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SEC Filings
10-K
TERRAFORM POWER, INC. filed this Form 10-K on 07/21/2017
Entire Document
 

As of December 31, 2016 and 2015, notional amounts for derivative instruments consisted of the following:
 
 
Notional Amount as of
(In thousands)
 
December 31, 2016
 
December 31, 2015
Derivatives designated as hedges:
 
 
 
 
Interest rate swaps (USD)
 
433,874

 
468,067

Interest rate swaps (CAD)
 
84,713

 

Interest rate swaps (GBP)
 

 
222,018

Commodity contracts (MWhs)
 
16,988

 
18,401

Derivatives not designated as hedges:
 
 
 
 
Interest rate swaps (USD)
 
14,681

 
15,794

Interest rate swaps (GBP)
 
222,018

 

Foreign currency contracts (GBP)
 

 
112,168

Foreign currency contracts (CAD)
 
25,075

 
40,566

Commodity contracts (MWhs)
 
1,407

 
1,828


The Company has elected to present net derivative assets and liabilities on the balance sheet as a right to setoff exists. For interest rate swaps, the Company either nets derivative assets and liabilities on a trade-by-trade basis or nets them in accordance with a master netting arrangement if such an arrangement exists with the counterparties. Foreign currency contracts are netted by currency in accordance with a master netting arrangement. The Company has a master netting arrangement for its commodity contracts for which no amounts were netted as of December 31, 2016 as each of the commodity contracts were in a gain position.

Gains and losses on derivatives not designated as hedges for the years ended December 31, 2016, 2015 and 2014 consisted of the following:
 
 
Location of Loss (Gain) in the Statements of Operations
 
Year Ended December 31,
(In thousands)
2016
 
2015
 
2014
Interest rate swaps
 
Interest expense, net
 
$
26,280

 
$
345

 
$
1,279

Foreign currency contracts
 
Loss on foreign currency exchange, net
 
(1,325
)
 
(3,600
)
 
(1,126
)
Commodity contracts
 
Operating revenues, net
 
(10,890
)
 
(10,178
)
 


During the second quarter of 2016, the Company discontinued hedge accounting for interest rate swaps that were previously designated as cash flow hedges of the forecasted interest payments pertaining to variable rate project debt in the U.K. Portfolio. The forecasted transactions were deemed probable of not occurring beyond June of 2017 as a result of an evaluation of the offers received related to the planned sale of the U.K. Portfolio during the second quarter. The sale would either cause a repayment of the debt or the assumption of the debt by the buyer. This resulted in the reclassification of $16.9 million of losses from accumulated other comprehensive income into interest expense, net in the consolidated statement of operations during the year ended December 31, 2016. The Company also prospectively discontinued hedge accounting for these interest rate swaps that were designated as cash flow hedges of the forecasted interest payments through June of 2017 as the forecasted transactions were deemed no longer probable of occurring. Subsequent to the discontinuation of hedge accounting, the Company recognized additional net unrealized losses of $7.3 million pertaining to these interest rate swaps during the year ended December 31, 2016 that are also reported in interest expense, net in the consolidated statement of operations.











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