|9 Months Ended|
Sep. 30, 2020
|Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]|
|Energy Assets||ENERGY ASSETS
Energy assets consist of the following:
Included in the above energy assets are financing lease assets and associated accumulated depreciation and amortization, as follows:
Depreciation and amortization expense on the above energy assets, net of deferred grant amortization, included in the condensed consolidated statements of income is as follows:
Included in the above depreciation and amortization expense on energy assets is depreciation and amortization on financing lease assets, as follows:
The Company evaluates long-lived assets for impairment as events or changes in circumstances indicate the carrying value of these assets may not be fully recoverable. Examples of such triggering events applicable to our assets include a significant decrease in the market price of a long-lived asset or asset group or a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset or asset group. The Company performs its annual long-lived asset impairment testing in the fourth quarter of each year. In addition to the annual impairment test, the Company regularly assesses whether a triggering event has occurred which would require interim impairment testing.
During the three months ended September 30, 2020, the Company performed an engine overhaul on one of its energy assets, however, the engine consistently failed to achieve emissions compliance and the Company considered the engine unsalvageable. As a result of this event, the Company performed an impairment analysis on this energy asset group and recorded an impairment charge of $1,028, which fully impaired this asset group. The impairment charge is included in selling, general and administrative expenses within the condensed consolidated statements of income for the three and nine months ended September 30, 2020.
The Company assessed the impact that the current macroeconomic environment surrounding the COVID-19 pandemic has or is expected to have on the business, and concluded that it was not a triggering event for impairment purposes and there was no indication of impairment of long-lived assets, except as indicated above, for the nine months ended September 30, 2020.
The Company capitalizes interest costs relating to construction financing during the period of construction, which is included in energy assets, net in the Company’s condensed consolidated balance sheets. Capitalized interest is amortized to cost of revenues in the Company’s condensed consolidated statements of income on a straight line basis over the useful life of the associated energy asset.
The Company capitalized interest costs as follows:
As of September 30, 2020 and December 31, 2019, there are three ESPC asset projects which are included within energy assets, net on the Company’s condensed consolidated balance sheets. The Company controls and operates the assets as well as obtains financing during the construction period of the assets. As the Company has an obligation to the customer for performance of the
asset, the Company records a liability associated with these energy assets, although, the customer is responsible for payments to the lender based on the energy asset’s production. As of September 30, 2020 and December 31, 2019, the liabilities recognized in association with these assets were $11,077 and $10,243, respectively, of which $225 and $827, respectively, have been classified as the current portion and are included in accrued expenses and other current liabilities. The remainder is included in other liabilities in the accompanying condensed consolidated balance sheets.
During the three months ended June 30, 2020, the Company acquired one energy project, which did not constitute a business in accordance with ASC 805-50, Business Combinations. The Company acquired the energy project in exchange for a total purchase price of $1,251, which included cash of $1,031 paid by the Company, issuance of a promissory note payable to the sellers of $204, detailed further in Note 16, and $16 of rollover equity in connection with shares of one of the Company’s subsidiaries issued to the sellers. As of September 30, 2020, the Company has remaining deferred purchase price consideration on previously closed projects of $1,446 that will be paid upon final completion of the respective projects and throughout 2020. The Company has a definitive agreement from prior periods, which has recently been amended, to purchase eight additional solar projects from developers for a total purchase price of $10,242, of which the Company has not made any payments to the developers for those projects.
As of September 30, 2020, the Company had $1,484 in asset retirement obligations (“AROs”) assets recorded in project assets, net of accumulated depreciation, and $1,622 in ARO liabilities recorded in accrued expenses and other current liabilities and other liabilities. During the three and nine months ended September 30, 2020, the Company recorded $20 and $58, respectively, of depreciation expense related to the ARO assets. During the three and nine months ended September 30, 2020, the Company recorded $21 and $64, respectively, in accretion expense to the ARO liabilities, which is reflected in the accretion of ARO and contingent consideration on the condensed consolidated statements of cash flows. The Company’s current ARO liabilities relate to the removal of equipment and pipelines at certain renewable gas projects and obligations related to the decommissioning of certain solar facilities and wind turbines.
The entire disclosure for other assets. This disclosure includes other current assets and other noncurrent assets.
No definition available.