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Transactions Between Entities Under Common Control

TRANSACTIONS BETWEEN ENTITIES UNDER COMMON CONTROL

Recast of Historical Financial Statements

During the nine months ended September 30, 2016, the Company acquired renewable energy facilities with a combined nameplate capacity of 19.2 MW from SunEdison, which resulted in a recast of the consolidated balance sheet as of December 31, 2015 and the unaudited condensed consolidated statement of cash flows for the nine months ended September 30, 2015. The facilities acquired from SunEdison during the nine months ended September 30, 2016 were not in operation in 2015 and there was no impact to the unaudited condensed consolidated statement of operations or unaudited condensed consolidated statement of comprehensive loss for the nine months ended September 30, 2015 as a result of these acquisitions.

The following table presents changes to the Company's previously reported consolidated balance sheet as of December 31, 2015 included in the Company's 2015 Annual Report on Form 10-K:



(In thousands) Balance Sheet Caption	As Reported		Recast Adjustments		As Recasted
Renewable energy facilities, net	$	5,802,380	$	31,854	$	5,834,234
Other assets	119,960		383		120,343
Change in total assets			$	32,237

Current portion of long-term debt and financing lease obligations¹	$	2,014,331	$	23,588	$	2,037,919
Accounts payable, accrued expenses and other current liabilities	150,721		2,325		153,046
Due to SunEdison, net	20,274		6,324		26,598
Change in total liabilities			$	32,237

———

(1)

There is a $17.6 million difference between the as reported amount per the table above and the current portion of long-term debt and financing lease obligations amount reported in the Company's 2015 Annual Report on Form 10-K due to the reclassification of the current portion of deferred financing costs, net amount reported in the Form 10-K to current portion of long-term debt and financing lease obligations within the balance sheet included in this Form 10-Q. This reclassification was made per the Company's adoption of ASU No. 2015-03 as of January 1, 2016, which requires retrospective application for annual and interim reporting periods beginning on or after December 15, 2015. Refer to Note 1. Nature of Operations and Basis of Presentation for further discussion.

The following table presents changes to the Company's previously reported unaudited condensed consolidated statement of cash flows for the nine months ended September 30, 2015 included in the Company's Quarterly Report on Form 10-Q dated November 9, 2015 due to the Company's acquisition of renewable energy facilities from SunEdison during the nine months ended September 30, 2016 and during the fourth quarter of 2015. These adjustments are required to reflect the activity of the renewable energy facilities for the period owned by SunEdison in accordance with rules applicable to transactions between entities under common control.



(In thousands) Statement of Cash Flows Caption	As Reported			Recast Adjustments			As Recasted
Cash flows from investing activities:
Cash paid to third parties for renewable energy facility construction	$	(426,682	)	$	(161,351	)	$	(588,033	)
Acquisitions of renewable energy facilities from third parties, net of cash acquired	(1,004,403		)	(154,496		)	(1,158,899		)
Change in net cash used in investing activities				(315,847		)

Cash flows from financing activities:
Borrowings of non-recourse long-term debt	276,915			159,842			436,757
Principal payments on non-recourse long-term debt	(148,764		)	(1,130		)	(149,894		)
Due to SunEdison, net	(147,370		)	157,135			9,765
Change in net cash provided by financing activities				315,847

Net increase in cash and cash equivalents	168,647			—			168,647
Effect of exchange rate changes on cash and cash equivalents	(1,380		)	—			(1,380		)
Cash and cash equivalents at beginning of period	468,554			—			468,554
Cash and cash equivalents at end of period	$	635,821		$	—		$	635,821

As a result of the Company's acquisition of renewable energy facilities from SunEdison during the fourth quarter of 2015, the following table presents changes to the Company's previously reported unaudited condensed consolidated statement of comprehensive income (loss) for the three and nine months ended September 30, 2015 included in the Company's Quarterly Report on Form 10-Q dated November 9, 2015. These adjustments are required to reflect the activity of the renewable energy facilities for the period owned by SunEdison in accordance with rules applicable to transactions between entities under common control.



	Three Months Ended September 30, 2015							Nine Months Ended September 30, 2015
(In thousands) Statement of Comprehensive Income (Loss)	As Reported			Recast Adjustments		As Recasted		As Reported			Recast Adjustments		As Recasted
Other comprehensive income (loss), net of tax:
Hedging activities:
Net unrealized gain (loss) arising during the period, net of tax	$	(1,135	)	$	32,985	$	31,850	$	(2,955	)	$	40,488	$	37,533
Change in total comprehensive (loss) income				32,985							40,488
Less: Pre-acquisition other comprehensive income of renewable energy facilities acquired from SunEdison	$	—		32,985		$	32,985	$	—		40,488		$	40,488
Change in comprehensive loss attributable to Class A Common stockholders				$	—						$	—

Acquisitions of Renewable Energy Facilities from SunEdison

The assets and liabilities transferred to the Company for the acquisitions of renewable energy facilities relate to interests under common control with SunEdison, and accordingly, have been recorded at historical cost. The difference between the cash purchase price and historical cost of the net assets acquired has been recorded as a contribution from SunEdison.

The following table summarizes the renewable energy facilities acquired by the Company from SunEdison through a series of transactions:



			Nine Months Ended September 30, 2016				As of September 30, 2016
Facility Category	Type	Location	Nameplate Capacity (MW)	Number of Sites	Cash Paid¹		Cash Due to SunEdison²		Debt Transferred³
Distributed Generation	Solar	U.S.	1.2	3	$	2,750	$	—	$	—
Utility	Solar	U.S.	18.0	1	36,231		—		—
Total			19.2	4	$	38,981	$	—	$	—

————


(1)	Represents the total amount paid to SunEdison. Excludes aggregated tax equity partner payments of $1.6 million to SunEdison.


(2)	All amounts have been paid to SunEdison for these renewable energy facilities as of September 30, 2016.


(3)	$16.7 million of construction debt existed for one of the renewable energy facilities as of the acquisition date. This debt was fully repaid by SunEdison during the third quarter of 2016 using cash proceeds paid by the Company to SunEdison for the acquisition of the facility.

During the nine months ended September 30, 2016, the Company paid $55.9 million to SunEdison for the acquisition of renewable energy facilities that had achieved final funding as of September 30, 2016, which includes the second installment of the purchase price paid to SunEdison for the completion of the construction of renewable energy facilities that the Company acquired from SunEdison during 2015. The difference between the cash paid and historical cost of the net assets acquired from SunEdison of $21.3 million has been recorded as a contribution from SunEdison, which is reflected within Net SunEdison investment on the unaudited condensed consolidated statement of stockholders' equity. The Company records a contribution or distribution from SunEdison upon final funding of the acquisition.

Assets Held For Sale

9 Months Ended

Sep. 30, 2016

Discontinued Operations and Disposal Groups [Abstract]

Assets Held for Sale

ASSETS HELD FOR SALE

The Company commenced a sale of substantially all of its portfolio of solar power plants located in the United Kingdom (the "U.K.") through a broad based sales process pursuant to a plan approved by management (24 operating projects for sale representing 365.0 MW, the "U.K. Portfolio"), and it was probable that the sale of this portfolio would occur within one year from the balance sheet date. As a result, the Company classified $635.6 million of assets and $467.7 million of liabilities as held for sale as of September 30, 2016 and measured each at the lower of carrying value or fair value less costs to sell. The Company's analysis indicated that the fair value less costs to sell exceeded the carrying value of the assets and no impairment losses were recognized during the nine months ended September 30, 2016.

The following table summarizes the major classes of assets and liabilities which are classified as held for sale on the Company's unaudited condensed consolidated balance sheet as of September 30, 2016:



(In thousands)	September 30, 2016
Assets held for sale:
Restricted cash	$	54,731
Accounts receivable, net	14,060
Prepaid expenses and other current assets	2,114
Total current assets held for sale	70,905

Renewable energy facilities, net	562,755
Intangible assets, net	1,566
Other assets	381
Total non-current assets held for sale	564,702

Total assets held for sale	$	635,607

Liabilities related to assets held for sale:
Current portion of long-term debt	$	385,047
Accounts payable, accrued expenses and other current liabilities	40,598
Due to SunEdison, net	744
Total current liabilities related to assets held for sale	426,389

Asset retirement obligations	41,328
Total non-current liabilities related to assets held for sale	41,328

Total liabilities related to assets held for sale	$	467,717

Entry into sale and purchase agreement for the U.K. Portfolio

On January 5, 2017, TerraForm Power Operating, LLC (“Terra Operating LLC”), SunEdison Yieldco UK Holdco 2, LLC (the “Seller”), a wholly owned subsidiary of Terra Operating LLC, and Vortex Solar UK Limited (“Vortex”), a company registered in England and Wales, entered into a sale and purchase agreement (the “SPA”) to sell the U.K. Portfolio to Vortex (the “U.K. Transaction”). Terra Operating LLC expects to receive approximately $208 million of proceeds (USD equivalent on the date of the SPA) from the U.K. Transaction (comprising consideration payable and debt being repaid on behalf of the U.K. Portfolio to Terra Operating LLC), net of transaction expenses and distributions, and subject to certain adjustments. In addition, the U.K. Transaction would remove GBP 301.3 million (equivalent of approximately $370 million on the date of the SPA) in non-recourse project debt at the U.K. Portfolio level (the “Existing Debt”) from the Company's consolidated balance sheet. The closing of the U.K. Transaction is subject to certain conditions, including: (i) satisfaction of certain customary conditions precedent, including the satisfaction of certain obligations of the U.K. Portfolio under the Existing Debt, receipt of antitrust approval and the performance of the respective obligations of each of the parties to the SPA; and (ii) the satisfaction of certain conditions precedent relating to the SunEdison Bankruptcy and the outcome of the previously announced settlement discussions between TerraForm Power and SunEdison. Vortex’s payment obligations following satisfaction of these conditions are supported by parent equity commitment letters, as well as an obligation to fund an escrow at a credit-worthy U.K.-based bank.

Either party may terminate the SPA if the U.K. Transaction has not closed by July 31, 2017. In addition, in the event that by April 15, 2017, either (i) TerraForm Power has not entered into a definitive transaction meeting certain criteria in connection with the previously announced strategic alternatives process or (ii) certain conditions precedent relating to the SunEdison Bankruptcy and the outcome of the previously announced settlement discussions between TerraForm Power and SunEdison have not been satisfied, and Vortex has not waived the outstanding conditions precedent, either the Seller or Vortex may terminate the SPA by notice to the other.

In connection with the U.K. Transaction, pursuant to the SPA the Seller has given certain warranties to Vortex relating to the condition of the U.K. Portfolio, which are subject to customary limitations. The Seller’s obligations under the SPA are guaranteed by Terra Operating LLC; however those obligations are subject to market standard limitations on liability and de minimis thresholds. In connection with the U.K. Transaction, Terra Operating LLC has entered into an agreement to indemnify Vortex for certain liabilities and expenses arising out of the SunEdison Bankruptcy. Terra Operating LLC and the Seller also expect to provide a market standard tax indemnity to Vortex at the closing of the U.K. Transaction. The U.K. Transaction is expected to close in the first half of 2017.

Residential Portfolio Sale

During the third quarter of 2016, the Company began exploring a sale of substantially all of its portfolio of residential rooftop solar assets located in the United States through a strategic sales process. These assets did not meet the criteria to be classified as held for sale as of September 30, 2016 but were determined to meet the criteria during the fourth quarter of 2016. In the third quarter of 2016, in conjunction with the exploration of a sale, the Company recorded a $3.3 million charge within cost of operations as a result of the decision to abandon certain residential construction in progress assets it did not expect to complete. As of September 30, 2016, the assets and liabilities, including non-controlling interests, related to this portfolio were approximately $35 million and $12 million, respectively. The Company's preliminary analysis as of the held for sale date indicated that the carrying value of the assets exceeded the fair value less costs to sell by approximately $13 million. The Company cannot give any assurance as to when or if it will complete any such sale or to the price it will receive for such assets.

The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

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Acquisitions

9 Months Ended

Sep. 30, 2016

Acquisitions

ACQUISITIONS

2015 Acquisitions

Acquisition of Invenergy Wind Power Plants

On December 15, 2015, the Company acquired operating wind power plants with a combined nameplate capacity of 831.5 MW (net) from Invenergy Wind Global LLC (together with its subsidiaries, “Invenergy Wind”) for $1.3 billion in cash and the assumption of $531.2 million of non-recourse indebtedness. The wind power plants that the Company acquired from Invenergy Wind have contracted PPAs with an average counterparty credit rating of AA as of the acquisition date. Invenergy Wind will retain a 9.9% non-controlling interest in wind power plants located in the U.S. that the Company acquired and will provide certain operation and maintenance services for such assets.

Acquisition Accounting for Invenergy Wind

The acquisition accounting for the Invenergy Wind acquisition was completed as of the second quarter of 2016, at which point the provisional fair values became final. The final amounts for this acquisition are included in the table within the "Acquisition Accounting" section of this footnote below.

The final fair value of assets and liabilities pertaining to the Invenergy Wind acquisition reflects the following changes from the initial opening balance sheet; a decrease of $8.9 million in renewable energy facilities, an increase of $8.1 million in other assets and a decrease of $0.8 million in redeemable non-controlling interest.

The operating revenues and net loss of Invenergy Wind acquired in 2015 reflected in the unaudited condensed consolidated statement of operations for the three months ended September 30, 2016 are $17.8 million and $12.7 million, respectively. The operating revenues and net income of Invenergy Wind for the nine months ended September 30, 2016 are $90.3 million and $1.0 million, respectively.

Valuation of Non-controlling Interest

Invenergy Wind

The fair value of the non-controlling interest for Invenergy Wind was determined using a discounted cash flow approach. The redeemable non-controlling interest represents the fair value of 9.9% sponsor equity held by Invenergy Wind. SunEdison 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 wind power plants located in the U.S. (the ‘‘Invenergy Wind Interest’’). Simultaneously, Terra LLC entered into a back to back option agreement with SunEdison LLC on substantially identical terms (collectively the "Option Agreements"). The Option Agreements effectively permit (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 would be based on the determination of the fair market value of the Invenergy Wind Interest at the time the relevant option is exercised, subject to certain minimum and maximum thresholds set forth in the Option Agreements. SunEdison LLC is a debtor in the SunEdison Bankruptcy. As such, SunEdison LLC may assume, assume and assign or reject its Option Agreement. If SunEdison LLC rejects its Option Agreement with Invenergy, the Company would not expect to be obligated to perform on its Option Agreement with SunEdison LLC, although the Company cannot assure that result.

Acquisition Accounting

The acquisition-date fair values of assets, liabilities and non-controlling interests pertaining to the Invenergy Wind business combination as of September 30, 2016, are as follows:



(In thousands)	Invenergy Wind
Renewable energy facilities	$	1,477,888
Accounts receivable	25,811
Intangible assets	748,300
Restricted cash	31,247
Derivative assets	32,311
Other assets	20,148
Total assets acquired	2,335,705
Accounts payable, accrued expenses and other current liabilities	23,195
Long-term debt, including current portion	531,221
Deferred income taxes	242
Asset retirement obligations	47,346
Other long-term liabilities	6,004
Total liabilities assumed	608,008
Redeemable non-controlling interest	140,635
Non-controlling interest	308,000
Purchase price, net of cash acquired	$	1,279,062

The acquired renewable energy facilities' non-financial assets 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 11. Fair Value of Financial Instruments). The estimated fair values were determined based on an income approach and the estimated useful lives of the intangible assets range from 5 to 23 years as of the acquisition date. See Note 6. Intangibles for additional disclosures related to the acquired intangible assets.

Unaudited Pro Forma Supplementary Data

The unaudited pro forma supplementary data presented in the table below gives effect to the material 2015 acquisitions, Invenergy Wind, First Wind and Northern Lights, as if those transactions had each occurred on January 1, 2015. The unaudited pro forma supplementary data is provided for informational purposes only and should not be construed to be indicative of the Company’s results of operations had the acquisitions been consummated on the date assumed or of the Company’s results of operations for any future period.



	Nine Months Ended September 30,
(In thousands)	2015
Total operating revenues, net	$	469,619
Net loss	(22,761		)

Acquisition costs incurred by the Company related to third party acquisitions were $2.7 million for the nine months ended September 30, 2016 and $11.3 million and $32.7 million for the three and nine months ended September 30, 2015, respectively. There were no acquisition costs incurred by the Company for the three months ended September 30, 2016. These costs are reflected as acquisition and related costs and acquisition and related costs - affiliate in the unaudited condensed consolidated statements of operations.

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

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Property, Plant and Equipment [Abstract]

Renewable Energy Facilities

9 Months Ended

Sep. 30, 2016

Renewable Energy Facilities

RENEWABLE ENERGY FACILITIES

Renewable energy facilities, net consists of the following:



(In thousands)	September 30, 2016			December 31, 2015
Renewable energy facilities in service, at cost	$	5,405,482		$	5,906,154
Less accumulated depreciation - renewable energy facilities	(306,004		)	(187,874		)
Renewable energy facilities in service, net	5,099,478			5,718,280
Construction in progress - renewable energy facilities	4,079			115,954
Total renewable energy facilities, net	$	5,103,557		$	5,834,234

Depreciation expense related to renewable energy facilities was $48.1 million and $148.5 million for the three and nine months ended September 30, 2016, respectively, as compared to $35.7 million and $93.5 million for the same periods in the prior year.

Construction in progress represents costs incurred to complete the construction of the facilities in the Company's portfolio that were acquired from SunEdison. When renewable energy facilities are sold to the Company after completion by SunEdison, the Company retroactively recasts its historical financial statements to present the construction activity as if it consolidated the facility at inception of the construction (see Note 2. Transactions Between Entities Under Common Control). All construction in progress costs are stated at SunEdison's historical cost. These costs include capitalized interest costs incurred during the asset's construction period, which totaled $0.8 million for the nine months ended September 30, 2016 and $6.6 million and $18.0 million for the three and nine months ended September 30, 2015, respectively. There were no capitalized interest costs for the three months ended September 30, 2016.

As of September 30, 2016, the Company reclassified $562.8 million from renewable energy facilities, net to non-current assets held for sale in the unaudited condensed consolidated balance sheet (see Note 3. Assets Held for Sale). There was no amount classified as assets held for sale as of December 31, 2015.

Intangibles

9 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Intangibles

INTANGIBLES

The following table presents the gross carrying amount and accumulated amortization of intangibles as of September 30, 2016:



(In thousands, except weighted average amortization period)	Weighted Average Amortization Period	Gross Carrying Amount		Accumulated Amortization			Net Book Value
Favorable rate revenue contracts	16 years	$	719,368	$	(46,331	)	$	673,037
In-place value of market rate revenue contracts	19 years	555,355		(43,045		)	512,310
Favorable rate land leases	18 years	15,800		(1,331		)	14,469
Total intangible assets, net		$	1,290,523	$	(90,707	)	$	1,199,816

Unfavorable rate revenue contracts	7 years	$	35,086	$	(9,168	)	$	25,918
Unfavorable rate land lease	16 years	1,000		(93		)	907
Total intangible liabilities, net		$	36,086	$	(9,261	)	$	26,825

The following table presents the gross carrying amount and accumulated amortization of intangibles as of December 31, 2015:



(In thousands, except weighted average amortization period)	Weighted Average Amortization Period	Gross Carrying Amount		Accumulated Amortization			Net Book Value
Favorable rate revenue contracts	17 years	$	714,137	$	(12,024	)	$	702,113
In-place value of market rate revenue contracts	20 years	551,226		(22,229		)	528,997
Favorable rate land leases	19 years	15,800		(746		)	15,054
Total intangible assets, net		$	1,281,163	$	(34,999	)	$	1,246,164

Unfavorable rate revenue contracts	8 years	$	35,086	$	(4,951	)	$	30,135
Unfavorable rate land lease	17 years	1,000		(51		)	949
Total intangible liabilities, net		$	36,086	$	(5,002	)	$	31,084

The Company has intangible assets related to revenue contracts, representing long-term PPAs and REC agreements, and favorable rate land leases that were obtained through acquisitions. The revenue contract intangible assets are comprised of favorable rate PPAs and REC agreements and the in-place value of market rate PPAs. The Company also has intangible liabilities related to unfavorable rate PPAs and REC agreements and an unfavorable rate land lease, which are classified within other long-term liabilities in the unaudited condensed consolidated balance sheet. These intangible assets and liabilities are amortized on a straight-line basis over the remaining lives of the agreements, which range from 1 to 28 years as of September 30, 2016.

Amortization expense related to favorable rate revenue contracts is reflected in the unaudited condensed consolidated statements of operations as a reduction of operating revenues, net. Amortization related to unfavorable rate revenue contracts is reflected in the unaudited condensed consolidated statements of operations as an increase to operating revenues, net. During the three and nine months ended September 30, 2016, net amortization expense related to favorable and unfavorable rate revenue contracts resulted in a reduction of operating revenues, net of $9.8 million and $30.1 million, respectively, as compared to a $3.4 million increase to operating revenues, net and $1.6 million reduction of operating revenues, net for the same periods in the prior year.

Amortization expense related to the in-place value of market rate revenue contracts is reflected in the unaudited condensed consolidated statements of operations within depreciation, accretion and amortization expense. During the three and nine months ended September 30, 2016, amortization expense related to the in-place value of market rate revenue contracts was $7.0 million and $20.8 million, respectively, as compared to $6.0 million and $15.1 million for the same periods in the prior year.

Amortization expense related to favorable rate land leases is reflected in the unaudited condensed consolidated statements of operations within cost of operations. Amortization related to the unfavorable rate land lease is reflected in the unaudited condensed consolidated statements of operations as a reduction of cost of operations. During the three and nine months ended September 30, 2016, net amortization expense related to favorable and unfavorable rate land leases was $0.2 million and $0.6 million, respectively. There was no amortization expense related to favorable and unfavorable rate land leases recorded within cost of operations during the three and nine months ended September 30, 2015.

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Variable Interest Entities

9 Months Ended

Sep. 30, 2016

Variable Interest Entities

VARIABLE INTEREST ENTITIES

The Company consolidates variable interest entities ("VIEs") in renewable energy facilities when the Company is the primary beneficiary. The VIEs own and operate renewable energy facilities in order to generate contracted cash flows. The VIEs were funded through a combination of equity contributions from the owners and non-recourse, project-level debt. No VIEs were deconsolidated during the nine months ended September 30, 2016 and 2015.

The carrying amounts and classification of the consolidated VIEs’ assets and liabilities included in the Company's unaudited condensed consolidated balance sheets are as follows:



(In thousands)	September 30, 2016		December 31, 2015
Current assets	$	216,911	$	180,287
Non-current assets	4,493,532		4,584,886
Total assets	$	4,710,443	$	4,765,173
Current liabilities	$	509,084	$	1,043,892
Non-current liabilities	703,299		202,629
Total liabilities	$	1,212,383	$	1,246,521

The amounts shown in the table above exclude intercompany balances which are eliminated upon consolidation. All of the assets in the table above are restricted for settlement of the VIE obligations, and all of the liabilities in the table above can only be settled by using VIE resources.

Long-term Debt

9 Months Ended

Sep. 30, 2016

Debt Disclosure [Abstract]

Long-term Debt

LONG-TERM DEBT

Long-term debt consists of the following:



(In thousands, except rates) Description:	September 30, 2016			December 31, 2015			Interest Type	Interest Rate (%)¹	Financing Type
Corporate-level long-term debt²:
Senior Notes due 2023	$	950,000		$	950,000		Fixed	6.38³	Senior notes
Senior Notes due 2025	300,000			300,000			Fixed	6.63³	Senior notes
Revolver	655,000			655,000			Variable	3.94⁴	Revolving loan
Non-recourse long-term debt⁵:
Permanent financing	2,034,882			2,546,864			Blended⁶	6.05⁷	Term debt / Senior notes
Construction financing	—			38,063			Variable	N/A	Construction debt
Financing lease obligations	124,866			136,594			Imputed	5.64⁷	Financing lease obligations
Total principal due for long-term debt and financing lease obligations	4,064,748			4,626,521				5.81⁷
Unamortized discount, net	(15,148		)	(20,821		)
Deferred financing costs, net⁸	(37,334		)	(43,051		)
Less current portion of long-term debt and financing lease obligations	(1,374,327		)	(2,037,919		)
Long-term debt and financing lease obligations, less current portion	$	2,637,939		$	2,524,730

———


(1)	As of September 30, 2016.


(2)	Corporate-level debt represents debt issued by Terra Operating LLC and guaranteed by Terra LLC and certain subsidiaries of Terra Operating LLC other than non-recourse subsidiaries as defined in the relevant debt agreements.


(3)	The interest rate for the Senior Notes due 2023 and the Senior Notes due 2025 reflected in this table excludes, in each case, 3.0% per annum special interest that accrued from September 6, 2016 to and including December 6, 2016 per the terms of the Senior Notes due 2023 fourth supplemental indenture and Senior Notes due 2025 third supplemental indenture as discussed below.


(4)	The interest rate for the Revolver reflected in this table excludes 1.5% per annum special interest that accrued from September 6, 2016 to and including December 6, 2016 per the terms of the eighth amendment to the Revolver as discussed below.


(5)	Non-recourse debt represents debt issued by subsidiaries with no recourse to Terra LLC, Terra Operating LLC, or guarantors of the Company's corporate-level debt, other than limited or capped contingent support obligations, which in aggregate are not considered to be material to the Company's business and financial condition.


(6)	Includes variable rate debt and fixed rate debt. As of September 30, 2016, 59% of this balance had a variable interest rate and the remaining 41% of this balance had a fixed interest rate. The Company has entered into interest rate swap agreements to fix the interest rates of certain variable rate permanent financing non-recourse debt (see Note 10. Derivatives).


(7)	Represents the weighted average interest rate as of September 30, 2016.


(8)	Total net long-term debt and financing lease obligations, including current portion, reflects the reclassification of deferred financing costs to reduce long-term debt as further described in Note 1. Nature of Operations and Basis of Presentation.

Corporate-level Long-term Debt

Senior Notes due 2023 and Senior Notes due 2025

The Senior Notes due 2023 and the Senior Notes due 2025 require the Company to timely file with the SEC, or make publicly available, audited annual financial statements and unaudited quarterly financial statements no later than 60 days following the date required by the SEC's rules and regulations (including extensions thereof). The Company has a 90 day grace period from the date a notice of default is deemed to be duly given to Terra Operating LLC in accordance with the Senior Notes due 2023 and the Senior Notes due 2025. On May 31, 2016, Terra Operating LLC received a notice from the trustee of an event of default for failure to deliver 2015 audited annual financial statements.

On August 30, 2016, the Company announced the successful completion of a consent solicitation from holders of record on August 16, 2016 of its Senior Notes due 2023 and its Senior Notes due 2025 to obtain waivers relating to certain reporting covenants and to effectuate certain amendments under the indenture dated as of January 28, 2015 (as supplemented) with respect to the Senior Notes due 2023 (the "2023 Indenture") and the indenture dated as of July 17, 2015 (as supplemented) with respect to the Senior Notes due 2025 (the "2025 Indenture"). Terra Operating LLC received validly delivered and unrevoked consents from the holders of a majority of the aggregate principal amount of each series of the notes outstanding as of the record date and paid a consent fee to each consenting holder of $5.00 for each $1,000 principal amount of such series of the notes for which such holder delivered its consent. Under the terms of the waivers obtained, the deadline to comply with the reporting covenants in the indentures relating to the filing of the Company's Form 10-K for 2015 and Form 10-Q for the first quarter of 2016 was extended to December 6, 2016. The Company filed the Form 10-K for 2015 and Form 10-Q for the first quarter of 2016 by the December 6, 2016 deadline. Although the Company's Form 10-Q for the second quarter of 2016 was not filed by December 6, 2016, it was filed with the SEC within the grace period for delivery, and consequently no event of default occurred with respect to the second quarter filing.

Following receipt of the requisite consents required to approve the amendments to the respective indentures, Terra Operating LLC entered into a fourth supplemental indenture to the 2023 Indenture and a third supplemental indenture to the 2025 Indenture on August 29, 2016. Effective as of September 6, 2016, the fourth and third supplemental indentures respectively permanently increased the interest rate payable on the Senior Notes due 2023 from 5.875% per annum to 6.375% per annum and the interest rate payable on the Senior Notes due 2025 from 6.125% per annum to 6.625% per annum. In addition, beginning on September 6, 2016 through and including December 6, 2016, special interest accrued on the Senior Notes due 2023 and the Senior Notes due 2025 at a rate equal to 3.0% per annum, which shall be payable in the same manner as regular interest payments on the first interest payment date following December 6, 2016. The fourth and third supplemental indentures also require the Company, upon the consummation of any transaction resulting in any person becoming the beneficial owner of 33.3% or more but less than or equal to 50% of the voting stock of the Company, to make an offer to each holder of the Senior Notes due 2023 and the Senior Notes due 2025, respectively, to repurchase all or any part of that holder's notes at a purchase price in cash equal to 101% of the aggregate principal amount of such notes repurchased. In lieu of making such an offer under either the 2023 Indenture or the 2025 Indenture, the applicable supplemental indenture also provides that Terra Operating LLC may elect to deliver a notice to the trustee under the 2023 Indenture or the 2025 Indenture, as applicable, to permanently increase the interest rate on the Senior Notes due 2023 from 6.375% per annum to 7.375% per annum or the interest rate on the Senior Notes due 2025 from 6.625% per annum to 7.625% per annum, respectively.

On January 17, 2017, Terra Operating LLC received a notice of default from the trustee under the 2023 Indenture and the 2025 Indenture for failure to comply with its obligation to timely furnish this Form 10-Q for the third quarter of 2016. However, this Form 10-Q for the third quarter of 2016 was filed with the SEC within the grace period for delivery, and consequently no event of default occurred with respect to the third quarter filing.

Revolving Credit Facility

The terms of the Revolver require the Company to provide audited annual financial statements within 90 days after the end of the fiscal year, with a 10-business day cure period. From March 30, 2016 to May 27, 2016, Terra Operating LLC entered into a series of amendments (fourth, fifth, sixth and seventh) to the terms of the Revolver, which provided that the date on which the Company must deliver to the Administrative Agent and other parties to the Revolver its annual financial statements and accompanying audit report with respect to fiscal year 2015 would be extended up to the earlier of (a) the tenth business day prior to the date on which the failure to deliver such financial statements would constitute an event of default under Terra Operating LLC’s 2023 Indenture and (b) March 30, 2017. As described above, Terra Operating LLC obtained a waiver that extended the deadline to comply with the reporting covenants in the 2023 Indenture to December 6, 2016.

The sixth amendment provided that the interest rate on loans made under the Revolver and commitment fees paid on undrawn Revolver commitments would be calculated using the highest applicable margin and commitment fee percentage under the Revolver until the first business day of the first quarter following the delivery of 2015 financial statements and the accompanying audit report. Consistent with its obligations under the seventh amendment, Terra Operating LLC entered into an eighth amendment to the terms of the Revolver on September 9, 2016, which increased the interest rate under the Revolver at all applicable margin levels by 50% of the increase in the interest rate on the Senior Notes due 2023 agreed to as part of the consent solicitation process described above. This amendment resulted in an increase in the interest rate payable under the Revolver prior to the eighth amendment by 1.75% for the period from September 6, 2016 to December 6, 2016 and, thereafter, an increase from the interest rate payable prior to the eighth amendment by 0.25%.

On September 27, 2016, Terra Operating LLC entered into a consent agreement and ninth amendment to the terms of the Revolver. The consent agreement provided consent for the cross-collateralization of certain utility scale assets located in Canada owned by subsidiaries of the Company as further described in the "Canada project-level financing" section below. In addition, in conjunction with this consent, the agreement provided that Terra Operating LLC would prepay $70.0 million of revolving loans outstanding under the Revolver and permanently reduce the revolving commitments and borrowing capacity by such amount. This amount was repaid by Terra Operating LLC on November 10, 2016, which permanently reduced the borrowing capacity under the Revolver by such amount.

On November 25, 2016, Terra Operating LLC entered into a waiver agreement with the requisite lenders under the Revolver. The waiver agreement waived Terra Operating LLC’s obligation to comply with the debt service coverage ratio and leverage ratio financial covenants of the Revolver with respect to the third quarter of 2016 and the requirement to certify compliance with those covenants. In connection with this waiver, Terra Operating LLC made a prepayment of the revolving loans outstanding under the Revolver in an aggregate amount equal to $30.0 million and permanently reduced the revolving commitments and borrowing capacity under the Revolver by that amount. The waiver also extended to January 1, 2017, the deadline for delivery of certain financial information with respect to the third quarter of 2016. Failure to deliver certain summary financial information with respect to the third quarter of 2016 by December 21, 2016 would also have resulted in an event of default under the Revolver. The Company provided the required financial information deliverables by the respective deadlines.

Non-recourse Long-term Debt

Indirect subsidiaries of Terra Operating LLC have incurred long-term debt obligations with respect to the renewable energy facilities that those subsidiaries own directly or indirectly. This indebtedness of these subsidiaries is typically secured by the renewable energy facility's assets (mainly the renewable energy facility) or equity interests in such renewable energy facilities with no recourse to Terra LLC or Terra Operating LLC other than limited or capped contingent support obligations, which in aggregate are not considered to be material to the Company's business and financial condition. In connection with these financings and in the ordinary course of its business, the Company and its subsidiaries observe formalities and operating procedures to maintain each of their separate existence and can readily identify each of their separate assets and liabilities as separate and distinct from each other. As a result, these subsidiaries are legal entities that are separate and distinct from the Company, Terra LLC and Terra Operating LLC and the guarantors under the Revolver, the Senior Notes due 2023 and Senior Notes due 2025.

Non-recourse Debt Defaults

SunEdison is a party to or guarantor of a material project agreement, such as asset management or O&M contracts, for most of the Company's non-recourse financing arrangements. As a result of the SunEdison Bankruptcy and delays in delivery of 2015 audited financial statements for certain project-level subsidiaries, among other things, the Company experienced defaults under most of its non-recourse financing agreements in 2016. For certain of these defaults, the corresponding contractual grace periods already expired as of the financial statement issuance date or the Company could not assert that it was probable that the violation will be cured within any remaining grace periods, would be cured for a period of more than twelve months or were not likely to recur. In addition, while the Company has been actively negotiating with the lenders to obtain waivers, the lenders have not currently waived or subsequently lost the right to demand repayment for more than one year from the balance sheet date with respect to certain of these defaults. As the defaults occurred prior to the issuance of the financial statements for the nine months ended September 30, 2016 and for the year ended December 31, 2015 (and prior to the balance sheet date for the September 30, 2016 period), $1.0 billion and $1.9 billion, respectively, of the Company's non-recourse long-term indebtedness, net of unamortized debt discounts and deferred financing costs, was reclassified to current in the unaudited condensed consolidated balance sheet as the Company accounts for debt in default as of the date the financial statements are issued in the same manner as if the default existed as of the balance sheet date. $385.0 million of the September 30, 2016 reclassification amount was reclassified from current portion of long-term debt and financing lease obligations to current liabilities related to assets held for sale as discussed below. With respect to certain of the non-recourse debt defaults that occurred, the Company obtained waivers and/or cured the defaults prior to the issuance of the financial statements for the nine months ended September 30, 2016, and as a result, $0.8 billion of non-recourse long-term indebtedness, net of unamortized debt discounts and deferred financing costs, is reflected within long-term debt and financing lease obligations, less current portion in the unaudited condensed consolidated balance sheet as of September 30, 2016.

As a result of the defaults that existed as of the financial statement issuance date, the Company also reclassified $43.4 million and $61.1 million of long-term restricted cash to current as of September 30, 2016 and December 31, 2015, respectively, consistent with the corresponding debt classification, as the restrictions that required the cash balances to be classified as long-term restricted cash were driven by the financing agreements. As of September 30, 2016, $116.2 million of cash and cash equivalents was also reclassified to current restricted cash as the cash balances were subject to distribution restrictions related to debt defaults that existed as of the balance sheet date. $49.5 million of this reclassification amount was reclassified from current restricted cash to assets held for sale as it related to the portfolio of U.K. assets discussed below. No similar reclassifications were made as of December 31, 2015 as these defaults and distribution restrictions did not exist as of the balance sheet date for that period. Refer to Note 10. Derivatives for discussion of corresponding interest rate swap reclassifications to current as a result of the debt defaults.

Debt Classified as Liabilities Related to Assets Held for Sale

As of September 30, 2016, the Company reclassified $385.0 million from current portion of long-term debt and financing lease obligations to current liabilities related to assets held for sale (see Note 3. Assets Held for Sale) in the unaudited condensed consolidated balance sheet, which represents non-recourse debt collateralized by project assets for substantially all of the Company's portfolio of solar power plants located in the U.K. No amount of debt was classified as liabilities related to assets held for sale as of December 31, 2015.

Canada project-level financing

On November 2, 2016, certain of the Company's subsidiaries entered into a new non-recourse loan financing in an aggregate principal amount of $120.0 million Canadian dollars (“CAD”) (including a CAD $6.9 million letter of credit) secured by approximately 40 MW(ac) of utility scale solar power plants located in Canada that are owned by the Company's subsidiaries. This new non-recourse loan has a seven-year maturity and amortizes on a 17-year sculpted amortization schedule. The loan agreement also permits the Company's subsidiaries to increase the principal amount of the credit facility by up to an additional CAD $123.0 million subject to obtaining additional lender commitments and the satisfaction of certain conditions, including the absence of defaults or events of default, pro forma compliance with debt service coverage ratios and other customary conditions. This new loan facility is non-recourse to Terra LLC and Terra Operating LLC. The proceeds of this financing were used to pay down the Revolver by $70.0 million as described above. Any additional proceeds are also expected to be used for general corporate purposes.

Maturities

The aggregate contractual payments of long-term debt due after September 30, 2016, including financing lease obligations and excluding amortization of debt discounts, premiums and deferred financing costs, as stated in the financing agreements, are as follows:



(In thousands)	Remainder of 2016¹		2017²		2018		2019		2020		Thereafter		Total
Maturities of long-term debt as of September 30, 2016³	$	134,531	$	645,203	$	112,042	$	538,660	$	92,018	$	2,542,294	$	4,064,748

————


(1)	Includes $100.0 million of Revolver indebtedness that was paid during the fourth quarter of 2016 as discussed above.


(2)	Includes $555.0 million of Revolver indebtedness as management currently intends to repay this indebtedness during 2017.


(3)	Represents the contractual principal payment due dates for the Company's long-term debt and does not reflect the reclassification of $0.6 billion of long-term debt to current as a result of debt defaults under certain of the Company's non-recourse financing arrangements.

Income Taxes

9 Months Ended

Sep. 30, 2016

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The income tax provision consisted of the following:



	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands, except effective tax rate)	2016			2015			2016			2015
(Loss) income before income tax expense	$	(26,571	)	$	4,091		$	(103,038	)	$	(49,266	)
Income tax expense	1,140			1,673			3,115			2,842
Effective tax rate	(4.3		)%	40.9		%	(3.0		)%	(5.8		)%

As of September 30, 2016, TerraForm Power owns 65.5% of Terra LLC and consolidates the results of Terra LLC through its controlling interest. The Company records SunEdison's 34.5% ownership of Terra LLC as a non-controlling interest in the financial statements. Terra LLC is treated as a partnership for income tax purposes. As such, the Company records income tax on its 65.5% of Terra LLC's taxable income and SunEdison records income tax on its 34.5% share of Terra LLC's taxable income.

For the three and nine month periods ended September 30, 2016 and 2015, the overall effective tax rate was different than the statutory rate of 35% primarily due to the recording of a valuation allowance on certain tax benefits attributed to the Company and to lower statutory income tax rates in the Company's foreign jurisdictions. As of September 30, 2016, most jurisdictions are in a net deferred tax asset position. A valuation allowance is recorded against the deferred tax assets primarily because of the history of losses in those jurisdictions.

Derivatives

9 Months Ended

Sep. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

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 September 30, 2016 and December 31, 2015, 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 September 30, 2016
Prepaid expenses and other current assets	$	—	$	7,619	$	—	$	1,041	$	12,966	$	21,626		$	—		$	21,626
Other assets	—		49,272		—		540		28,842		78,654			—			78,654
Total assets	$	—	$	56,891	$	—	$	1,581	$	41,808	$	100,280		$	—		$	100,280
Accounts payable and other current liabilities	$	19,186	$	—	$	1,513	$	—	$	—	$	20,699		$	—		$	20,699
Liabilities related to assets held for sale	—		—		33,216		—		—		33,216		—	—			33,216
Other long-term liabilities	11,353		—		—		—		—		11,353			—			11,353
Total liabilities	$	30,539	$	—	$	34,729	$	—	$	—	$	65,268		$	—		$	65,268

As of December 31, 2015
Prepaid expenses and other current assets	$	—	$	11,455	$	—	$	3,875	$	12,542	$	27,872		$	(1,451	)	$	26,421
Other assets	487		51,699		—		2,836		30,799		85,821			(70		)	85,751
Total assets	$	487	$	63,154	$	—	$	6,711	$	43,341	$	113,693		$	(1,521	)	$	112,172
Accounts payable and other current liabilities	$	19,081	$	—	$	1,104	$	3,777	$	—	$	23,962		$	(1,451	)	$	22,511
Other long-term liabilities	—		—		—		70		—		70			(70		)	—
Total liabilities	$	19,081	$	—	$	1,104	$	3,847	$	—	$	24,032		$	(1,521	)	$	22,511

As of September 30, 2016 and December 31, 2015, notional amounts for derivative instruments consisted of the following:



	Notional Amount as of
(In thousands)	September 30, 2016		December 31, 2015
Derivatives designated as hedges:
Interest rate swaps (USD)	$	442,530	$	468,067
Interest rate swaps (GBP)	—		222,018
Commodity contracts (MWhs)	18,401		18,401
Derivatives not designated as hedges:
Interest rate swaps (USD)	14,936		15,794
Interest rate swaps (GBP)	222,018		—
Foreign currency contracts (GBP)	—		112,168
Foreign currency contracts (CAD)	30,507		40,566
Commodity contracts (MWhs)	2,248		1,828

The Company has elected to present net derivative assets and liabilities on the balance sheet as a right to setoff exists. For interest rate swaps, the Company either nets derivative assets and liabilities on a trade-by-trade basis or nets them in accordance with a master netting arrangement if such an arrangement exists with the counterparties. Foreign currency contracts are netted by currency in accordance with a master netting arrangement. The Company has a master netting arrangement for its commodity contracts for which no amounts were netted as of September 30, 2016 as each of the commodity contracts were in a gain position.

Gains and losses on derivatives not designated as hedges for the three and nine months ended September 30, 2016 and 2015 consisted of the following:



	Location of Loss (Gain) in the Statements of Operations	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	Location of Loss (Gain) in the Statements of Operations	2016			2015			2016			2015
Interest rate swaps	Interest expense, net	$	5,127		$	495		$	36,583		$	454
Foreign currency contracts	Loss on foreign currency exchange, net	(73		)	(4,565		)	(905		)	(1,705		)
Commodity contracts	Operating revenues, net	(3,095		)	(5,139		)	(11,009		)	(6,901		)

During the second quarter of 2016, the Company discontinued hedge accounting for interest rate swaps that were previously designated as cash flow hedges of the forecasted interest payments pertaining to variable rate project debt in the U.K. portfolio. The forecasted transactions were deemed probable of not occurring beyond June of 2017 as a result of an evaluation of the offers received related to the planned sale of the U.K. portfolio during the second quarter. The sale would either cause a repayment of the debt or the assumption of the debt by the buyer. This resulted in the reclassification of $16.9 million of losses from accumulated other comprehensive income into interest expense, net in the unaudited condensed consolidated statement of operations during the nine months ended September 30, 2016. The Company also prospectively discontinued hedge accounting for these interest rate swaps that were designated as cash flow hedges of the forecasted interest payments through June of 2017 as the forecasted transactions were deemed no longer probable of occurring. Subsequent to the discontinuation of hedge accounting, the Company recognized additional unrealized losses of $18.9 million pertaining to these interest rate swaps during the second and third quarter of 2016 that are also reported in interest expense, net in the unaudited condensed consolidated statement of operations.

Gains and losses recognized related to interest rate swaps designated as cash flow hedges for the three and nine months ended September 30, 2016 and 2015 consisted of the following:



	Three Months Ended September 30,
	Gain (Loss) Recognized in Other Comprehensive Income (Effective Portion)					Location of Loss Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)	Amount of Loss (Gain) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)				Amount of Loss (Gain) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
(In thousands)	2016		2015				2016		2015		2016			2015
Interest rate swaps	$	798	$	(1,135	)	Interest expense, net	$	3,114	$	129	$	(17	)	$	—
Commodity contracts	13,460		32,985			Operating revenues, net	50		—		382			—
Total	$	14,258	$	31,850			$	3,164	$	129	$	365		$	—



	Nine Months Ended September 30,
	Gain (Loss) Recognized in Other Comprehensive Income (Effective Portion)						Location of Loss Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)	Amount of Loss (Gain) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)					Amount of Loss (Gain) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
(In thousands)	2016			2015				2016			2015		2016		2015
Interest rate swaps	$	(39,547	)	$	(2,955	)	Interest expense, net	$	9,743		$	3,336	$	474	$	—
Commodity contracts	7,199			40,488			Operating revenues, net	(9,997		)	—		3,465		—
Total	$	(32,348	)	$	37,533			$	(254	)	$	3,336	$	3,939	$	—

As of September 30, 2016 and December 31, 2015, the Company had posted letters of credit in the amount of $18.0 million, respectively, as collateral related to certain commodity contracts. Certain derivative contracts contain provisions providing the counterparties a lien on specific assets as collateral. There was no cash collateral received or pledged as of September 30, 2016 and December 31, 2015 related to the Company's derivative transactions.

Derivatives Designated as Hedges

Interest Rate Swaps

The Company has interest rate swap agreements to hedge variable rate non-recourse debt. These interest rate swaps qualify for hedge accounting and were designated as a cash flow hedges. Under the interest rate swap agreements, the renewable energy facilities pay a fixed rate and the counterparties to the agreements pay a variable interest rate. The amounts deferred in other comprehensive income and reclassified into earnings during the three and nine months ended September 30, 2016 and 2015 related to the interest rate swaps are provided in the tables above. The loss expected to be reclassified into earnings over the next twelve months is approximately $6.5 million. The maximum term of outstanding interest rate swaps designated as hedges is 17 years.

As discussed in Note 8. Long-term debt, the Company experienced defaults under certain of its non-recourse financing agreements prior to the issuance of the financial statements for both the nine months ended September 30, 2016 and for the year ended December 31, 2015. As the Company's interest rate swap agreements contain cross-default provisions, $12.8 million and $7.6 million, respectively, of related liabilities have been reclassified to current as of September 30, 2016 and December 31, 2015. The Company is actively working with the counterparties to cure these defaults and obtain waivers as necessary. The Company does not currently expect any changes to the underlying cash flows as a result of these defaults and thus has determined that there is no impact to the swaps' qualification for hedge accounting and designation as cash flow hedges. If, as a result of cross-default, these interest rate swap agreements are terminated within the next twelve months, then the Company would reclassify an additional $1.6 million of losses accumulated in other comprehensive income into earnings.

Commodity Contracts

The Company has long-dated physically delivered commodity PPAs that hedge variability in cash flows associated with the sales of power from certain renewable energy facilities located in Texas. These commodity contracts qualify for hedge accounting and are designated as cash flow hedges. Accordingly, the effective portions of the change in fair value of these derivatives are reported in accumulated other comprehensive income and subsequently reclassified to earnings in the periods when the hedged transactions affect earnings. Any ineffective portions of the derivatives’ change in fair value are recognized currently in earnings. The amounts deferred in other comprehensive income and reclassified into earnings during the three and nine months ended September 30, 2016 and 2015 related to the commodity contracts are provided in the tables above. The gain expected to be reclassified into earnings over the next twelve months is approximately $4.8 million. The maximum term of outstanding commodity contracts designated as hedges is 13 years.

Derivatives Not Designated as Hedges

Interest Rate Swaps

The Company has interest rate swap agreements that economically hedge the cash flows for non-recourse debt. These interest rate swaps pay a fixed rate and the counterparties to the agreements pay a variable interest rate. The changes in fair value are recorded in interest expense, net in the unaudited condensed consolidated statement of operations as these hedges are not accounted for under hedge accounting.

As of September 30, 2016, the Company classified $33.2 million of related current derivative liabilities as liabilities related to assets held for sale. These pertain to interest rate swap agreements for the U.K. portfolio that were previously designated as cash flow hedges but are now being accounted for as derivatives not designated as hedges, with the changes in fair value being recorded through earnings. The impact of the change in accounting treatment has been discussed previously within this footnote.

Foreign Currency Contracts

The Company has foreign currency contracts in order to economically hedge its exposure to foreign currency fluctuations. The settlement of these hedges occurs on a quarterly basis through maturity. As these hedges are not accounted for under hedge accounting, the changes in fair value are recorded in loss on foreign currency exchange, net in the unaudited condensed consolidated statements of operations.

Commodity Contracts

The Company has commodity contracts in order to economically hedge commodity price variability inherent in certain electricity sales arrangements. If the Company sells electricity to an independent system operator market and there is no PPA available, it may enter into a commodity contract to hedge all or a portion of their estimated revenue stream. These commodity contracts require periodic settlements in which the Company receives a fixed price based on specified quantities of electricity and pays the counterparty a variable market price based on the same specified quantity of electricity. As these hedges are not accounted for under hedge accounting, the changes in fair value are recorded in operating revenues net, in the unaudited condensed consolidated statement of operations.

The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.

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Fair Value of Financial Instruments

Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value of assets and liabilities are determined using either unadjusted quoted prices in active markets (Level 1) or pricing inputs that are observable (Level 2) whenever that information is available and using unobservable inputs (Level 3) to estimate fair value only when relevant observable inputs are not available. The Company uses valuation techniques that maximize the use of observable inputs. Assets and liabilities are classified in their entirety based on the lowest priority level of input that is significant to the fair value measurement. Where observable inputs are available for substantially the full term of the asset or liability, the instrument is categorized in Level 2. If the inputs into the valuation are not corroborated by market data, in such instances, the valuation for these contracts is established using techniques including extrapolation from or interpolation between actively traded contracts as well as calculation of implied volatilities. When such inputs have a significant impact on the measurement of fair value, the instrument is categorized as Level 3. The Company regularly evaluates and validates the inputs used to determine fair value of Level 3 contracts by using pricing services to support the underlying market price of commodity.

The Company uses a discounted cash flow valuation technique to fair value its derivative assets and liabilities. The primary inputs in the valuation models for commodity contracts are market observable forward commodity curves and risk-free discount rates and to a lesser degree credit spreads and volatilities. The primary inputs into the valuation of interest rate swaps and foreign currency contracts are forward interest rates, foreign currency exchange rates, and to a lesser degree credit spreads.

Recurring Fair Value Measurements

The following table summarizes the financial instruments measured at fair value on a recurring basis classified in the fair value hierarchy (Level 1, 2 or 3) based on the inputs used for valuation in the consolidated balance sheets:



(In thousands)	As of September 30, 2016								As of December 31, 2015
Assets	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Interest rate swaps	$	—	$	—	$	—	$	—	$	—	$	487	$	—	$	487
Commodity contracts	—		41,808		56,891		98,699		—		43,341		63,154		106,495
Foreign currency contracts	—		1,581		—		1,581		—		5,190		—		5,190
Total derivative assets	$	—	$	43,389	$	56,891	$	100,280	$	—	$	49,018	$	63,154	$	112,172
Liabilities
Interest rate swaps	$	—	$	65,268	$	—	$	65,268	$	—	$	20,185	$	—	$	20,185
Foreign currency contracts	—		—		—		—		—		2,326		—		2,326
Total derivative liabilities	$	—	$	65,268	$	—	$	65,268	$	—	$	22,511	$	—	$	22,511

The Company's interest rate swaps, commodity contracts not designated as hedges and foreign currency contracts are considered Level 2, since all significant inputs are corroborated by market observable data. The Company's commodity contracts designated as hedges are considered Level 3 as they contain significant unobservable inputs. There were no transfers in or out of Level 1, Level 2 and Level 3 during the nine months ended September 30, 2016.

The following table reconciles the changes in the fair value of derivative instruments classified as Level 3 in the fair value hierarchy:



	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2016			2015			2016			2015
Beginning balance	$	43,763		$	(14,676	)	$	63,154		$	—
Realized and unrealized gains (losses):
Included in Other Comprehensive Income	13,511			32,985			(2,798		)	40,488
Included in Operating revenues	(433		)	—			6,532			—
Purchases (acquisition of commodity contracts)	—			—			—			(22,179		)
Settlements	50			—			(9,997		)	—
Balance as of September 30	$	56,891		$	18,309		$	56,891		$	18,309

The significant unobservable inputs used in the valuation of the Company's commodity contracts categorized as Level 3 of the fair value hierarchy as of September 30, 2016 are as follows:



(In thousands, except range)	Fair Value as of September 30, 2016
Transaction Type	Assets		Liabilities		Valuation Technique	Unobservable Inputs	Range
Commodity contracts - power	$	56,891	$	—	Discounted cash flow	Forward price (per MWh)	$	15.4		-	$	85.5
					Option model	Volatilities	3.3		%	-	9.4		%

The sensitivity of the Company's fair value measurements to increases (decreases) in the significant unobservable inputs is as follows:



Significant Unobservable Input	Position	Impact on Fair Value Measurement
Increase (decrease) in forward price	Forward sale	Decrease (increase)
Increase (decrease) in implied volatilities	Purchase option	Increase (decrease)

The Company measures the sensitivity of the fair value of its Level 3 commodity contracts to potential changes in commodity prices using a mark-to-market analysis based on the current forward commodity prices and estimates of the price volatility. An increase in power forward prices will produce a mark-to-market loss, while a decrease in prices will result in a mark-to-market gain.

Fair Value of Debt

The carrying amount and estimated fair value of the Company's long-term debt as of September 30, 2016 and December 31, 2015 is as follows:



	As of September 30, 2016				As of December 31, 2015
(In thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt, including current portion	$	4,012,266	$	4,131,352	$	4,562,649	$	4,357,322

The fair value of the Company's long-term debt, except the senior notes was determined using inputs classified as Level 2 and a discounted cash flow approach using market rates for similar debt instruments. The fair value of the senior notes is based on market price information which is classified as a Level 1 input. They are measured using the last available trades at the end of each respective period. The fair value of the Senior Notes due 2023 and the Senior Notes due 2025 were 103.31% and 104.81% of face value as of September 30, 2016, respectively, and 83.13% and 80.75% of face value as of December 31, 2015, respectively. The fair value is not indicative of the amount that the Company would have to pay to redeem these notes as they are not callable at this time.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

Stockholders' Equity

9 Months Ended

Sep. 30, 2016

Stockholders' Equity

STOCKHOLDERS' EQUITY

As of September 30, 2016, the following shares of TerraForm Power were outstanding:



Share Class:	Shares Outstanding	Shareholder(s)
Class A common stock	91,346,867	*
Class B common stock	48,202,310	SunEdison
Total Shares	139,549,177

———

Class A common stockholders are comprised of public and private investors, executive officers, management and personnel who provide services to the Company. Shares of Class A common stock outstanding exclude 181,834 shares of common stock held in treasury. The total par value of Class A common stock reflected on the unaudited condensed consolidated balance sheet and unaudited condensed consolidated statement of stockholders' equity as of September 30, 2016 includes 181,834 shares of stock held in treasury and excludes 459,800 shares of unvested restricted Class A common stock awards (see Note 13. Stock-based Compensation).

Reduction in SunEdison’s Ownership of Class B Shares

On January 22, 2016, TerraForm Power issued 12,161,844 shares of Class A common stock to affiliates of the D.E. Shaw group, Madison Dearborn Capital Partners IV, L.P. and Northwestern University and Terra LLC issued 12,161,844 Class A units of Terra LLC to TerraForm Power upon conversion of 12,161,844 Class B shares of TerraForm Power common stock and 12,164,844 Class B units of Terra LLC held by SunEdison. After giving effect to the conversion, SunEdison indirectly owns 48,202,310 Class B shares of TerraForm Power and 48,202,310 Class B units of Terra LLC.

Stockholder Protection Rights Agreement

On July 24, 2016, the Company's board of directors adopted a Stockholder Protection Rights Agreement (the “Rights Agreement”) and declared a dividend of one Right on each outstanding share of TerraForm Power Class A common stock. The record date to determine which stockholders are entitled to receive the Rights is August 4, 2016. The Rights Agreement was adopted in response to the potential sale of a significant equity stake in the Company by SunEdison and the potential accumulation of TerraForm Power Class A shares.

Dividends

TerraForm Power has not declared or paid a dividend for the fourth quarter of 2015 or for any of the quarters in 2016. As a result of the SunEdison Bankruptcy, the limitations on the Company's ability to access the capital markets for its corporate debt and equity securities and other risks that the Company faces as detailed in this report, the Company's management believes it is prudent to defer any decisions on paying dividends to its shareholders for the time being.

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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-Section E

Reference 15: http://www.xbrl.org/2003/role/presentationRef
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-based Compensation

9 Months Ended

Sep. 30, 2016

Stock-based Compensation

STOCK-BASED COMPENSATION

The Company has equity incentive plans that provide for the award of incentive and nonqualified stock options, restricted stock awards ("RSAs") and restricted stock units ("RSUs") to personnel and directors who provide services to the Company, including personnel and directors who also provide services to SunEdison. As of September 30, 2016, an aggregate of 3,690,225 shares of Class A common stock were available for issuance under these plans. Upon exercise of stock options or the vesting of the RSUs, the Company will issue shares that have been previously authorized to be issued.

Stock-based compensation costs related to equity awards in the Company's stock are allocated to the Company and SunEdison based on the relative percentage of time that the personnel and directors spend providing services to the respective companies. The amount of stock-based compensation expense related to equity awards in the Company's stock which has been allocated to the Company was $0.8 million and $2.1 million during the three and nine months ended September 30, 2016, respectively, as compared to $2.6 million and $8.9 million for the same periods in the prior year, and is reflected in the unaudited condensed consolidated statements of operations within general and administrative expenses. The amount of stock-based compensation cost related to equity awards in the Company's stock which has been allocated to SunEdison was $0.9 million and $2.5 million for the three and nine months ended September 30, 2016, respectively, as compared to $2.0 million and $2.3 million for the same periods in the prior year and is recognized as a distribution to SunEdison within Net SunEdison investment on the unaudited condensed consolidated statement of stockholders' equity with no impact to the Company's unaudited condensed consolidated statements of operations. Similarly, stock-based compensation costs related to equity awards in the stock of SunEdison for personnel and directors who provide services to the Company are allocated to the Company based on the relative percentage of time that the personnel and directors spend providing services to the Company. The amount of stock-based compensation expense related to equity awards in the stock of SunEdison that was allocated to the Company was $0.6 million and $1.8 million for the three and nine months ended September 30, 2016, respectively, as compared to $0.1 million and $1.3 million for the same periods in the prior year and is reflected in the unaudited condensed consolidated statements of operations within general and administrative expenses - affiliate and has been treated as an equity contribution from SunEdison within Net SunEdison investment on the unaudited condensed consolidated statement of stockholders' equity.

Restricted Stock Awards

RSAs provide the holder with immediate voting rights, but are restricted in all other respects until vested. Upon a termination of employment for any reason, any unvested shares of Class A common stock held by the terminated participant will be forfeited. All unvested RSAs are paid dividends and distributions.

The following table presents information regarding outstanding RSAs as of September 30, 2016, and changes during the nine months ended September 30, 2016:



	Number of RSAs Outstanding		Weighted Average Grant Date Fair Value Per Share		Aggregate Intrinsic Value (in millions)
Balance at January 1, 2016	1,859,616		$	2.93
Converted	(619,063	)	2.81
Forfeited	(874,358	)	2.14
Balance at September 30, 2016	366,195		$	8.51	$	5.1

No RSAs were granted during the nine months ended September 30, 2016 or 2015. As of September 30, 2016, $0.1 million of total unrecognized compensation cost related to these awards is expected to be recognized over a period of approximately 0.3 years.

Restricted Stock Units

RSUs will not entitle the holders to voting rights and holders of the RSUs will not have any right to receive dividends or distributions. The following table presents information regarding outstanding RSUs as of September 30, 2016, and changes during the nine months ended September 30, 2016:



	Number of RSUs Outstanding		Aggregate Intrinsic Value (in millions)		Weighted Average Remaining Contractual Life (in Years)
Balance at January 1, 2016	3,208,394
Granted	163,595
Converted	(315,766	)
Forfeited	(1,233,160	)
Balance at September 30, 2016	1,823,063		$	25.4	1.1

As of September 30, 2016, $18.3 million of total unrecognized compensation cost related to RSUs is expected to be recognized by SunEdison and the Company over a weighted average period of approximately 2.1 years. The weighted-average fair value of RSUs on the date of grant was $11.05 and $33.69 for the nine months ended September 30, 2016 and 2015, respectively.

On August 11, 2016, the Company awarded 128,272 RSUs to certain employees and executive officers of SunEdison and the Company. These are time-based awards which will vest on the following schedule: 25% after one year, 25% after two years, and 50% after three years. The grant-date fair value of these awards was $1.6 million which will be recognized as compensation cost by SunEdison and the Company on a straight-line basis over the three year service period.

Stock Options

The following table presents information regarding outstanding stock options as of September 30, 2016 and changes during the period then ended:



	Number of Stock Options Outstanding		Weighted Average Exercise Price Per Share
Balance as of January 1, 2016	56,250		$	29.31
Expired	(56,250	)	29.31
Balance as of September 30, 2016	—		$	—

As of September 30, 2016, there was no unrecognized compensation cost in relation to outstanding stock options.

Loss Per Share

9 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

Loss Per Share

LOSS PER SHARE

Loss per share (“EPS”) is based upon the weighted average shares outstanding. Unvested RSAs that contain non-forfeitable rights to dividends are treated as participating securities and are included in the EPS computation using the two-class method, to the extent that there are undistributed earnings available as such securities do not participate in losses.

Basic and diluted loss per share of the Company's Class A common stock for the three and nine months ended September 30, 2016 and 2015 was calculated as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands, except per share amounts)	2016			2015			2016			2015
Basic and diluted loss per share¹:
Net loss attributable to Class A common stockholders	$	(26,171	)	$	(820	)	$	(47,559	)	$	(22,136	)
Less: dividends paid on Class A shares and participating RSAs	—			(26,797		)	—			(46,879		)
Undistributed loss attributable to Class A shares	$	(26,171	)	$	(27,617	)	$	(47,559	)	$	(69,015	)

Weighted average basic and diluted Class A shares outstanding	90,860			77,522			89,140			61,777

Distributed earnings per share	$	—		$	0.33		$	—		$	0.73
Undistributed loss per share	(0.29		)	(0.36		)	(0.53		)	(1.12		)
Basic and diluted loss per share	$	(0.29	)	$	(0.03	)	$	(0.53	)	$	(0.39	)

———

(1)

The computations for diluted loss per share of the Company's Class A common stock for the three and nine months ended September 30, 2016 exclude 459,800 of unvested RSAs and 1,823,063 of unvested RSUs because the effect would have been anti-dilutive. The computations for diluted loss per share of the Company's Class A common stock for the three and nine months ended September 30, 2015 exclude 2,407,483 of unvested RSAs, 2,215,373 of unvested RSUs and 150,000 options to purchase the Company's shares because the effect would have been anti-dilutive.

Non-controlling Interests

9 Months Ended

Sep. 30, 2016

Noncontrolling Interest [Abstract]

Non-controlling Interests

NON-CONTROLLING INTERESTS

Non-controlling Interests

Non-controlling interests represent the portion of net assets in consolidated entities that are not owned by the Company. The following table presents the non-controlling interest balances reported in stockholders’ equity in the unaudited condensed consolidated balance sheets as of September 30, 2016 and December 31, 2015:



(In thousands)	September 30, 2016		December 31, 2015
SunEdison's non-controlling interest in Terra LLC	$	700,298	$	897,409
Non-controlling interests in renewable energy facilities	810,841		858,117
Total non-controlling interests	$	1,511,139	$	1,755,526

As of September 30, 2016, TerraForm Power owned 65.5% of Terra LLC and consolidated the results of Terra LLC through its controlling interest, with SunEdison's 34.5% interest shown as a non-controlling interest.

Redeemable Non-controlling Interests

Non-controlling interests in subsidiaries that are redeemable either at the option of the holder or at fixed and determinable prices at certain dates are classified as redeemable non-controlling interests in subsidiaries between liabilities and stockholders' equity in the unaudited condensed consolidated balance sheets. The redeemable non-controlling interests in subsidiaries balance is determined using the hypothetical liquidation at book value method for the VIE funds or allocation of share of income or losses in other subsidiaries subsequent to initial recognition; however, the non-controlling interests balance cannot be less than the estimated redemption value.

The following table presents the activity of the redeemable non-controlling interest balance reported on the unaudited condensed consolidated balance sheet for the nine months ended September 30, 2016:



	Redeemable Non-controlling Interests
(In thousands)	Capital			Retained Earnings		Total
Balance as of December 31, 2015	$	167,199		$	8,512	$	175,711
Distributions	(8,420		)	—		(8,420		)
Acquisition accounting adjustment to redeemable non-controlling interest in acquired renewable energy facility	(780		)	—		(780		)
Net income	—			16,374		16,374
Balance as of September 30, 2016	$	157,999		$	24,886	$	182,885

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2016
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	COMMITMENTS AND CONTINGENCIES Letters of Credit The Company's customers, vendors and regulatory agencies often require the Company to post letters of credit in order to guarantee performance under relevant contracts and agreements. The Company is also required to post letters of credit to secure obligations under various swap agreements and leases and may, from time to time, decide to post letters of credit in lieu of cash deposits in reserve accounts under certain financing arrangements. The amount that can be drawn under some of these letters of credit may be increased from time to time subject to the satisfaction of certain conditions. As of September 30, 2016, the Company had outstanding letters of credit under the Revolver of $68.3 million and outstanding project-level letters of credit of $140.6 million. Guarantee Agreements The Company and its subsidiaries have provided guarantees to certain of its institutional tax equity investors and financing parties in connection with its tax equity financing transactions. These guarantees do not guarantee the returns targeted by the tax equity investors or financing parties, but rather support any potential indemnity payments payable under the tax equity agreements, including related to management of tax partnerships and recapture of tax credits or renewable energy grants in connection with transfers of the Company’s direct or indirect ownership interests in the tax partnerships to entities that are not qualified to receive those tax benefits. The Company and its subsidiaries have also provided guarantees in connection with acquisitions of third party assets or to support project contractual obligations, including renewable energy credit sales agreements, and may provide additional guarantees in connection with future acquisitions or project contractual obligations. The Company and its subsidiaries have also provided other capped or limited contingent guarantees and other support obligations with respect to certain project-level indebtedness. Commitments to Acquire Renewable Energy Facilities As of September 30, 2016, the Company did not have any open commitments to acquire renewable energy facilities from SunEdison, other than as described with respect to the Invenergy Wind Option Agreements (see Note 17. Related Parties for further discussion). The Company had a commitment of $58.7 million to acquire two wind power plants with a combined nameplate capacity of 98.6 MW from Invenergy Wind that expired on July 1, 2016. On January 20, 2017, Invenergy Wind provided notice of termination of the purchase agreement related to these power plants, and as a result, the Company does not expect to purchase these facilities. Legal Proceedings The Company is not a party to any legal proceedings other than various administrative and regulatory proceedings arising in the ordinary course of the Company's business or as described below. While the Company cannot predict with certainty the ultimate resolution of such proceedings or other claims asserted against the Company, certain of the claims, if adversely concluded, could result in substantial damages or other relief. Stockholder Derivative Lawsuits On December 28, 2015, a verified stockholder derivative complaint (Central Laborers’ Pension Fund et al. v. Peter Blackmore et al., Case No. 11847) on behalf of the Company, was filed in the Court of Chancery in the State of Delaware against the Company, as nominal defendant, and SunEdison, and certain individual directors of the Company, as defendants (the “Central Laborers’ Proceeding”). The lawsuit alleges that certain members of the Company’s board of directors breached their fiduciary duties of loyalty and care by agreeing to enter into an agreement (the “July Vivint Transaction”) with SunEdison on July 20, 2015 to acquire certain residential rooftop solar assets (the “Vivint Assets”) that SunEdison was acquiring as part of SunEdison’s acquisition of Vivint Solar, Inc. (“Vivint Solar”), by agreeing to terms that were grossly unfair to the Company and designed for the benefit of SunEdison, thereby failing to act in the best interests of the Company. The lawsuit further alleges that the approval of the modifications to the Company’s agreements under the July Vivint Transaction (the “December Vivint Transaction”) by the board of directors of the Company was on terms that are unfair to the Company and improperly favor SunEdison to the detriment of the Company and its stockholders. The complaint further alleges that SunEdison, as the Company’s controlling stockholder, breached its fiduciary duty not to advance SunEdison’s interest at the expense of the Company’s interests by causing the Company to (i) overpay to acquire assets in both the July Vivint Transaction and in the December Vivint Transaction in order to finance SunEdison’s purchase of Vivint Solar, and (ii) commit to purchase future residential solar generation facilities from SunEdison over the next five years so that SunEdison could use the Company’s commitment to acquire a loan to partially cover its financial obligations in its transaction to acquire Vivint Solar. The plaintiffs in the lawsuit seek damages for the Company for the damages the Company has and will suffer as a result of the defendants’ breaches of fiduciary duty. The lawsuit also seeks an award of the plaintiffs’ costs and disbursements, including attorneys’ fees and expenses. On January 12, 2016, a verified stockholder derivative complaint (Appaloosa Investment Limited Partnership I et al. v. SunEdison, Inc. et al., Case No. 11898) on behalf of the Company was filed in the Court of Chancery in the State of Delaware against the Company, as nominal defendant, and against SunEdison and three of the Company’s individual directors, as defendants (the “Appaloosa Proceeding”). The lawsuit alleges that SunEdison, as the Company’s controlling stockholder, breached its fiduciary duties to the Company and its minority stockholders by causing the Company, amongst other things, to (i) enter into an amended transaction to acquire the Vivint Assets from SunEdison for its benefits at the expense of the Company’s interests, (ii) purchase the Vivint Assets at an unfair price, and (iii) agree to an unfair Take/Pay arrangement so that SunEdison could use such commitment by the Company to acquire a loan to partially cover its financial obligations in connection with its own contemplated merger with Vivint Solar, for which SunEdison never compensated the Company. The lawsuit also contends that the current members of the Corporate Governance and Conflicts Committee of the Company’s board of directors breached their fiduciary duty of loyalty to the Company’s minority stockholders by, amongst other things, approving the transaction on terms that are unfair to the Company and improperly favor SunEdison to the detriment of the Company and its stockholders. The lawsuit seeks to enjoin the completion of the transaction, rescission of such transaction or, alternatively, awarding rescissory damages, in the event it is consummated. The lawsuit also seeks an award of the plaintiffs’ costs and disbursements, including reasonable attorneys’ fees and expenses. On January 26, 2016, the Delaware Chancery Court consolidated the Appaloosa Proceeding and the Central Laborers’ Proceeding into a single proceeding and named Appaloosa Investment Limited Partnership I as lead plaintiff and named counsel to the lead plaintiff as lead counsel (the “Consolidated Proceeding”). On February 16, 2016, the Delaware Chancery Court held a hearing on the plaintiff’s motion for a preliminary injunction of the Vivint transaction, and on February 26, 2016, the Chancery Court issued a bench ruling denying plaintiff’s motion for a preliminary injunction. In that ruling, the court concluded that the plaintiffs had not demonstrated that irreparable harm would result if the court failed to preliminarily enjoin the Company’s purchase of the Purchased Subsidiaries under the Amended Purchase Agreement with SunEdison and the Company’s entry into the take/pay transaction pursuant to the Amended and Restated Interim Agreement with SunEdison (collectively, the “Challenged Transaction”). Following the termination of the Vivint acquisition, the Plaintiffs filed an amended complaint alleging that SunEdison and certain director defendants breached their fiduciary duties by engaging in the Challenged Transaction and associated management changes. The Plaintiffs amended complaint sought money damages to be determined at trial and equitable relief intended to undo those management changes and to require that the Conflicts Committee of the Company be chosen by the majority of the Company’s Class A shareholders. On April 20, 2016, the Plaintiffs filed a second amended complaint that added allegations against certain of the Company’s directors for failing to appoint new members to the Conflicts Committee following the appointment of the current members of the Conflicts Committee to the then newly created Office of the Chairman. Effective April 21, 2016, the Office of the Chairman was abolished, and the board of directors of the Company confirmed and ratified that Peter Blackmore was serving as the Company’s Chairman and Interim Chief Executive Officer. On June 20, 2016, the Defendants filed a briefing in support of motions to dismiss the case. On August 25, 2016, the parties informed the Delaware Chancery Court that they are discussing settlement. In light of these settlement discussions, the court suspended the deadlines associated with the pending motions to dismiss. On September 27, 2016, the Company reached a settlement agreement with Appaloosa Investment Limited Partnership I to resolve its stockholder derivative suit, as well as derivative claims by stockholders relating to the Vivint Solar transaction. On December 19, 2016, the Chancery Court approved the proposed settlement. The period for appeals has now expired. Securities Class Action On April 4, 2016, a securities class action under federal securities laws (Chamblee v. TerraForm Power, Inc., et al., Case No. 1:16-cv-00981-JFM) was filed in the United States District Court for the District of Maryland against the Company and two of its former officers (one of which was also a director of the Company) asserting claims under Section 10(b) and 20(a) of the Securities and Exchange Act of 1934 and SEC Rule 10b-5 on behalf of a putative class. The Complaint alleges that the defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies, including with respect to disclosures regarding SunEdison’s internal controls and the Company's reliance on SunEdison. An amended complaint was filed on September 26, 2016 and a former officer and director of the Company were added as defendants. On October 4, 2016, the Judicial Panel on Multidistrict Litigation transferred this matter to the U.S. District Court for the Southern District of New York (SDNY) for consolidated or coordinated pretrial proceedings. On December 19, 2016, an initial case management conference was held in the multidistrict litigation proceedings in the SDNY. The Court entered an order requiring all parties to the multidistrict litigation to mediate and entered a partial stay of all proceedings through March 31, 2017. The parties attended an initial mediation in February of 2017 and the Company expects to continue the mediation process for the time being. The parties are to file a status report on the mediation by March 17, 2017. While the Company cannot predict with certainty the ultimate resolution of this proceeding, the Company believes each of the allegations in this complaint are without merit and intends to contest these allegations vigorously. Settlement Agreement with Latin America Power Holding On April 20, 2016, TerraForm Power and Terra LLC (together, the “TerraForm Power Parties”) entered into a Settlement and Mutual Release Agreement (the “Settlement Agreement”) with BTG Pactual Brazil Infrastructure Fund II, L.P., P2 Brasil Private Infrastructure Fund II, L.P., P2 Fund II LAP Co-Invest, L.P., P2 II LAP Co-Invest UK, L.P., GMR Holding B.V. (collectively, the “LAP Shareholders”), and Roberto Sahade, LAP’s chief executive officer (together with the LAP Shareholders and the TerraForm Power Parties, the “Parties”). The Settlement Agreement resolves the disputes between the Parties in connection with the previously announced termination of that certain Amended and Restated Share Purchase Agreement, dated May 19, 2015 (the “Share Purchase Agreement”), among SunEdison Holdings Corporation and the LAP Shareholders, and the guarantee issued by TerraForm Power in connection therewith, relating to the acquisition of Latin America Power Holding, B.V. (“LAP”), that are the subject of an arbitration proceeding (the “Arbitration”). On March 3, 2016, TerraForm Power, SunEdison Holdings Corporation, SunEdison, Inc. and the LAP Shareholders entered into a settlement agreement with respect to the Arbitration (the “March Settlement Agreement”). Subsequent to the execution of the March Settlement Agreement, SunEdison Holdings Corporation failed to make a required payment under the terms of the agreement and as a result the LAP Shareholders recommenced the Arbitration against all parties, including TerraForm Power. Pursuant to the Settlement Agreement, TerraForm Power made a one-time payment to LAP in the amount of $10.0 million in April of 2016 in exchange for and contingent on the termination of the Arbitration against TerraForm Power. This amount was accrued for as of December 31, 2015. None of the Parties has admitted to any wrongdoing or liability with respect to the claims asserted in the Arbitration, and the Parties have granted each other full releases of any further obligations under the Share Purchase Agreement and related agreements (including the TerraForm Power guarantee). The Settlement Agreement does not impact any claims that the LAP Shareholders or the TerraForm Power Parties may have against SunEdison, Inc. and SunEdison Holdings Corporation in connection with the transactions described above. Claim relating to First Wind Acquisition On May 27, 2016, D.E. Shaw Composite Holdings, L.L.C. and Madison Dearborn Capital Partners IV, L.P., as the representatives of the sellers (the “First Wind Sellers”) filed an amended complaint for declaratory judgment against the Company and Terra LLC in the Supreme Court of the State of New York alleging breach of contract with respect to the Purchase and Sale Agreement, dated as of November 17, 2014 (the “FW Purchase Agreement”) between, among others, SunEdison, the Company and Terra LLC and the First Wind Sellers. The amended complaint alleges that Terra LLC and SunEdison became jointly obligated to make $231.0 million in earn-out payments in respect of certain development assets SunEdison acquired from the First Wind Sellers under the FW Purchase Agreement, when those payments were purportedly accelerated by SunEdison's bankruptcy and by the resignations of two SunEdison employees. The amended complaint further alleges that the Company, as guarantor of certain Terra LLC obligations under the FW Purchase Agreement, is liable for this sum. Defendants filed a motion to dismiss the amended complaint on July 5, 2016, on the ground that, among other things, SunEdison is a necessary party to this action. Plaintiffs filed an opposition to the motion to dismiss on August 22, 2016. Defendants filed their reply on September 12, 2016. A hearing on the motion to dismiss took place on January 24, 2017. The Company is awaiting a decision on the motion to dismiss. The Company believes the First Wind Sellers’ allegation is without merit and will contest the claim and allegations vigorously. However, the Company cannot predict with certainty the ultimate resolution of any proceedings brought in connection with such a claim. Whistleblower Complaint By Francisco Perez Gundin On May 18, 2016, the Company’s former Director and Chief Operating Officer, Francisco Perez Gundin (“Perez”), filed a Complaint against the Company, TerraForm Global, Inc., and certain individuals, with the United States Department of Labor. The Complaint alleges that Defendants engaged in a retaliatory termination of Mr. Perez's employment after he allegedly voiced concerns to SunEdison’s Board of Directors about public representations made by SunEdison officers regarding SunEdison’s liquidity position, and after he allegedly voiced his opposition to transactions that he alleges were self-interested and which he alleges SunEdison forced on the Company. He alleges that the Company participated in SunEdison’s retaliatory termination by constructively terminating his position as Chief Operating Officer of the Company in connection with SunEdison’s constructive termination of his employment. He seeks lost wages, bonuses, benefits, and other money that he alleges that he would have received if he had not been subjected to the allegedly retaliatory termination. The Company’s Position Statement in response to the Complaint was filed in October of 2016. On February 21, 2017, Mr. Perez filed Gundin v. TerraForm Global, Inc. et al. against TerraForm Power, TerraForm Global, Inc. and certain individuals as defendants in the United States District Court for the District of Maryland. The complaint asserts claims for retaliation, breach of the implied covenant of good faith and fair dealing and promissory estoppel based on the same allegations in Mr. Perez’s Department of Labor complaint. The Company is in the preliminary stages of reviewing the allegations made in the complaints. As a result, the Company is unable to predict with certainty the ultimate resolution of these proceedings. Whistleblower Complaint By Carlos Domenech Zornoza On May 10, 2016, the Company’s former Director and Chief Executive Officer, Carlos Domenech Zornoza (“Domenech”), filed a Complaint against the Company, TerraForm Global, Inc., and certain individuals, with the United States Department of Labor. The Complaint alleges that Defendants engaged in a retaliatory termination of Mr. Domenech’s employment on November 20, 2015 after he allegedly voiced concerns to SunEdison’s Board of Directors about public representations made by SunEdison officers regarding SunEdison’s liquidity position, and after he allegedly voiced his opposition to transactions that he alleges were self-interested and which he alleges SunEdison forced on the Company. He alleges that the Company participated in SunEdison’s retaliatory termination by terminating his position as Chief Executive Officer of the Company in connection with SunEdison’s termination of his employment. He seeks lost wages, bonuses, benefits, and other money that he alleges that he would have received if he had not been subjected to the allegedly retaliatory termination. The Company’s Position Statement in response to the Complaint was filed in October of 2016. On February 21, 2017, Mr. Domenech filed Domenech Zornoza v. TerraForm Global, Inc. et al. against TerraForm Power, TerraForm Global, Inc. and certain individuals as defendants in the United States District Court for the District of Maryland. The complaint asserts claims for retaliation, breach of the implied covenant of good faith and fair dealing and promissory estoppel based on the same allegations in Mr. Domenech’s Department of Labor complaint. The Company is in the preliminary stages of reviewing the allegations made in the complaints. As a result, the Company is unable to predict with certainty the ultimate resolution of these proceedings. Eastern Maine Electric Cooperative Litigation On November 21, 2016, the Penobscot County Maine Superior Court entered judgment in the amount of $13.6 million against First Wind Holdings, LLC (“First Wind”), an indirect subsidiary of SunEdison, Inc., and several subsidiaries of the Company. The plaintiff filed judgment liens against the defendants which will stay outstanding through the appeals process. The action involved a claimed breach of contract arising out of a contract between First Wind and Eastern Maine Electric Cooperative, Inc. (“EMEC”), under which First Wind, on behalf of itself and its then wholly-owned subsidiaries, agreed to negotiate a definitive agreement to transfer to EMEC a portion of a transmission line. The transmission line is owned, in part, by one of the Company's subsidiaries, and is the sole means of transmitting power from the Rollins, Stetson I, and Stetson II wind farms. The subsidiaries that own these wind farms and the transmission line were acquired by the Company as part of the Company's acquisition of certain of the operating assets of First Wind Holdings. The Company believes all the defendants acted in good faith and the Company’s subsidiaries that are defendants in the action intend to continue to vigorously contest the allegations and appeal the verdict. The judgment was for money damages and, if upheld on appeal, would not be expected to result in a loss of the use of the transmission line by the Company's subsidiaries. The total amount of the judgment was accrued for as of December 31, 2015 and September 30, 2016. Avoidance Actions On November 7, 2016, the unsecured creditors’ committee in the SunEdison Bankruptcy filed a motion with the bankruptcy court seeking standing to assert against the Company, on behalf of SunEdison, avoidance claims arising from payments and other intercompany transactions between the Company and SunEdison dating back to the Company’s initial public offering and including drop-down transactions involving the sale of renewable energy facilities by SunEdison to the Company. The Company’s objection to the standing motion was filed on November 29, 2016. The Company expects to vigorously contest this standing motion and, if standing is granted, the underlying avoidance claims. As described in Note 17. Related Parties, TerraForm Power has been engaged in settlement discussions with SunEdison to resolve, among other matters, intercompany claims in connection with the SunEdison Bankruptcy. While these settlement discussions remain ongoing and there can be no guarantee that a settlement will be reached, the Company believes that a successful settlement could facilitate the Company’s exploration of strategic alternatives and the U.K. Transaction. Any settlement would be subject to the approval of the bankruptcy court in the SunEdison Bankruptcy. Given the preliminary nature of the claims, the Company is unable to provide any assurances as to the ultimate outcome of these claims or that an adverse resolution of a legal proceeding, if commenced, would not have a material adverse effect on the Company’s consolidated financial position and results of operations.

Related Parties

9 Months Ended

Sep. 30, 2016

Related Parties

RELATED PARTIES

SunEdison Bankruptcy

The Company is not a part of the SunEdison Bankruptcy and has no plans to file for bankruptcy itself. The Company does not rely substantially on SunEdison for funding or liquidity and believes that it will have sufficient liquidity to support its ongoing operations. The Company believes its equity interests in its renewable energy facilities that are legally owned by the Company’s subsidiaries are not available to satisfy the claims of the creditors of the SunEdison Bankruptcy. However, there is a risk that an interested party in the SunEdison Bankruptcy could request that the assets and liabilities of the Company be substantively consolidated with SunEdison and that the Company and/or its assets and liabilities be included in the SunEdison Bankruptcy. While it has not been requested to date and the Company believes there is no basis for substantive consolidation in its circumstances, the Company cannot assure you that substantive consolidation will not be requested in the future or that the bankruptcy court would not consider it.

As discussed below, the Company and SunEdison are parties to multiple agreements, including the Management Services Agreement ("MSA"), project-level O&M and asset management agreements, engineering procurement and construction agreements, and other support agreements, including modules warranties with respect to SunEdison produced modules. Moreover, at the time of the Company's IPO, SunEdison and the Company entered into the "Sponsor Arrangement," a complex contractual arrangement setting forth the terms and conditions of SunEdison's sponsorship of the Company, which included, among other things, the MSA, Interest Payment Agreement and Support Agreement. The Company believes that the Sponsor Arrangement comprises a single integrated transaction. The agreements comprising the Sponsor Arrangement are set forth in separate documents and discussed individually in this Form 10-Q. However, the elements of the Sponsor Arrangement are closely related and a default under one element may be a defense to, or excuse performance under, another element. SunEdison and its various stakeholders have expressed disagreement with this view of the Sponsor Arrangements and can be expected to contest any such assertion in connection with the SunEdison Bankruptcy.

During the SunEdison Bankruptcy, SunEdison has not performed substantially as obligated under its agreements with the Company, including under the Sponsor Arrangement and certain O&M and asset management arrangements. SunEdison's failure to perform substantially as obligated under its agreements with the Company, including under the Sponsor Arrangement, project-level O&M and asset management agreements and other support agreements, may have a material adverse effect on the Company. Despite these adverse effects, the Company expects that it will be able to operate its business without the support of SunEdison pursuant to the plans for transitioning away from reliance on SunEdison that it is in the process of implementing.

Settlement Discussions with SunEdison

On September 25, 2016, the Company filed its initial proof of claim in the SunEdison Bankruptcy, which was amended on October 7, 2016. As previously disclosed, the Company has been engaged in settlement discussions with SunEdison to resolve, among other matters, intercompany claims in connection with the SunEdison Bankruptcy. On January 20, 2017, TerraForm Power and Terra LLC, entered into a memorandum of understanding (the “MOU”) with SunEdison, TerraForm Global, Inc. (“TerraForm Global” and, together with TerraForm Power, the “Yieldcos”) and TerraForm Global, LLC (“GLBL LLC”), a subsidiary of TerraForm Global. The MOU outlines potential settlements of claims (i) between SunEdison and its affiliated debtors and non-debtors (excluding the Yieldcos) and their respective employees, officers, directors, agents and representatives in their capacities as such (the "SunEdison Parties"), on the one hand, and TerraForm Power (for itself and on behalf of Terra LLC and Terra Operating LLC) (collectively, "TERP"), and TERP's employees, officers, directors, agents and representatives in their capacities as such, on the other hand (the "TERP Intercompany Claims"); and (ii) between the SunEdison Parties, on the one hand, and TerraForm Global (for itself and on behalf of GLBL LLC and TerraForm Global Operating, LLC) (collectively, “GLBL”) and GLBL' s employees, officers, directors, agents and representatives in their capacities as such, on the other hand (the “GLBL Intercompany Claims”), in each case in connection with the SunEdison Bankruptcy and including, in each case, any avoidance actions and preference claims the SunEdison Parties may have. The MOU has been approved by the respective boards of directors of TerraForm Power, SunEdison and TerraForm Global. TerraForm Power's board of directors approved the MOU upon the recommendation of its independent members who do not also serve on the board of directors of TerraForm Global. The settlement of the TERP Intercompany Claims and the GLBL Intercompany Claims is subject to the approval of the bankruptcy court in the SunEdison Bankruptcy (the “Bankruptcy Court”).

The Yieldcos, Terra LLC, GLBL LLC and SunEdison have modified the MOU through a series of extensions which have extended, from January 27, 2017 to March 3, 2017, the deadline under the MOU for agreeing to the terms of definitive settlement agreements. Under the MOU, as modified, the Yieldcos, Terra LLC, GLBL LLC and SunEdison will work in good faith toward agreeing to the terms of two separate settlement agreements, one for each Yieldco, as promptly as practicable on or before March 3, 2017. The Company expects that SunEdison will condition its motion for Bankruptcy Court approval of each settlement agreement upon Bankruptcy Court approval of the other settlement agreement. In addition, TERP and SunEdison will work to document a transaction for the sale of all or part of TERP in parallel with a separate effort by GLBL and SunEdison to document a transaction for the sale of all or part of GLBL (each an “M&A Transaction”), with each M&A Transaction requiring the approval by the applicable Yieldco and SunEdison. The obligation to work toward the M&A Transaction terminates if the Yieldcos and SunEdison have not executed and delivered settlement agreements on or before March 3, 2017.

The MOU contains certain non-binding proposed settlement terms (the “Proposed Settlement Terms”) to resolve the complex legal relationship between the applicable Yieldco and SunEdison arising out of SunEdison’s sponsorship of such Yieldco, including, among other things, an allocation of the total consideration paid in connection with an M&A Transaction and, with certain exceptions, the full mutual release of all TERP Intercompany Claims. At the closing of the TERP M&A Transaction, in exchange for its Class B common stock of TerraForm Power, Class B units of Terra LLC, incentive distribution rights and all other interests in TERP, SunEdison would receive consideration equal to 36.9% of the total consideration paid to all of the Company’s stockholders, reflecting the settlement of TERP Intercompany Claims (including avoidance actions in the SunEdison Bankruptcy), incentive distribution rights and other factors considered by the board of directors of the Company. The remaining consideration would be distributed to holders of shares of the Class A common stock of TerraForm Power. At the closing of the GLBL M&A Transaction, in exchange for its Class B common stock of TerraForm Global, Class B units of GLBL LLC, incentive distribution rights and all other interests in GLBL, SunEdison would receive consideration equal to 25.0% of the total consideration paid to all TerraForm Global stockholders, reflecting the settlement of GLBL Intercompany Claims, incentive distribution rights and other factors considered by the board of directors of TerraForm Global. The remaining consideration would be distributed to holders of shares of the Class A common stock of TerraForm Global (including SunEdison, solely in its capacity as a holder of Class A common stock of TerraForm Global immediately prior to the closing of such M&A Transaction).

The Proposed Settlement Terms are not legally binding on any party to the MOU and are subject to a number of conditions and contingencies, including each of the Yieldcos and SunEdison entering into final settlement agreements before March 3, 2017, each of the Yieldcos entering into an M&A Transaction (and all documents with respect thereto) jointly approved by the applicable Yieldco and SunEdison by April 1, 2017 and approval of each settlement agreement by the Bankruptcy Court by April 1, 2017, which date may be extended until April 15, 2017 if approval of the settlement agreements is a contested matter that SunEdison is prosecuting in good faith. The settlement agreements will automatically terminate if approval of the Bankruptcy Court is not obtained and will be terminable if the applicable jointly approved M&A Transaction terminates prior to closing or if other customary milestones are not met or termination rights are triggered. There is no assurance that the Yieldcos and SunEdison will enter into binding settlement agreements, and there is no assurance as to the final terms or timing of any such settlement agreements.

Management Services Agreement

Pursuant to the 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. As consideration for the services provided, the Company agreed to pay SunEdison a base management fee as follows: (i) 2.5% of the Company's cash available for distribution in 2015, 2016 and 2017 (not to exceed $4.0 million in 2015, $7.0 million in 2016 or $9.0 million in 2017), and (ii) an amount equal to SunEdison's or other service provider's actual cost in 2018 and thereafter. 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 Company expects the MSA will ultimately be terminated as part of any settlement agreement that it enters into with SunEdison. The Company cannot give any assurance that it will be able to enter into a new management services agreement with a new sponsor at all or at an attractive cost to the extent it elects to enter into a sponsorship arrangement as part of its strategic alternatives process.

Costs for the management and administrative services that SunEdison has continued providing or reimbursing the Company for pursuant to the MSA are included within general and administrative expenses - affiliate in the unaudited condensed consolidated statements of operations, and costs for services that SunEdison has stopped providing or reimbursing the Company for are now included within general and administrative expenses. General and administrative expenses - affiliate were $2.9 million and $10.6 million for the three and nine months ended September 30, 2016, respectively, and $14.6 million and $39.4 million, respectively, for the same periods in 2015 as reported in the unaudited condensed consolidated statements of operations. Pursuant to the MSA, cash consideration paid by the Company for these services for the three and nine months ended September 30, 2016 totaled $1.8 million and $5.3 million, respectively, and $1.0 million and $3.0 million, respectively, for the same periods in 2015. General and administrative expenses - affiliate in excess of cash consideration paid by the Company have been treated as an equity contribution from SunEdison in all periods.

O&M and Asset Management Services

O&M services, as well as asset management services, are substantially provided to the Company by SunEdison pursuant to contractual agreements. Costs incurred for these services were $7.1 million and $22.9 million during the three and nine months ended September 30, 2016, respectively, and were $6.8 million and $14.7 million, respectively, during the same periods in 2015. These costs are reported as cost of operations - affiliate in the unaudited condensed consolidated statements of operations. In addition, in conjunction with the First Wind acquisition, SunEdison committed to reimburse the Company for capital expenditures and operation and maintenance labor fees in excess of budgeted amounts (not to exceed $53.9 million through 2019) for certain of its wind power plants. During the three and nine months ended September 30, 2015, the Company received contributions pursuant to this agreement of $2.4 million and $4.6 million, respectively. As a result of the SunEdison Bankruptcy, no amounts were received during 2016.

Engineering, Procurement and Construction Contracts and Module Warranties

SunEdison served as the prime construction contractor for most of the Company's renewable energy facilities acquired from SunEdison pursuant to engineering, procurement and construction contracts with the Company's project-level subsidiaries. These contracts are generally fixed price, turn-key construction contracts that include workmanship and other warranties with respect to the design and construction of the facilities that survive for a period of time after the completion of construction. These contracts or related contracts (including operation and maintenance agreements) also often include production or availability guarantees with respect to the output or availability of the facility that survive completion of construction. Moreover, the Company also generally obtained solar module warranties from SunEdison, including workmanship warranties and output guarantees, for those solar facilities that the Company acquired from SunEdison that utilized SunEdison modules. The SunEdison Bankruptcy will likely reduce or eliminate the Company's potential recoveries on claims under these agreements and warranties. Third party insurance has been procured by SunEdison to back-stop payment of warranty claims for SunEdison modules purchased from January of 2011 through January of 2015.

Interest Payment Agreement

Immediately prior to the completion of the IPO on July 23, 2014, Terra LLC and Terra Operating LLC entered into an interest payment agreement (the "Interest Payment Agreement") with SunEdison, pursuant to which SunEdison would pay all of the scheduled interest on a term loan through the third anniversary of Terra LLC and Terra Operating LLC entering into the term loan, up to an aggregate of $48.0 million over such period (plus any interest due on any payment not remitted when due). Interest expense incurred under the term loan was reflected in the unaudited condensed consolidated statement of operations and the reimbursement for such costs was treated as an equity contribution from SunEdison. The Company received an equity contribution of $4.0 million from SunEdison pursuant to the Interest Payment Agreement for the nine months ended September 30, 2015. No amounts were received during 2016 as the remaining outstanding principal balance of the term loan was fully repaid on January 28, 2015.

On January 28, 2015, Terra LLC and Terra Operating LLC entered into the Amended and Restated Interest Payment Agreement (the “Amended Interest Payment Agreement”) with SunEdison. Pursuant to the Amended Interest Payment Agreement, SunEdison agreed to pay amounts equal to a portion of each scheduled interest payment of the Senior Notes due 2023, beginning with the first scheduled interest payment on August 1, 2015, and continuing through the scheduled interest payment on August 1, 2017. Amounts were to be paid by SunEdison as follows: (1) in respect of the first scheduled interest payment, $16.0 million, less amounts already paid by SunEdison under the Interest Payment Agreement, (2) in respect of each scheduled interest payment in 2016, $8.0 million, and (3) in respect of each scheduled interest payment in 2017, $8.0 million, provided that the maximum amount payable by SunEdison under the Amended Interest Payment Agreement (inclusive of amounts already paid under the Interest Payment Agreement) would not exceed $48.0 million (plus any interest due on any payment not remitted when due). SunEdison is not obligated to pay any amounts payable under the Senior Notes due 2023 in connection with an acceleration of the indebtedness thereunder. The Company received $8.0 million from SunEdison pursuant to the Amended Interest Payment Agreement during the nine months ended September 30, 2016, which was received in the first quarter of 2016 and accrued for during fiscal 2015. As of the first quarter of 2016, the Company had received a cumulative amount of $24.0 million under the Interest Payment Agreement and Amended Interest Payment Agreement from SunEdison with $24.0 million of scheduled payments due in future periods. The Company has not received any payments from SunEdison pursuant to the Amended Interest Payment Agreement since the first quarter.

On July 29, 2016, SunEdison delivered a notice purporting to terminate the Amended Interest Payment Agreement. The notice alleges that SunEdison's bankruptcy permits termination as of right without following the bankruptcy procedures for rejection of executory contracts. Although the Company does not expect SunEdison to perform under the Amended Interest Payment Agreement going forward, it intends to contest the validity of the termination notice and asserted a claim in the SunEdison Bankruptcy as discussed above.

Support Agreement and Intercompany Agreement

The Company entered into the Project Support Agreement with SunEdison (the "Support Agreement") on July 23, 2014, which provided the Company the option to purchase additional renewable energy facilities from SunEdison in 2015 and 2016. The Support Agreement also provided the Company a right of first offer with respect to certain other renewable energy facilities. During the nine months ended September 30, 2016, the Company acquired renewable energy facilities with a combined nameplate capacity of 19.2 MW from SunEdison under the Project Support Agreement (see Note 2. Transactions Between Entities Under Common Control).

In connection with the First Wind acquisition, the Company and SunEdison entered into an agreement (the "Intercompany Agreement") pursuant to which the Company was granted the option to purchase additional renewable energy facilities in the First Wind pipeline from SunEdison. During the nine months ended September 30, 2016, the Company did not acquire any renewable energy facilities from SunEdison under the Intercompany Agreement.

As a result of the SunEdison Bankruptcy, the Company does not expect that it will be able to acquire from SunEdison any additional projects under the Support Agreement or Intercompany Agreement and add such projects to its operating fleet. As the Company's long-term growth strategy is the acquisition of new renewable energy facilities, including under the Support Agreement and Intercompany Agreement, losing its ability to acquire additional projects from SunEdison may negatively impact the Company's ability to grow its portfolio and the Company may be required to seek such growth primarily from third party acquisitions.

In addition to the Company's Call Right Projects under the Support Agreement and Intercompany Agreement, the Company's Call Right Projects also include 0.5 GW (net) of operating wind power plants that are owned by a warehouse vehicle arranged by SunEdison (the "AP Warehouse"). The Company believes SunEdison has sold or is in the process of selling its equity interest in the AP Warehouse to an unaffiliated third party and the Company is currently evaluating its options with regard to these assets.

Guaranty to SunEdison

On May 19, 2015, the Company provided a guaranty in connection with SunEdison’s agreement to acquire from the LAP Shareholders, a 19.0 MW hydroelectricity facility and a 185.0 MW wind power plant in Chile for $195.0 million. In October 2015, SunEdison received a notice from the sellers purporting to terminate the purchase agreement. Following receipt of such notice, SunEdison exercised its right under the purchase agreement to terminate the agreement based on the failure by the sellers to satisfy certain conditions precedent to closing. In connection with this transaction, the Company and the LAP shareholders entered into the Settlement Agreement as disclosed in Settlement Agreement with Latin America Power Holding in Note 16. Commitments and Contingencies, which resulted in a release of all claims by the LAP shareholders under the guaranty.

Due to SunEdison, net

Subsequent to the SunEdison Bankruptcy, certain of the Company's expenses are still being reimbursed by SunEdison pursuant to the MSA and any of these expenses not reimbursed by SunEdison as of the balance sheet date are reported as a receivable from SunEdison. Additionally, all amounts incurred by the Company and not paid as of the balance sheet date for renewable energy facilities acquired from SunEdison or for asset management and O&M services received from SunEdison are reported as a payable to SunEdison. As of September 30, 2016 and December 31, 2015, the Company had a net payable to SunEdison of $9.5 million and $26.6 million, respectively, which is reported as Due to SunEdison, net in the unaudited condensed consolidated balance sheets. As a result of the SunEdison Bankruptcy, the Company recognized a $0.8 million loss within loss on receivables - affiliate in the unaudited condensed consolidated statement of operations for the nine months ended September 30, 2016 related to recording a bad debt reserve for outstanding receivables from the SunEdison Debtors. No amount was recognized for the same period in 2015 or three months ended September 30, 2016.

Incentive Distribution Rights

Immediately prior to the completion of the IPO on July 23, 2014, Terra LLC entered into the Amended and Restated Operating Agreement of Terra LLC which granted SunEdison 100% of the Incentive Distribution Rights ("IDRs") of Terra LLC. IDRs represent the right to receive increasing percentages (15.0%, 25.0% and 50.0%) of Terra LLC’s quarterly distributions after the Class A Units, Class B units and Class B1 units of Terra LLC have received quarterly distributions in an amount equal to $0.2257 per unit (the "Minimum Quarterly Distribution") and the target distribution levels have been achieved. As of September 30, 2016 and December 31, 2015, SunEdison held 100% of the IDRs. SunEdison has pledged the IDRs as collateral under its DIP financing and its first and second lien credit facilities and second lien secured notes. As of September 30, 2016 and December 31, 2015, there were no Class B1 units of Terra LLC outstanding. There were no payments for IDRs made by the Company during the nine months ended September 30, 2016 and 2015.

Commitments to Acquire Renewable Energy Facilities from SunEdison

As of December 31, 2015, the Company had open commitments of $240.9 million in the aggregate to acquire renewable energy facilities with a combined nameplate capacity of 195.5 MW from SunEdison. Over the course of 2016, the Company has focused on acquiring, terminating or resolving its commitments to acquire renewable energy facilities from SunEdison in order to align its future commitments with current market conditions. During the nine months ended September 30, 2016, all outstanding commitments that existed as of December 31, 2015 expired or were extinguished through termination or project acquisitions, except as described below with respect to the Invenergy Wind Option Agreements. The reduction in the Company's commitment amount during 2016 is detailed in the table below:



						Cash Committed
Description	Facility Category	Facility Type	Location	MW		(in thousands)
As of December 31, 2015¹				195.5		$	240,896
Acquired²	Distributed Generation	Solar	U.S.	(1.2	)	(3,085		)
Acquired³	Utility	Solar	U.S.	(18.0	)	(36,591		)
Terminated	Utility	Solar	U.S.	(159.8	)	(168,396		)
Terminated	Residential	Solar	U.S.	—		(3,808		)
Expired	Distributed Generation	Solar	U.S.	(16.5	)	(29,016		)
As of September 30, 2016				—		$	—

————

(1)

Excludes the estimated commitment of $814.8 million to acquire 479.3 MW of residential solar generation facilities that were expected to be acquired from SunEdison upon SunEdison's merger with Vivint Solar Inc. due to the merger being terminated on March 7, 2016. As a result of the termination of the merger, the Company's obligation to purchase these assets was also terminated. Also excludes the cash of $16.9 million due to SunEdison for the second installment of purchase prices for renewable energy facilities that were acquired from SunEdison during the year ended December 31, 2015, which was paid to SunEdison during the first quarter of 2016.


(2)	The preliminary purchase prices for these distributed generation facilities were reduced from $3.1 million to $2.8 million pursuant to the terms of the relevant agreements.


(3)	The preliminary purchase price for this utility scale solar facility was reduced from $36.6 million to $36.2 million pursuant to the terms of the relevant agreements.

In connection with the Invenergy Wind Acquisition as discussed in Note 4. Acquisitions, SunEdison 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. Simultaneously, Terra LLC entered into a back to back option agreement with SunEdison LLC on substantially identical terms. The Option Agreements effectively permit (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 would be based on the determination of the fair market value of the Invenergy Wind Interest at the time the relevant option is exercised, subject to certain minimum and maximum thresholds set forth in the Option Agreements. SunEdison LLC is a debtor in the SunEdison Bankruptcy. As such, SunEdison LLC may assume, assume and assign or reject its Option Agreement. If SunEdison LLC rejects its Option Agreement with Invenergy, the Company would not expect to be obligated to perform on its Option Agreement with SunEdison LLC, although the Company cannot assure that result. Amounts related to the Company's option agreement are not included in the commitment amounts discussed above.

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

Segment Reporting

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Segment Reporting

SEGMENT REPORTING

The Company has two reportable segments: Solar and Wind. These segments include the Company's entire portfolio of renewable energy facility assets and are determined based on the management approach. This approach designates the internal reporting used by management for making decisions and assessing performance as the source of the reportable segments. The Company’s operating segments consist of Distributed Generation, North America Utility, and International Utility that are aggregated into the Solar reportable segment and Northeast Wind, Central Wind, and Hawaii Wind that are aggregated into the Wind reportable segment. The operating segments have been aggregated as they have similar economic characteristics and meet all of the aggregation criteria. Corporate expenses include general and administrative expenses, acquisition costs, interest expense on corporate-level indebtedness, stock-based compensation and depreciation, accretion and amortization expense. All net operating revenues for the three and nine months ended September 30, 2016 and 2015 were earned by the Company's reportable segments from external customers in the United States (including Puerto Rico), Canada, the United Kingdom and Chile.

The following table reflects summarized financial information concerning the Company’s reportable segments for the three and nine months ended September 30, 2016 and 2015:



	Three Months Ended September 30, 2016											Three Months Ended September 30, 2015
(In thousands)	Solar		Wind			Corporate			Total			Solar		Wind			Corporate			Total
Operating revenues, net	$	125,644	$	52,474		$	—		$	178,118		$	139,248	$	24,043		$	—		$	163,291
Depreciation, accretion and amortization expense	29,243		28,400			345			57,988			33,027		10,640			—			43,667
Other operating costs and expenses	19,613		25,520			24,289			69,422			15,027		11,115			29,347			55,489
Interest expense, net	22,020		20,637			30,161			72,818			17,478		1,224			30,084			48,786
Other non-operating expenses (income), net	2,206		11			2,244			4,461			28,501		(506		)	(16,737		)	11,258
Income tax expense¹	—		—			1,140			1,140			—		—			1,673			1,673
Net income (loss)	$	52,562	$	(22,094	)	$	(58,179	)	$	(27,711	)	$	45,215	$	1,570		$	(44,367	)	$	2,418



	Nine Months Ended September 30, 2016											Nine Months Ended September 30, 2015
(In thousands)	Solar		Wind			Corporate			Total			Solar		Wind		Corporate			Total
Operating revenues, net	$	314,379	$	204,957		$	—		$	519,336		$	283,086	$	80,766	$	—		$	363,852
Depreciation, accretion and amortization expense	90,137		87,402			487			178,026			88,319		25,375		—			113,694
Other operating costs and expenses	57,745		73,014			64,780			195,539			45,855		30,107		82,343			158,305
Interest expense, net	89,365		64,366			89,380			243,111			52,863		2,075		66,664			121,602
Other non-operating expenses (income), net	975		230			4,493			5,698			16,209		6,611		(3,303		)	19,517
Income tax expense¹	—		—			3,115			3,115			—		—		2,842			2,842
Net income (loss)	$	76,157	$	(20,055	)	$	(162,255	)	$	(106,153	)	$	79,840	$	16,598	$	(148,546	)	$	(52,108	)
Balance Sheet
Total assets²	$	3,841,165	$	3,627,850		$	525,964		$	7,994,979		$	3,923,186	$	3,765,486	$	528,737		$	8,217,409

———


(1)	Income tax expense is not allocated to the Company's Solar and Wind segments.


(2)	Represents total assets as of September 30, 2016 and December 31, 2015, respectively.

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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Other Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2016

Other Comprehensive Income (Loss)

OTHER COMPREHENSIVE INCOME (LOSS)

The following table presents the changes in each component of accumulated other comprehensive income, net of tax, for the nine months ended September 30, 2016:



(In thousands)	Foreign Currency Translation Adjustments			Hedging Activities			Accumulated Other Comprehensive Income
Balance as of December 31, 2015	$	(11,733	)	$	34,633		$	22,900
Net unrealized loss arising during the period	(2,442		)	(32,348		)	(34,790		)
Reclassification of net realized loss (gain) into earnings:
Interest expense, net	—			25,664			25,664
Operating revenues, net	—			(9,997		)	(9,997		)
Other comprehensive loss	$	(2,442	)	$	(16,681	)	$	(19,123	)
Accumulated other comprehensive (loss) income	(14,175		)	17,952			3,777
Other comprehensive loss attributable to non-controlling interests	(668		)	(6,151		)	(6,819		)
Balance as of September 30, 2016	$	(13,507	)	$	24,103		$	10,596

The following tables present each component of other comprehensive income (loss) and the related tax effects for the three and nine months ended September 30, 2016 and 2015:



	Three Months Ended
	September 30, 2016								September 30, 2015
(In thousands)	Before Tax			Tax Effect		Net of Tax			Before Tax			Tax Effect			Net of Tax
Foreign currency translation adjustments:
Net unrealized loss arising during the period	$	(6,158	)	$	—	$	(6,158	)	$	(3,363	)	$	—		$	(3,363	)
Hedging activities:
Net unrealized gain (loss) arising during the period	14,258			—		14,258			46,681			(14,831		)	31,850
Reclassification of net realized loss into earnings	3,164			—		3,164			129			—			129
Net change	17,422			—		17,422			46,810			(14,831		)	31,979
Other comprehensive income (loss)	$	11,264		$	—	11,264			$	43,447		$	(14,831	)	28,616
Less: Other comprehensive income (loss) attributable to non-controlling interests, net of tax						4,850									(2,206		)
Less: Pre-acquisition other comprehensive income of renewable energy facilities acquired from SunEdison						—									32,985
Other comprehensive income (loss) attributable to Class A common stockholders						$	6,414								$	(2,163	)



	Nine Months Ended
	September 30, 2016								September 30, 2015
(In thousands)	Before Tax			Tax Effect		Net of Tax			Before Tax			Tax Effect			Net of Tax
Foreign currency translation adjustments:
Net unrealized loss arising during the period	$	(2,442	)	$	—	$	(2,442	)	$	(2,786	)	$	—		$	(2,786	)
Hedging activities:
Net unrealized (loss) gain arising during the period	(32,348		)	—		(32,348		)	52,364			(14,831		)	37,533
Reclassification of net realized loss into earnings	15,667			—		15,667			3,336			—			3,336
Net change	(16,681		)	—		(16,681		)	55,700			(14,831		)	40,869
Other comprehensive (loss) income	$	(19,123	)	$	—	(19,123		)	$	52,914		$	(14,831	)	38,083
Less: Other comprehensive loss attributable to non-controlling interests, net of tax						(6,819		)							(1,093		)
Less: Pre-acquisition other comprehensive income of renewable energy facilities acquired from SunEdison						—									40,488
Other comprehensive loss attributable to Class A common stockholders						$	(12,304	)							$	(1,312	)

The entire disclosure for comprehensive income, which includes, but is not limited to, 1) the amount of income tax expense or benefit allocated to each component of other comprehensive income, including reclassification adjustments, 2) the reclassification adjustments for each classification of other comprehensive income and 3) the ending accumulated balances for each component of comprehensive income.

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Nature of Operations and Basis of Presentation (Policies)	9 Months Ended
	Sep. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the Securities and Exchange Commission's ("SEC") regulations for interim financial information. Accordingly, they do not include all of the information and notes required by U.S. generally accepted accounting principles ("U.S. GAAP") for complete financial statements. The financial statements should be read in conjunction with the accounting policies and other disclosures as set forth in the notes to the Company’s annual financial statements for the year ended December 31, 2015. Interim results are not necessarily indicative of results for a full year. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all material adjustments consisting of normal and recurring accruals necessary to present fairly the Company's unaudited condensed consolidated financial position as of September 30, 2016, the results of operations and comprehensive (loss) income for the three and nine months ended September 30, 2016 and 2015 and cash flows for the nine months ended September 30, 2016 and 2015. The Company is required to recast historical financial statements when renewable energy facilities are acquired from SunEdison. The recast reflects the assets and liabilities and the results of operations of the acquired renewable energy facilities for the period the facilities were owned by SunEdison, which is in accordance with applicable rules governing transactions between entities under common control.
Use of Estimates	Use of Estimates In preparing the unaudited condensed consolidated financial statements, the Company used estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements. Such estimates also affect the reported amounts of revenues, expenses and cash flows during the reporting period. To the extent there are material differences between the estimates and actual results, the Company's future results of operations would be affected.
New Accounting Pronouncement	New Accounting Standards In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU No. 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. ASU No. 2014-09 will become effective for the Company on January 1, 2018. Early application is permitted but not before January 1, 2017. ASU No. 2014-09 permits the use of either the retrospective or cumulative effect transition method. The Company is working through an adoption plan which includes the evaluation of revenue contracts compared to the new standard and evaluating the impact of ASU No. 2014-09 on the Company's consolidated financial statements and related disclosures. The Company does not plan to adopt this standard prior to January 1, 2018. In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810) Amendments to the Consolidation Analysis, which affects the following areas of the consolidation analysis: limited partnerships and similar entities, evaluation of fees paid to a decision maker or service provider as a variable interest and in determination of the primary beneficiary, effect of related parties on the primary beneficiary determination and for certain investment funds. ASU No. 2015-02 is effective on a retrospective basis for the Company for the fiscal year ending December 31, 2016 and interim periods therein. The Company adopted ASU No. 2015-02 as of January 1, 2016, which resulted in certain of its consolidated subsidiaries to be considered variable interest entities. No unconsolidated investments were consolidated and no consolidated subsidiaries were deconsolidated as a result of implementing this standard. In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30) Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability. In August 2015, the FASB issued ASU No. 2015-15 Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, in which an entity may defer and present debt issuance costs associated with line-of-credit arrangements as an asset and subsequently amortize the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. ASU No. 2015-03 and ASU No. 2015-15 are effective on a retrospective basis for annual and interim periods beginning on or after December 15, 2015. The Company adopted ASU No. 2015-03 and ASU No. 2015-15 as of January 1, 2016, resulting in a reclassification of $37.3 million and $43.1 million from deferred financing costs, net (current and non-current portion) to long-term debt and financing lease obligations, including current portion, as of September 30, 2016 and December 31, 2015, respectively. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which primarily changes the lessee's accounting for operating leases by requiring recognition of lease right-of-use assets and lease liabilities. This standard is effective for annual reporting periods beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect of ASU No. 2016-02 on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718). This update was issued as part of the FASB's simplification initiative and affects all entities that issue share-based payment awards to their employees. The amendments in this update cover such areas as the recognition of excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of cash flows, an accounting policy election for forfeitures, the amount an employer can withhold to cover income taxes and still qualify for equity classification and the classification of those taxes paid on the statement of cash flows. This update is effective for annual and interim periods beginning after December 15, 2016 with early adoption permitted if all provisions are adopted within the same period. The guidance is required to be applied either prospectively, retrospectively or using a modified retrospective transition method, depending on the area covered in the update. The Company is currently evaluating the effect of the standard on its ongoing financial reporting. In March 2016, the FASB issued ASU No. 2016-07, Investments - Equity Method and Joint Ventures (Topic 323). The amendments of ASU No. 2016-07 eliminate the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor's previously held interest and adopt the equity method of accounting with no retroactive adjustment to the investment. In addition, ASU No. 2016-07 requires that an entity that has an available-for-sale equity security that becomes qualified for the equity method of accounting recognize through earnings the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method. The guidance in ASU No. 2016-07 is effective for fiscal years beginning after December 15, 2016, and interim periods within those annual periods. The adoption of ASU No. 2016-07 is required to be applied prospectively and early adoption is permitted. The Company does not expect the standard to have a material impact on its consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments. The amendments of ASU No. 2016-15 were issued to address eight specific cash flow issues for which stakeholders have indicated to the FASB that a diversity in practice existed in how entities were presenting and classifying these items in the statement of cash flows. The issues addressed by ASU No. 2016-15 include but are not limited to the classification of debt prepayment and debt extinguishment costs, payments made for contingent consideration for a business combination, proceeds from the settlement of insurance proceeds, distributions received from equity method investees and separately identifiable cash flows and the application of the predominance principle. The amendments of ASU No. 2016-15 are effective for public entities for fiscal years beginning after December 15, 2017 and interim periods in those fiscal years. Early adoption is permitted, including adoption in an interim fiscal period with all amendments adopted in the same period. The adoption of ASU No. 2016-15 is required to be applied retrospectively. The Company is currently evaluating the impact of the standard on its consolidated statements of cash flows. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740), Intra-Entity Transfers of Assets Other Than Inventory. The amendments of ASU No. 2016-16 were issued to improve the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. Current GAAP prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party which has resulted in diversity in practice and increased complexity within financial reporting. The amendments of ASU No. 2016-16 would require an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs and do not require new disclosure requirements. The amendments of ASU No. 2016-16 are effective for annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods. Early adoption is permitted and the adoption of ASU No. 2016-16 should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company does not expect this standard to have an impact on its consolidated financial statements. In October 2016, the FASB issued ASU 2016-17, Consolidation (Topic 810), Interests Held through Related Parties That Are under Common Control. ASU 2016-17 updates ASU 2015-02. Under the amendments, a single decision maker is not required to consider indirect interests held through related parties that are under common control with the single decision maker to be the equivalent of direct interests in their entirety. Instead, a single decision maker is required to include those interests on a proportionate basis consistent with indirect interests held through other related parties. ASU 2016-17 is effective for annual reporting periods beginning after December 15, 2016, and interim periods within those annual periods, with early adoption permitted. The Company is currently evaluating the effect of the standard on its consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 320), Restricted Cash, a Consensus of the FASB Emerging Issues Task Force. The amendments require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in this update do not provide a definition of restricted cash or restricted cash equivalents. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. The Company is currently evaluating the effect of this standard on its consolidated financial statements. In December 2016, the FASB issued ASU 2016-19, Technical Corrections and Improvements. The amendments cover a wide range of topics in the Accounting Standards Codification, covering differences between original guidance and the Accounting Standards Codification, guidance clarification and reference corrections, simplification and minor improvements. The adoption of ASU 2016-19 is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2016. The Company is currently evaluating the effect of this standard on its consolidated financial statements. In December 2016, the FASB issued ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. The amendments in this update are of a similar nature to the items typically addressed in ASU 2016-19, Technical Corrections and Improvements. However, the FASB decided to issue a separate update for technical corrections and improvements to Topic 606 and other Topics amended by ASU 2014-09 to increase stakeholders’ awareness of the proposals and to expedite improvements to ASU 2014-09. The adoption of ASU 2016-20 is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual periods. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is currently evaluating the effect of this standard on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business. The amendment seeks to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill and consolidation. The adoption of ASU 2017-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The amendments should be applied prospectively on or after the effective dates. Accordingly, the adoption will not have an effect on the Company's historical financial statements. The Company is currently evaluating the effect of this standard on future consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment. The amendment simplifies the accounting for goodwill impairment by removing Step 2 of the current test, which requires calculation of a hypothetical purchase price allocation. Under the revised guidance, goodwill impairment will be measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill (currently Step 1 of the two step impairment test). Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. This updated guidance is not currently expected to impact the Company's financial reporting. The standard is effective January 1, 2020, with early adoption permitted, and must be adopted on a prospective basis.
Earnings Per Share	oss per share (“EPS”) is based upon the weighted average shares outstanding. Unvested RSAs that contain non-forfeitable rights to dividends are treated as participating securities and are included in the EPS computation using the two-class method, to the extent that there are undistributed earnings available as such securities do not participate in losses.
Segment Reporting, Policy	The Company has two reportable segments: Solar and Wind. These segments include the Company's entire portfolio of renewable energy facility assets and are determined based on the management approach. This approach designates the internal reporting used by management for making decisions and assessing performance as the source of the reportable segments. The Company’s operating segments consist of Distributed Generation, North America Utility, and International Utility that are aggregated into the Solar reportable segment and Northeast Wind, Central Wind, and Hawaii Wind that are aggregated into the Wind reportable segment. The operating segments have been aggregated as they have similar economic characteristics and meet all of the aggregation criteria. Corporate expenses include general and administrative expenses, acquisition costs, interest expense on corporate-level indebtedness, stock-based compensation and depreciation, accretion and amortization expense. All net operating revenues for the three and nine months ended September 30, 2016 and 2015 were earned by the Company's reportable segments from external customers in the United States (including Puerto Rico), Canada, the United Kingdom and Chile.

Transactions Between Entities Under Common Control (Tables)

9 Months Ended

Sep. 30, 2016

Recast of Prior Financial Information

The following table presents changes to the Company's previously reported consolidated balance sheet as of December 31, 2015 included in the Company's 2015 Annual Report on Form 10-K:



(In thousands) Balance Sheet Caption	As Reported		Recast Adjustments		As Recasted
Renewable energy facilities, net	$	5,802,380	$	31,854	$	5,834,234
Other assets	119,960		383		120,343
Change in total assets			$	32,237

Current portion of long-term debt and financing lease obligations¹	$	2,014,331	$	23,588	$	2,037,919
Accounts payable, accrued expenses and other current liabilities	150,721		2,325		153,046
Due to SunEdison, net	20,274		6,324		26,598
Change in total liabilities			$	32,237

———

(1)



(In thousands) Statement of Cash Flows Caption	As Reported			Recast Adjustments			As Recasted
Cash flows from investing activities:
Cash paid to third parties for renewable energy facility construction	$	(426,682	)	$	(161,351	)	$	(588,033	)
Acquisitions of renewable energy facilities from third parties, net of cash acquired	(1,004,403		)	(154,496		)	(1,158,899		)
Change in net cash used in investing activities				(315,847		)

Cash flows from financing activities:
Borrowings of non-recourse long-term debt	276,915			159,842			436,757
Principal payments on non-recourse long-term debt	(148,764		)	(1,130		)	(149,894		)
Due to SunEdison, net	(147,370		)	157,135			9,765
Change in net cash provided by financing activities				315,847

Net increase in cash and cash equivalents	168,647			—			168,647
Effect of exchange rate changes on cash and cash equivalents	(1,380		)	—			(1,380		)
Cash and cash equivalents at beginning of period	468,554			—			468,554
Cash and cash equivalents at end of period	$	635,821		$	—		$	635,821



	Three Months Ended September 30, 2015							Nine Months Ended September 30, 2015
(In thousands) Statement of Comprehensive Income (Loss)	As Reported			Recast Adjustments		As Recasted		As Reported			Recast Adjustments		As Recasted
Other comprehensive income (loss), net of tax:
Hedging activities:
Net unrealized gain (loss) arising during the period, net of tax	$	(1,135	)	$	32,985	$	31,850	$	(2,955	)	$	40,488	$	37,533
Change in total comprehensive (loss) income				32,985							40,488
Less: Pre-acquisition other comprehensive income of renewable energy facilities acquired from SunEdison	$	—		32,985		$	32,985	$	—		40,488		$	40,488
Change in comprehensive loss attributable to Class A Common stockholders				$	—						$	—

Transactions Under Common Control, Summary of Acquisitions

The following table summarizes the renewable energy facilities acquired by the Company from SunEdison through a series of transactions:



			Nine Months Ended September 30, 2016				As of September 30, 2016
Facility Category	Type	Location	Nameplate Capacity (MW)	Number of Sites	Cash Paid¹		Cash Due to SunEdison²		Debt Transferred³
Distributed Generation	Solar	U.S.	1.2	3	$	2,750	$	—	$	—
Utility	Solar	U.S.	18.0	1	36,231		—		—
Total			19.2	4	$	38,981	$	—	$	—

————


(1)	Represents the total amount paid to SunEdison. Excludes aggregated tax equity partner payments of $1.6 million to SunEdison.


(2)	All amounts have been paid to SunEdison for these renewable energy facilities as of September 30, 2016.


(3)	$16.7 million of construction debt existed for one of the renewable energy facilities as of the acquisition date. This debt was fully repaid by SunEdison during the third quarter of 2016 using cash proceeds paid by the Company to SunEdison for the acquisition of the facility.

Assets Held For Sale (Tables)

9 Months Ended

Sep. 30, 2016

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations



(In thousands)	September 30, 2016
Assets held for sale:
Restricted cash	$	54,731
Accounts receivable, net	14,060
Prepaid expenses and other current assets	2,114
Total current assets held for sale	70,905

Renewable energy facilities, net	562,755
Intangible assets, net	1,566
Other assets	381
Total non-current assets held for sale	564,702

Total assets held for sale	$	635,607

Liabilities related to assets held for sale:
Current portion of long-term debt	$	385,047
Accounts payable, accrued expenses and other current liabilities	40,598
Due to SunEdison, net	744
Total current liabilities related to assets held for sale	426,389

Asset retirement obligations	41,328
Total non-current liabilities related to assets held for sale	41,328

Total liabilities related to assets held for sale	$	467,717

Tabular disclosure of information related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

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Acquisitions (Tables)

9 Months Ended

Sep. 30, 2016

Schedule of Allocation of Assets and Liabilities of Purchased Renewable Generation Facilities

The acquisition-date fair values of assets, liabilities and non-controlling interests pertaining to the Invenergy Wind business combination as of September 30, 2016, are as follows:



(In thousands)	Invenergy Wind
Renewable energy facilities	$	1,477,888
Accounts receivable	25,811
Intangible assets	748,300
Restricted cash	31,247
Derivative assets	32,311
Other assets	20,148
Total assets acquired	2,335,705
Accounts payable, accrued expenses and other current liabilities	23,195
Long-term debt, including current portion	531,221
Deferred income taxes	242
Asset retirement obligations	47,346
Other long-term liabilities	6,004
Total liabilities assumed	608,008
Redeemable non-controlling interest	140,635
Non-controlling interest	308,000
Purchase price, net of cash acquired	$	1,279,062

Business Acquisition, Pro Forma Information



	Nine Months Ended September 30,
(In thousands)	2015
Total operating revenues, net	$	469,619
Net loss	(22,761		)

Renewable Energy Facilities (Tables)

9 Months Ended

Sep. 30, 2016

Property, Plant and Equipment [Abstract]

Renewable Energy Facilities

Renewable energy facilities, net consists of the following:



(In thousands)	September 30, 2016			December 31, 2015
Renewable energy facilities in service, at cost	$	5,405,482		$	5,906,154
Less accumulated depreciation - renewable energy facilities	(306,004		)	(187,874		)
Renewable energy facilities in service, net	5,099,478			5,718,280
Construction in progress - renewable energy facilities	4,079			115,954
Total renewable energy facilities, net	$	5,103,557		$	5,834,234

Intangibles (Tables)

9 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Gross Carrying Amount and Accumulated Amortization of Other Intangible Asses

The following table presents the gross carrying amount and accumulated amortization of intangibles as of September 30, 2016:



(In thousands, except weighted average amortization period)	Weighted Average Amortization Period	Gross Carrying Amount		Accumulated Amortization			Net Book Value
Favorable rate revenue contracts	16 years	$	719,368	$	(46,331	)	$	673,037
In-place value of market rate revenue contracts	19 years	555,355		(43,045		)	512,310
Favorable rate land leases	18 years	15,800		(1,331		)	14,469
Total intangible assets, net		$	1,290,523	$	(90,707	)	$	1,199,816

Unfavorable rate revenue contracts	7 years	$	35,086	$	(9,168	)	$	25,918
Unfavorable rate land lease	16 years	1,000		(93		)	907
Total intangible liabilities, net		$	36,086	$	(9,261	)	$	26,825

The following table presents the gross carrying amount and accumulated amortization of intangibles as of December 31, 2015:



(In thousands, except weighted average amortization period)	Weighted Average Amortization Period	Gross Carrying Amount		Accumulated Amortization			Net Book Value
Favorable rate revenue contracts	17 years	$	714,137	$	(12,024	)	$	702,113
In-place value of market rate revenue contracts	20 years	551,226		(22,229		)	528,997
Favorable rate land leases	19 years	15,800		(746		)	15,054
Total intangible assets, net		$	1,281,163	$	(34,999	)	$	1,246,164

Unfavorable rate revenue contracts	8 years	$	35,086	$	(4,951	)	$	30,135
Unfavorable rate land lease	17 years	1,000		(51		)	949
Total intangible liabilities, net		$	36,086	$	(5,002	)	$	31,084

Variable Interest Entities (Tables)

9 Months Ended

Sep. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Variable Interest Entities

The carrying amounts and classification of the consolidated VIEs’ assets and liabilities included in the Company's unaudited condensed consolidated balance sheets are as follows:



(In thousands)	September 30, 2016		December 31, 2015
Current assets	$	216,911	$	180,287
Non-current assets	4,493,532		4,584,886
Total assets	$	4,710,443	$	4,765,173
Current liabilities	$	509,084	$	1,043,892
Non-current liabilities	703,299		202,629
Total liabilities	$	1,212,383	$	1,246,521

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

Schedule of Maturities of Long-term Debt

Long-term Debt (Tables)

9 Months Ended

Sep. 30, 2016

Debt Disclosure [Abstract]

Schedule of Debt

Long-term debt consists of the following:



(In thousands, except rates) Description:	September 30, 2016			December 31, 2015			Interest Type	Interest Rate (%)¹	Financing Type
Corporate-level long-term debt²:
Senior Notes due 2023	$	950,000		$	950,000		Fixed	6.38³	Senior notes
Senior Notes due 2025	300,000			300,000			Fixed	6.63³	Senior notes
Revolver	655,000			655,000			Variable	3.94⁴	Revolving loan
Non-recourse long-term debt⁵:
Permanent financing	2,034,882			2,546,864			Blended⁶	6.05⁷	Term debt / Senior notes
Construction financing	—			38,063			Variable	N/A	Construction debt
Financing lease obligations	124,866			136,594			Imputed	5.64⁷	Financing lease obligations
Total principal due for long-term debt and financing lease obligations	4,064,748			4,626,521				5.81⁷
Unamortized discount, net	(15,148		)	(20,821		)
Deferred financing costs, net⁸	(37,334		)	(43,051		)
Less current portion of long-term debt and financing lease obligations	(1,374,327		)	(2,037,919		)
Long-term debt and financing lease obligations, less current portion	$	2,637,939		$	2,524,730

———


(1)	As of September 30, 2016.


(2)	Corporate-level debt represents debt issued by Terra Operating LLC and guaranteed by Terra LLC and certain subsidiaries of Terra Operating LLC other than non-recourse subsidiaries as defined in the relevant debt agreements.


(3)	The interest rate for the Senior Notes due 2023 and the Senior Notes due 2025 reflected in this table excludes, in each case, 3.0% per annum special interest that accrued from September 6, 2016 to and including December 6, 2016 per the terms of the Senior Notes due 2023 fourth supplemental indenture and Senior Notes due 2025 third supplemental indenture as discussed below.


(4)	The interest rate for the Revolver reflected in this table excludes 1.5% per annum special interest that accrued from September 6, 2016 to and including December 6, 2016 per the terms of the eighth amendment to the Revolver as discussed below.


(5)	Non-recourse debt represents debt issued by subsidiaries with no recourse to Terra LLC, Terra Operating LLC, or guarantors of the Company's corporate-level debt, other than limited or capped contingent support obligations, which in aggregate are not considered to be material to the Company's business and financial condition.


(6)	Includes variable rate debt and fixed rate debt. As of September 30, 2016, 59% of this balance had a variable interest rate and the remaining 41% of this balance had a fixed interest rate. The Company has entered into interest rate swap agreements to fix the interest rates of certain variable rate permanent financing non-recourse debt (see Note 10. Derivatives).


(7)	Represents the weighted average interest rate as of September 30, 2016.


(8)	Total net long-term debt and financing lease obligations, including current portion, reflects the reclassification of deferred financing costs to reduce long-term debt as further described in Note 1. Nature of Operations and Basis of Presentation.



(In thousands)	Remainder of 2016¹		2017²		2018		2019		2020		Thereafter		Total
Maturities of long-term debt as of September 30, 2016³	$	134,531	$	645,203	$	112,042	$	538,660	$	92,018	$	2,542,294	$	4,064,748

————


(1)	Includes $100.0 million of Revolver indebtedness that was paid during the fourth quarter of 2016 as discussed above.


(2)	Includes $555.0 million of Revolver indebtedness as management currently intends to repay this indebtedness during 2017.


(3)	Represents the contractual principal payment due dates for the Company's long-term debt and does not reflect the reclassification of $0.6 billion of long-term debt to current as a result of debt defaults under certain of the Company's non-recourse financing arrangements.

Income Taxes (Tables)

9 Months Ended

Sep. 30, 2016

Income Tax Disclosure [Abstract]

Schedule of Effective Income Tax Rate Reconciliation

The income tax provision consisted of the following:



	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands, except effective tax rate)	2016			2015			2016			2015
(Loss) income before income tax expense	$	(26,571	)	$	4,091		$	(103,038	)	$	(49,266	)
Income tax expense	1,140			1,673			3,115			2,842
Effective tax rate	(4.3		)%	40.9		%	(3.0		)%	(5.8		)%

Derivatives (Tables)

9 Months Ended

Sep. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

As of September 30, 2016 and December 31, 2015, 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 September 30, 2016
Prepaid expenses and other current assets	$	—	$	7,619	$	—	$	1,041	$	12,966	$	21,626		$	—		$	21,626
Other assets	—		49,272		—		540		28,842		78,654			—			78,654
Total assets	$	—	$	56,891	$	—	$	1,581	$	41,808	$	100,280		$	—		$	100,280
Accounts payable and other current liabilities	$	19,186	$	—	$	1,513	$	—	$	—	$	20,699		$	—		$	20,699
Liabilities related to assets held for sale	—		—		33,216		—		—		33,216		—	—			33,216
Other long-term liabilities	11,353		—		—		—		—		11,353			—			11,353
Total liabilities	$	30,539	$	—	$	34,729	$	—	$	—	$	65,268		$	—		$	65,268

As of December 31, 2015
Prepaid expenses and other current assets	$	—	$	11,455	$	—	$	3,875	$	12,542	$	27,872		$	(1,451	)	$	26,421
Other assets	487		51,699		—		2,836		30,799		85,821			(70		)	85,751
Total assets	$	487	$	63,154	$	—	$	6,711	$	43,341	$	113,693		$	(1,521	)	$	112,172
Accounts payable and other current liabilities	$	19,081	$	—	$	1,104	$	3,777	$	—	$	23,962		$	(1,451	)	$	22,511
Other long-term liabilities	—		—		—		70		—		70			(70		)	—
Total liabilities	$	19,081	$	—	$	1,104	$	3,847	$	—	$	24,032		$	(1,521	)	$	22,511

Schedule of Notional Amounts of Outstanding Derivative Positions

As of September 30, 2016 and December 31, 2015, notional amounts for derivative instruments consisted of the following:



	Notional Amount as of
(In thousands)	September 30, 2016		December 31, 2015
Derivatives designated as hedges:
Interest rate swaps (USD)	$	442,530	$	468,067
Interest rate swaps (GBP)	—		222,018
Commodity contracts (MWhs)	18,401		18,401
Derivatives not designated as hedges:
Interest rate swaps (USD)	14,936		15,794
Interest rate swaps (GBP)	222,018		—
Foreign currency contracts (GBP)	—		112,168
Foreign currency contracts (CAD)	30,507		40,566
Commodity contracts (MWhs)	2,248		1,828

Gain (loss) of Derivative Instruments

Gains and losses on derivatives not designated as hedges for the three and nine months ended September 30, 2016 and 2015 consisted of the following:



	Location of Loss (Gain) in the Statements of Operations	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	Location of Loss (Gain) in the Statements of Operations	2016			2015			2016			2015
Interest rate swaps	Interest expense, net	$	5,127		$	495		$	36,583		$	454
Foreign currency contracts	Loss on foreign currency exchange, net	(73		)	(4,565		)	(905		)	(1,705		)
Commodity contracts	Operating revenues, net	(3,095		)	(5,139		)	(11,009		)	(6,901		)

Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss)

Gains and losses recognized related to interest rate swaps designated as cash flow hedges for the three and nine months ended September 30, 2016 and 2015 consisted of the following:



	Three Months Ended September 30,
	Gain (Loss) Recognized in Other Comprehensive Income (Effective Portion)					Location of Loss Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)	Amount of Loss (Gain) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)				Amount of Loss (Gain) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
(In thousands)	2016		2015				2016		2015		2016			2015
Interest rate swaps	$	798	$	(1,135	)	Interest expense, net	$	3,114	$	129	$	(17	)	$	—
Commodity contracts	13,460		32,985			Operating revenues, net	50		—		382			—
Total	$	14,258	$	31,850			$	3,164	$	129	$	365		$	—



	Nine Months Ended September 30,
	Gain (Loss) Recognized in Other Comprehensive Income (Effective Portion)						Location of Loss Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)	Amount of Loss (Gain) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)					Amount of Loss (Gain) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
(In thousands)	2016			2015				2016			2015		2016		2015
Interest rate swaps	$	(39,547	)	$	(2,955	)	Interest expense, net	$	9,743		$	3,336	$	474	$	—
Commodity contracts	7,199			40,488			Operating revenues, net	(9,997		)	—		3,465		—
Total	$	(32,348	)	$	37,533			$	(254	)	$	3,336	$	3,939	$	—

Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value, Assets and Liabilities Measured on Recurring Basis



(In thousands)	As of September 30, 2016								As of December 31, 2015
Assets	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Interest rate swaps	$	—	$	—	$	—	$	—	$	—	$	487	$	—	$	487
Commodity contracts	—		41,808		56,891		98,699		—		43,341		63,154		106,495
Foreign currency contracts	—		1,581		—		1,581		—		5,190		—		5,190
Total derivative assets	$	—	$	43,389	$	56,891	$	100,280	$	—	$	49,018	$	63,154	$	112,172
Liabilities
Interest rate swaps	$	—	$	65,268	$	—	$	65,268	$	—	$	20,185	$	—	$	20,185
Foreign currency contracts	—		—		—		—		—		2,326		—		2,326
Total derivative liabilities	$	—	$	65,268	$	—	$	65,268	$	—	$	22,511	$	—	$	22,511

Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation

The following table reconciles the changes in the fair value of derivative instruments classified as Level 3 in the fair value hierarchy:



	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2016			2015			2016			2015
Beginning balance	$	43,763		$	(14,676	)	$	63,154		$	—
Realized and unrealized gains (losses):
Included in Other Comprehensive Income	13,511			32,985			(2,798		)	40,488
Included in Operating revenues	(433		)	—			6,532			—
Purchases (acquisition of commodity contracts)	—			—			—			(22,179		)
Settlements	50			—			(9,997		)	—
Balance as of September 30	$	56,891		$	18,309		$	56,891		$	18,309

The significant unobservable inputs used in the valuation of the Company's commodity contracts categorized as Level 3 of the fair value hierarchy as of September 30, 2016 are as follows:



(In thousands, except range)	Fair Value as of September 30, 2016
Transaction Type	Assets		Liabilities		Valuation Technique	Unobservable Inputs	Range
Commodity contracts - power	$	56,891	$	—	Discounted cash flow	Forward price (per MWh)	$	15.4		-	$	85.5
					Option model	Volatilities	3.3		%	-	9.4		%

The sensitivity of the Company's fair value measurements to increases (decreases) in the significant unobservable inputs is as follows:



Significant Unobservable Input	Position	Impact on Fair Value Measurement
Increase (decrease) in forward price	Forward sale	Decrease (increase)
Increase (decrease) in implied volatilities	Purchase option	Increase (decrease)

Carrying Amount and Estimated Fair Value of Terra LLC Long-term Debt

The carrying amount and estimated fair value of the Company's long-term debt as of September 30, 2016 and December 31, 2015 is as follows:



	As of September 30, 2016				As of December 31, 2015
(In thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt, including current portion	$	4,012,266	$	4,131,352	$	4,562,649	$	4,357,322

Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2016

Schedule of Stockholders Equity

As of September 30, 2016, the following shares of TerraForm Power were outstanding:



Share Class:	Shares Outstanding	Shareholder(s)
Class A common stock	91,346,867	*
Class B common stock	48,202,310	SunEdison
Total Shares	139,549,177

———

Tabular disclosure of an entity's stock, including par or stated value per share, number and dollar amount of share subscriptions, shares authorized, shares issued, shares outstanding, number and dollar amount of shares held in an employee trust, dividend per share, total dividends, share conversion features, par value plus additional paid in capital, the value of treasury stock and other information necessary to a fair presentation, and EPS information. Stock by class includes common, convertible, and preferred stocks which are not redeemable or redeemable solely at the option of the issuer. Includes preferred stock with redemption features that are solely within the control of the issuer and mandatorily redeemable stock if redemption is required to occur only upon liquidation or termination of the reporting entity. If more than one issue is outstanding, state the title of each issue and the corresponding dollar amount; dollar amount of any shares subscribed but unissued and the deduction of subscriptions receivable there from; number of shares authorized, issued, and outstanding.

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Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-based Compensation (Tables)

9 Months Ended

Sep. 30, 2016

Schedule of Share-based Compensation, Restricted Stock Units Award Activity

The following table presents information regarding outstanding RSAs as of September 30, 2016, and changes during the nine months ended September 30, 2016:



	Number of RSAs Outstanding		Weighted Average Grant Date Fair Value Per Share		Aggregate Intrinsic Value (in millions)
Balance at January 1, 2016	1,859,616		$	2.93
Converted	(619,063	)	2.81
Forfeited	(874,358	)	2.14
Balance at September 30, 2016	366,195		$	8.51	$	5.1

Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity

The following table presents information regarding outstanding RSUs as of September 30, 2016, and changes during the nine months ended September 30, 2016:



	Number of RSUs Outstanding		Aggregate Intrinsic Value (in millions)		Weighted Average Remaining Contractual Life (in Years)
Balance at January 1, 2016	3,208,394
Granted	163,595
Converted	(315,766	)
Forfeited	(1,233,160	)
Balance at September 30, 2016	1,823,063		$	25.4	1.1

Schedule of Share-based Compensation, Stock Options, Activity

The following table presents information regarding outstanding stock options as of September 30, 2016 and changes during the period then ended:



	Number of Stock Options Outstanding		Weighted Average Exercise Price Per Share
Balance as of January 1, 2016	56,250		$	29.31
Expired	(56,250	)	29.31
Balance as of September 30, 2016	—		$	—

Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

Basic and diluted loss per share of the Company's Class A common stock for the three and nine months ended September 30, 2016 and 2015 was calculated as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands, except per share amounts)	2016			2015			2016			2015
Basic and diluted loss per share¹:
Net loss attributable to Class A common stockholders	$	(26,171	)	$	(820	)	$	(47,559	)	$	(22,136	)
Less: dividends paid on Class A shares and participating RSAs	—			(26,797		)	—			(46,879		)
Undistributed loss attributable to Class A shares	$	(26,171	)	$	(27,617	)	$	(47,559	)	$	(69,015	)

Weighted average basic and diluted Class A shares outstanding	90,860			77,522			89,140			61,777

Distributed earnings per share	$	—		$	0.33		$	—		$	0.73
Undistributed loss per share	(0.29		)	(0.36		)	(0.53		)	(1.12		)
Basic and diluted loss per share	$	(0.29	)	$	(0.03	)	$	(0.53	)	$	(0.39	)

———

(1)

Non-controlling Interests (Tables)

9 Months Ended

Sep. 30, 2016

Noncontrolling Interest [Abstract]

Schedule of Noncontrolling Interest

The following table presents the non-controlling interest balances reported in stockholders’ equity in the unaudited condensed consolidated balance sheets as of September 30, 2016 and December 31, 2015:



(In thousands)	September 30, 2016		December 31, 2015
SunEdison's non-controlling interest in Terra LLC	$	700,298	$	897,409
Non-controlling interests in renewable energy facilities	810,841		858,117
Total non-controlling interests	$	1,511,139	$	1,755,526

Redeemable Noncontrolling Interest



	Redeemable Non-controlling Interests
(In thousands)	Capital			Retained Earnings		Total
Balance as of December 31, 2015	$	167,199		$	8,512	$	175,711
Distributions	(8,420		)	—		(8,420		)
Acquisition accounting adjustment to redeemable non-controlling interest in acquired renewable energy facility	(780		)	—		(780		)
Net income	—			16,374		16,374
Balance as of September 30, 2016	$	157,999		$	24,886	$	182,885

Related Parties (Tables)

9 Months Ended

Sep. 30, 2016

Schedule of Commitments to Acquire Renewable Energy Facilities

The reduction in the Company's commitment amount during 2016 is detailed in the table below:



						Cash Committed
Description	Facility Category	Facility Type	Location	MW		(in thousands)
As of December 31, 2015¹				195.5		$	240,896
Acquired²	Distributed Generation	Solar	U.S.	(1.2	)	(3,085		)
Acquired³	Utility	Solar	U.S.	(18.0	)	(36,591		)
Terminated	Utility	Solar	U.S.	(159.8	)	(168,396		)
Terminated	Residential	Solar	U.S.	—		(3,808		)
Expired	Distributed Generation	Solar	U.S.	(16.5	)	(29,016		)
As of September 30, 2016				—		$	—

————

(1)


(2)	The preliminary purchase prices for these distributed generation facilities were reduced from $3.1 million to $2.8 million pursuant to the terms of the relevant agreements.


(3)	The preliminary purchase price for this utility scale solar facility was reduced from $36.6 million to $36.2 million pursuant to the terms of the relevant agreements.

Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

The following table reflects summarized financial information concerning the Company’s reportable segments for the three and nine months ended September 30, 2016 and 2015:



	Three Months Ended September 30, 2016											Three Months Ended September 30, 2015
(In thousands)	Solar		Wind			Corporate			Total			Solar		Wind			Corporate			Total
Operating revenues, net	$	125,644	$	52,474		$	—		$	178,118		$	139,248	$	24,043		$	—		$	163,291
Depreciation, accretion and amortization expense	29,243		28,400			345			57,988			33,027		10,640			—			43,667
Other operating costs and expenses	19,613		25,520			24,289			69,422			15,027		11,115			29,347			55,489
Interest expense, net	22,020		20,637			30,161			72,818			17,478		1,224			30,084			48,786
Other non-operating expenses (income), net	2,206		11			2,244			4,461			28,501		(506		)	(16,737		)	11,258
Income tax expense¹	—		—			1,140			1,140			—		—			1,673			1,673
Net income (loss)	$	52,562	$	(22,094	)	$	(58,179	)	$	(27,711	)	$	45,215	$	1,570		$	(44,367	)	$	2,418



	Nine Months Ended September 30, 2016											Nine Months Ended September 30, 2015
(In thousands)	Solar		Wind			Corporate			Total			Solar		Wind		Corporate			Total
Operating revenues, net	$	314,379	$	204,957		$	—		$	519,336		$	283,086	$	80,766	$	—		$	363,852
Depreciation, accretion and amortization expense	90,137		87,402			487			178,026			88,319		25,375		—			113,694
Other operating costs and expenses	57,745		73,014			64,780			195,539			45,855		30,107		82,343			158,305
Interest expense, net	89,365		64,366			89,380			243,111			52,863		2,075		66,664			121,602
Other non-operating expenses (income), net	975		230			4,493			5,698			16,209		6,611		(3,303		)	19,517
Income tax expense¹	—		—			3,115			3,115			—		—		2,842			2,842
Net income (loss)	$	76,157	$	(20,055	)	$	(162,255	)	$	(106,153	)	$	79,840	$	16,598	$	(148,546	)	$	(52,108	)
Balance Sheet
Total assets²	$	3,841,165	$	3,627,850		$	525,964		$	7,994,979		$	3,923,186	$	3,765,486	$	528,737		$	8,217,409

———


(1)	Income tax expense is not allocated to the Company's Solar and Wind segments.


(2)	Represents total assets as of September 30, 2016 and December 31, 2015, respectively.

Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2016