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SEC Filings

10-Q
TERRAFORM GLOBAL, INC. filed this Form 10-Q on 11/08/2017
Entire Document
 

agreements with us, including the Interest Payment Agreement. As a result of the notice from SunEdison purporting to terminate the Interest Payment Agreement in July 2016, we do not expect SunEdison to perform under the Interest Payment Agreement going forward, including its obligation to pay to us up to an aggregate amount of $40.0 million in 2017, $30.0 million in 2018, $20.0 million in 2019 and $10.0 million in 2020, plus any interest due on any payment not remitted when due. See “Liquidity and Capital Resources - Interest Payment Agreement” above. We also expect to incur higher costs as we transition away from our historical dependence on SunEdison for corporate, management, administrative, project and other services and perform these services ourselves or hire substitute providers. See “Consolidated Results of Operations-Nine Months Ended September 30, 2017 Compared to Nine Months Ended September 30, 2016- General and Administrative Expense”. For additional information on these and other factors that may adversely affect the amount of cash available for distribution and, in turn, our ability to pay any dividend in future periods, see Item 1A. Risk Factors - Risks Inherent in an Investment in TerraForm Global, Inc. - We may not be able to pay comparable or growing cash dividends to holders of our Class A common stock in the future in our Annual Report on Form 10-K for the year ended December 31, 2016, which was filed on June 15, 2017. Please refer to the disclosures included elsewhere in this Quarterly Report on Form 10-Q for additional information about the adverse impact of the SunEdison Bankruptcy on us and other risks and uncertainties we face.
Global LLC is a holding company and will be dependent on receiving cash distributions from Global Operating LLC in order to fund quarterly distributions to its unit-holders, including the Company. Global Operating LLC is also a holding company and will in turn be dependent on receiving cash distributions from its project companies to fund any distributions to Global LLC. The ability of such project companies to make cash distributions to Global Operating LLC may be restricted by, among other things, the provisions of existing and future indebtedness or other financing agreements, applicable national, provincial, state and local corporation laws and other laws and regulations, such as capital controls that either restrict investment by foreign sources, restrict the transfer of capital to foreign recipients or both. Some of the jurisdictions in which the power plants in our portfolio are located impose material limitations on their ability to make cash distributions to Global Operating LLC.
We have not declared or paid a dividend since March 17, 2016. Under the Merger Agreement, we are restricted from declaring or paying dividends prior to the consummation of the Brookfield Transaction.
In addition, the covenants contained in the indenture governing the Senior Notes limit our ability to pay dividends and make certain investments and other restricted payments.
Cash Flow Discussion
We use traditional measures of cash flow, including net cash provided by operating activities, net cash provided by investing activities and net cash provided by financing activities to evaluate our periodic cash flow results.
Nine Months Ended September 30, 2017 Compared to Nine Months Ended September 30, 2016
The following table reflects the changes in cash flows for the comparative periods:
 
Nine Months Ended September 30,
 
 
(In thousands)
2017
 
2016
 
Change
Net cash used in operating activities
$
(44,939
)
 
$
(28,196
)
 
$
(16,743
)
Net cash provided by (used in) investing activities
10,852

 
(21,839
)
 
32,691

Net cash used in financing activities
$
(9,462
)
 
$
(183,994
)
 
$
174,532

Net Cash Used in Operating Activities
Net cash used in operating activities for the nine months ended September 30, 2017 was $44.9 million, compared to net cash used in operating activities for the nine months ended September 30, 2016 of $28.2 million. The increase in net cash used in operations of $16.7 million was primarily driven by increased general and administrative costs associated with operating as a stand-alone organization, including consulting, professional and legal fees and costs associated with shareholder litigation.
Net Cash Provided by (Used in) Investing Activities
Net cash provided by investing activities for the nine months ended September 30, 2017 was $10.9 million, compared to $21.8 million used in investing activities for the nine months ended September 30, 2016. The decrease in net cash used in investing activities of $32.7 million was driven by a decrease in capital expenditure of $63.6 million, as more projects were under development during 2016, and a decrease in cash paid for acquisitions of $32.1 million compared to the

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