Investments

9 Months Ended

Sep. 30, 2018

INVESTMENTS

During the quarter ended September 30, 2017, pursuant to the limited liability company agreement, the Company determined to sell its 45% ownership interest in L B Pipe and Coupling Products, LLC (“L B Pipe JV”) to the other 45% equity holder. The Company concluded that it had met the criteria under applicable guidance for a long-lived asset to be held for sale, and, accordingly, reclassified its L B Pipe JV investment of $4,288 as a current asset held for sale within other current assets. The asset was subsequently remeasured to its fair market value of $3,875. The difference between the fair market value and the Company's carrying amount of $413 was recorded as an other-than-temporary impairment during 2017.

On August 1, 2018, the Company executed the sale of its 45% ownership interest in L B Pipe JV. Under the terms of the agreement, the Company received payment of $3,875 for its 45% ownership interest and $1,235, plus $159 in accrued interest, as repayment of the outstanding revolving line of credit.

As of September 30, 2018 and December 31, 2017, the Company had a nonconsolidated equity method investment of $155 and $162, respectively.

The Company recorded equity in the income of L B Pipe JV of $0 and $434 for the three months ended September 30, 2018 and 2017, respectively, and $0 and $386, respectively, for the nine months ended September 30, 2018 and 2017.

During 2016, the Company and the other 45% member each executed a revolving line of credit with L B Pipe JV with an available limit of $1,350. The Company and the other 45% member each loaned $1,235 to L B Pipe JV in an effort to maintain compliance with L B Pipe JV’s debt covenants with an unaffiliated bank. The Company received its outstanding loan balance, including accrued interest, at the August 1, 2018 sale date.

The Company’s exposure to loss results from its capital contributions and loans, net of the Company’s share of L B Pipe JV’s income or loss, and its net investment in the direct financing lease covering the facility used by L B Pipe JV for its operations.

The carrying amounts with the Company’s maximum exposure to loss as of September 30, 2018 and December 31, 2017, respectively, were as follows:


	September 30, 2018		December 31, 2017
L B Pipe JV investment	$	—	$	3,875
Revolving line of credit	—		1,235
Net investment in direct financing lease	602		735
	$	602	$	5,845

The Company is leasing five acres of land and two facilities to L B Pipe JV. Subsequent to the Company's sale of its 45% ownership interest in L B Pipe JV, the Company and L B Pipe JV agreed upon a lease extension through June 30, 2020, with no further renewal period. The current monthly lease payments approximate $17, with a balloon payment of approximately $488, which is required to be paid on or before April 1, 2019. This lease qualifies as a direct financing lease under the applicable guidance in ASC 840-30, “Leases.”

The following is a schedule as of September 30, 2018 of the direct financing minimum lease payments for the remainder of 2018 and the year 2019:


	Minimum Lease Payments
Remainder of 2018	$	35
2019	567

	$	602