Affiliated Companies

9 Months Ended

Sep. 30, 2019

Equity Method Investments and Joint Ventures [Abstract]

Affiliated Companies

Affiliated Companies

At September 30, 2019 and December 31, 2018, the aggregate carrying amount of our investment in affiliated companies that are accounted for under the equity method was $84.0 million and $77.8 million, respectively, and the aggregate carrying amount of our investment in affiliated companies that are not accounted for under the equity method was $13.4 million at both period-ends. We have elected to record these investments, for which fair value was not readily determinable, at cost, less impairment, adjusted for subsequent observable price changes. We test these investments for impairment whenever circumstances indicate that the carrying value of the investments may not be recoverable.

Our purchases from, and royalty payments made to, affiliates totaled $33.0 million and $85.2 million, respectively, for the three and nine months ended September 30, 2019, as compared to $16.3 million and $64.0 million, respectively, for the same periods in 2018. As of September 30, 2019 and December 31, 2018, the payable balance due to affiliates was $24.3 million and $12.9 million, respectively. The majority of these transactions related to a distributorship agreement with Daikyo Seiko, Ltd. (“Daikyo”) that allows us to purchase and re-sell Daikyo products.

Sales to affiliates were $2.2 million and $6.9 million, respectively, for the three and nine months ended September 30, 2019, as compared to $3.0 million and $8.0 million, respectively, for the same periods in 2018. As of September 30, 2019 and December 31, 2018, the receivable balance due from affiliates was $1.4 million and $1.6 million, respectively.

Please refer to Note 6, Affiliated Companies, to the consolidated financial statements in our 2018 Annual Report for additional details.