I'm here to talk about converting self-managed fleets into Element clients. It's a strategy that has its roots in Mexico, so I'm very excited to lead this conversation. I joined Element seven years ago as a Commercial Leader, and I've been the Country Head since 2020. Earlier in my career, I spent 10 years at GE Capital in the equipment finance business, looking at every type of assets, including vehicles, trucks, and other transportation equipment. I'm an engineer by training, and I have an MBA from IESE Business School in Barcelona. For me, converting self-managed fleets into Element clients is one of the most fun things to do because it's where we really show the value add that Element can provide. When we say self-managed, what we mean is clients who own and run their own fleets. Maybe they bake bread, maybe they service oil wells as their core business, but they always have a fleet of vehicles that they manage. It's either to deliver the loads into the stores or get the personnel into the wells. We go to these clients and we say, "You should focus on your core business and let us handle your fleet because we are the experts at it. We will show you the value that we can create, and together we will make your company more efficient and your fleet more profitable." It works because of the advantages Element brings to these clients through the scale and through the knowledge. There's a lot of room to roam in this area. By our estimates, about 55% of the fleets in the U.S. and Canada are self-managed, around 60% in ANZ, and almost two-thirds in Mexico. In the last six years, self-managed fleets has been one of our biggest growth drivers. It's where we have our largest growth rates. It takes time and effort. It requires a lot of interaction with the clients, going back and forth, showing the deep market expertise that we have, the deep industry expertise that we have developed. It's showing them the benefits and showcasing other clients' cases. In summary, we have to instill trust. In Mexico, we have a first-mover advantage. Other FMCs mostly go to clients that are already outsourcing fleet management. They will only steal share. We also steal share, but we actively seek self-managed fleets opportunities because we understand the value that an FMC can provide. Outsourcing a self-managed fleet is a really compelling value proposition in all of our markets. We can talk about lowering the TCO specific to different type of fleets, specific to an industry or even to each of our clients' business model. Element's balance sheet combined with our syndication capabilities in the U.S., Canada, and soon to come in Mexico, effectively provide self-managed operators with ready access to cost-efficient capital. Through a sale-and-leaseback transactions, we can also provide self-managed fleet owners the liquidity and the opportunity to downsize their balance sheet. We can talk about reducing the administrative burden. This is a subject that I really love discussing with all of our prospective clients. To give you an example, I have seen clients that to manage a 1,000 unit fleet, they need more than 20 dedicated employees. When we come in and we tell them that we would only need one or two employees, they just cannot believe it. We never fail to deliver in this kind of math because of their scale and our systems. Finally, we leverage our expertise in fleet electrification. It is something that has become really, really important in the last couple of years because it has opened many doors and started a lot of conversations. Most importantly, it's all about trust. Arc by Element has been a game changer in all of our markets. Nobody else out there has it. You will hear more about Arc by Avninder later today. Okay, to summarize, we show the client we can do things better than they're doing it with the benefit of the scale and the expertise that Element has. I mentioned that our self-managed fleet strategy has its roots in Mexico, and it's now the way we attack fleets everywhere in the globe. As David spoke about it, we started a commercial transformation in Mexico back in 2016. We identified that there was not a clear market leader in the fleet management industry, and that self-managed fleets was a very large growth opportunity for us. Many are of the growth targets that we identified were midsize or large corporations in Mexico, and they were often still family businesses. They managed their own fleets because they had been doing it all their lives, and they think they're the best at it. When we go and see them, their initial reaction is that if someone else is gonna provide the service, then the service overall is gonna be more expensive. We had to counter that. We developed an expertise within our sales team to have these conversations, do the analysis, and explain clearly to the client that we will lower their TCO if they come to work with Element. That meant changing the profile of our sales team. We identified that we needed to bring on people with a strong financial background, well-educated, and often MBAs. We needed to train them extensively. We also focused on building bespoke compensation plans to guide them and incentivize the right outcomes. These people are people that have a lot of motivation, who can sit in front of a CEO or CFO, or maybe sometimes in front of the owner of a company and have a very strategic conversation about their business. They demonstrated expertise in both financial and fleet management concepts and talk about it from the prospect's perspective. We also focus on value-added selling, it's not a conversation about price. The insights and best practices that we have developed and proven in Mexico have now been shared across our global businesses, and they have led to success in every geography we operate. The fundamentals are the same. Carefully screened sales reps who provided with extensive training. Those reps target C-suite decision-makers, and we focus on value-added selling. It becomes effective everywhere. Okay. Let's take a look at a case. There's a global confectionery brand that you would all know. They have approximately 4,000 vehicles in their fleet, and they were self-managed. They had around 20 full-time dedicated employees managing the fleet, and they thought they were doing it very efficiently. We came in and had conversations with different levels of the organization, because when you transform a self-managed fleet, you need supporters in different levels of the organization because there are a lot of connections to be made. We started talking with the HR people, then the sourcing team, and finally the finance group. We learned what worried them and where they saw an opportunity to do better. We started building a case, and 12 months later, we closed that deal. Today, because of the high level of trust that we have built with that team, they're a big promoter of us. We use their case when speaking with other self-managed clients to show them the value that we can bring. Summing up, we see a really big opportunity and a large unpenetrated market when we convert self-managed fleets in all of our geographies. Element's proven ability to lower the TCO is compelling, and ready access to capital can be especially attractive to self-managed fleets in a rising interest rate environment. We review the administrative burden, often affording clients the opportunity to relocate some of their internal resources previously dedicated to the fleet. With electrification growing slowly but surely, we can simplify and de-risk the journey for all of our clients. The prospect of managing a transformation from gas-powered to electric vehicles is especially scary for self-managed fleet operators, so they're very keen to talk with us about this thing. Finally, we have a differentiated and proven sales strategy, and we have staffed our commercial team across the business with individuals who can execute well on this strategy. For a guy like me that loves this kind of work, the outlook is super exciting. I will now turn it over to Chris Tulloch to talk about winning government and mega fleets. Chris? Thanks, Manuel, and good morning, everyone. I'm here to speak about winning government and mega fleets, the fifth and final organic growth driver. I'm Chris Tulloch, the country head for our Australian and New Zealand business, which operates as Custom Fleet in the local market. Little bit on my background, 19 years with the company, having been here when the Custom Fleet business was owned by GE and actually ran the sales process that resulted in Custom Fleet being purchased by Element. Process gave me a pretty good look at Element, and I liked what I saw, so I made the jump. I've had a broad range of roles over the course of my career, operations, large leadership roles, a bit of product and marketing, and even spent some time running deal teams. I took over Custom Fleet when our previous country head took a role outside of the industry, giving us leadership continuity in a strategically important geography. Let's define what we mean by government and mega and talk about the shared characteristics that lead us to approach them in a similar manner. Government fleets are, unsurprisingly, just that. They could be federal, state, provincial, or municipal. They could be government-owned agencies such as the police. Mega fleets are what the name implies, our very largest clients and potential clients. Government and mega share some common themes. They have long and specialized sales cycles. They often have unique requirements. They can bring chunky volume and there's lots of upside, but they don't come along every day. It's instructive here to focus on Aramark, the mega fleet that I think we are best known for. We are the preferred strategic partner to the operator of one of the largest fleets in the U.S. We manage the lion's share of that fleet's vehicles, both internal combustion engine and battery electric-powered vehicles. We are actively expanding our partnership into Mexico. The learnings from our four-year relationship with Aramark are invaluable to working with other mega as well as government fleets. Aramark gives us proof that we can create value in mega for ourselves, but also for our clients. They give us a growing strategic partnership. They give us invaluable experience, learnings, capabilities, and IP. I wanna spend a little bit of time on that last point. This is one of the best things about mega fleets in government. They are so demanding. They drive you to level up on things like service level agreements and key performance indicators. As a result, we get better and all of our clients benefit from that. I'll give you another example. In ANZ, we deal with a very large grocer. The reporting capability that we have built for that customer is absolutely best in class. Now it's something we've made available to all of our clients, and they benefit from that reporting capability. It's a little bit like an automaker racing in Formula One. All the technology you build for that race car trickles down to the sedans and minivans you sell to most of your clients. Now, not everyone has the resources to race in Formula One or compete in mega, but we do. We have the ability to make the necessary investments in data, analytics, and automation. Our competition often does not. Our scalability is also a competitive advantage because if you can't scale, you cannot do Mega and government. You just won't be able to handle the size. Now, you can try to fake it till you make it, and some of our competitors have tried, but that is not sustainable and will not work in the long term. Now, let's take a look at the opportunity set. Mega fleets clearly do not grow on trees, but we do have a lot of opportunities in the pipeline. In our pursuit, we're targeting some areas where Mega is common. One of those is last mile delivery, so we've made big investments around reporting and data infrastructure to ensure we are absolutely best in class in last mile. When you approach it in this more calculated way with value specific to that segment, it gives you a reason to have a seat at the table. We have two large last mile fleets in ANZ, for example, a lot of others in the pipeline. We've had some nice successes in government. Just last week, we executed the contracts formally closing our first U.S. federal government fleet deal for 2,800 new vehicles under management. Another example of our government success is one that I'm particularly proud of, which is New Zealand, where we have what's called a syndicated contract with the federal government. This means we are the fleet management organization of choice, we don't need to formally negotiate terms with any NZ government entity. The result is we can get deals done really fast, all the NZ government entities get to leverage the contract. Now we're in a good state of flow, we're taking down a new government entity each month. This is an extremely exciting area, I'll just wrap by reiterating why we are so confident that we can continue to sustain success in it. We've done what we've done with Aramark, which is no small feat, but also other mega fleets on our client roster that are less famous but equally demanding. It's not a secret in the industry that Element is capable of successfully delivering at mega scale. We have additional wings that give us the insight and the momentum. We have a patient and disciplined process grounded in experience. Thank you. With that, I'll turn you back to David. Thank you, Chris. Having heard all of these deep dives, I think you can really appreciate why am I so confident in our growth strategy and its sustainability. These are sound proven sources of growth, and it's also low risk growth. We're doing the same things we do today for the same kind of clients in the same geographies. We're just gonna steadily increase the number of clients we do it for, increase the number of vehicles we manage, increase the share of wallet on those vehicles. Our commercial leadership is strong and focused. Our advantages are unmatched by our competitors. We've done the hard work of overhauling our commercial functions. We have the right people, the right processes, and the right systems for success. We have everything it takes to grow 6% to 8% a year organically for the foreseeable future. I look forward to your questions at the end of the morning. Now let me pass the mic to my colleague, our Chief Operating Officer, Jim Halliday. Thank you. Morning. For those of you I haven't met, I'm Jim Halliday. I'm our Chief Operating Officer, and I'm here to talk about our scalable operating platform. Over the next 30 minutes, you'll hear how we transformed operations, sustain it to Element's competitive advantages, and magnify organic revenue growth into higher rates of operating income growth, thereby expanding operating margins. First, a quick bit about me. As the COO, I'm responsible for our global operations across all 5 of our geographies, our global service P&Ls, our EV strategy, and offerings, our strategic procurement and supply chain functions, and our end-to-end business lines in ANZ in Mexico. I've been a leader in the fleet industry for over 1five years. I've worked in operations, business development, global alliances, commercial, and as the CEO of PHH Corporation, which is one of Element's key acquisitions. Today, I'm gonna provide you a high-level overview of what we do and show you how our transformed, scalable operating platform gives Element unmatched capabilities. I'll turn it over to my colleague, Germán Piderit, our Head of North American Operations. Germán will provide you with a deep dive on our managed maintenance services, which is our largest service offering by revenue and operating income. After that, I'll come back and double-click on our investments in automation and our North American vehicle ordering platform. There'll be a 15-minute break, so everyone can get some coffee, refuel, and then we'll resume presentations with Frank, our CFO, and then move into our Q&A portion. First of all, what we do. From a client's perspective, Element is an indispensable intermediary. We aggregate third-party services that are necessary to operate fleet vehicles, and we add value by managing those services and making the complex simple for our clients. For the record, the items on the slide over here are not an exhaustive list of all the services Element provides. If you think about your own personal vehicle, and you think about all the things that you do to keep that vehicle drivable and safe, we help our clients do all of that and more. When it comes to the larger commercial vehicles that we customize for specific applications, medium or heavy trucks or material handling equipment, all of them come with different speccing, configuration, and servicing needs. Our deep team of specialized experts work with our clients and their operations teams to truly make the complex simple, including supporting various government-legislated on-road compliance mandates. Important for clarity, Element performs very few of these services directly. We don't own garages or auto body shops, we don't employ directly mechanics or welders. We have relationships with third parties, providers, which include all of the traditional OEMs, upstart OEMs, and tens of thousands of vehicle-related businesses across our footprint. These relationships are a competitive moat or a barrier to industry entry, even within our industry, they're a big competitive advantage for Element. I personally think our relations with OEM across our service supplier networks are a hugely underappreciated competitive advantage for Element. Part of the reason we have the biggest and best network in North America because of the large number of vehicles we manage. We manage the largest number of vehicles of any FMC. We oversee billions of dollars of spend by clients on their behalf. Service suppliers obviously want to work with Element to benefit from that volume, our clients' drivers benefit in turn. Many suppliers offer value adds for Element, clients, and their drivers, such as first in line service, online preferred scheduling, differentiated hours of operation, mobile service, pickup, and drop-off service, just to name a few. Element and our predecessor companies have spent decades fostering and nurturing these relationships. My colleague, Jacqui McGillivray, our Chief People and Social Impact Officer, will tell you later this morning about what we call diverse supplier network. This is something we're really proud of. In the context, diverse supplier means small and not so small businesses owned by women, BIPOC, members of the LGBTQ+ communities, and veterans. We have thousands of diverse suppliers in our network, and we truly make it easy for our clients and their drivers to choose these diverse suppliers through our app and other digital channels. In addition to having spent decades building our supplier networks, more recently, we spent millions of dollars fully integrating many of these networks directly into Element systems to better support our clients and their drivers. Digital integration gives us unmatched capabilities that principally fall into two categories. First, the ability to measure integrated suppliers on everything from the client and driver experiences to their transactional performance. We do this in a number of ways. We have scorecards to keep for every key supplier in our network, and in order to stay in our network, service suppliers have to deliver on speed, reliability, and value metrics. We compare suppliers like for like and give them regular feedback on things like driver satisfaction, uptime performance, and a host of other KPIs. Integrated networks enable our clients and their drivers to connect directly with our service suppliers. This direct access allows clients and their drivers to self-serve in many cases, which clients ask for, and we've invested to make happen. A great example of direct access is our vehicle ordering platform, which I'll tell you more about shortly. By nature, direct access and self-service capabilities are scalable. These capabilities also free up our people to focus on value-added work, like advising clients on better ways to do things, rather than tasks like data entry. All the information exchanged through these digital integrated networks gets captured by Element and leveraged by our strategic consulting team, as you obviously heard from Steve this morning. The lion's share of transactional communications facilitated by Element to and from the client, the driver, and suppliers happen automatically through this robust digital platform, which allows for digital de-detailed tracking, scheduled follow-up, and automated communication. Because of the investments and the focus on tech enablement, digitalization, and increasingly automation, we have a scalable operating platform that supports growth with a low sustaining CapEx requirement. In short, we make the complex simple for our clients. It wasn't always that simple for Element. Our industry-leading platform today is a hard-earned product of the intense work we undertook from September 2018 through December 2020 to transform the client and driver experience. During those 27 months, we literally took our operations back to the studs. We streamlined our processes, our policies, and rebuilt many systems across the organization. We focused on simplicity to ensure consistency in our service delivery, which is a critical component to be successful in fleet management. Importantly, everything we did in transformation was designed to scale, and we cemented that scalability into the platform. The result is best-in-class operations, magnifying net revenue growth into higher rates of operating income growth. As you'll hear from me more in a bit, there is still a lot of opportunity for improvement to our operations. What we have in place today is delivering value for our clients. Our client's segment metrics and transaction effectiveness KPIs tell us so, and most importantly, as David and the team noted, our winning and retention rates are proving it. This success gives us confidence that we can do more and even get better results. Our suppliers are highly engaged in supporting our commitment to our clients and their drivers to further improve and differentiate Element's client experience. In short, we know where the opportunities for improvement are, we know what to do, and we know how to go about doing them. I want to switch gears. I'm going to talk about two of Element's three competitive advantages, specifically in the context of operations. The first is our people and their delivery of a consistent, superior client experience. When you hear us talk about Element's people, process, and systems, that's in the order of priority. Our people come first because they are responsible for Element's success to date and critical to our continued success. The size and the scale of our business affords us the ability to hire great people. We have subject matter experts in everything from vehicle field engineering to upfitting to heavy truck resale. The list goes on. We have product specialists for every service we offer. A specialist mandate is to add value to our clients' experience, supporting their and their drivers' goals and objectives. All Element employees are trained on the client service culture. This is mandatory at the same level of importance as compliance training at Element. Reinvigorating this proactive service culture was another key component of transforming our operations. As Jay shared with you off the top, our clients consistently identify our people as Element's greatest competitive advantage and differentiator. This underpins all five of the revenue growth drivers that David and his team talked about earlier. The second of Element's competitive advantages that I want to highlight in the context of operation is our scale and the unrivaled purchasing power, service supplier networks, and data that comes from managing 1.5 million vehicles across five countries. I think the best way to do this justice is a deep dive we prepared for you on our managed maintenance services. I'm now going to turn the floor over to Germán Piderit, our Head of North American Operations. Thank you, Jim. Good morning. My name is Germán Piderit, and I have the privilege of leading the operations team for our North American clients. My mandate is to ensure the seamless delivery of a consistent, superior client experience out of Element's scalable operating platform for our clients, their drivers, and our service suppliers. We were supposed to have our longtime Vice President of Managed Maintenance, Kim Bolen, here to present to you. Unfortunately, she was not able to join us today. Thank you for giving me the opportunity to present today. As Jim said, perhaps the best example of Element scale advantage is our managed maintenance service offering. When a client subscribes to our managed maintenance program, they're seeking increased asset productivity and management of maintenance expenses for both proactive and reactive repair events. We offer tailored consulting on tactical strategies to ensure our clients' drivers stay compliant with our preventive plans. Clients also expect an effective real-time and transparent process to optimize their maintenance spend, extend the life cycle of their vehicles, and maximize the value of their vehicles on resale. As you can imagine, extending the usable life of vehicles has become particularly important to our clients during the ongoing OEM production delays, as scarce new vehicle inventories have forced emphasis on getting more miles out of the existing fleet. Our managed maintenance services are also about ensuring driver safety because a poorly maintained or unrepaired vehicle is inherently less safe to operate. How does Element ensure we're the premier FMC when it comes to managed maintenance services? Part of the answer lies in the cycle of reinforcing benefits that Jim described earlier. Element scale gives us purchasing power, which benefits our clients' total cost of fleet operations, or TCO. Our market ability to lower TCO attracts more clients to Element, thereby increasing our scale-based purchasing power. As Raj showed you earlier, we drive business to our suppliers within our network because it's less expensive and more convenient for our clients and our drivers. With more vehicles under management than any other FMC in our markets, we can drive a lot of business to our suppliers in our network. This makes working with Element very attractive to suppliers, which in turn increases the size and quality of our service networks. All the while, we're collecting, organizing, and analyzing the resulting data to benefit our clients and their drivers going forward. In the managed maintenance space, vehicle uptime is partly a function of timely and speedy performance of preventive activities, such as oil changes, tire replacement, and brake inspections, among other things. Element clients are the beneficiaries of the largest certified network in the U.S. and Canada. We make it as convenient as possible for our clients and their drivers to take care of their vehicles. It's my understanding that investors sometimes ask, "Why don't the OEMs themselves go into the fleet management business?" I have also heard and read about upstart electric vehicle manufacturers with the ambition to provide 100% of the maintenance to their vehicles themselves. For several reasons, our clients would have little interest in working with an OEM captive fleet management company or relying on the manufacturer alone for vehicle maintenance services. The simplest reason, convenience. Let me show you the service garage footprints of each of the 5 largest OEMs that Element works with in the U.S. and Canada. The green dots are maintenance locations, and the darker they get, the more locations there are. Here's Nissan's footprint. Here's Toyota's footprint. Stellantis, Ford, and General Motors. Combined, these 5 OEMs have a dealership service network of approximately 12,000 locations. Our supplier network in the U.S. and Canada for managed maintenance alone is approximately 60,000 locations, or 5 times the size. We also provide our service suppliers with 24/7 access to certified maintenance specialists here at Element who can advise on and guide the repair process when needed. We manage the cycle time for every step along the way, from preventive notifications to in-app shop and search recommendations, as Raj showed you earlier. Of course, we also take care of our clients' drivers by providing roadside assistance when needed and interim vehicle rentals to maximize our drivers' uptime if their primary vehicle is undergoing lengthy repairs. As you've heard, our scalable operating platform allows to grow operating income at a higher rate than net revenue. With respect to Managed Maintenance, we achieve this operating leverage in part due to our technology. We have a single integrated digital platform. We have been adding our maintenance service suppliers, our clients that subscribe to our Managed Maintenance, and their drivers onto this platform over the last several years. The strong adoption of our platform by all the stakeholders has been the key to our operating leverage. Approximately 90% of our maintenance service suppliers and 100% of our subscribed clients and drivers are on board the platform. This has enabled an ongoing shift from voice transactions to real-time online transactions with our service suppliers, and very soon, with our drivers. The mix shift from voice to digital and the richness of data being captured has allowed us to focus on our people on more value added responsibilities, thereby increasing productivity by some 35% while developing new insights and capabilities for our clients. As you already heard this morning, Element's ability to harvest insight from big data is powerful. For instance, we have improved our ability to detect spend patterns that do not align with fleet's benchmarks. We can then add value by digging into the discrepancies and advising our clients on corrective actions. We're also able to identify for our clients which drivers are experiencing the most vehicle downtime and triangulate potential root causes. When vehicles are in the shop, we review repair work orders within minutes. Based on policy, vehicle history, we approve or decline work orders and share recommendations with the client. We monitor the status of each approved work order through automated follow-ups and identify outliers in the process, which we proactively engage to resolve. Today, 82.4% of our maintenance repairs are completed within 24 hours of approval, and 65% are completed in less than four hours. On average, Element clients enrolled in our managed maintenance program save over $200 per vehicle per year on routine maintenance expenses alone. The third category of reasons why we're the best provider of managed maintenance services is accountability. This principle is a foundation of all our service offerings, and it's fundamental to the way we work at Element. Services revenue category leaders in every geography have standalone P&Ls, driving accountability for operating margins on their products. In my experience, this ownership structure drives the right behaviors. It ensures each product leader stays connected to their clients' and drivers' needs. This leads to investments in the right areas of operations to maximize the benefit of all our stakeholders. There's ample proof of the success of our managed maintenance program in the U.S. and Canada. 80.5% of subscribed client vehicles are actively utilizing our maintenance program. This figure is up from 77.1% last year. Client satisfaction has improved by 200 basis points this year compared to last year. Our driver population has rated us either a four or a five-star rating 96% of the time. This response rate is based on 350,000 transaction survey responses year to date alone. Maintenance services revenue has grown 21% from Q1, 2021 to Q3, 2022. Operating margins on managed maintenance have grown 29.1% when compared to our pre-pandemic period in 2019. Most importantly, we're on pace to save our clients over $100 million this year on maintenance expenditures in the U.S. and Canada. This represents a 20% improvement over last year. These client savings cover the cost of their managed maintenance enrollment fees several times over. I'd like to thank you for spending time with me to understand the scale and strength of Element's capabilities on this front. Jim, I'll pass it back to you. Thanks, Germán. Well, I hope that gives you a sense of how our focus on scalable and service manifests itself in the delivery of a consistent, superior client experience, both for our clients and their drivers. Managed maintenance is the first advance at Element in terms of digitalization, tech enablement, direct client access, and automation. It's not the only piece of our business we've advanced in that direction. Progress is being made across our platform, there's probably as much or more opportunity for operating improvements ahead of us as we've captured so far. I wanna double-click on automation as I promised. You heard some of the benefits in Germán's presentation. We've implemented automations in close to 100 places now across the operating platform. Everywhere we've been able to do this, it has driven down our cost to serve and, in most cases, materially improved the client experience. Automation reduces the need for human intervention, it lowers the number of clicks or steps required, and it also automation also maximizes our reliability. It's one of the key reasons we're so confident our Net Promoter Score and CSAT scores will continue to rise. To say we're still in the early days of realizing on the potential of automation in our business would be an understatement. Mastery and deployment of AI-enabled service solutions are a North Star at Element as we continue to look for opportunities to deliver more robust and effective solutions for their clients and their drivers. It's exciting stuff. The early work we've put in place so far in all of our geographies, we've made significant contributions to the bottom line. We expect to continue to drive strong results here in 2023 and beyond, as we gain more experience and test new applications in AI and related technologies across the enterprise. Okay, the other double-click, I promise, is on our vehicle, North American vehicle ordering platform. This is an example of the benefits of enabling direct client access. Not so long ago, new vehicle ordering was a clunky process and a material pain point for our clients. Orders took a long time to place, would be too hard to track, and would require a lot of interaction with our team, OEMs, upfitters, and dealers. Candidly, at the start of transformation, it was a retention issue. Clients would get so frustrated that they became a risk of leaving. We've rebuilt our ordering platform over the course of the last four years to be more or less self-serve for clients and highly digitized for all stakeholders. This has certainly helped us even more given the recent OEM production delays. The ordering process still begins with a consultation by our vehicle ordering consultants and engineers supported by our strategic consulting team. They perform needs analysis and use case scenarios to determine the right types of vehicles and features required. In many cases, we design customized upfit packages to support the client's business needs. They get all the value of that data-driven insight up front. After that consultation period, a client can then log into the ordering platform themselves, review the makes and models for their particular application, review the ins and outs of each of the choices right on screen, and ultimately place the order. The system even ensures appropriate approvals are secured digitally upstream within the client organization, saving them countless hours of back and forth email. Where permitted, where permitted by the client's policy, the driver can even select options all done digitally through the system. They can track their orders throughout the entire process, from scheduling to production, to upfitting, to delivery. Of course, our expert team's there all the ready to help them with complicated orders and any other questions that come up in the process. To give you a data point, this is an important data point, for clients on board the ordering platform, 90% of the orders are directly placed with OEMs by the client. This is 6 times the number we'd seen under the old system. Because of that, clients have more visibility and are highly satisfied. We've removed most of the back and forth friction points in the ordering process amongst all the stakeholders. As a result, we're able to scale ordering massively. We have very little incremental cost to go from, say, 150,000 orders to 1 million vehicle orders. It's easier for the client and their drivers. It's what they want, and it's better for us. You can imagine what scalability like that will do for improving margins in this area of the business as we continue to grow. All right. That's a great way, segue into my conclusion. Element's operating margins have expanded significantly since our transformation. That's a credit to all of my colleagues across all of our geographies. Because of what we've done, we're seamlessly supporting Element's growth. We're continuing to invest in digitalization of our service supplier networks to get every product to where managed maintenance is today. We are continuing to invest in automation, direct client access innovations like our ordering platform. Of course, the difference makers are people. We've come a long way. We're not stopping. We believe there is much more value to capture for our clients in Element across our operations. We'll continue to make key investments here. Importantly, these are all modest investments contemplating our existing CapEx outlook, but they are very high ROI because the result is an increasingly scalable operating platform and even more consistent, superior client experience. All right, that's the end of this segment. We're gonna take a 15-minute break, and after that, our CFO, Frank Ruperto, will talk about our capital lighter business model. Thank you. [Music background]. Hi, everyone. To begin the second half of our event this morning with a discussion of Element's capital lighter business model, please join me in welcoming our Chief Financial Officer, Frank Ruperto, to the stage. Welcome, good morning, everyone. I'm Frank Ruperto, Element's Chief Financial Officer. I joined Element in January of last year from Rayonier Advanced Materials, a New York Stock Exchange traded company, where I was the CFO for five years, then I ran their core and largest business unit. Prior to my time at Rayonier, I was an investment banker for over 20 years, with the last 16 at Merrill Lynch and Bank of America. When I first joined Element, there was some sensitivity around appointing a former M&A banker as CFO. I guess we worried that the market might think that Element was returning to its roots as an acquisition story. In reality, the opposite was true. What most attracted me to Element was the sizable, low risk, organic growth opportunities the company possesses. As an investment banker, I saw firsthand how hard it is to successfully identify, execute, and integrate M&A opportunities that create long-term value. Many companies are compelled to pursue this path because an organic growth runway can be very elusive. Not so in this industry, and specifically, not so for Element. If today has demonstrated anything, it's that our organic growth story is so rich that M&A would be an unnecessary risk and distraction. Our scalable platform is more than capable of supporting growth, and our capital lighter business model is highly investor friendly. What I spend my time thinking about is how to drive growth, manage costs, optimize our balance sheet, and return capital to shareholders. We have an efficient free cash flow generating model with resilient, reliable, recurring revenue streams. Our platform is scalable with minimal capital investment requirements, so there's no need to keep a lot of cash on hand. That's why you've seen us increasing our committed return to shareholders via our dividend while also renewing our NCIB. These are really exciting dynamics for a CFO. Another CFO friendly attribute of our investment grade is our investment grade rock solid balance sheet. We have diversified funding model with access to multiple debt capital markets, including securitizations, bank funding, and public debt markets. The maturation of our business has allowed us to significantly reduce our funding costs while optimizing the size of our various facilities, all while maintaining significant liquidity to fund our growth. Now let's talk about the pillars of our capital lighter business model, services and syndication. Starting with services. There are four at key attributes we admire about services revenue. First, services revenue is capital lighter because it requires only the networking capital to support growth. In other words, as we sell more services, we only need to advance the payment to suppliers until we are reimbursed by clients. Service revenues require a fraction of the capital that financing revenue does and is higher ROE. Let's think about holding a lease on balance sheet. We have to hold over 12% of the leased assets value in retained earnings to manage our balance sheet leverage. For services, we need only to support the working capital, which requires less than 2% retained equity. Second, service revenue is attractive because it's subscription-based and annuity-like, representing a recurring revenue stream. Third, services are where we have the biggest competitive advantage due to our client experience, our people, and our technology, thereby cementing client relationships. It's more difficult to distinguish yourself on the financing side, except with lower rates. Our money is no different than any other financiers. It's no greener or bluer or redder, depending on whatever country you're in, but our services are very differentiated. Fourth, Element services revenue, our share of wallet, is a small fraction of our clients' investment in their fleets. As you've heard, we have ample opportunity to expand that share by providing clients more services for each vehicle as we demonstrate our value add. With financing, we can provide our clients only one lease per vehicle. Let's talk about syndication, which is both capital lighter than net financing revenue and economically superior. I'm conscious that not every investor who may hear this will have had exposure to syndication. Let's just set the table by talking about what we mean. Syndication is our process of taking the future cash flows from leases that we originate and selling those for their present value, thereby accelerating revenue and cash flow. We sell the buyers who are attracted to the yield, and in the U.S., the favorable tax treatment that comes with the vehicle leases. The buyers are often large financial service companies such as banks and insurance cos. These companies have low cost of capital and need low-risk assets that come with predictable cash flows, which we have in large quantities. What you also need to know about syndication, which I will illustrate a bit later, is that it has materially enhanced our results. Syndication is capital lighter because when we sell a lease asset, we no longer need to retain equity on our balance sheet to support the underlying debt funding the lease. Instead, we receive the cash up front, we can use that cash immediately to invest in our business or to return it to shareholders. Syndicating leases can be economically superior because put simply, there are buyers who will pay more for those lease cash flows than they're worth to Element. For a bank or insurer with a low cost of capital, the net present value of the future cash flows on a lease is greater than it would be for Element. That's the fundamental arbitrage that makes syndication economically superior to holding certain leases on our balance sheet. When do we syndicate? When it's economically superior, which is often. We start by always rating leases that we would be comfortable holding on our balance sheet. We look to see if syndication yields are superior and allow us to enhance the economics, which is often the case. When we syndicate, we also monetize tax benefits associated with the ownership of the vehicle, the depreciation tax shield. These benefits would otherwise go unrealized by Element for many years, but can be used immediately by our syndication investors. Always, our syndication strategy is guided by the imperative to maintain our investment-grade balance sheet, which we monitor through a target tangible leverage range, as well as the tax optimization considerations of our portfolio. People often ask, "How much can you syndicate annually?" Then this then leads to a question of how deep is the syndication market? In short, it's very deep. At between $25 billion and $30 billion of annual volume. We've experienced consistent demand for our assets over the years because they are very attractive. They are backed by lessors, our clients, who have both the ability and the propensity to make their lease payments. Our clients are strong credits whose revenue streams depend on the mission-critical assets that we lease them. Our nearly nonexistent losses on our lease portfolio are enviable, with low single-digit basis points loss rates as a percentage of lease receivables. I saw all of this firsthand when I was at the Equipment Leasing and Finance Association conference in San Antonio last year, roughly 10 months into my tenure at Element. I had a few key takeaways. First, investors were surprised at our ability to syndicate such a large volume of lease assets. Second, they were complimentary of our use of technology and the resulting capabilities. Third, they all wanted to make sure we were aware of their significant interest in our assets. That's qualitative proof point of the market for our leases. A quantitative proof point is that we continue to grow the volume of assets we syndicate year after year, and at attractive yields that remain economically superior to holding such assets on our book. This is no accident. The syndication market is an auction market. Knowing your buyers, targeting specific assets to multiple parties, and thereby creating demand allows us to generate strong pricing. We have grown our roster of syndication partners over fivefold. We have long-standing and strong relationships with those buyers. When we have an asset to syndicate, we have the market experience to know exactly the five or more buyers who most highly value assets of that profile. We can also get reads on the market in days on client names that have never been syndicated. This is because buyers trust us to know the types of credit quality and assets that they want. A little history is in order here because we haven't always had these capabilities. As some of you know, this management team didn't start at the helm with the idea that syndication would be important to Element. It began as a means to reduce concentration risk when we had large exposure to single client names on our balance sheet. We began our strategic relationship with Aramark, becoming their fleet manager. As a result, we needed to solve for harnessing the profitable service revenue of a mega fleet without the significant financing exposure and portfolio concentration. To that same mega fleet. The answer, of course, was syndication. The financial benefits of syndication for Element quickly became evident, as did the fact that there was a real market appetite for our assets. As a result of learnings from syndicating significant Aramark assets, we started syndicating other highly rated, attractive assets. Again, we saw the significant demand. We broadened our syndication efforts down the credit curve while working hard to expand the number of buyers and drive that auction market. That's now evolved into doing deals across the credit spectrum and for portfolio of assets. Banks don't wanna do small deals, we have packaged together portfolios to allow us to monetize a broader array of assets. This just speaks to our expertise. It's relatively easy to sell cash flows from a name brand rated client to buyers, smaller non-investment grade assets are more difficult. We've also grown geographically into Canada with six transactions to date and are actively evaluating Mexico. These markets deepen the pool of syndicatable assets while providing the ability to enhance geographic diversification. We've done this by building out our team and our capabilities. Today, we have the ability to do a robust side-by-side securitize versus syndicate analysis on every single deal, so our decision-making is driven by economic return. We have an experienced team with a proven track record, both at Element and at prior institutions with large equipment lease finance syndication efforts. We have the ability to create competition for attractive assets and to optimize pricing. We do this by obtaining multiple competitive bids for virtually all of our syndication transactions. We ensure our clients are not exposed to syndication because we are the facilitator. The client never deals with anyone but Element. Finally, we have the ability to hedge incoming leases to protect yields in this volatile rate environment. As our capabilities have grown, so has our execution. We estimate we will syndicate $3 billion of volume this year, 6x what we did in 2018. We'll have the ability to ramp volumes approaching $5 billion if desired with little incremental cost. To drive home the benefits of syndication, here you see our syndication volume since 2019. You see our pre-tax ROE over the same period and our return of capital, which has largely been enabled by syndication. You can see the clear correlation and how it supports enhanced ROE and our buyback activities. Here's another perspective that shows what a difference syndication has made. Absent syndication, our full year 2022 adjusted EPS would be $0.13 lower than guidance. Free cash flow per share would be $0.14 lower than guidance. Pre-tax ROE would be 15%-16% instead of the 18%-19% we are anticipating. Importantly, we would have been able to repurchase virtually no shares versus our repurchase of over 12% of our common share capital since this time two years ago, and still maintain those comparable investment-grade leverage parameters. The difference is stark and drives home the wisdom of the decision we made three years ago to grow our syndication program. It's a pillar of our capital-lighter business model. It's enabled accelerated growth, and it has driven significant shareholder value. I'll just pull back the telescope to talk about our results more broadly. I'll step through our financial performance since 2018 when this management team took the helm mid that year, and I'll look ahead to our new 2023 guidance that we introduced earlier this month. You can see the significant growth we generated across all financial metrics with 7% CAGR in net revenue and over 20% CAGR in free cash flow per share, all while enhancing operating margins by approximately 14 percentage points and lowering tangible leverage by over 2 terms. We anticipate this solid performance to continue, if not accelerate, as we raise our long-term outlook to 6%-8% organic net revenue growth upon our scalable platform, driving attractive 2023 financial guidance metrics. The takeaway here is that Capital Lighter is driving really strong results, and we have real runway to keep the momentum. Now I'll hand the stage to Jacqui McGillivray, our Chief People and Social Impact Officer, who oversees our ESG program. Thank you. Thanks very much, Frank. It's great to be here to speak about ESG and the journey we're on. It really is a journey. Although it's still early days for us, I love looking back at where we started from. Not only do I see the progress we've made, but I see that same progress aligned with our values. When we think about ESG at Element, it's not about ticking boxes. It's about being accountable and transparent with all our stakeholders. Before we dive further, I'd like to introduce myself. As Frank said, I'm Jacqui McGillivray. I joined Element four years ago at the start of our transformation as head of HR. Before Element, I led leadership roles in some key blue-chip Canadian companies such as RBC and Cenovus Energy. Today, I'm Chief People and Social Impact Officer at Element. In my role, I oversee Element's global balance scorecard, human resources, communications, and ESG, as well as our diversity, equity, and inclusion efforts. While we're early in our ESG work, we have made some significant strides. I'm gonna take a few moments to highlight some of our key results, those that are internal to us, and then share what sustainability means for Element and for our clients. Following that, Avninder Buttar will come up and talk about EVs. EVs are a focus for us because electrification really represents our biggest sustainability opportunity long term. Let's start with governance. Prior to transformation, we were seen as a laggard on governance. Today, we are recognized as a top performer in Canada. In 2021, we were tied for first place in The Globe and Mail's influential board games analysis. Moving to social, we are driving real change. Diversity, equity, and inclusion is a focus at Element. First, we're intent on delivering equal pay for equal work. Each year, we assess and address differences in pay for our people performing the same role at the same level. Second, we set annual goals to advance diversity representation in our workforce. In 2021, we exceeded both our diverse hiring and internal promotion goals. 2022 is trending the same. Third, we target an employee engagement score of 80% or higher annually. I'm proud to say that we've exceeded that goal for a fourth year in a row. Specifically, over 90% of our people participated. We received an engagement score of 82%. We're as proud of the participation rate as we are of the engagement score. I mean, the fact that 90% of our people took the time to complete the survey shows the trust that they have in our leadership team, that we take their engagement seriously. All of this reflects the strong social fabric of our company. When it comes to community impact, we focus on making a valuable contribution to the communities in which we live and work. Our people are active volunteers, and our donations focus on education, environment, and disaster relief. Finally, on the environmental front, our focus is now on inventorying our GHG emissions, which includes Scope 1, 2, and 3. Means starting with the data. Not only will this data create a benchmark for us and enhance transparency in reporting, it will also inform our view on where we focus our efforts for the greatest impact. How we respond to this data will help map our environmental journey for years to come. Let's turn to sustainability. Sustainability has been a focus of Element's business all along. That's because sustainability is a focus for our clients with respect to their fleets. We recognize that the greatest impact on the environment comes from the services we provide to our clients. This is where supplier diversity, which Jim spoke to earlier, comes into play. We've expanded our network to over 4,700 service supply businesses that are owned by women, BIPOC, members of the LGBTQ+ community, and veterans. These businesses received over $1.5 billion of our clients' fleet spend in 2022 year to date. You also heard that we launched a tool for drivers that enables them to select from a wide range of diverse suppliers. This tool makes it easy for clients to direct their fleet spend towards diverse suppliers and helps the drivers support local communities. We've automated our reporting on diverse suppliers for clients. This way, clients can track how they're doing against their own ESG goals. When we think about sustainability at Element, it's really about doing the right thing and enabling others to do so as well. To that end, we're proud to share the commitments that we've made. One, we joined the UN Global Compact. This represents a company-wide commitment to take actions that advance societal goals. That could be whether it's human rights, labor, the environment, and anti-corruption. Two, we maintained our Silver sustainability rating with EcoVadis. Three, we joined the Corporate Electric Vehicle Alliance. This is a group of companies that share a united focus on accelerating the transition to EVs. Helping clients make their fleets less carbon-intensive magnifies our own impact throughout all the vehicles that we manage, and it lines up perfectly with our value proposition of making the complex simple. The EV transition is well underway, and that's gonna be the case for years to come. At Element, we're determined to be the leader in our industry by providing valuable insight and support to our clients as they transition their fleets from gas to battery-powered vehicles. I'd like to now invite Avninder Buttar, our head of EV strategy, to tell you more about that. Thank you, Jacqui. I'm pleased to be here. I know it's been a packed morning, we thought sustainability and EVs would be a nice way to wrap up the formal presentations before we move on to questions. As Jacqui mentioned, my name is Avninder Buttar, and I'm the Vice President of Strategy here at Element, having joined in late 2020. I'm responsible for Element's global EV strategy, our telematics offerings, and our overall product strategy. Prior to Element, I worked in various strategy functions at organizations like Accenture and Hudson's Bay Company. My role at Element allows me to merge my passion for sustainability with my experience in corporate strategy to help affect positive change. Here's my hypothesis. Element manages 1.5 million vehicles. If we can get those to zero emissions over time, that is a material positive impact on the environment and progress towards global decarbonization. This helps me wake up with a purpose and a smile on my face every single day. Both Jacqui and Jim discussed one of the ways we help our clients meet some of their broader ESG objectives, which is through access to diverse supplier networks. I'm gonna focus on GHG reduction and, more specifically, fleet electrification. Element is the best-positioned FMC to lead our industry through the gradual electrification of automotive fleets for three reasons. First, we're the market leader everywhere we operate, and we enjoy the competitive advantages you've heard a lot about already this morning. Second, we've invested in establishing and maintaining our pole position by standing up a dedicated EV strategy team, which I have the great fortune of leading. We are a 10-person team with members located in all three Element operating regions, and we have backgrounds and expertise in charging infrastructure, energy management, sustainability policy, and product development. We are also investing in strategic partnerships and service supplier network expansion, which I'll say more about shortly. The third reason Element is best positioned to lead the fleet management industry on EVs is because we've been focused on helping our clients meet their sustainability goals for decades. There was a time when more sustainable fleets meant replacing vehicles powered by eight-cylinder engines with six-cylinder engines and then four-cylinder engines, all to reduce fuel consumption. More recently, we've helped our clients into hybrid electric vehicles and continue to do so. As Steve mentioned earlier this morning, another relatively recent sustainability push with our clients has been equipping their vehicles with telematics. This yields vehicle performance and other driver behavior data for Element, which we can then turn into actionable insights for our clients. For instance, to reduce fuel consumption, many drivers should reduce their idling time in the vehicle, or their daily route should be changed to optimize fuel efficiency. The other important thing about telematics is that we need a solid baseline of data about a client's gas-powered fleet in order to perform thorough analysis and identify optimal vehicles to electrify from both an operating rhythm and a total cost of operations perspective. The biggest leap we can help our clients make towards materially reducing their GHG emissions from fleet is the wholesale transition to electric vehicles. This transition is going to be taking place for a long time. That's because successful fleet electrification requires a combination of readiness factors to be met. Beyond electric vehicle purchase price considerations, which continue to be a concern for our clients, in order to begin electrifying, clients need to have a workable strategy for how they're going to keep their electric vehicles charged, a change management strategy for how they're going to introduce these vehicles to their drivers, and an understanding of the capabilities and limitations of these vehicles compared to their gas-powered equivalents. This gets complicated because, for instance, an EV is going to perform differently in the summer in Houston, Texas, than it's going to perform in the winter in Northern Alberta. As you know, the majority of the vehicles we manage have some form of customization or upfit done to them. This can add thousands of pounds to the vehicle weight. Think of custom steel racking structures or custom hydraulics. That's going to drastically impact EV performance. There's the complexity of managing reimbursements to drivers who charge their EVs at home, and the complexity of applying for and receiving the maximum available EV incentive dollars to minimize the capital cost of these vehicles. The list goes on. Fortunately, Element Specialty is making the complex simple for our clients, and we've done that on the EV front in the form of Arc by Element. This is a global program that is designed to support clients all the way from piloting a handful of EVs in their fleet to wholesale electrification when the client is ready and the vehicles are available. While the offering is global, it is not a one-size-fits-all. The capabilities are market-specific to reflect the nuance, a regional nuance, around suppliers, client focus, and pace of change. With Arc, we are evolving our expertise across the EV product spectrum in real time. We are ensuring that we stay on top of the rapid innovation happening in this space so that our ability to advise clients is never out of date. Here's how we do EVs best. First, we are focused on strategic partnerships. This means working with players who have the scale, the capital, the experience, and the vision to persevere and survive through these early days in this emerging sector. Second, we leverage strategic consulting or SCS. You've heard that team referenced a lot this morning. It is because they are pivotal to Element's success on so many fronts. We leverage SCS to support the analysis required to help clients determine electrification roadmaps. Third, we absorb and share knowledge. This is a core value at Element. We have our learnings from New Zealand, where we first launched our end-to-end EV product. That New Zealand product evolved into the global Arc by Element branded program we have today. We leverage our global strategic alliance relationship with Arval. They operate in Europe and are seeing EV adoption rates that are years ahead of the geographies that we operate in. We are also partnering to bring in this knowledge by working with best-in-class suppliers like global leaders in charging and infrastructure, and we are doing unique things like launching EV advisory councils with industry stakeholders, including utilities in the North American markets we operate in. We think we're doing the right things, and our clients are validating that. On this slide, you can see the growth in EV pilots we've initiated with clients. Pilots are critical. They provide clients with an opportunity to smooth out the rough edges of a fleet electrification strategy before committing to transition at any scale. As we deploy more pilots, the number of electric vehicles under management grows. These are not strictly fully electric pilot vehicles. We have clients using hybrid electric vehicles to make progress on GHG emission reduction while they gradually introduce fully electric vehicles. As that number of electric vehicles under management grows, so does our data repository regarding EVs, which means we're going to get smarter, and we're going to have more insights to offer our clients regarding electrification. The last chart on this slide represents an illustrative outlook of how a hypothetical client might transition their fleet from gas-powered to electric vehicles over the next seven years. It's based on what we know today, which could change tomorrow, but we think it's a reasonable approximation of how a gradual electrification transition might look and its potential impact on our business with that client. If there's one thing you take away from my presentation this morning, it should be this: electric vehicles are going to be good for Element's business. We are confident in the beneficial economics based on our value proposition. Higher capital costs for vehicles and new capital costs for charging infrastructure mean higher net financing and syndication revenue. Higher costs also mean more demand for our expertise and insights to reduce fleet operating costs. We'll see new service revenue opportunities which will more than offset any degradation in current services revenue from things like fuel. By the year 2030, we expect that 40%-60% of the vehicles we manage will be electric vehicles. Of course, that means 40%-60% of our vehicles under management will still be gas-powered vehicles. Our current thesis is that electrification is likely going to take longer than people expect. This reality is another point in Element's favor. It means that clients are going to have to manage the complexity of a mixed gas and electric vehicle fleet over that time period. Again, our specialty is making complexity, managing complexity, and keeping it simple for clients. We have already seen the prospect of electrification prompt self-managed fleets to reach out to Element unsolicited. This trend is going to continue to benefit our business. Now, perhaps only 40% of the vehicles we manage will be zero-emission vehicles by 2030. Make no mistake about it will eventually be 100%. Fleet electrification is a one-way journey, and we are confident this trend will continue. Clients want to electrify, and there is a societal imperative to electrify. This is exciting for all of us at Element because fleet electrification is going to be both good for our business and good for the planet. I can't think of a better message to end on than that. Thank you for having me. I'll now turn things back over to Michael Barrett and our executive leadership team, who will take your questions. Thank you, Avninder and Jacqui. It's time for the Q&A portion of this morning's event. If the exe could come and join me on stage. Before we get started, I would like to introduce you to three people who are coming up on stage now who you haven't had the opportunity to meet already this morning. The first is David Colman, our Executive Vice President and General Counsel at Element. The second is Izzy Kaufman, our Executive Vice President and Treasurer. Third and final, our Executive Vice President and Chief Digital Officer, Chris Gittens. Chris, Izzy, and David round out the Element executive leadership team, all of whom are now coming up onto stage to take your questions. Here's how this is gonna work. For those of you in the room, each table has a paddle in the middle. If you have a question, please raise the paddle high above your head, and I will ask one of our team members to bring you a microphone. The microphone will be on when you get it, so don't worry about having to turn it on. Please speak clearly into the microphone when you ask your question so that everyone in the room and everyone online can hear you. If you're comfortable doing so, it would be great if you introduced yourself before asking a question. In an abundance of caution, I'm gonna repeat your question for the benefit of everyone in the room and those playing along at home. For those of you joining us online, please type your questions into the Q&A window panel located on the streaming page. I will be watching the online question box, and we will intersperse some of those with the questions being asked here in the room. Let's get started with a question from anybody here in the room. Sanjay. Can we get a mic to Sanjay, please? Hello. It's Sanjay from BloombergSen. Just a question for David. You recently increased what you thought the organic growth potential of the company is going forward. You talked about the huge untapped growth opportunity there with the self-managed fleet. Why couldn't it be faster, is my question. Like, why couldn't the company grow even faster? Is that something you just are on a road to? How do you think of that? Again, in an abundance of caution, I'll repeat Sanjay's question to ensure that everyone watching online heard it. The question is, having recently increased our long-term annual net revenue growth guidance to 6%-8%, what's preventing us from growing faster than that? Why couldn't it be higher? Thank you for the question, a very good question, and probably something that Jay asks me all the time, right? No, jokes apart, I think it is a process, and it's sort of like a build-up that we need to work through. As I think as Manuel was presenting, probably the most complex sales process is the self-managed one, you know, because it's a way of how do you immerse into that organization, engage all of the stakeholders, and then with that, build up trust and then start ramping up. You know? I would probably see it as a sort of like a that snowball effect and as you start building momentum. We started our commercial transformation in the U.S. and Canada a couple of years ago. As I shared, it was also in the middle of the pandemic, imagine doing all that sort of remotely and trying to build engagement with prospects via Zoom. It's not that easy, right? I would say this last year has enabled us to accelerate a little bit more of that process. We're just setting up our team. We have a lot of new team members. We're training them, building up that sort of internal capabilities, getting them on the street, they need to start building that rapport, building that trust with prospects, and ramping up. You know? I think it's a progression, we could see that evolving, but it's not about capacity, it's just about building the right toolset and sort of that moment. Anyone else in the room? Yes, I'm sorry, I can't see who's raising their placard, but please go ahead. Hi, it's Graham Ryding from TD. This would be either for David or Jay. Just, can you remind us sort of what the key factors are and why you think you'd be durable through a recession? What are you sort of baking into your outlook for 2023? Do you have a slowing economy sort of baked into that, 6%-9% target for top line growth? Do you wanna take it first, Jay, or I can-? Yeah. Please. Start. Yeah. You want me to repeat the question? Yeah. All right. The question from Graham at TD was regarding our recession resilience capabilities. Well, I would say, as our core value proposition is lowering the total cost of operating a fleet. If you think of our clients or prospects, what happens in a recession, the first thing that you wanna do is reduce cost, right? That's where value proposition comes in play. Same, I think principle applies with a self-managed fleet, trying to do that by yourself, it's gonna be harder, and that's where our value proposition becomes stronger, you know? I mean, we just went through an economic downturn a couple years ago, and you saw the resiliency of our business model. I think that's a valid proof point. Going forward, it's, yeah, it's lowering the total cost of ownership. I think that's core in the value proposition in an economic downturn. I think, maybe just to add to that, David, I should say the innate value proposition, I think maintains our relevancy and it actually increases our relevancy in the marketplace in an economic downturn. Also remember, we're going to be entering 2023 with roughly 3x the normal order backlog that we would have as an organization, as account of the supply chain challenges that the OEMs have had and the resulting delays in vehicle deliveries to our organization. Further as we think about, you know, an economic downturn to the extent that that indeed starts to tamp down retail demand for OEM production, that could see a shift in production from the retail distribution network into the FMCs and more vehicles being made available. While we're anticipating a 25%-35% year-over-year increase in originations for 2023, there is that potential of a further tailwind should we indeed experience an economic decline that tamps down retail demand and gives rise to greater production capability that can be allocated towards fulfilling some of the great demand that we're seeing in our own business. James. Jaeme Gloyn. It's on. Jaeme Gloyn, National Bank. Wanted to talk about pipelines. You mentioned a $245 million pipeline on share of wallet, a $190 million pipeline on winning market share, and a $60+ million pipeline on self-managed fleets. What is the conversion rate on each of those three pipelines and maybe the timeline to realize upon that revenue opportunity? Jaeme's question was about the various pipelines we identified during the presentations, anticipated conversion rates, and the timeline to realize on those opportunities. I think I cannot share exactly our conversion rates, but I can just share that they are sort of getting better every month. We measure conversion rates on a 12-month running basis, so it's really using historical data and seeing how we progress month-over-month. Of course, conversion rate varies depending on the let's say growth lever, you know. It's not the same conversion rate that we have in a share of wallet opportunity, which is an existing client versus a conversion rate that we would have with a net new client. That pipeline that you saw, it's a snapshot a moment in time, but that pipeline can change up or down any month as our teams are out there in the streets identifying new opportunities. One of the things that David's far too modest to say, he has brought a great deal of accountability to the commercial sales process within the organization. You see that in particular in terms of pipeline management. First it was making sure that the pipeline constituted valid opportunities that were available to the organization, and that this first step was to actually reduce the size of the pipeline, recognizing that there were prospects in there that had been there lingering far too long and probably weren't readily addressable by our organization. Once we got the baseline pipeline and began to populate that through his hunter strategy, we put a lot of visibility on the cycle time for prospecting, negotiating, contracting, and onboarding those clients. What we've seen is a material step down in the amount of time that it takes to move a client prospect through each one of those stages to becoming a full client of this organization. You know, as David has indicated, with an overhauled commercial function, with new people that are populating our ranks. With those individuals being trained, with them being able to actually interact face-to-face with clients, not only are we seeing a increase in the size of the pipeline, an increase in the velocity of the pipeline, but more and more wins as illustrated by some of the commentary that the team offered up today. Tom. Tom MacKinnon, BMO Capital. Just a little, a question with respect to the $245 million annual net revenue white space that was referred to. I don't know how much of that was sort of put into the 6%-8% guidance. Is this an additional revenue opportunity over and above that? How much of that thing is sort of being chewed through in that guidance? How do you see the $245 million white space evolving as we go forward? Yeah, maybe I'll offer first comment, and then David can talk about its evolution. In terms of share of wallet, Tom, both increase in VUM as well as increase in share of wallet have been factored into, if you will, that 6%-8% annual organic revenue growth rate. We expect both the increase in the number of vehicles under management as well as the penetration, utilization, and pricing opportunities that we have through share of wallet to fuel that 6%-8% in annual organic growth rate. That $245 million of penetration opportunity is another, if you will, quantification of the pool in which we'll be extracting that 60% annual organic revenue growth from. No, I think you covered it, Jay. Yeah. Yeah. We do have a question from, an online viewer. Transition to electric fleets is beneficial for market share and advisory revenues. Will this be partially offset by lower revenues on maintenance and services? Yeah, maybe I'll start with that one. As we look at, you know, EVs and, you know, migrate to that 40%-60% in 2030, there's gonna be some categories as the question talks about, that are going to go, you know, down a little bit. There's lots of categories that are gonna go up. Even within maintenance, what we're seeing so far is tires are far more in excess with EVs, the wear and tear on tires, which is a big category for us, which are, you know, offsetting partially, you know, anything you'd see in the PM side. Then when you look at accidents, for example, that actually is going the other way with all the complexity within the EV vehicles around sensors and things like that. There's plus and minuses. I think the beautiful thing about EVs is they're offers to us a whole bunch of other services around the vehicle that we don't necessarily have today. Obviously, charging being, you know, a most visible one, but there's a whole bunch of things around vehicle connectivity and things that you can do with an EV that you can't do with an ICE vehicle. We think it's a net positive over the long run and, you know, certainly the capital costs, you know, the difference of the higher capital costs will help us in the short run significantly. Thanks. Jeff? Geoffrey Kwan, RBC. Just had a question. I mean, it seems like from everything you're talking about all these different opportunities, there's a lot of growth ahead of you. I'm just trying to reconcile between talking about using some of the one-time revenues you're earning this year to, I think, hire more people. When you have like on the self-managed, you gotta If you go to a CFO and saying, "I can save you 20%," like that's pretty compelling. Are you hiring to kind of be more kind of steady gradual growth, or is there an opportunity to take advantage of the window right now to maybe hire even more and then really, kinda capture that revenue opportunity? Jeff's question relates to our comments within our Q3 disclosures about reinvesting some of the one-time revenues we've earned in 2022 into our commercial function in 2023. I'll let Jay and David Madrigal speak to that. Yeah. Yeah, it, you know, listen, Jeff, it is really about capitalizing on this momentum that we've built here over the last two years. This was a pivot to a whole new growth strategy in 2021. As David has articulated, we needed to put the foundation underneath the commercial organization in the U.S. and Canada, invested the time to do so. Having done so, having seen what we've been capable of, seen the opportunities to both steal share, penetrate that self-managed fleet market, and have the enormous success that we had around share of wallet, we wanna capitalize that. We wanna capitalize on that immediately. Based on the windfalls that we've been able to accrue this year, we thought it wise to redeploy some of that windfall in terms of increased OpEx to size up not only the commercial function, but certain other functions within the organization to ensure that, one, we capture this pool of momentum and make the best of the market opportunities that have been afforded us. Secondly, as we ingest those new clients into the organization, that experience day one is exemplary of the experience that they can enjoy over the lifetime with this organization. The first encounter with this organization needs to be seamless, needs to be perfect. Jim and his team have worked hand in glove with the commercial team to ensure that those prospects that have been identified that are likely to come on board as clients, that the organization is ready for them, ready to embrace them and their drivers, and to make that initial time with this organization quite unique, quite special. Yeah, we are absolutely capitalizing on the momentum, utilizing some of that one-time benefit that has accrued from those one-time windfalls this year to step up our OpEx, especially in commercial, but in adjacent functions that, again, will ensure a seamless onboarding of these new clients. Yes, Viv. Hi, my name is Vivian Lau. I'm with Sixth Street Partners. Just a quick question. One, wanted to get your perspective on the competitive environment, the environment has, you know, changed quite a bit, you know, from several years ago, with consolidation being, you know, being a key change. You have Donlen merging with parts of LeasePlan and Wheels Up, you have, you know, Merchants being acquired by, you know, Bain and ADIA. Love to, you know, have your perspective on the change in competitive environments kind of impacted both pricing and kind of your positioning within the market. Question from Vivian at Sixth Street regarding consolidation in the industry and the impact on Element's position in the market. Yeah. Perhaps I'll offer up a few comments and ask the team to join in as they see fit. you know, we've often described this industry as kind of an organized oligopoly. A few well-established players that all do very well in the marketplace, with high barriers to entry affording them a fair degree of resiliency and long-lasting performance. Up until, you know, Element's last acquisition spree, things had been very quiet in the fleet management industry in terms of consolidation. Then we saw Apollo Athene enter with the acquisition of Donlen, followed up with the acquisition of Wheels and with a planned acquisition of LeasePlan's USA business. For us, we look at that as a very positive sign. Apollo Athene is a great allocator of capital, a great long-term investor. They're looking for assets to match against their life insurance obligations and are looking to build a portfolio of assets to service those liabilities for many decades to come. As a great allocator of capital and as someone who has, you know, entered the industry through pricey acquisitions, we see them as a rational participant in the market as we go forward. Further, we have seen Bain Capital come in and purchase a smaller competitor, Merchants, very recently. Again, would see that as a very positive evolution of the industry and the industry dynamics in terms of long-term investors coming in, attracted by the industry dynamics, attracted by the barriers to entry, and attracted by the innate resilience as well as profitability proposition that the industry has to offer. As a consequence, again, as I mentioned in my opening remarks, there is a high degree of price transparency in the marketplace. As we have gone to competition for prospective clients and have seen the pricing that those deals have been done at, we haven't seen a particular change in the dynamics of the pricing in the marketplace. Our thesis continues to hold that these parties that are entering the industry are doing so because they, like us, like the economics of the industry, and as long-term participants in the industry, will work to ensure that the profitability in the industry is maintained. A question from online, probably for Frank. Looking five years forward, what could the revenue mix be in terms of syndication, services revenue, and net financing revenue? What could a sustainable ROE be in that timeframe? Looking out five years, what I would say is our capital-lighter model, which has driven the significant growth and shareholder value we have, we'll continue to lean into that. You will see, as a proportion of our overall revenues, those more highly ROE-friendly revenue streams increasing as an overall% of our business. Doesn't mean we won't be going out and doing leases. We will just be continuing to syndicate a good chunk of our leases as we move forward here. That in alone of itself will show that magnifying. You can look over the last couple of years, syndication, services, and how that has grown over that timeframe as some indication of a continued trend that we see and will continue to push in our business. Really important. In regards to ROE, by definition, that will continue to allow that ROE expansion over time. We don't necessarily see a specific ceiling on that ROE as we move forward because we'll continue to transition that proportion of the business. Tom again. Yeah. Maybe this question's for Jim. I think you had mentioned that your relationships are really your competitive moat. You're not number one market share, and what kind of benefits do you have over your... I mean, you show a nice slide over the OEMs, but how would that, your relationships compare with some of your other FMC peers, and why do you see that as a competitive mode over them as well? No, I think, first and foremost is we have bigger relationships with those OEMs than our competitors. I think that what that's allowed us to do is come up with, you know, creative, you know, programs that are different, they're new, and they're different than what the other folks have. I think when you look down to other suppliers past the OEMs, we have, you know, many differentiated offerings than our competitors. I know that for sure. You know, we're always looking to have our suppliers integrate with us, which I think we're leading the pack in that from what I hear, from the different suppliers. We have partnerships with some of our service providers whereby they're performing more of the transaction than they ever have been, which integrates us more. I think, you know, at the end of the day, you know, it's the metrics that clients count on, like uptime, reliability, pricing, all those things we measure, and we hold the suppliers more accountable, right? There's a combination of things that I think makes us different. You know, the scale certainly gets the attention, and certainly with our network, both the size as well as the, I'll call it, the depth of it allows us to extract those things from suppliers that they don't provide for everybody else. Forgive me if there was any poor audio on Tom MacKinnon's question. As you could likely infer from Jim Halliday's answer, it was about our maintenance networks and our service supplier networks beyond just maintenance shops, including the OEMs and other auto service providers. Maybe, Tom, just one more point there because I think it's important. You know, all the work we've done for the last 4 years has to be to digitalize that. I know, having been at PHH and having been, you know, seeing other companies when we were looking at them at Element, before, I know that those don't exist with other fleet companies in large part. They may have done some of that, but there's no way they've done what we've done, in my opinion. Graham. Thank you. Graham Ryding from TD. Frank, this is a question for you. Maybe just some commentary on the funding side of your business. What areas do you feel you have capacity and are healthy right now, and where are you seeing maybe, a bit of dislocation? Sure. I'll try first, and then Izzy will, Izzy Kaufman, our treasurer, can add to that. The question was on the funding side and what we're seeing going on in the marketplace. Obviously, I think we've seen this market volatility, interest rate volatility has gapped out spreads across all debt capital markets that we see there. We choose not to enter those markets now, right? Because we have done a lot of work and lowered our cost of capital significantly over the last several years, matured our business, and we don't believe that those current spreads reflect the risk inherent in our business as we move forward. When I say we choose, we have the luxury of being able to choose for several reasons. One is we've got $2 billion of available capacity on the existing balance sheet. We've got significant free cash flow. Importantly, we have a syndication engine that we can lean into to allow us to fund the business, specifically on the lease side, which is where it takes most of the capital. We can lean into that syndication side in this interim period to do that. We've also taken advantage of several opportunistic opportunities to fund our balance sheet over this dislocated period. We will be back in the market when we think those spreads normalize more. Izzy, I don't know what you'd like to add to that. No, I appreciate that, Frank. You said it all, but one thing I want to maintain is our access to these financing markets is abundant. I mean, you know, extremely positive for us, and we intend to continue to maintain a meaningful presence, certainly in the securitization markets, the unsecured financing markets. We've got, you know, wonderful bank partners that are there to support us, you know, over the years, and they continue to. We're gonna be, you know, very thoughtful around making sure we always focus on our liquidity position, being there for our clients first and foremost, but being very thoughtful and constructive and opportunistic in terms of providing that liquidity, that financing to enable our business to do the great things that we do. Thanks. I know there was a question in the back right. I'm sorry. Thanks for drawing attention. Paul Holden, CIBC. I have two questions, if I may. First one's related to the consolidation theme, and you highlighted early in the presentation that consolidation has been a net benefit to Element by capturing market share. My view on that is probably there's a 2-3-year tailwind following consolidation where you have an opportunity to benefit from that customer churn. Second question is related to growth and syndication. The way I view your growth is you've been able to execute during a period of time where banks have been injected with a lot of liquidity. Deposit growth has benefited from injections from federal government, from loose monetary policy, and from QE. Now that's all kind of reversing, and liquidity is gonna be harder to capture, I think, in the banking system. I'm just wondering, in that context, what gives you the confidence that you'll be able to continue to grow syndication from $3 billion-$5 billion when the banks aren't gonna have the same amount of liquidity as they've had over the last couple years? I'll repeat the first question first. We'll take them one at a time. First, Paul asked about consolidation in the industry. His view is that the opportunity to steal market share while consolidating competitors integrate their operations may be a two-to-three-year runway. Curious on our view as to timing and continued opportunity. Yeah. I think it, you know, it's at least 2-three years, Paul. When I think about 2-three years, I think about that in the context of Canada, U.S., and Mexico in particular. I say at least for all the change that these organizations will be going through as they integrate, as they adapt new management, new processes, new systems. As they are undertaking that rate of change within their own organization, we are going to continue to reinvest in our own organization and our meaningful points of competitive differentiation, such that as they do come out of their integration efforts, as they do, you know, align with their new owners, they will face an even more able competitor in Element by virtue of the investments that we've been making in our people, our processes, and our systems. Paul's second question was on a long-term horizon on the syndication market. We've been operating in a period of increased, particularly bank liquidity with, deposits and quantitative easing. Paul's wondering about our ability to grow our syndication volumes in the coming years during a period in which bank liquidity may change. The U.S. syndication market is $25 billion-$30 billion. We did $3 billion of Canadian syndication, sorry, during that timeframe. We're still relatively a small part of that overall market. Importantly, though, we have some of the most attractive assets from a risk perspective with these low single basis point losses. These banks are putting demand deposits and other things up against this, and they need recurring cash flows, very safe assets to put against these. Going from $3 billion-$5 billion in a market of that size when you're effectively in the nicest position from an asset attractiveness feels very reasonable to us. In fact, it feels relatively, for lack of a better term, not a stretch in any way, shape, or form for us to be able to do that. Even if we see some of what you're saying, Paul, which likely will happen over time because it ebbs and flows over time, we don't believe it will have a material impact on our ability to increase our syndication volumes. Jeff. Just had a question on return of capital. I mean, in a couple of years, I'll have all the prep shares gone and the convert, either converted or if you have to take out whatever the residual is. How do you think about return of capital in terms of the mix between share buybacks and dividend increases? because your dividend payout ratio target, I think, is 25%-35% today. I mean, can we see that go a lot higher given you'll have a, kind of, call it a capital structure that you're more comfortable with? Yeah. The question was on return of capital strategy, you know, could our current dividend payout range of 25%-35% of last 12 months free cash flow per share increase post-redemption of our outstanding preferred shares and the remaining convertible debenture. Jeff, what we've said publicly is that we plan to grow our dividends consistent with the growth in our free cash flow per share. That would roughly say you'd stay in that same ratio as you move forward here as we take out the preferreds, which would effectively mean you'd have more muted share buybacks over the next two years as you take those preferreds out, you could lean significantly harder into the share buybacks. We'll reassess three years from now whether or not we believe that is the optimal strategy based on where the share price is and a host of other things, whether or not that ratio makes sense to do that. right now, we're pretty confident over the next 2 to three years, the formula we've put together is the optimal formula in delivering that value back to shareholders. Sir, yes, I'm sorry, I don't know your name. Hi. Dan Jarnick, just a independent industry consultant. First of all, I wanna thank management for the presentations today. I thought they were very good and very informative, thank you. I did have one question on the market sizing I think that I read in the materials. In particular, I think, if you add up Mexico, Australia, New Zealand, the gross domestic product of those three countries is about 15% or, sorry, 12% of the U.S. and Canada. You show the net revenue opportunity in those three markets at $6.9 billion versus $6 billion for the U.S. and Canada combined, which means on a per GDP basis, you think that there's gonna be 10x the net revenue opportunity in Mexico, Australia, New Zealand versus U.S. and Canada. I'm just wondering why you think there's so much more opportunity in those three markets. I know some of the reasons like gain on sale revenue in Australia and Mexico, novated leases in Australia, and a greater propensity to do both complementary fleets and primary fleets in Mexico. It still seems like a big difference in terms of the opportunity in those three markets versus the U.S. and Canada. Thanks. Thanks for the question. I'll do my best to do it justice in repetition. Essentially, the question is about the relative size of opportunity for self-managed fleet conversion in ANZ and Mexico compared to our view of the U.S. and Canada. Yeah. I'll maybe on the sidebar, we can do a reconciliation of our respective math. You know, as we think about the three markets that we participate in, U.S., Canada, Mexico, ANZ, we are very bullish on maintaining and indeed, enhancing the rate of growth that we're seeing in Mexico. You heard David Manuel talk extensively of the success that we've enjoyed there, stealing share, penetrating the self-managed fleet. More recently, we've been going more aggressively in share of wallet. That has largely been a financing market for us in the past. With the introduction of services into that market and the take-up that we've seen, we see that as an opportunity to take what is already a hot market in terms of organic revenue growth and increase it further as we go forward. As Frank has commented extensively through his presentation, the economics of those service revenues will be all the more attractive in terms of increasing the return on equity that we enjoy in that particular marketplace. ANZ, we see additional opportunities for share of wallet gain to complement the great work the team has done there as well. Again, largely a financing market. We've had some success around services and see an opportunity to go even deeper on services in that marketplace as well. That's one of the reasons why we're, you know, overweight, if you will, in terms of our expectations of both ANZ and Mexico as two regions that can be quite additive to the growth rate that we see, and quite a meaningful contributor to that 6%-8% organic revenue growth that we see for the entire organization, despite them being smaller parts of the organization. We don't have. Oh, great. I was gonna say, we don't have an additional question online waiting yet. If there's one in the room. Tom, thanks very much. Just an observation. When we looked at the sort of the net revenue that you get per vehicle, it would seem that ANZ and Mexico is significantly higher than what you're getting in U.S. and Canada. I assume that's just due to some gain on sales stuff, but if there's anything else that you're doing differently in those countries, I mean, you certainly alluded to the fact that Mexico has done a great job in terms of, you know, revenue growth and penetration into self-managed market and anything else. Is there anything else that we're missing here in terms of why that might be a much higher revenue per vehicle story in those countries versus U.S. and Canada? Is that a correct observation that I made? Thanks. Yeah. Thanks, Tom. A follow-on question about sort of revenue per vehicle in Australia and New Zealand, the potential therefore, and in Mexico as well. Yeah. You know, as we've attempted to articulate, we operate in three very different distinct marketplaces with very different dynamics, competitive dynamics, pricing dynamics, and service uptake dynamics, particular to each of those three marketplaces. You know, coming back to Mexico, as we look at Mexico, again, it's largely a finance market. Because of the perceived country risk, the financing premiums that are earned in that marketplace are above market than what you would see perhaps in the United States or Canada. Further, it's a hybrid type of residual value risk that we have there. We technically take residual value risk in that marketplace. Practically, we have very little residual value risk. We have effectively a gain on sale that we realize in addition to the normal financing revenue that would be generated from the lease. That offers a very attractive revenue profile for that marketplace. If you go over to ANZ, we do take full residual value risk. As a consequence, that is priced in to the net interest margins that we earn in that marketplace. Thus that would be a much more profitable lease for us, assuming that we do manage residual value risk well, and we do manage that very well. In 2021 and 2022, with the OEM production shortages giving rise to increases in resale values and having full exposure to residual value risk, we have benefited extensively in ANZ in terms of gains on sales in each of the last two years and would expect to do so in 2023 as we see replacement values, you know, high in terms of new vehicles entering the marketplace and supporting the used vehicle pricing in that marketplace. If you come over to the U.S. and Canada, remember that again, as we look at the balance there, we would have a good lead number of clients that actually don't finance with us, but only take up services. The absence of financing revenue by those clients would obviously lower the total net revenues per client. Within that particular geographic marketplace. Again, operating in three different marketplaces, very different dynamics in terms of the evolution of the business, the competitiveness of the marketplace, and the uptake of the services. Perhaps the overlay to that, Tom, is remember, you know, the return on equity dynamics of each of those markets would vary considerably as well. Obviously, whenever we're in a situation where it's a services only type of client, you can appreciate that the return on equity dynamics associated with that relationship are multiples of those that we would earn with a client with both financing and services revenues. A great deal of diversity. Many different layers there in terms of peeling that back and understanding the innate profitability of those. Hopefully, that gives you a bit of a flavor for each of those three marketplaces and how those revenue dynamics are maturing. For the record, I have great visibility to those of you who fall within a certain semicircle of light and less so to the periphery. If you are in the back with your hand up, please just wave it. Francis, I see you loud and clear. Thanks. Thanks for the time today. Francis Lau at Vantage Asset Management. This is a two-part question. The first part is about the Mexican and the ANZ market for the servicing. In Mexico, it's mostly a financing market initially. How does that service network compare to the U.S. and Canada? I think you guys displayed a slide on the, you know, Element versus Toyota and Stellantis, like 60,000 versus 12,000. How does that compare to the Mexico and ANZ? As it relates to that, what is the growth opportunity in the servicing revenue in those two markets? The second question, which is completely unrelated to this, Jay often talks about the shadow backlog on the earnings call, you guys are now stuck at $3 billion because the service or the order windows are closed for the OEMs. As it relates to the 2024, maybe even 2025 outlook, like, how does that shadow backlog play into your future visibility given that you cannot add even a single truck or car into the current backlog because the OEMs are not taking these, orders? Thank you. The first question was about our service supplier networks in Mexico and ANZ and the opportunity for services provision and therefore services revenue penetration of our client base in those two geographies. Maybe you want me to start? Yeah. With Mexico, I mean, the great news is we're continuing to build out that service network, so it is, you know, nowhere near as robust as it would be in Canada and the U.S. But we continue to work with partners to build that out, and as such, we have, you know, lots of service opportunities from, you know, maintenance, you know, I'll say the fuel part of the business is, you know, the government's still involved in that, but we've been able to put together a fuel program that we're rolling out or that we've rolled out. I would... You know, in general, it's an emerging, you know, market from the services perspective. I think as Jay said, we've had good success this year in adding to the service revenue stream. I think it's, you know, it's a really, you know, amazing portfolio of clients with, you know, significant, you know, so we have significant leases with them that we're starting to penetrate. You know, it's really exciting. Like, you know, I think that was one of the things that the Aramark folks were most attracted to us was our network and our ability to put that together, you know, on day one and have it, you know, fully, you know, functioning the, you know, the way that they would see it in the U.S., although continuing to build more folks on it. You know, with ANZ, it is a mature market. There is tons of penetration opportunity, as Chris noted. I think, you know, it predominantly was a finance business when it was with GE. We're seeing, you know, lots of opportunities from the maintenance to accident services, which we actually launched there, you know, to fuel to, you know, telematics, all the same things we're seeing here. You know, the beautiful thing about sharing all the global best practices is the US and Canadian business are far advanced on the service side. As, you know, just, you know, as Jay referenced there, you know, a huge portion of our business is service only. As we take more of that digitization, you know, even the differentiators we've built with some of the suppliers, you know, say like a Bridgestone, where we're now working with them in Australia to do the same things we're doing here. That's exciting for us and, you know, certainly lots of runway. The second question was about our order backlog, specifically the OEMs limitations on accepting orders and therefore a sort of artificial ceiling on that which we can tell you is a contractually committed backlogged order. Looking forward to that in 2024 and in 2025, how that might play out. Yeah. When we first began communicating with you about this organization, we focused on originations, recognizing that in Canada and the U.S., for instance, the cycle time between an order being placed and a vehicle being delivered to us was 60 days. With the OEM production delays, that has increased in some cases, you know, 3, 4 times. We then shared with you the concept of order backlog. As those production delays continued, we introduced a third concept, shadow order backlog. As Mike has just articulated, you know, an order backlog is a committed order by a client that we have processed through our system. To an OEM, the order has been accepted, and with the OEM's acceptance, we have a binding obligation to them and our client a bi-binding obligation to us to have that vehicle produced and delivered and available for them to utilize. As you noted, Francis, the OEMs, as they tried to come to grips with their production challenges, where we used to have months and sometimes quarters to order a vehicle, that has been delayed to weeks or even a day. We had one vehicle in particular that we went to order, and the order bank was open for one single day. Once that order bank was closed, we could place no more orders. What those orders, those orders that our clients asked us to place that were not accepted by the OEMs become shadow order backlog. Are they contractual? No, but they are real. These are vehicles that our clients desperately need to have in their fleet to either augment the current fleet that they have in satisfying their own growth ambitions or to replace vehicles that have been damaged, or have just gone long in the tooth and are now facing either extraordinarily high maintenance costs or out of service delays as they get removed for extensive drivetrain repairs. This shadow order backlog is building coincident to our order backlog being, you know, roughly that $3 billion level for the last year. We expect as we go into 2023, we continue to believe that by mid-2023, the OEMs will be back to historical levels of production. At that point in time, we'll be able to add additional shifts of production to begin to chew down that order backlog, which will allow us an opportunity to then take the shadow order backlog and place those orders with the OEMs for production. We expect that this will mean that we'll start clearing some of that order backlog and by definition, some of that shadow order backlog in the second half of 2023. But this will be something that we will carry forward into and likely through 2024. Despite a 25%-35% increase in our originations to $7.5 billion-$8 billion next year, we still expect to have a strong order and shadow order backlog exiting 2023, which will be, again, a means of de-risking any type of economic environment that we might see in 2024 or perhaps even 2025. I note your question. I'm gonna put it in our question order backlog while I take one from online. The self-managed fleet opportunity appears strong, particularly in light of the savings and insights EFN can provide. What are the common gating factors preventing clients from switching over, and can you flush out further how you are overcoming that potential resistance? Well, I think Manuel shared a bit of that, well, during his presentation, but it's essentially change management within the organization. I'll give you probably a more vivid example. We were having our customer advisory board, and a few of our clients approached me and asked me exactly the same question. "David, how do you plan to grow? Like, are there really companies that are managing themselves, their fleets?" The answer was, "Well, of course." We know, I mean, by as a matter of fact, there's this market opportunity, and they were like perplexed. They couldn't understand how somebody could be managing their fleets without a FMC, right? It's hard to do that initial change because, again, you have a whole organization internally entrenched, and you're essentially jeopardizing their own jobs, no? In many ways, you have a fleet management group that's 20 individuals that you're telling them, "You're gonna be out of a job six months down the road because you're gonna be doing something else," no? That's your first obstacle to overchange, no? That's why also Manuel was saying, "Well, you don't only go with the fleet group. You go with the treasury team, you go with the HR team, you go with the logistics team, and you start seeing value across the board." The complexity of selling into a self-managed fleet, it's exactly that. You're driving change into an organization that needs to do that change. The window of opportunity that we see today is... A big window is the conversion from internal combustion engines to EVs. Like, that change is gonna be material, and a lot of the skills that they have internally today, they're not gonna be sort of worthwhile when they go to EVs. Think about it's not only the fleet group. Some companies have their own maintenance shops. You have technicians that are proficient at changing oil. You don't change oil into an EV, right? You're gonna have to hire computer engineers that probably are more expensive than a guy that can change oil, right? That's gonna be one of the catalysts of that change and for them to look outside for support into managing the fleet. The other, what was one of the questions that you raised today, like in an economic downturn, that's an opportunity to lower the total cost of ownership, right? When you have a large and complex fleet, and you have no way to benchmark your own fleet, and you come in inside and you say, "Hey, I have 1.5 million vehicles where I can benchmark against your own fleet and show you with data." It's not just David selling you shiny objects, it's actual data telling you you're probably above or below what an industry benchmark in the same type of assets, in the same type of geography, in the same type of industry, and that's where it becomes a compelling value prop for them, you know? We have about five minutes left for questions. Achilleas. Achilleas Taxildaris with Bristol Gate Capital Partners. I have a question about, probably for Frank, but it's about ESG with a focus on the environmental side. Element is in a unique position to bring material change in the reduction of GHG emissions. My question is, besides becoming more popular, let's say, in ESG-focused strategies, will there be other benefits perhaps in lowering cost of capital, making the securitization more attractive with green offerings or any other benefits? Sure. The question was, are there any other financial or capital market benefits to the GHG, to the EV strategy as we move forward here? Currently we're seeing more words around, potentially lower cost or specialized funds into these areas, but the savings attributable to those funds are relatively small. Relatively small is what we've seen so far. That being said, it's likely that those pools of capital will grow over time. We may see, number 1, more access to different capital markets, which will allow us to diversify the funding even more. We may see more competition for those assets to the extent that those lenders have more pressure to put that money to work as we see over time. It's an evolving and, as Ninder said, this will take a lot longer than anyone thinks probably. At the moment, we're not seeing material changes from a capital markets perspectives, from a cost perspective for those type of investments at this point. We are actively looking at those and consistently trying to see if there are other markets we can tap into. Sure. We have time for one more quesion. I did see a paddle go up. Thank you. I think the last question would be for Frank, trying to pick your brain here on the preferred share buyback or repurchasing the preferred shares once they become redeemable. Understanding that you can redeem the pref shares maybe once every five years, but your current free cash flow yield, assuming CAD 1.50 at 1.29 USD/CAD is, what is it, like 8.5% free cash flow yield? If the preferred shares coupons are trading at like, you know, 6%-ish, isn't it better to buy the shares instead of redeeming the prefs, especially when your free cash flow yield or free cash flow per share should even increase in 2024, given all the growth plans that you guys are doing? Yeah. The question's about capital allocation and balancing the options between common share repurchases and pref share series redemptions. I think there's a couple of fundamental things. These pref shares were put in place during a different time and era, and they are very inefficient cost of capital, both from a cost perspective and a tax perspective. You've got two aspects of that that need to be factored into that discussion as you think about it. Additionally, they're only redeemable at a point in time and they reset, right? They reset based on current market conditions and the like. You'll see those costs go up over time on some of those preferred share issuances. As a result, you know, we wanna get rid of those because we've done the math from a PV perspective, from an accretion dilution perspective, from every angle we can look at, it is the right thing to do financially for the company, and it will get us to where we wanna be from a mature capital structure as well, and then allow us to lean more heavily into those share repurchases. Being mindful of the time and respecting the fact that some of you have been here since before eight o'clock this morning, I'm gonna end our Q&A session there. Thank you very much for your participation. Before we let you go, let me turn the floor over to you, Jay, once more for any closing remarks. Perfect. Thanks, Mike. On behalf of the whole team, I wanna thank you for coming and for your engagement and for your questions this morning. We deeply appreciate your interest in Element and your ongoing support of our company. If I can leave you with a few concluding thoughts. Ours is a great company doing great business in a great industry. We expect to deliver low-risk, organic revenue growth of 6% to 8% annually atop a scalable operating platform, which means expanding margins and growing operating income and cash flow. We will do this for the foreseeable future with annuity-like predictability. This operating strategy will be complemented by the advancements of our capital-lighter business model, accelerating revenue recognition and the velocity of our free cash flow, managing balance sheet leverage, and improving return on equity. Given we don't require a lot of capital to sustain or grow our operations, we can return the vast majority of the ample free cash flow of this business to shareholders by way of growing common dividends and ongoing share buybacks. Central to our performance to date and the performance we will enjoy from the execution of this growth strategy is our people. Our greatest competitive advantage, their performance is honed by our leaders, a representative sample of whom you've met this morning. We have a deep, experienced leadership team with a diversity of professional backgrounds, both within and outside of fleet management, which strengthens our capabilities. They lead 2,500 excited and engaged colleagues. We're set to achieve outstanding results for all of our stakeholders and are particularly well-aligned in their pursuit of long-term value creation for investors, as evidenced by our extraordinary share price performance these last four and a half years. With our commercial capabilities just now reaching the lofty heights previously attained by operating and finance teams, Element has never been better positioned to capitalize on its almost limitless opportunities for growth. Once again, thank you ever so much for joining us this morning.