Form 8-K TerraForm Power, Inc. For: Nov 29
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E-mailUNITED 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): November 29, 2016
____________________________________________________________
TerraForm Power, Inc.
(Exact name of registrant as specified in its charter)
______________________________________________________________
Delaware | 001-36542 | 46-4780940 |
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I. R. S. 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 November 29, 2016, TerraForm Power, Inc. (the “Company”) issued a press release announcing that it had posted a presentation to the Investor section of its website containing preliminary 2015 results, estimates for key financial metrics for 2016 and an update on the Company’s path forward as an operationally independent company. A copy of the press release is attached hereto as Exhibit 99.1. A copy of the presentation is attached hereto as Exhibit 99.2. The information contained in the presentation 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 26, 2016 and with subsequent filings on Form 8-K. The preliminary 2015 results and the estimates for key financial metrics for 2016 may change materially as a result of the completion of the audit of, and completion of review procedures with respect to, the Company’s financial results. The preliminary 2015 results and the estimates for key financial metrics for 2016 do not represent a complete picture of the Company’s financial position, results of operations or cash flows and are 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 and the presentation attached as exhibits hereto, this Form 8-K, the press release and the presentation 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 and presentation regarding these forward-looking statements.
Item 9.01 Financial Statement and Exhibits.
(d) Exhibits
Exhibit No. | Description |
99.1 | Press release, dated November 29, 2016, titled “TerraForm Power Posts Investor Presentation” |
99.2 | Presentation, dated November 29, 2016, titled “Investor Update” |
SIGNATURES
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 POWER, INC. | ||
Date: November 29, 2016 | By: | /s/ Rebecca Cranna |
Name: | Rebecca Cranna | |
Title: | Executive Vice President and Chief Financial Officer | |
Exhibit Index
Exhibit No. | Description |
99.1 | Press release, dated November 29, 2016, titled “TerraForm Power Posts Investor Presentation” |
99.2 | Presentation, dated November 29, 2016, titled “Investor Update” |
Exhibit 99.1
TerraForm Power Posts Investor Presentation
Summarizes Strong Performance of Diverse and Best-in-Class Asset Portfolio
Provides 2016 Estimates In-Line with Management Expectations
Provides Update on Progress to Operate Independently by January 2017
BETHESDA, Md., Nov. 29, 2016 (GLOBE NEWSWIRE) -- TerraForm Power, Inc. (Nasdaq: TERP) (the “Company”), an owner and operator of clean energy power plants, posted a presentation today on its website containing estimates for key financial metrics for 2016 and an update on the Company’s clear path forward as an operationally independent company. The presentation is available on the Investors section of the TerraForm Power website at www.terraformpower.com. The presentation has also been included as an exhibit to Form 8-K furnished by the Company to the Securities and Exchange Commission.
“The Board and management team continue to successfully execute on our strategy and make significant progress towards achieving our objectives and independence,” said Peter Blackmore, TerraForm Power’s Chairman and Interim Chief Executive Officer. “I am proud of the work our team has done to navigate the challenges that were beyond our control. Despite these headwinds, the company has shown consistently high operational performance of its wind and solar assets. We also maintained financial flexibility and managed our credit relationships over the last several quarters. To ensure effective oversight, the Board increased the authority of the Corporate Governance and Conflicts Committee, comprised of independent directors. We remain committed to acting in the best interest of the company and maximizing value for stockholders.”
Highlights of the presentation include:
TerraForm Power’s Best-in-Class Contracted Renewable Generation Portfolio Remains Strong:
• | TerraForm Power’s 3.0 GW wind and solar portfolio is comprised exclusively of renewable assets with an average age of 3 years and average estimated remaining lifespan of 27 years. |
• | Assets are under long-term contracts with average remaining PPA life of 15 years with high-quality credit counterparties. |
• | Portfolio boasts a diverse mix of assets across attractive and stable markets with low concentration risk. |
Forecasted 2016 Results:
• | For full year 2016, TerraForm Power expects to deliver adjusted revenue of $697 - $712 million, a net loss of $105 - $145 million and adjusted EBITDA of $517 - $532 million. |
• | Forecasted 2016 financial metrics are in-line with management expectations post-SunEdison bankruptcy. |
• | 2016 cash available for distribution (“CAFD”) is expected to be substantially lower than pre-SunEdison bankruptcy estimates due to various factors, including loss of financial and operational support from SunEdison, increased debt service costs and uncertainty regarding the resolution of project-level restrictions on dividends and other payments. |
TerraForm Power’s Clear Path Forward as an Operationally Independent Company:
• | The Company is taking significant actions to ensure business continuity as it separates operations from SunEdison: |
◦ | Management has focused on developing a stand-alone structure that will allow the Company to operate independently from SunEdison. |
◦ | Implementing a retention plan to maintain its experienced team and developing a new organization structure to streamline and allocate responsibilities. |
◦ | Increased authority of the Corporate Governance and Conflicts Committee. |
◦ | Added three new independent directors on November 23, 2016, bringing the Board’s independent director composition to six of ten directors. |
• | TerraForm Power expects to be operationally independent by January 2017. |
As previously announced on September 19, 2016, the TerraForm Power Board of Directors has initiated a process to explore and evaluate potential strategic alternatives to maximize stockholder value, including a merger or sale of its entire business. This process is ongoing and the Company will continue to provide updates as the process unfolds.
TerraForm Power has engaged Centerview Partners, Morgan Stanley and AlixPartners as financial advisors and Sullivan & Cromwell LLP as its legal advisor.
About TerraForm Power
TerraForm Power is a renewable energy company that is changing how energy is generated, distributed and owned. TerraForm Power creates value for its investors by owning and operating clean energy power plants. For more information about TerraForm Power, please visit: www.terraformpower.com.
Cautionary Note Regarding Forward-Looking Statements
This communication and our filings with the Securities and Exchange Commission, including without limitation the Form 8-K filed on July 26, 2016, contain 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 financial metrics such as 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 are based on 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 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 due to various factors; risks related to our failure to satisfy the requirements of Nasdaq; our ability to sell projects at attractive prices as well as 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 and the actions of our bondholders and other creditors; price fluctuations, termination provisions and buyout provisions in offtake agreements; delays or unexpected costs during the completion of projects we intend to acquire; 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 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, including to manage the transition from SunEdison information technology, technical, accounting and generation monitoring systems, to manage and complete governmental filings on a timely basis, and to manage our capital expenditures. 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, 2014, 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 26, 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 Power
Media:
Meaghan Repko / Joseph Sala / Nicholas Leasure
Joele Frank, Wilkinson Brimmer Katcher
(212) 355-4449
Investor Update
November 29, 2016
Exhibit 99.2
2
This communication and our filings with the Securities and Exchange Commission, including without limitation the Form 8-K filed on July 26, 2016, contain
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 financial metrics such as
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 are based on 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 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 due to various factors; risks related to our failure to satisfy
the requirements of Nasdaq; our ability to sell projects at attractive prices as well as 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 and the actions of our bondholders and other creditors; price fluctuations, termination provisions and buyout provisions in
offtake agreements; delays or unexpected costs during the completion of projects we intend to acquire; 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 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,
including to manage the transition from SunEdison information technology, technical, accounting and generation monitoring systems, to manage and
complete governmental filings on a timely basis, and to manage our capital expenditures. 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, 2014, 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 26, 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.
Forward-Looking Statements
Exhibit 99.2
3
This presentation provides limited preliminary unaudited cash balances for 3Q 2016 and estimates for
financial metrics for 2016
Please review these results together with the risk factors detailed in our 8-K filed on July 26, 2016 and with
our subsequent 8-K filings
The financial information presented on the following slides is preliminary and unaudited and includes
estimates which are inherently uncertain. Financial information may change materially as a result of the
completion of the audit for fiscal year 2015 and review procedures for 1Q 2016, 2Q 2016 and 3Q 2016. Our
estimates are based on various assumptions and are subject to various risks which could cause actual results
to differ materially. Further, our preliminary results and estimates should not be viewed as indicative of future
results which may differ materially.
The information does not represent a complete picture of the financial position, results of operation or cash
flows of TerraForm Power (“TerraForm Power” 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, June 30, 2016, or September 30, 2016. The circumstances of the Company and the risks it faces have
changed substantially since 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 26, 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 26, 2016. You should refer also to the unaudited
financial information for the fiscal year 2015 and for the fiscal quarters of 1Q 2016 and 2Q 2016 and the other
periodic filings we have made with the SEC.
Importance of our Risk Factors
Exhibit 99.2
TerraForm Power Remains Focused on Key Areas of Execution
2016 was a year of transition and immense change
TERP team is successfully navigating challenges and is preparing for
2017 as a well-functioning independent company
Continuity of operations: TERP fleet continues to perform well
Independence: Solid progress on moving TERP to a stand-alone entity,
expansion of board to 10 members, including 6 independents
Strengthen balance sheet: Canada financing reduces Holdco debt
Collaborative sales process with aim of maximizing value for all
stockholders
Audit progressing; working towards full compliance with all periodic
reporting requirements by extended Nasdaq deadline of March 2017
Negotiating consents with bondholders, including with respect to delayed
filings of annual and quarterly reports. This process is ongoing and
current consent solicitation expires on December 2, 2016.
Exhibit 99.2
5
Clear Path Forward as Operationally Independent Company
Agenda
2
1
3
Estimates for 2016 Key Financial Metrics
High-Quality, Diversified Renewable Power Fleet
Exhibit 99.2
High-Quality, Diversified Renewable Power Fleet
Exhibit 99.2
7
3.0 GW Wind and Solar Portfolio …
Exclusively renewable assets
Portfolio as of October 31, 2016
… With Estimated Average 27 Year
Remaining Useful Life
Average asset age of 3 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
46%
16-20 years
24%
20+ years
18%
6-10 years
2%
0-5 years
10%
2-7 Years
68%
<2 Years
32%
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)
Best-in-Class Contracted Renewable Generation Portfolio
Exhibit 99.2
8
Low Concentration RiskGeographically Diverse Fleet of 3.0 GW
Solar and Wind Portfolio as of October 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 is considering a sale of certain of its UK assets
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
1,456 MW
Total U.S.: 2,364 MW U.S. Wind: 1,454 MW U.S. Solar: 910 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 – 501 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 – 123 MW
CT – 1 MW
NY – 160 MW Wind
16 MW Solar
NJ – 63 MW
PA – 8 MW
MD – 19 MW
NC – 36 MW
IL – 386 MW
GA – 5 MW
FL – 9 MW
PR – 5 MW
NM – 1 MW
AZ – 12 MW
Diverse Asset Portfolio in Attractive and Stable Markets
Exhibit 99.2
Estimates for 2016 Key Financial Metrics
Exhibit 99.2
10
Metric 20151 Estimate 20162
Net MW Owned (Period End) 2,967 2,987
Production (GWh) 3,462 7,670 – 7,830
Capacity Factor 22% 28% - 29%
Revenue ($M) $470 $664 - $679
Adjusted Revenue ($M) $467 $697 - $712
Adjusted Revenue / MWh $135 $90 - $92
Net Income ($M) ($208) ($105) - ($145)
Adjusted EBITDA ($M)3 $358 $517 - $532
2016 estimates of key financial metrics substantially in-line with management expectations post-SunEdison
bankruptcy
No estimate provided for 2016 CAFD, which is expected to be substantially lower than forecasted pre-
SunEdison bankruptcy due to various factors, including loss of financial and operational support from
SunEdison, increased debt service costs, and uncertainty regarding the resolution of project-level restrictions
on dividends and other payments. These factors also are expected to adversely affect 2017 CAFD
Preliminary 2015 Results and 2016 Estimates
1. Financials for 2015 are still under review and may change due to TERP’s on-going 10-K Audit completion and various factors
2. The figures provided are projections for year-end 2016 and are based on various assumptions and estimates regarding the Company’s 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, estimates beyond year-end 2016 are not provided and estimated results for year-end 2016 should not be viewed as indicative of the Company’s expectations
for future periods. Please see “Importance of Risk Factors” and “Forward-Looking Statements”.
3. Excludes approximately $64M of non-operating cash costs expected to be incurred in 2016
Exhibit 99.2
11
$523
$496
$78
($43)
($39)
($23)
6-30-2016 Holdco
Unrestricted Cash
Project
Distributions
Debt Service Acquisitions &
Dropdowns
Opex & Other 9-30-2016 Holdco
Unrestricted Cash
$M, unless otherwise noted
Holdco cash decreased ($27M) from June 30 to September 30
Project cash distributions of $78M in 3Q (YTD distributions through 9/30 of $207M)
Debt service of ($39M) for Bond and Revolver interest
Acquisitions & Dropdowns of ($23M) primarily for 18 MW River Mountain plant acquired from SUNE in 1Q
Opex & Other of ($43M) consists of:
– ($25M) Non-operating cash costs
– ($5M) Operational G&A2
– ($6M) Bondholder consent fee
– ($8M) working capital transfer to projects
Note: Since 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 project cash and restricted cash at the corporate level, project level or in escrow.
2. The Operational G&A does not include the portion of G&A expenses that SunEdison continues to pay
1 1
Preliminary Holdco Cash Walk from June 30 to September 30, 2016
Exhibit 99.2
Clear Path Forward as Operationally Independent Company
Exhibit 99.2
13
Stand-alone Organizational Structure
Independent IT Infrastructure
3rd Party Asset Management and O&M Providers
Operationally Independent
by January 2017
TargetActions In Process
TerraForm Power has taken significant actions to ensure business continuity and
separation from SunEdison
Focused on implementing a stand-alone structure that will allow the company to operate as fully
independent entity
Increased authority of the Corporate Governance and Conflicts Committee
Added 3 new independent board members in November; 6 / 10 directors now independent1
The organization should be operationally independent by January 2017, with limited tail activities
stretching into early 2017
Driving to Operational Independence
1. List of Board Members detailed in Appendix
Exhibit 99.2
14
Stand-alone Organizational Structure
■ New SaaS / cloud based architecture being
implemented to enhance system and
leverage cost efficiencies
■ Initial focus on data migration and document
retention to preserve and protect TERP
information
■ Implementation expected to streamline
business processes and procedures
Independent IT Infrastructure
3rd Party Asset Management and O&M
Providers
■ Implemented a retention plan for in-house talent to minimize attrition and stabilize business
operations
■ Evaluated key functions and activities in order to develop a stand-alone structure
■ Developed new organization structure to streamline and allocate responsibilities for stand-alone
organization
■ Implementing plan to directly employ all key personnel by January 1, 2017
■ As the result of a robust RFP process to
identify back-up service providers, TERP is
retaining world-class 3rd party service
providers
■ The securing of new providers may yield
additional benefits from a service, scope,
and/or cost perspective
1
2 3
Substantially Independent Operations by January 2017
Exhibit 99.2
15
■ Sale of UK assets being actively pursued
■ Reducing Holdco debt
– On November 2, TERP secured $90M (CAD$120M) in project-level
financing for its utility-scale solar plants in Canada through a 7-year non-
recourse portfolio loan with an average interest rate of 3.7%
– The proceeds were used to pay down TERP’s revolver by $70M
– The credit facility also allows TERP to increase the principal of the loan
by up to an additional CAD$123M (subject to certain conditions and
obtaining additional lender commitments)
■ Both transactions expected to reduce TERP’s leverage ratios
for Holdco debt and consolidated debt
Successfully Executing Plan to Reduce Corporate Debt
Reducing Holdco Leverage to Enable Future Growth
Exhibit 99.2
16
Exploring strategic alternatives
– Advised by Morgan Stanley, Centerview and Sullivan & Cromwell
– Process is ongoing; no decision has been made
Strategic alternatives may include
– 100% acquisition for cash or stock
– Partial acquisition by sponsor and preservation of public float
– Stand-alone operations / no sale
TERP is consulting with stockholders, TERP creditors, SUNE
and its stakeholders
Collaborative Sales Process to Maximize Stockholder Value
Exhibit 99.2
Appendix
Exhibit 99.2
18
Peter Blackmore Chairman and Interim CEO
Christopher Compton Independent Director
Hanif “Wally” Dahya Independent Director
Kerri L. Fox Independent Director
Edward “Ned” Hall Independent Director
Marc S. Rosenberg Independent Director
Jack Stark Independent Director
David Ringhofer Director
Gregory Scallen Director
David Springer Director
Board of Directors Position Background
Board of Directors – Expanded from 7 to 10 Members
Exhibit 99.2
19
Definitions: Adjusted Revenue, Adjusted EBITDA
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 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.
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. 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 estimated total year 2016 CAFD difference is immaterial.
Exhibit 99.2
20
Reg G: Reconciliation of Net Operating Revenue to Adjusted Revenue
(Midpoint of Range)
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.
$M, unless otherwise noted 2015 2016
Net Operating Revenue (Midpoint of Range) $470 $672
Unrealized loss (gain) on derivatives, net (a) 1 6
Amortization of favorable and unfavorable rate revenue contracts, net (b) 5 40
Other non-cash (c) (9) (15)
Adjusted Revenue - Midpoint of Range $467 $705
Exhibit 99.2
21
Reg G: Reconciliation of Net Loss to Adjusted EBITDA (Midpoint of
Range)
$M, unless otherwise noted
2015 2016
Net loss (Midpoint of Range) ($208) ($125)
Add (subtract):
Interest expense, net 168 281
Income tax benefit (13) 2
Depreciation, accretion and amortization expense (a) 167 286
General and administrative expenses - affiliate (b) 51 77
Stock-based compensation expense 13 5
Acquisition and related costs, including affiliate (c) 56 3
Loss on prepaid warranty and other investments (d) 61 -
Unrealized loss (gain) on derivatives, net (e) 1 6
Loss on extinguishment of debt, net 16 -
LAP settlement (f) 10 -
EMEC judgment reserve (g) 14 -
Facility-level non-controlling interest member transaction fees (h) 4 -
Loss (gain) on foreign currency exchange, net (i) 19 -
Other non-cash operating revenues (j) (9) (4)
Other non-operating expenses (income) (k) 8 (6)
Adjusted EBITDA - Midpoint of Range $358 $525
Exhibit 99.2
22
Footnotes to Reg. G: Reconciliation of Net Loss to Adjusted EBITDA
(Midpoint of Range)
a) Includes a $5.3 million reduction and $40.0 million forecasted reduction within operating revenues, due to net amortization of favorable and unfavorable rate
revenue contracts for the year ended December 31, 2015 and the year ended December 31,2016, respectively.
b) In conjunction with the closing of the IPO in July 2014, 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. Cash consideration of $4 million was paid to SunEdison for these services for
the year ended December 31, 2015, and 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-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.
c) Represents transaction related costs, including affiliate acquisition costs, associated with acquisitions.
d) In conjunction with the First Wind Acquisition, SunEdison committed to reimburse us for capital expenditures not to exceed $50.0 million through 2019 for certain
of our wind power plants in the form of a prepaid warranty that was capitalized as PP&E in purchase accounting. Through the year ended December 31, 2015, the
Company received contributions pursuant to this agreement of $2.7 million and recorded depreciation on the related asset of $1.9 million. As a result of the
SunEdison Bankruptcy, the Company recorded a loss of $45.4 million related to the write-off of this prepaid warranty agreement, which is no longer considered
collectible. In addition, during 2015, we made an investment in residential assets to be acquired from SunEdison. As a result of the SunEdison Bankruptcy, we do
not expect to receive these assets and have recognized an $11.3 million loss related to this investment. For the period ending December 31, 2015, we also
recorded a loss totaling $4.7 million related to other investments.
e) Represents the change in the fair value of commodity contracts not designated as hedges.
f) Pursuant to the Settlement Agreement, TERP made a one-time payment to LAP in the amount of $10.0 million in April 2016 in exchange for and contingent on the
termination of the Arbitration against TERP. The expense incurred as a result of the one-time payment was recorded to general and administrative expenses for
the year ended December 31, 2015.
g) Represents a reserve for loss related to the legal judgment awarded to the Eastern Maine Electric Cooperative against certain of our subsidiaries for breach of
contract over the proposed sale of a transmission line acquired from First Wind.
h) Represents professional fees for legal, tax, and accounting services related to entering into certain tax equity financing arrangements and are not deemed
representative of our core business operations.
i) We incurred a net loss of $19 million on foreign currency exchange for the year ended December 31, 2015, due primarily to unrealized gains/losses on the re-
measurement of intercompany loans which are primarily denominated in British pounds. The loss / (gain) on foreign currency exchange for the year ending
December 31,2016 is forecasted to be approximately $0 million.
j) Primarily represents deferred revenue recognized related to the upfront sale of investment tax credits to non-controlling interest members.
k) Represents certain other non-cash charges or non-operating items that we believe are not representative of our core business or future operating performance.
Exhibit 99.2
23
Exhibit 99.2
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