|
|
|
(State or other jurisdiction of
incorporation or organization)
|
(Commission File Number)
|
(I. R. S. Employer
Identification No.)
|
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Title of each class
|
Trading Symbol
|
Name of each exchange on which registered
|
|
|
|
Exhibit No.
|
Description
|
Press release, dated May 11, 2020, titled “TerraForm Power Reports First Quarter 2020 Results”
|
|
Presentation materials, dated May 11, 2020, titled “Q1 2020 Supplemental Information”
|
|
Letter to Shareholders, dated May 11, 2020
|
|
104
|
Cover Page Interactive Data File (formatted as inline XBRL)
|
TERRAFORM POWER, INC.
|
||
Date: May 11, 2020
|
By:
|
/s/ William Fyfe
|
Name:
|
William Fyfe
|
|
Title:
|
General Counsel
|
![]() |
• |
Net (Loss) Income attributable to Class A shareholders, Adjusted EBITDA and CAFD of $(55) million, $180 million and $20 million, respectively, for the first
quarter of 2020. This represents an increase in Net (Loss) Income attributable to Class A shareholders of $(46) million, an increase in Adjusted EBITDA of $2 million and a decrease in CAFD of $24 million, compared to the first quarter of
2019;
|
• |
Entered into a definitive merger agreement with Brookfield Renewable Partners (“BEP” or “Brookfield Renewable”) by which BEP will acquire the balance of
TerraForm Power shares Brookfield and its affiliates do not already own for a per share consideration of 0.381 in stock of either BEP or Brookfield Renewable Corporation (“BEPC”);
|
• |
Transitioned to SMA Solar Technology (“SMA”) operations and maintenance (“O&M”) services for ~540 MW of our North American solar fleet, pursuant to the framework agreement that we signed with SMA in November of 2019;
|
• |
Awarded 20-year Renewable Energy Certificate (“REC”) contracts by the New York State Energy Research and Development Authority (“NYSERDA”) for the 25% of
incremental power production from our two New York repowering projects;
|
• |
Completed a $246 million project-level refinancing of one of our North American wind farms at a rate of 3.28%, which we expect to achieve interest savings of
$2.5 million per annum; and
|
• |
Declared a Q2 2020 distribution of $0.2014 per share
|
Three Months
Ended
3/31/2020
|
Three Months
Ended
3/31/2019
|
|||||||
Generation (GWh)
|
2,336
|
2,399
|
||||||
Net Loss - Class A Shares ($M)
|
(55
|
)
|
(9
|
)
|
||||
Loss per Share1
|
$
|
(0.24
|
)
|
$
|
(0.04
|
)
|
||
Adjusted EBITDA2 ($M)
|
180
|
178
|
||||||
CAFD2 ($M)
|
20
|
44
|
||||||
CAFD per Share1,2,3
|
$
|
0.09
|
$
|
0.21
|
![]() |
![]() |
![]() |
![]() |
![]() |
Three Months Ended
March 31,
|
||||||||
2020
|
2019
|
|||||||
Operating revenues, net
|
$
|
246,762
|
$
|
225,332
|
||||
Operating costs and expenses:
|
||||||||
Cost of operations
|
57,864
|
60,751
|
||||||
General and administrative expenses
|
26,217
|
23,162
|
||||||
General and administrative expenses - affiliate
|
9,777
|
5,164
|
||||||
Acquisition costs
|
355
|
182
|
||||||
Acquisition costs - affiliate
|
654
|
—
|
||||||
Depreciation, accretion and amortization expense
|
122,391
|
106,969
|
||||||
Total operating costs and expenses
|
217,258
|
196,228
|
||||||
Operating income
|
29,504
|
29,104
|
||||||
Other expenses (income):
|
||||||||
Interest expense, net
|
77,959
|
86,287
|
||||||
Loss (gain) on modification and extinguishment of debt, net
|
3,593
|
(5,543
|
)
|
|||||
Gain on foreign currency exchange, net
|
(4,871
|
)
|
(8,752
|
)
|
||||
Other income, net
|
(4,392
|
)
|
(2,680
|
)
|
||||
Total other expenses, net
|
72,289
|
69,312
|
||||||
Loss before income tax expense
|
(42,785
|
)
|
(40,208
|
)
|
||||
Income tax expense (benefit)
|
24,461
|
(4,151
|
)
|
|||||
Net loss
|
(67,246
|
)
|
(36,057
|
)
|
||||
Less: Net income (loss) attributable to redeemable non-controlling interests
|
12
|
(9,381
|
)
|
|||||
Less: Net loss attributable to non-controlling interests
|
(12,187
|
)
|
(18,049
|
)
|
||||
Net loss attributable to Class A common stockholders
|
$
|
(55,071
|
)
|
$
|
(8,627
|
)
|
||
Weighted average number of shares:
|
||||||||
Class A common stock - Basic and diluted
|
226,513
|
209,142
|
||||||
Loss per share:
|
||||||||
Class A common stock - Basic and diluted
|
$
|
(0.24
|
)
|
$
|
(0.04
|
)
|
||
Distributions declared per share:
|
||||||||
Class A common stock
|
$
|
0.2014
|
$
|
0.2014
|
![]() |
March 31,
2020
|
December 31,
2019
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
249,220
|
$
|
237,480
|
||||
Restricted cash, current
|
42,907
|
35,657
|
||||||
Accounts receivable, net
|
190,745
|
167,865
|
||||||
Due from affiliates
|
1,729
|
499
|
||||||
Derivative assets, current
|
23,260
|
15,819
|
||||||
Deposit on acquisitions
|
12,985
|
24,831
|
||||||
Prepaid expenses
|
16,728
|
13,514
|
||||||
Other current assets
|
56,863
|
57,682
|
||||||
Total current assets
|
594,437
|
553,347
|
||||||
Renewable energy facilities, net, including consolidated variable interest entities of $3,156,511 and
$3,188,508 in 2020 and 2019, respectively
|
7,759,853
|
7,405,461
|
||||||
Intangible assets, net, including consolidated variable interest entities of $678,894 and $690,594 in
2020 and 2019, respectively
|
1,921,229
|
1,793,292
|
||||||
Goodwill
|
167,989
|
127,952
|
||||||
Restricted cash
|
98,374
|
76,363
|
||||||
Derivative assets
|
50,217
|
57,717
|
||||||
Other assets
|
43,030
|
44,504
|
||||||
Total assets
|
$
|
10,635,129
|
$
|
10,058,636
|
||||
Liabilities, Redeemable Non-controlling Interests and Stockholders’ Equity
|
||||||||
Current liabilities:
|
||||||||
Current portion of long-term debt, including consolidated variable interest entities of $65,959 and
$55,089 in 2020 and 2019, respectively
|
$
|
475,662
|
$
|
441,951
|
||||
Accounts payable, accrued expenses and other current liabilities
|
188,612
|
178,796
|
||||||
Due to affiliates
|
13,073
|
11,510
|
||||||
Derivative liabilities, current portion
|
63,515
|
33,969
|
||||||
Total current liabilities
|
740,862
|
666,226
|
||||||
Long-term debt, less current portion, including consolidated variable interest entities of $1,162,180
and $932,862 in 2020 and 2019, respectively
|
6,287,131
|
5,793,431
|
||||||
Operating lease obligations, less current portion, including consolidated variable interest entities of
$138,486 and $141,683 in 2020 and 2019, respectively
|
286,620
|
272,894
|
||||||
Asset retirement obligations, including consolidated variable interest entities of $118,961 and
$116,159 in 2020 and 2019, respectively
|
315,146
|
287,288
|
||||||
Derivative liabilities
|
242,494
|
101,394
|
||||||
Deferred income taxes
|
197,850
|
194,539
|
||||||
Other liabilities
|
103,191
|
112,072
|
||||||
Total liabilities
|
8,173,294
|
7,427,844
|
||||||
Redeemable non-controlling interests
|
8,010
|
22,884
|
||||||
Stockholders’ equity:
|
||||||||
Class A common stock, $0.01 par value per share, 1,200,000,000 shares authorized, 227,585,636 and
227,552,105 shares issued in 2020 and 2019, respectively
|
2,277
|
2,276
|
||||||
Additional paid-in capital
|
2,480,684
|
2,512,891
|
||||||
Accumulated deficit
|
(563,358
|
)
|
(508,287
|
)
|
||||
Accumulated other comprehensive (loss) income
|
(16,664
|
)
|
11,645
|
|||||
Treasury stock, 1,064,347 and 1,051,298 shares in 2020 and 2019, respectively
|
(15,412
|
)
|
(15,168
|
)
|
||||
Total TerraForm Power, Inc. stockholders’ equity
|
1,887,527
|
2,003,357
|
||||||
Non-controlling interests
|
566,298
|
604,551
|
||||||
Total stockholders’ equity
|
2,453,825
|
2,607,908
|
||||||
Total liabilities, redeemable non-controlling interests and stockholders’ equity
|
$
|
10,635,129
|
$
|
10,058,636
|
![]() |
Three Months Ended March 31,
|
||||||||
2020
|
2019
|
|||||||
Cash flows from operating activities:
|
$
|
(67,246
|
)
|
$
|
(36,057
|
)
|
||
Net loss
|
||||||||
Adjustments to reconcile net loss to net cash provided by operating activities:
|
||||||||
Depreciation, accretion and amortization expense
|
122,391
|
106,969
|
||||||
Amortization of favorable and unfavorable rate revenue contracts, net
|
9,903
|
9,138
|
||||||
Amortization of deferred financing costs, debt premiums and discounts, net
|
3,464
|
2,453
|
||||||
Unrealized loss on interest rate swaps
|
3,131
|
13,925
|
||||||
Unrealized loss (gain) on commodity contract derivatives, net
|
1,300
|
(804
|
)
|
|||||
Stock-based compensation expense
|
329
|
160
|
||||||
Loss (gain) on modification and extinguishment of debt, net
|
3,593
|
(5,543
|
)
|
|||||
Loss on disposal of renewable energy facilities
|
889
|
1,933
|
||||||
Gain on foreign currency exchange, net
|
(1,753
|
)
|
(6,718
|
)
|
||||
Deferred taxes
|
24,281
|
(4,318
|
)
|
|||||
Charges to allowance for doubtful accounts
|
540
|
166
|
||||||
Other, net
|
207
|
(62
|
)
|
|||||
Changes in assets and liabilities, excluding the effect of acquisitions:
|
||||||||
Accounts receivable
|
8,454
|
(9,058
|
)
|
|||||
Prepaid expenses and other current assets
|
(3,847
|
)
|
10,345
|
|||||
Accounts payable, accrued expenses and other current liabilities
|
(9,825
|
)
|
(1,888
|
)
|
||||
Due to affiliates, net
|
(1,046
|
)
|
(535
|
)
|
||||
Other, net
|
(8,998
|
)
|
4,893
|
|||||
Net cash provided by operating activities
|
85,767
|
84,999
|
||||||
Cash flows from investing activities:
|
||||||||
Capital expenditures
|
(1,006
|
)
|
(7,368
|
)
|
||||
Proceeds from energy rebate and reimbursable interconnection costs
|
406
|
2,836
|
||||||
Proceeds from the settlement of foreign currency contracts, net
|
38,753
|
—
|
||||||
Payments to acquire businesses, net of cash and restricted cash acquired
|
(79,433
|
)
|
—
|
|||||
Other investing activities
|
—
|
729
|
||||||
Net cash used in investing activities
|
$
|
(41,280
|
)
|
$
|
(3,803
|
)
|
||
Cash flows from financing activities:
|
||||||||
Revolver draws
|
127,000
|
50,000
|
||||||
Revolver repayments
|
(66,000
|
)
|
(15,000
|
)
|
||||
Term Loan principal payments
|
—
|
(875
|
)
|
|||||
Borrowings of non-recourse long-term debt
|
275,624
|
—
|
||||||
Principal payments and prepayments on non-recourse long-term debt
|
(242,113
|
)
|
(50,194
|
)
|
||||
Debt financing fees paid
|
(3,250
|
)
|
(1,197
|
)
|
||||
Contributions from non-controlling interests
|
3,008
|
5,562
|
||||||
Purchase of membership interests and distributions to non-controlling interests
|
(30,762
|
)
|
(6,103
|
)
|
||||
Cash distributions to Class A common stockholders
|
(45,488
|
)
|
(41,987
|
)
|
||||
Payment to terminate interest rate swaps
|
(16,331
|
)
|
—
|
|||||
Other financing activities
|
(971
|
)
|
—
|
|||||
Net cash provided by (used in) by financing activities
|
717
|
(59,794
|
)
|
|||||
Net increase in cash, cash equivalents and restricted cash
|
45,204
|
21,402
|
||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(4,203
|
)
|
(4,377
|
)
|
||||
Cash, cash equivalents and restricted cash at beginning of period
|
349,500
|
392,809
|
||||||
Cash, cash equivalents and restricted cash at end of period
|
$
|
390,501
|
$
|
409,834
|
![]() |
![]() |
![]() |
Three Months Ended
March 31
|
||||||||
(in millions)
|
2020
|
2019
|
||||||
Reconciliation of Net Loss to Adjusted EBITDA
|
||||||||
Net loss attributable to Class A common stockholders
|
$
|
(55
|
)
|
$
|
(9
|
)
|
||
Net loss attributable to redeemable and non-redeemable non-controlling interests
|
$
|
(12
|
)
|
$
|
(27
|
)
|
||
Net loss
|
$
|
(67
|
)
|
$
|
(36
|
)
|
||
Depreciation, accretion and amortization expense (a)
|
132
|
117
|
||||||
Interest expense, net
|
78
|
86
|
||||||
Non-operating general and administrative expenses (b)
|
13
|
12
|
||||||
Loss (gain) on modification and extinguishment of debt
|
4
|
(6
|
)
|
|||||
Acquisition and related costs
|
1
|
—
|
||||||
Income tax expense (benefit)
|
24
|
(4
|
)
|
|||||
Regulated Solar and Wind price band adjustment (c)
|
(8
|
)
|
5
|
|||||
Management Fee (d)
|
9
|
5
|
||||||
Other non-cash or non-operating items (e)
|
(6
|
)
|
(1
|
)
|
||||
Adjusted EBITDA
|
$
|
180
|
$
|
178
|
(in millions)
|
Three Months Ended
March
31
|
|||||||
Reconciliation of Operating Revenues, net to Adjusted Revenue
|
2020
|
2019
|
||||||
Operating revenues, net
|
$
|
247
|
$
|
225
|
||||
Unrealized loss (gain) on commodity contract derivatives, net (f)
|
1
|
(1
|
)
|
|||||
Amortization of favorable and unfavorable rate revenue contracts, net (g)
|
10
|
9
|
||||||
Regulated Solar and Wind price band adjustment (c)
|
(8
|
)
|
5
|
|||||
Other items (h)
|
—
|
4
|
||||||
Adjusted Revenue
|
$
|
250
|
$
|
242
|
(in millions)
|
Three Months Ended
March
31
|
|||||||
Reconciliation of Adjusted Revenue to Adjusted EBITDA and Adjusted EBITDA to CAFD
|
2020
|
2019
|
||||||
Adjusted Revenue
|
$
|
250
|
$
|
242
|
||||
Direct Operating costs
|
(72
|
)
|
(65
|
)
|
||||
Settled FX gain
|
2
|
1
|
||||||
Adjusted EBITDA
|
$
|
180
|
$
|
178
|
||||
Fixed management fee (d)
|
(4
|
)
|
(3
|
)
|
||||
Variable management fee (d)
|
(5
|
)
|
(2
|
)
|
||||
Adjusted interest expense (i)
|
(80
|
)
|
(72
|
)
|
||||
Levelized principal payments (j)
|
(68
|
)
|
(59
|
)
|
||||
Cash distributions to non-controlling interests (k)
|
(5
|
)
|
(5
|
)
|
||||
Sustaining capital expenditures (l)
|
(2
|
)
|
(2
|
)
|
||||
Other (m)
|
4
|
9
|
||||||
Cash available for distribution (CAFD)
|
$
|
20
|
$
|
44
|
![]() |
a) |
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, and losses on disposal of property, plant and equipment.
|
b) |
Non-operating items and other items incurred directly by TerraForm Power that we do not consider indicative of our core business operations are treated as an addback in the
reconciliation of net loss to Adjusted EBITDA. These items include, but are not limited to, extraordinary costs and expenses related primarily to IT system arrangements, relocation of the headquarters to New York, and legal, third party
diligence, contractor fees and advisory fees associated with acquisitions, dispositions, financings, and other non-recurring activities. TerraForm Power’s normal, recurring general and administrative expenses in Corporate, paid by TerraForm
Power, are the amounts shown below and were not added back in the reconciliation of net loss to Adjusted EBITDA:
|
$ in millions
|
Q1 2020
|
Q1 2019
|
||||||
Operating general and administrative expenses in Corporate
|
$
|
(8
|
)
|
$
|
(8
|
)
|
c) |
Represents the Regulated Solar and Wind segment’s Price Band Adjustment to Return on Investment Revenue as dictated by market conditions. To the extent that the wholesale market
price is greater or less than a price band centered around the market price forecasted by the Spanish regulator during the preceding three years, the difference in revenues assuming average generation accumulates in a tracking account. The
Return on Investment is either increased or decreased in order to amortize the balance of the tracking account over the remaining regulatory life of the assets.
|
d) |
Represents management fee that is not included in Direct operating costs.
|
e) |
Represents other non-cash or non-operating 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, and one-time blade repairs related to the preparation for GE
transition.
|
f) |
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.
|
g) |
Represents net amortization of purchase accounting related to intangibles arising from past business combinations related to favorable and unfavorable rate revenue contracts.
|
h) |
Primarily represents insurance compensation for revenue losses, transmission capacity revenue, and adjustments for solar renewable energy certificate (“SREC”) recognition and other
revenue due to timing.
|
i) |
Represents project-level and other interest expense and interest income attributed to normal operations. The reconciliation from Interest expense, net as shown on the Consolidated
Statements of Operations to adjusted interest expense applicable to CAFD is as follows:
|
$ in millions
|
Q1 2020
|
Q1 2019
|
||||||
Interest expense, net
|
$
|
(78
|
)
|
$
|
(86
|
)
|
||
Amortization of deferred financing costs and debt discounts
|
4
|
2
|
||||||
Other, primarily fair value changes in interest rate swaps and purchase accounting adjustments due to
acquisition
|
(6
|
)
|
12
|
|||||
Adjusted interest expense
|
$
|
(80
|
)
|
$
|
(72
|
)
|
j) |
Represents levelized project-level and other principal debt payments to the extent paid from operating cash.
|
k) |
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 Consolidated Statement of Cash Flows to Cash distributions to non-controlling interests, net for the three months March 31, 2020 and 2019 is as follows:
|
$ in millions
|
Q1 2020
|
Q1 2019
|
||||||
Purchase of membership interests and distribution to non- controlling interests
|
(31
|
)
|
(6
|
)
|
||||
Buyout of non-controlling interests
|
2
|
1
|
||||||
Adjustment for non-operating cash distributions
|
24
|
—
|
||||||
Cash distributions to non-controlling interests
|
$
|
(5
|
)
|
$
|
(5
|
)
|
l) |
Represents long-term average sustaining capital expenditures to maintain reliability and efficiency of the assets.
|
m) |
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, cash tax payments, and recognized SREC gains that are covered by loan agreements.
|
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Q1 2020 Letter to Shareholders
|
• |
We transitioned to SMA Solar Technology (“SMA”) operations and maintenance (“O&M”) services for ~540 MW of our North American solar fleet, pursuant to the framework
agreement that we signed with SMA in November of 2019;
|
• |
Awarded 20-year Renewable Energy Certificate (“REC”) contracts by the New York State Energy Research and Development Authority (“NYSERDA”) for the 25% of incremental power
production from our two New York repowering projects;
|
• |
Completed a $246 million project-level refinancing of one of our North American wind farms at a rate of 3.28%, which we expect to achieve interest savings of $2.5 million per
annum; and
|
• |
Declared a Q2 2020 distribution of $0.2014 per share
|
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Q1 2020 Letter to Shareholders
|
![]() |
Q1 2020 Letter to Shareholders
|
![]() |
Q1 2020 Letter to Shareholders
|