Investment in Unconsolidated Affiliates

3 Months Ended

Apr. 01, 2017

Equity Method Investments and Joint Ventures [Abstract]

The Company owns a 50 percent interest in Tecumseh Products Holdings LLC (Joint Venture), an unconsolidated affiliate that acquired Tecumseh Products Company (Tecumseh) during the third quarter of 2015. The Company also owns a 50 percent interest in a second unconsolidated affiliate that provided financing to Tecumseh in conjunction with the acquisition. These investments are recorded using the equity method of accounting, as the Company can exercise significant influence but does not own a majority equity interest or otherwise control the respective entities. Under the equity method of accounting, these investments are stated at initial cost and are adjusted for subsequent additional investments and the Company’s proportionate share of earnings or losses and distributions.

The Company records its proportionate share of the investees’ net income or loss one quarter in arrears as income (loss) from unconsolidated affiliates, net of tax, in the Condensed Consolidated Statements of Income and its proportionate share of the investees’ other comprehensive income (loss), net of income taxes, in the Condensed Consolidated Statements of Comprehensive Income. In general, the equity investment in unconsolidated affiliates is equal to the current equity investment plus the entities’ undistributed earnings.

The following tables present summarized financial information derived from the Company’s equity method investees’ combined consolidated financial statements, which are prepared in accordance with U.S. GAAP.



	April 1, 2017		December 31, 2016

Current assets	$	231,485	$	244,323
Noncurrent assets	129,500		130,400
Current liabilities	152,710		148,806
Noncurrent liabilities	62,126		71,681



	For the Quarter Ended
(In thousands)	April 1, 2017			April 2, 2016

Net sales	$	126,300		$	151,600
Gross profit	15,600			1,800
Net (loss) income	(2,487		)	5,843

The Company’s income from unconsolidated affiliates, net of tax, for the quarter ended April 2, 2016 included a gain of $17.1 million that resulted from the allocation of the purchase price, which was partially offset by restructuring and impairment charges of $5.3 million and net losses of $6.0 million.