Annual report pursuant to Section 13 and 15(d)

Investments in Affiliated Companies

v3.22.4
Investments in Affiliated Companies
 12 Months Ended
Dec. 31, 2022
Equity Method Investments and Joint Ventures [Abstract]  
Investments in Affiliated Companies
12. Investments in Affiliated Companies:
The Company accounts for investments in affiliated companies under the equity method. Affiliated companies accounted for on the equity basis as of December 31, 2022 are as follows:
Company  Country  Percent
Ownership 
Zeolyst International USA 50%
Zeolyst C.V. Netherlands 50%
Following is summarized information of the combined investments(1):
  December 31,
  2022 2021
Current assets $ 278,330  $ 245,859 
Noncurrent assets 196,775  223,982 
Current liabilities 47,407  43,337 
Noncurrent liabilities 16,000  7,471 
Years ended
December 31,
2022 2021 2020
Sales $ 306,511  $ 296,416  $ 275,621 
Gross profit 105,693  101,069  88,616 
Operating income 67,169  66,978  53,500 
Net income 68,255  68,433  55,328 
(1)    Summarized information of the combined investments is presented at 100%; the Company’s share of the net assets and net income of affiliates is calculated based on the percent ownership specified in the table above.
The Company’s investments in affiliated companies balance as of December 31, 2022 and 2021 includes net purchase accounting fair value adjustments of $231,017 and $237,419, respectively, related to a prior business combination, consisting primarily of goodwill and intangible assets such as customer relationships, technical know-how and trade names. Consolidated equity in net income from affiliates is net of $6,403, $6,480 and $6,634 of amortization expense related to purchase accounting fair value adjustments for the years ended December 31, 2022, 2021 and 2020, respectively.
The following table summarizes the activity related to the Company’s investments in affiliated companies balance on the consolidated balance sheets:
Years ended
December 31,
2022 2021
Balance at beginning of period $ 446,074  $ 458,128 
Equity in net income of affiliated companies 34,128  34,216 
Charges related to purchase accounting fair value adjustments (6,402) (6,480)
Dividends received (35,000) (35,000)
Foreign currency translation adjustments (2,787) (4,790)
Balance at end of period $ 436,013  $ 446,074 
The Company had net receivables due from affiliates of $3,539 and $6,739 as of December 31, 2022 and 2021, respectively, which are included in prepaid and other current assets. Net receivables due from affiliates are generally non-trade receivables. Sales to affiliates were $5,915, $3,643 and $7,042 for the years ended December 31, 2022, 2021 and 2020, respectively. The Company did not purchase goods from affiliates during the years ended December 31, 2022, 2021 and 2020.
On December 18, 2013, the Company and its joint venture, Zeolyst International, entered into a ten year real estate tax abatement agreement with the Unified Government of Wyandotte County, Kansas. The agreement utilizes an Industrial Revenue Bond (“IRB”) financing structure to achieve a 75% real estate tax abatement on the value of the improvements that were constructed during the expansion of the Company and Zeolyst International’s facilities at the jointly-operated Kansas City, Kansas plant. A similar tax abatement agreement has been executed on an annual basis since December 18, 2013 with respect to additional plant expansions during those years.
During the year ended December 31, 2019, the original IRB financing structure from December 2013 was exhausted. In order to fund future plant expansions, the Company entered into an additional IRB financing structure on December 19, 2019 with similar terms and conditions, which also provides for 75% real estate tax abatement on the value of future improvements. The financing obligations and the industrial bonds receivable have been presented net, as the financing obligations and the industrial bonds meet the criteria for right of set off conditions under GAAP.