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

As part of the Company’s risk management strategy, the Company has entered into derivative instruments which include interest rate swaps, foreign currency contracts and commodity contracts to mitigate interest rate, foreign currency and commodity price exposure. If the Company elects to do so and if the instrument meets the criteria specified in ASC 815, Derivatives and Hedging, the Company designates its derivative instruments as cash flow hedges. The Company enters into interest rate swap agreements in order to hedge the variability of expected future cash interest payments. Foreign currency contracts are used to reduce risks arising from the change in fair value of certain foreign currency denominated assets and liabilities. The objective of these practices is to minimize the impact of foreign currency fluctuations on operating results. The Company also enters into commodity contracts to economically hedge price variability inherent in electricity sales arrangements. The objectives of the commodity contracts are to minimize the impact of variability in spot electricity prices and stabilize estimated revenue streams. The Company does not use derivative instruments for speculative purposes.

As of December 31, 2017 and 2016, fair values of the following derivative instruments were included in the balance sheet captions indicated below:
 
 
Fair Value of Derivative Instruments
 
 
 
 
 
 
 
 
Hedging Contracts
 
Derivatives Not Designated as Hedges
 
 
 
 
 
 
(In thousands)
 
Interest Rate Swaps
 
Commodity Contracts
 
Interest Rate Swaps
 
Foreign Currency Contracts
 
Commodity Contracts
 
Gross Amounts of Assets/Liabilities Recognized
 
Gross Amounts Offset in Consolidated Balance Sheet
 
Net Amounts in Consolidated Balance Sheet
As of December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Prepaid expenses and other current assets
 
$

 
$
8,961

 
$

 
$
63

 
$
12,609

 
$
21,633

 
$
(63
)
 
$
21,570

Other assets
 
4,686

 
71,307

 

 

 
14,787

 
90,780

 

 
90,780

Total assets
 
$
4,686

 
$
80,268

 
$

 
$
63

 
$
27,396

 
$
112,413

 
$
(63
)
 
$
112,350

Accounts payable, accrued expenses and other current liabilities
 
$
2,490

 
$

 
$
197

 
$
99

 
$

 
$
2,786

 
$
(63
)
 
$
2,723

Other long-term liabilities
 
4,796

 

 
404

 

 

 
5,200

 

 
5,200

Total liabilities
 
$
7,286

 
$

 
$
601

 
$
99

 
$

 
$
7,986

 
$
(63
)
 
$
7,923

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Prepaid expenses and other current assets
 
$
1,150

 
$
3,664

 
$

 
$
953

 
$
12,028

 
$
17,795

 
$

 
$
17,795

Other assets
 
411

 
62,474

 

 
460

 
25,167

 
88,512

 

 
88,512

Total assets
 
$
1,561

 
$
66,138

 
$

 
$
1,413

 
$
37,195

 
$
106,307

 
$

 
$
106,307

Accounts payable, accrued expenses and other current liabilities
 
$
10,689

 
$

 
$
814

 
$

 
$

 
$
11,503

 
$

 
$
11,503

Liabilities related to assets held for sale
 

 

 
4,041

 

 

 
4,041

 

 
4,041

Other long-term liabilities
 
47

 

 

 

 

 
47

 

 
47

Non-current liabilities related to assets held for sale
 

 

 
16,786

 

 

 
16,786

 

 
16,786

Total liabilities
 
$
10,736

 
$

 
$
21,641

 
$

 
$

 
$
32,377

 
$

 
$
32,377




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