NOTE H — LEASE RENTAL REVENUES AND AIRCRAFT AND ENGINES HELD FOR LEASE

Aircraft and engines held for lease, net, as of the below dates consisted of the following (in thousands):

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Total depreciation expense amounted to $1.1 million and $1.7 million for the three months ended September 30, 2023 and 2022, respectively. Total depreciation expense amounted to $3.3 million and $5.4 million for the nine months ended September 30, 2023 and 2022, respectively, and is included in cost of leasing in the Condensed Consolidated Statements of Operations.

The Company did not record any impairment of Flight Equipment for the three and nine months ended September 30, 2023. The Company recorded impairment of Flight Equipment in the amount of $0.9 million for the nine months ended September 30, 2022, which is included in cost of leasing in the Condensed Consolidated Statements of Operations.

Supplemental rents recognized as revenue totaled $0.9 million and $3.6 million for the three months ended September 30, 2023 and 2022, respectively. Supplemental rents recognized as revenue totaled $5.4 million and $10.1 million for the nine months ended September 30, 2023 and 2022, respectively.

The Company’s current operating lease agreements for leased Flight Equipment expire over the next two years. The amounts in the following table are based upon the assumption that Flight Equipment under operating leases will remain leased for the length of time specified by the respective lease agreements. Minimum future annual lease rentals contracted to be received under existing operating leases of Flight Equipment were as follows (in thousands):

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