Note 15 - Redeemable Non-controlling Interest

12 Months Ended

Dec. 03, 2016

Notes to Financial Statements

Noncontrolling Interest Disclosure [Text Block]

Note

15:

Redeemable Non-Controlling Interest

We account for the non-controlling interest in H.B. Fuller Kimya Sanayi Ticaret A.S. (“HBF Kimya”) as a redeemable non-controlling interest because both the non-controlling shareholder and H.B. Fuller have an option, exercisable beginning

August

1,

2018,

to require the redemption of the shares owned by the non-controlling shareholder at a price determined by a formula based on

24

months trailing EBITDA. Since the option makes the redemption of the non-controlling ownership shares of HBF Kimya outside of our control, these shares are classified as a redeemable non-controlling interest in temporary equity in the Consolidated Balance Sheets. The non-controlling shareholder is entitled to increase his ownership by

1

percent per year for

5

years up to a maximum of

13

percent ownership based on the achievement of profitability targets in each year. The option is subject to a minimum price of

€3,500.

The redemption value of the option, if it were currently redeemable, is estimated to be

€3,500.

The results of operations for the HBF Kimya’s non-controlling interest are consolidated in our financial statements. Both the non-controlling interest and the accretion adjustment to redemption value are included in net income or loss attributable to non-controlling interests in the Consolidated Statements of Income and in the carrying value of the redeemable non-controlling interest on the Consolidated Balance Sheets. HBF Kimya’s functional currency is the Turkish lira and changes in exchange rates will affect the reported amount of the redeemable non-controlling interest.

The

2015

acquisition of

95

percent of the equity of Tonsan Adhesives, Inc. and the concurrent agreement to acquire the remaining

5

percent in the future, resulted in the assumption of a non-controlling interest for the remaining equity. Based on requirements to redeem this non-controlling interest beginning

February

1,

2019,

the non-controlling interest was immediately recognized as a liability and reclassified to other liabilities. The fair value of the non-controlling interest as of the date of acquisition was

$11,773.

As of

December

3,

2016

and

November

28,

2015

the redeemable non-controlling interests were:

	2016			2015
Balance at beginning of year	$	4,199		$	4,654
Non-controlling interest assumed		-			11,773
Recognition of non-controlling interest redemption liability		-			(11,773	)
Net income attributed to redeemable non-controlling interest		239			320
Foreign currency translation adjustment		(161	)		(775	)
Balance at end of year	$	4,277		$	4,199