tag:blogger.com,1999:blog-7294165939647321702.post2319162387437768764..comments2024-03-11T10:31:06.107-04:00Comments on <center><a href="http://www.barelkarsan.com">Barel Karsan - Value Investing</a></center>: Operating Leases Not Created EqualSaj Karsanhttp://www.blogger.com/profile/04493152766022812984noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-7294165939647321702.post-9231575207137745252012-08-12T15:37:42.336-04:002012-08-12T15:37:42.336-04:00Looks to me like we're all on the same page he...Looks to me like we're all on the same page here. Let me know which part of the article is making you think otherwise and perhaps I should correct.Saj Karsanhttps://www.blogger.com/profile/04493152766022812984noreply@blogger.comtag:blogger.com,1999:blog-7294165939647321702.post-72986222361765776822012-08-08T22:16:07.500-04:002012-08-08T22:16:07.500-04:00Agree with aagold on this. RSH's structure is...Agree with aagold on this. RSH's structure is the preferred one. Think about the annual cashflows related to the least payments. If both companies renewed all of the their leases, they would each have relatively level annual cashflows related to their leases. The only difference is that RSH has the option to exit more of its leases in any given year than HGG does.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7294165939647321702.post-51287286347220059452012-08-07T20:31:56.393-04:002012-08-07T20:31:56.393-04:00Saj,
I think the terminology you're using in ...Saj,<br /><br />I think the terminology you're using in this article is confusing. When debt matures it requires the company to make a (usually) large principle repayment. So the debt being "due" implies that a large outflow of cash is about to happen. When a lease expires, which is what I think you mean by the lease being "due", it means the opposite: the cash outflow obligation has *ended*. So that's why debt maturity being distant in time is good, and it's also why lease expiration being sooner rather than later is good.<br /><br />Regards,<br />aagoldAnonymousnoreply@blogger.com