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INVESTMENT IN LEASES AND LEASED EQUIPMENT-NET
6 Months Ended
Sep. 30, 2011
INVESTMENT IN LEASES AND LEASED EQUIPMENT-NET [Abstract] 
INVESTMENT IN LEASES AND LEASED EQUIPMENT-NET
2. INVESTMENT IN LEASES AND LEASED EQUIPMENT—NET
 
Investment in leases and leased equipment—net consists of the following (in thousands):

   
September 30,
  
March 31,
 
   
2011
 
Investment in direct financing and sales-type leases—net
 $89,794  $96,319 
Investment in operating lease equipment—net
  19,086   21,989 
   $108,880  $118,308 

INVESTMENT IN DIRECT FINANCING AND SALES-TYPE LEASES—NET
 
Our investment in direct financing and sales-type leases—net consists of the following (in thousands):
 
   
September 30,
  
March 31,
 
   
2011
 
Minimum lease payments
 $93,838  $102,449 
Estimated unguaranteed residual value (1)
  6,810   7,029 
Initial direct costs, net of amortization (2)
  681   709 
Less:  Unearned lease income
  (9,988)  (12,135)
Less:  Reserve for credit losses (3)
  (1,547)  (1,733)
Investment in direct financing and sales-type leases—net
 $89,794  $96,319 

(1) 
Includes estimated unguaranteed residual values of $1,487 thousand and $1,666 thousand as of September 30, 2011 and March 31, 2011, respectively, for direct financing leases which have been sold and accounted for as sales under Codification Topic Transfers and Servicing.
(2) 
Initial direct costs are shown net of amortization of $479 thousand and $552 thousand as of September 30, 2011 and March 31, 2011, respectively.
(3) 
For details on reserve for credit losses, refer to Note 4, “Reserves for Credit Losses.”
 
Our net investment in direct financing and sales-type leases for certain lease agreements serves as collateral for non-recourse equipment notes. See Note 7, “Non-Recourse Notes Payable and Other Financing Arrangements.”

We enter into agreements to sell financial assets, which are accounted for as sales under Codification topic, Transfers and Services. Financial assets include lease payments associated with certain investments in direct financing leases and sales-type leases as well as notes receivables. We recognized a net gain for these sales of $0.9 million and $0.4 million in lease revenues in the unaudited condensed consolidated statement of operations for the three months ended September 30, 2011 and 2010, respectively, and $1.0 million and $1.6 million for the six months ended September 30, 2011 and 2010, respectively. Total proceeds from the sale of financial assets were $23.0 million and $16.0 million for the three months ended September 30, 2011 and 2010, respectively. Total proceeds from the sale of financial assets were $24.6 million and $52.7 million for the six months ended September 30, 2011 and 2010, respectively.

INVESTMENT IN OPERATING LEASE EQUIPMENT—NET

Investment in operating lease equipment—net primarily represents leases that do not qualify as direct financing leases. The components of the investment in operating lease equipment—net are as follows (in thousands):
 
   
September 30,
  
March 31,
 
   
2011
 
Cost of equipment under operating leases
 $41,257  $44,105 
Less:  Accumulated depreciation and amortization
  (22,171)  (22,116)
Investment in operating lease equipment—net (1)
 $19,086  $21,989 

(1)
Includes estimated unguaranteed residual values of $7,116 thousand and $8,346 thousand as of September 30, 2011 and March 31, 2011, respectively, for operating leases.