Note 5. Commitments and Contingencies

Land Use Commitments

The Partnership is a party to various agreements that provide for payments to landowners for the right to use the land upon which projects under PPAs are located.

The total minimum lease and easement commitments at May 31, 2016 under these land use agreements are as follows:

(in thousands)

2016 (remaining

six months)

2017

2018

2019

2020

Thereafter

Total

Land use payments

611

1,293

1,329

1,686

1,742

58,299

64,960

Solar Energy System Performance Warranty

Lease agreements require the Partnership to undertake a system output performance warranty. The Partnership has recorded in “Accounts payable and other current liabilities” amounts related to these system output performance warranties totaling $0.1 million and $0.2 million as of May 31, 2016 and November 30, 2015, respectively. The Partnership has also recorded in “Other current assets” amounts of $0.1 million and $0.2 million as of May 31, 2016 and November 30, 2015, respectively, relating to anticipated performance warranty reimbursements from the O&M provider.

The following table summarizes accrued solar energy systems performance warranty activity for the each of three and six months ended May 31, 2016 and June 28, 2015:

	Three Months Ended						Six Months Ended
	May 31,			June 28,			May 31,			June 28,
(in thousands)	2016			2015			2016			2015
Balance at the beginning of the period	$	226		$	487		$	237		$	525
Settlements during the period		(80	)		(58	)		(156	)		(120	)
Adjustments during the period		(6	)		(9	)		59			15
Balance at the end of the period	$	140		$	420		$	140		$	420

Asset Retirement Obligations (“ARO”)

The Partnership’s AROs are based on estimated third-party costs associated with the decommissioning of the applicable project assets. These costs may increase or decrease in the future as a result of changes in regulations, engineering designs and technology, permit modifications, inflation or other factors. Decommissioning activities generally are made over a period of time commencing at the end of the system’s life.

The following table summarizes ARO activity for each of the three and six months ended May 31, 2016 and June 28, 2015:

	Three Months Ended					Six Months Ended
	May 31,			June 28,		May 31,			June 28,
(in thousands)	2016			2015		2016			2015
Balance at the beginning of the period	$	10,658		$	903	$	9,992		$	—
ARO assumed in acquisition		981			2,130		1,528			2,130
Accretion expense		127			—		246			—
Liabilities incurred during the period		—			3,667		—			4,570
Adjustments to ARO during the period		(224	)		—		(224	)		—
Balance at the end of the period	$	11,542		$	6,700	$	11,542		$	6,700

Legal Proceedings

In the normal course of business, the Partnership may be notified of possible claims or assessments. The Partnership will record a provision for these claims when it is both probable that a liability has been incurred and the amount of the loss, or a range of the potential loss, can be reasonably estimated. These provisions are reviewed regularly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information or events pertaining to a particular case.

Although the Partnership may, from time to time, be involved in litigation and claims arising from its operations in the ordinary course of business, the Partnership is not a party to any litigation or governmental or other proceeding that the Partnership believes will have a material adverse impact on its financial position, results of operations, or liquidity.

Environmental Contingencies

The Partnership reviews its obligations as they relate to compliance with environmental laws, including site restoration and remediation. During each of the three and six months ended May 31, 2016 and June 28, 2015, there were no known environmental contingencies that required the Partnership to recognize a liability.