STUDENT TRANSPORTATION INC 5.25 PCT DEBS T.STB.DB.A

RE:RE:RE:RE:RE:RE:STB's value is largely off books

[BlueCollar51]

goldsternp wrote:
25% of the fleet are leased.

The leases are operating leases, not capital leases so  the lease payments are expensed but they can't take any depreciation because they haven't capitalized the buses. When the leases are bought out, the buses can be depreciated on the buyout price, not the market value. Maybe the difference between buyout price and market value can go to Goodwill and therefore also to equity but not to capital value and thus no depreciation.

Bottom line is that the fancy sheltering you suggest doesn't exisit with the leased buses.

The following is from the 2014 AIF found on SEDAR. It explains the difference between Leasing (expensing) the busses compared to Purchasing (depreciating) busses.
 
We continue to focus on our managed and leased fleet. As of our most recent fiscal year-end, leased and managed vehicles represented approximately 23% of revenue vehicles. Managed services contracts and leased vehicles require lower up-front capital investment (as the school district maintains ownership of the managed fleet and the lessor maintains ownership of the leased fleet), resulting in lower annual depreciation expense on an ongoing basis. Conversions usually drive an increase in managed business, as school districts opt for outsourced providers while maintaining ownership of their bus fleet. We have entered into operating lease agreements to lease replacement school vehicles each year since the 2006 – 2007 school year. We intend to review leasing alternatives on an annual basis, based on the economics of the lease financing. While the current lease of vehicles has been an attractive alternative to purchasing due to the low cost of financing, it effectively accelerates expense recognition as lease payments are expensed over the 6 year lease term, as compared to purchased vehicles, which would be depreciated based on usage over a period of nine years to 11 years.
 
As Always; Do Your Own Due Diligence; It’s Your Money !!