DERIVATIVES

As part of the Company’s risk management strategy, the Company has entered into derivative instruments which include interest rate swaps, foreign currency contracts and cross currency swaps to mitigate interest rate and foreign currency exposure. If the Company elects to do so and if the instrument meets the criteria specified in ASC 815, Derivatives and Hedging, the Company designates its derivative instruments as cash flow hedges. The Company enters into interest rate swap agreements in order to hedge the variability of expected future cash interest payments. Cross currency swaps are used to reduce risks arising from the change in fair value of certain foreign currency denominated assets and liabilities in order to minimize the impact of foreign currency fluctuations on operating results. The Company does not use derivative instruments for speculative purposes.

Activities related to derivative instruments were reported in the line items as of and for the periods indicated, as follows:



(In thousands)		Fair Value As of
Type of Instrument	Balance Sheet Classification	June 30, 2016			December 31, 2015
Derivatives designated as hedging:
Interest rate swaps	Other assets (liabilities)	$	(2,329	)	$	6,210
	Accumulated other comprehensive loss (income)	2,329			(6,210		)
Cross currency swaps	Other assets	50,566			64,083
	Accumulated other comprehensive loss	9,779			1,202

Derivatives not designated as hedging:
Interest rate swaps	Other assets	$	412		$	5,194
Foreign currency forward contracts	Other (liabilities) assets	(9,549		)	21,383



(In thousands)		Three Months Ended June 30,						Six Months Ended June 30,
Type of Instrument	Statement of Operations Classification	2016			2015			2016			2015
Derivatives not designated as hedging:
Interest rate swaps	Interest income	$	(1,813	)	$	(1,064	)	$	(4,782	)	$	(470	)
Currency forward contract	Other expenses, net	14,021			—			32,184			—

The foreign currency contracts were set up in August of 2015, as such there was no income or expense as of June 30, 2015. Certain derivative contracts contain provisions providing the counterparties a lien on specific assets as collateral. There was no cash collateral received or pledged as of June 30, 2016 and December 31, 2015 related to the Company's derivative transactions.

Derivatives Designated as Hedges

Interest Rate Swaps

The Company has entered into interest rate swap agreements to hedge variable rate project level debt. These interest rate swaps qualify for hedge accounting and are designated as cash flow hedges. Under the interest rate swap agreements, the power plant pays a fixed rate and the counterparty to the agreement pays a variable interest rate. No amounts deferred in other comprehensive income were reclassified into earnings during the three and six months ended June 30, 2016 and 2015.

Cross Currency Swaps

The Company has entered into cross currency swap agreements to hedge its exposure to foreign currency fluctuations on debt denominated in U.S. dollars. These cross currency rate swaps qualify for hedge accounting and were designated as cash flow hedges. The amounts deferred in other comprehensive income and reclassified into earnings during the period related to these cross currency swaps was $5.9 million. There was no ineffectiveness recorded for the periods presented.

Derivatives Not Designated as Hedges

Interest Rate Swaps

The Company has entered into interest rate swap agreements that economically hedge the cash flows for project level debt. These interest rate swaps pay a fixed rate and the counterparties to the agreements pay a variable interest rate. The changes in fair value are recorded in interest expense, net in the consolidated statements of operations as these hedges are not accounted for under hedge accounting.

Foreign Currency Contracts

The Company transacts business in various foreign currencies and has established a program that primarily utilizes foreign currency contracts to offset the risks associated with the effects of certain foreign currency exposures. The Company does not use these foreign currency contracts for trading purposes nor does it designate these forward contracts as hedging instruments pursuant to ASC 815. As of June 30, 2016, the notional amounts of the foreign currency contracts the Company held to purchase U.S. dollars in exchange for other major international currencies were $293.1 million. Included in the Company’s non-operating income was $14.0 million and $32.2 million of net losses related to these foreign currency contracts for the three and six months ended June 30, 2016, respectively, that hedge the purchase of foreign currencies for investments in acquisitions and debt extinguishments was a result of devaluation as compared to the U.S. dollar in the Brazilian real (BRL), Chinese yuan renminbi (CNY), Indian rupee (INR), Malaysian ringgit (MYR), South African rand (ZAR) and Thai baht (THB). The fair value of the Company’s outstanding foreign currency forward contracts was a net liability of $9.0 million as of June 30, 2016. The cash flow related to foreign currency contracts that remain outstanding are classified as operating activities. The cash flows associated with foreign currency contract settlements are classified as investing activities. The net loss relating to investments is partially offset by the lower cost associated with the cash flows related to the acquisitions and debt extinguishments that were hedged.

Notional Amounts



(In thousands)	Notional Amounts as of June 30, 2016
Derivatives designated as hedges:
Interest rate swaps (USD)	121,213
Cross currency swaps (USD)	121,213
Derivatives not designated as hedges:
Interest rate swaps (USD)	113,612
Currency forward contracts (BRL)	87,333
Currency forward contracts (CNY)	34,192
Currency forward contracts (INR)	85,904
Currency forward contracts (MYR)	7,940
Currency forward contracts (THB)	11,408
Currency forward contracts (ZAR)	38,691
Currency forward contracts (USD)	27,651