Investments in Joint Ventures

12 Months Ended

Dec. 31, 2012

Investments in Joint Ventures [Abstract]

INVESTMENTS IN JOINT VENTURES:

NOTE 2 – INVESTMENTS IN JOINT VENTURES:

In 2007, a subsidiary of UES entered into an agreement with Maanshan Iron & Steel Company Limited (Maanshan) to form a joint venture company in China. UES owns 49% of the joint venture company and Maanshan owns 51%. Both companies contributed cash for their respective interests (which equated to $14,700 for UES). The joint venture company principally manufactures and sells forged backup rolling mill rolls of a size and weight currently not able to be produced by UES. Limited production began in 2010. UES has exclusive marketing and sales rights and earned commissions of $74 and $191 during 2012 and 2011, respectively, of which $14 and $50 is outstanding as of December 31, 2012 and 2011, respectively. No commissions were earned in 2010. UES has not guaranteed any of the obligations of the joint venture; accordingly, its maximum exposure of loss is limited to its investment. Since UES is the minority shareholder and allocation of earnings and voting rights are proportional to ownership interests, UES is not considered the primary beneficiary and, accordingly, accounts for its 49% interest in the joint venture under the equity method of accounting.

Assets, liabilities and shareholders’ equity of the joint venture as of September 30, 2012 and 2011 are summarized below. The joint venture is a start-up business and has been adversely impacted by the global economic slow-down, reduced demand and excess roll inventories of the potential customer base in China, including Maanshan. Losses of the joint venture approximated $(3,254), $(1,024) and $(979) for the twelve month period ended September 30, 2012, 2011 and 2010, respectively, of which the Corporation has recognized its share (or 49%) in its consolidated statements of operations. Management expects a continuation of losses in 2013. While losses to date are largely the result of non-cash expense, if conditions deteriorate or other impairment indicators arise, future earnings of the Corporation may be adversely affected by an impairment charge. The joint venture is financed primarily with external debt and borrowings from Maanshan. The difference between the carrying amount of the investment (11,979) and the value of the underlying equity in the net assets of the joint venture (13,396) relates primarily to the elimination of 49% of the profit (“intercompany profit”) for the sale of technology from UES to the joint venture in earlier years. The intercompany profit will be recognized when realized outside of the controlled group.

	2012		2011
Assets:
Current assets (includes receivables from related parties of $271 and $1,044, respectively)	$	17,356	$	12,965
Noncurrent assets		39,455		41,916
Total assets	$	56,811	$	54,881
Liabilities and Shareholders’ Equity:
Current liabilities (include liabilities to related parties of $18,534 and $6,433, respectively)	$	18,621	$	7,609
Noncurrent liabilities		10,850		17,077
Shareholders’ Equity		27,340		30,195
Total Liabilities and Shareholders’ Equity	$	56,811	$	54,881

The Corporation also has a 25% investment in a Chinese cast roll joint venture company which is recorded at cost, or $1,340. The Corporation does not participate in the management or daily operation of the joint venture company, has not guaranteed any of its obligations and has no ongoing responsibilities to it. Dividends may be declared by the Board of Directors of the joint venture company after allocation of after-tax profits to various “funds” equal to the minimum amount required under Chinese law. No dividends were declared or received in 2012 or 2011. Dividends declared and received in 2010 approximated $1,084.