OREANDA-NEWS. TerraForm Global, Inc. (Nasdaq:GLBL) (“TerraForm Global” or the “Company”), a global owner and operator of clean energy power plants, today reported fourth quarter and full year 2016 financial results and filed its Form 10-K for the annual period ended December 31, 2016 with the Securities and Exchange Commission. The Form 10-K is available on the Investors section of TerraForm Global’s website at www.terraformglobal.com.

“TerraForm Global has made significant progress in meeting the closing conditions for the Brookfield transaction, including entry into a settlement agreement with Renova and the approval of our settlement agreement with SunEdison by the bankruptcy court,” said Peter Blackmore, Chairman and Interim CEO of TerraForm Global. “Our team remains focused on meeting the outstanding closing conditions, which include the settlement of certain remaining litigation, receipt of certain regulatory approvals and shareholder approval of the transaction. We continue to expect the transaction to close in the second half of 2017.”

4Q 2016 and FY 2016 Results: Key Metrics

  4Q 2016 4Q 2015 % change YoY     2016  
Revenue, net ($M) $ 55   $ 51   8 %   $ 214  
Net Income / (Loss) ($M) $ (60 ) $ (254 ) n/a   $ (78 )
 
MW (net economic ownership) at end of period   919     854   8 %     919  
Capacity Factor   26.3 %   31.1 % (490) bps     26.1 %
MWh (000s)   574     558   3 %     2,273  
Adjusted Revenue / MWh $ 98   $ 93   5 %   $ 95  
Adjusted Revenue ($M) $ 56   $ 52   8 %   $ 216  
Adjusted EBITDA ($M) $ 33   $ 40   -17 %   $ 151  
Adjusted EBITDA margin   58.9 %   76.7 % (1,780) bps     70.0 %
CAFD ($M) $ 18   $ 38   -51 %   $ 93  
 
Unrestricted cash at end of period ($M) $ 681   $ 922   -26 %   $ 681  

Investor Conference Call

We will host an investor conference call and webcast to discuss our 4Q 2016 and FY 2016 results. 

Date:           Monday June 19, 2017
Time:           4:30 pm ET
US Toll-Free #:           (844) 707-0667
International #:           (703) 639-1221
Code:           37602329
Webcast:           http://edge.media-server.com/m/p/iyqydmz2
             

The webcast will also be available on TerraForm Global's investor relations website: www.terraformglobal.com.
A replay of the webcast will be available for those unable to attend the live webcast.

Annual Meeting

TerraForm Global has scheduled its annual meeting of stockholders for June 29, 2017 at 4:30 pm ET. As the Company did not hold an annual meeting of stockholders in 2016, pursuant to Rule 14a-8 under the Exchange Act, the Company has set a new deadline for the receipt of any stockholder proposals submitted pursuant to Rule 14a-8 for inclusion in its proxy materials for the 2017 Annual Meeting.  In order to be considered timely, such stockholder proposals must have been received by the Company no later than June 14, 2017. This deadline will also apply in determining whether notice is timely for purposes of exercising discretionary voting authority with respect to proxies for purposes of Rule 14a-4(c) under the Exchange Act.

All stockholder proposals submitted pursuant to Rule 14a-8 under the Exchange Act must be delivered to or mailed and received at the principal executive offices of the Company, at TerraForm Global, Inc., 7550 Wisconsin Ave., 9th Floor, Bethesda, Maryland 20814. The Company’s Bylaws also specify certain requirements regarding the form and content of notices of stockholder proposals. The Company reserves the right to reject, rule out of order or take other appropriate action with respect to any proposal that does not comply with these and other applicable requirements. 

About TerraForm Global

TerraForm Global is a renewable energy company that is changing how energy is generated, distributed and owned. TerraForm Global creates value for its investors by owning and operating clean energy power plants in high-growth emerging markets. 

 

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.

Cash Available for Distribution (CAFD)

CAFD is a supplemental non-GAAP measure of our ability to earn and distribute cash to investors. 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, net cash provided by (used in) operating activities or any other liquidity measure determined in accordance with GAAP, nor is it indicative of funds available to fund our cash needs.

     
TERRAFORM GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
     
    Year Ended December 31,
    2016     2015     2014
Operating revenues, net   $ 214,317       $ 124,116       $ 39,449  
Operating costs and expenses:                
Cost of operations   46,935       19,041       4,256  
Cost of operations - affiliate   —              
General and administrative expense   72,857       32,315       12,199  
Acquisition, formation and related costs   10,872       39,358       —  
Depreciation, accretion and amortization expense   55,188       28,931       7,167  
Provision for contingent loss on deposit for acquisitions   —       231,000       —  
Total operating costs and expenses   185,852       350,645       23,622  
Operating income (loss)   28,465       (226,529 )     15,827  
Other expense (income):                
(Gain) loss on extinguishment of debt, net   (5,857 )     2,298       —  
Interest expense, net   129,276       107,648       24,294  
Gain on previously held equity investment   —       (1,426 )     —  
(Gain) loss on foreign currency exchange, net   (4,899 )     35,720       (4,038 )
Other income, net   (20,239 )     (6,422 )     (1,090 )
Total other expenses, net   98,281       137,818       19,166  
Loss before income tax expense   (69,816 )     (364,347 )     (3,339 )
Income tax expense   8,682       5,335       1,700  
Net loss   (78,498 )     (369,682 )     $ (5,039 )
Less: Predecessor loss prior to initial public offering on August 5, 2015   —       (39,353 )      
Net loss subsequent to initial public offering   (78,498 )     (330,329 )      
Less: Net loss attributable to non-controlling interests   (25,466 )     (118,532 )      
Net loss attributable to TerraForm Global, Inc. Class A common stockholders   $ (53,032 )     $ (211,797 )      
                 
Weighted average number of shares:                
Class A common stock - Basic and diluted   113,254       100,813        
Loss per share:                
Class A common stock - Basic and diluted   $ (0.47 )     $ (2.10 )      

 

       
TERRAFORM GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands)
       
      Year Ended December 31,
      2016     2015     2014
Net loss     $ (78,498 )     $ (369,682 )     $ (5,039 )
Other comprehensive income (loss), net of tax:                  
Net foreign currency translation adjustments     44,711       (9,363 )     (8,167 )
Net unrealized gain (loss) on hedging instruments     (10,033 )     13,747       (12,903 )
Other comprehensive income (loss), net of tax     34,678       4,384       (21,070 )
Total comprehensive loss     (43,820 )     (365,298 )     (26,109 )
Less: Predecessor comprehensive loss prior to initial public offering on August 5, 2015     —       (43,453 )     (26,109 )
Comprehensive loss subsequent to initial public offering     (43,820 )     (321,845 )     $ —  
Less: Comprehensive loss attributable to non-controlling interests:                  
Net loss     (25,466 )     (118,532 )      
Net foreign currency translation adjustments     18,091       (12,990 )      
Net unrealized gain (loss) on hedging instruments     (6,713 )     2,426        
Total Comprehensive loss attributable to non-controlling interest     (14,088 )     (129,096 )      
Total Comprehensive loss attributable to Class A common stockholders     $ (29,732 )     $ (192,749 )      

 

     
TERRAFORM GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
     
    December 31,
(In thousands, except per share data)   2016     2015
ASSETS          
Current assets:          
Cash and cash equivalents   $ 680,893       $ 922,318  
Current portion of restricted cash, including consolidated variable interest entities of $64,786 and $46,321as of December 31, 2016 and 2015, respectively   79,294       119,151  
Accounts receivable, net   37,596       30,287  
Prepaid expenses and other current assets, including consolidated variable interest entities of $85,501 and $123,876 as of December 31, 2016 and 2015, respectively   102,555       139,335  
Total current assets   900,338       1,211,091  
Power plants, net, including consolidated variable interest entities of $431,686 and $478,884 as of December 31, 2016 and 2015, respectively   1,355,362       1,206,604  
Restricted cash   16,482       22,682  
Intangible assets, net including consolidated variable interest entities of $56,077 and $51,159 as of December 31, 2016 and 2015, respectively   82,450       70,630  
Equity method investment   —       73,249  
Deposit for acquisitions, net including consolidated variable interest entities of $136 and $40,134 as of December 31, 2016 and 2015, respectively   48,274       51,101  
Other assets   45,373       51,809  
Total assets   $ 2,448,279       $ 2,687,166  
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities:          
Current portion of long-term debt, including consolidated variable interest entities of $314,928 and $326,535 as of December 31, 2016 and 2015, respectively   $ 327,459       $ 319,498  
Accounts payable   12,009       8,491  
Accrued expenses and other current liabilities, including consolidated variable interest entities of $44,633 and $34,338 as of December 31, 2016 and 2015, respectively   119,179       130,051  
Due to SunEdison, net   16,084       44,254  
Total current liabilities   474,731       502,294  
Long-term debt, less current portion   758,609       952,653  
Asset retirement obligations   10,310       8,629  
Other long-term liabilities   6,810       1,455  
Deferred tax liabilities, including consolidated variable interest entities of $40,817 and $37,295 as of December 31, 2016 and 2015, respectively   52,106       39,482  
Total liabilities   1,302,566       1,504,513  
Stockholders’ Equity:          
Preferred stock, par value $0.01 per share, 50,000,000 shares authorized, no shares issued and outstanding as of December 31, 2016 or 2015   —       —  
Class A common stock, par value $0.01 per share, 2,750,000,000 shares authorized, 113,253,681 and 114,630,318 shares issued, and 112,995,133 and 114,625,074 shares outstanding as of December 31, 2016 and 2015, respectively   1,132       1,146  
Class B common stock, par value $0.01 per share, 200,000,000 shares authorized, 61,343,054 shares issued and outstanding as of December 31, 2016 and 2015   613       613  
Class B1 common stock, par value $0.01 per share, 550,000,000 shares authorized, no shares issued or outstanding as of December 31, 2016 or 2015   —       —  
Treasury stock, at cost, 258,548 and 5,244 shares owned as of December 31, 2016 and 2015, respectively   (4,739 )     (28 )
Additional paid-in capital   940,405       923,740  
Accumulated deficit   (266,242 )     (213,210 )
Accumulated other comprehensive income (loss)   12,119       (11,181 )
Total TerraForm Global, Inc. stockholders’ equity   683,288       701,080  
Non-controlling interests   462,425       481,572  
Total stockholders’ equity   1,145,713       1,182,652  
Total liabilities and stockholders’ equity   $ 2,448,279       $ 2,687,165  

 

     
TERRAFORM GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
     
    Year Ended December 31,
  2016     2015     2014
Cash flows from operating activities:                
Net loss   $ (78,498 )     $ (369,682 )     $ (5,039 )
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:                
Amortization of deferred financing costs   9,846       21,159       1,140  
Depreciation, accretion and amortization   55,188       28,931       7,167  
Stock-based compensation expense   3,646       1,601       —  
Change in fair value of interest rate swaps   5,538       (5,639 )     705  
Provision for contingent loss on deposit for acquisitions   —       231,000       —  
Loss on disposal of property   2,735       —       —  
Gain on previously held equity investment   —       (1,426 )     —  
(Gain) Loss on extinguishment of debt   (5,857 )     2,298       —  
Unrealized gains on foreign currency, net   3,714       (21,747 )      
Deferred tax expense (benefit)   722       3,230       1,461  
Other non-cash items   1,475       (763 )      
Changes in operating assets and liabilities:                
Accounts receivable   28       3,187       (7,533 )
Prepaid expenses and other assets   3,533       51,731       (656 )
Accounts payable, accrued expenses and other liabilities   (7,272 )     56,921       (5,512 )
Due to/from SunEdison, net   (9,035 )     4,210       23,327  
Net cash (used in) provided by operating activities   (14,237 )     5,011       15,060  
Cash flows from investing activities:                
Capital expenditures   (77,091 )     (99,115 )     (190,267 )
Change in cash committed for construction   —       40,573       (40,305 )
Change in restricted cash   58,356       (29,435 )     (1,509 )
Cash paid for acquisitions, net of cash acquired   (32,128 )     (266,025 )     —  
Proceeds from sale of power purchase agreement   —       10,299       —  
Cash paid for equity method investment   —       (72,400 )     —  
Cash acquired upon FERSA consolidation   8,022       —       —  
Returns from BioTherm escrow and deposits   6,595       —       —  
Cash paid for deposit for acquisitions   —       (276,400 )     —  
Cash paid for settlement of foreign currency contracts   —       (54,524 )     —  
Other   (1,000 )     —       228  
Net cash used in investing activities   (37,246 )     (747,027 )     (231,853 )
Cash flows from financing activities:                
Proceeds from Bridge Facility   —       400,000       150,000  
Repayments on Bridge Facility   —       (550,000 )     —  
Proceeds from Revolver   —       135,000       —  
Repayments on Revolver   (135,000 )     —       —  
Proceeds from IPO, net of fees   —       623,970       —  
Proceeds from Senior Notes, net of discount   —       799,899       —  
Repayments on Senior Notes   (35,441 )     (6,800 )     —  
Repayments of system debt financing   (35,085 )     (475,901 )     (8,693 )
Proceeds from system debt financing   —       50,476       224,023  
Net SunEdison investment   50,577       73,292       5,930  
Proceeds from Private Placement, net of fee   —       549,147       —  
Proceeds from loans from SunEdison and affiliates   —       —       3,951  
Payment of dividends   (30,674 )     (19,887 )     —  
Payment of deferred financing costs   —       (42,731 )     (9,692 )
Net cash (used in) provided by financing activities   (185,623 )     1,536,465       365,519  
Net (decrease) increase in cash and cash equivalents   (237,106 )     794,449       148,726  
Effect of exchange rate changes on cash and cash equivalents   (4,319 )     (22,277 )     (1,728 )
Cash and cash equivalents at beginning of period   922,318       150,146       3,148  
Cash and cash equivalents at end of period   $ 680,893       $ 922,318       $ 150,146  

 

TERRAFORM GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
 (CONTINUED)
(In thousands)
     
    Year Ended December 31,
  2016     2015     2014
Supplemental disclosures:                
Cash paid for interest, net of amounts capitalized of $3, $1,780 and $1,623 respectively   $ 130,667       $ 73,888       $ 22,754  
Schedule of non-cash activities:                
Additions to power plants in due to SunEdison, net   220       64,508       2,100  
Additions of asset retirement obligation (“ARO”) assets and liabilities   1,141       863       2,930  
ARO assets and obligations from acquisitions   1,113       3,690       —  
Compulsory convertible debt conversion   9,793       —       —  
Decrease in due to SunEdison, net in exchange for equity   —       76,362       —  
Issuance of Class A common stock in connection with acquisitions of power plants   —       189,384       —  
Non-controlling interest in Global LLC (Class B units) issued in connection with the initial public offering   —       463,859       —  
Long-term debt assumed in connection with acquisitions   4,031       470,963       —  
Viability Gap Funding subsidies receivable   5,683       17,910       —  

Appendix Table A-1: Reg. G: TerraForm Global, Inc.
Reconciliation of Operating Revenues to Adjusted Revenue (in thousands)

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 (in thousands):

           
  3 Months Ended
December 31, 2016		   3 Months Ended
December 31, 2015		   Year Ended
December 31, 2016
Operating revenue, net   55,146     51,256     214,317
Amortization of favorable and unfavorable rate revenue contracts, net (a)   809     507     1,457
Adjusted revenue   55,955     51,763     215,774

(a) Represents net amortization of favorable and unfavorable rate revenue contracts included within operating revenues, net

Appendix Table A-2: Reg. G: TerraForm Global, Inc.
Reconciliation of Net Income (Loss) to Adjusted EBITDA to Cash Available for Distribution (in thousands)

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.

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.

We define “cash available for distribution” or “CAFD” as adjusted EBITDA of TerraForm Global, LLC as adjusted for certain cash flow items that we associate with our operations. Cash available for distribution represents adjusted EBITDA (i) minus deposits into (or plus withdrawals from) restricted cash accounts required by project financing arrangements to the extent they decrease (or increase) cash provided by operating activities, (ii) minus cash distributions paid to non-controlling interests in our renewable energy facilities, if any, (iii) minus scheduled project-level and other debt service payments and repayments in accordance with the related borrowing arrangements, to the extent they are paid from operating cash flows during a period, (iv) minus non-expansionary capital expenditures, if any, to the extent they are paid from operating cash flows during a period, (v) plus or minus operating items as necessary to present the cash flows we deem representative of our core business operations, with the approval of the audit committee.

The following table presents a reconciliation of net loss to Adjusted EBITDA to Cash Available for Distribution (in thousands):

  3 Months Ended 3 Months Ended Year Ended
 
Dec. 31, 2016 Dec. 31, 2015 Dec. 31, 2016  
       
Net income (60,076 ) (254,196 ) (78,498 )
Add/(Subtract):      
Interest expense, net 33,479   23,061   129,276  
Income tax expense (benefit) 3,642   4,426   8,682  
Depreciation, accretion and amortization expense 15,026   16,449   56,645  
General and administrative expense - G&A (b) 18,040   5,767   46,738  
Non-cash stock-based compensation 1,029   1,523   3,646  
Acquisition, formation and related cost (c) 645   10,846   10,872  
Provision for contingent loss on deposit for acquisitions (425 MW India Projects)  -    231,000    -   
Loss (gain) on foreign currency exchange, net (d) 17,064   7,286   (4,899 )
Loss (gain) on extinguishment of debt, net (127 ) 528   (5,857 )
Other net loss (income) (446 ) (4,434 ) (20,239 )
Other non-operating expenses (e) 4,681   (2,537 ) 4,681  
Adjusted EBITDA 32,957   39,718   151,047  
Add/(Subtract):      
Interest payment (7,620 ) (7,278 ) (119,942 )
Scheduled project level and other debt service and repayments (1,633 ) (1,243 ) (8,680 )
Cash distributions to non-controlling interests (242 ) (3,513 ) (320 )
Non-expansionary capital expenditures (3,269 ) (689 ) (6,737 )
Change in restricted cash (f) (5,718 ) (10,499 ) 9,515  
SunEdison interest support  -     -    41,208  
India viability gap funding receipt  -     -    8,707  
Economic interest (g)  -    16,647   3,531  
BioTherm dividend receipt 1,087    -    6,593  
Settlement gain/(loss) on foreign currency exchange related to operations (3,035 ) 3,000   (5,475 )
Other (including interest income received) (h) 5,922   1,846   13,087  
Cash available for distribution 18,449   37,989   92,533  
 


(b) In conjunction with the closing of the IPO in August 5, 2015, we entered into the MSA with SunEdison, pursuant to which SunEdison agreed to provide or arrange for other service providers to provide management and administrative services to us. No cash consideration was paid to SunEdison for these services for the quarter ended December 31, 2016, quarter ended December 31, 2015 or year ended December 31, 2016 and amount of general and administrative expense-affiliate in excess of the fees paid to SunEdison is treated as an addback in the reconciliation of net income (loss) to Adjusted EBITDA. In addition, non-operating items and other items incurred directly by TerraForm GLBL that we do not consider indicative of our core business operations will be treated as an addback in the reconciliation of net income (loss) to Adjusted EBITDA.  The Company’s normal operating general and administrative expenses, not paid by SunEdison, $9.7M for the 3 months ended December 31, 2016 and $19.5M for the year ended December 31, 2016 are not added back in the reconciliation of net income (loss) to Adjusted EBITDA.

(c) Represents transaction related costs, including affiliate acquisition costs, associated with the acquisitions completed during the year ended December 31, 2016 and year ended December 31, 2015 since such costs are considered to be paid for with financing sources. Additionally, includes 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.

(d) Includes settled and unsettled gains and losses on foreign currency hedges related to operating and investing activities.  The net loss relates primarily to losses on foreign currency hedges of certain planned acquisitions, and is partially offset by gains on foreign currency hedges associated with operations.

(e) Other charges and or non-operating items that we believe are not representative of our core business or future operating performance. For the 3 months ended December 31, 2016, includes $1.1M pre-dropdown construction related expense and $3.6M PP&E replacement value write-off (CAFD impact recorded in actual and or expected to be recorded in non-expansionary capital expenditures). For the 3 months ended December 31, 2015, items include post-dropdown related expenses incurred in 3Q 2015.

(f) Net change in restricted cash excludes impact of any foreign currency appreciation or depreciation during the period in 2016.

(g) Items include economic ownership in certain acquired operating assets, which accrued to TerraForm Global, Inc. prior to each acquisition close date.  For the 3 months ended December 31, 2015, $10.7M related to our acquisition of wind plants from FERSA for the period January 1, 2015 to December 31, 2015 and $5.9M related to our acquisition of wind plants from Renova for the period May 1, 2015 to September 18, 2015 and for the year ended December 31, 2016, $3.5M related to our acquisition of wind plants from Renova for the period May 1, 2015 to September 18, 2015.

(h) For the 3 months ended December 31, 2016, includes $6.4M liquidated damages cash receipt, net interest income $0.2M and net withholding tax/other ($0.7M).  For the year ended December 31, 2016, includes $6.4M liquidated damages cash receipt, $4.7M maintenance reserve, net interest income $2.3M and  net withholding tax/other ($0.3M)