5. Investments in Foreign Joint Ventures

We have interests in two joint ventures, outside of the United States of America (“U.S.”) which are accounted for using 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. BOMAY was formed in 2006 in China with a term of 12 years and was set to expire in 2018. In March 2018, an agreement was approved by the BOMAY Board of Directors extending the joint venture agreement beyond the 2018 expiration date pending approval by the Chinese government; and,

M&I Electric Far East, Ltd. ("MIEFE”), in which the Company currently owns 41% of the joint venture with our joint venture partner, Sonepar, owning 51% and MIEFE’s general manager owning the remaining 8%. In 2016, due to market conditions, the business suspended operations and the investment in MIEFE was written down to zero, excluding the foreign currency translation of $0.21 million which will be adjusted upon the completion of the disposal. In November 2017, the Company executed a letter of intent to divest of its ownership interest in MIEFE.

The Company made no sales to joint ventures for the three months ended March 31, 2018 and 2017.

Summary (unaudited) financial information of our foreign joint ventures in U.S. dollars was as follows at March 31, 2018 and December 31, 2017 and for the three months ended March 31, 2018 and 2017 (in thousands):

	BOMAY				MIEFE
	2018		2017		2018			2017
Assets:
Total current assets	$	54,070	$	50,000	$	101		$	121
Total non-current assets		3,520		3,457		15			15
Total assets	$	57,590	$	53,457	$	116		$	136
Liabilities and equity:
Total liabilities	$	28,233	$	25,598	$	180		$	198
Total joint ventures’ equity		29,357		27,859		(64	)		(62	)
Total liabilities and equity	$	57,590	$	53,457	$	116		$	136

	Three Months Ended March 31,
	BOMAY				MIEFE
	2018		2017		2018			2017

Revenue	$	8,078	$	4,221	$	67		$	-
Gross Profit	$	1,785	$	1,335	$	3		$	-
Earnings	$	427	$	130	$	(2	)	$	-

The following is a summary of activity in investments in foreign joint ventures for the three months ended March 31, 2018 (unaudited):

	March 31, 2018
	BOMAY**			MIEFE		TOTAL
	(in thousands)
Investments in foreign joint ventures:
Balance at December 31, 2017	$	10,736		$	211	$	10,947
Equity in earnings (loss) in 2018		171			-		171
Dividend declared in 2018*		(1,051	)		-		(1,051	)
Foreign currency translation adjustment		408			-		408
Investments, end of period	$	10,264		$	211	$	10,475

Components of investments in foreign joint ventures:
Investment in joint ventures	$	2,033		$	-	$	2,033
Undistributed earnings		7,086			-		7,086
Foreign currency translation		1,145			211		1,356
Investments, end of period	$	10,264		$	211	$	10,475

In March 2018, the BOMAY Board of Directors approved the distribution of dividends in the amount of $2.91 million, to be distributed in June 2018. The Company’s share of the dividends totaling $1.05 million has been accrued for at March 31, 2018 and is included in the prepaid expenses and other current assets in the condensed consolidated balance sheets.

Accumulated statutory reserves in equity method investments of $2.81 million at March 31, 2018 and December 31, 2017, respectively, are included in AETI’s consolidated retained earnings. In accordance with the People’s Republic of China, (“PRC”), regulations on enterprises with foreign ownership, a wholly-owned foreign invested enterprise established in the PRC 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 of accounting, the Company’s share of the joint ventures’ operations’ earnings or loss is recognized in the condensed consolidated statements 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.

The Company reviews its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable or the inability of the investee to sustain an earnings capacity that would justify the carrying amount of the investment. Based on this analysis, there was no indication of impairment at March 31, 2018 and December 31, 2017.