INVESTMENTS

The Company is a member of a joint venture, LB Pipe & Coupling Products, LLC (“LB Pipe JV”), in which it maintains a 45% ownership interest. LB Pipe JV manufactures, markets, and sells various precision coupling products for the energy, utility, and construction markets and is scheduled to terminate on June 30, 2019.

Under applicable guidance for variable interest entities in ASC 810, “Consolidation,” the Company determined that LB Pipe JV is a variable interest entity. 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 LB Pipe JV. Accordingly, the Company concluded that the equity method of accounting remains appropriate.

At June 30, 2017 and December 31, 2016, the Company had a nonconsolidated equity method investment of $3,853 and $3,902, respectively, in LB Pipe JV and other equity investments totaling $123 and $129, respectively.

The Company recorded equity in the income of LB Pipe JV of $150 and loss of $476 for the three months ended June 30, 2017 and 2016, respectively. For the six months ended June 30, 2017 and 2016, the Company recorded equity in the loss of LB Pipe JV of $48 and $725, respectively. During 2016, the Company and the other 45% member each executed a revolving line of credit with LB Pipe JV with an available limit of $1,350. The Company and the other 45% member each loaned $1,235 to LB Pipe JV in an effort to maintain compliance with LB Pipe JV’s debt covenants with an unaffiliated bank. The Company’s loan with LB Pipe JV matures on December 15, 2017.

The Company’s exposure to loss results from its capital contributions and loans, net of the Company’s share of LB Pipe JV’s income or loss, and its net investment in the direct financing lease covering the facility used by LB Pipe JV for its operations, which is described below. The carrying amounts with the Company’s maximum exposure to loss at June 30, 2017 and December 31, 2016, respectively, are as follows:



	June 30, 2017		December 31, 2016
LB Pipe JV equity method investment	$	3,853	$	3,902
Revolving line of credit	1,235		1,235
Net investment in direct financing lease	806		871
	$	5,894	$	6,008

The Company is leasing five acres of land and two facilities to LB Pipe JV through June 30, 2019, with a 5.5 year renewal period. The current monthly lease payments approximate $17, with a balloon payment of approximately $488, 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 following is a schedule of the direct financing minimum lease payments for the remainder of 2017 and the years 2018 and thereafter:



	Minimum Lease Payments
2017	$	71
2018	150
2019	585
	$	806