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TCC Investment
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6 Months Ended |
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Jun. 30, 2011
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| TCC Investment [Abstract] | |
| TCC Investment |
12. TCC Investment
In February 2008, the Company entered into an agreement with TKK to form a new joint
venture company, TC Catalyst Incorporated (TCC), a Japanese corporation. The joint venture is
part of the Catalyst division. The Company entered the joint venture in order to improve its
presence in Japan and Asia and strengthen its business flow into the Asian market.
In December 2008, the Company agreed to sell and transfer specific heavy duty diesel
catalyst technology and intellectual property to TKK for use in the defined territory for a
total selling price of $7.5 million. TKK will provide that intellectual property to TCC on a
royalty-free basis. The Company also sold shares in TCC to TKK reducing its ownership to 30%.
Of this sale, $5.0 million was completed and recognized in 2008 with $2.5 million recognized in
2009.
In December 2009, the Company agreed to sell and transfer specific three-way catalyst and
zero platinum group metal patents to TKK for use in specific geographic regions. The patents
were sold for $3.9 million. TKK paid the Company $1.9 million in 2009 and $2.0 million in the
first quarter of 2010 and recognized the gain on the sale of the patents of $3.9 million in the
first quarter of 2010. As part of the transaction, the Company also sold shares in TCC, which
reduced its ownership in the joint venture to 5%. As the Company is contractually obligated to
fund its portion of the losses of the joint venture based on its ownership percentage, the
Company recognized a gain of $1.1 million during the year ended December 31, 2009 as a result
of the decrease in ownership and the related decrease to its obligation to fund losses.
The Company’s investment in TCC is accounted for using the equity method as the Company
still has significant influence over TCC as a result of having a seat on TCC’s board. In
February 2010, the Company entered into an agreement to loan 37.5 million JPY (approximately
$0.4 million) to TCC to fund continuing operations. The loan was funded in four monthly
tranches starting in February 2010 and ending in May 2010. As of December 31, 2010, the Company
had loaned TCC 37.5 million JPY. If the loan is not repaid by TCC, it will offset the Company’s
obligation to fund its portion of TCC’s losses. Given TCC’s historical losses, the loan has
been recorded as a reduction of such obligations. At June 30, 2011, the balance of the
Company’s loan to TCC less its share of accumulated losses in the amount of $0.1 million is
included in other current assets. TCC operates with a March 31 fiscal year-end.
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