Sales-type Lease

9 Months Ended

Sep. 30, 2016

Leases [Abstract]

Sales-type Lease

Note 8— Sales-type Lease

The Company has a sales-type lease with one of its customers. Under the terms of the original agreement, the Company provided a high performance computing solution to the customer for a term of four years, beginning at the customer’s acceptance of the system. In the second quarter of 2016, the Company delivered a second high performance computing solution and extended the original agreement, which will now end in September 2020. The lease extension, and delivery of the second high performance computing solution, has been accounted for as a separate sale and is not considered a lease modification. The lease is designated in British Pounds and the Company has entered into certain foreign currency exchange contracts that act as an economic hedge for the foreign currency exposure associated with this arrangement.

The following table shows the components of the net investment in the sales-type lease as of September 30, 2016 and December 31, 2015 (in thousands):

	September 30, 2016			December 31, 2015
Total minimum lease payments to be received	$	58,379		$	36,863
Less: executory costs	(11,705		)	(7,434		)
Net minimum lease payments receivable	46,674			29,429
Less: unearned income	(2,813		)	(1,108		)
Net investment in sales-type lease	43,861			28,321
Less: long-term investment in sales-type lease	(34,797		)	(18,317		)
Investment in sales-type lease included in accounts and other receivables	$	9,064		$	10,004

As of September 30, 2016, minimum lease payments for each of the succeeding five fiscal years are as follows (in thousands):

2016 (less than 1 year)	$	3,388
2017	14,405
2018	14,592
2019	14,863
2020	11,131
Total minimum lease payments to be received	$	58,379