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Lessor Leases
 3 Months Ended
Mar. 31, 2020
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 Company optimizes cash flows by selling a majority of its non-U.S. government sales-type leases 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. Some of the Company's sales-type leases, mostly those relating to U.S. government hospitals which comprise approximately 61% of the lease receivable balance, are retained in-house.
The following table presents the Company’s income recognized from sales-type leases for the three months ended March 31, 2020 and 2019:
Three Months Ended March 31,
20202019
(In thousands)
Sales-type lease revenues$6,392  $11,507  
Cost of sales-type lease revenues(2,569) (4,820) 
Selling profit on sales-type lease revenues$3,823  $6,687  
Interest income on sales-type lease receivables$461  $409  
The receivables as a result of these types of transactions are collateralized by the underlying equipment leased and consist of the following components at March 31, 2020 and December 31, 2019:
March 31,
2020		December 31,
2019
(In thousands)
Net minimum lease payments to be received$32,681  $32,360  
Less: Unearned interest income portion(2,893) (2,840) 
Net investment in sales-type leases29,788  29,520  
Less: Current portion (1)
(9,796) (9,770) 
Long-term investment in sales-type leases, net$19,992  $19,750  
_________________________________________________
(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:
March 31,
2020
(In thousands)
Remaining nine months of 2020$8,838  
20218,048  
20227,283  
20235,110  
20242,393  
Thereafter  1,009  
Total future minimum sales-type lease payments  32,681  
Present value adjustment  (2,893) 
Total net investment in sales-type leases  $29,788  
Operating Leases
The Company entered into certain leasing agreements that were classified as operating leases prior to the adoption of ASC 842, Leases, on January 1, 2019. 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 ASC 842. 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 three months ended March 31, 2020 and 2019:
Three Months Ended March 31,
20202019
(In thousands)
Rental income$2,977  $3,287  
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 Company optimizes cash flows by selling a majority of its non-U.S. government sales-type leases 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. Some of the Company's sales-type leases, mostly those relating to U.S. government hospitals which comprise approximately 61% of the lease receivable balance, are retained in-house.
The following table presents the Company’s income recognized from sales-type leases for the three months ended March 31, 2020 and 2019:
Three Months Ended March 31,
20202019
(In thousands)
Sales-type lease revenues$6,392  $11,507  
Cost of sales-type lease revenues(2,569) (4,820) 
Selling profit on sales-type lease revenues$3,823  $6,687  
Interest income on sales-type lease receivables$461  $409  
The receivables as a result of these types of transactions are collateralized by the underlying equipment leased and consist of the following components at March 31, 2020 and December 31, 2019:
March 31,
2020		December 31,
2019
(In thousands)
Net minimum lease payments to be received$32,681  $32,360  
Less: Unearned interest income portion(2,893) (2,840) 
Net investment in sales-type leases29,788  29,520  
Less: Current portion (1)
(9,796) (9,770) 
Long-term investment in sales-type leases, net$19,992  $19,750  
_________________________________________________
(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:
March 31,
2020
(In thousands)
Remaining nine months of 2020$8,838  
20218,048  
20227,283  
20235,110  
20242,393  
Thereafter  1,009  
Total future minimum sales-type lease payments  32,681  
Present value adjustment  (2,893) 
Total net investment in sales-type leases  $29,788  
Operating Leases
The Company entered into certain leasing agreements that were classified as operating leases prior to the adoption of ASC 842, Leases, on January 1, 2019. 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 ASC 842. 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 three months ended March 31, 2020 and 2019:
Three Months Ended March 31,
20202019
(In thousands)
Rental income$2,977  $3,287