Our Portfolio |
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Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Our Portfolio |
As of June 30, 2016, our Portfolio included approximately $1.4 billion of financing receivables, investments, real estate and equity method investments on our balance sheet. The financing receivables and investments are typically collateralized by contractually committed debt obligations of government entities or private high credit quality obligors and are often supported by additional forms of credit enhancement, including security interests and supplier guaranties. The real estate is typically land and related lease intangibles for long-term leases to wind and solar projects with high credit quality obligors. The equity method investments represent our minority equity investments in renewable energy projects. The following is an analysis of our Portfolio by type of obligor and credit quality as of June 30, 2016:
The components of financing receivables as of June 30, 2016 and December 31, 2015, were as follows:
In accordance with the terms of certain purchase agreements related to financing receivables or other investments, payments of the purchase price are scheduled to be made over time, generally within 12 months of entering into the transaction, and as a result, we have recorded deferred funding obligations of $78 million and $108 million as of June 30, 2016 and December 31, 2015, respectively. Approximately $42 million of those investments were pledged as collateral against these obligations. The following table provides a summary of our anticipated maturity dates of our financing receivables and investments and the weighted average yield for each range of maturities as of June 30, 2016:
Our real estate is leased to renewable energy projects, typically under long-term triple net leases with expiration dates that range between the years 2033 and 2051 under the initial terms and 2047 and 2080 if all extensions are exercised. The components of our real estate portfolio as of June 30, 2016 and December 31, 2015, were as follows:
There are conservation easement agreements covering several of our properties that limit the use of the property upon expiration of the respective leases. The real estate related intangible assets are amortized on a straight-line basis over the contracted lease term.
As of June 30, 2016, the future amortization expense of these intangible assets and the future minimum rental income payments under our land lease agreements are as follows:
We make minority interest investments in renewable energy projects operated by renewable energy companies. Through these equity method investments, we indirectly own minority interests in a number of limited liability holding companies that own 12 operating wind projects. In June 2016, we acquired from a third party interests in several limited liability holding companies that collectively own approximately 43 megawatts of operating distributed commercial, industrial and residential solar projects. We receive a priority distribution from these projects until negotiated financial targets are achieved at which time the partnerships will flip and the company that operates the project will receive a larger portion of the cash flows and we will have an on-going residual interest. An affiliate of AES Corporation (“AES”) is the operator and project sponsor of these projects. We financed approximately $33 million of the approximately $42 million purchase price with the seller through a two-year non-interest bearing loan secured by our ownership interest in the holding companies. We have recorded our purchase obligation to the seller as a deferred funding obligation on our balance sheet and will reflect an imputed interest expense on the outstanding balance on the investment interest expense line of our income statement. See Note 2 for our accounting treatment of these investments and Note 13 for the aggregate financial position and results of operations of the significant holding companies. We had no financing receivables, investments or leases that were impaired or on nonaccrual status as of June 30, 2016 or December 31, 2015. There was no provision for credit losses for the three or six months ended June 30, 2016 or 2015. We did not have any loan modifications that qualify as trouble debt restructurings for the three or six months ended June 30, 2016 or 2015. |