4.	FINANCING RECEIVABLES AND OPERATING LEASES

FINANCING RECEIVABLES—NET

Our financing receivables, net consist of the following (in thousands):

March 31, 2019	Notes Receivables			Lease-Related Receivables			Total Financing Receivables
Minimum payments	$	40,563		$	64,201		$	104,764
Estimated unguaranteed residual value (1)		-			14,639			14,639
Initial direct costs, net of amortization (2)		377			332			709
Unearned income		-			(7,671	)		(7,671	)
Reserve for credit losses (3)		(505	)		(530	)		(1,035	)
Total, net	$	40,435		$	70,971		$	111,406
Reported as:
Current	$	30,852		$	32,914		$	63,766
Long-term		9,583			38,057			47,640
Total, net	$	40,435		$	70,971		$	111,406

(1)

Includes $8,996 thousand for the estimated residual values of direct financing leases for which we sold the financing assets.

(2)

Initial direct costs are shown net of amortization of $275 thousand.

(3)

For details on reserve for credit losses, refer to Note 6, “Reserves for Credit Losses.”

March 31, 2018	Notes Receivables			Lease-Related Receivables			Total Financing Receivables
Minimum payments	$	62,992		$	65,943		$	128,935
Estimated unguaranteed residual value (1)		-			11,226			11,226
Initial direct costs, net of amortization (2)		375			334			709
Unearned income		-			(8,251	)		(8,251	)
Reserve for credit losses (3)		(486	)		(640	)		(1,126	)
Total, net	$	62,881		$	68,612		$	131,493
Reported as:
Current	$	39,993		$	29,943		$	69,936
Long-term		22,888			38,669			61,557
Total, net	$	62,881		$	68,612		$	131,493

(1)

Includes $6,004 thousand for estimated residual values of direct financing leases for which we sold the financing assets.

(2)

Initial direct costs are shown net of amortization of $341 thousand.

(3)

For details on reserve for credit losses, refer to Note 6, “Reserves for Credit Losses.”

Future scheduled minimum lease payments for investments in direct financing and sales-type leases as of March 31, 2019 are as follows (in thousands):

Year ending March 31, 2019	$	37,223
2020		17,382
2021		7,469
2022		1,960
2023 and thereafter		167
Total	$	64,201

OPERATING LEASES—NET

Operating leases—net represents leases that do not qualify as direct financing leases. The components of the operating leases—net are as follows (in thousands):

	March 31, 2019			March 31, 2018
Cost of equipment under operating leases	$	21,532		$	15,683
Accumulated depreciation		(10,139	)		(8,729	)
Investment in operating lease equipment—net (1)	$	11,393		$	6,954

(1)	Amounts include estimated unguaranteed residual values of $2,906 thousand and $1,921 thousand as of March 31, 2019 and 2018, respectively.

Future scheduled minimum lease rental payments as of March 31, 2019 are as follows (in thousands):

Year ending March 31, 2019	$	4,490
2020		2,728
2021		1,497
2022		1,315
2023 and thereafter		443
Total	$	10,473

TRANSFERS OF FINANCIAL ASSETS

We enter into arrangements to transfer the contractual payments due under financing receivables and operating lease agreements, which are accounted for as secured borrowings or sales.

For transfers accounted for as a secured borrowing, the corresponding investments serve as collateral for non-recourse notes payable. As of March 31, 2019, and 2018 we had financing receivables of $50.2 million and $52.0 million, respectively, and operating leases of $7.8 million and $5.3 million, respectively that were collateral for non-recourse notes payable. See Note 8, “Notes Payable and Credit Facility.”

For transfers accounted for as sales, we derecognize the carrying value of the asset transferred and recognize a net gain or loss on the sale, which are presented within net sales in the consolidated statement of operations. For the years ended March 31, 2019, 2018, and 2017, we recognized net gains of $9.1 million, $6.8 million, and $8.1 million, respectively, and total proceeds from these sales were $276.1 million, $267.3 million, and $339.4 million, respectively.

When we retain servicing obligations in transfers accounted for as sales, we allocate a portion of the proceeds to deferred revenues, which is recognized as we perform the services. As of March 31, 2019, and 2018, we had deferred revenue of $0.4 million and $0.5 million, respectively, for servicing obligations.

In a limited number of transfers accounted for as sales, we indemnified the assignee in the event that the lessee elects to early terminate the lease. As of March 31, 2019, our maximum potential future payments related to such guarantees is $0.4 million. We believe the possibility of making any payments to be remote.