EX-99.1

Sample

Lease Number

Sample Characteristic

Preliminary

Data File Value

Source

Document Value

FICO score

FICO score

EX-99.1 2 d528735dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

LOGO

Report of Independent Accountants on Applying Agreed-Upon Procedures

Tesla Finance LLC

TALT Holdings, LLC

3500 Deer Creek Road

Palo Alto, California 94304

Re:

Tesla Auto Lease Trust 2018-A (the “Issuing Entity”)

Asset-Backed Notes (the “Notes”)

Sample Lease Agreed-Upon Procedures

We have performed the procedures enumerated in Attachment A, which were agreed to by Tesla Finance LLC (the “Sponsor”), TALT Holdings, LLC (the “Depositor”), Citigroup Global Markets Inc. (“Citi”), Deutsche Bank Securities Inc. (“Deutsche Bank”) and Merrill Lynch, Pierce, Fenner & Smith Incorporated (“BofA Merrill Lynch,” together with the Sponsor, Depositor, Citi and Deutsche Bank, the “Specified Parties”), solely to assist the Depositor in evaluating the accuracy of certain information with respect to a pool of closed-end vehicle leases and the related leased vehicles (the “Leases”) relating to the Issuing Entity’s securitization transaction. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of the procedures is solely the responsibility of the Specified Parties. Consequently, we make no representation regarding the sufficiency of the procedures described in Attachment A, either for the purpose for which this report has been requested or for any other purpose.

The procedures performed and our associated findings are included in Attachment A.

For the purpose of the procedures described in this report, the Sponsor, on behalf of the Depositor, provided us with:

An electronic data file labeled “November Data Tape (12.15.17) vEY.xlsx” and the corresponding record layout and decode information (the “Preliminary Data File”) that the Sponsor, on behalf of the Depositor, indicated contains information on certain closed-end vehicle leases (the “Preliminary Leases”) as of 30 November 2017 (the “Preliminary Cut-off Date”) that the Sponsor, on behalf of the Depositor, indicated are expected to be representative of the Leases,


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b.	Imaged copies of:

The motor vehicle lease agreement, lease agreement, lease, vehicle lease extension and/or vehicle lease assignment and assumption agreement (collectively and as applicable, the “Contract”),

ii.

Certain printed screen shots from the Sponsor’s lease servicing system (collectively, the “System Screen Shots”) and

iii.

The certificate of title, New York vehicle record, DMV title screen shot and/or title information screen shot, (collectively and as applicable, the “Title,” together with the Contract and System Screen Shots, the “Source Documents”)

relating to each Sample Lease (as defined in Attachment A),

c.	The list of relevant characteristics (the “Sample Characteristics”) on the Preliminary Data File, which is shown on Exhibit 1 to Attachment A, and

d.	Instructions, assumptions and methodologies, which are described in Attachment A.

The procedures included in Attachment A were limited to comparing, observing or recalculating certain information that is further described in Attachment A. The Depositor is responsible for the Preliminary Data File, Source Documents, Sample Characteristics and the determination of the instructions, assumptions and methodologies that are described herein. We were not requested to perform and we have not performed any procedures other than those listed in Attachment A with respect the Preliminary Data File. We have not verified, and we make no representation as to, the accuracy, completeness or reasonableness of the Source Documents or any other information provided to us by the Sponsor, on behalf of the Depositor, upon which we relied in forming our findings. Accordingly, we make no representation and express no opinion as to (a) the existence of the Preliminary Leases or Leases, (b) questions of legal or tax interpretation and (c) the accuracy, completeness or reasonableness of any instructions, assumptions and methodologies provided to us by the Sponsor, on behalf of the Depositor, that are described in this report. We undertake no responsibility to update this report for events and circumstances occurring after the date hereof.

We were not engaged to, and did not, conduct an examination to express an opinion or a review to express a conclusion in accordance with attestation standards established by the American Institute of Certified Public Accountants on any of the items referred to herein. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

The agreed-upon procedures described in this report were not performed for the purpose of:

a.	Satisfying any criteria for due diligence published by a nationally recognized statistical rating organization (a “rating agency”) or

b.	Making any findings with respect to:

Whether the origination of the Leases conformed to, or deviated from, stated underwriting or credit extension guidelines, standards, criteria or other requirements,

ii.

The value of the collateral securing the Leases,

iii.

Whether the originator of the Leases complied with federal, state or local laws or regulations or

iv.

Any other factor or characteristic of the Leases that would be material to the likelihood that the issuer of the Notes will pay interest and principal in accordance with applicable terms and conditions.


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This report is intended solely for the use of the Specified Parties and is not intended to be and should not be used by anyone other than the Specified Parties. It is not intended to be and should not be used by any other person or entity, including investors and rating agencies, who are not identified in the report as Specified Parties but who may have access to this report as required by law or regulation.

/s/ Ernst & Young LLP

18 January 2018


				Attachment A

Procedures performed and our associated findings

As instructed by the Sponsor, on behalf of the Depositor, we randomly selected a sample of 125 Preliminary Leases from the Preliminary Data File (the “Sample Leases”). For the purpose of this procedure, the Sponsor, on behalf of the Depositor, did not inform us as to the basis for how they determined the number of Sample Leases they instructed us to randomly select from the Preliminary Data File.

For the purpose of the procedures described in this report, the 125 Sample Leases are referred to as Sample Lease Numbers 1 through 125.

2.	For each Sample Lease, we:

Compared the Sample Characteristics listed on Exhibit 1 to Attachment A, as shown on the Preliminary Data File, to the corresponding information located on, or to the corresponding information we recalculated using information located on, the Source Documents, subject to the instructions, assumptions and methodologies provided by the Sponsor, on behalf of the Depositor, that are stated in the notes to Exhibit 1 to Attachment A. The Source Document(s) that we were instructed by the Sponsor, on behalf of the Depositor, to use for each Sample Characteristic are shown on Exhibit 1 to Attachment A. Except for the information shown on Exhibit 2 to Attachment A, all such compared information was in agreement.

Observed that the corresponding Contract contained a signature in the lessee signature section of the Contract. We performed no procedures to determine the validity of the signature contained in the lessee signature section of the Contract.

Observed that “Tesla Finance LLC,” “Tesla Lease Trust” or “Tesla Lease Trust LSR” was the named lien holder or owner on the Title, or that the lien holder had assigned the vehicle securing the Sample Lease to “Tesla Finance LLC,” “Tesla Lease Trust” or “Tesla Lease Trust LSR” on the Title.

Exhibit 1 to Attachment A

Page 1 of 3

Sample Characteristics and Source Documents


Sample Characteristic	Preliminary Data File Field Name	Source Document(s)	Note(s)
Lease account number	Account Number	System Screen Shots	i., ii.

Vehicle model year	Vehicle Model Year	Contract

Vehicle make	Vehicle Make and Model	Contract	iii.

Vehicle model	Vehicle Make and Model	Contract	iv.

Vehicle age classification (new/used)	New/Used	Contract

Monthly base payment amount	Scheduled Base Payment Amount	Contract

Original term to maturity	Original Term	Contract

Original capitalized cost	Original Capitalized Cost	Contract

Contract residual value	Contractual Residual Amount	Contract

Manufacturer’s suggested retail price	Vehicle MSRP	System Screen Shots

Lease rate (money factor)	Buy Rate (APR)	Contract and recalculation	v.

VIN	VIN	Contract and Title

Maturity date	Current Maturity Date	Contract

Remaining term to maturity	Remaining Term	Contract and recalculation	vi.

FICO score	FICO Score	System Screen Shots	vii., viii., ix., x.

Customer state	Customer State	Contract

Original first payment date	First Payment Due Date	Contract	xi.

Notes:

i.	For identification purposes.

ii.	For the purpose of comparing the lease account number Sample Characteristic for each Sample Lease, the Sponsor, on behalf of the Depositor, instructed us add 200 to the reservation number, as shown on the System Screen Shots.

Exhibit 1 to Attachment A

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Notes: (continued)

iii.

For the purpose of comparing the vehicle make Sample Characteristic for each Sample Lease, the Sponsor, on behalf of the Depositor, instructed us to note agreement with a vehicle make value containing “TESLA,” as shown on the Preliminary Data File, if the corresponding vehicle make value was “Tesla,” as shown on the Contract.

iv.	For the purpose of comparing the vehicle model Sample Characteristic for each Sample Lease, the Sponsor, on behalf of the Depositor, instructed us to ignore the word “TESLA,” as shown on the Preliminary Data File.

v.	For the purpose of comparing the lease rate (money factor) Sample Characteristic for each Sample Lease, the Sponsor, on behalf of the Depositor, instructed us to recalculate the lease rate (money factor) by:

Dividing the rent charge by the original term to maturity, both as shown on the Contract,

Dividing the result obtained in a. above by the sum of the adjusted capitalized cost and contract residual value, both as shown on the Contract, and

Multiplying the result obtained in b. above by 2,400.

vi.	For the purpose of comparing the remaining term to maturity Sample Characteristic for each Sample Lease, the Sponsor, on behalf of the Depositor, instructed us to recalculate the remaining term to maturity by:

Calculating the difference in months between the Preliminary Cut-off Date and maturity date, as shown on the Contract, and

Subtracting 1 from the result obtained in a. above.

vii.

For the purpose of comparing the FICO score Sample Characteristic for each Sample Lease (except for Sample Lease Numbers 31, 58 and 76), the Sponsor, on behalf of the Depositor, instructed us to use the FICO score value, as shown on the System Screen Shots, in accordance with notes viii. and ix. below.

viii.

For the purpose of comparing the FICO score Sample Characteristic for each Sample Lease (except for Sample Lease Numbers 31, 58 and 76), the Sponsor, on behalf of the Depositor, instructed us to use the FICO score – CB value, as shown on the System Screen Shots, if the FICO score value, as shown on the System Screen Shots, was blank.

ix.

For the purpose of comparing the FICO score Sample Characteristic for each Sample Lease (except for Sample Lease Numbers 31, 58 and 76), the Sponsor, on behalf of the Depositor, instructed us to note agreement with a Preliminary Data File value of “No score” if the System Screen Shots showed a FICO score value of “0.”

Exhibit 1 to Attachment A

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Notes: (continued)

The Sponsor, on behalf of the Depositor, instructed us not to compare the FICO score Sample Characteristic for Sample Lease Numbers 31, 58 and 76. The Sponsor, on behalf of the Depositor, indicated that no FICO scores are available for Sample Leases that have a commercial lease flag value of “commercial,” as shown on the Preliminary Data File.

xi.

For the purpose of comparing the original first payment date Sample Characteristic for each Sample Lease, the Sponsor, on behalf of the Depositor, instructed us to note agreement if the original first payment date value, as shown on the Preliminary Data File, is the 1^st of the month following an original first payment date value that falls on the 29^th, 30^th, or 31^st day of the month, as shown on the Contract.

We performed no procedures to determine the accuracy, completeness or reasonableness of the instructions, assumptions and methodologies provided by the Sponsor, on behalf of the Depositor, that are described in the notes above.

Exhibit 2 to Attachment A

Sample Characteristic Differences