Note

Equity Method Investment

We own a minority investment in Transport Enterprise Leasing, LLC ("TEL"). TEL is a tractor and trailer equipment leasing company and used equipment reseller. We have

not

guaranteed any of TEL's debt and have

obligation to provide funding, services, or assets.

May 2016,

the operating agreement with TEL was amended to, among other things, remove the previously agreed to fixed date purchase options. TEL’s majority owners are generally restricted from transferring their interests in TEL, other than to certain permitted transferees, without our consent.

We sold

$0.1

million and

$0.4

million of tractors or trailers to TEL during the

six

-months ended

June 30, 2017

and

2016,

respectively and we received

$0.3

million and

$0.9

respectively, for providing various maintenance services, certain back-office functions, and for miscellaneous equipment. We recognized a net reversal of previously deferred gains totaling approximately

$0.1

million for the

six

months ended

June 30, 2017

and

2016,

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. Deferred gains, totaling

$0.5

million at

June 30, 2017,

are being carried as a reduction in our investment in TEL. At

June 30, 2017

and

December 31, 2016,

we had accounts receivable from TEL of

$3.8

million and

$3.7

million, respectively, related to cash disbursements made pursuant to our performance of certain back-office and maintenance functions on TEL’s behalf.

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

2017

net income through

June 30, 2017,

$1.8

million. During the

second

quarter of

2017

we received a dividend from TEL of

$2.0

million reducing our investment in TEL. Our investment in TEL, totaling

$18.5

million at

June 30, 2017

and

December 31, 2016,

respectively, is included in other assets in the accompanying condensed consolidated balance sheets.

See TEL’s summarized financial information below:

(in thousands)	As of June 30, 2017		As of December 31, 2016
Current Assets	$	13,390	$	14,320
Non-current Assets		166,013		146,081
Current Liabilities		9,659		34,766
Non-current Liabilities		140,625		96,140
Total Equity	$	29,119	$	29,495

	For the three months ended June 30, 2017		For the three months ended June 30, 2016		For the six months ended June 30, 2017		For the six months ended June 30, 2016
Revenue	$	23,712	$	23,508	$	46,245	$	43,199
Operating Expenses		20,516		20,817		40,314		37,204
Operating Income		3,196		2,691		5,931		5,995
Net Income	$	2,023	$	1,610	$	3,689	$	3,812