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Lessor Leases | 9 Months Ended
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Sep. 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 sales-type leases, other than those relating to U.S. government hospitals and Advanced Services products, including Central Pharmacy Dispensing Service and IV Compounding Service, 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. The following table presents the Company’s income recognized from sales-type leases for the three and nine months ended September 30, 2023 and 2022:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
| (In thousands)
Sales-type lease revenues | $ | 14,388 |  |  | $ | 10,115 |  |  | $ | 27,960 |  |  | $ | 34,033 |
Cost of sales-type lease revenues | (7,141) |  |  | (5,357) |  |  | (14,183) |  |  | (16,963) |
Selling profit on sales-type lease revenues | $ | 7,247 |  |  | $ | 4,758 |  |  | $ | 13,777 |  |  | $ | 17,070 |
The receivables as a result of these types of transactions are collateralized by the underlying equipment leased and consist of the following components at September 30, 2023 and December 31, 2022:
| September 30, 2023 |  | December 31, 2022
| (In thousands)
Net minimum lease payments to be received | $ | 62,470 |  |  | $ | 50,755 |
Less: Unearned interest income portion | (9,221) |  |  | (6,345) |
Net investment in sales-type leases | 53,249 |  |  | 44,410 |
Less: Current portion (1) | (11,618) |  |  | (11,486) |
Long-term investment in sales-type leases, net | $ | 41,631 |  |  | $ | 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:
| September 30, 2023
| (In thousands)
Remaining three months of 2023 | $ | 3,828 |
2024 | 13,431 |
2025 | 11,351 |
2026 | 9,053 |
2027 | 7,286 |
Thereafter | 17,521 |
Total future minimum sales-type lease payments | 62,470 |
Present value adjustment | (9,221) |
Total net investment in sales-type leases | $ | 53,249 |
Operating Leases The following table represents the Company’s income recognized from operating leases for the three and nine months ended September 30, 2023 and 2022:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
| (In thousands)
Rental income | $ | 1,330 |  |  | $ | 2,327 |  |  | $ | 5,459 |  |  | $ | 7,220 |
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 sales-type leases, other than those relating to U.S. government hospitals and Advanced Services products, including Central Pharmacy Dispensing Service and IV Compounding Service, 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. The following table presents the Company’s income recognized from sales-type leases for the three and nine months ended September 30, 2023 and 2022:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
| (In thousands)
Sales-type lease revenues | $ | 14,388 |  |  | $ | 10,115 |  |  | $ | 27,960 |  |  | $ | 34,033 |
Cost of sales-type lease revenues | (7,141) |  |  | (5,357) |  |  | (14,183) |  |  | (16,963) |
Selling profit on sales-type lease revenues | $ | 7,247 |  |  | $ | 4,758 |  |  | $ | 13,777 |  |  | $ | 17,070 |
The receivables as a result of these types of transactions are collateralized by the underlying equipment leased and consist of the following components at September 30, 2023 and December 31, 2022:
| September 30, 2023 |  | December 31, 2022
| (In thousands)
Net minimum lease payments to be received | $ | 62,470 |  |  | $ | 50,755 |
Less: Unearned interest income portion | (9,221) |  |  | (6,345) |
Net investment in sales-type leases | 53,249 |  |  | 44,410 |
Less: Current portion (1) | (11,618) |  |  | (11,486) |
Long-term investment in sales-type leases, net | $ | 41,631 |  |  | $ | 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:
| September 30, 2023
| (In thousands)
Remaining three months of 2023 | $ | 3,828 |
2024 | 13,431 |
2025 | 11,351 |
2026 | 9,053 |
2027 | 7,286 |
Thereafter | 17,521 |
Total future minimum sales-type lease payments | 62,470 |
Present value adjustment | (9,221) |
Total net investment in sales-type leases | $ | 53,249 |
Operating Leases The following table represents the Company’s income recognized from operating leases for the three and nine months ended September 30, 2023 and 2022:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
| (In thousands)
Rental income | $ | 1,330 |  |  | $ | 2,327 |  |  | $ | 5,459 |  |  | $ | 7,220 |

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