4. Investment in equipment and leases, net:

The Company’s investment in leases consists of the following (in thousands):


	Balance December 31, 2010		Reclassifications & Additions/ Dispositions			Depreciation/ Amortization Expense or Amortization of Leases			Balance June 30, 2011
Net investment in operating leases	$	8,820	$	424		$	(692	)	$	8,552
Net investment in direct financing leases		381		—			(56	)		325
Assets held for sale or lease, net		204		(51	)		—			153
Total	$	9,405	$	373		$	(748	)	$	9,030

Impairment of investments in leases and assets held for sale or lease:

Management periodically reviews the carrying values of its assets on leases and assets held for lease or sale. Impairment losses are recorded as an adjustment to the net investment in operating leases. No impairment losses were recorded during the three and six months ended June 30, 2011 and 2010.

The Company utilizes a straight line depreciation method over the term of the equipment lease for equipment on operating leases currently in its portfolio. Depreciation expense on the Company’s equipment was approximately $361 thousand and $342 thousand for the respective three months ended June 30, 2011 and 2010, and was $692 thousand and $685 thousand for the respective six months ended June 30, 2011 and 2010.

All of the leased property was acquired during the period from 1999 through 2002.

Operating leases:

Property on operating leases consists of the following (in thousands):


	Balance December 31, 2010			Additions			Reclassifications or Dispositions			Balance June 30, 2011
Containers	$	20,038		$	—		$	(190	)	$	19,848
Transportation, rail		16,098			—			241			16,339
Marine vessel		4,333			460			—			4,793
Other		640			—			—			640
		41,109			460			51			41,620
Less accumulated depreciation		(32,289	)		(692	)		(87	)		(33,068	)
Total	$	8,820		$	(232	)	$	(36	)	$	8,552

The average estimated residual value for assets on operating leases was 10% of the assets’ original cost at both June 30, 2011 and December 31, 2010.

The Company earns revenues from its containers, marine vessel and certain other assets based on utilization of such assets or through fixed term leases. Contingent rentals (i.e., short-term, operating charter hire payments) and the associated expenses are recorded when earned and/or incurred. The revenues associated with these rentals are included as a component of Operating Lease Revenues, and totaled $581 thousand and $558 thousand for the respective three months ended June 30, 2011 and 2010, and was $1.2 million and $1.1 million for the respective six months ended June 30, 2011 and 2010.

As of June 30, 2011 and December 31, 2010, the Company had no operating leases in non-accrual status.

Direct financing leases:

As of June 30, 2011, investment in direct financing leases primarily consists of railcars as well as construction and manufacturing equipment. At December 31, 2010, such investment primarily consists of manufacturing equipment. The following lists the components of the Company’s investment in direct financing leases as of June 30, 2011 and December 31, 2010 (in thousands):


	June 30, 2011			December 31, 2010
Total minimum lease payments receivable	$	370		$	487
Estimated residual values of leased equipment (unguaranteed)		54			54
Investment in direct financing leases		424			541
Less unearned income		(99	)		(160	)
Net investment in direct financing leases	$	325		$	381

There were no net investments in direct financing leases in non-accrual status as of June 30, 2011 and December 31, 2010.

At June 30, 2011, the aggregate amount of future lease payments is as follows (in thousands):


	Operating Leases		Direct Financing Leases		Total
Six months ending December 31, 2011	$	1,799	$	122	$	1,921
Year ending December 31, 2012		1,678		200		1,878
2013		526		48		574
2014		287		—		287
2015		179		—		179
2016		179		—		179
Thereafter		254		—		254
	$	4,902	$	370	$	5,272