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Lessor Leases
12 Months Ended
Dec. 31, 2019
Leases [Abstract]  
Lessor Leases Lessor Leases
Sales-Type Leases
On a recurring basis, the Company enters into multi-year, sales-type lease agreements with the majority varying in length from one to five years. The following table presents the Company’s income recognized from sales-type leases for the years ended December 31, 2019, 2018, and 2017:
Year Ended December 31,
201920182017
(In thousands)
Sales-type lease revenues$37,175  $39,167  $29,675  
Cost of sales-type lease revenues(14,985) (16,185) (12,395) 
Selling profit on sales-type lease revenues$22,190  $22,982  $17,280  
Interest income on sales-type lease receivables$1,756  $1,296  $992  
The receivables as a result of these types of transactions are collateralized by the underlying equipment leased and consist of the following components at December 31, 2019 and 2018:
December 31,
20192018
(In thousands) 
Net minimum lease payments to be received$32,360  $28,295  
Less: Unearned interest income portion(2,840) (2,477) 
Net investment in sales-type leases29,520  25,818  
Less: Current portion (1)
(9,770) (8,736) 
Long-term investment in sales-type leases, net$19,750  $17,082  
_________________________________________________
(1) The current portion of the net investment in sales-type leases is included in other current assets in the Consolidated Balance Sheets.
The carrying amount of the Company’s sales-type lease receivables is a reasonable estimate of fair value.
The Company evaluates its sales-type leases individually and collectively for impairment. The allowance for credit losses was $0.2 million as of both December 31, 2019 and 2018.
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 Consolidated Balance Sheets was as follows:
December 31, 2019
(In thousands)
2020$10,690  
20217,473  
20226,768  
20234,754  
20241,852  
Thereafter823  
Total future minimum sales-type lease payments  32,360  
Present value adjustment  (2,840) 
Total net investment in sales-type leases  $29,520  
Operating Leases
The Company entered into certain leasing agreements that were classified as operating leases prior to the adoption of the new lease accounting standard. These agreements in place prior to January 1, 2019 will continue to be treated as operating leases, however any new leasing agreements entered into on or after January 1, 2019 under these programs are classified and accounted for as sales-type leases in accordance with the new lease accounting standard. The operating lease arrangements generally have initial terms of one to seven years. The following table represents the Company’s income recognized from operating leases for the years ended December 31, 2019, 2018, and 2017:
Year Ended December 31,
201920182017
(In thousands)
Rental income$12,660  $12,207  $10,993  
The net carrying value of the leased equipment under operating leases was $2.1 million and $2.6 million, which includes accumulated depreciation of $1.6 million and $1.2 million, as of December 31, 2019 and 2018, respectively. Depreciation expense of the leased equipment for the years ended December 31, 2019, 2018, and 2017 was $0.7 million, $0.5 million, and $0.3 million, respectively.
The maturity schedule of future minimum lease payments under operating leases was as follows:
December 31, 2019
(In thousands)
2020$10,415  
20216,829  
20224,941  
20232,914  
2024884  
Thereafter345  
Total future minimum operating lease payments  $26,328  
Lessor Leases Lessor Leases
Sales-Type Leases
On a recurring basis, the Company enters into multi-year, sales-type lease agreements with the majority varying in length from one to five years. The following table presents the Company’s income recognized from sales-type leases for the years ended December 31, 2019, 2018, and 2017:
Year Ended December 31,
201920182017
(In thousands)
Sales-type lease revenues$37,175  $39,167  $29,675  
Cost of sales-type lease revenues(14,985) (16,185) (12,395) 
Selling profit on sales-type lease revenues$22,190  $22,982  $17,280  
Interest income on sales-type lease receivables$1,756  $1,296  $992  
The receivables as a result of these types of transactions are collateralized by the underlying equipment leased and consist of the following components at December 31, 2019 and 2018:
December 31,
20192018
(In thousands) 
Net minimum lease payments to be received$32,360  $28,295  
Less: Unearned interest income portion(2,840) (2,477) 
Net investment in sales-type leases29,520  25,818  
Less: Current portion (1)
(9,770) (8,736) 
Long-term investment in sales-type leases, net$19,750  $17,082  
_________________________________________________
(1) The current portion of the net investment in sales-type leases is included in other current assets in the Consolidated Balance Sheets.
The carrying amount of the Company’s sales-type lease receivables is a reasonable estimate of fair value.
The Company evaluates its sales-type leases individually and collectively for impairment. The allowance for credit losses was $0.2 million as of both December 31, 2019 and 2018.
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 Consolidated Balance Sheets was as follows:
December 31, 2019
(In thousands)
2020$10,690  
20217,473  
20226,768  
20234,754  
20241,852  
Thereafter823  
Total future minimum sales-type lease payments  32,360  
Present value adjustment  (2,840) 
Total net investment in sales-type leases  $29,520  
Operating Leases
The Company entered into certain leasing agreements that were classified as operating leases prior to the adoption of the new lease accounting standard. These agreements in place prior to January 1, 2019 will continue to be treated as operating leases, however any new leasing agreements entered into on or after January 1, 2019 under these programs are classified and accounted for as sales-type leases in accordance with the new lease accounting standard. The operating lease arrangements generally have initial terms of one to seven years. The following table represents the Company’s income recognized from operating leases for the years ended December 31, 2019, 2018, and 2017:
Year Ended December 31,
201920182017
(In thousands)
Rental income$12,660  $12,207  $10,993  
The net carrying value of the leased equipment under operating leases was $2.1 million and $2.6 million, which includes accumulated depreciation of $1.6 million and $1.2 million, as of December 31, 2019 and 2018, respectively. Depreciation expense of the leased equipment for the years ended December 31, 2019, 2018, and 2017 was $0.7 million, $0.5 million, and $0.3 million, respectively.
The maturity schedule of future minimum lease payments under operating leases was as follows:
December 31, 2019
(In thousands)
2020$10,415  
20216,829  
20224,941  
20232,914  
2024884  
Thereafter345  
Total future minimum operating lease payments  $26,328