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SEC Filings
10-K
TERRAFORM POWER, INC. filed this Form 10-K on 03/07/2018
Entire Document
 

The acquisition accounting for the Invenergy Wind acquisition was initially completed as of the second quarter of 2016, at which point the provisional fair values became final. However, during the fourth quarter of 2016, management identified immaterial errors in the final opening balance sheet. These opening balance sheet errors, including the income statement impact, were corrected in the fourth quarter of 2016. The income statement impact resulted in an increase to depreciation expense and a net decrease to amortization expense. Management performed an assessment of the balance sheet and income statement impact on its previously issued second and third quarter filings and determined it to be immaterial. The final acquisition-date fair values of assets, liabilities and non-controlling interests pertaining to the Invenergy Wind acquisition as of December 31, 2016, the balance sheet error corrections in the fourth quarter of 2016 and the initial opening balance sheet as of December 31, 2015, were as follows:
 
Invenergy Wind Acquisition-date Fair Values
(In thousands)
As of December 31, 2015
 
Acquisition Accounting Adjustments
 
As of June 30, 2016
 
Q4 2016 Corrections
 
As of December 31, 2016
Renewable energy facilities
$
1,486,746

 
$
(8,858
)
 
$
1,477,888

 
$
45,903

 
$
1,523,791

Accounts receivable
25,811

 

 
25,811

 

 
25,811

Intangible assets
748,300

 

 
748,300

 
(37,000
)
 
711,300

Restricted cash
31,247

 

 
31,247

 

 
31,247

Derivative assets
32,311

 

 
32,311

 

 
32,311

Other assets
12,070

 
8,078

 
20,148

 

 
20,148

Total assets acquired
2,336,485

 
(780
)
 
2,335,705

 
8,903

 
2,344,608

Accounts payable, accrued expenses and other current liabilities
23,195

 

 
23,195

 
3,041

 
26,236

Long-term debt, including current portion
531,221

 

 
531,221

 

 
531,221

Deferred income taxes
242

 

 
242

 

 
242

Asset retirement obligations
47,346

 

 
47,346

 

 
47,346

Other long-term liabilities
6,004

 

 
6,004

 
5,000

 
11,004

Total liabilities assumed
608,008

 

 
608,008

 
8,041

 
616,049

Redeemable non-controlling interest
141,415

 
(780
)
 
140,635

 
(7,138
)
 
133,497

Non-controlling interest
308,000

 

 
308,000

 
8,000

 
316,000

Purchase price, net of cash acquired
$
1,279,062

 
$

 
$
1,279,062

 
$

 
$
1,279,062


The acquired renewable energy facilities' non-financial assets and other long-term liabilities primarily represent estimates of the fair value of acquired PPA and REC contracts based on significant inputs that are not observable in the market and thus represent a Level 3 measurement (as defined in Note 14. Fair Value of Financial Instruments). The estimated fair values were determined based on an income approach. Refer below for additional disclosures related to the acquired intangibles.

The operating revenues and net loss of the facilities acquired in 2015 reflected in the consolidated statement of operations for the year ended December 31, 2015 were $161.1 million and $8.8 million, respectively.

Valuation of Non-controlling Interest

First Wind

The majority of the fair value of the non-controlling interest was determined using a market approach using a quoted price for the instrument. Upon the acquisition of the First Wind assets, the Company purchased a portion of the equity interest from the non-controlling interest holders of one of the joint venture investment funds. The quoted price for the purchase of a portion of the non-controlling interest is the best indicator of fair value and was supported by a discounted cash flow technique. The Company estimated the fair value of the remainder of the non-controlling interest balances using a discounted cash flow approach.



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