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OCTOBER 2005
16th Annual Convention Issue

FEATURES

Into the Unknown: As Leasing Forges Into the Future,
Executives See Challenges Along the Way
By Kevin Riordan, Monitor Freelance Writer
With a challenging 2005 now winding down, the Monitor asked ten top executives of major firms nationwide to assess the current state of the business - and evaluate the prospects for what appears will be an equally if not more challenging ‘06. The year has been shaped, the executives say, by the same forces that made 2004 a time of cautious optimism in equipment leasing circles.

Outlook For Capital Spending in 2006… Solid, But Not Spectacular
By Stuart G. Hoffman, SVP & Chief Economist, and
Richard F. Moody, VP & Senior Economist, The PNC Financial Services Group
As we head into 2006, the Monitor invited Stuart Hoffman and Richard Moody, the chief economist and senior economist respectively at The PNC Financial Services Group, to share their outlook for business capital spending in 2006. While there may be little “to write home about,” opportunities for the leasing industry still exist.

Where’s Healthcare Equipment Financing Headed… And What’s Taking it There?
By Mark Sedlmeier, Marketing Leader, GE Commercial Finance Healthcare Financial Services
Healthcare equipment financing is surging forward on the wave of unprecedented spending, with institutions earmarking more capital than ever before. In fact, they’re allocating approximately 51% of their capital for fixed assets to this line item, according to a recent Financing the Future report. What’s triggered this rapid increase in spending? And where will healthcare institutions be looking to put their dollars in the next five to ten years?

Riding the Swell In Marine Finance… But For How Long?
By Ravi Dandapani, VP & Marine Market Manager, Merrill Lynch Capital
The maritime industry has been experiencing a boom for the past two and half years - the likes of which ship owners have not seen for several decades. While ship owners have been reaping the rewards of this boom, bankers, financiers, hedge funds and equity markets have also joined the party.

AIG Commercial Equipment Finance, Inc.: One Year Old and Growing Strong
By Dave B. Fate, EVP/COO, AIG Commercial Equipment Finance, Inc.
We’ve all talked of it, seen it and been impacted by it for years. Industry consolidation has created disruptions of careers and challenged the spirit of many talented and successful leasing professionals. This is the story of how a group of displaced professionals teamed with an entrepreneurial, financial powerhouse to turn the tables on that trend.

Equipment Leasing in 2005: All Quiet on the M&A Front
By Bruce Kropschot, President, Kropschot Financial Services
The year 2005 is shaping up as another relatively quiet year for mergers and acquisitions involving equipment leasing and financing companies in the United States. However, the current low activity level is not due to lack of demand. One reason for this low supply is the fact that many of the largest and most attractive independent leasing companies have already been acquired.

Investing in Information Technology —
The Difference Between the Leaders and the Laggards
By Scott A. Thacker, CPA, Partner, Accenture Financial Services Solutions Group, and Shelley Pittman, CPA, Executive Partner/Practice Lead, Accenture Integrated Asset Financing
The equipment leasing and finance community faces an array of pressures: increased competition, intense legislative and regulatory scrutiny, and historically low interest rates. In this environment, what separates the high-performing companies from the laggards? The answer, in part, is their strategic use of information technology.

Optimizing Captive Finance Activities…
To Finance Sales or Not to Finance Sales — That is the Question
By Bill Bosco, Principal, Leasing 101
Sales aid financing is a proven tool to increase sales, but shareholder value often suffers. Look for professional advice to develop strategies that use other people’s balance sheets while maximizing profits from your company’s products.

Organizational Integrity… Transcending Common Approaches to Leadership
By Salem A. Marquis, Founder, Quantasphere and Qstreet
When describing leadership, one often hears descriptions of the qualities one should exhibit, the behaviors one should display and the target outcome that one should expect. It’s defined, it’s labeled and it’s concrete. In contrast, the process of organizational integrity can be described as unpredictable and totally creative - a realm where one’s own active participation in the enterprise is related to the unknown and awaits discovery.

OneWorld Leasing: Cooperation in Action
By Christopher Moraff, Associate Editor
In 1752, when the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire was born, a dozen directors were elected to the first board to be “equal sharers in the losses as well as the gains.” From these humble yet revolutionary beginnings, the cooperative business model came to be. In 2002, a group of leasing professionals decided to apply the cooperative model to the leasing industry and founded OneWorld Leasing.

For Times of Increasing Complexity…
A Unified View Into Compliance, Risk and Business Performance
By David Krauss, Product Director of Applications, Oracle Corporation
With the leasing market increasingly dominated by a few large providers, the pressure to remain competitive to survive has never been so strong. In this environment, a comprehensive, web-enabled ERP system could be a judicious investment for leasing companies looking to capitalize on every market opportunity while simultaneously reducing internal costs and coping with the increasingly stringent burden of regulation.

Financing Start-Ups: Venture Leasing Back On the Rise
By George Parker, Director and EVP, Leasing Technologies International, Inc.
Although venture capital volume has retreated significantly since the economic “bubble” years of the late 1990s, the 2004 volume of around $21 billion still represents a substantial rate of growth. Venture capitalists will fund more than 2,800 high-growth start-ups in the U.S. during 2005. The growth in venture capital investing has given rise to a relatively new and expanding area of equipment leasing known as venture leasing.

COLUMNS

LEGAL WATCH
In Re Sasson: Decision Allows Creditor to Pursue Nondischargeability Claims
By Andrew K. Alper, Partner, Frandzel Robins Bloom & Csato
Although the circumstances surrounding In re Sasson are a bit unusual, the holding by the Court of Appeals in the Ninth Circuit may be useful for creditors in litigation of nondischargeability claims with debtors in the future when the debtor contends money judgments in such cases or a State Court judgment precludes a judgment for nondischargeability.

PROFILE OF SUCCESS
Caterpillar Financial Today — Same Journey, New Leader
Kent Adams, the former executive vice president of the Nashville-based captive finance company, was named to guide the $3 billion-plus business in March 2005 when former president and founder James Beard retired after a distinguished 40-year career. Adams, a native of Caterpillar hometown Peoria, IL, is a humble leader who points to those around him as the source for Cat Financial’s success.

PROFILE OF SUCCESS
Partners Equity Capital — It’s All About… Well, Partnership
At least that’s what Steve Grosso says when asked what has most contributed to the rapid development and creation of value for the Horsham, PA-based Partners Equity Capital Company. From the outset, Don Campbell, PECC’s chairman CEO, and Grosso, who is president and COO, set out to create their company on a business model based on partnership.

ALTERNATE PERSPECTIVES
Two Recruiters, One Position... The Dangers of ‘Playing the Field’
By Michael A. Toglia, EVP/Director of Executive
Search & Recruiting Operations, Molloy Associates
On the surface, the tactic of using two recruiters may seem logical because candidates are concerned with finding the best position as quickly as possible, and working with more than one recruiter would seemingly increase the chances of success. But should the candidate engage two recruiters simultaneously for the same job to see who comes up with the interview opportunity first? The quick answer is no.

DISPATCHES FROM THE TRENCHES
A Lessor’s Legal Smorgasbord — Five Issues to Chew On
By Kenneth P. Weinberg, Esq., Associate, Baker, Donelson, Bearman, Caldwell & Berkowitz
UCC waivers and statutes of limitations, accidentally consenting to lessee assignments, true leases, sales tax issues in mixed goods/service transactions, and the hell or high water provision overcome arguments rooted in beta test sites and evaluation license business models.

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Questions or comments regarding Monitor content, or to inquire about submitting an article, contact Stuart Papavassiliou, Senior Editor, at 610.293.1300 ext. 124 or e-mail sppapa@monitordaily.com