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Investments In Direct Financing Lease | 6 Months Ended
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Jun. 30, 2017
Capital Leases, Net Investment in Direct Financing Leases [Abstract] |
Investments in a Direct Financing Lease | Investment in a Direct Financing Lease The Company’s investment in a direct financing lease relates to the Company’s master lease of 12 public charter school properties as of June 30, 2017 and December 31, 2016, with affiliates of Imagine Schools, Inc. (Imagine). Investment in a direct financing lease, net represents estimated unguaranteed residual values of leased assets and net unpaid rentals, less related deferred income. The following table summarizes the carrying amounts of investment in a direct financing lease, net as of June 30, 2017 and December 31, 2016 (in thousands):
| June 30, 2017 |  | December 31, 2016
Total minimum lease payments receivable | $ | 210,375 |  |  | $ | 215,753 |
Estimated unguaranteed residual value of leased assets | 82,350 |  |  | 85,247 |
Less deferred income (1) | (192,120 | ) |  | (198,302 | )
Less allowance for lease losses | (7,298 | ) |  | — |
Investment in a direct financing lease, net | $ | 93,307 |  |  | $ | 102,698 |
(1) Deferred income is net of $1.3 million of initial direct costs at June 30, 2017 and December 31, 2016. During the three months ended June 30, 2017, the Company entered into negotiations with Imagine to reduce future rental payments and/or the term of the leases on six properties. As a result of the revised lease terms, the Company anticipates the lease agreements on these six properties will be classified as operating leases effective in the third quarter of 2017. Management evaluated whether it could recover its investment in these leases taking into account the revised lease terms and independent appraisals prepared as of June 30, 2017, and determined the carrying value of the investment in the direct financing leases exceeded the expected lease payments to be received and residual values for these six leases. Accordingly, the Company recorded an impairment charge of $9.6 million during the three months ended June 30, 2017, which included an allowance for lease loss of $7.3 million and a charge of $2.3 million related to estimated unguaranteed residual value. The Company determined that no allowance for losses was necessary at December 31, 2016. Additionally, during the three months ended June 30, 2017, the Company performed its annual review of the estimated unguaranteed residual value on its other properties leased to Imagine and determined that the residual value on one of these properties was impaired. As such, the Company recorded an impairment charge of the unguaranteed residual value of $0.6 million during the three months ended June 30, 2017. The Company’s direct financing lease has expiration dates ranging from approximately 15 to 18 years. Future minimum rentals receivable on this direct financing lease at June 30, 2017 are as follows (in thousands):
| Amount
Year: |
2017 | $ | 5,479 |
2018 | 11,182 |
2019 | 11,517 |
2020 | 11,863 |
2021 | 12,219 |
Thereafter | 158,115 |
Total | $ | 210,375 |

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- Definition The entire disclosure for lessor's leasing arrangements, which includes direct financing, sales type and leveraged leases. Disclosure may include the effect on the balance sheet and the income statement resulting from a change in lease classification for leases that at inception would have been classified differently had guidance been in effect at the inception of the original lease. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -SubTopic 30 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=25496975&loc=d3e45377-112738 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6452767&loc=d3e37045-112695 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -SubTopic 10 -Section 55 -Paragraph 47 -URI http://asc.fasb.org/extlink&oid=6584217&loc=d3e38847-112698 + Details
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