4. Investment in equipment and leases, net:

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


		Balance December 31, 2012		Reclassifications & Additions / Dispositions		Depreciation/ Amortization Expense or Amortization of Leases		Balance March 31, 2013
Net investment in operating leases	$	6,230	$	(733)	$	(176)	$	5,321
Net investment in direct financing leases		100		(42)		(24)		34
Assets held for sale or lease, net		629		735		(38)		1,326
Total	$	6,959	$	(40)	$	(238)	$	6,681

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 months ended March 31, 2013 and 2012.

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 totaled $214 thousand and $312 thousand for the respective three months ended March 31, 2013 and 2012.

All of the remaining property on lease was acquired during the years 1999 through 2001.

Operating leases:

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


		Balance December 31, 2012		Additions		Reclassifications or Dispositions		Balance March 31, 2013
Containers	$	19,380	$	-	$	(149)	$	19,231
Transportation, rail		13,125		-		(458)		12,667
Marine vessel		4,793		-		(4,793)		-
Other		640		-		-		640
		37,938		-		(5,400)		32,538
Less accumulated depreciation		(31,708)		(176)		4,667		(27,217)
Total	$	6,230	$	(176)	$	(733)	$	5,321

The average estimated residual value for assets on operating leases was 10% of the assets’ original cost at March 31, 2013 and December 31, 2012.

4. Investment in equipment and leases, net:

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 $552 thousand and $545 thousand for the respective three months ended March 31, 2013 and 2012.

As of March 31, 2013 and December 31, 2012, the Company had no operating leases in non-accrual status.

Direct financing leases:

As of March 31, 2013, the investment in direct financing leases primarily consists of manufacturing equipment. At December 31, 2012, such investment primarily consisted of railcars and manufacturing equipment.

The components of the Company’s investment in direct financing leases as of March 31, 2013 and December 31, 2012 are as follows (in thousands):


		March 31, 2013		December 31, 2012
Total minimum lease payments receivable	$	24	$	48
Estimated residual values of leased equipment (unguaranteed)		10		52
Investment in direct financing leases		34		100
Less unearned income		-		-
Net investment in direct financing leases	$	34	$	100

There were no net investments in direct financing leases in non-accrual status as of March 31, 2013 and December 31, 2012.

At March 31, 2013, the aggregate amount of future lease payments is as follows (in thousands):


		Operating Leases		Direct Financing Leases		Total
Nine months ending December 31, 2013	$	1,231	$	24	$	1,255
Year ending December 31, 2014		1,164		-		1,164
2015		565		-		565
2016		280		-		280
2017		263		-		263
2018		75		-		75
	$	3,578	$	24	$	3,602