|TERRAFORM POWER, INC. filed this Form 10-K on 03/07/2018|
The fair value of the non-controlling interest for Invenergy Wind was determined using a discounted cash flow approach. The non-controlling interest represents the fair value of 9.9% sponsor equity held by Invenergy Wind. Sun Edison LLC, a wholly owned subsidiary of SunEdison, acting as intermediary, entered into certain option arrangements with Invenergy Wind for its remaining 9.9% interest in the acquired companies (the ‘‘Invenergy Wind Interest’’). Simultaneously, Terra LLC entered into a back to back option agreement with Sun Edison LLC on substantially identical terms (collectively, the “Option Agreements”). The Option Agreements effectively permitted (i) Terra LLC to exercise a call option to purchase the Invenergy Wind Interest over a 180-day period beginning on September 30, 2019, and (ii) Invenergy Wind to exercise a put option with respect to the Invenergy Wind Interest over a 180-day period beginning on September 30, 2018. The exercise prices of the put and call options described above were to be based on the determination of the fair market value of the Invenergy Wind Interest at the time the relevant option was exercised, subject to certain minimum and maximum thresholds set forth in the Option Agreements. The minimum put option price per the Option Agreements was $137.8 million in aggregate. As the put options represented redemption rights outside the control of the Company, this non-controlling interest was classified as a redeemable non-controlling interest as of the acquisition date and as of December 31, 2016. The Company was accreting this redeemable non-controlling interest, using the straight-line method, from the acquisition date fair value to the redemption value, which was to extend through the period ended September 30, 2018. Accretion adjustments to the carrying value of this redeemable non-controlling interest were recorded against additional paid-in capital. As part of the Settlement Agreement with SunEdison, the Option Agreement between Terra LLC and Sun Edison LLC was rejected upon the consummation of the Merger with affiliates of Brookfield on October 16, 2017. As a result, the Company is no longer obligated to perform on its Option Agreement, and as of October 16, 2017, the Invenergy Wind non-controlling interest was no longer considered redeemable and accretion ceased as of such date. See Note 18. Non-controlling Interests for further discussion.