Consolidated Businesses

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.

The following is a reconciliation of the activity related to Actua’s redeemable noncontrolling interests during the nine months ended September 30, 2017 and 2016:



(in thousands)
Balance at December 31, 2015	$	10,506
Redeemable noncontrolling interests portion of subsidiary net income (loss)	(257		)
Accretion adjustments to estimated redemption value	4,360
Equity transfer among owners ⁽¹⁾	(5,247		)
Balance at September 30, 2016	$	9,362



Balance at December 31, 2016	$	5,858
Redeemable noncontrolling interests portion of subsidiary net income (loss)	186
Accretion adjustments to estimated redemption value	(83		)
Balance at September 30, 2017	$	5,961

____________________________

⁽¹⁾

This amount primarily relates to cash payments made during the three months ended March 31, 2016 of $5.4 million to acquire (a) $2.5 million of redeemable noncontrolling interests associated with GovDelivery, (b) $2.4 million of redeemable noncontrolling interests associated with VelocityEHS and (c) $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%. Actua's ownership in FolioDynamix did not significantly change from the 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 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 the line items "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. During the nine months ended September 30, 2016, the line item "Impact of subsidiary equity transactions" in Actua’s Consolidated Statements of Changes in Equity was $4.3 million, which was comprised of $5.4 million paid by Actua in order to repurchase shares in its consolidated businesses offset by $1.1 million relating to Actua’s share of its consolidated businesses' equity transactions. Actua did not repurchase any shares of its consolidated businesses during the nine months ended September 30, 2017; therefore, the balance of $2.5 million in the line item "Impact of subsidiary equity transactions" in Actua’s Consolidated Statements of Changes in Equity relates entirely to Actua’s share of its consolidated businesses' equity transactions.