Medical equipment consisted of the following as of December 31 (in thousands):

Included in ME in rental service above are $6.9 million and $3.4 million, as of December 31, 2014 and 2013, respectively, of pumps obtained under various capital leases. Included in accumulated depreciation above are $1.3 million and $0.6 million, as of December 31, 2014 and 2013, respectively, associated with the same capital leases. Under the terms of all such capital leases, the Company does not presently hold title to these pumps and will not obtain title until such time as the capital lease obligations are settled in full.

Depreciation expense for the years ended December 31, 2014 and 2013 was $3.3 million and $5.1 million, respectively, which were recorded in cost of revenues — pump depreciation and loss on disposal.

As of December 31, 2014 and 2013, ME held for sale or rental contained approximately $0.0 million and $1.0 million, respectively, of pre-owned equipment received from a financial institution with such equipment coming off lease. In June 2014, the Company purchased all remaining pre-owned equipment from the financial institution for $0.6 million. Under the Company’s prior arrangement with the financial institution, the Company did not pay for the equipment until it was sold. The liability for this equipment was shown in other current liabilities for a similar amount. The Company assumed risk of loss and accounts for the disposition of such equipment as a sale.