Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurement

v3.4.0.3
Fair Value Measurement
3 Months Ended
Mar. 31, 2016
Fair Value Disclosures [Abstract]  
Fair Value Measurement

Note 3. Fair Value Measurement

At March 31, 2016 and December 31, 2015, 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):

 

 

 

March 31, 2016

 

 

December 31, 2015

 

 

 

Carrying Value

 

 

Fair Value

 

 

Carrying Value

 

 

Fair Value

 

Lines of credit

 

$

268,100

 

 

$

268,100

 

 

$

197,000

 

 

$

197,000

 

Syndicated term loans

 

 

179,687

 

 

 

179,687

 

 

 

169,344

 

 

 

169,344

 

Bank term loan

 

 

46,774

 

 

 

49,330

 

 

 

30,739

 

 

 

32,692

 

Note payable

 

 

33,748

 

 

 

33,536

 

 

 

32,781

 

 

 

32,568

 

Solar asset-backed notes

 

 

104,478

 

 

 

112,568

 

 

 

104,900

 

 

 

110,103

 

Total

 

$

632,787

 

 

$

643,221

 

 

$

534,764

 

 

$

541,707

 

At March 31, 2016, the fair value of the Company’s lines of credit, syndicated term loans, and bank term loan due in September 2022 approximates their carrying values because their interest rates are variable rates that approximate rates currently available to the Company. At December 31, 2015, the fair value of the Company’s lines of credit and syndicated term loans approximates their carrying values because their interest rates are variable rates that approximate rates currently available to the Company. At March 31, 2016 and December 31, 2015, the fair value of the Company’s bank term loan due in April 2022, note payable and asset-backed notes 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 techniques 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.

The Company determines the fair value of its warrants issued using the Black-Scholes option-pricing model. The significant unobservable input used in the fair value measurement of the warrant liability was the expected volatility of the Company. Generally, increases (decreases) in the expected volatility of the Company would result in a directionally similar impact to the measurement of the Company’s stock options.

At March 31, 2016 and December 31, 2015, financial instruments measured at fair value on a recurring basis, based upon the fair value hierarchy are as follows (in thousands):

 

 

 

March 31, 2016

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Derivative liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swaps

 

$

 

 

$

6,194

 

 

$

 

 

$

6,194

 

Warrants

 

 

 

 

 

 

 

 

20

 

 

 

20

 

Total

 

$

 

 

$

6,194

 

 

$

20

 

 

$

6,214

 

 

 

 

December 31, 2015

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Derivative liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swaps

 

$

 

 

$

921

 

 

$

 

 

$

921

 

Warrants

 

 

 

 

 

 

 

 

557

 

 

 

557

 

Total

 

$

 

 

$

921

 

 

$

557

 

 

$

1,478