4. Investment in equipment and leases, net:

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


	Balance December 31, 2011		Reclassifications & Additions/ Dispositions			Depreciation/ Amortization Expense or Amortization of Leases			Balance March 31, 2012
Net investment in operating leases	$	7,867	$	(14	)	$	(312	)	$	7,541
Net investment in direct financing leases		256		(4	)		(45	)		207
Assets held for sale or lease, net		153		9			—			162
Total	$	8,276	$	(9	)	$	(357	)	$	7,910

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, 2012 and 2011.

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 $312 thousand and $331 thousand for the respective three months ended March 31, 2012 and 2011.

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, 2011			Additions			Reclassifications or Dispositions			Balance March 31, 2012
Containers	$	19,678		$	—		$	(21	)	$	19,657
Transportation, rail		16,316			—			(199	)		16,117
Marine vessel		4,793			—			—			4,793
Other		640			—			—			640
		41,427			—			(220	)		41,207
Less accumulated depreciation		(33,560	)		(312	)		206			(33,666	)
Total	$	7,867		$	(312	)	$	(14	)	$	7,541

The average estimated residual value for assets on operating leases was 10% of the assets’ original cost at both March 31, 2012 and December 31, 2011.

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 $545 thousand and $591 thousand for the respective three months ended March 31, 2012 and 2011.

As of March 31, 2012 and December 31, 2011, the Company had no operating leases in non-accrual status.

Direct financing leases:

As of March 31, 2012 and December 31, 2011, the investment in direct financing leases primarily consists of railcars as well as construction and manufacturing equipment.

The components of the Company’s investment in direct financing leases as of March 31, 2012 and December 31, 2011 are as follows (in thousands):


	March 31, 2012			December 31, 2011
Total minimum lease payments receivable	$	181		$	248
Estimated residual values of leased equipment (unguaranteed)		52			54
Investment in direct financing leases		233			302
Less unearned income		(26	)		(46	)
Net investment in direct financing leases	$	207		$	256

There were no net investments in direct financing leases in non-accrual status as of March 31, 2012 and December 31, 2011.

At March 31, 2012, the aggregate amount of future lease payments is as follows (in thousands):


	Operating Leases		Direct Financing Leases		Total
Nine months ending December 31, 2012	$	857	$	133	$	990
Year ending December 31, 2013		544		48		592
2014		287		—		287
2015		179		—		179
2016		179		—		179
2017		179		—		179
Thereafter		75		—		75
	$	2,300	$	181	$	2,481