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Noncontrolling Interests
 12 Months Ended
Dec. 31, 2015
Noncontrolling Interest [Abstract]  
Noncontrolling Interests
13.
Noncontrolling Interests

We own some of our animal hospitals in partnerships with noncontrolling interest holders. We consolidate our partnerships in our consolidated financial statements because our ownership interest in these partnerships is equal to or greater than 50.1% and we control these entities. We record noncontrolling interest in income of subsidiaries equal to our partners’ percentage ownership of the partnerships’ income. We also record changes in the redemption value of our redeemable noncontrolling interests in net income attributable to noncontrolling interests in our consolidated income statements. Noncontrolling interest in income of subsidiaries was $5.0 million, $5.2 million and $5.4 million in 2015, 2014 and 2013, respectively. In addition, we reflect our noncontrolling partners’ cumulative share in the equity of the respective partnerships as either noncontrolling interests in equity, mandatorily redeemable noncontrolling interests in other liabilities, or redeemable noncontrolling interests in temporary equity (mezzanine) in our consolidated balance sheets.

a.    Mandatorily Redeemable Noncontrolling Interests

The terms of some of our partnership agreements require us to purchase the partner’s equity in the partnership in the event of the partner’s death. We report these redeemable noncontrolling interests at their estimated redemption value, which approximates fair value and classify them as liabilities due to the certainty of the related event. Estimated redemption value is determined using either a contractually stated formula or a discounted cash flow technique, both of which are used as an approximation of fair value. The discounted cash flow inputs used to determine the redemption value are level 3 and include forecasted growth rates, valuation multiples, and the weighted average cost of capital. We recognize changes in the obligation as an interest cost in the consolidated income statement.



















13.
Noncontrolling Interests, continued


The following table provides a summary of mandatorily redeemable noncontrolling interests included in other liabilities in our consolidated balance sheets (in thousands):
 
Income
Statement
Impact
 
Mandatorily Redeemable
Noncontrolling
Interests
Balance as of December 31, 2012
 
 
$
11,047

Noncontrolling interest expense
2,003

 
 
Redemption value change
74

 
2,077

Formation of noncontrolling interests
 
 
80

Purchase of noncontrolling interests
 
 
(1,703
)
Dissolution of noncontrolling interests
 
 
(357
)
Distribution to noncontrolling interests
 
 
(1,833
)
Currency translation adjustment
 
 
44

Balance as of December 31, 2013
 
 
$
9,355

 
 
 
 
Noncontrolling interest expense
$
1,625

 
 
Redemption value change
312

 
1,937

Distribution to noncontrolling interests
 
 
(1,418
)
Currency translation adjustment
 
 
(469
)
Balance as of December 31, 2014
 
 
$
9,405

 
 
 
 
Noncontrolling interest expense
$
1,447

 
 
Redemption value change
229

 
1,676

Distribution to noncontrolling interests
 
 
(1,250
)
Purchase of noncontrolling interests
 
 
(803
)
Currency translation adjustment
 
 
(440
)
Balance as of December 31, 2015
 
 
$
8,588

























13.
Noncontrolling Interests, continued

b.    Redeemable Noncontrolling Interests

The following table provides a summary of redeemable noncontrolling interests (in thousands):
 
 
Income
Statement
Impact
 
Redeemable
Noncontrolling
Interests
Balance as of December 31, 2012
 
 
 
$
6,991

Noncontrolling interest
 
$
1,146

 
 
Redemption value change
 
87

 
1,233

Formation of noncontrolling interests
 
 
 
3,601

Distribution to noncontrolling interests
 
 
 
(1,147
)
Balance as of December 31, 2013
 
 
 
10,678

 
 
 
 
 
Noncontrolling interest
 
$
1,226

 
 
Redemption value change
 
(16
)
 
1,210

Formation of noncontrolling interests
 
 
 
855

Purchase of noncontrolling interests
 
 
 
(356
)
Distribution of noncontrolling interests
 
 
 
(1,310
)
Balance as of December 31, 2014
 
 
 
11,077

 
 
 
 
 
Noncontrolling interest
 
$
958

 
 
Redemption value change
 
—

 
958

Formation of noncontrolling interests
 
 
 
2,062

Purchase of noncontrolling interests
 
 
 
(1,007
)
Distribution of noncontrolling interests
 
 
 
(1,579
)
Balance as of December 31, 2015
 
 
 
$
11,511