Net Investment In Direct Financing Leases

12 Months Ended

Dec. 31, 2012

Net Investment In Direct Financing Leases

7. Net Investment in Direct Financing Leases

Our direct financing leases include a lease of the Northeast Jackson Dome (“NEJD”) Pipeline. Under the terms of the agreement, we are paid quarterly payments, which commenced August 2008. These quarterly payments are fixed at approximately $20.7 million per year during the lease term at an interest rate of 10.25%. At the end of the lease term in 2028, we will convey all of our interests in the NEJD Pipeline to the lessee for a nominal payment.

The following table lists the components of the net investment in direct financing leases:



	December 31,
	2012			2011
Total minimum lease payments to be received	$	320,148		$	341,917
Estimated residual values of leased property (unguaranteed)	292			1,287
Unamortized initial direct costs	1,804			1,992
Less unearned income	(159,750		)	(176,726		)
Net investment in direct financing leases	162,494			168,470
Less current portion (included in other current assets)	(5,109		)	(6,010		)
Long-term portion of net investment in direct financing leases	$	157,385		$	162,460

At December 31, 2012, minimum lease payments to be received for each of the five succeeding fiscal years are $21.3 million for 2013, $21.2 million for 2014 and $20.7 million per year for 2015, 2016 and 2017.

- Definition

The entire disclosure for lessor's leasing arrangements, which includes direct financing, sales type and leveraged leases. Disclosure may include the effect on the balance sheet and the income statement resulting from a change in lease classification for leases that at inception would have been classified differently had guidance been in effect at the inception of the original lease.

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