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Lessor Leases | 6 Months Ended
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Jun. 30, 2023
Leases [Abstract] |
Lessor Leases | Lessor Leases Sales-Type Leases The Company enters into multi-year, sales-type lease agreements, with the leases varying in length from one to ten years. The Company optimizes cash flows by selling a majority of its non-U.S. government sales-type leases, other than Advanced Services sales-type leases, to third-party leasing finance companies on a non-recourse basis. The Company has no obligation to the leasing company once the lease has been sold. Some of the Company’s sales-type leases, mostly those relating to U.S. government hospitals which comprised approximately 26% of the lease receivable balance as of June 30, 2023, and those associated with financed service contracts related to certain Advanced Services products, including Central Pharmacy Dispensing Service and IV Compounding Service, are retained in-house by the Company. The following table presents the Company’s income recognized from sales-type leases for the three and six months ended June 30, 2023 and 2022:
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
| (In thousands)
Sales-type lease revenues | $ | 7,856 |  |  | $ | 17,413 |  |  | $ | 13,572 |  |  | $ | 23,918 |
Cost of sales-type lease revenues | (4,380) |  |  | (8,528) |  |  | (7,042) |  |  | (11,606) |
Selling profit on sales-type lease revenues | $ | 3,476 |  |  | $ | 8,885 |  |  | $ | 6,530 |  |  | $ | 12,312 |
The receivables as a result of these types of transactions are collateralized by the underlying equipment leased and consist of the following components at June 30, 2023 and December 31, 2022:
| June 30, 2023 |  | December 31, 2022
| (In thousands)
Net minimum lease payments to be received | $ | 53,675 |  |  | $ | 50,755 |
Less: Unearned interest income portion | (7,558) |  |  | (6,345) |
Net investment in sales-type leases | 46,117 |  |  | 44,410 |
Less: Current portion (1) | (11,078) |  |  | (11,486) |
Long-term investment in sales-type leases, net | $ | 35,039 |  |  | $ | 32,924 |
_________________________________________________ (1) The current portion of the net investment in sales-type leases is included in other current assets in the Condensed Consolidated Balance Sheets. The carrying amount of the Company’s sales-type lease receivables is a reasonable estimate of fair value. The maturity schedule of future minimum lease payments under sales-type leases retained in-house and the reconciliation to the net investment in sales-type leases reported on the Condensed Consolidated Balance Sheets was as follows:
| June 30, 2023
| (In thousands)
Remaining six months of 2023 | $ | 6,956 |
2024 | 11,780 |
2025 | 9,360 |
2026 | 7,727 |
2027 | 6,280 |
Thereafter | 11,572 |
Total future minimum sales-type lease payments | 53,675 |
Present value adjustment | (7,558) |
Total net investment in sales-type leases | $ | 46,117 |
Operating Leases The following table represents the Company’s income recognized from operating leases for the three and six months ended June 30, 2023 and 2022:
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
| (In thousands)
Rental income | $ | 1,870 |  |  | $ | 2,421 |  |  | $ | 4,129 |  |  | $ | 4,893 |
Lessor Leases | Lessor Leases Sales-Type Leases The Company enters into multi-year, sales-type lease agreements, with the leases varying in length from one to ten years. The Company optimizes cash flows by selling a majority of its non-U.S. government sales-type leases, other than Advanced Services sales-type leases, to third-party leasing finance companies on a non-recourse basis. The Company has no obligation to the leasing company once the lease has been sold. Some of the Company’s sales-type leases, mostly those relating to U.S. government hospitals which comprised approximately 26% of the lease receivable balance as of June 30, 2023, and those associated with financed service contracts related to certain Advanced Services products, including Central Pharmacy Dispensing Service and IV Compounding Service, are retained in-house by the Company. The following table presents the Company’s income recognized from sales-type leases for the three and six months ended June 30, 2023 and 2022:
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
| (In thousands)
Sales-type lease revenues | $ | 7,856 |  |  | $ | 17,413 |  |  | $ | 13,572 |  |  | $ | 23,918 |
Cost of sales-type lease revenues | (4,380) |  |  | (8,528) |  |  | (7,042) |  |  | (11,606) |
Selling profit on sales-type lease revenues | $ | 3,476 |  |  | $ | 8,885 |  |  | $ | 6,530 |  |  | $ | 12,312 |
The receivables as a result of these types of transactions are collateralized by the underlying equipment leased and consist of the following components at June 30, 2023 and December 31, 2022:
| June 30, 2023 |  | December 31, 2022
| (In thousands)
Net minimum lease payments to be received | $ | 53,675 |  |  | $ | 50,755 |
Less: Unearned interest income portion | (7,558) |  |  | (6,345) |
Net investment in sales-type leases | 46,117 |  |  | 44,410 |
Less: Current portion (1) | (11,078) |  |  | (11,486) |
Long-term investment in sales-type leases, net | $ | 35,039 |  |  | $ | 32,924 |
_________________________________________________ (1) The current portion of the net investment in sales-type leases is included in other current assets in the Condensed Consolidated Balance Sheets. The carrying amount of the Company’s sales-type lease receivables is a reasonable estimate of fair value. The maturity schedule of future minimum lease payments under sales-type leases retained in-house and the reconciliation to the net investment in sales-type leases reported on the Condensed Consolidated Balance Sheets was as follows:
| June 30, 2023
| (In thousands)
Remaining six months of 2023 | $ | 6,956 |
2024 | 11,780 |
2025 | 9,360 |
2026 | 7,727 |
2027 | 6,280 |
Thereafter | 11,572 |
Total future minimum sales-type lease payments | 53,675 |
Present value adjustment | (7,558) |
Total net investment in sales-type leases | $ | 46,117 |
Operating Leases The following table represents the Company’s income recognized from operating leases for the three and six months ended June 30, 2023 and 2022:
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
| (In thousands)
Rental income | $ | 1,870 |  |  | $ | 2,421 |  |  | $ | 4,129 |  |  | $ | 4,893 |

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