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To: Skeeter Bug who wrote (5928)	6/5/1998 11:39:00 AM
From: Oeconomicus	Read Replies (1) \| Respond to of 8002

they can front load profits with their new lease program. Skeet, with lease accounting, there are more opportunities to be clever than most people can imagine. Consider first that they will, if I understood them correctly, treat these "one low monthly payment" deals as sales, not operating leases. Sale profit. Now, discount the "finance lease" payment stream (with or without recourse - makes no difference) with some bank or other source and you get the asset and the debt off your balance sheet. Oh, lest I forget, when you "sell" the paper, you book any financing profit (net of reserves if there is recourse) all at once rather than over the term. I have no idea if they are doing this, but they could. I'm also not suggesting that there is anything wrong or unethical about this. However, greater diligence will be required to understand their numbers and I doubt that most shareholders (or analysts) will dig deep enough. Note also that, depending on your tolerance for financial risks in a business, any hidden leverage created by these possible tactics can boost returns on equity. Bob