Unconsolidated Investments

The Company's unconsolidated investments consist of the following for the periods presented below (in thousands):



					Percentage of Ownership
	June 30,		December 31,		June 30,		December 31,
	2017		2016		2017		2016
South Kent	$	5,487	$	1,537	50.0	%	50.0	%
Grand	4,952		3,459		45.0	%	45.0	%
K2	100,044		97,051		33.3	%	33.3	%
Armow	130,078		131,247		50.0	%	50.0	%
Unconsolidated investments	$	240,561	$	233,294

Basis Amortization of Unconsolidated Investments

The cost of the Company’s investment in the net assets of unconsolidated investments was higher than the fair value of the Company’s equity interest in the underlying net assets of its unconsolidated investments. The basis differences were attributable to property, plant and equipment and PPAs and are being amortized over the particular assets useful life. For the three and six months ended June 30, 2017, the Company recorded basis difference amortization for its unconsolidated investments of $2.8 million and $5.6 million, respectively, and for the same periods in 2016, the Company recorded basis difference amortization of $1.3 million and $2.5 million, respectively, in earnings in unconsolidated investments, net on the consolidated statements of operations.

Suspension of Equity Method Accounting

As discussed in Note 2, Summary of Significant Accounting Policies in the Company's 2016 Form 10-K, the Company may suspend recognition of equity method earnings when the Company receives distributions in excess of the carrying value of its investment, and the Company is not liable for the obligations of the investee nor otherwise committed to provide financial support. The Company records gains resulting from such excess distributions in the period the distributions occur. Additionally, when the Company's carrying value in an unconsolidated investment is zero and the Company is not liable for the obligations of the investee nor otherwise committed to provide financial support, the Company does not recognize equity in earnings (losses) or equity in other comprehensive income of unconsolidated investments.

As of June 30, 2017, none of the Company's unconsolidated investments were in suspension. As of June 30, 2016, the Company's equity method balances for South Kent and Grand were zero. In accordance with ASC 323, Investments - Equity Method and Joint Ventures, the Company suspended recognition of South Kent's and Grand's equity method earnings or losses until the fourth quarter of 2016 when their cumulative equity method earnings exceeded cumulative distributions received and cumulative equity method losses. As the Company has no explicit or implicit commitment to fund losses at the unconsolidated investments, the Company recorded distributions received in excess of the carrying amount of its unconsolidated investments as gains. Earnings in unconsolidated investments, net as reported on the consolidated statements of operations attributable to South Kent and Grand included $7.5 million and $9.2 million for the three and six months ended June 30, 2016, respectively, in distributions received in excess of the carrying amount of the Company's investment.

During the suspension period, the Company maintains a memo ledger that records the components of the suspended activity. As of June 30, 2016, the memo ledger balance was made up of distributions received in excess of the carrying amount of the Company's investment of $9.2 million, suspended equity losses of $1.9 million and suspended other comprehensive income of $0.1 million.

Aggregate Financial Data for Unconsolidated Investees

The following summarizes the statements of operations, in aggregate, for the unconsolidated investees (in thousands):



	Three months ended June 30,					Six months ended June 30,
	2017		2016⁽¹⁾			2017		2016⁽¹⁾
Revenue	$	82,744	$	54,147		$	183,103	$	126,563
Cost of revenue	28,149		23,618			57,738		46,045
Operating expenses	919		578			1,633		1,022
Other expense	15,135		30,177			37,976		68,267
Net income (loss)	$	38,541	$	(226	)	$	85,756	$	11,229


⁽¹⁾	Results for the three and six months ended June 30, 2016 do not include Armow, which was acquired in October 2016.

Significant Equity Method Investees

The following table presents summarized statements of operations information for the three and six months ended June 30, 2017 and 2016 (in thousands) as required for the Company's significant equity method investee, South Kent pursuant to Regulation S-X Rule 10-01(b)(1):

South Kent



	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017		2016
Revenue	$	26,727		$	21,376		$	58,881	$	49,905
Cost of revenue	7,480			8,389			15,931		16,385
Operating expenses	278			239			467		427
Other expense	(170		)	13,268			5,973		32,957
Net income (loss)	$	19,139		$	(520	)	$	36,510	$	136