(7) Rental Fleet

Rental fleet is capitalized at cost and depreciated over the estimated useful life of the unit using the straight-line method. Rental fleet is depreciated whether or not it is out on rent. Capitalized cost of rental fleet includes the price paid to acquire the unit and freight charges to the location when the unit is first placed in service, and when applicable, the cost of manufacturing or remanufacturing, which includes the cost of customizing units. Ordinary repair and maintenance costs are charged to operations as incurred.

We periodically review depreciable lives and residual values against various factors, including the results of our lenders’ independent appraisal of our rental fleet, practices of our competitors in comparable industries and profit margins achieved on sales of depreciated units.

Appraisals on our rental fleet are required by our lenders on a regular basis. The appraisal typically reports no difference in the value of the unit due to the age or length of time it has been in our fleet. Based in part upon our lender’s third-party appraiser who evaluated our fleet as of September 30, 2017, management estimates that the net orderly liquidation appraisal value as of March 31, 2018 was approximately $1.1 billion. Our net book value for this fleet as of March 31, 2018 was $999.2 million.

Depreciation expense related to our rental fleet for the three months ended March 31, 2018 and 2017 was $8.1 million and $7.5 million, respectively. At March 31, 2018, all rental fleet units were pledged as collateral under our Amended and Restated ABL Credit Agreement, dated December 14, 2015, with Deutsche Bank AG New York Branch, as administrative agent, and the other lenders party thereto (the “Credit Agreement”).

Rental fleet consisted of the following at March 31, 2018 and December 31, 2017:

	Residual Value as Percentage of Original Cost (1)		Estimated Useful Life in Years	March 31, 2018			December 31, 2017
				(In thousands)
Storage Solutions:
Steel storage containers		55%	30	$	657,651		$	655,553
Steel ground level offices	55		30		386,315			374,836
Other					8,617			8,290
Total					1,052,583			1,038,679
Accumulated depreciation					(172,865	)		(168,112	)
Total Storage Solutions fleet, net				$	879,718		$	870,567
Tank & Pump Solutions:
Steel tanks			25	$	65,464		$	64,254
Roll-off boxes			15 - 20		30,885			29,897
Stainless steel tank trailers			25		28,730			28,871
Vacuum boxes			20		13,244			12,700
De-watering boxes			20		6,923			6,361
Pumps and filtration equipment			7		12,885			12,680
Other					7,069			7,088
Total					165,200			161,851
Accumulated depreciation					(45,703	)		(43,264	)
Total Tank & Pump Solutions fleet, net				$	119,497		$	118,587
Total rental fleet, net				$	999,215		$	989,154

(1)	Tank & Pump Solutions fleet has been assigned zero residual value.