New Lease Earnings [R0101]

Provides basic financial and earnings information on leases with a LeasePak book date in the current month--that is, all leases booked into LeasePak since the actual date of the last month end.

The content of the New Lease Earnings report [R0101] is determined by the user during the initial LeasePak customization. The items selected, however, must fit within a 132-character-width report page. Items which are totaled (i.e., any dollar or percentage item) must fit within a 120-character-width page. That is, non-totaled items (e.g., lease number, lessee name, etc.) must occupy at least 12 character-widths on the report page. Contact your MSI representative to establish or change the items that appear on this report. Refer to the content section below for the possible components of the report. The report may be accessed through the Strategic Management report menu [R01]. The report may be selected interactively for:

• all new leases
• a portfolio
• a company
• a region
• an office

The report may be automatically generated for all leases booked during the current month at the end of the month through the End of Period update [U0401]. Use the END OF PERIOD MODULES AND REPORTS screen under the End of Period Customizations option of the Portfolio update [U0212] to specify whether the report is created. The report is organized by Portfolio, Company, Region, Office.

 

New Lease Earnings Selection

• ALL
  Enter 'X' to report on all new leases. Leave blank to report on a specific portfolio, company, region, and/or office.
  
  
• PORT
  Enter the number of the portfolio upon which to report. Leave blank if reporting across portfolios.
  
  
• COMP
  Enter the number of the company upon which to report. Leave blank if reporting across companies.
  
  
• REGN
  Enter the number of the region upon which to report. Leave blank if reporting across regions.
  
  
• OFFIC
  Enter the number of the office upon which to report. Leave blank if reporting across offices.

 

New Lease Earnings Report

 

 

The New Lease Earnings report [R0101] reports at the lease level. The information which is shown on the report is determined by the user during the initial LeasePak customization. The possible components of the report are as follows. The character width of each item is displayed in parentheses next to the item name. An asterisk ('*') appears next to the character width of items indicates a total (for items with amount) or weighted average (for items with yield) will be provided on the page totals. Refer to the internal notes at the end of this section for the weighted average yield calculation.

 

• LEASE (10)
  The lease number is displayed.
  
  
• LESSEE NAME (25)
  The short form of the lessee name is displayed.
  
  
• ORIGINAL COST (11*)
  The original acquisition cost of the asset(s) tied to this lease is displayed. If multiple assets are tied to the lease, the sum of all original acquisition costs of the assets is displayed.
  
  
• MINIMUM PMTS RECV (ORIGINAL) (11*)
  The original minimum lease payments receivable (total of the payments due under the lease contract plus the guaranteed residual, if any) is displayed.
  
  
• MINIMUM PMTS RECV (CURRENT) (11*)
  The current minimum lease payments receivable (total of the remaining unaccrued payments due under the lease contract plus the guaranteed residual, if any) is displayed.
  
  
• RESIDUAL (11*)
  The estimated market value of the asset(s) tied to this lease at lease maturity is displayed. If multiple assets are tied to the lease, the sum of all residual values of the assets is displayed.
  
  
• GUARANTEED RESIDUAL (11*)
  The portion of the residual guaranteed to the lessor is displayed. The guaranteed residual is a component of the Contract Receivable general ledger.
  
  
• UNGUARANTD RESIDUAL (11*)
  The portion of the residual not guaranteed to the lessor is displayed. The Residual general ledger is comprised solely of the unguaranteed residual. The sum of the guaranteed and unguaranteed portions of the residual should reflect the estimated market value of the asset(s) at lease maturity.
  
  
• ORIGINAL UNEARNED INCOME (11*)
  The original amount of income to be accrued over the life of the lease is displayed. Unearned income is applicable to precomputed interest leases and simple interest leases accounted for under a 'gross' method (e.g., 'VV' and 'VL' methods).
  
  
• CURRENT UNEARNED INCOME (11*)
  The remaining income to be accrued over the life of the lease is displayed. Unearned income is applicable to precomputed interest leases and simple interest leases accounted for under a 'gross' method (e.g., 'VV' and 'VL' methods).
  
  
• ORIGINAL ITC (11*)
  The amount of the original Investment Tax Credit (ITC) to be earned for book purposes over the life of the lease is displayed.
  
  
• SECURITY DEPOSIT (11*)
  The refundable security deposit of the lease is displayed.
  
  
• ADVANCE PAYMENTS (11*)
  The total dollar amount of all the advance payments received or due from the lessee is displayed. Other amounts due at the start of the lease (e.g., prorate payment, cap reduction, recurring charges, etc.) are not included.
  
  
• FIN YIELD (6*)
  The system calculated Internal Rate of Return (IRR) is displayed. The IRR is calculated such that the lease payment stream (including the guaranteed and unguaranteed residual) returns a constant yield each month. The financial yield takes into account security deposit, ITC to be earned, and the initial direct costs.
  
  
• TERM (3)
  The term of the lease in months is displayed.
  
  
• LIST PRICE (11*)
  The sticker price of the vehicle, as entered through the Add Asset option of the New Lease update [U0101], is displayed. This field is applicable to vehicles only.
  
  
• COST/LIST % (6*)
  The resulting percentage of the original acquisition cost of the vehicle divided by the LIST PRICE is displayed. This field is applicable to vehicles only.
  
  
• RESID/LIST % (6*)
  The resulting percentage of the RESIDUAL divided by the LIST PRICE of the vehicle is displayed. This field is applicable to vehicles only.
  
  
• RESID/COST % (6*)
  The resulting percentage of the RESIDUAL divided by the original acquisition cost of the asset is displayed.
  
  
• CAPITALIZED COST (11*)
  Capitalized cost is displayed. It is calculated as follows:

  ORIGINAL ACQUISITION COST
  + OTHER CHARGES
  + DOCUMENTATION FEES
  - CAP REDUCTION
  + BROKER FEES (if capitalized)

• PRETAX YIELD (6*)
  The pretax yield is displayed. Pretax yield uses the same cash flow as the Financial Yield with the exception of converting the ITC and the security deposit to their pretax values.

  Note: Pretax Value = After Tax Value/(1 - company tax rate)

• ENTITY CODE (4)
  The department or agency, within a municipality (e.g., hospital, police, city), using the leased asset(s) is displayed. The entity is used primarily for municipal leasing but is informational only, so it may be used for other purposes, if desired. Entity codes may be established or changed through the Custom Code update [U0722].
  
  
• ASSET TYPE (20)
  The long form of the classification code (e.g., Auto, Computer Equipment) for the first asset of the lease is displayed.
  
  
• SALESPERSON (4)
  The initials or other code used to identify the salesperson on the Salesperson Name table [U0702] is displayed.
  
  
• ACC MTH (3)
  'ADV' is displayed if lease payments are due in advance. 'ARR' is displayed if lease payments are due in arrears.
  
  
• PMT MODE (4)
  The type of lease payment schedule (e.g., monthly, quarterly) is displayed. If the payment schedule is irregular, the first payment schedule frequency code is used.
  
  
• LSE RTNG (4)
  The in-house credit rating is displayed. This field is informational only.
  
  
• IN-HOUSE FEE (11*)
  The in-house fee is displayed. This field is informational only.
  
  
• NPV OF PAYMENT STREAM (11*)
  The net present value of the payment steam is displayed. The calculation involves the following amounts:
  
  
  • INITIAL OUTFLOW
    The cash outflow is calculated as follows:

    ORIGINAL ACQUISITION COST
    + OTHER CHARGES
    + BROKER FEES
    - CAP REDUCTION
    - SECURITY DEPOSIT
    - PRORATE PAYMENT
    - ADVANCE PAYMENTS(S)

    The prorate payment is included only if it is also included in the yield calculation, as specified through the PRORATE INCOME parameter on the first screen of the New Lease Customizations option of the Portfolio update [U0212].

  • FUTURE CASHFLOWS
    Each payment amount is reduced by the percentage of bad debt.
    
    
  • RESIDUAL
    The residual value less the security deposit is included in the final cash flow.
• IRR (6*)
  The internal rate of return (yield) is displayed. IRR is calculated using the residual, the initial outflow used for the NPV OF PAYMENT STREAM calculation and the lease payment stream. This field is informational only and is calculated in the Lease Application update [U0801] or during the Book Lease option of the New Lease update [U0101].
  
  
• IRR W/O RESID (6*)
  The internal rate of return, calculated using the initial outflow used for the NPV OF PAYMENT STREAM calculation and the lease payment stream, is displayed. This field is informational only and is calculated in the Lease Application update [U0801] or during the Book Lease option of the New Lease update [U0101].
  
  
• ACC MTHD (4)
  The accrual method code (e.g., AAPR, RAPR = level yield, AR78, RR78 = rule of 12/78's) of the lease is displayed.
  
  
• INITIAL DIRECT COST (11*)
  Initial direct cost is displayed. It consists of the sum of the following items:

  BROKER FEES
  + ALLOWANCE FOR BAD DEBT
  + DOCUMENTATION FEES or a calculated value

  Allowance for bad debt may be excluded from INITIAL DIRECT COST. Or, INITIAL DIRECT COST may consist of only DOCUMENTATION FEES or a calculated value, depending upon the following parameters established through the first screen of the New Lease Customizations option of the Portfolio update [U0212]: BAD DEBT INCLUDED IN INITIAL DIRECT COST, CALCULATE IDC W/O BROKER FEES OR BAD DEBT

  Refer to the LeasePak Calculations document for more information on the calculation of initial direct cost.

• ACCUMULATED DEPRECIATION (11*)
  The accumulated depreciation of the asset(s) tied to this lease is displayed. If multiple assets are tied to the lease, the sum of all accumulated depreciation of the assets is displayed.
  
  
• AVERAGE MONTHLY PAYMENT (11*)
  The average monthly payment for leases with a straight-line accrual method is displayed. It is calculated as follows:

  TOTAL LEASE PAYMENTS
  / LEASE TERM

• UNBILLED INCOME
  The unbilled income for leases with a straight-line accrual method is displayed. It is calculated as follows:

AVERAGE MONTHLY PAYMENT
- ACTUAL MONTHLY PAYMENT

If the actual monthly payment is greater than the average monthly payment, the unbilled income is negative, otherwise it is positive.

• TOTALS
  Page totals for number of leases, weighted average yields, and all dollar amounts are shown by office.
  
  Region, company, portfolio, and grand totals are shown for the number of leases, weighted average yields, and all dollar amounts.
  
  
• WEIGHTED AVERAGES
  A weighted average yield is more reflective of the actual yield than a simple average yield because the original cost for each lease is factored into the weighted average yield while the number of leases is the only factor for a simple average yield. If the original cost for each lease were exactly the same, the weighted average yield and the simple average yield would also be the same. However, if the original cost varies, a lease with a higher original cost and a higher yield than the simple average yield would 'pull up' the weighted average.
  
  The weighted average yields are calculated using the following formula:

  SUM OF THE (YIELD * ORIGINAL COST) FOR ALL LEASES
  / BY THE TOTAL ORIGINAL COST FOR ALL LEASES

  The following is an example of the weighted average yield formula:
  

  	DLS.ORG	*	YIELD	TOTAL
  Lease 1	$1,000.00	*	10%	$10,000.00
  Lease 2	$5,000.00	*	20%	$100,000.00
  Total	$6,000.00			$110,000.00

  The weighted average yield of these two leases is:

  $110,000.00 / $6000.00 = 18.33%

  (The simple average yield of these two leases is 15%.)

  
  

 

LeasePak  Documentation Suite

©  by McCue Systems Incorporated. All rights reserved.

The information contained in this document is the property of McCue Systems, Inc. Use of the information contained herein is restricted. Conditions of use are subject to change without notice. McCue Systems, Inc. assumes no liability for any inaccuracy that may appear in this document; the contents of this document do not constitute a promise or warranty. The software described in this document is furnished under license and may be used or copied only in accordance with the terms of said license. Unauthorized use, alteration, or reproduction of this document without the written consent of McCue Systems, Inc. is prohibited.

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