Note 12 - Equity-Method Investment

9 Months Ended

Sep. 30, 2015

Equity Method Investments and Joint Ventures Disclosure [Text Block]

Note 12.

Equity-Method Investment

In October 2014, we acquired a 99.9% membership interest in a limited liability company managed by U.S. Bancorp Community Development Corporation with an initial equity contribution of $4.1 million. We made additional equity contributions to the entity of $5.7 million and $17.1 million, respectively, in the three and nine-month periods ended September 30, 2015. We are obligated to make $49.8 million of contributions to the entity over a two-year period ending October 2016, $21.2 million of which had been paid as of September 30, 2015.

This investment generates new markets tax credits under the New Markets Tax Credit Program (“NMTC Program”). The NMTC Program was established by Congress in 2000 to spur new or increased investments into operating businesses and real estate projects located in low-income communities.

While U.S. Bancorp Community Development Corporation exercises management control over the limited liability company, due to the economic interest we hold in the entity, we determined our ownership portion of the entity was appropriately accounted for using the equity method.

The following amounts related to this equity-method investment were recorded in our Consolidated Balance Sheets (in thousands):

	September 30 , 201 5		December 31, 2014
Carrying value, recorded as a component of other non-current assets	$	28,147	$	33,282
Present value of obligation associated with future equity contributions, recorded as a component of accrued liabilities and other long-term liabilities		28,061		32,177

The following amounts related to this equity-method investment were recorded in our Consolidated Statements of Operations (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Asset impairments to write investment down to fair value	$	4,131	$	-	$	12,391	$	-
Our portion of the partnership’s operating losses		1,731		-		5,196		-
Non-cash interest expense related to the amortization of the discounted fair value of future equity contributions		155		-		549		-
Tax benefits and credits generated		7,414		-		22,316		-