4. Investments in equipment and leases, net:

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


	Balance December 31, 2010		Reclassifications & Additions/ Dispositions			Depreciation/ Amortization Expense or Amortization of Leases			Balance December 31, 2011
Net investment in operating leases	$	4,390	$	(102	)	$	(688	)	$	3,600
Net investment in direct financing leases		20		(20	)		—			—
Assets held for sale or lease, net		—		10			(5	)		5
Total	$	4,410	$	(112	)	$	(693	)	$	3,605

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. As a result of these reviews, management determined that no impairment losses existed for the respective years ended December 31, 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 was $693 thousand and $899 thousand for 2011 and 2010, respectively.

All of the property on leases was acquired from 1995 through 1997.

Net investment in operating leases:

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


	Balance December 31, 2010			Additions			Reclassifications or Dispositions			Balance December 31, 2011
Transportation, rail	$	24,679		$	—		$	(562	)	$	24,117
Transportation, other		285			—			10			295
Materials handling		199			—			—			199
		25,163			—			(552	)		24,611
Less accumulated depreciation		(20,773	)		(688	)		450			(21,011	)
Total	$	4,390		$	(688	)	$	(102	)	$	3,600

The average estimated residual value for assets on operating leases was 13% and 15% of the assets’ original cost at December 31, 2011 and 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 $459 thousand and $532 thousand for the years ended December 31, 2011 and 2010, respectively. There were no operating leases in non-accrual status as of December 31, 2011 and 2010.

At December 31, 2011, the aggregate amounts of future minimum lease payments under operating leases are as follows (in thousands):


	Operating Leases
Year ending December 31, 2012	$	934
2013		685
2014		410
	$	2,029

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 December 31, 2011, the Partnership had no remaining investments in direct financing leases.

ATEL CASH DISTRIBUTION FUND VI LP 10-K