Investors

PRESS RELEASES


<< Back
8point3 Enters into a Definitive Agreement to be Acquired by Capital Dynamics
02/5/18
Announces Fourth Quarter and Fiscal Year 2017 Results

SAN JOSE, Calif., Feb. 5, 2018 /PRNewswire/ -- 8point3 Energy Partners LP (NASDAQ:CAFD) ("8point3" or the "Partnership") today announced it has entered into an Agreement and Plan of Merger and Purchase Agreement (the "Merger Agreement") with CD Clean Energy and Infrastructure V JV, LLC, an investment fund managed by Capital Dynamics, Inc., and certain other co-investors (collectively, "Capital Dynamics"), pursuant to which Capital Dynamics will acquire 8point3 through an acquisition of 8point3 General Partner, LLC (the "General Partner"), the general partner of the Partnership (such transaction, the "GP Transfer"), all of the outstanding Class A shares in the Partnership and all of the outstanding common and subordinated units and incentive distribution rights in 8point3 Operating Company, LLC ("OpCo"), the Partnership's operating company (the "Proposed Transactions").

8point3 Energy Partners LP Logo

Pursuant to the Proposed Transactions, the Partnership's Class A shareholders and First Solar, Inc. (NASDAQ: FSLR) ("First Solar") and SunPower Corporation (NASDAQ: SPWR) ("SunPower" and, together with First Solar, the "Sponsors"), as holders of common and subordinated units in OpCo, will receive $12.35 per share or per unit in cash, plus a preset daily amount representing cash expected to be generated from December 1, 2017 through closing less any distributions received after the execution of the Merger Agreement and prior to closing. No consideration will be received by the Sponsors for the incentive distribution rights and the GP Transfer.

  • Proposed Transactions represent about $977 million in equity value and about $1.7 billion in enterprise value
  • Culmination of an extensive and competitive marketing process with more than 130 parties contacted
  • Committed debt financing secured by Capital Dynamics enhances certainty of closing the Proposed Transactions
  • Proposed Transactions unanimously approved by the Conflicts Committee of the Board of Directors of 8point3 (the "Conflicts Committee") and approved by the Board of Directors of the General Partner as well as the Boards of Directors of First Solar and SunPower
  • Proposed Transactions expected to close in second fiscal quarter or third fiscal quarter of 2018

The completion of the Proposed Transactions is subject to a number of closing conditions, including approval by a majority of the outstanding 8point3 public Class A shareholders, the expiration of the waiting period under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976, Federal Energy Regulatory Commission (FERC) Section 203 approval and the approval of the Committee on Foreign Investment in the United States (CFIUS). The Sponsors, which are the indirect owners of our General Partner and approximately 64.5 percent of OpCo's outstanding units, have executed an agreement to vote in support of the Proposed Transactions. Additionally, the Proposed Transactions are subject to certain other customary closing conditions.

"The Partnership announced today that the Sponsors' strategic review has concluded with the signing of a definitive agreement for the Partnership to be acquired by Capital Dynamics," said Chuck Boynton, CEO of 8point3. "This transaction is the culmination of a thorough and comprehensive strategic review process that determined that Capital Dynamics's offer was the most compelling proposal for all shareholders relative to other options, including the option to continue as a stand-alone company."

The Partnership was formed to be a growth-oriented limited partnership, owning, operating and acquiring solar energy generation projects, with the primary objective of generating predictable cash distributions that grow at a sustainable rate.  The Partnership intended to achieve this objective by acquiring high-quality solar assets primarily developed by its Sponsors.

For the last several quarters, the ability of the Partnership to execute on its growth strategy has been very limited.  The evolving nature of the solar industry has enabled the Sponsors' strategies of recycling capital faster and more efficiently by selling projects at a stage of construction and development that is earlier than best suited for the Partnership.  In addition, the Partnership's higher cost of capital and difficulty in accessing the capital markets on a consistent basis resulted in several replacements of projects under the Right of First Offer (ROFO) arrangements, as well as the Partnership later waiving its rights to acquire a number of ROFO projects from the Sponsors, with such waived projects subsequently acquired by third party buyers at purchase prices higher than those offered to the Partnership. These challenges, among others, present strategic and financial implications for the Partnership's operations and prospects as a stand-alone public company without the Sponsors, and its resulting competitive position in the market for renewable energy assets.

Goldman Sachs is acting as financial advisor to SunPower, and BofA Merrill Lynch is acting as financial advisor to First Solar, and Evercore is acting as financial advisor to the Conflicts Committee. Baker Botts L.L.P. is acting as legal counsel to SunPower, Skadden, Arps, Slate, Meagher & Flom, LLP is acting as legal counsel to First Solar and Richards, Layton & Finger P.A. is acting as legal counsel to the Conflicts Committee.

Fourth Quarter 2017 Results
The Partnership also announced its fourth quarter and fiscal year 2017 results.  8point3 reported revenue of $15.8 million and $70.1 million, net income of $8.8 million and $39.2 million, Adjusted EBITDA of $26.2 million and $121.3 million, and cash available for distribution (CAFD) of $37.8 million and $111.9 million, respectively.

The Board of Directors of the General Partner also declared a cash distribution for its Class A shares of $0.2802 per share for the fourth quarter, which was paid January 12, 2018 to shareholders of record on January 2, 2018.

The Partnership did not utilize its $125 million at-the-market (ATM) equity offering program during the fourth quarter of fiscal year 2017. 

Guidance
The Partnership's first quarter 2018 guidance is as follows: revenue of $9.0 million to $10.0 million, net income of $1.5 million to $3.5 million, Adjusted EBITDA of $7.5 million to $9.5 million, CAFD of $14.5 million to $16.5 million and a distribution of $0.2802 per share.  The Partnership's first quarter 2018 guidance includes approximately $3.0 million in expenses related to the Proposed Transactions and approximately $12.3 million tax benefit from the Tax Cuts and Jobs Act signed into law December 22, 2017.

During the pendency of the Proposed Transactions, we intend to make quarterly distributions of $0.2802 per share, which maintains the distribution level at the end of the fiscal year ended November 30, 2017.

8point3 will host a conference call for investors to discuss the Proposed Transactions at 2:30 p.m. Pacific Time, on February 5, 2018.  Investors can access the call by either dialing 517.623.4618 with the passcode 8point3 or listening to the webcast through 8point3's website at http://ir.8point3energypartners.com.  

About 8point3
8point3 Energy Partners LP (NASDAQ:CAFD) is a limited partnership formed by First Solar, Inc. and SunPower Corporation to own, operate and acquire solar energy generation projects. The Partnership owns interests in projects in the United States that generate long-term contracted cash flows and serve utility, commercial and residential customers. For more information about 8point3, please visit: www.8point3energypartners.com.

About Capital Dynamics
Capital Dynamics, Inc. is an independent, global asset manager, investing in private equity, private credit and clean energy infrastructure. We are client-focused, tailoring solutions to meet investor requirements. The Firm manages investments through a broad range of products and opportunities including separate account solutions, investment funds and structured private equity products. Capital Dynamics currently has $15 billion in assets under management and advisement.

For 8point3 Investors
This press release includes various "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. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward looking statements are statements of future expectations that are based on management's current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements expressing management's expectations, beliefs, estimates, forecasts, projections and assumptions. You can identify our forward looking statements by words such as "anticipate", "believe", "estimate", "expect", "forecast", "goals", "objectives", "outlook", "intend", "plan", "predict", "project", "risks", "schedule", "seek", "target", "could", "may", "will", "should" or "would" or other similar expressions that convey the uncertainty of future events or outcomes. In accordance with "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, these statements are accompanied by cautionary language identifying important factors, though not necessarily all such factors, which could cause future outcomes to differ materially from those set forth in forward-looking statements. In particular, expressed or implied statements concerning the Sponsors' ownership interest in the Partnership, expectations of plans, strategies, objectives and growth and anticipated financial and operational performance of the Partnership and its subsidiaries, including guidance regarding the Partnership's revenue, net income, adjusted EBITDA, cash available for distribution and distributions, other future actions, conditions or events such as the commercial operation dates of projects, future operating results or the ability to generate sales, income or cash flow or to make distributions are forward-looking statements. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Future actions, conditions or events and future results of operations may differ materially from those expressed in these forward-looking statements. Forward-looking statements speak only as of the date hereof, February 5, 2018, and we disclaim any obligation to update such statements for any reason, except as required by law. All forward-looking statements contained in this press release are expressly qualified in their entirety by the cautionary statements contained or referred to in this paragraph. Many of the factors that will determine these results are beyond our ability to control or predict. These factors include the risk factors described under "Risk Factors" in our 2017 Form 10-K filed with the Securities and Exchange Commission (the "SEC") on February 5, 2018. If any of those risks occur, it could cause our actual results to differ materially from those contained in any forward-looking statement. Because of these risks and uncertainties, you should not place undue reliance on any forward-looking statement.

Furthermore, among other risks and uncertainties, there can be no guarantee that the Proposed Transactions will be completed, or if they are completed, the time frame in which they will be completed. The Proposed Transactions are subject to the satisfaction of certain conditions contained in the Merger Agreement. The failure to complete the Proposed Transactions could disrupt certain of 8point3's plans, operations, business and employee relationships.

ADDITIONAL INFORMATION AND WHERE TO FIND IT
This press release contains information about the Proposed Transactions involving the Partnership and its subsidiaries and affiliates of Capital Dynamics. In connection with the Proposed Transactions, the Partnership will file with the SEC a proxy statement for the Partnership's shareholders.  The Partnership will mail the final proxy statement to its shareholders.  INVESTORS AND SHAREHOLDERS OF THE PARTNERSHIP ARE URGED TO READ THE PROXY STATEMENT AND OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PARTNERSHIP, CAPITAL DYNAMICS, THE PROPOSED TRANSACTIONS AND RELATED MATTERS.  Investors and shareholders of the Partnership will be able to obtain free copies of the proxy statement and other documents filed with the SEC by the Partnership through the website maintained by the SEC at www.sec.gov.  In addition, investors and shareholders of the Partnership will be able to obtain free copies of documents filed by the Partnership with the SEC from the Partnership's website, www.8point3energypartners.com, under the heading "SEC Filings" in the "Investor Relations" tab.

PARTICIPANTS IN THE SOLICITATION
The Partnership and our General Partner's directors and executive officers, and First Solar and SunPower and their respective directors and executive officers, are deemed to be participants in the solicitation of proxies from the shareholders of the Partnership in respect of the Proposed Transactions. Information regarding the directors and executive officers of our General Partner, First Solar and SunPower is contained in our 2017 Form 10-K filed with the SEC on February 5, 2018, First Solar's 2016 Form 10-K filed with the SEC on February 22, 2017 and SunPower's 2016 Form 10-K filed with the SEC on February 17, 2017, respectively. Free copies of these documents may be obtained from the sources described above.

Non-GAAP Financial Information
This earnings release includes certain financial measures that are not defined under U.S. generally accepted accounting principles (GAAP), including Adjusted EBITDA and CAFD. Such non-GAAP financial measures should be considered only as supplemental to, and not as superior to, financial measures prepared in accordance with GAAP. We reconcile these non-GAAP financial measures to the most directly comparable financial measure prepared in accordance with GAAP in the tables that accompany this release. In the introduction to such reconciliation tables that accompany this release, we disclose the reasons why we believe our use of the non-GAAP financial measures in this release provides useful information. Please read "Non-GAAP Financial Measures" below for further details on our use of non-GAAP financial measures.

8point3 Energy Partners LP

Consolidated Balance Sheets

(In thousands, except share data)



November 30, 2017


November 30, 2016

Assets




Current assets:




Cash and cash equivalents

$

13,528



$

14,261


Accounts receivable and short-term financing receivables, net

5,572



5,401


Prepaid and other current assets1

16,990



15,745


Total current assets

36,090



35,407


Property and equipment, net

713,284



720,132


Long-term financing receivables, net

76,201



80,014


Investments in unconsolidated affiliates

768,258



475,078


Other long-term assets

15,372



24,432


Total assets

$

1,609,205



$

1,335,063


Liabilities and Equity




Current liabilities:




Accounts payable and other current liabilities1

$

4,394



$

23,771


Short-term debt and financing obligations1

2,229



1,964


Deferred revenue, current portion

1,025



870


Total current liabilities

7,648



26,605


Long-term debt and financing obligations1

689,847



384,436


Deferred revenue, net of current portion

123



308


Deferred tax liabilities

37,318



30,733


Asset retirement obligations

14,970



13,448


Other long-term liabilities

1,945




Total liabilities

751,851



455,530


Redeemable noncontrolling interests

17,346



17,624


Equity:




Class A shares, 28,088,673 and 28,072,680 issued and outstanding as of November 30, 2017 and November 30, 2016, respectively

249,363



249,138


Class B shares, 51,000,000 issued and outstanding as of November 30, 2017 and November 30, 2016




Accumulated earnings

4,595



22,440


Total shareholders' equity attributable to 8point3 Energy Partners LP

253,958



271,578


Noncontrolling interests

586,050



590,331


Total equity

840,008



861,909


Total liabilities and equity

$

1,609,205



$

1,335,063





1The Partnership has related-party balances for transactions made with the Sponsors and tax equity investors. Related-party balances recorded within "Prepaid and other current assets" in the consolidated balance sheets were $0.7 million and $0.9 million as of November 30, 2017 and November 30, 2016, respectively. Related-party balances recorded within "Accounts payable and other current liabilities" in the consolidated balance sheets were $0.1 million and $19.7 million due to Sponsors as of November 30, 2017 and November 30, 2016, respectively, and $0.9 million and $1.0 million due to tax equity investors as of November 30, 2017 and November 30, 2016, respectively. Related-party balances recorded within "Short-term debt and financing obligations" and "Long-term debt and financing obligations" in the consolidated balance sheets were $2.2 million and $47.4 million, respectively, as of November 30, 2017, and $2.0 million and zero, respectively, as of November 30, 2016.

 

8point3 Energy Partners LP

Consolidated Statements of Operations

(In thousands, except per share data)



Year Ended


Eleven Months Ended


November 30, 2017


November 30, 2016


November 30, 2015

Revenues:






Operating revenues1

$

70,089



$

61,198



$

10,660


Total revenues

70,089



61,198



10,660


Operating costs and expenses1:






Cost of operations

8,450



6,959



2,624


Cost of operations—SunPower, prior to IPO





468


Selling, general and administrative

9,732



7,003



10,702


Depreciation and accretion

28,070



22,792



4,291


Acquisition-related transaction costs

56



2,271



212


Total operating costs and expenses

46,308



39,025



18,297


Operating income (loss)

23,781



22,173



(7,637)


Other expense (income):






Interest expense

23,497



12,081



1,860


Interest income

(1,198)



(1,203)



(1,470)


Other expense (income)

(971)



(1,518)



12,536


Total other expense, net

21,328



9,360



12,926


Income (loss) before income taxes and equity in earnings of unconsolidated investees

2,453



12,813



(20,563)


Income tax provision

(6,587)



(18,244)



(12,503)


Equity in earnings of unconsolidated investees

43,379



18,341



9,055


Net income (loss)

39,245



12,910



(24,011)


Less: Predecessor loss prior to IPO on June 24, 2015





(20,095)


Net income (loss) subsequent to IPO

39,245



12,910



(3,916)


Less: Net income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests

27,838



(14,191)



(22,642)


Net income attributable to 8point3 Energy Partners LP Class A shares

$

11,407



$

27,101



$

18,726


Net income per Class A share:






Basic

$

0.41



$

1.27



$

0.94


Diluted

$

0.41



$

1.27



$

0.94


Distributions per Class A share:

$

1.04



$

0.91



$

0.16


Weighted average number of Class A shares:






Basic

28,079



21,420



20,002


Diluted

43,579



36,920



35,034





1The Partnership has related-party activities for transactions made with the Sponsors. Related party transactions recorded within "Operating revenues" in the consolidated statement of operations were $5.2 million, $5.2 million and $2.3 million in fiscal 2017, 2016 and 2015, respectively. Related party transactions recorded within "Operating costs and expenses" in the consolidated statement of operations were $8.4 million, $7.0 million and $1.4 million in fiscal 2017, 2016 and 2015, respectively. Related party transactions recorded within "Other expense (income)" in the consolidated statement of operations were $0.3 million in fiscal 2017, and zero in both fiscal 2016 and 2015.

 

8point3 Energy Partners LP

Consolidated Statements of Cash Flows

(In thousands)



Year Ended


Eleven Months Ended


November 30, 2017


November 30, 2016


November 30, 2015

Cash flows from operating activities:






Net income (loss)

$

39,245



$

12,910



$

(24,011)


Adjustments to reconcile net income (loss) to net cash provided by operating activities:






Depreciation, amortization and accretion

28,500



22,880



4,291


Unrealized loss (gain) on interest rate swap

(706)



(1,508)



611


Interest expense on financing obligation





1,193


Loss on termination of financing obligation





6,477


Reserve for rebates receivable





1,338


Distributions from unconsolidated investees

43,379



18,075



6,766


Equity in earnings of unconsolidated investees

(43,379)



(18,341)



(9,055)


Deferred income taxes

6,585



18,242



12,491


Share-based compensation

225



224



112


Amortization of debt issuance costs

983



626




Other, net

131



370



328


Changes in operating assets and liabilities:






Accounts receivable and financing receivable, net

3,801



1,481



46


Cash grants receivable





146


Rebates receivable





(121)


Solar power systems to be leased under sales type leases





197


Prepaid and other assets

7,827



(1,435)



(4,258)


Deferred revenue

(21)



(59)



(118)


Accounts payable and other liabilities

2,098



1,171



5,403


Net cash provided by operating activities

88,668



54,636



1,836


Cash flows from investing activities:






Cash provided by (used in) purchases of property and equipment, net

(346)



1,167



(223,688)


Cash paid for acquisitions

(317,558)



(284,797)




Distributions from unconsolidated investees

36,908



11,629



4,672


Net cash used in investing activities

(280,996)



(272,001)



(219,016)


Cash flows from financing activities:






Proceeds from issuance of Class A shares, net of issuance costs



113,325



393,750


Proceeds from issuance of bank loans, net of issuance costs

284,008



86,567



461,192


Proceeds from issuance of Short-Term Note to First Solar





1,964


Repayment of bank loans

(27,000)





(264,143)


Repayment of Short-Term Note to First Solar

(1,964)






Capital contributions from SunPower



9,973



341,694


Capital distributions to SunPower





(3,163)


Cash distribution to First Solar at IPO





(283,697)


Cash distribution to SunPower at IPO





(371,527)


Cash distribution to SunPower for the remaining purchase price payments of initial projects





(202,680)


Cash distribution to Class A shareholders

(29,252)



(20,241)



(3,146)


Cash distributions to Sponsors as OpCo unitholders

(53,132)



(12,271)




Cash contributions from noncontrolling interests and redeemable noncontrolling interests - tax equity investors

28,388



3,671



203,717


Cash distributions to noncontrolling interests and redeemable noncontrolling interests - tax equity investors

(9,453)



(6,179)




Net cash provided by financing activities

191,595



174,845



273,961


Net increase (decrease) in cash and cash equivalents

(733)



(42,520)



56,781


Cash and cash equivalents, beginning of period

14,261



56,781




Cash and cash equivalents, end of period

$

13,528



$

14,261



$

56,781


Non-cash transactions:






Assignment of financing receivables to a third-party financial institution

$



$



$

1,279


Property and equipment acquisitions funded by liabilities



19,538




Property and equipment additions funded by SunPower post-IPO





50,683


Settlement of related party payable by capital contribution from tax equity investor



46,837




Predecessor liabilities assumed by SunPower





48,588


Accrued distributions to noncontrolling interests and redeemable noncontrolling interests - tax equity investors

909



975




Issuance by OpCo of OpCo common units, subordinated units and IDRs for acquisition of interests in First Solar Project Entities





408,820


Issuance by OpCo of promissory note to First Solar in connection with the Stateline Acquisition

49,631






Supplemental disclosures:






Cash paid for interest, net of amounts capitalized

22,000



11,525



437


Non-GAAP Financial Measures

Our management uses a variety of financial metrics to analyze our performance. The key financial metrics we evaluate are Adjusted EBITDA and CAFD.

Adjusted EBITDA.

We define Adjusted EBITDA as net income (loss) plus interest expense, net of interest income, income tax provision, depreciation, amortization and accretion, including our proportionate share of net interest expense, interest income, income taxes and depreciation, amortization and accretion from our unconsolidated affiliates that are accounted for under the equity method, and share-based compensation and transaction costs incurred for our acquisitions of projects; and excluding the effect of certain other non-cash or non-recurring items that we do not consider to be indicative of our ongoing operating performance such as, but not limited to, mark to market adjustments to the fair value of derivatives related to our interest rate hedges. Adjusted EBITDA is a non-U.S. GAAP financial measure. This measurement is not recognized in accordance with U.S. GAAP and should not be viewed as an alternative to U.S. GAAP measures of performance. The U.S. GAAP measure most directly comparable to Adjusted EBITDA is net income (loss). The presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

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 borrowers' ability to service debt. In addition, Adjusted EBITDA is used by our management for internal planning purposes including certain aspects of our consolidated operating budget and capital expenditures. It is also used by investors to assess the ability of our assets to generate sufficient cash flows to make distributions to our Class A shareholders.

However, Adjusted EBITDA has limitations as an analytical tool because it does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments, does not reflect changes in, or cash requirements for, working capital, does not reflect significant interest expense or the cash requirements necessary to service interest or principal payments on our outstanding debt or cash distributions on tax equity, does not reflect payments made or future requirements for income taxes, and excludes the effect of certain other cash flow items, all of which could have a material effect on our financial condition and results of operations. Adjusted EBITDA is a non-U.S. GAAP measure and should not be considered an alternative to net income (loss) or any other performance measure determined in accordance with U.S. GAAP, nor is it indicative of funds available to fund our cash needs. In addition, our calculations of Adjusted EBITDA are not necessarily comparable to EBITDA as calculated by other companies. Investors should not rely on these measures as a substitute for any U.S. GAAP measure, including net income (loss).

Cash Available for Distribution.

We use CAFD, which we define as Adjusted EBITDA less equity in earnings of unconsolidated affiliates, cash interest paid, cash income taxes paid, maintenance capital expenditures, cash distributions to noncontrolling interests and principal amortization payments on any project-level indebtedness plus cash distributions from unconsolidated affiliates, indemnity payments and promissory notes from Sponsors, test electricity generation, cash proceeds from sales-type residential leases, state and local rebates and cash proceeds for reimbursable network upgrade costs. Our cash flow is generated from distributions we receive from OpCo each quarter. OpCo's cash flow is generated primarily from distributions from the Project Entities. As a result, our ability to make distributions to our Class A shareholders depends primarily on the ability of the Project Entities to make cash distributions to OpCo and the ability of OpCo to make cash distributions to its unitholders.

We believe CAFD is useful to investors in evaluating our operating performance because securities analysts and other interested parties use such calculations as a measure of our ability to generate sustainable distributions. In addition, when evaluating a potential acquisition, our management team projects expected CAFD to determine whether to make such acquisition. The U.S. GAAP measure most directly comparable to CAFD is net income (loss).

However, CAFD has limitations as an analytical tool because it does not capture the level of capital expenditures necessary to maintain the operating performance of our projects, does not include changes in operating assets and liabilities and excludes the effect of certain other cash flow items, all of which could have a material effect on our financial condition and results from operations. CAFD is a non-U.S. GAAP measure and should not be considered an alternative to net income (loss) or any other performance measure determined in accordance with U.S. GAAP, nor is it indicative of funds available to fund our cash needs. In addition, our calculations of CAFD are not necessarily comparable to CAFD as calculated by other companies. Investors should not rely on these measures as a substitute for any U.S. GAAP measure, including net income (loss).

The following table presents a reconciliation of net income (loss) to Adjusted EBITDA and CAFD:

8point3 Energy Partners LP



Reconciliation of Net Income (Loss) to Adjusted EBITDA and CAFD



(Unaudited)







Three Months Ended


Year Ended


Eleven Months Ended

(in thousands)

November 30, 2017


August 31, 2017


November 30, 2016


November 30, 2017


November 30, 2016


November 30, 2015

Net income (loss)

$

8,760



$

28,662



$

4,250



$

39,245



$

12,910



$

(24,011)


Add (Less):












Interest expense, net of interest income

5,739



5,756



2,664



22,299



10,870



390


Income tax provision (benefit)

(1,273)



5,012



2,963



6,587



18,244



12,503


Depreciation, amortization and accretion

7,302



7,327



6,556



28,500



22,880



4,291


Share-based compensation

57



56



56



225



224



112


Acquisition-related transaction costs (1)

6



19



10



56



2,271



212


Selling, general and administrative (2)











6,372


Loss on cash flow hedges related to Quinto interest rate swaps











5,448


Loss on termination of residential financing obligations











6,477


Unrealized loss (gain) on derivatives (3)

(357)



284



(972)



(706)



(1,508)



611


Add proportionate share from equity method investments (4)












Interest expense, net of interest income

(351)



141



(375)



89



(524)



(165)


Depreciation, amortization and accretion

6,335



6,224



3,142



25,007



10,825



5,212


Adjusted EBITDA

$

26,218



$

53,481



$

18,294



$

121,302



$

76,192



$

17,452


Less:












Equity in earnings of unconsolidated affiliates, net with (4) above (5)

(16,076)



(29,687)



(7,604)



(68,475)



(28,642)



(14,102)


Cash interest paid (6)

(5,838)



(5,930)



(3,000)



(22,195)



(12,176)



(4,502)


Maintenance capital expenditures

(25)



(177)



(50)



(202)



(50)




Cash distributions to non-controlling interests

(2,693)



(2,599)



(2,412)



(9,453)



(6,142)




Short-Term Note (9)







(1,964)






Add:












Cash distributions from unconsolidated affiliates (7)

33,820



17,169



14,054



80,287



30,129



10,902


Indemnity payment from Sponsors (8)

50



41



279



183



10,316



3,900


Short-Term Note (9)











1,964


Test electricity generation (10)



1





33



421



5,576


Cash proceeds from sales-type residential leases, net (11)

765



746



647



2,877



2,548



2,730


State and local rebates (12)









299




Cash proceeds for reimbursable network upgrade costs (13)

1,626



125



222



9,504



222




CAFD

$

37,847



$

33,170



$

20,430



$

111,897



$

73,117



$

23,920




(1)

Represents acquisition-related financial advisory, legal and accounting fees associated with ROFO Project interests purchased and expected to be purchased by us in the future.



(2)

Represents the allocation of the Predecessor's corporate overhead in selling, general and administrative expenses. Costs incurred by the Partnership as a result of the strategic evaluation of the Proposed Transactions totaling $2.1 million in fiscal 2017 was not excluded to calculate Adjusted EBITDA and CAFD.



(3)

Represents the changes in fair value of interest rate swaps that were not designated as cash flow hedges.



(4)

Represents our proportionate share of net interest expense, depreciation, amortization and accretion from our unconsolidated affiliates that are accounted for under the equity method.



(5)

Equity in earnings of unconsolidated affiliates represents the earnings from the Solar Gen 2 Project, the North Star Project, the Lost Hills Blackwell Project, the Henrietta Project, and the Stateline Project and is included on our consolidated statements of operations.



(6)

Represents cash interest payments related to OpCo's senior secured credit facility and the Stateline Promissory Note. The interest payments for the Quinto Credit Facility on the Predecessor's combined carve-out financial statements were excluded as they were funded by one of our Sponsors.



(7)

Cash distributions from unconsolidated affiliates represent the cash received by OpCo with respect to its 49% interest in the Solar Gen 2 Project, the North Star Project, the Lost Hills Blackwell Project, and the Henrietta Project and its 34% interest in the Stateline Project.



(8)

Represents indemnity payments from the Sponsors owed to OpCo in accordance with the Omnibus Agreement.



(9)

Represents the Short-Term Note, a promissory note from First Solar.



(10)

For fiscal 2017, test electricity generation represents the sale of electricity that was generated prior to COD by the Macy's Maryland Project. For fiscal 2016, test electricity generation represents the sale of electricity that was generated prior to COD by the Kingbird Project. For fiscal 2015, test electricity generation represents the sale of electricity that was generated prior to COD by the Quinto Project, the RPU Project, the UC Davis Project and the Macy's California Project. Solar power systems may begin generating electricity prior to COD as a result of the installation and interconnection of individual solar modules, which occurs over time during the construction and commission period. The sale of test electricity generation is accounted for as a reduction in the asset carrying value rather than operating revenue prior to COD, even though it generates cash for the related Project Entity.



(11)

Cash proceeds from sales-type residential leases, net, represent gross rental cash receipts for sales-type leases, less sales-type revenue and lease interest income that is already reflected in net income (loss) during the period. The corresponding revenue for such leases was recognized in the period in which such lease was placed in service, rather than in the period in which the rental payment was received, due to the characterization of these leases under U.S. GAAP.



(12)

State and local rebates represent cash received from state or local governments for owning certain solar power systems. The receipt of state and local rebates is accounted for as a reduction in the asset carrying value rather than operating revenue.



(13)

Cash proceeds from a utility company related to reimbursable network upgrade costs associated with the Quinto Project and the Kingbird Project.

 

8point3 Energy Partners LP

FY 2018 Q1 Guidance

Reconciliation of Net Income to Adjusted EBITDA and CAFD


(in millions)


Low


High

Net income


$

1.5



$

3.5


Add (Less):





Interest expense, net of interest income


6.1



6.1


Income tax benefit


(13.7)



(13.7)


Depreciation, amortization and accretion


7.2



7.2


Share-based compensation


0.1



0.1


Add proportionate share from equity method investments (1):





Depreciation, amortization and accretion


6.3



6.3


Adjusted EBITDA


$

7.5



$

9.5


Less:





Equity in earnings of unconsolidated affiliates, net with (1)


(6.2)



(6.2)


Cash interest paid


(6.1)



(6.1)


Cash distributions to non-controlling interests


(2.1)



(2.1)


Add:





Cash distributions from unconsolidated affiliates


17.6



17.6


Cash proceeds for reimbursable network upgrade costs


3.1



3.1


Cash proceeds from sales-type residential leases


0.7



0.7


CAFD


$

14.5



$

16.5




(1)

Represents our proportionate share of net interest expense, depreciation, amortization and accretion from our unconsolidated affiliates that are accounted for under the equity method.

 

 

Cision View original content with multimedia:http://www.prnewswire.com/news-releases/8point3-enters-into-a-definitive-agreement-to-be-acquired-by-capital-dynamics-300593750.html

SOURCE 8point3 Energy Partners LP