Consolidated Businesses

Acquisitions

On November 25, 2015, VelocityEHS acquired certain assets of WellNet Solutions, Inc. ("WellNet") for cash consideration of $0.7 million. Intangible assets of $2.9 million were recorded in connection with the acquisition. During the year ended December 31, 2016, VelocityEHS paid $2.2 million of cash as contingent consideration in connection with the WellNet acquisition.

On January 22, 2016, VelocityEHS acquired certain assets of ErgoAdvocate LLC ("ErgoAdvocate") for $1.25 million of cash consideration, $1.0 million of which was paid at the closing of the transaction, and $0.25 million of which was paid on the one-year anniversary of the closing. The acquisition was accounted for under the acquisition method. VelocityEHS has allocated the purchase price to the acquired identifiable intangible assets and goodwill based upon their respective fair values as of the date of acquisition.

On September 16, 2016, VelocityEHS acquired certain assets of E3 Solutions Inc. ("E3 Solutions") for $3.0 million of cash consideration, $2.7 million of which was paid at the closing of the transaction, and $0.3 million of which will be paid in equal installments on the 12-month and 18-month anniversaries of the closing. The acquisition was accounted for under the acquisition method. VelocityEHS has allocated the purchase price to the acquired identifiable intangible assets and goodwill based upon their respective fair values as of the date of acquisition.

On October 31, 2016, FolioDynamix acquired certain assets of SAS Capital Management, LLC ("SAS") for initial consideration, net of working capital, of approximately $2.9 million, and aggregate payments of approximately $1.0 million payable over the 15-month period following the closing. The SAS acquisition is also subject to an earnout based on the achievement of specified revenue targets, which was valued at $8.4 million at the date of acquisition. The maximum consideration payable related to the SAS acquisition, including the $3.9 million of fixed consideration, is $25.0 million. The acquisition was accounted for under the acquisition method. FolioDynamix has preliminarily allocated the purchase price to identifiable tangible and intangible assets, goodwill and deferred revenue.

The allocations of the respective ErgoAdvocate, WellNet, E3 Solutions and SAS purchase prices to identified intangible assets and tangible assets and liabilities were as follows:



(in thousands)	ErgoAdvocate		WellNet		E3 Solutions		SAS
Goodwill	$	155	$	—	$	1,074	$	10,099
Customer lists (5-11 year life)	26		2,897		28		2,271
Trademarks, trade names and domain names (5-11 year life)	—		—		6		—
Technology (7-9 year life)	1,069		—		1,822		356
Non-compete agreement (5 year life)	—		—		70		240
Deferred revenue	—		—		—		(320		)
Other net assets (liabilities)	—		—		—		(397		)
Total net assets acquired	$	1,250	$	2,897	$	3,000	$	12,249

Redeemable Noncontrolling Interests

In connection with GovDelivery's acquisitions of NuCivic, Inc. ("NuCivic") and Textizen, Inc. ("Textizen"), certain GovDelivery stockholders had the ability to require GovDelivery to redeem a portion of their shares in 2017, 2018, 2019 and 2020 based on a fair value determination. In connection with the GovDelivery Sale, the vesting of the redeemable shares related to the NuCivic and Textizen acquisitions was accelerated, and the shares were cashed out for a portion of the sale consideration.

Certain VelocityEHS stockholders have the ability to require VelocityEHS to redeem a portion of their shares in 2017 based on a mutually agreed upon fair value determination. Certain FolioDynamix shareholders have the ability to require FolioDynamix to redeem a portion of their shares in 2018, 2019 and/or 2020 based on a mutually agreed upon fair value determination. Because any such redemptions would be outside the control of the respective businesses, Actua has classified the noncontrolling interests outside of equity and will accrete to the estimated redemption values with an offset to additional paid-in capital. The noncontrolling interests are classified as "Redeemable noncontrolling interests" in Actua’s Consolidated Balance Sheets.

As discussed in Note 2, "Significant Accounting Policies," during 2015 Actua corrected an immaterial error and revised previously reported amounts due to a change from recognizing noncontrolling interests related to FolioDynamix as a component of permanent equity to recognizing those interests as a component of temporary equity in redeemable noncontrolling interests.

The following is a reconciliation of the activity related to Actua’s redeemable noncontrolling interests during the years ended December 31, 2016, 2015 and 2014:



(in thousands)
Balance at December 31, 2013	$	3,442
Redeemable noncontrolling interest portion of subsidiary net income	72
Accretion to estimated redemption value	6,832
Balance at December 31, 2014	$	10,346
Redeemable noncontrolling interest portion of subsidiary net loss	(393		)
FolioDynamix impairment charge ⁽¹⁾	(812		)
Accretion to estimated redemption value	4,704
Equity transfer among owners ⁽²⁾	(3,339		)
Balance at December 31, 2015	$	10,506
Redeemable noncontrolling interest portion of subsidiary net loss	(778		)
Reduction to redeemable noncontrolling interests due to GovDelivery Sale	(4,338		)
Accretion to estimated redemption value	4,937
Equity transfer among owners ⁽³⁾	(4,469		)
Balance at December 31, 2016	$	5,858

____________________________


⁽¹⁾	This amount pertains to the FolioDynamix goodwill impairment charge discussed in Note 3, "Goodwill and Intangible Assets" attributed to redeemable noncontrolling interests which is reflected in the "Net income (loss) attributable to the noncontrolling interests" line of Actua's Consolidated Statement of Operations and Comprehensive Income (Loss).

⁽²⁾

This amount primarily relates to accretion value adjustments of $0.7 million that partially offset cash payments made during the year ended December 31, 2015 of $4.0 million to acquire $1.9 million of redeemable noncontrolling interests associated with GovDelivery and $1.4 million of redeemable noncontrolling interests associated with VelocityEHS. These transactions increased Actua’s ownership in GovDelivery from 91% to 93% and its ownership in VelocityEHS from 96% to 98%.

⁽³⁾

This amount primarily relates to accretion value adjustments of $1.0 million that partially offset cash payments made during the year ended December 31, 2016 of $5.4 million to acquire $2.5 million of redeemable noncontrolling interests associated with GovDelivery, $2.4 million of redeemable noncontrolling interests associated with VelocityEHS and $0.5 million of redeemable noncontrolling interests associated with FolioDynamix. These transactions increased Actua’s ownership in GovDelivery from 92% to 94% and its ownership in VelocityEHS from 98% to 99%. Its ownership in FolioDynamix did not significantly change as a result of this repurchase.

Other Consolidated Businesses Transactions

From time to time, Actua acquires additional equity ownership interests in its consolidated businesses. Purchasing equity ownership interests from a consolidated business’s existing shareholders results in an increase in Actua’s controlling interest in that business and a corresponding decrease in the noncontrolling interests ownership. Those transactions are accounted for as decreases to "Noncontrolling interests" and increases to "Additional paid-in capital" in Actua’s Consolidated Balance Sheets for the relevant periods. Actua may also acquire additional equity ownership interests in its consolidated businesses, either from existing holders or as a result of share issuances by one or more of those businesses, and Actua’s equity ownership interests may be diluted by any such share issuances to other parties. An issuance of equity securities by a consolidated business that results in a decrease in Actua’s equity ownership interests is accounted for in accordance with the policy for "Principles of Accounting for Ownership Interests" described in Note 2, "Significant Accounting Policies." Other changes to Actua’s equity ownership interests in its consolidated businesses, as well as equity-based compensation award activity at those businesses, also result in adjustments to "Additional paid-in capital" and "Noncontrolling interests" in Actua’s Consolidated Balance Sheets. The impact of any equity-related transactions at Actua’s consolidated businesses is included in the line item "Impact of subsidiary equity transactions" in Actua’s Consolidated Statements of Changes in Equity. The impact of these changes to the noncontrolling interests are also included in the line item "Impact of subsidiary equity transactions" in Actua’s Consolidated Statements of Changes in Equity for the relevant period. During the year ended December 31, 2016, the "Impact of subsidiary equity transactions" line item as shown on Actua’s Consolidated Statements of Changes in Equity was $4.9 million, which was comprised of (1) $5.4 million paid by Actua in order to repurchase shares in its consolidated businesses and (2) $(0.5) million relating to Actua’s share of its consolidated businesses' equity transactions.

Pro Forma Information (Unaudited)

The information in the following table represents the revenue, net loss attributable to Actua and the net loss per diluted share attributable to Actua for the relevant periods had it owned ErgoAdvocate, WellNet, E3 Solutions and SAS in each of those periods.



(in thousands, except per share data)	Year Ended December 31,
	2016			2015
Revenue	$	113,426		$	102,726
Net income (loss) from continuing operations attributable to Actua Corporation	$	(23,244	)	$	(88,696	)
Net income (loss) from continuing operations per diluted share attributable to Actua Corporation	$	(0.63	)	$	(2.39	)

The information in the following table represents the revenue, net income (loss) from continuing operations attributable to Actua Corporation and the net income (loss) from continuing operations per diluted share attributable to Actua Corporation for the relevant periods had VelocityEHS owned Wellnet in each of those periods.



(in thousands, except per share data)	Year Ended December 31,
	2015			2014
Revenue	$	98,645		$	57,309
Net income (loss) from continuing operations attributable to Actua Corporation	$	(87,773	)	$	(32,434	)
Net income (loss) from continuing operations per diluted share attributable to Actua Corporation	$	(2.37	)	$	(0.87	)