InfuSystem Holdings, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Leases

Leases

12 Months Ended

Dec. 31, 2016

Leases [Abstract]

Leases

10.

Leases

The Company leases office space, service facility centers and equipment under non-cancelable capital and operating lease arrangements. The Company periodically enter into capital leases to finance the purchase of ambulatory infusion pumps. The pumps are capitalized into medical equipment in rental service at their fair market value, which equals the value of the future minimum lease payments and are depreciated over the useful life of the pumps. The weighted average interest rate under capital leases was 5.1% as of December 31, 2016. The leases for office space and service facility centers used in the Company’s logistics operations are operating leases. In most cases, we expect our facility leases will be renewed or replaced by other leases in the ordinary course of business.

Future minimum rental payments pursuant to leases that have an initial or remaining non-cancelable lease term in excess of one year as of December 31, 2016 are as follows (in thousands):


	Capital Leases			Operating Leases		Total
2017	$	3,114		$	990	$	4,104
2018		1,826			831		2,657
2019		571			562		1,133
2020		274			178		452
2021		—			181		181
Thereafter		—			938		938

Total require payments	$	5,785		$	3,680	$	9,465

Less amounts representing interest (3.1% to 10.5%)		(274	)

Present value of minimum lease payments		5,511
Less current maturities		(2,938	)

Long-term capital lease liability	$	2,573

At December 31, 2016 and 2015, pump assets obtained under capital leases, had a cost of approximately $13.9 million and $11.2 million, respectively, and accumulated depreciation of $3.9 million and $2.4 million, respectively. Included in depreciation expense for the years ended December 31, 2016 and 2015 was $6.3 million and $4.8 million, respectively, which were recorded in cost of revenues – pump depreciation and loss on disposal.

The Company had minimum future operating lease commitments, mainly related to its leased facilities. Related rental expense for facilities and other equipment from third parties under operating leases approximated $1.0 million.