Note 8.

Investments

Investments of the Company consist of a nonconsolidated equity method investment of $3,495,000 and $1,987,000 at December 31, 2011 and December 31, 2010, respectively.

The Company is a member of a joint venture with L B Industries, Inc. and James Legg until June 30, 2019. The Company and L B Industries, Inc. each have a 45% ownership interest in the joint venture, L B Pipe & Coupling Products, LLC (JV), which commenced operations in January 2010. The venture manufactures, markets and sells various products for the energy, utility and construction markets. Under the terms of the JV agreement, as amended, the Company was initially required to make capital contributions totaling approximately $2,200,000. The Company fulfilled these commitments during 2010. Under terms of additional amendments to the JV agreement, the Company was required to make additional capital contributions totaling approximately $800,000, bringing the Company's total required capital contributions to $3,000,000. The Company fulfilled the additional commitments during 2011. The other JV members are required to make proportionate contributions in accordance with the ownership percentages in the JV agreement.

Under applicable guidance for variable interest entities in ASC 810, "Consolidation," the Company determined that the JV is a variable interest entity, as the JV has not demonstrated that it has sufficient equity to support its operations without additional financial support. The Company concluded that it is not the primary beneficiary of the variable interest entity, as the Company does not have a controlling financial interest and does not have the power to direct the activities that most significantly impact the economic performance of the JV. Accordingly, the Company concluded that the equity method of accounting remains appropriate.

The Company recorded equity in the income of the JV of approximately $708,000 for 2011. The Company recorded equity in the losses of the JV of approximately $(213,000) for 2010.

The Company's exposure to loss results from its capital contributions, net of the Company's share of the venture's gains or losses, and its net investment in the direct financing lease covering the facility used by the JV for its operations. The carrying amounts with the maximum exposure to loss of the Company at December 31, 2011 and 2010, respectively, are as follows:

	2011		2010
	In thousands
Equity method investment	$	3,495	$	1,987
Net investment in direct financing lease		971		1,018
	$	4,466	$	3,005

The Company is leasing five acres of land and the facility to the JV over a period of 9.5 years, with a 5.5 year renewal period. Monthly rent over the term of the lease is approximately $10,000, with a balloon payment of approximately $488,000 which is required to be paid either at the termination of the lease, allocated over the renewal period or during the initial term of the lease. This lease qualifies as a direct financing lease under the applicable guidance in ASC 840-30, "Leases." The Company maintained a net investment in this direct financing lease of approximately $971,000 and $1,018,000 at December 31, 2011 and 2010, respectively.

The following is a schedule of the direct financing minimum lease payments for the next five years and thereafter:

	In thousands
2012	$	51
2013		54
2014		58
2015		63
2016		67
Thereafter		678
	$	971

The Company recorded its acquisition of Portec in accordance with ASC 805. (Refer to Note 3, "Acquisitions"). In connection with ASC 805-10-25, the Company remeasured its previously held equity interest in Portec at the acquisition date fair value and recognized a gain of $1,364,000 on December 15, 2010.

During 2009, the Company sold shares of its investment in Portec available-for-sale marketable equity securities with an original cost of approximately $921,000, for cash proceeds of approximately $2,115,000 and recognized a gain of approximately $1,194,000.