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 approximately

$0.1

million of tractors or trailers to TEL during each of the

nine

months ended

September 30, 2018

and

2017,

and we received

$5.9

million and

$4.2

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 for each of the

nine

months ended

September 30, 2018

and

2017,

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

September 30, 2018,

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

September 30, 2018

and

December 31, 2017,

we had accounts receivable from TEL of

$5.7

million and

$7.8

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

September 30, 2018,

$5.4

million. Our investment in TEL, totaling

$25.7

million and

$20.1

million at

September 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 September 30, 2018		As of December 31, 2017
Current Assets	$	23,276	$	19,660
Non-current Assets		255,352		183,905
Current Liabilities		15,451		53,981
Non-current Liabilities		219,878		117,135
Total Equity	$	43,299	$	32,449

	For the three months ended September 30, 2018		For the three months ended September 30, 2017		For the nine months ended September 30, 2018		For the nine months ended September 30, 2017
Revenue	$	25,437	$	18,299	$	74,152	$	64,543
Operating Expenses		19,061		15,439		58,060		55,753
Operating Income		6,376		2,860		16,092		8,790
Net Income	$	4,369	$	1,499	$	10,850	$	5,188