5.	Investments in Foreign Joint Ventures

We have interests in three joint ventures outside of the United States which are accounted for on the equity method:

•

BOMAY Electric Industries Company, Ltd. (“BOMAY”), in which the Company holds a 40% interest, Baoji Oilfield Machinery Co., Ltd. (a subsidiary of China National Petroleum Corporation) holds a 51% interest and AA Energies, Inc., holds a 9% interest.

•

M&I Electric Far East, Ltd. (“MIEFE”), in which the Company holds a 41% interest, MIEFE’s general manager holds a 8% interest and Oakwell Engineering, Ltd., of Singapore, holds a 51% interest.

•

AETI Alliance Group do Brazil Sistemas E Servicos Em Energia LTDA. (“AAG”), in which the Company holds a 49% interest and Beppe Hand Eddy Askerbo, of Brazil, holds a 51% interest.

Sales to joint ventures are made on an arms-length basis.

Summary unaudited financial information of our foreign joint ventures (100%) in U.S. dollars was as follows at June 30, 2013 and December 31, 2012 and for the three and six months ended June 30, 2013 and 2012:


	BOMAY				MIEFE				AAG
	2013		2012		2013		2012		2013		2012
Assets:
Total current assets	$	102,245	$	91,926	$	4,498	$	3,894	$	4,353	$	2,241
Total non-current assets		5,057		5,116		134		116		860		775

Total assets	$	107,302	$	97,042	$	4,632	$	4,010	$	5,213	$	3,016

Liabilities and equity:
Total liabilities	$	82,077	$	73,293	$	1,757	$	1,422	$	2,217	$	1,511
Total equity		25,225		23,749		2,875		2,588		2,996		1,505

Total liabilities and equity	$	107,302	$	97,042	$	4,632	$	4,010	$	5,213	$	3,016


	Three Months Ended, June 30, 2013 and 2012
	BOMAY				MIEFE				AAG
	2013		2012		2013		2012		2013		2012
Revenue	$	31,483	$	33,991	$	2,824	$	2,185	$	4,514	$	1,152
Earnings	$	1,619	$	2,655	$	337	$	30	$	945	$	(39	)


	Six Months Ended June 30, 2013 and 2012
	BOMAY				MIEFE				AAG
	2013		2012		2013		2012		2013		2012
Revenue	$	64,992	$	57,009	$	5,491	$	5,080	$	7,999	$	2,665
Earnings	$	4,120	$	4,401	$	386	$	50	$	1,837	$	90

The following is a summary of activity in AETI’s investment in foreign joint ventures for the six months ended June 30, 2013:


	BOMAY**			MIEFE			AAG			TOTAL
	(in thousands)
Investments in foreign joint ventures:
Balance at December 31, 2012	$	9,531		$	1,063		$	814		$	11,408
Equity in earnings (loss) in 2013		1,648			158			900			2,706
Repayment of advances		—			—			(83	)		(83	)
Dividend distributions in 2013		(1,189	)*		—			(23	)		(1,212	)
Foreign currency translation adjustment		102			(41	)		(139	)		(78	)

Investments, end of period	$	10,092		$	1,180		$	1,469		$	12,741


Components of investments in foreign joint ventures:
Investment in foreign joint ventures	$	2,033		$	14		$	150		$	2,198
Undistributed earnings		6,859			913			1,538			9,310
Foreign currency translation		1,200			253			(219	)		1,233

Investments, end of period	$	10,092		$	1,180		$	1,469		$	12,741

*	This dividend receivable was accrued by the Company at June 30, 2013 and is included in prepaid expenses and other current assets. It was received in July 2013.

Accumulated statutory reserves in equity method investments of $1,857 at June 30, 2013 and $1,620 at December 31, 2012 are included in AETI’s consolidated retained earnings. In accordance with the People’s Republic of China’s (“PRC”), regulations on enterprises with foreign ownership an enterprise established in the PRC with foreign ownership is required to provide for certain statutory reserves, namely: (i) General reserve Fund, (ii) Enterprise Expansion Fund and (iii) Staff Welfare and Bonus Fund, which are appropriated from net profit as reported in the enterprise’s PRC statutory accounts. A non-wholly owned foreign invested enterprise is permitted to provide for the above allocation at the discretion of its board of directors. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends.

Under the equity method, the Company’s share of the foreign joint ventures’ operations’ earnings or loss is recognized in the condensed consolidated statement of operations as equity income (loss) from foreign joint ventures’ operations. Joint venture income increases the carrying value of the joint venture investment and joint venture losses, as well as dividends received from the joint ventures, reduce the carrying value of the investment. Each reporting period, the Company evaluates the carrying value of these equity method investments as to whether an impairment adjustment may be necessary. In making this evaluation, a variety of quantitative and qualitative factors are considered including national and local economic, political and market conditions, industry trends and prospects, liquidity and capital resources and other pertinent factors. Based on this evaluation for this reporting period, the Company does not believe an impairment adjustment is necessary.