TerraForm Power Reports 1Q 2016 Financial Results and Files Form 10-Q
“In addition to TerraForm Power’s 2015 financial results released yesterday, the reporting of our first quarter 2016 results further demonstrates progress toward regaining regulatory compliance. We plan to complete the remaining 2016 filings and regain full compliance by
1Q 2016 Results: Key Metrics
1Q 2016 | 1Q 2015 | % change YoY | |||||||
MW (net) in operation at end of period | 2,977 | 1,675 | 78 | % | |||||
Capacity Factor | 30.9 | % | 20.8 | % | +1,010 bps | ||||
MWh (000s) | 2,072 | 602 | 244 | % | |||||
Adj. Revenue / MWh | $ | 78 | $ | 124 | -37 | % | |||
Revenue, net ($M) | $ | 154 | $ | 71 | 118 | % | |||
Adj. Revenue ($M) | $ | 162 | $ | 75 | 116 | % | |||
Net Income / (Loss) ($M) | $ | (34 | ) | $ | (84 | ) | - | ||
Adj. EBITDA ($M) | $ | 120 | $ | 52 | 130 | % | |||
Adj. EBITDA margin | 74.5 | % | 69.8 | % | +460 bps | ||||
Cash flows from operations ($M) | $ | 35 | $ | (11 | ) | - | |||
Unrestricted Cash ($M) at end of period | $ | 603 | $ | 153 | 293 | % |
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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,” “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
By their nature, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Factors that might cause such differences include, but are not limited to, risks related to the SunEdison Bankruptcy, including our transition away from reliance on
Adjusted Revenue
Adjusted Revenue is a supplemental non-GAAP measure used by our management for internal planning purposes, including for certain aspects of our consolidating operating budget. 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 EBITDA
Adjusted EBITDA is a supplemental non-GAAP financial measure which eliminates the impact on net income of certain unusual or non-recurring items and other factors that we do not consider representative of our core business or future operating performance. This measurement is not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance, including net income. The presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by non-operating, unusual or non-recurring items.
TERRAFORM POWER, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) |
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Three Months Ended March 31, |
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2016 | 2015 | ||||||
Operating revenues, net | $ | 153,917 | $ | 70,515 | |||
Operating costs and expenses: | |||||||
Cost of operations | 30,196 | 16,820 | |||||
Cost of operations - affiliate | 6,846 | 3,643 | |||||
General and administrative expenses | 17,183 | 9,939 | |||||
General and administrative expenses - affiliate | 5,437 | 6,027 | |||||
Acquisition and related costs | 2,743 | 13,722 | |||||
Acquisition and related costs - affiliate | — | 436 | |||||
Depreciation, accretion and amortization expense | 59,007 | 31,891 | |||||
Total operating costs and expenses | 121,412 | 82,478 | |||||
Operating income (loss) | 32,505 | (11,963 | ) | ||||
Other expenses: | |||||||
Interest expense, net | 68,994 | 36,855 | |||||
Loss on extinguishment of debt, net | — | 20,038 | |||||
(Gain) loss on foreign currency exchange, net | (4,493 | ) | 14,369 | ||||
Loss on receivables - affiliate | 845 | — | |||||
Other expenses, net | 567 | 480 | |||||
Total other expenses, net | 65,913 | 71,742 | |||||
Loss before income tax expense (benefit) | (33,408 | ) | (83,705 | ) | |||
Income tax expense (benefit) | 97 | (45 | ) | ||||
Net loss | (33,505 | ) | (83,660 | ) | |||
Less: Net income (loss) attributable to redeemable non-controlling interests | 2,545 | (169 | ) | ||||
Less: Net loss attributable to non-controlling interests | (35,569 | ) | (55,375 | ) | |||
Net loss attributable to Class A common stockholders | $ | (481 | ) | $ | (28,116 | ) | |
Weighted average number of shares: | |||||||
Class A common stock - Basic and diluted | 87,833 | 49,694 | |||||
Loss per share: | |||||||
Class A common stock - Basic and diluted | $ | (0.01 | ) | $ | (0.57 | ) |
TERRAFORM POWER, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) |
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Assets | March 31, 2016 |
December 31, 2015 |
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Current assets: | |||||||
Cash and cash equivalents | $ | 603,461 | $ | 626,595 | |||
Restricted cash | 117,366 | 152,586 | |||||
Accounts receivable | 111,312 | 103,811 | |||||
Prepaid expenses and other current assets | 59,221 | 53,769 | |||||
Assets held for sale | 55,725 | — | |||||
Total current assets | 947,085 | 936,761 | |||||
Renewable energy facilities, net | 5,208,372 | 5,834,234 | |||||
Intangible assets, net | 1,237,190 | 1,246,164 | |||||
Goodwill | 55,874 | 55,874 | |||||
Deferred financing costs, net | 9,595 | 10,181 | |||||
Other assets | 104,162 | 120,343 | |||||
Restricted cash | 20,071 | 13,852 | |||||
Non-current assets held for sale | 617,204 | — | |||||
Total assets | $ | 8,199,553 | $ | 8,217,409 | |||
LIABILITIES, NON-CONTROLLING INTERESTS AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Current portion of long-term debt and financing lease obligations | $ | 1,575,383 | $ | 2,037,919 | |||
Accounts payable, accrued expenses and other current liabilities | 165,257 | 153,046 | |||||
Deferred revenue | 18,081 | 15,460 | |||||
Due to SunEdison, net | 28,695 | 26,598 | |||||
Liabilities related to assets held for sale | 451,262 | — | |||||
Total current liabilities | 2,238,678 | 2,233,023 | |||||
Long-term debt and financing lease obligations, less current portion | 2,531,470 | 2,524,730 | |||||
Deferred revenue less current portion | 64,913 | 70,492 | |||||
Deferred income taxes | 26,692 | 26,630 | |||||
Asset retirement obligations | 177,199 | 215,146 | |||||
Other long-term liabilities | 29,921 | 31,408 | |||||
Non-current liabilities related to assets held for sale | 44,563 | — | |||||
Total liabilities | 5,113,436 | 5,101,429 | |||||
Redeemable non-controlling interests | 177,744 | 175,711 | |||||
Stockholders' equity: | |||||||
Class A common stock | 909 | 784 | |||||
Class B common stock | 482 | 604 | |||||
Additional paid-in capital | 1,459,923 | 1,267,484 | |||||
Accumulated deficit | (105,074 | ) | (104,593 | ) | |||
Accumulated other comprehensive income (loss) | 6,186 | 22,900 | |||||
Treasury stock | (2,620 | ) | (2,436 | ) | |||
Total TerraForm Power, Inc. stockholders' equity | 1,359,806 | 1,184,743 | |||||
Non-controlling interests | 1,548,567 | 1,755,526 | |||||
Total non-controlling interests and stockholders' equity | 2,908,373 | 2,940,269 | |||||
Total liabilities, non-controlling interests and stockholders' equity | $ | 8,199,553 | $ | 8,217,409 |
TERRAFORM POWER, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) |
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Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (33,505 | ) | $ | (83,660 | ) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
Stock-based compensation expense | 1,023 | 5,144 | |||||
Depreciation, accretion and amortization expense | 59,007 | 31,891 | |||||
Amortization of favorable and unfavorable rate revenue contracts, net | 10,503 | (336 | ) | ||||
Amortization of deferred financing costs and debt discounts | 8,754 | 7,709 | |||||
Recognition of deferred revenue | (2,322 | ) | (73 | ) | |||
Loss on extinguishment of debt, net | — | 20,038 | |||||
Unrealized (gain) loss on derivatives, net | (352 | ) | 4,302 | ||||
Unrealized (gain) loss on foreign currency exchange, net | (3,166 | ) | 14,369 | ||||
Loss on receivables - affiliate | 845 | — | |||||
Deferred taxes | 62 | — | |||||
Other, net | 552 | 551 | |||||
Changes in assets and liabilities: | |||||||
Accounts receivable | (14,495 | ) | (20,985 | ) | |||
Prepaid expenses and other current assets | (2,552 | ) | 4,420 | ||||
Accounts payable, accrued expenses and other current liabilities | 7,366 | 417 | |||||
Deferred revenue | (636 | ) | 6,658 | ||||
Due to SunEdison, net | — | (390 | ) | ||||
Restricted cash from operating activities | — | (664 | ) | ||||
Other, net | 4,190 | — | |||||
Net cash provided by (used in) operating activities | 35,274 | (10,609 | ) | ||||
Cash flows from investing activities: | |||||||
Cash paid to third parties for renewable energy facility construction | (31,711 | ) | (182,365 | ) | |||
Other investments | — | (10,000 | ) | ||||
Acquisitions of renewable energy facilities from third parties, net of cash acquired | (4,064 | ) | (997,968 | ) | |||
Due to SunEdison, net | — | (15,079 | ) | ||||
Change in restricted cash | 5,638 | (2,050 | ) | ||||
Net cash used in investing activities | $ | (30,137 | ) | $ | (1,207,462 | ) |
TERRAFORM POWER, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (CONTINUED) |
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Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Cash flows from financing activities: | |||||||
Proceeds from issuance of Class A common stock | $ | — | $ | 342,192 | |||
Proceeds from Senior Notes due 2023 | — | 793,712 | |||||
Repayment of term loan | — | (573,500 | ) | ||||
Borrowings of non-recourse long-term debt | — | 336,438 | |||||
Principal payments on non-recourse long-term debt | (29,712 | ) | (15,894 | ) | |||
Due to SunEdison, net | (11,614 | ) | 93,516 | ||||
Contributions from non-controlling interests | 15,612 | 10,497 | |||||
Distributions to non-controlling interests | (6,172 | ) | (12,884 | ) | |||
Repurchase of non-controlling interest | — | (54,694 | ) | ||||
Distributions to SunEdison | — | (16,659 | ) | ||||
Net SunEdison investment | 29,747 | 53,020 | |||||
Payment of dividends | — | (15,125 | ) | ||||
Debt prepayment premium | — | (6,429 | ) | ||||
Debt financing fees | (4,500 | ) | (30,667 | ) | |||
Net cash (used in) provided by financing activities | (6,639 | ) | 903,523 | ||||
Net decrease in cash and cash equivalents | (1,502 | ) | (314,548 | ) | |||
Reclassification of cash and cash equivalents to assets held for sale | (21,697 | ) | — | ||||
Effect of exchange rate changes on cash and cash equivalents | 65 | (583 | ) | ||||
Cash and cash equivalents at beginning of period | 626,595 | 468,554 | |||||
Cash and cash equivalents at end of period | $ | 603,461 | $ | 153,423 |
Appendix Table A-1: Reg. G:
Reconciliation of Net Income (Loss) 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.
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, non-operating 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.
The following table presents a reconciliation of net loss to Adjusted EBITDA:
Three Months Ended March 31, | |||||||
(In thousands) | 2016 | 2015 | |||||
Net loss | $ | (33,505 | ) | $ | (83,660 | ) | |
Interest expense, net | 68,994 | 36,855 | |||||
Income tax benefit | 97 | (45 | ) | ||||
Depreciation, accretion and amortization expense (a) | 69,510 | 31,555 | |||||
General and administrative expenses - affiliate (b) | 15,997 | 6,850 | |||||
Stock-based compensation expense | 1,023 | 5,144 | |||||
Acquisition and related costs, including affiliate (c) | 2,743 | 14,158 | |||||
Unrealized loss on derivatives, net (d) | (352 | ) | 4,302 | ||||
Loss (gain) on extinguishment of debt, net (e) | – | 20,038 | |||||
Facility-level non-controlling interest member transaction fees (f) | – | 2,753 | |||||
Loss (gain) on foreign currency exchange, net (g) | (3,166 | ) | 14,369 | ||||
Other non-cash operating revenues (h) | (2,322 | ) | – | ||||
Loss on receivables – affiliate (i) | 845 | ||||||
Other non-operating expenses (j) | 567 | – | |||||
Adjusted EBITDA | $ | 120,431 | $ | 52,319 |
a) Includes an
b) In conjunction with the closing of the IPO in
c) Represents transaction related costs, including affiliate acquisition costs, associated with the acquisitions completed during the three months ended
d) Represents the change in the fair value of commodity contracts not designated as hedges.
e) We recognized a net loss on extinguishment of debt of
f) 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.
g) We incurred a net gain of
h) Primarily represents deferred revenue recognized related to the upfront sale of investment tax credits to non-controlling interest members.
i) Represents a bad debt reserve recorded during the period related to outstanding receivables from debtors in the
j) Represents certain other non-cash charges or unusual or non-recurring items that we believe are not representative of our core business or future operating performance.
Appendix Table A-2: Reg. G:
Reconciliation of Operating Revenues to Adjusted Revenue
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 revenue contracts 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 consolidating operating budget.
The following table presents a reconciliation of Operating revenues, net to Adjusted Revenue:
Three Months Ended March 31, | |||||||
(In thousands) | 2016 | 2015 | |||||
Adjustments to reconcile Operating revenues, net to adjusted revenue | |||||||
Operating revenues, net | $ | 153,917 | $ | 70,515 | |||
Unrealized gain on derivatives, net (a) | (352 | ) | 4,302 | ||||
Amortization of favorable and unfavorable rate revenue contracts, net (b) | 10,503 | (336 | ) | ||||
Other non-cash (c) | (2,322 | ) | 421 | ||||
Adjusted revenue | $ | 161,746 | $ | 74,902 |
(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 for the three months ended March 31, 2016 related to the upfront sale of investment tax credits to non-controlling interest members.
Investors:Brett Prior TerraForm Power investors@terraform.com Media:Meaghan Repko /Joseph Sala /Nicholas Leasure Joele Frank , Wilkinson Brimmer Katcher media@terraform.com (212) 355-4449