Partially-Owned Affiliates

6 Months Ended

Jun. 30, 2014

Partially-Owned Affiliates [Abstract]

Partially-Owned Affiliates

(6) Partially-Owned Affiliates

On May 23, 2014, the Company negotiated an accelerated purchase of Zenara, which was contractually required to be completed in 2016 at a price determined by the financial performance of the business.  The purchase price negotiated for the remaining 49% was $2,680.  Management believed it was economically beneficial to take control of this business at this time to accelerate the execution of the Company’s strategy for this business. The Company incurred acquisition related costs of $310 and $451 for the three and six months ended June 30, 2014, respectively.

The Company was required to perform a fair market value assessment immediately before acquisition of its existing 51% ownership interest.  This resulted in the recognition of a gain of $278 using a discounted cash flow model with inputs developed by Company management.  The Company also recorded an expense of $4,400 representing the release of foreign currency translation adjustments previously recorded in “other comprehensive income” that are now required to be recorded to the income statement as a result of the removal of the investment in partially-owned affiliate due to the full consolidation of Zenara as of the acquisition date.  The net amount of these items totaled a loss of $4,122 and is recorded in “Equity in losses of partially-owned affiliates” on the Company’s income statement for the three and six months ended June 30, 2014.  The Company advanced $1,282 to Zenara through the purchase date of the remaining 49%.

The Company recorded a loss of $112 and $458 for the three and six months ended June 30, 2014, respectively, related to Zenara and reflects activity through the date the remaining 49% was purchased.  These amounts include amortization expense of $125 and $333, for the three and six months ended June 30, 2014, respectively. The Company recorded a loss of $537 and $975 for the three and six months ended June 30, 2013, respectively.  These amounts include amortization expense of $230 and $468, for the three and six months ended June 30, 2013, respectively.

Zenara’s results from the purchase date through June 30, 2014 are reflected in the consolidated financial statements of the Company and were not material.

Prior to May 23, 2014, partially-owned affiliates consisted primarily of the Company’s 51% equity interest in Zenara, and two smaller joint ventures located in Europe and Brazil.  The Company’s financial statements reflect its share of Zenara results through the date the Company purchased the remaining 49% interest at which time Zenara became a wholly-owned subsidiary of the Company and included in the consolidated financial statements.  Investments in and advances to partially-owned affiliates also includes a loss of $38 for the three and six months ended June 30, 2014, related to investments in European and Brazilian joint ventures. The Company recorded a loss of $131 and $174 for the three and six months ended June 30, 2013, respectively, related to its European joint venture.  In the first six months of 2014 and 2013, the Company advanced $122 and $141 to a European joint venture, respectively.