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SEC Filings

10-K
TERRAFORM GLOBAL, INC. filed this Form 10-K on 06/15/2017
Entire Document
 

(In thousands, except weighted average amortization period)
 
Remaining Weighted Average Amortization Period (Years)
 
Gross Carrying Amount
 
Accumulated Amortization
 
Accumulated Currency Translation Adjustment
 
Net Book Value
In-place value of market rate revenue contracts
 
18
 
$
93,943

 
$
(5,932
)
 
$
(5,561
)
 
$
82,450

The following table presents the gross carrying amount and accumulated amortization of intangible assets as of December 31, 2015:
(In thousands, except weighted average amortization period)
 
Remaining Weighted Average Amortization Period (Years)
 
Gross Carrying Amount
 
Accumulated Amortization
 
Accumulated Currency Translation Adjustment
 
Net Book Value
In-place value of market rate revenue contracts
 
20
 
$
84,643

 
$
(1,632
)
 
$
(12,381
)
 
$
70,630

As of December 31, 2016, the Company had revenue contracts in the form of PPAs that were obtained through acquisitions (see Note 4 - Acquisitions). PPAs are amortized on a straight line basis over the useful life of the agreements, which range from 20 to 25 years as of December 31, 2016. Amortization expense related to revenue contracts is recognized in the consolidated statements of operations as either a reduction or increase of revenue when the contract rate is above or below market rates (favorable or unfavorable) or within depreciation, accretion and amortization expense when the contract rate is equal to market rates (in-place). As such, of the $4.3 million amortization expense recorded as of the December 31, 2016, $1.4 million was recorded as a reduction of revenue while the remaining $2.9 million of amortization expense was recorded within the depreciation, accretion, and amortization line item in the consolidated statement of operations.
    Over the next five fiscal years, the Company expects to recognize $5.2 million of annual amortization expense each year on its revenue contracts intangible asset.
9. VARIABLE INTEREST ENTITIES
The Company consolidates any variable interest entities (“VIEs”) in power plants in which it is the primary beneficiary. The Company is the primary beneficiary of ten VIEs in entities that were consolidated as of December 31, 2016, each of which existed and was consolidated as of December 31, 2015. The VIEs own and operate power plants in order to generate contracted cash flows.
As disclosed in Note 4 - Acquisitions, the Company acquired the equity interest in the FERSA Projects in October 2015. As of December 31, 2015, the Company was not the primary beneficiary and thus did not consolidate the acquired power plants, but recorded this investment as an equity method investment. Based on the adoption of ASU 2015-02 in 2016, the Company has consolidated the assets and liabilities of the FERSA Projects as of January 1, 2016.
As disclosed in Note 4 - Acquisitions, in February 2016, SunEdison transferred to the Company a 49.0% equity interest, constituting a controlling interest and substantially all of the economic interest, in each of NPS Star and WXA, each of which consists of three solar power plants located in Thailand. These solar power plants represent 35.6 MW of aggregate net capacity.
As disclosed in Note 4 - Acquisitions, in October 2016, SunEdison sold to the Company 11.0% of the equity interests in the Millenium solar power plant in India for cash consideration of approximately $1.0 million. In addition, SunEdison transferred to the Company the balance of 51.0% of the equity interests in the Focal solar power plant in India following the expiration of the equity lock-up period in the applicable PPAs. As a result of the transaction, the Focal solar power plant is no longer considered a VIE as of December 31, 2016.
As disclosed in Note 4 - Acquisitions, in October 2016, the Company also entered into arrangements with SunEdison for the transfer of the balance of the equity interests in the Millenium, Azure, ESP Urja and SE 25 solar power plants in India, in each case following the expiration of the equity lock-up period in the applicable PPAs (ranging from November 2016 to March 2017) and without further action by SunEdison. In accordance with these arrangements, in November and December 2016, the balance of 26.0% of the equity interests in Azure and ESP Urja, respectively, was transferred to the Company. As a result of the transfer of equity interest in Azure and ESP Urja, these power plants are no longer considered VIEs as of December 31, 2016.


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