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SEC Filings

10-Q
TERRAFORM GLOBAL, INC. filed this Form 10-Q on 11/08/2017
Entire Document
 

power plant pays a fixed rate and the counterparty to the agreement pays a variable interest rate. No amounts deferred in other comprehensive income were reclassified into earnings during the three and nine months ended September 30, 2017 and 2016
Cross Currency Swaps
The Company has entered into cross currency swap agreements to hedge its exposure to foreign currency fluctuations on debt denominated in U.S. dollars. These cross currency rate swaps qualify for hedge accounting and were designated as cash flow hedges. The amounts deferred in other comprehensive income and reclassified into loss were $25.8 million and $4.6 million during the three months ended September 30, 2017 and 2016, respectively, and $17.3 million and $36.2 million during the nine months ended September 30, 2017 and 2016, respectively. There was no ineffectiveness recorded for the periods presented.
Derivatives Not Designated as Hedges
Interest Rate Swaps
The Company has entered into interest rate swap agreements that economically hedge the cash flows for project level debt. These interest rate swaps pay a fixed rate and the counterparties to the agreements pay a variable interest rate. The changes in fair value are recorded in interest expense, net in the unaudited condensed consolidated statements of operations as these hedges are not accounted for under hedge accounting.
Foreign Currency Contracts
The Company transacts business in various foreign currencies and has established a program that primarily utilizes foreign currency contracts to offset the risks associated with the effects of certain foreign currency exposures. The Company does not use these foreign currency contracts for trading purposes nor does it designate these forward contracts as hedging instruments pursuant to ASC 815. As of September 30, 2017, the notional amounts of the foreign currency contracts the Company held to purchase U.S. dollars in exchange for other major international currencies were $96.9 million. Included in the Company’s non-operating expense was $25.8 million of expense and $(17.3) million of net income related to these foreign currency contracts for the three and nine months ended September 30, 2017, respectively, which was a result of devaluation as compared to the U.S. dollar in the Brazilian real (BRL), Chinese yuan renminbi (CNY), Indian rupee (INR), Malaysian ringgit (MYR), South African rand (ZAR) and Thai baht (THB). The fair value of the Company’s outstanding foreign currency forward contracts was a net liability of $16.6 million as of September 30, 2017. The cash flow related to foreign currency contracts that remain outstanding is classified as operating activities. The cash flow associated with foreign currency contract settlements is classified as investing activities. The net loss relating to investments was partially offset by the lower cost related to the cash flows related to the acquisitions and debt extinguishments that were hedged.
Notional Amounts
(In thousands)
Notional Amounts as of September 30, 2017
Derivatives designated as hedges:
 
   Interest rate swaps (USD)
$
128,377

   Cross currency swaps (USD)
$
347,297

Derivatives not designated as hedges:
 
   Interest rate swaps (USD)
123,383

   Currency forward contracts (BRL)
30,913

   Currency forward contracts (CNY)
15,001

   Currency forward contracts (INR)
29,857

   Currency forward contracts (MYR)
2,905

   Currency forward contracts (THB)
4,369

   Currency forward contracts (ZAR)
13,899



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