TerraForm Power Reports Fourth Quarter and Full Year 2018 Results

TerraForm Power, Inc. (Nasdaq:TERP) (“TerraForm Power”) today reported
financial results for the quarter and year ended December 31, 2018.

Highlights

• Invested $1.2 billion to acquire Saeta Yield, S.A.U. (“Saeta”), a
  1,000 MW portfolio of high-quality wind and solar assets located
  primarily in Spain that established a scale operating platform in
  Europe
• Invested ~$28 million in organic growth initiatives with an average
  return on equity of ~19%
• Progressed efforts to execute long term service agreements with
  General Electric (“GE”) for North American wind fleet that are
  expected to lock in annual cost savings of ~$20 million and enhance
  revenues through performance guarantees backed by liquidated damages
• Completed solar performance improvement plan, expected to increase
  annual production by ~61 GWh and revenue by ~$11 million
• Issued $650 million in equity to fund the Saeta acquisition at
  attractive terms pursuant to backstop arrangement with affiliates of
  Brookfield Asset Management
• Raised ~$160 million of non-recourse debt in conjunction with the
  financing plan for the Saeta acquisition
• Achieved upgrade of corporate credit rating from Moody’s to Ba3
• Repriced $350 million Term Loan B yielding projected annual savings
  of approximately $2.5 million
• Declared a Q1 2019 dividend of $0.2014 per share, an increase of 6%
  from Q4 2018, and implying $0.8056 per share on an annual basis

“During 2018, we made significant progress building the foundation to
transform TerraForm Power into a fully-integrated renewable power
company that delivers a sustainable, total return in the low teens to
our shareholders,” said John Stinebaugh, CEO of TerraForm Power. “In
2019, we look forward to reaping the benefits from this foundation and
further investing in our repowerings and other growth opportunities.”

Results

			3 Months Ended 12/31/2018			3 Months Ended 12/31/2017			12 Months Ended 12/31/2018			12 Months Ended 12/31/2017
Generation (GWh)			2,214			1,852			8,088			7,167
Net Loss ($ in millions)			(30)			(142)			(153)			(236)
Earnings (loss) per Share1			$(0.07)			$(0.31)			$0.07			$(1.61)
Adjusted EBITDA2 ($ in millions)			170			110			590			438
Cash Available for Distribution (“CAFD”)2 ($ in millions)			27			26			126			88
per Share1,2			$0.13			$0.18			$0.69			$0.62

¹ Loss per share is calculated using a weighted average
diluted Class A common stock shares outstanding. CAFD per share is
calculated using a weighted average diluted Class A common stock and
weighted average Class B common stock shares outstanding. For the twelve
months ended December 31, 2018, weighted average diluted Class A common
stock shares outstanding totaled 182 million, including issuance of 61
million to affiliates (for the twelve months ended December 31, 2017,
this amount was 104 million). For the twelve months ended December 31,
2018, there were no weighted average Class B common stock shares
outstanding (for the twelve months ended December 31, 2017, this amount
was 38 million).
² Non-GAAP measures. See “Calculation
and Use of Non-GAAP Measures” and “Reconciliation of Non-GAAP Measures”
sections. Amounts in 2017 adjusted for sale of our UK and Residential
portfolios.

Financial Results

While we made much progress, 2018 was a transitional year for TerraForm
Power. During the course of the year, we accelerated our blade
inspection and repair program due to the Raleigh outage and to prepare
to turn over operations of our wind farms to GE. This resulted in a
significant increase in turbine downtime. In addition, we lost a
considerable amount of production from our solar fleet, which operated
at an availability of 91% in the first half of the year prior to the
initiation of our performance improvement plan.

For the full year 2018, TerraForm Power delivered Net Loss, Adjusted
EBITDA and cash available for distribution (“CAFD”) of $(153) million,
$590 million and $126 million, respectively. This represents a decrease
in Net Loss of $83 million, an increase in Adjusted EBITDA of $152
million and an increase in CAFD of $38 million, compared to 2017. The
improvement in our results primarily reflects two fiscal quarters of
contribution from Saeta. This contribution was offset by below average
North American wind production in part due to an especially strong El
Niño and challenging ERCOT pricing dynamics as a result of maintenance
of the transmission system, which reduced transfer capacity during peak
wind resource season. Thus far in 2019, power prices in the Texas
panhandle have improved as the transmission system has been fully
on-line.

In 2018, North American wind production was 10% below our LTA. Of the
shortfall, 4% can be attributed to poor wind resource, particularly in
Hawaii and the Midwest, 2% to abnormally high non-reimbursable
curtailment, 2% to the impact of the Raleigh-related outages and 2% to
downtime for blade inspections and repairs. Our solar and regulated
platforms performed in-line with expectations for the most part. In our
solar platform, significantly reduced curtailment in Chile due to
debottlenecking of the transmission grid offset low availability in the
first half of the year. In our regulated platform, lower than expected
solar resource was offset by wholesale electricity prices that averaged
10% higher than the prior year.

Liquidity Update

We continue to progress the execution of the $350 million non-recourse
debt component of our financing plan for the Saeta acquisition. We
expect to close our third and fourth project financings, raising
proceeds of ~$100 million and $90 million, respectively by the end of
the first half of 2019.

We also recently launched the refinancing of our wind facility in
Uruguay (~95 MW). Based on negotiations with lenders, we are planning on
extending the tenor, improving sizing parameters and reducing the
margin. Upon expected closing in the second quarter, we anticipate
upsizing the financing by approximately $60 million. To further support
corporate liquidity, we released $24 million in cash in December by
collateralizing reserve accounts with letters of credit at two wind
projects in North America. In addition, we launched the consent process
for certain Spanish projects to replace cash funded reserve accounts
with letters of credit.

Operations

To date, we have signed LTSAs with GE for 10 of 16 projects in our North
American wind fleet. In parallel, we have made significant progress
obtaining the required lender and tax equity partner consents and are in
negotiations with service providers for the early termination of
existing service contracts. GE is now fully operating six sites, and we
anticipate handing over the remaining sites in the first half of this
year.

Beginning in Q3 2018, we solicited proposals for LTSAs for 500 MW of our
Spanish wind fleet. The fleet is comprised of turbines manufactured by
Vestas, GE, Siemens and Gamesa. Based on proposals that we have
received, we are in the process of replacing the current operator of the
wind farms with the respective manufacturers. In December, we reached a
preliminary agreement with Vestas to extend the O&M contract for our
Uruguayan wind farms in exchange for an improvement in technical and
economic terms. Finally, we recently launched an RFP to improve the O&M
contract terms for our North American solar fleet. Thus far, there has
been very strong interest from large third-party providers. Our goal is
to lower our cost and improve the alignment of interests by implementing
production guarantees with penalties and bonuses based upon performance,
similar to our North American wind LTSAs. As a result of these
initiatives, we believe that we will be able to reduce annual O&M costs
by approximately $6 million, commencing in the second half of this year.

Finally, for our North American and European wind farms, we have
commenced the technical analysis and permitting to implement turbine
optimization technology, including GE’s Power Up offering. Upon
completion, we expect to increase production across our wind fleet and
generate approximately $2 million of incremental revenue.

Growth Initiatives

During the year, we continued to advance the 160 MW repowering of our
New York wind farms. We believe that there is strong support in the
state for investment in renewable power, particularly with Governor
Cuomo’s vision for a “Green New Deal” to achieve a 100% carbon-free
power grid by 2040. Through engagement with key government stakeholders,
including the Governor’s office, the Department of Public Service, and
the New York State Energy Research and Development Authority
(“NYSERDA”), we have built a strong base of support for a proposal that
would benefit our repowerings. In January 2019, NYSERDA expressed
support for a plan which includes a greater allocation of renewable
energy credits (“RECs”) for repowerings based on their projected
increase in production over the status quo, which was largely based on
our proposal. On a parallel path, there is a bill in the New York State
legislature that would require all electricity suppliers to procure RECs
from renewable generators built before 2015. While it is unclear how
these processes will unfold, it is encouraging that both the key
regulatory agencies and the state legislature are looking to create a
competitive market for RECs generated by repowered facilities.

In light of our progress to date, we have accelerated the pace of our
repowering efforts in New York. Since we can build these wind farms at a
40% discount to greenfield projects, we plan to replace the existing
Clipper turbines that have been derated and have significant operating
risk going forward, and we expect to utilize production tax credit
(“PTC”) safe-harbored turbines that would increase production by 25% to
30%, we believe we can earn returns above our target range of 9% to 11%
on equity based on the existing incentive regime and current wholesale
power market prices. If we are able to obtain additional incentives
and/or we are able to obtain premium pricing for renewable power, we
could achieve significant upside. Finally, we are in discussions with
Hawaiian Electric to evaluate options for repowering our Kahuku wind
facility on Oahu island. We believe that this project has an attractive
value proposition for all stakeholders. Hawaii has a very aggressive
goal of 100% carbon free power generation by 2040. This repowering would
increase production from Kahuku by 30%, and similar to New York, we
would reduce prospective operating cost and risk by replacing the
existing Clipper turbines.

During 2018, we invested ~$28 million in organic growth initiatives,
which we expect will earn a return on equity of approximately 19%.
Highlights include acquiring 6 MW of solar assets under a legacy right
of first offer for $4 million, investing $4 million to acquire minority
interests, including tax equity interests, investing $4 million in the
expansion of one of our solar farms and investing $11 million in our
battery energy storage project in Hawaii. Furthermore, in December 2018,
we invested $4 million to acquire a regulated 4 MW solar PV asset as
part of our consolidation strategy in the fragmented Spanish renewables
market.

Regulatory and Counterparty Update

In December 2018, the Spanish Government published a proposed law, which
provides the option of keeping the regulated return at its current level
of 7.4% for the next 12 years commencing 2020 for all renewable assets
in operation before September 2013. This applies to all of our Spanish
assets. In February 2019, following the failure to ratify its budget,
the Spanish government announced that new elections will be held on
April 28, 2019. Despite this uncertainty, we are optimistic that a
favorable outcome on the regulated return will be achieved, in light of
broad based support for renewable power amongst Spanish political
parties as well as the recommendation of a 7.1% regulated return put
forward by the CNMV, which is an independent Spanish state agency.
However, with the pending election, this could delay the timeline for
ratification of the law and could also result in a change to the
proposed regulated rate of return.

Facing billions of dollars in claims over deadly wildfires in
California, PG&E filed for bankruptcy on January 29, 2019. The
bankruptcy filing has not resulted in an event of default for any of our
projects with PG&E as an offtaker. At this stage, it is unclear whether
PG&E will be able to reject its existing renewable power contracts. Even
though our PG&E exposure is less than 1% of our portfolio, we have
joined with other industry players to advocate for continuing to honor
existing renewable power contracts.

Announcement of Quarterly Dividend

TerraForm Power today announced that, on March 13, 2019, its Board
declared a quarterly dividend with respect to TerraForm Power’s Class A
common stock of $0.2014 per share. The dividend is payable on March 29,
2019, to stockholders of record as of March 24, 2019. This dividend
represents TerraForm Power’s fifth consecutive quarterly dividend
payment under Brookfield’s sponsorship.

About TerraForm Power

TerraForm Power owns and operates a best-in-class renewable power
portfolio of solar and wind assets located primarily in the U.S. and
E.U., totaling more than 3,700 MW of installed capacity. TerraForm
Power’s goal is to acquire operating solar and wind assets in North
America and Western Europe. TerraForm Power is listed on the Nasdaq
stock exchange (Nasdaq: TERP). It is sponsored by Brookfield Asset
Management, a leading global alternative asset manager with more than
$350 billion of assets under management.

For more information about TerraForm Power, please visit: www.terraformpower.com.

Quarterly Earnings Call Details

Investors, analysts and other interested parties can access TerraForm
Power’s 2018 Full Year and Fourth Quarter Results as well as the Letter
to Shareholders and Supplemental Information on TerraForm Power’s
website at www.terraformpower.com.

The conference call can be accessed via webcast on March 15, 2019 at
9:00 a.m. Eastern Time at https://event.on24.com/wcc/r/1868899/535D3AA90E42BFE84348A1E0721D4251,
or via teleconference at 1-844-464-3938 toll free in North America. For
overseas calls please dial 1-765-507-2638, at approximately 8:50 a.m.
Eastern Time. A replay of the webcast will be available for those unable
to attend the live webcast.

Safe Harbor Disclosure

This communication contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.
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,” ”opportunities,”
“goal,” “guidance,” “outlook,” “initiatives,” “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
Power expects or anticipates will occur in the future are
forward-looking statements. They may include estimates of expected cash
available for distribution (CAFD), dividend growth, earnings, Adjusted
EBITDA, revenues, income, loss, capital expenditures, liquidity, capital
structure, margin enhancements, cost savings, 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, or services, or descriptions of
assumptions underlying any of the above. Forward-looking statements
provide TerraForm Power’s current expectations or predictions of future
conditions, events, or results and speak only as of the date they are
made. Although TerraForm Power 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: risks related to
weather conditions at our wind and solar assets; the willingness and
ability of counterparties to fulfill their obligations under offtake
agreements; price fluctuations, termination provisions and buyout
provisions in offtake agreements; our ability to enter into contracts to
sell power on acceptable prices and terms, including as our offtake
agreements expire; government regulation, including compliance with
regulatory and permit requirements and changes in tax laws, market
rules, rates, tariffs, environmental laws and policies affecting
renewable energy; our ability to compete against traditional utilities
and renewable energy companies; pending and future litigation; our
ability to successfully integrate projects we acquire from third
parties, including Saeta Yield S.A.U., and our ability to realize the
anticipated benefits from such acquisitions; our ability to implement
and realize the benefit of our cost and performance enhancement
initiatives, including the long-term service agreements with an
affiliate of General Electric; risks related to the ability of our
hedging activities to adequately manage our exposure to commodity and
financial risk; risks related to our operations being located
internationally, including our exposure to foreign currency exchange
rate fluctuations and political and economic uncertainties, the
regulated rate of return of renewable energy facilities in our Regulated
Wind and Solar segment, a reduction of which could have a material
negative impact on our results of operations; the condition of the debt
and equity capital markets and our ability to borrow additional funds
and access capital markets, as well as our substantial indebtedness and
the possibility that we may incur additional indebtedness in the future;
operating and financial restrictions placed on us and our subsidiaries
related to agreements governing indebtedness; our ability to identify or
consummate any future acquisitions, including those identified by
Brookfield; our ability to grow and make acquisitions with cash on hand,
which may be limited by our cash dividend policy; risks related to the
effectiveness of our internal control over financial reporting; and
risks related to our relationship with Brookfield, including our ability
to realize the expected benefits of the sponsorship.

The Company 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 our most recent Annual Report on Form 10-K and any
subsequent Quarterly Report on Form 10-Q, as well as additional factors
we may describe from time to time in other filings with the SEC. We
operate in a competitive and rapidly changing environment. New risks and
uncertainties emerge from time to time, and 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.

TERRAFORM POWER, INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per share
data)

			(Unaudited) Three Months Ended December 31,										Twelve Months Ended December 31,
			2018					2017					2018					2017
Operating revenues, net			$	213,093				$	135,539				$	766,570				$	610,471
Operating costs and expenses:
Cost of operations			74,752					42,331					220,907					150,733
Cost of operations - affiliate			—					7,377					—					17,601
General and administrative expenses			22,239					40,230					87,722					139,874
General and administrative expenses - affiliate			5,310					6,498					16,239					13,391
Acquisition costs			(6,856)					—					7,721					—
Acquisition costs - affiliate			6,925					—					6,925					—
Impairment of renewable energy facilities			—					—					15,240					1,429
Depreciation, accretion and amortization expense			102,660					60,681					341,837					246,720
Total operating costs and expenses			205,030					157,117					696,591					569,748
Operating income (loss)			8,063					(21,578)					69,979					40,723
Other expenses (income):
Interest expense, net			72,349					55,254					249,211					262,003
Loss on extinguishment of debt, net			1,480					81,099					1,480					81,099
Gain on sale of renewable energy facilities			—					—					—					(37,116)
Gain on foreign currency exchange, net			(6,736		)			(366		)			(10,993		)			(6,061		)
Loss on investments and receivables - affiliate			—					1,759					—					1,759
Other income, net			(6,972)					(135		)			(4,102)					(5,017		)
Total other expenses, net			60,121					137,611					235,596					296,667
Loss before income tax benefit			(52,058		)			(159,189		)			(165,617		)			(255,944		)
Income tax benefit			(21,707)					(17,385		)			(12,290)					(19,641)
Net loss			(30,351		)			(141,804		)			(153,327		)			(236,303		)
Less: Net (loss) income attributable to redeemable non-controlling interests			(5,893)					(8,668)					9,209					1,596
Less: Net loss attributable to non-controlling interests			(8,969)					(20,473		)			(174,916		)			(77,745		)
Net income (loss) income attributable to Class A common stockholders			$	(15,489	)			$	(112,663	)			$	12,380				$	(160,154	)
Weighted average number of shares:
Class A common stock – Basic and diluted			209,142					138,401					182,239					103,866
Earnings (Loss) earnings per share:
Class A common stock - Basic and diluted			$	(0.07	)			$	(0.82	)			$	0.07				$	(1.61	)
Dividends declared per share:
Class A common stock			$	0.19				$	1.94				$	0.76				$	1.94

TERRAFORM POWER, INC. AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
(In thousands, except share and per share
data)

			As of December 31,
			2018					2017
Assets
Current assets:
Cash and cash equivalents			$	248,524				$	128,087
Restricted cash			27,784					54,006
Accounts receivable, net			145,161					89,680
Prepaid expenses and other current assets			79,520					65,393
Due from affiliate			196					4,370
Total current assets			501,185					341,536
Renewable energy facilities, net, including consolidated variable interest entities of $3,064,675 and $3,273,848 in 2018 and 2017, respectively			6,470,026					4,801,925
Intangible assets, net, including consolidated variable interest entities of $751,377 and $823,629 in 2018 and 2017, respectively			1,996,404					1,077,786
Goodwill			120,553					—
Restricted cash			116,501					42,694
Other assets			125,685					123,080
Total assets			$	9,330,354				$	6,387,021
Liabilities, Redeemable Non-controlling Interests and Stockholders' Equity
Current liabilities:
Current portion of long-term debt and financing lease obligations, including consolidated variable interest entities of $64,251 and $84,691 in 2018 and 2017, respectively			$	464,332				$	403,488
Accounts payable and accrued expenses, including consolidated variable interest entities of $55,446 and $32,624 in 2018 and 2017, respectively			177,089					85,693
Other current liabilities			38,244					2,845
Deferred revenue			1,626					17,859
Due to affiliates			6,991					3,968
Total current liabilities			688,282					513,853
Long-term debt and financing lease obligations, less current portion, including consolidated variable interest entities of $885,760 and $833,388 in 2018 and 2017, respectively			5,297,513					3,195,312
Deferred revenue, less current portion			12,090					38,074
Deferred income taxes			178,849					24,972
Asset retirement obligations, including consolidated variable interest entities of $86,456 and $97,467 in 2018 and 2017, respectively			212,657					154,515
Other liabilities			172,546					37,923
Total liabilities			6,561,937					3,964,649
Redeemable non-controlling interests			33,495					34,660
Stockholders’ equity:
Class A common stock, $0.01 par value per share, 1,200,000,000 shares authorized, 209,642,140 and 148,586,447 shares issued in 2018 and 2017, respectively, and 209,141,720 and 148,086,027 shares outstanding in 2018 and 2017, respectively			2,096					1,486
Additional paid-in capital			2,391,435					1,872,125
Accumulated deficit			(359,603		)			(387,204		)
Accumulated other comprehensive income			40,238					48,018
Treasury stock, 500,420 shares in 2018 and 2017			(6,712		)			(6,712		)
Total TerraForm Power, Inc. stockholders’ equity			2,067,454					1,527,713
Non-controlling interests			667,468					859,999
Total stockholders’ equity			2,734,922					2,387,712
Total liabilities, redeemable non-controlling interests and stockholders' equity			$	9,330,354				$	6,387,021

TERRAFORM POWER, INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)

			Year Ended December 31,
			2018					2017
Cash flows from operating activities:
Net loss			$	(153,327	)			$	(236,303	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation, accretion and amortization expense			341,837					246,720
Amortization of favorable and unfavorable rate revenue contracts, net			38,767					39,576
Loss on extinguishment of debt, net			1,480					81,099
Gain on sale of renewable energy facilities			—					(37,116		)
Impairment of goodwill			—					—
Impairment of renewable energy facilities			15,240					1,429
Loss on disposal of property, plant and equipment			6,231					5,828
Amortization of deferred financing costs and debt discounts			11,009					23,729
Unrealized (gain) loss on interest rate swaps			(13,116		)			2,425
Loss on note receivable			4,510					—
Unrealized loss on commodity contract derivatives, net			4,497					6,847
Recognition of deferred revenue			(1,320		)			(18,238		)
Stock-based compensation expense			257					16,778
Unrealized (gain) loss on foreign currency exchange, net			(12,899		)			(5,583		)
Loss on investments and receivables - affiliate			—					1,759
Deferred taxes			(14,891		)			(19,911		)
Other, net			—					(1,166		)
Changes in assets and liabilities, excluding the effect of acquisitions and divestitures:
Accounts receivable			12,569					(2,939		)
Prepaid expenses and other current assets			(5,512		)			803
Accounts payable, accrued expenses and other current liabilities			(18,976		)			(42,736		)
Due to affiliates, net			3,023					3,968
Deferred revenue			—					199
Other, net			33,822					29
Net cash provided by operating activities			253,201					67,197
Cash flows from investing activities:
Cash paid to third parties for renewable energy facility construction and other capital expenditures			(22,445		)			(8,392		)
Proceeds from insurance reimbursement			1,543					—
Proceeds from the settlement of foreign currency contracts			47,590					—
Proceeds from sale of renewable energy facilities, net of cash and restricted cash disposed			—					183,235
Proceeds from energy state rebate and reimbursable interconnection costs			8,733					25,679
Other investing activities			—					5,750
Acquisitions of renewable energy facilities from third parties, net of cash and restricted cash acquired			(8,315		)			—
Acquisition of Saeta business, net of cash and restricted cash acquired			(886,104		)			—
Net cash (used in) provided by investing activities			$	(858,998	)			$	206,272
Cash flows from financing activities:
Proceeds from issuance of Class A common stock to affiliates			$	650,000				$	—
Proceeds from the Sponsor Line - affiliate			86,000					—
Repayments of the Sponsor Line - affiliate			(86,000		)			—
Repayment of the Old Senior Notes due 2023			—					(950,000		)
Proceeds from the Senior Notes due 2023			—					494,985
Proceeds from the Senior Notes due 2028			—					692,979
Proceeds from Term Loan			—					344,650
Term Loan principal repayments			(3,500		)			—
Old Revolver repayments			—					(552,000		)
Revolver draws			679,000					265,000
Revolver repayments			(362,000		)			(205,000		)
Proceeds from borrowings of non-recourse long-term debt			236,251					79,835
Principal payments and prepayments on non-recourse long-term debt			(259,017		)			(569,463		)
Debt premium prepayment			—					(50,712		)
Debt financing fees			(9,318		)			(29,972		)
Sale of membership interests and contributions from non-controlling interests in renewable energy facilities			7,685					6,935
Purchase of membership interests and distributions to non-controlling interests in renewable energy facilities			(29,163		)			(31,163		)
Net SunEdison investment			—					7,694
Due to/from affiliates, net			4,803					(8,869		)
Payment of dividends			(135,234		)			(285,497		)
Recovery of related party short swing profit			2,994					—
Other financing activities			—					1,085
Net cash provided by (used in) financing activities			782,501					(789,513		)
Net increase (decrease) in cash, cash equivalents and restricted cash			176,704					(516,044		)
Net change in cash, cash equivalents and restricted cash classified within assets held for sale			—					54,806
Effect of exchange rate changes on cash, cash equivalents and restricted cash			(8,682		)			3,188
Cash, cash equivalents and restricted cash at beginning of period			224,787					682,837
Cash, cash equivalents and restricted cash at end of period			$	392,809				$	224,787

Reconciliation of Non-GAAP Measures

This communication contains references to Adjusted Revenue, Adjusted
EBITDA, and cash available for distribution (“CAFD”), which are
supplemental Non-GAAP measures that should not be viewed as alternatives
to GAAP measures of performance, including revenue, net income (loss),
operating income or net cash provided by operating activities. Our
definitions and calculation of these Non-GAAP measures may differ from
definitions of Adjusted Revenue, Adjusted EBITDA and CAFD or other
similarly titled measures used by other companies. We believe that
Adjusted Revenue, Adjusted EBITDA and CAFD are useful supplemental
measures that may assist investors in assessing the financial
performance of the Company. None of these Non-GAAP measures should be
considered as the sole measure of our performance, nor should they be
considered in isolation from, or as a substitute for, analysis of our
financial statements prepared in accordance with GAAP, which are
available on our website at www.terraform.com,
as well as at www.sec.gov.
We encourage you to review, and evaluate the basis for, each of the
adjustments made to arrive at Adjusted Revenue, Adjusted EBITDA and CAFD.

Calculation of Non-GAAP Measures

We define Adjusted Revenue as operating revenues, net, adjusted for
non-cash items, including (i) unrealized gain/loss on derivatives, (ii)
amortization of favorable and unfavorable rate revenue contracts, net,
and (iii) an adjustment for wholesale market revenues to the extent
above or below the regulated price bands.

We define Adjusted EBITDA as net income (loss) plus (i) depreciation,
accretion and amortization, (ii) non-cash general and administrative
costs, (iii) interest expense, (iv) income tax (benefit) expense, (v)
acquisition related expenses, and (vi) certain other non-cash charges,
unusual or non-recurring items and other items that we believe are not
representative of our core business or future operating performance.

We define “cash available for distribution” or “CAFD” as Adjusted EBITDA
(i) minus cash distributions paid to non-controlling interests in our
renewable energy facilities, if any, (ii) minus annualized scheduled
interest and project level amortization payments in accordance with the
related borrowing arrangements, (iii) minus average annual sustaining
capital expenditures (based on the long-sustaining capital expenditure
plans) which are recurring in nature and used to maintain the
reliability and efficiency of our power generating assets over our
long-term investment horizon, (iv) plus or minus operating items as
necessary to present the cash flows we deem representative of our core
business operations.

As compared to the prior year periods, we revised our definition of CAFD
to (i) exclude adjustments related to deposits into and withdrawals from
restricted cash accounts, required by project financing arrangements,
(ii) replace sustaining capital expenditures payment made in the year
with the average annualized long-term sustaining capital expenditures to
maintain reliability and efficiency of our assets, and (iii) annualized
debt service payments. We revised our definition of CAFD as we believe
the revised definition provides a more meaningful measure for investors
to evaluate our financial and operating performance and ability to pay
dividends. For items presented on an annualized basis, we present actual
cash payments as a proxy for an annualized number until the period
commencing January 1, 2018.

Furthermore, to provide investors with the most appropriate measures to
assess the financial and operating performance of our existing fleet and
the ability to pay dividends in the future, we have excluded results
associated with our U.K. solar and Residential portfolios, which were
sold in 2017, from Adjusted Revenue, Adjusted EBITDA and CAFD reported
for all periods.

Use of Non-GAAP Measures

We disclose Adjusted Revenue because it presents the component of
operating revenue that relates to energy production from our plants, and
is, therefore, useful to investors and other stakeholders in evaluating
performance of our renewable energy assets and comparing that
performance across periods in each case without regard to non-cash
revenue items.

We disclose Adjusted EBITDA because we believe it is useful to investors
and other stakeholders as a measure of our financial and operating
performance and debt service capabilities. We believe Adjusted EBITDA
provides an additional tool to investors and securities analysts to
compare our performance across periods without regard to interest
expense, taxes and depreciation and amortization. Adjusted EBITDA has
certain limitations, including that it: (i) does not reflect cash
expenditures or future requirements for capital expenditures or
contractual liabilities or future working capital needs, (ii) does not
reflect the significant interest expenses that we expect to incur or any
income tax payments that we may incur, and (iii) does not reflect
depreciation and amortization and, although these charges are non-cash,
the assets to which they relate may need to be replaced in the future,
and (iv) does not take into account any cash expenditures required to
replace those assets. Adjusted EBITDA also includes adjustments for
goodwill impairment charges, gains and losses on derivatives and foreign
currency swaps, acquisition related costs and items we believe are
infrequent, unusual or non-recurring, including adjustments for general
and administrative expenses we have incurred as a result of the
SunEdison bankruptcy.

We disclose CAFD because we believe cash available for distribution is
useful to investors and other stakeholders in evaluating our operating
performance and as a measure of our ability to pay dividends. CAFD is
not a measure of liquidity or profitability, nor is it indicative of the
funds needed by us to operate our business. CAFD has certain
limitations, such as the fact that CAFD includes all of the adjustments
and exclusions made to Adjusted EBITDA described above.

The adjustments made to Adjusted EBITDA and CAFD for infrequent, unusual
or non-recurring items and items that we do not believe are
representative of our core business involve the application of
management judgment, and the presentation of Adjusted EBITDA and CAFD
should not be construed to infer that our future results will be
unaffected by infrequent, non-operating, unusual or non-recurring items.

In addition, these measures are used by our management for internal
planning purposes, including for certain aspects of our consolidated
operating budget, as well as evaluating the attractiveness of
investments and acquisitions. We believe these Non-GAAP measures are
useful as a planning tool because it allows our management to compare
performance across periods on a consistent basis in order to more easily
view and evaluate operating and performance trends and as a means of
forecasting operating and financial performance and comparing actual
performance to forecasted expectations. For these reasons, we also
believe these Non-GAAP measures are also useful for communicating with
investors and other stakeholders.

The following tables present a reconciliation of operating revenues to
Adjusted Revenue and net loss to Adjusted EBITDA and to CAFD and has
been adjusted to exclude asset sales in the U.K. and Residential
portfolios:

			Three Months Ended December 31						Twelve Months Ended December 31
(in millions)			2018			2017			2018			2017
Adjustments to reconcile operating revenues, net to Adjusted Revenue
Operating revenues, net			$213			$136			$767			$610
Unrealized (gain) loss on commodity contract derivatives, net (a)			8			8			4			7
Amortization of favorable and unfavorable rate revenue contracts, net (b)			10			10			39			40
2017 Incentive revenue recognition recast (n)			-			9			-			-
Regulated Solar and Wind price band adjustment (c)			2			-			12			-
Adjustment for asset sales			-			-			-			(15)
Other items (d)			2			(6)			2			(16)
Adjusted Revenue			$235			$157			$824			$626
Direct operating costs (e)			(66)			(47)			(235)			(188)
Settled FX gain (loss)			1			-			1			-
Adjusted EBITDA			$170			$110			$590			$438
Non-operating general and administrative expenses (f)			(11)			(29)			(49)			(97)
Stock-based compensation expense			-			(10)			-			(17)
Acquisition and related costs			-			-			(15)			-
Depreciation, accretion and amortization expense (g)			(112)			(71)			(380)			(287)
Impairment charges			-			(1)			(15)			(1)
Loss on extinguishment of debt			1			(81)			1			(81)
Gain on sale of U.K. renewable energy facilities			-			-			-			37
Interest expense, net			(72)			(55)			(249)			(262)
Income tax benefit			22			17			12			20
Adjustment for asset sales			-			-			-			10
Regulated Solar and Wind price band adjustment (c)			(2)			-			(12)			-
Management Fee (o)			(4)			(3)			(15)			(3)
Other non-cash or non-operating items (h)			(22)			(19)			(21)			7
Net loss			($30)			($142)			($153)			($236)
(in millions)			Three Months Ended December 31						Twelve Months Ended December 31
Reconciliation of Adjusted EBITDA to CAFD			2018			2017			2018			2017
Adjusted EBITDA			$170			$110			$590			$438
Fixed management fee (o)			(3)			(3)			(10)			(3)
Variable management fee (o)			(2)			(1)			(5)			(1)
Adjusted interest expense (i)			(72)			(51)			(256)			(234)
Levelized principal payments (j)			(60)			(24)			(173)			(99)
Cash distributions to non-controlling interests (k)			(6)			(7)			(26)			(30)
Sustaining capital expenditures (l)			(2)			(1)			(8)			(2)
Other (m)			2			3			14			19
Cash available for distribution (CAFD) (n)			$27			$26			$126			$88

a) 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.

b) Represents net amortization of purchase accounting related to
intangibles arising from past business combinations related to favorable
and unfavorable rate revenue contracts.

c) Represents Regulated Solar and Wind 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) Primarily represents recognized deferred revenue related to the
upfront sale of investment tax credits, insurance compensation for
revenue losses, and adjustments for SREC replacements.

e) In the three months ended December 31, 2017, reclassifies $1 million
wind sustaining capital expenditure into direct operating costs, which
will now be covered under long-term service contracts (“LTSA”) with
General Electric (“GE”). In the twelve months ended December 31, 2017,
reclassifies $6 million wind sustaining capital expenditure into direct
operating costs.

f) Pursuant to the historical management services agreement (the
“Management Services Agreement”) with SunEdison, Inc. (“SunEdison”),
SunEdison agreed to provide or arrange for other service providers to
provide management and administrative services to us in 2017. In the
twelve months ended December 31, 2017, we accrued costs incurred for
management and administrative services that were provided by SunEdison
under the Management Services Agreement that were not reimbursed by
TerraForm Power and were treated as an addback in the reconciliation of
net loss to Adjusted EBITDA. In addition, 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 restructuring, IT system arrangements, relocation of the
headquarters to New York, legal, advisory and contractor fees associated
with the bankruptcy of SunEdison and certain of its affiliates (the
“SunEdison bankruptcy”) and investment banking, and legal, third party
diligence and advisory fees associated with the Brookfield and Saeta
transactions, dispositions and financings. The Company’s normal 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):

$ in millions			Q4 2018			Q4 2017			YTD 2018			YTD 2017
Operating general and administrative expenses in Corporate			$9			$8			$29			$30

g) 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.

h) Represents other non-cash 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, loss on
investments and receivables with affiliate, loss on disposal of
renewable energy facilities, and wind sustaining capital expenditure
previously reclassified.

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			Q4 2018			Q4 2017			2018			2017
Interest expense, net			($72)			($55)			($249)			($262)
Amortization of deferred financing costs and debt discounts			3			4			11			24
Adjustment for asset sales			-			-			-			8
Other, primarily fair value changes in interest rate swaps and purchase accounting adjustments due to acquisition			(3)			1			(18)			(4)
Adjusted interest expense			($72)			($50)			($256)			($234)

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 ended December 31, 2018 and 2017 is as follows:

$ in millions			Q4 2018			Q4 2017			2018			2017
Distributions to non-controlling interests			($8)			($7)			($29)			($30)
Buyout of non-controlling interests			2			-			2			-
Adjustment for non-operating cash distributions			-			-			1			-
Cash distributions to non-controlling interests, net			($6)			($7)			($26)			($30)

l) Represents long-term average sustaining capex starting in 2018 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, major maintenance reserve
releases or (additions), releases or (postings) of collateral held by
counterparties of energy market hedges for certain wind plants, and
recognized SREC gains that are covered by loan agreements.

n) CAFD in 2017 was recast as follows to present the levelized principal
payments, adjusted interest expense, and incentive revenue recognition
recast to provide period to period comparisons that are consistent and
more easily understood. The 2017 incentive revenue was recast based on
an estimate in the same proportions as the 2018 phasing, which differs
from the actual 2017 phasing due to the adoption of the revenue
recognition standard. In the twelve months ended December 31, 2017, CAFD
remained $88 million as reported previously.

$ in millions			Q1 2017			Q2 2017			Q3 2017			Q4 2017			2017
Cash available for distribution (CAFD) before debt service reported			$104			$120			$106			$91			$421
Levelized principal payments			(25)			(25)			(25)			(24)			(99)
Adjusted interest expense			(60)			(61)			(63)			(50)			(234)
Estimated incentive revenue recognition recast			(1)			(9)			1			9			-
Cash available for distribution (CAFD), recasted			$18			$25			$19			$26			$88

(o) Represents management fee that is not included in Direct operating
costs.

View source version on businesswire.com: https://www.businesswire.com/news/home/20190314005946/en/

Source: Business Wire
(March 14, 2019 - 10:39 PM EDT)

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