2. Top Four Reasons Why Companies Lease Total percent is more than 100%: respondents selected multiple responses. 13.8% responded other 80% of Businesses lease 30% of assets acquired is through leasing More companies acquire equipment through leases than loans Off Balance Sheet 11% Avoid Obsolescence 26.9% Tax Advantages 42.3% Optimize Cash Flow 52.1 %

8. Lease Versus Cash Buying equipment has a greater, immediate impact on cash reserves. Leasing usually has a lower impact on cash flow due to low monthly payments versus a large cash outlay. Cash Flow and Outlay Leased assets are expensed when the lease is a Tax Lease. Such assets do not appear on the tax return which can improve financial ratios. Non-Tax Leases can accelerate depreciation using Section 179 giving companies substantial savings. The end user transfers the risk of obsolescence to the lessor when there is no obligation to own the equipment at the end of the lease. Easy upgrades to new technology maintains efficiencies. Lease Owners must manage asset liability on their books. Accounting standards require owned equipment to appear as an asset with corresponding liability on the balance sheet. Tax, Liability and Depreciation The owner bears all the risk of equipment devaluation. Obsolescence must be tracked by the owner and owner must manage the disposal or selling of the outdated equipment. Equipment Risk Cash Key Differences

10. Lease Versus LOC LOC requirements may include collateral/blanket lien: accounts receivables to corporate or personal assets. Collateral is not applicable. Collateral Borrowing the full amount may result in overlimit fees because finance charges may cause your balance to exceed your credit limit. Not applicable. Overlimit Fees and Issues Many companies take up to 30 days from receipt of application. Also, greater documentation is needed on larger lines (Schedule of debt & payment amounts). Process can take as little as a couple of days or even same day financing. Turnaround Time & Simplicity Most LOC’s require a zero balance at least once a year. In addition, many have annual fees ranging from $50 - $100+. No or low down payments with leasing. Average: 0%-6% down. Cash Flow Ownership of equipment regardless if it is outdated. Upgrades can be built into the lease to avoid obsolescence. Equipment Risk Owners must manage asset liability on their books. Accounting standards require owned equipment to appear as an asset with corresponding liability on the balance sheet. Leased assets are expensed (Tax Leases). Such assets do not appear on tax returns & can improve financial ratios. Non-Tax Leases use Section 179 for savings. Asset Management A LOC impacts your credit. A lease does not affect a company’s credit. Ability to Borrow LOC have variable rates – the current trend: rates are rising. Same monthly payment throughout the life of the contract. Variability Line of Credit (LOC) Lease Key Differences

14. Appreciating the Benefits Improve Cash Flow Hedge Against Inflation 100% Financing In general, leasing costs less than buying or borrowing.* Leasing does not drain cash reserves. Also, leases provide flexibility on term and structure (skip/seasonal payments) versus a loan. Instead of paying the full cost today, lessees delay the use of the cash until a payment is due. This delay makes cash worth more over time due to inflation. Lessees also get the use of cash instead of spending it up front. And, no rate risk: once agreement is signed, payments won’t increase as interest rates rise. A lease can cover the complete solution including soft costs such as installation, training, shipping, sales tax, etc. A loan may fall short: lenders usually only finance the asset cost leaving the customer to come up with a large cash outlay as much as 20-25% as a down payment and coming up with additional cash to cover soft costs.

15. Appreciating the Benefits Conserve Working Capital The lessor accepts obsolescence risk with FMV and 10% Option leases – allowing for the return of the equipment. And, with ALL leases, the lessee can easily upgrade equipment to ensure efficiencies. Working capital is assets minus liabilities – cash is generally a significant part of assets. Leasing conserves cash, conserves working capital. Working capital generally should not be used for short term finance needs. Manage Obsolescence Typically, companies can achieve a 12-14% return on cash/capital. The cost of leasing is usually substantially less. For a detailed calculation refer to the Time Value of Money Calculation/Cash vs. Lease. Return on Capital Depreciation and expense write offs can significantly affect the cash flow and bottom line of an organization (see examples in tax section). Tax Benefits