Consolidated 50% Owned Subsidiaries, including Variable Interest Entities ("VIE") (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of Components of Agreement Obligation

The Company has 50% ownership interests in two subsidiaries (“Myers” and “RHB”) that it fully consolidates as a result of its exercise of control over the entities. The earnings attributable to the 50% portions the Company does not own were $9,800, $15,100 and $11,500 for 2019, 2018 and 2017, respectively, and are eliminated within “Other operating expense, net” in the Consolidated Statements of Operations. Any undistributed earnings for partners are included in “Members’ interest subject to mandatory redemption and undistributed earnings” within the Consolidated Balance Sheets and are mandatorily payable at the time of the noncontrolling owners’ death or permanent disability. The Company has purchased two separate $20,000 death and permanent total disability insurance policies to mitigate the Company’s cash draw if such events were to occur.

These two subsidiaries also have individual mandatory redemption provisions which, under circumstances outlined in the partner agreements, are certain to occur and obligate the Company to purchase each partner’s remaining 50% interests for $20,000 ($40,000 in the aggregate). These purchase obligations are also recorded in “Members’ interest subject to mandatory redemption and undistributed earnings” on the Consolidated Balance Sheets.

The liability consists of the following:



	As of December 31,
	2019		2018
Members’ interest subject to mandatory redemption	$	40,000	$	40,000
Net accumulated earnings	9,003		9,343
Total liability	$	49,003	$	49,343

Condensed Income Statement



	Years Ended December 31,
	2019		2018		2017
Revenues	$	205,615	$	193,677	$	181,589
Operating income	$	6,372	$	8,819	$	9,069
Net income attributable to Sterling common stockholders	$	3,196	$	4,415	$	4,531



	Years Ended December 31,
	2019		2018		2017
Revenues	$	158,291	$	115,441	$	93,848
Income before tax	$	20,449	$	8,097	$	7,827
Sterling’s noncontrolling interest:
Revenues	$	76,419	$	55,134	$	44,948
Income before tax	$	8,170	$	4,104	$	3,847

Summary financial information for SEMA is as follows:



	Year Ended December 31, 2019
Revenues	$	6,903
Operating income	$	467
Net income attributable to Sterling common stockholders	$	471