Sunrun (Nasdaq: RUN), the nation’s leading provider of residential
solar, storage and energy services, today announced financial
results for the second quarter ended June 30, 2020.
“Consumer interest in clean, affordable, and resilient power is
stronger than ever with increased outages and more time spent at
home. Sunrun is responding quickly to meet this need,” said Lynn
Jurich, Sunrun’s Chief Executive Officer and co-founder. “In the
quarter, we moved to a digital sales and streamlined operating
model, improving our cost structure trajectory. In July we
reached an agreement to acquire Vivint Solar to expand our customer
reach and improve scale efficiencies. We have increased our
customer value proposition with new virtual power plant contracts,
increased battery adoption and launched a new venture for further
home electrification.”
Recent Business Developments
- On July 6, 2020, Sunrun announced that it has entered into a
definitive agreement to acquire Vivint Solar. This is a
transformational opportunity to generate consumer and shareholder
value, realize annual cost synergies and bring cleaner, affordable
energy to more homes. It establishes Sunrun as a leading home solar
and energy services company across the United States, with a
combined customer base of more than 500,000, while bringing greater
opportunities for consumers to save money on their electric bills
and decrease dependence on fossil fuels. The acquisition of Vivint
Solar is expected to be completed during the fourth quarter of
2020, subject to approval by Vivint Solar and Sunrun stockholders,
regulatory approvals and other customary closing conditions.
- Sunrun, SK E&S and other affiliated companies, a top global
energy and technology company, announced on July 29, 2020 they have
co-invested in a new venture with plans to electrify the home. The
initial investments from Sunrun and SK E&S and other affiliated
companies will go toward forming a new company that will conduct
research and development activities to accelerate the adoption of
renewables, the electrification of homes, and the transition to a
connected and distributed energy system.
- On July 30, 2020 Sunrun announced exclusive partnerships with
three Community Choice Aggregators (CCAs) in California, which
collectively provide power for approximately one million homes in
the Bay Area, for co-marketing and building virtual power plants.
The partnerships are with East Bay Community Energy, Silicon Valley
Clean Energy, and Peninsula Clean Energy. The CCAs sought options
to help increase the use of clean, affordable energy by leveraging
these virtual power plants while also providing backup power to
more of their customers following forced blackouts by PG&E that
affected hundreds of thousands of customers in the Bay
Area.
- In June, 2020, Sunrun announced Virtual Power Plant (VPP)
awards with Southern California Edison and Orange & Rockland.
These two VPP awards build on the prior announcements with ISO New
England, East Bay Community Energy, and Hawaiian Electric Company
(HECO). The Virtual Power Plants will provide a resilient,
clean source of energy at times when electricity is needed most,
such as during a hot summer day and other times when there is high
demand for energy. Families with Sunrun’s Brightbox rechargeable
solar battery systems will also have access to reliable backup
power to keep their lights on and food fresh during outage
events.
Key Operating Metrics & Outlook
In the second quarter of 2020, Megawatts Deployed (MW) were 78
MW, compared to 103 MW in the second quarter of 2019, a 24%
year-over-year decline.
Creation Cost per watt was $3.72 in the second quarter of 2020,
compared to $3.33 in the second quarter of 2019, a 12%
year-over-year increase.
NPV created in the second quarter of 2020 was $34 million.
Unlevered NPV in the second quarter of 2020 was $0.51 per watt,
representing approximately $3,800 per leased customer.
Gross Earning Assets as of June 30, 2020 were $3.9 billion, up
$580 million, or 18%, from the prior year. Net Earning Assets as of
June 30, 2020 were $1.6 billion, up $204 million, or 14%, from the
prior year.
Cash, including restricted cash, increased $0.4 million from the
prior year. Cash Generation was negative $30 million in the second
quarter of 2020. The company defines Cash Generation as the
increase in total cash, including restricted cash, less any
increases in recourse debt, and adjusted for certain items.
In the second quarter of 2020, Cash Generation was adjusted by
($19.1) million related to the company’s Investment Tax Credit safe
harbor program, $4.0 million for restructuring related activities
and ($4.8) million for the deferral of social security payroll
taxes.
Sunrun made the decision to maintain its organizational
capabilities when certain sales channels were restricted, which
decreased second quarter NPV, but enabled the company to be in an
athletic position to safely provide essential services to customers
as markets gradually reopened. Order volumes have increased
significantly, now above February levels, and management expects to
grow Megawatts Deployed by over 20% sequentially in the third
quarter, at improving Unlevered NPV levels. We expect Unlevered NPV
to increase to above $8,000 per leased customer in the fourth
quarter. Management also expects to maintain a strong total
cash balance and grow Net Earning Assets in full-year
2020.
Second Quarter 2020 GAAP Results
Total revenue was $181.3 million in the second quarter of 2020,
down $23.3 million, or 11%, from the second quarter of 2019.
Customer agreements and incentives revenue was $106.1 million, an
increase of $13.7 million, or 15%, compared to the second quarter
of 2019. Solar energy systems and product sales revenue was $75.2
million, a decrease of $37.0 million, or 33%, compared to the
second quarter of 2019.
Total cost of revenue was $147.2 million, a decrease of 6%
year-over-year. Total operating expenses were $264.8 million, a
decrease of 1% year-over-year.
Net loss attributable to common stockholders was $13.6 million,
or $0.11 per share, in the second quarter of 2020.
Financing Activities
As of August 10, 2020, considering only committed debt and
closed tax equity funds, the company’s pre-arranged financings
provide capital to fund approximately 200 MW of leased projects
beyond what was deployed through the end of the second quarter of
2020. We also have executed term sheets for additional project
finance capital to fund installations.
Conference Call Information
Sunrun is hosting a conference call for analysts and investors
to discuss its second quarter 2020 results and business outlook at
2:00 p.m. Pacific Time today, August 10, 2020. A live audio webcast
of the conference call along with supplemental financial
information will be accessible via the “Investor Relations” section
of the Company’s website at https://investors.sunrun.com. The
conference call can also be accessed live over the phone by dialing
877-407-5989 (toll-free) or 201-689-8434 (international). An audio
replay will be available following the call on the Sunrun Investor
Relations website for approximately one month.
About Sunrun
Sunrun Inc. (Nasdaq: RUN) is the nation’s leading home solar,
battery storage, and energy services company. Founded in 2007,
Sunrun pioneered home solar service plans to make local clean
energy more accessible to everyone for little to no upfront cost.
Sunrun’s innovative home battery solution, Brightbox, brings
families affordable, resilient, and reliable energy. The company
can also manage and share stored solar energy from the batteries to
provide benefits to households, utilities, and the electric grid
while reducing our reliance on polluting energy sources. For more
information, please visit www.sunrun.com.
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of Section 21E of the Securities Exchange Act of 1934
and the Private Securities Litigation Reform Act of 1995, including
statements regarding the expected benefits of the proposed
acquisition of Vivint Solar, cost synergies and opportunities
resulting from the proposed acquisition, the expected timing of the
completion of the proposed acquisition, our leadership position in
the industry, our expectations as to the opportunities for the
proposed joint venture to electrify the home, the expected benefits
of the joint venture, the expected benefits of our exclusive
partnerships with the CCAs, our customer value proposition with new
virtual power plant contracts, increased battery adoption, our
competitive advantages, business plan, investments, market adoption
rates, our future financial and operating performance, the impact
of the COVID-19 on the Company and its business and operations,
transitioning to a digital sales model, our operational and
financial results such as Megawatts Deployed, Unlevered NPV, total
cash balance and Net Earning Assets, our investment tax credit safe
harbor strategy, and the assumptions related to the calculation of
the foregoing metrics, as well as our expectations regarding our
growth, financing activities, and financing capacity. These
statements are not guarantees of future performance; they reflect
our current views with respect to future events and are based on
assumptions and estimates and are subject to known and unknown
risks, uncertainties and other factors that may cause actual
results, performance or achievements to be materially different
from expectations or results projected or implied by
forward-looking statements. The risks and uncertainties that could
cause our results to differ materially from those expressed or
implied by such forward-looking statements include, but are not
limited to: the occurrence of any event, change or other
circumstances that could give rise to the termination of the
definitive agreement to acquire Vivint Solar or the failure to
satisfy closing conditions; the possibility that the consummation
of the transactions contemplated by the definitive agreement to
acquire Vivint Solar is delayed or does not occur, including the
failure of the parties’ stockholders to approve the proposed
transactions; uncertainty regarding the timing of the receipt of
required regulatory approvals for the merger and the possibility
that the parties may be required to accept conditions that could
reduce or eliminate the anticipated benefits of the merger as a
condition to obtaining regulatory approvals or that the required
regulatory approvals might not be obtained at all; the outcome of
any legal proceedings that have been or may be instituted against
the parties or others following announcement of the transactions
contemplated by the definitive transaction agreement; challenges,
disruptions and costs of closing, integrating and achieving
anticipated synergies, or that such synergies will take longer to
realize than expected; risks that the merger and other transactions
contemplated by the definitive transaction agreement disrupt
current plans and operations that may harm the parties’ businesses;
the amount of any costs, fees, expenses, impairments and charges
related to the merger; uncertainty as to the effects of the
announcement or pendency of the merger on the market price of the
parties’ respective common stock and/or on their respective
financial performance; the closing of co-investment; the
availability of additional financing on acceptable terms; changes
in the retail prices of traditional utility generated electricity;
the impact of COVID-19 on the Company and its business and
operations; worldwide economic conditions, including slow or
negative growth rates in global and domestic economies and weakened
consumer confidence and spending; changes in policies and
regulations including net metering and interconnection limits or
caps; the availability of rebates, tax credits and other
incentives; the availability of solar panels and other raw
materials; our limited operating history, particularly as a new
public company; our ability to attract and retain our relationships
with third parties, including our solar partners; our ability to
meet the covenants in our investment funds and debt facilities; our
continued ability to manage costs associated with solar service
offerings, our business plan and our ability to effectively manage
our growth and labor constraints, and such other risks identified
in the reports that we file with the U.S. Securities and Exchange
Commission, or SEC, from time to time. All forward-looking
statements in this press release are based on information available
to us as of the date hereof, and we assume no obligation to update
these forward-looking statements.
Additional Information and Where to Find It
In connection with the proposed merger, Sunrun intends to file
with the SEC a registration statement on Form S-4, which will
include a document that serves as a prospectus of Sunrun and a
joint proxy statement of Sunrun and Vivint Solar (the “joint proxy
statement/prospectus”). After the registration statement has been
declared effective by the SEC, the joint proxy statement/prospectus
will be delivered to stockholders of Sunrun and Vivint Solar.
BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, SECURITY HOLDERS
OF SUNRUN AND VIVINT SOLAR ARE URGED TO READ THE JOINT PROXY
STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS
THERETO) AND OTHER DOCUMENTS RELATING TO THE MERGER THAT WILL BE
FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER. Investors
and security holders will be able to obtain copies of the joint
proxy statement/prospectus (when available) and other documents
filed by Sunrun and Vivint Solar with the SEC, without charge,
through the website maintained by the SEC at http://www.sec.gov.
Copies of documents filed with the SEC by Sunrun will be made
available free of charge on Sunrun’s website at
http://investors.sunrun.com/ under the heading “Filings &
Financials” and then under the subheading “SEC Filings.” Copies of
documents filed with the SEC by Vivint Solar will be made available
free of charge on Vivint Solar’s website at
http://investors.vivintsolar.com/ under the link “Financial
Information” and then under the heading “SEC Filings.”
Participants in the Solicitation
Sunrun and Vivint Solar and their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies from the holders of Sunrun common stock and
Vivint Solar common stock in respect of the proposed transaction.
Information about Sunrun’s directors and executive officers is set
forth in Sunrun’s Form 10-K for the year ended December 31, 2019
and the proxy statement for Sunrun’s 2020 Annual Meeting of
Stockholders, which were filed with the SEC on February 27, 2020
and April 17, 2020, respectively. Information about Vivint Solar’s
directors and executive officers is set forth in Vivint Solar’s
Form 10-K for the year ended December 31, 2019 and the proxy
statement for Vivint Solar’s 2020 Annual Meeting of Stockholders,
which were filed with the SEC on March 10, 2020 and April 24, 2020,
respectively. Stockholders may obtain additional information
regarding the interests of such participants by reading the
registration statement and the joint proxy statement/prospectus and
other relevant materials to be filed with the SEC regarding the
proposed merger when they become available. Investors should read
the joint proxy statement/prospectus carefully when it becomes
available before making any voting or investment decisions.
No Offer or Solicitation
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended.
Consolidated Balance
Sheets(In Thousands)
|
|
June 30, 2020 |
|
December 31, 2019 |
|
|
|
|
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash |
|
$ |
269,569 |
|
|
$ |
269,577 |
|
Restricted cash |
|
84,515 |
|
|
93,504 |
|
Accounts receivable, net |
|
60,000 |
|
|
77,728 |
|
State tax credits receivable |
|
— |
|
|
6,466 |
|
Inventories |
|
210,507 |
|
|
260,571 |
|
Prepaid expenses and other current assets |
|
13,649 |
|
|
25,984 |
|
Total current assets |
|
638,240 |
|
|
733,830 |
|
Restricted cash |
|
148 |
|
|
148 |
|
Solar energy systems, net |
|
4,774,425 |
|
|
4,492,615 |
|
Property and equipment, net |
|
47,839 |
|
|
56,708 |
|
Intangible assets, net |
|
16,892 |
|
|
19,543 |
|
Goodwill |
|
95,094 |
|
|
95,094 |
|
Other assets |
|
432,404 |
|
|
408,403 |
|
Total assets |
|
$ |
6,005,042 |
|
|
$ |
5,806,341 |
|
Liabilities and total equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
99,895 |
|
|
$ |
223,356 |
|
Distributions payable to noncontrolling interests and redeemable
noncontrolling interests |
|
17,751 |
|
|
16,062 |
|
Accrued expenses and other liabilities |
|
187,891 |
|
|
148,497 |
|
Deferred revenue, current portion |
|
78,750 |
|
|
77,643 |
|
Deferred grants, current portion |
|
8,274 |
|
|
8,093 |
|
Finance lease obligations, current portion |
|
8,065 |
|
|
10,064 |
|
Non-recourse debt, current portion |
|
105,381 |
|
|
35,348 |
|
Pass-through financing obligation, current portion |
|
11,292 |
|
|
11,031 |
|
Total current liabilities |
|
517,299 |
|
|
530,094 |
|
Deferred revenue, net of current portion |
|
663,797 |
|
|
651,856 |
|
Deferred grants, net of current portion |
|
213,956 |
|
|
218,568 |
|
Finance lease obligations, net of current portion |
|
8,547 |
|
|
12,895 |
|
Recourse debt |
|
236,435 |
|
|
239,485 |
|
Non-recourse debt, net of current portion |
|
2,081,725 |
|
|
1,980,107 |
|
Pass-through financing obligation, net of current portion |
|
326,278 |
|
|
327,974 |
|
Other liabilities |
|
227,984 |
|
|
141,401 |
|
Deferred tax liabilities |
|
36,834 |
|
|
65,964 |
|
Total liabilities |
|
4,312,855 |
|
|
4,168,344 |
|
Redeemable noncontrolling interests |
|
450,682 |
|
|
306,565 |
|
Total stockholders’ equity |
|
888,167 |
|
|
964,731 |
|
Noncontrolling interests |
|
353,338 |
|
|
366,701 |
|
Total equity |
|
1,241,505 |
|
|
1,331,432 |
|
Total liabilities, redeemable noncontrolling interests and
total equity |
|
$ |
6,005,042 |
|
|
$ |
5,806,341 |
|
Consolidated Statements of
Operations(In Thousands, Except Per Share
Amounts)
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Revenue: |
|
|
|
|
|
|
|
Customer agreements and incentives |
$ |
106,095 |
|
|
$ |
92,439 |
|
|
$ |
205,219 |
|
|
$ |
192,289 |
|
Solar energy systems and product sales |
75,199 |
|
|
112,156 |
|
|
186,806 |
|
|
206,810 |
|
Total revenue |
181,294 |
|
|
204,595 |
|
|
392,025 |
|
|
399,099 |
|
Operating expenses: |
|
|
|
|
|
|
|
Cost of customer agreements and incentives |
83,422 |
|
|
70,594 |
|
|
161,699 |
|
|
140,087 |
|
Cost of solar energy systems and product sales |
63,746 |
|
|
86,348 |
|
|
155,344 |
|
|
164,147 |
|
Sales and marketing |
69,701 |
|
|
70,038 |
|
|
139,971 |
|
|
125,991 |
|
Research and development |
4,971 |
|
|
6,555 |
|
|
9,017 |
|
|
12,029 |
|
General and administrative |
41,756 |
|
|
33,044 |
|
|
69,830 |
|
|
62,107 |
|
Amortization of intangible assets |
1,167 |
|
|
814 |
|
|
2,650 |
|
|
1,707 |
|
Total operating expenses |
264,763 |
|
|
267,393 |
|
|
538,511 |
|
|
506,068 |
|
Loss from operations |
(83,469 |
) |
|
(62,798 |
) |
|
(146,486 |
) |
|
(106,969 |
) |
Interest expense, net |
50,721 |
|
|
42,309 |
|
|
100,645 |
|
|
83,649 |
|
Other (income) expenses, net |
148 |
|
|
1,388 |
|
|
98 |
|
|
6,144 |
|
Loss before income taxes |
(134,338 |
) |
|
(106,495 |
) |
|
(247,229 |
) |
|
(196,762 |
) |
Income tax benefit |
211 |
|
|
(1,910 |
) |
|
(3,131 |
) |
|
(5,271 |
) |
Net loss |
(134,549 |
) |
|
(104,585 |
) |
|
(244,098 |
) |
|
(191,491 |
) |
Net loss attributable to noncontrolling interests and redeemable
noncontrolling interests |
(120,987 |
) |
|
(103,292 |
) |
|
(202,577 |
) |
|
(176,336 |
) |
Net loss attributable to common stockholders |
$ |
(13,562 |
) |
|
$ |
(1,293 |
) |
|
$ |
(41,521 |
) |
|
$ |
(15,155 |
) |
Net loss per share attributable to common stockholders |
|
|
|
|
|
|
|
Basic |
$ |
(0.11 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.35 |
) |
|
$ |
(0.13 |
) |
Diluted |
$ |
(0.11 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.35 |
) |
|
$ |
(0.13 |
) |
Weighted average shares used to compute net loss per share
attributable to common stockholders |
|
|
|
|
|
|
|
Basic |
120,279 |
|
|
115,765 |
|
|
120,201 |
|
|
114,843 |
|
Diluted |
120,279 |
|
|
115,765 |
|
|
120,201 |
|
|
114,843 |
|
Consolidated Statements of Cash
Flows(In Thousands)
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Operating activities: |
|
|
|
|
|
|
|
Net loss |
$ |
(134,549 |
) |
|
$ |
(104,585 |
) |
|
$ |
(244,098 |
) |
|
$ |
(191,491 |
) |
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization, net of amortization of deferred
grants |
51,994 |
|
|
45,358 |
|
|
103,015 |
|
|
89,019 |
|
Deferred income taxes |
211 |
|
|
(1,910 |
) |
|
(3,131 |
) |
|
(5,271 |
) |
Stock-based compensation expense |
22,018 |
|
|
6,783 |
|
|
29,327 |
|
|
12,566 |
|
Bonus liability converted to RSUs |
(11,636 |
) |
|
— |
|
|
— |
|
|
— |
|
Interest on pass-through financing obligations |
5,896 |
|
|
5,906 |
|
|
11,773 |
|
|
12,378 |
|
Reduction in pass-through financing obligations |
(9,569 |
) |
|
(9,716 |
) |
|
(19,258 |
) |
|
(19,702 |
) |
Other noncash items |
8,859 |
|
|
5,225 |
|
|
20,301 |
|
|
6,714 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
Accounts receivable |
4,084 |
|
|
(12,701 |
) |
|
15,128 |
|
|
(12,848 |
) |
Inventories |
47,107 |
|
|
(13,645 |
) |
|
50,064 |
|
|
(10,362 |
) |
Prepaid and other assets |
(15,460 |
) |
|
(13,903 |
) |
|
(14,345 |
) |
|
(49,771 |
) |
Accounts payable |
(43,331 |
) |
|
21,010 |
|
|
(98,935 |
) |
|
(1,567 |
) |
Accrued expenses and other liabilities |
36,469 |
|
|
(6,199 |
) |
|
(15,198 |
) |
|
1,525 |
|
Deferred revenue |
2,539 |
|
|
10,347 |
|
|
13,104 |
|
|
112,195 |
|
Net cash (used in) provided by operating activities |
(35,368 |
) |
|
(68,030 |
) |
|
(152,253 |
) |
|
(56,615 |
) |
Investing activities: |
|
|
|
|
|
|
|
Payments for the costs of solar energy systems |
(154,720 |
) |
|
(189,550 |
) |
|
(362,080 |
) |
|
(388,430 |
) |
Purchases of property and equipment, net |
768 |
|
|
(11,433 |
) |
|
(2,337 |
) |
|
(13,950 |
) |
Net cash used in investing activities |
(153,952 |
) |
|
(200,983 |
) |
|
(364,417 |
) |
|
(402,380 |
) |
Financing activities: |
|
|
|
|
|
|
|
Proceeds from state tax credits, net of recapture |
6,219 |
|
|
(275 |
) |
|
6,219 |
|
|
2,329 |
|
Proceeds from issuance of recourse debt |
— |
|
|
15,000 |
|
|
43,475 |
|
|
55,000 |
|
Repayment of recourse debt |
(1,525 |
) |
|
(15,000 |
) |
|
(46,525 |
) |
|
(62,965 |
) |
Proceeds from issuance of non-recourse debt |
5,500 |
|
|
359,597 |
|
|
197,251 |
|
|
541,249 |
|
Repayment of non-recourse debt |
(24,315 |
) |
|
(214,226 |
) |
|
(37,312 |
) |
|
(313,474 |
) |
Payment of debt fees |
— |
|
|
(4,808 |
) |
|
— |
|
|
(7,462 |
) |
Proceeds from pass-through financing and other obligations |
1,959 |
|
|
3,497 |
|
|
3,721 |
|
|
5,282 |
|
Early repayment of pass-through financing obligation |
— |
|
|
— |
|
|
— |
|
|
(7,597 |
) |
Payment of finance lease obligations |
(2,592 |
) |
|
(3,444 |
) |
|
(5,545 |
) |
|
(6,445 |
) |
Contributions received from noncontrolling interests and redeemable
noncontrolling interests |
204,045 |
|
|
178,162 |
|
|
374,949 |
|
|
330,311 |
|
Distributions paid to noncontrolling interests and redeemable
noncontrolling interests |
(20,937 |
) |
|
(17,160 |
) |
|
(39,929 |
) |
|
(35,607 |
) |
Acquisition of noncontrolling interests |
— |
|
|
— |
|
|
— |
|
|
(4,600 |
) |
Proceeds from exercises of stock options, net of withholding taxes
paid on restricted stock units |
8,950 |
|
|
11,603 |
|
|
11,369 |
|
|
12,442 |
|
Net cash provided by financing activities |
177,304 |
|
|
312,946 |
|
|
507,673 |
|
|
508,463 |
|
Net change in cash and restricted cash |
(12,016 |
) |
|
43,933 |
|
|
(8,997 |
) |
|
49,468 |
|
Cash and restricted cash, beginning of period |
366,248 |
|
|
309,934 |
|
|
363,229 |
|
|
304,399 |
|
Cash and restricted cash, end of period |
$ |
354,232 |
|
|
$ |
353,867 |
|
|
$ |
354,232 |
|
|
$ |
353,867 |
|
Key Operating Metrics and Financial Metrics
|
|
Three Months EndedJune 30, |
|
|
2020 |
|
2019 |
Megawatts Deployed (during the period) |
|
|
78 |
|
|
103 |
Cumulative Megawatts Deployed
(end of period) |
|
|
2,163 |
|
|
1,763 |
Gross Earning Assets under Energy
Contract (end of period)(in millions) |
|
$ |
2,667 |
|
$ |
2,252 |
Gross Earning Assets Value of
Purchase or Renewal (end of period)(in millions) |
|
$ |
1,225 |
|
$ |
1,060 |
Gross Earning Assets (end of
period)(in millions) (1) |
|
$ |
3,892 |
|
$ |
3,312 |
Net Earning Assets (end of
period)(in millions) (1) |
|
$ |
1,633 |
|
$ |
1,429 |
|
|
Three Months Ended June 30, |
|
|
2020 |
|
2019 |
Project Value, Contracted Portion
(per watt) |
|
$ |
3.95 |
|
$ |
4.04 |
Project Value, Renewal Portion
(per watt) |
|
$ |
0.28 |
|
$ |
0.40 |
Total Project Value (per
watt) |
|
$ |
4.23 |
|
$ |
4.44 |
Creation Cost (per watt) (2) |
|
$ |
3.72 |
|
$ |
3.33 |
Unlevered NPV (per watt) (1) |
|
$ |
0.51 |
|
$ |
1.11 |
NPV (in millions) |
|
$ |
34 |
|
$ |
95 |
(1) Numbers may not sum due to rounding.
(2) Creation Cost for the three months ended June 30, 2020
includes an adjustment of $10.7 million for restructuring and
transaction related activities and $6.7 million for charges related
to litigation.
Definitions
Creation Cost includes (i) certain installation
and general and administrative costs after subtracting the gross
margin on solar energy systems and product sales divided by watts
deployed during the measurement period and (ii) certain sales and
marketing expenses under new Customer Agreements, net of
cancellations during the period divided by the related watts
deployed.
Customers refers to all parties (i) who have
executed Customer Agreements or cash sales agreements with us and
(ii) for whom we have internal confirmation that the applicable
solar energy system has reached notice to proceed or “NTP”, net of
cancellations. Customer Agreements refers to, collectively,
solar power purchase agreements and solar leases.
Gross Earning Assets represent the remaining
net cash flows (discounted at 6%) we expect to receive during the
initial term of our Customer Agreements (typically 20 or 25 years)
for systems that have been deployed as of the measurement date,
plus a discounted estimate of the value of the Customer Agreement
renewal term or solar energy system purchase at the end of the
initial term. Gross Earning Assets deducts estimated cash
distributions to investors in consolidated joint ventures and
estimated operating, maintenance and administrative expenses for
systems deployed as of the measurement date. In calculating Gross
Earning Assets, we deduct estimated cash distributions to our
project equity financing providers. In calculating Gross Earning
Assets, we do not deduct customer payments we are obligated to pass
through to investors in pass-through financing obligations as these
amounts are reflected on our balance sheet as long-term and
short-term pass-through financing obligations, similar to the way
that debt obligations are presented. In determining our finance
strategy, we use pass-through financing obligations and long-term
debt in an equivalent fashion as the schedule of payments of
distributions to pass-through financing investors is more similar
to the payment of interest to lenders than the internal rates of
return (IRRs) paid to investors in other tax equity structures. We
calculate the Gross Earning Assets value of the purchase or renewal
amount at the expiration of the initial contract term assuming
either a system purchase or a five year renewal (for our 25-year
Customer Agreements) or a 10-year renewal (for our 20-year Customer
Agreements), in each case forecasting only a 30-year customer
relationship (although the customer may renew for additional years,
or purchase the system), at a contract rate equal to 90% of the
customer’s contractual rate in effect at the end of the initial
contract term. After the initial contract term, our Customer
Agreements typically automatically renew on an annual basis and the
rate is initially set at up to a 10% discount to then-prevailing
power prices. Gross Earning Assets Under Energy Contract represents
the remaining net cash flows during the initial term of our
Customer Agreements (less substantially all value from SRECs prior
to July 1, 2015), for systems deployed as of the measurement
date.
Gross Earning Assets Under Energy Contract
represents the remaining net cash flows during the initial term of
our Customer Agreements (less substantially all value from SRECs
prior to July 1, 2015), for systems deployed as of the measurement
date.
Gross Earning Assets Value of Purchase or
Renewal is the forecasted net present value we would
receive upon or following the expiration of the initial Customer
Agreement term (either in the form of cash payments during any
applicable renewal period or a system purchase at the end of the
initial term), for systems deployed as of the measurement date.
Megawatts Deployed represents the aggregate
megawatt production capacity of our solar energy systems, whether
sold directly to customers or subject to executed Customer
Agreements (i) for which we have confirmation that the systems are
installed on the roof, subject to final inspection, (ii) in the
case of certain system installations by our partners, for which we
have accrued at least 80% of the expected project cost, or (iii)
for multi-family and any other systems that have reached NTP,
measured on the percentage of the project that has been completed
based on expected project cost.
Net Earning Assets represents Gross Earning
Assets less both project level debt and pass-through financing
obligations, as of the same measurement date. Because estimated
cash distributions to our project equity financing partners are
deducted from Gross Earning Assets, a proportional share of the
corresponding project level debt is deducted from Net Earning
Assets.
NPV equals Unlevered NPV multiplied by leased
megawatts deployed in period.
NTP or Notice to Proceed
refers to our internal confirmation that a solar energy system has
met our installation requirements for size, equipment and
design.
Project Value represents the value of upfront
and future payments by customers, the benefits received from
utility and state incentives, as well as the present value of net
proceeds derived through investment funds. Specifically, Project
Value is calculated as the sum of the following items (all measured
on a per-watt basis with respect to megawatts deployed under
Customer Agreements during the period): (i) estimated Gross Earning
Assets, (ii) utility or upfront state incentives, (iii) upfront
payments from customers for deposits and partial or full
prepayments of amounts otherwise due under Customer Agreements and
which are not already included in Gross Earning Assets and (iv)
finance proceeds from tax equity investors, excluding cash true-up
payments or the value of asset contributions in lieu of cash
true-up payments made to investors. Project Value includes
contracted SRECs for all periods after July 1, 2015.
Unlevered NPV equals the difference between
Project Value and estimated Creation Cost on a per watt basis.
Investor & Analyst Contact:
Patrick JobinSenior Vice President, Finance &
IRinvestors@sunrun.com(415) 373-5206
Media Contact:
Andrew NewboldDirector of
Communicationspress@sunrun.com816-516-5809
Sunrun (NASDAQ:RUN)
Historical Stock Chart
From Mar 2024 to Apr 2024
Sunrun (NASDAQ:RUN)
Historical Stock Chart
From Apr 2023 to Apr 2024