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8-K - 8-K - TERRAFORM GLOBAL, INC. | glbl8-kbondholderdisclosure.htm |
EX-99.3 - EXHIBIT 99.3 - TERRAFORM GLOBAL, INC. | glbl8-kbondholderexhibit993.htm |
EX-99.1 - EXHIBIT 99.1 - TERRAFORM GLOBAL, INC. | exhibit991a01.htm |
P. 1
Logo to be
replaced
TerraForm Global
Supplemental Information Requested by Bondholders
July 19, 2016
P. 2
Forward Looking Statements
This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. These statements involve estimates, expectations,
projections, goals, assumptions, known and unknown risks, and uncertainties and typically include words or variations of words such as “expect,” “anticipate,” “believe,” “intend,”
“plan,” “seek,” “estimate,” “predict,” “project,” “goal,” “guidance,” “outlook,” “objective,” “forecast,” “target,” “potential,” “continue,” “would,” “will,” “should,” “could,” or “may” or other
comparable terms and phrases. All statements that address operating performance, events, or developments that TerraForm Global expects or anticipates will occur in the future
are forward-looking statements. They may include estimates of expected adjusted EBITDA, cash available for distribution (CAFD), earnings, revenues, capital expenditures,
liquidity, capital structure, future growth, financing arrangement and other financial performance items (including future dividends per share), descriptions of management’s plans
or objectives for future operations, products, or services, or descriptions of assumptions underlying any of the above. Forward-looking statements provide TerraForm Global’s
current expectations or predictions of future conditions, events, or results and speak only as of the date they are made. Although TerraForm Global, believes its respective
expectations and assumptions are reasonable, it can give no assurance that these expectations and assumptions will prove to have been correct and actual results may vary
materially.
By their nature, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking
statements. Factors that might cause such differences include, but are not limited to, our relationship with SunEdison, including SunEdison’s bankruptcy filings and our reliance
on SunEdison to perform under material intercompany agreements and to provide management and accounting services, project level operation and maintenance and asset
management services, to maintain critical information technology and accounting systems and to provide our employees; our ability to integrate the projects we acquire from
third parties or otherwise realize the anticipated benefits from such acquisitions; actions of third parties, including but not limited to the failure of SunEdison, to fulfill its
obligations; price fluctuations, termination provisions and buyout provisions in offtake agreements; delays or unexpected costs during the completion of projects under
construction; our ability to successfully identify, evaluate, and consummate acquisitions from SunEdison or third parties or changes in expected terms and timing of any
acquisitions; regulatory requirements and incentives for production of renewable power; operating and financial restrictions under agreements governing indebtedness; the
condition of the debt and equity capital markets and our ability to borrow additional funds and access capital markets; the impact of foreign exchange rate fluctuations; our ability
to compete against traditional and renewable energy companies; hazards customary to the power production industry and power generation operations, such as unusual
weather conditions and outages or other curtailment of our power plants; departure of some or all of SunEdison’s employees that are dedicated to the Company; pending and
future litigation; and our ability to operate our business efficiently, to operate and maintain our information technology, technical, accounting and generation monitoring systems,
to manage and complete governmental filings on a timely basis, and to manage our capital expenditures, economic, social and political risks and uncertainties inherent in
international operations, including operations in emerging markets and the impact of foreign exchange rate fluctuations, the imposition of currency controls and restrictions on
repatriation of earnings and cash, protectionist and other adverse public policies, including local content requirements, import/export tariffs, increased regulations or capital
investment requirements, conflicting international business practices that may conflict with other customs or legal requirements to which we are subject, inability to obtain,
maintain or enforce intellectual property rights, and being subject to the jurisdiction of courts other than those of the United States, including uncertainty of judicial processes and
difficulty enforcing contractual agreements or judgments in foreign legal systems or incurring additional costs to do so. Furthermore, any dividends are subject to available
capital, market conditions, and compliance with associated laws and regulations. Many of these factors are beyond TerraForm Global’s control.
TerraForm Global disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions, factors, or expectations, new
information, data, or methods, future events, or other changes, except as required by law. The foregoing list of factors that might cause results to differ materially from those
contemplated in the forward-looking statements should be considered in connection with information regarding risks and uncertainties which are described in TerraForm Global’s
Prospectus, dated July 31, 2015, and Forms 10-Q with respect to the second and third quarters of 2015, as well as additional factors it may describe from time to time in other
filings with the Securities and Exchange Commission or incorporated herein. You should understand that it is not possible to predict or identify all such factors and,
consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.
P. 3
Introduction & Importance of our Updated Risk Factors
The following information is being provided at the request of bondholders and
their advisors
The financial information presented on the following slides is preliminary and
unaudited. Financial information may change materially as a result of the
completion of the audit for fiscal year 2015
The information does not represent a complete picture of the financial position,
results of operation or cash flows of TerraForm Global (“TerraForm Global” or
the “Company”), and is not a replacement for full financial statements prepared
in accordance with U.S. GAAP
The Company’s last annual or quarterly report was its Form 10-Q for the period
ended September 30, 2015. The Company has not filed its Form 10-K for
2015. The circumstances of the Company and the risks it faces have changed
substantially since the Company’s initial public offering in August 2015 and the
date of its last filing on Form 10-Q in November 2015. You should review the
updated Risk Factors relating to the Company provided simultaneously
with this presentation, which include a description of important new risks
relating to the chapter 11 proceedings of SunEdison, the consequences of
the absence of audited financial information, pending litigation and other
matters. These materials and the Risk Factors also have been filed with the
SEC on a Form 8-K, dated July 19, 2016
P. 4
Situation Update
Management is motivated to maximize value for all stakeholders and
position TerraForm Global for long-term growth
TerraForm Global is focused on key areas of execution
– Continuity of operations
– Independence: governance, systems, employees
– Stabilize and strengthen balance sheet
Update on the Sale of SunEdison’s Interests in the Company:
– SunEdison has requested that the Company share confidential
information about the Company and take other steps to facilitate the
marketing of SunEdison’s interests in the Company, and the Company
is considering this request
– TerraForm Global is in active discussions with SunEdison’s concerning
a jointly-supported sales process and accompanying protocol for
managing the marketing process. The Company has made no decision
to support any particular bidder, structure or transaction
P. 5
Diversified Portfolio Across Key Markets
Focused portfolio in target markets with favorable investment attributes
Geographically Diverse Fleet of 917 MW 1
1. Reflects portfolio as of June 30, 2016.
307
307
P. 6
High Quality 917 MW Renewable Power Plant Portfolio
Location
Assets located in 7 countries
Generation Type
Fleet diversity
Asset Age Remaining Contract Length
Average remaining PPA life of 18 yearsAverage age of 4 years old, with expected
life that can exceed 30 years
Note: As of June 30, 2016. Weighted by net capacity MW based on TerraForm Global’s economic ownership.
Solar
39%
Wind
61%
Brazil
33%
India
33%
China
19%
South Africa
7%
Thailand
4%
Uruguay
3%
Malaysia
1%
<2 years
28%
>5 years
20%
2-5 years
52%
>20 years
30%
11-15 years
26%
16-20 years
44%
P. 7
677
728
917
51
102
25 18
18
26
10-Q Reported
9/30/2015
Portfolio
Adjust. for
Econ.
Ownership &
Capacity
Update
Adjusted
9/30/2015
Portfolio
FERSA
(October)
Addt'l Econ.
Ownership
(October)
NPS Star
(February)
WXA
(February)
Alto Cielo
(April)
6/30/2016
Portfolio
Current View of Portfolio Formation
MW
1
3
2
Note: Reflects net capacity of shares of economic ownership for all projects acquired.
1. In Form 10-Q for the period ended 9/30/2015, net capacity reflected a combination of equity and economic ownership; net capacity has been
updated to reflect net capacity based on economic ownership. Salvador & Bahia also updated to have 307 MW, from 294 MW previously reported.
2. Includes Bhakrani (20 MW), Gadag (31 MW) and Hanumanhatti (50 MW).
3. Transfer of additional economic ownership of NSM L’Volta, Focal, Millenium and Brakes.
4. 33 MW BioTherm acquisition is pending lender consent and $9M remains to be paid upon closing. The Company does not expect that it will be
able to complete the transfers of Bora Bora, Del Litoral, El Naranjal and the India 425 MW assets from SunEdison.
4
12/31/15:
855 MW
3/31/16:
890 MW
P. 8
Preliminary Unaudited 2H 2015 Results
Note: Ranges have been provided for key financial metrics as the 2015 audit has not yet been completed.
1. 425 MW India projects are subject to litigation and accounting treatment of the $231M deposit may change based on various fac tors.
Metric 2H 2015
Net MW Owned (Period End) 855
Production (GWh) 806
Capacity Factor 27%
Revenue $79M – $83M
Revenue / MWh $98 – $103
Net Income/(Loss) ($350M) – ($335M)
Adjusted EBITDA $60M – $68M
CAFD $56M – $64M
Commentary
TerraForm Global’s IPO was completed on
August 5, 2015
2H 2015 operating results in line with
management expectations driven by balanced
portfolio with generation and geographic mix
Completed 102 MW acquisition of FERSA
and transfer of additional economic ownership
of 25 MW of 4 India solar assets
Net loss includes $231M contingent loss
related to 425 MW India projects1
– Net loss also includes acquisition &
formation costs
P. 9
Preliminary 1Q 2016 Results
Note: Ranges have been provided for key financial metrics as the interim financial statements for the period ended March 31, 2016 are still under
review.
Metric 1Q 2016
Net MW Owned (Period End) 890
Production (GWh) 506
Capacity Factor 24%
Revenue $47M – $52M
Revenue / MWh $93 – $103
Net Income/(Loss) ($8M) – $0M
Adjusted EBITDA $33M – $39M
CAFD $42M – $48M
Commentary
Completed transfer of 36 MW of Thailand
projects NPS Star and WXA from SunEdison
in February 2016
1Q 2016 operating result below management
expectations due to unusually low wind in
Brazil
$10M fee paid in connection with termination
of the Espra acquisition
Completed the 26 MW acquisition of Alto
Cielo and transferred additional equity
ownership of 3 India solar assets (no increase
to MW) in April 2016
P. 10
$1,060
$861
($57) ($231)
($8) ($58)
$135 $19
9/30/2015 Holdco
Unrestricted Cash
Revolver Draw Project
Distributions
Debt
Extinguishment
425 MW India
Projects Deposit
Bond Repurchase
& Debt Service
Other 12/31/2015 Holdco
Unrestricted Cash
Holdco Cash Walk from 3Q 2015 to 4Q 2015
■ YE 2015 Holdco unrestricted cash of $861M, inclusive of $135M revolver draw in November
– $19M of project distributions repatriated during 4Q 2015
– $57M used to extinguish debt at 5 India projects
– $231M paid to SunEdison as deposit for 425 MW India projects
– $8M bond repurchase & debt services includes repurchase of $7M Senior Notes and $1M payment of
revolver fees and interest
– $58M other includes 3Q 2015 dividend payment of $20M, FX hedge loss of $33M (primarily one-time
settlement of investment hedges against acquisitions) and net payables & other of $5M
$M, unless otherwise noted
Note: As of 12/31/2015, Company characterizes restricted cash as (i) cash on deposit in collateral account, debt service, maintenance and other reserves and (ii) in
operating accounts but subject to distribution restricted due to defaults.
1. Holdco unrestricted cash excludes unrestricted project cash and restricted cash at the corporate level, project level or in escrow.
1 1
P. 11
$861
$861 $848
$772 $772 $787
$787
($41)
($76)
($26)
$28
$41
12/31/2015 Holdco
Unrestricted Cash
Project
Distributions
Acquisition Related
Fees
Bond Repurchase
& Debt Service
SunEdison
Reimbursement-
Sr. Notes
Other 3/31/2016 Holdco
Unrestricted Cash
Holdco Cash Walk from 4Q 2015 to 1Q 2016
■ 1Q 2016 Holdco unrestricted cash of $787M, inclusive of $135M revolver draw from November 2015
– $28M of project distributions repatriated during 1Q 2016
– Acquisition-related fees of $41M includes partial payment for Thailand projects and fee paid in connection with
termination of the Espra acquisition
– $76M of bond repurchase & debt service includes $33M net bond repurchase, $2M revolver interest and $41M
1Q Senior Notes interest payment (1Q Senior Notes interest payment subsequently reimbursed by SunEdison)
– Other includes 4Q 2015 dividend payment of $31M, partially offset by FX gain on currency hedges of $2M and
other miscellaneous of $3M
■ On May 6, 2016, revolver capacity was reduced from $485M to $350M as part of amendment to revolving credit facility
– With $135M drawn, revolver availability was reduced from $350M to $215M (availability subject to financial
covenants and other conditions)
$M, unless otherwise noted
Note: As of 12/31/2015, Company characterizes restricted cash as (i) cash on deposit in collateral account, debt service, maintenance and other reserves and (ii) in
operating accounts but subject to distribution restricted due to defaults.
1. Holdco unrestricted cash excludes unrestricted project cash and restricted cash at the corporate level, project level or in escrow.
1 1
$769M
Holdco
Unrestricted
Cash as of
6/30/2016
P. 12
Appendix
P. 13
Risk Factors
Please refer to the risk factors provided simultaneously and to
be read in conjunction with this presentation
P. 14
Definitions: Adjusted EBITDA and CAFD
Adjusted EBITDA
We define Adjusted EBITDA as net income (loss) plus depreciation, accretion and amortization, non-cash affiliate general and
administrative costs, acquisition related expenses, interest expense, gains (losses) on interest rate swaps, foreign currency gains
(losses), income tax (benefit) expense and stock compensation expense after eliminating the impact of non-recurring items and
other factors that we do not currently consider indicative of operating performance. Our definitions and calculations of these items
may not necessarily be the same as those used by other companies. Adjusted EBITDA is not a measure of liquidity or profitability
and should not be considered as an alternative to net income, operating income, net cash provided by operating activities or any
other measure determined in accordance with U.S. GAAP.
Cash Available For Distribution (CAFD)
We define CAFD as net cash provided by (used in) operating activities of Global LLC (i) plus or minus changes in operating assets
and liabilities as reflected on our statements of cash flows, (ii) minus deposits into (or plus withdrawals from) restricted cash
accounts required by project level financing agreements to the extent they decrease (or increase) cash provided by operating
activities, (iii) minus cash distributions paid to non-controlling interests in our facilities, if any, (iv) minus scheduled project level
and other debt service payments in accordance with the related borrowing arrangements, to the extent they are paid from
operating cash flows during a period, (v) minus non-expansionary capital expenditures, if any, to the extent they are paid from
operating cash flows during a period, (vi) plus cash contributions from SunEdison pursuant to the Interest Payment Agreement,
(vii) plus or minus operating items as necessary to present the cash flows we deem representative of our core business
operations, with the approval of our audit committee.
Note: As of December 31, 2015, TerraForm Global changed its policy regarding restricted cash to characterize the following as
restricted cash: (i) cash on deposit in collateral accounts, debt service reserve accounts, maintenance and other reserve accounts,
and (ii) cash on deposit in operating accounts but subject to distribution restrictions due to debt defaults. Previously, cash
available for operating purposes, but subject to compliance procedures and lender approvals prior to distribution from project level
accounts, was also considered restricted. This cash is now considered unrestricted but is designated as unavailable for immediate
corporate purposes. The impact of the new accounting policy on reported CAFD for H2 2015 and 1Q difference is immaterial.
P. 15
Reg G: Reconciliation of Adjusted EBITDA to Net Loss
(Midpoint of Range)
(a) General and administrative expense - affiliate represents costs incurred by SunEdison for services provided to the Company pursuant to the MSA subsequent to
the IPO and allocated to the Company in corporate allocations prior to the IPO. In conjunction with the closing of the IPO on August 5, 2015, we entered into the
MSA with SunEdison, pursuant to which SunEdison agreed to provide or arrange for other service providers to provide management and administrative services
to us. No cash consideration was paid to SunEdison for these services for the year ended December 31. 2015.Cash consideration of $2M was paid in1Q 2016.
The amount of general and administrative expense - affiliate in excess of the fees paid to SunEdison in each period will be treated as an addback in the
reconciliation of net income (loss) to Adjusted EBITDA. If SunEdison rejects, or seeks to substantially renegotiate the MSA due to the SunEdison Bankruptcy,
the Company may bear these actual costs in future periods
(b) Acquisition, formation and related costs represent transaction related costs, including affiliate acquisition costs, and non-recurring professional fees for legal, tax
and accounting services incurred in connection with our IPO during the year ended December 31, 2015
(c) Loss (gain) on foreign currency exchange, net primarily includes settled and unsettled gains and losses on foreign currency hedges related to operating and
investing activities. The net loss relates primarily to losses on FX hedges of certain planned acquisitions, and is partially offset by gains on FX hedges
associated with operations
(d) Loss on extinguishment of debt for the six months ended December 31, 2015 consists of a loss on prepayment of project level debt primarily at the Honiton wind
plant, partially offset by a gain on the repurchase of senior notes. The gain on extinguishment of debt for the three months ended March 31, 2016 consists
primarily of a gain on repurchase of senior notes
(e) Adjusted EBITDA is a non-GAAP measure. You should not consider this measure as an alternative to net income (loss), determined in accordance with U.S.
GAAP
2H15 1Q16
Net loss (Midpoint of Range) ($343) ($4)
Add (subtract):
Interest expense, net 62 34
Income tax benefit (1) (4)
Depreciation, accretion and amortization expense 26 16
General and administrative expense- aff iliate (a) 14 7
Stock-based compensation expense 2 1
Acquisition, formation and related costs (b) 28 10
Provision for contingent loss on deposit for acquisitions 231 -
Loss (gain) on foreign currency exchange, net (c) 40 (10)
Loss (gain) on extinguishment of debt, net (d) 7 (6)
Other income, net (2) (7)
Adjusted EBITDA - Midpoint of Range (e) $64 $36
P. 16
Reg G: Reconciliation of Cash from Operations to CAFD
(Midpoint of Range)
(a) The FX translation to USD of deposits or withdrawals from restricted cash held in foreign currencies is calculated using a constant currency method which removes the impact of changes in
exchange rates during the relevant period
(b) General and administrative expense - affiliate represents costs incurred by SunEdison for services provided to the Company pursuant to the MSA subsequent to the IPO and allocated to the
Company in corporate allocations prior to the IPO. In conjunction with the closing of the IPO on August 5, 2015, we entered into the MSA with SunEdison, pursuant to which SunEdison
agreed to provide or arrange for other service providers to provide management and administrative services to us. No cash consideration was paid to SunEdison for these services for the
three and six months ended December 31, 2015. If SunEdison rejects, or seeks to substantially renegotiate the MSA due to the SunEdison Bankruptcy, the Company may bear these actual
costs in future periods
(c) Acquisition, formation and related costs represent transaction related costs, including affiliate acquisition costs, and non-recurring professional fees for legal, tax and accounting services
incurred in connection with our IPO during the year ended December 31, 2015
(d) Represents economic ownership in certain acquired operating assets, which accrued to TerraForm Global, Inc. prior to each acquisition close date, including $10.7 million, recognized in 2H
2015, for the period January 1, 2015 to December 31, 2015 related to our acquisition of wind plants from FERSA, and $10.0 million, recognized in 2H 2015, for the period May 1, 2015 to
September 18, 2015 associated with the acquisition of wind plants from Renova, and $3.5M, recognized in 1Q 2016, for the period May 1, 2015 to September 18, 2015 associated with the
acquisition of wind plants from Renova
(e) Item represents the settled portion of foreign exchange contracts related to the purchase price on acquisitions
(f) Represents SunEdison’s payment of interest related to GLBL’s senior notes of approximately $40 million per the terms of the Interest Support Agreement
(g) Cash available for distribution is a non-GAAP measure. You should not consider this measure as an alternative to net cash provided by operating activities, determined in accordance with
U.S. GAAP
Adjustments to reconcile net cash provided by operating activities
to cash available for distribution:
2H15 1Q16
Net cash provided by operating activities (Midpoint of Range) $10 $20
Changes in operating assets and liabilities (110) (26)
Withdraw als from restricted cash accounts (a) 5 14
Cash distributions to non-controlling interests (4) -
Scheduled project level and other debt service and repayments (3) (3)
Non-expansionary capital expenditures (1) -
Other:
General and administrative expense - aff iliate (b) 14 7
Acquisitions, formation and related costs (c) 28 10
Change in accrued interest 47 (25)
Economic ow nership adjustment (d) 21 4
Settlement on foreign currency exchange related to acquisition (e) 59 -
Contributions rececived persuant to agreements w ith SunEdison (f) - 41
Viability Gap Funding - India - 7
Other items (5) (4)
Estimated cash available for distribution - Midpoint of Range (g) $61 $45
P. 17