SunEdison Reports Second Quarter 2014 Results

                SunEdison Reports Second Quarter 2014 Results

PR Newswire

MARYLAND HEIGHTS, Mo., Aug. 7, 2014

MARYLAND HEIGHTS, Mo., Aug. 7, 2014 /PRNewswire/ --

Second Quarter 2014 Highlights:

  oGAAP revenue of $646.2 million and GAAP EPS of ($0.16)
  oNon-GAAP revenue of $557.5 million and non-GAAP EPS of $0.12
  oSolar Energy non-GAAP revenue related to 54 MW of solar energy systems
  o164 MW of solar energy systems retained on the balance sheet and 475 MW
    under construction at quarter end
  oSolar project pipeline grew to 4.3 GW and backlog increased to 1.1 GW at
    end of quarter
  oRaised $600 million through a convertible senior note offering
  oCompleted SunEdison Semiconductor initial public offering and related
    transactions

SunEdison, Inc. (NYSE: SUNE) today announced financial results for the 2014
second quarter.

"The second quarter was a transformational period for SunEdison. Our teams
superbly executed multiple complex financing initiatives while keeping our
core business on track," said Ahmad Chatila, Chief Executive Officer. "Among
the milestones achieved were the successful completion of the SunEdison
Semiconductor IPO and the placement of convertible senior notes, both of which
give us additional flexibility to accelerate growth. In addition, just after
quarter-end we successfully completed the TerraForm Power IPO which we expect
to be a key driver for lower cost of capital. With these accomplishments and
our growing project pipeline, we believe we are increasingly well positioned
to succeed in this rapidly growing and dynamic market."

Key summary financial results for the 2014 second quarter are set out in the
following table. Financial results include consolidation of SunEdison
Semiconductor Limited ("SSL"). See the financial statement tables at the end
of this press release for a reconciliation of all GAAP to non-GAAP financial
measures.

                                                                         US$ Millions except for EPS
Financial    2Q'14                  1Q'14               2Q'13            Qtr/Qtr                 Yr/Yr
Highlights:
GAAP:
                                                                                                        
Net Sales    $ 646.2     ^(1)       $ 546.5     ^(4)    $ 401.3     ^(6) $ 99.7             18%  $ 244.9           61%
                                                                                  or                     or
Gross Margin   4.0     % ^(1)         8.6     % ^(4)      12.3    % ^(6)            (460)   bps           (830)   bps
%
Operating    $ (108.7)   ^(1)       $ (78.1)    ^(4)    $ (46.6)    ^(6)            $(30.6)                $(62.1)
Loss
Net Loss     $ (41.2)    ^(1)(2)(3) $ (613.6)   ^(4)(5) $ (102.9)   ^(6)            $572.4                 $61.7
EPS          $ (0.16)    ^(1)(2)(3) $ (2.31)    ^(4)(5) $ (0.45)    ^(6)            $2.15                  $0.29
Non-GAAP:
                                                                                                         
Net Sales    $ 557.5                $ 577.6             $ 491.6          $ (20.1) or        (3)% $ 65.9            13%
                                                                                                         or
Gross Margin   4.6     %              3.8     %           5.9     %                 80      bps           (130)   bps
%
Operating    $ (108.9)              $ (103.6)           $ (67.0)                    $(5.3)                 $(41.9)
Loss
Net Income   $ 33.7      ^(3)       $ (64.2)            $ (42.4)                    $97.9                  $76.1
(Loss)
EPS          $ 0.12      ^(3)       $ (0.25)            $ (0.19)                    $0.37                  $0.31
Cash Flow:                                                                                       $36.1
Capital      $ 74.9                 $ 20.1              $ 38.8                      $54.8
Expenditures
Cash Flow
from         $ (78.6)               $ (215.2)           $ (86.4)                    $136.6                 $7.8
Operations
Free Cash    $ (80.2)               $ (110.8)           $ 4.4                       $30.6                  $(84.6)
Flow
 Note:
Table
unaudited
(1) Includes $16.6 million, or EPS of $0.05 related to previously deferred GAAP revenue.
(2) Includes $47.6 million, or EPS of $(0.18), related to non-cash fair value adjustments for our convertible notes
related derivatives.
(3) Includes $145.7 million, or EPS of $0.54, related to a gain from a favorable fair value adjustment on a previously
held equity method investment.
(4) Includes $14.3 million, or EPS of $0.05, related to previously deferred GAAP revenue.
(5) Includes $451.8 million, or EPS of $(1.69), related to non-cash fair value adjustments for our convertible notes
related derivatives.
(6) Includes $11.7 million, or EPS of $0.03, related to previously deferred GAAP revenue.

Cash Flow
Operating cash used in the 2014 second quarter was $78.6 million and was
primarily the result of changes in working capital and continued investment to
grow the business.

Free cash flow was ($80.2) million and was largely influenced by solar energy
project financing and solar project construction activities, acquisitions, and
capital expenditures. See the reconciliation of free cash flow in the
financial statement tables at the end of this press release.

Capital expenditures were $74.9 million in the 2014 second quarter, of which
$22.3 million was incurred in the Semiconductor Materials segment and $32.1
million was related to capital investments in SMP Ltd. ("SMP"), a joint
venture with Samsung Fine Chemicals which we own and operate. SMP was
consolidated in May 2014, after the transactions related to SSL's IPO.

During the 2014 second quarter, the company issued $600 million aggregate
principal amount 0.25% convertible senior notes due 2020 in a private
placement offering. The company received net proceeds of $534.3 million in
the offering, after the net cost of the associated call spread overlay. Also
during the 2014 second quarter, the company completed the initial public
offering of 8,280,000 ordinary shares of SSL, our semiconductor materials
business. All of the shares in the offering were sold by SSL, including
1,080,000 ordinary shares sold to the underwriters pursuant to the
underwriters' exercise in full of their overallotment option. The net
proceeds of the offering were $98.2 million after associated fees and
expenses. The shares of SSL began trading on May 22, 2014 under the ticker
symbol "SEMI" on the NASDAQ Global Select Market. As of June 30, 2014,
SunEdison, Inc. held a 56.8% interest in SSL.

Concurrent with the SSL IPO, Samsung and related entities purchased 9,625,578
ordinary shares of SSL through a private placement at a price of $13.00 per
share, resulting in net cash proceeds of $87.3 million after deducting private
placement commissions.

On May 28, 2014, the company acquired from Samsung Fine Chemicals an
approximate 35% interest in SMP, our polysilicon manufacturing joint venture,
for $140.7 million. Prior to the completion of the SSL IPO, SunEdison
contributed this approximate 35% interest in SMP to SSL. As a result, on a
consolidated basis, the company owns an approximate 85% interest in SMP, and
thus SMP's results are included in the company's consolidated financial
statements from May 28, 2014.

Subsequent to the 2014 second quarter close, on July 23, 2014, the company
completed the initial public offering of TerraForm Power, Inc. ("TerraForm").
TerraForm issued 23,074,750 Class A shares at a price of $25.00 per share.
All of the shares in the offering were sold by TerraForm, including 3,009,750
Class A shares sold to the underwriters pursuant to the underwriters' exercise
in full of their overallotment option. SunEdison received net proceeds of
approximately $159.2 million, after deducting a bridge loan repayment,
underwriting discounts, structuring fee commissions and related offering
costs. The shares of TerraForm began trading on the NASDAQ Global Select
Market on July 18, 2014 under the ticker symbol "TERP." As of August 6, 2014,
SunEdison, Inc. held a 63.9% interest in TerraForm.

The company ended the 2014 second quarter with cash and cash equivalents of
$954.7 million and cash committed for construction projects of $176.1 million,
for a total of $1,130.8 million. 

Earnings per Share
Second quarter 2014 GAAP earnings per share was ($0.16) and non-GAAP earnings
per share was $0.12. Second quarter 2014 GAAP included a benefit of $145.7
million, or $0.54 per share net of tax, related to a gain from a favorable
fair value adjustment on our previously held equity method investment in SMP,
partially offset by a charge of $47.6 million, or ($0.18) per share net of
tax, related to non-cash fair value adjustments for our convertible notes
related derivatives primarily resulting from the increase in the company's
share price from April 1, 2014 to May 29, 2014.

Segment Results
Key segment financial results for the 2014 second quarter are set out in the
following table. Financial results include full consolidation of SSL. See
the financial statement tables at the end of this press release for a
reconciliation of all GAAP to non-GAAP financial measures.

                                                                              US$ Millions
Segment       2Q'14           1Q'14          2Q'13          Qtr/Qtr           Yr/Yr
Summary
Net Sales:
Solar Energy  $ 431.6    ^(1) $ 340.4   ^(2) $ 161.2   ^(3) $ 91.2   or 27  % $ 270.4  or 168  %
GAAP
Solar Energy  $ 342.9         $ 371.5        $ 251.5        $ (28.6) or (8) % $ 91.4   or 36   %
Non-GAAP
Semiconductor $ 214.6         $ 206.1        $ 240.1        $ 8.5    or 4   % $ (25.5) or (11) %
Materials
Operating
(Loss)
Income:
Solar Energy  $ (109.7)  ^(1) $ (61.2)  ^(2) $ (38.5)  ^(3) $(48.5)           $(71.2)
GAAP
Solar Energy  $ (109.9)       $ (86.7)       $ (58.9)       $(23.2)           $(51.0)
Non-GAAP
Semiconductor $ 1.0           $ (16.9)       $ (8.1)        $17.9             $9.1
Materials
 Note: Table unaudited
(1) Includes $16.6 million, or EPS of $0.05 related to previously deferred GAAP revenue.
(2) Includes $14.3 million, or EPS of $0.05, related to previously deferred GAAP revenue.
(3) Includes $11.7 million, or EPS of $0.03, related to previously deferred GAAP revenue.

Solar Energy: GAAP
Solar Energy segment GAAP revenue was higher year-over-year, driven by higher
solar project volume and higher sales of solar materials. Solar Energy
segment GAAP revenue for the 2014 second quarter and 2013 second quarter
included $16.6 million and $11.7 million, respectively, of previously deferred
solar project revenue. GAAP revenue was higher sequentially, driven by higher
solar project sales volume and higher energy sales. In the 2014 second
quarter, Solar Energy recognized GAAP revenue from solar projects totaling 90
MW, up from 78 MW in the 2014 first quarter and 14 MW in the 2013 second
quarter. During the 2014 second quarter, 164 MW of additional projects were
constructed and held on the balance sheet.

Operating loss was higher year-over-year and sequentially due primarily to
lower solar energy system gross margin and higher operating expenses related
to growth initiatives, costs related to the SSL and TerraForm IPOs, and costs
associated with holding rather than selling retained projects.

Solar Energy: Non-GAAP
Solar Energy segment non-GAAP revenue was higher year-over-year and lower
sequentially. Year-over-year non-GAAP revenue increased due to higher solar
project and solar materials sales. Sequentially, non-GAAP revenue was lower
primarily as a result of lower solar project sales, only partially offset by
higher energy sales. Non-GAAP revenue resulted from 54 MW of solar projects
sold in the 2014 second quarter, compared to non-GAAP revenue from 76 MW in
the 2014 first quarter and 51 MW in the 2013 second quarter. Of the 54 MW of
non-GAAP revenue in the 2014 second quarter, 49 MW were direct sales and 5 MW
were sale-leaseback transactions.

Solar Energy segment non-GAAP operating loss increased year-over-year and
sequentially. Higher operating expenses related to growth initiatives and
costs associated with holding rather than selling retained projects
contributed to the lower year-over-year results. Relative to the 2014 first
quarter, operating loss increased due to investment in growth initiatives and
expenses related to financial transactions during the quarter.

Solar Project Pipeline, Backlog & Construction
The Solar Energy segment ended the 2014 second quarter with a project pipeline
of 4.3 GW, up 684 MW compared to the prior quarter and up 1,387 MW from the
year ago period. Backlog at June 30, 2014 was 1.1 GW, up 99 MW from the prior
quarter. A solar project is classified as "pipeline" where SunEdison has a
signed or awarded PPA or other energy off-take agreement or has achieved each
of the following three items: site control, an identified interconnection
point with an estimate of the interconnection costs, and an executed energy
off-take agreement or the determination that there is a reasonable likelihood
that an energy off-take agreement will be signed. A solar project is
classified as "backlog" if there is an associated executed PPA or other energy
off-take agreement, such as a feed-in-tariff. There can be no assurance that
all pipeline or backlog projects will convert to revenue because in the
ordinary course of our development business some fall-out is typical and
certain projects will not be built.

As of June 30, 2014, 475 MW of the pipeline was under construction, compared
to 463 MW as of March 31, 2014 and 200 MW as of June 30, 2013. Of the
projects under construction, we expect to retain a majority on the balance
sheet. "Under construction" refers to projects within pipeline and backlog,
in various stages of completion, which are not yet operational.

Semiconductor Materials
Semiconductor Materials revenue for the 2014 second quarter was lower
year-over-year and higher compared to the prior quarter. Second quarter 2014
revenue was lower year-over-year due to lower average selling prices resulting
from softness in the semiconductor industry, partially offset by a more
favorable sales mix. Revenue was higher sequentially, driven by improved
volume and sales mix and higher average selling prices.

Compared to the 2013 second quarter, segment operating profit increased
sequentially and year-over-year due to lower polysilicon costs, improved
manufacturing efficiencies and lower expenses. Second quarter 2014 operating
profit included a $3.4 million net favorable restructuring reversal. 

Outlook
The company provided the following key metrics for the 2014 third quarter and
revised metrics for full-year 2014. Assuming no significant worldwide
economic issues in these periods, the company expects the following:

For the third quarter 2014:

  oSolar energy systems total non-GAAP sales volume in the range of 70 MW to
    80 MW
  oSolar energy systems MW retained on the balance sheet between 200 MW and
    230 MW
  oSolar energy systems MW completed between 270 MW and 310 MW
  oFully developed solar energy systems average project pricing between
    $2.60/watt and $3.00/watt

For the full year 2014:

  oSolar energy systems total non-GAAP sales volume in the range of 290 MW to
    320 MW
  oSolar energy systems MW retained on the balance sheet between 710 MW and
    830 MW
  oSolar energy systems MW completed between 1,000 MW and 1,150 MW
  oFully developed solar energy systems average project pricing between
    $2.50/watt and $3.00/watt

Use of Non-GAAP Measures
Management has determined that certain non-GAAP metrics for the Solar Energy
segment presented herein are the key metrics that will help investors
understand the ultimate income and near-term cash flows generated by our Solar
Energy segment. These non-GAAP measures and metrics include deferrals
required under GAAP real estate and lease accounting for some of SunEdison's
direct sales and or its sale-leaseback transactions as well as related tax
impacts. Management has also determined that the non-GAAP measure of "free
cash flow" is useful to help investors better understand the capital intensity
of our business, including our project financing operations. For a complete
description of our non-GAAP measures, see the non-GAAP reconciliation tables
below.

Conference Call
SunEdison will host a conference call today, August 7, 2014, at 8:00 a.m. ET
to discuss the company's 2014 second quarter results and related business
matters. A live webcast will be available on the company's web site at
www.SunEdison.com, or by dialing (612) 338-1040 at least five minutes prior to
the scheduled start time, and referencing "SunEdison."

A replay of the conference call will be available from 10:00 a.m. ET on August
7, 2014, until 11:59 p.m. ET on August 21, 2014. To access the replay, please
dial (320) 365-3844 at any time during that period, using pass code 331387. A
replay will also be available on the company's web site at www.SunEdison.com.

About SunEdison
SunEdison is a global leader in transforming how energy is generated,
distributed and owned. SunEdison manufactures solar technology and develops,
finances, installs and operates distributed solar power plants, delivering
predictably priced electricity and services to its residential, commercial,
government and utility customers. SunEdison also provides 24/7 asset
management, monitoring and reporting services for hundreds of solar systems
worldwide via the company's Renewable Operation Center (ROC). SunEdison has
offices in North America, Europe, Latin America, Africa, India and Asia.
SunEdison's common stock is listed on the New York Stock Exchange under the
symbol "SUNE." To learn more visit www.sunedison.com.

Forward-Looking Statements
Certain matters discussed in this press release are forward-looking
statements, including that for the third quarter of 2014, the company expects
solar energy systems sold total non-GAAP sales volume to be in the range of 70
MW to 80 MW, solar energy systems MW retained on the balance sheet to be
between 200 MW and 230 MW, total solar energy systems completed to be between
270 MW and 310 MW, and that fully developed solar energy systems average
project pricing to be between $2.60/watt and $3.00/watt; that for the 2014
full year, the company expects solar energy systems sold total non-GAAP sales
volume to be in the range of 290 MW to 320 MW, solar energy systems MW
retained on the balance sheet to be between 710 MW and 830 MW, total energy
systems completed to be between 1,000 MW and 1,150 MW and total solar energy
systems average project pricing to be between $2.50/watt and $3.00/watt and
that we expect to retain on the balance sheet most of the projects currently
under construction. 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 include
concentrated project development risks related to large scale solar projects;
the availability of attractive project finance and other capital for Solar
Energy projects; market demand for our products and services; changes in the
pricing environment for silicon wafers and polysilicon, as well as solar power
systems; the availability and size of government and economic incentives to
adopt solar power, including tax policy and credits and renewable portfolio
standards; the ability to effectuate and realize the savings from the
restructuring plan; our ability to maintain adequate liquidity and compliance
with our debt covenants; the need to impair long lived assets or other
intangible assets due to changes in the carrying value or realizability of
such assets; the effect of any antidumping or countervailing duties imposed on
photovoltaic cells and/or modules in connection with any trade complaints in
the United States, Europe or elsewhere; the result of any Chinese government
investigations of unfair trade practices in connection with polysilicon
exported from the United States or South Korea into China; changes to
accounting interpretations or accounting rules; existing or new regulations
and policies governing the electric utility industry; our ability to convert
solar project pipeline into completed projects in accordance with our current
expectations; dependence on single and limited source suppliers; utilization
of our manufacturing volume and capacity; the terms of any potential future
amendments to or terminations of our long-term agreements with our solar wafer
customers or any of our suppliers; general economic conditions, including
interest rates; the ability of our customers to pay their debts as they become
due; changes in the composition of worldwide taxable income and applicable tax
laws and regulations, including our ability to utilize any net operating
losses; failure of third-party subcontractors to construct and install our
solar energy systems; quarterly fluctuations in our Solar Energy business; the
impact of competitive products and technologies; inventory levels of our
customers; supply chain difficulties or problems; interruption of production;
outcome of pending and future litigation matters; good working order of our
manufacturing facilities; our ability to reduce manufacturing and operating
costs; assumptions underlying management's financial estimates; actions by
competitors, customers and suppliers; changes in the retail industry; damage
to our brand; acquisitions of pipeline in our Solar Energy segment; changes in
product specifications and manufacturing processes; changes in financial
market conditions; changes in foreign economic and political conditions;
changes in technology; changes in currency exchange rates; with respect to the
separation of the semiconductor business, SunEdison Semiconductor Limited, and
initial public offering of TerraForm Power, Inc.: (i) the expected use of the
proceeds received; and (ii) we may be involved in various conflicts of
interest which could be resolved in a manner unfavorable to us; we may not be
able to achieve some or all of the expected benefits; and other risks
described in the company's filings with the Securities and Exchange
Commission;; andwe are exposed to risks associated withcertain obligations
to TerraForm associated with the initial portfolio, future Call Right Projects
and interests in additional clean energy projects. These forward-looking
statements represent the company's judgment as of the date of this press
release. The company disclaims, however, any intent or obligation to update
these forward-looking statements.



SUNEDISON, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(In millions; except per share data)
                    Three Months Ended,                  Six Months Ended,
                    June 30, 2014  March 31,  June 30,   June 30,   June 30,
                                   2014       2013       2014       2013
Net sales           $   646.2      $ 546.5    $ 401.3    $ 1,192.7  $ 844.9
Cost of goods sold  620.4          499.3      352.1      1,119.7    746.0
Gross profit        25.8           47.2       49.2       73.0       98.9
Operating expenses:
Marketing and       119.2          109.8      78.8       229.0      149.1
administration
Research and        18.7           12.9       18.1       31.6       35.5
development
Restructuring       (3.4)          2.6        (1.1)      (0.8)      (5.6)
reversals
Operating loss      (108.7)        (78.1)     (46.6)     (186.8)    (80.1)
Non-operating
expense (income):
Interest expense    94.1           67.6       34.6       161.7      82.1
Interest income     (5.8)          (2.9)      (0.8)      (8.7)      (1.3)
Loss on convertible
notes derivatives,  47.6           451.8      —          499.4      —
net
Gain on previously
held equity         (145.7)        —          —          (145.7)    —
investment
Other, net          3.7            2.0        2.4        5.7        3.5
Total non-operating (6.1)          518.5      36.2       512.4      84.3
(income) expense
Loss before income
taxes and equity in (102.6)        (596.6)    (82.8)     (699.2)    (164.4)
earnings (loss) of
joint ventures
Income tax expense  (43.0)         20.5       13.6       (22.5)     33.1
(benefit)
Loss before equity
in earnings (loss)  (59.6)         (617.1)    (96.4)     (676.7)    (197.5)
of joint ventures
Equity in earnings
(loss) of joint     8.4            1.1        —          9.5        (0.3)
ventures, net of
tax
Net loss            (51.2)         (616.0)    (96.4)     (667.2)    (197.8)
Net (income) loss
attributable to     10.0           2.4        (6.5)      12.4       5.5
noncontrolling
interests
Net loss
attributable to     $   (41.2)     $ (613.6)  $ (102.9)  $ (654.8)  $ (192.3)
SunEdison
stockholders
Basic loss per      $   (0.16)     $ (2.31)   $ (0.45)   $ (2.46)   $ (0.85)
share [*]
Diluted loss per    $   (0.16)     $ (2.31)   $ (0.45)   $ (2.46)   $ (0.85)
share [*]
Weighted-average
shares used in
computing basic     268.2          267.1      231.7      267.7      231.5
loss per share


Weighted-average
shares used in      268.2          267.1      231.7      267.7      231.5
computing diluted
loss per share
[*] During the three months ended June 30, 2014, March
31, 2014 and June 30, 2013, the company recorded an
adjustment to redeemable noncontrolling interest which
affected the numerator of the EPS calculation by $(0.4)
million, $(3.2) million and $(2.0) million,
respectively. During the six months ended June 30, 2014
and June 30, 2013 the adjustment affected the numerator
of the EPS calculation by $(3.6) million and $(4.4)
million, respectively.
RESULTS BY REPORTABLE SEGMENT
                    Three Months Ended,                  Six Months Ended,
                    June 30, 2014  March 31,  June 30,   June 30,   June 30,
                                   2014       2013       2014       2013
Net sales:
Solar Energy        $   431.6      $ 340.4    $ 161.2    $ 772.3    $ 373.6
Semiconductor       214.6          206.1      240.1      420.4      471.3
Materials
Consolidated net    $   646.2      $ 546.5    $ 401.3    $ 1,192.7  $ 844.9
sales
Operating loss:
Solar Energy        $   (109.7)    $ (61.2)   $ (38.5)   $ (170.6)  $ (66.0)
Semiconductor       1.0            (16.9)     (8.1)      (16.2)     (14.1)
Materials
Consolidated        $   (108.7)    $ (78.1)   $ (46.6)   $ (186.8)  $ (80.1)
operating loss



SUNEDISON, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)
                                              June 30, 2014  December 31, 2013
Assets
Current assets:
Cash and cash equivalents                     $  954.7       $    573.5
Cash committed for construction projects      176.1          258.0
Restricted cash                               93.1           70.1
Accounts receivable, net                      326.3          351.5
Inventories                                   219.5          248.4
Solar energy systems held for development and 363.5          460.1
sale
Prepaid expenses and other current assets     506.4          423.4
Total current assets                          2,639.6        2,385.0
Investments                                   41.3           41.1
Property, plant and equipment, net:
Non-solar energy systems, net of accumulated  1,771.0        1,108.7
depreciation
Solar energy systems, net of accumulated      2,981.0        2,014.2
depreciation
Restricted cash                               103.2          73.8
Note hedge derivative asset                   —              514.8
Other assets                                  856.7          542.9
Total assets                                  $  8,392.8     $    6,680.5



                                              June 30, 2014  December 31, 2013
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of Solar Energy non-solar     $   78.0       $     —
energy systems debt
Current portion of Solar Energy systems debt,
including financing and capital leaseback     402.3          394.7
obligations
Current portion of Semiconductor Materials    2.1            2.8
debt
Accounts payable                              1,030.9        867.7
Accrued liabilities                           488.8          432.7
Current portion of deferred revenue           121.9          154.7
Current portion of customer and other         36.2           36.7
deposits
Total current liabilities                     2,160.2        1,889.3
Solar Energy non-solar energy systems debt,   1,614.6        868.2
less current portion
Solar Energy systems debt, less current
portion, including financing and capital      3,092.1        2,302.9
leaseback obligations
Semiconductor Materials debt, less current    205.8          7.6
portion
Customer and other deposits, less current     23.7           103.3
portion
Deferred revenue, less current portion        123.6          90.0
Conversion option derivative liability        —              506.5
Warrant derivative liability                  —              270.5
Other liabilities                             310.7          301.0
Total liabilities                             7,530.7        6,339.3
Stockholders' equity:
Common stock                                  2.7            2.7
Additional paid-in capital                    1,188.7        457.7
Accumulated deficit                           (822.7)        (168.0)
Accumulated other comprehensive loss          (4.8)          (60.0)
Treasury stock                                (5.8)          (0.2)
Total SunEdison stockholders' equity          358.1          232.2
Noncontrolling interests                      504.0          109.0
Total stockholders' equity                    862.1          341.2
Total liabilities and stockholders' equity    $   8,392.8    $     6,680.5



SUNEDISON, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)
                          Three Months Ended,            Six Months Ended,
                          June 30,  March 31,  June 30,  June 30,   June 30,
                          2014      2014       2013      2014       2013
Cash flows from operating
activities:
Net loss                  $ (51.2)  $ (616.0)  $ (96.4)  $ (667.2)  $ (197.8)
Adjustments to reconcile
net loss to net cash used
in
operating
activities:
Depreciation and          91.8      62.0       61.0      153.8      121.8
amortization
Stock-based compensation  5.8       8.6        6.7       14.4       13.9
Expense for deferred      (38.7)    (3.0)      (18.4)    (41.7)     (25.9)
taxes
Deferred revenue          (89.6)    (50.0)     (23.0)    (139.6)    (24.1)
Loss on convertible notes 47.6      451.8      —         499.4      —
derivatives, net
Gain on previously held   (145.7)   —          —         (145.7)    —
equity investment
Other non-cash            10.8      2.4        8.6       13.2       (1.2)
Changes in operating
assets and liabilities,
net of
effects of
acquisitions:
Accounts receivable       (10.4)    53.6       45.4      43.2       (15.1)
Inventories               (3.0)     31.5       (12.8)    28.5       5.8
Solar energy systems held 78.6      (80.9)     (94.2)    (2.3)      (131.0)
for development and sale
Prepaid expenses and      (72.2)    (31.3)     (13.2)    (103.5)    (29.3)
other current assets
Accounts payable          8.1       (113.6)    57.8      (105.5)    (9.7)
Deferred revenue for      101.0     57.9       27.8      158.9      64.2
solar energy systems
Customer and other        (35.4)    (6.2)      (14.2)    (41.6)     (33.8)
deposits
Accrued liabilities       5.5       32.2       (15.4)    37.7       31.3
Other long term           (0.3)     (3.0)      (1.1)     (3.3)      5.7
liabilities
Other                     18.7      (11.2)     (5.0)     7.5        20.2
Net cash used in          (78.6)    (215.2)    (86.4)    (293.8)    (205.0)
operating activities
Cash flows from investing
activities:
Capital expenditures      (74.9)    (20.1)     (38.8)    (95.0)     (69.6)
Construction of solar     (325.3)   (326.4)    (75.1)    (651.7)    (122.5)
energy systems
Purchases of cost and     (35.1)    (18.7)     (27.1)    (53.8)     (45.6)
equity method investments
Net proceeds from equity  5.8       0.2        50.4      6.0        62.1
method investments
Change in restricted cash (34.3)    (14.2)     7.8       (48.5)     10.6
Change in cash committed  2.1       80.8       (72.1)    82.9       (69.4)
for construction projects
Cash paid for
acquisitions, net of cash (241.9)   (14.1)     —         (256.0)    —
acquired
Other                     —         —          (0.6)     —          (0.6)
Net cash used in          (703.6)   (312.5)    (155.5)   (1,016.1)  (235.0)
investing activities
Cash flows from financing
activities:
Proceeds from long-term   600.0     —          —         600.0      —
debt
Proceeds from SSL term    210.0     —          —         210.0      —
loan
Proceeds from solar
energy system financing   627.6     461.8      231.5     1,089.4    330.0
and capital lease
obligations
Principal payments on     (10.6)    —          (1.4)     (10.6)     (1.4)
long term debt
Repayments of solar
energy system financing   (242.5)   (20.9)     (38.2)    (263.4)    (50.6)
and capital lease
obligations
Payments for note hedge   (173.8)   —          —         (173.8)    —
Proceeds from warrant     123.6     —          —         123.6      —
transactions
Net repayments of
customer deposits related —         —          (0.7)     —          (26.9)
to long-term supply
agreements
Proceeds from SSL IPO and
private placement         185.3     —          —         185.3      —
transactions
Common stock issued and   2.9       —          (0.4)     2.9        (0.6)
repurchased
Proceeds from             13.5      10.0       11.4      23.5       11.5
noncontrolling interests
Cash paid for contingent
consideration for         (0.2)     (1.7)      —         (1.9)      (0.8)
acquisitions
Debt financing fees       (59.7)    (31.5)     (14.9)    (91.2)     (23.0)
Other                     (5.2)     1.7        —         (3.5)      —
Net cash provided by      1,270.9   419.4      187.3     1,690.3    238.2
financing activities
Effect of exchange rate
changes on cash and cash  2.6       (1.8)      0.1       0.8        (5.7)
equivalents
Net increase (decrease)
in cash and cash          491.3     (110.1)    (54.5)    381.2      (207.5)
equivalents
Cash and cash equivalents 463.4     573.5      400.8     573.5      553.8
at beginning of period
Cash and cash equivalents $ 954.7   $ 463.4    $ 346.3   $ 954.7    $ 346.3
at end of period



SUNEDISON, INC. AND SUBSIDIARIES

UNAUDITED SUPPLEMENTAL INFORMATION

NON-GAAP FINANCIAL MEASURES

(In millions, except per share data and percentages) [A]
                   Three Months Ended,                 Six Months Ended,
                   June 30,    March 31,   June 30,    June 30,    June 30,
                   2014        2014        2013        2014        2013
Consolidated
Non-GAAP Financial
Measures
Non-GAAP net sales $ 557.5     $ 577.6     $ 491.6     $ 1,135.1   $ 922.9
Non-GAAP gross     $ 25.6      $ 21.7      $ 28.8      $ 47.3      $ 70.6
margin
Non-GAAP gross     4.6       % 3.8       % 5.9       % 4.2       % 7.6       %
margin percentage
Non-GAAP operating $ (108.9)   $ (103.6)   $ (67.0)    $ (212.5)   $ (108.4)
loss
Non-GAAP net       $ 33.7      $ (64.2)    $ (42.4)    $ (30.5)    $ (77.9)
earnings (loss)
Non-GAAP fully
diluted earnings   $ 0.12      $ (0.25)    $ (0.19)    $ (0.13)    $ (0.35)
(loss) per share
[*]
Reconciliations of
GAAP to Non-GAAP
Measures
SunEdison, Inc.
Consolidated
GAAP net sales     $ 646.2     $ 546.5     $ 401.3     $ 1,192.7   $ 844.9
Direct sales [B]   (82.9)      21.5        80.5        (61.4)      65.6
Financing
sale-leasebacks    (5.8)       9.6         9.8         3.8         12.4
[C]
Non-GAAP net sales $ 557.5     $ 577.6     $ 491.6     $ 1,135.1   $ 922.9
GAAP gross margin  $ 25.8      $ 47.2      $ 49.2      $ 73.0      $ 98.9
Direct sales [B]   7.0         (21.5)      (14.0)      (26.5)      (18.1)
Financing
sale-leasebacks    (7.2)       (4.0)       (6.4)       0.8         (10.2)
[C]
Non-GAAP gross     $ 25.6      $ 21.7      $ 28.8      $ 47.3      $ 70.6
margin
Non-GAAP gross     4.6       % 3.8       % 5.9       % 4.2       % 7.6       %
margin %
GAAP operating     $ (108.7)   $ (78.1)    $ (46.6)    $ (186.8)   $ (80.1)
loss
Direct sales [B]   7.0         (21.5)      (14.0)      (26.5)      (18.1)
Financing
sale-leasebacks    (7.2)       (4.0)       (6.4)       0.8         (10.2)
[C]
Non-GAAP operating $ (108.9)   $ (103.6)   $ (67.0)    $ (212.5)   $ (108.4)
loss
GAAP net loss
attributable to    $ (41.2)    $ (613.6)   $ (102.9)   $ (654.8)   $ (192.3)
SunEdison
stockholders
Non-GAAP
adjustments, net   74.9        549.4       60.5        624.3       114.4
of tax [B, C, D
and E]
Non-GAAP net       $ 33.7      $ (64.2)    $ (42.4)    $ (30.5)    $ (77.9)
earnings (loss)
GAAP fully diluted (0.16)      (2.31)      (0.45)      (2.46)      (0.85)
loss per share [*]
Non-GAAP
adjustments, net   0.28        2.06        0.26        2.33        0.50
of tax [B, C, D
and E]
Non-GAAP fully
diluted earnings   $ 0.12      $ (0.25)    $ (0.19)    $ (0.13)    $ (0.35)
(loss) per share
[*, #]
Weighted-average
shares used in
computing GAAP     268.2       267.1       231.7       267.7       231.5
diluted loss per
share
Weighted-average
shares used in
computing Non-GAAP 325.7       267.1       231.7       267.7       231.5
diluted earnings
(loss) per share
[#]
[*] During the three months ended June 30, 2014, March 31, 2014 and June 30,
2013, the company recorded an adjustment to redeemable noncontrolling interest
which affected the numerator of the EPS calculation by $(0.4) million, $(3.2)
million and $(2.0) million, respectively. During the six months ended June 30,
2014 and June 30, 2013 the adjustment affected the numerator of the EPS
calculation by $(3.6) million and $(4.4) million, respectively.



[#] Non-GAAP fully diluted earnings per share for the three months ended June
30, 2014 includes the dilutive impact of outstanding options and restricted
stock units, outstanding warrants and the senior convertible notes due 2021 as
these instruments are dilutive in the period. The dilutive impact of the
senior convertible notes due 2021 includes an adjustment to the numerator of
the EPS calculation for the interest expense associated with these notes of
$6.2 million. The impact of the senior convertible notes due 2018 and 2020 was
antidilutive for the period.



[A] Generally Accepted Accounting Principles (GAAP) is the term used to refer
to the standard framework of guidelines for financial accounting and
reporting. In addition to reporting financial results in accordance with GAAP,
we have provided non-GAAP financial measures for the Solar Energy segment. The
Company believes that these non-GAAP measures represent important internal
measures of performance for our Solar Energy business, and better reflect
Solar Energy's results from operations and near term cash flows. Accordingly,
where these measures are provided, it is done so that investors have the same
financial data that management uses to evaluate the operational and financial
performance of the Solar Energy segment. SunEdison management uses these
measures to manage the Solar Energy segment because it believes these measures
are more representative of the operational health and performance of that
segment. These non-GAAP measures should not be considered as a substitute for,
and should only be read in conjunction with, measures of financial performance
prepared in accordance with GAAP and the reconciliation of each non-GAAP
measure to the directly comparable GAAP measure set forth in the press
release.



[B] These non-GAAP measures include adjustments to revenue in the company's
Solar Energy business from direct sales of solar energy systems where we have
received upfront partial payments and, absent real estate accounting
requirements, we would have recognized revenues under the percentage of
completion accounting method. The non-GAAP measures also include adjustments
to non-GAAP revenue and/or profit deferred related to our maximum exposure for
power warranties, system uptime guarantees and breach of contract provisions
offered to the direct sale customers for these systems that are considered
continuing involvement by us in the sold solar energy systems. This revenue is
not recognized as of the reporting date under GAAP real estate accounting
rules because the solar energy systems are considered integral to the real
estate on which they were built. Absent real estate accounting requirements,
deferred revenues related to continuing involvement would be recognized under
GAAP during the reporting period because we have historically experienced
minimal losses related to these guarantees. For these direct sales, the sales
contracts have been executed and we have either received payment in full or
maintains a valid and legal note receivable for the full sales price that we
expect to collect within a short period after completion of the project.



[C] Adjustment relates to revenue from our sale-leaseback transactions
accounted for as financings. This includes cash received for the legal sale of
the solar energy system to the purchaser that will not be recognized as
revenue under GAAP. It also includes progress of constructing solar energy
systems for which we have executed binding sale agreements meeting non-real
estate percentage of completion accounting requirements. Non-GAAP operating
income reflects a margin in an amount that will equal to the difference
between (a) the cash proceeds our financing partners in sale-leaseback
transactions considered financings and (b) our total costs to construct the
solar energy systems sold under the sale-leaseback transactions. These
sale-leaseback transactions are classified as financing transactions under
GAAP because the system is considered integral to the land or building on
which it resides and because we have continuing involvement with the system
through a purchase option. This system development margin will be recognized
under GAAP upon termination of the related lease through the non-cash
extinguishment of the debt offset by any remaining net book value of the solar
energy system asset.



[D] Income tax has been calculated using the estimated effective tax rate for
SunEdison in the jurisdictions giving rise to the related adjustments and
assumes sale-leaseback deferred tax assets will be realized.



[E] Adjustment includes a non-cash net loss on derivative instruments for the
three and six months ended June 30, 2014 of $47.6 million ($208.4 million, net
of tax expense) and $499.4 million ($499.4 million, net of tax), respectively,
reported as a non-operating expense in accordance with GAAP, as a result of
the net change in the estimated fair values of the embedded conversion option,
note hedge and warrant derivative instruments entered into in connection with
the senior convertible notes offering completed in December 2013. There were
no such adjustments for any prior periods. Management believes it is useful to
exclude this net loss from our GAAP net loss and EPS as it is more
representative of the results of the continuing operations in the respective
reporting period. Excluding this net loss provides investors with a basis to
compare the company's performance against the performance of other companies
without a net non-cash loss on such derivative instruments. This non-GAAP
measure should not be considered as a substitute for, and should only be read
in conjunction with, measures of financial performance prepared in accordance
with GAAP.



SUNEDISON, INC. AND SUBSIDIARIES

UNAUDITED SUPPLEMENTAL INFORMATION

NON-GAAP FINANCIAL MEASURES

(In millions) [A]
                        Three Months Ended,               Six Months Ended,
                        June 30, 2014 March 31, June 30,  June 30,   June 30,
                                      2014      2013      2014       2013
Non-GAAP Financial
Measures
Solar Energy Segment    $  342.9      $ 371.5   $ 251.5   $ 714.7    $ 451.6
Non-GAAP net sales
Solar Energy Segment    $  (109.9)    $ (86.7)  $ (58.9)  $ (196.3)  $ (94.3)
Non-GAAP operating loss
Reconciliations of GAAP
to Non-GAAP Measures
Solar Energy Segment:
Solar Energy GAAP net   $  431.6      $ 340.4   $ 161.2   $ 772.3    $ 373.6
sales
Direct sales [B]        (82.9)        21.5      80.5      (61.4)     65.6
Financing               (5.8)         9.6       9.8       3.8        12.4
sale-leasebacks [C]
Solar Energy Non-GAAP   $  342.9      $ 371.5   $ 251.5   $ 714.7    $ 451.6
net sales
Solar Energy GAAP       $  (109.7)    $ (61.2)  $ (38.5)  $ (170.6)  $ (66)
operating loss
Direct sales [B]        7.0           (21.5)    (14.0)    (26.5)     (18.1)
Financing               (7.2)         (4.0)     (6.4)     0.8        (10.2)
sale-leasebacks [C]
Solar Energy Non-GAAP   $  (109.9)    $ (86.7)  $ (58.9)  $ (196.3)  $ (94.3)
operating loss
[A], [B], [C] - See
previous page



SUNEDISON, INC. AND SUBSIDIARIES

UNAUDITED SUPPLEMENTAL INFORMATION

NON-GAAP FINANCIAL MEASURES

(In millions)
EBITDA CALCULATION [A]
               Three Months Ended,                       Six Months Ended,
               June 30,     March 31,     June 30, 2013  June 30,   June 30,
               2014         2014                         2014       2013
Net loss
attributable   $  (41.2)    $  (613.6)    $   (102.9)    $ (654.8)  $ (192.3)
to SunEdison
stockholders
Net interest   88.3         64.7          33.8           153.0      80.8
expense
Depreciation
and            91.8         62.0          61.0           153.8      121.8
amortization
Income tax
expense        (43.0)       20.5          13.6           (22.5)     33.1
(benefit)
EBITDA [A]   $  95.9      $  (466.4)    $   5.5        $ (370.5)  $ 43.4
[A] EBITDA is a non-GAAP disclosure consisting of net loss attributable to
SunEdison stockholders plus interest expense, net, depreciation and
amortization and income taxes. The Company believes that EBITDA is useful to
an investor in evaluating the Company's operating performance and liquidity
because (i) it is widely used to measure a company's operating performance
without regard to items such as depreciation and amortization, which can vary
depending upon accounting methods and the book value of assets, (ii) it
presents a meaningful measure of corporate performance exclusive of the
Company's capital structure and the method by which the assets were acquired,
and (iii) it is a widely accepted financial indicator of a company's ability
to service its debt, as the Company is required to comply with certain
covenants and limitations that are based on variations of EBITDA in the
company's financing documents.





SUNEDISON, INC. AND SUBSIDIARIES

UNAUDITED SUPPLEMENTAL INFORMATION

NON-GAAP FINANCIAL MEASURES

(In millions)
SUMMARY OF CONSOLIDATED DEBT
OUTSTANDING
                             June 30, 2014 December 31,
                                           2013
Convertible senior notes due $  472.6      $   460.0
2018, net of discount
Convertible senior notes due 416.9         —
2020, net of discount
Convertible senior notes due 418.5         408.3
2021, net of discount
SMP Ltd. credit facilities   384.6         —
Semiconductor Materials debt 207.9         10.3
Solar Energy recourse        41.0          60.2
financing
Solar Energy non-recourse
systems debt, including
financing and                396.9         393.2
capital leaseback
obligations, current portion
Solar Energy non-recourse
systems debt, including
financing and capital        2,656.5       2,244.2
leaseback obligations, less
current portion
Solar Energy
non-recourse                 400.0         —
acquisition
facility
Total                        $  5,394.9    $   3,576.2
NON-GAAP
RECONCILIATION
OF FREE CASH
FLOW [A]
                 Three Months Ended,                     Six Months Ended,
                 June 30,    March 31,     June 30, 2013 June 30,   June 30,
                 2014        2014                        2014       2013
Net cash used in
operating        (78.6)      $  (215.2)    $   (86.4)    $ (293.8)  $ (205.0)
activities
Capital          (74.9)      (20.1)        (38.8)        (95.0)     (69.6)
expenditures
Construction of
solar energy     (325.3)     (326.4)       (75.1)        (651.7)    (122.5)
systems
Proceeds from
solar energy
system financing 627.6       461.8         231.5         1,089.4    330.0
and capital
lease
obligations
Repayments of
solar energy
system financing (242.5)     (20.9)        (38.2)        (263.4)    (50.6)
and capital
lease
obligations
Proceeds from
noncontrolling   13.5        10.0          11.4          23.5       11.5
interests
Free cash flow   $  (80.2)   $  (110.8)    $   4.4       $ (191.0)  $ (106.2)
[A]
[A] Generally Accepted Accounting Principles (GAAP) is
the term used to refer to the standard framework of
guidelines for financial accounting and reporting. In
addition to reporting financial results in accordance
with GAAP, we have provided a non-GAAP financial measure
for free cash flow which we believe is useful to help
investors better understand the capital intensity of our
business, including our project financing operations. In
addition to other key performance indicators, we
evaluate the performance of the solar project business
on the cash generation abilities of the projects, which
are typically financed at the inception of a lease,
resulting in a gain on sale that is deferred and not
immediately included in net income (loss). Any non-GAAP
measure should be considered in context with the GAAP
financial presentation and should not be considered in
isolation or as a substitute for GAAP net income (loss).





SOURCE SunEdison, Inc.

Website: http://www.sunedison.com
Contact: Investors/Analysts: R. Phelps Morris, Vice President, Investor
Relations, (314) 770-7325, pmorris@sunedison.com or Chris Chaney, Director,
Investor Relations, (636) 474-5226, cchaney@sunedison.com
 
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