(3) Discontinued Operations

As discussed in Note 1, railcar assets of $320.8 million and $449.7 million were reclassified as held for sale as of June 30, 2019 and December 31, 2018, respectively, and the related operations of the rail business as discontinued operations in the accompanying unaudited consolidated statements of income and cash flows. The railcar assets are expected to be sold before the end of 2019.

The Company’s held for sale railcar assets as of the dates indicated are made up as follows (in thousands):


	June 30,		December 31,
	2019		2018
Rental equipment	$	326,058	$	448,466
Other assets		2,058		1,264
Loss on classification as held for sale		(7,323)		-
Assets held for sale	$	320,793	$	449,730

Other assets and liabilities of the rail business, including accounts receivable, accrued expenses and other liabilities, deferred tax liabilities and debt, have not been classified as held for sale in the consolidated balance sheets as of June 30, 2019 and December 31, 2018 as they will not be sold by the Company. The rail debt will be repaid upon the sale of the railcar assets.

The following table summarizes the components of income (loss) from discontinued operations in the accompanying unaudited consolidated statements of income for the three and six months ended June 30, 2019 and 2018 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Revenue
Rail lease revenue	$	6,462	$	9,119	$	14,343	$	18,223

Operating expenses
Depreciation of rental equipment		1,878		3,299		5,249		6,968
Storage, handling and other expenses		1,136		1,644		2,360		3,416
Gain on sale of rental equipment		(1,271)		(57)		(8,661)		(17)
Administrative expenses		1,030		835		2,356		1,851
Total operating expenses		2,773		5,721		1,304		12,218

Operating income		3,689		3,398		13,039		6,005

Interest expense		3,184		3,846		7,129		7,391
Income (loss) before income taxes		505		(448)		5,910		(1,386)

Loss on classification as held for sale		7,323		-		7,323		-
Loss from discontinued operations before income taxes		(6,818)		(448)		(1,413)		(1,386)
Income tax benefit		(1,618)		(94)		(342)		(291)
Net loss from discontinued operations	$	(5,200)	$	(354)	$	(1,071)	$	(1,095)