Update Photo. Business Update. October 7, 2015

Transcription

1 Update Photo Business Update October 7, 2015

2 Safe Harbor With the exception of historical information, the matters disclosed in this presentation are forward-looking statements. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Potential risks and uncertainties are described in SunEdison s filings with the Securities and Exchange Commission (SEC), including Forms 10-K and Forms 10-Q, as well as other filings with the SEC, in addition to the risks and uncertainties described on page 3 of this presentation. These forward-looking statements represent the SunEdison s judgment as of the date of this presentation. SunEdison disclaims, however, any intent or obligation to update these forward-looking statements, except as required by law. This communication shall not constitute an offer to sell or the solicitation of an offer to buy securities nor shall there be any sale of these securities in any state in which such solicitation or sale would be unlawful prior to registration or qualification of these securities under the laws of any such state. P. 2

3 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 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 SunEdison expects or anticipates will occur in the future are forward-looking statements. They may include estimates of expected cash available for distribution (CAFD), earnings, revenues, capital expenditures, liquidity, capital structure, future growth, and other financial performance items (including future dividends per share), descriptions of management s plans or objectives for future operations, products, or services, or descriptions of assumptions underlying any of the above. Forward-looking statements provide SunEdison s current expectations or predictions of future conditions, events, or results and speak only as of the date they are made. Although SunEdison 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. 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, delays or unexpected costs during the completion of projects under construction; regulatory requirements and incentives for production of renewable power; operating and financial restrictions under agreements governing indebtedness; the condition of capital markets and our ability to borrow additional funds and access capital markets; the impact of foreign exchange rate fluctuations; the ability to compete against traditional and renewable energy companies; challenges inherent in constructing and maintaining renewable energy projects; the success of ongoing research and development efforts; the ability to successfully integrate the businesses of acquired companies and realize the benefits of such acquisitions; and hazards customary to the power production industry and power generation operations, such as unusual weather conditions and outages. Furthermore, any dividends are subject to available capital, market conditions, and compliance with associated laws and regulations. Many of these factors are beyond SunEdison s control. SunEdison disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions, factors, or expectations, new information, data, or methods, future events, or other changes, except as required by law. The foregoing list of factors that might cause results to differ materially from those contemplated in the forward-looking statements should be considered in connection with information regarding risks and uncertainties which are described in SunEdison s Form 10-K for the fiscal year ended December 31, 2014, as well as additional factors it may describe from time to time in other filings with the Securities and Exchange Commission. You should understand that it is not possible to predict or identify all such factors and, consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties. P. 3

4 Opening Remarks Ahmad Chatila, CEO P. 4

5 Opening Remarks Asset ownership creates highest long-term value for shareholders Value per watt is 3x vs. selling to 3rd parties Driven by long term, low risk high quality cash flows and residuals Devco business model optimization due to vehicle dislocation More warehouses and 3rd party sales vs. prior base plan Opex plan accelerated by 2 years Gross margin improvement Revised 2016 MW Guidance of 3,300 MW to 3,700 MW Significant tailwinds continue within renewable space Renewables competitive without incentives in many geographies Large underserved markets globally SunEdison continues to hold leading position to capitalize on trends Robust liquidity position Strong, supportive business partners: suppliers, financiers Fundamentals Remain Strong P. 5

6 Market Dislocation in the YieldCo & MLP space TERP & SUNE Stock Performance vs. Peers / MLPs / GPs Stock return (52 weeks ending Oct 5) 60% 40% Yieldcos Sponsors IPPs GPs MLPs (median return of -34%) 20% 0% 20% 40% 60% TERP 80% SUNE 100% SUNE Heavily Impacted with Shift in MLP/Yieldco Investor Sentiment P. 6

7 Significant Value to Retain Optionality of Long-Term Ownership 3x of value in ownership Ownership Value Upfront Margin High Quality Assets 20-year contracted cash flows No fuel risk Strong counterparty credit rating Residual value Less frictional costs Servicing Use of warehouses and JV s Preserves optionality for future drops Capital efficient for SUNE Long-Term Ownership Drives Shareholder Value P. 7

8 Serviced Addressable Market: GWs (GW) Average YoY Growth: 30% Wind Entry In RSC Entry In Utility-Scale C&I RSC Off-Grid Wind Source: IHS, GWEC ; based on annual growth rate for Represents MW-ac for wind assets and MW-dc for solar assets. 2. Capacity factor of wind greater than solar. P. 8

9 Business Outlook Brian Wuebbels, CFO P. 9

10 Preliminary 3Q15 Devco Cash Walk (Ex TERP and GLBL) ($M) 1,800 1,600 1,400 1, Wacker 21 Pasadena , ,380 1, Q Ending Cash Pref Stock Semi Selldown Margin Loan GLBL Equity Materials Other 3Q Ending Cash Strong Liquidity Position at Devco Note: Includes cash committed for construction. Amounts unaudited as of 10/7/15.. P. 10

11 Opex Outlook: 2015 Capital Markets Day vs. Current Outlook ($M) Total Opex Includes Acquisitions Outlook at CMD 2016 New Outlook $.17/Watt in 2016 vs. $.22/Watt in 2017 at 2015 CMD 1. OPEX outlook shown on a cash basis and excludes one-timers. New 2016 annual run rate as of Q Includes OPEX from previously announced acquisitions. P. 11

12 2016 Guidance Total MW 3,300 3,700 3 rd Party 800 1,000 Retained 1 2,500 2,700 Note: Guidance includes MW for completed projects and percentage of completion for projects under construction. 1. Includes 685 MWs from Dominion JV and MWs in warehouses P. 12

13 2016 Plan: Visibility into Capital Needs ($B) Visibility for Capital in place for 2016 Use of 3 rd parties, warehouses, JV partnerships TERP/GLBL not required for offtake if dislocation continues rd Party JV Warehouse Capacity TERP/GLBL Total 2016 Capital Required 1. 3 rd Party number include previously announced 4 Brothers and 3 Cedars JVs with Dominion 2. Warehouse Capacity include $1 billion First Reserve, $ 1 billion WSIP, and $600 million JPM leveraged at 80% debt 3. Capital Needs based on Midpoint of 2016 Plan of 3500 MW P. 13

14 Unlevered Project IRRs Under Development (GW) OECD Countries Non-OECD Countries Average: 10% Average: 13% < 7 % 7-8 % 8-9 % 9-10 % % % % % % >15% High Quality Projects Under Development 1. Estimated project IRRs through year end 2016 P. 14

15 Development Company Stand-alone Cash Creation $M unless specified Quarterly FY 2016 MW Delivered 875 3,300 to 3,700 Dev/Services Gross Margin (Cash) ($.35/w) $306 $1,155 to $1,295 OPEX (Cash) ($.17/w) ($150) ($600) EBITDA (Cash) $156 $555 to $695 CAFD Retained 1 $99 $378 to $408 Value of CAFD Retained 2 $1,116 $4,250 to $4,590 DevCo Cash flow Generation in Gross annualized unlevered CAFD 2. Value of CAFD Retained assumes 16.7 Multiple or 6% yield on levered CAFD P. 15

16 SunEdison Debt Summary by Due Date ($M) $1,600 $1,200 $1,287 $800 $460 $450 $450 $400 $169 $258 $300 $300 $ Term Loan Margin Loan Converts Seller's Note Vivint Conv. $M FY 2016 Cash EBITDA $625 SUNE Interest 1 ($149) Vehicle Interest Support 2 ($109) Vehicle Dividends + IDRs $127 Cash Flow Pre-WC $494 Business Cash Flows Provide Full Coverage of Near Term Debt 1. SUNE interest includes interest on recourse debt and the preferred equity but excludes 2016 term loan repayment 2. Vehicle Support includes interest on TERP and GLBL senior notes and GLBL Orosi project interest support. Schedule for support is as follows: $68M; $40M; $30M; $19M; $10M; $0. P. 16

17 Questions & Answers P. 17

18 Appendix P. 18

19 SunEdison s Consolidated Debt Overview Recourse Obligations Letter of Credit Facility Convertible Senior Notes 2020 Convertible Senior Notes 2021 Convertible Senior Notes 2022 Convertible Senior Notes 2023 Convertible Senior Notes 2025 Convertible Senior Notes 2017 Margin Loan 2020 Exchangeable Notes 2016 Term Loan Pre-, Construction, and Term-debt Other Credit Facilities Non-Recourse Obligations First Reserve Warehouse Term Loan TERP Private Warehouse Term Loan SMP Ltd. Credit Facility Pre-, Construction, and Term-debt Financing Leaseback Other Credit Facilities Recourse Obligations Revolver 2, Senior Notes Senior Notes 2 Non-Recourse Obligations Project Debt Recourse Obligations Revolver 2, Senior Notes 2 Non-Recourse Obligations Project Debt 1. Letter of Credit Facility indebtedness is not a balance sheet item 2. Non-recourse to SunEdison 3. $725mm capacity as of 9/30/15 4. $485mm capacity as of 9/30/15 P. 19

20 Warehouse and Partnership Summary First Reserve Warehouse TerraForm Private Warehouse West Street Infrastructure Partners (WSIP) Warehouse 1 J.P. Morgan Asset Management Strategic Equity Partnership 2 Aggregate Facility Size $1.5bn ($500mm equity and $1bn debt) $525mm ($245mm equity and $280mm debt) $1bn ($300mm equity and $700mm debt) Option to expand facility by up to $1bn to a total of $2bn Up to $650mm (equity only) Clients advised by Equity Investors Asset Type Construction and Operating Assets Operating Assets Construction and Operating Assets Construction and Operating Assets Technology Solar & Wind Wind Solar & Wind Solar & Wind Dropdown Agreement Forward Sale and Purchase Agreement or Call Right Call Right Call Right Call Right Tenor 5 Years 7 Years 5 Years Undisclosed 1. SunEdison currently has commitment letters executed with both the equity investor and the lenders for this warehouse. 2. SunEdison currently has a non-binding letter of intent executed with the equity investor for this partnership. P. 20

21 Definitions EBITDA: 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 indicative of 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 EBITDA should not be construed as an inference that future results will be unaffected by unusual or non-recurring items. We believe 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, EBITDA is used by our management for internal planning purposes and for analysis of performance. Gross Annualized Unlevered CAFD: 12 months of post-completion project operating cash flow, calculated as project revenue, inclusive of cash received directly or indirectly due to governmental incentive programs (including but not limited to feed-in-tariffs, and sale or allocation of solar renewable energy credits, production tax credits, etc.), less project operating expenses but prior to interest payments for project level debt and payments to tax equity investors. Gross Annualized Unlevered CAFD is an operational measure that 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. We believe Gross Annualized Unlevered CAFD 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, Gross Annualized Unlevered CAFD is used by our management team for internal planning purposes and for analysis of performance. Backlog: A project that qualifies for pipeline that has an associated executed PPA, other executed off-take agreement, such as a feed-in-tariff, or an un-executed, alternative energy off-take agreement (i.e. hedge) in advanced stages of negotiation and in a liquid market where the off-take agreement is readily available. P. 21

22 Definitions Cash Available for Distribution (CAFD): net cash provided by operating activities as adjusted for certain other cash flow items that we associate with our operations. CAFD is a supplemental non-gaap measure. 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. 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 and for analysis of performance. Delivered MW: The aggregate of Retained MW and 3rd Party Sales MW for the period.. MW: All references to watts (e.g., Megawatts, Gigawatts, MW, GW, etc.) refer to measurements of direct current, or DC, with respect to solar generation assets, and measurements of alternating current, or AC, with respect to wind generation assets. Represents the nameplate production capacity. Nameplate capacity for solar projects represents the maximum generating capacity at standard test conditions of a facility. Nameplate capacity for wind facilities represents the manufacturer s maximum nameplate generating capacity of each turbine multiplied by the number of turbines at a facility. Pipeline: A project with either a signed or awarded PPA or other energy offtake agreement or that has achieved each of the following three items: a) site control, b) an identified interconnection point with an estimate of the interconnection costs, and c) a determination that there is a reasonable likelihood that an energy offtake agreement will be signed. P. 22

23 Definitions Retained MW: Represents the number of MW for completed projects and percentage of completion for projects under construction during that period that are associated with the expected receipt of ongoing cash flow due to control or contract with SunEdison, a subsidiary, or affiliate. Retained Annualized Unlevered CAFD: Gross Annualized Unlevered CAFD associated with Retained MW. Retained Annualized Unlevered CAFD is an operational measure that 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. We believe Retained Annualized Unlevered CAFD 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, Retained Annualized Unlevered CAFD is used by our management team for internal planning purposes and for analysis of performance. 3rd Party Sales MW: Represents the number of MW for completed projects and percentage of completion for projects under construction during the period that will be sold to third parties. Also included are cash sales through channel partners including installations, kits, modules, solar water pumps, and other residential and small commercial equipment and system sales. Under Construction: A project within pipeline and backlog, in various stages of completion, which is not yet operational. P. 23