Equity Investments

12 Months Ended

Dec. 31, 2016

Equity Method Investments And Joint Ventures [Abstract]

NOTE 9. EQUITY INVESTMENTS

Investment in joint venture as of December 31, 2016 reflected the equity interest in our 50% investment in our WAVE joint venture. The WAVE joint venture is reflected in our consolidated financial statements using the equity method of accounting.

We use the equity in earnings method to determine the appropriate classification of distributions from WAVE within our cash flow statement. During 2016, 2015 and 2014, WAVE distributed amounts in excess of our capital contributions and proportionate share of retained earnings. Accordingly, the distributions in these years were reflected as a return of investment in cash flows from investing activity in our Consolidated Statement of Cash Flows. Distributions from WAVE in 2016, 2015 and 2014 were $86.9 million, $64.2 million, and $67.9 million, respectively.

In certain markets, we sell WAVE products directly to customers pursuant to specific terms of sale. In those circumstances, we record the sales and associated costs within our consolidated financial statements. The total sales associated with these transactions were $98.1 million, $97.4 million and $109.4 million for the years ended 2016, 2015 and 2014, respectively.

Our recorded investment in WAVE was higher than our 50% share of the carrying values reported in WAVE’s consolidated financial statements by $166.6 million as of December 31, 2016 and $172.1 million as of December 31, 2015. These differences are due to our adoption of fresh-start reporting upon emergence from Chapter 11 in October 2006, while WAVE’s consolidated financial statements do not reflect fresh-start reporting. The differences are composed of the following fair value adjustments to assets:

	December 31, 2016		December 31, 2015
Property, plant and equipment	$	0.4	$	0.4
Other intangibles		135.8		141.3
Goodwill		30.4		30.4
Total	$	166.6	$	172.1

Other intangibles include customer relationships, trademarks and developed technology. Customer relationships are amortized over 20 years and developed technology is amortized over 15 years. Trademarks have an indefinite life.

See Exhibit 99.1 for WAVE’s consolidated financial statements. Condensed financial data for WAVE is summarized below:

	December 31, 2016		December 31, 2015
Current assets	$	113.1	$	118.7
Noncurrent assets		50.3		52.1
Current liabilities		40.7		23.3
Other noncurrent liabilities		244.6		248.9

	2016		2015		2014
Net sales	$	393.7	$	374.4	$	392.5
Gross profit		208.7		187.4		185.1
Net earnings		158.9		144.4		142.2

See discussion in Note 26 to the Consolidated Financial Statements for additional information on this related party.