VARIABLE INTEREST ENTITIES

The Company holds a variable interest in three joint ventures for which the Company is the primary beneficiary. Two of the joint ventures operate distribution facilities which primarily distribute mining products. Titan is the 50% owner of one of these distribution facilities, which is located in Canada, and the 40% owner of the other such facility, which is located in Australia. The Company’s variable interest in these joint ventures relates to sales of Titan product to these entities, consigned inventory and working capital loans. Titan has intercompany notes and receivables used for operations of $1.8 million with the Canadian entity and $0.8 million with the Australian entity. The third joint venture is the consortium which owns Voltyre-Prom. Titan owns 43% of the consortium owning Voltyre-Prom, which is subject to a shareholder agreement containing a settlement put option which may require Titan to purchase the remaining equity interests in the consortium. See Note 13 for additional information.

The Company also holds a variable interest in five other entities for which Titan is the primary beneficiary. Each of these entities provides specific manufacturing related services at the Company's Tennessee facility. Titan's variable interest in these entities relates to financial support to the entities through providing many of the assets used by these entities in their business. The Company owns no equity in these entities. Based on a review of applicable guidance, these entities were consolidated beginning in 2016. As a result of the consolidation, financial statements as of, and for the year ended December 31, 2016 were affected as follows: sales increased by $0.5 million, net income increased by $0.7 million, total assets increased by $1.4 million, and noncontrolling interests increased by $1.4 million.

As the primary beneficiary of these variable interest entities (VIEs), the VIEs’ assets, liabilities, and results of operations are included in the Company’s consolidated financial statements as of, and for the year ended, December 31, 2016. The other equity holders’ interests are reflected in “Net loss attributable to noncontrolling interests” in the Consolidated Condensed Statements of Operations and “Noncontrolling interests” in the Consolidated Condensed Balance Sheets.

The following table summarizes the carrying amount of the VIEs’ assets and liabilities included in the Company’s Consolidated Condensed Balance Sheets at December 31, 2016 and 2015 (amounts in thousands):



	2016		2015
Cash and cash equivalents	$	9,396	$	9,245
Inventory	11,445		7,993
Other current assets	23,301		13,763
Property, plant, and equipment, net	30,448		25,181
Other noncurrent assets	4,955		5,179
Total assets	$	79,545	$	61,361

Current liabilities	22,068		12,850
Noncurrent liabilities	5,350		2,865
Total liabilities	$	27,418	$	15,715

All assets in the above table can only be used to settle obligations of the consolidated VIE. Liabilities are nonrecourse obligations. Amounts presented in the table above are adjusted for intercompany eliminations.

The Company holds a variable interest in certain VIEs which are not consolidated because Titan is not the primary beneficiary. The Company's involvement with these entities is in the form of direct equity interests and prepayments and purchases of materials. The maximum exposure to loss represents the loss of assets recognized by Titan relating to non-consolidated entities and amounts due to the non-consolidated assets. The assets and liabilities recognized in Titan's Consolidated Balance Sheets related to Titan's interest in these non-consolidated VIEs and the Company's maximum exposure to loss relating to non-consolidated VIEs were as follows at December 31, 2016 and 2015 (amounts in thousands):



	2016		2015
Investments	$	4,738	$	3,576
Other current assets	1,039		—
Total VIE assets	5,777		3,576
Accounts payable	932		—
Maximum exposure to loss	$	6,709	$	3,576