SEC Filings

10-Q

TERRAFORM GLOBAL, INC. filed this Form 10-Q on 08/09/2017

unfavorable) or within depreciation, accretion and amortization expense when the contract rate is equal to market rates (in-place).

As such, the amortization expense for the three and six months ended June 30, 2017 was $1.2 million and $2.4 million, respectively. For the three and six months ended June 30, 2017, $0.4 million and $0.8 million, respectively, was recorded as a reduction of revenue while the remaining $0.8 million and $1.6 million, respectively, was recorded within the depreciation, accretion, and amortization line item in the unaudited condensed consolidated statement of operations.

During the three months ended June 30, 2017, the Company capitalized $0.7 million of internally developed software. As of June 30, 2017, the software was not ready for its intended use, and as such, there was no amortization charged.

6. 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 nine VIEs in entities that were consolidated as of June 30, 2017, each of which existed and was consolidated as of December 31, 2016. The VIEs own and operate power plants in order to generate contracted cash flows.

As disclosed in Note 2 - Acquisitions, in October 2016, the Company entered into arrangements with SunEdison for the transfer of the balance of the equity interests in the Millenium and SE 25 solar power plants in India, in each case following the expiration of the equity lock-up period in the applicable PPAs in January and March 2017, respectively, and without further action by SunEdison. In accordance with these arrangements, in January 2017, the balance of 26.0% of the equity interests in Millenium was transferred to the Company. In March 2017, 100.0% of the equity interests in SE 25 were transferred to the Company. As a result of the transfer of equity interest in Millenium and SE 25, these power plants are no longer considered VIEs as of June 30, 2017.

The carrying amounts and classification of the consolidated VIEs’ assets and liabilities included in the Company’s unaudited condensed consolidated balance sheets are as follows:



(In thousands)	As of June 30, 2017		As of December 31, 2016
Current assets	$	177,766	$	186,739
Non-current assets	379,796		423,315
Total assets	$	557,562	$	610,054
Current liabilities	$	390,603	$	386,297
Non-current liabilities	110,814		162,793
Total liabilities	$	501,417	$	549,090

The amounts shown in the table above exclude intercompany balances which are eliminated upon consolidation. All of the assets in the table above are restricted for settlement of the VIE obligations, and all of the liabilities in the table above can only be settled by using VIE resources.