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Note 4 - Subsidiaries and Joint Ventures with Noncontrolling Owners' Interests

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Noncontrolling Interest Disclosure [Text Block]

4. Subsidiaries and Joint Ventures with Noncontrolling Owners’ Interests

The Company is obligated to purchase its partners’ interests in

two

50%

owned subsidiaries, due to circumstances outlined in their agreements that are certain to occur. Therefore, the Company has classified these obligations as mandatorily redeemable and has recorded a liability in “Members’ interest subject to mandatory redemption and undistributed earnings” on the consolidated balance sheets. In addition, all undistributed earnings at the time of the noncontrolling owners’ death or permanent disability are also mandatorily payable. The liability consists of the following (amounts in thousands):

		As of December 31,
		2016				2015
Members’ interest subject to mandatory redemption		$	40,000			$	40,000
Net accumulated earnings			5,230				10,438
Total liability		$	45,230			$	50,438

Due to an amendment to

one

of these agreements on

November

28,

2015,

$18.8

million was reclassified to the liability account “Members’ interest subject to mandatory redemption and undistributed earnings” and reduced “Additional paid in capital” (“APIC”) on the Company’s consolidated balance sheets. This

$18.8

million represented the portion of the revaluation of noncontrolling interest above the

$7.4

million held as “Noncontrolling interest” in the consolidated balance sheet when the agreement was executed. According to GAAP, this reduction to APIC was treated similarly to a dividend to a preferred shareholder and reduced earnings per share attributable to Sterling common stockholders. Refer to Note

13.

Earnings, subject to distribution by the Company, in these

50%

owned subsidiaries for

2016,

2015

and

2014

were

$8.9

million,

$4.2

million and

$2.1

million, respectively, and were recorded in “Other operating (expense) income, net” on the Company’s consolidated statements of operations. In

2015

and

2014,

Myers’ portion of earnings subject to distribution by the Company was

$0.5

million and

zero,

respectively, as the amendment to the agreement was not entered into until

November

2015.

Before the amendment, Myers’ portion of earnings was included in “Noncontrolling owners’ interests in earnings of subsidiaries and joint ventures.”

Changes in Noncontrolling Interests

The Company also participates in majority-owned joint ventures. For these joint ventures, the equity held by the remaining owners and their portions of net income (loss) are reflected in the balance sheet line item “Noncontrolling interests” in “Equity” and the statement of operations line item “Noncontrolling owners’ interests in earnings of subsidiaries and joint ventures,” respectively. See discussion above regarding the amendment of

one

of the Company’s joint venture agreements in

2015,

which is reflected as the

$7.4

million adjustment in the table below.

The following table summarizes the changes in the noncontrolling owners’ interests in subsidiaries and consolidated joint ventures for the years ended

December

31,

2014

through

2016

(amounts in thousands):

		Years Ended December 31,
		2016				2015				2014
Balance, beginning of period		$	(91	)		$	7,462			$	4,097
Net income attributable to noncontrolling interest included in equity			1,826				3,216				4,556
Change due to amendment			--				(7,367	)			--
Distributions to noncontrolling interests owners			(1,079	)			(3,402	)			(1,191	)
Balance, end of period		$	656			$	(91	)		$	7,462

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- References

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X

- Definition

The entire disclosure for noncontrolling interest in consolidated subsidiaries, which could include the name of the subsidiary, the ownership percentage held by the parent, the ownership percentage held by the noncontrolling owners, the amount of the noncontrolling interest, the location of this amount on the balance sheet (when not reported separately), an explanation of the increase or decrease in the amount of the noncontrolling interest, the noncontrolling interest share of the net Income or Loss of the subsidiary, the location of this amount on the income statement (when not reported separately), the nature of the noncontrolling interest such as background information and terms, the amount of the noncontrolling interest represented by preferred stock, a description of the preferred stock, and the dividend requirements of the preferred stock.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.31)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 50
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=64809438&loc=SL4573702-111684

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