Equipment Under Operating Leases, Net

3 Months Ended

Mar. 31, 2020

Equipment Under Operating Leases, Net [Abstract]

Equipment Under Operating Leases, Net

4. Equipment under Operating Leases, net:

The Company’s equipment under operating leases consists of the following (in thousands):

					Depreciation/
			Reclassifications,		Amortization
	Balance		Improvements/		Expense or		Balance
	December 31,		Dispositions and		Amortization		March 31,
	2019		Impairment Losses		of Leases		2020
Equipment under operating leases, net	$	11,477	$	(2)	$	(332)	$	11,143
Assets held for sale or lease, net		3,180		(7)		—		3,173
Total	$	14,657	$	(9)	$	(332)	$	14,316

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 $332 thousand and $649 thousand for the three months ended March 31, 2020 and 2019, respectively.

All of the Company’s lease asset purchases and capital improvements were made during the years from 2009 through 2015.

Operating leases:

Property on operating leases consists of the following (in thousands):

	Balance						Balance
	December 31,				Reclassifications		March 31,
	2019		Additions		or Dispositions		2020
Marine vessel	$	19,410	$	—	$	—	$	19,410
Transportation, rail		4,010		—		—		4,010
Transportation		208		—		—		208
Manufacturing		5,292		—		(93)		5,199
Materials handling		326		—		(43)		283
Construction		919		—		—		919
Agriculture		542		—		—		542
		30,707		—		(136)		30,571
Less accumulated depreciation		(19,230)		(332)		134		(19,428)
Total	$	11,477	$	(332)	$	(2)	$	11,143

The average estimated residual value for assets on operating leases was 21% of the assets’ original cost at March 31, 2020 and 25% at December 31, 2019. There were no operating leases in non-accrual status at both March 31, 2020 and December 31, 2019.

At March 31, 2020, the aggregate amounts of future minimum lease payments receivable are as follows (in thousands):

	Operating
	Leases
Nine months ending December 31, 2020	$	1,159
Year ended December 31, 2021		1,266
2022		1,180
2023		1,164
2024		211
	$	4,980

The useful lives for each category of leases is reviewed at a minimum of once per quarter. As of March 31, 2020 and December 31, 2019, the respective useful lives of each category of lease assets in the Company’s portfolio are as follows (in years):

Equipment category	Useful Life
Transportation, rail	35 - 50
Marine vessel	20 - 30
Manufacturing	10  -15
Agriculture	7 - 10
Construction	7 - 10
Materials handling	7 - 10
Transportation	7 - 10