Leases

12 Months Ended

Dec. 31, 2024

17.LEASES

We have operating leases for facilities used for manufacturing, research and development, sales and distribution, and office space, as well as leases for manufacturing and office equipment, vehicles, and land. Our leases have remaining terms ranging from less than one year to approximately 25 years. A number of our lease agreements contain options to renew at our discretion for periods of up to 15 years and options to terminate the leases within one year. The lease term used to calculate ROU assets and lease liabilities includes renewal and termination options that are deemed reasonably certain to be exercised. Lease agreements with lease and non-lease components are generally accounted for as a single lease component. We do not have any bargain purchase options in our leases. For leases with an initial term of one year or less, we do not record a ROU asset or lease liability on our consolidated balance sheet. Substantially all of the ROU assets and lease liabilities as of December 31, 2024 recorded on our consolidated balance sheet are related to our cardiovascular segment.

From time to time, we enter into agreements to sublease a portion of our facilities to third parties. Such sublease income is not material. We also lease certain hardware consoles to customers and record rental revenue as a component of net sales. Rental revenue under such console leasing arrangements for the years ended December 31, 2024, 2023 and 2022 was not significant.

The following was included in our consolidated balance sheet as of December 31, 2024 and 2023 (in thousands):


	2024		2023
Assets
ROU operating lease assets	$	65,508	$	63,047

Liabilities
Short-term operating lease liabilities	$	10,331	$	12,087
Long-term operating lease liabilities		54,783		56,259
Total operating lease liabilities	$	65,114	$	68,346

We recognize lease expense for operating leases on a straight-line basis over the term of the lease. Net lease cost for the years ended December 31, 2024, 2023 and 2022 was $15.4 million, $14.4 million, and $13.8 million, respectively. The components of lease costs for the years ended December 31, 2024, 2023 and 2022 were as follows, in thousands:



Lease Cost	Classification	2024		2023		2022
Operating lease cost (a)	Selling, general and administrative expenses	$	15,885	$	14,879	$	14,219
Sublease (income) (b)	Selling, general and administrative expenses		(462)		(488)		(409)
Net lease cost		$	15,423	$	14,391	$	13,810


(a)	Includes expense related to short-term leases and variable payments, which were not significant.

(b)	Does not include rental revenue from leases of hardware consoles to customers, which was not significant.

Supplemental cash flow information for the years ended December 31, 2024, 2023 and 2022 was as follows, in thousands:


	2024		2023		2022
Cash paid for amounts included in the measurement of lease liabilities	$	14,529	$	13,804	$	13,710
Right-of-use assets obtained in exchange for lease obligations	$	9,947	$	8,891	$	11,130

Generally, our lease agreements do not specify an implicit rate. Therefore, we estimate our incremental borrowing rate, which is defined as the interest rate we would pay to borrow on a collateralized basis, considering such factors as length of lease term and the risks of the economic environment in which the leased asset operates. As of December 31, 2024, 2023 and 2022, our lease agreements had the following remaining lease term and discount rates:


	2024	2023	2022
Weighted average remaining lease term	9.6 years	9.6 years	10.4 years
Weighted average discount rate	3.5%	3.4%	3.4%

As of December 31, 2024, maturities of operating lease liabilities were as follows, in thousands:


Year ending December 31,	Amounts due under operating leases
2025	$	11,915
2026		10,067
2027		8,726
2028		6,948
2029		6,258
Thereafter		32,692
Total lease payments		76,606
Less: Imputed interest		(11,492)
Total	$	65,114