Investor PresentationJanuary 31, 2012
FORWARD LOOKING STATEMENTS
The statements made in this presentation that are not historical facts contain forward-looking information that involves risks and uncertainties. All statements, other than statements of historical facts, which address the expectations of Counsel Corporation, Terra Firma Capital Corporation, or Counsel RB Capital Inc. (“the Companies”), should be considered as forward-looking statements. Such statements are based on knowledge of the environment in which the Companies currently operate, but because of the factors listed herein, as well as other factors beyond the Companies’ control, actual results may differ materially from the expectations expressed in the forward looking statements. Important factors that may cause actual results to differ from anticipated results include, but are not limited to, obtaining necessary approvals and other risks detailed from time to time in the Companies’ securities and other regulatory filings.
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TSX: CXS
History of success in financial services
Broad network of contacts
Likeminded entrepreneurs experienced at running businesses
Dir./Mgmt. ownership ~ 24.5%Left: Allan Silber, Chairman, President & CEO
Right: Morris Perlis, Executive Vice Chairman 3
COUNSEL CORPORATIONLEADERS TO INVEST IN
Residential mortgage lending Capital asset solutions
Private equity investments Real estate financing
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Major Operating Businesses
Private equity and equity investments
COUNSEL CORPORATIONFINANCIAL SERVICES
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COUNSEL CORPORATIONOUR VALUE ADD
Finance and capital markets expertise
Strategic planning and deployment
Performance management
M&A expertise
Risk mitigation
Tax, accounting and administration
Expertise to help entrepreneurial leaders build better businesses
STREET CAPITAL FINANCIAL
Residential Mortgage Lending
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STREET CAPITAL FINANCIALLEADERS TO INVEST IN
Left: Lazaro M. DaRocha, CRO & CFO
Middle: Paul Grewal, President
Right: W. Ed Gettings, CEO
SC senior officers’ ownership of Counsel: ~ 5.5%
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~ $7.8 Billion - Home mortgages originated since 2008 launch*
$54.6 million - F2011 revenue^
$9.1 million - F2011 pre-tax income^
Counsel ownership : ~ 100%
Founders/senior mgmt. have deep experience in mortgage industry
*As at Sept. 30, 2011^11 months data, from Nov. 1, 2010 to Sept. 30, 2011
STREET CAPITAL FINANCIALATTRACTIVE MARKET SIZE
1Average at month-end; Unadjusted data. The most recent data for some series are estimated and subject to revision. Source: CANSIM table 176-0069
Residential Mortgage Credit ($millions)1
141%Growth of residential mortgage
credit over past decade
$1 Trillion+Residential mortgage credit
outstanding in Canada
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Forecast growth of 7.8% in 2011 and 7.0% growth in
2012, or $157 billion**Will Dunning, “Stability in the Canadian Mortgage Market”, May, 2011 CAAMP
Source: CMHC 2011 Mortgage Consumer Survey
Mortgage Broker Market Share %(by mortgage consumer)
STREET CAPITAL FINANCIALMORTGAGE BROKER MARKET
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Brokers capturing almost half of first time homebuyers and a third of repeat buyers
Street Capital owns more profitable renewals
(~80% renewal rate)
Broker market share for all segments is at 23%
Source: Davis + Henderson Lender Insights Market Share Reports
Street Capital’s Broker Market Share(by funded volume)
Scotia Mortgage Authority
First National Financial LP
TD Canada Trust
FirstLine Mortgages (CIBC)
MCAP Mortgage Corp.
National Bank of Canada
Home Trust (Home Capital Group)
ING Direct
Merix Financial
Laurentian Bank
Equitable Trust Company
ResMor Trust Company
~54%
“Street (Capital) has an exceptional reputation for service and is strong at creating broker relationships.”
March 10, 2011 CanadianMortgageTrends.com
#7 STREET CAPITAL
STREET CAPITAL FINANCIALMARKET SHARE
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STREET CAPITAL FINANCIALOPERATIONAL PERFORMANCE
11*Unaudited 2011 data from Nov. 1/10 to Sept. 30/11
$6.4 Billion*Mortgages under administration
0.29%* Arrears rate of portfolio
82.8%^Loan to value ratio
730^Average Beacon score
33.4%^Average total debt service ratio
F2008 F2009 F2011*F2010
*As at September 30, 2011^Loans originated in September, 2011
STREET CAPITAL FINANCIALOPERATIONAL OVERVIEW
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Service
Dedicated underwriters to top mortgage brokers in 15 sales regions across Canada
Growth Capacity
Major North American and Canadian bank funders
Low Risk
Funding secured at time of mortgage commitment
Target high quality, high volume brokers
Broaden product line
MBS issuer/CMB seller
Expand geographically into Quebec
Increase
STREET CAPITAL FINANCIALGROWTH STRATEGY
Volume & Profit Margin
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STREET CAPITAL FINANCIALFINANCIAL PERFORMANCE ($millions)
14*Unaudited 2011 data from Nov. 1/10 to Sept. 30/11
Revenue Pre-tax Income
F2008 F2009 F2010 11 MOSF2011*
F2008 F2009 F2010 11 MOSF2011*
COUNSEL RB CAPITAL
CAPITAL ASSET SOLUTIONS
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Left: Adam Reich, co-CEO
Right: Jonathan Reich, co-CEO
COUNSEL RB CAPITALLEADERS TO INVEST IN
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Dir./Mgmt. ownership: 12.5%
Co-CEOs are former bankruptcy attorneys with decades of industry experience
US$16.8 million – 9 mos. 2011 operating revenue*
US$4.6 million - 9 mos. 2011 net income**
Counsel ownership: 76.2%
*Non-US GAAP financial measure combining asset liquidation revenue and earnings of equity accounted asset liquidation investments
**U.S. GAAP
OTCQB: CRBNMarket Cap: US$33.9 (01/27/12)
COUNSEL RB CAPITALOPERATIONAL OVERVIEW
Identifies, acquires and monetizes distressed and surplus capital assets
Opportunities in all market cycles
Multiple revenue sources• Surplus corporate assets• Commission sales• Bankruptcy/Receivership
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Buys assets at forced liquidation value
Sells at fair market value or orderly liquidation value
COUNSEL RB CAPITALKEY DIFFERENTIATORS
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Specialist in intact manufacturing
plant transactions
Avoid distressedretail transactions
Partnerships with leading industry
participants
• Higher returns• Faster turns• Lower risk • Less competition
• Require higher capital investment
• Typically more cyclical/risky
• Manage risk• Increase deal flow• Assist in asset
valuation/disposition
COUNSEL RB CAPITALDEALS COMPLETED
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Number of Business Bankruptcy Filings (000s)
2006-2010 CAGR 30.0%
COUNSEL RB CAPITALATTRACTIVE MARKET
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Multi-billion dollar market with few public companies
Source: Administrative Office of the U.S. Courts on behalf of the Federal Judiciary
# of Filings
2006 2007 2008 2009 2010Source: Thomson Reuters: “Distressed Debt & Bankruptcy Restructuring Review FY 2010”*Other category includes: Consumer Products and Services, Financials, High Technology, Telecom, Consumer Staples, Retail, and Healthcare
U.S. Completed Restructuring Volume by Industry FY 2010
COUNSEL RB CAPITALGROWTH STRATEGY
in line
Broaden array of capital asset solutions
Investment banking function
Industrial auction division
Debtor-in-possession loans and other distressed company financing
st
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COUNSEL RB CAPITALFINANCIAL PERFORMANCE (US$ MILLIONS)
22†Unaudited**U.S. GAAP
*Non-US GAAP financial measure combining asset liquidation revenue and earnings of equity accounted asset liquidation investments
^Counsel RB Capital began its asset liquidation operations in Q2 2009
2009^ 2010 9 mos. 2010†
2009^ 20109 mos.2011†
9 mos.2010†
9 mos.2011†
COUNSEL CORP.
Financial Overview
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FINANCIAL OVERVIEW
(C$ millions except for EPS) 2009* 2010*9 mos. 2011^
9 mos. 2010^
Revenue 29.0 36.8 47.5 16.9
Net income (loss) (3.6) 8.8 2.5 (4.3)
EPS (basic and diluted) (0.07) 0.14 0.03 (0.07)
24^Unaudited
*Not adjusted for IFRS
BALANCE SHEET HIGHLIGHTS
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(C$ millions)as of Jun. 30,
2011*as of Sept. 30,
2011*
Cash and cash equivalents 17.2 19.3
Current assets 39.0 44.8
Total Assets 170.5 181.6
Current liabilities 27.7 31.6
Total liabilities 75.9 80.1
Shareholders’ equity 94.6 101.5
*Unaudited
CAPITAL STRUCTURE
as at 01/27/12
Market Cap $63.0 million
Share Price $0.74
Shares Outstanding85,147,831
common shares outstanding
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TSX: CXS
COUNSEL CORP.
Summary
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COUNSEL TODAY
Focused on financial services
Revenues from two major operating businesses augmented by equity
investment returns
Provides strategic, financial and organizational guidance to operating
businesses
Team of entrepreneurial industry leaders
Attractive valuation
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CONTACTS
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ANALYST COVERAGE
Industrial Alliance SecuritiesFred Westra
(514) [email protected]
Please note that any opinions, estimates or forecasts regarding Counsel's performance made by analysts covering Counsel are theirs alone and do not
represent the opinions, forecasts, or predictions of Counsel or its management. Counsel does not by its reference above imply any endorsement of or concurrence with such information, conclusions or recommendations.
SHAREHOLDER / INVESTOR CONTACTS
Stephen WeintraubEVP, Secretary and CFO
(416) [email protected]
Tim ForanInvestor and Media Relations
(416) 815-0700 [email protected]
TRANSFER AGENT & REGISTRAR
Computershare Investor Services Inc.(416) 981-9500
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