Redeemable Noncontrolling Interest

12 Months Ended

Dec. 31, 2017

Note 21. Redeemable Noncontrolling Interest

On November 3, 2017, we acquired the controlling interest (54.5% of the common stock) in Esja, a private corporation in Reykjavik, Iceland, which is developing and will operate a new FlyOver Iceland attraction.

The Esja acquisition contains a put option that gives the minority Esja shareholders the right to sell (or “put”) their Esja shares to us based on a multiple of 5.0x EBITDA as calculated on the trailing 12 months from the most recently completed quarter before the put option exercise. The put option is only exercisable after 36 months of business operation (the “Reference Date”) and if the FlyOver Iceland attraction has earned a minimum of €3.25 million in unadjusted EBITDA during the most recent fiscal year and during the trailing 12-month period prior to exercise (the “Put Option Condition”). The put option is exercisable during a period of 12 months following the Reference Date (the “Option Period”) and if the Put Option Condition has been met. If the Put Option Condition has not been met during the first Option Period, the Reference Date will be extended for an additional 12 months up to three times. If after 72 months, the FlyOver Iceland attraction has not achieved the Put Option Condition, the put option expires. If the Put Option Condition is met during any of the Option Periods, yet the shares are not exercised prior to the end of the 12-month Option Period, the put option will expire.

The noncontrolling interests’ carrying value is determined by the fair market value at acquisition and the subsequent noncontrolling interests’ share of net income or loss. This value is benchmarked against the redemption value of the sellers’ put option. The carrying value is adjusted to the latter, provided that it does not fall below the initial carrying values, as determined by the purchase price allocation. We have made a policy election to reflect any changes caused by such an adjustment in retained earnings, rather than in current earnings.

Changes in redeemable noncontrolling interests are as follows:

(in thousands)
Balance at December 31, 2016	$	—
Redeemable noncontrolling interest related to 2017 acquisition		6,735
Adjustment to the redemption value		(30	)
Foreign currency translation adjustment		(57	)
Balance at December 31, 2017	$	6,648