10.

EQUITY METHOD INVESTMENT

May 2011,

we acquired a

49.0%

interest in TEL for

$1.5

million in cash. Additionally, TEL

s majority owners were eligible to receive an earn-out of up to

$4.5

million for TEL'

s results through

December 31, 2012,

of which

$1.0

million was earned based on TEL'

2011

results and

$2.4

million was earned based on TEL'

2012

results. The earn-out payments increased our investment balance and there are

additional earn-outs payable for future results.

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. 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 owners a replacement option structure and other alternatives. TEL’s majority owners are generally restricted from transferring their interests in TEL, other than to certain permitted transferees, without our consent. For the years ended

December 31, 2017

and

2016,

we sold tractors and trailers to TEL for

$0.2

million and

$0.4

million, respectively, and received

$5.9

million and

$5.0

million, respectively, for providing various maintenance services, certain back-office functions, and for miscellaneous equipment.

Additionally, we paid

$0.5

million to TEL for leases of revenue equipment in

2017

with

similar payments in

2016

We reversed previously deferred gains of

$0.2

million for each of the years ending

December 31, 2017

and

2016,

representing

49%

of the gains on units sold to TEL less any gains previously deferred and recognized when the equipment was sold to a

third

party. Deferred gains totaling

$0.4

million and

$0.6

million at

December 31, 2017

and

December 31, 2016,

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

December 31, 2017

and

2016,

we had accounts receivable from TEL of

$8.6

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 net income, which amounted to

$3.4

million in

2017,

$3.0

million in

2016,

and

$4.6

million in

2015.

We received an equity distribution from TEL for

$2.0

million in

2017,

$1.5

million in

2016,

and

equity distribution in

2015,

which was distributed to each member based on its respective ownership percentage. Our investment in TEL, totaling

$20.1

million and

$18.5

million at

December 31, 2017

and

2016,

respectively, is included in other assets in the accompanying consolidated balance sheet. Our investment in TEL is comprised of the

$4.9

million cash investment noted above and our equity in TEL'

s earnings since our investment, partially offset by dividends received since our investment for minimum tax withholdings as noted above and the abovementioned deferred gains on sales of equipment to TEL.

See TEL

s summarized financial information below.

(in thousands)	As of the years ended December 31,
	201 7		2016
Current Assets	$	19,660	$	14,320
Non-current Assets		183,905		146,081
Current Liabilities		53,981		34,766
Non-current Liabilities		117,135		96,140
Total Equity	$	32,449	$	29,495

(in thousands)	As of the years ended December 31,
	201 7		2016		2015
Revenue	$	84,865	$	94,432	$	104,838
Operating Expenses		72,868		83,475		91,644
Operating Income		11,997		10,957		13,194
Net Income	$	6,954	$	6,598	$	9,061