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. In

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 less than

$0.1

million and

$0.1

million of tractors or trailers to TEL during the

six

-months ended

June 30, 2018

and

2017,

respectively and we received

$3.9

million and

$2.2

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 approximately

$0.2

million and

$0.1

million for the

six

months ended

June 30, 2018

and

2017,

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

$0.2

million at

June 30, 2018,

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

June 30, 2018

and

December 31, 2017,

we had accounts receivable from TEL of

$5.1

million and

$8.6

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

2018

net income through

June 30, 2018,

$3.3

million. Our investment in TEL, totaling

$23.6

million and

$20.1

million at

June 30, 2018

and

December 31, 2017,

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, 2018		As of December 31, 2017
Current Assets	$	21,298	$	19,660
Non-current Assets		221,673		183,905
Current Liabilities		13,060		53,981
Non-current Liabilities		190,981		117,135
Total Equity	$	38,930	$	32,449

	For the three months ended June 30, 2018		For the three months ended June 30, 2017		For the six months ended June 30, 2018		For the six months ended June 30, 2017
Revenue	$	23,574	$	23,712	$	48,715	$	46,245
Operating Expenses		18,374		20,516		38,999		40,314
Operating Income		5,200		3,196		9,716		5,931
Net Income	$	3,464	$	2,023	$	6,482	$	3,689