TerraForm Power Reports Second Quarter 2018 Results
Recent Highlights
- Settled our tender offer and minority interest squeeze out of
Saeta Yield S.A. (“Saeta”), increasing ownership to 100% - Executed an 11-year Framework Agreement with an affiliate of
General Electric Company (“GE”) to provide us with full-wrap, long-term service agreements (“LTSAs”) for turbine operations and maintenance as well as other balance of plant services for each project in our 1.6 GW North American wind fleet - Pursuant to a back-stop agreement with our sponsor
Brookfield Asset Management (“Brookfield”), issued$650 million in equity to fund the Saeta acquisition - Made progress executing the
~$350 million non-recourse debt component of our permanent financing plan for the Saeta acquisition, including closing the first project financing of certain of our unencumbered assets yielding net proceeds of~$83 million - Declared a Q3 2018 dividend of
$0.19 per share, implying$0.76 per share on an annual basis - Authorized an
~$111 million share repurchase program
“Following the completion of the Saeta acquisition, we have a clear path to meet our dividend growth targets of 5% to 8% per annum through 2022, while maintaining our payout ratio range of 80% to 85% of CAFD, driven primarily by margin improvements from our existing assets and accretion from the Saeta acquisition,” said
Results
$ in millions, except per share amounts | 3 Months Ended 6/30/2018 |
3 Months Ended 6/30/2017 |
||||
Generation (GWh) 1,2 | 1,912 | 1,955 | ||||
Net Loss | $(28) | $(2) | ||||
Earnings (Loss) per Share 3 | $ (0.13) | $0.08 | ||||
Adjusted EBITDA 2,3,4 | $128 | $117 | ||||
CAFD 2,3 4 | $30 | $25 | ||||
per Share 2,3,4,5 | $0.19 | $0.18 | ||||
1 Excludes Saeta’s results.
2 Adjusted for the sale of our
3 Includes Saeta’s results effective
4 Non-GAAP measures. See the “Reconciliation of Non-GAAP Measures” section for additional information. Amounts in 2017 adjusted for sale of our
5 Loss per share is calculated using a weighted average diluted Class A common stock shares outstanding. CAFD per share is calculated using a weighted average diluted Class A common stock and weighted average Class B common stock shares outstanding. For three months ended
Operations
In early August, we executed an 11-year Framework Agreement with an affiliate of GE to provide us with LTSAs for turbine operations and maintenance as well as other balance of plant services for our 1.6 GW North American wind fleet, subject to customary closing conditions and consents. The LTSAs will leverage GE’s proprietary technology to improve and optimize turbine performance in order to increase production from our wind fleet. The LTSAs include a combination of resource-adjusted production guarantees and availability guarantees for all of our turbines, which are designed to improve upon historical resource-adjusted production levels and are consistent with our long-term average generation targets, once fully implemented after a transition period of nine to twelve months. Furthermore, the LTSAs lock in cost savings at an amount that is consistent with achieving our targeted cost savings and is
We continue to make progress on our solar performance improvement plan, with a goal of increasing energy production to levels that are consistent with our long-term average generation target. As of now, we have completed infrared scans of most of our solar fleet to identify issues that are negatively impacting performance at the asset level and opportunities to increase production. Our goal is to implement remediation plans for all assets by the end of the first quarter of next year so that we can realize increased production in 2019.
As of July, we are pleased to report that we have relocated our employees to our headquarters in
Growth Initiatives
In our Corporate Profile, we identify approximately
During the second quarter, we progressed a number of these organic growth initiatives. We entered into a letter of intent to work exclusively with a local developer on an expansion of our existing
Saeta Integration
Following the settlement of our tender offer whereby we acquired 95% of Saeta, we closed on the minority squeeze-out on
Financial Results
During the second quarter, our portfolio performed slightly below expectations, delivering Adjusted EBITDA, Net Loss and CAFD of
In the second quarter, our North American wind generation was lower than expected, whereas production from our North American solar fleet was largely consistent with expectations. Wind production was impacted by greater than normal maintenance, including blade inspections and repairs as well as some residual impacts related to the
Balance Sheet
Following the closing of the Saeta acquisition, Moody’s upgraded our corporate credit rating from B1 to Ba3. To support its upgrade, Moody’s specifically cited the upsizing of the equity issuance to fund the Saeta acquisition to
In May, we repriced our
Announcement of Quarterly Dividend
Announcement of Share Repurchase Program
The Company today announced that its Board of Directors has authorized the repurchase of up to 5% of the Company’s Class A common stock outstanding as of
About
For more information about
Contacts for Investors / Media:
investors@terraform.com
Quarterly Earnings Call Details
Investors, analysts and other interested parties can access TerraForm Power’s 2018 Second Quarter Results as well as the Letter to Shareholders and Supplemental Information on TerraForm Power’s website at www.terraformpower.com.
The conference call can be accessed via webcast on
Safe Harbor Disclosure
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,” ”opportunities,” “goal,” “guidance,” “outlook,” “initiatives,” “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
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: risks related to the transition to
The Company 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 our most recent Annual Report on Form 10-K and any subsequent Quarterly Report on Form 10-Q, as well as additional factors we may describe from time to time in other filings with the
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Operating revenues, net | $ | 179,888 | $ | 170,367 | $ | 307,435 | $ | 321,502 | |||||||
Operating costs and expenses: | |||||||||||||||
Cost of operations | 49,805 | 32,205 | 87,128 | 66,543 | |||||||||||
Cost of operations - affiliate | — | 3,427 | — | 9,025 | |||||||||||
General and administrative expenses | 19,865 | 41,255 | 44,149 | 77,980 | |||||||||||
General and administrative expenses - affiliate | 4,023 | 3,282 | 7,497 | 4,701 | |||||||||||
Acquisition-related costs | 2,877 | — | 5,957 | — | |||||||||||
Acquisition-related costs - affiliate | 6,025 | — | 6,630 | — | |||||||||||
Impairment of renewable energy facilities | — | 1,429 | 15,240 | 1,429 | |||||||||||
Depreciation, accretion and amortization expense | 69,994 | 63,222 | 135,584 | 124,209 | |||||||||||
Total operating costs and expenses | 152,589 | 144,820 | 302,185 | 283,887 | |||||||||||
Operating income | 27,299 | 25,547 | 5,250 | 37,615 | |||||||||||
Other expenses (income): | |||||||||||||||
Interest expense, net | 50,892 | 68,205 | 104,446 | 136,517 | |||||||||||
Gain on sale of renewable energy facilities | — | (37,116 | ) | — | (37,116 | ) | |||||||||
Gain on foreign currency exchange, net | (2,078 | ) | (5,204 | ) | (1,187 | ) | (4,617 | ) | |||||||
Other expenses, net | 1,663 | 1,773 | 2,512 | 2,133 | |||||||||||
Total other expenses, net | 50,477 | 27,658 | 105,771 | 96,917 | |||||||||||
Loss before income tax expense (benefit) | (23,178 | ) | (2,111 | ) | (100,521 | ) | (59,302 | ) | |||||||
Income tax expense (benefit) | 4,434 | (588 | ) | 3,404 | (1,157 | ) | |||||||||
Net loss | (27,612 | ) | (1,523 | ) | (103,925 | ) | (58,145 | ) | |||||||
Less: Net income attributable to redeemable non-controlling interests | 4,680 | 6,362 | 2,658 | 5,369 | |||||||||||
Less: Net loss attributable to non-controlling interests | (10,955 | ) | (17,491 | ) | (168,042 | ) | (42,323 | ) | |||||||
Net (loss) income attributable to Class A common stockholders | $ | (21,337 | ) | $ | 9,606 | $ | 61,459 | $ | (21,191 | ) | |||||
Weighted average number of shares: | |||||||||||||||
Class A common stock - Basic | 161,568 | 92,257 | 154,890 | 92,165 | |||||||||||
Class A common stock - Diluted | 161,568 | 92,745 | 154,905 | 92,165 | |||||||||||
(Loss) earnings per share: | |||||||||||||||
Class A common stock - Basic and diluted | $ | (0. 13 | ) | $ | 0. 08 | $ | 0. 40 | $ | (0. 28 | ) | |||||
Dividends declared per share: | |||||||||||||||
Class A common stock | $ | 0. 19 | $ | — | $ | 0. 38 | $ | — | |||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
June 30, 2018 |
December 31, 2017 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 339,209 | $ | 128,087 | |||
Restricted cash | 38,823 | 54,006 | |||||
Accounts receivable, net | 161,017 | 89,680 | |||||
Prepaid expenses and other current assets | 71,958 | 65,393 | |||||
Due from affiliates | 1,533 | 4,370 | |||||
Total current assets | 612,540 | 341,536 | |||||
Renewable energy facilities, net, including consolidated variable interest entities of $3,196,816 and $3,273,848 in 2018 and 2017, respectively |
6,634,926 | 4,801,925 | |||||
Intangible assets, net, including consolidated variable interest entities of $797,844 and $823,629 in 2018 and 2017, respectively |
2,033,854 | 1,077,786 | |||||
Goodwill | 114,780 | — | |||||
Restricted cash | 138,053 | 42,694 | |||||
Other assets | 166,672 | 123,080 | |||||
Total assets | $ | 9,700,825 | $ | 6,387,021 | |||
Liabilities, Redeemable Non-controlling Interests and Stockholders' Equity | |||||||
Current liabilities: | |||||||
Current portion of long-term debt and financing lease obligations, including consolidated variable interest entities of $57,069 and $84,691 in 2018 and 2017, respectively |
$ | 458,177 | $ | 403,488 | |||
Accounts payable, accrued expenses and other current liabilities, including consolidated variable interest entities of $42,157 and $34,199 in 2018 and 2017, respectively |
217,134 | 88,538 | |||||
Deferred revenue | 1,735 | 17,859 | |||||
Due to affiliates | 9,205 | 3,968 | |||||
Total current liabilities | 686,251 | 513,853 | |||||
Long-term debt and financing lease obligations, less current portion, including consolidated variable interest entities of $923,565 and $833,388 in 2018 and 2017, respectively |
5,416,939 | 3,195,312 | |||||
Long-term debt - affiliate | 86,000 | — | |||||
Deferred revenue, less current portion | 12,780 | 38,074 | |||||
Deferred income taxes | 202,767 | 24,972 | |||||
Asset retirement obligations, including consolidated variable interest entities of $100,022 and $97,467 in 2018 and 2017, respectively |
170,892 | 154,515 | |||||
Other long-term liabilities | 151,949 | 37,923 | |||||
Total liabilities | 6,727,578 | 3,964,649 | |||||
Redeemable non-controlling interests | 86,549 | 34,660 | |||||
Stockholders' equity: | |||||||
Class A common stock, $0. 01 par value per share, 1,200,000,000 shares authorized, 209,562,056 and 148,586,447 shares issued in 2018 and 2017, respectively, and 209,061,636 and 148,086,027 shares outstanding in 2018 and 2017, respectively |
2,096 | 1,486 | |||||
Additional paid-in capital | 2,468,771 | 1,872,125 | |||||
Accumulated deficit | (301,167 | ) | (387,204 | ) | |||
Accumulated other comprehensive income | 37,400 | 48,018 | |||||
Treasury stock, 500,420 shares in 2018 and 2017 | (6,712 | ) | (6,712 | ) | |||
Total TerraForm Power, Inc. stockholders' equity | 2,200,388 | 1,527,713 | |||||
Non-controlling interests | 686,310 | 859,999 | |||||
Total stockholders' equity | 2,886,698 | 2,387,712 | |||||
Total liabilities, redeemable non-controlling interests and stockholders' equity | $ | 9,700,825 | $ | 6,387,021 | |||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (103,925 | ) | $ | (58,145 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Depreciation, accretion and amortization expense | 135,584 | 124,209 | |||||
Amortization of favorable and unfavorable rate revenue contracts, net | 19,567 | 19,524 | |||||
Gain on sale of renewable energy facilities | — | (37,116 | ) | ||||
Impairment of renewable energy facilities | 15,240 | 1,429 | |||||
Amortization of deferred financing costs and debt discounts | 4,258 | 10,013 | |||||
Unrealized (gain) loss on interest rate swaps | (8,777 | ) | 2,425 | ||||
Unrealized (gain) loss on commodity contract derivatives, net | (5,292 | ) | 2,652 | ||||
Recognition of deferred revenue | (929 | ) | (6,069 | ) | |||
Stock-based compensation expense | 73 | 5,200 | |||||
Loss on extinguishment of debt, net | 1,480 | — | |||||
Loss on disposal of property, plant and equipment | 6,764 | — | |||||
Unrealized (gain) on foreign currency exchange, net | (5,684 | ) | (4,336 | ) | |||
Deferred taxes | 3,006 | 4,885 | |||||
Other, net | 344 | 4,922 | |||||
Changes in assets and liabilities: | |||||||
Accounts receivable | (6,389 | ) | (30,436 | ) | |||
Prepaid expenses and other current assets | 18,321 | 212 | |||||
Accounts payable, accrued expenses and other current liabilities | (7,748 | ) | 11,442 | ||||
Due to affiliates | 2,308 | — | |||||
Other, net | 7,284 | 4,476 | |||||
Net cash provided by operating activities | 75,485 | 55,287 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (10,333 | ) | (5,068 | ) | |||
Proceeds from sale of renewable energy facilities, net of cash and restricted cash disposed | — | 177,235 | |||||
Proceeds from energy state rebate and reimbursable interconnection costs | 6,006 | 22,188 | |||||
Acquisition of Saeta business, net of cash and restricted cash acquired | (831,484 | ) | — | ||||
Acquisition of renewable energy facilities from third parties, net of cash and restricted cash acquired | (4,105 | ) | — | ||||
Net cash (used in) provided by investing activities | $ | (839,916 | ) | $ | 194,355 | ||
Cash flows from financing activities: | |||||||
Proceeds from issuance of Class A common stock to affiliates | 650,000 | — | |||||
Proceeds from Sponsor Line - affiliate | 86,000 | — | |||||
Revolving credit facility draws | 539,053 | — | |||||
Revolving credit facility repayments | (157,244 | ) | (55,000 | ) | |||
Term Loan principal payments | (1,750 | ) | — | ||||
Borrowings of non-recourse long-term debt | 103,639 | 79,835 | |||||
Principal payments and prepayments on non-recourse long-term debt | (102,257 | ) | (141,613 | ) | |||
Debt financing fees | (3,652 | ) | (3,735 | ) | |||
Contributions from non-controlling interests in renewable energy facilities | 7,685 | 6,935 | |||||
Distributions to non-controlling interests in renewable energy facilities | (12,507 | ) | (17,125 | ) | |||
Due to/from affiliates, net | 3,214 | (3,311 | ) | ||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Continued)
Net SunEdison investment | — | 7,436 | |||||
Payment of dividends | (56,016 | ) | — | ||||
Recovery of related party short swing profit | 2,994 | — | |||||
Other financing activities | — | (133 | ) | ||||
Net cash provided by (used in) financing activities | 1,059,159 | (126,711 | ) | ||||
Net increase in cash, cash equivalents and restricted cash | 294,728 | 122,931 | |||||
Net change in cash, cash equivalents and restricted cash classified within assets held for sale | — | 54,806 | |||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (3,430 | ) | 2,336 | ||||
Cash, cash equivalents and restricted cash at beginning of period | 224,787 | 682,837 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 516,085 | $ | 862,910 | |||
Supplemental Disclosures: | |||||||
Cash paid for interest | $ | 94,593 | $ | 121,694 | |||
Cash paid for income taxes | — | — | |||||
Reconciliation of Non-GAAP Measures
Adjusted Revenue, Adjusted EBITDA and CAFD are supplemental non-GAAP measures that should not be viewed as alternatives to GAAP measures of performance, including revenue, net income (loss), operating income or net cash provided by operating activities. Our definitions and calculation of these non-GAAP measures may not necessarily be the same as those used by other companies. These non-GAAP measures have certain limitations, which are described below, and they should not be considered in isolation. We encourage you to review, and evaluate the basis for, each of the adjustments made to arrive at Adjusted Revenue, Adjusted EBITDA and CAFD.
Calculation of Non-GAAP Measures
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 define Adjusted EBITDA as net income (loss) plus depreciation, accretion and amortization, non-cash general and administrative costs, interest expense, income tax (benefit) expense, acquisition related expenses, 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 operating performance, as described further below.
We define “cash available for distribution” or “CAFD” as Adjusted EBITDA (i) minus cash distributions paid to non-controlling interests in our renewable energy facilities, if any, (ii) minus annualized scheduled interest and project level amortization payments in accordance with the related borrowing arrangements, (iii) minus average annual sustaining capital expenditures (based on the long-sustaining capital expenditure plans) which are recurring in nature and used to maintain the reliability and efficiency of our power generating assets over our long-term investment horizon, (iv) plus or minus operating items as necessary to present the cash flows we deem representative of our core business operations.
As compared to the preceding period, we revised our definition of CAFD to (i) exclude adjustments related to deposits into and withdrawals from restricted cash accounts, required by project financing arrangements, (ii) replace sustaining capital expenditures payment made in the year with the average annualized long-term sustaining capital expenditures to maintain reliability and efficiency of our assets, and (iii) annualized debt service payments. We revised our definition as we believe it provides a more meaningful measure for investors to evaluate our financial and operating performance and ability to pay dividends. For items presented on an annualized basis, we will present actual cash payments as a proxy for an annualized number until the period commencing
Furthermore, to provide investors with the most appropriate measures to assess the financial and operating performance of our existing fleet and the ability to pay dividends in the future, we have excluded results associated with our
Use of Non-GAAP Measures
We disclose Adjusted Revenue because it presents the component of our operating revenue that relates to the energy production from our plants, and is, therefore, useful to investors and other stakeholders in evaluating the performance of our renewable energy assets and comparing that performance across periods in each case without regard to non-cash revenue items.
We disclose Adjusted EBITDA because we believe it is useful to investors and other stakeholders as a measure of financial and operating performance and debt service capabilities. We believe Adjusted EBITDA provides an additional tool to investors and securities analysts to compare our performance across periods and among us and our peer companies without regard to interest expense, taxes and depreciation and amortization. Adjusted EBITDA has certain limitations, including that it: (i) does not reflect cash expenditures or future requirements for capital expenditures or contractual liabilities or future working capital needs, (ii) does not reflect the significant interest expenses that we expect to incur or any income tax payments that we may incur, and (iii) does not reflect depreciation and amortization and, although these charges are non-cash, the assets to which they relate may need to be replaced in the future, and (iv) does not take into account any cash expenditures required to replace those assets. Adjusted EBITDA also includes adjustments for non-cash impairment charges, gains and losses on derivatives and foreign currency swaps, acquisition related costs and items we believe are infrequent, unusual or non-recurring, including adjustments for general and administrative expenses we have incurred as a result of the
We disclose CAFD because we believe cash available for distribution is useful to investors in evaluating our operating performance and because securities analysts and other stakeholders analyze CAFD as a measure of our financial and operating performance and our ability to pay dividends. CAFD is not a measure of liquidity or profitability, nor is it indicative of the funds needed by us to operate our business. CAFD has certain limitations, such as the fact that CAFD includes all of the adjustments and exclusions made to Adjusted EBITDA described above.
The adjustments made to Adjusted EBITDA and CAFD for infrequent, unusual or non-recurring items and items that we do not believe are representative of our core business involve the application of management judgment, and the presentation of Adjusted EBITDA and CAFD should not be construed to infer that our future results will be unaffected by infrequent, non-operating, unusual or non-recurring items.
In addition, these measures are used by our management for internal planning purposes, including for certain aspects of our consolidated operating budget, as well as evaluating the attractiveness of investments and acquisitions. We believe these Non-GAAP measures are useful as a planning tool because it allows our management to compare performance across periods on a consistent basis in order to more easily view and evaluate operating and performance trends and as a means of forecasting operating and financial performance and comparing actual performance to forecasted expectations. For these reasons, we also believe these Non-GAAP measures are also useful for communicating with investors and other stakeholders.
The following tables present a reconciliation of Operating Revenues to Adjusted Revenue and net loss to Adjusted EBITDA to CAFD and has been adjusted to exclude asset sales in the
Three Months Ended June 30 |
Six Months Ended June 30 |
||||||||||||
(in thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||
Adjustments to reconcile operating revenues, net to adjusted revenue | |||||||||||||
Operating revenues, net | $ | 179,888 | $ | 170,367 | $ | 307,435 | $ | 321,502 | |||||
Unrealized (gain) loss on commodity contract derivatives, net (a) | (7,439 | ) | 4,883 | (5,292 | ) | 2,652 | |||||||
Amortization of favorable and unfavorable rate revenue contracts, net (b) | 9,750 | 9,697 | 19,567 | 19,524 | |||||||||
Other non-cash items (c) | - | (1,683 | ) | (415 | ) | (5,116 | ) | ||||||
2017 incentive revenue recognition recast (m) | - | (8,601 | ) | - | (10,232 | ) | |||||||
Adjustment for Asset Sales | - | (8,158 | ) | - | (14,754 | ) | |||||||
Adjusted revenue | $ | 182,199 | $ | 166,505 | $ | 321,295 | $ | 313,576 | |||||
Direct operating costs (d) | (54,771 | ) | (50,174 | ) | (98,155 | ) | (95,867 | ) | |||||
Settled FX gain (loss) | 213 | 120 | 101 | 281 | |||||||||
Adjusted EBITDA | $ | 127,641 | $ | 116,451 | $ | 223,241 | $ | 217,990 | |||||
Non-operating general and administrative expenses (e) | (14,490 | ) | (28,387 | ) | (32,556 | ) | (53,761 | ) | |||||
Stock-based compensation expense | (73 | ) | (2,690 | ) | - | (5,200 | ) | ||||||
Acquisition and related costs | (8,902 | ) | - | (12,587 | ) | - | |||||||
Depreciation, accretion and amortization expense (f) | (79,745 | ) | (72,919 | ) | (155,151 | ) | (143,733 | ) | |||||
Impairment charges | - | (1,429 | ) | (15,240 | ) | (1,429 | ) | ||||||
Gain on sale of U. K. renewable energy facilities | - | 37,116 | - | 37,116 | |||||||||
Interest expense, net | (50,892 | ) | (68,205 | ) | (104,446 | ) | (136,517 | ) | |||||
Income tax benefit | (4,434 | ) | 588 | (3,404 | ) | 1,157 | |||||||
Adjustment for asset sales | - | 6,508 | - | 9,655 | |||||||||
Other non-cash or non-operating items (g) | 3,283’ | 11,444 | (3,782 | ) | 16,577 | ||||||||
Net loss | ($ | 27,612 | ) | ($ | 1,523 | ) | ($ | 103,925 | ) | ($ | 58,145 | ) | |
(in thousands) | Three Months Ended June 30 |
Six Months Ended June 30 |
|||||||||||
Reconciliation of adjusted EBITDA to CAFD | 2018 | 2017 | 2018 | 2017 | |||||||||
Adjusted EBITDA | $ | 127,641 | $ | 116,451 | $ | 223,241 | $ | 217,990 | |||||
Fixed management fee | (2,500 | ) | - | (5,000 | ) | - | |||||||
Variable management fee | (1,153 | ) | - | (1,940 | ) | - | |||||||
Adjusted interest expense (h) | (56,607 | ) | (60,880 | ) | (106,114 | ) | (120,871 | ) | |||||
Levelized principal payments (i) | (30,869 | ) | (24,810 | ) | (55,218 | ) | (49,620 | ) | |||||
Cash distributions to non-controlling interests (j) | (6,721 | ) | (7,432 | ) | (11,458 | ) | (17,125 | ) | |||||
Sustaining capital expenditures (k) | (1,954 | ) | (315 | ) | (3,804 | ) | (559 | ) | |||||
Adjustment for asset sales | - | 21 | - | (113 | ) | ||||||||
Other (l) | 2,363 | 1,869 | 13,085 | 12,803 | |||||||||
Cash available for distribution (CAFD) (m) | $ | 30,200 | $ | 24,904 | $ | 52,792 | $ | 42,505 | |||||
a) Represents unrealized (gain) loss on commodity contracts associated with energy derivative contracts that are accounted for at fair value with the changes recorded in operating revenues, net. The amounts added back represent changes in the value of the energy derivative related to future operating periods, and are expected to have little or no net economic impact since the change in value is expected to be largely offset by changes in value of the underlying energy sale in the spot or day-ahead market.
b) Represents net amortization of purchase accounting related to intangibles arising from past business combinations related to favorable and unfavorable rate revenue contracts.
c) Primarily represents recognized deferred revenue related to the upfront sale of investment tax credits.
d) In the three months ended
e) Pursuant to the Management Services Agreement,
Q2 2018 | Q2 2017 | H1 2018 | H1 2017 |
$7 M | $7 M | $14 M | $17 M |
f) Includes reductions (increases) within operating revenues due to net amortization of favorable and unfavorable rate revenue contracts as detailed in the reconciliation of Adjusted Revenue.
g) Represents other non-cash items as detailed in the reconciliation of Adjusted Revenue and associated footnote and certain other items that we believe are not representative of our core business or future operating performance, including but not limited to: loss (gain) on foreign exchange (“FX”), unrealized loss on commodity contracts, loss on investments and receivables with affiliate, loss on disposal of renewable energy facilities, and wind sustaining capital expenditure previously reclassified.
h) Represents project-level and other interest expense and interest income attributed to normal operations. The reconciliation from Interest expense, net as shown on the Unaudited Condensed Consolidated Statement of Operations to adjusted interest expense applicable to CAFD is as follows:
$ in millions | Q2 2018 | Q2 2017 | H1 2018 | H1 2017 | ||||||||
Interest expense, net | ($51) | ($68) | ($104) | ($137) | ||||||||
Amortization of deferred financing costs and debt discounts | 1 | 5 | 4 | 10 | ||||||||
Amortization of interest expense - Affiliate | 1 | - | 1 | - | ||||||||
Adjustment for asset sales | - | 4 | - | 8 | ||||||||
Fair value changes in interest rate swaps in Saeta | (8) | - | (8) | - | ||||||||
Other | 1 | (2) | 1 | (2) | ||||||||
Adjusted interest expense | ($56) | ($61) | ($106) | ($121) |
i) Represents levelized project-level and other principal debt payments to the extent paid from operating cash.
j) Represents cash distributions paid to non-controlling interests in our renewable energy facilities. The reconciliation from Distributions to non-controlling interests as shown on the Unaudited Condensed Consolidated Statement of Cash Flows to Cash distributions to non-controlling interests, net for the three months ended
$ in millions | Q2 2018 | Q2 2017 | H1 2018 | H1 2017 | ||||||||
Distributions to non-controlling interests | ($7) | ($7) | ($13) | ($17) | ||||||||
Adjustment for non-operating cash distributions | - | - | 1 | - | ||||||||
Cash distributions to non-controlling interests, net | ($7) | ($7) | ($11) | ($17) |
k) Represents long-term average sustaining capex starting in 2018 to maintain reliability and efficiency of the assets.
l) Represents other cash flows as determined by management to be representative of normal operations including, but not limited to, wind plant “pay as you go” contributions received from tax equity partners, interconnection upgrade reimbursements, major maintenance reserve releases or (additions), and releases or (postings) of collateral held by counterparties of energy market hedges for certain wind plants.
m) CAFD in 2017 was recast as follows to present the levelized principal payments, adjusted interest expense, and incentive revenue recognition recast to provide period to period comparisons that are consistent and more easily understood. The 2017 incentive revenue was recast based on an estimate in the same proportions as the 2018 phasing, which differs from the actual 2017 phasing due to the adoption of the revenue recognition standard. In the twelve months ended
$ in millions | Q1 2017 | Q2 2017 | Q3 2017 | Q4 2017 | 2017 | ||||||||||
Cash available for distribution (CAFD) before debt service reported | $104 | $120 | $106 | $91 | $421 | ||||||||||
Levelized principal payments | (25) | (25) | (25) | (24) | (99) | ||||||||||
Adjusted interest expense | (60) | (61) | (63) | (50) | (234) | ||||||||||
Incentive revenue recognition recast | (1) | (9) | 1 | 9 | - | ||||||||||
Cash available for distribution (CAFD), recast | $18 | $25 | $19 | $26 | $88 |