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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 ______________________________________________________________
FORM 10-Q
 ______________________________________________________________
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2014
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission File Number: 001-36542
 ______________________________________________________________
TerraForm Power, Inc.
(Exact name of registrant as specified in its charter)
 ______________________________________________________________
Delaware
 
46-4780940
(State or other jurisdiction of
incorporation or organization)
 
(I. R. S. Employer
Identification No.)
 
 
 
12500 Baltimore Avenue
Beltsville, Maryland
 
20705
(Address of principal executive offices)
 
(Zip Code)
(443) 909-7200
(Registrant’s telephone number, including area code)
 ______________________________________________________________
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    o  Yes    x  No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in
Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
 
o
  
Accelerated filer
 
o
 
 
 
 
Non-accelerated filer
 
x (Do not check if a smaller reporting company)
  
Smaller reporting company
 
o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  o     No  x
As of October 31, 2014, there were 30,652,336 shares of Class A common stock outstanding, par value $0.01 per share, and 64,526,654 shares of Class B common stock outstanding, par value $0.01 per share, and 5,840,000 shares of Class B1 common stock outstanding, par value $0.01 per share.
 



TERRAFORM POWER, INC. AND SUBSIDIARIES
Table of Contents
Form 10-Q

 
 
Page
 
 
 
 
Item 1.
 
 
 
 
 
Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months ended September 30, 2014 and 2013
 
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months ended September 30, 2014 and 2013
 
Unaudited Condensed Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013
 
 
Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months ended September 30, 2014 and 2013
 
Item 2.
Item 3.
Item 4.
 
 
 
 
 
 
 
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
 





PART I—FINANCIAL INFORMATION

Item 1.
Financial Statements.

TERRAFORM POWER, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2014
 
2013
 
2014
 
2013
Operating revenues:
 
 
 
 
 
 
 
 
Energy
 
$
41,278

 
$
2,578

 
$
59,692

 
$
6,884

Incentives
 
11,663

 
2,525

 
22,832

 
5,409

Incentives - affiliate
 
280

 
298

 
774

 
746

Total operating revenues
 
53,221

 
5,401

 
83,298

 
13,039

Operating costs and expenses:
 
 
 
 
 
 
 
 
Cost of operations
 
4,205

 
354

 
6,051

 
780

Cost of operations - affiliate
 
2,774

 
157

 
3,911

 
478

General and administrative
 
2,984

 
17

 
3,767

 
92

General and administrative - affiliate
 
5,051

 
1,418

 
8,783

 
3,568

Acquisitions costs
 
1,302

 

 
2,537

 

Acquisition costs - affiliate
 
2,826

 

 
2,826

 

Formation and offering related fees and expenses
 
536

 

 
3,399

 

Depreciation and accretion
 
13,052

 
1,341

 
21,053

 
3,542

Total operating costs and expenses
 
32,730

 
3,287

 
52,327

 
8,460

Operating income
 
20,491

 
2,114

 
30,971

 
4,579

Other expense (income):
 
 
 
 
 
 
 
 
Interest expense, net
 
22,466

 
1,963

 
53,217

 
4,716

Gain on extinguishment of debt, net
 
(9,580
)
 

 
(7,635
)
 

Loss on foreign currency exchange
 
6,240

 

 
6,914

 

Other, net
 
80

 

 
582

 
(1
)
Total other expenses, net
 
19,206

 
1,963

 
53,078

 
4,715

Income (loss) before income tax benefit
 
1,285

 
151

 
(22,107
)
 
(136
)
Income tax provision (benefit)
 
2,806

 
77

 
(4,069
)
 
(60
)
Net income (loss)
 
$
(1,521
)
 
$
74

 
$
(18,038
)
 
$
(76
)
Less: Predecessor income (loss) prior to initial public offering on July 23, 2014
 
6,270

 
 
 
(10,357
)
 
 
Net loss subsequent to initial public offering
 
(7,791
)
 
 
 
(7,681
)
 
 
Less: Net loss attributable to non-controlling interest
 
(3,777
)
 
 
 
(3,667
)
 
 
Net loss attributable to TerraForm Power, Inc. Class A common stockholders
 
$
(4,014
)
 
 
 
$
(4,014
)
 
 
 
 
 
 
 
 
 
 
 
Weighted average number of shares:
 
 
 
 
 
 
 
 
Class A common stock - Basic and Diluted
 
27,066

 
 
 
27,066

 
 
Loss per share:
 
 
 
 
 
 
 
 
Class A common stock - Basic and Diluted
 
$
(0.15
)
 
 
 
$
(0.15
)
 
 


See accompanying notes to unaudited condensed consolidated financial statements.

1


TERRAFORM POWER, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)

 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2014
 
2013
 
2014
 
2013
Net (loss) income
 
$
(1,521
)
 
$
74

 
$
(18,038
)
 
$
(76
)
Other comprehensive loss, net of tax:
 
 
 
 
 
 
 
 
Translation adjustment
 
(3,297
)
 

 
(2,724
)
 

Unrealized loss on hedging instruments
 
(351
)
 

 
(351
)
 

Other comprehensive loss, net of tax
 
(3,648
)
 

 
(3,075
)
 

Total comprehensive (loss) income
 
(5,169
)
 
74

 
(21,113
)
 
(76
)
Less: Predecessor comprehensive income (loss) prior to initial public offering on July 23, 2014
 
5,697

 
74

 
(10,357
)
 
(76
)
Comprehensive income subsequent to initial public offering
 
(10,866
)
 
$

 
(10,756
)
 
$

Less: comprehensive loss attributable to non-controlling interest:
 
 
 
 
 
 
 
 
Net loss
 
(3,777
)
 
 
 
(3,667
)
 
 
Translation adjustment
 
(1,898
)
 
 
 
(1,898
)
 
 
Unrealized loss on hedging instruments
 
(244
)
 
 
 
(244
)
 
 
Comprehensive loss attributable to noncontrolling interest
 
(5,919
)
 
 
 
(5,809
)
 
 
Comprehensive loss attributable to TerraForm Power, Inc. Class A stockholders
 
$
(4,947
)
 
 
 
$
(4,947
)
 
 



See accompanying notes to unaudited condensed consolidated financial statements.


2


TERRAFORM POWER, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)

ASSETS
September 30,
2014
 
December 31,
 2013
Current assets:
 
 
 
Cash and cash equivalents
$
259,363

 
$
1,044

Restricted cash, including consolidated variable interest entities of $32,167 and $2,139 in 2014 and 2013, respectively
67,567

 
62,321

Accounts receivable, including consolidated variable interest entities of $31,120 and $0 in 2014 and 2013, respectively.
50,028

 
1,505

Deferred income taxes

 
128

VAT receivable
40,191

 
38,281

Prepaid expenses and other current assets
11,529

 
3,079

Total current assets
428,678

 
106,358

Property and equipment, net, including consolidated variable interest entities of $681,782 and $26,006 in 2014 and 2013, respectively
1,848,635

 
407,356

Intangible assets, net, including consolidated variable interest entities of $120,432 and $0 in 2014 and 2013, respectively
289,209

 
22,600

Deferred financing costs, net
36,081

 
12,397

Restricted cash, including consolidated variable interest entities of $1,139 and $0 in 2014 and 2013, respectively
7,272

 
7,401

Other assets
3,205

 
10,765

Total assets
$
2,613,080

 
$
566,877



See accompanying notes to unaudited condensed consolidated financial statements.

3


TERRAFORM POWER, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(CONTINUED)
(In thousands, except per share data)

LIABILITIES AND STOCKHOLDERS' EQUITY
September 30, 2014
 
December 31, 2013
Current liabilities:
 
 
 
Current portion of long-term debt, including consolidated variable interest entities of $14,043 and $587 in 2014 and 2013, respectively.
$
270,900

 
$
36,682

Current portion of capital lease obligations

 
773

Accounts payable, accrued expenses and other current liabilities
60,360

 
1,974

Accrued interest
27,358

 
6,714

Deferred revenue
7,245

 
428

Due to SunEdison and affiliates
1,507

 
82,051

Total current liabilities
367,370

 
128,622

Other liabilities:
 
 
 
Long-term debt, less current portion, including consolidated variable interest entities of $416,475 and $8,683 in 2014 and 2013, respectively.
1,033,134

 
371,427

Long-term capital lease obligations, less current portion

 
28,398

Deferred revenue
35,840

 
5,376

Deferred income taxes
702

 
6,600

Asset retirement obligations, including consolidated variable interest entities of $5,526 and $1,627 in 2014 and 2013, respectively.
44,749

 
11,002

Total liabilities
$
1,481,795

 
$
551,425

 
 
 
 
Stockholders' equity:
 
 
 
Net SunEdison investment

 
2,674

Preferred stock, $0.01 par value, 100,000 shares authorized, none issued and outstanding in 2014 and 2013

 

Class A common stock, $0.01 par value per share, 63,581 shares authorized, 30,652 issued and outstanding as of September 30, 2014. No shares authorized, issued or outstanding in 2013.
271

 

Class B common stock, $0.01 par value per share, 65,709 shares authorized, 64,527 issued and outstanding as of September 30, 2014. No shares authorized, issued or outstanding in 2013.
645

 

Class B1 common stock, $0.01 par value per share: 260,000 shares authorized, 5,840 issued and outstanding as of September 30, 2014. No shares authorized, issued or outstanding in 2013.
58

 

Additional paid-in capital
317,482

 

Accumulated deficit
(4,014
)
 

Accumulated other comprehensive loss
(931
)
 

Total TerraForm Power stockholders' equity
313,511

 
2,674

Non-controlling interests
817,774

 
12,778

Total stockholders' equity
1,131,285

 
15,452

Total liabilities and stockholders' equity
$
2,613,080

 
$
566,877



See accompanying notes to unaudited condensed consolidated financial statements.



4


TERRAFORM POWER, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(In thousands)
 
Controlling Interest
 
Non-controlling Interests
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net SunEdison Investment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Additional Paid-in Capital
 
Accumulated Deficit
 
Accumulated Other Comprehensive Income (Loss)
 
Total
 
Capital
 
Accumulated Deficit
 
Accumulated Other Comprehensive Income (Loss)
 
Total
 
Total Equity
 
 
Preferred Stock
 
Class A Common Stock
 
Class B Common Stock
 
Class B1 Common Stock
 
 
 
 
 
 
 
 
 
 
 
Shares
 
Amount
 
Shares
 
Amount
 
Shares
 
Amount
 
Shares
 
Amount
 
 
 
 
 
 
 
 
 
Balance at January 1, 2013
$
30,029

 

 
$

 

 
$

 

 
$

 

 
$

 
$

 
$

 
$

 
$
30,029

 
$

 
$

 
$

 
$

 
$
30,029

Net loss
(282
)
 

 

 

 

 

 

 

 

 

 

 

 
(282
)
 

 

 

 

 
(282
)
Contributions from SunEdison
53,417

 

 

 

 

 

 

 

 

 

 

 

 
53,417

 

 

 

 

 
53,417

Distributions to SunEdison
(80,490
)
 

 

 

 

 

 

 

 

 

 

 

 
(80,490
)
 

 

 

 

 
(80,490
)
Sale of membership interests in projects

 

 

 

 

 

 

 

 

 

 

 

 

 
12,778

 

 

 
12,778

 
12,778

Balance at December 31, 2013
$
2,674

 

 
$

 

 
$

 

 
$

 

 
$

 
$

 
$

 
$

 
$
2,674

 
$
12,778

 
$

 
$

 
$
12,778

 
$
15,452

Contributions from SunEdison, net
417,590

 

 

 

 

 

 

 

 

 

 

 

 
417,590

 

 

 

 

 
417,590

Issuance of Class B common stock to SunEdison at formation
(657
)
 

 

 

 

 
65,709

 
657

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sale of membership interests in projects

 

 

 

 

 

 

 

 

 

 

 

 

 
1,928

 

 

 
1,928

 
1,928

Consolidation of 50% non-controlling interest in Mt. Signal, net of cash

 

 

 

 

 

 

 

 

 

 

 

 

 
146,000

 

 

 
146,000

 
146,000

Consolidation of non-controlling interests in acquired projects

 

 

 

 

 

 

 

 

 

 

 

 

 
74,460

 

 

 
74,460

 
74,460

Issuance of restricted Class A common stock

 

 

 
4,977

 
14

 

 

 

 

 
(14
)
 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 
566

 

 

 
566

 

 

 

 

 
566

Net loss
(10,357
)
 

 

 

 

 

 

 

 

 

 

 

 
(10,357
)
 

 
643

 

 
643

 
(9,714
)
Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at July 23, 2014
$
409,250

 

 
$

 
4,977

 
$
14

 
65,709

 
$
657

 

 
$

 
$
552

 

 
$

 
$
410,473

 
$
235,166

 
$
643

 
$

 
$
235,809

 
$
646,282

Write off U.S. deferred tax assets and liabilities at IPO
3,616

 

 

 

 

 

 

 

 

 

 

 

 
3,616

 

 

 

 

 
3,616

Issuance of Class B common stock to SunEdison at IPO
(58
)
 

 

 

 

 
5,840

 
58

 

 

 

 

 

 

 

 

 

 

 

Issuance of Class B membership units in TerraForm LLC to SunEdison at IPO
(412,808
)
 

 

 

 

 

 

 

 

 
(222,155
)
 

 

 
(634,963
)
 
634,963

 

 

 
634,963

 

Issuance of class B1 common stock to Riverstone at IPO

 

 

 

 

 

 

 
5,840

 
58

 
145,942

 

 

 
146,000

 
(146,000
)
 

 

 
(146,000
)
 

Issuance of Class B1 membership units in TerraForm LLC to Riverstone at IPO

 

 

 

 

 

 

 

 

 
(57,633
)
 

 

 
(57,633
)
 
57,633

 

 

 
57,633

 

Issuance of Class A common stock related to the public offering, net of issuance costs

 

 

 
23,075

 
231

 
(7,023
)
 
(70
)
 

 

 
368,460

 

 

 
368,621

 

 

 

 

 
368,621

Issuance of Class A common stock related to the Private Placements

 

 

 
2,600

 
26

 

 

 

 

 
64,974

 

 

 
65,000

 

 

 

 

 
65,000

Stock-based compensation

 

 

 

 

 

 

 

 

 
1,001

 

 

 
1,001

 

 

 

 

 
1,001

Net loss

 

 

 

 

 

 

 

 

 

 
(4,014
)
 

 
(4,014
)
 

 
(4,310
)
 

 
(4,310
)
 
(8,324
)
Contributions from SunEdison

 

 

 

 

 

 

 

 

 
16,341

 

 

 
16,341

 
37,589

 

 

 
37,589

 
53,930

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 
(931
)
 
(931
)
 

 

 
(2,143
)
 
(2,143
)
 
(3,074
)
Sale of membership interests in projects

 

 

 

 

 

 

 

 

 

 

 

 

 
4,384

 

 

 
4,384

 
4,384

Distributions to non-controlling interests

 

 

 

 

 

 

 

 

 

 

 

 

 
(151
)
 

 

 
(151
)
 
(151
)
Balance at September 30, 2014
$

 

 
$

 
30,652

 
$
271

 
64,526

 
$
645

 
5,840

 
$
58

 
$
317,482

 
$
(4,014
)
 
$
(931
)
 
$
313,511

 
$
823,735

 
$
(3,667
)
 
(2,143
)
 
$
817,774

 
$
1,131,285




See accompanying notes to unaudited condensed consolidated financial statements.


5


TERRAFORM POWER, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(In thousands)
Nine Months Ended
September 30,
2014
 
2013
Cash flows from operating activities:
 
 
 
Net loss
$
(18,038
)
 
$
(76
)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
 
 
 
Non-cash incentive revenue
(1,498
)
 
(1,333
)
Non-cash interest expense
770

 
725

Stock compensation expense
1,567

 

Depreciation and accretion
21,053

 
3,542

Amortization of intangible assets
3,558

 

Amortization of deferred financing costs and debt discounts
16,842

 
89

Recognition of deferred revenue
(192
)
 
(100
)
Gain on extinguishment of debt, net
(16,315
)
 

Unrealized loss on foreign currency exchange
5,037

 

Deferred taxes
(4,068
)
 
(2,374
)
Changes in assets and liabilities, net of acquisitions:
 
 
 
Accounts receivable
(32,937
)
 
(2,137
)
VAT receivable, prepaid expenses and other current assets
(12,948
)
 
926

Accounts payable, accrued interest, and other current liabilities
28,738

 
4,014

Deferred revenue
37,473

 
430

Due to SunEdison and affiliates
(8,579
)
 
(47,979
)
Other, net
7,104

 
162

Net cash provided by (used in) operating activities
27,567

 
(44,111
)
Cash flows from investing activities:
 
 
 
Cash paid to SunEdison and third parties for solar system construction
(614,056
)
 
(4,388
)
Acquisitions of solar systems from third parties, net of cash acquired
(355,536
)
 

Change in restricted cash

 
(1,146
)
Net cash used in investing activities
(969,592
)
 
(5,534
)
Cash flows from financing activities:
 
 
 
Proceeds from issuance of Class A common stock
433,621

 

Change in restricted cash for debt service
28,630

 
620

Proceeds from term loan
300,000

 

Proceeds from bridge loan
400,000

 

Repayment of bridge loan
(400,000
)
 

Borrowings of long-term debt
191,073

 
44,400

Principal payments on long-term debt
(117,051
)
 
(2,510
)
Contribution from non-controlling interest
6,312

 

Distributions to non-controlling interest
(151
)
 

Net SunEdison investment
401,132

 
8,992

Payment of deferred financing costs
(42,880
)
 
(1,455
)
Net cash provided by financing activities
1,200,686

 
50,047

Net increase in cash and cash equivalents
258,661

 
402

Effect of exchange rate changes on cash and cash equivalents
(342
)
 

Cash and cash equivalents at beginning of period
1,044

 
3

Cash and cash equivalents at end of period
$
259,363


$
405


See accompanying notes to unaudited condensed consolidated financial statements.

6


TERRAFORM POWER, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)


(In thousands)
Nine Months Ended
September 30,
2014
 
2013
Supplemental Disclosures:
 
 
 
Cash paid for interest, net of amounts capitalized of $8,592 and $464, respectively
$
16,064

 
$
4,549

Cash paid for income taxes

 

Schedule of non-cash activities:
 
 
 
Issuance of warrant
$
6,494

 
$

Additions of ARO assets and obligations
15,302

 
2,322

Amortization of deferred financing costs included as construction in progress
11,892

 
342

Decrease in due to SunEdison and affiliates in exchange for equity
72,019

 

Issuance of B1 common stock to Riverstone for Mt. Signal
145,828

 

Issuance of Class B common stock and Class B Terra LLC units to SunEdison for Mt. Signal acquisition
146,000

 

Non-controlling interest in Terra LLC (Class B units) issued in connection with the initial public offering
632,652

 

Write off of pre-IPO U.S. deferred tax assets and liabilities
3,616

 

Deferred purchase price for acquisitions
9,278

 

Assumed long-term debt in connection with acquisitions
526,390

 

Principal payments on long-term debt from solar renewable energy certificates
728

 
608

Acquired ARO assets and obligations
17,932

 



See accompanying notes to unaudited condensed consolidated financial statements.


7


TERRAFORM POWER, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts in thousands)

1. NATURE OF OPERATIONS
TerraForm Power, Inc. (the "Company") was formed under the name SunEdison Yieldco, Inc. on January 15, 2014, as a wholly owned indirect subsidiary of SunEdison, Inc. ("SunEdison"). The name change from SunEdison Yieldco, Inc. to TerraForm Power, Inc. became effective on May 22, 2014. Following the Company's initial public offering ("IPO") on July 23, 2014, the Company became a holding company and its sole asset is an equity interest in TerraForm Power, LLC ("Terra LLC" or "the Predecessor") an owner of solar generation systems and long-term contractual arrangements to sell the electricity generated by such systems and the related green energy certificates and other environmental attributes to third parties. The Company is the managing member of Terra LLC, and operates, controls and consolidates the business affairs of Terra LLC.
Basis of Presentation
Certain assets in the Company's current portfolio have been contributed from SunEdison and are reflected in the accompanying consolidated balance sheets at SunEdison's historical cost. When projects are contributed or acquired from SunEdison, the Company is required to recast its historical financial statements to reflect the assets and liabilities of the acquired project for the period it was owned by SunEdison in accordance with rules applicable to transactions between entities under common control.
For all periods prior to the IPO, the accompanying unaudited consolidated financial statements represent the combination of the Company and Terra LLC, the accounting predecessor, and were prepared using SunEdison's historical basis in assets and liabilities. For all periods subsequent to the IPO, the accompanying unaudited condensed consolidated financial statements represent the results of the Company, which consolidates Terra LLC through its controlling interest.    
The historical financial statements of the Predecessor include allocations of certain SunEdison corporate expenses and income tax expense. Management believes the assumptions and methodology underlying the allocation of general corporate overhead expenses are reasonable. Subsequent to the IPO, corporate expenses represent those costs allocated to the Company under the management services agreement.
The following notes should be read in conjunction with the accounting policies and other disclosures as set forth in the notes to the Company’s annual financial statements for the years ended December 31, 2013 and 2012 contained in the Company's Prospectus. Interim results are not necessarily indicative of results for a full year. In our opinion, the accompanying unaudited condensed consolidated financial statements of the Company include all adjustments (consisting of normal, recurring items) necessary to present fairly its financial position, results of operations and cash flows for the periods presented. The Company has presented the unaudited condensed consolidated financial statements in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information. Accordingly, they do not include all the information and disclosures required by GAAP for complete financial statements.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP). They include the results of wholly owned and partially owned subsidiaries in which the Company has a controlling interest with all significant intercompany accounts and transactions eliminated. When the Company is the primary beneficiary of a variable interest entity in solar energy projects, they are consolidated.
Use of Estimates
In preparing the unaudited consolidated financial statements, the Company used estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements. Such estimates also affect the reported amounts of revenues and expenses during the reporting period. Actual results may differ from estimates under different assumptions or conditions.

8


Basic and Diluted Earnings (Loss) Per Share
Basic earnings (loss) per share is computed by dividing net income attributable to common stockholders by the number of weighted-average ordinary shares outstanding during the period. Diluted earnings (loss) per share is computed by adjusting basic earnings (loss) per share for the impact of weighted-average dilutive common equivalent shares outstanding during the period. Common equivalent shares represent the incremental shares issuable for unvested restricted Class A common stock and redeemable shares of Class B and Class B1 common stock.
Stock-Based Compensation
Stock-based compensation expense for all share-based payment awards is based on the estimated grant-date fair value and is accounted for in accordance with FASB ASC 718, Compensation—Stock Compensation. The Company recognizes these compensation costs net of an estimated forfeiture rate for only those shares expected to vest on a straight-line basis over the requisite service period of the award, which is generally the award vesting term. For ratable awards, the Company recognizes compensation costs for all grants on a straight-line basis over the requisite service period of the entire award.
Derivative Financial Instruments
The Company recognizes its derivative instruments as assets or liabilities at fair value in the consolidated balance sheets. Accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated as part of a hedging relationship and on the type of hedging relationship.
The effective portion of changes in fair value of derivative instruments designated as cash flow hedges is reported as a component of other comprehensive income (loss) (“OCI”). Changes in the fair value of these derivatives are subsequently reclassified into earnings in the period that the hedged transaction affects earnings. The ineffective portion of changes in fair value is recorded as a component of net income (loss) on the consolidated statement of operations.
The change in fair value of undesignated derivative instruments is reported as a component of net income (loss) on the consolidated statement of operations.
Reclassification
Certain prior period balances have been reclassified to conform to current period presentation showing greater detail of certain current assets and liabilities in the Company’s consolidated financial statements and accompanying notes. Such reclassifications have no effect on previously reported balance sheet subtotals, results of operations, equity, or cash flows.
Recent Accounting Pronouncements
On May 28, 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This ASU will replace most existing revenue recognition guidance in GAAP when it becomes effective. The new standard is effective for us on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is currently evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method or determined the effect of the standard on its ongoing financial reporting.
In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Presentation of Financial Statements-Going Concern. ASU 2014-15 is intended to define management's responsibility to evaluate whether there is substantial doubt about an organization's ability to continue as a going concern and to provide related footnote disclosures. This guidance is effective for the annual period ending December 31, 2016 and interim and annual periods thereafter. We do not expect the adoption of this standard to have a material impact on our consolidated financial position, results of operations and cash flows.
3. ACQUISITIONS
The initial accounting for acquisitions is not complete because the evaluation necessary to assess the fair values of assets acquired and liabilities assumed is still in process. The provisional amounts are subject to revision to the extent additional information is obtained about the facts and circumstances that existed as of the acquisition dates.

9


Nellis
On March 28, 2014, the Company acquired 100% of the controlling investor member interests in MMA NAFB Power, LLC (“Nellis”), which owns a 14.1 MW solar energy generation system located on Nellis Air Force Base in Clark County, Nevada. A wholly owned subsidiary of SunEdison holds the noncontrolling interest in Nellis. The purchase price for this acquisition was $14,211, net of acquired cash.
CalRenew-1
On May 15, 2014, the Company acquired 100% of the issued and outstanding membership interests of CalRenew-1, LLC (“CR-1”), which owns a 6.3 MW solar energy generation system located in Mendota, California. The purchase price for this acquisition was $14,334, net of acquired cash.
Atwell Island
On May 16, 2014, the Company acquired 100% of the membership interests in SPS Atwell Island, LLC (“Atwell Island”), a 23.5 MW solar energy generation system located in Tulare County, California. The purchase price for this acquisition was $67,212, net of acquired cash.
MA Operating
On June 26, 2014, the Company acquired four operating solar energy systems located in Massachusetts that achieved commercial operations during 2013. The total capacity for these projects is 12.2 MW. The purchase price for this acquisition was $39,500.
Stonehenge Operating Projects
On May 21, 2014, the Company acquired 100% of the issued share capital of three operating solar energy systems located in the United Kingdom from ib Vogt GmbH. These acquisitions are collectively referred to as Stonehenge Operating Projects. The Stonehenge Operating Projects consists of Sunsave 6 (Manston) Limited, Boyton Solar Park Limited and KS SPV 24 Limited. The total combined capacity for the Stonehenge Operating Projects is 23.6 MW. The purchase price for the Stonehenge Operating Projects was $26,778, net of acquired cash.
Summit Solar Projects
On May 22, 2014, the Company acquired the equity interests in 23 solar energy systems located in the U.S. from Nautilus Solar PV Holdings, Inc. These 23 systems have a combined capacity of 19.9 MW. The purchase price for these systems was $29,097, net of acquired cash. In addition, an affiliate of the seller owns certain interests in seven operating solar energy systems in Canada with a total capacity of 3.8 MW. In conjunction with the signing of the purchase and sale agreement to acquire the U.S. equity interests, the Company signed an asset purchase agreement to purchase the right and title to all of the assets of the Canadian facilities. The purchase of the Canadian assets closed on July 23, 2014 and the purchase price was $20,238, net of acquired cash.
Mt. Signal
On July 23, 2014, the Company acquired a controlling interest in Imperial Valley Solar 1 Holdings II, LLC, which owns a 265.9 MW utility scale solar energy system located in Mt. Signal, California ("Mt. Signal"). The Company acquired Mt. Signal from an indirect wholly owned subsidiary of SRP in exchange for $292.0 million in total consideration consisting of (i) 5,840,000 Class B1 units (and a corresponding number of shares Class B1 common stock) equal in value to $146.0 million and (ii) 5,840,000 Class B units (and a corresponding number of shares Class B common stock) equal in value to $146.0 million. Prior to the IPO, SRP was owned 50% by Riverstone and 50% by SunEdison, who acquired all of AES Corporation’s equity ownership interest in SRP on July 2, 2014. In connection with its acquisition of AES Corporation’s interest in SRP, SunEdison entered into a Master Transaction Agreement with Riverstone pursuant to which the parties agreed to sell Mt. Signal to the Company and to distribute the Class B units (and shares of Class B common stock) to SunEdison and the Class B1 units (and shares of Class B1 common stock) to Riverstone.
Hudson Energy Solar Corp
On November 4, 2014, the Company acquired the operating portfolio of Hudson Energy Solar Corporation ("HES"), a solar project developer that owns and operates solar assets for schools, school districts, and commercial and industrial customers for $22.9 million.  

10


Capital Dynamics
On October 30, 2014, the Company entered into an agreement to acquire 77.6 MW of distributed generation solar energy systems in the U.S. from Capital Dynamics U.S. Solar Energy Fund, L.P., a closed-end private equity fund, for $250 million in aggregate consideration. This acquisition is expected to close in the fourth quarter of 2014.
The acquisitions of HES and Capital Dynamics are not included in the preliminary allocation of assets and liabilities. The initial accounting for these acquisitions is not complete because the evaluation necessary to assess the fair values of certain net assets to be acquired is not complete.
Fairwinds and Crundale
On November 4, 2014, the Company completed the acquisition of Fairwinds and Crundale, two utility scale power projects with a total capacity of 50 MW located in the United Kingdom that became operational in September 2014. The Company paid approximately $32.2 million in aggregate to acquire the projects from SunEdison and assumed approximately $63.7 million of project level debt. Fairwinds and Crundale were Call Right Projects and were the first acquisition from SunEdison. This acquisition will be accounted for at SunEdison's historical cost basis.
Changes in the allocation of acquired assets and liabilities from previously reported amounts reflect adjustments made to the preliminary allocation of assets and liabilities as a result of additional information available since that period. The provisional estimated allocation of assets and liabilities as of September 30, 2014, is as follows:
 
 
 
 
 
Total
 
 
 
Other
 
Estimated
(In thousands)
Mt. Signal
 
Acquisitions
 
Allocation
Property and equipment
$
643,084

 
$
205,300

 
$
848,384

Accounts receivable
9,951

 
5,856

 
15,807

Restricted cash
22,165

 
11,700

 
33,865

Other assets
14,087

 
3,137

 
17,224

Intangible assets
121,456

 
119,241

 
240,697

Total assets acquired
810,743

 
345,234

 
1,155,977

Long-term debt
413,464

 
112,926

 
526,390

Accounts payable, accrued expenses and other current liabiliites
29,565

 
4,310

 
33,875

Asset retirement obligations
3,000

 
14,932

 
17,932

Deferred income taxes

 
1,956

 
1,956

Total liabilities assumed
446,029

 
134,124

 
580,153

Non-controlling interest
73,060

 
1,400

 
74,460

Purchase price, net of cash acquired
$
291,654

 
$
209,710

 
$
501,364


The acquired projects' intangible assets represent preliminary estimates of the fair value of acquired PPAs. The estimated fair values were determined based on an income approach and the estimated useful lives of the intangible assets range from 15 to 25 years. See Note 5 for additional disclosures related to the acquired intangible assets. The operating revenues and net income of acquired projects reflected in the accompanying consolidated statement of operations for the nine months ended September 30, 2014 was $42,474 and $14,317, respectively.
The following unaudited pro forma supplementary data gives effect to the acquisitions as if the transactions had occurred on January 1, 2013. The unaudited pro forma supplementary data is provided for informational purposes only and should not be construed to be indicative of the Company’s results of operations had the acquisitions been consummated on the date assumed or of the Company’s results of operations for any future date.
 
Nine Months Ended September 30,
In thousands
2014
 
2013
Operating revenues
$
93,122

 
$
33,899

Net loss (income)
(15,393
)
 
(7,425
)


11


Acquisition costs, including amounts for affiliates, related to the transactions above were $4,128 and $5,363 for the three and nine months ended September 30, 2014 and are reflected as acquisition costs in the accompanying consolidated statements of operations.
4. PROPERTY AND EQUIPMENT
Property and equipment consists of the following: 
 
 
September 30, 2014
 
December 31, 2013
(In thousands)
 
 
 
 
Solar energy systems
 
$
1,491,928

 
$
163,698

Construction in progress - solar energy systems
 
390,519

 
228,749

Capitalized leases - solar energy systems
 

 
29,170

Property and equipment, gross
 
1,882,447

 
421,617

Less accumulated depreciation - solar energy systems
 
(33,812
)
 
(9,956
)
Less accumulated depreciation - capitalized leases - solar energy systems
 

 
(4,305
)
Property and equipment, net
 
$
1,848,635

 
$
407,356


The Company recorded depreciation expense related to property and equipment of $12,273 and $19,951 for the three months and nine months ended September 30, 2014, respectively, and recorded $1,260 and $3,316 of depreciation expense for the same periods in the prior year.

Construction in progress represents $390.5 million of costs to complete the construction of the projects in our current portfolio that were contributed to the Company by SunEdison. Subsequent to the completion of these projects, the Company will continue to present construction in progress for projects that acquired from SunEdison but will not have the related construction risk. As projects are completed by SunEdison and contributed or sold to the Company, the Company will retroactively recast its historical financial statements to present the construction activity as if it consolidated the project at inception of the construction. Subsequent to the completion of the construction in progress projects in the Company's current portfolio, the Company expects to acquire completed projects. All construction in progress costs are stated at SunEdison's historical cost. These costs include capitalized interest costs and amortization of deferred financing costs incurred during the asset's construction period, which totaled $12,319 and $20,484 for the three and nine months ended September 30, 2014. No amounts were capitalized during the same periods in the prior year.
5. INTANGIBLE ASSETS
The following table presents the gross carrying amount and accumulated amortization of other intangible assets at September 30, 2014:
(In thousands, except weighted average amortization period)
 
Gross carrying amount
 
Weighted average amortization period
 
Accumulated amortization
 
Currency translation adjustment
 
Net book value
Power purchase agreements
 
$
271,720

 
17 years
 
$
(3,558
)
 
$
(1,553
)
 
$
266,609

Development rights
 
22,600

 
Indefinite
 

 

 
22,600

 
 
$
294,320

 
 
 
$
(3,558
)
 
$
(1,553
)
 
$
289,209

The following table presents the gross carrying amount and accumulated amortization of other intangible assets at December 31, 2013:
(In thousands, except weighted average amortization period)
 
Gross carrying amount
 
Weighted average amortization period
 
Accumulated amortization
 
Currency translation adjustment
 
Net book value
Development rights
 
$
22,600

 
Indefinite
 

 

 
$
22,600



12


As of September 30, 2014, the Company had power purchase agreement ("PPA") intangible assets representing long-term electricity sales agreements. PPA intangible assets are amortized on a straight-line basis over the life of the agreements, which typically range from 15 to 25 years. Amortization expense related to the PPA intangible assets is recorded on the consolidated statements of operations as a reduction of energy revenue.     Amortization expense was $2,787 and $3,558 during the three months and nine months ended September 30, 2014, respectively. There was no amortization expense during the three months and nine months ended September 30, 2013.
As of September 30, 2014 and December 31, 2013, the Company had an intangible asset with a carrying amount of $22,600 related to power plant development rights. This intangible asset will be reclassified to the related solar energy system (property and equipment) upon completion and will be amortized to depreciation expense on a straight-line basis over the estimated life of the solar energy system. No amounts have been amortized during the three months and nine months ended September 30, 2014 and 2013 as construction of the related solar energy system has not been completed.
6. VARIABLE INTEREST ENTITIES
The Company is the primary beneficiary and consolidates two variable interest entities (or "VIEs") in solar energy projects as of September 30, 2014 and December 31, 2013. The carrying amounts and classification of the consolidated VIEs’ assets and liabilities included in the Company's unaudited consolidated balance sheet are as follows:
(In thousands)
 
September 30, 2014
 
December 31, 2013
     Current assets
 
$
64,963

 
$
2,139

     Noncurrent assets
 
804,855

 
27,076

Total assets
 
$
869,818

 
$
29,215

     Current liabilities
 
$
34,739

 
$
6,129

     Noncurrent liabilities
 
436,045

 
10,310

Total liabilities
 
$
470,784

 
$
16,439

All of the assets in the table above are restricted for settlement of the VIE obligations, and all of the liabilities in the table above can only be settled using VIE resources.

13


7. LONG-TERM DEBT
Long-term debt consists of the following: 
(In thousands, except rates)
 
 
 
 
 
 
 
 
 
 
Description:
 
September 30, 2014
 
December 31, 2013
 
Interest Type
 
Current Interest Rate % (1)
 
Financing Type
Term loan - 2019
 
$
299,250

 
$

 
Variable
 
5.33 (2)
 
Term debt
Mt. Signal, due 2038
 
413,464

 

 
Fixed
 
6.00
 
Senior Notes
CAP, due 2014 (VAT) & 2032
 
247,888

 
243,581

 
Variable
 
5.11 - 7.10
 
VAT facility and term debt
Regulus Solar:
 
 
 
 
 
 
 
 
 
 
Regulus Solar, due 2016
 
37,935

 
44,400

 
PIK
 
18.00
 
Development loan
Regulus Solar, due 2015
 
111,525

 

 
Fixed
 
 4.00
 
Construction debt
Nellis, due 2027
 
46,107

 

 
Imputed
 
5.75
 
Senior Notes
SunE Perpetual Lindsay, due 2014
 
48,033

 

 
Variable
 
3.27
 
Construction debt and HST Facility
Summit Solar U.S., due 2020 – 2028
 
24,178

 

 
Imputed
 
5.75
 
Term debt
DGS Prisons, due 2024 – 2025
 
17,055

 
9,270

 
Variable
 
6.00
 
Construction and term debt
Enfinity, due 2032
 
4,890

 
4,904

 
Imputed
 
5.75
 
Term debt
US Projects 2009 – 2013:
 
 
 
 
 
 
 
 
 
 
Term bonds, due 2016 – 2031
 

 
8,638

 
Fixed
 
5.0 - 5.75
 
Term debt
Solar program loans, due 2024 – 2026
 
9,477

 
10,206

 
Fixed
 
11.1 - 11.3
 
Solar program loans
Alamosa
 

 
29,171

 
Fixed
 
2.98
 
Capital lease obligations
Financing lease obligations:
 
 
 
 
 
 
 
 
 
 
Enfinity, due 2025 – 2032
 
30,521

 
31,494

 
Fixed
 
5.63 - 7.26
 
Financing lease obligations
SunE Solar Fund X, due 2030
 

 
55,616

 
Fixed
 
3.91 - 5.11
 
Financing lease obligations
US Projects 2014, due 2019
 
4,508

 

 
Fixed
 
6.00
 
Financing lease obligations
Regulus land lease, due 2034
 
9,203

 

 
Fixed
 

 
Financing lease obligations
Total long-term debt and capital lease obligations
 
$
1,304,034

 
$
437,280

 
 
 
 
 
 
Less current maturities
 
(270,900
)
 
(37,455
)
 
 
 
 
 
 
Long-term debt and capital lease obligations, less current portion
 
$
1,033,134

 
$
399,825

 
 
 
 
 
 
———
(1) The weighted average effective interest rate for all debt outstanding during the period, excluding the amortization of deferred financing fees and debt discounts, was 5.5%.
(2) The variable rate as of September 30, 2014 is 4.75%. The Company has entered into an interest rate swap agreement (see Note 9) fixing the interest rate at 5.33% for the next three years.

14


Bridge Credit Facility
On March 28, 2014, the Company entered into a credit and guaranty agreement with Goldman Sachs Bank USA as administrative agent and the lenders party thereto (the “Bridge Credit Facility”). The Bridge Credit Facility originally provided for a senior secured term loan facility in an aggregate principal amount of $250.0 million. On May 15, 2014, the Bridge Credit Facility was amended to increase the aggregate principal amount to $400.0 million (the "Amended Bridge Credit Facility").
The Company's obligations under the Amended Bridge Credit Facility were guaranteed by certain of its domestic subsidiaries. The Company's obligations and the guaranty obligations of its subsidiaries were secured by first priority liens on and security interests in substantially all present and future assets of the Company and the subsidiary guarantors.
Interest under the Amended Bridge Credit Facility had variable interest rate options based on Base Rate Loans or Eurodollar loans at the Company’s election.
The Amended Bridge Credit Facility was repaid following the closing of the IPO on July 23, 2014.
Term Loan and Revolving Credit Facility
In connection with the closing of the IPO on July 23, 2014, Terra Operating LLC (a wholly owned subsidiary of Terra LLC) entered into a revolving credit facility (the "Revolver") and a term loan facility (the "Term Loan" and together with the Revolver, the “Credit Facilities”). The Revolver provides for up to a $140.0 million senior secured revolving credit facility and the Term Loan provides for up to a $300.0 million senior secured term loan. The Term Loan was used to repay a portion of outstanding borrowings under the Amended Bridge Credit Facility. Each of Terra Operating LLC's existing and subsequently acquired or organized domestic restricted subsidiaries and the Company are guarantors under the Credit Facilities.
The Term Loan will mature on the five-year anniversary and the Revolver will mature on July 23, 2014. All outstanding amounts under the Credit Facilities bear interest at a rate per annum equal to, at Terra Operating LLC's option, either (a) a base rate plus 2.75% or (b) a reserve adjusted eurodollar rate plus 3.75%. For the Term Loan, the base rate will be subject to a “floor” of 2.00% and the reserve adjusted eurodollar rate will be subject to a “floor” of 1.00%.
The Credit Facilities provide for voluntary prepayments, in whole or in part, subject to notice periods and payment of repayment premiums. The Credit Facilities require Terra Operating LLC to prepay outstanding borrowings in certain circumstances such as the sale of underlying collateral. The Credit Facilities contain customary and appropriate representations and warranties and affirmative and negative covenants (subject to exceptions) by the Company and its subsidiaries.
The Credit Facilities, each guaranty and any interest rate and currency hedging obligations of Terra Operating LLC or any guarantor owed to the administrative agent, any arranger or any lender under the Credit Facilities are secured by first priority security interests in (i) all of Terra Operating LLC's assets and each guarantor’s assets, (ii) 100% of the capital stock of each of Terra Operating LLC’s domestic restricted subsidiaries and 65% of the capital stock of Terra Operating LLC’s foreign restricted subsidiaries and (iii) all intercompany debt, collectively, the “Credit Facilities Collateral.”
On October 30, 2014, the Company announced that it obtained a commitment to increase the Term Loan by $275.0 million and the Revolver by $75.0 million to increase liquidity and to fund the acquisitions of Hudson Energy Solar Corp and Capital Dynamics.
Project-level Financing Arrangements
The Company's solar energy systems which have long-term debt obligations are included in separate legal entities. The Company typically finances its solar energy projects through project entity specific debt secured by the project entity's assets (mainly the solar energy system) with no recourse to the Company. Typically, these financing arrangements provide for a construction loan, which upon completion may or may not be converted into a term loan. The following is a summary of construction and term debt entered into or assumed from January 1, 2013 to September 30, 2014.
Mt. Signal
In connection with the acquisition of Mt. Signal, the Company assumed $415.7 million of additional long-term debt. The senior secured notes bear interest at 6% and mature in 2038. Interest on the notes is payable semi-annually on June 30 and December 31 of each year, commencing on June 30, 2013. A letter of credit facility was also extended to the project company to satisfy certain security obligations under the PPA, other project agreements and the senior secured notes. The letter of credit facility will terminate on the earlier of July 2, 2019 and the fifth anniversary of the Mt. Signal project’s completion date.

15


CAP
In August 2013, the CAP project entity obtained $212.5 million in non-recourse debt financing from the Overseas Private Investment Corporation (“OPIC”), the U.S. Government's development finance institution, and International Finance Corporation (“IFC”), a member of the World Bank Group. In addition to the debt financing provided by OPIC and IFC, the project entity received a Chilean peso VAT credit facility from Rabobank. Under the VAT credit facility the project entity may borrow funds to pay for value added tax payments due from the project. The VAT credit facility has a variable interest rate that is tied to the Chilean Interbank Rate plus 1.40% and will mature in November 2014. As of September 30, 2014, the outstanding balance under the Chilean peso denominated VAT credit facility was $35.4 million. This debt is secured by the assets of CAP.
Regulus Solar
In March 2013, the Regulus Solar project entity entered into a financing agreement with a group of lenders for a $44.4 million development loan of which $37.9 and $44.4 was outstanding as of September 30, 2014 and December 31, 2013. The financing arrangement matures on March 31, 2016 and interest accrues from the date of borrowing until the maturity date at a rate of 18% per annum and is paid in kind (“PIK”) at each PIK interest date.
On March 28, 2014, the Regulus Solar project entity entered into an agreement for a construction loan facility for an amount up to $120.0 million, of which $111.5 million, net of a $1.5 million discount, was outstanding at September 30, 2014. The construction loan facility has a term ending in January 2015. Interest under the construction loan facility has variable interest rate options based on Base Rate Loans or LIBOR loans at the Company’s election. The interest rate payable under Base Rate Loans will be based upon an adjusted base rate (equal to the greater of (a) the Base Rate (Prime Rate) in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 0.50% and (c) the LIBOR rate plus 1.00%.) The interest rate payable under LIBOR Loans will be based upon the published LIBOR rate plus 3.75% applicable margin. This debt is secured by the assets of the Regulus Solar project entity.
Nellis    
On March 28, 2014, the Company assumed a term loan facility in conjunction with the acquisition of Nellis. The term loan is due in 2027, bears interest at a rate of 5.75% per annum, and is secured by the assets of Nellis.
Stonehenge Operating    
On May 21, 2014, the Company assumed three euro denominated term loan facilities in conjunction with the acquisition of the Stonehenge Operating projects. These term loans were due in 2028, bear interest at a rate of 3.4% per annum, and were secured by the acquired assets of the Stonehenge Operating projects. The Company also assumed three cross-currency swaps to hedge the foreign currency risk posed by the term loan facilities, which were denominated in euros. See Note 7 for disclosures regarding the Company's derivative financial instruments. These facilities were secured by the assets of the Stonehenge Operating project entities. On September 30, 2014, the Company repaid all outstanding amounts due under the term facilities. The Company recognized a $3.8 million loss on extinguishment of debt during the three and nine months ended September 30, 2014 as a result of this repayment.
Lindsay    
On March 25, 2014, Lindsay, a Canadian project entity, obtained a construction term loan that matures in September 2015. Interest under the construction term loan facility has variable rate options based on Prime Rate Advances or CDOR (“Canadian Dealer Offered Rate”) Advances at the Company’s election. The interest rate payable under Prime Rate Advances will be the sum of the Prime Rate in effect on such day plus 1.00% and an applicable margin of 2.00%. The interest rate payable under CDOR Advances will be based on the published CDOR rate plus an applicable margin of 2.00%. This debt is secured by the assets of the Lindsay project entity.
Summit Solar U.S.     
On May 22, 2014, the Company assumed seven term loan facilities in conjunction with the acquisition of Summit Solar U.S. The term loans are due from 2020 through 2028, bear interest at a rate of 5.75% per annum, and are secured by the assets of Summit Solar U.S..     
DGS Prisons
The California Institution projects obtained permanent term loan financing upon completion of the projects. The term loans mature between 2023 and 2024 and bear interest at a rate of LIBOR plus 2.5%.

16


U.S. Projects 2009-2013
On September 8, 2014, the Company repaid all outstanding amounts due under its term bonds. The Company recognized a $2.5 million loss on extinguishment of debt during the three and nine months ended September 30, 2014 as a result of this repayment.
Capital Lease Obligations
Alamosa
On May 7, 2014, the Company purchased the lessor portion of the capital lease related to the project and there is no additional project level financing outstanding at September 30, 2014. The Company recognized a $1.9 million loss on extinguishment of debt during the nine months ended September 30, 2014 as a result of this transaction.
Financing Lease Obligations
In certain transactions the Company accounts for the proceeds of sale leasebacks as financings, which are typically secured by the energy system asset and its future cash flows from energy sales, and without recourse to the Company under the terms of the arrangement.
Enfinity
The balance outstanding for sale leaseback transactions accounted for as financings as of September 30, 2014 for Enfinity was $30.5 million. The Enfinity sale leaseback accounted for as financings mature between 2025 and 2032 and are collateralized by the related solar energy system assets.
SunE Solar Fund X
On July 23, 2014, concurrent with the closing of the IPO, the Company purchased the lessor portion of the capital lease related to the SunE Solar Fund X project and there is no additional project level financing outstanding at September 30, 2014. The Company recognized a $15.8 million gain on extinguishment of debt during the three and nine months ended September 30, 2014 as a result of this transaction.
Regulus Solar
On April 11, 2014, Regulus Solar entered into a sale leaseback agreement for a sales price of $9.2 million, which was received at closing on April 14, 2014. The lease term is 20 years and Regulus Solar has two options to renew the term for 5 years each and then one option to renew for a total lease term not to exceed 34 years, 11 months. The total purchase price of $9.2 million was recorded as a financing obligation and is secured by the land and the solar energy system assets, which are under construction as of September 30, 2014.
US Projects 2014
On June 3, 2014, certain projects within the Company's US Projects 2014 portfolio entered into an inverted lease structure to finance approximately 45 MW of distributed generation solar energy systems that will be constructed and placed into operation during the fourth quarter of 2014. The lease term is eight years and the total purchase price was $40.6 million, of which $4.5 million is reflected as a financing obligation and $36.1 million is recorded as deferred revenue in the accompanying consolidated balance sheet as of September 30, 2014.
Maturities

The aggregate amounts of payments on long-term debt, excluding amortization of debt discounts, due after September 30, 2014 are as follows:
 
 
Balance of 2014
 
2015
 
2016
 
2017
 
2018
 
Thereafter
 
Total
In millions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maturities of long-term debt at September 30, 2014