XML 68 R14.htm IDEA: XBRL DOCUMENT v2.4.0.8
Investments In Direct Financing Lease
 9 Months Ended
Sep. 30, 2014
Capital Leases, Net Investment in Direct Financing Leases [Abstract]  
Investments in a Direct Financing Lease
Investment in a Direct Financing Lease

The Company’s investment in a direct financing lease relates to the Company’s master lease of 23 public charter school properties as of September 30, 2014 and 27 public charter school properties as of December 31, 2013, with affiliates of Imagine Schools, Inc. (Imagine). Investment in a direct financing lease, net represents estimated unguaranteed residual values of leased assets and net unpaid rentals, less related deferred income. The following table summarizes the carrying amounts of investment in a direct financing lease, net as of September 30, 2014 and December 31, 2013 (in thousands):
 
 
September 30, 2014
 
December 31, 2013
Total minimum lease payments receivable
$
491,700

 
$
633,384

Estimated unguaranteed residual value of leased assets
172,994

 
215,207

Less deferred income (1)
(466,143
)
 
(606,379
)
Investment in a direct financing lease, net
$
198,551

 
$
242,212

 
 
 
 
(1) Deferred income is net of $1.5 million and $1.7 million of initial direct costs at September 30, 2014 and December 31, 2013.

Additionally, the Company determined that no allowance for losses was necessary at September 30, 2014 and December 31, 2013.

The Company’s direct financing lease has expiration dates ranging from approximately 18 to 21 years. Future minimum rentals receivable on this direct financing lease at September 30, 2014 are as follows (in thousands): 
 
Amount
Year:
 
2014
$
5,021

2015
20,475

2016
21,089

2017
21,721

2018
22,373

Thereafter
401,021

Total
$
491,700



On April 2, 2014, the Company completed the sale of four public charter school properties located in Florida and previously leased to Imagine for net proceeds of $46.1 million. Accordingly, the Company reduced its investment in a direct financing lease, net, by $45.9 million which included $41.5 million in original acquisition cost. A gain of $0.2 million was recognized during the nine months ended September 30, 2014.