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. In May 2016, the operating agreement with TEL was amended to, among other things, remove the previously agreed to fixed date purchase options. Our option to acquire up to the remaining 51% of TEL would have expired May 31, 2016, and TEL's majority owners would have received the option to purchase our ownership in TEL. The options previously in effect were eliminated, and we are discussing with TEL's other owners a replacement option structure and alternatives. TEL’s majority owners are generally restricted from transferring their interests in TEL, other than to certain permitted transferees, without our consent. During the nine-month periods ended September 30, 2016 and 2015, we sold tractors and trailers to TEL totaling $0.4 million and $6.2 million, respectively, and received $1.3 million and $0.8 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 $0.2 million and less than $0.1 million for the nine months ended September 30, 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 $0.6 million at September 30, 2016, are being carried as a reduction in our investment in TEL. At September 30, 2016 and December 31, 2015, we had a receivable from TEL for $6.9 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 September 30, 2016, or $2.5 million. Our investment in TEL, totaling $17.9 million and $16.8 million, at September 30, 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 September 30, 2016		As of December 31, 2015
Current Assets	$	18,114	$	14,275
Non-current Assets		150,925		125,782
Current Liabilities		14,181		29,644
Non-current Liabilities		126,876		84,516
Total Equity	$	27,982	$	25,897

	For the three months ended September 30, 2016		For the three months ended September 30, 2015		For the nine months ended September 30, 2016		For the nine months ended September 30, 2015
Revenue	$	29,359	$	23,196	$	72,559	$	86,611
Operating Expenses		27,096		20,125		64,301		76,541
Operating Income		2,263		3,071		8,258		10,070
Net Income	$	1,165	$	2,180	$	4,977	$	7,694