Form 8-K TERRAFORM GLOBAL, INC. For: Sep 16
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 16, 2016
______________________________________________________________
TerraForm Global, Inc.
(Exact name of registrant as specified in its charter)
______________________________________________________________
Delaware | 001-37528 | 47-1919173 |
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (IRS Employer Identification No.) |
7550 Wisconsin Avenue, 9th Floor, Bethesda, Maryland 20814
(Address of principal executive offices, including zip code)
(240) 762-7700
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 7.01 Regulation FD Disclosure.
On September 16, 2016, TerraForm Global, Inc. (the “Company”) issued a press release announcing that it had posted a presentation to the Investor section of its website containing certain preliminary unaudited summary financial information for the second quarter of 2016. A copy of the press release is attached hereto as Exhibit 99.1. A copy of the preliminary unaudited summary financial information is attached hereto as Exhibit 99.2. The preliminary unaudited summary financial information should be read in conjunction with the risk factors the Company previously furnished to the Securities and Exchange Commission as an exhibit to its Current Report on Form 8-K on July 20, 2016. The preliminary unaudited financial information may change materially as a result of the completion of the audit of, and completion of quarterly review procedures with respect to, the Company’s financial results. The preliminary unaudited financial information does not represent a complete picture of the Company’s financial position, results of operations or cash flows and is not a replacement for full financial statements prepared in accordance with U.S. GAAP.
In accordance with General Instruction B.2 of Form 8-K, the information contained in Item 7.01 of this Current Report on Form 8-K shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in Item 7.01 of this Current Report on Form 8-K shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.
Cautionary Note Regarding Forward-Looking Statements. Except for historical information contained in this Form 8-K and the press release attached as an exhibit hereto, this Form 8-K and the press release contain forward-looking statements which involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements. Please refer to the cautionary note in the press release regarding these forward-looking statements.
Item 9.01 Financial Statement and Exhibits.
(d) Exhibits
Exhibit No. | Description |
99.1 | Press release, dated September16, 2016, titled “TerraForm Global Provides Preliminary 2Q 2016 Summary Results” |
99.2 | Slide Deck, dated September 16, 2016, titled “TerraForm Global Preliminary Summary Results for 2Q 2016” |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
TERRAFORM GLOBAL, INC. | ||||||
By: | /s/ Rebecca Cranna | |||||
Date: | September 16, 2016 | Name: | Rebecca Cranna | |||
Title | Executive Vice President and Chief Financial Officer |
Exhibit Index
Exhibit No. | Description |
99.1 | Press release, dated September16, 2016, titled “TerraForm Global Provides Preliminary 2Q 2016 Summary Results” |
99.2 | Slide Deck, dated September 16, 2016, titled “TerraForm Global Preliminary Summary Results for 2Q 2016” |
Exhibit 99.1
FOR IMMEDIATE RELEASE
TerraForm Global Provides Preliminary 2Q 2016 Summary Results
BETHESDA, Md., September 16, 2016 (GLOBENEWSWIRE) -- TerraForm Global, Inc. (Nasdaq: GLBL) (“the Company”), a global owner and operator of clean energy power plants, has posted a presentation on its website today containing certain preliminary unaudited summary financial information for the second quarter of 2016. The preliminary summary financial information may change materially as a result of the completion of the audit of, and completion of quarterly review procedures with respect to, the Company’s financial results. The information does not represent a complete picture of the Company’s financial position, results of operations or cash flows and is not a replacement for full financial statements prepared in accordance with U.S. GAAP.
TerraForm Global previously furnished to the Securities and Exchange Commission risk factors relating to the Company’s business on Form 8-K on July 20, 2016, which also contained the Company’s published interim financial statements for the first quarter of 2016. The updated risk factors relating to the Company provided in the July 20, 2016 filing 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, and should be read together with the Company’s preliminary 2Q 2016 summary results published today.
The financial information published today and risk factors published on July 20, 2016 may be found on the Investor section of the Company’s website at www.terraformglobal.com. They have also been included as exhibits to Forms 8-K furnished by the Company to the Securities and Exchange Commission.
About TerraForm Global
TerraForm Global is a renewable energy company that is changing how energy is generated, distributed and owned. TerraForm Global creates value for its investors by owning and operating clean energy power plants in high-growth emerging markets. For more information about TerraForm Global, please visit: www.terraformglobal.com.
Cautionary Note Regarding 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 for management, corporate 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; risks related to events of default and potential events of default arising under project-level financings and other agreements related to the chapter 11 proceedings of SunEdison and our failure to obtain corporate and project-level audits; risks related to our failure to satisfy the requirements of Nasdaq; our ability to integrate the projects we acquire from third parties or otherwise realize the anticipated benefits from such acquisitions, including through refinancing or future sales; 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 we intend to acquire; our ability to successfully identify, evaluate, and consummate acquisitions from third parties, including SunEdison or changes in expected terms and timing of any acquisitions; our ability to complete our pending 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, particularly executive officers or key employees and operations and maintenance or asset management personnel that we significantly rely upon; 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, the risk factors furnished to the Securities and Exchange Commission as part of the Current Report on Form 8-K on July 20, 2016, 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.
Contacts:
Investors:
Brett Prior
TerraForm Global
Media:
Meaghan Repko / Joseph Sala / Nicholas Leasure
Joele Frank, Wilkinson Brimmer Katcher
(212) 355-4449
P. 1
Logo to be
replaced
TerraForm Global
Preliminary Summary Results for 2Q 2016
September 16, 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 for management, corporate 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; risks related to events of default and potential events of default arising under project-level financings and
other agreements related to the chapter 11 proceedings of SunEdison and our failure to obtain corporate and project-level audits; risks related to our failure to satisfy the
requirements of Nasdaq; our ability to integrate the projects we acquire from third parties or otherwise realize the anticipated benefits from such acquisitions, including through
refinancing or future sales; 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 we intend to acquire; our ability to successfully identify, evaluate, and
consummate acquisitions from third parties, including SunEdison or changes in expected terms and timing of any acquisitions; our ability to complete our pending 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, particularly executive officers or key employees and operations and
maintenance or asset management personnel that we significantly rely upon; 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, the risk factors furnished to the Securities and Exchange Commission
as part of the Current Report on Form 8-K on July 20, 2016, 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 Risk Factors
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 and review procedures for 1Q 2016 and 2Q 2016
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 or its Form 10-Qs
for the periods ending March 31, 2016 or June 30, 2016. 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 furnished
to the SEC as part of our current report on Form 8-K on July 20, 2016, 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, and the subsequent Form 8-K filings since July
20, 2016. You should refer also to the unaudited financial information for the fiscal year
2015 and for the fiscal quarter 1Q 2016 and the other periodic filings we have made with
the SEC
P. 4
Overview
This presentation provides certain preliminary unaudited summary financial
results for 2Q 2016
The results are provided in a format consistent with the preliminary
unaudited results we previously published for 2H 2015 and 1Q 2016
Please review these results together with the risk factors detailed in our 8 -K
filed on July 20, 2016 and with our subsequent 8-K filings
TerraForm Global remains focused on key areas of execution
– Continuity of operations
– Independence: governance, systems, employees
– Stabilize and strengthen balance sheet
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 August 31, 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 August 31, 2016. Weighted by net capacity of 917 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%
>20 years
30%
11-15 years
26%
16-20 years
44%
<2 years
27%
>5 years
25%
2-5 years
48%
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 2Q 2016 Results
Metric 2Q 2016
Net MW Owned (Period End) 917
Production (GWh) 605
Capacity Factor 28%
Revenue $52M - $56M
Revenue / MWh $87M - $91M
Net Income $0M - $8M
Adjusted EBITDA $40M - $46M
CAFD $18M - $24M
Commentary
Net MW Owned increased by 26 MW in 2Q
due to the acquisition of Alto Cielo (Uruguay
solar) in April
Production and Revenue below management
expectations due primarily to curtailment in
China, and some wind turbines offline in India
and Brazil
Total production up 20% from 1Q 2016
primarily due to normal seasonality
Revenue / MWh down 11% from 1Q 2016 due
to mix, as a larger percentage of total
production was from lower priced wind PPAs
in 2Q 2016
CAFD negatively impacted by $13M in
accumulation of restricted cash in South
Africa and India due to SunEdison
bankruptcy-triggered or related defaults
Note: Ranges have been provided for key financial metrics as the interim financial statements for the period ended June 30, 2016 are still under review.
Capacity factor calculated based on gross capacity of 990 MW, which generated 605 GWh in the 91 days in 2Q
P. 9
Holdco Cash Walk from 1Q 2016 to 2Q 2016
$M, unless otherwise noted
■ Ending 2Q 2016 Holdco unrestricted cash of $770M, inclusive of $135M revolver draw from 4Q 2015
– ($79M) of 2Q 2016 acquisition ($35M for Alto Cielo), deleverings ($24M NSM24; $20M Dunhuang EPC loan)
– ($19) Other includes ($13M) in corporate expenses, ($6M) in other
■ August 31, 2016 Holdco unrestricted cash of $723M, net change of ($47M) from June 30, 2016
– $10M Project distributions in July and August
– ($39M) Debt service2 in July and August
– ($14M) Corporate expenses in July and August
– ($4M) Payment for construction costs of Thailand assets
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 restrictions due to defaults.
1. Holdco unrestricted cash excludes unrestricted BV and project cash and restricted cash at the corporate level, project level or in escrow.
2. Includes $37M Senior Note interest and $2M revolver fees and interest. SunEdison did not pay amounts due in August under the Interest Payment Agreement.
Est. $723M Holdco
Unrestricted Cash
as of 8/31/2016,
before $135M
revolver paydown
on September 8th
P. 10
Appendix
P. 11
Risk Factors
Please refer to the risk factors furnished to the SEC on Form
8-K filed July 20, 2016 and to subsequent Form 8-K filings
P. 12
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, 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.
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 2Q 2016 difference is immaterial.
P. 13
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. Thereafter, 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. In addition, non-recurring items and other items incurred directly by TerraForm Global 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.
(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. Acquisition or formation costs were less than $0.5 million during the three months ended June 30,
2016.
(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) 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
$M 2Q
Net income (Midpoint of Range) $4
Add (subtract):
Interest expense, net 29
Income tax benefit 5
Depreciation, accretion and amortization expense 15
General and administrative expense-aff iliate (a) 10
Stock-based compensation expense 1
Acquisition, formation and related costs (b) (0)
Loss (gain) on foreign currency exchange, net (c) (17)
Other income, net (4)
Adjusted EBITDA - Midpoint of Range (d) $43
P. 14
Reg G: Reconciliation of Cash from Operations to CAFD
(Midpoint of Range)
(a) Changes in operating assets and liabilities includes adjustment of ($41M) for the three months ending June 30, 2016 to reflec t proper treatment of reduction in receivable associated with 1Q interest
payment made by SunEdison
(b) The FX translation to USD of deposits or withdrawals from restricted cash held in foreign currencies is calculated using a c onstant currency method which removes the impact of changes in exchange
rates during the relevant period
(c) Represents SunEdison’s payment of interest related to GLBL’s senior notes per the terms of the Interest Support Agreement. N o contributions were received during the three month period ending
June 30, 2016.
(d) 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.
Thereafter, 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 Cash Provided
by Operating Activities to CAFD. In addition, non-recurring items and other items incurred directly by TerraForm Global that we do not consider indicative of our core business operations will be treated
as an addback in the reconciliation of Net Cash Provided by Operating Activities to CAFD . The Company’s normal general administrative expenses, not paid by SunEdison, are not added back in the
reconciliation of Net Cash Provided by Operating Activities to CAFD.
(e) 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. Acquisition or formation costs were less than $0.5 million during the three months ended June 30, 2016.
(f) 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
$M Adjustments to reconcile net cash provided by operating
activities to cash available for distribution:
2Q
Net cash used in operating activities ($50)
Changes in operating assets and liabilities (a) 56
Additions to restricted cash accounts (b) (11)
Cash distributions to non-controlling interests -
Scheduled project level and other debt service and repayments (2)
Non-expansionary capital expenditures (1)
Contributions received pursuant to agreements w ith SunEdison (c) -
Other:
General and administrative expense - aff iliate (d) 3
Acquisitions, formation and related costs (e) (0)
Change in accrued interest 20
Viability Gap Funding - India 2
Other items 4
Estimated cash available for distribution - Midpoint of Range (f) $21
P. 15
Reconciliation of Adjusted EBITDA to CAFD
$M
a) Includes distributions to non-controlling interests, non-expansionary capital expenditures, and other cash flows applicable to CAFD
2Q 2016
Adjusted EBITDA (Midpoint of Range) $43
Interest Payments (6)
Principal Payments (2)
Other (a) (3)
Changes in Restricted Cash (11)
Estimated Cash Available for Distirbution (Midpoint of Range) $21
Impact of SunEdison bankruptcy-triggered or related defaults on Changes in Restricted Cash (13)
Estimated CAFD before impact of SunEdison bankruptcy-triggered or related defaults on Changes in Restricted Cash $34
P. 16
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