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SEC Filings

10-Q
TERRAFORM GLOBAL, INC. filed this Form 10-Q on 06/27/2017
Entire Document
 

Three Months Ended March 31, 2017 Compared to Three Months Ended March 31, 2016
The following table reflects the changes in cash flows for the comparative periods:
 
Three Months Ended March 31,
 
 
 
(In thousands)
2017
 
2016
 
Change
Net cash used in operating activities
$
(13,186
)
 
$
(7,228
)
 
$
(5,958
)
Net cash provided by investing activities
1,084

 
24,114

 
(23,030
)
Net cash used in financing activities
(4,733
)
 
(22,829
)
 
18,096

Net Cash Used in Operating Activities
Net cash used in operating activities for the three months ended March 31, 2017 was $13.2 million, compared to net cash used in operating activities for the three months ended March 31, 2016 of $7.2 million. The decrease in net cash used in operations of $6.0 million was partly driven by cost of operations resulting from existing and acquired plants, as well as general and administrative costs.
Net Cash Provided by Investing Activities
Net cash provided by investing activities for the three months ended March 31, 2017 was $1.1 million compared to $24.1 million for the three months ended March 31, 2016. The decrease in net cash provided by investing activities of $23.0 million was driven by an increase in restricted cash of $42.6 million as less cash became available for use in the three months ended March 31, 2017 as compared to the three months ended March 31, 2016 and a decrease in capital expenditures from 2016 to 2017 of $29.9 million as more projects were under development during 2016.
Net Cash Used in Financing Activities
Net cash used in financing activities for the three months ended March 31, 2017 was $4.7 million and net cash used in financing activities for the three months ended March 31, 2016 was $22.8 million. The decrease in net cash used in financing activities of $18.1 million was driven by $35.4 million of cash used to repay the Senior Notes, $30.7 million of cash used to pay dividends and a net $7.4 million borrowed for project debt financing in the three months ended March 31, 2016, offset by cash provided by net parent investments in the amount of $46.0 million for the same period.

Off-Balance Sheet Arrangements
As of March 31, 2017, the Company did not have any off-balance sheet arrangements. As of December 31, 2016, the Company had one outstanding $0.4 million letter of credit issued in August 2016 under the Revolver in support of the Alto Cielo acquisition. This letter of credit was terminated on March 23, 2017 in connection with the Fifth Amendment.

Recently Issued Accounting Standards
See Item 1. Note 1 - Nature of Operations for information regarding recently issued accounting standards that are relevant to the Company.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
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 TerraForm Global, Inc. and its subsidiaries (together, the “Company”) expect or anticipate will occur in the future are forward-looking statements. They may include estimates of cash available for distribution to shareholders, earnings, revenues, capital expenditures, liquidity, capital structure, future growth, financing arrangements and other financial performance items (including future dividends per share), descriptions of management’s plans or objectives for future operations, products, services, or descriptions of assumptions
underlying any of the above. Forward-looking statements provide the Company’s current expectations or predictions of future conditions, events, or results and speak only as of the date they are made. Although the Company believes its expectations and assumptions are reasonable, it can give no assurance that these expectations and assumptions will prove to have been correct and actual results may vary materially.
Some of the important factors that could cause actual results to differ materially from our expectations, or cautionary statements, are listed below and further disclosed under the section entitled Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, which was filed on June 15, 2017:
risks related to the closing of the transactions contemplated by the merger agreement entered into with certain affiliates of Brookfield Asset Management Inc. (the “Brookfield Transaction”) and the consequences to the Company if the Brookfield Transaction is not consummated;
risks related to our relationship with SunEdison, Inc. (“SunEdison”);
risks related to the voluntary filing by SunEdison and certain of its domestic and international subsidiaries for protection under Chapter 11 of the U.S. Bankruptcy Code (the “SunEdison Bankruptcy”), including our transition away from reliance on SunEdison for management, corporate and accounting services, employees, critical systems and information technology infrastructure, and the operation, maintenance and asset management of our power plants, and the risk of recovery on our claims against SunEdison;
risks related to the settlement agreement entered into among the Company, SunEdison and certain of their respective affiliates to resolve, among other things, the intercompany claims between the Company and SunEdison in the SunEdison Bankruptcy;
risks related to events of default and potential events of default arising under (i) the indenture governing our 9.75% Senior Notes due 2022 (the “Senior Notes”) and/or (ii) project level financings and other agreements related to the SunEdison Bankruptcy, our failure to complete corporate and/or project level audits, SunEdison’s failure to perform its obligations under project level agreements, and/or related adverse effects on our business and operations (including the delay in the filing of our periodic reports with the SEC and other factors;
the condition of the debt and equity capital markets and our ability to borrow additional funds and access the capital markets, as well as our substantial indebtedness and the possibility that we may incur additional indebtedness going forward;
risks related to our failure to satisfy the requirements of Nasdaq, which could result in the delisting of our common stock;
our ability to integrate the power plants we acquire from third parties or otherwise and realize the anticipated benefits from such acquisitions;
our ability to distribute cash from our project companies to the United States;
fluctuations in exchange rates of the currencies in which we generate our revenue and incur our expenses;
our ability to complete our pending acquisition;
the willingness and ability of the counterparties to our offtake agreements to fulfill their obligations under such agreements;
price fluctuations and termination provisions related to our offtake agreements;
our ability to successfully identify, evaluate and consummate acquisitions;
risks related to conducting operations in emerging markets;
government regulation, including compliance with regulatory and permit requirements and changes in market rules, rates, tariffs, environmental laws and policies affecting renewable energy;
operating and financial restrictions placed on us and our subsidiaries related to agreements governing our indebtedness and other agreements of certain of our subsidiaries and project companies, including the indenture governing the Senior Notes;
our ability to compete against traditional and renewable energy companies;
hazards customary to the power production industry and power generation operations such as unusual weather conditions, catastrophic weather-related or other damage to facilities, unscheduled generation outages, maintenance or repairs, interconnection problems or other developments, environmental incidents, or electric transmission constraints and curtailment and the possibility that we may not have adequate insurance to cover losses as a result of such hazards;
the variability of wind and solar resources, which may result in lower than expected output of our renewable energy facilities;
our ability to expand into new business segments or new geographies;
departure of some or all of the employees providing services to us, particularly executive officers, key employees, or O&M or asset management personnel;
pending and future litigation;

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