Leasing Versus Ownership Choose between flexibility and risk.

Transcription

1 A Berkshire Hathaway Company Leasing Versus Ownership Choose between flexibility and risk. CONSERVE CAPITAL CONTROL FINANCE COSTS IMPROVE YOU BALANCE SHEET AVOID RESIDUAL RISK BOOST PRODUCTIVIT RESPOND TO DEMAND OFFLOAD COSTLY ADMINISTRATIVE CH HASSLE OF SELLING TRAILERS STAY COMPLIANT Access Fle

2 THE WEIGHT YOUR TRAILERS CARRY IS NOTHING COMPARED TO THE LOAD THEY PUT ON YOUR OPERATIONS. Stay Nimble Does this sound familiar? Early in the year, you have trailers sitting idle. Just a few months later, you can t get enough to meet demand. Then, your biggest customer changes from spring-ride to air-ride vans. And later in the year, you sign a new account needing 20 reefers but you own just two. Your main goal never varies and that s to make customers happy. But what it takes to keep them satisfied changes all the time. Leasing and renting equipment gives you the agility to meet shifting demand. Avoid Costly Risks Your long-term contract with a shipper for dedicated services expires. Now you re stuck with trailers you own. Not only did you tie up capital, you have the burden and cost of getting rid of what you don t need. Leasing shifts the responsibility, risk and hassle of equipment ownership and disposal from you to us.

3 THE CHOICE IS YOURS Managers make more effective decisions when presented with a range of options. Xtra lease offers you that range. Operating Lease Lowest monthly rates lease with purchase option Enhanced flexibility conditional sale contract Payments build equity rentals Simple way to handle peaks Provides added flexibility and usually the lowest monthly payments. Lock in your rate for the entire term from a year to five years or even more. Provides slightly higher rate to account for the uncertainty in determining your equipment s value down the road. Build equity with payments. You may be able to enjoy the tax benefits of depreciation and interest. Offers greatest flexibility. Select the equipment you need. Keep it as long as you like. Return it when you no longer need it. Lifts the burdens of owning equipment you don t need permanently. Keeps trailer debt off your balance sheet. Offers tremendous flexibility when the lease expires, either purchase the trailer or return it with no penalty. Also available: early termination. Provides ownership of trailers unencumbered after your final payment. If you qualify, you can opt for staggered or balloon payments. Enables you to handle your peaks seasonal or unexpected and control the size of your trailer fleet. Allows for early termination and equipment swap options as well as full-service or net/ net maintenance programs.

4 Buying trailers costs you more than the purchase price. Owning assets adds to your ongoing costs and subtracts from your overall flexibility. Leasing Means Flexibility Financial Flexibility Consider all the ways leasing from XTRA Lease improves your financial picture. n Conserve capital. No need to make a large cash outlay for a down payment. Leasing frees up capital for expanding your business or pursuing other opportunities. n Control finance costs. Leasing involves fixed, predictable payments. With ownership, you often run into variable-rate financing. n Reduce maintenance costs. You can tailor maintenance programs to meet your needs. Let XTRA Lease handle preventative maintenance, and say goodbye to the expensive burden of handling it yourself. n Improve your balance sheet. Operating lease payments appear on your income statement as a monthly expense rather than on your balance sheet as long-term debt. n Avoid residual risk. What happens when trailers you own become unneeded or obsolete? In a volatile, fragmented used trailer market, you could take a big hit if you try to sell them yourself. Leasing avoids this risk. n Keep your options open. When your lease ends, select whatever option makes the most financial sense: from simply renewing it to purchasing, upgrading or returning the trailers. Operational Flexibility Leasing also helps you operate more efficiently. n Boost productivity. Lease from XTRA Lease and you get new trailers built with the latest technology and damage-resistant specs, such as composite interiors and crossmember spacing that increases floor rating capacity. n Respond to demand. Short-term rentals and long-term leases help you match your fleet to fluctuating freight volumes. You also get access to a wide variety of equipment specs to meet any needs that arise. n Offload costly administrative chores. When you lease, XTRA Lease takes on the time and expense of handling taxes and licenses. n Avoid hassle of selling trailers. Don t bear the burden of selling older, less productive trailers in the volatile used trailer market. When you lease, selling equipment becomes XTRA Lease s problem. n Stay compliant. Leasing provides an easy way to get the latest equipment for your fleet to help you keep up with government regulations and eliminates the risk of obsolescence. n Access fleet management services. Leasing from XTRA Lease offers easy access to trailer tracking and other online reporting services that can boost efficiencies.

5 Leasing Performs well on the dotted line. and even better on the bottom line. Leasing vs. Ownership Quick Comparison OWNERSHIP LEASING Payments Often variable Fixed, predictable CREDIT IMPACT Long-term debt on balance sheet Monthly expense on income statement OPTIONS Limited: Own then sell your trailers Flexible: Return, renew, upgrade or purchase trailers when lease expires RESPONSIBILITIES 4 Capital Outlay 4 Preventative Maintenance 4 Taxes 4 Registration/Licenses 4 Equipment Disposal XTRA Lease handles: 4 Capital Outlay 4 Preventative Maintenance (optional) 4 Taxes 4 Registration/Licenses 4 Equipment Disposal Note: The information provided in this brochure is not intended to be legal, accounting or financial advice. You should consult a qualified professional for such advice.

6 A Berkshire Hathaway Company Corporate Headquarters 1801 Park 270 Drive Suite 400 St. Louis, MO For more information, call or visit xtralease.com All rights reserved. Services subject to XTRA Lease Terms and Conditions. XTRA Lease, copyright XLL