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

nine

-months ended

September 30, 2017

and

2016,

respectively and we received

$0.5

million and

$1.3

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 approximately

$0.2

million for each of the

nine

months ended

September 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

$0.4

million at

September 30, 2017,

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

September 30, 2017

and

December 31, 2016,

we had accounts receivable from TEL of

$7.8

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

2017

net income through

September 30, 2017,

$2.6

million. During the year-to-date period ended

September 30, 2017

we received a dividend from TEL of

$2.0

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

$19.3

million and

$18.5

million at

September 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 September 30, 2017		As of December 31, 2016
Current Assets	$	20,852	$	14,320
Non-current Assets		171,801		146,081
Current Liabilities		14,216		34,766
Non-current Liabilities		147,819		96,140
Total Equity	$	30,618	$	29,495

	For the three months ended September 30 , 2017		For the three months ended September 30 , 2016		For the nine months ended September 30 , 2017		For the nine months ended September 30 , 2016
Revenue	$	18,299	$	29,359	$	64,543	$	72,559
Operating Expenses		15,439		27,096		55,753		64,301
Operating Income		2,860		2,263		8,790		8,258
Net Income	$	1,499	$	1,165	$	5,188	$	4,977