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Note 10 - Commitments and Contingencies | 3 Months Ended
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Mar. 31, 2024
Notes to Financial Statements |
Commitments and Contingencies Disclosure [Text Block] | NOTE 10—COMMITMENTS AND CONTINGENCIES Redeemable Non-Controlling Interest The Company has controlling interests in its Natural Habitat, Off the Beaten Path, DuVine and Classic Journeys consolidated subsidiaries. The noncontrolling interests are subject to put/call agreements. The put options enable the minority holders, but do not obligate them, to sell the remaining interests to the Company. The Company has call options which enable it, but does not obligate it, to acquire the remaining interests in the subsidiaries, subject to certain dates, expirations and similar redemption value purchase measurements as the put options. See “Subsequent Events” for additional information. Since the redemption of the noncontrolling interests are not solely in the Company’s control, the Company is required to record the redeemable noncontrolling interest outside of stockholders’ equity but after its total liabilities. In addition, if it is probable that the instrument will become redeemable, solely due to the passage of time, the redeemable noncontrollable interest should be adjusted to the redemption value via one of two measurement methods. The Company elected the income classification-excess adjustment and accretion methods for recognizing changes in the redemption value of the put options. Under this methodology, a calculation of the present value of the redemption value is compared to the carrying value of the redeemable noncontrolling interest, and the carrying value of the redeemable noncontrolling interest is adjusted to the redemption value’s present value. Any adjustments to the carrying value of the redeemable noncontrolling interest, up to the redemption value of the noncontrolling interest, are classified to retained earnings. Adjustments in excess of the redemption value of the noncontrolling interest are treated as a decrease to net income available to common stockholders. The redemption value of the put options were determined using a discounted cash flow model. The redemption values were adjusted to their present value using the Company’s weighted average cost of capital. The following is a rollforward of redeemable non-controlling interest:
|  | For the three months ended March 31, |
|  | 2024 |  |  | 2023 |
(In thousands) |  | (unaudited) |
Beginning balance |  | $ | 37,784 |  |  | $ | 27,886 |
Net (loss) income attributable to noncontrolling interest |  |  | (231 | ) |  |  | 157 |
Redemption value adjustment of put option |  |  | (860 | ) |  |  | (2,090 | )
Distribution |  |  | (396 | ) |  |  | (255 | )
Ending balance |  | $ | 36,297 |  |  | $ | 25,698 |
Brand License Agreement – National Geographic The Company is party to a brand license agreement with National Geographic, effective January 1, 2024, which includes a co-selling and co-marketing arrangement through which National Geographic promotes the Company’s offerings in its marketing campaigns across web-based, email, print and other marketing platforms and distributes the Company’s expeditions through the Disney Signature Experiences platform and also allows the Company to use the National Geographic name and logo. In return for these rights, the Company is charged a royalty fee, which is included within selling and marketing expense. The fee is calculated based upon a percentage of substantially all ticket revenues, less travel agent commission, including the revenues received from cancellation fees and any revenues received from the sale of pre- and post-expedition extensions. Beginning in 2026, the agreement has minimum royalties that increase annually through the end of the agreement term, which based on current performance are expected to be exceeded. During 2023, the Company operated under its former alliance and license agreement with National Geographic, where National Geographic sold the Company’s expeditions through its internal travel division in return for a commission fee and also allowed the Company to use the National Geographic name and logo in return for a royalty fee. Both the commission and royalty fees were recorded within selling and marketing expense. Charter Commitments From time to time, the Company enters into agreements to charter vessels onto which it holds its tours and expeditions. Future minimum payments on its charter agreements as of March 31, 2024 are as follows:
For the years ended December 31, |  | Amount |
(In thousands) |  |  |  |
2024 (nine months) |  | $ | 7,592 |
2025 |  |  | 18,618 |
Total |  | $ | 26,210 |

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