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Note 10 - Commitments and Contingencies | 12 Months Ended
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Dec. 31, 2024
Notes to Financial Statements |
Commitments and Contingencies Disclosure [Text Block] | NOTE 10 — COMMITMENTS AND CONTINGENCIES Redeemable Non-Controlling Interest Contingent Arrangements 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 agreements were established to provide formal exit opportunities for the minority interest holders and a path to 100% ownership for the Company. The put options, under certain conditions, 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. Mr. Bressler, founder of Natural Habitat, retains a 9.9% noncontrolling interest in Natural Habitat, which is subject to a put/call arrangement, amended May 2020 and December 2022. Mr. Bressler exercised a first put option in April 2024, that enabled him to sell 9.95% interest in Natural Habitat to the Company, valued as of December 31, 2023, for $15.2 million, increasing the Company’s ownership of Natural Habitat to 90.1%. Mr. Bressler has a second put option that under certain conditions, and subject to providing notice by January 31, 2026, that enables him, but does not obligate him, to sell his remaining interest in Natural Habitat to the Company, valued as of December 31, 2025. The Company has a call option, but not an obligation, with an expiration of March 31, 2029, under which it can acquire Mr. Bressler’s remaining interest at a similar fair value measure as Mr. Bressler’s put option, subject to a call purchase price minimum. Mr. Lawrence, President of Off the Beaten Path, through a combination of his original minority interest and the profit interest units he received, retains a 19.9% noncontrolling interest in Off the Beaten Path, which is subject to a put/call arrangement. Mr. Lawrence has a put option, that under certain conditions and subject to providing notice by October 31, 2025, that enables him, but does not obligate him, to sell his remaining interest in Off the Beaten Path to the Company, valued as of December 31, 2025. The Company has a call option, but not an obligation, on or after October 31, 2025, with an expiration of December 31, 2030, under which it can acquire Mr. Lawrence’s remaining interest at a similar fair value measure as Mr. Lawrence’s put option. Mr. Levine, founder of DuVine, retains a 25% noncontrolling interest in DuVine, which is subject to a put/call arrangement. During April 2024, the Company exercised a portion of its call option on DuVine, acquiring an additional 5% of the business and increasing its total ownership of DuVine to 75%, for $1.5 million. Mr. Levine has a put option, that under certain conditions and subject to providing notice by January 31, 2026, that enables him, but does not obligate him, to sell his remaining interest in DuVine to the Company, valued as of December 31, 2025. The Company has a first call option, expiring December 31, 2025, to acquire an additional 10% of DuVine from Mr. Levine, and a second call option, but not an obligation, on or after December 31, 2025, with an expiration of December 31, 2030, under which it can acquire Mr. Levine’s remaining interest at a similar fair value measure as Mr. Levine’s put option, subject to a call purchase price minimum. Mr. and Mrs. Piegza, founders of Classic Journeys, retain a 19.9% noncontrolling interest in Classic Journeys, which is subject to a put/call arrangement. Mr. and Mrs. Piegza have a put option that under certain conditions, and subject to providing notice by November 13, 2026, that enables them, but does not obligate them, to sell their remaining interest in Classic Journeys to the Company, valued as of the fiscal quarter prior to the put notice. The Company has a call option, but not an obligation, under which it can acquire Mr. and Mrs. Piegza’s remaining interest at a similar fair value measure as Mr. and Mrs. Piegza’s put option. Since the redemption of these noncontrolling interests is 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, as such 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 method 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 fair value of the noncontrolling interest, are classified to retained earnings. Adjustments in excess of the fair value of the noncontrolling interest, are treated as a decrease to net income available to common stockholders. The fair value of the put options was determined using a discounted cash flow model. The redemption values were adjusted to their present values using the Company’s weighted average cost of capital. The following is a rollforward of the redeemable noncontrolling interest:
|  | For the years ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Beginning balance |  | $ | 37,784 |  |  | $ | 27,886 |  |  | $ | 10,626 |
Net income attributable to noncontrolling interest |  |  | 2,984 |  |  |  | 4,734 |  |  |  | 3,221 |
Redemption value adjustment of put option |  |  | 4,853 |  |  |  | 5,695 |  |  |  | 14,039 |
Distribution |  |  | (1,400 | ) |  |  | (531 | ) |  |  | - |
Redemption of put and/or call options |  |  | (14,797 | ) |  |  | - |  |  |  | - |
Ending balance |  | $ | 29,424 |  |  | $ | 37,784 |  |  | $ | 27,886 |
Lease Commitments The Company leases office space, land for safari base camps and equipment under long-term leases, which are classified as operating leases. As of December 31, 2024, the Company’s remaining weighted average operating lease terms were approximately 18.7 years. A reconciliation of operating lease payments undiscounted cash flows to lease liabilities recognized as of December 31, 2024 is as follows:
(In thousands) |  | Operating Lease Payments |
2025 |  | $ | 1,845 |
2026 |  |  | 513 |
2027 |  |  | 409 |
2028 |  |  | 16 |
2029 |  |  | 16 |
Thereafter |  |  | 654 |
Present value discount (8% weighted average) |  |  | (674 | )
Total |  | $ | 2,779 |
Lease expense was $2.6 million, $2.7 million and $2.3 million for the years ended December 31, 2024, 2023 and 2022, respectively. These amounts are recorded within general and administrative expenses. Brand License Agreement – National Geographic The Company is party to a brand license agreement with National Geographic through 2040, 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. In 2023 and 2022, 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, and with third parties to provide chartered air service for guests and crew on certain of its expeditions. Future minimum payments on its charter agreements are as follows:
For the years ended December 31, |  | Amount |
(In thousands) |  |  |  |
2025 |  | $ | 16,692 |
2026 |  |  | 11,567 |
Total |  | $ | 28,259 |
Other Commitments The Company had an agreement for the acquisition of Torcatt Enterprises Limitada, a holding company that operates two vessels in the Galápagos Islands, for $17.0 million. The acquisition closed on January 9, 2025. The Company participates, with other tour operators, in the Consumer Protection Insurance Plan sponsored by the United States Tour Operators Association (“USTOA”). The USTOA requires a $1.0 million performance bond, letter of credit or assigned certificate of deposit from its members to insure this plan. The Company has assigned a $1.0 million letter of credit to the USTOA to satisfy this requirement. This letter of credit will be used only if the Company becomes insolvent and cannot refund its customers’ deposits. Legal Proceedings The Company is involved in various claims, legal actions and regulatory proceedings arising from time to time in the ordinary course of business. In the opinion of management, after consulting legal counsel, there are no outstanding proceedings that are expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows.

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