5. Investments in Foreign Joint Venture

We have interests in one joint venture, outside of the U.S. which is 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 until April 17, 2028.

The Company disposed of its M&I Electric Far East (“MIEFE”) joint venture interest during the second quarter of 2018.

The Company made no sales to its joint venture for the three months and nine months ended September 30, 2018 and 2017.

Summary (unaudited) financial information of our foreign joint venture in U.S. dollars was as follows at September 30, 2018 and December 31, 2017 and for the three and nine months ended September 30, 2018 and 2017 (in thousands):

	BOMAY				MIEFE
	2018		2017		2018		2017
Assets:
Total current assets	$	54,158	$	50,000	$	-	$	121
Total non-current assets		3,154		3,457		-		15
Total assets	$	57,312	$	53,457	$	-	$	136
Liabilities and equity:
Total liabilities	$	31,788	$	25,598	$	-	$	198
Total joint ventures’ equity		25,524		27,859		-		(62	)
Total liabilities and equity	$	57,312	$	53,457	$	-	$	136

	Three Months Ended September 30,
	BOMAY				MIEFE
	2018		2017		2018		2017

Revenue	$	9,283	$	6,076	$	-	$	46
Gross Profit	$	1,918	$	1,160	$	-	$	10
Earnings	$	627	$	245	$	-	$	11


	Nine Months Ended September 30,
	BOMAY				MIEFE
	2018		2017		2018		2017

Revenue	$	29,592	$	17,225	$	-	$	80
Gross Profit	$	5,615	$	3,805	$	-	$	22
Earnings	$	1,764	$	709	$	-	$	51

The following is a summary of activity in investments in foreign joint ventures for the nine months ended September 30, 2018 (unaudited):

	September 30, 2018
	BOMAY*			MIEFE			TOTAL
	(in thousands)
Investments in foreign joint ventures:
Balance at December 31, 2017	$	10,736		$	211		$	10,947
Equity in earnings in 2018		706			-			706
Dividend paid in 2018		(1,127	)		-			(1,127	)
Foreign currency translation adjustment		(566	)		(211	)		(777	)
Investments, end of period	$	9,749		$	-		$	9,749

Components of investments in foreign joint ventures:
Investment in joint ventures	$	2,033		$	-		$	2,033
Undistributed earnings		7,545			-			7,545
Foreign currency translation		171			-			171
Investments, end of period	$	9,749		$	-		$	9,749

Accumulated statutory reserves in equity method investments of $2.81 million at September 30, 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 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 venture, reduce the carrying value of the investment.

The Company reviews its equity method investment 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 September 30, 2018 and December 31, 2017.