Leases

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Leases

Leases

Lessee Information

We have operating leases for our digital treatment planning and office facilities, retail spaces, vehicles and office equipment. The components of lease expenses consist of following (in thousands):

	Year Ended December 31,
Lease Cost	2022		2021		2020
Operating lease cost 1	$	37,919	$	33,241	$	27,825
Variable lease cost 2	22,084		11,134		1,429
Total lease cost	$	60,003	$	44,375	$	29,254

1    Includes expense associated with short term leases of less than 12 months which is not material

2    Includes payments related to agreements with embedded leases that are not otherwise reflected on the balance sheet. These costs are primarily associated with our manufacturing supply arrangements and fluctuate based on factory output and material price changes.

The following table provides a summary of our operating lease terms and discount rates:

	December 31,
Remaining Lease Term and Discount Rate	2022		2021
Weighted average remaining lease term (in years)	7.2		7.8
Weighted average discount rate	3.5	%	3.2	%

As of December 31, 2022, the future payments related to our operating lease liabilities are as follows (in thousands):

Fiscal Year Ending December 31,	Operating Leases
2023	$	30,596
2024	24,606
2025	19,480
2026	16,511
2027	13,363
Thereafter	39,449
Total lease payments	144,005
Less: Imputed interest	(17,097)
Total lease liabilities	$	126,908

As of December 31, 2022, we had additional leases that have not yet commenced with future lease payments of $14.3 million. These leases will commence during 2023 with non-cancelable lease terms of three to six years.

Lessor Information

We lease iTero intraoral scanners to customers which are classified as operating leases. Our portfolio of leased iTero scanners included in Property, plant and equipment, net are as follows:

	December 31,
	2022		2021
Scanners under operating leases, gross	$	22,914	$	10,927
Less: accumulated depreciation	(3,919)		(785)
Scanners under operating leases, net	$	18,995	$	10,142

As of December 31, 2022, the future lease payments due to us are as follows (in thousands):

Fiscal Year Ending December 31,	Operating Leases
2023	$	15,714
2024	13,967
2025	6,202
Total lease payments	$	35,883

For the year ended December 31, 2022, operating lease income was $12.3 million and for the years ended December 31, 2021 and 2020, operating lease income was not material.

Leases

Leases

Lessee Information

We have operating leases for our digital treatment planning and office facilities, retail spaces, vehicles and office equipment. The components of lease expenses consist of following (in thousands):

	Year Ended December 31,
Lease Cost	2022		2021		2020
Operating lease cost 1	$	37,919	$	33,241	$	27,825
Variable lease cost 2	22,084		11,134		1,429
Total lease cost	$	60,003	$	44,375	$	29,254

1    Includes expense associated with short term leases of less than 12 months which is not material

2    Includes payments related to agreements with embedded leases that are not otherwise reflected on the balance sheet. These costs are primarily associated with our manufacturing supply arrangements and fluctuate based on factory output and material price changes.

The following table provides a summary of our operating lease terms and discount rates:

	December 31,
Remaining Lease Term and Discount Rate	2022		2021
Weighted average remaining lease term (in years)	7.2		7.8
Weighted average discount rate	3.5	%	3.2	%

As of December 31, 2022, the future payments related to our operating lease liabilities are as follows (in thousands):

Fiscal Year Ending December 31,	Operating Leases
2023	$	30,596
2024	24,606
2025	19,480
2026	16,511
2027	13,363
Thereafter	39,449
Total lease payments	144,005
Less: Imputed interest	(17,097)
Total lease liabilities	$	126,908

As of December 31, 2022, we had additional leases that have not yet commenced with future lease payments of $14.3 million. These leases will commence during 2023 with non-cancelable lease terms of three to six years.

Lessor Information

We lease iTero intraoral scanners to customers which are classified as operating leases. Our portfolio of leased iTero scanners included in Property, plant and equipment, net are as follows:

	December 31,
	2022		2021
Scanners under operating leases, gross	$	22,914	$	10,927
Less: accumulated depreciation	(3,919)		(785)
Scanners under operating leases, net	$	18,995	$	10,142

As of December 31, 2022, the future lease payments due to us are as follows (in thousands):

Fiscal Year Ending December 31,	Operating Leases
2023	$	15,714
2024	13,967
2025	6,202
Total lease payments	$	35,883

For the year ended December 31, 2022, operating lease income was $12.3 million and for the years ended December 31, 2021 and 2020, operating lease income was not material.