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

General and Administrative

General and administrative expenses for the years ended December 31, 2016 and 2015 were as follows:
 
 
Year Ended December 31,
 
 
(In thousands)
 
2016
 
2015
 
Change
General and administrative:
 
 
 
 
 
 
Project-level
 
$
17,740

 
$
19,583

 
$
(1,843
)
Corporate
 
72,255

 
36,228

 
36,027

General and administrative - affiliate:
 
 
 
 
 
 
Corporate
 
14,666

 
55,330

 
(40,664
)
Total general and administrative
 
$
104,661


$
111,141

 
$
(6,480
)

General and administrative expense increased by $34.2 million compared to the year ended December 31, 2016, and general and administrative - affiliate expense decreased by $40.7 million compared to the year ended December 31, 2015 due to:
(In thousands)
 
General and administrative
 
General and administrative - affiliate
Higher corporate costs due to professional fees for legal and accounting services as a result of the SunEdison Bankruptcy
 
$
22,770

 
$

Banker and advisory marketing services for the Merger
 
8,402

 

Higher corporate costs for employee retention and annual incentive awards
 
3,012

 

Decrease in the management and administrative services provided by SunEdison subsequent to the Bankruptcy
 

 
(40,664
)
Total change
 
$
34,184

 
$
(40,664
)

Pursuant to the management services agreement ("MSA"), SunEdison agreed to provide or arrange for other service providers to provide management and administrative services including legal, accounting, tax, treasury, project finance, information technology, insurance, employee benefit costs, communications, human resources and procurement to the Company. Subsequent to the SunEdison Bankruptcy, SunEdison continued to provide some management and administrative services to the Company, including employee compensation and benefit costs, human resources, information technology and communications, but stopped providing (or reimbursing the Company for) other services pursuant to the MSA. The MSA will be rejected as part of the Settlement Agreement entered into with SunEdison, and the Company will be deemed to have no liability, damages or claims arising out of the rejection of the MSA.

Pursuant to the TerraForm Power, Inc. 2014 Second Amended and Restated Long-Term Incentive Plan and individual employee incentive grant agreements, if the Company's strategic initiatives result in a change in control, or if the SunEdison Bankruptcy results in a liquidation event for SunEdison, all outstanding equity awards will vest, which would result in a significant charge for stock-based compensation expense in such period. As of December 31, 2016, the Company had $15.2 million of unrecognized compensation expense related to outstanding equity awards.

Acquisition and Related Costs

Acquisition and related costs, including amounts related to affiliates, were $2.7 million during the year ended December 31, 2016, compared to $55.8 million during the same period in 2015. The decrease compared to 2015 is primarily due to the acquisition of wind power plants from First Wind Holdings, LLC, which was completed in the first quarter of 2015, the acquisition of Invenergy Wind power plants, which was completed in the fourth quarter of 2015, and the failed acquisition of the Vivint Operating Assets. These fees primarily consist of investment banker advisory fees and professional fees for legal and accounting services related to our acquisitions.

Goodwill impairment

The Company performed its annual impairment test of the carrying value of its goodwill as of December 1, 2016 and concluded that the goodwill balance of $55.9 million was fully impaired. The impairment was driven by a combination of


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