TerraForm Power Reports 2015 Financial Results and Files Form 10-K
“We are pleased to take this important step toward regaining regulatory compliance,” said
Strategic Alternatives
As announced on
4Q 2015 and FY 2015 Results: Key Metrics
4Q 2015 | 4Q 2014 | % change YoY |
2015 | 2014 | % change YoY |
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MW (net) in operation at end of period | 2,931 | 928 | 216 | % | 2,931 | 928 | 216 | % | |||||||||||
Capacity Factor | 22.9 | % | 14.3 | % | 860 bps | 22.3 | % | 16.5 | % | 580 bps | |||||||||
MWh (000s) | 1,069 | 266 | 302 | % | 3,462 | 722 | 379 | % | |||||||||||
Adj. Revenue / MWh | $ | 100 | $ | 162 | -38 | % | $ | 135 | $ | 181 | -25 | % | |||||||
Revenue, net ($M) | $ | 106 | $ | 43 | 147 | % | $ | 470 | $ | 127 | 269 | % | |||||||
Adj. Revenue ($M) | $ | 107 | $ | 43 | 149 | % | $ | 467 | $ | 131 | 257 | % | |||||||
Net Income / (Loss) ($M) | ($ | 156 | ) | ($ | 63 | ) | - | ($ | 208 | ) | ($ | 82 | ) | - | |||||
Adj. EBITDA ($M) | $ | 72 | $ | 34 | 110 | % | $ | 358 | $ | 109 | 229 | % | |||||||
Adj. EBITDA margin | 67.1 | % | 79.6 | % | (1,240) bps | 76.6 | % | 83.4 | % | (670) bps | |||||||||
Unrestricted Cash ($M) at end of period | $ | 627 | $ | 469 | 34 | % | $ | 627 | $ | 469 | 34 | % |
As previously disclosed in the Company’s current reports on Form 8-K and described more fully in the Form 10-K for 2015, as of
Investor Conference Call
We will host an investor conference call and webcast to discuss our 4Q 2015 and FY 2015 results.
Date: | Thursday, December 15 |
Time: | 4:30 pm ET |
US Toll-Free #: | 1 (844) 464-3938 |
International #: | 1 (765) 507-2638 |
Code: | 52830395 |
Webcast: | http://edge.media-server.com/m/p/8d4k4zv8 |
The webcast will also be available on
About
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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Year Ended December 31, | |||||||
2015 | 2014 | ||||||
Operating revenues, net | $ | 469,506 | $ | 127,156 | |||
Operating costs and expenses: | |||||||
Cost of operations | 70,468 | 10,630 | |||||
Cost of operations - affiliate | 19,915 | 8,063 | |||||
General and administrative expenses | 55,811 | 20,984 | |||||
General and administrative expenses - affiliate | 55,330 | 19,144 | |||||
Acquisition and related costs | 49,932 | 10,177 | |||||
Acquisition and related costs - affiliate | 5,846 | 5,049 | |||||
Loss on prepaid warranty - affiliate | 45,380 | — | |||||
Depreciation, accretion and amortization expense | 161,310 | 41,280 | |||||
Formation and offering related fees and expenses | — | 3,570 | |||||
Formation and offering related fees and expenses - affiliate | — | 1,870 | |||||
Total operating costs and expenses | 463,992 | 120,767 | |||||
Operating income | 5,514 | 6,389 | |||||
Other expenses: | |||||||
Interest expense, net | 167,805 | 86,191 | |||||
Loss (gain) on extinguishment of debt, net | 16,156 | (7,635 | ) | ||||
Loss on foreign currency exchange, net | 19,488 | 14,007 | |||||
Loss on investments and receivables - affiliate | 16,079 | — | |||||
Other expenses, net | 7,362 | 438 | |||||
Total other expenses, net | 226,890 | 93,001 | |||||
Loss before income tax benefit | (221,376 | ) | (86,612 | ) | |||
Income tax benefit | (13,241 | ) | (4,689 | ) | |||
Net loss | (208,135 | ) | (81,923 | ) | |||
Less: Pre-acquisition net income (loss) of renewable energy facilities acquired from SunEdison | 1,610 | (1,498 | ) | ||||
Less: Predecessor loss prior to the IPO on July 23, 2014 | — | (10,357 | ) | ||||
Net loss subsequent to IPO and excluding pre-acquisition net income (loss) of renewable energy facilities acquired from SunEdison | (209,745 | ) | (70,068 | ) | |||
Less: Net (loss) income attributable to redeemable non-controlling interests | 8,512 | — | |||||
Less: Net loss attributable to non-controlling interests | (138,371 | ) | (44,451 | ) | |||
Net loss attributable to Class A common stockholders | $ | (79,886 | ) | $ | (25,617 | ) | |
Weighted average number of shares: | |||||||
Class A common stock - Basic and diluted | 65,883 | 29,602 | |||||
Loss per share: | |||||||
Class A common stock - Basic and diluted | $ | (1.25 | ) | $ | (0.87 | ) |
TERRAFORM POWER, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) |
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Assets | December 31, 2015 |
December 31, 2014 |
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Current assets: | |||||||
Cash and cash equivalents | $ | 626,595 | $ | 468,554 | |||
Restricted cash | 152,586 | 70,545 | |||||
Accounts receivable, net | 103,811 | 32,036 | |||||
Deferred financing costs, net | 17,606 | — | |||||
Prepaid expenses and other current assets | 53,769 | 22,637 | |||||
Total current assets | 954,367 | 593,772 | |||||
Renewable energy facilities, net | 5,802,380 | 2,648,212 | |||||
Intangible assets, net | 1,246,164 | 361,673 | |||||
Goodwill | 55,874 | — | |||||
Deferred financing costs, net | 35,626 | 42,741 | |||||
Deferred income taxes | — | 4,606 | |||||
Restricted cash | 13,852 | 10,455 | |||||
Other assets | 119,960 | 18,964 | |||||
Total assets | $ | 8,228,223 | $ | 3,680,423 | |||
Liabilities, Non-controlling Interests and Stockholders' Equity | |||||||
Current liabilities: | |||||||
Current portion of long-term debt and financing lease obligations | $ | 2,031,937 | $ | 100,488 | |||
Accounts payable, accrued expenses and other current liabilities | 150,721 | 83,612 | |||||
Deferred revenue | 15,460 | 24,264 | |||||
Due to SunEdison, net | 20,274 | 194,432 | |||||
Total current liabilities | 2,218,392 | 402,796 | |||||
Long-term debt and financing lease obligations, less current portion | 2,550,175 | 1,599,277 | |||||
Deferred revenue, less current portion | 70,492 | 52,214 | |||||
Deferred income taxes | 26,630 | 7,702 | |||||
Asset retirement obligations | 215,146 | 78,175 | |||||
Other long-term liabilities | 31,408 | — | |||||
Total liabilities | 5,112,243 | 2,140,164 | |||||
Redeemable non-controlling interests | 175,711 | 24,338 | |||||
Stockholders' equity: | |||||||
Class A common stock | 784 | 387 | |||||
Class B common stock | 604 | 645 | |||||
Class B1 common stock | — | 58 | |||||
Additional paid-in capital | 1,267,484 | 498,256 | |||||
Accumulated deficit | (104,593 | ) | (26,317 | ) | |||
Accumulated other comprehensive income (loss) | 22,900 | (1,637 | ) | ||||
Treasury stock | (2,436 | ) | — | ||||
Total TerraForm Power, Inc. stockholders' equity | 1,184,743 | 471,392 | |||||
Non-controlling interests | 1,755,526 | 1,044,529 | |||||
Total non-controlling interests and stockholders' equity | 2,940,269 | 1,515,921 | |||||
Total liabilities, non-controlling interests and stockholders' equity | $ | 8,228,223 | $ | 3,680,423 |
TERRAFORM POWER, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) |
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Year Ended December 31, | |||||||
2015 | 2014 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (208,135 | ) | $ | (81,923 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Stock-based compensation expense | 13,125 | 5,787 | |||||
Depreciation, accretion and amortization expense | 161,310 | 41,280 | |||||
Amortization of favorable and unfavorable rate revenue contracts, net | 5,304 | 4,190 | |||||
Loss on prepaid warranty - affiliate | 45,380 | — | |||||
Loss on investments and receivables - affiliate | 16,079 | — | |||||
Amortization of deferred financing costs and debt discounts | 27,028 | 25,793 | |||||
Recognition of deferred revenue | (9,909 | ) | (258 | ) | |||
Loss (gain) on extinguishment of debt, net | 16,156 | (7,635 | ) | ||||
Unrealized loss on derivatives, net | 1,413 | — | |||||
Unrealized loss on foreign currency exchange, net | 22,343 | 11,920 | |||||
Deferred taxes | (13,497 | ) | (4,773 | ) | |||
Other, net | 9,395 | (9,257 | ) | ||||
Changes in assets and liabilities: | |||||||
Accounts receivable | (11,272 | ) | (3,431 | ) | |||
Prepaid expenses and other current assets | 12,189 | 22,921 | |||||
Accounts payable, accrued expenses and other current liabilities | 19,887 | 4,062 | |||||
Deferred revenue | 19,383 | 71,129 | |||||
Due to SunEdison, net | — | 4,422 | |||||
Other, net | (1,919 | ) | — | ||||
Net cash provided by operating activities | 124,260 | 84,227 | |||||
Cash flows from investing activities: | |||||||
Cash paid to third parties for renewable energy facility construction | (617,649 | ) | (1,122,293 | ) | |||
Other investments | (8,400 | ) | — | ||||
Acquisitions of renewable energy facilities from third parties, net of cash acquired | (2,471,600 | ) | (644,890 | ) | |||
Due to SunEdison, net | (26,153 | ) | (56,088 | ) | |||
Change in restricted cash | (48,609 | ) | 23,635 | ||||
Net cash used in investing activities | $ | (3,172,411 | ) | $ | (1,799,636 | ) |
TERRAFORM POWER, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (CONTINUED) |
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Year Ended December 31, | |||||||
2015 | 2014 | ||||||
Cash flows from financing activities: | |||||||
Proceeds from issuance of Class A common stock | $ | 921,610 | $ | 770,421 | |||
Change in restricted cash for principal debt service | — | 1,897 | |||||
Proceeds from Senior Notes due 2023 | 945,962 | — | |||||
Proceeds from Senior Notes due 2025 | 300,000 | — | |||||
Proceeds from Term Loan | — | 575,000 | |||||
Repayment of Term Loan | (573,500 | ) | (1,500 | ) | |||
Proceeds from bridge loan | — | 400,000 | |||||
Repayment of bridge loan | — | (400,000 | ) | ||||
Proceeds from Revolver | 890,000 | — | |||||
Repayment of Revolver | (235,000 | ) | — | ||||
Borrowings of non-recourse long-term debt | 1,425,033 | 471,923 | |||||
Principal payments on non-recourse long-term debt | (515,514 | ) | (341,191 | ) | |||
Due to SunEdison, net | (145,247 | ) | 199,369 | ||||
Contributions from non-controlling interests | 349,736 | 164,742 | |||||
Distributions to non-controlling interests | (28,145 | ) | (1,323 | ) | |||
Repurchase of non-controlling interests | (63,198 | ) | — | ||||
Distributions to SunEdison | (58,291 | ) | — | ||||
Net SunEdison investment | 149,936 | 405,062 | |||||
Payment of dividends | (88,705 | ) | (7,249 | ) | |||
Debt prepayment premium | (6,412 | ) | — | ||||
Debt financing fees | (59,672 | ) | (54,060 | ) | |||
Net cash provided by financing activities | 3,208,593 | 2,183,091 | |||||
Net increase in cash and cash equivalents | 160,442 | 467,682 | |||||
Effect of exchange rate changes on cash and cash equivalents | (2,401 | ) | (172 | ) | |||
Cash and cash equivalents at beginning of period | 468,554 | 1,044 | |||||
Cash and cash equivalents at end of period | $ | 626,595 | $ | 468,554 |
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:
Quarter Ended December 31, | Year Ended December 31, | ||||||||||||||
(In thousands) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Net loss | $ | (156,027 | ) | $ | (62,826 | ) | $ | (208,135 | ) | $ | (81,923 | ) | |||
Interest expense, net | 46,203 | 31,639 | 167,805 | 86,191 | |||||||||||
Income tax benefit | (16,083 | ) | (620 | ) | (13,241 | ) | (4,689 | ) | |||||||
Depreciation, accretion and amortization expense (a) | 51,321 | 20,280 | 166,614 | 45,470 | |||||||||||
General and administrative expenses - affiliate (b) | 14,443 | 10,361 | 51,330 | 19,144 | |||||||||||
Stock-based compensation expense (c) | 2,104 | 4,220 | 12,134 | 5,787 | |||||||||||
Acquisition and related costs, including affiliate (d) | 23,058 | 9,863 | 55,778 | 15,226 | |||||||||||
Loss on prepaid warranty - affiliate (e) | 45,380 | — | 45,380 | — | |||||||||||
Formation and offering related fees and expenses, including affiliate (f) | — | 2,041 | — | 5,440 | |||||||||||
Unrealized loss on derivatives, net (g) | 2,268 | — | 1,413 | — | |||||||||||
Loss (gain) on extinguishment of debt, net (h) | 7,504 | — | 16,156 | (7,635 | ) | ||||||||||
LAP settlement (i) | 10,000 | — | 10,000 | — | |||||||||||
Eastern Maine Electric Cooperative litigation reserve (j) | 14,000 | — | 14,000 | — | |||||||||||
Facility-level non-controlling interest member transaction fees (k) | 1,305 | 11,828 | 4,058 | 11,828 | |||||||||||
Loss on foreign currency exchange, net (l) | 9,733 | 7,093 | 19,488 | 14,007 | |||||||||||
Loss on investments and receivables - affiliate (m) | 16,079 | — | 16,079 | — | |||||||||||
Other non-cash operating revenues (n) | (5,048 | ) | (321 | ) | (9,310 | ) | (666 | ) | |||||||
Other non-operating expenses (o) | 5,811 | 695 | 8,153 | 754 | |||||||||||
Adjusted EBITDA | $ | 72,051 | $ | 34,253 | $ | 357,702 | $ | 108,934 |
_______
(a) Includes a
(b) General and administrative expenses – affiliate represent costs incurred by
(c) Represents stock-based compensation expense recorded within general and administrative expenses in the consolidated statements of operations. Excludes
(d) Represents transaction related costs, including affiliate acquisition costs, associated with the acquisitions completed during the years ended
(e) In conjunction with the First Wind Acquisition,
(f) Represents Formation and offering related fees and expenses and Formation and offering related fees and expenses – affiliate reflected in the consolidated statement of operations. These fees consist of professional fees for legal, tax, and accounting services related to our IPO.
(g) Represents the change in the fair value of commodity contracts not designated as hedges.
(h) We recognized a net loss on extinguishment of debt of
(i) Pursuant to the Settlement Agreement, TERP made a one-time payment to LAP in the amount of
(j) Represents accrued loss recorded to general and administrative expenses for the three months and year ended
(k) 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.
(l) Represents unrealized losses on the re-measurement of intercompany loans which are primarily denominated in British pounds due to the strengthening of the U.S. dollar.
(m) As a result of the SunEdison Bankruptcy, we recognized an
(n) Primarily represents deferred revenue recognized related to the upfront sale of investment tax credits to non-controlling interest members.
(o) 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. The amount for the three months and year ended
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:
Quarter Ended December 31, | Year Ended December 31, | ||||||||||||||
(In thousands) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Adjustments to reconcile Operating revenues, net to adjusted revenue | |||||||||||||||
Operating revenues, net | $ | 105,654 | $ | 42,566 | $ | 469,506 | $ | 127,156 | |||||||
Unrealized loss on derivatives, net (a) | 2,268 | — | 1,413 | — | |||||||||||
Amortization of favorable and unfavorable rate revenue contracts, net (b) | 3,705 | 632 | 5,304 | 4,190 | |||||||||||
Other non-cash (c) | (4,404 | ) | (67 | ) | (9,310 | ) | (666 | ) | |||||||
Adjusted revenue | $ | 107,223 | $ | 43,131 | $ | 466,913 | $ | 130,680 |
_____
(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 and year ended December 31, 2015 related to the upfront sale of investment tax credits to non-controlling interest members.
Contacts: 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