Note 4. Investment in Unconsolidated Affiliates

On September 20, 2016, OpCo entered into a Contribution Agreement with SunPower and SunPower AssetCo to acquire a 49% interest in a substantially completed, 102 MW photovoltaic solar generating facility located in Kings County, California (the “Henrietta Project”) for $134.0 million in cash (the “Henrietta Acquisition”). The Henrietta Acquisition closed on September 29, 2016 and the Partnership recorded an investment of $134.4 million after consideration of acquisition related costs, working capital adjustments and noncontrolling interest.

On November 11, 2016, OpCo entered into the Stateline Purchase Agreement with First Solar and First Solar Asset Management to acquire a 34% interest in a substantially completed, 300 MW photovoltaic solar generating facility located in San Bernardino, California (the “Stateline Project”) for $329.5 million (the “Stateline Acquisition”). The Stateline Acquisition closed on December 1, 2016. Please read “Note 17—Subsequent Events” for further details.

As of November 30, 2016, the Partnership owns a 49% ownership interest in each of SG2 Holdings, North Star Holdings, Lost Hills Blackwell Holdings and Henrietta Holdings. An affiliate of Southern Company, which is not affiliated with the Partnership, owns the other 51% ownership interest in SG2 Holdings, North Star Holdings, Lost Hills Blackwell Holdings and Henrietta Holdings. The minority membership interests are accounted for as equity method investments. The following table summarizes the activity of the Partnership’s investments in its unconsolidated affiliates during the year ended November 30, 2016 and eleven months ended November 30, 2015.

	Year Ended			Eleven Months Ended
	November 30,			November 30,
Projects	2016			2015
(in thousands)
Balance at the beginning of the period or as of IPO	$	352,070		$	354,453
Investments in its unconsolidated affiliates during the period		134,371			—
Equity in earnings in unconsolidated affiliates (1)		18,341			9,055
Distributions from unconsolidated affiliates		(29,704	)		(11,438	)
Balance at the end of the period	$	475,078		$	352,070

(1)

The net income (loss) used to determine the Partnership’s equity in earnings of unconsolidated affiliates reflects adjustments pursuant to the equity method of accounting, including the amortization of basis differences resulting from the Partnership’s proportionate share of certain equity method investees’ net assets exceeding their carrying values.

The difference between the amounts at which the Partnership’s investments in unconsolidated affiliates are carried and the Partnership’s proportionate share of the equity method investee’s net assets for equity method investments was $83.2 million and $56.5 million as of November 30, 2016 and November 30, 2015, respectively. The Partnership accretes the basis difference over the life of the underlying assets and the accretion was $1.7 million and $0.7 million for the year ended November 30, 2016 and eleven months ended November 30, 2015, respectively.

The following table presents summarized financial information of SG2 Holdings, North Star Holdings, Lost Hills Blackwell Holdings and Henrietta Holdings as derived from the consolidated financial statements of the affiliates for the year ended November 30, 2016, the eleven months ended November 30, 2015, and the year ended December 31, 2014:

	Year Ended		Eleven Months Ended		Year Ended
	November 30,		November 30,		December 31,
(in thousands)	2016		2015		2014
Summary statement of operations information:
Revenue	$	72,099	$	55,227	$	1,722
Operating expenses		47,385		37,342		3,367
Net income (loss)		24,970		18,187		(1,583	)

	As of
	November 30,		November 30,
	2016		2015
Summary balance sheet information:
Current assets	$	45,086	$	35,002
Long-term assets		1,498,820		1,114,854
Current liabilities		6,250		8,035
Long-term liabilities		12,329		9,200