Annual report pursuant to Section 13 and 15(d)

Fair Value Measurement

v3.8.0.1
Fair Value Measurement
12 Months Ended
Dec. 31, 2017
Fair Value Disclosures [Abstract]  
Fair Value Measurement
Fair Value Measurement
At December 31, 2017 and 2016, the carrying value of receivables, accounts payable, accrued expenses and distributions payable to noncontrolling interests approximates fair value due to their short-term nature. The carrying values and fair values of debt instruments are as follows (in thousands):
 
 
December 31, 2017
 
December 31, 2016
 
 
Carrying Value
 
Fair Value
 
Carrying Value
 
Fair Value
Bank line of credit
 
$
247,000

 
$
247,000

 
$
244,000

 
$
244,000

Senior debt
 
808,455

 
807,698

 
442,420

 
441,657

Subordinated debt
 
111,488

 
111,095

 
42,985

 
42,986

Securitization debt
 
95,821

 
96,999

 
101,298

 
102,869

Note Payable
 

 

 
36,232

 
35,396

SREC Loans
 
32,181

 
32,183

 
31,088

 
31,088

Total
 
$
1,294,945

 
$
1,294,975

 
$
898,023

 
$
897,996


At December 31, 2017 and 2016, the fair value of the Company’s lines of credit, and certain senior, subordinated, and SREC loans approximate their carrying values because their interest rates are variable rates that approximate rates currently available to the Company. At December 31, 2017 and 2016, the fair value of the Company’s other debt instruments are based on rates currently offered for debt with similar maturities and terms. The Company’s fair value of the debt instruments fell under the Level 3 hierarchy. These valuation approaches involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market.
The Company determines the fair value of its interest rate swaps using a discounted cash flow model which incorporates an assessment of the risk of non-performance by the interest rate swap counterparty and an evaluation of the Company’s credit risk in valuing derivative instruments. The valuation model uses various inputs including contractual terms, interest rate curves, credit spreads and measures of volatility.
At December 31, 2017 and 2016, financial instruments measured at fair value on a recurring basis, based upon the fair value hierarchy are as follows (in thousands):
 
 
December 31, 2017
 
 
Level 1
 
Level 2
 
Level 3
 
Total
Derivative assets:
 
 
 
 
 
 
 
 
Interest rate swaps
 

 
1,917

 

 
$
1,917

Total
 
$

 
$
1,917

 
$

 
$
1,917

 
 
 
 
 
 
 
 
 
Derivative liabilities:
 
 
 
 
 
 
 
 
Interest rate swaps
 

 
8,568

 

 
$
8,568

Total
 
$

 
$
8,568

 
$

 
$
8,568

 
 
December 31, 2016
 
 
Level 1
 
Level 2
 
Level 3
 
Total
Derivative assets:
 
 
 
 
 
 
 
 
Interest rate swaps
 

 
1,632

 

 
$
1,632

Total
 
$

 
$
1,632

 
$

 
$
1,632

 
 
 
 
 
 
 
 
 
Derivative liabilities:
 
 
 
 
 
 
 
 
Warrants
 

 

 
20

 
$
20

Total
 
$

 
$

 
$
20

 
$
20