Variable Interest Entities

9 Months Ended

Sep. 30, 2019

Variable Interest Entities [Abstract]

The Company consolidates variable interest entities (VIEs) in which it holds a variable interest and is the primary beneficiary. The Company has determined that Logan's Gap, Panhandle 1, Panhandle 2, Post Rock, Amazon Wind, Broadview Energy Holdings LLC (a subsidiary of Broadview Project), MSM, Stillwater New Energy Holdings LLC, North Kent Wind 1 LP Holdings LP. and Pattern Belle River GP Holdings Inc. are VIEs and as the managing member of the respective partnerships, it is the primary beneficiary by reference to the power and benefits criterion under ASC 810, Consolidation. The Company considered responsibilities within the contractual agreements, which grant it the power to direct the activities of the VIE that most significantly impact the VIE's economic performance. Such activities include management of the wind farms' operations and maintenance, budgeting, policies and procedures. In addition, the Company has the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIEs on the basis of the income allocations and cash distributions.

The Company’s equity method investment in Pattern Development is considered to be a VIE primarily because the total equity at risk is not sufficient to permit Pattern Development to finance its activities without additional subordinated financial support by the equity holders. The Company does not hold the power or benefits to be the primary beneficiary and does not consolidate the VIE. The carrying value of its unconsolidated investment in Pattern Development was $123 million as of September 30, 2019. The Company's maximum exposure to loss is equal to the carrying value of its investment in Pattern Development.

The following table summarizes the carrying amounts of major consolidated balance sheet items for consolidated VIEs as of September 30, 2019 and December 31, 2018 (in millions). All assets (excluding deferred financing costs, net and intangible assets, net) and liabilities of a consolidated VIE presented below are (1) assets that can be used only to settle obligations of the VIE or (2) liabilities for which creditors do not have recourse to the general credit of the primary beneficiary.



	September 30, 2019		December 31, 2018
Assets
Current assets:
Cash and cash equivalents	$	32	$	36
Restricted cash	—		4
Trade receivables	19		13
Prepaid expenses	3		6
Other current assets	4		2
Total current assets	58		61

Restricted cash	2		3
Construction in progress	—		1
Property, plant and equipment, net	2,083		2,156
Unconsolidated investments	54		—
Deferred financing costs, net	1		2
Intangible assets, net	11		12
Other assets	18		12
Total assets	$	2,227	$	2,247

Liabilities
Current liabilities:
Accounts payable and other accrued liabilities	$	26	27
Accrued construction costs	—		1
Current portion of long-term debt, net	5		4
Other current liabilities	5		5
Total current liabilities	36		37

Long-term debt, net	150		149
Intangible liability, net	45		48
Asset retirement obligations	59		57
Other long-term liabilities	42		36
Deferred revenue	26		26
Total liabilities	$	358	$	353