4. Investment in equipment and leases, net:

The Partnership’s investments in equipment and leases consists of the following (in thousands):


	Balance December 31, 2010		Reclassifications & Additions/ Dispositions			Depreciation/ Amortization Expense or Amortization of Leases			Balance September 30, 2011
Net investment in operating leases	$	4,390	$	(69	)	$	(528	)	$	3,793
Net investment in direct financing leases		20		(20	)		—			—
Assets held for sale or lease, net		—		10			(4	)		6
Total	$	4,410	$	(79	)	$	(532	)	$	3,799

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. No assets were identified as impaired during management’s review for the respective three- and nine-month periods ended September 30, 2011 and 2010.

The Partnership utilizes a straight-line depreciation method over the term of the equipment lease for equipment in all of the categories currently in its portfolio of lease transactions. Depreciation expense on the Partnership’s equipment totaled $161 thousand and $237 thousand for the respective three months ended September 30, 2011 and 2010, and was $532 thousand and $693 thousand for the respective nine months ended September 30, 2011 and 2010.

All of the equipment on leases was acquired in the years 1995 through 1997.

Net investment in operating leases:

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


	Balance December 31, 2010			Additions			Reclassifications or Dispositions			Balance September 30, 2011
Transportation, rail	$	24,679		$	—		$	(397	)	$	24,282
Transportation, other		285			—			10			295
Material handling		199			—			—			199
		25,163			—			(387	)		24,776
Less accumulated depreciation		(20,773	)		(528	)		318			(20,983	)
Total	$	4,390		$	(528	)	$	(69	)	$	3,793

The average estimated residual value for assets on operating leases was 14% and 15% of the assets’ original cost at September 30, 2011 and December 31, 2010, respectively.

The Partnership earns revenues from certain lease assets based on utilization of such assets. Such contingent rentals 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 $126 thousand and $124 thousand for the respective three months ended September 30, 2011 and 2010, and $358 thousand and $424 thousand for the respective nine months ended September 30, 2011 and 2010.

At September 30, 2011, the aggregate amounts of future minimum lease payments under operating leases are as follows (in thousands):


	Operating Leases
Three months ending December 31, 2011	$	338
Year ending December 31, 2012		372
2013		123
2014		35
	$	868

Net investment in direct financing leases:

The Partnership’s remaining direct financing lease terminated during the second half of 2010. However, at December 31, 2010, the Partnership retained a $20 thousand residual position in the equipment underlying the terminated direct financing lease. During the first quarter of 2011, such equipment was re-leased under short-term operating leases. At September 30, 2011, the Partnership had no remaining investments in direct financing leases.

ATEL CASH DISTRIBUTION FUND VI LP 10-Q