3. Investment in equipment and leases, net:

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


		Balance December 31, 2013		Reclassifications & Additions / Dispositions		Depreciation/ Amortization Expense or Amortization of Leases		Balance June 30, 2014
Net investment in operating leases	$	4,231	$	(30)	$	(258)	$	3,943
Assets held for sale or lease, net		1,290		(492)		-		798
Total	$	5,521	$	(522)	$	(258)	$	4,741

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. The fair value of the assets is determined based on the sum of the discounted estimated future cash flows of the assets. 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, 2014 and 2013.

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 $124 thousand and $162 thousand for the respective three months ended June 30, 2014 and 2013, and $258 thousand and $376 thousand for the respective six months ended June 30, 2014 and 2013.

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, 2013		Additions		Reclassifications or Dispositions		Balance June 30, 2014
Transportation, rail	$	11,353	$	-	$	2,827	$	14,180
Containers		15,874		-		(3,251)		12,623
Other		640		-		-		640
		27,867		-		(424)		27,443
Less accumulated depreciation		(23,636)		(258)		394		(23,500)
Total	$	4,231	$	(258)	$	(30)	$	3,943

The average estimated residual value for assets on operating leases was 11% of the assets’ original cost at June 30, 2014 and December 31, 2013. There were no operating leases in non-accrual status at June 30, 2014 and December 31, 2013.

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 $325 thousand and $497 thousand for the respective three months ended June 30, 2014 and 2013, and $684 thousand and $1.0 million for the respective six months ended June 30, 2014 and 2013.

Direct financing leases:

As of June 30, 2014 and December 31, 2013, the Company had no investment in direct financing leases, as its remaining finance lease matured on July 1, 2013.

At June 30, 2014, the aggregate amount of future lease payments associated with operating leases is as follows (in thousands):


		Operating Leases
Six months ending December 31, 2014	$	937
Year ending December 31, 2015		1,127
2016		752
2017		462
2018		78
2019		4
Thereafter		2
	$	3,362