LEASES

6 Months Ended

Jun. 30, 2024

Lessor Information related to Intuitive System Leasing

Sales-type Leases. Lease receivables relating to sales-type lease arrangements are presented on the Condensed Consolidated Balance Sheets as follows (in millions):


	As of
	June 30, 2024		December 31, 2023
Gross lease receivables	$	366.4	$	384.5
Unearned income	(12.8)		(12.9)
Subtotal	353.6		371.6
Allowance for credit loss	(2.6)		(2.7)
Net investment in sales-type leases	$	351.0	$	368.9
Reported as:
Prepaids and other current assets	$	134.1	$	137.3
Intangible and other assets, net	216.9		231.6
Net investment in sales-type leases	$	351.0	$	368.9

Contractual maturities of gross lease receivables as of June 30, 2024, are as follows (in millions):


Fiscal Year	Amount
Remainder of 2024	$	75.8
2025	125.3
2026	86.0
2027	50.0
2028	21.6
2029 and thereafter	7.7
Total	$	366.4

The Company enters into sales-type leases with certain qualified customers to purchase its systems. Sales-type leases have terms that generally range from 24 to 84 months and are usually collateralized by a security interest in the underlying assets. The allowance for loan loss is based on the Company’s assessment of the current expected lifetime loss on lease receivables. The Company regularly reviews the allowance by considering factors such as historical experience, credit quality, age of the lease receivable balances, and current economic conditions that may affect a customer’s ability to pay. Lease receivables are considered past due 90 days after invoice.

The Company manages the credit risk of the net investment in sales-type leases using a number of factors relating to its customers, including, but not limited to, the following: size of operations; profitability, liquidity, and debt ratios; payment history; and past due amounts. The Company also uses credit scores obtained from external providers as a key indicator for the purposes of determining credit quality. The following table summarizes the amortized cost basis by year of origination and by credit quality for the net investment in sales-type leases as of June 30, 2024 (in millions):


	2024		2023		2022		2021		2020		Prior		Net Investment
Credit Rating:
High	$	22.4	$	40.2	$	50.9	$	43.7	$	16.8	$	4.5	$	178.5
Moderate	34.3		23.2		51.4		37.1		15.6		2.3		163.9
Low	4.7		1.8		2.3		1.9		0.5		—		11.2
Total	$	61.4	$	65.2	$	104.6	$	82.7	$	32.9	$	6.8	$	353.6