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Leases
 12 Months Ended
Jun. 30, 2022
Leases [Abstract]  
Leases Leases
(a)Leases where ResMed is the Lessee
We determine whether a contract is, or contains, a lease at inception. ROU assets represent our right to use an underlying asset during the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at lease commencement based upon the estimated present value of unpaid lease payments over the lease term. We use our incremental borrowing rate based on the information available at lease commencement in determining the present value of unpaid lease payments. ROU assets also include any lease payments made at or before lease commencement and any initial direct costs incurred, and exclude any lease incentives received.
We determine the lease term as the non-cancellable period of the lease, and may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Leases with a term of 12 months or less are not recognized on the balance sheet. Some of our leases include variable lease payments that are based on costs incurred or actual usage, or adjusted periodically based on an index or a rate. Our leases do not contain any residual value guarantees and we do not account for lease and non-lease components as a single lease component. Operating leases are included in operating lease right-of-use assets and operating lease liabilities on our consolidated balance sheets. We lease certain office space, warehouses and distribution centers, manufacturing facilities, vehicles, and equipment with remaining lease terms ranging from less than 1 year to 14 years, some of which include options to extend or terminate the leases.
Operating lease costs for the years ended June 30, 2022, 2021 and 2020 were $35.3 million, $35.5 million and $26.5 million, respectively. Short-term and variable lease costs were not material for the years ended June 30, 2022, 2021 and 2020.
Future lease payments under non-cancellable operating leases as of June 30, 2022 are as follows (in thousands):
Total20232024202520262027Thereafter
Minimum lease payments$161,219 $25,488 $19,561 $16,617 $15,783 $15,254 $68,516 
Less: imputed interest(18,910)
Total lease liabilities$142,309 
As of June 30, 2022, we had additional operating lease commitments of $0.7 million for office space that have not yet commenced. These leases will commence during the year ended June 30, 2023 with lease terms of 1 year to 5 years.
The supplemental information related to operating leases for the years ended June 30, 2022 and June 30, 2021 was as follows (in thousands):
20222021
Weighted-average inputs:
Weighted-average remaining lease term (years)8.88.5
Weighted-average discount rate2.8 %3.0 %
Cash flow information:
Operating cash flows paid for amounts included in the measurement of lease liabilities$26,462 $27,734 
Right of use assets obtained in exchange for new lease liabilities:$41,382 $36,130 
(b)Leases where ResMed is the Lessor
We lease sleep and respiratory medical devices to customers primarily as a means to comply with local health insurer requirements in certain foreign geographies. Device rental contracts include sales-type and operating leases, and contract terms vary by customer and include options to terminate or extend the contract. When lease contracts also include the sale of masks and accessories, we allocate contract consideration to those items on a relative standalone price basis and recognize revenue when control transfers to the customer.
The components of lease revenue for the years ended June 30, 2022, 2021 and 2020 were as follows (in thousands):
202220212020
Sales-type lease revenue$9,342 $9,758 $13,457 
Operating lease revenue90,076 93,431 87,874 
Total lease revenue$99,418 $103,189 $101,331 
Our net investment in sales-type leases were classified in the consolidated balance sheets as of June 30, 2022 and June 30, 2021 as follows (in thousands):
20222021
Accounts receivable, net$6,473 $8,026 
Prepaid taxes and other non-current assets7,635 6,214 
Total$14,108 $14,240 
Maturities of sales-type leases as of June 30, 2022 were as follows (in thousands):
Total20232024202520262027Thereafter
Remaining lease payments$16,068 $6,757 $4,207 $2,057 $1,915 $1,132 — 
Less: imputed interest(1,960)
Present value of remaining lease payments$14,108 
Leases Leases
(a)Leases where ResMed is the Lessee
We determine whether a contract is, or contains, a lease at inception. ROU assets represent our right to use an underlying asset during the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at lease commencement based upon the estimated present value of unpaid lease payments over the lease term. We use our incremental borrowing rate based on the information available at lease commencement in determining the present value of unpaid lease payments. ROU assets also include any lease payments made at or before lease commencement and any initial direct costs incurred, and exclude any lease incentives received.
We determine the lease term as the non-cancellable period of the lease, and may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Leases with a term of 12 months or less are not recognized on the balance sheet. Some of our leases include variable lease payments that are based on costs incurred or actual usage, or adjusted periodically based on an index or a rate. Our leases do not contain any residual value guarantees and we do not account for lease and non-lease components as a single lease component. Operating leases are included in operating lease right-of-use assets and operating lease liabilities on our consolidated balance sheets. We lease certain office space, warehouses and distribution centers, manufacturing facilities, vehicles, and equipment with remaining lease terms ranging from less than 1 year to 14 years, some of which include options to extend or terminate the leases.
Operating lease costs for the years ended June 30, 2022, 2021 and 2020 were $35.3 million, $35.5 million and $26.5 million, respectively. Short-term and variable lease costs were not material for the years ended June 30, 2022, 2021 and 2020.
Future lease payments under non-cancellable operating leases as of June 30, 2022 are as follows (in thousands):
Total20232024202520262027Thereafter
Minimum lease payments$161,219 $25,488 $19,561 $16,617 $15,783 $15,254 $68,516 
Less: imputed interest(18,910)
Total lease liabilities$142,309 
As of June 30, 2022, we had additional operating lease commitments of $0.7 million for office space that have not yet commenced. These leases will commence during the year ended June 30, 2023 with lease terms of 1 year to 5 years.
The supplemental information related to operating leases for the years ended June 30, 2022 and June 30, 2021 was as follows (in thousands):
20222021
Weighted-average inputs:
Weighted-average remaining lease term (years)8.88.5
Weighted-average discount rate2.8 %3.0 %
Cash flow information:
Operating cash flows paid for amounts included in the measurement of lease liabilities$26,462 $27,734 
Right of use assets obtained in exchange for new lease liabilities:$41,382 $36,130 
(b)Leases where ResMed is the Lessor
We lease sleep and respiratory medical devices to customers primarily as a means to comply with local health insurer requirements in certain foreign geographies. Device rental contracts include sales-type and operating leases, and contract terms vary by customer and include options to terminate or extend the contract. When lease contracts also include the sale of masks and accessories, we allocate contract consideration to those items on a relative standalone price basis and recognize revenue when control transfers to the customer.
The components of lease revenue for the years ended June 30, 2022, 2021 and 2020 were as follows (in thousands):
202220212020
Sales-type lease revenue$9,342 $9,758 $13,457 
Operating lease revenue90,076 93,431 87,874 
Total lease revenue$99,418 $103,189 $101,331 
Our net investment in sales-type leases were classified in the consolidated balance sheets as of June 30, 2022 and June 30, 2021 as follows (in thousands):
20222021
Accounts receivable, net$6,473 $8,026 
Prepaid taxes and other non-current assets7,635 6,214 
Total$14,108 $14,240 
Maturities of sales-type leases as of June 30, 2022 were as follows (in thousands):
Total20232024202520262027Thereafter
Remaining lease payments$16,068 $6,757 $4,207 $2,057 $1,915 $1,132 — 
Less: imputed interest(1,960)
Present value of remaining lease payments$14,108 
Leases Leases
(a)Leases where ResMed is the Lessee
We determine whether a contract is, or contains, a lease at inception. ROU assets represent our right to use an underlying asset during the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at lease commencement based upon the estimated present value of unpaid lease payments over the lease term. We use our incremental borrowing rate based on the information available at lease commencement in determining the present value of unpaid lease payments. ROU assets also include any lease payments made at or before lease commencement and any initial direct costs incurred, and exclude any lease incentives received.
We determine the lease term as the non-cancellable period of the lease, and may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Leases with a term of 12 months or less are not recognized on the balance sheet. Some of our leases include variable lease payments that are based on costs incurred or actual usage, or adjusted periodically based on an index or a rate. Our leases do not contain any residual value guarantees and we do not account for lease and non-lease components as a single lease component. Operating leases are included in operating lease right-of-use assets and operating lease liabilities on our consolidated balance sheets. We lease certain office space, warehouses and distribution centers, manufacturing facilities, vehicles, and equipment with remaining lease terms ranging from less than 1 year to 14 years, some of which include options to extend or terminate the leases.
Operating lease costs for the years ended June 30, 2022, 2021 and 2020 were $35.3 million, $35.5 million and $26.5 million, respectively. Short-term and variable lease costs were not material for the years ended June 30, 2022, 2021 and 2020.
Future lease payments under non-cancellable operating leases as of June 30, 2022 are as follows (in thousands):
Total20232024202520262027Thereafter
Minimum lease payments$161,219 $25,488 $19,561 $16,617 $15,783 $15,254 $68,516 
Less: imputed interest(18,910)
Total lease liabilities$142,309 
As of June 30, 2022, we had additional operating lease commitments of $0.7 million for office space that have not yet commenced. These leases will commence during the year ended June 30, 2023 with lease terms of 1 year to 5 years.
The supplemental information related to operating leases for the years ended June 30, 2022 and June 30, 2021 was as follows (in thousands):
20222021
Weighted-average inputs:
Weighted-average remaining lease term (years)8.88.5
Weighted-average discount rate2.8 %3.0 %
Cash flow information:
Operating cash flows paid for amounts included in the measurement of lease liabilities$26,462 $27,734 
Right of use assets obtained in exchange for new lease liabilities:$41,382 $36,130 
(b)Leases where ResMed is the Lessor
We lease sleep and respiratory medical devices to customers primarily as a means to comply with local health insurer requirements in certain foreign geographies. Device rental contracts include sales-type and operating leases, and contract terms vary by customer and include options to terminate or extend the contract. When lease contracts also include the sale of masks and accessories, we allocate contract consideration to those items on a relative standalone price basis and recognize revenue when control transfers to the customer.
The components of lease revenue for the years ended June 30, 2022, 2021 and 2020 were as follows (in thousands):
202220212020
Sales-type lease revenue$9,342 $9,758 $13,457 
Operating lease revenue90,076 93,431 87,874 
Total lease revenue$99,418 $103,189 $101,331 
Our net investment in sales-type leases were classified in the consolidated balance sheets as of June 30, 2022 and June 30, 2021 as follows (in thousands):
20222021
Accounts receivable, net$6,473 $8,026 
Prepaid taxes and other non-current assets7,635 6,214 
Total$14,108 $14,240 
Maturities of sales-type leases as of June 30, 2022 were as follows (in thousands):
Total20232024202520262027Thereafter
Remaining lease payments$16,068 $6,757 $4,207 $2,057 $1,915 $1,132 — 
Less: imputed interest(1,960)
Present value of remaining lease payments$14,108