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SEC Filings
10-K
TERRAFORM POWER, INC. filed this Form 10-K on 03/15/2019
Entire Document
 

(In thousands)
 
Saeta as of June 12, 2018 reported at June 30, 2018
 
Adjustments
 
Saeta as of June 12, 2018 reported at December 31, 2018
Renewable energy facilities in service
 
$
1,988,993

 
$
4,527

 
$
1,993,520

Accounts receivable
 
90,555

 
788

 
91,343

Intangible assets
 
992,883

 
41,293

 
1,034,176

Goodwill
 
115,381

 
7,725

 
123,106

Other assets
 
44,190

 
(788
)
 
43,402

Total assets acquired
 
3,232,002

 
53,545

 
3,285,547

Accounts payable, accrued expenses and other current liabilities
 
92,965

 
67

 
93,032

Long-term debt, including current portion
 
1,906,831

 

 
1,906,831

Deferred income taxes
 
174,080

 
(2,707
)
 
171,373

Asset retirement obligations
 
11,454

 
56,252

 
67,706

Derivative liabilities1
 
137,002

 

 
137,002

Other long-term liabilities
 
23,069

 
(67
)
 
23,002

Total liabilities assumed
 
2,345,401

 
53,545

 
2,398,946

Redeemable non-controlling interests2
 
55,117

 

 
55,117

Purchase price, net of cash and restricted cash acquired3
 
$
831,484

 
$

 
$
831,484

———
(1)
Derivative liabilities are included within other liabilities in the consolidated balance sheets.
(2)
The fair value of the non-controlling interest was determined using a market approach using a quoted price for the instrument. As discussed above, the Company acquired the remaining shares of Saeta pursuant to a statutory squeeze out procedure under Spanish law, which closed on July 2, 2018. The quoted price for the purchase of the non-controlling interest is the best indicator of fair value and was supported by a discounted cash flow technique.
(3)
The Company acquired cash and cash equivalents of $187.2 million and restricted cash of $95.1 million as of the acquisition date.

The acquired non-financial assets primarily represent estimates of the fair value of acquired renewable energy facilities and intangible assets from concession and license agreements using the cost and income approach. Key inputs used to estimate fair value included forecasted power pricing, operational data, asset useful lives, and a discount rate factor reflecting current market conditions at the time of the acquisition. These significant inputs are not observable in the market and thus represent Level 3 measurements (as defined in Note 13. Fair Value of Financial Instruments). Refer below for additional disclosures related to the acquired finite-lived intangible assets.
    
The excess of the purchase price over the estimated fair value of the net assets acquired was recorded as goodwill. As of the date of these financial statements, the analysis of the fair values of renewable energy facilities, intangible assets, asset retirement obligations, long-term debt and deferred income taxes have yet to be completed. The additional information needed by the Company to finalize the measurement of these provisional amounts include the assessment of the estimated removal costs and salvage values of renewable energy facilities, credit spreads of non-recourse project debt and additional information related to the renewable energy tariff system in certain markets. The provisional amounts for this business combination are subject to revision until these evaluations are completed.

The results of operations of Saeta are included in the Company’s consolidated results since the date of acquisition. The operating revenues and net income of Saeta reflected in the consolidated statements of operations for the year ended December 31, 2018 were $221.2 million and $38.2 million, respectively.

Intangibles at Acquisition Date
    
The following table summarizes the estimated fair value and weighted average amortization period of acquired intangible assets as of the acquisition date for Saeta. The Company attributed intangible asset value to concessions and license agreements in-place from solar and wind facilities. These intangible assets are amortized on a straight-line basis over the estimated remaining useful life of the facility from the Company’s acquisition date.


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