Attached files
| file | filename |
|---|---|
| 8-K - 8-K - TerraForm Power NY Holdings, Inc. | terp8-kinvestorcallfeb2220.htm |
Investor Update and Results for 2Q 2016
February 22, 2017
Exhibit 99.1
2
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 Power 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, adjusted revenues, capital expenditures, liquidity, capital
structure, future growth, 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 Power’s
current expectations or predictions of future conditions, events, or results and speak only as of the date they are made. Although TerraForm Power believes
its 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, risks related to the SunEdison Bankruptcy, including
our transition away from reliance on SunEdison for management, corporate and accounting services, employees, critical systems and information technology
infrastructure, and the operation, maintenance and asset management of our renewable energy facilities; risks related to events of default and potential
events of default arising under our revolving credit facility, the indentures governing our senior notes, and/or project-level financing; risks related to failure to
satisfy the requirements of Nasdaq, which could result in the delisting of our common stock; risks related to our exploration and potential execution of strategic
alternatives; pending and future litigation; our ability to integrate the projects we acquire from third parties or otherwise realize the anticipated benefits from
such acquisitions; the willingness and ability of counterparties to fulfill their obligations under offtake agreements; price fluctuations, termination provisions and
buyout provisions in offtake agreements; our ability to successfully identify, evaluate, and consummate acquisitions; government regulation, including
compliance with regulatory and permit requirements and changes in market rules, rates, tariffs, environmental laws and policies affecting renewable energy;
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, as well as our substantial indebtedness and the possibility that we may incur additional indebtedness going
forward; our ability to compete against traditional and renewable energy companies; potential conflicts of interests or distraction due to the fact that several of
our directors and most of our executive officers are also directors and executive officers of TerraForm Global, Inc.; and hazards customary to the power
production industry and power generation operations, such as unusual weather conditions and outages. Furthermore, any dividends are subject to available
capital, market conditions, and compliance with associated laws and regulations. Many of these factors are beyond TerraForm Power’s control.
TerraForm Power 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 Power’s Form 10-K for the fiscal year ended December 31, 2015 and Form 10-Q for the period ended June
30, 2016, as well as additional factors it may describe from time to time in other filings with the Securities and Exchange Commission. 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.
Forward-Looking Statements Exhibit 99.1
3
This presentation provides certain financial and operating metrics of TerraForm Power, Inc. (“TerraForm
Power” or the “Company”) as of or for the quarters ended June 30, 2015 and June 30, 2016 and estimates for
certain financial and operating metrics of TerraForm Power for 2016 and 2017.
Please review these results together with the risk factors detailed in our annual report on Form 10-K for the
fiscal year ended December 31, 2015 filed with the SEC on December 5, 2016 and our Form 10-Q for the
quarter ended June 30, 2016 filed with the SEC on February 7, 2017.
The financial information for full year 2016 is preliminary and unaudited and includes estimates which are
inherently uncertain. This financial information may change materially as a result of the completion of the
audit for fiscal year 2016 and review procedures for 3Q 2016. Our estimates are based on various
assumptions and are subject to various risks which could cause actual results to differ materially. The
information presented on the following slides does not represent a complete picture of the financial position,
results of operation or cash flows of TerraForm Power, is not a replacement for full financial statements
prepared in accordance with U.S. GAAP and should not be viewed as indicative of future results, which may
differ materially.
The Company’s last quarterly report was its Form 10-Q for the period ended June 30, 2016. The Company
has not filed its Form 10-Q for the period ended September 30, 2016. You should also refer to our Form 10-K
for the fiscal year 2015 and the other filings we have made with the SEC.
Importance of our Risk Factors Exhibit 99.1
TerraForm Power Focused on Key Areas of Execution
Fleet continues to perform well
Solid progress on implementing stand-alone operating capability
Strategic review process underway
– Entered into an exclusivity agreement with Brookfield Asset Management to
negotiate a potential business combination based on the terms provided by
Brookfield in their bid letter
Settlement negotiations with SunEdison are well advanced
– Signed Memorandum of Understanding with SunEdison to resolve
substantially all intercompany claims, subject to joint approval of a business
combination with Brookfield or another buyer
We are working to finalize and file our 10-Q for 3Q 2016, and plan
to file before March 1
Should we fail to file our 10-Q for 3Q 2016 by March 1, we would
expect for our stock to be delisted from the Nasdaq
4
Exhibit 99.1
5
Results for 2Q 2016 and Estimates for 2016
Agenda
1
2 High-Quality, Diversified Renewable Power Fleet
3
Update on the Strategic Review Process
Exhibit 99.1
Strategic Review: Overview
Company launched strategic review in May 2016 at the direction of the
Company’s Conflicts Committee
The Conflicts Committee has provided oversight for (i) management’s
preparation and execution of the stand-alone plan and (ii) the negotiation
of guidelines by which each of SunEdison and the Company conduct
themselves during a joint marketing process for a potential sale of the
Company
– Joint marketing process was viewed as a value maximizing alternative
Conflicts Committee’s mandate is to be guided solely by careful
consideration of the best interests of all of the Company's shareholders
Aim to maintain arms-length relationship with SunEdison in TerraForm
Power’s decision-making
Company’s outside advisors include financial advisors Morgan Stanley,
Centerview Partners, and AlixPartners, and legal counsel Sullivan &
Cromwell LLP, Greenberg Traurig, and Hughes Hubbard & Reed LLP
6
Exhibit 99.1
Strategic Review: Supervised by Independent Conflicts Committee
5 independent directors added over the past year
Board now composed of 9 directors
– 8 of which are independent, and 5 of which are independent of both SunEdison and TerraForm
Global
All decisions with respect to any strategic transaction, including whether to
approve any transaction, will be made only following a determination that it is
in the best interest of all the Company’s shareholders and with the consent of a
majority of the independent directors
TERP Board of Directors
Independent
Director
Corporate
Governance &
Conflicts Committee
GLBL
Director
1) Edward "Ned" Hall Y Chair
2) Kerri L. Fox Y Y
3) David Pauker Y Y
4) Marc S. Rosenberg Y Y
5) Christian Fong Y
6) Christopher Compton Y Y
7) Hanif Dahya Y Y
8) Jack Stark Y Y
9) Peter Blackmore (Chairman) Y
7
Exhibit 99.1
Strategic Review: Evaluation of Stand-Alone Plan
From May to August 2016, the Company’s management team developed a
business plan for the Company to operate independently of SunEdison
The Company’s Conflicts Committee and Board of Directors reviewed in detail
the Company’s business plan under various scenarios, including the attendant
execution risks
The business planning process addressed multiple areas, including:
– Business model ‒ Growth prospects ‒ Dividend targets
– Organization design ‒ Investment strategy ‒ Capital structure
– Competitive position ‒ Project operations ‒ Corporate costs
The Company's financial advisors evaluated the strategic and financial
implications of the Company’s plan to operate on a stand-alone basis (without
a Yieldco sponsor), and its resulting competitive position in the global market
for renewable energy assets
After completion of this comprehensive review, the Conflicts Committee
recommended and the Board of Directors authorized the exploration of
strategic alternatives, including a potential sale of the Company and new
sponsorship arrangements
8
Exhibit 99.1
Strategic Review: Exploration of Strategic Alternatives
Strategic alternatives process announced September 19, 2016
– The Company also announced on that date that it was prepared to enter into
discussions to settle all intercompany claims with SunEdison on a schedule that
was consistent with the strategic alternatives process
– Settlement of claims necessary for any party to transact with the Company
Process overview
– Over the past several months, we have conducted a two-step auction process in
connection with a whole company or sponsorship transaction
– We contacted a broad range of strategic and financial parties to gauge their interest
– Bids were due in the beginning of January
– Following our evaluation of the bids submitted, we decided to enter into exclusivity
with Brookfield
9
Exhibit 99.1
Strategic Review: Joint Process with SunEdison
SunEdison was involved in the marketing process due to:
– SunEdison’s voting power
– The need for the SunEdison bankruptcy court’s approval for any SunEdison
decision regarding a sale
– The Conflict Committee’s belief that a coordinated process would yield a superior
outcome
All Company interaction with SunEdison has been, and continues to
be, at arm’s length
SunEdison’s insolvency had been assessed and considered by the
Conflicts Committee in weighing the various bidder proposals and
stand-alone alternatives, but all decisions are being made based on
what is in the best interest of all the Company’s shareholders
10
Exhibit 99.1
Strategic Review: Exclusivity with Brookfield
The Company entered into exclusive discussions with Brookfield on
January 20, 2017
The Conflicts Committee recommended and the full Board authorized
exclusivity after determining that doing so was in the best interest of
all Company shareholders
Entry into the Settlement MOU with SunEdison was also authorized
based upon the same determinations
The exclusivity period has been extended to March 6, 2017
The Company has not committed to enter into a transaction with
Brookfield or any other potential buyer
If the Company does not execute an M&A transaction with Brookfield
and accompanying settlement with SunEdison, the Company is
prepared to operate on a stand-alone basis while considering other
strategic alternatives
11
Exhibit 99.1
Settlement Agreement with SunEdison
Negotiations ongoing since MOU entered into on January 20, 2017
Deadline to enter into final agreement currently extended to February 24,
and we expect to enter into enter into final agreement soon
The Settlement Agreement is subject to SunEdison bankruptcy court
approval
Before entering into the MOU, the Conflicts Committee conducted a review
and analysis of the Company’s claims against SunEdison, as well as
SunEdison’s claims against the Company, with the advice of its
independent legal counsel and the Company’s restructuring and financial
advisors
Under the MOU, the split would be 36.9% to SunEdison / 63.1% to Class A
– SunEdison would receive 36.9% of consideration paid to all shareholders
– Remaining 63.1% distributed to Class A shareholders
– This split reflects the settlement of intercompany claims, IDRs, and other factors
Settlement is subject to agreement with SunEdison on a jointly-approved
M&A transaction, whether with Brookfield or another bidder
12
Exhibit 99.1
13
Results for 2Q 2016 and Estimates for 2016
Agenda
1
2 High-Quality, Diversified Renewable Power Fleet
3
Update on the Strategic Review Process
Exhibit 99.1
14
3.0 GW Wind and Solar Portfolio …
Exclusively renewable assets
Portfolio as of December 31, 2016
With Estimated Average 26 Year
Remaining Useful Life …
Average asset age of 3.6 years
With High Credit-Quality Counterparties
High quality average credit rating of A;
86% rated investment grade
1
Under Long-Term Contracts …
Average remaining PPA life of 15 years
11-15 years
50%
16-20 years
17%
20+ years
18%
6-10 years
5%
0-5 years
10%
AAA
1%
AA+
14%
AA
8%
AA-
1%
A+
13%
A
4%
A-
15%
BBB+
23%
BBB
4%
BBB-
3%
< IG
4%
NR
10%
Solar
49%
Wind
51%
1. 10% not rated; 4% rated non-investment grade
(MW Weighted)
(MW Weighted)(MW Weighted)
High-Quality Contracted Renewable Generation Portfolio
<2
years
27%
2-5 years
52%
>5 years
21%
Exhibit 99.1
15
Low Concentration RiskGeographically Diverse Fleet of 3.0 GW1
Portfolio as of December 31, 2016
Mt. Signal
9% South
Plains I
7%
California
Ridge
7%
Bishop Hill
6%
Rattlesnake
6%
Prairie
Breeze
6%Cohocton
4%
CAP
3%
Other
(all < 3%)
52%
1. TerraForm Power has entered into an agreement to sell 365 MW of its UK assets, with an expected closing in 2017
CAISO
17%
ISO-NE
13%
ERCOT
13%
PJM
10%
MISO
6%
SPP
6%
NYISO
6%
WECC
3%
SERC
2%
Other
24%
(MW Weighted)
Wind
1,532 MW
Solar
1,451 MW
Total US: 2,360 MW US Wind: 1,454 MW US Solar: 906 MW
Canada
145 MW
78 MW
68 MW
Chile
102 MW
102 MW
UK 1
376 MW
376 MW
OR – 1 MW MN – 2 MW
NE – 181 MW
NV – 32 MW
UT – 42 MW
CO – 12 MW
CA – 492 MW
TX – 387 MW Wind
1 MW Solar
HI – 81 MW Wind
1 MW Solar
OH – 10 MW
ME – 219 MW
NH – 1 MW
VT – 40 MW Wind
8 MW Solar
MA – 124 MW
CT – 2 MW
NY – 160 MW Wind
17 MW Solar
NJ – 63 MW
PA – 8 MW
MD – 20 MW
NC – 36 MW
IL – 386 MW
GA – 5 MW
FL – 9 MW
PR – 5 MW
NM – 1 MW
AZ – 15 MW
Diverse Asset Portfolio in Attractive and Stable Markets Exhibit 99.1
16
Results for 2Q 2016 and Estimates for 2016
Agenda
1
2 High-Quality, Diversified Renewable Power Fleet
3
Update on the Strategic Review Process
Exhibit 99.1
17
1. MW (net) in operation at end of period
2. Revenue adjusted for PPA amortization, changes in fair value of commodity hedges and ITC revenue amortization
3. Excludes non-operating cash costs incurred (costs that are not representative of our core operations)
Production below original
management expectations
primarily due to wind resource 7%
below average for 2Q
Year-over-year changes driven by
acquired Invenergy wind plants,
which have higher capacity factor
and lower price per MWh vs.
existing TERP fleet
($67M) negative impact to CAFD as
a result of accumulation of
restricted cash due to SunEdison
bankruptcy-triggered or related
defaults
Excluding these restricted cash
impacts, CAFD would have been
$53M
Non-GAAP Metrics 2Q 2016 2Q 2015
YoY change
(%)
MW (net) in operation1 2,983 1,883 58%
Capacity Factor 30% 24% +600 bps
MWh (000s) 2,038 944 116%
Adj. Revenue2 / MWh $99 $140 -29%
Adj. Revenue ($M)2 $201 $132 53%
Adj. EBITDA ($M)3 $151 $108 40%
Adj. EBITDA margin 75.1% 81.6% (650) bps
CAFD ($M)3 ($14) $63 n/a
2Q 2016 Results
CommentaryMetrics 2Q 2016 2Q 2015
YoY change
(%)
Revenue, net ($M) $187 $130 44%
Net Income / (Loss) ($M) ($45) $29 n/a
Exhibit 99.1
18
1. The figures provided are projections for year-end 2016 and are based on various assumptions and estimates regarding the Company’s past and future operations and performance. These assumptions and estimates may not prove to be correct and actual results could
differ materially due to various factors, many of which are not within the control of the Company. In addition, estimated results should not be viewed as indicative of the Company’s expectations for future periods. Please see “Importance of our Risk Factors” and “Forward-
Looking Statements”.
2. Excludes approximately $64M of non-operating cash costs expected to be incurred in 2016 (costs that are not representative of our core operations)
3. If some existing defaults are not resolved by deadline for 2016 CAFD reporting, up to approximately $57M of project level cash, that is currently projected as 2016 CAFD, could be shifted to 2017 CAFD.
4. Holdco unrestricted cash of $478M as of 12/31/2016 - includes cash at bank accounts owned by TerraForm Power, Inc., TerraForm Power, LLC and TerraForm Power Operating, LLC
Non-GAAP Metrics
Estimate
20161
MW, Net in Operation (Period End) 2,983
MWh (000s) 7,670 - 7,830
Capacity Factor 28% - 29%
Adj. Revenue ($M) $700 - $710
Adj. Revenue / MWh $89 - $91
Adj. EBITDA ($M)2 $520 - $530
Adj. EBITDA Margin 78%
CAFD ($M) $165 - $1853
2016 estimates of revenue, Adj. EBITDA, and
CAFD substantially in-line with management
expectations post-SunEdison bankruptcy
Expected net income range is now $35M lower
vs. previous estimate, due primarily to a non-
cash charge from an interest rate swap that we
recognized in 2Q resulting from our expected
UK asset sale
2016 forecast assumes that all project-level
defaults are resolved and resulting
reclassifications of project cash from restricted
to unrestricted favorably impacts 2016 CAFD
If some existing defaults are not resolved by the
future deadline for 2016 CAFD reporting, up to
$57M of project level cash, that is currently
projected as 2016 CAFD, could be shifted to
2017 CAFD
Holdco unrestricted cash of $478M4 as of
December 31, 2016
2016 Estimates
CommentaryMetrics
Estimate
20161
Revenue, net ($M) $665 - $675
Net Income ($M) ($180) - ($140)
Exhibit 99.1
19
$665
$700
$520
$165
$35
$165
$28 $14
$145
$104
$87
$24
$14 $8 $15
$675
$710
$530
$185
Revenue Adjustments Adj.
Revenue
Cost of
operations
G&A
(corp.
operating)
SUNE
G&A
support
Adj.
EBITDA
Project
debt:
interest
payments
Holdco
debt:
interest
payments
Principal
payments
Distrib.
to NCI
Maint.
capex
SUNE
interest
support
Other
adjustments
2016
CAFD
estimate
$705M
Midpoint
Adj. Revenue
2016 Revenue to CAFD Waterfall
$M, unless otherwise noted
2016 Estimates1
$525M
Midpoint
Adj.
EBITDA2
$175M
Midpoint
CAFD
1. The figures provided are projections for 2016 and are based on various assumptions and estimates regarding the Company’s past and future operations and performance. These assumptions and estimates may not
prove to be correct and actual results could differ materially due to various factors, many of which are not within the control of the Company. In addition, estimated results for 2016 should not be viewed as indicative of the
Company’s expectations for future periods. Please see “Importance of our Risk Factors” and “Forward-Looking Statements”.
2. Excludes approximately $64M of non-operating cash costs expected to recorded in 2016 (costs that are not representative of our core operations)
3. Does not include special interest payment of $12M
$670M
Midpoint
Revenue
2
3
Exhibit 99.1
Commentary on 2017
No update on 2017 estimates, as we are in exclusivity with Brookfield,
and the outcome of that process is expected to impact company
actions and financial results for 2017
Management continues to evaluate options for 2017 to optimize the
portfolio and capital structure
Our previously published estimate for the 2017 CAFD range of $120M-
$160M incorporated several planned actions including:
– UK portfolio sale
– Upsize of Canada project financing
– Paydown or refinancing of various corporate or project-level credit facilities
– Opportunistic divestiture or acquisition opportunities
We expect to provide updated 2017 estimates once the strategic
alternatives process is concluded
20
Exhibit 99.1
Appendix
21
Exhibit 99.1
22
Definitions: Adjusted Revenue, Adjusted EBITDA and
Cash Available For Distribution (CAFD)
Reconciliation of Operating Revenues, Net to Adjusted Revenue
We define adjusted revenue as operating revenues, net, adjusted for non-cash items including unrealized gain/loss on derivatives, amortization
of favorable and unfavorable rate revenue contracts, net and other non-cash revenue items. We believe adjusted revenue is useful to investors
in evaluating our operating performance because securities analysts and other interested parties use such calculations as a measure of
financial performance. Adjusted revenue is a non-GAAP measure used by our management for internal planning purposes, including for certain
aspects of our consolidated operating budget.
Reconciliation of Net Income (Loss) to 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, and certain other non-cash charges, unusual or non-recurring items and other items that we believe
are not representative of our core business or future 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.
Note: As of December 31, 2015, TerraForm Power 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, or other causes. 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 full year reported or forecasted CAFD is immaterial.
Reconciliation of Adjusted EBITDA to CAFD
Effective December 31, 2015, we define “cash available for distribution” or “CAFD” as adjusted EBITDA of Terra LLC as adjusted for certain
cash flow items that we associate with our operations. Cash available for distribution represents adjusted EBITDA (i) minus deposits into (or
plus withdrawals from) restricted cash accounts required by project financing arrangements to the extent they decrease (or increase) cash
provided by operating activities, (ii) minus cash distributions paid to non-controlling interests in our renewable energy facilities, if any, (iii) minus
scheduled project-level and other debt service payments and repayments in accordance with the related borrowing arrangements, to the extent
they are paid from operating cash flows during a period, (iv) minus non-expansionary capital expenditures, if any, to the extent they are paid
from operating cash flows during a period, (v) plus or minus operating items as necessary to present the cash flows we deem representative of
our core business operations, with the approval of the audit committee.
Note: CAFD 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.
Exhibit 99.1
23
Reg G: Reconciliation of Net Operating Revenue to Adjusted Revenue,
Net Income / (Loss) to Adjusted EBITDA and Adjusted EBITDA to CAFD
$M, unless otherwise noted
Three Months Ended June 30, FY Midpoint
Reconciliation of Operating Revenues, Net to Adjusted Revenue 2016 2015 2016 Estimate
Operating revenues, net $187 $130 $670
Unrealized loss (gain) on derivatives, net (a) 6 (2) 7
Amortization of favorable and unfavorable rate revenue contracts, net (b) 10 5 42
Other non-cash items (c) (2) (1) (14)
Adjusted revenue $201 $132 $705
Reconciliation of Net Income (Loss) to Adjusted EBITDA
Net income (loss) ($45) $29 ($160)
Interest expense, net 101 36 323
Income tax provision 2 1 3
Depreciation, accretion and amortization expense (d) 71 43 278
General and administrative expenses (e) 12 17 74
Stock-based compensation expense (f) 1 2 5
Acquisition and related costs, including affiliate (g) – 7 3
Unrealized loss (gain) on derivatives, net (h) 6 (2) 6
Loss (gain) on extinguishment of debt, net (i) – (11) –
Impairment charge related to residential solar assets not placed in service – – 9
Loss (gain) on foreign currency exchange, net (j) 5 (14) 6
Loss on investments and receivables with affiliate (k) – – 1
Other non-cash operating revenues (l) (2) – (14)
Other non-operating expenses (m) (0) – (9)
Adjusted EBITDA $151 $108 $525
Reconciliation of Adjusted EBITDA to CAFD
Adjusted EBITDA $151 $108 $525
Interest payments (60) (41) (249)
Principal payments (33) (11) (87)
Cash distributions to non-controlling interests, net (6) (3) (24)
Non-expansionary capital expenditures (2) (4) (14)
(Deposits into)/withdrawals from restricted cash accounts (66) 5 (1)
Other:
Contributions received pursuant to agreements with SunEdison (n) – 3 8
Economic ownership adjustments (o) – 6 –
Other items 2 (0) 16
Estimated cash available for distribution ($14) $63 $175
Impact of defaults on changes in restricted cash (p) (67) – –
Estimated cash available for distribution excluding defaults $53 $63 $175
Exhibit 99.1
24
Footnotes to Reg. G
a) Represents the change in the fair value of commodity contracts not designated as hedges.
b) Represents net amortization of favorable and unfavorable rate revenue contracts included within operating revenues, net.
c) Primarily represents deferred revenue recognized related to the upfront sale of investment tax credits to non-controlling interest members.
d) Includes amortization of favorable and unfavorable rate revenue contracts, recorded within operating revenues, of $5.4 million and $9.8 million for the three
months ended June 30, 2015 and 2016, respectively, and $41.8 million for the twelve month estimate ending December 31, 2016.
e) Pursuant to the management services agreement, SunEdison agreed to provide or arrange for other service providers to provide management and
administrative services to us. For the quarter ended June 30, 2015, cash considerations of $1.3M were paid to SunEdison for these services, and the
amount of general and administrative expense – affiliate in excess of the fees paid to SunEdison in each period is treated as an addback in the
reconciliation of net income (loss) to Adjusted EBITDA. In addition, non-operating items and other items incurred directly by TerraForm Power that we do not
consider indicative of our core business operations will be treated as an addback in the reconciliation of net income (loss) to Adjusted EBITDA. The
Company’s normal general administrative expenses, not paid by SunEdison, are not added back in the reconciliation of net income (loss) to Adjusted
EBITDA. For the three months ended June 30, 2016 and twelve month estimate ending December 31, 2016, Terraform Power made payments, or will make
payments, of $5.7 million and $14 million, respectively, directly to suppliers for normal operating general and administrative expenses.
f) Represents stock-based compensation expense recorded within general and administrative expenses and within general and administrative expenses –
affiliate.
g) Represents transaction related costs, including affiliate acquisition costs, associated with acquisitions.
h) Represents the unrealized change in the fair value of commodity contracts not designated as hedges.
i) We recognized a net gain of $11.4M on extinguishment of debt related to the Duke operating portfolio in the quarter ended June 30, 2015.
j) Represents net losses and (gains) on foreign currency exchange, primarily due to unrealized gains/losses on the re-measurement of intercompany loans
which are primarily denominated in British pounds.
k) As a result of the SunEdison Bankruptcy, we recorded a bad debt reserve during the six months ended June 30, 2016 related to outstanding receivables
from debtors in the SunEdison bankruptcy.
l) Primarily represents deferred revenue recognized related to the upfront sale of investment tax credits to non-controlling interest members.
m) Represents certain other non-cash charges or non-operating items that we believe are not representative of our core business or future operating
performance.
n) We received an equity contribution from SunEdison of $6.6 million in August 2015, of which $3.3 million was attributed to the three months ended June 30,
2015, and $8.0 million in February 2016 pursuant to the Amended Interest Payment Agreement. No contributions were received pursuant to this agreement
during the three months ended June 30, 2016.
o) Represents economic ownership of certain acquired operating assets which accrued to us prior to the acquisition close date. The amount recognized for the
three months ended June 30, 2015 are related to the acquisitions of Northern Lights of $3.7 million, and Integrys and Moose Power of $2.7 million. All three
acquisitions closed during the three month period ended June 30, 2015.
p) Represents the accumulation of restricted cash as of June 30, 2016 due to the impact of SunEdison bankruptcy-triggered or related defaults.
Exhibit 99.1
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Exhibit 99.1