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 June 30, 2013
Net investment in operating leases	$	6,230	$	(825)	$	(338)	$	5,067
Net investment in direct financing leases		100		(42)		(48)		10
Assets held for sale or lease, net		629		666		(38)		1,257
Total	$	6,959	$	(201)	$	(424)	$	6,334

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. There were no impairment losses recorded during the three and six months ended June 30, 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 $162 thousand and $259 thousand for the respective three months ended June 30, 2013 and 2012, and $376 thousand and $571 thousand for the respective six months ended June 30, 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 June 30, 2013
Containers	$	19,380	$	-	$	(595)	$	18,785
Transportation, rail		13,125		-		(1,041)		12,084
Marine vessel		4,793		-		(4,793)		-
Other		640		-		-		640
		37,938		-		(6,429)		31,509
Less accumulated depreciation		(31,708)		(338)		5,604		(26,442)
Total	$	6,230	$	(338)	$	(825)	$	5,067

The average estimated residual value for assets on operating leases was 10% of the assets’ original cost at both June 30, 2013 and December 31, 2012.

4. Investment in equipment and leases, net:

The Company may earn 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 $497 thousand and $623 thousand for the respective three months ended June 30, 2013 and 2012, and $1.0 million and $1.2 million for the respective six months ended June 30, 2013 and 2012.

As of June 30, 2013 and December 31, 2012, the Company had no operating leases in non-accrual status.

Direct financing leases:

As of June 30, 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 June 30, 2013 and December 31, 2012 are as follows (in thousands):


		June 30, 2013		December 31, 2012
Total minimum lease payments receivable	$	-	$	48
Estimated residual values of leased equipment (unguaranteed)		10		52
Investment in direct financing leases		10		100
Less unearned income		-		-
Net investment in direct financing leases	$	10	$	100

The Company’s remaining direct financing lease matures on July 1, 2013. At June 30, 2013, the Company retained a $10 thousand residual position in the equipment underlying such direct financing lease.

At June 30, 2013, the aggregate amount of future lease payments is as follows (in thousands):


		Operating Leases
Six months ending December 31, 2013	$	768
Year ending December 31, 2014		1,166
2015		568
2016		280
2017		263
2018		75
	$	3,120