TerraForm Power, Inc. Reports 2014 Second Quarter Financial Results, Raises 2015 CAFD Guidance
Highlights:
-
Successful initial public offering ("IPO") on
July 23 , raising$599 million , including$65 million from private placements -
Strong post-IPO liquidity of
$515 million as ofJuly 31 available to support growth -
SunEdison pipeline and backlog increased from 3.6 GW in 1Q 2014 to 4.3 GW in 2Q 2014 - 50 MW of Call Right projects accelerated from 2015 to 4Q 2014
- Robust funnel of third party acquisition opportunities
-
Raising 2015 CAFD guidance from
$122 million to $127 million
"Following our successful IPO in July,
Initial Public Offering
On
For the second quarter of 2014, TerraForm reported Adjusted EBITDA of approximately
CAFD Outlook
Since the IPO,
As set forth in the Company's prospectus relating to its IPO,
Based on the improved execution described above,
This guidance does not include the impact of additional project drop downs from
Conference Call
As previously announced,
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Conference ID: 93264465
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This news release should be read in conjunction with the attached unaudited financial information.
About
Safe Harbor Disclosure
This release 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. Such forward-looking statements are subject to certain risks, uncertainties and assumptions, including with respect to expected Adjusted EBITDA, cash available for distribution, earnings, future growth and financial performance, and typically can be identified by the use of words such as "expect," "estimate," "anticipate," "forecast," "intend," "project," "target," "plan," "believe" and similar terms and expressions. Forward-looking statements are based on current expectations and assumptions. Although
Appendix Table A-1: Reg. G: TerraForm Power, Inc. | |
2015 Guidance for IPO Portfolio: Estimated Cash Available for Distribution | |
IPO Portfolio | |
(In thousands) | Year Ending December 31, 2015 |
Operating Revenues | $ 234,700 |
Operating Costs and Expenses: | |
Costs of operations | 36,500 |
Depreciation, amortization and accretion | 76,500 |
General and administration (1) | 11,900 |
Total operating costs and expenses | 124,900 |
Operating income | 109,800 |
Interest expense, net | 73,100 |
Income before income tax expense | 36,700 |
Income tax expense | 14,300 |
Net income | $ 22,400 |
Add: | |
Depreciation, amortization and accretion | 76,500 |
Interest expense, net | 73,100 |
Income tax expense | 14,300 |
Stock base compensation | 6,500 |
Adjusted EBITDA (2) | $ 192,800 |
Adjustments to reconcile net income to net cash provided by operating activities | |
Net income | $ 22,400 |
Depreciation, amortization and accretion | 76,500 |
Non-cash items | 22,900 |
Changes in assets and liabilities | 6,300 |
Other | (600) |
Net cash provided by operating activities | $ 127,500 |
Adjustments to reconcile net cash provided by operating activities to cash available for distribution: | |
Net cash provided by operating activities | $ 127,500 |
Changes in assets and liabilities | (6,300) |
Deposits into/withdraws from restricted cash accounts | 6,100 |
Cash distributions to non-controlling interests | (6,400) |
Scheduled project-level and other debt service and repayments | (30,800) |
Non-expansionary capital expenditures | (400) |
Contributions received pursuant to the Interest Payment Agreement with SunEdison (3) | 15,600 |
Other | 2,000 |
Estimated cash available for distribution | $ 107,300 |
(1) Reflects all costs of doing business associated with the initial portfolio, including all expenses paid by SunEdison in excess of the payments received under the Management Services Agreement, and stock compensation expense. | |
(2) Adjusted EBITDA and cash available for distribution are non-GAAP measures. You should not consider these measures as alternatives to net income (loss), determined in accordance with GAAP, or net cash provided by operating activities, determined in accordance with GAAP. | |
(3) Represents contributions received from SunEdison pursuant to the Interest Payment Agreement. These contributions are recurring for three years beginning with the origination of the Term Loan. |
Appendix Table A-2: Reg. G:
Reconciliation of Q2 2014 Net Income to Adjusted EBITDA
Adjusted EBITDA
We believe Adjusted EBITDA 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 and debt service capabilities. In addition, Adjusted EBITDA is used by our management for internal planning purposes, including for certain aspects of our consolidated operating budget.
The following table presents a reconciliation of net (loss) income to Adjusted EBITDA:
Three Months Ended | |
(In thousands) | June 30, 2014 |
Net (loss) income | $ (12,438) |
Interest expense, net (a) | 24,171 |
Income tax expense (benefit) | (5,318) |
Depreciation, amortization and accretion | 5,657 |
General and administrative - affiliate (b) | 2,142 |
Acquisition costs (c) | 1,235 |
Formation and offering related fees and expenses (d) | 2,863 |
Loss on extinguishment of debt (e) | 1,945 |
Adjusted EBITDA | $ 20,257 |
(a) Subsequent to the closing of the IPO SunEdison will pay all our scheduled interest on our term loan up to $48 million through the third anniversary of our entering into the Term Loan under an interest payment agreement. | |
(b) Represents the non-cash allocation of SunEdison's corporate overhead. In conjunction with the closing of the IPO on July 23, we entered into the MSA with SunEdison, pursuant to which SunEdison will provide or arrange for other service providers to provide management and administrative services to us. There will be no cash payments to SunEdison for these services during 2014, and in subsequent years, the cash fees payable to SunEdison will be capped at $4.0 million in 2015, $7.0 million in 2016 and $9.0 million in 2017. The amount of general and administrative expenses in excess of the fees paid to SunEdison in each year will be treated as an addback in the reconciliation of net income (loss) to Adjusted EBITDA. | |
(c) Represents transaction related costs associated with the acquisitions completed during the three and six month period ended June 30, 2014. There were no such costs during the same periods in the prior year. | |
(d) Represents non-recurring professional fees for legal, tax and accounting services incurred as a result of the IPO. | |
(e) TerraForm Power, LLC ("Terra LLC") incurred a loss on extinguishment of debt of $1.9 million for the six months ended June 30, 2014 due to the termination of our capital lease obligations upon acquiring the lessor interest in the Alamosa project solar generation assets. |
Appendix Table A-3: Reg. G:
Reconciliation of Q2 2014 Cash flows from operating activities to CAFD
Cash Available for Distribution
We believe cash available for distribution 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. In addition, cash available for distribution is used by our management team for internal planning purposes.
The following table presents a reconciliation of cash flows from operating activities to CAFD:
Three Months Ended | |
(In thousands) | June 30, 2014 |
Adjustments to reconcile net cash provided by operating activities to cash available for distribution: | |
Net cash provided by operating activities | $ 33,787 |
Changes in assets and liabilities | (33,367) |
Deposits into/withdraws from restricted cash accounts | 4,157 |
Scheduled project-level and other debt service and repayments | (3,864) |
Other: | |
Bridge loan interest | 5,638 |
Formation and offering related fees and expenses | 2,863 |
Acquisition costs | 1,235 |
Non-cash allocation of SunEdison corporate overhead | 2,142 |
Other | (1,174) |
Estimated cash available for distribution | $ 11,417 |
We define "cash available for distribution" or "CAFD" as net cash provided by operating activities of
CONTACT: Media Inquiries:Virginia Amador vamador@terraform.com (240) 472-1326 Investors / Analysts:Brett Prior bprior@terraform.com (650) 889-8628