Note 9. Equity Method Investment

TEL is a tractor and trailer equipment leasing company and used equipment reseller. We have not guaranteed any of TEL's debt and have no obligation to provide funding, services, or assets. We have an option to acquire 100% of TEL through May 31, 2016, by purchasing the majority owners' interest based on a multiple of TEL's average earnings before interest and taxes, adjusted for certain items including cash and debt balances as of the acquisition date. Subsequent to May 31, 2016, TEL's majority owners have the option to acquire our interest based on the same terms detailed above. During the three-month periods ended March 31, 2016 and 2015, we sold tractors and trailers to TEL totaling $0.4 million and $3.6 million, respectively, and received $0.5 million and $0.3 million, respectively, for providing various maintenance services, certain back-office functions, and for miscellaneous equipment. We recognized a net reversal of previously deferred gains totaling less than $0.1 million and net deferred gains of $0.1 million for the three months ended March 31, 2016 and 2015, respectively, representing 49% of the gains on units sold to TEL less any gains previously deferred and recognized when the equipment was subsequently sold to a third party. The deferred gains, totaling $0.7 million at March 31, 2016, are being carried as a reduction in our investment in TEL. At March 31, 2016 and December 31, 2015, we had a receivable from TEL for $3.2 million and $5.3 million, respectively, related to cash disbursements made pursuant to a cash management agreement and related to providing various maintenance services, certain back-office functions, and for miscellaneous equipment.

We have accounted for our investment in TEL using the equity method of accounting and thus our financial results include our proportionate share of TEL's 2016 net income through March 31, 2016, or $0.9 million. Our investment in TEL, totaling $17.7 million and $16.8 million, at March 31, 2016 and December 31, 2015, respectively, is included in other assets in the accompanying condensed consolidated balance sheets.

See TEL's summarized financial information below:

(in thousands)	As of March 31, 2016		As of December 31, 2015
Current Assets	$	16,738	$	14,275
Non-current Assets		129,527		125,782
Current Liabilities		9,584		29,644
Non-current Liabilities		108,976		84,516
Total Equity	$	27,705	$	25,897

	For the three months ended March 31, 2016		For the three months ended March 31, 2015
Revenue	$	19,635	$	29,025
Operating Expenses		16,610		25,552
Operating Income		3,025		3,473
Net Income	$	1,807	$	2,773